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To: energyplay who wrote (39451)	10/10/2003 5:28:22 PM
From: TobagoJack	Respond to of 74559

Hi EP, <<Atherton>> … I believe my friend bought because (a) the house is 50% from the peak price, (b) he intends to move back to the Bay Area at some point, (c) the financing is cheap, and (d) it can be rented out at 2% yield, offsetting the carrying cost. I am concerned that my friend has (a) under estimated the full extent of the housing correction that will yet be, (b) the further cheapening of the then corrected houses due to less expensive dollar, and the sharply higher taxation that must be. I advised him to hedge by shorting housing shares and TLT, in waves, until the drama plays itself out. Chugs, Jay