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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (49790)	5/11/2004 12:56:21 AM
From: Taikun	Respond to of 74559

The only reason hold paper anything is the prospect of capital gain. Take that away and there is no feel good. Derivatives can't put food in the fridge, gas in the car. That is why Buffett is so ticked off. He owns the gold but speculators can use derivatives to make money while he has to own the physical asset. This will change. Another discussion board was going over the prospects of a major investment bank, hedge fund, market maker or derivatives shop going belly up. How far would the exchanges, the SEC, the gov't go to protect Wall Street? What is deeply embedded in those online brokerage agreements that protects them from systemic failure. In the event of systemic failure, how much are those DIA $100 Puts really worth? My definition of the market bottom is that the market drops so low, and investors are so disenchanted, that nearly everyone stops talking about it, half of the financial newsletters and talk shows disappear, along with 2/3 the online brokerages, options shops and 3/4 of the hedge funds. The feel good effect will be relative to that moment. Using a tea bag twice for a cup of tea will be an investment.