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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: kris b who wrote (75671)	12/14/2006 11:45:38 PM
From: The Vet	Read Replies (1) \| Respond to of 110194

kris you asked "Can all US households get $ 700 Billion annually out of these transaction to replace the equity they were pulling out of their homes?" Not likely, it's all spoken for in Goldman Sachs bonuses.. In fact there is a lot more "new" money created by short selling than you might initially expect. The total market cap of the entire market is over $14 trillion. If 10% of that was sold short there is $1.4 trillion of money generated out of thin air. Even if the total short position was only half that's still enough to cover your $700 billion... but of course it is completley unbacked by anything of value and could vanish in a flash. In a downturn of course the short money doesn't "evaporate" it just gets taken out of the equity of the long stock holders.