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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Brad Bolen who wrote (9354)	11/8/1997 8:17:00 PM
From: Dwight E. Karlsen	Read Replies (2) \| Respond to of 94695

Brad, I am not really surprised to hear of people investing with credit card money. I personally stay off of margin completely, except in certain circumstances. The last time I went on margin was this past Spring, in late April. I was off margin in less than one month. But it seem to me that, while there are always going to be people taking foolish risks, I can't believe that these people investing with credit card debt are in the majority. When/if the two individuals you mentioned get a margin call (and are unable to come up with the cash), then the securities get sold, and the foolish speculators get a premature end to their investing career. Then I suppose they declare personal bankruptcy, and the credit card company eats the loss. I have to say: The credit card companies have been cruisin' for a bruisin' for quite some time. The WSJ has at different times documented the trend. Who is not assaulted with pre-approved card offers less than three times a week? Of course, I have top credit rating, so I get solicited quite heavily. But such an aggressive pursuit of new accounts leads me to not be at all surprised to hear of the following: One of my second cousins is a welfare case. She's perfectly healthy, except that many years ago she had a bout with Scitsophrenia (sp?). So she doesn't bother work, but instead is content living in a trailer on welfare. Now I heard recently that she declared personal bankruptcy. Why? Because credit card companies had solicited her, and allowed her to run up 30K of debt. But she doesn't have anything to show for the spending. Of course, her boyfriend is a drug user, so that may account for something. Who knows. The point is, the credit card companies are taking foolish risks, and when they get taken to the cleaners, I can't muster much sympathy. Actually, if some of them go bankrupt themselves, maybe I'll get a little relief from the barrage of solicitations via mail and phone. I don't discount the deflation senario, far from it. It's a fact that many have observed and documented the fact that businesses are "unable" to raise prices. I also expect more companies to "come clean" on the impact from slowing SE Asian crisis. I didn't hear yet what Boeing said in re Asian impact, but since they have such a gargantuan record back-log of plane orders already, this may actually be a plus for them. In attempting to ramp up capacity, as you know Boeing has recently announced big one-time charges. DK