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To: Lucretius who wrote (10681)	4/26/1998 12:53:00 PM
From: Terry Rose	Read Replies (4) \| Respond to of 116791

Lucretius, When the stock market boom goes to bust, these novice investors will discover not only that there is no money for redemptions at the price they paid but those that borrowed to join the game will still owe the principle. Say I borrow 200,000$ for a house that has a value of 50,000$ in order to sell it for 250,000$ to some other idiot during a real estate boom. The market goes bust and all I can get is 50,000$. I am now stuck with a loan for 150,000$ with nothing to show for it. These naive investors who are borrowing to buy stocks at their current overpriced levels will get hammered during the inevitable market correction. Not only will their paper wealth evaporate but they will be left holding the bag. A lot of the stock market rise over the past 18 years is rooted in the debt balloon. In 1982 the percent of U.S. household debt(as a % of personal disposable income) was at 68%. It is currently at 95% and climbing. Add this to the debt incurred in the yen-dollar trade in the 90's (borrowing yen at 0.5% and buying Treasuries at 5.5%) in order to buy stock and what you have is a stock market boom with an unsolid base of debt. This is a classic example of something for nothing. Terry,