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To: RocketMan who wrote (189)	12/29/1998 8:30:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 41369

Re playing with 10% margin: the numbers are scary..the amount of new money rolled into the market by US investors since 1994 equals the amount of money pulled out of real estate refinancing, some with 125% loans. LTCM was much much worse than 10% margin, rumor sez they borrowed a trillion dollars with about 5% down. That's why the feds and europeans have this coordinated rate cut..they're doing it for the bond market, and in spite of the stock market. There's so MUCH debt that the world is awash in unsalable debt, bad debt, the only debt that's a sure thing is treasury debt. As long as interest rates stay fixed or go down there's a chance to refinance and restructure it at lower interest rates. Japan has played this game for too long..they only thing they can do now is sell off their US treasury bonds to raise more money to pay off the debt. But the glut of bonds coming back to Greenspan is a disaster..it causes interest rates to go up. So to keep rates down, he cashes them in..monetizes the debt..floods the banking system with more cash...the derivative market is used to force commodities prices down to keep hyperinflation under control while Rubin's buddies figure out where to stuff this much debt. This is why I don't play the internet mania...it seems too much like a Ponzi scheme designed to raise a lot of capital quickly, to pay down bad debts in the multinational banks/brokers. These guys have trading computers faster than ours, they OWN the market makers. It can simply gap down 50% one day and they will be a billion, a trillion, richer. So simple. After all, most of the money is in 401Ks and won't be missed. and any money left on the sidelines will be happy to buy that 3 or 4% bond glut from Rubin's buddies.