
Steve Hoy called this morning from South Carolina wondering what I thought about the market. Steve has a good bit of his investments in margin accounts and he is always getting calls from his broker. This morning he felt like he was backed into a corner with his Washington Mutual holding. He sold 500 shares at $9 a share while I was on the phone with him. If he didn’t, he feared he would lose it all. And of course as soon as he confirmed the sale he said, “I probably just sold at the bottom”. I don’t understand the strategy of margin accounts and I am the last person to ask for financial advice but it was good to hear his voice.
Steve is worried that the credit crisis will force people to put more on their charge cards and then eventually default on their credit card bills which will collapse the already weakened financial institutions. Steve said he had no confidence in Bush and he laid out his own plan to bail out the market. It was something like lowering the interest rates to 5% and back that with federally insured bonds which would allow people to refinance their homes so their payments were more in line with the value of their home.
Steve was business major at Indiana University when I met him. Maybe he will lay out his plan here in a comment because I have surely mangled the translation.
4 Comments















