THIS TRANSCRIPT IS ISSUED ON THE UNDERSTANDING THAT IT IS TAKEN FROM A LIVE PROGRAMME AS IT WAS BROADCAST. THE NATURE OF LIVE BROADCASTING MEANS THAT NEITHER THE BBC NOR THE PARTICIPANTS IN THE PROGRAMME CAN GUARANTEE THE ACCURACY OF THE INFORMATION PRINTED HERE.

Tape Transcript by JANE TEMPLE

MONEY BOX LIVE

Presenter: Vincent Duggleby

Guests: Carl Weinburg Jeremy Batstone Alan Warner Ray Boulger Julie Lord

TRANSMISSION 17th SEPT 2001 1500 - 1530 RADIO 4

ANNOUNCER : It's two minutes past three and time for MONEY BOX LIVE with Vincent Duggleby:

DUGGLEBY: Good afternoon. It's just over half an hour since Wall Street opened for trading after its longest closure since the first World War. Indeed, the word war has been very much in evidence in statements from President Bush and other American leaders. It may appear trite to talk about the worries of investors over losing money or profiting from shares when so many in the financial district of New York have lost their lives, but the market is perhaps the most critical measure for a country which survives and thrives on a capitalist economy. As you've just heard, the market opened after 2 minutes silence and the singing of the American national anthem. Treasury secretary Paul O'Neil was also there and earlier he had this message for investors:

O'NEIL: This is a time to buy America - we're going to show resilience, that people out there in the farms and factories and shops are going to put America back on a fast track. We're going to stick our thumb in the eye of the murderers who did these awful things and demonstrate to the world America's got a backbone and we're going to buy America.

DUGGLEBY: And that message was received very enthusiastically on the floor of the New York stock exchange, but we're joined now by Carl Weinburg who's chief economist of High Frequency Economics in New York. Carl, can you tell what the market has reacted to in the first half hour?

WEINBURG Well right now the market is enthusiastically selling off. It's down 537 points. It just took two big drops in just the last few minutes. It's obviously seeking a bottom. I'm personally very bullish on stocks in the medium term, the long term. I think once it finds its floor today stocks have nowhere to go but up. I agree with the Treasury Secretary, with his predecessor who spoke on national television last night that America's fundamentally sound and that their economic outlook is dented but not damaged. But right now the markets are going through a technical you know wake up from a five day slumber and - a four day slumber and it's - it's not very pretty.

DUGGLEBY: Indeed, the market did hold up for the first twenty seven or twenty eight minutes but it has slipped sharply. Perhaps slightly surprising that if the European markets are anything to go by we've taken about a 10% hit. Would you say that's the sort of level at which Wall Street may decide it's prudent to settle?

WEINBURG: Absolutely not. I don't see any correlation between what's happening in Europe and what's happening in the US. Up until we had gone into this big decline - I'm sorry up until we shut down our markets last Tuesday, European stocks had fallen about 23% on the Euro and New York stocks were down only about 8 or 9%. There's something different happening in Europe than happening in the United States and I wouldn't consider pricing US stocks off of European stocks today. It's a different phenomenon.

DUGGLEBY: So essentially we're talking about a delay, not a full stop?

WEINBURG: I believe that's correct. I think that you know it takes a while for all the stocks to trade the first couple of times. There will be a lot of bear orders early on. But you know, don't underestimate the so called patriotic trade - there are a lot of people out there including myself who have buy orders in there at the start of the market today and who will buy as shares become more attractive on the way down. I don't see this as a one way street or as a panic. This morning's drop is just you know factoring in a whole lot of new influences on the market and in one brief second - four days' worth of a lot of news coming in, in one brief second and we shouldn't be scared by where we are right now - just I'm looking for a bottom.

DUGGLEBY: Carl thank you very much indeed. Now let's move to Jeremy Batstone, head of research at NatWest's stockbrokers - he's in the London Stock Exchange. Jeremy, that quick fall in New York - has that come through into the London market yet?

BATSTONE: Well the London market is in positive territory if you measure it by the bench mark 100 index. Had been up as much as 80 odd points actually at one stage this morning, but is now only up 29 points as we - as you've already reported. We've had that sharp dip in the Dow around about three o'clock.

DUGGLEBY: Do you subscribe to Carl Weinburg's fairly bullish noises about the trend in the Wall Street market - in other words it can withstand any substantial falls and on that basis presumably London should not then go substantially lower?

BATSTONE: Yes I - broadly speaking I do. I think that Wall Street is proving itself fairly resilient. It's falling about 5 or 6% which is I'm bound to say fairly similar to the falls we've had in the UK last week. The issue now of course becomes one of how robust is the American economy going to be and what is the outlook for future profitability. There maybe a patriotic inspired rally but after that I'm afraid some hard questions about the extent of the damage to the US economy will be asked.

DUGGLEBY: Stay with us Jeremy because we'll have some calls for you in a short time. Alan Warner now from Douglas Deakin Young. Alan, what have you been saying to your clients - just sit tight?

WARNER: Well for the most part sit tight. I mean I think it's a question of people who are in old economy stocks that haven't fallen too hard - if they want to realise some cash then that's probably where to look - typically you know the banking, oil and pharmaceutical sectors, but generally speaking they've taken a big knock obviously on TMT stocks. I think it's a question of sit tight, wait for better times medium term.

DUGGLEBY: But realistically, there is very little prospect of people emerging from this year unless they're incredibly lucky with other than fairly substantial losses. I mean as we know the 100 share index imperfect as it maybe is down by 30% and that's a severe loss?

WARNER: Indeed, most investors are going to have suffered severe losses. Obviously those losses will be greater if last year they moved heavily into TMT stocks - well obviously quite a lot of private clients did so they're suffering badly now.

DUGGLEBY TMT meaning?

WARNER: Telecoms, media and technology stocks.

DUGGLEBY: Indeed. Julie Lord - now she's a financial adviser in Cardiff with Cavendish Financial Management. Julie, you can perhaps take a little more of a detached view from the capital but does anything you've heard so far in terms of the market movements cause you concern?

LORD: No it doesn't. I think I'm broadly in agreement with everything that's been said so far. I think that there is - I do feel rather bullish that we're heading towards a bottom somewhere here and therefore it's probably quite a good time to buy if people really do feel that they're brave enough - given that we have had a 30% drop on the year in the FTSE then I think they would have to be pretty brave to go in and therefore perhaps they might like to move in - in stages rather than with big lump sums immediately.

DUGGLEBY: It's perhaps fortunate that the time-table of investment if you like - the investor year - we're not actually up against the deadlines for ISAs - so you don't - you're not in the invidious position of having to sort tell people to jump in otherwise they miss the boat?

LORD: No that's right. And a lot of people have elected to buy their individual savings accounts, and indeed many of their other investments on a regular monthly savings plan basis which of course will reduce the risk by helping them to buy the units at different average prices throughout the year.

DUGGLEBY: But clearly things - there are things to avoid aren't there?

LORD: Yes there are things to avoid and I would say that anything really that is going to worry people - make them lose sleep at night is not to be invested in - an awful lot of our clients are sitting quite heavily in cash at the moment, and probably quite rightly. Some of them have taken the view that now is a bottom and they're going to put some of that cash into the market but they're still going to hold on to a fair bit.

DUGGLEBY: Ray Boulger - thank you Julie. Ray Boulger now is technical director from Charcoal mortgage brokers. Now we haven't mentioned the impact of the cut in the American interest rates which is half a percent - it's about the 8th cut they've done. They've cut much more dramatically than the Bank of England. What's behind the Bank of England's caution in cutting interest rates? - it's something to do with mortgages isn't it?

BOULGER: Well certainly they have been concerned about stimulating consumer demand too much, but I think it's also worth noting that one of the reasons why the UK economy has remained quite strong is because of demand generated by the housing market. People do feel wealthier when their house prices are going up and that's undoubtedly been a factor behind the economy remaining quite strong for the last year or two.

DUGGLEBY: Because the Americans I mean do depend for their consumption very much upon the - the price of their stocks and shares. In this country, is it relative easy then, or has it been the case that people have raised money to spend by increasing their mortgages?

BOULGER: Well it's certainly easier to do that. I wouldn't say we've seen a huge increase in the amount of that compared with a year or two ago, but if you look at the situation now compared with say the mid l990s, then people have a lot more equity in their property generally and therefore they have that option when they want to raise cash cheaply which after the negative equity problems they didn't have.

DUGGLEBY: Let me just quickly go back to Jeremy Batstone in Nat West stockbrokers. Jeremy, do you expect the Bank of England to come down by a quarter percent - does the market now expect that in response to America's cut?

BATSTONE: Yes I do. I think that central banks around the world have the opportunity now to cut interest rates quite aggressively. There were some concerns before that about stoking up inflationary pressure in the future but they clearly have the perfect excuse to cut rates quite hard.

DUGGLEBY: Indeed. Right now let's pick up on some of our callers. Jack in Camberley?

JACK: Good afternoon Money Box. I would first simply like to express my own sympathy to the victims of the disaster - but going on from there my question is fairly simple - by definition you can't sell anything unless someone is buying and I would like to know who it is - individuals, institutions - who is it who's buying the shares at the moment? Do they know something the rest of us don't know? They must have some confidence in the future?

DUGGLEBY: Indeed. Let me just go back to you Jeremy Batstone because I'm looking at Wall Street. I'm looking at the DOW - it's down now 572. Now when a market falls is it simply that there are more buyers than sellers? - is it just like that?

BATSTONE: It can be like that

DUGGLEBY: Sorry sellers rather than buyers?

BATSTONE: Yeah it can be like that of course we also get the situation perhaps more so in America than in the UK where we have a different trading system, where market makers mark their prices down in anticipation of falls so although the market is down in America a lot it may actually not be indicative of the amount of volume being done.

DUGGLEBY So in other words it's - it's what's called precautionary marking down?

BATSTONE: Exactly so

DUGGLEBY: So although it appears Alan that people are selling shares, in fact it isn't - maybe quite small amounts so it would be a case of perhaps a few thousand being offered and nobody taking them?

WARNER: well that's right very small volumes. And in some cases the market makers will be taking the shares on to their own books if they reckon they're buying them off private investors for the sake of argument at a knock down price. But there will be some insurance companies out there in particular that are taking a long term view - perhaps insurance companies more than pension funds where there's a tendency to reposition from equities to a fixed interest to take care of their long term liabilities.

DUGGLEBY: This - this question here Jeremy about - we've heard that the American authorities and the Bank of England also have put massive amounts of liquidity - well that means cash - is that - where is that cash? What is it doing?

BATSTONE: Well essentially it is oiling the wheels of the financial system and it's ensuring that the process by which trading and settlement within the financial markets can continue smoothly - it's extremely important because whilst people maybe able to buy and sell obviously there has to be efficient settlement as well.

DUGGLEBY: Somebody has to underwrite the overdraft or put the cash in the bank to pay for it

BATSTONE: That's one way of looking at it yes

DUGGLEBY: So to avoid a shortage of physical money being - to avoid that shortage taking place for people who perhaps might not instantly be able to necessarily raise the cash but have to and that's where the liquidity is available either to firms or individuals?

BATSTONE: That's right.

DUGGLEBY: Okay - hope that answers the question. Now we'll go to Nigel in Mull

NIGEL: Hello there hi. Yes my question really is concerning the decline in the UK stock market over the last few months. We have an investment that we're looking to develop for my father that's spread between unit trusts, Peps and ISAs and it's really to do with whether the time is now to shed the unit trusts and put them into bonds?

DUGGLEBY: You've inherited this money have you?

NIGEL: That's right yes My father passed away and it's inheritance basically

DUGGLEBY: It's all cleared through probate?

NIGEL: No it hasn't no. I mean the probation will be cleared within the next week or two.

DUGGLEBY Ah so you're asking what - what perhaps the executors should do - whether they should realise or what?

NIGEL: Yes that's it - whether to get rid of the unit trusts and put them into - put the money into bonds or whether to sit tight and if so how long for?

DUGGLEBY: Right can I fire that one at you Julie - here's an estate consisting of various assets - do you pass the assets over intact or do you liquidate them first?

LORD: Well I think the first question we've got to ask if who are the beneficiaries and what's their particular financial position - is the money needed immediately? - or can the beneficiaries take a bit of a back seat and a longer term view and sit on it? My personal view is that if they can take a back seat and sit on it then they ought to do that. And certainly it's not a very good time for moving out of equity related investments into bonds while everything is so gloomy.

DUGGLEBY: Nigel, of course there will be tax considerations here - I regret to say because if you've inherited the shares at the date of death it is quite likely they will have been valued much higher than they are today which means Alan Warner that there is large in-built losses?

WARNER: Well large in built losses

DUGGLEBY: Tax allowable losses?

WARNER: Yes tax allowable losses that if the assets are transferred to you first then you may be able to use those losses in the future so it's probably a case of transferring the assets to the beneficiaries to enable them to make use of those losses going forward. If they're left in the estate they're not going to be used.

DUGGLEBY: But there is here an opportunity for re-balancing the portfolio, so it wouldn't be correct to say look don't touch anything because if you have got a very large loss and it's allowable it's different from somebody whose for example seen a share rise a lot and then fall back and get them to square one. Here is a loss that could be used?

WARNER: Well that's fair comment. It does depend very much on the nature of the unit trusts we're in. If they're in sectors that have fallen very hard then I'd go along with Julie - it would be a pity to sell. If on the other hand they're actually..?. very much to old economy stocks which haven't really fallen very hard then this might be a moment to take some cash out and re-position - take a more cautious view if you want to sleep easily for the next few months.

DUGGLEBY: And just remember again Nigel on a technical point - an executor can sell the share and it can be bought back in the name of the beneficiary on a bed and breakfast basis, and that does not breach the bed and breakfast rules. Okay?

NIGEL: What does that actually mean?

DUGGLEBY: Well that means you can say sell shares in British Airways - you create the loss but buy them back immediately at the same price. So therefore you have bought them in the beneficiaries name at a much lower price and therefore of course you will have achieved both a loss and the potential for future gain. It's worth just discussing that technique with an adviser because they'll tell you - they'll tell you how to do it. But the executor can act both as an executor and - and as - in the interests of the beneficiaries. Alan, you wanted just a quick ?

WARNER: Yes there are inheritance tax issues here as well. If - if there's inheritance being paid on this estate then there maybe a case for selling and replacing the sell value with a probate value

DUGGLEBY: Sure that's right. More -obviously we could say on that but we haven't got the time to go into the details of managing an estate at this stage, so let's move on to Clive now in Oxford:

CLIVE: We're buying a house which is taking up all our savings. We've exchanged contracts so we're committed and can't withdraw. The balance of the purchase price - 90% is on Treasury reserve on a deal which expires on Wednesday. What we really want to know is, is it at risk?

DUGGLEBY: Well I don't think so but I'll just check with Ray Boulger?

BOULGER: No well clearly the fund's not at risk if they're in a treasury investment and I think there's absolutely no question you must go ahead with the completion. First of all if you don't you stand to risk the deposit you put down. Secondly, I don't think one needs to have the same concerns about the housing market as one has about the investment market. Over the last few days in our estate agency division we've not seen any significant fall off, in fact some branches have been even busier. So we're not seeing any signs that people are actually getting concerned about the housing market. The Bank of England base rate cut we're expecting and indeed the money market cuts we've already seen are filtering through to lower mortgage rates and that's going to tend to counteract any concerns people have so I would see absolutely no reason to have any concerns on this score.

DUGGLEBY: Mmm- indeed and I think the point here is that - is that your money - you're quite right to keep your money on treasury reserve because that's the sort of thing which enables you to get a market related interest rate and of course you can tie it up for quite short periods of time which is also very convenient, so for anybody for example who wished to delay or perhaps negotiate a settlement a bit later then that's the obvious course to do isn't it - just roll the deposit over and say well look we'll - we'll agree a settlement in a month rather than say two weeks - you can do that?

BOULGER: That's right. I mean most of the banks will give you a good treasury rate if it's a fairly decent sum of money and so that's certainly a sensible option.

CLIVE: I learnt a strange thing and that is that if I took it out and just put it back on deposit in the bank in an ordinary current account it is no safer in a current account than it is on a deal.

DUGGLEBY: Well indeed because the bank stands behind it - I mean essentially you know Barclays is Barclays - NatWest is NatWest. Thank you for that call - now just looking at the markets -Wall Street is continuing to fall fairly sharply- it's now actually gone below 9000 down 626 points - comment from you Jeremy Batstone?

BATSTONE: Yes poor old Mr Weinburg is still not getting anything from his buy order - how lucky to have the time

DUGGLEBY: Mmm indeed but the American authorities are still making noises saying you know this is just - this is just a perfectly acceptable reaction and I take it that you would still regard - I mean what is your view about an acceptable close? - I mean let's try I know it's absolutely crazy and difficult but I mean come nine o'clock tonight - I mean would you be worried if the DOW had fallen say a 1000 points?

BATSTONE: Yes I certainly would. I personally believe that there may very well be some form of relief rally later on in the day. I think that if we saw the DOW down between 3 and 5% that would be pretty good news.

DUGGLEBY: Okay, Alan what's your view on that?

WARNER: I fear it will be a little bit more than that - 5 or 6% - after all that's nothing like as much as European markets fell last week and whatever the first chap said from America I fear that there is a link between the markets here and in America.

DUGGLEBY: So you're comfortable with 5 to 600 points but after that you'd begin to get a little more uneasy?

WARNER: After that I'd be uneasy yes

DUGGLEBY: Okay Julie your view?

LORD: Well I think it's early days. The market's not been open an hour yet in New York and of course if it follows the same pattern as the FTSE did this morning then that also opened down and rallied by lunchtime, so I think that's probably going to happen at some point during the day - but yes I think we might even see as much as 7 or 800 before it does bounce back.

DUGGLEBY: Mmm right - let's take another call. Ruth in Stockport?

RUTH: Hello - I've got an investment that's maturing in October and I've got the opportunity to invest it again via an ISA at a fixed rate of 33% over 3 years and with things as they are I'm just wondering whether it's a good idea to do it now or to you know to sell this and leave it till later on?

DUGGLEBY: Interesting question, and I do stress this word fixed rate - Julie, does that appeal you for a cautious investor - locking into a fixed rate?

LORD: Well at the moment yes I would say certainly if it is a fixed rate and there aren't any funny little derivative linked type guarantees - then yes I would definitely go for that, obviously depending on whether or not Ruth can afford to tie up the money for that length of time.

DUGGLEBY: Alan?

WARNER: Well - 33% over three years sounds too good to be true

DUGGLEBY: Sounds as though it's market linked doesn't it?

WARNER: So I suspect there's a little catch there

RUTH: Yes if I could just come in again - the conditions are return of full capital as long as the DOW Jones doesn't fall below 20%

DUGGLEBY: Ah yes it's one of these complicated stock market related investments - Julie?

LORD: Yes I think in that case perhaps Ruth, unless you're what we might call a very sophisticated investor and you understand these types of investment, then possibly stay well clear. As the gentleman said it does sound too good to be true for a fixed rate - you do have to look much more closely at the small print.

DUGGLEBY: So it is more of a gamble than you might think - perhaps not the time to commit yourself on that sort of product. Well while we're on the subject of fixed rates, Ray Boulger are fixed rate mortgages going to become available at reduced rate if the Bank of England comes in with a quarter or a half percent cut?

BOULGER: Well it's actually happening in advance of that because the money markets are anticipating a base rate cut of at least a quarter point. And we saw at the end of last week several lenders come out with some cheaper two year fixed rates - Portman for example are now offering a fixed rate of 4.75% for two years with no redemption penalty beyond the two years, so that's anticipating the Bank of England. The interest rate cuts in the money market have been mainly concentrated in the shorter end - say two and three years, so we've not seen such a big reduction in the five years and longer, but I think what's going to happen now is that people will concentrate on buying two and three year fixed rates because the differential is increasing and that's the exact opposite of what lenders want to do because they want to try and tie them in for longer.

DUGGLEBY: As long as interest rates are set to fall of course people do not necessarily benefit from the fixed rate but there does come a time when it has to turn around - have you any views about - for those who are perhaps considering buying or re-mortgaging as to when variable and fixed will perhaps change towards variable being a better bet?

BOULGER: Well I think at the moment there's still a strong argument for going for a discounted rate - you can get discounted rates already that take you down to about 4.5% for two years and with the expected base rate cut that's going to come lower. So if you want flexibility certainly go for a discounted rate but don't wait too long to get the fixed rate. The mistake most people make is waiting for fixed rates to bottom out and they expect them to bottom out when base rates bottom out and that doesn't happen. Fixed rates anticipate base rate movements so the time to buy a fixed rate would be - will be before bank base rates bottomed.

DUGGLEBY: Right, let's bring in Karen from Oswestry:

KAREN: Oh hello. Good afternoon yeah- I have endowment policy with Friends Provident which I took out about 10 years ago in respect of a property I purchased then. I've long since sold the property but I've continued with the policy. Problem is I can't really afford the premiums for it anymore and also endowments haven't been doing too well - I simply don't know what to do with it. How do I redeem it?

DUGGLEBY: 10 years old?

KAREN: 10 years old now yes

DUGGLEBY: What's the original term of the policy?

KAREN: 25 years

DUGGLEBY: 10 into a 25 year - Alan, any ideas on that?

WARNER: Well it's just being going long enough for her to consider selling it on the second hand market so possibility is number one are get in touch with a firm that specialises in this field and see what they will buy it for. First though ask Friends Provident for the surrender value and don't forget that there's a third alternative and that is to make the policy paid up - that's to say pay no further premiums but leave the policy in place.

DUGGLEBY: When you say go into somebody who buys these policies - is that the traded endowment policies?

WARNER: Traded endowments or conceivably auction - but most likely traded endowments.

DUGGLEBY: Okay, Julie presumably you'd echo that view?

LORD: Well yes in general but with the caveat that we have to look at it more closely at Karen's circumstances. If she can't afford to pay the premiums anymore then possibly it maybe that actually the encashment of the plan one way or another whether it's on the second hand endowment market or otherwise is going to be something that might be valuable to her. So if she actually needs the capital then take it because as you quite rightly say endowments aren't performing particularly well - with profits in particular have been hit very badly - just you know use your common sense really.

DUGGLEBY: I mean do you take the view Alan that they're not going to be a terribly brilliant investment over the next two to three years because by definition they are a reflection of what's going on in the stock market and inevitably the stock market's not done well?

WARNER: I think that's fair comment on a two to three year view they're not going to be very attractive and it's probably a case of the surrender of the sale on the open market.

DUGGLEBY: Interesting here Ray - that of course this was an endowment originally bought to back a mortgage and there's lots of people with endowments and mortgages as well and they are not happy bunnies?

BOULGER: That's right - well just one particular point to add to what's been said and that is that if Karen does sell the policy then she will lose the life cover. Now she may not need the life cover so much now because she does have the mortgage but it's always a point to bear in mind - to consider whether you need to replace the life cover.

DUGGLEBY: Right okay we must move on now to Dave in Leicester - hello Dave:

DAVE Hi - I've just got a general background question really which is I hate to ask this question really but - in regard to the tremendous loss of life and indeed of property in New York, where ultimately is the burden for those insurance policies going to fall - to what extent is London do you think involved - sort of percentage?

DUGGLEBY: Jeremy Batstone - can you help?

BATSTONE: Difficult at the moment to quantify but of course if it's perceived as an act of war then the expectation is in the United States at least that the government may pick up the majority of the tab. Nonetheless, many insurance companies reinsure huge risks such as the World Trade Center that the burden of payment or claims tends to move on to the reinsurance companies or Lloyds of London, and I think last week I'm right in saying that Lloyds came out with a comment between 20 and 40 billion , which is pretty significant and one or two syndicates within Lloyds may find the going pretty rough I think.

DUGGLEBY: The big insurance companies in this country - private investors here will think of the shares they received in the old Norwich Union - right now part of CGNU - others may think of Friends Provident or some of the privatisations which have occurred. What is the news for them - have their shares gone down with the rest of the market?

BATSTONE: Yes financial stocks generally speaking did take a very big hit on the day and have continued to trade weakly over the rest of the week. CGNU which is of course now the business that Norwich Union is part of I think quantified their - the extent of their losses at about 35 million pounds - that's obviously a very first estimate - may not necessarily be one they want to be held to. CGNU shares are actually up 20 today. Friends Provident I would imagine that their exposure is very little - not very much exposure in North America for them - Royal Sun Alliance has got quite a lot.

DUGGLEBY: So they would be potentially the weakest. But again, the problem with these sorts of things is the market makers have spotted that a long time before anybody else and they've already made adjustments?

BATSTONE: Indeed so. Indeed if as some of your guests were saying the potential is now for key investors to look ahead to times of economic recovery then for those investors with a reasonably high appetite for risk perhaps the economically sensitive banks and insurers might be the ones to look at

DUGGLEBY: Indeed. We've got another question on mortgages from Maureen in Winchester:

MAUREEN: Hello there. My - we have a mortgage outstanding on a second home which is actually currently standing at �14,000 - but if we had �12,000 to invest which we haven't invested because of the current situation - would it be better to pay off that mortgage?

DUGGLEBY: Alan?

WARNER: Well if there's no penalty repaying the mortgage - my advice in this current market would be to repay the mortgage - clear the loan, reduce risk of exposure and sleep easily at night.

DUGGLEBY: Julie?

LORD: Well I think I would agree with that unless Maureen you really feel that you want to stick your neck out and you think this is an excellent buying opportunity and you really can't refuse to get into the market - I'd be tempted to get rid of the debt.

MAUREEN: Alright

DUGGLEBY: And Ray - I know you're in the business of selling mortgages but people do come to you and say well I want to pay it back?

BOULGER: Absolutely and I think in this case - this is a classic example where it makes no sense to have money in the bank earning a lower rate of interest than the woman was certainly paying on the mortgage and paying tax on the interest so I would certainly pay the mortgage off.

DUGGLEBY: Okay well thank you very much - we've got time now to go back to Jeremy Batstone - I see the DOW's just coming back - coming into more favourable territory - still down Jeremy - what's the position?

BATSTONE: Down pretty sharply still but only off 587 points so it's clawed its way back over 9000 - Mr. Weinburg's probably sold by now

DUGGLEBY: Indeed and the FTSE?

BATSTONE: FTSE is up 85

DUGGLEBY: That's going up - that's quite sharply higher?

BATSTONE: I think again as I say the UK and European markets are enthusiastic about the way in which the controlled way in which the US stocks have opened.

DUGGLEBY: Okay many thanks to you Jeremy - head of research at NatWest stockbrokers for joining us. We've had Carl Weinburg from New York, Ray Boulger from Charcoal Mortgage Brokers here in the studio with Alan Warner from Douglas Deakin Young and Julie Lord, thanks to you for joining us from Cardiff. We've run out of time. All I have to say is that there is a helpline on 08700 100 400 and our website for which I haven't got time to tell you. I'll be back next Monday at the same time and Paul Lewis will be here with MONEY BOX at noon on Saturday - bye for now.

BACK ANNO: That was Vincent Duggleby and the producer was Jennifer Clarke.