This is a partial transcript from "Your World with Neil Cavuto," October 3, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Well, you know, last time that stocks hit a record, we hit a wall, a bubble burst and, well, you know the rest of the story. So, is history repeating itself here? Let’s ask a woman who has seen her share of bull and bear markets, but doesn’t look a day of it. I’m talking about Muriel Siebert. And real estate market wunderkind, Jim Gillespie.

Muriel, what do you think, is this as good as it gets?

MURIEL SIEBERT, CHMN., PRES. & CEO, SIEBERT FINANCIAL CORPORATION: I think we are going to have a good market. We are going to continue to have a good market. There are maybe one or two things that could adversely affect it. One would be if housing really collapsed. And we have got an expert here. He can answer that better than I can. The other thing is if China started to sell our holdings and did not — or did not add to our holdings of bonds.

CAVUTO: But it is in its vested interest not to do that right now, China, right?

SIEBERT: Sure, it is.

CAVUTO: Right. But the housing thing is the wild card, right, Jim?

JIM GILLESPIE, PRES. & CEO, COLDWELL BANKER: Yes, it is. And housing is not going to collapse, I’m proud to say that to Muriel. The reason is, all of the indices that have made this a record day in the Dow, the same things that are positive for real estate. You just talked about the price of oil going down, you know, energy is off, inflation is under control, the 10-year Treasury is, what, 4.6, 4.65. You know, you have got unemployment under 5 percent. So things.

CAVUTO: Well, all those factors have been with the housing industry throughout this — I don’t know if you want to say, air coming out of bubble period or whatever, but all of those positives have been there and yet this has been happening.

GILLESPIE: Absolutely. But what we are seeing is we have got inventory at 10-year highs. Inventory of seven-and-a-half months, six- month is about an even supply. And the reason that the housing has been off this year and the number of homes sold is off about 7 or 8 percent, but, Neil, there is still appreciation in the country; but the reason the homes — sales have been off is that interest rates for the most part of the year have been up 1 percent.

And according to our National Association of Realtors, for every 1 percent interest rates go up, we lose about half a million buyers. And coincidentally that is exactly the number we are going to be at this year, 6.6 million (ph).

CAVUTO: So this is as bad as it gets?

GILLESPIE: Well, I’m not say it is as bad as it gets, but based upon everything that I said before and all of the indices, I think that, you know, the real estate bodes very well for the future.

CAVUTO: Let’s say he is wrong, and I am sure Jim and Coldwell Banker hope that is not the case, Muriel, but let’s say he is wrong and housing has some more hiccupping to do. There is another argument that says that benefits stocks. That money that up to now had been going away from stocks into real estate and now leaves real estate goes back into stocks.

SIEBERT: And I think there is another factor also. I think that collapse of Amaranth.

CAVUTO: Right. the hedge fund.

SIEBERT: The hedge fund, is.

CAVUTO: Now that collapsed because it made a bad bet on natural gas prices, right?

SIEBERT: Yes. That collapsed for that reason. But we had a tremendous amount of speculation in commodities, in gas, in oil, in other commodities. And I think people.

CAVUTO: Well, we could have more of that.

SIEBERT: I think that people will get back to stocks perhaps because the hedge funds, in my opinion, you have got to have a transparency, you need that in an industry that is that big and that highly leveraged. The minute that the stock exchange were to buy Euronext or one of the European exchanges, we are going to have a true global market. And if we have a true global market, in my opinion, we need global securities regulations, especially.

(CROSSTALK)

CAVUTO: So watch for the hedge funds. Barring that, you are still bullish?

SIEBERT: I am very bullish, because I think people will go back to buying stocks.

CAVUTO: OK. All right. The big question mark for you is the Fed, if it continues raising interest rates at some unforeseen time, a lot of people say it is worried about that, then all bets are off, right?

GILLESPIE: Well, if the Fed continues to raise interest rates, you still don’t know because what I look at is the 10-year Treasury. And last year, you know, for the last.

CAVUTO: That has been pretty stable.

GILLESPIE: two-and-a-half years, the Fed raised their rates and the Treasury went down and interest rates went down. So you never know, Neil.

CAVUTO: OK. You never know. Jim, final word on the subject. Muriel, I want to thank you very much.

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