Worth Repeating - NASDAQ and NSYE have just changed the margin requirements for day..

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Thought this was worth repeating....NASDAQ and NSYE have just changed the margin requirements for day traders from 75% to 25%. This is exactly what the Federal Reserve did just before the Crash in the 20s. They pumped in billions of dollars into the economy, pumped up the stockmarket, underwrote the banks so that stocks could be bought with 5% margin and then on one day, stopped all credit and caused the crash.

-- bb (b@b.b), December 15, 1999

Answers

NASDAQ and NSYE averages are down slightly right now. (11:00 EST) I wouldn't be surprised if we've already hit the top of the bubble.

-- Slobby Don (slobbydon@hotmail.com), December 15, 1999.

Thanks for the "heads up!" I'm tuned into CNN right now.

-- (ladybuckeye_59@yahoo.com), December 15, 1999.

Ominous chilly sensation created ..... Hmmmn. now, why would "they" being doing "this" right now?

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), December 15, 1999.

C'mon these investors Can't be that thick to not get it!?

Everyone must see the writing all the wall in big bold print!

Hold on to your hat for the remaining 2 weeks.

by the way anyone see that new gold commercial on CNBC with Coronado?

-- d----- (dciinc@aol.com), December 15, 1999.


Would someone please explain the "margin" theory ? I follow the stock market trends daily but am unsure what this post is about. Please help ???

-- Unknown (unknown@me.com), December 15, 1999.


Unknown - they just gave day traders more credit so they can buy more stock.

At 25% margin, they can buy 4 stocks for the price of one stock. The other 3 are bought on credit.

The problem with margins, is that the stock HAS to go up. If it doesn't, the best the trader can hope for is to only pay interest on the credit. If it goes down, he loses his shirt 4 times faster than if he had not bought on margin.

Jolly

-- Jollyprez (jolly@prez.com), December 15, 1999.


Scroll down to near the end of the following:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0020pV

Or use "Edit | Find in Page" for "margin" when you get to that page for comments by "Interested Spectator" on this.

-- A (A@AisA.com), December 15, 1999.


From TheStreet.com:

Full of Tough Talk, the NYSE and NASD Give Daytraders More Rope (By Caroline Humer, Staff Reporter)

12/13/99 5:40 PM ET

The next time the Securities and Exchange Commission starts talking about full disclosure, it may want to push the issue with the New York Stock Exchange and the National Association of Securities Dealers.

The NYSE and the NASD, which runs the Nasdaq, on Friday announced proposals for new margin rules for daytraders, increasing the minimum account balance to $25,000 from $2,000 for investors who make more than four daytrades a week on margin. Tough talk, right?

Well, what the joint press release didn't say was that the exchanges also will double the amount of money those traders can borrow from their brokerages. With $50,000, a daytrader may soon be able to buy $200,000 worth of stock instead of the $100,000 that the exchanges now allow for trading in the same day. Instead of buying, say, 500 shares of a 100-a-share stock, investors could buy 2,000 shares if they sold those shares before the end of the trading day. So much for the tough talk.

The lesson for the day, then, is that the exchanges used the press release to spin the proposals as being tough on daytraders, since daytraders are, of course, a scourge. Of the five bulleted points explaining the changes, three began with the word "restrict," and one with the word "prohibit." That tough-on-trading slant turned up in wire stories and in newspapers. It's probably no coincidence that it came on the back of a slew of press reports last month about the NYSE board voting to loosen borrowing standards with this new leverage...

As noted, the day traders can now just dig a hole a bit deeper and a bit faster. The exchanges "got tough" in the press releases and gently tapped day trading on the wrist in reality. Margin is the lifeblood of a speculative market. The exchanges will not do anything serious in that arena until and unless things get much, much nastier.

-- Mac (sneak@lurk.com), December 15, 1999.


Very German: Ach Du Scheisse.

Means: Besides my fears in regard to the upcoming rollover: THIS is more dangerous to world economy than any nuclear missle launch.

Train your kids to grow corn & vegs !

-- Rainbow (Rainbow@123easy.net), December 15, 1999.


They are desperate, as cracks are appearing, to keep the bubble alive until rollover.

They will then burst it, either naturally by letting y2k take it's course, or deliberatly - by creating "situations" and blaming them on y2k - so that they have a get out of jail free card.

AG/Billy Bob/The FED - all of the hook - blame it on y2k.

Who loses? The suckers in the market - the country.

fait accompli

-- Andy (2000EOD@prodigy.net), December 15, 1999.



Folks, implosion of the world market is the equivalent of the A- Bomb. The aftermath will be devastation, chaos, denial, and cancer (figuratively speaking).

Who says Y2K is not REAL?

Lisa

-- lisa (lisa@texasnetworks.com), December 15, 1999.


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