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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Allan Harris who wrote (12211)3/3/2000 5:53:00 PM
From: Sam  Read Replies (2) of 15132
 
But Alan, do "broader libertarian issues" include the right to 50% margin? How about 25% margin? As much as I think that the term "libertarian" describes my political outlook better than any other label, I also think that clear, well-defined rules have to set in an arena like the equity market that make it harder for people to do stupid things like Dipy's neighbor. Yeah, it's none of my business in some sense if he wants to put his house in jeopary, but mania's really do happen, and they really do have really bad social consequences. Do you recall that Albanian scam a few years ago where virtually the entire population got caught up in a Ponzi scheme that got out of hand? The market can get like that, I don't agree with those who say that it already is like that, there are really only a few hundred stocks that are absurdly priced and many more than are downright cheap, but nonetheless, setting tighter margin rules is one way to keep it from getting out of hand.

Of course, if Dippy's neighbor is using home equity for his gambling, then tighter margin rules won't help him, but it could discourage him or people like him in the future by making the market a little less skewed, and slowing things down a little.
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