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Politics : Ask Michael Burke

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To: Don Lloyd who wrote (82698)	8/5/2000 4:13:01 PM
From: Bilow	Read Replies (1) of 132070

Hi Don Lloyd; The Galbraith book says the same thing about call loan rates as you quote from Rothbard. In fact, he talks about the call loan rates a lot more than he does about the margin rates. I agree that Galbraith is a boneheaded liberal with regard to most of his understanding of economic reality. Some of his books are real howlers, in fact. But at issue was the question of margin rates, and that is a question of fact, not one of interpretation. On the other hand, I do like the way he uses the English language... The brokerages weren't harmed in the market decline, except by the loss of business. While the market did drop 90% (i.e. to to ten per cent of the peak), it took 3 years to do this, so they had plenty of time to sell out the positions of traders who over extended their margin. The lenders who got burned would mostly have been the people who bought the bonds of the high flying stocks. Particularly the trusts, which almost all crashed. -- Carl

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