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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (89231)	2/5/2001 6:33:25 PM
From: Tommaso	Read Replies (1) of 132070

HI MB, I have some information and a question that may be revealing about markets right now. Late this afternoon I had a call from my broker. I am holding a short position on DIA, the Dow Index. He is informing me that 10% of my position may be covered in the next few days because they cannot borrow enough of the shares. This is not a margin call. I have no margin balance owing and there is a whole lot of cash and equity in the account. It appears that the brokerage has been borrowing day-to-day for its short positions and there is a squeeze on. From my point of view, it looks as if I am being told to help bail out the broker. I mean, couldn't they jusy buy the shares and straighten their position? I am not accusing anyone of anything illegal; no doubt the situation is covered by some fine print some place in a margin agreement that allows you to get screwed. Also, what does this tell us about what is going on with DIA and the Dow? There is a big short squeeze on the Dow, it looks to me. I am not too disturbed about this except to the extent that it might indicate serious capital problems at my brokerage. I don't mind losing less than 1% in a snafu, but I wouldn't want to be unable to liquidate my account at my pleasure.

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