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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (61236)	6/2/1999 12:03:00 PM
From: Ilaine	Read Replies (2) of 132070

Mike, please correct me if I am wrong, but all margin is, is a loan from the broker which uses the customer's stock as collateral. And if the collateral declines in value, the broker, by law, must require the customer to pay some of the loan off so that the proportion of collateral to loan equals the percentage previously agreed to. If they don't have the cash, then they have the option of getting it from somewhere else, or else selling some of their stock, possibly at a loss? If I am right, then aren't people who can't meet margin calls simply people who have borrowed money they can't repay? Why should I feel any sorrier for them than anyone else who has a hard time paying their debts?

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