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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Sans Souci who wrote (6364)	2/16/2000 3:12:00 PM
From: t2	Respond to of 24042

OT This morning, TD "announced" that they REDUCED the margin allowed on JDU shares from 70% to 50%. In addition, they reduced the max. allowable to be lent to $250K I don't know about you but I think the 250k limit is a good thing. It certainly makes me more comfortable. It actually cuts the risk for all account holders of TD going out of business due to a major market meltdown. If you go to the other banks' discount brokerage divisions, you should find that their limits are far lower. TD, being the biggest, was able to offer the high limits. I think Bank of Montreal is only around 100k. I bet all Canadian banks are going to do the same with JDU shares -- ie cut it down to 50% margin. I don't believe they act alone. Well at least I can sleep better now. <g>

To: Sans Souci who wrote (6364)	2/16/2000 5:22:00 PM
From: SJS	Read Replies (1) \| Respond to of 24042

Sans, Let's take another look at that. In case you didn't notice, Margin debt in the US just hit another all time high, about 450 BILLION of loans. Alan Greenspan is very concerned, as is the US Congress, that this is becoming too much. I think what's going on is tacit capitulation by large firms to raise requirments on stocks that are volatile, or high priced. I've seen it at Fidelity, too. I don't use margin often or for long, however I do know this: Any hint from the fed chairman, or more serious sable-rattling of changing margin requirements (ie tightening) will create a stampede of large proportions as positions MUST be liquidated. I don't need to tell you what' that would do the "golden goose", do I? <G> That's why he won't publically do anything, but lots of private actions such as just what you mentioned will be used to attempt mitigate the margin problem, and get it to slow. Raising interest rates also helps, as margin money gets more expensive, but that more trickle down reasoning. Many won't curtail their borrowing for 25 basis points more. However, if the margin requirments are increased, then that makes you come up with more of YOUR own cash. Steve