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To: donald martin who wrote (49350)	2/19/2000 12:23:00 PM
From: Bobby Yellin	Respond to of 116791

sorry-I tend to blame governments' policies of too big to fail in reference to meltdown in SE Asia etc..again..the meltdown in Russia suggested change in policy..remember years back a friend said don't worry about citibank going under..it is a great buy...government would never let it happen ..I think government policies help create the disasters and are forced to remedy them..just guessing of course

To: donald martin who wrote (49350)	2/20/2000 11:38:00 AM
From: long-gone	Respond to of 116791

Saturday February 19 3:33 PM ET Wall Street in Drunken Borrowing Binge NEW YORK (Reuters) - There's a lot of craziness on Wall Street. A clue? Investors are borrowing money like a bunch of drunken sailors so they can buy already overpriced stocks. Buying on margin, the Street's version of charging stock purchases on a credit card, went up at a heart-pounding pace in January, climbing to a record $243.5 billion from $228.5 billion in December. A decade ago, the debt load amounted to just $35 billion. Smart move? Probably not. Some experts say investors are doubling up on their bets, increasing the danger that they could suffer huge losses if stocks plunge. The market's high valuation has created enough of a risk for investors. But add the huge margin load and the risk together? Forget about it. Common sense says that people who borrow up to their eyeballs to trade stocks have no staying power when the market turns against them. The risky business in stocks has attracted the attention of the pinstriped suits at the Federal Reserve. But the central bankers and their chairman, Alan Greenspan, appear to fear that any attempt to take the air out of this speculative market bubble could set off an avalanche of selling. A strong economy has more often than not fostered a strong stock market. But in this New Economy, the stock market appears to be pulling the economy and making lots of people feel rich -- the so-called wealth effect. Dangerous? Sure. If the market crashes, then the economy could go downhill like a speeding bobsledder. What's the Fed to do? How about raising margins -- the down payment to buy stocks on credit? Last month, Greenspan said Wall Streeters were playing with fire in using debt to buy stocks. But the Fed chairman said the central bank did not think that raising margins -- investors put up 50 percent of their own cash before borrowing the other 50 percent -- is the best way to pop the market bubble. Alan Newman, editor of the Crosscurrents newsletter, said Greenspan has created a financial Frankenstein and the Fed chief is afraid that if he acts on the margins, the house of cards will come tumbling down. ``Margin debt versus gross domestic product is the highest it has been since the 'Roaring Twenties,' Newman said. ``Add in the resources of home equity lines and second mortgages and we are looking at a draconian level of debt versus equity.' Still, the jury is out on the effectiveness of margin increases in skimming off some of the speculative froth from the stock market. In 1951, the central bank raised margins to 75 percent from 50 percent. In 1955, it again boosted margins to 60 percent from 50 percent and months later it raised margins to 70 percent from 60 percent before lowering. In 1958, margins were lifted to 70 percent from 50 percent and in mid-1968 they climbed to 80 percent from 70 percent. ``Only in mid-1968 did any of these margin requirement hikes remotely coordinate with a deceleration in market momentum or a market peak,' says Warburg Dillon Read Plc. ``In short... dailynews.yahoo.com