Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (21191)	3/23/2000 10:15:00 PM
From: Mike Buckley	Respond to of 54805

Does anyone here recall the last time [the Fed changed margin requirements]? Somewhere on the Net is an historical listing of all changes in margin requirements dictated by the Fed. Someone sent it to me a couple years ago but I didn't keep it. --Mike Buckley

To: chaz who wrote (21191)	3/23/2000 10:36:00 PM
From: John Stichnoth	Respond to of 54805

Hi, chaz. re "can you explain?" In a word, "No" :o(. But I can explain my source. CNBC was interviewing a former Fed vice-chairman the morning of this most recent fomc meeting. He opined that there was very little discussion about the rate hike. instead, all conversation, both at the formal meeting and the night before at dinner, was over the growth in margin debt. The Fed (I understand) has the power to impose the maximum margin ratios. That number is presently 50%. Like you, I would assume that a policy change would be "managed" by a series of orchestrated leaks; there would be increasing discussion of it on the business talk shows; it would appear on meeting agendas formally. And, perhaps, it would be ratcheted down in small increments. Unless the intent would be to provide a stronger effect/shock to what Greenspan et al may view as a speculative bubble. In that case, Greenspan may want a good "pop"--and decide to surprise everybody. In the latter case, the ride Rambus has seen in recent days might be a lot more common. I emphasize that I have no specifics on this. I do think, however, that playing any of our recent Gorillas and gorilla-candidates (especially those with 100+ PE's) on margin is way beyond the Pale of Gorilla Gaming. The action on these if a major market disruption occurs will be just too large. And it is just these stocks that I expect are carried with more margin than most. (eg. SNDK, CREE, GMST, SEBL, NTAP, EMC), which will only aggravate the price swings.

To: chaz who wrote (21191)	3/23/2000 10:54:00 PM
From: straight life	Read Replies (4) \| Respond to of 54805

I think around '65 the Fed lowered margin rates from 65% to 50%.... just off the top of my head. It's not something they change very often. At one time it was 0% (margin not allowed) and in the twenties it was 10%, or so I believe. ps- It was great meeting you, and thanks for that helpful thing you did with the cab.

To: chaz who wrote (21191)	3/24/2000 12:10:00 AM
From: the dodger	Respond to of 54805

Chaz...not sure, but I THINK they raised margin requirements during the Nixon administration in 1973...the market (DJIA) moved from 1051 to something like 585 by December 1974...but there was more at work than margin requirements...like the Arab oil embargo, and the nastiest recession I've ever witnessed. (My age is showing.) There may have been more recent cases, but I have grown old and feeble and my mind sometimes plays tricks on me...what were we talking about ?!!! "the dodger"