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To: straight life who wrote (21199)	3/23/2000 11:04:00 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

straight life, It's not something they change very often. If I correctly remember the list of changes, there were a lot more changes in the earlier decades than in the later ones. in the twenties it was 10%, or so I believe. I don't have the facts in front of me either, but I think you're remembering that you could borrow with only ten cents on the dollar, which is a 90% margin. That's one of the problems that exacerbated the Great Crash of '29. People were margined to the hilt. --Mike

To: straight life who wrote (21199)	3/23/2000 11:19:00 PM
From: John Stichnoth	Respond to of 54805

RE margin Requirements--Here's the pertinent section of the act that gives the Fed the authority. (straight life--as a Lawyer you probably already have this memorized! :o) Securities Exchange Act of 1934 Section 7 -- Margin Requirements a.For the purpose of preventing the excessive use of credit for the purchase or carrying of securities, the Board of Governors of the Federal Reserve System shall, prior to the effective date of this section and from time to time thereafter, prescribe rules and regulations with respect to the amount of credit that may be initially extended and subsequently maintained on any security (other than an exempted security). For the initial extension of credit, such rules and regulations shall be based upon the following standard: An amount not greater than whichever is the higher of-- 1.55 per centum of the current market price of the security, or 2.100 per centum of the lowest market price of the security during the preceding thirty-six calendar months, but not more than 75 per centum of the current market price. Such rules and regulations may make appropriate provision with respect to the carrying of undermargined accounts for limited periods and under specified conditions; the withdrawal of funds or securities; the substitution or additional purchases of securities; the transfer of accounts from one lender to another; special or different margin requirements for delayed deliveries, short sales, arbitrage transactions, and securities to which paragraph (2) of this subsection does not apply; the bases and the methods to be used in calculating loans, and margins and market prices; and similar administrative adjustments and details. For the purposes of paragraph (2) of this subsection, until July 1, 1936, the lowest price at which a security has sold on or after July 1, 1933, shall be considered as the lowest price at which such security has sold during the preceding thirty-six calendar months. b.Notwithstanding the provisions of subsection (a) of this section, the Board of Governors of the Federal Reserve System, may, from time to time, with respect to all or specified securities or transactions, or classes of securities, or classes of transactions, by such rules and regulations 1.prescribe such lower margin requirements for the initial extension or maintenance of credit as it deems necessary or appropriate for the accommodation of commerce and industry, having due regard to the general credit situation of the country, and 2.prescribe such higher margin requirements for the initial extension or maintenance of credit as it may deem necessary or appropriate to prevent the excessive use of credit to finance transactions in securities. [There's more. But, that's enough] law.uc.edu

To: straight life who wrote (21199)	3/24/2000 4:13:00 AM
From: chaz	Respond to of 54805

ps- It was great meeting you, and thanks for that helpful thing you did with the cab. Simple explanation: I was hungrier and thirstier than the three of you combined, so I made a senior decision! Chaz

To: straight life who wrote (21199)	3/24/2000 4:45:00 AM
From: chaz	Read Replies (2) \| Respond to of 54805

SL: If memory serves, the Fed was established in 1931, so the 10% you refer to was, I believe, the Street's policy, not a government agency's. Also, the numbers are turned around...a 10% (equity) policy meant you could borrow $10 for every $1 in the account. (0% would mean you could borrow with no dollars.) Today it's 50% (equity)...borrow $1 for every $1 in the account...at least officially. However, many of the houses are imposing stricter rules, declaring some stocks not marginable (Datek has NTAP on that list) and imposing 60% and 70% (equity) lists for others. Chaz