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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Schuh who wrote (106132)	4/16/2000 11:43:00 PM
From: Bill Jackson	Respond to of 1573841

Dan, That is the same set of rules we have here. 50%. However I have been an account holder for so long that I can actually buy on 100% margin, until the final settlement day of the month, at which point I must put up the 50% so their books show me in compliance on settlement day, most new clients have the three day settlement period. Now we are in the middle of the month and I imagine there is a similar degree of latitude with brokers there who hesitate to rein the good old boys. Discount brokers of course apply the rule firm and hard as they have small margins and will not tolerate a person being 1% undermargin before the computerised call goes out. Remember the brokerage house is still protected fully since you put up 50% to buy it and borrowed 50% your equity goes first and you still owe the 50%. At a 50% decline your equity is wiped out an the brokerage house will almost certainly sell you out to cover the debt unlee you deposit more cash. and any shortfall is still owed by you. In 1929 the debts exceeded the capability of the borrower as at 10% they could get deep over their heads and that is why they went bankrupt and even the brokerages went bankrupt in many cases. The risk is far less now. As you say, they are holdnig the line at 50% now and you get called at 49% and sole out enough to bring you in line on the third day. Tokyo down a bunch already....will it be a bad day? I think not, i think we will see a levelling or even a rally because we have pretty muh squeezed the margin debt out. People have been tightening up for a few weeks now and only the pure zero earnings .coms will get hammaered even more....and of course Rambus. Bill