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To: chic_hearne who wrote (7905)	8/2/2000 9:41:22 AM
From: pater tenebrarum	Respond to of 436258

chic, percentage of what? if you're referring to the percentage of market cap stat, consider that the ATH reached in the '20's was before the time of derivatives, 125% mortgage loans, credit cards, car leasing, etc. in order to get the TRUE level of margin, all of those would need to be considered too. to give you an example: you have 30K in the market. now you want to buy a car, but you lease it instead of buying it, so as to leave your money in the market - effectively you have margined yourself. the actual margin debt is at levels higher than those seen before the '87 crash in terms of ratios (the one vs. market cap being one of those). however, the absolute level in dollar terms of almost $250 bn. is some 70% above year ago levels and creates a potential overhang the size of the absolute debt level for the market. there's no way the leverage in the market can be under-estimated - i take the absolutely stunning growth in margin debt over the last year as an indicator for the increase of total leverage in the market - when it unwinds, it will be like tidal wave. consider a 15% threshold in terms of overall market correction as the point where unwinding begins - the reason why all corrections that go beyond 10-15% always result in a series of panic dump days - it's forced unwinding of positions.