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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: wily who wrote (82692)	8/5/2000 4:05:55 PM
From: Bilow	Respond to of 132070

Hi wily; Galbraith does give the total margin amounts for selected dates around the 29 debacle. But the impression I got was that the real problem wasn't the individual investor so much as the trusts. They were companies who's only (or main) business was the investing of money into other companies. (Think where INTC has been headed.) These companies could borrow money and use it to prop up the stock of the companies they bought into, and also their own stock, on downturns. (Think buy back.) When the market went deep south, the vast majority of the trusts went bankrupt. Individual investors got burned by putting their money into trusts, so that "professional" money managers could invest it for them. It was similar to nowadays, but subtly different. Probably the big thing was the banking situation, it is much better now, though more subject to inflation. By the way, I just took a look at the latest St. Louis federal reserve monthly figures and I would have to expect Greenspan to have to continue raising interest rates into the indefinite future. The last time things got this good, the fed had to raise short term rates well above 10% in order to bring inflation in check, and we all know what that did to the market. -- Carl