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.

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

To: Don Lloyd who wrote (82698)	8/5/2000 4:13:01 PM
From: Bilow	Read Replies (1) \| Respond to of 132070

Hi Don Lloyd; The Galbraith book says the same thing about call loan rates as you quote from Rothbard. In fact, he talks about the call loan rates a lot more than he does about the margin rates. I agree that Galbraith is a boneheaded liberal with regard to most of his understanding of economic reality. Some of his books are real howlers, in fact. But at issue was the question of margin rates, and that is a question of fact, not one of interpretation. On the other hand, I do like the way he uses the English language... The brokerages weren't harmed in the market decline, except by the loss of business. While the market did drop 90% (i.e. to to ten per cent of the peak), it took 3 years to do this, so they had plenty of time to sell out the positions of traders who over extended their margin. The lenders who got burned would mostly have been the people who bought the bonds of the high flying stocks. Particularly the trusts, which almost all crashed. -- Carl

To: Don Lloyd who wrote (82698)	8/6/2000 6:27:38 PM
From: Bilow	Read Replies (1) \| Respond to of 132070

Hi Don Lloyd; I got interested in the state of the size of the margin loans back in the late 20s, and did more searching for figures from the Galbraith book. He says (p21) that by the end of 1928, the "call loan market" got to nearly $6 billion. It had been 1 to 1.5 billion in the early 20s. Any figure for the total market cap of late 1928? I guess there was about 100 mm people in the US at that time, so the total amount of margin money was about $60 per capita, but I don't have a feeling as to whether this was a lot of money back then. (But my guess is that it was quite a bit, given how much I remember McDonald's hamburgers as once costing.) -- Carl