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

To: Knighty Tin who wrote (89231)	2/5/2001 6:33:25 PM
From: Tommaso	Read Replies (1) \| Respond to of 132070

HI MB, I have some information and a question that may be revealing about markets right now. Late this afternoon I had a call from my broker. I am holding a short position on DIA, the Dow Index. He is informing me that 10% of my position may be covered in the next few days because they cannot borrow enough of the shares. This is not a margin call. I have no margin balance owing and there is a whole lot of cash and equity in the account. It appears that the brokerage has been borrowing day-to-day for its short positions and there is a squeeze on. From my point of view, it looks as if I am being told to help bail out the broker. I mean, couldn't they jusy buy the shares and straighten their position? I am not accusing anyone of anything illegal; no doubt the situation is covered by some fine print some place in a margin agreement that allows you to get screwed. Also, what does this tell us about what is going on with DIA and the Dow? There is a big short squeeze on the Dow, it looks to me. I am not too disturbed about this except to the extent that it might indicate serious capital problems at my brokerage. I don't mind losing less than 1% in a snafu, but I wouldn't want to be unable to liquidate my account at my pleasure.

To: Knighty Tin who wrote (89231)	2/5/2001 9:28:56 PM
From: Tommaso	Read Replies (2) \| Respond to of 132070

Well, well, live and learn. I have now found and studied the agreement for my short/margin account and find that yes, indeed, the brokerage has the right to cover, at my expense, a short position for which they can no longer borrow the stock. my, my, my. Well, I guess I have the right to liquidate my entire account and put the money in the bank, don't I. I have never got over the presumption of the insurance agent who --after I had at some sacrifice paid premiums into a whole life account for many years which had a guaranteed borrowing rate of 5% (when the prime as hitting like 18%) righteously lectured me about "stripping the capital from the company." Makes one insufferably smug to realize that one is better capitalized than a nationally known broker.