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.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (82071)	3/18/2001 12:20:19 PM
From: MythMan	Read Replies (1) \| Respond to of 436258

Margin debt has plummeted from the Naz 5K days

To: Ilaine who wrote (82071)	3/18/2001 1:37:37 PM
From: Perspective	Respond to of 436258

<Margin debt is going down and cash in margin and cash accounts is going up. > Not as quickly as Naz is dropping. Margin debt is only off some 33%. It rocketed from $130B to $278B between the fall of 1998 and March 2000. It needs to drop back to the 1998 low at a minimum before "falling margin debt" becomes a positive for the market. BC

To: Ilaine who wrote (82071)	3/18/2001 2:08:15 PM
From: patron_anejo_por_favor	Respond to of 436258

I think that's a bit misleading Coby. The key number to watch with margin is 100*Margin Debt/(Cash+equity). At Fido this is termed the "margin/equity percent". Margin debt is dropping, but equity (stock)is dropping much faster (witness the performance of the S&P since September 1). Margin calls are generated when the ratio above drops (varying levels depending on stocks held and which brokerage the account is in). So there's very little solace in the fact that overall margin indebtedness is down.