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To: BarbaraT who wrote (16669)	9/17/2001 1:20:46 PM
From: 2MAR$	Respond to of 208838

Margin Calls Likely,But Lower Debt Seen Softening Impact By Phyllis Plitch Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--It's the stock market's version of gravity: the market takes a hit, and customers wake up to margin calls. Early Monday afternoon, several Wall Street firms said they weren't in a position to provide immediate data about how many clients were in negative margin territory. There was little question, however, that if stocks didn't stage a big rebound, come Tuesday morning many investors would likely be served up the bad news. "Every time the market goes down, margin calls go up - it's one of those laws that doesn't change," said Michael Dunn, a spokesman for Datek Online Holdings Corp. an online broker located in Jersey City, N.J. That said, there are several strong factors mitigating the potential fallout from escalating margin calls. Such calls can exacerbate stock market drops as investors are forced to unwind positions to pump immediate cash into their margin accounts. Key among them is that margin borrowing nationwide has declined significantly from the days before the Nasdaq's initial dive last year and the broader market declines. "We've weathered an incredible amount of margin calls during the second half of 2000 when Nasdaq was falling," Dunn said. Margin debt reached a high of $278.53 billion in March of 2000, and has continued to fall along with the value of Nasdaq stocks. In the most recent month-to-month numbers released by New York Stock Exchange member firms, margin debt fell 2.8% in July; debit balances in margin accounts of customers of NYSE-member firms fell to $165.25 billion in July from $170 billion in June. That could provide comfort to investors trying to find some positive news in a trading session which has so far provided few bright indicators. "It's a positive for the market, because there is a lot less leverage," said Charles Biderman, president of TrimTabs.com, a Santa Rosa, Calif., firm that tracks stock-market liquidity. "There isn't a whole of borrowed money right now, compared to what it would have been if this event had happened a year ago." (MORE) DOW JONES NEWS 09-17-01 01:20 PM * end of story *