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if anyone has monthly call rates for 1929 we could put
this part of the discussion to be and move on to new material.
Earl
I will attempt to obtain this information this week.
Norman E.
Earl Adamy wrote:
>
> The material Bruce attached was interesting and carried some eerie echoes
> including the Fed's easing of rates in 1927 to help the Europeans. However,
> I didn't find much in the way of specific info regarding call rates except
> for two passages:
>
> a) "The practice of buying a large number of shares of stock with a very
> small amount of one's own money (as little as 3% during the 1920's) and
> borrowing the rest from the broker."
>
> b) "On Tuesday, March 26, 1929, the trend intensified and the rate on call
> money went to 20 percent."
>
> The first is pretty generic as it applies to an entire decade while the
> later is more specific as it applies to the period some months before the
> big one let loose. There is no indication regarding the length of the period
> to which the 20% applies but I see nothing which refutes Norman's statement.
> While I have extensive historical data, one item I do not have is call rates
> back to the 20's ... if anyone has monthly call rates for 1929 we could put
> this part of the discussion to be and move on to new material.
>
> Earl
>
> ----- Original Message -----
> From: BruceB <bruceb@xxxxxxxxxxxxx>
> To: <ericrogers@xxxxxxxxxxxxx>; BruceB <bruceb@xxxxxxxxxxxxx>
> Cc: <droex@xxxxxxxxxxxx>; Earl Adamy <eadamy@xxxxxxxxxx>; RealTraders
> Discussion Group <realtraders@xxxxxxxxxxxx>
> Sent: Thursday, October 14, 1999 10:05 PM
> Subject: Re: FOMC meeting?
>
> > Sorry Norman. After a grand total of 5 minutes of searching on the
> > internet, I found enough info to invalidate your opinion. Attached is a
> > text file containing passages from two different sites on the web
> discussing
> > the 1929 crash. The first passage makes it clear margin rates for
> investors
> > in the twenties got as low as 3%. The second passage makes clear that the
> > broker call rate (referred to as the "Call Market") did not go to 20%
> until
> > AFTER the crash was underway.
> >
> > Now, if margin rates got as low as 3% during the twenties, and didn't
> reach
> > 20% until after the crash, is it really so hard to believe that the market
> > spiraled upwards at an average margin rate of 10% before crashing?
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