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A better analogy for this proposal would be this:
The bank will NOT give you a mortgage for a $50,000 house, but they will give you a mortgage for a $625,000 house, REGARDLESS of the amount of your downpayment, your financial situation, your ability and likelihood of making those mortgage payments, etc., etc.
Also, I don't see how trading differs from any other business as far as financing goes. If trading is my business, I will utilize and exploit every available venue to me to raise capital and/or finance my business as I see fit. This may or may not include borrowing from credit cards, taking a second mortgage, borrowing from friends or family or soliciting for OPM, using my life's savings, etc. etc., just like any other businessman, any other entrepreneur, any other corporation. As long as I am ready and willing to accept the consequences, any legal way of financing my "business" is fair game and it is nobody else's business. Most every small business' were/ are being created on a shoestring, using all kinds of conventional and "unconventional" financing; some grow and prosper to become successful big businesses, some go bankrupt. I think trading as a business is no different.
Now, if I totally screw up, and when I go bankrupt, I turn around and sue the brokerage company, or my broker for letting me trade, my credit card company for giving me a credit card, or my mother for lending me the money, then yes, I am a pathetic low-life and I need to be restrained and protected from myself and the society must be protected from me. But at least, please, let the rules be reasonable, fair and logical.
Best regards & happy trading,
Levent
-----Original Message-----
From: swp [SMTP:swp@xxxxxxxxxx]
Sent: Tuesday, February 01, 2000 2:01 PM
To: <realtraders@xxxxxxxxxxxxxxx>"Real Traders"
Subject: [RT] Re: SEC New Margin Rule Proposal
I do not think that you can compare the two (opening a business and
borrowing to speculate in stocks or futures). Margin regulations were
created due to the huge leveraging before the 1929 crash. Brokers are
supposed to "know their customers". This is all being clobbered by
online trading. There are too many people that turn on CNBC and believe
the b-s Omega puts up about how they WILL get rich if they only write a
system.
I do not love the government crawling all over the place, but better
them then a bunch of idiots taking out personal loans at 10% to buy QCOM
on leverage helping cause a series of bankruptcies, foreclosures and the
next depression when QCOM falls to 10 (NO I DO NOT BELIEVE THAT WILL
HAPPEN OR THAT WE ARE ANYPLACE CLOSE TO THAT, JUST EXAGGERATING TO MAKE
A POINT).
When you start a business, the bank knows exactly what you are planning
to do (if you told them the truth). You have a business plan and a
target audience/customer base. You control a lot more than you do when
you are trading. There is no comparison between margin and business
borrowing. (Even if I do believe that the market is predictable to a
large degree, or I would not be a market analyst.)
Steve Poser
---
Steven W. Poser, President
Poser Global Market Strategies Inc.
url: http://www.poserglobal.com
email: swp@xxxxxxxxxxxxxxx
Tel: 201-995-0845
Fax: 201-995-0846
----- Original Message -----
From: Linda Swope <lswope@xxxxxxxxxxx>
To: Real Traders <realtraders@xxxxxxxxxxxxxxx>; swp <swp@xxxxxxxxxx>
Sent: Tuesday, February 01, 2000 1:35 PM
Subject: Re: [RT] Re: SEC New Margin Rule Proposal
> Actually, this trader does remember 1987 and the money she lost on
Black
> Monday. But life is a journey and not a destination. A thousand tiny
> steps, Black Mondays and Blue Mondays included, lead us to where we
stand
> today. Every time we stumble, we stand up straighter, smarter and
faster.
> The NYSE doesn't have the right to regulate our paths because we have
$1
> less than the next stumbling trader.
>
> And so must something be done about the people who take out personal
loans
> to start their own businesses? Would you have "done something about"
me
> when I was 22 and put every penny I could get my hands on into a
photography
> business that had a high probability of failure? Thank goodness you
didn't.
> I'd hate to have missed all those smiling faces!
>
> Linda
> Swope's Mountain Photography
> http://www.swopephoto.com
> linda@xxxxxxxxxxxxxx
> Climb the mountains & get their glad tidings: Peace will flow into you
as
> sunshine into flower; the winds will blow their freshness into you &
storms
> their energy, & cares will drop off you like autumn leaves. John Muir
1838 -
> 1914
>
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