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gary wrote:
> Sounds like that's nothing new! Let's blame the Speculator for this mess..
> Short sellers back in 1929 were blamed for the decline..
>
> In truth, the market needs those speculators otherwise nothing gets done.
> I do not think the govt.. should get involve with the market too much.
> This rule only punish the small traders. Not surprise if it will not be pass
> because
> it probably will destroy the economy after all the market is made of
> small,big,great,lousy traders..
>
> Finally, I wonder who bothered to propose this silly rule?? Some RICH folks
> who cares about the small traders?? Looks like someone wants to control the
> market and they know they cannot do that unless they get rid of the small
> traders.. I sure heck do not know who are they!:))
>
> regards
> Gary Bodnar
Gary,
I would guess the answer is the brokerage firms want a uniform larger cushion
to protect them from debits. If a customer goes debit, the brokerage firm must
make up the difference until they can collect from the customer. The customer
may refuse to pay, skip town, or decide it was the broker (or the devil) that
made him lose it all and sue. On the other hand, if only one brokerage firm
decides to increase the financial requirements of their customer, many of their
customers will skip to another firm. Therefore, it takes an industry wide rule
to make it work.
By the way, many people don't realize that when a customer goes debit, the
money comes out of the
pocket of the customer's rep until the debit is paid either by the rep or the
customer.
Marginally,
Norman
>
>
> -----Original Message-----
> From: swp <swp@xxxxxxxxxx>
> To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
> Date: Tuesday, February 01, 2000 11:36 AM
> Subject: [RT] Re: SEC New Margin Rule Proposal
>
> >Because that trader (with three years experience) does not remember
> >1987, let alone the mid-1960s until 1975/1982)! Margins should have been
> >raised long ago. The only reason why they have not been, is that there
> >are too many other ways to borrow for stocks (from 401K plans, from the
> >bank -- yes people are taking personal loans to buy stocks) and via home
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