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----- Original Message -----
From: "Stan Rubenstein" <stansan@xxxxxxx>
To: <rmac@xxxxxxxx>
Cc: <realtraders@xxxxxxxxxxxxxx>
Sent: Saturday, March 25, 2000 8:27 PM
Subject: Fw: [RT] Margin Debt - follow on
> Ron:
> The more likely place for speculative fever to show up
> in debit balances would be margin accounts on NASDAQ
> since these are where the super high valuations are
> taking place.
> Does anyone have a source of similar Debit Balance
> info on NASDAQ?
>
> Stan R.
> ----- Original Message -----
> From: "Stan Rubenstein" <stansan@xxxxxxx>
> To: <rmac@xxxxxxxx>
> Cc: <realtraders@xxxxxxxxxxxxxx>
> Sent: Saturday, March 25, 2000 8:21 PM
> Subject: Re: [RT] Margin Debt
>
>
> > Ron, I did some analysis of the numbers.
> > See my comments at end of your message.
> > ----- Original Message -----
> > From: "Ronald McEwan" <rmac@xxxxxxxx>
> > To: <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Saturday, March 25, 2000 1:20 PM
> > Subject: [RT] Margin Debt
> >
> >
> > > The attached spreadsheet contains the Margin Debt & Credit amounts for
> > > the NYSE from Jan 92 to Feb 2000 with monthly closing prices for the
S&P
> > > 500. While it is not immediately clear from the charts, the free
credit
> > > balances are very low in comparison to the numbers for margin debt. If
> > > anybody has ever went overboard with their Visa card, you know what is
> > > going to eventually happen. But then again when we get in debt over
our
> > > heads Alan Greenspan does not come to bail us out. I think what he has
> > > done is to successfully transfer the national debt to the stock market
> > > (where it does not show up on the Gov's books)
> > >
> > > Ron McEwan
> >
> > Taking the Debit Balances as a percentage of the combined
> > Debit plus Cash plus Credit balances it turns out that the
> > contribution of Debit Balances to the Total Balances remains
> > relatively constant, averaging 60-65 % for all years. This seems
> > to say something about affordability in that the Debit contribution
> > to the total Balances remains constant.
> >
> > I also looked at the total of the balances as a % of the level of
> > S&P to see if there's something happening there. Of course the
> > level of S&P is dimensionless while the balances are dollars
> > so its not so clear that such a calculation has meaning. But in
> > doing it the relative importance of the sum of balances remains
> > almost constant as the level of S&P rises. This might be saying
> > that market capitalization, in terms of S&P500, is supported by
> > rising balances and since the debit contribution stays relatively
> > constant it might also be saying that money is coming from
> > somewhere to support the market but not necessarily from
> > increasing margin debt.
> >
> > One last idea: The money flow might be coming from the
> > rising GNP and its concomitant rising personal income.
> > But this is a bootstrap concept and not a Ponzi scheme.
> > As long as consumers prosper and put a rising proportion
> > of their income into the stock market the market gains
> > capitalization. The danger here might be that an accidental
> > fall in the stock market triggers a pullout of stock money
> > as consumers flee to money markets.
> >
> > Hoping for comments from others;
> > Stan R.
> >
> >
>
>
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