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Possible Warning re: financial downslide?

 
Anonymous Coward
User ID: 999513
United States
06/19/2010 10:14 PM
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Re: Possible Warning re: financial downslide?
... I even read GLP throughout my day at work.
 Quoting: hackit25



Just stay off the porn sites.
Anonymous Coward
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Mexico
06/19/2010 10:15 PM
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Re: Possible Warning re: financial downslide?
That makes NO sense.

That is increasing leverage an additional 5x.


No one will take that risk on especially with algo's feeding upon themselves while making up 75%+ of daily volume.
 Quoting: Anonymous Coward 936917

+1
Anonymous Coward
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Puerto Rico
06/19/2010 10:17 PM
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Re: Possible Warning re: financial downslide?
According to Calleman, expert on the Mayan Evolution of Consciousness, the entire monetary system is going to collapse. Can't happen soon enough for me. When a trader can make a fortune buying and selling wheat ON PAPER, while the farmer who actually grows the wheat is going broke, there's something majorly wrong with the system.
 Quoting: Anonymous Coward 998941

rockon clappa
Anonymous Coward
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06/19/2010 10:21 PM
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Re: Possible Warning re: financial downslide?
you'll have no choice, except be an 'RFIDed' slave or die excluded from all kind of transactions,

 Quoting: FreedomSheep


At that point, it is war, sir... to the death.
Anonymous Coward
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06/19/2010 10:30 PM
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Re: Possible Warning re: financial downslide?
Folks the markets are only being propped up by fiat money borrowed by the big banksters from the fed to prop up thier own companys so that idiots that gamble in the market don't jump out of windows. Which is mainly stupid bootlicking pensioners and trustfunders.
 Quoting: Anonymous Coward 1000327



BINGO!!! This is a direct hit.

FIAT MONEY is holding it all up -- once faith in the fiat dies then it all goes to hell very quickly.
Anonymous Coward
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06/19/2010 10:50 PM
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Re: Possible Warning re: financial downslide?
blink what's a stock market?
Anonymous Coward
User ID: 984899
United States
06/19/2010 10:51 PM
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Re: Possible Warning re: financial downslide?
As a followup ...

Margin is leverage. For example one can purchase a stock for lets say $50. and depending on your qualifications, can borrow against that position allowing you to add more stock for the same price.

Margin requirements have been minimum of $25k since I got started over 20 years now.

By reducing it so drastically, it says to me...

They must know that in the near future, MOST of their client will not be able to have $25K minimums ... hence lowering it.

Which is also regulated by the SEC ... so this is NOT something done by each individual brokerage house.

Also, pay attention to the date ... June 23, 2010.

Take it for what its worth, just passing on some information in light of the economic turmoil we find ourselves in.
 Quoting: Financial Trader 1008701



June 23? DAM, that date keeps popping up
Me114

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06/19/2010 10:52 PM
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Re: Possible Warning re: financial downslide?
reduced???
 Quoting: Anonymous Coward 254879



when you reduce margin requirements, people can be tempted to invest more money into the market, AND if they bet wrong, they can LOSE ALOT MORE MONEY, because they are spending money they do not actually have.

nada
:ura:

Sweet Thoughts!
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What Happens Next Loves me.
Help me Jesus, Life will let me know.
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Anonymous Coward
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06/19/2010 10:54 PM
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Re: Possible Warning re: financial downslide?
NO.

80% margin reduction means simply this.

In the past, in order to business on margin at any major borkerage, you must maintain a MINIMUM equity position (cash on hand) for $25k.

This has been in effect since I became a trader.

Again, margin is leverage (nothing more, nothing less).

NOW ... they have changed it and notified us that...

Effective June 23, 2010, we only need to have $5k equity position (cash on hand).

If u know anything about investment, this is NOTHING (investment wise).

It suggest that the reason they are lowering it is that they expect most people will not be able to afford the higher requirement in the not so distance future.
 Quoting: Financial Trader 1008701



This actually makes sense they need to equalize the world economies for the World Government and since wages are stagnating, lower leverage limits would be required....from 25,000 to 5,000
Me114

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06/19/2010 10:55 PM
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Re: Possible Warning re: financial downslide?
So in other words easy credit (so to speak) which precipitated the credit crisis we currently find ourselves in, is now being extended to traders?
 Quoting: Anonymous Coward 952140



correct
:ura:

Sweet Thoughts!
I Unknown Depths of Love, You.
What Happens Next Loves me.
Help me Jesus, Life will let me know.
Living is Effortless Normal
God Inside, Outside, Everywhere, Forever!
homepage [link to heartdaughter.com]
Anonymous Coward
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06/19/2010 11:03 PM
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Re: Possible Warning re: financial downslide?
...they expect most people will not be able to afford the higher requirement in the not so distance future.



In the 1929 crash which was the Black Tuesday... Wall Street Crash... people jumping out of buildings... GREAT DEPRESSION...

People bought on margin during those days. This means you can take a loan out for a percentage of the trade. Today (before this change the OP mentions) some brokers will let you buy on 2:1 margin, meaning if you have $10,000 they will let you buy $20,000 worth of stock.

Back in those days (just prior to the Great Depression) people were able to buy with 10:1 margin, meaning if you have $10,000 you could have bought $100,000 worth of stock.

In 1929 stock prices had risen way beyond their true value and were bound to pull back. All those who bought huge amounts of stock on the margin were wiped out in a 5-year period when the stock prices declined by 80% between 1929 to 1934.

THEREFORE, by reducing the margin requirement today it is equivalent to a move back to pre-1929 policy, i.e., you can buy more stock on less margin (which is to say you can greatly increase your RISK FOR CHEAP -- until it all crashes and you lose your ASS.

RECOMMENDATION: DO NOT FALL FOR THE BAIT. KEEP YOUR ASS IN LIQUID ASSETS AND WAIT FOR THE CRASH -- AND THEN THE NEXT CRASH AFTER THAT -- AND THEN BUY BUY BUY... BUT STAY AWAY FROM HIGH MARGIN LEVERAGES OR YOU WILL BE JUMPING OFF THE GOLDEN GATE BRIDGE IN TOTAL RUIN.
 Quoting: Anonymous Coward 797009



Bingo
Nightwing666

User ID: 994965
United States
06/20/2010 02:03 AM
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Re: Possible Warning re: financial downslide?
Don't give advice, but I would remain cautious holding any paper positions overnight over this whole summer. As everyone knows (or should know), the stock market is a giant scam and all signs point to it getting taken apart soon.

Remember, I am a TRADER, not INVESTOR.

BIG difference, my investment is in RE and gold, my play money is traded.

Take it for what its worth.
 Quoting: Financial Trader 1008701



Good looking out, OP! Thanks for the heads up! It seems like everything is coinciding with this 'Operation BlackJack' scenario. Almost confirming my suspicions. shark
If you are receiving this transmission, then you are part of the Resistance!
Nightwing Rises
Steph4Liberty

User ID: 1003451
United States
06/20/2010 10:50 AM
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Re: Possible Warning re: financial downslide?
I'm not sure how this plays into the equation, but several months ago the CFTC forced all US forex dealers to LOWER their available leverage ratios. They had been as high as 400:1 and they were forced down to 100:1.

Any thoughts?
:StephQuill:

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