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Margin calls were one aspect that magnified the magnitude of the 1929 stock market crash.[1] After that, margin regulations (Regulation T) made the minimum marg
by stygiansonic 12y ago
Margin calls were one aspect that magnified the magnitude of the 1929 stock market crash.[1] After that, margin regulations (Regulation T) made the minimum margin rate 50% for stocks, though it appears some brokers may have been increasing margin requirements to near this level before the 1929 crash.[2]
1. http://stocks.fundamentalfinance.com/stock-market-crash-of-1929.php http://stocks.fundamentalfinance.com/stock-market-crash-of-1...
2. https://en.wikipedia.org/wiki/Margin_call https://en.wikipedia.org/wiki/Margin_call
- dnautics 12y agoIt's not just margin calls but leverage in general that turns downcycles into crashes, if you believe Kindleberger (and you should). [1] 1. http://www.amazon.com/Manias-Panics-Crashes-Financial-Investment/dp/0471467146 http://www.amazon.com/Manias-Panics-Crashes-Financial-Invest...