$Stock*Shop*Charts*News*Option$

[Stock Lobster]

Agree 100%, and one last comment on that

Margin trading is what took this market over 14,000, and it is what could take it back down to 10,000 if enough firms have to meet margin calls, and enough banks cut back on lending (article I posted yesterday from BL estimated $2trillion could be cut...ouch)

This paragraph, from a recent San Francisco Chronicle article quoted in Mish's Blog (Higher Yield Bond Funds Run Into Trouble) pretty much sums up what we've been seeing imho

It's not entirely clear what happened, but experts say that when the fund started to lose value last year, investors who thought they owned something resembling a money market fund started pulling out their money.

To meet redemptions, the fund had to sell assets into a declining market, which caused more losses, which sparked more redemptions in a wicked downward spiral.

Apply that formula to anywhere from 100 to 1000 teetering hedge funds, and you can imagine what could happen to hedge funds, banks and the equity markets if the current situation does not improve

http://globaleconomicanalysis.blogspot.com/2008/03/implosion-in-high-yield-bond-funds.html