Replies to post #696913 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

Summary

Those stocks are sacrificed when a margin call comes - from a general collapse

they do not support the margin % --- and thus (yes THUS) when they are sold they provide $ for $ of help - like cash - where the stocks that are supporint the original safe zone of margin need 2X or more to help

[Potty]

I agree about margin -- we are at record levels of margin and household stock exposure

The margin has driven everything higher in a vicious upward spiral

And when it finally cracks the margin calls, and forced selling, will spiral us down just as viciously -- probably more so

This is one of the dynamics we saw in the boom and bust twenties


I have a lot of cash waiting for any bog move down, then I can buy those solid, cash rich blue chips and growers