Word: marginalized
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Dates: during 1990-1999
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Money managers call it the doomsday scenario, forseeing an event that could wipe out investor portfolios and wreak havoc on the stock market. The danger stems not from new financial woes erupting abroad but from something happening here. It is the explosive growth in margin debt--loans Americans take out to buy stocks. Margin debt has shot up to $180 billion at midyear, a 25% increase in just six months and by far the most ever recorded. It now accounts for 1.2% of the stock market's total capitalization...
That doesn't seem like much, but it's a level not seen since the last speculative bubble burst, in 1987. And it's still growing, almost exponentially, rising faster than credit-card or mortgage debt. "We've had an expansion of margin debt the likes of which haven't been seen since the 1920s," says Tom Schlesinger, executive director of Financial Markets Center, a research institute...
Rove, who first met George W. in 1973, designed Bush's upset of Democratic Governor Ann Richards in 1994 and then got the political world's attention by making sure that Bush's re-election margin in 1998 was an overwhelming one. The Governor got 68% (with more than 40% of the Hispanic vote), which made Bush an automatic contender for the 2000 nomination. "Karl knew that a dramatic victory was the best way to launch the presidential campaign," says another Bush aide. "So he ran up the score." There is now a Republican holding each of the 29 statewide...
...things turned bad this summer. Barton had lost about $105,000 since June, almost all of it on volatile Internet stocks, according to Momentum Securities, where he traded most recently. Some reports said his account there had been closed on Tuesday after he was unable to meet a margin call--a brokerage firm's demand that a customer put up cash to cover a debt caused by falling stock prices. To reopen the account, he reportedly wrote a check for $50,000; it bounced, and he was denied trading privileges Wednesday and Thursday. Momentum was his first stop when...
...seem simple when shares are generally rising. Strong markets can mask underlying risks, like losing more than your principal when on margin. Concerned about just that, the National Association of Securities Dealers last week began requiring brokerage firms to disclose day-trading risks and to determine whether a client is suited before opening an account. None too soon. Day traders' favorite stocks have long been Internet and other high-tech companies prized for their big price swings. Since April, Net stocks have fallen on hard times, revealing many formerly brilliant day traders to be little more than lucky novices. Unfamiliar...