Graham SleightDec 20, 2022
Why do we call them “central banks” and not “apex creditors”?
Show threadk_salbertaDec 20, 2022
@grahamsleight
Technically they are supposed to operate more as herders/field sowers than predators. If a person bought stock on margin in the last two years, perhaps the CBs now seem like predators. But --- perhaps you have seen a parade float go by, scattering toys or trinkets for the kids? Even those kids don't expect that to happen every day.
Show threadJersey GryphonDec 21, 2022
@k_salberta @grahamsleight Maybe debt for buying stock on margin shouldn’t be forgivable in bankruptcy? Student debt isn’t and is more useful to society.
Show threadk_salberta
@jerseygryphon @grahamsleight
When you buy stock on margin it is secured, and by regulation in the US more than 100% secured. So unlikely that this debt would show up in BK - generally if you exceed your margin you are sold out to maintain the margin by the broker. Bank would take control of the stock securing the loan with an assignment and security agreement on the stock. I cannot imagine how a margin loan would be forgiven in BK proceedings.
Dec 21, 2022 at 1:23pmWeb