>Yesterday Floyd Noriss in NYT and Bartlett today in WSJ show that buying on
>margin hardly accounts for much of the market at all (perhaps 9% in the
>late 1920s, to less than 2% today?)--the reasons for the bubble must be
>sought elsewhere.
Margin debt figures overlook several sources of leverage: hedge funds, credit cards, index futures, home equity loans.
> Evidence is that bubbles tend to encourage margin buying,
>rather than visa versa.
That's true. More broadly, you could argue that rising prices cause buying more than buying causes rising prices. For a while.
Doug