So Are the Margin Calls Finally Over?
This is the week that a lot of margined stock players and hedge funds have been taken out.
Over on thestreet.com they are saying that Monday will announce that two hedge funds liquidated today (and closed), and that some big players have been margined out of most of certain stocks. Also whoever was liquidating REITs is done.
We know that several funds had to raise cash this week to meet their obligations at the Lehman CDS auction today. This caused a lot of forced selling. Fortunately, no company failed today as a result of the Lehman auction.
There might be some retail sellers come in next week once they see that we (already) had a stock market crash this week. But I can't imagine that kind of selling will be anything like what we saw this week.
So let's hope (cross fingers) that the forced selling is finally mostly done?!?!
BTW - this was the biggest week loss EVER (18.2%) for the DOW in it's entire 112 year history. Yes - that's in %, not points.
- this was the biggest week loss for the S&P500 since 1933.