Dave Davies

Yeah.

So I want to spend a moment just examining how that process works.

Let's say I'm a plumber and I don't have a lot of money, but I've saved some money and I've got $20, which was a decent chunk of money back in the 1920s.

And I want to put that into the market.

I go to a broker, Sorkin & Sons, and I come to you and you say, well, yeah, you can afford this stock, which costs $100.

We'll take your 20 and then we're going to loan you the other 80.

And the tricky thing here now is that that stock, which I then happily get and hope to see it rise so that we all win, that stock is collateral for that $80 loan you gave me, right?

That gives you a power over me, right?

Right.

And so this is a margin call where the bank, the broker, the financial institution says, okay, we're calling in that loan now.

You owe us all this money.

That's terrible news for the plumber or whoever signed the collateral of the stock and other assets like maybe their home.

It's also bad news for the banks, right, if this happens to thousands of people.

You write about a lot of the key figures in the financial world who were encouraging all of this.

They themselves were often engaged in stock trading, often insider trading, special deals for friends and clients of theirs.

And there were some voices out there condemning it, particularly Senator Carter Glass of Virginia, a name that lives on in an influential piece of legislation.

They blamed these titans of finance for what was happening.

Were they right?

Right.

And it's also just taking note of the lifestyles of some of these folks.