Margin calls and the financial market's decline

Paddy Hirsch from Marketplace radio (http://marketplace.publicradio.org/) is back with another whiteboard explanation -- Margin Calls. Over that past couple of months the major stock market indices have been plunging, in part due to margin calls. A cascade of margin calls can often result when too many hedge funds have become excessively leveraged (i.e. borrowed too much) and the phenomena of the global margin call (cascading through several markets around the world) is one scary outcome.

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