What I find curious is how the CME can explain raising margins in a free fall market with a straight face. I don't use margins so I see it as a potential gift of lower prices.

The key element here is "free fall.' Of course they'd want to see more money on the table when the value of your portfolio is dropping like a stone. Who wouldn't? Raising margins is like calling a loan. It doesn't happen on sunny days, it happens when fear of your insolvency grips the lender...heh.

What I find curious is how the bulls always want to atribute rising prices to natural demand, but a fall in same to nefarious forces. Fact is, if you didn't have highly leveraged longs, you wouldn't see such a hard drop when margins are raised.

As alway, the question that needs to be asked is buried in the noise. Why do we allow margin trading in the first place? It distorts the price mechanism, sends false signals to the economy and we ALL end up paying for it, one way or another.

ebear