Investment Trusts

Investment Trust Leverage Pyramids Reach Unsustainable Peak

1929-08-01 00:00:00 +0000 UTC | Importance: 7/10

Investment trusts reached peak popularity and systemic danger by selling at premiums higher than underlying stock values while creating complex pyramids of cross-ownership and hidden leverage. These 1929 equivalents of closed-end mutual funds bought stock on margin with funds loaned not by banks but …

Goldman Sachs Investment Trusts Federal Reserve financial-deregulation speculation systematic-corruption regulatory-failure

Margin Buying Explosion Enables Rampant Stock Market Speculation

1928-01-01 00:00:00 +0000 UTC | Importance: 8/10

A new brokerage industry enabling margin stock purchases allowed ordinary investors to buy corporate equities with only 10 percent down, borrowing the rest with stocks serving as collateral for loans. By August 1929, brokers routinely lent small investors more than two-thirds of the face value of …

Federal Reserve Goldman Sachs Investment Trusts financial-deregulation speculation systematic-corruption wealth-concentration