If a change in margin requirements were taken by investors as a signal that the central bank would soon tighten monetary policy enough to burst a bubble, then there might be the appearance of a causal effect. But it is the prospect of monetary policy action, not the margin increase, that should be viewed as the trigger.
In a similar manner, history tells us that "jawboning" asset markets will be ineffective unless backed by action. 7  The sharp stock market contraction on October 19, 1987 of more than one-fifth requires especial further study. Equity prices rose sharply during the spring and summer, again despite the rise in short-term rates through late summer of that year.