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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 671.910.0%Nov 14 4:00 PM EST

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To: Joan Osland Graffius who wrote (22904)8/12/1999 7:57:00 PM
From: pater tenebrarum  Read Replies (2) of 99985
 
Joan, Allow me to point out that foreign money flows into t-bonds have recently turned negative for the first time in over 20 years. Surely that amounts to a slowdown in liquidity. What's more, growth in money supply has become somewhat erratic in recent weeks, with four of the past six weeks actually showing a contraction in money supply. Let us not forget that a shift in international capital flows back into Europe and Asia (mainly Japan) will take away one of the legs this bull market is standing on. Due to the vast trade imbalance it is reasonable to assume that the Dollar will come under more pressure as time goes on, and that may lead to a reversal of the record high inflows into U.S. equities from European investors as well as additional inflationary pressures, all of which will force rates higher. So liquidity is slowly but surely becoming a problem...

regards,

hb
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