MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.21

-1.1%

4:00 PM EST

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To: JRI who wrote (67755)	1/27/2001 3:55:51 PM
From: Doug	Read Replies (1) of 99985

JRI: R/P's were originally meant to dampen down the effects of Federal Reserve increases/decreases as and when interest rates were changed . Increases in Swaps, Derivatives and R.Ps tend to increase time based speculation in Junk bonds, stock prices, Real estate. etc. Currently the outstanding derivatives are at $28trillion.. The capital markets too are affected by this. The Capital markets were traditionally focussed on long term growth, profits etc. Today, it is speed of return as dictated by the demands of the Money market. Because of this , the Capital markets led by the Brokerages and Money banks are now more centered on short term goals using currencies, Stocks, Commodities etc. All this is great news for traders ; bad news for Investors since there are no fundamentals that can justify short term changes in stock prices.

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