VOLTAIRE'S PORCH-MODERATED Message Board

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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Voltaire who wrote (42199)	9/20/2001 8:24:59 PM
From: stockman_scott	Read Replies (1) of 65232

From a Trading Website... <<I am a banker. I'll pass along a tidbit that demonstrates just how much liquidity the Fed has dumped into the system. A couple of days ago, we sold Fed Funds at 1%. Forget about the Fed's posted target. This morning we went to sell Funds, and there were NO BIDS. None. Nada. Zip. At no price. I would presume that extraordinary situation changed later in the morning / day, did not check back with those who watch such things. But if ever one were to see a sign that liquidity is so extremely high there are NO BUYERS of Fed Funds, folks lemme tell ya there it is. Whatever else happens from here on out, nobody will ever be able to argue the Fed failed to flood the system with money>> well, we knew that, but still...The FED has been SUPER AGGRESSIVE and look what has happened to the market. 2 years ago if I ever said the Naz would be BELOW 1500 by late Sept. in 2001 you would have told me I was on drugs...Well, it has happened...Over $1 Trillion in investor wealth has evaporated in the last week...It will come back BUT it may take time. Some folks say look out for 'the crash'...I would say we've had it...Check out the Naz chart for the last 18 months -- we're down around 70% and in a brutal bear market...A lot of it has to do with Investor Psychology, IMO....Many don't know how to process this new type of FEAR and UNCERTAINTY...It eventually will die down but its more intense than many of us ever thought it would be. Batten down the hatches and lets ride out this storm.

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