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Strategies & Market Trends : New US Economy Policy
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From: Arthur Tang11/2/2006 5:49:34 AM
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The new US economical policy is highly dependent of Wall street and its health(cash reserve in treasuries).

Since most of the equity positions are in borrowed stocks, the danger is always there, even if Feds overnight discount windows is ever ready to bail out insolvent commodity dealers(fake shortages) or specialists and market makers(overbought).

The need is to advice investors including institutions to keep a higher percentage of cash for deeper investments later or immediate redemptions. Some would think that with higher cash reserves, that equity dealers can even own stocks themselves instead of short interest that suppresses the market.

The short sighted views on the street is that monetary policy is still tightly exercised by Feds. But over many years of squeezing out more and more productivity with computer software, and supply chain e-market growth. The corporations all have larger cash positions. Some think thay can manipulate their own specialists with false income statements like Enron, buying their own stock; found out different.

It only takes full service brokerages to reform wall street on the percentage of cash reserve to equity investment for each large investor to change Wall street around. Invest in stock and not short interests(hedge) will make equity more attractive than bonds.
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