L.K. & thread: Regarding the Fed buying S&P futures in 1987..... On the day after the crash of 1987, not only did the Fed buy futures but they were so horrified that a few executives took their own lives that they actually pledged to provide liquidity. This was unprecedented -
in other words, they put themselves in the position to promise a fair bid on all stocks. Another 700 - 1000 points down from here (the Dow's at about 7970 as a write) would probably yield another such pledge.
As for the Feds everyday market participation: Just a few months back there were some maverick Republicans whom publicly complained that Clinton, Rubin, Greenspan, et. al had facilitated the elimination of the deficit by taking Govt. funds and buying blue blue chips, though the Republican whistleblowers were quickly hushed by other senior officials, and the event was swept under the rug. Does anyone remember reading this? I see no reason not to believe it. Maybe the Fed is holding a large amount of blue chips right know with unrealized gains (or losses!).
I also wouldn't recommend buying any of theses dips until we're all
positives Yeltsin won't resign and the communists won't attempt a coup. Because if either of those thing happen, it'll surely be another 10% of the market.
Finally, as for Taiwan's , HK's and others' govt. initiated restrictions on various forms of trading: It has yet to work and I doubt any of them will have a lasting effect. Every such measure has resulted in a darker picture in the following months. |
