Waiting for the big Kahuna Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: William H Huebl who wrote (28819)	9/24/1998 8:04:00 PM
From: Kip518	Read Replies (4) of 94695

Less we forget -- a substantial Fed rate cut will further collapse the morgage-backed security & junk bond market. Morgage-backed securities was a favorite of hedge funds as one leg in their derivative plays (who, prior to July, was predicting interests could go down? -- impossible!). I think this one is a damned-if-you-do & damned-if-you-don't scenarios for AG. Interest rates may go lower, but we still get a liquidity crisis as banks freeze up lending. Prior to yesterday, I thought Bob Prechter's prediction of Dow 2000 in December (DECEMBER, 1998!! for god's sake) was totally whacky. Now, I'm beginning to imagine how it could happen. EDIT - after posting just read today's Street Life (Fortune mag) Following Wednesday's Greenspan speech, a Wall Street source said there is talk that the Fed may hike the capital requirements for big banks, and also order them to disclose more information about derivative exposure and off-balance sheet risks. The bottom line is that these moves could force banks to curb lending or issue new stock to increase their capital. Neither of these scenarios would be good for bank earnings. Expect to read more about this elsewhere, but you heard it here first.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next