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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (7807)	8/16/1999 10:53:00 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 15132

I was looking at that table for the first time in a long while this weekend. Free reserves is something that Marty Zweig used to really focus on. I think he used to argue that ample free reserves meant a lot of liquidity and a thriving stock market. And shrinking free reserves....

To: Sam who wrote (7807)	8/16/1999 11:53:00 PM
From: Hank Stamper	Respond to of 15132

Sam wrote: "Barron's also prints the Fed's reserve requirements. In case you haven't noticed, they've been increasing the requirements, with the not surprising result of decreasing free reserves." Sam's information is significant, I believe. It confirms the Fed's increase(s) in the discount rate. But there may very well be more to it than simple confirmation. Read the following by Heilbroner and Thurow on changing (raising or lowering) reserve requirements as a means for controlling money supply: "It is an instrument that sweeps across the entire banking system in an undiscriminating fashion. It is therefore only used rarely, when the Federal Reserve Board feels that the supply of money is seriously short or dangerously excessive and needs remedy on a countrywide basis." (1987, Economics explained, p. 124; emphasis added) Now, it gives one pause to consider that Greenspan may presently think the money supply is "dangerously" excessive and needs blunt remediation. Ciao, David Todtman