Silicon Investor (SI) -- The First Internet Community

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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (71997)	12/17/1999 8:50:00 AM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

BGR, >>Of course, then the ones who sold the puts would have made the reverse argument (why not hurry it by 2 minutes?). The Fed is in a lose-lose situation it seems.<< The key to this whole discussion is who the two parties were and the timing of the cut. One was Wall St. and its bankers and one was the general public. Being "proactive" to protect Wall St. is the problem. The world would not have ended if he waited one day. That's the point you are missing. It's not who won and who lost. It's who had help winning and the timing of that help. Can you imagine him doing the same thing in reverse? Imagine Wall St sitting on piles of winnings and the public buried and he shockingly raises interest rates with a few minutes to go and screws THE ST. Yea right that will happen. These days he tells them weeks in advance when the rate increases are coming. Wayne

To: BGR who wrote (71997)	12/17/1999 10:50:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

>>Of course, then the ones who sold the puts would have made the reverse argument (why not hurry it by 2 minutes?). The Fed is in a lose-lose situation it seems.<< bgr, when was the last time the fed raised rates in this manner since it such a hard decision? funny, i can't remember then EVER doing it. since they NEVER did it, your argument falls flat on its face because everyone KNOWS they NEVER jack rates ahead of options expiration in this manner. since they NEVER do business like that, why would the put sellers EXPECT them to do it NOW? doh! ;-) you are deep in the well of desperation to explain the feds unique action.

To: BGR who wrote (71997)	12/17/1999 12:08:00 PM
From: benwood	Read Replies (3) \| Respond to of 132070

BGR, what AG did was like a company issuing a positive surprise PR 10 minutes before the close; or warning 10 minutes before the close. Whatever -- the big guy wins and the little guy loses. Issuing the rate decrease a few minutes before the market closes does not change the monetary fundamentals one iota (OK, maybe 1), but it totally altered the outcome of the options expirations. And as Skeeter pointed out, that was the intention. Waiting 45 minutes (or whatever it would take to wait until the market closed) would have resulted in the same monetary policy and the same interest rates, but it wouldn't have achieved what I believed were two goals: altering the "outcome" of options that day; and serving notice that for the rest of his chairmanship, AG would be the guardian angel of Wall Street. AG making his announcement 2 minutes earlier would have produced the exact same result as he got. Don't you find it odd that notices of interest rate HIKES can be telegraphed weeks and even months in advance (no raise in interest rates, but a bias towards doing so next month), yet his intention of saving the markets via an abrupt interest rate cut (or whatever he is able to do at the time) is now known and I believe counted on by Wall Street.