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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (11347)	12/31/1999 1:17:00 PM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 63513

Gary, I will have to get somebody that is a little bit more of an expert to address this. But there has been a direct correlation to market rallies and injection of M3 money supply. When I say "direct correlation", I am talking by the minute. I will find somebody. At the time of the last rate increase, Dorsey even commented that, though we were getting a rate increase, the fact that the fed was adding to the money supply, had the effect of putting on the brakes while pressing the gas to the floor. JXM

To: The Phoenix who wrote (11347)	12/31/1999 1:30:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 63513

Gary, the fact remains that the liquidity splurge the Fed indulged in since October 19 (yes, the beginning of the liquidity splurge coincided exactly with the low in stock prices) has fed this rally... every time a coupon pass or a repo was announced, the market began to rally within 2 minutes of the announcement...you don't think that's a coincidence, do you? it's actually front running, as banks' securities loans have been exploding at an unprecedented pace in this time period. that's what is happening with the money...it's used to leverage bets in the stock market. forget about the Fed changing margin requirements, it's not going to happen. it's a bubble friendly Fed. mind you, we could see the bond collapse further, or maybe even have the dollar join and begin to go down against the Euro. or maybe inflation data will come in worse than expected...those are things that could force the merry pranksters to drain liquidity from the system. watch if it happens...if so, it will drive stocks down, every single time within minutes of the requisite announcements. happy new year, hb