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

To: pater tenebrarum who wrote (11368)	12/31/1999 1:55:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 63513

heinz, Thanks for the explanation. While I agree that many people borrow to play the market I find it hard to believe that this effect is large enough to effect the market in such a significant manner (even if banks are seeing a big run...as a % of the total market it can't be that significant - we're talking billions of dollars over the last two months - that didn't all come from loans or even front running loans). Also, given the jawboning done by the fed it's clear that they have no interest in seeing the market continue at this overheated pace. The continue to be hawkish. So..don't misunderstand me; I have no doubt that the fed buying back notes has a small effect on the market...I'm just not convinced that the market is being "propped up" by the fed.. that is not their intent - they're intent is price level stability. So, I guess..yes.... I guess I do think it's a coincidence to a degree. Of course we should remember that money came out of the market in early October and re-entered in late October/early November since the market is becoming more seasonal than ever. And we shouldn't forget that the market is paying more and more attention to fed actions and there is anticipation around each FOMC. When interest rate increases are dialed in and they occur there is a lot of tension released and money returns to the market. This is becoming a habit. fwiw I know the fed won't do anything with the margin rates... I was simply listing all the lever's the fed has at it's disposal to effect the market. Sorry - as Jorj knows I'm pretty subborn :-) Happy New Year to you!!! And thanks for the insight. OG