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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (12278)	2/23/2000 11:18:00 PM
From: KeepItSimple	Read Replies (3) \| Respond to of 42523

I've got a theory. The fed knows it needs to drain liquidity, but it knows this draining has a direct impact on the stock market. The proceeds from the coupon passes are instantenously invested in the stock market by the people redeeming them. Therefore- the fed's best policy to remove the y2k liquidity is to only drain reserves on days the market is already soaring. I've gone through the last 2 months, and it appears the fed has only drained when the previous day was a huge up day- or they do an intra-day draining when the market is already skyrocketing. Can anyone give me any reason that this is not exactly what is occuring? The fed will say in public that they don't monitor the stock market at all, because that is the only politically acceptable public stance. But as even a grade school child knows, the market IS our economy and is by far the most important thing in the financial well being of middle and upper class america.