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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: nihil who wrote (44625)	4/1/2000 7:58:00 AM
From: Haim R. Branisteanu	Respond to of 99985

nihil, you make a very good point with regard of M3 and if M3 is mostly financed by the US trade deficit, and if it is true, it represents a tremendous time bomb for the financial markets. Aside of that US personal and corporate debt is also growing at much more higher speed than the GDP (I think more than double). No CB will be able to deal with it if there will be a move out of the dollar ....... $250 billion a year is no small change even for the US treasury. Those funds who run for higher yields are moving very fast from one market to another. If this money decides to leave the dollar for better yields or higher returns it will crash the US stock market as the returns in foreign currency will diminish. Most recently a report was published were investment in US equities is at a multi year hight, which by itself is negative to the stock market, as money will search for better returns and is very sensitive to the value of the dollar. BWDIK Haim

To: nihil who wrote (44625)	4/3/2000 9:18:00 AM
From: pater tenebrarum	Respond to of 99985

nihil, i keep a close eye on the daily activities of the FOMC...and they're adding liquidity via repos and coupon passes at an astonishing pace. i personally believe this may have something to do with the problems in the credit markets. rumors of a big institution being in trouble over credit spreads have already begun to surface. this is one of the arenas where leverage and derivatives are used heavily...if you look at how much of the equity capital of individual banks is tied up in derivatives (e.g. JPM: nine times), you can see that it's relatively easy to get into trouble when things begin to move the wrong way...which they have recently done. regards, hb