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Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (16206)	4/25/2000 12:13:00 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 35685

tough question, Soros... but here is my general overview take Federal Reserve added bigtime liquidity to money supply as Y2K approached their initial concern was to avert public panic, industry snafus, and desire to turn to cash this resulted in unprecedented speculative runup in stocks the focus was where the primary growth engines: tech stocks the Fed has been reducing liquidity to money supply as Y2K passed this job has been offset by federal debt refunding from surpluses, which adds to liquidity now the Fed finds itself in a bind stock market (really just Nasdaq) liquidity has reached dangerous low levels Brokerage Houses render special treatment defending the Old Economy stocks in their treasury inventories that has left Nasdaq tech stocks vulnerable adding to the confusion is calculation of money supply itself, since so so much US$ currency travels abroad, and since so so many foreign economies use the US$ freely, and so so many foreign economies have dollarized their own currency, and so so many black market underground economies prefer DMarks and US$ so now Brokerage Houses and the Federal Reserve are attempting a concerted effort to reduce margin debt while restoring liquidity to the stock market my guess is the Fed is buying S&P and Naz futures to establish a floor my guess is the Houses are cooperating, reporting that maybe 90% of the reducible margin debt has indeed been reduced the Fed has gone too far, for the 20th time since WW2 nobody but nobody will sustain a rally until the Fed is widely perceived TO BE ALL DONE TIGHTENING the Fed will continue to tighten partly because they do not want to jeopardize their integrity... the Fed will continue to tighten until they have gone too far... any precedent otherwise?????? the Election Year Effect might save our buttocks / Jim Willie