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

To: marginmike who wrote (48984)	5/2/2000 2:38:00 PM
From: pater tenebrarum	Read Replies (3) \| Respond to of 99985

MM, i found those numbers in the latest fiendbear market summary. the funds cash levels were at 4% even, last seen 26 years ago. btw, in recent weeks absolutely stupendous amounts of money have been flowing out of money market funds. altogether 50 billion dollars were withdrawn from money market funds during the second half of April. that means that another source of fuel for the bubble has markedly diminished. for details on the role of money market funds in the expansion of the GSE's assets and the resulting increase in the velocity of money, i refer you to Doug Noland's excellent credit market observations on the prudent bear site. btw, i fully agree that the market's behavior is indicative of a looming liquidity crunch. that's why the market has become so volatile, there is not the same amount of liquidity sloshing around as there used to be. at the same time all those IPOs of last year have their lock-ups expiring, one after the other. for the month of May, the market is facing 160 lock-up expirations. that will further diminish liquidity. of course the Fed is trying to counter this development by injecting staggering amounts of reserves into the banking system....a practice that backfires presently in the form of rising inflation. in the end it will come down to this: what's more important, the bubble, or the integrity of the currency? regards, hb