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

To: snowbird who wrote (18246)	5/11/2000 11:43:00 AM
From: SGJ	Read Replies (1) \| Respond to of 35685

Hi Snowbird The FED controls the FOMC which buys and sells Treasury Bonds. Buying puts money in the economy and selling takes it out. Im researching right now the implications of the Repurchase of 30 year thats going on right now which increases the money supply. If you look at money supply charts they have come down some but not much. Is the FED raising rates to counter the bond buyback rather than strictly containing an inflation that is not totally evident? Therefore the inverted yield curve? Its somewhat strange that the media rarely comments on all these factors which enter into the present situation. They go for the sound bites. Another reason for doing your own DD. As for the rules of Specialists, MM's, or HOuses on what they can and cant do Im not that informed. However my point is that anytime one or all "pull out" it threatens liquidity which threatens the banking system. Of course,the FED is most concerned about this issue. There is an executive order in place since 1987 to allow them to take action in concert with the SEC and Treasury if a major threat is indicated. IT takes though a major one day plunge for this to go into effect and is used rarely. I believe the rumor was that this safety went into action last month on the drop to 3250. The FED is actually part of a market safety net. It is of course only a net and it is not perfect. I dont like to think of what would happen though if it failed.