Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: HairBall who wrote (55956)	7/3/2000 10:33:22 AM
From: Gersh Avery	Respond to of 99985

low ball bids on at the money OEX calls might be a good play on the last day of the month.

To: HairBall who wrote (55956)	7/3/2000 10:56:11 AM
From: pater tenebrarum	Read Replies (2) \| Respond to of 99985

LG, every time the bubble is in trouble, why, just re-inflate credit (by Doug Noland): <<"...Today we see that bank credit expanded by a whopping $29 billion during the latest weekly reporting period. This expansion was across all categories with real estate loans jumping $9 billion, consumer loans $7 billion, security credit $5 billion, and “other” $6 billion. As is often the case, loans for commerce and industry lagged, increasing only $2 billion. During the past eight weeks, real estate loans have surged $41 billion, while commercial and industrial loans have increased almost $23 billion. Over this period, total bank credit has expanded by $95 billion, or an annualized rate of 13%. Year-to-date, bank credit is expanding at a rate of about 11%. This past week broad money (M3) supply increased $14 billion and has now surged $74 billion during the past 6 weeks (9.6% annualized rate). During the past 3-months, M3 has expanded at a rate of 8.3%; 9.1% for 6-months; and 8.4% for 12-months. M3 expanded by almost $26 billion during the past two weeks, with institutional money market funds and large time deposits combining to grow almost $30 billion. So much for “tighter” monetary policy. Now that May data is available, we see that Fannie Mae and Freddie Mac sharply increased credit creation. For the month of May, these two powerful credit creators had gross mortgage purchases of $32 billion, this compared to $17.5 billion during April. In fact, May was the most aggressive month of mortgage purchases since September. Perhaps it is coincidence that these two periods of aggressive purchases coincided with bouts of considerable financial stress. Remembering back to September, spreads were widening substantially, liquidity was disappearing in the credit market, and the gold derivatives market dislocated spectacularly. Jumping forward, during the first half of May spreads spiked to historical extremes, credit market liquidity faltered, and NASDAQ was at the brink of a crash. Yet, in a replay of last September’s reliquefication, liquidity miraculously returned to the financial system in late May, with NASDAQ commencing a major rally and spreads narrowing sharply. During May, Freddie Mac expanded its “retained portfolio” (the vast majority of total assets) at an annualized rate of 29%, while Fannie grew its “average investment balance” (approximating total assets) at a rate of 15%...">> this is what will in the end bring about a major denouement in the financial markets - the incredible, ever accelerating creation of debt in the US economy. it is precisely the same thing hat brought mighty Japan low when its bubble finally burst. now, if only i had a time table...-g- seriously, this is simply reckless and dangerous. an economic slowdown/recession could turn into a major setback for the global economy due to this house of cards of credit/debt inflation. regards, hb PS: M3 rising at 9,6% annualized, that is major inflation, no matter what the BLS's stats say.