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

To: Square_Dealings who wrote (65780)	1/3/2001 10:42:29 PM
From: Vitalsigns	Respond to of 99985

One question I have is why does the Fed inject such large sums last week and early this week AND spring a 50pt rate cut? After taking his sweet time to do anything, Al puts the pedal to the metal. I think there's a lot that we don't know about, like big banks in trouble getting saved by the bell. Nice to have friends in the right places. Mike, the only reason I can think of is that Greenspan wanted to make an impact that would stick. If he cut in December , all he would be doing is allowing the Tax loss sellers to sell for higher prices and the rally would quickly slip away as would consumer confidence. The markets retreat over the last 10 months has eroded confidence faster than Greenspan expected , and has caused a ripple effect in the economy . The cut In January would send a clear signal to the market that there will be no recession on Greenspan's watch and by waiting until after Tax loss selling and repositioning of assets for 2001 , he maximized the impact of the cut and may have reduced the percentag cut required to achieve full effect. Had he done it December, the markets would have quickly dismissed it and he may have had to cut an additional 1.5% over the next few months to achieve the same results he got by waiting 2 weeks. He may not be so out of touch as we think. Vitalsigns

To: Square_Dealings who wrote (65780)	1/3/2001 10:45:02 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

Mike you wonder why the FED panicked? It was about time. We may know or maybe we may not, but do you know how many collars were issued to pension funds or insurance companies who bought MSFT, INTC, CSCO, AOL GE ect.? ..... and the house of cards was about to collapse hurting the pension and insurance system in the US and elsewere? BWDIK Haim