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Strategies & Market Trends : Making Money is Main Objective -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (317)	1/8/2001 7:26:18 PM
From: Canuck Dave	Read Replies (2) \| Respond to of 2155

"Why did the Fed ease and then the rally not hold?" I've been digging trying to get to the bottom of this. The best explanation I can come up with has to do with the state of Wall Street financing, debt levels, and the US dollar. Basically, the Fed has allowed a huge unregulated derivatives industry to emerge which helped underwrite corporate expansion, despite the collapse of Long Term Capital Management in 1998. A lot of leveraged instruments are getting stressed as the stock market bubble collapses and every economic change messes with the models. Call it a credit bubble and the Fed is all of a sudden very worried about it, so they eased. The problem is too far advanced to fix with one round of easing, so we sold off again. The US dollar has been weakening against the Canadian dollar and the Euro. Gold and silver stocks are also very firm. I'm looking for a short squeeze tomorrow to make a few quick bucks and then you can get back to making major coin from your shorts, Techie. Things do NOT look rosy for the US credit market. CD