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To: Mark Adams who wrote (62815)	1/29/2001 10:43:57 PM
From: oldirtybastard	Read Replies (1) \| Respond to of 436258

so the market is reacting to shocks, which the fed reacts to slower, but in the same way...yet the market also anticipates the fed, which these days will does not want to surprise or upset the markets (except for making intraday rate cuts 2 weeks after not making a smaller one), and the actions of the fed, while a supposed reaction to the market or to its own mistakes, also serve to fund activities which support the market. Do I have this virtuous cycle understood correctly? -g- To be honest I read only the last few pages of that paper, but I thought his argument was akin to saying that insiders sell company shares in reaction to what the markets are doing with their shares, while of course knowing what insiders tend to know at the same time...in other words, how are you going to ever figure out anything quantifiable from that? Maybe I am off base here as I don't have time to read the whole thing tonight.

To: Mark Adams who wrote (62815)	1/30/2001 9:47:16 AM
From: Ilaine	Read Replies (1) \| Respond to of 436258

To me, the really interesting thing about the paper you linked is that it was published on a Federal Reserve Board site - even though it questions commonly held assumptions about the effects of Federal Reserve Board actions. Does the writer ever define what he means by "open mouth operations"? I assume he means that the Fed announces a target rate and the market moves it there without any further action on the part of the Fed but am not sure.