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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (46534)	7/20/2002 1:35:16 AM
From: Perspective	Read Replies (2) \| Respond to of 209892

The stocks are just showing the systemic strain. The whole confidence game is falling apart. You must understand the enormous significance of bankruptcy proceedings to the general level of liquidity. Because of the multiplier effect of our fractional reserve banking system, a dollar printed by the Fed turns into several dollars in the economy. Conversely, when a dollar is destroyed, it causes many more dollars to vaporize. The creation of money out of thin air involves the creation of a credit in one account with an equal but offsetting debt in another account. The destruction of money likewise happens when 1) a debt is paid down or 2) a bankruptcy occurs. Bankruptcies destroy liquidity due to this multiplier effect. I think the WCOME bankruptcy has much greater significance than people realize. Bankruptcy proceedings force a "mark to market". While the banks can lie and hide their exposure to risks in good times, they must show their hands in bankruptcy court if they want to stake a claim. If you missed my earlier post, check Message 17763063 BC

To: NOW who wrote (46534)	7/20/2002 10:57:41 AM
From: AllansAlias	Read Replies (2) \| Respond to of 209892

It has nothing to do with valuations. It has always been "in trouble". I don't give a rat's-ass about fundamentals, except in the very large timeframes. We all know there is a credit bubble; we all know the fundamentals of debt; BUT, did that help one trade it? For example, COF took a big hit lately, but there are bears that have been rolling puts on that crap for years. Folks like Noland have been calling for a meltdown for literally years. Did reading his screeds actually help you trade? What we are finally seeing now is the market actually discounting a credit meltdown. The pretty pictures are bending hard.