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To: UnBelievable who wrote (233037)	4/2/2003 6:04:38 PM
From: orkrious	Read Replies (1) \| Respond to of 436258

Its being driven by the Fed following the same recipe they used to cook up the rally of March 17. agree. here's the Stool tonight: capitalstool.com Unable to watch much of the flagpole rally today, so today's comments will be brief. It is clear that the return of the maniacal price action in stocks is a function of a Credit Bubble which has gone completely out of control and parabolic. Day after day, you hear of "near bankrupt" companies pulling off miracle recoveries by announcing some type new credit facility restructuring or extension by the banks. In prior economic downturns, a rush to cash and a panic to grab deposits forces banks to liquidate loans and/or dramatically tighten credit standards so they can meet the cash calls. But not this time. Money is being multiplied and credit is being extended into Outer Space. With the Al Green Put, there is no need for banks to worry about people questioning the "moneyness" of their deposits and money market accounts. And as credit availability is expanded to meet negative cash flows, there is no need for depositors to withdraw funds to start the credit contraction cycle. More paper IOU's piled on top of even more paper IOU's. Today's WSJ reported on the explosion on the credit derivative markets as a key profit center for the major banks. And as usual, the German banks are at the epicenter. It gave examples of how Commerzbank may make $100,000 over the life of a $100 million loan, but by selling credit insurance, they can make up to $3 million. The smaller German banks are also getting into the action, being the most aggressive sellers of credit default swaps. In fact, things are going so smoothly, there is a new Credit Default Index being constructed so Risk Players can buy or sell the "Index". It is truly amazing how the number of defaults has failed to make a dent in the Credit Bubble. No doubt, we are in uncharted territory. Never before has a Stock Market Mania been able to be resuscitated by using aggressive credit creation. How high can the Bubble go? Nobody knows. Notice how the BOJ came to the rescue after the close to start jamming the futures. Yet another hysterical bounce, triggering more wild action in stock indexes worldwide. The Commodity Robots were given technical sell signals on the dollar and stocks yesterday. Yet Al Green's machinations created another whipsaw which caused another reversal which blew out these Robot Trades. Hochberg and other Elliott Wavers are changing targets daily. Technical analysis has officially been discredited the last two weeks. Thanks to the Deriviatives Tail wagging the dog. As I mentioned last week, the market has become untradeable, subject to wild swings either way, clearing out stops on both sides, creating absolute havoc among the Arena Participants who are gaming tighter timeframes and setting tighter stops. I suspect that we will be seeing some HedgeHog blowups soon, and some CTA failures. Notice how all the major brokerage houses are laying off equity traders due to "hostile trading environment" and the specialists firms are reporting miserable results. Despite the supposed deftness of Da Boyz, the reality is that none of them are probably making any money. The entire Globe is in a "catch up" mode, attempting to make up for lost ground by using more leverage, more concentrations, and riskier bets. Notice how the VXN is down 7 consecutive days. More upside in stocks means a new record will be set for the fear gauge. I just received the CountrySlide (CFC) 10-K report. You won't believe the Financial Exotica on that balance sheet. Its incredible. I hope to expand on this later in the week. Of course, none of this discussion is of any comfort to the bears. Prices keep going up. The MTV Spring Break continues unabated. I suggest everyone take Buddhadropping's advice and enjoy life while it is still good. If Al Green is assuring us of indefinite prosperity, then why not go out and enjoy it? Because if things roll over to the downside, nobody is going to be happy, regardless of how much money can be made on the short side. Chances are, when this thing cracks, the leveraged short funds will blow up, most options will not find any buyers or sellers, and many betting on the short end will end up empty. The best position to take now is cash or gold. I cannot think of any other description other than that we are in UNHEARD OF and UNRECOGNIZABLE territory.

To: UnBelievable who wrote (233037)	4/2/2003 8:24:28 PM
From: Gersh Avery	Read Replies (2) \| Respond to of 436258

OK .. so why was the NDX able to fall 80%? >>I Don't Think Its Being Driven By War News Its being driven by the Fed following the same recipe they used to cook up the rally of March 17. To wit. Take one boatload of money and dump it on the market(which now can be verified for 3/17 on their M3 report which shows the rate of change in M3 as spiked to an annualized rate of 26% that week). Mix well until bond prices start to melt. Watch as the money from bonds enters equities Prepare ahead of time - To prevent a decline in the dollar enlist the aid of a central banker friend who serves a country that is particularly concerned about the dollar being strong, and in fact has a lot of experience intervening in the FX markets (rhymes with Sushi and can be seen in their current account). Intervene in the gold and oil futures markets as necessary. This recipe usually will feed a bunch of pigs for about a week. Always a crowd please repeat as necessary. This is comfort food. Served as a matter of national security in times of war and economic uncertainty. <<