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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (79930)	3/12/2007 11:18:26 PM
From: Real Man	Read Replies (2) \| Respond to of 110194

Yep. From Doug Noland: "Fed Foreign Holdings of Treasury, Agency Debt jumped $15.0 billion last week (ended 3/7) to a record $1.848 Trillion, with a y-t-d gain of $96.3 billion (28.6% annualized). " That could explain it. This Fed is definitely on guard against any liquidity problems, which I suspect is all they do, the manipulation is by the trade. If so, gaussian Black-Scholes type derivative models will continue to work and generate tons of money for Pigmen and the Riskloves who use them, and stocks will move higher for a little while longer. When the lack of liquidity arrives due to mortgage defaults and related derivatives, the meltdown will likely be very brutal. Even though the Fed's response is predictable, that market is extremely large even for them to handle. From all the words around about derivatives, it seems they are much more on guard lately, but really what can they do with a lot of defaults in a multi-hundred-trillion dollar credit market that cascade through the system. Printing trillions will lead to hyperinflation.