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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (9077)	3/16/2008 11:58:00 PM
From: ahhaha	Respond to of 33421

The liquidity problem is in the investment banks, not the commercial banks. Yes, and its manageable, containable, but it won't remain so unless the MECHANISM is broken. And the liquidity crisis at BSC was precipitated by the carry trade starting to unwind on Thursday/Friday. The cashflow from their prime brokerage operations just seized up. It isn't that situation per se that got NyFed freaked. It was the continuing reaction stoked or reinforced by FED's persistent reaction trying to stay it, or trying to "save the world from depression" that's making big boys freaked. They sense there's far more trouble than there is, else FED wouldn't be acting this way. The big boys here are foreign, so they don't know the situation like the NY financial insiders, and wouldn't trust them anyway if the Nyers said something constructive. That's why Cayne's expectation was totally blown away. External forces are reacting to fear, not to the as yet unknown and presumed horrible reality.