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To: ratan lal who wrote (55805)	10/19/1998 1:10:00 PM
From: Lee	Respond to of 58727

Hi Ratan,..Re:I didnt realize that FED COULD get involved in the market. The Fed cannot work the market. All they can do is raise or lower rates and provide liquidity via repurchase agreements or coupon passes. Fed didn't arm twist the brokerage houses to bail out LTCM to save banker and brokerage buddies, they did it to avoid the market instability which would have resulted from LTCM liquidating all assets at market at once. No conspiracy here, at worse it's caving in to global stress and at best it's trying to maintain orderly markets. Already, it was claimed on CNBC that the credit crunch is loosening, (spread decreased 3 basis points!!!). LOL Anyway, everyone would have been complaining mightily had the Fed not done anything and credit and liquidity continued to decrease. Regards, Lee