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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (938)	10/27/1998 12:05:00 PM
From: Paul Berliner	Read Replies (1) \| Respond to of 3536

The only time the Fed would ever step into the stock market would be if a serious panic insued and the market fell say, 10% or more in 1 day. After black monday in 1987, the Fed assured investors not to panic, as it would 'provide liquidity' should bids dry up on the blue chips. I guess that means should the market fall on its face, the Fed would provide a bid on PFE or GE provided that the specialist has already jumped out a window. The Fed may or may not have bought S&P futures in '87, but the potential for disaster was not as great then as now (because every tom, dick & harry has a significant amount of their money in the market vs. far fewer participants in '87).