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

To: Paul Berliner who wrote (939)	10/27/1998 12:13:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

Paul, The Fed did not promise to provide liquidity directly to equities in 1987. They would not have been putting in a bid on specific equities, they do not have the authority to do so. What the Fed did then was to provide liquidity to the banking system. They went to the major banks and assured them they would provide whatever liquidity the banks needed to deal with the crisis. The Fed at no time has bought S&P futures. The system was at much greater risk in 87 then it is now. The banking system was still undercapitalized and struggling with the legacy of the S&L crisis. The banks are much more solid now. Henry