Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (40925)	2/18/1999 2:11:00 PM
From: GST	Respond to of 164684

Sarmad-- Print to order? <VBG> -- follow the yellow brick road. I can still visit, right? For what its worth, I have seen trends stall on expiration before -- it is not my favorite day to trade. You shorts and longs can wait an extra day to be right. Me? I gotta go while I have a dollar. Later.

To: Sarmad Y. Hermiz who wrote (40925)	2/18/1999 2:32:00 PM
From: GST	Read Replies (2) \| Respond to of 164684

Analysis by Mark Zandi Written February 15, 1999 Money supply growth is surging. Both M2 and M3 are expanding at close to a double-digit year-over-year pace (see Chart). Real M2 growth is currently as strong as it has been since early 1983. Money supply growth has been at best only a minor factor influencing Fed policymaking in the 1990's. The link between money supply growth, real economic growth and inflation appeared to break down in the 1980's due to the impact of commercial banking and thrift industry reforms, financial deregulation and technological changes. While the link between money growth, the economy and inflation likely remains tenuous, the signal being sent by the money supply's soaring growth is increasingly difficult to ignore. The current growth in liquidity has yet to affect overall inflation, but it is contributing to the buoyant stock market. To a large extent, the stock market's remarkable rebound since its precipitous decline last fall in the depths of the global financial crisis is due to the Fed's aggressive provision of liquidity during that period. In September, October and November of last year, M2 expanded at a monthly pace of over $40 billion. This is the strongest 3-month gain on record and compares to average monthly gains during the past five years of less than $20 billion. The Fed had little choice but to respond strongly to the deepening crisis by easing aggressively and providing ample liquidity to the economy. In the wake of the de facto failure of the hedge fund, Long Term Capital Management, credit and liquidity spreads soared and stock and bond issuance came to a virtual standstill. The Fed was acting in its role as lender of last resort, to ensure that financial markets did not fail to operate due to a lack of investor confidence. As a result of the Fed's actions, however, the stock market is back close to record highs and the economy shows scant sign of slowing. As soon as policymakers feel that the global economy and financial markets are on firmer footing, the Fed will have to quickly reign in the current runaway money supply growth or risk unleashing currently dormant inflationary pressures. The most significant casualty will likely be stock prices. Copyright © 1999, Dismal Sciences, Inc.® About the Dismal Scientist Questions, Comments, or Inquiries to: webmaster@dismal.com * * Note: We reserve the right to republish, sans email address, any relevant comments or questions sent to webmaster. The Dismal Scientist and Dismal Sciences are registered servicemarks of Dismal Sciences. Last WeekCalendarIndicatorsPrinciplesFederal ReserveEuroRegionsIndustriesMetrosStatesRank MetrosView MetrosEconomic SnapshotRank StatesView StatesPerspectivesFinancialIndustryInternationalLaborMisc.Other VoicesOutlookPoliticsRegionalDaily QuestionsU.S. MacroLeading IndicatorsMessage BoardsMarket ValuationCalculatorLinksDictionarySite MapCPIPPIIndexCategoricalEquipmentMaterialsServices