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The more I nose around my client base the more serious I am taking the Feds
intervention. I have heard (this is at least third hand so I could really
have it screwed up) that Fed. Gov. Lindsey has been saying that he believes
the problem is systemic and that the Long Term Capital situation is only
the very tip of the ice berg. AND: The more I time I have spent on it and
the more customers I talk to the more I have come to realize how out of
character this intervention is for the Fed. As mad as they make me at
times they don't just party with a bunch of good ole boys (even if they are
Noble laureates) and then pay off. Someone there believes that there is a
serious.... serious problem. If the markets don't stabilize soon.... that
problem becomes acute.
Anyway, I don't know exactly what this all means.... maybe a big time
steepening trade as they pump liquidity in.... Certainly immense
ramifications for the Dollar/Yen and Dollar/Mark (maybe that why these two
charts are beginning to look so constructive).
A little off topic (sort of) food for thought.
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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