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Dave,
I also religiously stay out of the Market before an FOMC announcement. On
Thursday, I was fortunate to have closed out a Short position just a few
minutes before the Greenspan armageddon.
The only thing that makes sense to me is that he basically represents the
"buy & hold" investor and you can imagine how they felt when they learned of
a 300+ point pop in the DOW on their evening news. Presumably, he was
trying to restore confidence to the small investor, but not much consolation
for us bronco riders.
Then, there's always the conspiracy theories-- he did it to bail out another
hedge fund that was about to croak; he knows something bad that we don't,
etc. I think he's too smart for ulterior motives because his stellar
reputation would be trashed if any collusion could ever be proven.
Let's just hope that he doesn't pull the rug again.
______________________________________
At 12:01 AM 10/17/98 -0700, you wrote:
>What I don't get is why the fed would intentionally wreak havoc with the
>financial markets like that. I have a rule that I never have a trade on
>in front of an important Fed announcement, but there is just no way to
>prepare for that kind of carnage. Greenspan had to know that this would
>cause some serious margin calls, perhaps bankruptcies, for potentially
>50% of the traders with positions in the futures markets. I hope he has
>a clear concience about that.
>
>Dave
>
>
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