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Here's some food for thought for the weekend. James Padinha in his
Invisible Mouth column on http://www.thestreet.com has an interesting
article talking about possible a FED conspiracy.
OK, so "conspiracy" might be a bit strong. But there does appear to be some
sort of hidden agenda where the FED & Treasury are acting more overtly than
usual and perhaps extending the boundaries of their charters. Have AG & BR
decided that together they can save the world and help the US economy avoid
recession/depression down the road?
JW
abprosys@xxxxxxx <mailto:abprosys@xxxxxxx>
You'll have to be a subscriber or sign up for the 2 free week trial to read
the whole column. But here's a teaser:
>>This stinky trail extends back almost two years. Sources remind your
narrator that Greenspan gave his "Irrational Exuberance" speech at a private
dinner with the heads of the major brokerages three days before he gave it
publicly (on Dec. 5). Back in April Rubin waited to intervene until the
futures markets were closed and currency desks were changing over. The Feds
knew about LTCM late in August; they were testifying that hedge funds are
"not all that large in the total context of the system" as late as Sept. 16;
and they finally spilled the beans on Oct. 1 only after a lot of leaks --
and a request from the House Banking Committee. Somebody clearly knew about
yesterday's intermeeting action as early as last Thursday. The easing
announcement came less than 15 minutes after the futures close -- and one
day before options expiration. Today rumors about heavy discount window
borrowing and bank problems are flying.
One coincidence is an everyday occurrence. Two are weird. Three are freaky.
Four beg questions. What the hell is really going on? Who's protecting whom?
One fed funds futures trader sums things up this way:
I can trade against the money center banks and the proprietary accounts and
the brokerage firms, and on average make a decent living. But not when the
Fed stacks the deck.
I can hear the Cramer rebuttal already: What great timing! What great
traders Bob and Alan are!
Is that what this is about? Rubin and Greenspan showing they might be the
most astute traders on the planet? <<
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