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Talk about a Gossip Colum, this Invisible Mouth sounds
like Louella Parsons in her heyday. All is inuendo or
allegations without substantiation. No outside sources are
named, no other names are mentioned except AG & BR.
And there is a great leap of faith that distant events are
somehow related and planned (conspiracy).
Maybe the full column has more reliable statements but
then we have to pay for that and then maybe there's not much
more reality.
LTCM is not a Fed problem. The banking regulators were
blindsided. It wasn't in AG's mind a week ago to cut rates
but it was all over the press with many Wall St experts and
economists calling for more cuts and deeper than the last one.
Also it was reported in the Washington Post that AG held a
conference call with most of the FRB Governors last Thursday
before making an official announcement. Imagine if most of the
Governors were opposed to further cuts - would he have done it?
It's easy to shout conspiracy .I thought it was a conspiracy
between the pitchers and McGuire and Sosa to let them hit more
home runs once they passed the old records. M & S produced
home runs almost neck and neck with each other for a while.
Would the Invisible Mouth have said that one time breaking
a record could be coincidence but several times after that when
they kept their own records within 2 HR's of each other -
wasn't that freaky?
And who is that "futures trader" who can handle brokerages
and proprietary trading desks but not the Fed? Did he ever
hear of Event Driven trading?
Sorry to waste the time to say all this.
Better to have real facts for others to judge and evaluate.
Regards,
Stan
----------
> From: JW <abprosys@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: FED Conspiracy?
> Date: Saturday, October 17, 1998 1:03 AM
>
> 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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