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Hello everyone,
I have a question, I'm noticeing what I think is a repeat in history for
the market. Last week the Fed unexpectly dropped rates, on Friday
rumors were spreading that Bankers Trust and BankAmerica have finanical
woes. The comparison is 1987 when the Saving and Loan system was in
trouble and the Fed came in and saved the S&L. A few weeks later the
market crashed. In 1930 the Bank of the United States Fails,1931 the
Bank Panic,1933 FDR closes banks.
Does anyone agree or disagree that the market might be in for a major
crash?
Source: IBD
"Also, with T-Bill yields trading at there 4 1/2 year lows, reason
traders rushed to safety of short term government debt amid rumors of
more bleeding at hedge funds and , perhaps, some damaged banks. Those
FEARS, and fresh data that show a weaker economy, have many thinking
that the Fed will cut interest rates again-soon."
Below is copied from Investors business daily newspaper, 10/19/98, page
A2
"Bankers Trust denies Street rumors that its having finanical
difficulties, A company spokesman pronounced BT in "sound financial
condition" after rumors dragged down its stock 5 1/2 to 51 3/8. Rumors
had the bank borrowing funds at Federal Reserve Bank of New York's
discount window, which extends emergency credits. The rumor was also
discounted by Goldman Sachs banking analyst Robert Albertson. BT has
been hurt by global financial turmoil."
"BankAmerica said the loan to troubled hedge fund DE Shaw &Co. and its
investments in Russian government bonds helped knock almost $1billion
off its bottom line. And a new report says BankAmerica knew as early as
August of the trading woes at Shaw."
Trade Well,
Joe Frabosilio
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