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From: Giovanni zibordi <giovazibo@xxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>There is evidence that some direct manipulation has taken place in S&P
>futures this month <<SNIP>>
>Ambrose Evans-Pritchard on the London Telegraph...
>Steve Briese... has guessed that some institutions bought futures for the
New >York FED
Giovanni, I checked all the links you provided concerning direct
intervention by the Fed, and I couldn't find any specific info, but the
statement above is very telling. Steve Briese has GUESSED there has been
fed intervention. In other words, he has no specific, credible evidence
whatsoever that the Fed is directly buying stocks or futures.
The people in the news who are promoting this theory seem to fall into two
specific catagories. The first are simple members of the press trying to
sell a good story. Newspapers are for-profit entities, they have no duty or
requirement to print the truth, just to print what sells. Saying the Fed is
secretly buying stocks and futures is much more exciting than just saying
the investment community has become more bullish, and will sell a lot more
papers.
The second group are so-called market experts who were predicting much lower
lows, and are now trying to make an excuse for their bad market call
(Fleckenstein comes to mind...). In other words, they're saying "the real
market would have gone down more if left to its own fate, but the Fed
cheated us bears by pushing it back up."
>
>If there is a direct political interest in keeping the market up before the
>elections (even if the pollsters
>say it is only 2 or 3 percentage points it might be worth it)
>and if technically the NY FED can do it easily through the Exchange
>Stabilization Fund and going through some major brokers
> WHY NOT ?
This is a perfect example of how some "accurate" info can be used to reach a
very inaccurate conclusion. Yes, there is an Exchange Stabilization Fund,
that's the good news for the conspiracy theorists. The bad news is this
fund is operated by the Treasury Department, not the Fed, and it's used for
the buying and selling of foreign currencies and debt instruments to provide
currency stability. It has nothing to do with the stock market, and CANNOT
be used to buy or sell stocks or futures. The Treasury Dept is required to
report where every penny of this money is every quarter, and I can gaurantee
you in the 1/99 report there will be no "S&P Futures" listed in the assets
column for 4Q 1998. A simple search of the Treasury and Fed websites will
confirm this info.
If there is a fund for the Fed to directly intervene in the stock market,
this isn't it, and if such a fund exists, where's the evidence? Surely at
least one investigative reporter would have presented it to the public,
right? Until someone shows up with a concrete paper trail, this whole
theory is pointless.
Bruce
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