--- Begin Message ---
Subject: Crudell-NEW YORK FED NEARLY ADMITS RIGGING THE MARKET
From: Anonymous <nobody@xxxxxxxxxx>
Date: 6 Nov 1998 23:56:25 +0100
Comments: This message did not originate from the Sender address above.It was remailed automatically by anonymizing remailer software.Please report problems or inappropriate use to theremailer administrator at <abuse@xxxxxxxxxx>.
Newsgroups: misc.invest.technical,misc.invest.futures,misc.invest.stocks
Organization: mail2news@xxxxxxxxxx
Xref: the-fly.zip.com.au misc.invest.technical:47314 misc.invest.futures:60656 misc.invest.stocks:230305
---- Begin Forwarded Message
Crudell-NEW YORK FED NEARLY ADMITS RIGGING THE MARKET
New York Post-November 6, 1998
NEW YORK FED NEARLY ADMITS RIGGING THE MARKET
By JOHN CRUDELE
COM'ON. Tell the world that you're rigging the market.
The Federal Reserve is just dying to admit that it has been doing
brilliant - but alas, questionable - things to keep the stock market
bubble inflated. A Wall Street Journal article on Monday is the closest
the Fed has ever come to making this admission, although the newspaper
apparently didn't know what it was on to.
The Journal story was about the bailout of the hedge fund, Long-Term
Capital Management, and how the Fed stepped in to save the day.
The story gets interesting in the seventh paragraph, when it starts
talking about Peter Fisher, the 42-year-old, No. 2 man at the New York
Fed, whose official job is running the Fed's trading operation.
In that capacity, Mr. Fisher is the Fed's eyes and ears on the inner
workings of stock, bond and currency markets and is given a wide degree
of latitude about deciding when certain events pose broader risks, the
article says.
He begins most workdays at 5 a.m. by checking the status of overseas
markets...and ends them 11 p.m. the same way. In between Mr. Fisher
SWAPS intelligence and rumors with traders and dealers from his office
in the Fed's 10th-floor executive suite that overlooks the trading floor
he runs, the piece continues.
As I pointed out in a previous column, the market has done some strange
things in the wee hours of the morning, especially between 5 a.m. and 7
a.m., which ultimately affect how equities do in the New York market.
Now I'm not necessarily against rigging the stock market. In fact, back
when stock prices were collapsing a few months ago and everyone was
whining, I wrote in this column that someone at the Fed or the Treasury
ought to figure out how to rig the market and start doing it.
I even pointed them to a piece in the Journal back in October 1989 when
former Fed governor Robert Heller, suggested that it was the
government's responsibility to rig the market in times of emergency.
But I also believe that if the markets are being supported by the
government that Washington should be responsible enough to alert the
investing public. If people still want to put money in the market, fine.
Maybe they'll even want to put more in.
Remember Tokyo rigged its stock market for many, many years until its
stock market collapsed and destroyed the economy.
Now back to Fisher.
What exactly does he give to these traders and dealers he talks to at 5
a.m. in the morning? Swaps, which is the word the Journal reporter came
away with, implies a give-and-take. What is Fisher, the second highest
person in the New York Fed's hierarchy giving to traders?
Just gossip? Or is Fisher giving away what Wall Street calls inside
information.
And why are Fisher and the Fed concerned about the stock market? The Fed
has jurisdiction over the dollar and, as an extension, bonds. It would
be a big expansion of the Fed's powers to suddenly have authority over
stocks.
But since this nation's economy has become so dependent on the stock
market's success, the Fed's current interest in equities would not be
surprising.
I asked to talk with Fisher. I said I wanted to know about his interest
in the stock market and the swapping of information.
The Fed wouldn't allow it. I'm sorry but we've not going to make Peter
available, said a spokesman in New York. He's kinda busy. I think the
spotlight on him right now is a little too bright.
You're damned right it is too bright - it almost caught him doing his
trick with the market.
--- End Message ---