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<DIV><FONT face=Arial size=1>For five years, at least, American business has
been in the grip of an apocalyptic, holy-rolling<BR>exaltation over the
unparalleled prosperity of the "new era," upon which we, or it, or<BR>somebody
has entered. Discussions of economic conditions in the press, on the platform,
and<BR>by public officials have carried us into a cloudland of fantasy where all
appraisal of present and<BR>future accomplishment is suffused with the vague
implication that a North American millenium<BR>is imminent. Clear, critical,
realistic and rational recognition of current problems and<BR>perplexities is
rare. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>Changes in the structure and processes of American
industry and trade have been swift and<BR>sweeping, as the President's Committee
on Recent Economic Changes has so well shown.<BR>Have these changes
fundamentally altered the conditions of economic security and progress
for<BR>either the individual business man or the nation? The simple truth is
that we do not know. The<BR>Committee was honest and scientific enough to say
so. American business should be sane and<BR>sensible enough to recognize it.
</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>There is not a single new and important development
in our economic life in recent years of<BR>which we can confidently calculate
the consequences or judge the soundness and permanence.<BR>We have seen an
amazing increase in man-hour production in industry since the war, but we<BR>do
not know why it took place then, or whether it was merely a resumption of a
rise, quite as<BR>rapid, that had been going on for fifty years before the war.
We certainly do not know how<BR>long or rapidly it can continue, or, if it does,
whether and how the problems of adjusting<BR>employment and consumer purchasing
power to it will be met. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>We have seen new industries rise like rockets, and
old ones grow tired and die. We do not<BR>know how soon the new ones will fizzle
out, or what others will take their place. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>We have seen the machinery of distribution formed
and reformed into new patterns changing<BR>every day before our eyes, but no one
can say precisely where they leave the consumer and<BR>the independent
enterpriser, or whether they will fundamentally alter the costs of
distribution<BR>or mitigate the rigors of commercial competition. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>We have seen security prices soar out of sight of
earnings, brokers' loans swell till they absorb<BR>a third of the banking
resources of the country, and the blind pools of ancient days return
and<BR>multiply by endless crossing and pyramiding as the investment trusts of
today. Banks merge<BR>and emerge in chains, trailing trusts and holding
companies, while industrial corporations pay<BR>dividends not by producing goods
but by buying each others' stocks and by borrowing and<BR>lending everybody's
money in the market. But of all these things can anyone say with surety<BR>what
they signify, whether they are safe and sound, or what they are leading to? We
do not<BR>even know, or cannot agree, whether inflation exists, what it means,
or how it shall be<BR>measured. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>In face of the ignorance, uncertainty, and
irrationality that surround every aspect of the "new<BR>era," it were wisdom for
business to keep its feet firmly on the ground and assume for the<BR>present
that the principles that prevailed through the long business past still govern
the stability<BR>and success of business today. </FONT></DIV>
<DIV><FONT face=Arial size=1>Business Week -- September 7, 1929 </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial></FONT> </DIV>
<DIV><FONT color=#ff0000 face=Arial size=1><STRONG>Other 1929 "New Era"
Quotations</STRONG></FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=1>"Apparently there has been a fundamental change in
criteria for judging security values.<BR>Widespread education of the public in
the worth of equity securities has created a new<BR>demand." </FONT></DIV>
<DIV><FONT face=Arial size=1>The Outlook & Independant Magazine, May 15,
1929</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial><BR><FONT size=1>"It has seemed to be taken for granted in
speculative circles that this is a market of 'manifest<BR>destiny,' and that
destiny is to go continuously forward. </FONT></FONT></DIV>
<DIV><FONT face=Arial size=1>New York Times, September 1929</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial><BR><FONT color=#ff0000 size=1><STRONG>Quotations from the
last "New Era"</STRONG></FONT></FONT></DIV>
<DIV><FONT face=Arial size=1></FONT> </DIV>
<DIV><FONT face=Arial size=1>"There seems to be a consensus that the present is
something of a 'new era'... a number of<BR>conservative economists and
businessmen now accept the idea that expansion can go<BR>indefinitely."
</FONT></DIV>
<DIV><FONT face=Arial size=1>U.S. News & World Report, November15,
1965</FONT></DIV>
<DIV><FONT face=Arial><BR><FONT size=1>"Backers of the 'new economics' think
Government now can keep the boom going<BR>indefinitely." </FONT></FONT></DIV>
<DIV><FONT face=Arial size=1>U.S. News & World Report, November 15,
1965</FONT></DIV>
<DIV><FONT face=Arial><BR><FONT size=1>"Plan just right, be prepared to act at
the first sign of trouble, and recessions can be<BR>prevented."
</FONT></FONT></DIV>
<DIV><FONT face=Arial size=1>U.S. News & World Report, November 15,
1965</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial><BR><FONT size=1>"The United States has entered a new
investment era to which the old guidelines no longer<BR>apply."
</FONT></FONT></DIV>
<DIV><FONT face=Arial size=1>Barron's, February 3,
1969</FONT></DIV></BODY></HTML>
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From: "James Taylor" <jptaylor@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Subject: [RT] Greenspan's FOMC Testimony March 22, 1994
Date: Sun, 16 Apr 2000 09:13:40 -0700
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<DIV><FONT size=1>Digging through Federal Open Market Committee meeting minutes
reveals that Alan Greenspan was worried about the stock market bubble as far
back as 1994 when the DOW was at a mere 4000. Makes you wonder what he
thinks today. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=1> "Everything that we know about
markets is that abnormal rates of return, especially<BR>
those built on capital gains, cannot persist. Indeed, the closest example
of this in recent<BR> times was the pre-September 1992
hedging, or I should say investments, in a number of<BR>
European currencies. You will recall that the Swedish kronor was yielding
significantly more<BR> that most money market
instruments and the deutschemark. So everyone figured that
the<BR> kronor was locked into the deutschemark, and so
investors took positions in the Swedish<BR> kronor at
high interest rates, hedging it in the deutschmark/dollar market, and got
blown<BR> apart. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=1> "I think we are looking at something
not terribly significantly different in this current<BR>
situation. Prior to our move on February 4th, the market had drifted into
a state of<BR> somnamulance at low risk premiums, and
there were steady upward price pressures.
While<BR> <STRONG>we all recognized at the time that the
stock market was a little dicey and we were worried<BR>
about the mutual funds, I don't think we were aware of the apparent underlying
speculative<BR> element involves in the markets on a
worldwide basis</STRONG> that I think our February
move<BR> unearthed. I think it was a wakeup call
which basically got everyone to look up and say:<BR> How
long can this go on? And if our wakeup call had not occurred on February
4th, there<BR> would have been another wakeup call
coming some other time within days, weeks, or months.
<BR> I believe we in effect dislodged a brick from the
edifice when it was vulnerable to being hit by<BR>
something. What actually eventually hit it was the Philadelphia Federal
Reserve's February<BR> publication. That morning
the CPI came out at zero and the bond market took off; it rose
to<BR> 6.39 percent on the 30-year bond, which was 10
basis points above its level before we moved,<BR> and by
the end of the day the Philadelphia Fed index for February came out, it closed
at 6.54<BR> percent. Now, it wasn't the
Philadelphia Fed index itself that moved the market; that was
a<BR> catalyst. The was we know that is that what
the March index came out and the index turned<BR>
around, the bond market tried to rally and it rallied for about 10 minutes and
got its head cut<BR> off. So really, these are
secondary catalysts to a far more fundamental restructuring
that's<BR> going on. News of the market structure
are undergoing a major review at this stage and<BR>
portfolios are undergoing dramatic changes. We have seen some increase in
yield spreads but<BR> they are still quite low by any
historic standard, which suggests to me that the
adjustment<BR> process in the capital markets, in the
portfolios of pension funds, mutual funds, and
individual<BR> households, still have a long way to
go. I'm not saying that means that interest rates have
to<BR> adjust; I mean that the portfolios are out of
kilter and are still being adjusted. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=1> "When we moved on February 4th, I
think our expectation was that we would <STRONG>prick
the<BR> bubble in the equity markets</STRONG>.
What in fact occurred is that, as evidence of the
dramatic<BR> shift in the economic outlook began to
emerge after we moved and long-term rates began to<BR>
move up, we were also clearly getting a major upward increase in expectations of
corporate<BR> earnings. While the stock market
went down after our actions on February 4th, it has
gone<BR> down really quite marginally on net over this
period. <STRONG>So what has occurred is that while
this<BR> capital gains bubble in all financial assets
had to come down</STRONG>, instead of the decline<BR>
being concentrated int he stock area, it shifted over into the bond area.
But the effects<BR> are the same. These are major
capital losses, which have required very dramatic changes
in<BR> the actions and activities on the part of
individuals and institutions." </FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=1> - Alan
Greenspan, Federal Open Market Committee meeting, March 22, 1994</FONT></DIV>
<DIV><FONT face=Arial></FONT> </DIV>
<DIV><FONT face=Arial size=1>Full text of Open Market Meeting</FONT></DIV>
<DIV><FONT size=1><A
href="http://www.itulip.com/940322Meeting.pdf";>http://www.itulip.com/940322Meeting.pdf</A></FONT></DIV>
<DIV> </DIV></BODY></HTML>
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From: "Michael Ferguson" <wl7bdn@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
References: <01d901bfa7bb$adebd4e0$248c15cf@xxxx>
Subject: [RT] Re: Good News for Longs (a possible delay before the real selling begins ?)
Date: Sun, 16 Apr 2000 11:14:56 -0500
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<DIV><FONT face="Century Schoolbook">While I agree with you that there is a
bursting bubble, I am perplexed as to how buying futures contracts alters the
price of stocks that are under distribution. If this is how the market works it
is news to me. I thought that the futures contract reflected the best guess of
the future value of the component securities in a cause-effect relationship. If
this is wrong, if the futures do not anticipate the cash, I want to know how it
<STRONG><U>really</U></STRONG> works!</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face="Century Schoolbook">Thanks,</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Michael</DIV>
<DIV> </DIV>
<DIV><BR> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A href="mailto:jptaylor@xxxxxxxxxxxxxxx"; title=jptaylor@xxxxxxxxxxxxxxx>James
Taylor</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, April 16, 2000 10:51</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RT] Good News for Longs (a
possible delay before the real selling begins ?)</DIV>
<DIV><BR></DIV>
<DIV><FONT face=Arial size=2>
<DIV>Good news for the scared longs, I do believe that the Fed's Plunge
Protection Team is anxiously watching the market and will be buying this week
to prevent the whole ponzi-scheme from coming unraveled. They will
support the market by buying futures (as I believe they did the day the Nasdaq
dropped 500 a week ago). But the good news will not last long, as the
mutual fund inflows are likely already spent ($14 billion) and now in
the pockets of shorts, the get-rich mentality of the burned daytraders has
changed, and the lock-up period for a massive pile of stock ($150 Billion) of
last year's Internet IPOs (250 last year alone) is upon us, and productivity
numbers are due out May 14th (and it should be judgement
day). I would(will) be a seller of any rallies for the near term,
especially stocks that have not yet suffered major drops that are sitting on a
mountain of gains.</DIV>
<DIV> </DIV>
<DIV>and the sheep shall be shorn.........</DIV>
<DIV><A
href="http://www.itulip.com/sheeple.html";>http://www.itulip.com/sheeple.html</A></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Quotation of the day -- from the Motley Fool Bulletin Board</DIV>
<DIV>"As I sit tonight - I have no shares of Celera in my account and
an<BR>account that was worth almost $60,000 and was full of 6
promising,<BR>fantastic stocks is now worth $0." </DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><FONT size=2>Definition of the day</FONT></DIV>
<DIV><FONT color=#ff0000 size=2>Panic</FONT></DIV>
<DIV><FONT size=2>panicn1 : a sudden overpowering fright; esp : a sudden
unreasoning terror often accompanied by mass flight 2 : a sudden widespread
fright concerning financial affairs and resulting in a depression of values
caused by violent measures for protection of securities or other property
</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV> </DIV></FONT></DIV></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Sun Apr 16 09:35:59 2000
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Message-ID: <021b01bfa7bf$aac20f60$248c15cf@xxxx>
From: "James Taylor" <jptaylor@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
References: <01d901bfa7bb$adebd4e0$248c15cf@xxxx> <004401bfa7be$f97e6be0$1701c1d1@xxxxxxxxxxxxxxxxx>
Subject: [RT] Re: Good News for Longs (a possible delay before the real selling begins ?)
Date: Sun, 16 Apr 2000 09:20:18 -0700
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<DIV><FONT face=Arial size=2>The investment houses watch the futures market and
base their</FONT></DIV>
<DIV><FONT face=Arial>buy and sell programs on the actions of the
market.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>I do however think their options are limited, since I do
believe that they are 'all in', and the mass exodus will be swift.</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A href="mailto:wl7bdn@xxxxxxxxxxxxx"; title=wl7bdn@xxxxxxxxxxxxx>Michael
Ferguson</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:jptaylor@xxxxxxxxxxxxxxx";
title=jptaylor@xxxxxxxxxxxxxxx>jptaylor@xxxxxxxxxxxxxxx</A> ; <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, April 16, 2000 9:14
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [RT] Good News for Longs (a
possible delay before the real selling begins ?)</DIV>
<DIV><BR></DIV>
<DIV><FONT face="Century Schoolbook">While I agree with you that there
is a bursting bubble, I am perplexed as to how buying futures contracts
alters the price of stocks that are under distribution. If this is how the
market works it is news to me. I thought that the futures contract reflected
the best guess of the future value of the component securities in a
cause-effect relationship. If this is wrong, if the futures do not anticipate
the cash, I want to know how it <STRONG><U>really</U></STRONG>
works!</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face="Century Schoolbook">Thanks,</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Michael</DIV>
<DIV> </DIV>
<DIV><BR> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A href="mailto:jptaylor@xxxxxxxxxxxxxxx";
title=jptaylor@xxxxxxxxxxxxxxx>James Taylor</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, April 16, 2000
10:51</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RT] Good News for Longs (a
possible delay before the real selling begins ?)</DIV>
<DIV><BR></DIV>
<DIV><FONT face=Arial size=2>
<DIV>Good news for the scared longs, I do believe that the Fed's Plunge
Protection Team is anxiously watching the market and will be buying this
week to prevent the whole ponzi-scheme from coming unraveled. They
will support the market by buying futures (as I believe they did the day the
Nasdaq dropped 500 a week ago). But the good news will not last long,
as the mutual fund inflows are likely already spent ($14 billion) and
now in the pockets of shorts, the get-rich mentality of the burned
daytraders has changed, and the lock-up period for a massive pile of stock
($150 Billion) of last year's Internet IPOs (250 last year alone) is upon
us, and productivity numbers are due out May 14th (and it should be
judgement day). I would(will) be a seller of any rallies for the
near term, especially stocks that have not yet suffered major drops that are
sitting on a mountain of gains.</DIV>
<DIV> </DIV>
<DIV>and the sheep shall be shorn.........</DIV>
<DIV><A
href="http://www.itulip.com/sheeple.html";>http://www.itulip.com/sheeple.html</A></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Quotation of the day -- from the Motley Fool Bulletin Board</DIV>
<DIV>"As I sit tonight - I have no shares of Celera in my account and
an<BR>account that was worth almost $60,000 and was full of 6
promising,<BR>fantastic stocks is now worth $0." </DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><FONT size=2>Definition of the day</FONT></DIV>
<DIV><FONT color=#ff0000 size=2>Panic</FONT></DIV>
<DIV><FONT size=2>panicn1 : a sudden overpowering fright; esp : a sudden
unreasoning terror often accompanied by mass flight 2 : a sudden widespread
fright concerning financial affairs and resulting in a depression of values
caused by violent measures for protection of securities or other property
</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
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Subject: [RT] Re: Good News for Longs (a possible delay before the real
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It works, in this case, as an arb. If the futures become over priced,
the arbitrageurs step in an buy a basket of stocks and sell the S&P
futures. They then receive the higher interest rate upon their investment,
fully hedged, and the dividends. When equilibrium is once again reached
the fed steps in and drives the futures higher, and the arbitrageurs do
the rest. Now you have rising stock prices and rising futures prices.
So the tail at times really does wag the dog. Ira
<p>Michael Ferguson wrote:
<blockquote TYPE=CITE><style></style>
<font face="Century Schoolbook">While
I agree with you that there is a bursting bubble, I am perplexed as to
how buying futures contracts alters the price of stocks that are under
distribution. If this is how the market works it is news to me. I thought
that the futures contract reflected the best guess of the future value
of the component securities in a cause-effect relationship. If this is
wrong, if the futures do not anticipate the cash, I want to know how it
<b><u>really</u></b> works!</font> <font face="Century Schoolbook">Thanks,</font> Michael
<blockquote
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<div style="FONT: 10pt arial">----- Original Message -----</div>
<div
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><b>From:</b>
<a href="mailto:jptaylor@xxxxxxxxxxxxxxx"; title="jptaylor@xxxxxxxxxxxxxxx">James
Taylor</a></div>
<div style="FONT: 10pt arial"><b>To:</b> realtraders@xxxxxxxxxxxxxxx</div>
<div style="FONT: 10pt arial"><b>Sent:</b> Sunday, April 16, 2000 10:51</div>
<div style="FONT: 10pt arial"><b>Subject:</b> [RT] Good News for Longs
(a possible delay before the real selling begins ?)</div>
<font face="Arial"><font size=-1>Good news for the scared longs,
I do believe that the Fed's Plunge Protection Team is anxiously watching
the market and will be buying this week to prevent the whole ponzi-scheme
from coming unraveled. They will support the market by buying futures
(as I believe they did the day the Nasdaq dropped 500 a week ago).
But the good news will not last long, as the mutual fund inflows are likely
already spent ($14 billion) and now in the pockets of shorts, the
get-rich mentality of the burned daytraders has changed, and the lock-up
period for a massive pile of stock ($150 Billion) of last year's Internet
IPOs (250 last year alone) is upon us, and productivity numbers are due
out May 14th (and it should be judgement day). I would(will)
be a seller of any rallies for the near term, especially stocks that have
not yet suffered major drops that are sitting on a mountain of gains.</font></font> <font face="Arial"><font size=-1>and
the sheep shall be shorn.........</font></font><font face="Arial"><font size=-1>http://www.itulip.com/sheeple.html</font></font> <font face="Arial"><font size=-1>Quotation
of the day -- from the Motley Fool Bulletin Board</font></font><font face="Arial"><font size=-1>"As
I sit tonight - I have no shares of Celera in my account and an</font></font>
<br><font face="Arial"><font size=-1>account that was worth almost $60,000
and was full of 6 promising,</font></font>
<br><font face="Arial"><font size=-1>fantastic stocks is now worth $0."</font></font> <font face="Arial"><font size=-1>Definition
of the day</font></font><font face="Arial"><font color="#FF0000"><font size=-1>Panic</font></font></font><font face="Arial"><font size=-1>panicn1
: a sudden overpowering fright; esp : a sudden unreasoning terror often
accompanied by mass flight 2 : a sudden widespread fright concerning financial
affairs and resulting in a depression of values caused by violent measures
for protection of securities or other property</font></font> </blockquote>
</blockquote>
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Subject: [RT] Re: Good News for Longs (a possible delay before the real selling begins ?)
Date: Sun, 16 Apr 2000 11:51:13 -0500
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<DIV><FONT face="Century Schoolbook">Ira,</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face="Century Schoolbook">I understand the theory now. This should be
testable somehow. Would the premium be inverted, or how would you quantify this
action? Does this work as an underwriting setup with the fed backing the
large houses? And, what does this do to the hedge funds?</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV>Michael</DIV>
<DIV> </DIV>
<DIV><BR> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
Ira Tunik </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, April 16, 2000 11:33</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RT] Re: Good News for Longs (a
possible delay before the real selling begins ?)</DIV>
<DIV><BR></DIV>It works, in this case, as an arb. If the futures become
over priced, the arbitrageurs step in an buy a basket of stocks and sell the
S&P futures. They then receive the higher interest rate upon their
investment, fully hedged, and the dividends. When equilibrium is once
again reached the fed steps in and drives the futures higher, and the
arbitrageurs do the rest. Now you have rising stock prices and rising
futures prices. So the tail at times really does wag the dog. Ira
<P>Michael Ferguson wrote:
<BLOCKQUOTE TYPE="CITE">
<STYLE></STYLE>
<FONT face="Century Schoolbook">While I agree with you that there is a
bursting bubble, I am perplexed as to how buying futures contracts alters
the price of stocks that are under distribution. If this is how the market
works it is news to me. I thought that the futures contract reflected the
best guess of the future value of the component securities in a cause-effect
relationship. If this is wrong, if the futures do not anticipate the cash, I
want to know how it <B><U>really</U></B> works!</FONT> <FONT
face="Century Schoolbook">Thanks,</FONT> Michael
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message -----</DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A href="mailto:jptaylor@xxxxxxxxxxxxxxx";
title=jptaylor@xxxxxxxxxxxxxxx>James Taylor</A></DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx</A></DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, April 16, 2000
10:51</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RT] Good News for Longs (a
possible delay before the real selling begins ?)</DIV> <FONT
face=Arial><FONT size=-1>Good news for the scared longs, I do believe that
the Fed's Plunge Protection Team is anxiously watching the market and will
be buying this week to prevent the whole ponzi-scheme from coming
unraveled. They will support the market by buying futures (as I
believe they did the day the Nasdaq dropped 500 a week ago). But the
good news will not last long, as the mutual fund inflows are likely
already spent ($14 billion) and now in the pockets of shorts, the
get-rich mentality of the burned daytraders has changed, and the lock-up
period for a massive pile of stock ($150 Billion) of last year's Internet
IPOs (250 last year alone) is upon us, and productivity numbers are due
out May 14th (and it should be judgement day). I would(will)
be a seller of any rallies for the near term, especially stocks that have
not yet suffered major drops that are sitting on a mountain of
gains.</FONT></FONT> <FONT face=Arial><FONT size=-1>and the sheep
shall be shorn.........</FONT></FONT><FONT face=Arial><FONT size=-1><A
href="http://www.itulip.com/sheeple.html";>http://www.itulip.com/sheeple.html</A></FONT></FONT> <FONT
face=Arial><FONT size=-1>Quotation of the day -- from the Motley Fool
Bulletin Board</FONT></FONT><FONT face=Arial><FONT size=-1>"As I sit
tonight - I have no shares of Celera in my account and an</FONT></FONT>
<BR><FONT face=Arial><FONT size=-1>account that was worth almost $60,000
and was full of 6 promising,</FONT></FONT> <BR><FONT face=Arial><FONT
size=-1>fantastic stocks is now worth $0."</FONT></FONT> <FONT
face=Arial><FONT size=-1>Definition of the day</FONT></FONT><FONT
face=Arial><FONT color=#ff0000><FONT
size=-1>Panic</FONT></FONT></FONT><FONT face=Arial><FONT size=-1>panicn1 :
a sudden overpowering fright; esp : a sudden unreasoning terror often
accompanied by mass flight 2 : a sudden widespread fright concerning
financial affairs and resulting in a depression of values caused by
violent measures for protection of securities or other
property</FONT></FONT> </BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Sun Apr 16 12:04:16 2000
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Date: Sun, 16 Apr 2000 13:27:51 -0500
From: Lester Ingber <ingber@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Subject: [RT] Re: LISTING of RT CONTRIBUTOR URLs
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Status:
Peyton (& Jim & Chris):
: How about this....anyone on RT with a site or webpage they either created
: individually or are aware of as a good reference tool,... a page created by
: someone else on RT where quality information is shared freely,..etc......
: please send me the link (URL) and I will keep track of these and post them
: to the RT group in a week or so.
I get several hundred downloads a day from site www.ingber.com which
offers free code and papers relevant to work in several branches of
finance. However, I don't know how useful it would be to RT readers to
try to distinguish between "academic-but-useful" vs "commercial" sites,
etc. I think that just as with any journal, the Editor has to assume
the responsibility to make a final decision on which sites to include.
Lester
P.S.
In the context of looking for correlations among markets, if you use
"standard" statistics you are implicitly assuming normal distributions.
You may not wish to do this, e.g., if you are looking at correlations
among options, and you are using "standard" Black-Scholes pricing
algorithms, you might consider having correlations among log-normal
multivariate markets. If you with to use a different distribution for
markets, e.g., as you might determine from your own fits to data over
time scales you are trading, then those distributions should be used, etc.
If you don't want to bother with all this, i.e., if you feel it is
unnecessary, fine. If you do want to bother with this, you have to
bother with setting up your algorithms, doing nonlinear optimization to
find the correlations, etc. (This is an example of how/why some people
use my optimization codes.)
L
--
Lester Ingber <ingber@xxxxxxxxxx> http://www.ingber.com/
PO Box 06440 Wacker Dr PO Sears Tower Chicago IL 60606-0440
<ingber@xxxxxxxxxxxxxxxxxx> http://www.alumni.caltech.edu/~ingber/
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