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Thanks
for the follow up Ira...as I suspected it wasn't the Fed you were referring to
but merely businesses involved in the markets..and of course the Fed took the
best course of action they could or were allowed...they supported the financial
system in times of extreme crisis.....yes some firms were favoured but in such a
short period of support time there will always be someone who misses out and
complains after the event..the important thing was though that it
prevented a potential catastrophe where large and normally liquid firms
could have gone under..the repercussions of which would have been horrendous,
causing mass disruption to the financial system and possible panic...making the
87 crash look irrelevant. As it turned out it was kept purely to the
financial system....and the economic growth continued. The negative and
conspiracy theory people will always complain and look for excuses but of course
they completely miss the obvious and most important stuff.
<FONT face=Arial color=#0000ff
size=2>
<FONT face=Arial color=#0000ff
size=2>Adrian
<BLOCKQUOTE
>
<FONT
face=Tahoma size=2>-----Original Message-----From: Ira
[mailto:mr.ira@xxxxxxxxxxxxx] Sent: Thursday, 20 November 2003 3:31
AMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT] Re:
Fed supporting marketDuring the Crash of 87 there
were futures, the S&P was traded and optionson futures as well as the
OEX. As for being bankrupt, many broker dealerson the NYSE as well a
market makers on the NASDAQ and on the options floorsand Specialists were
carrying negative balances. In fact a bank in Chicagodid finally go
belly up. There were many that didn't get the benefit ofthat very
favorable government loan treatment and lost millions on that day.I
personally know of one person that lost $80 million and another who
lost$20 million in a couple of hours. To lose a million on that day
was no bigtrick. There was no way to hedge because every time you
went to hedge theywould stop trading that item. With unlimited
borrowing power manyspecialist firms were allowed to stay in business with
negative balances andprovide a bottom to that market. Options on the
OEX that were almost 100points out of the money were quoted as high
as $65 and there were nosellers for several hours. What
happened to the American way then? Whynot let those that took the
unlimited risk go the way they should, bankrupt,and those that did have
limited risk or those that were short reap the fullbenefit of their
positions? Once again the government stepped in to protectthe
privileged and the political favoritism goes on. Will the Fed and
Bushlet the Dow go to 5000 in an election year? How much pressure is
placedupon the Fed by the party in power? No one really knows except
those inpower. All I can relay is what I have seen happen. The
rest is just guesswork by those trying to find a reason.-----
Original Message -----From: "Adrian Pitt"
<apitt@xxxxxxxxxxxxx>To:
<realtraders@xxxxxxxxxxxxxxx>Sent: Wednesday, November 19, 2003 1:53
AMSubject: RE: [RT] Re: Fed supporting market>
Ira,>> You're a well balanced and well educated
person....therefore you should> have no problem providing reference to
the statements you made below.>> Such as what do you mean by
unlimited credit? We all know central banks> can print money...so
what?>> Who went bankrupt? The Fed?>> Equity
futures have only been around since early 80's so are you saying> the
fed went bankrupt sometime in the past 20 years???>> If they
went to buy futures to make the market go up to help them from>
bankruptcy you must also be saying that their stock portfolio which
you> say they held was also a significant part of their assets???
Can you> present a balance sheet please showing this in the relenvant
year?>> This would be a fascinating insight for me, as it would
show one of the> most extraordinary events of the 20th century, with
barely a murmur in> the press about it, and show something radically
different from every> central bank balance sheet around the
world.>> Adrian>> > -----Original
Message-----> > From: Ira [mailto:mr.ira@xxxxxxxxxxxxx]> >
Sent: Wednesday, 19 November 2003 6:05 PM> > To:
realtraders@xxxxxxxxxxxxxxx> > Subject: Re: [RT] Re: Fed supporting
market> >> >> > What do you think they did with
the unlimited credit when> > they were bankrupt? They went out
and bought futures and> > stock to support the market and increase
the value of their> > portfolios.> > -----
Original Message -----> > From: Dan Goncharoff>
> To: realtraders@xxxxxxxxxxxxxxx> >
Sent: Tuesday, November 18, 2003 8:43 AM> > Subject: Re:
[RT] Re: Fed supporting market> >> >>
> Why is the Fed providing liquidity at a time of high
risk,> > when free markets may otherwise no longer function
properly> > in the short term, be worse than a branch of the
government> > making an active decision to buy futures. Providing
liquidity> > allows the market to function; buying futures favors
one side> > of the market over the other. In my view, buying futures
is> > as bad as selling futures -- it means the government is taking
sides.> >> > Ensuring the proper functioning
of the market is one of the> > stated functions of the financial
markets is one of the> > purposes of the Fed.> >>
> Regards> > DanG> >>
> Ira wrote:> >> >
I thought that it was aimed at government intervention in> > the
markets. It may not be the same as buying futures, it is worse.>
> ----- Original Message ----->
> From: Dan Goncharoff>
> To:
realtraders@xxxxxxxxxxxxxxx> >
Sent: Tuesday, November 18, 2003 7:18 AM>
> Subject: Re: [RT] Re: Fed supporting
market> >> >>
> Providing liquidity to the markets is
not the same as> > buying futures, which is the charge leveled in
the original message.> >>
> Regards>
> DanG> >>
> Ira wrote:> >>
> The fact is it did happen
in 1987. The fed told the> > banks to give unlimited
credit.>
> -----
Original Message ----->
> From: Dan
Goncharoff>
> To:
realtraders@xxxxxxxxxxxxxxx>
> Sent:
Tuesday, November 18, 2003 5:21 AM>
> Subject: Re:
[RT] Re: Fed supporting market> >> >>
> Have you ever
seen it claimed in a respected> > source? If so, I would be
interested in the reference,> > because I have long sought such a
mention in the established> > press, without success. AFAIK, it is
just foolish gossip.> >>
>
Regards>
> DanG>
>> >
BobsKC wrote:> >> > It is commonly accepted knowledge in
the business world and> > while I most> > certainly have
not personally observed the practice, I have> > no recall of>
> the White House ever denying it, either. If the market> >
tanks, so does> > Bush. Do you not believe that he has the
means to prevent this?> >> > Bob> >>
>> > At 02:57 PM 11/17/2003 -0800, you wrote:>
> This is a strong statement, variations of which I've
heard> > many times with no factual support. Is there any support
here?> >> > regards,> >> > tbr>
> > the Fed has shown in the past how it can hold up>
> markets via futures purchases> >> >>
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