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"... for those unprepared..."
Why is it that those who are left 'in charge' of our
markets are unprepared? The market does not move THAT
much on any single day and usually the large moves are
in the general direction of the trend existing at the
time. It would only cost a miniscule amount of their
profits to be insulated from the risks that ultimately
all of us do bear. And because of the fact that these
powers that be ARE unprepared, liquidity is truly
nonexistent on those very, very rare occasions when
those same powers that be are supposed to be providing
it. But rest assured that the fed will be there in
order to guarantee that those reckless fellows go home
financially safe and sound, ready to return the next
day to continue their reckless profit-making.
Thanks for providing a sound argument for us moron
conspiracy theorists.
Christine
--- Adrian Pitt <apitt@xxxxxxxxxxxxx> wrote:
> Who knows what might happen if there was no support
> mechanisms....I dont
> think the answer is really that hard to work out.
> It would be a vicious
> world...many firms would go belly up..many people
> would become
> unemployed, but life would go on....there would be
> enormous short term
> hardship for those unprepared. But out of
> destruction would come new
> growth...just like after a fire rages through a
> forest....capitalism
> works...support or no support...
>
> Adrian
>
> -----Original Message-----
> From: p8 [mailto:pwh112358@xxxxxxxxxxx]
> Sent: Thursday, 20 November 2003 3:14 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: [RT] Re: Fed supporting market
>
>
> The idea does give a warm and fuzzy feeling.
>
> In reality the so-called free market can't seem to
> stay 100% free
> for a long time without being intervened sooner or
> later by the
> government. The "free" market tends to behave in a
> pendulum-like
> fashion, swinging perpetually from left to right
> (too much
> intervension vs no intervension) and passing that
> center point only
> in a fleeting moment.
>
> Could you provide a lasting, real-life example of a
> 100% free,
> unadulterated market?
>
> -p8
>
>
> --- In realtraders@xxxxxxxxxxxxxxx, Code 2
> <Code2@xxxx> wrote:
> >...<snip>...
> >
> > A free and unencumbered market can do a better job
> of deciding who
> should thrive and who shouldn't.
>
> ...<snip>...
> >
>
>
>
>
>
> >
> > ----- Original Message -----
> > From: Dan Goncharoff
> > To: realtraders@xxxxxxxxxxxxxxx
> > Sent: Wednesday, November 19, 2003 10:44 AM
> > Subject: Re: [RT] Re: Fed supporting market
> >
> >
> > Because the purpose of the government is to
> ensure that the
> market exists the next day. That is why liquidity is
> provided.
> >
> > As you yourself point out, some players went
> bankrupt, even a
> big bank, and survived. As you also point out, the
> market stopped
> functioning, and there was no way to hedge.
> >
> > The specialists with negative balances were
> deciding to commit
> yet more capital, in a situation where they taken
> significant losses
> already, to 'provide a bottom'. How did they know it
> was the right
> decision to buy when they did? They were taking yet
> more risk, and
> could have been wrong.
> >
> > Regards
> > DanG
> >
> >
> >
> > Ira wrote:
> >
> > During the Crash of 87 there were futures, the
> S&P was traded and
> options
> > on futures as well as the OEX. As for being
> bankrupt, many broker
> dealers
> > on the NYSE as well a market makers on the NASDAQ
> and on the
> options floors
> > and Specialists were carrying negative balances.
> In fact a bank
> in Chicago
> > did finally go belly up. There were many that
> didn't get the
> benefit of
> > that 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 big
> > trick. There was no way to hedge because every
> time you went to
> hedge they
> > would stop trading that item. With unlimited
> borrowing power many
> > specialist firms were allowed to stay in business
> with negative
> balances and
> > provide a bottom to that market. Options on the
> OEX that were
> almost 100
> > points out of the money were quoted as high as
> $65 and there were
> no
> > sellers for several hours. What happened to the
> American way
> then? Why
> > not 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 full
> > benefit of their positions? Once again the
> government stepped in
> to protect
> > the privileged and the political favoritism goes
> on. Will the Fed
> and Bush
> > let the Dow go to 5000 in an election year? How
> much pressure is
> placed
> > upon the Fed by the party in power? No one really
> knows except
> those in
> > power. All I can relay is what I have seen
> happen. The rest is
> just guess
> > work by those trying to find a reason.
> >
>
>
>
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