Good find, very interesting. Begs the question how do I do I do the carry trade in an Interactive Brokers account? Do I change the base currency of the account to the one with the lowest interest rate and then buy securities/bonds in the currency yielding the highest interes rate?
We saw this before, let me go get my previous response. Dang, couldn't find it. Anyway, just go look at the summary to see that the "evidence" is slight at best.
What exactly does the PPT do? Nasdaq went from 5000 to 1100 in 2 years, if the so called PPT were trying to keep that thing up, the market proved to be too powerful.
There's no need for a government sponsored PPT. At least in stocks. During liquidity crisis during equity declines the Fed merely uses the "surprise" rate cut as they did in Oct/98 and Jan/01. In obscene currency moves Central Banks intervene by buying or selling dollars for their own account. Likewise Treasury operations resemble a PPT exorcise since the Treasury obviously performs repo's, coupon passes ect. all the time. I've seen no evidence of such activity in equity meltdowns. The authors mention the MMI rally on Tuesday after the crash. Anyone in Chicago who was then trading can tell you that Blair Hull was the major buyer. He correctly surmised that if the NYSE was going to shut down for a couple of hours that the effect would be a "circuit breaker" and the market would rotate off it's lows. Just like when J.P. Morgan summoned one of his floor brokers into U.S. Steel after the 1929 crash and they bid up Steel in an effort to support the general list. I have to laugh. If someone thought there was a PPT back in 1987 then why did the market fall 22% on Monday and take Hutton out along with it? Just more "grassy knoll" bs.
Exactly. I used to see the Bundesbank intervene trying to defend the DM and Marks would rally like mad for an hour and by the next day resume making new lows.
Ever think that 58 people getting killed in London has little to do with the future valuation of share prices? If anything did it ever occur to you that given since the market bottomed as we were going to war in Iraq that terror may be now be a bull item for stocks?
What is the problem with PPT? We as traders want volatility, but we don't want EXTREME volatility. That would drive investors away from the markets and liquidity would dry up. If there is an artifical body that prevents the markets to take a nosedive, I am all for it. On the long run, it can not prevent a slow downturn, no matter how they try. (just as it was mentioned Nasdaq 5000>>>1100 anyone?)
There were no anywhere near enough informations at the time about the dead, the whereabouts of the bombers and the possibility that further and more devastating attacks where coming.