Street Insights Jaye Shartis Paraphrasing"FED was the One who JUMPED the Markets"

Discussion in 'Wall St. News' started by mahram, Sep 1, 2005.

  1. so what do you guys think, the reason why the markets went up on monday was because of the fed coming in and buying futures. The reason why we are seeing weakness now is the fed sellling off those stocks and futures. Any truth here

    Is Fed's 'Working Group' Stabilizing Markets?
    9/1/2005 10:36 AM EDT

    Before consigning such thinking to "conspiracy theorists," it does explain the curious market action we have observed.



    Have you noticed what the market has done in the wake of worrisome, ostensibly bearish events? The two latest examples are, of course, the London bombings and the current Katrina-induced crisis. You will recall that after the London events, the market opened lower, though well above the premarket lows, and soon proceeded to stage a powerful rally. Yesterday's action was eerily similar. I submit a hypothesis: Considering that a resolution of the oil crisis was nowhere in evidence yesterday, quite the contrary, one would have expected a down market or at best one very hesitant, not an explosive rally.

    So what's going on? My opinion is that the "working group," a shadowy arm of the Fed, steps in to "stabilize" things and give the public a reason for optimism. This is done through the index futures market and has long been rumored to have stopped the crash in 1987.

    Consider the effect of a market plunge on an already black mood. The crisis is real and people's lives and livelihoods are at stake, so perhaps such clandestine intervention is justified and trumps the concept of "free markets." Before consigning such thinking to "conspiracy theorists," it does explain the curious market action we have observed and most importantly, armed with such knowledge, one could, upon the next frightening event, go long with a high level of assurance that a strong rally was very soon to start.

    Position: None mentioned
     
  2. it should say Jay Shartsis, mea culpa

     
  3. just his opinion. where is the proof? do you know how hard it would be to hide such a thing?
     
  4. well it would seem logical right, it would explain why the markets jumped alot, and there was tons of futures activity at the beginning. Also over the last few days you have lots of futures selling which would explain his hypothesis.

     
  5. All the Fed has to do is flood the market with money. They do this with repurchase agreements.
    http://www.answers.com/repurchase+agreement

    According to this theory, that's why stocks have risen. And it's why bonds have risen even more than stocks.
     
  6. Back in the late 80s I talked to Jay daily, strange guy. I don't for a second doubt the Fed buys liquidity in the equity markets, but as Vhehn suggested, it's a logistical nightmare and would be very difficult to keep quiet. It would have to be futures-driven, if it does occur. After all, the Fed needs to save the public from themselves.
     
  7. couldnt they just get the big brokergaes to do it for them and then settle up later? all i know is govt says "free market" until it suits them otherwise
     
  8. Goldman Sachs and the Fed are tight.
     
  9. for years was a standing offer of 100,000 to anyone who can prove the fed buys futures. it has never been collected. dont you think someone would know and spill the beans? conspiricy theorys that require a lot of people cant last long. it becomes too hard to control all the players and keep the information under wraps.
     
  10. How do three ppl keep a secret? Kill the other two. I'll admit it would be difficult, but the Fed would make it worth their silence. Probably paying GS $30/rt for the privilege. :p
     
    #10     Sep 1, 2005