Replies to post #106886 on Zeev's Turnips Patch-No Politics (ZEEV)

[federal reserves]

KyrosL> The medium is the message......

the FED is the medium, the Wall Street Banks run the show and they are the message. IMHO, the Wall Street banks run the FED. Right now, they seem to be in charge of the whole economy, in essence they are trying to run up stocks, and keep yields low, in an effort to pump-prime the economy. They can buy/sell bonds, stocks, commodities, forex, derivatives, push and pull things any which way they want using AG's money flow and the analyst media flow. They are creating this rally IMHO. They are the big pockets and they pick pockets. Today they upgraded and pumped CSCO. Broke it out of a bottom. Its an all out effort.

However, Wall Street is a money making operation, right now, they want stocks higher to save their own jobs and help the economy. When the volume drys up here, on the higher prices, as it surely will, they'll not be willing to take a beating holding inventory. They'll unload. I think that day is coming soon, just as soon as its clear, the process of pump priming isn't working.

[mlsoft]

".... the Fed buys no stocks and no bonds other than T-bills. If it did, it is required by law to disclose promptly such actions, just like it publishes promptly its trades in Treasury bills."
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KyrosL...

You are incorrect. First, your statement that the Fed does not buy other than T-Bills is not only historically incorrect, but Greenspan (and Bernanke) has promised that if necessary they will do so again to prevent deflation. A number of years ago, buying longer bonds was Fed policy, according to AG's own recent testimony.

My personal opinion is that you are equally incorrect about the Fed buying equities, and I am completely convinced that using direct or indirect means, they have bought both equities and futures many times in the past, especially in the aftermath of the LTCM, 09/11 and more recently at the July and October bottoms. I am equally convinced that they have been directly or indirectly intervening in the equities markets on a regular basis since the lows of early March to drive the markets ever higher.

One may disagree on how often and how much the Fed/PPT has intervened in the equities markets, but to deny that they do not do so at all is very naive, in my opinion.

mlsoft