Fed manipulation [Archive] - Divine Cosmos Discussions

David Wilcock

01-04-2001, 09:10 AM

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>i don't know if any of you watched the markets yesterday but it was one of the most highly unusual things ever. no doubt a last-ditch effort of sorts. this article says it nicely.
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<center>uncle al causes stocks to
crash up - final fed flush?
from brasscheck <ken@brasscheck.com></center>
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<center>1-4-00

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<dt>what would you wish for if you held a ton of stock and the prices crashed before you could sell it? <dt> <dt>one more big bounce to unload it, right? <dt> <dt>of course, no one has that kind of power. or do they? <dt> <dt>did you know that "the fed" is *privately* owned. it's true. look it up. after all, who did they ask for permission to lower rates today? congress? the president? they don't ask because they don't have to ask. <dt> <dt>and how do we complain if we don't like what they're doing? it's only our money supply after all! <dt> <dt>so, why the out-of-left-field rate cut today? it's simple. the markets have fallen faster than the fed's owners could liquidate their positions. <dt> <dt>solution: a wild rate cut. reaction: a huge run up in prices which means tons of goofy buyers flooding back into the market to buy trash that as recently as yesterday stunk to the high heavens. <dt> <dt>the end of this spectacular house of cards may finally be at hand. they're running out of magic tricks. what a pot boiler! <dt> <dt>good review of today's fed scam: <dt> <dt> <dt>uncle al panics and causes a crashup <dt> <dt>by lance lewis http://www.prudentbear.com/bearthoughts.htm 1-4-00 <dt> <dt>asia was lower last night as hong kong lost 2 percent (japan remained closed.) europe was down about a percent ahead of our open. the futures were a little lower pre-open. we gapped up at the open and then reversed and took out the lows of the day but held the lows from yesterday as we hung on the edge of a crash. we slowly drifted back up to the morning's highs when suddenly boom, uncle al panicked and cut rates by a half point and we were off to see the wizard. an atom bomb of buying went off as everybody's derivative book was flipped to the buy side all at once in a virtual crash-up. the ndx futures launched 400 points quicker than you could say: "holy drunken rate cuts." the spoos exploded more than 60 points. after the initial euphoria and short covering panic, we fell back somewhat, but the bulls would have none of that and pushed us back near the highs of the day for the close. for the day, the spx rose 5 percent, and the ndx rose 18 percent. it was an epic day for drunken twister. volume was enormous (1.9 bil on the nyse and 3.1 bil on the naz.) breadth was 3 to 1 positive on both casinos. if we had truly put in a bottom as the bulls all believe, i think we would have seen 5 to 1 breadth off the low. big winners were everywhere, but trash (ie- internet stocks) did the best as the inx rose 21 percent. big losers were in the drugs and utilities as the uty fell 6 percent and the drg fell 4 percent. <dt> <dt>nothing before the fed's rate cut really matters so there's no point in discussing the early ugliness although there was plenty of it. after the cut, there was a meltup. there, now you know everything you need to know about today. i'm going to alter the usual format today and just head straight to the post-cut reaction of the general market. obviously, stocks soared except for fnm and fre, utility, drug, consumer, gold, oil and oil service shares. basically, they were selling everything they had been chasing while tech was crashing over the last several months. the buying was concentrated where shorts were most likely to be found such as internet, semiconductor, and pc shares. other than the gses, financials all rallied sharply. ge rose 9 percent back to its lows of last friday after flirting with the negative column today early on. recall that it almost collapsed yesterday when the market was on the ropes. every time the s&p gets down around 1300 cash or so, we are in danger of a sudden crash, in my opinion (hence, i have called for crash helmets to be worn.) it's no coincidence that the two times we have visited that level ( yesterday, and wed of two weeks ago after the fed meeting) that the fed has moved aggressively to halt the panic. first, it was the conference call and rumor of al cutting that was passed around. then, today we got the real deal. but, rate cuts are not a panacea. rate cuts will not make all the bad debts of bankrupt internet and telecom companies good. rate cuts will not bring back the millions of brokerage accounts that have declined 50 to 100 percent over the last year as the stock bubble collapsed. the only thing accomplished here today was a short-term change in psychology that could be very short term indeed. this was clearly a panic move on the part of uncle al, and there are already nervous rumblings among market participants that it was just that. so, this is not just me saying this. <dt> <dt>over in the commodity and currency markets, oil rose 80 cents and closed just off the high. gold traded down but rallied off the lows to close down only 70 cents. the crb gapped down at the open but rallied on the rate cut to close right at its high, although still slightly down on the day. so far, the response to the rate cut is not positive at all in commodity-land as it appears to have only encouraged higher prices, but admittedly it's still early. the dollar, however, reacted favorably. the us dollar index rose more than percent, as it appears for today that the bubble has been magically reinflated. the euro collapsed back to just under 93 cents. the ecb meets tomorrow morning, and the consensus is that they will do nothing. after today's craziness over here, they might just be encouraged to raise rates in an attempt to turn the euro higher again. treasuries were dumped with the fed now easing aggressively. the yield on the 10yr rose back above 5% to 5.16%. <dt> <dt>uncle al and his merry men finally hit the panic button today. i'm not going to waste time discussing how reckless today's action is. that's for the history books to note. the only question is now: what happens if we sell off again and break to new lows in stocks? (as i believe we will.) i think you'll see a major panic, and it could come very soon. each rally we have had in the downtrend since the september top has rolled over progressively faster and faster only to break to new lows each time. this latest one that began last friday really only gave you friday to get on board before major damage was done on tuesday. if that progression continues, the next turn down, once this rally ends, could occur breathtakingly fast. and, with the fed now having fired their bullet, the move down could be extremely large. despite today's last ditch effort by the fed and the ensuing rally, i believe that crash helmets should remain on
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