"MEGA-liquidity!"

by Larry Levin


It looks like our friends across the pond have taken EZ-Credit-Al's playbook and are following it to a "T": when in doubt, add liquidity. What else needs to be done, they wonder? What else can be done? After all, you can lead a horse to water, but you can't make him borrow and lend.

The European Central Bank said in a statement that it offered unlimited funds for two-week funding at or above 4.21%. When the dust settled, the ECB had allotted $1/2-TRILLION to its regional banks. And remember folks, this is after the coordinated action announced by five central banks last week to ease the global credit crunch. Some have said the move appears aimed at satisfying any funding gaps as banks close their books for the year.

Mervyn King of the BOE was recently quoted as saying, "A key lesson that central banks around the world have taken from the recent turmoil is that, in stressed conditions, any bank that is seen to come to the central bank to borrow, whether in regular standing facilities against very high-quality collateral or against wider collateral in a discount window or support operation, can become 'stigmatized' in the market." Again, you can lead that horse to the bank, but you can't make him lend.

In other news, the housing market is still in a free fall. Starts of single-family homes fell 5.4% to a seasonally adjusted annual rate of 829,000, the lowest figure since April 1991. Building permits for single-family homes fell 5.6% to 764,000, also the lowest in 16 years.

Real Time Trading Signals*for

Trade Date: 12/18/07

E-Mini S&P Trades*
(before fees and commissions):


8:46 ID VA Buy 65.00 = +.75, +1.50, +.50

9:42 VA Sell 60.25 = +.75, +.75, +.75

9:53 VA Sell 60.25 = +.75, -1.50, -1.50

10:21 ID VA Sell 60.25 = +.75, +2.25, +4.25

12:34 VA BUy 60.00 = +.75, +1.00, +1.00

12:46 VA Buy 60.50 = -1.50 all

12:51 VA BUy 60.25 = -1.50 all

2:40 ID VA Buy 70.00 = -1.50 all

E-Mini Russell Trades*
(before fees and commissions):

1) Buy @ 8:58am at 750.1 = +.5 & b/e

2) Buy @ 9:13am at 747.0 = -1.1 & -1.1

3) Sell @ 9:41am at 747.2 = +.5, +1.0, b/e

4) Sell @ 9:59am at 749.2 = +.5 & b/e

5) Buy @ 10:10am at 747.9 = +.5 & -.6

6) Sell @ 10:20am at 747.9 = +.5 & +1.9

7) Sell @ 10:36am at 745.9 = +.5, b/e, +.6

8) Sell @ 11:32am at 741.5 = +1.0 (1 lot)

9) Buy @ 11:59am at 741.8 = -.1 & -.1

10) Buy @ 12:27pm at 747.6 = -1.0 (1 lot)

11) Buy @ 12:42pm at 749.8 = +.8 & +2.0

12) Buy @ 12:52pm at 750.5 = -.8 & -.8

13) Buy @ 1:37pm at 755.7 = -.8 & -.8

14) Buy @ 2:21pm at 756.5 = -1.2 & -1.2

15) Buy @ 2:36pm at 756.6 = +1.9 & +.8

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