The "reflation levitation" discussed in recent issues of The Elliott Wave Theorist and Financial Forecast (and shown in the all-the-same-markets chart in the additional references section yesterday) is a mutli-market, liquidity-driven rise that echoes the mania for stocks in late 1990s and early 2000. The moratorium on withdrawals at Refco is precisely what Conquer the Crash envisioned when it placed such an emphasis on "safety, solvency and liquidity" and said, "You must plan ahead and pay attention." CTC also noted it's not enough to pick a good money manager who is willing to short stocks: "Make sure that you satisfy yourself that the money manager you choose deals with safe banks." Four days ago, Refco was as upright as any other financial dealer. Unlike Barings Bank and LTCM, which were solo flame-outs in 1995 and 1998, respectively, this time around Refco won't be the only big financial intermediary to seize up. |
