Monday, March 21, 2011

Paul Tudor Jones: The Market Is Like 1999

"Our current situation is highly reminiscent of 1999, when the fear of a Y2K computer meltdown led central banks to deliver global liquidity pulses in an effort to cushion any possible negative fallout from the failure of systems and the Internet. Once again, policy leaders symptomatically attacked a structural deficiency. Most of that excess liquidity ended up in a very narrow list of approximately 100 NASDAQ stocks, as $20B a month poured into margin accounts to purchase technology stocks.  Between October 1999 and March 2000, the NASDAQ nearly doubled.

With the Federal Reserve Board about the embark upon a LSAP program of over $1 trillion dollars, it is certainly important to understand exactly where much of this liquidity will roost. And the similarities between 1999 and today bear heeding."

Paul Tudor Jones

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