KSengineer

Key Factors Driving the Market

Can someone explain this "sideline" money to me. Every time a stock is sold, an equal amount of money is exchanged. For every dollar going to the sidelines via a sale, a dollar must come from the sideline via a purchase.

I can understand money flowing from bonds to stocks, or cash being added to workers 401k's each month or companies purchasing their own stock.

What am I missing? What is meant by "sideline" money?

On Jul 23 09:08 AM Roger Knights wrote:

> Don't forget money on the sidelines as a driver.

Wall Street Breakfast: Must-Know News

"Bernanke suggests need for new regulatory approach"

II have a sneaky suspicion that if Fanny and Freddie would have held their standards at the expected level all along, our current problems would be much smaller and confined to the private sector where the risk/reward equation could be working it’s magic without bringing the entire system down.

What I mean is if Fanny and Freddie would not have purchased those innovative investments, like CDO’s, which contained non-conforming loans and would have limited themselves to purchasing investment paper that conformed to the same risk level as CONFORMING loans are supposed to represent, my guess is this contagion would have been greatly limited. But they set the tone by purchasing high risk investments.

So, it seems to me we already have the regulations in place. What we don’t have is the discipline to live by them. The government set the bad example and now they want to regulate more. Someone needs to bring some sanity to the system. Unfortunately, I don’t’ have much hope that will ever happen since greed and self-interest is carrying the day in the USA.