Posted on 12/12/2007 9:56:31 AM PST by Ernest_at_the_Beach
The Fed is coordinating its actions, designed to add $40 billion in liquidity, with the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank. See full story.
Up 271 points early on, the Dow Jones Industrial Average more recently gained 146 points, or 1.1%, to 13,578.8, with 22 of its 30 components trading higher, led by AT&T Inc.up 5.9%.
(Excerpt) Read more at marketwatch.com ...
They have surged back down since. They are still up, but not by too much.
Fed, top central banks move to ease market stress
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WASHINGTON (MarketWatch) -- The Federal Reserve, as part of a coordinated plan with global central banks, said on Wednesday they were taking steps to inject up to $40 billion in reserves into the money markets to try to ease the credit crunch currently roiling the financial system.
The DOW has been crazy today. Opened way up and peaked about +260, then dropped to +30, now is up +90. Of course it got slaughtered yesterday.
DJII just went negative. I’d have to rummage around a bit but I doubt there has EVER been a gap open of 2+% that was completely erased by the end of the day.
CNBC pundits have been noting all day that the stocks this obvious jam-job was supposed to bail out — the financial sector — is leading the losers today.
Just heard that this was the biggest stock market “intervention” (i.e. bailout) since September 11.
DJII is now down 50 after being up 300. Gonna be some real trouble tomorrow if it closes negative.
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Kevin Depew's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:
1. Fed Treating Quarters Like Manhole Covers!
Man, sometimes the Fed treats a quarter like pocket lint, sometime like a manhole cover. The consensus last night was Bernanke's quarter point cuts in the Fed Funds and Discount rates fell squarely in the manhole cover department. Cheapskate! Now, however, we know there was a method to the Fed's madness. Let's look at what that method is.
2. Global Coordinated Liquidity Injection? What Does That Mean?
In Five Things yesterday we looked at the importance of the Fed's move with the Discount rate. While pundits yesterday afternoon decried the "paltry" 25 basis point Fed Funds rate cute, the markets were busy focusing on more important matters; namely, the paltry 25 basis point cut in the Fed's Discount rate.
It bears repeating that this is not a stock market problem unless you are a financial stock. But hey, there are literally thousands of stocks out there that are not financial stocks. No, this is a credit market problem. Consequently, the perceived disappointment yesterday was the refusal by the Fed to make the Discount window more attractive. Now we know why they chose that course of action: Global Coordinated Liquidity Injection.
On top of that, the Fed has up and changed the rules again! I’ll tell ya, between the coordinated agendas, discount window collateral changes, invisible hands, superfund conduits, sub-prime bailout plans and now, the biggest act of international economic cooperation since the 9/11 terrorist attacks, you can’t help but wonder what the heck it sees that the markets, 5% off their highs, have yet to price in?
LINK http://www.minyanville.com/articles/WMT-C-bac-ba-fre-fnm/index/a/15188
A great observation. They see everything the rest of us see: today's monthly installment of the "volatile food and energy prices" lie, inevitable mass foreclosures nationwide, inevitable rising prices of many imported goods, etc.
They're trying to stop a supertanker from crashing and they know they need a lot of time to do it. They also fear that they might already be too late.
Paulson in particular is wondering if his term at the helm at Morgan Stanley is going to come back to haunt him once they get serious about going after the brokerages that wrote crap CDO bonds.
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