Stocks soar as US Fed, and some other central banks act - to take bad loans off the banks' books - "A desperate move to worsen turmoil"
Stocks rebounded sharply Tuesday after the Federal Reserve and other central banks said they will pump billions into the financial markets to help ease strain from the credit crisis. The Dow Jones industrial average was up more than 150 points in afternoon trading after initially surge more than 250. The program is part of a worldwide effort to help struggling banks and mortgage providers. The Fed — acting in concert with the European Central Bank, the Bank of Canada and the Swiss National Bank — agreed to loan banks ultra-safe Treasury securities in exchange for debt that includes slumping mortgage-backed securities.
"The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table," said Peter Dunay, chief investment strategist at Meridian Equity Partners. "The Fed is basically going to take the bad loans off the banks' books, and the market seems to be loving that idea." Note EU-Digest: the above seems to indicate a great amount of desperation and panic by the worlds secretive financial community, who now seem to be helping their own before the walls come tumbling down?.
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