Stocks in U.S. Rise Most in 5 Years on Federal Reserve's Liquidity Plans

Source: Bloomberg News

March 11 (Bloomberg) -- U.S. stocks rallied the most in five years after the Federal Reserve said it will pump $200 billion into the financial system to shore up banks battered by mortgage-related losses.

Citigroup Inc., Bank of America Corp. and Fannie Mae led the Standard & Poor's 500 Financials Index to its biggest gain in eight years on expectations the Fed's move will spur lending. Washington Mutual Inc. climbed the most since 2000 on speculation the largest savings and loan will get a cash infusion from an outside investor. All 10 industry groups in the S&P 500 rose except for health-care companies, which tumbled after WellPoint Inc. cut its earnings forecast.

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``It's like they're putting jumper cables onto a battery to kick-start the credit market,'' said Nick Raich, who helps manage $34 billion at National City Private Client Group in Cleveland. ``They're doing their best to try to restore confidence.''

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The Fed said it plans to lend Treasuries in exchange for mortgage-backed securities and other debt that has plunged in value as homeowners defaulted on their payments. Banks around the world have posted $188 billion in writedowns and credit losses stemming from the collapse of the subprime-mortgage market. The S&P 500 Financials Index had lost 20 percent this year through yesterday.



Read more: http://www.bloomberg.com/news/index.html?Intro=intro_news

To think, it only cost $200 billion of your money for the regime to buy one day of favorable headlines.

And their swashbuckling way...

I love it when Socialism works for the super wealthy...

But damn those people who beg for money out on the streets because they just happen to be down on their luck...

It's sickening...

Tandalayo_Scheisskopf said exactly what I said in a post below.

more $$ in circulation - making every dollar you have in your pocket worth even less

But that's only good for a short trip, because when all is said and done, the battery is still dead, and you can only jump start it so many times before there's nothing left to jump start it with.

but hey, investors are happy, and that's all that matters.

"The Fed said it plans to lend Treasuries in exchange for mortgage-backed securities and other debt".
My question is ... Is the Federal Reserve System buying people's motgages?

The Fed is "lending" the banks money. The banks give securities (stocks)that are backed by worthless mortgages. Eventually it will probably lead to a taxpayer bailout to prevent failing banks.

Every time the Free Market gets in trouble it feels FREE to ask the taxpayers for help.

Remember:

Privatize the profit.

Socialize the risk.

I'll be happy when the other 75% comes back.

decreases in the last three months. This morning all sorts of business articles are touting this one-day increase as a sign that the "bottom has been hit" and "things are turning up". Er... premature: "Happy Days are Here Again" choruses ringing by business journos as the rest of us still have to gas up at record costs, pay greater and greater shares of our income to basic cost of living expenses, etc.

...how much more will this devalue the dollar?

Oh yeah, it disappeared two years ago.





M3: The broadest measure of money; it is used by economists to estimate the entire supply of money within an economy.
http://en.wikipedia.org/wiki/Money_supply




But the bush gang stopped reporting it two years ago. Now there is no way to know how fast the printing press is running.

The rate of increase sure has been skyrocketing since they stopped reporting it.

Lot's of that "keystroke money" as another poster pointed out.

How much money was made by Wall Street insiders who knew the Fed was going to make this move, and did a little insider trading after hours last night???

The American People are getting ripped off so fucking bad without even know it... We need a President who is not tied to corporations...

Vote for Barack Obama.

Borrowed? Deal? what did we give up or sell for this?

google "fiat money" and "federal reserve bank"

they know there is no saving the economy.

this is the signal to the big money, "get out, NOW."

which they will do, and then step back and let it go into freefall.

in the scheme of things 200 billion is pocket change, but it will cause enough little guys to jump back in, so the big guys can bail, keeping as much as possible.

but then i am not an expert on ponzi scams.

:shrug:

nothing more. Like everything else over the past 14 years, politics trumps the good of the nation.

And leave us with a far less valuable currency.

These wild daily swings indicate an unstable system to my engineering mind.

Nice trade. Dump it all on the taxpayer. Sickening.

Which is going to cause the dollar to drop more AND will pour fuel on more inflation.


:grr:


And yes, the taxpayer will be paying on this as far as can be seen into the future.