Reply #98: Fed Offers $200 Billion to Prop Up Lenders; Wall Street Responds With Biggest Rally of 2008

[UpInArms]

well, it looks like those banks and investment houses will not suffer - it surely is a shame that this is being shoved up the asses of every taxpayer in this country - and I can't tell you how much I hate this crooked and corrupt mal-administration and its henchmen and cronies.

:explodinghead:

http://biz.yahoo.com/ap/080311/fed_credit_crisis.html?.v=21

WASHINGTON (AP) -- Staring at spreading financial dangers, the Federal Reserve announced a rescue package that would pour as much as $200 billion into banks and investment houses and allow them to put up risky home-loan packages as collateral.

Wall Street rebounded on the news Tuesday with its biggest rally of the year -- and hoped the Fed had even more cards to play.

The Federal Reserve's maneuver, coordinated with central banks overseas, was its latest effort to stem the global credit crisis and severe housing woes that threaten to bury the United States in its first recession since 2001. Fed Chairman Ben Bernanke and his colleagues have been stretching for new and imaginative ways to confront the situation.

They are hoping to bring relief where it is sorely needed: in the market for mortgage securities. Home loan financing has become much harder to get as nervous lenders have hunkered down.

"It is a highly significant move. The Fed is innovating in a way that is going to push liquidity directly into the mortgage markets, where it is most needed," said David Jones, president of DJM Advisors.

On Wall Street, the Fed's action propelled stocks upward. The Dow Jones industrials jumped by some 416 points.

Traders will be looking for still more action. Recent stock rallies have been followed by renewed selloffs by investors who believe the economy is still headed for recession, if it isn't there already.

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