Fed Opens the Vault

Make it 3 for 3. Yesterday I said the Fed might come out with an emergency cut after the stock market dropped below the previous low. Well they didn’t do exactly that but they pulled out something else. They are going to open their vault and let banks borrow against the mortgage backed bonds they own. The banks have plenty of those but their values keep falling. This move is going to stabilize the market for a while until the market becomes desperate again. The Dow shot up 400 points! We shall see if it really works.

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Comments

  1. [email protected] says

    Interest rates drop, the money supply grows causing the dollar to crash. Oil prices go through the roof and stock prices drop.

    The Fed seems to have some goal; unfortunatly helping the US economy doesn’t seem to be it.

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