Markets jump after Fed banks agree to unlock liquidity

Posted By on November 30, 2011

european-central-bankThe financial markets woke up to a jolt this morning as several central banks including the U.S. Federal Reserve unified to shore up the global financial system. The debt crisis in Europe has continued to put downward stress on world markets and economies; the cheaper U.S. denominated loans available to European banks is expected to make them more liquid. According to Wednesday’s Fed statement, "The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of markets111130credit to households and businesses and so help foster economic activity." (my read … “kick the can down the road” … but I’m hoping it works)

The financial markets opened strong this morning on the news seeing the Dow up over 400 points by mid morning. I suspect a significant portion of the jump may have been short covering, since the mood has been relatively sour as the U.S. economy doesn’t exhibit growth or many signs that confidence has returned. Optimistically though, even with our problems here in this country, we are much better off than entitlement burdened Europeans or countries believing nationally controlled industries can compete with the efficiently and innovation inspired by free markets and capitalism.

Comments

  • Doro Geek

    Each time you post on the stock market it seems like it is either up like crazy or down like crazy. Is it really as rocky as you report it???

    • Sorry you had trouble posting a comment Doro … I know the Disqus commenting system has a few haters. 🙂

      As for “my reporting” … well I agree the extremes are frightening for the average financial market watcher. About the only thing to draw solace on is that if you are longer term investor then the “crazy” ups and downs aren’t going to impact you as significantly. That’s not to say that you are “secure” in whatever investment you’re saving in … just that the volatility isn’t going to have direct impact on your long-term plan. Now the health of the economy and responsible governance of the country (world) … that’s the bigger problem. Who knows “if” and “when” there is going to be a solution. Some are optimistic … others expect a total collapse and are taking steps to be as self-sufficient as they can. I’d like to believe we’ll prevent the latter, but making the belt tightening choices are not popular … just look at Greece. Thanks for commenting.

Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.