Market Overview (Yahoo Finance)
In afternoon trading, all three indexes are in the green with the Dow Jones industrials average adding a solid 144 points, the NASDA composite index moving up close to 25 points, and the S&P 500 adding 17 points.
Although the indexes are off their best performance for the day, they’re still doing mighty well with buying pretty much in progress across the board – except for Treasuries that is.
With President Bush putting the arm around and homeowners under foreclosure (hundreds of thousands of them), buyers have gone back to equities for the moment.
The President’s plan includes using the government loans to back up delinquent homeowners with sub-prime loans. Under the assisted plan, those who have defaulted on their mortgages, can find more favorable rates from the government rather than the “teaser rates,” or ARMs – the adjusted-rate-mortgages (The Wall Street Journal).
According to what the President and all his men are saying an additional 80,000 would receive federally insured mortgages. But that’s only a drop in the bucket, right?
At any rate, the timing is what really makes it worthwhile (Major Policy Shift – or Politics as Usual?)
• Immediately diverts attention from Fed Chair Ben Bernanke’s speech; • Comes right before a 3 day weekend• Is on the last day of the month;• Is on the last day of the fiscal year many financial firms.
And with brother Ben giving some additional support to the President’s words, it looks that investors have had the fear knocked out of them, temporarily at least. We’ll know for sure when we come back from the weekend.
Bernanke says he’s ready to utilize all his firepower to do what it takes to ease the strain on markets. What does that mean?
It means that he’s pondering either increasing the “discount window” rate which the Fed pulled down a half percent already or that he will use other tools (perhaps the fed funds rate) in his pocket to fix things in the “creditoria.”
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