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FED moves quickly to aid business

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Mortgage and Lending with Liberty One Lending

The Federal Reserve announced a radical plan in a dramatic effort to break through a credit clog that is imperiling the economy.

The Federal Reserve, invoking Depression-era emergency powers, will buy commercial paper, a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls.

This market has virtually dried up as investors have become too jittery to buy paper for longer than overnight or a couple days.

That has made it increasingly difficult and expensive for companies to raise money to fund their operations.

The unstable situation has left many companies vulnerable.

The Fed's action initially helped lift investors' spirits, although concerns about the economy dampened their enthusiasm.

The Dow Jones industrials rose 45 points in morning trading, a day after a huge selloff put the Dow below 10,000 for the first time in four years

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