Today's news that every major worldwide stock exchange index is UP as a result of the news that the Federal Reserve, in conjunction with the European Central Bank, the Bank of Canada and the Swiss National Bank, has agreed to loan banks money in exchange for debt that includes slumping mortgage-backed securities.
Meridian Equity Partners' chief investment strategist, Peter Dunay, said, "The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table. The Fed is basically going to take the bad loans off the banks' books, and the market seems to be loving that idea."
With healthier loan portfolios, bank will be able to free up money for capital investment, which could spur our economy and avoid continued interest rates cuts that have seemed to have had little positive impact so far.
Today's move by the Fed could stabilize interest rates and home buyers may choose to BUY rather than sitting on the sidelines waiting for rates to drop even further.
For more on today's news, click on http://news.yahoo.com/s/ap/20080311/ap_on_bi_st_ma_re/wall_street
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