| Stocks surge after Fed's new move | |
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| Mar 12, 2008 04:44 |   |
| guest9941 | Source: FT. Stocks surged and bonds fell in early trading yesterday after the Federal Reserve took its most radical step yet to reverse liquidity strains in financial markets, backed up by smaller moves from other central banks. In its second big intervention since Friday, the US central bank announced that it would lend primary dealers in the bond market up to $200bn in Treasury securities for a month at a time and accept ordinary AAA-rated mortgage-backed securities as collateral in return.The latest Fed move is designed to ease liquidity strains in financial markets by allowing primary dealers to swap their mortgage-backed securities for Treasuries, which they can in turn use to raise cash. option of buying mortgage-backed securities in its oAnalysts said it took the US central bank a step closer to the nuclear options of buying mortgage-backed securities in its own , although it stopped clearly short of such an extreme move. Why did the stock market react so actively? Is it useful? |
| Mar 12, 2008 12:43 | #1 |
 | To me it's a sign that the stock market is in a world of "hurt" and is looking for anything and I mean anything to help boost an upward surge.Some individuals who are nearing or in retirement have their pensions tied to the stock market thru mutual funds and have no choice but to ride this thing out. Good Luck!! |
| Mar 12, 2008 14:03 | #2 |
| it doesn’t matter coz registered pension can be rolled over to LIF, LRIF and RRIF (NON TAX) and the funds still in retirement income funds growing. However, don’t roll it over to Life annuity coz funds in there just earns prescribed fixed int. income (this year’s int. rate is low). |
| Mar 12, 2008 14:15 | #3 |
| O.K. Marrie**** I still say that you are a financial analyst or an economists now what is it? |
| Mar 17, 2008 22:30 | #4 |
| Gary, you are right. At present, US is trying anything that can boost its economy. "it doesn’t matter coz registered pension can be rolled over to LIF, LRIF and RRIF (NON TAX) and the funds still in retirement income funds growing. However, don’t roll it over to Life annuity coz funds in there just earns prescribed fixed int. income (this year’s int. rate is low). " Marrie, I agree with Gary that you are a financial analyst. BTW, what do LIF, LRIF and RRIF mean? |
| Mar 18, 2008 03:45 | #5 |
| I thought the US stock market was going to crater yesterday (Monday) because of the overseas stock market turmoil but another rumor of a 1/4 percent drop in the interest rate here created a + result. And speaking of rumors, AAA rated mortgages may not be as secure as thought. |
| Mar 18, 2008 11:29 | #6 |
| It’s a drastic change that the safest mortgage baked securities are down graded to the most risky ones. Creditors are going after those investment firms who forgot the rule of thumb of diversification in mkt game. The better way for them to survive or catch a breath is being taken over other then seeking bankruptcy protection coz you never know what’s gonna happen next in dynamic mkt game. In addition to Cutting off rate further by ¼, what’s the next step of Fed gov. to push economic activities move forward. |
| Mar 18, 2008 12:08 | #7 |
| Hard to say, the price for a barrel of oil is a favorite, (price goes up and stock market declines and vise-verse) that can be played with forever and ever. The Federal Reserve has just about run out of room for lowering the interest rates. The CPI(consumer price index) and labor market statistics can influence the stock market, but to my knowledge they are once a month statistics. And of course there is always the merger and aquisition game that is always being played. To be honest, the only government statistic I can believe anymore is the GAO(general accounting office) and they may be questionable by now. |
| Mar 18, 2008 22:28 | #8 |
| According to the news, the Fed might cut the interest again by 75 points to boost US economy. I wonder if the Fed has any other ways to push US economy because the interest cuts measure is not very effective. "To be honest, the only government statistic I can believe anymore is the GAO(general accounting office) and they may be questionable by now." Gary, any statistic is just for reference. |
| Mar 18, 2008 22:59 | #9 |
| market players start to trade or wind up bets based on financial reports which is the objective track of detailed business performance. |
| Mar 18, 2008 23:50 | #10 |
| Financial reports of US corps. were suppose to become more accurate(?) and transparent thru the Sarbanes-Oxley Act passed appx. 2002 after the Enron debacle. Whether that has improved financial reporting, I cannot say, and offshore domicile of (US)corporations definitely adds to the question of financial largess. It is my understanding that overseas(foreign) corporations are even less transparent with their financials (i.e. the guide lines are not as strict). |
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