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Stocks rocketed up Wednesday after the Federal Reserve said it was joining other major central banks in injecting more money into the global financial system.
Approaching 1:30 p.m. Eastern, the Dow Jones Industrial Average was up 3.44 percent, the S&P 500 rose 3.35 percent, and the Nasdaq was up 3.31 percent.
The move by the central banks of Europe, the U.S., Britain, Canada, Japan and Switzerland is intended to keep credit freely available around the world. Lending has tightened as the eurozone’s financial crisis has dragged on.
"The central banks of the world have resolved that there will not be a liquidity shortage," said David Kotok, chairman and chief investment officer of Cumberland Advisors, told the Associated Press. "And they have learned their lessons from 2008. They don't want to take small steps and do anything incrementally, but make a big bold move that is credible."
Borrowing rates for European nations have skyrocketed on concerns that the European debt crisis has engulfed nations such as Italy which are too big to bail out. Borrowing rates for Italy, Spain and others have soared.
Banks need dollars to fund their daily operations. Their access has dried up as U.S. money markets have reduced their lending to European banks.
However, the New York Times reported, the move by the central banks underscored the depth of the problem.
“The markets are breathing a sigh of relief,” said Stanley A. Nabi, chief strategist for the Silvercrest Asset Management Group.
But the coordinated action also signaled that the problem had reached a crisis point, he said, and that the central banks recognized there was a “lot of danger” in letting the current situation continue.
Investors appeared to shrug off, for now, news that Standard & Poor's Ratings Services lowered its credit ratings for many of the world's largest financial institutions on Tuesday, including the biggest banks in the U.S.
Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.
CNBC's Steve Liesman discusses the world's central banks moves.
Related: Today’s market movers
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"Banks need dollars to fund their daily operations"
What did they do with the 7 trillion dollars we lent them? Did they give it all away in bonuses?
Here HE goes again!!
Obumo giving more of OTHER peoples money away!!!
They sure did Mickey, id bet on it!!and believe it was acutally 16 trillion that we leant the banks thru the Federal reserve..The other 8 trillion has somehow "gone missing" just see "where did all the money go" on you tube! This has been well orchestrated by the corrupted Federal Reserve and central banking cartel who have bought out all politicians at all levels at has been running this casino (stockmarket) and betting at will with your taxmoney, and hey if they lose there bet they just run to the Feds and ask for bailouts, people really need to WAKE THE @!$%# UP and stop listening to mainstream media who are also bought by the central banking cartel. The only losers here are the taxpayers who get a double whammy...if u will... higher inflation caused by massive printing of the dollar and devaluation of the U.S. dollar consistently...DID YOU KNOW SINCE 1971 THE US DOLLAR HAS LOST APPROX 92% OF ITS VALUE!!! dont believe me...just google it!! WAKE UP AMERICA!!!!!
"The devious planners of the revised bill titled "The Federal Reserve Act" to mask its real nature. It will create a system controlled by private international bankers who will control the nations money supply. Furthermore, the Federal Reserve Board, composed of 12 districts and one chairman, will in fact control the nations financial resources and available credit, all by mortgaging the federal government through borrowing."
-Frank Vanderlip, President of Kuhn Loebs National City Bank of New York
Hmmmmm,
The DOW is up over 400 points.
Amazing, isn't it, that thousands of "investors" knew to buy all at once in the first 20-30 minutes of trading and then volume fell off and the market has flat-lined the rest of the day. Odd that no pullback has happened either on a wild swing of 400+ points.
Methinks the day-traders are having a field day with this. Or, maybe all that money the U.S., Canada and Japan are pouring into the banks just happened to end up on Wall Street rather than be available to be lent out.
Nah, the banks with the support of government free money would never do anything like that.
Would they?
P.S. I wonder if any of our "honest" politicians were privy to any "insider information" prior to this jump and loaded up their portfolios yeasterday?
"money pumped into the banks to ease lending"
Im not certain enitirely how this works, but am i right in my thought process that this is FREE MONEY?
meaning, the banks are not required to pay this money back...so it's essentially free money to them?
They are given this money with the intent to LEND, meaning...they'll MAKE MONEY on the interest charged...and that interest does not go to anyone but the bank who was leant the money, correct?
Would be nice if they'd give that money indirectly to the banks in the form of debt forgiveness.
Forgive peoples debt owed, requiring them to PAY OFF THEIR DEBT - so that money goes to the banks. With that money, the banks can then LEND IT BACK OUT.
And it will be good in a 2fold kind of way - it will free people up to use their income in the economy, and it will give banks payback on money they previously leant, giving them money to lend back out again.
Anyone who had debt forgiveness should be banned from borrowing for 10 years.
I realize they wouldnt do this, because it helps people - not the banks only.
And investors never would have scrambled to buy up bank stocks if that had happened.
Pretty obvious what's happening here folks...they want YOU to mire yourself in debt to help the ailing economy, but heaven forbid the 1% actually pitch in. Nope, just always looking to cash out on our pain.
Unreal! These guys make so much money, they gamble with these high speed computers trading everything from Oil to manure and somehow we owe them something. The fix is on and always has been. We are not Capitalism, we are Cronyism...
You've just pointed out why a tax on financial transactions is sorely needed. With computerized trades being made every millisecond, such a tax might solve the deficit problem while bringing some sanity back to the "free" market.
kevinoffsite,
"These guys make so much money, they gamble with these high speed computers trading everything from Oil to manure and somehow we owe them something."
These banks are worse than the government when it comes to gobbling up money and then asking for more.
We the people have the power to enact instant change,,, If we all were to pull our money out of the banks and just hang on to it for a short time, the entire fraudulent fractional reserve system would collapse,,, there is apprx. 2 trillion in real "currency" in the US,,, but there is hundreds of trillions of imaginary currency, supported by fractional reserve practices, on their books,,, just this small move by the people could set things straight,,, what would you have to lose by holding your cash for a while??? a percent or two of interest that doesn't come close to the current inflation???
Dougs -
3 words - Fractional Reserve Banking. Your money isn't there for withdrawal
Somewhere less than 10% of the total money is available at any one time.
Excellent idea. But will people do it? I doubt it.
Thank you Brian. I am astounded by the lack of knowledge about banking on this board.
If I only had money to withdraw!
Great Point Doug!! Unfortunately people are too foolish and believe whatever they see on TV. People need to get off there effing Iphones and actually do some research!!
Dougs Decks
Pffftttt, we can't even get most people to move their money from the "Too Big To Fail" banks (which by the way were all just downgraded yesterday,,,,coincidence that all this money is being infused so their atrocious investments in Europe are covered?) to smaller Community banks or Credit Unions.
The American populace isn't informed enough to make this dramatic of a move.
So, the market goes up 400 points in one day. It will probably go down by 500 in a few days if Angela Merkel wakes up with a bad cold. For people with a 401K, it might be a less risky bet than the stock market if they go to Vegas and let everything ride on Red #3 on the roulette wheel at Caesar's Palace.
Someone was actually trying to argue with me other day about the market being rational.
Don't watch the market if if makes you dizzy. If you like volatility there is a lot of room for trading.
This is getting insane. And the people "playing" the stock market in hopes of getting rich are quickly bringing our financial systems to a stand still. I propose going back to the Barter system. If you have a skill, labor or IT related, improve on it and barter with your neighbor to trade some other good or service. It is ridiculous to loan more money to the Banks so they can then go and extend credit to Consumers who they will inevitably DENY credit to because these people are unemployed or under-employed and do not have the assets to qualify for a loan in the first place.
This completely makes no common sense. Injecting money into a failed system only delays the inevitable and does not allow for correction. So the fall will eventually be harder. We are paying three times the amount for goods and services our grand parents paid and living much worse. CEOs are demanding multi-million dollar salaries and bonus packages as if they are holding entire Companies for ransom while they lay off employees to meet their lofty compensation package benefits. This World is Completely screwed right now economically, in the same manner that ruined the other great civilizations on this Planet, Rome, Alexandria, Egypt, Babylonia, the Ming Dynasty, etc... The list goes on and on. Corruption, greed, ignorance, and War all destroyed these. It seems that as humans, we all suffer from the "Homer Simpson" Syndrome - Stick your hand in boiling water, get burned, then repeat!!!
Ya got yer HAVES....and...yer BEEN HAD'S !!
"The move by the central banks of Europe, the U.S., Britain, Canada, Japan and Switzerland is intended to keep credit freely available around the world."
Have we ever seen cooperation among banks like this before?
Thank You President Obama.
It's what rushbo, mr grover, & the gop will never tell you. The economy is back bigtime. And if apple was in the dow, the dow would be even 1,000 pts higher. But mr grover & the gop still continue to throw sand & wrenches into the gears of the economy for political purposes only.
Just keep voting for the lesser of two evils and see how far that gets ya. Dems and Repubs are just two sides of the same New World Order puppets owned by the Fed. I for one will vote for Liberty and Economic Freedom! I will vote to End The Corrupt Federal Reserve System! I'll have some Ron Paul please!
This story also represents media manipulation and efforts to minimize public reaction.
Publish 3 or 4 stories in one day on the same topic, thus dropping the main story further down the line. This minimizes 1) comments and dialogue on the first story and 2) keeps the main story from staying at the forefront of news by the mere fact comments have been limited. Brilliant !!!
just a deck of cards waiting to fall and we all know it (or at least some of us scence it comeing) super computers trading at milisecond speed, driving the price up on almost everything. devalueing of the dollar,wallstreet more crooked then vegas, government looking the other way,polititions corupted to the core..... some of you see it and want people to wake up, they will, but it will not be till "AFTER WARDS."
its like Ridick says (chronicals of Ridick)....its all just cyrcling the drain....it was bound to happen sometime.
Oh great the FED had another movement. Can't wait till this one hits the fan.