The Fed pumped 200 billion into the market today

[spinbaby]

More money around causes inflation, right?

http://biz.yahoo.com/ap/080311/wall_street.html

[0007]

1. Probably all that bad whore money confiscated from the NY Governor.

[0007]

2. junior plans to play Robin Hood and get his popularity back?

[lonestarnot]

3. Is this the new M3?

[magellan]

4. Never mind the bank balance

...I still have checks!

[spanone]

5. and the dow is happy

[sinkingfeeling]

6. This is like the 3rd. attempt to 'calm the market' and makes a total of over $380 million.

[louis c]

26. $380 Billion, with a "B"

I think that's what you meant.

[Javaman]

7. Just think where the market would be if it was allowed to self correct...

this 200 bill is just more shitty smoke and mirrors.

The market, no doubt would be sub 10k about now, but because moron* kept squealing about a "robust" economy for so long, the fed had to dance as fast as they could to keep that bullshit afloat. Now that moron* stated that the economy has "slowed", they let it fall, but then they realized, that it wasn't going to correct anytime soon, because of how truly epic in the level of shittyness this economy actually is turning out to be. So here we go again, pumping more play money into the market, bendover barnecke will cut rates yet again. Inflation will sky rocket, the value of the dollar will drop, food prices and commodity prices will find record highs and the middle and poor class will be in the toilet.

welcome to 21st century serfdom.

[Virginia Dare]

8. And the rich will get their grubby hand's on all our 401(k)'s..

that they've been salivating over for so long...:-(

[Virginia Dare]

9. And the rich will get their grubby hands on our 401(k)'s..

that they've been salivating over for so long..:(

[On the Road]

16. Actually, as a Group,

the upper 1% would probably be better off with an economic crash that would allow them to buy up cheap assets.

I don't know how effective the $200B will be, but I do not in any way blame government efforts to moderate the damage.

[MadinMo]

10. I had heard that it causes inflation, but

what do we have NOW if it isn't inflation?

[spinbaby]

11. I phrased that badly

It causes MORE inflation.

[Hawkowl]

12. Fed has given up on inflation right now

Yes, their policy is inflationary, but they think the greater danger is de-deflationary. Meaning that prices keep declining because no one wants to buy anything because they think a better deal (lower price) is always around the corner. This can also lead to a liquidity crisis where banks and other creditors won't make loans because they are afraid the asset you want to buy will decline in value and then you won't pay the money back. This is what happened in the Great Depression of the 1930's. (There actually used to be a "Great Depression about once a decade until the Fed was created.)

So the Fed will continue to pump money into the economy to encourage banks to lend and people to buy NOW because prices are only going UP UP UP! This will prevent (hopefully but not guarantee) the economy from sliding into a deflationary depression. However there will be a hangover when the Fed finally has to get inflation under control, and they jack the interest rates up to double digits. Anyone remember Ronnie Raygun's first term? For a while we may have 10% prime interest rates, 10% unemployment AND inflation! YAY! Go free markets! Go Greenspan! Go Rethuglicans!

Anyway this looks like the path that the Fed has chosen. There isn't much the government (Congress/Pres and the budget) can do except--GASP!--stop the war. Flushing $500 billion a year down an outhouse in Asia is greatly exacerbating our economic difficulties. This wasted war money also increases budget deficits which drive down the dollar which increases inflation and especially the price of oil. Unfortunately this is not going to change for at least a year. THAT WILL BE TOO LATE. By this time next year we will be neck deep in a shit storm of a a recession.

Sigh. Sometimes I regret wasting my college experience on the dismal science.

[Yavin4]

19. hawkowl88 wrote:"there will be a hangover when the Fed finally has to get inflation under control...

...and they jack the interest rates up to double digits."

Have a seat in the Oval Office Democratic president, and welcome to the majority of Congress, Democrats. BTW, the Fed just pushed rates to 22% this morning to fight off that nasty inflation from 2008. Good Luck!

[Hawkowl]

24. Jimmy Carter redux?

The new dem president will need to embrace the recession to get it over early with a la Reagan to get re-elected. If he drags it out he's doomed. I would think that this recession could be worse, i.e; longer than Reagan's (which means it will be the longest since the great depression) but not more than 2 1/2 years from now.

[ProdigalJunkMail]

13. and look at the price of oil...

more money into circulation lowers the value of each dollar...thus, the price of oil continues to rise ever so slightly...

oil cost when measured in oz. gold has changed little over the years...but of course, an oz. gold is now $975 whereas it was less than $600 just recently (in relative time)

sP

[Celebration]

14. It is a swap

The Fed takes the paper that is locked up and has no market, including AAA paper, and the Banks get T bills in exchange. It's an attempt to unseize the capital markets. The jury is out.

[spanone]

15. our money is worth less than monopoly money

[klyon]

17. He just printed 200 billion dollars?

Now that is creating wealth from nothing, the American dream.

[Yavin4]

18. Propping Up The Market So That The New President Takes The Blame

It's the exact same philosophy as the surge in Iraq. Don't solve the probelem. Don't enact long term solutions. Just create a quick illusion of progress so that the shit falls on the next person who sits in the oval office.

Sort of like cleaning your house by shoveling all of your crap into the closet.

[Jacobin]

21. That just about sums it up perfectly

[DFW]

20. That's about $570 for every American citizen

Our tax dollars at work (or at play, or down the tube, or something).

I hope they don't do this too often. It'll really put a dent into my grocery budget.

[onethatcares]

22. when will it end? will the United States ever become a

non debtor nation again? Jeez, I never thought I would see this happen, ever.

[TML]

23. Just what Americans need

More debt saddled on our shoulders. Thanks, Bernanke. :sarcasm:

[ellisonz]

25. Capitalism.

woot