Having trouble viewing this e-mail? click here to get CNBC.com News Now on your mobile device | | DOW | 9447.11 |  | -508.39 | -5.11% | | | NASDAQ | 1754.88 | | -108.08 | -5.8% | | S&P | 996.23 | | -60.66 | -5.74% | | | | | |  | Sue Herera, "Power Lunch" Co-Anchor
The Fed has made history… again.
Just as many were saying the Fed has very few tools left in it's tool box to solve this economic crisis, Chairman Bernanke and company made the decision today to backstop commercial paper. The significance of this should not be underestimated.
The Fed is essentially saying it will provide a liquidity backstop for U-S issuers of commercial paper. Keep in mind that this has been the part of the market that has been completely frozen lately, costing big and small businesses alike an enormous amount of pain. This should go a long way to reducing rates and providing liquidity, but perhaps more importantly, it may start to restore confidence, which has been in short supply recently.
It also signals the lengths to which this Fed is willing to go to avoid a financial catastrophe. There are those that disagree with the bailout package and some of the Fed's recent moves, but most if not all applaud the Fed's willingness to embrace non-traditional approaches to what is arguably one of the most difficult financial periods our country has ever faced.
The Fed has also signaled that there are a number of other tools at their disposal, and judging from the historic move they made today, the market should begin to feel confident that despite the pain, we will weather the storm.
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CORRECTION: The final sentence for the 10/6/08 News Now Task Force installment was incorrect. It should have stated "Each time marked a top or bottom…and I think most would agree that we're closer to a bottom than a top at this point!" |
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WHAT YOU SHOULD KNOW | |  |
| | Pros Ands Cons For A Rate Cut
With speculation about interest rate cuts a daily event and Fed Chairman Ben Bernanke's latest speech suggesting the central bank is now leaning in that direction, it's worth weighing the pros and cons of such an action and under what circumstances it might be effective...read more | | |
| | Fear Factor Vs. Opportunity Knocking
Wall Street struggled with another day of selling as panic seemed to accelerate into the final minutes of trading. Despite new initiatives from the Fed, trust remains elusive in this market. Mark Fisher, described as the best risk manager on Wall Street...read more | | |
| | How Can You Help Mend a Broken Market?
There's reason to believe the markets are showing signs of recovery, but much needs to happen before a full rebound can begin to take effect, an array of experts said Tuesday. Coordinated action from the world's central banks, tightening in credit spreads and more....read more | | |
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Bernanke speaks! Find out what he said and what it means for your money, plus McCain vs. Obama Round 2 tonight on CNBC's continuing special report "Wall Street in Crisis: Is Your Money Safe" 7p ET hosted by Larry Kudlow | |
| | 3. Hedge Fund Closures to Soar 
"Last year we saw 500 hedge funds closed and I think the number could be at least double that (this year)," Philip Pearson from Aviva Investors told CNBC Tuesday. | | |
| | CNBC.com BLOG OF THE DAY | | |
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