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04 May 08




4 May 08
Pros
U.S stocks rallies sending the market to its first three-week advance since
October, as a better-than-forecast jobs report boosted optimism that employment
will weather an economic slowdown. All 10 industry groups in the Standard &
Poor's 500 Index climbed after the government said payrolls shrank by 20,000
workers in April, almost three-quarters less than economists had projected.
Citigroup Inc. led financial shares to their highest level since February as the
Federal Reserve increased a cash-loan program. Yahoo! Inc. advanced on
speculation Microsoft Corp. will boost its bid for the operator of the second-most
popular search engine. Stocks rose in Europe and Asia.




May 2 (Bloomberg) -- The Federal Reserve, seeking to prevent a deeper
economic slowdown, took another stab at coaxing banks into lending at lower
rates. The Fed boosted its biweekly Term Auction Facility sales of cash to banks
by 50 percent to $75 billion and expanded the collateral it takes from bond
dealers through loans of Treasury securities. It also raised the amount of dollars it
makes available to the European Central Bank and Swiss National Bank through
swap lines to a combined $62 billion from $36 billion. Fed officials also expanded
the collateral they accept under the Term Securities Lending Facility to include
AAA rated asset- backed investments. About 95 percent of outstanding student-
loan securities are AAA, according to the American Securitization Forum.
Democrats in Congress had pushed Chairman Ben S. Bernanke to take student-
loan bonds on the central bank's balance sheet.
Cons




`Persistent Liquidity Pressures' Policy makers and economists have cited
the rise in the London interbank offered rate for dollars as evidence of
banks' and investors' concerns about lending to counterparts. Eric
Rosengren, president of the Boston Fed, said in a speech last month that
Libor has ``been elevated since the onset of financial problems'' in July.
Today's decision comes after criticism from Stanford University economist
John Taylor, who wrote in a study last month that there is ``no empirical
evidence'' the TAF has reduced the premium that banks charge each
other to lend cash for three months.
Source      Contributor
Saxo Bank   Eric




Bloomberg   Eric
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posted:9/24/2012
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