Comments on: Financial Liquidity Injection: Better Late Than Never http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html Freshly squeezed market commentary & analysis Thu, 20 Nov 2008 11:56:56 +0000 http://wordpress.org/?v=2.0.2 by: Babak http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13439 Tue, 14 Aug 2007 13:47:58 +0000 http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13439 Prospectus, here's the the <a href="http://www.washingtonmonthly.com/archives/individual/2007_08/011861.php" rel="nofollow">best detailed explanation</a> I found. This is Fed101 stuff but to most their operation and structure is a mystery so it is no wonder there is so much confusion. Prospectus, here’s the the best detailed explanation I found. This is Fed101 stuff but to most their operation and structure is a mystery so it is no wonder there is so much confusion.

]]> by: Phileo http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13206 Tue, 14 Aug 2007 07:50:52 +0000 http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13206 Hi Prospectus, The Fed is providing low interest loans (ie. below the Fed. Fund rate) to the banks themselves. My del.icio.us <a href="http://www.investorvillage.com/smbd.asp?mb=4249&#38;mn=13967&#38;pt=msg&#38;mid=2769574">link explains the gory details here</a> Hi Prospectus,

The Fed is providing low interest loans (ie. below the Fed. Fund rate) to the banks themselves.
My del.icio.us link explains the gory details here

]]> by: Prospectus http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13081 Tue, 14 Aug 2007 04:11:24 +0000 http://www.tradersnarrative.com/financial-liquidity-injection-better-late-than-never-1249.html#comment-13081 So what exactly does it mean that they "added liquidity", and how does it actually affect the markets? Everyone talks about it, but nobody really says what's happening when they "add" it. I even called a talk radio show about the markets and they gave me some wandering answer about subprime and banks that didn't answer the question. I think that they didn't even know! Anyway, does the Fed actually buy stocks and pump up the market? Do institutions borrow money from the Fed and buy stocks? Do institutions, who are hit with redemptions and don't want to sell their subprime portfolio into a no-bid situation, borrow from the Fed and pay off their investors? What is actually happening? So what exactly does it mean that they “added liquidity”, and how does it actually affect the markets? Everyone talks about it, but nobody really says what’s happening when they “add” it. I even called a talk radio show about the markets and they gave me some wandering answer about subprime and banks that didn’t answer the question. I think that they didn’t even know!

Anyway, does the Fed actually buy stocks and pump up the market? Do institutions borrow money from the Fed and buy stocks? Do institutions, who are hit with redemptions and don’t want to sell their subprime portfolio into a no-bid situation, borrow from the Fed and pay off their investors? What is actually happening?

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