Stocks Erase Losses on Stimulus Bets (Here comes QE3!)

U.S. stocks erased losses amid speculation Federal Reserve policy makers were considering another stimulus program to prevent the nation from slipping into a recession.

The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,255.21 at 1:55 p.m. in New York after losing as much as 1.6 percent in morning trading. Stocks recovered as the Wall Street Journal reported that three former top officials at the Fed believe the central bank may consider a new round of securities purchases to bolster growth.

Pacific Investment Management Co. and BlackRock Inc., which together oversee almost $5 trillion, say the U.S. economy is stalling. Bill Gross, who runs the world’s biggest bond fund at Pimco, and Peter Fisher, head of fixed income at BlackRock, have said the Fed is preparing measures to counter the slowdown.

Bloomberg

Who says that the hedge fund managers, and big banks don't have access to inside trading information? Here it is the next round of OMG WE ARE SCREWED! I mean quantitative easing. The Fed showed signs with their last meeting that this might happen, well guess what now wallstreet thinks so too. We all knew that the economy wasn't improving, I mean just take a look around. Every week there is a new headline about how unemployment isn't improving, or thousands more apply for state and federal aid, and now there are talks of mass layoffs starting up all over again.
This is all starting very much to feel just like the summer that preceded the fall of 08'. We have had several down days in the markets just like in 08'. Consumer confidence is rapidly shrinking just like in 08'. All we need now is that little push off the proverbial edge and we will be right back in free fall mode all over again. I think it's about time to stop applying band aids and either come up with a real solution to the problem, or just let it run it's course and stop slowing the inevitable!

reply to post by SpaDe_


Just in time too .. they needed that bit of "good news" to bring stocks up from the plunge as it would have been the longest loosing streak since 1978!

reply to post by Rockpuck


Yes the timing was impeccable really. Too bad that it is just a temporary fix to a very long term problem.

It continues to surprise me to hear people comparing our current situation to that of 2008. This is far worse than 2008 ever was.