Correct me if I'm wrong, but I thought that one of the main reasons given for supporting the bailout bill was to ease credit. Now that Bernanke, Chairman of the Federal Reserve, has figured another way to ease credit, can we have our money back now?
Under the plan, which was endorsed by the Treasury Department, the Fed will buy vast amounts of commercial paper, the unsecured short-term debt that companies rely on to finance their day-to-day activities. That means the central bank will lend directly to businesses, not only to banks.
The indications of an easier policy stance and looser borrowing terms did little to calm the U.S. stock market, however. Earlier, shares in Europe had ended their trading day mixed, but Wall Street fell further after Bernanke spoke, with the Dow industrials average falling 5.1 percent to end at 9,447.11
The morning announcement was only the latest move by the Fed in its bid to stabilize the financial system. The logjam in commercial paper has threatened the smooth daily workings of the nation's economy.