FED takes over money market …
Interesting thing today!!!
The FED announced, it will start paying interest on bank reserves.
This will open the door to take over the money market as banks don’t trust each other.
GOOD MOVE!!!
At the same time, the FED said, it will DOUBLE the “firepower” until the year end.
The FED is as well talking to the Exchanges, whether and how it will be possible to clear CDS’s and CP’s.
First auctions for the “bad assets” could start as soon as NEXT WEEK.
Highly probable is a “bigger and coordinated” cut of interest rates as early as THIS WEEK!
What about Thursday as the ECB will meet then?
So with today’s last hour rallye and some extreme oversold readings for stocks as:
- A VIX close to 60!!!
- a 1690:1 reading for new lows to new highs on the NYSE
- a 1020:3 reading for new lows to new highs on the Nasdaq
We could be really close for a sharp rallye 
Tags: ECB, FED, money market, rates, VIX
