Last week when Fed Chairman announced US treasury buyback, bond yield fell and soon after mortgage rates fell as well. Then, market digested the news. The next day the market sold off. When Secretary Geither announced the details of public-private approach to purchasing toxic assets, market reacted positively. Then, Treasury tried to buy bonds. It received lukewarm response. Then, it received massive response.
Overall, the investors are expressing confidence. Market seem to reinforce that. A week is too early to declare victory. But, given the rout in the stock market and the recent improvement, FED effects seem to be working in the right direction.
Nasdaq OMX has new index QGRI to track the companies that recieved more than 1 billion worth of TARP funds or other govt. aid. It is a good way to see if the government programs are working.
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