DOW Up 416 Points: Biggest Gain in Five Years

[les horowitz]

Fed Rally on Garbage Paper

'Before we continue, let's understand what the Fed actually did: Rather than merely expanding the existing Term Auction Facility (TAF), they went several steps further. They created a new credit facility, the Term Securities Lending Facility (TSLF). Then, they empowered the TSLF to accept a broad range of private collateral - "AAA" private mortgages in addition to those that are agency paper. '


http://bigpicture.typepad.com/comments/2008/03/fed-rally.html

The Fed has committed all of its 200 billion dollars of T-bills in its SOMA holdings to this rescue package. Any more problems surface and they'll have to sell T-notes which will drive up the 10-yr rates.

http://www.newyorkfed.org/markets/soma/sysopen_accholdings.html