What The Fed Is Going On?

$8,500,000,000,000.00

That’s the number…$8.5 trillion. That’s how much the our government is preparing to provide on behalf of you and I after guaranteeing another $300 billion to Citigroup (C, $6.08, up $0.13) and another $800 billion today for consumer debt and mortgage loans. And we ain’t done yet.

To put this in perspective, the government is pledging about $25 grand from every man, woman and child that is currently living in the country. I’m not sure what the “average” income for America is but what this is basically saying is that many of us will be working an extra year.

Want some more gruesome numbers? The $8.5 trillion is nearly 10 times the amount that we have spent on the wars in Iraq and Afghanistan. It also represents about half of what it would take to pay off the country’s mortgages. Wow.

The bailout cash that our government is throwing around like monopoly money is intended to rescue the financial system but I say let nature take its own course. The market has rallied for three straight trading sessions and that hasn’t happened since late August. However, I’m a little concerned that this rally may be lost in a purple haze of government money. Its a risky game we are playing but so far the market has shrugged these alarming figures off.

As a result, the Dow rose 36 points to 8,479 but hit a high of 8,600. The S&P 500 also traded higher by 5 points and finished at 857.39. The Nasdaq was the weak link as it fell 7 points to close at 1,464.

Futures are pointing to a lower open this morning ….

Rick Rouse
Rick@OptionsMentoring.com

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