Morning Links: China, Fed to the Rescue

I woke this morning to find markets around the world moving higher on news that China lowered reserve requirement ratios for its banks. This move is obviously short-term bullish, but one must ask, why was such a move necessary? It seems that cooling in China’s economy has officially set in, and may be worse than first expected. If that wasn’t enough, at 8am EST, the Fed broke major news that it will lower interest rates on Dollar swaps, which was a most unexpected move. As with the China news, investors should pause and wonder why this move was warranted (More on both stories below). Naturally, after the news broke, US futures doubled their gains within a matter of minutes. The initial response in European equities was significant. Germany’s DAX is up nearly 5%, while France’s CAC40 is up 4%. Commodities reacted to the news by ripping higher, as gold is up $25, or 1.5%, to $1744/oz. WTI crude oil is back above the $100 mark, currently sitting just above $101/bbl. S&P futures are higher by 3%, pointing to a nice gap-up for US stocks at the open. Best of luck out there, and on with the links…

  • China cuts reserve requirement ratio for banks by 50 bps. (WSJ, Zero Hedge, Bloomberg)
  • Breaking: Fed lowers interest rate on $ swaps. (Bloomberg, WSJ, Zero Hedge)
  • Facebook to IPO, whether it wants to or not. (Dealbook)
  • Bank spending on lobbyists: 2010 vs. 2011. (The Big Picture)
  • A look at the Morgan Stanley bailout. (Pragmatic Capitalism)
  • EFSF falls short, leaders look to IMF for help. (WSJ)
  • Ratings agencies missed Greek troubles. (NYT)
  • About these ads
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