Notice also how the Administration is no longer talking about jobs. ..... No, now its all about class warfare, trying to make himself out to be one of the "littleguys" fighting off the evils of those rich bastards. Campaign 2012 has begun
More food for the rightStocks End Sharply Lower After Fed Decision
Published: Wednesday, 21 Sep 2011
Stocks closed near session lows after selling off sharply in the final hour Wednesday as investors were cautious over the Fed's grim outlook, even as it proposed plans to ramp up its aid to help the economy.
The Dow Jones Industrial Average plunged 283.82 points, or 2.49 percent, to end at 11,124.84, led by BofA & JP Morgan
The S&P 500 slumped 35.33 points, or 2.94 percent, to close at 1,166.76, logging its biggest drop in almost a month. The Nasdaq fell 52.05 points, or 2.01 percent, to finish at 2,538.19.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, soared near 37.
Among the key S&P sectors, materials and financials fell.
The Fed announced it would launch a new $400 billion program in a move to rebalance its $2.87 trillion portfolio—a version of the widely expected Operation Twist—by selling shorter-term notes and using those funds to purchase longer-dated Treasurys.
Fed's 'Operation Twist' and Stocks: A History Lesson
"Recent indicators point to
continuing weakness in overall labor market conditions, and the unemployment rate remains elevated," the Fed said in a statement. "There are significant downside risks to the economic outlook, including strains in global financial markets.""[The Fed's view] of a 'significantly weaker economy’—is what investors are focusing on,” said Alan Valdes, director of floor operations at DME Securities.
What Changed in the Fed Statement?
The Fed also said it would reinvest the proceeds from maturing agency debt and mortgage-backed securities into mortgage-related debt to help keep mortgage rates low and bolster the housing market.
"The market appears to be confused as to what the Fed is trying to accomplish," said Michael Darda, chief market strategist and economist at MKM Partners in a note regarding the Fed statement. "Perhaps the next round of support will come in the form of an explicit goal for boosting nominal GDP back to its trend level, meaning previous and future Fed balance sheet expansion would be permanent, up to a point."