Bear Sterns Collapses, Fed Cuts Discount Rate

Bear Sterns is sold for $2/share. What a collapse – consider that in January 2007 its shares sold for $171.52. Am I being paranoid here? Greenspan says this could be the worst financial crisis since WWII, the President is huddling with the big dogs today to discuss the financial crisis and in a rare weekend move the Fed cut the discount rate:

In an attempt to stem the bleeding on Wall Street, Federal Reserve on Sunday lowered the discount rate to 3.25% from 3.5% — a move “to bolster market liquidity and promote orderly market functioning.”

The discount rate is the rate charged to banks and other depository institutions for borrowing short-term funds directly from their regional Federal Reserve Bank.

Action on the Federal Funds rate is due this week as well.

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