THE BANK BAILOUT CONTINUES

Today the United States announced that it would inject $250 billion into the banking system in attempts to free up frozen credit markets. The goal is to get banks to start to lend to one another again. Nine banks will initially reap the rewards of the cash infusion. $250 billion to help BANKS. Bank stocks soar on the news. In anticipation of the cash injection into the banking system, the stock market posts its biggest one day percentage gain since 1932, up 936.42 on Monday. That is good news for your 401(k). The surge in the stock market was countered by a massive sell off of the 10 year T-Bill, forcing long term interest rates, i.e. 30 year fixed mortgages to yearly highs. The 10 year T-Bill continued to sell off Tuesday morning, sending yields to just over 4%. Now that the banks are happy, when can the consumer have some relief. It is not likely to happen anytime soon. Banks can now lend to banks, but they are not lending to you. Mortgage guidelines continue to tighten, and interest rates are climbing. Don't shoot the messenger, I am just telling you what it is. To date, nothing the government has done has helped the consumer. I assume that it is on the way, but in what form is yet to be seen. My bank just got $25 billion. I wonder how much they will lend me.