Once more as I said last Wednesday when "they" did the exact same thing [Thank the Market Gods for Premarket], why bother to have a market during the day anymore? Just do all the buying between 7 AM and 9 AM when the indexes are easy to push around, and call it a day.
On a very related note - conspiracy theorists will understand how important this is - lost in the bailout news was an even more important event in my book. The European Central Bank has decided, much like the Fed, to take whatever they want on their balance sheet in a desperate attempt to assure everyone, "it's all ok" and "there is no longer any risk in the market, we have you covered". Including junk government debt from Greece. So now both major western central banks have taken their pristine balance sheets and used them as warehouses for the worst of the worst... ah, free markets.
- The European Central Bank said it will accept all Greek government debt as collateral when lending to banks, indefinitely suspending minimum credit-rating thresholds to support a 110 billion-euro ($145 billion) bailout of the debt-strapped nation. (why do we bother to have rating agencies anymore... I mean when push comes to shove ratings don't mean a darn thing, the central bank will buy anything)
- “For the banking sector it’s a big relief,” said Frederik Ducrozet, an economist at Credit Agricole SA in Paris. “It’ll support the liquidity situation and Greek banks will still be able to come to the ECB with their country’s sovereign debt, European banks will be able to too.”
- In October 2008, the ECB cut the minimum rating for assets it accepts as collateral to BBB-, the lowest investment grade. It extended the policy change indefinitely on April 8 this year as it became clear a return to the old rules may exclude Greece.
Moral hazard baby.