U.S. stocks rise as German court clears way for ESM; hopes increase for more U.S. quantitative easing

“U.S. stocks rose, sending the Standard & Poor’s 500 Index toward a four-year high, after Germany’s highest constitutional court allowed the country to ratify the euro area’s permanent bailout fund,” Inyoung Hwang reports for Bloomberg. “Apple Inc. (AAPL) gained 0.5 percent before the company introduces its redesigned iPhone later today.”

“The S&P 500 added 0.4 percent to 1,438.81 at 9:40 a.m. in New York, surpassing the highest close since 2008 set last week. The Dow Jones Industrial Average gained 43.80 points, or 0.3 percent, to 13,367.16 today. Trading in S&P 500 companies was up 32 percent from the 30-day average at this time of day,” Hwang reports. “Germany’s Federal Constitutional Court dismissed motions that sought to stop the government from contributing to the rescue facility known as the European Stability Mechanism. The legal challenge delayed efforts by Chancellor Angela Merkel and other euro-area policy makers to stem the region’s debt crisis. The judges ruled that parliament must approve any increase of the country’s 190 billion euros ($245 billion) of liabilities.”

“In the U.S., the Federal Reserve begins a two-day meeting today amid speculation policy makers will provide more stimulus. The central bank will probably announce a third round of bond purchases tomorrow, according to almost two-thirds of economists in a Bloomberg survey. The central bank will also likely commit to hold interest rates close to zero into 2015, the survey showed,” Hwang reports. “Chairman Ben S. Bernanke and his colleagues on the Federal Open Market Committee will opt for further quantitative easing to support an economy that grew at less than 2 percent in the second quarter, according to economists. The unemployment rate has remained above 8 percent for 43 consecutive months. Stocks have rallied on expectations of easing by the central bank.”

Read more in the full article here.


  1. I don’t get why Europe should bail out Greece, I don’t get why Greeks blame Germany for their terrible habits and culture of borrowing and being irresponsible with others money, I don’t get why there needs to be a bailout fund.

    None of this makes a single bit of sense.

    If Greece does not contribute to the European Union they should not be a member. If they can’t pay their debt they should stop borrowing and reform their government and society and the banks should stop lending to them. Same with other southern European poorly run countries.

    1. Greece was courted for a long time in regards to membership in the EU. The problem with all of these scenarios is that they do not take into account the disparity in currency valuations among the member countries. Since there is no uniform monetary policy that can be effectively enforced, you are bound to have a situation where certain member nations fall behind in their ability to base their economies on this currency fluctuation. This is also evident in Spain and Ireland. It doesn’t matter how the country is run (or if it is governed correctly. Greece, for example, can never approach the GDP of Germany or France. Thus, its economy suffers. And when the worldwide banking crisis (started by greedy speculators in the western capital markets) effects one economy, it causes problems for nations whse economies are not as strong or as diverse as the strongest economy.

  2. Quantitative Easing is a euphemism for the progressive devaluation of the US Dollar and all non hard assets denominated in Dollars for the expressed purpose of propping up zombie banks by unelected officials.

    What the Fed has handed out and obligated the United States for makes TARP and the Obama Stimulus program look like petty cash. It also dwarfs the estimated $4 Trillion cost of Bush’s elective wars in SW Asia.

    Where are the teabaggers on this issue? Where are the ‘true conservatives’? Where are the Paulites?

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