Staring at spreading financial dangers, the Federal Reserve announced a rescue package Tuesday that could pour as much as $200 billion into banks and investment houses and allow them to put up risky home-loan packages as collateral. The Fed's maneuver, coordinated with central banks overseas, was its latest effort to stem the global credit crisis and severe housing woes that threaten to bury the United States in its first recession since 2001. Fed Chairman Ben Bernanke and his colleagues have been stretching for new and imaginative ways to confront the situation. They are hoping to bring relief where it is sorely needed: in the market for mortgage securities. Home-loan financing has become much harder to get as nervous lenders have hunkered down.
Gasoline and oil prices extended their record-setting streaks Wednesday, with gas at the pump reaching a new high of nearly $3.25 and crude surpassing $110 for the first time. The dollar weakened throughout the day Wednesday, setting a number of new lows against the euro. Many analysts believe the dollar's decline is the reason crude futures have surged to records in 12 of the past 13 sessions, despite the fact that crude supplies have risen 10.2% since early January.
- JJ Commentary: In typical short-term thinking, our government believes it can keep expanding our enormous debt load to solve long-term problems, making things worse for the future.
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