http://www.bloomberg.com/…

Fannie Mae and Freddie Mac rose in Frankfurt after U.S. Treasury Secretary Henry Paulson said he will seek approval from Congress to shore up the mortgage finance companies by buying equity stakes and increasing lines of credit.

Fannie Mae gained 31 percent in German trading and Freddie Mac advanced 33 percent after Paulson said he would seek authority to buy unlimited amounts of equity. The Federal Reserve also agreed to lend directly to the two companies to help provide interim financing.

Paulson’s plan may put a floor under the shares, which dropped by about 50 percent last week on concern that shareholders would be wiped out if the companies collapsed or were taken over by the government. Concern that Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, may collapse escalated last week, prompting Treasury, Federal Reserve and White House officials to forge a plan to rescue the companies should they be unable to fund themselves.

“Paulson said he would seek authority to buy unlimited amounts of equity.”

Hyperinflation, here we come?!

No wonder the stocks are up. Paulson is talking about turning all the cotton on the planet into FRNs.

http://business.timesonline.co.uk/…

Shares slumped again on both sides of the Atlantic today after the European Central Bank was forced to inject a record 95 billion euros (£65 billion) into money markets as mounting global credit jitters sparked an abrupt scramble for cash by financial institutions.

The unprecedented emergency action by the Frankfurt-based ECB outstripped even the scale of its intervention on the day after the September 11, 2001, terrorist strikes on the US, when it pumped in 69 billion euros of liquidity to stabilise credit markets.

The move badly unnerved already rattled investors and sent shares tumbling in London and New York as it fuelled anxieties over the global credit squeeze. Amid record trading volumes in the City, the FTSE 100 index lost 122.7 points, or 1.9 per cent.

In New York, the Dow Jones industrial average plummeted by 387.2 points, or 2.8 per cent, closing at 13,270.7, in its worst losses since a 416-point plunge in February, when investors were shaken by a drastic sell-off in China’s stock markets.

“[ECB] made clear that it was ready to provide unlimited funds at 4 per cent and ended up providing some 94.8 billion euros.” “… the US Federal Reserve providing $24 billion as part of daily money market operations, against only $5 billion provided on Thursday last week.” Inflation here we come! Seems the $24 billion didn’t counter act the euros given the dollar ended up trading higher and metals dropped a bit. I wonder how the market would have reacted if they failed to do this.