Fed decoder ring translation: While the knuckleheads in Europe keep banging their heads together seeking a cure to the debt contagion, we need to keep money flowing across the globe. To do so, the banks will introduce liquidity swap arrangements, where one central bank essentially swaps its currency for another. At the end of the day, the plan allows the ECB and European banks to borrow U.S. dollars, which takes short-term liquidity pressure down a notch.
"Banks need dollars to fund their daily operations. Their access has dried up as U.S. money market funds reduced their lending to European banks. Big U.S. banks were among the top gainers on the stock market. JPMorgan Chase & Co. jumped 6.6 percent; Morgan Stanley 6.9 percent and Citigroup Inc. 6 percent.
"Here's what you need to know about the central bank intervention: It treats a symptom of the European illness, not the illness itself."