The Fed is at it again...adding new cash to the system. Today it made a permanent infusion in excess of $6 billion. Although this is part of QE2, it seems to help stabilize the stock market.

Permanent Open Market Operations (OMOs):

The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).