The big money waited through the holidays to put some money to work today.  They too were waiting to see who would take their profits.  They too didn’t want to make purchases and find their purchases fueling another big fish’s appetite for profits AND possibly tarnish their performance numbers for 2010.   For at least today, that’s all behind us.

The BIG news today was Bank of America’s settlement with Fannie Mae and Freddie Mac concerning residential loans that were perhaps inappropriately initiated and then sold to Fannie and Freddie.  The settlement amount of approx. $2.8 billion was FAR LESS THAN WAS FEARED.

Here is a good summary article to the subject.  When reading this article, when the acronym “GSE” is presented, insert the words Fannie Mae and Freddie Mac in order for it to make sense. They are “government-sponsored enterprises” or GSE’s.

There was also broad-based buying taking place across the market.  We are not the only ones who believe that the underlying actions of the U.S. Federal Reserve will – over time – squeeze money from bonds and cash into stocks.  Of course the liquidity of the stock market carries the specter of risk associated with any geo-political event, natural disaster, or abrupt change in earnings expectations.

The U.S. dollar increased modestly in value, but looks susceptible to further weakness at this point.

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