Investors cheered news that the Federal Reserve, along with five other central banks, were stepping up to ease the crisis in Europe. The coordinated action by the banks was meant to make it cheaper for banks around the world to borrow U.S. dollars. The central bankers' message was heard loud and clear: They won't let another financial catastrophe happen like the 2008 bank failures. The Dow surged following similar moves by indices around the globe.
After the initial reaction, however, investors quickly realized that the move would not fix the broken euro zone, it would only buy its leaders more time to agree on a path forward.
There's good reason to be both optimistic and cautious as we ring in the New Year.
