[Velshi:] Action-packed night on CNN tonight, action-packed day at the New York Stock Exchange. But, first, listen to this number. Look at this number, I supposed you don't listen to it. Look at it, 457,000. That's the number of people who filed for unemployment claims for the first time last week. It's a lot of people. It's also 20,000 more people than the week before. It's also higher than people expected it to be. In fact, economists say that's high enough to signal continued weakness in the job market. I think that's obvious, we need to be gaining jobs, not losing them. Another number you should know about: 2 million. That's the number of people who risk losing unemployment benefits if Congress doesn't extend them past the end of this month. We've been down this road before. Tomorrow, we'll have the government's monthly unemployment report, the monthly labor report, showing us what the unemployment rate is for the country and showing whether we lost or gained jobs in October. But right now, the mood at the New York Stock Exchange is hot. I want to tell you why with my friend, Alison Kosik, who is standing by at the New York Stock Exchange, up 188 points right now. What is driving this? This is a record. If we close anything above where we closed yesterday, this is the highest point the Dow will have closed at in a year, Alison.
[Alison Kosik, Cnn Correspondent:] Oh, yes, Ali. I'll tell you what traders here at the New York Stock Exchange are downright giddy. And for people watching, this is important because it means if they're happy, it means you can finally open up those 401 [k] statements and take a look, because I know you haven't been looking for a while.
[Velshi:] Right.
[Kosik:] And better yet, traders think that this rally is going to stick at least until the spring. You know, Ali, the way it's been here at the stock exchange over the past few months, traders were really losing faith that people would really invest in the stock market again. By then, poof, one day the mood changed. Two things happened: Republicans took control of the House; the Fed announces buying up $600 billion worth of U.S. treasuries. These are good things for the market Ali.
[Velshi:] All right. Allison, you'll keep a close eye on this. We'll check back with you to see how this rally continues going on.
[Kosik:] I will.
[Velshi:] Alison just talked about the Fed investing this announcing that they're going to buy bonds worth $600 billion. Let me talk about your money now. The Fed is going to spend the $600 billion in its attempt to give the economy a boost. Now, they can only do a few things to help. They can lower the interest rates. We know they've already done that. That's why mortgage rates are so low. Now, they're doing something called QE2, for short. The "2" is because it's the second time they've done it. The QE stands for quantitative easing, probably the worst word ever invented. It's six syllables and it bores me by the third syllable, but it is really, really important. This is when the Fed buys bonds back from banks. That gives the banks more cash. The banks then use that money to lend to people or to companies. Now, the idea is that these companies will spend it. Basically it's a complicated stimulus package. Not really all that complicated. The real goal here is to drive interest rates down. Banks will have more money to lend. They'll you know, people will start using the economy again. This is going to have some effect, according to traders, it would encourage people to spend. When people spend, that creates demand. And then people get hired. Let's talk to Christine Romans about this to see what sense this makes. Why it's happening. But, Christine, the question that is in most people's minds, you've got this Republican Congress now, this Republican House that's been elected. They're going to pull back any money that hasn't been spent on stimulus. They're going to they might even try and do a U.K. -style thing. But in the U.K., this was a parliamentary government. They could do what they were empowered to do. Here there still be battles about it. But the Federal Reserve has put not billions, not tens of billions, not hundreds of billions, trillions of dollars into this economy in the last three years.
[Romans:] Sure $1.7 trillion at first. And that was the QE1. And I kind of like quantitative easing, Ali. It's six syllables, but I kind of rolls off the tongue. And another 6$600 billion now. And the Fed chief, Ben Bernanke, in a very clear opinion piece in "The Washington Post," he said, look, we understand your concerns that this is something we is kind of untried, but in other financial crises, this has worked. And we've made all kinds of contingency plans and we think this is going to be long-term, good for the economy and this is going to help create jobs and that's the most important thing for us right now. So, he laid this out, lower mortgage rates, he said, are going to be good and they're going to help the housing market. Lower corporate bond rates because of low interest rates will encourage investment, higher stock markets will boost consumer wealth and that is a self- fulfilling kind of virtuous cycle, he said, is something that can come out of this. And that's what they're looking for.
[Velshi:] But it's kind of the opposite.
[Romans:] said to pull it back, right.
[Velshi:] It's kind of the opposite of what a whole bunch of voters brought Republicans into office to do. They said, stop the government spending. This is not the government spending but it's the Fed printing money, and throwing money into the economy.
[Romans:] You're absolutely right. Critics will say, some critics say it's not enough. Some critics say they shouldn't do it because it's going to lead to inflation down the road. Ben Bernanke in his op-ed disagrees and he said he does not think this is going to be some kind of hyperinflationary, super-inflationary move overall. He says it's the right thing to do right now for an economic recovery that is subpar. They are trying to juice the economy here, to give it a kick start, to give it a little help. The economy, as you've pointed out many times, Ali, is recovering. It's going in the right direction, but too slowly. And they want to make sure that they that they add some fire on to that or some fuel on to the fire to get that trajectory to make sure that it doesn't slip back.
[Velshi:] And this does not have to be cleared by anybody. The Federal Reserve does not have to put this before Congress.
[Romans:] No, it doesn't.
[Velshi:] This doesn't have to be debated. This can't be repealed. This is the Fed making its own decisions.
[Romans:] That's right. And earlier this week, I heard of a fund manager who said, look, all this talk in the United States about the midterm elections, the people who can create a job quickest is the Federal Reserve whether they do the right thing and do it correctly in the economy, that's where the jobs are going to come from, not from a Democrat or a Republican.
[Velshi:] OK. This was a recent discussion about it and one hour from now, I'm going to go head-to-head with Richard Quest and do a battle about that.
[Romans:] All right.
[Velshi:] Christine, great to see you as always my good friend Christine Romans in New York. I go to spend more than a week in her company every day. But we do this every week, we do this every day on this show. If you want more of it, "YOUR $$$$$," Saturdays at 1:00 p.m. Eastern, Sundays at 3:00 p.m. Eastern. Christine is also the author of a new book called "Smart is the New Rich," which is garnering lots of discussion because she's got some ideas in there about how you can get past complaining about this economy and actually figure out how to make your economy a little bit better. OK. I'm going to bring you up to speed with some of the stories that we're covering here at CNN. Retailers are reporting strong sales ahead of the holiday shopping season. Thompson Reuters reports same-store sales rose 1.6 percent in October. That is a measurement of the stores that have been open for more than a year. Discount stores, like Costco, surpassed expectations. Same store sales have been on the rise for 13 months in a row. That's a good sign. Another delay for Space Shuttle Discovery. NASA scrubbed today's launch because of bad weather in central Florida. They'll give it another try tomorrow if the weather improves. This will be Discovery's final mission to the International Space Station. Rapper Lil Wayne is out of jail. He left New York's Rikers' Island today after serving eight months on a gun possession charge. A welcome-home party is planned for the Grammy-winning artist in Miami this weekend if you happen to be around. Coming up: something that you own that fits in the palm of your hand can save your life. You don't want to miss this. This could save your life. It's right here after the break.