FDIC Guarantees
Stocks soared forward today setting near term highs, and bonds increased in value (lower interest rates) as the FED bought bonds on the open market.
The Dollar lost more money, and is WEAK, WEAK, WEAKER.
Gold, oil and gasoline all went sideways.
In the news today…..
FDIC Bank Guarantees – of $320B that were made when banks failed and other banks have taken over the bad debts, are being proposed to be phased out in 6 months by Sheila Bair, the head of the FDIC. Don’t be confused. This is not a phasing out of the $250,000 per account of FDIC guarantees, but guarantees to banks. Let’s give Sheila a big thumbs up as this would eliminate a risk to taxpayer money and would provide an early indication of how banks will fare without these guarantees.
Foreclosures – in August came in at the second highest level in our current housing meltdown. In other words, foreclosures are on a rampage. The highest foreclosure rates came in Nevada, Florida and California.
Jobless Claims – fell last week, and stood at 550,000. Everyone cheered because this number was less than the estimates. What are people cheering about? This is just a big number, plain and simple.
Trade Deficit – hit $32B last month, and was growing from previous months as imports surged in the US. How would you interpret this statistic? My opinion is that a growing trade deficit means we owe MORE money to other nations, and our Dollar will continue to fall as long as this imbalance doesn’t appear to be being fixed – ever.
Here are the last numbers for today (about 40 min before closing):
Dow Jones 30 Industrial – 9626 (up 80 points)
10 Year Treasury Bond – 3.34% (down 0.18%)
Euro – $1.4606
Gold – $997 (up $2)
Oil – $71.94 (up $0.63)
Gasoline – $1.80 (down $0.02)