FED and SEC
Stocks moved up over 100 points in the morning, but ended down 56 points at the close. Not enough good news out there to support a rally, and there is an abundance of bad news. Bonds increased in value as they continued to play their “safe haven” role.
Oil was off about $5 during the day, but ended down less than $4. This smells just like the last times we had a pull back in oil, and those nasty speculators came in and pushed oil to a new high. We’ll just have to wait and see it this plays out again.
Gold fell $5, but is holding its value well in tnis commodity downturn.
In the news today…..
The FED and SEC are going to share information. What a novel idea!!!! The FED regulates banks, and the SEC regulates investment firms (who act just like banks). The idea is to have the FED be able to see any future Bear Stearns meltdown before the last hour.
Fannie and Freddie got killed on the stock market today. Each fell 17% in share value. Why??? Well, Fannie and Freddie, as Government Sponsored Enterprises (GSE’s), are the biggest buyers of mortgages in the country. However, until today, the general public didn’t know their exposure to mortgages. Fannie is exposed to the tune of $46B, and Freddie is exposed to the tune of $29B. The really bad news is that there are some new accounting rules that (if they are enforced on Fannie and Freddie) would create an under-capitalized situation in each company. Now, if I were you, I would be thinking, “Why, don’t we have the best accounting rules anywhere in the world?? And, isn’t it just unnecessary to tighten up on those accounting rules???” (Let sarcasm rule!!!!)
Here are today’s numbers:
Dow Jones 30 Industrial - 11232 (down 56 points)
10 Year Treasury Bond - 3.93% (down 0.04%)
Euro - $1.5721
Gold - $929 (down $5)
Oil - $141.37 (down $3.92)
Gasoline - $3.48 (down $0.09)
