New Bank Watch List
Stocks and bonds moved sideways today – after retreating due to the Dubai news on Friday.
The Dollar lost more value against the Euro, and Gold rebounded somewhat from its Friday lows. Gold’s action is very bullish as it shows strength in a pressured environment.
Oil and gasoline gained as the Dollar slipped.
In the news today…..
New Bank Watch List – and this one is more serious in my opinion. The risk involved is cross border collateral risk. The FED is asking for a plan (or living will) from each bank on how they would wind down their operation in case of another emergency. Here are the banks:
North America: Goldman Sachs (GS), JPMorgan (JPM), Bank of America ( BAC), Royal Bank Of Canada (RY). U.K.: HSBC (HBC), Barclays ( BCS), Royal Bank of Scotland (RBS), Standard Chartered. Europe: UBS (UBS), Credit Suisse ( CS), Societe Generale, BNP Paribas, Santander (STD), BBVA (BFR), Unicredit, Banca Intesa, Deutsche Bank ( DB), ING Group (ING). Japan: Mizuho (MFG), Sumitomo Mitsui, Nomura ( NMR), Mitsubishi UFJ Financial Group (MTU). Insurers: AXA (AXA), Aegon ( AEG), Allianz (AZ), Aviva, Zurich, Swiss Re.
Dubai Default – the UAE came to the rescue – verbally and gave support to the markets. However, if you read between the lines, the UAE is not guaranteeing or backing the defaulted loans by Dubai. UAE is the oil rich country, and Dubai is the built it and they will come country. This mess is not over by a long shot.
Mortgage Rewrite Program – is not working according to the US Treasury. The Treasury is managing the $75B program to allow some home owners to rewrite their mortgage and keep them in their house. Some banks are just very slow at doing the job. Bank of America is the worst. The Treasury will be naming names to “shame” the bad banks into actions. I say “good luck.”
European Central Bank Leaders – failed to convince the Chinese to break the Yuan’s link to the US Dollar. The US Dollar has fallen 20% against the Euro recently, and, therefore, the Chinese currency has too. That makes Chinese good dirt cheap in Europe, and the Chinese will start sending their container ships to Antwerp any second. I just can’t believe the Trichet – head of the European Central Bank – thought he could convince the Chinese to change their policy. Especially right after our President failed at the same thing last week.
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,345 (up 35 points)
10 Year Treasury Bond – 3.20% (down 0.01%)
Euro – $1.5011
Gold – $1180 (up $5)
Oil – $77.42 (up $1.37)
Gasoline – $2.01 (up $0.06)