TALF
Stocks fell again today – it just seems to only know how to go down. Obama said it was a good time to buy stocks – and everyone ran for the door – you see people are fairly smart.
Bonds and the Dollar went sideways.
Oil and gasoline rose a little – just enough to insure you will have higher gas prices.
Gold fell dramatically today as people took their profit. I expect gold to go up slightly tomorrow, and that will be the sign to “buy” gold, as gold is currently sitting at a technical support level.
In the news today…..
Obama said today that share prices are at a good level to buy. The market turned negative upon the news. Okay, he was just cheerleading, rather than his “doom and gloom” speeches of late.
The FED started the TALF – get ready to memorize a new mnemonic. TALF stands for Term Asset-Backed Securities Loan Fund. It is a loan that banks and institutions must apply for by March 17th. The loan fund is $200B, and when loaned out should fund up to $1TRILLION in consumer loans. Specifically, it is meant to help with auto, credit card, education and other consumer debts.
However, let’s look at this a second and ask a few questions. Will this help the economy? Only if there is a “demand” for those types of loans. For example, FORD announced today that sales were down 48% from a year ago. What “unintended consequences” might happen due to this FED loan facility? The FED will be taking some securities as collateral for their loaning out the $200B. They won’t take everything. The securities that don’t qualify will become “less desireable” in the credit market – thereby distorting the credit market. We’ll have to wait and see how severe this problem is compared to the benefits of the program.
Here are the last numbers:
Dow Jones 30 Industrial – 6724 (down 37 points)
10 Year Treasury Bond – 2.94% (down 0.02%)
Euro – $1.2572
Gold – $914 (down $26)
Oil – $41.65 (down $1.50)
Gasoline – $1.32 (down $0.03)
