Tarp Money, Credit Cards, Stress Tests
Stocks moved sideways today, and bonds continued their loss in value (increased interest rate).
Gold moved sideways as did the Dollar.
Oil and gasoline continued going up, and the folks who manipulate the gasoline market are alive and well. Gasoline is going up much faster (as a percentage) than oil.
In the news today…..
Housing Starts – dropped to 458,000 units (adjusted to annual), the lowest number ever recorded over a half a century. Remember that optimism about new houses a few days ago – it just got killed. This is still great news, and fewer homes coming onto the market to compete with the bloated inventory of homes for sale makes for a quicker recession (not much quicker, but quicker).
Credit Cards – remember the talk from Obama on reforming the credit card companies. Guess who’s going to pay for that reform? You and me, the folks who pay off their cards each month. You will see companies eliminating free cards (annual costs) and removing a lot of the perks (like money back), and even charging interest from the day of purchase.
TARP Money Returned – is a thorny issue. The Treasury got some “warrants” (the right to buy stock at a fixed price) as part of their lending the TARP money in the first place. When the banks pay back the TARP loan, they still want to buy back, or get rid, of those pesky warrants. One small bank repaid its TARP money and repurchased its warrants for $1.2M, but these warrants could have been worth $6.9M. So, the taxpayer got screwed again. Why is the Treasury so lenient with the banks at the taxpayer expense???? Is Congress watching this? (No, or course.)
More on the Stress Test – the Wall St Journal ran the numbers (stress test analysis) on the smaller and mid-size banks – the ones the Treasury didn’t test. The WSJ results??? 600 banks failed the test, and will have a $200B loss by the end of this year. Who’s watching this store? The FDIC, it think.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8475 (down 29 points)
10 Year Treasury Bond – 3.24% (up 0.03%)
Euro – $1.3636
Gold – $927 (up $5)
Oil – $59.65 (up $0.62)
Gasoline $1.81 (up $0.06)