The FDIC Knows Something…
A fairly boring day in the markets with stocks rising 90 points. Bonds were the only true indicator of what’s going on in the market – economic uncertainty. 10 Year Treasury interest rates are holding well down below 4% indicating the “safe haven” tendency of people trying to protect their money. Will it last? It all depends on inflation – and you know what I think about inflation – it’s coming.
Gold, the Euro, oil and gasoline all rose a little. Oil is worried about the hurricane forming in the Gulf of Mexico.
In the news today….
The FDIC is planning to borrow money from the Treasury. Did you ever wonder where the FDIC got its money? It gets it by charging banks for the FDIC insurance that it provides. How much money? It saved up $45B, and it’s all gone. That’s why it has to go “hat in hand” to the Treasury. The FDIC says it will repay its loan when it sells those banks assets that its seizing. But, what happens if the assets don’t bring in enough money? You get to pay, that’s what.
The last time the FDIC went to the Treasury for money was at the end of the S&L crisis. By that time over 1000 S&L’s had failed, and the FDIC went to get some money. This time around, only 9 banks have failed in 2008 – so why is the FDIC planning this action? It’s because they know something that you don’t know. They’re going to close a whole lot of banks, but they won’t tell you which ones.
Savings and Loans lost $5.4B last quarter. You see, banks are not the only financial institution capable of losing money because of poor housing loans. The number just keeps getting bigger.
Here are Today’s numbers:
Dow Jones 30 Industrial – 11503 (up 90 points)
10 Year Treasury Bond – 3.77% (down 0.01%)
Euro – $1.4770
Gold – $834 (up $6)
Oil – $118.15 (up $1.88)
Gasoline – $3.07 (up $0.10) – two big jumps in two days