Trading Now

Trading Now

Friday, August 28, 2009


Some banking giants emerge from crisis in better position
U.S. regulators pumped money into the financial system and leading financial institutions last year amid concern that some of the banks were "too big to fail," meaning their collapse would severely damage the broader financial system. Thanks to some federally arranged acquisitions, some of those banking giants are even larger, with stronger market positions and greater control over lending. JPMorgan Chase, for example, holds 10% of deposits in the country. The Washington Post (28 Aug.)

Data show U.S. banks have lengthened foreclosure process
Banking industry data and anecdotal evidence suggest that, contrary to public opinion, U.S. banks have been delaying foreclosures to avoid losses and to keep people from losing their homes. Amherst Securities Group said the foreclosure process takes as long as two years, up from 15 months a year ago. Financial Planning/American Banker (26 Aug.)
*everyone thinks these problems are baked in to today's share prices (EXCEPT ME) They are comparing the price to their historic highs in 2007. Not an accurate place to start since is was mainly debt driven.
FDIC says it has 416 banks on "problem list"
The Federal Deposit Insurance Corp. said its list of problem banks has grown from 117 at the end of June 2008 to 305 at the end of March to 416 at the end of June. Those banks have combined assets worth nearly $300 billion. The number of troubled lenders continues to rise despite indications that the U.S. economy is stabilizing. "It's a continuation of the deterioration across the industry," said Gerard Cassidy, a bank analyst at RBC Capital Markets. "We think there are hundreds of failures to come." The Wall Street Journal (28 Aug.)

*how bout US banks? No way. Then they wouldn't be able to use their hoarded cash to trade for profits and bonus'.
Central bankers eye Sweden's negative interest rates
Sweden's Riksbank introduced negative interest rates on bank deposits last month to spur banks to bolster lending. The move is expected to be closely watched by central bankers worldwide as they consider how to exit emergency measures implemented to cope with the financial crisis. Bank of England Governor Mervyn King indicated that he would consider such a policy as the U.K. faces a liquidity trap. CNN/The Financial Times (28 Aug.)
Study: Speculators account for half of traders in oil market
A study from Rice University shows that during the past seven years, speculators have grown from being 20% of all traders in the main U.S. oil market to 50%. The growth coincided with the recent historic rise in the price of crude oil. The study is expected to fuel debate about tightening regulation of the market, a move opposed by the financial industry. "We have just emphasized that those market participants who don't actually receive physical delivery play an important role in the markets, and limiting people's access to those markets just ends up pushing market share into a smaller number of hands," said Andrew DeSouza, spokesman for SIFMA. San Francisco Chronicle (28 Aug.)

*didn't Canada say last month that their recession was over?
Canada's Harper promises balanced budget after recession
When the recession ends, Canada will return to a balanced budget and do so without raising taxes or scaling back government programs, Prime Minister Stephen Harper said. "We had a balanced budget, a budget in surplus, before this recession," he said. "At the end of this recession, we will return to a balanced position." Financial Post (Canada)/Reuters (27 Aug.)

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