Trading Now

Trading Now

Monday, August 31, 2009


*doing something right? Having a $2Trillion balance sheet of MBS ABS and god knows what else, isn't exactly a call to come invest with me cause I got it all down brother! The Fed is part of Uncle Sam (we have to pay for what the fed is doing people) and US is in deep deficit do do and continues to spend spend spend in all of the wrong places. So why should the Fed be any different.
Fed's loan programs earn $14 billion profit, officials say
The Federal Reserve has earned roughly $19 billion from fees and interest it charged to banks and investors using its lending facilities during the past two years. Had the Fed invested that money in U.S. Treasury bills, it would have earned about $5 billion, meaning the central bank has made about $14 billion in profit from the facilities, according to an internal estimate. Financial Times (tiered subscription model) (31 Aug.)


*banks trouble lies with the lack of decision from the fed
Banks' troubles deepen despite improving U.S. economy
So far this year, 84 banks have failed in the U.S., compared with 25 in 2008 and three in 2007. Even as scattered signs of economic recovery appear, some analysts predicted that deteriorating commercial real estate loans will bring down an additional 100 to 300 banks. The Federal Deposit Insurance Corp. has 416 banks on its "problem list." No matter what the government does, it will take some time for the banking sector to work through its commercial loan problems, experts said. Google/The Associated Press (29 Aug.)

Regulators give banks breathing room on securitized assets
Regulators, led by the Federal Deposit Insurance Corp., plan to phase in rules that require banks to bring nearly $900 billion in securitized assets onto their balance sheets rather than implement the rules at once. Meanwhile, the American Securitization Forum asked the FDIC to amend the securitization rule to maintain its safe-harbor provision. "The rule has been an essential part of the legal analysis performed by counsel to issuers providing legal opinions required by underwriters and rating agencies," ASF wrote in its letter to the FDIC. EuroWeek (8/28)

Wall Street prepares to protect OTC derivatives market
Because the government has the over-the-counter derivatives market in its sights, Wall Street is getting ready to protect the market. Five major commercial banks, including Bank of America, Morgan Stanley, Citigroup and JPMorgan Chase, are expected to bring in more than $35 billion this year on trading such derivatives contracts. Bloomberg (8/30)

*we need stimulus in the form of letting all of us deduct 100% of student loan interest and credit card interest and car loan interest. And no taxes on unemployment benefits. That's a stimulus.
U.S. doesn't need another stimulus, surveyed economists say
A majority of economists polled by the National Association for Business Economics said the U.S. does not need a second stimulus. What the government should do is cut spending for the next two years to reduce the budget deficit, the experts said. Forbes/Reuters (31 Aug.)

*this is what you don't do. See how they screw the middle class and the ones who most need help to help their friends at the banks?
U.K. to raise gas tax in first of 5 tax hikes
Motorists pulling up to the gas pump will be among the first in the U.K. to feel the impact of five planned tax increases, as the British government starts shutting down tax breaks aimed at helping businesses and families make it through the recession. The tax on motor fuel will go up by 2 pence Tuesday. The Times (London) (31 Aug.)

*talk about being confused
Canada still in recession, economists say
While optimism builds that Canada is on course for an economic recovery, government data for the second quarter are expected to show that the country is still in a recession, economists said. "This global recession has been a head spinner for Canadian exports, which shrank for a seventh consecutive quarter in the second quarter of 2009, with double-digit declines for the last three quarters, said Diana Petramala, an economist at TD Securities. Financial Post (Canada) (30 Aug.)

*I'll believe it when I see it. They say the same here. Banks aren't lending but rather they are trading in bonds and commodities. I know that's true here, and since China has been following american bankers lead, likely same over there.
Infrastructure receives most of loans from Chinese banks
There is no truth to the claim that 20% of new loans by Chinese banks this year went into the stock market, said UBS economist Tao Wang. If all of the new money put into China's stock market is added to the value of metal imports, the total comes to less than 10% of 2009's new lending. Most of the money went into the real economy, principally infrastructure, Wang said. What about the widespread concern that an unhealthy amount of new lending has been used to speculate in asset markets, leaving banks dangerously exposed? Chinese banks are officially not allowed to lend to investors to buy shares, but money is fungible. Firms may divert loans offered for investment to punt on the stockmarket. According to one widely quoted estimate, 20% of all new loans this year have gone into the stockmarket. Add in property and commodities, and up to half of all lending may have ended up in China’s asset markets, it is claimed. The Economist (27 Aug.)

*have a global sell off this morning but don't worry, GS and JPM will come in sometime today and buy the banks so the market continues its "suck the suckers in" roller ride
Asian markets retreat from early gains to post losses
Shares in Japan gave up gains after euphoria about the election victory of the opposition faded, while shares in China plunged Monday. Tokyo's Nikkei 225 slipped 0.4%, and the Shanghai Composite dropped 6.7%. Hong Kong's Hang Seng Index fell 1.9%, Australia's S&P/ASX 200 inched down 0.2% and South Korea's Kospi Composite slid 1%. Singapore's Straits Times Index lost 1.5%, Taiwan's Taiex inched up 0.2% and New Zealand's NZX 50 gave up 0.4%. The Wall Street Journal (31 Aug.)

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