Dow Jones Recovers….
Stocks recover and it looks like the Senate will be voting on the $700 Billion Dollar Bailout bill tomorrow night. Initial reports have 70 + yes votes. One new prevision is for FDIC insured deposits do be raised to $250,000. This is very nonpartisian ans should go over well on “Main Street”
Here is the ARTICLE
The Dollar is KING !!!
The Dollar surged on the back of increased troubles in the overseas markets. No longer is the market thinking that this is a U.S. problem, now everyone seems aware that it is a global problem. Dexia is the latest victim of the credit crisis as a state backed rescue plan was enacted today. Dexia is the world’s biggest lender to local governments.
It seems that the market is realizing that the U.S., although still in a lot of trouble, is ahead of its European counterparts in dealing with this situation.
“This isn’t just about Wall Street, there’s very bad news in Europe that will need to be countered by new measures,” said Stephen Jen, the global head of currency research at Morgan Stanley in London. “What’s notable is how well the dollar has held up against the euro and pound despite the bailout’s rejection yesterday.”
It is expected that on Thursday, congress will meet again to discuss the $700 Billion dollar bailout plan. The market seems to be anticipating progress toward a solution.
Good Luck and Good Currency Trading.
Problems in Europe
The ripple effect is starting to hit Europe. Yesterday the European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG. This came just hours before the U.S. Congress failed to agree to the $700 Billion Bailout package. The tightening credit situation is hitting everyone and with it economies will also be hit. One thing I have posted about before is how I feel that the U.K. could get hit pretty hard since their mortgage markets is basically all set with variable rates. Also ther Real Estate market in the U.K. was crazier then it was here in the States. I was discussing this with a few co workers yesterday and was informed that in the U.K. if you walk away from your mortgage the government can come after you and take your car, savings etc etc. This limits the chances that someone will walk away. If this is true (I am trying to get confirmation) then it would certainly lesson the chances that someone would up and walk away, well at least just a little.
The ECB has said it will add more funds to the banking system through year end. They will do so with “Special Auctions”. They just doubled the size of the currency swap to $240 billion dollars to make more dollars available to the market.
All in all not a pretty picture, and I think it is best to stay as much on the sidelines as is possible with your trading.
Good Luck and Good Currency Trading.
$700 Billion dollar package, that faded away.
The failure of the $700 Billion dollar package has begun to annoy me. Not because it has failed, I have no problem with that. We elect officials who are supposed to speak for the people and they vote their conscious and I am OK with that. What annoys me is the reasons that I am hearing for the failure.
1. That there were enough votes to get the bill passed but when the Republicans heard Pelosi’s speech (blaming Bush for this mess), they took and about face and voted no.
2. That some elected officials could not vote for the package because it bails out the rich on wall street and hurts the Americans on “Main Street”.
The second point is one that I cannot understand. Take a look at what happened today with stocks. Do you think the guy on “Main Street” is happy with this? Their net worth dropped today, either by way of a 401k, pension plan or equity in a home. They are losers. How about the small business that cannot get a loan to stock inventory, stream line shipping etc. etc. This weekend I was getting a haircut and the owner of the shop was explaining to me that he was paying 29% on his credit cards (he was asking if I could get him a better rate at my bank). The balances were so high because he could not get a business loan to fix up his barber shop and it needed to be upgraded. Now he says it is impossible to get out from under and is considering filing bankruptcy. This is the type of guy on “Main Street” that could (notice I said could) benefit from the bailout package. The package once approved would help (considerable) free up cash and enable banks to lend to credit worthy individuals and small businesses. Rather the congressmen today, protecting the little guy actually (in my opinion) hurt him.
As for the first point, I believe those 12 congressmen (if what I heard was true) put politics in front of what is best for the American people. Today’s showing makes me want to vote out ALL incumbents come November.
Did anyone see Hank Paulson gives his briefing? He seemed to be shaking, probable in disbelief, trying to figure out what he could possible do to help this situation.
All comments would be appreciated
Good Luck and Good Currency Trading.
$700 billion Bailout Plan FAILS!
Unbelievable the plan was voted down, and now the finger pointing begins. Stocks have been crushed and U.S. dollar interest rate futures are through the roof. Believe me, interbank lending is frozen. I still think they will come together, especially after this reaction.
The U.S. House rejected a $700 billion financial-rescue plan intended to restore confidence in the nation’s banking system, dealing a blow to government efforts to contain a lending crisis.
The House rejected by a vote of 228 to 205 the measure to authorize the biggest government intervention in the markets since the Great Depression.
CLICK HERE to read the article on Bloomberg.
It seems the Republican are blaming Pelosi’s speech. It seems that 12 Republicans backed out of a yes vote as Pelosi blamed Bush’s politics for this mess.
Good Luck and Good Currency Trading
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