These are worrying times. Not only for investors, but also for anyone with their savings in US banks. Already, some of the biggest names in banking have gone belly up. How do you know whether you bank is safe or not? Keith Fitz-Gerald in Money Morning says there are three steps you can take to make sure your bank is safe.
Yesterday, traders sent the Dow down a record 777 points. Today, the mood is more upbeat. The Dow is up 363 points. Traders clearly still want to believe the government can still help sort out Wall Street’s problems.
Justice Litle isn’t fully sold on the bailout. But he says it isn’t an option to let Mr. Market sort himself out this time: the US is too leveraged to follow Andrew Mellon’s “liquidationist” approach during the Great Depression.
That’s why the feds will do whatever it takes to prop up the system… and run the dollar into the ground. And that’s why you should buy gold now.
The financial sector continues to bleed out. But only part of the financial sector is on death watch, says Andrew Gordon in Investor’s Daily Edge. Small banks are doing better than ever. Some of them have price-to-book ratios of less than one. That means their going for free!
Even with a congressional compromise having been reached, the $700 billion credit-crisis bailout plan will remain the headline story this week as analysts monitor whether the deal is viewed as a good one, or is ultimately regarded as a flawed deal that can only do damage to the U.S. economy over the long haul.
Circuit City Ousts CEO; Huge MSFT Buyback; McAfee Buys Secure Computing; Buffett’s Cash Wins Out; WaMu Downgrade; CarMax Crashes; Krawcheck Out at Citi; Legg Mason Not Going Private
Having savaged the U.S. financial sector since it surfaced in the summer of 2007, the credit crisis evolved into a crisis of confidence – which has manifested itself as a liquidity crisis. And that liquidity crisis is no longer confined to the financial sector. It’s spilled over into the energy sector, as well.
Quality leaves a trail of accomplishment. Somehow– we must believe — it’s possible to tell companies that will do well and fly right from those that won’t. That’s the only rational reason to choose stocks. So smart investors look for key information—the bits that predict where to find the winners.
– The Fed, desperate to relieve the panic that has gripped the credit markets, has almost quadrupled the amount of dollars central banks can auction around the world to $247 billion.
– According to Bloomberg: “The Fed increased the amount of dollars that the European Central Bank, the Bank of Japan and other counterparts can offer from $67 billion ‘to address the continued elevated pressures in U.S. dollar short-term funding markets.’ The Bank of England, the Bank of Canada and the Swiss National Bank also participated.”
– This flood of cash seems to have cheered Wall Street. “US stock futures pointed to a stronger start. S&P 500 futures rose 16 points to 1,178.90 and Nasdaq 100 futures improved 21.25 points to 1,668.25. Dow…
The US House of Representatives has just passed legislation that lifts the ban on offshore oil drilling. This opens up most of the US coastline to exploration. Individual states now have the option to allow drilling between 50 and 100 miles off their shores. The problem is offshore drilling is unlikely to solve America’s energy crisis. According to the government’s own report, widespread offshore drilling would result in a price reduction of perhaps “two-tenths of one cent 18 years after drilling begins.”
Lehman Brothers (NYSE: LEH) has a lot to answer for… No sooner had I wrapped up this edition of “Sector Watch” than the company declared bankruptcy, thus forcing me into a swift re-write! So much for my plan to go fishing yesterday…