Thursday, April 23, 2009

Back Again - Quick Notes & Articles for the Day - April 23

I apologize for the issues yesterday. You never realize how much you use the internet, e-mail, etc. until you cannot use it. Anyway, the issues look to be handled now. On to the notes for the day.

Notice the action at the Fed and Treasury...

Fed Buys $7 Billion in Short Term Treasurys - The Federal Reserve Bank of New York bought $7 billion in Treasurys maturing in 2012 and 2013 on Thursday in an effort to continue to keep rates low. Dealers submitted $15.99 billion to be purchased. It's the second and last purchase planned for the week. The Fed said in March it plans to buy $300 billion in Treasurys in the coming six months.

Treasury to Sell $101 Billion Next Week - The Treasury Department said Thursday it plans to sell $101 billion in debt next week, slightly more than many analysts expected. It will auction $40 billion in 2-year notes on Monday, the same amount as last month. That will be followed by a record $35 billion in 5-year notes and $26 billion of 7-year notes on Thursday.

Natural Gas Inventories Rise - U.S. natural gas inventories rose 46 billion cubic feet last week, according to an EIA report. At 1,741 billion cubic feet, stocks were 459 billion cubic feet higher (35%) than last year at this time and 322 billion cubic feet above the five-year average. Natural gas lost 9.2 cents to $3.44.

U.S. Existing Home Sales Fall in March - Resales of existing homes and condos fell 3% in March to a seasonally adjusted annual rate of 4.57 million, with distressed sales now accounting for half of all sales. Sales are down 7.1% in the past year, the National Association of Realtors said. First-time buyers accounted for 53% of buyers in March, the group said. First-time buyers can get federal and state tax credits versus existing homeowners (Note - if Congress would pass the Isakson bill with $15k for all would that boost sales?). Sales were weaker than the 4.63 million pace expected by economists.

Ken Lewis Pressured to Stay Silent - Bank of America CEO Ken Lewis said he was pressured by Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson not to talk about the problems surrounding the bank's deal to acquire Merrill Lynch, The Wall Street Journal reported Thursday. The newspaper, which obtained testimony Lewis gave before New York's attorney general in February, reported the bank CEO told prosecutors he thought Paulson and Bernanke were urging him to keep silent about the financial troubles gripping Merrill. Lewis' testimony was related to an investigation into bonuses paid to Merrill employees before the merger closed, the Journal said. Note - On one hand, Lewis is supposed to disclose problems, and on the other, the Fed Chairman and Treasury Sectreary are telling you if you say anything the financial markets will collapse. Talk about being put between a rock and a hard place.


Financial Reforms We Can All Agree On - By Charles W. Calomiris - The Wall Street Journal - "By now we all know how the subprime mortgage market, government policies that encouraged riskier mortgage lending, and overleveraging led to the current financial crisis. But what do we do now to lower the odds of a similar financial meltdown in the future?"

Stress Test Scores ‘C’ If Name Ends in ‘itigroup’ - By Mark Gilbert - Bloomberg - This is a bit of a funny little article. "Tomorrow, the U.S. authorities are scheduled to disclose the methodology for the stress tests that will gauge the creditworthiness of the 19 largest U.S. banks. Below are a few examples of the kinds of searching, penetrating questions the Treasury Department should ask. Some sections have point scores. Others will be judged more subjectively."

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