The market dodged a bullet yesterday doing what it does best when pushed sharply to the downside: Look for a life savor in the rumor mill. It eventually found one in the form of news of a possible bailout for bond insurer Ambac Financial Group. At this point it’s only a rumor, but it helped the market, with the Dow …
FDIC Is Beefing Up Staff
MarketWatch reports that the FDIC is hiring more bank examiners: The Federal Deposit Insurance Corp. is planning to beef up its division of resolutions and receiverships, which handles failed banks, by 40% this year. The division currently has 233 employees. Considering that only three banks failed last year, why do they need more examiners? For now, the FDIC is looking …
Muni Trouble
Bloomberg reports that Munis have their worst month since 2003 on Auction-Rate woes. Here are some highlights: U.S. municipal bonds are headed for their worst month in more than four years after collapsing demand for securities with rates set at periodic auctions sent debt costs for state taxpayers and hospitals as high as 20 percent. State and local government bonds …
Sunday Musings: Swallowing Money Market Losses
I have repeatedly warned that some of the biggest investors in toxic Subprime mortgages are money market funds, especially those boasting above average returns. Let’s be clear about this. Any investment, even a money market fund, which offers an above average return, has to also take an above average risk.Some firms will avoid passing on the losses to the investors …
The Perfect Storm
I read this excerpt from the Economist (sorry no link available), which said: The size of the banks’ bets is rising rapidly the world over. This is because potential returns have fallen as fast as markets have risen, so banks have had to bet more in order to continue generating huge profits. The present situation “is not dissimilar” to the …
No Load Fund/ETF Tracker updated through 2/28/2008
My latest No Load Fund/ETF Tracker has been posted at:http://www.successful-investment.com/newsletter-archive.phpA sharp correction to the downside turned a positive week into a negative one. Our Trend Tracking Index (TTI) for domestic funds/ETFs remains now +0.02% above its long-term trend line (red), which means we are in borderline territory. The international index dropped to -7.74% below its own trend line, keeping us …