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The Impact of FED Rate Decision on US Finance

admin — Thu, 24 Sep 2009 04:36:03 +0000

The Bank of America Corp. (BAC) on this Tuesday unveiled a revamp of its checking-account options and services “that will help customers avoid excessive overdraft fess and better manage their finances.” Its shares are up 0.5% to $17.70.

Most of the US financial shares traded lower on Wednesday ahead of the Federal Reserve’s expected outlook on the economy and its plans for monetary policy later in the day. Federal Reserve officials are trying their best to stay out of the limelight this week out of fear that any steps they might take could be construed as tightening policy. According to the analyst point of view on Wednesday, the Financial Select Sector SPDR ETF (XLF) dipped 0.4% to $15.27. Most financial stocks on the Standard & Poor’s 500 traded lower, but American International Group’s (AIG) shares were up 1.3% to $46.38.

On the other hand in the US, two of the nation’s largest banks have eased controversial overdraft rules for customers as the financial-services industry faces criticism over charging lucrative fees to boost sagging profits in the recession. In Europe, the European Commission on Wednesday cleared asset management company BlackRock Inc. (BLK) to buy Barclays Global Investors from U.K. bank Barclays PLC (BCS). BlackRock shares climbed 4.5% to $217.60.

On the political front, the US Treasury Secretary Timothy Geithner on Wednesday defended the department’s proposal to create a Consumer Financial Protection Agency before a House of Representatives committee, saying it is needed to supervise banks as well as write rules for mortgages and credit cards.

So, these all things are clearly showing that the US is improving slightly so time is demanding some more efforts n order to support the US financial situation.

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Fed Chairman Thinks Recession is Over!

admin — Wed, 16 Sep 2009 03:35:57 +0000

Federal Reserve Chairman Ben Bernanke said it more emphatically that: “We are in a recovery.” The wall street journal reports that Bernanke said today that he thinks that the” recession is very likely over at this point”. He was saying from a technical standpoint, his outlook is hardly bright. The economy, he said, is likely to grow moderately in 2010, leading to little improvement in the job market. So, these all things are indicating towards a strong financial recovery and now the US economy is slightly moving towards the stability.

Bernanke also added in his speech that it’s still going to feel like a very weak economy because credit conditions remain tight and a decline in the unemployment rate will probably only happen gradually, the WSJ wrote.

If that’s the case, is the recession really over?

Technically, economists expect the gross domestic product to expand by about 3 percent this quarter, which would halt the slide. But if unemployment continues to rise, as it is likely to do, should we be defining the recession in such narrow terms?

Now, we can hope the best that this long recession has been ended which was lingering and the recovery of it will become the cause of the US financial and economical growth. President Obama and his administrations are doing their job as the best as they can. So, I am very hope full that with continues efforts President Obama will get his goal of life and lead our country on the way of success.

Financial Crisis Ruining the life of People in the US

admin — Mon, 07 Sep 2009 05:16:25 +0000

We have to talk about the financial crisis in terms of what happens to people and what happens to other industries, It would be tragic to respond to a sub-prime crisis with sub-prime policies, When we ask the question that when the financial crisis will be finished then no nobody knows the answer another question rises which is very much important that have we learned nothing from the financial crisis of the past two years? Very little, it appears. Optimists say the markets are up and economic recovery is upon us. Bodies such as the Organization for Economic Co-operation and Development are revising up their forecasts for world growth this year and next and assuming we are out of the woods. The investment bankers are out there making money again, popping the champagne corks and telling themselves how clever they are – after all, they have managed to pass a good proportion of their huge losses on to us, the taxpayers, and are sitting at the roulette table again.

There is a danger that in spite of all the talk among the G20 finance ministers at their weekend summit about the need to do something about bankers’ bonuses and banks’ capital ratios, the drive to reform could fade as the economic crisis recedes. This financial crisis is ruining the life of U.S people so, government have to take some quick steps for this and everyone is looking worried that when this situation will be gone off! We have to change the current system and make it work for us. Our policymakers seem too tired to do much about it. But failure to do so will leave the clock ticking down towards the next crisis.

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Obama to Nominate Bernanke to 2nd Term at Fed

admin — Tue, 25 Aug 2009 09:42:56 +0000

President Obama on Tuesday will nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve; administration officials said this will be surely a great success of the Ben S. Bernanke. Mr. Bernanke, a Republican who was appointed by President George W. Bush almost four years ago and who had briefly served as chairman of Mr. Bush’s Council of Economic Advisers. Now President Obama is putting again responsibilities on Bernanke’s shoulders to take out country form the economical crunch and he will announce his decision, with Mr. Bernanke at his side, at 9 a.m. “The president thinks that Ben’s done a great job as Fed chairman, that he has helped the economy through one of the worst experiences since the Great Depression and that he has essentially been pulling the economy back from the brink of what would have been the second Great Depression,” the White House chief of staff, Rahm Emanuel, said Monday night.

Mr. Obama will announce his decision, with Mr. Bernanke at his side, at 9 a.m. at an appearance at Oak Bluffs School on Martha’s Vineyard, where the Obama family is vacationing this week. The first challenge that he has to face is the housing sector that has to be improved. Bernanke’s comments and the housing news sent Standard & Poor’s 500-stock index up 1.9 percent to a new high this year. The US and global economy “appear to be leveling out”, Bernanke told an audience of some of the world’s leading economists and central bankers, and “prospects for a return to growth in the near term appear good.” He warned, however, that the recovery is “likely to be relatively slow at first,” with unemployment declining only gradually. So, these all issues should be sort out in order to improve our countries economical situation!

Cash for Clunkers Extended for 18 hours!

admin — Tue, 25 Aug 2009 06:55:23 +0000

The most popular Government program cash for clunkers has extended by 18 hours. The deadline for car dealers to file applications for rebates under the “cash for clunkers” car scrappage scheme, after heavy demand brought down a computer system processing the deals. The extension of 18 hours was made because it was difficult to handle this burden of applications. This program was $1billion dollar program but after the popularity of this program, congress understand the importance of this program and then Congress rushed to push through an additional $2 billion before leaving for its summer recess, in anticipation that the money would last until Labor Day, but that prediction was way off, as well.

Watch the video “Auto Dealer Struggles to Get Clunkers Cash”

Droves of prospective buyers who called today to ask whether they still had time to make a deal had to be turned away, several dealers in the region said “Some people are disappointed and some are happy,”. The clunkers, including a black 1991 Ford F250 truck with 98,000 miles on it, were bound for a junkyard, where their motors would be destroyed with sodium silicate, or liquid glass. So, According to this deal, buyers who trade in old vehicles for those with lower fuel consumption receive a rebate of either $3,500 or $4,500.

The incentives were intended to benefit Detroit’s three hard-pressed car makers, Ford Motor, Chrysler and General Motors. However, their Asian rivals have emerged as the main winners. Now, this scheme is going to end after getting huge success and popularity from car dealers but still they are facing problems which should have to be settling down!

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Decrease in Recession causes the US economy Stop Shrinking!

admin — Mon, 24 Aug 2009 04:45:50 +0000

After some very strong and positive efforts form the President Obama and his administration, the US is now slowly gaining some rise in their economy. So, we can say that the recession in the US is going to end after a long time; however, a gauge of current conditions showed the economy steadied last month.

The US economic data such as industrial production, housing and car sales in recent weeks have indicated the economy is at a turning point and may be emerging from the recession. This turning point will help the US to lift again in the market and start gaining the economic rise! The economy in this month will probably grow at the rate of 3.2% in this quarter which is very good rise. So, this is a very positive change and might be the indication of ending the longest US recession which really rattles the US badly and gave a heavy lost to the US economy. So, even if we’re out of recession, this is not going to be so easy for a period of time, perhaps another three to six months or even more, before we move into robust growth. After this economical change it might be the indication of positive which was already given by the President Obama and this will help a lot to take US again on the top!

Watch the video “Recession Worst May Be Over”

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Obama and the Change in Mortgage Bailout!

admin — Wed, 19 Aug 2009 05:02:08 +0000

The US mortgage applications fell last week, reflecting a drop in demand for home refinancing loans as interest rates soared to their highest levels since June, data from an industry group showed on Wednesday. As we know that the US trying to get rid of the current worst economical situation but they are still struggling with the major disaster was the loan rates on homes were raised high by the banks. This rise in home loans laid a very bad impression on the people in the US. Most of the people get homeless and now the situation is that the economically US facing their life’s worst phase and this situation affecting country badly.

After Fed announcement of no change in rates the World stock markets shot higher Thursday, after the US Federal Reserve said the world’s largest economy appeared to be “leveling out” from its worst ever recession. “We have more and more confirmation the US recession is ending and investors are currently buying into this,” said John Mar, co-head of sales trading, Daiwa Securities SMBC Co. in Hong Kong.

So, these rapid changes are affecting many sectors but the major thing is to save the industry specially the mortgage industry. As president Obama has promised with their nation that he and his administration will bring the change in the country and we are waiting for that change because the change in Stocks, economical destabilization and applications for loans to buy homes, an early indicator of sales, rose slightly and affecting economically.

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A Dark Friday

admin — Tue, 18 Aug 2009 05:29:50 +0000

In the US market this Friday proven to be a very gloomy, bad and worst Friday, the possibility that gloomy consumers could cut their spending further sent markets tumbling on Friday. Markets collapsed on Friday following an unexpected fall in the U.S. consumer confidence index. The index fell early August 63.2 from 66.0 in July according to media reports on Friday of the Reuters/University of Michigan. The reading is markedly lower than the 69.0 economists were expecting. Consumers are still burdened with increasing job losses and rising debts.

There are some industries in the U.S who suffered badly with the collapse of the US market on this Friday. The Dow Jones is one of them and their Industrial lost was 77 points on this Friday, and they closed at 9,321, while the NASDAQ was down 24 points to 1,986 and the S&P 500 dropped nine points to 1, 004.It’s a big lost and a slump in the market where 23 of the 39 stocks in the index lost ground Friday, while 15 finished up and one was unchanged. First Franklin Corp. finished up more than 11 percent, on no news, while penny stock Peoples Community Bancorp, which was delisted from NASDAQ after it was seized by the feds several weeks ago, lost more than 83 percent. So, after this entire market slump Obama and his administration must have to think that the economical collapse is rattling their economy and every sector badly and getting the US weaker day by day!

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Colonial Bank now a part of BB&T Family

admin — Tue, 18 Aug 2009 05:11:41 +0000

It’s the first time that a bank in Alabama got under crisis and crunch since the early 1990s.The workers at the Colonial Bank, which is now a part of BB&T family, say it’s business as usual at the branch off Carter Hill Road. BB&T still looks like Colonial Bank; BB&T is slowly putting its name on the building. Colonial has been badly battered by the credit crisis, as higher charge-offs and rising foreclosures in the bank’s Florida construction-loan portfolio continue to strain its balance sheet. Colonial Bank is facing this decade’s worst problem for their bank. The Bank of America has also sue colonial bank for 1 $billion dollar in cash loans and cash. Still they are struggling to gain their momentum.

Signs adorn doors and windows welcoming Colonial Bank clients to the new BB&T family. Many customers say news of Colonial’s downfall didn’t worry them. “It’s like another bank that’s purchasing a bank…just right now it’s at a discount,” says Montgomery resident, Johnnie Kimbrough. But Kimbrough says that. “You always know something like this is possible. It’s very surprising when it does happen though.”

But as leaders work out the nuts and bolts of the take over at Colonial’s corporate headquarters in Montgomery, Andrew Gray with the FDIC says customers should keep banking as normal. “Over the weekend they can use their debit cards, their ATM cards, they can write checks.” While the FDIC typically insures individual accounts which are up to $250, 000. So, “Both the insured and the uninsured are protected. No depositor lost a penny in this case.”

So, the rapid change in economical situation was just because of the sinking of the banking sector. The instability and the failure if the banking sector has become the one of the main reason of the current economical disaster!

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Home Prices Slump a Record 15.6 Percent

admin — Thu, 13 Aug 2009 09:58:59 +0000

Median home prices fell down to a record of 15.6% during the three months ended June 30, compared to the same period in 2008, according to an industry report. The National Association of Realtors said on Wednesday that home prices continue to drop in more than 80 percent of urban areas in a recent survey. The NAR said, the median price of an existing single-family home dropped to $174,100 or 15.6 percent, the most in records dating to 1979. However, the good thing in the survey reported by Association that median home price rose 4% compared to the first quarter of 2009 — to $174,100 from $167,300.

The increased median price is not so surprising because it was the seasonal selling time which resulted in higher value. The major aspect which is certain behind the declined prices exceptional to this season selling is the worst economy decline. Lawrence Yun said, “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy”. This economy down fall not only affected a single area but its impact was wider and remained in widening its impact so far. However, the some of the decline can be traced to an increase in the percentage of foreclosures and short sales. They accounted for 36% of all transactions during the quarter…read more.

Watch the video “Home Prices, Historical Data Chart – Glenn Beck explains the housing bubble, why prices must fall”

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