The Federal Reserve has embarked on a controversial new program of buying $600 billion of U.S. Treasuries to keep interest rates low and spur the economy.

There is some disagreement among some members of the Fed concerning the risks of this new program. Some fear that the economy is growing too rapidly, fueling unwanted levels of inflation, as reported by CNNMoney.

Continue reading Fed Members Differ on Economic Outlook

Fed Members Differ on Economic Outlook originally appeared on BloggingStocks on Wed, 05 Jan 2011 12:00:00 EST. Please see our terms for use of feeds.

Saint Louis Federal Reserve president, James Bullard, said the Fed may need to buy more treasuries to pump more money into the economy.

Here we are two years down the road and nothing much has changed. The same old tactics are used to try to boost the economy, while unemployment remains high. In fact, initial claims for unemployment jumped to 500,000 this past week.

Things are not working out as planned. Why is that?

Continue reading Will Buying More Treasuries Boost the Economy?

Will Buying More Treasuries Boost the Economy? originally appeared on BloggingStocks on Fri, 20 Aug 2010 11:00:00 EST. Please see our terms for use of feeds.

A new fear gripped the market Friday. Originally, gross domestic product -- the broadest measure of economic activity -- was reported to have grown 2.4% in the second quarter. Now, many are expecting the Department of Commerce will revise this figure down next week. According to a Bloomberg survey, revised GDP will have lost one point to a more anemic 1.4% growth.

The expectation of the lower GDP caused an accelerated rush to buy Treasuries. On the futures market, the 30 year bond was up 15 ticks to 134-26. The Dow Jones Industrial average continued its decline, falling yet another 90 points in early morning trade.

Continue reading Bonds Up, Stocks Down on Renewed Economic Fears

Bonds Up, Stocks Down on Renewed Economic Fears originally appeared on BloggingStocks on Fri, 20 Aug 2010 10:30:00 EST. Please see our terms for use of feeds.

Option volume was relatively quiet in Citigroup Inc. (C) on Tuesday, with call and put activity both falling short of the expected daily levels. However, a noteworthy volatility play crossed the tape around midday, with one long-term speculator betting on a significant price swing from the bailed-out bank.

Shortly after noon, a block of 10,000 March 2011 4-strike puts traded at the ask price, suggesting they were purchased, while a matching block of 10,000 March 2011 5-strike calls changed hands at the ask price. Open interest at both strikes swelled overnight by more than 10,000 contracts apiece, confirming these were all freshly opened positions.

Continue reading Citigroup Singled Out for a Long-Term Strangle

Citigroup Singled Out for a Long-Term Strangle originally appeared on BloggingStocks on Wed, 11 Aug 2010 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Drop in Treasury Bond Yields Forecasts a Bear Market for Stocks

Drop in Treasury Bond Yields Forecasts a Bear Market for Stocks originally appeared on BloggingStocks on Wed, 11 Aug 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: DJIA 11,000 Yo-Yo (AA, COP, PALM, MIPI, INTC, JPM)

Closing Bell: DJIA 11,000 Yo-Yo (AA, COP, PALM, MIPI, INTC, JPM) originally appeared on BloggingStocks on Tue, 13 Apr 2010 16:20:00 EST. Please see our terms for use of feeds.

They call themselves bond vigilantes. They are investors who are demanding higher yields at U.S. Treasury auctions.

Treasury auctions were going along quite smoothly until last week. Inflation is low, the housing market is in a slump and unemployment is at near record levels. All of this mixture is the stuff that low interest rates are made of.

Last week, the Greek debt crisis brought the problem of too much debt front and center. Now, investors are looking at the U.S. and see a mountain of fiscal debt that needs financing. The huge U.S. debt, $1.7 trillion, is making investors reappraise the yields on U.S. treasuries.

Continue reading Investors Demand Higher Yields on U.S. Treasuries

Investors Demand Higher Yields on U.S. Treasuries originally appeared on BloggingStocks on Thu, 01 Apr 2010 10:50:00 EST. Please see our terms for use of feeds.

American International Group (AIG) has gone back to the feds. The insurer pulled another $2.2 billion from its Treasury Department facility to support the property-casualty business units that will comprise the restructured company. AIG used the cash from Treasury to redeem some securities held by its insurance subsidiaries to increase liquidity and address rating agency considerations.

According to David Havens, managing director of credit trading at Nomura Securities (NMR), "AIG still needs to be cognizant of where the rating agencies stand on their solvency." He adds, in Bloomberg News, that the funds may have been sought after the company got "feedback from the rating agencies that the regulatory capital within the operating companies doesn't muster up."

Continue reading AIG to Hit Feds for Another $2 Billion

AIG to Hit Feds for Another $2 Billion originally appeared on BloggingStocks on Wed, 17 Mar 2010 10:20:00 EST. Please see our terms for use of feeds.

So, this sounds like a great idea, right? The people of our city are unemployed, leading to less cash and less spending -- so let's print our own money! As those gentlemen in the now-defunct Guinness ads shrieked: Brilliant! In Detroit, a group of businesses are now accepting what is called Detroit Cheer. With this local currency you can buy a pizza, receive some electrical services, and day care for your pooch. The Cheer can also be exchanged for cash at local bars. Sounds like it would be illegal, right? Well, the article notes that it isn't -- as long as the printed currency doesn't look too much like the dollar it is perfectly legal. I don't think anyone is going to confuse the Detroit Cheer with the American Dollar.

Continue reading Is It Time to Print Your Own Money?

Is It Time to Print Your Own Money? originally appeared on BloggingStocks on Tue, 16 Feb 2010 17:20:00 EST. Please see our terms for use of feeds.

Continue reading Fed Profit Tops $50 Billion

Fed Profit Tops $50 Billion originally appeared on BloggingStocks on Wed, 13 Jan 2010 12:00:00 EST. Please see our terms for use of feeds.

The bailouts of late 2008 and 2009 have cost the American taxpayers $61 billion, according to the Treasury Department, but the banks aren't to blame this time. The auto manufacturer bailout, which includes Chrysler and General Motors (GRM), has cost the country more than $30 billion, with American International Group (AIG) consuming another $30 billion.

Meanwhile, Bank of America (BAC) has already made good with the government, and several banks -- such as Capital One (COF), JP Morgan Chase (JPM) and TCF Financial (TCB) -- only have to clean up situations regarding the warrants they've issued. And interestingly, the losses from the bailouts on AIG and auto manufacturers are being offset by profits from the bank bailouts, which could generate additional funds of up to $19.5 billion.

Continue reading Banks subsidizing auto TARP, extra money could be spent

Banks subsidizing auto TARP, extra money could be spent originally appeared on BloggingStocks on Thu, 10 Dec 2009 09:00:00 EST. Please see our terms for use of feeds.

Seven more banks failed late Friday, including institutions in Illinois, Minnesota, Wisconsin, Georgia, and three in Florida. The FDIC posted the liabilities it would assume and which banks would take on customers from the shutter institutions in detail on its website.

According to MarketWatch, "CreditSights, which tracks the dismal data, predicts that in the current cycle, from 2008 through 2011, as many as 1,100 banks will fail. That would wipe out 13.4% of all U.S. banks, representing 7% of U.S. banking assets."

Continue reading Bank failures hit 106 for 2009

Bank failures hit 106 for 2009 originally appeared on BloggingStocks on Sat, 24 Oct 2009 11:20:00 EST. Please see our terms for use of feeds.

The U.S. Treasury and Congress are putting pressure on the Fed to disclose its governance policies.

Almost three months ago, on June 17, the Obama administration proposed a regulatory overhaul including a "comprehensive review of the Fed's ability to accomplish its existing and proposed functions."

There is some confusion as to why the Treasury is undertaking this task. The Fed was created by Congress to be independent of the executive branch and Congress.

Continue reading The Fed under fire! Geithner wants to study Fed governance

The Fed under fire! Geithner wants to study Fed governance originally appeared on BloggingStocks on Wed, 23 Sep 2009 13:20:00 EST. Please see our terms for use of feeds.

Continue reading U.S. budget deficit unexpectedly narrowed to $111.4 billion in August

U.S. budget deficit unexpectedly narrowed to $111.4 billion in August originally appeared on BloggingStocks on Mon, 14 Sep 2009 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: The never ending rally (ABX, GE, PALM, VVUS)

Closing Bell: The never ending rally (ABX, GE, PALM, VVUS) originally appeared on BloggingStocks on Wed, 09 Sep 2009 16:00:00 EST. Please see our terms for use of feeds.

Two countries, the United States and China, are playing financial poker, with the U.S. Treasury and the Federal Reserve on one side and China on the other.

On one side, wearing a visor and dark glasses, we have Ben Bernanke of the U.S. Federal Reserve, who must fund our $1.8 trillion deficit. So the U.S. Treasury and the Fed are issuing record amounts of treasury securities. Last week alone the Treasury issued $200 billion of debt securities. The results of at least two auctions were a bit shaky.

Continue reading China takes a pass on U.S. Treasuries

China takes a pass on U.S. Treasuries originally appeared on BloggingStocks on Sun, 02 Aug 2009 13:30:00 EST. Please see our terms for use of feeds.

Did you know that we have a watchdog in charge of overseeing the TARP program? Yes, we have such a person and his name is Neil Barofsky.

Today the U.S. Treasury and the Federal Reserve said that the group of financial programs undertaken have had a significant impact on our financial markets.

That may be true, but Mr. Barofsky reported that the sum total of these programs is exposing federal agencies to a staggering $23.7 trillion.

Continue reading Treasury clashes with TARP watchdog over $23.7 trillion in proposed expenditures

Treasury clashes with TARP watchdog over $23.7 trillion in proposed expenditures originally appeared on BloggingStocks on Tue, 21 Jul 2009 12:20:00 EST. Please see our terms for use of feeds.

Here is today's quiz. If you were given $1,000,000 to spend each day, how many days would it take you to spend $12.2 trillion dollars? You are probably wondering where the number $12.2 trillion came from? Well, this is the amount of money the government has committed for economic recovery.

Some of the monies can be accounted for but its still a big mystery where the rest went. So far we know this:

Continue reading $12.9 trillion for economic recovery. Where is it?

$12.9 trillion for economic recovery. Where is it? originally appeared on BloggingStocks on Fri, 19 Jun 2009 18:00:00 EST. Please see our terms for use of feeds.

U.S. long-term interest rates hit a high Wednesday with the yield on 10-year notes at 4%. Yields jumped 4 basis points, the biggest jump since 2003. This was up from 3.6% just one week ago. Mortgage lenders use the benchmark 10-year note to price their mortgage rates.

Four percent is the magic number for traders. When the yield reached 4%, traders moved in to buy. The higher rate also took its toll on the stock market, with the Dow down 24.04 to 8739.02.

Continue reading Benchmark 10-year note trades at a new high, depressing markets

Benchmark 10-year note trades at a new high, depressing markets originally appeared on BloggingStocks on Thu, 11 Jun 2009 10:30:00 EST. Please see our terms for use of feeds.

However, Paul Krugman, the liberal Noble Prize winner, wrote an editorial in The New York Times attacking the plan as "Cash for Trash." Subsequently, Newt Gingrich, the former Republican Speaker of the House, announced on Fox News that he agreed with Professor Krugman. When senior figures on both left and right agree, it may be wise to look past the euphoria.

Continue reading The Geithner Private-Public Partnership: The cure may be worse than the disease!

The Geithner Private-Public Partnership: The cure may be worse than the disease! originally appeared on BloggingStocks on Tue, 24 Mar 2009 15:20:00 EST. Please see our terms for use of feeds.