Three More US Banks Fail
On Monday I thought I had been premature again with calling the top of the rally. For no good reason the markets had a strong up day. The FTSE again made an intraday high of 4500 on Wednesday, (now a double top) and then had a big down day on Thursday because the Standard & Poors had lowered the UK debt rating below AAA. The net result for the week was a gain of just 24 points.
In the US markets there are fears they may be next for a downgrade. (I am surprised the US has not already been downgraded). Three more banks were taken over this week, one in Florida and two in Illinois, bringing the total for bank failures this year in the US to 36.
The last week has also seen a considerable weakening of the US$ against many currencies and a corresponding sharp increase in the price of gold. Oil has posted modest gains.
The car makers saga is not getting any clearer. Just another week before crunch day for GM. The have now got the unions on side but it is unlikely that the bond holders will fall into line. Would you accept 225 shares of GM stock for every $1,000 owed to you? GM’s share price closed today at $1.43 So you would be accepting $321.75 for every $1,000 owed. Remember there are a lot of pension funds and small investors that hold these bonds. Not pretty.
The US markets are closed on Monday for Memorial Day.
Hi Bruce,
I was just reading about S & P this morning.
Everything is all very real when put into figures like the ones you have just quoted.
Enjoy the journey.
Mandy
Hi Bruce,
With news like that having a second stream of income is even more important you can not rely on the so called money experts to look after our hard earned cash.
Hi Bruce,
yes, it’s scary how the systems are crumbling left and right – the housing market was simply not sustainable and loans were given to people that over-borrows from the beginning for an overinflated home. It’s very sad to see how many people are loosing their homes now …
Thank you for adding cold, hard facts!
Svenja