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There's an interesting Bloomberg article from John M. Berry that argues that the bailout will actually generate a profit from the government. He calls it a massive carry trade. What's a carry trade? It's a trade where the cost of raising capital for an investment is lower than the return provides by the purchased assets. The difference is profit. In this case, the government is borrowing money from the public and foreign governments via Treasuries at 3-4% and purchasing assets that should yield 8-10%. Based on this, he predicts positive cash flow for the government and an overall gain. The $700 billion is invested capital, not lost money.
Read →Everbank raised the rates on its 3 month CD and 6 month CD and now has the top rates for each term according to the BestCashCow rate tables.
Read →The NY Times is reporting that Wachovia and Citi are in merger talks. Wachovia needs a buyer. It's stock is getting crushed and it's suffering from a bundle of bad mortgage loans.
Read →I just called WaMu and asked if they were still offering high rates after being sold to JP Morgan Chase. The news was good.
Read →It looks like the hammer finally fell. The Wall Street Journal and Bloomberg are reporting that the Fed has brokered a deal for JP Morgan to take over the bulk of WaMu's deposits, branches, and other operations. Of course, there is no mention of who is going to take the bad loans on WaMu's books.
Read →The rate on money market funds, not money market accounts, have spiked over the last couple of days due to the credit crisis.
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FDIC May Need $150 Billion to Pay for Rising Bank Failures
As the economic environment looks worse and worse for banks, many believe that the FDIC will need more money to continue insuring the bank deposits of failed institutions.
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US Household Debt Makes Any Bailout and Recovery Tough
The Paulson economic plan is designed to get banks lending again. The question is, to whom? Consumers are already saddled with record household debt and need time to work it down. And businesses are already sitting on records amount of... Read →
Unless You Own Berkshire Hathaway, You Are not Getting Warren Buffett's Deal on Goldman Sachs
Warren is getting a hell of a deal on Goldman. You aren't if you are buying Goldman on this news at 135.
Read →Washington Mutual (WaMu) has raised the rate on its online savings account from 3.75% APY to 4%. This is the top rate in the country according to the BestCashCow rate table.
Read →Many analysts and economists think that the US bank problems and bailout are going to weaken the dollar in at least the short to medium term. The Treasury has printed 1 trillion in new dollars over the last week. Combine that with the war in Iraq, growing entitlements, etc. and you have a lot of dollar bills circulating through the world.
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Manhattan Real Estate Brokers Say "Manhattan is Different" and they are right
but, not for the right reasons.
Read →Amboy Direct is offering a $50 bonus to open their eSavings Account. The account currently pays 3.25% APY.
Read →Nationwide bank is offering a $25 bonus to open a money market at the bank. The bank's current rate of 3.52% APY is competitive and the bank has a soundness rating of 4 stars according to Bauer Financial.
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