1. US Market Recap
- US markets were able to eke out two weeks of back-to-back gains:
- DOW down 122 points (-1.7%) to 7,278 (+0.8% WTD; -17.1% YTD)
- S&P 500 down 16 points (-2.0%) to 769 (+1.6% WTD; -14.9% YTD)
- NASDAQ down 26 points (-1.8%) to 1,457 (+1.8% WTD; -7.6% YTD)
- Policies:
- A public-private partnership to back private investors’ purchases of bad assets, with government support coming from the USD700b bailout fund; this would match private investors dollar for dollar and share any profits equally;
- Expansion of a recently launched Fed program that provides loans for investors to buy securities backed by consumer debt as a way to increase the availability of auto loans, student loans, and credit card debt; under Geithner’s plan for the toxic assets, that USD1 trillion program would be expanded to support purchases of toxic assets;
- Use of the FDIC, which insures bank deposits, to support purchases of toxic assets, tapping into this agency’s expertise in closing down failed banks and disposing of bad assets.
2) European Update
· RBS may have losses of £ 500m form loans to Cattles Plc.
· E.ON isn’t planning any large acquisitions over the next two years.
· Daimler will raise EUR 1.95bn (10% capital increase) selling shares to
· Société Générale bosses give up stock options.
· Deutsche Bank will likely appoint Rainer Neske as head of the PB unit .
· RWE is calling for subsidies form the German government to invest in the construction of environmentally friendly coal-fired power stations.
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