- "Bernanke said the Fed was closely watching the slumping dollar, which hit a record low against the euro on Thursday, but added that he believed foreign investors still had confidence in the United States."
He also said that "I expect there will be some failures" among smaller banks. If I read it correctly, smaller banks will be allowed to go under, but the bigger ones will not, one way or another. So as if the smaller banks were not already having a hard enough time, the Fed is now saying that you're better off yanking your hard earned deposits from your local bank and plopping the cash down at poorly managed BAC, WB, C or some other subprime villain since besides the FDIC's USD100k you now have the Mighty Fed standing behind it.
Meanwhile, CNBC reports that mortgage rates continue to rise:
- "What people are realizing is that the interest-rate cuts haven't helped anybody but the banks," said Michael Cohn, chief investment strategist at Atlantis Asset Management. "They're taking these rate cuts and pocketing the money ... to shore up their own balance sheets."
(Not sure why the orange line's down right at the end - source is the same - but you get the idea.)
And on the other side of this wide spread...? Of course it's the good old, non-delinquent, borrower (again) that is also helping to shore up bank balance sheets.
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