Fed Kroszner on the wires
Distresssed borrowers need timely relief. Says that the financial industry should go farther to develop prudent loan modification progrms. Banks should work with those homeowners who are most at risk.
Analysis: The full court press is on to market the bailout plans of the Treasury, but is there any substance or solution to the problems. If people do not qualify now or cannot make payments even at more favorable terms, there may be more bark than bite.
It is in all’s best interest to try anything howvever….
German Finance Minister on wires
Saying turbulance may hurt global growth and also that sharp dollar decline cannot be ruled out.
EURUSD very volatile in active trading
The EURUSD sold off sharply reaching a level of 1.4675. It has since bounced back up to the lows level from Wednesday (1.4710). So far, the level has held. A break of the low will target the channel support at 1.4656. A move above 1.4610 would have additional resistance at 1.4621 and better resistance at 1.4633 (old trendline).
Click on chart to expand.
SNB Hildebrand on wires
Says Central banks should use interest rates to react to crisis only to extent it hits the economy. Says situation on global credit markets is deteriorating.
Dollar rises against all currencies
According to Reuters:
The USD index is on track for the biggest gain since September of 2006 Up 1.2% on the week.
So, this is good news for the Fed and Treasury as talk of lower rates is NOT hurting the dollar. Oil is coming down. Gold is coming down. Is the dollar ok?
GBPUSD falls sharply
No real news… Markets are very choppy. GBPUSD is below the low from Wednesday.
NAPM-Milwaukee index slipped to 60.0 from 63.0
Still at a high level.
Treasury Secretary Paulson is trying to find some solution to mortgage issues
Treasury Secretary Paulson is out visiting with Banks trying to find a solution for the mortgage reset problems. This corresponds with the NY Fed report on mortgage diliquencies showing that 12% of mortgages were diliquent.
Clearly, the Fed and now the US Treasury are very concerned about the financial markets and implications for the economy. It seems that the Treasury is trying to convince the Banks that the burden should be on them to take the hit, keep the sub prime mortgage holders in their houses,as foreclosing is not a solutiion at this point in time for the home owner nor the banks.
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