Clunkers Almost Paid For

Clunkers Almost Paid For

http://www.msnbc.msn.com/id/32877454/ns/business-autos/

The government has been working overtime to compensate dealers for the discounts offered under the “cash for clunkers” program. As per information put out by the transportation secretary, 70% of payments to dealers are complete and the balance should be done by the end of this month.
It is good that the government is hurrying through this reimbursement. There were murmurs of unhappiness being expressed by some dealers in the past few weeks, who felt that the government was taking too long to complete the process.
Speed and urgency indicate the seriousness and good intent of the government in successfully bringing to a close a program which has been immensely successful. This program has brought back spring into the automakers lives after a long, prolonged, stormy and very cold winter.

Fed Official Says too Early to Hike Interest Rates

Fed Official Says too Early to Hike Interest Rates

http://www.reuters.com/article/ousiv/idUSTRE57P4GL20090826

Federal Reserve Bank of Atlanta President Dennis Lockhart has ruled out the possibility of hiking interest rates in the near future. Although the US economy is in early stages of a recovery, it is premature to think of an upward rise in the interest rates that are currently pegged between zero and 25 basis points. The fed has poured billions of dollars into the country’s financial system in a bid to save several big banks and institutions besides reducing the interest rates and its balance sheet has more than doubled to around $2 trillion. As the demand for emergency lending eases, the Fed’s balance sheet is likely to improve, according to Lockhart. The Fed cannot afford to keep its stimulative policies in place for long and will have to take some remedial action soon.

Failed US Banks Evince Foreign Interest

Failed US Banks Evince Foreign Interest

http://online.wsj.com/article/SB125107229558052583.html?mod=googlenews_wsj

Several foreign banks have evinced keen interest in acquiring the assets of the failed US banks and the sale of the operations of the Texas based Guaranty Bank to BBVA SA is the first such successful transaction. Several other foreign banks having a US presence such as BNP Paribas SA, Toronto Dominion Bank, UnionBankCal Corp and Rabo Bank have expressed their willingness to gobble up the failed US banks. The continued increase in the number of bank failures and the consequent pressure on FDIC’s funds has made it look around for additional capital to smoothen the impact. In the past two years 106 banks have failed since the onset of the financial crisis. Foreign banks having a US presence have the advantage of having the resources and the staff to takeover and run the failed banks.

Treasury Thinking About Investing In Life Insurance Companies

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/08/AR2009040803958.html

The Treasury Department is seriously considering aid to insurance companies. Currently it is evaluating requests by number of insurers for funds from the Troubled Assets Relief Program.

Last year Congress had authorized the Treasury to buy stakes in life insurers. However, the department has been slow in getting around to this. One of the reasons for this is that the life insurers are regulated by the states and not by the federal government.

Last year the Treasury announced that only those insurers who owned banks or thrifts would qualify for TARP funds. This was to ensure that the federal government had atleast some control over the insurers who receive TARP funds.

TARP money can save many of these insurance companies and thus allow them to play a positive role in rebuilding the economy.

Credit Card Blues

Credit Card Blues

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032100071.html?wpisrc=newsletter

Almost all of us have been caught in the web of deceptive credit card practices. While we all sign on to what appear like reasonable rates, the smallest of delays or errors on our part can cause the rate to spike to something totally unaffordable. What makes these practices particularly despicable is that banks actually base their lower initial rates on mistakes that you and I are going to make later. So in effect they encourage them!

In light of the deepening crisis, the government has sought to change the way the credit card industry functions. These changes will actually help consumers and the industry alike since they will help ease the credit crisis. But unfortunately most of the regulations do not come into effect till 2010, which will make them too late to make any positive impact on the current downturn.

Solution To Banking Crisis

Solution To Banking Crisis

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/09/AR2009030902627.html?wpisrc=newsletter

Sheila Bair, the chairperson of the FDIC has proposed setting up a number of investment funds which will buy distressed assets primarily mortgage loans, from banks at a discount and will then try to sell them at a profit. This will have the advantage of ridding the banks of their toxic assets and leaving them with clean balance sheets. The banks will then be able to raise fresh capital from investors. The problem, of course is that the banks will have to take losses when selling their assets to these funds.

I think the plan is good. Apart from restoring the faith of private investors in the banks, this will also help the housing market to stabilize by defining a bottom for it. The question is – how many banks will be willing to sell their assets at a loss?

America’s Youth Stay Out Of Health Cover

http://www.nytimes.com/2009/02/18/nyregion/18insure.html?_r=1&em

America’s uninsured young adults are turning out to be a major concern. Caught between high priced urban living and low paying jobs, a good health insurance is a luxury today that many cannot afford. Many have thus resorted to internet diagnoses, self-medication and trading prescriptions, all of which is risky and dangerous.

Young adults form the largest part of the country’s uninsured group. In 2007 about 13.2 million of them were without health cover. With job cuts and lack of adequate cover, the need for health coverage requires immediate attention.

As a measure to offer health insurance privileges, many states have allowed adult children to access their parents’ coverage. They can claim dependency up to the age of 29.

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