The “PLAN” has been tweaked and is going to a vote today in the House. It would provide an initial $250 Billion with another $100 Billion to follow with the President’s blessing, and more money after that if needed. If approved it will ease things in the financial amrkets, but do not expect this to immediatly solve the issues with the housing market.
Wachovia was the next on the list to fall, but Citigroup purchased them and agreed to absorb as much as $42 Billion in losses. The FDIC says Wachovia did not fail, but will take on any losses over and above the $42 billion Citi has agreed to take. Core PCE was higher than the Fed would have liked and it checked in at a year over year rate of 2.6%, the highest seen since 1995 but the market did not really react as investors wait to see if the Plan gets put in place.
Some Interesting Statistics.
The price of oil jumped $16.37 a barrel to $120.92 last Monday, its largest 1-day dollar increase ever. Ten years ago to the day (9/22/98), the price of a barrel of oil was $15.73. (source: AP, DOE)
14 out of every 15 mortgages in the USA as of 8/31/08 are current with regard to their monthly payment of principal and interest. (source: Wall Street Journal)
From 12/31/02 to 6/30/08, the amount of mortgage debt (including home equity loans) held by Americans increased by 76% to 10.6 trillion, an increase of 4.6 trillion. (source: Federal Reserve)
35% of all American households spend at least 30% of their pre-tax income on housing. (source: Joint Center for Housing Studies at Harvard University)