Global banks face serious surcharges
The Financial Stability Board which governs global financial systems may be proposing a surcharge to be applied to the banks that are systemically important financial institutions (SIFIs), according to the Financial Times. This surcharge would hurt 4-5 of the largest European and U.S. banks but would benefit regional and second tier European and U.S. banks and Japanese banks. The goal is to avoid a future global financial crisis and acknowledge that some institutions are "too big to fail".
SEC seeking settlement with large CDO providers
In a further swipe at large banks, the SEC is currently in settlement talks with large providers of Collateralized Debt Obligations (CDOs) offered prior to the economic collapse. It is anticipated that failure to settle could lead to serious charges brought against both individuals and organizations. Firms believed to be in settlement talks include J.P. Morgan/Chase, Citigroup, Bank of America/Merrill Lynch, and Morgan Stanley, as reported by the Wall Street Journal.
Speaking of beating up on large organizations....
Congress held sessions with the CEOs of the five largest oil providers, making sure they each (the Congressmen) dramatically expressed their outrage over the price of gasoline and threatened to cut all tax breaks received by the oil companies. The Menendez bill currently being discussed in Congress raises taxes on only the top 5 oil companies and would provide $21 billion in revenues. The combined companies made $36 billion in profits in the first quarter of 2011, as reported by the Associated Press. They insist a tax increase will cost jobs.
Modest gains in market
The market rose modestly on Thursday closing at 12,695, according to the Associated Press. Oil remained below $100/barrel. Retail sales rose .5 % in April but really only .2% once oil was taken out of the equation. The French, German, and even Greek economy all posted gains in the first quarter. Markets in Asia are subdued on Friday.
Mortgage rates at low for the year
Mortgage rates are at their low for the year with a 30 year mortgage at 4.63%. This is still not as low as last November, according to the Associated Press, when rates were at a 40 year low of 4.17%. But weak sales are predicted to continue due to the large number of foreclosures and tight credit. 3.7 million homeowners are at risk of losing their homes.
Speaking of losing your shirt...
The Treasury is rumored to be anticipating the sale of GM stock in August once Q2 results are announced. The U.S. government currently owns 26.5% of GM. The stock sold for $33/share in the initial offering in November. It is currently at $31/share. The Treasury would currently lose $10.8 billion on the stock, according to the Associated Press.
But Better Valuations required
The Wall Street Journalreports that the Financial Accounting Standards Board (FASB) is tweaking its guidelines as part of a "convergence project" that will create greater similarities internationally. The most important changes are the definitions of "fair value" for risky illiquid securities.
Gas standards for vehicles to be increased
The Washington Postreports that the White House will be requiring car makers to increase standards for fuel to $62 mpg by 2025. Critics say the cost of cars will increase by $10,000. Environmentalists argue that those increases will only be $3,000 to $4,000.
Alligators and snakes take over casinos
The biggest problem for 17 of 19 casinos currently under water in Mississippi, according to Bloomberg,may not be repairing flood damage but getting rid of the alligators and snakes invading the casinos. The casinos bring in $13 million/month of tax revenues to the state...something the reptiles won't be able to make up.