Week Feb 11 2011 – Weekly Recap & The Week Ahead
“If the models are telling you to sell, sell, sell, but only buyers are out there, don’t be a jerk. BUY!!!” — William Silber, Ph.D.
1. China hikes interest rates — China raised its key interest rates for the third time since October, as inflation remained above 4% for the third month in a row. The benchmark one-year lending rate will increase to 6.06% percent from 5.81%, effective 2/9/11. The one-year deposit rate will rise to 3% from 2.75%.
2. Treasury readies housing solutions — the Treasury is set to release a report today laying out three possible solutions for winding down Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), but won’t endorse any specific option. The decision to present the three solutions without backing any one in particular came from the White House, which hopes to jumpstart a discussion on the topic without locking President Obama into a single course of action. The report’s three scenarios are: 1) No government role in housing, except for existing agencies like the FHA; 2) An explicit government guarantee of mortgages only when the market is in trouble; and, 3) A government role in the housing market at all times, but not through government-sponsored entities.
3. Ford to cut debt — Ford (F) announced it will cut its debt by another $3B by redeeming all of its outstanding 6.5% cumulative convertible trust preferred securities on March 15.
4. U.S. consumer sentiment rises in February — A gauge of consumer sentiment rose in February, reaching the highest level since June, according to poll results released Friday by Thomson Reuters and the University of Michigan.
The gauge hit 75.1, up from a final January reading of 74.2.
5. Egypt’s President Mubarak steps down — A day after refusing to step down, Egypt’s President Hosni Mubarak has resigned, according to media reports Friday. Mubarak has delegated Egypt’s affairs to the army, the Wall Street Journal reported, citing Vice President Omar Suleiman.
The week ahead — Economic data from Econoday.com:
