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Money Watch: Weekly Wrap

Ben Bernanke has come under pressure lately. First, there has been criticism about his $600 billion bond buying plan, which has had, in its first couple of weeks, almost the exact opposite of its desired effect: rates are higher (the rate for a 30-year, fixed-rate mortgage averaged 4.39 percent last week, up from a record-low 4.17 percent the week before). Then, Republican lawmakers Bob Corker and Mike Pence proposed that instead of having two jobs, to promote both price stability and full employment (the so-called "dual mandate"), the Fed should forget about the job stuff and stick to inflation.

Bernanke was probably thinking, "quit your griping-didn't you see those inflation numbers last week?" In October, consumer prices were up 1.2 percent from a year ago. Excluding food and energy, prices were up only 0.6 percent - the smallest increase since at least 1957. The city average of food prices was up 1.4 percent from a year earlier, less than half the average for the previous 50 years. Morgan Stanley analysts say that although commodity prices are soaring, the direct impact to retail prices is likely to be only 2-3 percent.

Actions across various ponds flared up early in the week, only to subside some by Friday. Ireland will likely get another bailout to the tune of 80 billion euros ($110 billion), while China, Hong Kong and South Korea all took steps to battle rising inflation. Overall, markets barely budged on the week, which seemed like a win to most.

  • DJIA: 11,203, up .1% on week, up 7.4% YTD
  • S&P 500: 1199, up .04% on week, up 7.5% YTD
  • NASDAQ: 2518, down .04% on week, up 10.9% YTD
  • December Crude Oil: $81.51, down 3.9% on week
  • December Gold: $1352.30, down 1% on week
Total bank failures for 2010 = 149 (3 new bank failures over weekend)


  1. GM sold nearly $15.8B worth of shares, or $18B if the underwriters exercised their options to sell more stock, plus $4.35B of preferred stock. Total offering could be worth more than $23B
  2. The initial price was $33 and the stock closed at $34.26 on Friday
  3. Treasury pocketed about $14B of its $50B investment and reduced ownership from 61% to 26%
  4. To break even, Treasury needs to sell remaining shares at an average price of $53
  5. GM employment is down to 209,000, from 324,000 six years ago
IN THE WEEK AHEAD: There will be a slew of reports in a holiday-shortened week. October sales of existing and new homes, along with the Case-Shiller home-price indexes, will provide an update on the nation's sagging housing market; the government will issue its second estimate of third-quarter gross domestic product; the Fed will release its minutes from the last FOMC meeting; and October personal income and spending, durable goods and the final reading for the Reuters/University of Michigan consumer sentiment index for November will round out of the data dump.

Also of note: the Financial Stability Oversight Council, created by the Dodd-Frank financial law, is scheduled to meet Tues. members could increase scrutiny of lending and foreclosure practices.

Mon 11/22:

Tues 11/23:

  • 8:30 GDP (2nd estimate expected to rise to 2.4% from 2%)
  • 10:00 Existing Home Sales
  • 2:00 FOMC Minutes

Weds 11/24:

  • 7:00 MBA Purchase Applications
  • 8:30 Weekly Jobless Claims
  • 8:30 Durable Goods Orders
  • 8:30 Personal Income and Spending
  • 9:55 Consumer Sentiment
  • 10:00 New Home Sales

Thurs 11/25: ALL US Markets closed for Thanksgiving

Fri 11/26: NYSE Early close (1pm)