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March 16th, 2010
04:23 PM ET

Financial Dispatch: Fed holds the line

Michael Jackson, who died last year, left behind dozens of unreleased songs.

Michael Jackson, who died last year, left behind dozens of unreleased songs.

Andrew Torgan
CNN Financial News Producer

The Federal Reserve today held its key interest rate steady at near 0% and said rates should stay this low for the foreseeable future.

Central bank policymakers repeated their prediction that economic conditions are likely to result in “exceptionally low levels of the federal funds rate for an extended period.” That promise of an easy-money policy has been in place since March 2009.

It was not a unanimous decision, however, as Kansas City Fed President Thomas Hoenig voted against keeping this language in place for the second straight meeting. He and some Fed critics worry that the central bank could be creating new bubbles in financial markets by keeping rates so low.

Read the Fed’s statement here.

Housing starts drop

Construction of new homes and applications for building permits fell in February, but both readings beat economists' expectations.

Housing starts dropped nearly 6%, but remember that snow storms pounded much of the East Coast last month, putting a damper on new construction projects. And building permits, which are considered a good barometer of future building activity, fell 1.6%.

Regionally, housing starts declined the most in the South, falling 15.5% in February. Construction dropped 9.6% in the Northeast. Heading in the opposite direction, starts rose 10.6% in the Midwest and ticked up 7.9% in the West.

‘King of Pop’ back on top

The administrators of Michael Jackson's estate and Sony Music Entertainment have reached a record-breaking deal concerning the sale of the late singer's recordings.

The agreement means that dozens of Michael Jackson songs never heard before by fans will be released in 10 new albums over the next seven years, starting in November, a source close to the transaction tells CNN.

The albums are part of a deal with Jackson's estate that could bring in $250 million to the late pop star's trust, the source said. There could also be DVD’s and video games.

Sony Music has had a 30-year relationship with Michael Jackson and now his estate, and has sold more than 30 million Michael Jackson records since he died last June.

Of course, when Jackson died, he left behind estimated $500 million worth of debts – the result f his lavish lifestyle and numerous legal problems.

On a dark desert highway…

The head of a key banking panel on Monday released a draft bill of sweeping regulatory changes aimed at warding off future collapses in the financial system.

The bill, put forth by Senate Banking Committee Chairman Christopher Dodd, D-Conn., would create a new consumer regulator housed inside the Federal Reserve to ensure consumers get a fair shake with mortgages and credit cards. It would also push banks and financial firms to strengthen capital cushions and create a new process for taking down giant failing companies and preventing future Wall Street bailouts.

The bill also includes a version of the controversial rule proposed by former Fed chairman Paul Volcker - and heralded by President Obama - aimed at prohibiting financial firms from owning hedge funds or from engaging in proprietary trading on their own accounts.

And just three pages into the proposal - at the bottom - you’ll find this little Easter egg: “Large bank holding companies that have received TARP funds will not be able to avoid Federal Reserve supervision by simply dropping their banks. (the Hotel California Provision)”

So what do financial reform and “The Eagles” have in common? Apparently the provision is a nod to lyric, “You can checkout any time you like, but you can never leave.”

Or in other words, “You gotta dance with them what brung you.”

Follow the money… on Twitter: @AndrewTorganCNN


Filed under: Andrew Torgan • Economy • Finance
soundoff (2 Responses)
  1. Annie Kate

    I've gotten a few credit card applications in the mail lately saying I'm preapproved – I've shredded them up and tossed them – I don't want or need any more credit cards.

    I haven't heard of any other loans being approved or disapproved – its going to be hard for the housing market to get going again if no one will approve loans unless you have a great job and 30% saved for the down payment.

    March 16, 2010 at 9:14 pm |
  2. AKricket

    Just curious. Anybody actually been approved for new credit lately? Interest is a moot point if no ones lending. Just heard about a co-worker with 800 credit score and 15% of down on a new house was turned down. First time buyer. Bank said she needed 30% down to qualify. It's about the 7th time in the last month people I know with excellent credit scores have been turned down.

    March 16, 2010 at 5:16 pm |