March 23rd, 2009
01:34 PM ET

Financial Dispatch: Wall Street applauds ‘bad’ bank plan

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Andrew Torgan
CNN Financial News Producer

Stocks soared Monday as investors hailed the Treasury Dept.'s plan to buy up billions of dollars worth of so-called “toxic” bank assets, seeing it as a critical move in stabilizing the financial system.

At noon, the Dow was up more than 300 points, and the Nasdaq and the S&P 500 were each up more than 4%. Wall Street is coming off its first weekly back-to-back winning streak in nearly a year.

Sales of previously-owned homes unexpectedly rose in February, recovering from a sharp drop in the previous month.

The National Association of Realtors says that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million units, up 5.1% from a rate of 4.49 million in January.

First-time buyers made up half of all purchases in February, and sales of distressed properties accounted for about 45% of all transactions. Sales were unexpectedly strong in the West, with activity increasing more than 30% over last year.

The national median existing-home price, meanwhile, was $165,400 in February. That’s down 15.5% from last year, when the median price was $195,800. Prices were depressed by the large number of foreclosed properties on the market.

Crude oil prices are back above $53 a barrel.

Last week, the Fed announced it would inject $1 trillion into the U.S. economy. The value of the U.S. dollar drop significantly following the news, which in turn pushed oil prices higher.

Also fueling the increase, OPEC has been cutting production since late last year and the tighter supply is starting to affect prices.

Gas prices rose 3-tenths of a cent overnight to $1.956 a gallon, the 6th consecutive increase. 13 states and the District of Columbia have regular unleaded gas prices of $2 and higher. 37 states have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.481). The cheapest gas prices are in Wyoming ($1.769)

Finally, companies across the country are looking for ways to cut costs. A recent survey from Watson Wyatt indicates that 42% of companies have already frozen salaries. But there are strategies for getting a raise - even in a down economy.

Your value as an employee is not dependent upon the economic conditions of the time; it's all about what you bring to the company. And putting together a good strategy is the key. Click here for some tips on getting a raise.

Filed under: Andrew Torgan • Economy • Gas Prices • Housing Market • Oil • Treasury Secretary • Wall St.
soundoff (9 Responses)
  1. JC- Los Angeles

    It's only fitting for Wall Street to applaud the bad bank plan since now they can make even more money off the same mortgage fraud that helped ruin the economy.

    It's staggering to think that the same "private" investors who most likely worked at AIG, Lehman and Bear Stearns and who helped ruin our nation, will now get paid a second time off the same mortgage fraud.

    Only in America.

    March 23, 2009 at 5:37 pm |
  2. Isabel

    Wall Street applauds bad bank plan

    This is a sign of inconsistency or despair?

    March 23, 2009 at 3:04 pm |
  3. kristi in kc

    In 2006, Goldman Sachs CEO Lloyd Blankfein got a $53.4 million bonus - a Wall Street recird, In 2007 the following year, he broke his own record with a $67.9 million bonus. And the next year in 2008, the firm got a $10 billion dollar bail-out.

    The best and the brightest should be kept in place? I think there are 100 guys who have resumes of equal caliber who are waiting to make their own $70 million. Let someone else have a turn. Anyone.

    March 23, 2009 at 2:51 pm |
  4. Michael "C" Lorton, Virginia

    I'm sure that Wall Street is very happy--they are getting "cash for trash,"--–who wouldn't?

    March 23, 2009 at 2:35 pm |
  5. Linda Ozmun

    My problem is that my husband and I are both "under water" for about $25,000 in our mortgage. We have never been late on a payment and work very hard to pay all of our bills on time. We have a split mortgage (neither or are held by Chase) and the smaller of the two is an ARM. I called my long time bank today, JP Morgan Chase, and asked them if they would help us by refinancing our house since they are the recipients of TARP money. I was told they would not help us. I am outraged since I just saw on CNN today, JP Morgan Chase is buying 2 new corporate jets for $120 million and spending an additional $18 million on refurbishing the hanger for these jets. When I spoke to the bank manager at the branch we use, she said it was apples and oranges and there was nothing they would or could do to help. I thought the TARP money was to help people like us. I don't want something for nothing – I've been a hard worker all of my life and retired after 20 honorable years in the United States Air Force. My husband is also a very hard worker and has been with the city of Solon OH for 25 years. How do we gain access to this money via lenders to help us? I feel helpless and now frustrated. Regards,Linda Ozmun

    March 23, 2009 at 2:33 pm |
  6. Annie Kate

    With all the layoffs, etc. I don't see how any of us will be able to afford gasoline if it returns to its high prices we witnessed just a few months ago. For cities with subways, trams, etc this won't be quite the problem it is for those cities who do not have public transportation and everyone has to drive to work. Perhaps companies ought to explore telecommuting a bit more – it would attract good employees and probably give the company a break as well.

    March 23, 2009 at 2:31 pm |
  7. Cindy

    Of course Wall Street likes Geithner's idea...they'll be seeing money come their way! The economists on the other hand think that it is an atrocious deal. So..who's right!?


    March 23, 2009 at 1:47 pm |
  8. Michael "C" Lorton, Virginia

    Stocks soared Monday as investors hailed the Treasury Dept.’s plan to buy up billions of dollars worth of so-called “toxic” bank assets, seeing it as a critical move in stabilizing the financial system-–give me your bad chickens--here is more money to see if you can do the same-–all we are doing is accommodating the kidnappers--and I'm sure they willl be sending future ransom notes.

    March 23, 2009 at 1:44 pm |
  9. elizabeth, Sacramento

    Except for the people who knew they couldn't afford their houses, why can't there be a "debt amnesty" for those who have worked hard but due to the economy, can't fulfill their obligations? After all, we granted "performance amnesty" to the executives who nearly ruined us. Why doesn't AIG use some of their bonuses to help their fellow Americans?

    March 23, 2009 at 1:42 pm |