and bailing out banks.
Markets are waiting for a rescuer especially after the Bush administration and Treasury Secretary Henry Paulson which were considered to be a Heros earlier had failed now in bolstering financial markets even when they had enormous pressures to create the 700 billion dollars bailout plan.
What astonished markets was most of the TARP money was used into acquisitions; humongous banks which faced drained cash surprisingly had used the bailout money just to acquire other troubled banks and financial institutions, other than stopping the job terminations and foreclosures which have been taking place recently.
Last week we witnessed a bailout from the TARP money to the Bank of America, a joint decision by three departments decided to support the bank with a total of $138 billion but the situation did not stop at that, the bad news continues Citigroup which has the world biggest financial network had decided to split into two after reporting a total of $8.29 billion in losses for the fifth consecutive time.
After that gloomy news that would support those two banks continue going, investors managed to stay optimistic bolstering the US indices to close in the green area. Dow Jones Industrial Average inclined 0.84% or 68.73 points reaching 8281.22 levels; the S&P 500 added 0.76% or 6.38 points reaching 850.12 levels and finally NASDAQ inclined 1.16% or 17.49 points reaching 1529.33 levels.
Moving to the United Kingdom, the housing sector continues to weaken for the third consecutive month, the Rightmove House Prices fell 1.9% on the month coming slightly better than the previous fall 2.3% and the year Rightmove house prices fell deeply to 7.3% from the previous -6.3%.
The Royal lands are under distress; the downturn in the housing sector along with the termination of jobs will continue to weigh upon the United Kingdom, markets are anticipating news from the Kingdom. We will start with Consumer prices falling 0.9% on the month where the yearly eased to 2.6% form the previous 4.1%.
We will continue the week with the UK Jobless Claims, where according to markets expectations the jobless claims inclined in December to 81.0 thousand from the previous 75.7 thousand; the endless turbulence in the fourth quarter from the intensifications of the Credit Crisis and slowing demand had resulted in a total of 1.2% contraction in the fourth quarter and a 1.4% retraction on the year.
Due to all those endless weaknesses in the United Kingdom, the Bank of England decided earlier today to approve the second stimulus, a facility is creating a fund with a total of 50 billion pounds which will be used to purchase the private sector assets. Also the treasury department added that they are about to increase their shares in the Royal Bank of Scotland, along with continuing their money injection in the financial system by purchasing corporate bonds, commercial paper and syndicated loans. Also the new package will add 100 billion pounds to the prior 250 billion pounds to underwrite the financial system suffering from toxic loans.
It's been a year and the United States did not find the suitable drug for the endless contagion that resulted in a total destruction, hopes are all hung over the new president hoping that he would help in finding the bottom of the housing sector downturn along with stopping the continuous job termination which reached to 2.59 million job.
From the United States we are waiting for numerous data which is mainly from the Housing Sector, expectations clears that the housing sector will continue to tumble. Analysts believe that the housing starts eased in December to 605 thousand from the previous 625 thousand, along with the Building Permits which might have eased to 600 thousand from the previous 616 thousand. The Americans will only witness those fundamentals where they will be enjoying the inauguration of the newly elected president.
World economies continue to struggle from the endless turbulences in financial markets, pushing central banks to invent new stimulus plans just to cushion their economies...