Gold was mostly flat on Tuesday, trading around $950 as the dollar took a break from its rally, improving the precious metal's appeal as a currency hedge. Bullion neared $1,000 per ounce last week, a key level it last topped in February, as worries about inflation and a weaker US currency increased gold's attraction as an alternative investment.
The British Prime Minister, Gordon Brown, has survived to fight another day as he faced down his critics, with the backing of party heavyweights, in a very tense parliamentary meeting yesterday. He did, however, promise to learn from his mistakes and to produce decisive policies and to clean up politics. Sterling reacted quite calmly, taking the, better the somewhat broken devil we know, to the, who is the new devil we don't, approach. Alan Johnson should not take this personally.
The Republic of Ireland's credit rating was downgraded for the second time in 3 months yesterday. Standard & Poor's reduced Ireland's long term credit rating from AA+ to AA with a negative outlook. The report sent Irish banking stocks plunging before recovering their losses to finish net equal and it affected the euro.
The Panel appointed by Congress in the US to oversee the Troubled Asset Relief Program, or TARP, gave a mediocre reaction to the Obama administration's exercise of testing the financial health of the nation's 19 largest financial institutions. It reported that the stress tests were constructive but also raised serious questions. At the same time, however, the report said there were some serious questions about the stress test process and offered half a dozen recommendations. The Obama administration did not contain their recommendations to their home country and wants European countries to put their banks through more rigorous public stress tests to ensure that the institutions survive if the economy deteriorates further.
A US Supreme Court justice granted Monday a request to put on hold the sale of bankrupt automaker Chrysler to a group led by Italian carmaker Fiat. Supreme Court Justice, Ruth Bader Ginsburg, put a stay upon the sale until the Court had heard representations from three Indiana pension funds.