U.S. Treasury Prices Climb|
With expectations that the Federal Reserve will extend the Treasury-buying
portion of one of its easing programs into next year, U.S. Treasury prices were
on the move higher Monday. Throughout the trading session, Wall Street was
mainly flat-lined as investors wait on the sidelines for fiscal cliff news that
will move the markets. As of the end of the day there was no positive news from
President Barack Obama or Speaker Boehner on a resolution to the fiscal cliff.
President Obama on Monday, at the Daimler Detroit Diesel Plant in Redford,
Michigan said he’s drawing the line in the sand over higher-income households
paying a slightly higher tax rate saying, “That’s a principle I won’t compromise
on.” The White House and Congress have less than three weeks to avoid the fiscal
cliff, sharp spending cuts and expiration of Bush-era tax cuts that many
economists believe will result in the U.S. falling into a deep recession. The
White House is proposing savings by cutting Medicare and other mandatory
spending programs in addition to seeking nearly $950 billion in revenue from
eliminating Bush-era tax cuts. The Obama administration asked for $200 billion
in new stimulus spending to boost the U.S. economy in its opening fiscal-cliff
offer to House Republicans. House Republican offered to raise $800 billion by
closing tax loopholes and certain tax deductions, but refuse to budge on
accepting higher income tax rates for wealthier Americans. Republican Tennessee
Sen. Bob Corker is backing higher taxes on the wealthy and said over the weekend
that doing so would empower his party to force spending cuts in later
Ahead of the Federal Open Market Committee meeting which begins on Tuesday, bond
holders are anxiously awaiting news as to whether the Fed will continue to buy
nearly $40 to $45 billion in U.S. Treasurys each month, or reduce that down to
nearly $20 billion per month.
For the fifth straight trading session on the New York Mercantile Exchange,
crude-oil futures posted further losses. Oil for January delivery moved lower by
37 cents to settle at $85.56 a barrel. Political conflicts in Italy with the
government basically falling apart and, euro zone concerns are helping to push
HSBC Holdings PLC could hear of a settlement of $1.9 billion from U.S.
regulators, to resolve probes that the bank ignored possible money laundering.
Top compliance and banking officials at HSBC were quizzed in July at a Senate
hearing after a top lawmaker produced a report showing that the global bank
allegedly allowed drug traffickers, terrorists and rogue states to launder
several billions of dollars because of poor controls.
American International Group, Inc. (AIG) shares moved to the downside Monday
amidst heavy trading volume after the U.S. Treasury Department announced it
plans to sell its remaining 16% stake in AIG. In a public offering, the U.S.
Treasury will sell the 234.1 million AIG shares.
Groupon, Inc. (GRPN) continue their move, to the downside. During the trading
session on Monday, shares were lower by 9% into the close of the day. Rumors are
ramping that Google (GOOG) could be interested in buying Groupon but, seriously,
there is little reason for that to happen. During the past quarter, Groupon's
billings dropped by 12% and from Q2, the company saw a 16% decline in third part
sources of revenue. Over the same period, the companies direct revenue rose
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