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Fuzzy Math From the Bank Bailouts

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These big numbers just aren't adding up.

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Editor's Note: This article was written by Richard Suttmeier, chief market strategist at ValuEngine.com, which is a fundamentally-based quant research firm in Princeton, New Jersey, that covers more than 5,000 stocks every day.


Congress authorized the Treasury Department to spend $700 billion in TARP and another $400 billion for Fannie Mae (FNM) and Freddie Mac (FRE) in Conservatorship.

Propublica.org reports that $452.6 billion has been announced and/or distributed from the $700 billion TARP to 727 recipients. More than 400 got federal money after President Barack Obama's inauguration.

The Conservatorship of Fannie Mae & Freddie Mac: So far $110.6 billion has been allocated versus the $400 billion allocated ($200 billion for each).



At President Obama's inauguration the total for the two programs was $318 billion, which means that $245 billion money has been allocated under the Obama Administration.

It's hard to believe that Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke say that these bailouts will make money for US taxpayers. Conservatorship alone will cost nearly $1.4 trillion and counting.

The daily chart for the 10-Year yield favors higher yields. My semiannual support is 4% with a weekly pivot at 3.446, daily resistance at 3.357, and the 200-day simple moving average at 3.316.


Source: Thomson / Reuters
Click to enlarge

Supply will be tested during the next three days with $40 billion 3-Year notes auctioned today, $21 billion 10-Year notes tomorrow, and $13 billion 30-Year bonds on Thursday. My semiannual pivot is 1.265 on the 3-Year.

The daily chart for gold shows declining MOJO with quarterly support at $1135, my weekly pivot at 1179 and today's resistance at $1199.


Source: Thomson / Reuters
Click to enlarge

The daily chart for crude oil
shows declining MOJO with oil below its 50-day simple moving average at 76.32. My annual pivot is $68.81 with the 200-day simple moving average at $64.90.


Source: Thomson / Reuters
Click to enlarge

The weekly chart for the dollar index shows rising MOJO and a close this week above the five-week modified moving average at 75.95 shifts the weekly chart profile to positive. This week's support is 74.86 with quarterly resistance at 78.65.

The euro remains below 1.50, the dollar versus yen trades around a weekly pivot at 90.12, and the British pound is shy of 1.65.

The Major Equity Averages -- Tracking the Breakout or Breakdown -- Today It's a Coin Toss

For the Dow, today's support is 10,362 with a weekly pivot at 10,442 and the multi-year bear market down trend at 10,550.


Source: Thomson / Reuters
Click to enlarge

The S&P 500 shows a weekly pivot at 1097.6.

The NASDAQ remains below its 200-week simple moving average at 2210 with semiannual resistances at 2227 and 2296.

Transports are between my annual pivot at 4037 and annual resistance at 4199.

The SOX is trading around my semiannual pivot at 337.39.

Send me your comments and questions to Rsuttmeier@Gmail.com.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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