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Two Ways: FDIC in Red Ink


Strengthen your portfolio in good times and bad.

FDIC in Red Ink

The fund that protects consumer-bank deposits now has a negative balance and the depleted state will remain that way until 2012.

It may be why the Federal Deposit Insurance Corporation (FDIC), which runs the fund, proposed the unprecedented step of having banks prepay about $45 billion in fees by the end of the year to help the government deal with future bank failures.

According to The Wall Street Journal, it's only the second time since the FDIC was created that the fund fell into the red. The last was in 1991 after the savings and loan crisis. But the FDIC stressed that the deficit wouldn't affect depositors because federally insured deposits are backed by the full faith and credit of the United States.

From the Bull Pen: The state of the FDIC is just one example of the challenges our government faces before it can even think of an exit strategy. Gold recovering the $1000 mark is a very encouraging sign. Bulls can look to the goldminers ETF (GDX). A sell stop can be set below $43 support.

From the Bear Cave: The dollar index (DXY) bounced off of 76 support and tagged its 20-day moving average. The greenback now appears to be slipping again and resuming its downtrend. For those bearish, look to the dollar bearish fund (UDN). A sell stop can be set below $27.70.

A Quick Check Around the World

Asian trading closed with the Nikkei 0.33%, India 1.63%, Hang Seng -0.28%, Shanghai 0.90%, and Taiwan 1.07%.

Across the pond, we see the FTSE 0.21%, CAC 0.48%, DAX 0.23%

As of 8:05 a.m. EST, S&P Futures are trading +4.75 to 1059.25 and Nasdaq futures are +6.500 to 1722.00.

A Look at Commodities

Over in commodities, crude oil is +1.10 to 67.81 while gold is +8.50 to 1003.00 this morning. Silver is +0.26 to 16.45 and copper +6.950 to 279.85.

The dollar index is -0.49 to 76.8650.

On the Radar


08:15 ADP Employment (-200k cons.)
08:30 GDP-Final (-1.2% cons.)
09:45 Chicago PMI (52. cons)
10:30 Crude Inventories

Click here for the full trading radar.

Good luck, Minyans! Have a great day!
Position in GDX

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