|
 |
 |
       |
 |
 |
 |
 |
|
|
 September 2008, Issue #30 A Bailout for Fannie and Freddie -- But Not for the Market After months of speculation about the fate of Fannie Mae and Freddie Mac, the verdict for the two most important U.S. mortgage financiers has finally arrived. On Sunday, September 7th, Treasury Secretary Henry Paulson unveiled a sweeping plan for a government takeover of the twin mortgage giants, placing the two companies into a "conservatorship." Under conservatorship, Fannie and Freddie would be temporarily run by the government until they recover to a certain degree. The move, which could provide as much as $200 billion to the two companies, will mark the government's most dramatic attempt to help save the nation's housing market to date. The Freddie and Fannie takeover removed doubts about the survival of the two important U.S. mortgage financiers. It will also help add much-needed liquidity to the secondary market for U.S. mortgages. However, the government's bailout does not resolve some of the bigger problems such as excessive housing inventories, dropping home prices, and mounting foreclosures. Some banks and other financial institutions will also have to take substantial writedowns in the third quarter. There is no quick housing recovery in sight. With unemployment rates going up and growing fears of more layoffs coming, even if banks were to start lending again, there wouldn't be enough demand for the housing market to recover. In addition, the conservatorship for Fannie and Freddie is only a short-term solution. Only time will tell if the program will be extended indefinitely. As for now, there is some good news. After a month of weaker than expected hurricanes, oil prices have slid to newer lows. Other commodities have declined as well. Gold, for example, recently closed at a 5-month low. Meanwhile, the US dollar continues to strengthen against all other currencies. Whether this is due to belief in the US economy or a signal of declining economies abroad remains to be seen. What's New at Firstrade We've recently completed a transition of website content providers from Market Watch to Interactive Data. In the coming months, we will introduce many more exciting tools and features to all our customers. On the Roadmap
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered next by sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat. This month we take a look at McDonald's, the world's largest chain of fast food restaurants. As Wall Street continues to take a beating from a weak financial sector, McDonald's has actually fared pretty well. In its most recently released sales data, McDonald's reported an 8.5% worldwide increase in same-store sales for the month of August. This was slightly ahead of the 8.1% reported during last year's quarter. Thanks to its new line of creative promotions and low prices, McDonald's has been able to stay ahead of the game and defy the effects of a weak economy. Most restaurant chains have been suffering from lower sales this year due to high food and gas prices as well as tighter consumer spending. However, McDonald's has proved to Wall Street that it can buck the trend with its cheap prices and international business. Serving nearly 52 million customers daily, McDonald's is probably the world's best known fast food chain. Headquartered in Oak Brook, Illinois, the corporation profits from rent, royalties, and fees paid by franchisees as well as sales from company-operated restaurants. Its restaurants offer a wide variety of food items and beverages, but primarily sell burgers, chicken products, French fries, and soft drinks. McDonald's currently operates over 31,000 restaurants in 118 countries and is still growing. Let's take a look at some key events.  Key Events:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
|||||||||||
|
|||||||||||
At a Glance: |
 WelcomeProducts & ServicesChinese (Traditional) |
PricingMarkets & NewsChinese (Simplified) |
RetirementKnowledge Center |
SupportForms Center |
Site MapContact Us |
||||||
|
|||||||||||
|
|||||||||||
©2008 Firstrade Securities Inc. All rights reserved. Member FINRA/SIPC. Important Information | Privacy Policy | Security Center System response and access times may vary due to market conditions, system performance, and other factors. |
|||||||||||
