Now that Wall Street investment banks are trying to one-up each other by shouting “RECESSION!”, the news has actually been pretty good of late. Until today.
- Inflation spikes. Your money is now losing value at a rate of 4.2% per year. This means that 1) Bernanke was smart to only cut rates 25 basis points this week, despite Wall Street’s whines, and 2) Bernanke is going to have a harder time bailing the market out.
- Citigroup stops pretending it doesn’t own those hideous mortgage SIVs and moves them on to its balance sheet. The awful mortgage bets are old news, but the acknowledgement that Citi is indeed responsible for them will put more pressure on its capital ratios (banks have to maintain a certain level of equity to debt). It will also put more pressure on other banks to end the charade and follow suit.
Meanwhile, yesterday’s 1% growth in retail sales (3 points below the rate of inflation) shows that consumers aren’t exactly cracking their wallets.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.