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    Daily Digest 12/2 – Fed Discloses Big Loans, Home Sales Rebound, Gold Prices Flat

    by DailyDigest

    Thursday, December 2, 2010, 4:00 PM

  • Senate Approves Biggest Food-Safety Overhaul in 70 Years
  • As The Euro Goes The Way Of The Dodo, Where Does That Leave The Dollar?
  • Federal Reserve Data Disclose Big Loans To Financial Organizations
  • Retailers Nov Sales Show Strong Start To The Holidays
  • Pending Home Sales Rebound 10.4% in October
  • Initial Unemployment Claims Tick Back Up
  • Gold Prices Flat As Traders Await Data

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Economy

U.S. Senate Approves Biggest Food-Safety Overhaul in 70 Years (lastboyscout)



The U.S. Food and Drug Administration would gain more power to police food companies under the bill that passed today in a 73-25 vote. The measure, backed by the food industry, public- health groups and consumer advocates, adds inspections and lets the FDA force recalls, rather than relying on companies to voluntarily remove contaminated foods from store shelves. The bill had awaited a full Senate vote since winning unanimous approval a year ago by the Health, Education, Labor and Pensions Committee. It was prompted partly by recalls of cookie dough, spinach, jalapenos and salmonella-tainted peanuts that killed at least nine people and sickened more than 700 in 2008 and 2009.

As The Euro Goes The Way Of The Dodo, Where Does That Leave The Dollar? (ivo)



The Eurozone is heading for a crash—anyone saying otherwise is either stoned, works in Brussels, or hasn’t checked the European bond market action lately: All hell is breaking loose there. And if, as I have argued here, the Irish Parliament decides not to pass the austerity budget next December 7—that is, decides not to take the European Central Bank bailout—then hell is going to break out in Europe just in time for Christmas: Satan and Santa Claus just might be squaring off on the Rue Belliard before year’s end. Therefore, the smart money starts thinking about what’s going to happen after the euro-crisis-climax happens.

Federal Reserve Data Disclose Big Loans To Financial Organizations 



Federal Reserve data provide listed details of more than 12,000 transactions made between December 2007 and July 2010. The data include short-term liquidity measures for financial institutions, liquidity injections directly to borrowers and investors in key credit markets and big financial help to many organizations. The Federal Reserve data disclose the enormous financial help provided to various banks and companies. Citigroup acquired a loan of $2.2 trillion. Merill Lynch got $2.1 trillion. Morgan Stanley got help of $2tn whereas, Bank of America recieved help of $1.1 tn. The Fed has said that it was able to recover most of the loans it provided.

Retailers Nov Sales Show Strong Start To The Holidays 



According to 27 retailers tracked by Thomson Reuters, sales at stores opened more than a year rose 6% in November, above the estimated growth of 3.6% and the year-ago gain of 0.6%. Many retailers started the holiday season early in November, blitzing shoppers with promotions because of concerns that the still-uncertain economy would hold them back. “Retailers’ game plan was aggressive promotions throughout the month,” said John Long, retail strategist at Kurt Salmon Associates. “The results we are seeing are not solely the contribution of Black Friday sales.” Black Friday is the retail nickname for the day after Thanksgiving. The strong early start has prompted some to wonder if the consumer will continue to spend throughout the holiday season. The National Retail Federation projects holiday sales will rise 2.3% this year after a 0.4% gain in 2009 and a 3.9% drop in 2008.

Pending Home Sales Rebound 10.4% in October 



An index that measures the number of contracts to buy previously owned homes in the U.S. rose 10.4% in October month-over-month to a reading of 80.9. The index remains 20.5% lower than year-earlier levels. October 2009 saw the highest level of pending home sales since May 2006 when it hit a reading of 112.6. Economists had expected the data to be flat after a 1.8% downtick in September. September’s rate of pending home sales came in worse than expected and was 24.9% lower than in the year-earlier month.

Initial Unemployment Claims Tick Back Up 



The number of initial claims rose to 436,000 last week, up 26,000 from a revised 410,000 claims filed the week before, the Labor Department said Thursday. The number was disappointing for a couple of reasons. It meant more Americans filed for unemployment benefits, and it was a bigger increase than economists had expected. Forecasts from Briefing.com had expected initial claims to rise to 422,000. But experts weren’t quick to take one week’s worth of data as an entirely dismal sign.

Gold Prices Flat As Traders Await Data

Comex gold futures held near steady Thursday as a stable dollar and little economic news left traders searching for direction ahead of Friday’s U.S. employment report. The most actively traded contract, for February delivery, was recently up $1.30, or 0.1%, at $1,389.60 per troy ounce on the Comex division of the New York Mercantile Exchange. Gold traders continued to look for direction from the dollar, which traded near flat against the euro Thursday morning. The euro was recently at $1.3085 from $1.3122 late Wednesday. Dollar-denominated gold futures tend to repel investors using foreign currencies when the dollar strengthens.

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