Morning Market Report

Markets were mixed yesterday. The Dow was down along with the NASDAQ while the S&P 500 gained. This morning, futures are back up. The Dollar is weaker ant it's hit a one year low against the Euro. Meanwhile, the place that insures bank deposits may need a bailout of its own. (FDIC)

Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.

Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.

It's hard to put this into words. First, which are these healthy banks? Most of them are healthy only because of their own bailout. Now, they are going to turn around and lend their own insurer money. Of course, how would you feel if you are the average consumer trying to get a loan? You can't get one but the FDIC can get one.

This is also another sign that our banking system is far from healthy. We have healthy banks. Yet, the FDIC has had to step in on so many banks that they are unhealthy. There's troubling news from FHA and the commercial mortgage crisis is just around the world. So, there's still plenty of trouble on the horizon.

Bond rates are inching up. The ten year U.S. Treasury is now trading at 3.49%. It bounced between 3.39-3.44 for about a week but then broke through that range yesterday. The yield spread between the two and ten year is also back to 2.50%. That's the highest in weeks.

Oil is back above $71 a barrel. It's currently trading at $71.50 a barrel after it fell below $70 a barrel at the close yesterday. The weak dollar likely has at least something to do with that. (oil is traded in dollars and so a weak dollar puts upward pressure on oil)

Markets around the world were nearly unanimously up. In the Far East, the were up almost across the board while in Europe, they were up across the board. The Hang Seng was up 1.06%, the Straits Time Index in Singapore was 1.42%, while the NIKKEI was still even. The broader Chinese index was down 2.34% and was one of two Far East indices that was down. In Europe, the FTSE in London was up .84%, the DAX in Germany was up .99% and the Spanish index was up 1.11%.

The Dollar is down .82% against the Euro, down .74% against the British Pound and down .92% against the Japanese Yen.