Twists and Turns In Banking Saga Impacts ETFs
October 3rd, 2008 at 10:00am by Tom Lydon
But Citibank (C) is insisting that Wachovia abide by the terms of their deal, in which Citibank would buy Wachovia’s banking operations, reports Sara Lepro for the Associated Press. Part of the agreement says that Wachovia won’t enter into a transaction with any other party, so there’s likely to be a battle brewing here.
The Regional Bank HOLDRs (RKH) has 10.1% of Wachovia and 13.7% of Wells Fargo. Year-to-date, it’s down 16.3%.
Insurer American International Group (AIG) says it plans to sell as many assets as necessary to repay up to $85 billion of borrowings from the U.S. government, report Juan Lagorio, Euan Rocha and Lilla Zuill for Reuters. Not all the assets they would sell were disclosed, but the plan does include some businesses outside the United States.
AIG says it will honor all of its financial obligations for ETF Securities’ line of exchange traded commodities (ETCs). Commodities portfolios that were backed by AIG as counterparty opened the portfolios to credit risk and forced the company to halt ETC trading on Sept. 16, says the Index Universe Staff. Trading on all of the products has resumed.
Meanwhile, the nation is awaiting a vote on the $700 billion bailout bill. Both parties are hopeful that the measure would clear Congress by the end of the day, then be off to President Bush for a signature, says Julie Hirschfeld Davis for the Associated Press.
As America awaits a decision, oil prices continue to decline, dropping below $94 in early trading, report Ikuko Kao and Alex Lawler for Reuters. News about U.S. employers slashing jobs underscores the weakness in our economy, keeping oil heading lower.
- United States Oil (USO), up 0% year-to-date
- iPath S&P GSCI Crude Oil Total Return Index ETN (OIL), down 0.8% year-to-date
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