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Coldwell Banker Pelican Real Estate, 314 Norman Drive Lafay

314 Norman Drive Lafayette, La. French style home for sale. Listing agent, Raquel King, 337-233-9540

Coldwell Banker Pelican Real Estate, 314 Norman Drive, Lafayette, La.

314 Norman Drive, Lafayette, La. Home Tour by Listing Agent Raquel Renee King, Coldwell Banker Pelican, 337-233-9540 ext. 527

Fed makes a profit on bank loans

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The Financial Times reports that The Federal Reserve has made $14 billion in profits on loans made in the last two years.  The U.S. central bank also earned about $19 billion from interest and fees charged to institutions that tapped liquidity facilities during the global financial crisis, the report said. Sounds great, but according to Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who analyzed the data for the Times, if private investors had taken a stake in the banks last October on par with the government’s, they would have had profits three times as large — about $12 billion, or 44 percent if tallied on an annual basis.  Why?  Finance experts say the government overpaid for the bank assets it bought.  A Congressional oversight panel concluded in February that the Treasury paid an average of 34 percent more than the estimated fair value of the assets it received.

Not surprisingly, a semi-annual poll by the National Association for Business Economics (NABE) found that most economists believe the US should cut spending from its current levels, and shouldn’t embark on a second stimulus package.  They also doubted that health-care reforms proposed by the Obama administration would lower costs.  “This is one of the fastest-moving and most controversial economic policy environments we have experienced in a generation,” said NABE president Chris Varvares.  the economy saddled with a $1.58 trillion budget deficit in fiscal 2009, and a shortfall of about $9 trillion between 2010 and 2019.  The budget deficit is causing alarm and creating opposition to President Obama’s central policy priority of overhauling the US healthcare system…now sitting at $1 Trillion.

Oil investors often look to stock markets as a barometer of sentiment about the economy, and China’s benchmark fell 6.7 percent today.  Oil prices fell to near $71 a barrel Monday as China’s stock market tumbled and commodities investors questioned whether the U.S. economy can recover strongly in the second half.  Benchmark crude for October delivery was down $1.81 to $70.93 a barrel in afternoon European electronic trading on the New York Mercantile Exchange.  The contract Friday added 25 cents to settle at $72.74 after tumbling from near $75 earlier in the week.  The U.S. economy will likely have to grow at least 2 percent in the third quarter to enthuse traders and push the oil price past $75, according to Christoffer Moltke-Leth, head of sales for Saxo Capital Markets in Singapore.  “We’re seeing an economic recovery, but that’s already been built into the price.”

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