Will the Fed Need a Bank Bailout of Its Own? & 4 More Things You'll Want to Know Today

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Federal Reserve (Federal Reserve Chairman Ben Bernanke sits down to speak at a news conference at the Federal Reserve in Washing
AP
Here's a quick rundown from the world of business and economics this morning: the things you need to know, and some you'll just want to know.

• Here's a crazy thought: What if the Federal Reserve -- America's central bank, and the source of a major chunk of the government's economic stimulus in recent years -- required a bank bailout of its own? Some critics say it could happen, the result of rising interest rates sapping the value of the $3.5 trillion worth of Treasury bonds and mortgage-backed securities the Fed now holds. If interest rates rise too fast, the Fed could lose some serious coin when it sells those assets. But Fed Chair Ben Bernanke says, don't fret, America. First of all, interest rates won't rise that rapidly; and second, even if it loses a little cash on the far side of the deal, the Fed has sent $320 billion in profit straight back to the taxpayers since 2008. So, its stimulus package has been a net profit to you, me and everyone.

• But there is a real crisis facing the world that the Fed can't save us from: A global wine shortage. Thanks to rising consumption -- especially in the U.S. and China -- and a falling number of acres "under vine" (i.e.: producing grapes), drinkers last year consumed over 300 million more cases of wine than vintners produced. In the not too distant future, there simply may not be enough supply to meet demand.

• To hear the titans of Wall Street tell it, deregulating their industry would be the best way to create more jobs and make America prosperous again. Not so, says new research from a pair of University of Maryland economists: In fact, the less we regulate the financial sector, the more money it sucks out of the pockets of ordinary working Americans. Their paper provides convincing mathematical evidence that leaving big banks unchecked hurts workers in the "real economy" of goods and services.

• Apple (AAPL) has every reason to want its faithful fans to snap up new iPhone 5Ss and 5Cs. But is it possible that Apple is subtly sabotaging older iPhones to induce customers to upgrade? A New York Times reporter whose "sluggish" iPhone 4 was also running out of battery a lot faster than it once had did a bit of digging, and here's what he learned: The new iOS 7 software is making older models run like molasses, and draining their batteries more quickly.

• And finally, a story from the "love and money" files. A Colorado man claims he converted his $500,000 life savings into gold, and then threw it all away -- literally, into a dumpster -- to avoid letting his wife of 25 years get any of it in their pending divorce. (We at DailyFinance would probably have suggested arbitration instead.)

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toosmart4u

Talk about wasteful spending look at your GOP congress. Post office loosing over 5 billion a year and your republicans are sitting on their hands doing nothing. Only things they are trying to do is NOT good for this great country of ours. Look at the 320 Billion profit since 2008. President Obama you are doing a fine job. It would even be better if we could get rid of more republicans.

October 30 2013 at 1:28 AM Report abuse rate up rate down Reply
betty_brock

FIRE THE FED. No shortage of "whine" on these boards.

October 29 2013 at 4:08 PM Report abuse -4 rate up rate down Reply
sandi

fed interest rates go up, bond values drop will china flowed the market with their trillions dollars worth,which is why feds will keep interest rates as low as possible for as long as possible. Soc Sec has about 2-3 trillion of various-I'm sure-level of value but how will turn up if a good chunk of the face value of the bonds drop Soc Sec could go broke before 2034?

October 29 2013 at 3:32 PM Report abuse rate up rate down Reply
Toni Spamoni

I didn't get any money in my pocket from stimulus moneys. My taxes went up. Property tax, consumption tax, utility tax, Obama ACA tax (hidden in other things), all went up....

October 29 2013 at 1:44 PM Report abuse +3 rate up rate down Reply
1 reply to Toni Spamoni's comment
dweeeb.buster

The problems that ail the economy are fiscal and regulatory in nature. If they weren't, five years of monetary stimulus would have produced something beyond the meager economic growth we've been experiencing.

In other words, continuing to add more excess reserves to the banking system is not a stimulus.

October 29 2013 at 2:31 PM Report abuse -1 rate up rate down Reply
americawakeupnow

When your country does not have control of its own monetary system such as ours, then you don't have control of your economy as well as many other facets of your country's inner workings. As long as we continue to charter The Federal Reserve Bank, which is not a branch of our government but a world independent central bank, then all bets are off on the future of our country!

October 29 2013 at 1:30 PM Report abuse +4 rate up rate down Reply
whscms

Hold congress personally liable for all monies "borrowed" from social security for junkets, pork barrels, etc and never paid back

October 29 2013 at 12:15 PM Report abuse +8 rate up rate down Reply
kolblh

If you're the average "Joe" living payday to payday and have ltlle or no savings and bills to pay, your screwed. Never will you catch up or get ahead. Thank the Fed for that. Big Banks and the Giant Corporations will continue to rob us blind and the Fed will continue to dance.

October 29 2013 at 11:54 AM Report abuse +11 rate up rate down Reply
2 replies to kolblh's comment
scottee

One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 316 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.


When you fully grasp the plain truth that 545 people exercise power of the federal government, then it must follow that what exists is what they want to exist.

October 29 2013 at 3:06 PM Report abuse +3 rate up rate down Reply
willypfistergash

Rob us? How so?

October 29 2013 at 4:29 PM Report abuse -2 rate up rate down Reply