Chrysler Financial Gets $1.5 Billion TARP fundsThe Treasury Department says it will provide a $1.5 billion loan to the auto financing arm of Chrysler. This new aid will be in addition to a package of loans given to Chrysler and General Motors last month in a move designed to give the two companies more time to reorganize.
The $1.5 billion loan to Chrysler Financial follows the government's similar loan given to GMAC, the auto financing arm for General Motors.
British Government to Rescue UK Banks
The U.K. government will offer its banks a second rescue plan. On Monday the British Prime Minister Gordon Brown said the comprehensive measures are meant to increase the amount of lending available to business and consumers.
The British Treasury in the program will offer an insurance program to protect banks against losses backed by mortgages and other loans. The insurance program is called the Asset Protection Scheme. U.K. banks that take deposits and have more than $37 billion of eligible assets will be the first considered for the insurance program.
The government announcement comes as the Royal Bank of Scotland Group says it may post a loss of $41 billion, the largest amount ever to be reported by a U.K. company. It was among three banks in which the British Treasury invested $63 billion last October.
Consumer Prices Fell In December
Consumer prices fell for a third straight month in December, with a record drop in gasoline prices pushed overall consumer prices down, ending a year in which inflation rose as the slowest rate in more than 50 years.
Economists are concerned about the possibility of deflation, but not at the same level as six months ago, when skyrocketing energy prices threatened to begin a wider inflation problem. The Labor Department on Friday reported consumer prices dropped 0.7 percent in December, slightly less than the 0.9 percent drop anticipated.
In 2008, consumer prices increased by 0.1 percent, down from 4.1 percent in 2007 and the smallest annual change since consumer prices actually fell by 0.7 percent in 1954.
Not including food and energy prices, core inflation was unchanged in December. For 2008 it rose 1.8 percent, compared with a 2.4 percent increase for 2007.
Wall Street Rises on Bank Bailout News
The news of Bank of America's bailout funds advanced Wall Street on Friday. The mega bank received new capital injection of $20 billion in exchange for stocks and $118 billion asset guarantee from the Treasury.
The Dow Jones industrial average advanced 68.73 points to 8,281.22. The Standard & Poor's 500 index added 6.38 points rising to 850.12. The Nasdaq composite rose 17.49 points to 1,529.33.
The nation's markets were closed Monday in observance of Martin Luther King Jr. Day, a Federal holiday.