Bloomberg | December 28, 2009 | 06:03 EST
If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale. Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said. Investors are demanding higher returns on government debt, boosting rates this month by the most since January; on concern, President Barack Obama’s attempt to revive economic growth with record spending will keep the deficit at $1 trillion. Rising borrowing costs risk jeopardizing a recovery from a plunge in the residential mortgage market that led to the worst global recession in six decades.
“When you take these kinds of aggressive policy actions to prevent a depression, you have to clean up after yourself,” Greenlaw said in a telephone interview. “Market signals will ultimately spur some policy action but I’m not naive enough to think it will be a very pleasant environment.” Yields on the 3.375 percent notes maturing in November 2019 climbed 4 basis points to 3.84 percent at 11 a.m. in London today, according to BGCantor Market Data. The price fell 10/32 to 96 5/32. They have risen 65 basis points this month, the most since April 2004, as government efforts to unfreeze global credit markets lessened the appeal of the securities as a haven. Continue reading
AP |Sunday, 13 Dec 2009
Senate Democrats overcame a Republican filibuster to clear the way for a vote Sunday on a huge end-of-year $1.1 trillion spending bill that includes money to run much of the government and pay for Medicare and Medicaid benefits. The spending measure gives the Education Department, the State Department, the Department of Health and Human Services and others generous budget increases far exceeding inflation. On Saturday, the Democratic controlled Senate voted 60-34 to end the GOP filibuster that threatened to hold up the legislation. A final vote was set for Sunday afternoon whether to send the measure to President Barack Obama.
Democrats held Saturday’s vote open for an hour to accommodate Independent Sen. Joe Lieberman of Connecticut, an Orthodox Jew who walked more than three miles to the Capitol to vote on the Sabbath after attending services at his synagogue. Lieberman, wearing a black wool overcoat and bright orange scarf, finally provided the crucial 60th vote. The 1,000-plus-page bill brings together six of the 12 annual Continue reading
ABC News | Dec. 7, 2009
The $700 billion financial bailout has caused controversy and outrage from the moment it was enacted last fall, an attempt by the Bush administration to save the financial system from a collapse that could imperil the overall economy. A year later, critics argue, the bailout has only helped Wall Street, not Main Street. But the Obama administration Monday revealed that the program’s 10-year cost to taxpayers would be $200 billion less than expected — and now a chunk of the remaining funds could be used to help put Americans on Main Street back to work. “We’ve been very successful in bringing stability back to the financial system and that’s going to create very substantial resources for the president and the Congress to devote to the immediate priorities to the country,” Treasury Secretary Tim Geithner said in an interview with ABC News’ Jake Tapper.
The administration’s immediate priorities include job creation and continuing to stimulate economic growth, issues that the president will address in a speech on Tuesday. Obama is expected to focus on three main areas: energy, small businesses and infrastructure. House Democrats are reportedly eying a $70 billion chunk of bailout money to use in any jobs growth effort. “Having gotten the financial crisis under control, having finally moved into a positive territory when it comes to economic growth, our biggest challenge now is making sure that job Continue reading
November 21, 2009 | 6:01 AM | abc news
President Obama hailed his recently concluded Asia trip a success, saying the trip helped to facilitate “a new era of American engagement.” In his weekly address, taped earlier this week while in Seoul, South Korea, the president said that a major focus of the trip was to support and encourage economic recovery in the United States. “As we emerge from the worst recession in generations, there is nothing more important than to do everything we can to get our economy moving again and put Americans back to work, and I will go anywhere to pursue that goal,” President Obama said. In facilitating the economic recovery, the president said that international trade is an important component. “We … need to place a greater emphasis on exports that we can build, produce and sell to other nations – exports that can help create new jobs at home and raise living standards throughout the world,” the president said. Furthermore, the president said that by increasing our exports to Asia by 5 percent, the U.S. could create hundreds of thousands of jobs. Looking forward, President Obama pointed to a forum on job creation with U.S. business leaders on Dec. 3 as a continuation of his commitment to focus on job creation. The president said that while progress has been made, there is more that remains to be done. “I will not let up until businesses start hiring again, unemployed Americans start working again and we rebuild this economy stronger and more prosperous than it was before,” President Obama said. Continue reading
NYT | WILLIAM J. BROAD | November 20, 2009
In a new report, a secretive federal panel has concluded that programs to extend the life of the nation’s aging nuclear arms are sufficient to guarantee their destructiveness for decades to come, obviating a need for a costly new generation of more reliable warheads. The finding, by the Jason panel, an independent group of scientists that advises the federal government on issues of science and technology, bears on the growing debate over whether the United States should ratify the Comprehensive Test Ban Treaty or, instead, prepare for the design of new nuclear arms. Senator Jon Kyl of Arizona and other Republicans have argued that concerns are growing over the reliability of the United States’ aging nuclear stockpile and that the possible need for new designs means that the nation should retain the right to conduct underground tests of new nuclear weapons. The testing issue is expected to flare in the months ahead when the Obama administration submits the test ban treaty for ratification by the Senate, where it faces a tough fight. The White House is building a case that advanced technologies make any additions to the nuclear arsenal unnecessary and would also allow the United States to verify that other countries are refraining from underground testing. Continue reading
NYT |THOM SHANKER & ERIC SCHMITT | November 20, 2009
The commander of military forces protecting North America has ordered a review of the costly air defenses intended to prevent another Sept. 11-style terrorism attack, an assessment aimed at determining whether the commitment of jet fighters, other aircraft and crews remains justified. Senior officers involved in the effort say the assessment is to gauge the likelihood that terrorists may succeed in hijacking an airliner or flying their own smaller craft into the United States or Canada. The study is focused on circumstances in which the attack would be aimed not at a public building or landmark but instead at a power plant or a critical link in the nation’s financial network, like a major electrical grid or a computer network hub. The review, to be completed next spring, is expected to be the military’s most thorough reassessment of the threat of a terrorist attack by air since Al Qaeda’s strikes on Sept. 11, 2001, transformed a Defense Department focused on fighting other militaries and led to the Bush administration’s “global war on terror.” The assessment is partly a reflection of how a military straining to fight two wars is questioning whether it makes sense to keep in place the costly system of protections established after those attacks on the World Trade Center and the Pentagon. Though the last of the air patrols above American cities were discontinued in 2007, the military keeps dozens of warplanes and hundreds of air crew members on alert to respond to potential threats. “The fighter force is extremely expensive, so you always have to ask yourself the question ‘How much is enough?’ ” said Maj. Gen. Pierre J. Forgues of Canada, director of operations for the North American Aerospace Defense Command, or Norad, which carries out the air defense mission within the United States military’s Northern Command. Continue reading
ABC NEWS Business Unit | Nov. 18, 2009
The Wall Street firm that has arguably taken the most heat for its multibillion-dollar employee compensation will donate $500 million for a new program to help small businesses. Goldman Sachs, widely viewed as the biggest bank to suffer the least damage from the world’s financial crisis, said Tuesday it will join forces with billionaire investor and Goldman stakeholder Warren Buffett on “10,000 Small Businesses.” The program will provide capital to small businesses in underserved areas and education aid to small business owners. “Small businesses play a vital role in creating jobs and growth in America’s economy,” Goldman CEO Lloyd C. Blankfein said in a statement released Tuesday. “We are pleased to work with our partners in this initiative to support small business owners, particularly those in underserved communities.”
Goldman Sachs, which received and later paid back $10 billion in federal Troubled Asset Relief Program funds during the financial crisis, has set aside $16.7 billion for employee compensation so far this year and is on track to pay out an average $700,000 per employee. The $500 million program amounts to less than 3 percent of Goldman’s employee compensation pool. There’s been rampant speculation that the bank Continue reading