Treasury Flash Report ~ 1/28/09

Fed Plans to Leave Rates Near Zero for 'Some Time'
The Federal Reserve, acknowledging the economy has continued to deteriorate, signaled Wednesday that it will keep using unconventional tools to cushion the fallout, including keeping a key interest rate at a record low for quite "some time."


The Fed agreed�with one dissent�to keep the targeted range for the federal funds rate between zero and 0.25 percent. The funds rate is the interest banks charge each other on overnight loans.
Economists predict the Fed will leave rates at that range through the rest of this year.
"The economy has weakened further," the Fed said. To provide support, it said it would keep rates at rock bottom levels for "some time."
Having taken the unprecedented step of slashing its key rate to record lows at its previous meeting in December, the central bank pledged anew to look to other unconventional ways to revive the economy.


IMF Sees $2.2 Trillion in Losses Slowing World Growth

The global economy will slow close to a halt this year as more than $2 trillion of bad assets from the U.S. help sink economies from Russia to the U.K., the International Monetary Fund said.
Bank losses worldwide from toxic U.S.-originated assets may reach $2.2 trillion, the IMF said in a report released today, more than the $1.4 trillion that the fund predicted in October. World growth will be 0.5 percent this year, the weakest postwar pace, the fund said in a separate report.
The reports signal that writedowns and losses at banks totaling $1.1 trillion so far are only half of what�s to come and that contractions may deepen. Losses on that scale would leave banks needing at least $500 billion in fresh capital to restore confidence in their balance sheets, the IMF said.
�Unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth,� the IMF said.
The IMF�s latest forecast revises its estimate of world growth down from 2.2 percent in November.
U.S. gross domestic product will contract 1.6 percent, Japan�s will shrink 2.6 percent and the euro area will decline 2 percent in 2009, the IMF said. The fund in November foresaw a 0.7 percent U.S. contraction, with declines of 0.2 percent in Japan and 0.5 percent in the euro zone.
Leading the Group of Seven nations in contraction this year will be the U.K. economy, which the IMF predicted would slide 2.8 percent, compared with the fund�s forecast in November for a 1.3 percent drop.

Good thing this game is cheap! :D
Unless you volunteer to help the wrong people :p

For some reason I feel this was someone trolling to see how long till I posted here.

Banks made bad loans. Some, just because the government would guarantee them. (never should have been the case) So instead of those banks going belly up, our (and other nations) governments have been bailing out these banks to the toon of TRILLIONS of dollars.

The question is why????? It makes you wonder who really runs the world.


"This present window of opportunity, during which a truly peaceful and interdependent world order might be built, will not be open for too long - We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order." David Rockefeller 1994

"The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson." A letter written by FDR to Colonel House, November 21st, l933

"The real rulers in Washington are invisible, and exercise power from behind the scenes." Supreme Court Justice Felix Frankfurter, 1952

"The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States. The Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power political, monetary, intellectual and ecclesiastical. What the Trilateral Commission intends is to create a worldwide economic power superior to the political governments of the nationstates involved. As managers and creators of the system, they will rule the future." U.S. Senator Barry Goldwater in his l964 book: With No Apologies.

"The New World Order will have to be built from the bottom up rather than from the top down...but in the end run around national sovereignty, eroding it piece by piece will accomplish much more than the old fashioned frontal assault." CFR member Richard Gardner, writing in the April l974 issue of the CFRs journal, Foreign Affairs.

"Let me control a peoples currency and I care not who makes their laws..." Meyer Nathaniel Rothchild in a speech to a gathering of world bankers February 12, 1912.The following year, we subscribed to the "services" of the newly incorporated Federal Reserve, headed by Mr. Rothchild.

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." 1836 - Andrew Jackson

"It is to be regretted that the rich and powerful
too often bend the acts of government
to their selfish purposes." 1832 - Andrew Jackson

"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country." 1824 - Andrew Jackson

Andrew Jackson? The 7th President of the USA Andrew Jackson? The Andrew Jackson who died in EIGHTEEN Forty Five?

opps, I fix them.
_________________________________________

I See Dead Bankers!Wall Street has become The Sixth Sense�filled with corpses who think they're still alive. (http://www.slate.com/id/2209893/?from=rss)

Fed moves to help distressed homeowners (http://seattletimes.nwsource.com/html/businesstechnology/2008680008_apfedforeclosurerelief.html?syndication =rss)

Or is it to help the banks and try to keep themselves from loosing money.

Lets not forget who owns the FED. It is the member banks, not the government. However the FED is making the Taxpayers back there buying up all the bad mortgages to try to free up the banks to make new (bad) loans.

Gerald Celente has been correct many times before...let's hope he isn't correct this time.

http://www.youtube.com/watch?v=46MEqEgdLTg

Treasury Flash Report 1/29/2009

U.S. Durable Goods Orders Decline for Fifth Month

Orders for U.S. durable goods fell in December for a fifth month, the longest slide since at least 1992, reflecting a collapse in business investment that�s likely to prolong the recession.
The 2.6 percent drop was worse than economists had forecast, a Commerce Department report showed today in Washington. Excluding automobiles and aircraft, orders decreased 3.6 percent, also more than anticipated. The Labor Department said separately that the number of Americans collecting jobless benefits soared to a record 4.776 million.
Today�s reports reflect efforts by companies from General Motors Corp. to Caterpillar Inc. to downsize amid a pullback in both domestic spending and demand from overseas. The Federal Reserve yesterday warned that a prolonged global downturn may push the U.S. to the brink of deflation.
Stocks Slide
Stocks fell, with the Standard & Poor�s 500 Stock Index down 1.6 percent to 860.53 at 9:33 a.m. in New York. Treasuries were little changed, with benchmark 10-year notes yielding 2.69 percent.
The Labor Department report showed that initial claims for unemployment insurance increased to 588,000 last week, exceeding economists� forecasts, from 585,000 the previous week.
Congress yesterday took a step toward passing the stimulus package that President Barack Obama is pressing to help save or create about 4 million jobs. The House passed an $819 billion package, shifting attention to the Senate. Lawmakers aim to get the legislation to Obama by mid-February.
Economists had projected a 2 percent drop in durable goods orders, according to the median of 75 estimates . The reading for November was revised to a decline of 3.7 percent from a previous estimate of a 1.5 percent fall.
Excluding transportation equipment, orders were forecast to fall 2.7 percent in December.
Annual Fall
For all of 2008, orders for durable goods slumped 5.7 percent, the biggest decrease since the 2001 recession.
Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, decreased 2.8 percent and the previous month�s gain was revised down. Shipments of those items, used in calculating gross domestic product, rose 0.9 percent after falling a greater-than-previously estimated 1.4 percent in November.
Automobile bookings decreased 5.2 percent and orders for commercial aircraft dropped 44 percent.
Boeing Co., the world�s second-biggest commercial-airplane maker, yesterday said a drop in travel and tight credit signals customers may continue to cancel or defer orders in 2009. The Chicago-based company reported a fourth-quarter loss and said it plans to cut 10,000 jobs. It also disclosed that a customer canceled all 15 of its orders for the new 787 Dreamliner plane.

U.S. New-Home Sales Fall to Lowest Level on Record
Sales of new homes in the U.S. fell in December to the lowest level on record, creating an unprecedented glut of unsold properties that casts doubt on any recovery in the industry this year.
Purchases dropped to an annual pace of 331,000, lower than all 70 forecasts in a Bloomberg News survey, Commerce Department figures showed in Washington. Other reports today said orders for durable goods slumped for a fifth month and a record number of Americans were collecting jobless benefits.
The collapse in demand for homes means builders are still constructing a surplus of properties, and signals more pressure on prices. The intensifying crisis will make it harder for President Barack Obama to arrest the industry�s decline with proposed tax breaks and steps to slow mortgage foreclosures.
The Standard & Poor�s Homebuilder Composite Index was down 4.5 percent to 199.63 at 11:08 a.m. New York time. Treasuries fell, with yields on 10-year notes climbing to 2.68 percent from 2.66 percent yesterday.
Unadjusted for seasonal patterns, only 23,000 Americans bought new homes last month, with just 2,000 purchases in the Northeast region.
Glut of Properties
The supply of homes at the current sales rate jumped to a record 12.9 months� worth. That is more than twice as much as the five-to-six months supply that the National Association of Realtors has said is consistent with a stable market.
The housing report showed builders were unable to trim inventories as fast as sales dropped. The number of homes for sale fell 10 percent to a seasonally adjusted 357,000, the fewest since Sept. 2003.
Sales of new houses dropped in all four regions, led by a 28 percent decrease in the Northeast and a 20 percent slump in the West.
New-home purchases, which now account for less than 10 percent of the market, are a timelier indicator than existing sales because they are based on contract signings. Sales of previously owned homes, which make up the rest, are compiled from closings and reflect contracts signed weeks or months earlier.

Can no one do the math? They are spending $171,419 for each unemployed person out there???? This is insanity.

Treasury Flash Report 1/30/09

U.S. Economy: GDP Fell 3.8% in Fourth Quarter, Most Since 1982

The U.S. economy shrank the most in the fourth quarter since 1982 as consumer spending recorded the worst slide in the postwar era, a trajectory that�s likely to continue in coming months.
The 3.8 percent annual pace of contraction was less than forecast, with a buildup of unsold goods cushioning the blow. Excluding inventories, the decline was 5.1 percent, the Commerce Department said today in Washington. A survey of purchasing managers also indicated today that business in January was the weakest in almost 27 years.
Job cuts announced this month by companies from Starbucks Corp. and Pep Boys - Manny, Moe & Jack to Eastman Kodak Co. mean there�ll be little respite in the first half of this year, economists said. The Obama administration used today�s figures to reinforce its call for Congress to pass a stimulus package in excess of $800 billion to arrest the economy�s decline.
�This is a continuing disaster for America�s working families,� Obama said at the White House today. �They need us to pass the American Recovery and Investment Plan,� designed to save more than 3 million jobs, he said. House lawmakers passed the stimulus Jan. 28, moving action to the Senate next week.
Stocks, Treasuries
Stocks slid, after futures rallied initially as some investors were encouraged by the smaller GDP drop than forecast. The Standard & Poor�s 500 Stock Index fell 1.8 percent to 829.99 at 11:27 a.m. in New York. Treasuries advanced, sending benchmark 10-year note yields to 2.82 percent from 2.86 percent late yesterday.
Today�s report underscored the hit to households from the biggest wealth destruction on record. Consumer spending, which accounts for about 70 percent of the economy, dropped 3.5 percent following a 3.8 percent fall the previous three months. It�s the first time decreases exceeded 3 percent back-to-back since records began in 1947.
The Institute for Supply Management-Chicago said today its business barometer decreased to 33.3 from 35.1 the prior month. The index has remained below 50, the dividing line for contraction, for four months. Meanwhile, consumer confidence rose less than forecast this month, a Reuters/University of Michigan index showed. The gauge climbed to 61.2 from 60.1 in December.
Employment Costs
A separate report today showed that employment costs in the U.S. rose at the slowest pace in almost a decade in the fourth quarter as companies limited wage gains and benefits. The Labor Department�s employment-cost index rose 0.5 percent.

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Treasury Flash Report 2/2/09

U.S. Consumer Spending Falls for Sixth Straight Month

Consumer spending in the U.S. fell in December for a record sixth consecutive month, capping the worst year since 1961, a slump that is likely to persist as companies slash payrolls.
The 1 percent drop in purchases was larger than forecast and followed a 0.8 percent decrease in November, the Commerce Department said today in Washington. The Federal Reserve�s preferred measure of inflation was little changed for a third month.
The loss of almost 2.6 million jobs last year and record declines in home values have shaken confidence, indicating sales and prices are likely to keep retreating. President Barack Obama is pushing Congress to approve a stimulus package that includes tax cuts intended to boost consumer spending.
Incomes Drop
Today�s report also showed incomes fell 0.2 percent in December, the third straight decline, after a 0.4 percent decrease the prior month. It was the longest stretch of decreases since the three months ended in January 1954.
The figures raise more concerns about deflation as prices cool. The price gauge tied to spending patterns increased 0.6 percent from December 2007. The Fed�s preferred gauge of prices, which excludes food and fuel, was up 1.7 percent from December 2007, the smallest gain in almost five years.
Consumer spending rose 3.6 percent for all of 2008, the smallest gain since 1961.
Companies are slashing prices to attract shoppers during the recession, a move that is dragging down profits. EBay Inc., the world�s biggest Internet auctioneer, reported its first quarterly decline on Jan. 22. Revenue fell 6.6 percent to $2.04 billion as sellers cut prices and the company boosted promotions to lure more holiday customers.
The decrease in spending pushed the savings rate up to 3.6 percent from 2.8 percent in November. A positive rate suggests consumers are earning more than they are spending.
Disposable Income
Disposable income, or the money left over after taxes, increased 0.3 percent after adjusting for inflation.
Today�s report showed inflation-adjusted total spending dropped 0.5 percent following a 0.3 percent gain in November. Price-adjusted purchases of durable goods, such as autos, furniture, and other long-lasting items, decreased 0.8 percent. Purchases of non-durable goods decreased 1.8 percent, partly reflecting the slump in gasoline, and spending on services, which account for almost 60 percent of all outlays, climbed 0.1 percent.
Consumer spending dropped at a 3.5 percent annual pace in the fourth quarter after decreasing at a 3.8 percent pace in the previous three months, the Commerce Department said Jan. 30. It was the first time since records began in 1947 that declines in spending exceeded 3 percent in consecutive quarters. The economy shrank 3.8 percent, the most since 1982.

Treasury Flash Report 02/03/09

U.S. Pending Home Resales Rise as Prices, Rates Drop

More Americans signed contracts to buy previously owned homes in December for the first time in four months, signaling slumping prices may be boosting demand.
The index of pending home resales climbed 6.3 percent to 87.7, the first increase since August, from a revised 82.5 in November, the National Association of Realtors said in a report today in Washington. Pending sales rose in two of four regions.
Record foreclosures are pushing down home values, making homes more affordable for those buyers able to get financing. Still, restrictive lending rules and further price declines are likely to scare away the majority of purchasers, indicating the real-estate recession will persist for a fourth year in 2009.
Stocks rose following the report, reversing earlier losses, while Treasury securities dropped. The Standard &amp; Poor�s 500 index was up 0.1 percent at 824.89 at 10:28 a.m. in New York. The builder composite index jumped 6.1 percent. The yield on the 10- year note was 2.80 percent, up from 2.72 at the close yesterday.
Record Vacancies
A record 19 million U.S. houses stood empty at the end of 2008, the U.S. Census Bureau said in a report today. The vacancy rate, the share of empty homes for sale, rose to 2.9 percent in the last quarter, the most in data that goes back to 1956.
The pending purchase report showed resales jumped 13 percent in both the South and Midwest regions. Signed purchase contracts declined 3.7 percent in the West and 1.7 percent in the Northeast.

Treasury needs to borrow $493B in current quarter (http://www.iht.com/articles/ap/2009/02/02/business/NA-US-Treasury-Borrowing.php)

Treasury Flash Report 2/4/09


U.S. Economy: Service Industries Contract at a Slower Pace


U.S. service industries shrank at a slower pace than forecast in January, a positive trend threatened by soaring joblessness that will likely cause further cutbacks in consumer spending.
The Institute for Supply Management�s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 42.9, still below the reading of 50 that signals contraction. Anthony Nieves, who heads the ISM survey, said stabilization is unlikely until payrolls halt their �freefall.�
Time Warner Inc., the world�s largest media company, Walt Disney Co. and United Parcel Service Inc. all reported weaker revenue and profits this week than forecast, underscoring the hit to services from the deepest slide in consumer spending in the postwar era. Purchases may keep falling after a report today indicated employers cut more than half a million jobs in January.
Stocks rose and Treasury securities fell on growing speculation President Barack Obama�s guarantee for illiquid bank assets will shore up the financial system. The Standard &amp; Poor�s 500 index rose 1 percent to 846.81 at 12:12 p.m. in New York. The yield on the benchmark 10-year note rose to 2.92 percent from 2.89 percent late yesterday.
Job Cuts
Companies in the U.S. cut an estimated 522,000 jobs in January, a 12th consecutive reduction, a report from ADP Employer Services today showed. Job cuts announced by U.S. employers more than tripled last month from a year earlier, led by cutbacks at retailers following the worst holiday-shopping season in four decades, the Chicago-based placement firm Challenger, Gray &amp; Christmas Inc. also said today.
The ISM group�s index of new orders for non-manufacturing industries rose to 41.6 from 38.9 the prior month. Its gauge of employment decreased to 34.4 from 34.5 in December, and a measure of prices paid climbed to 42.5 from 36.1.

Treasury Flash Report 2/5/09



U.S. Economy: Jobless Claims Soar, Labor Productivity Rises



The number of Americans filing first- time jobless claims reached a 26-year high and companies squeezed more productivity out of their remaining staff, underscoring the deepening deterioration in the labor market.

Initial applications for unemployment benefits climbed more than forecast to 626,000 last week, a Labor Department report showed today in Washington. Productivity, a measure of employee output per hour, rose at a 3.2 percent annual rate in October to December as employers cut 1.5 million from payrolls and slashed working hours by the most since 1975, the department said.

The jobless-claims figures may foreshadow a steeper slide in payrolls in tomorrow�s January employment report. The losses threaten to exacerbate the slump in consumer spending and risk further personal bankruptcies and loan defaults.

Treasuries climbed after the reports. Benchmark 10-year note yields fell to 2.89 percent at 11:29 a.m. in New York, from 2.94 percent late yesterday. The Standard &amp; Poor�s 500 Index rose 0.6 percent to 837.11 as a rally in technology shares overshadowed the deteriorating labor-market data. .

Factory Orders

A separate Commerce Department report today showed that orders placed with U.S. factories fell for a fifth month in December as domestic and international demand crumbled. Bookings tumbled 3.9 percent, more than forecast, after a 6.5 percent drop in November. Excluding transportation equipment such as cars and aircraft, orders fell 4.4 percent after a 6 percent decrease.

Payroll Forecast

The Labor Department�s payroll report, due tomorrow, is projected to show the economy lost an additional 540,000 jobs in January as the unemployment rate jumped to a 16-year high of 7.5 percent, according to the median forecast. The U.S. lost almost 2.6 million jobs in 2008, the most since 1945.

The surge in firings and reduction in hours has forced those employees still working to become more efficient. For all of 2008, productivity climbed 2.8 percent, the biggest gain in four years.

�The increase in productivity is not necessarily good news,� said Dana Saporta, an economist in New York with Dresdner Kleinwort, which forecast efficiency would rise 3 percent last quarter. �Workers who are left with jobs are working harder.�

Economists had forecast productivity would rise at a 1.6 percent annual pace, according to the median of 60 forecasts .

Factory Slump

Manufacturers didn�t fare as well as other parts of the economy. The productivity of factory workers dropped at a 3 percent pace in the fourth quarter, sending labor costs up at a 13.3 percent rate.

Cummins Inc., the maker of more than a third of North America�s heavy-duty truck engines, is offering voluntary retirement packages to as many as 350 hourly employees in southern Indiana.

�The demand for our engines and related products continues to fall, and despite the significant steps already taken to align our costs with that demand, permanent job reductions have become necessary,� Jim Kelly, president of the engine unit, said in a Feb. 2 statement.

The rebound in productivity last year may ease concern among some economists that the efficiency surge that began in 1996 was waning.

In the 1990s, former Federal Reserve Chairman Alan Greenspan was one of the first to recognize productivity was accelerating because of the increased use of computers and the Internet, and that the improvement would contain inflation even as the economy gained strength and unemployment stayed low. The realization allowed the Fed to keep interest rates little changed from 1996 to 1999.

Treasury Flash Report 02/06/09

U.S. Economy: Jobless Rate Soars and Payrolls Plunge by 598,000

The unemployment rate reached the highest level since 1992 and payrolls tumbled in January, with millions more likely to lose their jobs before a stimulus and emergency-lending programs temper the U.S. economy�s freefall.
The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department said today in Washington. Payrolls fell by 598,000, the biggest monthly decline since December 1974. Losses spanned almost all industries, from construction and manufacturing to retailing, trucking, media and finance.
Treasuries slipped while stocks headed higher after the figures, indicating some investors feared an even worse January employment report. The Standard &amp; Poor�s 500 Stock Index gained 1.6 percent to 859.18 at 10:37 a.m. in New York. Benchmark 10- year note yields rose to 2.95 percent from 2.90 percent late yesterday.
The loss of jobs, at employers ranging from manufacturers like Caterpillar Inc. to retailers such as Macy�s Inc., is shattering consumer confidence and crippling spending. Household purchases fell more than 3 percent at an annual rate in the past two quarters, the first time that�s happened since at least 1947.
With revised declines of 577,000 for December and 597,000 for November, revisions subtracted 66,000 workers from previously reported figures for the last two months of 2008. The 3.57 million jobs lost since the recession started in December 2007 marks the biggest employment slump of any economic contraction in the postwar period.
Worst on Record
Last month�s losses also cap the first time since records began in 1939 that job cuts exceeded half a million in three consecutive months.

US Treasury to pump billions more into banks (http://business.timesonline.co.uk/tol/business/economics/article5683418.ece)

Treasury Flash Report 02/09/2009

Geithner Plans to Bring in Private Investment for Toxic Assets

Treasury Secretary Timothy Geithner is seeking to draw investors into the U.S. financial-rescue program, aiming to add private funding as a new component of proposals to address the toxic debt clogging banks� balance sheets.
Aides worked through the weekend to complete the package that Geithner will announce tomorrow in Washington, which was delayed by a day. Aspects of the plan that have been settled include a new round of injections of taxpayer funds into banks, targeted at those identified by regulators as most in need of new capital, people briefed on the matter said.
The toughest issue has been the one Geithner�s predecessor failed to address: the illiquid assets that caused the credit crunch. A leading proposal is a so-called aggregator bank, featuring investors such as hedge funds and private equity, that may issue Federal Deposit Insurance Corp.-backed debt, the people said. It�s unclear how big a role there�ll be for guarantees of securities that stay on banks� balance sheets.
�We have to reach a point where investors and consumers have greater confidence in our financial system,� Philadelphia Federal Reserve Bank President Charles Plosser said in an interview. �Without that, these institutions will not be able to attract new capital or be able to fully resume their important role in providing credit.�

Treasury Flash Report 2/10/09

U.S. Wholesale Inventories, Sales Fell in December

Inventories at U.S. wholesalers fell twice as much as forecast in December as businesses tried to keep up with plummeting sales.
The 1.4 percent decline in the value of stockpiles followed a revised 0.9 percent decrease in the prior month, the Commerce Department said today in Washington. It was the fourth straight monthly drop, the longest such stretch in almost seven years. Sales fell 3.6 percent after a 7.3 percent decline.
Wholesalers had enough goods on hand to last 1.27 months at the current sales pace, the highest level since 2002. Sliding demand in the U.S. and abroad signals a further pullback in production as companies try to work through their stocks of unsold goods at warehouses, worsening the recession.

Treasuries rose, pushing yields lower. The benchmark 10-year note yielded 2.92 percent as of 10:04 a.m. in New York, down 6 basis points from yesterday. Stocks were lower.
Inventories at wholesalers were forecast to drop 0.7 percent after an initially reported 0.6 percent decrease in November, according to the median prediction of 35 economists surveyed. Estimates ranged from declines of 0.2 percent to 1.5 percent.
Factory Inventories
Wholesalers make up about 25 percent of all business stockpiles. Factory inventories, which account for about a third of the total, fell 1.4 percent in January, Commerce reported on Feb. 5. Retail stockpiles, which make up the rest, will be included in the Feb. 12 business inventories report.
The economy shrank 3.8 percent in the fourth quarter, the most since 1982, as consumer spending continued to slide. Inventories grew at a $6.2 billion pace in the quarter, the first gain in more than a year.
Economists say the economy may shrink at an even faster rate this quarter as businesses focus on inventory reduction. Manufacturing shrank further in January, the Institute for Supply Management�s factory index showed last week.

Treasury Flash Report 2/11/09

U.S. Economy: Trade Deficit Narrows as Imports, Exports Plunge

The U.S. trade deficit narrowed in December to the smallest in almost six years, with both exports and imports declining for the fifth straight month as consumers worldwide pulled back their spending.
The gap between imports and exports shrank 4 percent to $39.9 billion, from a revised $41.6 billion deficit in November that was wider than previously estimated, the Commerce Department said today in Washington.
Crumbling demand from overseas may reinforce calls from some U.S. firms for a �Buy American� provision in President Barack Obama�s stimulus plan, while nations including France and Russia take steps to protect local jobs and production. Trade flows are likely to keep contracting as the bite from job losses and the credit crunch tightens worldwide.
The threat of trade barriers as governments seek to aid struggling industries and workers is emerging as a key theme for this week�s meeting in Rome of finance ministers and central bankers from the Group of Seven nations.
For all of 2008, the U.S. trade deficit narrowed to $677.1 billion from $700.3 billion in the previous year.
Stocks today recouped some of their losses from yesterday, when concern about a lack of detail in the Obama administration�s financial-rescue plan spurred the biggest sell-off in three weeks. The Standard &amp; Poor�s 500 Stock index advanced 0.8 percent to 833.34 at 11:50 a.m. in New York.
Imports in December dropped 5.5 percent to $173.7 billion, the lowest since September 2005, from $183.9 billion the prior month as U.S. consumers bought fewer foreign-made cars and trucks and oil prices fell. Purchases of clothing, furniture and household appliances from outside the U.S. also declined, further reflecting shrinking demand for foreign-made goods.

Treasury Flash Report 02/12/09

U.S. Economy: Retail Sales Unexpectedly Halt Slide
Sales at U.S. retailers unexpectedly halted a six-month slide in January, an advance that may not be sustained after the number of Americans collecting jobless benefits reached the highest on record.
The 1 percent gain in purchases reflected higher gasoline prices and more spending on clothing and food, the Commerce Department said today in Washington. Excluding cars, the gain was 0.9 percent. The Labor Department reported that 4.8 million people are now collecting unemployment insurance.
An accelerating decline in the job market, along with a record destruction of household wealth with the slide in home values and stocks mean consumers are likely to resume cutbacks. Stocks tumbled on concern that President Barack Obama�s stimulus package will be insufficient to assure a swift economic recovery.
Inventories Fall
A separate Commerce Department report today showed that inventories at U.S. businesses fell more than forecast in December as companies sought to dump their unsold goods. Inventories at factories, retailers and wholesalers dropped 1.3 percent. Sales declined 3.2 percent.
The retail figures aren�t adjusted for inflation, so price increases can influence the data. The average cost of a gallon of regular gasoline last month rose by 10 cents to $1.78 a gallon, according to AAA. Receipts at filling stations increased 2.6 percent in January, the first gain in six months, following a 16 percent decline in December.
Today�s report showed sales at automobile dealerships and parts stores rose 1.6 percent, the first gain since August, after decreasing 2 percent.
Demand for Cars
Still, demand for automobiles has crumbled as banks tighten lending standards and consumers hunker down. Sales plunged 55 percent at Chrysler LLC and sank 49 percent at General Motors Corp. last month as car loans became scarce after credit seized up late last year.
Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product figures for consumer spending, sales rose 1.2 percent in January, following a 1.7 percent decrease in December. The government uses data from other sources to calculate the contribution from the three categories excluded.
Sales also rose for electronics, appliances, clothing and food and beverages. Sales declined at building materials stores, furniture outlets and department stores.
Purchases at non-store retailers, which include online and catalog sales, rose 2.7 percent.

Treasury Flash Report 2/13/09

U.S. Economy: Consumer Sentiment Approaches Lowest Since 1980

Confidence among U.S. consumers approached its lowest level since 1980 this month after job losses mounted and the slide in home values deepened.
The Reuters/University of Michigan preliminary index of consumer sentiment fell for the first time in three months, to 56.2. The gauge reached a low of 55.3 in November.
The deterioration in confidence underscores the challenge President Barack Obama faces in turning around an economy that analysts see heading toward its worst year since 1946. Today�s report also indicates households will keep boosting savings as a cushion against unemployment or pay cuts.
Stocks were little changed, while Treasuries slipped today. The Standard &amp; Poor�s 500 Stock Index was fell 0.3 percent at 832.81 as of 11:39 a.m. in New York. Benchmark 10-year note yields rose to 2.85 percent, from 2.78 percent.

Treasury Flash Report 2/17/09

Oil Falls Below $35 as Deepening Recession Cuts Fuel Demand

Crude oil fell below $35 a barrel in New York on speculation a deepening recession in the U.S., Europe and Asia will reduce fuel demand.
Oil declined as much as 8.1 percent as stocks dropped on concern banks may face ratings downgrades and further losses as economies slow. Manufacturing in New York this month fell to the lowest level since records began in 2001, the Federal Reserve Bank of New York�s general economic index showed.
Crude oil for March delivery fell $2.95, or 7.9 percent, to $34.56 a barrel at 11:11 a.m. on the New York Mercantile Exchange. Prices are down 22 percent this year. There was no floor trading yesterday because of the Presidents Day holiday and any electronic transactions will be booked for settlement today.
Prices for delivery in future months are higher than for earlier ones, a situation known as contango, allowing buyers to profit from hoarding oil. The price of oil for delivery in April is $4.17 a barrel higher than for March. December futures are up $14.30 from the front month.
Fuel Stockpiles
Gasoline stockpiles probably declined 300,000 barrels in the week ended Feb. 13, the survey showed. Supplies of distillate fuel, a category that includes heating oil and diesel, dropped 1.5 million barrels.
Gasoline futures for March delivery declined 7.46 cents, or 6.2 percent, to $1.1317 a gallon in New York. Heating oil for March delivery fell 10.16 cents, or 7.8 percent, to $1.1984 a gallon. Futures touched $1.1951, the lowest since Dec. 24.
The average U.S. pump price for regular gasoline fell 0.5 cent to $1.96 a gallon, AAA, the nation�s largest motorist organization, said on its Web site today. Prices have declined 52 percent from the record $4.114 a gallon reached on July 17.
The MSCI World Index decreased 3.7 percent to 800.69, extending its 2009 retreat to 13 percent. The gauge of 23 developed markets has dropped for six straight days. The Standard &amp; Poor�s 500 Index decreased 3.8 percent to 795.35, dropping below 800 for the first time since November.

Treasury Flash Report 2/18/09

U.S. Economy: Factory Output, Housing Starts Plunged in January

Manufacturing and housing in the U.S. collapsed in January, government reports showed, as the Obama administration unveiled new proposals to stem what may become the worst recession in the postwar era.
The Federal Reserve�s industrial production index dropped 1.8 percent to 101.3, the lowest level in more than five years, the central bank reported today in Washington. Housing starts plunged 17 percent to an annual rate of 466,000, the fewest since records began in 1959, Commerce Department data showed.
General Motors Corp. has asked for new loans and said it plans to cut 47,000 more jobs worldwide as sales plunge, while builders struggle to trim the glut of homes propelled by the surge in foreclosures. President Barack Obama pledged $275 billion in a program that includes cutting mortgage payments and encourages loan modifications to keep Americans in their homes.
Stocks gained on speculation the president�s plan will help ameliorate the decline in housing. The Standard &amp; Poor�s 500 Index advanced 0.1 percent to 790.10 as of 12:35 p.m. in New York. Treasury securities fell.
Economists forecast industrial production would drop 1.5 percent. Estimates ranged from a decline of 3.1 percent to a gain of 0.5 percent.
Idle Capacity
The proportion of plants in use fell to 72 percent, the lowest since February 1983, the Fed�s report also showed.
Factory output, which accounts for about four-fifths of industrial production, decreased 2.5 percent, led by a 40 percent slump at automakers. Auto assemblies fell to a 3.9 million annual rate, the fewest since record-keeping began in 1967.
General Motors yesterday asked the U.S. government for as much as $16.6 billion in new loans, more than doubling the aid to date, and said it needs some of the cash next month to survive. Chrysler LLC, also propped up with federal assistance, said it�s seeking $5 billion more from the government and will reduce 3,000 more positions.
Fewer Permits
The report from Commerce showed building permits, a sign of future construction, dropped 4.8 percent to a 521,000 annual pace.
The decline in housing starts exceeded the median estimate of economists surveyed by Bloomberg News, which anticipated a 529,000 pace.
Construction of single-family homes decreased 12 percent to a 347,000 rate, today�s report showed. Work on multifamily homes, such as townhouses and apartment buildings, dropped 28 percent from the prior month to an annual rate of 119,000.
Housing starts declined in all four regions, led by a 43 percent plunge in the Northeast and a 29 percent drop in the Midwest.


U.S. Import Prices Fall 1.1%; Excluding Oil Down 0.8%

Prices of goods imported into the U.S. fell in January for a sixth consecutive month on lower commodity costs and slumping demand as the global economic slowdown intensified.
The import-price index decreased 1.1 percent, the smallest drop since it last rose in July, after a revised 5 percent drop in December, the Labor Department said today in Washington. Prices from a year earlier slumped 12.5 percent, the most since records began in 1982.
Weakening U.S. demand has spread to Europe and Asia, causing companies such as Samsung Electronics Co. Ltd. to cut prices as manufacturers work down inventories. Falling costs have raised concern among some Federal Reserve officials that deflation might take root, worsening the downturn.
Import prices in January were forecast to fall 1.2 percent after an initially reported 4.2 percent drop the prior month, according to the median estimate of 52 economists surveyed by Bloomberg News. Forecasts ranged from declines of 4.2 percent to a gain of 1.2 percent.
Prices excluding petroleum dropped declined 0.8 percent in January from a month earlier.

Treasury Flash Report 02/19/2009

U.S. Economy: Producer Prices Rise, Jobless Rolls Set a Record

Producer prices in the U.S. climbed more than forecast in January, a gain that�s unlikely to continue as other figures showed further deterioration in manufacturing and the job market.
Wholesale costs rose 0.8 percent, with prices excluding food and fuel advancing 0.4 percent, the Labor Department said today in Washington. The department also reported that the number of Americans collecting unemployment benefits surged to 4.99 million two weeks ago. The Philadelphia Federal Reserve Bank said manufacturing in its region shrank the most since 1990.
Inflation is likely to remain contained for some years by the prolonged U.S. recession, according to projections from Fed policy makers released yesterday. Wal-Mart Stores Inc. today said it will reintroduce store-brand groceries to entice consumers tightening household budgets.
Some Fed officials were concerned over a risk of deflation at last month�s policy meeting, according to minutes of the gathering released by the central bank yesterday. The Fed has injected an unprecedented amount of cash and loans into the financial system in an effort to stem the economy�s decline.
Leading Indicators
Those injections have caused a surge in the supply of money, which spurred a bigger-than-forecast gain in the Conference Board�s index of leading economic indicators in January. The gauge rose 0.4 percent, the most since December 2006, the New York-based research group said today.
Most U.S. stocks fell following the reports, sending the Standard &amp; Poor�s 500 index down 0.4 percent to 785 at 12:00 p.m. in New York. Treasuries dropped, with the yield on the benchmark 10-year note rising to 2.79 percent from 2.76 percent late yesterday.
Makers of autos, communications gear and pharmaceuticals were among the industries boosting prices last month, the report from Labor showed. Passenger car prices rose 0.3 percent, communications equipment jumped a record 1.3 percent and drug companies boosted prices by 1.1 percent for a second month.
Wholesale food costs fell 0.4 percent in January, a second consecutive drop, the government said. Wal-Mart�s move to reintroduce its Great Value line may intensify pressure on food manufacturers to hold down prices and to develop competitive new products because of their reliance on sales through Wal-Mart�s stores.
Fuel prices also rose last month, climbing 3.7 percent, according to Labor�s figures. Crude oil on the New York Mercantile Exchange, which surged to a record $147.27 a barrel in July, plunged 71 percent to an average $42 in December. Oil costs held close to that level in January, before sliding again so far this month.
Job Losses
Rising joblessness argues against continued price increases. Total unemployment benefit rolls surged by 170,000 in the week ended Feb. 7, according to Labor, and first-time applications were unchanged at 627,000 last week, higher than economists projected.
General Motors Corp., the largest U.S. automaker, said this week it will cut about 47,000 more jobs worldwide as it sheds brands and seeks as much as $16.6 billion in new loans to avoid bankruptcy. Chrysler LLC, propped up like GM with federal assistance, said it�s seeking $5 billion more from the government and will shed 3,000 more positions.
The Fed Bank of Philadelphia�s general economic index dropped to minus 41.3 this month, lower than forecast, compared with minus 24.3 in January, the bank said today. Negative numbers signal contraction. Measures of employment and sales plunged to the lowest levels since the Philadelphia Fed�s records began in 1968.

Treasury Flash Report 2/19/09

Stocks Drop Around the World; Stoxx 600 Falls to 6-Year Low

Stocks tumbled around the world, sending the Standard &amp; Poor�s 500 Index to its biggest weekly drop since November, on concern the deepening recession will force banks to seek more government aid. Europe�s Dow Jones Stoxx 600 Index slid to a six-year low, and Japan�s Topix Index declined to the worst level since 1984.
Treasuries rallied and gold climbed above $1,000 an ounce.
Citigroup Inc. and Bank of America Corp. lost more than 16 percent on concern that the U.S. may take over both banks, which combined received $90 billion in government aid in four months. Anglo American Plc decreased 19 percent as the mining company suspended its dividend and share buybacks. Bridgestone Corp., the world�s largest tiremaker, fell 7.4 percent after saying profit will slide 71 percent this year.
The MSCI World Index sank for a ninth straight day, retreating 2.6 percent to 769.46 at 11:37 a.m. in New York. The index of 23 developed countries has lost 8 percent this week.
The S&amp;P 500 slid 2 percent, extending its weekly slump to 6.8 percent. The benchmark index for American equities is 1.7 percent away from its 11-year low of 752.44 reached Nov. 20. Treasuries headed for a second straight weekly gains, gold rose above $1,000 an ounce for the first time since March 2008 in New York, and the yen climbed against the dollar and euro as investors sought assets seen as havens.
Euro Drops
The euro also dropped against the dollar. European Central Bank President Jean-Claude Trichet said at a conference in Paris that the global credit crisis poses a �serious challenge� to the financial system and economic policy makers around the globe.
The MSCI World has tumbled 51 percent since the start of last year as credit-related losses at financial firms worldwide climbed to $1.1 trillion and Europe, the U.S. and Japan fell into the first simultaneous recessions since World War II.
The gauge of developed countries extended its retreat this month as companies from Electricite de France SA to Diageo Plc posted disappointing results and U.S. Treasury Secretary Timothy Geithner failed to convince investors that his plan to rescue U.S. banks will work.
Europe�s Stoxx 600 closed down 5.94, or 3.2 percent, to 177.45, a six-year low, as UBS AG tumbled. The MSCI Asia Pacific Index lost 2.2 percent, led by Qantas Airways Ltd. after Moody�s Investors Service cut its debt rating.

U.S. Economy: Consumer Prices Rise for First Time in Six Months
The cost of living in the U.S. rose in January for the first time in six months after gasoline prices stabilized and loss-ridden retailers pushed through increases.
The consumer price index rose 0.3 percent, as forecast, Labor Department data showed today in Washington. Excluding food and fuel, the so-called core rate, prices advanced 0.2 percent, due to autos, clothing, and medical care. The CPI was unchanged on an annual basis -- the first time it hasn�t risen since 1955.
Prices may decline in coming months as more companies follow Wal-Mart Stores Inc. and Macy�s Inc. in offering discounts as the economy sinks into what may be the worst recession in the postwar era. The Federal Reserve this week said some of its officials were concerned about a rising risk of deflation, or a prolonged drop in prices that erodes profits and hurts lenders.
Treasuries, which had risen earlier in the day, remained higher after the report. Yields on benchmark 10-year notes dipped to 2.75 percent at 11:19 a.m. in New York from 2.86 percent late yesterday. Stocks fell, with the Standard &amp; Poor�s 500 Index sliding 1.9 percent to 764.12.

Treasury Flash Report 2/23/09

U.S. Stocks Fall, Sending Market Below Lowest Close Since 1997

U.S. stocks fell, sending the Standard &amp; Poor�s 500 Index below its lowest close in 12 years, as concern that the deepening recession will erode earnings offset the government�s pledge to give more capital to banks.
Hewlett-Packard Co. and Intel Corp. slid at least 4.6 percent as Morgan Stanley said technology stocks are the most vulnerable among economically sensitive industries. Steelmakers declined after UBS AG said the group has increased output too quickly. Bank of America Corp. rose 5 percent and Citigroup Inc. climbed 8.2 percent as concern eased that the U.S. government will seize control of the lenders.
The S&amp;P 500 lost 2.4 percent to 751.94 at 1:07 p.m. in New York, below its lowest close since April 1997. The Dow Jones Industrial Average decreased 152.68 points, or 2.1 percent, to 7,212.99, below its lowest close since October 1997. The Russell 2000 Index lost 2.8 percent.
The S&amp;P 500 has fallen almost 17 percent in 2009, the worst start to a year on record, as President Barack Obama and Treasury Secretary Timothy Geithner failed to assuage investor concerns with an $787 billion economic stimulus plan comprised of tax breaks and government spending.
Financial shares led stocks higher at the open after U.S. regulators said they will begin examining which banks have enough capital to survive a deeper recession. Banks that need more funds after so-called stress tests and cannot raise the money from private investors will be able to tap taxpayer funds.

Treasury Flash Report 3/2/09

U.S. Consumer Spending Rises After Six Straight Drops

Consumer spending rose in January for the first time in seven months as Americans took advantage of post-holiday discounts, a gain that�s unlikely to last because of the surge in joblessness.
The 0.6 percent increase was larger than anticipated and followed a 1 percent decrease in December, the Commerce Department said today in Washington. The report showed the Fed�s preferred measure of inflation dropped in January.
Retailers from J.Crew Group Inc. to Saks Inc. and Limited Brands Inc. have cut jobs in the past week, anticipating a further deterioration in spending and contributing to the deepest employment slump since the end of World War II. Stock-indexes reached the lowest levels in more than a decade as investors soured on the economy�s outlook.
The Standard &amp; Poor�s Stock Index fell 2.3 percent to 717.89 at 10:21 a.m. in New York after touching a 13-year low. Benchmark 10-year Treasury yields dipped to 2.94 percent from 3.02 percent at last week�s close. The dollar advanced 0.5 percent to $1.2610 on a jump in demand for the U.S. currency as a haven.
Another report showed manufacturing in the U.S. contracted in February at a slower pace than the month before as factories cut production to match collapsing sales. The Institute for Supply Management�s factory index rose to 35.8 last month from 35.6 in January. Readings less than 50 signal contraction.
Personal income climbed 0.4 percent, pushed up by pay increases to government employees and cost-of-living adjustments to federal transfer payments, today�s report showed. Salaries and wages fell 0.2 percent, a third consecutive decrease.
Disposable income, or the money left over after taxes, increased 1.5 percent after adjusting for inflation, the most since May.
President Barack Obama is trying to stem what may become the worst recession in seven decades with a stimulus plan that the administration estimates will create or save 3.5 million jobs and with mortgage initiatives.
The package includes tax cuts for most U.S. families and allocates billions of dollars toward cities to rebuild crumbling infrastructure while creating jobs. Last month he also introduced a plan to help as many as 9 million people restructure their mortgages to avoid foreclosure.
Inflation Measure
Commerce Department figures showed a price gauge tied to spending patterns increased 0.7 percent from January 2008, down from a 0.8 percent increase in the 12 months ended in December. The Fed�s preferred gauge of prices, which excludes food and fuel, advanced 1.6 percent from a year earlier, the smallest gain since December 2003.
Adjusted for inflation, spending increased 0.4 percent. Price-adjusted purchases of durable goods, such as autos, furniture, and other long-lasting items, rose 0.2 percent. Purchases of non-durable goods climbed 0.7 percent, and spending on services, which account for almost 60 percent of all outlays, rose 0.3 percent.
J.C. Penney Co., the third-largest U.S. department-store chain, on Feb. 20 forecast its first quarterly loss in almost five years. The company said it�s cutting inventory and halving the number of new stores it will open this year to contend with lower spending on clothing, jewelry, linens and rugs. Sales dropped 9.9 percent in the three months ended Jan. 31.
Spending Patterns
The savings rate climbed to 5 percent, the highest level in almost 14 years. A positive rate indicates consumers are earning more than they are spending.
Federal Reserve Chairman Ben S. Bernanke last week said the U.S. economy is in a �severe� contraction and warned the recession may last into 2010 unless policy makers can stabilize the financial system.
The economy contracted at a 6.2 percent annual rate in the fourth quarter, the weakest reading since 1982, the Commerce Department said on Feb. 27. Consumer spending fell at a 4.3 percent pace, the most in almost three decades.
Economists at Morgan Stanley in New York last week projected the economy would shrink at a 5.9 percent pace in the first three months of the year. That would make the six months through March the worst two quarters since 1957-1958.

U.S. ISM Manufacturing Drops for 13th Straight Month
Manufacturing in the U.S. contracted in February for a 13th consecutive month as factories cut production to match collapsing sales.
The Institute for Supply Management�s factory index rose to 35.8 last month from 35.6 in January. Readings less than 50 signal contraction. Another report showed consumer spending rose more than expected in January after six straight declines as Americans took advantage of post-holiday discounts.
Factories are cutting jobs and scaling back on output and investment as the housing and credit crises squeeze global demand for everything from cars to appliances.
�Manufacturing is struggling and certainly the indication we have right now is it will continue to struggle for months to come,� Norbert J. Ore, chairman of the ISM�s manufacturing survey said on a conference call with reporters. �Manufacturing is still operating at relatively low rates.�
The ISM�s gauge of new orders fell to 33.1 from 33.2 the prior month. ISM�s export orders gauge held at 37.5.

Thanks for the treasury reports. I actually may be the only person who reads them on this board. But then probably no one reads a majority of my posts either.

Treasury Flash Report 3/3/09

Pending U.S. Home Resales Slump More Than Forecast

Fewer Americans than forecast signed contracts to buy previously owned homes in January as the housing slump deepened at the start of its fourth year.
The index of pending home resales fell 7.7 percent after a 4.8 percent gain in December, the National Association of Realtors said today in Washington.
A lack of credit and record foreclosures that are pushing property values even lower may keep prospective buyers out of the market for much of 2009. President Barack Obama has pledged to keep more Americans in their homes and create jobs, and Federal Reserve Chairman Ben S. Bernanke today said policy makers may need to expand aid to the banking system.
Economists forecast a 3.5 percent drop in pending sales after an originally reported gain of 6.3 percent in December, according to the median forecast of 32 economists. Estimates ranged from declines of 0.8 percent to 5 percent.
Policy makers may need to boost aid to banks beyond the $700 billion already approved and take other aggressive measures even at the cost of soaring fiscal deficits, Bernanke said in the text of testimony before the Senate today. The chairman last week warned the recession may last into 2010 unless policy makers can stabilize the financial system.
Leading Gauge
Stocks held gains following Bernanke�s comments and Treasury securities fell. The Standard &amp; Poor�s 500 index rose 0.7 percent to 705.81 at 10:21 a.m. in New York. The yield on the benchmark 10-year note rose to 2.94 percent from 2.86 percent late yesterday.
Pending resales are considered a leading indicator because they track contract signings. The Realtors� existing-home sales report tallies closings, which typically occur a month or two later. The pending index was first published in March 2005 and included data going back to January 2001.
The group�s index decreased to 80.4 in January, the lowest level since records began.
Three of four regions dropped, led by a 13 percent slump in the Northeast and a 12 percent slide in the South. Pending sales increased 2.4 percent in the West.
Compared with January 2008, pending sales decreased 6.4 percent.
Sales of previously owned homes, which account for about 90 percent of the market, fell in January to the lowest level since 1997, according to the Realtors group. New-home purchases, which make up the rest, plunged to the lowest level since records began in 1963, Commerce Department figures showed.
Prices Fall
The median price for existing and new houses decreased in January from a year ago, the reports showed.
Falling prices and lower borrowing costs have brought more homes with reach of buyers. The NAR�s affordability index jumped to 166.8 in January, the highest level since records began in 1970.

Treasury Flash Report 03/04/09

U.S. Economy: Contraction in Services, Payroll Losses Deepen

Service industries shrank further in February and companies stepped up staff cuts in the U.S., offering no sign the pace of the economy�s decline is abating.
The Institute for Supply Management�s index of non- manufacturing businesses, which make up almost 90 percent of the economy, fell to 41.6 from 42.9 in January. Readings below 50 signal contraction. The ADP Employer Services survey showed employers cut a larger-than-projected 697,000 jobs last month.
Today�s figures indicate the economy�s contraction this quarter may be at least as big as the 6.2 percent annualized slide in the last three months of 2008. The job data also reinforce forecasts for a Labor Department report in two days to show the highest unemployment rate since 1984.
Stocks still climbed today, bolstered by Chinese authorities considering additional stimulus measures to help spur that nation�s growth. The Standard &amp; Poor�s 500 Stock Index rose 2.5 percent to 713.43 at 11:30 a.m. in New York. Benchmark 10-year Treasury yields jumped to 3.02 percent from 2.88 percent late yesterday.
Home Values
More than 8.3 million Americans owed more on their mortgage loans in the fourth quarter than their homes were worth as the recession cut values by $2.4 trillion last year, a report today from First American CoreLogic said. Another 2.2 million borrowers will be underwater if prices decline another 5 percent, said the Santa Ana, California-based seller of mortgage and economic data.
The Treasury today issued eligibility guidelines for homeowners seeking federal aid that will allow troubled borrowers to lower mortgage rates to as low as 2 percent. The rules require applicants to fully document their income with pay stubs and tax returns, and sign an affidavit attesting to �financial hardship,� the Treasury said.
ISM�s measure of employment for non-manufacturing businesses climbed to 37.3 from a record-low 34.4 in January. Economists predict payrolls dropped by 650,000, the most since 1949, and the jobless rate surged to 7.9 percent, according to the median survey estimates before Labor�s March 6 employment report.
Areas Shrinking
Wholesalers, retailers and management companies were among the 14 service industries that shrank the most last month, ISM said. Only one area, arts and entertainment, expanded in February.
Companies from retailer J.Crew Group Inc. to financial- services firm JPMorgan Chase &amp; Co. have slashed payrolls and spending as consumers retrench, fueling more cutbacks and weakening confidence further.
JPMorgan said Feb. 26 it will eliminate 2,800 jobs at Washington Mutual through attrition, bringing to 12,000 the total number of positions lost since the bank bought the failed thrift in September.
J.Crew said Feb. 27 that it is cutting about 95 jobs and suspending matching contributions to employee retirement-savings plans, following companies such as Saks Inc., Macy�s Inc. and Limited Brands Inc., which have recently reduced employment to control costs.
Job cuts announced by U.S. employers more than doubled in February from the same month last year, placement firm Challenger, Gray &amp; Christmas Inc. also said today.
The U.S. economy�s contraction in the fourth quarter was the biggest since 1982, the Commerce Department said last week. Consumer spending dropped at a 4.3 percent rate, the most since 1980. Economists say the current recession may turn out to be the worst in seven decades.
A report two days ago showed consumers took advantage of retailers� post-holiday discounts. Personal spending rose 0.6 percent in January, the first increase in seven months, the Commerce Department said.
Americans collecting jobless benefits reached the highest on record last month, and the Conference Board�s index of consumer confidence plunged to a record-low 25, the New York-based group said on Feb. 24.

Treasury Flash Report 3/5/09

U.S. Jobless Claims Exceed 600,000 for a Fifth Week

More than 600,000 Americans filed initial claims for jobless benefits last week as companies strived to cut the costs of workforces that are producing less as the recession deepens.
The Labor Department today reported 639,000 first-time unemployment applications, the fifth straight week above 600,000. The agency also said worker productivity, a measure of employee output per hour, fell at a 0.4 percent annual rate in the fourth quarter of 2008, with labor costs climbing 5.7 percent.
Today�s figures underscore the economy�s downward spiral, with companies from J.Crew Group Inc. to billionaire investor Warren Buffett�s Berkshire Hathaway Inc. eliminating jobs, and rising unemployment aggravating the slump in consumer spending. Stock-index futures slid and Treasuries climbed.
The Standard &amp; Poor�s 500 Stock Index dropped 2.1 percent to 697.84 at 9:35 a.m. in New York. Benchmark 10-year note yields fell to 2.88 percent from 2.98 percent late yesterday.
Geithner Warning
The Obama administration is counting on a series of stimulus efforts to jolt the economy and create or save 3.5 million jobs. Treasury Secretary Timothy Geithner yesterday warned lawmakers in a Senate hearing that �this is still a deepening recession and a deepening credit crunch,� and said more money may be needed to address the financial crisis.
Economists forecast the Labor Department tomorrow will say U.S. payrolls fell by 650,000 in February, the most since 1949. The unemployment rate probably surged to 7.9 percent.
Jobless claims for the week that ended Feb. 28 were projected to fall to 650,000, from an originally reported 667,000 a week earlier, according to the median of 43 estimates in a Bloomberg News survey.
The drop in productivity reported today compares with the Labor Department�s previous estimate of a 3.2 percent gain for the fourth quarter. The increase in labor costs was also more than first estimated, and the biggest gain in two years.
4-Week Average
The four-week moving average of initial claims, a less volatile measure, climbed to 641,750, the highest level since October 1982.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.8 percent in the week ended Feb. 21. Fifteen states and territories reported an increase in new claims for that same period, while 38 reported a decrease.
The total number of people receiving benefits decreased to 5.106 million in the week ended Feb. 21 from a record 5.12 million the prior week.
Initial claims reflect weekly firings and tend to rise as job growth slows.
A report from ADP Employer Services yesterday showed U.S. companies cut an estimated 667,000 jobs in February, up from 614,000 the month before. The ADP figures include only private employment and do not take into account hiring by government agencies.

Retail Sales Top Projections on Springtime Inventory
Wal-Mart Stores Inc., TJX Cos. and Aeropostale Inc. reported better February sales than anticipated as spring merchandise drew bargain-hungry shoppers back to stores.
Sales at U.S. stores open at least a year rose 5.1 percent at Wal-Mart, the world�s largest retailer said today. That outpaced its quarterly forecast of 1 percent to 3 percent growth. Aeropostale reported an 11 percent rise, higher than the 6.9 percent estimate in a survey by Retail Metrics Inc. Sales at TJX, which runs the TJ Maxx chain, were unchanged, better than an estimated 2.1 percent drop.
While new spring inventory and warmer weather brought more people out to shop than the previous month, most retailers still posted sales declines. That suggests continued weakness in consumer spending, according to Retail Metrics President Ken Perkins.
�There was some pent-up demand which drove some better- than-expected sales,� Perkins said today in a telephone interview. �I don�t think though that that�s something that�s going to carry through into March and April.�
Retail Metrics, the Swampscott, Massachusetts-based researcher, said U.S. comparable-store sales rose 0.7 percent in February, better than the 1.1 percent decline analysts had estimated and the first positive result since September. The outcome was helped mostly by Wal-Mart, Perkins said.
Cheaper gasoline has had more shoppers driving to Wal-Mart, where they�re buying food, televisions and other products for entertaining at home, said Eduardo Castro-Wright, the Bentonville, Arkansas-based retailer�s head of U.S. stores.

Treasury Flash Report 3/6/09

U.S. Economy: Unemployment Rate Increases to 8.1%

The U.S. unemployment rate jumped in February to 8.1 percent, the highest level in more than a quarter century, a surge likely to send more Americans into bankruptcy and force further cutbacks in consumer spending.
Employers eliminated 651,000 jobs last month, the Labor Department said today in Washington. Losses have now exceeded 600,000 for three straight months, the first time that�s happened since the data began in 1939. Revisions to the previous two months lopped off an additional 161,000 positions.
Today�s report indicates the economy may need additional federal measures to help stop what may become the worst recession in the postwar era. The jobless rate has now already reached the level the Obama administration projected as an average for the whole year.
�The magnitude of what is happening now is overwhelming what steps the Obama administration has already taken,� said Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. �The situation is much worse now than when they began� considering stimulus efforts, he said.
Treasuries were little changed, with 10-year notes yielding 2.81 percent at noon in New York, compared with 2.81 percent late yesterday. The Standard &amp; Poor�s 500 Stock Index fell 0.5 percent to 678.86.

Treasury Flash Report 3/11/09

Yen Optimism Plummets as Japanese Economy Shrinks, Exports Fall


Expectations for the yen to strengthen in the next six months plunged after Japan�s economy contracted last quarter by the most in more than three decades, a survey of Bloomberg users showed.
Participants are the least bullish on the yen since August, as an index measuring sentiment plunged 26 percent this month, according to 3,637 respondents from Paris to Tokyo in the Bloomberg Professional Global Confidence Index. Swiss users were the most optimistic on the franc since the surveys started.
The yen is off to its worst start against the U.S. dollar since at least 1988 as the economic contraction ends a rally sparked by investors seeking a refuge from the global financial crisis. Japan�s gross domestic product shrank at an annual 12.7 percent pace in the fourth quarter, while its trade deficit widened in January to the most in more than two decades as exports plunged 46 percent, the government said last month.
�The yen weakened 8.2 percent since December to 98.67 per U.S. dollar yesterday. Last year, it rose the most of the 171 currencies tracked by Bloomberg, climbing 23 percent versus the dollar and 29 percent against the euro, as equity markets collapsed.
The index of expectations for the yen fell to 51 from 68.79 in February. The measure is a diffusion index, meaning a reading above 50 indicates participants expect the currency to appreciate. Participants were last bearish on the yen in August, when the index dropped to 49.19. Bloomberg began compiling the data in December 2007.
The yen slumped 8.5 percent against the dollar in February, its worst month since August 1995, when the currency fell 10.2 percent on coordinated intervention between the U.S. and Japan to support the dollar.

Subject: Treasury Report 3/23

Treasury Announces $1 Trillion Public-Private Plan to Buy Banks' Bad Debt

The Obama administration unveiled its long-awaited plan to remove toxic assets from the books of the nation�s banks, betting that it can revive the U.S. financial system without resorting to outright nationalization.
The plan is aimed at financing as much as $1 trillion in purchases of illiquid real-estate assets, using $75 billion to $100 billion of the Treasury�s remaining bank-rescue funds. The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp. debt guarantees, the Treasury said in a statement in Washington.
Barely two months after President Barack Obama took office, he and Treasury Secretary Timothy Geithner are staking much of the new administration�s economic credibility on the theory that removing the devalued loans and securities from banks� balance sheets will help them start lending again and resuscitate the economy.
The Standard &amp; Poor�s 500 Stock Index rose 3.6 percent to 796.21 at 10:26 a.m. in New York, and the S&amp;P 500 Financials Index jumped 8.6 percent. Yields on benchmark 10-year Treasury notes were down 1 basis point at 2.62 percent.
Because the program depends on private investors stepping up, it may be weeks or months before it�s clear whether the approach will work. �You will start to see this buying up the assets� shortly after private asset managers are chosen by May, Austan Goolsbee, a member of the White House Council of Economic Advisers, said in an interview with Bloomberg Television.
Today�s announcement is the latest in a string of government attempts to end the worst financial crisis in seven decades; the Bush administration abandoned an earlier plan to buy the toxic securities in November. Obama officials still have to pick private asset managers and banks have yet to commit to selling their illiquid investments.
The announcement provides details on an initial strategy laid out by Geithner last month, which caused a slump in stocks because it lacked an explanation of how the effort would work. The S&amp;P 500 index is still down about 10 percent since Geithner�s Feb. 10 outline.
Taxpayer Risk
�This will allow banks to clean up their balance sheets,� Geithner told reporters at a news briefing in Washington. �There is no doubt the government is taking risk,� he added. �You cannot solve a financial crisis without the government assuming risk.�
Critics including Paul Krugman, a winner of the Nobel Prize for economics, advocate that the government take over banks loaded with devalued assets, remove their top management, and dispose of the toxic securities. Sweden adopted that approach in the 1990s. Krugman said in a New York Times opinion piece today that Geithner�s strategy won�t work because it �assumes that banks are fundamentally sound and that bankers know what they�re doing.�
Geithner said today that his plan was the best of a limited number of options, including leaving the illiquid assets on banks� balance sheets or having the government itself buy them all, shouldering all the risk.
�We are the United States of America, we are not Sweden,� the Treasury chief said.
Half of the Treasury�s funds will go to a �Legacy Loans Program� that will be overseen by the FDIC. The Treasury would provide half of the capital going to purchase a pool of loans from banks, with private fund managers putting up the rest. The FDIC will then guarantee financing for the investors, up to a maximum of six times the capital, or equity, provided.
The FDIC, which has extensive experience disposing of devalued loans from taking over failed banks, will hold auctions for the pools of loans, which will be controlled and managed by the private investors with oversight by the FDIC.
A �broad array of investors are expected to participate in the Legacy Loans Program,� the Treasury said, encouraging insurance companies, pension funds and even individual investors to join in.
�Legacy Securities�
The second half of the Treasury�s contribution will go to the �Legacy Securities Program.� The objective of the initiative is to generate prices for securities backed by mortgages that are no longer traded because investors have little confidence about the underlying value of the home loans.
Under this program, the Fed will expand an existing facility that provides financing for investor purchases of asset-backed securities. The Term Asset-Backed Securities Loan Program will be broadened to take on assets such as residential mortgage-backed securities that were originally rated AAA and sold by private banks.
The Treasury will also approve as many as five asset managers �with a demonstrated track record of purchasing legacy assets� that will buy the securities.
The managers will be given time to raise private capital and receive matching funds from the Treasury. They will also be able to get �senior debt� from the Treasury of 50 percent to as much as 100 percent of the fund�s capital.

And and soon as the Treasury did that, the dollar dropped over 4%

Treasury Flash Report 5/26/09
U.S. Economy: Consumer Confidence Jumps by Most in Six Years




Confidence among U.S. consumers jumped in May by the most in six years, fueling speculation the economy will recover later this year.
The Conference Board�s sentiment index (http://www.bloomberg.com/apps/quote?ticker=CONCCONF%3AIND) surged to 54.9, higher than forecast, according to figures from the New York- based research group today. A report from S&P/Case-Shiller showed home prices continued to plunge.
Stocks climbed for the first time in five days on speculation a lifting of the gloom surrounding the worst recession in half a century may spur consumers, who account for 70 percent of the economy, to spend. Still, rising unemployment and falling real estate values underscore that it will take time to establish a sustained rebound.
The Standard & Poor�s (http://www.bloomberg.com/apps/quote?ticker=SPX%3AIND) 500 index increased 2.1 percent, to 905.88 at 12:28 p.m. in New York. Treasury securities fell, pushing the yield on the 10-year note up to 3.48 percent from 3.45 percent late on May 22.
The 28-point jump in confidence over April and May is the biggest two-month rally since records began in 1967. The measure reached its lowest point ever in February, with a reading of 25.3.
Exceeds Forecast
Consumer confidence was projected to rise to 42.6, according to the median estimate (http://www.bloomberg.com/apps/quote?ticker=CONCCONF%3AIND) in a Bloomberg News survey of 70 economists. Forecasts ranged from 38.5 to 47.
The Conference Board revised the April reading to 40.8, from an originally reported 39.2.
Americans� spirits are lifting as stock prices rebound, mortgage rates (http://www.bloomberg.com/apps/quote?ticker=NMCMFUS%3AIND) fall and perceptions grow that the job market may not get much worse. Discounts by companies such as Chrysler LLC and Macy�s Inc. to attract customers are also benefiting consumers.
The confidence report showed the share of Americans planning to buy a car in the next six months rose to the highest level since April 2008, and those looking to purchase a large appliance rose to an eight-month high. The outlook for home purchases fell.
Real-Estate Slump
Concern over falling property values may be contributing to that restraint. A report from S&P/Case-Shiller today showed home prices in 20 U.S. metropolitan areas fell a more-than-forecast 18.7 percent in March from the same month last year, as foreclosures surged.
All 20 cities in the index showed a year-over-year price decrease in March, led by Phoenix, Las Vegas and San Francisco.
Compared with the prior month, prices fell in 17 cities, led by a 6.1 percent drop in Minneapolis that was the largest one-month decrease ever recorded by any city. The 4.9 percent month-over-month fall in Detroit and the 2.5 percent decrease in New York also set records for those cities.
�We see no evidence that a recovery in home prices has begun,� David Blitzer (http://search.bloomberg.com/search?q=David+Blitzer&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), chairman of the index committee at S&P, said in a statement.
Record Drop
The report also showed prices nationally fell 19.1 percent in the first quarter from the same period last year, the largest drop in the figure�s 21-year history, and were down 7.5 percent from the last three months of 2008.
The confidence report showed optimism over the next six months led the jump. The Conference Board�s expectations (http://www.bloomberg.com/apps/quote?ticker=CONCEXP%3AIND) measure rose to 72.3, the highest level since December 2007. The gauge of present conditions (http://www.bloomberg.com/apps/quote?ticker=CONCPSIT%3AIND) increased to 28.9 from 25.5.
The share of consumers who said more jobs will be available in the next six months climbed to 20 percent, the most in more than five years. The proportion of people who said they expect their incomes to rise over the next six months rose to 10.2 percent from 8.3 percent.
�As far as consumers are concerned, the worst is now behind us,� Lynn Franco (http://search.bloomberg.com/search?q=Lynn+Franco&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), director of the Conference Board�s consumer research center, said in a statement.
Macy�s, the second-biggest U.S. department store, and Chrysler are trying to revive sales. Chrysler, trying to restructure under bankruptcy, is offering incentives of as much as $6,000.

Dollar Falls to Lowest Versus Euro in 2009


The dollar declined to the lowest level this year against the euro as the prospects for economic recovery spurred a rally in global stocks, helping to push gold above $1,000 an ounce and oil to more than $70 a barrel.


The greenback also fell the most against the currencies of six major U.S. trading partners since July as the dollar became the cheapest funding currency in the London interbank lending market (http://www.bloomberg.com/apps/quote?ticker=SF0003M%3AIND). The Brazilian real and South African rallied more than 25 percent this year as investors sought higher-yielding assets in emerging-market nations.

The dollar depreciated 1.3 percent to $1.4520 per euro at 12:34 p.m. in New York, from $1.4332 yesterday, after earlier reaching $1.4522, the weakest level since Dec. 18. The U.S. currency dropped 1 percent to 92.17 yen, from 93.08, and slid 1.5 percent to 1.0444 Swiss francs. The euro advanced 0.3 percent to 133.81 yen, from 133.39.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against currencies including the euro, yen and franc, fell as much as 1.2 percent to 77.047 today, the lowest level since Sept. 29. It was the biggest intraday drop since July 31.

Dollar Libor
The three-month London interbank offered rate for dollars fell to 0.30 percent today, from 0.31 percent yesterday, according to the British Bankers� Association. The borrowing cost dropped below that of the Swiss franc (http://www.bloomberg.com/apps/quote?ticker=US0003M%3AIND), which was at 0.31 percent, for the first time since November, making the dollar the cheapest currency for investors to fund purchases of higher- yielding assets. The corresponding rate for funds in yen was 0.37 percent, increasing its advantage to the widest level since January 1993.