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September 13, 2012

European stocks rally after German ruling

Filed under: economics, mortgage — Tags: , , , — Snowman @ 7:28 am

Investors around the world cheered a German court ruling that clears the way for Europe’s latest rescue fund.

European stocks rallied, the euro climbed higher, and borrowing costs in Spain and Italy eased to their lowest levels in six months.

Early Wednesday, the German Constitutional Court ruled against a group of conservative politicians who requested an injunction that would bar Germany from ratifying the treaty governing the European Stability Mechanism.

The DAX in Frankfurt surged almost 2%, while the CAC 40 in Paris jumped 1%. London’s FTSE closed down 0.2%.

Wall Street also got a lift from Europe, with all three major U.S. indexes rising 0.2%.

“I think it’s very much a political symbol for support of these bailout policies,” said Clemens Fuest, professor of taxation at Oxford University’s Sa?d Business School. “That’s bad news for the taxpayer, but good news for people who hold government bonds. I think the uncertainly about short-term exits [from the European Union] of Greece and other countries like Spain has been reduced.”

The decision helped push down Spanish 10-year bond yields to 5.6%, while the yield on the Italian 10-year bond slid to 5.06%. Borrowing costs for both nations haven’t been this low in months as Spain and Italy have struggled to reduce their deficits.

Last week’s move by the European Central Bank to buy euro-area bonds helped ease investors’ concerns. And the latest news from Germany is adding to that optimism. The euro is at a four-month high against the U.S. dollar, just shy of $1.30.

German magazine Der Spiegel referred to the German court ruling as “a sigh of relief” for Germany and Europe, and “a historically significant signal for the euro rescue.” German Chancellor Angela Merkel echoed the sentiment, calling it “a good day for Europe.”

Asian markets, which were already closed ahead of the German ruling, ended higher. Tokyo’s Nikkei gained 1.7%, while the Hang Seng in Hong Kong was up 0.9%, and the Shanghai Composite added 0.3%.


August 21, 2012

State unemployment rates rise in 44 states

Filed under: canada, mortgage — Tags: , , , — Snowman @ 6:56 am

The state unemployment picture worsened last month, with jobless rates creeping higher in 44 states, according to a government report released Friday.

Only two states and the District of Columbia saw unemployment rates edge lower in July, while four states saw no change in rates, according to the Labor Department’s monthly report on state unemployment.

That’s worse than the previous month, when far fewer states recorded increases in unemployment rates. In June, jobless rates rose in 27 states, while 11 states and the District of Columbia reported rate declines and 12 states had no change.

Nevada, a swing state in the upcoming presidential election, posted the highest unemployment rate last month, at 12%. Rhode Island and California followed, with rates of 10.8% and 10.7%. North Dakota, where an oil boom has led to a flurry of new jobs, had the lowest unemployment rate in the country last month, at 3%.

Among key swing states this election, six states reported that their unemployment rates rose last month: Virginia, Florida, Colorado, Nevada, New Hampshire and Iowa low fee payday loans. Ohio’s unemployment rate was unchanged at 7.2%.

Wisconsin, which CNN moved into the toss-up column Thursday, posted a rise in unemployment to 7.3% from 7%.

Compared to the same month a year ago, only three states have jobless rates of 10% or higher, down significantly from 10 states and the District of Columbia last year. Overall, 44 states and the District of Columbia have lower jobless rates than a year ago.

Earlier this month, the government’s widely watched monthly jobs report showed that employers added 163,000 jobs in July, but the jobless rate increased to 8.3%. According to the state unemployment report released Friday, 23 states posted rates below that national rate last month, while 8 states had higher rates.


August 6, 2012

Romney promises 12 million jobs in four years

Filed under: canada, mortgage — Tags: , , , — Snowman @ 5:56 am

Mitt Romney’s economic advisers issued a rosy set of projections Thursday that predict 12 million new jobs and a sharp economic expansion if the Republican candidate were to capture the White House.

The paper, authored by four conservative economists, projects that the Romney plan would add between 0.5% and 1% per year in gross domestic product growth over the next decade.

The estimates, the economists write, are "conservative." Growth could be even stronger if hard-to-model gains from more effective regulation and decreased policy uncertainty could be captured.

Yet 12 million new jobs over just four years would be one of the strongest periods of employment growth in recent history, and require the economy to consistently add 250,000 jobs every 30 days for 48 straight months.

According to the position paper, the quick turnaround would be spurred by the lower tax rates and drastic spending cuts that are the hallmark of Romney’s plan.

The implementation of Romney’s plan will of course require the cooperation of Congress, and it should be noted that presidential campaigns often make promises that fail to materialize.

The paper’s authors — Glenn Hubbard of Columbia, Greg Mankiw of Harvard, John Taylor of Stanford and Kevin Hassett of the American Enterprise Institute — also include a boilerplate critique of the Obama administration’s policies.

"America took a wrong turn in economic policy in the past three years," the authors write. "The United States underperformed the historical norm shown in the administration’s own forecasts, and its policies are to blame."

Much of the critique is focused on what the authors characterize as a pursuit of short-term patches — such as the stimulus — that failed to address deep-seated structural problems like an overly complicated tax code cheapest personal loan rates.

The paper criticizes Obama’s housing policies, for example, saying the administration "ignored" the weak market. But Romney has not offered a detailed alternative — and the paper does not shed any light on the candidate’s plan for the housing market.

And while the projections are spelled out in detail, the paper does not address any of the bubbling criticisms of Romney’s economic plan.

Related: Mitt Romney’s other tax secret

According to a study released Wednesday by the Urban-Brookings Tax Policy Center, Romney’s plan would provide large tax cuts to the very wealthy, while increasing the tax burden on the lower and middle classes.

Romney’s tax cuts would produce a $360 billion revenue loss in 2015, and offsetting that would require a reduction of 65% of all available tax expenditures, according to the study.

The end result is that individuals who make less than $200,000 would actually have to pay $500 more, on average, in taxes — a 1.2% decrease in after-tax income. Meanwhile, the after-tax income of individuals who make more than $1 million would increase by 4.1%.

The campaign disputed the Tax Policy Center’s conclusions, arguing that increased growth resulting from corporate tax reductions was not included.

The Tax Policy Center, meanwhile, said it could not score the plan directly, as "certain components of [Romney’s] plan are not specified in sufficient detail."

The notable lack of detail is a critique that has dogged the campaign for months.

On the spending side of the government ledger, for example, Romney has promised to reduce federal spending from 24% of gross domestic product to 20%. But has not offered a comprehensive list of programs he would cut. 


July 11, 2012

Stocks end sharply lower

Filed under: management, mortgage — Tags: , , , — Snowman @ 12:16 pm

U.S. stocks closed sharply lower on Tuesday as worries about corporate earnings falling short of expectations unnerved investors.

Energy, utilities and tech stocks added pressure to already-down markets after Applied Materials (, Fortune 500) and Advanced Micro Devices (, Fortune 500) both warned their revenue would fall short of forecasts.

Disappointing expectations from Cummins (, Fortune 500) also dragged on markets, as the engine maker’s stock fell 9% after it slashed its sales forecast for the year.

Alcoa (, Fortune 500) was the first Dow component to report this week. The aluminum producer reported results after the close Monday that were roughly in line with analysts’ expectations, but the stock still slid as investors had hoped for more.

Results are due later in the week from JPMorgan Chase (, Fortune 500) and Wells Fargo (, Fortune 500).

Overall, analysts are expecting underwhelming corporate results, with earnings dropping off compared to the first quarter. But some analysts say that with the bar set so low, stocks may benefit from companies beating expectations.

"Even though the expectations for earnings are pretty dour, the next couple of weeks should be good for markets," said Jack Ablin, chief investment officer at Harris Private Bank. "In a market that really is a manifestation of reality beating anticipation, it’s great to have very low expectations."

The Dow Jones industrial average () slid 83 points, or 0.7%, the S&P 500 () fell 11 points, or 0.8%, and the Nasdaq () shed 29 points, or 1%.

Analysts say that trading volume is also light, which can add to market volatility.

"There’s not a lot of money moving in and out of the market," said Douglas Cote, chief market strategist at ING Investment Management. "There’s simply a lot of churning."

Stocks had opened with solid gains after eurozone finance ministers agreed late Monday to offer Spain an initial €30 billion by the end of the month to help bail out its troubled banks.

Europe’s stability mechanism remains elusive

"The agreement shows that the European leaders are committed to doing whatever is necessary to make sure there won’t be another euro crisis," said Cote. "The market just loves that kind of certainty."

But worries remain, said Bob Phillips, co-founder of investment advisory firm Spectrum Management Group in Indianapolis.

"The fundamental issue is that Spain’s spending more a year than they’re taking in," Phillips said. "They can print money and buy time, but they keep spending money that can’t be paid for."

Yields for the 10-year Spanish bond slid to 6.83% following the eurozone announcement. Yields have been bouncing above the 7% mark, which heightens bailout worries.

U.S. stocks ended lower Monday, as investors remained wary ahead of quarterly corporate results.

World markets: European stocks closed up for the day. Britain’s FTSE 100 () added 0.7%, the DAX () in Germany gained 0.8% and France’s CAC 40 () rose 0.6%.

Meanwhile, China reported worsening year-over-year import growth early Tuesday. June growth came in at 6.3%, half of May’s 12.7%, pointing to weak demand.

Asian markets closed lower. The Shanghai Composite () fell 0.3%, the Hang Seng () in Hong Kong shed 0.2% and Japan’s Nikkei () lost 0.4%.

N.Y. Fed asked Barclays about Libor in ‘08

Companies: Shares of Barclays () were higher Tuesday, after the British bank reached a deal with outgoing CEO Bob Diamond, who quit as the bank faces criticism for its role in the Libor scandal.

Although Diamond continues to receive salary and some benefits for a year or so, he declined his deferred bonus worth up to £20 million ($31 million).

Shares of Advanced Micro Devices plummeted after the company warned late Monday that it expects second-quarter revenue will drop 11% from the previous quarter because of weaker sales in China and Europe.

Applied Materials cut its outlook early Tuesday, revising third-quarter and full-year earnings and sales forecasts, citing a slowdown in demand for semiconductor manufacturing equipment.

Troubled BlackBerry-maker Research In Motion () held its annual shareholder meeting Tuesday. Late last month, the company announced 5,000 layoffs, a giant quarterly loss and another delay to its next BlackBerry operating system. Shares were down Tuesday.

Intel (, Fortune 500) has agreed to acquire a 15% stake in Dutch semiconductor equipment maker ASML Holdings () for up to $4.1 billion. Intel said the companies will work together to develop technologies that will cut costs and improve productivity.

Economy: Last year, 18.6% of youth across 34 countries were neither employed nor in school or training programs, according to the Organization for Economic Cooperation and Development’s Employment Outlook 2012 report released on Tuesday. In the United States, that percentage was 14.8%.

A lack of jobs for workers ages 15 to 24 could create a "scarring effect" on their long-term career paths and future earnings prospects, the OECD said.

The OECD also predicts the unemployment rate across the United States, Europe, Japan and Mexico will stay above 7.7% by the end of 2013 — barely better than its current 7.9%.

Goldman Sachs: Stock picking isn’t paying off

Currencies and commodities: The dollar rose against the euro and British pound but fell versus the Japanese yen.

Oil for August delivery settled down $2.08 to $83.91 a barrel.

Gold futures for August delivery lost $9.30 to $1,579.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.52% from 1.51% late Monday.  


July 9, 2012

Consumer Credit in U.S. Rises by $17.1 Billion, Fed Says - Bloomberg

Filed under: mortgage, news — Tags: , , , — Snowman @ 10:28 pm

Consumer credit climbed more than forecast in May, led by the biggest jump in credit-card debt in almost five years that may signal Americans are struggling to make ends meet.

The $17.1 billion increase, exceeding the highest estimate of economists surveyed by Bloomberg News and the largest this year, followed a $9.95 billion gain the previous month that was more than previously estimated, the Federal Reserve said today in Washington. Revolving credit, which includes credit card spending, rose by $8 billion, the most since November 2007.

A pickup in borrowing coincides with a slowdown in hiring and declines in consumer confidence that indicate the job market is failing to spur enough gains in wages to cover expenses. Employers added fewer workers to payrolls than forecast in June while the jobless rate stayed at 8.2 percent.

June 23, 2012

Anna Schwartz, Economist Friedman

Filed under: mortgage, technology — Tags: , , , — Snowman @ 3:00 pm

Anna Schwartz, an economist and co- author with Milton Friedman of a book on monetary policy that shaped the views of central bankers including Federal Reserve Chairman Ben S. Bernanke, has died. She was 96.

She died today at her home in Manhattan after a long illness, said her daughter, Naomi Pasachoff.

The first book that Schwartz wrote with Friedman,

June 8, 2012

Canada Jobs and Housing Data Signal Economic Weakness - Bloomberg

Filed under: Uncategorized, mortgage — Tags: , , , — Snowman @ 4:04 pm

Weaker Canadian job creation and slower housing starts, along with falling exports, add to evidence growth in the world

May 9, 2012

Gillard Says Budget Gives RBA Maximum Room on Rates - Bloomberg

Filed under: mortgage, online — Tags: , , , — Snowman @ 5:52 am

Australian Prime Minister Julia Gillard said returning the budget to a surplus gives the central bank

May 2, 2012

Discouraging jobs news leaves stock prices mixed

Filed under: money, mortgage — Tags: , , , — Snowman @ 6:08 pm

When hiring slumps, so do stock prices.

That was at least the message investors sent Wednesday, when they ignored flashes of positive news about the economy and instead homed in on troubling reports about jobs in the U.S. and Europe.

The Dow Jones industrial average fell as much as 87 points after a company that tracks payrolls said the U.S. added far fewer jobs in April than in March. The Dow ended the day down 10.75 points, at 13,268.57.

It was a turn from the day before, when investors chose to focus on a couple of positive reports on U.S. manufacturing and sent the Dow up 66 points to its highest close in more than four years.

While the market’s day-to-day fluctuations may be difficult to predict, some investors say they’re certain that stocks will generally climb for the rest of the year. As justification, they cite strong first-quarter earnings.

Of the 330 companies on the S&P 500 that have reported first-quarter earnings, 77 percent have beaten the estimates of stock analysts, said John Butters, senior earnings analyst at FactSet, a provider of financial data.

“The market has room to run,” said Karyn Cavanaugh, market strategist with ING Investment Management in New York. “It doesn’t always go up in a straight line.”

The Standard & Poor’s 500 fell 3.51 points to 1,402.31. The Nasdaq composite index was the outlier. It fell throughout the morning, then finished up 9.41 points at 3,059.85.

The report on private sector hiring weighed on investors, who see jobs as the key ingredient to an economic recovery.

The payroll processor, ADP, said U.S. businesses added 119,000 jobs in April, down from 201,000 in March. The government releases its monthly figures, which include the public sector, on Friday. The two reports can vary sharply.

Another jobs report from Europe underscored the gravity of the continuing debt crisis there. The 17 countries that use the euro reported that unemployment rose to 10.9 percent in March, the highest since the euro launched in 1999.

Markets fell across most of Europe, including Germany and Greece.

There was also good news out of Europe, even if it didn’t seem to sway investors Low fee payday loans. Standard & Poor’s lifted Greece’s credit rating out of default, noting how the country had recently secured a massive writedown on its debt to private investors.

Germany also reported that the number of people seeking work in April slipped below 3 million, a psychologically important barrier that it hasn’t broken in that month for two decades.

Todd Salamone, director of research for Schaeffer’s Investment Research in Cincinnati, downplayed concerns about Europe. Investors have had a long time to digest any bad news and shouldn’t be too shaken by daily developments, even if the headlines seem panicky, he said.

“U.S. stocks have become more resilient, especially to the European headlines,” Salamone said. “Any negative news out of Europe is not a major surprise like it was early last year.”

In U.S. stocks, one of the biggest losses came at Chesapeake Energy, which plunged 15 percent. The company had reported a first-quarter loss after the market closed Tuesday. It is also under fire for a massive pay package to CEO Aubrey McClendon and questions about his taking out big loans from companies that do business with Chesapeake. This week, the company stripped McClendon of his role as board chairman.

In an earnings call Wednesday, McClendon said he was “deeply sorry for all the distractions” but also said there was “a great deal of misinformation” circulating about himself and the company.

Ascena Retail Group shot up more than 10 percent after announcing it plans to buy rival Charming Shoppes. Ascena runs dressbarn, maurices and Justice, which are clothing chains for women and girls. The purchase will add Lane Bryant, Catherines and Fashion Bug to its portfolio.

Energizer Holdings, parent of the eponymous batteries, popped more than 9 percent after reporting higher revenue and earnings. The company said that sales of Schick razors helped results.


April 8, 2012

Aid offer puts student in good position to negotiate

Filed under: legal, mortgage — Tags: , , , — Snowman @ 12:44 am

Q: I’m a counselor trying to help a high school senior who wants to go to an expensive college she can’t afford. She’s been accepted to both Boston College and New York University, but the financial aid they are offering is vastly different. Unfortunately, her favorite school is offering only a $5,000 Pell grant, and the college that interests her least has promised her $31,000 in scholarships. Is there anything she can do to get her favorite college to make this more affordable?

A: This student has a good shot at improving the financial aid at her favorite college because she clearly cannot afford the sticker price, and she has set the groundwork in place to negotiate for a better deal by applying to two comparable colleges.

The Pell grant she’s been offered tells us that she comes from a family of modest means. Pell grants are provided by the federal government to students from families earning less than $50,000 a year. Recipients do not have to repay the money.

But a $5,000 Pell grant isn’t much at a school that costs about $60,000. So such schools typically provide additional grants and scholarships. According to data gathered by, the average freshman during the 2009-2010 year received about $27,600 in grants and scholarships at Boston College and about $21,300 at New York University.

Colleges give this money because they do not want their student body to be composed only of affluent students. A diverse student body helps enrich the educational experience for all. Low-income students typically get more aid than average.

With that in mind, this student should contact the college she’d like to attend and see if she can get additional aid. This is free money beyond the federal student loans she will be expected to repay after college.

Because she has been accepted by another college that’s similar in prestige to the one she wants to attend, she’s in a good position to negotiate overnight pay day loans. She should call the director of financial aid and explain that she wants to attend that institution, but that money is a concern. She should explain that another school has offered $31,000 in grants, and she should ask the financial aid officer if he can help her out.

Success will depend on how the college perceives her family’s financial need. If the family has suffered a job loss or hardship like illness, she should explain. Also, she might get extra aid based on the individual skills or attributes needed in the freshman class. Colleges seek geographic diversity, diverse backgrounds and talents in everything from sports to arts and community leadership. Before calling the aid office, do homework to anticipate the financial aid director’s response.

Based on family income, a student can determine aid that’s likely based on the financial aid formula that colleges use. To do this, use an “expected family contribution,” or EFC, calculator on the Internet, like this one: An even easier tool, if a student has a particular college in mind, is found at

If a student’s SAT or ACT score is above the average student’s at the school she wants to attend, that can also help. Colleges are ranked each year by publications like U.S. News & World Report. And colleges try to lift themselves in the rankings by attracting students with higher scores than their norm. Some colleges provide “merit” scholarships, even to affluent students with high scores, in an attempt to raise the institution’s ranking. If a student’s goal is to attend an elite college, she should keep in mind that most students admitted will have high scores.


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