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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (21110)	1/12/2005 8:40:57 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 116555

A much weaker dollar helped the trade deficit decline to a new all time record high. Huh???? money.iwon.com

To: yard_man who wrote (21110)	1/12/2005 12:03:56 PM
From: mishedlo	Respond to of 116555

Snow: Wall St. backs private Social Security accounts [This guy is really the idiot's idiot - of course wall street backs private SS accounts - for the fees you idiot for the fees - Mish] Wednesday, January 12, 2005 4:02:14 PM afxpress.com WASHINGTON (AFX) -- Wall Street banks and investment firms are ready to stand behind President Bush's call to add private accounts to Social Security amid worries that long-term projected shortfalls could otherwise weaken the U.S. economy, Treasury Secretary John Snow said Wednesday "The people behind the institutions of Wall Street understand that if we fix the system and put it on a sustainable course, it will benefit our country's financial future," Snow told a New York audience Bush, Snow and other top administration officials began a public-relations push this week designed to build support for the plan to allow some workers to divert a chunk of their payroll taxes into personal accounts. See Snow interview The Social Security program is currently running an annual surplus. Some 47 million people received Social Security benefits, including 29.5 million retired workers But with the first of the Baby Boomer generation set to begin retiring within a decade, Social Security outlays are expected to begin outstripping revenues by 2018. And the program's trustees estimate that with no changes, the plan would no longer be able to pay full benefits beginning in 2042 Snow warned that waiting to fix Social Security's fiscal outlook would be "financially foolish" and that delay could have repercussions on the domestic and global financial markets While the administration has yet to offer detailed plans about the accounts, broad outlines offered by the White House have led critics to charge that Bush's approach poses a bigger threat to markets Depending on the scope of the plan, diverting payroll taxes from the Social Security trust fund into private accounts would force the government to come up with as much as $2 trillion over 10 years in order to continue paying benefits to current retirees Bush has ruled out raising payroll taxes to help pay such transition costs, and the White House has indicated it would seek to borrow the funds. That's triggered a debate among economists and policy experts over the potential impact on interest rates Proponents contend the borrowing would be viewed as a responsible effort to address the system's unfunded commitments, which are measured at more than $10 trillion over an infinite horizon Opponents counter that this would likely spook the markets and drive up interest rates Snow, in his remarks, dismissed criticisms that private accounts would yield a windfall for the financial-services industry During the presidential campaign, Democratic challenger John Kerry cited a study by University of Chicago Business School professor Austan Goolsbee based on a model in which workers would set aside a small part of their pay in private accounts. The study found that Social Security beneficiaries would see a 45 percent cut in their benefits, while the financial-services industry would reap billions of dollars in fees "People here on Wall Street understand that the structure of those accounts would be designed to benefit retirees, not Wall Street investment firms," Snow said. "They welcome a sincere solution to Social Security for the right reasons, for the broader financial stability that a solution will bring to our economy and to our markets."

To: yard_man who wrote (21110)	1/12/2005 12:12:30 PM
From: mishedlo	Respond to of 116555

NEW YORK (Reuters) - Applications for U.S. home mortgages dropped last week as a decrease in purchasing activity offset an increase in refinancing activity, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 3.0 percent to 587.8 in the week ended Jan. 7, after falling 10.6 percent in the MBA's prior week survey. This is the lowest level the index has touched since the week ended June 25, 2004, when the index was at 575.0. An uptick in mortgage rates may have suppressed demand for home purchases in the first week of 2005. Fixed 30-year mortgage rates averaged 5.70 percent last week, excluding fees, up 3 basis points from 5.67 percent the previous week. [an uptick of 3 bps reduced demand? Who are these idiots? Mish] The MBA's purchase index, a gauge of loan requests for home purchases, hit its lowest level in over a year. The index decreased 5.8 percent last week to 393.1, adding to the 13.7 percent loss the previous week. The MBA's seasonally adjusted index of refinancing applications reached increased 1.1 percent to 1,720.5, offsetting some of the 5.7 percent drop the prior week. Refinancings made up 49.0 percent of all mortgage applications last week, up from 48 percent the week before. Applications for adjustable-rate mortgages, meanwhile, edged up slightly to 32.7 percent from 32.6 percent of total applications. One-year adjustable-rate mortgage rates averaged 4.16 percent, down from 4.17 percent one week earlier. reuters.com