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

To: John Vosilla who wrote (25607)	3/14/2005 2:05:07 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Which fork in the road will the treasuries take? I think they stay high enough to kill housing. That is anything above 4.20 or so. Once housing decellerates it will be hard to impossible to turn around. Several months above 4.2 might do it. They do not necessarily have to go any higher. FNM might suffer another whipsaw however if rates get as low as 4% again on the 10-yr Mish

To: John Vosilla who wrote (25607)	3/14/2005 3:14:28 PM
From: mishedlo	Respond to of 116555

Poll: Support sinks for Bush Social Security plan - Monday, March 14, 2005 6:43:51 PM forexstreet.com WASHINGTON (AFX) - President Bush and top administration officials are in the midst of a 60-day blitz to convince the public that private investment accounts are part of the long-term solution to Social Security's funding woes But there's no indication the effort has moved the public the White House's direction A Washington Post-ABC News poll of 1,001 adults conducted Thursday through Sunday found only 35 percent of those surveyed approved of Bush's handling of Social Security, down three points since January and the lowest level of support for the president on the issue ever recorded in the Post-ABC surveys, The Washington Post reported in its online edition Monday morning The survey found 58 percent are inclined to oppose Bush's Social Security plans as they learn more about it, while a third said they are more receptive to the plan as they hear more details The White House earlier this month kicked off a 60-day, 60-stop cross-country media blitz featuring Bush and top administration officials Administration officials say they're not worried by the lack of support for accounts. [Administration officials were unusually candid and went on to say went on to say: Not only are we not worried, we really do not give a d*mn what the public thinks anyway. They either believe our lies or they don't. It's up to them. As long as we can get away with telling lies we will. So far it has not not hurt us one bit. No one even remembers our lies about WOMDs. In the end our SS lies will not matter either. We believe the public would be happier if they just took the simple route of believing our lies. It's all part of our new campaign: "Don't worry Be Happy". Mish] Mark Warshawsky, assistant Treasury secretary for economic affairs, told a National League of Cities conference on Monday that the "national dialogue" that has accompanied Bush's push for accounts has been "terrific." Bush and top officials, however, have de-emphasized the role of private accounts in recent speeches, however, instead focusing on Social Security's long-term funding imbalance Bush's call for personal accounts has caused heartburn among some congressional Republicans, who fear that the move could be politically risky. Top congressional Democrats have said they're open to the idea of accounts, but have ruled out Bush's call to create them by letting workers divert a portion of their Social Security payroll taxes So far, no consensus for action has emerged on Capitol Hill, where majority Republicans say any final plan will need the support of some minority Democrats, as well as moderate Republicans who have raised concerns over the Bush plan "I'm hearing from my seniors that the sell isn't being made yet on personal accounts. Â And we all know we have to do something about Social Security. Baby boomers are retiring.Â But selling these personal accounts, it's a tough sell," said Sen. Lincoln Chafee, R-R.I., on NBC's "Meet the Press" on Sunday Sen. Ben Nelson, D-Neb., appearing on the same program, said he disagreed with 41 fellow Senate Democrats who signed a letter to Bush insisting that the president's call to create accounts out of payroll taxes be taken off the table However, Nelson said he wants to see more details. Bush so far has offered only a broad outline of his plan "I'd like to see the plan and see the calculus before I can decide whether all the parts will move together, whether or not the actuarial considerations will work because at the end of the day this is about numbers. It's not just simply about politics," Nelson said The Social Security trustees estimate that the entitlement program, which currently runs a surplus, will see outlays exceed revenues beginning in 2018. That will force the program to redeem special-issue Treasury bonds held in its trust fund in order to maintain future promised benefits The trustees estimate the trust fund will be exhausted in 2042, forcing an across-the-board, 27 percent cut in future benefit levels to bring the program back into balance. The Congressional Budget Office, using different economic assumptions, estimates the trust fund would be exhausted in 2052

To: John Vosilla who wrote (25607)	3/14/2005 3:37:21 PM
From: mishedlo	Respond to of 116555

Top bond strategist sees rates edging higher Monday, March 14, 2005 7:45:56 PM afxpress.com NEW YORK (AFX) -- Long-term interest rates will continue to move up as inflation creeps higher, and not just in crude prices, said Miller Tabak's Chief Bond Strategist Anthony Crescenzi "We've got a multi-year trend in place with the yield going higher and higher," said Crescenzi in a MarketWatch interview Watch the interview Federal Reserve Chairman Alan Greenspan set the stage for the recent spike in long-term interest rates when he testified to Congress on Feb. 16th saying that the decline in long-term rates was a "conundrum" in the wake of repeated short-term rate hikes by the Fed Crescenzi points out that the day before Greenspan unleashed his "conundrum" the yield on the ten-year note stood at about 4.1 percent. By Monday, March 14, less than a month later, the yield had risen to 4.53 percent "In the next few months we're going to be at 4.75," he said. "That word is going to resonate in the bond market for a long time." Crescenzi sees inflation creeping higher and not just in crude oil prices "We're starting to see food prices going up...soy, corn, and wheat and we're seeing lots of materials, paper, chemicals, and metals showing sharp increases in inflation," he noted However, he does not see inflation getting out of control "The Fed's at it and I think they are going to be successful," he stressed. "They are going to reduce the amount of liquidity, which means fewer dollars to chase goods, which means inflation should be more benign in 2006 after a hiccup this year

To: John Vosilla who wrote (25607)	3/14/2005 3:41:02 PM
From: mishedlo	Respond to of 116555

Yellen sees economy on firmer footing Monday, March 14, 2005 6:45:30 PM afxpress.com WASHINGTON (AFX) -- After stumbling last spring, the U.S. economy is on "firmer footing," said San Francisco Fed president Janet Yellen. "A broad range of economic data suggests that real GDP is growing noticeably above trend," which is around 3.25 percent to 3.5 percent real GDP growth, Yellen said in remarks prepared for delivery to a banking convention in Hawaii. Yellen said banks in the western United States face risks from their large concentration in commercial real estate lending. But Yellen said industry conditions in many respects are stronger now than they've ever been. These conditions and risk management advances "put the industry overall in a solid position to deal with any challenges that may arise."