Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: LLCF who wrote (47456)	2/28/2006 10:47:06 AM
From: mishedlo	Respond to of 116555

DJ Google CFO: Search Monetization Gains Largely Realized DJ Google CFO: Growth Slowing, And Now Largely Organic DJ Google CFO: Will Have To Find 'Other Ways' To Boost Rev

To: LLCF who wrote (47456)	2/28/2006 10:59:42 AM
From: mishedlo	Respond to of 116555

JAN. HOME INVENTORIES 5.3-MONTH SUPPLY, 6-YEAR HIGH JAN. MEDIAN EXISTING HOME SALES PRICE UP 11.6% Y-O-Y JAN. EXISTING HOME INVENTORY UP 2.4% TO 2.91MLN JAN. EXISTING HOME SALES LOWEST SINCE FEB. 2004

To: LLCF who wrote (47456)	2/28/2006 11:10:51 AM
From: mishedlo	Respond to of 116555

What Money is Not mises.org

To: LLCF who wrote (47456)	2/28/2006 11:16:06 AM
From: mishedlo	Respond to of 116555

Fed in call for 'stand-by' Treasuries bank The US Federal Reserve has asked Wall Street dealers to develop a "stand-by" bank that would step in if one of the two leading Treasuries clearing banks encountered problems. The Fed and the US Treasury depend on the Treasuries securities market to implement monetary policy and fund the US government. But the market, in which $545bn is traded daily, depends on two banks, JPMorgan Chase and Bank of New York, to clear its trades. This situation concerns regulators. The rest of this article is for FT.com subscribers only

To: LLCF who wrote (47456)	2/28/2006 1:46:14 PM
From: mishedlo	Respond to of 116555

Coming Soon, a Backup Bank for the Treasury Market A bank created to provide emergency backup for the Treasury market will be ready to operate in the next 18 months, a bond industry group is set to announce today. The so-called NewBank exists largely on paper, but like a superhero on standby, it can spring into action to stabilize the government securities market if a legal or financial disaster strikes. The bank is a result of a five-year effort by government and banking officials to draw up plans in the unlikely event that either J. P. Morgan Chase or the Bank of New York, the only existing clearing banks in the Treasury market, are suddenly unable to operate. The two clearing banks play an obscure but crucial role in the government securities market, processing more than $1.9 trillion of very short-term trades each day between investors who want small but safe returns and dealers who want to finance securities positions. The industry's dependence on just two big institutions has long concerned the Federal Reserve, which fears the fallout of a potential trading disruption. "All of a sudden half of the securities would not be able to clear their overnight positions," said Donald H. Layton, the former vice chairman of J. P. Morgan Chase who will lead the NewBank effort. "This is a very low likelihood event but it is highly disruptive if it occurs." The terrorist attacks on Sept. 11, 2001, underscored just how vulnerable the clearing system was: Bank of New York's trade-processing operations were troubled for days, causing problems across the banking system that took months to correct. Shortly after, the Federal Reserve and the Securities and Exchange Commission began raising concerns about what would happen if a clearing bank's activities were severely disrupted again. Both J. P. Morgan and Bank of New York built backup facilities outside the New York metropolitan area to stay ahead of federal regulators and make sure their clearing operations could never be physically shut down. J. P. Morgan has upgraded an existing operation in Dallas; Bank of New York now has a clearing center in Florida. But in a May 2002 report, the regulators also expressed fear that sudden and unforeseen legal problems or a credit downgrade would cause either bank to abandon the clearing business. Their proposal called for a quasi-public entity that could perform emergency clearing functions for the entire Treasury market. The government-led idea drew a cool reception from the banks. In response, a working group of banking executives and government officials was formed by the Federal Reserve to examine other ways to address the problem. Their solution, a privately organized "standby bank," emerged in 2004. This dormant bank would leap into action only if a credit or legal crisis caused investors and dealers to withdraw their business from either of the two existing banks and if no other qualified buyer, like Bank of America or Citigroup, stepped forward to buy the clearing operations. Regulators released formal plans for the NewBank in December. The Bond Market Association, an industry group, is expected to announce today that it will take responsibility for enacting them over the next 12 to 18 months. The NewBank will have no physical location and no full-time employees. It will be funded with roughly $500 million from 24 banking industry shareholders so that, if needed, it could immediately have money available to begin clearing trades. It will be set up as a limited-purpose trust company under the New York state banking laws and will also be regulated by the Federal Reserve. In a crisis, however, the NewBank would take over the legal position of the existing clearing bank and replace its top officers with a small group of designated executives from other institutions. The NewBank would then take over the troubled bank's existing operations to process the trades. nytimes.com

To: LLCF who wrote (47456)	2/28/2006 1:49:22 PM
From: mishedlo	Respond to of 116555

U.S. consumer confidence ended a three-month winning streak in February, falling to 101.7 from a revised January level of 106.8, the Conference Board said Tuesday. Economists surveyed by MarketWatch were expecting consumer confidence to fall to 103.9 after hitting a previously estimated 106.3 in January. January's was the highest level since June 2002, beating the previous peak of 106.2 hit in June 2005. Conference Board consumer research director Lynn Franco said the full report could suggest a worsening outlook for 2006. The expectations index fell to its lowest level since March 2003, to 83.3 in February from 92.1 in January. The index measures confidence about the future of the economy in the near term. "If expectations continue to lose ground, the outlook for the remainder of 2006 could deteriorate," Franco said. MarketWatch tinyurl.com

To: LLCF who wrote (47456)	2/28/2006 1:50:51 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

WASHINGTON (MarketWatch) -- Resales of U.S. homes fell 2.8% in January to a seasonally adjusted annualized rate of 6.56 million, the lowest in two years, the National Association of Realtors said Tuesday. Sales are down 5.2% since January 2005. It's the fifth consecutive monthly decline. The inventory of unsold homes on the market increased 2.4% to 2.91 million, a 5.3-month supply at the January sales pace. That supply is the largest since August 1998. "Demand is dropping and supply is rising," said Joel Naroff, president of Naroff Economic Advisers. "It doesn't take a Ph.D. in economics to know what the implication of that is: It's Wal-Mart time - 'Watch out for falling prices!'" Economists were expecting sales of about 6.65 million, according to a survey conducted by MarketWatch. tinyurl.com