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US Treasury Bond prices rise on weaker economic data


Treasurys prices rise on weaker economic data
May 26, 2011, 4:21 p.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

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NEW YORK (AP) — Investors sent government bond prices higher Thursday after reports on unemployment claims and first-quarter economic growth reinforced expectations that the economic recovery may be moderating.

The price of the 10-year Treasury note rose 62.5 cents per $100 invested in late trading. Its yield, which moves in the opposite direction to the price, fell to 3.06 percent from 3.13 percent late Wednesday.

It was the lowest level for the 10-year yield in a year. The yield is used as benchmark on a wide variety of loans for businesses and consumers including home mortgages.

The government reported that more people applied for unemployment benefits last week, the first increase in three weeks. Analysts had expected a drop.

The government also said that the U.S. economy grew at a relatively sluggish rate of 1.8 percent in the January-March quarter, due partly to a spike in gas prices above $4 a gallon. Economists had forecast an upward revision to 2.2 percent.

Traders tend to buy Treasurys when economic growth appears to be losing momentum.

The Treasury Department also auctioned off $29 billion in seven-year notes at a yield of 2.43 percent, the lowest yield of the year. Investors placed bids for 3.24 times the amount offered, higher than the previous four auctions this year.

The yield of the seven-year note was 2.36 percent late Thursday.

In other trading, the price of the 30-year bond rose $1.03 per $100 invested, while its yield fell to 4.22 percent from 4.27 percent late Wednesday. The yield on the two-year note slipped to 0.50 percent from 0.54 percent.

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AP-GfK Poll: Most Americans say they don’t believe Medicare has to be cut to balance the federal budget ditto …,


AP-GfK Poll: Medicare doesn’t have to be cut
May 23, 2011, 7:02 a.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

Hello Reader, What Party Do You Want Running The US Government 2013? Selection Poll B.O.Page!

WASHINGTON (AP) — They’re not buying it. Most Americans say they don’t believe Medicare has to be cut to balance the federal budget, and ditto for Social Security, a new poll shows.

The Associated Press-GfK poll suggests that arguments for overhauling the massive benefit programs to pare government debt have failed to sway the public. The debate is unlikely to be resolved before next year’s elections for president and Congress.

Americans worry about the future of the retirement safety net, the poll found, and 3 out of 5 say the two programs are vital to their basic financial security as they age. That helps explain why the Republican Medicare privatization plan flopped, and why President Barack Obama’s Medicare cuts to finance his health care law contributed to Democrats losing control of the House in last year’s elections.

Medicare seems to be turning into the new third rail of politics.

“I’m pretty confident Medicare will be there, because there would be a rebellion among voters,” said Nicholas Read, 67, a retired teacher who lives near Buffalo, N.Y. “Republicans only got a hint of that this year. They got burned. They touched the hot stove.”

Combined, Social Security and Medicare account for about a third of government spending, a share that will only grow. Economic experts say the cost of retirement programs for an aging society is the most serious budget problem facing the nation. The trustees who oversee Social Security and Medicare recently warned the programs are “not sustainable” over the long run under current financing.

Nearly every solution for Social Security is politically toxic, because the choices involve cutting benefits or raising taxes. Medicare is even harder to fix because the cost of modern medicine is going up faster than the overall cost of living, outpacing economic growth as well as tax revenues.

“Medicare is an incredibly complex area,” said former Sen. Judd Gregg, R-N.H., who used to chair the Budget Committee. “It’s a matrix that is almost incomprehensible. Unlike Social Security, which has four or five moving parts, Medicare has hundreds of thousands. There is no single approach to Medicare, whereas with Social Security everyone knows where the problem is.”

That’s not what the public sees, however.

“It’s more a matter of bungling, and lack of oversight, and waste and fraud, and padding of the bureaucracy,” said Carolyn Rodgers, who lives near Memphis, Tenn., and is still working as a legal assistant at 74. “There is no reason why even Medicare, if it had been handled right, couldn’t have been solvent.”

In the poll, 54 percent said it’s possible to balance the budget without cutting spending for Medicare, and 59 percent said the same about Social Security.

Taking both programs together, 48 percent said the government could balance the budget without cutting either one. Democrats and political independents were far more likely than Republicans to say that neither program will have to be cut.

The recession cost millions their jobs and sent retirement savings accounts into a nosedive. It may also have underscored the value of government programs. Social Security kept sending monthly benefits to 55 million recipients, like clockwork; Medicare went on paying for everything from wheelchairs to heart operations.

Overall, 70 percent in the poll said Social Security is “extremely” or “very” important to their financial security in retirement, and 72 percent said so for Medicare. Sixty-two percent said that both programs are extremely or very important.

The sentiment was a lot stronger among the elderly. Eighty-four percent of those 65 or older said both programs are central to their financial security. Compare that to adults under 30, just starting out. Just under half, or 46 percent, said they believed both Social Security and Medicare would be extremely or very important to their financial security in retirement.

Old, middle-aged or just entering the workforce, most people are keenly aware of the cost of health care, and that may be helping to focus more attention on Medicare.

“Health insurance these days is very costly, and it’s not something that most people can afford to go out and buy on their own,” said Tim Messner, 38, a technology quality assurance analyst from Barberton, Ohio. “I don’t know that we could possibly plan ahead for medical insurance, but if you had to replace Social Security or investments, you at least have an idea of what you can live on.”

Numbers tell the story. As health care goes up, the value of Medicare benefits is catching up to Social Security’s. A two-earner couple with average wages retiring in 1980 would have expected to receive health care worth $132,000 through Medicare over their remaining lifetimes, and $446,000, or about three times more, in Social Security payments.

For a similar couple who retired last year, the Medicare benefit will be worth $343,000, compared to Social Security payments totaling $539,000, less than twice as much. The numbers, from economists at the nonpartisan Urban Institute, are adjusted for inflation to allow direct comparison. For low-income single retirees and some couples, the value of expected Medicare benefits already exceeds that of Social Security.

The poll found a deep current of pessimism about the future of Social Security and Medicare. As much as Americans say the programs are indispensable, only 35 percent say it’s extremely or very likely that Social Security will be there to pay benefits through their entire retirement. For Medicare, it was 36 percent.

Again, there’s a sharp difference between what the public believes and what experts say. Most experts say the programs will be there for generations to come. But they may look very different than they do today, and Americans should take note.

“Do they have a basis for worrying that these programs are going to pay them much less than they’re currently promising?” asked economist Charles Blahous. “Yes, absolutely. Do they have a basis for being concerned that the programs may have to be structurally changed in order to survive? The answer to that is yes, too.” A trustee of Social Security and Medicare, Blahous served as an economic adviser to President George W. Bush.

Republican lawmakers don’t inspire much confidence right now when it comes to dealing with retirement programs, the poll found. Democrats have the advantage as the party more trusted to do a better job handling Social Security by 52 percent to 34 percent, and Medicare by 54 percent to 33 percent. Often, but not always, major revisions have been accomplished through bipartisan compromise.

Sue DeSantis, 61, a store clerk from West Milton, Ohio, worries she won’t be able to rely on either program. Both are important to her well-being, but she thinks changes are inevitable. And she has little confidence in lawmakers.

“I don’t put my faith in politicians, and I don’t put my faith in the government,” said DeSantis. “I’m a Christian. I believe that God will take care of me. That doesn’t mean I should be foolish and not look at anything, but I don’t believe that the politicians are necessarily going to do the best for the common ordinary person like myself.”

The Associated Press-GfK poll was conducted May 5-9, 2011, by GfK Roper Public Affairs & Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide and has a margin of sampling error of plus or minus 4.2 percentage points.

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Associated Press Polling Director Trevor Tompson, Deputy Director Jennifer Agiesta and AP News Survey Specialist Dennis Junius contributed to this report.

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Online:

Poll results: http://www.ap-gfkpoll.com

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Calvin Ledsome Sr.,

Owner and Founder of: 

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Warmest regards,

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Forecast-busting economic growth in Germany and a surprise rebound in Greece helped the 17-nation eurozone start …


Germany powers eurozone economic surge in Q1
May 13, 2011, 8:56 a.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

Owner and Founder of: http://www.LedSomeBioMetrics.com

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LONDON (AP) — Forecast-busting economic growth in Germany and a surprise rebound in Greece helped the 17-nation eurozone start the new year with a bang, with the region growing twice as fast as the U.S. despite constant fears about debt.

The eurozone’s economy expanded by a quarterly rate of 0.8 percent in the first three months of the year, according to Eurostat, the EU’s statistics office on Friday.

That was more than double the 0.3 percent growth posted in the previous three-month period, ahead of analysts’ expectations for a 0.6 percent increase and twice U.S. growth.

“The eurozone is therefore significantly outperforming all other major developed economies at the moment,” said Chris Williamson, chief economist at Markit.

The figures have cemented expectations that the European Central Bank, which has to look at the whole eurozone as it seeks to tame inflation, will follow up April’s interest rate increase — the first in nearly three years — with another, possibly in July, despite some countries’ debt troubles.

In year-on-year terms, the eurozone economy grew 2.5 percent, roughly in line with what many say should be its long-term average.

Unsurprisingly, given its sheer size, Germany was the main reason the eurozone grew so fast. Its 1.5 percent growth during the quarter means the EU’s largest economy has now made up all the output lost during the recession. It was driven by a healthy balance of exports and household spending.

“Germany is the engine of growth among industrial countries — and not just in Europe,” German Economy Minister Philipp Roesler said.

France’s economy, the eurozone’s second-biggest, expanded by a robust 1 percent on higher consumer spending and business investment. Northern economies like the Netherlands grew strongly, while Italy and Spain lagged behind.

Perhaps more surprisingly, given the debt quagmire it is in, Greece posted solid growth of 0.8 percent, its first economic expansion since the fourth quarter of 2009. However, the increase is unlikely a sign of a sustained rebound as the previous quarter’s contraction was doubled to a colossal 2.8 percent.

Manos Chatzidakis, head of investment strategy at Pegasus Securities, said the Greek figures were disappointing because of the revision.

“The economy still has a considerable way to go before recovery,” said Chatzidakis. “We remain in a very unfavorable situation.”

Portugal, another bailout recipient, returned to recession. Its 0.7 percent quarterly decline follows the 0.6 percent drop recorded in the previous three-month period — a recession is classified as two consecutive quarters of negative growth.

Portugal is the third eurozone country to agree to a bailout, following Greece and Ireland.

Those countries’ problems are likely to be protracted as they struggle to reduce their mountains of debt.

The European Commission, the EU’s executive, on Friday raised its debt forecasts for all three of them.

That will likely spice up discussions among eurozone governments on whether Greece will need a second bailout.

It will also fuel calls from many economists who say Greece needs to restructure its debts — to delay or lower its bond repayments.

Eurozone ministers will start discussing how to help Greece at a meeting on Monday.

The Commission said it expects the eurozone economy to grow 1.6 percent in 2011, while the wider 27-country EU, which includes non-euro members like Britain and Poland, is anticipated to grow by 1.8 percent for the second year running.

Germany is expected to grow 2.6 percent this year but Greece is anticipated to shrink another 3.5 percent.

Olli Rehn, the commissioner in charge of monetary and economic affairs, said the EU will surpass the pre-crisis (pre-2008) growth levels next year.

That’s far sooner than most predicted in 2008,when the global economy sank into its deepest and longest recession after the collapse of U.S. investment bank Lehman Brothers brought the financial system to its knees.

“The main message in our forecast is that the economic recovery in Europe is solid and continues, despite recent external turbulence and tensions in the sovereign debt market,” Rehn said.

The series of figures helped the euro, which had lost about 8 cents to the dollar this week as investors scaled back expectations of interest rate increases in Europe and worried about Greece’s debt troubles.

By mid afternoon London time, the euro was up 0.2 percent at $1.4262, having traded as high as $1.4338 earlier. Last week, it was near 18-month highs above $1.49.

“The solid growth performance of the EU’s core economies puts the European Central Bank in an increasingly uncomfortable situation,” said Tim Ohlenburg, senior economist at the Centre for Economic and Business Research.

“Higher interest rates would make sense for the large, central eurozone countries in which unemployment has fallen and output is making a comeback, but this would further undermine weaker economies faced with high debt levels and fragile banking sectors,” Ohlenburg added.

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Gabriele Steinhauser in Brussels, Geir Moulson in Berlin and Nicholas Paphitis in Athens contributed to this story.

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Calvin Ledsome Sr.,

Owner and Founder of: 

Thank you for visiting, do come back for more news…
Warmest regards,

PS., Hello Reader, What Party Do You Want Running The US Government 2013? Make Your Selection Below!