Archive for the ‘Financial News’ Category:
U.S. Mortgage Delinquencies Set Record
By Nick Zieminski
Reuters
High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax Inc credit bureau showed on Monday.
Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.
August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.
The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.
The results, which correlate with consumer bankruptcy filings, suggest U.S. homeowners remain under financial stress despite signs of improving sentiment and fundamentals in the U.S. housing market.
August bankruptcy filings were up 32 percent from a year earlier, compared with a 35 percent year-over-year increase in July.
Still, while more Americans were late with mortgage payments, they are keeping up with other bills. The proportion of credit card accounts at least 60 days past due was down in August for the third straight month, while subprime card delinquencies also fell.
That improvement in delinquency rates partly reflects risk-aversion among issuers, which have cut the number of cards by 82 million, or 19 percent, over the past year, while slashing credit limits by $721 billion, to about $3.6 trillion.
The number of new cards being issued is down even more dramatically. In June, 2.6 million new cards were issued, compared with 4.7 million a year earlier.
Lenders are increasingly targeting consumers with high credit scores, Equifax found. While in 2007, about one in five new cards went to people with a credit score above 760, such consumers account for two in five new cards in 2009. Equifax found similar trends in auto loans.
“The data from August further confirms that we’re witnessing a dramatic change in consumer habits,” said Dann Adams, president of Equifax’s Consumer Information Solutions group.
Total consumer debt is down more than $300 billion, or almost 3 percent, from its peak in September 2008, Adams said, while the savings rate is nearing 5 percent, “a level we haven’t seen in years.”
SOURCE: http://www.reuters.com/article/newsOne/idUSTRE58L0Q520090922
Federal Reserve Admits Hiding Gold Swap Arrangements
Press Release
Source: Gold Anti-Trust Action Committee Inc.
On Wednesday September 23, 2009, 9:30 am EDT
MANCHESTER, Conn.–(BUSINESS WIRE)–The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.
The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.
The Fed’s disclosure came this week in a letter to GATA’s Washington-area lawyer, William J. Olson of Vienna, Virginia (http://www.lawandfreedom.com/), denying GATA’s administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund’s treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf.)
The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh (see http://www.federalreserve.gov/aboutthefed/bios/board/warsh.htm), formerly a member of the President’s Working Group on Financial Markets, detailed the Fed’s position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act.
Warsh wrote in part: “In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”
When, in 2001, GATA discovered a reference to gold swaps in the minutes of the January 31-February 1, 1995, meeting of the Federal Reserve’s Federal Open Market Committee and pressed the Fed, through two U.S. senators, for an explanation, Fed Chairman Alan Greenspan denied that the Fed was involved in gold swaps in any way. Greenspan also produced a memorandum written by the Fed official who had been quoted about gold swaps in the FOMC minutes, FOMC General Counsel J. Virgil Mattingly, in which Mattingly denied making any such comments. (See http://www.gata.org/node/1181.)
The Fed’s September 17 letter to GATA confirming that the Fed has gold swap arrangements can be found here:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
While the letter, GATA says, is far from the first official admission of central bank scheming to suppress the price of gold (for documentation of some of these admissions, see http://www.gata.org/node/6242 and http://www.gata.org/node/7096), it comes at a sensitive time in the currency and gold markets. The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations.
GATA will seek to bring a lawsuit in federal court to appeal the Fed’s denial of our freedom-of-information request. While this will require many thousands of dollars, the Fed’s admission that it aims to conceal documentation of its gold swap arrangements establishes that such a lawsuit would have a distinct target and not be just a fishing expedition.
In pursuit of such a lawsuit and its general objective of liberating the precious metals markets and making them fair and transparent, GATA again asks for financial support from the public and from all gold and silver mining companies that are not at the mercy of market-manipulating governments and banks. GATA is recognized by the U.S. Internal Revenue Service as a non-profit educational and civil rights organization and contributions to it are federally tax-exempt in the United States. For information on donating to GATA, please visit here:
People also can help GATA by bringing this information to the attention of financial news organizations and urging them to investigate the Fed’s involvement in gold swaps particularly and the gold (and silver) price suppression generally.
Contact:
Gold Anti-Trust Action Committee Inc.
Chris Powell, Secretary/Treasurer, 860-646-0500×307
Moody’s Accused of Issuing Inflated Ratings
Reuters
Wednesday, September 23, 2009
A former analyst with Moody’s Corp has accused the credit ratings agency of issuing inflated ratings, and has taken his concerns to U.S. congressional investigators, the Wall Street Journal reported on Wednesday. In a letter dated July, obtained by the paper, Eric Kolchinsky accused Moody’s Investor Service of issuing a high rating to a complicated debt security in January, in spite of it being aware it was planning to downgrade assets backing the securities. “Moody’s issued an opinion which was known to be wrong,” Kolchinsky wrote, along with detailing other instances of inflated ratings issuance, according to the paper. The paper said a Moody’s spokesman declined to comment on the January rating under scrutiny, but had said Kolchinsky refused to cooperate with an investigation into the issues he raised, and was suspended with pay. Kolchinsky is scheduled to testify on ratings firm reform before the House Committee on Oversight and Government Reform on Thursday, the paper said. Moody’s was not available to comment.
SOURCE: http://www.reuters.com/article/businessNews/idUSTRE58M15Y20090923?feedType=RSS&feedName=businessNews
Majority of Canadian employees living paycheque to paycheque
Hello dear fellow Canadians. I believe we are in big financial trouble. I just came across this yahoo news press release that has me worried and concerned for our financial future. Sixty percent is quite a sad, and I hope this statistic changes. If you find yourself in this situation I strongly urge you to seek help.
Here is the press release I’m referring to:
By The Canadian Press
TORONTO – Nearly 60 per cent of Canadians would have trouble paying the bills if their paycheque was delayed by one week, a new polls suggests.
The Canadian Payroll Association survey says not only are the majority of Canadians living paycheque-to-paycheque, but they have little ability to put money away for their retirement. The survey, released Monday, said 59 per cent of Canadians would have trouble making ends meet if they missed a paycheque.
“We were surprised that people were that close to the line,” said Patrick Culhane, president and CEO of the not-for-profit association.
Culhane said those results are despite the common advice from financial planners that people should set aside three months of expenses for such items as rent, groceries and monthly bills, in case of an emergency.
Of those surveyed, the younger workforce felt the greatest pinch. The survey said 45 per cent of people aged 18-to-34 would be difficult or very difficult to make ends meet if a paycheque were delayed. Another 21 per cent in that age group said it would be somewhat difficult.
Not surprisingly, 72 per cent of single parents said missing a paycheque would cause a problem for meeting financial obligations.
The survey also found that 50 per cent of Canadian workers can’t save more than five per cent of their net pay for retirement, half of what financial experts often recommend.
Culhane said those results are despite the “guilt trip” Canadians get at the start of every year before the RRSP filing deadline.
“People know they have to do it,” he said.
However, Culhane acknowledged it has become even more difficult to save for retirement recently with the stock market swings.
About 52 per cent of those surveyed believe they need between $750,000 to $3 million to live comfortably in retirement.
About one-third of Canadians report trying to save more money compared to last year due to the economic uncertainty, but can’t. Another 42 per cent say they aren’t trying to save more.
The survey was released as part of National Payroll Week, which runs until Friday.
Besides providing fresh data on Canadian attitudes, such surveys are a popular promotional tool for Canadian companies, who use public opinion polls to gauge consumer thinking and to promote specific brands to ordinary Canadians.
Banks and mutual fund companies have long used such surveys to make consumers aware of financial products and services and to learn more about the public’s financial management habits.
The CPA survey was conducted by Calgary-based Framework Partners Inc. through online interviews of 2,800 employees across Canada. The results have a margin of error of 2.3 per cent, 19 times out of 20.
The CPA has more than 14,000 member and 1.5 million professionals in organizations across Canada.
Source: Yahoo! Canada Finance
Gold Reaches $1000!
Gold futures for December delivery touches 1000, the highest level since February. Spot gold also rises to 6-month high at 997.2. However, investors should beware that volume is thin and pullback may occur quickly on profit-taking. At the G-20 summit in London, world policymakers pledged to help revive global economy. While acknowledging the improvements seen in recent months, officials believed that recovery will not be sustainable without continued stimulus policies. That is, governments will continue to offer helps in forms of low interest rate, expansion of money supplies and other fiscal stimuli. These policies will result in high inflation should economic growth comes back. This is probably the reason for investors’ flight to gold.
Silver price rises almost +1% to 16.51 today, extending its 8th consecutive days of rally. Investors should not build long positions too aggressive at current level as the metal is in overbought territory and should have correction soon.
The energy complex moves within a narrow range in Asia Tuesday. The October contract for WTI crude oil trades steadily around 68 as investors awaits OPEC’s comments on market outlooks. Brent crude, currently recovered to 67, dropped -0.4% to close at 66.53 yesterday. Since the beginning of September, WTI crude has returned to premium above Brent at the front end. The phenomenon is probably brought by draws in crude oil inventory and signs of pickup in product demands.
Others in the complex have little changes with heating oil trading at 1.73 and gasoline at 1.77. Natural gas slides -2.3% to 2.66, paring the +8.8% gains made last Friday. Electronic trades on NYMEX will be booked today for settlement purpose.
Stock markets edge slightly higher as driven by financial and technology sectors. The MSCI Asia Pacific Index gains +0.4%. In Japan, Nikkei 225 Stock Average adds +0.2% to 10345 although current accounts surplus narrowed to 1.16 trillion yen in July, more than consensus of 1.41 trillion yen, from 1.8 trillion yen in the previous month. Japan’s economy relies on exports, such as heavy machinery and electronic products, heavily. The decline in surplus was probably attributed to strength in Japanese yen as well as slow recovery in global market.
In Australia, NAB business confidence jumped to 18 in August, the highest level in 6 years, from 10 a month ago. The good news lifts banking and commodity shares with National Australia Bank and BHP Billiton rising +3% and +1% respectively.
U.S. unemployment rate jumps to 26-year high of 9.7%
The U.S. unemployment rate jumped to a 26-year high of 9.7% in August as nonfarm payrolls fell by 216,000, the 20th consecutive monthly decline, the Labor Department estimated Friday.
U.S. payrolls have dropped by 6.9 million to a total of 131.2 million since the recession began in December 2007, the government data showed. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million.
The 216,000 decline in payrolls was close to market expectations of a 233,000 drop, but the unemployment rate rose higher than the 9.5% level expected. The unemployment rate was 9.4% in July.
It was the smallest decline in payrolls since August 2008.
Payroll losses have moderated in most industries in the past two months after severe declines earlier in the year. In the past three months, payroll losses have averaged 318,000 per month, compared with 491,000 in the previous three-month period.
Payrolls declined an upwardly revised 276,000 in July. In June and July, payroll losses were revised up by 49,000.
Details of the August report were generally weak, however.
Payrolls fell in most sectors of the economy except for health care. Total hours worked in the economy dropped by 0.3%, long-term unemployment worsened, and the number of people working just part time who want full-time work reached 9.1 million, up 278,000.
The number of people who’ve been out of work longer than six months nudged up to 5 million, representing about one-third of the unemployed.
An alternative measure of unemployment that includes discouraged workers and those forced to resort to part-time work rose to 16.8% from 16.3%, marking the highest on record dating back to 1995.
Average hourly earnings on the month rose 6 cents, or 0.3%, to $18.65 an hour. In the past year, average hourly earnings are up 2.6%.
Most industries shed jobs
Of the 271 industries as tracked by the Labor Department, 35% were adding workers in August, according to a survey of hundreds of thousands of business establishments.
Private-sector employment fell by 198,000 in August. Employment in the private-sector is now lower than it was 10 years ago.
Goods-producing industries cut 136,000 jobs, including 65,000 in construction and 63,000 in manufacturing.
The manufacturing workweek for August was unchanged at 39.8 hours, while hours worked in manufacturing fell 0.5%. Of 83 manufacturing industries, 29.5% were adding jobs in August, the highest percentage since May 2008.
Employment in motor-vehicle manufacturing fell by 15,000. Employment in food, beverage and petroleum manufacturing rose slightly.
Service-producing industries reduced their rolls by 80,000 jobs in August, the fewest in a year. Retail cut 10,000 jobs, while financial services shed 28,000 and business services cut 22,000, including 6,500 temporary-help workers.
Health-care industries added 28,000 jobs.
According to a separate survey of households, employment fell by 392,000 and unemployment rose by 466,000 to 14.9 million.
The employment participation rate was steady at 65.2%. The employment-population ratio fell to 59.2%
Source: MarketWatch
