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The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment. But in a more upbeat assessment, the Fed says the economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs. Despite some improvements, Fed Chairman Ben Bernanke and his colleagues said there's still reason for caution. Spending by households, while growing at a moderate pace, remains "constrained" by the weak job...

Ignoring The ProblemThe Cost of Paying the Debt NowBy starting today, the Federal Government can pay off the National Debt in 30 years by making interest and principal payments of $699,013,323,930.52 per year (see the chart below). In Fiscal Year 2009 the government made interest payments of $383,656,592,545.78. So it would take an additional $315,356,731,384.74 in annual payments to completely extinguish the debt in 30 years. By starting now, the total cost of interest will be $8,883,038,042,900.88, at 4%, over 30 years.Opportunity Cost: Waiting until 2019If the Federal Government chooses to wait until 2019 before addressing the debt, the cost...

LOS ANGELES (Reuters) - U.S. actor Alec Baldwin says he has lost interest in acting and considers his film career a failure. "I don't have any interest in acting anymore," Baldwin, 51, told "Men's Journal" in an interview for its December issue. Baldwin, best-known for his Emmy-award winning role in the NBC comedy "30 Rock" and the man chosen to co-host the 2010 Oscar ceremony, added: "Movies are a part of my past. It's been 30 years. I'm not young, but I have time to do something else".

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest. More than half. In fact, $4.8 trillion. If that's hard to grasp, here's another way to look at why that's a problem. In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a...

Repeat After Me.... "There Is No Carry"The Market TickerTuesday, November 10. 2009 Posted by Karl Denninger in Editorial at 10:45 From this morning's open (there have been many essentially-identical charts over the last months...) You can argue anything you'd like, but this - the chart of the SPX cash and the dollar, overlaid - put the lie to any claim that "there is no carry" at play. Today, as with many days before (and I'm sure will be since) is stunning evidence that indeed there is a monstrous carry being perpetrated against the dollar and our nation, Bernanke knows it,...

U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve's plan to keep interest rates at a record low. Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor's 500 Index wiped out most of a...

Roubini Sees Market Crash All Over the World By Rocky Vega 10/29/09 Stockholm, Sweden – New York University Professor Nouriel Roubini, who recently saw the recovery as “U-shaped,” is now concerned a dollar rebound will cause global markets to crash. His main concern is the carry trade in the US dollar. The dollar is being borrowed at near-zero interest rates to then be invested into a wide array of now-popular assets including gold, commodities, equities, credit, and emerging markets. There are simply more dollars available in the system that are chasing the same types of things. The risk is that...

Defeat the Debt Children: I pledge allegiance to Americaʼs debt, and to the Chinese government that lends us money. And to the interest, for which we pay, compoundable, with higher ...

One of the important messages coming out of the central banker’s annual retreat in Jackson Hole, Wyoming is that once the crisis is over the Federal Reserve’s (Fed) tightening of monetary policy may be abrupt. If so, increases in short term interest rates will not be gradual but jarring. The reasoning behind this approach, as I understand it, is that (1) since there could be political pressures to monetize the government debt and (2) given the large amount of existing liquidity that needs to be drained the Fed’s exit strategy needs to be unmistakably clear in communicating that it will...

US government bond prices, especially those of longer maturities, lost considerable ground in the latest session. Bonds were hit across the board due to next week's supply, an improving tone in US jobless claims and productivity data, a jump in crude-oil prices, mortgage-related selling as well as hedges related to new corporate bond sales. The seven-year and 10-year notes were the biggest losers, with the 10-year yield touching as high as 3.747 per cent, approaching the six-month high of 3.76 per cent set in late May. The US Treasury Department announced a sale of $US65 billion ($81 billion) in notes...

Stimulus with interest: $1.2 trillionJeanne Sahadi, CNNMoney.com senior writer Tuesday January 27, 2009, 5:25 pm EST The long-term cost of the $825 billion economic recovery package before Congress could rise to $1.2 trillion over 10 years, a top budget official said Tuesday. That's because the government will borrow to fund the plan and pay an estimated $347 billion in interest, Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee on Tuesday. The calculation was made at the request of House Republicans who have questioned the size and effectiveness of the bill. When asked at a press briefing about...

With the country spiraling deeper into recession, the Federal Reserve is ready to slash its key interest rate – perhaps to an all-time low– in hopes of cushioning some of the economic fallout felt by many struggling Americans. To battle the worst financial crisis since the 1930s, Fed Chairman Ben Bernanke and his colleagues already have ratcheted down their main lever for influencing the economy – the federal funds rate – to 1 percent, a level seen only once before in the last half-century. The Fed opens a two-day meeting Monday to assess to economy and decide its next move...

Over the next year, the U.S. government will need to borrow somewhere in the neighborhood of $1 trillion, the most ever by far. Estimates go as high as $2 trillion, depending on how quickly the economy cools and how fast tax revenues fall. The simple question most of America has not asked is this: Where is the money going to come from? The federal government already knows the answer to that question, and it has implications Americans are not ready for but will soon be faced with. America is going cap in hand to Middle East oil exporters. What government...

Federal Reserve officials have pared their outlook for economic growth through 2009 to minimal levels and are prepared to cut interest rates further, while concern has risen that a deflationary spiral may take hold. The central bank expects growth in the United States to contract in the second half of 2008 and the first half of 2009, with some even were more pessimistic, according to minutes released on Wednesday of the Fed's Oct. 28-29 meeting, when it cut its benchmark interest rate by a half percentage point to a percent. "Even after today's 50 basis-point action, the committee judged that...

INTEREST rates may be slashed to zero after Mervyn King, the Governor of the Bank of England, warned that the economy could contract by 2 per cent next year. Mr King vowed to cut the official cost of borrowing to "whatever level is necessary" to boost confidence and stave off a long and deep recession. The government will outline its plans for the economy and spending in the Pre-Budget Report, which it confirmed yesterday would be unveiled on 24 November. Mr King revealed that the economy is already in recession in his latest inflation report. Confidence had been "shaken badly"...

High Street banks have told Alistair Darling they will not pass on any further interest rate cuts to consumers and businesses. The banks have warned the chancellor they are “not charities”. They said they could not afford further to reduce mortgage payments and interest rates to businesses if, as expected, the Bank of England continued to cut rates as the economy fell deeper into recession. The tough line from the banks will anger taxpayers, coming just a month after the government injected £37 billion into Royal Bank of Scotland (RBS), HBOS and Lloyds TSB to protect them from the credit...

On the fifth floor of an imposing building in London's Canary Wharf, six people are putting together one of the world's most important numbers. Every weekday morning, as the clock ticks round to 11, the group's members wait patiently for the numbers to arrive. These are the figures that will determine the day's Libor rate, or rather the rate banks charge when they lend each other money.

Federal Reserve Chairman Ben Bernanke predicted that the global financial markets crisis is likely to restrain the economy well into next year and signaled that the Fed may be getting ready to cut interest rates. But he said he believes the unprecedented steps taken to have the Treasury Department and the Fed intervene in financial markets were done in time to prevent more expensive and permanent damage to the nation's leading financial institutions. In a speech before the National Association of Business Economics in Washington on Tuesday, Bernanke said the threat of inflation has receded recently, while the economy has...

Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”. During his trip, Mr Greenspan visited the Bank of England’s monetary policy committee. He told them the US financial system had been resilient amid the bursting of the internet bubble. Share prices had halved and there had been massive bond defaults, but no...

A massive global rally in treasuries is underway and gold may be headed for its biggest one day advance in history as global systemic distrust sets in. ... Treasury 3-Month Bill Rates Drop to Lowest Since World War II. ... I just happened to be checking on rates exactly as the low was hit. 3 month yields are now .04.

Mortgage rates took a big jump this week, to their highest point in a year. There's no single explanation for the rise. The benchmark 30-year fixed-rate mortgage rose 35 basis points, to 6.77 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.45 discount and origination points. One year ago, the mortgage index was almost the same, at 6.75 percent. Four weeks ago, it was 6.62 percent. The benchmark 15-year fixed-rate mortgage rose 37 basis points, to 6.32 percent....

One year after California Air Resources Board Chairwoman Mary Nichols decided to sell off some energy stocks that showed a potential conflict of interest with her role as a state regulator, records show her diverse investment portfolio still contains many energy interests. Nichols also sold stock in a company that stands to profit from new diesel regulations that the ARB is set to adopt this fall, and other companies that have business before the board, according to financial disclosure documents filed with the Fair Political Practices Commission. But FPPC records show that she and her husband, attorney John Duam, sold...

In fact, Representative Maurice Hinchey stated that “we (the government) should own the refineries. Then we can control how much gets out into the market.”

IT SEEMS THAT the world is beginning to come around to my point of view, that the credit crisis has been averted and the economy is not going to weaken enough to deserve to be called a "recession." Several speeches this week by Federal Reserve officials have talked about the credit crisis very much in the past tense. The Fed finally came up with new liquidity facilities that were effective at easing the crisis — after nine months of flailing, doing everything wrong and nothing right. This after years of keeping interest rates too low, and triggering the cycle of...

In another year my home loan will adjust to the "Weekly average yield on United States Treasury Securities adjusted to a constant maturity of 5 years" plus 3.0 percentage points. My current rate is 5.54% and I want to start considering a refinancing if it looks like the new rate will be a large increase (it can only go up a maximum of 2.0%). So my question is how do I calculate the "Weekly average yield on United States Treasury Securities adjusted to a constant maturity of 5 years"? I tried to Google for the answer but didn't have any...

Mortgage lenders were yesterday accused of cashing in on the credit crunch by raising the cost of home loans hours before the Bank of England cut interest rates. In an attempt to boost the ailing economy, the Bank yesterday reduced the base rate from 5.25 per cent to 5 per cent. But the move came after two of the biggest lenders revealed plans to move in the opposite direction and raise their mortgage rates today. Cut: The move is unlikely to provide much relief for homeowners One of these is Alliance & Leicester, which will have increased its rates twice...

Since I have retired I have discovered that I have a fair amount of money. I also have a fair amount of assets in property but that is outside of the issue I need advice about. I am dealing with a small bank and I would like to crank up the interest rate on the IRA's, now and near future say 6/1/08. What arguement am I going to use to twist the Board of Directors collective arms to get an acceptable return.

I need help with this problem. If I had 10,000 and put it into a cd for one year at 4.5 percent then how do I figure how much money I'll make on it? I already know how dumb I am when it comes to money so help me out. Show me how to get an answer. Thanks in advance!

The German government's purchase of data stolen from a Liechtenstein bank has reinvigorated longstanding debates about privacy, law enforcement and international relations. Much of the fallout has followed predictable patterns. Some argue that Germany's richest citizens should be brought to justice for failing to comply with the tax laws, while others point out that it is unseemly for a nation to spy on a peaceful neighbor. The conflict between Germany and Liechtenstein also has triggered a broader debate about tax competition and the role of so-called tax havens. The Paris-based Organization for Economic Cooperation and Development is trying to use...

I'LL NEVER CEASE to be amazed by Warren Buffett. No, not by his wealth. Not by his investment acumen. And not by his folksy wisdom. I'm amazed at the shameless greed of the man, and the fact that despite it, the media continues to treat him like a saint. Don't get me wrong. I firmly believe that as Gordon Gekko said, "greed, for lack of a better word, is good." But as I recall the villain of Oliver Stone's movie "Wall Street," Gekko didn't expect people to love him for his predatory ways. I have no idea what Buffett expects,...

It seems only yesterday that Premier Dalton McGuinty declared: "There will be no sharia law in Ontario." Many of us, who witnessed the medieval nature of manmade sharia laws in our countries of birth, heaved a sigh of relief back in September of 2005. We thought this was the end of the attempt by Islamists to sneak sharia into a Western jurisdiction. We were wrong. The campaign to introduce sharia is back. Last time, the campaign took a populist approach, invoking multiculturalism. This time, the pro-sharia lobby is dangling the carrot of new niche markets and has the backing of...

Political groups unaffiliated with the two major parties account for an increasingly large share of spending on federal campaigns -- 19% of the total in 2006, up from just 7% in 2000, according to an analysis of campaign-finance data by The Wall Street Journal. They now are horning in on crucial campaign activities once dominated by the parties, such as buying ads and getting out the vote. ...Over the past four years, the national Democratic and Republican parties have raised and spent less on elections than during the prior four years, when adjusted for inflation. At the same time, independent...

If I were a writer of articles, I would never make "Spur" part of the headline - but that's just me...

Experts: Freeze on home-loan interest no cure-allBy ALAN ZIBEL Associated Press Dec. 2, 2007, 3:17PM WASHINGTON — If lenders temporarily freeze low introductory interest rates on home loans made to risky borrowers before they soar, it would be a modest fix for the country's fractured housing market. The problems are so far-reaching, analysts say, that an emerging Bush administration-backed plan — nicknamed "teaser-freezer" by one economist — won't spare many borrowers, or bankers, from the pain of escalating foreclosures and defaults. Edward Yardeni, an economist who runs Yardeni Research in Great Neck, N.Y., called the plan "better than doing nothing,"...

THE BOTTOM IS IN. Yes, I know I've been too early in saying to buy stocks during the correction from the October highs. But all the classic signals of a durable bottom are in place now. Let me count the ways. One. The sell-off last Monday was a classic panic. It was the kind of emotional climax you need to see before you can be sure that everyone who is going to sell has sold. Two. Despite the panic, stocks didn't make new lows against the August bottom. Yet the news background has substantively gotten worse, with evidence of large...

Rising currencies are not necessarily a sign of strength. The U.S. dollar rose sharply before and during the recession of 2001. The trade-weighted index of the dollar's value against 26 currencies rose 10.5% from March 2000 to January 2002, as the stock market and economy tumbled. A graph in the Aug. 5-11 issue of The Economist showed that, "countries whose currencies have gained most [against the dollar] are high interest-rate economies, such as Turkey, Brazil and New Zealand, commodity producers, such as Canada, or a mixture of both, such as Australia." Central-bank interest rates are 16.75% in Turkey, 11.25% in...

One advantage of having a subscription to The Atlantic is finding out what the Democrats propose to do next. Clive Crook in under the rubric of "The Agenda" wrote a recent article on homeownership called Housebound. After agreeing with some benefits of homeownership he then lists the reasons why this is a bad idea. Among his complaints are: Homeowners are less mobile. Homeowners act as cartels interfere with zoning changes, suppress new developments, etc. And, not the least is that they have an unfair advantage in mortage-interest deductions. The last of these, interest deduction for mortgage interest, seems to be...

Until about the 18th of this month, FR posted what I thought was a viable tracker about the interest a thread might attract. The 'lurker'; that ever-present internet FR surfer who rides from thread to thread opening that which peaks his/her spirit. Stocks Soar After Half-Point Rate Cut Posted by Always Right On 09/18/2007 2:43:25 PM PDT · 50 replies · 219+ views Having removed the number of people who 'viewed' a thread eliminates the true value of a thread, and subjects it to a value shaped only by the number of replies it may or may not attract. For...

WHEN'S THE BEST time to be wrong? When you're right. I was wrong about Ben Bernanke and the Fed. I've been writing here for months that they wouldn't cut rates. I finally conceded they'd cut by 25 basis points. This week they did 50. (I think they did it just to torture me.) I was wrong. I admit it. But I was right about the markets. Throughout the crisis of the last six weeks I've said that stocks would recover. They haven't made it all the way back to new all-time highs — yet. But they've made it within a...

ALAN GREENSPAN'S long-awaited memoir, called "The Age of Turbulence," will be in bookstores next week. The former Fed chair couldn't have picked a better moment to release his book, or a better title for it to fit the moment. "Turbulence" is the best word to describe the wild ride global markets have been on for the last two months, triggered by panic in subprime lending. And the Federal Reserve is right at the center of the turbulence — especially next week, when the FOMC meets to decide whether to cut interest rates. Current Fed chair Ben Bernanke must wish all...

"What would the Maestro do?" As nervous markets hang on every word of Federal Reserve Chairman Ben Bernanke, trying to divine whether he will lower interest rates in response to the current turmoil in credit markets, comparisons to his illustrious predecessor Alan Greenspan are inevitable. Such comparisons can also be invidious, and shouldn't influence what Mr. Bernanke does now. Mr. Greenspan is fondly remembered for his role in stewarding markets through the stock crash of 1987, the Long Term Capital Management crisis of 1998, the collapse of the tech bubble in early 2001, and the aftermath of the terrorist attacks...

HONG KONG -- Hong Kong's financial secretary has ordered regulators to study how to reconcile Muslim financial rules with local laws in hopes of launching a market for Islamic bonds, according to a speech transcript reviewed Tuesday. Secretary John Tsang said he hopes to promote Hong Kong, a popular stock market for Chinese companies, as a gateway for Middle Eastern investment in China, according to transcripts from a Monday speech at a financial conference. "Islamic finance is an important element of the global financial system," he said. "For Hong Kong to be a major international financial center — not just...

As the housing boom of the early part of this decade unwinds, the U.S. is facing a harsh new reality: Annual home foreclosures may surpass new-home sales from builders. Nearly 2 million homeowners are expected to lose their houses this year and next as the mortgage mess becomes a painful experience for condo-flipping gamblers and struggling families alike. The latest data from the Mortgage Bankers Association Thursday showed that the nation's foreclosure situation continues to worsen. A record number of mortgage holders -- 0.65% of all borrowers -- entered the foreclosure process in the second quarter. Loans already in the...

Rate cuts won't cure ailing market Ben Bernanke and his Fed cohorts will get cheap money flowing with a series of interest-rate cuts. But that won't fix the credit crunch. August 23, 2007 -- 16:20 ET Jon Markman In a country whose populist heroes are kick-ass rebels Jack Bauer, Jason Bourne and Bart Simpson, it is perhaps only fitting that our latest would-be real-world savior is an economist and banker whose monkish beard makes him look almost countercultural. Unlike his fictional counterparts who always save the day with a snappy remark or a chop to the throat, Federal Reserve chief...

Fed cuts discount rate by one-half percentage point to 5.75%, leaves fed funds rate alone. Details soon.

Today's Financial Times headline ("Spitzer to Streamline Rules for Wall Street") is an example of government allowing good old Yankee free enterprise to become more competitive with other international challengers. The Financial Times also contains additional evidence of increasing inflationary pressures and of interest rates around the world, particularly in the European Union (E.U). Meanwhile, in face of growing inflationary evidence and increasing interest rates among our key competitors, our Fed has kept our rates on hold. While it warns of inflation as its main concern, our Fed appears "frightened" to compete either against inflation or with the rising interest...

Wednesday, May 23, 2007 How Japan fuels financial instability By THOMAS I. PALLEY NEW YORK — Over the past several years, much attention has focused on the role of China's trade surplus in creating today's global financial imbalances. But too little attention has been paid to the role of Japan's policy of near-zero interest rates in contributing to these imbalances. As global financial uncertainty rises, it is time for Japan to change course. Japan's ultralow interest-rate policy was initiated in the 1990s to put a floor under the economy following the bursting of its asset price bubble. However, over time...

TEHRAN: Iran's Press and economists yesterday slammed a decision by President Mahmoud Ahmadinejad to slash interest rates, describing the move as "incomprehensible" and risking "economic suicide". The rate cut decision, which economists said could overheat an already inflationary economy, appeared to have been taken without the knowledge of economy minister who had said exactly the opposite just hours earlier. "Economic suicide for banks," the Mardomsalari newspaper said of move. "The economy minister and the head of the central bank have to explain this decision since this decree is incomprehensible for economists," the economy minister in the previous reformist government, Saeed...

Housing Bubble Could Cause Economic Bust - Bloomberg A well-known columnist for the Bloomberg financial news agency said Korea may be headed for an economic slump because of the housing bubble. If the real estate bubble deflates, the columnist wrote, over-leveraged households would face a credit crisis, consumption would decline, and Korea could fall into a long-term economic descent. In a column dated May 3, Andy Mukherjee, a Bloomberg columnist covering Asian economies, wrote, "South Korea can't afford to stab the housing bubble." The housing bubble may be deflating as overheated Korean home prices stabilize,” he wrote, but "the danger...

With the meltdown in the subprime mortgage sector now laid bare, many on Wall Street desperately cling to the notion that the pain will be localized. The prevalent delusion is that the overall mortgage, housing and stock markets will be little affected by the carnage ravaging the subprime sector. As such, the renewed stock market weakness is seen as an overreaction and a great buying opportunity. These assumptions represent wishful thinking in the extreme. Those who believe that the subprime market is unrelated to the broader economy do not understand that the problem is not just the fiscal responsibility of...