Bank of America to Modify Mortgages,

Bank of America to Modify Mortgages, Help Homeowners
[full article]

 

Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, said it will modify at least $40 billion in troubled mortgage loans over the next two years to keep customers in their homes.

The move would help as many as 265,000 homeowners, Liam McGee, president of global consumer and small-business banking, said today in Los Angeles at a U.S. Federal Reserve hearing on the pending purchase.

``No one benefits from a foreclosed home,'' McGee said. ``It is bad business for banks.''

Bank of America, based in Charlotte, North Carolina, is trying to persuade regulators to approve the takeover, which would give it a role in one of every four U.S. home loans. Last week, the bank said it would curtail mortgages for people with the worst credit after Countrywide's loans helped fuel the subprime crisis.

Bank of America was unchanged at $38.30 at 1:44 p.m. in New York Stock Exchange composite trading today. Countrywide rose 7 cents to $5.91 and has declined 34 percent this year.

U.S. foreclosure filings jumped 57 percent and repossessions more than doubled in March from a year earlier, according to data vendor RealtyTrac Inc. A record 18.6 million U.S. homes stood empty in the first quarter, the U.S. Census Bureau said in a report today.
[full article]
 

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Inflation Trends: Corn & Oil Prices Jump

Corn jumps as wet weather fans supply concerns, oil jumps
[full article]

 

Corn prices jumped Monday as investors bet that more rain in the U.S. Midwest will force farmers to plant less of the crop, tightening supplies and adding to growing food costs for consumers and livestock owners.

Other commodities traded mostly higher, with crude oil rising to a record near $120 and gold, silver and copper also gaining.

Corn prices have shot up 21 percent this year amid dwindling stockpiles and surging demand to feed livestock and make alternative fuels such as ethanol.

But the weather has been the biggest factor in recent days, with heavy rain in corn-growing areas leaving fields too soggy to work and putting farmers far behind schedule. More rain is expected in the coming days, meaning farmers may have to plant significantly less corn than planned. U.S. farmers were expected to plant about 86 million acres of corn in 2008, an 8 percent drop from last year.

"These forecasts for additional showers still continue to raise concerns that farmers may not be able to get the full 86 million acres planted. The weather will challenge them to get that done," said Shawn McCambride, analyst with Prudential Financial in Chicago.

Corn for May delivery jumped 10.75 cents to $5.88 a bushel on the Chicago Board of Trade after earlier rising as high as $5.96 a bushel.

Rising corn prices mean consumers can expect even higher grocery bills for meat and pork, as livestock producers are forced to pass on higher animal feed costs and thin their herd size.

The planting delay has prompted some farmers to consider using their rain-soaked acres for other crops like soybeans, which have a later growth cycle. That prospect sent soybean prices sharply lower Monday, with the May contract plunging 46.25 cents to $12.795 a bushel on the CBOT.

Other agriculture futures traded mixed. Wheat for May delivery added 15.5 cents to $8.16 a bushel on the CBOT, while July rice futures fell 50 cents to $23.68 per 100 pounds.

In energy futures, crude oil surged to a new high just below $120 a barrel, driven up by labor actions that cut crude supplies from the North Sea and Nigeria. Prices later retreated and gyrated between gains and losses as the dollar steadied against the euro.

Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange in overnight trading, but later retreated to $118.82, still up 30 cents.

Other energy futures traded mixed. May gasoline futures fell 2.08 cents to $3.0329 a gallon, while May heating oil futures fell 0.79 cent to $3.3107 a gallon.

In precious metals trading, the boost in oil prices help lift gold more than $5 as investors bought the metal as an inflation hedge.

Gold for June delivery added $5.50 an ounce to fetch $895.20 on the Nymex, after earlier rising as high as $898.10.

Other precious metals also traded higher. Silver for May delivery gained 16.5 cents, while May copper rose 2 cents to $3.9355 a pound.
[full article]

 

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Super Inflation - Euro Style

Europe's Uber-Inflation Headache
[full article]
 
The European Central Bank has stubbornly defied its critics by keeping its eye firmly on inflation, and resisting pressure to cut rates. But its policy seems to have had little impact on soaring prices.

The European Commission warned that it expects inflation within the 15 nation euro zone to rise to 3.2% for the year. This adds to pressure on the European Central Bank to refrain from a confidence-boosting interest-rate cut.

The euro rose to $1.5686 on Monday afternoon in Europe from $1.5635 in late Friday trading in New York. The euro's 15.0% rise against the dollar over the past year is particularly painful for the continent's manufacturing companies, whose already-high labor costs rise relative to those in other currency zones.

In its semi-annual forecast, the Commission said that soaring prices of food, oil and metals would raise the cost of producing other goods, sending inflation soaring well above last year's figure of 2.1% and the European Central Bank's target of 2.0%. The commission also offered mediocre forecasts for economic growth this year of 1.7% and 1.5% for 2008. The economy of the eurozone grew by 2.6% last year.

"The moderation in growth results from the persisting turmoil in the financial markets, the marked slowdown in the United States and soaring commodity prices, all of which are taking their toll on global activity," the Commission said on Monday.

The EU Economic and Monetary Commissioner Joaquin Almunia said that while Europe would not head into a recession, he warned that if inflation spiraled it would choke growth. "Inflation has become a major problem for all of us," he told reporters Monday, adding it was important to avoid anything, including wage hikes, that could lead to further price rises.

EU countries are not the only ones that face the dilemma of countering soaring inflation with the need to buoy a flagging economy by lowering interest rates. On Monday Iceland's statistics office said that inflation in April soared to 11.8%, its highest level since 1990. The impact of rising oil and food prices has been compounded by the weakness of the Icelandic krona, pushing up the price of imported goods.

In a move which surprised economists Hungary's central bank decided on Monday to push interest rates up by 25 basis points to 8.25% on Monday, after inflation rose to 6.7% last month.

The European Commission's report piled pressure on the European Central Bank, which has remained consistently hawkish over interest rates. The ECB has faced criticisms from politicians -- notably Italy's prime-minister-in-waiting, Silvio Berlusconi -- who have warned about the damaging impact of a strong euro particularly for economies that are dependent on exports to the United States or to countries with currencies linked to the dollar. (See: "Europe's $1.50 Headache Is Italy's Migraine" )

In a speech on Monday European Central Bank President Jean-Claude Trichet defended the bank's policy, arguing that controlling inflationary pressure contributed to "appeasing tensions and volatility in the financial markets whilst paving the way for future sustainable growth and job creation in Europe."

Because key commodities are priced in dollars, they have been rising against the U.S. currency as the greenback weakness on foreign exchange markets.

In London gold traded as high as $895.80 per ounce, up from $890.10 late Friday.

Oil rose to a record $119.93 in pre-market electronic trading on the New York Mercantile Exchange from Friday's close of $118.52, after BP shut the Forties pipeline that delivers nearly a third of Britain's North Sea oil. The line was closed due to a Scottish refinery strike.
[full article]

 

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Super Inflation - Euro Style

Europe's Uber-Inflation Headache
[full article]
 
The European Central Bank has stubbornly defied its critics by keeping its eye firmly on inflation, and resisting pressure to cut rates. But its policy seems to have had little impact on soaring prices.

The European Commission warned that it expects inflation within the 15 nation euro zone to rise to 3.2% for the year. This adds to pressure on the European Central Bank to refrain from a confidence-boosting interest-rate cut.

The euro rose to $1.5686 on Monday afternoon in Europe from $1.5635 in late Friday trading in New York. The euro's 15.0% rise against the dollar over the past year is particularly painful for the continent's manufacturing companies, whose already-high labor costs rise relative to those in other currency zones.

In its semi-annual forecast, the Commission said that soaring prices of food, oil and metals would raise the cost of producing other goods, sending inflation soaring well above last year's figure of 2.1% and the European Central Bank's target of 2.0%. The commission also offered mediocre forecasts for economic growth this year of 1.7% and 1.5% for 2008. The economy of the eurozone grew by 2.6% last year.

"The moderation in growth results from the persisting turmoil in the financial markets, the marked slowdown in the United States and soaring commodity prices, all of which are taking their toll on global activity," the Commission said on Monday.

The EU Economic and Monetary Commissioner Joaquin Almunia said that while Europe would not head into a recession, he warned that if inflation spiraled it would choke growth. "Inflation has become a major problem for all of us," he told reporters Monday, adding it was important to avoid anything, including wage hikes, that could lead to further price rises.

EU countries are not the only ones that face the dilemma of countering soaring inflation with the need to buoy a flagging economy by lowering interest rates. On Monday Iceland's statistics office said that inflation in April soared to 11.8%, its highest level since 1990. The impact of rising oil and food prices has been compounded by the weakness of the Icelandic krona, pushing up the price of imported goods.

In a move which surprised economists Hungary's central bank decided on Monday to push interest rates up by 25 basis points to 8.25% on Monday, after inflation rose to 6.7% last month.

The European Commission's report piled pressure on the European Central Bank, which has remained consistently hawkish over interest rates. The ECB has faced criticisms from politicians -- notably Italy's prime-minister-in-waiting, Silvio Berlusconi -- who have warned about the damaging impact of a strong euro particularly for economies that are dependent on exports to the United States or to countries with currencies linked to the dollar. (See: "Europe's $1.50 Headache Is Italy's Migraine" )

In a speech on Monday European Central Bank President Jean-Claude Trichet defended the bank's policy, arguing that controlling inflationary pressure contributed to "appeasing tensions and volatility in the financial markets whilst paving the way for future sustainable growth and job creation in Europe."

Because key commodities are priced in dollars, they have been rising against the U.S. currency as the greenback weakness on foreign exchange markets.

In London gold traded as high as $895.80 per ounce, up from $890.10 late Friday.

Oil rose to a record $119.93 in pre-market electronic trading on the New York Mercantile Exchange from Friday's close of $118.52, after BP shut the Forties pipeline that delivers nearly a third of Britain's North Sea oil. The line was closed due to a Scottish refinery strike.
[full article]

 

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Corn & Oil Prices Jump

Corn jumps as wet weather fans supply concerns, oil jumps
[full article]

 

Corn prices jumped Monday as investors bet that more rain in the U.S. Midwest will force farmers to plant less of the crop, tightening supplies and adding to growing food costs for consumers and livestock owners.

Other commodities traded mostly higher, with crude oil rising to a record near $120 and gold, silver and copper also gaining.

Corn prices have shot up 21 percent this year amid dwindling stockpiles and surging demand to feed livestock and make alternative fuels such as ethanol.

But the weather has been the biggest factor in recent days, with heavy rain in corn-growing areas leaving fields too soggy to work and putting farmers far behind schedule. More rain is expected in the coming days, meaning farmers may have to plant significantly less corn than planned. U.S. farmers were expected to plant about 86 million acres of corn in 2008, an 8 percent drop from last year.

"These forecasts for additional showers still continue to raise concerns that farmers may not be able to get the full 86 million acres planted. The weather will challenge them to get that done," said Shawn McCambride, analyst with Prudential Financial in Chicago.

Corn for May delivery jumped 10.75 cents to $5.88 a bushel on the Chicago Board of Trade after earlier rising as high as $5.96 a bushel.

Rising corn prices mean consumers can expect even higher grocery bills for meat and pork, as livestock producers are forced to pass on higher animal feed costs and thin their herd size.

The planting delay has prompted some farmers to consider using their rain-soaked acres for other crops like soybeans, which have a later growth cycle. That prospect sent soybean prices sharply lower Monday, with the May contract plunging 46.25 cents to $12.795 a bushel on the CBOT.

Other agriculture futures traded mixed. Wheat for May delivery added 15.5 cents to $8.16 a bushel on the CBOT, while July rice futures fell 50 cents to $23.68 per 100 pounds.

In energy futures, crude oil surged to a new high just below $120 a barrel, driven up by labor actions that cut crude supplies from the North Sea and Nigeria. Prices later retreated and gyrated between gains and losses as the dollar steadied against the euro.

Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange in overnight trading, but later retreated to $118.82, still up 30 cents.

Other energy futures traded mixed. May gasoline futures fell 2.08 cents to $3.0329 a gallon, while May heating oil futures fell 0.79 cent to $3.3107 a gallon.

In precious metals trading, the boost in oil prices help lift gold more than $5 as investors bought the metal as an inflation hedge.

Gold for June delivery added $5.50 an ounce to fetch $895.20 on the Nymex, after earlier rising as high as $898.10.

Other precious metals also traded higher. Silver for May delivery gained 16.5 cents, while May copper rose 2 cents to $3.9355 a pound.
[full article]

 

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Wal-Mart's Sam's Club Restricts Purchase of Some Rice

Wal-Mart's Sam's Club Restricts Purchase of Some Rice

[full article]
  

Wal-Mart Stores Inc.'s Sam's Club warehouse unit is restricting purchases of some types of rice to four bags a visit as prices reached a record in Chicago futures trading.

 

The limits on jasmine, basmati and long-grain white rice, a response to ``recent supply and demand trends,'' will be put into effect in all U.S. stores where allowed by law and are effective immediately, Sam's Club spokeswoman Kristy Reed said today in an e-mailed statement.

 

Some consumers have started hoarding rice, the food staple for half the world as prices soar and supplies shrink. China, Vietnam, India and Egypt have curbed sales abroad to safeguard domestic supplies and cool inflation. Thailand also may restrict shipments, a World Bank official said today.

 

``The warehouse clubs are doing it to protect their business customers, like smaller restaurants, caterers, nursing homes, day-care centers,'' said food consultant Jim Degen. ``The business members are the most important members in warehouse clubs because they generate so much more revenue per member.'' Degen is a principal of J.M. Degen & Co., a food industry marketing consulting firm based in Templeton, California.

Some of Costco Wholesale Corp.'s stores, including locations in California, have put limits on sales of rice and flour, Chief Executive Officer James Sinegal told Reuters yesterday. Sinegal didn't return a phone call from Bloomberg News seeking comment.

 

Distribution Systems

Costco and Sam's Club have extensive distribution systems and source worldwide, so they can redistribute their rice supplies within the United States, meaning limits on customers may not be a long-term problem, said Degen.

 

``We are working with our suppliers to address this matter to ensure we are in stock,'' Sam's Club's Reed said. The stores aren't limiting purchases of flour or oil, she said. Reached via phone, she declined to comment further.

 

Rice has more than doubled in the past year. Rice futures for July delivery rose 2.6 percent in Chicago today, touching a record $24.85 per 100 pounds, and have climbed 26 percent this month.

Wheat, corn and soybeans gained to records this year, spurring social unrest in Haiti and Egypt.

 

Wal-Mart, the world's largest retailer, rose 37 cents to $56.92 at 4:15 p.m. in New York Stock Exchange composite trading. Costco, the largest U.S. warehouse club, climbed $1.52, or 2.2 percent, to $69.60.

 

Food Prices

The higher commodities prices are also pushing up U.S. food prices and spurring inflation. The consumer price index climbed 0.3 percent in March, after no change in the prior month, the Labor Department said April 16. Inflation, combined with falling home values and mounting job losses, is leading to cutbacks in consumer spending that may push the economy into a recession.

 

Limits on rice purchases will be felt the most in California and Texas, which have large Asian and Mexican populations, whose diets include rice, Degen said.

 

Soaring prices may put basic foods beyond the reach of the poorest people, raising the risk of a ``silent famine'' in Asia, a World Food Program official said April 21.

 

In the U.S., half of the domestic rice crop meets 88 percent of the country's demand, said David Coia, a spokesman with the USA Rice Federation in Arlington, Virginia.

 

`Uncalled-For Hysteria'

``When global prices rise as quickly as they have, as rice has, and as recently happened with wheat, you are going to have some concerns, and hysteria in some cases that is uncalled for,'' Ephraim Leibtag, an economist with the U.S. Department of Agriculture in Washington, said in a telephone interview. ``Food supplies have been pretty stable in the U.S. over the last 20 to 30 years.''

 

When prices rise rapidly, consumers buy larger quantities to lock in the lower prices, and that effect is exacerbated when a product is storable, he said.

 

The Bureau of Labor Statistics index of consumer prices for rice, pasta and cornmeal rose 12.1 percent in March over a year earlier. In March 2007, the index was up 5.2 percent.

 

``There is no shortage of rice in the United States, and my understanding is that you have these companies like Sam's Club and Costco that want to have rice for all their customers, not just the large purchasers who hoard,'' Coia said by telephone.

 

The worldwide supply shortfall will begin to ease with the June harvest, and may be resolved by the end of 2009, as farmers increase their crops to meet the demand, he said.

[full article]
  

Turmoil in student loans stresses families - Apr. 15, 2008

Powered by    * Please note, the sender's email address has not been verified.       Hi, Here is an intersting article on college funding. The credit crisis has also impacted the student loan markets. Imagine that! Big problems require innovative solutions. Victor Smith Millennium Lyon             Click the following to access the sent link:       Turmoil in student loans stresses families - Apr. 15, 2008*                 Get your EMAIL THIS Browser Button and use it to email content from any Web site. Click here for more information.   *This article can also be accessed if you copy and paste the entire address below into your web browser. http://money.cnn.com/2008/04/15/news/economy/student_loans/?postversion=2008041506

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`Tidal Wave' in Commodities Rises to $400 Billion

`Tidal Wave' in Commodities Rises to $400 Billion

[full article]

 

Global investments in commodities rose by more than a fifth in the first quarter to $400 billion, helping boost prices as investors sought a buffer against inflation and a weaker dollar, Citigroup Inc. analysts said.

 

Investments in commodity indexes rose $40 billion in the first three months of the year to $185 billion, a larger gain than the whole of 2007, Citigroup analysts Alan Heap and Alex Tonks said today in a note to clients.

 

A ``tidal wave of investment flows into commodity markets has further boosted prices,'' the analysts said. ``The weakening U.S. dollar has been the main macro force attracting funds to commodity markets. Other contributors are falling real interest rates and inflation worries.''

The UBS Bloomberg Constant Maturity Commodity Index of 26 futures rose to close at a record on March 5. The gauge climbed 22 percent last year for a sixth consecutive annual increase and has advanced 17 percent this year, while the Standard & Poor's 500 Index gained 3.5 percent in 2007 and has fallen 6.5 percent this year. Most-active crude oil, gold, platinum, wheat, corn and soybean futures are among those that set records this year.

 

After investments in indexes, commodity trading advisers account for the biggest portion of the total amount invested, the Citigroup analysts said. At the end of the first quarter, advisers accounted for $94 billion, 18 percent more than at the end of last year, the analysts said.

 

$70 Billion Inflow

Hedge funds ranked third, with $75 billion in commodity holdings, an increase of 25 percent over the end of 2007, Heap and Tonks said. In all, they estimate $70 billion in additional investment funds flowed into commodities markets in the first quarter.

Exchange-traded funds, or ETFs, accounted for $46 billion in commodity investments as of March 31, up 31 percent from $35 billion at the end of 2007, the analysts said. ETFs track equity, bond and commodity indexes and are often cheaper and easier to trade than similar mutual funds.

 

The ``tidal wave'' of the past quarter is showing ``signs it is already ebbing,'' Heap and Tonks wrote. ``We don't think it is sustainable.''

The credit crisis that began last year has made it ``harder to get finance to build new supply capacity and to build new infrastructure,'' cooling demand, Heap and Tonks said. The effects of the credit crisis on equities markets accelerated the flow of investment funds into commodities, which they said also may prove temporary.

 

``There was no conviction regarding financial assets,'' Jim Vail, who manages $1.5 billion in natural-resource funds at ING Investment Management Co. in New York, said today in a telephone interview.

 

`Seasonal Top'

``It was a seasonal top in commodity prices,'' Vail said. ``There's going to be some pullback, and I look at that as an opportunity.''

``In this type of environment, where supply constraints are repeating themselves, it's going to keep prices higher,'' he said. ``Capital costs are also higher. As the marginal cost of production continues to increase, it tells you where prices are going.''

 

Long-term fundamentals of rising demand and constrained production, which have stimulated investment in recent years, remain intact, yet some investors have started cutting their bets on rising raw-materials prices since the end of the quarter, Heap and Tonks said.

The dollar's decline, while providing a short-term boost to prices from investors seeking a store of value, may not last if the weaker U.S. currency fails to stimulate economic activity to increase consumption of raw materials, Heap and Tonks said. A falling dollar's effect on futures also may fade if it depresses prices in producer currencies, eroding profits, they said.

 

[full article]