Euro regains ground against dollar

Foreigners flock to Treasuries
If foreigners have had their fill of Treasuries, they sure have a funny way of showing it. More than 60% of Government Bond issuance in the Third Quarter was sucked up by international investors, the Fed said Thursday in its quarterly flow of funds report. The U.S. government issued $391 billion of Treasuries during the third quarter, according to the data. The "rest of the world" category accounted for $245 billion of purchases, bringing foreign ownership of outstanding U.S. Debt to 47%. The re...

U.S. fiscal health worse than Europe's: China adviser
“we should be clear in our minds that the fiscal situation in the United States is much worse than in Europe” The U.S. dollar will be a safe investment for the next six to 12 months because global markets are focused on the euro zone's troubles but America's fiscal health is worse than Europe's, an adviser to the Chinese Central Bank said on Wednesday. Li Daokui, an academic member of the central bank's Monetary Policy committee, said that U.S. bond prices and The Dollar would fall when t...

Dollar Higher After Obama, GOP Make a Tax Deal
The Dollar kept gaining against yen and edged higher versus the Euro Wednesday in the aftermath of a tax package that, if passed, could boost the U.S. economy. Republican leaders and the White House made a deal extending Tax Cuts on all income groups for two years while also extending Unemployment Benefits. The deal includes a new Payroll Tax cut for employees and a credit for businesses. The Dollar rose as investors sold Treasury Bonds, driving up yields on government Debt. Rising yields on ...

Tax Bill to add $857 Billion to Debt
by CalculatedRisk on 12/09/2010 11:10:00 PM From Bloomberg: Senate Tax-Cut Extension Plan Would Add $857 Billion to Debt The congressional Joint Committee on Taxation, which estimates the revenue effects of tax Legislation, said the provisions would cost the government $801.3 billion in forgone revenue over 10 years. Extending Unemployment Benefits for 13 months, another feature of the package, would cost $56 billion, the Obama Administration has said.It is important to remember the Joint Com...

The Eerily Prescient Mr. Brooks
The NY Times is now front-paging the notion that David Brooks floated (as a trial balloon on behalf of the White House?) last week - Obama is considering a re-branding as a champion of tax simplification and reform. I thought, and think, that the idea is absurd, as explained in my earlier post.  Still, here was Brooks imagining a bold declaration from Obama: We will extend the Bush rates for everybody for one year, along with Unemployment Benefits. But during that year we will enact a co...

Strong Treasuries sale calms nerves
Large domestic Financial Institutions and foreign central banks were big buyers at an auction of 30-year US Treasury Bonds on Thursday, helping to ease anxieties about a further rise in yields for government Debt. The auction came after the biggest two-day sell-off of US Treasuries since 2008 had sent the yield on the 30-year bond to 4.50 per cent on Wednesday, its highest level since May, and up from just 4.05 per cent at the end of November. EDITOR’S CHOICE US stocks see new high as data im...

John Thune: Better Tax Cut Deal For Republicans 'Not Likely To Happen' (VIDEO)
South Dakota Senator and potential Presidential Candidate John Thune suggested Wednesday that his fellow conservative heavyweights Sen. Jim DeMint (R-S.C.) and Sarah Palin shouldn't expect to be able to craft better Tax Cut bargain for the GOP considering the current Makeup of Congress and the White House. DeMint and Palin have both announced their opposition to the current deal as drawn out by Obama this week, because they believe the minimal increases to the death tax and the two-year extens...

How the World Works: The economics of tax-cut fear-mongering
Despite a full-court press from the White House warning that the U.S. might slip into a "double-dip" Recession if congressional Democrats reject Obama's tax-cut deal, the House Democratic Caucus voted against bringing the package up for a vote on Thursday morning. Judging the significance of the vote is tricky. According to ABC's Rick Klein, the mastermind of the maneuver, Rep. Peter Defazio, D.-Ore., the vote rejecting the deal "was nearly unanimous." Speaker of the House Nancy Pelosi declared ...

Stocks poised to open higher
NEW YORK (CNNMoney.com) -- U.S. stocks were poised to open higher as investors await the government's weekly jobs report, which shows the number of Americans filing for first-time Unemployment Benefits. Dow Jones industrial average (INDU), S&P 500 (SPX) and NASDAQ (COMP) futures were up slightly ahead of the opening bell. Futures measure current index values against perceived future performance. Email Print Comment On Wednesday, stocks drifted higher as a rebound in bank shares offset weakn...

Paul Krugman: Obamas Hostage Deal
Obama needs to understand that "concerns about the tax deal reflect realism, not purism": Obama’s Hostage Deal, by Paul Krugman, Commentary, NY Times: I’ve spent the past couple of days trying to make my peace with the Obama-McConnell tax-cut deal. President Obama did, after all, extract more concessions than most of us expected. Yet I remain deeply uneasy... Obama has bought the release of some hostages only by providing the G.O.P. with new hostages. About the deal: Republicans ...

"Supply-Side Economics: Tea Party Style"
Pro-Growth Liberal takes is puzzled by Michele Bachmann's complaint that extending Unemployment Insurance will increase the Deficit: Supply-side Economics: Tea Party Style: Andrew Leonard covers the opposition to the Obama-McConnell tax deal coming from Tea Party star Michele Bachmann. I’m tempted to say that her comments make me feel 30 years younger... After all, 30 years ago we were mocking supply-siders and their Laugher Curve. Andrew notes: And as for what the country can afford? Th...

House Democrats vow to block tax measure
The Senate opened debate late Thursday on a reworked tax package that would add incentives for Renewable Energy, which many Democrats have demanded, but leave intact the core elements of a deal negotiated by the White House and Republicans, including a revived inheritance tax that has outraged liberal lawmakers. This Story House Democrats vow to block tax measure Tax fight puts Schumer at odds with Obama Max Baucus, the Democrats' dud Poll: What's the greatest benefit for Obama's in supportin...

Greece's loan repayments extended
Debt-strapped Greece will likely get more time to repay the Bailout loans that saved it from defaulting, a top EU official indicated yesterday, as the union sought to keep its government debt crisis from mushrooming. There are fears Greece will be unable to cope with a spike in debt repayments in 2014 and 2015 as it pays back loans from the three-year EU and International Monetary Fund program that ends in 2013. The European Commission is following EU governments ADVERTISEMENT in considering e...

In Europe: Balanced Deflation, or More Depression
Barry Eichengreen: Europe’s Inevitable Haircut : What once could be dismissed as simply a Greek crisis, or simply a Greek and Irish crisis, is now clearly a Eurozone crisis. Resolving that crisis is both easier and more difficult than is commonly supposed.... Greece has a Budget problem. Ireland has a banking problem. Portugal has a private-debt problem. Spain has a combination of all three. But... all must now endure excruciatingly painful Spending Cuts. The standard way to buffer the e...

Items added to tax cut bill to draw support
WASHINGTON — As Democrats in Congress battled in public over a proposal to extend Bush-era Income Tax cuts, a group of Democratic lawmakers are pushing to make subtle changes to help sweeten the pot. The agreement worked out between President Obama and Republican lawmakers would extend the expiring cuts for all Taxpayers for two years, continue jobless benefits for the long-term unemployed and cut Social Security Payroll taxes next year. Many Democrats have balked at the Compromise, particu...

Senate sets up cloture vote for Monday on tax bill
Senate Democrats are moving ahead with a package to extend the Bush Tax Cuts for two years setting up a Cloture vote for 3 p.m. Monday.  A draft bill is still expected to be released soon with Senate Democrats ironing out the final details of the package, that extend the Bush-era Tax Cuts for two years and federal Unemployment Benefits for 13 months. The House has balked at the plan and said they will wait to see what the Senate does before determining whether they'll bring up the bill.  Hou...

Fixed mortgage rates rise to 4.61 percent, which could slow refinancing
Rates on fixed Mortgages rose for the fourth straight week this week, hitting 4.61 percent. The surge could slow refinancings and further hamper the Housing Market. Freddie Mac said Thursday that the average rate on a 30-year fixed loan increased sharply from last week's rate. And it is well above the 4.17 percent rate hit a month ago — the Lowest Level on records dating back to 1971. The average rate on a 15-year fixed loan rose to 3.96 percent. Rates hit 3.57 percent last month — the low...

Summary Box: Mortgage rates rise again
MORTGAGE RATES RISE: The average rate on the 30-year fixed Mortgage increased to 4.61 percent this week from 4.46 percent last week, while the rate on the 15-year loan rose to 3.96 percent. BYE-BYE LOWS: Fixed rates have risen for four straight weeks, pulling away from the Lowest Levels in decades. TAX-DEAL TO BLAME: Mortgage rates tend to track the yields on 10-year Treasury Bonds. Those yields have been rising as investors sell those bonds on expectations that the extension of Tax Cuts and u...

Dems play fiscal chicken
The behavior of Liberal Democrats in the U.S. House is, well, nothing short of astonishing. Yesterday they were in full-throated revolt against the Tax Cut Compromise crafted by a Democratic president. Barack Obama, whose political survival instincts seem to be intact, agreed to a two-year extension of all the Bush era tax cuts, a reasonable extension of the Estate Tax that exempts estates under the $5 million mark, getting in return a 13-month extension on Unemployment Benefits and a cut i...

Who Spends Stimulus the Quickest?
The average baseline recipients increased their total spending by 56.8% of the value of the check they received. Here's how the authors sum it all up: The point estimates suggest that low-income households spent a much larger fraction of their payment on total expenditures relative to the typical (baseline middle-income) household. In absolute terms for total expenditures, of the three groups, only the response for the low-income households is statistically significant. I think that "statistica...

Reconciliation
DADT didn't fail. The Senate did. Recap: Why the left hates the Tax Cut deal (plus some great graphs); why some general fund revenues could be good for Social Security; and why Senate Democrats don't want to vote on the Debt ceiling. 1) There's no link in this sentence, but my guess is that the defeat of the DADT Repeal bill makes the Tax Cut deal a lot less likely. 2) The latest issue of the American Prospect. 3) Some news stories are too shocking to summarize. Recipe of the day: Three takes o...

Wierd Tax Myths #2 -" Recessions, Depressens & Tax Policy
The crash came in 1929. When Ronald Reagan came into office in 1981, the top marginal rate was, once again, 70%. Reagan started cutting in 1982, down to 50%, then to 38.5% in 1987, and 28% in 1988. There was a boom in the fiscal sector. In the mid-eighties the collapse began, and over 1,600 banks failed. There was a huge Bailout. It was followed by the Recession of 1990. Taxes went up slightly under George H.W. Bush, then again under Bill Clinton. The Economy recovered. However, in 1997, th...

HuffPost TV: Howard Fineman On The Tax-Cut Revolt Among House Dems (VIDEO)
HuffPost's Howard Fineman appeared on MSNBC's "Countdown" Thursday night to discuss the revolt among House Democrats against the White House over President Barack Obama's tax-cut Compromise with Republicans. "They're angry. They feel ignored, which they were," Fineman told host Keith Olbermann. "I just think the White House has been focused for the last two years primarily on the Senate ... and they took their eye off the ball, in the case of the House." WATCH: Visit msnbc.com for breaking ne...

DEM REP BLAMES SPEAKER PELOSI For Holding Tax Cuts Hostage (Video)
Oh my… Speaker Pelosi won’t like this. She won’t like this one bit. Democratic Representative Dan Boren (D-OK) blamed Democrats, and Speaker Nancy Pelosi by name, for holding the Tax Cuts hostage and not bringing the Bipartisan package to the House floor for a vote. He better bring a Bodyguard to the next Caucus meeting. Greta Van Susteren: Why isn’t it being brought to the floor? Who’s not bringing it to the floor? Rep. Boren: The Speaker. The Speaker agreed. Ther...

Dem Rep. Dan Boren Blames Speaker Pelosi For Holding Tax Cuts Hostage
Democratic Representative Dan Boren (D-OK) blamed Democrats, and Speaker Nancy Pelosi by name, for holding the Tax Cuts hostage and not bringing the Bipartisan package to the House floor for a vote. Greta Van Susteren: Why isn’t it being brought to the floor? Who’s not bringing it to the floor? Rep. Boren : The Speaker. The Speaker agreed. There was a motion by one of the members of the Caucus today to say let’s put this off. Let’s not do this package that the White House and Sena