U.S. Treasury: Fed's Bear actions help all investors

NF Reporter · 03-21-2008, 04:16 PM

Reuters - The Federal Reserve's actions to lend billions of dollars to prop up and sell off ailing brokerage Bear Stearns will help all Americans by stabilizing capital markets, a senior U.S. Treasury official said.

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waltky · 03-21-2008, 07:41 PM

When's it gonna end?...

Is the worst over, or just beginning?
March 21, 2008: Falling long-term Treasury yields could eventually help consumers - but also may be a sign of continued concern about the economy.

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Bond yields have plunged in the past few weeks. And even if you are not an active investor, you should care about what's been going on in the bond markets lately. Here's why. The yield on the benchmark U.S. 10-year Treasury currently stands at about 3.33%, down from nearly 4% about a month ago. The rate on this long-term government note is a key factor behind what happens to fixed-rate mortgages.

If rates continue to fall, they could hit not only a new low for the year - the 10-year briefly touched 3.28% in January - but could come close to falling below the 3.07% level they hit in June 2003, which was a 45-year low at the time. Other Treasury rates have also fallen sharply. The yield on the U.S. 2-year Treasury is now only 1.58%. The rates on these issues influence the rates for other types of consumer loans, as well as small business loans.

The fact that rates are this low is a sign of just how weak the economy is, since lower rates usually correspond with tougher economic stretches while rising rates are often a product of a robust economy. Still, on the surface, falling longer-term yields should be a relief for consumers. The problem is that loan rates have not fallen as far as they should considering how much yields have declined because of the problems in the credit markets from the subprime mortgage meltdown.

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Treasury bonds for $100
March 21, 2008: Government lowers the minimum price to buy Treasury bonds to $100 from $1,000 in a move to make securities more available to average investors.

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The Treasury Department said Friday it plans to lower the minimum investment amount for government bonds in an effort to make them more affordable for average investors. Beginning April 7, people will be able to buy as little as $100 in Treasury marketable bills, notes, bonds and Treasury Inflation-Protected Securities (TIPS). Investors will also be able to purchase these securities in increments of $100.

The minimum amount and increment purchase size for Treasurys has been $1,000 since August 1998. "The new, lower minimum Treasury amount will put marketable securities within reach of more savers and investors in the United States and around the world," said Anthony Ryan, Assistant Secretary of the Treasury for Financial Markets.

Treasury securities can be purchased directly from the Treasury by creating a TreasuryDirect account online at treasurydirect.gov or a Legacy Treasury Direct account. Securities can also be obtained on either a competitive or non-competitive basis through bond brokers and dealers.

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waltky · 09-27-2008, 11:58 PM

Uncertain future for retirees...

Economy Cracks Many Nest Eggs
Sept. 26, 2008 - Retirees On Edge About Whether Savings Will Last

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Walter Lawrence was living retirement on Easy Street - until Wall St. scrambled his nest egg. "I had a lot of money," Lawrence said. "Today I don't have a lot of money." Half his savings are gone, without him spending a dime, CBS News correspondent Mark Strassmann reports. It's a financial distress call for millions of retirees: America's economy, burning through their assets. Lawrence can spot an emergency. He's a retired Atlanta firefighter and after twelve years, he may have to go back to work, doing something.

"I doubt you would find too many people who would hire a 67-year-old," Lawrence said. "Then what would you do?" Paul Nelson would never have retired at all. He saved, planned, invested for a long walk down the fairway. But his investments are down 25 percent. "They used to say you need X amount of dollars to retire," Nelson said. "I don't think anybody could say right now what you would really need to retire. There's no way."

Even before this week's upheaval, at 18 percent, few American workers were very confident they'd have enough money for retirement. And most retirees have more financial worries now than the day they retired. More Americans older than 55 are still working now than at any time since 1970. And with the economy now in turmoil, labor experts predict more anxious older workers will be forced to put off retirement, Strassmann reports.

More Economy Cracks Many Nest Eggs, CBS Evening News: Retirees On Edge About Whether Savings Will Last - CBS News