Markets put on early charge Monday
NEW YORK, Nov. 23 (UPI) -- U.S. markets bolted forward Monday morning, buoyed by a Federal Reserve official's comments on a program to buy mortgage-backed securities.
St. Louis Reserve Bank President James Bullard said Sunday that the central bank should buy mortgage-backed securities through the first quarter of 2010, MarketWatch reported Monday.
"People are worried about what happens to housing once all the government help falls away, so (the bank president's comments) are certainly part of the mix giving a lift this morning," Bill Stone, chief investment strategist at PNC Wealth Management told MarketWatch.
In late morning trading, the Dow Jones industrial average jumped 161.28 points ahead, 1.56 percent, to 10,479.44, before falling back to 10,453.59 after noon. The Standard & Poor's 500 gained 1.79 percent, 19.51, to 1,110.89, before falling back to 1,108.30. The Nasdaq composite index of tech-dominated stock rose 2 percent, 43.02, to 2,189.06, before falling back to 2,176.65.
The benchmark 10-year Treasury fell 10/32 to yield 3.407 percent.
The euro rose to $1.4985 from Friday's $1.4862. Against the yen, the dollar fell to 89.87 yen from Friday's 89.03 yen.
In Japan, the Nikkei 225 index was closed for a bank holiday.
-0-
U.S. debt burden to escalate
WASHINGTON, Nov. 23 (UPI) -- The U.S. government is borrowing just when it should be saving money to pay for an increasing demand for services, an expert in bond management said.
Just before baby boomers hit retirement age, "what a good country or a good squirrel should be doing is stashing away nuts for winter. The United States is not only not saving nuts, it's eating the ones left over from the last winter," William Gross, managing director of Pimco Group told The New York Times.
With interest rates low and investors running to U.S. Treasuries as a safe haven in the past two years, financial costs for U.S. debt have been "on teaser rates," said Robert Bixby, executive director of the Concord Coalition, a watchdog group that monitors government debt.
"We're taking out a huge mortgage right now, but we won't feel the pain until later," he said.
Interest payments on the nation's $12 trillion debt is currently $202 billion a year, which his expected to rise to $700 billion by 2019. In addition, the White House has predicted it will borrow $3.4 trillion more by 2013, the Times said Monday.
-0-
War games push crude oil prices
NEW YORK, Nov. 23 (UPI) -- Crude oil prices rose during the weekend, pushing toward $79, as Iran began a military exercise that heightened tensions in the Middle East.
A market analyst at Susquehanna Financial Group said a weak dollar and the start of five days of war games in Iran pushed prices higher, MarketWatch reported Monday.
Rising prices were caused by "the usual factors of a weaker dollar and a stronger equity market," as well as "new developments in Iran," said analyst Brian Niemiec.
The price of light, sweet crude gained $1.07 from Friday to $78.54 per barrel on the New York Mercantile Exchange. Heating oil prices gained 0.0303 cents to $2.0059 per gallon. Reformulated gasoline prices added 0.0245 cents to $2.0051 per gallon. Natural gas prices rose 0.054 cents to $4.478 per million British thermal units.
At the pump, the national average price of unleaded gasoline was $2.64 per gallon Monday, down from Sunday's $2.641, AAA said.
-0-
Crosswinds builder caught in crossfire
LANSING, Mich., Nov. 23 (UPI) -- The chairman of the Michigan State Housing Development Authority is being hounded by lawsuits involving failed development projects, court records show.
Bernard Glieberman, who said he has lost "a fortune" with the economic downturn, was appointed chairman by Gov. Jennifer Granholm last year, The Detroit News reported Monday.
Glieberman is also the chief executive officer of Crosswinds Communities Inc., which has unfinished projects and unpaid bills that have plagued residents of a Monroe, Mich., homeowners association.
Glieberman's companies have faced lawsuits totaling more than $100 million in various courtrooms across the country due to defaults on loans.
Glieberman said he is "doing things to put things right."
Nevertheless, Monroe resident Willie Hall said Glieberman's predicament was "a slap in the face not only to the residents here, but to the whole state of Michigan."
The Michigan State Housing Development Authority is an advisory board that sets policy for public-private partnerships to construct low-income housing. Positions on the board are unpaid. Glieberman also said none of his projects included MSHDA loans, the newspaper said.
