Replies to post #128393 on Traders of the Caribbean

[GuruTrader]

Economy - Monday
Investor's Business Daily
On Monday July 20, 2009, 6:47 pm EDT
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More Treasury buys? It depends

Whether the Fed expands its Treasury buying program, which along with acquiring mortgage securities was a bid to lower borrowing costs, depends on "overall economic conditions," Atlanta Fed president Dennis Lockhart said. He promised to keep an open mind. Lockhart said the economy is leveling out after a severe recession, but that growth will be weak as consumers worried about their jobs continue to save.

The U.S. job market still faces big challenges as employers delay hiring and stimulus dollars take months to work their way through the economy, said Alan Krueger, assistant Treasury sec'y. Recovery in financial markets and output stabilization are happening sooner than job growth, he said. U.S. restaurant traffic fell 2.6% in the 3 months ending in May vs. a year ago, the worst drop in 28 years, according to NPD Group. High joblessness is curbing consumer spending, especially dining out by families with kids, the research firm said. British mortgage crisis eases

The Bank of England said the country's top six banking groups approved 51,000 home loans in June, up from 45,000 in May. Gross mortgage lending rose 7% to $15.2 bil last month. July home asking prices were down 3.1% from last year. The flow of lending to British firms fell at a slower pace in May, declining by $5.6 bil vs. a $9.9 bil fall in April. But the central bank said M4 money supply's worst monthly fall since '05, and still-weak business lending, will hinder a strong recovery.

IMF backs plan to boost reserves

The International Monetary Fund will vote in Aug. on a proposal to tap an int'l reserve asset it hasn't used in 30 years to bolster reserves of its 186 member nations by $250 bil to better weather the global economic crisis. The developing world stands to get access to $100 bil in Special Drawing Rights without conditions. Some $18 bil will be disbursed to poor nations. China this year proposed using SDRs as an alternative to the U.S. dollar as the world's reserve currency.

Germany denied mulling forced bank recapitalizations to stave off credit squeeze fears, but it'll change an accounting rule to spur lending. Also, the central bank said the economy likely contracted slightly in Q2 after Q1's 3.8% quarterly dive.