U.S. Congress Approves $286.5 Bln Highway Legislation

IN CLASS WORK ECONOMICS 331

Using supply and demand curves for the market for both the U.S bond market (which includes corporate and treasury bonds) and the U.S market for loanable funds, explain what might happen (or is happening), ceteris paribus, to bond prices and the interest rate when you see the following (actual) articles in the papers:

A

U.S. Congress Approves $286.5 Bln Highway Legislation

July 29 (Bloomberg) -- The U.S. Congress approved $286.5 billion for highway and transit projects.The Senate voted 91-4 to approve the legislation tonight in Washington following the 412-8 passage of the House earlier today.

``The reason this bill was so difficult is there wasn't enough tax money to deal with the infrastructure needs of this country,'' said House Ways and Means Committee Chairman Bill Thomas, a California Republican.

B

Is A Housing Bubble About To Burst?

Business Week- April 2005

As rising rates send mortgage payments higher, demand may cool
How crazy is real estate getting in parts of the country? Ask Sierra and Corbin Stewart, who just bought a modest, 2,000-square-foot house in Pleasanton, Calif., for $730,000. Mortgage and tax payments will consume 55% of their income, forcing them to do without extras such as cable TV. Says Sierra, a 29-year-old marketer: "The other night we were doing our budget, and we almost called the real estate agent and said we want to get out."

C

Fed Reserve inflation fears grow
BBC- 30th August 2005
The US Federal Reserve is increasingly worried about rising inflation, minutes of its August meeting suggest.
On 9 August Fed members warned that inflation was "at upper end of the range they viewed as consistent with price stability."
The Fed has raised the base rate ten times as it struggles to bring a torrid housing market under control amid signs high oil prices could boost inflation.

D

Global investment managers predict 2006 equities performance: most market returns lower than in 2005
Global
New York, 9 January 2006
Global equity returns for 2006 will be in single digits for major global equity indices, trailing last year's double-digit returns for most major markets
Investment managers expect that performance of equities in 2006 will lag 2005 double-digit returns for major global equity indices, with a particularly sharp decline in the outlook for emerging markets, according to Mercer Investment Consulting's annual Fearless Forecast survey.
Investment managers from 157 firms worldwide, which have more than US$20 trillion in assets under management, participated in this year's Fearless Forecast, an established, highly-regarded survey of economic and capital markets expectations for the year ahead Respondents were asked to make investment forecasts in US dollar terms.
Global equity markets will achieve a median 7.6% return in 2006, the global investment managers in the Mercer survey predicted, which compares to a 9.5% return for theMSCI World IndexSM in 2005 and annualized historical returns for the past three years of 19.3%.

E

Senate passes $8 billion in tax breaks for Gulf Coast businesses
By Mary Dalrymple
ASSOCIATED PRESS
12:09 p.m. December 16, 2005
WASHINGTON – The Senate passed nearly $8 billion in tax breaks for Gulf Coast businesses on Friday but denied federal help for casinos, liquor stores and golf courses.
Almost four months after Hurricane Katrina slammed into the coast, destroying businesses and jobs, the Senate responded to President Bush's appeal for revitalizing the region with a special enterprise zone. Senators urged the House to pass the legislation quickly.

Bs shifts to the right, Ld to the right , P falls, I rises

F

Treasury Bond Volatility May Rise as Greenspan Nears Retirement

Aug. 29 (Bloomberg) -- Volatility in the $4 trillion market for U.S. Treasuries may increase on concern the Federal Reserve will be less forthcoming about monetary policy after Chairman Alan Greenspan departs in January.

The end of Greenspan's 18-year stint as head of the U.S. central bank is raising speculation among investors and traders that Fed policy will change with the new chairman. Under Greenspan, policy makers sped up the release of committee meeting minutes and used terms such as ``considerable period'' and ``measured'' to flag the path of interest rates

Bd shifts to the left, Ls to the left, P falls, I rises

G

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State business confidence dips

Wednesday, February 08, 2006

By WILLIAM FREEBAIRN

Massachusetts business confidence dropped last month to its lowest level in more than two years, according to an industry survey.

Associated Industries of Massachusetts' business confidence index declined to 54.7, a loss of 1.9 points from December. It was the third straight month of decline for the index, which is based on a survey of members of the employer association.

H

TREASURIES-Bonds rise as unexpected jobless jump fuels bid

Published September 23, 2010

By Ellen Freilich

NEW YORK (Reuters) - Weaker-than-expected economicdata boosted U.S. government securities prices

I

North, Southeast Asian bond market site launched
Posted: 3:17 AM | May 17, 2004
Alexander Villafania
INQ7.net

The Asian Development Bank (ADB) and the Associated of South East Asian Nations Plus 3 (ASEAN+3) recently launched a new website providing information on the growing corporate bond markets in the North and Southeast Asian region.

The Asian Bonds Online website (http://asianbondsonline.adb.org) gives investors an overview of the bond market infrastructure and activities, rules and regulations, market data, policies, and initiatives of countries in the North and Southeast Asian regions

(ASSUME THAT ASIAN BONDS ARE NOT CONSIDERED PART OF THE US BOND MARKET)

J

Report: Iraq war costs could top $2 trillion

New study takes into account long-term costs of healthcare for wounded soldiers.

By Tom Regan | csmonitor.com

A new study by Columbia University economist Joseph E. Stiglitz, who won the Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes concludes that the total costs of the Iraq war could top the $2 trillion mark. Reuters reports this total, which is far above the US administration's prewar projections, takes into account the long term healthcare costs for the 16,000 US soldiers injured in Iraq so far.

K

Stock Market Volatility said to decline.

A new report by the Fed suggests that the stock market volatility in U.S financial markets has decreased in the last year, measured in a year by year basis.

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