Investors flock to US treasury but still profitless

US economy is indeed in the brink of the so called Great Depression. Investors have been looking for any alternatives wherein their investments could trigger profits. Recerntly, thery have flocked to US treasury and tried bond investments. But investors acknowledged no profit from treasury bonds.



The problem for Treasury buyers is that, even in a phase of diminished investor expectations, few people are enthusiastic about loaning the government money for a full two years in exchange for a mere 1.6 percent or 1.3 percent gain.

"Figuring out where the 2-year yield is going to go is a hard call," said Joel Marver, a Treasury technical analyst at Thomson Financial. "We would need to know how the credit crisis is going to play out with all its crazy twists and turns. But when you are in nosebleed territory, it is hard to know what will happen next."

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ON Financial Overhaul Plan: Fed to act as market stability regulator

Bush Administration's Financial Overhaul plan has been the topic in all American sectors. It has been a topic not because of any hidden agenda inclusive with the proposal, since it may push the dying economic condition of US, but because of the new proposal to give new
powers to Federal Reserve to act as market stability regulator. This new power includes the rights of the Fed to regulate and examine the books of every financial institutions that may threaten the financial stability and the whole system as well. would this plan be materialized, after strong criticisms aired by some concerns?

The proposed overhaul would be the most extensive since the current regulatory system was created in response to the 1929 stock market crash and the Great Depression.

It comes at a time when the financial system faces its most severe credit crisis in two decades, one that has resulted in billions of dollars of losses for big banks and investment houses and the near-collapse of the country's fifth-largest investment bank.

The rising tide of bad debt has made it harder for consumers and businesses to get credit, further weighing on an economy struggling with a prolonged housing slump and soaring energy prices. Many economists believe the country is already in a recession.

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NYE RECORDS FLACTUATING STOCKS ON MIXED DATA

The New York Stock exchange has recorded a flactuating stocks last friday after the report came out that personal or consumer spends slightly. The mixed data in NYE stock exchange did not give much worries to stockholders as it surprisingly accelerated to a little percent. On the other hand, stockholders should be aware of the threats which maybe brought out by the profit warning, in which the J.C. Penney Co. is considering.

The day's moves follow two sessions of declines. The Dow fell 120 points Thursday as investors found little reason to continue a big rally that started the week; a government report on the gross domestic product confirmed a big economic slowdown in the fourth quarter.

Bond prices rose Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.49 percent from 3.52 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell $2.53 to $105.05 on the New York Mercantile Exchange.

In corporate news, J.C. Penney predicted a first-quarter profit of 50 cents per share, down from an earlier target of 75 cents to 80 cents. The stock fell $3.00, or 7.4 percent, to $37.52.

Kohl's Corp. fell $2.45, or 5.5 percent, to $42.07. Higher-end retailers lost ground as well. Macy's Inc. slid $1.12, or 4.8 percent, to $22.24, while Nordstrom Inc. declined $1.47, or 4.3 percent, to $33.12.

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South korea's largest pension service is shunning away US treasury

The world's fifth biggest pension fund is shunning away from from from US treasury, Financial Times reported. South Korea's National Pension Service is getting away from the US treasury due to weakening dollar, which may result to the falling of US treasury according to
NPS spokesperson. NPS action is indeed an indication that the US governemnt is in financial trouble, and just want to avoid from possible loose of its funds.

The fund, which expects its assets to rise to 250 trillion won by the end of 2008, holds about 17.4 trillion won (US$17.63 billion) worth of foreign bonds of which U.S. Treasurys account for 94 percent. Those figures would suggest NPS holds about 16.4 trillion won in U.S. Treasurys.

"We sees the attractiveness of U.S. Treasurys falling," NPS spokeswoman, Chi Younghye, said. "The overall size of foreign bonds this year will be similar to last year's. There will be little net increase in our holding of foreign bonds for a while."

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Clear channel Communications trriumphs on $20billion buyout

Among six banks, Citigroup is one that has been under pressure for the controversial rulings of a US court over a $20 billion buyout of noe of the communication facilities in the US. The court decesion is said to be in favor of the US radio operator, the Clear Channel Communications. However, controversies still sorround the affected firms due to lawsuits filed against each other....



Clear Channel had agreed last May at the height of the private equity boom to be acquired by the private equity firms for $39.20 per share.

Since then, banks have become much less willing to make leveraged loans, many of which have lost value because investors have stopped buying them.

The banking group faced losses of about $3 billion to $4 billion on Clear Channel loans, according to a person familiar with the situation, who requested anonymity because he was not authorised to speak.

Clear Channel shares fell $5.69, or 17.5 percent, to $26.87 on Wednesday, after reports that the buyout was in trouble.

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