Filed under: International markets, Other issues, Housing, Federal Reserve

The U.S. Federal Reserve Friday announced an increase in the amounts auctioned to eligible depository institutions under its biweekly Term Auction Facility (TAF) from $50 billion to $75 billion, starting with the auction on Might 5.

The action brings the amounts outstanding under the TAF to $150 billion, the Fed said.

In addition, the Fed also authorized further increases in its existing temporary reciprocal currency arrangements with the European Central Bank and the Swiss National Bank. The arrangements will now provide dollars in amounts of up to $50 billion and $12 billion to the ECB and the SNB, respectively, representing increases of $20 billion and $6 billion. The Federal Open Market Committee (FOMC) extended the term of these reciprocal currency arrangements through January 30, 2009.

Furthermore, the Fed also authorized an expansion of the collateral that can be pledged in the Federal Reserve’s Schedule 2 Term Securities Lending Facility (TSLF) auctions. Primary dealers can now pledge AAA/Aaa-rated asset-backed securities, in addition to already eligible residential- and commercial mortgage backed securities and agency collateralized mortgage obligations, beginning with the TSLF auction on Might 7, 2008.

Economic Analysis: The move by the Fed increases the previously announced TAF and broadens collateral eligible under the TSLF. While unexpected, investors should keep in mind that the move probably was discussed weeks, if not months ago, and is consistent with the Fed’s goal of keeping both major institutions and markets liquid and functioning. Hence, from a subprime default issue and overall U.S. economic recovery standpoint, the decision is neutral: i.e, one should not read into the announcement that ‘mortgage/asset-backed defaults are apt to increase’ in the months ahead.

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Filed under: Forecasts, Bad news, Employees, Economic data, Housing, Recession

The Wall Street Journal is reporting about the novel theory that this recession might have fewer job cuts than those in the past. The paper states that “in past recessions, job losses have eventually gotten much more severe, marked by nationwide cuts reaching 300,000 or more per month. This time — and these are hazardous words — maybe it is different.”

The argument here is based on the fact that job growth has been slow recently meaning there is not “a lot of fat” to cut.

It is a specious argument which might make some people feel superior for a few weeks. With car sales off 14% last month and home prices down by as much as 25% in some markets, this recession is beginning to look like a deep one. Big layoffs have already begun at financial services companies. Retailers may be the next to dump employees, especially if sales are weak in April and May.

The next huge round of layoffs is likely to happen in the airline industry. High fuel prices are causing tremendous losses. If several airlines merge, there will be cuts. If fuel prices stay high, there will be cuts.

As the recession deepens, it will consume industry after industry. Like dominoes dropping, the layoffs are sure to come.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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KentuckyFC writes “One of the biggest problems in nuclear proliferation is verifying that countries are not secretly transferring fissile material by taking it out of reactors and selling it. Now a group of US scientists say they’ve developed a machine that can remotely detect whether a reactor has been switched on and off by detecting the antineutrinos produced by nuclear reactions. The detector is about the size of a automobile engine and is designed to be left near a reactor to record data. The group has been testing a prototype at the San Onofre Nuclear Generating Station in Southern California and says it works well (abstract). Now its up to the International Atomic Energy Authority in Vienna to decide whether to deploy the new machine.”

Read more of this story at Slashdot.

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Meredith writes “A bill that would penalize companies for assisting repressive regimes in censoring the World wide web might finally be headed to a vote. The Global On the web Freedom Act ‘would not only prevent companies like Yahoo from giving up the goods to totalitarian regimes, but would also prohibit US-based World wide web companies from blocking on the internet content from US government or government-financed web sites in other countries.’ Unfortunately, there’s also a giant loophole: the president would be allowed to waive the provisions of the Act for national security purposes.”

Read more of this story at Slashdot.

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Irving Relay for Life makes cancer statement - Dallas Morning News

Hurricane Valley Journal

Irving Relay for Life makes cancer statement Dallas Morning News, Share This Share This No Comments » 02 05 2008 Proposed Telescope Focuses Light Without Mirror Or Lens Posted by: in Life and Science A team of scientists from Observatoire Midi Pyr�n�es in Toulouse, France have been working with an unusual technique for focusing light. It takes advantage of diffraction - the bending of waves when they encounter an obstacle in their path - to focus light as it passes through a foil sheet with precise holes in it. The scientists advocate that an orbital 30-meter imager could resolve planets the size of Earth within 30 light-years. In addition, the foil is much lighter than traditional materials, and thus easier to transport. “A Fresnel imager with a sheet of a given size has vision just as sharp as a traditional telescope with a mirror of the same size, though it collects just 10% or so of the light. It can also observe in the ultraviolet and infrared, in addition to visible light. The imager can take very detailed images with high contrast, which is great for ‘being able to see a very faint object in the close vicinity of a bright one.’” Read more of this story at Slashdot. Share This Share This No Comments » 02 05 2008 Early Contenders for the Automotive X-Prize Posted by: in Life and Science longacre writes “With the official entry period for the $10 million Automotive X-Prize contest just around the corner, Popular Mechanics offers a preview of the most promising entries. Among the 100-mpg vehicles that Detroit (and Japan) have claimed impossible to build comes a hybrid designed by a class of inner-city high school students in West Philadelphia. Also displayed is a futuristic-looking electric model with a range of 300 miles. We discussed the beginning of this contest earlier this year.” Read more of this story at Slashdot. Share This Share This No Comments »

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