Today's Tidbits

From Dow Jones: [The dollar weakened slightly] “…sticking within narrow ranges. Lacking significant U.S. data, investors focused on the closing statements from U.S. and Chinese officials at the bilateral Strategic Economic Dialogue in Washington, but little emerged that hadn’t been heard before…Crude oil futures shrugged off a bigger than expected increase in both U.S. refinery use and gasoline stockpiles, rising slightly as gasoline inventories remain well below historical averages at the start of the peak summer driving season.”

From Bloomberg: “Treasury 10-year note yields rose to the highest level since January as traders reduced the odds of an interest rate cut by the Federal Reserve this year. The 10-year note's yield was higher than that of the two- year security for the first time in three weeks” [2y yield 4.83% (unch), 10y yield 4.85% (+2bp)]

From AP: “Stocks wilted Wednesday as comments from former Federal Reserve Chairman Alan Greenspan and worries about upcoming economic data deflated a rally fed by takeover news.”

From Bloomberg: “Former Federal Reserve Chairman Alan Greenspan said Chinese stocks may suffer a ``dramatic contraction'' after climbing to a record, Reuters reported. The benchmark CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, has jumped about 90 percent so far this year after more than doubling in 2006, adding to concerns among regulators and investors that a bubble may be forming. `It's clearly unsustainable,'' Greenspan was quoted by Reuters …``There is going to be a dramatic contraction at some point.''”

From The Financial Times: “The S&P has done nothing, in dollar terms, for seven years. In terms of gold, it is down 57 percent; in terms of euros, it is down 28 percent. Since the last high [in 2000], the MSCI emerging markets index has gained 95.6 percent.”

From The New York Times: “…the average hedge fund did worse last year, after fees, than the S&P.”

From Bloomberg: “The average number of days missed each year due to injury or illness among all U.S. workers is seven, according to the latest data from the Labor Department …A Mercer Human Resource Consulting survey of 611 companies with 100 or more employees published last year found that the median number of sick days offered is seven.”

From Bank of America: “As 30-year mortgage rates are hovering near their 9-month highs, there are some questions about convexity hedging needs of servicing rights portfolios if rates were to continue to backup. As per our models, the duration of servicing rights portfolios extends by close to $35-$40 billion 10-year Treasury equivalents for a 25 bps move in rates. We expect to see a significant level of convexity
hedging activity from servicers if rates continue to backup because: 1) Servicers are retaining higher than usual servicing spread on their books over the past several months; 2) As the market traded in a very narrow range over the past 9 months, servicers haven't been hedging extension and shortening in their portfolios actively which exacerbates their hedging needs when rates actually move out of their recent range; and, 3) Discount prepayment speeds of some recent vintages will slow down further due to the double whammy of weak housing market and higher mortgage rates.”

From RBSGC: “FNMA's portfolio ended April at $710.6B, down by 6.8% YTD and -3.7% in April.”

From The Wall Street Journal: “Outfitting a home with solar panels usually costs between $35,000 and $40,000, according the Department of Energy. There are rebates and credits to offset that cost, though producing energy from solar panels still costs at least twice as much as using fossil fuels…Housing starts that meet prescribed [green/ energy] efficiency standards accounted for $1.8 billion, or 0.3% of total starts in 2005…”

From Dow Jones: “Iran continues to defy U.N. Security Council demands to scrap its uranium enrichment program and has instead expanded its activities, the International Atomic Energy Agency said Wednesday, in a finding that sets the stage for new council
sanctions.”

From Dow Jones: “In 2006… the industrial use of silver accounted for more than 50% of fabrication demand for the first time ever… Global industrial use of silver rose 6% during 2006 to a record 430 million ounces…The industrial demand for silver increased for fifth straight year, even though the average silver price soared 58% to
$11.55 an ounce…”

From MarketWatch: “Sixty percent of consumers told ICSC and UBS Securities that they were cutting back on discretionary spending as a result of rising gas prices, the most since October 2005. Restaurants are the first place most people cut back…”

From The Financial Times: “This year’s crop of candidates for the Chartered Financial Analyst exam will mark a dramatic reversal from earlier decades, when candidates from Wall Street dominated the test for what is considered a core qualification for work in the securities industry. Asia will this year field 52,900 students for the exam, against 45,400 from the US, with the fastest growth coming from India and China, which fielded few CFA candidates a decade ago. Both countries are now fielding more candidates than either Canada or the UK. The Asian tilt indicates the degree to which a new generation of professionals in the region is now embracing the core principles of Western-style finance and market investment theory. This could have profound implications for the way that capital markets skills are now being dispersed throughout the world – not least because it is occurring just as developing regions, such as Asia, are now becoming increasingly cash rich.”

From The Financial Times: “The popularity of early retirement appears to be waning as more people opt to work on into their 70s. HSBC, the UK-based banking group, on Tuesday released a report entitled the “Future of Retirement”, that was the result of questioning 21,000 people in 21 countries, the largest study of its kind. The bank found that 11 per cent of people in their 70s and a third of those in their 60s are still in some kind of paid employment. The figure is even higher in some places like the US, where 19 per cent of those in their 70s are still working… The study found that only 12 per cent of people in their 40s and 50s expect to take early retirement. This compares with 16 per cent of those in their 60s and 70s questioned in the report who had actually taken early retirement. Only in Germany, South Korea and Hong Kong did a higher proportion of people expect to retire earlier than had been the case in the past.”