| Romanian Central Bank Lifts Key Interest Rate
(RTTNews) - The National Bank of Romania raised its policy rate to 9.5% per annum from 9% on Wednesday. In its meeting, the Board of the central bank decided to continue to pursue a firm management of money market liquidity via open-market operations. It also decided to leave the existing minimum reserve requirement ratios unchanged on both leu- and foreign currency-denominated liabilities of credit institutions. The central bank said in a report that it would closely monitor developments in macroeconomic indicators and would assess their outlook. The bank also said that it stands ready to adjust its instrument settings to counteract inflationary pressures in order to re-enter the announced medium-term disinflation trajectory in a sustainable manner at the earliest.
Higher-yield bond funds run into trouble
In one of the more spectacular meltdowns in mutual fund history, Schwab YieldPlus - marketed as a higher-yielding alternative to money market funds - has plummeted to just $2.5 billion in assets from more than $13 billion in May. The shrinkage reflects both a decline in the fund's asset value and a mass exodus by investors. Year to date through Thursday, Schwab YieldPlus has lost 13.4 percent of its value, ranking dead last among ultra-short bond funds, according to Morningstar. The average fund in that category is down 1.5 percent this year. A decline of that magnitude would not be unusual for a stock fund but is rare for a fixed-income fund, especially one that invests in short-term securities. Schwab YieldPlus is not the first but is by far the largest ultra-short-term bond fund to run into trouble as a result of its exposure to subprime and other mortgage-backed securities.
Local housing market shows signs of spring thaw
The somber statistics measuring the housing market in Charleston just keep coming like a steady stream of termites squirming out of woodwork. Charleston-area home sales in the first two months of the year plummeted 28.5 percent from the same period of 2007. The average property that changed hands in that time languished on the market for more than four months. And the number of properties for sale has stretched to a whopping 10,850 listings. After two years of such dismal indicators, the foundation of the area real estate business is full of holes. Some say the whole works are close to collapsing. Others say it already has. Samuel Loggins is closing on a home. 'I've got the key in my grubby little hand. I'm going to the bank to get a check for the lawyers then I'm going to U-Haul to do the whole American-dream thing,' he said last week.
Market drops on news of weak consumer spending
New York- Wall Street finished the week with a decline Friday as the financial health of the consumer came into focus following a report that showed personal spending at its weakest growth in 17 months and a profit warning from JCPenney Co. The major indexes turned in a mixed performance for the week. After weeks of concentrating on credit problems and interest rates, the market was forced to pay attention to the consumers who drive economic growth. The Commerce Department said consumer spending ticked up a paltry 0.1 percent last month, in line with Wall Street's expectations. But that news and the profit warning from JCPenney raised concerns about the well-being of consumers. "I'm viewing a day like today as sort of a continuation from where we were a month or two ago," said Les Satlow, portfolio manager at Cabot Money Management in Salem, Mass.
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