Low Rates

The Bureau of Public Debt announced the new rates on savings bonds. The Series I Bonds purchased today through October of this year will have an annualized rate of 2.2 percent for the first six months of purchase. That compares with an annualized rate of 3.06 percent for new bonds purchased in the previous six months. The I Bond, an inflation protection bond, offers a fixed rate for the life of the bond, and a semi-annual rate that goes up and down based on inflation. The fixed rate is 0 percent.

The Bureau of Public Debt announced the new rates on savings bonds. The Series I Bonds purchased today through October of this year will have an annualized rate of 2.2 percent for the first six months of purchase. That compares with an annualized rate of 3.06 percent for new bonds purchased in the previous six months. The I Bond, an inflation protection bond, offers a fixed rate for the life of the bond, and a semi-annual rate that goes up and down based on inflation. The fixed rate is 0 percent.

WASHINGTON -- For most of this decade, buyers of homes and businesses enjoyed "easy" credit, allowing them to get low-interest loans with few questions asked. Suddenly, credit has become "tight." That means people with spotty credit records are no longer getting mortgages, the largest home borrowers are paying higher interest rates, and some corporate buyouts are in jeopardy. The changes have spooked financial markets, sending the benchmark Dow Jones industrial average last week more than 1,000 points below the record 14,121.

If you're looking for job security, how about becoming a lawyer or financial analyst? These professions, according to Robert Half International, have lower unemployment rates than the current national average of 8.3 percent. The staffing firm says the unemployment rate in the first quarter was 1.9 percent for lawyers, 3.6 percent for software developers, 3.9 percent for financial analysts, 4.4 percent for accountants and 2.8 percent for human resource managers. (Someone has to be there to lay off everyone else.)

With government spending rejected as a stimulus, Americans have become dependent on low interest rates to revive the economy. But low rates alone cannot expand the economy any faster than the slow pace at which it is now growing.Housing and auto sales have risen as a result of low rates, which make financing more affordable, and retail sales have also benefited. But a wide range of economists, executives and industry experts say that low rates cannot alone squeeze much more out of these key industries, unless obstacles like wage stagnation and high prices of some homes are overcome.

Baltimore-area home sales rose 14 percent in September compared with a year ago -- thanks primarily to low mortgage rates, the Greater Baltimore Board of Realtors reported."

CHICAGO -- The dramatic rise in U.S. housing starts during February shows that consumers were rushing to take advantage of a relatively low interest rate environment, economists said.Also, good weather conditions and expectations that first-time home buyers may receive tax credits increased demand in the housing industry, they said.The Commerce Department Tuesday said housing starts rose 9.6 percent in February to a seasonally adjusted 1.304 million units, the highest level since March 1990.

Spurred by attractive interest rates and improved consumer confidence, new-home sales in the Baltimore region were up 16 percent to 2,259 units during the third quarter -- the third consecutive quarterly increase, according to a housing market profile released yesterday by Legg Mason Realty Group Inc."Those low rates are making homes more affordable," said Harvey N. Singer, the group's senior vice president. "People have been wanting to buy houses."The survey, which tracks new-home sales in subdivisions of 20 or more houses in Baltimore and five surrounding counties, showed the biggest growth in townhouse sales, which grew 30.8 percent during the quarter compared with the same period a year ago.Detached-house sales were up 15.5 percent, and sales of multifamily units, such as condominiums, were down 9.5 percent, the survey said.

When it comes to the duration of fixed-income investments, many experts advise investors to keep it short. Interest-rate yields are likely to remain stuck at low levels for a while. Once the economy starts to recover, however, inflation can be expected to revive and bring with it higher interest rates. That's why, experts say, you shouldn't lock in today's rates for too long. "Most people feel - and we agree - that at the back end of this recession there will be pressure on interest rates to move higher," said William Hornbarger, fixed-income strategist for Wachovia Securities.

Low mortgage interest rates and financial assistance packages encouraged homebuying in February, boosting sales in the Baltimore area by 9 percent, the Greater Baltimore Board of Realtors said yesterday.For the month, 852 homes sold, compared with 781 during the same period a year ago. The average sales price fell 4 percent to $118,729, the board said. "The market has remained steady throughout metropolitan Baltimore and is certain to continue in the next months," said Adam D. Cockey Jr., president of the Realtors' board.

As Baltimore's Public Works Department issues more than $4.2 million in water bill refunds, Howard County officials say they will likely avoid similar issues because of recent upgrades to the county billing system. "We just finished a total upgrade of our water billing system in the last two years; we do not use the same system Baltimore uses," county spokesman Kevin Enright wrote in an email. He said the error rates are now at 1 percent. Water meters are read and transferred electronically using a radio interface.

There comes a time for every trader to tally the bets that paid off, revalue the stinkers and recalibrate assumptions according to changing facts. Mutual funds do this every day. Banking companies, which still hold subprime mortgage bonds that are vastly overvalued on their books, don't do it often enough. Business columnists, if they are honest and faithful, mark their beliefs against reality every few months, if only to themselves. When they stop writing a semiweekly column after more than a decade, however, perhaps the reckoning should be explicit and public.

Mortgage giant Freddie Max reports the interest rate on 30-year mortgages have fallen to their lowest levels in more than 50 years. The 30-year fixed-rate mortgage averaged 4.15 percent for the week ending today.  A 15-year fixed rate loan fell to 3.36 percent. Freddie Mac's chief economist credits the Fed's pledge to keep rates low for two years as one reason for the favorable terms. Plus, jitters over the European debt crisis also contributed to low rates.  

Investors watched stock markets swoon and economists fretted about the nation's fragile recovery on the first day of trading after the unprecedented downgrade of the nation's credit rating. But amid the gloom Monday were a few bright spots for consumers: Borrowers may be able to get better rates on mortgages and other loans, and even pay less at the pump. In an ironic twist, jittery investors who bailed out of stocks poured money into U.S. Treasuries — still considered a haven in an uncertain world despite doubts raised by Standard & Poor's in its credit downgrade late Friday.

Baltimore-based First Mariner Bancorp continues to lose money, although the $4.6 million loss in the third quarter is significantly less than a year ago, the company reported Thursday. The parent company of 1st Mariner Bank reported a loss of 26 cents per share for the quarter. In third quarter last year, First Mariner lost $12.9 million or $2.01 per share. First Mariner is under orders by regulators to boost its capital. Chairman and chief executive Edwin F. Hale Sr. said capital ratios at the end of the third quarter were higher than a year ago, and the company is evaluating options to raise them further.

The three top rating agencies have affirmed Maryland's long-held triple-AAA bond status, though analysts from two of the firms signaled concern about the state's depleted retirement system. Moody's called the state's $33 billion system a "credit challenge" and reported ominously that it is funded "at a lower level" than the retirement funds of most other AAA-rated states. The system has 65 percent of the money needed to meet future obligations. The analysts' concerns echo a sentiment raised in February by the Pew Center on the States, which issued a report saying Maryland "has failed to make" significant progress toward properly funding the system.

Mortgage giant Freddie Max reports the interest rate on 30-year mortgages have fallen to their lowest levels in more than 50 years. The 30-year fixed-rate mortgage averaged 4.15 percent for the week ending today.  A 15-year fixed rate loan fell to 3.36 percent. Freddie Mac's chief economist credits the Fed's pledge to keep rates low for two years as one reason for the favorable terms. Plus, jitters over the European debt crisis also contributed to low rates.  

NEW YORK -- Interest rate cuts may well prove to be the right medicine for the ailing economy, but they could also carry some side effects for the nation's banks.Overall, bankers are generally delighted that rates have fallen so dramatically. Their hope, of course, is that loan demand will be stimulated, reinvigorating the economy. Investors, using the same logic, have pushed up bank stocks in recent weeks.The discount rate, after five cuts in the last year, now stands at 3.5 percent, its lowest level since 1964.

Like the former federal prosecutor that he is, Gregg Bernstein launched his campaign for Baltimore City state's attorney Tuesday by building a case against the longtime incumbent, Patricia C. Jessamy. Bernstein announced his candidacy just east of 26th and Calvert streets, the site of a March murder in which both the victim and alleged shooter had previously been arrested on multiple charges and had yet been released. "They were allowed to walk out of the courtroom," Bernstein said, going on to criticize what he called the incumbent's "inexcusable and unacceptable" low conviction rate.

Baltimore has been granted more than $30 million in federal stimulus money for two projects to purchase, renovate and resell or rent abandoned or foreclosed homes in neighborhoods hit hardest by the recession. The Healthy Neighborhoods Consortium, a nonprofit collaboration that includes Habitat for Humanity, the St. Ambrose Housing Aid Center and the city housing department, was awarded $26 million for projects in seven neighborhoods, including Reservoir Hill, Coldstream Homestead Montebello and Belair-Edison.