Treasury Securities

HERE'S SOMETHING that will surprise you, about the supposedly gloom-and-doom outlook for Social Security. By one official estimate, there's no Social Security problem at all.The forecast you hear most often says the Social Security trust fund will run out of money in 2034. That comes from Social Security's trustees, who make annual projections about the system's health.But Social Security's trustees make three projections, each based on a different assumption about economic growth.In public discussion, you always hear the "intermediate" projection, which warns that the trust fund will be used up by 2034.

WASHINGTON -- The U.S. trade deficit widened less than expected in July and consumer prices were little changed in August, government figures showed yesterday.Those findings -- along with other reports showing a decline in jobless claims and rising incomes for workers -- suggest that outside of a slowdown in manufacturing, the U.S. economy is holding up well in its eighth year of expansion, analysts said."There's enough momentum to keep the economy going despite the weakness in manufacturing," said Cynthia Latta, an economist at Standard & Poor's DRI in Lexington, Mass.

WORRIED about stocks? Have some money you'd like to keep absolutely safe? The federal government has just provided small savers with another choice.You can now buy short-term and intermediate-term Treasury securities for as little as $1,000. Formerly, you needed $5,000 or $10,000 to play.Longer-term securities -- maturing in five years and up -- were already available for $1,000. But savers don't always want to lock up their money for that long a time. Now, you can use Treasuries for your shorter-term savings, too.That is, if you want to. The interest rate on Treasuries is generally similar to what you can earn on comparable bank certificates of deposit.

The Internal Revenue Service has notified municipal borrowers that more than 100 bonds might lose their tax-exempt status.Charles Anderson, manager of the tax-exempt bond group in the IRS' Baltimore office, said yesterday that he sent "adverse letters" to municipal borrowers warning them that the IRS has declared their issues taxable on a preliminary basis. He didn't disclose names of any of the issuers.He said most of the issuers in jeopardy of losing their status violated rules against arbitrage, or investing proceeds from tax-exempt bond sales in higher-yielding investments.

In this extraordinarily strong stock market -- the Standard & Poor's 500-stock index is at an all-time high this morning -- many people wonder where to invest money safely without worrying about Wall Street's ups and downs.U.S. Treasury securities offer safety, liquidity and interest free of state and local taxes. Here is the new issue schedule:Three- and six-month T-bills are issued every Monday, and 52-week T-bills come out the third or fourth Thursdays of each month.Two- and five-year Treasury notes are issued monthly.

IT IS A QUESTION that two federal agencies are trying to answer: Did Alex. Brown Inc. and other investment banking firms intentionally overcharge municipalities millions of dollars in fees while underwriting bond offerings?The Securities and Exchange Commission and the Internal Revenue Service have gathered stacks of documents from dozens of municipal bond offerings completed in the early 1990s to find out. They have yet to announce their findings a year into the investigation.What they have done, however, is turn the sleepy municipal bond industry into a caldron of backbiting and finger-pointing.

IF YOU buy Treasury securities, it just got easier. You now have many more options when you invest through the government program called Treasury Direct.The changes may save you money and will definitely make it easier to buy, sell and reinvest.Under Treasury Direct, you purchase securities through the Federal Reserve. You pay no fees or commissions, as you would if you bought through a stockbroker or bank.Here's how the system works:To buy Treasuries. There's now a single "tender" form to fill in, for all types of Treasury securities -- bills, notes and bonds.

WASHINGTON -- The broadest measure of U.S. trade took a turn for the worse in the third quarter as Asia's economic crisis started to blunt U.S. growth and contributed to weaker sales of Treasury securities to Japan, government figures yesterday showed.The current account deficit, which measures trade in goods, services and investments, widened to $42.156 billion in the third quarter, the Commerce Department said. In the second quarter, the current account deficit totaled $37.852 billion, initially reported as $39.030 billion.

THE NEW strain of Treasury bond designed to protect an investor's principal from inflation sounds like a good deal, but you might want to take a closer look before rushing out to buy them, some experts warn.The bonds, called inflation-indexed bonds, are touted by the U.S. Treasury as a way to save for retirement and college education without worrying that inflation will eat up your capital.The Treasury Department held its first auction this month, and it sold $7 billion worth of the bonds in a snap.

A BLUE ribbon group studying Social Security is looking more closely at shifting some of the system's assets into the U.S. stock market, recent news reports have indicated.It's easy to see why. In the past 70 years, stocks have gained more than three times as much in value as U.S. Treasury securities, which are the current investment vehicle for the Social Security trust fund. For an organization projected to go deeply into the red after the baby boom generation starts retiring, stocks look tempting.

Everybody wants to own Treasury securities. Thanks to guaranteed repayment by Washington, they're almost the only assets that haven't fallen into the toilet. The Wasatch-Hoisington U.S. Treasury Fund owned Treasuries when they weren't cool. The fund, advised by Hoisington Investment Management of Austin, Texas, has been unflinching in its devotion to long-term Treasuries, which are risky when interest rates rise but do very well when the economy craters, rates fall and government guarantees are the only things investors trust.

PRESIDENT BUSH sincerely sees his push to change Social Security as compassionate conservatism. But conservatives ought to be troubled by the plan, which would let younger workers invest some Social Security assets via payroll taxes in corporate stocks and bonds, presumably through mutual funds. The proposal and its underlying assumptions breach rules that conservatives ought to hold dear. Among them: Keep business and politics separate. The world spent the 20th century learning the bad things that happen when the state owns the means of production.

Even if Americans never get the option - or burden - of investing some of their Social Security tax money, the idea still may have served a useful purpose: It could focus many people on the broader issue of where retirement savings belong. The accepted wisdom is that retirement money should be invested in the stock market, because that's where you can expect to earn the highest returns in the long term. But some financial experts say that's a dangerous assumption rooted in investors' recent historical experience - an experience that may tell us nothing about the future.

NEW YORK -Investors waiting for the Federal Reserve's decision on interest rates today are just as concerned about the policy statement accompanying the rate cut as they are about the size of it. Investors, traders and economists surveyed by Bloomberg News all say the central bank will lower its target for overnight interbank lending, or federal funds, which is 4 percent. While they don't agree on how much the cut will be, what they all want to know is what policy-makers see as risks to the economy for the next eight weeks - until they meet again Aug. 21. Yields on Treasury securities maturing in 10 years or more "will react to the Fed's statement more than the actual rate change," said Mike Sheridan, a director and senior portfolio manager who oversees more than $9 billion in assets for The Reserve Funds.

HERE'S SOMETHING that will surprise you, about the supposedly gloom-and-doom outlook for Social Security. By one official estimate, there's no Social Security problem at all.The forecast you hear most often says the Social Security trust fund will run out of money in 2034. That comes from Social Security's trustees, who make annual projections about the system's health.But Social Security's trustees make three projections, each based on a different assumption about economic growth.In public discussion, you always hear the "intermediate" projection, which warns that the trust fund will be used up by 2034.

WASHINGTON -- The U.S. trade deficit widened less than expected in July and consumer prices were little changed in August, government figures showed yesterday.Those findings -- along with other reports showing a decline in jobless claims and rising incomes for workers -- suggest that outside of a slowdown in manufacturing, the U.S. economy is holding up well in its eighth year of expansion, analysts said."There's enough momentum to keep the economy going despite the weakness in manufacturing," said Cynthia Latta, an economist at Standard & Poor's DRI in Lexington, Mass.

WORRIED about stocks? Have some money you'd like to keep absolutely safe? The federal government has just provided small savers with another choice.You can now buy short-term and intermediate-term Treasury securities for as little as $1,000. Formerly, you needed $5,000 or $10,000 to play.Longer-term securities -- maturing in five years and up -- were already available for $1,000. But savers don't always want to lock up their money for that long a time. Now, you can use Treasuries for your shorter-term savings, too.That is, if you want to. The interest rate on Treasuries is generally similar to what you can earn on comparable bank certificates of deposit.

The Internal Revenue Service has notified municipal borrowers that more than 100 bonds might lose their tax-exempt status.Charles Anderson, manager of the tax-exempt bond group in the IRS' Baltimore office, said yesterday that he sent "adverse letters" to municipal borrowers warning them that the IRS has declared their issues taxable on a preliminary basis. He didn't disclose names of any of the issuers.He said most of the issuers in jeopardy of losing their status violated rules against arbitrage, or investing proceeds from tax-exempt bond sales in higher-yielding investments.

WASHINGTON -- The broadest measure of U.S. trade took a turn for the worse in the third quarter as Asia's economic crisis started to blunt U.S. growth and contributed to weaker sales of Treasury securities to Japan, government figures yesterday showed.The current account deficit, which measures trade in goods, services and investments, widened to $42.156 billion in the third quarter, the Commerce Department said. In the second quarter, the current account deficit totaled $37.852 billion, initially reported as $39.030 billion.

IF YOU buy Treasury securities, it just got easier. You now have many more options when you invest through the government program called Treasury Direct.The changes may save you money and will definitely make it easier to buy, sell and reinvest.Under Treasury Direct, you purchase securities through the Federal Reserve. You pay no fees or commissions, as you would if you bought through a stockbroker or bank.Here's how the system works:To buy Treasuries. There's now a single "tender" form to fill in, for all types of Treasury securities -- bills, notes and bonds.