Tag Archive | "vice president"

30 Year Mortgages Rates Drop to 5%

Mortgage Rates DropThe announcement that the average rate on a 30-year fixed-rate mortgage (FRM) fell from the recent high last week of 5.05 percent to 5 percent this week was welcome news for potential home buyers who have been on the sidelines recently.

Last week’s average rate on a 30-year FRM was the highest since April 2010 (Primary Mortgage Market Survey released Thursday by Freddie Mac), and dipped this week based mainly on the weakening of the 10-year Treasury yield which it tends to follow.

The vice president and chief economist at Freddie Mac, Frank Nothaft, indicated that, until 2009, the rate of a 30-year FRM had not been as low as 5 percent once in the years since 1971 when Freddie Mac started their survey.

Weakening also, the rate on a 15-year FRM dropped on average .02 percent to 4.27 percent from last week’s 4.29 percent. Also, the rate on the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) dropped on average .05 percent to 3.87 percent from last week’s 3.92 percent. Interestingly, the rate on the one-year Treasury ARM increased on average .04 percent to 3.39 percent from last week’s 3.35 percent.

The White House published its intended $3.7 trillion budget this week. Although there were fears of higher inflation last week which saw a rise in these rates, the budget request appeared to be instrumental in bringing them down again this week.

The average rate on a 30-year FRM bottomed out at 4.17 percent in November; the lowest in 40 years. The average rate on a 15-year FRM dipped to a low of 3.57 percent that month; the lowest since 1991.

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Alibaba and Partners Planning to Spend $4.5 Billion on Logistics

China’s biggest online commerce firm together with its financial partners decided to spend as much as $4.5 billion to set up network facilities and warehouses all over the country that would tap an increasing desire for shopping online.

The company stated on Wednesday that the $3.0 billion to $4.5 billion investment will be acquired over the next three to five years and will be intended chiefly at constructing warehouses as well as setting up network facilities across the country.

In October, the Alibaba Group is planning to spread out its logistics network so they will reach 52 cities in two years from 20 cities at present.

Victor Yip, a UOB Kay Hian analyst in Hong Kong said that this investment will give clients the assurance that the products they will purchase will not be damaged by a third party along the way. This will also help enhance client closeness to the Alibaba platform.

The charismatic founder of Alibaba Group, Jack Ma, believes that China’s logistics market would be portioned and customer service for products bought on the internet would be enhanced. Alibaba group owns a 40 percent share in Yahoo Inc as well.

Jack Ma added that hopefully in the next ten years, whoever will place an order online anywhere in China will receive his or her ordered products within the span of 8 hours. It will allow virtual urbanization of each village all over China.

Alibaba’s Vice President, Ming Zeng said that share of the investment can be made through a fund that would be set up with private equity as well as venture capital firms.

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Geithner Evaluating Support for Broader Tax Reform

Obama’s administration is investigating methods to improve tax incentives for corporate investments in the United States, Treasury Secretary Timothy Geithner informed on Wednesday before his meeting with chief financial officers from some of the biggest companies in America.

Geithner said in comments after his speech at John Hopkins University’s School of Advanced International Studies that they are examining whether they can get political support for a big tax change. This change is revenue neutral but would improve incentives for investing in the United States.

He is expected to gather with CFOs of major companies in the U.S that includes Microsoft Corp and Cisco Systems on Friday to discuss ideas for simplifying, as well as trimming the corporate tax that is almost the highest tax in the world of industry.

Corporate tax reform, according to administration officials, is the foundation for a discussion about comprehensive tax. But, it would be difficult to pass any meaningful reform for the next two years if the Congress is divided.

Several White House officials have said that they concur with the companies’ main complaint that the federal corporate tax rate at 35 percent is way too high. Both parties have also agreed that the tax code is too heavy and troublesome.

However, administration officials and other people noted that deductions, as well as loopholes make it uncommon for companies to pay the 35 percent rate.

Dorothy Coleman, the vice-president of tax and economic policy at the National Association of Manufacturers, told that cutting the corporate tax rate is a big issue for the group’s members, many of whom will attend the Friday meeting.

Coleman said that they are looking at the issue as a start of a debate and a sign that the administration is serious.

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