Reprices for the better were awarded today. On average...

(Reuters) - The U.S. House of Representatives on Thursday approved the first of four bills aimed at ending government assistance for homeowners hurt by the housing crisis, though none are expected to clear the Senate. The House voted 256-171 to kill a fledgling Federal Housing Administration program that allows borrowers who owe more than their home is worth to refinance into a government-backed 30-year fixed rate mortgage. Republicans argued the program was ineffective and not worthy of taxpayer support and the vote to kill the program broke largely along party lines. ((Reporting by Corbett B. Daly; Editing by Gary Crosse))

Friday has the busiest morning economic data schedule of the week. The headliner is also the first report: Retail Sales at 830am. That same time slot also hosts Fed-Speak from NY FRB's Dudley. At 9:55, we get March preliminary Consumer Sentiment followed closely by Business Inventories at 10:00am. Check out "The Week Ahead" linked below, for a more detailed look at the entire week of economic data and events.

(Reuters) -Credit Suisse Group AG (CSGN.VX) has agreed to pay $70 million to settle U.S. litigation accusing the Swiss bank of misleading investors about its subprime exposure and ability to limit losses. The settlement also covers several executives, including Chief Executive Brady Dougan. It allows recovery for investors who bought Credit Suisse's American depositary shares, and U.S. investors who bought Credit Suisse securities in Switzerland, between Feb. 15, 2007 and April 14, 2008, court papers show. It resolves one of many securities fraud cases against banks to arise from the 2007 and 2008 financial crises. The case had its origin in events in early 2008.

(Reuters) - U.S. household wealth rose by $2.1 trillion in the fourth quarter and household debt contracted at the slowest pace since 2008, as consumers stepped up spending and helped fuel the economic recovery. Gains made in investments such as mutual funds boosted overall household wealth to $56.8 trillion even as the value of real estate fell, data released by the Federal Reserve showed on Thursday. Non-financial businesses held $1.9 trillion in liquid assets, such as cash, in the fourth quarter. That was up from a revised $1.8 trillion in the previous quarter, the data showed. (Reporting by Mark Felsenthal and Rachelle Younglai; Editing by Andrea Ricci) RTRS-U.S. HOUSEHOLD NET WORTH RISES $2.1 TRLN TO $56.8 TRLN IN Q4 OF 2010 . RTRS-U.S. Q4 HOUSEHOLD DEBT CONTRACTS AT 0.6 PERCENT ANNUAL RATE, HAS DECLINED EVERY QUARTER SINCE FIRST QUARTER OF 2008 . RTRS-PACE OF DECLINE IN HOUSEHOLD DEBT SMALLEST SINCE Q3 OF 2008 . RTRS-U.S. FEDERAL GOVT DEBT EXPANDS AT 14.6 PCT ANNUAL RATE IN Q4, AFTER 16 PCT PACE IN PREVIOUS QUARTER . RTRS-U.S. STATE AND LOCAL GOVT DEBT EXPANDS 7.9 PCT ON ANNUAL RATE AFTER 5.4 PCT IN PREVIOUS QUARTER . RTRS-U.S. NON-FINANCIAL FIRMS HAD $1.9 TRLN IN LIQUID ASSETS IN Q4, UP FROM REVISED $1.8 TRLN IN PREVIOUS QUARTER - FED

(Reuters) - The U.S. government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains that were crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday. The budget gap for February -- typically a large deficit month -- beat the previous record of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters. The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier. (Reporting by David Lawder; Editing by Padraic Cassidy)

After hitting 3.38 and retracing to the 3.40 target...

Treasuries are getting all the love at the moment as...

*BID-TO-COVER RATIO 3.02, NON-COMP BIDS $18.80 MLN...

The Federal Reserve Board is offering a webinar on the TILA changes on March 17th. Check out its Philadelphia Member Bank Website to register.

Apart from the obvious question of "what is the...

FNCL 4.5's hit 101-22 at their best yesterday....

MND has learned from sources close to FHA Commissioner David Stevens that he plans to resign from his position in coming weeks to take another job outside the Administration. UPDATED: WASHINGTON, March 10 (Reuters) - David Stevens, a key adviser to President Barack Obama on housing policy, plans to step down as head of the Federal Housing Administration in the next few weeks, the U.S Housing and Urban Development Department said on Thursday. "This is just the right time to transition and to get some fresh legs here," Stevens told Reuters in a brief telephone interview. Stevens said he is "not sure yet" what he would do after leaving the administration, which he joined almost two years ago. Housing and Urban Development Secretary Shaun Donovan praised Stevens for his leadership during a "historic time" for the FHA, which does not make loans directly but guarantees them against default. "Dave has been singularly focused on restoring FHA to fiscal health to protect taxpayers and ensure it can fulfill its mission of making homeownership available to qualified moderate-income, underserved and first-time home buyers," Donovan said in a statement. (Reporting by Corbett B. Daly; Editing by Leslie Adler)

Two of the five major lenders are priced aggressively...

10yr notes have made 3 distinct attempts to move lower...

From a 2004 Bernanke Speech: "The economist's argument for free trade is disarmingly simple. Trade is beneficial because it facilitates the division of labor, allowing each person to specialize in the type of production at which he or she is relatively most efficient. At the most basic level, a world in which each person produced everything that he or she consumed would be primitive indeed, as no single person or family in isolation could produce more than a few rudimentary goods and services. In contrast, if each person concentrates on just a few activities, economies of scale and the development of specialized skills allow production to become much more efficient. Thus, if each of us focuses our efforts on just a few types of production and then trades our output with others, we can enjoy a far more varied and abundant supply of goods and services than we could if each person remained an isolated economic unit. Moreover, specialization tends to encourage innovation and hence promotes dynamism and growth as well as efficiency. READ THE FULL SPEECH. LEARN MORE....

Stocks looked as if they would make a support bounce...

(Reuters) - Moody's downgraded Spain's sovereign debt rating by one notch on Thursday and warned of further cuts to come as it expects bank restructuring will cost more than twice what the government expects. "(Moody's) believes there is a meaningful risk that the eventual cost of the recapitalization effort could considerably exceed the government's current projections," the ratings agency said in a statement. The cut in the rating -- to Aa2 from Aa1 -- drove the euro to session lows against the dollar and the premium investors charge for Spanish 10-year debt instead of German Bunds expanded to its widest point in two months at 232 basis points before narrowing again to 226. The Bank of Spain will release its own report on banks' capital needs after markets close on Thursday. The European Central Bank backed Spain's planned measures to shore up the sector, while Prime Minister Jose Luis Rodriguez Zapatero defended Spain's economic fundamentals as reasonable. The government and central bank have forecast no more than 20 billion euros would be needed to recapitalise weak banks. But Moody's said the overall cost was likely to be nearer 40-50 billion euros. In a more stressed scenario recapitalization needs could even rise to around 110-120 billion euros, it said.

Municipal bonds are debt securities issued by or on behalf of U.S. state and local governments, their agencies or authorities. These issuers sell bonds to fund either their general operations or specific projects, such as the construction of bridges or highways. The two main types of municipal bonds are general obligation bonds (G.O.s) and revenue bonds. G.O.s are municipal bonds secured by the full faith and credit of the issuer and usually supported by the issuer’s taxing power. Revenue bonds are secured by the charges tied to the use of the facilities financed by the bonds. For example, revenue bonds are issued to fund toll roads, bridges and water treatment facilities, among other projects, and are secured by the tolls or fees collected by these facilities. side from the specific set of issuers—state and local governments—the defining characteristic of municipal bonds is their tax status. The interest income earned on most municipal bonds is exempt from federal income taxes. Interest payments are also generally exempt from state taxes if the owner of the bond resides within the state that issued the security, and the same rule applies to local taxes.

Following Trade Deficit and Jobless Claims Data, MBS...

(Reuters) - Wells Fargo CEO John Stumpf says principal forgiveness on mortgages would have "huge impact" on Fannie Mae/Freddie Mac. Says principal forgiveness could create incentive for borrowers current on underwater mortgages to default. Says Wells has forgiven $4 billion in principal on loans it holds, but only works in "very specific situations"

At $9.4 billion, Los Angeles County, Calif. leads the country for counties spending the most money on remodeling, according to the National Association of Home Builders (NAHB). Rounding out the top 5 list is Cook County in Illinois, Orange and San Diego counties in California, and Maricopa County in Arizona. “Total remodeling spending in a particular county is most strongly related to the number of home owners in the county,” according to NAHB Chief Economist David Crowe. “On the other hand, we found that remodeling per home depends upon factors such as the share built before 1980, the share owned by married couples, and, most significantly, the average value of the homes.”

* JOBLESS CLAIMS 4-WK AVG ROSE TO 392,250 MARCH 5 WEEK FROM 389,250 PRIOR WEEK (PREV 388,500) * INSURED UNEMPLOYMENT RATE UNCHANGED AT 3.0 PCT FEB 26 WEEK (PREV 3.0 PCT) *** CONTINUED CLAIMS LOWEST SINCE WEEK ENDED OCT 18, 2008 (3.764 MLN)

* JAN EXPORTS +2.7 PCT VS DEC +1.9 PCT, IMPORTS +5.2 PCT VS DEC +2.6 PCT * JAN EXPORTS $167.74 BLN VS DEC $163.30 BLN, IMPORTS $214.08 BLN VS DEC $203.56 BLN * CHINA JAN TRADE DEFICIT $23.27 BLN VS DEC DEFICIT $20.68 BLN * JAN OIL IMPORT PRICE $84.34/BBL, HIGHEST SINCE OCT 2008, VS DEC $79.78/BBL, +14.1 PCT FROM JAN'10 $73.89/BBL *** JAN EXPORTS AT RECORD HIGH, IMPORTS HIGHEST SINCE AUG 2008

(Reuters) - The U.S. House of Representatives on Thursday approved the first of four bills aimed at ending government assistance for homeowners hurt by the housing crisis, though none are expected to clear the Senate. The House voted 256-171 to kill a fledgling Federal Housing Administration program that allows borrowers who owe more than their home is worth to refinance into a government-backed 30-year fixed rate mortgage. Republicans argued the program was ineffective and not worthy of taxpayer support and the vote to kill the program broke largely along party lines. ((Reporting by Corbett B. Daly; Editing by Gary Crosse))

(Reuters) -Credit Suisse Group AG (CSGN.VX) has agreed to pay $70 million to settle U.S. litigation accusing the Swiss bank of misleading investors about its subprime exposure and ability to limit losses. The settlement also covers several executives, including Chief Executive Brady Dougan. It allows recovery for investors who bought Credit Suisse's American depositary shares, and U.S. investors who bought Credit Suisse securities in Switzerland, between Feb. 15, 2007 and April 14, 2008, court papers show. It resolves one of many securities fraud cases against banks to arise from the 2007 and 2008 financial crises. The case had its origin in events in early 2008.

The Federal Reserve Board is offering a webinar on the TILA changes on March 17th. Check out its Philadelphia Member Bank Website to register.

MND has learned from sources close to FHA Commissioner David Stevens that he plans to resign from his position in coming weeks to take another job outside the Administration. UPDATED: WASHINGTON, March 10 (Reuters) - David Stevens, a key adviser to President Barack Obama on housing policy, plans to step down as head of the Federal Housing Administration in the next few weeks, the U.S Housing and Urban Development Department said on Thursday. "This is just the right time to transition and to get some fresh legs here," Stevens told Reuters in a brief telephone interview. Stevens said he is "not sure yet" what he would do after leaving the administration, which he joined almost two years ago. Housing and Urban Development Secretary Shaun Donovan praised Stevens for his leadership during a "historic time" for the FHA, which does not make loans directly but guarantees them against default. "Dave has been singularly focused on restoring FHA to fiscal health to protect taxpayers and ensure it can fulfill its mission of making homeownership available to qualified moderate-income, underserved and first-time home buyers," Donovan said in a statement. (Reporting by Corbett B. Daly; Editing by Leslie Adler)

(Reuters) - Wells Fargo CEO John Stumpf says principal forgiveness on mortgages would have "huge impact" on Fannie Mae/Freddie Mac. Says principal forgiveness could create incentive for borrowers current on underwater mortgages to default. Says Wells has forgiven $4 billion in principal on loans it holds, but only works in "very specific situations"

At $9.4 billion, Los Angeles County, Calif. leads the country for counties spending the most money on remodeling, according to the National Association of Home Builders (NAHB). Rounding out the top 5 list is Cook County in Illinois, Orange and San Diego counties in California, and Maricopa County in Arizona. “Total remodeling spending in a particular county is most strongly related to the number of home owners in the county,” according to NAHB Chief Economist David Crowe. “On the other hand, we found that remodeling per home depends upon factors such as the share built before 1980, the share owned by married couples, and, most significantly, the average value of the homes.”

Reprices for the better were awarded today. On average...

(Reuters) - The U.S. House of Representatives on Thursday approved the first of four bills aimed at ending government assistance for homeowners hurt by the housing crisis, though none are expected to clear the Senate. The House voted 256-171 to kill a fledgling Federal Housing Administration program that allows borrowers who owe more than their home is worth to refinance into a government-backed 30-year fixed rate mortgage. Republicans argued the program was ineffective and not worthy of taxpayer support and the vote to kill the program broke largely along party lines. ((Reporting by Corbett B. Daly; Editing by Gary Crosse))

Friday has the busiest morning economic data schedule of the week. The headliner is also the first report: Retail Sales at 830am. That same time slot also hosts Fed-Speak from NY FRB's Dudley. At 9:55, we get March preliminary Consumer Sentiment followed closely by Business Inventories at 10:00am. Check out "The Week Ahead" linked below, for a more detailed look at the entire week of economic data and events.

(Reuters) -Credit Suisse Group AG (CSGN.VX) has agreed to pay $70 million to settle U.S. litigation accusing the Swiss bank of misleading investors about its subprime exposure and ability to limit losses. The settlement also covers several executives, including Chief Executive Brady Dougan. It allows recovery for investors who bought Credit Suisse's American depositary shares, and U.S. investors who bought Credit Suisse securities in Switzerland, between Feb. 15, 2007 and April 14, 2008, court papers show. It resolves one of many securities fraud cases against banks to arise from the 2007 and 2008 financial crises. The case had its origin in events in early 2008.

(Reuters) - U.S. household wealth rose by $2.1 trillion in the fourth quarter and household debt contracted at the slowest pace since 2008, as consumers stepped up spending and helped fuel the economic recovery. Gains made in investments such as mutual funds boosted overall household wealth to $56.8 trillion even as the value of real estate fell, data released by the Federal Reserve showed on Thursday. Non-financial businesses held $1.9 trillion in liquid assets, such as cash, in the fourth quarter. That was up from a revised $1.8 trillion in the previous quarter, the data showed. (Reporting by Mark Felsenthal and Rachelle Younglai; Editing by Andrea Ricci) RTRS-U.S. HOUSEHOLD NET WORTH RISES $2.1 TRLN TO $56.8 TRLN IN Q4 OF 2010 . RTRS-U.S. Q4 HOUSEHOLD DEBT CONTRACTS AT 0.6 PERCENT ANNUAL RATE, HAS DECLINED EVERY QUARTER SINCE FIRST QUARTER OF 2008 . RTRS-PACE OF DECLINE IN HOUSEHOLD DEBT SMALLEST SINCE Q3 OF 2008 . RTRS-U.S. FEDERAL GOVT DEBT EXPANDS AT 14.6 PCT ANNUAL RATE IN Q4, AFTER 16 PCT PACE IN PREVIOUS QUARTER . RTRS-U.S. STATE AND LOCAL GOVT DEBT EXPANDS 7.9 PCT ON ANNUAL RATE AFTER 5.4 PCT IN PREVIOUS QUARTER . RTRS-U.S. NON-FINANCIAL FIRMS HAD $1.9 TRLN IN LIQUID ASSETS IN Q4, UP FROM REVISED $1.8 TRLN IN PREVIOUS QUARTER - FED

(Reuters) - The U.S. government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains that were crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday. The budget gap for February -- typically a large deficit month -- beat the previous record of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters. The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier. (Reporting by David Lawder; Editing by Padraic Cassidy)

After hitting 3.38 and retracing to the 3.40 target...

Treasuries are getting all the love at the moment as...

*BID-TO-COVER RATIO 3.02, NON-COMP BIDS $18.80 MLN...

The Federal Reserve Board is offering a webinar on the TILA changes on March 17th. Check out its Philadelphia Member Bank Website to register.

Apart from the obvious question of "what is the...

FNCL 4.5's hit 101-22 at their best yesterday....

MND has learned from sources close to FHA Commissioner David Stevens that he plans to resign from his position in coming weeks to take another job outside the Administration. UPDATED: WASHINGTON, March 10 (Reuters) - David Stevens, a key adviser to President Barack Obama on housing policy, plans to step down as head of the Federal Housing Administration in the next few weeks, the U.S Housing and Urban Development Department said on Thursday. "This is just the right time to transition and to get some fresh legs here," Stevens told Reuters in a brief telephone interview. Stevens said he is "not sure yet" what he would do after leaving the administration, which he joined almost two years ago. Housing and Urban Development Secretary Shaun Donovan praised Stevens for his leadership during a "historic time" for the FHA, which does not make loans directly but guarantees them against default. "Dave has been singularly focused on restoring FHA to fiscal health to protect taxpayers and ensure it can fulfill its mission of making homeownership available to qualified moderate-income, underserved and first-time home buyers," Donovan said in a statement. (Reporting by Corbett B. Daly; Editing by Leslie Adler)

Two of the five major lenders are priced aggressively...

10yr notes have made 3 distinct attempts to move lower...

From a 2004 Bernanke Speech: "The economist's argument for free trade is disarmingly simple. Trade is beneficial because it facilitates the division of labor, allowing each person to specialize in the type of production at which he or she is relatively most efficient. At the most basic level, a world in which each person produced everything that he or she consumed would be primitive indeed, as no single person or family in isolation could produce more than a few rudimentary goods and services. In contrast, if each person concentrates on just a few activities, economies of scale and the development of specialized skills allow production to become much more efficient. Thus, if each of us focuses our efforts on just a few types of production and then trades our output with others, we can enjoy a far more varied and abundant supply of goods and services than we could if each person remained an isolated economic unit. Moreover, specialization tends to encourage innovation and hence promotes dynamism and growth as well as efficiency. READ THE FULL SPEECH. LEARN MORE....

Stocks looked as if they would make a support bounce...

(Reuters) - Moody's downgraded Spain's sovereign debt rating by one notch on Thursday and warned of further cuts to come as it expects bank restructuring will cost more than twice what the government expects. "(Moody's) believes there is a meaningful risk that the eventual cost of the recapitalization effort could considerably exceed the government's current projections," the ratings agency said in a statement. The cut in the rating -- to Aa2 from Aa1 -- drove the euro to session lows against the dollar and the premium investors charge for Spanish 10-year debt instead of German Bunds expanded to its widest point in two months at 232 basis points before narrowing again to 226. The Bank of Spain will release its own report on banks' capital needs after markets close on Thursday. The European Central Bank backed Spain's planned measures to shore up the sector, while Prime Minister Jose Luis Rodriguez Zapatero defended Spain's economic fundamentals as reasonable. The government and central bank have forecast no more than 20 billion euros would be needed to recapitalise weak banks. But Moody's said the overall cost was likely to be nearer 40-50 billion euros. In a more stressed scenario recapitalization needs could even rise to around 110-120 billion euros, it said.

Municipal bonds are debt securities issued by or on behalf of U.S. state and local governments, their agencies or authorities. These issuers sell bonds to fund either their general operations or specific projects, such as the construction of bridges or highways. The two main types of municipal bonds are general obligation bonds (G.O.s) and revenue bonds. G.O.s are municipal bonds secured by the full faith and credit of the issuer and usually supported by the issuer’s taxing power. Revenue bonds are secured by the charges tied to the use of the facilities financed by the bonds. For example, revenue bonds are issued to fund toll roads, bridges and water treatment facilities, among other projects, and are secured by the tolls or fees collected by these facilities. side from the specific set of issuers—state and local governments—the defining characteristic of municipal bonds is their tax status. The interest income earned on most municipal bonds is exempt from federal income taxes. Interest payments are also generally exempt from state taxes if the owner of the bond resides within the state that issued the security, and the same rule applies to local taxes.

Following Trade Deficit and Jobless Claims Data, MBS...

(Reuters) - Wells Fargo CEO John Stumpf says principal forgiveness on mortgages would have "huge impact" on Fannie Mae/Freddie Mac. Says principal forgiveness could create incentive for borrowers current on underwater mortgages to default. Says Wells has forgiven $4 billion in principal on loans it holds, but only works in "very specific situations"

At $9.4 billion, Los Angeles County, Calif. leads the country for counties spending the most money on remodeling, according to the National Association of Home Builders (NAHB). Rounding out the top 5 list is Cook County in Illinois, Orange and San Diego counties in California, and Maricopa County in Arizona. “Total remodeling spending in a particular county is most strongly related to the number of home owners in the county,” according to NAHB Chief Economist David Crowe. “On the other hand, we found that remodeling per home depends upon factors such as the share built before 1980, the share owned by married couples, and, most significantly, the average value of the homes.”

* JOBLESS CLAIMS 4-WK AVG ROSE TO 392,250 MARCH 5 WEEK FROM 389,250 PRIOR WEEK (PREV 388,500) * INSURED UNEMPLOYMENT RATE UNCHANGED AT 3.0 PCT FEB 26 WEEK (PREV 3.0 PCT) *** CONTINUED CLAIMS LOWEST SINCE WEEK ENDED OCT 18, 2008 (3.764 MLN)

* JAN EXPORTS +2.7 PCT VS DEC +1.9 PCT, IMPORTS +5.2 PCT VS DEC +2.6 PCT * JAN EXPORTS $167.74 BLN VS DEC $163.30 BLN, IMPORTS $214.08 BLN VS DEC $203.56 BLN * CHINA JAN TRADE DEFICIT $23.27 BLN VS DEC DEFICIT $20.68 BLN * JAN OIL IMPORT PRICE $84.34/BBL, HIGHEST SINCE OCT 2008, VS DEC $79.78/BBL, +14.1 PCT FROM JAN'10 $73.89/BBL *** JAN EXPORTS AT RECORD HIGH, IMPORTS HIGHEST SINCE AUG 2008

Friday has the busiest morning economic data schedule of the week. The headliner is also the first report: Retail Sales at 830am. That same time slot also hosts Fed-Speak from NY FRB's Dudley. At 9:55, we get March preliminary Consumer Sentiment followed closely by Business Inventories at 10:00am. Check out "The Week Ahead" linked below, for a more detailed look at the entire week of economic data and events.

(Reuters) - U.S. household wealth rose by $2.1 trillion in the fourth quarter and household debt contracted at the slowest pace since 2008, as consumers stepped up spending and helped fuel the economic recovery. Gains made in investments such as mutual funds boosted overall household wealth to $56.8 trillion even as the value of real estate fell, data released by the Federal Reserve showed on Thursday. Non-financial businesses held $1.9 trillion in liquid assets, such as cash, in the fourth quarter. That was up from a revised $1.8 trillion in the previous quarter, the data showed. (Reporting by Mark Felsenthal and Rachelle Younglai; Editing by Andrea Ricci) RTRS-U.S. HOUSEHOLD NET WORTH RISES $2.1 TRLN TO $56.8 TRLN IN Q4 OF 2010 . RTRS-U.S. Q4 HOUSEHOLD DEBT CONTRACTS AT 0.6 PERCENT ANNUAL RATE, HAS DECLINED EVERY QUARTER SINCE FIRST QUARTER OF 2008 . RTRS-PACE OF DECLINE IN HOUSEHOLD DEBT SMALLEST SINCE Q3 OF 2008 . RTRS-U.S. FEDERAL GOVT DEBT EXPANDS AT 14.6 PCT ANNUAL RATE IN Q4, AFTER 16 PCT PACE IN PREVIOUS QUARTER . RTRS-U.S. STATE AND LOCAL GOVT DEBT EXPANDS 7.9 PCT ON ANNUAL RATE AFTER 5.4 PCT IN PREVIOUS QUARTER . RTRS-U.S. NON-FINANCIAL FIRMS HAD $1.9 TRLN IN LIQUID ASSETS IN Q4, UP FROM REVISED $1.8 TRLN IN PREVIOUS QUARTER - FED

(Reuters) - The U.S. government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains that were crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday. The budget gap for February -- typically a large deficit month -- beat the previous record of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters. The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier. (Reporting by David Lawder; Editing by Padraic Cassidy)

From a 2004 Bernanke Speech: "The economist's argument for free trade is disarmingly simple. Trade is beneficial because it facilitates the division of labor, allowing each person to specialize in the type of production at which he or she is relatively most efficient. At the most basic level, a world in which each person produced everything that he or she consumed would be primitive indeed, as no single person or family in isolation could produce more than a few rudimentary goods and services. In contrast, if each person concentrates on just a few activities, economies of scale and the development of specialized skills allow production to become much more efficient. Thus, if each of us focuses our efforts on just a few types of production and then trades our output with others, we can enjoy a far more varied and abundant supply of goods and services than we could if each person remained an isolated economic unit. Moreover, specialization tends to encourage innovation and hence promotes dynamism and growth as well as efficiency. READ THE FULL SPEECH. LEARN MORE....

(Reuters) - Moody's downgraded Spain's sovereign debt rating by one notch on Thursday and warned of further cuts to come as it expects bank restructuring will cost more than twice what the government expects. "(Moody's) believes there is a meaningful risk that the eventual cost of the recapitalization effort could considerably exceed the government's current projections," the ratings agency said in a statement. The cut in the rating -- to Aa2 from Aa1 -- drove the euro to session lows against the dollar and the premium investors charge for Spanish 10-year debt instead of German Bunds expanded to its widest point in two months at 232 basis points before narrowing again to 226. The Bank of Spain will release its own report on banks' capital needs after markets close on Thursday. The European Central Bank backed Spain's planned measures to shore up the sector, while Prime Minister Jose Luis Rodriguez Zapatero defended Spain's economic fundamentals as reasonable. The government and central bank have forecast no more than 20 billion euros would be needed to recapitalise weak banks. But Moody's said the overall cost was likely to be nearer 40-50 billion euros. In a more stressed scenario recapitalization needs could even rise to around 110-120 billion euros, it said.

Municipal bonds are debt securities issued by or on behalf of U.S. state and local governments, their agencies or authorities. These issuers sell bonds to fund either their general operations or specific projects, such as the construction of bridges or highways. The two main types of municipal bonds are general obligation bonds (G.O.s) and revenue bonds. G.O.s are municipal bonds secured by the full faith and credit of the issuer and usually supported by the issuer’s taxing power. Revenue bonds are secured by the charges tied to the use of the facilities financed by the bonds. For example, revenue bonds are issued to fund toll roads, bridges and water treatment facilities, among other projects, and are secured by the tolls or fees collected by these facilities. side from the specific set of issuers—state and local governments—the defining characteristic of municipal bonds is their tax status. The interest income earned on most municipal bonds is exempt from federal income taxes. Interest payments are also generally exempt from state taxes if the owner of the bond resides within the state that issued the security, and the same rule applies to local taxes.

At $9.4 billion, Los Angeles County, Calif. leads the country for counties spending the most money on remodeling, according to the National Association of Home Builders (NAHB). Rounding out the top 5 list is Cook County in Illinois, Orange and San Diego counties in California, and Maricopa County in Arizona. “Total remodeling spending in a particular county is most strongly related to the number of home owners in the county,” according to NAHB Chief Economist David Crowe. “On the other hand, we found that remodeling per home depends upon factors such as the share built before 1980, the share owned by married couples, and, most significantly, the average value of the homes.”

* JOBLESS CLAIMS 4-WK AVG ROSE TO 392,250 MARCH 5 WEEK FROM 389,250 PRIOR WEEK (PREV 388,500) * INSURED UNEMPLOYMENT RATE UNCHANGED AT 3.0 PCT FEB 26 WEEK (PREV 3.0 PCT) *** CONTINUED CLAIMS LOWEST SINCE WEEK ENDED OCT 18, 2008 (3.764 MLN)

* JAN EXPORTS +2.7 PCT VS DEC +1.9 PCT, IMPORTS +5.2 PCT VS DEC +2.6 PCT * JAN EXPORTS $167.74 BLN VS DEC $163.30 BLN, IMPORTS $214.08 BLN VS DEC $203.56 BLN * CHINA JAN TRADE DEFICIT $23.27 BLN VS DEC DEFICIT $20.68 BLN * JAN OIL IMPORT PRICE $84.34/BBL, HIGHEST SINCE OCT 2008, VS DEC $79.78/BBL, +14.1 PCT FROM JAN'10 $73.89/BBL *** JAN EXPORTS AT RECORD HIGH, IMPORTS HIGHEST SINCE AUG 2008

(Reuters) - U.S. household wealth rose by $2.1 trillion in the fourth quarter and household debt contracted at the slowest pace since 2008, as consumers stepped up spending and helped fuel the economic recovery. Gains made in investments such as mutual funds boosted overall household wealth to $56.8 trillion even as the value of real estate fell, data released by the Federal Reserve showed on Thursday. Non-financial businesses held $1.9 trillion in liquid assets, such as cash, in the fourth quarter. That was up from a revised $1.8 trillion in the previous quarter, the data showed. (Reporting by Mark Felsenthal and Rachelle Younglai; Editing by Andrea Ricci) RTRS-U.S. HOUSEHOLD NET WORTH RISES $2.1 TRLN TO $56.8 TRLN IN Q4 OF 2010 . RTRS-U.S. Q4 HOUSEHOLD DEBT CONTRACTS AT 0.6 PERCENT ANNUAL RATE, HAS DECLINED EVERY QUARTER SINCE FIRST QUARTER OF 2008 . RTRS-PACE OF DECLINE IN HOUSEHOLD DEBT SMALLEST SINCE Q3 OF 2008 . RTRS-U.S. FEDERAL GOVT DEBT EXPANDS AT 14.6 PCT ANNUAL RATE IN Q4, AFTER 16 PCT PACE IN PREVIOUS QUARTER . RTRS-U.S. STATE AND LOCAL GOVT DEBT EXPANDS 7.9 PCT ON ANNUAL RATE AFTER 5.4 PCT IN PREVIOUS QUARTER . RTRS-U.S. NON-FINANCIAL FIRMS HAD $1.9 TRLN IN LIQUID ASSETS IN Q4, UP FROM REVISED $1.8 TRLN IN PREVIOUS QUARTER - FED

(Reuters) - The U.S. government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains that were crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday. The budget gap for February -- typically a large deficit month -- beat the previous record of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters. The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier. (Reporting by David Lawder; Editing by Padraic Cassidy)

The Federal Reserve Board is offering a webinar on the TILA changes on March 17th. Check out its Philadelphia Member Bank Website to register.

From a 2004 Bernanke Speech: "The economist's argument for free trade is disarmingly simple. Trade is beneficial because it facilitates the division of labor, allowing each person to specialize in the type of production at which he or she is relatively most efficient. At the most basic level, a world in which each person produced everything that he or she consumed would be primitive indeed, as no single person or family in isolation could produce more than a few rudimentary goods and services. In contrast, if each person concentrates on just a few activities, economies of scale and the development of specialized skills allow production to become much more efficient. Thus, if each of us focuses our efforts on just a few types of production and then trades our output with others, we can enjoy a far more varied and abundant supply of goods and services than we could if each person remained an isolated economic unit. Moreover, specialization tends to encourage innovation and hence promotes dynamism and growth as well as efficiency. READ THE FULL SPEECH. LEARN MORE....