One Step Closer to Deflation

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7/17/2010

The Labor Department reported that consumer prices fell 0.1 percent in June, down for the third straight month, paced by further declines in energy prices. On a year-over-year basis, the government’s measure of annual inflation fell from 2.0 percent in May to just 1.1 percent in June, the lowest level since last October when the price index first pushed back into positive territory after almost a year of negative numbers.

 

  
Why throw away good money after bad? It’s a frequently-asked question in the five most expensive real estate markets in the mainland United States--San Jose, San Francisco, Orange County, Los Angeles and San Diego--where over a million home mortgages are under water. That’s nine times the number in all of New York State. In fact, that’s more than 30 other states combined.
  
The Securities and Exchange Commission proposed new rules that would require target date funds to significantly improved disclosures on their marketing materials, in an attempt to help investors better understand these increasingly important investment vehicles. The proposed rules, which are now subject to a 60-day public commentary period, were posted on the SEC’s Web site.
  
Illinois let $5 billion of bills go unpaid. Washington closed state offices. California may cut 200,000 workers’ pay to the minimum wage. Minnesota is delaying tax refunds for a second year. As fiscal 2011 budgets took effect July 1, state and local governments coping with revenue declines from an economic slowdown are fulfilling legal obligations to balance their books by shaving costs and raising taxes to protect a key constituency: owners of $2.8 trillion of municipal bonds. 
 

  

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