Personal Loan Blog

New York, NY, United States (AHN) – Wall Street opened lower Friday after a report showed that the U.S. economy expanded less than forecast..

Just after the opening bell, the Dow Jones Industrial Average was lower by 33 points, the Standard and Poor’s 500 Index was flat and the NASDAQ was up by about 6 points.

Weighing on stocks was a report that showed the U.S. economy expanded at 2.8 percent in the fourth quarter, less than the 3 percent that had been projected.

In Europe the Stoxx Europe 600 Index slipped 0.7 percent as investors await word on developments on the region’s sovereign debt crisis. European Union Economic and Monetary Affairs Commissioner Olli Rehn said authorities are “very close” to reaching an agreement on private-sector involvement in a Greek debt swap.

Despite those words of optimism, the dismal growth of GDP in the U.S. was keeping investors cautious. The health and growth of the U.S. economy is a very important and leading indicator of economic growth worldwide. As analysts like to say, “when the U.S. sneezes, the world catches a cold.”

In corporate news, Ford fell after reporting numbers that missed estimates. Starbucks shares slipped despite reporting better than expected numbers, and Juniper Networks plunged after the second biggest maker of computer networking equipment forecast sales and profits that missed estimates.

In commodities, oil was unchanged at $$99.60 a barrel, gold rose $4.70 to $1,725 a troy ounce and silver was up a few pennies at $33.63.

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The Mortgage Bankers Association raised its forecast for this year’s residential originations. Last month, the annual estimate for 2011 was just under $1 trillion. But this month the trade group raised its prediction to just above $1 trillion.

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D.C., Washington, United States (AHN) – It is not only the U.S. federal budget that is projected to have a 13-digit deficit. According to estimates from economists, the pension fund deficit of state and local workers is expected to hit $1.5 trillion.

The amount is more than double the initial estimate of Boston College’s Center for Retirement Research, which gave a funding gap figure of $700 billion based on an assumption of 8 percent earnings a year.

The 8 percent is based on government assumptions of historical returns of the stock market, although historical performance of the stock market showed no 8 percent annual return over every given period.

Economists explained the ballooning figure to government method of accounting, which underestimates cost of future pension payments.

The look into the real cost of pension plans is timely as Wisconsin, New Jersey and other states grappling with budget deficits and cost cutting measures passed or consider legislation to weaken union power affecting about 17 million state and local government employees.

To fund the pension deficit in Wisconsin, Gov. Scott Walker wants state employees to contribute 5.8 percent of their wages.

Using current accounting methods, the Center for Retirement Research and other groups calculate the shortfall is at least $344 million. However, when the center shifted to revised accounting methods to reflect more accurately future payments, the amount reaches a staggering $1.9 trillion.

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In October, U.S. home-loan production was projected to come in at $248 billion in the fourth quarter by the Mortgage Bankers Association. But in its December mortgage finance forecast, the trade group raised its fourth-quarter projection to $395 billion. MBA’s full-year 2010 production estimate was raised by $104 billion.

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Fannie Mae’s November housing forecast has the nation’s residential originations coming in at $423 billion. The secondary lender cut its forecast from $483 billion projected last month. The reduction was primarily due to fourth-quarter refinance originations, which Fannie now estimates at $56 billion lower than last month’s projection.

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