Week of January 29, 2012 thru February 4, 2012

US News Events Calendar

--Meetings & Events of Interest to Subscribers



31-Jan 1500/1000 The U.S. Congressional Budget Office publishes its update of the U.S. budget and economic assumptions. CBO Chief Doug Elmendorf to hold briefing 11:00

01-Feb 1330/0830 Philadelphia Federal Reserve Bank President Charles Plosser speaks to the Main Line Chamber of Commerce on the economic outlook, in Philadelphia.

Text:FHFA's DeMarco Statement On Changes To HAMP Mtg Mod Prgm

WASHINGTON (MNI) - The following is a statement from Federal Housing Finance Agency Acting Director Edward DeMarco regarding recently announced changes to the Home Affordable Modification Program, January 27:

"The Administration announced changes today to the Home Affordable Modification Program (HAMP). While HAMP has contributed directly and indirectly to widespread foreclosure prevention efforts, there are still many households struggling with their mortgage and other household debt.

Fannie Mae and Freddie Mac (the Enterprises) currently have 470,000 permanent HAMP modifications on their books but also have active another 530,000 non-HAMP modifications since 2009, or roughly 1 million total.

US Tsy: New HAMP Mtg Mod Prgm Includes GSE Principal Reductns

WASHINGTON (MNI) - The Obama Administration Friday announced it is expanding its flagship mortgage modification program and will now encourage lenders to reduce the principal loan balance for Fannie Mae and Freddie Mac loans.

The announcement comes just three days after President Obama said he would do more to support the struggling housing market and two days after Federal Reserve Chairman Ben Bernanke said housing is holding back the economic recovery.

Assistant Secretary for Financial Stability Timothy Massad in a blog post Friday outlined the changes to HAMP -- including extending the end-date by one year and refocusing on principal reductions.

It's Only $1.2 Trillion, So No U.S. Treasury Press Release

WASHINGTON (MNI) - The hour has almost arrived for an important bookeeping entry at the U.S. Treasury Department, the notation that from this day forward the U.S. government can borrow another $1.2 trillion.

Don't look in your inbox for that email from Treasury alerting the world at the close-of-business trigger time. There won't be any, the department said.

Such is the charged political atmosphere in Washington in a presidential election year, the White House appears not to want to again remind anyone of the huge amount of borrowing that is routinely necessary to keep government operating. And Republicans apparently do not want to again showcase the fact there is nothing they can do about it.

US Debt Offering, Auction Calendar for Tsy and Agency Issues

January 27

Source: U.S. Treasury, Fannie Mae, Freddie Mac Amounts in billions of U.S.

FXWRAP:Euro-Dlr At Six Week High On Weak US Data, Debt Talks

NEW YORK, Jan 27 (MNI) - The euro surged to a fresh six-week high Friday, topping $1.3200 as a combination of weak U.S. economic data and a rebound in optimism over Greek debt talks prompted further short-covering of the single currency.

Euro-dollar was changing hands at $1.3212 in afternoon dealings Friday, the euro in the upper reaches of the day's $1.3090-1.3221 range of the U.S. session after beginning the day around $1.3145.

Dollar-yen meantime was changing hands at Y76.75 in afternoon trading, the dollar in the lower reaches of its Y76.65-00 range of the session after beginning the day near that high.

US Tsy Text: Expanding Flagship Mortgage Modification Program

WASHINGTON (MNI) - The following are excerpts from a blog posting by U.S. Treasury Assistant Secretary for Financial Stability Tim Massad, announcing an expansion of the Obama administration's flagship Home Affordable Modification Program to a broader pool of struggling homeowners:

Extending the Administration's Mortgage Modification Program. In order to help more families at a time when many across the nation still need relief, the Making Home Affordable Program deadline will be extended for an additional year through December 31, 2013. This date conforms to the extended deadline for the Home Affordable Refinance Program (HARP).

Expanding Eligibility to Reduce Additional Foreclosures and Help Stabilize Neighborhoods.

US Economists See Worrying Signs For 2012 in Q4 GDP Numbers

WASHINGTON (MNI) - The outlook for the U.S. economy in 2012 is looking a little bleaker after the release of Friday's fourth-quarter GDP report, which showed growth was propped up in large part by temporary factors that are unlikely to carry through into this year.

While the Federal Reserve and others stressed short-term factors were constraining growth in early 2011, economists now are cautioning the opposite: temporary adjustments pushed Q4 GDP above its likely trend for the first half of 2012 and beyond.

"The economy grew solidly in the fourth quarter, however we think the details of the report were weaker than the headline print," Yelena Shulyatyeva, U.S. economist for BNP Paribas, told MNI.

Talk From The Trenches: Safety Is The Better Part Of Valor

NEW YORK, Jan 27 (MNI) - The Treasury market traded higher Friday after an extremely volatile week.

US Swaptions: Steady/Lower On Range Trade, Little Delivered

CHICAGO, Jan 27 (MNI) - Over-the-counter swaption premiums stabilized near the week's lows Friday after the first Federal Open Market Committee policy announcement for the year on Wednesday.