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Five Things You Need to Know: Foldin' Money, Corporate Borrowing, Chinese Social Security

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What you need to know (and what it means).

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Five things you need to know to stay ahead of the pack on Wall Street.

1. Dollars? Spend 'Em If you Got 'Em 'Cause They Ain't Getting Stronger

The dollar is now at an 11-month low, having fallen for six straight days, while Americans in March tried desperately to get rid of their "foldin' money" at the fastest pace in more than two years, according to Commerce Department data.

  • First, the foldin' money. The US Dollar is down about 30% since its high in June 2001.
  • A weaker dollar is beneficial for some companies - namely those with a large percentage of overseas sales - since it makes their products more competitive.
  • Because Americans consume so many imported goods, a weaker dollar could exacerbate any underlying inflation pressures.
  • Oh yeah, a weaker dollar also makes U.S. securities less attractive to foreigners since their returns are reduced in the currency translation.
  • But wait, there's more. According to Commerce Department data, Personal Spending rose .6% in March, the quickest pace in more than two years.
  • Great, the consumer is keepin' on keepin' on, right?
  • If by "keepin' on keepin' on" one means, "desperately trying to stay ahead of inflation that is rumored to be well-contained but which is really causing consumers to fork over more of their paychecks for things they need to survive on a month-to-month basis," then yes, the consumer is indeed "keepin'' on keepin' on."
  • Wait, sorry. We admittedly copped a bit of a negative attitude there. How about some good news?
  • Did we mention that Personal Savings improved?
  • It sure did. Personal Savings as a percent of after-tax income rose to negative .3% in March from negative .6% in February.
  • Ok, so Personal Savings is still negative, as it has been for nearly a full year now, but at least it's less negative!



2. Living on Borrowing Time

This year U.S. companies may sell a record amount of debt as $600 billion worth of bonds mature, according to Bloomberg.

  • Borrowers have sold about $290 billion of bonds since the end of December, 22 percent more than the record pace of 2001, according to data compiled by Bloomberg.
  • U.S. companies will likely sell nearly $700 billion in bonds to refinance maturing debt and finance acquisitions, according to Banc of America Securities analysts.
  • Meanwhile, the spread above U.S. government debt investors demand to own high-yield debt has dropped by about 1 percentage point, Merrill Lynch data show.
  • And investment-grade corporate bonds have lost 1.5 percent this year as Treasury yields rose, the worst performance since 1996, according to the same Merrill data.
  • More than a quarter of all debt coming due this year, or $153 billion, was issued in 2001, when investment-grade securities yielded an average of 7.32 percent.
  • The average yield is 5.96 percent, the highest since August 2002.



3. Asian Centralized Government Seeks Fund Manager for Risky Good Times

China has asked foreign institutions to apply to manage billions of dollars in foreign stocks and bonds, according to the Financial Times.

  • The National Social Security Fund was created in 2002 as a social welfare fund, a pension of last resort.
  • The fund had total assets of $26.5 billion by the end of 2005, but only a small proportion of that total, $1.57 billion, is held overseas.
  • Rules which take effect today allow the fund to invest up to 20 percent of its total assets overseas with its own foreign currency assets.
  • Qualified managers must have a capital of at least $5 billion or $500 billion under custody, according to the Chinese NSSF website.
  • The steps are the latest in a series of moves designed to bolster China's shaky pension system.
  • China is attempting to transition away from its former birth-to-death total welfare system.
  • It is estimated that China's pension system has a shortfall of nearly $100 million.
  • The Chinese, they're just like us!



4. Pretty Sneaky, Sis!

Google is making millions of dollars a year by filling unused Web sites with ads, many of which take advantage of user typos in internet addresses, according to the Washington Post.

  • This kind of advertising relies on "type-in traffic," where users type the information they're looking for directly into the address bar of the Web browser instead of using the search engine.
  • For example, say you would like to visit a Website called, oh, we don't know, Playboy.com, but accidentally type in Ploybay.com.
  • GOOG could theoretically make money by setting up the vacant site Ploybay.com with ads so it can capitalize on your fat fingered typo and apparent urgency to visit the Website of an adult magazine.
  • We don't mean to pry, but does your boss know you are visiting these kinds of websites during the work day?
  • Anyway, industry analysts estimate that roughly 15 percent of all Web traffic originates this way, the Post says.
  • Look, we're not being judgmental or anything, but most employers tend to frown on employees who surf adult-oriented websites during the workday.
  • The Post reported that nearly a dozen sites with variations of "Verizon Wireless" were showing Google ads, suggesting the company may be paying Google for ads on typosquatter-owned sites.
  • Don't worry , we won't mention this little incident to anybody, but you might want to clear your history, delete all cookies, empty your cache and turn auto-type off, Mr. NaughtyNet.
  • The practice has set off a new domain name registration mania with some domain names now going for more than a million dollars.



5. Hola! Estaremos fuera de la oficina hoy.

Los millares de inmigrantes ilegales y de sus aliados a través del país planean una demostración de la fuerza lunes para ilustrar cuánto importan los inmigrantes en la economía de Estados Unidos.

  • El miembro del personal del MV que escribe normalmente esto está hacia fuera hoy.
  • En español, podemos decir de lo que tenemos gusto.
  • ¿Quién es más macho, Toddo o Pepe?
  • Claramente, el Pepe es más macho que Toddo
  • ¿Usted ha ganado el peso, Senor Toddo?



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