Word: low-interest
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Established last year by the Massachusetts legislature for the purpose of making low-interest, long-term bank loans available to qualified college students, the Corporation's approval of loans submitted by the banks carries with it a guaranty of 80 per cent of their value...
...Government's tight-money policy also hit Government bonds themselves. Many banks sold off low-interest, long-term Treasury obligations to get more money to lend at higher rates. In addition, the Government has had a hard time selling its low-interest savings bonds at a time when other interest rates were climbing. In 1956 the Government sold $5 billion in E and H bonds, a big $600 million drop below estimated sales. What was worse, the public has flocked to cash in its savings bonds. In the first two weeks of 1957 the value of bonds cashed in actually...
...current credit pinch, the loudest howls are from the U.S. homebuilding industry. Construction of new houses dropped from a near-record 1,300,000 new homes in 1955 to an estimated 1,100,000 this year. The chief reason is that the lending market for low-interest Veterans Administration and FHA-insured mortgages has dried up. Housing starts with VA and FHA mortgages have plummeted 30% to 467,400 units v. only a 1% drop for homes without Government-guaranteed mortgages. Last week the big argument was over the U.S. Government's newest move to help builders by hiking...
...builders-and fewer economists -look for much improvement from the new FHA rates. "The FHA move is a drop in the bucket," wired Levittown Builder William Levitt to President Eisenhower, adding politely, "but when your bucket is dry, even a drop tastes good." Low-interest VA and FHA mortgages simply cannot compete in the tight-money market where businessmen are paying interest rates of 5½% to 6% without a murmur. Even in the mortgage market itself, conventional, non-Government insured loans currently bring as much as 6% in many areas, are far more attractive to banks, life insurance companies...
...squeeze was felt throughout the economy last week. The Treasury's 91-day-bill rate, the money market's most sensitive indicator, rose .22% to 2.82%, a 23-year high. Soaring interest costs for long-term corporate bonds prompted would-be borrowers to postpone new issues; low-interest (3%), 40-year Government bonds sagged in value. While higher interest rates had been partially anticipated on the stock market, stocks dropped to the lowest point in seven weeks, then rallied at week's end. The Dow-Jon'es industrial average closed at 507.91, off 7.88 points...