More Than a Third of Americans Aren't Saving for Retirement

To contact us Click HERE

SEATTLE, Dec. 3, 2012 /PRNewswire/ -- Getting older may not be easy, but taking a back seat with your retirement plan could lead to a destiny that is more glum than golden. A new survey from Capital One ShareBuilder reveals that while a majority (54 percent) of Americans plan to retire by age 65, many (36 percent) are not actively contributing to a retirement plan, and more than a quarter (26 percent) are unsure how much they need to save. The survey of American pre-retirees found that while confidence in the ability to save for retirement has improved (with 33 percent claiming to be more confident than they were a year ago), nearly one in four (23 percent) are concerned they may never save enough to retire.(Logo: http://photos.prnewswire.com/prnh/20121112/PH10741LOGO )"Now more than ever, it is important for Americans to take their retirement plans into their own hands to ensure they have an adequate nest egg," said Dan Greenshields, president of Capital One ShareBuilder, Inc. "While planning for a time that many see as a distant future can be a daunting task, people need to assess where they want and expect to be financially when they retire and take advantage of the various tools and resources available to plan for their financial future."Retirement Timing and Lifestyle: When and how do Americans plan to retire?

• More than half (54 percent) of Americans plan to retire by age 65, while 23 percent say they don't plan to ever fully retire.
• One in four (25 percent) Americans plan to work part-time during their retirement, and that percentage increases closer to retirement age, with 40 percent of Americans age 55-64 saying they'll work part-time.
• A third (33 percent) of Americans plan to maintain their current lifestyle, while 17 percent plan to make sacrifices and 11 percent plan to improve their lifestyle; 38 percent said they are unsure of what lifestyle they plan to lead.

Roadblocks to Retirement Savings: What's keeping Americans from saving?

• Paying for college tuition (20 percent), job loss (10 percent) and daily household bills (14 percent) are the top roadblocks for retirement savings, according to respondents.
• Only just over one third (37 percent) of Americans say nothing has impeded their ability to save for retirement.

"At any point in life, events can come up where even the best laid financial plans can be derailed," Greenshields said. "Having an adequate emergency or rainy day fund will help ease the financial burden of unexpected costs – and help keep you on track for retirement."The ING DIRECT Orange Savings Account, which can be directly linked to your ShareBuilder account, boasts features including automatic savings functionality and a My Savings Goals tool designed to help build a financial cushion, so you won't need to dip into or cease contributing to your retirement savings.Facing Retirement with an Arsenal of Tools:http://www.cnbc.com/id/100269511

Working Late, by Choice or Not

REPORT after report has made abundantly clear that job growth is weak, but there’s one wide swath of the population where employment growth is going gangbusters: older Americans.


A record 7.2 million Americans age 65 and older are working — double the number 15 years ago — partly because many older Americans love to work and partly because many feel too financially squeezed to retire.

With the value of many 401(k)’s and homes taking a beating during the recession and with energy and health care prices climbing, many who dreamed that retirementwas just around the corner have reluctantly kicked their retirement plans down the road.

While the overall number of Americans working has fallen by 4.4 million since the Great Recession began four and a half years ago — with many dropping out of the work force in frustration and some retiring early — the number of Americans 65 and older who are working has jumped by 1.4 million, a whopping 25 percent increase. Some work as doctors, some in retail, and some, with an entrepreneurial bent, start businesses in their 60s.

Americans are remaining healthier longer and living longer, making it easier to work past age 65. Moreover, it has grown easier for older Americans to continue working as the economy has shifted from physically taxing manufacturing jobs to less grueling service sector jobs.

In a survey done last year, the Society of Actuaries found that 55 percent of older Americans who continued working said they had done so to stay active and involved, while 51 percent said they had done so for additional income.

“One obvious reason people are working later is money,” said Steven A. Sass, program director at the Boston College Center for Retirement Research. “There’s a concern about what they have in their 401(k) and about Social Security.”

He said baby boomers were getting less than their parents did from Social Security because of the increase in the full retirement age — people cannot obtain full Social Security benefits until age 66, and for those born after 1957, the age will be 67. “Not only are they getting less from Social Security,” Mr. Sass said, “but many don’t have a pension that gives them a steady income after they retire.”

These factors help explain why 18.5 percent of Americans 65 and older remain in the labor force, up from 12.1 percent in 1995. Many have stayed in the work force past 60 because older Americans seem to be paying an ever-larger share of their incomes toward medical expenses and because many corporations have stopped providing health coverage to retirees, forcing many to work until Medicare is available at 65.

“Maybe people have recovered from the stock market plunge,” said Sara E. Rix, a senior policy adviser with the AARP Public Policy Institute. “But many people are still anxious about what may happen to the market, and that has caused many to delay retirement.”

Here are the stories of five Americans working well past age 65.

http://www.nytimes.com/2012/05/10/business/retirementspecial/for-many-reasons-older-americans-remain-at-work.html?pagewanted=all&_r=0

2013 Is Bernanke's Year: Unlimited QE And Total Control Of The Fed

To contact us Click HERE

Bernanke and several of his central bank colleagues around the world have unleashed a new era of monetary policy, marked by zero-bound nominal interest rates coupled with unprecedented and massive balance sheet expansion. In this post-financial crisis world, the Fed has taken a Keynesian edict and turned it on its head: instead of the government stepping in after a crisis to make up for the loss of aggregate demand from the private sector, it has fallen to central banks.

Through that process, the Federal Reserve has become the most important market participant, flooding markets with liquidity and owning more than a third of the Treasury market by the end of next year, according to Barclays’ economics team. The latest iteration of their asset purchases, or QE4, consists of $40 billion a month in RMBS purchases and $45 billion in unsterilized Treasury purchases, meaning the Fed’s balance sheet will grow at a rate of $85 billion until the Fed sees a substantial improvement in labor markets.

The Fed is set to turn even more bullish in 2013, as its natural rotation sees two centrists and Jeffery Lacker, head of the Richmond Fed and a lone dissenter in the FOMC, replaced. In their place will come Esther George of the Kansas City Fed (a moderate hawk, which means she’s mildly opposed to more accommodation) and James Bullard of the St. Louis Fed (who has the potential to be a dissenter, according to Barclays), along with ultra-doves Charles Evans and Eric Rosengren. Furthermore, Minneapolis Fed chief Narayana Kocherlakota, a former dissenter, has quietly moved to a more dovish stance, adding further support for the Chairman.

One can’t blame Bernanke for trying to spark growth in an economy that has struggled to get off the ground since the 2008 financial implosion. A divided government has created artificial threats like the fiscal cliff, while the fear of fiscal unsustainability has increased calls for austerity. After interest rates fell to zero, Bernanke and the FOMC pushed down longer-term rates through asset purchases. Flattening the yield curve, the Fed has sought to ease credit conditions. The intention is to help homeowners re-finance mortgages at lower rates, allow consumers cheaper financing to buy cars, and give firms favorable borrowing rates.

Bernanke’s low rates have effectively “helped housing and the auto industry,” according to Raymond James’ chief economist Scott Brown. Automakers like General Motors and Ford have seen sales recover, while homebuilders like KB Home and Lennar have been on a tear this year. But the Fed’s ultra-accommodative stance has been “a mixed bag for banks.” Major names like JPMorgan Chase and Wells Fargo have access to cheap money, but their lending margins end up being squeezed by a narrower spread between long- and short-term rates.

Detractors of the Fed have argued it has distorted market action. And indeed it has, interest rates have been at record lows for years, with yields on 10-year Treasuries hovering near all-time lows. The issue of the Fed’s exit strategy has been raised on several occasions, as observers note a balance sheet approximating $4 trillion (if asset purchases continue through all of 2013) has to be unwound at some point. Goldman Sachs’ research team estimates that economic growth will pick up in the second half of 2013, sparking a “gradual but steady rise in bond yields” that takes real rates on 10-year Treasuries to 2.2% by the end of 2016 and 3.75% by 2016.

http://www.forbes.com/sites/afontevecchia/2012/12/20/2013-is-bernankes-year-unlimited
-qe-and-total-control-of-the-fed/

Bill Moyers on the Fiscal Cliff Myth or Reality

To contact us Click HERE


It puts things in perspective. The second part is very touching and is with an author and poet Jim Autry who just wrote the book "Choosing Gratitude: Learning To Love The Life You Have."
Click below to go to Bill Moyers & Company website and below the video is the transcript. Sorry about all the confusion on that. I know many of you cannot watch videos.
http://billmoyers.com/episode/full-show-fiscal-cliffs-and-fiscal-realities/

This is on Jesse's but I think it should go viral. Go over to his site for the reading or watch this video about psychopaths.

The pros and cons of natural-gas vehicles

To contact us Click HERE
By Marcia Passos Duffy • Bankrate.com

Highlights

• Natural-gas cars have been zipping around foreign highways for decades.
• This type of car could help break the U.S. free of dependence on foreign oil.
• Natural gas is cheaper -- $1.50 to $2 less per gasoline gallon equivalent.

Clean. Abundant. Cheap. Domestic. What's not to like about natural gas? So why not use it to power a car?Most Americans think of natural gas as a fuel source to heat their homes or run their clothes dryers or stoves. But natural-gas cars have been zipping around foreign highways for decades. According to the industry group NGV Global, there are more than 15.2 million natural-gas vehicles on the road worldwide.However, natural gas has been slow to gain traction in U.S. passenger vehicles. Nationwide, there are only 120,000 natural-gas vehicles, or NGVs.

Game changers

The recent discoveries of massive natural-gas reserves in the U.S. may be a game changer, says Rich Kolodziej, president of Washington, D.C.-based Natural Gas Vehicles for America, or NGVAmerica, a trade association for the natural-gas vehicle industry.
NGVs could help to break the U.S. free of dependence on foreign oil, Kolodziej says. They are also better for the environment. According to the Environmental Protection Agency, NGVs pave the potential to emit 25 percent less greenhouse gases than diesel-powered vehicles.Best of all, natural gas is cheaper -- $1.50 to $2 less per gasoline gallon equivalent, according to NGVAmerica.Those significant savings have not gone unnoticed by businesses and municipalities.Today, 40 percent of new garbage trucks and 25 percent of new buses in the U.S. can run on natural gas, Kolodziej says. "In the city of Los Angeles, all the buses are now running on natural gas," he says.The potential of natural gas to fuel our cars has not gone unnoticed by the U.S. government. In February 2012, the U.S. Department of Energy announced a $30 million competition aimed at finding ways to "harness our abundant supplies of domestic natural gas for vehicles."The money has since been awarded to 13 research firms, which are working on breakthrough technologies to bring NGVs to the general public.

Advantages of NGV

Read more: http://www.bankrate.com/finance/auto/natural-gas-vehicles.aspx#ixzz2GUHR0zfK

Airline fees are adding up

To contact us Click HERE

By Joan Lowy THE ASSOCIATED PRESS
WASHINGTON —  For many passengers, air travel is only about finding the cheapest fare. 
I cannot think of a dumber way to choose a flight. To me it is about comfort and timing. QB

But as airlines offer a proliferating list of add-on services, from early boarding to premium seating and baggage fees, the ability to comparison-shop for the lowest total fare is eroding. 

Global distribution systems that supply flight and fare data to travel agents and online ticketing services like Orbitz and Expedia, accounting for half of all U.S. airline tickets, complain that airlines won’t provide fee information in a way that lets them make it handy for consumers trying to find the best deal. 

“What other industry can you think of where a person buying a product doesn’t know how much it’s going to cost even after he’s done at the checkout counter?” said Simon Gros, chairman of the Travel Technology Association, which represents the global distribution services and online travel industries. 

The harder airlines make it for consumers to compare, “the greater opportunity you have to get to higher prices,” said Kevin Mitchell, chairman of the Business Travel Coalition, whose members include corporate travel managers. 

Now the Obama administration is wading into the issue. The Department of Transportation is considering whether to require airlines to provide fee information to everyone with whom they have agreements to sell their tickets. A decision originally scheduled for next month has been postponed to May, as regulators struggle with a deluge of information from airlines opposed to regulating fee information, and from the travel industry and consumer groups that support such a requirement. 
More unnecessary government regulations. QB
Meanwhile, Spirit Airlines, Allegiant Air and Southwest Airlines — with backing from industry trade associations — are asking the Supreme Court to reverse an appeals court ruling forcing them to include taxes in their advertised fares. The appeals court upheld a Transportation Department rule that went in effect nearly a year ago that ended airlines’ leeway to advertise a base airfare and show the taxes separately, often in smaller print. Airlines say the regulations violate their free-speech rights. 

At the heart of the debate is a desire by airlines to move to a new marketing model in which customers don’t buy tickets based on price alone. Instead, following the well-worn path of other consumer companies, airlines want to mine personal data about customers in order to sell them tailored services. You like to sit on the aisle and to ski, so how would you like to fly to Aspen with an aisle seat and a movie, no extra baggage charge for your skis, and have a hotel room and a pair of lift tickets waiting for you, all for one price? You’re a frequent business traveler. How about priority boarding, extra legroom, Internet access and a rental car when you arrive?
Now that is what I am talking about!

“Technology is changing rapidly. We are going to be part of the change,” said Sharon Pinkerton, vice president of Airlines for America, which represents most U.S. carriers. “We want to be able to offer our customers a product that’s useful to them, that’s customized to meet their needs, and we don’t think (the Transportation Department) needs to step in.” I agree.
http://www.telegram.com/article/20121230/NEWS/112309994/1002/business

Weekly Jobless Claims Rise More Than Expected

To contact us Click HERE

The number of Americans filing new claims for unemployment aid rose last week, putting them back at the lower end of their pre-storm range and suggesting job growth remains moderate.Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 361,000, the Labor Department said on Thursday. The prior week's figure was revised to show 1,000 more applications than previously reported.
Claims have now unwound the Superstorm Sandy surge. They rose as high as 451,000 in the aftermath of the late October storm, which struck the East Coast. Economists polled by Reuters had forecast claims rising to 357,000 last week.
The four-week moving average for new claims, a better measure of labor market trends, fell 13,750 to 367,750, the lowest since late October. The data covered the survey period for December nonfarm payrolls.
Job gains so far this year have averaged 151,000 per month, a pattern that is likely to hold through December amid fears the U.S. Congress and the Obama administration could fail to agree on a deal to prevent tighter fiscal policy next year.
About $600 billion in government spending cuts and higher taxes could be pulled out of the economy in early 2013, and tip it back into recession unless an agreement is reached on a less punitive plan to reduce budget deficits.
A Labor Department official said there were no special factors influencing week's claims data.The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 12,000 to 3.23 million in the week ended Dec. 8.

Read more: http://www.foxbusiness.com/economy/2012/12/20/jobless-claims-november/#ixzz2FeT7W0Yt

The Magic Number for Obama and Boehner: $550,000

By Margaret Carlson Dec 20, 2012 3:07 PM ET
I try not to write anything with too many numbers in it, but I am making an exception for Cliffmas. Here is my prediction: The final cutoff for increased taxes will be $550,000, give or take $25,000.I derive this number not necessarily from reading op-eds, proposals and white papers offered by the likes of Warren Buffett, the Committee for a Responsible Federal Budget and the Tax Policy Center. More to the point, I have been listening to the musings of legislators and reporters, sober and not so sober, at holiday cocktail parties.President Barack Obama has offered to raise taxes only on those earning more than $400,000, up from his initial offer of $250,000. House Speaker John Boehner needs today's vote to happen to so he can get to a number below his caucus's drop-dead number of $1 million. For that it helps to have a daylong stalemate and a vote -- it keeps his members occupied while negotiations (which they are shut out of) proceed quietly. They get to flaunt their majority by passing a bill, even one sure to be vetoed. Even Democrats play into the script by crying what a waste of time the vote is.A waste of time? That's just another day at the office for Boehner. A speaker has to have what a speaker has to have, if he's to be re-elected by his fractious caucus in the new Congress.Once Boehner has given them their roll call and his members have something with their name on it to take home to their districts, the House will be a sad place, reminded again how little power it actually has in this skirmish with Obama. Members will also be reminded by another day of poll numbers that they will be blamed more than Democrats if we go over the fiscal cliff.Now if I were king, I would stick with $250,000 as the cutoff above which taxpayers pay more. The poor have suffered enough in this recession, and the rich have come out of it sooner and richer than anyone else. Obama's concession is already a reminder of how much he doesn't like to go even near the edge of any cliff. It may be good statesmanship, but it's bad drama. He still has the stronger hand: Let the Bush tax cuts expire, come back with a middle-class tax cut and dare Republicans to vote against it.So today's Plan B vote is a blip on the way to Plan C. After today, Boehner will be freer to negotiate with Obama, but he will still give more than he gets. If you average the Republicans' number and Obama's -- $1 million and $400,000 -- you get $700,000. So with a final number of $550,000, Boehner comes out $150,000 behind.http://www.bloomberg.com/news/2012-12-20/the-magic-number-for-obama-and-boehner-550-000.html

Let Justice Be Done, Though a Huge Bank Falls

By Jonathan Weil Dec 20, 2012 6:46 PM ET
The U.S. Justice Department is getting the kind of glowing publicity it craves out of its $1.5 billion criminal settlement with the Swiss bank UBS AG. (UBSN) "Leniency Denied, UBS Unit Admits Guilt in Rate Case," the New York Times said in a headline.The reality is UBS's punishment was anything but strict.

About Jonathan Weil»

Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best ...MOREFOLLOW ON TWITTER

More from Jonathan Weil:

• Morgan Stanley’s Farcical Facebook SettlementQ
• Dr. Evil Would Love Morgan Stanley Facebook SettlementQ
• Other House of Morgan Spawns a Web of ScandalsQ

In February 2009, UBS -- the parent company, not a mere subsidiary -- entered into a deferred-prosecution agreement with the Justice Department in which the company admitted to helping U.S. taxpayers hide overseas bank accounts from the Internal Revenue Service.UBS promised to "comply with United States federal criminal laws" as part of that agreement. The government, in exchange, promised to dismiss all charges against UBS after 18 months, as long as UBS fulfilled its obligations under the deal. In October 2010, the complaint against UBS was dismissed with prejudice, meaning it couldn't be refiled later.Now consider this: UBS was committing federal crimes during the 18-month period when that deferred-prosecution agreement was in effect, according to documents released by the Justice Department this week. Two former UBS traders were charged with conspiracy to commit wire fraud in a criminal complaint unsealed this week. The government accused the pair of boosting profits by manipulating interest ratesin a scheme that ran from September 2006 through June 2010.UBS's Japanese affiliate was required to plead guilty to wire fraud as part of the deal with the government. That's not anywhere near as damaging as a criminal charge against the UBS parent company, which entered into a nonprosecution agreement with the Justice Department. That agreement, too, said the scheme continued well into 2009 and 2010.It's unclear when the government became aware of UBS's Libor manipulations. UBS first disclosed in March 2011 that it had received subpoenas from U.S. authorities investigating Libor-rigging; the disclosure was contained in UBS's 2010 annual report and didn't say when the company had received the subpoenas.http://www.bloomberg.com/news/2012-12-20/let-justice-be-done-though-a-huge-bank-falls.html

Obama and family fly to Hawaii for Christmas

To contact us Click HERE

WASHINGTON (AP) — President Barack Obama and his family are spending the Christmas holidays in Hawaii, where the president was born and raised.The first family left Washington aboard Air Force One on Friday night. They are to arrive in Honolulu early Saturday.White House officials say the president's vacation itinerary doesn't include any scheduled public events.No return date has been given by the White House. Obama himself said earlier Friday that, since a deal hasn't been reached to avert the so-called "fiscal cliff," he would be returning to Washington after Christmas. The president told reporters: "I'll see you next week."Obama and his family traditionally spend the end-of-year holidays in Hawaii.And how much does that cost the American Taxpayer? The man has no respect for the US taxpayer's money. QB

News Corp says publishing wing lost money

My heart bleeds for Lord VoldeMurdock and his newseaters. QB
(Reuters) - Rupert Murdoch's News Corp said the publishing arm it plans to spin off from its entertainment assets would have lost $2.08 billion in the last fiscal year if it were a standalone company.

News Corp filed with the U.S. Securities and Exchange Commission on Friday to separate its publishing and entertainment assets into two publicly traded companies. News Corp first announced the decision in June after shareholders pressed it to get rid of its troubled newspaper business.

"New News Corp," as the company dubs its publishing wing, will include newspapers, information marketing services, digital real estate, book publishing, digital education, and sports programming and pay-TV distribution in Australia, the company said on Friday.

News Corp's film and television businesses currently include the 20th Century Fox film studio, Fox broadcasting network and Fox News channel, which will be part of the renamed parent company that will be called Fox Group.

News Corp's stock fell 1.5 percent to $25.04 in morning trading on Friday.http://www.chicagotribune.com/business/sns-rt-us-newscorp-splitbre8bk0hr-20121221,0,7790849.story

Boehner Says Republicans Didn’t Want Tax Increase

Of course they didn't. They all signed the Norquist pledge. QB
House Speaker John Boehner said some members of the Republican caucus refused to back his tax measure because they didn’t want to be accused of raising taxes. (Again the Norquist Pledge as they'd rather go off the cliff)
Boehner spoke to reporters in Washington a day after he scrapped a plan to allow higher tax rates on annual income above $1 million, throwing already-stalled budget talks into turmoil.It was “not the outcome I wanted, but it was the will of the House,” Boehner said. “They were dealing with the perception that someone might accuse them of raising taxes.”Until Dec. 17, President Barack Obama and Boehner had been edging closer to a deal that would have included $1 trillion each in tax increases and spending cuts.Now that Boehner has pulled his plan, House members and senators won’t vote on the end-of-year budget issues until after Christmas. That will give them less than a week to reach agreement to avert more than $600 billion in tax increases and spending cuts set to take effect in January.The speaker said he pushed his alternative tax plan in the House to “basically jump start and try to kick into gear some action by the Senate to avert these tax increases going into effect Jan. 1.”Boehner said he and Obama had traded “bottom line” offers on spending cuts and taxes. He urged the Senate to take up legislation the House passed Aug. 1 that would extend the current rates on all taxpayers.http://www.bloomberg.com/news/2012-12-21/boehner-republicans-didn-t-want-to-appear-to-raise-taxes.html

2013 Is Bernanke's Year: Unlimited QE And Total Control Of The Fed

To contact us Click HERE

Bernanke and several of his central bank colleagues around the world have unleashed a new era of monetary policy, marked by zero-bound nominal interest rates coupled with unprecedented and massive balance sheet expansion. In this post-financial crisis world, the Fed has taken a Keynesian edict and turned it on its head: instead of the government stepping in after a crisis to make up for the loss of aggregate demand from the private sector, it has fallen to central banks.

Through that process, the Federal Reserve has become the most important market participant, flooding markets with liquidity and owning more than a third of the Treasury market by the end of next year, according to Barclays’ economics team. The latest iteration of their asset purchases, or QE4, consists of $40 billion a month in RMBS purchases and $45 billion in unsterilized Treasury purchases, meaning the Fed’s balance sheet will grow at a rate of $85 billion until the Fed sees a substantial improvement in labor markets.

The Fed is set to turn even more bullish in 2013, as its natural rotation sees two centrists and Jeffery Lacker, head of the Richmond Fed and a lone dissenter in the FOMC, replaced. In their place will come Esther George of the Kansas City Fed (a moderate hawk, which means she’s mildly opposed to more accommodation) and James Bullard of the St. Louis Fed (who has the potential to be a dissenter, according to Barclays), along with ultra-doves Charles Evans and Eric Rosengren. Furthermore, Minneapolis Fed chief Narayana Kocherlakota, a former dissenter, has quietly moved to a more dovish stance, adding further support for the Chairman.

One can’t blame Bernanke for trying to spark growth in an economy that has struggled to get off the ground since the 2008 financial implosion. A divided government has created artificial threats like the fiscal cliff, while the fear of fiscal unsustainability has increased calls for austerity. After interest rates fell to zero, Bernanke and the FOMC pushed down longer-term rates through asset purchases. Flattening the yield curve, the Fed has sought to ease credit conditions. The intention is to help homeowners re-finance mortgages at lower rates, allow consumers cheaper financing to buy cars, and give firms favorable borrowing rates.

Bernanke’s low rates have effectively “helped housing and the auto industry,” according to Raymond James’ chief economist Scott Brown. Automakers like General Motors and Ford have seen sales recover, while homebuilders like KB Home and Lennar have been on a tear this year. But the Fed’s ultra-accommodative stance has been “a mixed bag for banks.” Major names like JPMorgan Chase and Wells Fargo have access to cheap money, but their lending margins end up being squeezed by a narrower spread between long- and short-term rates.

Detractors of the Fed have argued it has distorted market action. And indeed it has, interest rates have been at record lows for years, with yields on 10-year Treasuries hovering near all-time lows. The issue of the Fed’s exit strategy has been raised on several occasions, as observers note a balance sheet approximating $4 trillion (if asset purchases continue through all of 2013) has to be unwound at some point. Goldman Sachs’ research team estimates that economic growth will pick up in the second half of 2013, sparking a “gradual but steady rise in bond yields” that takes real rates on 10-year Treasuries to 2.2% by the end of 2016 and 3.75% by 2016.

http://www.forbes.com/sites/afontevecchia/2012/12/20/2013-is-bernankes-year-unlimited
-qe-and-total-control-of-the-fed/

Obamacare Tax Hikes May Just Be Getting Started

To contact us Click HERE

New taxes are coming Jan. 1 to help finance President Barack Obama's health care overhaul. Most people may not notice.But they will pay attention if Congress decides to start taxing employer-sponsored health insurance, one option in play if lawmakers can ever agree on a budget deal to reduce federal deficits.The tax hikes already on the books, taking effect in 2013, fall mainly on people who make lots of money and on the health care industry. But about half of Americans benefit from the tax-free status of employer health insurance.Workers pay no income or payroll taxes on what their employer contributes for health insurance, and in most cases on their own share of premiums as well.It's the single biggest tax break the government allows, outstripping the mortgage interest deduction, the deduction for charitable giving and other better-known benefits.If the value of job-based health insurance were taxed like regular income, it would raise nearly $150 billion in 2013, according to congressional estimates. By comparison, wiping away the mortgage interest deduction would bring in only about $90 billion."If you are looking to raise revenue to pay for tax reform, that is the biggest pot of money of all," said Martin Sullivan, chief economist with Tax Analysts, a nonpartisan publisher of tax information.It's hard to see how lawmakers can avoid touching health insurance if they want to eliminate loopholes and curtail deductions so as to raise revenue and lower tax rates.Congress probably wouldn't do away with the health care tax break, but limit it in some form. Such limits could be keyed to the cost of a particular health insurance plan, the income level of taxpayers or a combination.Many economists think some kind of limit would be a good thing because it would force consumers to watch costs, and that could help keep health care spending in check.Obama's health law took a tentative step toward limits by imposing a tax on high-value health insurance plans. But that doesn't start until 2018.Next spring will be three years since Congress passed the health care overhaul but, because of a long phase-in, many of the taxes to finance the plan are only now coming into effect.http://www.cnbc.com/id/100338999

Bullish Wagers Drop to Six-Month Low on U.S. Budget: Commodities

Investors cut bullish commodity bets to the lowest in almost six months as U.S. budget talks stalled, increasing concern that lawmakers’ failure to reach an agreement with push the world’s biggest economy back into a recession.Enlarge imageInvestors turned bearish on wheat for the first time since June 19 as wet weather improved the condition of the U.S. winter crop. Photographer: Simon Dawson/BloombergHedge funds and money managers reduced net-long positions across 18 U.S. futures and options by 5.6 percent to 758,256contracts in the week ended Dec. 18, the lowest since June 26, U.S. Commodity Futures Trading Commission data show. Gold holdings dropped to the lowest since August, while those for silver tumbled 14 percent, the most since July 24. Traders turned bearish on wheat for the first time in six months.House Republican leaders scrapped a plan to allow higher taxes on Dec. 21. Lawmakers won’t vote until after tomorrow’s Christmas holiday on ending the showdown over $600 billion of automatic tax increases and spending cuts scheduled to start in January. U.S. consumer confidence fell to a five-month in December as Americans grow more concerned about the possibility of higher taxes, figures showed the same day.“What you have is a re-pricing of risk on concerns of no resolution to the fiscal cliff,” said Jeffrey Sherman, who helps manage more than $50 billion of assets for DoubleLine Capital in Los Angeles. “By going over the cliff, for the consumer, you have less money in the system and therefore less economic growth.”

Prices Drop

The Standard & Poor’s GSCI Index of 24 commodities dropped 1.8 percent this month. The MSCI All-Country World Index of equities added 2 percent, and the dollar slid 0.6 percent against a basket of six trading partners. Treasuries lost 0.6 percent, a Bank of America Corp. index shows.The Thomson Reuters/University of Michigan U.S. consumer sentiment index fell to 72.9 in December, the weakest since July. Economists in a Bloomberg survey projected a final reading of 75. Congress won’t reach a deal this year on a budget plan, Representative Kevin Brady, a Texas Republican, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt.” The Congressional Budget Office says failing to avert the fiscal cliff may cause a recession in 2013.The index of U.S. leading indicators fell in November, pointing to a slowdown in the economy early next year, data from the Conference Board showed Dec. 20. The Federal Reservelowered its outlook for growth next year to 2.3 percent to 3 percent on Dec. 12, and ChairmanBen S. Bernanke warned that the central bank “doesn’t have the tools” to counter the risks to the economy should Congress not reach a budget deal.http://www.bloomberg.com/news/2012-12-23/bullish-wagers-drop-to-six-month-low-on-u-s-budget-commodities.html

Americans Miss $200 Billion Abandoning Stocks

I don't feel like I missed a thing. QB
Americans have missed out on almost $200 billion of stock gains as they drained money from the market in the past four years, haunted by the financial crisis.Assets in equity mutual, exchange-traded and closed-end funds increased about 85 percent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor’s 500 Index’s 94 percent advance, according to data compiled by Bloomberg and Morningstar Inc. The proportion of retirement funds in stocks fell about 0.5 percentage point, compared with an average rise of 8.2 percentage points in rallies since 1990.Enlarge imageAssets in equity mutual, exchange-traded and closed-end funds increased about 85 percent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor’s 500 Index’s 94 percent advance. Photographer: Tim Boyle/BloombergThe retreat shows that even the biggest gain since 1998 failed to heal investor confidence after the financial collapse thatwiped out $11 trillion in U.S. equity value was followed by record price swings in equities, a market breakdown that briefly erased $862 billion in share value and the slowest recovery from a recession since World War II. Individuals are withdrawing money as political leaders struggle to avert budget cuts that threaten to throw the economy into a new slump.“Our biggest liability in the stock market has been the total destruction to confidence,” James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. “There’s just so much evidence of this recovery broadening.”

Weekly Gain

The S&P 500 climbed 1.2 percent to 1,430.15 last week, extending the 2012 gain to 14 percent, led by financial stocks and consumer companies. The benchmark index from American equity has risen from a low of 676.53 on March 9, 2009, though it is still 8.8 percent below its record high on Oct. 9, 2007. The gauge dropped 0.2 percent to 1,426.66 in New York today.Now, much of the damage to investors is self-inflicted as U.S. growth improves and companies whose earnings are most tied to economic expansion reap the biggest rewards. Of the 500 companies in the benchmark index, 481 are higher now than they were in March 2009 or when they entered the gauge.http://www.bloomberg.com/news/2012-12-24/americans-miss-200-billion-abandoning-stocks.html

U.S. Stocks Fall on Budget Impasse as Confidence Drops

To contact us Click HERE
Someone forgot to tell them if we missed a bull market, it's supposed to go up. The only upside I see to the market is printed dollars given to the banks who inflated the market by gambling. Nothing can justify AAPL at the price it is at. Apple has done more to hurt the economy by shipping manufacturing to China than it has to help. Still everyone wants an iPad or iPhone. What do the banks have to lose if they can always go back to the FRB for more funny money? QB

U.S. stocks fell, adding to a three- day drop for the Standard & Poor’s 500 Index, amid an impasse on federal budget talks and as consumer confidence declined more than forecast.


Marvell Technology Group Ltd. fell 2.6 percent after being downgraded by JMP Securities LLC. BCD Semiconductor Manufacturing Ltd. (BCDS) almost doubled after Diodes Inc. agreed to buy the company for $151 million.The S&P 500 dropped 0.7 percent to 1,410.14 at 10:31 a.m. in New York. The Dow Jones Industrial Average lost 83.34 points, or 0.6 percent, to 13,031.25 today. Trading in S&P 500 companies was 25 percent below the 30-day average at this time of day.“The markets remain held hostage to the perceived negotiations in Washington regarding the fiscal cliff,” Jim Russell, the Cincinnati-based chief equity strategist at U.S. Bank Wealth Management, which oversees about $113 billion, said in a telephone interview. “It’s our take that there are talks going on and that they’re substantive but time is growing short.”Stocks extended losses as Senate Majority Leader Harry Reidsaid “nothing’s happening” in budget talks in Washington and it looks like the nation is heading for the so-called fiscal cliff.The S&P 500 has slipped 1 percent this week as talks between President Barack Obama and Congressional lawmakers dragged on beyond the Christmas holiday. The gauge has still rallied 13 percent this year, its largest annual gain since 2009.

Interim Deal

Obama is pushing U.S. lawmakers to agree on an interim deal to avert more than $600 billion of automatic tax increases and spending cuts, known as the fiscal cliff, that will otherwise come into effect next month. Republican House leaders will hold a conference with party members today to discuss the next steps in budget negotiations, according to an aide who asked for anonymity to discuss the issue.Treasury Secretary Timothy Geithner wrote in a letter to Congress yesterday that the federal debt limit will be reached on Dec. 31 and his department will begin using “extraordinary measures” to finance $200 billion in deficits in early 2013.Equities fell after data showed confidence among U.S. consumers declined more than forecast in December as the budget debate in Washington soured Americans’ outlook for the economy. The Conference Board’s index of sentiment fell to 65.1 from a revised 71.5 reading the prior month, figures from the New York- based private research group showed today. The gauge was projected to fall to 70, according to the Bloomberg survey median.

Home Sales

http://www.bloomberg.com/news/2012-12-27/u-s-stock-futures-are-little-changed-amid-budget-talks.html

U.S. Schoolchildren Lag Asian Peers on Academic Tests

To contact us Click HERE


U.S. schoolchildren trailed Asian peers on one of the largest international tests of math, science and reading, highlighting a challenge to American competiveness.Eight countries or regions including South Korea, Singapore and Hong Kong outscored the U.S. in eighth-grade math, while nine did in science, according to the 2011 test, called Trends in International Mathematics and Science Study. On a reading exam, the U.S. lagged behind five. Some U.S. states such as Florida and Massachusetts bucked the trend, shining in some subjects.http://www.bloomberg.com/news/2012-12-11/u-s-schoolchildren-lag-asian-peers-on-academic-tests.html

Asia 'to eclipse' US and Europe by 2030 - US report

Asia will wield more global power than the US and Europe combined by 2030, a forecast from the US intelligence community has found.

Within two decades China will overtake the US as the world's largest economy, the report adds.

It also warns of slower growth and falling living standards in advanced nations with ageing populations.

Global Trends 2030, issued to coincide with Mr Obama's second term, says it aims to promote strategic thinking.

Published every four years, the report from the National Intelligence Council (NIC) aims to draw together a wide sweep of "megatrends" driving transformation in the world.
Slow relative declinehttp://www.bbc.co.uk/news/world-us-canada-20671917

China's Steve Jobs and the $4b fairytale

China's Xiaomi Technology is a fairytale for nerdy entrepreneurs.Less than three years after its founding, the smartphone maker is valued at $US4 billion and evokes Apple-like adoration from its fans, some of whom are desperate enough to skip work for a shot at buying the latest product the day it goes on sale.

China's media say I am China's Steve Jobs, 

Founder Lei Jun dresses like the late Steve Jobs, in jeans and a black top. He has created a fervent fan base for Xiaomi's moderately priced high-end smartphones by mimicking Apple's marketing tactic of attaching an aura of exclusivity around its products.

Read more: http://www.watoday.com.au/technology/technology-news/chinas-steve-jobs-and-the-4b-fairytale-20121210-2b49n.html#ixzz2EoJBqVPO

AIG Offers to Sell as Much as $6.5 Billion of AIA Shares

To contact us Click HERE

American International Group Inc. (AIG), the insurer that repaid a U.S. bailout, plans to sell all of its shares in AIA Group Ltd. (1299) for as much as HK$50.6 billion ($6.5 billion) in the third offering this year.AIG, based in New York, is selling about 1.65 billion shares in Hong Kong-headquartered AIA at HK$29.65 to HK$30.65 each, according to a term sheet obtained by Bloomberg News. AIG holds a remaining 13.7 percent stake in AIA, according to data compiled by Bloomberg.AIG Chief Executive Officer Robert Benmosche is focusing on U.S. life insurance and global property-casualty coverage after divesting units to help repay a government bailout that swelled to $182.3 billion. The New York-based insurer sold about $8 billion of AIA shares in March and September, following a 2010 initial offering that reduced AIG’s stake to 33 percent.“We’re looking for the right time and the right price to monetize our ownership of AIA,” Benmosche said on an Aug. 3 conference call with analysts. “We have a very good performing company out there.”AIA, which announced that AIG has started to sell “a significant proportion” of the remaining 13.7 percent stake in a statement to the Hong Kong stock exchange today, didn’t reveal the exact number of shares on sale. Trading of Hong Kong-based AIA is suspended from 9 a.m. local time today.http://www.bloomberg.com/news/2012-12-17/aig-offers-to-sell-as-much-as-6-5-billion-of-aia-shares.html

Apple’s Problem? The Law of Large Numbers

From The Big PictureApple’s brutal downdraft continues, down over $20 on the day as I write this (BR: closed 509.79 off -19.90‎. or -3.76%‎).What’s the problem? Lack of lines for the iPhone5 in China? Maybe today’s catalyst.We think, however, the market is coming to the conclusion the company has a scale problem. That is, it is just too darn large.We posted earlier in the week about the relative size of Apple’s earnings. In the last four quarters, for example, Apple’s earnings totaled $41.7 billion, which was 21 percent more than the combined earnings of Microsoft, eBay, Google, Yahoo, Facebook, and Amazon!For even more perspective take a look at the chart below. Apple’s average revenue estimate for next fiscal year is $222 billion, which, would rank as the 47th largest GDP out of the 186 countries monitored by the IMF.Thus, with relatively little reoccurring revenue, Apple has to wake up on the first day of every fiscal year and generate annual sales of iPhones, iPads, and iMacs equivalent to Ireland’s GDP or a combined Hungary and Morocco. That’s a big nut.This is a problem probably very few companies experience.Is growth still possible? No doubt. And if any company can do it, it’s Apple. But the growth rate is starting to run up against a hard wall of the law of large numbers, or, at least, the perception that it is. Maybe this why the stock looked so cheap in terms of its PE during the last few years of extraordinary growthhttp://www.ritholtz.com/blog/

Chance Of Going Over The Cliff Now At Least 75%

14 dec 2012posted by stan collenderWith 17 days as the crow flies before it happens, it's time for me to do something I've been resisting for a week or so: formally increase my odds that we'll go over rather than avoid the fiscal cliff.Back in September I said it was better than 50-50 that no deal would be in place by January 1. I raised that to 60 percent immediately after the election. Today, I'm raising my predicted likelihood of no deal before January 1 to 75 percent, and I may still be overstating the possibility that an agreement will be reached and put in place before the tax cuts and spending increases go into effect.I really hope I'm wrong, and will gladly and publicly say that if a last-minute deal materializes. But here's why I don't think I am:1. The Politics Have Become Worse, Not Better. The House GOP is digging in its heals even further in spite of the fact that the polls all show public opinion -- including among Republicans -- being firmly against it. Meanwhile, the White House, no doubt strongly encouraged by the president's high job approval rating and the polls showing that it's position on taxes is very popular, apparently -- and understandably -- sees no reason to compromise.2. The GOP Has Little To Lose At This Point By Letting The Cliff Happen. With their polling numbers already in the tank, it's hard to see what Republicans will gain politically by voting to increase taxes in incomes above $250,000 a year other than the lasting enmity of the most anti-tax members of their base and Grover Norquist.3. Boehner Really Can't Cut A Deal With The White House Before January 3. My  prediction that this would happen was scoffed at by some when I made it months ago, but it's now become a mainstream story. The fiscal cliff hits January 1 and  Boehner's formal election as speaker is January 3. Any deal with the White House and especially a deal that includes the tax increases the White House wants, could cause Boehner to lose enough votes at least on the first ballot on January 3 to prevent him from being speaker. Even if he subsequently wins on a later ballot, he will be seriously weakened. Note: The fact that Boehner has been openly asked this week if he's concerned about being reelected is a sign that the possibility has become more real than anyone but me previously was willing to consider.http://capitalgainsandgames.com/blog/stan-collender/2684/chance-going-over-cliff-now-least-75

Massachusetts Fines Morgan Stanley Over Facebook I.P.O.

To contact us Click HERE

Morgan Stanley is paying for its role in the troubled stock market debut of Facebook.On Monday, Massachusetts’s top financial authority fined the bank $5 million for violating securities laws, the first major regulatory action tied to Facebook’s initial public stock offering.William F. Galvin, the secretary of the commonwealth of Massachusetts, accused the bank of improperly influencing the stock offering process. The regulator’s consent order asserts that a senior Morgan Stanley banker coached Facebook on how to share information with stock analysts who cover the social media company, a potential violation of a landmark legal settlement with Wall Street. While the banker never contacted the analysts directly, his actions, Mr. Galvin said, put ordinary investors at a disadvantage because they lacked access to the same research.http://dealbook.nytimes.com/2012/12/17/massachusetts-fines-morgan-stanley-over-facebook-i-p-o/And more criminal actions. These don't seem to be the exception. It is ingrained in the financial industry. QB

2 Former Hedge Fund Managers Found Guilty in Insider Trading Case

Two former hedge fund managers were found guilty on Monday of fraud and conspiracy, the latest convictions in the government’s campaign to eliminate illegal conduct on Wall Street trading floors.After two full days of deliberations, a jury convicted Anthony Chiasson, a co-founder of Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management. The two had denied charges that they participated in a conspiracy that made more than $70 million illegally trading technology stocks.Level Global and Diamondback were founded by former employees of SAC Capital Advisors, the $14 billion hedge fund run by Steven A. Cohen that has become a focus of the government’s insider trading inquiry. Mr. Cohen has not been accused of any wrongdoing, and his spokesman has said that Mr. Cohen acted appropriately.“With today’s guilty verdicts, Todd Newman and Anthony Chiasson join the ranks of high-level investment fund managers who are being made to answer for their extraordinarily bad risk-reward analysis about what is right and what is wrong,” Preet Bharara, the United States attorney in Manhattan, said in a statement.Both Mr. Chiasson and Mr. Newman sat stone-faced as the jury foreman announced the guilty verdict. After it was read, Mr. Newman slouched in his chair; Mr. Chiasson stared blankly. Judge Richard J. Sullivan, the judge presiding over the case, set sentencing for April 19. Until then, they are free on bail.Free on bail are you kidding me? They will be in the Grand Caymens before they are sentenced. QBhttp://dealbook.nytimes.com/2012/12/17/2-former-hedge-fund-managers-found-guilty-in-insider-trading-case/

UBS Fined $1.5 Billion by Regulators for Rigging Libor

To contact us Click HERE
And the hits keep coming. I think a Seal team should be dispatched to these banks and take out the head office. Think of it as protecting Americans from terrorists. Financial ones. QB


UBS Settles Libor Probe for 1.4B Swiss FrancsUBS AG (UBSN), Switzerland’s biggest bank, must pay about 1.4 billion Swiss francs ($1.5 billion) to U.S., U.K. and Swiss regulators for trying to rig global interest rates, triple the penalties levied against Barclays Plc. (BARC)Enlarge imageA UBS AG logo sits on the wall of the company's Finsbury Avenue offices in London. Photographer: Jason Alden/BloombergEnlarge imageUBS said today it expects to report a fourth-quarter loss of between 2 billion francs and 2.5 billion francs, primarily as a result of litigation provisions and regulatory matters. Photographer: Gianluca Colla/BloombergEnlarge imageUBS Chief Executive Officer Sergio Ermotti said, “We want to move forward and I think we’re showing our determination in the bank to move forward and to change the bank for good. It’s important to recognize mistakes like we do today." Photographer: Gianluca Colla/BloombergFines from the U.S. Commodity Futures Trading Commission and the U.S. Department of Justice total $1.2 billion, UBS said in a statement today. It will pay 160 million pounds ($260 million) to the U.K. Financial Services Authority, the largest- ever fine imposed by the regulator, and disgorge 59 million francs in estimated profits to the Swiss Financial Market Supervisory Authority.“Clearly, this chapter isn’t positive,” UBS Chief Executive Officer Sergio Ermotti told reporters on a conference call. “We want to move forward and I think we’re showing our determination in the bank to move forward and to change the bank for good.”About 30 to 40 people have left UBS as a result of the probes, Ermotti said, adding that the behavior of certain employees was “unacceptable.” He said he doesn’t expect any more departures.UBS rose 0.4 percent to 15.31 francs by 9:25 a.m. in Swiss trading. The stock has advanced 37 percent in 2012, outpacing a 23 percent increase in the Bloomberg Europe Banks and Financial Services Index, which tracks 38 companies.

2,000 Requests

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. Barclays, the U.K.’s second-biggest bank, agreed to pay 290 million pounds in June to resolve the U.S. and U.K. Libor probes.The U.K. finance regulator found more than 2,000 documented requests by UBS traders to manipulate rates in chat messages and group emails, and that at least 45 people at the bank knew of the practice between over a six-year period until the end of 2010. Bank employees colluded with interdealer brokers and paid them bribes to help manipulate yen Libor submissions by other banks, the FSA said in a statement.“This is quite outrageous,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets with a reduce rating on UBS. “I was surprised that UBS was apparently one of the biggest instigators of this scandal.”

Influencing Submissions

http://www.bloomberg.com/news/2012-12-19/ubs-fined-1-4-billion-swiss-francs-for-manipulating-libor-rate.html

Banks See Biggest Returns Since ’03 as Employees Suffer

For employees at the biggest Wall Street banks, 2012 brought a humbling post-crisis reality of job cuts, lower pay and tarnished reputations. For investors, it was a happier story.Enlarge imageA trader walks past a row of telephones on the floor of the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/BloombergEnlarge imageBlankfein, 58, who was awarded a record- setting $67.9 million bonus for fiscal 2007, received $12.4 million in compensation for 2011. Photographer: Peter Foley/BloombergMorgan Stanley CEO James Gorman said last month that employees should stop complaining about lower pay. Photogapher: Peter Foley/BloombergThe 81-company Standard & Poor’s 500 Financial Index (S5FINL) is up 27 percent this year, its largest annual increase since 2003, led by a 104 percent gain in Bank of America Corp.The index beat the broader S&P 500 Index for the first time since 2006.Shareholders, impatient for the industry to boost profit, were rewarded as Wall Street firms cut jobs and pay, and exited businesses. The shrinking unnerved employees, who watched the chiefs of two big banks lose their jobs and others contend with a drop in deal making and stock trading, stiffer regulations, trading losses, rating downgrades and scandals involving interest-rate manipulation and money laundering.“There’s always grumbling on Wall Street, which is pathetic given how overpaid we all are, but there is a level of angst this year that is just unprecedented,” Gordon Dean, who left a 26-year career at Morgan Stanley (MS) to co-found a San Francisco boutique advisory firm this year, said in a telephone interview. “It’s just a profound sadness and dissatisfaction.”Shareholders and bondholders who saw compensation costs at the nine largest global investment banks outpace the gain in revenue from 2004 to 2008 are witnessing a shift: Executives are more focused on investors than rainmakers.

Job Cuts

The nine banks -- Deutsche Bank AG (DBK), Barclays (BARC)Plc, JPMorgan Chase & Co. (JPM), Bank of America, Citigroup (C) Inc., UBS (UBSN) AG, Credit Suisse (CSGN) Group AG,Goldman Sachs Group Inc. (GS) and Morgan Stanley -- announced more than 30,000 job cuts in the first nine months of the year, according to data compiled by Bloomberg.Total pay for traders and investment bankers is about half what it was in 2007, according to an October report from Options Group, a New York-based recruitment firm.“Shareholders have become a lot more vocal,” said Benjamin Hesse, who manages five financial-stock funds and leads a team of 15 analysts and fund managers at Boston-based Fidelity Investments, which oversaw $1.7 trillion in assets as of Nov. 30. “Managements are taking more shareholder-friendly steps, and that’s really across the board.”Goldman Sachs cut headcount and raised its dividend in the second quarter, the first time the New York-based bank has done both in the same period. It also named the smallest class of partners since going public in 1999. Morgan Stanley probably will report lower compensation costs in 2012, even as its shares went up, something that hasn’t happened in at least 15 years.

Rewarding Investors

http://www.bloomberg.com/news/2012-12-19/banks-see-biggest-returns-since-03-as-employees-suffer.html

The Big Mac And Your Financial Health

To contact us Click HERE
Sent to me by Mammoth from Seeking Alpha. QB

The Big Mac And Your Financial Health: Rising Burger Prices Show A Worrying Trend

By James Cornehlsen, CFAThe rise in the price of a Big Mac is faster than the official rise in consumer prices and has been since the late 90's. In 1998, the average price of a Big Mac was about $2.50. Today, the average Big Mac is $4.33. If we were using the Consumer Price Index (CPI), the price of a Big Mac today would be about $3.35. See the graph below. The price hikes represented by this popular burger will impact individuals more than the saturated fat content that Big Macs bear.The rise in the price of the Big Mac foreshadows how the printing of money is eroding the financial system's arterial walls. The impact is broad based:

1. Each dollar we own is buying less.
2. For individuals relying on Social Security, the compensation for inflation is not keeping up with the prices people actually pay.
3. The price of bonds should be much lower if interest rates fully accounted for the rise of inflation based on the Big Mac.
4. The official economic growth rate would be lower now if prices were based on the Big Mac Index.

Using the Big Mac Index to Measure InflationThe Economist Newspaper created the Big Mac Index in 1986. The Big Mac Index was created to compare the price of currencies between different countries. The index is based on a theory called purchasing-power parity. This theory looks at the same basket of goods in each country and then adjusts for the interest rate one would pay for a loan or get for a savings account. This adjustment for interest rates makes the price of a Big Mac comparable in each country. The Big Mac index just has one item; however, because it contains beef, dairy (cheese), wheat (bun), cost of labor, and the cost of real estate, I believe it is a good representation of prices in the United States and abroad.Rather than use the Big Mac index for comparing the value of currencies between countries, we wanted to take the price of the Big Mac each year within the US to see how it changes over time. You could also use this approach to look at the trend of prices for other countries as well.By graphing the trend of the Big Mac index each year since 1986, we are shown that prices have accelerated much faster than the official reported Consumer Price Index (CPI) from the Bureau of Labor Statistics. On the BLS's website, CPI is defined as "a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. The basket includes food & beverages, housing, apparel, transportation, medical care, recreation, education & communication, and other goods & services". However, there are two broad concerns with the CPI. First, CPI accounts for the substitution effect whereby if the price of beef increases, it is assumed that fewer people will buy beef and will instead buy chicken. Second, there is a "chained" effect meaning the basket of goods isn't consistent from one time period to the next. The reason for this is that it is believed people change their spending habits as prices change which is why the bureau of Labor Statistics instituted this policy.(click to enlarge)Since 1986, the price of a Big Mac has increased 171% from $1.60 to $4.33 today. During this same time period, the consumer price index has increased at a much lower rate of 109%. More disconcerting is the effect of aggressive adjustment of monetary policy by the Federal Reserve, beginning in 1999. This policy shift started with the Asian crisis and Long Term Capital Management, followed by the Internet bubble, housing bubble, and Great Recession, and now the "New Normal" of zero federal funds rates and quantitative easing. In the context of these Fed policies, the rate of price increases for the Big Mac is almost three times greater than the official Consumer Price index.In 1986, $1 would have purchased over half of a Big Mac. Today you would have to cut the Big Mac into five pieces and only eat one of the five pieces for $1. Consequently, each dollar we have is buying a lot less.He has more to say at this link below with more charts. Thank you Mammoth. QBhttp://seekingalpha.com/article/1071571-the-big-mac-and-your-financial-health-rising-burger-prices-show-a-worrying-trend
This sucks that we the savers and taxpayers are going to lose 10-20 Billion to save GM and how can the gap be so large? I think there should be no bonuses for execs and the money goes back to the government for the shortfall. Although Washington would just waste that in a week. QB

U.S. to sell off its remaining GM shares

Paul Sancya/AP - Treasury says it will unload 500 million shares in the automaker that it held under the industry bailout.

•   Text Size
• Print
• E-mail
• Reprints

By Zachary A. Goldfarb, Updated: Wednesday, December 19, 4:04 PM


The much-debated bailout of Detroit is finally nearing an end after four years — and it looks like the ultimate cost to taxpayers will be between $10 billion and $20 billion.

Having already disposed of its stake in Chrysler, the Treasury Department announced Wednesday that it is now planning to sell its 500 million shares of General Motors stock. The company is buying back 200 million of those shares for $5.5 billion, while the Treasury is developing a plan to sell the rest over the next 12 to 15 months.



If the remaining stock sells at $27.18 a share, GM’s price as of 4 p.m. Wednesday, the government will have sustained a final loss of about $12 billion in its investment in GM. Treasury lost $1.3 billion on Chrysler and still is owed $11.4 billion by Ally Financial, formerly GM’s financing affiliate, to come out even on that investment.

Though the auto bailout is likely to produce a financial loss for the federal government, it was part of a financial rescue that far exceeded expectations. Treasury has recouped 90 percent of the $418 billion it invested in banks, autos and other firms as part of the overall financial bailout.

“The auto industry rescue helped save more than a million jobs during a severe economic crisis, but [the intervention] was always meant to be a temporary, emergency program,” said Timothy G. Massad, Treasury assistant secretary for financial stability, in a statement. “The government should not be in the business of owning stakes in private companies for an indefinite period of time.”

The Treasury’s original total investment in the auto industry was about $80 billion, including $50 billion in GM.

The government’s exit from GM will ultimately free the firm of constraints that executives have said limited how they could run the business. For example, executive compensation caps made it difficult to recruit top business leaders, and the company could not own corporate jets. The compensation restrictions remain for now, but the jet provision has been lifted.

Executives also worried about having a reputation as a federally restricted “Government Motors.”

http://www.washingtonpost.com/business/economy/us-to-sell-off-500-million-remaining-gm-shares/2012/12/19/6dfc345e-49fd-11e2-b6f0-e851e741d196_story.html