Market Biz News

Pay Yourself First: The Savings Account (part 3)

2011-12-30T06:58:00.000-08:00

Pay Yourself First: The Savings Account (part 3)

Savings Account

This is the account that you are shooting for. However, the first thing you MUST do is figure out why you want this account? What is the purpose for this account? The goal should be something large and long term. For example, you can setup a savings account just for the down-payment of a house. Or, you might want to setup a retirement savings account, over and above the other retirement accounts you have.

Savings Account

Personally, I think you should rethink your thinking on buying a house by means of credit. The entire point of this series is to get you to think outside of going into debt for things. If the emergency account says that you cannot purchase anything without paying cash first, and only in the case of emergencies should you use a credit card, how much sense does it make to put a house on credit? It is neither an emergency nor something you can pay off in full at the end of the month.

With a bit of research you can find all sorts of houses in your area that you can buy with cash. Technically, every house can be bought with cash, but not everyone can afford them. Credit is not something you should use on your home. I know this is completely against everything the news and schools teach, but your primary place of residence should never be a place in danger of you losing on a whim.

We have to rethink our way of approaching life, in this economy. We have to recognize that not every commercial is telling us the gospel truth, not every school is teaching us something without being paid to do so, not every business is telling us all the options available. The days of taking out astronomical student loans, housing loans and car loans are over. The banks are fighting tooth and nail for them not to be over, but the end is pretty much written on the wall.

So, what is absolutely best for you? Opening a hard to withdraw from, savings account at your local credit union. This is going to offer you a couple of things:

the discipline to not be able to withdraw from the savings account without penalty, which would wipe out your savings
a credit union is not going to charge you all the fees associated with national banks, which charge you fees for regular bank transactions like checking your balance.

You want to also setup some personal rules for the savings account:

never withdraw from this account until it is due [whatever you were saving for]
setup automatic deposits to this account as if this were an expense

The second rule is the one that most people have a hard time gasping and understanding. First of all, they will have a cell phone or buy coffee regularly, to the tune of $200 / month, but will swear up and down that they cannot save that much each month. For most, spending $3 for a coffee is nothing, but they can't seem to do simple math to realize that it adds up to hundreds of dollars a month.

Happy Piggy Bank

I pick on coffee, because it truly is something noone needs and in most cases is unhealthy for you. It is, after all, medication and not just a beverage.

You can reduce your cell phone use and plan, and put the difference in your savings. You can stop buying coffee altogether, and put the difference in your savings. You can stop buying music altogether and put the difference in your savings. You can sell your 2nd and 3rd car and put all the expenses you were paying for them into your savings.

Setting aside money in this economy necessitates creativity. Most people do not realize that we are in a full fledged depression. If the government ever admitted that, everyone would be demanding they do more for the people, and less for big businesses.

With the realization that we are in a full fledged depression we need to tighten our spending as if we are in an economic depression. That may mean:

moving back home with parents and splitting housing costs
taking in border / renters
doing extra side jobs
cancelling cell phones and getting a house phone only
reducing cell phone plans to emergency plans with only 300 minutes a month [you can shoot the breeze face to face for free]
ask your job if you can work from home [instead of commuting or having to buy work clothes every few months]
learn about taxes to the point that you're an expert on it and take every possible deduction
learn about accounting to the point that you are an expert
eat nutritious meals that a simple and low cost [eating luxury items like pizza should be completely stopped immediately]
selling all your extra cars except 1 family car [this saves on insurance, payments, upkeep, extra gas payments]
car pooling to work
doing without lots of entertainment [entertainment expenses should realistically be done away with, start considering checking out books and reading them from the library as entertainment, it's free][if renting a movie weekly and paying your house note is a debate you have to have, then you are done for anyway]

Coming to the realization that millions of middle-class americans have slipped below the poverty line in the past 3 years, since Obama took office, means that looking out for your own expenses should be taken as seriously as if your life were threatened.

What is worse, is that upper-class americans have slipped into poverty because of their expenditures and being over their head in debt. You might try and say that it could not happen to you, but the facts are there, people making upwards of $500,000 a year have slipped into poverty. It sounds impossible, but it is a glaring fact.

This is serious. This is your life.

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Pay Yourself First: Emergency Account (part 2)

2011-12-30T06:21:00.000-08:00

Pay Yourself First: Emergency Account (part 2)

Emergency Account

To completely avoid the two laws of financial nature, you have to create a buffer zone that is designed to save money, but you don't feel guilty touching. However, that being said, you cannot, and will not dip into this account frivolously.

Emergency Savings Account

Laws of the Emergency Account

You need to setup some rules, specific to the Emergency Account -

the only time you can withdraw money from this account is when it is an emergency
the only time something is an emergency, is if you are charged a fee by a government official ( ambulance; police; IRS; towed vehicle )
any and all credit card charges are to be paid off immediately out of this fund, in total before the due date of the credit card
you cannot charge anything to your credit card, unless it is an emergency, because it affects this account

#3 and #4 are your super-discipline rules. You should never carry a credit card balance and you should hardly ever have to dip into this account.

Being serious about this account will make your expenditures on frivolous things come way down. By disciplining yourself, you completely eliminate buying stuff you do not need. If you're reading this article, to begin with, you agree that you need to approach money seriously and want serious information about how to approach money seriously. That means, any and all spending of money needs to be looked at under an extreme microscope.

This economy has washed away many people's lives. They spent their way right into poverty and have lost everything. The lack of discipline on controlling their money sent them right into the poor house. The very thing that they were hesitating to spend money on, i.e. getting a lawyer to review their home loan, was squandered away in buying a coffee every day. Instead of saying no to their children for little things, they lost their house. Instead of cutting back, they plunged ahead, buying and spending their way right into the poor house. Keeping up appearances was so much more important to them, than sitting down and hashing out a budget to stay afloat for 10 more years.

This is the account that should force you to do all of that. If you set up an emergency account, then you have to set up a budget; a set of rules of daily spending, weekly spending and monthly spending. This is where the rubber meets the road. If you cannot swipe your credit card for anything other than a pure, unadulterated emergency, that will cut back on a lot of daily, weekly, monthly bleeding. You will have to sit down and make a food budget, bill budget and upkeep budget (gas, cleaning supplies). You will start to see that those Home Ec classes you took in high school, will come right back, front and center. So if bills, food and gas are all budgeted, you will immediately see why you are going in the hole.

You can also take this time to see that you are perhaps spending too much on bills. This is where you can cut down on bills and renegotiate your bill generating plans with companies.You might also find the need to go to your local government to see why they have allowed certain "public" companies free reign, while receiving tax payer dollars, yet charging customers out the nose, for no foreseeable reason.

With the set bills budget in place, then you can set aside all of the rest of the money to go into two accounts, the first being the emergency account.

The bulk of your extra money should go into your emergency account. This might shock some people. Why? Because you can access your emergency account. The second account you will never touch.

Most of the frivolous spending that goes on in households, are for entertainment. Briefly, entertainment today encompasses a LOT of things: dancing; drinks; movies; music; the arts; cars; food. What do i mean by cars and food are entertainment? We have been so indoctrinated that we now do not understand the difference between luxury and basic needs. Basic food is far superior and more nutritious than luxury food. Steak, potatoes and vegetables are far more nutritious than a mocha latte capuccino, pizza and soy infested cake. We also do not understand the difference between a practical car and a luxury car. Or worse, buying a second or third car for convenience.

Married couples are slowly coming to the realization that keeping the wife at home is far cheaper than having her work, buy a 2nd car, commute to work, buy a new wardrobe and pay day care. Just 90 minutes of sitting down and adding up the expenses lets you know figure this out.

Getting rid of these luxuries frees up a lot of headache, heartache and financial burden.

Next: The Savings Account

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Pay Yourself First: A Tale of Two Accounts (part 1)

2011-12-30T06:05:00.000-08:00

Pay Yourself First: A Tale of Two Accounts (part 1)

It is now a widely used phrase in self help financial guru speak, pay yourself first or bill yourself. But most people fail at it, from lack of understanding. The failure does not come from not understanding the key concept, pay yourself first, but in the execution of life.

The vast majority of people are so underwater, driven by housing propaganda and credit propaganda, that saving has all but disappeared in America. When people that never knew about saving, start to save, they fail miserably. What is the problem? They set up the entire business model of saving abysmally.

Two Princes

To save effectively, two laws of financial nature have to be acknowledged: if you're a spender, any and all money will be spent, no matter how large the money pool you are working with; and any possibility of going wrong, will happen. That means two things, those who make $200,000 a year, spend just as much as those that make $20,000 a year, percentage-wise. And, emergencies can and will happen, to eat up money you've squirreled away.

To avoid these two laws, you have to setup your two princes: two separate bank accounts - the Emergency Account and the Savings Account. They each have their place, and you frankly cannot have one without the other, if you are serious about saving.

The first thing you absolutely must do is excuse yourself from any of the major nationwide banks. Their business model works against you, not for you. The convenience of them having ATMs all over is completely offset by them slowly bleeding you dry of all your money. If your goal is to save money for a home or retirement, get away from any and all major banks, this includes online banks as well.

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Who Do You Bank With?

2011-12-30T04:20:00.000-08:00

Who Do You Bank With?

Chase, Wells Fargo, Bank of America, Citibank, these you should never have an account with. Unless you just crawled out from under a rock and don't pay attention to the news, you have no excuse.

You should bank with a local credit union.

Fat Cat Banker

The business model of the big banks is to make money off of their customer's deposits by charging fees.

The old fashioned way of making money was making money off of customer's deposits by lending to both customers and walk-ins in loans, hence savings & loans. But, at a 0% interest rate, due to the Federal Reserve Bank, the loan values are at best 4%, which then gives a return of under 1% for the saver.

See the problem with conservative banking ... if you're a greedy banker? So instead, they do everything they can to freeze your money in their bank; charge you fees and then charge you fees for doing regular banking, i.e. checking your balance.

I promote credit unions because the entire business model is completely different. You are actually a MEMBER of the union and not a client. You can be both, but that's another story. They will not charge you fees, because all of the members are trying to make money. It would be like charging yourself, to make money, which is a zero sum. However, that being said, make sure you check the by-laws in the credit union. And, shop around at at least 10 different credit unions.

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Bank of America's Death Rattle

2011-10-29T16:39:00.000-07:00

Bank of America's Death Rattle

Bank of America Corporation, which owns Merrill Lynch and Bank of America N.A. (the actual bank), moved almost $15 trillion in derivatives from Merrill Lynch’s books to BofA’s books. Bank of America, unlike Merrill Lynch, is insured by the FDIC because it is a deposit bank.

Senate Democrats penned an angry letter to Ben Bernanke this week over the Federal Reserve’s lenience with Bank of America’s recent balance sheet maneuvers. The bank, they claim, is putting taxpayers at risk of cleaning up after it again, by moving trillions of dollars in derivatives from Merrill Lynch to Bank of America.

The letter cites Section 23A of the Federal Reserve Act, which “restricts transactions between banks and their non-bank affiliates, placing limits on the amount of each transaction relative to a bank’s capital and prohibiting purchases of certain ‘low quality’ assets.” Section 23A was designed to keep FDIC-insured entities from engaging in risky activity, much like the Volcker Rule, part of the Dodd-Frank bill, was designed to do.

By moving the derivatives onto the deposit bank’s sheets, BofA has done two things according to the letter: increased their credit risk without increasing their capital cushion, and made the FDIC the “backstop” for in the event of default. Effectively, BofA has made U.S. taxpayers a counterparty to their risk, and they might have done it just to avoid having to raise collateral capital for Merrill Lynch.

The end result is that Bank of America is clearly gearing up to go completely under, taking out the entire FDIC with it. Bank of America's toxic derivatives will single handedly wipe out all of the FDIC holdings and cause congress, in an effort to stand by the FDIC, go deeper into debt by borrowing from the FEDERAL RESERVE BANK once again. It is pattently obvious that this is why the FEDERAL RESERVE BANK was completely in agreement with Bank of America transfering the trillions in toxic derivatives to begin with.

And, that is not even a conspiracy theory. It is blatantly obvious and on the books for all to see.

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Obama Lies About Real Estate

2011-10-29T15:06:00.000-07:00

Obama Lies About Real Estate

[ We apologize for this post. We normally keep opinion out of all our economic news, but this is just too ridiculous not to call attention to it. The president of the United States stood in front of millions and lied to the citizens. While he is not the first president to do so, the News Media will not point out the lie, nor inform anyone of it. ]

The Obama administration is trying to boost his very low approval rating and polls. He is trying to appear to do new things, but it is really more of the same thing. For instance he is trying to revamp HARP

What is HARP? The Obama administration in 2009 rolled out HARP to refinance borrowers whose loans were backed by Fannie Mae and Freddie Mac and who were current on their payments. The idea was simple: If you were making your payments on time but didn't have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance.

Initially, the program was limited to borrowers who owed between 80% and 105% the value of their homes. In mid 2009, the program was opened to borrowers who owed up to 125% the value of their homes.

But a series of unforeseen "frictions" have led fewer borrowers to take up on the offer of lower rates. Fewer than 900,000 homeowners have refinanced under HARP over the past 2½ years, and just 72,000 of those borrowers have loan-to-value ratios between 105% and 125%.

Last week Democratic President Barack Obama visited Las Vegas, Nevada. While visiting local areas of Vegas and taking plenty of photo opportunities, he outlined new rhetoric aimed at easing the war torn housing graveyard of Las Vegas.

The president outlined the three basic parts to his new mortgage refinancing plan when he visited Las Vegas:

Responsible homeowners will be able to refinance government-backed mortgages regardless of how much their home’s value has dropped.
The closing costs will be lower and even some refinancing fees will be done away with completely. There are times when such fees are so prohibitive that they cancel out any benefit of refinancing.
Consumers will have the opportunity to shop around to get the best rates. Currently, those homeowners with underwater mortgages have to refinance with their current lenders. That not only precludes competition, but it also means homeowners are at the mercy of their lenders.

This will do to the private sector in real estate investing, as it did to the private sector in indigent care, i.e. homeless shelters and soup kitchens. They had to close en masse, because the government got in on the project and people stopped donating to them.

I see the small private real estate investors being squeezed out because the government gets involved. We literally have to fight this tooth and nail. It is a lie to say real estate is not speculative and an risky business. The potential home owner walks into this area blindly thinking the market will always go up. Since I've been alive there has been a crash every decade.

On the back end of his speech however, details have emerged which have shown Obama's true colors once again. His glorious plan only applies to those who have lost only 10% of their home value after 2008. So in fact no one in Las Vegas will benefit from his plan. It was all just pure rhetoric. Also the plan only applies to those who have FANNIE MAE and FREDDIE MAC backed loans.

After doing some number crunching, Obama's new refinance plan will only potentially help about 1,000,000 more people.

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Bank of America Woes (part 3)

2011-10-20T17:58:00.000-07:00

Bank of America Woes (part 3)

$3.3 Billion in employee bonuses 2008, after accepting bailout money.

"Bank Of America Customers Get The Heck Out Of That Bank!" Senator Dick Durbin

Senator Durbin reveals that it costs a bank 7cents to complete a transaction via debit card per transaction. They charge customers and merchants both for the transaction itself and a usage fee to an astounding 44cents per each party. After congress passed reform, Bank of America announced a debit card fee in the amount of $5.00/ month. This will offset the losses, due to the reform, by an astounding 200%.

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Bank of America Woes (part 2)

2011-10-20T17:38:00.000-07:00

Bank of America Woes (part 2)

We do not know the total amount of derivatives transfer to the bank and the bank will not share that information with the public.

Bank Of America Forces Depositors To Backstop Its $53 Trillion Derivative Book To Prevent A Few Clients From Departing The Bank

FDIC and Federal Reserve Bank fight over the Bank of America's move to insure investor risky bets with customer deposits

Federal Reserve and Bank of America Initiate a Coup to Dump Billions of Dollars of Losses on the American Taxpayer.

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Bank of America Woes (part 1)

2011-10-20T17:23:00.000-07:00

Bank of America Woes (part 1)

Bank Of America equity is worthless. CFCrelated litigation is going from bad to worse, it can lead to violent erosion of shareholders' equitywhich. Combined with the run on the bank that has slowly begun, the $53 trillion in derivatives, the lack of sustainable competitiveadvantages and the depleting political influence, I believe this is a terminal short.

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Peter Schiff - : "S&P Did Not Downgrade US Credit Rating Low Enough"

2011-08-06T12:23:00.000-07:00

S & P AA+ rating on U.S. Sovereign Debt not Low Enough

"The conventional wisdom on Wall Street was that the economy was growing -- that the worst was behind us," said Peter Schiff, president of Euro Pacific Capital. "Now what people are realizing is the stimulus didn't work, and we may be headed back to recession."

Peter Schiff

“What people are realising is the stimulus didn't work, and we may be headed back to recession,” said Peter Schiff, president of Euro Pacific Capital, summing up the general uncertainty that has gripped investors.

Investment broker Peter Schiff says no politician will emerge unscathed from the tense negotiations. "They're going to have to raise the debt ceiling again before 2012," the president of Euro Pacific Capital told CTV News Channel on Monday. Schiff said he does not believe Washington's current agreement adequately addresses government spending. He said it puts America on the path to financial ruin. "I think the economy is going to be back in recession," he said in an interview from Westport, Connecticut. "The question is, who will Americans blame?"

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S&P Downgrade May Cloud Obama Re-Election Bid Even as It Damages Congress

2011-08-05T23:58:00.000-07:00

S&P Downgrade May Cloud Obama Re-Election Bid Even as It Damages Congress

By Margaret Talev and Brian Faler

The downgrade of the U.S.’s AAA credit rating by Standard & Poor’s darkens President Barack Obama’s re-election chances while also damaging members of Congress from both parties as they prepare for the 2012 campaign, political analysts said.

With Obama’s job-approval rating at 48 percent and an all- time high of 82 percent of Americans giving Congress negative marks in a New York Times/CBS News Poll taken this week, the downgrade will hurt the president and lawmakers by fueling economic uncertainty, possibly raising interest rates and wounding national pride, analysts said.

“Americans expect to be No. 1 at everything,” said Republican strategist Ron Bonjean. A downgrade is “a great insult and humiliating to the country.”

Added Bonjean, “If this brings rising interest rates on credit cards and mortgages, it is going to send a political shockwave throughout the system, and there will definitely be a ‘throw-the-bums-out’ mentality.”

S&P’s move deals a blow to Obama’s political standing by giving Republican presidential candidates the chance to attack him for being the first U.S. president to preside over a downgrade, said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey.

“Most people understand the inability to satisfy the bond-ratings agencies was not Obama’s alone” and that Congress gets “much more than half of the blame for this,” Baker said. Still, he said, “Blame generally falls on the president when something like this happens.”
‘Deeply Troubling Indicator’

Republican presidential candidates who were quick to jump on Obama following the downgrade included former Massachusetts Governor Mitt Romney, the frontrunner in most polls, and U.S. Representative Michele Bachmann of Minnesota, who voted against the deficit-reduction deal enacted this week that prompted the S&P downgrade.

“America’s creditworthiness just became the latest casualty” in Obama’s “failed record of leadership on the economy,” Romney said in a statement. The downgrade is “a deeply troubling indicator of our country’s decline under” the president, he said.

President Obama Troubled by Re-Election Data

Bachmann said S&P’s action “is a historically significant and serious event for the United States.” Obama “has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling,” she said in a statement.
Deal ‘Falls Short’

Obama, who left for the Camp David presidential retreat in Maryland hours before the downgrade was made public, didn’t immediately issue a response.

New York-based S&P lowered the AAA credit rating for the U.S. by one level, to AA+, in response to the deal that Obama and lawmakers reached that increased the government’s $14.3 trillion debt limit to avoid a default. While Republicans, who control the U.S. House of Representatives, insisted that a deficit-reduction plan accompany the debt-limit increase, the accord reached in Washington was dismissed by S&P in its statement on the downgrade.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” the credit-rating service said.

The company also said it’s “pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics anytime soon.”
Moody’s, Fitch Reaffirm

The difficulty lawmakers had agreeing to the deficit- reduction package helped push S&P to cut the rating, the agency said, because it indicates how much trouble Congress will have addressing more fundamental budget issues.

Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings for the U.S. on Aug. 2, the day Obama signed the bill ending the debt-ceiling impasse.

A person familiar with the discussions between the Treasury Department and S&P said Treasury officials objected to the methodology the agency used in issuing the downgrade and considered it a rush to judgment. The person said the differing verdicts from the agencies may limit the impact of the S&P move.

The debt deal includes $917 billion in spending cuts approved over the next decade intended as a down payment on further reductions. The agreement calls for a so-called super committee to be comprised of six Republican lawmakers and six Democrats charged with finding up to $1.5 trillion more in a report due by Nov. 23.
Automatic Cuts

If the committee is unable to agree on a plan or if its recommendations are rejected by Congress before year’s end, there would be an automatic $1.2 trillion in across-the-board reductions put into effect, beginning in January 2013.

“One possible positive” of S&P’s move could be that it prods the committee “into coming up with a big deficit- reduction package -- bigger than the $1.2 trillion called for in the ‘trigger’,” said Ajay Rajadhyaksha, managing director of Barclays Capital in New York.

S&P has issued increasingly insistent demands over the past year that lawmakers address long-term deficits. Last October, it said Congress had as many as five years to address the issue. In April, the agency said there was a one-in-three chance of a downgrade within two years. Last month, it said there was a 50 percent chance it would downgrade the government debt within 90 days without a “credible” deficit plan.
‘Wake-Up Call’

Ten-year Treasury yields fell to as low as 2.33 percent in New York yesterday, the least since October. Treasury yields average about 0.70 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.

Speaker John Boehner

House Speaker John Boehner, an Ohio Republican and one of the architects of the deficit-reduction plan, reacted to the downgrade by saying “it is my hope this wake-up call will convince Washington Democrats that they can no longer afford to tinker around the edges of our-long debt problem.”

Senate Majority Leader Harry Reid, a Nevada Democrat who also helped write the plan, said the announcement “reaffirms the need for a balanced approach to deficit reduction that combined spending cuts with revenue-raising measures.”
Drawing a Line

Obama had been pushing throughout his talks with Republicans on the debt deal for what he termed the “balanced” approach that would include some measures to increase federal revenue along with spending cuts. While he was willing to accept tax increases that were dwarfed by spending reductions, Republicans drew a line against any policies that could be construed as raising taxes.

Senator Jim DeMint, a South Carolina Republican and favorite of the fiscally conservative Tea Party movement who voted against the debt deal, claimed vindication.

“The deal was not a serious attempt to solve our spending and debt problem -- it was a political solution meant to kick the can down the road,” he said.

S&P, though, noted in its report that the failure to act on raising revenue also was a consideration in its decision.

“We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues, is less likely than we previously assumed,” the company said.
‘Danger Zone’

S&P also changed its assumption that the 2001 and 2003 tax cuts enacted under President George W. Bush would expire by the end of 2012, “because the majority of Republicans in Congress continue to resist any measure that would raise revenues.”

Democratic strategist Bill Carrick said Republicans shouldn’t view themselves as not also being in harm’s way from the repercussions in the deficit dispute.

“The danger zone here for the Republicans is instead of being free to bash the president, now they are sort of part of the problem,” said Carrick, who is based in Los Angeles. Republicans are vulnerable to criticism that they have an “unwillingness to compromise,” he added.

More than four out of five people surveyed in the New York Times/CBS Poll said the debt-ceiling debate was more about gaining political advantage than doing what is best for the country. Republicans in Congress get more of the blame for the difficulties in reaching an agreement than the Democrats, according to the poll, conducted Aug. 2-3.
‘Attack Ads’

The survey showed that 72 percent disapproved of the way Republicans in Congress handled the talks, while 66 percent disapproved of the conduct by Democrats. The poll of 960 adults has an error margin of plus-or-minus 3 percentage points.

Stuart Rothenberg, editor of the Washington-based Rothenberg Political Report, said S&P’s skepticism over the capacity of Congress and the administration to leverage its agreement into a broader plan to address the debt should be “a kick in the behind for both parties.”

Still, Bonjean, the Republican strategist based in Washington, said Obama will bear the brunt of the fallout from the downgrade.

“The attack ads will be cut instantly, because he’s the president who was in charge when our country’s downgraded for the first time in history,” he said.

Referring to a trip Obama has scheduled Aug. 15-17, Bonjean also said, “I would not want to be President Obama on a bus tour through the Midwest listening to Americans who are out of work or had interest rates raised on their loans, or are fearful of economic instability.”

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net.

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Jim Rogers - News on ABC Australia - 05 Aug 2011

2011-08-05T23:34:00.000-07:00

Jim Rogers - News on ABC Australia - 05 Aug 2011

Jim Rogers

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Egg Producers Sued for Price Fixing

2011-07-30T15:41:00.000-07:00

Egg Producers Accused of Price-Fixing

A lawsuit alleges that the nation's largest egg trade group and some leading farmers conspired to artificially inflate prices.

By P.J. Huffstutter, Los Angeles Times

Food service giant Sodexo Inc. has filed suit against the nation's largest egg trade group and some leading egg farmers, alleging they perpetrated a decadelong scheme to artificially inflate egg prices.

The civil complaint, filed in U.S. District Court in Philadelphia, claims that an egg cartel conspired to limit domestic supply by killing off hens under the guise of treating the remaining animals more humanely by giving them more cage room. The alleged scheme resulted in as much as a 40% increase in U.S. wholesale egg prices in 2008, according to the lawsuit.

The Golden Egg is Being Sued

The suit, filed Thursday by a Maryland-based unit of the French company, marks the latest salvo in a massive antitrust battle forming over the price of eggs. Egg producers say federal law allows them to work collaboratively. U.S. grocers, food suppliers and distributors claim that the industry illegally colluded to manipulate the market.

Among other things, according to the Sodexo complaint, the United Egg Producers trade group and five companies schemed to cull their flocks and not quickly replace the birds. They also allegedly required United Egg Producers members to join this effort in order to obtain the trade group's certification stamp on their cartons — a seal seen by many retailers as a sign of quality.

Sodexo bought more than $250 million in eggs and egg products from the defendants from 2002 to 2010, according to the filing.

Those companies were: Cal-Maine Foods, based in Mississippi; Hillandale Farms, headquartered in Pennsylvania; Michael Foods of Minnesota; National Food Corp. of Washington; Ohio Fresh Eggs of Ohio; and Rose Acre Farms of Indiana.

None of these companies could be reached for comment Tuesday. United Egg Producers denied the allegations. Its members control about 95% of all the nation's egg-laying hens, according to its website. The organization said in a statement that the industry's effort to shrink hen flocks was intended to allow the animals more space in response to concerns voiced by retailers and the public over the treatment of laying hens.

United Egg Producers said a 1922 federal law known as the Capper-Volstead Act gives egg farmers the right to form cooperatives and jointly market their products.

Sodexo's attorneys contend that because businesses other than egg farmers can join the trade group the law's protections don't apply in this situation. As a result, the plaintiff argues, United Egg Producers and the egg farmers are violating U.S. antitrust laws.

As the legal fight has grown, so too have the questions over whether Capper-Volstead protections are still helpful to both farmers and consumers. Peter Carstensen, a professor at the University of Wisconsin Law School who specializes in antitrust policy issues, pointed out that many egg farms have consolidated into massive enterprises — and that there are far fewer small, mom-and-pop operations than in the past.

"The egg case is the poster child of whether change will happen, and if the courts carve back the scope of immunity of Capper-Volstead," Carstensen said. "If it's going to happen, it could happen with eggs."

Sodexo's case follows on the heels of a separate class-action lawsuit and more than a dozen other similar complaints working through the federal court in Philadelphia.

The defendants in the egg cases are a veritable who's who of the egg world: Hillandale, whose eggs were at the heart of last year's massive recall; Ohio Fresh, which has ties to Hillandale President Orland Bethel and Austin "Jack" DeCoster, the other Iowa egg producer involved in the recall; Cal-Maine, the nation's largest producer and distributor of shell eggs; and NuCal Foods, an agricultural cooperative based in Ripon, Calif.

None of these defendants could be reached for comment Tuesday.

Egg Producing Hens in Cages

The Sodexo case also comes after the Justice Department's antitrust division recently wrapped up a yearlong series of workshops that examined whether monopolistic practices in the agriculture industry were driving up food prices. The public meetings, held in conjunction with the U.S. Department of Agriculture, were designed to allow producers, competitors and activists to air their concerns about the grain, dairy, livestock and poultry industries — as well as concerns over price margins.

Charges of price manipulation are an outgrowth of California's Prevention of Farm Animal Cruelty Act, better known as Proposition 2. That measure, which state voters overwhelmingly approved through a ballot initiative in 2008, banned small, confining crates or cages for veal calves, egg-laying hens and pregnant sows.

While preparing for the Proposition 2 campaign, staff members at the Humane Society of the United States discovered egg industry documents they said showed that producers were manipulating the market by collectively shrinking supply to boost prices. The society filed petitions with the Justice Department and the Federal Trade Commission over the findings. Later, class-action lawyers filed nearly two dozen lawsuits.

The plaintiffs got a boost last spring when Sparboe Farms of Minnesota — the nation's fifth-largest egg producer and one of the 21 farm operations and industry groups named as defendants in the various cases — released documents and internal memos showing that United Egg Producers called for its members to slow production, according to court filings.

The documents and memos remain sealed by court order.

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Artificially Inflated Food Prices due to Corn Subsidies and Ethanol Subsidies

2011-07-30T15:08:00.000-07:00

End ethanol Subsidies to Lower Food, Land Prices

by The Gazette Opinion Staff :: UPDATED: 21 April 2011

Cropland prices are skyrocketing to absurd levels due to both increased corn prices and government subsidy. As more cash is put into the hands of farmers, that cash is reinvested into farmland, further pushing up the costs not only of cropland but any other piece of ground.

Ethanol is Highly Subsidized and Inefficient

Compounding the issue is the strain being placed on our corn supply due to ethanol. More than 30 percent of corn is used to manufacture ethanol, a product that requires more energy per unit volume to produce than to produce the same volume of gasoline, and which contains less energy per unit than gasoline.

This demand being placed on corn production is a cornerstone to increasing food prices; the other cornerstone to increasing food prices is fuel, and while ethanol was sold as a means to supplement and suppress fuel prices, in the end, E85 is only 50 cents cheaper than regular unleaded — and the distance a gallon of E85 can take you is less than a gallon of gasoline. Ethanol is subsidized by the government, which means that the taxpayer is subsidizing artificially inflated land and food prices.

If the ethanol subsidy were to cease, food prices would drop, land prices would drop, and a significant amount of marginal farmland would go to being pasture. Ethanol subsidies need to end.

David Sheets

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Environmental Enforcement: China Halts ConocoPhillips Operations

2011-07-14T09:52:00.000-07:00

Environmental Enforcement: China Halts ConocoPhillips Operations

[ by: http://www.environmentalleader.com/2011/07/14/environmental-enforcement-china-halts-conocophillips-operations/ ]

The Chinese government yesterday ordered ConocoPhillips to stop operations at several rigs in an area affected by a 336 square mile oil slick, warning that another spill could happen “at any time,” Agence France-Press reported.

ConocoPhillips Oil Rig

The slick is the result of a spill at an oil field that the company and state-run oil giant China National Offshore Oil Corp. (CNOOC) operate at Bohai Bay, off China’s eastern coast. The State Oceanic Administration (SOA) said operations would not be allowed to continue until the source of the spill could be plugged.

The SOA instructed ConocoPhillips to suspend production from platforms B and C of the oil field, the company said, adding that it immediately complied with the order. ConocoPhillips said the move will reduce output by about 17,000 barrels of oil per day.

“There has been oil seeping continuously into the sea for days from platforms B and C in the Penglai 19-3 oil field and there is still a slick in the surrounding marine areas,” the SOA said.

“Another spill could happen at any time, which has posed a huge threat to the oceanic ecological environment,” it said.

The spill was detected on June 4 but only made public at the beginning of July. There was also a second incident on June 17, about two miles away near platform C, but releases from that site were stopped within 48 hours, ConocoPhillips said.

Last week CNOOC said the earlier, larger spill was “basically under control” and ConocoPhillips said the leak had been plugged, according to the AFP.

ConocoPhillips Oil Slick

Yesterday ConocoPhillips said that trace amounts of oil estimated at only liters per day were seeping out near the original spill location, and were being contained by booms.

It estimated that the total fluid spilled in the two incidents is between 1,500 and 2,000 barrels. It said that no oil sheen has reached the shoreline and there have been no injuries to personnel.

Last week, the official China Daily newspaper said that dead seaweed and rotting fish were spotted near the slick, and it quoted a fisheries association official who said the spill would have a long-term environmental effect, AFP reported.

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US STOCKS-Wall Sreet Rises as JPMorgan Lifts Government Debt Gloom

2011-07-14T09:41:00.000-07:00

US STOCKS-Wall Sreet Rises as JPMorgan Lifts Government Debt Gloom

By Edward Krudy

NEW YORK, July 14 (Reuters) - Wall Street stocks rose on Thursday as higher profit from JPMorgan (JPM.N) offset concern after Moody's threatened to downgrade the United States' top credit rating if the federal borrowing limit is not raised.

A report showing new claims for U.S. jobless benefits fell slightly last week also helped buoy stocks.

JPMorgan's results were welcomed by investors who have been buffeted by worries about excessive government debt at home and in Europe. The bank's forecast-beating quarter came as it wrote off fewer bad mortgages and credit card loans, sending the shares up 3 percent to $40.82.

But analysts said deadlocked debate over budget cuts and raising the debt ceiling would weigh on the market after Moody's announcement on Wednesday.

It came shortly after the ratings agency gave Portuguese debt a junk rating and as Europe's debt crisis appeared to be spreading.

Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York, said that JPMorgan's results were a boost for the market but sentiment remained sensitive to big macro issues.

"There seems to be some hope this morning that the media focus on the White House and Congress will result in a budget deal and the two sides will get together," he said. "When that news comes out -- if it does -- we should see a pop in the market."

The Dow Jones industrial average .DJI gained 78.07 points, or 0.62 percent, to 12,569.68. The Standard & Poor's 500 Index .SPX rose 8.23 points, or 0.62 percent, to 1,325.95. The Nasdaq Composite Index .IXIC added 18.43 points, or 0.66 percent, to 2,815.35.

The equity market has generally taken the debt ceiling wrangling in its stride and continues to do so -- judging by the lack of follow-through from the selloff in futures last night when Moody's action was announced.

U.S. President Barack Obama clashed with Republican lawmakers on Wednesday in a fierce White House meeting on deficit reduction that left a deal in question as the clock ticked toward a debt default.

Euro zone countries continued to grapple with the thorny issue of involving the private sector in tackling Greece's debt pile as they prepared for a meeting to decide support for the country next week.

Wall Street ended higher on Wednesday on expectations further stimulus measures could be on the horizon after Federal Reserve Chairman Ben Bernanke said the Fed is ready to ease monetary policy further if economic growth and inflation slow much more.

Shares of Yum! Brands (YUM.N) rose 3.3 percent to $57.42 as the fast-food firm raised its full-year earnings forecast late on Wednesday after China helped deliver quarterly earnings for the company that topped Wall Street's forecast.

Marriott International Inc (MAR.N) fell 7 percent to $34.42 as the hotel firm reported higher quarterly earnings that matched analyst estimates and gave a tepid forecast for the year, also late Wednesday.

ConocoPhillips (COP.N) will split itself into two by spinning off its refining arm, the third-largest U.S. oil company said on Thursday, sending its shares up 5.6 percent to $78.58.

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Conoco Phillips Announces Break Up

2011-07-14T09:30:00.000-07:00

Conoco Phillips to Split Its Refining Business

ConocoPhillips ($78.65, +$4.25, +5.71%) disclosed plans to separate its refining and production businesses into two standalone, publicly traded corporations, becoming the largest energy company to date to reveal such intentions. Shares rose 9.5% to $81.50 in pre-market trading.

ConocoPhillips, the third-largest U.S. energy company, plans to shed its refining business through a spinoff to free capital for oil exploration and increase returns for investors. Its CEO and Chairman, Jim Mulva, said Thursday that it will split itself into two separate publicly traded companies and plans to retire once the transaction is complete. Its shares jumped $3.60, or 4.8 percent, to $78 in premarket trading.

Oil producers such as Chevron Corp. and Marathon Oil Corp. have been trimming refining holdings to focus capital on more lucrative ventures such as offshore oil exploration and North American natural-gas drilling. Marathon’s spinoff of its entire refinery network, completed June 30, has yielded shareholders a 69 percent bonanza since it was announced seven months ago.

"We have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies," Mulva said in a statement.

Conoco's announcement comes on the heels of the breakup of Marathon Oil first announced in January. On July 1, Marathon Petroleum Corp., the refining company, began trading on the New York Stock Exchange under the "MPC" ticker symbol. Marathon Oil Corp. kept its ticker symbol of "MRO."

“I love it!” said Fadel Gheit, a New York-based analyst for Oppenheimer & Co., who rates the shares “outperform” and owns none. “It worked for Marathon and it will work even better for ConocoPhillips. ConocoPhillips is a much better company.”

ConocoPhillips rose $3.48, or 4.9 percent, to $77.88 at 11:10 a.m. in New York Stock Exchange composite trading. The shares earlier climbed as much as 7.7 percent, the biggest intraday gain since May, 8, 2009.

ConocoPhillips CEO Jim Mulva

Before today, the shares had risen 9.3 percent this year, lagging the gains of its larger U.S. rivals, Exxon Mobil Corp. and Chevron Corp., which rose 13 percent and 15 percent, respectively. Conoco said its board has approved separating its refining and marketing and exploration and production businesses by spinning off the refining and marketing segment to shareholders in a tax-free transaction.

ConocoPhillips’s oil company will maintain its 66-cent quarterly dividend, Mulva said today on a conference call with analysts. The refining business also will pay a dividend and will have positive cash flow immediately, he said.

The spinoff will be done in the form of a special dividend to shareholders, Mulva said during the call. All of the company’s existing corporate bonds will remain with the oil business, Mulva said on the conference call today.

Following the split, the refining arm will be the largest U.S. independent refiner, with over 2 million barrels of daily processing capacity. The capacity includes two plants held jointly with Canadian oil sands producer Cenovus Energy Inc., which Mulva says may be grouped with the refining unit. Valero Energy Corp. will be No. 2, according to data compiled by Bloomberg. Independent refiners don’t also own oil wells. ConocoPhillips controls about 10 percent of U.S. processing capacity and also owns five plants outside the country.

“Their refining assets are certainly more geographically diversified than Marathon’s,” said Ann Kohler, an analyst at CRT Capital Group LLC in Stamford, Connecticut, speaking in a telephone interview. “Marathon benefits from its high integration in the mid-continent.”

The split, which is expected to be completed during the first half of next year, will leave Conoco as an exploration and production company. Mulva will lead the separation efforts, but plans to retire once the split is complete. Mulva, 65, was CEO of Phillips Petroleum Co. in the late 1990s when he embarked on an expansion program that included acquisition in Alaskan oil fields, U.S. Midwest refineries and North American natural-gas wells.

Since the August 2002 merger that Mulva orchestrated to create ConocoPhillips, the company’s shares rose 189 percent, compared with increases of 133 percent and 173 percent for Exxon and Chevron, respectively.

ConocoPhillips may not benefit from its split as much as Marathon has, said Mark Gilman, an New York-based analyst for Benchmark Co. Marathon’s shares were severely discounted prior to its announcement, which isn’t the case for ConocoPhillips, said Gilman, who rates the stock “sell” and owns none.

“I don’t think they’re a strongly positioned company,” Gilman said. “Doing this doesn’t change anything. It’s monkeying with pieces of paper.”

The announcement comes as the crack spread, a measure of the difference between the cost of crude oil and the selling price of fuels derived from it, exceeds $35 a barrel, the widest in at least 25 years.

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How to Get Out of the Economic Depression in America Today

2011-06-26T12:48:00.000-07:00

Getting the Government Out of the Picture

Everyone in the belt seems to only listen to people that tells them to keep spending. Somehow they think that we can spend our way out of this bubble economy. Of course, that is completely illogical. You cannot spend your way out of a bubble. It makes you sense politically, economically or otherwise. The only way to really turn this economic depression around is to stop spending and make cut backs.

End the Useless Department of Education

There are whole departments in the government that are completely obsolete, irrelevant and unnecessary. They have names like department of education, IRS and homeland security. The names seem completely necessary and we've been told that not having them and other would mean government collapse. But, what is not said, is that they were mostly formed in this last generation's lifetime, not 200 years ago. Everyone shies away from the phrase spending cuts, because they always fear that the first thing on the chopping block will be some monstrous cut to roads or something equally crippling. That's the fear that has been put into the country, but the federal budget can be cut in nearly 1/2 before touching anything even close to necessary to run the government.

For example, a huge portion of the military budget, for instance, is spent on people not in the military at all. People who have nothing to do with the running of any military actions. They are simply leeching onto the military spending and bleeding it for all its worth. However, when it comes to the floor to cut those people out of military spending, they turn it around to look as if the government is trying to cut military spending and not the leeches from the department. A massive political campaign is started to change the rhetoric to make it look like "military" cuts would mean less troops, instead of less leeches. Spending in the military alone could be halved and no military action would even be affected, due to this bloated budget for those who serve no purpose but to suck on the teet of American tax payers.

Unemployed Job Fair

With spending back to honest form you have to turn to taxes. The single most honest way to create jobs via the government is one that rests in the only government's power to "create" jobs. Honestly speaking, the government cannot "create" a job. Not even a single one. A "job" is something that generates profit for someone that is building capital. The government does not build capital. The government gains only tax payer dollars. They do not generate anything. So a government job, by definition, is not a true job. So Obama and friends cannot create jobs by doubling census taker jobs, a temporary fix anyway. It is all more rhetoric anyway. Government can only perform one roll when it comes to the job market, hinder more or hinder less in job creation or destruction. That is to say, the only role government plays in the job market is to get in the way of business to create jobs.

Since the government cannot create jobs of its own accord, and once we understand that their only role in the job market is one of hindering creation, then we have to understand how they hinder it and remove those hindrances, taxes. The burden of taxation on employers and employees alike is monumental in the hindrance of job creation. Of course regulation is the 2nd factor, but more prominent is taxation. So to get out of the way of job creation, the only way to get out of this slump is through:

"a 100% payroll tax holiday for both employers and employees. Instead of putting money into the economy, [through inflationary quantitative easing ] relieve the burden from employers and employees. That will generate jobs like nothing else in the history of the US."

Obama proposed and passed a "payroll tax holiday", but in actuality it was a 2% reduction in SS collection, all the while income taxes rose, so there was no net gain for anyone except a few wealthier workers. Most laborers saw a net increase in taxes and less take home pay. It is this kind of double talk and double dealing, that is killing any honest effort to get the economy going. This administration is literally bankrupting the country and the middle class, while putting on a show of being for the people.

Illegal Immigration

Many Illegal Aliens are Criminals Fleeing the Law

Finally, on job creation, we must have a massive exodus of illegal immigration. Advocates for illegal immigration, do so for ulterior motives that are not in the best interest of the country. Illegal immigration creates a substrata of labor that is even lower than entry level pay. Illegal immigration undercuts even low paying wages. You can wrest massive unemployment directly on the shoulders of illegal immigration, and this is very openly documented and researched. It has become politicized by those same advocates for illegal immigration. The reality is that state governments are finally seeing through the rhetoric and realizing that their massive segments of the population on unemployment are directly caused by illegal immigrants in their state. They are taking it upon themselves to finally make a move and upholding the illegal immigration laws and removing the illegal immigrants themselves.

Make no mistake, over 90% of all illegal immigrants are Mexican nationals. Advocates for illegal immigration always puts the onus on us to sympathize for those illegal immigrants by pointing out the terrible conditions Mexico has. However, they never put the responsibility on the very illegal aliens themselves, but somehow make us, the US, the responsible party for having a more stable society than Mexico. The reality is that Mexico probably needs to have a revolution to turn its country around. But either way, that is not the responsibility of the US government, nor the states, nor its citizens. That is the responsibility of the Mexican people and the Mexican government. The Mexican government devalued its own currency on purpose, rendering their own upper middle class, poor, overnight, and rending those under that class into abject poverty. That has nothing to do with the United States. And, it should not be thrust upon the shoulders of our citizens and middle class to bear the brunt of a decision made by the Mexican government.

All of this illegal immigration has become so highly politicized that noone dares even mention the true reason for the state Mexico is in right now. They only talk about how poor people are and what terrible straights the people are in. They never mention why there is so much poverty. If the upper middle-class were thrust into poverty overnight, of course the country is going to be thrown into social unrest. But that is the responsibility of their government and their people have to hold them responsible, not come over here illegally and cast millions of Americans into poverty, while creating a new underclass of citizenry.

FAIR research suggests that "between 40 and 50 percent of wage-loss among low-skilled Americans is due to the immigration of low-skilled workers. Some native workers lose not just wages but their jobs through immigrant competition. An estimated 1,880,000 American workers are displaced from their jobs every year by immigration; the cost for providing welfare and assistance to these Americans is over $15 billion a year." The National Research Council, part of the National Academy of Sciences, found in 1997 that the average immigrant without a high school education imposes a net fiscal burden on public coffers of $89,000 during the course of his or her lifetime. The average immigrant with only a high school education creates a lifetime fiscal burden of $31,000. [ cite - Center for Immigration Studies report Immigration From Mexico - Assessing the Impact on the United States, subsection Impact of Mexican Immigration on Public Coffers. ]

Many states are now adopting Arizona's model of immigration policy. The tax paying people who are now out of a job are clamoring too loudly for them not to listen. The Obama administration may try to socialize and communize everything and smooth everything over with a veneer of "we're all in this together", but the reality is, the unemployed are not in this together. They are out, and children and wives are starving. That is a reality, no politics can brush aside. Those same Mexican illegal aliens also never pay taxes and drain the economy by sending upwards of 70% of their payroll checks back to Mexico, making it the 2nd largest GDP for Mexico. So not only are Americans losing jobs, they are also being drained of money.

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Chill Out on QE3, but Beware Debt Default: Sonders

2011-06-10T09:04:00.000-07:00

Chill Out on QE3, but Beware Debt Default: Sonders

(Reuters) - The economy does not need a third round of stimulus but could convulse if lawmakers fail to raise the nation's debt ceiling, the chief investment strategist at the largest U.S. discount brokerage operator said on Wednesday.

Liz Ann Sonders

Liz Ann Sonders, chief investment strategist at the brokerage unit of Charles Schwab Corp (SCHW.N), said a recent downdraft in stock prices in part arises from fears about the economy and government efforts to keep it growing.

Financial markets are bracing for the end this month of the Federal Reserve's second round of quantitative easing, known as QE2, in which the central bank is buying as much as $600 billion of bonds to spur the economy.

Many investors say QE2 has boosted stock prices since late last year. But they also say the stimulus has driven commodity prices higher and depressed the dollar, and fear a third round of stimulus, QE3, might be needed for an economy that grew at just a 1.8 percent annual rate from January to March.

Sonders, however, called QE3 a bad idea, despite dampened investor sentiment that has fed a 6 percent drop in the S&P 500 index .SPX since the end of April.

"One of the biggest contributing factors to the confidence gap that we have now, not just by investors but by consumers, by businesses, is concerns about QE2 and excess stimulus and uncharted territory," Sonders said at the Reuters 2011 Investment Outlook Summit. "It's high time that we just chill for a little bit and let the economy move on its own."

Sonders said it is premature to say how close the economy is to retreating into recession, two years after it emerged from a downturn that encompassed the 2008 financial crisis.

A spike in commodity prices tied to a falling dollar or Middle East unrest "would throw a real wrinkle to this being just a soft patch and not something worse," she said.

NO MORE KICKING THE CAN ON DEFICIT

But one risk is the ability of the White House and Congress to agree how to reduce the nation's $1.4 trillion annual budget deficit, as part of an agreement to raise the country's $14.3 trillion borrowing limit by August 2.

Failure to raise the limit could lead the United States, which has triple-A credit ratings, into at least a technical default on some of its debt.

"Both sides are going to the outer reaches of extremes and digging their heels in," Sonders said. "There is a very, very tiny risk of default. But as is the nature of Washington, if we do get an agreement, it will be in the 11th or 12th hour."

Raising the debt limit has long been a political football, with Democrats and Republicans disagreeing on how to redistribute the tax burden or otherwise reduce or reallocate spending.

A Reuters/Ipsos poll released on Wednesday finds Americans divided on how to reduce the deficit. Republicans preferred spending cuts to tax hikes by a roughly 4-to-1 margin, and Democrats slightly preferred tax hikes to spending cuts. Independents emphasized spending cuts by a roughly 2-to-1 margin.

Even with the looming 2012 election, temporary or partial solutions may not now be politically viable, Sonders said.

"In the past there was no political downside to kicking the can down the road," Sonders said. "But never has the concern about debt and the desire to see something be done about it be as high up on the list of things that voters care most about.

"The only credible plan in terms of long-term success and public agreement has to be a true compromise," she added. "The only way to keep from it being a much bigger problem (is) to make some hugely unpopular decisions."

(Editing by Padraic Cassidy)

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Wall Street Slides on Data, Nasdaq Negative for Year

2011-06-10T08:51:00.000-07:00

Wall Street Slides on Data, Nasdaq Negative for Year

(Reuters) - Wall Street resumed its slide on Friday, with the Nasdaq turning negative for the year, after China's weaker trade data and disputes about a second Greece bailout weighed on already fragile sentiment.

Bank stocks ranked among the top decliners. The Federal Reserve said it plans to expand the number of banks it will subject to annual tests used to determine if stock dividends can be increased and whether an institution is holding enough capital.

"It's an incremental negative that makes it easier to be negative and sell any financial stocks right now," said Michael James, senior trader at Wedbush Morgan in Los Angeles. "The financial stocks have been a big weight and an underperformer all year so the path of least resistance in the financials continues to be lower."

The KBW regional banks index .KRX fell 1.5 percent and the S&P financial sector index .GSPF dropped 1.6 percent.

The Nasdaq Composite erased its gains for the year, while the Dow and the S&P 500 were on track for a sixth straight week of losses. A string of sub-par U.S. economic data in the past few weeks has turned investors away from equities.

China's sales to the United States and the European Union slumped to their weakest since late 2009, excluding Lunar New Year holidays, underlining the view that the world economy is stumbling.

"Recent economic reports have been very weak and people are worried about the idea of a double-dip recession," said Janna Sampson, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.

"I am still expecting to see second-half growth, and the market pick back up as we see that," Sampson said. "But are we going to see it before we get earnings reports for the second quarter? I doubt it. June is probably going to be pretty weak."

In another negative for U.S. stocks, the euro fell as concerns about the Greek debt crisis eclipsed any support from a likely euro-zone interest-rate increase next month. Investors have been trading the correlation between stocks and the dollar recently.

The Dow Jones industrial average .DJI lost 143.23 points, or 1.18 percent, to 11,981.13. The Standard & Poor's 500 Index .SPX fell 15.96 points, or 1.24 percent, to 1,273.04. The Nasdaq Composite Index .IXIC dropped 35.38 points, or 1.32 percent, to 2,649.49.

The PHLX semiconductor index .SOX tumbled 2 percent, sinking to its lowest since December 1. The SOX fell below its 200-day moving average for the first time since last October.

Ally Financial (GKM.N), an auto and mortgage lender majority owned by the U.S. government, delayed a $6 billion initial public offering, further troubling investors worried about the poor performance of financial stocks during the market's recent decline.

(Reporting by Rodrigo Campos; Additional reporting by Edward Krudy; Editing by Jan Paschal)

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Kicking the Ball Down the Road: White House Considers Payroll Tax Holiday for Employers

2011-06-10T08:40:00.000-07:00

White House Mulls Payroll Tax Break for Business

(Reuters) - The White House is considering a temporary cut in payroll taxes that employers pay on wages, an administration official said on Thursday, as advisers to President Barack Obama discuss more ways to boost the economy.

A deal between Obama and congressional Republicans in December included a reduction in taxes that workers have taken out of their paychecks in 2011, but corporations did not get the same break.

The official, who spoke on condition of anonymity, declined to give details about other ideas the administration is considering.

The struggling U.S. economy is the biggest challenge that threatens Obama's hopes of being re-elected president in 2012.

The president, at a news conference with German Chancellor Angela Merkel earlier this week, said his administration was looking at ways to extend elements of the December deal.

"Some of the steps that we took during the lame duck session -- the payroll tax, the extension of unemployment insurance, ... the tax breaks for business investment in plants and equipment -- all those things have helped," he said.

"And one of the things that I'm going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way." (Reporting by Jeff Mason; Editing by Eric Beech)

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Investing 101: Quantitative Analysis

2011-05-08T18:53:00.000-07:00

Quantitative Analysis

A business or financial analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically.

Quantitative analysis can be done for a number of reasons such as measurement, performance evaluation or valuation of a financial instrument. It can also be used to predict real world events such as changes in a share price.
The process of determining the value of a security by examining its numerical, measurable characteristics such as revenues, earnings, margins, and market share.
A mathematical analysis of the measurable figures of a company, such as the value of assets or projected sales. This type of analysis does not include a subjective assessment of the quality of management.

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Investing 101: Price / Earnings Ratio (P/E)

2011-05-08T17:55:00.000-07:00

P/E Ratio

A valuation ratio of a company's current share price compared to its per-share earnings.

Market Value per Share

Earnings per Share (EPS)

The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular metric of stock analysis. Value investors have long considered the price earnings ratio (p/e ratio for short) a useful metric for evaluating the relative attractiveness of a company's stock price. Made popular by the late Benjamin Graham, who was dubbed the "Father of Value Investing" as well as Warren Buffett's mentor, Graham preached the virtues of this financial ratio as one of the quickest and easiest ways to determine if a stock is trading on an investment or speculative basis. In addition to helping you determine which industries and sectors are over / under priced you can use the p/e ratio to compare the prices of companies in the same sector against each other.

The starting point for the P/E ratio is the share price. This is the P. The P/E takes this share price and divides it by earnings per share (which is the company's entire net profit, or earnings, divided by the number of shares in issue). This is the E. Together these two numbers relate the market's valuation of a company's shares to the wealth the company is actually creating. By relating share prices to actual profits, the P/E ratio highlights the connection between the price and recent company performance. If prices get higher and profits get higher, the ratio stays the same. The ratio only moves as price and profits become disconnected.

Generally, we test for the importance of future profits to the current P/E by building a prospective P/E ratio. This takes the current share price (P) and divides it by forecast earnings per share (E) for next year, and even the following year. We get these earnings forecasts from stockbrokers' analysts.

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Are You Leaving Money on the Table? Penny Stocks

2011-05-08T17:25:00.000-07:00

Taking Profit in Stocks

Did you know that America Online was a Penny Stock selling for 50 cents and Yahoo was only a $2 stock not long ago? Do you think perhaps you're leaving good money on the table over in penny stocks? So many traders are elitists and won't touch penny stocks saying it is beneath them. Profits can and are made in penny stocks all the time. Some very large companies have started out in a very meager position. Most won't advise you to even look at penny stocks because the person advising you is not going to make any money at advising you in penny stocks. Remember, follow the money trail.

Learning how to turn a profit with penny stocks is not that difficult. In fact, it can be surprisingly easy if you know the basics and you take the time to research the stocks you are interested in carefully. Finding the research is not as difficult as it used to be. Penny stocks are share price that are traded below $5 over the exchange counter. These stocks have small market capitalization. Penny shares are thinly traded volumes. Sometimes, the return from most of the stocks ranges from 100%-1000%. Sometimes you just need instructions on how to learn about penny stocks like a PennyStocking Conference DVD and Instruction Manual

The financial statements of a penny stock need to be checked before investing in a company from a list pre-chosen penny stocks. Financial statement will reflect the financial condition of the company. An investor should understand the business model and future prospects of a company. This kind of analysis will help in proper selection of a penny stock. The best way to really learn penny stock would be to sit in on a Live Strategy Session with an actual, successful trader.

CME to Raise Margins at End of Business Today and on Monday 5/9/11

2011-05-05T12:30:00.000-07:00

CME to Raise Margins on Monday

(Reuters) - The CME Group (CME.O) sharply raised silver futures margins for a fourth and fifth time in under two weeks, an 84 percent rise in trading costs that has helped provoke a nearly unprecedented sell-off.

The 20 percent slide in silver prices since they touched an all-time high of $49.51 an ounce on April 28 has been in large part driven by selling from speculators who may be unable or unwilling to bear the surging cost of holding positions.

Holdings in the world's largest silver-backed exchange-traded fund, iShares Silver Trust, fell by 521.8 tons, or 4.78 percent, from the previous session to 10,387.26 tons by May 4.

These things are not subject to manipulation as much as ridiculous margin requirements? - Jim Cramer CNBC

The CME, which typically raises margins when volatility in markets increases, dealt the latest blow on Wednesday, announcing two separate, successive margin hikes.

It said margins would rise to $14,000 per contract from$12,000 effective Thursday, May 5, and again to $16,000 effective Monday, May 9. Prior to April 25 the margin stood at $8,700 per contract. One contract holds 5,000 ounces, worth about $200,000 at current prices.

"The catalyst for the silver move could be the margin requirement hikes, squeezing out the pure short-term speculators that were playing a hot segment," said Joe Cusick, senior market analyst at Chicago-based online brokerage optionsXpress.

Silver prices tumbled 5 percent on Wednesday, taking three-day losses to 18 percent, only the sixth time since 1983 that prices have fallen so sharply in such a short time.

The volatile silver market has become a hot topic in financial circles over the past six months as it surged more than 170 percent from August, outstripping gold's one-third rise and attracting a flow of trend-chasing money.

But its recent ructions have shocked even veterans, with implied volatility in the options market surging from 37 percent to a post-2008 high of more than 55 percent in just two weeks, according to Reuters data based on 30-day at-the-money call options traded on COMEX.

Directly from CME Group

With recent geopolitical events and natural disasters driving volatility in financial markets, margins – good-faith deposits to guarantee performance on open positions – have spent more time than usual under the limelight.

So we thought it might help to provide a very brief primer on margins as part of this conversation.

At CME Group, we’re intently focused on risk management. In over a century, we have not experienced a default. In more than a century, there has never been a failure by a clearing member to meet a performance bond call or its delivery obligations; nor has there been a failure of a clearing member firm resulting in a loss of customer funds. As part of our overall risk management program, margins are adjusted frequently across all of our products based on market volatility. When daily price moves become more volatile, we typically raise margins to account for the increased risk. Likewise, when daily price moves become less volatile, margins typically go down because the risk of the position also decreases.

Margins are set as part of the neutral risk management services we provide. They aren’t a means to move a market one way or another, or to encourage or discourage participation from one kind of market participant or another. Rather, margin is one of many risk management tools that help us assess overall portfolio risk to protect market participants and the market as a whole.

There are two main margin philosophies that clearing houses can have. First, a clearing house could set margins sufficiently high to cover all possible volatility environments. Changes are less frequent, but margins are higher. Second, and the CME Clearing approach, is to ensure that margins are set to cover 99 percent of the potential price moves. Margins then are lower in less volatile periods and higher in more volatile periods. Changes are often made when the volatility environment experiences a sustained change.

Who determines margin, and what goes into setting margin levels?

At CME Group, CME Clearing is responsible for setting margins. In doing so, we consider several factors to compute the gains and losses a portfolio would incur under different market conditions. Then we calculate the worst possible loss a portfolio might reasonably incur in a set time (usually one trading day for futures markets).

CME Clearing determines “initial margin,” which is the margin that market participants must pay when they initiate their position with their clearing firm, as well as “maintenance margin,” the level at which market participants must maintain their margin over time. We mark positions to market twice a day to prevent losses from accumulating over time. We typically change margins after a market closes because we have a full view of the market liquidity of that trading day. And, we also provide at least 24 hours notice of margin changes to give market participants time to assess the impact on their position and make arrangements for funding.

In the case of silver, we have made several changes in margin in recent weeks to adjust to volatility in the marketplace. By the close of business Thursday, May 5, the margin when a position is initiated will be $18,900; throughout the life of that trade, we would expect $14,000 in maintenance margin would be kept at the clearing house. By the close of business Monday, May 9, the margin when a position is initiated will be $21,600, and we would expect open positions to keep $16,000 in maintenance margin at the clearing house. This is similar to when you sign up for a checking account – a bank will typically require a minimum initial deposit and can then stipulate that you maintain a certain balance going forward.

It also is important to mention that the way margins are calculated has to be tailored to the market served. For example, portfolio margins for our listed derivatives are based on the CME Standard Portfolio Analysis of Risk (SPAN). CME SPAN is the industry standard for portfolio margins used by more than 50 other global exchanges, clearing organizations, service bureaus and regulatory agencies. Margins for credit default swaps and interest rate swaps are quite different because those markets behave differently and have different kinds of variables that produce risk.

As an industry-leading clearing provider, our risk management methodologies have to work to protect the markets we serve. Our interest is in providing security for the entire market – no matter which way it moves.

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Investing 101: Intrinsic Value

2011-05-04T19:21:00.000-07:00

Intrinsic Value

1. The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.

2. For call options, this is the difference between the underlying stock's price and the strike price. For put options, it is the difference between the strike price and the underlying stock's price. In the case of both puts and calls, if the respective difference value is negative, the intrinsic value is given as zero.

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Investing 101: Fundamental Analysis

2011-05-04T19:07:00.000-07:00

Fundamental Analysis

Many people rightly believe that when you buy a share of stock you are buying a proportional share in a business. As a consequence, to figure out how much the stock is worth, you should determine how much the business is worth. Investors generally do this by assessing the company's financials in terms of per-share values in order to calculate how much the proportional share of the business is worth. This is known as "fundamental" analysis by some, and most who use it view it as the only kind of rational stock analysis.

Fundamental analysis is the process of looking at a business at the basic or fundamental financial level. This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock. Many investors use fundamental analysis alone or in combination with other tools to evaluate stocks for investment purposes. The goal is to determine the current worth and, more importantly, how the market values the stock. Fundamentals are typically more closely tied to buy and hold investors, whereby day traders use solely technical analysis and most swing traders use both fundamental and technical stock analysis. Technical analysis is specifically important for swing traders with a very short time horizon (that is, a couple of days or just a few weeks).

The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative analysis, this involves looking at

revenues
expenses
assets
liabilities

and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company's future performance. A perfect analyst would look at the balance sheet, income statement, cash flow statement and how they all fit together.

When talking about stocks, fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements.

Fundamental analysis serves to answer questions, such as:

Is the company’s revenue growing?
Is it actually making a profit?
Is it in a strong-enough position to beat out its competitors in the future?
Is it able to repay its debts?
Is management trying to "cook the books"?

Of course, these are very involved questions, and there are literally hundreds of others you might have about a company. It all really boils down to one question: Is the company’s stock a good investment? Think of fundamental analysis as a toolbox to help you answer this question.

It’s all about earnings. When you come to the bottom line, that’s what investors want to know. How much money is the company making and how much is it going to make in the future.

Earnings are profits. It may be complicated to calculate, but that’s what buying a company is about. Increasing earnings generally leads to a higher stock price and, in some cases, a regular dividend.

When earnings fall short, the market may hammer the stock. Every quarter, companies report earnings. Analysts follow major companies closely and if they fall short of projected earnings, sound the alarm. For more information on earnings, see my article: It’s the Earnings.

While earnings are important, by themselves they don’t tell you anything about how the market values the stock. To begin building a picture of how the stock is valued you need to use some fundamental analysis tools. These ratios are easy to calculate, but you can find most of them already done on sites like cnn.money.com or MSN MoneyCentral.com.

Quantitative and Qualitative

You could define fundamental analysis as “researching the fundamentals”, but that doesn’t tell you a whole lot unless you know what fundamentals are. The big problem with defining fundamentals is that it can include anything related to the economic well-being of a company. Obvious items include things like revenue and profit, but fundamentals also include everything from a company’s market share to the quality of its management.

The various fundamental factors can be grouped into two categories: quantitative and qualitative. The financial meaning of these terms isn’t all that different from their regular definitions. Here is how the MSN Encarta dictionary defines the terms:

Quantitative – capable of being measured or expressed in numerical terms.
Qualitative – related to or based on the quality or character of something, often as opposed to its size or quantity.

In our context, quantitative fundamentals are numeric, measurable characteristics about a business. It’s easy to see how the biggest source of quantitative data is the financial statements. You can measure revenue, profit, assets and more with great precision.

Turning to qualitative fundamentals, these are the less tangible factors surrounding a business - things such as the quality of a company’s board members and key executives, its brand-name recognition, patents or proprietary technology.

Quantitative Meets Qualitative

Neither qualitative nor quantitative analysis is inherently better than the other. Instead, many analysts consider qualitative factors in conjunction with the hard, quantitative factors. Take the Coca-Cola Company, for example. When examining its stock, an analyst might look at the stock’s annual dividend payout, earnings per share, P/E ratio and many other quantitative factors. However, no analysis of Coca-Cola would be complete without taking into account its brand recognition. Anybody can start a company that sells sugar and water, but few companies on earth are recognized by billions of people. It’s tough to put your finger on exactly what the Coke brand is worth, but you can be sure that it’s an essential ingredient contributing to the company’s ongoing success.

Intrinsic Value

One of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. After all, why would you be doing price analysis if the stock market were always correct? In financial jargon, this true value is known as the intrinsic value.

This leads us to one of the second major assumptions of fundamental analysis: in the long run, the stock market will reflect the fundamentals. There is no point in buying a stock based on intrinsic value if the price never reflected that value. Nobody knows how long “the long run” really is. It could be days or years.

This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.

The big unknowns are:

1)You don’t know if your estimate of intrinsic value is correct; and
2)You don’t know how long it will take for the intrinsic value to be reflected in the marketplace.

Criticisms of Fundamental Analysis

The biggest criticisms of fundamental analysis come primarily from two groups: proponents of technical analysis and believers of the “efficient market hypothesis”.

Technical analysis is the other major form of security analysis. Put simply, technical analysts base their investments (or, more precisely, their trades) solely on the price and volume movements of securities. Using charts and a number of other tools, they trade on momentum, not caring about the fundamentals. While it is possible to use both techniques in combination, one of the basic tenets of technical analysis is that the market discounts everything. Accordingly, all news about a company already is priced into a stock, and therefore a stock’s price movements give more insight than the underlying fundamental factors of the business itself.

Followers of the efficient market hypothesis, however, are usually in disagreement with both fundamental and technical analysts. The efficient market hypothesis contends that it is essentially impossible to produce market-beating returns in the long run, through either fundamental or technical analysis. The rationale for this argument is that, since the market efficiently prices all stocks on an ongoing basis, any opportunities for excess returns derived from fundamental (or technical) analysis would be almost immediately whittled away by the market’s many participants, making it impossible for anyone to meaningfully outperform the market over the long term.

Fundamental Analysis Tools

These are the most popular tools of fundamental analysis. They focus on earnings, growth, and value in the market.

Earnings per Share – EPS
Price to Earnings Ratio – P/E
Projected Earning Growth – PEG
Price to Sales – P/S
Price to Book – P/B
Dividend Payout Ratio
Dividend Yield
Book Value
Return on Equity

No single number from this list is a magic bullet that will give you a buy or sell recommendation by itself, however as you begin developing a picture of what you want in a stock, these numbers will become benchmarks to measure the worth of potential investments.

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Investing 101: Fibonacci Zone Trading

2011-05-02T14:34:00.000-07:00

Fibonacci Zone Trading

Fibonacci time zones are composed by dividing a chart with vertical lines spaced apart in a ratio adhering to the Fibonacci number sequence (1, 1, 2, 3, 5, 8, 13, etc.). The interpretation of Fibonacci Time Zones involves looking for significant price movement near the vertical lines. Also known as Fibonacci Time Series.

Using Fibonacci levels is most often done in relation to price, but it can be used for time as well. Works with day trading, swing trading, stock trading, forex, futures, eminis, etc.

The graphic tool, The Fibonacci time interval, is a set of vertical lines that are drawn from each other on time intervals, which correspond to the numbers of Fibonacci’s sequence. Fibonacci Time interval is the tool of the forecast because, according to a popular belief, the most significant market events occur through the time intervals corresponding to Fibonacci numbers.

Interpretation of Fibonacci Time Zones involves looking for significant changes in price at or near the vertical lines. Time Zones are most applicable to a long-term analysis of price action and are probably of limited value when studying short-term charts.

Inexperienced users of Fibonacci Studies should consider this type of analysis only when viewing charts that span multiple years. In the example charted on the next page, Fibonacci Time Zones were drawn on the Dow Jones Industrials beginning at the 1982 market bottom. 238 AIQ TradingExpert Pro Reference Manual On the chart, you can see that significant changes in the Dow occurred on or near the Time Zone lines.

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Market Rally at Head Fake at News of Usama Bin Laden death

2011-05-02T09:42:00.000-07:00

Stock Market Head Fake

The supposed market rally, after the alleged murder of Saudi royal family member Usama Bin Laden, after analysis, is nothing short of a head fake. What's my evidence? The complete lack of volume. This is nothing more than the big boys getting the news and placing their orders at the start of the day, hoping that retail investors will fall for the fake and buy in.

After about 2 hours into the day though, normal trading started to resume and prices started dropping. Any retail investor that fell for the head fake will be in for a rude awakening when the big boys pull the plug.

You have been warned.

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Investing 101: Traling Stop Limit Order

2011-04-15T11:49:00.000-07:00

Trailing Stop Limit Order

A trailing stop limit order is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. This order type works the same way as the trailing stop, only instead of a market order being sent to the exchange, a limit order will be sent to the exchange. With this order, you will be able to stipulate the worst price you are willing to accept for a fill. There is no guarantee that you will be filled, though, as the price may gap through your limit price.

A SELL trailing stop limit moves with the market price, and continually recalculates the stop trigger price at a fixed amount below the market price, based on the user-defined "trailing" amount. The limit order price is also continually recalculated based on the limit offset. As the market price rises, both the stop price and the limit price rise by the trail amount and limit offset respectively, but if the stock price falls, the stop price remains unchanged, and when the stop price is hit a limit order is submitted at the last calculated limit price.
A "Buy" trailing stop limit order is the mirror image of a sell trailing stop limit, and is generally used in falling markets.
The main difference is that for Trailing Stop Limit Order, when the Stop Price is passed, the order will be converted into a Limit Order, whereas for Trailing Stop Order, it'll convert into a Market Order.
As a result, Trailing Stop Limit Order carries a big risk, as the order may never get filled if the market price is worse than the Limit Price. As a result, the position can continue falling with no more protection for the position. This makes Trailing Stop Limit Order a very insecure stop loss method, particularly for the extremely volatile stocks that often experience a gap up or gap down in prices. Due to this risk, using Trailing Stop Limit Order to protect a position is not advisable.

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Investing 101: Trailing Stop Order

2011-04-15T11:25:00.000-07:00

Trailing Stop Order

A trailing stop order is a type of a stop loss order. Under the latter, you set a price level, which if reached turns the stop loss order into a market order and requires your broker to sell the particular stock immediately. The selling of the stocks is executed at the best price currently available. Once placed, the order will adjust in price based on your settings that you set upon initiation of the trade. It can be set in terms of actual dollars or set in percentages. A Trailing Stop "Limit" order works the same way as a Stop "Loss" order except that once the order is triggered, it becomes a "Limit order" at a price that you specify instead of a market order. There are "Trailing Stop" orders to help manage risk when buying stocks (going long), as well as when shorting stocks. When protecting your positions when buying stocks, they are sometimes called "Sell Trailing Stop" orders, and when helping protect any short positions you have, they are sometimes called "Buy Trailing Stop" orders.

The reason it's so important to set a trailing stop order below support is that positions moving downward tend to bounce upward (reverse course) at or near their support levels. They may later begin to move downward again, break through support, and continue to move even lower. A clear break below support is dictated by where a position closes, not by intra-day swings. Alternatively, after bouncing off support, a position may continue to move upward, never returning to the support level at all. For purposes of setting a trailing stop order, it doesn't make sense to set a trailing stop order right at support because the position is almost certain to bounce up from that point, possibly reversing course. If you set your trailing stop order below support, it probably won't be triggered unless the position has broken support and will continue downward.

A few points about trailing stop orders:

Stop order that continually adjusts the stop price based on changes in the market price.
A trailing stop to sell raises the stop price as the market price increases, but does not lower the stop price when the market price decreases.
A trailing stop to buy lowers the stop price as the market price decreases, but does not increase the stop price as the market price increases.
In both cases, the stop "trails" the market price.
When the stop price is reached, the order becomes a market order.
The same risk of market orders applies to trailing stop orders.

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Investing 101: Stop Limit Order

2011-04-15T11:05:00.000-07:00

Stop Limit Order

As per the SEC definition: A stop-limit order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is reached, a stop-limit order becomes a limit order that will be executed at a specified price (or better). The benefit of a stop-limit order is that the investor can control the price at which the order can be executed.

A few points about stop limit orders:

The stop price for buy orders is placed above the current market price.
The stop price for sell orders is placed below the current market price.
The stop price does not need to be the same as the limit price.
The trade is not guaranteed to be executed if the stock/commodity does not reach the stop price.
The investor has much greater precision in executing the trade.

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Investing 101: Stop Order

2011-04-15T10:54:00.000-07:00

Stop Order

As per the SEC definition: A stop order, also referred to as a stop-loss order, is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the stop price. When the stop price is reached, a stop order becomes a market order. A buy stop order is entered at a stop price above the current market price. Investors generally use a buy stop order to limit a loss or to protect a profit on a stock that they have sold short. A sell stop order is entered at a stop price below the current market price. Investors generally use a sell stop order to limit a loss or to protect a profit on a stock that they own.

A few points about stop orders:

The stop price for buy orders is placed above the current market price.
The stop price for sell orders is placed below the current market price.
A stop order turns into a market order when the stop is triggered, so the final execution price or time of a stop order is not guaranteed.
The same risks of market orders apply to stop orders.
Traders who use technical analysis will place stop orders below major moving averages, trendlines, swing highs, swing lows or other key support or resistance levels.

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Investing 101: Limit Order

2011-04-15T10:46:00.000-07:00

Limit Order

As per the SEC definition: A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute. A limit order can only be filled if the stock’s market price reaches the limit price. While limit orders do not guarantee execution, they help ensure that an investor does not pay more than a pre-determined price for a stock.

A few points that need to be emphasized about limit orders:

Default order type for all single option, spread and stock orders.
The limit price for buy orders is placed below the current market price.
The limit price for sell orders is placed above the current market price.
Are not guaranteed a fill.
Limit orders are especially useful on a low-volume or highly volatile stock.

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Investing 101: Market Order

2011-04-15T10:40:00.000-07:00

Market Order

As per the SEC: A market order is an order to buy or sell a stock at the best available price. Generally, this type of order will be executed immediately. However, the price at which a market order will be executed is not guaranteed. It is important for investors to remember that the last-traded price is not necessarily the price at which a market order will be executed. In fast-moving markets, the price at which a market order will execute often deviates from the last-traded price or “real time” quote.

A few points that need to be emphasized:

Order used to guarantee an execution, but not guarantee a price or time of execution.
The risk of market orders is that you have no control over what the execution price is.
Aavoid using them with options, especially option spreads.
Be wary of using market orders on stocks with a low average daily volume: in such market conditions the ask price can be a lot higher than the current market price (resulting in a large spread). In other words, you may end up paying a whole lot more than you originally anticipated! It is much safer to use a market order on high-volume stocks.

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Market Biz News is Bullish on Housing?

2011-03-28T16:49:00.000-07:00

BUY BUY BUY Rental Properties

We at Market Biz News advise everyone who can read to buy buy buy housing. If you haven't heard, there's this whole housing bust that is going on. Local banks are tightening their belts and allegedly all of the fraudulent lending practices leading up to 2008 are history. Back are the days when you need 20% down on a 30 year fixed mortgage and a full sweeping credit check. Be that as it may, for those that do past the muster, this is the time to buy rental property. While most NINJA loans shook out what little money the poor had on them, it did a world of good for those interested in real live sound investing, i.e. getting property for cheap after the fall out.

One man's albatross is another man's morning lark.

The housing bust has presented a rare and golden opportunity, for those that can afford it. It essentially produced more homeless in America than ever before. Most Americans however, instead of consolidating their resources and moving back home with parents, still operate under the false pretense that they are owed their own place. You as an investor can take advantage of this stupidity and buy rental property like hotcakes. As fast as you can sign your contracts, would be the speed at which you can rent out those properties.

The new marketing psychology of creating a want and need in the populous has not gone away. For 30 years now the public has been bombarded with the message that they are owed a house and their own private space on credit. You as an investor can call in that ticket and cash in. Buy up those rental properties and hornswoggle every doe eyed middle class homeless person you can lay a finger to.

This is the time to buy buy buy.

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Central Banking America: A Review

2011-03-28T16:30:00.000-07:00

Do We Need Central Banking

The constitution provides ample ways for the federal government to make money, it's called tariffs, i.e. taxing imports and exports. But, big business has such a stranglehold on congress that they gave China most favored nation status, so that stores like Wal-Mart and Target could sell plastic much cheaper than our very own American made products.

There was never a need for an income tax. As it stands now, the only reason we have an income tax is to pay off the money we borrow form the federal reserve.

Without the federal reserve bank, who creates money out of thin air, the u.s. government could go back to doing what it should have been doing, printing it's own money and putting the full faith and credit in U.S. backed currency, instead of federal reserve notes. Income tax, as they stand now, simply pays off the interest of the federal reserve. At every session of congress, the house and senate then turn around and borrow more money from the federal reserve bank.

Without the federal reserve there would be no need for a national deficit. The only reason we have one now, is that we are borrowing our own money from a private bank. Everyone is under the delusion that the federal reserve is a centralized bank, i.e. a government bank. It is neither a federal government owned entity, nor does it have the full faith and credit of the U.S. department of treasury behind it. It is very possible for it to go under.

Do We Need Central Banking?

Ask any fine upstanding citizen and they will say we NEED central banking. Then if you dig deeper, you'll see that they are fully indoctrinated by their own education. The study of economics has been completely arrested and captured by Wall Street. Want a job on Wall Street? Make sure you're educated exactly as everyone else is and believe that Keynesian Economics is your mantra. Above all else, make sure that you, not only, not know anything about the Austrian School of economics, but that you mark it down as untenable and barbaric.

Keynesian economics assures mutually assured destruction of the U.S. and the rest of the world. So the question is do we need a central bank?

The reasons put forth as to why we need a central bank:

1)it issues coins and currency to commercial banks and other financial institutions.
2)it provides short term loans for commercial banks.
3)it controls the credit creation powers of commercial banks(for controlling inflation and deflation in the economy).
4)it acts as a banker to the government(it keeps all of the government's deposits and makes payments on it's behalf).
5)it acts as an adviser to the government(it advises the government as to what kind of economic policy it should adopt).
6)it has major role to play in the money market of an economy(where short term loans are borrowed and lent).
7)it re-discounts bills of exchange for commercial banks.

However, this is where the confusion comes in. We have a department of treasury that can do all of that, that is completely limited by the constitution. The federal reserve bank act of 1913 essentially circumvented the constitution. What the real federal reserve now does is:

It's primary function is to defraud the population for the benefit of the government, and the government's pet favorites, such as the military industrial complex, the bankers themselves (in exchange for giving government a share of the money stolen), and whoever the government thinks it can bribe for votes. It's literally that corrupt. The reason it can go on under our very noses is because most people don't understand it.

What a central bank does is inflate the supply of money or money substitutes, in other words, it dilutes the existing stock of money by printing more pieces of paper and calling it money. This causes a number of serious negative side-effects.

The first one is that it causes a drop in the value of money. Your money is worth less. That's why the dollar has lost 94 percent of its value since the Federal Reserve was started in 1913. Considering one of the main purposes of the federal reserve is to stabilize prices, we must conclude that it has been a complete failure, compared to the absence of a central bank.

The second negative effect is that inflation is government's main means of funding wars which apart from being supremely immoral, are also extremely destructive of wealth. The USA has become a nation of perpetual war in case you haven't noticed.

The third negative effect is that all the central bank is doing is re-distributing wealth. It's not creating wealth - if it was, we would have found a way to create wealth by stamping pieces of paper. We haven't. All it does is take property from people who own it, and give it entire industries who live at the expense of the productive classes. Basically the central bank enables governments to loot the savings of the entire population without having to bother rifling their pockets to do it.

The fourth negative effect is that the newly printed money creates a bubble in the sector where it enters the economy. That's why there was a bubble in the housing sector - because that's where government was injecting the money. The bubble draws capital away from actual productive activity, such as growing food, or making medicine, and channels it into wasteful activity like making condominiums with gold faucets and five bathrooms. This is because the bubble makes activity appear profitable that, absent the manipulation of the money supply, would be seen to be loss-making (think, for example, investing in real estate during the bubble. The profits made by the speculators and financiers come from skimming the wages of millions of people too poor to own their own house, all courtesy of the central bank).

The fifth negative effect is it distorts the capital structure, in other words, it causes massive dislocation between where people *are* and where people would be productively employed. The boom collapses into the bust with its bankruptcies, unemployment, homelessness, family breakdown, suicide, hardship, depression and ruined lives - all while the privileged continue slurping at the trough.

The sixth negative effect is moral. The policy of credit expansion corrupts the entire value system of society. It punishes work, savings, individual responsibility and building a future. It rewards debt, consumption, instant gratification, speculation and political favoritism.

The declared purpose of the Fed is full employment. In the time since the Fed has been on the job, we have had the two biggest depressions and highest unemployment in the history of the world.

The justifications given for the central bank - that it is necessary for government to "manage" the economy, presupposes that government has a competence to manage the economy in the first place. There is neither evidence nor reason to support this supposition.

The reason economists have the gall to try to justify this institutionalized fraud is because most of them rely, directly or indirectly, on the Federal Reserve or the federal government for their privileged existence. They are like the high priests of old preaching to the masses that Pharaoh can do no wrong even while he and his acolytes live at their expense.

Our central bank has not acted in good conscious toward the people of the U.S.. Time and again they have been asked if what they are doing are for the people and to do something about it, to which they unequivocally say "no".

Interest rates on a savings account nationally is now at 0.01% The highest yields are boasting a whopping 1.0% APR.

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Three Words: Invest in Mauritius

2011-03-10T17:22:00.000-08:00

The Mauritius Miracle

At 5% annual GDP growth rate, you couldn't be looking in a better place. With 85% home ownership, free tertiary education and free national healthcare, the nation is truly a financial miracle. The tiny African nation is stumping financial wizards in white and Europeans nations. What is successful in Mauritius however, has proven to be disastrous in the white and European countries, i.e. home ownership and free healthcare.

The robust economy of the tiny African nation is exploding, continually being the miracle that it is. The chief reason behind this, however is not lost on the leading nations: not playing the game. Mauritius' ruling body is not governed and bogged down by private interests like so many other nations, namely the U.S. Also, Mauritius is not given over to the military industrial complex as the U.S. is. To add insult to injury, the US occupies one of Mauritius's offshore islands, Diego Garcia, as a naval base without compensation, officially leasing it from Britain, which not only retained the Chagos Islands in violation of the UN and international law, but expelled its citizens and refuses to allow them to return.

The US should now do right by this peaceful and democratic country: recognise Mauritius's rightful ownership of Diego Garcia, renegotiate the lease, and redeem past sins by paying a fair amount for land that it has illegally occupied for decades.

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Sugar Company Goes Financial?

2011-03-10T16:47:00.000-08:00

Mauritius Sugar Firm Ups Stake in Swan Insurance

PORT LOUIS (Reuters) - Mauritius' leading sugar producer, Harel Freres Ltd. (HFL) said on Thursday it had bought additional shares in Swan Insurance Company, making it the firm's biggest shareholder.

Mauritian sugar firms have sought to widen their revenue sources after the European Union ended its guaranteed price for African, Caribbean and Pacific (ACP) sugar.

The final price cut took effect in October 2009.

HFS Chief Executive Cyril Mayer said his company had increased its stake to 43.8 percent from 26.8 percent in the leading insurance company.

Shares in HFS climbed 2.7 percent to close at 38.50 rupees on Thursday following the announcement.

"The market reacted positively as the sugar company had diversified into financial services," Kishen Nadassen, Senior Research Analyst at Cim Stockbrokers said.

HFS has also expanded into energy production, alcohol production and property development.

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Are Unions Evil

2011-02-24T12:46:00.000-08:00

Are Unions Evil

Look around any media source, the newspaper, magazines, t.v. or the internet, and you'll see a slew of examples of how unions are evil and corrupt and unnecessary. But, in every instance, none of the sources of information about these "evil" unions are ever very scientific in their analysis, nor present any evidence of consequence that directly support or refute their argument. The only thing you get is a lot of rhetoric and "feelings".

Time and again you get anecdotal evidence that a particular union member or non-union member felt bad about the union in question. You get evidence of a female nurturing nature, i.e. feelings. For example: one man expounds how his union was evil because it was not able to bargain for wages, due to unforeseen outside circumstances which conspired against his union. However, upon a cursory glance, you would note that he was a public servant and their wages were set by law. He also threw out any evidence which showed how his union actually made his life much better and what they were able to bargain for.

On a side note, my personal feelings are that public servants should not have unions. Public service should never be able to approach the wages and benefits of the private sector. The current public system is upside down when working off of tax payer dollars generates more income than the private sector which has to actually work for its dollars. We should discourage people working for the public sector, not encourage it.

Private labor unions are always seen as evil, because corporate America is always pointing out obscure instances where a union did something untoward. They leave out such gems of information like:

the 16 hour work day,
unpaid leave,
unpaid hour increases,
the era of no minimum wage,
no benefits of any sort,
shooting workers in the face that tried to organize
firing at will, regardless of years served on the job
no retirement plan whatsoever

The problem most of Americans have understanding the wage issue is that they simply jump on the bandwagon when they say "oh look at their salaries". Pure and simple, EVERYONE else is UNDERPAID. The depreciation of the dollar has driven down wages de facto for about a century. Then, if privately run unions do not wish to take it lying down and fight to have a competitive wage, vs dollar depreciation, it is not the union that is "evil", it is our federal government, stupidly borrowing from the federal reserve bank, at interest.

Don't point to the unions as a source of consternation, point to our own ignorant government for giving the federal reserve a hand out, i.e. borrowing from a private bank, at interest, when they could just as easily print their own currency. However, it seems that every president that has tried to coin his own money has wound up dead.

Noone can gainsay that labor union members, who normally represent skilled labor industries, do not actually work at very hard jobs. Besides, when the dust settles, you'll all come to the same realization: confidence in a fiat currency is misplaced, the only measure of true wealth in this day and age are assets and cash flow. And, a job is not an asset, nor is it cash flow.

What is amazing is that people make the argument that unions, somehow, make inflation. This has to be the most heinous pile of fish corpse ever put forward as an argument against a union. Inflation is not simply rising prices. It amazes me that so many Americans have no concept of what inflation actually is. None of them ask the very simple question of why do prices rise? There is one answer and only one answer as to why prices rise. No other factor contributes to a fluctuation in prices. Prices rise when the value of the dollar falls. That being said, the next obvious question comes up. There is no other way that the value of the dollar can fall except for one reason and one reason alone. The value of the dollar falls, in realistic terms and not theoretical terms, due to a flooding of more dollars into the economy, i.e. money printing without value being added to it. Who is guilty of this printing? In a simple word, Congress. A more precise explanation of why money is being printed is that the privately owned, federal reserve bank, which started in 1913, lends money to Congress at interest. The interest is the handout that was mentioned above. There is no reason Congress needs to borrow money at interest. Congress has the power to coin its own money. It is this interest that is bankrupting the country. In any event, this process of money printing is what causes inflation, not unions. Unions have nothing to do with inflation.

Finally, about high wages. Union wages are not high. The value of the dollar is continually being devalued on a daily basis, and has been for nearly a century with the advent of Congress borrowing money from the privately owned, federal reserve bank. When the value of the dollar decreases, wages are automatically lowered. You cannot then say that unions, who bargain to commensurately stabilize wages versus the value of the dollar, are somehow asking for something more than what is owed to them.

For example: if you were earning $10.00 an hour and the dollar fell by 10%, you should be making 10% more to compensate for that fall.

By 1929, the not-really-federal reserve had stolen away 42.1% of the dollar's purchasing power. By 1950, that amount had swelled to where 58.9% of the dollars purchasing power had been stolen. Even more importantly, thanks to Keynesian doubletalk, the American public had the "Big Lie" about inflation deeply seated in both textbooks and popular media.

The Big Lie is that prices go up. They don't. The purchasing power of your dollars goes DOWN.

By 1975, the dilution of purchasing power had sucked 81.6% of the dollar's purchasing power away - meaning that something which cost $1 in 1913 when the banksters took over (along with their free lunch/deficit spending pals in congress) was up to $5.43.

Then things got worse.

By 2000 the dollar's purchasing power was diluted 94.25% from where it started in 1913. What had cost a single dollar then was up to $17.39.

This morning, if we assume 5% inflation for 2009 year-to-date, what cost a single dollar in 1913 is up to $22.61. The dollar is buying 4.42% of what it did in 1913, or more clearly its purchasing power has dropped 95.57%

Lastly, people get exchange rate confused with inflation. It is very easy to understand. Exchange rate is the dollar versus another fiat currency. Inflation is an internal measure of buying power inside our own country. Today's dollar is worth 2 cents versus the dollar in 1913, the year the privately owned federal reserve bank was created.

So, if a union member makes $30.00 an hour, let's compare that to the 1913 wage - ¢ 60 an hour. Now for those of you who happen to not do research of wages back then, I'll enlighten you. A hotel porter in 1919 made ¢50 an hour. So an autoworker making ¢60 an hour is actually less than what he should be making. Surely an autoworker should make more than a hotel porter. One builds a car, the other one carries luggage. Just an interesting side note though. The work week in 1919 was considered to be 60 hours a week. That was an average work week in America. And, that was considered being a really decent employer. I believe a lot of thanks is owed to unions for the things we all now take for granted.

How many salaried workers suffer from a lack of being able to b ea part of a union and have miserable working conditions this very day: uncompensated extra work hours; no commensurate benefit appreciation for extra hours worked; uncompensated home work. The list goes on. So while we're all crying for the corporation, let's keep things in real perspective. The average American worker today, outside of a union, makes less in wages than a hotel porter did in 1919, when accounting for the depreciation of the dollar. You must take the depreciation of the dollar into account. You cannot say you have a better standard of living these days without comparing it to something. The only thing you can compare it to is the past. Evidently the cost of living today is well above the means of the average worker.

Are unions evil? I think I pointed out who is actually evil.

So for all of those crying that union workers make too much money, do some math before your little brain bursts and the corporate shills tell you what to think.

The reality is 90% of Americans are UNDERPAID. Go ahead and multiply your hourly wage [or convert your salary to hourly] and then multiply it by 2 cents, i.e. 0.02. Then compare your wage to the hotel porter's meager 50¢ and see how you fair.

These are real numbers, not "feelings". "Oh I feel unions are evil." What do the numbers say? I think if every American did the math they'd be mad as hell at their wages.

"We're the most prosperous nation on the planet" I always ask, "are we?" By who's calculation, are we the most prosperous nation? You've been had, hoodwinked, bamboozled, run amuck.

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Time is Not Money, Money is Time

2011-01-21T11:47:00.000-08:00

Money is Time

Benjamin Franklin

Benjamin Franklin said "Time is Money". While I am sure mister Franklin meant well, and for most even conceiving of money and time in an exchange relationship, was a revelation they probably had never thought of, it is time to put the quote to rights. Time is not money. Or, let me clarify. If the object of your life is to live a content life and make enough money to do so, time is money is not for you. If you wish to live a subservient life and have a lifestyle dependent upon the whims of someone else, then time is money is your bread and butter, life philosophy. It is patently obvious that those who have no concept of the real relationship of time and money are doomed and destined to live a life of servitude. But, once you wrap your head around the idea that money and time are somehow related, you will immediately come to the realization that money is time and not the reverse. You can buy time, and conversely, you can buy money.

What does it mean that time is money? Well for the lower class, they trade their time for money. They measure their wealthy by the number of hours they can work for someone else to pay them. Understand the pure and simple, complete, all-encompassing definition of that phrase. Anyone that trades their time for money is in that category: a fast-food worker; a mechanic; a lawyer; a doctor. Because once they are done with their task and are paid, they have to put in more time to generate more money. They cannot go back and get more money for those same house that they worked. They cannot double, triple nor even gain 10% more money from that lost time. They have to change their wealth building model to generate more wealth in the same frame of time. They have to come to the realization that money is time.

What is money is time? What is this wealth building concept? It is quite easy to understand on an extremely large scale. The concept is also simple, as was time is money. And, it is this:

you generate wealth by making a set of decisions that set things in motion that continually increase or generate money for you.

For instance, if you purchase a business and someone else runs it for you, you have made a decision that sets in motion something that generates money for you. If you were to purchase a rental property and rented it out to someone, you have made a decision that set in motion something that generates money for you. If you were to hire someone to work for you that generates money, you have made a decision that set in motion something that generates money for you.

You are no longer trading time for money, you are now trading money for time, i.e. time for you to do either other things to make more money, or time for you to blow off. You are spending money to generate ... [drum roll please ] AN ASSET.

Most Americans have no concept of what an asset is. By definition an asset generates money by you doing absolutely nothing more than owning it. You can put forth effort for that same asset to generate even more money, however it does not change the status of the asset's ability to generate money by itself.

Many charlatans confuse Americans into thinking that their personal home is an asset because, due to the devaluation of the dollar, their property can be sold for more money at a later date, than what they paid for it. If those same Americans were to sit down at their kitchen table with stats showing the dollar devaluation, inflation charts, amortization charts and factor in all expenses, including taxes, they would immediately see that they are not making any money on their homes, and it is not an asset. Sadly, for someone else, their home is an asset, but not for the home-owner.

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An Investment Banker Explains the Subprime Debacle

2011-01-09T21:26:00.000-08:00

Understanding the Subprime Catastrophe

I will broach no more insult to Wall Street for its handling of the sub-prime crisis. They have, with much aplomb, steadfastly applied the best and brightest to controlling and handling the entire sub-prime catastrophe. The fact of the matter is that millions of Americans were at fault. They sneakily signed mortgages for immense houses, at ridiculous interest rates, all the while being completely destitute and unemployed to boot. I say we put all of those fraudulent buyers behind bars. They are, without a doubt, the most base of humanity. They dare ask for a handout after signing these ARM loans that they connived their way into. If it were not for Hank Paulson and Tim Geithner, shelling out untold trillions for huge banks, to halt their failure, since they are obviously too big to fail, we would be in a complete recession of the economy. Finally, these charlatans, offered to pay 30% or even more for the same house that only just sold, on the market, not months before. It is these folks that we all owe the loss of our 401k investment crashes to. How many lost money on the stock market, in their retirement funds, when the stock market is supposed to only go up. These idiot borrowers are the cause of all of this mayhem. They then complained to the government that they over-payed for their houses. And, that they were upside down in their houses. It is their own fault for forcing good honest realtors and home inspectors to have to raise the home price at their request.

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How to Understand the Credit Crunch (video)

2011-01-09T20:56:00.000-08:00

The Credit Crunch in a Nut Shell

It goes without saying that the most sophisticated and intelligent people are located on a few blocks we all like to call Wall Street. Under the circumstances noone can possibly understand all the goings on, that happen on that stretch of land on the planet. Who can blame you really? You aren't as bright, not as well seasoned, nor are you as morally pure as say, a Wall Street investment banker. They are, without a doubt, the most astute beings on the planet. To say that they were taken unawares by credit crunch, simply begs the question of your own lack of understanding of the crisis. They most certainly understood and foresaw everything that was going to happen.

On the one hand, we had those thousands of smaller banks who were clandestinely handing out predatory loans. It is only fitting then that the larger banks and financial institutions, who never practiced such morally reprehensible business, be rewarded with tax payer money, so they could buy up all those thousands of banks to stop their scandalous business practices. It is reprehensible that ma & pa banks and local credit unions spread their ilk across the land handing out dirty loans to an unsuspecting public, all the while telling them that their ARM loans were fixed rate mortgages.

It goes without saying that, this is exactly why the U.S. government handed out billions to credit card companies, to protect the citizens from these tiny monsters that were providing capital to the citizens at insanely high interest rates. We can thank the government that no one's credit cards were closed or limits lowered. Huge financial instutitions thankfully were never deeply indebted. I mean, we are talking about the best and brightest here. And, they, of course, were never over-leveraged to any degree. It was all those tiny lenders that had made insanely risky loans, and even worse, compounded the matter by engaging in financial mayhem like mortgage-backed bonds, leveraged-buyout loans and high-yield, or junk, bonds. We are thankful the government had the foresight to continue with the trickle down theory policy of spreading the tax payer wealth. For some reason the government continues to borrow money at interest from the Federal Reserve Bank, at interest, instead of printing its own money. I mean, they're they federal government, they have a treasury department. But, it's all the fault of those thousands of small banks and credit unions that conspired to raise the U.S. debt by forcing our policy makers into giving out tax payer money to banks too big to fail and credit card companies.

I thank God for people like Nancy Pelosi and Harry Reid, who are safeguarding the purse strings of America. And, with Paulson and Geithner at the helm of the piggy bank, we can sleep soundly.

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Who Oversees the Federal Reserve Bank

2011-01-08T21:44:00.000-08:00

Who Regulates the Fed

In a word, noone. Officially, we have the propaganda that the federal reserve system is a quasi-governmental entity, but with semi-private privileges. The explanation however goes in loops and tries to circumnavigate a very concise explanation. No one in government oversees the Fed. No one in government can overrule the Fed. No one can hold accountable the Fed. No one in government can bring to justice the Fed. In fact, the Fed is untouchable. In fact, the Fed is above the law. In fact, the Fed operates with impunity.

The Official Explanation of Who Regulates the Federal Reserve Banks

The Federal Reserve is a unique legal entity that can be described as an independent government agency with member bank participation. It is organized with a 100% government agency at the top (the Board of Governors), and branches beneath them that are organized like corporations with member banks as shareholders.(Ref: http://www.federalreserveeducation.org/fed101/structure/ , http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#4 )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level; it is a government agency. You can confirm this from a number of government sites that list it as a government agency (e.g. http://www.whitehouse.gov/government/independent-agencies.html) Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

The 12 branches can be considered highly regulated private corporations. Member banks are required to buy shares in their branch. Each bank has one vote. They can vote for 6 of their 9 board members, the other 3 are appointed by the Board of Governors. Though the branches are called non-profit, the member banks get a standard 6% dividend on their shares. The remaining 'profit' is turned over to the Treasury at the end of the year.

For confirmation on this, check out how Hoovers classifies them:
http://www.hoovers.com/free/search/simple/xmillion/index.xhtml?query_string=Federal+Reserve&which=company&page=1&x=91&y=2# HooversCompanyNameMatchesH2

And those shares that the member banks own? Some say there are so many restrictions that it falls short of true ownership

From Edward Griffin, noted anti-fed intellect (http://www.bigeye.com/griffin.htm)

"It's a hybrid, part corporation and part government, part private, part government.
..
Every bank that's in the system is an owner of the Federal Reserve... But that's as far as it goes because those stock certificates do not carry with them any of the attributes of private ownership. For example, the holders of these certificates cannot sell them. If you can't sell something then you don't really own it, that's one of the tests of ownership, your ability to dispose of it. You cannot sell it. Furthermore the larger banks put up more money than the smaller banks, it's a ratio to their assets, so the larger banks have more stock certificates in the system than the small ones and yet regardless of the number that they hold, every bank has just one vote. There's another violation of the principle of private ownership. Furthermore that vote doesn't buy them anything. They can't vote for anything of substance; they cannot vote for their national management which is the most important thing, isn't it? The board of directors and chairman of the Federal Reserve System are appointed by the President, they're not elected by the banks that are part of the system, the President does that."

But, let's go over a couple of things in this explanation. Bear in mind what I said earlier, that noone can oversee them.

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress

This is a red herring. It assumes that because of some appointment power, that the government has some authority over the bank. On print that looks great. In practice, this is nothing more than Napoleon making the Pope crown him. The "appointees" are hand picked and given to the president and congress. They wouldn't dare choose anyone but those who they were told to choose.

It operates per it's charter and laws set by congress. it is overseen by congress.

Again, this looks great on paper, but in practice it is just not done. No congressman can sit in on any federal reserve meeting. Congress is not advised of the goings on of the meetings. In fact, congress is told, quite frequently, to shut-up asking about the meetings. Not only that, but should congress hand the Fed something, congress is well aware that they cannot then ask about the very object they handed to the Fed.

Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

If I sent a simpleton to your house to borrow your sugar, and then fed the simpleton cookies, made from the very sugar I had him borrow, can it be said that the simpleton has not profited from the sugar? Much is made of this clause that the Fed members cannot have interest in a private bank. But, what is not said that there are many "non-private" banks. In fact, as we'll see, the board holds interest in the Federal Reserve Banks.

Member banks are required to buy shares in their branch. Each bank has one vote. They can vote for 6 of their 9 board members, the other 3 are appointed by the Board of Governors. Though the branches are called non-profit, the member banks get a standard 6% dividend on their shares.

This might look standard until you valuate how much profit the Fed makes each year. And, again the board does in fact hold interest in a bank, just not a private one. Where do the Fed profits come from? The Federal Reserve Bank makes profits off of the taxpayers of America.

And those shares that the member banks own? Some say there are so many restrictions that it falls short of true ownership

Who cares about the restrictions of ownership if you have 6% of every dollar ever printed in America. This is just another red herring. The "restrictions" in question forbid the holder of the shares from being able to sell them. But, correct me if I am wrong but, who on the planet would be insane enough to sell a share in the monetary system of America? It is literally like having a share in God, with a restriction that you cannot sell a share in God. What exactly would you trade a share in God for? It is literally, by definition, the logical fallacy of false dilemma. This line of "reasoning" is fallacious because if both claims could be false, then it cannot be inferred that one is true because the other is false.

I have shares in the Federal Reserve Bank
I cannot have a conflict of interest when dealing with taxpayer money, which the bank makes profits off of
I cannot trade my shares
therefore I must be trustworthy and have absolutely no conflict of interest

This was literally drafted into the article creating the Fed, to confuse people and give a sense of propriety to an organization that is literally pillaging the entire country.

We literally have a private bank that is funneling money through it's coffers and then doling it out to its friends, its own banks.

If it can be believed, the bank has had people killed that came against it. Some even say Lincoln and Kennedy were shot by the bank.

Bankers killed Lincoln: In this conspiracy scenario, John Wilkes Booth was the "hit man," the "hired gun" for the powerful British bankers, the Rothschilds. According to this assassination theory, the Rothschilds had offered loans to the Lincoln administration at very high interest, assuming that the Union had no choice other than to accept their outrageous terms. The frugal and resourceful frontiersman spirit in Lincoln caused him to refuse the Rothschilds' offer and to acquire the necessary funds elsewhere. Although his refusal only stung their sense of pride and greed, the true reason for their planning his assassination was their knowledge that after the war Lincoln's policies indicated a mild Reconstruction of the South that would encourage a resumption of agriculture rather than industry. Additional post-war policies destroyed the Rothschilds' commodity speculations. With Lincoln out of the way, the Rothschilds planned to exploit the weaknesses of the United States and take over its economy.

"...Predictably Lincoln, needing money to finance his war effort, went with his secretary of the treasury to New York to apply for the necessary loans. The money changers wishing the Union to fail offered loans at 24% to 36%. Lincoln declined the offer. An old friend of Lincoln's, Colonel Dick Taylor of Chicago was put in charge of solving the problem of how to finance the war. His solution is recorded as this. 'Just get Congress to pass a bill authorising the printing of full legal tender treasury notes... and pay your soldiers with them and go ahead and win your war with them also.'

When Lincoln asked if the people of America would accept the notes Taylor said. 'The people or anyone else will not have any choice in the matter, if you make them full legal tender. They will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution.'

Lincoln agreed to try this solution and printed 450 million dollars worth of the new bills using green ink on the back to distinguish them from other notes. "The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power. The solution worked so well Lincoln was seriously considering adopting this emergency measure as a permanent policy. This would have been great for everyone except the money changers who quickly realised how dangerous this policy would be for them...."

On Kennedy:

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.

When President John Fitzgerald Kennedy - the author of Profiles in Courage -signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency -money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 [the full text is displayed further below] gave the Treasury Department the explicit authority: "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the United States of America.

"United States Notes" were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a "Federal Reserve Note" issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a "United States Note" from the U.S. Treasury issued by President Kennedy's Executive Order. They almost look alike, except one says "Federal Reserve Note" on the top while the other says "United States Note". Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper "currency" circulating in 1999 are Federal Reserve Notes.

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new "money". Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

In the intelligence community, there is a saying, "In the business of covert ops, there are no such things as coincidences.". Putting forward a very easy scapegoat for the public to see is the "birdie" the photographer uses to placate the public. Keep your eyes on the conveniently placed presidential assassin that suddenly appeared on the doorsteps of the FBI. Pay no attention to the man behind the curtain. It could not possibly be that these presidents sought to overthrow the banking power houses and ended up dead by their hands.

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Motivation: Never Let Them See You Sweat

2011-01-01T16:56:00.000-08:00

Don't Sweat the Small Stuff

Never Let Them See You Sweat

You've seen it in movies and in any mall with poor people, they tell their sons that "big boys don't cry." I would agree that big boys don't cry, but my definition of a big boy is a 6,000 word vocabulary. Once your kid has a 6,000 word vocabulary, more than likely he will stop crying on his own, because he can express nearly everything he wants, feels and needs in words you can understand and he can express. For proper child development, one needs to not only feel one's emotions, but have a full outpouring of it. That's how a boy becomes a man.

It is more than likely, that if your child were to acquire an immense vocabulary, school would become boring and you would never have to worry about him making bad grades, getting into petty arguments with his siblings or generally getting into trouble. His need to express himself with emotions would simply fade as his vocabulary expands. But, how does this apply to adults, since adults, unlike children, do not learn 3,000 new words each year. How does an adult master his emotions?

An adult has to consciously think about his emotions. Don't let them see you sweat means exactly that, being in control of oneself. The first lesson any martial arts teacher teaches you, isn't about throwing a punch, it is about taking the emotion out of a fight. Why would you need to not have emotions in a fight? Because emotions are erratic and can, in some cases, get you killed. Mastering yourself means that you are also not erratic in business and, in some cases, getting killed.

Read any stock trading book and the first thing it (should) talks about is taking the emotion out of trading. Once every trade is just receiving input, placing the order, seeing if the data lines up with the expectation, getting out if the expectation isn't met or getting out once the expectation is met, then you can call yourself a real trader. Emotional trading leads to things like going all-in in a poker game.

But there is more to mastering yourself than just for the sake of being a decent day trader. Mastering your emotions should apply to your every day life, universally. For instance take the government, you so unwittingly trust your life with, who is fleecing you, for the sake of its financial friends. Most people who arrive at the realization do nothing for fear that they might lose "something." They have fear. All the while, egregious erosions in personal. freedoms are signed away in such decrees as the Patriot Act. Still noone reacts because they are still afraid, meanwhile their neighbors are being carted away into secret underground bunkers and held without so much as a phone call to an attorney. If you master your emotions, you'd know to make that phone call to the right person to get that repealed, along with the rest of the ridiculous mess that pretends to be government "for" the people.

Don't let them see you sweat means that you can get ahead in both life, and in business. So many women blow of men, because they come across as lacking self assurance. Mastering emotions means that you take out the emotional reaction that society has ingrained into your brain to feel that a pretty woman is something that is unattainable. If you've mastered yourself, you understand that a pretty woman is something you would want to date, instead of wanting to shun. She's attractive, so she can attract guys. That's why she's pretty. The same goes for business. So many people readily advise you that you cannot do business without first present this box inside of this box inside of this box. In the meantime, those who are completely smashing the boxes and doing whatever the hell they want are forming fortune 500 companies as we speak. Mastering yourself means that you take the advice from those with limited knowledge, but see it as limited knowledge and not interpolate it as scientific natural laws, the gospel according to Mark Faber. The IRS tax code is 44,000 pages not because the washington insiders just had a spark of writing genius or were overly prolific. It is that large because company XYZ tried to make sure company ABC didn't benefit from the shenanigans XYZ did to get ahead and made sure it got in the code.

Finally don't let them see you sweat affords you the opportunity to notice the other guy sweating. Once you have mastered yourself, you can then turn the tables on your competition. Got a person that always makes you feel sheepish in their presence, master your emotions and witness how they are actually putting on airs to hide their own shortcomings. Does your father in-law give you a hard time all the time? Master yourself and realize that he is overcompensating for the regret that is his own life.

How many times have you sat across from your opposition at a meeting and they have made bold statements like:

we're your only option
you have no other choice
we could go somewhere else
this is the best deal you're going to get

Really? Instead of panicking and signing your life away or life savings, give that document a careful read through. More than likely you'll find out: how they're screwing you; how many times they're screwing you; and the 2 cents to call someone that doesn't care. Master your emotions instead and go shop around and you can come back to that conference table and tell them where to shove their offer.

So many people are put on the wrack at their own job. The company does not want to pay good for good work. Instead of lying down, come time for promotion, see it as a dedicated time for you to look for "options". If you go look around to other businesses to see what they can offer you, given that you're already working and earning a salary, more than likely you'll find a different company that would be willing to pay you adequately. How valuable would that be when you walked into your yearly salary review? Master your emotions and realize a job is simply for money. You owe noone anything for paying you for your services. If they do not pay you an equal or better amount than an offer you got (in writing of course), like a bad trade, walk away from that job and take the best offer.

Most often the rock star companies are rock stars because they pay their employees like rock stars and they produce rock star work. Master your emotions and go get the best possible offer for your skills. Or if you're the one making the deals, master your emotions and shop for the best deal. Who cares if the son of XYZ corp, it's just business. So many times people get emotional while doing business and someone else rides on your coat tails hoping your company will inadvertently help them. You are responsible for your own bottom line. Master your emotions and give that contract to that small business owner, because he came in with the best bid.

The country is going to hell in a hand-basket because some wise guys sold a bill of goods to congress and kept themselves nice and fat when they should have been thrown on the street like bums. Congress did not master their emotions and fell for the biggest ponzi-scheme this side of the birth of baby Jesus.

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Stock Index Futures Make Investors Bullish

2010-12-21T10:01:00.000-08:00

Stock Index Futures Signal Gains, Adobe Eyed

PARIS (Reuters) by Blaise Robinson – Stock index futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.36 percent, Dow Jones futures up 0.32 percent and Nasdaq 100 futures up 0.27 percent at 0928 GMT (4:28 a.m. EDT).

Adobe Systems Inc (ADBE.O) will be in focus after it issued an earnings forecast sharply above Wall Street projections, contrasting sharply with a pessimistic outlook three months ago when it was concerned about the weak economy. Its shares surged more than 7 percent afterhours, and were up 4.4 percent on Frankfurt (ADBE.F) on Tuesday.

Genzyme Corp (GENZ.O) held its second investor meeting in two months to argue that its most promising experimental drug will capture five times the sales that Sanofi-Aventis (SASY.PA) has assumed in a hostile $18.5 billion takeover bid.

Dutch chemicals group DSM (DSMN.AS) said on Tuesday it would buy Martek Biosciences Corporation (MATK.O) for $1.087 billion (829 million euros) in cash to specialize further in the niche food nutrition industry.

Constellation Brands Inc (STZ.N) is close to selling most of its non-U.S. wine portfolio, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Alpha Natural Resources (ANR.N) has made an offer for rival U.S. coal miner Massey Energy (MEE.N), the Wall Street Journal reported, citing members of Massey Energy's board.

Toronto-Dominion Bank (TD.TO) is close to an agreement to buy Chrysler Financial from private equity firm Cerberus Capital Management (CBS.UL) for $6.3 billion, a source familiar with the matter said on Monday.

Jabil Circuit Inc (JBL.N) posted market-beating first-quarter results, helped by strong growth across segments, and forecast a robust second quarter, sending shares of the electronics manufacturing services provider up 3.5 percent in trading after the bell.

U.S. diversified manufacturer 3M Co (MMM.N) denied on Monday a published report that its top executive, George Buckley, was seeking to step down before his contract expires in early 2012.

Oil prices rose for the third straight session on Tuesday, supported by cold weather in the United States and Europe, seasonal gasoline demand and an expected drop in U.S. crude stocks.

European stocks were up 0.7 percent in morning trade in thin volume, with record-high copper prices helping mining stocks while investors brushed aside Moody's warning it may downgrade Portugal's debt rating.

On the earnings front, ConAgra Foods (CAG.N), Carnival Corp. (CCL.N), Cintas Corp. (CTAS.O), Nike (NKE.N) and Red Hat Inc (RHT.N) are among companies expected to report results.

U.S. stocks tacked on further gains to push the S&P 500 to a two-year high on Monday, continuing a steady upward march investors believe will continue in 2011.

The Dow Jones industrial average (.DJI) dipped 13.78 points, or 0.12 percent, to 11,478.13. The Standard & Poor's 500 Index (.SPX) added 3.17 points, or 0.25 percent, to 1,247.08. The Nasdaq Composite Index (.IXIC) rose 6.59 points, or 0.25 percent, to 2,649.56.

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Wall Street Not Giving Up on a Bullish Market

2010-12-21T09:43:00.000-08:00

Merger Action, Earnings Push Stocks Higher

By Chuck Mikolajczak NEW YORK (Reuters) – Stocks rose on Tuesday as solid earnings and a new flurry of merger action laid the foundation for a steady upward trend in the equities market that investors believe will continue.

U.S. stock indexes hit new highs after topping key technical resistance levels. The S&P 500 has rallied 6.1 percent to two-year highs this month and was up around 22.5 percent from closing lows this year.

Analysts said equity markets were also lifted as fund managers reallocated cash to equities from fixed income and reduced cash positions.

"The psychology has changed. With interest rates coming up, the bond market is telling you, you don't want to be in bonds if the economy may be improving next year. So a lot of that money is starting to move into the stock market," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"This is your Santa Claus rally. Everybody is coming in, you are clicking on all eight cylinders here."

The Dow Jones industrial average (.DJI) gained 40.31 points, or 0.35 percent, to 11,518.44. The Standard & Poor's 500 Index (.SPX) rose 5.26 points, or 0.42 percent, to 1,252.34. The Nasdaq Composite Index (.IXIC) advanced 12.65 points, or 0.48 percent, to 2,662.21.

Guide to Private Equity Fund of Fund Managers

Adobe Systems Inc (ADBE.O) jumped 4.6 percent to $30.53 after an upbeat forecast in contrast with a pessimistic outlook three months ago. For details, see [ID:nN20202319]

U.S. coal miner Massey Energy Co (MEE.N) rose 1.3 percent to $52.49 after the Wall Street Journal reported that rival Alpha Natural Resources Inc (ANR.N) offered to buy it. Alpha Natural climbed nearly 3 percent to $55.15.

Further supporting rising stock indexes were recent technical signals indicating the march upward could continue.

The S&P 500, which has gained in each of the last three weeks, broke through the 61.8 percent Fibonacci retracement of the 2007-2009 bear market slide earlier this month.

Technicians say the next stop is the 76.4 percent retracement at 1,362.

John Brady, senior vice president at MF Global in Chicago, expects the market to move either slowly sideways or higher as S&P 500 works off an overbought condition shown in the seven-day and nine-day Relative Strength Index (RSI).

"It's a grind trade higher on not a whole lot of volume," he said. "A trade between 1,250 and 1,230 (in the S&P 500) seems really well contained, and any profit-taking will probably be modest."

The RSI provides a measure of higher closes to lower closes over a given trading period and is closely watched by traders.

In other individual movers, Martek Biosciences Corp (MATK.O) surged 35 percent to $31.54 after Dutch group DSM (DSMN.AS), the world's largest vitamins maker, agreed to buy the maker of U.S. baby food ingredients.

Jabil Circuit Inc (JBL.N), the electronics manufacturer, advanced 10 percent to $19.38 a day after it reported better-than-expected quarterly profit and forecast a robust second quarter.

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CarMax Reports Quarterly Profits for 3Q

2010-12-21T09:27:00.000-08:00

Summary Box: CarMax 3Q Net Income Up 10%

By The Associated Press - PROFITS UP: Used car dealership chain CarMax Inc. said its fiscal third-quarter net income rose more than 10 percent to $82.4 million, or 36 cents per share, in the three months that ended Nov. 30, up from $74.6 million, or 33 cents per share.

DOUBLE-DIGIT GAINS: Revenue rose 23 percent to $2.12 billion on strong used car sales and higher prices. Sales at stores open at least one year increased 16 percent during the quarter.

IT'S THE ECONOMY: Used car sales have been strong all year as buyers look to cut costs out of job security fears, and the demand has pushed prices to record levels.

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New Jersey State Supreme Court Orders Mortgage Lenders to Answer for Fraudulent Foreclosures

2010-12-21T09:14:00.000-08:00

Mortgage Lenders Ordered to Appear in NJ Court

By DAVID PORTER, Associated Press NEWARK, N.J. – Six lenders who have combined to file nearly 30,000 foreclosure actions in New Jersey this year face the possible suspension of their operations next month under a court order announced Monday by state Supreme Court Chief Justice Stuart Rabner.

The action follows a report submitted to the Supreme Court that, citing depositions and court filings in other states, paints a picture of systemic abuses in the filing of foreclosures that include so-called "robo-signing," in which employees signed hundreds of documents without checking them for accuracy.

In one instance cited in an administrative order, an employee of OneWest Bank, formerly IndyMac Federal Bank, said in a deposition that she signed 750 documents a week, taking no more than 30 seconds per document and relying on others to check the documents' accuracy prior to signing.

Employees testifying in other depositions said they were authorized to sign documents despite having no background in the mortgage industry and little or no understanding of what they were signing.

OneWest and five other lenders were ordered to appear in state Superior Court in Trenton on Jan. 19 to demonstrate why the state shouldn't suspend their foreclosure actions. The others are Ally Financial, formerly GMAC; BAC Home Loan Servicing, a subsidiary of Bank of America; JP Morgan Chase's Chase Home Finance; Wells Fargo Financial New Jersey and CitiResidential Living, a subsidiary of Citibank.

"It's important that the judiciary ensures judges are not rubber-stamping documents that may not be reliable," Rabner said in a conference call Monday.

He said he believes New Jersey is the first state to take such action against mortgage lenders, a view echoed by Ira Rheingold, an attorney and executive director of the Washington-based National Association of Consumer Advocates, which has tracked the foreclosure crisis.

"To have a state Supreme Court haul in these lenders, it's something I have not seen reach this level," Rheingold said.

Spokespeople for Bank of America and Ally Financial said the companies wouldn't comment on the order. Wells Fargo spokesman Jason Menke said the company "intends to comply with the New Jersey court's order and demonstrate why the foreclosures scheduled in New Jersey should move forward." The other companies didn't immediately respond to e-mail or phone messages seeking comment.

Rabner announced that 24 other lenders will be required to submit documentation to a special master, retired state Superior Court Judge Walter R. Barisonek, to demonstrate that there are no irregularities in their handling of foreclosure proceedings. Rabner stressed that that group of lenders has not been accused of wrongdoing and was selected because each had processed at least 200 foreclosures this year.

The six lenders scheduled to appear in court next month have processed more than 29,000 foreclosures in New Jersey this year, Rabner said. The other 24 have filed about 16,000. The total represents nearly three-quarters of the 65,000 foreclosures filed in New Jersey, a number that has tripled since 2006, Rabner said.

More problematic, he said, is that 94 percent of the foreclosures have been uncontested, often due to homeowners' inability to afford legal counsel.

"That means there's no meaningful adversary process to protect them," Rabner said.

The Supreme Court on Monday also issued an order requiring attorneys in all residential foreclosures to certify that lenders have reviewed documents for accuracy and confirmed the accuracy of all court filings.

Homeowners in several states have filed lawsuits recently alleging their homes were foreclosed on even though they were up to date on mortgage payments. In some cases, banks carted away belongings and changed the locks on the wrong homes.

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SEC Investigates Mark Hurd for Insider Trading

2010-12-21T07:14:00.000-08:00

SEC Investigating Hurd's Exit from HP: Source

SAN FRANCISCO (Reuters) by Gabriel Madway – Regulators are looking into the events surrounding Mark Hurd's abrupt exit as chief executive of Hewlett Packard Co, a source familiar with the matter said on Monday.

The SEC's probe was first reported by the Wall Street Journal, which cited anonymous sources as saying the Securities and Exchange Commission was investigating claims that Hurd shared inside information with an ex-contractor ahead of its $13.9 billion acquisition of Electronic Data Systems in 2008.

Hurd's departure in August stunned investors and sent shares tumbling 8 percent in the first trading day after the announcement. Now an Oracle co-president, he left under a cloud of sexual harassment accusations, although the board found no evidence to back up that allegation.

HP instead accused Hurd of filing inaccurate expense reports to conceal a "close personal relationship" with a former contractor, although Hurd's representatives have disputed that.

Now, the government was also examining the claims of inaccurate expense reports filed by Hurd at HP, and looking into whether Hurd destroyed computer evidence related to his departure, the Journal reported.

HP confirmed the SEC probe but declined to comment on what the government was specifically investigating. Hurd declined comment through a spokesman.

"HP is cooperating fully with the SEC on its investigation," a spokeswoman for the technology giant said.

Oracle declined comment. The SEC also would not comment.

Jodie Fisher, the contractor at the center of the controversy that led to Hurd's ouster on August 6, alleged in a June 24 letter that Hurd divulged details about HP's plans to acquire EDS before the deal was announced, a source said last month.

At that time, Hurd's representatives denied the allegations, which were contained in the same letter in which Fisher accused Hurd of harassment.

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Pay Less Now,Get Less Later: Social Security in Trouble

2010-12-12T19:56:00.000-08:00

Social Security Advocates Fear Payroll Tax Cut

WASHINGTON – (AP By STEPHEN OHLEMACHER) President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers, but makes Social Security advocates nervous that it could jeopardize the retirement program's finances.

The plan is part of a package of tax cuts and extended unemployment benefits that Obama negotiated with Senate Republican leaders. It would cut workers' share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.

The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.

Social Security taxes "ought to be held sacrosanct," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security.

"When you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble, I think, in terms of making absolutely certain that the entitlement funding streams are secure," Pomeroy said.

Social Security is funded by a 6.2 percent payroll tax on the first $106,800 earned by a worker. The tax is matched by employers. The package negotiated by Obama would reduce the tax paid by workers to 4.2 percent for 2011. Employer rates would stay unchanged.

Obama administration officials say that a payroll tax cut is an efficient way to stimulate the economy by immediately increasing take home pay for about 155 million workers. The nonpartisan Congressional Budget Office agrees, and many business groups and Republicans support it.

"What came out of the compromise was the idea of the payroll tax holiday, which, frankly, a huge number of economists and other experts had been talking about over the last two years with a lot of support in both political parties," said Larry Summers, Obama's chief economic adviser.

The United Auto Workers endorsed the deal, saying, "Working families will likely spend this money in their local communities, creating jobs and stimulating overall growth."

The payroll tax cut is part of a larger package negotiated by Obama and GOP lawmakers to extend a sweeping array of Bush era tax cuts that expire at the end of the month. Some Democratic lawmakers have balked at the plan, saying it is tilted too much in favor of the rich.

The payroll tax cut would provide relief to any worker earning a wage. It would replace Obama's Making Work Pay tax credit, which has provided modest increases in most workers' paychecks for the past two years.

The payroll tax credit would be more generous to individuals making more than $20,000 and married couples making more than $40,000. For those making less, the payroll tax cut would be less than the Making Work Pay credit.

Making Work Pay, which expires at the end of the year, gives workers a tax credit of 6.2 percent of their wages, but it is capped at $400 for individuals and $800 for couples. The credit is phased out for individuals making more than $75,000 and couples making more than $150,000.

A worker would have to make $20,000 in wages for the payroll tax cut to equal the $400 Making Work Pay tax credit; couples would have to make $40,000.

At the wealthy end of the pay scale, workers making $106,800 — the maximum amount of wages subject to Social Security taxes — would see their payroll taxes reduced by $2,136. That worker's spouse could also get a payroll tax cut of up to $2,136, if he or she makes at least $106,800.

The proposal requires the Treasury Department to replenish Social Security with other government funds, which would have to be borrowed.

"The payroll tax cut has absolutely no effect on the solvency of Social Security," said White House economic adviser Jason Furman.

Social Security has accumulated a $2.5 trillion trust fund since the 1980s. But the government has borrowed that money to pay for other programs. The Treasury Department has issued special bonds to Social Security, guaranteeing the money will be repaid, with interest.

As aging baby boomers start to retire and strain the system, advocates worry about future benefit cuts. This year, for the first time since the 1980s, Social Security will pay out more in benefits than it collects in payroll taxes. Without changes, Social Security's trust funds will run out of money by 2037, according to the trustees who oversee the program.

To save money, the leaders of a bipartisan deficit commission recently proposed a gradual increase in the full retirement age, from 67 to 69, drawing opposition from groups representing older people.

"This 2 percent payroll tax cut is the beginning of the end of Social Security as we know it," said the National Committee to Preserve Social Security and Medicare, which is led by former Rep. Barbara B. Kennelly, D-Conn. "Worker contributions have successfully funded the program for 75 years and that critical linkage between contributions and benefits is what keeps Social Security a self-funded program."

Conclusion

The more the nation clamors for an end to the "nanny state" the more they clamor for more government oversight and handouts. Social Security is just one such complete "father knows best" hand out. They allegedly, take your money, save it for you, at no interest, for 45 years, and then give it back to you every month until you die, and you don't receive the total back if you die beforehand. The kicker, is that the program is made mandatory and there is no guarantee that you will ever receive a dime of it.

Opt Out of Social Security?

Can you opt out of social security insurance? The short answer is actually: yes! The long answer is, it depends on if you meet the requirements as set forth, NOT by the social security administration, but by the IRS. *sad face* Yes, the good old IRS is the one you answer to for social security and noone else. The short list of those that can "opt out" of social security is:

religious leader [write a book and start a religion][just kidding][no I'm not]
be a christian science practitioner [there seems to be some confusion, but according to the IRS website, CSI practitioners are, in fact exempt [I know that's taking the low road calling them CSI]
be amish
be menonite
be uh ... that ... uh ... other sect of amish... uh ... anabaptist [you see a trend here?]
earn no income [oh this is a tricky one isn't it?][if you earn no income, then turn 65, do you get social security payments, just cuz?]
incorporate yourself [oh this is gonna get me in trouble probably] earn no income, have the corporation provide "expenses", like paying your light bill, rent, car note, car insurance; but you earn no income [hmmmm]

For a country that sues people left and right based upon the whole "separation of church and state" there are sure a lot of exemptions if you are religious. Isn't that odd? You cannot have it both ways. You either give the same benefits you pay to secular public and private schools, to religious private schools as well or you deny everyone benefits and exempt everyone from things like social security. [that was a super convoluted sentence I know.]

Basically in a supreme court case, the court held that although the very same parents that lived in a small town paid their property taxes, along with everyone else, they could not get any state allocated funds for their children's school, like all the other secular schools had received, because their kids school was a religious school.

However, if you are of a certain religion or a certain position in a religion you are exempt from having to pay into social security insurance. It seems that, in one instance the religious folk are being swindled out of money completely, but in the other instance they are being exempt from being swindled out of money, while the rest get swindled.

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Obama to Raise Gas Tax: Poll

2010-12-07T17:05:00.000-08:00

Americans Strongly Oppose Proposed Gas Tax Hike

Obama Proposes to Raise Gas Tax

WASHINGTON (Reuters) – Americans by a wide margin oppose a proposal to raise the U.S. gasoline tax by 15 cents a gallon to help cut U.S. budget deficits and support cutting the federal work force, a Reuters/Ipsos poll showed on Tuesday.

The poll revealed mixed views on some of the recommendations made last week by President Barack Obama's bipartisan deficit commission. The commission put forward a number of tax and spending recommendations to cut $4 trillion in deficits over the next 10 years.

The least popular of the recommendations polled by Ipsos for Reuters was a proposal to raise gasoline taxes by 15 cents a gallon. The commission said the increase was needed to fully fund the trust fund that finances transportation projects. But 75 percent of Americans opposed the increase, the poll found.

The current federal gas tax is 18.4 cents per gallon, while taxes imposed by U.S. states average another 22 cents per gallon.

Seventy-one percent said they agreed with a commission proposal to cut the federal work force by 10 percent and reduce congressional and White House budgets. Sixty-one percent said they agreed with proposals to end federal grants to large- and medium-sized airports and to require airports to pay a greater share of the cost of aviation security.

The poll of 1,028 adults, including 802 registered voters, was taken Thursday through Sunday and had a margin of error of 3.1 percentage points.

The poll showed how difficult it will be to win public and congressional support for many of the recommendations made last week by the commission. The panel itself was not united on the plan. Eleven of the 18 members of the panel supported the package, while 7 opposed it.

Retiremen Age

The poll showed that Americans are nearly split on the idea of gradually raising the retirement age to receive full Social Security benefits to 69 by 2075, a key part of the commission's proposal to shore up the retirement system that faces increasing financial strains from the aging post-World War Two baby boom generation. The retirement age already is being gradually raised from 65 to 67.

Only 47 percent of those polled said they agreed with the commission proposal on raising the retirement age, while 49 percent said they disagreed with it.

Fifty-five percent agreed with the panel's proposal to reduce Social Security benefits for higher-income retirees, while 57 percent said they agreed with the idea of giving retirees a choice of collecting half their benefits early and the other half at a later age.

A slight majority, 54 percent, said they disagreed with a proposal to stop taxing the overseas profits of U.S. multinational corporations. That proposal would be part of an overall tax reform recommended by the commission to streamline the complex U.S. tax code and help lower tax rates.

Fifty-eight percent of those polled said they agreed with the proposal to lower individual and corporate income tax rates.

Fifty-six percent agreed with a proposal to reduce overseas military bases and another cost-saving measure to integrate the children of military families into local schools near U.S. military bases and close schools on the bases.

Forty-nine percent said they agreed with a proposal to freeze Defense Department salaries and bonuses as well as noncombat military pay for three years. Forty-five percent said they disagreed with it and 7 percent said they were not sure.

On healthcare, about 45 percent said they agreed with the commission's proposal to phase out the tax-free status of employer-provided healthcare, while 43 percent disagreed and 12 percent said they were not sure.

(Reporting by Donna Smith; Editing by Will Dunham)

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U.S. Manufacturing to Grow in 2011

2010-12-07T16:51:00.000-08:00

U.S. Factory Revenue to Grow in 2011: ISM

Factory Worker

NEW YORK (Reuters) – The manufacturing and services sectors will grow in 2011, with manufacturing revenue expected to increase by 5.6 percent, the Institute for Supply Management said in a semi-annual forecast released on Tuesday.

Revenue in the non-manufacturing sector, which comprises mostly service sector businesses, is expected to increase by 3.4 percent next year, ISM said in a statement, up sharply from a 0.2 percent revenue increase in 2010.

Manufacturing revenue rose 7.9 percent in 2010, ISM said.

"While 2010 has been a year of recovery in manufacturing, our forecast sees improvements in both investment and employment in 2011," said Norbert J. Ore, chairman of the ISM Manufacturing Business Survey Committee.

Capital investment in the factory sector should jump by 14.5 percent next year, up from a 5.9 percent increase reported for 2010.

Along with increased investment, though, purchasing and supply executives at manufacturing firms expect to pay higher prices for materials in 2011, with an overall increase of 4 percent seen on the year, ISM reported.

Most firms also expect the dollar to weaken in 2011 against the major currencies save the Mexican peso, the survey found. A weaker dollar usually helps the sector by making U.S. products cheaper overseas.

Employment in the sector, which grew 7.1 percent in 2010, is expected to increase by 1.8 percent next year.

Non-manufacturing firms are more optimistic that growth will pick up in the first half of 2011, "and they have a higher level of optimism about the next 12 months than they had last December for 2010," said Anthony S. Nieves, chairman of the ISM Non-Manufacturing Business Survey Committee.

After struggling for much of 2010, the U.S. economy has shown some signs of firmer growth in recent months, though the recovery remains fragile, with the jobless rate jumping to 9.8 percent in November.

Non-manufacturing sector capital investment is expected to rise by 3.7 percent. Employment is seen growing at a more modest 0.3 percent, though, after falling by 2.1 percent in 2010, the survey showed.

(Reporting by Steven C. Johnson; Editing by Andrew Hay)

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China Building Skyscrapers While We Can't Afford Rent

2010-12-07T07:45:00.000-08:00

China's Skyscraper Boom Buoys Global Industry

(Associated Press) By JOE McDONALD, AP Business Writer Joe Mcdonald, Ap Business Writer – Sun Dec 5, 6:02 am ET

BEIJING – The 121-story Shanghai Tower is more than China's next record-setting building: It's an economic lifeline for the elite club of skyscraper builders.

Financial gloom has derailed plans for new towers in Chicago, Moscow, Dubai and other cities. But in China, work on the 2,074-foot (632-meter) Shanghai Tower, due to be completed in 2014, and dozens of other tall buildings is rushing ahead, powered by a buoyant economy and providing a steady stream of work to architects and engineers.

The U.S. high-rise market is "pretty much dead," said Dan Winey, a managing director for Gensler, the Shanghai Tower's San Francisco-based architects. "For us, China in the next 10 to 15 years is going to be a huge market."

China has six of the world's 15 tallest buildings — compared with three in the United States, the skyscraper's birthplace — and is constructing more at a furious pace, defying worries about a possible real estate boom and bust. It is on track to pass the U.S. as the country with the most buildings among the 100 tallest by a wide margin.

"There are cities in China that most Western people have never heard of that have bigger populations and more tall buildings than half the prominent cities in the U.S.," said Antony Wood, executive director of the Council on Tall Buildings and Urban Habitat at the Illinois Institute of Technology in Chicago.

China is leading a wave of skyscraper building in developing countries that is shifting the field's center of gravity away from the United States and Europe.

India, Brazil, Saudi Arabia and Indonesia have ultra-tall towers under construction or on the drawing board. In the Gulf, Doha in Qatar and Dubai — site of the current record holder, the 163-story Burj Khalifa — each has three buildings among the 20 tallest under construction, though work on all but one of those has been suspended.

The shift is so drastic that North America's share of the 100 tallest buildings will fall from 80 percent in 1990 to just 18 percent by 2012, according to Wood. He said by then, 45 of the tallest will be in Asia, with 34 of those in China alone.

"So 34 percent of the 100 tallest buildings will be in a single country. That has only happened once before, and that was with the USA," he said.

In China, skyscrapers are going up in obscure locales such as Wenzhou, Wuhan and Jiangyin, a boomtown north of Shanghai. It is building a 72-story, 1,076-foot (328-meter) hotel-and-apartment tower that will be taller than Manhattan's Chrysler Building.

China's edifice complex is driven by a mix of demand for space in a crowded country with economic growth forecast at 10 percent this year and local leaders who want architectural eye candy to promote their cities as commercial centers.

Dozens of midsize Chinese cities are building new business districts to replace cramped downtowns. They look to the model of Shanghai's skyscraper-packed Pudong district — China's Wall Street — created in the 1990s on reclaimed industrial land.

"Governments are encouraging these iconic buildings in order to give a very clear message to the outside world: Please pay attention to our city," said Dennis Poon, managing principal of Thornton Tomasetti, the Shanghai Tower's structural engineers. The New York-based firm also is working on the 115-story Ping An International Finance Center in Shenzhen, near Hong Kong, and other Chinese projects.

China has four of the 10 tallest buildings under construction, versus two for the United States â€” and work on one of those, the 2,000-foot (610-meter) Chicago Spire, has stopped.

The Shanghai Tower will be China's tallest office tower, surpassing the neighboring Shanghai World Financial Center in Pudong. The 2-year-old WFC passed the Jinmao Tower, also in Pudong, for the title.

China accounts for 65 percent of Gensler's worldwide revenues from projects that involve buildings 35 to 40 stories and above, according to Winey.

The firm is working on some 50 projects in China that total 80 million square feet (8 million square meters), the equivalent of San Francisco's entire stock of commercial office space, he said. China revenues are rising by 30 to 35 percent a year and its staff of 140 people in offices in Beijing and Shanghai should expand to 500 in the next seven years.

The boom has drawn a Who's Who of star architects and given Chinese firms their first shot at designing a skyscraper.

Shenzhen's Ping An tower was designed by Kohn Pedersen Fox; the New York firm's other projects include the 116-story East Tower of the Chow Tai Fook Center in Guangzhou, also near Hong Kong. Chicago-based Skidmore Owings & Merrill designed Beijing's tallest building, the 75-story China World Tower III, and the 76-story Tianjin World Financial Center in Tianjin east of Beijing, due to be completed next year. Jiangyin's Hanging Village of Huaxi was designed by China's A+E Design.

Tianjin, a port and oil-refining center with ambitions to be a finance and tech hub, is building four towers of at least 75 stories. One of them, the Goldin Finance 117, will be 117 stories and nearly 2,000 feet (600 meters) tall.

Instead of Western-style single-use office or apartment towers, many developers diversify their revenue sources by making buildings a mix of hotel and office space, with a shopping mall in the base and luxury apartments at the top.

The new space is hitting the market just as Beijing tries to cool a boom in construction of luxury housing and shopping malls. Regulators warn that a supply glut could leave lenders with unpaid loans if developers default.

But demand for high-end office space is so strong that the skyscraper market should face no such problems, said Danny Ma, director of China research for real estate consulting firm CB Richard Ellis. He said the new buildings should fill up quickly because many are the first in their cities to offer high-quality facilities required by foreign and major Chinese companies that are expanding there.

"More and more tenants are keen to move to such buildings," Ma said. He said developers are signing up tenants in advance for 50 to 60 percent of the space in new projects, enough in many cases to make them profitable.

China is helping to propel development of skyscraper design and urban planning as developers face government pressure to make buildings environmentally friendly and integrate them into busy cities.

The Shanghai Tower will have a double-layer glass exterior to insulate it and cut heating and cooling costs, an advanced feature that might be rejected as too costly in the U.S. or other Western markets, Winey said.

"You can do a lot more experimentation here," he said. "It's an amazing place to be, because you can do things here that you can't do anywhere else in the world."

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The Case Against Propping Up Housing Prices (video)

2010-12-06T20:48:00.000-08:00

Wharton School of Business is Wrong

Susan Wachter

It is painful to see an interview of a tenured professor from the Wharton School of Business, completely display ignorance of the economy and get the issue of the federal government's continued interference with the housing market wrong. This "professor", proposes that we should keep the housing bubble propped up as long as we possibly can. And, if you read into her responses in a certain light, you'll come away with the notion that she does not think the federal government IS involved with propping up the housing bubble. There is no way to argue for or against the federal government's continuous meddling in, what should be, a personal market, if you have no idea that the basis, home prices, of the market is systemically flawed, a bubble. Susan Wachter, a professor of real estate at the Wharton School of Business, got every point wrong. Her smarmy and sarchastics remarks served only to show her complete ignorance of the issue at hand, the housing bubble.

But, don't think I relied on this single interview to determine if this person is aware or not aware of the egregious errors in the housing system. I perused about 20 of her own personal writings, and interviews. I think 20 is a sufficient number to understand a person's point of view and to understand whether or not they are aware of basic facts. Sarcasm aside, it is my contention that Susan Watcher has no idea what the federal government has been doing for the past 97 years. [for those who can do simple math, I leave that number there to separate the truly ignorant from those who are awakened to the fiasco we find ourselves in 97 years later]

The basic premise of power is that, the one with the power has the capability to execute such power. But, that is not the whole of the actuality. The true basis of power is not that you have capabilities to execute your abilities, but that you have those who come to you seeking for you to exert a power that they themselves do not have and that you can execute those abilities over and above those who have given you the authority of such power.

The federal government continuously usurps power from people. Particular to this housing issue, we had the policy, ostensibly benevolent, and there's a saying somewhere about the road to hell being paved with good intentions, that all Americans should own a home.

Let's look at that notion for one, realistic, moment.

All Americans Should Own a Home

If all Americans should own a home, then by definition, all Americans should be able to afford a home. But, wait, if all Americans can afford a home, then the notion of a cheap labor pool should be nonexistant OR ... OR... housing should be so cheap that everyone can afford it. You cannot have it both ways. You cannot have a cheap labor pool AND have housing everyone can personally, without government intervention, outside of this being a socialistic government, afford. Unless America is willing to suddenly change to pure socialism, everyone cannot afford housing.

So, if everyone cannot afford housing, and I'm sure President Clinton knew this, then something else must be up when the government suddenly puts forth the policy of "all Americans should own a home." Let's look at what they did to "make it so."

exploded the quasi-governmental agencies like fannie and freddie
government backed guaranteed loans [ yes that means tax dollars would guarantee to the BANK that no matter what, they'd get their money ]
completely reduced the strictures under which those government backed guarantees were handed out [ yes, "we'll take NINJA (no income no job apparent) loans"
the non-quasi-governmental agency, A.K.A. private bank, the federal reserve bank, reduced interest rates from 5.25% to 0.00%
a plethora of system practice of the S.E.C. not prosecuting nor even investigating any real estate industry cogs, i.e. banks on down to appraisers
FDIC steadily increasing its deposit guarantee
bank reserve requirements being reduced, such that they could then lend out millions instead of thousands of dollars, backed by government guarantees on payment
explosion in the rise of exotic loan terms, such as interest only loans and ARM loans among others

With this list, one can easily see that this cheap labor pool doesn't need socialism to get into a home, they simply apply for a home loan without consequence nor care, since they could go to a bank, pay nothing down, not show any income, and pay half of what they would pay in rent for the first 1-3 years.

With houses selling like hot cakes then, who cares what the price of a house was. You have a perfect storm brewing. You have the maid, being able to buy the mansion, money no object.

Money No Object

With poor people being able to afford million dollar price tags, and I've personally heard this story many times in the past 2 years, home prices going up by 19% raised absolutely no red flags. In fact huge housing developers would be so brazen as to put in their brochures that your home price would double in 6 months after sale from the developer. I personally had a friend who's parents bought one of those homes, and indeed cashed in a year later, doubling the initial price, but then not being able to afford a home of their home because the market was so inflated. They had to take a condo 1/3rd of the size.

And, we come to home prices, obviously it was inflated, obviously it is inflated, obviously people were in, and are in homes they could not afford or shouldn't be in a home at all. So if the market is trying to correct itself, you have to do some big math here. If home prices are inflated, how should it be corrected? This is where Professor Wachter completely fails.

given that a huge percentage of the population should not have even been in a home at all, what would home prices be if they had never even bought a home
given that there would not have been that much exchange of homes and the population would not have been trading homes anywhere near as much, what would home prices be if this exchange had not gone on
if we come to the realization that the government was a huge player in people that could not afford homes, getting into home, what would home prices be if all of those policies and guarantees were eradicated
the federal reserve needs to recuse itself from usurping the power of the congress of the united states, in that it sets interest rates, which ultimately led to people who could not afford houses via a realistic market interest rate, get into a home. What would home prices be if the interest rate were set by the market, without interference by the federal reserve

This is why those who are for home prices falling are correct and those who are not, do not realize that home prices are NOT natural. Home prices should be nowhere near their current value. What investment do you know of that earns 19%, for over 10 years, and is not investigated by the SEC? A 19% annual gain is not an organic gain and should send out red flags to anyone caring to pay a modicum of attention. Any idiot knows that if you get 20 cents on the dollar over above your investment, that something is wrong, normally illegal activity is a sure bet.

So if we have housing prices going up by 19% every year for at least 10 years, why would you argue against, in a depression, housing prices falling. This argument, of course, can be put exactly to the fed for not letting the zombie banks fail, or interest rates to rise naturally or the overall correction that is necessary at this time, i.e. prices to fall in every market. Unless Susan Wachter is in an investment home that she is thinking she is going to get out of in the next year, she is arguing a point in favor of artificially highly inflated home prices.

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European Union Launches Antitrust Probe on Google

2010-11-30T08:51:00.000-08:00

EU Tackles Google Dominance in Antitrust Probe

Google Antitrust Probe

BRUSSELS (AFP) - The European Union has launched an antitrust probe on internet king Google on Tuesday, after complaints the Silicon Valley giant abused its dominant position in the online search market.

European Union competition watchdogs formally announced their investigation, after rivals accused Google of "unfavorable treatment" of their services in both unpaid and sponsored search results, the crucial listings that make the web navigable.

Competition authorities are probing whether Google's own services - the company has branched out into just about every web domain there is - are getting "preferential placement" when users punch in search queries, some of which may lead to consumer spending.

The official probe will certainly take months, and potentially carries echoes of a decade of antitrust pursuit of fellow computer giant Microsoft over issues from operating systems to web browsers.

An investigation does not necessarily mean legal action will follow, although fines in similar cases have run to many hundred of millions of Euros in the past.

Google's share of the core US search market grew to 66.1% in September, according to industry tracker comScore.

The company posted a 32% leap in net profit to $2.17 billion between July and September, its latest available results.

One of the complainants, British search site Foundem, said in a statement that its revenue "pales next to the hundreds of billions of dollars of other companies' revenues that Google controls indirectly through its search results and sponsored links."

The commission wants to check if Google was "lowering the ranking of unpaid search results" as well as other allegations of advertising interference including imposing exclusivity clauses, restricting ads from competing providers and data on consumer impact.

Google said it would cooperate with the prove, saying: "There's always going to be room for improvement, and so we'll be working with the commission to address any concerns."

It insisted it had always sought to ensure that "ads are always clearly marked."

Microsoft's portion of the US market improved a fraction to 11.2% while that of Yahoo! slipped from 17.4% in August to 16.7% in September, comScore reported last month.

Approximately $12.4 billion will be spent in the United States this year on ads on search engines, with Google expected to rake in 73.3% of that cash, according to Marketer.

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Rising Apartment Rentals Report

2010-11-30T08:14:00.000-08:00

Apartment Rents Set to Rise, Fueling Inflation: NAR

Jimmy McMillan of the Rent is Too Damn High Party

WASHINGTON (AFP) – US apartment rents are expected to climb next year as the economy recovers from recession, a rise that may fuel inflation, a real-estate industry group said Monday.

Multifamily real estate will star in an overall modest improvement in commercial property markets in 2011, the National Association of Realtors said in an outlook report.

NAR said ailing commercial real-estate markets -- office, industrial, retail and rental housing -- were flattening out after a steep plunge amid the worst recession in decades.

Lawrence Yun, NAR chief economist, predicted a rise in demand, as the economy slowly recovers from the downturn that officially ended in June 2009.

The number of people setting up a new home has plummeted amid high unemployment and plunging home values after a housing bubble collapsed more than three years ago.

"Multifamily housing is the one commercial sector that has held on relatively well in the past year, and can expect the best performance in 2011," he said.

Yun predicted apartment rents could rise by one to two percent in 2011, after having fallen in 2009 and showing no growth this year.

"This rent rise therefore could start to force up broader consumer prices as well," he said.

The cost of rent or mortgages is the biggest component in the government's consumer price index, accounting for 32 percent of its total weight, he noted.

Multifamily vacancy rates were forecast to decline from 6.4 percent in the current quarter to 5.8 percent in the fourth quarter of 2011.

Consumer price inflation has remained subdued in recent months despite a rise in energy prices, while the core inflation has trended lower, the Federal Reserve noted last week in the minutes of its last policy-setting meeting.

The central bank used weak inflation as a key justification for its controversial plan to buy an extra 600 billion dollars in Treasury bonds to juice the flagging recovery.

Critics, including several participants in the November 2-3 Federal Open Market Committee meeting, have said the plan risks spurring inflation.

NAR said the outlook for the office and industrial markets had improved, with modestly declining vacancy rates expected in 2011, while the retail sector would essentially hold steady.

Vacancy rates stuck in double digits, nevertheless, signal rents would remain under severe pressure.

"High vacancy rates imply falling rents," Yun said.

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Personal Computer Sales Down

2010-11-30T07:50:00.000-08:00

Analysts More Cautious on PC Sales Outlook

Personal Computer Sales Down

BOSTON (Reuters) – Market researchers are scaling back forecasts for global sales of personal computers, blaming an uncertain economic outlook in some markets and competition from tablet devices such as Apple Inc's iPad.

Research firm Gartner cut its 2010 forecast on Monday, just as the crucial holiday sales season was getting under way for PC makers like Hewlett-Packard Co, Acer, Dell Inc and Lenovo.

Gartner said it expected consumers and businesses to hold off on buying PCs in the near-term as they seek to save money.

It said it now expected PC shipments this year to rise 14.3 percent to 352 million units, and it pegged next year's growth rate at 15.9 percent. It had previously forecast growth of 17.9 percent in 2010 and 18.1 percent in 2011.

"These results reflect marked reductions in expected near-term unit growth based on expectations of weaker consumer demand, due in no small part to growing user interest in media tablets such as the iPad," Ranjit Atwal, research director at Gartner, said in a statement.

He said he expected media tablets to displace about 10 percent of PC units by 2014.

Market researcher IDC said it was seeing a similar trend, though a spokesman said sales were still poised to grow in the double digits. IDC will update its forecast in mid-December.

Data from Gartner and IDC are watched closely to gauge the strength of the PC market.

Separately, Gartner said worldwide shipments of servers, or computer systems used by large organizations, rose 14.2 percent in the third quarter from a year earlier. HP led with 32.1 percent of overall revenue in the server market, with IBM a close second with 30.2 percent, Gartner said.

Of the top five vendors, only Oracle suffered a decline in third-quarter revenue, Gartner said. Oracle, the world's third-largest software maker, has been trying to step up its competitive edge in hardware following its $7.5 billion acquisition of Sun Microsystems earlier this year.

(Reporting by Jim Finkle in Boston, Ritsuko Ando in New York and Terhi Kinnunen in Helsinki; Editing by Matthew Lewis and Ted Kerr)

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Home Prices Continue to Fall in Major Cities

2010-11-30T07:24:00.000-08:00

Home Prices Continue Falling

Home Prices Falling

(AP News ) NEW YORK – Home prices are falling faster in the nation's largest cities, and a record number of foreclosures are expected to push prices down further through next year.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 0.7 % in September from August. Eighteen of the cities recorded monthly price declines.

Cleveland recorded the largest decline. Prices there dropped 3 % from a month earlier. Prices in San Francisco, Los Angeles and San Diego, which had been showing strength this year, also dropped in September from August.

Washington and Las Vegas were the only metro areas to post gains in monthly prices.

The 20-city index has risen 5.9 % from their April 2009 bottom. But it remains nearly 28.6 % below its July 2006 peak.

And home prices have fallen in 15 of the 20 cities in the past year.

Prices rose in many cities from April through July, mostly boosted by government tax credits which have since expired. Job worries and record high foreclosures are dampening buyer demand and weighing on prices.

The national quarterly index, which measures home prices in the nine U.S. census regions, dropped 2 % in the third quarter from the previous quarter.

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White House Salaries 2010 Report

2010-11-29T18:51:00.001-08:00

Our Tax Dollars in White House Salaries

Obama Makes $400,000/yr

According to the White House's salary list, Obama and most senior staff did not get a pay raise last year. The annual White House payroll though is a whopping $39 million. As of this year, the salary list, which it reports to Congress yearly, was also made available online. This was the first year this was done. Aside from the vice president's office, which is technically an arm of the U.S. Senate, the salary list itemizes the salary and title of every employee in the White House. Obama's personal salary is not included in the salary list, which is $400,000 yearly, but is regulated by Congress. The White House now employees a staggering 469 people. This number is down 17 positions from last year, 2009.

From 2009 to this year, there was little change, since Obama had capped all salaries of those making more than $100,000 yearly. Allegedly, salaries in the White House range from $21,000 to about $180,000

Chief of staff Rahm Emanuel and Twenty-three top aides, press secretary Robert Gibbs, speechwriter Jon Favreau, White House counsel Bob Bauer and senior advisers David Axelrod and Valerie Jarrett, make the top full-time staff salary of $172,200. (Two health-care policy “detailees” — Michael Hash and Timothy Love — make $179,700.) By comparison, Vice President Joe Biden makes roughly $230,000 a year, according to Senate records.

White House social director Juliana Smoot makes $150,000, which is $37,000 more than her predecessor, Desiree Rogers, who left the administration not long after a scandal involving party-crashers at a state dinner in December. Former Duke basketball star Reggie Love still makes just over $100,000 as President Obama’s body man. Not on the list: actor Kal Penn, who left his job in the White House’s Office of Public Engagement on June 1 to film the third sequel in the "Harold & Kumar" film series.

Most so-called rank-and-file members of the White House staff pull in an average income between $40,000 and $60,000 — including dozens of “staff assistants,” press aides, analysts and researchers. Only three people are listed as working for free.

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Obama Cuts Federal Civilian Salaries But Not Military Salaries

2010-11-29T15:55:00.000-08:00

Obama Freezes Federal Civilian Salaries

Obama is Showering Everyone With Cash Except Workers

Monday president Obama froze all federal civilian workers' salaries. This is to stay in place for two whole years in an effort to curb federal spending. Note that this does not affect any military workers' salaries, which includes a huge pool of workers state-side that never ever see combat. In making the distinction though Obama tried to smooth it over by saying:

"These are also times where all of us are called on to make some sacrifices. And I'm asking civil servants to do what they always do and play their part."

Obama tried to say the decision was not easy. By White House estimates the freeze will save $2 billion for the remainder of 2011 fiscal year, $28 billion in five years and over $60 billion in 10 years, however it does not affect any military personnel.

What is not being said, is why exactly Obama is doing this. He is to sit down with Republican congressional leaders tomorrow to discuss the economy, the proceeding next two years and other issues. He hopes the pay freeze will help him negotiate with the congressional fiscal conservatives whom he hopes to count on for some of his White House economic policies, such as extension of the tax cuts for the middle and upper class, defense appropriations and federal funding.

Congressional fiscal conservatives have championed federal salaries as a major sticking point. Obama hopes that he has headed off nearly all talking points of the fiscal conservatives who had been making an issue of federal spending, including proposing many federal spending cuts. For its part the media has helped the fiscal conservatives by pointing out how much SOME federal workers are paid. Some reports have said the number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office.

Please note that Obama's plan to freeze ALL federal civilian salaries does nothing to remove any of those $150,000 / year workers' salaries nor does it touch any military workers' salaries.

The president had originally announced a plan to raise 2 million federal workers' pay 1.4 percent.

In context, the pay freeze itself represents only a small fraction of the federal deficit, but it was among the recommendations in the preliminary report from the president's deficit commission. The commission's full report is due Wednesday.

In many cash-strapped states around the country, the issue of public employee salaries and retirement benefits has already played out as a major issue:

In California, where pension debt is considered the largest driver of the state's soaring budget deficit, Republican Gov. Arnold Schwarzenegger reached agreements with some unions to cut pensions for new state hires.
In Minnesota, Republican Gov. Tim Pawlenty signed legislation this year to overhaul public employee pension plans.
And in Wisconsin, state workers will soon begin paying into their pension funds instead of having it fully covered by the state.

The truly evil part of all of this, is that this policy:

affects even the federal workers who only make $19,000 / year
does not remove superfluous federal jobs that were created just to get someone's nephew a high paying fake job
does nothing for the federal deficit spending [ the percentage of the federal deficit spending this affects is so minor as to not even be 1% ]
the high paying federal jobs will not go away and more than likely more high paying jobs will be created at tax payers' expense
none of this affects military workers' salaries [ including those who work right along side of federal workers ]

You either fall for the ruse that Obama is a Democrat and he's catering to Republicans or you open your eyes and realize that there is no difference between the two-party system, and Obama is simply being as Republican as any former Republican president. The sooner people wake up, the faster we can remove these jackals and get real people in office and do away with this "duet".

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The Jobless Rate September 2010

2010-10-15T13:22:00.000-07:00

The Jobless Report September 2010

Below you'll find the direct information about the jobless rate for September 2010. This information is taken directly from the Bureau of Labor Statistics. I hold that this information is nearly misinformation due to the fact that the Department of Labor refuses to count U-6. The U-6, which is what the government uses to gauge people that have stopped looking for work, climbed to 17.1% from 16.7%. What the U-6 doesn’t measure are the people that actually are looking for work, but just can’t find anything. If somebody needs to make a living, they don’t give up. The government doesn’t take that into consideration though. If they are deemed to have stopped looking for work, they are no longer counted.

The jobless rate increased yet, reported government unemployment rates remained at 9.6%. More and more jobs were lost, yet the unemployment rate remained unaffected. As an investor, you should be looking for the correct information, instead of the reported information.

THE EMPLOYMENT SITUATION -- SEPTEMBER 2010

Nonfarm payroll employment edged down (-95,000) in September, and the unem-
ployment rate was unchanged at 9.6 percent, the U.S. Bureau of Labor Sta-
tistics reported today. Government employment declined (-159,000), reflec-
ting both a drop in the number of temporary jobs for Census 2010 and job
losses in local government. Private-sector payroll employment continued
to trend up modestly (+64,000).

Household Survey Data

The number of unemployed persons, at 14.8 million, was essentially un-
changed in September, and the unemployment rate held at 9.6 percent. (See
table A-1.)

Among the major worker groups, the unemployment rate for adult men (9.8
percent), adult women (8.0 percent), teenagers (26.0 percent), whites
(8.7 percent), blacks (16.1 percent), and Hispanics (12.4 percent) showed
little or no change in September. The jobless rate for Asians was 6.4
percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks and over),
at 6.1 million, was little changed over the month but was down by 640,000
since a series high of 6.8 million in May. In September, 41.7 percent
of unemployed persons had been jobless for 27 weeks or more. (See table
A-12.)

In September, both the civilian labor force participation rate, at 64.7
percent, and the employment-population ratio, at 58.5 percent, were un-
changed. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes
referred to as involuntary part-time workers) rose by 612,000 over the
month to 9.5 million. Over the past 2 months, the number of such workers
has increased by 943,000. These individuals were working part time be-
cause their hours had been cut back or because they were unable to find
a full-time job. (See table A-8.)

About 2.5 million persons were marginally attached to the labor force
in September, up from 2.2 million a year earlier. (The data are not sea-
sonally adjusted.) These individuals were not in the labor force, wanted
and were available for work, and had looked for a job sometime in the
prior 12 months. They were not counted as unemployed because they had
not searched for work in the 4 weeks preceding the survey. (See table
A-16.)

Among the marginally attached, there were 1.2 million discouraged work-
ers in September, an increase of 503,000 from a year earlier. (The data
are not seasonally adjusted.) Discouraged workers are persons not cur-
rently looking for work because they believe no jobs are available for
them. The remaining 1.3 million persons marginally attached to the labor
force had not searched for work in the 4 weeks preceding the survey
for reasons such as school attendance or family responsibilities. (See
table A-16.)

Establishment Survey Data

Total nonfarm payroll employment edged down by 95,000 in September.
Government employment fell by 159,000, reflecting both the departure
of 77,000 temporary Census 2010 workers from federal government pay-
rolls and a decline of 76,000 in local government employment. Private-
sector payroll employment continued to trend up (+64,000) over the
month. (See table B-1.)

Health care employment rose by 24,000 in September. The increase was
concentrated in ambulatory health care services (+17,000). Health care
employment has risen by an average of 21,000 per month this year.

Within professional and business services, employment services added
28,000 jobs in September. Temporary help services accounted for most
of the gain.

Within leisure and hospitality, employment in food services and drink-
ing places increased by 34,000 over the month and has risen by 104,000
thus far in 2010.

Mining employment continued to trend up (+6,000) over the month. Mining
has added 77,000 jobs since a recent low in October 2009.

Employment in manufacturing changed little in September and, on net, has
been essentially flat since May. The industry added 134,000 jobs during
the first 5 months of the year.

Employment in wholesale trade, retail trade, transportation and ware-
housing, information, and financial activities showed little change in
September.

Employment in construction edged down (-21,000) over the month, partly
offsetting an employment gain in August. Both the August and September
changes were concentrated among nonresidential specialty trade contrac-
tors. Construction employment has shown little net change since February.

Government employment fell by 159,000 in September. A decline in federal
government employment was due to the loss of 77,000 temporary Census 2010
jobs. As of September, about 6,000 temporary decennial census workers re-
mained on the federal government payroll, down from a peak of 564,000 in
May. Employment in local government decreased by 76,000 in September with
job losses in both education and noneducation.

In September, the average workweek for all employees was unchanged at 34.2
hours. The manufacturing workweek for all employees decreased by 0.1 hour
to 40.1 hours, and factory overtime was unchanged at 3.0 hours. The aver-
age workweek for production and nonsupervisory employees on private non-
farm payrolls was unchanged at 33.5 hours. (See tables B-2 and B-7.)

Average hourly earnings of all employees on private nonfarm payrolls in-
creased by 1 cent to $22.67 in September. Over the past 12 months, aver-
age hourly earnings have increased by 1.7 percent. In September, average
hourly earnings of private-sector production and nonsupervisory employ-
ees increased by 1 cent to $19.10. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for July was revised from
-54,000 to -66,000, and the change for August was revised from -54,000 to
-57,000.

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Home Prices Fall Across the U.S.

2010-08-25T13:20:00.000-07:00

Home Prices in U.S. Decline 1.6% in Second Quarter, FHFA Says

By Kathleen M. Howley
August 25, 2010, 12:53 PM EDT
http://www.businessweek.com

Aug. 25 (Bloomberg) -- U.S. home prices fell 1.6 percent in the second quarter from a year earlier as record foreclosures added to the inventory of properties for sale.

The annual drop followed a 3.2 percent decline in the first quarter, the Federal Housing Finance Agency said today in a report. Prices rose 0.9 percent from the prior three months, according to the Washington-based agency, which measures sales of homes with mortgages backed by Fannie Mae or Freddie Mac.

Foreclosures are boosting the supply of properties on the market and undercutting the confidence of homebuyers, sapping demand even as mortgage rates tumble to record lows. The U.S. inventory of homes for sale averaged 3.89 million during the second quarter, the highest since 2008, according to data from the National Association of Realtors.

“As long as foreclosures keep coming on the market, it’s unlikely we’ll see a strong rebound in housing prices,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York.

A record 269,962 U.S. residential properties were seized by lenders in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California-based data company said in a July 15 report.

Unemployment averaged 9.7 percent during the second quarter, near the 10 percent rate in 2009’s final three months that was the highest since 1983, according to the Bureau of Labor Statistics. Joblessness boosts the number of foreclosures as mortgage holders fall behind on payments. It also reduces the number of people who are eligible to get home loans.

Record Low Rates

Mortgage rates for a 30-year fixed loan fell to 4.42 percent this month, the lowest since McLean, Virginia-based Freddie Mac began keeping records in 1971. The rate probably will average 4.7 percent this year and next, according to Washington-based Fannie Mae, Freddie’s larger rival.

Purchases of existing homes plunged 27 percent to a 3.83 million annual rate in July, the slowest since comparable records began in 1999, according to Chicago-based NAR. Sales of new homes unexpectedly dropped last month to the lowest level on record, the Commerce Department said today.

Federal Reserve policy makers on Aug. 10 said the U.S. economic expansion probably will be “more modest” than earlier anticipated, citing the housing market as one of the reasons. The Fed has held the target for its benchmark lending rate near zero since December 2008.

“Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit,” the Fed said in a statement. “Housing starts remain at a depressed level.”

Today’s FHFA report measures changes in real estate values using repeat data on individual properties. It doesn’t include a dollar value for homes. The U.S. median home price was $176,900 in the second quarter, according to NAR.

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