Bernard Arnault, head of luxury goods group LVMH, insists that he moved the cash and assets for ‘family inheritance reasons’
It is thought he wants to avoid a 75 per cent top rate on income being introduced by President Francois Hollande
Thursday, January 31, 2013
France's richest man moves to Belgium and takes multi-billion pound fortune with him 'to avoid new socialist super-tax'
Wednesday, January 30, 2013
Yale's Shiller: Housing Market May Have Further to Drop
A U.S. housing-market revival may prove illusory and the threat of
further weakness remains, said Robert Shiller, a professor at Yale
University and co-creator of the S&P/Case-Shiller index of property
values.
“The housing market has been declining for something like six years now, it could go on, that’s my worry,” Shiller told Tom Keene in a Bloomberg Television interview Thursday in Davos, Switzerland. “The short-term indicators are up now, it definitely looks better, but we saw that in 2009.”
The property market has shown signs of recovery and homebuilding has rebounded as low borrowing costs spur buyer demand, bolster prices. Values rose 7.4 percent in November from a year earlier, the ninth straight increase and the biggest gain since May 2006, Irvine, California-based data provider CoreLogic said last week.
READ MORE: http://www.moneynews.com/Economy/shiller-housing-home-real-estate/2013/01/24/id/472761?s=al&promo_code=122CB-1
“The housing market has been declining for something like six years now, it could go on, that’s my worry,” Shiller told Tom Keene in a Bloomberg Television interview Thursday in Davos, Switzerland. “The short-term indicators are up now, it definitely looks better, but we saw that in 2009.”
The property market has shown signs of recovery and homebuilding has rebounded as low borrowing costs spur buyer demand, bolster prices. Values rose 7.4 percent in November from a year earlier, the ninth straight increase and the biggest gain since May 2006, Irvine, California-based data provider CoreLogic said last week.
READ MORE: http://www.moneynews.com/Economy/shiller-housing-home-real-estate/2013/01/24/id/472761?s=al&promo_code=122CB-1
Tuesday, January 29, 2013
Fed's Lacker Repeats Warning: Inflation May Rekindle
The Federal Reserve's latest stimulus plan will not do much to boost
growth and raises the risk of inflation next year, Richmond Fed Bank
President Jeffrey Lacker said on Tuesday, echoing remarks he made last
week.
"It is unlikely that the Federal Reserve can push real growth rates materially higher than they otherwise would be, on a sustained basis," he said in a speech to a business group.
"I see an increased risk, given the course the (Fed's policy) committee has set, that inflation pressures emerge and are not thwarted in a timely way. I see material upside risks to inflation in 2014 and beyond, given the current trajectory for monetary policy," he said.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
"It is unlikely that the Federal Reserve can push real growth rates materially higher than they otherwise would be, on a sustained basis," he said in a speech to a business group.
"I see an increased risk, given the course the (Fed's policy) committee has set, that inflation pressures emerge and are not thwarted in a timely way. I see material upside risks to inflation in 2014 and beyond, given the current trajectory for monetary policy," he said.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
Monday, January 28, 2013
Working Poor in the U.S. Hits One-Third of all Employed Families
In Today's Issue:
Working Poor in the U.S. Hits One-Third of all Employed Families… This Old Economy Stock’s a Moneymaking Winner… Boost Your Portfolio Returns with the Emerging Markets…
*****
Why is Inflation Below 3%?
Since 2008, the Federal Reserve has created an unprecedented $2.6 trillion in new money out of thin air…so many new dollar bills that inflation should have skyrocketed well past 10% annually.
So why does the Bureau of Labor Statistics say the official inflation rate is only 2.16%? The answer is almost too shocking to be true.
In a just-released tell-all interview, a 30-year investing veteran tells us why the official numbers are so misleading, they’re almost manipulative.
Working Poor in the U.S. Hits
One-Third of all Employed Families ~ by Michael Lombardi, MBA
It
wasn’t too long ago when the U.S. economy was on the verge of collapse
and any prospects for economic growth were bleak (think 2008). We all
know what happened after the financial crisis. Banks needed help or else
the financial system would have collapsed. So big banks had billions of
dollars made available to them via the government and Federal Reserve.
Fast forward to today, and with all the stimulus packages implemented by the U.S. government and the quantitative easing programs of the Federal Reserve, the banks have been saved. But not much else has been done in the U.S. economy. In fact, the statistics show we may be going in the wrong direction again.
The U.S. economy took a huge wrong turn when banks were permitted to make loans to people who never really qualified for them. It will take decades for the U.S. economy to recover from the wounds of the financial crisis. And some economists like me think all this quantitative easing will create long-term problems for America, as our national debt has skyrocketed and the strength of the U.S. dollar has deteriorated.
My question: if creating jobs was one of the goals of quantitative easing, why are so many people falling into poverty?
In 2011, there were 47.5 million people in 10.4 million families in the U.S. economy living near poverty. Called the “working poor,” they are defined as earning less than twice the official poverty rate income of $22,811 per year for a family of four.
To give you some perspective, the working poor are now almost 33% of all the working families in the U.S. economy. In 2010, this number was 31%. In 2007, it was as low as 28%. (Source: Reuters, January 15, 2013.)
Thanks to several rounds of quantitative easing implemented since 2008, there were surely some jobs created in the U.S. economy. But as I have been harping on these pages, the majority of new jobs created since the “big bust” has been in low-wage industries. The rising number of working poor in this country proves the point.
According to the Working Poor Project (aimed at improving economic security for low-income families), working parents in the U.S. economy have taken jobs such as cashiers, maids, waiters and other low-paying jobs where they are offered fewer hours and minimal benefits. One in four low-income parents has one of these types of jobs.
Even Federal Reserve Chairman Ben Bernanke agrees with this occurrence. At University of Michigan, while talking about the U.S. economy, he said, “…we would like to see a stronger labor market…there are too many people whose skills and talents are being wasted.” (Source: Wall Street Journal, “Fed Chief Sees Bond Buys Continuing,” January 14, 2013.)
Quantitative easing; it’s been good for Wall Street and the big banks. For the “working poor,” the statistics show money printing hasn’t helped. Unfortunately, I see a time down the road when hyperinflation becomes an after-effect of too many dollars in the system. At that point, when inflation comes into play, the poor will just fall further behind.
Michael’s Personal Notes:
It’s quite a race…
As countries around the world struggle to grow in 2013, central banks in the global economy are in a race to devalue their currencies. This is one race I predict will end with a bunch of losers.
The central bank of Japan has gained some extra attention lately due to its increased printing activities. The Prime Minister of Japan, Shinzo Abe, made an announcement last week about a new 10.3-trillion yen spending spree to boost Japan’s economic growth. (Source: Financial Times, January 11, 2013.)
But Japan is not the only country involved in printing and devaluing its currency. Other countries in the global economy are doing the same. The central banks of Switzerland, Brazil, and China have taken steps to devalue their currencies. It’s an outright currency war amongst central banks.
Even Russia is getting into the currency devaluation race. The central bank of Russia has been actively buying foreign currencies. It bought 4.83 billion worth of foreign currencies so far in January and purchased 5.15 billion Russian rubbles worth of foreign currencies in December of 2012, as the rising ruble has been hurting exporters. (Source: Bloomberg, January 11, 2013.)
But how useful is the ploy of devaluing currency to stimulate economic growth? Philadelphia Federal Reserve Bank President Charles Plosser recently explained that currency devaluation has no benefit to the global economy. He said, “So central banks and governments need to be cautious about allowing us to slip into a regime like that because that would not be healthy for world trade or for the economies.” (Source: Reuters, “Fed official warns about slipping into currency wars,” January 11, 2013.)
Dear reader, my concern is that there are too many central banks involved in this new (but really old) phenomenon of printing money to lower currency values and stimulate economic growth. If all central banks work to devalue their currencies at the same time, will it work?
Right now, the reason for central banks to print money is declining exports. But I don’t think they realize how bad the situation is on the demand side. Once demands picks up, export growth will eventually follow. Printing more money devalues currencies, but won’t increase demand; rather, the more money printed, the greater chances of inflation and the more expensive exports become—a classic double-edged sword.
Where the Market Stands; Where it’s Headed:
As I have been predicting in these pages, I believe 2013 will be the year the bear market rally in stocks that started in March of 2009 comes to an end. And it may end earlier in the year than most analysts think possible. The stock market is close to its top.
What He Said:
“Many of today’s consumers have purchased properties with very little down payment. They’ve been enticed by nothing-down, interest-only, second and third mortgages. Bottom line: the low interest rate environment sucked consumers into the housing market big-time. And that will eventually cause us all problems.” Michael Lombardi in Profit Confidential, June 22, 2005. Michael started warning about the crisis coming in the U.S. real estate market right at the peak of the boom, now widely believed to be 2005.
This Old Economy Stock’s a Moneymaking Winner~ Ahead of the Street Column, by Mitchell Clark, B. Comm.
I’ve
always liked railroad stocks; they are the backbone of North America,
and they’re very good at making money. Often in this column we consider
the stock market performance of Union Pacific Corporation (NYSE/UNP). I
firmly believe that this company will continue to be a winner for
investors.
As part of an ongoing series in this column, we’ve been looking at some of the best long-term performers the stock market has to offer. So far, we’ve considered PepsiCo, Inc. (NYSE/PEP), Union Pacific, and Colgate-Palmolive Company (NYSE/CL). While a track record can’t tell you where a stock is going in the future, for me, it lends a lot of weight to making a new investment decision. What I’m trying to find are great, dividend paying stocks that investors can accumulate when they’re down. If a stock has a history of recovering strongly from periods of price weakness, this lends a lot of credibility to its story.
Looking at railroad stocks specifically, one of the best-performing companies on the stock market has been Canadian National Railway Company (NYSE/CNI), which trades on both the New York and Toronto stock exchanges. Among railroad stocks, this company’s long-term wealth creation on the stock market is unmatched. The company’s dividend yield isn’t as large as other railroad stocks, but its capital gains are very impressive. The company’s stock chart is featured below:
Chart courtesy of www.StockCharts.com
This
stock has basically been going straight up since the stock market
correction in 2008/2009. On a split-adjusted basis, the stock was worth
approximately $50.00 a share at the beginning of 2008, $20.00 a share in
2004, $10.00 a share in 2000, and $6.00 a share in 1996. Who said you
can’t make money with old businesses like railroad stocks?
On the stock market, Canadian National Railway (CN) has a track record that can’t be beat by other railroad stocks. The company’s position is unique within the group, as it owns track all across Canada and straight down the middle of the U.S. to the Gulf Coast. The size of this infrastructure in two countries is unique and creates awesome economies of scale that have proven to benefit shareholders very well.
CN is the kind of company that I think blue chip stock market investors can consider when it’s down in price. Of course, this stock market winner isn’t down in price very often, because business is so good. Although economic forecasting is glorified guesswork, the Federal Reserve recently announced that it expects the U.S. economy to grow about 2.5% this year and 3.5% in 2014. If this economic recovery actually happens, which industry will be the first to benefit? It will be the railroad sector, and railroad stocks are some of the best large-cap companies that a stock market investor can consider.
Warren Buffett picked up on this trend a few years ago and bought out Burlington Northern Santa Fe entirely. This was a very good move, and I’m sure it’s highly profitable for his holding company. I think railroad stocks are going to do very well over the next few years, especially as agricultural commodities rise in value. I don’t have a sense as to where the stock market might go, but one thing I wouldn’t do is bet against railroad stocks. The old economy is back, and it’s going to make a lot more money for shareholders.
Boost Your Portfolio Returns with the Emerging Markets~ The Leong Side of the Market, by George Leong, B. Comm.
The
key to the global economy is to drive consumers to spend in their
respective economies. My view is that the emerging markets will continue
to be an excellent place to have some capital, from the BRIC (Brazil,
Russia, India, and China) countries to the four “Little Tigers,”
comprising Hong Kong, Singapore, South Korea, and Taiwan. My reasoning
is that the newfound wealth and growing middle class in these markets
will drive consumer spending and economic growth.
Just take a look at the numbers from global credit card provider MasterCard Incorporated (NYSE/MA), as the company is a good global barometer on consumer spending, with its presence in over 210 countries. In a third-quarter press release, MasterCard reported that its worldwide purchase volume surged 12% in the third quarter on a local currency basis MasterCard President and CEO, Ajay Banja added, “Additionally, emerging geographies and governments continue to provide great opportunities for growth.” (Source: “MasterCard Incorporated Reports Third-Quarter 2012 Financial Results,” Yahoo! Finance via BusinessWire, October 31, 2012, last accessed January 15, 2013.)
What’s interesting is the appearance of credit in the emerging markets where cash was once king. MasterCard clearly sees new markets in these growth regions where the per-capita income is rising, helping to drive consumer spending and economic growth.
The iShares MSCI Emerging Markets Index (NYSEArca/EEM) chart below shows the rally since mid-November 2012.
Chart courtesy of www.StockCharts.com
The BRIC region is showing decent market returns to start 2013.
The Brazilian benchmark index, the Bovespa, is up nearly two percent this month, while the Russian Traded Index (RTX) is up a whopping 4.2%. Stock returns in the two major regions, India and China, are up 2.5% (BSE SENSEX India Index) and 1.9% (Shanghai Stock Exchange Composite Index), respectively.
As many of you know, I feel China and India will be the explosive areas for consumer spending, given over one-third of the world’s population lives in these two regions.
“China, followed by India and other emerging Asian economies, is creating a vast new population of consumers, whose growth will continue into the coming decade,” reports consulting firm Bain & Company on its web site (Source: “The Great Eight: Trillion-Dollar Growth Trends to 2020,” Bain & Company, September 9, 2011, last accessed January 15, 2013.) The company’s research suggests that about two-thirds of the world’s growth in the middle class will be derived from China and India, and that will translate into increased consumer spending.
On a smaller but equally important scale, the Little Tigers could be a place to invest some money given the strong consumer spending.
South Korea, the fourth-largest economy in Asia, grew at 6.1% in 2010, but growth is estimated to fall to 3.5% this year, according to the Bank of Korea.
Latin America is also hot for growth for consumer spending. The region’s gross domestic product (GDP) growth is estimated to slow to 3.7% this year, down from 4.5% in 2011, according to the International Monetary Fund (IMF). On the plus, growth is expected to rally to 4.1% in 2013. The key player in Latin America is Brazil, which will be host to the upcoming 2014 FIFA World Cup and the 2016 Summer Olympics.
Another emerging region that will see strong consumer spending growth is Eastern Europe—namely Russia, the largest economy in Eastern Europe, and Poland, the second-largest economy in the region.
To diversify and add possible higher returns, take a look at these emerging markets and the companies that operate there.
Working Poor in the U.S. Hits One-Third of all Employed Families… This Old Economy Stock’s a Moneymaking Winner… Boost Your Portfolio Returns with the Emerging Markets…
*****
Why is Inflation Below 3%?
Since 2008, the Federal Reserve has created an unprecedented $2.6 trillion in new money out of thin air…so many new dollar bills that inflation should have skyrocketed well past 10% annually.
So why does the Bureau of Labor Statistics say the official inflation rate is only 2.16%? The answer is almost too shocking to be true.
In a just-released tell-all interview, a 30-year investing veteran tells us why the official numbers are so misleading, they’re almost manipulative.
Working Poor in the U.S. Hits
One-Third of all Employed Families ~ by Michael Lombardi, MBA
 Michael Lombardi |
Fast forward to today, and with all the stimulus packages implemented by the U.S. government and the quantitative easing programs of the Federal Reserve, the banks have been saved. But not much else has been done in the U.S. economy. In fact, the statistics show we may be going in the wrong direction again.
The U.S. economy took a huge wrong turn when banks were permitted to make loans to people who never really qualified for them. It will take decades for the U.S. economy to recover from the wounds of the financial crisis. And some economists like me think all this quantitative easing will create long-term problems for America, as our national debt has skyrocketed and the strength of the U.S. dollar has deteriorated.
My question: if creating jobs was one of the goals of quantitative easing, why are so many people falling into poverty?
In 2011, there were 47.5 million people in 10.4 million families in the U.S. economy living near poverty. Called the “working poor,” they are defined as earning less than twice the official poverty rate income of $22,811 per year for a family of four.
To give you some perspective, the working poor are now almost 33% of all the working families in the U.S. economy. In 2010, this number was 31%. In 2007, it was as low as 28%. (Source: Reuters, January 15, 2013.)
Thanks to several rounds of quantitative easing implemented since 2008, there were surely some jobs created in the U.S. economy. But as I have been harping on these pages, the majority of new jobs created since the “big bust” has been in low-wage industries. The rising number of working poor in this country proves the point.
According to the Working Poor Project (aimed at improving economic security for low-income families), working parents in the U.S. economy have taken jobs such as cashiers, maids, waiters and other low-paying jobs where they are offered fewer hours and minimal benefits. One in four low-income parents has one of these types of jobs.
Even Federal Reserve Chairman Ben Bernanke agrees with this occurrence. At University of Michigan, while talking about the U.S. economy, he said, “…we would like to see a stronger labor market…there are too many people whose skills and talents are being wasted.” (Source: Wall Street Journal, “Fed Chief Sees Bond Buys Continuing,” January 14, 2013.)
Quantitative easing; it’s been good for Wall Street and the big banks. For the “working poor,” the statistics show money printing hasn’t helped. Unfortunately, I see a time down the road when hyperinflation becomes an after-effect of too many dollars in the system. At that point, when inflation comes into play, the poor will just fall further behind.
Michael’s Personal Notes:
It’s quite a race…
As countries around the world struggle to grow in 2013, central banks in the global economy are in a race to devalue their currencies. This is one race I predict will end with a bunch of losers.
The central bank of Japan has gained some extra attention lately due to its increased printing activities. The Prime Minister of Japan, Shinzo Abe, made an announcement last week about a new 10.3-trillion yen spending spree to boost Japan’s economic growth. (Source: Financial Times, January 11, 2013.)
But Japan is not the only country involved in printing and devaluing its currency. Other countries in the global economy are doing the same. The central banks of Switzerland, Brazil, and China have taken steps to devalue their currencies. It’s an outright currency war amongst central banks.
Even Russia is getting into the currency devaluation race. The central bank of Russia has been actively buying foreign currencies. It bought 4.83 billion worth of foreign currencies so far in January and purchased 5.15 billion Russian rubbles worth of foreign currencies in December of 2012, as the rising ruble has been hurting exporters. (Source: Bloomberg, January 11, 2013.)
But how useful is the ploy of devaluing currency to stimulate economic growth? Philadelphia Federal Reserve Bank President Charles Plosser recently explained that currency devaluation has no benefit to the global economy. He said, “So central banks and governments need to be cautious about allowing us to slip into a regime like that because that would not be healthy for world trade or for the economies.” (Source: Reuters, “Fed official warns about slipping into currency wars,” January 11, 2013.)
Dear reader, my concern is that there are too many central banks involved in this new (but really old) phenomenon of printing money to lower currency values and stimulate economic growth. If all central banks work to devalue their currencies at the same time, will it work?
Right now, the reason for central banks to print money is declining exports. But I don’t think they realize how bad the situation is on the demand side. Once demands picks up, export growth will eventually follow. Printing more money devalues currencies, but won’t increase demand; rather, the more money printed, the greater chances of inflation and the more expensive exports become—a classic double-edged sword.
Where the Market Stands; Where it’s Headed:
As I have been predicting in these pages, I believe 2013 will be the year the bear market rally in stocks that started in March of 2009 comes to an end. And it may end earlier in the year than most analysts think possible. The stock market is close to its top.
What He Said:
“Many of today’s consumers have purchased properties with very little down payment. They’ve been enticed by nothing-down, interest-only, second and third mortgages. Bottom line: the low interest rate environment sucked consumers into the housing market big-time. And that will eventually cause us all problems.” Michael Lombardi in Profit Confidential, June 22, 2005. Michael started warning about the crisis coming in the U.S. real estate market right at the peak of the boom, now widely believed to be 2005.
This Old Economy Stock’s a Moneymaking Winner~ Ahead of the Street Column, by Mitchell Clark, B. Comm.
 Mitchell Clark |
As part of an ongoing series in this column, we’ve been looking at some of the best long-term performers the stock market has to offer. So far, we’ve considered PepsiCo, Inc. (NYSE/PEP), Union Pacific, and Colgate-Palmolive Company (NYSE/CL). While a track record can’t tell you where a stock is going in the future, for me, it lends a lot of weight to making a new investment decision. What I’m trying to find are great, dividend paying stocks that investors can accumulate when they’re down. If a stock has a history of recovering strongly from periods of price weakness, this lends a lot of credibility to its story.
Looking at railroad stocks specifically, one of the best-performing companies on the stock market has been Canadian National Railway Company (NYSE/CNI), which trades on both the New York and Toronto stock exchanges. Among railroad stocks, this company’s long-term wealth creation on the stock market is unmatched. The company’s dividend yield isn’t as large as other railroad stocks, but its capital gains are very impressive. The company’s stock chart is featured below:
Chart courtesy of www.StockCharts.com
On the stock market, Canadian National Railway (CN) has a track record that can’t be beat by other railroad stocks. The company’s position is unique within the group, as it owns track all across Canada and straight down the middle of the U.S. to the Gulf Coast. The size of this infrastructure in two countries is unique and creates awesome economies of scale that have proven to benefit shareholders very well.
CN is the kind of company that I think blue chip stock market investors can consider when it’s down in price. Of course, this stock market winner isn’t down in price very often, because business is so good. Although economic forecasting is glorified guesswork, the Federal Reserve recently announced that it expects the U.S. economy to grow about 2.5% this year and 3.5% in 2014. If this economic recovery actually happens, which industry will be the first to benefit? It will be the railroad sector, and railroad stocks are some of the best large-cap companies that a stock market investor can consider.
Warren Buffett picked up on this trend a few years ago and bought out Burlington Northern Santa Fe entirely. This was a very good move, and I’m sure it’s highly profitable for his holding company. I think railroad stocks are going to do very well over the next few years, especially as agricultural commodities rise in value. I don’t have a sense as to where the stock market might go, but one thing I wouldn’t do is bet against railroad stocks. The old economy is back, and it’s going to make a lot more money for shareholders.
Boost Your Portfolio Returns with the Emerging Markets~ The Leong Side of the Market, by George Leong, B. Comm.
 George Leong |
Just take a look at the numbers from global credit card provider MasterCard Incorporated (NYSE/MA), as the company is a good global barometer on consumer spending, with its presence in over 210 countries. In a third-quarter press release, MasterCard reported that its worldwide purchase volume surged 12% in the third quarter on a local currency basis MasterCard President and CEO, Ajay Banja added, “Additionally, emerging geographies and governments continue to provide great opportunities for growth.” (Source: “MasterCard Incorporated Reports Third-Quarter 2012 Financial Results,” Yahoo! Finance via BusinessWire, October 31, 2012, last accessed January 15, 2013.)
What’s interesting is the appearance of credit in the emerging markets where cash was once king. MasterCard clearly sees new markets in these growth regions where the per-capita income is rising, helping to drive consumer spending and economic growth.
The iShares MSCI Emerging Markets Index (NYSEArca/EEM) chart below shows the rally since mid-November 2012.
Chart courtesy of www.StockCharts.com
The Brazilian benchmark index, the Bovespa, is up nearly two percent this month, while the Russian Traded Index (RTX) is up a whopping 4.2%. Stock returns in the two major regions, India and China, are up 2.5% (BSE SENSEX India Index) and 1.9% (Shanghai Stock Exchange Composite Index), respectively.
As many of you know, I feel China and India will be the explosive areas for consumer spending, given over one-third of the world’s population lives in these two regions.
“China, followed by India and other emerging Asian economies, is creating a vast new population of consumers, whose growth will continue into the coming decade,” reports consulting firm Bain & Company on its web site (Source: “The Great Eight: Trillion-Dollar Growth Trends to 2020,” Bain & Company, September 9, 2011, last accessed January 15, 2013.) The company’s research suggests that about two-thirds of the world’s growth in the middle class will be derived from China and India, and that will translate into increased consumer spending.
On a smaller but equally important scale, the Little Tigers could be a place to invest some money given the strong consumer spending.
South Korea, the fourth-largest economy in Asia, grew at 6.1% in 2010, but growth is estimated to fall to 3.5% this year, according to the Bank of Korea.
Latin America is also hot for growth for consumer spending. The region’s gross domestic product (GDP) growth is estimated to slow to 3.7% this year, down from 4.5% in 2011, according to the International Monetary Fund (IMF). On the plus, growth is expected to rally to 4.1% in 2013. The key player in Latin America is Brazil, which will be host to the upcoming 2014 FIFA World Cup and the 2016 Summer Olympics.
Another emerging region that will see strong consumer spending growth is Eastern Europe—namely Russia, the largest economy in Eastern Europe, and Poland, the second-largest economy in the region.
To diversify and add possible higher returns, take a look at these emerging markets and the companies that operate there.
Friday, January 25, 2013
The Next Big Thing From The Official Who Predicted Communism's Demise
Herbert E. Meyer served during the Reagan administration as special
assistant to the director of Central Intelligence, and vice chairman of
the CIA’s National Intelligence Council. He is widely credited as
having been the first senior official to predict the fall of the Soviet
Union. He’s also, written a number of good books (including How to Analyze Information: A Step-by-Step Guide to Life’s Most Vital Skill, and The Cure for Poverty: It’s the Free Market: History’s Greatest Invention), plus he often speaks to groups of business executives.
Recently he took time out of his busy schedule to sit down across a Skype connection with me, at the hinge point between 2012 and 2013 to reflect on intelligence, forecasting, what he saw in the 1980s which others did not, and what he sees coming next, which might be even bigger than the fall of the Berlin Wall.
READ MORE: http://www.forbes.com/sites/jerrybowyer/2013/01/03/the-next-big-thing-from-the-official-who-predicted-communisms-demise/
Recently he took time out of his busy schedule to sit down across a Skype connection with me, at the hinge point between 2012 and 2013 to reflect on intelligence, forecasting, what he saw in the 1980s which others did not, and what he sees coming next, which might be even bigger than the fall of the Berlin Wall.
READ MORE: http://www.forbes.com/sites/jerrybowyer/2013/01/03/the-next-big-thing-from-the-official-who-predicted-communisms-demise/
Thursday, January 24, 2013
Still Poised On a Cliff: The Prognosis for 2013 Congressional Action and its Effect on Investors
At the eleventh hour on New Year’s Eve, Washington negotiators reached a compromise to avoid the “fiscal cliff”— the looming combination of tax increases and spending cuts that threatened to throw the country back into recession.
Some sort of compromise was likely. Congress now acts only when there is a “forcing event”—a circumstance where the consequences of inaction are intolerable. The fiscal cliff was such a forcing event. What is worrisome is how much closer to the forcing event we got before a compromise was reached, and how, with each forcing event, Congress kicks an ever-larger can a shorter distance down the road.
Discussed below are the elements of the compromise, a discussion of what we might expect from Washington as 2013 begins, and steps investors might consider in light of these developments.
• Permanently extends the existing tax rates for families with taxable income under $450K ($400K for individuals). For taxpayers with higher income, the lower tax rates in effect for the past decade expired.
• Permanently extends the current $5.12M estate, gift and generation-skipping tax exemptions, and
indexes the exemption amounts for inflation. The estate tax rate is increased to 40% (from 35%).
• Permanently “patches” the alternative minimum tax (AMT) to keep it from affecting more taxpayers in later years.
• Extends unemployment benefits through 2013.
• Extends through 2013 the provision permitting tax-free distributions of up to $100K from an IRA to a charity. This extension provides two favorable transition rules:
• An individual who took an IRA distribution in December 2012 may now contribute that amount to a charity and treat it as an eligible charitable distribution.
• An individual may make a tax-free charitable IRA distribution during January 2013 and treat it as made in 2012. At the same time, there were a number of things the compromise did not do:
• Extend the lower payroll tax rate in effect in 2011 and 2012. Thus, the payroll tax rate reverts to 6.2% (from 4.2%).
• Reduce government spending. The compromise delays for two months the implementation of the
“sequester” government spending cuts that were slated to begin in January 2013.
• Reduce the percentage of American families who pay no federal income tax (currently close to 50%).
• Prevent the implementation of the new 3.8% health care reform surtax on investment income for families with adjusted gross income over $250K ($200K for individuals).1 Because the health care reform surtax applies to families with income over $250,000, but the higher tax rates under the fiscal cliff compromise apply to families with income over $450,000, there are now three tax rates on investment income where before there was one:
Thus, the compromise added to, rather than reduced, the complexity of the tax code. Imminent 2013 Deadlines Finally, the compromise failed to reduce uncertainty and the need for short-term Congressional action.
To the contrary, the compromise leaves the country with three new “forcing events” in the first quarter
2013:
• On December 31, the United States hit its debt limit. The Treasury Department has said it can keep the government running without additional borrowing through the middle to the end of February. If Congress does not raise the debt limit by then the United States will be unable to pay interest on existing debt and will default on its obligations.
• The fiscal cliff compromise delayed the implementation of the sequestration cuts in discretionary federal spending only until March 1. If Congress does not act by then, government spending will be reduced by about two billion dollars over ten years. About half of those cuts will be reductions in defense spending.
• Congress has appropriated funds to run the government only through March 27. If Congress does not appropriate additional funds by that time, the federal government will shut down. As a practical matter, Congress is likely to address these three events together in seeking to craft legislation. A compromise will not be straightforward, however.
The Republicans—stung by the fiscal cliff deal that raised taxes without reducing government spending—will likely demand significant cuts in spending. And it is no longer possible to meet those demands simply by cutting discretionary spending. Only about a third of total government spending is discretionary (defense spending and domestic spending that funds the government agencies). Even if enough discretionary spending
could be cut to make a difference, the parties cannot agree on where the cuts should come.
In general, the Republicans want reductions in social programs, while the Democrats want cuts in defense. Thus, any reduction in spending must be found in the entitlement programs—Social Security and Medicare—that make up the bulk of federal expenditures.
The Democrats will likely demand that any spending cuts be “balanced” with new tax revenues. After the hard-fought compromise in December, another increase in tax rates does not appear to be in the cards. Thus, to satisfy the Democrats, tax revenue must be raised in another manner, such as by curtailing exemptions and deductions.
The home field advantage in this debate appears to shift to the Republicans. Obama held the leverage in the fiscal cliff battle—if Republicans did not meet his demand for higher tax rates, then taxes would go up on everyone. Now the Republicans can threaten to permit a default on government debt and to shutter the government if their demand for spending cuts is not met.
But the Republicans cannot negotiate with complete abandon. If Congress does not act, one trillion dollars of defense cuts will go into effect—cuts that are anathema to the Republicans. And, in reality, no one wants the U.S. to default on its debt, causing a likely breakdown in the world financial system.
the tax code.
The debate over Social Security is likely to focus on the rate of growth of Social Security benefits. Currently, benefits increase each year based on the consumer price index (CPI). The Republicans would like to replace CPI with “chained CPI.”
Chained CPI acknowledges that when the price of an item gets too high, people do not simply pay that higher price, they substitute something cheaper. If the price of beef gets too high, people buy more chicken. Chained CPI does not grow as quickly as conventional CPI. Thus, using chained CPI would slow the rate of growth of Social Security payments. Obama appeared to accept chained CPI in a compromise to raise the debt ceiling in 2011, although that compromise fell apart.
The Republicans might also insist on an increase in the eligibility ages for Social Security and Medicare. And they might propose “means testing” benefits, so that affluent recipients do not get all of their Social Security payments and pay more for Medicare coverage.3 None of these changes likely would apply to individuals currently over the age of 55.
On the tax side, both parties would like to implement comprehensive tax reform to simplify the tax code (although their definitions of “reform” might differ). But comprehensive reform—which requires reconsideration of each tax exemption and deduction currently available—is not possible in the short time available. Instead, Democrats are likely to seek an overall cap on tax exemptions and deductions claimed by affluent individuals and families. Obama and Mitt Romney suggested differing versions of such a cap during the presidential campaign.
A limitation on exemptions and deductions could have far-reaching consequences, including curtailment of the:
• Tax exemption for employer-paid health insurance premiums
• Exemption for interest paid on municipal bonds
• Deduction for pension plan contributions
• Charitable contribution deduction
• Mortgage interest deduction
Although the Republicans will object vigorously to such a cap, curtailment of at least some of these exemptions and deductions is likely to be included in a final plan. The plan also could include a number of “loophole closers,” perhaps directed at the tax treatment of master limited partnerships, carried interests in hedge funds and investment partnerships, and sophisticated wealth transfer techniques such as family limited partnerships, intentionally defective grantor trusts and grantor retained annuity trusts. None of these changes, however, are likely to apply retroactively (although this result cannot be assured).
• Give increased attention to harvesting losses and to buy-and-hold investment strategies.
• Consider tax-efficient mutual funds and other professionally managed tax-advantaged investment strategies.
• Prepay charitable contributions in the next few months.
• Pay down mortgage debt.
• Take advantage of sophisticated gifting techniques.
• Consider investing in annuities and life insurance, which offer tax deferral and provide for investors and their heirs.
1The 3.8% surtax applies only to taxable investment income. Thus, the tax does not apply to nontaxable income such as tax-exempt municipal bond interest or to life insurance death proceeds. Also, the tax does not apply to amounts withdrawn from qualified pension plans and IRAs. The 3.8% tax applies to taxable
investment income only to the extent that income, plus all other adjusted gross income, exceeds $250,000 for a family ($200,000 for an individual). For instance, suppose a family has $200,000 of wage income and $80,000 of dividend income. Total adjusted gross income of $280,000 exceeds $250,000 by $30,000. Thus the 3.8% tax would apply to $30,000 of the dividend income. 2“Ordinary income” is income that is taxed at an unreduced rate. Types of investment income taxed as ordinary income include interest (other than tax-exempt interest), rents and royalties. Dividends, capital gains, and tax-exempt interest are not ordinary income, as they are taxed at lower rates (or not at all). Compensation income (income from a job) also is “ordinary income” because it is taxed at an unreduced rate. The 3.8% does not apply to compensation income. Instead, compensation income is subject to a new 0.9% surtax. The chart addresses only the taxation of investment income.
Family income Ordinary income Tax Rate2 Capital Gains/ Dividend Tax Rate
< $250K 35% max 15% max $250K – $450K 38.8% 18.8% > $450K 43.4% 23.8%
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
3Affluent Medicare recipients already pay higher premiums for regular care (Part B) coverage. The proposal would require them to pay for catastrophic care (Part A) as well.
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
Andrew H. Friedman is the Principal of The Washington Update LLC and a former senior partner in a Washington, D.C. law firm. He speaks regularly on legislative and regulatory developments and trends affecting investment, insurance and retirement products. He may be reached at www.TheWashingtonUpdate.com.
Neither the author of this paper, nor any law firm with which the author may be associated, is providing legal or tax advice as to the matters discussed herein. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. It is not intended as legal or tax advice and individuals may not rely upon it (including for purposes of avoiding tax penalties imposed by the IRS or state and local tax authorities). Individuals should consult their own legal and tax counsel as to matters discussed herein and before entering into any estate planning, trust, investment, retirement, or insurance arrangement.
Copyright Andrew H. Friedman 2013. Reprinted by permission. All rights reserved.
Some sort of compromise was likely. Congress now acts only when there is a “forcing event”—a circumstance where the consequences of inaction are intolerable. The fiscal cliff was such a forcing event. What is worrisome is how much closer to the forcing event we got before a compromise was reached, and how, with each forcing event, Congress kicks an ever-larger can a shorter distance down the road.
Discussed below are the elements of the compromise, a discussion of what we might expect from Washington as 2013 begins, and steps investors might consider in light of these developments.
The Fiscal Cliff Compromise The compromise reached on New Year’s Eve:
• Permanently extends the current $5.12M estate, gift and generation-skipping tax exemptions, and
indexes the exemption amounts for inflation. The estate tax rate is increased to 40% (from 35%).
• Permanently “patches” the alternative minimum tax (AMT) to keep it from affecting more taxpayers in later years.
• Extends unemployment benefits through 2013.
• Extends through 2013 the provision permitting tax-free distributions of up to $100K from an IRA to a charity. This extension provides two favorable transition rules:
• An individual who took an IRA distribution in December 2012 may now contribute that amount to a charity and treat it as an eligible charitable distribution.
• An individual may make a tax-free charitable IRA distribution during January 2013 and treat it as made in 2012. At the same time, there were a number of things the compromise did not do:
• Extend the lower payroll tax rate in effect in 2011 and 2012. Thus, the payroll tax rate reverts to 6.2% (from 4.2%).
• Reduce government spending. The compromise delays for two months the implementation of the
“sequester” government spending cuts that were slated to begin in January 2013.
• Reduce the percentage of American families who pay no federal income tax (currently close to 50%).
• Prevent the implementation of the new 3.8% health care reform surtax on investment income for families with adjusted gross income over $250K ($200K for individuals).1 Because the health care reform surtax applies to families with income over $250,000, but the higher tax rates under the fiscal cliff compromise apply to families with income over $450,000, there are now three tax rates on investment income where before there was one:
Thus, the compromise added to, rather than reduced, the complexity of the tax code. Imminent 2013 Deadlines Finally, the compromise failed to reduce uncertainty and the need for short-term Congressional action.
To the contrary, the compromise leaves the country with three new “forcing events” in the first quarter
2013:
• On December 31, the United States hit its debt limit. The Treasury Department has said it can keep the government running without additional borrowing through the middle to the end of February. If Congress does not raise the debt limit by then the United States will be unable to pay interest on existing debt and will default on its obligations.
• The fiscal cliff compromise delayed the implementation of the sequestration cuts in discretionary federal spending only until March 1. If Congress does not act by then, government spending will be reduced by about two billion dollars over ten years. About half of those cuts will be reductions in defense spending.
• Congress has appropriated funds to run the government only through March 27. If Congress does not appropriate additional funds by that time, the federal government will shut down. As a practical matter, Congress is likely to address these three events together in seeking to craft legislation. A compromise will not be straightforward, however.
The Republicans—stung by the fiscal cliff deal that raised taxes without reducing government spending—will likely demand significant cuts in spending. And it is no longer possible to meet those demands simply by cutting discretionary spending. Only about a third of total government spending is discretionary (defense spending and domestic spending that funds the government agencies). Even if enough discretionary spending
could be cut to make a difference, the parties cannot agree on where the cuts should come.
In general, the Republicans want reductions in social programs, while the Democrats want cuts in defense. Thus, any reduction in spending must be found in the entitlement programs—Social Security and Medicare—that make up the bulk of federal expenditures.
The Democrats will likely demand that any spending cuts be “balanced” with new tax revenues. After the hard-fought compromise in December, another increase in tax rates does not appear to be in the cards. Thus, to satisfy the Democrats, tax revenue must be raised in another manner, such as by curtailing exemptions and deductions.
The home field advantage in this debate appears to shift to the Republicans. Obama held the leverage in the fiscal cliff battle—if Republicans did not meet his demand for higher tax rates, then taxes would go up on everyone. Now the Republicans can threaten to permit a default on government debt and to shutter the government if their demand for spending cuts is not met.
But the Republicans cannot negotiate with complete abandon. If Congress does not act, one trillion dollars of defense cuts will go into effect—cuts that are anathema to the Republicans. And, in reality, no one wants the U.S. to default on its debt, causing a likely breakdown in the world financial system.
Possible Changes
With discretionary spending and tax rates off the table, the discussion around the debt limit and the other upcoming forcing events is likely to involve possible changes to Social Security, Medicare and
the tax code.
The debate over Social Security is likely to focus on the rate of growth of Social Security benefits. Currently, benefits increase each year based on the consumer price index (CPI). The Republicans would like to replace CPI with “chained CPI.”
Chained CPI acknowledges that when the price of an item gets too high, people do not simply pay that higher price, they substitute something cheaper. If the price of beef gets too high, people buy more chicken. Chained CPI does not grow as quickly as conventional CPI. Thus, using chained CPI would slow the rate of growth of Social Security payments. Obama appeared to accept chained CPI in a compromise to raise the debt ceiling in 2011, although that compromise fell apart.
The Republicans might also insist on an increase in the eligibility ages for Social Security and Medicare. And they might propose “means testing” benefits, so that affluent recipients do not get all of their Social Security payments and pay more for Medicare coverage.3 None of these changes likely would apply to individuals currently over the age of 55.
On the tax side, both parties would like to implement comprehensive tax reform to simplify the tax code (although their definitions of “reform” might differ). But comprehensive reform—which requires reconsideration of each tax exemption and deduction currently available—is not possible in the short time available. Instead, Democrats are likely to seek an overall cap on tax exemptions and deductions claimed by affluent individuals and families. Obama and Mitt Romney suggested differing versions of such a cap during the presidential campaign.
A limitation on exemptions and deductions could have far-reaching consequences, including curtailment of the:
• Tax exemption for employer-paid health insurance premiums
• Exemption for interest paid on municipal bonds
• Deduction for pension plan contributions
• Charitable contribution deduction
• Mortgage interest deduction
Although the Republicans will object vigorously to such a cap, curtailment of at least some of these exemptions and deductions is likely to be included in a final plan. The plan also could include a number of “loophole closers,” perhaps directed at the tax treatment of master limited partnerships, carried interests in hedge funds and investment partnerships, and sophisticated wealth transfer techniques such as family limited partnerships, intentionally defective grantor trusts and grantor retained annuity trusts. None of these changes, however, are likely to apply retroactively (although this result cannot be assured).
What should investors do?
Given the higher tax rates implemented by the fiscal cliff compromise and the possibility of even higher taxes through the curtailment of exemptions and deductions, affluent taxpayers should consider the following:
• Give increased attention to harvesting losses and to buy-and-hold investment strategies.
• Consider tax-efficient mutual funds and other professionally managed tax-advantaged investment strategies.
• Prepay charitable contributions in the next few months.
• Pay down mortgage debt.
• Take advantage of sophisticated gifting techniques.
• Consider investing in annuities and life insurance, which offer tax deferral and provide for investors and their heirs.
1The 3.8% surtax applies only to taxable investment income. Thus, the tax does not apply to nontaxable income such as tax-exempt municipal bond interest or to life insurance death proceeds. Also, the tax does not apply to amounts withdrawn from qualified pension plans and IRAs. The 3.8% tax applies to taxable
investment income only to the extent that income, plus all other adjusted gross income, exceeds $250,000 for a family ($200,000 for an individual). For instance, suppose a family has $200,000 of wage income and $80,000 of dividend income. Total adjusted gross income of $280,000 exceeds $250,000 by $30,000. Thus the 3.8% tax would apply to $30,000 of the dividend income. 2“Ordinary income” is income that is taxed at an unreduced rate. Types of investment income taxed as ordinary income include interest (other than tax-exempt interest), rents and royalties. Dividends, capital gains, and tax-exempt interest are not ordinary income, as they are taxed at lower rates (or not at all). Compensation income (income from a job) also is “ordinary income” because it is taxed at an unreduced rate. The 3.8% does not apply to compensation income. Instead, compensation income is subject to a new 0.9% surtax. The chart addresses only the taxation of investment income.
Family income Ordinary income Tax Rate2 Capital Gains/ Dividend Tax Rate
< $250K 35% max 15% max $250K – $450K 38.8% 18.8% > $450K 43.4% 23.8%
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
3Affluent Medicare recipients already pay higher premiums for regular care (Part B) coverage. The proposal would require them to pay for catastrophic care (Part A) as well.
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
About Eaton Vance
Eaton Vance Corp. (NYSE: EV) is one of the oldest investment management firms in the United States, with a history dating to 1924. Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions. The Company’s long record of exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today’s most discerning investors. For more information, visit eatonvance.com.Andrew H. Friedman is the Principal of The Washington Update LLC and a former senior partner in a Washington, D.C. law firm. He speaks regularly on legislative and regulatory developments and trends affecting investment, insurance and retirement products. He may be reached at www.TheWashingtonUpdate.com.
Neither the author of this paper, nor any law firm with which the author may be associated, is providing legal or tax advice as to the matters discussed herein. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. It is not intended as legal or tax advice and individuals may not rely upon it (including for purposes of avoiding tax penalties imposed by the IRS or state and local tax authorities). Individuals should consult their own legal and tax counsel as to matters discussed herein and before entering into any estate planning, trust, investment, retirement, or insurance arrangement.
Copyright Andrew H. Friedman 2013. Reprinted by permission. All rights reserved.
Wednesday, January 23, 2013
What a relief! The madness of child benefit for all ends today
It makes no sense for the affluent middle classes to be showered with taxpayers’ cash, says Boris Johnson
Many years ago, I had the privilege of supervising the expense accounts of the
distinguished leader writers and columnists who adorned, and in some cases
continue to adorn, these sacred spaces. It was, by and large, an easy job.
As you would expect from thinkers steeped in Thatcherite doctrines of thrift
and fiscal rigour, their claims were generally pitiful – second-class rail
fares, potted shrimps, tiny jugs of house wine, the odd subscription to some
unreadable journal of Middle Eastern affairs.
Every now and then there would be an economy drive, an attempt by management
to cut further the meagre demands of my “cost centre” on the overall budget.
I would be summoned for an audience with the glamorous managing editor, who
was called Brenda. “Return to Brenda!” I would sing to myself, as I knocked
on her office door.
READ MORE: http://www.telegraph.co.uk/comment/columnists/borisjohnson/9784103/What-a-relief-The-madness-of-child-benefit-for-all-ends-today.html
READ MORE: http://www.telegraph.co.uk/comment/columnists/borisjohnson/9784103/What-a-relief-The-madness-of-child-benefit-for-all-ends-today.html
Tuesday, January 22, 2013
Who, What, Why: Could the US get a $1tn platinum coin?
Campaigners want to prevent the US's rising debt from bringing government spending to a halt by minting the world's most expensive coin. Could this bizarre scheme become reality?
It sounds like the plot of some whimsical comedy - the 1954 Gregory Peck film The Million Dollar Note springs to mind - but a drive to create super-valuable loose change is being taken seriously in the corridors of Washington DC.
A petition urging the creation of platinum coin worth $1tn (£624bn) has attracted nearly 7,000 signatures and the support of some heavyweight economists.
Experts say the plan would be lawful and should allow the government to keep spending if President Barack Obama fails to convince lawmakers to raise the "debt ceiling" - a cap, set by Congress, on the US government's borrowing ability.
READ MORE: http://www.bbc.co.uk/news/magazine-20951417http://www.bbc.co.uk/news/magazine-20951417
Wednesday, January 16, 2013
Avoiding 'Fiscal Cliff' May Be a Bad Deal for Official Washington
In Washington, many are celebrating the deal to avoid the so-called
fiscal cliff. Some, like The Washington Post, are hailing the "strong
bipartisan votes (on) a big, contentious issue."
Outside of Washington, however, the reviews aren't nearly as strong.
Forty-six percent of voters nationwide approve of the deal, while the identical number disapprove. And the results are very partisan. Seventy percent of Democrats approve, while 67 percent of Republicans disapprove. Among those not affiliated with either party, most (57 percent) disapprove.
There also are indications that perceptions of the deal could quickly become more negative.
READ MORE: http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_scott_rasmussen/avoiding_fiscal_cliff_may_be_a_bad_deal_for_official_washington
Outside of Washington, however, the reviews aren't nearly as strong.
Forty-six percent of voters nationwide approve of the deal, while the identical number disapprove. And the results are very partisan. Seventy percent of Democrats approve, while 67 percent of Republicans disapprove. Among those not affiliated with either party, most (57 percent) disapprove.
There also are indications that perceptions of the deal could quickly become more negative.
READ MORE: http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_scott_rasmussen/avoiding_fiscal_cliff_may_be_a_bad_deal_for_official_washington
Monday, January 14, 2013
Stocks to soar as world money catches fire, Calvinst Europe left behind
The US, Japan, Britain, as well as the Swiss, Scandies, and a string of states
around the world, are actively driving down their currencies or imposing
caps.
They are tearing up the script, embracing the new creed of nominal GDP
targeting (NGDP), a licence for yet more radical action.
The side-effects of this currency warfare -- or "beggar-thy-neighbour’
policy as it was known in the 1930s -- is an escalating leakage of monetary
stimulus into the global system.
So don’t fight the Fed, and never fight the world’s central banks on multiple
fronts.
Stock markets have already sensed this, up to a point, lifting Tokyo’s Nikkei
by 23pc and Wall Street by 10pc since June.
READ MORE: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9773911/Stocks-to-soar-as-world-money-catches-fire-Calvinst-Europe-left-behind.html
READ MORE: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9773911/Stocks-to-soar-as-world-money-catches-fire-Calvinst-Europe-left-behind.html
Friday, January 11, 2013
Delaware's Occupation License Requirements Harm Workers
|
Delaware's Occupation License Requirements Harm Workers
In a May 2012 report the Institute for Justice ranked all the
states with regards to barriers to entry to low- and moderate-income
occupations. Delaware had the 42nd most burdensome licensing laws and was the 25th most extensively and onerously licensed state.
The report documents the license requirements for 102 low- and
moderate-income occupations—such as barber, massage therapist and
preschool teacher—across all 50 states and the District of Columbia. It
finds that occupational licensing is not only widespread, but also
overly burdensome and frequently irrational.
On average, these licenses force aspiring workers to spend nine
months in education or training, pass one exam and pay more than $200 in
fees. One third of the licenses take more than a year to earn. At least
one exam is required for 79 occupations.
Barriers like these make it harder for people to find jobs and
build new businesses that create jobs, particularly minorities, those of
lesser means and those with less education. With an unemployment rate
hovering around 7%, and even higher for those with less education, these
barriers to occupational entry need to be addressed by the state
legislature.
Does it make sense that Delaware is one of just eight states to
require a license to be a travel agent? Is there a benefit to the public
from Delaware requiring licenses for auctioneers, milk samplers, animal
breeders and fisher persons? Does a cosmetologist really need 350 days
of training and to pass two exams? Or a makeup artist an annual $143
license and to pass two exams? Why does a travel guide in Delaware have
to pay $100 a year to operate?
There are common sense alternatives to licensure. Voluntary
certification through professional associations, for example, can
benefit practitioners by enabling them to distinguish themselves, while
consumers remain free to choose among all providers and decide for
themselves how much value to place on such credentials.
There are also third-party consumer organizations, such as the
Better Business Bureau, and more contemporary versions built on new
information and communication technologies, such as Angie’s List, that
enable consumers to hold occupational practitioners accountable for the
quality of their goods and services. These organizations already help
consumers sort through providers in fields where practitioners are
licensed and in those where they are not.
Bottom line, barbers who give bad haircuts will never develop a
customer base and disappear. This market system for evaluating
occupations has worked well for centuries.
Dr. John E. Stapleford, Director
Center for Economic Policy and Analysis
Thursday, January 10, 2013
USDA Requires Little Documentation for $50,000 Discrimination Payouts
Why worry about
the economy? Just claim to be a woman farmer who was discriminated
against. Our tax dollars are being shoveled out to anyone who wants
them.
The U.S. Department of Agriculture will pay up to $50,000 each to female and Hispanic farmers and ranchers who claimed they were discouraged from applying for USDA loans due to perceived discrimination. But those farmers won’t be required to prove that they ever actually farmed.
The payments are part of a settlement agreement reached between the USDA and North Carolina farmer Timothy Pigford that created a $1.33 billion fund to compensate farmers who say they were discriminated against by USDA officials between 1981 and 2000. Previous payments have gone to black and Native American farmers.
The women and Hispanic farmers fund provides different levels of compensation based on the nature of the alleged discrimination. Tier 1(a), as it’s known, is comprised of farmers and ranchers “who sought to apply for a USDA loan but were actively discouraged from submitting an application” due to perceived discrimination.
READ MORE: http://blog.heritage.org/2012/10/11/usda-requires-little-documentation-for-50000-discrimination-payouts/
The U.S. Department of Agriculture will pay up to $50,000 each to female and Hispanic farmers and ranchers who claimed they were discouraged from applying for USDA loans due to perceived discrimination. But those farmers won’t be required to prove that they ever actually farmed.
The payments are part of a settlement agreement reached between the USDA and North Carolina farmer Timothy Pigford that created a $1.33 billion fund to compensate farmers who say they were discriminated against by USDA officials between 1981 and 2000. Previous payments have gone to black and Native American farmers.
The women and Hispanic farmers fund provides different levels of compensation based on the nature of the alleged discrimination. Tier 1(a), as it’s known, is comprised of farmers and ranchers “who sought to apply for a USDA loan but were actively discouraged from submitting an application” due to perceived discrimination.
READ MORE: http://blog.heritage.org/2012/10/11/usda-requires-little-documentation-for-50000-discrimination-payouts/
Tuesday, January 8, 2013
Why More States May Adopt Right-to-Work Laws
Michigan became the 24th state to adopt a "right to work" law—the
controversial provision that prohibits unions from forcing workers to
join and pay dues.
But while the issue is politically charged—protesters marched in the capital of Lansing during Tuesday's voting—Michigan's move is partly a matter of economic survival, some analysts say.
"Michigan is making this move because it saw Indiana do it," said Robert Sikkel, a labor expert in Grand Rapids, Mich. "They're afraid businesses may move to Indiana. Other states are going to look at this too to see if it's best for them."
Though right to work laws have been around since the 1947 Taft-Hartley Act, the movement has been growing since Wisconsin fought a similar battle with unions over two years ago.
READ MORE: http://www.cnbc.com/id/100296460
But while the issue is politically charged—protesters marched in the capital of Lansing during Tuesday's voting—Michigan's move is partly a matter of economic survival, some analysts say.
"Michigan is making this move because it saw Indiana do it," said Robert Sikkel, a labor expert in Grand Rapids, Mich. "They're afraid businesses may move to Indiana. Other states are going to look at this too to see if it's best for them."
Though right to work laws have been around since the 1947 Taft-Hartley Act, the movement has been growing since Wisconsin fought a similar battle with unions over two years ago.
READ MORE: http://www.cnbc.com/id/100296460
Monday, January 7, 2013
Hiring About To Improve For MBA Grads, Salaries Not So Much
The future is looking a bit brighter for business graduates.
The Graduate Management Admission Council (GMAC) is out with a new survey showing that more than three quarters of employers plan to hire new MBA graduates in 2013. This past year, just 69 percent of them hired graduates fresh out of business school.
Even though the hiring prospects are improving,
one economist cautions it's still an employer's market. She says the
new figures do not imply there is some kind of strengthening in the
labor market.The Graduate Management Admission Council (GMAC) is out with a new survey showing that more than three quarters of employers plan to hire new MBA graduates in 2013. This past year, just 69 percent of them hired graduates fresh out of business school.
READ MORE: http://www.cnbc.com/id/100297295
Friday, January 4, 2013
Investors Face Big Risk Over Interest Rates: Blankfein
Lloyd Blankfein is worried that investors think low interest rates will last forever.
"One of the big risks that's looming is complacency. People are once again complacent about the low level of interest rates," the Goldman Sachs CEO said at the New York Times DealBook conference Wednesday.
As a result, there could be losses for investors with portfolios heavy with low interest loans, Blankfein predicted.
"At some point growth will come back. I think its going to come back sooner than people think. Now what's going to happen when growth comes back, interest rates rise?" Blankfein said. "That will have an effect on portfolios and people will have losses."
READ MORE & WATCH VIDEO: http://www.cnbc.com/id/100306183
"One of the big risks that's looming is complacency. People are once again complacent about the low level of interest rates," the Goldman Sachs CEO said at the New York Times DealBook conference Wednesday.
As a result, there could be losses for investors with portfolios heavy with low interest loans, Blankfein predicted.
"At some point growth will come back. I think its going to come back sooner than people think. Now what's going to happen when growth comes back, interest rates rise?" Blankfein said. "That will have an effect on portfolios and people will have losses."
READ MORE & WATCH VIDEO: http://www.cnbc.com/id/100306183
Thursday, January 3, 2013
Auto Loans: Next Bubble to Burst?
Since President Obama took office four years ago, the
U.S. national debt has increased by $5 trillion—50%.
At the same time, the central banks of the U.S., the
eurozone, China, Japan, and England have increased
the size of their collective balance sheets by $7 trillion.
Presto…an unprecedented $12 trillion in new money has
been created out of thin air!
If there is one thing history has taught us, it is this…
The more debt a government piles on, the more money a
central bank creates out of thin air, the more damaging
the eventual consequences.
The next shoe for the U.S. economy is going to fall and,
this time, Washington won’t be able to help.
To spread the word about the hardships we believe are
headed our way, to show you what you’re up against,
we’ve just released our new video, “America in Peril:
The Next Shoe Falls.”
See this presentation now!
U.S. national debt has increased by $5 trillion—50%.
At the same time, the central banks of the U.S., the
eurozone, China, Japan, and England have increased
the size of their collective balance sheets by $7 trillion.
Presto…an unprecedented $12 trillion in new money has
been created out of thin air!
If there is one thing history has taught us, it is this…
The more debt a government piles on, the more money a
central bank creates out of thin air, the more damaging
the eventual consequences.
The next shoe for the U.S. economy is going to fall and,
this time, Washington won’t be able to help.
To spread the word about the hardships we believe are
headed our way, to show you what you’re up against,
we’ve just released our new video, “America in Peril:
The Next Shoe Falls.”
See this presentation now!
Wednesday, January 2, 2013
U.S. borrows 46 cents of every dollar it spends
The federal government
borrowed 46 cents of every dollar it has spent so far in fiscal 2013,
which began Oct. 1, according to the latest data the Congressional
Budget Office released Friday.
The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”
Higher spending on mandatory items such as Social Security, Medicare and interest on the debt led the way in boosting spending compared with the previous year, which also highlights the trouble spots Congress and President Obama are struggling to grapple with.
All sides agreed to discretionary spending cuts and automatic spending cuts last year, but have been unable to agree on ways to control entitlement costs, which are the long-term drivers of deficits and debt.
The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”
Higher spending on mandatory items such as Social Security, Medicare and interest on the debt led the way in boosting spending compared with the previous year, which also highlights the trouble spots Congress and President Obama are struggling to grapple with.
All sides agreed to discretionary spending cuts and automatic spending cuts last year, but have been unable to agree on ways to control entitlement costs, which are the long-term drivers of deficits and debt.
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