The haggling to avert a fiscal cliff brings more movement, with President Obama offering to limit tax increases to those earning over $400K - up from his long-held desire of $250K but well below John Boehner's proposal of $1M. The latter's aides say the offer represents "a step in the right direction" but is too heavy on the tax revenues and too light on the spending cuts. [View news story]
I think that a lot of people do not realize that this is the marginal tax rate. These families/individuals will not be paying 39% on all of their money.
The fine that UBS (UBS) will reportedly pay to settle allegation that it manipulated inter-bank rates is $1.6B, well above the $1B figure that was mooted at the end of last week. UBS Securities Japan will plead guilty to manipulating Japanese interest rates, although the bank will stop short of acknowledging wrongdoing at a group level, thereby averting fears that it could lose its license. [View news story]
How much money did UBS make on this manipulation? I would bet it is more than the total levied. If banks make more on illegal activities than the fines levied, what is the motivation to stop acting like criminals? Of course all big banks are too important to indict (sarcasm), but what about individual criminal charges? The world justice system has become a slave to perceived economic fears, what a travesty.
Fed Policy Supports Stocks Today - Future, Not So Much [View article]
With 200,000 baby boomers retiring a month, I think that the 6.5% unemployment target is doable within the next 3 years. Hopefully, the children in Washington take advantage of this opportunity to refinance the debt, and make some serious changes while they are at it.
Renowned inventor and futurist Ray Kurzweil has been hired by Google (GOOG) to "work on new projects involving machine learning and language processing" - his official title is Director of Engineering. Some of Kurzweil's predictions, such as those on voice recognition, face recognition, wireless peripherals, e-books, and (of particular note for Google) self-driving cars have proven very accurate, though others have been criticized. [View news story]
Did we miss a major central bank tightening overnight? The precious metals sector is lit up bright red following the Fed's addition to QE and what looks like the promise of ZIRP for at least 2-3 more years. GLD -1.1%, SLV -2.2% premarket. Copper and oil join in, the red metal -1.4%, and WTI crude -0.6%. [View news story]
Whitehawk,
I think the Fed should have stopped its expansion of the monetary base in 2009-2010. Pumping more and more money into the system in order to goose spending and borrowing for the purpose of trying to skip the natural deleveraging/recession cycle of business will only lead to more pain in the long-run. Let consumers deleverage and the housing market heal naturally, then we can resume the consumption and repeat the cycle.
Did we miss a major central bank tightening overnight? The precious metals sector is lit up bright red following the Fed's addition to QE and what looks like the promise of ZIRP for at least 2-3 more years. GLD -1.1%, SLV -2.2% premarket. Copper and oil join in, the red metal -1.4%, and WTI crude -0.6%. [View news story]
Expanding the monetary base i,e "printing money" does not cause inflation. Money supply has had little to no correlation with inflation for a long time. It is all about the velocity of money and growth. If these pick up, then inflation will skyrocket, and the academic empty-suits at the Fed will have no way to combat it without taking heavy losses on their security holdings.
The WSJ continues its focus on executive trading at Big Lots (BIG), finding that ten senior managers sold a total of over $23M in stock in March. The sales were made not long before the firm reported slowing Q1 revenues, which sent shares plunging 24% in one day. One of the execs, CEO Steven Fishman, is already the subject of FBI and SEC investigations for $10M of stock sales. [View news story]
It is public information that they made the trades. They were filed with the SEC. I doubt that anything will come of this.
The first drop in comparable sales for McDonald's (MCD) since 2003 has traders buzzing, especially with Wendy's cruising along in positive territory with its own sales. Retail analyst Howard Penney thinks the company is a bit nonchalant about the global erosion of sales, while CNBC's Carl Quintanilla notes the report is like "watching a giant fall to one knee." Shares of McDonald's are only down 0.8% premarket with the sales slump well-telegraphed by the company. [View news story]
Come on. Perpetual growth is impossible. Especially when MCD is everywhere already. Classic scare tactic by MSM.
Today's Read Of The Day: Richard Koo In The Financial Times [View article]
Koo is right. The time for austerity is when the economy is growing 4-5% not 1-2%. However, it is impossible for humans (especially politicians) to think long-term. When things are good politicians will not cut government budget for fear of not getting re-elected, and when things are bad they will continue to spend since the economy "needs stimulus" and they want to get re-elected. It is a vicious cycle that was briefly broken by Clinton, but reignited by Bush's intense desire to stay in office another four years.
Government spending shouldn't be used in GDP calculation anyway. It skews the numbers, and makes it almost impossible to reduce government spending for fear of a recession.
Getting Back To Even: Job Creation Under President Obama [View article]
Wrong, look at the unemployment numbers. Professional salaried jobs usually require college degrees. Workers with college degrees have an unemployment rate of approximately 4%. The vast majority of jobs lost were in construction and the overall housing industry. People need to stop living in the past; housing will take decades to get back to where it was. Workers need to evolve, if they want to work.
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
Chuck,
Your articles are always an informative and exciting read. Not only because of the great writing and excellent points, but because of the genuine helpfulness and respect inherent in your comments to readers. Keep it up!
The S&P probably deserves a multiple of 20 given the Fed is going to be holding short rates at 0% and the 10-year around 2% for many more years, writes David Kotok. Given this and a conservative earnings guess of $90, fair value for the S&P 500 would be 1800 today. As for the end of the decade? If the Fed's going to keep with this, his previous guess of 2K is far too conservative. [View news story]
All things being equal he is right, but equity prices are determined by more than just one factor.
Genworth Recommits To Shareholders By Destroying Their Long Term Care Product [View article]
HowDoYouSleep,
Mackaroo has the right idea. Get her doctor to sign off that she cannot perform these functions and they have to start paying. Get your hands on the contract and read it through, all the requirements will be there. If your mom was sold the policy 20 years ago, these changes will not affect her current policy. Read her policy and consult her doctor.
Ackman Was Too Kind In His Attack On Herbalife [View article]
The haggling to avert a fiscal cliff brings more movement, with President Obama offering to limit tax increases to those earning over $400K - up from his long-held desire of $250K but well below John Boehner's proposal of $1M. The latter's aides say the offer represents "a step in the right direction" but is too heavy on the tax revenues and too light on the spending cuts. [View news story]
The fine that UBS (UBS) will reportedly pay to settle allegation that it manipulated inter-bank rates is $1.6B, well above the $1B figure that was mooted at the end of last week. UBS Securities Japan will plead guilty to manipulating Japanese interest rates, although the bank will stop short of acknowledging wrongdoing at a group level, thereby averting fears that it could lose its license. [View news story]
Fed Policy Supports Stocks Today - Future, Not So Much [View article]
Renowned inventor and futurist Ray Kurzweil has been hired by Google (GOOG) to "work on new projects involving machine learning and language processing" - his official title is Director of Engineering. Some of Kurzweil's predictions, such as those on voice recognition, face recognition, wireless peripherals, e-books, and (of particular note for Google) self-driving cars have proven very accurate, though others have been criticized. [View news story]
Did we miss a major central bank tightening overnight? The precious metals sector is lit up bright red following the Fed's addition to QE and what looks like the promise of ZIRP for at least 2-3 more years. GLD -1.1%, SLV -2.2% premarket. Copper and oil join in, the red metal -1.4%, and WTI crude -0.6%. [View news story]
I think the Fed should have stopped its expansion of the monetary base in 2009-2010. Pumping more and more money into the system in order to goose spending and borrowing for the purpose of trying to skip the natural deleveraging/recession cycle of business will only lead to more pain in the long-run. Let consumers deleverage and the housing market heal naturally, then we can resume the consumption and repeat the cycle.
Did we miss a major central bank tightening overnight? The precious metals sector is lit up bright red following the Fed's addition to QE and what looks like the promise of ZIRP for at least 2-3 more years. GLD -1.1%, SLV -2.2% premarket. Copper and oil join in, the red metal -1.4%, and WTI crude -0.6%. [View news story]
The WSJ continues its focus on executive trading at Big Lots (BIG), finding that ten senior managers sold a total of over $23M in stock in March. The sales were made not long before the firm reported slowing Q1 revenues, which sent shares plunging 24% in one day. One of the execs, CEO Steven Fishman, is already the subject of FBI and SEC investigations for $10M of stock sales. [View news story]
The first drop in comparable sales for McDonald's (MCD) since 2003 has traders buzzing, especially with Wendy's cruising along in positive territory with its own sales. Retail analyst Howard Penney thinks the company is a bit nonchalant about the global erosion of sales, while CNBC's Carl Quintanilla notes the report is like "watching a giant fall to one knee." Shares of McDonald's are only down 0.8% premarket with the sales slump well-telegraphed by the company. [View news story]
Today's Read Of The Day: Richard Koo In The Financial Times [View article]
Government spending shouldn't be used in GDP calculation anyway. It skews the numbers, and makes it almost impossible to reduce government spending for fear of a recession.
Getting Back To Even: Job Creation Under President Obama [View article]
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
Your articles are always an informative and exciting read. Not only because of the great writing and excellent points, but because of the genuine helpfulness and respect inherent in your comments to readers. Keep it up!
The Fall Catalyst Of 2012, Or The Great Cognitive Dissonance [View article]
The S&P probably deserves a multiple of 20 given the Fed is going to be holding short rates at 0% and the 10-year around 2% for many more years, writes David Kotok. Given this and a conservative earnings guess of $90, fair value for the S&P 500 would be 1800 today. As for the end of the decade? If the Fed's going to keep with this, his previous guess of 2K is far too conservative. [View news story]
Genworth Recommits To Shareholders By Destroying Their Long Term Care Product [View article]
Mackaroo has the right idea. Get her doctor to sign off that she cannot perform these functions and they have to start paying. Get your hands on the contract and read it through, all the requirements will be there. If your mom was sold the policy 20 years ago, these changes will not affect her current policy. Read her policy and consult her doctor.