John Wasik

CHICAGO (Reuters) – When a profitable company is sitting on tens of billions of dollars in idle cash, why can’t it automatically raise dividends to reward its shareholders? After all, with savings yields at dismal levels – and likely to remain so – those on fixed-incomes could use a boost.

But companies won’t share the wealth, and the reason why they won’t is an indictment of the U.S. government’s inaction on corporate tax loopholes.

The problem in Washington: Corporations are offshoring more than $2 trillion in corporate cash.

One thing is clear based on a Reuters study: Cash hoarding and stock buybacks have not done much to boost share prices.

Companies in the Standard & Poor’s 500 index of the largest industrial corporations are sitting on some $1 trillion in cash. Most of that money has done little or nothing to raise share prices, Reuters has found. Cash as a percentage of the S&P’s market value is nearly double what it was a decade ago – and that’s after one of the worst market crashes in history.

CHICAGO, March 12 (Reuters) – When a profitable
company is sitting on tens of billions of dollars in idle cash,
why can’t it automatically raise dividends to reward its
shareholders? After all, with savings yields at dismal levels -
and likely to remain so – those on fixed-incomes could use a
boost.

But companies won’t share the wealth, and the reason why
they won’t is an indictment of the U.S. government’s inaction on
corporate tax loopholes.

The problem in Washington: Corporations are offshoring more
than $2 trillion in corporate cash.

CHICAGO (Reuters) – Should you be “riding up” the bond yield curve to boost returns in your income portfolio?

While some investors may think that bonds are tame beasts, higher yields always translate into higher risks. There may be some interesting opportunities available to boost income, but you need to be careful. Longer-maturity corporate and Treasury bonds can still give you a rodeo-horse kick.

With the Federal Reserve expected to leave interest rates in the basement for the next two years or so, it’s only natural that you look outside of short-term Treasuries and insured deposits. Many investors have already moved from U.S. short-maturity bonds to longer-maturity issues in corporate, high-yield or corporate “junk bond” funds, according to data from Lipper, a Thomson Reuters company.

By John Wasik

(Reuters) – In an ideally-transparent world, you’d know as much about your broker as you know about the ingredients in packaged junk food label: All of the bad stuff would be instantly on display.

But in the U.S., some of the most important information about a broker is off limits to individual investors.

At present, you can do broker background checks through a web-based system run by the Financial Industry Regulatory Authority, the trade group that regulates the securities industry (FINRA), called BrokerCheck (brokercheck.finra.org).

March 5 (Reuters) – In an ideally-transparent world,
you’d know as much about your broker as you know about the
ingredients in packaged junk food label: All of the bad stuff
would be instantly on display in some kind of nutritional label.

But in the U.S., some of the most important information
about a broker is off limits to individual investors.

At present, you can do broker background checks through a
web-based system run by the Financial Industry Regulatory
Authority, the trade group that regulates the securities
industry (FINRA), called BrokerCheck ().
Or contact your state securities regulator. FINRA’s site
contains incomplete records, since it’s self-reported. And while
state regulators often have fuller reports, most investors will
probably not know that they are available, and those regulators
may not always be accessible nor may their reports be
user-friendly.

By John Wasik

(Reuters) – For many investors who have stayed away from the stock market for the past four years, this is a Hamlet moment. Returns look so tempting right now as stock indexes show their best performance since May 2008, with technology shares leading the way. To invest or not to invest?

Fortunately, you can take a Polonius approach to the market. He’s the father of Ophelia and Laertes who gets stabbed by Hamlet while spying on the vengeful prince of Denmark. Despite his bad timing, he has some great advice: “This above all: To thine own self be true.”

I’m reminded of Polonius’s speech by the notorious bear money manager Jeremy Grantham, who counsels long-term patience and resilience in a recent newsletter. While Grantham is bullish on “high-quality” (dividend-paying) stocks, oil, copper, forestry and farmland, I’m not suggesting you jump into anything before you do some serious self-analysis.

CHICAGO (Reuters) – Every time I hear the rumblings of a broad-based stock rally, a song from The Who echoes in my head: “Won’t Get Fooled Again.”

Well, I’m not going to tell you that this time it’s different, because it’s not. You just can’t predict where the market is going based on two out of 12 months. There are some awful nasty things swirling around out there – European sovereign debt, a dreadful U.S. housing market, oil price increases, Middle East tensions. If you have worry beads, they are probably worn to the nub.

Yet there are some signs that the stock market’s animal spirits are not just howling at the moon.

NEW YORK (Reuters) – My grandmother had a coffee can for spare silver coins. My Dad saved at his local post office in a savings account. Those were a sign of the times — the U.S. postal savings system was the first government-guaranteed savings vehicle, but it disappeared in 1967.

Now, we face a savings landscape that is so much more complicated than the one my grandmother and father faced. At present, there is no universal savings account with one set of rules.

Each year I bemoan the fact that I can’t consolidate the menagerie of retirement accounts I’ve opened and funded over the years. I have Roth individual retirement accounts, rollovers and 401(k) accounts that I’d love to merge, but can’t due to varying tax rules.

NEW YORK (Reuters) – Peter Orszag, former budget director for the Obama Administration and now vice chairman of global banking for Citigroup, sees a “trifecta” of mega financial woes coming toward the end of the year that are unlikely to be tackled by Congress before election day.

Speaking at the Executives’ Club of Chicago on Wednesday, Orszag said he sees this moment as a collision between dysfunctional national politics and the ongoing economic malaise. It is “a rare moment in economic history — a tectonic plate shift,” he says.

I prefer to call what he identifies as the trifecta as a triple-strength witch’s brew: The expiration of Bush-era income and estate-tax cuts and $1.2 trillion in automatic budget cuts triggered by the debt-limit compromise passed last year.

NEW YORK, Feb 17 (Reuters) – Peter Orszag, former
budget director for the Obama Administration and now vice
chairman of global banking for Citigroup, sees a “trifecta” of
mega financial woes coming toward the end of the year that are
unlikely to be tackled by Congress before election day.

Speaking at the Executives’ Club of Chicago on Wednesday,
Orszag said he sees this moment as a collision between
dysfunctional national politics and the ongoing economic
malaise. It is “a rare moment in economic history — a tectonic
plate shift,” he says.

I prefer to call what he identifies as the trifecta as a
triple-strength witch’s brew: The expiration of Bush-era income
and estate-tax cuts and $1.2 trillion in automatic budget cuts
triggered by the debt-limit compromise passed last year.