Reuters Money
Where is the real U.S. jobs plan?
Jobs, justice and peace. Have three themes ever been so intimately intertwined since Dr. Martin Luther King, Jr., championed this tri-partite campaign in his 1967 March on Washington?
Unemployment is ravaging the country, especially among urban minorities. Yet Congress has yet to put forward a comprehensive jobs plan to create employment. We’re still fighting two wars and garrisoning troops in Europe and Japan as the jobless rate soars at home. Debt reduction is still a priority over job creation.
The current economic downturn has put the brakes on economic progress for most of the American working class. They shared in widespread growth during the 1990s, but have been falling behind during the latest recession.
The pain has been uneven and most punishing in the inner city and among the young. For white men and women, the jobless rate for those 20 years and older was around 8 percent as of July. For white teenagers (age 16 to 19), the rate was 23 percent.
Unemployment for African-American adults is twice as high as white adults at 16 percent. For African-American teenagers, the rate soars to nearly 40 percent.
Much of the reason that decent-paying jobs have evaporated is that inner cities and suburbs have been de-populated and businesses have left — many of them to wealthy suburbs or overseas. Unionized industrial jobs have also fled.
There’s been great progress made since the end of World War II to create a broad base of high-paying jobs, although the bulk of those positions were in unionized manufacturing companies, nearly all of which have cut back, shut down or outsourced. High-wage jobs left urban manufacturing districts to be replaced by low-wage service jobs or occupational deserts.
Millionaires in favor of raising their own taxes remain hopeful
Though you could argue that any time’s a good time to be rich, perhaps many of the millionaires who support Wealth for the Common Good have grown weary of eating humble pie with those silver spoons.
First President Obama did what many rich liberals considered unthinkable, and kept Bush-era tax cuts on the wealthiest Americans intact during the 2010 lame duck Congress. Then Obama took tax hikes off the table for a last-minute debt ceiling deal last month amidst a standoff by Republicans. For the 2,500 folks of high net worth who joined Patriotic Millionaires for Fiscal Strength, it was like shouting into a gale of anti-tax hike rancor and indifference.
But Wealth for the Common Good co-founder Chuck Collins refuses to give up so easily. The great-grandson of meat magnate Oscar Mayer, Collins acknowledges taxes on the wealthy are off the table in Congress for now. But that doesn’t mean he’ll relent for a second.
“Public opinion has never been more behind our position that we need to restore balance in the tax code,” he says, “and 30 to 50 years of tax cuts for the wealthy should be reversed.”
In keeping with his mix of idealism and indignation, Collins has co-authored a report released Tuesday through Institute for Policy Studies, “Executive Excess 2011: The Massive CEO Rewards for Tax Dodging.” The report details how 25 of the 100 highest-paid U.S. corporate chief executives took home more CEO pay in 2010 than their companies paid in federal corporate income taxes.
“Instead of sharing responsibility for addressing our nation’s fiscal challenges,” notes Collins, who’s also an IPS senior scholar, “corporations are rewarding CEOs for aggressive tax avoidance.” Among them: International Paper Company CEO John Faraci, who received a 75 percent pay hike in 2010 to pocket $12.3 million. Meanwhile, International Paper received a $249 million federal income tax refund — largely thanks to lobbying efforts to have a wood pulp byproduct some eight decades old listed as an “entirely new biofuel,” the IPS report states.
While the IPS report lit up news and blog sites Tuesday, Collins and his allies have also reveled in a timely media flash point these last few weeks: a Warren Buffett op-ed that ran in the New York Times on Aug. 14, “Stop Coddling the Super-Rich.”
I think it is important that wealthy people realize they have a responsibility to the country they live in (and which allowed many of them to gain their wealth in the first place!). It is not practical for a flat tax or anything of that nature. Otherwise, the debt burden will continue to pile up more and more.
http://wwww.smarttaxcpa.com
The best credit cards to get travel rewards
If you want to turn your credit card spending into free flights and hotel stays, it pays to do some homework. Not all cards are created equal.
The consumer review website NextAdvisor.com looked at a stack of credit cards that offer points that can be applied to free travel. Their findings?
The Starwood Preferred Guest American Express card delivered the most hotel bang for the buck. Starwood hotels include Sheraton, The Westin, W, Le Meridien and the St. Regis.
Southwest Airline’s Rapid Rewards Visa was rated tops for building up points for free flights.
“Our reviews of the hotel and airline rewards credit cards are very popular with consumers, and one of the most common questions we get is, ‘How much are the points in each program worth?’ So we decided it was time to perform a detailed analysis to answer that question,” Erik Larson, NextAdvisor.com’s president said in releasing the analysis. “Consumers can use our analysis to make better decisions about which reward program to join or for which reward credit card they should apply.”
NextAdvisor broke down the value per point, factoring in how much it would take to actually get a free flight or free hotel room. Points were given a monetary value, with Starwood’s worth a bit over two cents per point for hotel nights and Southwest’s worth about the same for flights on that airline. That translates to about 10,000 points for $200 worth of rewards.
On the other end was the Hilton Honors Visa, which only translated to about half a cent per point. But NextAdvisor noted that when the money was spent at Hilton properties, card holders got six points per dollar — a very high rate.
5 easy pieces of Social Security advice, information and trivia
Why has Congress raised the Social Security full retirement age but not the early age? Why don’t we fix Social Security’s finances by cutting administrative overhead? Why do Social Security numbers have nine numbers and what do the numbers mean? Who got the first Social Security card?
I get a constant stream of questions about Social Security — no surprise, since benefits are the most important source of income for most retirees. In fact, new data from the Social Security Administration shows benefits accounted for 38 percent of total income for Americans over age 65 and older in 2009 — up from 30 percent in 1962.
The flow of questions picked up speed after I published a primer on the program in the September issue of AARP Magazine. Here are some of the Qs along with my As . . . along with answers to a few questions I wish readers had asked, but didn’t.
Q: They have raised the retirement age for Social Security from 65 to 67 and now want to raise it to 70. Can anyone explain to me why haven’t they raised the minimum retirement age (62) to keep up with the maximum retirement age? Would raising the minimum age to keep it within three years of the maximum help to keep Social Security solvent longer?
A: Social Security’s Normal Retirement Age (NRA) is increasing gradually from 65 to 67 under reform legislation passed in 1983. Lawmakers kept the early retirement age at 62 to continue giving workers a choice to retire early, even though they would receive a proportionally smaller benefit as the retirement age increased.
Monthly Social Security benefits are reduced when you take early retirement. When the full retirement age was 65, the amount of the reduction for taking benefits at 62 was 20 percent; now that the age is 66, the amount of the reduction is 25 percent. When the full retirement age hits 67, the reduction will be 30 percent. The purpose here is to assure that someone filing at age 62 receives about the same in lifetime payments as someone who files later in life.
Keeping 62 as the early retirement age enables workers employed in physically-demanding jobs to retire without having to apply for disability benefits. In fact, proponents of increasing the early retirement age usually feel compelled to include some sort of mechanism to accommodate manual laborers who are no longer able to perform their past employment but are not impaired enough to qualify for disability.
Why is obama and congress cutting social security tax when they know SS is in trouble? Why does the govt. keep robbing SS to fund give away programs to people who don’t want to work and are just looking for a hand out? When I was working I had to take a drug test in order to have a job. The same should be for people want food stamps,wic, unemployment and free housing. The govt. is giving SS to people all the illegals. Illegals can get meicade, I can’t. obama is giving this country away.
Back-to-school is about backpacks, lunchboxes and money skills
The following is a guest piece by Dan Greenshields, CFA, and President of ING DIRECT Investing, a subsidiary of ING Bank, fsb. The opinions expressed are his own.
Parents everywhere are preparing to send their kids back to school. It’s time for new backpacks, lunchboxes, pens, pencils, clothes and electronics.
Back-to-school season also provides a perfect opportunity for parents to pass along to their children the basics of financial literacy. In fact, more than ever, kids may actually be eager for some lessons in saving, investing and budgets.
After all, the media is saturated with coverage of the global markets’ ups and downs. Most young people have probably heard something about the volatility in the economy over the summer and they’ve likely wondered what’s causing it. That curiosity primes them for real-world lessons in personal finance — a topic that largely goes uncovered in schools.
Back-to-school shopping brings a flood of simple questions that can serve as teaching opportunities on budgeting. For instance: How many colored pencils do you really need? What are the different types and prices of pencils? Is there a sale, discount or promotion at one store or another on the same pencil?
My wife and I have two kids of our own and we can attest to the fact that the list of “necessary” school supplies seems to get longer each year. Without planning, it’s easy to break your back-to-school budget.
So sit down with the kids and make a budget before you shop — and then stick to it.
Dan Greenshields has rightly pointed out the need of the hour -TEACHING MONEY SKILLS to CHILDREN. The current financial situation is such that those who don’t learn about money skills will be the ones suffering most.
An uneducated individual armed with a credit card and access to a mortgage can be just as dangerous to themselves and their community as a person with no training who is given a car to drive.
We would not allow one to drive a car without getting a driving license yet we allow people to enter the financial complex world without any financial education.
ID theft protection services are not one-size-fits-all
With an unprecedented string of major data breaches this spring from Sony to Citi and many in between, identity theft protection services have a greater import than ever before. Data-theft victims have a far higher likelihood of being a victim of identity theft than do those whose data was not taken.
But what can protection services do for you if you have had your data stolen? And what can they do for you if you are not at risk from any specific data breach? The multitude of offerings claiming to help can be a confusing mish-mosh of good and bad that takes some work to sort through. And since the services typically cost $10-$20 a month, you should know what your investment buys you before you sign up.
“It’s very difficult for the consumer to really figure out what it is and what services they’re getting,” says Phil Blank, managing director of security risk and fraud for Javelin Strategy & Research, which released a new report on the offerings in the identity theft protection industry. The report says the industry will take in $3.5 billion this year from consumers. About 25 million people have credit monitoring subscriptions, according to Javelin.
Javelin found that more of the offerings were comprehensive — providing monitoring, protection and resolution assistance — and are now even being wrapped together with computer anti-virus tools. The report recommended the industry move to more standardized descriptions and focus less on hype and more on honesty when marketing their products.
The good news from Javelin’s study is that the field is rapidly evolving and adapting to the changing threats. “It’s important for the consumers to know that it’s not one-size-fits-all,” says Blank. “Security is a multi-layered approach.” Because the industry is still young there are new offerings and different approaches being tried all the time. Many services come with free trials that last two weeks to two months, and Blank suggests taking one for a test spin before subscribing.
One trend forecast in the report was the offering of minimal free identity theft services as a means of marketing. AllClearID offers a no-cost subscription (they don’t even ask for a credit card), that provides some basic protection but has none of the bells and whistles of the pricier offerings.
Even looking at just one company can take a little effort. Identity Guard, for example, has four different plans consumers can choose from. Some other popular brands are LifeLock, TrustedID and Privacy Guard. All three of the credit bureaus, Experian, Equifax and TransUnion also sell their own identity theft protection services.
Such a great info! its help me a lot..thanks for sharing! keep it up ya.
Scam artists abound after Irene: How to keep your money dry
There is something about disasters that brings out the best in people — and the worst. Along with the Red Cross and National Guard, scam artists mobilize, too. They see opportunity in people’s misfortune.
“You’ve already been victimized by Mother Nature; don’t be victimized by an unscrupulous contractor,” cautioned Barbara Anthony, who heads Massachusetts’ Office of Consumer Affairs and Business Regulation. “People are vulnerable when they’ve been dealt a blow by a hurricane or a tornado.”
For those who have to deal with the aftermath of Hurricane Irene or know someone who does, beware the scams that are out there already or are certainly on their way. Even if you weren’t affected, but you just want to help, no worries, you’re a target, too.
In fact, post-disaster scams targeting people who want to be charitable got so bad in the aftermath of Hurricane Katrina that the federal government created the National Center for Disaster Fraud has a hotline just for reporting them: (866) 720-5721 or disaster@leo.gov.
Governors and attorneys general in just about every state that felt the brunt of Irene have issued warnings.
“Con artists pretending to be government officials have tried to steal personal information and money following other disasters,” North Carolina Attorney General Roy Cooper said, issuing a warning about con artists posing as government disaster aid officials.
Two of the most common ways storm victims are targeted relate to fixing storm-related damage: Home repairs and tree removal.
Stock market troubles test college parents with fall tuition due
At 44, Mark Dinos is smart and successful, the kind of lawyer you want on your side if you’re in an insurance-related legal case. But the Chicago attorney gives himself less-than-high grades for how he prepared financially for his daughter’s college education; she starts at Northwestern University just days from now.
Ask him how he’ll manage $59,000-plus in tuition, room and board and Dinos (pictured) replies with a self-deprecating laugh: “Prayer. Fortunately I’ve had a very good year and can accommodate some of that. But Northwestern is only allowing my daughter to borrow $5,500 at the student rate. (That is actually the maximum amount that freshman are allowed to borrow in the Federal Stafford Loan program.) She got a $5,000 grant, so Mom and Dad are responsible for the other $49,000. And now I have to go borrow money at the dumb parent rate, 8.6 percent.”
Yet as Dinos braves one financial roller coaster, many college parents who thought themselves prepared now find themselves riding another. For investors with college funds in stocks or stock-based 529 plans, the recent market gyrations are making stomachs churn.
And while financial experts and wealth managers differ on the best way to ride out the wild market, they agree that parents don’t have to sit back passively and watch that hard-earned wealth melt away.
“The problem is that nobody knows when the falling will stop,” says Matthew Tuttle, principal of Tuttle Wealth Management in Stamford, Connecticut. “Imagine it’s the summer of 2008 and the market has gone down, but hasn’t gotten crushed. You decide to push off taking money out of your 529 plan until March 2009, (which was the low of the market). Murphy’s law of investing says that if you leave the money in, it will go down — and if you take it out it would have gone up.”
Tuttle’s conclusion? “You might as well take it if you need it.”
Try telling that to Eve Kaplan, principal of Kaplan Financial Advisors, LLC in Berkeley Heights, New Jersey. “It never pays to sell investments at relatively low levels unless cash flow issues obligate the 529 plan owner to do so,” Kaplan says. Her clients typically pay tuition, then request refunds from 529s, meaning they can delay repaying themselves in down markets. There’s a catch, though: You need the short-term cash flow to pull it off.
Beat high-frequency trading machines by not playing their game
The days of you trying to make a buck actively trading in the stock market are over.
Individuals don’t stand a chance anymore because they are largely competing against rational machines often guided by herd-like irrational forces. The robots can rule in the blink of an eye.
I’m not spouting lines from an Isaac Asimov novel, but citing reality. The machines and people who program and profit from them have won — for now.
I knew it was over for human traders when I heard that high-frequency trading firms were hooking up their data lines directly to exchange computers to gain an extra hundredth of a second in execution time.
High-speed programs are designed to move millions of shares in a fraction of a second to take advantage of small movements in securities prices. These algorithms are ideal Wall Street workers. They don’t need health insurance and you don’t have to pay them bonuses to help finance their Lamborghinis or homes in the Hamptons.
There’s no way to beat the machines, unless of course, you have a faster machine, better programs or the ability to predict the future. Your odds are better in Vegas, which never had great odds for a palooka pulling a one-armed bandit.
Who are you trading against when you take on the machines? Any entity from a boutique investment firm with a handful of “quants” — math majors who flocked to Wall Street for the big bucks — to a mega-bank or hedge fund. Some 60 percent of the volume of the New York Stock Exchange is attributed to high-speed trading, maybe more.
John Wasik is 100% correct when his comments are viewed in terms of day traders. These guys will get kiled when trying to compete with HFT systems. Colocation, Direct Market Feeds, Microsecond Latency, sophisticated algorithms executed in millionths of a second – there’s no way a day trader can be successful except by blind luck. Looking at a screen and applying tried and true Technical Analysis and then deciding to make a trade will be based on old information and the market will have moved – driven by HFT systems.
It is amazing how many firms are trying to sucker newbies in with the promise of get rich schemes through day trading.
In today’s environment, Value Investing for the intermediate and longer term (read trend trading) is the most like avenue to success. Technical Analysis can be applied successfully – just don’t think that as a neophyte day trader you can use these techniques to beat the system.
Funeral planning: How to avoid paying beyond the grave
No one likes to think about the time when they will shuffle off this mortal coil. That’s why getting our parents or even our selves to do estate planning can be such a monstrous task. If you think that’s a hard sell, imagine thinking about paying for your own funeral — before you die.
When a salesperson came knocking on his door, John Hammond didn’t think it was a hard sell at all. The O’Connor Mortuary rep came to his house in Laguna Hills, California home and outlined all the costs for funeral prepayment for Hammond and his wife.
After talking about it, the Hammonds realized it made a lot of sense. “We thought that by paying in advance for our funeral, it wouldn’t put a burden on our children,” he says. It also wouldn’t put a burden on the remaining partner to either pay for it or plan for it. Even better, the costs would be fixed so there would be no need to worry about escalating fees.
What’s more, says Hammond, the sales rep got them to think about questions they hadn’t even begun to ponder. “If we were in another country or another state, we carry a document with us that tells people what we want, who has authority over us [if we died],” says Hammond. “We think that’s worth paying for.” The cost for this peace of mind set him back between $7,000 and $8,000. O’Connor Mortuary even gave him payment options: He could spread it across six months or pay it over five or six years.
Most people, Hammond included, don’t typically think about planning in advance to cover the cost of their own funeral. “If you look at life from birth, every segment of our life is planned,” says Neil O’Connor, owner of O’Connor Mortuary. “This is one area where it’s so taboo in our society and it’s also one thing that is guaranteed that will happen, so why not plan for it?”
But the demographic of those who are thinking about it have changed over the last 18 months. Before it was people 65 and over – now it’s 45 and older. “The Baby Boomers that I work with, they have already had experience with their own parents, and they are much more concerned that their kids are not in the same position,” says Jonathan Blumenthal, a senior vice president at Peak Capital Investment Services in Dallas. “The generation before really didn’t do much about it.”
When you prepay, a mortuary can either choose to put money into a trust at a bank, or work with insurance companies that offer funeral/cremation insurance. When the death occurs, the funeral home contacts the bank or the insurance company and the money is released to the mortuary. The prepayment plan is transferable to other states, says O’Connor, who estimates about 20 percent of the 1,000 families he serves annually prepay.
Planning your funeral can be one of the most important things you do. Some people plan their funerals to take the stress away from loved ones others don’t trust their loved ones to give them a good funeral. Funeral plans can be very detailed and can be conducted to exactly how you want your own funeral to be. They are also an investment. Funeral London
The US government has also a strange logic and philosophy of saving money:
1.
Bailing out the Wall Street speculators with trillions… trillions that created zero US jobs while this money is supposed to be paid back with taxes on the a labor force on ever lower paid jobs.
How many trillions are yet to be thrown at Wal Street and how much more under- and unemployed can US bear?
2.
Obamacare: “pulling the plug on a senior citizen’care saves the budget for 1 teacher job per year”.
How young is old enough to die for the sake of bailing out Wall Street?
3.
Bombing Ghadafi with 200 cruise missiles (at 3 teacher jobs per year a piece) was of such a priority that there was no time to get Congressional approval.
How many more wars to come and how much new budget cuts can the remarcably resilient American sustain?
With such policies and ruling philosophies it’s a no-brainer: GAME OVER.