Your Credit Score could be Wrong

Your Credit Score could be Wrong

  • Posted on: 9 December 2015
  • By: admin

Your Credit Score could be Wrong

According to a report from the Federal Trade Commission (FTC), 20% of Americans have errors on their credit report. You can read about it at http://www.foxbusiness.com/personal-finance/2013/02/12/ftc-1-in-5-have-credit-report-errors-do/

 

Why You Should Care

I saw this story on 60 Minutes on Sunday and I had to pass it along. Most of us work hard to keep our credit clean so we can take advantage of lower interest rates on loans for which we are approved. But 20% of Americans actually have errors on their credit report, errors that have been made by the reporting agencies themselves. From erroneous late payments, to closed accounts still listed as open, to someone else’s bad debt showing up on your credit report, these errors can be costly. Make sure you check your credit report regularly and report any errors immediately. Who knows, it could be the difference in you securing your dream home.

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Better Late than Never? U.S. Sues S&P over Bond Ratings Prior to Financial Crisis

Better Late than Never? U.S. Sues S&P over Bond Ratings Prior to Financial Crisis

  • Posted on: 9 December 2015
  • By: admin

Better Late than Never? U.S. Sues S&P over Bond Ratings Prior to Financial Crisis

After nearly five years, the U.S. Justice Department is filing a lawsuit against Standard & Poor’s over S&P’s ratings of mortgage bonds prior to the financial crisis of 2008. You can read the Reuters article at http://www.reuters.com/article/2013/02/05/mcgrawhill-sandp-civilcharges-idUSL1N0B495Q20130205

Why You Should Care

This may be a case of too little too late, but it is long overdue. There are so many culpable parties when it comes to the negligence surrounding the explosion of the mortgage bond market, but ratings agencies, like S&P, that seemingly just slapped AAA ratings on what turned out to be pools of subprime, and ultimately worthless, mortgages were a major factor in allowing these toxic instruments to infiltrate and infect the broader financial system. 

The case brought by the Justice Department is a civil case, which means unfortunately no jail time in the event that the U.S. wins. It’s almost laughable that a single person who was involved in the creation, rating, sale, and service of these toxic products has yet to go to jail. But hey, if we can’t even go after Jon Corzine, why would we ever expect to be able to go after the people that caused one of the worst crises and recessions in history?

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Europe says “Don’t Forget about me!”

Europe says “Don’t Forget about me!”

  • Posted on: 9 December 2015
  • By: admin

Europe says “Don’t Forget about me!”

After a prolonged period without many market jarring news stories, Europe has once again reminded us that all is not well across the pond. You can read the Bloomberg story at http://www.bloomberg.com/news/2013-02-03/euro-tremors-risk-market-respite-on-spain-italy-banks.html

 

Why You Should Care

For much of 2012, Europe’s woes caused a manic shift by investors from risk on to risk off, but the last 3+ months have been very quiet, some may even say too quiet. Europe continues to be a hotbed for potential danger, but European officials have done a better job of talking risk down, and basically indicating to financial markets that they will do whatever it takes to keep the Euro going. 

For equity markets, one of the potential upside drivers that we identified in our 2013 Outlook presentation, which can be viewed at http://pathlightinvestors.com/category/news-category/pathlight-investors%E2%80%99-2013-outlook-presentation, was a stabilized European economy that could return to growth by the end of 2013. We still have much work to do, but hopefully these recent rumblings won’t derail the progress.

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Unions now Questioning Obamacare due to Rising Healthcare Costs

Unions now Questioning Obamacare due to Rising Healthcare Costs

  • Posted on: 9 December 2015
  • By: admin

Unions now Questioning Obamacare due to Rising Healthcare Costs

In an interesting turnaround, many unions are now questioning the Affordable Care Act, also known as Obamacare, saying that implementing the Act will raise costs and make union workers less competitive. You can read the Wall Street Journal article at http://online.wsj.com/article/SB10001424127887323854904578260313912570432.html

Why You Should Care

Wow, did you see this one coming? In a classic case of not reading the fine print, one of the largest pro-Obamacare blocks, Labor, is now questioning the benefits of healthcare reform and is demanding federal subsidies to help them pay for the rising costs associated with implementation of Obamacare for their membership. 

I find myself simply shaking my head in disbelief as I read this article. We force through a bill that no one in Congress has read, supported wholeheartedly by Labor, and now they want the government to help them pay for it. Are you serious? Have we reached the peak of insanity yet? Maybe labor unions will start to picket the White House?

Consequently, if the WSJ link above doesn’t work for you, you can get to the article through this link http://www.theblaze.com/stories/2013/01/31/union-leaders-epiphany-leaves-them-scrambling-wait-obamacare-is-going-to-drive-up-our-costs/

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U.S. GDP Contracts in 4Q – What’s the real story?

U.S. GDP Contracts in 4Q – What’s the real story?

  • Posted on: 9 December 2015
  • By: admin

U.S. GDP Contracts in 4Q – What’s the real story?

U.S. gross domestic product (GDP) contracted by 0.1% in the 4th quarter of 2012 versus the same period in 2011, below the expectation for 1% growth. This was the first contraction since 2Q09. You can read a recap at http://www.businessinsider.com/us-advance-q4-gdp-2013-1

Why You Should Care

Although we never want to see a contraction in GDP, the initial 4th quarter report is stronger than the 0.1% decline would have you believe. Two main factors are to blame for the negative number, the reduction of inventory and government spending cuts. On the inventory side, businesses built up inventories in 3Q12 but reversed course in 4Q12 which lowered GDP by 1.1%. Additionally, cuts in government spending, namely a 22% decline in defense spending which was the worst decline since 1972, chopped another 1.3% from growth.

If you look at the main driver of the economy, consumer spending, we actually saw acceleration of growth to 2.2% from 1.6% last quarter. Additionally, business investment grew by 9.7%.

So, all in, while a contraction in GDP isn’t what we want to see, if you look under the hood of the announcement you find a stronger economic picture that may actually be gaining momentum. 

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Immigration Reform Beginning to Take Shape

Immigration Reform Beginning to Take Shape

  • Posted on: 9 December 2015
  • By: admin

Immigration Reform Beginning to Take Shape

A bi-partisan group of 8 U.S. Senators will unveil a general agreement on immigration reform. You can read the AP story at http://www.cnbc.com/id/100411493

Why You Should Care

Immigration has to be addressed, and although there are many details that need to be hammered out between here and the passage of a large deal, it is a start. Our immigration system is broken. People that want to come here to work, can’t do so legally, people that want to be contributing members of this society aren’t allowed to stay in the U.S. after they graduate from college, and unfortunately, people that want to emerge from the shadows of illegal immigration can’t due to the increased odds of deportation in this anti-immigrant age in which we live.

Let’s get back to our roots as Americans, and open our arms to those that want to work hard and make a better life for their families. The addition of these people will help all of us prosper.

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U.S. Senate Being Told “Do your Work, or don’t get Paid!”

U.S. Senate Being Told “Do your Work, or don’t get Paid!”

  • Posted on: 9 December 2015
  • By: admin

U.S. Senate Being Told “Do your Work, or don’t get paid!”

The House of Representatives will vote on legislation today that will push the debt ceiling deadline back to May 18th and to withhold pay for Senators if the Senate doesn’t pass a budget. You can read the story at http://abcnews.go.com/blogs/politics/2013/01/boehner-pressures-senate-to-pass-budget-or-have-pay-withheld/

Why You Should Care

What a novel concept, not paying someone if they aren’t doing their work. Although it’s a publicity stunt being used to spur action by a Senate that hasn’t passed a budget for four years, even though it is required by law, it’s finally a publicity stunt that Washington should have.

How many times can politicians get away with not playing by the same as all of us? If you don’t do your job, you get fired, period. If politicians don’t do their job, it’s called gridlock, and that’s supposed to be a good thing. It’s about time we demand that our politicians earn their paychecks and those pensions that come along with a term in Congress. 

We have seen too many times how the rules don’t apply to our elected representatives. Their healthcare is different, they get pay raises every year, and one of my personal favorites, until recently, they weren’t subject to the same insider trading laws established by the SEC. Enough is enough.

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Sandy Relief Bill Passes – We Just Spent the Tax Increases for 2013

Sandy Relief Bill Passes – We Just Spent the Tax Increases for 2013

  • Posted on: 9 December 2015
  • By: admin

Sandy Relief Bill Passes – We Just Spent the Tax Increases for 2013

The House finally passed a $51 billion relief package for Hurricane Sandy yesterday, but without cost cuts to offset the distribution, the revenue from the increased taxes on wealthy Americans for 2013 has already been spent. You can read the story at http://www.huffingtonpost.com/2013/01/15/sandy-relief-measure-passes_n_2480328.html

Why You Should Care

This isn’t a post about Hurricane Sandy relief. We need to help our community when it is impacted by devastating disasters. Sandy relief should have been handled prior to all of the fiscal cliff bombast at the end of the year. This is a post about the dynamics of Washington and how you just can’t get ahead when it comes to actually reducing deficits and spending, and how higher taxes can’t save us.

In one vote on the floor of the House, all of the money we expect to generate from the higher taxes on Americans making over $400,000 in 2013 is gone. Conservative Republicans tried to attach an amendment to the legislation that would have required an across the board 1.67% cut to discretionary spending in order to pay for the relief package. It would most certainly have delayed the relief effort for Sandy victims, so I’m happy we are finally sending money, but until we are willing, as a nation, to go without something, we won’t be able to accomplish anything. This is just another example of politicians telling us all that they will get to the cuts…eventually. But we all know those cuts aren’t coming.

In 12 months we will turn the calendar to 2014 and I’m certain that another disaster will happen that will require federal funding. Another program will pop up that is “vital” to our nation. Another country will need military help. The point is, it never stops, and before we can take in new money from taxes, they are already spent. Not to mention the $16 trillion of debt currently on the books that needs to be repaid. Have we become so jaded as a nation that we think we can get out of this mess without feeling any collective pain?

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China May Open Stock Market Gates to Foreign Investors

China May Open Stock Market Gates to Foreign Investors

  • Posted on: 9 December 2015
  • By: admin

China May Open Stock Market Gates to Foreign Investors

Chinese officials hinted at their desire to increase the amount of foreign investment in Chinese stock markets. You can read the story at http://finance.yahoo.com/news/china-hints-far-wider-welcome-111013559.html

Why You Should Care

It’s no secret, China represents a tremendous opportunity for investment--with a growing middle class, large population, and manufacturing dominance--and foreign investors want access to local stock markets to take advantage of these trends. Chinese stock markets aren’t considered the most transparent, but an increase of foreign direct investment should help to shed light on inconsistencies and help to drive greater regulation that will ultimately lead to more stability and safer investments.

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Cost Cuts and Tax Increases Give California Budget Surplus

Cost Cuts and Tax Increases Give California Budget Surplus

  • Posted on: 9 December 2015
  • By: admin

Cost Cuts and Tax Increases Give California a Budget Surplus

In one of the biggest turnarounds we’ve witnessed, California, which recently was facing a $16 billion budget deficit, now predicts an $851 million surplus thanks to Governor Brown’s new budget plan. You can read the Reuters story at http://www.huffingtonpost.com/2013/01/10/california-budget-surplus-2013_n_2450349.html

Why You Should Care

If California can do it, can’t Washington do it? This is one of the quickest and most impressive turnarounds we’ve witnessed. It appears the recent tax increases residents voted for, along with the will to fight reversing spending cuts made to social programs during the recession, dare we say a balanced approach, has yielded fruit. Congratulations California. It is sad however, that high income earners could see their combined tax rate rise to over 50% due to the passage of Prop 30 as well as increases to the top federal tax rate, capital gains rate, dividend rate, payroll tax, and new healthcare tax. 

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