Archives for January 2012
A Risk-Free Income Generator
What if there were a way for you to own income-generating securities without having to earn the money to buy them? What if you were able to generate billions in profits from this “free” portfolio? That’s exactly what the Federal Reserve is doing, and it’s passing those profits along to the U.S. Treasury. The Fed paid $76.9 billion to the Treasury in 2011. That’s enough to fund the Department of Commerce, Department of the Interior, Corporation for National Community Service, Small Business Administration, National Science Foundation, EPA, Corps of Engineers, and NASA in 2012 and still have … [Read more...]
Random Short-Term Markets
There’s no shortage of financial soothsayers out there selling their wares. Some of their sales tactics are relentless. I know because my customers tell me. I also read until my eyes feel like they’re about to fall out of my head. The sheer magnitude of news and financial data to dig through daily is simply breathtaking; therefore, your ability to quickly separate the wheat from the chaff is an absolute must. It’s not taught in a book—it’s more of an art than a skill. Some of the best investment advice or comments can come when you least expect them. Last week while teaching my kids how to … [Read more...]
What We’re Reading 1-6-12
Fed's Dudley Calls for Government Action to Revive Housing, Scott Lanman and Cheyenne Hopkins, Bloomberg Jobless Tap Disability Fund, Damian Paletta and Dionne Searcey, The Wall Street Journal Farming practices threaten widely grown corn crop, Rick Callahan, USA Today Krugman v. Krugman, Alex Tabarrok, Marginal Revolution Car Makers Gauge Shift In China's Auto Policy, Sharon Terlep, The Wall Street Journal … [Read more...]
Economic Distortion the Play of the Day
The Institute for Supply Management’s December Manufacturing ISM Report on Business was ballyhooed by the market on Monday. The headline PMI increased to 53.9%, up 1.2% percentage points compared to last month. A reading above 50% indicates that the American manufacturing sector is expanding, and the higher the number the more accelerated the growth. Take a closer look at the numbers below and they’re decent, but mixed. Manufacturers’ backlogs of orders are decreasing, though at a slower rate than last month. And the time it takes for suppliers to deliver materials is dropping, an … [Read more...]
U.S. Tax Structure `Wrong,’ Martin Feldstein Says
Jan. 3 (Bloomberg) -- Martin Feldstein, a professor at Harvard University, talks about the U.S. fiscal policy and tax system. He speaks with Tom Keene on Bloomberg Radio's "Surveillance." (Source: Bloomberg) … [Read more...]
Your 2012 Bond Fund Resolution
I hope you made some good money in bonds last year, because it was not a good year for all bond funds. Through November, Bill Gross’s Pimco Total Return Bond Fund, perhaps the most widely held bond fund in 401(k)s, underperformed 90% of its peers, according to Morningstar. Morningstar estimates outflows of $3.6 billion through November. Jeff Tjornehoj, senior analyst at Lipper, expects moderate outflows of around $200 million from the Pimco fund for December, marking the first outflow in a calendar year since the fund’s inception in 1987. Many 401(k) participants suffered in 2011 with their … [Read more...]