Financial news 07/31/2012

• ZH: Declassified document shows Fed's intent to manipulate gold price
• InvestorPlace: Weak corporate revenue gains place 3Q earnings at risk
• CNBC: Secret analysis on corporate defaults too alarming to publish
• BLS:  Personal incomes between April-June rose .5%, CPI J-M 1.6%
• AOL: Employer healthcare to shift toward employee healthcare 
• AP: Corn September futures prices rose to record high $8.20/bushel
• BI: Government bond ratings in jeopardy if municipalities bailed out
• CNNMoney: London won't lose too much from hosting 2012 Olympics
• IBD: Egan-Jones rating agency outlook for Italy and Spain is dire
• Reuters: ECB action on Eurozone crisis likely weeks away
• BBC: Japan's June industrial output fell .1%; third consecutive decline

Financial News 07/30/2012

• BusinessWeek: MetroPCS testing $19.99 Wi-Fi cell phone plan
• CBS: Olympic athletes' second jobs: Construction, teaching & medical
• CNBC: Corporate leaders serve avarice at expense of U.S. prosperity
• CNNMoney: Over 7 mln people over age 50 still paying student debt 
• IBD: Home construction ramped up 4.9% despite 8% sales slump
• IP: Globalization must come "full-circle" for U.S. to compete well
• Option Queen: Hundreds of NYBOT floor brokers & staff to be let go
• Reuters: Fed and ECB issue consecutive monetary decisions this week
• AP: "Coming days" will lead to Eurozone debt crisis decision 
• BBC: IMF warns of problems from Spanish double-dip recession
• MarketWatch: Hyundai to recall 221,630 Sonatas and Santa Fes

Financial news 07/27/2012

• The Street: Paper-gold to bullion ratio in NY & London markets is 100:1
• Bloomberg: Less than 200 people donated 80% of super-PAC funds
• NYT: Treasury Secretary vows criminal investigations of interest-rate fraud
• CNBC: Corporate earnings expectations for Q3, 2012 in negative territory
• BEA: GDP for Q2, 2012 was 1.5%, down from 2% in Q1, 2012
• AP: Fewer business orders & weak R.E. data point to slower economy
• InvestorPlace: Some recently bullish small-caps are set to "cool off"
• Reuters: Facebook shares drop after lacking forward revenue guidance
• MW: Some retiree destinations restrict Americans from buying real-estate
• Zero Hedge: Equity index margins on CME lowered by 20-25%
• BBC: French lawmakers throw out bill legislating audit of their expenses

What book runners do in investment banking

US-PDGov

Book running is a function of investment banking that coordinates the sale of new securities. In this sense a book runner is a securities underwriter; however the book runner is considered the primary facilitator of the underwriting of financial securities such as stock, convertible bonds, and bonds. A book runner does not have to be an individual, but also refers to a firm or corporation such as an investment bank per Reuters news agency.

Goldman Sachs, Morgan Stanley and JP Morgan Chase are all book runners because they are investment banks that facilitate the capitalization of businesses. For example, in June 2011, the Internet Networking website LinkedIn became a public corporation. In becoming a public corporation new shares were issued by LinkedIn's securities underwriters. LinkedIn's lead underwriter or book runner was Morgan Stanley according to USA Today.

Book running is regulated by the the Securities Act of 1933, and the Securities and Exchange Act of 1934 and the Investment Company Act of 1940 as amended in 2010. The particulars of securities underwriting, and hence book running are detailed in this act. For example, Section two, part 40 of the Investment Company Act defines 'underwriter' as any person who, for more than the price of commission, buys and sells securities from an issuer, or who sells securities for a securities issuer for purposes of distribution.

In terms of the aforementioned definition, the primary underwriter is the book runner. Book runners must also be registered with the Securities and Exchange Commission SEC and are monitored by the Financial Industry Regulatory Authority. According to FINRA, individual securities dealers whose employing firms are FINRA members must also be registered  with the regulator. Book running or securities underwriting subsidiaries are listed at the Federal Reserve Bank website.

If a large initial public offering such as the one scheduled via a Form S-1 by Groupon, Inc. on June 2, 2011 with the Securities and Exchange Commission has multiple underwriters, there can also be more than one book runner. To illustrate, the SEC filing states Morgan Stanley, Credit Suisse and Goldman Sachs as the underwriters. However,  in July 2011 Groupon, Inc. filed an amendment to its original Form S-1. This amendment added 11 additional underwriters to work on the Groupon, Inc. IPO. Of these 11, one additional book runner was added, specifically J.P. Morgan.

In summary, book running is a financial colloquialism referring to the more formal term of lead underwriter that is a task performed within investment banks. Lead underwriters are the regulated financial institutions or investment banks responsible for selling and distributing financial securities for the purpose of capitalization. Capitalization itself is performed for a number of reasons including initial public offering as is the case with Groupon, Inc. Book runners are utilized for their experience, know how and capacity to raise capital for businesses and other organizational entities via financial markets.

Financial news 07/26/2012

• BI: Overwhelming majority of Republicans vote to audit the Fed
• Fox Business: Senate passes tax cut extension for middle-class
• AP: Food prices to rise in 2013 due to 2012 drought per USDA
• Reuters: Walmart sued over ATMs inaccessible to disabled persons
• CNBC: Bond business pressured by trading technology and regulations
• DOL: Jobless claims wk ending 07/21, 353K, average down to 367.25K
• IBD: Zynga earnings miss a close pressure on Facebook shares
• InvestorPlace: Next 60-90 days fraught with equity market risk
• CNNMoney: Economists blame low GDP on consumer spending
• BBC: UK economy shrank .7% in Q2 '12, largest decline since1950s
• NASDAQ: Italian debt rating cut to CCC+ from B+ by Egan Jones
• Bloomberg: Chinese policy likely to hold back on stimulus per IMF

Impacts and purposes of Federal Reserve Bank monetary policy

Economically, the "Great Depression" had a much larger effect than the "Great Recession" according to the following infographic. However, what stands out the most is the increase in money supply, also known as liquidity, during the Great Recession. Specifically, the Federal Reserve Bank increased money supply by 125% whereas during the depression, the Federal Reserve only increased money supply by 17%.

The effects of such an aggressive monetary policy are economic stimulus via a decline in the value of the dollar, and more affordable interest payments on U.S. securities. To illustrate, when monetary policy facilitates lower interest rates on debt, variable rate U.S. treasury payments decline costing the country less. Also, when the government pays foreign governments interest on Treasury Securities, even if the interest rate remains the same, the value becomes lower as the dollar is worth less via looser monetary policy. Additionally, as the dollar declines, multinational corporations bringing money back to the U.S. that was earned in a foreign currency becomes worth more, nominally speaking.

Monetary policy is not without its critics however. This is evident in the second infographic below. Moreover, opponents of the Federal Reserve claim loose monetary policy creates asset bubbles, raises the cost of oil that is priced in dollars, facilitates higher national debt that is currently over $15 trillion, and decreases the worth of individual Americans via dollar devaluation and inflation.  What's more, since the Federal Reserve Bank has not been fully audited, the central bank lacks credibility per its skeptics.

How the Great Depression differs from the Great recession:

The Great Depression vs. The Great Recession by Payday Loan.co.uk

Why the Federal Reserve Bank's monetary policy is controversial:

Source: Best Accounting Schools

Financial news 07/25/2012

• InvestorPlace: Rising dollar weakening multinational income repatriation 
• NYT: NY Fed's regulatory ability questioned amidst interest rate scandal
• Daily Finance: Bank bonuses a tough sell alongside corporate restructuring
• BusinessWire: Apple profit up, but $1.04/share short of analyst estimates
• BI: Wishing luck boosts performance more than praise per experiment
• Commerce Dept: June new home sales 350K, down  32K from May
• ZH: Fed monetary policy makes capital markets more of a "branch office"
• AP: International shipper UPS says global economy to get worse
• IBD: Eurozone more tight-fisted as Italy & Spain borrowing costs rise
• BBC: Greek PM says recession to be deeper than expected
• Bloomberg: China economic downtrend fueled less investments per IMF
• Reuters: Japanese June exports fell 2.3% yr over yr on ¥61.7 bln surplus

Guest post: How to maximise your chances of getting government funding for your business

US-PDGOV

By Andrew

Banks and other private lenders are not the only parties to ask for funding assistance if you need financing for your business. There are various state and federal programs that are providing and managing grants or funding allotted to troubled or needy businesses. There are specific government agencies or institutions that are tasked to offer and provide such grants.

Government funding is just out there, waiting for the right business applicants that need financing. But the financial assistance will not be easily and quickly provided to just about any company. The government funding agency has to make sure the money will not be put to waste. It may have its sets of requirements and standards to screen and approve/disapprove funding applications. How can your business maximise its chances of getting funding from any government granting agency?

•   Write and put up a well defined and clear mission statement for the business. Some people think the mission statement is just for formality but government funding agencies and institutions look at it as a necessary factor especially when granting and awarding government funding. The statement should effectively convey the essence and goals of the business.

•   Write a good grant letter. It should effectively persuade specific government agencies to consider providing or awarding grant to the company. Some business owners hire experienced grant writers to write the grant letter, which is necessary to complete the grant application or proposal.

•   Set clearly defined and ideal outcomes for specified projects. The business may be seeking grant funding for particular projects. It should present a projection of how those projects will do well and how those can bring about desired outcomes. Government funding agencies also need to make sure the money they provide to businesses will be returned on or before the specified duration.

•      The financial systems of the company should be in place to effectively project, show, and track how the potential funding will be spent. Government funding agencies need to make sure there is a sound financial system. This is necessary to protect the funds granted to businesses. Those may decline or refuse a grant application if the financial system of the company is not in good state. 

•    There should be programs that will ensure overall sustainability of the business. Community projects should also be well presented and should clearly give an idea how those will be used for the advancement not just of the business but also of stakeholders and the communities. Government agencies want to be sure their funding will be well and sensibly spent.

•     There should be specific actions or measures to recognise and/or honour grant donors. This is not just for flattering government funding providers but to give them what is due to be accorded to them following the grant. 

•       The business should ensure that it has independent contractors or specific employees who will manage the grant. Those should also be tasked to complete required reports that are required or mandated on a regular basis by government agencies or foundations. 

Andrew has been working in the finance industry for several years with a specialty in business finance. Andrew has a BA in Business Administration and has written numerous articles in prominent finance blogs.

Financial news 07/24/2012

• CNBC: Companies with strong regulatory compliance prove fraudulent
• CNNMoney: Federal gridlock over tax cut expirations cost $1.3 billion
• Business Insider: All four components of GDP "are in trouble"
• AOL: Survey says 26% of financial service professionals "do wrong" 
• NASDAQ: U.S. manufacturing index slowed to 51.8, lowest since 12/10
• Reuters: Cisco Systems to cut 1,300 jobs in corporate restructuring
• Bloomberg: Public pensions $4.6 trillion short of assets, or 41% funded
• AP: Fears are spreading that Spain will need an unaffordable bailout
• KEYC-TV: Moody's puts German AAA credit rating on negative watch 
• BBC: Spanish regulator banned short-selling to slow market decline
• MarkteWatch: Spanish 10-Yr bond yields recently surged to 7.44%

Financial news 07/23/2012

• CNNMoney: Dodd-Frank Act nearly 70% unimplemented
• Reuters: Tax havens hide $21-$32 trillion per banking analysis
• BI: Multiple indicators point to U.S.recession per Comstock
• CNBC: Earnings reports and guidance also indicate recession
• NYT: Healthcare costs to near 25% of national income by 2037
• IP: Democrats don't fear fiscal cliff due to demand for higher taxes
• Option Queen: Dollar solid until higher yields sought on treasuries
• AP: Lower yield on German safe-haven bonds is saving billions
• Bloomberg: Greece unlikely to keep up with financial obligations
• Spiegel: IMF and Eurozone nations unwilling to offer new Greek aid
• Fox Business: Syrian "wild cards" more possible & bearish for markets

How much owning a cat costs

PD

Cats are not cheap, even though they might seem to just need food instead of batteries. Cats require food, hygiene supplies, and equipment to be domesticated. Cost Helper claims the average cost of food over a 10 year period amounts to $1,888. The costs add up as well; after adoption fees, set up costs, and 14 years of care,  Petside estimates the total cost of owning a cat is between $8,0000 - $10,000. That's a low estimate compared to Cat World's of $14,000 for the same period of time.

Ferel cats aren't cheap either. According to the American Medical Veterinary Association, ferel cats cost tax payers $16 billion. Those costs go toward trap-neuter-return programs, or less pleasant things such as euthanasia. The Solana Ferel Cat Group states TNR programs are also the cheaper alternative, costing 50 percent less than euthanasia methods of animal control. Responsible pet ownership programs are a key part of keeping these costs under control as they reduce excess breeding, temporary housing costs and catch and release expenses.

A low-budget cat helps lower costs to approximately $5,000 over its lifetime; this is a substantial savings. For example, bulk alternatives to litter such as aspen bedding is more cost effective. This can also be obtained from farm supply stores for around $20 for 2.2 cubic feet. Compared to conventional litter, which might last a little longer, it is still a better deal because there's up to seven time more of it, and it is much lighter to handle than sand and clay litters. Other cost saving methods include adopting free cats, using hand-me-down cat supplies or thrift items for bowls and litter boxes, and hand making cat toys.

Unforeseen cat expenses are often a reality and include medical costs and damage to furniture. Preventing damage from lonely cats can also be costly if another cat becomes the solution to that problem. To help reduce medical costs, pay close attention to the cats living environment and individual health. For instance, preventative flea treatments cost far less than veterinary visits stemming from flea problems. Additional preventative measures include brushing your cat's teeth, spaying/neutering, vaccinations and micro-chipping.

Financial news 07/20/2012

• Daily Finance: Warren Buffett warns of municipal bond bankruptcy trend

• CNNMoney: Investors recently turned greedy per greed index

• Bloomberg: WS banks may sue each other over interest rate manipulation

• CNBC: QE ineffective per Trump; national debt & fiscal cliff top priorities

• IBD: Factory slowdowns an economic headwind to slow housing recovery

• InvestorPlace: Gold a risky buy without Fed. quantitative easing

• BBC: Google Q2, 2012 profit up 11%; Microsoft loses money for first time

• MarketWatch: Oil prices retracing May 2012 levels near $92/barrel

• Conference Board: Leading Economic Index down .3% to 95.6 for June

• AP: Lower June home sales & higher joblessness slow economic growth

• BI: Chinese economic slowdown evident in this Societe Generale analysis

Lower cost e-book sales are gaining ground on traditional formats

More affordable e-readers have made e-books more feasible 
 (Click on graph to enlarge)

Image attribution: Taylorlurker

Access to free classics, multifunctional tablet computers and cheaper books has helped bolster adult fiction book sales to the number one revenue maker over hardcovers of the same genre per the Association of American Publishers. The U.S. trend toward digital books grew to $2.07 billion in 2011, and for now, is more cost effective than traditional formats.

Complete article link: http://www.helium.com/items/2350582-why-electronic-books-are-becoming-so-popular

Features to look for in a digital brokerage platform

PD

Brokerage platforms provide online investors and traders a wealth of money management opportunities. Choosing between brokers is a decision that affects financial objectives for as long as a brokerage account is used. In some cases, owning more than one brokerage account provides experienced traders with wider options. Paying close attention to account benefits, features and terms assists with evaluating the quality and potential of a digital brokerage service provider.

Service

Service is a substantial factor weighing into the decision to open an account with a digital brokerage platform. A physical address, trained customer service support and regulatory licensing are just the beginning. Additional considerations include multiple account types, online bill paying, direct ACH money transfer and secure transmission of financial data over the internet. Additional service factors to take into account are transaction fees, minimum balances and margin interest rates.

Speed

Reliability in the carrying out of transactions and user interface speed are also important aspects of a digital brokerage platform. This is especially true for those using speed based strategies such as event driven intraday currency trading. Furthermore, fast and accurate access to the best available rate spreads help customers make competitive bid and ask decisions in addition to effectively placing orders designed to take advantage of changes within securities markets.

Securities

Access to innovative financial instruments and products is advantageous to online brokerage account holders. This is because a diversity of financial products improves maneuverability in fluid securities markets. For example, being able to select from trading mechanisms such as spread betting, arbitrage and hedging benefits customers by providing them with the right products for each type of market environment and trading strategy.

Tools

Without specialised financial tools, traders of financial instruments would not be able to make informed decisions, perform technical analysis or carry out multiple trading techniques. Online tools such as stock screeners and historical charting allow enhanced assessment of financial securities with the click of a button, or the touch of a screen. Other useful tools including heat maps, trading simulators and programmable orders further empower the securities trading process.

Resources

Many firms that offer digital brokerage platforms also provide traders with educational tutorials and access to research studies or reports. Outside of an account these resources are not necessarily free, and are therefore a considerable advantage of brokerage accounts that provide them. Historical data such as fundamental statistics, intraday pricing patterns, relevant economic data and up to date news alerts are all informational assets when placing one's money into a brokerage account.

Financial news 07/19/2012

• Bloomberg: Senate mulling job repatriation tax credit for companies
• AOL: Capital One to pay out $210 million for misleading customers
• CNBC: "Fiscal cliff" must be avoided per two ex-Treasury secretaries
• CNNMoney: Payday loans cost an average of $520 in fees per year
• DOL: Jobless claims wk ending 07/14, 386K; average 375.5K
• Telegraph: PayPal payments helped eBay increase yr/yr revenue 23%
• NAHB: June housing starts rose 6.9%, or 49K to 760K
• MW: Wealth to lose massive amount of value via coming inflation
• FRB: U.S. economic growth "modest to moderate" per Beige Book
• AP: New home construction in June surpassed 4-yr low
• NYT: Deflation possible in Eurozone if bond buying not implemented
• Reuters: Spanish bank profits to be impacted by toxic asset write offs

Financial news 07/18/2012

• CNN Money: Americans fail to repay $37 bln in 401(k) loans annually
• AOL: Tax on online purchases possible via "Marketplace Equity Act"
• CNBC: Intel CFO joins other executives in downward revenue guidance
• BI: Commodity prices to rise with new market demands, and population
• FRB: Investment and hiring at risk from "domestic fiscal uncertainty"
• IBD: Fed Chair Bernanke says QE3 a "radical" solution for "emergencies"
• AP: Recession likely if Congress fails to reach a budget crisis solution
• BBC: Federal Reserve Chairman says London interbank lending is flawed
• Moody's: Debt and deposit ratings of 10 Italian banks downgraded
• Bloomberg: Chinese unemployment to increase per premier

Guest post: 5 things to look for in a lending network

US-PDGov

By: Amy Zimmerman

Over the last few years, getting financing for business projects has become a herculean task. In fact, even getting short term financing to repay debts since the global recession in 2007 is an arduous task. Most traditional financial institutions have introduced stringent measures which leave most borrowers out. Amidst this backdrop, lending networks have developed to fill in a gap left by traditional financing options.

If you are struggling to finance your business or you are in search of a quick loan, getting an insight on 5 things to look in a lending network is imperative.

What are some of the benefits you get from such a network? For starters, a lending network provides an easier financing option because the time spent since application to the point of getting cash is shorter. This convenience is compounded by the fact that interest rates on financing are lower than in traditional institutions as reported by CBS in 2008. In most cases, you can even get better rates to refinance your mortgage and other debts which is a much needed reprieve in the current economic doldrums.

A lending network can either consist of peers or even lending institutions which have large networks such as banks and lending programs which will suit any customer's needs. With so many of these groups around, what are some of the 5 things to look in a lending network?

Type of services offered

Everyone has unique needs and as such, the lending network you choose must offer a wide range of services. These range from refinancing options, mortgages, auto loans, bad credit facilities, short loans among many others. Moreover, if you want to join as a lender, then the network should also be ready to absorb you.

Reputation

One of the most important among the main 5 things to look in a lending network is of course its integrity and prudence in financial dealings. Many networks have featured in the news for all the wrong reasons and hence, research and read reviews and testimonials from past clients. Check your local BBB to learn of any complaints regarding the service, especially on professional conduct.

Experience

Evaluate the company's record in the financial industry to ensure they have the expertise to manage a financial portfolio. Check the company's website and evaluate staff training and individual experience in the industry before committing to work with the network. You can also look at its partners in the financial sector to ascertain whether the network is a stable financing option.

Privacy policy

Check your lending network's privacy measures to ensure it has a stringent policy. This will reduce the risk of losing your personal and financial information especially in the contemporary internet world where hackers abound.

Customer service

In most cases, you will have looked far and wide for a good financing option and hence, a lending network with dedicated, informed and sympathetic staff will definitely be the best option. Unhelpful customer service is an indicator of a more deep rooted problem in terms of the network's working ethics and practices. As such, move on if you are no comfortable with the kind of assistance provided.
Other considerations include the interest rates, licensure and other requirements. One crucial aspect among the main 5 things to look in a lending network is of course the nature of eligibility requirements. If they are overly stringent, then keep looking.

Amy Zimmerman regularly reviews online lending services. Be sure to look into the trustworthy report on Lending Club at Lending Club scam to make a clever financial judgment regarding this service.

Financial news 07/17/2012

• EPC: Retailer settlement allows credit card customer checkout fees
• Bloomberg: Food prices threatened by worst drought since 1956
• Business Insider: Corn futures contract prices up 50% on CME
• NYT:  Government economic data to be guarded with tighter security
• CNBC: Demand, lower supply and futures point to higher gas prices
• CNNMoney: Citi's 40% decline in underwriting fees bad for I-banking
• Daily Finance: Parents spending less on college costs per Sallie Mae
• OMBW: Congress lowers federal costs by reducing subsidized rates
• BBC: Loose HSBC bank oversight led to drug-money laundering
• IMF: Global economic growth forecasted to grow 3.5%, down .1%
• Reuters: Bond yields to probably rise despite Spanish austerity

Guest post: Refinancing your home loan to invest: Beware of the risks

 US-PDGov

By: Allan Jones

Refinancing 

Refinancing a loan simply refers to getting a new loan on the same property to pay off the mortgage or for any other purpose such as investment or business. This second loan is decided upon the equity or value of your home; therefore, if you have a high home equity, you can acquire a large share of money to start a new business or refurnish your home, depending upon your needs.

Why should you refinance to invest 

Using the equity of your home to refinance can help you a great deal as it gives you the benefit of extra income as well as a source to repay your mortgage faster. Refinancing is a helpful resource in generating extra income and revenue for you, and can also fulfill any urgent needs of cash on your account.

Benefits 

You can use the second loan for a more fruitful investment and reap additional income, and open doors for business and trade ventures. The loan can also be used to pay off your mortgage faster and secure your property.

Risks involved in refinancing 

Although the lure of refinancing your home loan is pretty attractive, the benefits and charms come with strings attached. Therefore, it is advisable to learn the finer details and darker aspects of the refinancing package before taking a plunge.

1. Loss in the investment 

It is a gamble to invest your hard earned money in a business due to the constant fluctuating scenario of the market. While there are fair chances that your investment and business may flourish, any losses or setbacks you encounter in the course may make the pay back of your loan difficult and unaffordable. Therefore, make sure you have adequate savings in check before you opt to invest all your equity in an investment. Negative output can not only cost a high debt, but can also make you lose your home.

2. Share market risks 

An investment in the share market can also turn into a bane in the case rates decline suddenly. This can cause a major blow to your finances; therefore, keep this point in your mind when make an investment in the share market.

3. Rise in interest rates 

The income you generate from your investment should be higher than your interest rate in order to have a sound and smooth payback period. As refinancing increases your debt to twice, any rise in the interest rates can increase your monthly payment to a considerable degree.

When is the best time to refinance? 

Refinancing comes with its pros and cons, and the end decision lies in your hands whether it is suitable for your needs or not. However, generally the best time to refinance a loan is when the rates are lower and you have adequate savings intact to deal with a rate increase or complication in the future.

Allan has been blogging about financial news and tips for the last 3 years. Allan's favourite topics include the rising cost of debt, loan refinance strategy and retirement planning. Allan holds a BA in Business Administration with a specialty in banking.

Why Greece's information technology sector is good for entrepreneurs

Greece's export industry

Image attribution: R. Haussmann, Cesar Hidalgo, et.al.; CC BY-SA 3.0

Greece's information technology is a negligible part of service exports. It is also hampered by a national private sector disadvantaged by an overly-bureaucratic government that favors specific industries over others. A lack of digital competitiveness is evident within the Greek and European economies. In addition to market demand for I.T. services, much needed regulatory reforms offer an opportunity for Greek entrepreneurs to develop the information technology industry within Greece.

Complete article link: http://www.helium.com/items/2349147-why-the-information-technology-sector-is-ripe-for-business

Financial news 07/16/2012

• NYT: Libor scandal prompting U.S. criminal interest rate fixing investigations
• AP: Chinese slowed economic growth to continue in mid-term per Premier  
• Commerce Dept: Retail sales declined .5% in June
• Reuters: Broader economic picture “lackluster” despite corporate earnings  
• MarketWatch: Economic data to show softer manufacturing and retail spending

• Smart Money: Financial advice should take 8 minutes per Ken Fisher 

• InvestorPlace: Being female costs $849K more than being male

• Businessweek: Olympic Gold medal value $660, Silver $325; bronze $3

• Business Insider:  Chinese banks “over-leveraged," in precarious positions

• CNBC: Greek bailout terms not favored by the public per poll

• CNNMoney: Libor scandal to cost banks: Citi & JPM, billions in losses

Financial news 07/13/2012

• Reuters: Senators urge investigation of bank interest rate manipulation
• NYT: Financial markets completely corrupted per M.I.T. Professor
• Bloomberg: Consumer confidence flat; 86% of surveyed pessimistic
• CNBC: Fiscal uncertainty not the worst of economic woes
• CNNMoney: More California municipal bankruptcies on the way
• AP: The DJI and S&P 500 fell for the 6th straight day on Thursday
• BI: Nevada mortgage loan-to-value ratio 114%, negative equity 61.2%
• Nadaq: Chinese June investment growth fell to 11.8% from 18.2%
• Moody's: Italy's bond rating downgraded to Baa2, from A3
• BBC: Chinese growth rate slowed to 7.6% in Q2, 2012

Financial news 07/12/2012

• IBD: U.S. in recession per Economic Cycle Research Institute
• Business Insider: Extreme couponer saved nearly $2K in 6 months
• CNNMoney: FHA backed loans 26.6% "more delinquent"
• AP: Lower natural gas prices aren't translating to consumer savings
• BLS: Jobless claims week ended 07/07, 350K; mvng. avrg. 376.5K
• Reuters: Lawsuit against BoFa misleading clients not dismissed
• Commerce Dept: Wholesale inventories increased .2% in May
• FRB: Federal reserve revised down near term GDP growth
• CNBC: Millions unable to refinance homes despite very low rates
• MarketWatch: Australian unemployment rate up .1%  to 5.2%
• BBC: The Eurozone could lose 4.5 million jobs from debt crisis

Financial news 07/11/2012

• Fitch: U.S. Treasury rating held at AAA with negative outlook 
• AP: Iowa brokerage firm under inquiry for potential securities fraud
• NYT: States face challenging fiscal questions with limited options
• Reuters: Slow global economic growth leading to profit warnings
• BI: Mining, Oil & Gas exploration Q2 yr-over-yr pay increases 5.6%
• CNBC: Macro-economic concerns preventing investors from buying
• CNN: 81 yr old woman late on $474 sewer bill evicted from home
• Telegraph: German public filed an injunction to block Euro-bailouts
• BBC: UK's labor party initiative to end child poverty to fall short
• MarketWatch: Spain to impart $79 billion in austerity through 2014
• Bloomberg: Brazil is expected to lower interest rates for 8th time

Financial news 07/10/2012

• AP: Americans increased May credit card use by $17.1; total $2.57 trillion
• MW: Unemployment to stay above 8% until mid-late 2013 per Fed official
• CNBC: Monetary easing a sign of weakening global economy per economist
• CNNMoney: Federal government overpaid $14 billion in UI during 2011
• NFIB: Small-business optimism index fell 3 pts in June reversing annual gains
• Bloomberg TV: Conflict of interest is plaguing the banking industry per Roubini
• NYT: A decline in airport traffic is leading to terminal vacancies
• Nasdaq: Spanish 10-yr bonds reached 7% again despite banking bailout
• Reuters: Spain granted an additional year by EU to reduce deficit 
• BBC: Norway's government used emergency powers to end costly oil strike
• Bloomberg: China's June import and export growth slowed to 6.3%& 11.3%

Guest post: Advanced forex trading strategies

 US-PD

By Sara Mackey

Advanced forex trading strategies can vary considerably from trader to trader, often depending on the sophistication of the trader and their dealing size.

The huge and highly liquid forex market lends itself to a number of different advanced trading strategies and styles. Two of those — triangular arbitrage and the carry trade — will be discussed further in the sections below.

Triangular arbitrage

Triangular arbitrage is a form of arbitrage often employed by professional cross rate forex traders. The triangular arbitrage trade consists of three transactions made in three different currency pairs that are preferably made as simultaneously as possible in order to avoid market risk.

The result of these three transactions — if correctly executed — should result in a net flat position and a locked in profit. Nevertheless, a credit risk always exists with third party transactions, and the timing of the transactions can also incur market risk that can be substantial in the volatile markets where such arbitrage opportunities are more common.

In essence, the arbitrage results in largely offsetting forex trades in the three currency pairs when market conditions allow for a net profit to be taken on the position. This opportunity generally occurs when market conditions are temporarily out of line.

The fact that one currency pair has a direct relationship with two other currency pairs makes up the market aberration which this technique exploits. The formula for this arbitrage consists of:

CC1/CC2 * CC3/CC1 = CC3/CC2

As described in the above formula, CC1 refers to the first currency pair, CC2 the second and CC3 the third. As trading in two active currency pairs heats up, the third currency pair may get out of line or “left behind”, therefore setting up an arbitrage opportunity.

An example of triangular arbitrage could involve the EURUSD, USDCHF and EURCHF currency pairs. While the first two currency pairs tend to be more active, an imbalance in the EURCHF rate can result in the arbitrage opportunity. The arbitrageur then takes on a position in the first two currency pairs, which will be offset by an inverse position in the third currency pair, thereby allowing for a risk free profit. 

The Carry trade

Another advanced forex trading strategy involves the differences in the interest rates paid on currencies. Basically, the carry trade involves the purchase of a high interest currency funded by a currency which carries a low interest rate.

Holding currencies for more than one day earns interest, while being short a currency incurs an interest charge. The net of these two interest rates applied to the amount of days from tomorrow or spot value until the following value date is generally called the “rollover” and will have a trader earning or paying interest on positions carried for every day included in the rollover period.

Therefore, the rate of interest in the currency’s country of origin will determine the amount of interest earned or paid out. This can turn into a large sum if market conditions favor the interest bearing currency.   

An example of a recent popular carry trade is buying the AUDJPY currency pair. The rate paid on the Australian Dollar is 4.75%, while the amount of interest paid to borrow Japanese funds is 0.10%.

Accordingly, buying the currency pair will net the AUDJPY carry trader 4.65% in annual interest, as well as any market gains if the Australian Dollar appreciates versus the Japanese Yen. 

Sara Mackey works for Forexfraud.com, a leading guide in the field of Forex trading. 

Financial news 07/09/2012

• CNBC: Slow U.S. economic growth to continue per Boston Fed Chief
• Reuters: U.S. corporations face worse earnings outlook in 4 years
• Business Insider: Much of Dodd-Frank Act eviscerated per Robert Reich
• NYT: Only 28% of commercial mortgages due in full by 2012 to be paid off
• CNNMoney: Lackluster job growth a new reality, high jobless rate to persist
• CFPB: Reports indicate 29% of 22-29 yr olds delay costly education
• Zero Hedge: Homes and stocks measured in gold ozs reflect their true value
• BBC: British politician says U.K. banks need more competition via reform
• AP: China invests in state run institutions over private businesses
• Bloomberg: Japanese May account surplus reaches 1985 levels

Financial news 07/06/2012

• ZH: California officials consider eminent domain to restructure mortgages
• Reuters: Weak manufacturing, retail and job growth dim Q2 prospects
• Fox Business: IRS inquiry of possible non-profit tax faults underway
• MarketWatch: Dollar Index retracing losses after ECB rate cut
• BLS: Non-farm jobs were up 80,000 in June; U.R. 8.2%
• IBD: June retail sales slumped by 70% per Retail Metrics
• ISM: Non-manufacturing business activity slowed 1.6 points in June
• Business Insider: Gold sell off of additional 10-20% possible per guru
• Bloomberg: New Jersey Governor vetoes wealth tax in favor of tax cut
• CNNMoney: U.S. mutual funds lost $1.5 billion in week ending 06/27
• CNBC: Greek government fell short on bailout budget requirements
• BBC: Chinese central bank cuts key lending rate by 31 basis points

How much automobile sales impact the U.S. economy

U.S. automotive sales 1970-2011

Image attribution: U.S. Department of Energy; US-PDGov

Automobile manufacturing and sales comprise a substantial part of the U.S. economy and are key parts of its fundamental strength. However, since 2008 total U.S. market share of the global automotive industry has shrunk to 42.5% from 47.1%. Even with encouraging recent auto sales, and employment figures reported by the Department of Commerce, and Treasury Department, the long-term sales forecasts for cars appear to have been trending downward.

Complete article link: http://www.helium.com/items/2344885-how-us-automakers-are-helping-the-national-economy

Guest post: 6 ways students can deal with rising tuition costs

Syndicated courtesy of Hat Toss

According to the Department of Education, if tuition costs continue to escalate, come 2016, the average price of tuition for a public college will have more than doubled in just 15 years. The New York Times recently reported that 94% of students who earn a bachelor’s degree borrowed money to pay for their education costs. And along with tuition costs, loan interest rates are rising as well. So, assuming you want to enroll or already are enrolled in a college and plan to borrow or already have borrowed money for your education, what are some ways you can deal with rising tuition costs and loan interest rates?

1. Realize that colleges are not going to warn you about student debt:

   
   
   When it comes to providing potential students with financial guidance, especially the total cost one can expect to pay in loans and interest after graduation, some schools are more straightforward than others, with for-profit schools being the least transparent. You will rarely see a warning about student debt in a university’s brochure or on its website. Be aware that both public and private universities are trying to sell you something, and that the information they provide regarding costs, financial aid, and even job prospects may be purposefully misleading.
   
   

2. Plan ahead:

   
   
   
   
   You have options for paying back a loan, and planning ahead how much you’ll need to pay monthly until your loans are zeroed out can help you determine which option is best for you. For federal student loan debt, the default standard repayment plan requires you to make 120 equal payments over 10 years. A guaranteed plan allows you to make lower payments in the first few years and higher ones later, with interest rising over the term of the loan. Extended, income-based, and income-contingent plans are other options available to those who take out a federal student loan. Before taking out a private loan, which will have a variable interest rate and can end up costing you more than you can afford, be sure you’ve investigated your options for scholarships, grants, and federal student loans.
   
   

3. Apply for aid every year:

   
   
   
   
   It’s in your best interest to apply every year for financial aid, even if you think you don’t qualify. Changes in your and your family’s financial circumstances, including a sibling enrolling in college as well, can impact your eligibility for financial aid. Be aware of and calendar out application deadlines so you can submit all the necessary paperwork in as timely a fashion as possible.
   
   

4. Create a post-graduation emergency savings fund:

   
   
   It’s never too early to begin an emergency fund, especially one for the first three, six, or 12 months after you graduate. Having savings in place that you can draw upon for rent, utilities, food, and other life expenses will allow you to use the money you’re earning at your first post-graduation job to begin paying back your student loans. If you don’t immediately find employment like so many college graduates, your emergency fund can help sustain you while you hunt for work.
   
   

5. Apply for Federal Student Aid:

   
   
   There are inexpensive federal funding options available to you through the Free Application for Federal Student Aid (FAFSA) website. Some federal funding options are not dependent upon financial need. Interest rates range from low to high, but there’s no charge to apply.
   
   

6. Federal loan forgiveness programs:

   
   
   
   
   Under certain conditions, the federal government will cancel part or all of a loan. To qualify for loan forgiveness, you must perform volunteer work, military service, teach or practice medicine in certain types of communities, or meet other criteria outlined by the program. The Federal Student Loan Repayment Program also allows federal agencies to establish loan repayment programs for their employees. Talk to your employer to see if they have such a program in place.

Financial news 07/05/2012

• WSJ: Capital gains tax increasing to 18.8% for joint AGIs over $250K
• NYT: Offline retailers integrating with online operations to boost sales
• DOL: Jobless claims in week ending 06/30/12, 374K, average 385.75K
• Bloomberg: FDIC and FED outline plans to avoid taxpayer bailouts
• AP: Unemployment to stay above 6% for 4 more years per economists
• ADP: June non-farm jobs increased by 176,000
• CNBC: Farmers not benefiting from high grain prices as crops wane
• Autodata: June passenger car sales increased 25% over June 2011 sales
• Reuters: Floundering European economies to spur central bank action
• Zero Hedge: Euro down, but equities steady on rate cut hopes
• CNNMoney: ECB expected to lower lending rate to .75% a record low

Independence Day financial news

Happy 4th of July 

 Image attribution: Victrorgrigas; CC0 1.0

• Daily Finance: Retailers roll out sales to celebrate 4th of July holiday
• IBD: Power outages cause for lower weekly retail sales per ICSC
• NYT: Expansion of Medicaid eligibility to lead to lower incomes
• CNNMoney: U.S. rent costs rose 5.4% over 12 months ending June 30
• Zero Hedge: Housing less important to overall economy; price trend flat
• Commerce Department: Factory orders in May up $3.3 billion or .7%
• BI: Gold consumption in China largest in the world in 2011
• CNBC: IMF's Legarde says targeted bond buying better than rate cuts
• Reuters: Large global banks confident orderly insolvency without bailout
• BBC: British soccer team Manchester United to list on NYSE
• MarketWatch: Eurozone manufacturing contracted in June; PMI 46.4

Guest post: How to manage your business debt

US-PDGov

 By: Mickey Colon

Managing your business debt wisely is a top priority if you want to run your company efficiently. In some cases the debt is tied to the business entity instead of the owner. But even though the creditor can only go after business bank accounts and assets, poor management of the account can negatively affect your business reputation.

In other cases creditors will hold you, the owner or representative, personally responsible for a debtyou accrued while running the business — particularly if you signed a personal guarantee to start the account. Either way it’s important to stay on top of your business debt accounts and make every effort to get them under control.

Create a Business Budget

Whether you’re a large tech conglomerate with over 100 employees or the owner of a small main street flower shop, you must have a business budget in place. Lack of a budget is one of the top reasons why many business owners get into debt in the first place and also why they continue to stay in debt.

Your business budget should accurately list your estimated monthly business income and expenses. That includes employee wages, office rent, office supplies and other costs to operate the business including your monthly debt expense. Your income may vary each month depending on the type of company you run, so estimate the revenue for each month in advance.

Pay Down Plan

Make a commitment to funnel your business profits (income less expenses) to your debt accounts until your balances are more manageable. If necessary, be prepared to make major sacrifices to put your business in a better position debt-wise in the short-term. For instance, you may have to pay yourself a lower wage or no wage at all for a few months until your accounts are paid off.

If you find yourself with a shortfall (loss) or breaking even every month it’s time to make some tough decisions on how to run a more lean and mean operation. In the meantime, avoid continuing a pattern of accumulating debt — if your past expenditures haven’t helped you turn a profit, it may be time to re-evaluate your entire business strategy.

New Habits

Once you get back on track with your business debt, make it a habit going forward to try to pay off your balances before each billing period ends. So for instance, if you charge $1,000 at the beginning of the billing cycle for inventory, make it a point to pay off that $1,000 as soon as you receive the proceeds from the associated sale. This way you avoid interest expenses.

Also, as a savvy business owner you should constantly be on the lookout for a better credit deal. Shop for new business card deals periodically and talk to your local credit union.

Bio: This article was provided by America’s debt help Organization, serving the public with unparalleled content about a range of topics, such as reducing debt, credit card consolidation help, mortgage modifications, planning retirement and helping Veterans get out of debt.