Is the Federal Reserve Right?

Federal Reserve

    At the recent FOMC meeting, Bernanke was not clear about timing and even course of the Federal Reserve in ending bond buying program.  Perhaps intentionally, his uncertainty created a lot of volatility in the market. Given this volatility, I think it would be very difficult for the Federal Reserve to signal any type of exit strategy without causing some form of market response. In a way, it makes Federal Reserve a hostage to the markets. … [Read more...]

Graduates – Live a Little Without Stretching Yourself Thin

Brandon Foster Gray

by Brandon Foster-Gray This one is for the recent college graduates out there, or undergrads looking to graduate in the next year or two. This post involves a bit of math, but put away your calculator; I already did the work for you. Before we get started, I want to ask if you have seen the classic scene from The Cosby Show, where Dr. Huxtable uses Monopoly money to explain to Theo how the real world works. If you have not seen it, do check it … [Read more...]

Job Report Exceed’s But Job Chart Is The Scariest

 Last week's job report showed that the  U.S. economy added 175,000 jobs in May.  And the unemployment rate increased up to 7.6 per cent. The report exceeded expectations.   Bill McBride of Calculated Risk wrote that “This shows the depth of the recent employment recession — worse than any other post-war recession — and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis,” I … [Read more...]

Urgent: Senate To Vote on Student Loan Reform

Urgent: Send them a note right now asking them to support Senator Elizabeth Warren's bill to lower student loan interest rates.  Just a few weeks ago, I sat in my cap and gown with thousands of other graduating students. As our parents applauded, speaker after speaker told us, "You're going to change the world!" It was a nice change of pace -- every other day, I hear about how my generation is made up of "lazy, entitled narcissists" [1] who … [Read more...]

U.S. Treasury Department Will Suspend Sales

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By Anna Timone   “ The Treasury Department on Friday will suspend sales of state and local government Treasury securities until further notice, the first action to avoid hitting the U.S. debt ceiling. The debt ceiling is expected to be reached on May 18, but the Treasury had been expected to take steps like this one in order to keep paying bills. Treasury Secretary Jacob Lew said last week that the U.S. will be able to avoid the debt … [Read more...]

Currency Survival In The European Debt Crisis

European markets

What has been perhaps the most significant factor in the European Debt Crisis for the currencies markets has not been the actual event itself, but the reaction of global central bankers. The rounds of quantitative easing that have been used to combat falling asset prices have engendered profound consequences not previously considered. Certainly among those roiling the markets has been the detachment of gold from its traditional link to fiat … [Read more...]

Special Dividends Reveal Companies’ Reactions To Tax Increase

Tax (1)

   For those who think that the threat of increased regulation or taxation does not result in reactions by the private sector are proven to be wrong, as the number of publicly traded companies issuing or expediting dividend payments in the last quarter of 2012 to evade possible higher rates is ample proof. If the Obama Administration and Congress will not take preventative action in 2013, the top effective tax rates for dividends will … [Read more...]

Government Shakedown

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If financial institutions once did finance, now they seem to practice law.   And if regulators once did regulation, now they seem to raise capital. Government seems to be in a shakedown motion. The switch of roles was mostly a consequence of laws such as Dodd-Frank and many others that seem to become an opportunity for regulators to promote their careers, to jump to the private sector and a way to raise funds for the newly created Consumer … [Read more...]

Private Equity in America: End of an Era!

Private Equity

Could private equity firms join reinsurance companies and mutual funds in going abroad due to increased taxes and regulations? Without a question, this could happen if Congress and the Obama Administration move forward to change the tax treatment for private equity and hedge fund income from the present 15% for capital gains to that of 35%, the top rate for income. This “carried interest” rule has come before Congress and never moved, … [Read more...]