Rabu, 31 Juli 2013

U.S. Congress Finally Votes to Cut Student Loan Interest Rates dailyfinancee.blogspot.com

Written By Sandrina Malakiano; About: U.S. Congress Finally Votes to Cut Student Loan Interest Rates dailyfinancee.blogspot.com on Rabu, 31 Juli 2013

dailyfinancee.blogspot.com ® U.S. Congress Finally Votes to Cut Student Loan Interest RatesU.S. Congress finally votes to cut student loan interest ratesManuel Balce Ceneta/APRep. John Kline, R-Minn., front right, with Reps. Virginia Foxx, R-N.C., from left, Luke Messer, R-Ind., and Cathy McMorris Rodgers, R-Wash., obscured, talk about student loans on Capitol Hill in Washington, Wednesday, July 31, 2013. By Elvina Nawaguna

WASHINGTON - U.S. college students will likely pay a reduced interest rate of 3.86 percent on their student loans for the new school year, after lawmakers on Wednesday finally passed a compromise bill that would reverse a recent rate hike.


The House of Representatives voted 392-31 in support of a bipartisan deal to lower interest rates on millions of new federal student loans. The Senate passed the bill on July 24 and President Barack Obama is expected to sign it into law.


The action followed months of partisan bickering, with Democrats and Republicans blaming each other for a politically embarrassing delay that had the potential to cost students and their parents thousands of dollars.


The legislation replaces a system in which Congress fixed interest rates every year and substitutes it with a market-based mechanism tied to the government's cost of borrowing and capped to protect borrowers in the event of a severe spike in rates.


The legislation passed just two days before Congress recesses for five weeks, after several failed efforts in the House and Senate.




Interest rates on student loans automatically doubled on July 1 to 6.8 percent after Congressfailed to meet the deadline to prevent the rate increase. Congress has since incorporated a retroactive fix that would keep borrowers of loans originated since July 1 when rates had doubled from paying the higher rate.

The measure passed Wednesday pegs interest rates on student loans to the 10-year Treasury note plus 2.05 percentage points for undergraduates, and plus 3.6 percentage points for graduate student loans.


The interest rate would roughly work out to 3.86 percent this year for undergraduates and 5.42 percent for graduates.


Supporters of the bill say it gets politicians out of the business of setting student loan rates and provides certainty for students and their families.


'Long-Term Fix'


Critics of a market-based system say it fails to offer enough protection against increasing rates as the economy improves.


"This bill provides American college students immediate debt relief on upcoming studentloans," said California Representative George Miller, the senior Democrat at the House Committee on Education and the Workforce. "Families battered by the recent recession should have received this relief over a month ago."




In 2007, Congress lowered the interest rates on federal subsidized Stafford loans to 3.4 percent. That lower rate was due to expire last year, but Congress extended it for another year rather than argue about a replacement for it during an election year.

Under the caps in the new plan, if market rates rise, undergraduates could pay as high as 8.25 percent and graduates as much as 9.5 percent. The rate could go to 10.5 percent for PLUS loans for parents who borrow to pay for their children's college.


"We wanted to get out of the partisan squabbling that has been happening in this city every year - let the market do it in a way that is fair to students and the taxpayer," said Education Committee Chairman Representative John Kline, a Minnesota Republican.


"After months of great uncertainty, students can finally breathe a sigh of relief knowing that interest rates on subsidized federal loans for college won't double from last year and a long-term fix will be in place to avoid these annual political chess matches over the loan program," said Peter McPherson, president of the Association of Public and Land-grant Universities.


U.S. Congress Finally Votes to Cut Student Loan Interest Rates

JC Penney's Shares Plunge on Report of Financing Woes dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® JC Penney's Shares Plunge on Report of Financing Woes

JC Penney's Shares Plunge on Report of Financing WoesMark Lennihan/AP

By ANNE D'INNOCENZIO


NEW YORK (AP) - J.C. Penney' s (JCP) shares plunged Wednesday after a report that CIT, the largest lender in the clothing industry, has stopped providing financial support to small and large suppliers selling to Penney stores -for now.


According to the New York Post's online report, published Wednesday, CIT made the decision after meeting with Penney officials to examine the company's books. The newspaper quoted unnamed sources.


Officials at Penney couldn't be reached immediately. CIT's spokesman Matt Klein declined to comment, saying it doesn't comment on specific customers.


Bob Carbonell, chief credit officer at Bernard Sands, a credit agency for the clothing industry, said four of CIT's clothing clients told him that the lender is issuing a hold on approving financial support. That hold started Tuesday, he said. The orders are for shipments of goods starting later in August and beyond. That means that suppliers will have to ship at their own risk now, which may make them less likely or able to keep filling Penney's shelves.


But the move fuels a new round of worries about Penney's financial situation. Penney is trying to reverse its fortunes after disastrous results under a failed transformation plan implemented by its former CEO Ron Johnson. Johnson was ousted in April after 17 months on the job. The board brought back former CEO Mike Ullman, who has reintroduced frequent sales and is bringing back key merchandise under store names like St. John's Bay.


CIT is what the industry calls a "factor," which makes cash advances to the suppliers based on the goods they sell to the merchant. If vendors and factors become wary of a store's creditworthiness, the retailer may have to pay suppliers cash upfront for goods, which could be a huge drain on liquidity. If suppliers stop shipping goods, it can be a death knell for a retailer. Carbonell believes that Penney's suppliers are still digesting the news but he thinks that they will continue to ship.


"Relationships are extremely important to manufacturers," Carbonell said. "They may not want to jeopardize their relationships with Penney." Carbonell says that he is advising his apparel clients to continue to ship to Penney on an "order-to- order basis."


CIT's steps follow its moves in April to slap a 1 percent surcharge to suppliers for Penney's orders.


Shares of Penney fell more than 10 percent, or $1.66, to close at $14.60, but added 19 cents in after-market trading.


Penney suffered a nearly billion-dollar loss and saw a 25 percent drop in revenue in the latest fiscal years as shoppers rejected the changes that Johnson had implemented. That included getting rid of most sales and eliminating basic merchandise in a bid to get trendier and more affluent shoppers. Sales declines and big losses continued into the first quarter. Johnson was ousted in April, in the middle of the first quarter,


Analysts have said that they have seen more traffic in the stores as a result of the moves by Ullman to restore some of the merchandise and sales, but business is still slow. In fact, the company's relaunched home department, a Johnson project, has failed to attract the needed traffic and sales.


As part of Johnson's strategy, the home area was relaunched in 500 stores and featured new names like Michael Graves and Jonathan Adler. Some experts believe the trendy merchandise isn't resonating with Penney shoppers. And to underscore Penney's difficulties in the home area, Penney's senior vice president and general merchandise manager of home abruptly left the company this past month.


In a report issued Wednesday, Citi Research analyst Deborah Weinswig said that while Penney's performance continues to deteriorate in the second quarter, the company did issue a $2.25 billion term loan in May, which "removed near-term liquidity concerns in our view."


The company is expected to release its second-quarter earnings report Aug. 20.



JC Penney's Shares Plunge on Report of Financing Woes

Closing Bell: Stocks Little Changed After Fed Statement, Q2 GDP dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Closing Bell: Stocks Little Changed After Fed Statement, Q2 GDPSpecialists Peter Kennedy, Bernard Wheeler, and Philip Finale, left to right, confer on the floor of the New York Stock Exchange Wednesday, July 31, 2013. Steady growth in the U.S. economy and higher company earnings are pushing the stock market higher in early trading. (AP Photo/Richard Drew)Richard Drew/AP Steady growth in the U.S. economy and higher company earnings helped push the stock market near/above record levels Wednesday.

The Dow Jones industrial average (^DJI) fell 21.05 points or 0.14 percent, to end at 15,499.54, a steep drop from a record intraday high of 15,634.32. The Standard & Poor's 500 index (^GSPC) was nearly flat, losing 0.24 of a point, or 0.01 percent, to end at 1,685.72. The tech-heavy Nasdaq composite index (^IXIC) advanced 9.90 points, or 0.27 percent, to close at 3,626.37.


Stocks were in positive territory most of the day and stayed higher after the Federal Reserve released its updated policy statement at the end of a two-day meeting. The central bank said it will keep buying the same amount of bonds to help lower long-term interest rates.


The Fed's announcement followed upbeat news about the nation's economy. The Commerce Department reported that the U.S. economy expanded at an annual rate of 1.7 percent from April through June as businesses spent more and the federal government cut less spending. Economists had expected growth of 1 percent for the period, according to the data provider FactSet.


U.S. businesses created a healthy 200,000 jobs in July, payroll company ADP said, as companies hired at the fastest pace since December. ADP also raised its estimate of the number of jobs the private sector created in June.


IBM (IBM) said that federal regulators are looking into how it reports sales for its cloud-computing business. The technology company disclosed in a regulatory filing Wednesday that it learned in May that the Securities and Exchange Commission was conducting an investigation, but provided no further details about what regulators are looking into or the status of the inquiry. IBM said in July that its cloud revenue is up more than 70 percent in the first half of its fiscal year. It has a target of reaching $7 billion in cloud-computing revenue by 2015. The SEC declined to comment. Shares of IBM fell 84 cents to $195.17.


More Stocks in the News:



  • Shares of MasterCard (MA) rose $12.13, or 2 percent, to $613.55, after the payments-processing company reported a 19 percent increase in its second-quarter profit as more people worldwide used its debit and credit cards to make payments.

  • Comcast (CMCSA, CMCSK) rose $2.41, or 5.64 percent, to $45.12 after the parent company of the NBC network and Universal Studios reported earnings and revenue that exceeded analyst expectations in the second quarter.

  • Vonage Holdings (VG) fell 14 cents, or 4 percent, $3.23, despite posting a profit in the second quarter. The company, which provides phone services through cloud-connected devices, earned $7.4 million, or 3 cents a share, for the period ended June 30, compared to a loss of $3.3 million, or a penny a share, last year.

  • Software company Symantec (SYMC), which makes Norton antivirus software, surged after reporting earnings and revenue that beat analysts' forecasts. The stock rose $2.33, or 9.57 percent, to $26.68.

  • Air Products & Chemicals (APD) rose $3.09, or 2.93 percent, to $108.70 after the Wall Street journal reported that activist investor William Ackman had bought a 9.8 percent stake in the gas company.

  • Herbalife (HLF) rose $5.48, or 9.13 percent, to $65.52 after CNBC reported that the veteran hedge fund investor George Soros had taken a stake in the company. Herbalife has been at the center of a battle between investors Ackman and Carl Ichan, who are taking opposing positions in the stock.


What to Watch Thursday:

  • Automakers release vehicle sales for July.

  • Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.


These reports are due at 10 a.m.:

  • Freddie Mac releases weekly mortgage rates.

  • The Institute for Supply Management releases its manufacturing index for July.

  • The Commerce Department releases construction spending data for June.


These companies are scheduled to report quarterly earnings

  • American International Group Inc. (AIG)

  • Avon Products Inc. (AVP)

  • Beazer Homes USA Inc. (BZH)

  • Exxon Mobil Corp. (XOM)

  • Kellogg Co. (K)

  • Kraft Foods Group Inc. (KRFT)

  • LinkedIn Corp. (LNKD)

  • Procter & Gamble Co. (PG)

  • Sony Corp. (SNE)


-Compiled from staff and wire reports.


Closing Bell: Stocks Little Changed After Fed Statement, Q2 GDP

Southwest Fined for Playing Hard to Get With Valentine's Day Sale Fares dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Southwest Fined for Playing Hard to Get With Valentine's Day Sale FaresD60579 Las Vegas, Nevada - Southwest Airlines planes on the ground at McCarran International Airport.Alamy Southwest (LUV) was hit with a $200,000 fine from the Department of Transportation for advertising low airfares that practically nobody could get.

Earlier this year, the airline ran its "Luv a Fare Sale," offering one-way tickets under $100 for travel on Valentine's Day. But the government said that the advertised prices were vanishingly difficult to get a hold of. For instance, on flights between Atlanta and Las Vegas, just 2 percent of seats could be had at that the advertised sale fare; between Minneapolis and Phoenix, just 1 percent of seats qualified.


Another sale held by Southwest in January advertised a $66 fare between the country music mecca of Branson, Mo. and Dallas, but the government found that Southwest didn't offer a single seat at that fare between the two airports.


Unfortunately for Southwest, federal rules hold that "failure to have a reasonable number of seats available at the advertised fare" is a violation of the law, and constitutes unfair and deceptive practices.

In it defense, Southwest argued that despite the low rates in certain city-pair markets, in total less than 10 percent of all routes advertised in the sale actually sold out. It also said that the nonexistent Branson-Dallas fare was due to a technical screw-up. Nevertheless, the Department of Transportation rules that the airline must pay $200,000 for its transgressions.


That's a slap on the wrist for Southwest, which last week reported $10 billion in revenue for the second quarter. But the ruling should be a reminder to travelers that fare sales aren't always as generous as they might appear. If you see a great limited-time fare out of your city, jump on it before the few seats the carrier has available at that price are sold out. And if the fare disappears suspiciously fast, consider sending a tip to the DOT that the airline might be up to something fishy.


Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


Southwest Fined for Playing Hard to Get With Valentine's Day Sale Fares

Here's Who's To Blame For America's Zombie Economy dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Here's Who's To Blame For America's Zombie EconomySAN DIEGO, CA - JULY 19: A zombie character greets people along 5th Avenue in the Gaslamp Quarter at Comic Con on July 19, 2013 in San Diego, California. Comic Con International Convention is the world's largest comic and entertainment event and hosts celebrity movie panels, a trade floor with comic book, science fiction and action film-related booths, as well as artist workshops and movie premieres. (Photo by Sandy Huffaker/Getty Images)Sandy Huffaker, Getty Images

By Henry Blodget

U.S. economic growth for the second quarter was 1.7%.


That's better than expected, but only because the expectations were so low. In absolute terms, for an economy in mid-recovery, 1.7% is a lousy growth rate. And growth in the first quarter was revised down to a pathetic 1%.


If you turn on the TV today, you'll see a parade of our elected representatives blaming each other for this.


You can mostly ignore them.


If you're curious who is actually responsible for our crappy economy, just look at the following charts.


But, first, a basic economic equation. Ignoring imports and exports (for simplicity), the size of our economy is the sum of the following parts:


PERSONAL CONSUMPTION (Consumer Spending)

+

PRIVATE INVESTMENT (Business Investment)

+

GOVERNMENT SPENDING


Right now, those three buckets of spending are adding up to a meh GDP number.


So which one is to blame?


Well, first let's look at the biggest component of GDP--Personal Consumption (consumer spending). Personal Consumption these days is a higher-than-average ~71% of GDP. Importantly, personal consumption has stayed at about that level for the last several years. It's actually higher than it was from 2000-2007 and much higher than it was in the halcyon days of the 1990s. So if we're wondering who to blame for our crappy economy, we can't blame American consumers. Despite high unemployment and lousy wage growth, consumers are still spending.


So, how about government spending? Is the government doing its part? Well, here we're going to find one of the big culprits. Unlike consumer spending, total government spending (federal, state, and local) has dropped sharply as a percent of GDP--from 39% of GDP a few years ago to only 35% today. This drop in government spending is acting as a big drag on GDP growth. Business Insider/ St. Louis Fed

But our government--the Republicans, mostly--have declared that it is crucial that we cut government spending. Republicans insist that we have to take our medicine now (while a Democratic president can be blamed for it) or die in agony later. And Democrats are unable to persuade enough Americans that this is a mistake. So we're stuck with government spending cuts, at least for this year.


So that leaves the third category of GDP--business investment. How are businesses doing? Are they investing aggressively in their future and our country?


Hell, no!


If you're looking for the real group to blame for our crappy GDP, you've found it: American corporations.


American corporations have become so greedy and short-term focused that they're barely investing at all.


Don't believe it?


Here's a look at private investment as a percent of GDP: Business Insider/ St. Louis Fed American business investment has increased since the depths of the recession, but it is still at a level that is normally only seen in recessions (e.g., pathetic).


So, why is it that American businesses aren't investing?


Well, if you listen to some of the people on TV, they'll tell you that it's the result of "policy uncertainty" or "high taxes" or "too much regulation."


This might sound persuasive, but it is self-serving nonsense.


The real reason American corporations aren't investing is that the folks who control and run them have become so selfish and greedy that they are focused on only one thing: Maximizing short-term profitability.


When the folks who control and run American corporations get together to set future goals, for example, they don't agree to, say, hire and invest heavily for the next several years in order to produce higher earnings and stock prices 5-10 years from now. In a business and investment culture ruled by annual bonuses and quarterly earnings reports, 5-10 years from now is so far into the future that it's barely worth considering. Instead, the folks who control and run American corporations set annual bonus and quarterly earnings targets designed to maximize profits and stock prices today.


In a period in which economic growth is weak (because corporations aren't investing), the way to hit annual profit targets and get those bonuses is to "increase efficiency." And "increasing efficiency," everyone knows, is usually just a synonym for cutting costs, firing employees, and scrimping on investment.


So big American corporations are maximizing their profits and letting mountains of cash build up on their balance sheets while, in the process, starving the economy and their employees of cash that would otherwise turbo-charge consumer spending and economic growth.


Don't believe it? Think that "too much regulation" and "too high taxes" are really to blame?


Take a look at these charts, which we also published yesterday.


CHART ONE: Corporate profits and profit margins are at an all-time high. American companies are making more money and more per dollar of sales than they ever have before. Full stop. This means that the companies have oceans of cash to invest. But they're not investing it. Because they're too risk averse, profit-obsessed, and short-term greedy. Business Insider/ St. Louis Fed


CHART TWO: Wages as a percent of the economy are at an all-time low. Why are corporate profits so high? One reason is that companies are paying employees less than they ever have as a share of GDP. And that, in turn, is another reason the economy is so weak. Those "wages" represent spending power for American consumers. American consumer spending is revenue for other companies. So the profit maximization obsession of American corporations is actually starving the rest of the economy of revenue growth. Business Insider/ St. Louis Fed


CHART THREE: Fewer Americans are employed than at any time in the past three decades. Another reason corporations are so profitable is that they don't employ as many Americans as they used to. This is in part because companies today regard employees as "costs" and "inputs" instead of human beings who are dedicating their lives to the organizations that, in turn, are supporting them and their families. (Symbiosis! Imagine that!) As a result of frantic firing in the name of "efficiency" and "return on capital," the U.S. employment-to-population ratio has collapsed. We're back at 1970s-1980s levels now. Business Insider/ St. Louis Fed

CHART FOUR: The share of our national income that American corporations are sharing with the people who do the work ("labor") is at an all-time low. The rest of our national income, naturally, is going to owners and senior managers ("capital"), who have it better today than they have ever had it before. Business Insider/ St. Louis Fed In short, the obsession with "maximizing short-term profits" that has developed in America over the past 30 years has created a business culture in which executives dance to the tune of short-term traders and quarterly earnings reports, instead of investing aggressively on behalf of employees, customers, and long-term owners.


That's not what has made America a great country. It is not what has made some excellent American corporations the envy of the world. It's also, importantly, not the way it has to be.


Want an example of a corporation that can thrive--and deliver enormous returns to its shareholders--while ignoring short-term profitability and investing aggressively for the long-term?


Amazon.


Here's a chart of Amazon's revenue and profits over the past ~15 years. Business Insider/Ben Evans


As you can see, unlike almost every other major American corporation, Amazon has invested aggressively almost every year that it has been in business. Amazon has invested so aggressively, in fact, that it has earned almost nothing.


And yet...


Amazon has become the dominant global eCommerce company, and it is growing at an extraordinary rate.


And, just as important, Amazon's stock keeps hitting new all-time highs.


Read that again.


Amazon has traded off near-term profits for long-term investment for as long as it has been in business. It has been the target of ridicule by myopic and greedy short-term investors who want it to deliver "blowout quarters" and "upside surprises." It has ignored the screams of everyone who has ever said it "couldn't make money" or "doesn't make enough money." Instead, for more than 15 years now, Amazon has calmly, quietly, and aggressively invested in the future. And it has delivered extraordinary returns to long-term investors in the process.


The Bottom Line


One of the big reasons the U.S. economy sucks is that, after three decades of ever-more obsessive focus on "shareholder value," our corporations and their owners have become myopic and greedy. Instead of investing in the future, and sharing more of their vast wealth with the people who generate it (their employees), they are hoarding their cash and maximizing their short-term profitability.


This business philosophy might--might--prop up their stock prices for the near-term.


But it's also gutting the middle class and crippling the overall economy. And, in the process, ironically, it is constraining revenue growth for the same corporations that are trying to scrimp and save their way to maximized profitability.


It's time for Americans to rethink our current business philosophy.


Coming out of the malaise of the 1970s and early 1980s, we needed a "get tough" period in which we got our corporations in shape. But now we've taken this "return on capital" religion too far. And it's hurting the country.


Specifically, it's time to make the goal of our corporations be to create long-term value for all of their constituencies (customers, employees, and shareholders), not just short-term profits.


Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.


Read More:

This One Tweet Reveals What's Wrong with American Business Culture and the Economy

If You're Wondering What's Wrong with America, Look at These Four Charts

Sorry Anthony Weiner, I'm Not Voting for You


Here's Who's To Blame For America's Zombie Economy

Why Margaritaville Is The 'Most Lucrative Song Ever' (Infographic) dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Why Margaritaville Is The 'Most Lucrative Song Ever' (Infographic)ATLANTIC CITY, NJ - MAY 23: New Jersey Governor Chris Christie was presented with a pair of bronzed Margaritaville Flip Flops celebrating the opening and the start of summer on the shore during the ribbon cutting ceremony of the new Margaritaville and LandShark Bar & Grill at Resorts Casino Hotel on Thursday May 23, 2013 in Atlantic City New Jersey. (Photo by Tom Briglia/FilmMagic)Tom Briglia/FilmMagic

On Memorial Day weekend, New Jersey Governor Chris Christie (right) cut the ribbon on the latest outpost in Jimmy Buffett's Margaritaville empire: a $35 million resort and casino complex in Atlantic City. (For an up-close-and-personal visit, check out AOL Travel editor Mike Yessis' full-immersion Margaritaville diary.)


The singer's flip-flop-wearing, booze-swilling image belies his role as head of a business empire that would make some titans of industry jealous. In addition to the casino complex--the fifth under the Margaritaville banner--Buffett also has his hand in several bar and restaurant chains, a beer label, clothing, sunscreen, blenders, even Broadway producing.


The privately held Margaritaville Enterprises doesn't release sales figures, but Bloomberg Businessweek recently dubbed the song that spawned it all the most lucrative 3 minutes and 20 seconds in music history.


Here's a parrots-eye view of the Margaritaville empire:



Why Margaritaville Is The 'Most Lucrative Song Ever' (Infographic)

Parrotheads in Paradise: 'A Social Club With a Charity Habit' dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Parrotheads in Paradise: 'A Social Club With a Charity Habit'

129250425.jpgGetty Images

The term "Parrot Head" evokes a certain image: Shorts. Sandals. Loud, beachy prints. A cold beer or frozen margarita in hand. But ask any official Parrot Head--that is, any one of the 30,000 dues-paying members of Parrot Heads in Paradise Inc.--and they'll tell you that the familiar beach bum stereotype leaves out one major, defining factor of their persona: do-gooder.

Thanks to the hugely successful "Margaritaville" brand, Jimmy Buffett has amassed a for-profit empire that any entrepreneur might envy. More quietly, however, his trademark "escapist" mentality has fostered the parallel growth of PHIP, a nonprofit organization that has raised nearly $30 million and logged more than 3 million volunteer hours in just over a decade.


"As we like to say, we're a social club with a charity habit," says Andy Harrell, PHIP national vice president. "It's not all about the party. It's about the party and how we can use that party to help benefit someone else."


With popular "Trop Rock" songs like Buffett's "Cheeseburger in Paradise" or "Fins" playing in the background, weekend-long drinking festivals, sports tournaments, and even international travel opportunities drive its fundraising efforts. And with 233 Parrot Head clubs worldwide -- including a few in Puerto Rico, Canada and Australia -- local charities are most often the beneficiaries.


An annual event hosted by the Parrot Head Club of Tidewater, Virginia, raises between $32,000 and $33,000 for the Alzheimer's Association of Southeastern Virginia each year, for instance. In Oklahoma City, another local chapter sponsored a weeklong all-inclusive trip to the Dominican Republic, for which travelers pooled around $5,000 extra to support their community's Habitat for Humanity branch.


"It's a love of the music and the lifestyle," says Harrell. "People know they're going to be with likeminded folks who are looking to have a good time and all the while leave the world a little better place than they found it."


The PHIP's annual "Meeting of the Minds" in Key West epitomizes the group's "party with a purpose" mantra. With an entertainment budget of over $100,000, the music and concerts bring the crowds each year. But while closing down the island's famous Duval Street, Parrot Heads also make a point to give back. Convention-goers sponsor a blood drive with the American Red Cross that's consistently one of the largest in the region. (They're assured that alcohol consumption won't affect their ability to donate.) They've raised thousands of dollars for South Florida nonprofits, such as the SPCA or hospice.


Harrell recalls that the PHIP was the only big group allowed onto Key West when the annual convention fell just a week after Hurricane Wilma swept through the island in October 2005. "They knew that we would be able to give back and help where they needed us," he said. "Everyone just rolled up their sleeves and did what they had to do. The city was thrilled about the work we were able to accomplish cleaning up."


The nonprofit's ability to mobilize has indeed proven to be one of its most impressive strengths. After a series of tornados left devastation in the city of Moore, Oklahoma, this May, PHIP President Chris Zuest received more than $25,000 in deductible cash donations within one month-all in response to just one email blast from Zuest to other local chapters across the country. Many clubs hosted last-minute happy hours on behalf of the tornado relief efforts.


So what inspires this spirit of generosity? Buffett himself, Harrell says. "He's pretty philanthropic himself, and I think that's where the idea of giving back came from."


The "Head Parrot," as his followers call him, has helped raise thousands for disaster victims through his charity concerts and tours over the years. He's also the co-founder of Florida's Save the Manatee Club.


And surely the Parrot Heads' party-loving nature helps too. "At the end of the day, you've had a good time. You've been with good people. You've danced like nobody's watching, and you've done something good for the community," Zuest says. "That makes you feel good. If you feel good, that's what brings you back."


For a tour of the latest outpost in the Margaritaville empire, head over to AOL Travel.


Parrotheads in Paradise: 'A Social Club With a Charity Habit'

Fed: U.S. Economy Is Growing Only Modestly dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Fed: U.S. Economy Is Growing Only Modestly

Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks during a House Financial Serves Committee hearing in Washington, D.C., U.S., on Wednesday, Feb. 29, 2012. Bernanke said that keeping monetary stimulus is warranted even as the unemployment rate falls and rising oil prices may cause inflation to rise temporarily. Photographer: Andrew Harrer/Bloomberg via Getty ImagesAndrew Harrer/Bloomberg via Getty ImagesFederal Reserve Chairman Ben Bernanke By MARTIN CRUTSINGER

WASHINGTON -- The Federal Reserve said Wednesday that the U.S. economy is growing only modestly, a downgrade from its June assessment. The Fed expects growth will pick up in the second half of the year, but the more cautious message may be a signal that it's not ready to slow its bond purchases soon.


In a statement after a two-day policy meeting, the Fed says it will keep buying $85 billion a month in bonds to help lower long-term interest rates. And it says it plans to hold its key short-term rate at a record low near zero at least as long as the unemployment rate stays above 6.5 percent and the inflation outlook remains mild.


Stronger job growth has fueled speculation that the Fed could start reducing its purchases as soon as September. But economic growth remains sluggish and unemployment high at 7.6 percent.


At its June meeting, the Fed described economic growth as "moderate," and forecast that growth could be at least 2.3 percent for the year. Chairman Ben Bernanke said after the meeting that the Fed could slow the bond purchases later this year if the economy and job market continued to strengthen.


But earlier Wednesday, the government said the economy grew at a subpar 1.7 percent annual rate from April through June. The pace was an improvement from than the previous two quarters, which were revised lower. Still, growth remains sluggish and has been below 2 percent for three straight quarters.


Most economists, including those at the Fed, expect growth will strengthen in the second half of the year. That's because they believe businesses will spend more, stronger job growth will fuel more consumer spending and government spending cuts will weigh less on overall growth.


Job growth has averaged 202,000 a month since January, up from 180,000 a month in the last six months of 2012. That makes Friday's July employment report even more critical to the Fed's assessment of the economy. The report is expected to show employers kept hiring at roughly the same pace in July, while the unemployment rate ticked down to 7.5 percent.


Fed policymakers will also pay close attention to a report Thursday on July manufacturing activity. That could give them more insight into businesses confidence in the economy and how that will affect third-quarter growth.


The Fed's statement was approved on an 11-1 vote. Esther George, the president of the Federal Reserve Bank of Kansas City, objected for the fifth straight meeting because of concerns that the bond buying could make financial markets unstable and increase the risk of inflation.




  • The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.

    1. Gross Domestic Product


  • The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.

    2. Consumer Price Index


  • The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.

    3. Unemployment Rate


  • The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.

    4. Trade Deficit


  • Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.

    5 & 6. Personal Income and Personal Spending


  • Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.

    7. Consumer Confidence


  • The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.

    8. Housing Prices


  • Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.

    9. Leading Economic Index

  • More from DailyFinance:



Fed: U.S. Economy Is Growing Only Modestly

Sizzling Savings on Summer Blockbusters -- Savings Experiment dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Sizzling Savings on Summer Blockbusters -- Savings ExperimentDid You Know: Save on Summer Blockbusters Going to the movie theater is a great way to beat the heat, but tickets to summer blockbusters can put a dent in your budget. Here's how to save on a night out at the movies.

Movies can cost a pretty penny for a family of four. The average ticket is $8, while 3D and IMAX movies can cost $20 per person. Then there are the overpriced snacks. A drink can cost $4, while popcorn is marked up a whopping 1200 percent. With these prices, a family outing can run you over $80 for two hours of entertainment.


The solution is simple, though it may seem old-fashioned. Drive-in theaters offer a budget friendly option, and are making a great comeback. Many will show a double feature for $7 per person, which

means you're getting two movies for less than the price of one.


movie theaterAnd don't worry about what's playing. Nowadays, drive-ins are showing the same blockbusters that regular movie theaters are featuring. Check out sites like DriveInTheater.com and Drive-Ins.com to find one near you and reap the rewards of retro-style savings.


Sizzling Savings on Summer Blockbusters -- Savings Experiment

Demand for Mortgages Falls as Rates Remain Unchanged dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Demand for Mortgages Falls as Rates Remain Unchangedmortgage loan applications economy housing market home sales refinancing interest ratesDavid Paul Morris/Bloomberg via Getty Images By Leah Schnurr

Applications for U.S. home mortgages decreased last week with potential buyers shying away from the market as rates held steady just below their two-year highs.


The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, declined 3.7 percent in the week ended July 26. It was the seventh week in a row the index has been lower.


The MBA's seasonally adjusted index of loan requests for home purchases, a leading indicator of home sales, fell 3.4 percent.


Fixed 30-year mortgage rates averaged 4.58 percent, unchanged from the week before and only 10 basis points below a two-year high hit earlier in July.


Rates have risen sharply since early May, pushed higher by the Federal Reserve's plan to start slowing its economic stimulus later this year if the economy progresses as expected.


The Fed is currently buying $85 billion in bonds a month to keep borrowing costs low. The cheap mortgage rates have helped lure homebuyers and worries have emerged that higher costs could take some of the strength out of the housing market's recovery.


Still, most economists don't expect it to derail housing's growth altogether. Rates have risen about 1 percentage point since early May, but still remain low by historical standards.


Refinancing activity has been hit harder than purchases by the rise in rates, which makes refinancing less lucrative. The gauge of refinancing applications fell 3.8 percent.


The refinance share of total mortgage activity was unchanged at 63 percent of applications.


The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.




  • The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.

    1. Gross Domestic Product


  • The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.

    2. Consumer Price Index


  • The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.

    3. Unemployment Rate


  • The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.

    4. Trade Deficit


  • Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.

    5 & 6. Personal Income and Personal Spending


  • Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.

    7. Consumer Confidence


  • The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.

    8. Housing Prices


  • Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.

    9. Leading Economic Index

  • More from DailyFinance:


Demand for Mortgages Falls as Rates Remain Unchanged

Comeback Kids: Facebook Finally Climbs Back Above IPO Price dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Comeback Kids: Facebook Finally Climbs Back Above IPO PriceHand holding a smartphone with a Facebook logo in front of dollar bills, symbolic image for the Facebook IPOAlamy In the months following Facebook's initial public offering last May, one thing seemed clear to everyone: Its IPO price of $38 had been way too high.

The company was plagued from the outset with questions about revenue streams and whether it had made the proper disclosures during its IPO roadshow. The share price eventually dwindled to half its original value, and early adopters were left feeling like they'd made a bad bet.


Well, a funny thing happened Wednesday, 14 months after that disastrous IPO: The social network managed to claw its way back up past $38.


Facebook hit the symbolic milestone after a week of great news that kicked off with its most recent earnings report, which beat expectations in a big way. Revenue exceeded analysts' estimates by a cool $200 million, bolstered by big uptick in the company's ability to monetize its mobile business.


And Facebook's finding other ways to make money. Bloomberg reported Tuesday that it plans to start selling 15-second video ads, which could go for as much as $2.5 million a day. While Facebook users probably won't be thrilled to see commercials popping up on their news feeds, it looks like investors are on board with any plan that could squeeze more revenue out of the free service.


All told, the string of good news has propelled the share price upward by more than 40 percent in the last week.


That doesn't mean that it's going to be all sunshine and roses for shareholders going forward.


Facebook isn't as popular with young people as it used to be, even acknowledging in its most recent annual report that its younger users "are aware of and actively engaging with other products and services similar to, or as a substitute for, Facebook." It has attempted to fight against that tide by acquiring one of those competing services, Instagram, for $1 billion last August. It also created its own versions of popular upstarts Vine and Snapchat in the form of Instagram Video and Facebook Poke, respectively.

Whether those redoubled efforts to stay relevant will keep the business successful remains to be seen. But for now, those who bought Facebook on day one and held on can finally feel vindicated.


Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


Comeback Kids: Facebook Finally Climbs Back Above IPO Price

ADP: Private Sector Added 200,000 Jobs in July dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® ADP: Private Sector Added 200,000 Jobs in Julyadp private sector employment report unemployment labor market hiringAP By Leah Schnurr

NEW YORK -- U.S. companies added 200,000 jobs in July, topping economist expectations, in an encouraging sign for the labor market recovery, a report by a payrolls processor showed Wednesday.


Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs. June's private payrolls were revised up to an increase of 198,000 from the previously reported 188,000.


The ADP figures come ahead of the government's more comprehensive national labor market report on Friday, which includes both public and private-sector employment.


Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it isn't always accurate in predicting the outcome. The report is jointly developed with Moody's Analytics.


Analysts were also trying to gauge what the figures might mean for the Federal Reserve's potential timeline for winding down its stimulus program. The U.S. central bank has laid out plans to start slowing its $85 billion in monthly bond purchases later this year if the economy progresses as expected.


"ADP clearly confirms the U.S. job engine is operating on all cylinders, slanting the odds toward, or at least putting the pressure on the Fed to taper sooner rather than later," said Boris Schlossberg, managing director at BK Asset Management in New York.


The Fed will release a statement Wednesday afternoon at the conclusion of its two-day policy meeting.


Friday's payrolls report is expected to show a net 184,000 jobs were added in July, including 189,000 private jobs.


The euro fell against the dollar immediately following the ADP report, while Treasury prices widened losses. U.S. stock index futures, though, were little changed.




  • The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.

    1. Gross Domestic Product


  • The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.

    2. Consumer Price Index


  • The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.

    3. Unemployment Rate


  • The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.

    4. Trade Deficit


  • Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.

    5 & 6. Personal Income and Personal Spending


  • Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.

    7. Consumer Confidence


  • The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.

    8. Housing Prices


  • Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.

    9. Leading Economic Index

  • More from DailyFinance:


ADP: Private Sector Added 200,000 Jobs in July

Court Ruling Could Delay Fiat's Buyout of Chrysler dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Court Ruling Could Delay Fiat's Buyout of Chryslerfiat chrysler buyout assembly line court ruling autoworkers health care trustAP MILAN -- A ruling by a U.S. judge risks delaying Fiat's plan to buy up all of Chrysler unless it can reach an out-of-court settlement with a healthcare trust that is a minority shareholder in the U.S. group.

The Italian carmaker said Wednesday it "looked forward" to solving a dispute with an autoworkers' health-care trust in court after winning a partial victory Tuesday in its path to buy the 41.5 percent of Chrysler it doesn't already own.


Delaware Chancery Court Judge Donald Parsons on Tuesday accepted the carmaker's legal positions in two pivotal disputes in its legal battle with VEBA, the United Autoworkers-affiliated health-care trust that owns 41.5 percent of Chrysler.


However, the judge stopped short of ordering VEBA to sell 54,154 Chrysler shares to Fiat for $139.7 million, as the latter had sought, saying certain questions still needed to be answered through testimony at a trial.


"Fiat looks forward to resolving the few remaining issues in the litigation, through the discovery requested by the judge, and remains confident that those residual issues will also be resolved in its favor," Fiat said in a statement Wednesday.


A trial is likely to take between a year and 18 months, said a person familiar with the matter. However, another person said the lengthy process makes it more likely that Fiat and VEBA will reach an out of court settlement on the dispute.


"We view the ruling as positive for Fiat and likely to help an out-of-court agreement," said UBS analyst Philippo Houchois in a research note. "We still view end 2013 as a likely deadline for an agreement as VEBA."


Fiat's lawyers will now be forced to argue in court with representatives of the health-care trust about why Fiat should pay less than the trust is asking in a deal the latter needs to pay future benefits for retired Chrysler workers.


The UAW became Chrysler's second-largest shareholder when Chrysler emerged from bankruptcy in 2009 and the union swapped future health-care payments owed to it for a stake in the company. VEBA is a trust that manages those health-care benefits on behalf of the union.


Fiat already runs the two automakers as a single company, but wants to buy the rest of Chrysler to squeeze out more synergies, cut borrowing costs and access some of Chrysler's cash flow.


Fiat shares were volatile in early trade, falling 0.8 percent to €5.98 ($7.92) at 0850 GMT (4:50 a.m. Eastern time).


"The ruling is a step forward and is good news," said a Milan trader. "But it's not decisive and the market is not discounting it as a done deal yet."




Court Ruling Could Delay Fiat's Buyout of Chrysler

Zombie Economy Overshadows Fed Meeting dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Zombie Economy Overshadows Fed Meetingfederal reserve chairman ben bernanke economy gdp earnings investingAPFederal Reserve Chairman Ben Bernanke By Patti Domm

GDP data Wednesday is expected to show a slow-moving, zombie-like economy, as the Fed meets for a second day.


Many economists expect second quarter growth to be paltry, less than one percent, and some think that data could help shape the Fed's thinking if it's even weaker than expected. The first quarter grew at a 1.8 percent rate.


The Fed meanwhile, isn't expected to say much new when its meeting ends. The 2 p.m. Eastern time statement isn't seen altering what Fed Chairman Ben Bernanke has already said about the Fed's plans to taper bond purchases before the end of the year. But it may adjust its comments to reflect a temporary slowing of the economy. The Fed, and many economists, expect a stronger growth rate in the second half of the year.


"[Wednesday] is an action-packed today. It's one of those weird ones where it's so action-packed, what if it is a dud?" said George Goncalves, Treasury strategist at Nomura Americas. "We have all these high expectations -- GDP, revisions to GDP, ADP, the Treasury going to announce at 8:30 their intentions for borrowing. We have the Fed later on."


It is also the end of the month, and that could make markets more volatile as traders square positions. For July, the S&P 500 is up five percent, bringing its year to date gain to 18.2 percent, The Dow was up four percent in July so far. Markets Tuesday were in a wait-and-see mode ahead of the Fed's announcement Wednesday. The Dow Jones industrial average (^DJI) edged 1 point lower to 15,520 and the S&P 500 (^GSPC) rose less than a point to 1,685.


The 10-year Treasury note was at 2.61 percent Wednesday. Traders are watching that yield level, as a move higher could take the market to a potential nervous zone for stocks.


"We've had a little bit of a backup in yields. [Month end] could amplify whatever's happening toward the end of the day," Goncalves said.


"I think GDP will be constructive. I think it's still coming in on the weak side. The Fed will react to it by not being too hawkish. Then we're going to quickly turn our attention to [nonfarm payrolls] on Friday," he said. The Fed has said it would base its tapering decisions on economic data , and it is particularly focused on employment so some traders expect to get more new information from the jobs data than the Fed statement.


The 8:30 a.m. Eastern time GDP release is also be important because the government will release revisions in the data going back to 1929. It last issued massive revisions in 2009. "It's clear the level of GDP is going to be higher by a substantial amount, maybe 3 percent," said Goldman Sachs Chief U.S. Economist Jan Hatzius.


CNBC's Steve Liesman takes a look at the FOMC's interest rate forecast. Who are the biggest hawks on the FOMC and is the market ignoring their view?


The revisions are expected to boost the level of GDP but not necessarily change the growth rate of GDP in recent years. "We're at 0.6 percent," for the second quarter, Hatzius said.


The revisions will include a new method to count research and development spending as a form of investment spending. Spending by entertainment and media companies on movies and certain other entertainment will now be considered investing in intellectual property. The revisions also include additional source data and recalculate seasonal adjustments.


JP Morgan (JPM) Chief U.S. Economist Michael Feroli said expects the Fed to be vague about the timing of its plans to taper back the $85 billion in monthly bond purchases. He expects the Fed to begin to move in September and start by cutting purchases by $20 billion a month in mortgage securities and Treasurys.


"To the extent we're right, that it is going to come in a very soft Q2 number, the Fed's known for a while. Even when Bernanke went before Congress and testified. He knew the Q2 print would be very bad and he didn't do anything to soften expectations for tapering later this year," said Feroli. J.P. Morgan expects second quarter growth of a half percent, but Feroli sees a pickup in the second half other year to 2.5 percent.


Feroli said the Fed could give a nod to the softer data. "I think they'll be able to ascribe some of it to transitory factors such as fiscal drag," he said.


There is some expectation the revised GDP data could help explain why GDP has been lagging other data for the last couple of quarters, especially the employment data. Other releases Wednesday include ADP's private sector payroll data at 8:15 a.m., and that number is expected to be around 183,000, down from 189,000 last time. That number is seen as a sort of precursor to Friday's July jobs report, expected to show 184,000 payrolls. The Treasury is also expected to announce the auction sizes for its next fiscal quarter at 8:30 a.m.


There is some talk the Fed may change its target of 6.5 percent unemployment for an area to begin to move short term rates, down to six percent. However, some economists think the Fed will wait for a later meeting to make any adjustments. Unemployment, at 7.6 percent last month, is expected to fall to 7.5 percent in July.


"Our view is it's steady as she goes for a lot of things. Now is not the time for the Fed to be doing anything, but just clarifying stuff," Goncalves said. "If ADP is bad, and it's followed by weak GDP, they could sound very dovish for sure." He and others say the Fed could choose to taper back a smaller amount in September if the data doesn't pick up.


There is also a blast of early earnings news, including reports from Comcast (CMCSA, CMCSK), CBS (CBS), MasterCard (MA) and Burger King Worldwide (BKW).




More from CNBC:




Zombie Economy Overshadows Fed Meeting

Three Simple Steps: Making Ends Meet dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Three Simple Steps: Making Ends MeetDon't spend more than you earn: It's simple, fundamental, and one of the most important steps you can take to preserve your financial health. That holds true whether you're just starting out, are in the midst of a successful career, or are adjusting to one of the many curve balls that life can throw your way.

It's also understandable if you're a little worried about how to make all the pieces fit together successfully. It's incredibly easy to spend a little here and there without realizing it, only to wind up short on the cash you need to make the mortgage or rent payment. But with a little bit of planning and by making some careful choices, making ends meet can soon move from weekly worry to second nature.


3 Simple Steps for Success


Fundamentally, there are really only two key variables in the "making ends meet" equation: what you earn and what you spend. Making ends meet is simply the act of figuring out a way to make sure the money you have coming in from your earnings is larger than the money you've got going out from spending. With that in mind, here are three simple steps that can help you succeed:


1. Figure out where your money is going. Write it down with pencil and paper, track it in a spreadsheet, or use personal finance software like Mint.com or Quicken. Whatever you spend, whether it's on a monthly bill like your rent or an impulse purchase from a vending machine, it needs to be included in your tracking. It's critical that you know where every dime of your hard-earned money is going if you want a shot at being able to consistently make ends meet.


2. Prioritize and adjust your spending. Once you have that list that shows you where your money is going, look over each expense and mark it as a "have to have," "like to have," or "can live without." The expenses you can live without become easy fodder for cutting -- simply tell yourself that it's something you'll consider bringing back into your life once you're reliably making ends meet.


For the remaining items on your list, look through them and ask whether you can figure out a way to spend less on them -- either by downsizing, buying in bulk, or by shopping around for better deals. You may be able to cut your costs dramatically without giving up the things you feel you really need. By this point, your expenses may well be low enough so that you can cover them with your income. If not, start cutting down the "like to have" items until your income and expenses are balanced.


3. Figure out ways to bring in more cash. If you have stuff you no longer need, consider selling it for a one-time infusion of cash. One-time money can go a long way toward helping you pay off debts.


Once a debt is paid off, the principal and interest payments you had beed making will go away, which translates directly to money in your pocket, without affecting the rest of your lifestyle. While one-time money won't help you cover your month-to-month costs for very long, it can help you make a dent in your debt to free up cash flow.

For more ongoing cash, if you get paid hourly, taking on an extra shift here and there or working overtime will directly result in more money in your pocket. If you're salaried, moonlighting is a time-honored approach to bring in more cash. No matter how you earn the money, though, the secret to making sure that extra cash helps you make ends meet is to loop back to the first two steps to make sure your spending stays in control.


Get Started Now


If you're having trouble making ends meet, right now is the absolute best time for you to take that first step. Once you feel the financial peace of mind and the incredible stress reduction that comes from reliably covering your costs every month, you'll be glad you did. Best of all, you may very well start seeing the results of your efforts almost instantly, as soon as you get control of where every penny you spend goes.


Motley Fool contributor Chuck Saletta welcomes your comments. Try any of our Foolish newsletter services free for 30 days.


Three Simple Steps: Making Ends Meet

Facebook Stock Just Pennies Shy of Hitting IPO Price Again dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Facebook Stock Just Pennies Shy of Hitting IPO Price AgainHand holding a smartphone with a Facebook logo in front of dollar bills, symbolic image for the Facebook IPOAlamy By Alexei Oreskovic

Facebook's (FB) stock on Tuesday came within a hair of reclaiming its $38 debut price for the first time since going public in 2012, a milestone in the social networking company's effort to wipe away Wall Street's skepticism of its business.


The stock has surged more than 40 percent in the past week after the company reported blowout quarterly results that showed Facebook's progress building a mobile advertising business. Shares of Facebook climbed as much as 7 percent to $37.96 in heavy trading on Tuesday, before settling back to finish the regular session at $37.63.


The social network, with 1.15 billion users, has never traded at or above $38 since the first few days after its initial public offering in May 2012.


Facebook's market value was cut in half in the months following the IPO as concerns about issues ranging from slowing revenue to massive insider selling made the Internet company's stock a Wall Street punch line.


"Most companies of that size don't re-accelerate their growth rate. Facebook's been an exception," said Aaron Kessler, an analyst with Raymond James. "I would say they're in better shape today than they were at the IPO price and the stock is still below that."


Facebook options volume was frenzied on Tuesday, as overall turnover was 3.8 times the recent daily average, according to options analytics firm Trade Alert. Traders on Tuesday exchanged 694,000 calls and 300,000 puts on Facebook.


The most popular options were the weekly $38 and $37 strike calls expiring this Friday as most traders expected gains in coming days. One player liked the weekly $32.50 strike puts expiring on Aug. 9, which appeared to be bought 15,000 times for only a dime, said options strategist Frederic Ruffy.

Facebook's recent success building a mobile advertising business -- an area where many of its rivals have struggled -- and the online service's expanding number of daily users have won back investors' respect and confidence in its prospects. That has fueled a rebound in the shares, which are up more than 50 percent in July.


Facebook said last week its mobile advertising revenue grew 75 percent in a span of three months, trouncing analyst targets and delivering the company's strongest revenue growth since the third quarter of 2011. Many analysts raised their price targets above the $38 level following Facebook's quarterly report last week.


The second quarter results "were really a game-changer in terms of how Facebook is perceived on the Street," said Pacific Crest Securities analyst Evan Wilson. "It was pretty close to the perfect quarter."


Facebook announced plans on Tuesday to help market and distribute mobile games on its social network in exchange for a cut of revenue that the games generate, raising hopes that the company could tap a new business. And many investors expect Facebook to offer high-priced video ads in the coming months.


Gradually Erasing the Doubts


Created in a Harvard dorm room by CEO Mark Zuckerberg in 2004, Facebook become the first American technology company to debut on Wall Street valued at more than $100 billion.


Facebook's IPO was to have been the culmination of eight years of breakneck growth for a company that became a social and cultural phenomenon. Instead, it was marred by a series of trading glitches on its debut, and the company and its underwriters subsequently faced accusations of pumping up the price and inadequate disclosure.


Facebook shares opened 11 percent above the $38 offering price on May 18, 2012. But a series of problems that plagued the Nasdaq Stock Market where the shares debuted contributed to a sharp fall in the stock after it peaked that day at about $45. It closed at $38.23, and on the following Monday shares fell through the $38 price.


By early September, Facebook's shares bottomed at $17.55.


The cool investor reception to Facebook and other consumer dotcom debutantes at the time, such as Groupon (GRPN) and Zynga (ZNGA), put a chill on the Silicon Valley IPO train.


"The question has never been do a lot of people go to Facebook. The question is how much revenue and profitability can Facebook derive from that activity," said Pacific Crest's Wilson.

"There have been many that have questioned whether or not Facebook would grow significantly, but Q2 kind of erased that doubt," he said, referring to Facebook's business.


(Reporting by Alexei Oreskovic; Additional reporting by Doris Frankel in Chicago; Editing by Richard Chang and Lisa Shumaker)


Facebook Stock Just Pennies Shy of Hitting IPO Price Again

Bailed-Out Chrysler Thriving and Ready for IPO by Year End dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Bailed-Out Chrysler Thriving and Ready for IPO by Year EndChrysler 2014 Jeep Cherokee Trailhawk.AP Chrysler Group, pumped up by the strong demand for its Jeep vehicles and Ram pickup truck, reported healthy second quarter earnings. Its CEO said the solid performance had the company poised for an initial public offering by the end of this year.

Chrysler reported net income of $507 million for the second quarter, up 16 percent from the same period a year earlier. The company said modifications it needs to make to the Jeep Cherokee and Liberty models to prevent fires will take a bite out of earnings for 2013.


CEO Sergio Marchionne, who also serves as CEO of Italian automaker Fiat, which has a controlling stake in Chrysler, said the company is preparing paperwork for its long-awaited IPO. "November or December would be the ideal time" for the Chrysler listing, said Marchionne.


Will there be demand for Chrysler stock? Auto stocks have underperformed the market the last two years except for Tesla Motors. And General Motors, which along with Chrysler was the beneficiary of taxpayer-assisted bankruptcy in 2009, has not enjoyed great demand for its shares until recently.


For more on Chrysler's fortunes, get the rest of the story at AOL Autos.


Bailed-Out Chrysler Thriving and Ready for IPO by Year End

Selasa, 30 Juli 2013

Morgan Stanley Fined for Selling Exotic Funds to Unwary Elderly dailyfinancee.blogspot.com

Written By Sandrina Malakiano; About: Morgan Stanley Fined for Selling Exotic Funds to Unwary Elderly dailyfinancee.blogspot.com on Selasa, 30 Juli 2013

dailyfinancee.blogspot.com ® Morgan Stanley Fined for Selling Exotic Funds to Unwary ElderlyARCHIV: Die Zentrale der US-Investmentbank Morgen Stanley in New York City (USA) (Foto vom 16.03.09). Die amerikanische Bank Morgan Stanley hat im Zusammenhang mit dem Boersengang von Facebook einer Strafe von fuenf Millionen Dollar an die Boersenaufsicht von Massachusetts zugestimmt. Die Boersenaufsicht des US-Staates warf der Bank vor, niedrigere Umsatzzahlen nur einigen Analysten und nicht der Oeffentlichkeit zugaenglich gemacht zu haben. Morgan Stanley raeumte keine Schuld ein, stimmte jedoch der Zahlung zu. (zu dapd-Text) Foto: Michael Kappeler/dapdAP/Michael Kappeler By Trevor Hunnicutt

Morgan Stanley (MS) has agreed to pay a $100,000 fine to New Jersey state securities regulators for selling exotic exchange-traded funds to unwary investors, state officials said on Tuesday.


The New Jersey Bureau of Securities says improperly trained Morgan Stanley financial advisers sold non-traditional funds, such as leveraged and inverse ETFs, to elderly investors seeking investments that would provide income. The investments resulted in losses for those clients, regulators said.


In a statement, Morgan Stanley said they were "pleased" to reach a resolution.


"The settlement covers the period of January 2007 to June 2009, and Morgan Stanley revamped its processes regarding these products over 4 years ago," the statement read.


Leveraged and inverse ETFs use derivatives and debt to magnify market returns. They are designed to deliver amplified returns in the short run and can deviate substantially from the benchmarks over longer time periods. Because many of the funds reset on a daily basis, they can radically differ from the performance of their underlying benchmark.


In a statement, Abbe R. Tiger, Chief of the New Jersey Bureau of Securities, said investigators "found that Morgan Stanley's staff lacked proper training about non-traditional ETFs, and that the company failed to adequately supervise its personnel handling ETF transactions, to the detriment of investors."


There are 257 leverage and inverse ETFs on the market with a market capitalization of $35.44 billion, according to XTF, a fund data service.


Both products are the subject of litigation and warnings from regulators. In 2009, the U.S. Securities and Exchange Commission issued an alert that advised buy-and-hold investors about the "extra risks" posed by leveraged and inverse ETFs.


Last week a federal appeals court rejected a lawsuit challenging ProShares Advisors LLC's disclosures of the risks of holding 44 of its leveraged ETFs.

Morgan Stanley's payment includes $65,000 in civil penalties, $25,000 to reimburse the state's investigative costs and $10,000 for the state bureau to use for investor education. Morgan Stanley has already paid nearly $96,940 in restitution to New Jersey investors.


In April 2012, Morgan Stanley consented with Wall Street's industry funded watchdog, the Financial Industry Regulatory Authority, to nearly $2.4 million in fines and restitution connected with the non-traditional ETFs.


Dev Modi, a securities arbitration lawyer in Florham Park, New Jersey, who represents investors, said the fines were likely to bring more attention and possibly litigation on the risks of exotic securities.


"Some of these non-traditional ETFs have a lot more risks with them than the general public realizes," said Modi.


Morgan Stanley Fined for Selling Exotic Funds to Unwary Elderly

Accused SAC Capital Tipster Arrested in Tech-Deal Probe dailyfinancee.blogspot.com

dailyfinancee.blogspot.com ® Accused SAC Capital Tipster Arrested in Tech-Deal Probesac capital advisors steven cohen sandeep aggarwal arrested securities fraud chargeSeth Wenig/AP A securities analyst who passed nonpublic information about Yahoo and Microsoft to a portfolio manager at Steven A. Cohen's hedge fund SAC Capital Advisors was arrested in California, federal prosecutors said Tuesday.

Sandeep Aggarwal, an analyst covering technology, is to be arraigned later Tuesday on charges of conspiracy to commit securities fraud and wire fraud at the U.S. District Court for the Northern District of California.


Federal Bureau of Investigation agents arrested Aggarwal, 40, in San Jose, Calif., on Monday.


Aggarwal, who worked in 2009 as a research analyst covering technology at the firm Collins Stewart in San Francisco, is to be arraigned Tuesday at the U.S. District Court for the Northern District of California. Lawyers for the 40-year-old defendant couldn't be reached for comment.


Aggarwal, who also faces a civil suit by the U.S. Securities and Exchange Commission, is accused of tipping former SAC portfolio manager Richard Lee, as well as an employee at another hedge fund, about a planned partnership between the Internet company, Yahoo (YHOO), and the computer company, Microsoft (MSFT).


The charges come less than a week after prosecutors in New York charged the $14 billion fund SAC Capital with securities fraud and wire fraud, claiming the hedge fund fostered a corrupt business culture in which portfolio managers were encouraged to use any means possible to find an "edge" in stock trading.


The criminal charges, along with an administrative proceeding accusing Cohen, SAC's founder, of failing to properly supervise his employees, are the result of a multiyear investigation into insider trading at the firm. So far, 10 former SAC employees have been charged or implicated for insider trading.


Lee, who worked as a portfolio manager at SAC between 2009 and 2013, pleaded guilty to charges related to insider trading and is cooperating with the government. The criminal complaint against Aggarwal said he spoke with a Microsoft employee on July 9, 2009, and learned of the potential partnership. A day later, according to the complaint, Aggarwal called Lee to discuss the partnership before it was announced.


"Like many others before him, Sandeep Aggarwal allegedly broke the law and provided material nonpublic information on a Microsoft-Yahoo deal," said FBI Assistant Director-in-Charge George Venizelos. "When questioned by his employer about the source of the information, he lied."


Aggarwal, an Indian citizen with permanent U.S. residency status, will make an initial appearance in federal court in California before facing the charges in New York, prosecutors said.




Accused SAC Capital Tipster Arrested in Tech-Deal Probe