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Jan 27, 2010

MarketWatch : Personal Finance Daily, January 27,2010

Personal Finance Daily
JANUARY 27, 2010

Wednesday's Personal Finance stories

By MarketWatch

Don't miss these top stories:

I believe I heard a cable-news anchor on Wednesday say "a new economy" would develop because of Apple Inc.'s iPad. I don't think the Federal Reserve got that memo. Or maybe the bank chiefs were too busy buying their new tablet devices to raise interest rates ahead of consumers' mad dash to the Apple store.

In any event, in a sign that Fed policy-makers think the economy remains shaky, they kept interest rates steady Wednesday. But there are signs we're moving forward. The Fed statement offered some snippets of happy thoughts for us Main Streeters. "Economic activity has continued to strengthen" and "deterioration in the labor market is abating," policy-makers said. Meanwhile, the Kansas City Fed chief dissented, calling for the central bank not to be such a stick in the mud. See this MarketWatch First Take for a parsing of the Fed's statement.

If economic activity is indeed picking up, expect higher rates in the not-so-distant future. That'd be good news for savers, but bad for borrowers. Of course, we live not by interest rates alone, and some borrowers might get good news in the months ahead if lawmakers embrace President Barack Obama's recent proposals. For one, the administration wants to cap borrowers' student-loan payments to no more than 10% of their discretionary income. See the White House fact sheet.

Obama's likely to tout some of his proposals in this evening's State of the Union address. The question is, will Congress ever pass any of these laws?

Hard to know. I bet if I had an iPad, it could tell me.

-- Andrea Coombes , assistant Personal Finance editor


Study abroad? It will cost you, but experience is priceless

Patti Ristau said she was terrified when she first landed in Seville, Spain, for a semester studying abroad. Though the 2009 University of Wisconsin graduate had a double major that included Spanish and felt sure of herself speaking the language in Mexico and the Caribbean, Ristau, 22, was worried she would be like a taco at a tapas bar in Seville. And she was all alone.
See full story.


Stocks have more room to run, newsletter editor says

Stephen L. McKee, editor of the No-Load Mutual Fund Selection & Timing Newsletter, says that while investors may be worried about a market correction, they should be looking for bargains.
See Your Money with Chuck Jaffe.


Commentary: Parsing the Fed statement

Top Federal Reserve policy-makers are getting just a little bit more confident about the economy, but they still remain far from ecstatic about the recovery.
See MarketWatch First Take.

Fed holds steady but is not unanimous

The Federal Reserve on Wednesday held its policy steady but was not unanimous for the first time in a year. The Fed kept rates at ultralow levels and said that these low rates were likely to remain for an "extended" period. Economists had expected little change from the Fed.
See The Fed.

Obama to focus on jobs, economy in State of the Union

The politically wounded president goes before Congress to deliver his first State of the Union address Wednesday night to sell a restive public on his plan to turn around the ailing economy and create jobs for out-of-work Americans.
See full story.

High stakes for Obama's first State of the Union

Obama is preparing to deliver his first State of the Union address tonight, hoping to turn his political fortunes around. Doug Luzader reports.
 Watch Video Report.

Republicans make new claim about Bernanke and AIG

Republican politicians made a new claim Wednesday about Federal Reserve Chairman Ben Bernanke's involvement in the 2008 bailout of insurance giant American International Group Inc. (AIG), one day before a vote on his renomination for a second term at the central bank.
See full story.

Democrats take issue with Geithner's AIG bailout

Democratic lawmakers on a key oversight committee plan to lash out at Treasury Secretary Timothy Geithner and his predecessor, Henry Paulson, at a hearing Wednesday about their failure to obtain concessions for taxpayers as part of a $182 billion rescue of AIG, according to staff on the committee.
See full story.

G20 must lead crackdowns on banks

Banks must be reined in and regulations overhauled, but no country can go it alone, French President Nicolas Sarkozy said Wednesday, while pressing a call for a global crackdown on executive pay and accounting standards.
See full story.


Apple launches iPad device

Apple (AAPL) put an end to months of speculation on Wednesday when the company lifted the wraps on the iPad, a new touch-screen tablet computer.
See full story.

Commentary: Is Apple's low price for the iPad deceptive?

After weeks of speculation, rumors, and hype about Apple's tablet, the most anticipated tech product of the year is bound to be a bit underwhelming.
See MarketWatch First Take.

The new iPad

See Chief Executive Steve Jobs unveil Apple's new iPad.

 Watch Video Report.


Recession is retirement wake-up call

Less than half of us think we have a handle on how much income we will need to live comfortably in retirement, or have a plan to save more, according to a survey from Putnam Investments. But the recession is getting more of us to think along these lines. Says Jeff Carney, Putnam's head of retirement, "it's still half the amount that we need, but it's encouraging to see the trend heading the right direction."
 Listen to Audio Report.

Public pensions look at leverage strategy

Public-pension funds needing to boost their returns but frustrated with hedge funds and private-equity investments are turning to one of the oldest investment strategies -- using borrowed money to boost performance.
See full story.


Sales of new homes fall 7.6% to nine-month low

Capping the worst year for housing since World War II, sales of new U.S. homes fell sharply in December for the second month in a row after a popular tax credit for buyers was set to expire, the Commerce Department estimated Wednesday.
See Economic Report.

New-home sales fall

New home sales fell unexpectedly in December, hitting a nine-month low. Kelsey Hubbard speaks to Michael Torres of Adelante Capital about what the data say about the state of the housing market.
 Watch Video Report.

Report suggests unsteady housing recovery

Dave Blitzer, chairman of the Index Committee at S&P, speaks to Kelsey Hubbard about the latest S&P Case-Shiller home-price indexes.
 Watch Video Report.

Mortgage applications drop

Mortgage applications filed last week fell a seasonally adjusted 10.9% from the week before, amid doubts about whether the pace of refinancing activity can be sustained, the Mortgage Bankers Association reported Wednesday.
See Mortgages.


Commentary: Toyota's $13 billion recall

Motorists owe Toyota Motor Corp. (TM) a big thank-you for reminding them what really matters most when they get behind the wheel: good brakes, steering and an accelerator that doesn't unexpectedly gun the engine.
See MarketWatch First Take.


Intelligent Investing with Steve Forbes


Intelligent Investing Panel
Let's All Go To The Movies
More people are going to the movies than renting DVDs. More trouble for Blockbuster.
With Alexandra Zendrian
Intelligent Investing
Keep Buying Apple
Apple blew by earnings estimates and remains an attractive stock for every investment style.
With Darcy Travlos

Video: Intelligent Investing With Steve Forbes

Intelligent Investing With Steve Forbes
Alwaleed: Citi's Future Holds Promise
Alwaleed Bin Talal says Citi's only concerns are mortgages and a weakened consumer.

Is the Dow in Trouble?

For some time now we’ve been very concerned that all the major indexes are in the “thin air” and have exceeded some key Fibonacci retracement levels. This new short video explores that and looks at a key Japanese candlestick formation that could really make a difference and be the first clue in the demise of the Dow..

You can watch this new and interesting video free of charge clicking in the next link:

Fernando Guzmán Cavero 


NFA: : NFA permanently bars Barbados futures firm and bars principal for three years

For Immediate Release For More Information Contact:
Larry Dyekman (312) 781-1372,
Karen Wuertz (312) 781-1335,

NFA permanently bars Barbados futures firm and bars principal for three years
January 27, Chicago - National Futures Association (NFA) has permanently barred Kingz Capital Management Corporation (KCM) from NFA membership. KCM was registered as a Commodity Trading Advisor and Commodity Pool Operator located in Barbados. NFA also barred David M.S. Krywenky, the firm's principal, for three years.
The Decision, issued by an NFA Hearing Panel, is based on an NFA Complaint filed in September 2009 and a settlement offer submitted by KCM and Krywenky.
The Complaint charged KCM and Krywenky with failure to uphold high ethical standards and failure to supervise. The Complaint also charged KCM with cheating, defrauding or deceiving another person or attempting to do so.
Following his three-year bar, if Krywenky applies for associate NFA membership with any NFA Member, he must pay a $25,000 fine.
The complete text of the Complaint and Decision can be found on NFA's website (
NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.

CFTC : 2010 Speeches, testimonies & Statements Update

2010 Speeches, Testimonies & Statements



January 27, 2010

Remarks of Chairman Gary Gensler, OTC Derivatives Reform, Fordham University College of Business Administration

January 14, 2010

Statement of Steve Sherrod's, Acting Director, Division Market Surveillance , Commodity Futures Trading Commission

January 14, 2010

Presentation of Steve Sherrod's, Acting Director, Division Market Surveillance, Commodity Futures Trading Commission

January 14, 2010

Statement of Dan Berkovitz, General Counsel, Commodity Futures Trading Commission

January 14, 2010

Opening Statement of Chairman Gary Gensler, Commodity Futures Trading Commission

January 14, 2010

Closing Statement of Chairman Gary Gensler, Commodity Futures Trading Commission

January 12, 2010

Remarks of Chairman Gary Gensler, OTC Derivatives Reform, Atlantic Council

January 6, 2010

Speech by Commissioner Michael V. Dunn, 55th Annual Beltwide Cotton Production Conference

January 6, 2010

Remarks of Chairman Gary Gensler, “OTC Derivatives Reform”, Council on Foreign Relations Two at Fed Had Doubts Over Payout by A.I.G.

The New York Times E-mail This 

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BUSINESS   | January 27, 2010
Two at Fed Had Doubts Over Payout by A.I.G.
After rescuing the American International Group with a loan, federal officials rejected forcing trading partners to return $30 billion they had received from A.I.G.

[FWD: My Alerts: FGC BOLSA - FGC FINA (2 articles)]

Fernando Guzmán Cavero

-------- Original Message --------
Subject: My Alerts: FGC BOLSA - FGC FINA (2 articles)
From: <>
Date: Tue, January 26, 2010 11:00 pm
To: < > My Alerts
My Alerts alerts on your Mobile Phone or PDA:

January 27, 2010 Compiled: 12:59 AM


The company, despite billions in aid from the government, will need several factors to break favorably in order to repay the assistance.


After rescuing the American International Group with a loan, federal officials rejected forcing trading partners to return $30 billion they had received from A.I.G.

Forbes . co.m: Daily Opinions , Wednesday, January 27, 2010

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Money Morning:: The Government Wants to Hijack Your 401K

January 27, 2010
The Government Wants to Hijack Your 401(k)

By Keith Fitz-Gerald, Chief Investment Strategist, Money Morning

It's bad enough that we've been forced to bail out Wall Street. But now the Obama administration is hatching plans to raid our retirement savings, too.

To say that I'm "outraged" doesn't come close to describing the emotions I experience every time I think about the government's latest hare-brained scheme.

According to widespread media reports, both the U.S. Treasury Department and the Department of Labor plan are planning to stage a public-comment period before implementing regulations that would require U.S. savers to invest portions of their 401(k) savings plans and Individual Retirement Accounts (IRAs) into annuities or other "steady" payment streams backed by U.S. government bonds.

Folks, there's only one reason these agencies would do such a thing - the nation's creditors think that U.S. government bonds are a bad bet and don't want to buy them anymore. So like a grifter who's down to his last dollar, the administration is hoping to get its hands on our hard-earned savings before the American people realize they've had the wool pulled over their eyes ... once again.

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So what happens if no formal offer materializes? Investors could get much, much richer. For details on this "win-win" situation, please go here now for the full report.

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Mortgage Investments Offer Both Opportunity and Risk: Making Sense of Conflicting Reports

By Zach Scheidt, Guest Editorial, Money Morning

Recently, I finished reading an engaging book that explained in detail how John Paulson generated more than $20 billion betting on a crash in the housing markets. Many wise investors could see the writing on the wall months ahead of the panic period, but since you can't exactly short an individual house, it was difficult to figure out the best way to profit from the coming crash.

After months of studying and more than one false start, Paulson eventually determined that the best strategy was to buy protection on mortgage securities. I'll spare you the tedious details, but the concept of mortgage securities is very interesting (and potentially very lucrative). Essentially, many of the loan originators - the companies actually lending money for home purchases - didn't want to keep these loans on their books. Instead, they bundled the loans together in a pool and sold these "securitized" loans to investors.

Over time, the process got very complicated, with the pools being sliced up into different categories - some with more risk and potentially greater returns, and some with much lower risk and consequently lower profits. Leading up to 2007, there was so much investor demand for these securities that the loan originators couldn't keep up with all the buyers. Eventually, new derivative markets emerged, allowing more investors to bet on these pools of mortgages.

When housing prices started to decline, trouble hit these mortgage-backed securities (MBS) and the risky sections started taking on losses. Like a vicious disease, the losses quickly spread up the line, ultimately causing losses in even the most conservative securities. Major banks and brokerage firms who owned billions of dollars' worth of these toxic assets were in deep trouble because they had borrowed huge sums to buy mortgage investments that were now worth pennies on the dollar.

The devastation in mortgage investments has had a huge impact on investment psychology. Investors from Park Avenue to Main Street are still shell-shocked by the devastation and many are blind to see opportunities developing in some specific mortgage investments.


Can Bernanke Tune Out Political Pressure as the FOMC Again Ponders Policy Changes?

By Jason Simpkins, Managing Editor, Money Morning

When U.S. Federal Reserve Chairman Ben S. Bernanke emerges from the central bank's monthly policymaking meeting at around 2:15 p.m. today (Wednesday), it's a near certainty that he'll reaffirm his pledge to keep interest rates "exceptionally low" for an "extended period" of time.

Bernanke has kept the benchmark Federal Funds rate at a record low range of 0.00%-0.25% since December 2008, and that's not likely to change as a result of today's meeting of the central bank's Federal Open Market Committee (FOMC).

At some point, however, Bernanke will have to tighten credit and raise interest rates in order to soak up all the excess liquidity and curb inflation in the U.S. economy. But the question remains: When that time comes, will Bernanke have the fortitude to do so?

There's no simple answer. And for good reason: With the country mired in its worst financial crisis in most Americans' lifetimes, the central bank's decisions now are as political in focus as they are economic.

Read full article... British Central Banker Favors Splitting Big Banks

The New York Times E-mail This

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BUSINESS / GLOBAL BUSINESS   | January 27, 2010
British Central Banker Favors Splitting Big Banks
An argument once seen as an academic debate is now gaining traction among policy makers.