BP oil spill fund has paid just a fraction of the cash

The U.S. government ordered BP to set aside a $20 billion oil spill fund in the wake of the Deepwater Horizon catastrophe. A year later, the Gulf Coast Claims Facility, meant for nursing companies and individuals impacted by Gulf oil leak back to economic health, has paid out only a fraction of the cash. Claimants waiting for payment describe a time consuming, convoluted process that has been made more complicated by a horde of attorneys seeking to profit from the BP oil spill fund.

The entire BP oil leak claims to process

About 19 percent of the $20 billion BP set aside for the oil leak claims was paid in the BP oil spill claims with $3.8 billion paid in total by the Gulf Coast Claims Facility a year after the Gulf of Mexico accident in 2010. Kenneth Feinberg said that 201,261 claims were paid as the Obama administration appointed person to distribute the BP oil spill fund. There have been over 857,000 claims already. In five states there are 35 offices for the Gulf Coast Claims Facility. The BP oil leak claims will be paid by it until 2013, in August. Feinberg has been criticized by Gulf residents and local government officials for a claims process that has been called confusing, unfair and slow.

Damage proof

In a statement issued Tuesday defending his administration of the BP oil spill fund, Feinberg said “Amounts requested by claimants very often bear no reasonable relationship to the damages really proven,” noting that one applicant tried to claim all $20 billion. About 72 percent of the claims from the BP oil spill have had payments or offers made. Claims were denied also. Not all could be accepted. Documentation is necessary for some pending claims. The BP oil claims process has frustrated businesspeople for instance fishermen accustomed to operating on an informal cash basis who often seal deals with a handshake instead of a contract. In 574 cases disputed by claimants who believed payment was too low or rejection was unfair, the Coast Guard, charged with arbitrating disputes, hasn’t overturned a single one.

Getting the money is all that matters

Tens of thousands of Gulf Coast residents — particularly vulnerable populations with language and culture disadvantages such as the region’s large contingent of Vietnamese fishermen — have been misled into signing up with lawyers or have been unaware that claims have been filed in their name. Feinberg spoke on the fraudulent activity. He said it was “an obstacle to the efficiency and speed in getting the checks out.” According to the New York Times, there are some groups targeted more than others. One of these includes the Vietnamese fisherman. When BP settles, attorneys end up with more cash for how many clients are on the list. There were thousands of Vietnamese listed on a San Antonio law firm’s list according to the New York Times. There was not an acceptance with the claims. Individuals were surprised when they realized they were on the list for a claim.

Citations

CNN Money

money.cnn.com/2011/04/18/news/companies/BP _spill_claims/?npt=NP1

24/7 Wall Street

247wallst.com/2011/04/19/the-BP -20-billion-gulf-claims-facility-has-paid-nearly-nothing/

Los Angeles Times

latimes.com/news/nationworld/nation/la-na-gulf-spill-claims-20110419,0,2595018.story

New York Times

nytimes.com/2011/04/19/us/19spill.html?_r=1

Tax day - Nearly half of Americans owe nothing

April 18 is a date that lives in infamy for many people as it is Tax Day, the day when income tax returns are as a result of Internal Revenue Service. Despite the resentment towards income taxes, the legal obligation nevertheless exists. Almost 50 percent of income tax filers won’t owe the government a dime.

Little over half of Americans pay taxes on income

Tax Day 2011 falls on April 18 instead of April 15. Bloomberg reports that about 45 percent of households won’t have to pay any 2010 taxes at all. The Earned Income Credit and Making Work Pay Credit are examples of exemptions and deductions that are common in the low-income households. Those who pay no income taxes are very low income or living on a fixed income for instance Social Security or disability income. Also, hardly any taxes are paid by people who make little and have kids. The average tax refund, according to CNN, was $3,003 last year.

Those making money do not pay as much

The tax burden for the wealthiest working class individuals, according to Daily Finance, has been falling for a while. From 1992 to 2007, there was a decrease in the amount of income being paid by the 400 highest paid income tax returns. It went down from 26 percent to 17 percent on average. Though the wealthiest 10 percent account for more than half the nation’s tax revenue by dollar amount and the wealthiest 5 percent account for 44 percent, the more lucrative tax breaks, such as for charitable contributions, are available to the rich. In the United States tax code, there are over $1 trillion in tax breaks. That means $8,000 to every tax payer could possibly be given as a refund. The Internal Revenue Service will not let you take it though. You’ve to “deserve” this. There is more of a chance for charges from the IRS. USA Today reports that this will be to keep everyone in line.

Developed countries typically pay more in taxes than Americans

MSNBC states that Americans really pay way less in taxes than the rest of the developed world does even though many in the U.S. like to protest or avoid taxes. The Organization for Economic Co-operation and Development, or OECD, maintains data on taxes in the developed world. According to the OECD, income tax in the United States generally averages 24 percent. In Danes, it is 48 percent; in France it is 42 percent; in Germany it is 37 percent; and in Australia it is 27 percent.

Information from

Bloomberg

bloomberg.com/news/2011-04-18/nonpayers-complicate-republican-effort-at-overhaul-of-u-s-tax-code.html

CNN

money.cnn.com/2011/01/14/pf/taxes/tax_refund/index.htm

Daily Finance

dailyfinance.com/2011/04/18/super-rich-see-federal-taxes-drop-dramatically/

USA Today

usatoday.com/money/perfi/taxes/2011-04-17-Prosecutions-of-tax-evaders-up.htm

MSNBC

msnbc.msn.com/id/42612937/ns/business-tax_tactics

Children most typical sufferers of identity theft

Child identity theft is becoming all the rage. New research shows that identity thieves are focusing increasingly on children because parents do not pay attention and the theft can go undetected for years.

All about child identity theft

Thousands of children and their families are being victimized by identity theft and thousands more are at risk, according to a report by Carnegie Mellon University’s CyLab cybersecurity research center. The report examined the identity protection scans of 42,232 kids conducted in 2009-10 by the Debix AllClear ID Protection Network after parents were notified their children’s IDs may have been compromised. There were 4,311 children, a little over 10 percent, which had identity thieves steal Social Security numbers according to Debix AllClear ID data. Obviously there is problem when there is a 0.2 percent rate of United States adults that have their identity stolen which is 51 times lower than the child rate according to the Debix AllClear ID 663 attacks out of 347,362 adults. There was a five month old that had her identity stolen. There were 42 open accounts in Arizona that a 17 year old girl found out she had. In all of these charge cards, vehicle loans and ! mortgages, she owed $725,000 in debt. There were eight individuals that had her Social Security number. There was a mortgage foreclosure that a 14-year old boy had from 10 years earlier on his credit rating in Kentucky.

It is friendly fraud with kids

After child identity theft started in the early 1980s, it has come even farther. The Social Security Administration got orders from the Internal Revenue Service. It said that children should be given Social Security numbers to go with them. Most children become identity theft victims at the hands of parents, family members or close friends who have access to their Social Security numbers. According to Javelin Strategy and Research, “friendly fraud” made up 30 percent of child identity theft cases last year. Identity thieves are able to take out loans, create accounts and even get credit cards since age is not verified in credit checks. The Identity Theft Resource Center helped a young man trying to work on his credit. Evidently his father had, years ago, stolen his identity and damaged his credit beyond repair.

Figuring out child identity theft

According to the Identity Theft Resource Center, every child should be taught out identity theft. They ought to know sharing information on the Internet isn’t always safe. Make sure you have a secure place where you keep Social Security numbers, birth certificates and other personal information. You may have mail that came in a child’s name. This could possibly be a concern that credit was opened for the child. In case you are a parent, gets a-hold of the major credit agencies. Get a credit rating for the child. If no credit score exists, the child is likely in the clear. There needs to be a security alert filed with Equifax, TransUnion and Experian if there’s a credit score. File a police report using the credit reports as evidence. The fraudulent account listed in a police report will require credit states to take them off of the report. It will only take 30 days max to get this to occur.

Citations

Forbes

blogs.forbes.com/moneybuilder/2011/03/31/protecting-your-child-from-identity-theft/

Atlanta Journal Constitution

ajc.com/news/child-identity-theft-increases-572552.html

Wallet Pop

walletpop.com/2011/04/05/report-as-child-id-theft-grows-rapidly-consider-these-precauti/

Investing fundamentals for the unconfident investor

Investing is all about making money. Day traders may savor the adrenaline rush, however profit is the reason. The right approach needs just a couple basic guidelines. It also pays to know how not to invest.

Starting your retirement

Starting a 401(k) plan is advised by experts as early as possible. Your retirement money will not be taxed if it sits in an account and yet at the same time will earn interest, capital gains and dividends. Let it sit for a while and gain interest for retirement.

A 401(k) isn’t really an investment. It is more of an account that saves money and builds interest at different rates.

Conserve during the calm before the storm

In addition to a retirement account, it is essential to establish savings. Online resources like Motley Fool or any worthwhile financial adviser can help you determine how much you need to realistically be saving.

Roth and Traditional IRA accounts should be maxed out

A Roth IRA retirement account gives you the flexibility to make contributions after taxes, so taxes are paid only upon withdrawal. If you max out as much as possible, you’ll grow a decent savings account for retirement. Those who do not qualify for a Roth IRA can still use traditional IRA accounts with more flexibility than several other accounts.

Expanding beyond the retirement account

Things like opening brokerage accounts and buying stocks could build a nice nest egg also. Prior to investing, have a clear picture of what you are trying to achieve. Make sure you are aware of what you would like to gain, the rate of return, the amount of the investment, and any other possibilities that are available to you.

Pay off harmful debt

Probably the most detrimental debt to a person is charge card debt due to their rates of interest. Make sure you pay all your credit card debt off before you even start to try and invest in stocks.

Sitting around isn’t an investment

Motley Fool points out that, stock market is unpredictable, but t if you venture nothing, you’ll gain nothing. Compound interest only matters if you have something to have interest in. If you invest in stocks and stop paying attention, you are asking the market to swallow your money. Follow your stocks and move on if and when the time is right. Remember your financial goals and don’t go too far outside your comfort zone unless you are prepared for possible loss.

There is no quick cheap way to go, especially with in and out

Trading in and out of the market isn’t just risky, it comes with a lot of trading fees also. So be careful when you set things up with your brokerage firm. Long term investors are stuck with an empty pocket, even if this might work out once in a while for day traders. Money market funds and CDs are the way Motley Fool advises to go for those looking for the shorter investment possibilities.

Information from

About.com

beginnersinvest.about.com/od/investing101/a/how-to-start-investing.htm

Motley Fool

fool.com/investing/beginning/why-should-i-invest.aspx?source=iibedihpo0000001

From socks to stocks

youtu.be/50PBUcwfe-w

March retail sales increase comes with several investor caveats

March retail sales increased to surprise most economists. Poor performance was foretold due to adverse weather, rising gas prices and an unusually late Easter. The slight gain in retail sales may have been the result of an improving labor market and inflation. Article source – March retail sales increase comes with many investor caveats by MoneyBlogNewz.

Monthly retail revenue being measured

A Thomas Reuters survey of 25 chains throughout the nation showed that last month there was a 1.7 percent year-over-year increase in retail revenue. The numbers are depending on retail sales reported at stores open at least since last March. This can be a good measure for the metric, or "same-store revenue." This is because stores aren't opening and closing changing sales. But experts doubt whether the March increase is a solid trend in consumer demand. The consumer spending is expected to be impacted by grocery and gas prices that are increasing. Monthly sales figures are only reported by 10 percent of retailers too. It can be easier to determine how the consumer economy is when bigger businesses start to post quarterly sales. This will include businesses for instance Home Depot, Best Buy and Wal-Mart.

The importance of Easter buying

An increase in March retail revenue was anticipated. The Easter holiday was why this was anticipated. This is the latest Easter in quite a while as it falls on April 24. This year, more people will shop in April for Easter. March was when it happened last year though. The fluctuating nature of the Easter holiday has led retail experts to create a calendar period called “Mapril” to be able to get a more accurate reading on year-over-year retail sales. There was an expected boost in April sales expected this year due to this late Easter date. An increase was forecasted by the International Council of Purchasing Centers. This is a 5 to 6 percent increase anticipated. Experts could be surprised with a decrease in sales though for Mapril since there have been increasing prices in gas, food and commodities while there is a high unemployment and a terrible housing market.

Retail stock is also fun

Many other factors suggest the March retail sales increase should be taken with a grain of salt. Stock in retail may not be the best choice. Try something else Jeff Mack said from Yahoo! Finance. He cites the belief that retailers are raising costs to offset rising costs in the supply chain, which inflates revenue figures however doesn’t increase profit margins. There were larger clearance sales than normal too after the demand went down over the winter. The expectations were really low too. It may not mean anything to beat them. After the Easter bump, malls could empty and margins could shrink as customers feel the pinch of food and gas inflation.

Articles cited

Los Angeles Times

latimes.com/business/la-fi-retail-sales-20110408,0,816255.story

MSN Money

money.msn.com/business-news/article.aspx?feed=OBR&date=20110407&id=13280589

Yahoo! Finance

finance.yahoo.com/blogs/breakout/same-store-retail-sales-sell-news-20110407-073322-455.html?sec=topStories&pos=5&asset=&ccode=

Market Watch

marketwatch.com/story/retail-sales-defy-conventional-wisdom-2011-04-07

Keep away from fees and fines by contacting the IRS about difficulties

The deadline for filing federal taxes is three days later than usual this year. Even with that extra time, a lot of people will need an additional amount of time to get their taxes filed. If you can’t pay your taxes or file on time, addressing the situation easily is key. As with all debts that you owe, ignoring the problem isn’t the best way to manage the situation. Instead, you should contact the Internal Revenue Service as easily as possible to address the issue. Post resource – Can’t pay your taxes? What to do about extensions and interest by MoneyBlogNewz.

Filing extensions accessible

If you will not be able to file your full tax return by the April 18 deadline, you have to file an extension. The deadline could be changed to October 17 if you fill out Internal Revenue Service Form 4868 properly. The deadline of whenever you pay taxes doesn’t change, even if you extend filing. Whenever you file form 4868, you are required to estimate what your taxes can be. That has to be paid with the extension form. You are able to get a 5 percent penalty every month, up to 25 percent total, if you don’t file your return.

The availability of payment deadline extension

Your tax payment deadline is separate from your tax filing deadline. Sometimes it is impossible to pay the entire tax bill whenever you file. You’ve to file still. That way, you can keep away from paying both a failure to file and failure to pay penalty. You do need to pay as fast as possible. This should help you a lot. Make an effort to pay at least 90 percent of what is needed when filing. There will not be penalties for another six months if you do this. After you file, the Internal Revenue Service will send you a bill. It will only take 30 to 40 days to get it. Interest and penalties on unpaid balances compounds by 4 percent daily, so therefore paying easily is the key. Sometimes you cannot pay at all. Call the Internal Revenue Service to work this out. Call 1-800-829-1040 to talk about payments.

Options for tax settlements

Tax settlement is something advertised on television all the time. Usually it is a bad idea to make an effort to use these tax settlement services. Getting same day loans to pay the debt would be a safer option. These tax-settlement services file an Offer in Compromise with the Internal Revenue Service, which individual taxpayers can file on their own. Do not do an Offer in Compromise unless it is a last resort. The IRS might be willing to work with you before this. In short, keep communicating with the Internal Revenue Service — the longer you wait to contact the agency, the more money you’ll end up owing.

Citations

IRS

irs.gov/businesses/small/article/0,,id=104593,00.html

H&R Block

hrblock.com/taxes/tax_tips/irs/extension_info.html

Bigotry evident in ongoing bank redlining

The Center for Responsible Lending tells it like it is: African-American and Hispanic banking customers are continuing to get the short end of the stick when it comes to consumer credit. Discriminatory practices like redlining have once again risen up as the U.S. struggles to emerge from the economic recession. Lack of access to short term installment loans and mortgages in significant portions of minority communities has changed its face, however not its heart of discrimination. Resource for this article – Racial discrimination evident in continued bank redlining by MoneyBlogNewz.

Rate of home loss high for minorities

Michel Calhoun is the President of the Center for Responsible Lending. He told USA Today that minorities in the U.S. have "received the worst treatment, at a very high cost." Estimates that 20 percent of African-American and Hispanic householders will lose their homes in the mortgage crisis – a rate more than double that of white householders – suggest the gap between the minority and the majority is growing.

African Americans are 41.7 percent more likely to be denied a traditional bank loan than a Caucasian person is according to a 2008 study done by Christian Weller called "Credit Access, the Costs of Credit and Credit Market Discrimination." Weller is of the Center for American Progress and the University of Massachusetts. When considering mortgages, the gap got even bigger.

The ‘dual system of finance’ isn’t equal

John Taylor, CEO of National Community Reinvestment Coalition, sees a double standard.

"It's about a dual system of finance," he says. "People of color do not have the same access that most American citizens enjoy.

The alternative when traditional banks deny low or middle-income minorities credit is frequently no credit check payday loans from payday lenders. The short term installment loans, for an emergency, are a convenient choice that many might choose. Still, Hilary Shelton, National Association for the Advancement of Colored People Senior V.P. for Advocacy and Policy, explained the fees are often larger than traditional loans. Payday loans are too small to make up for a lost mortgage. Minorities are out of luck.

Deregulation in banks

Everyone noticed the 1990s when several neighborhoods were not able to get bank loans, mortgages or insurance. These entire neighborhoods were shut out. At this time, banking and utility deregulation started. That was when redlining started to occur. Redlining started to be combated by the Community Reinvestment Act and Home Mortgage Disclosure Act. Nevertheless, practices continued such as giving higher rates to minority neighborhood residences. The Wall Street crisis occurred due to this.

What regulators are doing now to stem the tide

• There are 28 volunteer banks the FDIC is trying to get a two-year short term installment loan program started at.
• The Department of Justice has created a fair lending unit to police redlining.
• The CFPB will open in July 2011.

Articles cited

Peri

peri.umass.edu/fileadmin/pdf/working_papers/working_papers_151-200/WP171.pdf

IBEW

ibew1613.org/library/redlining.html

USA Today

usatoday.com/money/perfi/general/2011-04-04-real-estate-financial-discrimination.htm

Did banking deregulation stack the deck against minorities?

youtube.com/watch?v=FDYXAywWWdk

Consumer should be on alert after Epsilon database hack

Last week hackers broke in to the database of Epsilon, a web marketing firm. The Epsilon database hack exposed the names and email addresses of millions of customers at credit card businesses and major retailers. Several major credit card holders are receiving warnings from banks about the breach, which is likely to spawn a spate of spam in the form of phishing emails. Article source – Epsilon database hack exposes millions to phishing attacks by MoneyBlogNewz.

In the Epsilon database: Better watch out

The theft of millions of names and emails in the Epsilon database hack could possibly be the biggest data security breach in United States history. Friday, Epsilon announced that consumer files were hacked meaning emails and other information at websites may have been stolen as Epsilon sends over 40 billion marketing emails for 2,500 companies annually.

This hurt at least a dozen corporations. Banks were affected by this including J.P. Morgan Chase, Citigroup, U.S. Bancorp, Barclays Bank and Capital One. Customers need to look for phishing scams in the future. Also, if you have been working with Best Buy, TiVo, Walgreens, Kroger or HSN, then you should watch out. The hacker might have also stolen student email addresses from The College Board, an organization that oversees SATs in the U.S. for about 5,900 colleges and universities.

Knowing if you're in a scam

Spam is more than likely the goal of all the email addresses and names stolen out of the Epsilon database. The "phishing scam" might be very effective this time. This is because people with actual accounts and information will be targeted. The login information is stolen giving hackers access with phishing emails attempting to trick consumers into logging into a fake account. The email could be more convincing after having hackers' name and email in order to go on Facebook and find more personal details. Many times, a phishing con will say that an account could be closed if information is not updated or ask an individual to update charge card information. Some phishing scams even claim that a response is required since the users account has been compromised.

A new record for stealing data

There were a limited number of customers which were caught in the Epsilon database hack, the business said. Still, it has yet to be released how several consumers and students need to worry over it. In addition to the Epsilon clients mentioned above, others consist of Verizon Communications, Hilton Hotels, Kraft Foods and AstraZeneca. Internet security analysts believe the Epsilon database hack may surpass the Heartland Payment Systems hack, currently recognized as the biggest identity-theft incident in United States history. After stealing over 40 million payment card numbers in the Heartland Payment Systems hack, Albert Gonzalez got 20 years in prison as a sentence.

Citations

Associated Press

finance.yahoo.com/news/Banks-creditcard-issuers-warn-apf-754015157.html?x=0&sec=topStories&pos=main&asset=&ccode=

MSN Money

money.msn.com/identity-theft/news.aspx?feed=OBR&date=20110403&id=13261200

Computer world

computerworld.com/s/article/print/9215443/Update_Bank_customers_warned_after_breach_at_Epsilon_marketing_firm?taxonomyName=Security&taxonomyId=17

Microsoft

microsoft.com/security/online-privacy/phishing-symptoms.aspx

Release of discount window details unveils big European financial institution bailout

To forestall going belly-up throughout the financial turmoil, anonymous financial institutions lined up at the Federal Reserve’s discount window for cheap loans. Thanks to a Freedom of Information Act request enforced by the Supreme Court the other day, data showing the true extent of discount window lending has been released. The true danger of Wall Street’s financial meltdown to the world was made evident by the discount window data. Resource for this article – Release of discount window data reveals big European bank bailout by MoneyBlogNewz.

Fed bails out the world’s banks

In order for healthy banks to get just a little bit of short term help in loans, the Fed crated the discount window. Due to the stigma in financial circles associated having to stand before the Fed with hat in hand, the identities of the borrowers have always been kept secret. After Bloomberg and Fox Business filed a request under the Freedom of Information Act, the Fed was required to release the data though due to a Supreme Court ruling. When the Fed finally released the data Thursday, any concern about a negative stigma may have been alleviated by the fact that just about every bank in the world had to stand in line at the discount window as the global financial system teetered on the brink of collapse. More than 25,000 pages of documents show the Fed lent as much as $110 billion through the discount window in one day as the financial turmoil peaked.

Financial Institutions in Europe borrowing a ton

In the course of the financial turmoil, Wall Street banks got a lot of criticism for taking government bailout funds. The discount window financial institutions were mostly European banks though, the details showed. On Oct. 29, 2008, Belgian-French bank Dexia borrowed $26.5 billion and Dublin-based bank Depfa, owned by German mortgage lender Hypo Real Estate, borrowed $24.6 billion. There were other European financial institutions to get billions from the discount window. These integrated France's Societe Generale, Austria's Erste Group and Bank of Scotland. On this side of the pond, before it became the biggest bank failure in history, Washington Mutual borrowed $2 billion on Thursday, Sept. 18, 2008, to get through the weekend. The $2 billion loan could not be paid by Wamu Monday when it was due leaving the financial institution to keep getting $2 billion overnight loans. This was until Thursday, September 25, 2008 when J.P. Morgan Chase took over.

United States not the only ones with a financial crisis taking place

September 2008, the Lehman Brothers failed causing the financial crisis to begin. The financial system literally stopped while the economy dived downward and the Fed got banks all over the world asking for just a little short term help. The discharge of the discount window data shows just how bad the damage was and just how quickly it spread. Fed Chairman Ben Bernanke said that only one of the financial institutions that came to the discount window for help was not at risk to collapse in a testimony to congress investigating the discount window. In the 2010 Dodd-Frank financial reform bill, it is required for the discount window lending information to be released but only two years after the loan has been released.

Information from

Fox Business

foxbusiness.com/industries/2011/03/31/demystifying-feds-secretive-discount-window/

Wall Street Journal

online.wsj.com/article/SB10001424052748703712504576234700412932330.html

Reuters

reuters.com/article/2011/03/31/usa-fed-lending-idUSN3126104220110331?pageNumber=2

What is great for jobs not always good for stocks

The Labor Department published its monthly careers document Friday and stocks surged. The acceptance of employees into the midst of companies has been occurring frequently, so much so that the economy at large has not seen such a gain of individuals getting up early and going to work and working all day and then going home since the last recession started. Historically, when unemployment goes down so do stocks, for numerous reasons so don’t get too anxious about investing in the markets if too several people find the jobs they have been looking for freaking ever. Put simply, don’t take out an installment loan to load up on stock just yet.

Gaining in first quarter careers and stocks

The U.S. joblessness rate dropped from 8.9 percent in Feb. to 8.8 percent in March, the lowest rate in two years, according to the Labor Department. This caused a rise in stocks. It was very clear. There was a 0.7 percent increase in the Dow Jones Industrial Average going up 87 points as a new high in 2011 of 12,406. There was also a 10 point increase, or 0.8 percent, to 1,335 in the Standard & Poor's 55. A 0.6 percent increase in the Nasdaq also happened. It went up 15 points to 2,796. There was a 216,000 increase in workers on U.S. payrolls in March after the month before gained 194,000. In November, unemployment rate was at 9.8 percent, which it has continued to drop from since making the biggest, since 1983, four month decrease. In the three months that ended with March, there was the first biggest first-quarter gain with a 5.4 percent increase since 1998 in the U.S.

Labor affects the market

Usually Wall Street is okay with layoffs occurring. This is because most investors believe a higher profit will come from smaller payrolls. When everyone was losing jobs in January 2009, it was good for the stock market. It went up. In fact, in the past 60 years the stock market has performed better on average when the United States unemployment rate was higher rather than lower. Yearly the joblessness rate was over 6 percent, there were huge increases in the S&P 500, reports Ned Davis Research. It would go up 13.5 percent. Joblessness beneath 4.3 percent would mean a smaller increase. On average, the S&P 500 increase would be 2.1 percent. MarketWatch states that in 2009, Ed Clissold of Ned Davis Research pointed out traders will do better with high joblessness because the stimulus the federal government puts out will help them on top of lower costs and high profit. Stock prices can have changed based on job cuts by the time unemployment news comes out, which ! means traders can sell and make some money.

Traders hope job information doesn’t get too good

Friday's good labor market information helped stocks increase. More than likely this was because there was not too large of a stock decrease. Most traders are more worried about the short term than the long term. Traders think the Federal Reserve bond purchasing program, QE2, has helped the stock market. There are several traders with fixed-incomes that are worried about the labor markets. They worry that in June the Fed won’t purchase bonds anymore as the QE2 program will end. The good stock might not be good for everybody not involved in Wall Street which has been shown as Americans struggle and Wall Street bonuses increase. If more Americans keep finding work, the markets could change their tune.

Articles cited

Associated Press

finance.yahoo.com/news/Stocks-rise-after-apf-653435655.html?x=0&sec=topStories&pos=1&asset=&ccode=

Market Watch

marketwatch.com/story/bad-news-on-job-front-doesnt-have-to-be-bad-for-stocks

CNN Money

money.cnn.com/2011/03/31/news/economy/thebuzz/index.htm

Goose Island brewery acquired by Anheuser Busch

Goose Island, a Chicago based microbrewer, has been ordered out by megalithic beverage corporation Anheuser Busch, the company that makes the Budweiser family of beverages. During the past few years, huge beverage companies like Anheuser, SABMiller and Molson Coors, have been getting out little breweries, which some people aren’t amused with. Macrobreweries dominate the industry for beer, prompting cynics to claim corporate The United States is out to spoil everyone's fun.

Buying a microbrewery for the macrobrewing company

About $38 million will be paid by Anheuser-Busch to get the Chicago Goose Island brewery, reports USA Today. Anheuser-Busch is the Budweiser beer macrobrewing family. A partnership between Anheuser and Fulton Street Brewery which makes Goose Island beers was already in existence although now the Goose Island line will be an in-house brewery. Craft Brewers Alliance sold 42 percent of shares to Anheuser while 52 percent of Goose Island's shares were ordered by Anheuser outright. There are lots of small brew houses put together with Craft Brewers Alliance, states BizJournal. The business was merged together in 2008 by Widmer Brothers and Redhook. Anheuser-Busch, which was ordered several years ago by global beverage titan InBev, owns 32.5 percent of Craft Brewers Alliance Inc.

Big corporations get distribution decisions

The Chicago Sun Times explained that Anheuser was given Goose Island control on reason. This was so that more beer could possibly be made to meet demand that is going up. Since it’s well known that brewers, distillers and vintners all need a distribution company to sell the beer being made to different businesses, this makes sense. To be able to keep up with demand, because law mandates the distribution system, small businesses for instance Goose Island will often sell themselves to corporations for instance Anheuser Busch/InBev, SABMiller and Molson-Coors that have controlling interests in distribution. Reuters explains that in 2009, hardly any microbrewers sold beer. It only accounted for five percent of sales in beer.

Getting help by simply being a small brewer

The U.S. U.S. Senate currently has a bill before it called the Brewer’s Employment and Excise Relief Act, which would cut the excise tax on the first 60,000 barrels of beer produced by breweries in half, according to Reuters. Breweries that make less than six million barrels a year wouldn’t have to pay as much of an excise tax. While producing beer, the first 60,000 barrels have a $7 excise tax currently. It jumps to $18 a barrel if more than that is made. Businesses that stay under 6 million barrels a year will only have to pay $16 a barrel. This will benefit small businesses but not corporations. The House of Representatives will be seeing another version soon. A bill of this sort would help to lower the price of craft beer, making it easier for those who enjoy craft brewed beer to do so.

Information from

USA Today

usatoday.com/money/industries/food/2011-03-28-anheuser-busch-goose-island.htm

Chicago Sun Times

newssun.suntimes.com/business/4552383-420/goose-island-brewery-sold-to-anheuser-busch.html

Biz journals

bizjournals.com/portland/news/2011/03/28/craft-brewers-sells-goose-island-stake.html

Reuters

reuters.com/article/2011/03/19/us-breweries-idUSTRE72I3E620110319?pageNumber=1

States squeeze education budgets which signifies tuition increases imminent

Budgets are being trimmed by every state in the union after shortfalls for the past few consecutive years. State universities are feeling the pinch, as advanced schooling is one of the first things to fall in the cross hairs of legislators planning to trim the budget down. Public universities have to institute tuition hikes just to keep up.

Forty three of the fifty states lowered the higher education budget

A total of forty three states have had to cut financing for higher education during the recession of the past few years, in accordance with MSNBC, and it’s not a trend that will likely be reversing soon. Funding for advanced schooling is always on the chopping block when financially difficult times come. This is because raising taxes could be really hard for a political campaign. tuition hikes are happening also with the cuts to state funds for higher education and federal grant cuts. Getting unsecured loans may be necessary for college students. This might be the only way they can get through college.

Less money from federal government too

In the last few months, federal funding for college has been looked at for spending cuts. There could be a huge decrease in federal Pell Grants in 2012. The Christian Science Monitor states this would mean a $5.7 billion decrease. Most four year universities' tuition can be covered by the $4,000 per year limit the Pell may be reduced down to. The cost of attending one year at a public, non-profit university is $16,140, according to College Board.

Too much money needed for school

In just the last 10 years, there has been a 33 percent increase in enrollment at public universities, in accordance with College Board which creates and administers the Scholastic Aptitude Test (SAT). Tuition at public four-year universities has increased by at least 6 percent per year since 2001, and students will bear the brunt of those increases. It is becoming more and more expensive to go to a college which students might end up needing more installment loans to pay for.

Articles cited

Christian Science Monitor

csmonitor.com/USA/Education/2011/0225/Washington-trims-Pell-Grants-How-will-students-pay-fall-tuition

MSNBC

msnbc.msn.com/id/42140407/ns/business-your_retirement/

College Board

trends.collegeboard.org/college_pricing/

Why allowing banks to increase shareholder dividends is a bad idea

Right now the quarterly dividend on a Bank of America share is only a penny and the Federal Reserve said they should stay there. Following a round of stress tests, the Fed told the biggest banks they were fit enough to increase payouts to shareholders. However Bank of America was the exception. The fragile economic recovery leads some industry experts to question the Fed’s decision, which weakens banks in the event of a double dip. Article source – Why allowing banks to boost shareholder dividends is a bad idea by MoneyBlogNewz.

Fed tells Bank of America no

In January Bank of America told the Federal Reserve it wanted to initiate a rise in shareholder dividends in the second half of 2011. The quarterly dividend would have to go up 8 cents which would be about 20 percent of earnings. Because of the decision Bank of America made to lose $2.24 billion past year purchasing Countrywide in 2008 during the housing industry drop, the Fed told the bank not to do it. There has also been pressure from investors to get B of A to purchase back bad mortgage securities. These were sold before the meltdown began. After the green light from the Fed, JPMorgan Chase, Wells Fargo and U.S. Bancorp quickly announced dividend hikes. Now Bank of America has a plan to give a new proposal to the Fed. This will take place before June is over.

Why would banks increase dividends for shareholders?

The argument Wall Street banks have said that it would be bad to stop a rise in dividends. This is because the economy would not be able to expand without the banks being able to raise equity in the future. banks are able to lose equity however get more investors by paying shareholder dividends. Bankers are not that interested in equity though. They just want leverage to use. banks fund over 95 percent of investments in debt taking other people's money although corporations like Google use equity to get funded. banks stay away from equity because their executives and shareholders make big money on leverage as long as the financial services sector is healthy. banks become more liable for risks when they have more equity too. They do not count on taxpayers to bail them out when things go bad while instead decreasing default risk.

Possibility of another bailout

The Fed had a difficult time with highly leveraged banks in the financial crisis. There are some that disagree with the Fed permitting shareholder boosts. They thing the boosts should not happen until the economy is stronger. Simon Johnson of the New York Times compared a highly leveraged bank to buying a house with a minuscule down payment on a mortgage for 98 percent of the purchase price. If home costs rise, the risk pays off. Creditors end up missing out while the borrower loses if they drop. The difference, however, between highly leveraged banks and highly leveraged homebuyers are that the banks have learned they’re too big to fail. There could be a government bailout to help out the banks and take away tax dollars when a leveraged bank fails.

Citations

New York Times

economix.blogs.nytimes.com/2011/03/24/dividends-lost/?emc=eta1

Business Insider

businessinsider.com/how-bank-dividends-help-wall-street–and-hurt-almost-everyone-else-2011-3

CNN Money

money.cnn.com/2011/03/23/news/companies/bank_of_america_dividend/index.htm