Summers Withdraws; Yellen Likely Successor to Bernanke – Published in Noozhawk on Monday, September 16, 2013

Former Treasury Secretary Larry Summers has withdrawn his name for consideration to succeed Ben Bernanke as Federal Reserve chairman. Summers called President Barack Obama on Sunday to notify him of the decision: “I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the administration or, ultimately, the interests of the nation’s ongoing economic recovery,” Summers was quoted as saying in a letter to Obama following the…

Effective Financial Planning Starts with a Good Budget – Published in Noozhawk on Monday, July 29, 2013

The first step in developing an effective financial plan is to understand your income and expenses. While this may seem elementary (and it is), most clients I work with have never correctly and completely tracked their cash flows. Many don’t know how to balance their checkbook, and almost none have tracked cash flows over a long enough time period to fully understand their financial picture. It’s very difficult to build…

Watch Employment Growth as Sign of Life for Economy and the Future of QE3 – Published In Noozhawk On Monday, June 10, 2013

The pace of job growth in the United States threatens to continue to delay economic improvement. At the same time, the Federal Reserve has established employment as the most important barometer it will use to determine when to begin tapering off quantitative easing, or QE3 — the Fed’s massive bond-buying program. We now face a seemingly impossible situation in which slow employment growth will prevent economic growth, while improving employment will force the Fed…

Fed In Catch-22 On Stimulus Tapering – May 30, 2013

The Fed is now in an impossible position with regard to tapering-off their massive stimulus program – QE3 (quantitative easing round 3).  If they continue to buy $85 billion each month in long-term bonds, they risk sparking inflation.  If they try to taper-off their buying, they risk stifling the economy and potentially crashing the stock market. Recent action in the Japanese stock market may be a bad omen for U.S….

Inventory Overhand Will Stifle Significant Real Estate Price Upside – Friday, May 24, 2013

A new report from Zillow shows that 25%, or 13 million out of about 52 million, of all mortgage-holders are upside down on their mortgages.  Another 9 million, or 17%, don’t have enough equity to be able to afford to sell their house and move.  While home prices have shown some upside in recent months, these 22 million or 42% of all mortgage-holders, a large number of whom would like…

College Grads Lack Practical Abilities for Workplace, Are Overloaded with Debt – Published in Noozhawk on Monday, May 13, 2013

A recent study conducted by the consulting firm McKinsey & Co. in conjunction with online student hub Chegg and involving more than 4,900 graduates, most of whom finished college between 2009 and 2012, suggests that college grads are growing increasingly disillusioned with their ability to secure employment with their degrees. Graduates are finding that, despite having completed all requirements for their degrees, they are unprepared for the practical requirements of today’s demanding and specialized jobs. There…

National Debt Limit Debate Delayed Due to Fannie Mae Loan Repayment

Fannie Mae (the Federal National Mortgage Association) announced yesterday that they will make a $59.4 billion payment to the U.S. Treasury as a partial repayment of the roughly $116 billion in loans they received after the financial crisis of 2008/9.  They cited an increase in cash flow due to a one-time accounting change that will save them money on their taxes and the recovering real estate/mortgage market as reasons for…

EU Collapse Probable: Dominoes Lining Up

We have seen the debt hot potato passed around Europe, with countries including Portugal, Ireland, Italy, Greece, and Spain (PIIGS) requiring massive bailouts to stave-off default on their national debt.  Cyprus is the latest in this long line of countries with heavy reliance on social programs and guaranteed jobs and benefits from the government to saunter up to the EU and IMF, hat in hand, requesting bailout money.  Cyprus’s banks…

Stocks Rally To New All-time Highs – Stance: Cautious

I have been raising cash for a few months and now hold significant cash balances for portfolios.  Stocks have continued to advance this year, after the Fiscal Cliff debates resulted in a somewhat palatable solution, at least, it appears, palatable to many investors, even if not to me.  Today stocks have pushed the Dow to a new all-time high.  From a technical analysis perspective we will need to close above…