By Money Matters Editors
After a year of negative GDP growth, U.S. GDP growth finally returned, registering a better-than-expected 3.5 percent growth rate in Q3.
Doesn’t it seem like it’s been years since economists and analysts have talked about GDP growth? That’s because the recession actually started in December 2007 – with only a modest level of growth occurring during Q4 2007. In other words, the United States registered five consecutive quarters of sub-par growth or negative growth: that is a long time. In fact, the U.S. economy registered four straight negative growth quarters during the recession – the first time that’s occurred since the Great Depression.
Further, in the past 12 months, the economy has contracted 2.3 percent, including a 0.7 percent contraction in Q2 and a 6.4 percent plunge in Q1.
Friday, October 30, 2009
Thursday, October 29, 2009
Is Boeing's 787 Dreamliner a pipe dream?
By Money Matters Editors
Boeing (BA) announced Wednesday that it’s chosen North Charleston, S.C. for its second plant for the next-generation 787 Dreamliner, over Seattle.
What would be even better news? Boeing announcing that the much-delayed 787 is rolling off the assembly line and is being delivered to airlines, worldwide.
To say there’s a lot riding on the 787 would be the understatement of the year.
Boeing (BA) announced Wednesday that it’s chosen North Charleston, S.C. for its second plant for the next-generation 787 Dreamliner, over Seattle.
What would be even better news? Boeing announcing that the much-delayed 787 is rolling off the assembly line and is being delivered to airlines, worldwide.
To say there’s a lot riding on the 787 would be the understatement of the year.
Wednesday, October 28, 2009
Memo to emerging markets: Buy, consume, spend
By Money Matters Editors
One of the major problems in our current economic age concerns consumers. Or, rather, the lack of consumers.
The U.S. consumer has adopted a ‘frugal consumer’ stance, and it's not going to be a short-term trend. After more than a decade of unsustainable over-consumption – spending fueled in many cases by home equity loans and mortgage refinancings – U.S. consumers have reached the time where they have to pay the bill, and they’ve been paying-down debt at an impressive rate.
Not only that, U.S. consumers have increased their savings and are currently saving about 3% of their income.
One of the major problems in our current economic age concerns consumers. Or, rather, the lack of consumers.
The U.S. consumer has adopted a ‘frugal consumer’ stance, and it's not going to be a short-term trend. After more than a decade of unsustainable over-consumption – spending fueled in many cases by home equity loans and mortgage refinancings – U.S. consumers have reached the time where they have to pay the bill, and they’ve been paying-down debt at an impressive rate.
Not only that, U.S. consumers have increased their savings and are currently saving about 3% of their income.
Tuesday, October 27, 2009
Health reform and a housing credit: Can Congress do two things at once?
By Money Matters Editors
Can Congress do two things at once? Can it think and act at the same time? Money Matters knows it’s a lot, but we have confidence in our national lawmakers.
While also putting the final touches on health care reform bills about to be debated in the House and Senate, respectively, Congress is also getting set to extend the $8,000 federal income tax credit for first-time home buyers.
And, as Money Editors noted earlier, the United States needs both health care reform and an extension of the first-time home buyers’ credit.
Can Congress do two things at once? Can it think and act at the same time? Money Matters knows it’s a lot, but we have confidence in our national lawmakers.
While also putting the final touches on health care reform bills about to be debated in the House and Senate, respectively, Congress is also getting set to extend the $8,000 federal income tax credit for first-time home buyers.
And, as Money Editors noted earlier, the United States needs both health care reform and an extension of the first-time home buyers’ credit.
Monday, October 26, 2009
More pain at the pump: U.S. gasoline prices jump 18 cents in two weeks
By Money Matters Editors
It looks like the U.S. is headed for $3 gasoline, again
This is not a pleasant sight for U.S. motorists: gasoline prices have jumped 17.8 cents in two weeks to an average of $2.66 per gallon for regular unleaded, according to data compiled by the Lundberg Survey, Bloomberg News reported.
It looks like the U.S. is headed for $3 gasoline, again
This is not a pleasant sight for U.S. motorists: gasoline prices have jumped 17.8 cents in two weeks to an average of $2.66 per gallon for regular unleaded, according to data compiled by the Lundberg Survey, Bloomberg News reported.
Friday, October 23, 2009
Washington cracks down on bailout bank executive pay: High time
By Money Matters Editors
The Obama administration has decided to cut the pay of Wall Street executives at companies bailed out by the federal government, and Money Matters says, “It’s high time!”
The banks and financial institutions are against the crackdown, arguing that they need to continue to pay large salaries and bonuses to attract the top talent they need to run their operations.
The Obama administration has decided to cut the pay of Wall Street executives at companies bailed out by the federal government, and Money Matters says, “It’s high time!”
The banks and financial institutions are against the crackdown, arguing that they need to continue to pay large salaries and bonuses to attract the top talent they need to run their operations.
Wednesday, October 21, 2009
When will the Fed take the punch bowl away?
By Money Matters Editors
In the months and quarters ahead, the U.S. Federal Reserve will face, arguably, its biggest decision in the modern era - certainly its biggest choice since the early 1980s, and possibly since the 1930s. Namely - when to start to withdraw quantitative easing - cash injections that provided essential liquidity to markets to end the financial crisis.
If the Fed withdraws funds too late, it runs the risk of increasing inflation - and some say increasing it to a very high rate - like the double-digit rates last seen in the early 1980s.
In the months and quarters ahead, the U.S. Federal Reserve will face, arguably, its biggest decision in the modern era - certainly its biggest choice since the early 1980s, and possibly since the 1930s. Namely - when to start to withdraw quantitative easing - cash injections that provided essential liquidity to markets to end the financial crisis.
If the Fed withdraws funds too late, it runs the risk of increasing inflation - and some say increasing it to a very high rate - like the double-digit rates last seen in the early 1980s.
Tuesday, October 20, 2009
Congress set to extend $8,000 home buyer tax credit
By Money Matters Editors
It appears Congress is about set to extend the $8,000 federal income tax credit for first-time home buyers. The credit is set to expire November 30.
Some have argued against an extension, but Money Matters Editors disagree. On the contrary, the credit should be expanded, as well as being extended.
It appears Congress is about set to extend the $8,000 federal income tax credit for first-time home buyers. The credit is set to expire November 30.
Some have argued against an extension, but Money Matters Editors disagree. On the contrary, the credit should be expanded, as well as being extended.
Monday, October 19, 2009
Oil: At a crossroad
By Money Matters Editors
Oil is at a crossroads, of sorts.
The oil bulls will argue that ramping demand in emerging markets, plus stabilization in the developed world, combined with the desire by selected institutional investors (IIs) to hold oil as an asset, will send the world's most important commodity closet to $80, then $90 per barrel.
Oil is at a crossroads, of sorts.
The oil bulls will argue that ramping demand in emerging markets, plus stabilization in the developed world, combined with the desire by selected institutional investors (IIs) to hold oil as an asset, will send the world's most important commodity closet to $80, then $90 per barrel.
Friday, October 16, 2009
Dow surfaces above 10,000: but can it remain above it?
By Money Matters Editors
Since the Dow is above 10,000 let’s briefly re-examine the world's most closely monitored stock market index, this time from a technical standpoint.
If the Dow can close above the psychologically-significant 10,000 mark for three straight sessions, that would be a bullish sign. Thursday was the second straight day, so Friday (obviously) looms large. Given that Fridays during sluggish-to-recessionary economic times are usually down days for the Dow, Friday represents a formidable hurdle for Dow 10,000.
Since the Dow is above 10,000 let’s briefly re-examine the world's most closely monitored stock market index, this time from a technical standpoint.
If the Dow can close above the psychologically-significant 10,000 mark for three straight sessions, that would be a bullish sign. Thursday was the second straight day, so Friday (obviously) looms large. Given that Fridays during sluggish-to-recessionary economic times are usually down days for the Dow, Friday represents a formidable hurdle for Dow 10,000.
Thursday, October 15, 2009
After health care reform, what's next for Congress? Jobs, jobs, jobs
By Money Matters Editors
After health care reform, what’s next for the U.S. Congress? Jobs, Jobs, Jobs.
Can there be any issue that’s more important than job growth? To cite a phrase often-used by a graduate school mentor of a Money Matters Editor, ‘We don’t think so.’
The nation has lost more than 7.2 million jobs in the recession that started in December 2007, and the unemployment rate has basically doubled to 9.8 percent. In a nutshell, the U.S. economy is operating well below potential – what economists call an ‘output gap.’
After health care reform, what’s next for the U.S. Congress? Jobs, Jobs, Jobs.
Can there be any issue that’s more important than job growth? To cite a phrase often-used by a graduate school mentor of a Money Matters Editor, ‘We don’t think so.’
The nation has lost more than 7.2 million jobs in the recession that started in December 2007, and the unemployment rate has basically doubled to 9.8 percent. In a nutshell, the U.S. economy is operating well below potential – what economists call an ‘output gap.’
Wednesday, October 14, 2009
U.S. tax on corporate revenue earned abroad is deferred: Good going
By Money Matters Editors
The Obama administration has shelved plans to increase taxes on multinational corporations by more than $200 billion, The Wall Street Journal reported Tuesday, after businesses complained the taxes would decrease commercial activity and hurt the creation of jobs.
And to the above, the Editors of Money Matters say: smart move! Businesses will have a hard enough time both retaining existing employees and adjusting to the new, likely requirements under the upcoming heath care reform legislation. Outside of health care reform – which also has the potential to lower corporate health care premiums, long-term, if competition increases - this is no time to add to business mandates: their operational models are being stressed enough by the recession.
The Obama administration has shelved plans to increase taxes on multinational corporations by more than $200 billion, The Wall Street Journal reported Tuesday, after businesses complained the taxes would decrease commercial activity and hurt the creation of jobs.
And to the above, the Editors of Money Matters say: smart move! Businesses will have a hard enough time both retaining existing employees and adjusting to the new, likely requirements under the upcoming heath care reform legislation. Outside of health care reform – which also has the potential to lower corporate health care premiums, long-term, if competition increases - this is no time to add to business mandates: their operational models are being stressed enough by the recession.
Tuesday, October 13, 2009
Dow 10,000? The real thing or a mirage?
By Money Matters Editors
Dow 10,000. Is it that important? As Shakespeare wrote, in Romeo and Juliet in 1594, “What’s in a name? That which we call a rose, by any other name would smell as sweet.”
Well, those market analysts who use technical analysis would argue that Dow 10,000 is a psychologically-significant level and name, but it’s not a technically-significant level.
Technical analysts say the Dow might close above 10,000 for a day, then fall back – and if it does, that would be bearish for stocks. Conversely, the Dow might pull-back considerably - technicians call it a correction - then rise above and close above 10,000 for three straight days, and if that occurs that would be bullish for stocks.
Dow 10,000. Is it that important? As Shakespeare wrote, in Romeo and Juliet in 1594, “What’s in a name? That which we call a rose, by any other name would smell as sweet.”
Well, those market analysts who use technical analysis would argue that Dow 10,000 is a psychologically-significant level and name, but it’s not a technically-significant level.
Technical analysts say the Dow might close above 10,000 for a day, then fall back – and if it does, that would be bearish for stocks. Conversely, the Dow might pull-back considerably - technicians call it a correction - then rise above and close above 10,000 for three straight days, and if that occurs that would be bullish for stocks.
Monday, October 12, 2009
Shale gas: The new, cheap, abundant energy form?
By Money Matters Editors
You know the business press and general public have finally recognized a trend when they give it a label.
Case in point: unconventional natural gas – previously hard-to-access natural gas that now can be captured by new technologies. Some are calling it the natural gas revolution, with the downward price pressure a ‘shale shock.’
Money Matters first wrote about it on September 23. Estimated U.S. natural gas reserves have increased 35 percent, mostly on the ability to access these new sources, with estimated reserves totaling 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006, according to the Potential Gas Committee, The New York Times reported. Natural gas closed Friday down 19 cents to $4.77 per million BTUs (MMBtu).
New technology, including hydraulic fracturing and drilling horizontally, has opened hundreds of previously cost-prohibitive natural gas sites. U.S. drilling has been going on in earnest for more than three years, but global drilling has only just begun.
How significant is unconventional natural gas in the nation’s and world’s energy policy? Oil/energy analyst Daniel Yergin, co-founder of Cambridge Energy Research Associates (CERA), has called unconventional natural gas “the biggest energy innovation of the past decade.”
You know the business press and general public have finally recognized a trend when they give it a label.
Case in point: unconventional natural gas – previously hard-to-access natural gas that now can be captured by new technologies. Some are calling it the natural gas revolution, with the downward price pressure a ‘shale shock.’
Money Matters first wrote about it on September 23. Estimated U.S. natural gas reserves have increased 35 percent, mostly on the ability to access these new sources, with estimated reserves totaling 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006, according to the Potential Gas Committee, The New York Times reported. Natural gas closed Friday down 19 cents to $4.77 per million BTUs (MMBtu).
New technology, including hydraulic fracturing and drilling horizontally, has opened hundreds of previously cost-prohibitive natural gas sites. U.S. drilling has been going on in earnest for more than three years, but global drilling has only just begun.
How significant is unconventional natural gas in the nation’s and world’s energy policy? Oil/energy analyst Daniel Yergin, co-founder of Cambridge Energy Research Associates (CERA), has called unconventional natural gas “the biggest energy innovation of the past decade.”
Friday, October 9, 2009
The Bush energy policy: Iraq – less oil and higher oil prices
By Money Matters Editors
It will take the United States and the world perhaps two decades to recover from the mistakes of the George W. Bush presidency (2001-2009). Certainly it will take longer than one 8-year presidential administration. Of all the policy mistakes, perhaps the Bush energy policy, or lack thereof, will be the most costly.
Money Matters will look at the Bush energy policy mistakes in four parts over the next four weeks. Today: Iraq.
The 2001 Bush income tax cut that promptly turned a U.S. government budget surplus into a budget deficit will perhaps be viewed by economists and historians as the Bush administration’s most economically damaging policy. But a close second may very well be Iraq.
Not that the removal of tyrant Saddam Hussein was a mistake: it wasn’t. But the Iraq campaign was pursued incorrectly: the U.S. should have worked in union with its European and other allies and used other measures to ease Hussein from power.
It will take the United States and the world perhaps two decades to recover from the mistakes of the George W. Bush presidency (2001-2009). Certainly it will take longer than one 8-year presidential administration. Of all the policy mistakes, perhaps the Bush energy policy, or lack thereof, will be the most costly.
Money Matters will look at the Bush energy policy mistakes in four parts over the next four weeks. Today: Iraq.
The 2001 Bush income tax cut that promptly turned a U.S. government budget surplus into a budget deficit will perhaps be viewed by economists and historians as the Bush administration’s most economically damaging policy. But a close second may very well be Iraq.
Not that the removal of tyrant Saddam Hussein was a mistake: it wasn’t. But the Iraq campaign was pursued incorrectly: the U.S. should have worked in union with its European and other allies and used other measures to ease Hussein from power.
Welcome to Money Matters
By Money Matters Editors
Welcome to Money Matters, a web site about stocks, sectors, investing, macroeconomics, and more. Our focus is on the markets and the economy, but really, if it’s about money, it’s fair game here. We offer independent news, analysis, commentary, and research to help you, the investor, make more-informed investing decisions.
Further, because our focus is on you, the investor, we want to hear from you to make our service better. Please offer your thoughtful comments in the comments section provided.
Money Matters has assembled a team of experienced reporters, analysts, columnists, and economists with one goal in mind: to help you navigate through these challenging times.
Our Stock Reviews by our stock analysts are based on an independent, proprietary stock investment formula, not affiliated with any bank, brokerage, or research service. If you’re looking for a stock to invest in, low risk to high risk, be sure to check out our Stock Reviews.
Thank you for visiting Money Matters, and visit us again soon.
-Money Matters Editors
Welcome to Money Matters, a web site about stocks, sectors, investing, macroeconomics, and more. Our focus is on the markets and the economy, but really, if it’s about money, it’s fair game here. We offer independent news, analysis, commentary, and research to help you, the investor, make more-informed investing decisions.
Further, because our focus is on you, the investor, we want to hear from you to make our service better. Please offer your thoughtful comments in the comments section provided.
Money Matters has assembled a team of experienced reporters, analysts, columnists, and economists with one goal in mind: to help you navigate through these challenging times.
Our Stock Reviews by our stock analysts are based on an independent, proprietary stock investment formula, not affiliated with any bank, brokerage, or research service. If you’re looking for a stock to invest in, low risk to high risk, be sure to check out our Stock Reviews.
Thank you for visiting Money Matters, and visit us again soon.
-Money Matters Editors
It’s time to end guaranteed compensation for mutual fund managers
By Money Matters Editors
One long-standing investment community practice in need of revision is the management fee, particularly among mutual funds.
The practice of financial managers charging a 1.0 percent of even a 0.7 percent management fee - exclusive of performance – has to end.
The reason? The fee simply amounts to guaranteed pay, regardless of performance. With the fee, if a mutual fund does well, the management team collects a fee; if the fund does horribly, the team collects a fee, usually with comments asserting that ‘the fund would have performed better during the year, but market conditions were against us.’ Where’s the incentive for stellar performance under that system? Little exists.
One long-standing investment community practice in need of revision is the management fee, particularly among mutual funds.
The practice of financial managers charging a 1.0 percent of even a 0.7 percent management fee - exclusive of performance – has to end.
The reason? The fee simply amounts to guaranteed pay, regardless of performance. With the fee, if a mutual fund does well, the management team collects a fee; if the fund does horribly, the team collects a fee, usually with comments asserting that ‘the fund would have performed better during the year, but market conditions were against us.’ Where’s the incentive for stellar performance under that system? Little exists.
Thursday, October 8, 2009
Exchange-traded funds: Time to jump in?
By Money Matters Editors
Exchange-traded funds, which issue securities backed by the item invested in, have become a popular way for typical investors to play the commodities market. The question is, should you invest in an ETF?
In a word: no. Exchange-traded funds do give investors access to commodities, but the premise is flawed: typical investors should not be investing in commodities at the source, to begin with.
And the reason is obvious enough: commodities are a highly-volatile, unpredictable investment class. Consider the U.S. gasoline market: there are more than 20 variables that can affect the price of regular unleaded gasoline. Natural gas has almost as many variables. ETFs do very little to change the above. Don't misunderstand: ETFs are not gimmicky, but they are quirky.
Exchange-traded funds, which issue securities backed by the item invested in, have become a popular way for typical investors to play the commodities market. The question is, should you invest in an ETF?
In a word: no. Exchange-traded funds do give investors access to commodities, but the premise is flawed: typical investors should not be investing in commodities at the source, to begin with.
And the reason is obvious enough: commodities are a highly-volatile, unpredictable investment class. Consider the U.S. gasoline market: there are more than 20 variables that can affect the price of regular unleaded gasoline. Natural gas has almost as many variables. ETFs do very little to change the above. Don't misunderstand: ETFs are not gimmicky, but they are quirky.
Wednesday, October 7, 2009
The inflation hawks circle: For U.S, it's cut the budget deficit, or else
By Money Matters Editors
Now the road gets a little bumpier. For years, the United States ran large deficits with near impunity - with low inflation and relatively low interest rates. That may be starting to change.
On Tuesday, investors bid-up the price of gold to a record high close of $1,033.90 per ounce. Gold had hit an intra-day high of $1,045 per ounce earlier in the day. (To view a price chart for gold click here.)
Historically, institutional investors (IIs), bid-up gold when they sense that inflation will re-heat in the quarters ahead. The culprit in Tuesday’s rally was the former, and also some chatter that there may be a move to price crude oil using a basket of currencies or a basket of currencies plus gold – either of which would be bearish for the dollar. Some major economic leaders are growing increasingly concerned about possible further weakness in the dollar and a rise in inflation, due to the U.S.’s large plus-$1 trillion budget deficit.
Now the road gets a little bumpier. For years, the United States ran large deficits with near impunity - with low inflation and relatively low interest rates. That may be starting to change.
On Tuesday, investors bid-up the price of gold to a record high close of $1,033.90 per ounce. Gold had hit an intra-day high of $1,045 per ounce earlier in the day. (To view a price chart for gold click here.)
Historically, institutional investors (IIs), bid-up gold when they sense that inflation will re-heat in the quarters ahead. The culprit in Tuesday’s rally was the former, and also some chatter that there may be a move to price crude oil using a basket of currencies or a basket of currencies plus gold – either of which would be bearish for the dollar. Some major economic leaders are growing increasingly concerned about possible further weakness in the dollar and a rise in inflation, due to the U.S.’s large plus-$1 trillion budget deficit.
Tuesday, October 6, 2009
Health care reform update: The politicking has only just begun
By Money Matters Editors
Health care reform update: Assuming a health care reform bill makes it out of the Senate Finance Committee - and one will - two, major hurdles remain: the Senate and the likely conference committee reconciling differences with the House’s health care reform legislation. Neither of these hurdles will be easy to mount.
Senate Majority Leader Harry Reid, D-Nevada, has the difficult task of trying to maintain liberal Democratic Senators’ support for the bill without angering Moderate Democrats. It’s critical that Reid retain at least 60 votes for the bill – in any combination – because a Republican-dominated coalition is set to filibuster any bill that falls below 60 votes, the level needed to invoke cloture and end a filibuster. In the United States, due to the filibuster’s unlimited debate provision, having a simple majority doe not mean you can govern: ‘in the Senate, it takes 60 to govern,’ as they say on Capitol Hill.
(Decades ago, a filibuster was rare. Today, in Washington’s highly partisan environment featuring two polarized parties, the filibuster is used routinely. The great former Senate Majority Leader, and President Lyndon B. Johnson is turning over in his grave!)
Health care reform update: Assuming a health care reform bill makes it out of the Senate Finance Committee - and one will - two, major hurdles remain: the Senate and the likely conference committee reconciling differences with the House’s health care reform legislation. Neither of these hurdles will be easy to mount.
Senate Majority Leader Harry Reid, D-Nevada, has the difficult task of trying to maintain liberal Democratic Senators’ support for the bill without angering Moderate Democrats. It’s critical that Reid retain at least 60 votes for the bill – in any combination – because a Republican-dominated coalition is set to filibuster any bill that falls below 60 votes, the level needed to invoke cloture and end a filibuster. In the United States, due to the filibuster’s unlimited debate provision, having a simple majority doe not mean you can govern: ‘in the Senate, it takes 60 to govern,’ as they say on Capitol Hill.
(Decades ago, a filibuster was rare. Today, in Washington’s highly partisan environment featuring two polarized parties, the filibuster is used routinely. The great former Senate Majority Leader, and President Lyndon B. Johnson is turning over in his grave!)
Monday, October 5, 2009
Congress should extend the $8,000 tax credit for first-time home buyers through Jan. 1, 2011
By Money Matters Editors
Perhaps it’s time for the U.S. Congress to renew the $8,000 federal income tax credit for first-time home buyers. The credit expires November 30.
And the reasons are obvious enough. First, the current economic consensus projects only tepid U.S. GDP growth of 1.0-1.5 percent in the early stages of the next economic expansion – hardly the stuff of massive job creation outside of the housing sector. In other words, the output gap in the U.S. economy is likely to persist, even as the recovery progresses.
Second, the housing sector, while showing signs of stabilization, still isn’t experiencing enough traffic/demand from potential home buyers. Many prospective home buyers have adopted a ‘wait-and-see’ approach – delaying purchases, hoping for a further decline in prices. Translation: there are a lot of fence-sitters, and the $8,000 credit may be just the incentive needed to nudge these likely-but-waiting home buyers into the market.Further, the extra home buying activity will create some jobs by increasing demand for appliances, furniture, home services, and insurance, as an increase in home buying historically has done.
Perhaps it’s time for the U.S. Congress to renew the $8,000 federal income tax credit for first-time home buyers. The credit expires November 30.
And the reasons are obvious enough. First, the current economic consensus projects only tepid U.S. GDP growth of 1.0-1.5 percent in the early stages of the next economic expansion – hardly the stuff of massive job creation outside of the housing sector. In other words, the output gap in the U.S. economy is likely to persist, even as the recovery progresses.
Second, the housing sector, while showing signs of stabilization, still isn’t experiencing enough traffic/demand from potential home buyers. Many prospective home buyers have adopted a ‘wait-and-see’ approach – delaying purchases, hoping for a further decline in prices. Translation: there are a lot of fence-sitters, and the $8,000 credit may be just the incentive needed to nudge these likely-but-waiting home buyers into the market.Further, the extra home buying activity will create some jobs by increasing demand for appliances, furniture, home services, and insurance, as an increase in home buying historically has done.
How can the U.S. Congress help strengthen the dollar?
By Money Matters Editors
One of the ways the U.S. government can strengthen the dollar is an obvious one: cut the budget deficit, including a tax increase to pay for the Iraq War and Afghanistan War.
The U.S. Congress made many policy mistakes in the past eight years prior to the Obama administration, and one of them was spending money on the Iraq War and Afghanistan War without first raising a tax – an income tax or otherwise – to pay for it.
One of the ways the U.S. government can strengthen the dollar is an obvious one: cut the budget deficit, including a tax increase to pay for the Iraq War and Afghanistan War.
The U.S. Congress made many policy mistakes in the past eight years prior to the Obama administration, and one of them was spending money on the Iraq War and Afghanistan War without first raising a tax – an income tax or otherwise – to pay for it.
Friday, October 2, 2009
It’s too early to evaluate the free enterprise system
By Money Matters Editors
These days, it’s become popular to criticize the free market system, or capitalism, and much of it is justified.
Over-leveraged banks, home owners who treated their houses as ATM machines or who bought homes they could not afford when interest rates reset to normal rates, and mortgage lenders who granted curious and in some cases absurd mortgages to home buyers, all played a role in creating the financial crisis. And others were complicit. It was a tragic play involving debt, too much debt, and fraudulently obtained debt, and it is deserving of rebuke.
These days, it’s become popular to criticize the free market system, or capitalism, and much of it is justified.
Over-leveraged banks, home owners who treated their houses as ATM machines or who bought homes they could not afford when interest rates reset to normal rates, and mortgage lenders who granted curious and in some cases absurd mortgages to home buyers, all played a role in creating the financial crisis. And others were complicit. It was a tragic play involving debt, too much debt, and fraudulently obtained debt, and it is deserving of rebuke.
Thursday, October 1, 2009
Welcome to Money Matters
By Money Matters Editors
Welcome to Money Matters, a web site about stocks, sectors, investing, macroeconomics, and more. Our focus is on the markets and the economy, but really, if it’s about money, it’s fair game here. We offer independent news, analysis, commentary, and research to help you, the investor, make more-informed investing decisions.
Further, because our focus is on you, the investor, we want to hear from you to make our service better. Please offer your thoughtful comments in the comments section provided.
Money Matters has assembled a team of experienced reporters, analysts, columnists, and economists with one goal in mind: to help you navigate through these challenging times.
Our Stock Reviews by our stock analysts are based on an independent, proprietary stock investment formula, not affiliated with any bank, brokerage, or research service. If you’re looking for a stock to invest in, low risk to high risk, be sure to check out our Stock Reviews.
Thank you for visiting Money Matters, and visit us again soon.
-Money Matters Editors
Welcome to Money Matters, a web site about stocks, sectors, investing, macroeconomics, and more. Our focus is on the markets and the economy, but really, if it’s about money, it’s fair game here. We offer independent news, analysis, commentary, and research to help you, the investor, make more-informed investing decisions.
Further, because our focus is on you, the investor, we want to hear from you to make our service better. Please offer your thoughtful comments in the comments section provided.
Money Matters has assembled a team of experienced reporters, analysts, columnists, and economists with one goal in mind: to help you navigate through these challenging times.
Our Stock Reviews by our stock analysts are based on an independent, proprietary stock investment formula, not affiliated with any bank, brokerage, or research service. If you’re looking for a stock to invest in, low risk to high risk, be sure to check out our Stock Reviews.
Thank you for visiting Money Matters, and visit us again soon.
-Money Matters Editors
Want lower gas prices? Cut the U.S. budget deficit
By Money Matters Editors
Americans do a lot of complaining about the price of gasoline. What’s one good way to lower gas prices? Cut the U.S. budget deficit! You read correctly - cut the budget deficit. Here’s why:
Oil has many roles in our modern world. It is, as everyone knows, the primary fuel for transportation in the developed and now in the developing world, too. In the United States, it’s clearly the most important commodity, given the nation’s enormous gasoline use, and consider this staggering statistic: one of every 10 barrels of oil in the world is used to make gasoline for U.S. motorists. Astounding. Talk about a car culture.
But what many motorists – and some investors – do not know is that oil has other roles in the modern world, namely as an asset for investment, hedge, and related funds. Further, some investors buy oil as an inflation hedge. And it’s those two, latter roles, as an asset and as an inflation hedge, that explain the connection between the U.S. budget deficit and price of gasoline in the U.S.
Americans do a lot of complaining about the price of gasoline. What’s one good way to lower gas prices? Cut the U.S. budget deficit! You read correctly - cut the budget deficit. Here’s why:
Oil has many roles in our modern world. It is, as everyone knows, the primary fuel for transportation in the developed and now in the developing world, too. In the United States, it’s clearly the most important commodity, given the nation’s enormous gasoline use, and consider this staggering statistic: one of every 10 barrels of oil in the world is used to make gasoline for U.S. motorists. Astounding. Talk about a car culture.
But what many motorists – and some investors – do not know is that oil has other roles in the modern world, namely as an asset for investment, hedge, and related funds. Further, some investors buy oil as an inflation hedge. And it’s those two, latter roles, as an asset and as an inflation hedge, that explain the connection between the U.S. budget deficit and price of gasoline in the U.S.
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