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The Cybersecurity Play That Doubled Once – Will Double Again

Not long ago, a relative of mine was the victim of identity theft. And I have to tell you that I really felt for the entire family.

The thief ran up nearly $20,000 in charges, opened new accounts and tried to open others.

And I can tell you that the frustrations over the losses (most of which ended up being covered) were dwarfed by the helplessness that came whenever new charges showed up – and the worry that was spawned by never finding out how the whole mess started.

As we watch the headlines about data breaches and cybercrime – and watch as the violations move closer and closer to home – those worries only escalate.

  • fiscal cliff

  • Will the Fiscal Cliff Clash Damage the U.S. Credit Rating? There are less than fifty days left for lawmakers to come to agreement on the fiscal cliff, but uncertainty surrounding the dilemma is already affecting the economy. The political bickering over solving the fiscal cliff issue now has put the U.S. AAA credit rating at risk again.

    In early September ratings agency Moody's Corp. (NYSE: MCO) announced it would likely downgrade the U.S. credit rating if no deal is reached before the end of the year, and on Monday the company reiterated its stance.

    "A scenario whereby action on the budget is delayed until sometime in 2013 appears increasingly likely; for example, via a temporary extension of most measures except the increase in payroll tax," Moody's officials said.

    "Such deferment, if not accompanied by an apparent commitment to achieving agreement and a credible timetable for implementing the necessary reforms to preserve sovereign creditworthiness, would be inconsistent with maintaining a AAA rating," they warned.

    Fiscal Cliff Bickering Must End

    Due to the higher taxes and automatic cuts that come with the fiscal cliff, corporations already are starting to lay off workers. The independent Tax Policy Center estimates that taxes will increase almost $3,500 per household as a result of the fiscal cliff.

    It remains to be seen whether the fiscal cliff will be resolved before the year is up, but even if that happens the U.S. could still have its rating lowered by Moody's due to the political stalemate and partisanship that has gone on the past two years.

    Immediately after the election all focus has shifted towards the fiscal cliff and whether or not Congress and the president can work together.

    House Speaker John Boehner, R-OH, has been very vocal after the election, calling for compromise and insisting that Republicans can accept more revenue.

    However, many are wondering if that is just a post-election piecemeal offering and if his true feelings were voiced before the election.

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  • Fiscal Cliff: Both Sides Optimistic, But Still No Real Answers Over the weekend, both Republicans and Democrats voiced confidence that the two opposing sides could strike a deal and avert falling off the fiscal cliff.

    However, details on how policymakers will do so remain unclear.

    Key sticking points that have kept the two parties at odds is that Democrats widely favor increasing taxes on wealthy Americans, while Republicans maintain that the answer to the bulging fiscal deficit is to slash federal spending.

    With just weeks until the cutoff date, it appears each side is ready to make some concessions.

    Tennessee's GOP Sen. Bob Corker acknowledged Sunday on Fox News that the nation's wealthiest should shell out more in taxes. But, he added, the increases should come from closing loopholes instead of boosting tax rates. Corker added that cuts to entitlement spending would also need to be considered for Republicans to approve any pact.

    "I'm optimistic on a deal," the Senator said. He went on to say he thought a "basis for the deal" was in place.

    Corker continued, "I think finally, Democrats are willing to accept-and I don't mean this pejoratively, but I think they know that Republicans really are willing to put revenues on the table if we can do it in a pro-growth way, and there is a way of doing that."

    In addition, David Axelrod, a senior adviser to U.S. President Barack Obama's re-election campaign said Sunday on CBS's "Face the Nation" he believed the Republican comments regarding the fiscal cliff are "encouraging."

  • The Fiscal Cliff is a Mole Hill Compared to This Everyone is afraid of falling off the "fiscal cliff." But there's another dangerous countdown clock about hit to zero.

    And no one is talking about it, even though it will spell even more financial problems for us all.

    At midnight on December 31, 2012, the Transaction Account Guarantee (TAG) program will expire.

    The TAG program was initiated at the height of the credit crisis when depositors were fleeing banks for fear they would go under.

    To quell what was turning into a run on banks, the FDIC upped regular deposit insurance from $100,000 to $250,000 and under the TAG banner initiated unlimited insurance for all non-interest bearing transaction accounts.

    It's the second part that's important because that's the piece that will soon come to an end.

    When the unlimited insurance expires, corporations, businesses and depositors -- whose soon- to- be- uninsured deposits, which total some $1.4 trillion, are likely to flee smaller banks -- will rush into money market funds and seek the safety of short-term U.S. Treasuries.

    This will create serious negative repercussions affecting our economic future.

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  • What's Next for the Fiscal Cliff? With both parties viewing the results of Tuesday's election as a mandate from the American people to address the major economic problems, Congress and the Obama administration will focus first on not having to cross the fiscal cliff.

    Clearly, neither party wants the American economy to ever look anything like it did in 2008 and 2009. Towards this end, Congress has gone back into session to reach an agreement to move the economy forward.

    Drawing a line, House Speaker John Boehner, R-OH, said Thursday that, "Raising tax rates is unacceptable. Frankly, it could not pass the House. I'm not even sure it could pass the Senate."

    Democrats have taken upon the victory on Tuesday to urge a strong line be taken in budget negotiations.

    Speaking today (Friday), President Obama kept his call for greater taxes on higher income earners.

    "As I've said before, we can't just cut our way to prosperity," President Obama said Friday. "If we're serious about reducing the deficit we have to combine spending cuts with revenue. That means asking the wealthy to pay a little more in taxes." //

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  • Fiscal Cliff: Are We About to See Compromise in Washington? Now that Election 2012 is over, Washington is readying for its next battle: the fiscal cliff.

    U.S. President Barack Obama's victory in Tuesday's election has upset the Republicans' political calculus. The purpose of four years of obstruction was to deny the president any legislative achievements and thereby prevent his re-election.

    It didn't work.

    With the election behind us, the politics of obstruction has lost its meaning. There is nothing to be gained from obstruction for obstruction's sake.

    Boehner made that abundantly clear when he read a statement Wednesday afternoon in which he opened up the possibility of compromise in order to avoid the looming fiscal cliff at the end of the year.

    "For purposes of forging a bipartisan agreement that begins to solve the problem, we're willing to accept new revenue, under the right conditions," Boehner said.

    "The president has signaled a willingness to do tax reform with lower rates," Boehner continued. "Republicans have signaled a willingness to accept new revenue if it comes from growth and reform. Let's start the discussion there."

  • What is the Fiscal Cliff? What is the fiscal cliff, and how do we avoid it?

    The fiscal cliff will be crossed on Jan. 2, 2013 when $530 billion in tax increases and spending cuts at the federal level take place due to a previous budget agreement between Congress and the Obama administration.

    Since Congress and the Obama administration could not reach an accord to reduce the federal budget deficit, a series of automatic tax hikes and decreases in spending will take place instead to achieve the necessary savings.

    This is much like the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act from 1985. The fiscal cliff will pack a one-two punch to U.S. cities that are already burdened by heavy debt loads, and raise taxes on U.S. households struggling to recover.

    What is the Fiscal Cliff Effect on the U.S. Economy?

    According to the Congressional Budget Office, a non-partisan organization, if there is no other agreement and the fiscal cliff is crossed on Jan. 2, the United States could fall back into a recession in 2013.

    That will have a tremendous negative impact on the global economy as Europe is in a recession and economic growth is slowing in China and India.

    Based on the 320-point drop in the Dow Jones Industrial Average the day after President Obama's re-election, Wall Street is not bullish about the future of the economy.

  • Hurtling Over Fiscal Cliff Likely Regardless of Election Outcome Representatives of the Group of 20 (G20) industrialized countries meeting in Mexico City over the weekend begged U.S. officials attending the meeting to avoid the impending fiscal cliff in 2013.

    Chile's finance minister, Felipe Larrain told Reuters, "If we're not able to resolve the cliff, that could be the tipping point for a much more complicated scenario in the world economy."

    The G20 clearly recognizes the risk of the U.S. falling off of the fiscal cliff.

    Comparing the relative risks of the U.S. and Europe, Canadian finance minister Jim Flaherty told Bloomberg Businessweek, "In the near-term, clearly the U.S. situation is the higher risk."

    Tomorrow's presidential election may complicate the situation regardless of if U.S. President Barack Obama wins a second term or if Mitt Romney is our next president.

    Washington insiders have suggested that, unless there is a wider than expected margin of victory for either candidate, legal challenges are likely, which could put the result of the election in doubt.

    In fact, each side has hefty legal teams waiting to jump to action if the election is close.

  • Protect Your Money from the Fiscal Cliff Attack on Dividends Anyone not living in a cave by now knows about the ominous tax-cut situation - fiscal cliff 2013 - that could be unleashed on the U.S. economy early next year.

    That is assuming Congress does nothing, and, let's be honest, doing nothing is one thing in which Congress is truly proficient.

    Unfortunately, one of the tax cuts that will sunset should the fiscal cliff become a reality is the dividend tax break that went into effect in President George W. Bush's first term.

    This is not an endorsement of one candidate or party over the other. After all, the economy could fall off the fiscal cliff regardless of the outcome of next week's presidential election.

    However, there is little refuting the fact that the dividend tax break has been a winner for investors.

    The top dividend tax rate is currently 15%, but for the most fortunate among us, that rate could surge to 40% under the fiscal cliff scenario.

    In other words, letting the dividend tax cuts expire amounts to a government boondoggle of epic proportions that even Uncle Sam would have a hard time topping.

    Here's why.

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  • The Fiscal Cliff's Biggest Surprise Could Be a Rising U.S. Dollar My grandmother Mimi had a saying that was as blunt as it was uncouth. "When the stuff hits the fan," she used to say, "it will not be evenly distributed."

    This one came up often when she sensed that world events were about to take a turn for the worse.

    You've heard me mention Mimi before. She was widowed at a young age and went on to become a savvy global investor long before people thought to look beyond their own backyard.

    Mimi never cared what Wall Street's "Armani Army" had to say.

    Instead, she preferred to travel widely to see for herself what the real story was. Having grown up in the midst of the Great Depression, she believed that people were the ultimate indicator and that governments were the penultimate contrarian influence.

    If she were still alive today, I think she'd encourage us to take a good hard look in the proverbial "mirror" especially with regard to the looming fiscal cliff making headlines the world over.

    And I don't think she'd waste any time with the doom, gloom and boom crowd either.

    She was always on the hunt for opportunity when everyone else was running from chaos. Thanks to her, it's a habit that remains firmly ingrained in me today.

    Not One but Three Fiscal Cliffs

    And that brings me back to the "fiscal cliff."

    In my mind, this is a misnomer. There isn't really a singular fiscal cliff . As I explained earlier this summer to Sheryl Nance of Forbes there are actually three.

    • The massive adjustments headed our way as tax and spending cuts expire and come into effect beginning in 2013. You may know it as taxmegeddon.
    • The debt debacle and the near complete lack of any sort of credible financial consolidation plan that will affect everything from interest rates to collateral requirements and the US credit rating - again.
    • And politicians who simply don't understand that issues 1 and 2 are already dramatically impacting the economy long before the theoretical limits of spending come into play. Profits are declining and 61% of companies that have reported through Monday October 22nd have failed to meet expectations. Hiring is slowing and top line revenue is increasingly hard to come by.
    Together, they constitute a massive threat to the U.S. economy that could push our beleaguered "recovery" to the breaking point. (And I use all the sarcasm I can muster with that because our recovery isn't anything close to what's needed.)

    Many believe this is a moot point because Congress will get down to business in November after the Presidential Election takes place. The hope is that some sort of budget agreement will be reached and that the US economy will then be positioned for stronger growth in 2013.

    Yeah and I suppose the tooth fairy will show up, too.

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  • New Report on Fiscal Cliff 2013 Details Our Painful Future Are you worried yet about fiscal cliff 2013?

    If not, here are millions of reasons to be concerned.

    According to a report released today (Friday) from the National Association of Manufacturers, "The "fiscal cliff' is still two months off, but the scheduled blast of tax hikes and spending cuts is already reverberating through the U.S. economy, hampering growth and, according to a new study, wiping out nearly 1 million jobs this year alone."

    The report, titled "Fiscal Shock: America's Economic Crisis," details how the fiscal cliff could destroy some 6 million jobs through 2014, and send unemployment skyrocketing to nearly 12%.

    "The worst could be ahead," the report said. "If the fiscal contraction happens, the economy will almost certainly experience a recession in 2013 and significantly slower growth through 2014."
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  • Jim Rogers on Election 2012: "A Pox on Both Their Houses' Investing legend Jim Rogers says it doesn't matter who wins Election 2012.

    In his view, both President Barack Obama and challenger Mitt Romney are equally bad.

    "I repeat Shakespeare: A pox on both their houses as far as I'm concerned," Rogers said in a Breakout interview this week. "These are the guys who got us into this problem, so why does anybody think they will get us out?"

    The "problem" to which Jim Rogers is referring to is the sluggish U.S. economy, dragged down by the huge $16 trillion federal debt and annual budget deficits in excess of $1 trillion.

    Rogers predicted that regardless of who wins Election 2012, things won't get better.

    "If Mr. Obama wins, his friends are gonna get more money. If Mr. Romney wins, his friends are gonna get more money. But you and I, and everybody watching this show are gonna be worse off because the debt's going to go higher, and the turmoil is gonna get worse."

    Rogers blames both major parties for the nation's economic ills.

    "All of them have gotten us into this situation," Rogers said. "Look at the last 50 years of American history. Republicans, Democrats, Republicans, Democrats .... It's not doing us any good. None of us are benefiting by what's been going on in Washington."

    Jim Rogers is so down on U.S. politicians that he has absolutely no preference as to who wins the White House.

    "I will vote the protest vote. I nearly always vote the protest vote," Rogers said without specifying which third-party might get his support.

    In Rogers's view, a vote for either major party just perpetuates the problem.

    "If they keep sending us turkeys, and we keep voting for turkeys, they'll send us more turkeys," he said.

  • Peter Schiff: If You Think the Fiscal Cliff is Bad, Just Wait Forget the fiscal cliff, says economic expert Peter Schiff. This country faces a far bigger financial crisis.

    While the failure of Congress to act to prevent or mitigate the fiscal cliff - the combination of tax increases and federal spending cuts due to hit on Jan. 2, 2013 - would slam the economy hard, Schiff says it would be preferable to the crash he foresees.

    "It's not because we go over this phony fiscal cliff, it's probably because we don't go over that one because the government cancels the spending cuts, cancels the tax hikes, and instead we end up going over the real fiscal cliff further down the road," Schiff told Breakout recently.

    Schiff, the CEO and Chief Global Strategist of Euro Pacific Capital, said the real threat to the U.S. economy is "where interest rates spike and we can no longer afford to pay the interest on the enormous amount of debt we have."

    He also blamed the Federal Reserve's zero interest rate policy for making government borrowing too easy.

    The national debt, fueled by annual budget deficits of more than $1trillion, crossed the $16 trillion threshold at the end of August. At current spending rates it will hit $17 trillion next June.

    "We can't keep interest rates artificially low to stimulate the economy because it's the low interest rates that are the source of the problem," Schiff said.

    That about a third of the U.S. debt is held by foreign countries such as China and Japan is a ticking time bomb.

    "In fact, the real fiscal cliff comes when our creditors want their money back, and we don't have it," he said.

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  • CEOs, CFOs Voice Concerns over Crippling Fiscal Cliff While the fiscal cliff might not be at the forefront of concerns for the average American, it is deeply affecting the spending and hiring plans of many businesses.

    Four recent surveys show that corporate chief executive officers and chief financial officers are taking measures to prepare for the Jan. 2, 2013 actuation of the fiscal cliff.

    According to a recent study by the Congressional Budget Office, this could easily take the U.S. economy back into another recession. Despite that threat, it appears less and less likely that anything will be done by the Obama administration and Congress to avert the crisis.

    Needless to say, this has not gone unnoticed by the high level executive leadership of corporate America.

    "This complete Mexican standoff that we have now is not getting us anywhere," Jim McNery, Chief Executive Officer of Boeing Company (NYSE: BA) said about the looming failure of Congress and the Obama administration to mitigate the impact of the fiscal cliff.

    Business Feels Bearish

    Since businesses see fiscal cliff talks failing to deliver progress, growth expectations of the country's biggest companies have fallen.

    Members of the Business Roundtable, an association of chief executive officers, expressed in a recent survey bearish sentiment for every business measure (sales, capital spending and hiring).

    From the results of this research, the Business Roundtable has lowered its projections for a wide range of economic indicators for its most recent CEO Economic Outlook Survey. These were registered at the lowest level since 2009, the nadir of the Great Recession.

    Those closest to the fiscal operations of a company, the chief financial officers, are similarly bearish due in a large part to fiscal cliff 2013.

    The CFO Signals Survey found that 47% of chief financial officers are more pessimistic about how well their company will do this quarter.

    According to the survey, that sentiment represents the "most somber year-over-year expectations" ever in the history of that research report.

    Editors Note: Don’t let your profits be dragged down with this gloomy outlook. Put your money in silver - [ppopup id="70925"]here's how[/ppopup].

    CEOs and CFOs view hitting the fiscal cliff as a huge failure in the economic leadership from the elected political leaders in Washington, DC.

    John Engler, the former governor of Michigan who is now the President of the Business Roundtable, compared the negligence to the recent standoff between the National Football League (NFL) and its referees.

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  • As We Near Fiscal Cliff, Avoid These Vulnerable Stocks According to a recent study by CEO organization Business Roundtable, major corporations are preparing for the Jan. 2 onslaught of the fiscal cliff.

    Unless an accord is reached, the fiscal cliff could lead to negative U.S. economic growth for the first half of 2013 and unemployment soaring to 9.1%, according to research from KBW.

    The fiscal cliff will deliver a market-wide impact, but the brunt of vulnerability will be placed on a lot of the same sectors and companies that suffered during the Great Recession.

    The good news for many of these stocks is they've all enjoyed good runs this year, delivering healthy returns for investors.

    The bad news is that could all change by Jan 2.

    Fiscal Cliff Danger Zone: Three Stocks to Avoid

    Defense, housing and finance stocks are sure to be clobbered if the fiscal cliff is crossed.

    Federal spending is the lifeblood of the defense industry, which will feel the most pain from fiscal cliff spending cuts. Many of these companies do not have the diversity in business operations to survive.

    Lockheed Martin Corp. (NYSE: LMT) is particularly exposed as it is the nation's largest defense contractor.

    Already Lockheed Martin has created fiscal cliff survival plans. According to its Chairman and Chief Executive Officer, Robert Stevens, Lockheed Martin has slowed down hiring new employees and is prepared to lay off workers.

    LMT's share price fell about 50% from September 2008 to February 2009 due to the Great Recession, but the fiscal cliff effect could hit it much harder since defense spending was still strong during the stock's last tumble. Lockheed is up almost 17% this year to over $94, and 50% since 2009.

    Editors Note: [ppopup id="70925"]Bypass these risks altogether with this fiscal cliff-proof profit play [/ppopup]

    The fiscal cliff spending cuts affecting the defense sector will have a ripple effect into related markets. That includes the Washington, DC housing market which won't be able to continue a recovery if people in the region start losing jobs.

    That's why home builder NVR Inc. (NYSE: NVR) is in trouble.

    Building luxury homes in the Washington, DC area, NVR had to file for bankruptcy back in 1992 due to adverse economic conditions in the mid-Atlantic region at that time.

    To continue reading, please click here...
  • Fiscal Cliff: How Each Candidate Plans to Save Us America is moving closer to falling off the dreaded fiscal cliff, but Congress continues to move at a snail's pace in addressing the pressing subject.

    And while the nation waits for a resolution, the costs of doing nothing are rising, with U.S. taxpayers' money at risk.

    Lawmakers have taken a "hurry-up-and-wait" stance, putting off until after the November presidential election any decision-making about the most crucial matter currently facing Congress.

    At issue is whether to extend some or all of the Bush-era tax cuts and how to handle the nearly $1 trillion in spending cuts slated to kick-in starting Jan. 1.

    If the expiration of tax cuts comes to fruition, the result will be the biggest tax increase ever levied on Americans (Taxmageddon 2013).

    If the spending cuts start rolling out, thousands of jobs will be lost, our country's security will be put at risk, businesses will sorely suffer and programs that rely on government contracts will disappear.

    With just a few weeks before ballots are cast for our next president, the looming fiscal cliff has become a heated topic on campaign trails. Falling off the cliff would undoubtedly thrust the struggling U.S. economy into a recession in 2013, a consequence neither contender wants to tackle.

    So how do they plan to avoid the fiscal cliff? Let's take a look.

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