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While Washington Stews, You Can Cash In on the Biggest "Tax-Inversion" Deal in History

Back in June 2012, we recommended that you pick up shares of Big Pharma player Abbott Laboratories Inc. (NYSE: ABT). The reason: Abbott was planning to split in two at the end of the year, meaning folks who took our advice would end up with stakes in two companies for the price of one.

There was more than bargain-basement thinking at work here.

You see, these corporate breakups – known as spin-offs – have a habit of turning into market-beating profit plays. And the newly minted spin-off firms often end up as takeover fodder – also at big profits.

Abbott followed part of that blueprint.

  • Featured Story

    February Jobs Report: Here's What to Expect

    Blue Tie

    Expect a disappointing jobs report for February thanks to higher taxes and sequestration fears that put companies' hiring plans on hold last month.

    Economists expect nonfarm payrolls to show a gain of 160,000 jobs in February, with the unemployment rate holding steady at 7.9%, when the Labor Department releases the February jobs report tomorrow (Friday) at 8:30 a.m.

    Employment growth has averaged 177,000 per month over the last six months, and February is expected to fall short.  

    One reason is the 2% payroll tax cut that ended with 2012, leaving workers with less disposable income. Also, top income earners were slapped with a higher tax rate.

    The full tax impact wasn't felt in January, but retailers and restaurants are beginning to feel the pain.

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  • us labor department jobs report

  • Take a Closer Look Before Cheering the November U.S. Jobs Report The Department of Labor today (Friday) released the November U.S. jobs report, which showed the U.S. economy added 146,000 jobs last month, handily beating most economists' expectations.

    The addition pushed the unemployment rate down from an unhealthy 7.9% to a still elevated 7.7%. That is the lowest level in four years, since December 2008.

    Projections for the unemployment level ranged for it hold steady at 7.9% or rise to up to 8.1%.

    But the reasons for the drop aren't as encouraging as the lowered rate itself.

    The Real Story of the November U.S. Jobs Report

    The reason behind the surprising drop was because more dejected workers simply left the labor force. Some 350,000 people, unable to find work and no longer looking for a job, have dropped off the radar and were not counted among the slew of individuals still out of work.

    The labor participation rate fell 20 basis points to 63.6%. Without this drop in the labor force, the unemployment rate would have remained at 7.9%.

    Three years after the end of the 2007-2009 recession, the labor force participation rate remains extremely weak. If the rate reflected normal levels, the unemployment rate would be considerably higher.

    Also contributing to the unexpected uptick was early seasonal retail hiring, instead of long-term sustainable positions. Retail was a key jobs producer in November, adding 53,000 to payrolls.

    That's partly due to Thanksgiving being earlier this year than usual. Plus, more stores kicked-off the holiday shopping spree much before the usual Black Friday start.

    These factors "suggest an asterisk will have to be put alongside the monthly non-farm report," Bloomberg senior economist Joseph Brusuelas wrote in today's Bloomberg Economics Brief.

    To continue reading, please click here... Read More...
  • The Truth Behind the U.S. Labor Department Employment Report The U.S. Labor Department employment report released today (Friday) showed a better-than-expected payroll jump to 200,000, and the unemployment rate dropped to 8.5%. However, the numbers aren't nearly as promising as they seem.

    The payroll increase was double the revised 100,000 rise in November, and about 30% higher than the projected 155,000 increase. Private companies added 212,000 jobs, while the public sector lost 12,000.

    The unemployment rate is now the lowest since February 2009.

    The payroll jump is a good sign, but this month's U.S. Labor Department employment report isn't a reliable forecast for... Read More...