Archives for June 2013

June 2013 - Page 14 of 16 - Money Morning - Only the News You Can Profit From

Is Jamie Dimon's "Scary and Volatile" Prediction on Target?

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JPMorgan CEO Jamie Dimon created a stir across the globe Thursday when he told a forum in China markets will remain volatile because of extraordinarily low interest rates.

Speaking at the Fortune Global Forum in Chengdu, China, Dimon said, "It's a different world when central banks are managing interest rates….  Until it gets back to normal, it's going to be scary and volatile."

Stuart Varney, the host of FOX Business' "Varney & Co.," asked Money Morning Chief Investment Strategist Keith Fitz-Gerald and Wall Street analyst Meredith Whitney for their take on Dimon's comments.

Is Dimon right? Check out what Fitz-Gerald and Whitney had to say in the accompanying video.




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European Central Bank Does Nothing - But Markets React in Big Way

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"Maybe next year…" was basically the message sent today (Thursday) from the European Central Bank (ECB).

The European Central Bank left interest rates unchanged despite slightly lowering its outlook for the ailing Eurozone economy for the remainder of 2013. But, it sees a gradual recovery in 2014.

The ECB forecasts Eurozone GDP will contract by 0.6% this year, down from its March projection of 0.5%. However, it modified its 2014 estimates, predicting a return to growth at a rate of 1.1%.

"Euro-area economic activity should stabilize and recover on the course of the year albeit at a subdued pace," ECB President Mario Draghi said at a news conference.

The region has been stuck in recessionary mode for six consecutive quarters. But Draghi cited improving economic data in May as reasons for not taking immediate action.

"But we stand ready to act, and we will continue to monitor closely all incoming data," Draghi said at a news conference. He added the ECB would remain "accommodative" for as long as necessary.

Draghi also staunchly defended the ECB's actions, saying the bank's outright monetary transactions launched last year were "probably the most successfully monetary policy measure undertaken in recent times."

Draghi said the policy had no negative affect on markets.

"The ECB hasn't done anything to increase volatility in the markets," Draghi said. "If you think the ECB has done anything comparable to other central banks, we wouldn't agree."

After today's ECB briefing, the Stoxx Europe 600 Index fell 0.4% to 294.04, setting it on pace to close at the lowest level since late April. Banks suffered some of the steepest losses.

European bond yields plunged the most in three months, with Portugal taking the worst hit.

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How to Get Out of Student Loan Debt in Bankruptcy

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Anyone wondering how to get out of student loan debt – or wondering if a slew of student debtors could try to do so – needs to read this.

Yesterday, I wrote about the case of Michael Hedlund, the failed law student who was able to discharge $58,000 of his student loans in a 10-year bankruptcy action.

Before Hedlund's case, it was widely accepted that there were only two ways to get out of student debt: pay it off, or die.

But the Ninth Circuit took a long, hard look at Hedlund's circumstances.  It found that he'd acted in good faith to repay his loans, and that paying the full amount would be an undue hardship for Hedlund and his family. 

The court viewed Hedlund as an "ideal debtor," and so it excused a large portion of his debt.

If you are a student debtor, you too could have a decent shot at discharging your student debt in bankruptcy, but only if you are an ideal student debtor.

But what makes an ideal debtor?

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IRS Scandal Exposes a Long History of Outrageous Abuses

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The IRS scandal of allegedly targeting conservative groups for extra scrutiny may just be the tip of the iceberg. Unanswered questions abound about the powerful agency's involvement in Obamacare and partisan politics.

Using the IRS as a presidential pit bull is a fine old bipartisan tradition going back to Franklin D. Roosevelt's administration and refined by Richard Nixon.

As we wait for what is sure to be the Summer of Endless Congressional Hearings, to be followed by the Winter of the Independent Special Prosecutor, let's have a look at some of the IRS' most notorious shenanigans – old and new.

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Too Big To Prosecute: Goldman Skates Again

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These investment bankers almost ruin our economy and they're still acting like it's 2007. Have they no shame?

If you missed the latest news that former Goldman Sachs (NYSE: GS) Vice President Neil M. M. Morrison was fined a record $100,000 by the SEC and barred from the securities business for five years for breaking municipal securities rules, don't feel bad.

The news didn't make it into many newspapers.

And sadly, that's because there's nothing newsworthy about greed and corruption on Wall Street.

Here's what Morrison did wrong, besides getting caught. And what his former firm Goldman Sachs said about him after they threw him under the bus, then fired him because he got caught doing what he did.

It's kind of like the intro to "Mission Impossible" episodes and movies when the agent receives the assignment, and the message ends saying, "Of course, if you are caught, we will disavow having any knowledge of you or your mission," then self-destructs.

Neil Morrison, 38 years old, started as a vice president of Goldman Sachs in July 2008. As a municipal finance executive in Goldman's Boston office, Morrison's job was to bring in municipal underwriting business, including the Massachusetts Treasurer's office.

Goldman "trained" Morrison on the ins and outs of gathering municipal underwriting business, the rules, regulations and laws governing municipal financing and underwriting standards, as well as Goldman's own internal policies.

And then….

Why It Pays to Invest in Emerging Market Dividend-Payers

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An unexpected change of heart happened in May that you might not have heard about.

After years of resisting any path other than its rigorous course, Germany announced it is backing off from pure austerity and is now planning to spend billions of euros to stimulate the economies of Europe.

Germany, which had been the economic rock of Europe, was facing fissures in its economy as well as an upcoming election season.

With pressure building, Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel are now "willing to abandon ironclad tenets of their current bailout philosophy," says Spiegel Online.

The Scariest Obamacare Facts Yet

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There have been fears surrounding the "real" Obamacare facts since the Affordable Healthcare Act was first mentioned.

"An unfolding disaster for the American economy," 2012 Republican presidential frontrunner Mitt Romney said of Obamacare. Fellow candidate Rick Santorum called it "the beginning of the end of freedom in America."

Signed into law on March 23, 2010, Obamacare was peddled to Americans as the answer to the precarious problems plaguing the country's healthcare system.

Among its promises were: uninsured Americans were to gain coverage through an expansion of Medicaid; insurance providers couldn't deny coverage to individuals with pre-existing conditions; employers had to offer health insurance to employees; and costs would come down.

As many Obamacare provisions start to kick-in, the nation is finding out how the sweeping health care overhaul fails to live up to its promises.

At over 20,000 pages long, the legislation is full of stipulations chipping away at what it claimed it would achieve.

Following are some of the most alarming Obamacare facts uncovered to-date.

Law Student Exposes the Secret to Wiping Out Student Loan Debt in Bankruptcy

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Accepted wisdom says that there are only two (rather sobering) ways to relieve the burden of student debt:  either pay it off, or depart from this earthly world. 

Until now.

On May 22 the Ninth Circuit Court of Appeals wiped out $58,000 in student loan debt for a former law student in bankruptcy proceedings, sending shockwaves through the formerly impervious facade of student loan debt performance.

Ten years in the making, the ruling could burst the trillion dollar student loan bubble.

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Rick Rule Explains Falling Gold Prices

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The Federal Reserve and other central banks keep printing money. The U.S. stock market is soaring. And gold prices, after a brief recovery, have continued their plunge.

Are these phenomena connected? We put the question to one of the world's foremost gold experts, Rick Rule, founder and chairman of Sprott Global Resources Investments.

Listen to his explanation for falling gold prices in the following interview.

And even as gold prices sink, mining costs have climbed. If gold prices keep falling, miners could take "fairly drastic measures" to remain profitable, according to Rule.

Check out Rule's analysis in the accompanying video.