Archives for August 2013

August 2013 - Page 12 of 14 - Money Morning - Only the News You Can Profit From

In Obama's America, the Harder You Work, the Less You Make

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The harder we work, the less we make. That seems to be the mantra of the Obama recovery. That is, if we have a job.

In the last four years, real median household income has fallen during both the recession and the recovery. Amazing. It's like still standing in the muck after the ebb tide.

According to Sentier Research, the June median income in the United States sat at $52,098, or 3.9% lower than in June 2009, the month tagged as the start of the recovery.

The median income of Americans continues to decline (adjusted for inflation), increasing concerns about the long-term health of the middle class and consumer purchasing patterns.

Still, it's not just the last five years that has seen the middle class take a steep dive. The trend, adjusted for inflation, is much worse.

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Obamacare Facts: This Doctor Tells Why He Might End Up Jobless January 1st

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My good friend Mark Kot is the real Hamptons Doctor. He doesn't make house calls because his Southampton Urgent Medical Care facility is where everyone goes for the best medical care in the Hamptons.

I asked him for his take on Obamacare. Yesterday he sent me the little ditty below, and I need to share it with you today.

He got it off the Internet. Which means it's true. No, I'm not kidding. Well, at least this time I'm not kidding. This Internet ditty is true.

Before I share it with you, let me tell you why it is so true and so frightening…

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Can Corporate Earnings Keep Up with Soaring Stock Prices?

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Stock prices for many U.S. companies are climbing rapidly, pushing the market to record highs – but will corporate profits support these gains?

That's one of the questions Money Morning Chief Investment Strategist Keith Fitz-Gerald tackled on FOX Business' "Varney & Co." program this morning.

Are Coporate Earings Driving Stock Prices

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Here's Proof a New Glass-Steagall Act Could Rein in the Big Banks

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The Too-Big-to-Fail banks have a notorious track record of avoiding, evading or eliminating nearly all of Washington's attempts to bring them to heel.

So skeptics can be forgiven for thinking that the recently proposed new Glass-Steagall Act won't change anything on Wall Street.

As the moniker "Too-Big-to Fail" implies, such banks are not easy to push around.

"No bank will ever get out of a profitable line of business, unless they're forced to, or there's a huge loss that threatens the perception of the banks' risk management, or some scandal forces a mea culpa and an exit," said Money Morning Capital Wave Strategist Shah Gilani, who as a former hedge fund trader understands how Wall Street thinks.

Yet the Too-Big-to-Fail banks have recently pulled back in one area – physical commodities trading – as a result of regulatory pressure from several directions.

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Why Not All Stocks That Pay High Dividends Are the Best "Buys"

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Part of constructing a winning portfolio includes finding stocks that pay high dividends – but there are some components to that strategy that investors must learn now to be successful.

At a time when CDs, Treasuries and money market instruments are yielding next to nothing, scores of investors are pouring money into the highest-paying dividend stocks.

These Companies Must Pay Out 90% of Their Earnings

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Did you know there are companies that must pay out 90% of their earnings to shareholders?

They have to. By law. They can’t skimp.

Not only that, they’ll pay you a high-yield dividend. Much higher than dividend stocks or corporate bonds.

They’re not Canadian investment trusts or some exotically structured partnership where you have to worry about your money.

And get this. They’re part of private equity companies. Whether you like private equity or not, it’s where the smartest on Wall Street make their money.

I’ll show you where to find these high yield and growth gems…

Another Shoe Has Dropped... and It's a Big One

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I wasn't more than 30 minutes outside of D.C. the other night before my cell phone started ringing.

The calls involved breaking new developments overseas that promise to have a big impact on the global energy markets. They concerned a major global energy situation that is likely to create a domino effect that will have consequences for U.S. domestic policy.

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Goldman Sachs, the Judas Penguin, and the Tip of the Iceberg

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News from Wall Street this week reminded me of the penguins that inhabit the icy, turbulent waters of the Southern Ocean.

These penguins are preyed upon mercilessly by tremendous, ravenous orcas – a terrible beast to feel gnawing on your leg if you derive your daily bread from the frozen, watery wastes.

But the penguins have devised a clever, if brutal, warning system.

A flock of penguins will gather apprehensively at waters' edge… and one luckless penguin will be pushed into the sea. If the penguin is ripped to shreds by killer whales, the rest will hang back a while.

Otherwise, the rest of the flock piles into the briny deep.

Goldman Sachs Group (NYSE: GS) bond trader Fabrice Tourre is one of those luckless, doomed penguins.

The predator in this case is unlikely: a normally toothless flounder otherwise known as the Securities & Exchange Commission.

Fabrice Tourre, a bond trader of the middling ranks, was earlier this week found liable for six of seven fraud charges relating to Goldman Sachs' trading of toxic mortgage assets.

The civil trial – a rare prosecution – provided a rare victory to the SEC, who, after a loss and a draw, are desperate for a win. At issue was whether or not a full $1 billion worth of collateralized debt obligations (CDOs) were fraudulently marketed.

They were.

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