Largest bond fund drops all government debt and then some

Cutting spending to reduce the deficit is too much for partisan politics to manage, according to the largest bond fund in the world. The Pimco Total Return Fund has gone into negative territory on U.S. Treasuries. This is also known as taking a short position on the debt piling up in the U.S. government.

What Pimco will do for the Treasury

The Nation’s triple-A bond rating may be endangered and Pimco is betting on the debt problem driving up rates of interest. To get to a short position on Treasury bonds, Pimco sold borrowed securities on a bet it can buy them back later at a lower price. United States government debt has been cautioned by Pimco head, Bill Gross. Gross sold all of Pimco’s treasury holdings in February causing lots of concern. In March he made $7 billion bet against the securities.

There was a drop from zero to negative three in the $236 billion Return Fund held in the U.S. Treasury of Pimco. The fund’s money equivalents rose to 31 percent of the fund’s assets, a $73 billion bet the good times are about to end in the markets.

The possession of Pimco as short

Gross has no faith that Congress will be able to solve the deficit problem. The government is “out of Greeking the Greeks,” according to Pimco’s April newsletter. Greece’s massive government debt forced its leaders to ask for a bailout from the European Union to prevent a global chain reaction of financial failure. Greece’s financial issues were only a fifth of the debt that America has.

Will market play into Pimco’s hands

Gross is assuming a sort position on U.S. Treasuries and hoping the market falls in his favor. John Carney at CNBC warns investors to regard Gross’s machinations with caution. Wall Street has been unreliable for some time now, and something that seems right, might in fact be “dangerously wrong.”

Articles cited

Associated Press

finance.yahoo.com/news/PIMCO-goes-short-US-rb-3790514655.html?x=0

Fortune

finance.fortune.cnn.com/2011/04/10/pimcos-gross-betting-against-u-s-debt/

Christian Science Monitor

csmonitor.com/Business/Latest-News-Wires/2011/0412/Bond-fund-and-many-others-bearish-on-US-debt

Reuters

reuters.com/article/2011/04/11/us-pimco-bonds-short-idUSTRE73A2IR20110411

Startup America Partnership promises millions more in help

Being an entrepreneur is tough, but a three-month-old private entity, supported by government partnerships, is aiming to make it just a little bit easier. Over a dozen new businesses have pledged $400 million to help entrepreneurs grow their businesses. Source of article – Startup America Partnership helps small businesses grow by MoneyBlogNewz.

About the Startup America Partnership

The privately funded Startup America has a partnership with the U.S. federal government. They work together. The Startup America Partnership is technically a White House initiative however is privately funded and managed. Startup America aims to provide discounts and special programs to entrepreneurs to help them start and grow a business. The partnership provides preferred pricing and discounts to members of Startup America as well as workshops, classes and business information that could otherwise cost thousands of dollars. Over 60 percent of U.S. new jobs come from small businesses which also account for 44 percent of U.S. payroll. The partnership is meant to help encourage more of these small businesses to grow and hire.

An extra $400 million spent

Startup America made an announcement on April 20. Big-name businesses donated over $400 million to the organization. There was $125 million committed by American Express for Startup America corporations to get preferred pricing. About $100 million in Google Ad credits have been donated by Google. In May, “Startup Days” could be hosted by Facebook. HP is offering $100 million in discounts on products for startup businesses. There were several businesses involved in discounts as well. These involved Palindrome Advisors, The National Center for Women & Information Technology, LinkedIn, First Data, Ernst and Young and Cisco. Several partnerships with companies already existed. Included in this list are The Pearson Foundation, American Association of Community Colleges, Causecast, Intel, FirstData, Google, Intuit, Microsoft, Atisa, Cisco, Mass Challenge, IBM and Artists & Instigators.

Startup America takes anybody

The Startup America Partnership can help you in case you are a small company owner or have a business idea. Either before or after you’ve gotten unsecured loans to start your business, it’s as simple as signing up. Go to Startupamericaparternship.org, register, and start looking at deals. All the programs can be listed there, even though there are different needs for the different Startup America Partnership programs. You need to be able to conserve hundreds or thousands of dollars with the Startup America Partnership program dependent upon the business.

Information from

Startup America Partnership Website

startupamericapartnership.org/

SBA.gov

sba.gov/advocacy/7495/8420

Cash buyers hold a benefit in depressed housing market

Home values have fallen so far that more individuals are buying properties with cash. Most home buyers need a home loan. But increasingly that is going up against buyers that use cash as an advantage. However cash versus mortgage doesn’t necessarily have to be a done deal if the borrower does their homework.

Cold, hard cash is king

The National Association of Realtors reported an all time high in the number of deals in February in home sales done with cash. Cash buyers have become formidable opponents for many home customers financing their deal with a mortgage. The real estate market has more cash customers because many would rather have a home as an investment than stock. The investment in rentals has also been attractive to lots of people.

Last year, 59 percent of home customers purchasing as an investment paid cash. Since a seller knows that there probably won’t be difficulties with closing on the home, most are more willing to accept cash. When choosing between a buyer that needs financing and a lower cash offer, most are willing to take the cash. Cash usually wins when the bank is the seller. Banks choose the safest option when attempting to get homes off the books.

The best way to beat cash

In 2010, 25 percent of home sales were foreclosures. According to Fannie Mae, short sales increased also. This number increase 128 percent last year. Any seller with equity does not want a financed buyer. Cash customers are preferable. Equity holders are not under pressure to take whatever they can get and will wait for the best offer. Financing buyers can also compete with cash by getting pre-approved for a mortgage. Being prepared with a high down payment also evens the odds. When getting the home, do what the seller wants. This could help a lot. Make the deal clear by having a detailed contract ready while being respectful. When the time comes, act easily. Do not give up hope as a financing buyer. Cash deals aren’t always perfect either.

Financing or cash

Additionally to getting a better deal, paying cash to buy a home has several advantages. Sometimes the available returns on investments are lower than personal property rates. The interest money saved ends up being good for the buyer. The buyer only loses their own money if the value of the home goes down. A 10 percent drop can really hurt a mortgage with 20 percent down. Fifty percent of the down payment ends up lost.

There are advantages mortgages have though. Sometimes you purchase a home with cash. When this takes place, no other investments could be made with that money. There is also leverage here. If the value of the home goes up, the mortgage holder gains a higher percentage than the cash buyer. There are tax deductions for home loan interest too. The loan cost is lowered this way.

Citations

MarketWatch

marketwatch.com/story/how-to-beat-a-cash-bidder-in-the-housing-market-2011-04-13?pagenumber=2

WiseBread

wisebread.com/the-pros-and-cons-of-paying-cash-for-a-house

Short Sale Daily News

shortsaledailynews.com/short-sales-up-128-percent-in-2010/

Federal budget passes; fewer troops need military pay day loans

Congress has finally approved the federal budget for 2011. It took a long time, and there was quite the standoff. Many were afraid that a government shutdown would have sent military service members, among other federal workers, running for payday advance as they would not be paid during a shutdown. That said, a shutdown was thankfully avoided. The next trifle in government waits.

Problem shutdown would have brought on for deployed

For Fiscal Year 2011, Congress upheld a bill. There was a lot of stress about a government shutdown during all of this. Congress would have been paid still while several other government employees would have lost payment if there was a shutdown, which did not take place. Some would have been required to work still too. For instance, military members are always required to be on duty. They wouldn’t get paid during a shutdown though. Federal regulations prohibit service personnel from getting payday advance or comparable subprime credit products, and most service personnel, according to MSNBC, make close to the average wage in The United States, it would have been a devastating blow to military families.

Military personnel salaries

There are three in four individuals getting paid $31,000 or less a year in the armed services. The median earnings are at $36,587 in the United States according to the Bureau of Labor Statistics. The mean is at $44,901, making it a little higher. Military personal are making less than the average person no matter which scale you take. Service families tend to have debt issues, the Washington Post reported a 2008 Department of Defense survey saying. There are also problems with bankruptcy as shown in a 2004 study the Government Accountability Office did. It showed that bankruptcy was filed by 1.2 percent of military members that are on active duty. Federal court statistics indicates that more than 1.5 million individuals filed for bankruptcy last year, which is 0.5 percent of the United States population.

Service the country is not worth all that much apparently

The people who elect to serve this country do not get rewarded much for their efforts. If service members get too much debt, they can lose their security clearance making it harder for them. With a shutdown happening, there would have been other possibilities. Luckily, the people do not have to worry over it. The Naval Federal Member Bank offered low interest unsecured loans to members in case of a shutdown, like other credit unions and banks for federal employees have done in previous shutdowns.

Information from

MSNBC

msnbc.msn.com/id/42559366/ns/business-your_retirement/?gt1=43001

Washington Post

washingtonpost.com/blogs/blogpost/post/military-pay-faces-uncertain-future-troubling-for-financially-strapped-families/2011/04/08/AFHV311C_blog.html

Bureau of Labor Statistics

bls.gov/ncs/ocs/sp/nctb1346.pdf

U.S. Courts

uscourts.gov/uscourts/Statistics/BankruptcyStatistics/BankruptcyFilings/2010/0310_f2.pdf

Government Accountability Office

gao.gov/new.items/d04465r.pdf

Government Accountability Office

gao.gov/new.items/d04465r.pdf

Jesse Jackson Jr. says iPad is killing writing, costing jobs

Illinois Democratic congressman and iPad owner Jesse Jackson Jr. has turned on the gadget he used to love. Last month, Jackson gushed over how wonderful the iPad could be for the U.S. education system. Yet just Friday, Jackson said the iPad can be “responsible for eliminating thousands of American jobs.” Post resource – Jesse Jackson Jr. says iPad is killing publishing, costing jobs by MoneyBlogNewz.

Jackson claims goodbye to publishing

Seeing the textbookless campuses growing and the bankrupt Border Books annoyed the Illinois junior congressman. He states it is the iPad’s carelessness.

“What becomes of publishing companies and publishing company jobs?” Jackson asked the House. “What becomes of bookstores and librarians and all of the jobs associated with paper? Well, in the not-too-distant future, such jobs simply won’t exist.”

Jackson made even more comments. He said that iPad parts come too much from China.

“There is no protection for jobs here in America to ensure that the American people are being put to work.”

United States receiving help

According to Business Insider, there are some things Jackson isn’t considering. He is forgetting the iPad has helped out many industries outside of Apple. According to MarketCues, there is so much the iPad can do. It can help get billion dollar industries going. Publishers could have many myriad opportunities making up interactive textbooks without costing too much to students because of the e-readers and iPad.

It was expected that traditional publishing was to change. According to @Craigmod, the evolution was needed. It could be more helpful to have e-books to conserve on paper and give the books instantly. Morgan Stanley points out that with the over $2 billion in revenue on the iPad every quarter, over 65 percent of owners use the device to read books.

Changing all to tablets

Unlike Jesse Jackson Jr., publishers are likely to have to adapt. Amazon already sells more e-books than print books (per late 2010 figures). iPad users are in support of it. YUDU Media states that iPad users, in comparison to desktop computer browsers, will spend 30 times more time on websites such as Wired.com, VanityFair.com and GQ.com. There were more Wired.com iPad apps sold than Wired print editions. This is what late 2010 figures showed.

The commercial for the iPad says, “It’s already a revolution, and it’s only just begun.” There is no longer an invitation for Jesse Jackson Jr.

Articles cited

@Craigmod

craigmod.com/journal/ipad_and_books/

The Hill

thehill.com/blogs/floor-action/house/148879-jackson-an-ipad-for-every-schoolchild

Huffington Post

huffingtonpost.com/2011/04/17/jesse-jackson-jr-ipad-unemployment_n_850227.html

Market Cues

marketcues.com/blog/2010/02/will-apples-ipad-impact-the-printing-and-publishing-industries/

Neiman Journalism Blog

niemanlab.org/2010/02/the-ipad-business-model-for-news-strategies-publishers-must-embrace/

Publishing Perspectives

publishingperspectives.com/2010/11/simba-releases-statistics-on-ipad-e-book-reading/

Real Clear Politics

realclearpolitics.com/video/2011/04/15/rep_jesse_jackson_jr_blames_the_ipad_for_killing_jobs.html

TSTC Publishing’s Book Business Blog

tstcpublishing.wordpress.com/2010/02/26/ipad%E2%80%99s-potential-impact-on-textbook-publishing/

YUDU Media

slideshare.net/yudu/the-apple-ipad-trends-and-statistics

Economies evolve, pontificators pontificate

youtube.com/watch?v=D5X8W7MgbhM

Gas and oil determined to drop as prices pinch customer demand

As oil and gas costs rise continuously, consumers are reminded of the gas shock of 2008. While supplies of gas and oil in the U.S. are more than adequate, speculators have succeeded in betting the price of oil up 21 percent since the year started. But the law of supply and demand is anticipated to prevail when consumers can no longer afford to sustain demand for gasoline. Post resource – Oil and gas destined to fall as prices pinch consumer demand by MoneyBlogNewz.

Prices on oil

The sweet crude for May delivery went up to its highest amounts since Sept 2008 on the New York Mercantile Exchange. It went up to $111.90 a barrel. This week, gas prices were an average of $3.70 a gallon. That is the highest also since 2008, the summer anyway. Many studied the rise in oil prices. There were many factors that brought on it. With the government shutdown occurring in the near future as a possibility, the dollar is becoming very weak. This means everyone on a different currency is more willing to purchase commodities based off the dollar. It does not seem like the Libya conflict is about to end. The country has already stopped producing most of its oil. The United States is awash in oil considering consumers are spending increasingly more purchasing gas each day. The U.S. Energy Information Administration explained that there was an increase in oil inventories in the U.S. in the week that ended April 1. There was a 2 million barrel increase. Crude refi! nery input rose to more than 14 million barrels per day.

Forgetting about supply and demand

The United States used to blame OPEC for its oil shocks, however OPEC’s role in higher oil costs has been reduced. There was an oil conference in Paris where the United Arab Emirates oil minister spoke. He said that costs have hardly any change any longer because of OPEC. Mohammed bin Dhaen al-Hamli said that OPEC is providing the industry with the oil it needs. Traders are starting to bet on worst case scenarios which have caused a rise in oil costs, he said. The zero rates of interest from the Federal Reserve for hedge funds and pension funds are not helping. This just allows them to bet easier. Analysts estimate that due to speculators, oil futures are $15 to $20 higher than they should be. The next betting madness could be triggered by elections this weekend in Nigeria, where output of 2.2 million barrels a day might be disrupted by violence.

How much longer until an oil tipping point

United States customers may not be willing to pay much more for the gas and oil coming out. Demand for gas has gone down. In the last four weeks the drop was 3.7 percent. Unless there is another issue in the Middle East or in Nigeria, the oil prices might be getting to a tipping point. Before the Fed’s second quantitative easing plan (QE2) started last drop, oil was at about $90 a barrel. Crude oil may go down to $85 to $95 a barrel in June when oil and gas speculators change their minds.

Citations

Wall Street Journal

online.wsj.com/article/BT-CO-20110408-707562.html

New York Times

nytimes.com/2011/04/09/business/09markets.html?partner=rss&emc=rss

Industrial Fuels and Power

ifandp.com/article/0010617.html

Fortune

finance.fortune.cnn.com/2011/04/08/oil-at-the-tipping-point/

Personal loans do not trigger poverty

Jobs fight poverty. Having a job empowers customers to provide. But it seems that groups like the Anti-Poverty Coalition of Greater Dallas have the wrong idea regarding how jobs should be treated in the current economy. The coalition told the Dallas Observer that payday lending jobs must be sacrificed, supposedly in the name of fighting poverty. Source for this article – Killing payday lending does not fight poverty by MoneyBlogNewz.

Getting poverty taken care of

The coalition is hoping to create ways out of poverty. This is what CitySquare CEO Larry James said in a press release to the media:

“The Anti-Poverty Coalition of Greater Dallas is a new coalition that seeks to move 250,000 people out of poverty permanently by 2020 by coordinating efforts to keep people from falling into poverty and increasing pathways out of poverty,” writes James.

‘A treadmill of debt’

There’s a reason why the unsecured loan and quick installment loan industry is being attacked. James said that “a treadmill of debt” is created with them helping individuals into poverty. All zoning ordinances would be challenged with legislation like SB 253 and Texas HB 410 that would keep payday lenders out of the credit service organization category. By instituting a “strong zoning ordinance to decrease the clustering of payday and auto title lending stores,” the Anti-Poverty Coalition of Greater Dallas believes the shackles of poverty would lift from the wrists and ankles of the poor citizenry. It believes that many would be better off with payday lending taken away from them. There is nothing that speaks to Wall Street or bad spending habits being involved. In truth, eliminating personal loan comp! anies limits customer choice and costs Texas jobs, both dire consequences in light of the recession-ravaged economy.

An indirect attack, at best

Industry experts are worried that more would come if zoning ordinances requiring installment and personal unsecured loan outlets to be at least 1,000 feet apart with ordinances for instance SB 253 and HB 410 that there would result in being more. When it comes to getting poverty fixed, it does not really make sense to attack payday loan lenders with 36 percent Annual Percentage Rate caps which would end up shutting down the businesses and putting more people out of work.

What “anti-poverty” coalitions really want is not shown in the zoning attacks. Charitable groups like this might discover better things to do if they, including the Anti-Poverty Coalition of Greater Dallas, were only willing to understand the extant independent research that shows higher poverty in communities without short term installment loans.

Citations

Dallas Observer

blogs.dallasobserver.com/unfairpark/2011/04/new_anti-poverty_coalition_to.php

Payday Pundit

paydaypundit.org/2011/04/12/flawed-plan/

Texas HB 410

capitol.state.tx.us/BillLookup/History.aspx?LegSess=82R&Bill=HB410

Texas SB 253

capitol.state.tx.us/BillLookup/History.aspx?LegSess=82R&Bill=SB253

Texas Secretary of State

sos.state.tx.us/statdoc/faqs2800.shtml

Jobs fight poverty

youtu.be/w0v7OMt3vio