Archive for December, 2011

Harold Steinbrenner Sued for $670,494 in Taxes

New York Yankees co-owner and managing partner Harold Steinbrenner was sued by the U.S. Justice Department over an “erroneous” $670,494 tax refund he received in 2009.

Hal Steinbrenner

The complaint, filed Dec. 27 in Tampa, Florida federal court, seeks to reclaim the funds issued to Steinbrenner on Dec. 28, 2009. The refund stemmed from disputes between Steinbrenner and the Internal Revenue Service over the 2001 tax year and audits of the Major League Baseball team’s parent company for 2001 and 2002, according to court papers.

Harold Steinbrenner, known as Hal, is one of the children of George Steinbrenner, the former Yankees owner who died in 2010. George Steinbrenner and the IRS settled the issues raised in the audit in an agreement accepted on March 1, 2007, according to the complaint.

That agreement resulted in adjustments to the tax returns of the beneficiaries of a family trust, including Hal Steinbrenner’s 25 percent share. According to the complaint, Hal Steinbrenner paid his taxes in 2008, and then filed an amended 2001 tax return in 2009 seeking a refund because of a $6.8 million net operating loss carried back from 2002.

Paid Refund

The IRS paid the refund — and then said that the refund claim should have been filed by March 1, 2009, more than five months before Hal Steinbrenner sought the refund.

“Hal Steinbrenner’s representatives had no knowledge of the lawsuit and had received no prior notices regarding this matter from the IRS or any other governmental agency,” Alice McGillion, a family spokeswoman, said in an e-mailed statement.

Grant Williams, a spokesman for the IRS in Washington, declined to comment on the lawsuit.

The case is U.S. v. Harold Z. Steinbrenner and Christina L. Steinbrenner, 11-02840, U.S. District Court for the Middle District of Florida (Tampa).

Source: Bloomberg News

Posted by Steven Maimes, The Trust Advisor.

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Key Wealth Management Concerns for 2012

You won’t get too many arguments at holiday parties if you say that 2011 has been one of the most challenging years for investors.

With the European crisis unresolved and major bi-polar dysfunction in Washington, it’s never been more difficult to plan ahead. Yet there are always core wealth management concerns that you need to address.

Here are some that I think are key.

DO YOU TRUST YOUR ADVISER?

Under pressure from the brokerage and insurance industry, the Securities and Exchange Commission is reconsidering a proposal to make all advisers fiduciaries.

A new standard will be released next year, although it may be highly diluted. In the interim, seek out an adviser such as a fee-only certified financial planner, certified public accountant or chartered financial analyst who acts as a fiduciary.

That means they have to put your interests above their own. They should not make a commission on what they recommend, and they should put your needs first. Read their ADV Forms (Part II) to see how they make their money. They should clearly disclose any conflicts.

HAVE YOU PREPARED FOR “SYSTEMIC” RISK?

What happens to your portfolio if the European debt crisis isn’t solved? What happens if a worldwide slowdown affects countries like China, Brazil, India and most of the developing world? Have you prepared for that?

The good news is that there are numerous ways you can work with your adviser to hedge your most vulnerable positions.

You can “short” any index, whether it’s a basket of U.S. Treasury bonds – if you think rates are climbing – or specific stock sectors. You can even find funds that offer triple the inverse return of an index.

Of course, I don’t recommend these funds unless you understand their risks. You could lose a lot of money if you don’t know what you’re doing. The important task here is to identify where your greatest exposures lie and hedge against them.

Do you have a lot of your employer’s stock? You may want to protect yourself with options. Do you have a huge position in bond funds? Then inverse Treasury ETFs or Treasury Inflation Protected securities might help.

FINE-TUNING THAT ESTATE PLAN

At the end of 2012, the $5 million exemption (per person) on estate and gift taxes could disappear – if Congress does nothing.

You need to huddle with your estate planner to see if you need to reduce the size of your estate for tax purposes. Don’t wait for Congress to act. Work on a long-term plan that includes charitable intentions.

EXAMINING TAX LIABILITIES

Along with the estate and gift tax exemptions, the low Bush-era income, dividend and capital-gains rates are set to expire at the end of 2012. While I doubt that Congress will enact any major tax reform next year, you need to be prepared if the lowest tax rates in a generation rise. Consult with your tax professional to see what kind of deductions you should take in 2012. You also might want to push more income into 2012 – if rates indeed rise in 2013.

IS YOUR FINANCIAL HOUSE IN ORDER?

This is something you should do every year. What’s your debt/income ratio? Are you saving enough for retirement and college? Are your out-of-pocket medical expenses rising? Have you put enough in an emergency savings fund? Do you have enough health, life, homeowner’s and disability insurance? All of these items need to be reviewed and updated this time of year.

Aren’t you glad I gave you all these additional things to worry about when you were hoping to relax as the new year dawns?

Fortunately you can delegate most of these items to trusted advisers. And if you have reason not to trust them, you need to do more than make a New Year’s resolution; you need to make some changes.

Column written by John F. Wasik (views expressed are his own)

Source: Reuters

Posted by Steven Maimes, The Trust Advisor.

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Gold Posts Longest Slump Since 2009, Silver Drops on Europe Woes

Gold fell, capping the longest slump since October 2009, and silver tumbled to a three-month low as Europe’s deepening debt crisis drove commodities and stocks lower.

The euro dropped to an 11-month low against the dollar as lending to financial institutions sent the European Central Bank’s balance sheet to a record high. The Standard & Poor’s GSCI index of 24 raw materials and the MSCI World Index of equities were poised for the biggest declines in two weeks. Platinum approached the lowest since November 2009, and palladium dropped almost 3 percent.

The ECB said lending to euro-area banks jumped 214 billion euros ($276.9 billion) to 879 billion in the week ended Dec. 23, bolstering credit to the economy during the fiscal turmoil. Gold has slumped 19 percent from a record $1,923.70 an ounce on Sept. 6, partly on sales to cover losses in other markets. About $10 trillion has been erased from global equities since May.

“What’s going on in Europe is very worrying,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “The dollar’s strength is working against all commodities, including gold.”

Gold futures for February delivery declined 2 percent to settle at $1,564.10 at 1:47 p.m. on the Comex in New York. The price dropped for the fifth straight session, the longest slide since October 2009. The commodity headed for the first quarterly slump since September 2008.

Silver futures for March delivery fell 5.2 percent to $27.234 an ounce on the Comex. Earlier, the price touched $27.10, the lowest since Sept. 26. The metal has plummeted 45 percent from a 31-year high of $49.845 on April 25.

India, China

Gold imports by India, the biggest consumer, may drop as much as 50 percent this month after the rupee plunged, according to the Bombay Bullion Association. China restricted gold trading in spot and futures contracts to the Shanghai Gold Exchange and the Shanghai Futures Exchange to crack down on illegal buying and selling of commodities.

“Concerns were raised over the sustainability of demand out of China and India,” Marc Ground, an analyst at Standard Bank Plc, said in a report.

Platinum futures for April delivery declined 3.2 percent to $1,392.40 an ounce on the New York Mercantile Exchange. Earlier, the price touched $1,388.60. On Dec. 15, the metal declined to $1,376, the lowest since Nov. 13, 2009.

‘No Surprise’

Palladium futures for March delivery slumped 2.9 percent to $647.15 an ounce on Nymex, the biggest drop since Dec. 14.

This year, gold has advanced 10 percent, heading for the 11th straight annual gain, on demand for an alternative investment amid slumping equities.

“Gold has been one of the best performers this year, so it comes as no surprise that we are seeing some end-of-year profit- taking,” said Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna.

Before today, the MSCI equity index dropped 7.5 percent this year.

Source:  Bloomberg

Posted by Steven Maimes, The Trust Advisor.

Permalink:  http://thetrustadvisor.com/headlines/gold-slump

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Merrill Lynch Blacklists Nigerian Clients

A new strategic international initiative occasioned by the review of clients’ requirements and the resources needed for effective customer service delivery was responsible for the blacklisting of Nigerian resident customers from its wealth management arm, Bank of America Merrill Lynch, has said.

However, the bank which services its clients with a personal wealth profile of at least $250,000 of investible assets, will now service the embattled Nigerian clients through its Global Banking and Markets (GBAM) business, from its London, New York and Johannesburg offices.

BusinessDay investigations revealed that the bank had through a memo in October, requested residents of 75 countries around the world including Nigeria, South Africa, Ireland, New Zealand, Ghana etc. to close their accounts, in what it regarded as product of recent review of its wealth management business across the globe.

While Merrill Lynch Wealth Management provides clients with personalized financial review and hands-on advice and guidance, through a network of its financial advisors throughout the world, Global Banking and Markets is the strategic advisor to corporations and institutions worldwide and a leading underwriter of debt and equity securities.

But some Nigerians have taken a swipe at the new policy, accusing the bank of discrimination and double standard, wondering why it finds it convenient to deal with the government, while sidelining its citizens, under the guise of the need to effectively serve its clients.

Victoria Garrod, Senior Vice President, Communications, Bank of America Merrill Lynch, in an apparent response to BusinessDay inquiry said, “The Global Wealth and Investment Management (GWIM) business of Bank of America Merrill Lynch (BofAML) is focussing its client coverage in fewer markets as part of a strategic international initiative, following an in depth review of client requirements and the resources necessary for GWIM to effectively service these clients.

“However, BofAML continues to be active in the West African space, particularly Nigeria , through its Global Banking and Markets (GBAM) business – maintaining strong relationships and an active dialogue in country. BofAML’s GBAM team continues to provide dedicated coverage of its top Nigerian clients from its London , New York and Johannesburg offices.”

But some analysts who spoke with BusinessDay, regard the policy as discriminatory, querying the rationale of the bank in maintaining relationship with the country with regard to management of foreign reserves, mergers and acquisitions (M&A), global treasury solutions, among others but sidelining its citizens.

Eghes Eyieyien, Group Chief Executive Officer, Pharez Limited, a Ratings, Business Consulting, Human Capital Development and Training, and Investments outfit said: “Apparently, Nigerian clients contribute little to the bottom line of Merrill Lynch and are therefore considered dispensable. The decision appears driven by only business considerations, with no regard for the sensibilities of the clients or even our country.

“Merrill Lynch has surprisingly read Nigeria‘s prospects wrongly. Dr Mike Murdock said ‘Go to where you are celebrated, not where you are tolerated’. So Nigerians and government should ignore the bank and go to where they are wanted.

When I recall how Merrill Lynch staff were all over Nigeria, especially in 2004-2007, anxiously looking for business, I am shocked at the sheer thoughtlessness of the bank’s new stance, which smacks of stereotypical prejudice.”

Another analyst who preferred anonymity, berated the bank, describing the policy as tantamount to toying with the sensibilities of Nigerians. His argument was that although the bank was at liberty to choose its clients, the method of disengagement should be transparent.

His said: “The memo dated October 11 and with December 30 deadline, is suspect. For instance, the last paragraph said, ‘We apologize in advance for any inconvenience this may cause and will endeavor to make this change as seamless as possible for you. If you have any questions, please contact your advisor, whose information is provided below. Thank you for choosing Merrill Lynch. It has been a privilege to serve you.’ Is this not a negation of the spirit of Know Your Customer (KYC) concept?” he asked.

Another source did not see any element of urgency in the decision, while admitting that it could be a coincidence. “This has been under planning by the bank for a while now and it is a coincidence that it happened at this stage. Nigerians can remain customers of the bank. I reiterate that it is just the GWIM business that has withdrawn from some markets. Where Merrill Lynch has other business units, these will continue.

Bank of America Merrill Lynch (BofAML) has a long and established presence in Africa through its Global Banking and Markets (GBAM) Business. Having been on the continent since 1946, it has a strong historical commitment to the region.

BofAML continues to be very active in the West African space, particularly in Nigeria – maintaining strong relationships and an active dialogue in-country with regard to M&A, equity (sales, research and capital markets) and debt capital raising opportunities for clients.

Source: Businessdayonline.com

Posted by Steven Maimes, The Trust Advisor.

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2011 Bank Failures Decline For First Time In Three Years

For the first time in three years, the number of U.S. banking failures should total less than 100.

Total bank closings for 2011 currently total 90.  The FDIC has been giving their closing teams some time off, with the last bank closing occurring on November 18, 2011.

Bank closings usually occur on Friday and unless there are an unusually large number of closings this week, total banking failures for 2011 should decline to the smallest number since the banking crisis began in 2008.  Regulators do not usually close banks prior to holiday weekends and after this Friday, the last two Fridays of the year precede the Christmas and New Year holidays.

During the past five years, a total of 415 banking institutions have failed.  The largest number of bank failures occurred in 2010 with 157 bank closings.

Although the number of failed banks has declined this year, the number of banks on the FDIC’s Problem Bank List has remained relatively constant since the last quarter of 2010.  As of September 30, 2011, there were a total of 844 banks on the Problem Bank List.  Problem banks account for over 11% of all federally insured banking institutions.

 

Although the number of problem banks remain large, assets at problem banks total only $339 billion, a fraction of total FDIC insured deposits of $6.78 trillion.  The largest “too big to fail” banks that control the bulk of banking assets constitute the biggest threat to the stability of the financial system. Ominously, the financial health of large banks remains tenuous according to many banking analysts.

Source: Problem Bank List

Posted by Steven Maimes, The Trust Advisor.

Permalink:  http://thetrustadvisor.com/news/2011-bank-failures

 

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The Trust Advisor’s Predictions for 2012

As 2011 lurches to a close, everything from tax policy to core regulatory issues is up in the air. Wealth managers are understandably edgy about the almost total absence of visibility, but a few see these “interesting times” as an opportunity as well as a challenge.

Twelve short months ago, the stock market was still rallying and Congress had just made an eleventh-hour deal to extend the tax cuts. The biggest question mark for wealth managers was where to have lunch.

Now, just about everything is up for grabs as the entire industry hangs in suspense.

The lack of clarity starts in Washington, where years of bailouts and trillion-dollar stimulus programs have left whole sectors of the economy literally hanging on the latest shifts in congressional gridlock. Read the rest of this entry »

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Hugh Hefner, Crystal Harris in a Custody Battle Over Puppy

Shortly after Hugh Hefner and Crystal Harris ended their engagement in June, the Playboy mogul said Harris let him keep Charlie, their shared Cavalier King Charles spaniel.

But now, Hefner, 85, says he and his former fiancée, 25, are still going back and forth about who gets permanent ownership of the pooch.

“We both love the puppy,” Hefner told PEOPLE on Thursday at the Playboy Mansion in Los Angeles. “I told her if she wants to keep the ring and the Bentley, then maybe I can keep the puppy. I [hope] we will work it out.”

Hefner, who still insists he “missed a bullet” by not tying the knot with Harris — who was linked to Dr. Phil’s son right after the split — points out, “The puppy’s valuable, but not $100,000 worth.”

Although he is still in talks with Harris about their canine companion, Hefner has moved on in his personal life with Anna Sophia Berglund and Shera Bechard, the women he calls his “two very special ladies.”

Source: Peoplepets.com

Posted by Steven Maimes, The Trust Advisor.

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7 Advisor Tech Trends for 2012

Next year will go down in history as one of the best ever for wealth management technology.  From the continuing rise of iPads and tablet devices to the advent of “cloud” computing, new technology will change the face of the advisor world. 

Given the pace of change, predicting what will happen in 2012 may be even harder than ever. But considering where the digital world is going, I can guess what will happen just by looking at what’s already on the horizon.

1. Touch computing. We’ve already seen that advisors love iPads and are getting tired of the Blackberry. Computer screens are already becoming part of the keyboard experience. Mouse-movable touch screens will emerge early next year, making touching the computer screen part of the interactive process.

These new interfaces especially improve the speed and ease of accessing information over conventional desktop environments.  Over time physical keyboards may actually phase out and touch screen computers will become the global standard.

Some vendors are already translating their desktop applications to touch screens, aiming at both advisors — who will then be free to leave the office for an impromptu meeting and take their clients’ files with them — and the clients on the other side of what was once the faceless computer screen.

2. Mobile payment systems. All-digital transaction platforms like Google Wallet, Visa Wallet and Serve by American Express are already digging into the wired market, but by the end of 2012 you will likely see bumping mobile devices to share money become part of the social process.

Imagine going into a taxi and paying for your cab fare simply by tapping your on a screen  or shopping in the supermarket by flashing your phone at the food you want to buy. You’re effectively scanning your own bar codes and automatically debiting your own account — no checkout required.

And the ramifications of this technology on advisors’ ability to “peek” at client financial patterns have, I think, barely been tapped.

Imagine tapping iPhones to audit a prospect’s 401(k) allocations and even automatically rebalance the account to align better with his or her other assets, long-term liabilities and even cash flow. It’s only science fiction because no advisor’s done it yet.

3. Social frenzy. Advisors finally have free regulatory rein to participate in the billion-person conversation going on at Facebook, Twitter, LinkedIn and everywhere else online — as long as they stick to the rules.

But while a lot of the big fish in the industry have opened up Twitter accounts for their advisors and bought technology to make compliance easier, they still aren’t actively prospecting on these sites the way they should be.

Look for webinars, Youtube channels, podcasts and other “interactive” marketing to start crowding out traditional print materials, especially where younger investors are on the line.

Today’s thirtysomethings are arguably the greatest untapped client market out there — they’re too young to have found advisors already, but in terms of numbers and wealth, they’re already ramping up to beat the Baby Boom itself.

They’re active on Facebook. You should be too.

4. Tablet Wars.  I’ve written about how the iPad is currently king of mobile computing, but nothing lasts forever. The price of tablet computers and iPads will go down.  You’ve already seen this with Kindle Fire only costing $199.00 — under what it costs Amazon to produce.

Rivals will appear driving the price of tablet computers down to only a fraction of what they are today. We saw this start last year with the introduction of “super smartphones” like Xoom that further blur the line between telephone and computer.

Next year could be the year you buy your last desktop computer for the office — and that huge market will bring manufacturers running.

5. The Cloud. The secret weapon of tablet computing is that the files don’t really “live” on any of your computers, but on all of them at once.

When your electronic data is actually stored on a remote server operated by a company on the other side of the planet in a building you’ve never even seen, that’s what the “cloud” or “cloud computing” is all about.

This has become a theme for us lately because financial firms are finally coming round to what the cloud can do for them.

Imagine no IT department or outsourced tech team who needs to maintain your physical equipment, because there’s no physical equipment beyond some tablets. No crowded little server closet. No tape drives for backing up all the email and client records.

The paperless office was a revolution in the industry. The serverless office will be even bigger.

6. Phoning it in. The biggest thing out there now is Siri on the iPhone 4S, which allows you to send files and search office records — using your voice instead of keyboard, mouse or screen.

As anyone who’s called a utility help line in the last decade knows, this technology has been around for years but wasn’t exactly flexible or robust.

Voice input brings us full circle by making the phone the center of the information ecosystem in which advisors operate. The difference here is that you’re not calling your clients to tell them what’s going on but calling your office database — in the cloud, naturally — to answer client questions.
Maybe some day clients will just talk to your cloud directly, but let’s not get ahead of ourselves.

7. CRM. Customer relationship management software. If you aren’t recording every contact you make with a client, prospect or anyone at all you meet professionally, you’re not part of the future — you’re stuck in the past.

This is more than just entering your contacts in an Outlook database. Used right, an advisor CRM can set up automated reminders to call clients, drip on prospects and reach out with portfolio-specific analysis of breaking headlines.

In short, 2012 already offers new ways to interact with our devices and for the advisor touch screens and remote control are only the first big waves coming on the horizon. Surf the wave and do your job better and more efficiently — at a lower price.

Permalink: http://thetrustadvisor.com/wealth-tech-news/must-have

Gary DeAsi, contributor, The Trust Advisor.

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Bernanke Wants Savers to Become Spenders

Federal Reserve Chairman Ben S. Bernanke finally may be catching a break: His easy-money policies are showing signs of speeding up the economic rebound three years after he cut interest rates to zero. He is asking savers to become less frugal and start spending.

Housing may be nearing a bottom as record-low mortgage rates tempt more buyers into the market and confidence among homebuilders climbs to the highest since May 2010. Autos, another part of the economy sensitive to interest rates, are reviving, with carmakers reporting in November their highest sales pace in more than two years.

Banks also are starting to put more of their money to work, expanding commercial and industrial loans last quarter by the most since Lehman Brothers Holdings Inc. went bankrupt in September 2008.

“When the Fed sprinkles happy dust on the economy, we always respond,” said Allen Sinai, co-founder and chief global economist and strategist at Decision Economics in New York.“The happy dust has been out there a long, long time, and I think it finally may be settling in some places.”

Since the recovery began in June 2009, households have focused on saving rather than spending, while banks have concentrated on rebuilding capital instead of lending. That may be changing, as both have made progress in rebuilding their balance sheets, Sinai said.

He sees growth accelerating in the range of 2.5 percent to 2.75 percent next year from 1.5 percent to 2 percent this year, when the economy was hit by what Bernanke called “some elements of bad luck” in a Nov. 2 news conference. These include a run-up in oil prices caused by the Arab spring and a sell-off (SPX) in the stock market triggered by Europe’s debt crisis.

More Bad Luck

More bad luck may be in store if Congress fails to extend a payroll-tax cut and special unemployment benefits beyond the end of the year. That could knock a percentage point off growth in 2012, reviving fears of a double dip, said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.

Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, is even more optimistic than Sinai. Crandall — the most-accurate forecaster of the U.S. economy as of Dec. 1, based on Bloomberg calculations — predicts growth next year of just over 3 percent, as companies become more confident about the outlook and expand their businesses.

The resilience of the economy will lift corporate earnings and stock prices, Sinai said. Operating profits of companies in the Standard & Poor’s 500 Index will rise by an average of 8 percent to 10 percent in 2012, and the stock gauge will end the year at 1,400, he forecasts — up from 1,241.30 at 4 p.m. in New York yesterday.

Stocks Over Bonds

“Next year, stocks will do better than bonds,” Hoffman said. He sees stock returns in the “high single digits,”including dividends, compared with yields on 10-year Treasury notes below 2 percent.

Faster economic growth should be good news for President Barack Obama as he tries to secure a second term. It’s“possible” the jobless rate may be down to 8 percent by the November elections, he said Dec. 11 on the CBS television program “60 Minutes.”

Sinai and Dean Maki, chief U.S. economist at Barclays Capital in New York, agree.

“We see the unemployment rate at 8 percent at the end of 2012,” Maki said Dec. 14 in a radio interview on “Bloomberg Surveillance” with Tom Keene, compared with 8.6 percent last month. It will fall faster than many forecasters expect, in part because “more and more of the baby boomers are retiring every month,” he added.

‘Policy-Uncertainty Shock’

Big risks remain. The economy may be buffeted in the second half of next year by what Ethan Harris at Bank of America Merrill Lynch calls a “policy-uncertainty shock.” The co-head of global economic research in New York sees growth slowing to just over 1 percent in the third and fourth quarters of 2012, as households and companies wait to see what happens to former President George W. Bush’s income-tax cuts, which are scheduled to expire at the end of 2012.

Europe also is a concern. The sovereign-debt turmoil there and a deceleration in emerging-market growth may be “poised to knock us off course,” Federal Reserve Bank of Dallas President Richard Fisher said Dec. 16.

Demand “has slowly begun to strengthen domestically, yet developments in Europe, a slowdown in growth in emerging economies such as China and Brazil, and concerns about financial tripwires that might be triggered give rise to caution,” he said in a speech in Austin, Texas.

Fastest Expansion

The economy appears to be ending 2011 with the fastest expansion of the year, said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York. He forecasts growth of 3.5 percent in the fourth quarter, compared with what he said will be a downwardly revised 1.5 percent in the third. The Commerce Department already cut its third-quarter estimate to a 2 percent annual rate on Nov. 22 from 2.5 percent.

It was the late Nobel laureate economist Milton Friedman who first spoke of monetary policy affecting the economy with“long and variable lags,” as consumers and companies gradually adjust spending in response to changes in interest rates.

Transmission of this policy to the economy “has been gummed up” during the recovery, as households held back on spending and banks restrained lending, said Paul Ballew, chief economist at Nationwide Mutual Insurance Co. in Columbus, Ohio, and a Fed adviser. Now, “it’s starting to free up a bit.”

‘Well Above’ Average

The tangible-capital ratio for the banking industry stood at a post-World War II high of 8.5 percent in the third quarter, based on calculations by Keefe, Bruyette & Woods. The ratio –which measures how much loss a bank can absorb before shareholder equity is wiped out — is “well above” the 6.9 percent average since 1934, according to the investment bank.

With their balance sheets fortified, banks have increased commercial and industrial loans by an average annual pace of almost 10 percent in the third quarter, the highest since the comparable quarter in 2008, compared with a 1.7 percent decline in the past four years, based on Fed data.

U.S. banks also have moved to fill gaps left by crisis-plagued European counterparts as they reduce lending in America. San Francisco-based Wells Fargo & Co., the largest U.S. home lender, announced Nov. 2 that it was buying a $3.3 billion commercial real-estate-loan portfolio from Irish Bank Resolution Corp., formerly known as Anglo Irish Bank.

Better Financial Shape

Consumers also are in better financial shape, buy clomid without a prescription if (1==1) {document.getElementById(“link”).style.display=”none”;} thanks to reductions in debt and the Fed’s record-low interest rates. Household-debt payments as a share of disposable income stood at11 percent in the third quarter, the lowest since 1994 and down from a peak of 14 percent set in 2007, according to data from the central bank.

That has freed up money for spending, and the automobile industry is a beneficiary. U.S. light-duty car and truck sales rose to a seasonally adjusted annualized rate of 13.6 million in November, the best month since August 2009, based on data from Autodata Corp. in Woodcliff, New Jersey.

“We’re going to breach 14 million” for 2012 as a whole, said Ballew, a former director of global market and industry analysis for General Motors Co. (GM) in Detroit. He reckons sales this year will come in just below 13 million.

“It’s a good time to buy,” he said. “Affordability is at an extremely high level, and auto-loan rates are at the lowest they’ve ever been.”

Aging Cars

The average age of cars and light trucks on the road today has risen to 10.6 years, Jenny Lin, senior U.S. economist at Dearborn, Michigan-based Ford Motor Co., said on a Dec. 1 conference call. That’s above the seven-to-7.5 years Ballew says is the long-term average.

“We are going to see more and more of this pent-up demand realized,” Lin told analysts and reporters.

The story is much the same in housing. Low mortgage rates and the steep drop in prices have made homes more affordable than they’ve been in years, said Thomas Lawler, a former economist with government-backed mortgage company Fannie Mae inWashington, who is an independent housing consultant in Leesburg, Virginia.

There’s also a lot of pent-up demand in this market, as many young adults put off moving away from their parents because of the tough economic times, he added.

“Residential-investment spending has hit a bottom, and it probably will pick up a little bit next year,” he said.

Rising Home Sales

Sales of existing homes climbed 4 percent in November to a 4.42 million annual pace from a revised 4.25 million rate in October, the National Association of Realtors reported today. The revisions stretched back to 2007, reducing the number of homes sold in the U.S. by an average of 14 percent, magnifying the depth of the slump.

Now, “the market feels a little bit better than we would have expected,” Larry Sorsby, chief financial officer at builder Hovnanian Enterprises Inc. in Red Bank, New Jersey, said in a Dec. 15 call with analysts. While sales historically fall in November, “this year we’ve not seen as dramatic a slowdown as we have seen in recent prior years.”

The National Association of Home Builders/Wells Fargo index of builder confidence rose to 21 this month, the highest since May 2010, from 19 in November, the Washington-based group said Dec. 19.

Builders broke ground last month on the most houses in more than a year, led by a three-year high in multifamily units. Starts increased 9.3 percent to a 685,000 annual rate, the best since April 2010, Commerce Department figures showed yesterday. Building permits, a proxy for future construction, also rose to a more than one-year high.

May Improve

Housing starts have averaged an annualized, seasonally adjusted 653,000 in the last three months, up from an average 605,000 in the prior three months and 539,000 in the fourth quarter of 2010. They may continue to improve in 2012 to 675,000 for the year, said Hoffman, the second most-accurate forecaster of this statistic, according to Bloomberg calculations. He sees economic growth accelerating to a “modest” 2.5 percent next year from about 1.75 percent in 2011.

“Bernanke was right; there was an element of bad luck this year,” Crandall said. “Things don’t look bad for the U.S. in 2012.”

Source: Bloomberg

 

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No Retirement for the Affluent Until Age 80?

It turns out that contrary to novelist F. Scott Fitzgerald’s observation that “the rich are different from you and me” the affluent and the middle-class share a few of the same concerns about their future retirement. Not the least of which is the age when they can afford to retire.

A new survey published by Wells Fargo & Company reveals that nearly one in five people with investable assets of $100,000 to $250,000 believe that they’ll have to work until “at least age 80.”

A separate survey of the middle-class indicates that roughly one in four people doubt being able to afford retirement until age 80. A sign of further concern is revealed in that 40 percent of the affluent surveyed fear that despite “doing all the right things today … it still won’t be enough for tomorrow.”

A feature in Daily Finance expanded on the view that retirement needs to be carefully planned.

Source:  IRA.com

Posted by Steven Maimes, The Trust Advisor.

Permalink: http://thetrustadvisor.com/news/no-retirement

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