Saving on Mortgage Taxes

In the article, the author compares the mortgages taxes in New York State, Connecticut and New Jersey in the past four year. It is clearly to see that mortgage taxes are decreasing and New York State has a much higher tax rates compared to other boarding states. Plus, New York State has other related tax that will add the total cost up, such as mortgage recording tax. In addition, in all the three states, borrowers also need to pay the assignment fees. So a low loan balance may not be worthwhile to sign. So borrowers should be careful when they make investments.

Obama Tax Plan Would Ask More of Millionaires

President Obama called a new tax rate for people whose annual incomes are less than 1million. Even though he did not mentioned the specific rate, but this new tax policy is aimed to cut the wealth of millionaires. The administration is supposed to replace the alternative minimum tax policy that set up decades ago, but people are not optimistic that this policy will be written into the lax. President Obama’s this proposal is certain to draw opposition from the republicans, but I think it will discourage the investment, which is not good to the current economic situation.

Privatisation with Chinese characteristics

I find this article interesting because I think it is intriguing, the fact thatwe know so little about one of the world’s largest and strongest economies. China has been growing rapidly, but as we see in this article we aren’t exactly sure about what is going on in China. Their economy seems to be a mix of private and government-owned corporations, but there are still major sectors of industry controlled by the government such as China Construction Bank. When there are major corporations that are owned by government, corruption sets in. The question is with the high amounts of corruption in China will they be able to provide the world with a steady economy?

Dow Gains 4.7% in Week

This article sums up the weekly performance of Dow Jones. Currently Dow is at 11509.09 which is up 4.7% for the week.
One reason why Dow was up was due to the news that the Finance ministers of the Euro-zone along with Timothy Geithner, treasury Secretary of United States, were to discuss the possibility of the five major central banks boosting the money supply to help kick start the Europe economy.
As we were discussing in the class as to how the news released by central banks on its stance regarding the money supply influences future expectations, this is a classic example. European banks are on the surge of declaring bankruptcy because of the performance of the euro zone. As the leaders discussed that they wont let Greece default and make banks who have large exposure to these Greek debt, especially french banks which have been hit my moody's downgrading,  strong by pumping more money so that the risk of any default perishes; the markets reacted positively as investors gained confidence that the Fed would come to the rescue if banks are hit by any financial problems. As a result they turned their investments away from the Treasury bond and gold into the stock market even thou the central banks has not even pumped any money yet. This led the Dow Jones to rise and gold prices which were at their highest to fall.
The President of portfolio-management firm Farr, Miller & Washington puts it this way "In the short term, markets are encouraged that we are going to once again avoid a crisis,but there's no certainty of a successful outcome. The only certainty is that consequences will not be met for some time."

Let your stocks do the work.

In class recently, the topic of discussion has centered on interest rates. This article, by Brett Arends, shows us another way that a confident, and experienced investor can capitalize on historically low interest rates. The challenge is finding a stable or growing investment that has a high dividend yield. Although he talks specifically about paying your mortgage through dividends, i believe the underlying message is the last sentence of the article. " Any project where the return on invested capital beats the cost of capital has a positive net present value." And that positive net present value is achieved through recognizing, and utilizing stocks with high dividends. I like this article a lot, because the average college student is not incredibly informed about investing. This article shows us how cool investing can be, and how letting your money do the work for you is one of the smartest things that we can do.

Market Efficiency

This article highlights an example of free markets forces being more efficient than government subsidized programs. As the article points out, it seems silly to build high-speed rails when the rail system we are currently have is being underutilized. Most Amtrak rates are almost as high as airfare, while a bus ride is often a fourth of the cost. Not only that, but the bus market is diversifying and becoming far more efficient. Many people, especially college students, have a long list of complaints about Greyhound, which is notorious for long lines and delays. However, smaller bus companies are popping up that actually leave on time, often have internet and electrical outlets on board, and are affordable for almost everyone, even in the current recession. The fact of the matter is that the current passenger rail system is inefficient and costly, and there is no reason why those things would not be true if the trains ran faster. If people are going across the country, flying is still easier. And if they are not going that far? Buses are not only easy, but cheap.

Social Security pays millions to dead people

In this article, Blake Ellis discusses some of the major flaws of Social Security. While most people are worried that they will not be able to get Social Security payments when they retire, it is the case that millions of dollars worth of benefits are sent to people who have passed away. In fact, sometimes even after a death has been added to the master file, the Social Security benefits continue to be sent to their house.

The article goes on to give examples of these occurrences, as well as explain many other flaws in the Social Security system, such as overpaying or paying an incorrect amount to a beneficiary. It also discusses the reactions of families of those who received the benefits after their loved one had passed away.

Come on baby, let's do the Twist!

This article references "Operation Twist" which was thought-up in the early 1960's under the administration of JFK, then officially in a recession. Simply put, Operation Twist involved the Fed selling its short-term securities, and buying longer-term ones, which would drive long-term rates down, and send short-term rates up.

Currently in our economy, long-term interest rates are at record lows, and short-term rates are nearing zero. You might think that with this knowledge, firms would be borrowing left and right, expanding their businesses. However, it is just the opposite. Firm's are hesitant to borrow and invest in new capital etc. because people are just as hesitant to spend what little money they have left.

Implementing another "Operation Twist" in our current economy could help, but only very slightly (0.5% increase in economic growth according to Goldman Sachs). Different from the 1960's however, short-term rates are already near zero, so selling them off (in order to buy long-term ones and thus decrease long-term rates) might deal a lethal blow to our economy.

While 0.5% growth is better than nothing, it is not nearly enough to save this economy. With nearly all of their ammo (stimulus spending) exhausted, the Fed is loosing its power to turn, or in this case "twist," the economy around.

FedEx Eyes Big Boeing, Airbus Orders

FedEx is one of the largest and most popular shipping companies in the world because of their speedy service and reliability. This popularity has increased the demand for their service so much that they need to upgrade their airplane supply. This article explains how FedEx is trying to cooperate with Boeing and Airbus to complete a multibillion dollar deal increasing FedEx's supply of airplanes by 50. The deal may be delayed because of the economic uncertainties and the uncertainties of the US postal service, one of FedEx's largest client.