Women: Take Control of Your Money
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
On my very first outing on the Staten island Ferry, I met this lovely women who candidly said she really doesn't know what's going on in her financial life. It took only a a few moments before we were pinky-swearing that she would investigate where her money is invested, rather than leave all of the details solely to her husband.
Click here to watch the video on CBS MoneyWatch.com.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
How to Talk to Your Kids About Money
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Our newest blogger, Dan Kadlec, author of "Bank of Dad," joined us on "Ask The Experts" to educate us about how to talk to your kids about money. The good news is that the answer may be simple: play poker!
Click here to watch the video on CBS MoneyWatch.com.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
What International Investors Need to Know
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
If you invest in international funds, ETF's or stocks, you need to watch this interview with Ian Bremmer, author of the new book The End of the Free Market.
Click here to watch the video on CBS MoneyWatch.com.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
3 Culprits for Sagging Employment
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Another morning of data, another reminder that our current economic woes boil down to one word: jobs. This morning, the Labor Department reported that in the week ending July 24th, weekly jobless claims fell by 11,000 to a seasonally adjusted 457,000, from the previous week's revised figure of 468,000. The four-week moving average was 452,500, a decrease of 4,500 from the previous week's revised average of 457,000.
iStockphoto
While market participants are eager to latch on to any indication of good news on the labor front (US stocks are trading higher this morning, but mostly due to earnings, I think), the sad truth is that the 4-week average has been stuck at a stubbornly high level for the past eight months and the 4-week average is high relative to historic norms. In other words, it's what you already know: the jobs market still stinks.
A friend recently asked me, "Why is this 'the jobless recovery?'" I think the answer is pretty clear. Imagine you are a business-owner who actually survived the Great Recession. You may have had to reduce your income or even lay off workers during the downturn. Now as the economy is finally growing, you are finding that (a) your income is inching back up, though not at the level it was pre-recession and/or (b) your company is running just fine with fewer employees.
Continue »Skimp or Splurge?
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Looking to trim costs? Sometimes it makes sense to skimp, while there are plenty of times when you should splurge. Here are three examples:
Our bloggers have been busy identifying other areas to skimp and splurge-check out these suggestions!
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Financial Infidelity on the Rise
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
When I saw this post by Kathy Kristof, I knew that I had to share it with CBS3. Kathy is on to something when she says that money turns some spouses into liars. Watch the whole video-at the end I give couples a tip that comes from personal experience!
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Jill Schlesinger: Tuesday Market Note
BP CEO Tony Hayward, right, followed by BP Managing Director Bob Dudley, leave the White House in Washington, June 16, 2010.
/ AP/Manuel Balce CenetaThe announcement came after BP reported a $17.15 billion second quarter loss due to the more than $32 billion in charges related to the spill in the Gulf of Mexico. The company plans to sell about $30 billion in assets to replenish its coffers. Shares of BP are up 0.7% in the premarket.
Tony Hayward Out at BP?
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Nearly 100 days after the Deepwater Horizon explosion and oil spill (April 20th, to be exact), BP will likely replace its PR-challenged CEO Tony Hayward. (My favorite of his gaffes was: "There's no one who wants this thing over more than I do, I'd like my life back.")
Tony Hayward
/ AP Photo/Haraz N. GhanbariThe company just posted this denial of the change, but it stands to reason that Hayward probably should have been axed a while ago. Will Hayward's ouster matter? The short answer is YES.
The company must move into the post-spill era with a new tone from the top. Of course Hayward wasn't the sole cause of the disaster, but he is the embodment of it. In many ways, it's reminiscent of some Wall Street executives-Merrill Lynch's Stan O'Neal or Bank of America's Ken Lewis come to mind. While the Board of Directors and senior management of every embattled company is responsible for the steering the company through a crisis, only the CEO can take the fall.
It's expected that Managing Director Robert Dudley will replace Hayward as CEO and the announcement will likely come when the company releases its earnings tomorrow. If so, Dudley would be the first American to run the company. Currently, Dudley, is charged with managing the company's cleanup in the Gulf and more importantly, to repair the firm's shaky reputation. Dudley ran Amoco Corp.'s Russian operations from 1994 to 1997, before its 1998 acquisition by BP.
From the individual investor's perspective, the lessons from BP are clear. Now we have a management lesson to boot: when a crisis emerges, the CEO must articulate the facts clearly; accept responsibility on behalf of the company; and provide solutions for how the company plans to address the crisis. Hayward failed on all three, which is why he should lose his job.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Monday Market Note: Investors' Anxiety over Recovery (Somewhat) Soothed
Specialists Evan Solomon, left, and Mario Picone watch their screens on the floor of the New York Stock Exchange, Friday, July 23, 2010.
/ AP Photo/Richard DrewInvestors are beginning to consider that there will be enough growth in the second half of the year to maintain the economic recovery.
Nerves were also soothed when the results of the European bank stress tests were better than anticipated: 7 of 91 banks failed, although the tests appeared to be rigged, or at the very least flawed, because they didn't measure the risk of a sovereign default. How would these banks do if a country like Greece defaulted? That answer will have to wait ...
7 European Banks Fail Stress Test
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
AP
7 of 91 European banks failed the stress tests with an overall capital shortfall of 3.5 billion euros ($4.5 billion). Coming into the day, it was expected that 10 banks would fail.
Investor reaction was muted for a good reason: the tests were rigged! The CEBS stress tests didn't include a risk that many believe still persists: that of a sovereign default. How would these banks do if a country like Greece defaulted? Perhaps we'll never have to know, but when the game is rigged for a specific outcome, it sure is tough to trust the box score.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Analysis: Fed Can Still Help the Economy
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
"No Fed Plans To Provide More Support, Bernanke says," so said The New York Times. The article described Federal Reserve Chairman Ben Bernanke's semi-annual testimony before the Senate Finance Committee yesterday.
Ben Bernanke
/ CBSWith a good night's sleep, investors are rethinking their reaction to Bernanke's comments this morning, driving stock indexes higher. In fact, the Fed still has plenty of ammunition to stimulate the economy and Helicopter Ben is just the guy to do it. (This is a reference to Bernanke's famous 2002 speech, when he said that to fight deflation, "the U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." He was referring to a statement made by economist Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.)
With interest rates at zero, some argue that the Fed is out of bullets. Really? Not to Helicopter Ben! To wit, the Fed can:
buy other government debt, which would lead to lower interest rates
delay selling $1.25T of mortgage-backed securities it owns
announce long-term intentions regarding short-term rates
raise the long-term inflation target
Don't count out Ben's ability to be creative. This was the guy that pulled out all the stops in the heat of the financial crisis and who has spent his career preparing to fight the bogey man called deflation. When Bernanke says that the Fed is prepared to act, perhaps we ought to trust that short of a helicopter, the Fed Chief will do everything he can to infuse the economy with money.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
AUDIO: Financial Reform ... in Two and a Half Minutes
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
There's nobody better than Charles Osgood to boil down 2300 pages of regulatory reform into a 2 1/2 minute radio segment.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Retirement: Don't Leave Free Money On The Table
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
In this episode of "Editor-At-Large", I practically beg a young worker to use his employer's retirement plan, if only to get the match! Why are people so willing to leave free money on the table?
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Strategic Foreclosure: Should You Walk Away from Your Mortgage?
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Last week, I talked to CBS3 about the staggering number of foreclosures that are likely this year. Add to that data yesterday's disappointing NAHB home builder confidence index, which fell to the lowest level since April 2009, and it's clear that the recovery in housing is clearly going to years.
The prospects are bleak for many homeowners, including those who can actually afford to meet their monthly obligations. That's why some are considering strategic foreclosures, or just walking away from their mortgages. Here's the skinny on the trend:
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
Goldman Couldn't Win and SEC Couldn't Lose
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
I've been thinking about the Goldman Sachs $550 million settlement with the SEC and trying to really figure out what happened. Clearly Mary Schapiro and Robert Khuzami wanted a big win on this one, which is why the agency went out of its way to describe it as the largest settlement ever.
AP Photo/Richard Drew
While $550 million does seem massive, it isn't the biggest in inflation-adjusted terms-that prize goes to Michael Milken. And yes, while the $550 million represents a mere fortnight's worth of profits for Goldman, the stock has been shellacked since the original charges, erasing nearly $15 billion in market cap.
Maybe CEO Lloyd Blankfein traded his job for a settlement, or maybe it was a plain old business decision: the firm didn't want to be involved in a protracted and damaging trial that would continue to erode its reputation. The firm didn't admit or deny the allegations, but it did acknowledge that its marketing materials for the deal in question should have provided more disclosure.
To review, the SEC charged Goldman with violating SEC Rule 10(b). To establish a violation, the SEC had to demonstrate material misrepresentation or omission in connection with a purchase or sale of a security. Materiality is tricky-for information to be viewed as material, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the total mix of information made available.
The SEC alleged that Goldman helped structure an investment that was designed to fail and sold the flawed investment to its clients, who ultimately lost hundreds of millions of dollars; Goldman knew it couldn't sell the deal without a seemingly objective portfolio agent; and Goldman didn't disclose to its clients that hedge fund manager John Paulson had a short interest or that he participated in the portfolio selection process.
From the beginning, Goldman maintained that all purchasers were sophisticated and knew something that every player in these complex markets had to know: there's always a large short on the other side of the deal. Synthetic CDOs can't exist unless a seller goes short precisely the amount a purchaser goes long. The buyers therefore had to know that there was a short in the market. Goldman argued that way back in 2007, Paulson wasn't even viewed as a particularly knowledgeable participant (that was before his big shorts paid off big time) and therefore his connection to the deal would have been particularly irrelevant.
Interesting that in retrospect, it probably wouldn't have swayed anyone to have the Paulson connection disclosed. In fact, if all facts were properly disclosed, investors would have known that Goldman was long, Paulson was short, and that Paulson had participated in the portfolio selection process. (Goldman may have been short elsewhere, but in this deal, they were long.) Considering that at the time, Goldman had more gravitas than Paulson, perhaps the immateriality defense could have held up in court.
That said, the SEC had lots of evidence, including incendiary e-mails and testimony that Fabrice Tourre had told buyers that Paulson was long, when he was in fact short; and that Paulson had participated in creating the product he was shorting.
Still, the road to prove the case for each side would have been fraught. Goldman determined that even if it could win in the court of law, it couldn't in the court of public opinion and the SEC couldn't risk losing to Goldman, which would have made the organization look foolish and impotent.
Some may view this as the perfect settlement: both sides feel that they were wronged, but determined that a concrete, albeit disappointing, solution far exceeded the uncertain future.
(CBS)
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.
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