Financial FYI: Stock Market Returns Before and After An Election Year, Onion Futures, Wind Power, Lunch With Warren Buffet, 70 out of 78 Mutual Fund Categories Lose Money
Financial FYI: Creating Financial Buzz With Interesting Financial News, Statistics, and Research.
Election Year Stock Market Returns And Projections
Ever since Harry S Truman trumped Thomas E. Dewey in 1948, the economy, the unemployment rate, and the stock market have done better on average in the year running up to the election, only to fall off the following year. The Standard & Poor’s 500-stock index has averaged a 9.69% gain in an election year, and only a 4.01% increase the year after. Source: Businessweek.com. Full Story
An Interesting Story On Onion Futures
Back in 1958, onion growers convinced themselves that futures traders (and not the new farms sprouting up in Wisconsin) were responsible for falling onion prices, so they lobbied an up-and-coming Michigan Congressman named Gerald Ford to push through a law banning all futures trading in onions. The law still stands. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April. Source: Money.cnn.com. Full Story
Wind Power
Wind power, while still just a speck in America’s total energy mix, is no longer some fantasy of the Birkenstock set. In the U.S., more than 25,000 turbines produce 17 gigawatts of electricity-generating capacity, enough to power 4.5 million homes. Total capacity rose 45% last year and is forecast to nearly triple by 2012. Right now, only 1% of the country’s electricity comes from wind, but government and industry leaders want to see that share hit 20% by 2030, both to boost the supply of carbon-free energy and to create green-collar jobs. Source: Businessweek.com. Full Story
Lunch With Warren Buffet Costs $2.1 million
A Chinese investment fund manager won the chance to have lunch with billionaire Warren Buffett by bidding $2.1 million in the most expensive charity auction ever held on eBay. Zhao Danyang of the Hong Kong-based Pureheart China Growth Investment Fund won the auction, which ended Friday evening with a bid of $2,110,100. Previously, the most expensive charity item ever sold on eBay was a Harley-Davidson motorcycle autographed by celebrities that Jay Leno offered in 2005 for tsunami relief. It brought $800,100. Source: Money.CNN.com. Full Story
70 out of 78 Mutual Funds Categories Lose Money
According to Lipper, 70 of the 78 fund categories it tracks have lost money year-to-date through Thursday. Within each group, though, are funds that have weathered the storm admirably. We are sure both camps will be happy to put this time period behind them and chalk it up to a lesson learned, regardless of whether they made money or not. Source: Smartmoney.com. Full Story
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Financial FYI: Increasing Food Costs, Michigan Leads US Jobless Rate, Home Price Index Falls Again, and Criminal Apects of the Credit Crunch
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Food Prices Continue To Climb
After the prices of wheat and eggs soared during the past year, supermarket shoppers now find they’re spending an extra quarter for each pound of pasta. Four sticks of margarine cost an extra 60¢. Even the cold glass at the frozen food section has become foreboding: Ice cream is up nearly 6%. Forecasters expect food prices to rise 4.5% to 5.5% overall in 2008. Full Story
Michigan Leads U.S. Jobless Rate
Michigan, once the center of America’s industrial heartland, now holds a more dubious distinction: It leads the U.S. in joblessness. The state’s unemployment rate hit 8.5% in May. That’s up 2 percentage points from April, and compares with a figure of 5.5% for the whole U.S. in May. Source: BusinessWeek.com. Full Story
Record Low Home Price Index
The S&P/Case-Shiller 20-city Home Price Index fell to a record low of 15.3% on a year-over-year basis, and was down 1.4% from March. The 10-city index was down 16.3% year-over-year and 1.6% for the month. Some 10 million homeowners are now underwater, according to Moody’s Economy.com, and that number will continue to grow as home prices plummet. Las Vegas prices plunged 26.8% compared with April of 2007, the worst drop among the 20 cities Case-Shiller covers. Prices there fell 2% in April. Other hard hit cities include Miami (down 26.7% year-over-year and 4.1% in April), Phoenix (25% and 3.4%) and Los Angeles (23.1% and 2.2%). Source: Yahoo finance. Full Story:
Criminal Aspect of the Credit Crunch
Two former Bear Stearns hedge fund managers, Ralph Cioffi and Matthew Tannin, were indicted Thursday by a federal grand jury on charges they intentionally misled investors in two funds that collapsed last summer under the weight of wrong-way bets on mortgage-backed securities. Source: money.cnn.com. Full Story.
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Financial FYI: Credit Card Late Payments, Mobile Banking Growth, Heating Oil Prices Set To Increase, 401(k) Automatic Enrollment Report, Second Quarter Earnings Forecast, Black Monday Statistics, CFO Report
Financial FYI: Creating Financial Buzz With Interesting Financial News, Statistics, and Research.
Credit Card Late Payments Increase
A study last year by Consumer Action found that late-payment fees had gone from an average of $13 in 1995 to $28 in 2007. The highest is $39. One tardy payment, even by a few hours, and you can get slapped with a penalty interest rate as high as 32%. Source: Money.cnn.com. Full Story
Mobile Banking Growth
Mobile banking is set for rapid growth over the next three years with the number of global mobile banking transactions predicted to ramp up from 2.7 billion in 2007 to 37 billion by 2011, according to analyst house Juniper Research. The analyst forecasts 41.5 billion mobile financial service (MFS) transactions will be made by the end of 2011. Source: Businessweek.com Full Story
Senate Mortgage Bill
The Senate is poised to vote as early as this week on a package of housing initiatives that would mark lawmakers’ most comprehensive effort yet to deal with record numbers of foreclosures and a housing slump that is weighing on the economy. The Senate bill would expand the size of single-family mortgage loans that can be acquired or guaranteed by Fannie Mae and Freddie Mac to $625,000 from the $550,000 set in an earlier bill approved by the banking committee. Source: Wall Street Journal. Full Story
Heating Oil Prices Set To Increse
Residential heating oil prices are projected to rise 29% to $4.46 per gallon in the fourth quarter of 2008 from $3.16 per gallon during the same period last year, according to the Energy Information Administration. Those who use natural gas to heat their homes (a fair majority at 48% of U.S. households) shouldn’t expect to fare much better. The EIA projects the average price of natural gas to rise 27% year over year (from $12.65 per thousand cubic feet in the fourth quarter of 2007 to $17.21 per thousand cubic feet in fourth quarter of 2008). Source: Smartmoney.com. Full Story
Art Report
Sotheby’s spring contemporary art auction on Wednesday evening was the most lucrative auction in the company’s history, blowing past the high end of Sotheby’s estimate with sales totaling $362 million, including a record $86.3 million for a 1976 Francis Bacon triptych that had been expected to sell for about $16 million less. Such extravagant consumption is an optimistic sign for art dealers. Source: money.cnn.com. Full Story
401(k) Automatic Enrollment Report
A survey of 190 mid- to large-size companies by the consulting firm Hewitt shows that a growing number of firms offering 401(k) plans are automatically enrolling employees in the plan, automatically increasing worker contributions and sometimes even automatically rebalancing their accounts so they are not overexposed to any particular type of investment. Source: Kiplinger.com. Full Story
Second Quarter Earnings Forecast
Second-quarter earnings for S&P 500 companies are forecast by analysts to fall 9 per cent, according to Thomson Reuters. Source: ft.com. Full Story
Black Monday Statistics
Three of the five best days the Dow Jones Industrial Average has ever experienced occurred in one 10-day stretch in 1987: Oct. 20 (up 5.88%), Oct. 21 (up 10.15%), and Oct. 29 (up 4.96%). But that was not a great week for investors. It came in the wake of Black Monday — Oct. 19, 1987, the single worst day in the Dow’s history — when, by 4 p.m. ET, the market became $500 billion less valuable. The Dow dropped 22.61% that day and followed it up a week later with an 8% drop — the second-largest single-day drop in history. Source: Fool.com. Full Story
CFO Report
Economic woes are expected to continue until at least mid-2009, and things may get worse before they get better, according to a quarterly survey of chief financial officers. The quarterly Duke University/CFO Magazine Global Business Outlook study found 71% of more than 1,000 CFOs surveyed said the U.S. economy will not begin to rebound until 2009. And 54% think the turnaround will happen by next summer at the earliest. Source: Money.cnn.com. Full Story
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Financial FYI: Record Number of College Applications, Blue Gold, Economy Hits Nonprofits Hard, Life Expectancy, How Long Will You Life?
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College Problems: Record Number of Students and No Financing
For families with children heading off to college, this has been the year from hell. First, a record number of applicants made 2008 the most competitive year ever for college admissions. Then more than 100 lenders in the government college loan program have pulled out of the market. Private lenders are leaving the college market too – 27 so far. Those who remain are making it tougher to qualify for loans, while jacking up rates and reducing discounts. Source: Money.cnn.com Full Story
Blue Gold: Water Is The Next Big Commodity
If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller who owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year. By 2030 nearly half of the world’s population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development. Source: Businessweek.com Full Story
Philanthropy Hit Hard By Bad Economy
In 2007, corporate foundations increased their giving by 7%, and donated approximately $4.4 billion, according to the Foundation Center, a New York philanthropic research organization. Full data for 2007 are not yet available, but in 2006 total nongovernment philanthropic donations surpassed $295 billion, a 4.2% increase from the previous year, according to the Giving USA Foundation, a philanthropy consulting nonprofit in Glenview, Ill. The U.S. has nearly 1.5 million nonprofits, and while most donations (75.6%) are from individuals, the reverberations from Wall Street’s challenging year will directly affect nonprofits. Source: Businessweek.com Full Story
Foreclosures Hit Record Number in May
The housing crisis grew worse in May, as more than 73,000 American families lost their homes to bank repossessions, up a staggering 158% from the 28,548 households that were dispossessed in May 2007. Source: Money.CNN.com Full Story
Life Expectancy: How Long Will You Live?
Life expectancy in the United States is about 78. The Centers for Disease Control and Prevention announced last year that a child born in the United States in 2005 can expect to live 77.9 years. As of 2004, the most recent year for which detailed statistics are available, a 60-year-old man could expect to live another 20.8 years; a woman, 24 years. Source: Money.cnn.com Full Story
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How Much Are You Spending On Dad, 1 Million Home Foreclosures, Website Domain Name Business
Financial FYI: Creating Financial Buzz With Interesting Financial News, Statistics, and Research
Father’s Day Spending
U.S. consumers expect to spend $9.58 billion on dads this year, down 4.2% from $10 billion last year, according to a survey by BIG research disseminated May 29 by the National Retail Federation. That’s the first expected decline since the trade group began releasing the figure in 2004. On average, people expect to spend $94.54 on the man of the house, from $98.34 in 2007. Source: Businessweek.com Full Story
1 Million Homes in Foreclosure
More than one million homes are now in foreclosure, the highest rate ever recorded. The Mortgage Bankers Association’s first quarter report showed that a record 2.5% of all home loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That’s up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007. Source: CNNMoney.com. Full Story
Website Domain Names
Though the economy may be in decline, the market for Web site domain names is on the rise. Last month, the name Gasprices.com sold for $300,000. What sells, why and who is buying them? Source: NPR.org. Full Story
U.S. Job Loss Report
Heading into Friday’s jobs report, the U.S. lost jobs for four straight months. In each of the past two recessions, in 1990 and 2001, payrolls contracted for at least 11 straight months… so labor market weakness is likely to run for at least another half a year before there’s a possible recovery. Source: Money.CNN.com. Full Story
Bus Ridership Up For The First Time In 50 Years
Spurred partly by the soaring cost of taking the car on that weekend road trip, bus ridership is up across the country for the first time in 50 years – a 13% increase this year compared with 2006, according to a DePaul University study. Now major operators are vying for a slice of the growing market for non-stop service between major cities – previously the purview of niche operators catering primarily to immigrants and low-income populations. Source: Time.com. Full Story
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