Myanmar Float Helps Exporters Buying Kyat in Black Market - Bloomberg
March 30th, 2012
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Conservative justices are sharply questioning whether the government can force Americans to carry health insurance or pay a penalty. That’s the key question as the Supreme Court turns to the heart of President Barack Obama’s health care law.
Chief Justice John Roberts, along with Justices Antonin Scalia and Samuel Alito, is pressing Solicitor General Donald Verrilli on this question: If the government can make people buy health insurance, then what limits are there? Can people be forced to buy things like cars and broccoli? Justice Anthony Kennedy says the government will have a heavy burden under the Constitution for such an “unprecedented” idea of forcing people to buy insurance guaranteed approval cash loans.
Verrilli is arguing that Congress wrote the law that way to keep uninsured people from driving up everyone else’s costs.
The president and chief executive of Sun Life Financial Inc., Dean Connor, who took over the top job at the insurer in December, earned $5.1 million in total compensation last year.
According to Sun Life
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Hong Kong picks its new chief executive today, after a campaign marked by personal scandals, public discontent over a widening wealth gap and protests for greater democracy.
A 1,193-member committee of billionaires, including Hong Kong
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Air Canada says it has an injunction against its ground workers in Toronto, Montreal and Quebec City after wildcat strikes in Toronto and Montreal cancelled or delayed dozens of flights.
The workers walked out Thursday night, reportedly after some of them were disciplined for heckling federal Labour Minister Lisa Raitt.
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Canadian banks, bolstered by profits per employee 31 per cent higher than U.S. lenders, added more than 2,800 workers in the most recent quarter while Bank of America Corp. and Washington Mutual Inc. shed thousands of jobs.
For every worker hired at one of Canada
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Oil prices fell to near $107 a barrel Tuesday in Asia, slipping from close to 10-month highs ahead of new data on the U.S. economy.
Benchmark oil for April delivery was down 80 cents to $107.29 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.03 to settle at $108.09 in New York on Monday.
Brent crude for May delivery was down 70 cents at $125.01 a barrel in London.
Crude has jumped from $96 last month and $75 in October as signs of an improving U.S. economy boost investor confidence. Oil traders often look to stock markets as a gauge of overall investor sentiment, and the Standard & Poor’s 500 rose 0.4 percent Monday to its highest close since May 20, 2008. Asian stocks were mostly lower Tuesday.
Data on U.S. housing and jobless claims later this week is likely to provide fresh cues for the oil market. A private survey of the U.S. homebuilding industry on Monday found that companies are increasingly hopeful that home sales will rise in coming months no fax cash advance.
Tensions over Iran’s nuclear program have helped to keep high prices at elevated levels. A military attack by Israel or the U.S. against Iran’s nuclear facilities would likely trigger a crude price spike while renewed diplomatic negotiations would probably cause prices to drop.
“The market is anticipating additional favorable U.S. economic news,” energy trader and consultant Ritterbusch and Associates said in a report. “And until concerns ease regarding Iranian risk, the market appears capable of maintaining price gains, especially if equities remain strong.”
In other energy trading, heating oil was down 1.9 cents at $3.26 per gallon and gasoline futures slid 1.3 cents at $3.35 per gallon. Natural gas fell 0.3 cent at $2.35 per 1,000 cubic feet.
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Let’s answer a couple of reader questions on money market funds and ancient certificates of deposit.
What do I tell my mother who is wondering if she should put all her money out of money market accounts so that she won’t lose any of her money? Are they not insured by FDIC? — L.J., Kirkwood
That depends on what you mean by “money market account.”
Many years ago, government regulators let banks use the term “money market” on bank accounts. They ought to be hog-tied in their own red tape. The result was endless confusion.
Two kinds of financial product use the term “money market.” The one offered by banks is basically a savings account with limited check writing. That account is insured by the FDIC up to $250,000.
By contrast, money market mutual funds aren’t insured by anybody. You invest in them through a brokerage or a mutual fund company. Some banks run brokerages, which adds to the confusion.
Both are poor investments, useful only as a place to park money while you look for something better.
The bank version pays an average of 0.14 percent interest, according to Bankrate.com, although you can get 0.9 percent at EverBank, an Internet bank in Brentwood. The mutual fund version averages 0.06 percent, according to Crane Data’s Money Fund Intelligence.
There really is no reason to hold a money market mutual fund unless you’re planning to trade stocks or bonds soon.
The worrisome noise out of Washington these days involves money market mutual funds. The head of the Securities and Exchange Commission wants changes to lessen their risk. The mutual fund industry is afraid she’ll shrivel up the business.
In fact, money market mutual funds are already very low risk, but not completely safe.
“We’ve learned there’s risk everywhere, but money funds are still among the safest options out there,” says Peter Crane, who heads Crane’s Data. “The worst case scenario is losing a penny on the dollar.”
By government rule, money market mutual funds can invest only in highly-rated short-term obligations – bank certificates of deposit, Treasury bonds, government agency debt, IOUs issued by big corporations, municipal debt and a few other things.
That debt must have an average maturity of 60 days and be “liquid,” meaning easily sold. Since highly-rated companies don’t often go broke in two months, money market funds are reasonably safe.
So safe that Wall Street calls money funds “cash.” That’s easy to do because money funds hold their share price at $1, and simply add the interest they collect as extra shares.
Then, in the summer of 2008, Lehman Brothers went from A-rated to broke within days. The Prime Reserve money fund held a mere 1.2 percent of its assets in Lehman paper. But that loss was enough to make it “break the buck,” dropping the share price below $1.
Coming in the midst of a financial panic, the buck-break set off a $300 billion investor stampede out of money funds.
With the funds cashing out, the nation’s short-term credit markets froze up, threatening business and industry no faxing 1 hour payday loans. The Treasury rode to the rescue, insuring money funds to stop the run. Uncle Sam never paid a dime on the insurance, and it’s since expired.
When the panic cooled, the government did things both smart and stupid. Smartly, the SEC shortened maturities and raised the quality level of assets allowed in money funds. That made funds safer. Stupidly, Congress forbade the government from guaranteeing money funds ever again.
That move worries SEC Chairman Mary Shapiro. Regulators could do little to stop another run, she says.
There was a round of nervousness just last summer, amid the European debt crisis, when people realized the U.S. money funds had 31 percent of their assets in the Eurozone, largely in bank debt. The funds have since cut exposure to 14 percent as of January, according to the Investment Company Institute.
Shapiro now wants funds to let the share price float. Without the $1 peg, investors would stop thinking of them as cash, and be less likely to panic if the price falls.
Alternatively, she wants sponsoring firms to put hold more capital to back up the $1 share price, and to forbid investors from pulling all their money out at once.
Shapiro draws boos from both fund sponsors and investors. The likely result would be fewer money funds and less short-term credit for business and government, they say.
The better move would be for Congress to repeal its ban on bailouts, according to critics.
My grandmother lived in Clayton. She took out a certificate of deposit in 1988 in my name and hers. She died shortly after that. I didn’t need the money, and as far as I know (the CD) was just sitting in a safety deposit box all that time. Now, I’m trying to consolidate money. I called the bank and they say they have no record of it. An aunt handled the estate, but she’s dead now. — L.C., Bethesda, Md.
L.C. faxed me the certificate. It was issued by Mercantile Bank for $5,300 in September, 1988, before merger mania hit the banking business in St. Louis. Firstar Corp. of Milwaukee bought Mercantile in 1999, then FirstStar bought U.S. Bank of Minneapolis and adopted its name.
I called U.S. Bank, and they assigned a staffer to contact L.C. and try to straighten things out.
It’s not unusual for relatives to find old bank certificates in the effects of the deceased, and wonder if they were ever cashed in. But the bank spokeswoman noted that, if the certificate were still active, the bank would have been sending someone an annual tax form.
Dormant bank accounts are turned over to the state treasurer if the bank has no contact with the owner for five years.
The Treasurer holds the money “indefinitely” until the owner is found. Missouri State Treasurer Clint Zweifel runs a website, www.showmemoney.com, where people can check. I ran L.C.’s name and his grandmother’s through the site and found nothing.
Higher gas costs drove U.S. wholesale prices up last month. But excluding the big jump in gas, inflation was mostly tame.
The Labor Department says the producer price index rose 0.4 percent in February, the most since September. The so-called “core” index, which excludes food and gas prices, increased 0.2 percent, the smallest gain in three months.
In the past twelve months, wholesale prices increased 3.3 percent, the smallest yearly gain since August 2010. The index measures price changes before they reach the consumer.
Modest wholesale inflation reduces pressure on manufacturers and retailers to raise prices. That helps keep consumer prices stable. Low inflation also allows the Federal Reserve to keep short-term interest rates near zero.
Still, oil and gas prices have surged further since the beginning of the year. The average retail price for a gallon of gas was $3.81 on Wednesday, according to AAA. That’s 50 cents higher than a month ago.
The Fed highlighted the increase Tuesday after its one-day policy meeting. Policymakers said they expect rising energy prices to temporarily raise inflation. But longer-term inflation should remain stable _ repeating a view expressed by Chairman Ben Bernanke earlier this month.
The Fed also repeated its plan to keep its benchmark interest rate near zero until at least 2014, a sign that it is not concerned about out-of-control inflation.
In the past 12 months, wholesale prices have increased 4.1 percent _ the smallest rise in a year.
Wholesale inflation peaked last year and has moderated steadily in recent months. Prices of many agricultural commodities, such as cotton and corn, spiked early last year but have since fallen.
A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
Lower price growth also leaves more money in consumers’ pockets, boosting their buying power and supporting economic growth. The jump in gas and food prices early last year limited Americans’ ability to buy other goods, slowing the economy.
Some economists worry that rising gas prices could act in a similar way again, dragging on growth. If turmoil worsens in the Middle East, for example, that could push oil and gas prices much higher.