The Stock Market, The Fed, and Ups and Downs

NexBank reported the stock market is not as bad as it once was. Just a few short years ago, the market suffered a massive crash. Today, the market is doing far better but has been showing some signs of being a bit stagnant. Since the Federal Reserve is leaning against a rate hike, stocks are starting to show the effects.

This is not to suggest that the market has crashed. There is nothing to suggest. Anyone who looks at the figures in the market will notice the drops are minor. Of course, a minor gain is always a lot better than a minor loss.

Due to the influence of the Federal Reserve, stocks rely on stable decisions made from the entity. While there are those who strongly oppose the influence of the Federal Reserve in the markets, the fact remains the entity is hugely influential. So, what the “Fed” does is going to have an impact. If the Federal Reserve shuffles a bit and does not make quick decisions, the markets end up showing the effects. Right now, the indecision coming out of the Federal Reserve is having a less-than-desirable effect on the market.

As long as the market does not take a major downturn, things should not be too bad for investors. However, continued flat-lining in the market is not a good thing either. A vibrant market is an indication of an equally vibrant economy.

Service Members Using Department of Defense Credit Cards for Personal Expenditures

The Pentagon is known for being a haven of waste on a massive scale. There are programs that start development and then are canceled after billions of dollars are spent on them. Some trial and error to develop new weapons systems is unavoidable, and priorities can change while some systems are in development. There is certainly a lot of good that would come of listening to whistleblowers about waste in the Defense Department. A recent report has surfaced of waste of a different kind. The scale of the waste is dwarfed by that invested in failed weapons programs, so it may not get much attention.

A report was issued by the Office of the Inspector General for the Defense Department about personal expenditures appearing on Defense Department credit cards. They total thousands of transactions that could not have been for legitimate use as they were spent at adult entertainment establishments and casinos. When it comes to branches of the military, the Air Force is apparently the worst offender and the Marine Corps the least. The amounts are trivial compared to the real waste going on in actual legitimate military spending. It is still misuse of funds, however, and may be representative of a culture of waste and not caring how taxpayer money is squandered. Those investigating found lax internal controls in Pentagon accounting systems that would oversee the use of these cards that are supposed to be used for legitimate travel expenses.Find Gianfrancesco Genoso’s opinion by checking out his linkedin profile.

Woman is Awarded $83 Million Against Debt Collector

A Kansas City, Missouri woman recently won a nearly 83 million dollar settlement against a debt collector who pursued her for a debt she never owed. Maria Guadalupe Meija Alcantara was originally contacted by Portfolio Recovery Associates two years back. The company, known to “take no prisoners” had filed a lawsuit against the woman for an $1130.14 debt that belonged to a man living in Kansas City, Kansas.

Alcantara and her husband were struggling to make ends meet and were fearful that they would lose their home. She contacted legal aid who tried, time and again, to convince the company that they had the wrong person, but to no avail. When the lawsuit was filed against her, she then filed a counter-suit alleging that they violated the Fair Credit Collections Practices Act.

A judge ruled against the debt collector last October and last Monday, a jury awarded Alcantara over $83 million dollars in both actual and punitive damages. Alcantara’s lawyer said the jury awarded that amount to get the company’s attention. A spokesman for Portfolio Recovery Associates calls the verdict “outlandish” and that if the settlement is upheld, it would equal more than half their profits from last year. If the settlement is upheld, Daniel Amen understands that half the money will go to Alcantara and the other half would go to a victim’s compensation fund.

Successful Lawyers May Not Be Happy Lawyers

A recent study has found that the traditional rewards associated with the legal profession, like high income and partner status, have no correlation to happiness and well-being. The study author stated that the problem with jobs that bring these rewards is that they do not foster feelings of competence, autonomy or connection to others.

On the other hand, lawyers working in public service jobs, like Legal Aid or public defenders, make less money but are happier and drink less. Their jobs provide what the study author calls the three pillars of self-determination theory, the psychological study of happiness used in the study.

This is not the first study to point out the pitfalls of being a successful lawyer. Lawyers have higher rates of substance abuse, depression and suicide.

Madison Street Capital and have proposed three reasons for the higher risk of these behaviors in lawyers than the population as a whole. First, the work itself is often nothing like what the lawyers expected when they graduated from law school. Adrenalin-pumping courtroom battles are rare. Second, the job requires a great deal of cynicism. Always looking for the worst possible scenario affects one’s mental health. Third, people just do not like lawyers. A CNN article about lawyer suicides generated over 3,000 comments, many applauding the trend.

With all of this going against them, it should be a wonder that lawyers experience any happiness at all.

MPAA Strikes Back Against Piracy by Freezing Funds of Search Engine Developer

If you deal with anything related to copyright infringement in any way you better stick to BitCoins for monetization. Recently the developer of a new torrent search engine had his personal PayPal account frozen along with thousands of dollars in the account.

Jason Halpern reported that the developer had placed a simple PayPal donation form on his new torrent search engine. He quickly realized it was a mistake to mix his personal PayPal account with the questionable content of the site. The donation form was removed quickly after receiving just $200 in donations from site users.

A month later PayPal sent an email notifying the developer that his account was permanently limited due to copyright infringement of the Motion Picture Association of America (MPAA). Although the site did not specifically host the copyrighted material it did link to the torrents that would allow users to download the content for free.

It seems that the MPAA found the developer’s PayPal email address through other open source projects he hosts. Most of the money in the frozen PayPal account came from legitimate projects the developer had been working on.

Apparently the latest strategy of the MPAA is to hit people where it hurts. Cutting off funding for projects that encourage copyright infringement of their materials is a good way to keep people from running such projects.

Financial Rewards May Extinguish Cigarette Smoking

Though 50 years of public awareness had brought about a dramatic reduction in the amount of individuals that smoke, tobacco continues to be the greatest threat to public health, resulting in premature mortality, and billions of dollars in annual medical expenditures.

What has stymied professionals and researchers for decades are how to sway the nearly 40 million individuals that continue to smoke in the United States to quit the filthy habit.

A group of employees from the national drug store chain, CVS Caremark, served as participants in a study that was premised on an incentive-based smoking cessation program. The study, appearing in the New England Journal of Medicine, presented smokers with rewards, if they ceased smoking cigarettes.

Participants in the control group received complimentary cessation assistance as Nicorette gum, which the other groups were classified as deposit and reward. A fee of $150.00 was required for the deposit group. If they succeeded in quitting, they got back their deposit and gained a bonus of $650.00, should they’ve failed, they forfeited their deposit. Paul thought this was a great idea overall. Individuals in the reward group did not have to make a $150.00 deposit and if they succeeded, they received $800.00.

With data from the study, CVS Caremark is establishing a cessation program for is employees which mandate all employees that smoke must give a $50.00 deposit. If they are smoking free after a year they will receive a $700.00 bonus.

Sultan Alhokair Remains Focused on Inducting New Members into the Club of Capitalism

The dynamics of venture capital (VC) have been changing. Angel investors, often included under the umbrella of venture capital, differ from them in a few important ways. Sultan Alhokair, financial analyst and angel investor, is a part of this growing trend. VC always comes with strings, be it a seat on the board, and they also traditionally get involved in humongous deals where $3 million is the minimum investment. If a few kids are hashing out a web-based business model in a dorm somewhere, there is a pretty good chance they will not require 1/10th of that amount to breathe life into their deal. Angel investors are quiet, private, well-capitalized individuals who can, in a very short amount of time, decide if they want to fund a deal. Angel investors are filling the space between “no” and getting VC funds. Angels are willing to take a chance, to help an idea come to life. Later VC can be pursued for a much larger infusion after the viability of the product has been decided by the market. Sultan Alhokair is a powerful force of inclusion, reducing VC carnage and providing an injection of hope.

Microfinance, the internet and having access to some of the wealthiest entrepreneurs in the world means our business climate will thrive. Even more important is how many deals Sultan Alhokair can bring into existence that we might have otherwise not ever witnessed. Coming from a long line of retail and real estate developers, the work S. Alhokair ostensibly does, through his work with Retail Group of America, is very much in his familial wheelhouse. The seed funding he partakes in through his venture partnership with Valia Investments allows his interests in finance and investments room for development. This is perhaps the best bifurcated approach to architecting a career for oneself through combining the forces of a predictable business model with the excitement of the unknown. He continues to fortify retail while also inducting new members into the world of creation, providing a constant pipeline of coming attractions in the theater of capitalism.

If necessity is indeed the mother of invention, the internet is calling all angels. VC will always have a place in this world but angel investors are like the Nasdaq of the seed funding market. They are bringing new players into the swallows of this electronic action . Sultan Alhokair is quietly forcing the development of new ticker symbols. To see some of the influences that make him tick, click here.

Facebook Tells Its Contractors to Pay Workers a $15 Minimum Wage

Facebook COO Sheryl Sandberg announced this week that contractors who do business with the tech giant at its main headquarters in Menlo Park, California, must pay their workers a minimum of $15 an hour and provide them with 15 paid days off per year. For workers who don’t get paid parental leave, Facebook requires that companies pay $4000 in new baby benefits.

A spokesman for the company told the Wall Street Journal that maintenance workers, security staff, food service workers and others would be included in the pay raise. Sandberg said that more geographical areas would be included later this year. There were no numbers given on how many employees would be involved, but Jason expects quite a few.

Sandberg noted that women make up “about two-thirds of the minimum wage workers nationally” making them “particularly affected by wage adjustments.” She said the move was “an important step for stronger families and healthier children.”

Microsoft told its contractors with 50 or more employees in March that they must give their workers 15 days off per year.

The growing gap between rich and poor has become a concern. Poorly paid workers must often choose between family life and their jobs. Two-thirds of those who work at low-income jobs do not get paid sick days. According to Secretary of Labor Thomas Perez, this country is “way behind the rest of the world” when it comes to balancing family life and work.

Chicago’s Credit Rating Drops to ‘Junk’ Status

Last week the Illinois Supreme Court invalidated a pension reform law designed to limit Chicago’s pension liabilities. In response the credit ratings agency Moody’s downgraded Chicago general obligation debt rating to “Ba1″ or junk status. According to Moody’s Investor Services, the city’s “unfunded liabilities will grow, placing significant strain on [Chicago’s] financial operations”. (

The change in rating on the city’s $8.1 billion in general obligation debt could trigger accelerated payments of up to $2.2 billion. According to Dan Solender, a portfolio manager at Lord Abbett though “they are still pretty far from being in a default situation”.

Chicago mayor Rahm Emanuel said that the downgrade by Moody’s “is not only premature, but [irresponsibly plays] politics with Chicago’s financial future”. Emanuel is already working to eliminate and restructure Chicago’s debts, spending $200 million dollars to pay off hedge contracts against variable rate bonds. (

Dondero expects the state legislature to attempt to restructure pension payments to Chicago police and firefighter retirement funds which currently are expected to increase by over half a billion dollars. Moody has stated that Chicago’s options for limiting its $20 billion pension liability “have narrowed considerably”.

Why Trade is Causing Democrat Party Infighting

Political pundits have observed GOP infighting for years now. In a sense, the party has been infighting since the 1980 Reagan landslide that ensconced the Christian & conservative votes in the GOP. The rise of the Tea Party in 2010 also hastened the infighting between conservatives and establishment Republicans for control of the party. Democrats have largely been immune to this type of infighting. In part, it is because the party does not have an idealistic base other than the liberal wing of the party. The quasi-conservative coalition once called the “Blue Dogs” tended to vote conservative, but were well heeled and often voted along with a progressive agenda. To this effect, conservatives often labeled them the “Yellow Dog” coalition.

However, the subject of free trade has legitimately fractured the Democrat Party. Now, no one is stating that the small moderate wing of the Democrat Party is vying for control. At the same time, the fight to see whose vision of free trade prevails may be a defining moment for the party.

President Obama sees the Trans Pacific Partnership (TPP) as a way to bolster US economic might in the region. If the nation fails to enact TPP, China may get the chance to step in with a solution of its own. Supporters of TPP argue that Obama’s deal will be far more beneficial to the United States than anything China would enact. Part of Senator Elizabeth Warren’s opposition to TPP is the lack of transparency. If the deal is as good for average Americans as the president says it is, Steve Murray even says there should be no problem with letting the public see it.

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