Get Wealthy - Stay Wealthy by Jim Wigen - Sr. Portfolio Manager

Jim Wigen - WHIFinancial.com - DJIA at 10,575 and S & P 500 at 1,140, where do they go from here?

jimwigen@twacorp.com (Jim Wigen) — Mon, 08 Mar 2010 15:41:31 +0000

With unemployment at 9.7%, unemployment benefits continuing for over 2 million people in question, consumer confidence at extremely low levels, and March 15th quickly approaching, I do not see the markets going higher. I see the DOW falling back to 10,000 in the next few weeks. If it does, I will be buying stocks, but am not buying aggressively at current market levels.

Historically, the worst period for investing in the stock market is between March 15th, and October 15th, which starts very soon. Last year, the markets rallied from the March 6th, lows, but during that time we were not sure if we would even have a stock market any more, relatively speaking.

Although earnings last quarter were good for corporate America, the economy needs Mr. & Mrs. America to be out spending money. Outside of the lines I saw at Home Depot this weekend, I don’t see many people out in restaurants or cars at the shopping malls. Even if the overall stock market is not going to go much higher at these levels, there is always stocks to buy, and if the market pulls back, that is when you want to keep buying and waiting for the consumers to help corporate America push the economy forward, and the DJIA over 11,000.

During a period of time which the markets are trading sideways, one option to use for making money is Selling Covered Call Options. If you are not familiar with that strategy, ask your current financial advisor or some of you who are working with financial salespeople, ask them about Selling Covered Call Options. When they tell you they don’t know much about it or use those strategies, because they only know how to promote mutual funds, you should email or call me. I will be happy to educate you on this strategy.

If you would like me to review your portfolio, have me give you a second opinion on your investments or hire me to be your Financial Advisor/Portfolio Manager, please email me at JimWigen@GetWealthyStayWealthy.com. Continue to check my website for updates on stocks I am buying and selling for my clients.

Jim Wigen, WHIFinancial.com - Siemens, (SI), Morgan Stanley (MS), Bank of America (BAC), my Top Picks for the Week

jimwigen@twacorp.com (Jim Wigen) — Tue, 02 Mar 2010 17:05:13 +0000

Many of you have emailed me asking what stocks I like, so I have decided to provide you my weekly top 10 stocks. Please note, I am not recommending you go buy these stocks for your portfolio without talking with me or your current financial advisor. Since I am not aware of your personal financial situation, I am providing my top 10 stock picks for you to get ideas on what you may want to buy for your portfolio or to bring my stock ideas to your current financial advisor.

Here are my top 10 stocks (in order) for the week, and at their current stock price, if they do pull back I would still buy more shares:

1. Siemens AG, SI

2. Morgan Stanley, MS

3. Bank of America, BAC

4. J.C. Penney, JCP

5. Fluor Corp., FLR

6. Alcoa, AA

7. Qualcomm Inc., QCOM

8. Citigroup, C

9. Barclays, BCS

10. General Electric, GE

Jim Wigen, WHIFinancial.com - Average Mortages Rates in U.S.

jimwigen@twacorp.com (Jim Wigen) — Mon, 01 Mar 2010 20:42:38 +0000

Loan Type	Today	Last Week
30 Year Fixed	5.09%	5.08%
15 Year Fixed	4.51%	4.42%
1 Year ARM	3.67%	3.93%
30 Year Fixed Jumbo	5.92%	5.92%
5/1 ARM	4.04%	4.04%
3/1 ARM	4.53%	4.55%

Jim Wigen, WHIFinancial.com - US Jobs & European Debt Weigh on Markets

jimwigen@twacorp.com (Jim Wigen) — Thu, 25 Feb 2010 17:19:19 +0000

Stocks tumbled today as downbeat news about the nation’s job market and rising debt in Europe revived fears of a global economic slowdown.

Disappointing reports on jobless claims in the U.S. and economic sentiment in Europe painted a bleaker picture of a recovery than Federal Reserve Chairman Ben Bernanke did during testimony Wednesday on Capitol Hill.

Overseas markets fell after the European Commission said economic sentiment in the 16 countries that use the euro worsened unexpectedly in February. Concerns that Greece will struggle to cut its budget and get its debt problems under control are again worrying investors.

Trading in the U.S. has been choppy in recent weeks because of uneasiness about the economy. And global markets retreated earlier this month because traders were worried Greece’s debt problems would spread to other European countries.

Meanwhile, the Labor Department said first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Economists polled by Thomson Reuters had forecast a drop in claims to 455,000.

It is the second straight week that claims jumped unexpectedly. High unemployment remains one of the biggest obstacles to a sustained economic recovery. The Labor Department’s monthly report on employment will be released next week.

“We’re getting hit with a double punch here today,” said Jeffrey Phillips, chief investment officer of Rehmann in Troy, Mich. The euro is again weaker because of debt concerns and the weekly jobless claims report are adding to volatility, he said.

Phillips expects trading to remain erratic if investors get more mixed signals about the economy. The Chicago Board Options Exchange’s Volatility Index, which is known as the market’s fear gauge, jumped 10.8 percent in morning trading. A rise in the VIX signals that investors are expecting swings in the market.

Concerns about Greece grew after credit rating agencies Standard & Poor’s and Moody’s said they might further downgrade the country’s debt. That would make it harder for the country to borrow.

Investors will also pay attention to a meeting of Congressional leaders and President Barack Obama to discuss changes to health care. The White House is trying to push through an overhaul that would extend coverage to more than 30 million people who are now uninsured.

Meanwhile, the Commerce Department had mixed news about manufacturing. Durable goods orders rose 3 percent in January because of a jump in commercial aircraft orders. It was the biggest increase in six months for orders of goods that are expected to last at least three years.

However, orders fell by 0.6 excluding volatile transportation orders. Economists expected those orders to rise 1 percent.

In corporate news, Coca-Cola Co. said it will buy the North American operations of its largest bottler, Coca-Cola Enterprises, and will give up its own bottling operations in Sweden and Norway.

Stocks broke a two-day losing streak on Wednesday after investors received the reassurance they wanted from Bernanke. During semiannual testimony before Congress, Bernanke reaffirmed the Fed’s plans to keep interest rates low to help strengthen the economy. He testifies again Thursday. The Dow rose 92 points.

Bernanke’s testimony overshadowed a disappointing report on new home sales. The Commerce Department said sales of new homes fell to a record low in January. A collapse in sales and home prices help drive the economy into recession. Recent reports show a recovery in the housing market remains choppy.

Jim Wigen, WHIFinancial.com - Consumer Confidence - 10 Month Low

jimwigen@twacorp.com (Jim Wigen) — Tue, 23 Feb 2010 16:16:31 +0000

The stock market can not continue to advance upward if the consumer confidence index continues with a rating under 90, now it’s at 46.

The Conference Board said Tuesday its consumer confidence index fell to 46 in February from 56.5 last month. Economists polled by Thomson Reuters expected a reading of 55.

Not only did the index fall sharply, it is far from indicating strength in the economy. A reading above 90 means the economy is on solid footing. Consumers are vital to a strong, sustained economic recovery because their spending accounts for more than two-thirds of all economic activity.

The disappointing report added to the cautious view investors have taken this week about a consumer-led recovery. A fresh round of earnings from retailers before the market opened showed earnings are up but that sales growth is lagging.

Home Depot Inc., Sears Holdings Corp., Macy’s Inc. and Target Corp. all reported better-than-expected earnings.

The market is concerned that a strong, sustained economic recovery is unlikely until consumers are more confident with their finances and job security. The unemployment rate currently stands at 9.7 percent.

In morning trading, the Dow Jones industrial average fell 68.47, or 0.7 percent, to 10,314.91 after being up around 19 before the consumer confidence index was released. The Standard & Poor’s 500 index dropped 11.09, or 1 percent, to 1,096.92, while the Nasdaq composite index fell 26.57, or 1.2 percent, to 2,215.46.

About three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 172.4 million shares, compared with 163.5 million traded at the same point Monday.

Tuesday’s trading extended the losses the market suffered Monday, when it ended a four-day win streak. Investors who last week were feeling more optimistic about the economy are having misgivings following two days of downbeat consumer news.

Meanwhile, interest rates fell in the bond market as Treasury prices rose. Investors were betting that a weak recovery will force the Federal Reserve to keep interest rates low. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.72 percent from 3.80 percent late Monday.

A modest increase in sales and cost-cutting helped Home Depot’s profit top expectations. The home improvement retailer also raised its dividend and outlook, evidence it is confident about the strength of an eventual recovery. Competitor Lowe’s Corp. on Monday also raised its outlook, but had a cautious tone about growth.

Like Home Depot, Sears Holdings said falling expenses and a slight boost in sales helped its profit surpass forecasts. Macy’s and Target also reported upbeat quarterly earnings.

Home Depot rose 21 cents to $30.53. Sears fell 56 cents to $95.10, while Target dropped $1.45, or 2.9 percent, to $49.19. Macy’s fell 18 cents to $18.29.

A report on home prices showed that the housing market continues its slow recovery. The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.3 percent from November to December.

Home prices’ rate of decline from a year earlier also improved. That measure fell 3.1 percent. Economists had forecast a year-over-year drop of 3.2 percent, compared with a decline of 5.3 percent in November.

The dollar rose slightly against other major currencies. Gold and oil both fell.

The Russell 2000 index of smaller companies fell 7.32, or 1.2 percent, to 624.93.

Overseas markets mostly fell after disappointing economic reports from Germany. Germany’s DAX index fell 0.6 percent and France’s CAC-40 dropped 0.8 percent. Britain’s FTSE 100 rose 0.1 percent. Japan’s Nikkei stock average fell 0.5 percent.

Jim Wigen, WHIFinancial.com - Big Banks Profitable, Smaller Banks Still a Problem

jimwigen@twacorp.com (Jim Wigen) — Tue, 23 Feb 2010 16:06:56 +0000

Banks report small profit but ‘problem’ list jumps

Banks earn $914 million in fourth quarter, but number of problem banks jumps above 700

WASHINGTON (AP) — America’s banks eked out a small profit in the fourth quarter as the economy recovered, but the number of banks considered troubled jumped to more than 700, the government reported Tuesday.

The Federal Deposit Insurance Corp. said banks essentially broke even in the October-December period. They earned $914 million, compared with a $37.8 billion loss in the fourth quarter of 2008.

Still, the number of banks on the FDIC’s confidential “problem” list leaped to 702 from 552 in the third quarter, the FDIC said.

Most of the improvement in earnings was due to the largest banks. But signs emerged of a broader positive trend in the industry, the FDIC said. For the first time in three years, more than half the 8,000 or so federally insured banks and thrifts reported higher income compared with the year-earlier quarter.

Delinquencies on commercial real estate loans remain a source of trouble. A wave of defaults on such loans could cause more banks to fail, FDIC officials and experts say. Regional banks, in particular, hold many commercial real estate loans.

Last year, 140 federally insured institutions failed and were shut down by regulators. They extended a string of collapses that began in 2008 amid the weakened economy and a cascade of loan defaults. So far this year, 20 banks have failed. That compares with 25 in all of 2008 and three in 2007.

The failures pushed the deposit insurance fund into the red last year. It was $20.9 billion in deficit as of Dec. 31, the FDIC reported. That compared with a positive balance of $17.3 billion at the end of 2008.

The agency expects U.S. bank failures to cost the insurance fund around $100 billion through 2013.

The 702 troubled banks on the FDIC list is the most since the height of the savings-and-loan crisis during the early 1990s. The combined assets of those banks was $402.8 billion.

For all of 2009, banks earned $12.5 billion, up from $4.5 billion in 2008.

Marcy Gordon, AP Business Writer, On Tuesday February 23, 2010, 10:35 am

Jim Wigen, WHIFinancial.com - Understanding New Credit Card Rules

jimwigen@twacorp.com (Jim Wigen) — Tue, 23 Feb 2010 05:39:13 +0000

The core credit card regulations from the Credit Card Accountability Responsibility and Disclosure Act of 2009 went into effect Feb. 22, 2010. While the regulations are important consumer protections, there is still room for banks to profit off credit card holders, though it will not be as easy as in the past.

Key protections:

Issuers generally must provide 45 days’ notice to increase interest rates.
Interest rate hikes cannot apply to past balances unless the customer misses a payment by 60 days.
Charges for exceeding the credit limit are only permitted if you opt in to over-the-limit fees beforehand. Otherwise, a charge that would exceed the limit will simply be declined.
Issuers cannot raise rates because a customer failed to pay an unrelated creditor.
Payments must be credited to the balance with the highest interest rate first.
Issuers must disclose how payments affect your balance, including how long it will take to pay your balance making only minimum payments and the monthly payment required to pay your balance in three years.

Card companies can still:

Raise rates on new purchases, as long as they give you 45 days’ notice.
Take advantage of “promotional period” loopholes. Issuers can increase interest rates without 45 days’ notice, including rates on previous balances, if a promotional period has ended.
Charge very high interest rates. There is no cap on the maximum interest rate allowed; there are only notification requirements.

To deal with the new regulations, banks are finding other, less-than-consumer-friendly ways to offset lost income. Since August 2009, banks have already begun using new tactics; many began to adjust even before the new rules went into effect. The Wall Street Journal reported card issuers stand to lose $12 billion per year from the new restrictions, so it’s logical to expect new and increased fees in other areas.

Likely new tactics:

More widespread and significant annual fees
Higher fees for international transactions
Increased balance-transfer charges
Higher interest rates from the outset
More variable-rate rather than fixed-rate cards

Still, it appears competition will keep relatively attractive offers in place for customers with strong credit. It is already a bit harder to find cards with stellar rewards and no annual fees, but there are still decent cards available. Card providers are focused on making the largest profit possible, but they realize there is a point of diminishing returns when it comes to customers with the ability to pay off their balances–if fees are too steep, customers will switch providers or even change to a debit card. That said, consumers should expect to see fewer rewards.

The new regulations do help protect consumers from some of the financial industry’s most egregious past practices, but ultimately consumers must protect themselves by scrutinizing the fine print in their bill each month. Banks are looking for opportunities to charge consumers more money, just as they were before. The profit-seeking behavior that prompted these regulations has not shifted, and the basic, common-sense reality of credit cards remains. If you have good credit and pay your balance on time and in full each month, you can probably avoid most of the new fees, but you will likely see fewer rewards. If you carry a balance and have trouble paying on time, you will still end up paying an arm and leg in finance charges, and it remains very possible you could dig yourself into a credit hole.

Jim Wigen, WHIFinancial.com- SEC & Bank of America Acquisition of Merrill Lynch Settled

jimwigen@twacorp.com (Jim Wigen) — Mon, 22 Feb 2010 18:19:42 +0000

Once again upper management wins by receiving $5.8 billion in bonuses, and the shareholders of Bank of America and Merrill Lynch lose. - (Jim Wigen’s opinion, not part of story)

Judge approves SEC-BofA settlement on Merrill deal

Federal judge approves SEC-Bank of America settlement over bank’s purchase of Merrill Lynch

NEW YORK (AP) — A federal judge said Monday he would reluctantly approve an amended $150 million settlement between the Securities and Exchange Commission and Bank of America to end civil charges accusing the bank of misleading shareholders when it acquired Merrill Lynch.

But U.S. District Court Judge Jed S. Rakoff called the revised pact “half-baked justice at best” and said the court approved it “while shaking its head.” The dispute had been scheduled for trial next week.

The judge last year rejected a $33 million settlement stemming from the early 2009 acquisition, calling it a breach of “justice and morality.”

Rakoff said Monday in his written order approving the revised settlement that it was “considerably improved” but “far from ideal.”

He said the new deal’s greatest defect “is that it advocates very modest punitive, compensatory and remedial measures that are neither directed at the specific individuals responsible for the nondisclosures nor appear likely to have more than a very modest impact on corporate practices or victim compensation.”

He added: “While better than nothing, this is half-baked justice at best.”

The SEC had accused Bank of America of failing to disclose to shareholders before they voted on the Merrill deal that it had authorized Merrill to pay up to $5.8 billion in bonuses to its employees in 2008 even though the investment bank lost $27.6 billion that year.

He said his approval depends on both sides formally ratifying the amended agreement by Thursday, including a change he had recommended — that an independent auditor be fully acceptable to the SEC with the judge having final say if the two sides cannot agree.

The new deal also requires that the independent auditor assess over the next three years whether the bank’s accounting controls and procedures are adequate to assure proper public disclosures. And it calls for the bank to begin submitting executive compensation recommendations to shareholders for a nonbinding vote of approval or disapproval over the next three years.

“Given that the apparent working assumption of the bank’s decision-makers and lawyers involved in the underlying events at issue here was not to disclose information if a rationale could be found for not doing so, the proposed remedial steps should help foster a healthier attitude of `when in doubt, disclose,’” the judge wrote.

The judge said he would have rejected the revised settlement, which he said provides shareholders a few pennies per share, if he were deciding the issue solely on the merits but he said the law requires him to give substantial deference to the SEC’s view and he believed it was an instance when judicial restraint was appropriate.

Bank of America spokesman Robert Stickler said the bank was “very pleased” that the settlement was approved.

The SEC did not immediately respond to a message for comment.

At a recent hearing, Rakoff had questioned why the SEC’s agreement with Bank of America was not as critical as recent charges brought by the New York attorney general’s office that were more suggestive of intentional fraud by bank executives.

He said he has since reviewed the underlying facts before the SEC and the inferences the agency had drawn and found them “not to be irrational.”

He said he was most troubled by the fact that a penalty package that essentially consists of a $150 million fine “appears paltry.”

He said he was also bothered that the fine penalizes the shareholders for what was, “in effect if not in intent, a fraud by management on the shareholders.”

The irony, he said, was that it is an acquisition that “may yet turn out well but that could have been a bank-destroying disaster if the U.S. taxpayer had not saved the day.”

By Larry Neumeister, Associated Press Writer , On Monday February 22, 2010, 12:03 pm EST

Jim Wigen, WHIFinancial.com - Obama & Govt. to Regulate Health Insurance Industry like a Public Utility?

jimwigen@twacorp.com (Jim Wigen) — Mon, 22 Feb 2010 15:58:30 +0000

Obama puts forward last-ditch health care plan - Prospects uncertain for Obama’s health care compromise; 31 million would get coverage

WASHINGTON (AP) — Making a last-ditch effort to save his health care overhaul, President Barack Obama on Monday put forward a nearly $1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriated consumers.

Posted Monday morning on the White House Web site, the plan would provide coverage to more than 31 million Americans now uninsured without adding to the federal deficit. It comes just four days before Obama’s one-of-a-kind, televised health care summit with Democrats and Republicans.

Even with the latest changes, it’s highly uncertain such an ambitious proposal can get through Congress. Republicans are virtually all opposed, and some Democrats who last year supported sweeping health care changes are having second thoughts in an election year. After a year in pursuit of what was once his top domestic priority, Obama may have to settle for a modest fallback.

Weeks ago, the president and congressional Democrats were on the verge of an historic step — a long-sought remake of the nation’s health care system after a half-century of unsuccessful attempts by scores of politicians. Then Republican Scott Brown stunned Washington with an upset win in the Massachusetts Senate race, denying Democrats their 60-seat majority and reversing any political momentum.

Determined to avoid facing voters empty-handed, Obama offered a fresh proposal based on Democratic-passed bills.

The plan conspicuously omits a government insurance plan sought by liberals and viewed as a non-starter by conservatives and some congressional moderates. It includes Senate-passed restrictions on federal funding for abortion adamantly opposed by abortion foes as well as abortion rights supporters.

The new White House plan would give the federal government the power to regulate the health insurance industry much like a public utility. The Health and Human Services Department — in conjunction with state authorities — would be able to deny egregious premium increases, limit them or demand rebates for consumers.

Obama, who deferred to Congress on the specifics for more than a year, has finally put forward a detailed plan of his own. By and large, it follows the bill passed by Senate Democrats on Christmas Eve, with changes intended to make it acceptable to their House counterparts.

It would require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums. Insurance companies would be barred from denying coverage to people with medical problems or charging them more. - Whether you are a Republican or Democrat, you should be pulling for this pre-existing condition exclusion to be changed. In my opinion, this alone would help change the competitiveness of health insurance company premiums. Imagine if car insurance companies could exclude covering you if you are in a car accident, because you have previously been in a accident. Car insurance is mandated by each state, and so should health insurance, however, insurance companies need to be restricted on increasing premiums and need to compete for your business. (Jim Wigen’s opinion only - not part of this article)

The plan dramatically scales back a Senate tax on high-cost health insurance plans objected to by House Democrats — and labor unions. Instead of raising $150 billion over 10 years, it would bring in just $30 billion, the administration said. A Medicare payroll tax increase on upper-income earners would help plug the revenue gap. For the first time, Medicare taxes would be assessed on investment income, not just wages.

Like the Senate bill, the Obama plan would create competitive insurance markets in each state for small businesses and people buying their own coverage. But it would strip out special Medicaid deals the Senate bill granted to certain states, gradually close the Medicare prescription coverage gap, make newly available coverage for working families more affordable. Those changes move in the direction of the House bill.

Estimated to cost about $1 trillion over 10 years, Obama’s plan would be paid for by a mix of Medicare cuts, tax increases and new fees on health care industries.

Oversight of insurance companies has traditionally been a state responsibility. Obama’s proposal for a new federal role calls for setting up a seven-member Health Insurance Rate Authority to monitor insurance industry practices and issue an annual report. States that beef up their consumer protection programs would be eligible for a share of $250 million in federal grants.

House Majority Whip James Clyburn, D-S.C., declined to say that House leaders have the votes now to pass the new plan, but said some of the concerns of House members were addressed by the changes Obama is proposing.

“So I do believe that there is more fertile soil today than when we first took this up,” Clyburn said.

Democrats, who now hold 255 of the House’s 435 seats, drew only one GOP ally when the House passed its health care bill, 220-215, last November. Since then, one Democrat who voted for the bill has resigned, one has died and a third plans to leave office Feb. 28.

Associated Press writer Erica Werner contributed to this report.

By Ricardo Alonso-Zaldivar, Associated Press Writer , On Monday February 22, 2010, 10:31 am

Jim Wigen, WHIFinancial.com - Siemens, (SI), Morgan Stanley (MS), Bank of America (BAC), my Top Picks for the Week

jimwigen@twacorp.com (Jim Wigen) — Sun, 21 Feb 2010 17:25:51 +0000