Filed under: Budgets, Ripoffs and Scams, Saving

Every year at this time, economists and financial analysts are jockeying for position on television news shows and in magazine articles. They each have the latest and greatest prediction about what’s going to happen in the coming year. And those stories sell, which is why you keep hearing them.

But economists are often wrong more than they’re right. Take the forecasts about the housing market. A year ago, many respected analysts were predicting that the recovery of the real estate market would begin in 2007. They were wrong, as the housing market made history with its declines. From housing strength to home building, the economists’ predictions were wrong.

Why do you care? Consumers hear this information and many times use it to make major financial decisions for their families. If so many economists are certain that housing is going to rebound in the next year, some people are bound to believe them.
But predictions are just that…. Predictions. Don’t put your family’s financial future in the hands of an economist pretending to be a psychic. Buy and invest in only what you can afford.

Don’t get a too-big home in the hopes that you’ll get a superior paying job in 2008. Don’t finance a buy, hoping to pay it off next year with the bonus you expect. Don’t get an adjustable rate mortgage with the idea that interest rates will be lower when your rate resets.

In times of economic uncertainty, it makes the most sense to be conservative with your dollars, especially if your family’s budget is tight. If you’ve extra savings or you make far more than you need to pay your basic expenses, then you can take a tiny more risk with your investments and spending habits.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Private equity industry

The American consumer is not the only part of the US economy that’s holding off on spending. So are institutional bond investors.

Based on a report from Bloomberg, it looks like Wall Street’s premier investment banks — including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and JPMorgan Chase (NYSE: JPM) — are slashing prices on their buyout debt backlog. In fact, some of the discounts are as much as 10% of the face value. Given that Wall Street is going to report horrendous financial results, it makes sense to deal with the problems now, right?

Interestingly enough, Wall Street had some help from failed deals, such as with SLM (NYSE: SLM). This trend has wiped out $51 billion in obligations.

Yet, there is still much to finance, such as Clear Channel, Harrah’s, BCE and Alltel. So, we might also see some post-Christmas buyout bond slashing, as well.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: International markets, SEC filings, Products and services, Management, Middle East, Oil, Headline news

Dubai World, a state owned investment company, announced that it has increased its ownership in MGM Mirage (NYSE: MGM) to 6.5% by purchasing an additional five million shares of stock in the company.

Following the announced buy, Lawrence Klatzkin of Jefferies & Co. told his clients that MGM is one of his top three picks and maintains a “buy” rating. According to Klatzkin, investors can expect to see Dubai World continue to add to its MGM holdings. This will continue to help keep the stock strong and definitely minimize any sort of downside risk.

Dubai, which has been swimming in money since the oil boom brought billions into the economy, has been moving fast over the past decade to branch out in its revenue streams. Seeing the end of the country’s oil reserves in the near future, the country has been working hard to become one of the world’s top tourist destinations, and moving into Las Vegas gaming is just one more step in the country’s strategy to remain a relevant world player once the oil runs dry.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

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Filed under: Other issues, Industry, Law, Consumer experience, Employees, Headline news, Small business

A recent ruling handed down by the Equal Employment Opportunity Commission has given employers discretion in using Medicare eligibility as a factor when calculating health care benefits for retired employees, as reported by Marketplace. The AARP had raised a stink about the issue claiming that having employers shift health care costs to Medicare when applicable amounted to age discrimination. My question is, if the level of care and benefits remains the same, who really cares from what direction the bills are paid? If employers carry the burden then we all see it in our bottom line. If the government pays for it, then we all see it in our tax load. The end effect to us as a society is basically the same.

This decision reaffirms in part exactly what Medicare was intended to do. The system has two major intents. First and foremost, Medicare is meant to fill the gap in cases where health care coverage is lacking. Secondly, Medicare is intended to help free the business world from the administration of benefits for people who no longer participate as an active part of their work force.

If the level of actual benefits is in no way reduced and the process of accessing those benefits is in no way hampered, then there’s no room to gripe about employers shifting the burden. In fact, this kind of move is exactly what American business needs right now. However, if this decision in any way dilutes the benefits that hard working people have bargained their working careers for, then the AARP has an extremely valid argument and they desire to have that argument tested by the Supreme Court.

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