Category Archives: Entrepreneur

March 2014 Economic Report






“We must believe that we are gifted for something, and that this thing, at whatever cost, must be attained.”

– Marie Curie



Are your financial needs and priorities the same as they were five years ago? Time may have subtly changed them. Every few years, you should review your financial strategy to see if it needs altering in light of new needs and goals.



It is born in the air and it hears and speaks even though it has no ears, mouth or body. What is it?



Last month’s riddle:
What possesses a foot, yet no legs?


Last month’s answer:

A snail.


March 2014

Wall Street staged an impressive comeback in February – emerging market currency troubles, middling economic indicators and unrest brewing on multiple continents couldn’t stop the bulls from running. The Dow gained 3.97% for the month and the S&P 500, Nasdaq and Russell 2000 all gained more than 4%. Important commodities and most foreign stock exchanges also rallied. While existing home sales slipped, new home sales jumped. New Federal Reserve chair Janet Yellen soothed the markets with reassuring remarks on Capitol Hill.1


Why were so many economic indicators so feeble? Maybe it was the weather. Janet Yellen thought so – on February 27, she told Congress that the miserable winter much of the U.S. was enduring was likely distorting economic reports for the worse. The unemployment rate fell to 6.6% in January, but hiring fell off as well with the economy generating 113,000 new jobs (payrolls had grown by an average of 182,000 positions a month during 2013). The federal government also revised its estimate of Q4 GDP down to 2.4%.2,3


Consumer spending represented a bright spot – personal spending was up 0.4% for January and personal incomes rose 0.3%, even as overall retail sales declined 0.4%. Still, the Commerce Department revised December’s consumer spending gain down to 0.1% and the Q4 gain down to 2.4%.4,5


Consumer prices moved north just 0.1% in January while producer prices rose 0.2%; the gains in the core CPI and PPI matched the respective headline numbers.6


As for consumer sentiment … the Conference Board and University of Michigan indices told slightly different stories. Last month’s final University of Michigan index came in at 81.6, a minor improvement from the final January mark of 81.2. The Conference Board’s consumer confidence index (which arguably carries greater weight) slipped 1.3 points to 78.1 for February. The CB’s leading economic indicator index was up 0.3% in January.6,7


American industrial output had fallen 0.3% in January; economists polled by had expected a gain of that magnitude. Durable goods orders fell 1.0% in the first month of 2014, though they advanced 1.1% in January minus transportation orders.5,7


The much-watched purchasing manager indices maintained by the Institute for Supply Management showed factory and service sector growth holding up even with the severe cold. ISM’s manufacturing PMI improved from 51.3 in January to 53.2 in February. Weeks earlier, its service sector PMI had shown a 1% gain for January to 54.0.8,9


As February came to a close, the threat of combat in Ukraine hadn’t unsettled the markets to the degree it would in early March. The currency problems and capital flight plaguing the “Fragile Five” – as Morgan Stanley christened the economies of South Africa, Turkey, Brazil, India and Indonesia – moderated in February, with the average implied volatility of their currencies hitting 3-month lows weeks after touching 4-month highs.10


China’s official factory PMI read just 50.2 in February, an 8-month low. The preliminary HSBC/Markit PMI for China came in at 48.3 for January, signaling contraction of its manufacturing sector. China’s official service sector PMI, however, was at 55.0 last month (a 3-month high). India’s HSBC/Markit PMI was at 52.5 in February (its best reading in a year); South Korea’s fell to 49.8 (the first reading below 50 since October).11,12


In the euro area, consumer inflation was still very low in February (0.8%) while the jobless rate was still high at 12.0%. Markit’s PMI for the eurozone manufacturing sector showed slower growth at 53.2 in February, down from 54.0 a month earlier – yet Markit manufacturing PMIs improved in Germany, Spain, Italy and France.13,14

As U.S. benchmarks reversed course and turned north in February, so did many others. Take the MSCI Emerging Market Index, up 3.19% last month; the MSCI World Index topped that gain with a 4.81% February climb. The Global Dow gained 3.95%, the Asia Dow 3.33% and the Europe Dow a tremendous 7.28%; the STOXX Europe 600 was up 4.81% for the month.1,15


While Canada’s TSX Composite advanced 3.76% in February, the same couldn’t be said of Mexico’s IPC All-Share (-5.13%), Brazil’s Bovespa (-1.14%) or Argentina’s MERVAL (-3.89%). In the Asia Pacific region, Australia’s S&P/ASX 200 gained 4.14% in February; the Nikkei 225 dipped 0.49%.  Both the Shanghai Composite (1.14%) and the Hang Seng (3.64%) posted February gains. India’s Sensex rose 2.96%, Indonesia’s Jakarta Composite 4.96%; Pakistan’s KSE 100 lost 3.74%. In Europe, the FTSE 100 improved 4.60% in February; the CAC 40 was up 5.82%, the DAX 4.14%. Ireland’s ISEQ advanced 11.69%, and Russia’s RTS fell 2.59%.1i COmposite : the TSX Composite (-2.30%), the  gan’



Coffee was hot in February – to put it mildly. Coffee futures jumped 42.57% for the month, the biggest gain by far among many in key crops. Soybeans rose 10.07% in February, corn 5.30%, wheat 7.67%, cotton 0.65%, cocoa 1.63% and sugar 5.92%.16


COMEX gold ended February at $1,321.60 per ounce following a 6.59% ascent for the month. Silver beat that, rising 10.78%. Copper rose just 0.59%; platinum futures advanced 5.20%. The U.S. Dollar Index slipped 1.99% for February, ending the month at 79.69.16,17


Naturally, oil futures rose with emerging market concerns. NYMEX crude wrapped up February at $102.59. Its 5.49% monthly gain paled to that of the 13.58% rise made by unleaded gasoline futures. Natural gas was up 5.87% for February, while heating oil futures descended 6.23%.16


According to the National Association of Realtors, January saw a 5.1% plunge in residential resales, with sales of single-family homes down 5.8%. Existing home sales were also down 5.1% across the past year.7,18


NAR also had pending home sales up just 0.1% in January; across the past 12 months, they had declined 9.0%. The Census Bureau delivered better news regarding new home purchases: a 9.6% January gain. December’s edition of the S&P/Case-Shiller Home Price Index showed a 13.4% annualized rise in house prices across 20 cities, slightly lower than the 13.7% yearly gain reported in the November edition.7


January’s harsh weather meant no increases in groundbreaking: housing starts were down 16.0% in the largest monthly retreat seen since February 2011. Building permits declined 5.4%.19


While 30-year home loans grew a little more expensive in February, Freddie Mac’s Primary Mortgage Market Survey showed average interest rates for other types of mortgages lower. From the January 30 survey to the February 27 survey, the average interest on a 30-year FRM increased 0.05% to 4.37%. Average rates on a 15-year FRM, however, were 0.01% lower on February 27 at 3.39%. Freddie’s February 27 survey also found average interest rates on 5/1-year ARMs and 1-year ARMs respectively at 3.05% and 2.52%; those averages declined 0.07% and 0.03% from the January 30 PMMS.20


February’s percentage gains are even more striking when you realize that the first market day of the month saw a 326-point dive for the Dow. The S&P finished February with yet another record close – 1,859.45 – after a 4.31% ascent for the month. The Dow wrapped up February at 16,321.71, rising 3.97% in the second month of the year; the Nasdaq advanced 4.98% to wrap up February at 4,308.12. Last month was great for the small caps as well, with the Russell 2000 improving 4.61% to a February 28 close of 1,183.03. The CBOE VIX slid 23.95% during the month, ending February at 14.00.1,21


DJIA -1.54 +16.13 +26.22 +5.42
NASDAQ +3.15 +36.32 +42.53 +11.22
S&P 500 +0.60 +22.76 +30.59 +6.24
10 YR TIPS 0.49% -0.64% 2.06% 1.61%

Sources:,, – 2/28/141,22,23

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


March started much like February, with a triple-digit loss for the Dow as tensions in Ukraine weighed on investors’ minds. Would this be the “black swan” event so long absent from the stock market? Or would the current bull, now a week from its fifth anniversary, keep stampeding? The biggest possible economic threat stemming from the crisis might be the chance of eurozone economic sanctions against Russia, which in the worst-case outcome leads Russia to reduce energy exports to the euro area and sends the eurozone back into another recession. So far, this feels like a short-term event with an impact that may be muted on Wall Street (oil prices aside). The bull market has managed to saunter through many geopolitical and economic shocks since 2009, and its resilience may take investors through this one without too much negative impact.21


UPCOMING ECONOMIC RELEASES: Here is the data stream for the rest of March: February’s ISM services index and ADP employment change report, plus the latest Fed Beige Book (3/5), the February Challenger job-cuts report (3/6), the Labor Department’s February jobs report (3/7), January wholesale inventories (3/11), January business inventories and February retail sales (3/13), the University of Michigan’s initial March consumer sentiment index and February’s PPI (3/14), February industrial output and March’s NAHB housing market index (3/17), February housing starts and building permits, and the February CPI (3/18), a Fed policy announcement (3/19), February existing home sales and the Conference Board’s February leading indicator index (3/20), February new home sales data, the Conference Board’s March consumer confidence index, the January Case-Shiller home price index and the January FHFA housing price index (3/25), February durable goods orders (3/26), February pending home sales figures from NAR and the final estimate of Q4 growth from the federal government (3/27) , and then the University of Michigan’s final March consumer sentiment index and February consumer spending data (3/28).


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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region. The Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The S&P/ASX 200 is recognized as the institutional investable benchmark in Australia. The index covers approximately 80% of Australian equity market capitalization. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The IDX Composite or Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange (IDX). Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The RTS Index (abbreviated: RTSI, Russian: ?????? ???) is a free-float capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The ISEQ Overall Index is a capitalization-weighted index of all official list equities in the Irish Stock Exchange, excluding U.K.-registered companies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.



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A whie back I wrote about the coming student loan crisis.  Here is an update on that issue…

Student loans now have the highest rate of delinquency of any form of debt – 11.5% is 90 days or more late.  The balance due has grown to $1.08 trillion!

While delinquency rates for mortgages, auto loans, second mortgages and credit cards all began dropping in 2010, student loan delinquencies continue to climb.

According to FICO, The average student loan has grown  $17,233 in 2005,  to $27,253 in 2012–a 58% increase in just seven years.

“There are several reasons for the rising student debt problem. The rising cost of education is certainly one of them, but the relationship between lender and student borrower is particularly troubling.

Students without much of a credit score or credit history are being approved for thousands of dollars in loans by lenders who are betting they’ll be able to pay it back after getting a college degree.” according to Forbes.  click here for the full article.

When they graduate into a high-unemployment economy, IF they can get a job, it is below their skill level and doesn’t pay enough to pay back the loans:  one-third of millennials say they would have been better off working, instead of going to college and paying tuition.

The result?  they delay other life purchases, like new cars and homes (home ownership is 36% lower in those paying back student loans).  And student loans cannot be escaped by bankruptcy – and all of this has a significant imact on the economy.

Some regulators are starting to pay attention. The Consumer Financial Protection Bureau says it’s received over 30,000 complaints and comments about how student loans are affecting consumers. CFPB Director Richard Cordray compared the student loan environment to the “broken mortgage market before the crisis” and said his agency is watching it closely.

“The burden of student debt is jeopardizing the ability of young Americans to buy homes, start small businesses, and save for the future,”  said CFPB Director Richard Cordrayn last month.


Leadership Rules

Just ran across this again, and love it.  Worth sharing – reeve

Colin Powell’s 13 Rules on Leadership

  1. It ain’t as bad as you think. It will look better in the morning.
  2. Get mad, then get over it.
  3. Avoid having your ego so close to your position that when your position falls, your ego goes with it.
  4. It can be done.
  5. Be careful what you choose: you may get it.
  6. Don’t let adverse facts stand in the way of a good decision.
  7. You can’t make someone else’s choices. You shouldn’t let someone else make yours.
  8. Check small things.
  9. Share credit.
  10. Remain calm. Be kind.
  11. Have vision. Be demanding.
  12. Don’t take counsel of your fears or naysayers.
  13. Perpetual optimism is a force multiplier.


Retire at 65 – or not?


Your assets matter more than your age.

Isn’t 65 the traditional retirement age? Perhaps, but baby boomers are modifying the definition of a traditional retirement (if not redefining it altogether). The Social Security Administration has subtly revised its definition of the traditional retirement age as well.

If you glance at the SSA website, the “full” retirement age for Americans born from 1943-1954 is 66, and it is 67 for those born in 1960 and later. (The “full” retirement age increases gradually from 66 to 67 for those born during the years 1955-1959.)1

When Social Security started, the national retirement age was set at 65. In 1940, a 21-year-old American man had a 54% chance of living another 44 years (according to the federal government’s actuarial estimates). By 1990, that chance had improved to 72%. For 21-year-old women, the probability of reaching age 65 increased from 61% to 84% in that same time frame. Americans also began living longer after 65. Increased longevity led to financial dilemmas for Social Security and the necessary redefinition of “traditional” retirement age.2

What do you lose by retiring at 65? The financial opportunity cost is considerable, and maybe greater than some baby boomers realize. If your full retirement age is 67, you’ll reduce your monthly Social Security income by around 13.3% if you start taking benefits at age 65. Moreover, for every year that you refrain from claiming Social Security until age 70, your Social Security benefits will rise by 8%.1,3

In addition to trimming your long-term retirement benefits, you may also forfeit some salary. If you are still working at age 65, you might be at or near your peak earnings level, and if that is the case, Social Security income may pale in comparison.

Think of life after 65 as your “third act” that needs funding. Do you think of 65 as late middle age? It may be. As the SSA website notes, about 25% of today’s 65-year-olds should live to age 90. About 10% of them should reach age 95. Even if that doesn’t happen for you, you should know that the average 65-year-old today can expect to live into his or her mid-eighties.4

Let those statistics serve as a flashing red light, illuminating two new truths of seniority. The first truth: for many Americans, “retirement” will represent 10, 20 or even 30 years of activity and opportunities. The second truth: to stay active and pursue those opportunities, retirees will need 10, 20 or 30 years of financial stability.

Most Americans haven’t amassed the equivalent 10, 20 or 30 years of retirement savings. Many want to “stay in the game” a little longer: a 2013 Gallup poll found that 37% of Americans expect to retire after age 65, compared with 14% in 1995.5

How many Americans can work full-time until age 65? The bad news is that according to the same Gallup poll, the average retirement age in America is 61. The good news is that it was 57 in 1991. Assuming we keep living longer and healthier, it seems plausible that the average age of retirement might hit 65 – if not for the boomers, then for Gen Xers.5

Regardless of when baby boomers retire, growth investing will continue to have merit. Even moderate inflation erodes purchasing power over time, and its effects can be felt in less than a decade. Who knows: the portfolios held by 65- and 70-year-olds in 2035 might look more like the ones they hold now instead of those held by their parents generations before.

When should you retire? If that question is on your mind to any degree, consider an evaluation of your retirement readiness – a review of what you have, an estimation of what you need and a clear look at the possibilities before you. It should be time well spent.

Reeve Conover may be reached at, or 877-423-9990

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.



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A tongue in check review of Health Care Reform

Coming Next – ObamaCAR

Beginning in 2016, all Americans will be required to have an automobile.  Technically called the ACA- Automobile and Car Act – ObamaCAR will guarantee affordable transportation to all Americans.  “After all, if you don’t have a car, you can’t get to work.  If you can’t work you can’t pay my salary,” one administration official was quoted as saying (off the record).

Here is how it works:  You have to have a car, and if you cannot afford one, you will be fined 1% of your income, even if you don’t have any income, because you don’t have a car to get to work.

If you earn less than $44,000 as a single, you will be entitled to a subsidy.  The government will pay for the monthly payment, at the Silver KIA level.  You can “buy up” to the Gold Cadillac or the Platinum Mercedes level for additional expense.  For those under 30, a Moped is available, but you have to provide your own helmet.

For families of 5 or more, a special “WallyWagon” level will provide you with the wood-paneled minivan of your choice.

There will no longer be any pre-existing exclusions to owning an automobile.  It won’t matter if you are a in jail, blind, have 12 DWI’s, filed for bankruptcy on Tuesday, or homeless.  Everyone is required to have a car.

“…and, our commitment to you,” said the spokesman, “is that you can keep your car if you like it.”  However, certain Minimum Accessory Requirements have to be met.  All cars must get more than 30 miles per gallon, City, and have enough torque to pull a 4000 pound trailer.  Heated seats and mirrors are required for safety.  “As long as you meet these simple minimum requirements, you can keep your car.”

American Indians with horses, Alaskan Eskimos with Dog Teams, and anyone living on an island with less than 500 people will be exempt.  Those over 75 will get the new MediCAR, where free transportation will be provided, and we will take your car away and give it to someone who can actually see from behind the wheel.

Employers with more than 50 employees must provide either automobiles or free CARpool transportation to all employees beginning 2016.  In Massachusetts, employers must also provide a fuel card to cover gasoline.  In California, any person who applies for a job, even if not hired, is required to be lent an electric car for a period not to exceed 90 days, or the next time they apply for work at any employer, whichever comes first.

Employers that do not comply can choose to pay a $3000 fine per year per person, or decrease all employee wages below the subsidy levels, thus allowing them to get a car.

Business Owners that have a car valued at more than $50,000, a helicopter, Pullmann car or a private plane of any type will be required to pay the “CadiJET Tax” – a surcharge of 10% of the value they received above and beyond the value normally received at the Silver KIA level.   As an example, the value of the Learjet ($7,800,000) – the value of the KIA ($10,000) = an excess value of $7,790,000.  That is spread over the life of the plane (10 years = $779,000) and you would pay a 10% tax ($77,900 a year) for the abusive non-green technology you have chosen.

“The ACA will provide affordable, employer-sponsored transportation to many Americans, and guarantee affordable access to all Americans regardless of their checkered past.  This bill will also pay for itself, between the employer penalties, reduction in greenhouse gases, CadiJET taxes, and individual mandates.  It is expected that  the parents of 16 year olds  will prefer to purchase a car on the exchange, rather than pay the 1% penalty on their childrens allowances.”

To Apply for your ACA benefits, simply go on the website which should be running no later than June 2019.



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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck