http://www.krdo.com/-/417342/14777692/-/14whxw2/-/index.html en-US © 2011 Internet Broadcasting Systems, Inc. Home Home en-US © 2011 Internet Broadcasting Systems, Inc. http://www.krdo.com/news/economy-tracker/-Grandparent-scams-steal-thousands-from-seniors/-/477266/20250142/-/hp0xdwz/-/index.html Across the country, law enforcement officials are warning seniors to beware of so-called "grandparent scams," in which fraudsters are impersonating a grandchild in distress -- and begging for cash. Such scams have become increasingly common. In 2009, the Federal Trade Commission recorded 743 incidences of scammers impersonating a family member or friend in need of money. Since 2010, the FTC has recorded more than 40,000 and it is estimated that many more go unreported. Ann and John Mykietyn never imagined they could be duped out of thousands of dollars. But then, last fall, they got a call from someone claiming to be their grandson, Daniel, that threw them into two days of panic. He told them he had been in a car accident while at a bachelor party in Mexico and needed $1,800 to get out of jail. The next day, he called back frantic that his wallet had been stolen and he needed $2,400 to get a new passport. Anxious to help their grandson return home, they sent two MoneyGram cash transfers to Mexico. They even sent a third after a man called claiming one of the transfers had been rejected. But when they never heard back, they realized that the caller hadn't been their grandson after all. The New Jersey residents had lost nearly $7,000 to a scammer. "You get angry at yourself for being so foolish, but you're in a panic mode," Ann Mykietyn said. "You don't want any harm to your grandchild. " They filed a report with local police, but their cash was already long gone. Police told them there is little chance their money will be recovered. Warnings about grandparent scams have been issued by law enforcement and Better Business Bureaus across the country in recent months. "It's everywhere. It's an epidemic," said Jean Mathisen, manager of the AARP's Fraud Fighter call center, which has fielded hundreds of calls about grandparent scams so far this year. While law enforcement officials have been cracking down on grandparent scammers operating out of boiler rooms in Canada, new criminals continue to pop up, said Steven Baker, director for the FTC's Midwest Region. Exactly how much has been lost to these scammers is unknown, but it's estimated to be in the tens of millions of dollars or more. One Michigan couple lost $33,000 of their life savings when a man pretending to be their grandson called, asking for cash to help him pay a fine and post bond to get him out of a Canadian jail. The typical M.O.: "Grandma (or grandpa), are you there?" a caller will say, prompting the senior to reveal a name or other identifying information. The caller then says they were in a car accident, mugged or incarcerated in a foreign country -- all emergencies prompting an urgent need for cash. Typically, the caller begs for secrecy, in order to prevent a quick phone call to the grandchild's parents to verify the story. When asked why their voice sounds funny, they'll usually claim their nose or mouth is injured. Once a victim wires money, more calls may follow, employing other callers who pose as attorneys, bail bondsmen or doctors. Security officials at money transfer services, Western Union and MoneyGram, say they work with law enforcement whenever possible. Western Union's transfer forms specifically warn senders not to send money for an unconfirmed emergency related to a grandchild or other family member. The company also trains employees to look for warning signs and gives them the authority to refuse transactions that they believe are fraudulent. MoneyGram also has a fraud warning on transfer forms and says it can put holds on transfers that raise red flags. Because once a transaction goes through, "it's picked up in minutes and it's gone," said Kim Garner, senior vice president of Global Securities and Investigations. Scammers are getting more sophisticated, however. In some cases, police suspect con artists are using online obituaries and social networking sites to profile their victims. In the Mykietyn's case, the caller somehow knew to call John Mykietyn "Gramps," when he answered the phone. It was the detail that hooked him, he says. "The other grandchildren call me Grandpa," he said. Tips to protect against grandparent scams Be suspicious of anyone who calls unexpectedly asking for cash. Verify any supposed emergency, by calling friends and family, before wiring money. Develop a secret code or "password" with family members that can be used to verify a true emergency. Limit personal information, such as vacation plans, shared on social media sites. For more tips, visit the Better Business Bureau's Scam Stopper site. To report a scam, contact the Better Business Bureau or the FTC. Wed, 22 May 2013 11:23:00 GMT 20250142 2013-05-22T11:23:00Z http://www.krdo.com/news/economy-tracker/Crowdfunding-sites-raise-thousands-for-Oklahoma-victims/-/477266/20250150/-/r22w9y/-/index.html Crowdfunding websites are seeing donations pour in following the deadly tornado that ravaged Moore, Okla. More than a dozen separate campaigns popped up on crowdfunding site, Fundly, less than 24 hours after the tornado swept through the Oklahoma City suburb, killing at least 24 people, injuring more than 200 and destroying hundreds of homes. The 2013 Midwest Tornado Relief campaign, which was launched on Fundly by nonprofit Mercury One, has brought in more than $600,000 from over 8,000 donors -- significantly more than its original goal of $50,000. Another crowdfunding site, HopeMob, has received $33,000 from more than 200 donors. Along with setting up campaigns for general aid efforts, many friends and families of victims are also launching fundraisers on GoFundMe for specific families who lost everything in the tornado. One fundraiser says its raising money for a couple who lost their home and are expecting a baby soon. So far, it has raised $3,400 out of a goal of $5,000. And nearly $1,000 has been donated to a fundraiser claiming to help a son and his missing mother. Crowdfunding is becoming increasingly popular in the wake of disasters. More than $1 million had already been raised for Boston victims just days after the April 15 bombings. And thousands of dollars were raised for West, Texas victims following the fertilizer plant explosion. To protect against scams, sites employ different methods to vet campaign organizers like researching them on social media, assigning a coach to work one-on-one with them and verifying that the bank account provided by the organizer is actually registered under that person's name. However, it can be difficult to confirm a fundraiser's identity 100 percent. Dave Boyce, CEO of Fundly, says that the direct impact of donating to a crowdfunding campaign is appealing to donors. "Needs are met directly -- a family in need, a church in need, a neighborhood in need. There is no large, bureaucratic organization the money has to filter through," said Boyce. It also gets the money in the hands of victims right away, since fundraisers can be set up within minutes, he said. Using crowdfunding specifically for medical expenses is also a growing trend. A 2-year-old West,Texas victim, for example, has received more than $26,000 in donations so far for the medical bills that her family is racking up after the blast flung her against a wall and pummeled her with glass. GiveForward, a crowdfunding site specifically for medical expenses, expects to see fundraisers being set up for Oklahoma in coming days, once the medical needs in the community are known. Wed, 22 May 2013 11:00:06 GMT 20250150 2013-05-22T11:00:06Z http://www.krdo.com/news/economy-tracker/data-huge-disparity-in-medicare-payment-rates/-/477266/20250098/-/n988hn/-/index.html Get a hip replaced at Olympia Medical Center in Los Angeles, and Medicare will pay the small, doctor-owned hospital $15,585, or about 13% of what Olympia charged in the bills it submitted. But go less than six miles away to Ronald Reagan UCLA Medical Center for the exact same procedure, and Medicare will reimburse the facility nearly $26,000, or almost 30% of what it billed. The wide variance between hospital charges and Medicare payments came into the spotlight after the Centers for Medicare & Medicaid Services released detailed data on hospital billing earlier this month. CNNMoney analyzed the data and found that payments for joint replacements vary from as low as $9,100 to more than $38,600. The disparity has to do with the location, mission and clientele at each medical center. Medicare pays a rate that's set by law for various procedures. What the hospital actually charges -- $117,449 in the case of Olympia, and $87,418 for UCLA -- doesn't matter. And hospitals that agree to accept Medicare, which nearly all do, cannot bill patients for any unreimbursed costs. But Medicare also pays a little extra to certain hospitals, like those that are in an expensive area, treat a lot of uninsured or sicker patients, or serve as a teaching hospital for recent medical school graduates. "The disparities in Medicare payments are linked to different circumstances," said Brian Cook, spokesman for the Medicare agency. "We think that's a fair price." These adjustments can add up to a much heftier check. For instance, Medicare pays an average of $54,682 for a major heart procedure at the University of Maryland Medical Center in Baltimore, compared to $14,550 to Springhill Medical Center in Mobile, Ala. In the Los Angeles case, Medicare pays UCLA more because it serves as both a teaching hospital and a transplant center, and has higher uncompensated costs for care. UCLA also treats a higher percentage of sicker patients than its smaller rival. But hospitals say they are losing money on Medicare patients, to the tune of nearly $24 billion a year, according to Caroline Steinberg, vice president of the American Hospitals Association, an industry trade group. Hospitals say that forces them to bill patients with private coverage more. For every $1 a hospital actually spends on care, Medicare generally reimburses 90 to 95 cents, according to the trade group. Private insurers usually pay $1.34 per dollar of expenses. While the federal government released the data in hopes of helping consumers better understand the cost of health care, the information shows how hard it is to untangle what procedures cost and what the payment should be, said Stuart Guterman, vice president at The Commonwealth Fund, which advocates for a better health care system. He was surprised to see the wide variation in Medicaid payments, and would like more detailed data on what specific procedures cost and what gets reimbursed. "How do we figure out what the right amount is to pay for good health care?" he said. The Medicare data can at least give patients a starting point for negotiating their charges. That's particularly true for the uninsured or those with high-deductible plans, said Dan Mendelson, chief executive of Avalere Health, an advisory company for insurers. "It's important for consumers to be aware of the disparity between hospital charges and Medicare payments," he said. Wed, 22 May 2013 10:59:44 GMT 20250098 2013-05-22T10:59:44Z http://www.krdo.com/news/economy-tracker/Stocks-end-at-record-highs-ahead-of-Bernanke/-/477266/20234774/-/ygmwcf/-/index.html Investors pushed stocks higher into record territory Tuesday after comments from a Federal Reserve official raised hopes the central bank will continue to pump money into the financial system. New York Federal Reserve president William Dudley said the Fed needs to rethink its current exit strategy, although he stressed that it could involve both increasing or decreasing the pace of its bond buying program. Investors have been paying close attention to comments from various Fed officials recently as they attempt to gauge when the central bank will begin to taper off its stimulus programs. Dudley said the uncertain outlook for the economy makes it difficult to say which direction the Fed will take. That ambiguity helped ease concerns that the central bank may be moving toward a more rapid exit strategy, according to Steven Ricchiuto, chief economist at Mizuho Securities USA. "Dudley may have made the chairman's job easier tomorrow," Ricchiuto said. "He clearly aligned himself with the no taper crowd." Fed chairman Ben Bernanke will discuss his outlook for the economy Wednesday before Congress. The Dow Jones industrial average and S&P 500 both closed at record highs Tuesday, gaining 0.3% and 0.2% for the day. The Nasdaq added 0.2% to end at its highest level since 2000. Bernanke on deck: Stocks have rallied more than 16% so far this year, driven by improving economic data and the Fed's easy monetary policies. But investors have been unwilling to push stocks much higher this week, ahead of Bernanke's testimony, said JJ Kinahan, chief derivatives strategist at TD Ameritrade. The S&P 500 shot up from 1,600 to 1,670 "like a hot knife through butter," he said. "Now some people are wondering if we have to capitulate in order to stay higher." Bernanke's comments may provide the catalyst for stocks to move "one way or the other," said Kinahan. In the meantime, traders were keeping tabs on two widely-followed companies: JPMorgan and Apple. CEOs in the hot seat: JPMorgan shareholders rejected a proposal to split the roles of chairman and CEO, both held by Jamie Dimon. The move is a major victory for Dimon, who has been under fire since JPMorgan lost $6 billion on derivatives in the so-called London Wale trade. Apple was also in focus as CEO Tim Cook and other executives appeared on Capitol Hill to testify about the company's tax practices. A report released Monday by Senators John McCain and Carl Levin criticized Apple for its use of obscure subsidiaries and accounting tactics to reduce its tax burden. Cook defended Apple's policies and urged lawmakers to overhaul the nation's tax code. Home Depot and Best Buy: Shares of Home Depot rose after the home improvement retailer reported quarterly increases in revenue, profit and same-store sales. The company cited an improving housing market and raised its sales guidance for the fiscal year. Home Depot also benefited from the reconstruction effort in areas hit by Hurricane Sandy. On the flip side shares of Best Buy slid after the electronics retailer widely missed sales forecasts. Dick's Sporting Goods stock reversed earlier losses after the retailer missed revenue forecasts and issued guidance in line with estimates. Cruising for a bruising. Shares of Carnival stumbled after the cruise ship operator slashed its earnings forecast, and said it was cutting prices in an effort to attract customers back onto its ships. The sour forecast shows how Carnival continues to suffer from a number of high-profile incidents, including last year's Costa Concordia disaster which led to the loss of 32 lives. Yahoo shares rose after the company announced a revamped version of photo-sharing service Flickr late Monday, just hours after confirming it was buying blogging site Tumblr. European markets ended higher, with London's FTSE 100 trading at 14-year highs. Asian markets ended mixed. Wed, 22 May 2013 10:23:34 GMT 20234774 2013-05-22T10:23:34Z http://www.krdo.com/news/economy-tracker/Tornado-victims-may-face-long-haul-with-insurers/-/477266/20250114/-/1wo8xxz/-/index.html The tornado that struck the Moore, Okla., area Monday afternoon left an almost 2-mile wide path of destruction, flattening homes and businesses and taking at least 24 lives. Survivors now must begin the arduous process of rebuilding their lives, and in many cases, their homes. Unfortunately, that will mean filing insurance claims, trying to recall the value of a lifetime of belongings -- and, in some cases, fighting for what they are owed. Fortunately, people whose homes were damaged or destroyed should be fully covered for the damages, said Robert Hartwig, president of the Insurance Information Institute. Standard homeowner's insurance policies cover the destruction caused by high winds, hail and the rain that enters through damaged roofs and walls, he said. That contrasts with hurricane damage, which requires special insurance for any flood damage and often carries heavy restrictions, including so-called "hurricane deductibles," which require homeowners to pay a percentage of the home's value before the insurance kicks in. Insurers should also be able to respond to tornado victims more quickly, said Hartwig. "After Superstorm Sandy, there were 1.5 million claims," he said. "This storm will involve a few thousand." Yet, homeowners will still have to be on alert for insurers looking to limit their losses, said attorney Mike Doyle of Texas-based firm Doyle Raizner. Doyle, who is part of the Renew Joplin Legal Team, represents 15 victims who claim they were ill served by their insurers after the massive Joplin, Mo., tornado in May 2011. That storm killed 161 people, destroyed more than 7,000 homes and caused $2.8 billion in damages, the most expensive tornado in U.S. history. Some insurers may try to lowball damage estimates, then delay making the payments in hopes of getting the homeowner financially desperate enough to accept a settlement that falls short of paying for all repairs, said Doyle. Homeowners should also watch out for obscure clauses in policies that require repairs to be completed within six months, which can be a tough deadline to meet when insurers are dragging their feet, he said. "It's a Catch-22," said Doyle. "They require homeowners to rebuild quickly but they withhold the money homeowners need to get the work started." Doyle stressed that most insurers handle the claims responsibly. Of the 7,000 properties that sustained damage in Joplin, a few hundred claims are in dispute, he said. Gary Esson, an ex-Army officer, was huddled in the basement when the 2011 tornado hit. "I heard the roar, the train sound everyone talks about," he said. The funnel cloud came close enough to damage the roof and siding and blow the house slightly off its foundation The claims adjuster from insurer USAA showed up a couple days later but couldn't find much damage, estimating it at $733, less than his $1,000 deductible. "I got a second opinion, an independent adjuster who put the damage at $27,000 to $30,000," said Esson, speaking from Afghanistan where he works as an independent contractor. "We presented the new figure; the company denied it." USAA has brought the amount to $18,000, according to Patrick Martucci, Esson's attorney. But Esson refuses to settle. He said the damage has increased, and mold is now growing in the house. As of press time, the attorney representing USAA in the claim had not responded to a call for comment. To make sure storm victims get the settlement they deserve, they should document all the damage to the home by taking photos and compiling lists of damaged or missing belongings. They should also keep records of their storm-related expenses like bills from meals, hotels and transportation costs. Roy Winans and his wife, Beverly, lost their home of 20 years in the Joplin tornado and say their experience with the insurance company couldn't have gone more smoothly. "We were cleaning up the lot the next day when a State Farm truck came down the street and stopped," said Winans, who is a retired natural gas worker. The insurer set up a temporary office nearby where Winans and other clients could visit to collect living expenses. After a few weeks, they received a check for their house and soon after that, they bought a new one. Eventually, they pieced together a list of all of the property they lost and submitted it to State Farm, which informed them they had undervalued their belongings and paid them more than they had asked. For the Winans, they were happy to avoid a battle with their insurer over the claim. Recovering from the storm was difficult enough. "It's been a trying two years," Roy Winan said Tuesday, the second anniversary of the Joplin tornado. "It's cloudy today and we've been hearing storm sirens. My niece lives down in Moore, two blocks from where the school was hit [by Monday's tornado]. My whole family has been impacted by these storms." Wed, 22 May 2013 10:15:17 GMT 20250114 2013-05-22T10:15:17Z http://www.krdo.com/news/by-the-numbers-internal-revenue-service/-/417220/20184458/-/v7juj1z/-/index.html The controversy over the extra scrutiny the Internal Revenue Service imposed on some conservative groups seeking tax-exempt status could take a new turn Wednesday when IRS official Lois Lerner is expected to assert her Fifth Amendment right against self-incrimination at a House Oversight Committee hearing. Lerner's decision essentially not to testify will follow a Senate Finance Committee hearing Tuesday where former IRS Commissioner Douglas Shulman and ousted Acting Commissioner Eric Miller both testified. By the numbers, here's a look at the IRS: $2,524,320,134,000 - Total taxes collected by the IRS in fiscal year 2012. 146,244,000 - Total tax returns received for individual income tax returns in fiscal year 2012. 70 - Percentage of closed applications for tax-exempt status that were approved in fiscal year 2012 during an initial review with little or no additional information from the organizations. 2 - Employees in the IRS Cincinnati office accused of being principally responsible for "overly aggressive" handling of requests by conservative groups for tax-exempt status, according to a congressional source. 298 - Cases as reviewed by the IRS inspector general as potential political cases not eligible for tax exempt status as of May 31, 2012. 72 - Case files under review where the organization's name contained "Tea Party." 13 - Cases under review where the name included the word "Patriots." 160 - Cases under review that had been held open for at least 206 to 1,138 days (almost three years). 121 days - The IRS's overall goal for completing each application for tax-exempt status. 66,543 - Number of applications received by the IRS in fiscal year 2012 for 501(c)(3) tax-exempt status. 3,357 - Number of applications received by the IRS in fiscal year 2012 for 501(c)(4) tax-exempt status. 2,042,458 - Total number of notices to taxpayers that they had made a math error on their 2011 return. 707,768 - Number of notices of federal tax liens filed, for fiscal year 2012. 1,973 - New investigations filed in fiscal year 2012. (An investigation begins when the taxpayer doesn't respond to delinquency notices.) 10.3 - Audit examination rate per thousand individual income tax returns in fiscal year 2012. 55 - Percentage of Americans who said in April 2013 they thought the amount of federal taxes they had to pay was fair, according to a Gallup Poll. It was the lowest percentage since 2001. 29 - Percentage of Americans who told the Pew Research Center in April 2013 they actually like doing their taxes! Wed, 22 May 2013 00:26:19 GMT 20184458 2013-05-22T00:26:19Z http://www.krdo.com/news/economy-tracker/FEMA-offers-aid-to-tornado-victims/-/477266/20241006/-/g6d7o5z/-/index.html The Federal Emergency Management Agency announced a series of aid programs available to tornado victims who live in one of the Oklahoma counties declared a disaster area by President Obama. The agency had already been putting boots on the ground in Oklahoma as early as Sunday when the state suffered the first of a wave of deadly tornadoes. It has since brought in rescue teams from Texas, Nebraska, and Tennessee. On Monday, the president declared the counties of Cleveland, Lincoln, McClain, Oklahoma, and Pottawatomie disaster areas, making federal funds available for recovery efforts. "We very much appreciate the support and quick action of President Obama in approving Oklahoma's request for federal disaster assistance in the wake of today's devastating storms," said Governor Mary Fallin in press conference Tuesday. FEMA said it will make the following assistance available to victims of the storm: Rental assistance for people whose homes were destroyed. The payments would last up to three months for homeowners and one month for renters. Grants for certain home repairs and belongings that are not fully covered by private insurance. Grants to pay for medical, dental, funeral services and transportation costs not covered by private insurance or other aid programs. Unemployment payments for up to 26 weeks for workers idled by the storm who don't qualify for state benefits. Low-interest loans. These will be available to cover several classes of losses, such as for homeowners not fully covered by insurance. Loans will be in amounts of up to $200,000 for primary residences and $40,000 for personal property; up to $2 million for business owners and for agricultural cooperatives and private, non-profit organizations that suffered cash flow problems and need working capital. There will also be up to $500,000 loans made available for farmers, ranchers, and aquaculture operations. Crisis counseling services for those traumatized by the event Advisory services to help those filing for casualty losses or who need help with Social Security and veterans benefits or legal matters. Those who need help can register at www.DisasterAssistance.gov to begin the process or call 1-800-621-FEMA (3362). Applicants should try to have documents in hand like their insurance policies and an outline of their losses. Tue, 21 May 2013 20:52:49 GMT 20241006 2013-05-21T20:52:49Z http://www.krdo.com/news/economy-tracker/Apple-grilled-about-tax-havens/-/477266/20236938/-/obiyik/-/index.html Apple executives defended the company's tax strategy on Capitol Hill Tuesday, claiming that it pays one of the highest effective tax rates of any major corporation. A Senate panel called the hearing to examine what committee leadership said was the iPhone maker's strategy of shifting income to an Irish subsidiary to avoid paying U.S. taxes. Apple officials said the money resided with its overseas operations, such as those in Ireland, not to avoid taxes but because of the growth of Apple's sales overseas. Apple CEO Tim Cook said the company paid an effective tax rate of 30.5% on profits it made on U.S. sales. He said Apple paid $6 billion in U.S. corporate taxes last year and expects to pay more this year. "I'm often asked if Apple still considers itself an American company," Cook said. "My answer always has been an emphatic "Yes.' We are proud to be an American company, and equally proud of our contributions to the U.S. economy." He said Apple has never considered moving its headquarters out of the United States. "It's beyond my imagination, and I have a pretty wild imagination," Cook said in response to a question. Michigan Sen. Carl Levin, chairman of the Senate's Permanent Subcommittee on Investigations, and ranking member John McCain of Arizona both started the hearing with withering criticism of Apple's practice of shifting income to Ireland to avoid paying U.S. taxes. Levin, a Democrat, called the practice a "sham," while McCain, a Republican, said that Apple's claims that it use of the Irish subsidiary did not reduce its U.S. taxes is "demonstrably false." "U.S. corporations cannot continue to avoid paying their appropriate share in taxes," said McCain. "Our military can't afford it. Our economy cannot endure it. And the American people will not tolerate it." McCain asked Cook: "Can you see there's a perception of an unfair advantage here?" "Honestly speaking, I don't see it as being unfair," Cook replied. "I'm not an unfair person. That's not who we are as a company." Cook said Apple strongly supports corporate tax reform and that it was happy to testify at the hearing if it would advance the chance of such reform being passed, even if it raised Apple's own tax bill. The comments came on top of a report released Monday by Levin and McCain detailing Apple's tax strategy. Apple has $144 billion in cash. But more than $100 billion of that is overseas. If Apple were to try to bring that cash back to the United States, it could be taxed at the top corporate tax rate of 35%. Apple did garner support from one corner: Sen. Rand Paul of Kentucky, who said he was offended by the hearing. "Tell me one of the politicians up here who doesn't minimize their taxes. Tell me a chief financial officer you would hire if he didn't try to minimize taxes legally. Tell me what Apple has done that is illegal," said Paul. He said that Congress should apologize to Apple for calling it before the committee, and for a tax system that is "bizarre and Byzantine." "Money goes where it's welcomed," Paul said. "Currently our tax code makes money not welcomed in this country." Levin struck back at Paul, saying the committee was doing nothing wrong looking at the issue of offshore tax havens and Apple's tax practices. "Apple is a great company, but no company should be able to determine how much it's going to pay in taxes...using all kinds of gimmicks to avoid paying the taxes that should be paid to this country," Levin said. "The people know it's not right." Even the critics of Apple at the hearing did not claim that it was doing anything illegal with its tax strategy, they were only saying that the way the current tax system is now set up was bad policy. "Everyone agrees, apparently, (that) we have to change the system," Levin said. "How we do it, we may not agree to." The other area of widespread agreement at the hearing was praise for Apple products, particularly the iPhone. But McCain got laughs when he told Cook, "What I really wanted to ask you is why I have to keep updating the apps on my iPhone all the time, and why you don't fix that." Cook responded that they were trying to make the products better all the time. Tue, 21 May 2013 20:13:13 GMT 20236938 2013-05-21T20:13:13Z http://www.krdo.com/news/economy-tracker/JPMorgan-s-Dimon-wins-by-a-landslide/-/477266/20237070/-/gmidry/-/index.html Once again Jamie Dimon sailed above his detractors, but JPMorgan's board didn't fare as well. One of the most highly anticipated shareholder meetings of 2013 came and went with Dimon seemingly even more entrenched in his roles as chairman and CEO after just 32.2% of shareholders called for an independent chairman at the company's annual shareholder meeting in Tampa, Fla. Last year, 40% voted in favor of splitting the roles. "This vote clearly deflects the conversation of whether Dimon should stay on as chairman," said Leon Kamhi, executive director of Hermes, one of the funds pushing for an independent chairman. The conversation quickly turned to JPMorgan's board, where three directors who sit on JPMorgan's risk committee were also re-elected, but by much narrow margins. They won between 51% to 59% of the votes. "This was a clear expression of no confidence in the board risk oversight," said Michael Garland, assistant comptroller of New York City's pension funds. All three -- Honeywell CEO David Cote, private investor Henry Crown and American Museum of Natural History president Ellen Futter -- presided over the bank's risk committee during the London Whale trades. Last year Futter received 86% of the vote, the least of all 11 directors. This year, she was the only director who was a no-show. JPMorgan's lead independent director Lee Raymond signaled there may be big changes coming to the risk committee, telling shareholders to "stay tuned." Several hundred shareholders attended the meeting and repeatedly questioned whether JPMorgan's board is independent enough and whether its risk committee has the appropriate experience. Raymond gave shareholders an unnerving defense of the board's risk controls, citing the London Whale trade that ultimately cost the bank $6 billion. The traders didn't understand the complexity of the derivatives they were trading, Raymond said, so the risk committee shouldn't have either. The London Whale debacle is the largest and most high profile lapse in the bank's internal controls, but Dimon admitted that it's just one of many issues that the bank has had with regulators. JPMorgan has faced criticism from U.S. banking regulators over its mortgage foreclosure practices, its possible manipulation of the electricity market in California and Libor. Dimon also conceded that the bank may face more regulatory problems going forward. "There's some significant regulatory tail risk for JPMorgan, and that's not going away," said CLSA bank analyst Mike Mayo, who attended Tuesday's meeting. "I'm not sure the regulators view the decision today as favorably as the stock market currently does." Shares of JPMorgan rose about 2% following the vote. JPMorgan's board, which has been under attack from certain shareholders and shareholder advisory firms for not being independent enough, firmly backed Dimon as CEO and chairman. "We don't think this is the time for disruption," Raymond said. Raymond bristled when Mayo questioned his independence and that of the other board members, noting that they all got to high leadership positions by not being "wallflowers." Dimon meanwhile appeared more reserved and even tempered than usual while responding to shareholder criticisms. Immediately after the meeting wrapped up, Dimon flew back to New York to wrap up work for the day and then celebrate his 30th wedding anniversary. Tue, 21 May 2013 19:31:06 GMT 20237070 2013-05-21T19:31:06Z http://www.krdo.com/news/economy-tracker/africanamericans-more-financially-confident-but-underserved/-/477266/20237306/-/bd1vuq/-/index.html While the average African-American is feeling more financially secure, many still feel neglected by the financial industry, new research shows. Half of African Americans say their financial situations have improved from a year ago, compared to 33 percent of the general population, according to a Prudential report released Tuesday. The survey polled 1,153 people who identified as African-American or black and a general sampling of 471 Americans. African-Americans are also significantly more confident about making financial decisions. Nevertheless, they get 13 percent less contact from financial advisers, and only 26 percent of respondents feel that a financial firm has "effectively engaged and shown support for the African-American community." As a result, only 19 percent have financial advisers, compared to 30 percent of the overall population. Yet on average, African-Americans find the financial industry to be more trustworthy than the general population does, and more than half say a financial adviser could help them -- making this underserved population an untapped opportunity for financial firms, Prudential found. And the need for help is there. Debt is the No. 1 concern among the African-American population, according to the survey. The median household had $18,000 in non-mortgage debt -- including student loans, credit cards and personal loans. That's 50 percent more than the general population. And those with college degrees were twice as likely to have student loan debt than the average college-educated American. With higher debt, it's often harder to build savings. Median household savings is only $40,000 for African-American households, compared to $97,000 nationally. When a college education is added to the equation, household savings rises to $66,000 for African-American households but jumps to $207,000 for the average American household. African-American respondents were half as likely to have long-term investments like stocks, bonds and mutual funds. Yet they were significantly more likely to be financially supporting someone who is unemployed, as well as grandparents, parents, children and grandchildren. Tue, 21 May 2013 18:01:04 GMT 20237306 2013-05-21T18:01:04Z http://www.krdo.com/news/economy-tracker/Make-30-an-hour-no-bachelor-s-degree-required/-/477266/20232868/-/mock0y/-/index.html No college degree? No problem. Become a Web developer. The job is growing quickly, offers a median salary around $30 an hour, or $62,500 a year, and does not necessarily require a bachelor's degree. That's because companies can't meet all the demand for workers. The job is still too new, and the labor pool is not quite large enough yet. "There aren't enough bodies to fill all the seats," said Judi Wunderlich, co-founder of WunderLand, a Chicago recruiting firm specializing in digital, marketing and creative jobs. Computer-related jobs are expected to grow by about 22 percent between 2010 and 2020, according to the Bureau of Labor Statistics. And for Web and mobile developers specifically, traditional college programs can hardly keep up. Even though many schools offer computer science courses, the field is changing so rapidly. The curriculum is rarely the same from year to year. "If somebody wants to get into this job, it just doesn't make sense to get a college degree," Wunderlich said. As of 2010, about 38 percent of Web developers had less than a four-year college degree, according to Census data. Instead, many workers in this field are self-trained. Take for instance, Matt Kenefick. Growing up, he devoted himself to learning how to code. He viewed it mostly as a hobby and actually intended to become an architect. After just a few weeks in college though, architecture lost its appeal. At 18, he dropped out and turned to coding as a full-time job. With little more than a high school diploma in hand, he started making around $65,000 a year. Since then, he has worked for Percolate, Vimeo and other startups, and now, at age 25, he's earning more than six figures. "Nobody really cares about your education in this field -- it's can you do it, or can you not?" he said. "Now, when I interview people and they list schooling on their resume, instead I ask, 'show me what you've done.'" For beginners attracted to this field, some online programs like Codeacademy offer free training. Meanwhile, intensive training programs, which can cost several thousand dollars, are also popping up in major cities. In Chicago, The Starter League offers a three-month class in web development for $8,000, and Mobile Makers offers an eight-week course in building iPhone and iPad apps for $7,000. General Assembly offers 12-week programs in various locations including New York, San Francisco, Los Angeles and Boston. That program costs $11,500. You can also learn the old-fashioned way. Chris Lemke was driving trucks for a living, when he picked up two books on building mobile apps, back in December 2011. "I liked math and decided to give it a whirl," he said. " A month or two later, I had a tipping calculator in the App Store." About a year after tinkering on his own, the 29-year-old Lemke scored an apprenticeship with VOKAL Interactive, and is learning the rest on the job. To say this occupation is attainable for anyone though is a bit of stretch. It still requires some math chops and long hours of practice. "You have to be a self-starter to go along with this," Kenefick said. "In the beginning, it was literally all day and all night, day after day, I was practicing and building up my portfolio. I'm pretty sure it's more work than going to college." Web developer is among CareerCast's list of "best jobs that don't require four-year degrees." Other jobs on the list include plumber, electrician, paralegal and industrial machine repairer. Tue, 21 May 2013 16:10:57 GMT 20232868 2013-05-21T16:10:57Z http://www.krdo.com/news/economy-tracker/Seniors-losing-savings-to-pension-advance-firms/-/477266/20233100/-/yjybo5/-/index.html Federal and state officials are looking into so-called "pension advances," deals they say are digging retirees and military veterans deep into debt, while also putting individual investors at risk. The advances, in which retirees sign away a portion of their monthly pension check for an upfront cash payment, hit pensioners with hidden fees and interest rates of 35% or higher, critics say. Investors, who usually provide the upfront cash, can also face high fees as well as the risk of losing their investment if the pensioner stops paying. On Monday, a U.S. Senate committee said it is investigating pension advances to determine whether the deals come with "illegally high rates of repayment interest" and defraud or mislead investors. Pension advance firms use the Internet and ads in niche publications to market the deals (also called "pension sales" or "buyouts") to those with military, government or corporate pensions. Here's how they work: In exchange for a lump sum cash payment, pensioners give up all or some of their monthly pension checks for a period of time, usually for between five and 10 years. In many cases, the upfront cash is provided by individual investors -- often retirees themselves -- who are drawn to the promise of a low-risk investment that provides monthly payments with an annual return of 7% or higher. But there is a costly flip side to these deals: They often include additional fees that help push the effective interest rates on the loans to anywhere from 27% to 106%, according to an analysis by the National Consumer Law Center. Often, the retiree is required to purchase a life insurance policy -- with the firm or investor named as the beneficiary -- to insure that the pension payments continue. The firms usually claim the advances do not qualify as loans so they do not need to follow banking regulations, such as providing written disclosures of the effective interest rates. Yet some state regulators, like New York's Benjamin Lawsky, say the advances appear to be "payday loans in sheep's clothing." New York's Department of Financial Services announced this month that they are investigating 10 pension advance firms to determine if they committed fraud, used deceptive advertising or violated state usury laws, which limits the interest rates charged on loans. Massachusetts is also investigating many of the same firms. Only one of the firms under investigation responded to requests for comment. That firm, Veterans Benefit Leverage, says that its transactions are legal and customers are aware of the costs. And while federal law bans the "assignment" of a military veteran's retirement or disability pension to a third party, the firms say the transactions are legal since the pensioner retains control and makes payments out of their own bank account each month. Still, some judges have ruled that the advances are illegal and unenforceable, meaning pensioners have the right to stop payments -- leaving the investor high and dry. With his credit ravaged by money troubles and an earlier personal bankruptcy, Charles Steen, a 71-year-old Corona, Calif., resident, was unable to get a credit card or bank loan to help make ends meet. To help him pay off payday loans, he took out an advance against his $1,028 monthly retirement pension from his years working at Hunt-Wesson Foods, now owned by ConAgra. In exchange, he received an $8,000 payment from Cash Flow Investment Partners, a firm that is currently being investigated by the state of New York. Steen said he agreed to make monthly payments of $284 for five years. By the end of the advance term, he'll have paid $17,040, which works out to an effective APR of 35%. Once the advance's $300 "origination fee" and the extra $86 a month he pays on the 10-year life insurance policy that he had to take out to secure the deal is added in, the effective interest rate tips even higher. "It was my only option," he said. Investors should also be wary of the deals, which are usually not subject to oversight by the Securities and Exchange Commission, can carry commissions of 7% or higher and are difficult to liquidate, federal officials said. In April, the Arkansas Securities Commissioner issued a cease and desist order against Little Rock-based Voyager Financial Group, LLC, alleging it had illegally arranged the sale of pension payments to hundreds of investors without properly registering them as securities. Less than a year after 50-year-old California resident Lawrence Vicari spent $62,574 to purchase $90,000 worth of pension payments over a decade through Voyager, the pensioner stopped making the monthly $750 payments, said his attorney Suzelle Smith. "The investor pays out their money, and then that money is gone," Smith said. "He's lost what he had hoped would be a secure investment, largely for medical bills." Vicari filed a class-action lawsuit against Voyager, alleging that he and other investors had been misled to believe that their investments would be "risk-free." Christopher Shaw, Voyager's attorney, said that Vicari was clearly warned of the possible investment risk within the signed contracts. Tue, 21 May 2013 16:08:23 GMT 20233100 2013-05-21T16:08:23Z http://www.krdo.com/news/economy-tracker/How-Tesla-s-rivals-support-Tesla/-/477266/20232516/-/4ru5noz/-/index.html Upstart electric car maker Tesla Motors is receiving a huge windfall from an unlikely source: competing automakers. The company is bringing in millions of dollars by selling credits from California and 10 other states for selling electric vehicles. Buying the credits are automakers that are concerned they won't able to meet tough new environmental regulations requiring that more than 15 percent of sales in the 11 states be zero-emissions vehicles by 2025. If they fall short of those sales goals, they can avoid penalties -- and bad publicity -- by buying credits from other automakers. Small automakers are not required to meet the rules. And since Tesla sells nothing but electric cars, it is rolling in the credits, making them one of the few sellers of the credits in a seller's market. In the first quarter, Tesla sold nearly $68 million of the zero-emission credits to other automakers. That represented 12 percent of its overall revenue, or an average of about $17,350 per vehicle sold. It also dwarfed the $11.2 million in net income that represented the company's first quarterly profit, and helped to send Tesla stock soaring. Shares are up more than 165 percent so far this year. Tesla has not given out details of its zero-emission credit sales, but it has disclosed that Honda Motor is one of the buyers. Some analysts say the credits should stay a significant source of money for Tesla in the years ahead. "They're in a position to potentially corner the market," said Adam Jonas, auto analyst with Morgan Stanley, who estimates that the credits will come to $188 million this year alone. Tesla won't comment on the zero-emission credit estimates from Jonas or others. Founder Elon Musk told analysts earlier this month that his profit targets for the company are not dependent on any money coming from the sale of the credits at the end of this year. "We will sell them if we can," Musk said. "But... for purposes of modeling our financials, I'd recommend assuming 0 percent credits in (the fourth quarter.)" But Jonas said that Tesla's caution about future zero-emission credit revenue is a way to avoid raising investor expectations in what is still a volatile ad unproven market. "I think they're embarrassed how much money they're making on this," Jonas said. Jonas said the money is enough to fund Tesla's capital expenditure, including research and development that's key to developing a mass-market electric car in addition to its current $69,000 Model S. He can't say if Tesla is using the money to lower the price of its cars to consumers, but he believes its customers are benefiting from the start-up automaker's unusual source of cash. "They can put the money to use a number of different ways," Jonas said. "They could be bring out charging stations faster this year -- giving away free electricity is great marketing. They can put it into technology, or into their residual price guarantee. All those things benefit both the customers and the company." And the strong balance sheet is one of the things helping to convince investors that Tesla has the resources it needs to have staying power, and to take on the well-entrenched auto industry. Tue, 21 May 2013 12:45:11 GMT 20232516 2013-05-21T12:45:11Z http://www.krdo.com/news/economy-tracker/Yahoo-rolls-out-update-to-make-Flickr-awesome-again/-/477266/20227138/-/14q4wfpz/-/index.html The Internet asked Marissa Mayer to "please make Flickr awesome again," and in turn, the Yahoo CEO is revamping her company's photo-sharing service. The redesign is a complete overhaul of Flickr's previous text-and-white-space layout, with a focus on larger, full-bleed images. The new Flickr homepage offers "endless scrolling," a la Pinterest and features huge photos on the left side of the page, with smaller pictures and social options on the right. Personal photo pages also got a revamp that focuses on big images. Photos won't lose any fidelity when they're uploaded and shared, and all Flickr users now get a whopping one terabyte of storage, which is more than 537,000 photos. Yahoo also released a new Android app, following an Apple iOS release in December. "Flickr didn't fare so well" after Yahoo acquired it in 2005, Mayer admitted. Both ex-employees and users complained the company wasn't putting enough development resources into Flickr. The once hot service seemed destined to be on Yahoo's dreaded "sunsetting" lists. As soon as Mayer became CEO last July, "save Flickr" campaigns popped up, beseeching her to help. "Thank you, Internet, for being so awesome," said Adam Cahan, Yahoo's senior vice president of product and mobile. "That was a call to action for us." "Marissa asked us to completely re-imagine Flickr," Cahan added later during the event, a splashy but relatively small affair at a hotel in New York City's Times Square. Photos papered the walls, sat under floral centerpieces and flashed across TV screens. Yahoo also announced it will take over the former New York Times building in Times Square, and all 500 New York Yahoo employees will be now be housed in one office. New York City Mayor Michael Bloomberg spoke briefly. He joked about how "yahoos" -- that is, prostitutes -- once clogged up Times Square, "but now we'll have Yahoos making an honest living." Yahoo announced Monday's event the Friday before, one day after tech blog AllThingsD reported the company was close to a buyout of blogging site Tumblr. Speculation was high that Monday's event would focus on Tumblr, but Yahoo ended up announcing the $1.1 billion deal in the morning. "Did Yahoo buy Tumblr just to get us to come to an event for Flickr?" BetaBeat journalist Kelly Faircloth tweeted. During a post-event Q&A, most journalists' questions focused on Tumblr. Mayer was eager to focus on Flickr, but said her company doesn't "intend to" limit or censor content on Tumblr. Tue, 21 May 2013 10:32:13 GMT 20227138 2013-05-21T10:32:13Z http://www.krdo.com/news/tea-party-group-files-lawsuit-against-irs/-/417220/20228166/-/u19lr3z/-/index.html A Northern California tea party group filed the first lawsuit against the U.S. government stemming from the Internal Revenue Service targeting of conservative groups for more scrutiny as they applied for tax-exempt status. "The IRS and its agents singled out groups like NorCal Tea Party Patriots for intensive and intrusive scrutiny, probing their members' associates, speech, activities and beliefs," the suit claimed on Monday. "NorCal and its members suffered years of delay and expense while awaiting the exemption and spending valuable time and money answering the IRS' questions. The result was a muffling and muzzling of free expression" the lawsuit claimed. The group alleged violations under the Privacy Act as well as violations of its constitutional rights guaranteeing free expression and equal protection under the law. It is asking for unspecified damages and named the IRS, Treasury Department and unnamed current and former IRS employees. NorCal Tea Party Patriots first applied for the tax-exempt status in March of 2010 but it took more than two years to receive it. The inspector general for the IRS found this month the agency developed and followed a faulty policy to determine whether applicants for tax-exempt status were engaged in political activities, which would disqualify them from receiving tax-exempt status. The inspector general confirmed that agents from 2010 through early 2012 used inappropriate words, such as "tea party" and "patriots," and other criteria off and on to single out applications for more examination. The watchdog who conducted the audit, J. Russell George, found the criteria resulted in substantial delays and the request of unnecessary information from the groups. The lawsuit alleged that the "IRS engaged in a tactic of suffocating NorCal Tea Party Patriots and other similarly situated groups with requests that were so searching and extensive that they would have presented a serious challenge even for sophisticated businesses." Group officials said the IRS asked for a wide variety of information. This included a list of all events and activities conducted since July 2010 and information about their website; Internet related activities; materials they distributed; information about their board of directors and the names of donors, contributors and grantors. They were also asked if they conducted or would conduct rallies or exhibitions for or against public policies, legislation, public officers, political candidates, the officials said. Mark Meckler, president of a Tea Party-aligned group Citizens for Self-Governance, helped bring the lawsuit and told CNN that he expects other groups to join. Meckler and the president of the NorCal group will hold a news conference on Tuesday in Washington to talk about the case. "When the federal government runs amok, it is up to us to reign it in. Neither party in Congress can be relied upon to satisfactorily resolve this issue. They created the IRS, fund the IRS, and oversee the IRS. All of this abuse happened on their watch," Meckler said in a press release. The IRS did not respond to a request for comment regarding the lawsuit, which was filed in Cincinnati where the IRS office responsible for the tax-exempt determinations is located. Acting IRS Commissioner Steven Miller answered questions before a House committee on Friday. "I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and for the poor service we provided. The affected organizations and the American public deserve better," Miller told the Ways and Means Committee. "I do not believe that partisanship motivated the people who engaged in the practices" described in the inspector general's report. "I think that what happened here was that foolish mistakes were made by people who were trying to be more efficient in their workload selection," he said. IRS officials are expected to testify at congressional hearings on Tuesday and Wednesday. Several other groups have said they plan to sue the IRS. Tue, 21 May 2013 09:05:43 GMT 20228166 2013-05-21T09:05:43Z http://www.krdo.com/news/economy-tracker/Merger-Monday-on-Wall-Street/-/477266/20217906/-/13wsm4r/-/index.html A pair of corporate mergers failed to boost the broader market Monday as investors await comments from Federal Reserve officials later in the week. The Dow Jones industrial average, the S&P 500 and the Nasdaq all ended about 0.1% lower. Traders were wary of pushing stocks higher after the Dow and S&P 500 capped a four week winning streak Friday with new record highs. "It's a slow day," said Peter Tuz, portfolio manager at Chase Investment Counsel. "We've got some more important Fed news and economic statistics later in the week." Do you Tumblr? In an effort to lure younger users, Yahoo officially announced plans to buy blogging site Tumblr for $1.1 billion. The Internet pioneer promised not to "screw it up," but investors weren't so sure. Yahoo shares barely budged on the news. Separately, Actavis shares jumped after the drug company said it planned to buy Warner Chilcott in an $8.5 billion stock-for-stock transaction. Merger and acquisition activity has been picking up recently. So far this year, there have been 45 U.S. corporate transactions, worth a combined $297.6 billion, according to data from FactSet. The biggest deal has been Berkshire Hathaway and 3G Capital's $28 billion plan to buy ketchup giant H.J. Heinz Co. Bernanke takes the stand: Investors will pay close attention to comments from Federal Reserve officials this week, including chairman Ben Bernanke, who will testify before Congress Wednesday. All three major U.S. indexes have gained around 16% so far this year on a combination of gradually improving economic data and continued support from the Fed. But investors have been rattled recently by comments from some Fed officials suggesting the central bank could begin to scale back its bond-buying program sooner than expected. "There's a tug-of-war within the Fed about an exit strategy," said Tuz. "We should hear more about that this week." The yen also rises: The yen edged up 0.7% versus the U.S. dollar Monday after Japan's economy minister suggested further weakness could be harmful to Japan's recovery efforts. The yen has plunged 15% against the dollar this year as Prime Minister Abe and the Bank of Japan launched an aggressive campaign to boost the nation's economy. Investors have also been pouring money into Japanese stocks. Last week, the Nikkei rose above 15,000. It surpassed the Dow in absolute terms for the first time in three years, according to Bill Stone, chief investment officer at PNC Wealth Management. Earnings season winds down: Campbell Soup reported quarterly earnings that beat expectations. Home Depot, Best Buy, Target and Hewlett-Packard are due later in the week. Chesapeake Energy shares edged up after the natural gas and oil producer announced its new CEO would be Robert Douglas Lawler, an executive at Anadarko Petroleum. Gold and silver prices recovered from earlier losses, but both have been under pressure recently. European markets ended higher, with the DAX leading the gains, although trading was light due to a national holiday in Germany. Meanwhile Asian markets ended with significant gains. Japan's Nikkei jumped 1.5%. Mon, 20 May 2013 20:12:48 GMT 20217906 2013-05-20T20:12:48Z http://www.krdo.com/news/economy-tracker/supersize-your-takeout-seamless-grubhub-merge/-/477266/20218678/-/vrrwekz/-/index.html Your options for takeout orders just doubled. Two leaders in restaurant food delivery, Seamless and GrubHub, announced that they will merge on Monday. Customers from more than 500 cities will be able to order from 20,000 local restaurants through the joint company. The companies said in a statement that the merger will allow them to pool technology and offer orders from an expanded list of restaurants in the U.S. and also in the U.K. For instance, Jonathan Zabusky, Seamless' CEO, said the merger would combine its popular iPad app with GrubHub's "Track Your Grub" feature, which sends customers updates on the status of their order. The two companies made a combined $100 million in revenue in 2012, according to the press release. GrubHub's co-founder Matt Maloney will be the CEO, while Zabusky will serve as president of the new company. Mon, 20 May 2013 14:49:03 GMT 20218678 2013-05-20T14:49:03Z http://www.krdo.com/news/economy-tracker/Amateur-investors-tap-401-k-s-to-buy-homes/-/477266/20215402/-/bflt61/-/index.html In order to get in on hot housing markets, amateur investors are buying up homes and taking risky measures -- like tapping their retirement accounts -- to fund the deals. "We're seeing many people cash out 401(k)s or IRAs because they want to take advantage of the market," said Sean Galaris of financial services firm LM Funding, based in Tampa. "This new scenario involves people losing significant personal funds since they are financing real estate through retirement accounts, savings and life insurance." Galaris should know. His company buys delinquent fee accounts from condo associations and collects the debts. Many of the condo owners he collects from either resort to tapping their 401(k)s or IRAs when they come up short for expenses like maintenance fees or have already used up those funds to buy the property in the first place. Lori McDermott, an insurance broker from West Seneca, N.Y., took out a $50,000 loan against her 401(k) for a downpayment on a home in Sarasota, Fla., last December. A short sale, McDermott got the place for $225,000 -- a steal considering the seller owed $465,000 on the mortgage. But still, it's a risk. If McDermott loses her job or quits, then any unpaid part of the loan will come due immediately and will be subject to income tax and possibly a 10% early withdrawal penalty. "The decision to take money from your 401(k) is not for everyone," said McDermott. At the age of 48, she has already had five arterial stents implanted. "Having heart disease put me in a position where I was scrambling for life insurance," she said. " I looked elsewhere to create a legacy: real estate." Adam Bergman, a tax attorney for IRA Financial Group in New York, gets several calls a day from clients like McDermott looking to invest their retirement funds in real estate. "Our average client has retirement accounts of about $150,000 and is looking to buy one or two properties," he said. "After 2008, they didn't trust Wall Street. They wanted hard assets." But Wall Street is getting into this market as well and that is driving prices higher. Many of the single-family homes and condos that have been purchased over the past three years have been snapped up by hedge funds, foreign investors, private equity and wealthy real estate partnerships. The large-scale purchases these investors are making are driving up prices in markets that were hit hardest during the housing bust. Atlanta home prices jumped 16.5% in the 12 months ended in February, according to the S&P/Case-Shiller home price index. In Las Vegas, which was ground zero for the foreclosure crisis, prices have climbed 17.6% and Phoenix has seen an increase of 23%. In Florida, Tampa and Miami have recorded double-digit increases. "They bought a lot of stuff cheap last year, but now they're paying market value," said Jack McCabe, a Florida-based real estate consultant. "Sometimes they're overpaying." As home prices rise, profits are harder to come by for investors than they were a year or two ago. "There's no way they can get an 8% return buying at today's market prices," said McCabe. After deducting all the fees, taxes, maintenance and other costs, "They're lucky to get a 2% return," he said. And that's if all goes well when they rent out the property. It often does not. Investments in rental properties can quickly sour if, say, a tenant stops paying rent for a few months or if a condo or homeowners association imposes special assessments to pay for major repairs. "When that happens, investors may not have the wherewithal to pay their monthly common charges and property taxes," said Galaris. "A whole lot of the people in the markets are not experts." Galaris said amateur investors sometimes spend all their free cash on their purchases and then have to scramble to pay the fees. If the real estate market turns south again, that could leave a lot of investors in dire financial condition for their golden years. Mon, 20 May 2013 14:47:49 GMT 20215402 2013-05-20T14:47:49Z http://www.krdo.com/news/economy-tracker/Gas-prices-lower-but-not-leading-to-more-spending/-/477266/20214368/-/gskdov/-/index.html Gas prices are slightly lower this year, but that's not leading to a large pick-up in consumer spending, according to a survey by Bankrate.com. About 80% of the 1,000 people Bankrate surveyed said they have not increased their discretionary spending in response to falling gas prices this year. Perhaps it's because prices have been choppy? Gas prices rose for 34 straight days at the beginning of the year, then fell through most of March and April. They have since risen again slightly. That said, gas is still cheaper compared to a year ago. As of Friday, a gallon of unleaded gasoline cost $3.62, according to AAA. That's about 10 cents lower than the same time last year. Economists have welcomed this year's lower gas prices as an inadvertent stimulus. Many have said that cheaper gas could lessen the blow from the higher payroll taxes that went into effect at the start of the year. But gas prices may have not fallen enough to make up for the decline in take-home pay, said Greg McBride, Bankrate's senior financial analyst. "Budgets are still really tight, and households cannot lean against the crutch of credit to support their lifestyles," he said. "There's not a whole lot of extra room in their budgets to throw extra money around." In the prior two years, Bankrate studies showed most Americans cut back on discretionary purchases in response to rising gas prices. Mon, 20 May 2013 12:15:49 GMT 20214368 2013-05-20T12:15:49Z http://www.krdo.com/news/economy-tracker/Class-of-2013-grads-average-35-200-in-total-debt/-/477266/20192168/-/15huh9u/-/index.html The class of 2013 is in for a rude awakening this graduation season. Between ballooning student loans, credit cards and money owed to family members, they are facing an average $35,200 in college-related debt, a Fidelity survey of 750 college graduates shows. And for half of this year's graduates, the amount of debt they racked up while in school comes as a shock. "We're tending to find people are still surprised at the level of debt they're graduating with, which suggests we still have a long way to go in terms of having conversations about planning for college, saving for college and figuring out the best place to go (to college)," said Keith Bernhardt, vice president of college planning at Fidelity Investments. The bulk of the class of 2013's debt is in government loans, with graduates owing an average of $26,000. They also had an average of $19,000 in private loans, $18,000 in state loans, $13,000 in personal and family loans and $3,000 in credit card debt. After realizing the extent of their debt, 39 percent said they would have done things differently -- like saving earlier, more thoroughly researching financial aid or looking for ways to save more and spend less while at school -- that's up from 25 percent in 2011. A small group, or 12 percent of graduates, regretted their decisions entirely, saying their college education didn't justify the debt burden. But now they're forced to face reality. Half of respondents said tackling their student debt is a financial priority, and half said it will take them more than nine years to become debt-free. The majority, or 92 percent, say they will pay back their debt using income from their job, 25 percent said they will get help from their parents or family, 24 percent will use their savings and 21 percent will get a second job. About 7 percent of graduates don't plan on ever being able to entirely pay off their loans. Others started taking action earlier to try to soften the blow. About 85 percent of college graduates contributed their own money toward college costs -- with 27 percent reporting that they contributed more than $10,000. And 57 percent said they chose their major specifically because they thought it would land them a higher-paying job. Mon, 20 May 2013 10:35:20 GMT 20192168 2013-05-20T10:35:20Z