How Banks Are Using Your Money to Create the Next Crash

Jan 9, 2012, 10:00 am EDT

In 2008, reckless credit default swaps nearly obliterated the global economy. Now comes the next crisis — “rehypothecated” assets. It’s a complicated, fancy term in the global banking complex. Yet it’s one you need to know.

The term rehypothecation starting coming into more general parlance after the fall of IMF Global. And if you understand it, you’ll get the scope of the risks we currently face — and it’s way bigger than just Greece.

So follow with me on this one. I guarantee you’ll be outraged and amazed — and better educated. You’ll also be in a better position to protect your assets because at the end of this article, I’ll give you three important action steps to take. Here goes. . . Read 

Report Shows Wealthiest Americans Seeing More Tax Audits

Jan 9, 2012, 9:31 am EDT

Last week, the IRS said in an enforcement report that it audited 12.5% of millionaires in fiscal 2011 — up from 8% in 2010 and 6% in 2009. What’s more, about 4% of those earning $200,000 and up were audited, up from 3% the previous year.

There’s not much to worry about if you’re making less than $200,000. As it turns out,  only 1% of taxpayers making less than $200,000  have been audited over the past five years. But, again, if you’re seeing any more than that, prepare to see more IRS agents at your doorstep.

Businesses with big pockets are also getting “special treatment” from the government. Those with $250 million in assets have a 27.6% audit rate  — this is in stark contrast to the 1% audit rate of firms with under $10 million in assets. Read 

Proposed Federal Pay Increase Nothing to Scream About

Jan 6, 2012, 1:52 pm EDT

How does $375 more a year sound?

That’s what the average federal worker will get in 2013 should a proposed 0.5% federal pay increase make its way through Congress. According to the Office of Management & Budget, the White House plans to put the proposal in its 2013 budget, and approval would end a three-year pay freeze enacted by President Barack Obama.

While no one’s coughing at more money in a down economy, let’s not make a mountain out of this molehill. Among things that should be immediately pointed out about this 0.5% increase: Read 

What Obama Slipped by Us on New Year’s Eve

Jan 6, 2012, 11:33 am EDT

Pay close attention. This is how it happens…

President Obama found a moment of reduced visibility, in an unwatched hour on New Year’s Eve, to sign the latest assault on the Fifth Amendment. In signing the National Defense Authorization Act of 2012 on New Year’s Eve, Obama knew the nation’s attention would be diverted by revelry, football, New Year’s Day and a Monday national holiday. 

In case you haven’t heard, the National Defense Authorization Act allows the government to detain people indefinitely — yes, it includes American citizens who can be taken even on our native soil and imprisoned — merely on the basis of accusations.  Read 

The Holes in Rick Santorum’s Tax Plan

Jan 6, 2012, 7:30 am EDT

When describing his plan to jump-start the U.S. economy, the website of GOP presidential candidate Rick Santorum waxes poetic when it speaks of his vision “to restore America’s greatness through promotion of freedom and opportunity for all.” Unfortunately, many experts argue it won’t do anything of the sort.

Like the other Republican candidates, the former Pennsylvania senator, whose strong second-place showing in Iowa rocked the party’s political Establishment, believes taxes are too high and government is too big. Santorum is calling for two-tiered tax rate system on personal income taxes and wants to slash the corporate tax rate from 35% to 17.5%, to make U.S. business more competitive globally.

Other highlights of his plan include eliminating the corporate income tax for manufacturers. In addition, he calls for ending the so-called marriage penalty and for tripling the personal deduction for each child. The fact that Santorum is a father of seven and a foe of abortion might explain that unusual proposal. Read 

Michele Bachmann’s Presidential Run Fizzles — What’s Next?

Jan 5, 2012, 12:07 pm EDT

Although the Iowa caucuses delivered a major setback to three of the most socially conservative GOP candidates — Michele Bachmann, Rick Perry and Newt Gingrich — only Bachmann read the tea leaves and decided to get out of the presidential race altogether.

What happened to her candidacy, and what — if any — impact will her departure have on the nomination process?

Michele Bachmann, an Iowa native, announced her presidential campaign in her hometown of Waterloo. She made the case that she was a favorite of the Tea Party and would work to repeal Obama’s health care legislation and cut federal spending. While she was the frontrunner in Iowa for most of the summer and won the Ames straw poll in August, her star fell dramatically throughout the fall, and she ended her bid for president after getting a mere 5% of the votes in Iowa. Read 

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