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Weekly Jobless Claims Edge Higher

Weekly Jobless Claims Edge Higher

 

The number of Americans filing new claims for unemployment benefits edged higher this past week, but a trend reading dipped to its lowest in five years and pointed to ongoing improvement in the labor market. 
 
Initial claims for state unemployment compensation increased 2,000 to a seasonally adjusted 336,000 according to the Labor Department via a statement released today.
Economists polled by various media outlets had expected 342,000 first-time applications for unemployment benefits this week. 
 
The month-long moving average for new unemployment claims, a significant measure of labor market trends, dropped 7,500 to 339,750, which marks the lowest level since February of 2008.
 
These figures could bode well for job growth in March as last week’s claims data covered the survey period for the U.S. government’s monthly tally of non-agricultural or non-farm jobs. The four-week average of new unemployment claims dipped 6 percent relative to the survey week last month, when nonfarm payrolls increased by 235,000.
Still, while layoffs have dipped over the recent months, companies remain cautious concerning hiring and the Federal Reserve has appeared worried that tightening the government belt could dampen progress in the labor market. The Federal Reserve on Wednesday announced that it would move forward with its aggressive stimulus policy, pointing to high unemployment, risks from abroad and fiscal headwinds out of Washington. 
 
The Federal action came despite a rash of data revealing the economy gaining steam. Retail sales are getting stronger, manufacturing output has increased and employment growth is moving faster than most expected, with the jobless rate failing to 7.7 percent in February from 7.9 percent in January. 
 
The Central Bank maintained that it will continue purchasing $85 billion in bonds per month, promising to maintain its asset purchases until it sees a significant improvement in the labor market outlook. 
 
Earlier this month, the number of people still collecting benefits under regular state programs after an initial week of receiving benefits rose 5,000 to a shade over 3 million in the first week of March. Analysts from the labor Department reported that jobless claims data had not been estimated for a number of states, and there were no significant factors influencing their report. 
 
Source: CNN
 

Binary Options

Binary Options

What are Binary Options?
In finance, binary options are a specific type of option where the payoff can either be a fixed amount of the asset or just nothing at all. Binary options come in two different types, cash-or-nothing binary option and asset-or-nothing binary option.  In a cash-or-nothing binary option, the option pays a fixed amount of money if it expires in-the-money. On the other hand, the asset-or-nothing binary option pays the amount of the underlying security of the option. Thus, both options are binary in nature since there are just two different possible outcomes. These two binary options are also called to as all-or-nothing options, digital options, or fixed return options.
Like a typical vanilla European or American style option, binary options are described by their strike price, maturity date, and underlying reference unit, instrument, commodity or security price.  Binary options are sold for a premium payment made upfront, like other options.  Calls and puts are both available for binary options.
Binary options are characteristically sold and bought in over the counter markets between different financial hedge funds, institutions, large trading partners, and corporate treasuries. Binary options are highly used when the underlying instrument at hand is a rate, event, commodity, currency, or index.  
Binary options can be widely to hedge weather events, like hurricanes, rainfall, or temperature. This is because many transportation and agricultural companies can be heavily affected by the weather conditions.  Since the weather is very unpredictable and hard to measure, it makes it the perfect opportunity for binary options since it lets the binary option seller to assume a set amount of risk associated to the happening of a future event that is impossible to predict. 
Binary options can also be traded on inflation figures, like the Consumer Price Index or the Producer Price Index in the U.S.  These values are reported rather infrequently based on sampling methods done independently, and are typically revised after they are first released once certain input values are further proved.  There is no continuing stream of prices since inflation is not actually a traded instrument.  Without the continual input prices, it is extremely very difficult to mark-to-market binary options, whose values are strongly dependent on the dense volatility and price data.  Binary options allow the buyer to get inflation protection, while at the same time providing the binary option seller with a limited risk in the case where that inflation drops or jumps unexpectedly.
Lastly, binary options are extremely popular in foreign currency markets.  Often, emerging market currencies are subject to quick jump risk resulting from economic or political instability, or just due to the comparatively small volume of foreign trade.  Cultured currency speculators use low-rate developed economy currencies like the USD or EUR and invest them in high-rate market currencies, and then purchase the binary options as a means of protection against any currency risk.  This allows the binary option speculator to earn some profit while protecting being protected from jump risk.

Economy Much Worse Than We Think

Economy Much Worse Than We Think

 

The Great Recession of 2008 may have officially ended during the summer of 2009, but many Americans are pessimistic about the overall state of the economy, according to a national survey conducted by the John Heldrich Center for Workforce Development at Rutgers University. 

Nearly 1,110 unemployed and employed Americans participated in the survey which was conducted between January 9th and January 16th of this year. Mark Szeltner, the survey’s lead researcher joined various discussions and national talk shows to discuss the date, and what it reveals with regard to the national psyche. 

Here are a few of the survey’s key statistics:

· 80% of Americans are skeptically that employment and career opportunities will be better for the upcoming generation

· More than half of Americans expect the economy to reach a full recovery from its collapse in six years and 29% of Americans do not expect the economy to fully recover

· Almost 75% of Americans were directly impacted by the financial collapse. Those in the survey  had either lost a job, or a family member had been out of work because of the recession

· The majority of participants said college or secondary education would become unaffordable for the average American · More than half of those surveyed have fewer savings than before the economic collapse

· More than half of those surveyed who lost a job said they are now forced to cut-back on doctor visits or medical treatment.

· Roughly 40% of Americans were forced to borrow money from friends or family because of the economic downturn

· Nearly one quarter of those who participated said they have sought professional help for depression or stress as a result of the recession

Even with the national unemployment rate falling from its peak of 10% in October of 2009 to its current 7.9% levels and even with the nearly 3-years of consecutive private-sector job growth, the survey’s information speaks to the magnitude and scope of the recession. In summation, the survey reveals a depressing image of what’s happening to many Americans as a result of the economic collapse.

Leveraged Finance Booming as Big-Ticket M&A Deals Soar

Leveraged Finance Booming as Big-Ticket M&A Deals Soar

 

Leveraged finance activity, specifically leveraged high-yield bonds and loans, is on pace to have one of its busiest months in the past decade. The loan market is surging as issuers continue to take advantage of meager borrowing costs. Another contributing factor is the sheer volume of big ticket M&A deals, which generate huge fees for arranging institutions.

The Heinz buyout by Warrant Buffet’s Berkshire Hathaway and Brazilian-based private equity firm 3G will spark roughly $12 billion in new U.S. leveraged loans to market. The sheer volume of this deal makes it the largest transaction in this market since 2007. In addition to the $12 billion in new U.S. leveraged loans, the deal will add $2.1 billion of bridge loans that may be procured by second-lien loans or high-yield bonds.

Another prime example of large deals impacting the market is the Silver Lake purchase of Dell. This transaction will contribute an additional $7.5 billion in leverage loan volume to the market. Included in this deal is $5.5 billion of covenant institutional tranches as other large transactions have been filed on the docket, including Virgin Media.

These deals reveal the pathway to the long awaited revival in the public to private leveraged buyout deals. Moreover, these deals may indicate that, with regard to merger and acquisition leveraged finance, the market is revving into a higher gear.

That said many believe that the leveraged buyout comeback won’t necessary live-up to investor’s expectations. Since Dell went private, investors are pondering whether the days of massive deals involving multiple private equity ships are coming back. Leveraged buyouts occur when a private equity firm finances the takeover of a corporation using relatively small amounts of equity in comparison to debt.

The effects of the financial crisis—particularly the cheapening of stocks—made it nearly impossible for private equity firms to raise the necessary debt to purchase companies. Seemingly everything has changed in this market as cash is flying around with low interest rates. The problem; however is that many banks believe our current market of cheap stocks and low yields will lead to massive leveraged buyouts.

There is one factor that provides another reason why pessimists argue that leveraged buyouts aren’t making the comeback we’d expect: the fact that stock prices are soaring.

Since the crisis, something abnormal has started occurring—stocks are out gaining corporate bonds and returning the same rates as high yield junk bonds. The question therefore is: how long will this abnormal activity continue?

Guns and Ammo Sales Propel Jobs Boom

Guns and Ammo Sales Propel Jobs Boom

 

The booming enthusiasm for firearms is propelling a vibrant job market for the manufacturing of ammunition and firearms. 
 
Guns and ammo are selling at a fast clip these days, and that means ammunition makers are hiring. In fact, some manufacturers are scrambling to find enough workers to meet their increased demand. 
 
Mike Weddle, Senior Vice President at Dynamic Research Technologies, a small ammunition manufacturer in Missouri says he is adding ten new workers to his staff of 35. Dynamic Research Technology’s machine operators make roughly $15 an hour, which amounts to a decent paycheck in a region where it is difficult to find a job and the cost of living is relatively meager. 
 
Dynamic Research Technologies cranks out roughly 80,000 bullets per shift and operates two shifts per day; however, that is not enough to meet its surging demand. In response to the boom in demand, Weddle is adding a third manufacturing shift and building an additional facility. 
 
“Demand quadrupled last year; it just went crazy,” he said. 
 
Dynamic Research Technologies is just a fraction of an industry that employs roughly 240,000 workers throughout the United States. And similar to the Dynamic Research, the bulk of the giants in the business are also hiring. 
 
Smith & Wesson and Sturm Ruger have both added manufacturing posts in the past year. In addition to surging demand, these companies are benefiting from the fact that they are based in regions of upstate New York and New England where manufacturing has disappeared. 
 
That said, these companies require highly-skilled workers, which propels competition among gun manufacturers for top-notch hires. The most sought-out workers are engineers who have the ability to create unique gun-designs that inspire gun enthusiasts to make a new purchase for their gun collection. 
 
New features include triggers with innovative safeties, ergonomic frames or side-mounted laser sights to give new guns a competitive edge. Engineers with the necessary design skills to create these new guns can easily earn over $100,000 a year. 
 
Many industry professionals agree that finding skilled workers is the biggest hurdle for the business, which has a massive 18-month backlog of orders. “Finding skilled machinists and highly-skilled labor is one of the most significant problems that we face in getting products out of the door,” said Jacob Herman, chief operating officer for Red Jacket Firearms. 
 
 
Source: Associated Press

Dunk City: Florida Gulf Coast is the Crown Jewel of March Madness

Dunk City: Florida Gulf Coast is the Crown Jewel of March Madness

 

Florida Gulf Coast apparel sales are soaring on the heels of the basketball team’s unparalleled success in this year’s NCAA Division I National Tournament. 
The Florida Gulf Coast Eagles are the biggest surprise in this year’s NCAA Tournament, and thanks to this success, is now suddenly the hottest school with regards to fan interest as well. 
 
Sales for apparel at the school’s on campus book store surged over 1,000 percent on Saturday, following the basketball team’s upset victory over Georgetown in the first round of the NCAA tournament. The 1,000 percent increase from a year ago was detailed in a report from the Follett Higher Education Group. Follett is a private company that is responsible for managing more than 900 university stores, including the shop at Florida Gulf Coast University. 
 
The Florida Gulf Coast University on campus book store was closed on Sunday, but online sales went crazy as the school upset San Diego state to become the first 15th seed to advance to the Sweet 16. Susan Evans, the school’s vice president said the online store handled over 500 clothing orders starting at 4 PM compared to the typical 25 to 30 a day. 
 
Mrs. Evans said the store was being mobbed by fans purchasing clothing on Monday, although figures have not been made available just yet. “We are pretty much selling everything that is not bolted to the floor,” she said. 
 
The media attention is clearly helping the school; by now, you probably have heard that head coach Andy Enfield was a former tech entrepreneur and is married to a supermodel who has graced the pages of Sports Illustrated and Maxim. 
 
The teams exciting style of play, featuring an up-tempo office and ferocious dunks, have won it an army of new fans. 
 
Stores located near the school’s campus in Fort Myers are also rushing to procure the clothing on their shelves. According the Licensing Resource Group, which manages merchandise for more than 180 colleges in the United States and national retailers, such as Dick’s Sporting Goods, Lids and Target all placed orders for Florida Gulf Coast University goods earlier today. 
 
“The increased demand will give Florida Gulf Coast University a tremendous lift off campus,” said Lewis Hardy, CEO of the Licensing Resource Group. 
 
Evans said that her school, which has graduated only 15,000 students in its short history, had its most successful alumni events during this weekend’s games. Moreover, the school’s Web page for prospective students had a 500 percent increase in unique visitors on Sunday alone. 
 
Florida Gulf Coast’s next game is late Friday night against the University of Florida, and even if the darling’s Cinderella run ends that night, Evans is optimistic that the newfound interest in the school can persist. 
 
 
Source: CNN

Starbuck’s CEO Doubles Down on Gay-Marriage Support

Starbuck’s CEO Doubles Down on Gay-Marriage Support

 

Starbucks CEO Howard Schultz recently announced to shareholders that they should sell stake in the coffee-giant if they don’t appreciate or respect his strong support for gay marriage. 
 
Howard Schultz, the outspoken CEO of coffee empire Starbucks firmly defended his company’s support of gay marriage last week at a shareholder meeting. 
 
In response to a contest from a shareholder that the company’s support of gay marriage was damaging the company’s stock price, Schultz calmly explained that it is not about the profit margins, but about “respecting diversity.” 
 
Last year, Starbucks openly supported Washington state’s referendum that legalized gay marriage. As a result, the National Organization for Marriage launched a protest of the coffee giant. During the annual shareholder’s meeting in Seattle last week, shareholder Tom Strobhar voiced his opinion, suggesting that the boycott was affecting the company’s stock price, “In the first quarter following the boycott, our earnings and our sales were disappointing,” he expressed. 
 
Schultz fired back at the shareholder, claiming that Starbucks’ endorsement of marriage equality was not bad for business, “If you feel that you can get a higher return than the 38 pe4rcent you got last year, it is a free country. You have the right to sell your shares and buy shares in another company. Thank you very much,” Schultz calmly stated, to a standing ovation from the audience. 
 
Schultz; however was quick to underscore that the decision to support gay marriage did not revolve around economics. “We are making the decision to support gay marriage through the lens of our people. We employ over 200,000 people throughout this world, and we want to embrace diversity,” Schultz added. 
 
Starbucks, which last year operated nearly 18,000 stores in 60 countries, endorsed the Washington state bill to legalize same-sex marriage, and released a statement saying the company “deeply dedicated to embracing diversity.” The bill eventually became affirmed as a law. 
 
In his five years as CEO of Starbucks, Schultz has taken on a role as a political activist, launching campaigns calling for corporate social responsibility and political finance reform. 
 
 
Source: Whitehouse.gov
 

Power Moves: Warren Buffet on Track to Become Top Goldman Shareholder

Power Moves: Warren Buffet on Track to Become Top Goldman Shareholder

 

Warren Buffet’s Berkshire Hathaway is set to become a long-term investor in Goldman Sachs, as Buffet is well on his way to becoming one of Goldman Sachs’ 10 largest shareholders. 
 
Goldman announced on Tuesday that Buffet’s company Berkshire Hathaway would receive a large chunk of the investment bank’s stock this October. The maneuver marks the outcome of Buffet’s $5 billion emergency cash infusion into the investment giant during the pinnacle of the financial crisis in 2008, when the vast majority of Wall Street firms were frozen in shock after the bankruptcy of Lehman Brothers. 
 
During the peak of the financial crisis, Buffet procured preferred shares of Goldman Sachs worth $5 billion that provided a dividend of $500 million per year. Buffet also received warrants to purchase 43 million shares of Goldman stock for $115 per share by October of this year. If Buffet were to redeem his eventual Goldman shares at the company’s current stock price of roughly $146, his stake would balloon to $6.3 billion, for a healthy profit of $1.3 billion. 
 
However, Buffet and Goldman announced on Tuesday that they had revised the options so that Berkshire would receive shares equal in value to that profit. At Goldman’s current stock price, which would mean an additional 9 million shares would be transferred to Berkshire. The added 9 million shares would be enough to rank Buffet as Goldman’s ninth largest shareholder in the investment bank. 
 
“Berkshire plans to hold a significant state in Goldman Sachs, a firm that I conducted my first business transaction with more than 50 years ago,” said Buffet in a statement. 
Goldman Sachs repurchased its preferred shares from Warrant Buffet in 2011; however, Berkshire continued to hold the warrants from its original investment. Shares of Goldman dropped a tad lower on Tuesday, while Berkshire was up roughly 1 percent. 
 

Going Rogue: T-Mobile Revolutionizes Cell Phone Pricing Model

Going Rogue: T-Mobile Revolutionizes Cell Phone Pricing Model

 

Long stuck in fourth place, T-Mobile sent shockwaves through the telecommunication industry with its plan to roll out its 4G LTE network and offer bargain plans with no contract requirements to entice potential customers. 
 
In addition to the shift in pricing and contract requirements, T-Mobile also announced that it now offers the iPhone 5 on its network. 
 
Expectations; however, must be scaled back, as T-Mobile has only activated the new 4G network in Houston, Baltimore, Las Vegas, San Jose, Phoenix, Washington D.C. and Kansas City. T-Mobile plans to gradually expand coverage to 200 million Americans by the end of 2013. 
 
T-Mobile’s new plan will run on its existing network, which possesses theoretical data download speeds that are faster than the LTE networks deployed by industry leaders, AT&T and Verizon. 
 
T-Mobile also claims it has nearly 50 percent more bandwidth than AT&T, which technically means that T-Mobile would be able to handle more people on its network and suffer less of a performance hit. 
 
The company plans to pair this rollout with a unique pricing model which terminates contracts but requires consumers to pay the full retail price for their phone. 
Under the plan, phones can be paid in full up front, and eligible consumers can also put $99 down and pay $20 a month over two years. Once the phone is paid for, T-Mobile will unlock the phone, allowing users to select any carrier they wish. 
 
Mobile plans under T-Mobile’s new cost either $50, $60 or $70 a month with access to unlimited texting and voice data. The plans are attached with 500 megabytes, 2 gigabytes or unlimited data, respectively. 
 
John Legere, the CEO of T-Mobile insists its customers will save money in the long run because the plans are cheaper. That said, the cheapest plans offered by AT&T are priced similarly over the span of two years to the cheapest T-Mobile plan with a new iPhone 5. 
 
The new data network and pricing model makes T-Mobile sound like an alluring option for those currently disgruntled with their cell phone carriers. The most glaring wild card attached to the new pricing model will be whether the new network can live up to its bold performance claims. 
 
Source: Associated Press

Going Green: Mercedes Unveils Tesla-Powered Electric Car

Going Green: Mercedes Unveils Tesla-Powered Electric Car

 

 
Mercedes-Benz has unveiled a revolutionary electric car developed in partnership with Tesla Motors. The new electric car is a version of Mercedes’ B-class hatchback, which was just released in the United States last month. 
 
The 2014 Mercedes B-class Electric Drive will be released first in the United States before reaching other markets. The new car will go on sale early next year in just a few states but will become widely available later on. 
 
This new car is a much small version of the Mercedes brand that Americans have grown accustom to. Currently the smallest Mercedes on the market is the C-class; however, the luxury automaker will soon begin selling the smaller CLA-model and even smaller cars are expected to be available in the states within the next couple of years. 
California-based electric car maker Telsa Motors agreed to help Mercedes develop and manufacture parts of the new car’s electric drive system, including the lithium ion battery, electric motors, on-board chargers and other electronic equipment associated with the vehicle. Besides making its own vehicle, the Telsa Model S sedan, the company already manufacturers electric drive components for the battery-powered Toyota Rav4 EV. 
 
The Mercedes Electric Drive vehicle possesses a “quick charge” feature that gives the vehicle a range of 60 miles after just a 2-hour charge. With a full charge, which takes roughly 7 hours to complete, the vehicle will travel roughly 115 miles. The car is equipped with a 134 horsepower electric motor that allows the vehicle to accelerate from zero to 60 miles an hour in under 10 seconds. 
 
The new Mercedes will come with a number of safety and luxury features including active parking assistance and a system that helps drivers stay in their lanes. 
Mercedes already offers a version of the B-class powered by Hydrogen fuel; these fuel cells turn hydrogen into water and electricity inside the vehicle. 
 
Mercedes’ parent company, Daimler, also offers the Smart Electric Drive, which is a two-seater that is set to go on sale in the United States in May of this year. The electric version of the Mercedes’ high-performance SLS AMG sports vehicle, which features a 751-horsepower electric motor, is hit the market within a year, although the U.S. release date has to be affirmed.
 
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