Going short, Pimco warns markets about risky bonds

The world leader in bond trading has bet that a solution to Washington’s budget crisis will not be resolved anytime soon. Treasuries have lost their luster for the Pimco Total Return Fund, which has gone short on government debt. Source for this article – Pimco moves market with short position on U.S. government debt by MoneyBlogNewz.

The United States Treasuries will be impacted by Pimco

The Nation’s triple-A bond rating could be endangered and Pimco is betting on the deficit problem driving up rates of interest. Pimco gambled that it could purchase back securities at a lower price than it could sell them for, thus causing them to sell a lot. Bill Gross, head of Pimco, has been warning people of the U.S. government debt. Gross sold all of Pimco’s treasury holdings in February causing lots of concern. He bet $7 million against securities in March.

The portion of Pimco’s $236 billion Total Return Fund held in U.S. Treasuries and other long-term government debt dropped from zero in February to negative 3 percent in March. The fund’s cash equivalents rose to 31 percent of the fund’s assets, a $73 billion bet that the good times are about to end in the markets.

Pimco’s possession was brief

The deficit problem won’t be solved by Congress according to Gross. Pimco sent out a newsletter in April stating essentially that they felt the government was “out Greeking the Greeks.” Greece’s massive government debt forced its leaders to ask for a bailout from the European Union to prevent a global chain response of financial failure. The current GDP in the United States is five times worse than that of Greece.

Pimco might have an advantage in the market

Gross is intending his best to influence the market to make sure that it plays out in his favor. CNBC’s John Carney does caution investors when it comes to following Gross’ methods. The term that is used is “dangerously wrong,” when defining the shifts Wall Street has viewed as ‘correct’ in the past few years.

Citations

Associated Press

finance.yahoo.com/news/PIMCO-goes-short-US-rb-3790514655.html?x=0

Fortune

finance.fortune.cnn.com/2011/04/10/pimcos-gross-betting-against-u-s-debt/

Christian Science Monitor

csmonitor.com/Business/Latest-News-Wires/2011/0412/Bond-fund-and-many-others-bearish-on-US-debt

Reuters

reuters.com/article/2011/04/11/us-pimco-bonds-short-idUSTRE73A2IR20110411

Get more money whenever you sell online

Whenever you are selling an item online, you probably want to get as much money as possible. With the popularity of online advertising, however, it can be intimidating. Getting your ad seen among the rivals can feel tough. You can improve the price you get whenever you sell online. It takes just a couple simple steps, and a few additional minutes of effort. Post resource – Four easy ways to get more money for what you are selling by MoneyBlogNewz.

1. Photography importance

Online buyers look at photos first. This is how the search begins. In fact, more than 83 percent of home buyers will choose whether to visit a house depending on photos online. The sales prices increase 5 to 30 percent by simply putting up good pictures, even though it may be easy to just take a cell phone picture. The lighting in the home should be really well for the picture. Also, avoid blur with a fast shutter speed. The $100 to $300 in photography that is professional might be worth it when you have a high-dollar item to sell.

2. Don’t use weird language

When marketing an item, be very clear over it. This can help a lot. Be very clear by avoiding wording such as a “seriously awesome camera that will make your photos 1 billion times better,” and instead say what you are marketing for instance “10 megapixel camera with full manual settings to control the photo.” It is more likely to sell with this phrasing. Do use numbers, statistics and specifications. More than three adjectives in one sentence is a poor choice. It might cost $50 to $100 to get a professional. You may just have a friend look over it instead.

3. Make sure you research

It might put off buyers if you ask too much, even if you’re hopeful about costs. See what the price of your item should be. Sometimes you sell for the higher than going rate. If this is the case, make sure you explain why. Sometimes, you are asking less than the going rate. This is also something you should explain. Deviations from the norm in either direction are likely to be noticed, and answering the questions right off the bat makes your listing more attractive to buyers.

4. Do not become spammers

Just in case your listing isn’t seen, it can be tempting to post the item twice in one day. There is search functionality in most online services. Posting your item multiple times just gets annoying to viewers and makes you look desperate. Only re-post your item if you make change to the price or the terms. It takes effort and cash to list something more than once in one place. Avoid this.

Articles cited

MSN Real Estate

realestate.msn.com/article.aspx?cp-documentid=13108474

Small Biz Trends

smallbiztrends.com/2010/04/5-tactics-to-improve-online-sales.html

Property owners to be recompensed by 14 financial institutions for foreclosures

Property owners which were wrongfully foreclosed on by financial institutions in the robosigning scandal will be paid back, as 14 large mortgage lenders have been ordered to pay these individuals back by the government. The exact number of people who were improperly foreclosed on is not known. However, they will certainly be repaid for the suffering they endured at the hands of the errant banks.

Largest financial institutions in the nation to pay the price of incompetence

Federal regulators recently reached a settlement with the financial institutions involved in the robosigning scandal, in which foreclosure proceedings were improperly started against property owners because bank officers could not be bothered to do their due diligence on the paperwork concerning the state of the homeowners’ personal loans. Part of the settlement agreement, according to Reuters, is that any property owners who were wrongly foreclosed on have to be repaid by the bank that did it. Total, there were 14 corporations. USA Today states that they are Ally Financial, Aurora Bank, EverBank, HSBC, Sovereign Bank, SunTrust Banks, MetLife Bank, OneWest Bank, PNC, U.S. Bank, Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Citibank. Loan servicing corporations MERSCORP and Lender Processing Services have also been required! to pay back improper foreclosures. Soon, impacted homeowners will be contacted. Arrangements can then be made.

Not sure what total fallout will end up at

The numbers of individuals that need to get paid or the fines that could be placed have not been added together yet. Government officials like the idea of giving a $20 billion fine to the banks. Banks have even more to worry about. This settlement really only has reached the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Other federal agency settlements still need to be made. The state lawyer generals are also waiting.

Costs of mortgages to increase

Banking and real estate insiders are insisting that the new legislation and increased regulatory scrutiny will increase the costs of lending a mortgage to a prospective homeowner. New Federal Reserve rules on mortgage officer compensation, according to MarketWatch, may cut into commissions for loan officers. Mortgage brokers and loan officers at lending institutions can’t receive a commission depending on the interest rate at which a mortgage is lent at any longer, which analysts predict will eat into profits. The customers are the ones that will end up hurt by the legislation and paying more. The Center for Responsible Lending is a customer advocacy group that pointed this out.

Articles cited

Reuters

reuters.com/article/2011/04/13/us-financial-regulation-foreclosures-idUSTRE73C3DV20110413?pageNumber=1

USA Today

usatoday.com/money/economy/housing/2011-04-13-wrong-foreclosures-repay.htm

MarketWatch

marketwatch.com/story/home-loan-brokers-face-new-limits-on-pay-2011-04-11

Federal probe into robosigning reaches initial negotiation

The federal investigation into the robosigning scandal has reached an initial settlement. The controversy stems from the nation’s largest mortgage loan providers having improperly foreclosed on people by not making sure that foreclosure paperwork was correctly done. The initial terms of a settlement between the banks that committed said offenses and the government has been hammered out.

Details on JPMorgan deal

Chief Executive Officer of JPMorgan Chase Jamie Dimon recently disclosed the government probe into the robosigning controversy had come to an agreement with the mortgage loan providers being investigated, according to Reuters. There will most likely be fines soon even though Dimon explained there hadn't been any made yet. The nation's largest mortgage loan companies and servicers were the subject of a sweeping investigation by nearly a dozen federal agencies and the attorney general of every state in the union. The agreement is not complete; it is only the settlement between the financial institutions involved and the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. A negotiation with all 50 state attorneys general has not been reached.

It will not be long before state settlements happen

The controversy stemmed from the discovery that a lot of foreclosure proceedings started when paperwork to begin foreclosures was approved in a robotic fashion, or "robo-signed," without proper review. The resolution of the robosigning foreclosure ordeal is essential, as foreclosure practices may change. JPMorgan, for instance, expects to hire at least 3,000 more employees to ensure compliance with the settlement agreement, according to Bloomberg. The mortgage lenders are likely to end up needing more money to make the loans with all the increased regulation that are likely to occur in the mortgage industry. Eventually the banks have to pass those costs on. The consumers are likely to have to bear them. On the books, there are a ton of foreclosures just waiting to happen. The loan companies are worried about simply foreclosing now.

Failing with the mortgage modification program

The mortgage modification programs were some of the biggest failures in all of the stimulus programs that the Obama administration put together. Anybody could apply for a modification if they were about to be foreclosed upon and were behind on mortgages. The distressed homeowner's lender would receive an incentive payment from the government if it modified the borrowers' mortgage on a trial basis. USA Today states that few individuals actually used it. The goal was to keep 3 million to 4 million individuals in their homes; instead only about 630,000 individuals had their mortgages permanently modified.

Details from

Reuters

reuters.com/article/2011/04/13/us-financial-regulation-foreclosures-idUSTRE73C3DV20110413

Bloomberg

bloomberg.com/news/2011-04-13/jpmorgan-says-foreclosure-accord-with-federal-reserve-occ-may-come-today.html

USA Today

usatoday.com/money/economy/housing/2011-04-12-mortgage-borrowers-letters.htm?loc=interstitialskip

Hedge fund industry resumes attracting billions, but for what?

The billions adding up in hedge fund investments are approaching pre-crisis levels. In search of high returns, investors are turning once again to hedge funds and their risky approaches. However, the prosperity isn’t spread equally throughout the industry and many hedge funds are anticipated to vanish throughout the course of the year.

Hedge funds treading water

The hedge fund industry drew $22 billion from investors in March, the highest rate in over a year, according to Hedgefund.net. The hedge fund business got $2.5 trillion total currently which is 83 percent of the 2008 high. However apart from a few superstars, hundreds of hedge funds are scrambling to reach their historic peaks, the point at which they can resume collecting profits. Of the 2,500 funds that report voluntarily on their business, about 35 percent nevertheless have to get back to normal, Hedgefund.net reports. Investors are seeing a rise in funds. Nevertheless, the returns have to get to as great as they were before the crisis if the hedge funds are to charge performance fees. For example, a hedge fund managing $100 million that lost 25 percent during the meltdown must generate returns of up to 35 percent on the leftover $75 million to hit the high water mark. The fund is probably not able to return to getting 20 percent for years.

The manipulation in the hedge funds

The only way hedge funds have been able to survive is with the fees requires for management. This consists of client expenditures fees also as 2 percent of assets. Others who lost most of their client’s money simply shut down, reopen under a different name, entice new investors and start collecting performance fees. The hedge fund manipulation starts from there. There are performance territory fees the hedge funds want to put together. These are changed by the additional holdings they purchase up themselves right before the end of a quarter. They dump it all after results are recorded. This was confirmed in a study done by Swiss Finance Institute, Toulouse School of Economics, Wharton and Ohio State. More than normal, stocks with lots of hedge fund ownership do well with last-second rallies. After the manipulation, stocks with high hedge fund ownership also trended toward lower returns on the first day of the month.

The hedge fund mystique

With so several hedge funds battling to make a comeback, industry experts predict a hedge fund shake-out in 2011 as underperforming funds lose top traders to rivals and disappear from the landscape. Figures show this is already occurring all the time. In the last five years, Hedgefund.net reports, the median return of 1,400 hedge funds was 41 percent. However during that time, 3,000 hedge funds fell by the wayside. According to Brett Arends at MarketWatch, the good numbers reported by the hedge fund industry only contain a few of the survivors. There was a 10-year comparison that he did with 2,229 hedge funds starting in 2001 and the “vanilla portfolio” of his own. There was a 94 percent average on the vanilla portfolio. If the industry were to match the vanilla portfolio, it would need all the hedge funds that failed to do better. They would have all needed to get 60 percent. There were 535 survivors which one fifth did not even do well.

Information from

Market Watch

marketwatch.com/story/the-truth-about-hedge-funds-1302121763886?pagenumber=2

New York Times

dealbook.nytimes.com/2011/04/06/many-hedge-funds-still-smarting-from-the-financial-crisis/?src=dlbksb

All About Alpha

allaboutalpha.com/blog/2011/03/02/hedge-funds-and-stock-manipulation-perpetrators-accomplices-or-just-in-the-wrong-place-at-the-wrong-time-again/

Children most frequent sufferers of identity theft

Child identity theft is becoming all the rage. As a new study has shown, child identity theft is increasing because it is simple for thieves to steal data from unsuspecting parents they utilize to commit pilfering that aren’t found until their long gone. Resource for this article – Child identity theft victims hurt most often by their loved ones by MoneyBlogNewz.

Why child identity theft takes place

There have been thousands already victims of identity theft while thousands more have the risk there still. A Carnegie Mellon University CyLab cybersecurity research center report explained this clearly. There were 42,232 children in the report looked at from the 2009-10 Debix AllClear ID Protection Network scan where parents were told about compromised child IDs. There were 4,311 children, a little over 10 percent, which had identity thieves steal Social Security numbers according to Debix AllClear ID data. Obviously there is issue when there is a 0.2 percent rate of U.S. adults that have their identity stolen which is 51 times lower than the child rate according to the Debix AllClear ID 663 attacks out of 347,362 adults. The youngest it ever got was a five month old. The identity was stolen nevertheless. There were 42 open accounts in Arizona that a 17 year old girl found out she had. In all of these credit cards, automobile loans and mortgages, she owed $725,000 in ! debt. Her Social Security number was connected to eight suspects. In Kentucky, a 14 year old boy found out there was a foreclosure on his credit. It was from 10 years earlier too.

Friendly fraud victimizes

After child identity theft began in the early 1980s, it has come even farther. Back then the Internal Revenue Service directed the Social Security Administration to give all kids Social Security numbers. Everyone with access to the Social Security numbers would typically abuse them. Kids easily became victims of this. In 2010, thirty percent of cases in child identity theft were “friendly fraud,” according to Javelin Strategy and Research. Because credit checks do not verify age, identity thieves can freely take out loans, get charge cards and create accounts. One young male in Florida got help after finding out his father had stolen his identity and hurt his credit years before from the Identity Theft Resource Center.

Figuring out child identity theft

The dangers in sharing information on the internet and not being private should be taught to every child according to the Identity Theft Resource Center. Keep all the significant personal information in a safe place. This should contain Social Security numbers and birth certificates. You may have mail that came in a child’s name. This could possibly be a concern that credit was opened for the child. A credit report could possibly be taken for the child from all three credit reporting agencies. Sometimes there is no credit history. That is most likely good for child. When you have a credit score for the child, file a security alert. Do this at TransUnion, Experian and Equifax. Use the credit rating to file a police report also. The fraudulent account listed in a police report will require credit states to take them off of the report. It will only take 30 days max to get this to happen.

Information from

Forbes

blogs.forbes.com/moneybuilder/2011/03/31/protecting-your-child-from-identity-theft/

Atlanta Journal Constitution

ajc.com/news/child-identity-theft-increases-572552.html

Wallet Pop

walletpop.com/2011/04/05/report-as-child-id-theft-grows-rapidly-consider-these-precauti/

Advertisement supported Kindle to ship on May 3

E-readers, tablets and other mobile devices are upending the traditional print industry, which suits Amazon just fine, because of the Kindle. Currently, Amazon has a 60 percent market share in the e-reader market, a hold that should increase as the $114 Kindle with Special Offers hits the market next month. What’s the catch? The new Amazon Kindle, while no different from the Kindle 3 in most respects, can be ad-supported. Article source – Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.

Putting advertisements on a kindle; pay less

The price of the Amazon Kindle has fallen a few times since the first generation was introduced at $399 in 2007. The price deduction never included advertisements before this. Doing this, the e-reader market can be breached making the iPad competition. The Kindle with Special Offers is slated to ship May 3. The Kindle 3 can be put in stores then. Both Best Purchase and Target will carry it.

It is “chicken in every pot” decision made with the $114 kindle with Special Offers according to Jeff Bezos, the Amazon CEO and founder:

“We’re working hard to make sure that anyone who wants a Kindle can afford one,” he said via a statement.

Reader response to a Christian Science Monitor article about the price cut seems to echo the fears most consumers have about an ad-based Kindle. The price of books was brought up by one reader that says kindles for free with ads would be okay with $0.99 books. The $25 discount isn’t enough, according to some readers. Most experts’ say it is okay though since the ads only come up on the bottom of the home screen and on the screen saver.

“It’s very important that we didn’t interfere with the reading experience,” Kindle director Jay Marine told the Associated Press.

Why every person worries about a price

TechCrunch predicts that the $114 Amazon Kindle with Special Features is an intermediary step toward a $99 Kindle for Christmas 2011. 99 is a magical number. Most marketing would suggest this.

The Columbia Business School in New York did research on this though. It showed this is probably not the case anymore. A dollar plus approach, adding a penny, was more effective than the dollar minus approach, taking a penny away. The Columbia study showed this clearly. Dollar plus brands seemed less manipulative to customers which is why the dollar plus method sold 3 percent more.

Citations

Christian Science Monitor

csmonitor.com/Books/chapter-and-verse/2011/0413/Will-readers-accept-ads-in-exchange-for-a-cheaper-Kindle

Columbia Business School

gsb.columbia.edu/ideasatwork/researchbriefs/7314376?&top.region=main

Knowing and Making

knowingandmaking.com/2011/04/new-research-99-no-longer-optimal-for.html

TechCrunch

techcrunch.com/2011/04/11/amazon-kindle-99/

Kindle sales tripled after last price drop

youtu.be/PaAFm_fZQ2A

Charge card mail offers have increased

Credit card mail is making a comeback, and economists see this as good news for the economy. Bankrate states that the customer credit industry has experienced a kind of renaissance when it comes to charge card mail offers. Witness the numbers: from Q4 2009 to Q4 2010, charge card mail offers climbed from 551 million to 1.4 billion, states Mintel Comperemedia. Article source – Recovery Watch: Credit card mail has increased dramatically by MoneyBlogNewz.

Making the credit offers shine

To be able to attract consumer business, more credit card offers are trumpeting no balance transfer fees, no foreign transaction fees and extended low introductory rates. Waiving balance transfer charges is particularly popular. Banks will go to extreme lengths just to get above the rest according to what Senior Vice President Andrew Davidson of Mintel told CreidtCards.com. Last year, a study showed that around 40 banks offering credit completely cancelled their transfer fees, and those who did keep them only kept the fee around 3.06%.

Standing out above the crowd

Another area where charge card issuers compete for business is the foreign transaction (aka currency conversion fee) arena. Transfer charges and Annual Percentage Rate fees are above important for any person who travels for business purposes or for pleasure. The typical 3 percent surcharge on foreign transactions can cost quite a bit before the trip is over. Last year a study conducted showed that over 90 percent of bank cards include this type of fee.

Now several large banks are waiving those transaction fees, such as Citibank, HSBC, and Chase.

Extended introductory rates: another bonus

Some credit card issuers push a zero-percent Annual Percentage Rate initially for some time, to try and get individuals to purchase into their card, this is known as an extended introductory rate.

The teaser rate offered by credit card typically exceeded 13 months in the fourth quarter of 2010, states Mintel. According to Davidson, that number is expected to grow.

“The squeeze on credit observed during mid-2009 is being reversed, and many issuers are now offering durations of 15, 17 or 18 months or more,” he told Bankrate. “We have even seen offers with 24- and 30-month intro rate durations in recent months.”

Legislation keeps charge card rates low

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) have helped stabilize charge card APRs. The mean for 2010’s fourth quarter was 14.03 percent, according to Mintel. “Many credit card companies have contrasted their APRs against the relatively high prime rate as a consumer draw,” said Davidson.

Information from

Bankrate

bankrate.com/financing/credit-cards/4-trends-in-credit-card-mail/

CreditCards.com

creditcards.com/credit-card-news/foreign-exchange-fees-going-up-1267.php

Pew Trusts

pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Credit_Cards/PEW-CreditCard FINAL.PDF

WhiteHouse.gov

whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

Shop around for a better credit card than this

youtu.be/FunpS4QXcRI

Payday advance: Still right for Kentucky

Kevin Borland of the Kentucky branch of the Community Financial Services Association of The United States wants readers to know the failure of House Bill 182 is a victory for consumer freedom of choice. He writes in a Lexington Herald-Leader op-ed that this battle for freedom of choice sits at the heart of almost all arguments for the short term installment loans industry. Resource for this article – Right for consumers to choose preserved in Kentucky by MoneyBlogNewz.

House Bill 182 stopped for a while

Several opponents say they will get together in 2012 to revote with the same bill although Kentucky House Bill 182 was shot down in a 13-10 vote. This shows how Kentucky activists are left in the Dark. Borland says that they don’t understand pay day loans. There is very strict payday lending laws in the state. Payday lenders can’t charge interest at all. The definition of the loan is a single-payment, fee-based product in Kentucky.

It is just “a try to trick legislators and the public” into thinking it is bad to have short term installment loan pricing by using Annual Percentage Rate this way, Borland suggests. In reality, a flat fee of $15 to $25 per $100 loaned on a typical two-week payday advance is a 15 to 25 percent fee, depending upon the lender.

What CLOUT believes

The Citizens of Louisville Organized and United Together (CLOUT) and the Kentucky Coalition for Responsible Lending (KCRL) supported House Bill 182, as did the AARP. The personal installment loan market has banks and credit unions in them, funded by CLOUT and KCRL that compete. Having competition is one thing while CLOUT and KCRL get money from payday lending rivals while attacking them. This involvement shouldn’t be there is a disclaimer at the very least. Borland states this is very significant.

With Chase Financial, AARP competes itself. The money advances AARP members get have a high rate of interest, claims Borland. That’s what it is though.

Financial choices made by consumers

While pay day loans may not be ideal for every financial scenario, they can be the least costly option available, particularly among credit constrained customers. CLOUT, KCRL and AARP should do something else besides short term installment loans if they’re hurtful to anybody, Borland state. The belief that those organizations don’t do so may suggest the attacks are all bark and no bite.

Information from

CLOUT Funding

cloutky.org/page3/page3.html

KCRL Coalition

kyresponsiblelending.wordpress.com/coalition-membership/

Lexington Herald-Leader

kentucky.com/2011/04/11/1704022/consumers-won-with-defeat-of-payday.html

The CFSA encourages responsible lending and borrowing

youtu.be/OZQr_nh7GZA

Brand new jobless claims decrease; employers may be hiring

Employment activity has been showing some positive signs, especially in businesses hiring. A drop in the new jobless rate was disclosed by the government. Long term unemployment claims dropped as well, so it might not be a fluke. Companies might start hiring again this year. Article source – New jobless claims decline; employers may be hiring by MoneyBlogNewz.

Fewer unemployment claims filed

The U.S. Department of Labor recently released some weekly data about the job market. There was a drop in the week that ended on March 26 in the initial jobless claims or brand new applications for unemployment benefits by 6,000, states CNN. The initial jobless claims four-week average was nevertheless over 3,000. The first unemployment claims went up on average. The number of new individuals claiming unemployment benefits was increasing for few weeks, but then turned right around and dropped. Private companies are having fewer layoff announcements. This is also a decreasing number, USA Today reports.

Works better with slow however steady

Short term joblessness claims aside, long term unemployment claims — the number of people continually filing for joblessness benefits — fell by 51,000 during the week that ended March 19. There was a 31,000 decrease in the four-week average. That means that in March, fewer people are unemployed. Private businesses, mostly smaller businesses, are beginning to hire again. Payroll administration company Automatic Data Processing, Inc., observed more than 201,000 brand new jobs on payrolls in the private sector. There has also been an increase in factor jobs in the United States This means more manufacturing jobs are accessible, states Reuters. Even incredibly wealthy firms are starting to have a rosy outlook on hiring, as multiple news outlets reported that a survey of CEOs of large corporations revealed that more than 50 percent of the respondents were intending to hire individuals during the coming year.

Productivity up in The United States

MSNBC states that American productivity increased quite a bit which is the only good thing that came from the unemployment in the last few years. Employment has not been increasing although output in America is almost too where it was before the recession. That means fewer individuals are doing the work, however the same amount is getting done. There are fewer individuals getting paid and lower salaries. However, if the recent trends in employment data are signs of growth returning, that means some of the overworked and underpaid may become less overworked in coming months. More than likely, they’ll not get paid anymore though.

Citations

CNN

money.cnn.com/2011/03/31/news/economy/initial_claims/index.htm

USA Today

usatoday.com/money/economy/2011-03-30-hiring-picking-up.htm

Reuters

reuters.com/article/2011/03/31/us-usa-economy-idUSN3027570820110331?pageNumber=1

MSNBC

msnbc.msn.com/id/42349181/ns/business-world_business/

A $53.4 million boost to smaller businesses

The Treasury Department has offered small businesses a large helping hand. The Treasury Department has infused $53.4 million into lending programs in Connecticut, Vermont and Missouri. The cash that is available is meant to create more investment. Specifically, states had to show that their programs would create $10 worth of lending for every $1 of investment. Source for this article – Treasury kicks off small business lending with $53.4 million by MoneyBlogNewz.

The Small Business Job Act information for you

Small businesses in the U.S. represent about 50 percent of all private-sector jobs in the United States, and 64 percent of new jobs created in the last 15 years have been created by smaller businesses. Small business growth has been encouraged by Congress in the U.S.. The Small Business Jobs Act of 2010 was created to do this. The Act authorized the Treasury to hand out $1.5 billion in loan guarantees to states with solid plans to increase small business investment through loan guarantees and other lending programs.

Plans to invest in Connecticut $13.3 million

Businesses are able to get insurance loans in Connecticut due to the Treasury department funds. One significant part of this is to get investment portfolios from a financial group. The group picked, the Connecticut Development Authority, will be getting $13.3 million for this. There can be financial institutions give the CDA funds to fund small business loans. Nineteen businesses will be a part of this financing.

Spending $13.2 million on small businesses in Vermont's plan

The Treasury only needs to give Vermont $13.2 million for its plan. It plans on getting $132 million in small business lending from that. There will be business loans given to four programs. They will act like bad credit unsecured loans, not payday loans, for the businesses. The Small Business Loan Program will help businesses buy fixed assets for instance equipment with $3.3 million. IT and Bioscience businesses should be able to get help with the Technology Loan Participation Program which will get $3 million. About $1 million will go to portfolio insurance to lend. Another $5.9 million will go to building in Vermont with the Commercial Loan Participation Program.

Using $26.9 million in Missouri

Missouri qualified for the largest loan guarantee of the three states, at close to $27 million. There could be two funds for the money to go into. The Grow Missouri Loan Participation Fund will get $10 million to help companies that have less than 500 employees. The Loan Participation Fund provides loans of up to $3 million to help state companies grow. The final $16.9 million will create a new venture capital fund that will focus on high-tech startup companies.

Articles cited

CNN

money.cnn.com/2011/03/22/smallbusiness/state_small_business_credit_initiative/index.htm

Small Business Administration

sba.gov/advocacy/7495/8420