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Weekly Economic Update

January 14, 2013

NEW YEAR, NEW LAWS AFFECTING YOU
Singles earning more than $200,000 and couples earning more than $250,000 will
face a 3.8% Medicare surtax and a 0.9% increase in Medicare payroll tax. Tax rates
on dividends and long-term capital gains remain at 15% for most, but have risen to
20% for the wealthiest. A scheduled 2% cut to Medicare spending has been delayed
until at least March. Social Security recipients will see benefits rise 1.7% this year.
1,2,3

HUGE CHANGES AHEAD FOR HOME LOANS
Last week, the Consumer Financial Protection Bureau presented new rules for the
mortgage industry – rules that will ban teaser-rate mortgages and “liar loans” in
2014. Next year, no legal protection will be available for banks offering interest-only
or negative-amortization loans, and restrictions will prevent lenders from
originating mortgages with balloon payments and severe upfront points and fees.
Banks will also be barred from offering mortgages with a payment-to-income ratio
exceeding 43%, though FHA/VA loans or mortgages backed by Fannie Mae or
Freddie Mac could be exempt from this restriction.
4

JACK LEW NOMINATED FOR TREASURY SECRETARY
The former hedge fund manager and current White House chief of staff has strong
ties to Wall Street, which worries some members of Congress. Still, opposition to the
nomination does not seem to be widespread. If confirmed, Lew could start his new
job in late January, when Timothy Geithner is slated to leave the post.
5

A SECOND STRAIGHT WINNING WEEK
The S&P 500 settled at 1,472.05 Friday, up 0.38% in five trading days. The Dow rose
0.40% last week to 13,488.43, while the NASDAQ gained 0.77% to settle at 3,125.63.
The CBOE VIX fell 3.33% on the week to go -25.80% YTD.
6,7

THIS WEEK: Fed Chairman Ben Bernanke speaks at the University of Michigan
Monday; the Detroit Auto Show also begins. Tuesday, the December PPI and
December retail sales figures are out; Lennar offers Q4 results. Wednesday brings
December’s CPI, a Fed Beige Book, a report on December industrial output and
earnings from Goldman Sachs, eBay, JPMorgan and Bank of NY Mellon. Thursday,
December housing starts data arrives plus earnings from Bank of America, BB&T,
BlackRock, Capital One, Citigroup, UnitedHealth, American Express and Intel.
Friday, earnings are in from Morgan Stanley and General Electric.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.93 +8.35 +1.40 +5.35
NASDAQ +3.51 +15.30 +5.62 +11.59
S&P 500 +3.22 +13.89 +1.01 +5.87
REAL YIELD 1/11 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO

10 YR TIPS -0.63% -0.10% 1.56% 2.34%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/11/126,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their
affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you.
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any
Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ
Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of
Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered
to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX)
operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago
Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data
products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange
and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX
Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional
risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in
accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness
or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are
unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
Citations.
1 – money.msn.com/tax-tips/post.aspx?post=0788a6e0-58d0-4a46-81d2-309089bbc1ac [1/11/13]
2 – http://www.fidelity.com/viewpoints/personal-finance/new-medicare-taxes [1/4/13]
3 – http://www.ssa.gov/pressoffice/pr/2013cola-pr.html [10/16/12]
4 – http://www.nytimes.com/2013/01/10/business/consumers-win-some-mortgage-safety-in-new-rules.html [1/10/13]
5 – http://www.cbsnews.com/8301-250_162-57563329/jack-lew-accepts-treasury-secretary-nomination/ [1/10/13]
6 – http://www.cnbc.com/id/100372685 [1/11/13]
7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F11%2F12&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F11%2F08&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F10%2F03&x=0&y=0 [1/11/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/11/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/11/13]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2003/ofm010803.pdf [1/8/03]

 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of John Jastremski, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.


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John Jastremski is a Representative with FSC Securities and may
be reached at http://www.theretirementgroup.com.

 

 

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