FOREX-Euro rallies from 4-month low but crisis remains
The euro rose from a four-month low against the dollar o n Friday as investors pared bets against the single currency after a 4 percent drop this month, but concerns about Greece and Spain were likely to keep it under pressure.
Despite Friday’s gains, investors preferred the relative safety of the U.S. dollar and the Japanese yen. They were reluctant to increase risk exposure after Moody’s cut the credit ratings of 16 Spanish banks on Th ursday.
With no U.S. data to drive foreign exchange markets, investors are most likely to consolidate positions ahead of the weekend following days of euro losses.
“The biggest risk today is position squaring into the weekend; however there appears to be increasing evidence that the euro is likely to move lower in the days ahead,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
The euro tumbled to $1.2640, not far from its trough of 2012, before recovering to trade 0.2 percent higher at $1.2718.
The euro was on track for its third straight week of losses, based on Reuters data. The 14-day exponential relative strength index posted at 15.526, leaving the euro in oversold territory since May 7.
The euro fell to 100.17 yen, its lowest since early February, before paring the loss to trade at 100.50, still down 0.2 percent.
Strong demand for the greenback helped the dollar index to a four-month high early in the global session but those gains evaporated.
Some traders had earlier said the euro’s recent decline could slow, given investors may be wary of holding positions over the weekend when leaders of the G8 major industrial economies meet.
No economic policy decisions are expected from the G8 but officials said U.S. President Barack Obama hoped to promote discussion on steps to resolve the euro zone crisis.
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US unemployment rate drops in April
The US unemployment rate fell slightly to 8.1 percent in April despite fewer job gains, the Labor Department said Friday.
The reading was generally in line with market expectations, marking the lowest level since January 2009. The unemployment rate has fallen a full percentage point since last August, Xinhua reported.
However, employers pulled back on hiring for the second straight month. Total non-farm payrolls rose by 115,000 jobs in April, less than the revised 154,000 job gain in March and the average level of 252,000 registered from December to February.
The private sector added 130,000 jobs while governments of all levels slashed 15,000 posts in the month, Labor Department figures showed.
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The Forbes 2012 Tax Guide
Whether you’re still wrestling with your 2011 tax return or planning for tax savings for 2012 and beyond, Forbes can help. In this 2012 Tax Guide, we’ve assembled some of the most useful recent articles by Forbes staff and contributors, including easy-to-watch Tax Tip videos and aTaxes From A to Z series form Philadelphia tax lawyer Kelly Phillips Erb, a.k.a. Taxgirl. Interested in advice on a topic not covered below? Check out Kelly’s blog and those of San Francisco tax lawyer Robert Wood; Investment Strategies columnist William Baldwin; Associate Editor Ashlea Ebeling and CPA Peter J. Reilly. Still have a question? Post it in the comments section, or mail me at jnovack@forbes.com, and I’ll circulate your question to the best tax team on the Web.
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VIDEO TIPS
Choosing A Tax Professional, Has Your Tax Identity Been Stolen?, Tax Breaks For Job Hunters, Tax Planning With IRAs, Claiming Medical Deductions,
TACKLING YOUR 1040
Need More Time To File? Here’s How To Get It
Tax Season Cheat Sheet: Noteworthy Changes For 2011
Free Tax Help Is Still Available
Which Tax Form Makes Sense For You?
Intuit’s TurboTax And H & R Block On Your iPad
How to Make Tax Time Less Painful
Who NOT To Hire To Do Your Taxes
Will Your Tax Pro Get You Audited?
Those Confusing 1099 & W-2 Changes
Ten Things You Should Know About 1099s
How To Get A 6-Month Tax Filing Extension
Confusion On The Making-Work-Pay Credit
DEDUCTIONS! DEDUCTIONS!
Are You Getting Your Share Of Deductions?
The Charitable Acknowledgment Requirement: No Exceptions
How To Grab The Medical Expenses Deduction Before 2013
How To Write Off Your Job Hunt
Tax Breaks For Caregiving Expenses
The Only Good Legal Fees Are Tax Deductible Legal Fees
Strange But Legit Tax Deductions, More Strange Deductions & Still More Deductions
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Oil Falls on Sluggish U.S. Employment Growth, Iran Talks
Oil dropped as an employment report raised concern that U.S. fuel demand will slow and Iran agreed to resume talks on its nuclear program.
Futures fell as much as 2 percent after the government reported on April 6 that the U.S. created 120,000 jobs in March, less than the median forecast of 205,000 in a Bloomberg survey. Negotiations between Iran and the United Nations Security Council members plus Germany are scheduled to start April 14, easing concern that supplies will be disrupted.
“The pretty weak jobs numbers Friday are the main reason we are down so much,” said Chris Dillman, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Prices are also down because of the talks this week in Istanbul between Iran the members of the UN Security Council and Germany.”
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Compensation Cut at Fannie, Freddie
The federal regulator for Fannie Mae and Freddie Mac said Friday it would eliminate bonus pay for dozens of top managers and slash compensation for the chief executives of the mortgage-finance companies.
The moves come in response to a groundswell of outrage from U.S. lawmakers over what they perceive as excessive pay packages for companies controlled by the government. The Federal Housing Finance Agency said the salaries of future chief executives of Fannie Mae and Freddie—both firms are searching for new chiefs—can’t exceed $500,000 annually.
Michael Williams, Fannie’s chief executive, earned $5.3 million in 2011 and four other Fannie executives received pay exceeding $2 million, the company said in a federal filing on Friday.
Charles E. Haldeman Jr., Freddie’s chief executive, earned $3.8 million last year, while three other Freddie executives received compensation of at least $2 million, according to the filing. Mr. Haldeman forfeited bonus pay worth up $2 million, even though the board believed the payments were merited, the filing said.
Freddie also reported on Friday that it posted a profit of $619 million in the fourth quarter, compared with a prior-year loss of $113 million. Freddie paid $1.7 billion to the Treasury in quarterly dividends, and requested $146 million in aid to cover a portion of the payments.
Government and company officials have long wrestled with how to compensate executives at two firms that aren’t likely to exist in their current forms. The executives can’t be paid in stock, which is nearly worthless. And because the firms aren’t expected to earn their way back to profitability, long-term performance goals are hard to calibrate.
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Hedge-Fund Manager Charged in Insider-Trading Probe
A northern California hedge-fund manager was charged Friday with making a series of improper trades in Google Inc. and other technology companies based on inside information, the latest in a broad government crackdown on insider trading.
The case against Doug Whitman, of Whitman Capital in Menlo Park, Calif., stems from a wider investigation involving Galleon Group founder Raj Rajaratnam. Mr. Rajaratnam was convicted of insider-trading charges last May and is serving an 11-year prison sentence.
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MasterCard Takes $495M Charge to Cover Fee Suit
MasterCard Inc. on Thursday said it recorded a $495 million charge in its fourth quarter to cover potential losses related to an ongoing lawsuit brought by merchants over the fees they pay on credit card transactions.
Without the charge, MasterCard’s earnings topped expectations as shoppers put more purchases on debit and credit cards during the holiday season. Shares rose more than 2 percent in premarket trading.
The Purchase, N.Y.-based payments processor said the charge represents the after-tax portion of a potential settlement in the case. On a pre-tax basis, the charge was $770 million.
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Obama administration to deny Keystone XL oil pipeline permit
The Obama administration has decided that it will not issue a permit before Feb. 21 for the controversial Keystone XL oil pipeline from Canada, according to people with knowledge of the decision.
The announcement, which could come as early as Wednesday, comes in response to a 60-day deadline Congress imposed in late December on the decision-making process for the permit as part of a deal to extend a payroll-tax break and unemployment benefits for two months.
Today’s decision, expected from the State Department, would make official what the administration has said from the outset: that under current law, it cannot accelerate the permitting process, especially in light of the need for additional environmental reviews of a new path for the pipeline through Nebraska.
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Singapore Cuts Ministers’ Pay After Wealth Gap Irked Voters
Singapore will cut salaries for its prime minister and top office holders after voter unhappiness over a widening income gap weakened support for the ruling party in last year’s elections.
Prime Minister Lee Hsien Loong’s annual income will fall 36 percent to S$2.2 million ($1.7 million) while the president’s compensation would be reduced 51 percent to S$1.54 million, based on the government-appointed Committee to Review Ministerial Salaries’ recommendations released today. New ministers will make about S$1.1 million, down from S$1.58 million, according to a statement on the committee’s website.
Lee, 59, who said today he would accept the proposed cuts, created the panel in May after his ruling People’s Action Party won that month’s general election with the smallest margin of popular votes since the island’s independence in 1965. Singapore’s ministers are among the world’s highest paid as the government previously benchmarked their wages against salaries of chief executive officers and other top earners in the country.
“An entry-level minister will still make more than President Obama but you can’t please everyone,” said Eugene Tan, a political commentator and assistant professor of law at the Singapore Management University. “Income inequalities are inevitable but the government is now increasingly moving towards how they measure quality of life and development, rather than just GDP growth.”
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E-Mail Clues in Tracking MF Global Client Funds
Federal authorities investigating the collapse of MF Global have uncovered e-mails that detail the transfers of money in the firm’s last days, including transfers that contained customer money, according to people close to the investigation.
One e-mail chain refers to the transfer of roughly $200 million that MF Global owed JPMorgan Chase on Oct. 28 — the firm’s last business day before it filed for bankruptcy. In that chain, a senior official in the firm’s Chicago office was told to make the transfer, said the people close to the investigation who requested anonymity because the inquiry was still open.
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