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	<title>Business &#38; MoneyCategory: The Economy &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>Viewpoint: &#8216;Chained&#8217; CPI for Social Security Calculations Robs Retirees</title>
		<link>http://business.time.com/2013/05/14/how-chained-cpi-for-social-security-calculations-robs-retirees/</link>
		<comments>http://business.time.com/2013/05/14/how-chained-cpi-for-social-security-calculations-robs-retirees/#comments</comments>
		<pubDate>Tue, 14 May 2013 17:00:33 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79869</guid>
		<description><![CDATA[Financially speaking, we keep asking more of retirees. First, we ask folks who have saved for a lifetime to live on less while banks and indebted consumers use low interest rates to heal. Then we ask them to endure another whack at Social Security benefits while the government tries to rein in spending. This isn’t especially new. We’re half a decade into historically low rates, which have made it all but impossible for many retirees to secure a livable income stream through traditional vehicles like bonds, bank CDs, and fixed annuities. But that’s kind of the point: A lot of seniors have sold assets to make ends meet. After five years, they are running out of things to sell. Instead of relief, they get a bloody nose. Last month, the White House budget proposed tweaks to the cost-of-living formula used to determine annual Social Security benefits increases. Rest assured: This tweak would not make benefits more generous. (MORE: The New Retirement: Forget Being Rich, All We Want Is Peace of Mind) The President wants to use a “chained” consumer-price index, which accounts for how most people actually live. When beef prices go up, for example, many people buy cheaper chicken instead &#8212; so they don’t actually feel the full cost of the rising beef. Currently the CPI is running at 1.5%; chained CPI at 1.4%. The problem is that while such a small difference may sound meaningless in the short term, when benefits increases are held back like this year after year, it has a reverse compounding effect. After 10 years, the average Social Security benefit would be about 3% less; after 30 years it would be 8.4% less. Instead of receiving, say, $20,000 a year, you’d be getting $18,320. If that still doesn’t sound so bad, consider that even the current more generous CPI formula may systematically understate the inflation rate for seniors. The reason is that cheaper substitutes for many of their expenditures simply are not available, especially in the areas of healthcare and housing, which are big parts of a<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79869&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>The New Retirement: Forget Being Rich, All We Want Is Peace of Mind</title>
		<link>http://business.time.com/2013/05/13/the-new-retirement-forget-being-rich-all-we-want-is-peace-of-mind/</link>
		<comments>http://business.time.com/2013/05/13/the-new-retirement-forget-being-rich-all-we-want-is-peace-of-mind/#comments</comments>
		<pubDate>Mon, 13 May 2013 17:19:15 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Budgeting]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79469</guid>
		<description><![CDATA[We may never tire of discussing lessons from the Great Recession, which hit two groups especially hard: teens who saw parents lose a home or job, and boomers who saw their savings depleted at precisely the wrong moment in life. The kids’ scars are mostly emotional. Financially, they had little to lose; indeed they stand to benefit from the more frugal approach to living that the recession has inspired in many. It’s a different story for boomers who are newly retired or rapidly nearing that stage of life. They saw their assets shrink just as they needed them to grow and they may have had to sell at depressed prices, ensuring they&#8217;d miss the rebound. Compounding their financial loss, interest rates are so low that boomers (and elders) are now finding it difficult to secure a decent monthly income stream. This experience goes a long ways toward explaining boomers’ new priorities. By a margin of 7 to 1, adults past the age of 45 say their focus today is on peace of mind — not wealth accumulation, according to a new retirement study from Merrill Lynch and Age Wave. (MORE: Sizing Up the Big Question: How Much Money Do You Need to Retire?) Long gone is the prerecession attitude of taking risks and building the biggest portfolio possible. Today’s new retirees and preretirees crave the peace of mind that comes from having enough money safely tucked away to provide a sufficient and dependable income stream. In the survey, guaranteed income and protecting assets were four times more important than achieving high-risk returns. This is why sales of fixed annuities are exploding and guaranteed lifetime income products are the new subject du jour. Today’s retirees don’t need a stockpile to count so much as predictable income so that they can spend time with family and on experiences and pursue new, if modest, passions. “Having more money can buttress peace of mind,” David Tyrie, head of personal wealth and retirement for Bank of America Merrill Lynch, says in an e-mail. “But there are<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79469&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>BlackRock&#8217;s Fink: Put it All in Stocks</title>
		<link>http://business.time.com/2013/05/10/blackrocks-fink-put-it-all-in-stocks/</link>
		<comments>http://business.time.com/2013/05/10/blackrocks-fink-put-it-all-in-stocks/#comments</comments>
		<pubDate>Fri, 10 May 2013 18:16:42 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79692</guid>
		<description><![CDATA[Laurence Fink is in the business of taking measured risks. That’s what investing is all about and, well, he happens to be the CEO the world’s largest investment firm: BlackRock, which has $4 trillion under management. So it may be that he was perfectly comfortable standing before a packed classroom at New York University’s Stern School of Business on May 7 and opening his remarks with a risky line: “I want to talk about the subject of old age,” Fink began. Old age? Most of these kids haven’t left home yet. They still believe they’re immortal. But in a sign of how times have changed, the students didn’t nod off or even roll their eyes. The long term, at least as it relates to money, seems to have entered Millennials’ collective conscious. They wanted more. (MORE: Mandatory Savings Accounts Are Coming Your Way) Fink gave it to them, starting with some well-worn but nonetheless effective statistics on longevity. A third of babies born in 2011 will live to age 100. If you make it to 65, odds are you’ll live to 85. One in 10 who are now 65 will make to 95. His point: Many of us are going to live a long time, and that is “a very expensive blessing” that will rewrite the rulebook on saving and investing. You need to start now, he implored to a bunch of kids yet to earn their first full-time salary. Not convinced that kids—or anyone else, for that matter—really get it, Fink called for a new mandatory savings program as part of an overhaul of the nation’s retirement thinking. “The current system is broken,” he said. “We need a comprehensive approach that includes some form of mandatory savings in addition to Social Security.” (MORE: A New Idea to Fix the Retirement-Savings Crisis) But he offered more than a policy initiative to his young audience, which through the questions that were asked demonstrated a genuine thirst for financial advice. In some ways, Fink broke the financial planning mold. His main points: Invest everything<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79692&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>Safe Bet? Central Banks Suddenly Start Buying Stocks</title>
		<link>http://business.time.com/2013/04/26/why-are-central-banks-suddenly-buying-stocks/</link>
		<comments>http://business.time.com/2013/04/26/why-are-central-banks-suddenly-buying-stocks/#comments</comments>
		<pubDate>Fri, 26 Apr 2013 15:06:31 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78589</guid>
		<description><![CDATA[Fed up with low bond yields, the most conservative investors on the planet have begun to load up on stocks. Retirees? No, I’m talking about the world&#8217;s central bankers. Nearly 1 in 4 central bankers say their institution owns stocks or plans to own stocks in the near future, according to a Bloomberg report. The Bank of Japan plans to more than double its stock position, according the report, which cites a Central Banking Publications and Royal Bank of Scotland survey. The Bank of Israel bought stocks for the first time last year. And both the Swiss National Bank and Czech National Bank have boosted stock ownership to at least 10% of reserves. This move into stocks is highly unusual. Central bankers are famously risk-averse. Previous surveys in this series didn’t even ask about stocks. Central banks tend to hold reserves in government bonds, which are easy to buy and sell. (They use reserves to manage their national currencies.) But with yields having fallen below the rate of inflation, holding bonds devalues their reserves. So they have begun diversifying into other assets, chasing higher returns. This is not unlike the dilemma facing many retirees and other individual investors: holding ultra-safe interest-bearing investments is wise past a certain age; yet when yields are lower than the inflation rate, this strategy erodes buying power and undermines long-term financial security. For this reason, many retirees have been seeking higher yields with dividend-paying stocks and even moving into high-yield, high-risk corporate bonds. (MORE: A Nation of Renters: Should We Be Worried That Fewer Americans Own Homes?) Central banks, of course, have a much bigger margin for error than your typical retiree. Their time horizon is eternity and they can print more money if they must, though the consequences of doing so are best avoided. Still, central banks moving into stocks offers some comfort to retirees pushed in the same direction. Everyone must adjust to this new normal. The U.S. Federal Reserve does not appear to have joined in the stock-buying trend. The Fed is not permitted to<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78589&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>How to Tame the Rising Cost of Prom Season</title>
		<link>http://business.time.com/2013/04/24/how-to-tame-the-rising-cost-of-prom-season/</link>
		<comments>http://business.time.com/2013/04/24/how-to-tame-the-rising-cost-of-prom-season/#comments</comments>
		<pubDate>Wed, 24 Apr 2013 09:45:47 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Budgeting]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Psychology of Money]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78232</guid>
		<description><![CDATA[The cost of prom night rose 5% this year to an average $1,139 per attendee—a staggering sum that should spark frank spending discussions in every household with a teenager. Only three years ago, the recession was fresh and families were vowing to tighten their belts for good. In that environment, prom spending on everything from dresses and tuxedos to limos and flowers totaled an average $807. That’s a lot. But as the economy improved spending shot passed $1,000 last year before jumping again this spring, according to an annual Visa survey. Prom spending has been called the new social arms race, as both parents and their teens seek to stand out and choose to spend extravagantly for one evening. “Prom has devolved into a competition to crown the victor of high school society,” Nat Sillin Visa’s head of U.S. Financial Education, said in a release. The most troubling aspect of this spending free-for-all is the recurring finding that those who can least afford it are spending the most. In households with less than $50,000 of annual income, spending plans this year average $1,245; parents who make more than $50,000 will spend an average of $1,129. Two years ago, Visa found that the top prom spenders had household income under $30,000. (MORE: Communication Breakdown: If You Think You’re Talking About Money, Your Kids Don’t Hear It) Prom night is also an opportunity for single parents to spend lavishly on their teens—forking over an average $1,563, which is almost double the $770 that married parents will spend. What’s going on here? People have not forgotten the lessons of the Great Recession. In a recent Fidelity survey nearly half said that even now they are saving more, reducing debt and building an emergency fund, and 78% of those taking such steps said the measures were part of permanent personal financial strategy. Yet prom night appears untouchable. Okay, splurging has its place. But keeping up appearances and one-upping the cool kids probably isn’t the wisest choice. Sticking to a budget almost always makes more<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78232&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Budgeting</primary_category><primary_category_link>http://business.time.com/category/saving-spending/budgeting-saving-spending/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/892467-001.jpg?w=240</featured_image>
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			<media:title type="html">Gold bag, corsage and plastic cups on table, Prom</media:title>
		</media:content>

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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>The Real Significance of the Bitcoin Boom (and Bust)</title>
		<link>http://business.time.com/2013/04/12/the-real-significance-of-the-bitcoin-boom-and-bust/</link>
		<comments>http://business.time.com/2013/04/12/the-real-significance-of-the-bitcoin-boom-and-bust/#comments</comments>
		<pubDate>Fri, 12 Apr 2013 09:45:40 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[E-commerce]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Financial Privacy]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Information Technology]]></category>
		<category><![CDATA[Retail]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[Technology & Media]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[Wealth]]></category>
		<category><![CDATA[World Finance]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77371</guid>
		<description><![CDATA[The volatile rise-and-fall of Bitcoin has prompted lots of stories explaining why the online virtual currency is a classic bubble. Many compare it to tulip mania in 17th century Holland, where prices of rare tulip bulbs soared to absurd heights and then crashed, ruining the speculative investors who had bought them. But the Bitcoin phenomenon is more than a bubble. It says something important about the current and future state of the global economy. The scale of the recent boom-and-bust has been staggering indeed. At the start of the year, a Bitcoin was worth $13.51. Earlier this week, it traded as high as $266. And on Thursday, it plummeted to less than $100, as one of the exchanges where Bitcoins are traded closed temporarily. This would be comparable to the exchange rate for the British pound soaring from $1.62 (where it was on Jan. 1) to $31.90 and then falling back to $12. Such monumental appreciation and volatility are clearly the result of speculation — people buying the online currency just because they think its value will rise, not because they want to use it to purchase goods and services. But Bitcoins’ gains are not the result of speculation alone. They partly reflect the fact that the Bitcoin system is much better designed than previous online currencies. And more significantly, the run-up also reflects anxiety about the safety of the global banking system and the stability of major international currencies. (MORE: No Money, No Problems: Canada Considers Completely Digital Currency) The technicalities of the Bitcoin system are complex, but to make this online currency more successful than previous versions, the designers overcame two key challenges. First, to prevent counterfeiting, they attached a history of transactions to each currency unit — but allowed users to keep their transactions nearly anonymous. Counterfeiting is hard because fake Bitcoins would need an authenticated history to pass muster. Second, they strictly controlled the supply of Bitcoins outstanding — thereby saving it from the disastrous fate of, for example, the paper currency known as assignats that were issued during<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77371&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>World Finance</primary_category><primary_category_link>http://business.time.com/category/world-finance/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/biz-bitcoin-130412.jpg?w=240</featured_image>
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			<media:title type="html">Bitcoin Value Soars And Drops</media:title>
		</media:content>

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			<media:title type="html">michaelsivy</media:title>
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		<item>
		<title>Financial Independence? Today&#8217;s Young People Don&#8217;t Expect It Anytime Soon</title>
		<link>http://business.time.com/2013/04/04/financial-independence-todays-young-people-dont-expect-it-anytime-soon/</link>
		<comments>http://business.time.com/2013/04/04/financial-independence-todays-young-people-dont-expect-it-anytime-soon/#comments</comments>
		<pubDate>Thu, 04 Apr 2013 11:00:42 +0000</pubDate>
		<dc:creator>Martha C. White</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Budgeting]]></category>
		<category><![CDATA[Careers & Workplace]]></category>
		<category><![CDATA[Credit Cards]]></category>
		<category><![CDATA[Educational Financing]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Job Markets]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[adult children]]></category>
		<category><![CDATA[children]]></category>
		<category><![CDATA[college]]></category>
		<category><![CDATA[family]]></category>
		<category><![CDATA[financial independence]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76494</guid>
		<description><![CDATA[In a mere two years, the proportion of teenagers who expect to be financially dependent on their parents until their mid-20s has doubled. That gives us all another reason to feel sympathy for parents who have teenagers right now.  A new survey conducted by Junior Achievement, a group that teaches kids about money and jobs, found that 25% of teens think they won’t be able to support themselves until their mid-20s. Two years ago, just 12% of teens surveyed said that they&#8217;d have to reach the 25-to 27-year-old age bracket before being able to pay all of their own bills. Correspondingly, the proportion of teens who expect to achieve financial independence by the ages of 18 to 24 has plummeted, from 75% in 2011 to 59% today. Are these kids just unmotivated? Maybe some of them are, but many more are facing escalating college costs and poor job prospects. An alarming number have a poor understanding of budgeting and basic finance as well. Plus, the old stigmas attached to relying on one&#8217;s parents well into adulthood, and even moving back home after college, seem to have faded. To make ends meet, Generation X crowded in with roommates, ate Ramen and slept on futons. Post-college millennials still have roommates, but they increasingly call them &#8220;mom&#8221; and &#8220;dad.&#8221; The number of young adults living with their parents spiked during the Great Recession era. Today&#8217;s teens apparently don&#8217;t mind the idea of moving back in with the &#8216;rents, or they at least understand the necessity of making such a move given the state of the economy and the likelihood of large student loans down the road. (MORE: Being 30 and Living With Your Parents Isn’t Lame — It’s Awesome) Providing a place to live isn&#8217;t the only way parents are helping out their adult children. In many families, it’s become the norm for parents to step in and pay bills for smartphones, Internet access, music and TV subscription services like iTunes and Hulu. A survey of parents with adult children up to 35<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76494&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Education</primary_category><primary_category_link>http://business.time.com/category/planning/financial-education/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/137470615-e1365022434293.jpg?w=240</featured_image>
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			<media:title type="html">three teenage girls</media:title>
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			<media:title type="html">marthacwhite</media:title>
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		<title>Scared to Prepared: How the Great Recession Changed Our Spending Habits</title>
		<link>http://business.time.com/2013/04/03/scared-to-prepared-how-the-great-recession-changed-our-spending-habits/</link>
		<comments>http://business.time.com/2013/04/03/scared-to-prepared-how-the-great-recession-changed-our-spending-habits/#comments</comments>
		<pubDate>Wed, 03 Apr 2013 04:01:25 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76463</guid>
		<description><![CDATA[In the months following the financial crisis, just about everyone got religion. They rediscovered core values and began to place relationships and experiences above material things. But it was anybody’s guess how long this earnest austerity would last. Five years later the economy is growing steadily, housing is recovering, and the stock market is at record highs. Certainly, there are signs of letting go, especially in the art market where The Scream recently sold for $119 million, the most ever for a painting at auction. (MORE: Internet Saved the Video Star: How Music Videos Found New Life After MTV) Yet for the vast majority, the shock of the Great Recession lingers — and that’s a good thing in terms of how most folks are managing their money. In a new survey from Fidelity, nearly half of respondents say even now they are saving more, reducing debt and building an emergency fund. A new survey from Principal Financial finds that the number of workers preparing for retirement is on the rise and that most workers who expect a tax refund plan to save or invest it, or pay down debt. Before the crisis, people commonly cited going on vacation and buying big ticket items as well. Perhaps most telling, the Fidelity survey found that 78% of those who have taken steps to shore up their finances say the measures are part of a new and permanent personal financial strategy. “The sheer number of people who say the changes are permanent was probably most surprising,” says Ken Hevert, vice president of retirement products at Fidelity. People are moving from scared to prepared, Hevert says. When the financial crisis hit, 64% said they were scared and 45% said they were prepared; today, 45% say they are scared and 61% say they are prepared — a near perfect reversal. In general, those who feel prepared are the ones who have cut debt, increased savings and built an emergency fund. There remains ample blame to go around when it comes to who caused the financial crisis:<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76463&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/gs1125063.jpg?w=240</featured_image>
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			<media:title type="html">dankadlec</media:title>
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		<title>Gas Prices Almost Never Decline in March—But They Did Last Month</title>
		<link>http://business.time.com/2013/04/02/gas-prices-almost-never-decline-in-march-but-they-did-last-month/</link>
		<comments>http://business.time.com/2013/04/02/gas-prices-almost-never-decline-in-march-but-they-did-last-month/#comments</comments>
		<pubDate>Tue, 02 Apr 2013 18:29:55 +0000</pubDate>
		<dc:creator>Brad Tuttle</dc:creator>
				<category><![CDATA[Autos]]></category>
		<category><![CDATA[Companies & Industries]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Oil]]></category>
		<category><![CDATA[Smart Spending]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[crude]]></category>
		<category><![CDATA[fuel efficiency]]></category>
		<category><![CDATA[gas]]></category>
		<category><![CDATA[gas prices]]></category>
		<category><![CDATA[gasoline]]></category>
		<category><![CDATA[mpg]]></category>
		<category><![CDATA[seasonal demand]]></category>
		<category><![CDATA[unemployment]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76416</guid>
		<description><![CDATA[Traditionally, gas prices have risen in the spring and peaked during the high-demand summer months. Last year, though, prices spiked starting in February and reached their highs in early May, before declining slightly in summer. Has a new seasonal pattern been established? The only real &#8220;pattern&#8221; here seems to be the absence of one that motorists can predictably rely on. Gas prices usually fall in February. But prices at the pump rose in February 2012, and did so again in February 2013. So has there been a shift, in which the annual seasonal rise in gasoline prices now starts in February and continues increasing as the weather warms and more cars hit the road? Nope. Gas prices almost always rise in March. But, in a twist that&#8217;s perhaps even more surprising than prices increasing during the past two Februarys, the national per-gallon average dropped fairly sharply last month. AAA announced that between March 1 and 31, gas prices dropped 15¢ nationwide. That&#8217;s the first time prices at the pump have dipped in March in 10 years—and when it last happened, in 2003, the decrease was a mere 1¢. (MORE: Buy an Electric Car, Get a Gas-Powered Car for Free) &#8220;Gas prices in March came in like a lion and are going out like a lamb,&#8221; wrote GasBuddy analyst Patrick DeHaan. &#8220;Essentially what we&#8217;re seeing here this month is perhaps the largest monthly decrease ever during the month of March &#8212; a month that has almost always seen prices finishing the month substantially higher than where they entered.&#8221; Could it be that gas prices already hit their top levels for the year, when the national average was $3.79 near the end of February? Could drivers catch a break on fuel costs with cheaper prices for the rest of the year? That&#8217;s pretty unlikely. “AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year,” AAA spokesperson Avery Ash announced in<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76416&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Oil</primary_category><primary_category_link>http://business.time.com/category/companies-industries/oil-companies-industries/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2011/09/dv879021-e13159391446971.jpg?w=240</featured_image>
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			<media:title type="html">gas, gas station</media:title>
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			<media:title type="html">bradtuttle</media:title>
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		<title>Why Derivatives May Be the Biggest Risk for the Global Economy</title>
		<link>http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/</link>
		<comments>http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/#comments</comments>
		<pubDate>Wed, 27 Mar 2013 15:06:48 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Europe]]></category>
		<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Investment Banking]]></category>
		<category><![CDATA[Markets]]></category>
		<category><![CDATA[Municipal Government]]></category>
		<category><![CDATA[Private Equity]]></category>
		<category><![CDATA[Stocks]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Too-Big-To-Fail]]></category>
		<category><![CDATA[Wall Street]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[Wealth]]></category>
		<category><![CDATA[World Finance]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=75881</guid>
		<description><![CDATA[Four years after the U.S. recession ended, the global economy is still beset by problems. The present danger comes from Cyprus – where the sea foam once gave birth to the goddess Aphrodite but now only creates froth in panicky financial markets. The proposed bailout plan for troubled Cypriot banks would impose losses of up to 40% on the largest depositors. And that, in turn, could undermine confidence in the banks of other troubled euro zone countries. Cyprus is only the latest challenge for global financial stability, however. In the U.S., deteriorating urban finances – from Detroit to Stockton, Calif. – threaten municipal bond holders, public-sector workers, and taxpayers. In addition, a rise in long-term interest rates seems inevitable sooner or later, either because of inflation or because the Federal Reserve backs away from its easy-money policies. Higher interest rates would mean big losses for bond investors, and also for government-sponsored entities, such as Fannie Mae and Freddie Mac, that hold mortgage-backed assets. The greatest risk of all, however, may be one of the least visible – namely, the expanding, shadowy market for derivatives. These highly sophisticated investments have contributed to financial disasters from the 2008 bankruptcy of Lehman Brothers to J.P. Morgan’s 2012 trading losses in London, which totaled more than $6 billion. (MORE: The $600 Billion the IRS Can&#8217;t Collect) Basically, derivatives are financial contracts with values that are derived from the behavior of something else – interest rates, stock indexes, mortgages, commodities, or even the weather. Just as homebuyers make only a down payment when they buy a house with a mortgage, derivatives traders put down only a small amount of cash. Moreover, one derivative can be used to offset or serve as collateral for another. The result is that a massive edifice of derivatives can be supported by a relatively small amount of real money. Some derivatives, such as typical stock options, trade on exchanges. But many are simply private contracts between banks or other sophisticated investors. As a result, it’s hard to know the total<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75881&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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			<media:title type="html">michaelsivy</media:title>
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		<title>If There’s No Inflation, Why Are Prices Up So Much?</title>
		<link>http://business.time.com/2013/03/12/if-theres-no-inflation-why-are-prices-up-so-much/</link>
		<comments>http://business.time.com/2013/03/12/if-theres-no-inflation-why-are-prices-up-so-much/#comments</comments>
		<pubDate>Tue, 12 Mar 2013 09:45:03 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economic Indicators]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Jobs]]></category>
		<category><![CDATA[Labor]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Real Estate]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[Tax Policy]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=74397</guid>
		<description><![CDATA[Last week, I ran out of ink for my printer and ordered some more online. My computer automatically pulled up the previous order, and I was shocked to see that the price of the ink cartridges I was buying had gone up 25%. To my mind, ink always seems overpriced. Manufacturers sell printers cheaply because they know that they can make lots of money on the ink. For the same reason, John D. Rockefeller’s Standard Oil is said to have sold millions of cheap kerosene lamps in order to make big profits selling kerosene. But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year? Price hikes for a particular item here or there don&#8217;t qualify as inflation. If one thing gets more expensive but something else gets cheaper, that’s what economists call a relative price change. Inflation is a simultaneous increase in prices across the board. Some measures of inflation, such as the GDP Deflator, track price changes that affect businesses as well as those that affect consumers. But the Consumer Price Index is supposed to focus on inflation at the consumer level. And the CPI has recorded minimal increases over the past four years. Since the recession ended, the 12-month change in consumer prices has averaged 2% and has never been as high as 4%. (MORE: Online &#8216;Predictions&#8217; Market Intrade Shuts Down Months After Federal Lawsuit) There are lots of other ways to gauge inflation, however, that give very different signals. Gold was $930 an ounce when the recession ended, and today it’s $1,583. So if you believe in the gold standard, prices have increased 70% in four years – or an annualized rate of 14.2%. Of course, many economists dismiss the gold price as an archaic indicator. So it may be more meaningful to look at price increases over a broad range of commodities. The Reuters CRB Commodity Index, which tracks the prices of coffee, cocoa, copper, and cotton, as well as<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=74397&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/01/inflation.jpg?w=240</featured_image>
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			<media:title type="html">inflation</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>What Happens When the Fed Really Does Run Out of Ammunition?</title>
		<link>http://business.time.com/2013/02/27/what-happens-when-the-fed-really-does-run-out-of-ammunition/</link>
		<comments>http://business.time.com/2013/02/27/what-happens-when-the-fed-really-does-run-out-of-ammunition/#comments</comments>
		<pubDate>Wed, 27 Feb 2013 10:45:01 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Jobs]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Portfolio Strategy]]></category>
		<category><![CDATA[Real Estate]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[Real Estate Markets]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=72950</guid>
		<description><![CDATA[Stocks dropped sharply last week, with the Dow falling some 200 points, after the Federal Reserve released the minutes of its January Open Market Committee meeting. Although the minutes reaffirmed the Fed’s easy-money policy, they also showed that some members of the committee had voiced concerns. The dissenters cautioned that quantitative easing, the current program of massive bond buying, could not be continued indefinitely without serious risks. Loading the Fed up with bonds creates the danger of big losses for the central bank if interest rates rise (which causes bond prices to fall). In a worst-case scenario, those losses could total half a trillion dollars over three years, according to one estimate. As a result, the January minutes included a carefully worded caveat: “Evaluation of the efficacy, costs and risks of asset purchases might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred.” Fed Chairman Ben Bernanke remains undaunted, however. In his testimony before Congress on Tuesday he defended his easy-money policy, noting that it has &#8220;supported real growth in employment and kept inflation close to our target.&#8221; With consumer prices up only 1.6% over the past year, Bernanke declared: &#8220;My inflation record is the best of any Federal Reserve chairman in the postwar period — or at least one of the best.&#8221; (MORE: Italy&#8217;s Political Mess: Why the Euro Debt Crisis Never Ended) In addition he argued that worries about potential losses on the Fed&#8217;s ballooning bond holdings were overstated. Careful portfolio management, he said, would allow the central bank to absorb the losses over time by trying to hold bonds to maturity rather than selling at a loss. &#8220;We could exit without ever selling,&#8221; Bernanke said. This debate raises profound questions — probably not for the last time — about the effectiveness of the Fed&#8217;s easy-money policy. Why hasn&#8217;t it worked better? How long can it be continued? And, most important, what will happen when the Fed finally runs out of ammunition and quantitative easing comes to<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=72950&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/02/biz-ben-bernanke-130227.jpg?w=240</featured_image>
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			<media:title type="html">Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Is the World on the Brink of a Currency War?</title>
		<link>http://business.time.com/2013/02/21/is-the-world-on-the-brink-of-a-currency-war/</link>
		<comments>http://business.time.com/2013/02/21/is-the-world-on-the-brink-of-a-currency-war/#comments</comments>
		<pubDate>Thu, 21 Feb 2013 10:45:44 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Currency]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Energy]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Markets]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Portfolio Strategy]]></category>
		<category><![CDATA[Real Estate]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Stocks]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[World Finance]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=72468</guid>
		<description><![CDATA[The latest hot topic among economic talking heads is the coming currency war. According to conventional wisdom, there’s a risk that major countries will – simultaneously – try to revive their sluggish economies by pushing down the value of their currencies. That strategy could backfire, according to this line of thought, stifling international trade, tipping economies back into recession, and possibly causing Depression-style hyperinflation to boot. Get ready to sell apples on the nearest street corner and buy your morning coffee with a wheelbarrow full of paper money. It all sounds very unpleasant. But the dogs of war are unlikely to slip their leash. In a classic currency war, a country prints money, holds interest rates down, or intervenes in foreign exchange markets in order to depress the value of its own currency. That makes the country&#8217;s exports cheaper and more attractive for foreign buyers. In theory, this can enable an economy to grow faster than would be possible on the basis of domestic demand alone. Only trouble is, if every country pursues a similar strategy, they all devalue their currencies at the same time and no country gains an advantage over its trading partners. It may look as though that’s what’s happening now, since many of the largest economies are following policies that could depress the value of their currencies. But they’re doing so for fundamentally different reasons – to address domestic economic problems rather than to boost exports. And while this creates some real risks, they aren’t the ones that the term &#8220;currency war&#8221; implies. (MORE: Why Can&#8217;t People with Student Loans Refinance at Better Rates?) Currency wars – and trade wars generally – have their origins in a 17th and 18th century economic theory known as mercantilism. The idea was that a country’s wealth comes from selling more than it buys. A colonial empire could achieve this positive balance of trade by acquiring cheap raw materials from its colonies and then ensuring that it exported more finished goods than it imported. This was usually accomplished with tariffs that made<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=72468&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/07/2100_ml_foreignmoney_0713.jpg?w=240</featured_image>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Why Being a Quitter Is a Good Sign for the Economy</title>
		<link>http://business.time.com/2013/02/15/why-being-a-quitter-is-a-good-sign-for-the-economy/</link>
		<comments>http://business.time.com/2013/02/15/why-being-a-quitter-is-a-good-sign-for-the-economy/#comments</comments>
		<pubDate>Fri, 15 Feb 2013 15:00:16 +0000</pubDate>
		<dc:creator>Josh Sanburn</dc:creator>
				<category><![CDATA[Careers & Workplace]]></category>
		<category><![CDATA[Economic Indicators]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Job Markets]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=70732</guid>
		<description><![CDATA[You only quit a job when you feel you can find something better. And in December, more Americans felt confident enough to pack up their desks and look for employment elsewhere than at any time since the start of the Great Recession. Every month the Bureau of Labor Statistics releases a Job Openings and Labor Turnover Survey (JOLTS), which polls employers about the number of employees they laid off and how many up and quit. (MORE: Does President Obama Really Believe in Deficit Reduction?) In December, employees who left of their own volition made up 53% of all “job separations,” totaling 2.16 million Americans. About 1.57 million were fired while 345,000 either retired, transferred, died, or became disabled. That percentage of American quitters is the highest it’s been since June 2008, suggesting that workers are feeling at least somewhat optimistic about the economy and their chances of finding employment elsewhere. “I would hesitate to call it a strong sign of recovery,” says Nicholas Colas, chief market strategist at ConvergEx Group, which analyzes BLS data. “But it is very positive.” While there have been mild swings in the number of workers quitting their jobs over the last few years, those numbers have been gradually increasing after hitting a low of around 37% in May 2009. (MORE: How to Plan on Good Weather) Some of the numbers in the more detailed December report aren&#8217;t as positive. Job openings were down 4.6% from November; and hiring, which was 4.7% lower than the month before, took a hit. But it also showed that employers laid off the fewest employees in the 12-year history of the JOLTS report. The number of quitters points to worker confidence about the nation&#8217;s employment situation generally. This comes as a surprise given the fact that the White House and Congress were locked in a battle over the “fiscal cliff” that same month. Most analysts figured that those weeks of fruitless negotiations over the federal budget would have a negative effect on consumer behavior. And it did bring down consumer confidence numbers<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=70732&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economic Indicators</primary_category><primary_category_link>http://business.time.com/category/economy-policy/economic-indicators/</primary_category_link>
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			<media:title type="html">jsanburn</media:title>
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		<title>Lessons in Socialism: How Cuba Can Become Relevant Again</title>
		<link>http://business.time.com/2013/02/06/lessons-in-socialism-how-cuba-can-become-relevant-again/</link>
		<comments>http://business.time.com/2013/02/06/lessons-in-socialism-how-cuba-can-become-relevant-again/#comments</comments>
		<pubDate>Wed, 06 Feb 2013 15:00:09 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Entrepreneurship]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=69595</guid>
		<description><![CDATA[Havana, Cuba — In this once spectacular tropical city, three buildings collapse from neglect every single day. There has been little infrastructure investment in 50 years and the average worker earns $20 a month. By almost any economic measure, socialism under Fidel Castro has been an abject failure. Yet things are beginning to change. Presumed to be ailing, Castro has handed power to his brother Raul, who is permitting modest levels of private enterprise and home ownership. Meanwhile, President Obama has eased U.S. travel restrictions to Cuba. Legal passage from the States has soared more than 10-fold in a decade. Most of the 600,000 U.S. residents expected to visit Cuba this year have family there, but conventional tourism is on the rise as well. I was there in January on a people-to-people visa. Critics worry that tourist dollars will prop up the failed socialist system and prolong its grip. But based on my trip, there&#8217;s reason to believe the opposite may prove to be the case: Spirited young entrepreneurs are rising from Havana’s rubble to take advantage of these small but important signs of economic liberalization. Interestingly, Cuba&#8217;s glacial but perceptible shift to the right comes as the U.S. has turned sharply to the left, raising income taxes on the rich and searching for other means to redistribute wealth. I was introduced to this burgeoning new economic order through a young entrepreneur I’ll call Javier.  Javier did not ask that I not use his real name, but after speaking frankly with me about emerging Cuban business opportunities, Javier worried that he had made dangerous political statements. If he were judged to be subversive, his budding business empire could be shut down in minutes. (MORE: Is it Time to Rethink the Role of Credit Agencies?) Javier is 31 years old. He’s college educated, speaks fluent English, and calls himself “ambitious and restless.” He has taken advantage of the fledgling residential real estate market in Havana, brokering home sales from struggling Cubans to fellow countrymen with money sent from family in the U.S. and abroad. (Foreigners are<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=69595&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Has the Banking Industry Really Been Fixed?</title>
		<link>http://business.time.com/2013/02/05/has-the-banking-industry-really-been-fixed/</link>
		<comments>http://business.time.com/2013/02/05/has-the-banking-industry-really-been-fixed/#comments</comments>
		<pubDate>Tue, 05 Feb 2013 13:00:45 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Companies & Industries]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Finance]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Foreclosures]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Investment Banking]]></category>
		<category><![CDATA[Markets]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Portfolio Strategy]]></category>
		<category><![CDATA[Private Equity]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[Real Estate Markets]]></category>
		<category><![CDATA[Stocks]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=69750</guid>
		<description><![CDATA[The biggest economic puzzle of the past few years is why the recovery has remained so weak. The underlying cause of the 2007-2009 recession was the bursting of the real estate bubble. But it was the banking crisis resulting from the drop in home prices that actually sent the U.S. tumbling into the worst economic downturn since the Great Depression. Continuing problems in the banking industry have been among the chief factors holding back the recovery. The key question now is whether the banks have finally tackled their problems, so that the economy can start to grow more robustly. It certainly seems as though the banking sector should be on the mend. Home prices have turned up after hitting bottom early last year. And other borrowers are in better shape, too. Corporate profits have rebounded powerfully, and consumers have got their household debt under control. So you might think that banks would be in a stronger position to finance economic growth. The reality, however, is more complicated. The losses banks suffered because of falling home prices exposed a host of fundamental problems in the industry. Here’s a look at what needs to be addressed to get the financial system back to full strength: (MORE: Misguided? Half of Adult Children Think Parents Made No Money Mistakes) Regulation. There are two key types of regulation. The first limits the amount of risk a bank can take. Only trouble is, it’s hard for regulators – or anyone else – to monitor the riskiness of bank portfolios. Indeed, the major credit-rating agencies have come under sharp criticism for failing to recognize the risk of some sophisticated investments. The second type of regulation separates aggressive forms of banking from more mundane lending for mortgages, businesses, and consumer finance. That prevents speculative losses from leading to a cutback in credit available for ordinary business activities. A provision known as the Volcker Rule restricts banks from making risky investments with the same capital that they use to make loans to clients. But the rule does not require the nearly complete separation<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=69750&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Banking</primary_category><primary_category_link>http://business.time.com/category/banking-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/02/rtxdamt.jpg?w=240</featured_image>
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			<media:title type="html">Traders stand outside the New York Stock Exchange on March 27, 2009.</media:title>
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			<media:title type="html">michaelsivy</media:title>
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		<title>How a Century of Income Taxes Can Clarify Today&#8217;s Debates</title>
		<link>http://business.time.com/2013/02/01/how-a-century-of-income-taxes-can-clarify-todays-debates/</link>
		<comments>http://business.time.com/2013/02/01/how-a-century-of-income-taxes-can-clarify-todays-debates/#comments</comments>
		<pubDate>Fri, 01 Feb 2013 13:00:53 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Tax Policy]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=69429</guid>
		<description><![CDATA[It’s hard for any American nowadays to imagine living in a country with no income tax. But up until 100 years ago – exactly 100 years ago this weekend, in fact – it wasn’t constitutional for the Federal Government to tax individual incomes. Indirect taxes, such as tariffs on imports and sales taxes on specific kinds of goods, were allowed by the Constitution as long as they were uniform throughout the country. But direct taxes had to be apportioned among the various states in proportion to population, which is impractical with income taxes. Once Delaware ratified the 16th Amendment on Feb. 3, 1913, however, those restrictions were eliminated and the income tax we know today came into existence. This tax has gone through all sorts of twists and turns over the past century. And a look back at these changes can actually throw light on the policy debates taking place today. Here are some notable facts about the first hundred years of the income tax, which now seems as American as apple pie: The income tax has always been hated – but so were the taxes it replaced. In Colonial America and the early U.S., taxes were typically on goods like sugar, tea, or whiskey (which triggered the Whiskey Rebellion in 1791). Other taxes were on land or were poll taxes (which was a flat amount per person and had nothing to do with voting). Later on, there were high custom duties on imports, which were one of the chief causes of the Civil War because they pushed up the prices of manufactured goods, helping the North but hurting the agrarian South. Real estate taxes were always extremely unpopular and still are. (MORE: How Spending More on Academics Can Actually Hurt College Enrollment) Raising taxes on the rich has been the strategy from the beginning. Income taxes were imposed twice before the 16th Amendment. The first time was to help pay for the Civil War. That tax began at 3% for incomes over $600 ($13,636 in today’s dollars) and 5% for incomes<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=69429&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Taxes</primary_category><primary_category_link>http://business.time.com/category/economy-policy/taxes-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/600_biz_tax_10151.jpg?w=240</featured_image>
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			<media:title type="html">Who Should Pay More in Tax</media:title>
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		<media:content url="http://2.gravatar.com/avatar/b8875a12f713f52ecc28fe72efed7fd4?s=96&#38;d=http%3A%2F%2F2.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaelsivy</media:title>
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		<title>Cash Leaking Out of 401(k) Plans at Alarming Rate</title>
		<link>http://business.time.com/2013/01/23/cash-leaking-out-of-401k-plans-at-alarming-rate/</link>
		<comments>http://business.time.com/2013/01/23/cash-leaking-out-of-401k-plans-at-alarming-rate/#comments</comments>
		<pubDate>Wed, 23 Jan 2013 13:00:35 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=67105</guid>
		<description><![CDATA[The persistent problem of savers pulling money from their 401(k) plan has grown worse since the financial crisis, heightening concerns about the effectiveness of these plans as a retirement tool. One in four American workers with a 401(k) or other defined contribution plan tap their retirement account for current expenses, a new study shows. This “leakage” reached $70 billion in 2010, equal to nearly a quarter of all contributions that year. (MORE: Young Workers with a 401(k) Finally Get Diversified) Looking only at workers’ contributions (excluding employer matching funds), individuals are spending 40% of the money they put away for retirement, reports online financial firm HelloWallet. Among other findings: Penalized 401(k) withdrawals increased from $36 billion to almost $60 billion from 2004 to 2010. Workers in their 40s are most likely to breach their savings for nonretirement needs. 75% of those who cash-out their entire balance do so because of basic money-management problems. (MORE: How to Dump Your Fee-Filled 401(k)) Money leaks out of 401(k) plans before retirement in three basic ways: hardship withdrawals, loans that do not get repaid and cash-outs when workers switch jobs. All these have the effect of greatly reducing workers’ retirement security. Thirty years ago, most workers had a guaranteed pension at retirement; today, the $3.5 trillion in self-directed 401(k) and other defined-contribution plans is the primary retirement account of most Americans. The issue is so concerning that experts are looking for reasonable alternatives to 401(k) plans. Some believe funds borrowed from a 401(k) should be insured. Workers who borrow from their plan and then lose their job must repay the loan. If they cannot, the loan is in default and treated as a distribution. This not only opens the worker to penalties, it permanently reduces their retirement account. Insurance would guarantee that a laid-off worker with such a loan would not lose their nest egg. Fidelity found in 2010 that a record 22% of 401(k)-plan participants had a loan outstanding and that the default rate on those loans was skyrocketing. Defaults on 401(k) loans account<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=67105&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/01/biz-401k-0123.jpg?w=240</featured_image>
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			<media:title type="html">Dollar Bill</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/d69b05e696e822e7e41ae630be72226a?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">dankadlec</media:title>
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		<title>6 Reasons the Stock Market Could Do Surprisingly Well in 2013</title>
		<link>http://business.time.com/2013/01/22/6-reasons-the-stock-market-could-do-surprisingly-well-in-2013/</link>
		<comments>http://business.time.com/2013/01/22/6-reasons-the-stock-market-could-do-surprisingly-well-in-2013/#comments</comments>
		<pubDate>Tue, 22 Jan 2013 14:00:37 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Austerity]]></category>
		<category><![CDATA[Bonds]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=67363</guid>
		<description><![CDATA[The S&#38;P 500 hit a five-year high last week, and now some experts are saying that stocks are overpriced and that the overall market is vulnerable to a 20% drop this year. There are certainly plenty of things to worry about, from a lousy economy and political gridlock in Washington to the possibility of a financial crisis in the euro zone. But there’s an equally compelling case that stocks could do quite well in 2013. Indeed, it wouldn’t be hard for the Dow to sail through its all-time high of 14,164 and go on to top 15,000 before the year is out – a gain of 10% or more from current levels. There’s no denying the economy’s current problems. Since the recession ended more than three years ago, growth has been consistently disappointing for a recovery. Moreover, the economy has actually been slowing down recently – from a 3.1% annualized growth rate in last year’s third quarter to less than 1.5% in the fourth quarter. In addition, analysts project that the fiscal cliff deal, combined with attempts to cut the deficit, will knock as much as a full percentage point off GDP growth in 2013. In short, this year’s economy figures to be just as sluggish as last year’s – and maybe worse. But the pessimists’ case for a bear market is based on more than a limping U.S. economy. They think the bull market – up more than 100% over the past three-and-a-half years – has run its course. They expect a global slowdown that will cause 2013 corporate profits to fall short of expectations. Finally, they think the Federal Reserve’s extreme easy-money policies will either lead to inflation, or that the Fed will have to raise interest rates. Either way, it would send the prices of Treasury bonds into a tailspin and unsettle the stock market as well. Whew! That’s a lot to worry about. But today’s bearish commentators are making one crucial incorrect assumption – that share prices move in lockstep with the economy. It’s true that over the long term, share prices follow<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=67363&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Markets</primary_category><primary_category_link>http://business.time.com/category/wall-street-markets/investing-wall-street-markets/markets/</primary_category_link>
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		<title>What the Current Economic Outlook Means for American Families</title>
		<link>http://business.time.com/2013/01/16/what-the-current-economic-outlook-means-for-american-families/</link>
		<comments>http://business.time.com/2013/01/16/what-the-current-economic-outlook-means-for-american-families/#comments</comments>
		<pubDate>Wed, 16 Jan 2013 13:00:01 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
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		<guid isPermaLink="false">http://business.time.com/?p=66788</guid>
		<description><![CDATA[Now that the fiscal cliff fight is over and the debt ceiling debate hasn&#8217;t reached a fever pitch &#8212; not yet, anyway &#8212; it seems like a good time to take a step back, assess the economic outlook, and see what it means for American families. The good news is that the U.S. has enjoyed more than three years of uninterrupted economic growth and falling unemployment since the recession ended. The bad news is that this has been the weakest rebound since World War II. Economic growth has averaged less than 2.25% since the recovery began and is estimated to have slowed to less than 1% in the most recent quarter. Unemployment is still way above where it should be at this point. Budget problems remain the chief impediment to faster growth. The fiscal cliff deal did little to reduce the annual deficit, almost $1.1 trillion last year. Not all of that amount needs to be eliminated, though. Part of the current deficit is simply the normal result of a weak economy. Moreover, if the economy were growing at its historical average rate of 3.25% a year, the U.S. could afford to run a deficit of half a trillion dollars or so. Even so, the deficit still needs to be reduced by something like $300 billion a year. That means further spending cuts and tax hikes that will be a drag on the economy. Consensus estimates are for slightly slower growth this year – an estimated 1.8%, down from 2.2% in 2012. The most optimistic economists foresee a small improvement in growth this year, followed by 3% or more in 2014. While that would get the economy back to its long-term average growth rate, it would remain far short of the powerful rebound that normally follows a recession. (MORE: The Changing Business of Drugstores) To see what this outlook is likely to mean for typical American families, it helps to take a closer look at these factors: Unemployment. For the past three years, unemployment has been coming down slowly but steadily. The most recent report calculated that 155,000 jobs<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=66788&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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