H-1B Visas Hit the Cap, Sending Companies to Plan B

H-1B Visas Hit the Cap, Sending Companies to Plan B
Bloomberg, 13-June-12
By Elizabeth Dwoskin

For Silicon Valley, a day of ritual disappointment came on June 12: The U.S. announced that the slots for 2013 H-1B visas had all been filled.

On the first business day in April, U.S. Citizenship and Immigration Services opens the rounds of petitioning for these coveted visas for highly skilled foreign workers. The agency awards the 85,000 visas on a first-come, first-served basis and companies scramble to get in their applications for foreign hires as quickly as they can. (Human resources managers, knowing the cap was close to being filled, worked through the weekend, racing to file.) The cap has been the same since 2004, with 65,000 slots for foreign hires and 20,000 spaces reserved for graduates of U.S. universities.

The speed at which the cap is reached is a loose indicator of the economy’s state. In 2007, slots filled up on May 26 (July 26 for university grads). In 2008, the cap was reached in a single day: April 2. In 2009, applications were sluggish and took eight months to reach the cap. In 2011, the slots were filled in seven months.

It now appears that things are picking up again—a good sign for the economy.

So if you miss the H-1B cap, what’s a company to do? Firms often begin a game of “musical chairs” with the U.S. visa system, says Neil Ruiz, who studies labor migration as an associate fellow at the Brookings Institution. (Brookings has a cool chart that tracks the cap). Companies may station hires in an overseas office for a year, at which point they could apply for another kind of visa: the L-1B for “key personnel” with “specialized” and proprietary knowledge of a company’s procedures and products. Unlike the H-1B, the L-1B isn’t subject to a requirement that companies pay a competitive wage. Companies can bring over personnel on a temporary business training visa for 90 days, and then keep trying to renew it. That process is cumbersome and makes it tricky for businesses to plan.

The number of H-1B slots depends on Congress’s mood toward foreign workers. Lawmakers frequently propose legislation to change the system for foreign hires with special skills. Bills have been put forth to subject the L-1 internal company transfers to the H-1B’s prevailing wage requirement. In the current Congress, Senator John Cornyn (R-Tex.) has offered a bill that would raise the ceiling on university graduates in math, science, and engineering to 55,000. Senators Mark Warner (D-Va.), Chris Coons (D-Del.), Jerry Moran (R-Kan.), and Marco Rubio (R-Fla.) would create an “Entrepreneur Visa” to allow foreigners who start new businesses and create jobs to remain in the U.S.

Since Congress created the H-1B in 1965 and the L-1 for specialized skills and managers five years later, opponents have argued that American workers would be displaced. There’s evidence on both sides: A 2009 report from New York University’s Stern School of Business and the University of Pennsylvania’s Wharton school found that despite the prevailing wage requirement, H-1Bs depress wages in the tech sector by 6 percent. But a Public Policy Institute of California study reached the opposite conclusion: When you take raises into account, H-1B workers ultimately get paid more than their American counterparts. The debate remains a lively one.

Three Chinese Firms in Bid to Build New Pokhara Airport

Three Chinese Firms in Bid to Build New Pokhara Airport
TKP, 4-May-12

The Civil Aviation Authority of Nepal (CAAN) received only three confirmed bids to develop the much-talked about regional international airport at Chinnedanda, Pokhara as the tender deadline ended Friday afternoon.

Out of the 10 Chinese firms that obtained bid documents, three, China CAMC Engineering Co, Sinohydro Corporation and China International Water and Electric Corporation, have returned them to CAAN. According to CAAN, all the three bidders are listed by the China International Contractors Association, an international project contracting company approved by the Ministry of Commerce of China.

According to CAAN, the tender documents will be processed after it holds its board meeting. However, that may take some time as the Minister of Tourism and Civil Aviation is the board’s chairperson and a new minister is yet to be appointed.

“After the board meeting, the technical and financial aspects of the contractors will be evaluated to select the finalist,” said CAAN’s Deputy Director General Suman Shrestha.

The lowest bidder will be awarded the contract after assessing the bid documents. Under technical eligibility, the bidder should have at least 10 years’ experience in infrastructure projects and shall have completed at least one airport project including communication and navigational aids equipment with installation outside or within China and a project cost of at least US$ 120 million. Similarly, under financial eligibility, the bidder should have liquid assets or availability of credit facilities of not less than US$ 20 million. Shrestha said that CAAN would select the lowest bidder and recommend the firm to its line ministry. The ministry will forward the selected firm’s name to the Finance Ministry which will then start loan negotiations with the Export-Import Bank of China (Exim Bank). The government plans to develop the airport with a soft loan of around US$ 145 million from Exim bank. 

In 1975, the government acquired more than 3,106 ropanis of land to build the planned airport. The government and the Japan International Cooperation Agency conduct a detailed study in 1989.

The study had proposed a 2,500 m long and 50 m wide runway, a terminal and a cargo building.

Construction of the airport, which was expected to be completed in four years, was estimated to cost of US$ 39.6 million at the time. A new study has estimated that the project will now cost more than US$ 180 million.

CAAN invited bids for execution of the project under the engineering procurement and construction (EPC) model on Feb 9 and extended the deadline twice.

The EPC plan allows participation of Chinese companies or joint ventures between Chinese and Nepali companies with the Chinese partner holding more than 50 percent of the shares.

St Xavier’s School to Mark Diamond Jubilee

St Xavier’s School to Mark Diamond Jubilee
TKP, 29-Apr-2012

St Xavier’s School, one of the premier schools in Nepal and run by the Nepal Jesuit Society (NJS) is celebrating its diamond jubilee on May 6 on the school premises in Jawalakhel, Lalitpur.

The school was established on July 5, 1951 by Father Marshall D Moran on the request of the government of Nepal.

The school, which first started at Godavari in Lalitpur with 65 students is now among the most reputed academic institutions with hundreds of students from pre-primary to the college level studying there.

Father Boniface Tigga, the regional superior of the Jesuits in Nepal, told a press conference at the school in Jawalakhel, that around 3,000 students are studying in the school level in four schools—two in Jhapa and one each at Godavari and Jawalakhel—while around 3,500 are pursuing higher education at St Xavier’s College at Maitighar.

Apart from the schools, the NJS also operates a Child Care Centre for the mentally challenged children in Pokhara and Jawalakhel, a drug abuse rehabilitation centre, Freedom Centre, at Nakkhipot in Lalitpur and the Human Development Research Centre at Sanepa.

“We are looking forward to opening two more schools—one at Sadakbari in Jhapa and the other at Hemja in Kaski, targeting children from the deprived community,” Father Amrit Rai, the Principal of St Xavier’s Jawalakhel, said.

Jimmy Kimmel at the 2012 White House Correspondents' Dinner

Credit Suisse Could Cut 5,000 jobs

Credit Suisse Could Cut 5,000 jobs
Reuters, 15-Apr-2012

The last time it happenend in 2008, it was not a good news for me.

Swiss bank Credit Suisse (VTX:CSGN.VX - News) could announce the loss of up to 5,000 jobs in its investment banking business at its forthcoming first-quarter results, a Swiss newspaper reported on Sunday.

Citing an estimate from a member of senior management, the Sonntag newspaper said the bank could cut around 5,000 positions. The investment bank is "simply completely oversized", the person was quoted as saying.

The bank is due to report first-quarter results on April 25.

Credit Suisse ended 2011 with 20,900 investment bankers, 200 more than at the beginning of the year. Staff count at the whole bank was largely stable even after two rounds of cuts eliminated 7 percent of the bank's overall workforce, or 3,500 jobs.

The Zurich-based bank has faced increased shareholder criticism about the size and the cost of its investment bank, raising pressure on Chief Executive Brady Dougan for cutbacks.

A spokeswoman for the bank did not want to comment or confirm the report.

Timeshare Prices Plummet to $1

Timeshare Prices Plummet to $
WSJ, 4-Apr-12
By AnnaMaria Andriotis

Unable to sell his parents’ ocean-front timeshare for the past year, David Suder became so fed up he offered to give it away. They paid $8,000 for the Orange County, Calif. unit a decade ago, but since there are no willing buyers, and his 81-year-old mother, now a widow, can no longer afford the monthly maintenance fees, Suder says he doesn’t have a choice. The San Diego-based real estate investor is offering the unit for free in the hopes that someone will take it before his mother dies. “I don’t want to inherit it,” he says. “I want it to go away.”

While real estate – and even vacation real estate – is starting to show signs of recovery, timeshares remain in freefall. During the first quarter, the number of for-sale-by-owner postings doubled compared to the same period a year ago on RedWeek.com, a popular resale site. Another site, SellMyTimeshareNow.com, says owner sales are up 20% during that period.

Experts say even in better times, most sellers never saw a return on their investment. “Very few timeshares increase in value,” says Alisa Stephens, executive producer at RedWeek.com. As values sink and desperation grows, the number of owners giving their timeshares away for $1 – or less — has doubled in the past year, says Brian Rogers, of Timeshare Users Group, an owner advocacy group. “There’s never been a worst time to try to sell a timeshare,” he says.

Typically found in resorts, timeshares allow multiple buyers to purchase rights to use a property, like a hotel room, suite or condominium, for one to two weeks per year over a long period of time. They appealed to buyers who believed the timeshare’s purchase price was lower than the total amount they’d spend for hotel stays on future trips. Timeshare owners could also invite family and friends to stay with them for free.

Those perks never materialized for many timeshare owners who had to cut back on travel since the recession. Others couldn’t afford their timeshares after losing their jobs. Up to 48% of timeshare owners are behind on their annual maintenance payments by at least a year – up from 37% in 2007, according to TimeshareResortCollections.com, which helps resorts to recoup past due payments. The company covers about 80% of the timeshare industry.

To make up for these losses, resorts have been increasing the maintenance fees on the individuals who continue to use their timeshares. Average annual maintenance costs hit an all-time high of $731 in 2010, up more than 8% from the year prior, according to the latest data from the American Resort Development Association. Experts say those costs are still rising. And for some owners, they’re a big reason to sell, says Lisa Ann Schreier, director of Timeshare Insights, a consultant to timeshare buyers and sellers.

Faced with rising medical bills, John Chase, 62, and his wife decided to sell their timeshare at a megaresort in Orlando. After the listing lingered on the market for two and a half years, the couple chose to give it away just so they could avoid the maintenance fees. Though they bought it for $4,000 in the late ‘90s, they ended up selling it for just $1. Chase says he never expected to sell so low, especially since the sales pitch he received when he purchased the timeshare led him to believe its price might increase.

For their part, resorts are changing their approach to timeshares. Howard Nusbaum, president and CEO of ARDA, says consumers should buy timeshares to use them – not as an investment. Resort developers, he says, are now marketing timeshares to a smaller group of high-income consumers who are more likely to be able to afford timeshares and who don’t need a loan to purchase them. Sales between resorts and buyers totaled $6.4 billion in 2010, according to the latest data, down 40% from their peak in 2007, according to ARDA. Experts say 2011 data isn’t expected to be much better.

The data is in stark contrast to vacation homes, where demand is rising. Roughly half a million vacation homes sold in 2011, up 7% from 2010, according to data released last week by the National Association of Realtors.

To be sure, some timeshares are retaining values better than others. Owners with timeshares at brand-name resorts are likely to recoup the most, especially if those locations are in areas where real estate supply is limited, like Key West or Myrtle Beach, says Jason Tremblay, CEO of SellMyTimeshareNow.com.

Before selling at a huge loss, timeshare owners might want to consider some alternatives. Stephens suggests renting the timeshare to vacationers at a price that covers the annual maintenance fee but is cheaper than what travelers would pay to stay at a hotel. Or consider asking the resort if it will buy the timeshare back; the price it might offer won’t be near what the owner paid the developer originally but could be higher than what other buyers are offering.

Other sellers say they’ll hold out until a buyer comes along. Joe Cantu and his wife paid $15,000 for a two-bedroom suite at a high-end resort in Las Vegas seven years ago. They recently welcomed a new baby, and they’ve been trying to sell the timeshare. His asking price is $3,500, but despite the resort’s amenities, which include a putting green, sand-bottom pool and in-room massage services, he hasn’t received offers close to that in the eight months it’s been on the market. “I’ll just keep it posted as long as I need to,” he says.

What You Can Learn From Mitt's Tax Return

What You Can Learn From Mitt's Tax Return
28-Jan-2011, WSJ
By LAURA SAUNDERS

[Full Tax Filings Here]

How did they do it?

That is the question many Americans are asking of Mitt and Ann Romney's 2010 tax bill, disclosed on Monday evening. While the couple paid almost $3 million in taxes, that amounted to less than 14% of their $21.6 million income.

The Romneys' rate was far lower than the average of 24% paid by the top 1% of U.S. earners, according to the nonpartisan Tax Policy Center.

The couple's 2010 filing presents a rare glimpse into how the ultrawealthy can use the tax code to their benefit, and offers important lessons for others.

The biggest: the powerful tax benefits of capital gains, which are taxed at a top rate of just 15% if the underlying investment is held for more than a year.

"There's a saying in Texas: If you don't have an oil well, get one," says Janet Hagy , a certified public accountant practicing in Austin, Texas. "I tell my clients, 'If you don't have capital gains, get some.'"

Another lesson: Get good tax help. The Romneys' 1040 return is 203 pages long, with different "schedules" and 20 different forms attached, some of them multiple times—not the sort of work typically done by a neighborhood Joe.

Says David Kautter of the Kogod Tax Center at American University in Washington: "The only schedules missing [from the Romneys' return] are the ones for fishermen, farmers and the elderly. Maybe Mitt should get some cows so he can have a 'full house' of schedules."

Some have suggested that, despite their low tax rate, the Romneys might have paid a few thousand extra dollars in tax. Among other things, they take no mortgage-interest deduction—a write-off claimed by 80% of taxpayers who itemize—or deductions for a home office, a car or travel expenses.

But given the complexity of their filings and the public scrutiny they were sure to endure, overpayments were far preferable to underpayments, experts say. The Romneys must file several separate returns for the "blind" trusts the couple set up to manage their investments, any of which could present snags. (The wealthy often do this when they are running for office, in order to avoid the appearance of conflicts of interest.)

Experts who have parsed the returns say the Romneys' advisers have been tax-smart without crossing legal lines. "The trustee has clearly gotten good advice and managed to reduce the Romneys' taxes in many perfectly legal ways," says Tom Ochsenschlager, a former official at the American Institute of CPAs who now teaches at American University.

Former IRS Commissioner Fred T. Goldberg, who examined the filings for the Romney campaign, characterized them differently: "This return reflects a trustee who spent a lot of care and time finding investment opportunities with the potential for substantial appreciation. By their very nature, these investments generate capital gains."

The returns don't disclose everything about the Romneys' finances. The couple isn't required to report their underlying wealth, investment returns or fees as a percentage of invested assets, for example.

But the filings do lift the veil on how the wealthy can use the tax code to their advantage. Here are some lessons the experts have gleaned.

A. Avoid salary, wages and tips to the extent possible. The Romneys reported no such compensation, which is taxable at rates up to 35%. In addition, these types of pay are subject to payroll taxes: a 6.2% Social Security tax (lowered to 4.2% in 2011) and 1.45% in Medicare tax, both of which the employer matches. While the Social Security tax is capped each year at a certain income level ($110,100 for 2012), the Medicare tax isn't.

Some experts believe "carried interest," or profits such as those from investments that Mr. Romney received as a partner at Bain Capital, should be taxed as compensation at rates up to 35%. Currently, those profits usually count as capital gains and are taxed at a top rate of 15%.

B. Muni-bond interest isn't the be-all and end-all. Many wealthy people turn to municipal bonds for tax-free income, but the Romneys reported only $557 of tax-free interest in 2010—and $3.3 million of taxable interest.

Kenneth Brier, an attorney at Brier & Geurden in Needham, Mass., notes that Massachusetts has a flat tax of 5.3%, making munis less attractive there than in high-tax states with graduated rates such as New York or California. And because the Romneys' overall tax rate is so low, the after-tax difference between munis and taxable bonds might not be large enough to justify investing in munis, Mr. Ochsenschlager says.

Some of the taxable interest on the Romney's 2010 return came from U.S. Treasurys; such interest isn't subject to state taxes.

C.Strive for "qualified" dividends. The Romneys' 2010 return reports $3.3 million of qualified dividends, which are taxed at a top rate of 15%. (There is another $1.6 million of nonqualified dividends, taxed like interest income.)

What makes a dividend "qualified"? In general, the dividend must be from a stock held at least two months and paid by any domestic corporation or most foreign corporations. The dividend can't come from a stock that a brokerage firm has lent as part of a short sale, says Robert Willens, an independent tax expert in New York.

D. If you have a "Schedule C" business, think twice before claiming a home-office deduction. The Romneys didn't take one on either of two Schedule C forms, which are for business results reported on personal returns. The Romneys used their Schedule C forms for director's fees and speaking fees.

Not only do home-office deductions raise red flags at the IRS, but they can come back to haunt taxpayers when the home is sold: Part of the gain on the home's sale may not be eligible for the $250,000 or $500,000 tax exclusion because taxpayers who took depreciation deductions in prior years have to reduce the exclusion by that amount.

In addition to raising taxes in many cases, this poses a record-keeping problem, Mr. Ochsenschlager says.

E. Generate income from long-term capital gains. The biggest factor in the Romneys' super-low tax rate is their outsize income from capital gains: $12.6 million in 2010. Most of that consisted of long-term gains, which, like qualified dividends, are taxed at a top rate of 15%.

The benefits don't end there. While the tax code gives wage earners almost no flexibility as to timing, the capital-gains rules offer unparalleled flexibility. Investors can often time when they take a gain or loss, and losses may be used to offset gains so that no tax is due. There are few restrictions: For example, a loss on land held as an investment can offset the gain from a stock.

Net capital losses can shelter up to $3,000 a year of ordinary income from tax, and losses can be carried forward indefinitely to shelter future gains. Canny investors or their advisers often "harvest" losses during market downturns, reacquire the investment after 30 days and use those losses to offset future gains, Mr. Willens says.

On Schedule D of their 2010 return, the Romneys' original long-term capital gain of $16.8 million was reduced by $4.8 million of carried-over long-term capital losses.

F. Know the score on itemized deductions. One way the Romneys resemble many other taxpayers is that they didn't get a medical-expenses deduction. Only expenses above 7.5% of adjusted gross income are deductible; for the Romneys, that hurdle amounted to $1.6 million, while they reported medical expenses of just $14,176.

The Romneys did make tax-wise charitable contributions. They gave away nearly $3 million, almost 14% of their adjusted gross income, about half in cash and half in other forms.

All of their contributions were fully deductible, whereas the biggest givers are subject to limits. Billionaire Warren Buffett, for example, gives away such vast sums each year that much of it can't be deducted from his income tax (though the gifts will be out of his estate).

Making noncash gifts—such as appreciated stock or other assets—often is a smart move for people like the Romneys because they can skip paying capital-gains tax on any appreciation, while getting a full deduction.

For example, say a higher-bracket taxpayer has 100 shares of stock bought years ago for $30 a share that is worth $80 when he donates it. If he sold the stock, paid tax and gave the remaining cash to charity, it would receive $7,250 and he would have a deduction of the same amount. If he gives the stock directly to the charity, it would receive $8,000, and he could deduct the full $8,000. (Some restrictions apply.)

G. Capital gains and dividends can help trigger the AMT. Long-term capital gains and qualified dividends are taxed at 15% and aren't subject to the alternative minimum tax.

The AMT takes away the value of deductions, such as the one for state taxes, when taxpayers are deemed to have too many write-offs. But a large percentage of capital gains and dividends in a taxpayer's overall income mix can cause a taxpayer to owe AMT.

The reason: With capital gains and dividends off limits, deductions loom large relative to other income, and that triggers AMT. The Romneys paid $232,989 in AMT in 2010 and lost the value of their state tax and other deductions, according to Jay Starkman, a CPA in Atlanta. "Without that, their tax rate would have been even lower," he says.

H. Beware of small benefits requiring large tax-prep efforts. The oddest line on the Romneys' 2010 return is a tax credit for $1 of "General Business Credit." Don Williamson of American University's Kogod Tax Center says the credit could be for hiring a disadvantaged youth or qualified veteran and it flowed through from an investment partnership.

But likely it cost far more than $1 just to fill out the three-page Form 8300 for the return. Mr. Williamson says he sees this problem all the time. Often tax-prep fees are disproportionate to an investment's tax benefit or the income it produces, he says—especially with larger investment partnerships.

One other lesson: For the wealthy, offshore investments can save onshore taxes. Robert Gordon, head of Twenty-First Securities in New York, a firm specializing in tax strategies, points out that the Romneys' 2010 return has 17 different filings of IRS Form 8621. Each indicates an investment, perhaps a hedge or private-equity fund, held in an offshore corporation.

These are legal arrangements, Mr. Gordon stresses. They can have significant tax advantages for the wealthy who live in high-tax states—especially Massachusetts, because its flat tax allows no deductions.

Investments held offshore in what is known as a "blocker corporation" can allow U.S. taxpayers to pay less tax than if the same investment were made through an onshore entity, Mr. Gordon says.

He offers an example. Say a partnership based in the U.S. invests $100, $80 of which is borrowed. It earns $5 of profits and has $4 in interest expense, for $1 of net pretax profit. In Massachusetts there isn't an interest deduction, so the entire $5 would be taxable.

If the investment were held in a fund based in the Cayman Islands, however, only $1 would be taxable in Massachusetts. Federal deductions subject to limits would also be preserved, Mr. Gordon says.

Trulia CEO: Housing 2012

Credit Score Zealots Pursue Fool’s Errand for Numbers Over 800

Credit Score Zealots Pursue Fool’s Errand for Numbers Over 800
Bloomberg, 13-Jan-12
By Alexis Leondis

Jeff Rose, a 33-year-old financial planner, is trying to improve his credit score even though it’s 780, which is 69 points above the median score.

Rose, who lives in Carbondale, Illinois, said he opened up a second credit card last year to establish another line of credit and help boost his score. He said he doesn’t know exactly what actions will help or hurt his score, so wants to get it above 800 to ensure he gets the best rate if he refinances his mortgage.

Three years after the credit crisis when lenders abruptly closed accounts and cut limits, consumers, including those who have excellent scores, have become more focused on getting the number above 800. Those efforts may be futile because once consumers have FICO credit scores of 760, a higher one doesn’t mean they’ll get better interest rates on mortgages and credit cards or more elite card offers, said Greg McBride, senior financial analyst at Bankrate.com, a unit of Bankrate Inc.

“There’s very little incremental benefit to getting a score above that,” said McBride, who’s based in North Palm Beach, Florida. Once consumers are above 760, “it’s a lot more difficult to move the score up in any noticeable way, and little reward.”

Mayank Maheshwari, 26, a business analyst who lives in Jersey City, New Jersey, said his FICO (FICO) score is 780 and he’s still trying to get it higher. He has a student loan that he hasn’t paid off in full, although he can afford to, because he thinks maintaining monthly payments on time will help increase his score.

FICO Scores
The most common scores are based on models established by Minneapolis-based FICO, formerly known as Fair Isaac Corp., which are used to gauge a consumer’s financial health. The numbers, which range from 300 to 850, affect the ability to get mortgages and credit cards, as well as the rates borrowers pay for them. The score is used by 90 of the 100 largest U.S. financial institutions, according to FICO’s website. There are other scores used by lenders, such as VantageScore, which has a 501 to 990 range for measuring credit risk.

About 18 percent of 200 million consumers in the U.S. with credit scores, or 36 million Americans, had credit scores of 800 or higher in 2011, according to estimates from FICO. More than 75 million had scores of at least 750 while the median credit score last year was about 711, FICO said.

‘Bragging Rights’
The percentage of consumers with scores of 750 or more has fluctuated only slightly during the past five years, said Barry Paperno, consumer affairs manager for myFICO.com. That’s because consumers with high credit scores tended to maintain their good behaviors during the credit crisis, such as paying down debt and cutting expenses, Paperno said.

The score that’s considered the cutoff to qualify for the best rates, however, has changed. Before the recession, it was generally 720 instead of at least 750, said Ben Woolsey, director of marketing and consumer research at CreditCards.com, a website for cardholders based in Austin, Texas.

FICO credit scores rank borrowers according to the likelihood of default and there’s almost no difference in the probability of default when a consumer has a 780 or an 820, said Ken Lin, chief executive officer and founder of San Francisco- based Credit Karma. That means lenders won’t price a consumer differently and extend different rates, since the risk is virtually the same, Lin said.

“If you’re at 780 plus, it’s all bragging rights from there,” Lin said.

Credit Decisions
The average rate for a 30-year fixed mortgage was 3.89 percent in the week ended Jan. 12, according to Freddie Mac. The average interest rate charged on credit-card balances was 12.8 percent in November, according to Federal Reserve figures released Jan. 9.

A FICO score of 760 or higher on a $300,000 30-year fixed mortgage may qualify a borrower for a 3.62 rate or $1,368 monthly payment, compared with a 3.85 percent rate and monthly payment of $1,406 for those with scores from 700 to 759, according to myFICO.com. Having a credit score of at least 720 means a consumer may get a 3.89 rate on a 36-month auto loan of $25,000 and pay $737 a month, compared with 5.31 percent and a payment of $753 for those with scores from 690 to 719.

The decision to offer a mortgage and the size and rate on that loan is based on many factors about a borrower’s financial history, Tom Kelly, a spokesman for JPMorgan Chase & Co., the largest U.S. bank by assets, said in an e-mail. JPMorgan’s risk management approach is proprietary, and criteria that go into the decisions on credit cards may be based on income and credit history with other Chase products, said Paul Hartwick, a spokesman for the New York-based bank, also in an e-mail.

Elite Offers
While the type of mortgage product and region may impact rates, generally FICO scores above 720 receive the lowest rates, Terry Francisco, a spokesman for Bank of America Corp. in Charlotte, North Carolina, said in an e-mail. A FICO score is one of several considerations the bank uses in determining credit-card rates, Betty Riess, a spokeswoman for Bank of America, which is the second-biggest U.S. lender, said in an e- mail.

Elite card offers are more likely to be based on income and assets than solely on high credit scores, Bankrate’s McBride said. When making credit decisions, American Express Co. (AXP) looks at a cardmember’s credit profile, which includes total debt level, reported income, credit bureau score, credit report and payment history, Melanie Backs, a spokeswoman for the New York- based firm, the biggest credit-card issuer by purchases, said in an e-mail.

Hiccups Happen
Revolving debt, which includes credit cards, climbed in November by $5.6 billion, the biggest advance since March 2008, according to Federal Reserve data.

“There are a lot of companies out there competing for credit,” said Linda Sherry, director of national priorities for Consumer Action in Washington. “Once you’re there, your dance card is going to be full,” she said, referring to a score of about 770.

The benefit for consumers who have good scores and are still trying to raise them is that they’ll have more of a cushion in case they do something that negatively affects their scores, said Woolsey of CreditCards.com. Borrowers should also keep in mind that each lender may vary on what they use as a cutoff for qualifying for the best rates, although anything above 750 generally should be sufficient, he said.

“Some hiccups could happen and I get whacked and I’m a 720, so you shouldn’t be too comfortable because you never know what might happen,” said Rose, the CEO and founder of Alliance Wealth Management.

Timely Payments
Consumers with scores from 750 to 800 who want higher numbers should continue what they’re doing, just for a longer period of time, said FICO’s Paperno. That means continuing to pay bills on time, keeping a low amount of debt relative to available credit and not opening accounts unless needed, he said.

Making a payment 30 or more days after the due date could cut a score by as much as 110 points while applying for a new card may result in a five point drop, said Liz Weston, author of “Your Credit Score.”

Borrowers should avoid using more than 30 percent of their available credit, even if they pay their balances in full, because the balance owed may be reported to the credit bureaus before the payment is due, according to McBride.

Credit Monitoring
Some things consumers do to try to raise their scores, such as paying for a credit score monitoring service, aren’t worth it, said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group in Washington. Monitoring doesn’t prevent errors or identity theft and consumers may not understand the cost of the service, Mierzwinski said.

Instead, borrowers may want to just stagger looking at each one of the free credit reports they’re entitled to annually from the three major credit bureaus every four months, he said.

“Credit is there to save you money,” said Lin of Credit Karma, referring to how a high credit score can help consumers qualify for lower interest rates. “You shouldn’t be using money to build credit.”

Other Links
What’s in your FICO® score? [Link Here]

Weekhawken Real Estate Market Trend

Weekhawken Real Estate Market Trend
Trulia.com
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The median sales price for homes in ZIP code 07086 for Sep 11 to Nov 11 was $500,000. This represents a decline of 13%, or $75,000, compared to the prior quarter and an increase of 4.6% compared to the prior year. Sales prices have appreciated 3.6% over the last 5 years in 07086, Weehawken. The median sales price of $500,000 for 07086 is 0.00% higher than the median sales price for Weehawken NJ. Average listing price for homes on Trulia in ZIP code 07086 was $976,230 for the week ending Dec 28, which represents a decline of 3.9%, or $39,196 compared to the prior week and an increase of 6.1%, or $56,066, compared to the week ending Dec 07. Average price per square foot for homes in 07086 was $480 in the most recent quarter, which is 0.00% higher than the average price per square foot for homes in Weehawken.

Median Sals Price is the price at which one half of the homes sold above that amount and one half of the homes sold below that amount. Median Sales Price is based on sales during the most recent 90-day period available and is updated each week to include recent transactions from public record data sources.

Number of Sales is a count of all known arms-length residential property sales over the prior 90-day period. Volume for All Bedrooms may be higher than the total volume for 1-4 Bedrooms. All Bedrooms includes not only 1-4 Bedrooms but also 5+ Bedrooms and records where the number of bedrooms is unknown.

07086, Weehawken Recently Sold Homes

07086, Weehawken Recently Sold Homes

Best Buy Gaining 59% as Cash-Rich Retailer Invites LBO: Real M&A

Best Buy Gaining 59% as Cash-Rich Retailer Invites LBO: Real M&ABloomberg, 5-Jan-12
By Tara Lachapelle
[Full Link]
For private equity buyers looking for a retailer that throws off the most cash, there’s no bigger bargain than Best Buy (BBY) Co.

After losing almost a third of its market value in 2011, the world’s largest seller of consumer electronics was valued at just 3.6 times its free cash flow (BBY), the cheapest of any retailer worth more than $1 billion, according to data compiled by Bloomberg. Best Buy, one of the five worst-performing (S5RETL) retail stocks in the Standard & Poor’s 500 Index last year, also reached its cheapest valuation relative to earnings.

While same-store sales have fallen in five of the past six quarters as demand for televisions slumped and competition from Amazon.com Inc. (AMZN) and Wal-Mart Stores Inc. intensified, Best Buy can still enrich leveraged buyout firms after generating $2.44 billion in free cash in the past year, Telsey Advisory Group and Morningstar Inc. said. The $8.21 billion company could get at least $37 a share in a takeover, according to Thornburg Investment Management, 59 percent more than its price yesterday.

“Now would be the time, if I were private equity, to be dusting this off,” Joe Feldman, a New York-based analyst at Telsey, said in a telephone interview. “They generate a ton of free cash. From a valuation standpoint, it does look like an attractive candidate for a takeout.”

Susan Busch, a spokeswoman for Richfield, Minnesota-based Best Buy, declined to comment on the decrease in its value or whether the company has been approached about a sale.

Today, Best Buy climbed 0.9 percent to $23.44 in New York.

Relative ValueLast year, Best Buy fell 32 percent, more than all but three retailers in the S&P 500, the benchmark gauge of American common equity, according to data compiled by Bloomberg. On average, U.S. retail stocks (S5RETL) rose 2.9 percent in 2011.

With Best Buy ending at $23.23 yesterday, it traded at about 3.6 times its cash from operations (BBY) after deducting capital expenses of $6.46 a share, the data show. That’s less than a quarter of the industry’s median of 17.6 times.

The retailer was also valued (BBY) at 2.8 times earnings before interest, taxes, depreciation and amortization in the past 12 months, the lowest level since at least 1990, according to data compiled by Bloomberg.

“By any valuation approach you want to use, it looks inexpensive,” Matt Arnold, an analyst for St. Louis-based Edward Jones & Co., said in a telephone interview.

Best Buy, which sells everything from mobile phones to TVs and dartboards at its more than 4,000 locations, has fallen as shoppers sought bigger discounts on the same items from online merchants such as Amazon in Seattle or at Bentonville, Arkansas- based Wal-Mart (WMT), the world’s largest retailer.

‘Must-Have’The company has also been hurt by a lack of must-have electronics items, according to Brian Nagel, a New York-based analyst at Oppenheimer & Co. The company’s same-store sales (BBY) decreased for five straight quarters before rebounding 0.3 percent in the three months ended Nov. 26.

“Best Buy has basically contended with a really tough product cycle and increased competition over the last few years,” he said in telephone interview. “These online retailers are selling products for a lot cheaper, and that’s difficult for Best Buy to contend with. The stock has been so weak because of those factors.”

Best Buy’s slump may now attract private equity funds because it still produces more free cash than any comparable retailer and has more cash than debt (BBY), according to R.J. Hottovy, director of consumer research at Chicago-based Morningstar.

Takeout PriceA buyout firm could close more stores, shrink the size of other Best Buy locations and replace management to cut costs and help it compete with merchants such as Amazon, he said. In April, Best Buy said it planned to reduce the square footage in its U.S. “big-box” stores by 10 percent in the next three to five years to lower costs by as much as $80 million annually.

“With regard to private equity, this is a situation that might make some sense,” Hottovy said in a telephone interview. “It does have a solid free cash flow profile and this is a situation where Best Buy may benefit from a more dynamic leadership (BBY) group, a group that understands the evolving dynamics of the consumer electronics retail business.”

One obstacle an LBO firm could face is resistance from Best Buy Chairman Richard Schulze, who founded the company and owns about 20 percent of its stock (BBY), according to Bradley Thomas, an analyst with KeyBanc Capital Markets Inc. in New York.

“I would be surprised if he would support the more short- sided and financially-oriented approach that an LBO investor would be looking to generate,” he said.

Still, with the additional cost cuts and earnings a private equity firm could potentially wring out, Best Buy may command at least $37 a share in a buyout, or $13 billion, according to Di Zhou, a Santa Fe, New Mexico-based analyst at Thornburg, which oversees $70 billion in assets and owned Best Buy stock at the end of September. Zhou based her estimate on analysts’ average earnings projections (BBY) and a multiple of 10 times.

“Some of the things we see, private equity firms could see as well,” she said.

How Newt blew it: An Iowa road map

How Newt blew it: An Iowa road map
Politico, 2-Jan-12
By: Jonathan Martin
[Full Link]

The high water mark of Newt Gingrich’s presidential campaign may have been Nov. 27, the day the New Hampshire Union Leader endorsed his candidacy for president.

The famously conservative paper’s endorsement was a priceless gift. The former House Speaker proceeded to squander it.

In doing so, Gingrich revealed that he learned all the wrong lessons from his campaign’s collapse this summer and none of the right ones from his remarkable comeback.

Instead of seizing the moment and making an aggressive case for why the contest was now a two-man race between a movement conservative and flip-flopping moderate — a unique opportunity afforded by the endorsement’s implicit-but-unmistakable critique of Mitt Romney in his firewall state — Gingrich fell back to his familiar habits, a routine marked by too much self-assurance and not enough discipline.

Between that and some other key factors — among them, Romney’s super PAC blitzkrieg and his own weak fundraising — a campaign that seemed on the cusp of stealing the nomination barely a month ago now faces an ignominious fourth place finish or worse. And the dramatic arc of the final chapter in his political career suddenly seems a lot less triumphant.

“This has been a great example of best of Newt and worst of Newt,” said Dan Meyer, his Chief of Staff as speaker, of Gingrich’s December. “He has the vision thing and he knows how to inspire people. But he was going to be smarter than the consultants and he didn’t pay enough attention to fundraising and organization and so when he got pounded he couldn’t respond.”

Gingrich’s problems weren’t just on the airwaves here, though.

Until an Indiana-based GOP direct mail consultant, Chris Faulkner, arrived in Iowa a week ago at the behest of a political director Gingrich only hired a week before that, the candidate had nobody here running his day-to-day caucus effort.

Beyond the TV barrage and tactical missteps, though, he lost his lead for a more fundamental reason: just as Gingrich demonstrated during his speakership, the most basic ability to stay disciplined and drive a consistent message escaped him.

He offered no discernible response to an onslaught of negative ads other than to complain about the negativity and insist that he would stay positive. Then he repeatedly undermined his own attempt to stay on the high road by criticizing his GOP rivals.


When he and his campaign decided they had to offer policy contrasts with Romney in week after Christmas, Gingrich veered off every day into all manner of rabbit holes instead of closing here by outlining the differences between his supply-side tax plan and Romney’s less-bold proposal. He revisited his Greek cruise (an intentional ploy to anger his old staff, he explained), went to a chocolate shop and engaged Romney over his rival’s Lucille Ball crack, accused an unscrupulous paid contractor of being the reason he didn’t make the Virginia ballot, and gladly riffed on electromagnetic pulse attacks. In response to a question about climate change, the would-be president said: “I’m an amateur paleontologist.”

Even more damaging, Gingrich let himself get into a back-and-forth about Ron Paul and gladly delivered a multitude of soundbites on campaign process, returning again and again to his greatest obsession: the ad campaign against him.

By Sunday, two days before the caucuses, any hint of a policy-oriented message was gone. He was in full grievance mode.

“If I could have done anything differently I would’ve pulled the plug on Romney’s PAC,” he told reporters in this central Iowa town, revealing that he felt “Romney-boated” by the third-party attacks.


In spite of it all, Gingrich does not seem entirely convinced that his campaign is in dire straits. He has spoken in the last few days about taking the fight to Romney more aggressively in New Hampshire and South Carolina, and Gingrich strategist Kellyanne Conway said on Fox Monday that viewers should expect a fiery speech from the GOP candidate on caucus night.

Gingrich’s defiance is understandable, for a candidate who has been prematurely left for dead before.

But it’s unclear how much political wisdom Gingrich gained from his resurrection experience. Even before the SuperPAC ads went on the air here, Gingrich betrayed a remarkably naive view of what was needed to win the caucuses.

Appearing at a POLITICO forum in Des Moines on November 16th, he was asked if he had the cash for TV ads.

“We’ll be able to afford them; I don’t know that we’ll do them,” said Gingrich. “We may do all of our stuff in social media. It will depend on what we think works best, particularly here where you’re targeting a very definable universe.”

It was Newt-the-futurist, musing about an unconventional approach to politicking that would break all the rules.

It was also revealing about Newt-the-candidate: after seeing his campaign team walk off en masse in June, he was going to remain his own chief strategist.

Gingrich didn’t go up on TV in Iowa until December 5th, when he unveiled a morning-in-America style spot. It was a modest buy, though, and it was barely even playing on the airwaves here by the time Gingrich returned to the state on December 14th.

By that time, Romney’s super PAC and Paul’s campaign were saturating the airwaves with a series of brutal ads attacking Gingrich for his policy shifts and past controversies.

While promising to do more ads, he was largely dismissive of the need to fight back.

“I’m going to run my campaign the way I want to and my campaign’s going to focus on positive ideas and positive solutions and I’m, frankly, taking the gamble that the American people care about actually solving our country’s problems, not just watching politicians beat each other up,” Gingrich told reporters in Iowa City.

The venue was telling. The former speaker had just finished a lecture on brain science in a University of Iowa classroom that was interrupted by protesters and featured a question about Gingrich’s three marriages.

While his Republican rivals were spending as much time as possible in conservative-heavy precincts, Gingrich was indulging his long-standing passion for brain science by discussing the topic in Iowa’s version of Berkeley.

Just as it was in the first iteration of Gingrich’s campaign when his advisers insisted he run a more traditional retail campaign and dispense with book-signings and documentaries, scheduling was another nagging problem over the last month.

After receiving the Union Leader’s endorsement on Nov. 27, he didn’t return to New Hampshire for another 15 days. Nor, between those weeks, did he air a single radio or TV ad in the state touting his seal of approval from a conservative institution.


As for Iowa, he flew back to Washington the weekend before Christmas, immediately following the Sioux City debate. The reason? To appear at a book-signing at Mt. Vernon and his wife’s band concert in Fairfax. His opponents were all making their cases in early states that weekend.

Gingrich returned to Iowa in the days before Christmas, but had no discernible message besides carping about the negative ads and citing how many “Pinocchios” a Washington Post fact-check had given one of the spots cut by Romney’s super PAC.

Still, Gingrich officials said not to worry – the candidate would return to the state after the holiday with a 44-city bus tour and new, sharp distinctions between his economic plan and that of Romney.

When he arrived in Iowa on Dec. 27, his campaign made headlines by announcing the bus tour had been cut in half and Gingrich was forced to address a similarity — not a difference — with Romney: namely a page-one Wall Street Journal article revealing that he had praised “Romneycare” in 2006.

Whether or not the story was planted by Romney’s campaign is unknown, but it nonetheless illustrated how, at nearly every turn over the last month, Gingrich was haunted by his top rival.

The degree to which Gingrich has been outgunned by Romney was most vividly depicted in the days immediately before and after Christmas.

The reason Gingrich cut short his final pre-holiday Iowa trip wasn’t just to toe-touch in New Hampshire, as he did for a few hours. It was because he had to hustle back to hold two events in Virginia that were aimed entirely at getting him the 10,000 signatures needed to be on the commonwealth’s ballot.

That was something Romney’s campaign had taken care of by having volunteers appear at polling places for Virginia’s August primary and on Election Day in November.

But Gingrich was, to use his word, “scrambling” then to meet the deadline. Appearing in Richmond the morning of Dec. 23, the deadline to file petitions, the candidate proclaimed they had gotten the requisite signatures.

Except he hadn’t.

The next day, Gingrich was humiliated. Enough of his signatures didn’t match voter rolls that he was found to have less than 10,000. He wouldn’t appear on the ballot in the state he’s called home for over a decade.

Romney officials pounced, mocking Gingrich for his organizational failure.

As bad as the ballot issue was from a perception standpoint, Gingrich’s campaign made it worse. On Christmas Eve, Gingrich campaign manager Michael Krull posted a message on Facebook comparing their failure to get on a primary ballot to the attack on Pearl Harbor.

Coming in a slow-news period, word of the bizarre comparison quickly spread and was still being discussed two days after Christmas. Then Romney ensured it would keep getting attention by saying the more apt metaphor was “I Love Lucy” grappling with chocolates on the conveyor belt.


Yet for all the very public ways in which Gingrich fell short, there were other, less obvious examples.

Take Dec. 26. Romney returned to the campaign fray by releasing a new ad and holding conference calls with early-state voters. Both got significant media attention.

Gingrich, meanwhile, was spotted that day padding around the McLean Giant and the only video that came out of his campaign was a three-minute video about George Washington crossing the Delaware on Christmas Day 1776.

Even after he began raising the money needed to pay a professional staff, Gingrich didn’t immediately hire experienced operatives.

In that context, it’s not difficult to understand how Gingrich failed rudimentary campaign tests like getting on ballots.

His political director, Martin Baker, didn’t begin work until Dec. 19.

At that point, Gingrich was being advised by a few more veterans behind the scenes.

But by then, some of the most severe challenges were already coming to fruition. And not just the Virginia ballot.

The day Gingrich appeared in Des Moines, Nov. 16, happened to be the day he was confronted with a Bloomberg story reporting that he made over a million dollars consulting for Freddie Mac.

He had been roundly mocked after saying in a debate the week before that he was paid for his “advice as a historian,” and when faced with question about his compensation level he wouldn’t say if it was accurate.

But more telling was what he said when asked if he had documentation ready about his time consulting for the mortgage giant — he admitted he didn’t.

The Freddie issue has now dogged Gingrich for well over a month and he’s yet to offer a cogent answer or air an ad pushing back on the charge, as he suggested at one point he would.

“I probably should’ve responded faster and more aggressively on that,” the former speaker conceded to reporters in Marshalltown Sunday, lamenting that he didn’t run a spot “that explicitly repudiated the Freddie Mac distortions.”

For Gingrich, a figure pocked with scars from decades of political combat, December has been among the most humbling months of his long career.

He began it with the bravado-bordering-on-arrogance that has marked his public identity.

“I mean, it’s very hard not to look at the recent polls and think that the odds are very high I’m going to be the nominee,” he told ABC’s Jake Tapper on Dec. 1.

A month later, on Monday Jan. 2, he was conceding Iowa.

“I don’t think I’m going to win,” he said the day before the caucuses.