Roth IRA: Opportunities and Insights
Q & A with Jim Brown, Senior Vice President of Personal Retirement Solutions and Heather Walsh, Wealth Management Advisor, for Merrill Lynch Wealth Management, Boston, MA
What are the differences between a Traditional IRA and a Roth IRA?
An IRA is an account that provides you with certain tax advantages for saving for your retirement. If you are eligible to contribute to a traditional IRA, your assets may grow tax-deferred, and distributions taken after age 59½ generally are taxed as ordinary income. Read more
Mass. Gov. Patrick paints grim economic picture
(NECN: Peter Howe, Boston, Mass.) - More layoffs and budget cuts could be on the way in Massachusetts, according to Governor Deval Patrick.
Patrick held a news conference this morning and said that even though jobs are starting to return to the Bay State, the state is still in rough financial shape.
Tax revenue for the month of September fell short of expectations by almost a quarter billion dollars.
The governor says it could mean less aid for local cities and towns. He will have more details in a few weeks.
Rubber Ben-d: Bernanke to bounce back for second term
So much for vacation – President Obama took a quick break from his break today to announce that he was nominating Federal Reserve Chairman Ben Bernanke to a second term in that post.
Asked why the President decided to do it now, Deputy Press secretary Bill Burton said he wanted to quell the rumor mill around Washington about the appointment. Bernanke must be confirmed by the Senate, but he would seem to be a shoo-in, although he has received some criticism for not stepping in soon enough to head off the impending banking crisis.
The President’s full prepared statement is below the video player.
“Good morning everyone. I apologize for interrupting the relaxing I told you all to do, but I have an important announcement to make concerning the Federal Reserve.
The man next to me, Ben Bernanke, has led the Fed through the one of the worst financial crises that this nation and this world have ever faced. As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve. And that is why I am re-appointing him to another term as Chairman of the Federal Reserve.
Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall. Almost none of the decisions he or any of us made have been easy. The actions we have taken to stabilize our financial system, repair our credit markets, restructure our auto industry, and pass a recovery package have all been steps of necessity, not choice. They have faced plenty of critics, some of whom argued that we should stay the course or do nothing at all. But taken together, this “bold, persistent experimentation” has brought our economy back from the brink. They are steps that are working. Our recovery plan has put tax cuts in people’s pockets, extended health care and unemployment insurance to those who have borne the brunt of this recession, and is continuing to save and create jobs that otherwise would have been lost. Our auto industry is showing signs of life. Business investment is showing signs of stabilizing. Our housing market and credit markets have been saved from collapse.
Of course, as I have said before, we are a long way away from a completely healthy financial system and a full economic recovery. And I will not let up until those Americans who are looking for jobs can find them; until qualified businesses, large and small, who need capital to grow can find loans at a rate they can afford; and until all responsible mortgage-holders can stay in their homes. That is why we need Ben to continue the work he’s doing, and that is why I’ve said that we cannot go back to an economy based on overleveraged banks, inflated profits, and maxed-out credit cards.
For even as we have taken steps to rescue our financial system and our economy, we must now work to rebuild a new foundation for growth and prosperity. We must build an economy that works for every American, and one that leads the world in innovation, investments, and exports.
Part of that foundation has to be a financial regulatory system that ensures we never face a crisis like this again. We have already seen how lax enforcement and weak regulation can lead to enormous wealth for a few and enormous pain for everyone else. And that’s why even though there is some resistance on Wall Street from those who prefer things the way they are, we will pass the reforms necessary to protect consumers, investors, and the entire financial system. And we will continue to maintain a strong and independent Federal Reserve.
We will also keep working towards the reform of a health insurance system whose costs and discriminatory practices are bankrupting our families, our businesses, and our government. We will continue to build a clean energy economy that creates the jobs and industries of the future within our borders. And we will give our children and our workers the skills and training they need to compete for these jobs in the 21st century.
Much like the decisions we’ve made so far, the steps we take to build this new foundation will not be easy. Change never is. As Ben and I both know, it comes with debate and disagreement and resistance from those who prefer the status quo. And that’s ok, because that’s how democracy is supposed to work. But no matter how difficult change is, we will pursue it relentlessly because it is absolutely necessary to lift this country up and create an economy that leads to good jobs, broad growth, and a future our children can count on. That is what we are here to do, and that’s what we will continue to do in the months ahead. I want to congratulate Ben on the work he’s done this far, and wish him continued success in the hard work ahead. Thank you.”
Bernanke confident Fed will unwind economic stimulus, prevent inflation
(NECN: Washington) - Federal Reserve Chairman Ben Bernanke this morning testified before the House Financial Services Committee.
Bernanke is seeking to assure Wall Street and Congress that the Fed will be able to feel in its extraordinary economic stimulus and prevent a flare up of inflation when the recovery is more firmly rooted.
"Financial conditions remain stressed," said Bernanke. However, Bernanke also said "many markets are functioning more normally."
Obama: Unemployment likely to ‘tick up’ for several months
President Barack Obama met this morning with Dutch Prime Minister Jan Peter Balkenende.
“I don’t have a crystal ball. We have looked at a lot of the economic data that’s coming out right now. We have seen some stabilization in the financial markets, and that’s good, because that means that companies can borrow and banks are starting to lend again,” Obama said on the issue of the economy.
More than 2 million jobs have been lost since Congress passed Obama’s $787 billion economic stimulus package. The unemployment rate stands at 9.5 percent, the highest in 26 years.
“My expectation is that we will probably continue to see unemployment tick up for several months,” said Obama.
Geithner: You don’t convene a committee to put out a fire
Treasury Secretary Timothy Geithner testified this morning before the Senate Banking Committee. Geithner said it is clear that the government could have done more to prevent the economic downfall.
Geithner said that gaps and weaknesses in the regulatory framework governing banks and other financial institutions “presented challenges” to the government’s ability to monitor and address risky market bets.
One problem, he says, is that no single regulator saw its job as protecting the economy and financial system as a whole.
The right financial mindset for small business owners
Gary McGuirk, Merrill Lynch Boston
What are main concerns for small business owners in today’s economy?
Small business owners have many concerns in today’s economy. They must continue to keep an eye on the bottom line, be concerned about employees and make sure that customers are happy. The events of the last 18 months have made their business journey even more difficult. Read more
Finding Opportunity in Dealership Closings
By: Peter Howe
For Arlington, it came a year ago, a glimpse of what now awaits dozens of New England communities. The Buick dealership in the center of town, Hodgdon-Noyes, next to Arlington High School, closed down as the owners decided to get out of what was a shrinking business.
Read more
Founder buys Conn. School of Broadcasting
Dick Robinson, the founder of the Connecticut School of Broadcasting, has won approval to buy back the bankrupt business he started 45 years ago.
Robinson plans to reopen campuses in seven states.
A federal bankruptcy judge in Boston approved the sale to Robinson and his family for $1 million on May 8. The deal was closed seven days later.
All 26 locations had abruptly closed in March and filed for bankruptcy.
The school’s operations will be scaled back, according to court documents.
Chrysler cuts wide, deep – and just a start
The numbers aren’t surprising, but they are painful when you start looking more deeply at the numbers.
Chrysler filed paperwork today seeking to immediately drop 789 dealers from its retail network – a quarter of their dealerships, saying it needs to streamline the dealer network so that the company “can begin implementing efficiencies, marketing strategies, production plans and model changes” that will make it more profitable.
The filings included a statement from the auto maker’s director of dealer operations, Peter M. Grady, who said, “It is critical that the Domestic Dealer Network be reconfigured quickly to create a dealer network that improves the profitability of the best dealers in the best locations.”
In New England, 32 dealerships are on the list, although it should be pointed out that some are dealers who sell multiple makes. They would just lose their Chrysler, Jeep or Dodge franchise – and might not be forced to close.
By state – there are 7 slated closings in Connecticut, 12 in Massachusetts, 6 in New Hampshire, 4 in Maine, 2 in Vermont and 1 in Rhode Island.
The dealers will get a chance to appeal as part of the bankruptcy proceedings, but the reality is that these cuts are just a start. General Motors is expected to announce more than a thousand dealerships it wants to close in the coming days, and more announcements are expected down the road.