£130 OFF YOUR WINTER ELECTRICITY BILL

The big six energy suppliers are spending £1 billion over four years to give some low income customers a discount off one winter electricity bill. This year the discount is £130 and around two million households are eligible.

Pension age – ‘core group’

People over pension age on pension credit qualify for the discount if their income is below around £143 single or £218 (couple). That has to be true on 21 July 2012. People already 80 on that day qualify with a slightly higher income – below £161 (single) or £241 (couple). Some people with disabilities or carers can have higher incomes and still qualify. There are reckoned to be more than a million in this ‘core group’ and they should get the discount automatically – the energy supplier will match their details to a list provided by the Department of Work and Pensions.

Low income

Low income households can qualify for the discount if they apply for it. This is called the ‘broader group’. Each of the big six energy suppliers has its own rules about who qualifies in this group. Generally it is households on a low income where the customer or their partner or child is disabled or they have a child under 5. But each supplier has its own detailed rules and they are all different from each other. Some suppliers also include people over pension age on pension credit who do not get the automatic ‘core group’ payment. See 'Details' below for the six different schemes.

Apply

You apply to your energy company. Find it online or call the customer number no your bill. Ask about the Warn Home Discount. See 'Details' below for contact numbers for each scheme.  

Prepay

You can get the discount however you pay your bill. So it includes people on prepayment meters as well as those who pay quarterly or by monthly direct debit. People on prepayment meters will get a credit to put no their key. Some may get a cheque. More here http://cfe.custhelp.com/app/answers/detail/a_id/6709

PROBLEMS

Big six only

Only the big six energy suppliers are part of the scheme. People with smaller suppliers and those in Northern Ireland will generally NOT get the discount.

The big six are:

British Gas (includes Sainsbury’s Energy), EDF Energy, E.on, npower, Scottish Power, SSE (includes Atlantic Energy, Scottish Hydro, Southern Energy, SWALEC, Ebico, Equipower, M&S Energy).

Utility Warehouse and Equigas give the discount to those in the core group only. People with the other smaller energy companies and those in Northern Ireland will NOT get the Warm Home Discount.

Social tariffs

Before 2011 people on low incomes could pay less for their energy through what were called ‘social tariffs’. They included schemes like Energycare Plus, Energy Assist, Essentials, Fresh Start, and Spreading Warmth. These schemes are closed to new applicants and are being phased out. But some people may still get them and they cannot get the Warm Home Discount as well.

Deadlines

The discount has to be made by 31 March 2013 and applications in theory can be accepted up to that date. However, some suppliers have earlier deadlines. British Gas says you have to apply by 31 December and E.on will only accept applications up to 24 January but both may be flexible. If you qualify it is best to apply as soon as possible.

Run out of cash

Even if you fulfil the conditions you may not get the discount. There is a fixed amount of money for the broader group scheme and once that runs out no one else will be paid. However, no supplier has run out yet.

Not paid automatically

If you are in the ‘core group’ of people on pension credit but have not been sent a letter you should contact your supplier and ask why. It is possible that the information held by the DWP is slightly different from the details held by the energy company and you are in what is called an ‘unmatched’ group. Call 0845 603 9439 to get it sorted out.

MORE DETAILS

The core group is defined as people on pension credit who get ONLY the guarantee credit and do NOT get any savings credit. However, people born 21 July 1932 or earlier qualify even if they get guarantee credit even if they also get some savings credit.

In general the date when you have to fulfil the conditions for the Warm Home Discount was 21 July 2012. If you have moved supplier since then it can get complicated. Ask your existing supplier what to do. Remember it is your electricity supplier who pays the discount. That is because everyone gets an electricity bill but not everyone has piped gas.

The broader group is defined differently by each of the six energy companies. You can read the details of each six and how to apply here

British Gas http://cfe.custhelp.com/app/answers/detail/a_id/6622

EDF Energy http://cfe.custhelp.com/app/answers/detail/a_id/6641

E.on http://cfe.custhelp.com/app/answers/detail/a_id/6643

npower http://cfe.custhelp.com/app/answers/detail/a_id/6642

Scottish Power http://cfe.custhelp.com/app/answers/detail/a_id/6644

SSE http://cfe.custhelp.com/app/answers/detail/a_id/6623

Thanks to Consumer Focus for that information.

There is a Warn Home Discount helpline on 0845 603 9439

Where The Debt Stands...

So we have had quite a few snafu's over the last few weeks - it's causing a bit of pain with regards to meeting our goal of credit card debt free going into 2013.

When we changed our car payment schedule, BMO accidently withdrew an extra payment of nearly $300

• BMO's extra withdraw caused a ripple affect whereby our account was overdrawn and our mortgage payment bounced


• We were charged a $65 bounce fee for the payment, but got it in a few days late once we realized what happened


• Jordan was sick one day a week or so ago and he was out of sick time.  His manager/payroll person didn't tell him and instead of charging the day to vacation instead (which he has plenty of) - they just docked his pay by 7.50 hours.  He's a salaried employee.  I was livid.


• Jordan was put in a Secret Santa draw at work that cost us $25 we hadn't budgeted for 


• An extra tank of gas this week ($60) b/c of two Christmas parties ($100) this past weekend

So.  There's that.

We also have overspent our Christmas budget.  Again.

Also I forgot that it costs $ to ship gifts.

Ah!

So...Merry Christmas.

Giving

There is nothing like the Christmas season to have giving on the mind. It’s a time of year when there are so many people in need, and we receive so many asks for support.

Two years ago, my family created a donor advised family fund to direct our philanthropic desires. Held within the Golden & District Community Foundation (GDCF), all donations to the Principal of the fund are in trust. The Foundation has support from the Columbia Valley Credit Union for above market interest rates – and it’s the interest that is granted to programs within the community that need support.

We have found that by donating this way, the money keeps working – and works collectively – to bring more and more funding to our community.

After we established our fund within the GDCF, we set a goal of raising $10,000 (the minimum before the interest earned can be used for grant giving). We have just recently reached that goal – and are immensely proud of our efforts.

It’s now time to set a new goal, so that our fund continues to grow each year and we can continue to support our community now – and in the future.

If you are in Canada, and want to find out if there is a Community Foundation in your town, you can check out this website: http://www.cfc-fcc.ca.

If you are interested in supporting my family’s fund through the GDCF, please click the donate now button on the right hand side of this page, and be sure to choose the Crandlemire-Keenleyside Family Legacy Fund from the drop down list.

~ thank you, and best wishes this holiday season

No Cliff Calamity: That's What Stocks Are Correctly Predicting

Despite all the media hullabaloo about the fiscal cliff and a potential recession if none of the Bush tax cuts are extended, stock markets have behaved calmly throughout this whole period. In fact, as of this writing today, the Dow is up 100 points.

I’m gonna guess that stocks, in their wisdom, are correctly sniffing that there will be no calamitous falling off the cliff. By that I mean there will be no $500 billion tax hike, which would be an economy killer.

Instead, after speaking with prominent Republican House and Senate members, I have come to believe the following: The GOP knows that Obama has the upper hand in this post-election battle. Therefore, they are preparing a strategic retreat.

Republicans don’t want to be the party of rich people and let Obama maintain his hold on the middle class. Republicans also don’t want to be the party of recession. So if no comprehensive deal is reached by President Obama and Speaker John Boehner, Republicans will not block an extension of the so-called middle-class tax cuts, which are roughly three quarters of the total.

It’s hard to know how this story will work itself out. There may be deals on upper-end tax rates, say 37 percent instead of 39.6 percent. And maybe even some lower tax penalties on capital gains and dividends.

Ideally, the GOP can get solid promises on spending cuts and entitlement reforms in return for a tax package. That tax package may include a dollar limit for tax deductions along with the rise in upper-end tax rates. Entitlement reform is also on the table. And so is a roughly $60 billion 2013 spending cut, which carries over from the across-the-board sequester. That is still possible.

But what is not possible is that House Republicans give up their constitutional prerogative to set the debt ceiling. That is their biggest point of leverage. And that leverage will carry over into 2013 as lawmakers once again attempt an across-the-board effort for pro-growth tax reform (flatter rates, broadening the base), serious structural entitlement reform, and more discretionary spending cuts. This will be the battle royale of next year.

As I said, no one knows how all this is going to play out in the next two weeks. But from the standpoint of the economy and the stock market, a worst-case tax-hike scenario that would sink GDP is not likely to happen.

There will be a deal to extend most of the tax cuts. And while higher tax rates on successful earners, small-business owners, and investors are most definitely not pro-growth, at least the across-the-board tax-hike calamity will be avoided.

Car Payments - Made a Change

So we had a date with the Bank of Montreal this weekend.  Among many things including exploring the line of credit I asked you guys about a couple days ago and a changing my name - we also chatted about our existing car loan.



The payment frequency used to be every two weeks, just under $195.  It was a pain, because we bought the vehicle on a weekend, so the payments always came out on Monday or Tuesday rather then the Friday - and once and a while there was three payments - I didn't keep track well which months because it's the Mondays rather then the Fridays.



All that said - we changed our payment frequency to $100/week rather then $195/two weeks.  Annually, our payments have increased from $5,052.06 to $5,200 - not a huge change at all - but the payments now align with our mortgage and I like round numbers.

Lines of Credit

We have been offered a $10,000 line of credit with the Bank of Montreal because of our good history with our auto loan and credit card that we have with them.  They are offering us a really reasonable rate (less than 4%), no credit check and it would be unsecured.



We're very interested because of the work were planning to do on the back yard this year, we were planning on having to use the credit card a bit as we saved up money (we won't have the $10,000 for the yard technically until December, 2013 so were planning on using the CC and then paying it off as we saved the $$).



A line of credit with such a low interest rate would seriously help with the interest for next year's back yard project.



....what are your thoughts?

Updated Tracking Bars

All the tracking bars are updated with the 2013 goals and current balances!



Question - does anyone get a Christmas or annual bonus/profit share this time of year?  If you do, how do you manage where it gets allocated?

Credit Card Update

Today I just wanted to share a quick credit card update.

Jordan and I are still on track to get the card paid off by the end of December!!  

2013 Plan

Last week Jordan and I went out for a budget date - Vietnamese soup - so it was an inexpensive budget date.  I really like saving for everything at the same - money going into each 'pot' each week, so that you can see the progressive growth overtime.  Jordan likes aggressively tackling one goal at a time.



Such is life, we compromised.



We are going to continue to make weekly RRSP contributions, while we aggressively tackle one (other) goal at a time.



Here's the breakdown of our goals:

We're going to save for each of these goals in order - it was easy for Jordan and I to agree that our emergency fund was the number one priority and the past $1,000 we maintained was simply not enough.   Following that is our Vehicle Maintenance/Emergency Fund - we're planning on buy a second set of rims in the summer when we switch our tires back from winters to all seasons.  That will save us about $200/annually on switching and will extend the life of the tires/rims all around.



Our camping/vacation fund is seriously lacking this year.  Under some protest (by me), we decided that we just can't have it all - and trying gets us into trouble.  So we won't be going on our two annual week long camping trips this year.  Instead, we'll hopefully have some long weekends and staycations.



Next are our gift and Christmas funds that Jordan wanted to separate - we never save enough for these, and want to do better this year.



We will reach the first 5 goals by the end of May.

Check out the 2013 Budget Page to see the budget breakdown.



Last for 2013 is the House fund - and all remaining cash flow will go into that account.  We are going to be building a fence, installing the grass, building a dog run and a deck - and biggest of all - a garage.  Within our current budget, we'll save about $10,000 - so we have to find ways to come up with another $5,000.  We've got some ideas for that - but I'll share those in another post.



the baby fund

is on hold.



I had a look at our baby budgets again after considering Jordan's raise, and we can actually now survive without additional savings or income with Jordan's salary and me on EI.   There wouldn't be extra's - but it can be done.  So, that's on hold.  Getting the yard done is the last big thing that Jordan wants to do before we start a family - and so I really want to support us getting that done so we can start our family together with both of us feeling strong and confident about the decision.

Loss

Yesterday morning, our family dog of the last 14 years passed away peacefully.

My mom let my brother and I know straight away and it was so very difficult for us to all be in different cities - provinces too actually.  I'll be going back home in three weeks to visit - and it really just seems so far away.



There has been so much loss, heart ache and upheaval this past year.  My heart needs time to heal before I can manage any more life challenges.  My family needs time to heal.

a Pleasant Surprise

Never have I, nor has Jordan, experienced what we did this past Friday.



I mentioned in my last post that we knew the second part of his raise had finally been approved albeit six weeks late.   We weren't actually expecting it to be processed so fast - but it was - but the real surprise is how much it was.



I pride myself on being able to run the numbers and figure out within about 10 cents what our net will be when we get a raise - and I was off by quite a bit.  When I got to my spreadsheets I realized that Jordan didn't get a raise to $50,000 he got a raise to $51,600.



He's salaried - but for hourly folks that's a difference of $24.04/hour vs $24.81/hour.



Gross Monthly it's a difference of $166/month vs $300/month.



At the end of the day Jordan will take home an extra $33.63/pay or $874.38 over the course of the year.

CPP FINED BUT BANKS IN THE FRAME

When I appear on BBC Breakfast I write a cue and notes of what I am going to say. I never read it but it is a useful aide memoire for me. And where there are allegations it ensures I get them right and am fair and balanced.

This morning my spot on BBC Breakfast was stood down for some breaking news. These things happen. But here are the script and notes I wrote about CPP and its mis-sold insurance products.

CUE: A firm which sold millions of people insurance against ID theft and loss of their bank cards has been fined more than £10 million by the financial regulator and told to pay compensation to customers.

CUE: The Financial Services Authority revealed that CPP had told customers untruths and misled them while selling the insurance, which was unlikely to pay out in any normal circumstances. Paul Lewis is in our London studio

Q: What did CPP sell and why was it mis-sold?

PAUL: Two products were mis-sold. What CPP called card protection plans which were supposed to pay out if you had money stolen from your account – but of course if you do the banks pay out in almost all circumstances so the insurance was generally useless. The FSA revealed CPP charged around £35 a year for it but the product cost it just 60p. The other was ID theft insurance. It was more expensive at £84 a year but it cost CPP just £16. Both products were mis-sold by sales staff who, to put it bluntly, lied. They used false statistics, made misleading claims, exaggerated the value of the insurance – which as I said would almost never pay out – and they gave advice which in the later years they were banned from doing. Their contracts also contained unfair terms.

Q: How did it manage to sell so much?

PAUL: Altogether it sold more than £840m of new and renewed business to 4.4 million people between 2005 and 2011. CPP sold about 10% of its products directly. But the bulk of them – about 4 million new policies – were sold as a result of a partnership with four High Street banks – Barclays, RBS, Santander, and HSBC. In some cases the bank put a phone number on newly issued cards with the instruction to call it to ‘activate’ the card. In fact you got straight through to a CPP sales person. So some banks at the least colluded in this mis-selling to 4 million people.

Q: And have the banks also been censured?

PAUL: No. Not yet. I understand the FSA is in discussions with the banks and other CPP partners. CPP has been fined £10.5m for direct sales and is expected to pay out £14.5m compensation. But ten times as many policies were sold through the banks – so will the fines and compensation be ten times as big? We won’t know that for some time. But it is more bad news for the reputation of those banks.

Q: What compensation will customers get?

PAUL: Anyone mis-sold these products – and the FSA report makes it clear that was widespread, so it may be most or almost all of those with them – will get their premiums refunded plus interest. CPP has been banned from selling these products – in fact its whole website is down at the moment – but those who have them are allowed to renew. Anyone who is offered a renewal should think very carefully about whether it is good value for money. And should prepare to make a claim for compensation when the scheme is announced in the New Year.

Q: What does the company say?

PAUL: In a long statement it apologised, said this was all in the past, it would pay the penalties, and move on to a better future.

You can call CPP in office hours free from a landline on 0808 156 0199

Richard Fisher: Fed Won't Catch Markets If US Falls Off "Cliff"

Senator Kyl Sees Higher Revenues Without a Tax Hike

A federal budget deal to avoid the fiscal cliff can be achieved without

raising tax rates, Senate Minority Whip Jon Kyl said Friday on the Kudlow

Report.

“Tax revenues can be generated by two ways other than raising tax rates,” he said. “One is to eliminate some of the deductions, credits, exemptions, special provisions in the code that end up producing more revenue but without affecting the rates. And the other is through economic growth.”

The senator from Arizona said he thought it likely a deal could be struck to avoid the so-called “fiscal cliff,” a deadline by which the lack of a federal budget would result in the expiration of the Bush tax cuts and trigger automatic spending cuts.

Kyl sees additional revenues as the key.

“If we can focus, not on tax rates, but to give the president something that he

wants, more tax revenues, as I said, there are ways to get more tax

revenues,” he said. “Either through and/or producing more wealth as a

country, thus resulting in more taxes paid to the government.”

The Republican senator also took issue with the recommendations of the

special committee co-chaired by former Sen. Alan Simpson, R-Wyo., and

former Clinton White House Chief of Staff Erskine Bowles.

“Simpson-Bowles is not a good template here because it sets up a contest

between lowering marginal tax rates and raising the business taxes, that is to

say, dividends, capital gains and the estate tax,” he said. “Simpson-Bowles

in effect says, you can have lower rates on one side or another, but not both.

That’s not good.” 

CHILD BENEFIT HIGH INCOME CHARGE

UPDATED 9 JANUARY 2013

If you get child benefit and you or your partner has an income over £50,000 a year some or all of your child benefit will be taken back in extra tax. It is called the Child Benefit High Income Charge.

The rules are complicated and may seem illogical.

The Charge
The charge began on 7 January 2013. No-one has their child benefit itself taken away. Instead the partner with the higher income pays an extra tax charge. If their income in a tax year is £60,000 or more the tax charge will equal the child benefit. For a household with three children child benefit is worth £2449.20 a year. So the extra tax will also be £2449.20. It will be collected through self-assessment. If you do not already fill in a self-assessment form you will have to in future. The Revenue now estimates that 300,000 more people will have to fill in a self-assessment form as a result of the charge.

If the partner with the higher income gets between £50,000 and £60,000 a year the tax charge is less than the child benefit. It will be 1% of the CB for every £100 by which income exceeds £50,000. So if income is £55,000 the tax charge is 50% of the CB. For a household with three children that would be £1224.60

The charge is assessed on the partner with the higher income. If one partner has an income of £60,000 and the other partner has no income then the full tax charge will be made and every penny of the Child Benefit will be taken back in tax. On the other hand if both partners have an income of £50,000 no charge is made even though their household income is £100,000.

The charge began on 7 January 2013. If it applies to you then you will need to inform HMRC by 5 October 2013 and register for online self-assessment and submit your form online by 31 January 2014. It will be charged pro rata for the three months of the tax year 2012/13. If you are en employee and the total amount due under self-assessment is £3000 or less then it can be paid through your tax code. The charge itself will be more than £3000 if you have four children or more.

HMRC estimates that 1.1 million people will have to pay the charge. It identified about 800,000 of them and wrote them a letter explaining the charge before it began. HMRC failed to find the other 300,000. If you did not get a letter but believe the charge may apply to you, then you must contact HMRC by 5 October 2013.

Cohabitation
If someone who gets CB lives alone then it is their income which is assessed. If they live with another person as husband and wife or as civil partners the partner with the higher income is assessed and – if their individual income is more than £50,000 – charged. It does not matter whether two people are married or in a legal civil partnership. If they live as if they were then they are counted as partners. And it does not matter whose children the child benefit is paid for.

This rule can lead to anomalies when relationships begin and end.

• Amanda Smith is divorced and has two children. She earns £35,000 a year and gets £1752.40 a year in child benefit. Her income is below £50,000 so the tax charge does not apply to her. She meets Charles Wright. After a few months they start living together. He earns £60,000 and has to inform HMRC and pay the extra tax charge of £1752.40 even though the children are not his and he contributes nothing to their upkeep. On the other hand their biological father James Smith, who earns £95,000 a year, pays no extra tax.

The rules about living together are the same as those used for tax credits. If two people have a relationship but have two separate homes HMRC can still decide they are living together as partners.

Marginal tax rates £50,000 to £60,000
A person liable to the charge whose income is between £50,000 and £60,000 faces very high rates of tax on each extra pound they earn. They pay income tax at 40%, National Insurance at 2%, and then the  child benefit charge. If there are three children that charge is 24.5%. That means for every extra £100 they lose two thirds of it to tax and keep just £33.50. If they have a student loan and pay the graduate tax of 9% they will keep less than a quarter of any extra earnings, losing £75.50 of every £100 to tax.

The more children there are in the household the higher the child benefit tax. If there is one child it adds 10.6% to the tax rate. For two it is 17.5%, three children is 24.5% and four adds 31.5%. Five children adds 38.4%. If there are eight children it is 59.3%, taking the total tax take to more than the money earned. For every £100 earned the total tax is £101.30. And if graduate tax is paid then a partner in a seven child family will pay £103.40 on every £100 earned. In other words they will be better off not earning the extra money.

The child benefit tax charge means that anyone with even one child and an income between £50,000 and £60,000 will pay a higher marginal rate of tax than someone with an income of £1,000,000. Everyone with even one child will pay at least 52.6% in tax for each extra £1 earned. That is a higher rate than the 52% income tax and NI charged in 2012/13 on those with an income above £150,000. That rate is being cut to 47% from April 2013 in order to boost incentives among high earners to earn more. But the marginal rate for those on £50,000 to £60,000 with children is much higher and will not be cut.

Income
The income which is assessed is called 'adjusted net income’ though in fact it is more like gross income before tax. It is your total taxable income from all sources including earnings, rent, dividends, and savings interest before any tax allowances are deducted. However, you do adjust it by deducting pension contributions, gift aid donations, and salary sacrificed for child care vouchers. So someone who earns £60,000 and would face the full 100% tax charge could pay £10,000 gross into a pension scheme and avoid the charge altogether. As most of the contribution would be tax relief that would be a very good deal.

Avoid the charge
You can avoid the tax charge and the hassle of self-assessment if the person who gets the child benefit tells HMRC they do not want to receive it. The child benefit will stop and the tax charge will not be due. Although child benefit is not received, entitlement to it will continue. So it can be reinstated if circumstances change and National Insurance credits will continue to be available for the person entitled to it. Those build up entitlement to state pension if National Insurance is not paid at work.

Giving up child benefit should not affect a current or future entitlement to widowed parent's allowance as you will still be 'treated as entitled' to child benefit even if your late spouse/civil partner or you have given it up.

If you give up child benefit but it turns out that the tax charge is not due you can reclaim it for up to two years.

Giving up child benefit is only sensible if the higher earner has an income well above £60,000 and the relationship between them and the person entitled to child benefit is stable. Even then there are good reasons for keeping the child benefit. It can be put into a savings account where it will earn interest and the money in the account can be used to pay the tax charge up to 21 months later leaving a small profit on the interest. If the account is an ISA no tax will be due on the interest.

The Revenue estimates that about 270,000 people had given up their child benefit before the charge began on 7 January 2013.

More information
This brief guide covers the basics. Always get advice and study official documents before making changes in personal circumstances. HMRC has comprehensive but hard to follow information on its website http://www.hmrc.gov.uk/childbenefitcharge/index.htm

Making Up for It

So we got a random deposit of $500(+) from Jordan's insurance provider this morning - that's fantastic because today our weekly mortgage payment also came out.



We have looked into a few other things we can do to help with the bit of shortfall, and still meet our goal of paying of the credit card.

• We checked our points Aeroplan/Air Miles balances




• We had enough Aeroplan to order a $100 Costco gift card - it should arrive in the next week or so




• Checked with Enmax




• We have signed up with something called Easy Max Rewards with Enmax - basically you accrue $100 a year (or you can get it applied to each bill in increments) as a 'thank you' for bundling your utilities with them


• We have a $88.48 credit we'll be applying to the next bill 




• Return Pop Cans




• When we have a bag full of recyclables we toss them in the back of Jordan's truck (it has a canopy and isn't driven much). 


• We haven't gone yet (but hopefully this weekend) - the truck has half a dozen black garbage bags full - I'm crossing my fingers for about $50-$75 there.

With these three methods - we've almost found the $300 shortfall!! 

What strategies do you have to find more money when you have a shortfall or unexpected drop in income? (other than your emergency fund, which I know, I know, we need to get funded again).

STD - It Continues

So yesterday we found out that Jordan was actually only paid for 6 days at full time for the days he was at work before he went on short term disability.  The insurance company, will pay him separably for 80% of his pay for the 9 full days that he was off work.



Jordan also found out yesterday that the rest of his raise is FINALLY approved.



So I'm not sure if his STD will get paid at his new salary or his old salary and no one really seems to know the answers.



I had a look at the budget and realized that over the next few days we were going to wind up in the overdraft pretty badly - so I transferred my allowance money ($702) into our joint account as a buffer.



For those folks who remember, yes we stopped giving ourselves an allowance, but I still had some cash stashed away.  I was planning on using this money for a pretty day bed for my craft room - and hopefully will still be able to once we get the disability money and Jordan's raise comes through.

Once Bullish, Leon Cooperman Grows Wary of Stock Valuations

For years famed investor Leon Cooperman has talked up stocks. But on last night’s show, he sounded the alarm.

Cooperman, who is a widely followed investor and chairman of the hedge fund Omega, has made headlines for quite some time calling stocks 'the best house in the financial asset neighborhood.'

Back in 2011, Cooperman outlined his pro-stock market thesis at length on CNBC.

But on The Kudlow Report, Cooperman made a surprising statement that presumably reflected a shift in his outlook. He told Larry, “I think the stock market presently is fairly valued. I believe the profit cycle is peaking.”

Cooperman went on to say that the market multiple may be too high.

“Historically the market multiple is around 15,” said Cooperman, but over the past 50 years or so the growth rate has been much more robust. If we’re moving into a period of slower growth than the premium investors are willing to pay for stocks will probably decline. 

That’s not to say Cooperman is a seller – he’s not. “I’m not aggressively bullish or bearish,” he explained, “I’m simply saying I think the market is now fairly valued.”

And he reiterated something he’s said many times before. 

“If you must put money to work I still don’t think there’s a better alternative than common stocks – the Fed has made all the alternatives very unappealing."

Nonetheless, his commentary suggests his outlook is shifting.

Cooperman also told Larry Kudlow that he thought all the concerns about the fiscal cliff or the confluence of tax hikes and spending cuts that could go into effect as soon as January 1^st – are overblown.

“They’ll kick the can down the road,” he said. “There’s no way a politician will allow the cliff to hit.”

Does the Fed Have Grave Concerns About the Economy?

On Tuesday, the Federal Reserve re-affirmed its commitment to using unconventional efforts to stimulate the economy.

In the latest Fed statement, the central bank said it would keep buying $40 billion in mortgage-backed debt per month to push interest rates lower.

The Fed also repeated its vow to keep interest rates near zero until mid-2015.

Although that may seem like the Fed is sending a signal to markets that they’re intent to drive the economy, no matter what the cost – that may not be what the Fed is really saying.

According to former Fed Governor Kevin Warsh the move isn’t a show of strength – it’s something far more ominous.

“I think the Fed revealed in their actions just how grave they think the economy is,” he said on The Kudlow Report.

The statement shows, “just how concerned they are about the economy’s prospects – just how concerned they are about the 'fiscal cliff' and Europe.”

Warsh served as a member of the Board of Governors of the Federal Reserve System from 2006 to 2011. From 2002 to 2006, Warsh was Special Assistant to the President for Economic Policy, and Executive Secretary of the National Economic Council.

His take on the Fed – as someone who was once on the inside – is that the Fed feels they’re the only institution standing between the nation and a terrible downturn.

“The central bankers feel their doing it all by themselves – that they’re not getting help from Congress or the administration.”

It seems Wall Street may share the skepticism expressed by Warsh. Again both the Dow and S&P closed lower.

AUTO-ENROLMENT ENDS THE 20TH CENTURY

Parliament.uk now provides records of parliamentary debates in the future – prospective Hansard – as well as historic Hansard from the past. A quick search finds this interesting insight into how auto-enrolment will end means-testing, and see the state pension and National Insurance phased out.

Wednesday 11 December 2052, 2.30pm.

The Secretary of State for Savings and Longer Life (Mr. John Potter): Mr. Speaker, may I first pay tribute to the noble Lord, Lord Webb of West Bromwich, who is still, I believe, an active member of the other place, and whose foresight and vision led us to the happy situation we are in today. The latest Real Time Information from His Majesty’s Revenues show that in 2051/52 90% of all eligible people in work are paying in to a workplace pension scheme. And that of those retiring last year three quarters had a workplace auto-enrolment pension worth an average of £1083 a month.

At this time of year it is traditional for the Secretary of State for Savings and Longer Life to stand here and tell this House how much he – or, more often, she [hon. Members: Hear, hear] – plans to increase the state pensions paid to the generation who suffered greatly in the early 21^st century recessions and whom, we will all agree, deserve our gratitude for the hardships they bore to pull us out of the quagmire of deficit and debt which was left – and I say it quite frankly – by successive governments of all colours and of none.

That is why the state pension on which many older pensioners relied has been raised of late – after years of neglect by other parties – by more even than the 2.5% a year guaranteed by the triple lock, originally introduced by the noble Lord, Lord Webb and cleverly inverted by the Rainbow Alliance government in 2033.

But today I am pleased to announce that this ancient safeguard is no longer needed. The auto-enrolment system has been so successful that I can call a halt to these yearly, unfunded bonuses paid by hardworking families. And Mr. Speaker I can go further. The strength of the auto-enrolment scheme and the more than £1000 a month it provides – and for many it is of course a lot more than that – the £1000 and more a month it provides means that the Government can maintain the state pension at its current level of £1512 a month without decreasing the real incomes of pensioners overall. And those aged 72, now looking forward to their first pension payment, can do so knowing that they will be getting more in total than their older siblings got last year.

I can also announce that means-tested help with rates, rents, living costs, travel, prescriptions, 6G comms, and winter fuel, will also be phased out. Now that most pensioners rely on their own thrift, it would be unfair on them to provide a similar income for those who deliberately chose again and again to un-enrol from the pension opportunities first provided forty years ago.

At the same time I can announce a reform which has been many years – too many years for some – in the making. The old-fashioned and so 20^th century National Insurance scheme is to be wound up and its funds passed to the Chancellor to absorb in the national accounts. ….I give way to my hon. Friend

The Chancellor of the Exchequer (Ms Eloise Transom): If it is helpful Mr. Speaker I can inform the House that from 6 April 2053 the 14% National Insurance contributions paid by employees will be added to the general rate of income tax and the 15% paid by employers will be similarly subsumed into corporation tax.

The Secretary of State for Savings and Longer Life: I am grateful to my hon. Friend for that timely intervention. Because, Mr. Speaker, I can go further. In future years the increasing income of pensioners will be provided by the growth in the average auto-enrolment pension. By 2062 – in ten short years – that pension which they have proudly earned for themselves will exceed the value of the state pension until now generously provided by others.

Mr. Speaker, by the end of this century, which I hope I, if not Lord Webb himself [hon. Members: hear, hear, hear], may live to see, we can look forward to the time when the crushing and humiliating dependency on the state of our older people is but a distant 20^th century memory and the pension system of our great country is ready for the second half of the 21st century pride and self-reliance. A time in which our older people can stand tall and retire on an income which, even when it is less than they have now, they will at least know is all of their own making and not paid for by younger hard working families.

Mr. Speaker, my officials tell me that on the 200^th anniversary of the state pension, in 2108, this House – though probably not even I! – will also be able to celebrate its burial. That will be the ultimate achievement of auto-enrolment and the Noble Lord, Lord Webb [Hon. Members: hear, hear, hear. Cheers. Rowdy stamping].

Mr. Speaker: Order. The Motion is that in view of the success of self-reliance and auto-enrolment the state pension be frozen forthwith with a view to phasing out by 2108; the National Insurance Fund be wound up and the surplus absorbed in the national accounts; and National Insurance contributions be added to general taxation at their present rates from 2053/54.

Question put and agreed to.

Mitt's Tax Cut Mulligan

For some unknown reason, Mitt Romney dialed back his tax-cut plan yesterday, the same day new reports showed incomes are dropping.

Last month, median household income fell by about $500, and since Obama became president, income is down over $4,500. But under Mitt Romney’s 20 percent tax-cut plan, if he truly believes it and follows through with it, a married couple making $70,000 a year would save over $2,000. And take-home pay for a middle-class married couple earning about $140,000 -- with their tax rate dropping to 20 percent from 25 percent -- would increase by over $7,100. Obama has no such middle-class tax cuts.

So why would Governor Romney tell an Ohio crowd on Wednesday that they shouldn’t “be expecting a huge cut in taxes, ’cause I’m also going to lower deductions and exemptions.”

What is that all about? What kind of message is he sending? Is it pro-growth take-home pay? Or is he pulling back and hedging his bet?

I wrote in my last column about the potential benefits of the Romney plan. And I suggested that Romney should give specific examples of higher take-home pay from his tax cuts. And then I suggested that he draw a red line for middle-income taxpayers, and say “you will not lose you’re your deductions.” In other words, send a true growth message. And make it clear, not muddied.

This afternoon, one of the most senior people in the Romney-Ryan camp called me to say that Mitt misspoke, and that I should give him a mulligan. This person told me there’s no pull-back on the pro-growth tax-cut message, no new overemphasis on debt, and no departure from the Reagan-Kemp tradition.

Okay, even though I’m a tennis player, I’m willing to give Mr. Romney a mulligan. But I’ll say this: The growth message has to be crystal clear for the debate next Wednesday night. Mitt is slipping in the polls. People are confused about his message. He must clarify it.

Lower marginal tax rates. Higher middle-class take-home pay to offset lost income under Obama. More family financial resources. More growth and more jobs.

This doesn’t have to be so hard.

Just How Fragile is the U.S. Economy?

As if the looming "fiscal cliff" isn’t frightening enough, new results suggest it’s already doing very serious damage to the economy. And it’s only September.

According to a new survey released by the Business Roundtable, corporate America’s view of the economy is as bleak now as it was in 2009, when the economy was struggling to emerge from recession.

Also, the survey shows executives are now more likely to cut jobs over the next six months, and that companies are less likely to raise their capital spending.

Largely the CEOs who participated in the study cited the "fiscal cliff," or the confluence of tax hikes and spending cuts that could go into effect as soon as January 2013, as a major influence behind their decisions.

Dow Chemical CEO Andrew Liveris called the fiscal cliff a 'multiplier' that makes any negative catalyst that much worse.

As much as $500 billion in federal spending reductions and expiring tax cuts are due to take effect if Congress and the White House are unable to find a compromise on these issues by Dec. 31, 2012.
As a result, the CEOs also lowered their forecasts for U.S. economic growth.

“The government is failing us as a whole,” charged Liveris on The Kudlow Report. “This is self-inflicted uncertainty.”

They now expect real gross domestic product to rise 1.9 percent in 2012, down from a June forecast of 2.1 percent growth.

In turn, these concerns have already begun to ripple across the economy, and may in part explain the spate of lowered earnings forecasts from companies such as FedEx and Norfolk Southern.

The findings come less than two months ahead of the U.S. presidential election, in which the weak economy and stubbornly high unemployment are shaping up to be key elements in voters' choice between incumbent Democratic President Barack Obama and Republican challenger Mitt Romney.

The Romney campaign was quick to call out the results as a sign that Obama's economic policies were not working.

"Business leaders have the gloomiest outlook in three years and the President's failed economic policies of higher taxes and more regulations will only make things worse," spokesman Ryan Williams said in a statement.

The Obama campaign did not immediately respond to a request for comment.

“Whatever president and congress we get in November, it doesn’t matter. What matters is that we get one that gives us solutions,” said Liveris.

CEOs who participate in the Business Roundtable collectively generate $7.3 trillion in annual revenue and employ some 16 million people.

BEST LEARN YOUR PLACE

It is the first clause in the newly published verbatim rant of Chief Whip the Rt Hon Andrew Mitchell MP which I find the most offensive. To a police officer doing their job and following the security rules they had been told to follow – ‘Best you learn your f------ place’. Oh dear.

The real damage of this whole episode is, of course, the class one. We rule, you are ruled, oozes from every word. And not because we are elected, just because of who we are. Few things could be more damaging to the present Government.

Of course, Mr Mitchell (as he likes to be addressed) is correct that the police ‘don’t run the f------- Government’, and we would all fight (I hope) to keep it so, even avowed pacifists like me. But, appointed by us and given rules on security to keep our elected members safe, the police officer at that barrier did have the right to tell him which gate he was allowed to use. However annoying those petty rules may be, politicians of all people should follow them. If they want the rules changed then they have the power to make that happen.

And as for ‘you’re all f------- plebs’, that is a word that will haunt Mr Mitchell as long as he is in politics. Because it fits precisely the tone of the rant. In Rome ‘plebeians’ meant the mass of the people as opposed to the patrician class who ruled them. Back to ‘learn your place’. Sorry, ‘learn your fucking place’. I don’t wish to misquote the Rt Hon Andrew Mitchell MP.

Before the apparently full account by the officer was published in The Daily Telegraph dated 25 September, Mr Mitchell said "I am very clear about what I said and what I didn't say and I want to make it absolutely clear that I did not use the words that have been attributed to me." He also apologised again.

The Daily Telegraph account http://goo.gl/J2sV1