10 things to know about Roth accounts

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Business Week | By Kiplinger

Creating a tax-free stream of income is a powerful retirement tool. Here's the scoop on Roth IRAs and 401k's.

Tax-free income is a dream of every taxpayer. And if you save in a Roth account, it's a reality. Roths are the youngsters of the retirement savings world. The Roth IRA, named after the late Delaware Sen. William Roth, became a savings option in 1998, followed by the Roth 401k in 2006. These accounts offer big benefits, but the rules for Roths can be complex. Here are ten things you must know about adding a Roth to your nest egg.

Roths turn traditional IRA and 401k rules on their head. Rather than getting a tax break for money when it goes into the account and paying tax on all distributions, with a Roth, you save after-tax dollars and get tax-free withdrawals in retirement.

By accepting the tax breaks for traditional accounts, you accept the government as your partner. If you're in the 25% tax bracket, for example, 25% of all earnings will effectively belong to the IRS to be collected when you withdraw the money. With a Roth, 100% of all future earnings are yours.

The Roth strategy of paying taxes sooner rather than later will pay off particularly well if you're in a higher tax bracket when you withdraw the money than when you passed up the tax break offered by the traditional account. If you're in a lower tax bracket, though, the Roth advantage will be undermined.

To be able to contribute to a Roth, you must have earned income. And unlike traditional IRAs, if you're still working after age 70 1/2, you can keep contributing.

In 2014, you can stash up to $5,500 in a Roth IRA and an extra $1,000 if you're 50 or older.

But higher-income taxpayers are barred from contributing to a Roth IRA. For 2014, the ability to contribute to a Roth phases out if your adjusted gross income is between $181,000 to $191,000 for joint filers and between $114,000 to $129,000 for single filers.

You can make a 2013 Roth IRA contribution as late as April 15, 2014. You can contribute to both Roth and traditional IRAs, but the total cannot exceed the annual limit.

Many companies have added a Roth option to their 401k plans. After-tax money goes into the Roth, so you won't see the immediate tax savings you get from contributing pretax money to a traditional plan. But your money will grow tax-free. (Any employer match will go into a traditional 401k account.)

For 2013 and 2014, you can stash up to $17,500 a year, plus an extra $5,500 a year if you're 50 or older, into a 401k. Contributions must be made by December 31 to count for the current tax year, and the limit applies to the total of your traditional and Roth 401k contributions. A Roth 401k is a good option if your earnings are too high to contribute to a Roth IRA.

Another route to tax-free earnings inside a Roth is to convert traditional IRA money to a Roth. In the year you convert, you must pay tax on the full amount shifted into the Roth. That's the price you pay to buy tax freedom for future earnings. (If you have made nondeductible contributions to your traditional IRA, a portion of your conversion will be tax-free.)

If you expect your tax rate to be the same or higher in the future, converting could make sense; if you expect your future tax rate to be lower, it might not.

You'll want to pay the tax owed on a conversion with money outside of the IRA. Drawing money from the IRA to pay the tax will result in an additional tax bill, and a penalty if you're under age 59 1/2.

Look at the big picture if you plan a conversion. The added taxable income could boost you into a higher tax bracket. A big jump in income could trigger other taxes, too, such as the new 3.8% surtax on net investment income. For Medicare beneficiaries, a rise in adjusted gross income could result in premium surcharges for Part B and Part D.

A series of small conversions over several years could keep the tax bill in check. For instance, you may want to convert just enough to take you to the top of your current tax bracket.

Because there's no tax deduction for Roth contributions, you can retrieve that money at any time free of taxes and penalties, regardless of age.

But for earnings to be tax- and penalty-free, you have to pass a couple of tests. First, you must be 59 1/2 or older. You will get hit with a 10% early-withdrawal penalty and taxes if you take out earnings before you hit age 59 1/2. And you must have had one Roth open for at least five years. If you are 58 and opening your first Roth IRA in 2013, you can tap earnings penalty-free at age 59 1/2, but you won't be able to tap earnings tax-free until 2018.

There's a different rule for conversions. Read on.

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3 new ideas about retirement investing

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Business Week | By Kelly Greene, the Wall Street Journal

Some experts say it is time to rethink the nest egg. Here are three new strategies to your portfolio golden years-to extend, who prefer to have more shares.

Should experts begin, camp to rethink how much keeping people retired.

In general the new think, people more invested in equities, as of some traditional rules of thumb, such as such as subtract someone's age up to 100 to determine a portfolio allocation has suggested is should be. Man, that so much is new and controversial theory to claim that each other you should increase exposure, bearing moves into retirement.

What hangs in the balance: whether 78 million baby boomers can generate substantial enough yields, without to much risk, to create income, that last streams, as long as they do it.

Here are three different approaches that push financial experts that determine that people stronger investment in stock-should be even after you have collected the gold watch.

One of the biggest risks in dealing with investment, is to finance retirement, what risk has called "Sequence of returns". If you retire go and your investment big hit in the early years, you've been doing the money runs, withdrawals, years earlier than suffer if decent are earlier and later through a downturn.

To combat the problem, two researchers recently crunched the numbers and came to the conclusion that in many cases, investors recover their share ownership between 20 and 50 percent at the beginning of the pension and then ramp that, save it to a percentage of a year between 40 and 80 percent in the entire retirement number by phone should be. So leads, for example, a portfolio that starts at 30 per cent in shares and ends at 60% better on average than one that begins and ends with 60 percent shares.

Read more: 4 cheap newspaper stocks that could rebound

"You want to have has the lowest allocation, if your portfolio is greatest, and this will directly before and after retirement," Wade says Peacock, pensions Professor at who did the American College in Bryn Mawr, Pennsylvania, research with Michael Kitces, Director of research which "is Pinnacle Advisory Group in Columbia, MD., if you are particularly susceptible to wealth to lose. Once you switch to retire, one has so much ability to change your plans and make again."

The researchers describe their asset-allocation recommendation, as a "u-shaped glide path," where the stocks begin as a large part of the portfolio, reject, and be raised in the course of time. In the ideal case that researchers say they see integrated asset allocation by target date based their recommendation Fund, retirement dates and times in an attempt, providing investors with their investment objectives on autopilot, allowing their assignments, uses you, Peacock says.

But so far target date funds, best keep a fixed share of wealth in stocks through retirement, and you still a declining share in stocks. "you may have bad results available with a declining glide path into retirement," warns Peacock.

Kitces says: "When I say 'You will invest more in equities later in retirement,' everyone freaks out." But he and Peacock say retirees actual behavior in the past, if more people relied on traditional pensions, corresponds to their findings.

Peacock says people who invested in shares, finance their fixed costs with a combination of pension and social security and other pension payments sometimes much of the rest of its assets. So at the age and the remaining value of this fixed sources of income had gone back effectively, substantially more of their investments in stocks.

Read more: A less stressful way to invest in Asia

For years, many financial experts advised investors retired to weight their portfolios to bonds. Some now argue that the main underlying assumptions behind this recommendation is no longer applicable.

For one thing, says "We are ending a 30-year bull market in bonds," Lisa Shalett, head of the investment and portfolio solutions for Morgan Stanley Wealth Management. On the other hand, the investment horizon for most has extended pensioners from 10, along with the general rise in life expectancy for the US population to 30 years. And finally, the shift from pension plans to 401k retirement has more retirees depending on the investment gains for income.

"Put those three things together, and what he says is, we need a new approach," said Shalett. Bonds can no more than the driving motors in portfolios on counted that are three decades could have.

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Why your fund's 5-year returns are about to skyrocket

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| By Steven Goldberg, Kiplinger

When the market crash of 2008 fades into history, a lot of mutual funds will look more appealing. But remember, bear markets show what a fund is really made of.

Your stock funds' five-year returns are getting ready to double. Why? It's just a matter of the calendar: By Dec. 31, the stock market's disastrous 37-percent plunge in 2008 will no longer be part of funds' five-year records.

Of course, this calendar quirk won't put more money in your pocket. To the extent you were in stocks in 2008 or over the entire bear market, which sliced 55.3 percent from Standard & Poor's 500-stock index ($INX) from Oct. 9, 2007, through March 9, 2009, you almost certainly lost money -- quite possibly a lot of it.

But dropping '08 from the five-year figures will make a lot of funds look shinier and more appealing -- if you don't look further back than the past five years. Don't make that mistake.

Look at how returns can grow. At the end of August, the five-year annualized return for the S&P 500 was 7.3 percent. If you assume that the market will be absolutely flat from Sept. 1 until the end of this year (an approach I borrowed from Chuck Jaffe at MarketWatch.com), the five-year return for the S&P will swell to an annualized 14.5 percent. The table here shows returns and projected returns for the 20 largest actively managed stock funds.)

Of course, if the market tanks between now and year's end, the five-year numbers won't look quite so pretty. But it's extremely unlikely that stocks will lose anywhere near as much as they did in the last four months of 2008, when the S&P index surrendered 28.9 percent. And, assuming that the market doesn't collapse in early 2014, the five-year returns will continue to swell a while longer because the S&P 500 plunged 25 percent from the start of 2009 until the market bottomed on March 9 of that year.

The picture is even more dramatic for foreign-stock funds. Assuming that the MSCI EAFE, which tracks mostly large-company stocks in developed nations, is flat between Sept.1 and the end of 2013, foreign stock funds will look even hotter. The EAFE index returned only 2.1 percent annualized for the five years that ended Aug. 31. But if the index merely stays flat, the five-year annualized return will balloon to 9.6 percent.

Returns for emerging-markets funds will also inflate. At the end of August, the MSCI Emerging Markets index had returned an annualized 2.2 percent over the previous five years. If the index is unchanged for the rest of the year, the five-year annualized return will balloon to 12.9 percent.

I'm willing to bet that we're about to get bombarded with ads from mutual fund companies crowing about their funds' five-year returns.

But savvy investors shouldn't forget what happened to funds during the cataclysmic 2007-09 bear market. In my view, you learn more about a fund from a bear market than you do from a bull market. It's nice to own funds that beat the indexes in bull markets. But it's much more important to own funds that hold up better than the benchmarks in down markets. And the sad fact is that precious few funds can beat the averages in both bull and bear markets. For the most part, you have to pick your poison.

With that in mind, look at the funds in the aforementioned table. It's easy to separate the riskier funds from the safer ones. Dodge & Cox International Stock (DODFX), which lost 62.3 percent, and Dodge & Cox Stock (DODGX), down 62.1 percent, top the bear-market losers. That's a large part of the reason they're on my avoid list. (In this matter, my views diverge from those of the editors of Kiplinger's Personal Finance; both funds are members of the Kiplinger 25.)

I think you should be more forgiving of two other big losers among the foreign funds: Harbor International (HAINX), down 57.9 percent, and Oppenheimer Developing Markets A (ODMAX), off 56.3 percent, because they lost less than their benchmark indexes. Both are quality funds (although you may have to pay a commission to buy the Oppenheimer fund).

On the positive side, Vanguard Health Care (VGHCX) lost just 35.5 percent, which not only shows the defensive characteristics of this sector but also speaks well for the fund.

But the two diversified funds that held up best in the bear market, Fidelity Contrafund (FCNTX) and Vanguard Primecap (VPMCX), both off 47.8 percent, are the real winners here. I don't know how Fidelity's Will Danoff continues to put up great numbers with $97 billion in assets, but he does. Similarly, Primecap Management Company, which runs the Vanguard fund, is managing a boatload of money in the same style in several different funds, but it does so superbly.

The bottom line: Stock funds got a true stress test during the bear market. Their sponsors want you to forget those big losses. But in picking funds, this is a number to always keep in mind. Five-year returns are informative, too. But they change, sometimes dramatically, for reasons that have nothing to do with what their managers have done lately.

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Is the market about to go bust?

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Are we in bubble territory again?

The talk that financial markets have created or are creating another bubble has gotten louder with every upswing of the Dow Jones Industrial Average ($INDU) and the Standard & Poor's 500 Index ($INX). We're in uncharted, all-time-high territory, and that has increased worries that we're about to see a replay of the busts of 2000 and 2007.

How worried should we be?

I think worries about the stock market, in particular the U.S. stock market, are overstated at this point.

That doesn't mean, however, that we shouldn't worry about certain parts of the financial market. In particular, I'm worried about the parts of the fixed-income market where traders and investors seem willing to overlook risk if they can just pick up a bit of yield.

Growth is indeed anemic in the much of the world, and China doesn't appear to be willing to step up its economic-stimulus program to return to the days of 10% annual GDP growth. (That's a good thing, by the way.)

But as long as the world's central banks keep pumping money into financial markets, I think equity prices have decent support at recent levels.

I wouldn't call anything cheap here; some individual stocks are overvalued, and I think that some technical measures are close to calling this market overbought. But I don't see anything like the mania of 1999, when analysts fell all over themselves to see who could raise the target price for Amazon.com (AMZN) the most for any given day.

Jim Jubak

As far as hype goes, this is still a relatively subdued market. For example, at $26.68, the May 10 closing price, Facebook (FB) is still more than $11 below its initial public offering price of $38.

To get a 2000- or 2007-style bust, we'd need to see central banks go from net providers of cash -- rally enablers -- to net withdrawers of cash -- rally killers. And I just don't see that yet, even in the United States.

However, saying that we're not likely to see another stock-market bust of the 25%-or-more variety doesn't mean I think we won't get a more modest pullback. The U.S. stock market is on the verge of moving into overbought territory and looks increasingly vulnerable to a mild 3% to 7% retreat.

The European stock market seems to be on shakier footing. European stock markets have rallied recently, even though many of Europe's biggest companies have reported disappointing first-quarter earnings and have guided investors to expect lower revenue for the rest of 2013. Expectations were low going into the first quarter, and yet 59% of the companies that have reported so far have missed consensus projections.

Looking ahead, Siemens (SI) and Alstom (ALO.FP in Paris) have cut forecasts for 2013. Alstom, for example, cut its forecast for three-year sales growth to 5% from an earlier 8%. This week, data from eurozone economies are expected to show that gross domestic product for the group dropped in the first quarter. That would mark a sixth consecutive quarter of contraction.

On the equity side, though, I think the risk profile is highest for stocks in emerging markets. That's not because these economies are showing particularly lackluster growth (well, Brazil is) but because, on recent form, when investors get nervous about risk, they sell emerging-market equities first.

In any stumble in the U.S. or European markets or economies, the biggest damage to stocks is likely to be not in those markets -- in fact, U.S. stocks could climb on a rise in worries about global growth because the U.S. markets and the dollar are the safe havens of the moment -- but in such markets as Brazil, China, the Philippines, Indonesia and Turkey.

As perverse as it may seem, if you're worried about a dip in U.S. markets, you should probably start your thinking about what to sell among your emerging-market holdings. (And given that these stocks are likely to fall hardest in any U.S. dip, emerging markets should be at the top of your buy list once fear has taken its toll.)

As I said, though, my biggest worries aren't on the equity side.

If you're looking to make an argument for a bust (and not just a dip), I think you have to look at the fixed-income side.

I'm not worried about such deep, plain-vanilla markets as that for U.S. Treasurys. In fact, recent news suggests that Treasury prices at the short-end of maturities might be set to rise over the summer months.

Forecasts from the Congressional Budget Office say that-- thanks to spending cuts, tax increases and a recovering U.S. economy -- the 2013 budget deficit, at $845 billion, will be the smallest since 2008. That's likely to lead to a reduction in the number of notes with maturities of five years or less that the Treasury offers for sale. The reduction, if there is one, could come as soon as the July auctions. Fewer Treasurys for sale at a time when global investors are looking to buy dollar-denominated assets would likely result in higher prices (and lower yields) on Treasurys.

I'm not even especially worried about eurozone bond markets, where yields for Italian and Spanish debt have held steady in recent auctions. A few more editorials by German Finance Minister Wolfgang Schauble like that in Monday's Financial Times (registration required) might change that. (In the piece, Schauble argues that the treaties governing the eurozone are not sufficient to support current plans for creating a eurozone-wide authority to rescue or shut down weak banks.) However, as long as the financial markets believe that the European Central Bank guarantees the euro, I don't think these markets are likely to see a spike in yields and a collapse in prices.

If you're looking for danger in the fixed-income markets, I think you need to look at far-less-liquid markets, where prices are far more volatile and are near historic highs.

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School fires a pregnant woman about sex before marriage

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In October, says Teri James her superior at San Diego Christian College, she called to her Office and got quickly to the point: James was pregnant?

James, 29, El Cajon, California, was actually pregnant - and it was a violation of the rules of the school, also unmarried, according to the lawsuit, the she in San Diego County Superior Court. She says she was fired because the termination letter contain in the suit called: "Teri activity pursue not within the scope of the Guide and Community Association, which the College mission cannot be created."

By phone with her attorney, Gloria Allred, James said that she felt humiliated.

"I had to leave directly after the meeting. "I was in the Office with all of my employees go and say that I am", James said. "I never came back, so I don't know thought what my staff, but for me, it was humiliating. I felt like in difficulties."

Also insulting, James said, was that after they fire the school offered a job her then-fiance - they are now married, even though it knew that he, exert even premarital sex. He the job has not adopted, she said.

Filing the lawsuit, James joins a group of women, who dismissed the religious schools, which have complained in recent years for pregnancy outside of marriage. In any case, the school pointed to moral codes, "community alliances" and manuals, staff, every year must sign much promising school usually to comply with rules.

San Diego Christian College requires that its employees sign its "community Covenant", a two-page contract, which asks its community, staff and 500 students on-site includes, to refrain from drugs, alcohol and tobacco "abusive anger, malice, jealousy, lust, sexually immoral behavior including premarital sex, adultery, pornography and homosexuality, evil desires and prejudices based on race, gender or socio-economic status."

"We all had to sign," said James. "I needed a job in this economy and so I never thought that something would - happen I needed just a job."

Allred added: "it says not, that you be triggered if you do not meet."

San Diego Christian College did not respond to repeated requests for comment. The College has not responded to the lawsuit.

James, who had worked at the College grants for two years as a specialist, signed the letter in August, weeks before she became pregnant. She is currently six-and-a-half months pregnant with a boy, due in June.

In the last two cases from Ohio to say two moms-to-be that they were fired by Catholic schools, after they said the principals in their schools, you are pregnant.

Kettering, Ohio Ascension Catholic School was first class teacher Kathleen Quinlan in the fall of 2011 with twin girls pregnant. Four days after Christmas in the same year was she told that they lose their job they would be filed after a complaint in December in U.S. District Court in Southern Ohio.

The lawsuit notes that Quinlan was no ordinary priest and that it led to no children in prayer. The point like random, but involves the Supreme Court a reference to a unanimous decision in the year 2011, Hosanna Tabor v. EEOC handed down. The High Court dismissed a lawsuit by Christian school teacher, who claimed that she was discharged for a disability, say that churches and their schools can choose their believers will serve.

Court records include Ascension school letter to Quinlan, which stated that she was dismissed because they were not observed the teachings of the Catholic Church. But her suit says that her sex of her release, she played a large role because it is not obvious if men have sex before marriage.

The Roman Catholic Archdiocese of Cincinnati filed a response to the lawsuit this week, admitting that her church leaders had said that she was pregnant and that she was fired for a breach of contract.

In the nearby Cincinnati, Ohio, Christa slides, which oversaw computer systems at Holy Family and St. Lawrence schools, became pregnant by artificial insemination. After the 2011-suit, which they in U.S. District Court filed, she says that she was dismissed because the church officials said that artificial insemination is a violation of the teachings of the Church.

The Court passed its decision last month, not in slides favor because she very had to experience with a long-term female partner, a violation of the Treaty, which she said that the Church had violated. But the Court found that they could be viewed no Ministers because they are not Catholic and was not responsible for the ru. The Court said it was not enough, call to her a role model, simply because it was attached to a religious school.

A school can fire so an unmarried, pregnant woman?

Simply put, Yes, if she violated a school contract. But it has not clear cut, as these claims not settled case-law, Spokeswoman Christine Nazer said the U.S. equal employment opportunity Commission by e-Mail.

An organization may require not to engage employees in premarital sex but can not fire her because she is pregnant, Nazer said.

Back in San Diego County, James says that she hopes that the action will change the lives of women employed by Christian organizations.

"I want to say the way, prepare Christian organizations, you can not to fall back," she said. "You can not people like this damage. "If you say that you love and mercy and Gnade--are you are for those who are weak."

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Time Inc. begins reducing its staff by about 6%

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Patrick Rizzo , NBC News – 1 day

Time Inc. is reducing its work force by six percent -- about 500 jobs, an internal memo to the publishing company's staff said on Wednesday.

"Today we are beginning the painful process of reducing our global staff of 8,000 by approximately six percent," began the memo, from CEO Laura Lang, a copy of which was emailed to NBC News. Earlier Wednesday, the Wall Street Journal's "All Things D" blog published a copy of the memo.

The number of layoffs was not as much as had been rumored in press reports recently, which were predicting as many as 700 workers would be let go from the company that publishes the venerable news weekly Time Magazine, Sports Illustrated and People magazine.

The cuts come as the industry struggles to find a business model that will stop the loss of revenues through declining subscriptions and advertising.

Time Inc. is a divison of Time Warner Inc.

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Fed concerned about stimulus side effects

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WASHINGTON -- Federal Reserve officials are increasingly concerned about the potential risks of the U.S. central bank's asset purchases on financial markets, but look set to continue its open-ended stimulus program for now.

Minutes from the Fed's December policy meeting showed a growing reticence about further increases in the central bank's $2.9 trillion balance sheet, which it expanded sharply in response to the financial crisis and recession of 2007-2009.

"Several (officials) thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet," the minutes said.

Wall Street picked up on the report's hawkish tone, with stock prices drifting lower after the announcement, while the dollar extended gains against the euro.

"The minutes of the Federal Reserve's December monetary policy meeting revealed a somewhat surprising level of concern among the ranks of central bankers regarding the long-term impact of the bank's asset purchase program, or quantitative easing," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.

Still, the Fed appeared likely to continue buying assets for the foreseeable future, having announced in December it was extending monthly purchases of $40 billion in mortgage securities and also buying $45 billion in Treasuries each month.

A few of the voting members on the central bank's policy-setting Federal Open Market Committee thought asset buying would be warranted until about the end of 2013. A few others highlighted the need for further large-scale stimulus but did not specify an amount or time frame.

Fed officials generally agreed that the labor market outlook was not likely to improve without further nudging from the monetary authorities.

The U.S. economy expanded a respectable 3.1 percent in the third quarter on an annualized basis, but growth is believed to have slowed sharply to barely above 1 percent in the last three months of the year.

Data on Thursday showed a solid gain of 215,000 new private sector jobs for December, while analysts polled by Reuters last week were looking for a rise of 150,000 new jobs in the Labor Department's official survey, due out on Friday.

In the December meeting, the Fed also launched a new framework of policy thresholds, numerical guideposts that are supposed to give markets and the public a clearer idea of how policymakers will react to incoming economic data.

Officials say they will keep interest rates near zero until the unemployment rate falls to 6.5 percent for as long as estimates of medium-run inflation do not exceed 2.5 percent.

The minutes suggested it took officials some time to build a consensus around the idea.

"A few participants expressed a preference for using a qualitative description of the economic indicators influencing the Committee's thinking," the minutes said.

U.S. unemployment has come down steadily after hitting a peak of 10 percent in late 2009, but remains elevated at 7.7 percent.

Fed officials noted worries about the looming "fiscal cliff," which was dealt with only partly in an agreement earlier this week, were hurting the confidence of businesses and households.

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Wall Street increasingly bullish about 2013

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Jeff Cox , CNBC.com

Even the bears are bullish for 2013, a year in which virtually every Wall Street expert believes the market will overcome its many headwinds and post a positive year.

While retail investors have been preoccupied with worries over fiscal armageddon, an election that is now past and a global economy nearing stall speed, strategists have been busy with projections that see sizeable stock gains.

Their reasons: A U.S. economy that is on the mend due to the nascent housing recovery and an expected surge in earnings, more cheap money from the Federal Reserve, and a general feeling that none of the various-worst scenarios out there will come to fruition.

"At first blush, it seemed like an inopportune time to commit to a year-ahead target and outlook, what with so many global uncertainties in our path," said Sam Stovall, chief equity strategist at Standard & Poor's/Capital IQ. "But most of these uncertainties have been with us for quite some time, and are now regarded by many as annoyances to resolve rather than obstacles to fear."

The firm is near the high end of the pack, projecting a 1,550 close for the S&P 500 by the end of next year, a nearly 11 percent rise from current levels.

Obstacles such as the "fiscal cliff" of automatic spending cuts and tax increases that will take effect if Washington fails to reach deficit-reduction targets worry Stovall, but he believes that issue, as well as the debt crisis and recession in Europe, won't stop stocks.

"We believe the manner in which these headwinds are resolved could result in an explosive rally rather than just a sigh of relief," he said. "Yet, handled inappropriately, these could end up causing a low flying economy to crash."

While not predicting an outright crash, Adam Parker, chief market strategist at Morgan Stanley, had through the year been predicting the market to swoon lower from a lackluster 2011.

But his projection of an 1,167 for the S&P 500 has virtually no chance of happening absent a colossal stock market event.

For 2013, Parker has changed his tune.

"We wish we didn’t have to set a year-end target. Having had a very accurate one in 2011 and a pretty bad one in 2012, we are living proof that there is a negative asymmetry," he said in the firm's 2013 outlook. "We felt little joy in 2011 and lots of pain in 2012 related to the target, and find few credible investors really care where we think the market is going to be on a particular day one year in the future.

"What they more often care about is the logic and thought process, and the empirical evidence that support it."

Parker sees a modest 2013 rally driven by mega-cap dividend stocks and a rebound in China, as well as a broader picture of rising earnings.

His S&P 500 call is for "low- to mid-single-digit upside" with the S&P 500 closing at 1,434.

"We have been cautious on US equities for much of the last two years," he wrote in his analysis. "Our concerns around U..S deficit/debt and the obvious borrowing from the future that occurs from unconventional policy, the European sovereign crisis, and slower growth in emerging markets generally remain, but the acuteness of these issues appears for now to be less sharp."

While that's not exactly wide-eyed bullishness, it is enough to make contrarians think that sentiment could be getting a little overheated on Wall Street.

"The reasons we're skeptical of it being able to break to new highs is, first of all, everybody's bullish," said Walter Zimmerman, senior technical analyst at United-ICAP in Jersey City, N.J. "The readings are consistent with those at a major top."

Still, even someone normally as bearish as Zimmerman thinks the near-term direction is higher, though he doesn't see a sustained rally through next year.

That's not the case at Canaccord Genuity, which has one of the most bullish calls yet at 1,650, with only Piper Jaffray's 1,700 higher thus far.

"History, global monetary policy, and the fundamental sweet spot of U.S. economic data argue strongly for better performance as we move...into next year," Canaccord's Tony Dwyer and Michael Welch said.

Deutsche Bank, meanwhile, remains bullish with a 1,500 call. The firm is "encouraged by the continued intention of central banks to maintain accommodative policy" and believes that "given current market pricing, equities continue to offer the best risk-adjusted return compared to other asset classes."

And Bank of America Merrill Lynch, whose 1,450 for 2012 remains very much in play, believes the S&P 500 will close out the coming year at a 10 percent rise from its projected finish for the current year.

"We are cautious on the near-term outlook for US equities, but we remain constructive on the medium to longer term outlook," Savita Subramanian, equity and quant strategist at BofA, said in a note. "Given the S&P 500's attractive valuation and weak investor sentiment, we expect positive earnings growth to drive the market to 1,600 by the end of 2013."

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Consumers fret about paychecks, upbeat about jobs

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Americans turned less optimistic about the economy in early February on worries about falling income even as their outlook on the jobs market rose to a record high, a survey released on Friday showed.

The Thomson Reuters/University of Michigan overall index of consumer sentiment fell to 72.5 in early February from January's 75.0, which was the highest level since February 2011.

The latest figure fell short of the median forecast of 74.5 among economists polled by Reuters.

"The personal financial situation of consumers remained dreary," survey director Richard Curtin said in a statement.

An improving financial situation was reported by just 23 percent of all consumers surveyed in early February, down from 29 percent in January and last year's 30 percent.

One in four families reported declines in income in the early February survey.

While more households were worried about shrinking paychecks, they reported a record level of optimism about job prospects. Last week, the U.S. Labor Department said the monthly jobless rate fell to 8.3 percent in January, a near three-year low.

"More consumers spontaneously mentioned hearing about increases in employment and job opportunities than ever before recorded in the long history of the surveys," Curtin said, adding that positive reports of job growth set a record in early February as they have doubled over the past three months.

The survey's barometer of current economic conditions fell to 79.6 in early February from 84.2 in January. Analysts had expected a figure of 84.5.

The gauge of consumer expectations dipped to 68.0 from 69.1. January's figure was the highest level since May 2011 and for February, analysts had predicted an even higher reading of 69.5.

In an uncertain economic climate, consumers shaved their short-term inflation outlook, but raised their expectations on long-term inflation.

The survey's expectations for one-year inflation slipped to 3.2 percent from 3.3 percent in January, while the survey's five-to-10-year inflation outlook rose to 2.9 percent, matching the level set a year ago, from 2.7 percent in the previous four months.

Copyright 2011 Thomson Reuters.

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U.N. official: G20 meeting should be about jobs

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CANNES, France — The head of the U.N. labor agency says world leaders gathering for the Group of 20 summit must shift their focus to creating jobs if they want to head off an alarming increase in social unrest around the globe.

The International Labor Organization's director-general, Juan Somavia, told the Associated Press on Tuesday that just as governments in the U.S., Europe and elsewhere have sought to increase confidence in financial markets, "we also have to give confidence to the people."

Somavia says jobs and social protection have "to be the central element" of whatever policies leaders agree on at the two-day summit beginning Thursday.

"We need to give confidence to markets, it is necessary but people are on the streets, there is an enormous level of discontent," Somvia said. "We also have to give confidence to people and I would say recover the trust of people."

Earlier Tuesday the Geneva-based ILO released a report saying the global economy is close to a deeper jobs recession, and warned of growing social unrest, especially in Europe, Arab countries and Asia.

The study found that it will take at least five years for advanced economies like the U.S. and Europe to return to pre-crisis levels of employment, a year longer than the ILO forecast last year.

"Two thirds of the developed countries, half of the emerging and developing countries, have a slowdown in employment creation. That's the bottom line," Somavia said. "It's a serious question that the G20 leaders will have to face."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Wary about Iran, Obama lobbies Russia and China

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HONOLULU — Searching for help, President Barack Obama lobbied the skeptical leaders of Russia and China on Saturday for support in keeping Iran from becoming a nuclear-armed menace to the world, hoping to yield a "common response" to a crisis that is testing international unity.

Yet Obama's talk of solidarity with Russian President Dmitry Medvedev and Chinese President Hu Jintao was not publicly echoed by either man as Iran moved anew to the fore of the international stage — and to the front of the fierce U.S. presidential race.

Obama, at home in Hawaii and holding forth on a world stage, also sought to show aggressiveness in fixing an economy that has weakened his standing with voters. He pushed Hu about American impatience with China's economic policy, touted the makings of a new pacific trade zone and showered attention on the lucrative Asia-Pacific export market.

The United States' vast worries about Iran grew starker with a report this week by the U.N. atomic agency that asserted in the strongest terms yet Iran is conducting secret work with the sole intent of developing nuclear arms. The U.S. claims a nuclear-armed Iran could set off an arms race among rival states and directly threaten Israel.

Russia and China remain a roadblock to the United States in its push to tighten international sanctions on Iran. Both are veto-wielding members of the U.N. Security Council and have shown no sign the new report will change their stand.

With Medvedev on the sidelines of an Asia-Pacific summit here, Obama said the two "reaffirmed our intention to work to shape a common response" on Iran.

Shortly after, Obama joined Hu, in a run of back-to-back diplomacy with the heads of two allies that hold complicated and at times divisive relations with the United States. Obama said that he and the Chinese leader want to ensure that Iran abides by "international rules and norms."

Obama's comments were broad enough to portray a united front without yielding any clear indication of progress. Medvedev, for his part, was largely silent on Iran during his remarks, merely acknowledging that the subject was discussed. Hu did not mention Iran at all.

White House aides insisted later that Russia and China remain unified with the United States and other allies in preventing Iran from developing nuclear weapons, and that Obama, Hu and Medvedev had agreed to work on the next steps. Deputy national security adviser Ben Rhodes said the new allegations about Iran's programs demand an international response, and "I think the Russians and the Chinese understand that. We're going to be working with them to formulate that response."

As the president held forth on the world stage in his home state, Republicans vying to compete against Obama for the presidency unleashed withering criticism in a debate in South Carolina. It was a rare moment in which foreign policy garnered attention in a campaign dominated by the flagging U.S. economy.

"If we re-elect Barack Obama, Iran will have a nuclear weapon. And if you elect Mitt Romney, Iran will not have a nuclear weapon," said Romney, the former Massachusetts governor. Minnesota Rep. Michele Bachmann warned that Iran's attempt to develop a nuclear weapon is setting the table "for worldwide nuclear war against Israel."

Iran has insisted its nuclear work is in the peaceful pursuit of energy and research, not weaponry.

U.S. officials have said the report by the International Atomic Energy Agency was unlikely to persuade China and Russia to support tougher sanctions on the Iranian government. But led by Obama, the administration is still trying to mount pressure on Iran, both through the United Nations and its own, for fear of what may come should Iran proceed undeterred.

More broadly, Obama sought Saturday to position the United States as a Pacific power determined to get more American jobs by tapping the explosive potential of the Asia-Pacific.

For businesses, he said, "this is where the action's going to be."

"There is no region in the world that we consider more vital than the Asia-Pacific region," he told chief executives gathered for a regional economic summit.

The president went so far as to saying the United States had grown "a little bit lazy" in trying to attract business to the United States.

Obama's aides said he was blunt with Hu in expressing concern about China's undervalued currency, which keeps its exports cheaper and U.S. exports to China more expensive.

Deputy National Security Adviser Mike Froman said Obama made it clear that Americans are growing "increasingly impatient and frustrated" with the state of change in China economic policy. China had a $273 billion trade surplus with the U.S. last year and U.S. lawmakers say the imbalance hurts American manufacturers and taken away American jobs.

Underscoring the search for some good economic news ahead heading toward a re-election vote, Obama announced the broad outlines of an agreement to create a transpacific trade zone encompassing the United States and eight other nations. He said details must still be worked out, but said the goal was to complete the deal by next year.

"The United States is a Pacific power and we're here to stay," Obama said.

The eight countries joining the U.S. in the zone would be Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Obama also spoke with Japanese Prime Minister Yoshihiko Noda about Japan's interest in joining the trade bloc.

In a sign of potential tension with China, Froman shrugged off complaints from China that it had not been invited to join the trade bloc.

He told reporters that China had not expressed interest in joining and said the trade group "is not something that one gets invited to. It's something that one aspires to."

Addressing the European debt crisis, Obama said he welcomed the new governments being formed in Greece and Italy, saying they should help calm world financial markets. Obama's ever increasing attention to the Asia-Pacific is driven in part by Europe's own financial woes and the U.S. need to get more aggressive in tapping its export options.

Obama will be in Honolulu through Tuesday, when he leaves for Australia before ending his trip in Indonesia.

___

Associated Press Writer Erica Werner in Honolulu contributed to this report.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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James Murdoch: I didn't know about phone hacking

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LONDON — He didn't see. He wasn't told. He didn't know.

Called back to Britain's Parliament after former News Corp. employees challenged his credibility, senior executive James Murdoch insisted he'd been kept in the dark about widespread phone hacking at his now-defunct News of the World tabloid, blaming two of his senior lieutenants for failing to warn him of the paper's culture of criminality.

"None of these things were mentioned to me," he told an often-skeptical House of Commons' media committee.

Over more than two-and-a-half hours of questioning, Murdoch stuck to that line.

"It was not shown to me," he said of an explosive email which implicated one of his top reporters in phone hacking.

"It didn't occur to me to probe further," he said when quizzed about the legal advice his subordinates had supplied him.

"It didn't seem necessary for me to ask for a copy," he said of a seven-page document warning of overwhelming evidence of illegal behavior at his company.

Speaking quickly and confidently, Murdoch laid the blame at the door of former News of the World Editor Colin Myler and former in-house lawyer Tom Crone, both of whom resigned soon after the scandal broke earlier this year. Over the past few months, the pair have challenged the credibility of their former boss, accusing the 38-year-old News Corp. executive of not telling the truth when he claimed they never told him about the incriminating email back in 2008.

Murdoch made one important concession to their version of events — acknowledging that he'd been briefed on the incriminating email back in 2008 — but insisted that its importance was kept from him.

"What never happened is Mr. Crone and Mr. Myler showing me the relevant evidence, explaining to me the relevant evidence — and its relevance — or talking about wider spread criminality," Murdoch said. "That simply did not happen."

In a statement, Crone attacked Murdoch's testimony, insisting that he hadn't misled lawmakers.

"At best, his evidence on the matter was disingenuous," he said of Murdoch's comments. He did not immediately return calls seeking further comment.

Myler's telephone number is unlisted, and a letter sent to him more than a month ago has gone unanswered.

Murdoch's solo performance was far less dramatic than the July 19 hearing at which his 80-year-old father Rupert Murdoch repeatedly banged the table to back his points. Although the navy-suited James Murdoch showed flashes of annoyance — occasionally starting his answers with "as I testified earlier" or "as I answered earlier" — he kept his cool, even when Labour lawmaker Tom Watson described him as a bumbling crime lord.

"You must be the first mafia boss in history who doesn't know he's at the head of a criminal enterprise," Watson said in what sounded like a carefully crafted sound bite.

Murdoch, stony-faced, dismissed the comment as inappropriate.

He struck an apologetic tone when questions steered him toward his company's failure to get to grips with the scandal. He said executives at the company had given assurances, and that the company "relied on those assurances for too long."

"I'm sorry for that," he said.

He also apologized for the use of a private investigator to tail the lawyers of phone hacking victims, calling the practice "appalling."

James Murdoch runs News Corp.'s European and Asian holdings and remains tipped to succeed his father at the helm of the global media conglomerate. Thursday's appearance was mandated by lawmakers investigating the industrial-scale espionage at the News of the World, the exposure of which has already forced the paper's closure and scuttled a multibillion pound (dollar) bid for full control of satellite broadcaster BSkyB.

More than a dozen journalists at News International, News Corp.'s British newspaper subsidiary, have been arrested, and several executives, including The Wall Street Journal's publisher, Les Hinton, have resigned.

Although the media committee's investigation isn't as serious as the ongoing police investigation — its recommendations are nonbinding — Murdoch still needed to put on a strong show. Investors have become increasingly restive as the scandal continues to spread, and analysts say Murdoch's position as heir apparent to his father's company is under threat.

Paul Connew, a media consultant and former tabloid editor, said he believed Murdoch had given a mixed performance.

"Polished to a certain extent, but again suffering from the amnesia factor," he said.

The media committee wouldn't be calling Myler or Crone back for more testimony, Chairman John Whittingdale told reporters after the hearing. He said the committee's lawmakers had already heard from the pair and would now be weighing whose version of events to believe.

"It is plain that the two accounts we've heard, one of them cannot be true," he said.

Connew warned that even if Murdoch's reputation isn't damaged by the report, he would not be home free. A judge-led inquiry into Britain's media could call him back to the U.K. for more questioning. And detectives could dredge up more damaging revelations.

Lawmakers suggested as much Thursday, with one asking whether Murdoch was aware of any phone hacking at The Sun, the News of the World's sister paper and currently Britain's biggest selling daily.

Murdoch refused to say, citing an ongoing investigation.

Asked whether he would close The Sun if evidence of phone hacking emerged there, he declined comment.

Separately, Scotland Yard chief Bernard Hogan-Howe announced Thursday that police were working their way through some 300 million emails from News International.

Some 120 officers and staff are investigating the phone hacking scandal. The force said it had contacted less than a third of the News of the World's nearly 6,000 potential victims.

© 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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About happy be - low U.S. taxes

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Think you pay too much in taxes? It could be worse. Could life in Denmark.

How your hard-earned money to the good people on the internal send revenue service, can help a new report by the Organisation for economic cooperation and development, take some of the sting out of writing, check.

The Paris-based group that tracks the economies of 34 Nations found that the strain is developed for the U.S. taxpayer only of the lowest in the world.

Entrepreneurs see their calling in medical pot as the national organization for the reform of marijuana laws organization at its national conference in Denver of this week celebrates its 40th year as the largest pro-marijuana, have hundreds of "Ganjapreneurs" share stories and tips gathered. Her career: Tough summer job market life Inc.: Office bullying is five houses for $500,000 or less to Empire

At first glance looks similar to America's top rate of 35 percent of the prices paid by other developed countries. However, the top marginal rate is; typical married couple with two children pays only 13.7 percent of total income taxes (down from about 20 percent in the year 2000), according to the OECD.

That compared with 35 percent comparable household income in Denmark. The average rate for the 34 developed countries, the OECD Membersfor were similar was 26 percent. (All figures are for the year 2009).

But our Danish family is not done yet:, that rate is 35 percent only for income taxes. How many European countries, impose Denmark also a value added tax - a kind of value added tax on a wide variety of were and services. 25 Percent, Denmark's VAT is the highest in Europe.

Additional taxes to take - such as a tax of 70 cents per litre wines - and you find on the highest tax burden in the developed world.

So-called "sin taxes" are everywhere in the developed world, but Scandinavian countries seem particularly susceptible to wine control: Sweden and Norwegians pay about $5 per litre of wine. Japanese smokers pay more than 60 cents per cigarette, according to OECD data.

All in the tax burden in Demark consumes approximately 48 percent of the country's GDP. In the United States, the load is about half that with 24 percent of GDP goes towards control. This is the United States at the lower end of the tax burden between the developed countries.

European Governments have some of the highest tax burden in the world: Sweden numbers control 46 per cent of GDP; France 42 percent is 37 percent of the Treasury and German figures. Canadians (31%), Japan (28 percent) and Australian (27 percent) have a higher tax burden than Americans.

If you are looking for a lower tax burden, you should head south of the border. Chile (18.2 percent) and Mexico (17.5 percent) are to devote only two OECD countries, which control a small proportion of GDP than the United States.

On the other hand, if you really hit control want to, you need to find out, one way to a citizen one of the oil-rich Gulf States, for the numbers of the Heritage Foundation.

The richest of all, Saudi Arabia, will control which consume only 6.6% of GDP. Thanks to a steady supply of petrodollars to pay Government expenditures are also single-digit share of GDP in Iran (6.1 percent), Nigeria (5.9 per cent), Qatar (4.9 percent), Bahrain (4.8 percent), Libya (3.4%), Oman (3 percent) and the United Arab Emirates (1.8 percent) control.

In Kuwait, the tax burden is only 1.5 percent of GDP - seems hardly value needed the money to the pick up.

© 2011 msnbc.com reprints

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Sienna Miller, others still complaining about phone hack

3:04 AM about, complaining, Miller, others, phone, Sienna, still No Comments

Apology and offer of compensation were not satisfied with the newspaper LONDON - prominent British, who said on Saturday they accuse a tabloid hacking in their phone messages.

The news of the world has recognized, the interception of voice mails from public figures and says that it is compensation for an unspecified number of "legitimate claims."

But the recording has to stop little to a scandal, rattled the political establishment Britain and Rupert Murdoch's media empire has done.

A lawyer of Sienna Miller - one who sued the paper - said several prominent actress has dropped their lawsuit against the news of the world that "outrageous violation of privacy." not throws her lawyer Mark Thomson said Miller is waiting for more information from the newspaper before you decidethat was what to do.

Miller throws the newspaper access to their voicemails repeatedly in the course of a year and the information for stories about them, their family and their former partners, Jude Law.

For many years maintained the news of the world, that hacker to two rogue employees had limited 2007 for the listening to voicemail messages royal employees, including some links from Prince William and Prince Harry were arrested.

But admitted at the Friday parent company news international liability in some cases and said that "past behavior in the world in terms of voice mail messages to catch real regret is."

The apology was able to bring not the paper critics - and the powerful owner, Murdoch.

Former Deputy Prime Minister John Prescott, who is claiming that his phone was hacked, said the British Government should Murdoch stop from the complete control of satellite broadcaster British Sky Broadcasting Group PLC to the hacking problem solved.

The Government has plans of Murdoch's News Corp., the 61 percent of the BSkyB to buy, that he has not already, on the condition that it spin off the sky news channel is approved as an independent company.

"I say this to the Government - not you car make this announcement, while the (the House) Commons and (House of) Lords are in recess, unless you have made a correct assessment of this company," Prescott said.

The Department for culture, media and sport, said the final decision on the merger is based "on media plurality problems alone" and would not be affected by the hacker scandal.

Ed Miliband, leaders who labour party opposition said the newspaper had acknowledged serious misconduct, and he called for police to investigate "how far beyond that organization went knowledge of these actions."

Almost 3,000 phone numbers found
The news of the world is currently about 20 complaints from alleged victims of hacking, but critics of the paper say that hundreds or even thousands of people from its reporters scandal hungry focused.

The police say they found almost 3,000 cell phone numbers in the course of a first examination in the phone hackers.

The charges are police not thoroughly investigate been accused and have reopened their inquiry recently. Earlier this week, she arrested and questioned the Chief Reporter newspaper and his former head of the news.

Andy Coulson, a former news of the world editor as Prime Minister David Cameron's set, communications Chief was forced withdraw from his Downing Street job over the scandal earlier this year and has also been interviewed by police, although he was not arrested.

Murdoch's News International Ltd. has four British national newspapers - the tabloids of the Sun and news of the world as the times and the Sunday Times. News International is a subsidiary of Murdoch's News Corp., the U.S. Media Fox television, the New York Post and the Wall Street Journal included.

Copyright 2011, the associated press. All rights reserved. This material may not be published, broadcast, rewritten or distributed.

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