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GM Under Fire and Under Investigation

General Motors Co. is in hot water as they recall 51,640 Buick Enclave, Chevrolet Traverse and GMC Acadia SUVs from their 2014 model year. They have done so because of faulty software that could cause fuel gauges to read in accurately.

As the National Highway Traffic Safety Administration (NHTSA) said on its website, “An inaccurate fuel gauge may result in the vehicle unexpectedly running out of fuel and stalling, increasing the risk of a crash.”

GM dealers plan now to reprogram the engine control modules in these cars. The fuel gauge could be off by as much as a quarter of a tank, causing cars to run out of gas and create an accident. At least 7 million vehicles have been recalled this year. This includes 2.6 million Chevrolet Cobalts, Saturn Ions and similar models that have been linked to at least 13 deaths as a result of faulty ignition switches.

In addition to their recall issues, GM is under investigation by NHTSA, Congress, the Justice Department and the Securities and Exchange Commission for waiting until now to order the new ignition switch recall when they apparently knew about this issue for more than ten years.

Craft Brewers Conference Heads to Denver

beerThe Craft Brewers Conference takes place in Denver this week and more than 7000 industry professionals are expected to attend. The event will take place at the Colorado Convention Center from Wednesday to Friday. The CBC actually rotates to cities around the country, and this year Denver can expect to fill its hotel rooms to capacity and generate significant revenue for its bars and restaurants.

Local breweries will also be able to feature their work. More than one brewery opened a week in the state of Colorado in 2013. As Steve Kaczeus, the co-owner of Boostrap Brewing of Niwot said,“I just think it’s a chance to learn for us, and to network. We’ll have a bunch of people stopping by. They get to try our beer … There’s still a lot of technical information we can gather, a lot of networking we can do.”

During the conference, close to 400 exhibitors will show off their brewing gadgets, their canning equipment and other specialty items.

The country is brimming with opportunity for brewers at the moment. As of March of this year, there are 2966 operating breweries in the US with 99% of them meeting the definition of craft breweries, according to Bart Watson, the staff economist for the Boulder-based Brewers Association, which is running the event. Craft beer hit a record 14.3% share of the national beer sales in 2013, and this is an area of interest for the conference as well. One of the conference goals is to have craft beer retain a 20% sales share nationwide by the year 2020. Time will tell how they do.

For now, it’s drinking time in Colorado.

Pimco Reevaluates Outlook for US Economy

Bill Gross’s Pacific Investment Management Co., or Pimco, recently raised its outlook for the U.S. economy, stating that expansion is likely to be between 2.5% and 3% over the course of the year. At the end of last year, the fund estimated growth of between 2.25% and 2.75%.

According to Pimco, the adjusted assessment is a result of “trends toward growth and spending in the consumer, corporate and public sectors.”

“The global economy will likely experience steady, broad-based growth in 2014 thanks in no small part to the extraordinary expansion in central bank balance sheets in 2013,” said portfolio manager Saumil H. Parikh.

Pimco’s report went on to explain that “rising asset prices in combination with fading near-term fiscal uncertainties will drive global aggregate demand growth forward, adding stability to what has thus far been an on-again, off-again global recovery from the financial crisis of 2008.”

Pimco also reassessed its outlook for the euro zone, now claiming to expect real economic growth in the region to measure between 1% and 1.5%.

“We expect the reduction in fiscal drag in the euro zone periphery will reinforce gradually improving credit conditions to drive aggregate demand growth from well below potential to up toward potential in the year ahead,” Parikh said.

The report also revealed the fund’s expectations for China and Japan in 2014.


San Diego Investor Discusses Emerging Markets

Listen to this informative video in which Charles Brandes of San Diego based investment firm Brandes Investment Partners discusses emerging markets and why Brandes is bullish on them. As a longterm valued investor Brandes prefers to buy low and sell high and believes that down markets are great opportunities to get into the market.

Charles Brandes Investing: San Diego, California

San Diego, California became the headquarters of Charles Brandes investment firm in 1974. Using what he learned from his mentor Benjamin Graham, Brandes created Brandes LP.

“Brandes LP was one of the first investment firms to bring a global perspective to value investing and has consistently applied the active, deep value approach to every portfolio it manages—in all market conditions.”

Brandes Investment Partners, LP is still independently owned and,

“steadfast in its approach, applies a long-term perspective to investing and business management, firmly declared in the firm’s unique 100-Year Vision.”

“Stretch Your Dollar” with Doral

dollarFor those looking to make their money work for them, Doral Bank’s campaign is a good way to start.  “Stretch your dollar with Doral” is a way clients can get their deposit accounts to make the most of their dollars.  By instigating this campaign, Doral is promoting features in its checking accounts that are easy-to-use and comprise tools that “stretch the dollar.”

According to the bank’s Product Manager, Katiria Resto, “as a banking institution we want to inform our customers, and the communities we serve, the checking account options we offer along with the benefits that work for them. With accounts that help stretch that dollar, we want to be providers of banking solutions that can help our clients focus on enjoying their day to day.”

Doral Mortgage Partners with San Juan Board of Realtors

Doral Mortgage, part of Doral Bank, has just announced the partnership with San Juan Board of Realtors. Doral Mortgage has reaffirmed its commitment to its members and has announced its support to continued education programs.

At the oath ceremony, Jesús F. Méndez, Operations EVP of Doral Bank Puerto Rico, took the oath of Eduardo Santos Alvarado, the new president of the San Juan Board of Realtors. The event was attended by realtors, members of the M-Loan, Doral Mortgage, representatives of the Builders Association and others.

Santos Alvarado discussed his support of Doral and said, “It’s important to work together to achieve the goals we all have in the mortgage market. Our present is challenging, therefore, it’s important to know the existing opportunities to provide successful solutions to consumers in a responsible manner and that’s what we are looking for with our partnership with Doral.”

Mendez said that it “is essential to establish such partnerships in times of economic change, emphasizing that Doral has always distinguished itself by extending services of opportunities and alternatives for citizens in programs that aimed at the acquisition of homes. With programs such as HARP (Home Affordable Program Refinance) and FHA Streamline, they have allowed families to refinance their mortgage at a lower interest rate even at a time when the value of the property has been affected, allowing a significant financial relief for these families”.

STEP on Wills

willsIn the summer of 2013, the Association of Corporate Council (ACC) became concerned that WIQS (the Wills and Insurance Quality Assurance Scheme) might not be the best choice for will writing for its clients.  It is a somewhat complicated process.  Thus ACC’s professional body, STEP (The Society of Trust and Estate Practitioners) was brought on board to help inform the public of their role vis-à-vis those preparing their Wills.

STEP had already informed its members about a new STEP, seven-page Code for Will Preparation in England and Wales due to take effect on 1 April 2014.  It is very easy to understand, outlining the ethical principles and standards of behavior STEP members should follow.  In addition, if a solicitor tries to take advantage of a client in this way, the client can complain to STEP which will use its disciplinary process where necessary.

Some of the challenges that may arise with this and other finance-related matters, were discussed last year by Marnin Michaels, Partner at Baker & McKenzie, Zurich, who spoke at the STEP conference.  He gave particular mention to how fast the world is evolving, which means that financial advice given now may be outdated next month!  To overcome this, Michaels believes the key is “constant study, reading and learning.”

By doing this, and by trying to keep abreast of fluctuations in the world of finance, those at STEP can help enhance the financial management needs of their clients.

Refinancing and Rising Interest Rates

Interest rates may be on the rise, but refinancing mortgages still seems like an attractive course of action for many home owners. According to a recent Freddie Mac study, however, interest rates are expected to rise to at least 5% by this summer.

John Young of USAA said: “The window hasn’t closed, but homeowners should analyze their mortgage situation to see if a refinance can improve the overall financial picture.”

Young’s point was further supported by Mortgage Bankers Association’s Mike Fratantoni, who added: “When market rates were at 3.5%, 90 to 95% of outstanding loans would have benefited from a refinance.” Now that mortgage rates are higher, only 25-30% of homeowners would benefit.

Some advantages to refinancing include:

-Earlier mortgage pay off, which can save the homeowner thousands of dollars in interest and build equity in your home at a faster rate.

-Additional cash flow, allowing you to pay down debt or budget for other expenses.

-Home equity access, as Diane Brooks at USAA explains: “As home values start to rise, there is some pent-up demand for a cash-out refinance to access the equity in the home for other purposes.”

Many companies, such as Doral Bank, Bank of America and TD Bank, are currently offering ideal mortgage and refinancing rates. As interest rates shift, homeowners have much to consider when planning to refinance.

The Best Financial Advice: Investing in Stocks

New Year’s is filled with resolutions, and what better time to take a critical look at your business, investments or personal finances? The Wall Street Journal recently asked a number of experts in the field to discuss the best advice they ever received, and published several answers.

“The best financial advice I ever received was advice that I also provided, both to myself and to Edith, my wife,” said Richard Sylla, a professor at the New York University. “It was more than 40 years ago when I was a young professor of economics and she was a young professor of the history of science. I based the advice on what were then relatively new developments in modern finance theory and empirical findings that supported the theory.”

“The advice was to stash every penny of our university retirement contributions in the stock market,” he said. “As new professors, we were offered a retirement plan with TIAA-CREF in which our own pretax contributions would be matched by the university. Contributions were made with before-tax dollars, and they would accumulate untaxed until retirement, when they could be withdrawn with ordinary income taxes due on the withdrawals. We could put all of the contributions into fixed income or all of it into equities, or something in between. Conventional wisdom said to do 50-50, or if one could not stomach the ups and downs of the stock market, to put 100% into bonds, with their “guaranteed return.”

He continued, “Only a fool would opt for 100% stocks and be at the mercies of fickle Wall Street. What made the decision to be a fool easy was that in those paternalistic days the university and TIAA-CREF told us that we couldn’t touch the money until we retired, presumably about four decades later when we hit 65.”

“Aware of modern finance theory’s findings that long-term returns on stocks should be higher than returns on fixed-income investments because stocks were riskier—people had to be compensated to bear greater risk—I concluded that the foolishly sensible thing to do was to put all the money that couldn’t be touched for 40 years into equities.”

“At the time (the early 1970s) the Dow was under 1000. Now it is around 16000. I’m now a well-compensated professor, but when I retire in a couple of years and have to take minimum required distributions from my retirement accounts, I’m pretty sure my income will be higher than it is now. Edith retired recently, and that is what she has discovered.”

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