Mining States Feel Pinch of Commodities Slump
From The Kiplinger Letter, May 17, 2013
Slumping prices of metals and minerals will weigh on big mining states, from coal pits in Appalachia to the big gold and silver mines of Nev. The sell-off in commodities this year is sure to ding profit margins and tax revenues in major mining states. Among them: Ariz., tops in copper. Minn., the leader in iron. And W.Va., as weaker coal prices figure to cost jobs and hurt local economies.
Prices won’t decline much further. But a rebound is unlikely anytime soon.
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Control Your Fridge with Your Smart Phone?
-- From The Kiplinger Letter, May 17, 2013Expect a flood of new consumer electronic gadgets as the cost of sensors and components drops and software becomes more powerful. Many of them will be inexpensive devices, controlled by and piggybacking off the computer power of increasingly advanced smart phones. One early example is Nest, a thermostat equipped with Wi-Fi that allows you to turn the heat up before you get home.
April's Good Federal Budget News Just a Blip
-- From The Kiplinger Letter, May 17, 2013A $113-billion federal budget surplus last month is heartening news. Ditto, an annual deficit shrinking to “just” $642 billion in fiscal 2013... 4% of GDP, and the lowest since 2008. With the government’s coffers swollen in April from money pouring in near the spring filing deadline for 2012 income taxes, Treasury’s monthly account is in the black for only the fourth time since Sept. 2008.
Both signal economic growth. Indeed, over the first seven months of FY 2013, revenue is up 16%, while spending is down 1%. Of course, the increased tax rates on top earners help, but the bulk of the revenue hike is from more people with jobs. In fiscal 2015, the deficit as a share of GDP will be down to 2.1%, from 10% in 2009.
But the surplus won’t last. The books for May will once again read red. And by early fall, the debt ceiling will again threaten financial stability. Later this month, a temporary suspension of the federal debt ceiling will expire, forcing the Treasury Dept. to juggle various government accounts to keep paying bills that come due. That’s doable for a few months, but if the cap isn’t raised by Sept. or Oct., Treasury will run out of slack in the system, risking a government default.
More Agriculture Spending, Not Less, Under New Farm Bill
-- From The Kiplinger Agriculture Letter, May 17, 2013Though lawmakers like to say the new farm bill features less spending... Uncle Sam will actually spend more on farming and related businesses. What the Senate Agriculture Committee identifies as $6 billion in reduced spending from 2014 through 2018...and the House cites as cutbacks of $13.5 billion...are simply figures that show expected reductions in the rate of increases that could occur if Congress didn’t amend or end programs already in place. Moreover, ag committee estimates are misleading. For example, $4.5 billion a year in payments on cropland is counted twice against farm bill costs...first as part of national budget cuts that Congress made for FY ’13, then again as part of program cuts in the farm bill.
Spending under coming farm legislation actually will be 33% higher than the current bill as estimated in ’08, says the Congressional Budget Office. More than three-fourths of total spending will go to public food assistance.
Why Do We Have "Tax-Exempt" Political Groups, Anyway?
-- From The Kiplinger Letter, May 17, 2013The Obama administration's IRS isn't the first to play politics. Indeed, President Nixon personally directed that tax agents badger his enemies. JFK himself ordered up the not-so-subtly-named Ideological Organizations Project. And FDR used the then-Bureau of Internal Revenue for his own political purposes.
But the latest imbroglio overshadows a question begging for an answer: Should any politically oriented group be eligible for tax-exempt status Plenty of outfits, on the right and the left, donate millions to help decide elections.
They say they qualify for exemptions...and the right to withhold donors' names... because their main purpose is to educate voters, not to elect particular candidates or attack political foes. But some cross the line and openly say whom to vote for.
Some churches also delve into political territory, raising questions. Unfortunately, a serious debate on the matter is probably impossible now.
New Office Tech Trend: Bring Your Own Computer
-- From The Kiplinger Letter, May 10, 2013The next big trend in U.S. offices: Workers supplying their own devices. By 2016, 38% of firms plan to stop providing computers and other devices to workers, preferring to allow them to use their own laptops, smart phones and tablets instead. IBM, for example, already has 120,000 workers who supply their own hardware. Security is an issue, but most companies have policies on personal electronics.
The shift to personal devices should boost productivity and save money… not only on hardware purchases but also on IT staffing. Users of their own devices are less apt to call company IT folks for help, so fewer of them need to be on the payroll. As “bring your own” takes root, look for a boom in workplace apps.
A cross-country trip by a solar-powered plane will bring more than headlines. It'll give makers of aircraft, large and small, ways to cut weight and save fuel.
Passenger jets won't be able to fly without any fuel, the way the Solar Impulse does, but its solar cells and storage batteries will find their way into everyday air travel… helping to power cabin lighting systems or some nonessential onboard electronics.Look for solar panels to be widely used on surveillance drones as well. They'll still burn conventional fuel, but power from the sun will extend fuel mileage.
DVD Distribution to Get New Life
-- From The Kiplinger Letter, May 10, 2013Hollywood's effort to prop up the DVD market is spreading worldwide -- to Australia, New Zealand, France and Germany this year -- and will grow in the U.S. Cloud-based UltraViolet allows DVD owners to stream digital copies so they can watch on a smart phone or tablet without using the disc itself. UltraViolet copies of DVDs come with a code that a customer can enter online to gain access to a digital version.
Coming soon: Sharper-quality videos that require less data to stream. Demand for the technology will surge, especially for mobile devices. Already, video represents half of mobile Internet traffic. The share will grow to 90% in a few years. Video is a data hog, using more bandwidth than music or e-mail. Streaming Netflix videos spells a third of peak-hour traffic in the U.S. and Canada. The shift to video that uses less bandwidth will be a boon to Internet TV, allowing the number of channels available for online viewing to quickly double.
Security to Trump Privacy -- For Now
-- From The Kiplinger Letter, May 10, 2013Privacy issues will continue taking a backseat to security for a few years. Many members of Congress don't want to be blamed for an attack, so they give the U.S. government broad discretion to use warrantless wiretaps and other methods to collect information that many individuals think is off-limits. And they don't want to be seen as antibusiness, so they don't stop private firms from gathering, using and even selling personal data...not just names, addresses and ages, but Social Security numbers, credit card purchases and online habits.
But courts will eventually swing the other way, upholding individual rights spelled out in the Constitution's Fourth Amendment. Outside the government, allowing security and business concerns to trump privacy has many critics... from the American Civil Liberties Union on the left to tea partyers on the right.
Even Congress will choose privacy over security in a bill now in play. The Cyber Intelligence Sharing and Protection Act was approved by the House but is likely to stall in the Senate. The bill, a legislative priority for big banks, would allow broader sharing of customer data to prevent cyberattacks.
Cell Phone "Cramming" on the Rise
-- From The Kiplinger Letter, May 3, 2013Be on the lookout for fraudulent charges on your monthly cell phone bill. The Federal Trade Commission warns of a surge in the practice known as cramming, in which third parties quietly add unrequested services that are billed to customers by their wireless carrier. The FTC filed suit last month against Wise Media of Ga. for charging $9.99 a month to provide unsolicited love tips and horoscope texts.
If these charges turn up on your bill, ask your carrier to remove them. AT&T, Verizon, Sprint and T-Mobile offer a blocking mechanism that you can use. Finally, don't give out your cell number in pitches for online freebies.
Projectable Touch Screens Coming to Your Phone
-- From The Kiplinger Letter, May 3, 2013Coming soon: The ability to quickly create and customize touch screens. Smart phones will be able to project them onto walls, doors and tables.
Researchers from Carnegie Mellon University have developed a computer system that projects a touch screen interface onto almost any surface. In a business setting, the instant screen can be used in a conference room as an interactive whiteboard. At home, smart phones that project a computer screen the size of a big-screen TV will be used for games and other purposes. Systems will allow gesture control, too.
Piracy Ticking Up on West Coast of Africa
-- From The Kiplinger Letter, May 3, 2013Off the coast of West Africa, growing piracy is setting off new alarm bells: It's raising terrorism worries as well as costs for shipping and security, as stolen goods help fund radical Islamists based in and around Nigeria and Mali. The outbreak in the west comes as a violent wave of piracy in East Africa subsides.
That round of thefts, off Somalia, added billions a year to shipping and security costs. The new outbreak will have a similar effect until it can be brought under control. The U.S., the U.K. and other nations in Europe are planning naval patrols and additional operations in the Gulf of Guinea in a bid to keep shipping lanes open.
New Bank Cards Target Immigrant Market
-- From The Kiplinger Letter, May 3, 2013Big banks will test a new market by pitching credit cards to immigrants. For the most part, immigrants with no credit history use secured cards, which generally require a deposit. But Bank of the West offers conventional cards to folks with at least a year left on a visa, an account with the bank or an affiliate and a job that pays at least $36,000 a year. In the continuing search for profits, big institutions are following the lead of smaller banks, which have offered loans, lines of credit and other financial products in some immigrant communities for years.
The focus: Those from Europe and Asia. They tend to have more money.
Sequester Will Continue to Plague Some Flyers
-- From The Kiplinger Letter, May 3, 2013Not all flight delays have been cleared up by tinkering with sequester cuts. International travelers will face extensive waits to clear customs this year, especially over the summer. Customs and Border Protection was already short of staff before the sequester kicked in. CBP has some flexibility to cut down on furloughs, but a likely robust travel season will strain the ability of agents to keep lines moving.
Some folks already are spending up to two hours in the customs queue and don't have time to have luggage rescreened without missing connecting flights.
Overall, summer won't be such a hot season to travel, even inside the U.S. Hefty surcharges of up to $60 will be added for traveling during peak periods. But base fares will increase by just 1% over 2012, on average. You can cut the charges by flying in early June, the last week in August or on a Tuesday, Wednesday or Saturday. And planes will be full. Airline consolidation means fewer flights and routes.
