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The Monarch Report 1/22/2013
The Monarch Report 1/22/2013
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barrons, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHATS THE DIFFERENCE BETWEEN AMERICAS DEFICIT and its debt, and how do they relate to the debt ceiling? The terms deficit, debt, and debt ceiling are likely to be bandied about by politicians and the media frequently in coming months. Its important for all Americans to understand these terms. The deficit Americas deficit is its annual budget shortfall. Any year the governments spending exceeds its revenue (the amount of money taken in through taxes and other means), it has a deficit. When the government spends less than it takes in, it is called a surplus. Deficits are controversial and have been for many years. Keynesian economics states deficits can be used to stimulate economies and help countries rise out of recession. Other experts argue governments should not incur deficits because the money paid in interest could be better spent elsewhere. The debt The national debt is the full amount the American government owes all of its deficits and surpluses added together. If the government runs at a deficit of $10 million for five years, then its debt will be $50 million. Every year that a country runs at a deficit, its debt increases. The debt ceiling When a government runs at a deficit, it must borrow money to keep operating. The U.S. government generally borrows by selling securities such as Treasury bills, notes, bonds, and savings bonds. The amount it can borrow this way is limited by the debt ceiling, which was established under the Second Liberty Bond Act of 1917. The United States hit its current debt ceiling, which is about $16.4 trillion, on December 31, 2012. Before it can issue additional debt, Congress will need to raise the debt ceiling. This may make the debt ceiling a popular topic in political conversation during the next few months!
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. * To unsubscribe from The Monarch Report please reply to this e-mail with Unsubscribe in the subject line, or write us at krista.bowen@lpl.com. Sources: http://www.reuters.com/article/2013/01/19/us-usa-stocks-weekahead-idUSBRE90H1E020130119 http://www.reuters.com/article/2013/01/18/us-markets-stocks-idUSBRE90D0CG20130118 http://www.bloomberg.com/news/2013-01-18/u-s-stock-futures-little-changed-before-earnings-data.html http://www.bloomberg.com/news/2013-01-17/housing-starts-in-u-s-jump-more-than-forecast-to-fouryear-high.html http://www.foxbusiness.com/personal-finance/2013/01/17/housing-market-in-2013-what-to-expect/ http://www.reuters.com/article/2013/01/18/us-markets-stocks-idUSBRE90D0CG20130118 http://online.barrons.com/article/SB50001424052748703596604578235570771013936.html? mod=BOL_twm_coll http://www.investinganswers.com/financial-dictionary/economics/deficit-1077 http://www.investopedia.com/terms/f/federaldebt.asp#axzz2Iima3vBz http://www.investopedia.com/terms/d/debt-ceiling.asp#axzz2Iima3vBz http://thehill.com/blogs/on-the-money/economy/274591-us-to-hit-164t-debt-limit-on-dec-31 http://www.brainyquote.com/quotes/keywords/compromise.html