WASHINGTON -- The Obama administration Monday announced a plan to shift Medicare payments it makes to hospitals and doctors so they reward quality over volume. Officials said they hoped the move would be a catalyst for the entire health-care system.
"It is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people," Health and Human Services Secretary Sylvia M. Burwell said in a statement. A broad cross-section of health-care industry representatives attended the announcement, including insurers, hospitals, and doctors, as well as employers, who pay for coverage for most workers and their families. The ultimate goal is to reward quality care, and not just the sheer volume of services like imaging scans.
Medicare and employers are already moving in that direction, but the outlook for the administration's initiative remains unclear. Despite a slowdown in spending over the last few years, Medicare continues to grapple with longstanding financing problems, including a budget formula that will cut doctor payments by 21 percent in April unless Congress acts.
Rising Expectations
But Burwell says it's time to take a longer-term view. Building on experiments under the president's health care law, she set a goal of tying 30 percent of payments under traditional Medicare to new models of care by the end of 2016. That would rise to 50 percent of payments two years thereafter.
Those new models include so-called accountable care organizations, in which doctors coordinate care to help keep patients from landing in the hospital for avoidable problems. HHS also set a goal of tying 85 percent of all payments under traditional Medicare to measures of quality or value by the end of 2016. That would rise to 90 percent two years thereafter.
Costing about $600 billion a year, Medicare is the government's flagship health insurance program, serving seniors and disabled people. About 55 million people are covered, with services financed through payroll taxes on workers as well as beneficiary premiums. Roughly 7 out of 10 beneficiaries are in the traditional program, while the rest are covered through private insurance plans offered under Medicare's umbrella.
The $2.9 trillion-a-year U.S. health care system remains at the forefront of scientific innovation globally. But there is widespread agreement that health care is costing the nation too much. Many people get treatments and tests that either don't help them or have problematic side effects. The price of new drugs is a perennial issue for insurers, as well as for federal and state governments. And fraudsters take a cut of the health care dollar that's estimated to run into the tens of billions of dollars annually.
As Americans continue turning away from milk, an industry group is pushing back with a social media campaign trumpeting the benefits of milk.
Julia Kadison, CEO of Milk Processor Education Program, which represents milk companies, says the breaking point came last year when the British Medical Journal published a study suggesting drinking lots of milk could lead to earlier deaths and higher incidents of fractures. Even though the study urged a cautious interpretation of its findings, it prompted a wave of posts online about the dangers of drinking milk. "I said, 'That's enough.' We can't have these headlines that 'Milk Can Kill You' and not stand up for the truth," Kadison said in a phone interview.
On Tuesday, the "Get Real" social media campaign will be announced at a dairy industry gathering in Boca Raton, Florida, in conjunction with the National Dairy Council and Dairy Management Inc., which represent dairy farmers. The campaign is intended to drown out milk's detractors with positive posts about the nutritional benefits of milk on Facebook (FB), Twitter (TWTR) and elsewhere. Milk brands, their employees and others in the industry will post the messages and direct people to a website where they can get more information.
Consumption Declines as Alternatives Proliferate
The campaign comes as milk's dominance in American homes continues to wane as beverage options proliferate. According to data from the U.S. Department of Agriculture, people drank an average of 14.5 gallons of milk a year in 2012. That's down 33 percent from the 21.8 gallons a year in 1970.
One factor chipping away at milk's dominance is the growth of non-dairy alternatives. While soy milk's popularity has faded, retail sales for almond milk are estimated to be up 39 percent last year, according to Virginia Lee, a packaged food analyst with market researcher Euromonitor International.
Meanwhile, the USDA recommends adults get three cups of dairy a day, including options like fat-free, low-fat milk or calcium-fortified soy milk. And the Academy of Nutrition and Dietetics, which represents nutrition professionals, is supporting the Get Real campaign and its push to underscore "the decades of research reinforcing low-fat milk as one of the most nutrient-rich beverages available."
Stone Age Perspective and Animal Welfare
But milk's wholesome image is nevertheless being muddied by diet trends and divergent attitudes about nutrition. Many who follow the popular paleo diet, for instance, shun dairy because people didn't drink it during the Stone Age.
Animal welfare groups like People for the Ethical Treatment of Animals are also a thorn in the milk industry's side. On its website, PETA notes that "no species drinks milk beyond infancy or drinks the milk of another species" and details the cruel conditions dairy cows are often subject to.
That's one of the reasons vegan Valentin Vornicu, a 31-year-old resident of San Diego, California, said he stays away from milk. "It looks like a scene from 'The Matrix.' 'You see a picture of that and you're like, I'm drinking this? ," said Vornicu, citing footage he's seen of cows hooked up to milking machines.
Already, MilkPEP has tried some different tactics in hopes of battling milk's decline. In 2007, the group started promoting chocolate milk as a recovery drink for athletes. Then last year, the industry dropped its "Got Milk?" campaign featuring famous people sporting milk mustaches in favor of a campaign called "Milk Life" that focuses on the everyday benefits of milk.
With the "Get Real" campaign launching Tuesday, Kadison said the industry plans to stop "the seeds of doubt" that "naysayers, these anti-dairy folks, and also the competitors" are planting in people's mind about milk "before the fever gets too high."
Cosmetics can cost you a pretty penny, but with a few simple steps, you can save your beauty products and your money from going to waste.
Heat from a room, or even dampness from a steamy shower, can cause the ingredients in beauty products to break down faster making them less effective. Make them last much longer by placing them in your fridge far away from heat and sunlight.
Another "cool" trick is putting your lipstick in the freezer overnight. This will kill any bacteria that accumulates on it over time.
If you're considering tossing that old, clumpy nail polish, think twice. There's actually a way to salvage it. All you have to do is add a couple drops of nail polish thinner to the bottle and it will make your polish as good as new.
If you don't already have some lying around, nail polish thinner will cost you about S4. That's a small investment compared to buying new nail polish, which can cost you anywhere from $9 to $15 dollars per bottle.
So, if you're looking for quick ways to save, re-evaluate your makeup bag. With these money-saving tips it's easy to lower the high cost of beauty.
Charlie Riedel/AP
Tickets to the upcoming Super Bowl went off the charts this weekend, peaking at $6,500, making them the most expensive average ticket prices for any event, according to a company that collects data and sells tickets on the secondary market.
By comparison, tickets to last year's Super Bowl were selling for $3,008 this time last year, TiqIQ.com data shows. The next priciest event prior to this was the 2011 college football championship game between Auburn Tigers and the Oregon Ducks at $5,087.
No other event in sports or music or theater has touched the prices now being seen, said TiqIQ Vice President Chris Matcovich. The average asking price for a ticket to Sunday's game between the New England Patriots and Seattle Seahawks as of Monday afternoon was around $5,700, down from the weekend's peak. An influx of tickets into the market that had been held back by brokers is likely the reason for the slight softening.
Pssst -- Just $18,000
While asking prices are still well above $5,000 on average, the average selling price is just over $4,000. The face value for the tickets are $800 to $1,900. The cheapest tickets now for sale are more than $3,500. The most expensive is about $18,000.
One of the reasons so many tickets end up getting resold is how they are distributed. The two competing teams get 17.5 percent of the tickets; the rest of the league's teams divide 35 percent; the league keeps 25 percent; and the host team gets 5 percent.
So, a lot of tickets are made available to people who are not fans of either team and know they can turn a quick profit by selling the tickets. Plus, they don't have to pay to go to and from Super Bowl XLIX in Arizona.
For tickets the day of the game, here are the average costs of the past few Super Bowls and the cheapest seats available:
WASHINGTON --The U.S. budget deficit will decline slightly to $468 billion this fiscal year from $483 billion last year, the Congressional Budget Office said on Monday in a report that marks the end to an era of dramatically falling deficits.
After falling from the $1 trillion-plus levels of President Barack Obama's first four years in office, CBO said it expects the deficit to stay largely flat in 2016 and begin a steady march upward in 2017 due to rising costs for servicing the national debt and caring for the retiring Baby Boom generation.
The CBO estimates kick off what promises to be a contentious budget debate in Washington this year, as Republicans now in control of Congress seek to eliminate deficits within 10 years while lowering tax rates and boosting military spending. Meanwhile, President Barack Obama and his Democrats have proposed a range of new spending and tax breaks aimed at helping middle class Americans and setting the agenda for the 2016 presidential election.
Time for Debate in Washington
The CBO report shows that the respite in deficits will be relatively short-lived, giving policy makers less breathing room to ease spending constraints or provide tax relief. Relative to the size of the U.S. economy, the federal deficit after 2018 will be back above its 50-year average of 2.7 percent of gross domestic product, reaching 4.0 percent by 2025 -- a level that many economists view as unsustainable.
In 2015, CBO said that increased revenues generated by a strengthening U.S. economy this year will be partly soaked up by the retroactive extension of several business tax breaks for one year in December. But the nonpartisan budget referee agency said it does not expect massive economic growth during the 10-year budget window, with real GDP growth peaking at 3 percent in 2016, then slowing 2.1 percent in 2018-2019 as retiring Baby Boomers cause a drag on the labor force.
"Today's CBO report is a sober reminder of the fiscal and economic challenges we face as a nation," Republican House Budget Committee Chairman Tom Price said in a statement. "If nothing is done, we will continue down an unsustainable path full of rising annual deficits that will add to an already $18 trillion debt. Our vital health and retirement programs will continue to grow further toward insolvency."
Apples Eyes Studio/Shutterstock
A hawker of green coffee bean extract as a miracle weight loss remedy has agreed to pay $9 million in consumer redress as part of a settlement announced Monday with the Federal Trade Commission.
Under the settlement, Lindsey Duncan and the companies he controlled are barred from making "deceptive claims about the health benefits or efficacy of any dietary supplement or drug product," according to an FTC statement. The defendants also must substantiate any future weight-loss claims with at least two well-controlled human clinical tests.
Duncan touted the weight-loss benefits of green coffee bean extract through appearances on "The Dr. Oz Show," "The View" and other TV programs. Duncan used his "Dr. Oz" appearance in his marketing campaign after the show aired, the complaint stated. Also, the complaint said that Duncan's paid spokespeople portrayed themselves on TV as independent sources of information without disclosing their financial ties to the companies. Duncan's companies subsequently sold tens of millions of dollars worth of the extract, according to the FTC.
"Lindsey Duncan and his companies made millions by falsely claiming that green coffee bean supplements cause significant and rapid weight loss," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection. "This case shows that the Federal Trade Commission will continue to fight deceptive marketers' attempts to prey on consumers trying to improve their health."
The FTC charged that Duncan and his companies deceptively claimed that the supplement could let consumers lose 17 pounds and 16 percent of their body fat in just 12 weeks without diet or exercise. He backed up the statement with a clinical study, which the FTC charged was severely flawed. In September 2014, the FTC settled charges against the company that sponsored the severely flawed study that Duncan discussed on "Dr. Oz." In October, the Texas Attorney General's office charged Duncan with duping the public by claiming to be a doctor when he isn't one.
Richard Drew/APA potentially historic blizzard that started Monday affected businesses in Wall Street, the Northeast and even beyond.
By Lucas Iberico Lozada
NEW YORK -- U.S. stocks edged higher on Monday as investors brushed off fears a leftist victory in Greece would bring fresh crisis to the Eurozone and energy stocks advanced.
The leftist, anti-bailout Syriza party won decisively in Greek parliamentary elections on Sunday, after running a campaign promising to take on Greece's international lenders and bring about an end to austerity measures. While the United States has limited direct exposure to Greece's relatively small economy, extended volatility in the region could hurt multinational companies. The euro was near flat at $1.1264 after falling to a new 11-year low in Asian trade.
"There was a lot of trepidation in the market going into the Greek election ... but by this morning the Syriza win was priced into the market already," said Robert Francello, head of equity trading for Apex Capital in San Francisco.
The Dow Jones industrial average (^DJI) rose 6.1 points, or 0.03 percent, to 17,678.7, the S&P 500 (^GPSC) gained 5.27 points, or 0.26 percent, to 2,057.09 and the Nasdaq Composite (^IXIC) added 13.88 points, or 0.29 percent, to 4,771.76.
Key Sectors and Firms
Energy stocks led gains on major U.S. indices after Abdulla al-Badri, OPEC's secretary-general, told Reuters on Monday that oil prices may have reached a floor and could move higher very soon. Chevron (CVX) added 1.9 percent to $108.88 while Exxon Mobil (XOM) gained 1 percent to $91.76 as the biggest lifts to the S&P 500. The S&P energy index rose 1.4 percent.
In deal news, Rock-Tenn (RKT) and MeadWestvaco (MWV) said they would combine to form a packaging company worth $16 billion, with MeadWestvaco shareholders owning a majority stake. Rock-Tenn shares jumped 6.1 percent to $66.84 while MeadWestvaco surged 14 percent to $51.34 as the S&P 500's biggest percentage gainer.
D.R. Horton (DHI) climbed 4.9 percent to $24.25 after the homebuilder's revenue growth beat expectations, boosted by home deliveries. An index of homebuilder stocks rose 1.9 percent.
Ocwen Financial (OCN) jumped 8.8 percent to $6.91 after the company paid $2.5 million in penalties to the California Department of Business Oversight, which had threatened to suspend Ocwen's license to operate in the state. About 32 million Ocwen shares exchanged hands, making it one of the New York Stock Exchange's most active.
With 19 percent of S&P 500 companies having reported earnings, 71.6 percent have topped expectations, while 54.7 percent have beaten revenue forecasts, according to Thomson Reuters data. That compares with the long-term average of 63 percent for earnings and 61 percent for revenue.
Advancing issues outnumbered declining ones on the NYSE by 2,111 to 952, for a 2.22-to-1 ratio; on the Nasdaq, 1,785 issues rose and 987 fell for a 1.81-to-1 ratio favoring advancers. The benchmark S&P 500 was posting 38 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 80 new highs and 58 new lows.
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If you're both frugal and time-crunched, shaving money off your grocery bill is an ongoing challenge. You don't have enough hours in the day to clip coupons, compare store circulars and track sales.
Fortunately, your smartphone can make saving money as easy as a few clicks. Here are 10 great apps -- nine of them free -- that will help you save money, time and hassle when you're grocery shopping.
1. Cellfire
Platform: Any.
Cost: Free.
Save your store loyalty cards right to your smartphone, then "clip" digital grocery coupons that you add to your cards. Simply show the cashier your phone when you check out and the savings are automatically applied to your total.
Check available rebate offers (the app adds 20 to 30 each week), then send the ones you like to your phone. Snap a picture of your receipt when you buy the item, and the rebate is automatically added to your account. Once you reach $20 in rebate funds, you can request a payout check.
3. Coupon Sherpa
Platform: Apple, Android.
Cost: Free.
New coupons are added daily, and the app sends you reminders to use these digital coupons when you're in-store. It also displays the expiration dates prominently.
4. Favado
Platform: Apple, Android.
Cost: Free.
This app promises that you can save up to 70 percent by comparing prices across local stores, finding the best sale/coupon combinations and setting up notifications for when your favorite brands go on sale. It also allows you to create a shopping list based on current sales.
5. Ibotta
Platform: Apple, Android.
Cost: Free.
Get paid to grocery shop with this rebate app, which works in a similar way to Checkout 51 but pays out at $10 instead of $20. Use the two in combination to maximize your savings.
6. Grocery iQ
Platform: Apple, Android.
Cost: Free.
This app is your grocery list on steroids. It allows you to build your shopping list from a database of items you can search by text, barcode scanning and voice. You can arrange your list by store layout for easier shopping. You can also manage lists for different stores and create "favorites" based on your shopping history.
7. mySupermarket
Platform: Apple, Android.
Cost: Free.
Billing itself as "the only grocery list you'll ever need," this app compares prices on items across eight retailers and sends you price alerts and savings suggestions. It can fulfill your order with several retailers through one easy online payment.
8. Paprika
Platform: Apple, Android, Mac, PC, Kindle Fire and Nook.
Cost: $4.99 (for Apple and Android; other platforms vary).
This app is great for the planners among us. It stores recipes, sorts them into a meal plan for the upcoming week and helps create a shopping list geared to the items you need for those recipes.
9. Shopkick
Platform: Apple, Android.
Cost: Free.
This app rewards you with "kicks" for doing certain things, like entering a particular store, scanning a particular item or linking your Visa (V) or MasterCard (MA) and making purchases. It also shows you nearby deals you can take advantage of. Kicks can be redeemed for gift cards to places like Target (TGT) and Starbucks (SBUX).
10. SnipSnap
Platform: Apple, Android.
Cost: Free.
Extreme couponers will love this app, which turns your physical coupons into digital ones. Simply snap a photo of each coupon, and the app converts it into a scannable barcode you can present upon checkout. It also lets you know when you enter a store for which you have coupons and when coupons are about to expire, and it lets you share scanned coupons with friends.
Paula Pant ditched her 9-to-5 job in 2008. She's traveled to 32 countries, owns seven rental units and runs a business from her laptop. Her blog, Afford Anything, is a gathering spot for revolutionaries who understand that they can afford anything -- just not everything. Visit Afford Anything to learn how to crush limits, create wealth and live life on your own terms.
Americans like giving gift cards. The average person planned to give $174 worth of the plastic and cyber gifts last year, up from $163 in 2013, according to the National Retail Federation. Unfortunately, we are not as good at spending what we get. In fact, Americans left millions of dollars worth of gift card value unspent last year. If you're holding onto a few hundred dollars spread across a handful of shiny plastic presents, here's how to liberate your locked up lucre.
Seven Ways to Get Some Value
Use them to pay bills. No, don't stuff your cards back in the odds-and-ends drawer and wait for a better time to spend it. Depending on the card and the retailer, you can use your balance to pay for stuff you'd normally pay for -- even your bills, if your gift is a debit card from a bank. Take the money you would have spent on groceries or gas and put it in the bank instead. You may even be able to convert your card to cash and save a step. Check the terms and conditions.
Sell them. In recent years, a bunch of websites have sprung up that buy and sell gift cards at a discount. Buyers can save a little money on gift cards for gifts or purchase goods and services. Sellers can convert their cards to cash to use however they'd like. Prices on these exchanges fluctuate with demand, and some cards are more desirable than others. But if you don't mind taking a little cut on the value of your card, they're a decent option. Be sure to shop around before buying or selling - prices vary across exchanges. Here are a few options: GiftCards.com, Cardpool and GiftCardRescue.com.
Trade them with your friends and colleagues. If you trust your friends and co-workers to tell the truth about the balances on their cards, set up a trading circle to match cards with recipients. Will you take two of my Applebee's (DIN) for one of your AMC Theatres (AMC)?
Track the balance. After a couple of lattes and a scone, just how much is left on that Starbucks' gift card? You can usually discover the balance by visiting the issuer's website, or you can use an app like GoWallet to scan your card (or cards) and let it track the balance for you. GoWallet also offers a gift card exchange.
Carry them in your smartphone. You can spend your gift cards using GoWallet, too, which is a lot more convenient than carrying them around. Apple Passbook and Google Wallet can do this for you as well.
Donate them. Even if your card has a partial balance, most charities will happily accept it. If your preferred charity does not, check out CharityGiftCertificates.org where you can choose a charity to donate the card to. Gift Card Giver also distributes cards to nonprofits and those in need.
Regift them. If your card is in good condition inside and out (no partial balances!), you can thoughtfully re-gift it to someone else. You may not like to shop at Macy's, but for someone who does, that unused gift card cluttering your desk drawer will soon be happily spent.
Reasons to Stop Giving Gift Cards
The next time you're stumped for a gift to give, resist the temptation to grab a gift card off the rack. Gift cards come with several significant drawbacks:
Most lock recipients into buying from a specific retailer (or group of related retailers such as Gap (GPS) and Banana Republic), which limits their utility.
Most bank gift cards charge buyers a purchase fee on top of the card balance.
Some bank gift cards also charge a monthly "dormancy fee" if the card is inactive for at least 12 months.
If the issuer goes bankrupt, the value on the gift card may be lost.
Unlike with credit cards, gift card holders do not have the right to dispute erroneous or inaccurate charges.
Laws governing gift cards vary by state. The National Conference of State Legislatures provides a comparison of state laws and regulations to help consumers understand their gift card rights. Consumers Union provides a simpler, easier to read chart, too.
Finally, before giving a gift card, be sure to understand the terms and conditions so the recipient isn't burdened with surprises later. After all, the fine print is as much a part of the gift as the balance coded onto the magnetic strip.
FordFord stole this month's Detroit show with its new GT supercar, which boasts spectacular performance and advanced technology.
The North American International Auto Show in Detroit is the biggest in America, and the dizzying display of new models can be intoxicating for car fans. Here are three big ones from this year's show.
1. Innovation Everywhere
Many automakers went to great lengths to tout their latest high-technology advances. General Motors (GM) opened the show with the surprise Chevy Bolt, a prototype electric car that will have a 200-mile range and a price tag around $30,000 when it (probably) comes to market around 2017.
Mercedes-Benz (DDAIY) showed off its prototype self-driving car, a luxurious sitting room on wheels. Honda (HMC) had its upcoming hydrogen-fuel-cell-powered car, along with cutting-edge race cars and other high-tech displays.
And you couldn't turn around on the huge Ford (F) stand without hearing the word "innovation." From its radical Ford GT supercar to the limited self-driving features that are already finding their way into mainstream Fords, the company's executives made a point of emphasizing its pursuit of a high-tech edge.
2. High Performance -- but With High-Tech Twists
Ford stole the show with its racy-looking GT supercar. But the GT isn't powered by a V8 like the ones that powered earlier Ford GTs. This one has EcoBoost -- a near-racing-spec version of the 3.5-liter twin-turbo V6 that Ford offers as a fuel-efficient V8 alternative in its F-150 and Explorer.
In those vehicles, the 3.5-liter EcoBoost makes about 360 horsepower -- but it'll make more than 600 horsepower in the new GT.
The new Acura NSX sports car wowed a crowd that included comedian Jerry Seinfeld -- but again, it doesn't have the gas-guzzling power plant you'd expect. It does have a twin-turbo V6, but the new NSX is a hybrid: It has three (yes, three) electric motors that add to the V6's thrust.
More mainstream entries were picking up the high-tech green theme as well. Mercedes-Benz had a plug-in hybrid version of its top-of-the-line S Class sedan on display, and BMW (BAMXF) and Audi both had premium electric cars on their stands.
Tesla Motors (TSLA) showed off a cherry-red example of the scorching new P85D version of its Model S sedan. The dual-motor P85D is an all-electric supercar that will do 0 to 60 miles per hour in a breathtaking 3.2 seconds. But unlike Ford's GT and Acura's NSX, the Model S P85D is also a comfortable sedan.
3. The Line Between Luxury and Mainstream Is Getting Very Blurry
Automakers have discovered that mainstream buyers will pay extra for luxury-car-like features in mainstream models. That has helped boost profits at companies like Ford, which has perfected the practice. Ford's new-for-2015 F-150 pickup can be ordered in a Platinum trim that includes plush heated and cooled leather seats, wood trim, and a slew of high-tech safety features -- but it'll cost you over $50,000.
That's more than twice the price of a base-model F-150, and there's a lot of profit for Ford in that difference. Ford has rolled out that approach on many of its other models, and other mainstream brands like General Motors' Chevrolet have followed suit.
Meanwhile, some automakers traditionally associated with high-priced luxury are going in the other direction, releasing affordable models in search of new customers. Mercedes-Benz's compact CLA sedan starts at just over $30,000, and it has been a huge hit -- so much so that Cadillac's new president told reporters in Detroit that his brand is working on a competitor.
Motley Fool contributor John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
Sue Ogrocki/AP
The Keystone XL pipeline has been debated for years. Between various amendments being proposed and staunch opposition from President Obama, the fate is still uncertain about the 1,200-mile portion connecting Alberta, Canada, to the rest of the pipeline running down the center of the U.S. to the Gulf of Mexico. In the most recent update, the GOP-controlled House voted 252-161 in November to proceed with the pipeline.
Environmentalists tout Canada's oil sands as "dirty oil" and worry about environmental impacts during construction and in the event of pipeline leakage. Supporters argue it would provide the United States with a politically stable source of oil and a means for Canada to bring its oil to market. President Obama has a unique level of power over Keystone XL, as it requires a "presidential permit" due to its cross-country reach.
Obama has repeatedly said he would veto any Keystone XL legislation that arrives on his desk and even rejected the permit application for the pipeline approval three years ago. However, there are many ways the completion of the Keystone XL pipeline will benefit the U.S. and Canada, and it should be built now even while the price of oil is low.
Why Is Oil Sand Considered Dirty Oil?
Beyond the concern that pipelines can leak and pollute land and water supplies, there is concern over the production method for oil in Alberta as it's in the form of oil sands. Alberta's oil sands are the third-largest oil reserve in the world, after Saudi Arabia and Venezuela. Oil sand is a natural a mix of sand, clay, minerals, water and bitumen. The bitumen, a viscous oil, must be separated and treated before being used for fuel, and requires quite a lot of energy to extract and refine. Additionally, the process involves surface mining, which creates large holes in the ground, uproots trees and ships separated sand to landfills, although disturbed land does go through a reclamation process.
When it comes to greenhouse gas emissions, however, the State Department released an environmental review stating the heating required to separate the bitumen would likely not have an effect. It might not be preferable in some ways to traditional oil production, but North America can better compete with OPEC if this pipeline is built.
There are four major benefits of approving the Keystone XL.
1. Politically Stable Source of Oil
Our oil doesn't always come from friendly sources. As of 2013, the U.S. Energy Information Administration reported that 32 percent of U.S. oil imports came from Canada, while 38 percent came from OPEC countries. These countries include Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, the United Arab Emirates, Algeria, Nigeria and Angola, among others. The political dynamic between the U.S. and these countries, as well as other importers like Russia (5 percent in 2013) could change on a dime, and the U.S. experienced the fallout previously of having its oil imports tied to unfriendly exporters during the Arab oil embargo that skyrocketed prices and made it nearly impossible to obtain gasoline in the U.S. Domestic oil production has greatly changed since the 1970s, however, taking further advantage of the resources of a friendly exporter, Canada, and those at home in the form of shale oil could prevent geopolitical changes from affecting domestic gasoline access in the future.
Alberta's oil reserves have no value for the country if they can't be delivered to a market that will use it. The Keystone XL pipeline will move 830,000 barrels of crude a day from Canada's oil sands through Montana, South Dakota and Nebraska -- the heart of America's shale reserves -- to the rest of the Keystone pipeline, where the crude can be refined in the Gulf of Mexico. This move would help Canada make use of a resource with great financial potential.
2. Safest Form of Oil Transportation
Declaring any one form of oil transportation safest is largely dependent on whether your metric is death, oil released, land area or water contaminated, habitat disturbed or CO2 emitted. Considering the alternative of transporting oil from Canada via train or pipeline, pipeline wins in terms of speed, cost and spillage. About 70 percent of crude oil and petroleum in the U.S. is transported by pipeline -- and 97 percent is transported in Canada this way.
According to Forbes, an increase in oil production in North America has increased our use of train transportation for the crude oil. A lack of new pipelines to transport this increased supply is causing trains to get larger and the risk of spillage to increase. According to the Association of American Railroads, 400,000 carloads of oil were transported in 2013 via train compared to just 9,500 in 2008; in 2013, more crude oil was spilled in rail accidents in the U.S. than in the entire period of 1975 to 2012. Compared to oil tankards that can spill in the ocean and cause damage like that of the Exxon Valdez disaster, which is still causing damage in the 1,300 miles of ocean it polluted, new pipeline technology is advanced and safer.
It's true that pipeline spills have accounted for more damage than train spills in the past. The new Keystone XL pipeline will be built with the newest leak detection technology and boasts the safety of 57 new safety proceedures to its design. According to TransCanada's website, the Keystone XL pipeline will "be safer than any other pipeline constructed and operated in the United States," according to the final environmental impact statement the State Department and U.S. Pipelines and Hazardous Materials Safety Administration issued. According to the Keystone XL pipeline's official website, satellite technology will be implemented to monitor 20,000 points of data regarding the pipeline's operational conditions.
3. Temporary Job Opportunities
Although the Keystone XL pipeline doesn't promise long-term job opportunities (the State Department projects just 50 permanent jobs will be created) 42,100 jobs will be created for two years during the construction phase along with an estimate by TransCanada, the company building the pipeline, of 9,000 created positions. True, these jobs might not provide long-term security, but will still equip approximately 51,150 people with work experience that can be carried on to other opportunities.
4. Oil Prices Will Rise Soon
A new Washington Post and ABC News poll found that there's less urgency felt toward the passing of the Keystone pipeline, with just 34 percent of Americans responding that it should be built now. But really, the current plummet in the price of oil is actually the strongest reason why the pipeline should be built now.
Oil is abut $46 a barrel, representing a 58 percent drop in price since June 2014. This is largely due to an economic downturn in Europe and China, which has created an oil surplus of 1.5 million barrels per day. This surplus is driving down prices, though OPEC stated in late November it would not adjust its oil production levels, as many OPEC countries -- including its largest oil producer, Saudi Arabia -- have lower costs of production than other countries and do not want to lose market share by decreasing production, expecting others to do so.
Essentially, countries with lower production costs are willing to ride out a period of lower prices as smaller producers and countries with higher production costs cease to be profitable, opening up more market share when the supply decreases and prices increase once more.
So why should the U.S. be building the Keystone XL pipeline now? While oil prices are low, it's not financially feasible for North America to produce shale oil and refine oil sands. However, once prices increase, American oil production will follow and we'll want the infrastructure in place to support it. U.S. energy independence might not have arrived as scheduled, but there's still a reason to pursue it. Between unfriendly oil sources and the ability to put oil production jobs and needed infrastructure in the hands of Americans, it's a future that OPEC doesn't want to see and one we should pursue swiftly.
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Tax credits are especially valuable, because unlike deductions, credits reduce your total tax bill dollar for dollar. Whenever you can qualify to take a tax credit, it's always worth taking a close look to maximize its value and ensure that you remain eligible.
To help you home in on the credits that are most likely to help you, we looked at the latest data from the IRS -- from the 2012 tax year -- to see which credits people are most likely to take.
5. Retirement Savings Contributions Credit
More than 6.9 million taxpayers took the retirement savings contributions credit, which matches up to 50 percent of the first $2,000 in contributions that single filers make to an IRA or an employer-sponsored retirement plan at work, or $4,000 for joint filers. The dollar value of those credits was relatively low at just $1.2 billion, but that nevertheless saved an average of about $175 per taxpayer in tax liability.
The credit is only available to single filers making less than $30,000 or joint filers making less than $60,000, and the highest percentages apply only to those who meet even smaller income limits of $18,000 and $36,000, respectively. The purpose of the credit is to encourage everyone to save, and so if you set money aside, this credit is your reward for being financially prudent.
4. Foreign Tax Credit
About 7.1 million taxpayers claimed the foreign tax credit. But even though not many more people claimed it than the retirement savings contributions credit, the foreign tax credit had a much more significant financial impact, saving taxpayers $19.1 billion.
The foreign tax credit is intended to avoid double taxation on income earned from another country. It most often applies to international investments, where many brokers withhold foreign taxes automatically. For those whose only exposure to international investments is through mutual funds, it's sometimes possible to take a full credit against your U.S. taxes for any foreign taxes you pay. Yet complex rules can apply in more complicated situations, so this is an area where a good tax advisor can be extremely helpful.
3. Education Credits
More than 10 million taxpayers took advantage of credits designed to offset college and other educational costs. The vast majority of those taking educational credits used the American Opportunity Tax Credit, which applies to the first four years of college and can reduce your tax bill by up to $2,500. In some cases, you can get a portion of the American Opportunity Tax Credit back as part of your refund even if you didn't have enough tax liability to apply against it.
When you also combine the Lifetime Learning Credit, which pays 20 percent of up to $10,000 in annual educational costs for a wider range of schooling including graduate school and training classes, taxpayers collected about $19.3 billion from education credits, of which $8.8 billion was refundable. Those amounts make a huge difference to cash-strapped families sending kids to college.
2. Child Tax Credits
Families benefit from credits for having qualifying children, with 22.9 million taxpayers claiming the regular child tax credit and 20.5 million using the additional child tax credit as well. Combined, those two credits returned $55.4 billion to taxpayers.
The regular child tax credit pays up to $1,000 for qualifying children under age 17, of which there were more than 70 million, with phase-outs starting for singles earning $75,000 or more and joint filers with incomes of $110,000. Because the regular child tax credit is nonrefundable, the additional child tax credit fills in the gap for lower-income taxpayers, offering a refundable credit to those who have sufficient job income that makes up for any lost regular child tax credit amounts.
1. Earned Income Tax Credit
The most often-taken credit is the Earned Income Tax Credit, which appeared on 27.8 million returns. It's also a hugely important credit for Americans, paying out more than $1.02 trillion, or almost $3,700 per taxpayer claiming the credit.
The Earned Income Tax Credit is aimed at low- and middle-income taxpayers, with the highest amounts paid to those who have eligible children. It's also one of the few credits that is fully refundable, meaning that you can get a refund for up to the full amount of the credit even if you don't have any tax liability against which to apply it.
Credits are extremely valuable for taxpayers, and you should do everything you can to find credits you qualify for. If you do, they'll do a great job of reducing your tax liability as much as possible. We have also compiled a list of the most popular tax deductions.
Motley Fool contributor Dan Caplinger gives credit where credit is due. You can follow him on Twitter @DanCaplinger or on Google+. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
Investors interested in bitcoin shouldn't be troubled by the digital currency's sharp price decline, according to two of its most high-profile advocates.
Bitcoin, the online currency that is "mined" by computer operators who solve complex mathematical puzzles, has seen its value decline amid a series of scandals and setbacks. It most recently traded on Coinbase at around $271, well off the heady days of late-November 2013 when it hit $1,145, and down 67 percent over the past 12 months.
For people who love volatility, or like to trade between different markets and stuff, there's plenty there. But we're more taking a long-term view.
Tyler and Cameron Winklevoss -- the Winklevoss twins, or the "Winklevii" as they are sometimes referred to on Wall Street -- believe in the product and pitched it Monday to fund pros gathered at ETF.com's InsideETFs conference in Hollywood, Florida.
About that big price drop: Well, Tyler Winklevoss said there's no reason to fear.
"In the last few weeks the price has been kind of low. I view that as a buying opportunity. We have never sold bitcoin," he said. "For people who love volatility, or like to trade between different markets and stuff, there's plenty there. But we're more taking a long-term view."
The twins have a vested interest in the digital currency's future: They await regulatory approval of a bitcoin-based exchange-traded fund and recently announced the launch of Gemini.com, which will establish a centralized trading platform.
The site would pair with Winkdex.com, which aggregates prices from various bitcoin exchanges currently operating.
"This is our effort to bring bitcoin mainstream, to build it into a regulatory box," Cameron Winklevoss said. "When we think of Gemini.com, it will be like a Nasdaq for bitcoin."
The currency's biggest obstacle has been overcoming a multitude for bad headlines, from the collapse last year of Mt.Gox, which to that point had been the most well-known trading center, to another issue of bitcoin digital wallets being compromised at Bitstamp.
Tyler pointed out the difference between those two episodes in particular: Investors lost money when Mt.Gox collapsed, but Bitstamp customers were made whole.
"The narrative behind bitcoin has been dominated by bad behavior," he said. "The reality is bitcoin is filled with tons of talented developers building infrastructure."
WASHINGTON -- A gauge of U.S. business investment plans fell for a fourth straight month in December, a potential sign that slowing global growth and falling crude oil prices were starting to weigh on the economy.
Other data Tuesday, however, suggested the economy remained on solid footing. Consumer confidence vaulted to a near 7½ high in January and new home sales in December hit their highest level since June 2008.
"The drop in [capital expenditures] will weigh on growth, though stronger consumer spending should keep GDP from slowing too much," said Chris Low, chief economist at FTN Financial in New York.
The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.6 percent last month after a similar decline in November.
Economists, who had expected a 0.5 percent gain, said weak overseas demand for capital equipment as well as declining domestic demand for energy-related equipment were likely to blame. They also said a strong dollar was a factor.
The report came as construction and mining equipment-maker Caterpillar (CAT) reported a nearly 25 percent decline in fourth-quarter profit and warned that falling oil prices would hurt its business in 2015.
Chemicals company DuPont (DD) also forecast lower operating earnings for 2015.
Weak capital goods spending is likely to catch the attention of Federal Reserve officials, who started a two-day policy meeting Tuesday.
"This is ... evidence that the dollar's strength is starting to show up in terms of weaker orders, a new soft spot for manufacturing that perhaps will give some of the policymakers pause if not worry as they meet today," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
The report and Caterpillar's weak earnings helped to knocked down U.S. stocks. The dollar fell against a basket of currencies while prices for U.S. Treasury debt rallied.
Consumer Sentiment Index Jumps
Shipments of core capital goods, which are used to calculate equipment spending in the government's gross domestic product measurement, fell 0.2 percent last month after slipping 0.6 percent in November and dropping 0.9 percent in October.
It supports our view of continued strong job growth into the New Year and that rising wealth levels and lower gas prices are boosting household purchasing power.
That suggested a downside risk to the fourth-quarter GDP estimate, currently around a 3 percent annual pace. There is little doubt that spending on equipment took a step back in the fourth quarter after two quarters of strong back-to-back increases.
Still, the economy remains on firmer ground. In a separate report, the Conference Board said its consumer sentiment index jumped to 102.9 in January, the highest reading since August 2007, from 93.1 in December.
"It supports our view of continued strong job growth into the New Year and that rising wealth levels and lower gas prices are boosting household purchasing power," said John Ryding, chief economist at RDQ Economics in New York.
In another report, the Commerce Department said new home sales jumped in December to their highest level since 2008.
A strengthening jobs market is expected to stimulate the housing market this year after the sector lagged growth in the overall economy last year.
A fourth report showed a deceleration in house price gains. The S&P/Case-Shiller composite index of 20 metropolitan areas rose 4.3 percent in November from the prior year, the slowest since October 2012.
-With additional reporting by Richard Leong in New York.
FordFord has one factory in Dearborn, Michigan, making its 2015 F-150 pickup, and a second factory in Missouri is being retooled for production starting this spring.
When Ford Motor (F) reports its fourth-quarter and full-year 2014 earnings on Thursday, Wall Street analysts expect its fourth-quarter earnings to be down from the 31 cents a share it earned in the last quarter of 2013, as a surge in expenses in North America and challenges overseas weigh on the Blue Oval's bottom line.
Launching the F-150 Has Been Expensive for Ford
The profit pressures that Ford is facing in North America are short-term, and they might best be thought of as investments in the future rather than costs.
The biggest factor weighing on Ford's North America earnings is the huge costs related to the launch of the company's new 2015 F-150 pickup. With its new truck, Ford switched from steel to aluminum for its body panels, a weight-saving move intended to improve the new truck's fuel economy and towing capacity.
The move worked -- the new truck does indeed sport better towing capacity and fuel economy than its predecessor. But it's an expensive move, requiring elaborate and time-consuming changes to Ford's two truck factories that have resulted in a loss of about 90,000 units of production.
Production of the new trucks won't be up to speed until late spring, Ford says. Short supplies have limited Ford's truck sales, a concern given that the F-150 and its Super Duty siblings are Ford's most profitable products.
The upshot? Squeezed profits in the short term. Ford North America chief Joe Hinrichs said in September that his business unit's profit margin would be "at the low end" of the 8 percent to 9 percent range in Ford's official guidance. That's a big drop from the 11.6 percent operating profit margin it reported in the second quarter -- and a clear signal that Ford expected much of the squeeze to come at the end of 2014.
Ford Faces Challenges in South America and Europe
Meanwhile, Ford is facing challenges in two of its overseas business units. In South America, economic slowdowns in Brazil and other key markets led Ford to warn that the unit would lose $1 billion in 2014, as new-car sales across the industry have slowed sharply.
Ford is also facing a difficult road in Venezuela, where currency controls imposed by the government have hampered Ford's ability to pay its local suppliers. Last week, Ford said in an SEC filing that it expected to take a one-time charge of about $800 million to account for its business in Venezuela, which is effectively frozen for the time being.
Ford Europe is also facing challenges. New-car sales in Russia have dropped sharply on economic concerns. That has hurt Ford more than most, as the Blue Oval has made big investments in Russia in anticipation of long-term growth. Ford has had to lay off workers and reduce production significantly.
The good news for Ford in Europe is that cost reductions and an expanded product line have helped improve results in much of the rest of the region. The upshot will likely be a big loss for 2014, in the neighborhood of $1.2 billion, but a much smaller loss in 2015.
A Lower Profit for 2014, to Set Up a Higher One in 2015
Based on Ford's own guidance, investors should expect a pretax profit of about $800 million in the fourth quarter, and about $6 billion for all of 2014.
That's down significantly from the $8.6 billion in pretax earnings that Ford posted for 2013. But it reflects the costs of Ford's major investments in new products, particularly the new F-150, and the costs of its work to ensure longer-term profitability in its overseas business units.
All of that spending should set the company up very well for 2015. Ford's most recent guidance indicated that the company expects to post a profit between $8.5 billion and $9.5 billion for 2015. If that guidance holds, Ford investors should be well rewarded for their patience through a costly 2014.
Motley Fool contributor John Rosevear owns shares of Ford. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. Find out the easy way for investors to ride the new mega-trend in the automotive industry in our free report.
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President Obama's recent State of the Union was one of the best-delivered of the many speeches during his administration. I support a number of his policies, but his approach to helping additional lower- and middle-class children afford college -- by attacking the successful 529 college savings plan -- is outrageous.
529 Plans Help Slow Growth of Student Debt
The U.S. is experiencing the worst student debt crisis in history due in large part to the rising cost of higher education. These costs are sending more students than ever to loans. In its ninth annual report on student loan debt, the Institute for College Access and Success found nearly seven in 10 graduating seniors in 2013 left school with an average of $28,400 in student loan debt, an increase of 2 percent from 2012.
A 529 plan is an investment account in which you deposit after-tax money. Earnings on your investment grow tax-free, and you don't have to pay income tax when you withdraw the money as long as it is spent toward qualified educational expenses. Under the president's proposed plan, 529 accounts would become taxable, with the earnings portion of the withdrawal incurring income taxes even when the money is spent on college.
Why is Obama proposing to break one of the best tools that motivates families to save for their children's college education -- in many cases starting from when they are infants? If Congress ever passes such a proposal, I believe it will further increase the level of mile-high student debt and also hurt young workers' ability to save for retirement.
Saving for a Stepchild's College Education
Let's take my stepdaughter's account as an example. I have contributed $18,000, and the account is now worth $24,000. That $6,000 gain has come quicker than had I invested in a taxable brokerage account since the investment gains accrued tax-free, similar to a Roth IRA. Under the existing 529 plan rules, no portion of the money (neither the contributions nor the investment earnings) will be taxed if Rachel uses the money for qualified educational expenses.
According to Savingforcollege.com's Annual College Savings Survey, 59 percent of people who intend to open a 529 plan say that federal tax benefits are one of the top three reasons for doing so. Had the president's proposal been law at the time I considered opening a 529 account, I wouldn't have opened it. Why would I tie up after-tax money in an account limited to only educational expenses on which I would have to pay taxes on the earnings? I'd rather have the flexibility to save and spend that money on anything such as unexpected medical expenses. If the president's proposal become law, in my financial advisory and investment education practice I'd advise clients to skip 529 plans when saving for college.
Do 529 Plans Benefit the Affluent at the Expense of the Middle Class?
Some experts believe 529 plans, which are used by about seven million families, disproportionately benefit affluent families. According to surveys cited by the White House, 70 percent of 529 account assets are held by families earning over $200,000 per year. According to Robert Greenstein, of the Center for Budget and Policy Priorities, "The president's plan would limit a number of inefficient tax benefits that are heavily tilted toward upper-income families, including those for 529 plans." He adds, "Scaling back the 529 tax subsidy for high-income filers and redirecting the funds towards low- and middle-income filers who most need support to afford higher education is sound policy that would make higher education more affordable for more low- and middle-income families."
In my practice, I see plenty of people who are not affluent using 529 plans to help save for their children's education.
Let Your Voice Be Heard
The White House takes feedback using an online petition platform. If you wish to keep 529 plans tax-free (only future contributions would be subjected to the tax), you can add your name to this petition. Although it is highly doubtful the Republican Congress would pass the president's proposal, let your voice be heard.
Alamy
Last year was a rough one for investors in the largest Internet companies. Shares of Google (GOOGL) (GOOG), Amazon.com (AMZN) and Netflix (NFLX) all moved lower in 2014. One of the few winners among the dot-com leaders was Facebook (FB). The top dog among social networking websites saw its stock soar 43 percent last year, easily beating the market.
Its ability to keep moving higher in 2015 will be put to the test on Wednesday afternoon when Facebook reports quarterly results. There are a few reasons to be optimistic at a time when the company's lofty valuation finds it with plenty to prove. Let's go over a few of the things that could go right for Facebook.
1. Monetization Continues to Improve
With Facebook armed with 1.35 billion active monthly users as of the end of September, the market accepts that user growth is slowing. A majority of the Web-tethered world knows all about Facebook. The real growth will come from getting existing users to spend more time on the site -- and, more important, Facebook's ability to milk more revenue out of every visit.
We're already seeing that happen. Revenue and adjusted earnings climbed 59 percent and 73 percent, respectively, in the third quarter compared to the same period a year earlier. This kind of heady growth was possible despite a mere 14 percent year-over-year uptick in monthly active users, because folks are spending more time on Facebook and the company is doing a better job of monetizing its traffic.
It's a trend that should continue as advertisers keep paying more to reach Facebook's mobile audience.
2. History Is on Facebook's Side
Expectations are high for Facebook's financial results. Analysts see revenue climbing 46 percent with earnings growing at an even faster 55 percent rate. These are some pretty big shoes to fill for a company that's already ringing up $12 billion a year in revenue, but Facebook has historically been up to the task.
Let's go over how Facebook held up during the past four quarters.
Quarter
Earnings per share estimate
Actual EPS
Surprise
Fourth quarter 2013
27 cents
31 cents
15%
First quarter 2014
24 cents
34 cents
42%
Second quarter 2014
32 cents
42 cents
31%
Third quarter 2014
49 cents
43 cents
8%
Source: Thomson Reuters.
This is the kind of momentum that bodes well heading into Wednesday afternoon. Wall Street's holding out for a profit of 48 cents share, but the trend suggests that Facebook should find a way to once again deliver an upside surprise on the bottom line.
3. It's Time to Set the Stage for 2015
A blowout quarter isn't enough to send a stock higher. In fact, shares of Facebook slipped three months ago after an otherwise solid financial showing. With Facebook already commanding a market cap of roughly $215 billion, it needs to make sure that it paints a rosy picture of the future. When a stock is priced for perfection, the best way for it to move higher is to prove that it can exceed perceived perfection.
Facebook can do that. The social networking website can make big waves in 2015 if it's able to roll out lucrative video ads, get more companies to pay up for a premium presence and find a way to more effectively cash in on Instagram's booming traffic.
Yes, Facebook owns Instagram. It may also own more companies by the end of this year. It closed out the third quarter with $14.25 billion in cash and marketable securities. There will be opportunities for Facebook to put that money to work in 2015 to buy fast-growing companies that can grow even faster with Facebook's resources. Obviously, Facebook isn't going to reveal any future deals, but if it talks up the potential of more needle-moving acquisitions, you can be sure that it's negotiating in earnest. This could be another big year for Facebook investors, but Facebook itself will have to make sure that it inspires the necessary confidence.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Amazon.com, Facebook, Google (A and C shares), and Netflix. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
It's a question we've all heard when shopping: "Credit or debit?" It seems straightforward, just the cashier asking you what type of payment card you're using, but there's actually a lot more history to that question than you might think.
Debit and credit transactions are processed differently: Here's how MasterCard (MA) explained it in an emailed statement to Credit.com: "When you use a debit card and your PIN (personal identification number), the transaction is completed in real time, also known as an online transaction -- you authorize the purchase with your PIN and the money is immediately transferred from your bank account to the merchant. With a credit card, or using a debit card as credit, it's an offline transaction. The funds for offline transactions are deducted after the merchant settles the purchase with the credit card processor and typically take two-three days to be reflected in your account balance."
Issuers used to charge merchants different fees for accepting credit cards than for accepting debit card transactions with a PIN. Before the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, Sen. Dick Durbin added a provision, now called the Durbin amendment, that restricted interchange fees to 12 cents per transaction. By the time the bill was signed into law, the cap was set at 21 cents, much lower than the previous average of 45 cents per transaction. (On Jan. 20, the Supreme Court declined to hear retailers' challenge to that 21-cent cap.)
With the cap on interchange fees, banks saw their revenue source for things like debit card rewards and free banking dry up, which is why you're unlikely to find those things these days.
"There's several thousand community banks and credit unions, what the act refers to as unregulated, who can actually charge greater interchange on transactions," said Nick Barnes, senior vice president of retail banking at ACI Worldwide, a payments system company. The Durbin amendment only impacted financial service providers with $10 billion or more in assets. "That's why you go to these tiny banks you'll still see free banking and debit rewards."
Should You Choose Debit or Credit?
Credit cards and debit cards are very different products, each with their own advantages and drawbacks that should influence when and how you use them. As for hitting the "credit" button when you're using a debit card: It doesn't really matter.
Other than the changes banks may have made as a result changing interchange fees, choosing to use a debit card as credit doesn't really impact you. You often have the choice to use your debit card with or without the PIN, and how you use it is a matter of personal preference. Running a debit card as an offline transaction still ends up doing the same thing - taking money from your checking account - and it doesn't help you build credit, like using a credit card does.
NEW YORK -- U.S. single-family home price appreciation slowed to its weakest level more than two years in November as lean inventories and tight lending standards limited housing market activity, according to a closely watched survey released Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 4.3 percent in November from the prior year, the slowest since October 2012 although it matched analyst expectations. This compared with a 4.5 percent annual increase in October.
"With the spring home buying season, and spring training, still a month or two away, the housing recovery is barely on first base," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. "Prospects for a home run in 2015 aren't good," he added.
The 12-month home price growth rate in Cleveland was the weakest among the 20 cities tracked by S&P/Case-Shiller at 0.6 percent in November.
In contrast, Miami and San Francisco continued to lead all cities, posting 12-month gains of 8.6 percent and 8.9 percent.
On a monthly basis, S&P/Case-Shiller's seasonally adjusted home price index on 20 cities rose 0.7 percent, a tad stronger than 0.6 percent forecast by analysts polled by Reuters. This matched a revised 0.7 percent gain in October.
Excluding seasonal adjustments, home prices in the 20 cities tracked fell 0.2 percent, matching forecasts and accelerating from the 0.1 percent drop in October.
A broader measure of national housing market activity rose at a 4.7 percent clip on a year-over-year basis, compared with a 4.6 percent rate in October.
The seasonally adjusted 10-city gauge rose 0.7 percent in November following a revised 0.6 percent gain in October, while the non-adjusted 10-city index fell 0.3 percent after a 0.2 percent drop in October.
Dollar stores lure us in with rock-bottom prices. Sometimes you get what you pay for, but often the things they sell are good products at a tremendous discount -- a real bargain.
Money Talks News founder Stacy Johnson talked to a savings expert to find out what types of items you should definitely buy at a dollar store. Watch the video, and then keep reading for more dollar store deals.
1. Greeting cards. There is no reason to spend $4 to $5 or more on a greeting card when dollar stores typically have a wide selection available for a buck or less. You might not get textured paper or fancy extras such as ribbon, but the heartfelt message you write will be the same regardless of how expensive the card looks.
2. Party supplies. By some estimates, you can save up to 70 percent by using party supplies from a dollar store. Get plastic tablecloths, paper plates and cups, streamers and favors from the dollar store and save a bundle. Don't forget to look for Mylar/foil balloons, too. These are an absolute bargain and can easily sell for five times as much elsewhere.
3. Gift bags, boxes and wrapping paper. While you're getting your party supplies, look for gift bags and wrapping paper, too. You could end up paying two or three times more for gift bags and boxes at other stores. In addition, wrapping paper can be a steal. You might not get the same thickness of expensive paper, but for something that's going to end up in the trash, why pay more?
4. Seasonal decor. From extra ornaments for your Christmas tree to a scarecrow to stake in your front yard for the fall, dollar stores can have a surprisingly robust selection of seasonal decor. Pick up some bargain-priced items to decorate your house for less. But stay away from holiday lights; they have a poor track record of safety at discount stores.
5. Reading glasses. As we age, we often lose elasticity in our eyes and that makes it more difficult to focus on close objects. In many cases, a simple pair of reading glasses is all you need, and the reading glasses at dollar stores are as good as those found in other stores. However, if you have trouble seeing at a distance, it may be time to schedule an eye exam and see about getting a prescription pair.
6. Hair accessories. From elastic bands to bobby pins to headbands, you can find hair accessories at a fraction of the price at dollar stores. Combs and brushes can be a bargain, too.
7. Pregnancy tests. Grocery store pregnancy tests will set you back $10 to $15, but you can find them at some dollar stores for only a buck. You might be wondering whether a $1 pregnancy test is going to be accurate. That's a good question and, according to this news report, the answer is yes.
8. Vases and decorative bowls. Don't bother with other stores for vases and decorative bowls. The dollar store probably carries a number of styles at a price that can't be beat. You can use vases to skip the florist and make your own, much cheaper arrangements. Or spruce up decorative glass bowls to make inexpensive gifts for family or friends.
9. Mugs and glasses. Like vases and bowls, mugs and glasses are also a good buy at dollar stores. The quality is comparable to what you might get at Walmart or other mass merchandisers. As a bonus, you can typically buy only the items you need rather than being forced to purchase a set.
10. Dishware. Dollar stores also often have a nice selection of open-stock dishware. This isn't going to be top-of-the-line quality, but they're perfectly serviceable pieces. For those with little kids, dollar store dishes can be just what you need to get you through that phase of life when something seems to get broken in the kitchen on a weekly basis.
11. Storage containers. Plastic storage containers also get a thumbs up when it comes to great dollar store buys. In the grocery store, you can easily pay up to $5 for disposable containers. Get them for a buck at the dollar store instead. You can also find some great deals on storage bags, but be wary of off-brands that may not seal correctly.
12. Picture frames. If you're crafty, dollar store picture frames are an excellent buy. With a little paint or other decoration, bargain frames can look as nice on your walls as their more expensive counterparts. However, quality can vary widely. Check the joints to make sure they are secure and look for stray glue that may be difficult to remove.
13. Bagged or boxed candy. Checkout lane candy will likely be just as cheap, if not cheaper, at the grocery store, but movie theater-style boxed candy and bagged candy can be a bargain at the dollar store. Next Halloween, head there for your treats rather than paying supermarket prices.
14. Socks. Much of the clothing you find at dollar stores is of an inferior quality and not worth the money. One exception may be socks. Dollar store socks can be as good as department store varieties if you buy the right type. Look for ones made with acrylic or spandex for a comfy fit.
15. Washcloths and dish towels. Finally, the price of washcloths and dishtowels at the dollar store can't be beat. You need to be careful with some towels that won't be absorbent enough to dry dishes. However, even those work great as cleaning rags.
Did we miss anything? Leave a comment below or go to our Facebook page to tell us what you think are the best buys at the dollar store.
Cosmetics can cost you a pretty penny, but with a few simple steps, you can save your beauty products and your money from going to waste.
