Posts by Aaron Task

  • Fossil fuel divestment push hits Harvard...and beyond

    Aaron Task at Yahoo Finance 8 days ago

    In the 1980s, pressure from student groups over apartheid forced many universities to divest from South Africa. Today, activists are targeting a far larger target: The fossil fuel industry.

    The accompanying video is a from a live 'town hall'-style event I hosted on Friday featuring students on both sides of the debate, representatives from 350.org, a pro-divestment organizing group, and the independent Petroleum Association of America, an industry lobbying group, as well as other experts. 

    You can watch the entire town hall on the divestment movement here.

    Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at atask@yahoo-inc.com.

  • GOP pushes to repeal the estate tax: Misplaced priorities and bad politics

    Aaron Task at Yahoo Finance 10 days ago

    The House of Representatives is scheduled to vote this week on a bill to repeal the federal estate tax, a 40% levy on the heirs of estates worth over $10.9 million per couple and $5.43 million per individual. Given the White House will almost certainly veto any estate tax bill that gets through Congress, the vote is largely a symbolic one. But symbolism has meaning, especially in politics. Many conservatives refer to the estate tax as the "death tax" and say the law hurts the families of small business owners, notably farmers, and amounts to a "double tax" on income already levied by Uncle Sam. Liberals say the estate tax is necessary to prevent "a permanent aristocracy" as Rep. Richard Neal (D-MA) told The Associated Press. The reality is the estate tax will only hit about 5,400 estates this year, or roughly 0.2% of all deaths in the U.S., according to The AP. Without offsetting spending cuts, which the House bill does not have, a repeal of the estate tax would add $269 billion to the federal deficit over the next decade. While repealing the estate tax certainly appeals to the Republican base, you have to wonder about the political wisdom of this vote, given the current economic backdrop: Income inequality is at its highest levels since the 1920s, the average U.S. CEO makes around 300 times the average worker, upward mobility has stagnated (along with wages) and many Americans increasingly feel the "American Dream" is out of their reach.

  • Jim Rogers LOVES the U.S. dollar -- for now

    Aaron Task at Yahoo Finance 10 days ago

    Jim Rogers has long criticized the Federal Reserve for excessive money printing and warned massive U.S. government deficits will ultimately cripple America's economy. Many people think of him primarily as a commodity bull and gold advocate. But Rogers is a trader above all else and is "delighted" by recent strength in the U.S. dollar. "It's my largest currency position," he says in the accompanying interview. "I own it not so much because of the central bank but because they'll be more currency turmoil -- all sorts of turmoil. And in times of turmoil people flee to safe havens and many people still think the U.S. dollar is a safe haven." For the record, Rogers does not believe the dollar is a 'safe haven' -- but "since people perceive it as a safe haven I own the U.S. dollar. Of course, if the U.S. central bank is a little tighter than some of the other people, that too will add to the strength of the dollar."

  • Jim Rogers "absolutely" still bullish on China

    Aaron Task at Yahoo Finance 11 days ago

    A lot of water has gone under the proverbial bridge since 2007, when legendary investor Jim Rogers moved his family to Singapore, citing the region's huge potential. Of late, China's economy has stumbled badly even as its stock market has surged. Rogers is "absolutely" still as bullish on China today as he was back in 2007 when he published A Bull in China, one of his many books. "Whatever happens, my children are still speaking Mandarin," he says. "They're not going to stop speaking Mandarin and learn Danish or something." Overnight Wednesday, the Chinese government reported first-quarter GDP growth of 7% vs. the consensus estimate of 7% and 7.3% in Q4. The World Bank recently cut its 2015 forecast for Chinese GDP to 7.1%, roughly in line with the "new normal" President Xi Jinping discussed last year.

  • As good as it gets: Has the U.S. economy already peaked?

    Aaron Task at Yahoo Finance 11 days ago

    If this is it, please let me know. If this ain't love, you gotta let me go. - Huey Lewis & The News

    The U.S. economy hit the brakes at the start of 2015 by almost every measure. On Tuesday, the Commerce Departerment reported retail sales rose 0.9% in March, the first gain in fourth months but less than the consenus estimate for a gain of 1.1%. Retail sales excluding autos were also weaker-than-expected.

    In the face of all the dismal data, estimates for first-quarter GDP growth have fallen precipitously: the Atlanta Fed's GDPNow model is now forecasting zero growth in Q1, down from 2.3% in mid-February.

    Of course, we saw a similar drop in 2014 and the economy surged back in the second half of last year. In other words: Remain calm, all is well.

    But what if the consensus is wrong, as is so often the case? What if we've already seen the peak of the recovery as the charts below suggest?

     

     

     

  • 'All-Stars' of financial fraud: Tarkenton, Dykstra, Schlichter (oh, my!)

    Aaron Task at Yahoo Finance 16 days ago

    Former NFL cornerback William "Will" Allen was charged by the Securities and Exchange Commission this week with running a Ponzi scheme. Allen co-founded Boston-based Capital Financial Partners, which raised $31 million from investors and allegedly used the funds to pay for personal expenses and misled investors about terms of the loans.

    Professional athletes are often the target of financial scammers, but Allen joins a growing list of former stars who've been accused of perpetrating financial frauds, including:

    Fran Tarkenton

    The NFL Hall of Fame QB agreed to pay more than $154,000 in 1999 to settle SEC charges that he directed an accounting fraud at KnowledgeWare Inc. The former Minnesota Viking agreed to pay a $100,000 fine and $54,187 in restitution. Tarkenton, an elusive scrambler duing his playing days, did not admit any wrongdoing.

    Lenny Dykstra

    Art Schlichter

    Jim McMahon

    Willie Gault

    Doug DeCinces

    Tate George

    Daniel Ruettiger

    Christian Laettner

     

     

     

  • Twitter stock on a roll but "it's still a niche" product, Blodget says

    Aaron Task at Yahoo Finance 17 days ago

    Twitter shares jumped 4% Tuesday on the latest rumors of a buyout, with Google being named as one potential suitor. The rumor mill further had Twitter hiring Goldman Sachs to fend off the unsolicited bid - or bids depending on which rumor you heard. On paper, a Google-Twitter combination makes sense given Google's struggles in the social sphere and the recent search deal between the companies. And given Twitter CFO Anthony Noto is a former Goldman Sachs analyst, there's some logic to that part of the rumor as well.

    Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.

     

  • Fossil fuels under fire: Divestment push picks up steam

    Aaron Task at Yahoo Finance 22 days ago

    In the 1980s, pressure from student groups over apartheid forced many universities to divest from South Africa. Today, activists are targeting a far larger target: The fossil fuel industry. This week, Syracuse Universityannounced its $1.2 billion endowment plans to drop all fossil fuel stocks. A number of smaller institutions have made similar pledges, including Hampshire College, University of Maine and The New School. This week students at Bowdoin College in Maine staged a sit-in at the president's office in an effort to get the school to divest from fossil fuels. The Syracuse decision shows the divestment movement is "entering a new, more escalated phase," says Jamie Henn, communications director at 350.org, a non-profit focused on climate-related campaigns and projects. "It's a billion-dollar endorsement of the idea and takes us into another league in terms of the types of universities that are beginning to come on board." Henn expects "big actions" this spring on divestment in the University of California system, as well as "iconic East Coast schools" such as Swathmore and Amherst. Furthermore, he notes institutions such as the Rockefeller Brothers Fund, religious groups like the World Council of Churches and municipalities like San Francisco County have made similar divestment pledges. (A full list can be found here.) Meanwhile, there's a bill pending in the California State Legislature calling for CalPERS and CalSTRS -- which have over $400 billion in combined assets -- to divest from fossil fuels. In 2013, the giant state pension funds divested from gun manufacturers after the school shootings in Newtown, CT but have given a cool response to the fossil fuel divestment push so far. "We firmly believe that engagement is the first call of action, and results show that it is the most effective form of communicating concerns with the companies we own," CalPERS wrote on its Facebook page in December. "We look forward to continuing a meaningful dialogue with experts and stakeholders on how best to mitigate the portfolio risks associated with climate change to ensure the long term sustainability of the fund." Back on the college endowment front, Stanford's $21.4 billion endowment said last year it will divest from coal stocks thanks largely to the efforts of Tom Steyer, a billionaire former hedge fund manager and president of NextGen Climate, who is on the school's board of trustees. Steyer and NextGen Climate did not respond to requests for comment. But Stanford is viewed as a special case and most other universities with major endowments, notably Harvard and Yale, have declined to join the divestment movement. "While I share [students'] belief in the importance of addressing climate change, I do not believe, nor do my colleagues on the Corporation, that university divestment from the fossil fuel industry is warranted or wise," Harvard President Drew Faust declared in 2013. At issue here is whether investments are made purely for profits or as a representation of the investors' values. For many college students, certainly those agitating for the divestments, the latter matters most. Many financial experts disagree. "Investors seeking to comply with the goals of fossil fuel divestiture potentially incur three key types of costs" -- trading costs, diversification costs and compliance costs -- according to a recent study by University of Chicago law professor and Compass Lexecon chairman Daniel Fischel. Steven Davidoff, a law professor at U.C. Berkeley, puts it this way: "Endowments are there to make money for the school. Anytime you make decisions based not on returns but other [motives] you're going to risk not getting the money you need to make the school run."'   Opponents such as Davidoff further argue there's better ways for student groups to fight for the environment. "It might make everyone feel good but won't do a lot of good," he says of the divestment effort. "I doubt any coal company is going to go out of business. We have a legislative process and if you want to effect change that's what you do."

  • Pols keep giving corporate tax dodgers a free pass

    Aaron Task at Yahoo Finance 24 days ago

    Remember that $2.1 trillion of corporate tax profits parked overseas? Well, it's still there (and growing every day) and politicians are still trying to find a way to lure or compel companies to bring it home. On Monday, President Obama sent a $478 billion transportation billto Congress funded largely by taxing the overseas profits of large corporations. The bill would require companies to repatriate earnings at a 14% tax rate vs. the 35% corporate tax rate. A big reason you haven't heard much about this is the President bill's is largely considered DOA. "I just don't see this moving," says Greg Valliere, chief political strategist at Potomac Research. "The 14% tax rate is a total non-starter for the GOP. If it was 3% or 4%, that would get them interested; but the White House is looking for a big revenue grab, which has zero support in the GOP." Plus, Rep. Paul Ryan (R-WI-), chair of the House Ways and Means Committee "has been clear that any kind of repatriation deal would have to be part of comprehensive tax reform," Valliere notes. "And that's not moving till much later this year, if then." Long before year-end, the Highway Trust Fund is going to run out of money. Given the abysmal state of U.S. infrastructure and the lack of political will in either party to raise the gas tax, there is some bipartisan support for a repatriation bill to replenish the Highway Fund.

  • Walmart wage hike not enough for critics: 'Company still has a long way to go'

    Aaron Task at Yahoo Finance 24 days ago

    April is here which means thousands of Walmart workers are about to get a raise. Earlier this year, the retailing giant announced it would pay its hourly employees a minimum of $9 per hour starting this month and plans to up the minimum to $10 per hour in 2016 for all workers who complete a six-month training period. Walmart received a ton of positive attention for its announcement, including from President Obama who called CEO Doug McMillon from Air Force One to commend him for the act, which other chains such as Target have copied. But not everyone is satisfied with Walmart's actions when it comes to wages. "It's certainly a good thing to up people's pay, there's no question about it [but] this company has a long way to go to provide a livable wage," says Frank Clemente, executive director at Americans for Tax Fairness, a non-profit group that supports progressive tax reform. Walmart spokesman Kory Lundberg told Yahoo Finance that Walmart is "proud to have some of the highest starting salaries in retail,"adding it was "hard to comment" on the ATF report as he hadn't had a chance to review. (The report was embargoed until Wednesday 12:01 a.m. ET)