Uploaded by CapitalAccount on Mar 19, 2012
Welcome to Capital Account. Apple announced today that it will pay a dividend and begin to buy back its own stock ahead of questions regarding what it would do with this huge 100 billion dollar stockpile of cash. This amid hints that the new iPad has hit ever new records. Apple has really become a symbol of American innovation and America’s success in the software and technology space. But with products made in China, it is also a symbol of where America no longer competes as it once did. We’ll look at what that means for the US economy with our guest, CIO of nine-points capital partners and author of “The Day after the Dollar Crashes,” Damon Vickers.
And speaking of the dollar, can the federal reserve continue its practice of keeping interest rates at near zero for at least two more years as promised, or will it be forced to begin raising them? This is the question that the latest Fed survey finds that nine out of ten market participants don’t believe the Fed will wait 2 years. In fact, more than fifty percent believe the first fed interest rate hike will come by 2013. “There is no way the Fed will fulfill its pledge of keeping rates at present levels until 2014,” wrote Rob Morgan of Fulcrum Securities in response to the survey. “I’m shocked that some market watchers are still talking about another round of quantitative easing…The big risk for the Fed is falling behind the inflation curve.” So whose right, the interest rate bulls or the interest rate bears? Damon Vickers has been very bearish on the dollar, as his book suggests, and he has been bullish on gold, but the dollar’s strength has surprised many bears of the past few years. We’ll get his take on where he thinks the dollar is headed, as well as gold, us treasuries, and much more.
And the US senate is set to take up the “jump start our business start-ups” bill, otherwise known as the “Jobs Act.” But what is this legislation really encouraging? For example, the bill contains a provision that would increase the number of investors who can own shares of private companies and exclude employees from the count. But by counting “shareholders of record” instead of “beneficial shareholders,” the bill preserves a loophole that companies could potentially use to attract an unlimited number of investors without going public (known as the “Facebook loophole” as Goldman Sachs tried to use this in a plan to create an SPV that could pool money from its clients in order to create a single shareholder, and thus skirt normal disclosures required for companies filing IPOs). Our guest Damon Vickers, is a proponent of entrepreneurship, so we will ask him what he thinks of this legislation, and if he feels it genuinely helps small businesses in this country.