Now that I feel like a dull draw for cookies and milk by the tree rally money in my living room for the last two weeks Hirsch is free to explain what should I do with this new information.

First, I can better focus on my book. Hirsch says that his version of the rally is shorter in time, but makes up for it with efficiency and powers of prediction. On the return, the average gain in those seven trading days was 1.5 to 1.7% for half a century. However, if the market fails to rally, Hirsch believes that in itself is telling.
“If Santa Claus does not call the bears may come to Broad and Wall (Street),” says Hirsch. In 1999 and 2000, 2007-08, as well as harbingers of doom have been recently, as investors would be well served to listen.

Hirsch points out the limitations of basing a strategy to invest in seven trading days. And ‘data mining, and as Hirsch puts it, “if you torture the numbers long enough you can get them to say anything.” What these numbers tell us that it is better to pay at least some attention to trade at the end of next month.

Before dismissing the data gleefully watch the tape for the last decade and especially in 2011. It’s not really the place of any investor to get snobby about their testing methodology error, it is now?

One of the highlights of the weekend results were Macy (M) where 40% more people waited outside the flagship store in Herald Square in Manhattan society. According to CEO Terry Lundgren of Macy, customer enthusiasm was all part of what we are calling the strongest year the company in a decade.

Macy’s results has not been a surprise for Michelle Clark, who has Macy as its top pick in the space large retail stores. Retail analyst for Morgan Stanley says the company has been beating Breakout cover the ball all year.
“Macy continues to bear some of the best same store sales in department stores,” he says.

As is the case for all retailers, Macy key to success has been provided with the right product at the right time. Clark says that this year is all about fashion, in particular private label goods connected with the promoters celebrities. Basics (underwear, socks, etc.) are not in their original packaging, presumably suggesting the besieged American consumer is willing to pay for the goods to fashion, rather than grandmothers stuffed with socks socks.

For those of you who think that the well publicized affairs spells losses for retailers, says that Clark is not the case. “Macy’s EBIT (earnings before interest and taxes) margins will rise about 150 basis points, points this year,” he says. The key to reconciling deep discounts and promotion is the heavy emphasis on private label goods, which have much higher margins for retailers and customers are ignoring fundamental principles.

Another winner is Kohl’s (KSS), Clark says that he is winning with the same recipe as the Macy’s private label. On the contrary, and the name of Clark’s least favorite is JC Penney (JCP), which she says is under-spending on shopping, an insult to the customers, regardless of their level of disposable income.

The optimists argue that the U.S. solution to the stars unemployment and income inequality are more companies like Apple – the company resurgent technology that has revolutionized the digital industry and become one of the most important companies in the world.

Apple has created not only amazing, loved the products. It has created enormous profits, the vast wealth of shareholders, and more than 60,000 jobs.

If only America has produced more companies like Apple (and Google and Amazon and Facebook, and others), the story continues, the country’s problems will be solved. America can upgrade its vast, idle construction-and-production of the workforce, and our unemployment and inequality problems will be solved.
And it is true that more companies like Apple would certainly help the United States.
But we need more companies like Apple to engrave in our problems of unemployment and inequality.
Why?

Why Apple has in fact also exemplifies some of the reasons why we have such huge problems of unemployment and inequality:
• “Digital” companies such as Apple employ far fewer people (for profit) of traditional manufacturing companies.
• Apple + 60,000 jobs are not only in the U.S. – they’re spread all over the world.
• Apple ~ Extraordinary profit margin of 25% means that the benefits accrue mainly to its success to a relatively small group of shareholders, rather than a broad base of employees.
To put this in context, the Economist recently noted that Apple, Amazon and Google together employ 113,000 people – which is less than 1/3rd as many as a successful single-American history of the previous generation, GM used in the 1980.

A striking example of this is Apple’s new data center in North Carolina. Like other cities in North Carolina feet, Maiden was once a thriving textile mills and furniture of the house. Now is struggling with an unemployment rate close to 13%.
In the previous generation of American companies, from Apple’s decision to locate a new plant in Maiden would have been enormous transformation in the city. This is one reason Apple Girl lured with major tax breaks and sang for the company’s decision to put a data center there.
But, like Michael Rosenwald Washington Post report, Apple’s new data center in Maiden will only create 50 full-time jobs.
And most of them do not go to residents of Maiden, who lack the skills necessary.
The same can be said for data centers that Google and Facebook and other companies have recently built in North Carolina feet. They are useful, of course, and the city and its inhabitants are better with them than it would without them, but no longer make a difference to the local economy as the most important factories would be.
Most of the “manufacturing” job of these companies, meanwhile, are either super-high-tech job scheduling software or assembly of the work outsourced to China and other countries. And even in those countries, companies like Foxconn are working hard to replace the work with more efficient machinery.

Unlike many companies in the hardware business and manufacturing software, Apple’s profit margins are high enough to be able to afford to make some of its products in the United States, if you choose to do so. (Apple’s margins could be cut in half, and it would be even more profitable than other hardware vendors such as Dell).
But, for now, Apple has chosen to manufacture its products which can produce them more efficiently – outside of the United States and shareholders are benefiting as a result of Apple.
(It should be noted that Apple has every right to do so. Like it or not, we live in a global economy now, and Apple sells its products all over the world. Chinese citizens need jobs as much as Americans do, if not more. Beating a company to “navigation work abroad” knows of a vision of the ancient world, one that simply does not apply to the economy of today.)

But the point is that the hope that some more companies like Apple, Google and Amazon will restore the American economy to its former glory is out of place.

Companies to create amazing products and vast wealth of shareholders, but does not spread the wealth around to the industrial giant has previously done. We can talk all we want about how we need to “upgrade” our employees to make high-tech jobs, but even under the best circumstances, the process will take a long, long time. And up to the global production of pay-scales of a balance approach – which will probably be accomplished by the growth of China and our fall – companies will still have a huge incentive to build their products, where labor costs are cheaper.
So, yes, we celebrate the success of Apple, Google, Facebook and Amazon. But we must not delude ourselves thinking about going to solve our problems of unemployment and inequality.

Voices, which has since denied a bailout from the IMF for Italy.
New guidelines to be discussed at a meeting of finance ministers later this week, allowing the Fund to ensure financial stability by up to 30% of the struggling nations of debt offerings.

Comments weekends from German Finance Minister Wolfgang Schaeuble calling for quick changes of the Treaty to tighten budgetary discipline and unity among the members of the EU tax.

Growing expectations that the Fed will engage in another round of quantitative easing, has focused on the purchase of mortgage-backed securities as part of a global effort by central bankers to ease policy.
Henry and I have discussed these and related to John Mauldin, president of Millennium Wave Investments and author (most recently) Endgame: The End of the Debt Supercycle and how it changes everything.
Mauldin, who correctly predicted last May greek debt crisis would not be “content”, says the European crisis is nearing its peak, in one way or another.

“It’s getting to where it is an absolute crisis, shouting,” Mauldin says, citing debt offering nearly failed in Germany on Friday. Separately, Moody’s warned the “rapidly escalating” the crisis puts all the European sovereign debt rating downgrade risk, while the Organisation for Economic Cooperation and Development (OECD) cut its forecast for growth in Europe and in the world.

“We’re getting to the end,” says Mauldin. “What will they do, it is not clear [but] there must be a crisis to force it.
This is just the way we as human beings.’s Wait until we are forced to make a decision.”
The challenge in Europe, as always, is trying to get the EU 17-member nations to agree on the plan. Today, most notable is Schaeuble called for unity over budget and tax, which effectively means the Member States (including Germany) yielding sovereignty over economic issues to a central authority in Brussels. In other words, Europe would become more like the United States of America, but without the shared national identity and culture.

“What you’re dealing with here is this huge desire for unity in Europe and maintain the euro … and their desire to be Italian and Spanish and French historians,” says Mauldin. “And it is in conflict. It ’100% opposite.”
How all this plays out remains to be seen, to Business Insider, Henry outlines four ways the crisis should be resolved:

1. European leaders agree to more bailouts that can start on the road to a little ‘longer.
2. The euro zone will break.
3. Full integration with the creation of tax a real central bank and euro bonds.
4. Collapse.

For now, traders are betting on a happy ending, or at least they are betting against the worst scenarios and covering short positions that paid so well in the last two weeks. For the time being.

Fear that Europe’s debt crisis is infecting Germany, the strongest economy in the region, sent stocks reeling Wednesday.
The Dow Jones industrial average dropped 236 points, leaving it down 4.6 percent over the past three days. The Standard & Poor’s 500 index fell for the sixth day in a row, its worst losing streak since August.

The Dow Jones industrial average lost 236.17 points, or 2.1 percent, to close at 11,257.55.
The Standard & Poor’s 500 index dropped 26.3 points, or 2.2 percent, to close at 1,161.79.
The Nasdaq composite index fell 61.20 points, or 2.4 percent, 2,460.08.

For the week to date:
The Dow is down 538.61, or 4.6 percent.
The S&P 500 is down 53.86, or 4.4 percent.
The Nasdaq is down 112.42, or 4.4 percent.

For the year to date:
The Dow is down 319.96, or 2.8 percent.
The S&P 500 is down 95.85, or 7.6 percent.
The Nasdaq is down 192.79, or 7.8 percent.

Fitch said a deepening recession makes it “much more challenging” for the government to cut the budget deficit but it still expects fiscal goals to be met both this year and next.
“However, the risk of slippage – either from worse macroeconomic outturns or insufficient expenditure controls – is large,” Fitch said.

The challenging economic environment was clear in a Reuters poll on Thursday, where economists forecast Portugal’s economy will contract by 2.9 percent next year, the deepest recession since the 1970s, and 1.6 percent this year, in line with the government’s estimates.

Portugal’s 10-year bond prices plunged, sending yields surging more than 100 basis points to 13.85 percent — the second highest level in the euro zone after Greece. The spread to German Bunds also rose more than 100 basis points to 1,168.

The downgrade of Portugal came after the dramatic deterioration of the euro zone crisis in recent weeks as it spread to bigger countries like Italy and Spain.

“The worsening regional outlook helped inform the downgrade (of Portugal),” Rabobank said in an analyst note. “This, in turn, underlines the mounting risk of systemic downgrades.”

Portugal sought a 78-billion-euro bailout from the European Union and IMF earlier this year and has adopted sweeping austerity measures to bring public accounts under controls.

Under the loan program Portugal must cut the budget deficit to 5.9 percent of gross domestic product this year from around 10 percent in 2010. Next year it must cut the deficit further to 4.5 percent.

STATE COMPANIES A RISK

Fitch said the state-owned “enterprise sector is another key source of fiscal risk” and has caused a number of upward revisions to the country’s debt and budget deficit figures this year. The government has said there was an unexpected fiscal shortfall of about 3 billion euros this year.
“Given these downside risks, Fitch sees a significant likelihood that further consolidation measures will be needed through the course of 2012,” Fitch said.

It sees Portugal total debt peaking at 116 percent of GDP in 2013 from 93.3 percent at the end of last year.
Filipe Garcia, an economist at Informacao de Mercados Financeiros, said that while the downgrade does not change the government’s financing conditions as it is under a bailout, it could worsen the situation for companies.
“Where (the downgrade) has an impact is on companies, such as banks and other issuers like EDP or Brisa, whose ratings are greatly influenced by the sovereign rating, leaving them in a more difficult situation,” said Garcia.
The agency said Portugal’s debt crisis poses big risks for the country’s banks. “Recapitalisation and increased emergency liquidity provision from the ECB to Portugal’s banks will, in Fitch’s view, be needed and provided,” it said.
Under Portugal’s bailout, 12 billion euros has been set aside for funding banks if necessary.
Fitch said a worsening fiscal or economic situation could lead to further downgrades. “Furthermore, although Portugal is funded to end-2013, sovereign liquidity risk may increase materially toward the end of the program if adverse market conditions persist,” Fitch said.

The government hopes to return raising debt in financial markets at the end of 2013.

(Additional reporting by Patricia Rua; Editing by Toby Chopra/Anna Willard)
By Axel Bugge

HSBC’s preliminary China manufacturing survey dropped to a 32-month low in November, signaling a contraction. The Purchasing Managers Index hit 48 on a 100-point scale, declining from October’s expansionary 51. Forecasts had estimated a 50.1 result, just high enough from the 50 level to make it an expansion versus a contraction, according to CNBC.

According to a HSBC economist, the November data suggested industrial production would moderate to see annualized growth rates of 11 percent to 12 percent in the future months while domestic and external demands temper; however, the data did little to suggest a contraction in China.

Investing Insights: Are Precious Metals Holding These Key Support Areas?
On Tuesday, the Federal Communications Commission’s chairman, Julius Genachowski, moved toward blocking the proposed $39 billion AT&T and T-Mobile USA merger. He referred the matter to an administrative law judge for a hearing that would require AT&T to show the proposed deal was “in the public interest.”
This came after the FCC determined it would hurt consumers, cut jobs and make an “overly concentrated” wireless phone industry. Sprint and Verizon are happy with the new challenge.

In the third quarter, China became the world’s largest smartphone market by volume, according to a report by Strategy Analytics. This surpasses the U.S. and in the report, it disclosed that China’s smartphone shipments increased 58 percent last quarter to 24 million units vs. the U.S.’s 23 millions units, representing a 7 percent decline.
Pandora Media Inc net income for the company was $638,000 (0 cents per share). The company reported a loss of $1.77 million (15 cents per share) in the year-ago quarter. Revenue rose 99% to $75 million.
Investing Insights: Pandora Media Inc Earnings Cheat Sheet: Swings to a Profit.

Wednesday’s Early Hot Stocks

Deere & Company : Net income for the farm and construction machinery company rose to $669.6 million ($1.62 per share) vs. $457.3 million ($1.07 per share) in the same quarter a year earlier. This marks a rise of 46.4% from the year earlier quarter. Revenue rose 20.4% to $7.9 billion from the year earlier quarter. DE shares recently traded at $75.39, up $3.47, or 4.82%. Its market capitalization is $31.21 billion. They have traded in a 52-week range of $59.92 to $99.80. Volume today was 708,699 shares versus a 3-month average volume of 5,170,570 shares. The company’s trailing P/E is 12.41, while trailing earnings are $6.08 per share.

Investing Insights: Deere & Co. Earnings Cheat Sheet: Double-Digit Revenue Growth Continues.
Nokia Corporation : British carriers Vodafone and Orange are seeing healthy Lumia 800 sales. NOK shares recently traded at $5.60, up $0.04, or 0.72%. Its market capitalization is $20.78 billion. They have traded in a 52-week range of $4.82 to $11.75. Volume today was 3,020,968 shares versus a 3-month average volume of 28,175,300 shares. The company’s trailing P/E is 23.05, while trailing earnings are $0.24 per share.

Groupon, Inc. : Groupon opens at $18.60, well below the $20 IPO less than 3 weeks ago. GRPN shares recently traded at $19.77, down $0.3, or 1.49%. Its market capitalization is $12.61 billion. They have traded in a 52-week range of $19.76 to $31.14. Volume today was 140,218 shares versus a 3-month average volume of 6,714,430 shares. The company’s trailing earnings are $-2.17 per share.

Investing Insights: Dow Jones 30 Index Stocks: Quarterly Earnings Recap.
Google Inc. : Larry Page announced the termination of 6 more products: Google Gears, Knol, and renewable energy sources. GOOG shares recently traded at $575.76, down $4.24, or 0.73%. Its market capitalization is $186.48 billion. They have traded in a 52-week range of $473.02 to $642.96. Volume today was 85,093 shares versus a 3-month average volume of 3,185,360 shares. The company’s trailing P/E is 19.63, while trailing earnings are $29.34 per share.
Boston Scientific Corporation : Boston Scientific’s key “Promus Element” heart stent has gained FDA approval. The product will replace the Promus stent BSX now co-markets with Abbott Labs . BSX shares recently traded at $5.59, up $0.28, or 5.27%. Its market capitalization is $8.28 billion. They have traded in a 52-week range of $5.26 to $7.96. Volume today was 836,187 shares versus a 3-month average volume of 20,077,900 shares. The company’s trailing P/E is 14.75, while trailing earnings are $0.38 per share.
Don’t Miss: These Big Banks Face New Stress Tests.

Wednesday’s Trending Stocks
The Dow Jones Industrial Average is trading at 11,334 and the S&P 500 Index is trading at 1,169. Here are the most popular and buzzing stocks on Wall Street today:
Deere & Company : Shares of Deere & Company are trading higher 3.43% today. Deere & Company manufactures and distributes a range of agricultural, construction and forestry, and commercial and consumer equipment. The Company supplies replacement parts for its own products and for those of other manufacturers. Deere also provides product and parts financing services.

TiVo Inc. : Shares of TiVo Inc. are trading higher 4.7% today. TiVo Inc. provides a subscription-based service enabled by a personal video recorder. The Company’s service allows viewers to locate and record multiple shows, control live television, choose viewing preferences, and access their customized lineup of shows. TiVo’s service also serves as a platform to deliver television programming, advertising, and in-home commerce.
Pandora Media Inc : Shares of Pandora Media Inc are trading lower 9% today. Pandora is an internet radio station generating playlists based on a user’s favorite artist or song. Pandora’s service, free to its more than 80 million registered users and available only in the US, is supported by local and national advertising. Pandora chief strategy officer Tim Westergren founded the company in 2000.

Ship Finance International Limited : Shares of Ship Finance International Limited are trading lower 3% today. Ship Finance International Ltd. owns, and charters out, ships. The Company’s fleet includes crude oil tankers, oil/bulk/ore vessels, dry bulk carriers, and jack up oil rigs.

Frontline Ltd. : Shares of Frontline Ltd. are trading lower 12% today. Frontline Limited owns a fleet of very large crude carriers and Suezmax tankers that transport crude oil and oil products between ports. The Company’s vessels are managed by ship management companies. Frontline conducts activities worldwide.

Boston Scientific Corporation : Shares of Boston Scientific Corporation are trading higher 2% today. Boston Scientific Corporation develops, manufactures, and markets minimally invasive medical devices. The Company’s products are used in interventional cardiology, cardiac rhythm management, peripheral interventions, electrophysiology, neurovascular intervention, endoscopy, urology, gynecology and neuromodulation.
Diana Shipping Inc. : Shares of Diana Shipping Inc. are trading lower 2% today. Diana Shipping Inc. owns and operates a fleet of dry bulk carriers. The company transports iron ore, grain and other dry cargoes along worldwide shipping routes.

Medtronic, Inc. : Shares of Medtronic, Inc. are trading lower 1% today. Medtronic, Inc. develops therapeutic and diagnostic medical products. The Company’s principal products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, heart failure management, heart valve replacement, malignant and non-malignant pain, and movement disorders. Medtronic’s products are sold worldwide.

Campbell Soup Company : Shares of Campbell Soup Company are trading flat today. Campbell Soup Company, with its subsidiaries, manufactures and markets branded convenience food products. The Company’s core divisions include soups and sauces, biscuits and confectionery, and foodservice. Campbell’s distributes its products worldwide.
Piedmont Natural Gas Company Inc. : Shares of Piedmont Natural Gas Company Inc. are trading lower 1% today. Piedmont Natural Gas Company, Inc. is an energy and services company that primarily transports, distributes, and sells natural gas. The Company serves residential, commercial, and industrial customers in North Carolina, South Carolina, and Tennessee. Piedmont also, through subsidiaries, markets natural gas to customers in Georgia, and distributes propane in various states.

Wall St. Cheat Sheet

“They think we’re just a bunch of Indians,” said Carlos Rodriguez, an activist in Union Sindical Obrera (NYSEArca:USO), which has led protests at Campo Rubiales, a partnership between Canada’s Pacific Rubiales (Toronto:PRE.TO)(PRU.CN) and Colombian state oil company Ecopetrol (ECO.CN)(NYSE:EC).

“We proudly have indigenous ancestry but we’re not a bunch of bare-asses with sandals and arrows like when the Spanish arrived. We’re civilized.”

When Ecopetrol’s chief executive, Javier Gutierrez, visited New York in September, in the middle of the protests that shut down the Rubiales field, he described them as “growing pains.”
“When you grow this fast, it is natural to face some resistance,” he told reporters at the Plaza Hotel before spending the rest of the day with investors and analysts.

Pacific Rubiales declined to comment.
Rodriguez’s anger is shared by many of the workers of Puerto Gaitan, a product of living in company camps while on 21-day contracts and the grinding poverty of the town, where social services remain depressed despite receiving $50 million a year in oil royalties.

What should be Colombia’s boom town has become a place, workers say, where dreams of economic security come to die.
Puerto Gaitan, population 20,000, lies roughly 200 miles from Bogota in the plains below the eastern slope of the Andes. As the nearest town to Campo Rubiales, Colombia’s largest oil field about 100 miles away, it is ground zero in the fight to share Colombia’s oil wealth, the place where workers gather before and after their 21-day stints.
They are paid about $550 for that time plus nine days off, and say they often have little guarantee when they will be invited back.

Of some 12,000 workers at Campos Rubiales, about 1,500 form part of the permanent workforce. The rest are hired on temporary contracts. USO says it represents about 3,000 workers in both categories, and rival labor union UTEM claims 1,400.

Workers complain they are hired temporarily to perform core functions of the oil business, which denies them benefits and lowers company labor costs. The hiring is done through intermediaries such as cooperatives or service companies.
USO says the practice violates a side agreement on labor rights that is part of Colombia’s free-trade agreement with the United States. Democrats in the U.S. Congress only approved the pact last month after the labor deal was negotiated.

Rhett Doumitt, a representative of the U.S. labor federation AFL-CIO who is monitoring compliance with the free-trade agreement in Puerto Gaitan, said companies are violating Article 63 of Law 1429, the side agreement, through their repeated use of contract workers, denying workers the rights they would enjoy as full-time hires.
“It’s a matter of principle. They don’t want to relinquish the subcontracting because it’s so profitable, not just for oil industry but for every industry in Colombia,” Doumitt said.

Ecopetrol did not answer questions about the labor law. Pacific Rubiales did not respond to any queries.
Colombia produces nearly 1 million barrels per day (bpd), nearly double the amount from 2005, and Campo Rubiales is on track to account for 25 percent of the national total by 2012.

Production is expected to keep climbing. From an oil prospector’s point of view, Colombia is largely unexplored.
‘CLEAN BARRELS’
On his trip to New York, Javier Gutierrez made a pledge.

“We want clean barrels without accidents, without environmental incidents, with normal labor relations,” the CEO said, adding Ecopetrol also aims to ramp up output to 1.3 million bpd by 2020 and maintain a 17 percent profit margin.
Ecopetrol recently posted quarterly net profit of $2.2 billion, the highest in its history and good for a 29.8 percent profit margin.

During a period of calm in the labor conflict last month, Gutierrez, Pacific Rubiales CEO Ronald Pantin and Energy Minister Mauricio Cardenas flew with a host of dignitaries and journalists to the private airstrip at Campo Rubiales, which was guarded by army and police forces.
“This is the best chance we have to become a developed country,” Cardenas said. “Colombia is going to be an example, showing the world it’s possible to firmly develop its energy resources while the entire population prospers.”
Pantin went further, telling workers, “Pacific Rubiales’s intent is not to make money, it’s to leave a mark on society.”

A reporter asked Pantin if he had the same message for shareholders. “My intent is to make money,” he responded, “but these days any responsible company in the world has to have social responsibility and environmental responsibility. I think my shareholders would be the first to agree.”
Clearly labor peace is good for profits. Ecopetrol cannot meet its production goals if protesters shut down oil fields.
“The problem with workers is the more you give them the more they want. And the more successful you get, the more they want again. They can read headlines when you make $200 million in a quarter,” said Rupert Stebbings, country manager in Colombia for the Latin American brokerage Celfin Capital.

Pacific Rubiales made a net profit of $194 million in the third quarter, and Stebbings said it would still break even if oil were at $30 a barrel. Benchmark Brent crude traded at around $107 on Wednesday.
“In the grand scheme of things, labor is relatively little with regard to the operating costs,” said Matt Portillo, an associate at merchant bank Tudor, Pickering, Holt & Co.

Oil workers around the world are often paid a premium to travel to remote locations in high-risk jobs. Oil workers at Campo Rubiales are guaranteed around $550 per month, roughly twice the country’s minimum wage.
Workers characterized the wage as “miserable”. They complain of worker tents where 100 or more men sleep on cots and the nearest bathrooms are 100 meters away.

“The workers are assigned to concentration camps,” said Sebastian Bedoya, 60, a pipeline worker who said his temporary contract was not renewed after the company discovered his union activism. “You have to get up at 3 in the morning if you want to get a shower. Otherwise the line is too long and you can’t make it to breakfast at 5.
“You know what’s the worst? The company calls us to start work on a certain day, and when we arrive they make us wait another three or four days before we can start.”
So they wait in Puerto Gaitan, crashing in cheap motels, their anger building as they question where the $50 million in royalties are being spent.

“This conflict is polluting all of Colombia,” said Jaiber Alfonso Mendez, 30. “This situation will have repercussions throughout the country. This is going to spread.”

(Additional reporting by Julia Symmes Cobb; Editing by Kieran Murray)

By Daniel Trotta

With the end of 2011 fast approaching, now officially time to consider the possibility of some movement that will reduce tax bill this year. However, you do not want to take any action that could increase the 2012 tax bill by as much as you could save this year.

In this regard, the key question is whether you will make more money or more next year. The answer will determine your marginal bracket 2012 federal income tax, you need to know to make the best design work for the rest of this year.

Loser sell shares held in taxable accounts

Loss on sale of investments (currently worth less than you paid for them) income tax at the firm can reduce the tax burden since 2011 you can deduct losses from capital gains from one year to date . You can also deduct up another net capital loss $ 3,000 (or $ 1500 if you are married and file separately) with the ordinary revenues of salary, bonuses, self-employment, food, or anything else.

Any excess net capital loss is carried forward for years to come and put you in position for the tax savings in 2012 and beyond.

Set Up Loved Ones to pay the tax rate of 0% on capital income

For 2011, the federal tax rate on capital gains and long-term qualified dividend income is 0% for profits and dividends that fall within the rate ranges from 10% to 15%.

As your tax bracket may be too high to take advantage of 0%, you probably have relatives or family members who are in two tranches. Consider giving these people appreciated stocks or mutual funds. You can sell shares and 0% tax on the earnings of long-term results. Remember, their gains will be long term until the period of ownership, longer period of ownership of the gift recipient is equal to at least one year and one day.

The price is a stock to pay dividends paying the dividends is another tax-smart idea. As dividends are included in the gift recipient of 10% or 15% bracket, which will be eligible for federal tax rate of 0%. However, be aware that if you give an asset of over $ 13,000 in 2011 to a single recipient of the gift will be cut in the federal unified gift of $ 5,000,000 and property tax exemption ($ 5,120,000 for 2012 ). However, you and your spouse together can give up to $ 26 000, without any negative effects on your respective franchises.

Caution: If the gift recipient is under 24 years, the dreaded Kiddie tax rules could potentially cause some capital gains and dividends to be taxed at a higher rate of a parent. Cancel that.

Traditional IRA Roth IRA conversion

The best scenario for this strategy is when: (1) your traditional IRA is (or was) responsible for the action and shellac the 2008 crisis in equity markets and / or stock market volatility this year, and (2) should be in the tax bracket in retirement or more.

If the traditional IRA is worth much less once the tax hit by converting it into a Roth account is also significantly less. This is because the Roth conversion is treated as a taxable liquidation of the traditional IRA followed by a non-deductible contribution on behalf of Roth.

After conversion, all income and gains that accumulate in the account, Roth and all withdrawals are federal income-tax free, provided you adhere to the requirements of tax-free withdrawals. This avoids having to pay high tax rates for withdrawals taken during retirement.

As happened last year, there is no limitation on the income of Roth conversions. Even billionaires can make them!

Attention: Special arrangement for 2010 conversions that allowed you to spread the taxable income resulting from over two years (50% in 2011 and the remaining 50% in 2012) is not available for 2011 conversions. You must declare all income on the conversion back in 2011. So if you make a conversion last year and another study this year, remember that you have a double portion of income on the statement of the conversion of this year. This could grow into a higher tax bracket and make 2011 the idea of ​​conversion less attractive.

Giving to charities

For those whose charitable instincts are stronger than the economy, here are two suggestions:

Donate appreciated charitable donations in cash and stock losers Sale

If by some miracle you enjoyed part (which means they are now worth more than you paid for them) that I had for over a year, charitable donations IRS-approved. You can usually request a charitable contribution deduction in detail the full market value at the time of the gift and avoid capital gains tax hit. On the other hand, do not stock a loser. They sell the book capital losses, and give the proceeds of the money from the sale. This way, you can write in general, the full amount of the donation money, keeping the savings in capital tax loss for you.

Warning: You must itemize tax deductions for charitable donations for the benefit of savings, unless you make them out of the IRA.

Donate to charity of your IRA

Congress restored a provision that allows up to $ 100 000 in charitable donations directly from your IRA for 2011 – if you are 70 years old by the end of the year. These direct contributions to the IRA distributions are called qualified charitable or QCDS. Donations made in this way does not directly affect the tax burden because QCDS are exempt from taxes and deductions are not allowed for them. However, QCDS count as withdrawals for purposes of meeting the required minimum distribution (RMD) rules that apply to traditional IRA. Therefore, taxes can be avoided by ensuring that tax instead of RMDS QCDS tax, and this benefit is available if you itemize deductions or not. IRA if the spouse owns and finished 70 years, he or she is entitled to a separate $ 100 000 for 2011 QCD.

Stock indices fell Monday as the political crisis in Italy has sparked the crisis, regardless of the debt in the euro area could consume the region’s third largest economy.
Italian reference bond yields reached their highest level since 1997, reaching levels seen as unsustainable, before a crisis on public finances vote in parliament Tuesday.
Italian Prime Minister Silvio Berlusconi has one day left to win the undecided members of parliament and stop a group of rebels threaten to topple his government in a game on its failure to adopt reforms to defuse a debt crisis.

Meanwhile, the euro area finance ministers to accelerate work on the construction of a relief fund to strengthen its credibility in the market by the end of November, a month before.
S & P 500 fell 7.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones average futures lost 83 points, while Nasdaq 100 futures dipped 9.5 points.
Greek political leaders will have to choose who will lead a new coalition on Monday after Prime Minister George Papandreou has sealed an agreement with the opposition of a coalition to approve an international bailout.

With the U.S. economic calendar this week and the light earnings season winds down, the debt crisis in the euro area should collect most of the attention of investors this week.
Companies must submit earnings on Monday include Priceline.com Inc. and Sysco Corp.
In new business, the consumer electronics chain Best Buy Co Inc is buying British partner Carphone Warehouse Group Plc for 1.3 billion and disposal plans for a chain of megastores in Europe.
The euro and global stocks fell on Monday the political uncertainty in Italy has prompted investors to reduce exposure to riskier assets.

European equity markets compared to the losses in the market intensified Monday morning speech in Italy that Berlusconi would resign immediately, easing fears about the country’s ability to cope with its debt pile.