“European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.

Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.”

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“Traders figuring out their September trading strategies should definitely take note.

I’m not the first commentator to note September’s dismal seasonal tendencies, of course. But what I found particularly surprising: The odds are against September even in years like the current one — in which the stock market is rallying strongly, and coming a few short weeks prior to a presidential election.

Those at least are the conclusions that emerged upon feeding into my PC’s statistical software the data for the Dow Jones Industrial Average DJIA -0.54%   back to 1896, when that benchmark was created.”

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“Retirees hoping to live on the proceeds from their 401(k) savings or similar venues are due for a big surprise, as such holdings aren’t enough to sustain a decent lifestyle, which puts many aging Americans ill prepared for retirement, said John Bogle, founder of The Vanguard Group.

In an interview with USA Today, when asked what worries him the most, Bogle replied “the coming train wreck in the financial system.”

Too many people have not prepared enough for retirement.”

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“As fear that the euro will unravel rises, Spaniards are pulling their cash out of banks and leaving the country, according to The New York Times.

One of the most worrisome trends is that the educated and entrepreneurial professionals have started withdrawing their money.

“No doubt there is a little bit of panic,” Jose Garcia Montalvo, an economist in Barcelona told The Times. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”

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“(Reuters) – Central Falls, in Rhode Island, is close to emerging from bankruptcy with a plan that hammers its retired municipal employees but leaves bondholders unscathed, in a contrast with other recent U.S. municipal bankruptcies.

On Thursday, a state-appointed receiver overseeing the finances of the tiny, impoverished city is expected to win court approval for a plan that rescues Central Falls from financial collapse and should balance its budget for at least the next five years.

Unlike the approach of some other U.S. states such as California, which left struggling cities to try to fix their finances on their own, the plan for Central Falls reassured the credit markets, but scarred the city.

The smallest city in Rhode Island and the only one ever to file for bankruptcy will emerge with powerless elected officials, property owners facing tax hikes every year and retired public employees irate about having their pensions slashed.”

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Here is some interesting facts…

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Read the article here.

“Those 401(k) programs that became 201(k) plans during the financial meltdown in 2008 are back in vogue, with employer participation returning to pre-crisis levels.

Some 73 percent of companies are offering matching contributions into the popular retirement programs, which saw savings rates and employer participation wane along with the plans’ value during the financial crisis.

Gallows humor at the time featured jokes that the 401(k) nest eggs had shrunk so much that they should be called 201(k) plans.”

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“Spain is considering pumping its own money into Bankia group to re-capitalize the country’s biggest nationalized lender rather than use the emergency portion of a 100 billion-euro ($125 billion) bailout from the European Union, two people with direct knowledge of the matter said.

This would allow Spain to put off forcing Bankia group’s junior debt holders to bear part of the rescue cost, said the people, who asked not to be identified because the negotiations are private. European officials backed burden sharing in the talks because it would limit the need for public money, the people said.

“The EU is telling the Spanish government that if they don’t produce this haircut, the money will have to put up by” Spain, said Alejandro Ruyra, an analyst at Kepler Capital Markets inMadrid, speaking on Bloomberg TV’s The Pulse. “The question is, does the Spanish government have that much money?”

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“Ukraine is broadening its business ties with China as President Viktor Yanukovych sidesteps the conditions traditional partners such as Russia and the European Union are demanding to provide loans and investment.

Currency-swap and loan deals agreed since June may reach as much as $9 billion, raising China’s standing in Europe’s biggest iron-ore and corn exporter as the fastest-growing major global economy seeks to secure materials and food supplies.”

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“Finland will throw its support behind the bailouts that are necessary to save the 17-nation currency bloc from splintering, while standing firm on its opposition to common bonds, Prime Minister Jyrki Katainen said.

Rescues “are difficult in all countries, Finland is no exception,” Katainen said in an interview in Helsinki yesterday. “We’ve taken part in all bailouts and we will continue to act responsibly. We’re looking for ways that don’t increase joint liability, but we do want to resolve the crisis.”

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This morning’s economic data shows the U.S. savings rate has begun to drop for the first time in five months….

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It will also disturb you that the Republicans have outspent the Dems since the 60’s.

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Dividend-focused ETFs are tempting when you hold them up against the insanely low yields on benchmark U.S. government debt. But that doesn’t mean dividend ETFs are a good idea.

They might not even be a better idea than buying, say, a 10-year U.S. Treasury bond.

Read the rest here.

The tight-lipped world of hedge funds might soon be able to speak more freely.

The Securities and Exchange Commission on Wednesday proposed rules that would remove a longtime prohibition against general solicitation by hedge funds, a huge change for an industry that has ballooned in size and influence in recent decades.

Read the rest here.

Putting spending into perspective….

Defense spending chart

“Household debt in the U.S. declined by 0.6 percent in the third quarter as mortgage balances shrank, according to a survey by the Federal Reserve Bank of New York.

Consumer indebtedness fell by $60 billion from the end of June to $11.66 trillion on Sept. 30, according to a quarterly report on household debt and credit released today by the district bank. Mortgage balances declined by about $114 billion, or 1.3 percent.”

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Got balls ? Lay down some coin to make 10x your money if Jackson Hole turns out to be a disappointment.

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“If Mitt Romney and Paul Ryan have their way, then Americans of all ages may be spending more on health care during their retirement.

If Romney becomes president and repeals the Affordable Care Act as promised, then retirement would cost $11,100 more for the average 65-year-old and $18,600 more for the average 55-year-old because of higher Medicare premiums and drug costs, according to a report from Harvard economist David Cutler, an Obamacare architect, and the Center for American Progress.

What’s more, seniors on Medicare who depend on Medicaid would need to pay more than $2,500 more per year because of planned Medicaid cuts.

Romney’s plan would cost younger Americans even more, since Romney and Ryanwant to turn Medicare into a voucher system for Americans under 55 for when they qualify for Medicare. The report estimates that 48-year-olds would have to pay $124,600 more for Medicare during retirement under Romney’s plan, 39-year-olds would have to pay $216,600 more during retirement, and 29-year-olds would have to pay $331,200 more during retirement in total. That’s because the vouchers would not keep up with rising health care costs. For those 29-year-olds, the extra costs would consume 62 percent of their lifetime Social Security benefits.”

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Not so fun times for America…

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