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Weekly Economic Update

January 14, 2013

Singles earning more than $200,000 and couples earning more than $250,000 will
face a 3.8% Medicare surtax and a 0.9% increase in Medicare payroll tax. Tax rates
on dividends and long-term capital gains remain at 15% for most, but have risen to
20% for the wealthiest. A scheduled 2% cut to Medicare spending has been delayed
until at least March. Social Security recipients will see benefits rise 1.7% this year.

Last week, the Consumer Financial Protection Bureau presented new rules for the
mortgage industry – rules that will ban teaser-rate mortgages and “liar loans” in
2014. Next year, no legal protection will be available for banks offering interest-only
or negative-amortization loans, and restrictions will prevent lenders from
originating mortgages with balloon payments and severe upfront points and fees.
Banks will also be barred from offering mortgages with a payment-to-income ratio
exceeding 43%, though FHA/VA loans or mortgages backed by Fannie Mae or
Freddie Mac could be exempt from this restriction.

The former hedge fund manager and current White House chief of staff has strong
ties to Wall Street, which worries some members of Congress. Still, opposition to the
nomination does not seem to be widespread. If confirmed, Lew could start his new
job in late January, when Timothy Geithner is slated to leave the post.

The S&P 500 settled at 1,472.05 Friday, up 0.38% in five trading days. The Dow rose
0.40% last week to 13,488.43, while the NASDAQ gained 0.77% to settle at 3,125.63.
The CBOE VIX fell 3.33% on the week to go -25.80% YTD.

THIS WEEK: Fed Chairman Ben Bernanke speaks at the University of Michigan
Monday; the Detroit Auto Show also begins. Tuesday, the December PPI and
December retail sales figures are out; Lennar offers Q4 results. Wednesday brings
December’s CPI, a Fed Beige Book, a report on December industrial output and
earnings from Goldman Sachs, eBay, JPMorgan and Bank of NY Mellon. Thursday,
December housing starts data arrives plus earnings from Bank of America, BB&T,
BlackRock, Capital One, Citigroup, UnitedHealth, American Express and Intel.
Friday, earnings are in from Morgan Stanley and General Electric.

DJIA +2.93 +8.35 +1.40 +5.35
NASDAQ +3.51 +15.30 +5.62 +11.59
S&P 500 +3.22 +13.89 +1.01 +5.87

10 YR TIPS -0.63% -0.10% 1.56% 2.34%
Sources:,,, – 1/11/126,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
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1 – [1/11/13]
2 – [1/4/13]
3 – [10/16/12]
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10 – [1/8/03]


This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of John Jastremski, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

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