Strong results in Europe from BNP Paribas SA (BNPP.PA) and HSBC Plc (HSBA.L)(HBC.N) added to the upbeat tone and lifted U.S. bank stocks. JPMorgan Chase & Co (JPM.N) rose 3.4 percent to $41.64 and the KBW Bank index .BKX gained 3.2 percent.

The falling greenback set off a 3 percent jump in crude prices, which, coupled with BP’s (BP.L)(BP.N) attempt to permanently cap its Macondo well in the Gulf of Mexico, sent energy shares soaring.

Macondo-linked companies rallied, with Transocean Ltd (RIGN.VX)(RIG.N) up 9.6 percent to $50.68. The Philadelphia exchange oil services sector index .OSX climbed 4.5 percent.

“Oil service and oil companies got overdone on the downside because of the problem in the Gulf, and now we are having a natural reaction back up,” said Carl Birkelbach, chief executive of Birkelbach Investment Securities in Chicago.

Crude futures settled above $81 per barrel for the first time since early May. The S&P energy sector .GSPE jumped 3.6 percent.

Raw materials also rose and the Reuters/Jefferies CRB commodity index .CRB hit a three-month high. Dow component and aluminum company Alcoa Inc (AA.N) advanced 4.8 percent to $11.71.

The 90-day correlation between the CRB and S&P 500 is currently .85, up dramatically from the 0.33 range in early May. Many investors reason rising raw material prices bodes well for global demand prospects.

The Dow Jones industrial average .DJI gained 208.44 points, or 1.99 percent, to 10,674.38. The Standard & Poor’s 500 Index .SPX advanced 24.26 points, or 2.20 percent, to 1,125.86. The Nasdaq Composite Index .IXIC rose 40.66 points, or 1.80 percent, to 2,295.36.

The S&P 500 closed the session above its 200-day moving average and the 1,121 level, the midpoint of the slide from its historic high reached in October 2007 and the 12-year low hit in March 2009, which has been viewed as a key resistance level.

The benchmark has not been able to close above this 50 percent retracement since mid-May.

“The more times a level is tested, it heightens the significance of the move when you finally do break through,” said Richard Ross, global technical strategist at Auerbach Grayson in New York.

The CBOE Volatility Index .VIX fell below its 200-day moving average, suggesting some of the near-term fear on the market has diminished. But options activity on VIX futures show that traders continue to anticipate higher volatility.

Since the beginning of May, the VIX has closed below its 200-day MA only twice, both times occurring last week.

“Even though VIX futures contracts were down, they still carry a premium to spot VIX, indicating traders expect significantly higher volatility for the rest of 2010,” said OptionMonster analyst Chris McKhann in Chicago.

Further boosting stocks, the Institute for Supply Management said the U.S. manufacturing sector grew at a faster rate than expected in July. The government reported construction spending unexpectedly rose in June.

Volume was light, with about 7.63 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year’s estimated daily average of 9.65 billion.

Advancing stocks handily outnumbered declining ones on the NYSE by about 11 to two, while on the Nasdaq, advancers beat decliners by a ratio of five to two.

(Reporting by Chuck Mikolajczak; Additional reporting by Rodrigo Campos and Angela Moon; Editing by Kenneth Barry)

Jul 15th 2010 | san francisco

Published: Tuesday, 13 Jul 2010 | 4:30 PM ET

Texas reclaims the top spot from last year’s winner, Virginia, which slips to No. 2. Texas was last on top in 2008, and Virginia took the crown in the inaugural year of our study, 2007. That leaves Texas and Virginia dead even in the battle for bragging rights at two wins apiece.

Rounding out the top five are No. 3 Colorado, No. 4  North Carolina, and No. 5 Massachusetts, which makes its first appearance among America’s Top States for Business.

Scoring & Categories

Our fourth annual study of America’s Top States for Business puts all 50 states to the test, measuring them on 40 different metrics in ten key categories of competitiveness. We developed these categories back in 2007 with the help of business groups including the National Association of Manufacturers. And we weight the categories based on how frequently states use them as selling points to attract business. That way, we hold the states to their own standards, and tell you how they measure up.

The categories and weightings, for a total of 2,500 points, are:

• Cost of Doing Business (450 points)
• Workforce (350 points)
• Quality of Life (350 points)
• Economy (314 points)
• Transportation & Infrastructure (300 points)
• Technology & Innovation (250 points)
• Education (175 points)
• Business Friendliness (175 points)
• Access to Capital (50 points)
• Cost of Living (25 points)

We use publicly available data on the metrics in each category to score the states, and then add up those scores to rank America’s Top States for Business.

2010 Dynamic

Coming out on top is always an accomplishment, and never more so than this year. The national economy is anemic, and state budget pressures are growing across the country. In fact, even top-ranked Texas is struggling to make ends meet. The state faces a Texas-sized, $4.6 billion budget shortfall for fiscal 2011, according to the non-partisan Center on Budget and Policy Priorities. That is more than 12 percent of the state budget.

Add to that a sluggish job market across the country, and even the top states cannot afford to rest easy.

In No. 3 Colorado for example, unemployment in May was a relatively low 8 percent. But KUSA-TV reporter Greg Moss in Denver says the unemployment rate does not tell the full story.

“Although ours is way below the national average, it’s remained pretty flat. So we’re seeing a lot of long-term unemployed,” Moss says.

In runner-up Virginia, which has a built-in cushion of technology and government jobs, particularly in the northern part of the state, the employment picture statewide is somewhat shaky.

“The recession of the past two years has hit manufacturing rather hard,” says reporter Tom Schaad of WAVY-TV. “Here in Hampton Roads, International Paper in Franklin closed a major mill, putting 1,100 people out of work. That’s one example.”

What separates the top states from the rest is their ability to cope with those types of economic stress, offering environments that allow businesses to thrive even in a slowdown.

Texas By The Numbers

Texas powers past the tough times on the strength of its economy—top-ranked in our Economy category four years in a row. The Texas economy is the 15th largest in the world, according to government figures; larger, for example, than all the Scandinavian nations combined.

The Lone Star State is home to 64 Fortune 500 companies, more than any other state, in a wide variety of industries. So while the state’s last win in 2008 came with oil at a record $145 a barrel—a natural tailwind for the largest industry in Texas—the state managed to do even better this year despite the fact that oil is trading at roughly half that price.

Texas has also managed to avoid the worst of the real estate crisis, according to reporter Ashanti Blaize of KXAS-TV. “While in other major cities we’ve seen condo high-rise projects either slowed or come to a screeching halt, in Dallas we’ve seen an influx of some of those projects,” says Blake.

However, that economic strength has a side effect. Rising commercial rents and high wages hurt the state in the all-important Cost-of-Doing-Business category, where it comes in at number 30.

Virginia Still Impresses

Virginia comes in second overall this year, but the Old Dominion State still has plenty for which to be proud.

In the Business Friendliness category, which measures the states’ legal and regulatory climates, Virginia is second only to neighboring Delaware. And Virginia offers a diverse economy, making it chock-full of business opportunities, from imports and exports to government contracts in the state that is home to the Pentagon.

“Hampton Roads has the third largest port in the country. That, along with heavy military presence usually provides for a stable economy,” says WAVY-TV’s Schaad, who also notes that federal stimulus money, particularly in the area outside Washington, D.C., is keeping overall unemployment well below the national average.

• Test Your Knowledge of The Top States

But with pockets of severe joblessness hampering growth—including in tourism-dependent Williamsburg—Virginia dropped four places to number 11 in the “Economy” category. Virginia also lost critical points in the “Education” category, dropping six places to number 13 as class sizes rose and school spending fell.

While Texas and Virginia duke it out for the top spot year after year and Colorado stays consistent at No. 3, the rest of the rankings are less predictable.

Carolina Comeback

North Carolina, which finished a disappointing ninth in 2009, jumped to No. 4 in 2010. The corporate home of a number of giant financial institutions, including Bank of America and BB&T, North Carolina’s business climate benefited from the easing of the financial crisis, according to WCNC-TV’s Jeff Campbell in Charlotte.

“There are also lessons the state has learned from the recent crisis, and that’s really helping the state diversify towards some other industries like clean energy and tourism,” says Campbell.

As a result, North Carolina has seen a surge of investment, pushing the state to number 10 in our Access to Capital category, up from number 36 last year. That was enough to propel the Tar Heel State back into the top five overall for the first time since 2007.

Massachusetts Moves Up

Massachusetts never ranked among America’s Top States for Business before 2010. Its ranking this year also marks the first time a northeastern state has finished among the top five.

But the Bay State has always been a contender—it finished No. 8 overall last year. Massachusetts’ greatest strength is its schools. The state boasts the best performing K-12 schools in the country, as well as some of the top universities in the world, placing it at the top in the Education category.

The strong education system helps Massachusetts capture near top rankings in Technology & Innovation (number three, up from number five last year) and Access to Capital (number two for the second year in a row). Even in Business Friendliness—not generally considered a hallmark of New England states—Massachusetts finishes a respectable 14th.

Notable Mention

This year’s most improved state is Pennsylvania, which jumped a whopping 13 places to No. 20 overall, from number 33 last year. However, it is unclear whether the Keystone State truly bettered itself, or if others simply got that much worse. Pennsylvania’s best category was Economy, where the state improved to number 15 compared to a 37th place ranking in 2009. Yet the state still faces persistent unemployment and a $4.1 billion state budget shortfall.

The biggest drop came in Vermont, which fell seven places overall to No. 37. While economic conditions have improved in the Green Mountain State, business costs have gone up and the quality of the workforce has declined according to our study.

Two states drop out of the top five in 2010.

Iowa falls to No. 6 from No. 4 last year, and Utah, a consistent player in previous years, moves into a tie for eighth place with Minnesota.

Our study scores all 50 states, so if there are going to be Top States, it stands to reason that there will also be bottom states. Alaska is America’s bottom state for business again this year, hampered by its high cost of living, relatively high cost of doing business, and a weak infrastructure.

After Alaska, there is a big change among the also-rans. Rhode Island drops to No. 49 overall, following its 48th place finish in 2009. The Ocean State is among the least friendly to business, and ties with Nevada for the worst overall economy.

Rhode Island’s drop is good news for those other islands—Hawaii, which climbs to 48th place overall. No great surprise, the Aloha State is number one for Quality of Life. Unfortunately, you get what you pay for. Hawaii ties with California as the most expensive state in which to live, and is second only to New York in the cost of doing business.

How does your state stack up? Vote in our poll, take our quiz and watch CNBC all week for our in-depth coverage of America’s Top States for Business.

By: Associated Press

The credit scores of millions more Americans are sinking to new lows.

Credit Report
CNBC.com

Figures provided by FICO show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery.

“I don’t get paid for loan applications, I get paid for closings,” said Ritch Workman, a Melbourne, Fla., mortgage broker. “I have plenty of business, but I’m struggling to stay open.”

FICO’s latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO’s 300-to-850 scale weren’t as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.

More are likely to join their ranks. It can take several months before payment missteps actually drive down a credit score. The Labor Department says about 26 million people are out of work or underemployed, and millions more face foreclosure, which alone can chop 150 points off an individual’s score. Once the damage is done, it could be years before this group can restore their scores, even if they had strong credit histories in the past.

On the positive side, the number of consumers who have a top score of 800 or above has increased in recent years. At least in part, this reflects that more individuals have cut spending and paid down debt in response to the recession. Their ranks now stand at 17.9 percent, which is notably above the historical average of 13 percent, though down from 18.7 percent in April 2008 before the market meltdown.

There’s also been a notable shift in the important range of people with moderate credit, those with scores between 650 and 699. The new data shows that this group comprised 11.9 percent of scores. This is down only marginally from 12 percent in 2008, but reflects a drop of roughly 5.3 million people from its historical average of 15 percent.

This group is significant because it may feel the effects of lenders’ tighter credit standards the most, said FICO’s Jennings. Consumers on the lowest end of the scale are less likely to try to borrow. However, people with mid-range scores that had been eligible for credit before the meltdown are looking to buy homes or cars but finding it hard to qualify for affordable loans.

Workman has seen this firsthand.

A customer with a score of 679 recently walked away from buying a house because he could not get the best interest rate on a $100,000 mortgage. Had his score been 680, the rate he was offered would have been a half-percent lower. The difference was only about $31 per month, but over a 30-year mortgage would have added up to more than $11,000.

“There was nothing derogatory on his credit report,” Workman said of the customer. He had, however, recently gotten an auto loan, which likely lowered his score.

Studies have shown FICO scores are generally reliable predictions of consumer payment behavior, but Workman’s experience points to one drawback of credit scoring: the automated underwriting programs lenders use can’t always differentiate between two people with the same score. Another consumer might have a 679 score because of several late payments, which could indicate he or she is a bigger repayment risk. But a computer program that depends just on score won’t consider those details.

On a broader scale, some of the spike in foreclosures came about because homeowners were financially irresponsible, while others lost their jobs and could no longer pay their mortgages. Yet both reasons for foreclosures have the same impact on a borrower’s FICO score.

In the past too much credit was handed out based on scores alone, without considering how much debt consumers could pay back, said Edmund Tribue, a senior vice president in the credit risk practice at MasterCard Advisors. Now the ability to repay the debt is a critical part of the lending decision.

Workman still thinks credit scores alone play too big a role. “The pendulum has swung too far,” he said. “We absolutely swung way too far in the liberal lending, but did we have to swing so far back the other way?”

© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Democracy March Finance

This is a Sponsored Post written by me on behalf of goviral. All opinions are 100% mine.

As a writer and entrepreneur I depend upon technology produced by cutting edge technology companies such as HP.

The last two decades have marked an enormous increase in the number of home computers. With it, computer owners have invariably taken to entrepreneurship in many varied fields. Thanks to the growth of technology, computers and the Internet, new methods have been developed for processing everyday business activities easily. Without the advent of technology, routine tasks would otherwise have taken and enormous amount of time and specialization. Undoubtedly, the computer represents the top technology development in the last century as it relates to businesses today, both large and small. Advances in the field of technology have created a vast number of business opportunities.

Entrepreneur’s need to be kept up to date on the latest and greatest technology.  HP is an innovator that has transformed the small business workplace.

The fundamental reasons for the popularity of computers with small businesses are their efficiency, speed, low procurement cost and more than anything else, capability to handle multiple tasks with little chance for error.

Almost invariably, businesses loaded with the burden of increasing workloads and the pressures of being lean and mean, fall back upon technology for most of their administrative tasks. This work includes, among others, bookkeeping, inventory managing and email. The advent of the Internet has also substantially contributed in bringing down the costs of communication and marketing. In a nutshell, technology has reduced the overall cost of business operations.

It is difficult to think of a situation where businesses can do without technology and computers today. It is extremely difficult to say whether businesses depend on computers or computers created business opportunities.

HP has wonderful products and services as this video explains well.

By David Lawder
WASHINGTON | Thu Jul 8, 2010 6:53pm EDT

(Reuters) – High unemployment and a moribund housing market have increased risks to the U.S. economic recovery, while the public debt looms large and needs to be cut, the International Monetary Fund said on Thursday.

In a statement after annual consultations with U.S. authorities, the IMF raised its U.S. growth forecasts slightly to 3.3 percent for 2010 and 2.9 percent for 2011, but said unemployment would remain above 9 percent for both years.

The lofty jobless rate, coupled with a large backlog of home foreclosures and high levels of negative home equity, posed risks of a “double dip” in the housing market, it said. But the IMF said it did not think a renewed recession was likely.

“The outlook has improved in tandem with recovery, but remaining household and financial balance sheet weaknesses — along with elevated unemployment — are likely to continue to restrain private spending,” the Fund said.

The IMF also said commercial real estate continued to deteriorate, posing risks for smaller banks. Further tipping the balance of risks to the downside, it said Europe’s sovereign debt crisis could worsen financial market conditions and hurt trade.

David Robinson, the IMF’s Western Hemisphere deputy director, conceded in a news briefing that recent data had come in on the weak side since the report was completed on June 21. If the weakness continued, the Fund may have to revise its forecasts downward, he said.

In a separate report on the world economy, the IMF raised its 2010 global growth forecast to 4.6 percent from the 4.2 percent it had projected in April.

DEBT BURDEN

Apart from dealing with economic risks, the IMF said the key challenge for the United States was to develop a credible strategy to put its budget on a sustainable path without jeopardizing the recovery.

The fund said U.S. federal debt as a percentage of gross domestic product would rise from 64 percent in 2010 to 80.4 percent by 2015, 96.3 percent by 2020 and 135 percent by 2030. These debt forecasts are higher than those of the Obama administration and the Congressional Budget Office, which projects debt-to-GDP at 77.4 percent in fiscal 2015, and 90 percent by 2020.

A U.S. Treasury official said the IMF’s forecasts for future growth and interest rates were “overly pessimistic”. The Fund, for example, predicted U.S. growth at 2.8 percent in 2012, compared to the Blue Chip consensus of private forecasters at 3.4 percent growth for that year.

But the IMF welcomed commitments by the Obama administration to stabilize this at just over 70 percent of GDP by 2015 but called for a downward path after that, a step that would require both spending cuts and increased revenues.

The IMF said the biggest contribution the United States could make to global growth and stability would be to increase its domestic savings — particularly by reducing deficits.

“The U.S. is no longer going to be the global consumer of last resort and therefore other countries, especially those with current account surpluses, will need to take up the slack,” Robinson said.

“With our assessment that the dollar is now somewhat overvalued from a medium-term perspective, I emphasize medium-term, this will also need to be accompanied by greater exchange rate flexibility and appreciation elsewhere,” he added.

Robinson said he believed the dollar’s value would decline moderately over the next five years based on economic fundamentals. The dollar’s rise in recent months was “not helpful” in sustaining global recovery but was not a “deal breaker” either, he said.

The Fund said the Federal Reserve’s pledge to keep interest rates exceptionally low was appropriate to fight deflation and the drag on the economy from reduced government spending, but said the U.S. central bank must clearly communicate its plans for exiting its supportive policies.

The IMF also said that while the United States has made considerable progress in restoring financial stability, more capital will be needed in the banking system to support additional lending — particularly if securitization markets remain impaired.

It said U.S. financial reform legislation would reduce systemic risks in the financial system, but noted that Congress missed an opportunity to consolidate bank regulators, maintaining a burden on agencies to cooperate and avoid gaps in supervision.

(Additional reporting by Emily Kaiser, Tim Ahmann and Lesley Wroughton; Editing by Andrea Ricci)

Though Dr. Harvey comes from a Marxist socio-economic frame of thought, which I do not agree, this video makes a lot of sense as I ask you to be the judge on what you watch versus what you think before ever even watching the video because of predetermined judgment.  Thanks - William Michael – Editor Democracy March

David Harvey on The Crises of Capitalism
by Charles Lemos, Wed Jul 07, 2010 at 01:40:36 AM EDT

David Harvey, the British-born geographer and Professor of Anthropology at CUNY, spoke at the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) in London recently on the Crises of Capitalism. The RSA, in turn, produced this short animated feature.

Dr. Harvey, who is perhaps best known for his critique of neo-liberalism, remains one of the leading exponents of Marxist socio-economic thought. Having said this listen to his brief 11 minute lecture and see if there is anything with which you can disagree. Dr. Harvey is currently on a lecture tour for his Marxist critique of both the global financial crisis and the narratives told about it.

The principal question that he addresses is it time to look beyond capitalism towards a new social order that would allow us to live within a system that could be responsible, just and humane?

Dr. Harvey references Hyman Minsky, an American economist now deceased, who took a jaundiced view of Wall Street’s role in the economy and how financial risk was managed. The New Yorker had a short insightful column back in February 2008 (so before the proverbial you know what really hit the proverbial fan) on Minsky and his financial instability hypothesis.

Reasons for Hiring a Business Attorney

The expertise of an attorney is needed to decide which kind of business structure to opt for. This includes a corporation, an LLC, an LLP, or a sole proprietorship.

They are needed while forming a business entity. Their advice and guidance is needed while forming the articles of incorporation.

They are needed for obtaining the licenses and permits necessary and for the negotiation of the lease of office or retail space.

They are necessary while filing a patent or registering a trademark, registering your business for federal and state tax identification numbers. They help you file the tax forms according to the kind of entity your business is.

Attorneys are needed to prepare contracts when you deal with suppliers and clients. They guide you while signing contracts other people have prepared.

Attorneys are needed to guide you regarding banking and financing, business negotiations, business planning and transactional business laws.

Expertise of a qualified attorney is needed during acquisitions, mergers, the sale of a business, or the closure of a business.

Their guidance is necessary regarding civil, intellectual, labor, and environmental laws.

They deal with litigation if any.

The Reasons for Hiring a Business Attorney are many and attorneys are the backbone of any business entity. Hiring a good business attorney is a positive step taken towards the success of a business venture. It is better to hire a large, reputable firm of attorneys, even if the fee may be large. This way you get the expertise of lawyers specializing in different areas of law. If you hire a sole practitioner, you may have to hire several different lawyers in the due course of time. A large firm has all the legal expertise you may need, under one roof.

As there are many important reasons for hiring a business attorney, it is necessary to hire an experienced, reputable business attorney to guide your business towards the achievements of its goals. Several firms offer their services and professional help to make the process of starting and running a business easier.

One great attorney you should check out is MGM Law located in Richmond, VA.  Gone are the days where attorney’s need to be located near you, as online legal services is a fast moving emerging new industry.

http://www.mgm-law.com/

Jul 1st 2010

IF THE private sector continues to save hard even as governments try to borrow less, the risks of a double-dip recession rise. A long period of high household saving seems assured in rich countries whose consumers lived off credit and have heavy debt burdens to show for it. But much of the recent increase in private-sector savings comes not from consumers but from businesses. Profits have been more than enough to cover corporate spending in many parts of the rich world, leaving an excess of funds for firms to squirrel away. A lot depends on whether this continues.

If cautious firms pile up more savings, the prospects for recovery are poor. Economies will be stuck in the current—and odd—configuration where corporate surpluses fund government deficits. If firms loosen their purse-strings to hire workers and to invest, that will allow governments to scale back their borrowing.

The degree of corporate saving varies from country to country. British businesses are among the biggest savers. Last year they produced a net financial surplus of 8% of GDP—most of it by non-bank firms (see chart 1). That surplus went a long way to offsetting the government’s 11% deficit; a 1% current-account deficit and a 2% household-sector surplus did the rest.

Firms in America have been saving, too, even if they have not been quite as thrifty as British ones. The Federal Reserve’s measure of the “financing gap”, the shortfall of corporate income relative to spending, was minus 0.8% of GDP (ie, a surplus) last year, though the gap closed in the first quarter of 2010. The surplus is bigger if the retained earnings of foreign subsidiaries are included, as they are in European measures.

The corporate-saving rate has also increased sharply in the euro zone: a deficit of 4% of GDP in 2008 had all but gone by 2009 (see chart 2). That change came largely from big cuts in spending by firms in France and Spain. German firms have been running cash surpluses since 2004, when profits began to rise as a share of national income as real wages stagnated.

On the face of it firms are in a position to spend more and aid the recovery. After all, businesses are supposed to be repositories for saving, not a source of it. Optimists point to the record $1.6 trillion that American firms have on deposit, in money-market funds, and in bonds and bills. With interest rates so low, this cash might be put to work more profitably. Firms may well have cut their spending too much in the rush to conserve cash during the darkest period of the crisis. Consumer spending has turned out to be stronger than had been feared, says David Bowers of Absolute Strategy Research. “Capital spending, inventories and jobs are too low given the level of consumption,” he argues.

Even so businesses may not feel it is safe to splash out on new machines, stocks and employees. America’s corporate cash pile looks less impressive when set against its debts. Firms need to keep more cash in the kitty if they have large debts because these are raised and repaid in lumps, says Andrew Smithers of Smithers & Co, a research firm. America’s non-bank companies held liquid assets worth around 23% of debt in the first quarter—a bit higher than the average of the past 40 years but still below the levels in 2006.

Many corporate treasurers will want to hold more cash than normal given the size of their firms’ debt and the frailties of the financial system. Before recession struck firms in America and Britain had not needed to borrow much, if at all, to finance new offices, factories and plant. But their debts increased all the same. American companies used debt to buy back their own shares; British businesses used it to purchase stakes in foreign firms. High debt is a legacy of those deals and makes firms nervous about running down cash or spending more of their profits. It will take time for businesses to be confident that banks will be there should they run short of cash.

Corporate spending is dogged by other uncertainties. Few rich-world businesses can feel confident about expanding capacity when the outlook for consumer spending is so cloudy. Fiscal stimulus has helped shore up aggregate demand. Now the worry is that corporate taxes may rise as governments try to fill the hole in their finances, and that non-bank firms will get caught up in a regulatory backlash. Businesses seem short of ideas about how to grow. Technology is not the must-have item it was during the last big investment boom in the late 1990s.

So firms may well want to sit on their existing cash piles. But the case for generating further surpluses seems less compelling. Business investment is as low as it has ever been as a share of GDP (see chart 3). Firms run the risk that their stock of capital is too depleted to meet even sluggish growth in demand. The likeliest outcome is a hesitant recovery in business spending as firms balance the risks of inadequate investment and insufficient cash. If banks continue to be a blockage, firms may look for a way around them. This week Siemens, a big German engineering firm, said it would apply for a banking licence so that it can use its cash reserves to lend to customers. Fine, but for the sake of the economy, better a borrower than a lender be.

Finance and Economics

We’re not about to sing the praises of the bistros of Baghdad. But it is absolutely true that value and a high quality of life can be found in a retirement abroad. The trick is to approach it with a proper mindset–think adventure–and a lot of careful research.

In Pictures: 12 Top Foreign Retirement Havens

To get you started, we have assembled our own list of a dozen countries worthy of your consideration as a foreign retirement haven. This roster was developed after scrutinizing a lot of information. But there’s no precise scientific method here or numerical ranking; there are too many variables and retirees have too many differing priorities. Is an easy trip home to see the grandkids essential? How important are low costs? An English speaking population? Cultural amenities? Your own family roots?

It may be that the best retirement haven for you isn’t even on this list. So for a guide to how to investigate a foreign locale yourself, click here.

For many retirees, the greatest lure of expatriation is that living costs, particularly for housing, are usually cheaper. Offsetting that is the lack of access to the subsidized U.S. Medicare system for senior citizens. But many foreign countries have health care systems that offer high quality with costs or insurance so reasonable it easily can be paid out of pocket. (For more on buying insurance and protecting your Medicare benefits if you retire abroad, click here.)