Opportunities in the technology field offer decent salaries

Source: AZCentral
Good jobs that focus on technology
By David Proffitt - Jan. 16, 2011 12:00 AM
The economic recovery is already bringing good things to the technology industry.

Tech companies large and small have begun hiring again, especially for entry- and midlevel positions, says Eric Walton, chief operating officer for Kryterion Inc., a Phoenix firm that provides secure online software testing.

Many tech jobs were cut or outsourced during the recession. But now, that demand for computers, medical devices and manufacturing equipment is coming back. So is the need for people who can build and maintain that technology.

"Those jobs are about as stable as you can get in this economy," says Donald Ellis, chair of the electronics school at ITT Technical Institute's Phoenix campus.

Some of the most in-demand skills are in computer programming and computer-network management.

"If you're in a computer-science program, stick with it," Walton says. "You can almost write your own ticket for that." The field is not for everyone, he adds, and almost all tech-related positions require relevant experience, a degree or both.

Computer-systems analyst
Design and build computer networks. They also tweak existing networks to make them more efficient or to perform new tasks. Requirements: bachelor's degree in computer science or a related field, plus experience related to the firm's industry. Specialized positions may require a graduate degree. Pay: Varies by specialization; median hourly wages ranged from $15.39 to $32.64 in May 2008.

Science technician
Operate and maintain equipment in hospitals, laboratories, automotive repair shops, and factories that employ automated processes. Requirements: An associate degree in applied science will get your foot in the door, but related work experience will bring your resume to the top of the pile. Pay: Varies by specialization; median hourly wages ranged from $15.39 to $32.64 in May 2008.

Field/bench technician
Install and repair a wide range of electronic components, from radio and TV broadcast equipment to manufacturing control systems. Typical employers include electrical utilities, manufacturers, and automotive or transportation companies. Requirements: an associate degree in basic electronics. A professional certification is often a good idea. Pay: Varies by specialization; median hourly wages vary from $13.29 to $29.34 in May 2008.

Systems administrator
Maintain computer networks to keep them up and running and perform efficiently. Requirements: a bachelor's degree in computer science or information systems, though an associate degree or relevant experience will do for some jobs. Pay: Median annual income was $66,310 in May 2010. The middle 50 percent earned from $51,690 to $84,110.

Database administrator
Figure out how to use computers to help companies store and use data. Requirements: a bachelor's degree in a computer-related field. Some companies also look for a master's in business administration with an emphasis in information systems. Pay: The median annual income was $69,740 in May 2010. The middle 50 percent earned from $52,340 to $91,850.

Computer scientists
The people who invent new computer technology. They might find new ways to make computers faster, or they might work on robotics, virtual reality, or communications devices. Requirements: typically requires a Ph.D. in computer science or a related field. Pay: Median annual income was $91,970 in May 2008. The middle 50 percent earned from $75,340 to $125, 370.

Software engineer
Design and develop new programs to perform specific tasks or run a computer network. This occupation is expected to be one of the fastest-growing in the country over the next decade. Requirements: bachelor's degree in math, computer science or a related field. Pay: Median annual income was $69,620 in May 2008. The middle 50 percent earned from $52,640 to $89,720.

Computer-support specialists
Perform a wide range of tasks, including running diagnostic programs on computer networks, writing software instruction manuals, and assisting users as part of a help desk. Requirements: Any college degree or an associate degree related to computers. On-the-job training is common. Pay: Median annual wages were $43,450 in May 2008. The middle 50 percent earned from $33,680 to $55,990.

Engineer
Use science and mathematics knowledge to design everything from computer circuit boards and industrial devices to airports and artificial organs. Requirements: bachelor's degree for most entry-level positions, and graduate degrees (Ph.D. or MBA) for more specialized areas or management positions. Some specialties require state licensure. Pay: Varies by specialty; the median annual income ranged from $72,490 to $108,020 in May 2008.

Programmer
Write software using code that breaks down tasks into a logical series of steps that computers can follow. They also test the programs for bugs and sometimes work with clients to design programs. Requirements: A bachelor's degree in computer science, information systems or engineering is usually the minimum, but some jobs require only a two-year associate degree. Pay: Median annual income was $69,620 in May 2008. The middle 50 percent earned from $52,640 to $89,720.

Your Investments: Wall Street is waking up but proceed with prudence

Source: Wall Street Journal
Don't Get Carried Away by the Market Rally
By BRETT ARENDS

It's hard to stay cool in a hot market.


Wall Street's been booming lately. The Dow Jones Industrial Average has risen 22% since last summer, and the Nasdaq Composite 30%. Market spirits are up. The optimists are out in force. And after an impressive 2010, stock-market strategists are forecasting good gains again for 2011.


At times like this, a lot of investors may feel an urge to throw caution to the wind and jump in head first. After all, everyone says the market's going higher, right? You wouldn't want to miss out on the action! Maybe you should get in while you still can?

It's enough to test the resolve of the most disciplined investor.

Time to take a deep breath. Stay focused. And remind yourself, once again, to stick to your long-term investment discipline.

Yes, it has been a sharp rise. And maybe Wall Street will go higher. But maybe it won't. No one really knows. Stock-market fever is one of your biggest enemies as an investor. Here are seven antidotes. Take with half a glass of water as needed.

1. Don't trust your feelings.

The real reason we all feel an urge to buy shares after the stock market has risen has nothing to do with the economic outlook or investment risks.

It's pure instinct. We're hard-wired to run with a stampeding herd, and to seek safety in numbers. There's a reason for that. For thousands of years, that successfully kept our ancestors from being eaten by lions. But these feelings are a terrible guide to investing. There is no urgency. Over time, disciplined investing beats short-term speculation, hands down.

2. Don't trust the crowd either.

They're usually wrong. Time and again, studies show the public invests at the wrong time -- they get bullish and buy after shares have risen, and then panic and sell after they have fallen.

Financial firm TrimTabs Investment Research found the average investor lost money during the last decade, even though the market ended up about even. And financial-research company Dalbar has found the same thing going back decades. Someone who invested $1,000 in the Standard & Poor's 500-stock index 20 years ago and left it there would have had about $5,000 by the end of 2009.

If you had followed the crowd -- buying in booms, selling in slumps -- you'd have less than $2,000. So don't listen to the crowd. They have a terrible track record.

3. Ignore the short-term news, good or bad.

It may move stock prices in the near term, but it will have almost no long-term relevance, and it will quickly be forgotten.

Most of the stock market's value is based on the profits companies will make over many decades into the future. The next few months count for little.

Analysis by Ben Inker, a director at top investment company GMO, found that even the next 10 years' profits account for only about 25% of the stock market's value. Who cares about next quarter's earnings?

4. Don't get too cheerful.

The recent rise is on a lot of thin ice. The government is borrowing $1.3 trillion a year from the future and spending it now to jump-start the economy, while the Federal Reserve is printing even more money.

Our overall national debts -- including the government, households and corporations -- are already at record levels and rising.

Despite this flood of money, housing prices have actually started falling again, and the jobs picture is much worse than the official figures suggest.

Meanwhile, China and other emerging markets are battling raging inflation, raw-materials costs have soared and fears are rising again of another debt crisis in Europe. There are plenty of reasons to stay sober.

5. Please, ignore the jock talk.

Too many TV market pundits talk like they're on ESPN. It gives the stock market a phony air of urgency and excitement.

No, Wall Street isn't "on a roll" or "racking up a winning streak." And nobody is "pulling the trigger" on a purchase.

What a con.

If you're buying, higher stock prices are bad, not good. Do these pundits go to the supermarket and say, "Wow! We gotta pull the trigger on more hamburger -- it's going up!"

Stocks aren't like a kicked football either: They're not in motion. "The stock market is going up" really just means "the stock market has gone up." So if shares are a little more expensive today than they were yesterday, does this still make you want to buy?

6. Consider how often Wall Street holds a sale.

Do you like paying full retail? Shares have risen quite a ways. Are you really sure they won't get cheaper again -- in relative, or absolute, terms?

That's quite a bet.

At points in the last 10 years we've seen the Dow at 6600, Amazon.com at $6, Exxon at seven times forecast earnings, tax-free municipal bonds paying three times as much as taxable Treasurys and inflation-protected government bonds basically given away for next to nothing.

The financial markets seem to hold sales about as often as your local discount furniture store. Why should the next 10 years be any different?

7. Look at who's cheering this rally.

Most of those waving pom-poms right now were doing exactly the same in 1999 and in 2007. Are they a reliable guide -- or just a broken watch that always says it's time to buy?

Meanwhile, most of the people who accurately predicted the last crisis are pretty cautious right now -- such as John Hussman at Hussman Funds or Jeremy Grantham at GMO. Plenty of data suggest that shares are on the pricey side, and that long-term returns from these levels may well prove disappointing.

When an investment firm cuts management expenses what should be your strategy ?

Source: Market Watch
By Chuck Jaffe
Jan. 9, 2011, 12:01 p.m. EST
Fund investors, watch your wallets
Commentary: Cost-cutting firms deserve shareholder loyalty

BOSTON (MarketWatch) — When a mutual fund company cuts management expenses on a stock fund, it really has something to crow about.

In fact, when the Buffalo Funds issued a press release about how the fees had been trimmed on both Buffalo Large Cap /quotes/comstock/10r!bufex (BUFEX 20.60, +0.17, +0.83%) and Buffalo Growth /quotes/comstock/10r!bufgx (BUFGX 25.80, +0.17, +0.66%) — two equity portfolios that get top marks for total return from fund-tracker Lipper Inc. — it was the first time in ages that I can recall stock-fund managers cutting their own pay.

Plenty of fund firms cut or waive fees on bond- and money-market funds, mostly because it’s been about the only way to placate investors and hang onto their assets in the current low-yield environment.

With stock funds, it’s a different story. “Break points” — the asset levels where many funds automatically adjust fees — work in both directions. So when assets rise, costs should go down. But at many funds where assets have been shrinking, costs have increased.

To get the most from your investments, costs matter. Management fees come off the top of returns — expenses that are paid regardless of returns, and which add to a loss during tough times.

How a fund looks at its expenses is also telling. That’s why the Buffalo Funds announcement was so noteworthy, and why it sends investors a clear message on how to re-evaluate fund fee structures.

“This should be a win-win,” said Kent Gasaway, Buffalo’s president. “We have two funds that have great ratings; lowering fees is a win for investors, but if more people know about the funds, find the pricing competitive and invest, then obviously that is a win for the company.”

Net operating expenses for Buffalo Growth dropped to 0.94% from 1.04%% and to 0.99% from 1.09% at Buffalo Large Cap. Gasaway noted that if the firm succeeds in growing assets, the costs for the two funds could drop as low as 0.9%. Diversified U.S. stock funds charge about 1.4% on average.
‘Lose-win’ situation

Cost cutting is anything but standard practice in the fund business. Indeed, if you consider Gasaway’s view that fee cuts are a “win-win,” then what investors are getting from many funds is a “lose-win” — where they’re saddled with higher costs, which is good for the fund. Investors don’t sweat costs when returns are healthy, but being in a “lose-win” situation is never good.

So fund investors should be asking themselves — and maybe the service representatives of their fund firms — if the fees they are paying are fair and reasonable, and if management wants to be in win-win mode.

Clearly, competition affects costs. There’s a reason why the three largest fund firms have among the lowest costs in the business. With exchange-traded funds, low management fees build reputations, which has resulted in costs being driven down to bargain levels.

While that hasn’t happened to the same extent in traditional funds, that doesn’t mean investors should overpay. You don’t want a fund axing critical research analysts and staff in order to drop costs, but you’d like to see a management that is confident in its ability to deliver results, which in turn attracts more assets.
Send a message

“When so many funds are delivering benchmark-like results — when you can do as well or better being in an index fund — it’s reasonable for people to focus on expenses,” said Geoff Bobroff, an industry consultant in East Greenwich, R.I. “The industry squeezed everything it could from service providers — cutting basic costs — but you’d like to see management participate in bringing down costs in some way. … They’re sending a message when they cut fees — and when they don’t.”

If your fund performance has been disappointing and your fund expenses have remained static; if management has not waived costs, put off the break-point fee reversal “earned” by shrinking assets, or has not shown you that it wants you to “win,” it may be time to look elsewhere. The only way the fund industry will ever embrace consumer-oriented thinking is if shareholders keep management’s feet to the fire.

“Cutting costs, when you can, is good business,” said Buffalo’s Gasaway. “If management is greedy, it should come back to haunt them. Everyone says that they are there for the shareholders, but watch their actions. We’re shareholders ourselves; we know that keeping costs down whenever possible is the right thing to do.”

Chuck Jaffe is a senior MarketWatch columnist. His work appears in many U.S. newspapers.

Why has retirement become so expensive ?

Source: Market Watch
By Robert Powell
Jan. 14, 2011, 12:01 a.m. EST
Retirement products: rising costs, fewer providers
As firms quit insurance products, hike rates, what’s a saver to do?
BOSTON (MarketWatch) — Retirement savers and retirees often are advised to buy products that aim to mitigate retirement risks and provide retirement income. But many of the companies that provide such products are leaving the business, or raising rates.

Genworth last week said it will stop selling variable annuities and MetLife late last year said it will stop selling long-term-care insurance policies. What’s a person to do, especially if these sorts of products make sense for you?

The short answer: Expect more firms to drop their retirement-income products, but don’t stop considering or buying such products. Do more due diligence than you might otherwise before making a purchase. What’s more, expect to see new and different players enter the market and introduce products with all sorts of bells and whistles. And if you already own a product being dropped, fret not. Most if not all firms say they will continue to service those products.

“As you prepare for retirement with the purchase of retirement-related products, you can expect to continue to see many changes in offerings in the marketplace,” said Christine S. Fahlund, a vice president and senior financial planner at T. Rowe Price Investment Services Inc.

Others agree. “From a business perspective, it's to be expected that when demand is low or profits become thin, as with long-term-care insurance and variable annuities respectively, that certain players will decide that the game is no longer worth the candle,” said Kerry Pechter, editor of the Retirement Income Journal. “Of course, industry consolidation can eventually lead to reduced competition and less attractive pricing — but that's a nebulous threat that no one needs to lose sleep over right now.”

The fact that companies are leaving the business is good news according to Chuck Yanikoski, president of Still River Retirement Planning Software. “It would be nice to think that some big companies pulling away is a recognition that the current standard operating procedure is not working,” Yanikoski said. “That could potentially make room for a better approach.”
Long-term-care insurers got pricing wrong

With long-term-care insurance, we’ve witnessed a number of changes over the past few months.

Last year, Genworth and John Hancock announced plans to raise premiums for holders of existing long-term-care policies and MetLife announced plans to exit the business. According to experts, these firms have taken these steps for several reasons.

For one, firms are worried about the effect of the Community Living Assistance Services and Support program. Enacted last year as part of health reform, CLASS will provide a voluntary long-term-care insurance program for working individuals.

The other issue relates to the pricing of these policies. In developing policies, insurers attempt to gauge a number of factors, from lapse rates to the cost of long-term care. In some cases, insurers have simply guessed wrong about how fast costs would rise and how many people would let their policies lapse. According to MetLife’s studies, the cost of a private nursing-home room rose twice as fast as the average cost of living over the past six years. The room rate rose 20% from $192 per day in 2004 to $229 in 2010. By contrast, the consumer price index rose about 10%.

“A number of providers, in fact, have left the long-term-care insurance space due to unease around how to price their products,” said Fahlund. “On the other hand, others are coming in. For example, some providers are adding long-term-care riders to their annuity products.”

Given all changes with providers of long-term-care insurance, one might expect experts to suggest avoiding such policies till the dust settles. But that’s not necessarily the case. Fahlund said now rather later would be the time to purchase such policies, even if higher-than-expected rate hikes become a regular occurrence. For one, the premiums tend to be lower when you are younger. Plus, you’re less likely to be denied coverage when you’re younger. And, even with the rate hikes, the annual cost of these policies is still less than the cost of a nursing home.

The American Association of Long-Term Care Insurance reported last November that about 29% of long-term care insurance buyers under the age of 61 paid between $1,500 and $2,500 a year for their policies, with the remainder paying more, and nearly 7% paying $4,000 or more. By contrast, a private room in a nursing home costs $83,000 on average.

“The fact that pricing is a concern suggests that you may want to purchase long-term-care insurance while you are young (when premiums are lower) and in good health and while there are still choices available in the marketplace,” Fahlund said. “It is very difficult to self-insure for long- term care, since your expenses could potentially be catastrophic if you or your spouse needs care around the clock for more than one or two years.”

Others also said they think buying long-term-care insurance is a good idea, but suggest that recent rate hikes make it more difficult to trust insurers. “This product is very important,” said Bill Meyer of Retiree Inc. “I am more cautious now of the trends in the long-term-care insurance marketplace. My clients in California who had guaranteed renewable contracts did not expect a rate increase as a result of a class action law suit by the insurance companies. This does not engender trust by baby boomers with insurance companies.”
Variable-annuity industry might consolidate

As for the variable-annuity market, experts are suggesting that Genworth is leaving the business mostly because of the need for scale, which it doesn’t have.

According to Morningstar, Genworth was the 17th largest seller of variable annuities in 2008, but it dropped to 25th in 2009. And its market share of new sales in 2009 was just 0.58%. By contrast, the top five sellers of variable annuities in 2009 (Prudential Financial, MetLife, TIAA-CREF, Jackson National, and Lincoln Financial) had 51.61% market share

As with long-term-care insurance, experts suggest you continue to consider and buy variable annuities if such products are right for you. But do consider buying such products from a company that has scale, or according to Pechter, one that is not publicly traded.

“MetLife, Genworth and others are publicly-held companies, and therefore more sensitive to short-term market weather and the wrath of Wall Street analysts,” said Pechter. “Mutual insurance companies are probably less likely to change strategy abruptly. People should be more alert to the differences between mutual and publicly-held insurance companies than they currently are.”

The need to be an educated consumer is even greater now that companies are raising rates and dropping business lines. “Today there are many, many variable-annuity product offerings to choose from, and you can purchase several variable annuities over a period of years, so the need to address variable purchases is less pressing at this time than making a decision about whether or not to buy long-term-care insurance protection,” said Fahlund. “This could be just the wake-up call you need to go out and investigate your options.”

Meyer, for instance, typically recommends that retirement savers avoid investing a large portion of assets with any one insurer or type of product. “For those that want the guarantee...make sure it is a small portion of the total income and underwritten by a high-quality, low-cost provider.”

In general, however, experts say retirement savers should worry less about the products and more about the process. “Insurance products are important, but consumers must understand what they are getting with the product they purchase, and the associated trade-off in mortality costs,” said Meyer. “Withdrawal strategies and developing an income plan should not be about product. A retiree needs a service or process in which advice is delivered and managed over time.”

Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.

In 2011 job opportunities will be in these areas....

Source: Market Watch
Jan. 10, 2011, 12:01 a.m. EST
Where the jobs are in 2011
By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — A good job is still hard to find, though recent labor-market data indicate the employment situation is slowly improving.

While the economy is adding jobs at lower levels than workers would like, analysts expect some growth in a wide range of service jobs this year — including retail, information technology, professional, scientific and technical jobs — and continuing growth in health care. Read more about the job market’s lost decade. Read more about unemployment rate drops to 9.4%.

“Primary job generation will be across a wide range of private service areas,” said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic consulting firm in Lexington, Mass.

With the aging population, health care remains a primary field for job growth, experts say. “Health care is always adding jobs. That will clearly continue,” said Dean Baker, co-director of the Center for Economic and Policy Research, a Washington think tank.

Among the positions expected to have greater demand in coming years: nurses, medical scientists, physician assistants, skin-care specialists and dental hygienists.

Information-technology also will add jobs, because companies that have been sitting on cash will upgrade their technology to gain a competitive edge as the economy emerges from the recession, said John Challenger, chief executive of outplacement firm Challenger, Gray & Christmas, in Chicago.

“A lot of companies over the last couple of years have cut down their spending on IT,” Challenger said. “But, as we know, technology takes quantum leaps every few years. So there is technology that companies are buying, and they will need people who can come in and implement it, customize it, teach people how to use it, provide technical support.”

Gault said there also could be room for growth in financial-services jobs. “Lending activity should pick up,” he said. “There will be more deal making. Companies will be raising more capital and they will need more assistance from the financial sector.”

He added that professional, scientific and technical jobs could pick up as well. “Companies will want to start to pick up research-and-development spending,” Gault said, “so their need for more highly skilled workers will increase.”

Revenue generators

Another area expected to get a hiring boost: any positions that represent revenue generators for a company, according to a survey of more than 2,400 hiring managers and human-resource professionals conducted in November and December for jobs website CareerBuilder.com.

Among firms that expect to increase full-time, permanent workers in 2011, here are the top areas, by function, according to the survey: sales, information technology, customer service, engineering, technology, administrative, business development, marketing, research/development and accounting/finance.

Workers in sales and marketing positions help “drive top-line growth for an organization,” said Jennifer Grasz, a spokeswoman for CareerBuilder.com.

Still, many companies remain cautious about taking on more full-time staff, so analysts expect to see continued growth in the hiring of temporary workers. Temp workers allow companies to fill needed positions without taking on the cost of a full-time worker.

“Employers don’t want to pick up costs like health care, they don’t want to pick up overhead costs,” Baker said. According to CareerBuilder.com, many health-care, financial services, and professional-and business-services firms plan to hire temporary or contract workers.

And it may be a while before companies turn temp positions into permanent ones. “The labor market is still going to be very, very weak, so there’s not a huge incentive for companies to convert these workers into full-time workers,” Gault said.

According to the CareerBuilder.com survey, 34% of hiring managers said they will hire contract or temporary workers in 2011, up from 30% in 2010 and 28% in 2009.

Government work? Better look elsewhere

One place you won’t find job growth: the public sector.

Cities and states are expected to cut staff in 2011, Challenger said. Many municipal and state budgets face the axe as federal aid dwindles. And, Baker said, there won’t be much hiring on the federal level, either.

“The public sector is going into recession from a jobs standpoint,” Challenger said. “It will lose jobs in 2011 as the country comes to terms with the deficits that are out there. There will be some places where they have no choice but to cut workers, library personnel, teachers.”

Cuts could also affect nonprofits that do business with the government, said Timothy Bartik, senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.

“We expect to see some weakening in state and local government,” Bartik said. “A lot of state and local areas will have to make cutbacks, and that will have an impact on nonprofit agencies that contract with state and local governments.”

Ruth Mantell is a MarketWatch reporter based in Washington.

Canadians training with al-Qaida for jihad: report

RCMP probe report saying Canadians training with al-Qaida in Pakistan for jihad
By The Canadian Press | Sat, 15 Jan 3:05 AM EST
TORONTO - The RCMP is probing an online news report that says a group of Canadian militants is training for jihad in Pakistani al-Qaida camps.

Hong Kong-based Asia Times Online cites "well-placed Taliban sources" saying the terrorist group is training a number of Western Caucasians — Canadians in particular— for attacks in Canada.

Assistant RCMP commissioner Gilles Michaud told the Canadian Press Friday that the Mounties and their security and intelligence partners were assessing the information in the report for its "credibility and reliability."

Michaud said the RCMP would take "appropriate action" according to the results of that assessment, which he added was being carried out as quickly as possible.

In the report, a militant from Pakistan's North Waziristan region claims 12 Canadians went to Afghanistan last February and received basic jihadi training.

Arif Wazir says the Canadians were sent to Pakistan in November for "special courses" that included the use of sophisticated weapons and how to connect with local smuggling networks in North America.

The Asia Times report goes on to quote Wazir saying the Canadians will eventually return home to execute al-Qaida's plan to target Canada's big cities.

The article says the Canadians joined an Egyptian militant organization, Jihad al-Islami, which helped them get to Afghanistan in the first place.

It adds that other Westerners from the U.S., Britain and Germany, are also being trained for jihad in North Waziristan, which borders Afghanistan.

The report was written by the site's Pakistan bureau chief, Syed Saleem Shahzad, and a tribal affairs special correspondent Tahir Ali.

Shahzad is also the author of an upcoming book called "Inside Al-Qaeda and the Taliban 9/11 and Beyond.

In early October western officials said they were investigating a terror plot to carry out Mumbai-style shooting rampages or other attacks in Britain, France and Germany.

A Pakistani intelligence official said a number of Germans and British militants were involved, but the warnings of possible imminent attacks proved a false alarm.

A spokeswoman for Germany's Federal Criminal Police office said in October there was "concrete evidence" that 70 German citizens had undergone terror training in Pakistan’s lawless border region and that about a third of the militants had returned to Germany.

Rolf Tophoven, director of the Germany-based Institute for Terrorism Research and Security Policy, recently said he had seen estimates that "between 30 and 40 hardcore terrorists" from Germany are currently in the Afghanistan-Pakistan border region.

A report released in October by George Washington University's Homeland Security Policy Institute and the Swedish National Defence College's Center for Asymmetric Threat Studies warned that radicalized Westerners who easily travel around the world represent a growing terrorism threat.

And the report urged the U.S. and its European allies to work together to confront this new threat.

Is J.P. Morgan finally coming out of life support ?

Source: Wall Street Journal
Saturday January 15, 2011
J.P. Morgan Rides Consumer Revival
Bank's Profit Jumps 47% for the Quarter as Credit Demand Grows; Average Banker Makes $369,651
By DAN FITZPATRICK
J.P. Morgan Chase & Co. posted a 47% jump in fourth-quarter profit, providing a boost to bank stocks Friday as investors cheered new signs of strength among U.S. consumers and businesses.

Chief Executive James Dimon predicted demand for new credit would increase in 2011. The U.S. consumer, he said, "is getting stronger," and certain firms are showing new appetite for loans.

"I think the future is extremely bright, despite all the headwinds," he said.

Results for the New York bank, an industry bellwether, helped lift the share prices of the nation's largest banks on Friday. Led by a 1.03% jump at J.P. Morgan, shares of Bank of America rose more than 3%. Wells Fargo & Co. rose nearly 3% while Citigroup Inc. was up nearly 2%.

Analysts expect many J.P. Morgan's rivals to follow in the coming week with similar improvements in earnings, credit and capital.

Delinquencies among certain borrowers are expected to slow and lending to pick up in certain sectors.

J.P. Morgan's results of $1.12 a share, which handily exceeded Wall Street's expectations of 99 cents, help illustrate how the nation's largest banks are taking advantage of their size and diversity as they work through many problems.

Rarely has the difference between big and small banks been so stark. Three institutions, including J.P. Morgan Chase, now hold more than 33% of all U.S. deposits and are responsible for more than half of all home mortgage originations.

One sign of J.P. Morgan's sweeping market share during the quarter was that it issued $50.8 billion in new mortgage loans, up 24% compared with the year-ago quarter. Total loans were up 9% as compared with a year ago.

It also recorded revenue gains in five of its six business lines, while its number of nonperforming loans declined 16% to $16.6 billion. Fewer bad loans allowed it to release about $2 billion in reserves, a big contributor to profits. Overall net income for the quarter was $4.83 billion, up from $3.28 billion.

While big banks are putting the U.S. downturn behind them, regional banks are still dealing with their overreliance on real estate even as their earnings improve from year-ago levels.

M&T Bank Corp., a Buffalo, N.Y., bank with $68 billion in assets, compared with J.P. Morgan's $2.1 trillion, said Friday that fourth-quarter net income rose 49% to $204 million from year-earlier levels. Still, nonperforming loans rose 13% from third quarter levels due to two problem borrowers and an increase in foreclosed properties. The troubled loans came from a residential builder and a developer of retirement and assisted-living properties.

The rising number of nonperforming assets remains "a lingering concern" for M&T, said Ken Zerbe, banking analyst with Morgan Stanley, in a note.

While J.P. Morgan shares jumped Friday, M&T stock was down for much of the day before ending up 0.14%.

Many regionals don't have investment banks—big revenue generators for J.P. Morgan and other national banks. The unit was the company's most profitable, with $1.5 billion in net income buoyed by a 26% increase in revenue. Debt underwriting fees were up 26% as businesses turned to credit markets for funding. Fixed-income trading revenue was up 5%.

Compensation in J.P. Morgan's investment bank increased 4% but that is largely because the number of employees dropped. The average pay per employee in the investment bank dipped 2.4% to $369,651.

J.P. Morgan showed strength in its Main Street business, as well. Both credit cards and its retail unit were profitable, compared with losses in the year-ago period. In cards, the number of loans written off as uncollectible dropped to 7.08%, from 8.64% in the year-ago period. That allowed the bank to release $2 billion in card reserves.

Investors still aren't pleased that big banks continue to rely so heavily on improving credit conditions, and their attendant release of reserves, to pump profits. In a Friday call with reporters, Mr. Dimon conceded in regard to the bank's big reserve release: "I don't look at it as earnings."

Plenty of challenges remain for J.P. Morgan and other big banks. The U.S. housing market, Mr. Dimon said, is still "terrible" and J.P. Morgan needs to decide how it will replace revenues it expects to lose to new regulations. Mr. Dimon said Friday the bank is considering new checking and debit-card fees to compensate for clamp-downs on its consumer business.

Another headache for J.P. Morgan revolves around its exposure to mortgage documentation problems and mounting demands that it repurchase bad mortgages issued before the housing bust. J.P. Morgan set aside $1.5 billion of additional reserves largely to deal with any litigation resulting from buyback demands.

"It is going to be a long, ugly mess," Mr. Dimon said, but "it will not be life-threatening to J.P. Morgan." The bank has $3 billion in reserves for this issue, and it expects 2011 repurchase losses to be about $1.2 billion.

It "will be years before we know the ultimate outcome" he added. "We will be talking about his every quarter for the next three years."
—Robin Sidel contributed to this article.

Write to Dan Fitzpatrick at dan.fitzpatrick@wsj.com