Tuesday, December 21, 2010

Edition #590

Today's Highlights:

Weekly Spotlight:

Only 3 shopping days 'til Christmas! Give the gift that's always the right style, the right color, the right choice. A GCF Visa Gift Card is always the perfect gift for any occasion. Stop into any GCF branch to purchase a GCF Visa Gift Card for someone special!

Our Current Rates:

For a listing of our current deposit and loan rates, click here.

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1st Flash

2010 Census Results Just In

Results of the 2010 Census are in. As of April 2010, the official U.S. population is 308,745,538. This is an increase of 9.7 percent from a decade earlier, the smallest increase in our population since the Great Depression.

The Census also revealed a radical shift in centers of population. This is key as congressional seats and federal funding are based on these figures.

Ten states, mostly in the Northeast and Midwest, will lose congressional seats. Eight states in the South and West will gain them.

Texas showed the biggest shift, with four new members in the House of Representatives. Florida gains two seats. Georgia, South Carolina, Arizona, Nevada and Utah will each add one.

The results also cement the shift of political power, as the states gaining seats are predominantly Republican.

Those losing representation are Democratic strongholds. Ohio and New York both lost two seats. Illinois, Iowa, Massachusetts, Michigan, Missouri and New Jersey all lost one. For the first time since 1920, California will not add a new House seat.

We saw several agonizing hours of commercials urging us to complete our Census forms. Why was it so important? Federal funding was at stake. About $447 billion worth of funding is based on formulas tied to Census data.

States get about 20 percent of their money from federal funds. With all the belt-tightening we're experiencing right now, a shift in funding can loom large in states already being pinched.

In fiscal year 2008, 215 federal programs used Census data as a guide to distributing funds.

Medicaid receives the largest amount of federal aid with 58 percent of all Census based funding. Transportation, such as highway projects, is the next largest recipient.

Affordable housing projects and education each garner a large share as well.

The U.S. Census Bureau estimates 74 percent of American households participated in the 2010 Census, equal to the participation rate in 2000. They consider this a significant achievement, as worldwide participation has been in a decline.

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2nd Flash

Don't Believe All the Headlines

Headlines are written to catch the reader's attention. Most of us skim through a publication, not many read every single article. Some subjects are just not what we consider of interest.

A good headline helps you sort out which articles are worthy of your time. But just because you read something in a headline does not guarantee it is true.

An email's subject line serves the same purpose. We're inundated with far too many forwards from well-meaning friends to reach each message in our inbox. So we sort through to pick out items that may be of interest.

Just last week I got an email titled "The True Story of Rudolph the Red-Nosed Reindeer." A true heart tugger, claiming the author wrote the song as a gift to his four-year-old daughter. The author was destitute, his wife on cancer's deathbed. The song was a hit that turned the man's fortunes around.

What a great Christmas story it would have made, had it been true.

Robert May authored the famous tune about the reject-turned-hero reindeer at the request of his employer, Montgomery Ward. They wanted him to write a story they could publish as a coloring book to give away to children over the Christmas season in 1939. It was a hit. But the copyright belonged to his employer.

It wasn't until 1947 that May convinced Montgomery Ward to turn the copyright over to him. The part about his wife's illness was true. Her death left him in debt with medical bills.

May's brother-in-law, Johnny Marks, turned the story into lyrics and a melody. Gene Autry recorded the song in 1949 to make Rudolph almost as popular as Santa Claus himself. The song sold two million copies in its first year, second only to "White Christmas" in becoming one of the best-selling Christmas songs of all time.

Still a good story, and it would have stood well on its own without the added emotional drama.

Yet it did get me wondering about the history of some of our most-loved Christmas songs.

"Jingle Bells" was written in 1857. It's a carol that can be sung by anyone, regardless of religious or ideological opinions. There's no mention of Christmas, Santa Claus or Jesus. Simply a song about winter fun. There were several other verses than those we sing now, having to do with a young man riding his sleigh around to attract members of the fairer sex. As well-loved as this song has become, it also ranks as the most-hated holiday song. The version with the barking dogs, that is.

There really was a "Good King Wenceslas", and he really was known to walk barefoot in the snow to offer charity to those in need. He reigned in Czechoslovakia from 907-935 A.D. and is the patron saint of that country.

The holiday season is a time of celebration. Nothing can bolster the spirit like songs of joy. Whether you celebrate the winter solstice and the shift towards longer days with songs about snow and sledding or the spiritual aspect with hymns about the birth of Jesus, there's something special about this season. It brings us all together if we will let it.

The staff of GCFlash wishes all of our readers a very Merry Christmas.

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Financial News

Risk versus reward. When investing, you hope to be compensated for the amount of risk you take. Traditionally, a low risk investment would be a United States Treasury security, backed by the full faith and credit of the United States. U.S. securities are still considered a safe investment by most. The 10-year U.S. bond with a coupon of 2.625 percent is yielding 3.34 percent today.

This is not the same of all other national debt. With the international economic turmoil, countries are having trouble all over. Currently, Spanish bonds are having their difficulty. The 10-year Spanish bond rose from 1.52 percent to 5.52 percent as investors worry that Spain will need to be rescued much like Ireland and Greece. Yet many investors are still not willing to take the risk that Spain might default, leaving investors with a loss.

In comparison, the 10-year U.K. Bond has a coupon of 4.75 percent and is yielding 3.48 percent, while the 10-year Japanese bond with a coupon of 1.2 percent is yielding 1.19 percent. Of course, other types of governmental investments like municipals also provide a return for the risk. But that's another story for another day.

The recent difficult economic times have caused investments, and investors, to behave differently than in more "normal" economic times. It certainly is interest times!

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