Money Minute: Fed Sets End Date for Bond-Buying Stimulus

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The Federal Reserve's controversial bond buying program also known as "quantitative easing" is gearing up for its finale.

The Federal Reserve began buying Treasuries and other securities in 2008 at the height of the financial crisis in a bid to stimulate the economy. The decision has substantially inflated the Fed's balance sheet.

Economy Yellen
J. Scott Applewhite/APFederal Reserve Chair Janet Yellen
Whether it was the right course of action is the topic of much debate but for the first time the Central Bank has pinpointed its exit date: as of November the Fed will no longer be buying bonds. The announcement signals more confidence in the economy as the unemployment rate has fallen and inflation remains low. Now the focus is on when the Fed plans on raising interest rates and the timing of that will likely have a huge impact on financial markets.

Here on Wall Street on Wednesday, the major indexes bounced back after their steepest two-day sell-off since May. The Dow Jones industrial average (^DJI) gained 78 points, the Nasdaq composite (^IXIC) picked up 27 points and Standard & Poor's 500 index (^GPSC) rose 9 points.

Foreign banks are under the microscope right now following BNP Paribas's record $8.9 billion settlement for violating U.S. sanction laws. Federal agencies are ramping up their investigations of at least six other banks in Germany, France, Italy and Japan to see whether they have processed transactions for sanctioned countries through their U.S. divisions. If they are found guilty they could face steep fines and risk being cut off from the U.S. financial system, which would be detrimental to their businesses.

The saga at American Apparel (APP) seems to have come to an end -- for now, at least. After ousting CEO Dov Charney three weeks ago a lender called in its $10 million loan and the stock was badly beaten. But now the former CEO, the board and a major investor, Standard General, have come to an agreement. Standard General is injecting $25 million into the company, the board will be remade and they are committed to keeping manufacturing in the U.S. -- a major part of the company's branding. Questions still remain over the fate of the company and its former CEO, who wants to be back in the driver's seat, but at least for now American Apparel has been giving a shot at turning itself around.

And finally, Sunday marks the end of World Cup as Argentina faces off with Germany. If you're thinking of jetting down to Rio to catch the game, you'd better bring a giant bag of money with you. Tickets distributed by FIFA are sold out but on the secondary markets you're looking at a price tag of anywhere from $5,000 to $20,000 dollars if you go through ticket resellers. On eBay (EBAY) there are tickets with an opening bid for $3,000 to $12,000 but they could go much higher. That's a major markup as the tickets FIFA sold have a face value of $440 to $990. And be careful where you buy your tickets from. Scalping is illegal in Brazil, and you are vulnerable to fakes should you buy them from an unknown entity.

-Produced by Karina Huber.

26 Ways to Trim Your Household Costs, Room by Room
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Money Minute: Fed Sets End Date for Bond-Buying Stimulus
  • TV. Downgrade to a cheaper package or eliminate cable/satellite altogether and use services like Hulu and Netflix (NFLX).
  • Electronics. Put your electronics on a "smart" power strip to lower electricity costs. Turn off electronics and unplug phone chargers when they're not in use.
  • Lights. Replace your traditional bulbs with CFL or LED bulbs to cut energy costs dramatically.
  • Furniture. Shop second-hand, go to garage sales and comparison-shop online to get the best prices on some great, unusual pieces.
  • Heating and cooling. Get a programmable thermostat to help regulate your home's temperature based on when you're there and when you're away.
  • Appliances. Energy Star appliances may cost more to buy, but they're well worth it when it comes to the long-term savings.
  • Water. Don't waste money on bottled water. Filter your own tap water with a faucet-mounted or pitcher-style filter and take it with you in a reusable water bottle.
  • Dishes. Only run the dishwasher when it's full, and let the dishes air-dry.
  • Cleaning. Use reusable sponges and dish cloths rather than paper towels. Make your own cleaning solutions from inexpensive household ingredients like ammonia, vinegar and baking soda.
  • Shower. Use a low-flow shower head and limit your shower time. (Sorry, long, hot showers are a no-no.)
  • Sink. Turn off the water when you're brushing teeth or shaving.
  • Toilet. Invest in a dual-flush toilet, which has separate buttons allowing you to flush with a small amount of water or a large amount, depending on the job at hand.
  • Lights. Put lights on a dimmer to use less energy late at night and early in the morning, when bright light is not necessary.
  • Heating. Bundle up in cold months with multiple covers and quilts, and turn the heat down when you're sleeping.
  • Closet. Clean out your closet and sell any unwanted or rarely used clothes and accessories.
  • Use it more. Instead of eating out, cook more dinners at home, and have friends over for a potlucks instead of going out to pricey restaurants.
  • Phone. Get rid of your landline if you rarely use it. There's no point in having one if you're on your cell all the time anyway.
  • Internet. Get internet service from your phone or TV provider and bundle your services for savings.
  • Work out. Create a home gym and cancel your pricey gym membership.
  • Store food in bulk. Get a standalone freezer and create a pantry area with shelving units to store products purchased in bulk or on sale.
  • Laundry. Use cold water, only run full loads, air-dry items, and regularly clean lint traps to keep your machines running efficiently.
  • Hot water tank. Insulate your hot water tank and set it at a lower temperature.
  • Furnace. Change the furnace filter regularly and have your air ducts professionally cleaned every three to five years.
  • Extra space. Rent out unused space, whether it's a storage space, a bedroom to a student, or creating an entire apartment.
  • Insulation. Keep heat from escaping and lower your energy bills by insulating your attic.
  • Odds and ends. Storing a ton of stuff up there? Hold a garage sale and sell what you're not using.
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