Archive for the 'Finance' Category

11th hour deal to extend the debt ceiling and fund the U.S. government

At the 11th hour on October 16, 2013, the U.S. Congress adopted and the President signed a Resolution ending the government shut down since the begging of October and temporarily extending the U.S. debt ceiling. The compromised deal will extend the funding for the government until January 15, 2014 allowing budget negotiators of the Senate and the House to work on a budget. It will also extend the borrowing power of the U.S. government to pay its bills until February 7, 2014 averting a debt payment default on October 17, 2013.

The last minute compromise averted a fiscal disaster that affects not only the U.S. but also the entire world. The Chinese and Japanese governments are warning the U.S. government to get its fiscal policies in order. The Chinese are more specifically questioning the viability of the U.S. dollar as the world’s preferred currency in light of the whole ordeal.

Domestically the whole ordeal creates political headaches for the President, Republicans and the Democrats. It appears that the public anger is aimed more towards the House Republicans than any other. Political fallout could continue until the next year’s Congressional elections making some current members more vulnerable to voter revolt.

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elegant on October 21st 2013 in Finance

Five-year anniversary of the collapse of the world financial markets

It has been five years in September 2013 since the collapse of the Wall Street investment banking behemoth Lehman Brothers on September 15, 2008, the collapse of the stock market and the subsequent collapse of the housing market in 2008. The crisis continued until 2009 affecting economies worldwide. The S&P 500 reached its intraday low of 666 on March 6, 2009.

A lot has happened since the collapse and the economic recovery still continuing. In the U.S. Volcker Rule, a specific section of the Dodd-Frank Wall Street Reform and Consumer Protection Act, named after the former Federal Reserve Chairman Paul Volcker, introduced restrictions on banks trading on stocks that do not benefit the bank’s clients. Many refer to the rule as a ban on proprietary trading by commercial banks. Attempts to fully implement the Rule are still on-going.

Passage of Dodd-Frank legislation affect the oversight and supervision of financial institutions, provides for new procedures for large financial institutions, creates a new consumer financial agency to protect consumers, introduced higher capital requirements for financial institutions, and host of other financial regulations. A total of 153 of the 398 required rules under the act have been finalized.

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elegant on September 16th 2013 in Finance

Emerging market fixed-income investments for investors

More and more investors in developed countries are looking to invest in emerging markets. The ever decreasing low yields are pushing investors out of developed markets. Fixed-income investors are looking to emerging markets more so than equity investors. According to Lipper, so far this year more than $18 billion has been poured into fixed-income investments in emerging markets. Compare this to last year’s investment of $16.5 billion.

Why investors are flocking to emerging markets? Strong fundamentals are one reason. Many of the emerging markets are running at surpluses. The average debt-to-GDP ratio is between 35 to 50 percent compared to over 100 percent in developed countries. Emerging market bonds provide investors with income, interest-rate risk compared to U.S., diversification and improving credit quality. In the past many fund managers concentrated only on dollar denominated debt of emerging markets. But today due to improve fundamentals, they are promoting investments in local-denominated sovereign debt as well as corporate debt.

Funds are a good way to invest in sovereign debt. Investors should look into Fidelity New Markets Income fund, TCW Emerging Markets Income fund, Pimco Emerging Markets Bond fund, Pimco Emerging Local Bond fund, MFS Emerging Markets Debt fund, and MFS Emerging Markets Debt Local Currency fund.

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elegant on October 2nd 2012 in Finance

Impact of economic slowdown in China

In recent years trade between China and Australia have increased from approximately 3.6 billion Australian Dollars in 1991 to a record 121 billion Australian Dollars. Most of the trade came from demand for Australian iron ore and as a result the Australian unemployment rate went down to 5.1 percent from an average of 7.8 percent of the previous decade. However, things are changing for both countries, especially bad news for both.

The Chinese economic growth is expected to slowdown to about 7.5 percent, the lowest since 2004. The Australia will be the hardest hit. The export of iron ore from Australia to China has tumbled by about 25 percent due to the slowdown in the Chinese economy causing a slowdown in Australian economy. China buys about 28 percent of all Australian exports.

Rio Tinto, BHP Billiton and Fortescue Metals Group are the three biggest iron ore miners in Australia. BHP Billiton recently announced that it is delaying the proposed $33 billion expansion in Australia. Fortescue cut its capital expenditure by about 26 percent. The strengthening Australian dollar is also contributing to the lower purchases of iron ore by China. As a result Australian GDP is expected to grow by about 3.6 percent a year.

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elegant on September 3rd 2012 in Finance

Few ways to save money

Here are few ways to save money every month.

Save on credit card interest rate:  If you have a credit card balance that charge a higher interest rate, look into a balance transfer to a lower interest rate card.  Be aware of any transfer fees.

Save on mortgage interest rate:  Mortgage interest rate has gone down and stays at a historic low.  Even if you have refinanced recently, look into see whether even a lower rate is available.  Once again be aware of any fees.

Review your tax deductions:  Most common but overlooked includes expenses for job search and moving; and credits including child care credit, and the American Opportunity credit for college education.  You can go back three years and file an amended return to get credits.

Review your insurance policies:  Life insurance rates have gone down within last ten years and you may be able to lock in a lower rate for next 10 or 20 years.  If you have changes in your life style, that may trigger a lower rate.

Save more for retirement:  If you increase your monthly contribution to a retirement vehicle, your contribution may help to reduce the tax liability because tax is calculated for the balance after retirement contribution.

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elegant on August 2nd 2012 in Finance

Will the Bush era tax cuts expire in 2012?

Bush era tax cuts are contained in the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. Originally, tax cuts granted under these acts were scheduled to expire at the end of 2010 and subsequently extended for two years under the current Obama administration.

Some of the popular tax cuts includes lower marginal tax rate for all American tax payers, limit the number of tax payers subject to Alternate Minimum Tax (AMT), and reduce tax rate for capital gains and dividends.

Making the tax cut permanent will increase the national debt by $3.3 trillion over ten years. If it is made permanent for individuals earning less than $200,000 (couples earning $250,000) a year, it would increase the national debt by $2.2 trillion over next ten years. If the tax cuts are extended for all tax payers for two more years, it will cost the nation $561 billion over next ten years.

In an election year both Democrats and Republicans are not talking about any actions to make the tax cuts permanent or extend for few more years. It may come to the limelight after the election leaving very little time to reach a compromise.

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elegant on July 5th 2012 in Finance

Get ready to take credits for some overlooked expenses

Now that deadline to file 2011 tax return is upon us, there are several overlooked credits that you may qualify. You may want to collect the receipts for expenses for continuing education, charitable contributions and child-care expenses.

You may qualify up to $2,000 per family credit for tuition. You do not have to be a full-time student or pursuing for a degree. This credit is calculated as 20% of up to $10,000 of your tuition, fees and books. In order to qualify, your adjusted gross income must be less than $60,000 for single and $120,000 if married filing jointly.

You can take a deduction for charitable contributions if you itemize. You need to keep receipts for cash donations and keep other records such as store receipts for items you donated to charity.

Child-care credit could be up to $3,000 a child or $6,000 for two or more. In order to qualify, both spouses must be working or one must be a full-time student. Keep receipts for expenses of child care payments, cost of day camps and before and after school care expenses for under 13 years of age kids.

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elegant on January 23rd 2012 in Finance

The Changes in Forex Trading

Forex trading has indeed opened up over the last few years, thanks to the intervention of the internet and technology that makes investing easier. For most investors who need to learn the ropes right off the bat, this means that a step-by-step guide has to be provided in order to turn their investments into profit in both the short and long term.

Yet in the good old days, this could only be done by either finding reading material from various sources or getting in touch with people who have been in the market and making profits rather easily. Of course, in finding out what they know along with the daily happenings, you can gain a better understanding of the Forex market and what needs to be done to safeguard your investments or to increase profitability.

These days, the internet can be widely used in order to get the latest updated and news related to the Forex market from websites such as Daily FX and so on and so forth. And if that’s not enough, one can open accounts with several brokers while not even spending a dime, if you will.

Some of these brokers take it one step further by providing software in the form of Forex robots that not only make these investments for you but prevent you from waking up in the middle of the night in order to do so. So, no more sleepless nights there!

All in all, these are all very welcome changes for the Forex market that investors should make maximum use of.

Posted By: Mlava

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publisher on March 11th 2011 in Finance

A Note On Forex Trade

If you have been investing in Forex trade for some time now, you would have come across the developments in terms of software and the internet at some point of time or the other. And what makes it even more unique is the fact that the Forex trader is now referred to as the Forex webtrader.

And if that’s not enough, one can get in touch with a Forex broker through several Forex online sites that have sprung up to support the industry by offering services in terms of news, tips, signals and even tutoring upcoming investors to learn the ropes without even investing a single dollar.

As strange as this might be to those who have learnt it the hard way in the Forex market, the thing is that most of us will be able to invest the Forex market even if we do not know anything at all about the market as a whole.

And perhaps this magic can be attributed to Forex trading software that have several options for one to choose from, such as Finexo and eToro that will be extremely helpful if you really want to get started as soon as possible.

And if you’re still not convinced about whether or not the Forex market is a viable place for one to invest in, try going the online way, and you won’t regret it.

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submit on February 7th 2011 in Finance

Easy Trading With Easy Forex

There is no doubt that one of the best forex broker tools that you can use online is easy forex. It’s a website that, as its name suggests, is very easy to use and will easily satisfy your forex brokering needs. The website packs so much useful information into one manageable interface. Their motto for doing business is “ready, trade”, giving off an aura of simplicity, and yet being so comprehensive that you won’t seek another broken online ever again. However, from what seems to be a calmingly simple surface, you’ll be delving deeper and deeper until you find all the information you’re looking for—videos, glossary, e-book on forex trading—the works.

Remember, even expert forex traders are all ears to forex tips. But do not be surprised to find varying perceptions. Each trader has his or her own preferences when it comes to forex trading, such as which currencies to bet on, how much and when to trade. It’s important to remember that such discussions only involve the opinions of traders, and not necessarily hard, concrete tips. The most important thing to remember here is to carefully scrutinize the source of the information, and then decide whether the information is worth it.

Before you proceed with launching an entire fx360 cycle with ever-dependable forex robots, you first have to look at their user reviews. Nothing can be farther from the truth, especially what you see in television commercials and films where forex traders and brokers lounge in a vacation spot while robots do the trading for them. The truth is, plenty forex robots out there are near being mediocre, meaning they’re not entirely capable, no matter how hard you wish, of running your trading business throughout the whole year without resulting in great financial losses.

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submit on January 9th 2011 in Finance