Archive for September, 2010

  • Banking on Bernanke>
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    Banking on Bernanke
    The Federal Open Market Committee released a statement recently based on information they had received since the Committee last convened in August. Among broader things, the statement talked about The pace of recovery, and how it has slowed down of late. Household spending increasing, but being hamstrung by high unemployment levels and unavailability of credit. Inflation not being consistent with its price stability and employment mandates. How there will likely be no shift in policy from the September gathering. It’s annoying in a sense, since the Fed does acknowledge that there is an issue, but this policy is tantamount to just sweeping the issue under the carpet. The Federal Reserve has its stated aims and ambitions for the economy and even as these aims might well not be the met, the  [...]
    at September 27th, 2010 at 01:09 am
  • Africa a-rising>
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    Africa a-rising
    It seems that Africa is finally here to stay. A few years back, when ICBC shelled out $5.5 billion in order to pick up a 20% stake in Standard Bank, bankers everywhere awoke to the possibility of Africa rising. No longer was Africa merely the stuff of exotica, it was now a serious investment destination. That was 2007, and Africa was moving out of the realm of pure curiosity and into the realm of strong profitability. Since then, Nigerian banks have flattered to deceive and lilted through a crisis (it seems as if Nigerian scammers and their banks are both after your money) but the innate logic that Africa has strong trade links with several other strategic emerging markets are still a strong one. Africa still runs hot as investment destinations go. With America in financial limbo, Europe strapped  [...]
    at September 22nd, 2010 at 03:09 am
  • America needs a tax cut>
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    America needs a tax cut
    It’s been a few years since the onset of the financial crisis now, and the continued wobbling of the financial, employment and real estate markets is still a worry now as it was a few years ago when all of this exploded in our face. The lack of any distinct centralized stimulus has meant that a double dip recession is now a far greater likelihood than at any other point in this sequence of events that has led us up until this point. The government has done a lot to help alleviate the troubles that ail us. It setup the Troubled Assets Relief Program, initiated stimulus spending to help prop up a wobbling economy and offered near zero percent interest rates. This has helped stop the spiral of the American economy into the sort of situation that brought about the Great Depression. But all of  [...]
    at September 20th, 2010 at 12:09 am
  • That same old AIG story>
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    That same old AIG story
    Why is AIG being treated with kid gloves and being allowed to retrade its deal with taxpayers again? Why is one of the biggest wards of the state being treated with such patience and ease? The original AIG deal that was struck with the Federal Reserve saw it get the same terms as any other private sector funding initiative. But that failed to raise enough money. Then the powers to be decided that the sub divisions of AIG would be sold off and the proceeds would go towards coming good on borrowings and there was no doubt among the upper management that exactly this would happen. This was a great solution in that AIG had to dismantle the very machinery that got it into this colossal mess in the first place. The interest on their borrowing was high, and so AIG was forced into taking rapid action  [...]
    at September 15th, 2010 at 01:09 am
  • Goldman’s goldmine>
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    Goldman’s goldmine
    Goldman Sachs is considered the golden boy of Wall Street, and becoming a partner is considered the holy grail. It’s like finding out you won a billion dollar lottery, married Scarlett Johansson and have it made for life all at once. It’s the realization of a dream. Come this fall, in a process that can be dubbed highly secretive, a 100 executives will be bestowed an honor that they might liken to being knighted by the queen herself, and with good reason too. The pay packet will be a fat one and it is a fast track to getting a top job at the famed company. But what these 100 executives don’t know is that just as this honor can be given, it can also be taken away. 60 executives will find themselves stripped of superstardom in order to make way for a new order, if inside sources are to  [...]
    at September 13th, 2010 at 12:09 am
  • The walking jobless>
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    The walking jobless
    There is a great depression hanging in the air like the sword of Damocles, and it is one that cuts sharp for those that are among the teeming unemployed of America. The bad news however is that this is set to worsen. The Labor department was the harbinger of bad news when they announced, quite somberly, that only 67,000 jobs had been created in the month of August. If you think that’s bad, compare that to the July figures of 107,000 before making a judgment. A large part of that had to do with the fact that the government laid off temporary Census workers during this period, and on the whole the economy lost some 54,000 jobs. On average, there is a need for some 125,000 new jobs created per month in order to keep pace with the population growth rate and the potential workforce that keeps  [...]
    at September 8th, 2010 at 12:09 am
  • Real estate really isn’t that bad a bet>
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    Real estate really isn’t that bad a bet
    The housing market bubble has burst, and everyone is now decrying buying and owning a home as an unnecessary expense. The news is terrible and everyone is talking about foreclosures and the millions of homeless so it is true when they say that there really is no news like bad news. Stocks are flapping and flailing and failing to take off and unemployment is terrible, although it is getting better all the time. Despite this entire hullabaloo in the orchard, it might not be such a bad deal at all for you to buy a house, although we cannot honestly say that can be a universal claim applicable to all. Here’s how it can apply to you. Dirt cheap rates Have you checked out those mortgage rates of late? They’re lower than the lowest of low-lying fruit! Fixed mortgages are now getting locked in  [...]
    at September 6th, 2010 at 04:09 am
  • Maybe it’s time to sell that mutual fund>
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    Maybe it’s time to sell that mutual fund
    It’s the most difficult decision you might ever have to make as an investor, and we’re talking about knowing when to sell. Like real estate, timing is all of the essence and your idea to shuffle things around and say “adios” at the right time could be the difference between you being uber-successful or an average Joe. There will lots of thoughts swirling in your mind prior to your selling, such as the obvious “what if I sell and it suddenly skyrockets?” Sure, you’ll be out of lots of theoretical money in that case, but what if it suddenly goes into free fall and you’re faced with a giant, yawning black hole where your money once was? Isn’t prudence the better part of valor sometimes? Mutual funds can be very dicey that way; many people just go with the flow without ever looking  [...]
    at September 1st, 2010 at 03:09 am