The Federal Reserve’s latest interest rate cut, which effectively made interest rates to zero, is quite tricky. At the outset, the zero interest rate seems enticing to the borrowers. Getting a loan with very low interests is certainly appealing to the public. But the question is, who would want to loan now? And the more painful question is, can the banks afford to lend out money at this time? With the ongoing financial turmoil, the banks’ priority is to clean out their balance sheets first, that is to say they’ve got to collect the money they previously released to the borrowers. So, definitely, lending out money would be least on their priorities. That is the painful reality. Therefore, the Fed’s interest rate cut appears to be of no substantial effect at this time.
Posted by Jones on December 31st, 2008 :: Filed under
$$$ CRISIS,
EVERYDAY MONEY STUFF,
SIMPLY SCANDALOUS
President-elect Barack Obama’s first day in office will not be easy. On January, when he is going to sit in his desk at the White House, Obama will have to face a huge load of problems on the nation’s economy. Hence his team is already preparing a “stimulus package plan,” estimated to cost about $1 trillion for two years. This plan would include health care financing, energy-saving plans, expanded unemployment aid, school construction and renovation, food stamps for the less fortunate and tax breaks.
Well, the president-elect must really prepare now. The legacy that will be left by outgoing Pres. Bush is not so much of a legacy but a burden – a crippled economy at that. So incoming Pres. Obama must be ready on his first grueling day at office.
Posted by Jones on December 30th, 2008 :: Filed under
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Perhaps a good way of investment, amid the current financial and credit slump, is to buy as much stock or property and save it until the dusts have settled. Stock market analysts said the bear market that is ongoing has definitely brought losses to the investors. With stock prices heading south in an undeterminable period of time, any investors who bought these stocks at high prices found their investments suffer a loss. Hence whenever there is an opportunity, like when the stocks are up for grabs, don’t lose the opportunity. Buy it and then save it until the crisis is over. By that time, the stock’s value will go up once again and definitely your profit will go up.
But the question is, when will that happen? Let’s just hope it would happen sooner than later. But still the best move today is to buy stocks while you can and save while you also can.
Posted by Jones on December 30th, 2008 :: Filed under
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Uncategorized
The world’s second biggest economy is into deep trouble. Japan’s exports have plummetted to a record 27% from last year. This means that Japanese production slowed down significantly. Either that or demand for Japanese products really dropped. But one thing is for sure, Japan, which is in recession, is likely to experience more economic inactivity as production facilities are being closed and workers are being laid off. Sounds very familiar with the situation back in the United States. It then appears that the world’s largest economies are failing. However, there is a wide belief that after this crisis the economies of the industrialized countries will revive. That is, the current economic failures shall serve to fix the current complexities in the world market. After the dusts have settled, a new world economic order will definitely surface.
Posted by Jones on December 29th, 2008 :: Filed under
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Banks and lenders have reacted strongly against the new rules on credit card practices. The new rules impose stricter regulations in raising interest rates on credit card transactions.the regulations, which was adopted by the Federal Reserve and other federal regulators, also require credit card issuers to give sufficient time and notice to card holders before raising interest rates and making their payments. The issuers warned the new rules would reduce credit for consumers.
As expected, the banks would naturally react against the imposition of the new credit card rules. The banks’ reactions are totally out of place. With the bailout in place, the banks should not oppose the imposition of the regulations on credit card. After all, the financial mess is of their own wrongdoings. The government is just fixing the problems the financial insitutions have brought. So it is only right to protect the consumers, just as the government saved the asses of the banks’ “strategists” who brought the financial turmoil.
Posted by Jones on December 28th, 2008 :: Filed under
EVERYDAY MONEY STUFF
It seems then the OPEC action to cut production boomeranged on its face. The oil production cut is obviously a ploy by the cartel to spur another wave of oil price increases. By reducing production, the supply will drop and hence demand will rise, which could then result to an increase in oil prices. However, with the way things are going, the OPEC move is not effective, which is also good for the consumers. Let’s just hope oil prices will be stable in a long run.
However, the drop in the oil prices took its toll on the utility companies. Shares of the utility companies dropped sharply in the stock market. The recent announcement by OPEC to slash oil production did not have any effect, as crude oil costs fell even lower. But analysts said the weakening electricity demand is the primary reason in the drop in the utilities’ shares.
Posted by Jones on December 27th, 2008 :: Filed under
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General Motors is to announce the release of tis redesigned Chevrolet Equinox. The 2010 Equinox will debut at the North American International Auto Show next month. Well, nothing is quite intriguing about this new product. It just means that GM is still in the business. However, this will certainly give rise to the question, is GM really troubled? The company has been asking for financial aid from the government. The automaker said its financial chest is drained out. But with the release of the new and redesigned Equuinox, GM seems to be still on the right track. So, would it really need financial help from the government? is it really worth to shell out taxpayers’ money to this company?
Posted by Jones on December 26th, 2008 :: Filed under
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$$$ CRISIS,
SIMPLY SCANDALOUS
The United States may slightly miss its target production of biofuels by 2022. According to government estimates, the country’s total biofuel production by 2022 may reach only 30 billion barrels, 6 billion barrels short of the mandated objective. Government officials said the the current technologies for biofuel production is not enough to meet the mandated target.
Not a great news. If such thing is true, that means the country will still rely on crude oil. The environment is already reeling on the effects of climate change brought by the use of oil and other pollutants. The government ought to speed up biofuel production and double its efforts towards innovating new technological advancements so that the environment-friendly biofuels can replace oil. The pressure will be on the government.
Posted by Jones on December 25th, 2008 :: Filed under
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SIMPLY SCANDALOUS
After an almost untimely and stunning collapse, Morgan Stanley is finally showing signs of life. With fund infusions coming from the U.S. government through the bailout package and Japan’s Mitsubishi UFJ Financial Group, the American bank is able to buy back its own debts. Such anactivity shows that Morgan Stanley is ready to become an active player in the financial market.
It seems that the bailout plan worked, at least in the case of Morgan Stanley. However, the bailout package should be the last to be approved by the government. In the future, the government should not use the taxpayers’ money to rescue the ailing companies, whose failure were of their own doings. And the lesson that can be learned on this financial crisis is that banks should be more careful in introducing new products. Complex and risky financial products now proved to be unhealthy investments.
Posted by Jones on December 24th, 2008 :: Filed under
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$$$ CRISIS,
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As Christmas time is in the offing, last-minute holiday shoppers flocked to the stores this week to buy gifts and other discounted items. Shopping malls and retail outlets have been crowded by people who are on the shopping-spree. This last-minute shopping frenzy shows that despite the ongoing fiscal slump, people still want to buy gifts for their loved ones this Christmas. The spirit of gift-giving and the tradition of being with the family for the holiday season is still strong as is evident now.
This activity at the shopping malls may be good to the economy. Consumer spending is really needed to boost the economy, which is now brought to its knee by the financial crisis. Perhaps with the flow of money going out now, the financial sector will be bolstered.
Posted by Jones on December 23rd, 2008 :: Filed under
EVERYDAY MONEY STUFF