Archive for the ‘Finance News’ Category

Falling inflation should not delay interest rate rises

No Comments » | Posted by Jacob ONeill
Oct 16 2014

Interest rate rises should not be delayed by falling inflation because the improving jobs market suggests there is little room for the economy to grow without pushing up prices, according to the Bank of England’s most hawkish rate setter.

Martin Weale, an external member of the Monetary Policy Committee, said that while inflation, which fell to 1.2pc in September, from 1.5pc in August, had been “significantly depressed” by the strength of the pound and falling commodity costs, these were likely to be temporary factors.

He said “all logic” pointed to greater inflationary pressures in the coming months amid faster pay growth, which would push up prices over the next two to three years.

“The margin of spare capacity is shrinking rapidly and all logic suggests that ought to lead to an increase in inflationary pressures over the two to three year horizon which concerns the Committee,” he said in a speech on Wednesday. “An increase in Bank Rate of 0.25 [percentage points] would be unlikely to slow that process to a halt immediately but there is a risk that, if the increase were delayed, inflation would be pushed above target or a rather sharper increase in Bank Rate would be needed subsequently.”

Unemployment fell to 6pc in the three months to August, official data showed on Wednesday, from 6.5pc between March and May.

Read more…

Paying Out of Pocket for Health Care: Medical Credit Cards vs. Credit Cards

No Comments » | Posted by Mark Edwards
Oct 16 2014

As more Americans are paying out of pocket for health care, they are increasingly turning to medical credit cards to fill gaps in their coverage caused by higher deductibles and a growing number of elective surgeries. You are probably one of those many Americans, especially if you are younger and dont have the best health insurance (or maybe none at all).

Maybe youre lacking sufficient emergency savings to pay for a costly medical procedure and if you are underinsured or have a really high deductible, you should be aware of how medical credit cards work. Should you apply for a medical credit card, simply reach for the cards you already have in your wallet, or should you apply for a new credit card all together? Its a sticky situation to be in, and on the surface, it may seem as though medical credit cards would address an urgent medical issue that you would otherwise have trouble paying for upfront.

Medical credit cards should carry clearly marked labels, warning of their serious side effects.

CareCredit, owned by GE Capital Retail Bank, the biggest issuer of medical credit cards, boasts some 4 million subscribers who use the cards to help pay for such procedures as dental implants, orthodontic care, plastic surgery, non-surgical weight loss treatments, Lasik, chiropractic adjustments, sleep apnea treatments and a whole host of other medical services.

Health care providers love these medical credit cards because the cards drive more business their way. The

Read more…

Saturday PS: Don’t mind the gap

No Comments » | Posted by Barry Ernst
Oct 13 2014

THEY say that the most frightening words in the financial and economic phrase book are: “This time, it’s different.” On hearing them, you just know the ancient verities are about to reassert themselves through an enormous crisis of some sort of other.

Five more worrying little words surely ought to be: “We used to worry about…” especially when accompanied by a dry chuckle at the follies of yesteryear. Actually quite similar to “this time it’s different”, “we used to worry about” implies that an economic phenomenon that once generated endless amount of anxiety has been shown to be entirely harmless.

Ne plus ultra in this category is the balance of payments. We used to worry about our ability (or not) to pay our way in the world. Now we don’t. Not because we are running healthy surpluses – the current account was last in balance or surplus when Mrs Thatcher was embarking on her second term of office, there was a national water-workers’ strike and a NATO exercise very nearly started a Third World War (1983, for you young ’uns).

We stopped worrying because…actually, no good reason was ever given for our no longer worrying. There weren’t even very many bad reasons, beyond some vague waffle about trade balances no longer mattering in an era of “global financial flows”. Try that one on your bank manager sometime.

As the August numbers, published yesterday, show, even when the trade gap narrows, this tends to be because imports have fallen. Time was when we would have hoped to

Read more…

Work gets underway to improve Warkworth’s SH1/Hill Street

No Comments » | Posted by Joseph Carr-Boyd
Oct 12 2014

Work is planned to start tomorrow on the first stage of interim improvements to the State Highway 1/Hill Street intersection in Warkworth, north of Auckland.
7 October 2014 | NZ Transport Agency Auckland

Work gets underway to improve Warkworth’s SH1/Hill Street

Work is planned to start tomorrow on the first stage of interim improvements to the State Highway 1/Hill Street intersection in Warkworth, north of Auckland.

The NZ Transport Agency says the Wellsford-based firm, Wharehine Contractors, will start work widening the northbound SH1 approach to the intersection.

The Transport Agency’s Highway Manager, Brett Gliddon, says widening both the northbound and southbound approaches to the intersection on SH1 is expected to be completed before Christmas, and work on a wider shared path for walkers and cyclists will start in the New Year. All work will be completed before next Easter.

“We are committed to delivering the interim improvements this summer to help traffic flow more smoothly and safely through Warkworth, and to the eastern beaches.

“After completing the Hudson Road intersection upgrade ahead of schedule, we are pleased to use Wharehine again to deliver this suite of interim improvements at Hill Street,” Mr Gliddon says.

The project includes several improvements:-

• widening the northbound approach on SH1, and increasing the capacity of the right turn lane into Matakana Road by extending it back to the intersection with Shoesmith Street.

• widening the corresponding southbound approach, which will add some capacity for traffic turning left into Matakana Road.

• the southbound right turn lane from SH1 into Hill Street will be removed. This will impro

Read more…

Do tax cuts promote growth? Part MCXIV

No Comments » | Posted by Kiara Withers
Oct 12 2014

The world’s economists have been arguing over this question for decades. Which is odd, because the evidence is rather clear on this point. Corporate tax cuts, or overall tax cuts (or hikes) just seem to have a neutral effect on economic growth.

Which is quite unsurprising, given that (as we never tire of reminding people) taxes are not a cost to an economy, but a transfer within it. Why should an internal transfer necessarily change overall growth. It might, but there’s no obvious reason at the outset why it should. But whole swathes of the learned economics profession start out with this ‘fact’, and then create studies to prove it. The evidence-tickling out there is a sight to behold.

Let’s start with a little graph we just made, which updates earlier work by others. This takes the prosperous western democracies, above a certain income level (so that we’re not comparing apples with oranges), and compares their per capita GDP growth with their absolute levels of tax in GDP. Here it is.

That trend line is, for all intents and purposes, as flat as a pancake. Ireland is an outlier, as is Luxembourg – but these are small tax havens with their own special dynamics so we should probably have excluded them. Anyway, the flatness of this graph is quite striking: despite truly massive differences in tax revenues per capita from below 30 percent to nearly 55 percent, they’ve nearly all grown at roughly the same speed.

This isn’t definitive proof of anything, but it’s a bulwark against the tax-cutters’ arguments. Read more…

Job Optimism Lingers Amid Lack Of Catalysts

No Comments » | Posted by Kiara Withers
Oct 07 2014

The major U.S. index futures are pointing to a higher opening on Monday, with sentiment suggesting an extension of the positive mood that was evident last Friday in response to the strong September non-farm payrolls report. HP’s division to splinter itself should generate some buoyancy in the computer hardware space. Additionally, a small rebound by commodities could be positive for commodity stocks. That said, it remains to be seen if the momentum could be sustained in the absence of any major market moving catalysts.

U.S. stocks extended their retreat in the week ended October 3rd, as the positive sentiment generated by non-farm payrolls data could only partially offset the negativity triggered by rate fears and geopolitical worries.

Last Monday, the major averages ended modestly lower amid monetary policy normalization fears and geopolitical concerns amid pro-democracy demonstrations in Hong Kong. The averages showed a lack of direction on Tuesday, as traders reacted to commodity weakness and data showing a further slowdown in inflation in the eurozone.

The major averages declined sharply on Wednesday, hurt by news of the first incidence of the ebola virus in the U.S. and the release of strong private payrolls data that stirred monetary policy fears. Stocks went about in a lackluster manner on Thursday amid the release of mixed economic data and ahead of Friday’s non-farm payrolls report. The averages closed the session on a mixed note.

Read more…