Mark Carolin

The rose tinted view of financial data continues to drive the markets as more and more reasons are found to speculate on shares even as the driving impetus of the actual economy seems to be stuttering once again.

As far as I can see, much of the data over the past months has been rather less cut and dried in favour of a recovery than the headlines appear to have suggested.

For all of the economists’ readings of the tea-leaves much of their conclusions have been drawn from surveys rather than core data.

Gordon Brown’s duplicitous talk about the UK economy being in a better position than any other to withstand a global downturn has now been shown to be, well, simply untrue.

While the final numbers for the Public Sector debt for 2009/10 may well be less than the finger-in-the-air number of £175bn, the poor attempts by both political parties, so far, to really address the critical issue of too much state expenditure seem like Nero fiddling whilst Rome burns.

The issue may be one of increasing tax revenue but as everyone knows increasing the tax burden is an operation of diminishing returns. Unfortunately, the sacred cows of public sector spending will have to take the strain to an increasing degree.

I am less than convinced about the inflation data that we are now getting. In the past, the crying of the press over the numbers being too low has been unfounded in the face of the overall data.

I am now seeing across the board increases in food, toys, clothing, newspapers and fuel that appear to be at odds with the current near 2% level.

Many of these items rely on imported goods to stock the shelves and, with marginal growth in the rest of the globe coming through to take up excess capacity, foreign exporters seem to be less inclined to ‘cut a deal’ with UK buyers to soak up the sterling weakness.

The weak pound will not be helping with the pressure on retailers. Although, as a side issue, I have been enjoying the odd spread bet on the forex markets, particularly when trading the soft UK currency.

While the press is full of ‘winter of discontent’ warnings for the Government, this pressure is likely to come solely from the public sector side of the equation.

The private sector is well aware that business is not good and the rising tide of the dole queue is not something that they can do a King Canute in front of.

As such, the current administration might be in a good position to appear-to-be-strong. The impact on the economy of state employees removing their services has less of an impact on the actual GDP or Tax revenue.

The Bank of England expects that house prices have seen the worst and that there are enough independent signals to indicate that the economy is in a position to grow into 2010.

The temptation to look into a few months of stable-to-mildly-rising house activity and to extrapolate this into a much sought after upswing seems to have found a home with the central bankers as well.

Unfortunately the news from Continental Europe is not so sanguine. Excluding France and Germany, whole economies seem to be teetering on the brink of disaster.

Much as we like to think of Britain as an island unto itself, the fact is that we are inextricably linked to the fortunes of the rest of the globe and to Europe in particular. Not surprisingly as they are a mere 21 miles away as the crow flies.

The continued massive spending splurge of the Treasury and the BoE seems to be holding the dyke for the time being. However, the fear is that once the boy pulls his finger out of the leak the weight of accumulated debt will drag the UK economy back into the abyss.

On the other side of the Atlantic the news was equally grim with unemployment running at 10% and still increasing.

Having said that, it is not all bad news. It has been a factor of this recession that while the headline numbers and news have been truly dire they do not seem to have turned into the scale of personal disaster that defined previous downturns.

Yes, many people have lost their jobs and a certain number of homes have been repossessed but, overall, consumer spending has remained much more powerful than might have been expected.

It seems to me that, for all the statements that this is the worst economic situation since the war, it does not actually feel like it. Does no one remember the period of mass localised unemployment of the 1980’s?

And there are certain areas that are doing very well. As Simon Denham of Capital Spreads recently said, “On the plus side those nice guys at Goldman Sachs etc seem to be doing very well indeed but there is a grim side to this piece of information as well. The unfortunate fact is that what business that is being transacted is being done, very much, in the bankers favour.

“With the virtual destruction of the investment banks in the States the survivors are able to make far bigger margins on their deals simply because the clients now have few options. They are unable to play Goldman off against Citi or Merrills or Lehman etc.”

I know if I was investing or spread betting on equities where I would put my money.

It is a wide known fact, that market sentiment too plays a pivotal role in determining the economic tide of a country. And with the formation of the stable government, the market sentiment in India is nonetheless turning positive. The ripple effect of the same is likely to be felt on all the financial industry too. As per the financial news online, almost all the financial sectors inclusive of banking and insurance are likely to win great benefits and profits towards the end of the economic year. Leave aside the recession and its hammering impact on the world economy; the Indian economy has seen a slight boost anyways. According to the financial services news, the financial services and the real estate sector have grown by 9.5 percent in the first quarterly half of the year 2009-10. Financial services encompass in them a host of services rendered by the financial market.

More so, the term signifies the organizations dealing with management of money, say for instance, the banks, investment banks, insurance companies, stock brokerages, credit card companies and so on. Generally, the financial services are not only limited to the sphere of deposit-taking, loan and investment services, but also extend their presence in various other fields of insurance, estate, trust and agency services and other forms of financial intermediation. Financial services, thus, have always had a clear background of risks and midst the fluttering market and regulatory pressures, financial service organizations are striving hard to grow enhancing their shareholder values. The seemingly high growth rate seems to be an answer to the rigorous measures taken by the government in order to revive the economy. As the financial services news India stated, the major steps taken by the government included lowering factory levies, slashing interest rates, and doubling the limit on foreign investment in the corporate bonds. No wonder the financial industry in India is growing rapidly and to add more to its splendor, the country also received US$ 45 billion only through foreign remittances from the NRIs in the year 2008. This amount was recorded as the highest ever in the world.

In a move designed to offset its competitors, www.Money-Rates.com recently restructured its corporate Web site to include personal finance information as a supplement to its already extensive selection of bank rate reports. The decision, according to company Web site editor Clark Schultz, was intended to place focus on quality content and minimize the amount of advertising visible to the site’s visitors.

“When people search for answers to their personal finance questions, the Internet is often the first place they go,” Schultz says. “When they get there, the last thing they want is to encounter a complicated mess of advertisements, and that’s the reason we chose to take a content-focused approach rather than an advertisement-intense approach.”

Money-Rates.com, a leading source of bank rate, finance and investment information, has been profiled in such prestigious publications as USA Today, Newsweek, and the Wall Street Journal. Unlike many of their competitors, money-rates.com gives consumers up-to-date rates on bank CDs, money market accounts, checking accounts, and savings accounts instead of gratuitous advertising.

“Do we have advertisers that contribute to our business? Of course. We don’t, however, place advertisements on our Web site in a manner that is distracting. We take pride in giving people exactly what they need — in the area of finance, that means up-to-the-minute bank rate information in a straightforward, easy to understand manner.”

In addition to bank rate information, Money-Rates.com provides visitors with financial news and informational articles. The mix is designed to give individuals an objective look at their personal finance options without the subjective angle that many of the company’s competitors take. This, along with the fact that the company lists all FDIC-insured banks regardless of their attachment to Money-Rates.com, is a key element of consideration that company officials examined while re-designing their Web site.

“It’s so easy for financial institutions to lean toward their advertisers; to give people information that slightly favors certain institutions,” states Schultz. “In an industry such as ours, where even a half-percent on a personal investment can mean thousands of dollars gained or lost, it’s so important for people to have straightforward information.”

Money-Rates.com also provides information on international rates on their Web site, including an easy-to-use currency converter for every major market throughout the world. Credit card reporting, mortgage calculators and saving portfolios are additionally provided by the company.

With the ever increasing cost of living and the period of easy financing by our banks a lot of people have over extended themselves financially. Basically if your monthly income is lower than your expenditure on a regular base you have a problem. (If it only happens occasionally then you should be OK if you of course saved in the better months).

So you find your self in this difficult situation? Is it the end of the world ? Not really but you must take action to reverse the situation. If you ignore it and hope the situation will improve by it selves then we have news for you. It won’t. Rather take action immediately and speak to your bank manager before he want to see you.

So what actions can one take to reverse the situation.

Work out a budget Cut up your credit cards and store cards (except for one you might need it in an emergency) Cut unnecessary expenses (which ties in with your budget) Consolidate your debt Increase your income

How to work out your budget

Add all your monthly income together to see what is available Start adding up all fixed expenses and classify them with 2 classifications. The first classification is the type of expenditure, the second classification is importance or need factor Start adding up all the variable expenses and again classify them in 2 different classifications

Now you will have a clear idea of how much you spend and on what and how much more you spend monthly above your income

Cut up your credit cards and store cards

This should be fairly easy. Take a scissor and start cutting and feel good about your selves.

Why keep one card. Sometimes one has an emergency or a cash flow problem so to have some backup is all ways good.

Cut unnecessary expenses

Now that you know how much you spend monthly and have cut up your credit cards etc. (which should stop you from impulse spending) you can analyse the budget you made.

Now start taking away those expenses which the lowest need factor/importance. (And you still can treat your selves to an evening out, but maybe go to a less expensive place and less often)

Consolidate your debt

Now that your credit cards are gone it is time to start paying them of. But it might be wise to consolidate all debt you have into one account for example your home loan and start paying lower interest rates. credit cards,personal loans etc are notorious for high interest rates. So speak to your bank about how to consolidate. They should be all to happy that you take your financial future in your own hands

Increase your income

This might be the most difficult of them all, because maybe you all ready have 2 incomes or you work double shifts. So this option is depending on one’s personal situation

If one follows up on even some of the suggestions in this article you might be well on your way to turning around your finances without winning the lotto

aid to you, “aren’t you sick and tired of hearing negative news”, I would feed into more of the negative news as there is chance that my question could trigger a negative response. Aside from that, I wonder what it is about some people that seem to enjoy being right about some sort of pending doom and gloom.

I believe that we give the news media a bad rap and the reason I say this is because of Ian’s Brown’s February 26th article in The Globe And Mail – Divas of doom find their fame in pedaling the direst of fortunes to pessimistic masses – Bleak is chic as demand grows for dark oracles of blood-filled streets and ‘zombie banks’.

Ian’s article isn’t talking about the doom and gloom of blood in the streets, civil wars, the collapse of Eastern Europe, and toppled governments coming from the news media. The bulk of the bad news in the article is coming out of the mouths of university professors.

I mentioned Ian’s article to Robert Gignac, author of ‘Wealth Is A State Of Mind’, at dinner on Tuesday, March 3rd and Robert’s response was that these purveyors of Financial Armageddon have been around for years and publish the same book every five to seven years with a different cover … sooner or later they will be right. It’s like the 36,000 DOW, sooner or later, it is going to happen as I recall someone saying in the early eighties that the DOW will never go past 3,000 points. Let’s all hope that prediction does not come true today.

My interest in Ian’s article is not about the doomsters and their predictions; it is about why they do it aside from the $50,000 speaking fees. There has got to be more to it than “bad news sells”.

On one hand we have the oracles of bad news and in the other we have the unconscious masses.

Ian writes that we seem to enjoy hiding under the blankets, being told how bad the future looks and that it shocks us into feeling like grownups and getting real and at the very least we should stop and take a closer look at what we are afraid of. (for a day in my life of taking a closer look at what brings up the fear in me, see the following article – Do Something That Scares You! )

It is like we have to become five years old again and get slapped and then be put in a corner to take a ‘time out’ and beg for forgiveness.

“There is a peculiar human need to contemplate disaster,” Vivian Rakoff, professor emeritus in the department of psychology at the University of Toronto says. Because there is the sense that if it gets bad enough, we can start over again”.

BTW – Rakoff is not a doom and gloomer.

There seems to be a thread in writing about and reading about doom and gloom.

As I get into this I want to preface that I am only wondering about all of this and wish to shed some insight and it is not my intention to attack. I say this because I believe that I will make real whatever I attack.

The creator of the doom and gloom could be attacking the system whether the system is right or wrong because they lack fulfillment in some way shape or form and still have something to prove. They could have an unconscious negative belief of “if I can’t or didn’t make the system work for me then I will attack the system in an attempt to destroy it and try to make everyone else as miserable as I am”. A person will get their need to prove met in a functional or a dysfunctional way, this law is non-negotiable.

The reader of the doom and gloom could be stuck in some kind of pattern that goes back to when they were five years old and sent for a time out awaiting forgiveness from the matriarch or patriarch that sent them there. Their past time out is now replaced with taking a bad news break expecting that good news will show up and that they will be forgiven for their sins.

This same pattern reminds me of what is happening with some corporations who were asleep at the wheel for the best part of the decade having to go back to the government for forgiveness in the form of a bailout.

So here we are in the process of having a financial time out waiting for the matriarch and the patriarch of the money to forgive us for our senseless ways so that we can start anew.

I believe we are in one of the most significant times in history where governments on a global scale are reinvesting in infrastructure to jump start the economy without having to experience a world war … this experience that we are having will pass.

Either you are simply starting in Forex or have a expertise in it, but it’s very important you stay on top with all the Forex news happening in the industry. Staying intact with what happens around the world within your industry can be really addictive at times. Moreover with a globalized world it seems that something happens somewhere every moment of the time.

Financial News

Here we are listing some of latest news that has happened in and around the forex industry and will impact your business as well in some ways. Remember that Foreign exchange currencies are always paired so you will need to receive relevant news about the comparison of two different currencies or commodities. Some examples of relevant news that would have an impact on various currencies around the globe would be;

-A recent story reported that retail traders had just tipped to a net short positioning on the same day that the British pound gained a 200 point plus rally.

-Forex traders watch the U.S. housing slump very carefully, gauging the market for mortgage futures.

-When the U.S. Fed made its recent rate cut, one Forex news service reported that expectations for the U.S. Dollar were “falling like a rock.”

-Recession fears in the United States may drive the dollar even lower than it already is. (In Forex trading, the fact that the dollar drops is not considered negative, as long as the trader leverages the drop when trading for higher priced, more valuable currencies around the glove.

Political News

Most people are under the wrong impression that currency and finance news are the only things that interests any forex trade, yet political news is very important as well as they can give you hint of the political movement of different nations and their where their country is headed. You need to make sure that you follow the trend that goes throughout the world.

Currency and financial news are not the only news stories of interest to Forex investors and traders. Forex traders are also interested in political news that can have an impact on a country’s currency.

-Tragic events like the assassination of a political leader can affect currency futures in the country where the event occurs and can have a ripple effect in surrounding areas; for example, the assassination of Benazir Bhutto in Pakistan.

-Natural disasters like an earthquake, hurricane, or typhoon can consume a great deal of a country’s resources; therefore, Forex traders watch news of such disasters.

-Political events, like the U.S. presidential election cycle, has significant effects on currency valuation; therefore, Forex news contains updates on presidential candidates, primary elections, and general elections.

News Analysis

Forex news services add value to the news stories they provide by analyzing current events and predicting how they will affect the exchange rates of various currencies around the globe.

Some popular sources for Forex research and analysis are: Daily FX, Rabobank Technical FX Daily, Scotia FX, TRL, Mizuho Corporate Bank, CIBC World Markets, BHF Bank, and Mellon Foreign Exchange.

Some of these news releases include last December’s “Ohio Credit Unions Launch Effort to Improve Financial Literacy.” This particular but of financial news has to do with the growing need to raise awareness for the next generation’s knowledge on financial responsibility.

Of course, being a credit union release, it was naturally motivated by the need for credit, but it still had some good points and ideas for how Ohio Credit Unions were going to approach the future with implanting financial knowledge into children.

Based on a survey of Ohio adults, primarily parents, less than a quarter of Ohio residents make any effort to teach their families about the importance’s of knowing how to manage money, and less than five percent state that they were taught anything about money when they were younger. This is what has mainly struck a nerve with these credit unions, causing them to worry about the future state of well being for their state’s youth. The Credit Unions noted a direct correlation between the financial illiteracy of individuals as well as the highly rising upheaval of bankruptcy declarations, home foreclosures, and record debt. This alone states that not only are individuals of Ohio not able to teach their children about how to manage money, they are not able to manage money themselves

.

It has been made known that the Credit Union League has begun this action to make financial awareness more of a priority for the posterity of the state. It was stated that the teaching of financial responsibility is and always has been a top priority for the Credit Union League because it is their knowledge that the financial future of the state is in jeopardy. The Credit Union League of Ohio has set up a program that will help teach children the importance of learning financial strategy at a young age.

These tactics that are being put into place include promoting a certain website that is aimed to provide all the necessary resources for financial mentoring; targeting the most impressionable ages, grade 4, grade 5, grade 11, and grade 12; glorify credit concepts to help manage borrowing; and simply teach students the dangers of over borrowing and under paying.

Ultimately, the Credit Union League has put these actions into place in the hopes to better teach the future generations how important it is to start saving, and the importance of learning good money management habits. Their programs have been put in place due to the rising level of poverty in the area.