Archive for September 2010

China Issues US Yuan Bill Warning

September 30, 2010

Things are heating up in the under-hand currency war that is going on between a handful of countries at present.

With certain countries including China, Japan and Sweden intervening in their own currency by buying it back, the response from opponents is getting louder and less tolerant. The US, in particular, has spoken out about such interfering and branded it unacceptable.

China (and the other intervening countries) are being accused of buying and selling their own currency in order to keep it artificially low to help its exporters.

Such a move was always going to cause friction between nations and it seems this has happened with China responding icily. China has now warned that a US bill aimed at penalising it for its currency manipulation will most definitely “harm relations” between the two economic heavyweights. This is an unsettling prospect to say the least.

The bill, which treats undervalued currencies as illegal export subsidies has angered China whose foreign ministry spokesperson has commented that China is ‘resolutely opposed’ to it.

“Using the [yuan] exchange rate issue as an excuse to engage in trade protectionism against China can only harm China-US trade and economic relations, and will have a negative effect on both countries’ economies and the world economy,” warned spokeswoman Jiang Yu, speaking at a regular press briefing.

Saving Is The Illogical Option According To BoE

September 29, 2010

Charlie Bean, who effectively sits on the committee that determines the Bank of England’s rates is urging us as a nation, to get out and spend more. I know what you’re thinking…easy for him to say!

Here we are, desperately trying to be good and not fritter money down the drain and somebody tells us to give up saving and inject our hard earned money into the economy.

Mr Bean’s point is this, at the present, bank interest rates are so low (a measly 0.5%) that where as in the past our pounds would have multiplied into a larger pile, now they do little more than collect dust in a savings account. It is better, he argues, to use your money in a more enlightened way.

What he is referring to in particular is spending within both households and businesses. He comments that whereas in the past savers had benefitted from high rates, that now they should eat into their capital and generally ‘get spending.’

Fears Over Debt Management Firms

September 28, 2010

There are fears for more than 100 debt management firms after the trading watchdog found multiple errors made by the firms. The 129 firms in question will now face losing their licenses.

The Office of Fair Trading has uncovered a variety of dishonest and malpractice that has taken place over a long period of time. It was found that rather than give impartial and honest debt-related advice to both individuals and families, the companies were exploiting customers in order to maximise their profits.

The firms crimes are made worse by the fact that those who come to them for debt advice are usually vulnerable and in a dire financial position.

The Office of Fair Trading has also found that many companies falsely or misleadingly advertise so that customers step into a contract under disillusion. Often this involves advertising a free service when there is a fee. Firms are guilty of indulging in a certain amount of deceit, be it cleverly disguised or blatant.

In the worst cases, groups were using misleading trading names to make it appear that they are charities or government bodies, both of which give out impartial advice for free.

The firms have been told either shape up immediately or lose your license.

By the end of this year, consumers are expected to have paid a whopping £250 million in fees to debt management companies.

All this can leave you feeling vulnerable when it comes to seeking debt advice but you are not alone. If you go through an established price comparison website, the companies you are viewing have all been researched and certified prior to you visiting their sites. This is your best bet in finding a trust worthy debt management company.

UK Housing Market Wanes

September 27, 2010

According to the property information company, Hometrack, the cost of a home has dropped by 0.4% in the month of September alone. This means that the cost of a home has dropped for the third month in a row.

The demand for property is declining and this is thought to be because of the soon-to-be-announced spending cuts. The decline in Britons who want to jump on the property ladder has meant that house prices have fallen in every region of England and Wales for the first time since the spring of 2009.

Richard Donnell, Hometrack’s director of research comments that the grey economic outlook is taking its toll on buyers sentiment. He says:

“Growing concerns over the economic outlook and public spending cuts are weighing heavily on would-be purchasers.”

“The market is now entering the second phase of the re-pricing process as a response to falls in both sales volumes and demand. Over the rest of the year and into early 2011, agents will start to focus on re-pricing the property on their books to a level where transactions volumes are maintained.”

In addition to the price decline, the survey reveals that the number of homes coming onto the market has risen by 7.2% whilst the number of prospective buyers registering with agents fell by 6.5%.

The survey also reveals that such a decline is echoed in lenders and mortgage approvals, in what is thought to be a ‘second phase’ of repricing.

Keep Your Salaries Under Sealed Lips

September 20, 2010

Keep Your Salaries Under Sealed Lips

I like to think that we humans are inherently nosey. There is nothing more satisfying than hearing a juicy bit of gossip about a fellow colleague…especially when it relates to their pay packet.

However, according to a survey published in the Economic Journal, discovering too much about a fellow colleague’s salary could result in depression, despair and dissatisfaction with life in general. Perhaps best not to ask then.

Researchers found that workers who compare their salaries tend to be less happy than those who are too shy to ask. What one discovers is a great amount of inequality and so a small bout of curiosity could be potentially very harmful to your long term happiness.

The phrase ‘ignorance is bliss’ springs to mind.

How To Limit Unemployment Damage

September 16, 2010

If you’re out of work or are concerned you may soon lose your job, there are steps you can take to protect yourself.

  • Pay off debts. If you’ve any spare savings, use them to clear outstanding credit cards or loans. Having debts hanging over you during redundancy is a nightmare. The cost of most debts vastly exceeds the interest earned on savings…

 

  • …but keep access to emergency funds. If you pay off debts, and it takes longer than planned to find a new job, you may need some money.

 

  • Do a debt audit. If your debts are costing a fortune, consider switching to cheaper forms of credit. You may struggle if you’re already out of work as that will harm your credit score. See the Best Balance Transfers, Best Bank Account, Cheap Loans and Mortgage Finding guides.

 

  • Check out mortgage rescue schemes. If you have a mortgage, work out what level of protection you have if you were to lose your job. Both private, work based and government schemes may help. See the Mortgage Arrears guide.

 

  • Up your income. There are a host of ways to generate short-term cash, from mystery shopping to flogging your CD collection. See the Boost Your Income guide for ideas. Also reclaim unfair charges such as mis-sold PPI. Free template letters are available in the PPI reclaiming and Bank Charges Hardship guides.

 

  • Do a budget & money makeover. Run through your finances to see what bills you can cut (see the Money Makeover guide) and do a full budget to ensure you’re living within your means (see the Free Budget Planner). The Stop Spending guide will also show you ways to cut back.

 

  • Beware payment protection insurance. While this type of cover can ensure you keep up loan, mortgage or credit card payments if you lose your job, it won’t cover unemployment if you know there is a good chance you will lose your job

There is no need to sink into a data-induced depression

September 15, 2010

With the daily influx of ominous looking economic news, it would be rather easy for one to lapse into a bout of investment orientated depression.

However, fear not! According to Don Stammer of INGIM’s Multi Strategy Group, with the luxury of hindsight, we will be able to look back on the present and see that it was neither drastically catastrophic nor overly opportunistic. What is called for then in such turbulent times as these is a sense of proportion and a pinch of patience.

There is no real way to tell what the economic situation will develop into over the next annum. Perhaps it will retreat into a negative or near zero growth rate, perhaps all the fear over a double dip recession could turn out to be an overgrown exaggeration and perhaps the economy will run on, steadily mimicking the flat trend of today.

The emphasis of today’s advice by Don Stammer is to try and behave with detachment and to control ones reactions so as not to ruin investment opportunity.