Fed’s actions may fuel volatility, uncertainty

There’s a risk in Federal Reserve Chairman Ben Bernanke’s bold moves of late.

If recent history is any guide, the euphoria that met the Fed’s three-quarter-point reduction to a key interest rate Tuesday could be short-lived. With a string of urgent and aggressive actions, the Fed itself could end up feeding the panicky mind-set that it wants to calm.

Even inside the Fed there was disagreement about just how much the key interest rate – its most potent tool in dealing with economic trouble – should be lowered.

Two Fed members dissented, preferring a smaller cut, while Bernanke and seven others prevailed with a more powerful three-quarter-point one. Bernanke, in an emergency session in January, ordered the single-biggest reduction in more than two decades.

Read More

Candidate led high-risk securities firm

Former Gov. Jim Gilmore, who was criticized for his handling of state finances, was chairman of a Bear Stearns subsidiary set up to market some of its highest-risk securities tied to the home mortgage industry meltdown.

One money manager said Gilmore’s involvement in Everquest Financial Ltd. reflected his “naivete” in finance. Gilmore, a Republican, is now running for U.S. Senate.

Two troubled hedge funds managed by Bear Stearns owned a 60 percent share of Everquest when it was created in 2006. Everquest withdrew its bid for an initial public offering last June amid criticism of the hedge funds – which saw the mortgages underlying the bonds in some of their holdings fall sharply in value because of increased mortgage defaults.

The pullout of the IPO was one of the first casualties of the slumping housing market.

Read More

Credit crisis: the cracks are opening in UK’s debt mountain

Since at least the turn of the century, the twin booms in the housing market and the high street have seen Britain’s seemingly unstoppable army of consumers spending with abandon. In a “What the hell?” culture of “Buy today and worry tomorrow” that has gripped the nation, households have run up mountainous debts that now total £1.4 trillion.

But has that “tomorrow”, and a grim day of reckoning, finally arrived?

Millions are already feeling the squeeze from soaring utility bills, higher taxes and only modest growth in take-home pay. Now, the financial screws on Britain’s households are being turned still tighter as the global credit crunch leads banks and other lenders to ratchet up their rates for remortgaging and for new loans.

Although most people will get by, millions will struggle and hundreds of thousands will suffer financial trauma.

Read More

Federal Govt to review Northern Land Council

The Federal Government will review the management and finances of the Northern Land Council (NLC) after deciding recent events warrant investigation.

Last month, the NLC’s top lawyer was sacked and then reinstated over harassment allegations.

The Government says recent events highlight potential issues around financial management, and relationships between the NLC’s senior management and the elected executive.

In a statement, the council blamed a $345,000 budget blow-out on unforeseen legal costs and defended its handling of the harassment claims.

.

Read More

In case of emergencies, break into stash of cash

The strategy To stash some cash for emergencies.

Do I need to do that? Are you kidding? Hasn’t all the mayhem on world debt and sharemarkets this year brought home the fact that spare cash is a good thing to have? Whether you believe the latest rally is the turnaround point or not, the fact remains that the easy money of recent years has dried up and the resulting credit squeeze has put meaning back into the old adage that cash is king.

There’s not a lot the experts agree on but on one point they are unanimous: the uncertain times aren’t disappearing any time soon. We’re still seeing the unwinding of dodgy lending practices, a recession in the US looks increasingly likely and Australia can’t seem to work out whether the porridge is too hot, with inflation the main problem, or about to become too cold as all those interest rate hikes start to bite.

Read More

Lawmakers save one vetoed bill

PIERRE – A bill aimed at giving taxpayers more information about state government budgets and finances fell two votes short Monday of surviving Gov. Mike Rounds’ veto.

The House voted 61-8 to override the governor’s veto. The Senate followed with a 22-12 count, two short of the two-thirds needed to put the bill into the lawbooks.

“I guess there’s some reason the governor doesn’t want more information available,” Sen. Jason Gant, R-Sioux Falls, said after the Legislature finished work on seven vetoes and adjourned for another year.

.

Read More

Use tax time to improve finances

The annual tax-time project of organizing your financial documents isn’t a favorite activity for many folks, but tax season can be the ideal time to improve your finances.

You have until April 15 to make a 2007 contribution to a traditional or Roth IRA, even if you obtain an extension of time to file your tax return. Self-employed individuals who wish to contribute to a Simplified Employee Pension have the ability to postpone making your contribution until you actually file your return.

The 2007 IRA contribution limit is $4,000; if you were age 50 or over by Dec. 31, 2007, you may contribute an additional $1,000. The deductibility of a traditional IRA contribution, and the ability to contribute to a Roth IRA, may be phased out if your income exceeds allowable limits. See IRS Publication 590 (www.irs.gov) for details about the requirements.

Read More

(AFX UK Focus) 2008-03-18 11:49 GMT: UK economic outlook increasingly cloudy – Treasury UPDATE

(Adds further comment on public finances)

LONDON (Thomson Financial) – The UK government is facing intense challenges in forecasting the economy’s prospects, with the credit crunch and uncertainties over data making the outlook very cloudy, Treasury officials said today.

Appearing before the Treasury Select Committee to answer questions on the Budget, Dave Ramsden, managing director of macroeconomic and fiscal policy at the Treasury, said the UK economy will probably slow this year and next by more than was expected in the Pre-Budget report.

However he noted that while the forecasts were based on cautious assumptions about what will drive the economy, the Treasury is facing a range of challenges in drawing up a precise outlook for what will happen.

“We are facing intense challenges — we haven’t even got complete data for 2007,” Ramsden told MPs on the cross-party committee.

Read More

The prospects for medium-size-panels: Q&A with HannStar Display president David Joe

HannStar Display, whose second 3G LCD panel plant has just been taken over by Wintek, has recently been dogged by rumors that it is also seeking to sell off its 5G plant (or 5.3G as the company describes it). But HannStar president David Joe has told Digitimes that he cannot understand the rationale behind the rumors, as the company’s finances are in good health. He detailed the company’s expansion into the medium-size segment and talked about the prospects for building a next-generation plant.

Q: There have been constant rumors about HannStar selling off its existing plant, and ones saying your are planning to build a 8.5G line. What’s the company’s response to these rumors?

A: HannStar’s financial health is sound, and as of the end of February, we had NT$20 billion (US$650.4 million) in cash, and an inventory level of only 21 days.

Read More

House votes to override governor on transparency bill

South Dakota lawmakers have failed to override Governor Rounds’ veto of a bill aimed at giving taxpayers more information about state government finances.

The South Dakota House voted 61-8 in favor of passing the bill over the governor’s objections. But the measure fell two votes short in the Senate. That means the governor has succeeded in blocking the bill.

The bill would have required the state to set up a Web site to provide information on state salaries, contracts and spending in various programs.

The governor says it will cost more than $600,000 to develop the Internet site, and most of the information is already on the Internet. But supporters say they doubt the new Internet site would cost that much money. The say state government should provide a searchable Web site that lets taxpayers find out how state government is spending tax money.

Read More