Thin trade capped Gold Prices inside a tight $5 range early Monday, but the financial markets’ summer vacation failed to prevent world equities slipping again while crude oil bounced after losing 17% so far this month. The US Dollar fell to a three-session low vs. the Euro, but it rose against the Japanese Yen to break ¥108 for the first time this month. Government bond yields fell as investors sought the safety of fixed income. Two-year US municipal bond yields fell two basis points to 2.37% just ahead of the Wall Street opening – barely half the current rate of consumer-price inflation and down 0.4% from one month ago. “There’s a little bit of physical [gold] buying around,” said Dick Poon at Heraeus in Hong Kong to Reuters today. “People are delaying their purchases hoping for a fall of a few dollars,” agreed a gold dealer at a private bank in India.
Archive for August, 2008
For most wealthy individuals, their financial requirements stretch well beyond an investment planning service. Most wealth managers now offer their clients a range of services, aiming to realistically fulfil all of a client’s needs, including their .
State adds jobs even in slump
The city of Atlanta laid off workers this year when it ran into financial troubles. State agencies shed jobs in 2003 when Perdue faced a funding shortfall during his first year in office.
The recent buildup in state jobs began after the fiscal year that ended June 30, 2005.
The number of jobs in the agencies under the governor’s office grew 16 percent. That doesn’t include the more than 100 positions added for the state accounting office, an agency Perdue started a few years ago. The governor’s office includes everything from his administrative staff, the inspector general’s office and the Office of Planning and Budget to the teacher standards commission and the state arts council.
More people to serve
Some of the biggest growth has come in the University System of Georgia.
Savings Strategies
(Mr. Speier is consulting with his financial planner to figure out which option is best, but he’s leaning toward the latter.)
On top of the pension, Mr. Speier has $160,000 in mutual funds held in a 403(b) plan, the equivalent of a 401(k) offered to employees of nonprofits. He’s been funding the 403(b) with 6% of his salary, matched at 25% by his employer, since the clinic started offering the plan in the early 1980s. Ms. Speier doesn’t have a pension, but she has been socking between 6% and 10% of her salary into a 401(k) for many years. The account now has over $200,000 in it. The couple also has money in other mutual funds and a regular savings account, bringing their total retirement savings to about $500,000. They don’t carry credit-card debt and they own their home outright.
“A half a million doesn’t feel like much these days, but we will also have my pension and Social Security, and we don’t have a mortgage, so I guess we’re doing pretty well,” says Mr.
Better to prepare for a worsening crisis, hoping it doesn’t occur, than to expect business as usual.
As investors, the question we have to focus most of our attention on just now is what impact the credit crisis, the bursting housing bubble, and the actions of the U.S. government will have on the economy and investment markets in the next six months.
We have seen the Fed and the federal government move to panic mode as they try to keep the system afloat. As expected, they have cut rates, as well as given away checks and rearranged the Federal Reserve’s entire balance sheet.
The underlying problems have not been fixed with this massive bailout. There are still many credit pot holes out there and new lending remains highly constrained. Even the government tax rebate checks, rather than boosting the domestic economy, were largely absorbed by higher oil prices.
At the conclusion of its review of global universal and investment banks, in the beginning of June, the S & P lowered its ratings on Lehman Brothers, Merrill Lynch & Co. and Morgan Stanley. The outlook for all these entities slipped to “negative”. S&P also stated that it affirmed its counterparty credit ratings on the Goldman Sachs Group and its outlook is negative. Among major players in the securities industry, Goldman Sachs has one of the heaviest concentrations in trading and investment banking.
S&P also revised its outlooks on Bank of America Corp. and JPMorgan Chase & Co. to negative. In addition, S&P affirmed its ratings on Citigroup, removed the ratings from CreditWatch negative, and assigned a negative outlook. “We also placed the ratings on Wachovia Corp. on CreditWatch negative.
The Gulf states, already stupendously wealthy, have become even richer and their financial muscle has begun to show itself in high-profile investments around the world. But there have been windfalls for lesser-known oil producers, as well as exporters of other resources, such as metal ores.
Analysis by the International Monetary Fund showed that Equatorial Guinea, for example, will receive a boost to its trade balance worth as much as half of annual GDP this year, because of higher prices. Other beneficiaries among low-income African states include Chad, Gabon, Angola and Cameroon.
Some countries are feeling a bit of both – suffering from the credit squeeze, but benefiting from bumper exports. Kazakhstan’s heavily indebted banks had been expected to drive the economy into recession in 2008 by cutting off the supply of credit to households, but rocketing oil prices have come to the rescue.
When my wife and I approached our financial meltdown, our financial planning and spending was in pure chaos. We both spent according to our whims and we tackled bills and such without any real pattern or consistency. Neither of us had any real idea what the other was doing financially, and we certainly didn’t have any big dreams that we shared beyond the nebulous “let’s build a house in the country” idea that we’d floated in a very vague sense for a long time but never bothered to make any more concrete.
Since then (about two years), we went from living in a crackerbox apartment to owning our own home. We’ve eliminated somewhere around $30,000 in debt (and rising fast). Even more importantly, we worked together to find options that made us both happier in terms of our careers and home lives and we settled in on some big goals.
Tomy Co. plans to take its video game software business to the next level by developing titles outside Japan for the first time, aiming to raise overseas game sales from several hundred million yen to 6 billion yen (US$56.3 million) by fiscal 2010. The company will set up a game studio at its U.S. arm’s headquarters in California within the year, supporting it with 300-400 million yen (US$3-4 million) annually. It plans to roll out seven titles in the U.S. this fiscal year and 12 a year starting in fiscal 2009. Similar to Tomy’s existing offerings in Japan and the U.S., the games will be designed for play on consoles made by Nintendo, Sony and others. Unlike many of Tomy’s earlier games, the new ones will feature its own copyrighted characters, eliminating licensing fees. The company plans to cut its ties with distributors and shift to direct sales next spring.Sony Corp.
“The state’s financial crisis made it necessary to propose significant and painful cuts to a variety of programs, including state aid to hospitals and nursing homes. The cuts, however, were crafted in such a way as to protect the most vulnerable,” Health and Senior Services Commissioner Heather Howard said.
“As the recession worsens, however, we may need help from the federal government to forestall worse cuts,” she told the health subcommittee of the House Energy and Commerce Committee.
The subcommittee chairman, Rep. Frank Pallone, D-Long Branch, is sponsoring a bill to increase the federal Medicaid match by about 3 percent. That would mean an extra $280 million for New Jersey.
New Jersey and Washington split costs 50-50 for Medicaid, which provides doctor and hospital care for the poor and funds nursing homes for the impoverished elderly.
