U.K. Banks Win Supreme Court Ruling on Overdraft Fees


HSBC Holdings Plc, Royal Bank of Scotland Group Plc and six other U.K. lenders won a court bid to
halt an antitrust regulator’s challenge to fees that lenders charge customers who exceed overdraft limits.

The Supreme Court, the highest court in Britain, reversed two earlier rulings that said overdraft fees are subject to laws regulating unfair terms in consumer contracts. The ruling may block the Office of Fair Trading from challenging whether the specific terms used by the bank are unlawful.

UCB Seeks 2 Billion-Euro Loan to Refinance Schwarz Pharma Debt


UCB SA, Belgium’s biggest drugmaker by sales, plans to get 2 billion euros ($3 billion) of loans to
refinance debt used to buy Germany’s Schwarz Pharma AG.

It’s arranging a 500 million-euro 364-day term loan and 1.5 billion euros of three-year revolving credit with a one-year extension option, the Brussels-based company said in an e-mailed statement. BNP Paribas Fortis, Commerzbank AG, and Mizuho Financial Group Inc. are arranging the deal.

German Bonds Little Changed as ECB Discusses Rates for Loans

German government bonds were little changed amid speculation the European Central Bank may increase the interest banks pay for some loans, even as data showed the economy is still suffering the after-effects of the recession.

The yield on the 10-year bund traded within one basis point of its lowest level since Nov. 3 after German consumer confidence unexpectedly declined for a second month and Italian retail sales dropped. People familiar with the ECB discussions said officials are debating whether to put an adjustable interest rate on December’s 12-month loans. Germany and Italy sold 6.6 billion euros ($9.9 billion) of securities today.

Retirement Planning Basics: The Key is to Start Early


Even if retirement is in the future, you should start planning as early as possible. In fact living well in retirement depends a lot on how you will plan it early on. Of course you can always rely on you Social Security or company retirement plan, but let's face it this will not be enough to have enough after you retire.

The first thing to check when planning your retirement is how much you will need after you retire. The income you will need depends not only on your basic expenses such as food, clothing, utilities, etc but on your health or any loans that you will have. If you are still repaying your mortgage the number should be bigger. If your health is not that perfect and you need to receive medical treatment often, than you should think about this as well. Generally speaking 70% of your current yearly income should be enough to live well after you quit working.

When you set this number you should start thinking of ways to achieve it. There are three main sources of retirement income pensions, social security and your savings. The easiest two are your pension and the social security incomes that you will receive as you can check well in advance how much these will be. You can ask for a statement or use online calculator. It may happen that these incomes will be enough and you do not need to worry much. However it is wiser to think about your saving as well. Consult a specialist and invest your money. You can invest in stocks, mutual funds, bonds, etc. Even if you are not able to invest a lot, do it as you will receive regular incomes after you retire. A common mistake that many people make is that they just try to save a lot of money. Not only that you will never be able to save that much (except you win the lottery of course) but pilled money will be spent quickly.

Finally, think of a home business or any other business that you can run after retirement. The fact that you are no longer working in an office doesn't mean you are useless and incapable to do anything. In fact it's the best time to try something new. You can turn your hobby into a small business or start something fresh. Not only you will be occupied during most of your time but you will have another source of income that will allow you better life standard.

California Debt Unnerves Investors as Taxes Plunge $2 Billion

A $2.1 billion drop in California tax collection is opening a hole in Governor Arnold Schwarzenegger’s budget only three months after lawmakers in the most-populous state slashed spending for the second time in a year.

General fund revenue in the state accounting for 13 percent of the U.S. gross domestic product dropped to $19.4 billion during the fiscal year’s first three months, according to figures Democratic Controller John Chiang released Oct. 9. The total for the period ended Sept. 30 trailed by $1.1 billion, or 5.3 percent, forecasts in the annual budget the Republican governor signed July 28.

This reinforces that state’s budget problems aren’t over, and as the year goes on, we’re likely to see growing budget deficit projections,” said David Blair, an analyst with Pacific Investment Management Co. in Newport Beach, California, which invests $20 billion in municipal bonds. “This clearly is going to continue to put pressure on the Legislature and the governor.



The latest report underscores how states including California, the largest municipal bond issuer in the U.S., are still dealing with fallout from the recession even as the economy begins its recovery. The state last week was forced to raise yields to attract buyers to a $4.1 billion debt sale, after cutting the issue from $4.5 billion.

California’s decision helped push up borrowing costs in the municipal market by the most in almost four months even as states prepare new issues of taxable Build America Bonds, whose sales already total $40.2 billion. The Treasury pays 35 percent of interest costs for the debt, part of the federal economic stimulus plan approved in February.

 Losing Jobs

State governments are particularly hard hit by a continuing loss of jobs, which dampens the income- and sales-tax collections upon which they depend. From April through June, states and localities recorded a 12 percent tax revenue decline from a year earlier, the third consecutive quarterly drop, according to the U.S. Census. The national unemployment rate in September was 9.8 percent, the highest since 1983, according to the U.S. Labor Department.

In New York, Governor David Paterson on Oct. 6 ordered state agencies to cut spending amid predictions that the deficit for the year ending March 31 may grow to $3 billion, $900 million more than budget Officials estimated in July.

Pennsylvania, acting 101 days into the fiscal year, enacted a $27.8 billion budget on Oct. 9 that raises cigarette taxes and expands gambling to boost revenue. Ohio confronts an $844 billion gap, while Connecticut will borrow $2.25 billion over the next two years, beginning with a $1 billion debt sale in November, to balance its budget.


 ‘Somewhat Unique’

California’s problems, while somewhat unique and self- inflicted, are really America’s problems,” said Bill Gross, ‘s co-chief investment officer of the world’s biggest bond fund wrote on Oct. 1. State and federal lawmakers, unable to comprehend the extent of consumer borrowing, “reflect a lack of vision to perceive that the strong growth in revenues was driven by the same excess leverage and the same delusionary asset appreciation that was bound to approach cliff’s edge.

The state has been among the hardest hit and its Legislature, requiring a two-thirds vote to raise taxes or pass a budget, has struggled to respond swiftly as the state’s fiscal strains worsened this year. Since February, Schwarzenegger and lawmakers have slashed $32 billion from spending, cutting into funding for schools, universities and welfare programs. They also raised taxes by $12.5 billion to balance the $85 billion budget.

Court Decision

Chiang, the controller, said the state’s latest figures show that Schwarzenegger and the Legislature must prepare for “more difficult decisions ahead.” California was as also handed a defeat on Oct. 2 by the state’s Supreme Court, which let stand a ruling that the governor and lawmakers illegally used $3.6 billion of money meant for local transportation agencies to balance the budget since 2007.

Revenues more than $1 billion under estimates and recent adverse court rulings are dealing a major blow to a budget that is barely 10-weeks old,” Chiang said in a statement Oct. 9.While there are encouraging signs that California’s economy is preparing for a comeback, the recession continues to drag state revenues down.

California isn’t at immediate risk for running out of cash as it did in July, when it resorted to issuing IOUs to pay some vendors and tax refunds as lawmakers fought over how to shore up finances. Last month, it borrowed $8.8 billion by selling notes, an advance on the tax it will collect later in the budget year.

Plugging Gaps

Schwarzenegger’s administration said it’s too soon to tell whether the slide in tax receipts through September foretells a worsening trend. Should revenue continue slipping, California lawmakers may find it difficult to make up for the gaps, given how deeply they have already cut and resistance among Republicans to further tax increases.

Schwarzenegger, 62, who can’t seek re-election because of term limits, doesn’t have to present his budget for the next 12- month fiscal period until January, and he has given no indication that he is planning to call an emergency session beforehand, as he did last year.

Clearly, the numbers are cause for concern but the issue now for us is to determine if this is a one-time event or whether it has one more long-term implications,” said H.D. Palmer, a spokesman for chwarzenegger’s finance department.

The tax collection figures were released after the conclusion of a $4.1 billion bond sale, which was trimmed by about $400 million after investors demanded higher yields than the state was willing to pay on some of the securities. The sale came after a rally in demand for municipal bonds pushed state- and local-government borrowing costs to a 42-year low.

Watching for Deterioration

David Blair, the Pimco analyst, said the pullback was caused by the low yields California offered amid lingering investor concern that the state’s fiscal condition may deteriorate further.

They just got a little aggressive in where they wanted to price it, Blair said. Most people still recognize that there’s budget deficits the state is trying to deal with this year and going forward.

The difference between a 10-year California bond and a top- rated municipal security reached as much as 1.71 percentage points on July 1, when the California debt yielded 5.21 percent, according to Bloomberg data. The difference slipped to 1.06 percent on Sept. 11 before ending at 1.21 percent on Oct. 9.

Future Debt Sales
California plans to sell as much as $15 billion more in bonds this year and its deficits, while not projected to reach the $60 billion it dealt with in the two years that end in July, are persistent. The state will face a $7.4 billion gap in the fiscal year beginning on June 30 and about $15 billion in each of the following two fiscal periods, California Treasurer Bill Lockyer said in his annual report on the state’s debt, released ahead of the bond sale.

Tom Dresslar, a spokesman for the treasurer, said his office has alerted investors that the fiscal troubles are far from over and the latest tax data did little to alter the outlook.

The state has been very clear that our budget problems aren’t behind us,” Dresslar said. “This shouldn’t be a big surprise to anybody.”







(Source: Bloomberg News)

Ten Stock Market Myths That Bedevil Investors


In the dinosaur saga “Jurassic Park,” author Michael Crichton wrote about a man who believed
a tyrannosaurus couldn’t see him if he held still. The carnivore ate him.Later in the book,
someone asks what killed the man. Another character answers, “He was misinformed.”Misinformation
can be costly. Here are 10 notions that lead investors astray.

Myth No. 1: The best companies make the best stocks.
Stocks advance when a company exceeds prevailing expectations.The bestcompanies usually generate
lofty hopes among investors, which are hard to exceed.

I began writing about stocks in 1972, when the “Nifty Fifty” stocks were all the rage. Companies such as
International Business Machines Corp., McDonald’s Corp. and Xerox Corp. were so universally beloved that investors happily
paid 60 times earnings to own them.

These were indeed good companies: Their earnings continued to climb strongly for a decade or more. Yet they were bad
stocks, because people overpaid for their anticipated success.Today’s equivalent in my opinion is Apple Inc. The
Cupertino, California, maker of iMacs, iPhones and iPods is highly profitable, debt-free, and held in universal awe. That’s
why shares sell for 32 times earnings, more than six times book value and almost five times revenue.
     Apple is a great company. But I predict that over the next two years it will be only an average stock.


                          Trading Costs

Myth No. 2: In today’s volatile markets, one must be an active trader.

Before you are tempted to believe this, consider commissions and taxes. The commissions are not too bad these days, now that discount brokerage is routine.
     Taxes are nasty, though. Long-term capital gains are taxed at 15 percent, short-term gains at up to 33 percent. You have to be pretty arrogant to disregard that cost.



Myth No. 3: Analysts are a good guide to picking stocks.

Analysts are intelligent, know a company’s managers better than you ever will, work long hours, and have a staff of young,hard-charging assistants.
None of that necessarily makes them standouts at picking stocks. In my ongoing study, now at 10 years and counting, analysts’ most-favored stocks underperform the Standard & Poor’s
500 Index. I think analysts tend to fall for Myth No. 1.

                        Don’t Fear October

Myth No. 4: Beware of October, the killer month for stocks.

The worst month for the markets is September, not October. According to Ned Davis Research, the average monthly price change for the Dow Jones Industrial Average in September since
1900 has been a loss of 1.1 percent.

February and May also show small losses, on average. October, with an average gain of 0.1 percent, is the fourth worst month. Admittedly, October has seen more than its share of
stock market crashes, but there have also been plenty of robust Octobers.The best months, incidentally, are December (average gain 1.5 percent), July (1.3 percent) and April (1.2 percent).

                    Presidential Preferences

Myth No. 5: You can count on the U.S. presidential cycle to predict the market.


Sorry, Charlie, but the stock market has precious few things one can count on. In general, the first year of a president’s term is the weakest for stocks, and the third year
is strongest. The second and fourth years tend to be average.

The key phrase is “tend to.” According to presidential cycle lore, 2008 should have been a normal year, yet the S&P 500 fell 37 percent (including dividends). This year should be sub-
par, yet the S&P 500 has risen 13.5 percent.


Myth No. 6: Price-to-earnings ratios are the perfect measure of a stock’s value.
   
I probably love P/E ratios as much as anyone. Yet they are neither a perfect measure nor a magic shortcut to stock picking.For example, Ford Motor Co. earned $1.20 a share in 2005.
At the end of that year the stock was selling for about $8 a share, so the P/E ratio was attractive at about six. A winsome P/E, however, didn’t stop Ford from losing money
in each of the next three years. And it didn’t stop the stock from falling to $2.29 at the end of 2008.
     No single measure tells you everything you need to know.

                        Malkiel’s Advice

Myth No. 7: Stocks should be bought when they have momentum.

Many respected market participants hold this belief. Perhaps foremost is William O’Neil, publisher of Investors Business Daily.I tend to side with Burton Malkiel, a Princeton economics
professor who argues that the benefits of using relative strength are canceled out by the increased trading costs involved in using this strategy. Momentum investing works some
of the time, but in my judgment it doesn’t work consistently. In addition, it is a tax-inefficient strategy because it often generates short-term gains.

Myth No. 8: War is good for the stock market.

Because spending on World War II helped pull the U.S. out of the Great Depression, many people think rising military spending correlates with a rising market. It’s often untrue. The
market made little headway in the 1970s, when the Vietnam War raged. It boomed during the 1980s, a time of relative peace.

                          Party Favors

Myth No. 9: The market prefers Republicans.

According to Ned Davis Research, the annual gain in the Dow average was 7.2 percent under Democratic presidents from March 4, 1901, through July 8, 2008.
It was only 3.6 percent under Republicans during the same period.
The best stock-market performance on record so far was logged under Bill Clinton, a Democrat.

Myth No. 10: Market timing can greatly enhance your returns.

It could, if one could do it accurately. However, successful market timers are rarer than scrawny sumo wrestlers. Most people who try to time the market end up being on the
sidelines during the unexpected sudden upturns that account for a significant part of the market’s long-term gains -- this spring’s rally, for example.

U.S. Economy: Home Prices Increase by Most Since 2005

Home values in 20 U.S. cities climbed in July by the most in almost four years, helping stem the record plunge in household wealth that’s depressed spending.

The S&P/Case-Shiller home-price index rose 1.2 percent in July from the prior month, the biggest gain since October 2005, the group said today in New York. Another report showed consumer confidence unexpectedly fell in September, while holding above the record low reached earlier this year.

Home values are rebounding as low borrowing costs and government tax credits lift home sales. Combined with rising stock prices, the gains will begin to restore the $13 trillion plunge in net worth caused by the worst financial crisis since the Great Depression, a process that economists such as Brian Bethune say will take years to complete.

Home prices are “a major, major turning point for the economy,” said Bethune, chief financial economist at HIS Global Insight in Lexington, Massachusetts. “We are eating away at the problem of household balance sheets.”

The New York-based Conference Board’s consumer confidence index fell to 53.1 in September from 54.5 the prior month, the private research group said today, amid growing concern over the lack of jobs. The gauge sank to 25.3 in February, the lowest level in data going back to 1967.

The Standard & Poor’s 500 Index dropped after the confidence report, erasing earlier gains, and closed down 0.2 percent at 1,060.61 in New York. The yield on the benchmark 10- year Treasury note was little changed at 5:15 p.m. in New York from 3.28 percent late yesterday.

                         Decline Slows

From a year earlier, the S&P/Case Shiller index was down 13.3 percent, less than economists anticipated and the smallest decrease in 17 months.

The measure was forecast to fall 14.2 percent, according to the median projection of 36 economists surveyed by Bloomberg News. Estimates ranged from declines of 12.5 percent to 15 percent. It was down 15.4 percent in the 12 months ended in June.

Compared with the prior month, 17 of the 20 cities covered showed an increase, led by a 3.1 percent jump in Minneapolis and a 2.9 percent increase in San Francisco. Las Vegas suffered the biggest one-month decrease at 1.9 percent.

                         Sales Rising

Combined sales of new and existing homes have risen for four out of the last five months, signaling the worst of the housing crisis is over.

The Obama administration’s $8,000 tax credit for first- time buyers, which is due to expire at the end of November, combined with lower prices as foreclosures soared, have helped lift sales this year. The National Association of Realtors and the National Association of Home Builders have lobbied to extend the credit on concern demand will wane after it lapses.

Karl Case, co-creator of the S&P/Case-Shiller index, said the U.S. residential property market is improving enough to end the tax credit for first-time buyers.

“We’ve got to phase back incentives and this may be a good time to do that,” Case said in an interview on Bloomberg Radio. “I believe in some cities you’ll see the beginning of recovery.”

                        Pending Profit

Lennar Corp., the third-largest U.S. homebuilder, is among companies that see demand improving, even as losses mount. The Miami-based company said last week it expects to turn a profit in fiscal 2010.

“In the third quarter we started to see some real signs that the housing market is in fact starting to stabilize,” Stuart Miller, Lennar’s chief executive officer, said on a Sept. 21 conference call. “The sense that now is the time to buy is starting to gain momentum.”

The Conference Board’s confidence gauge was projected to increase to 57, according to the median estimate of economists surveyed by Bloomberg News.

The decline was caused by growing pessimism over jobs. The share of consumers who said jobs are plentiful fell to 3.4 percent this month from 4.3 percent. The proportion of people who said jobs are hard to get increased to 47 percent from 44.3 percent.

“It’s a little hard for households to look at their paychecks, or the lack thereof, and feel more confident,” Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in a Bloomberg Television interview.

Even so, “we should continue to see consumer confidence turn around,” because the recession is over and hiring eventually will rebound, she said.

                       Fewer Job Losses

The pace of job losses is easing as the economy shows signs of accelerating. Payrolls fell by 216,000 in August, the smallest decline in a year, according to the Labor Department.

Employers probably cut another 180,000 workers this month, economists project a Labor Department report later this week will show. 

Economists say the Conference Board’s index tends to be more influenced by attitudes about the labor market. Confidence may improve in future months as balance sheets rebound. Net worth for households and non-profit groups climbed by $2 trillion in the second quarter, marking the first gain since the third quarter of 2007, according to figures from the Federal Reserve.

Fed policy makers last week said they would keep the benchmark lending rate near zero “for an extended period,” and noted that sluggish income growth and tight credit are curbing household spending and slowing the pace of the economic recovery.



(Source: Bloomberg)


Economy in U.S. Shrank at a 0.7% Annual Rate in Second Quarter


The worst U.S. recession since the Great Depression eased more than anticipated in the second quarter, setting the stage for a recovery to take hold in the last half of 2009.The world’s largest economy shrank at a 0.7 percent annual rate from April through June, the best performance in more than a year, revised figures from the Commerce Department showed today in Washington. Gross domestic product contracted at a 6.4 percent pace in the first three months of 2009.
 

Government stimulus plans such as “cash for clunkers” and first-time home buyer credits are giving manufacturing and housing, the two areas at the center of the economic slump, a boost this quarter. Federal Reserve policy makers are among those concerned that gains in consumer spending will not be sustained as unemployment climbs and incomes stagnate.

“It’s a much better picture than a few months ago,” Lindsey Piegza, an economist at FTN Financial in New York, said before the report. “Inventories and government programs will drive growth in the second half. We’re expecting a mild recovery as the job market is still very weak.”

The drop in GDP, the sum of all goods and services produced, was less than the 1.2 percent median forecast in a Bloomberg survey of 78 economists. Estimates ranged from declines of 1 percent to 1.5 percent. The government previously calculated the pace of contraction at 1 percent last quarter.

This is the last of three estimates the government issues on economic growth.

                       Deepest Recession

The drop in GDP was the fourth in a row, the longest contraction since quarterly records began in 1947. The world’s largest economy shrank 3.8 percent since last year’s second quarter, making this the deepest recession since the 1930s.

Consumer spending, which accounts for about 70 percent of the economy, fell at a 0.9 percent pace last quarter, less than the government previously estimated. The median forecast of economists surveyed projected spending would be unrevised at a 1 percent drop.

Purchases are recovering this quarter. Sales at retailers surged in August by the most in three years, boosted by demand for automobiles as Americans rushed to take advantage of the “cash for clunkers” plan, figures from the Commerce Department showed earlier this month.

A smaller decline in business investment on equipment and software than previously estimated also contributed to the improved reading on GDP, the report said. Such spending fell at a 4.9 percent annual pace, compared with the 8.4 percent decline announced last month.

                       Inventories Plunge

Today’s report showed the record drop in stockpiles in the second quarter was even larger than previously estimated, paving the way for gains in manufacturing in the second half of the year. Automakers General Motors Co. and Ford Motor Co. are among firms boosting production in coming months.

Government spending climbed at a 6.7 percent pace last quarter, more than previously estimated and the biggest gain in more than seven years. The Obama administration’s $787 billion stimulus plan means such expenditures will keep rising in coming quarters.

The Fed’s preferred measure of inflation, which is tied to consumer spending and strips out food and energy costs, rose at a 2 percent annual rate, the same as the government previously estimated and matching economists’ forecasts.
Fed policy makers last week said they would keep the benchmark lending rate near zero “for an extended period,” and noted that household spending, while showing signs of stabilizing, was still being constrained by “job losses, sluggish income growth, lower housing wealth, and tight credit.”


                        ‘Slow’ Recovery

The economic recovery is “slow but certain,” FedEx Corp. Chief Executive Officer Fred Smith said this week, adding he has “guarded confidence” about an improving global outlook.“Recovery is not a straight line up, but a zig-zag with a few steps forward and backward,” Smith, the founder of the second-largest U.S. package-shipping company, said at FedEx’s annual meeting in its hometown of Memphis, Tennessee.

The drag from residential construction, which subtracted 0.7 percentage point from growth last quarter, is dissipating, economists said. Sales of new homes rose in August to the highest level in almost a year, and a report yesterday from S&P/Case-Shiller showed house values in 20 cities climbed in July from the prior month by the most since 2005.
 

The economy will expand at an average 2.6 percent pace in the second half of the year, according to the median estimate of economists surveyed by Bloomberg earlier this month.

The jobs report in two days may show payrolls declined by 180,000 in September after a 216,000 drop the prior month, and the unemployment rate climbed to 9.8 percent from 9.7 percent,the survey median shows. Economists surveyed by Bloomberg predict unemployment may reach 10 percent by year-end, the highest level since 1983.

Finally, today’s report showed corporate profits climbed 3.7 percent in the second quarter, the second consecutive gain. 

(Source: Bloomberg News)

World Economy: Nobel Winner Krugman Says -End of World Postponed

The global economic downturn has probably hit bottom though the recovery will be “slow and painful,” said Paul Krugman, the Nobel Prize winning economist.

“The end of the world appears to have been postponed,” 

Krugman, a professor at Princeton University, said at a seminar in Helsinki today. The world economy “does not appear to be falling into an abyss but is still” in trouble.

The outlook is “very fuzzy’ and a W-shaped recovery may become U-shaped.Germany, France and Japan emerged from recession last Quarter, adding to evidence some of the world’s biggest Economies are over the worst. The U.S. recession probably endedin late July or August, Krugman said, after gross domesticProduct fell 1 percent in the second quarter from the prior
three months.

The Nobel Laureate said ‘‘the truly extraordinary thing”has been “the collapse of world trade,” the subject for whichhe was awarded the prize last year, and he cast doubt on the potential for exports to lead the global recovery. He also said China’s economy isn’t big enough to serve as a growth engine.

“The problem is that this is a global financial crisis,”he said. “How can we have an export-led recovery unless we find another planet to export to?”

                          No Locomotive

 Krugman questioned whether China’s economy is large enough to be a locomotive of recovery.

“One of the reasons it’s so difficult to tell a story about a fast recovery is the large surpluses in Asia,” he said.

“If they can find a serious increase in consumer demand, that would help. We don’t really understand why the Chinese savings rate is so high, but it’s probably due to” large precautionary savings.

He warned that any decision by China to diversify its Currency reserves away from the dollar would “hurt Europe and Japan the most.”

While budget deficits “saved the world” in the short term, “for most people things are going to get worse,” he
said. “Governments can help us cope with the crisis, but they have levels of debt that are sufficiently high to be a source of concern.”

Even so, the recovery remains too frail to warrant scaling back support measures, he said. “Exit from stimulus should certainly wait until we have clear signs that we’re closing the output gap. This is no time to start exiting stimulus.”

                          ‘Don’t Panic’

Economies can “suffer” more than necessary if governments introduce austerity measures prematurely, Krugman said.

“Obviously deficits are building up, but to respond with severe cuts increases the human and the economic cost right away. You do not want to inflict upon yourself the equivalent of an IMF program. You want to avoid doing that if you can. You have to keep an eye on the debt numbers but not panic over them
if you can avoid it.”

While, last quarter’s drop in U.S. GDP was the fourth in a row, the longest contraction since quarterly records began in 1947, Krugman said the U.S. has $1.1 trillion in annual capacity “staying idle.” T he U.S. consumer “that’s been such an important driver of the global economy, is exhausted,” he said, forecasting U.S. unemployment may rise until early 2011.

                        Reason to Invest

 Leading the recovery will be business investment, he said, “but what’s going to drive business investment? It would be very helpful if someone could” make a discovery that would lead us out of this recession. “If we can introduce effective climate change policies, particularly the cost of carbon emissions,” that “would be a reason to invest.”

A “good” agreement at the forthcoming international climate change summit in Denmark “wouldn’t just be good for the planet, it would be good for the recovery,” Krugman said.The crisis has hurt the euro in its ‘competition’ with the dollar, he said. “The international role of the euro is that it has suffered a setback. The crisis has not been good for the euro and its competition with the dollar as the international
reserve currency.”
Krugman said he was concerned global efforts to emerge from the crisis “could just drag on and on for a long, long time.”

“The consequences of that are that you start to have problems with financing the debt and you start to have social and political problems,” he said. My great concern is that this just drags on and on with severe consequences for political and social stability.’’

History is no guide to a path to recovery, he said. “The trouble is, we really have no road maps. The only
model is the Great Depression itself.” That “was ended by a very large spending program known as World War II and we don’t Really want to repeat that.”
(source: Bloomberg News)

Student Loan Consolidation - What Are PLUS Student Loans?

At the time of researching your student loan consolidation information options you need to investigate PLUS student loans, with the rising cost of education over the previous few decades, reliance on traditional Stafford loans has in many instances failed to cover most student expenses, the PLUS (Parent Loans for Undergraduate Students) loan plan was designed to close that gap.

Though the rate is higher than other loans the cap on borrowing is much more flexible and the loans are not need-based.

For the FFEL (Federal Family Education Loan) plan, in which private lenders fund the loan the rate is 8.5%, through the Direct loan program the U.S. Dept of Education funds the loan directly @ 7.9%, the difference of 0.6% is often very large over the lifetime of the average loan, in the initial year alone on a 10 year loan of $25,000.00 it amounts to virtually $2,050.00 as apposed to $1,920.00 that equals $130.00 in interest, for an exact calculation you ought to experiment with some sample strategies using a loan calculator such as the ones available on-line.

Apart from the changes in interest rates, another recent alteration to the plan is to now allow professional and graduate students to qualify for PLUS loans, similar interest rates and eligibility criteria apply, like other students they must be enrolled in an eligible institution and program no less than half-time, unlike most Stafford loan schemes, repayment of a PLUS loan begins immediately, generally within 60 days after the loan funds are disbursed, interest begins accumulating from the time the initially disbursement is made, both the main loan and interest are paid in regular monthly installments whilst the student is in school, re-payments are made to the private lender in the situation of FFEL (Federal Family Education Loan) loans and to a U.S. Dept of Education servicing center in the circumstance of Direct loans.

Be certain to calculate carefully all the costs linked with obtaining a PLUS loan and look on it as a loan of last resort as even a home equity loan, for example may easily be less expensive since the interest is tax-deductible, it is essential to keep this information at hand when looking at any student loan consolidation information.

How to Achieve Financial Freedom?

We work so hard until we caught up in the routines for years. With the salary that we earn every day, we try to pay all of our bills. We always expect to get a higher salary, getting promotion or our business running better so we can earn more money. But we do not realize that when we get more income, we also have spent more money on our needs. After we work for two, five, or even ten years we just realize that we have been in the rat race of our financial troubles.

We already set our mind set that we will retire after 40 years of working and then we start to enjoy our life after that. What if you can get the financial freedom faster than 40 years? What if I can show you how to get to financial freedom in 5 years? There are couples steps to achieve financial freedom.

First, you have to get the right mind set. Your mind set is what you are. When you think that you are short, then you always will be short. Unless you want to change your mind set to the positive way, there is no way that you can get your dream, which is Financially Free. If you don't have the money, don't spend it! Our society nowadays, has a brand new habit that does not exist centuries ago. We can spend our money before we earn it! That's right; I am talking about credit card. If possible, cut all the credit cards that are not in used. We will be trap in this financial mouse trap easily with all the credit cards lying around on our tables. If you use your credit card, please do it in your current budget, not your future budget. A lot of people are trapped because they use their credit card based on their 'future' budget. For example, Bob just got promoted this week, and his salary will be raised next month. He was so happy about it, and then he spends his future salary with his credit card. In short, don't spend it until you have it in your 'pocket'.
Third, don't put your money in the bank for too long. We often forget that if we put our money in the bank, the value of the money will be decrease so fast. The interest rate that the bank gives is far less than the inflations rate each year. The bank doesn't care about our money; in fact, they made the most profit from our money.

We have to find the perfect investment. I suggest you to go to your financial advisor ask for their best opinions. They will seek your needs, and they can give you the investments that are suitable to your needs.

Fourth, if we really want to be financially free, we have to earn a passive income. There are several ways to earn passive income. First we can create our own company that can runs without us. So, in short you can create a system that can works for you. It doesn't have to be big; you can start it with a small size company, for example a groceries store. Franchising nowadays has increasing tremendously in the past few years. This industry gives the owner to adapt a system that are already being established and proven. If you don't want to build your own system, you can buy a franchise and run it.

Network marketing is very reasonable for people that don't have big capital. Opening your own business or franchising a business could cost you a fortune, but network marketing usually cost very little to start. You can always find a good network marketing company and stick with the company for 5 years. There you can learn how to built your network and achieve Financial Freedom.

Those are couples steps that you can follow to achieve financial freedom. Every journey is start with a small step. So, you can start your own journey to your financial freedom by start it with a small step. Don't you waste your time, because the time is so precious that we can't turn back the time. Hopefully this entire article help you realize that everyone need financial freedom, before you caught up into the routines for years.



U.S. economy still wobbly; France, Germany show Growth

Fresh data on Thursday dented hopes the U.S. economy is on the verge of a strong rebound, even as Western Europe's two largest economies reported a surprising return to growth in the second quarter.

Many pundits had expected the United States to lead the global economy out of recession, but the world's largest economy was soundly beaten to the punch as its retail sector struggled to lure skittish consumers.

Massive job losses and sharp declines in the housing market have prompted many Americans to pare back spending.

U.S. households are "in no position to drive a decent economic recovery," said Paul Dales, economist at Capital Economics in Toronto.

An unexpected rise in second-quarter GDP in Germany and France, pillars of the euro zone economy, boosted financial markets, which are still fretting over the potential for a global economic pickup.

German Economy Minister Karl-Theodor zu Guttenberg was cautious about the figures. Europe's recovery will likely be patchy at best, with Britain, Italy and the Netherlands still weak and parts of eastern Europe, which rely heavily on exporting to the wealthier western nations, reporting a far gloomier outlook.

GDP in the euro zone fell in the second quarter, albeit by a marginal 0.1 percent.
Germany and France emerged from lengthy recessions in April-June, with their gross domestic product rising 0.3 percent quarter-on-quarter [ID:nLD331672]. The much smaller Portuguese and Greek economies matched that growth.

The country's jobless rate fell in July for the first time in nine months.
We're entering a phase of stabilization and slow growth," Christian Dreger at the DIW Institute. "The main risk for Germany is a sharp rise in unemployment."

U.S. CONSUMERS NOT SPENDING

Retail sales excluding automobiles and gasoline, a popular measure with analysts, fell by 0.4 percent. Headline retail sales fell by only 0.1 percent as the government's "cash for clunkers" auto subsidy program drove more traffic to car dealerships. But new car sales may have drawn demand from other parts of the retail universe.

"While vehicle sales have rebounded, core retail sales have floundered after severe declines in late 2008," said Steven Wieting, economist at Citigroup.

The latest reading on continued claims, or those staying on the unemployment rolls, fell to 6.2 million from 6.3 million, a decline that suggested more long-term unemployed workers are exhausting their benefits.

Taken together, the data dulled hopes for a consumer-led U.S. recovery are elusive. Following a two-day policy meeting it said the economy is "leveling out," the first time in a year that its post-meeting guidance did not characterize the economy as contracting, weakening, or slowing.

WAL-MART EARNINGS BEAT STREET, DESPITE SOFT SALES

Wal-Mart Stores Inc. the world's largest retailer, reported on Thursday unexpectedly better earnings, but it warned that the economy remained a challenge.
The key metric for the giant discounter -- sales at stores open at least a year -- unexpectedly fell by 1.2 percent. Wall Street had looked for a gain of 0.85 percent.

Wal-Mart has benefited from "trade-down" from pricier retail chains, as many American consumers attempt to save cash, especially on staple items such as groceries and household products. Department store operator Kohl's Corp gave a grim outlook for the rest of the year, looking for same-store sales at its 1,000-plus outlets to fall as much as 5 percent.

STOCKS, EURO, INDUSTRIAL METALS RISE

Stocks, commodities and the euro rose due to the GDP surprise, while the dollar dipped. World stocks as measured by MSCI were up 1.1 percent, with U.S. markets rising despite the soft economic data. Wal-Mart surged by 2.8 percent to a four-month high.
Major U.S. stock indices are bumping their 2009 highs. Paulson's disclosure late on Wednesday that he bought large stakes in several banks, including Bank of America Corp., lifted financial stocks and helped sustain the rally.
Paulson of the eponymous Paulson & Co is credited for anticipating the looming credit crisis in 2007.

Meanwhile, copper led advances among industrial metals, reaching a 10-month high of $6,450 a ton on the London Metal Exchange. Lead, zinc and aluminum prices also rose.
"The German numbers are very helpful, the French numbers are very helpful, and that's supporting the copper market," said Sterling Smith, analyst for Country Hedging in Inner Grove Heights, Minnesota.

Debt factorization and invoice discounting:the basics

Debt factoring involves selling your invoices to a third party. process the invoices and allow you to draw loans against the money owed to your business. Essentially, these companies provide a debt collection and ledger management service.

This is used basically to reduce administration overheads & thereby improve the Cash flow. Businesses that supply this service are called factors or debt factoring companies.

Invoice discounting is an alternative way of drawing money against your invoices. However, your business retains control over the administration of your sales ledger. It offers valuable support services and credit insurance.

This guide gives information on how debt factoring and invoice discounting work,the advantages and disadvantages, different types of factoring and invoice discounting, the cost, and how to choose a factor or discounter.

How debt factoring works

Factoring provides a fast prepayment against your sales ledger, at a cost, to flexibly increase your working capital and improve cash flow.

Factoring is offered to businesses trading with other businesses on credit terms. It is not normally available to retailers or to cash traders.

When factoring starts

Factors can be independent or subsidiaries of major banks and financial institutions. business, review your financial situation and study your business plan to evaluate your suitability for a factoring facility.

After signing the agreement, the factor will typically agree to advance up to 85 per cent of approved invoices. all sales go through the factor.
Check the notification period - most factors require three months' notice to end Negotiate if you are not happy with the notice period.

Factoring is a complex, long-term agreement. solicitor on the legal and financial implications of factoring.

When an invoice is raised
  • You raise an invoice, which has instructions to pay the factor directly and sendit to the customer. Send a copy of it to the factor.
  • The factor pays an agreed percentage of the invoice to you.
  • The factor issues statements to the customer on your behalf. It operatescredit control procedures including telephoning the customer if necessary.When an invoice is paid by the customer
  • The customer should pay 100 per cent of the invoice directly to the factor.
  • The factor pays the balance of the invoice to you. Fees and interest will be deducted from the payment. factoring and invoice discounting.
When an invoice is not paid

If an invoice is not paid, responsibility for paying the debt will depend on the type of agreement - either recourse factoring or non-recourse factoring. page in this guide on recourse factoring and non-recourse factoring.

Advantages and disadvantages of factoring
There are numerous advantages to debt factoring, but also some potential
drawbacks.

Advantages

Factoring provides a large and quick boost to cash flow valuable for businesses that are short of working capital.

Other advantages:

  • there are many factoring companies, so prices are usually competitive
  • it can be a cost-effective way of outsourcing your sales ledger while freeing upyour time to manage the business
  • it assists smoother cash flow and financial planning
  • some customers may respect factors and pay more quickly
  • you may be given useful information about the credit standing of your
  • factors can prove an excellent strategic as well as financial resource whenplanning business growth
  • you will be protected from bad debts if you choose non-recourse factoring
  • cash is released as soon as orders are invoiced and is available for capital
Disadvantages

works best when a business is efficient and there are few disputes and queries.

Other disadvantages:

  • The cost will mean a reduction in your profit margin on each order or service fulfillment.
  • It may reduce the scope for borrowing - book debts will not be available as security.
  • Factors may want to vet your customers and influence the way that you do business.
  • Some customers may prefer to deal directly with you.
  • How the factor deals with your customers will affect what your customers think of your reputation.
  • You have to pay extra to remove your liability for bad debtors.

Student Loan Consolidation: How It Helps?

In reality, college education gets expensive, that makes students turn their student loans into funds. This might get you through college, but in return, students pay all the loans once they graduated. That’s the help of the student loan consolidation.


Since you graduated with debt, you will exert all the borrower’s efforts to find job and pay for their bills according to their fields of study. If the borrower wants file bankruptcy as a way of getting out of the federal student loan, well, they should think it again. It doesn’t mean the students could take away from the student loans even though they declare bankruptcy, which means there still need to pay the loans.


Then, this can be taken to a student loan consolidation company. Because the company will provide the student loan consolidation, the borrower must make one payment to the company every month, or depending on the terms provided according to budget. This will in turn make the payments to the creditors likewise, to the student loans. Borrower must look for a lender that offers low fixed prices. More importantly, borrower must have fix proper payment periods to avoid any pressures.


It is better to contact the source of student loan to be more certain about the consolidation of loan so that the borrower have an idea regarding their current loan and status.


Student loan consolidation is sometimes misunderstood as exactly as a loan. But as we can see, student loan consolidation doesn’t give borrower lump sum to pay off their student loans. Student loan consolidation distributes the amount money the borrower’s paid every month in order to make the necessary payments.


Conclusively, borrower may consider the student loan consolidation program when they are still in college. This will graduate students plan their future without hassle of repaying their loan.

Student Loan Consolidation

Student Loan Consolidation, also called a Student Consolidation Loan, combines several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer consolidation loans for private loans as well.

How It Works

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased.

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.

The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.

If a student consolidates their loans before they enter repayment, the interest rate used is the lower in-school interest rate. During repayment, the interest rate is the 91-day T-bill rate plus 2.3%.) Additional details can be found in the interest rate loophole section.

To find out more about Student Loan Consolidation, check with your lender.

Alternatives

Consolidation simplifies the repayment process but does involve a slight increase in the interest rate. Students who are having trouble making their payments should consider some of the alternate repayment terms provided for federal loans. Income contingent payments, for example, are adjusted to compensate for a lower monthly income. Extended repayment allows you to extend the term of the loan without consolidation.
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US Stock Market: Top Movers

July 17 -(Bloomberg)- Shares of the following companies are having unusual moves in U.S. trading. Stock symbols are in parentheses, and prices are as of 10 a.m. in New York.

Akamai Technologies Inc. (AKAM:US) fell 3.7 percent to $19.44 and slipped 4 percent earlier, the most intraday since July 6. The provider of software that makes Web sites load faster was cut to “sell” from “neutral” at Goldman Sachs Group Inc., which cited “aggressive competition.”

AngioDynamics Inc. (ANGO:US) lost 13 percent to $11.33 and slumped 14 percent earlier, the most intraday since Jan. 7. The maker of devices to treat cancer and heart disease said that, excluding some items, it earned 14 cents a share in the fiscal fourth quarter. That trailed the average analyst estimate by 6.7 percent, according to Bloomberg data.

Badger Meter Inc. (BMI:US) declined 9.6 percent to $36.52 and fell earlier to $34.80, the lowest intraday price since May 26. The Milwaukee-based maker of water meters and fluid-control devices posted second-quarter profit excluding some items of 48 cents a share, missing the average analyst estimate by 12 percent.

BioCryst Pharmaceuticals Inc. (BCRX:US) jumped 39 percent to $5.85 for the biggest advance in Russell 2000 Index. The company said its experimental influenza treatment peramivir showed positive results in two Phase 3 studies.

Callaway Golf Co. (ELY:US) fell 9.4 percent to $5.12 and slipped 9.7 percent earlier, the most intraday since June 9. The maker of Big-Bertha and Steelhead golf clubs reduced its forecast, saying it no longer expects second-half earnings to be higher than last year.

Citigroup Inc. (C:US) gained 2.6 percent to $3.11. The New York-based bank posted second-quarter profit of $4.3 billion, or 49 cents a share, compared with a loss of $2.5 billion, or 55 cents a share, a year earlier. The results include a $6.7 billion after-tax gain from selling control of the Smith Barney brokerage to Morgan Stanley.

CIT Group Inc. (CIT:US) rose the most in the Standard & Poor’s 500 Index, surging 27 percent to 52 cents. The 101-year- old commercial finance company facing bankruptcy said it’s in talks with potential lenders after failing to receive federal guarantees for its bonds.

First Horizon National Corp. (FHN:US) fell 5.2 percent to $12.02 and dropped 5.5 percent earlier, the most intraday since May 20. Tennessee’s biggest bank had a second-quarter loss of 58 cents a share, double the average loss estimated by analysts in a Bloomberg survey.

General Electric Co. (GE:US) had the steepest loss in the Dow Jones Industrial Average, slumping 6.1 percent to $11.65. The industrial and finance company reported second-quarter revenue of $39.1 billion, missing average estimate of $41.9 billion in a Bloomberg survey of analysts.

Gilead Sciences Inc. (GILD:US) gained 2.9 percent to $48.24 and advanced earlier to $48.35, the highest intraday price since April 6. The world’s biggest maker of AIDS drugs said it will collaborate with Tibotec Pharmaceuticals to develop a once daily HIV treatment drug containing medicines from each company to help simplify therapy. If approved, the new product would be the second single-tablet treatment regimen for HIV of its kind, the company said.

Google Inc. (GOOG:US) retreated 2 percent to $433.60. The owner of the world’s most popular search engine reported slower second-quarter sales growth as advertisers held back spending amid the global recession.

International Business Machines Corp. (IBM:US) rose the most in the Dow Jones Industrial Average, adding 2.7 percent to $113.62. The world’s biggest computer-services provider increased its full-year earnings forecast as it boosted profitability during the recession.

Mattel Inc. (MAT:US) climbed 3.4 percent to $16.74 and increased earlier to $17.06, the highest intraday price since Oct. 8. The world’s biggest toymaker posted second-quarter profit, excluding some items, of 6 cents a share, surpassing the 1-cent average analyst estimate in a Bloomberg survey.

Popular Inc. (BPOP:US) dropped 9.2 percent to $1.19 and slumped earlier to $1.12, the lowest intraday price since December 1989. The Puerto Rican bank with branches in the U.S. posted a second-quarter loss excluding some items of 65 cents a share, 49 percent wider than the average analyst estimate, according to Bloomberg data.

Schnitzer Steel Industries Inc. (SCHN:US) fell 5.1 percent to $51.32. The century-old recycler of scrap metal was cut to “underweight” from “equal weight” at Morgan Stanley, which said slow growth in developed economies will cut scrap supply.

Tempur-Pedic International Inc. (TPX:US) jumped 5.8 percent to $13.79 and climbed earlier to $14, the highest intraday price since May 7. The maker of luxury mattresses reported earnings excluding some items of 22 cents a share in the second quarter, beating the average analyst estimate by 25 percent.

Yahoo! Inc. (YHOO:US) climbed 3.5 percent to $16.75 after rising earlier to $16.86, the highest intraday price since June 5. The world’s second-most-used Internet search engine had its share-price estimate raised to $19 from $13.25 at Oppenheimer & Co., which cited rival Google Inc.’s comment in a second quarter earnings call that larger advertisers are returning. Yahoo! also is close to signing a partnership to collaborate with Microsoft Corp. on Internet-search technology and advertising, two people familiar with the matter said.

Housing Loan: Steps You Should Follow


The home buying process can seem complicated, but if you take things step-by-step and you know how to choose the right home loan, you will soon be holding the keys to your own home!

Ten steps to buying a home

Step 1:
Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment!


Step 2:
Know your rights


Step 3:
Shop for a loan. Save money by doing your homework. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. Consider getting pre-approved for a loan.


Step 4: Learn about home buying programs


Step 5:
Shop for a home. Choose a real estate agent, Wish list - what features do you want, Home-shopping checklist - take this list with you when comparing homes.



Step 6:
Make an offer. Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.


Step 7:
Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.


Step 8:
Shop for homeowners insurance Lenders require that you have homeowners insurance.

Step 9:
Sign papers. Have Puja or hawan.


Terms used in Housing Finance


EMI:
Equated Monthly Installment till the loan is paid back. It consists of a portion of interest and the principal


Floating Rate of interest:
Rate of interest which varies with the market lending rate. Monthly Reducing balance: In this system interest reduces monthly with repayment of Principal amount

Annual Reducing Balance:
In this system principal is reduced annually at the end of the year so you end up paying interest even for the portion of principal you have actually paid back

Fixed rate of interest:
Rate of interest remains unchanged throughout the period of the loan

Processing charge:
It's a fee payable to the lender on applying for the loan

Prepayment Penalties:
When loan is paid back before the agreed term of the loan, then banks/ institutions charge penalty for the prepayment

Commitment Fee:
Some institution charge commitment fee in case the loan is not availed within a stipulated period, after it is processed and sanctioned

Miscellaneous Cost:
It is quite possible that some lenders may charge documentation or consultant charges .




Budget 2009:Highlights


Pranab Mukherjee quoted Mahatma Gandhi in his speech.Democracy is the art and science of mobilizing the entire physical, economic and spiritual resources of various sections of the people in the service of the common good of
all.

BUDGET 2009-10 CHALLENGES

  1. to lead economy to high GDP growth rate of 9 per cent per annum at the earliest
  2. to deepen and broaden the agenda for inclusive development to improve delivery mechanisms of the government.
  3. to lead economy to high GDP growth rate of 9 per cent per annum at the earliest

BUDGET HIGHLIGHTS


  • to deepen and broaden the agenda for inclusive development to improve delivery mechanisms of the government.
  • Govt unlikely to unveil any significant economic reform plans
  • Agriculture sector may get a boost
  • Big investments in irrigation and seeds may be on the anvil
  • Government may ease export curbs on wheat and rice
  • Fiscal deficit was projected to be 5.5% of GDP in Interim Budget
  • This is Pranab Mukherjee's fourth Union Budget
  • Economic growth slipped from 9% to 6.7% in 2008-09
  • Gross budgetary support in the range of Rs 3,35,000 cr
  • Govt to raise borrowing target to tackle budget deficit
  • Fiscal sops likely for slowdown-hit sectors
  • Govt may announce auctioning 3-G spectrum
  • FM to announce PSU disinvestment plans
  • PSU sell-off to help fund rural and social programmes.
  • Infrastructure sector likely to get attention
  • I am deeply aware of the youth's challenges
  • I am conscious of people's faith in UPA
  • FM Pranab Mukherjee begins his Budget speech
  • Cabinet approves Union Budget
  • High expectations for reformist Budget from the UPA
  • Budget to carry forward NREGA and JNNURM
  • Fringe Benefit Tax may be scrapped
  • Securities Transaction Tax may be reduced
  • Challenge before UPA to return to 9% growth
  • Re-energise government and reinstitutionalise development
  • One Budget can't solve all issues
  • Improve rule of law for all citizens
  • Mandate for inclusive growth
  • Strengthen the delivery mechanism for healthcare
  • Increase investment in infrastructure
  • I am deeply aware of the youth's challenges
  • New company IIFCL to look at infrastructure needs
  • Two worst quarters since September slowdown behind us
  • Signs of revival in the domestic industry
  • Fiscal stimulus gave economy a boost
  • Govt took 3 stimulus packages to fight slowdown
  • Economic growth is a synergy of states and Centre
  • Integration of Indian economy with rest of the world
  • Significant hike in foreign capital
  • Housing allocation hiked under Rajiv Awaas Yojana
  • Fund allocation for urban poor accommodation is 3,973,000 cr
  • JNNURM allocation hiked by 87 per cent
  • NHAI allocation up by 23 per cent
  • Hike infrastructure investment to over 9% of GDP by 2014
  • IIFCL will refinance 60% of commercial bank loans in PPP
  • IIFCL will look at new projects
  • IIFCL will also look at incremental lending by banks
  • Print media stimulus package extended by six months
  • Target for agriculture credit raised to Rs 3,25,000 cr in 2009-10
  • FIIs have returned to India in last few months
  • Storm-water drainage project fund hiked to Rs 500 cr
  • Blueprint for national gas grid
  • Additional budget allocation to farmers
  • Allocation of Rashtriya Krishi Vikas Yojna stepped up by 30%
  • Total fiscal stimulus during '08-09 is Rs 1,86,000 cr
  • Move towards energy security via Integrated Energy Act
  • Saral-II forms to simplify taxation process
  • An expert panel will look into petroleum product pricing
  • Domestic oil prices must be in sync with global prices
  • Fertiliser subsidy to go directly to farmers
  • Export Credit Guarantee scheme extended till March 2010
  • Pranab Mukherjee quotes Kautilya in Budget speech
  • Incentives in interest rates to farmers to pay back
  • Allocation for PM Gram Sadak Yojna up by 59 per cent
  • Rs 39,100 crore allocation for NREGA
  • NREGA gave employment opportunities to more than 4.47 cr households
  • Aam Aadmi is the focus of all UPA's schemes
  • Govt to shift to nutrient based fertiliser subsidy regime
  • Banking network to be expanded
  • One banking centre in every bloc
  • Banks, insurance to stay with Govt
  • Interest subsidy on education loans
  • Rashtriya Mahila Kosh corpus to be raised to Rs 500 crore
  • Rs 2,000 cr for rural housing fund under National Housing Bank
  • National Mission for female literacy
  • NREGA allocation up 144%
  • Work on National Food Security scheme for subsidised food
  • Rs 100 cr one-time grant to expand banks in unbanking areas
  • Indira Awaas Yojna hiked by 63% to Rs 8,883 cr
  • Unique Identification ID project to roll out in 12-18 months
  • Unique Identification ID project to tap private talent
  • Allocation for NRHM to be raised by Rs 257 cr
  • National action plan on climate change
  • Full interest subsidy for students in approved institutions
  • Modernisation of national employment exchanges
  • 50% cent of rural women in self-help groups
  • Rural mega clusters in Bengal and Rajasthan
  • Rs 25 cr each for AMU campuses in Murshidabad and Mallapuram
  • Rs 2,113 cr for IITs and NITs
  • Pension of non-commissioned officers to be hiked
  • Commonwealth allocation hiked to Rs 16,300 cr
  • Allocation of Rs 50 cr to Chandigarh University
  • Rs 50 crore allocation for Punjab University
  • Govt to hike allocation to National Ganga Project to Rs 562 cr
  • One rank, one pension for ex-servicemen from July 1
  • Allowances to para-military forces at par with defence forces
  • Rs 1,000 cr for Aila rehabilitation programme to West Bengal
  • New pension benefits for 12 lakh jawans and JCOs
  • Allocation for rehab of Lankan Tamils
  • Higher public investment in infrastructure
  • Defence outlay has gone up
  • Recent initiative, on direct taxes side, of the setting up of a Centralized Processing Centre (CPC) at Bengaluru where all electronically filed returns, and paper returns filed in entire Karnataka, will be processed.
  • National pension scheme exempt from STT
  • Political funding to get 100 per cent tax deductions.
  • Deduction under section 80-DD in respect of maintenance, including medical treatment, of a dependent who is a person with severe disability being raised from the present limit of Rs.75,000 to Rs.1 lakh.
  • Sun-set clauses for deduction in respect of export profits under sections 10A and 10B of the Income-tax Act being extended by one more year i.e. for the financial year 2010-11.
  • Exemption limit in personal income tax raised by Rs.10,000 from Rs.1.50 lakh to Rs.1.60 lakh for all other categories of individual taxpayers.
  • Total budget expenditure for 2009-10 will Rs 10,28,032 cr
  • Share of direct taxes has increased to 56 per cent in 2008-09
  • GST to come into effect from April 01, 2010
  • Corporate tax unchanged
  • New tax code to be set up in 45 days
  • Goods and Services Tax to be introduced from April 1, 2010
  • Govt committed to tax reforms
  • Anonymous funds to charitable bodies get some tax relief
  • Commodities Transaction Tax to be abolished
  • MAT hiked to 15% of book profit
  • Fringe Benefit Tax to be scrapped
  • Surcharge on personal Income tax slashed by 10%
  • Hike in IT exemption for women to Rs 1,90,000
  • Hike in IT exemption to Rs 2,40,000 for senior citizens
  • General Sales Tax model will have a Central GST and State GST
  • Branded jewellery for women to become cheaper
  • Sensex crashes 869 Points
  • Customs duty on bio-diesel reduced
  • Tax holiday extended for textile units
  • Small businesses exempt from advance tax
  • Custom duty on LCD panels halved
  • Set-top boxes to cost more
  • Anonymous funds to charitable bodies to get some tax relief
  • Excise duty on fibre for cheaper cloth reduced
  • Service tax to be levied on law firms
  • Excise duty on petrol-driven small trucks reduced to 10%
  • Exemption of duty on goods made at construction sites restored
  • Drugs for heart diseases to become cheaper
  • Customs duty on gold and silver import increased
  • Mobile phone accessories to become cheaper
  • Pranab Mukherjee ends Budget speech by quoting the Mahatma Gandhi

US Stock Market: Earnings to decide fate of Stocks

NEW YORK (Reuters) With Wall Street stuck in a range since May, the start of second-quarter earnings season next week could prove to be a decisive factor for determining how much faith investors should have in an economic recovery.

After a rally of as much as 40 percent for the S&P 500 on expectations the economy will begin to turn around by year end, analysts will hone in on companies' projections to see if their hopes are corroborated.

The light menu of economic data will help keep the spotlight on earnings releases, with bellwethers Alcoa (AA.N) and Chevron (CVX.N) posting their quarterly scorecards. Of even more importance will be any outlook companies give for what they expect to see for the rest of the year.

A large U.S. Treasury auction could buoy the market if it shows there is good demand for government debt. Concern that the appetite for debt is waning as the government tries to fund its stimulus efforts was soothed by solid demand in last week's record $104 billion auction of Treasury securities.

"I think we are range bound and we're going to stay there for a while," said Paul Nolte, director of investments at Hinsdale Associates, in Hinsdale, Illinois.

"What will probably break it is going to be the earnings season because the expectation is for at least some rebound in earnings, especially from the banking sector."

WHEN 'LESS UGLY' LOOKS GOOD

Investors will be looking for companies to release results that are "less bad" in the same way that recent economic data has spurred optimism that the worst is over.

Analysts say that companies should be able to beat the relatively low bar that has been set by expectations, which could help the market add some gains.

Earnings for S&P 500 companies are expected to decline by 35.5 percent in the second quarter, according to Thomson Reuters data. While all 10 sectors are anticipated to fall, healthcare should fare the best, slipping just 2 percent.

On the opposite side, the materials and energy sectors are forecast to do the worst, falling 78.9 percent and 64.7 percent, respectively.

"On the earnings front, it's going to be ugly reading, but it's just going to be less bad, just like the economic data," said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

WANTED: HEALTHY OUTLOOKS

But the real spotlight will be on what companies foresee for the rest of the year.

Forecasts of profitability and improving consumer demand would increase optimism that the U.S. economy is finding its footing. Analysts said companies will have to signal the economy is actually improving and investors will not be impressed if they're just cutting costs and slashing jobs, as has been the case in recent quarters.

Nolte said the S&P 500 has been stuck between 880 and 950.

After surging from a 12-year closing low on March 9, the S&P 500's rally has stalled over the last couple of months. For June, the benchmark index was little changed.

Nonetheless, the S&P 500 has support at the bottom of that range and any dip toward that level will be a key test, analysts said. Holding above that range will be a positive sign for the market.

Since March, pullbacks have been relatively shallow and short-lived as investors who missed the rally the first time see the dips as buying opportunities.

"There's been plenty of reasons to have the legs kicked out from under us, but it hasn't happened," Marcouiller said.

"It tells you the money is quick to be there."

On the data front, reports are expected on the service sector in June from the Institute for Supply Management on Monday, as well as the international trade deficit for May and the preliminary July reading on consumer sentiment from Reuters/University of Michigan surveys -- both on Friday.

Weekly initial jobless claims data will get more attention than usual after Thursday's non-farm payrolls fell much more than expected.

"If initial claims continue to rise, it will probably begin to cast some doubt about the strength of the recovery," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.