US Economy Forecasts

The House Team Of Mortgage Intellingence asked:


“A penny saved is a penny earned”… or so the old proverb goes. Of course, the value of a penny has changed somewhat from the time when your mother offered her wisdom on the value of keeping what you earn. Today, you could save thousands of dollars by simply making the right mortgage decision. If you’re like most Canadian homeowners, your mortgage is a goldmine of potential savings.

In the past few articles, we’ve talked about the importance of your mortgage as one of your most significant financial decisions. We’ve explored the value of seeking the advice of a mortgage professional -whether you’re buying a home or renewing an existing mortgage.

Today, let’s take a look at the bottom line: the savings you can enjoy by making the right mortgage decisions.

It is the primary role of a mortgage broker to find you the right product for your personal situation. A mortgage broker is a financial professional and - like your investment advisor - he or she will want to understand your personal situation and payment preferences. Your mortgage broker has access to a broad spectrum of lending institutions, so you can do some valuable comparison shopping for the right combination of features, rates and mortgage options.

All these choices offer you substantial opportunities to save money over the life of your mortgage.

If you are like most homeowners, you are focused -for good reason - on finding the best possible rate for your mortgage. Your mortgage broker can offer you the best range of rate options and terms. If a mortgage broker can get you one per cent off the posted rate, that could translate into more than $13,000 in interest per $100,000 borrowed over a 25-year amortization schedule. If, however, you believe that most mortgage rates are basically the same from one institution to the next, then consider the fact that even an eighth of a point difference in the rate can offer significant savings over the duration of your mortgage.

But it’s also important to look beyond the rate. There are other ways to find savings in your mortgage. Your mortgage broker is up-to-date on market trends and new opportunities… as well as some of the tried-and-true ways to save money in a mortgage.

Do you get an annual bonus in your job? You may want to use that bonus to pay down the principal of your mortgage. If you pursue this strategy consistently over the life of your mortgage, you could save thousands of dollars in interest by paying your mortgage off sooner.

Are you paid bi-weekly or bi-monthly? Consider a change from the usual monthly mortgage payment. Set up your mortgage payment schedule to coincide with your pay period. Again, you can shave years off your mortgage, and enjoy thousands of dollars in savings.

In the coming weeks, we’ll look at some of these savings opportunities in more detail. In the meantime, consider the old penny proverb again. How much is your time worth? Time savings is one of the key, unexpected benefits that clients say they have enjoyed when they choose to work with a mortgage broker. Above all, a mortgage broker is an expert in customer service, and that means that your broker looks after every detail of your mortgage research and negotiations on your behalf.

david johnson asked:


The irresolute economy ensuing in improved jobs cuts has seriously damaged the life style of people across the world. This speculative economic climate has been arguably the worst, which have resulted in credit crunch. All these factors have terrifically affected the normal human life and moreover thousands of people are job less. How are you going to overwhelm these financial crises? It is truly hard to survive because, life is impossible without money. While the economy falls on the pit, the cost of living will proportionally go high. Definitely it is hard to manage and fulfill our basic needs.

Though the economy has become weak, our everyday living can be managed little easier when every products comes at discounts and coupons! It is not that every company or branding will offer you coupons and discounts, but you can avail it if someone grants.

Basically, coupons are not pioneered so often and to avail it, you must definitely be watchful and open-eyed. Either it is your housing materials or clothing or interiors, you can purchase them at best and affordable price through coupons. Make detailed research to find everything affordable, as coupons will vary from one provider to another. Check with several websites on the internet and ensure who is legitimate and best in providing coupons.

Everyone must agree the incredible benefits of coupons, because they can efficiently run their life with discount budget. Rather than spending huge deal of money on your every purchase, it is better to avail coupons to meet our basic needs. So, your needs have been successful accomplished by means of coupon codes, but what about your other expenses. Be sure with some points, as it will definitely help you in stabilizing your life style.

Never spare huge deal of money of something that is not vital at the moment. Get rid of using credit cards, because you will exceed your limitations without knowledge.

If you are a multiple credit card user, better avoid using all of them. If you truly need credit usage, then better make use of one card rather than using multiple cards. Try hard to achieve any best way to incur better income through different source. There are lots of openings, but you can try them only through extreme hard work.

Whenever or wherever you can avail the use of coupons, never miss it! Get the coupons and enjoy the discounts on your purchase.

Joseph Shalaby asked:


The economic crises that the country is undergoing one after the other are tarnishing the US image with their negative presence. The scope of the economic crises has repeatedly been compared to the financial troubles the United States experienced in the late 1920s. Suggestions have even been made that the looming recession is actually going to transform into a full fledged depression with devastating effects. How can any country present an untarnished image when the economic strength has dwindled to that of an embarrassing status?

Internally, the people of the country are split on what they believe the true role of the US government is as well as on the merits of bailing out the “haves” while the “have nots” get nothing. This is clearly evidenced by the furor of constituents who lashed out against local representatives and demanded that they vote “no” against the stimulus package. Why should those who have squandered the money of others be given even more to squander?

The current crises only serve to point outcertain flaws in the manner that the US economy functions. Economic growth in America is fostered by the crazy idea that only more spending will create a strong economy or improve the strength of a failing economy.

This kind of mentality tarnishes the image of the US in the eyes of many, starting with the US taxpayers who opposed the stimulus package on the grounds that throwing good money after bad is never a good idea. Or perhaps it is the idea that corporations that have proven themselves as foolhardy, ambitious, irresponsible, or any one of a number of other non-flattering words can simply look to the US government to bail them out and then go have a grand party to celebrate.

Of course, as with any government or country, certain flaws are going to exist and eventually become exposed to the world. This is expected. However, when others question the entire basis upon which the US economy now operates, the US image is going to take a huge hit. Gone are the principles that spurred such a fantastic country to emerge and prosper. In place of calculated growth backed by financial savings and realistic expectations, something new and different came into being.

The US economy evolved into a big conglomerate with one sole purpose in mind- to make more and more money without actually having any money touch hands. Speculation, artificial ups and downs generated by catastrophic events or even rumors, and the government’s flailing attempt to solve a manmade disaster with a government-orchestrated solution that does not have the backing of many US citizens can only lead to a once impressive image becoming sadly tarnished with egg on its face.

The manner in which the US government handles each economic crisis should make the government look stronger, more in control, and more responsible. However, when individuals from other countries are throwing their hands up in astonishment or laughing in amazement at the wisdom or lack there of, one can only conclude that the US image is truly tarnished. Unfortunately, unlike silver, one cannot simply apply a bit of polish and a smidgen of elbow grease to remove the tarnish and restore the US image back to a visage of power and control.

Jonathon Hardcastle asked:


The US government is one of the three countries in the world that have initiated and maintained the Cuba blockage. Specifically, only US, Israel and Uzbekistan are the rejecting the voice of the United Nations General Assembly to seize this type of trade treatment. More cases appear every year in the news regarding the US embargo consequences on the lives of millions of Cubans. Food, medicine and other important supplies are withheld from the citizens of this island due to its political history and recent communist upheaval that led Fidel Castro in power. But although the General Assembly of the United Nations approved a resolution, condemning the economic blockade that the US has applied to Cuba for more than 35 years, the situation remains almost unchanged.

Some critics consider the Cuban resolution not only a logical decision but actually one of great importance for the Cuban citizens’ well-being. Health personnel reported an increase in some infectious diseases, an increase in iron-deficiency anemia among pregnant women and young children, and a rise in the incidence of low-birth-weight babies. The Ministry of Public Health attributes these changes, to problems in importation of food supplies; and that the neuropathy epidemic, which appeared in late 1991 in Cuba, is probably partly the result of nutritional deficiencies.

But in order for the Cuban situation to improve, a company has to be able to invest in such a challenging environment without being excluded from tremendously important markets like that of the US. On the other hand, the possibility of Cuba making any product or service purchases, especially medical ones from the United States, will remain a distant “dream” as long as the embargo is in place, according to the government of Fidel Castro. Thus, under the current circumstances, given the absence of normal commercial relations or transportation mechanisms between the two countries, “it is not practical or viable to speak of such transactions,” the Cuban Minister of Public Health, Carlos Dotres, had said in 2000. This fact is further supported by the fact that there is currently great difficulty in purchasing products since there are no commercial flights between the two countries and ships that dock in Cuba are prohibited from visiting the US ports for the following six months.

Meanwhile, the regulations accompanying the decision to streamline procedures for licensing purchases of supplies and health care equipment, rather than making trading more flexible, have in fact created more obstacles, according to local experts. The seller, for example, must oversee the product until it reaches its final destination, which according to U.S. policy may not be linked to the Cuban government or be used in biotechnological production under any circumstances. The U.S. companies that Cuba has contacted, often back away from completing the sale when they realize that they must account for the destination of their exports and who they will benefit.

After carefully studying and analyzing this county’s case, it is only logical to conclude that the United States embargo should not continue to force the Cuban citizens to search for another country and especially US as their new permanent residence. The US will not act wisely by tightening further the economic grip on Cuba as the opposite, according to business experts, can result in numerous advantages for the US.

Andrew Daigle asked:


The US dollar is the most traded currency in the world and an understanding of US economic indicators is important in understanding the US dollar and its role in the currency trading system. Some of the most important U.S. economic indicators include the gross domestic product (GDP), producer price index (PPI), consumer price index (CPI), industrial production (IP), durable goods & services, employment cost index (ECI), retail sales index (RSI) and housing starts. These indicators have the potential to generate volume and move market prices around the globe.

Gross Domestic Product (GDP) - The gross domestic product is a measure of all economic activity in the economy. The GDP represents the total market value of all goods and services produced by both domestic and foreign companies within the borders of the US. The GDP should measure between 3% and 5% for advanced industrialized nations such as the U.S., Europe and Japan. A growth of less than 3% indicates a stalling economy and a growth of more than 5% indicates that the economy is on the verge of inflation.

The U.S. Bureau of Economic Analysis (BEA) publishes two measures of the GDP. One measure is based on expenditures while the other measure is based on incomes. The GDP publishes an advance release of the GDP following each quarter of the year, which contains, among other things, estimates for data not previously released, trade balances and inventories. This is considered to be the most important release while other BEA releases are considered less significant.

Producer Price Index (PPI) - The PPI measures price changes in the manufacturing sector as the average change that domestic producers in manufacturing, agriculture, forestry, electric utilities, natural gas, mining and fisheries receive in selling prices. The PPIs used most often in US economic analyses are measures for crude, intermediate and finished goods.

Consumer Price Index (CPI) - The CPI measures the average price paid by urban consumers for a fixed basket of goods and services. Urban consumers are largest base of consumers, totaling about 80% of the U.S. population More than 200 categories of goods and services are included in the calculation of the CPI. The measure of the CPI includes taxes and user fees connected with goods and service, but it excludes the volatile food and energy components of consumer spending.

Industrial Production (IP) - IP is a chain-weighted measure of the change in production for the nation’s factories, utilities and mines. An IP is determined for types of industries and types of markets. Since the IP is a measure of industrial capacity and available industrial resources, IP may also be called capacity utilization. Since manufacturing accounts for about one-fourth of the economy, IP rates indicate the capacity of the country’s factories.

Durable Goods and Services - Durable goods and services are a measure of new orders placed with domestic manufacturers for immediately delivery and delivery in the future. A durable good or service is a good that lasts or a service that extends for a period of more than three years.

Employment Cost Index (ECI) - The ECI is an estimated measure of the number of full-time and part-time employees in businesses and government. It is based on more than 500 industries in 50 states and 255 metropolitan areas. Data are collected from surveys of employer payrolls and includes wage as well as non-wage costs of employment.

Retail Sales Index (RSI) - The RSI is an estimate of the total monthly sales from retailers. It is a measure of consumer consumption and confidence. Data are collected from a sampling of retail establishments throughout the country. Retail sales include the sale of services, durable goods and non-durable goods. It includes excise taxes and excludes sales taxes.

Housing Starts - Housing starts is an estimate of the number excavations for foundations of residential properties. An analysis of housing starts measures the change in housing start levels from month to month.

John Forman asked:


The things which contribute to price levels and action in the financial markets are numerous and diverse, and their influences can vary through time, and across different markets. This article identifies the different types of Economic Data influences and the role they play.

There are two ways economic information can influence prices. The first is in the macro sense. Macroeconomic inputs include:

Interest Rates

Economic Growth (GDP)

Government Budget Surpluses/Deficits

Trade Balances

Commodity Prices

Relative Currency Exchanges Rates

Inflation

Corporate Earnings (both for individual companies and the broad collection)

These elements will generally all have long-term inputs in to the pricing of any given market. They do not tend to move in sharp, dramatic fashion, so their influences also tend to be seen over longer periods of time.

That said, the release of economic data related to the above can be seen to have serious impact in the short-term activity in the markets. This comes primarily in the form of data releases. Some of the most important are:

Employment Data

Trade Data

GDP growth figures

Consumer

Sandra Simmons asked:


Does the current economic crisis have you worried? Are you wondering how to achieve financial freedom so you can protect yourself and your family from the coming financial crash? Here is what you need to know.

The first thing you need to understand is what the word economics means in terms of thinking about your family, and how you can use what it means to your financial advantage.

Forget what the media says about economics when they talk about the roller coaster ride of the stock market, supply and demand, inflation, banking industry mortgage defaults and the unemployment rate. Those are ‘economic characteristics’ that measure an area much larger than you can control.

What you can control is your own household economics. The definition of economics I am using is the original one; meaning “the art or science of managing a household or business.” And that is something that you, as an individual, can control.

There is an art to managing a household. It takes having certain skills and abilities, like organizing things so they run smoothly. There is a science of managing a household, especially in the area involving money. Here is what you can do to make sure that the economics of your household are strong and stable, even though the economy of the country may be on the slippery slide to disaster.

1 - Spend Less Than You Make

Take a lesson from your parents or grandparents who made very little, but lived very well. Keep expenses down to a level below what you bring home in your paycheck after taxes. The fastest road to financial disaster is spending more than you make. It’s possible to maintain your quality of life while cutting optional spending. This can be done by doing something as simple as renting a movie and making popcorn at home instead of going to the theatre, to buying a new used car instead of a brand new car.

2 - Pay CASH

Every time you purchase something using credit cards that you cannot pay off as soon as the statement arrives, you are committing your future earnings to the credit company. Those future earnings will be needed to pay your regular household expenses, so you end up in economic slavery known as the credit trap. The exception is purchasing property that increases in value, such as buying a home or investing in a commercial building that puts more income in your pocket.

Tip: When paying with cash; negotiate a cash discount. When the economy is sliding down and credit is harder to get, the guy with the cash is king. In addition, find out how to buy wholesale instead of retail to further lower your cost.

3 - Make the Money BEFORE Spending It

If there is some large purchase you need to make or want to make in the future, start putting small amounts in a savings account towards that purchase and keep that up until you have the cash to pay for it. If you have 10 years before your child enters college, then find out what the tuition will be and figure out how much you have to put away every week to have the cash the year they graduate from high school. Plus apply for every student scholarship, grant or financial aid package you can locate.

4 - Stash Some Cash for Emergencies and Living Expenses

Nothing will make you sleep better at night than the financial freedom of having some cash tucked away for emergencies like having to get the car repaired, needing some unexpected dental work or losing a job. When you have a cash cushion you can get your hands on immediately, then magically, you stop worrying about money, your attention goes back on living life and enjoying it, and making money suddenly gets easier.

The only thing you have to fear in an economic crisis is not having some cash reserves in a savings plan you can immediately get your hands on. Did you know that more millionaires were made during the Great Depression in the United States than during any other era in our history? How did that happen? In that time, the economy crashed, the stock market crashed, inflation took prices of everything through the roof, the unemployment rate went sky high as businesses closed, and people who lost their jobs also lost their homes.

The people who had cash stashed away were able to buy houses, property and whole companies for pennies on the dollar. They ended up being millionaires because they had enough cash to weather the storm called the Depression.

Out of every bit of income that comes in the door, immediately carve off 10% and put it in a savings account that you have designated for your cash cushion. Even if you have to work an extra job and cut expenses on top of that, JUST DO IT! As the weeks roll by you’ll find you sleep better at night and walk through life with a lot more confidence knowing you have achieved financial freedom and have protected yourself from the economic crisis looming on the horizon.

Samantha Gilmartin asked:


Auditing giant PricewaterhouseCoopers have issued a report that many financial commentators may find surprising. Where as other industries are feeling the pinch of the increasingly shaky economy, PwC predict that the entertainment sector will experience a rise in compound growth of nearly 7% over the next five years.

Incorporating a huge international survey, PwC claim that, despite aggregate share values for multi-media companies falling by 13% since the start of the year, at the end of 2012 the global entertainment industry will be worth over 1.1 trillion GBP. The report is not all a bed of roses however. The author, Marcel Fenez, lays out a stark warning to producers, managers and chief execs. “We used to talk about survival of the fittest” he begins, “but I believe that it’s very much now about how we collaborate as different parts of the media value chain to really exploit the opportunities there are in the market place.”

The results of Fernez’s account are in plain contrast to findings laid out in a BBC report published today. The article opens with the assertion: “The British Chamber of Commerce’s (BCC) quarterly report found that the credit crunch and rising costs had dented the most important sectors of the economy”. Though the survey focusses on 5000 small businesses around the UK, the long term effects on the wider economy are obvious. The financial advisor to the BCC, David Kern, even claimed that: “We are now facing serious risks of recession”

The PwC’s findings take on a far more global perspective than those carried out by the BCC. With a nod to the appetite of developing countries, the report touches upon the shift by many entertainment companies from West to East. In just the last few months Hollywood’s most celebrated director, Stephen Spielberg, moved his DreamWorks company from Paramount Pictures in a 300 million GBP financing deal with India’s Reliance ADA Group.

The lesson from PwC would seem to be that, though the future may be brighter than most for the entertainment sector, it certainly has to adapt in order to flourish. No longer, it would appear, can multi-media conglomerates, television firms, record companies and theatres exist in western-centric isolation but their careful interplay will see them bloom against the drab realities of the impending economic decline. If Fernez’s study is to be believed then, come 2012, the only thing glittering in the financial overcast will be show business and its updated global bedfellows.

James Woolley asked:


Economic data releases occur almost every day and can have a dramatic effect on the forex markets, and indeed all major markets. They can cause wild swings and increased volatility which is great for traders, but can you successfully profit from them as a forex trader?

Before I address that question, let me start off by talking about data releases in more detail. As a trader the first thing you should do every day is consult an economic calendar to see what releases are scheduled for the forthcoming day. This will allow you to determine when you should be out of a trade if you don’t want to trade through them, or when to turn your computer on and be ready to trade if you do wish to trade them.

The best economic calendar in my opinion is at Forex Factory as this tells you not only what releases are scheduled for the day, but also the predicted and actual figures for each release, plus the importance of each one and the effect that they may have on specific currency pairs.

Different data releases affect currencies in different ways. For example, interest rate decisions and non-farm payrolls have a major impact on dollar currencies whereas other less significant data releases will hardly have an effect at all and will remain little changed.

So it’s best to arm yourself with all this information and be fully prepared for any scheduled releases, but can you profit from them?

Well in my opinion I don’t think you can consistently make profits trading the news as soon as it’s released simply because it’s extremely difficult to predict how the market will react to any given news.

For example, sometimes you will get seemingly bullish figures and expect the currency to go up, but it will do the complete opposite. Other times it will go up initially and then reverse as analysts and traders digest the news.

It really is an extremely difficult way to trade the markets, particularly for the individual trader working alone. Trying to second guess the market is a very dangerous game.

In my opinion there are far easier ways to trade the forex markets using solid technical analysis methods. You don’t need to trade during those times when market-moving figures are announced because all they will do is distort any technical analysis and make it very difficult to enter a trade with confidence.

Furthermore I always believe it’s best to exit trades in advance of economic data releases simply because prices can move very fast and your stop losses may not get filled at the price you requested.

I’m sure there are people who can make profits from news releases, but in my experience it’s extremely difficult and akin to gambling in some instances.

Jeff Park asked:


On October 3rd of 2008 the House of Representatives voted 263-171 after the Senate had already voted 74-25 to enact the Emergency Economic Stabilization Act of 2008 and President Bush signed the bill into law within hours. The latest attempt to help the economy grow in what has been one of the largest recessions in the past decades. Without this bill some said that our economy would even fall into a depression. What will the Emergency Economic Stabilization Act of 2008 actually do? This is a question that only time will tell but analyzing the bill could give us some expectations.

700 billion dollars is a great deal of money. However, the problem we are in may be a bit greater than that. The question that arises would be is 700 billion dollars enough money? The answer might be found when we look and see that there are more than 1 trillion dollars worth of mortgage back securities. 700 billion dollars just might not be enough to save us after all. The 700 billion dollars that the bill entitles the Treasury to is not what is available from the start either, the Treasury only will start with 350 billion dollars which could impose an even bigger problem.

The Emergency Act also fails to regulate what the Treasury can actually purchase. They do not just have to purchase residential mortgage backed securities, they could purchase whatever they wanted in a sense. There is also no set prices for which the residential mortgage backed securities will be purchased at. If the prices are set too low some owners may feel the need to hold on to their securities in hope that some day they will rise higher then the offered price. If the institutions do not sell their securities the whole plan in general would fail. If the prices are too high the institutions would rush to sell and if the market continues to fall then taxpayers will be the ones who will be greatly affected. The money that is being spent also is not directly traced. Reports that were supposed to come out 30 days after the bailout bill plan started have not been released yet do to the fact that it took so long to appoint the special inspector. 290 billion have already been committed of the bailout bill into leading banks in the country and that money can not be traced anymore as the banks do not have to state what they are doing with it. Six weeks into the program the inspector general Eric Thorson was quoted in saying “”I don’t think anyone understands right now how we’re going to do proper oversight of this thing.” Without proper oversight this plan could go down hill very fast. This is a pretty important time for our nation and failing to execute this bill one could only imagine the damages it could cause.

Something needed to be done to help our economy out. The bail out bill however, may have been rushed and not fully thought through. Too many people thought that the congress had to act fast and they did, but if they did it in the right way only time will tell. If we look at the history of other systemic banking crisis only 32 of 42 had any government intervention and out of those 32 only 7 of those used a system like this of purchasing bad assets. Even when bad assets were purchased there was also purchase of dividends and stocks. In most cases the purchasing of bad assets only raised the fiscal cost.  The Emergency act took 700 billion dollars out of taxpayer’s pockets and put it into the hands of bankers and investors who will probably become even wealthier from this.

If this bailout plan does not work the economy may be even worse of then when this bill was enacted. A great deal of money would be wasted and the economy and government would be back at square one. Maybe the plan should have involved more of the people and institutions at fault. Dividends, bonuses, and such could have been suspended to help put money back in. That was not the path that the United States Government took and now the people will have to sit back and hope that this was not just a big mistake. This bailout plan may end up being more of a help only to the rich and not to the families that are stuck with debt. It will be very sad to see that happen. The Emergency Economic Stabilization Act of 2008 was a socialistic approach to helping the economy out with no guarantee that it would actually do that.