Economics
Can The Fed Stop The Bleeding?
The “subprime” debacle in the last few weeks seemed to come from nowhere to suddenly infuse panic into financial markets from stocks to mortgages to hedge funds to banks to precious metals to consumer spending…
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The Specter of America's Coming Economic
Disaster - Congress Continues on Its Path of Fiscal Irresponsibility
As a financial planner I deal with cash flow issues daily. Perhaps that's
why I have become increasingly disturbed by Washington's irresponsibility
when it comes to its budget. Admittedly, I am not an expert on the national
budget so this paper will rely heavily on what the experts say…
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the full article…
Just Another Credit Crunch
Many investors are beginning to think that income investing is every bit
as risky as equity investing, but nothing has really changed in the relationship
between these two basic building blocks of corporate finance. What has
changed in recent years is the nature of the derivative products created
by the wizards of Wall Street…
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the full article…
Why The U.S. Fed's 0.50% Rate Cut
Won't Save The U.S. Markets
“Deficit spending is simply a scheme for the confiscation of wealth. Gold
stands in the way of this insidious process. It stands as a protector
of property rights” - Alan Greenspan, 1966, more than 20 years before
he served as Chairman of the U.S. Federal Reserve from 1987-2006…
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the full article…
Working with Export and Free Zones
Ukrainian President, Leonid Kuchma, told, in Fenruary 2003, an assembly
of senior customs service officials that "it is necessary to put an end
to (Ukraine's 11 free economic and 9 priority) zones (and) liquidate them
completely. (They) have become semi-criminal zones, and this refers not
only to the Donetsk zone…
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the full article…
The Delicate Art of Balancing the
Budget
Government budgets represent between 25% and 50% of he Gross Domestic
Product (GDP), depending on the country. The members of the European Union
(Germany, France) and the Scandinavian countries represent the apex of
this encroachment upon the national resources. Other countries (Great
Britain, to name one) fare better. But even the more developed countries
in South East Asia do not clear the 25% hurdle…
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the full article…
Austrian Banking - Interview with
Wolfgang Christl
In the second half of 2005, Erste Bank, Austria's second largest, took
over yet another East and Central European financial institution: Romania's
BCR (Romanian Commercial Bank). This acquisition threw into sharp relief
the post-Communist Mittel- European strategy of Austrian banks, big and
small…
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the full article…
The Role of Central
Banks in Banking Crises
Central banks are relatively new inventions. An American President (Andrew
Jackson) even cancelled its country's central bank in the nineteenth century
because he did not think that it was very important. But things have changed
since. Central banks today are the most important feature of the financial
systems of most countries of the world…
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the full article…
Rough Flight Ahead
For Helicopter Ben?
The last time a new Federal Reserve Chairman took office, replacing the
legendary Paul Volcker on August 11, 1987, not only did he find himself
with a big pair of shoes to fill, but he also faced a plunging bond market
that would soon send long-term interest rates spiraling into double digits.
Desperate to immediately establish his credentials as a staunch inflation
fighter, the freshly appointed Alan Greenspan wasted no time in hiking
the discount rate on September 4…
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the full article…
Fedspeak: Polyglot
Perspicacity
"Twas brillig, and the slithy toves Did gyre and gimble in the wabe;
All mimsy were the borogoves, And the mome raths outgrabe." Reading
silently or aloud creates rhythmic nonsense, you might think. Humpty Dumpty
explains, defines, and clarifies for Alice. Soon Alice sees meaning. As
she does, the upside downs become the right side ups…
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the full article…
Is There Income After
Peak Oil And Economic Collapse? There Is If You're Clever
Many predict that the world will soon experience an economic depression,
brought on by a variety of factors, but most particularly Peak Oil - the
lessening production of petroleum…
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the full article…
Tax Haven Raises 2006
Entry Price
While Monaco is a well known European tax haven, Andorra has remained
little known outside of the financial community - despite enjoying the
same tax advantages and arguably more private banking than her better
known rival…
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the full article…
The Business of Theme
Parks
War - especially coupled with a globally sluggish economy - has a contradictory
effect on the consumption of entertainment. Disposable incomes plummet
curtailing the sales of medium to big ticket items such as cruises and
resort vacations. But people - besieged by anxiety and bad news - also
wish to be diverted. As the conflict rages, they stay indoors and tune
in. Home entertainment booms. But once physical insecurity abates, consumers
go out in full force mobbing movie theatres and theme parks, making up
for lost time and frayed nerves…
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the full article…
How to Benefit
from Public Procurement
In every national budget, there is a part called "Public Procurement".
This is the portion of the budget allocated to purchasing services and
goods for the various ministries, authorities and other arms of the executive
branch. It was the famous management consultant, Parkinson, who once wrote
that government officials are likely to approve a multi-billion dollar
nuclear power plant much more speedily that they are likely to authorize
a hundred dollar expenditure on a bicycle parking device…
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the full article…
The Revolution
of Symbols
Five thousand years ago, people were still roaming the earth as nomads.
They carried along their few precious possessions in their hands and on
their backs. They hunted and gathered food at random…
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the full article…
Soccer as
Business in Eastern Europe
The Champions League is a rich man's club, complain football teams from
nine south and east European countries. They are bent on setting up an
alternative dubbed the "Eastern League". The revolt is led by Dinamo Bucharest
and Greece's Olympiakos Pireu and has been joined by 14 other clubs: Steaua
and Rapid from Romania, The Turkish Galatasaray Istanbul and Besiktas
PAOK Salonic of Greece, the Serbian Steaua and Partizan Belgrade, Hajduk
Split from Croatia, the Cyrpiot Apoel Nicosia, Maribor from Slovenia,
the Bulgarian teams TSKA Sofia and Levski Sofia and the Ukrainian contributions
of Shakhtor Donestk and Dinamo Kiev…
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the full article…
Working with
the European Bank for Reconstruction and Development
In typical bureaucratese, the pensive EBRD analyst ventures with the appearance
of compunction: "A number of projects have fallen short of acceptable
standards (notice the passive, exculpating voice - SV) and have put the
reputation of the bank at risk". If so, very little was risked…
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the full article…
The Business
Of Factoring & How It Works
Factoring, also known as accounts receivable factoring, is a business
term used to describe a method in which companies sell their outstanding
receivable invoices in order to gain immediate cash for their business.
When a company sells a product or service, an invoice is created stating
the amount due and the number of days in which the invoice must be paid…
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the full article…
Slush Funds
According to David McClintick ("Swordfish: A True Story of Ambition, Savagery,
and Betrayal"), in the late 1980's, the FBI and DEA set up dummy corporations
to deal in drugs. They funneled into these corporate fronts money from
drug-related asset seizures…
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the full article…
European
Real Estate Prices To Drop In 2006
Areas of Europe popular with holiday home buyers could see property prices
fall by ten per cent or more in the year ahead, according to overseas
property specialists Tribune Properties…
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the full article…
Global
Differential Pricing
In April 2002, the World Health Organization (WHO), the World Trade Organization
(WTO), the Norwegian Foreign Ministry, and the US-based Global Health
Council held a 3-days workshop about "Pricing and Financing of Essential
Drugs" in poor countries. Not surprisingly, the conclusion was: …
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the full article…
The Blessings
of the Black Economy
Some call it the "unofficial" or "informal" economy, others call it the
"grey economy" but the old name fits it best: the "black economy". In
the USA "black" means "profitable, healthy" and this is what the black
economy is. Macedonia should count its blessings for having had a black
economy so strong and thriving to see it through the transition. If Macedonia
had to rely only on its official economy it would have gone bankrupt long
ago…
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the full article…
Offset and
Barter Transactions
In December 2002, Poland decided to purchase 48 F-16 Falcons from Lockheed
Martin Corporation - an American defense contractor. Pegged at $3.5 billion,
this is the biggest defense order ever issued by an east or central European
country. The financial package includes soft loans and a massive offset
program - purchases from Polish manufacturers that more than erase the
costs of the deal in foreign exchange…
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the full article…
The Economies
of the Middle East
On February 24, 2003, in the Islamic Financial Forum in Dubai, Brad Bourland,
chief economist for the Saudi American Bank (SAMBA), breached the embarrassed
silence that invariably enshrouds speakers in Middle Eastern get-togethers.
He reminded the assembled that despite the decades-long fortuity of opulent
oil revenues, the nations of the region - excluding Turkey and Israel
- failed to reform their economies, let alone prosper…
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the full article…
Switzerland's
Cheesy Economy
In a series of referenda in 2003-5, Swiss citizens transformed their country
forever, economically aligning it with the European Union and opening
it up to work migration. It was an uncharacteristic response to increasingly
worrisome times…
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the full article…
Financial
Information In Retirement
There seems to be a problem with all financial institutions in America
today in that they do not take the time to understand the information
needs of people in retirement. After a person retires, that person wants
information with regard to financial performance, quarterly taxes, income
and activity. Just about all of the institutions provide some level of
the needed information, but most fall short in one or all of these areas…
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the full article…
Small and
Medium Family Owned Enterprises in Germany
According to a survey of German executives by the influential Ifo think
tank, German business confidence rose in January 2003 for the first time
in eight months - albeit imperceptibly, from 87.3 to 87.4. A poll conducted
by ZEW, another brain trust, confirmed these findings. On past form, though,
this confidence level heralds a contraction of 5-6 percent in industrial
production…
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the full article…
Interest
Rate Increases And You!
After 12 rate increases by the Fed, it does appear that the real reason
behind the Fed action is to apply the brakes on inflation. The Fed seems
confident that economic growth is on track but wary that costlier energy
could "fuel" dangerous inflation. From all reports it is working. All
types of borrowing will cost more…
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the full article…
Taxes:
More of the Same
The President's Tax Reform Panel issued their final report last week
[1]. The panel's goal was to recommend reforms that would make the tax
code "simpler, fairer and more conducive to economic growth".
The panel accurately depicted the sorry state of the tax code, stating
that the current code is rewritten so often that "it should be drafted
in pencil"…
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the full article…
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