Alen's Finance Blog

The Future of Money

2012-01-30T03:50:00.001+11:00

Excellent topic. The talk from the RSA on the future of money.

http://www.thersa.org/events/audio-and-past-events/2011/the-future-of-money

Lead by this interesting concept of new and different monetary system, I read a few more good articles on topic:

iPhones from China and the Future of U.S. Manufacturing

2012-01-24T22:30:00.001+11:00

Great text about Apple's manufacturing in China and the numbers behind it.

Manufacturing an iPhone in the United States would cost about $65 more than manufacturing it in China, where it costs an estimated $8. This additional $65 would dent the profit Apple makes on each iPhone, but it wouldn't eliminate it. (The iPhone average selling price is about $600, and Apple's average gross margin is about 40%. So Apple's gross profit on each iPhone is probably in the neighborhood of $250.)

And, more importantly

Apple doesn't build iPhones in the United States, in other words, because there is no longer an ecosystem here to support that manufacturing. There's no supply chain, there aren't enough super-low-cost workers, and there are not enough mid-level engineers. And many Americans looking for work are still hoping for a return to jobs, salaries, and lifestyles that have simply disappeared.

Read more: http://www.businessinsider.com/you-simply-must-read-this-article-that-explains-why-apple-makes-iphones-in-china-and-why-the-us-is-screwed-2012-1#ixzz1kNGYNAjU

Unemployment Rate World Map

2011-12-08T22:18:00.001+11:00

Below is the link to the Unemployment Rate world map at IndexMundi.

http://www.indexmundi.com/map/?v=74

Money

2011-11-29T06:12:00.003+11:00

Awesome XKCD map of all money. :)

http://xkcd.com/980/

Geography of the Top 1%

2011-11-29T06:12:00.001+11:00

In line with the "we're the 99%" movement, here is an interesting article with maps from the IRS, on geography of the "top 1%" of income earners in the US.

http://www.theatlanticcities.com/jobs-and-economy/2011/10/where-one-percent-live/393/

Rich-o-meter

2011-11-24T03:20:00.001+11:00

Rate yourself on rich-o-meter and see in which percentile of the world population you fall into:

http://blogs.wsj.com/wealth/2007/02/01/rich-o-meter-20/

Quicken 2012 Manual Updates

2011-11-14T04:11:00.001+11:00

Since Quicken 2012 has been available for a while, here is the link for manual download of updates:

http://quicken.intuit.com/support/help/patching/quicken-2012-manual-updates/GEN83594.html

Metric Mash

2011-09-08T18:04:00.001+10:00

At Metric Mash, you can access various public data sources and create your own charts.

http://www.metricmash.com/

S&P Downgrades United States

2011-08-07T18:41:00.001+10:00

(Reuters) - The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday, a move that will affect the country's borrowing costs and investor opinion of U.S. assets. Here is a Q+A on what the downgrade means for investors, consumers and to the country.

http://www.reuters.com/article/2011/08/07/us-usa-rating-sp-idUSTRE7760I520110807

Show One Amount Column in Quicken

2011-07-02T08:55:00.001+10:00

Quicken (2011) will, by default, display incoming and outgoing transaction amounts in separate columns. This might be convenient for accountant-types but sometimes the screen realestate is not plentiful and we might just want to see one amount column with sign '-' for negative numbers. And preferrably different color.

Fortunately, the new Quicken column options offer this possibility.

There are columns for Deposit and Payment, but also Amount. Simply untick the Deposit and Payment columns and tick the Amount column. The column names are different for different types of accounts but they can be easily located by checking what the actual column titles are in the register.

The drawback here is that values cannot be typed directly into the Amount column. Fortunately, this is where quick switch between 1- and 2-column layout comes in handy. CTRL+2 is the shortcut key for switching to 2-column display, which can have separate Payment and Deposit columns for entering transactions. Then, pressing the hotkey again will switch to 1-column display that could have only the Amount field and more transactions listed, which provides a great overview of the recent account activity.

Currency Effect on International Investing

2011-06-20T21:59:00.001+10:00

A great overview of relation between currency exchange rates and investment performance in international arena. This is noteworthy, considering current performance of Australian Dollar.

http://internationalinvest.about.com/od/gettingstarted/a/currencyeffect.htm

Taxation and Investment in Australia 2011

2011-06-20T11:16:00.001+10:00

Deloitte's publication on taxation and investment in Australia in 2011:

http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Tax/Intl%20Tax%20and%20Business%20Guides/2011/dtt_tax_guide_2011_Australia.pdf

Taxation Guide for Investors in Australia

2011-06-20T11:15:00.001+10:00

General Taxation Arrangements section of the Taxation Guide for Investors, published by the Department of Resources, Energy and Tourism, contains useful definitions of Dividend Imputation and Dividend Witholding Tax Exemption for Foreign Source Dividend Income.

http://www.ret.gov.au/resources/Documents/Minerals%20and%20Petroleum%20Exploration/Guide_for_%20Investors_18Taxation.pdf

Australian Equities - Tax Issues for Individual Investors

2011-06-20T11:11:00.001+10:00

A paper that describes the Australian taxation system for investors, both resident and non-resident; the effect of franking credits on Australian equities, and compares it to the environment in the US and UK.

Australian Equities - Tax Issues for Individual Investors

http://www.winstonprivate.com.au/pdf/wp_australian_equities.pdf

Australian Fixed Interest Education

2011-06-20T10:15:00.002+10:00

Here are few useful links on (fixed) interest rate securities on ASX. Fixed interest securities are available on Australian Stock Exchange and the texts below summarize what is available and then describe the basic characteristics of each type of security.

Understanding ASX Interest Rate Securities (link)
Corporate bonds/notes (link)

More resources at the Interest Rate Securities page on ASX (link).

Australian Manufacturing is Disappearing

2011-06-20T09:25:00.001+10:00

A few interesting details on the stats for the Australian manufacturing industry.

Since 1990, manufacturing's share of Victorian gross state product has fallen from 16 per cent to 10 per cent and that decline is increasing. According to a paper sponsored by Visy, that will mean the loss of some 587,000 jobs in the next decade, 27 per cent of state household income and 24 per cent of state income.
Nationwide, manufacturing's share of income has declined from 15 to 8 per cent over the same period.

The practical effects are someting along the lines of

Infrastructure needs, and just what needs to be done to support the mining sector, will be part of the study, which will look at how tertiary education can be directed more at mining service sectors. In short, more IT and engineers and fewer lawyers.

Source:

http://www.theaustralian.com.au/business/opinion/national-broadband-network-is-an-industry-game-changer/story-e6frg9if-1226077373546

Residents and Foreign Residents - Taxation Australia

2011-06-15T22:20:00.001+10:00

Australian Taxation Office contains a text that illustrates several different edge situations, where it might not be clear whether a person is a resident for taxation purposes or not. It is a good reference, as I was not sure what my status would be in the next couple of months. From these guides, it appears I will still be Australian resident for tax purposes even though the travelling might be for an extended period of time.

Examples of residents and foreign residents

On booms, busts and investor psychology

2011-05-08T18:32:00.001+10:00

There is a great article by Dr. Shane Oliver on booms, busts and investor psychology where he explains how the psychology affects the boom and bust cycles of the markets. This is just a rehearsal of the same ideas that were so painfully demonstrated during the GFC.

Reading article like this simply reinforces the ideas represented on this blog. Have in mind your long-term investment strategy (if investing for the long term, that is).

Booms, busts and investor psychology (link)

GDP Chart(s)

2011-05-05T15:33:00.001+10:00

Google (as usual) has an awesome service to display publicly available data. This time the data comes from World Bank and represents World Development Indicators or the GDP of world's countries.

I've selected a few to compare the world index, Australia, and India and China, then added Bosnia and Herzegovina. These are some interesting charts!

Link

New Vanguard ETFs

2011-05-01T01:26:00.001+10:00

Vanguard Australia is to add additional ETFs to their current offer. The new funds will track market sectors, including small companies, large-cap stocks and high-yield equities.

Source: http://www.morningstar.com.au/etfs/article/vanguard-to-offer-new-etfs/3352

"Endgame: The End of the Debt SuperCycle and How It Changes Everything"

2011-04-30T19:09:00.001+10:00

In The Endgame Headwinds (link), John Mauldin, touches on important issues facing the Western world in the next multi-year period. It is a very worthy read.

There are lots of references to the issues further explained in his recently-published book. The excerpts from the book "Endgame: The End of the Debt SuperCycle and How It Changes Everything", by John Mauldin, Jonathan Tepper, is available for preview on Google Books.

Google Books link

Some great quotes from the text are below:

"There are only two ways to grow an economy. Just two. You can increase the working-age population or you can increase productivity. That’s it. No secret sauce."

Golden Rules

2011-04-27T19:55:00.001+10:00

Herald Sun has a nice compilation of top investment tips from several well-established investors and fund managers. Read here.

Inflation

2011-04-21T08:43:00.001+10:00

Collin Twiggs, in his market commentary "No such thing as free lunch", explains the roots and causes for increase in the money supply in the market and its effects.

This explains the current moment, where bonds are being sold off, the inflation is at the door, and the prices of real assets, like stocks and commodities, are going through the roof.

link

Unemployment starts to drop in EU

2011-04-03T13:38:00.001+10:00

BBC, April 1, 2011 - The unemployment in the Euro zone has started to fall. Positive version of the same statement would be that the employment is on the rise. This is a very good sign. It has taken a while for the EU economies to catch up on the recovery but it is finally happening.

Have in mind that the stats differ wildly by country. Some countries are well into double-digit unemployment while others are in the range of natural unemployment (around 4%).

http://www.bbc.co.uk/news/business-12934941

Tax the Super-Rich

2011-04-02T12:01:00.001+11:00

Here's a really interesting article on the 'Super-Rich Delusion' and the consequences for the society:

http://www.marketwatch.com/story/tax-the-super-rich-now-or-face-a-revolution-2011-03-29

AUD Forecasts for 2011

2011-04-02T11:47:00.001+11:00

There is an overview of the forecasts and conditions affecting the position of the Australian Dollar this year. While the Australian economy is strong and the comodity prices have gone up on one hand, rate rises are expected in the Northern hemisphere on the other.

http://www.theage.com.au/business/top-dollar-forecast-for-australian-currency-20110401-1crqm.html

Extremely Good Signs for the Labor Market

2011-03-30T21:56:00.000+11:00

The recent high growth in company profits points that the job market in the US is to improve significantly.

"... economy-wide corporate profits rose 9.7% annualized in Q4 2010, which was roughly twice what we were expecting. Since the recession ended, profits have grown at a sturdy 27% annualized pace."
and
"... profits per private sector employee are at an all-time high-well above their pre-recession peak."

The correlation is usually two quarters apart so mid-2011 should mark a hot labor market.

Source: http://www.businessinsider.com/corporate-profits-vs-labor-market-2011-3

Hedging in AUD

2011-03-25T19:44:00.001+11:00

Here is another tip for investing overseas in local currency. In this case it is Australian Dollar but tips work for any currency. There are times the currency is high, compared to other currencies, and this happens often with Australian Dollar because it is closely related to the price of commodities, mostly mining ore.

During these periods it is a good idea to buy units in funds that invest in international shares, unhedged. This way we are using the high position of AUD to buy more units in local currencies.

When times change and AUD is low, relative to other currencies, the opposite applies. Buying units in funds that are hedged for AUD variations provides more value. This way, when AUD goes up again the price of the fund portfolio will grow automatically with the currency.

More on Inequality in the USA

2011-02-24T19:58:00.001+11:00

Here is a continuation of the previous post, with more insight and analysis in the inequality that is rapidly increasing in the United States.

http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

American Opinion on Income Inequality

2011-02-23T20:58:00.001+11:00

Here's a very interesting view of the world. Distorted, as usual.

Original post here.

Fee-Free Credit Card in Sweden

2011-01-20T13:01:00.001+11:00

I'm currently looking into the banking system in Sweden and it is a nice surprise to find a fee-free credit card on the first go. Wikipedia has a list of banks in Sweden. The only bank with non-Swedish name is GE Money. This was particularly interesting since I am aware of their great credit card products in Australia. One of the best travellers' credit cards has recently been renamed to 28 Degrees. There are no membership fees or surcharges for money withdrawal overseas.

So, in good tradition, GE Money Sweden happens to have a great credit card on offer, as well. There is no membership fee nor currency fees for funds withdrawal abroad. Apparently, quite a few banks in Sweden do not charge for funds withdrawal in the EU, which is great. And, apart from that, there is 60 days interest-free period for the card.

Financial Crisis over in Sweden

2011-01-20T12:38:00.001+11:00

According to the Nordic financial services group Nordea, the financial crisis is over in Sweden. Economic growth is forecasted for 2011 and 2012. Other metrics is to follow - unemployment is set to fall, inflation to rise, etc.

source: The Local

Quicken 2011 Manual Updates

2010-11-07T18:45:00.001+11:00

Instructions on how to manually update the new Quicken 2011 are here. The page lists what the latest version of the Quicken patch is so you can check manually. The link to the latest patch is provided, as usual.

Quicken Inner Circle

2010-10-30T13:47:00.000+11:00

Quicken Inner Circle (link) - is a site for feedback on Quicken product. The latest news can be found there and one can submit feedback and ideas regarding Quicken products.

Quicken 2010 Manual Updates - Quicken® Support

2010-07-28T22:27:00.000+10:00

The link to update downloads for Quicken 2010:

Quicken 2010 Manual Updates - Quicken® Support

Alan Kohler: the market's four key threats - ASX - Australian Securities Exchange

2010-07-24T13:44:00.000+10:00

Another important point from Kohler's analysis:

Housing bubble

But isn't Australia's housing market in a bubble that is destined to collapse, bringing the whole Oz of Cards down? In late June, US investment legend Jereny Grantham, co-founder of GMO, said: "You cannot possibly miss it. The price of housing typically trades about 3.5 times family income and in a bubble it goes to 6 or … 7.5 (times). Australia is having one now. You are at near 7.5 times family income … which suggests you are twice the size that you should be."

Alan Kohler: the market's four key threats - ASX - Australian Securities Exchange

2010-07-24T13:36:00.000+10:00

America is just one of us, now...

Alan Kohler: the market's four key threats - ASX - Australian Securities Exchange

"Over the final weekend in June, the G20 leaders, including President Obama, agreed to halve their budget deficits by 2013. That confirms the end of fiscal stimulus and the beginning of an era of fiscal tightening. That goes double for states such as California and Illinois, which are just about broke.

According to the Center on Budget and Policy Priorities, 46 states have budget deficits that add up to US$112 billion; basically they are in the same mess as Greece.

The Federal Reserve cannot cut interest rates any more, so if there is a problem, the US economy is on its own. And, Houston, there is a problem. Employment growth is weakening, durable goods orders fell more than expected in late June, the ISM manufacturing index is falling, and capital expenditure is down.

But most of all, housing is in trouble. New-home sales crashed 30 per cent in May to a record low and the median price fell 1 per cent that month to US$200,900 - and is now down 10 per cent on a year ago. The median price has not been this low since December 2003. It is taking builders a record 14.2 months to sell a house."

Gloomy Forecasts for Russia

2010-05-29T12:50:00.000+10:00

From John Mauldin's newsletter:

"Russia is facing a very serious problem over the next 20 years that will require either a significant increase in productivity or large immigration to stave off a collapsing economy. Russia's population has declined by almost 7 million in the last 19 years to 142 million. UN estimates are that it may shrink by about a third in the next 40 years. "

Crisis in Serbia “Statistically and Formally” Over :: BalkanInsight.com

2010-05-22T13:14:00.000+10:00

Crisis in Serbia “Statistically and Formally” Over :: BalkanInsight.com

Positive economic forecast from Serbia.

Croatia Unemployment Drops by 0.5% in April :: BalkanInsight.com

2010-05-22T13:00:00.000+10:00

Croatia Unemployment Drops by 0.5% in April :: BalkanInsight.com

Some more good news from the Balkan states.

Roubini Global Economics - RGE Monitor -- Europe EconoMonitor

2010-04-24T14:43:00.000+10:00

Roubini Global Economics - RGE Monitor -- Europe EconoMonitor

Some positive news from Easten Europe.

Term deposit investment strategies from RaboPlus Australia

2010-04-11T00:50:00.000+10:00

Term deposit investment strategies from RaboPlus Australia

RaboPlus has a nice section on term deposits on their web site. If you are considering investing in term deposits, read the 'laddering' strategy description on the page linked above.

The interest rate rise in Australia is attracting more investors as of late but so are probably other asset classes.

Saturation Point? Google Furniture Index

2010-03-28T11:15:00.000+11:00

Google Furniture Index - Google Finance

If you look at the link above, you may notice the downward trend in almost any area. Considering that the population continues to grow, one would expect a slow increase in demand from year to year. However, the trend from 2004 to 2010 is a downward one. That is a bit paradoxical and begs for the question - are we reaching the saturation point?

I would be glad if we were. That would mean we were to slowly get out of the consumerism age. Hopefully, what comes next is better for all of us.

Slow Economic Growth Likely for Region in 2010 :: BalkanInsight.com

2010-03-04T23:08:00.000+11:00

Slow Economic Growth Likely for Region in 2010 :: BalkanInsight.com

Finally some positive signs in the economies of South-Eastern Europe. Fingers crossed.

Easy labels mask the complexity of growing up gen Y - Investment News

2010-01-29T11:34:00.000+11:00

Easy labels mask the complexity of growing up gen Y - Investment News

After the Global Financial Crisis and the recession (well, some countries technically haven't experienced it) I find a few topics interesting enough to write about. The markets have rebounded but the long-term performance is still under a question mark. The income returns have been poor unless you were a risk taker and extremely lucky to buy at the right time and reap the rewards.

However, the world is changing and there are some signs and thoughts as to where it is going. The article above portrays an era of Generation Y in Australia. Those times may have gone for good and, as the article concludes, it may be exciting to learn how to live a different lifestyle.

Bailout Hearings

2010-01-15T17:06:00.001+11:00

The bailout hearings have started in the US. About time and on topic! Thorough examination is more than welcome as the price of the bailouts is enormous and the question is whether the public should be paying for it.

These are hard moral questions and it is interesting to watch how they proceed.

No Good Options Left - John Mauldin

2009-11-07T19:04:00.002+11:00

The current situation in the largest world economy can well be summarized in the way John Mauldin did his latest newsletter. The conclusion is that there are no good options left and whether the path from here is controlled (evolution) or left to market (revolution) is the only question. An excellent read.

Like teenagers, we as a US polity have made a number of bad choices over the past decade. We allowed banks to overleverage and, in the case of AIG (and others), sell what were essentially naked call options of credit default swaps, based on their firm balance sheets, far in excess of their net worth; and that put our entire financial system at risk. We gave mortgages to people who could not pay them, and did so in such large amounts that we again brought down the entire world financial system to the point that only with staggering amounts of taxpayer money was it brought back from the brink of Armageddon. We assumed that home prices were not in a bubble but were a permanent fixture of ever-rising value, and we borrowed against our homes to finance what seemed like the perfect lifestyle. We did not regulate the mortgage markets. We ran large and growing government deficits. We did not save enough. We allowed rating agencies to degrade their ratings to a point where they no longer meant anything. The list is much longer, but you get the idea.
Now, we are faced with a continuing crisis and the aftermath of multiple bubbles bursting. We are left with a massive government deficit and growing public debt, record unemployment, and consumers who are desperately trying to repair their balance sheets.
If present trends are left unchecked, we will need to find $15 trillion in the next ten years, just to pay for US government debt, let alone state, county, and city debt. And perhaps some loans for business will be needed? Where can all this money come from? The answer is that it can't be found. Long before we get to 2019 there will be an upheaval in the market, forcing what could be unpleasant changes.

RBA Lifts Rate to 3.5%

2009-11-03T15:51:00.001+11:00

Today's RBA decision was for another base point (0.25%) raise. The official cash rate in Australia is now 3.5%.
RBA lifts cash rate by 25bps to 3.5% - News - Business Spectator

Double-dip recession unlikely: ECB's Weber

2009-10-23T08:47:00.001+11:00

A member of the governing council of the European Central Bank said that it is unlikely that the Euro zone will fall back into recession soon after exiting it. He added that there are elements pointing that the double-dip recession is not likely to happen in other major economies, either.
So it seems not only the economy is out of the woods for now but there is no immediate danger of falling back into recession in the short to medium term.

Double-dip recession unlikely: ECB's Weber - News - Business Spectator

OneDirect High Interest Saver Discontinued

2009-10-20T12:13:00.001+11:00

OneDirect has discontinued their High Interest Saver account. Any remaining funds in the account will be transferred to the linked transactional account.

Lost Hopes

2009-10-19T15:50:00.001+11:00

It is interesting to look back... In 2008, and a bit earlier, it was very popular to read and/or write a blog on finance. It was the time of boom, money was plentiful, and whatever you did, it only seemed possible to make money. Gearing additionally boosted already astronomical gains. Not too many were even remotely aware of what was at risk.
During that time I read a few interesting blogs, checking advice and reviews of different options. Fortunately, I never invested into things I did not understand or that sounded too much like sales pitch and no substance. And I was never a fan of astronomical gains as something always was fishy about those.
Now, looking back at one of those blogs... The person who writes it became a millionaire in 2007 or 2008. Investing, gearing, property, etc. It was all fabulous. One would expect to take advice from such a person as they had "done it". Their success was there to prove whatever they did was right. With a grain of salt, of course.
Today, one of those blogs contains the following sub-title:

I lost half a million dollars on the stock market in just twelve months! Learn how you, too can become an ex-millionaire with almost no effort!

Enough said, I think.
On the positive side - this is the typical market index loss for 2008. Staying invested will likely help. Only the ones who moved out of the market, and failed to enter back soon after February 2009, have actually lost their wealth. Most of it was inflated before 2008, anyway. Good luck and be careful what you trust.

Weak Recovery for Balkans only in 2010

2009-10-19T15:32:00.001+11:00

According to the European Bank for Reconstruction and Development (EBRD), Balkan economies will further shrink in 2009, albeit at a slower pace. A weak recovery is expected only in 2010. However, the full consequences of the crisis are to be felt only next year as corporate bankruptcies continue and lending conditions continue to be constrained as foreign banks continue to shrink their asset exposure in the region.

Balkan Economies: Fragile Recovery in 2010 :: BalkanInsight.com

World Economic Forum's 2009 Financial Development Report

2009-10-12T19:09:00.001+11:00

From RGE newsletter... Australia is 2nd on the world's Financial Development Index.

World Economic Forum's 2009 Financial Development Report: UK Comes First

On October 8, 2009, the World Economic Forum launched its second Financial Development Index, a rigorous, comprehensive analysis of financial systems and capital markets in 55 countries that analyzes key drivers of financial system development and economic growth in developing and developed countries. The research was led by Dr. Nouriel Roubini. Global financial centers continue to top the index, yet financial instability affected them adversely pulling down their scores relative to the 2008 report. The UK, aided by the relative strength of its banking and non-banking financial activities, claimed the index’s top spot from the U.S., which fell to the third position following Australia on account of lower financial stability scores and a weakened banking sector.

U instead of W?

2009-10-10T10:20:00.001+11:00

Nouriel Roubini has adjusted his conclusions. Instead of W-shaped recovery, this (now) should be an U-shaped one. The news keep surprising for the better. That's why it's called a recovery, after all.

In Thoughts on Where We Are,
Nouriel clarifies the growth scenarios that make the U-shaped recovery
more likely and discusses why it is unlikely that the Fed will raise
rates any time soon.

RBA Lifts Rate to 3.25%

2009-10-06T15:00:00.001+11:00

As some analysts expected and predicted, Reserve Bank of Australia lifted the official cash rate from 3% to 3.25%. As hinted earlier, 3% was an emergency rate and it was about time for it to change.
RBA lifts cash rate to 3.25% - News - Business Spectator

Anglo-American Crisis and European Recovery

2009-09-26T09:25:00.002+10:00

Another great analysis and comparison between the economic realities of UK/USA vs Europe (Germany/France). Differences in economic base caused this crisis to affect mostly US and UK. European economies were not that affected and are likely to recover sooner.
A valuable read.

RGE - We Shouldn’t be Surprised by Signs of an Early European Recovery

The Roots of the Next Downturn

2009-09-26T09:14:00.001+10:00

Robert Reich, from RGE, is analyzing the discrepancy between the stock market charts and the situation in the economy in real life. Consumer spending in USA is down to 60-65% but the government is covering for the rest, hence the jump in the economic activity and the markets. When (or if) this dries up there will be nothing holding the market indices, which may reach new lows. This is what some are predicting - a correction. But with an unknown scope.

RGE - Why the Dow is Hitting 10,000 even when Consumers Can't Buy and Business Cries "Socialism"

Salaries Survey - Bosnia, Croatia, Serbia, Slovenia

2009-09-21T17:19:00.001+10:00

An interesting conclusions from a survey in Serbia, Bosnia, Croatia, and Slovenia. Food prices are the highest in a country that has the most agricultural industry in the surveyed group! Balkan paradox, as usual.
On the positive side, the average salaries edge higher, showing an improvement in standard of living.

Serbia Has Lowest Surveyed Salaries :: BalkanInsight.com

According to Eurostat, some food prices in Serbia are amongst the highest in the region, and are even higher than average prices in the EU.

Nonetheless, Eurostat, which monitors 36 countries, reported last month that only prices in Bulgaria, Albania and Bosnia and Herzegovina are lower than in Serbia.

Recession is over

2009-09-18T10:59:00.001+10:00

Officials in the US called it the end of recession. Most common people still believe we are in recession. Probably because we are all humans and we still feel the bruising from the last year's crash. The unemployment is still on the rise. So, yes, it still might feel like a recession bit it is over, finally.
The recovery, however, is expected next year...

GENEVA - Global
investors are expected to scale back their activities almost 30 per
cent overall in 2009, but a recovery should begin "slowly" next year,
the UN's trade development mission says.

ASX at 4600

2009-09-11T16:46:00.001+10:00

ASX All Ordinaries index has reached 4600. A few months back this seemed incredibly high and out of reach.

Investing in Gold in Australia

2009-09-11T11:54:00.001+10:00

One of the easiest ways to invest in gold in Australia must be purchasing GOLD shares on ASX. This is a trust (or an ETF, if you want) that provides exposure to the price of Gold in the world commodity markets.
As listed on ASX:

Gold Bullion Securities (GOLD)
The development of Gold Bullion Securities (ASX code GOLD) has been a joint initiative between Gold Bullion Limited and the World Gold Council. A GOLD security consists of a gold bullion share of nominal value and a beneficial interest in approximately 1/10th of one fine troy ounce of gold bullion held on trust for the holder of the security.

The gold is held in London vaults by a custodian. A trust deed establishes a separate trust for each holder of GOLD so that the holder is absolutely entitled to the gold bullion held in the vaults. Each time a holder transfers GOLD to a new holder, the beneficial interest in the gold bullion automatically transfers to the new holder.

Investors can buy GOLD securities on ASX or, if they have a minimum of $500,000 to invest, they can apply for new GOLD securities from Gold Bullion Limited. Likewise holders of GOLD securities can sell them on market, or (subject to certain conditions and fees applying) they may redeem them at any time for cash or in exchange for London Good Delivery bars.

Investors wishing to invest in the securities should familiarise themselves with full details of the investment contained in the prospectus issued by Gold Bullion Limited, including fees and conditions applying and the risk factors involved.
Prospective investors should also seek independent professional advice before making a decision to invest.

Gold Bullion Securities listed on ASX - Prospectus information

The only way is up?

2009-09-10T09:22:00.001+10:00

Market analysis from Shane Oliver, "Sharemarket earnings & valuations post reporting season, 1/09/2009". The conclusion is that we are now in an upward moving market and there is much more left to go.

Strange how, all of a sudden, all the graphs and analysis show how the correction was not as bad and that there is a strong growth potential.

Expert Articles

Recovery Sooner than Expected?

2009-09-09T10:37:00.001+10:00

Well, nothing new, obviously. I'd even say this was expected - that the recovery is to come sooner than expected. Good news, anyway.

ROME - A
recovery of the world economy might occur three months earlier than had
been expected, at the beginning of next year, the head of the IMF said
on Tuesday.

Bosnian Residential Real Estate Summary

2009-09-08T19:06:00.001+10:00

Residential properties prices in Bosnia have fallen about 20% from Summer 2008 to January 2009. Further decline in prices was expected. It would be interesting to find a more recent summary and see whether the expectations were met.
The main reason for price drop is financing difficulties. The loan conditions have been stepped up by the banks and the interest rates raised.

Nekretnine365.com - Magazin o nekretninama - Cijene stanova u BiH vrtoglavo padaju!

More good news on global economic outlook

2009-09-04T16:49:00.001+10:00

From RGE:

Global Economic Outlook: Is a Recovery in Sight?

According to the September 2009 report, the OECD now expects that
the global economic recovery will start earlier than previously
anticipated but growth will remain weak through 2010. The G7 is
expected to contract 3.7% in 2009 (better than the 4.1% contraction
expected in June 2009), based on an improved outlook in Japan and the
Euro area, a similar outlook for the U.S. and worse for the UK while
Canada will continue to experience negative growth until Q4 2009.
Emerging markets that had little exposure to the financial meltdown
like China have significant economic momentum.

Australia on the way out of recession?

2009-09-04T08:59:00.001+10:00

RGE reports...

Is Australia Approaching Escape Velocity Out of Recession?

Australia extended its rebound with a 0.6% q/q, 0.6% y/y GDP growth
(seasonally adjusted) in Q2 2009, after missing a technical recession
by a hair (0.4% q/q, 0.4% y/y) in Q1 2009. This time, however, net exports declined and the country is still effectively in a recession, with unemployment rising, corporate profits
sliding (-7.8% q/q in Q2), GDP growth well below potential for the
fifth consecutive quarter, and income GDP down 1.5% q/q. Going forward,
the economic recovery will most likely remain muted by private sector deleveraging.

Global Manufacturing Expanding

2009-09-02T16:46:00.001+10:00

RGE writes...

Global Manufacturing Now Expanding

Manufacturing surveys suggest that global manufacturing activity
began expanding in August 2009 after climbing for many months due to
stimulus and inventory adjustment. Purchasing Managers Indexes from
some advanced economies like Japan rose above the 50 threshold in July indicating expansion, joining some emerging markets like China, India and Turkey which had risen above those levels earlier. The U.S., France and Brazil finally moved into expansion territory in August while the UK slipped back into overall contraction and countries in emerging Europe and Russia remain below the 50 threshold.

What are Bonds?

2009-09-02T13:45:00.001+10:00

A brief and to-the-point article on Vanguard about bonds - what they are and how they work. Excellent article.

Market Update | Finance News & Commentary | Vanguard Investments Australia

ASX All Ordinaries past 4500

2009-09-01T16:42:00.001+10:00

The Australian All Ordinaries index has passed the 4500 mark.

Australia - Stock Market Charts

Targeting stocks for income of 8% or more

2009-08-30T14:03:00.001+10:00

There is an article at TheBull.com.au analyzing and listing a small portfolio of shares that yield 8% or more in dividend income.

STOCK	SHARE PRICE (3/8/09)	FORECAST DPS 09/10	FORECAST DIVIDEND YIELD % (09/10)	GROSSED UP YIELD % (09/10)
Westpac Bank	$22.10	$1.15	5.7	8.1
Commonwealth Bank	$43.65	$2.25	5.8	8.2
Telstra Corporation	$3.52	$0.25	7.4	10.5
Corporate Express	$3.81	$0.26	7	10
QBE Insurance	$19.61	$1.25	6.3	7.1
Westfield Group	$11.70	$0.93	8.2	8.2
Tabcorp Holdings	$24.95	$0.55	7.7	11
West Aust. Newspapers	$6.00	$0.35	8	11.4

TheBull.com.au

Interactive Index Chart

2009-08-19T19:51:00.001+10:00

Vanguard has updated the Interactive Index Chart on 30th of June 2009. It is interesting to look at the long-term returns, putting the global financial crisis into perspective.
It is very interesting to see how cash holds on well in Australia.

Interactive Index Chart | Indexing | Knowledge Centre | Vanguard Investments Australia

The end of recession in Europe?!

2009-08-14T11:01:00.001+10:00

LONDON -
European stock markets advanced, with London reaching a 10-month high,
after data showing an end to recession in France and Germany and better
than expected results for the Eurozone.

Exemplary Conduct

2009-08-08T09:53:00.001+10:00

It is really encouraging to see people who have achieved a lot not practicing the greed by trying to amass more and more for no apparent reason. Warren Buffett, for example, receives a $100,000 salary for his work. Considering he is the best known investor, managing billions of dollars in funds, this does not seem much.
The next one is listed below. Eric Schmidt receives $1 annual salary for his work at Google.
Naturally, all these people have enough wealth to get them trough (and much more than that, probably) and the social effects of their decisions not to receive excessive remuneration are very positive and encouraging.

Google CEO Eric Schmidt Accepted No Salary or Stock for Apple Board Service - Mac Rumors

EURAUD Below 1.70

2009-08-08T09:09:00.001+10:00

The EURAUD exchange rate broke back through the 1.70 level into the long-term trading range.
Australia - Currency

UBank Launches USaver

2009-08-08T07:40:00.001+10:00

UBank, an Australian bank that had great rates on term deposits, has launched USaver - an online savings account. Currently, with the rate of 5.11% p.a., it is the highest paying savings account in Australia I know of.
USaver - UBank - A good place for money. Backed by NAB

Upswing; Investment Cycle Chart

2009-08-05T15:27:00.001+10:00

At Oliver's Insights, today, you can read more arguments about the economic cycle being on the rebound. I will leave the power of arguments to the experts. However, remember that all the experts were there during the downturn, as well. Not too many got it right, though.
Link to the article: From bear to bull - the cyclical upswing in shares (Expert Articles).

One useful graph from the article portrays the economic/investment cycle:

Bull Market?!

2009-08-05T12:27:00.001+10:00

After a horrible year (2008) for investments, everything seems a thing of the past nowadays. Not only we see discussions about the end of the recession and the market crash, there are now discussions on whether we have entered the new cyclical bull market.
Smart Investing with Robin Bowerman | Financial News & Commentary | Vanguard Investments Australia

Microsoft Money Discontinued

2009-08-01T10:28:00.001+10:00

Microsoft made an announcement in June that they will discontinue Microsoft Money as of June 30, 2009. This pretty much leaves Quicken as the only decent money management desktop tool out there.
Announcement: Open Letter to MS Money Customers - Official Quicken® Blog

ASX at 4200

2009-07-30T15:58:00.001+10:00

Wow, this has been an amazing ride up so far. The Australian market is at 4200 for both ASX All Ordinaries and ASX 200. I remember last time I wrote this heading the market charts were on the slide down and there was a brief touch during the US presidential elections. Well, it’s encouraging to see it back to this important level. Hope it stays that way in the coming months.

Entrecard has been Sold

2009-07-17T20:08:00.001+10:00

Entrecard, a blogging community and a network with innovative advertising concept, has been sold by its founder Graham Langdon to Los Angeles based ZipRunner Inc.

State of Michael Jackson’s Finances

2009-07-15T12:44:00.001+10:00

In an interesting article, available at Vanguard’s site, Jackson’s personal investment commentator James Stewart writes about the state of recently deceased pop celebrity. Although he earned hundreds of millions throughout his career and made good business decisions, earning assets now worth billions, his financial position at the time of his death was $500 millions in debt. This situation even made him rehearse going back to work in order to repay some of that debt. Interesting read.

Celebrity finance – lessons for all of us

$1 Australia 200 micro contract

2009-07-08T15:55:00.001+10:00

IG Markets has just started offering a $1 micro contract size on Australia 200 market index. There are no fees on index contracts, making the total provision on trading this index at 2 points spread.
Finally a decent trading experience for beginners like me!

e-tax 2009 is out

2009-07-06T10:34:00.000+10:00

eTax 2009 from the Australian Tax Office (ATO) is available for download from their web site.
More information on e-tax is available at E-tax essentials, while the download link is here.

The end of the crisis

2009-07-04T09:12:00.001+10:00

RGE - Dr. Doom Has Some Good News

Nouriel Roubini, the New York University economist who accurately forecast the bursting of the housing bubble and the resulting economic contraction, has become famous for his pessimism—he has been the gloomiest of the doomsayers. Which is what makes his current outlook surprising: Roubini believes that the Obama administration’s policy makers—and especially the much-maligned Tim Geithner—have gotten a lot right. Pitfalls may still abound, but he is now projecting an end to the recession, and he sees growth ahead.

This, to me, definitely marks the end (R.I.P.) of the global financial crisis. Hopefully, we will not see anything like this during our lifetime again. This was my first experience in the markets (started in Australia in January 2009) and it has not been a pleasant one. Hopefully it gets better from now on.

DownUnder Dogs

2009-06-24T23:02:00.000+10:00

The list of stocks with the highest dividend yields among the largest 50
companies on the Australian Stock Exchange.

AFR Smart Investor

Australia - Index Funds

2009-06-16T11:01:00.001+10:00

Added the link to SPDRs funds’ online share registry.

Australia - Index Funds

G8 Meeting: Focusing on Exit Strategies and a New Regulatory Framework

2009-06-16T10:47:00.001+10:00

Source: RGE

G8 finance ministers' meeting on June 12-13 in Lecce, Italy focused on "exit strategies", plans for unwinding the fiscal and monetary stimulus extended in recent months as well as introducing a new set of common principles of international business conduct ' the Lecce framework'. The IMF, which will help on exit strategies, reportedly scaled up its forecast for 2010 growth to 2.4% from 1.9% previously

Communique of ministers: There are signs of stabilization, including a recovery of stock markets, a decline in interest rate spreads, improved business and consumer confidence, but the situation remains uncertain and significant risks remain to economic and financial stability

Zakaria: A Capitalist Manifesto | Newsweek Business | Newsweek.com

2009-06-15T11:22:00.001+10:00

An excellent article in the aftermath of the financial and economic crisis. The article hints at the change taking place in the world. Globalization and the effects to nations and countries. What we have are the growing pains of the globalized world. The following paragraph has a particularly striking note.

The failure of self-regulation over the past 20 years—in investment banking, accounting, rating agencies—has led inevitably to the rise of greater government regulation. This marks an important change in the Anglo-American world, away from informal rules often enforced by private actors toward the more formal bureaucratic system common in continental Europe. Perhaps the state should not set the pay of the private sector. But surely CEOs should exercise some judgment about their own compensation, and tie it far more closely to the long-term health of the company. It will still be possible to get very rich—Warren Buffett, after all, draws a salary of only $100,000.

Emphasis mine.

Zakaria: A Capitalist Manifesto | Newsweek Business | Newsweek.com

Dow Theory – Trends

2009-06-10T09:26:00.001+10:00

There is a good summary of Dow theory about trends at Incredible Charts. Here are the basics.

Bull Trend:

Bull Trend Start and End:

Bear Trend:

Bear Trend Start and End:

More at Dow Theroy – Trends page at IncredibleCharts.

Business Spectator - World to emerge from crisis in early 2010, IMF chief

2009-05-31T11:49:00.001+10:00

A confirmation on timing from IMF:

We expect to get out of the crisis early in 2010, especially if a clean-up of certain segments of the financial system is carried out," IMF managing director Dominique Strauss-Kahn told a conference in Morocco.

Speaking later in a panel discussion, Mr Strauss-Kahn said signs that the effects weighing down the global economy were easing would become clearer in September and October this year, with growth returning early in 2010.

As suggested elsewhere, markets tend to bottom-out six to nine months before the real economy.

Business Spectator - World to emerge from crisis in early 2010, IMF chief

Personal Foreign Exchange - XYLO

2009-05-25T10:10:00.001+10:00

Just found another option for foreign exchange and international transfers.

Xylo (link) offers direct debit facility, competitive exchange rates, and charges $5 per international transfer. Xylo is a division of Westpac Banking Corporation.

Personal Foreign Exchange - XYLO

Business Spectator - This rally is all bull - Alan Kohler

2009-05-21T23:22:00.001+10:00

More and more economic analysts call the bottom retrospectively, to have happened early March. Eureka Report’s panel of economists states, with 9 analysts out of 10, that market has bottomed out in the first week of March. Most now agree that we have seen the worst. Excluding further disasters, the market indices should not go lower than levels reached two and a half months ago. It is still possible, and quite likely, that market will move lower than the current levels.

This would be a typical phase 1 in the economic cycle. See the phases shown graphically - here. I believe everyone is now expecting to see a higher low, confirming that the decline has definitely ended. And not only that. The higher low would mean that growth is back in the game.

Business Spectator - This rally is all bull - Alan Kohler

Business Spectator - RBA says Aust economy will recover by Xmas

2009-05-20T10:43:00.001+10:00

Reserve Bank of Australia governor, Glenn Stevens, stated that Australian economy will start getting better by Christmas but the recovery from recession will be slow.

Treasury forecasts predict the Australian economy will grow by 4.5 per cent from 2012. But IMF staff estimates, published in The Australian, are less upbeat, forecasting a growth pace capped at three per cent between 2012 and 2014.

Treasury's prediction of a modest 2.25 per cent growth pace for 2011 was also challenged, with the IMF expecting a more modest expansion of 1.9 per cent.

It is also suggested that the RBA would not cut the rates any further as it might rather damage the fragile confidence levels than stimulate growth further.

Business Spectator - RBA says Aust economy will recover by Xmas

Aussie Back to Long-Term Range

2009-05-19T17:17:00.001+10:00

Australian Dollar has come back to its long-term trading range, compared to Euro. It is now quite close to its long-term average value of about 1.70 for 1 Euro.

The image below displays the EURAUD exchange rate in the last 10 years. Click the image to see a bigger version.

Unemployment Map – World

2009-05-13T20:20:00.001+10:00

At IndexMundi, there is a world map showing unemployment per country. Sourced from CIA World Factbook.

link

Chinese Green Shoots

2009-05-11T18:10:00.001+10:00

Many say that the global recovery will start in China and then spread elsewhere. That is where the first signs of recovery are sought and therefore the following represent surprisingly good news:

The rebound in investment and slump in exports suggest China is being pulled in two directions but there are increased signs that the stimulus package is having an effect and could lead to higher growth than previously assumed. Increasing spending to support consumption and pent-up consumer demand suggest Chinese downturn was cyclical not structural (AMP Capital)

Umoo – Virtual Trading

2009-05-11T13:37:00.001+10:00

If you are not willing to trade in the real markets but are interested in trading, there are sites on the Internet that offer virtual trading, where virtual money is used to trade but real market indices are used as benchmarks. There are often competitions involved, with winners of the game round winning certain prizes or even being offered a trader position with investment institution. Some sites that offer this kind of trading practice and entertainment are ASX and Yahoo Finance. Now I have just came across one more such site: Umoo, virtual stock trading.

Umoo is a virtual trading game where one can practice her trading skills and without the risk of losing money. The site offers real-time market data and various tools needed for stock market analysis. Using these is fun, entertaining, and educational even if you are not prepared to trade in the real stock market.

The description from the web site is:

UMOO is the leading fantasy stock trading game, offering the thrill and profit opportunity of the financial markets in a unique competitive format.
It's an alternative, virtual stock market contest where risk is minimal and the opportunity to win is real.
Traders pay a fee (buy-in) in order to enter a tournament of their choice, where they receive virtual money with which to build and cultivate virtual portfolios based on real-time stock market quotes in competitive trading tournaments.
The objective of the players is to earn the highest returns on their portfolios. Throughout the tournament, players are benchmarked against others in real-time; at the end of the tournament the winners are those with the highest returns relative to the other traders in the tournament. Winners receive cash prizes according to The payout structure of the tournament.
Real-time market data and a variety of information & research/reference tools are offered on the UMOO platform to help traders make informed dynamic decisions while trading. Real market trading tools are also offered, including limit and stop loss orders and the ability to sell short.
In sum, traders on UMOO can both develop and deploy trading skills for fun and profit.

Vanguard Launches ETFs in Australia

2009-05-08T10:28:00.001+10:00

Today, May 8, 2009, Vanguard Australia will be launching a suite of exchange traded funds (ETFs) on Australian Stock Exchange (ASX). The funds to be launched today are:

ETF	ASX code	Benchmark	Fees p.a.
Vanguard Australian Shares Index ETF	VAS	S&P/ASX 300 Index	0.27 %
Vanguard All-World ex-US Share Index ETF	VEU	FTSE All-World ex-US Index	0.25 %
Vanguard US Total Market Shares Index ETF	VTS	MSCI US Broad Market Index	0.07%

The ETFs are purchased through a standard brokerage account while standard Vanguard index funds are purchased directly from Vanguard.

Rudd Government will end the private health insurance rebate | Federal Budget 2009 | News.com.au

2009-05-08T09:56:00.001+10:00

The Government’s rebate on private health insurance payments will be waived in the new budget. However,

while the first round of tax cuts will take effect from July 1, the health insurance rebate will not be scaled back until July next year.

Rudd Government will end the private health insurance rebate | Federal Budget 2009 | News.com.au

Bosnia's Economic Outlook: IMF Agrees To 1.2 billion Euro Loan

2009-05-06T15:36:00.001+10:00

RGE announces:

May 5: Bosnia and the IMF agreed a 1.2 billion euro ($1.61 billion) deal over three years to lessen the impact of global economic crisis

IMF: Measures agreed focus on fiscal consolidation and public sector wage restraint, which, in addition to ensuring stability in the short term, will also help bring public finances on a sustainable path