WASHINGTON (AP) -- Just as the U.S. economy is making progress despite Europe's turmoil, here come two new threats.
Deep spending cuts are set to kick in if a congressional panel can't agree by Thanksgiving on how to shrink the budget deficit. And Congress may let emergency unemployment aid and a Social Security tax cut expire at year's end. Either outcome could slow growth and spook markets.
Analysts are concerned. Yet most aren't panicking.
Many say the economy and markets can withstand the blows. That's because Congress or the Federal Reserve could take other steps next year to blunt the automatic cuts and lift the economy. And investors expect so little from the congressional panel that they're unlikely to overreact if no deal is reached.
"There's no doomsday scenario in reducing government spending," said David Kelly of JP Morgan Funds.
The 12-member bipartisan panel, or supercommittee, was created in August to defuse a political standoff over raising the federal borrowing limit. It's supposed to find at least $1.2 trillion in deficit cuts by Nov. 23. If it fails, federal spending would automatically be cut by that amount over nine years, starting in 2013.
The law triggers cuts in programs prized by both parties: social services such as Medicare for Democrats, defense spending for Republicans.
The panel appears to be deadlocked.
Economists say a stalemate makes it harder for Congress to extend the Social Security tax cut and unemployment benefits. On the other hand, if the supercommittee does forge a deal, it might include an extension of those benefits. Or it could at least clear the way for an extension later.
The Social Security tax cut gave most Americans an extra $1,000 to $2,000 this year. Unemployment benefits provide about $300 a week. Most of that money quickly and directly boosts consumer spending, which drives the economy.
By contrast, an expiration of those benefits could cut growth by about three-quarters of a percentage point, economists say. Throw in other cuts, like those passed in the August debt deal, and all told, federal budget policies could subtract 1.7 percentage points from growth in 2012, according to JPMorgan Chase and Moody's Analytics.
Given the tepid economy, such a hit could be damaging.
"It would be very difficult for an economy that's doing well to digest, let alone one that's barely growing at potential," said Ryan Sweet, an economist at Moody's. "That could unwind a lot of the improvement we've seen so far."
The economy grew at an annual rate of 2.5 percent in the July-September quarter. Some analysts fear it could fall below 2 percent next year, especially if the emergency unemployment benefits and Social Security tax cuts aren't renewed.
The U.S. economy faces other threats, too — from persistently high unemployment to Europe's spreading debt crisis, which could hasten a recession.
If the automatic spending cuts take effect, the defense budget could be cut by nearly $500 billion over nine years. Some contractors are nervous.
Wes Bush, CEO of Northrop Grumman, has told analysts that the company is bracing for spending cuts.
"It's certainly going to be a more challenging environment" next year, he said.
Another wild card: Some investors fear that the supercommittee's failure would spark fresh downgrades of U.S. debt. Standard & Poor's downgraded the government's long-term debt in August. That contributed to a stock market plunge. It's possible that a deadlocked supercommittee would lead the two other major rating agencies — Fitch and Moody's — to follow suit.
Yet S&P's downgrade did little to tarnish U.S. debt. Treasury prices rose, and yields fell. Bond investors still saw Treasurys as a super-safe investment. Federal borrowing costs actually declined.
"S&P showed that when a rating agency downgrades the best-known security in the world, it has little impact," Kelly said. The market for U.S. Treasurys is so broad, accessible and transparent that ratings downgrades don't pose much threat, he noted.
Kelly said Wall Street is unlikely to panic given that expectations for the supercommittee "are so low as to be subterranean."
Even so, some traders appear to be positioning for a shock. So-called "defensive" sectors of the stock market, like healthcare companies and utilities, which tend to retain their value in a weak economy, have been outpacing the S&P 500 index as a whole.
In the past month, the economy has shown surprising strength. Reports this week showed that manufacturers are producing more goods and consumers are spending more. The number of people seeking unemployment benefits for the first time is at a seven-month low.
Still, more than once since the recession officially ended more than two years ago, the economy has displayed vigor only to stumble again. High gas and food prices and Japan's earthquake sharply slowed growth in the first half of the year. Congress' debt-ceiling fight sent consumer confidence to recession levels.
Sweet thinks there's a good chance Congress will end up extending the Social Security tax cut. Partly on that assumption, Moody's foresees 2.6 percent growth next year. For this year, analysts generally estimate less than 2 percent growth.
Lawmakers could make other policy changes next year to energize the economy. The tax cuts enacted during the Bush administration, and extended in 2010, are set to expire after 2012. Republicans will push to renew them.
Some of the automatic cuts set to kick in in 2013 could be delayed or altered. That's particularly true if the White House or either chamber of Congress changes sides in 2012.
And some economists say the automatic spending cuts could actually boost confidence a bit: They would reassure the world that the U.S. government can make progress in shrinking its deficit.
Even so, the supercommittee seems likely to fall short of its goal to help reduce the federal debt load.
And there's more pressure to come.
Priya Misra, an analyst at Bank of America Merrill Lynch, estimates that Congress will need to find $2 trillion more in cuts by August 2013 to prevent another credit downgrade.
Read More:
http://finance.yahoo.com/news/automatic-spending-cuts-threat-us-080312061.html
Jumat, 18 November 2011
Rabu, 16 November 2011
Convert your Arts and Crafts Hobby into a Business
Hobbies like arts and crafts offer a good business opportunity for those who really like spending their time creating artwork or unique craft items. With a little investment and some information on how to start an arts and crafts business, you will soon be ready to start selling your products successfully...
Each of us has a hobby, engaging in which gives us a feeling of satisfaction. Arts and crafts are a favorite hobby of many people, which also offers a lot to explore. This hobby can be and is often converted into a business that has low risk, low investment and can give a good amount of profit. Many experts recommend this idea to beginners and those looking for small business opportunities to increase their total monthly income. So, if you are starting an arts and crafts business, then here are some things to consider before you start it, and ways to work it out well.
Things to Consider Before Start-Up
If you have never been part of a business, the points given below will tell you how to start an arts and crafts business successfully.
* You need to plan the business well to avoid any situations where the investment cost is more than the profit earned, the order is delayed, or the customer is not satisfied.
* Start reading about the basics of small business management, to convert your arts and crafts hobby into a successful business.
* From the wide range of arts and crafts, you need to decide which type of products you will be selling.
* Make a list of easy crafts to make and sell and find out which items have the maximum demand among your target customers.
* In order to make your business score more among your competitors, try to have a set of products not sold by others.
* When you start planning when and how to start an arts and crafts business, you need to have a certain amount of money for the initial expenses, which mainly includes the cost of raw material.
* Open a separate bank account for your business. This will separate the entire cost and profit details from your personal account and let you know the exact numbers.
Starting Your Arts and Crafts Business
You can have the business setup right in your house or backyard. This is one of the advantages of turning your arts and crafts hobby into a business. When you start your business, the first step is letting people know about the same. Start with your friends and neighbors. Moreover, you can look for simple and low-cost ideas to advertise your business. This includes paper posters and small pamphlets. Photographs of ready artwork and craft items work best in this case. You can e-mail these to your friends, add them to your social networking profiles and post them on free classified advertisement websites.
Finding a market to buy the raw material is a very important part of this business. You need to browse through online websites, nearby stores and wholesale dealers to find good shops selling the basic material required for making arts and crafts at the cheapest rates.
Remember that you might not achieve sales that will level your investment cost, for a few months at least. Hence, you must expect 'no profit' for the first few months, until your business is set-up well, marketed properly, and gains popularity.
Dedicating enough time for your business is very essential, at least in the initial stage. Even if you are a working individual, make a time-table to distribute your tasks properly through the day, week and month, hence, avoiding any problems and meeting deadlines.
Taking Your Business to The Next Level
Once people are aware of your business and you have started getting enough orders to meet the production cost, it is time to take your business to the next level. Well, that is not as difficult as you might think! Promoting your products and increasing the variety of products you sell, is a good way to attract more consumers. You can contact shops which sell artwork and craft items and sell your products to them instead of finding direct customers.
You can also have an exhibition-cum-sale of your products, say once in 3 or 6 months. Put up your items for sale on online shopping websites to attract more customers with minimum efforts. Taking good photographs of your work is very essential for this step.
Well, there are no really any strict rules to be followed while turning your hobby into a business. All you need is planning, dedication towards your work, good communication skills, and ideas to grow your consumer base. Explore areas that are not common and give importance to each part and step while you set-up your arts and crafts business.
By Mamta Mule
Published: 11/16/2011
Read More:
http://www.buzzle.com/
Each of us has a hobby, engaging in which gives us a feeling of satisfaction. Arts and crafts are a favorite hobby of many people, which also offers a lot to explore. This hobby can be and is often converted into a business that has low risk, low investment and can give a good amount of profit. Many experts recommend this idea to beginners and those looking for small business opportunities to increase their total monthly income. So, if you are starting an arts and crafts business, then here are some things to consider before you start it, and ways to work it out well.
Things to Consider Before Start-Up
If you have never been part of a business, the points given below will tell you how to start an arts and crafts business successfully.
* You need to plan the business well to avoid any situations where the investment cost is more than the profit earned, the order is delayed, or the customer is not satisfied.
* Start reading about the basics of small business management, to convert your arts and crafts hobby into a successful business.
* From the wide range of arts and crafts, you need to decide which type of products you will be selling.
* Make a list of easy crafts to make and sell and find out which items have the maximum demand among your target customers.
* In order to make your business score more among your competitors, try to have a set of products not sold by others.
* When you start planning when and how to start an arts and crafts business, you need to have a certain amount of money for the initial expenses, which mainly includes the cost of raw material.
* Open a separate bank account for your business. This will separate the entire cost and profit details from your personal account and let you know the exact numbers.
Starting Your Arts and Crafts Business
You can have the business setup right in your house or backyard. This is one of the advantages of turning your arts and crafts hobby into a business. When you start your business, the first step is letting people know about the same. Start with your friends and neighbors. Moreover, you can look for simple and low-cost ideas to advertise your business. This includes paper posters and small pamphlets. Photographs of ready artwork and craft items work best in this case. You can e-mail these to your friends, add them to your social networking profiles and post them on free classified advertisement websites.
Finding a market to buy the raw material is a very important part of this business. You need to browse through online websites, nearby stores and wholesale dealers to find good shops selling the basic material required for making arts and crafts at the cheapest rates.
Remember that you might not achieve sales that will level your investment cost, for a few months at least. Hence, you must expect 'no profit' for the first few months, until your business is set-up well, marketed properly, and gains popularity.
Dedicating enough time for your business is very essential, at least in the initial stage. Even if you are a working individual, make a time-table to distribute your tasks properly through the day, week and month, hence, avoiding any problems and meeting deadlines.
Taking Your Business to The Next Level
Once people are aware of your business and you have started getting enough orders to meet the production cost, it is time to take your business to the next level. Well, that is not as difficult as you might think! Promoting your products and increasing the variety of products you sell, is a good way to attract more consumers. You can contact shops which sell artwork and craft items and sell your products to them instead of finding direct customers.
You can also have an exhibition-cum-sale of your products, say once in 3 or 6 months. Put up your items for sale on online shopping websites to attract more customers with minimum efforts. Taking good photographs of your work is very essential for this step.
Well, there are no really any strict rules to be followed while turning your hobby into a business. All you need is planning, dedication towards your work, good communication skills, and ideas to grow your consumer base. Explore areas that are not common and give importance to each part and step while you set-up your arts and crafts business.
By Mamta Mule
Published: 11/16/2011
Read More:
http://www.buzzle.com/
Jumat, 11 November 2011
Careers in Interior Design
Interior designing as a career option is a very interesting field for people with an artistic bent of mind. Their work ranges from selecting the color of the walls to deciding the furniture, furnishings, lighting fixtures, and artwork. To develop a design style, they need to work in close contact with the architects of the building space as well as the occupants. In case the building is under construction or renovation, designers can be called upon to decide the placement of windows, doors, keeping in mind accessibility for the handicapped. They may have to work with the plumbers and electricians, and even the building contractor to ascertain that the design meets safety standards. Depending upon their choice and style of work, interior designers can make a career by working in various sectors, as mentioned below.
Interior Designing Careers
Residential Interior Designing
Home designing is a very popular career option for interior designers. Interior designers can be involved in designing an entire home or apartment to designing individual aspects like living room, master bedroom, children's bedroom, or the kitchen. They must take into account the residents' style, personal choices and space available, not to mention the budget restrictions.
Home Staging
An upcoming aspect of designing, home staging involves redesigning your current house in such a way that it looks presentable to a potential buyer. Many people take the help of professional designers to upgrade their homes, so that it fetches a higher price.
Interior Designing in the Corporate Sector
This involves jobs related to designing offices, banks, and business places. The real skill lies in the fact that professionals must design the space in such a way that a room with a formal feel to it should not look too drab and stern, but on the other hand, make employees feel comfortable and increase their social interaction to make the office a better place to work in, while adhering to the principles of ergonomics. It can also involve having a thorough knowledge of telecommunications and electronic appliances, since these two elements play a very important role while designing the office space.
Interior Designing in the Hospitality Sector
These professionals design the interiors of hotels, restaurants, cafés, convention centers, banquet halls, health clubs, etc. This field has a huge scope for creativity since it caters to a comparatively bigger audience. A lot of factors need to be carefully looked into, the most important being esthetics, comfort, and functionality, all within the budgetary limitations. It can involve purchasing furniture and decorative items on a big scale.
Interior Designing in the Healthcare Sector
This involves designing hospitals, nursing centers, doctors' offices, assisted living centers, and a host of other healthcare facilities. The interior designer must hold a specialization and possess excellent knowledge of the healthcare industry. Designing a hospital is by no means a small task. Inpatient facilities, outpatient departments, surgery rooms, clinical laboratories, housekeeping services, all these and much more go into making a hospital. Designing a hospital also involves taking into consideration factors like state-of-the-art medical equipment, telecommunications, and a complex system of electrical and electronic networks. The designer must work to make the best use of space available, leaving nothing redundant, while ensuring all facilities are easily accessible by patients, doctors, and hospital staff.
Interior Designing in the Retail Sector
Professionals specialized in this field have to design commercial spaces, shopping malls, arcades, art galleries, exhibition centers, etc. As with the healthcare and hospitality sectors, this is another field where designers can make full use of their creativity and imagination. Expert knowledge of the building's infrastructure is, without doubt, a must before designing and planning the interiors.
Other than these, interior designers may have to design school and educational facilities as well. Specialization can also include designing in the performing arts sector, like theaters, concert halls, and sets for television and movies. Other popular and upcoming niches are Green Interior Designing and Feng Shui Interior Designing. As the name suggests, green implies designing interiors in an environmentally-friendly and energy-efficient way, and feng shui means, designing a space using feng shui principles and components to create harmony and balance between its elements. There are also In-store Interior Designers that work in furniture, home decor and garden stores, selling design ideas and merchandise through catalogs, but never actually visiting a customer's home.
Educational Requirements for Interior Designing
* There are special programs accredited by the Council for Interior Design Accreditation, and students enrolling in these can get a bachelor's or master's degree.
* The National Council for Interior Design Qualifications conducts exams for potential students who can then receive the NCIDQ certificate, which states that the person is knowledgeable about those elements of interior designing that may affect the life, health, safety, and welfare of the public. To qualify for the examination, candidates must complete an interior designing course and gain supervised work experience.
* The National Association of Schools of Art and Design has college-level courses for students wishing to take up interior designing as a career option.
* Students can take up courses which teach subjects like space planning, lighting design, graphic designing, industrial and product design, photography, visual communications, CAD (computer-aided design), applied design, industrial arts, color schemes, safety laws, etc., as per their choice and intended field of specialization.
Interior designers can run their own design firms, work freelance, or work as an employee with a design firm. An innate talent to design, an eye for detail, and superb communication skills are a must for becoming an interior designer. An individual who runs his own firm should also possess basic business skills like financing, making decisions, management, and networking, especially if he has a team of junior designers working for him. Whatever type of space he is working on, whether it's commercial or residential, an interior designer must combine all his artistic and architectural capabilities to come up with the most innovative design ideas, within the allocated budget and also keep the client happy. Though it is a lot of hard work, interior designing is a job that can give you immense satisfaction at the end of the day.
By Sailee Kale
from:
http://www.buzzle.com/articles/careers-in-interior-design.html
Interior Designing Careers
Residential Interior Designing
Home designing is a very popular career option for interior designers. Interior designers can be involved in designing an entire home or apartment to designing individual aspects like living room, master bedroom, children's bedroom, or the kitchen. They must take into account the residents' style, personal choices and space available, not to mention the budget restrictions.
Home Staging
An upcoming aspect of designing, home staging involves redesigning your current house in such a way that it looks presentable to a potential buyer. Many people take the help of professional designers to upgrade their homes, so that it fetches a higher price.
Interior Designing in the Corporate Sector
This involves jobs related to designing offices, banks, and business places. The real skill lies in the fact that professionals must design the space in such a way that a room with a formal feel to it should not look too drab and stern, but on the other hand, make employees feel comfortable and increase their social interaction to make the office a better place to work in, while adhering to the principles of ergonomics. It can also involve having a thorough knowledge of telecommunications and electronic appliances, since these two elements play a very important role while designing the office space.
Interior Designing in the Hospitality Sector
These professionals design the interiors of hotels, restaurants, cafés, convention centers, banquet halls, health clubs, etc. This field has a huge scope for creativity since it caters to a comparatively bigger audience. A lot of factors need to be carefully looked into, the most important being esthetics, comfort, and functionality, all within the budgetary limitations. It can involve purchasing furniture and decorative items on a big scale.
Interior Designing in the Healthcare Sector
This involves designing hospitals, nursing centers, doctors' offices, assisted living centers, and a host of other healthcare facilities. The interior designer must hold a specialization and possess excellent knowledge of the healthcare industry. Designing a hospital is by no means a small task. Inpatient facilities, outpatient departments, surgery rooms, clinical laboratories, housekeeping services, all these and much more go into making a hospital. Designing a hospital also involves taking into consideration factors like state-of-the-art medical equipment, telecommunications, and a complex system of electrical and electronic networks. The designer must work to make the best use of space available, leaving nothing redundant, while ensuring all facilities are easily accessible by patients, doctors, and hospital staff.
Interior Designing in the Retail Sector
Professionals specialized in this field have to design commercial spaces, shopping malls, arcades, art galleries, exhibition centers, etc. As with the healthcare and hospitality sectors, this is another field where designers can make full use of their creativity and imagination. Expert knowledge of the building's infrastructure is, without doubt, a must before designing and planning the interiors.
Other than these, interior designers may have to design school and educational facilities as well. Specialization can also include designing in the performing arts sector, like theaters, concert halls, and sets for television and movies. Other popular and upcoming niches are Green Interior Designing and Feng Shui Interior Designing. As the name suggests, green implies designing interiors in an environmentally-friendly and energy-efficient way, and feng shui means, designing a space using feng shui principles and components to create harmony and balance between its elements. There are also In-store Interior Designers that work in furniture, home decor and garden stores, selling design ideas and merchandise through catalogs, but never actually visiting a customer's home.
Educational Requirements for Interior Designing
* There are special programs accredited by the Council for Interior Design Accreditation, and students enrolling in these can get a bachelor's or master's degree.
* The National Council for Interior Design Qualifications conducts exams for potential students who can then receive the NCIDQ certificate, which states that the person is knowledgeable about those elements of interior designing that may affect the life, health, safety, and welfare of the public. To qualify for the examination, candidates must complete an interior designing course and gain supervised work experience.
* The National Association of Schools of Art and Design has college-level courses for students wishing to take up interior designing as a career option.
* Students can take up courses which teach subjects like space planning, lighting design, graphic designing, industrial and product design, photography, visual communications, CAD (computer-aided design), applied design, industrial arts, color schemes, safety laws, etc., as per their choice and intended field of specialization.
Interior designers can run their own design firms, work freelance, or work as an employee with a design firm. An innate talent to design, an eye for detail, and superb communication skills are a must for becoming an interior designer. An individual who runs his own firm should also possess basic business skills like financing, making decisions, management, and networking, especially if he has a team of junior designers working for him. Whatever type of space he is working on, whether it's commercial or residential, an interior designer must combine all his artistic and architectural capabilities to come up with the most innovative design ideas, within the allocated budget and also keep the client happy. Though it is a lot of hard work, interior designing is a job that can give you immense satisfaction at the end of the day.
By Sailee Kale
from:
http://www.buzzle.com/articles/careers-in-interior-design.html
Minggu, 23 Oktober 2011
Small Business Cash Flow 101
Cash flow is the movement of money in and out of a business over time. For small business owners who don't have a financial background, understanding the importance of cash flow and the impact it can have can be challenging. But it doesn't have to be.
There are some simple rules of cash flow that can help you make sense of the money side of your business and improve your bottom line. Those rules are explained in today's feature article. I also included some additional resources to help you analyze and increase the cash flow in your business.
from :
http://sbinformation.about.com/b/2011/10/18/small-business-cash-flow-101.htm
There are some simple rules of cash flow that can help you make sense of the money side of your business and improve your bottom line. Those rules are explained in today's feature article. I also included some additional resources to help you analyze and increase the cash flow in your business.
from :
http://sbinformation.about.com/b/2011/10/18/small-business-cash-flow-101.htm
Sabtu, 08 Oktober 2011
UK banks in trouble? - Today's small business news roundup
UK bank downgrades, more quantitative easing, and an accounting exemption for small businesses - here's your need-to-know business news roundup.
A dozen major UK financial institutions had their ratings downgraded by Moody’s this morning.
Lloyds, RBS, Nationwide, and Santander were amongst the banks to have their ratings cut, after Moody’s determined that the government is less likely to bail them out if it were to become necessary. [BBC]
The Bank of England expanded its quantitative easing scheme amidst increasing concern about the scale of the economic slowdown.
The Bank will buy some £75 billion worth of government bonds – but many commentators want to see a more direct injection into the economy. [Guardian]
The government has proposed an easing of audit requirements for small businesses.
It launched a consultation on the scheme, which it says could save £600 million a year. But accountants have questioned the level of savings that could be achieved
from :
http://www.simplybusiness.co.uk/knowledge/news/2011/10/2011-10-07-uk-banks-in-trouble-todays-small-business-news-roundup/
A dozen major UK financial institutions had their ratings downgraded by Moody’s this morning.
Lloyds, RBS, Nationwide, and Santander were amongst the banks to have their ratings cut, after Moody’s determined that the government is less likely to bail them out if it were to become necessary. [BBC]
The Bank of England expanded its quantitative easing scheme amidst increasing concern about the scale of the economic slowdown.
The Bank will buy some £75 billion worth of government bonds – but many commentators want to see a more direct injection into the economy. [Guardian]
The government has proposed an easing of audit requirements for small businesses.
It launched a consultation on the scheme, which it says could save £600 million a year. But accountants have questioned the level of savings that could be achieved
from :
http://www.simplybusiness.co.uk/knowledge/news/2011/10/2011-10-07-uk-banks-in-trouble-todays-small-business-news-roundup/
Minggu, 25 September 2011
Cash-Strapped Americans Can't Break the Overdraft Habit
Overdraft fees are like a movie monster that just won't die. No amount of public outrage or regulation can slay the beast.
But the banks aren't the only ones casting overdrafts in financial sequels: Truth is, consumers who don't properly manage their accounts, or who have money problems, keep breathing life into the overdraft dragon.
"Overdrafts are part of the small advance and loan market," explains G. Michael Moebs, CEO of Moebs Services. Other parts of that "market" include credit card cash advances, transfers from deposit accounts or small lines of credit, payday loans, pawn loans, even gifts and loans from family and friends -- and at the extreme, loan sharks. "The surprise is, no matter how much government tries to regulate and legislate away this small loan market, it keeps coming back," says Moebs. "People want and need a funding safety net."
According to Moebs Services, a consulting firm for the banking industry, overdraft revenue in the second quarter of 2011 was up b $700 million (from $30.1 billion in the first quarter to $30.8 billion) at both banks and credit unions. The average number of overdrafts per household remained fairly even.
In the majority of cases, overdrafts are accidents, something that happens when people don't keep track of their transactions. However, a surprisingly large fraction -- 26%, according to Moebs -- are intentional. The Moebs study found that 34 million Americans use overdrafts to fill a shortfall of funds, while 19 million of them go to payday lenders. "People have short term needs: medical, auto repairs, relative in trouble, or they are just short cash in some pay periods," says Moebs.
With median overdraft fees at $28, the cost of those accidents and choices adds up. Worse still, Moebs estimates that typically, 90% of overdraft fees are paid by the poorest 10% of customers.
The Pros and Cons of Overdrafts
Linda Sherry, director of National Priorities for Consumer Action, points out that there's more than one type of overdraft, and says the good and bad varieties of overdraft protection shouldn't be lumped together.
"While overdrafts can serve as a short-term loan, we have some important caveats," she says. "We are not talking about 'automatic' overdraft or bounce protection. We are talking about the kind of overdraft protection that you apply for and it covers your overdrafts and charges you only a reasonable transaction fee and any interest on the loan. This one spares you overdraft fees altogether. Most reputable banks offer this."
"Banks also offer the kind of overdraft protection that we don't believe in -- when people overdraft they pay the overdraft but still charge a hefty overdraft fee of $30 or so. We urge caution in allowing a bank to do this," says Sherry.
Moebs argues though, that increased regulation of overdrafts does more harm than good. "Those Americans that rely on overdrafts and advance payday loans, do not have the FICO score to qualify for a line of credit or credit card," said Moebs, in a prepared statement. "By creating unintended consequences, such as predatory lending from loan sharks, adding limits to overdraft volume or price will do more harm than good."
"Regulators should get out of and stay out of the short term money needs of consumers -- they cause more problems than solutions. Instead of trying to tell consumers what they need and how to manage their money, let the market do it," says Moebs, whose clients include banking and savings institutions.
"The huge mistake that many make when looking at overdrafts, payday loans and pawn loans, is trying to measure it by large loan standards -- namely APR. It's like bringing a baseball speed gun used to measure the velocity of a pitch to measure the speed of a college or NFL football player. Overdrafts are measured by fee amounts, not rates."
Consumers Still Need Protection
Regulators clearly disagree with that: Overdraft fees remain high on their agenda. In 2009, the Federal Reserve stepped in with new rules to make overdrafts and fees more transparent. Since then, some banks have gone even further and eliminated the overdraft option on ATM and debit transactions. Other banking regulators have either proposed or issued supervisory guidance governing the banks that they oversee.
The newly formed Consumer Financial Protection Bureau, too, is taking on overdrafts. "The Bureau will carefully assess how we can best ensure that the overall market for short-term credit is fair, transparent, and competitive," said Raj Date, special advisor to the Secretary of the Treasury for the CFPB, in a recent speech at the Lessons Learned from the Financial Crisis: The Need for the CFPB event in Philadelphia. "We will be monitoring the impact of the recent regulatory and supervisory interventions. If we find that these interventions are not working as intended, we will adjust. And if we find that additional action is needed, we will act."
What's the best advice for consumers? Says Moebs, "Have your checking account at a community bank or credit union, because the price is less and you will get the short-[term] funding you need and want."
See full article from DailyFinance: http://srph.it/nfEnwx
&
http://www.dailyfinance.com/2011/09/23/cash-strapped-americans-cant-break-the-overdraft-habit/
But the banks aren't the only ones casting overdrafts in financial sequels: Truth is, consumers who don't properly manage their accounts, or who have money problems, keep breathing life into the overdraft dragon.
"Overdrafts are part of the small advance and loan market," explains G. Michael Moebs, CEO of Moebs Services. Other parts of that "market" include credit card cash advances, transfers from deposit accounts or small lines of credit, payday loans, pawn loans, even gifts and loans from family and friends -- and at the extreme, loan sharks. "The surprise is, no matter how much government tries to regulate and legislate away this small loan market, it keeps coming back," says Moebs. "People want and need a funding safety net."
According to Moebs Services, a consulting firm for the banking industry, overdraft revenue in the second quarter of 2011 was up b $700 million (from $30.1 billion in the first quarter to $30.8 billion) at both banks and credit unions. The average number of overdrafts per household remained fairly even.
In the majority of cases, overdrafts are accidents, something that happens when people don't keep track of their transactions. However, a surprisingly large fraction -- 26%, according to Moebs -- are intentional. The Moebs study found that 34 million Americans use overdrafts to fill a shortfall of funds, while 19 million of them go to payday lenders. "People have short term needs: medical, auto repairs, relative in trouble, or they are just short cash in some pay periods," says Moebs.
With median overdraft fees at $28, the cost of those accidents and choices adds up. Worse still, Moebs estimates that typically, 90% of overdraft fees are paid by the poorest 10% of customers.
The Pros and Cons of Overdrafts
Linda Sherry, director of National Priorities for Consumer Action, points out that there's more than one type of overdraft, and says the good and bad varieties of overdraft protection shouldn't be lumped together.
"While overdrafts can serve as a short-term loan, we have some important caveats," she says. "We are not talking about 'automatic' overdraft or bounce protection. We are talking about the kind of overdraft protection that you apply for and it covers your overdrafts and charges you only a reasonable transaction fee and any interest on the loan. This one spares you overdraft fees altogether. Most reputable banks offer this."
"Banks also offer the kind of overdraft protection that we don't believe in -- when people overdraft they pay the overdraft but still charge a hefty overdraft fee of $30 or so. We urge caution in allowing a bank to do this," says Sherry.
Moebs argues though, that increased regulation of overdrafts does more harm than good. "Those Americans that rely on overdrafts and advance payday loans, do not have the FICO score to qualify for a line of credit or credit card," said Moebs, in a prepared statement. "By creating unintended consequences, such as predatory lending from loan sharks, adding limits to overdraft volume or price will do more harm than good."
"Regulators should get out of and stay out of the short term money needs of consumers -- they cause more problems than solutions. Instead of trying to tell consumers what they need and how to manage their money, let the market do it," says Moebs, whose clients include banking and savings institutions.
"The huge mistake that many make when looking at overdrafts, payday loans and pawn loans, is trying to measure it by large loan standards -- namely APR. It's like bringing a baseball speed gun used to measure the velocity of a pitch to measure the speed of a college or NFL football player. Overdrafts are measured by fee amounts, not rates."
Consumers Still Need Protection
Regulators clearly disagree with that: Overdraft fees remain high on their agenda. In 2009, the Federal Reserve stepped in with new rules to make overdrafts and fees more transparent. Since then, some banks have gone even further and eliminated the overdraft option on ATM and debit transactions. Other banking regulators have either proposed or issued supervisory guidance governing the banks that they oversee.
The newly formed Consumer Financial Protection Bureau, too, is taking on overdrafts. "The Bureau will carefully assess how we can best ensure that the overall market for short-term credit is fair, transparent, and competitive," said Raj Date, special advisor to the Secretary of the Treasury for the CFPB, in a recent speech at the Lessons Learned from the Financial Crisis: The Need for the CFPB event in Philadelphia. "We will be monitoring the impact of the recent regulatory and supervisory interventions. If we find that these interventions are not working as intended, we will adjust. And if we find that additional action is needed, we will act."
What's the best advice for consumers? Says Moebs, "Have your checking account at a community bank or credit union, because the price is less and you will get the short-[term] funding you need and want."
See full article from DailyFinance: http://srph.it/nfEnwx
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http://www.dailyfinance.com/2011/09/23/cash-strapped-americans-cant-break-the-overdraft-habit/
Senin, 19 September 2011
IBM to pay $10 million to settle Asian bribe case
WASHINGTON (AFP) – IBM has agreed to pay $10 million to settle charges it gave cash and gifts to Chinese and South Korean officials to win contracts for mainframe and personal computers and other products.
The agreement with the US Securities and Exchange Commission (SEC) calls for the US computer titan to pay disgorgement of $5.3 million, interest of $2.7 million and a civil penalty of $2 million.
Under the agreement, which is subject to court approval and was released by the SEC on Friday, IBM does not admit or deny the allegations it violated the Foreign Corrupt Practices Act (FCPA).
In the complaint filed with the US District Court for the District of Columbia, the SEC outlined the accusations against IBM, which is based in Armonk, New York.
The complaint detailed instances of IBM Korea employees allegedly handing over envelopes filled with cash to South Korean officials in parking lots, providing them with free notebook computers, fiddling bid sheets and making payments to the bank account of a "hostess in a drink shop."
It said employees of IBM subsidiaries and a majority-owned joint venture provided cash and improper gifts, travel and entertainment to Chinese and South Korean government officials between 1998 and 2009.
From 1998 to 2003, employees of IBM Korea and joint venture LG IBM PC Co. paid $207,000 in cash bribes and gave improper gifts to South Korean government officials to secure the sale of IBM products, the complaint said.
It said that from 2004 to 2009, employees of IBM China provided overseas trips, entertainment and improper gifts to Chinese government officials.
"The misconduct in China involved several key IBM China employees and more than 100 IBM China employees overall," the complaint said.
IBM China employees "created slush funds at local travel agencies in China that were then used to pay for overseas and other travel expenses incurred by Chinese government officials," it said.
"In addition, IBM China employees created slush funds at its business partners to provide a cash payment and improper gifts, such as cameras and laptop computers, to Chinese government officials," it added.
"Deficient internal controls allowed employees of IBM's subsidiaries and joint venture to use local business partners and travel agencies as conduits for bribes or other improper payments to South Korean and Chinese government officials over long periods of time," the complaint said.
It said improper payments were recorded as "legitimate business expenses."
In a statement acknowledging the settlement, IBM said it "insists on the highest ethical standards in the conduct of its business and requires all employees to follow its policies and procedures for conducting business."
IBM shares were up 0.95 percent at $155.65 shortly before the closing bell on Wall Street.
The agreement with the US Securities and Exchange Commission (SEC) calls for the US computer titan to pay disgorgement of $5.3 million, interest of $2.7 million and a civil penalty of $2 million.
Under the agreement, which is subject to court approval and was released by the SEC on Friday, IBM does not admit or deny the allegations it violated the Foreign Corrupt Practices Act (FCPA).
In the complaint filed with the US District Court for the District of Columbia, the SEC outlined the accusations against IBM, which is based in Armonk, New York.
The complaint detailed instances of IBM Korea employees allegedly handing over envelopes filled with cash to South Korean officials in parking lots, providing them with free notebook computers, fiddling bid sheets and making payments to the bank account of a "hostess in a drink shop."
It said employees of IBM subsidiaries and a majority-owned joint venture provided cash and improper gifts, travel and entertainment to Chinese and South Korean government officials between 1998 and 2009.
From 1998 to 2003, employees of IBM Korea and joint venture LG IBM PC Co. paid $207,000 in cash bribes and gave improper gifts to South Korean government officials to secure the sale of IBM products, the complaint said.
It said that from 2004 to 2009, employees of IBM China provided overseas trips, entertainment and improper gifts to Chinese government officials.
"The misconduct in China involved several key IBM China employees and more than 100 IBM China employees overall," the complaint said.
IBM China employees "created slush funds at local travel agencies in China that were then used to pay for overseas and other travel expenses incurred by Chinese government officials," it said.
"In addition, IBM China employees created slush funds at its business partners to provide a cash payment and improper gifts, such as cameras and laptop computers, to Chinese government officials," it added.
"Deficient internal controls allowed employees of IBM's subsidiaries and joint venture to use local business partners and travel agencies as conduits for bribes or other improper payments to South Korean and Chinese government officials over long periods of time," the complaint said.
It said improper payments were recorded as "legitimate business expenses."
In a statement acknowledging the settlement, IBM said it "insists on the highest ethical standards in the conduct of its business and requires all employees to follow its policies and procedures for conducting business."
IBM shares were up 0.95 percent at $155.65 shortly before the closing bell on Wall Street.
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