#Fixed or floating interest rate: Which is better during inflation?

[fincrif]

How Does Inflation Affect Personal Loan Interest Rates?

Introduction

Inflation is one of the most critical economic factors that influence financial decisions, including borrowing and lending. When inflation rises, the cost of goods and services increases, reducing the purchasing power of money. But how does this impact personal loan interest rates?

A personal loan is a widely used financial tool that provides quick access to funds without requiring collateral. However, the interest rates on personal loans are affected by multiple factors, including the Reserve Bank of India’s (RBI) monetary policies, inflation rates, and overall economic conditions. Understanding how inflation affects personal loan interest rates can help borrowers make informed decisions when applying for a loan.

This article will explore the connection between inflation and personal loan interest rates, how inflation impacts borrowers, and the best strategies to secure low-interest personal loans during inflationary periods.

What Is Inflation and How Does It Work?

Inflation refers to the rise in the prices of goods and services over time, reducing the purchasing power of money. For example, if inflation is at 6% per year, the cost of a product that was ₹1,000 last year would increase to ₹1,060 this year.

Key Causes of Inflation:

✔️ Demand-Pull Inflation – Occurs when demand for goods and services exceeds supply, leading to higher prices. ✔️ Cost-Push Inflation – Arises when the cost of raw materials, wages, and production increases, forcing businesses to raise prices. ✔️ Monetary Inflation – Happens when there is excess money supply in the economy, reducing its value.

The RBI controls inflation by adjusting monetary policies, which directly impact personal loan interest rates.

How Inflation Affects Personal Loan Interest Rates?

1. RBI’s Response to Inflation: Increase in Repo Rate

The Reserve Bank of India (RBI) plays a crucial role in controlling inflation through monetary policy adjustments. The repo rate is the rate at which RBI lends money to commercial banks.

✔️ When inflation is high, RBI increases the repo rate to reduce liquidity in the market. ✔️ When inflation is low, RBI may reduce the repo rate to encourage borrowing and spending.

Since banks borrow money from RBI, an increase in the repo rate makes loans more expensive for banks, leading to higher personal loan interest rates for borrowers.

💡 Tip: Keep an eye on RBI’s monetary policy updates to understand interest rate trends before applying for a personal loan.

2. Higher Inflation Leads to Higher Personal Loan Interest Rates

When inflation rises, the cost of living increases, making it more expensive for people to manage daily expenses. To prevent excessive borrowing, lenders increase personal loan interest rates to reduce credit demand.

✔️ Impact on Borrowers:

Higher interest rates increase EMI amounts, making personal loans costlier.

Loan repayment becomes more challenging, especially for middle-income borrowers.

Lenders become stricter with loan approvals, requiring higher credit scores.

💡 Tip: If inflation is rising, consider applying for a personal loan before interest rates increase further.

3. Fixed vs. Floating Interest Rates: What’s Better During Inflation?

Borrowers can choose between fixed and floating interest rates when taking a personal loan.

✔️ Fixed Interest Rate:

The interest rate remains constant throughout the loan tenure.

Beneficial when inflation is rising, as your EMI remains unaffected.

However, if inflation decreases, you won’t benefit from lower rates.

✔️ Floating Interest Rate:

The interest rate fluctuates based on market conditions and RBI policies.

When inflation is high, floating rates increase, making EMIs expensive.

If inflation drops, borrowers benefit from lower interest rates.

💡 Tip: If inflation is expected to rise, choose a fixed-rate personal loan for stability. If inflation is expected to fall, opt for a floating-rate loan to benefit from lower rates.

4. Reduced Loan Approval Chances Due to Inflation

During high inflation, banks and NBFCs (Non-Banking Financial Companies) become more cautious while approving personal loans.

✔️ Why?

Borrowers have higher expenses, making repayment risky.

Lenders may increase the minimum credit score requirement.

Personal loan applications may require higher income proof to qualify.

💡 Tip: Maintain a strong credit score (750+), stable income, and low existing debt to improve your loan approval chances.

How to Get a Low-Interest Personal Loan During Inflation?

Despite rising inflation, there are ways to secure a personal loan at a lower interest rate:

1. Improve Your Credit Score

A high credit score (750 or above) helps you negotiate better interest rates. To improve your score: ✔️ Pay all EMIs and credit card bills on time. ✔️ Maintain a low credit utilization ratio (below 30%). ✔️ Avoid multiple loan applications in a short period.

2. Compare Interest Rates from Multiple Lenders

Different banks and NBFCs offer varying interest rates. Always: ✔️ Check online loan marketplaces to compare loan offers. ✔️ Choose lenders offering special discounts for salaried professionals.

3. Opt for a Shorter Loan Tenure

A shorter loan tenure means: ✔️ Higher EMIs, but lower total interest paid. ✔️ Lenders offer better rates for short-term loans (1-3 years).

4. Consider Balance Transfer for Lower Rates

If you already have a personal loan at a high-interest rate, consider a balance transfer to a lender offering lower rates.

✔️ This reduces your EMI burden and helps save money.

5. Apply During Festive Offers

Banks and NBFCs often provide discounted interest rates during festive seasons. Look for: ✔️ Zero processing fees or reduced charges. ✔️ Special festive interest rate discounts.

Final Thoughts: Should You Take a Personal Loan During Inflation?

Inflation impacts personal loan interest rates, making borrowing more expensive when prices are rising. However, by understanding inflation trends and planning wisely, you can still get a personal loan at affordable interest rates.

Key Takeaways:

✔️ High inflation leads to higher personal loan interest rates, making borrowing expensive. ✔️ RBI increases repo rates during inflation, indirectly affecting personal loan rates. ✔️ Fixed interest rates are better during inflation, while floating rates work when inflation is expected to decrease. ✔️ Improving your credit score, comparing lenders, and choosing the right tenure can help secure a low-interest personal loan.

💡 Final Tip: If you need a personal loan during inflation, borrow only what you need and choose lenders offering the best interest rates to minimize costs.

For expert guidance on personal loans and financial planning, visit www.fincrif.com today!

[gtdisin]

Investigating the Advantages of Floating Rate Loan Funds, and Other Investments

For individuals looking to minimize risks and yet diversify their portfolio there is no better investment than fixed income securities. Despite restrictions on the level of risks which can be taken in India there are several opportunities for a conservative investor to make a desirable rate of income. Starting with Floating Rate Loan Funds to RBI Floating Rate Bonds, Corporative Fixed Deposits and SGB Gold Bonds, each investment tool has its own advantage. 

What are Floating Rate Loan Funds?

Floating Rate Loan Funds are mutual budget where funding is made in debt securities, interest on which fluctuates with time. These adjust from time to time, this assists the fund to afford inflation together with fluctuating interests rates on the market. Since the returns are pegged to the benchmark interest rate, these funds are created to act as a hedge against rising rates and thus begins to look attractive when rates are on the rise.

Floating Rate Loan Funds investing is most suitable for those who want to receive capital with constant rates and with a minor fluctuation on the rates of interest. These funds mostly invest in loans, bonds and other securities carrying fluctuating rates of return in relation to changes in interest rates. These funds are perfect should you desire to invest in a relatively low risk investment with a steady income and Floating Rate Loan Funds offer this to us.

Understanding RBI Floating Rate Bonds

Another fairly conservative investment product is RBI Floating Rate Bonds. These bonds are floated by the Reserve Bank of India and the bonds are preferred by those investors who prefer less risks for higher inflation adjusted returns. RBI Floating Rate Bonds were offered at a fixed interest rate that has a floating nature and its rates are generally changed every half-year.

These are safe securities as they are fully guaranteed by the Indian government. For those who seeking comparatively safe investment guarantee with inflation adjusted returns, RBI Floating Rate Bonds can be a good choice. As compared to fixed rate bonds, the income that comes with these bonds may rise when they are issued during periods of economic growth.

Portfolio Planning with Reference to the Role of Corporate FDs

While Companies give out FDs as financial instruments rather than banks, their interest rates usually are higher than on bank FDs. Such deposits are usually ranked as relatively risk-free, particularly in case with high credit standing of the firm. The interest rates applicable to Corporate Fixed Deposits are set for a particular period and are perfect for the people who want fixed profits.

However, the Corporate FDs involve certain amount of risk than the risk free instruments such as RBI Floating Rate Bonds. But these interest rates are generally higher to those offered by normal bank FDs investors should however consider some factors about the finacial health of the company into these deposits. A Corporate FD can be a very useful tool for those individuals striving for higher returns on investment or those willing to take slightly increased risk.

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Is investing in Real Estate during the Lockdown/Post Lockdown period the best move now?

Real estate has always been a steady investment that is synonymous with security and prestige and this trend would continue during these unprecedented times. Other asset classes such as equity markets, which are poised to see a downward trend over the next two years (atleast!) due to muted corporate earnings over the next several quarters, are much less reliable and extremely volatile.

With the Repo rate being reduced by 75 bps and the new base rate being 4.4%, home loan interest rates are only going to get further lower. This makes it all the more worthwhile for an investor or an end user to make a real estate investment such as buying an apartment. The inflation hedging capabilities of real estate adds to the fact that no time is better than now to ensure the 3 S’s in your investment criteria: Safety. Security and Stability!

The post pandemic world will be good for the real estate sector, the one sector that will emerge as the silver lining in such bleak scenario.

I have decided to invest in an apartment during/ immediately after the Lockdown . Should I book an under-construction / completed project?

Definitely, go for a completed project like Chowriappa Constellation! Since you have made up your mind to buy an apartment, you should consider the following, to make your decision more balanced:

1. Further delays in under-construction projects are imminent

With India under a complete lockdown and construction workers returning home, project delays are unavoidable. The real sector, especially the residential segment, has already been struggling with project delays, regulatory changes and low sales for the last few years. Given the Coronavirus pandemic, construction in incomplete projects has come to a complete standstill across the country. We foresee a delay in delivery of projects on account of supply disruption, due to the virus outbreak and liquidity crunch. This makes it all the more paramount to invest in a completed project like Chowriappa Constellation.

2. Liquidity will become an issue for Developers in completing under-construction projects.

With almost no sales happening and no foreign funds at hand, developers will struggle to pick up the pace, once the lockdown ends. The investment will start flowing in gradually and so far, the government has not announced any bailout package for the sector, which is a concerning issue

Due to volatility in liquidity, existing under construction projects will bear the brunt of these adverse effects.

Therefore, in our humble opinion, it is advised to go for an extra layer of certainty and book an apartment in a completed project.

3. Demand-supply slowdown

Demand has dried down completely and very little supply in terms of completed projects are now available due to the lockdown and its after effects. Once everything gets back to normal, it will take at least three months for real estate construction to gain pace as well as developers to resume construction work, as most of the labourers have left for their home towns.

That means supply will take a little more time to pick up than demand. This will bring an upward trend in the property prices in the post-COVID-19 world, which means you may have to pay more than what you have to pay today, for the same property. Therefore, it makes sense in buying an apartment in a completed project as soon as possible before prices go up.

Now, you have really convinced me! But I am a numbers man... Tell me more on this aspect and how the prevailing home loan rates are to my advantage… Maybe I may even think of renting the apartment out…

Home loans at prevalent interest rates allow for considerable savings while creating an asset for end-use or investment purpose. Furthermore, the borrower gets to use the savings resulting from a reduced equated monthly instalment (EMI) to avail a top-up loan, also available at lower interest rates.

The additional funds can be used for undertaking interiors related work for the apartment being purchased. Alternatively, a lower interest rate also gives borrowers an option to raise a higher amount of loan. This helps widen the choice in terms of a bigger home with better amenities and lifestyle facilities in a prominent neighbourhood like Hennur Main Road.

A back-of-the-envelope comparison of a 25-year home loan of Rs 1.5 crore at interest rates of 8.5% and 7.75% results in an equated monthly instalment of Rs 1,20,784 and Rs 1,13,299 respectively. The reduced rate of interest gives the borrower an upfront monthly savings of Rs 7,492. If need be, this money can get the borrower a top-up loan of up to Rs 9.9 lakh for enhancing the apartment’s look and feel.

By claiming tax benefits on principal and interest payments under various sections of the Income Tax Act, the borrower is able to further save Rs 9,722 every month or Rs 1,16,666 annually. The effective EMI for the borrower thus comes down to Rs 1,03,577 (including tax benefits) with an effective rate of interest at 6.74%. That’s almost 1% lower rate of interest on the home loan being availed. The overall proposition sweetens further when combined with tax benefits in the case of a joint home loan.

Interestingly, if one compares the present scenario with home loans being offered in the year 2002–03, the interest rates pretty much hovered at similar levels. In fact, lower home loan interest rates coupled with affordable prices acted as catalysts back then leading to a consistent growth in property prices across markets in the ensuing years.

Another benefit of the current home loan interest rate scenario is that a borrower can look at the possibility of going for a fixed rate over a floating one. The latter tends to get volatile and can go north based on monetary policy decisions by the Indian Central Bank.

Banks and other financial institutions typically charge a premium for home loans at fixed rates. So, this option is best availed when overall interest rates are at their lowest. The home loan borrower is able to lock the fixed-rate at a lower level and get rid of the stress arising out of the interest reset practices followed by various lending institutions.

Those looking to acquire a property for investment purposes and earning rental income have their own set of benefits. Rental yields are currently pegged at 2.5%. And with effective interest rates at 6.75%, the net effect, if a home is purchased for letting out, comes to 4.25%. This beats long term inflation figures of India hands down, thus presenting another win-win situation.

An opportunity, in the form of lowest home loan interest rates, is now available. Go ahead, make its best use and fulfill your life dream.

[financepaydayinfo]

Calculate loan interest rates: When borrowing money, understanding how loan interest rates are calculated is crucial to make informed financial decisions. Loan interest rates determine the amount of interest you'll pay on your loan, which affects the total cost of borrowing. In this comprehensive guide, we will explain the different types of loan interest rates, factors that affect them, and provide you with the knowledge to calculate them accurately. So, let's dive in! Understanding Loan Interest Rates Loan interest rates are the percentage of the loan amount that lenders charge borrowers for the privilege of borrowing their money. They represent the cost of borrowing and are typically expressed as an annual percentage rate (APR). Understanding how these rates work is essential before taking out any loan. Types of Loan Interest Rates Fixed Interest Rates Fixed interest rates remain constant throughout the loan term. They provide stability and predictability since the interest rate doesn't change, regardless of any external factors. Fixed interest rates are an excellent choice if you prefer a consistent monthly payment and want to avoid the risk of rate fluctuations. Variable Interest Rates Variable interest rates, also known as floating or adjustable rates, can change over time. These rates are usually tied to an index, such as the prime rate or the London Interbank Offered Rate (LIBOR). When the index fluctuates, the interest rate on your loan also changes. Variable interest rates offer the possibility of lower rates initially but come with the risk of rates increasing in the future. Adjustable Interest Rates Adjustable interest rates combine features of both fixed and variable rates. They typically have a fixed rate for an initial period, usually several years, and then switch to a variable rate afterward. Adjustable rates are popular in mortgages, where borrowers can take advantage of lower fixed rates for a specified period before transitioning to a variable rate. Factors Affecting Loan Interest Rates Several factors influence the interest rates lenders offer to borrowers. Understanding these factors can help you secure a favorable rate and save money over the life of your loan. Credit Score Your credit score plays a significant role in determining the interest rate you qualify for. Lenders consider it a measure of your creditworthiness. Higher credit scores indicate lower risk for lenders, resulting in better interest rates. Before applying for a loan, it's essential to review your credit report and address any discrepancies or improve your credit score if necessary. Loan Term The loan term refers to the length of time you have to repay the loan. Typically, longer-term loans come with higher interest rates since lenders take on more risk by lending money for an extended period. Shorter-term loans usually have lower interest rates but higher monthly payments. Economic Conditions Economic conditions, such as inflation rates and market trends, can influence loan interest rates. When the economy is thriving, interest rates tend to rise. In contrast, during economic downturns, rates may decrease. Staying updated with current economic conditions can give borrowers a sense of whether interest rates are likely to increase or decrease in the near future. Loan Amount The loan amount you're borrowing can also impact the interest rate. In general, larger loan amounts may attract higher interest rates since they represent a higher risk for lenders. Smaller loans, on the other hand, may have more competitive rates. Calculating Loan Interest Rates Understanding how to calculate loan interest rates is essential for borrowers to evaluate the affordability of their loans and plan their repayment strategy. There are two primary methods of calculating interest: simple interest and compound interest. Simple Interest Formula The simple interest formula is straightforward and is often used for short-term loans. It calculates interest based on the principal amount, the interest rate, and the loan term.

The formula is as follows: Interest = (Principal Amount) x (Interest Rate) x (Loan Term) For example, if you borrow $10,000 with an interest rate of 5% for a period of 2 years, the interest would be calculated as: Interest = $10,000 x 0.05 x 2 = $1,000 Compound Interest Formula Compound interest is more commonly used for long-term loans. Unlike simple interest, compound interest includes the interest earned on both the principal amount and any previously accumulated interest. The formula for compound interest is as follows: A = P(1 + r/n)^(nt) Where: A = Total amount (including principal and interest) P = Principal amount r = Annual interest rate (expressed as a decimal) n = Number of times interest is compounded per year t = Number of years Calculating compound interest can be complex, but online calculators and financial tools make it easy to determine the precise interest amount. Loan Amortization Schedule To gain a better understanding of loan interest rates, it's crucial to familiarize yourself with a loan amortization schedule. An amortization schedule is a detailed table that outlines the breakdown of each payment throughout the loan term. It provides information on the principal and interest components of each payment, allowing borrowers to visualize how their loan balance decreases over time. What is an Amortization Schedule? An amortization schedule illustrates how each payment made towards the loan is allocated between interest and principal. Initially, a higher portion of the payment goes towards interest, while the remaining amount reduces the principal balance. As the loan progresses, the interest portion decreases, and more money is applied towards reducing the principal. Importance of Amortization Schedule An amortization schedule helps borrowers understand how their monthly payments contribute to paying off the loan. It allows them to track the progress of their loan repayment, make informed decisions regarding prepayments, and estimate the total interest paid over the loan term. Tips for Getting a Better Loan Interest Rate Securing a better loan interest rate can save you a significant amount of money over time. Here are some tips to help you improve your chances of getting a favorable rate: Improve Your Credit Score Maintaining a good credit score is key to obtaining favorable loan terms. Pay your bills on time, keep credit card balances low, and avoid unnecessary credit inquiries to enhance your creditworthiness. Shop Around for the Best Rates Don't settle for the first loan offer you receive. Shop around and compare interest rates from different lenders. Look for reputable lenders who offer competitive rates and favorable loan terms. Negotiate with Lenders Negotiating with lenders can sometimes lead to better interest rates. If you have a strong credit history or a good relationship with a financial institution, don't hesitate to discuss your options and negotiate for a lower rate. Consider a Cosigner If your credit score is less than stellar, having a cosigner with excellent credit can help you secure a better interest rate. A cosigner is someone who agrees to take responsibility for the loan if you default. Their good credit history can offset the risk associated with your credit score and increase your chances of getting a lower rate. [wprpi title="Recent posts" by="category" post="3" icon="show"] Conclusion Calculate loan interest rates: Calculating loan interest rates is a crucial step in the borrowing process. By understanding the different types of interest rates, the factors that affect them, and how to calculate them, borrowers can make informed decisions about their loans. Remember to consider your credit score, loan term, economic conditions, and loan amount when evaluating interest rates. Utilize tools such as loan amortization schedules to visualize your repayment journey. Additionally, implementing strategies like improving your credit score, shopping

around for the best rates, negotiating with lenders, and considering a cosigner can help you secure a more favorable interest rate. With this comprehensive guide, you are now equipped with the knowledge to navigate the world of loan interest rates effectively. FAQs 1. How do I improve my credit score? Improving your credit score takes time and effort. Start by paying your bills on time, reducing credit card balances, and addressing any errors on your credit report. Over time, these actions can positively impact your credit score. 2. Is it better to have a fixed or variable interest rate? The choice between a fixed or variable interest rate depends on your financial goals and risk tolerance. A fixed rate offers stability, while a variable rate can potentially save you money initially but comes with the risk of future rate increases. 3. Can I negotiate my loan interest rate? Yes, you can negotiate your loan interest rate. It's always worth discussing your options and negotiating with lenders, especially if you have a strong credit history or an existing relationship with the financial institution. 4. How often should I review my loan amortization schedule? It's a good practice to review your loan amortization schedule periodically, especially if you make extra payments or experience changes in your financial situation. Regularly reviewing the schedule helps you track your progress and make informed decisions. 5. Are there any prepayment penalties for loans? Some loans may have prepayment penalties, which are fees charged for paying off the loan before the agreed-upon term. Before signing any loan agreement, it's essential to understand if there are any prepayment penalties and factor them into your decision-making process. References Investopedia. (n.d.). Loan Amortization. Retrieved from https://www.investopedia.com/terms/a/amortization.asp MyFICO. (n.d.). How to Improve Your Credit Score. Retrieved from https://www.myfico.com/credit-education/improve-your-credit-score U.S. News & World Report. (2021). How to Get the Best Personal Loan Interest Rates. Retrieved from https://loans.usnews.com/how-to-get-the-best-personal-loan-interest-rates The Balance. (n.d.). Fixed Rate vs. Variable Rate Loans: Which is Right for You? Retrieved from https://www.thebalance.com/fixed-rate-vs-variable-rate-loans-959224 The Balance. (n.d.). Compound Interest. Retrieved from https://www.thebalance.com/what-is-compound-interest-315597

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Capital Markets 2018 Year In Review And Trends To Consider For 2019

Market Conditions

After eight separate rate hikes, the federal funds rate is now at 2.25 percent, up from 0.25 percent during the almost seven post-credit crisis years. In response to improving U.S. economic performance, the Federal Reserve has signaled that it expects another 0.25 percent rate hike in December 2018 and then incremental movements to 3.00 percent in 2019 and 3.50 percent in 2020. The Fed is pursuing these hikes with the goal of finding the right balance between fueling growth and containing inflation.

One interesting aspect of the rate environment has been the flattening of the yield curve (shown above). As the Fed raised short-term rates, long-term rates have moved—but not as much. If this holds, long-term investors, which feel the consequences of inflation the most, will either signal that they do not share the Fed’s concerns about inflation or are motivated by other considerations. Significant single-day moves in longer-term treasuries posted in the early days of October, so perhaps our animal spirits really are awakening and we are headed to higher rates paired with a “normal” curve.

The yield curve consideration for 2019 is tied to questions about the pace and impact of our journey to higher rates:

Will the Fed hold to its indicated pace of rate hikes, and if so, how will the yield curve respond?

After 10 years of “never seen that before” movements in the global fixed-income markets, is history still a decent guide for making yield curve-driven decisions?

Is it likely that we may once again head into a relatively short duration, flat-curve environment, or are we in for a different experience?

Curve shape is important because it influences matters ranging from capital structure composition to trade opportunities. A flat-curve environment supports several capital structure tilts:

The issuance of fixed-rate debt: All things being equal, a flat yield curve offers a lower reward for incurring the risks that accompany unhedged floating-rate debt. This dynamic is supported by the continued low level of absolute interest rates. Of course, issuers continue to access floating-rate debt to achieve and properly manage their debt portfolios, either to reach a fixed-to-floating target or to maintain a synthetic fixed structure.

The incurrence of long-duration, fixed-income liabilities (bonds or swaps): Flat curves mean the cost to extend fixed income duration is relatively low (i.e., low spread between 10-year and 30-year rates). Again, when combined with relatively low absolute rates, there is a bias to incur longer-term liabilities.

The use of forward-starting products (bonds or swaps): A flat yield curve reduces the carry costs associated with forward-starting positions and makes delayed delivery structures more appealing. Swap-based forward structures are fairly easy to implement, but the development to watch is the forward period that can be achieved using bond-based structures.

The use of specific trading strategies: A “constant maturity swap” is representative of the opportunity to take a trading position against curve shape. With this product, an organization pays one-month or three-month LIBOR and receives a percentage of the five-year or 10-year constant maturity swap. As the curve flattens, the organization can lock in a relatively higher ratio. Once that higher ratio is locked in, increasingly positive cash flows will be generated as the yield curve reverts to a more normal, upward slope.

Capital and Credit Considerations

Similar to the capital markets, the strategic and operating environment confronting healthcare organizations remains in transition, with risks embedded in operations, a changing competitive environment, and investment requirements that impact both balance sheet and operating resources. Despite these issues, the amount and diversity of capital available is impressive. Traditional bond investors remain supportive across all rating classes, and the sector continues to attract strong participation across capital pools, such as real estate, equipment, and other types of specialty investors.

A consideration rolling into 2019 is whether the healthcare industry will retain this access to diversified capital pools or whether funding will be adversely impacted by an improving U.S. economy or organizational operating challenges. The issue is especially important with the bank sector, given that direct and contingent products are critical to the support of most floating-rate debt portfolios held by hospitals and health systems. Non-bank floating-rate products are available, but they have been less reliable or require structured products that are seen as either too complex or risky for organizations to embrace. Bank reliance remains a risk factor for the industry, making the identification of alternative strategies an important consideration.

Another question is whether the industry is positioned to take advantage of all available types of capital. One representative issue is whether the facilities and equipment portfolios carried on healthcare balance sheets are properly sized and capitalized. If these portfolios are too large, resource deployment may be inefficient. This scenario is not acceptable in an increasingly strained operating environment, where efficiency in resource deployment is critical. The best solution would be to monetize the excess investment for redeployment into higher-returning activities. A solid understanding of the composition and strategic role of current asset portfolios is required for organizations to reach a reasoned point of view around whether the portfolio is over- or undersized and how best to respond.

Relative Value

Another consideration going into 2019 is the relative value between tax-exempt and taxable instruments and how this impacts borrowing activity. A reduction in the issuance of fixed-rate, tax-exempt debt occurred in 2018. This drop was expected following the elimination of advance refunding transactions under the 2017 tax reform act. Whether the reduction was not material enough or some other forces are in play, the reduction in municipal supply seems to have had a muted impact on the relative value of long-duration, tax-exempt instruments. For many organizations, this has continued to provide economic support to the issuance of taxable debt at the longer end of the yield curve.

Different relative value “action” has occurred at the front end of the yield curve—where better net cost performance periodically emerged from structures like put bonds, or put bonds paired with short-duration, fixed-receive swaps to create synthetic floating-rate debt. Market-driven opportunities come and go, so it is important to determine on the front end whether the organization is interested so it can position itself to respond.

Capital Structure Risk Considerations

Floating-rate debt is a critical part of the capital structure of most healthcare organizations, so tracking relevant trends remains important going into 2019. Attention should be paid to true or core variable-rate debt, but also to the role that quasi floating-rate strategies, such as basis swaps, can play in managing capital structure risk and cost. The relevant considerations remain the amount of capital structure risk the organization should take and the mechanisms used to create the target exposure. In the floating-rate product world, most attention has been responding to the decline in corporate tax rates from last year’s tax reform and how those lower tax rates impact the economic appeal of bank direct-purchase transactions. The decision confronting organizations is whether to:

Remain in the private market structure, with the advantage of not having to do a public offering

Transition back to a structure that requires a public debt offering, such as variable-rate demand bonds

Use structured products, including various interest-rate swaps, to create the exposure

This last factor—the use of structured products—is critically important. The 2007 credit crisis created significant capital structure dislocations, with some particular challenges attached to fixed-pay swap portfolios. The challenge for every healthcare organization going forward is compartmentalizing the past experience to make good and reasoned decisions about the current use of interest-rate swaps and other structured products.

No different than considering the use of hedge funds or alternatives in investment portfolios, derivatives and other structured products can create the opportunity to pursue the cost benefits of floating-rate exposure while managing underlying risk exposures. Organizations that have significant floating-rate exposure likely need to manage their bank exposure, and they may be able to realize an improved risk position by using alternative structures. Organizations that have minimal floating-rate exposure may be able to reduce cost through the use of swaps or other products that allow the introduction of targeted risks.

Read more on https://www.kaufmanhall.com/ideas-resources/article/capital-markets-2018-year-review-and-trends-consider-2019

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Refection 12 The Costs of Inflation 1. The costs associated with inflation is the uncertainty, that lead to lower levels of investment, and lower economic growth. For individuals, inflation can lead to a fall in the value of their savings and redistribute income in society from savers to lenders and those with assets. At extreme levels, inflation can destabilize society and destroy confidence in the economic system. Few examples of the costs of inflation: Reduced international competitiveness: If a country has a relatively higher inflation rate than its trading partners, then its exports will become less competitive, leading to a fall in exports and a deterioration in the UK current account. This is particularly a problem for a country in a fixed exchange rate. For example, countries in the Euro, such as Greece, Ireland and Spain experienced higher inflation than northern Eurozone, leading to record current account deficits (over 10% of GDP in 2007. The un-competitiveness also caused a fall in economic growth. However, if a country is in a floating exchange rate-then the high inflation can be offset by a depreciation in the currency. Though this still has an economic cost as it is a decline in the terms of trade and more expensive imports. Confusion and uncertainty: When inflation is high, people are more uncertain about what to spend their money on. Also, when inflation is high, firms are usually less willing to invest- because they are uncertain about future prices, profits and costs. This uncertainty and confusion can lead to lower rates of economic growth over the long term. This is one of the main concerns about high inflation rates. Countries with low and stable inflation rates-tend to have improved economic performance over countries with higher inflation. Boom and bust economic cycles: High inflationary growth is unsustainable and is usually followed by a recession. By keeping inflation low, it enables a long period of sustainable economic growth.  Income redistribution: Inflation will typically make borrowers better off and lenders worse off. Inflation reduces the value of savings, especially if the savings are in the form of cash or bank account with a very low-interest rate. Inflation tends to hit older people more. Often retired people rely on the interest from savings. High inflation can reduce the real value of their saving and real incomes. The Costs of Deflation Deflation is defined as a fall in the general price level. It is a negative rate of inflation. The problem with deflation is that often it can contribute to lower economic growth. This is because deflation increases the real value of debt-and therefore reducing the spending power of firms and consumers. Also, falling prices can discourage spending as consumers delay their purchases. Deflation is not necessarily bad-especially if it is caused by increased productivity. But often periods of deflation have led to economic stagnation and high unemployment. Few examples of the costs of deflation: Discourages consumer spending: When there are falling prices, this often encourages people to delay purchases because they will be cheaper in the future. Deflation can discourage consumers from buying luxury goods / non-essential items, e.g., flatscreen TV-because you could save money by waiting for it to be cheaper. Therefore, periods of deflation often lead to lower consumer spending and lower economic growth; this, in turn, creates more deflationary pressure in the economy. Increase real value of debt: Deflation increases the real value of money and the real value of debt. Deflation makes it more difficult for debtors to pay off their debts. Therefore, consumers and firms must spend a bigger percentage of disposable income on meeting debt repayments. (in a period of deflation, firms will also be getting lower revenue, and consumers will likely get lower wages). Therefore, this leaves less money for spending and investment. This is particularly a problem in a  HYPERLINK “http://econ.economicshelp.org/2011/09/balance-sheet-recession.html” balance sheet recession where firms and consumers are trying to reduce their exposure to debt.  Increased real interest rates: Interest rates cannot fall below zero. If there is deflation of 2%, this means we have a real interest rate of + 2%. In other words, saving money gives a reasonable return. Therefore, deflation can contribute to an unwanted tightening of monetary policy. This is particularly a problem for Eurozone countries which don’t have recourse to any other monetary policies like quantitative easing. This is another factor that can lead to lower growth and higher unemployment. Real wage unemployment: Labor markets often exhibit sticky wages, workers resist nominal wage cuts (no one likes to see their wages cut, especially when you are used to annual pay increases. Therefore, in periods of deflation, real wages rise. This could cause  HYPERLINK “https://www.economicshelp.org/blog/1507/economics/wages-and-unemployment/” real-wage unemployment.  HYPERLINK “https://www.economicshelp.org/blog/1247/economics/european-unemployment-2/"Unemployment in Europe is a major problem-and low inflation is one reason. 2. Which is Most Important Would that be a problem and for Whom: HYPERLINK "https://www.economicshelp.org/wp-content/uploads/2014/05/Screen-Shot-2014-05-28-at-09.42.35.png” What I gather inflation can reduce the value of money and deflation is only good if prices fall, and your disposable income rises. It is true that some people, especially net savers, may feel better off during a period of deflation. But the problem is the wider macro-economic consequences of recession and unemployment. Five Reasons to worry about Deflation: Deflation is a generalized decline in prices and, sometimes, wages: Sure, if you’re lucky enough to get a raise, your paycheck goes further–but those whose wages decline or who are laid off or work fewer hours are not going to enjoy a falling price index. It can be hard (though, as we’ve seen, not impossible) for employers to cut nominal wages when conditions warrant; it’s easier to give raises that are less than the inflation rate, which is what economists call a real wage cut. And if wages are, as economists say, marked by “downward nominal rigidity,” then employers will hire fewer people. As economic textbooks teach, the prospect that things will cost less tomorrow than they do today encourages people to put off buying. If enough people do that, then businesses are less likely to hire and invest, and that makes everything worse. Deflation is terrible for debtors. Prices and wages fall, but the value of your debt does not. So, you’re forced to cut spending. This applies to consumers and to governments, and it is one of the biggest issues in Europe right now. As Yale University economist Irving Fisher  HYPERLINK “https://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf” wrote decades ago, debtors are likely to cut spending more than creditors increase it, and this can turn into a really bad downward spiral. Cutting interest rates below zero is very hard. Yes, one way that central bank magic works is that the Federal Reserve and the European Central Bank cut inflation-adjusted interest rates below zero when times are bad, hoping to spur borrowing, spending and investment. But it’s almost impossible for them to cut rates below zero. (Sure, there are some examples of negative interest rates, but they’re not very negative.) In today’s economy inflation worries me more. Because if the cost of living does not equal to the current inflation, then I foresee more catching up on bills, depletion of hard-saved assets, and the possibility of workplace position displacement. Economics Help HYPERLINK “https://www.economicshelp.org/macroeconomics/inflation/costs-inflation/” Costs of Inflation - Economics Help (Tejvan Pettinger, August 8. 2019) Economics Help HYPERLINK “https://www.economicshelp.org/blog/978/economics/definition-of-deflation/” Problems of deflation - Economics Help (Tejvan Pettinger, December 9. 2019) HYPERLINK “https://cliffcore.com/why-is-inflation-bad/#:~:text=Inflation%20is%20mostly%20regarded%20as%20bad%20because%20it,because%20it%20dramatically%20reduces%20the%20value%20of%20money."Why Is Inflation Bad? - Cliffcore (January 12. 2020) HYPERLINK "https://www.brookings.edu/opinions/5-reasons-to-worry-about-deflation/” 5 Reasons to Worry About Deflation (brookings.edu)(David Wessel, October 16. 2014)

[tingkwok26]

Know When To Part Prepay A Home Loan｜Personal Loan｜EMVertex Credit

If you have a home loan, it is possible that you might have faced the dilemma at least once whether to make part prepayment of your home loan or invest that extra sum you might have received as your bonus. As home loan is generally one of the biggest loans one might avail of during the lifetime, and there is no prepayment penalty, you would want to get rid of it as soon as possible and be debt-free. However, making the decision whether to make part prepayment or invest the sum is not that easy in case of home loans because there are multiple factors that you need to consider, including the rate of interest on loan, remaining tenure, rate of return from the investment, tax benefit forgone on interest and principal repayment, among others. However, there are certain situations when it is advised to make the part prepayment rather than investing. Let’s explore them.

Rate of return is lower

In case you are planning to prepay your loan, you first need to calculate the opportunity cost that is the benefit forgone for not investing the same sum that you are planning to prepay. In case the opportunity cost is lower than the money saved through interest, it would make sense to make part prepayment of home loan. In case you have taken a home loan of ₹50 lakh with a tenure of 20 years at an interest rate of 7.5%, and if you make partial prepayment of ₹5 lakh at the end of the fifth year, then you will save an interest of ₹8.8 lakh over the tenure of loan. At the same time, if you invest it in a fixed deposit, which is currently giving an interest rate of around 5.4%, you will earn ₹6 lakh at the end of 15 years. So, if one calculates the post-tax return on FDs, the gains would go down further.

Given the fact that the rate of interest on FDs and other small saving instruments is at a multi-decade low, planners are advising people to make prepayment on home loans. “The home loan interest rates have come down to below 8% and there is hardly any debt instrument that can deliver a return of around 8% post-tax. If one invests in equity there is a probability of earning higher return, but then it carries risk as well, as there is no guarantee of earning such return,” said Melvin Joseph, a Sebi-registered investment adviser and founder of Finvin Financial Planners.

Experts say while comparing the rate of return from the investment with the rate of interest on loan, borrowers should also remember that as the loan tenure is long, it is expected that the interest rate cycle may reverse. So, though the rate of interest is low now but it may go up going forward in case the Reserve Bank of India (RBI) raises rates. In case of floating rate home loan, lenders will revise upwards. Therefore, the interest rate on loan may go up, and hence, will increase the debt burden.

“RBI has not deducted interest rates in the past two monetary policy reviews, and given the fact that inflation has started rising, we may not see further rate cuts,” said Joseph.

Limit credit utilization

When buying a house people generally overstretch, assuming that their financial situation will get better going forward, as salaries increase. Higher equated monthly instalments (EMIs) means higher credit utilization, which is the percentage of your total credit limit you are using.

With a lot of people facing job threats, it is advisable to prepay home loan and bring down credit utilization to a lower level as it will be difficult to pay EMIs in case the earning member faces a job loss or pay cut.

Generally, it is advisable that EMIs shouldn’t go beyond 30-40% of the monthly in-hand income, as it will lead to higher credit utilization on your part. “The proportion between EMI and monthly income should be below 40% of the take-home monthly income. This should be inclusive of all the EMIs. If the EMI is exceeding 40%, then one should consider renting over buying. For someone who is already paying EMI above the prescribed levels, prepaying could make sense, but on the other side, they should also ensure to build a corpus for their future financial goals,” said Nitin Vyakaranam, founder and CEO of ArthaYantra.

By limiting the EMIs to 40%, one can allocate the rest towards savings and investments as well as expenses.

“Since buying a home is unlikely to be the only financial goal, with other goals like retirement and education for children, among others, it is best to stick to 30%. That allows multiple goals to get achieved as well. In an uncertain job environment, prepaying loans in tranches consistently may be a good idea to pay off the loan faster than planned,” Vishal Dhawan, founder, Plan Ahead Wealth Advisors.

Higher credit utilization also impacts the credit score, and hence, may impact the future borrowing capabilities. Therefore, it’s better to restrict EMIs to up to 40% of the monthly take-home salary.

Finding the fine balance

Being debt free is a bliss, but it’s difficult to achieve, therefore, experts advice to find a fine balance. “Although no debt is an excellent situation to be in, but one has to be mindful of the fact that they must have proper emergency fund and health insurance to take care of any exigencies,” said Pankaj Mathpal, founder, Optima Money Managers.

In case you have an extra sum, first you should ensure that you have proper emergency corpus. Given the fact there is a lot of uncertainty in the job market, planners are advising people to ensure they have an emergency corpus to take care of up to one year of expenses in case of single-income families. Whatever is left after that can be utilized towards prepaying home loan to reduce the debt.

Via:Livemint-News

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[newsfundastuff]

Wall Street could recover before coronavirus subsides – but the global economy won’t be the sameNationalism and speculation have seldom had a better opportunity to combine forces as the one riding today on the coattails of Covid-19, known as the coronavirus.When Covid-19 leapfrogged from China to Italy, even ardent Europeanists normally appreciative of open borders joined the deafening calls to end freedom of movement across Europe’s national borders – a longstanding demand of nationalists. Meanwhile, the money men speculating on government debt are performing a classic flight from Italian to German government bonds, seeking the financial safety that only the continent’s hegemon can offer during any crisis. As if in a bid to remind us of the great contradiction of our times, Covid-19 is illuminating gloriously the freedom of money to transcend a borderless financial universe while humans remain as fenced in as ever.Meanwhile in the United States, President Trump is combining his standard call for taller walls with a fresh instruction to moneymen to “buy the dip” in Wall Street, rather than to follow their natural instinct to seek refuge in the boring but safe bond markets. A great deal will depend on whether financiers believe Mr Trump or not, and not just because this is an election year.If speculators do believe the American president, Wall Street will recover swiftly even before the epidemic subsides. The forces of xenophobic financialisation will then have triumphed and America’s progressives will face an uphill struggle on every political front. As for the European Union, ruling elites will breathe a sigh of relief that a new depression was avoided and return to managing as best as they can the economic stagnation of recent times, tinged this time with a large dose of additional, coronavirus-reinforced, xenophobia.> Speculators will make a mint and nationalist forces will milk the ensuing discontent for all its worthWill Wall Street follow Mr Trump’s advice to “buy the dip”? For now, the large players are in two minds. The drop in the stock market does not worry them as such. Their concern is that the recent bull market was running on increasingly suspect debt and that Covid-19 may have pricked a bubble that was going to burst anyway. Similarly in Europe, the worst spectre hovering over investors’ heads is that large corporations, relying for too long on free money from the European Central Bank, may be downgraded from investment to junk-grade – especially so at a time of stagnant domestic demand and a collapsed Chinese import market.Taking a leaf out of the aftermath of the crash of 2008, and the Eurozone crisis that followed, bullish speculators are looking at their central banks, primarily the Fed and the ECB, to do, once again, “whatever it takes” to re-float their flagging fortunes. Two questions keep them up at night: will the central banks oblige? And if they do, will it be enough?The first question is easy to answer: governments are impotent on both sides of the Atlantic. In the United States the federal budget deficit is already at a historic high, especially in the context of a tight labour market, while the Eurozone remains in the straightjacket of its fiscal compact. Therefore the central banks will be forced, whether they like it or not, to step up to the mark. Already we have seen announcements of lower interest rates, even of Japanese-style semi-direct purchases of government and private debt by the monetary authorities.But will it be enough for the central banks to throw more money at the Covid-19-infected money markets? Will the economy go back to where we were a month ago if enough liquidity is pumped into the system? Or will it resemble a slow puncture that demands increasing pump-priming to stay inflated? Moreover, will the new wall of public money push back the wall of xenophobia? The sad answer to the last question is instructive about the economic ones too.When a border closes down, it does not open again easily even if the conditions that caused its closure are largely reversed. This is a safe lesson from Europe’s recent experience. Take, for example, Austria, which closed its border with Italy following the rise of refugee arrivals in the summer of 2015. For a couple of years after that refugee wave had died out, the borders remained shut. Similarly with the borders along the Western Balkans. Why is this relevant to the question of whether increased central bank liquidity will ameliorate the effects of Covid-19 on the economy? To answer, we need to remind ourselves of what happened after the crash of 2008.There were two responses to the 2008 crisis that saved capitalism from total collapse: the gigantic injection of liquidity into the economy by central banks, the Fed above all else; and China, whose government took it upon itself intentionally to build up the greatest private credit bubble in history to replace the lost export demand by a stupendous investment boost. The Fed’s and China’s intervention succeeded in re-floating global finance and putting stock markets onto the path of their longest growth spurt. However, the world did not go back to its pre-2008 ways.Before 2008, Wall Street played a crucial role in recycling non-US surpluses that were the repercussion of American deficits into global investment funding. After 2008, the refloated Wall Street could not perform that task, channelling much of the abundant liquidity not to fixed capital investment but to share buy-backs and other asset purchases. The result was that the post-2008 economy is characterised by savings being permanently in excess of capital goods investment. Since savings are the supply of money and investment its demand, the permanent excess supply of money explains the permanently low, or negative, interest rates. It also explains the downward pressure on median wages against a background of rising asset prices causing unbearable inequality and thus producing the political triumphs of xenophobic nationalism.In precisely the same way that the increased liquidity after 2008 failed to rebalance savings and investment globally, so will any renewed monetary “easing” to counter the ill effects of Covid-19 fail to return the global economy to its pre-February state. Of course, as happened after 2008, speculators will make a mint and nationalist forces will milk the ensuing discontent for all its worth.

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[coin-news-blog]

Why the Birth of Bitcoin Can Be Traced Back to 1971

New Post has been published on https://coinmakers.tech/news/why-the-birth-of-bitcoin-can-be-traced-back-to-1971

Why the Birth of Bitcoin Can Be Traced Back to 1971

Why the Birth of Bitcoin Can Be Traced Back to 1971

The world economy is a complex system that has undergone many different phases in the past century. As strange as it may sound today, there have been times when banking crises were rare, pay was rising alongside productivity, and the U.S. dollar would buy a certain amount of pure gold. Despite its obvious successes in certain areas, the global monetary system that laid the foundations for this time of stable growth eventually failed, and here’s why.

When $35 Bought You an Ounce of Gold

The post-World War II era started with a negotiated monetary system that set the rules for international commercial and financial relations. This was a product of the Bretton Woods agreement from 1944, which created a new financial order in a world devastated by its largest military conflict yet.

The conference in New Hampshire, held before the war was over, established the main pillars of global finance and trade: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group. The General Agreement on Tariffs and Trade (GATT), later replaced by the World Trade Organization (WTO), was signed soon after.

U.S. Secretary of the Treasury Henry Morgenthau Jr. addresses delegates at the Bretton Woods Monetary Conference, July 8, 1944 (Source: World Bank)

The governments behind the Bretton Woods system, many of them wartime allies against Nazi Germany, aimed to create a world in which a major armed conflict and a global depression could never happen again. That was to be achieved by building an effective international monetary system and reducing barriers to free trade. Over 700 representatives of 44 countries hammered the agreement in the course of a month. No bankers were invited to take part, by the way.

The delegates decided that their monetary construct should rest on the U.S. dollar as the world’s reserve currency. In an effort to replicate the pre-war gold standard, although in a limited form, the dollar was tied to the precious metal at a fixed price. The United States government committed to convert dollars into gold at $35 an ounce. The U.S. currency became the new gold standard, while retaining flexibility in comparison with real gold.

A system of fixed exchange rates was then introduced, in which all other major currencies were pegged to the gold-backed U.S. dollar. Participating nations had to maintain currency prices within 1% of parity through interventions in their foreign exchange markets. Purchases and sales of foreign currency were constantly made to keep rates close to the target.

The Good, the Bad, the Ugly

The Bretton Woods system was effectively a monetary union with the dollar being its main currency. For some time it generated the stability the post-war world needed to recover and rebuild. Virtually no major country experienced a banking crisis during the period the agreement was respected, between 1945 and 1971.

Speculative financial flows were seriously curtailed and investment capital was channeled into industrial and technological development instead. Helping national economies grow, creating jobs and lowering trade barriers were to give peace a better chance. And to a large extent they did, aside from cold war proxy conflicts.

In 1971 the US President Kills The Gold Standard

Several notable achievements resulted from the Bretton Woods arrangement in a variety of domains. An online portal called WTF Happened In 1971?, the year when President Nixon’s administration unilaterally terminated the U.S. dollar’s convertibility to gold, summarizes most of them, backed with astonishing numbers. For example, up until Washington’s decision to end the dollar-gold standard, productivity rose steeply and wages, unlike nowadays, didn’t fall behind.

In other words, the rising value of goods and services translated into rising pay for workers. The 119% increase in productivity from 1947 to 1979, the last year when these indicators were moving together, was closely followed by a 100% positive change in the average hourly compensation. Since then, until 2009, productivity has grown by a whopping 80%, while compensation scored only an 8% increase, the quoted data shows.

Similar trends can be observed with many other pairs of indicators. Divergence between real GDP per capita and average real wage in the U.S. has been growing steadily since the 70s, according to the calculations of the Bureau of Economic Analysis and the Bureau of Labor Statistics. The consumer price index skyrocketed after the untying of the dollar from gold. The same applies to the median sales price of new homes sold in the country. And against this backdrop, divorce prevalence and incarceration rates in the U.S. increased markedly.

The post-war semi-gold standard mitigated income inequality in the United States, which had been rising in the years following the establishment of the Federal Reserve System in 1913 and jumped again after the U.S. government decided to turn the dollar into purely fiat money. Since 1971, the top 1% of earners have seen their income grow significantly, while that of the bottom 90% has remained almost unchanged for decades. The curves crossed somewhere in the beginning of the century and in the years after the 2008 global financial crisis the rich have been getting richer, while the poor have been getting poorer again.

Other negative trends after the abolition of the last gold standard include the ballooning U.S. national debt, from well below a trillion dollars in the 70s to over $20 trillion in 2018. As of June 2019, federal debt held by the public amounted to $16.17 trillion. Last year it was approximately 76% of GDP and the Congressional Budget Office expects it to reach over 150% by 2040. At the same time, the United States’ goods trade balance has dropped dramatically, reaching a record low of almost -$80 billion at the end of December.

Will the Next Reserve Currency Be Crypto?

Bretton Woods, despite its positives, had some significant flaws that eventually led to its demise. Unlike the gold it was backed by, the dollar, which was the system’s reserve currency, could be manipulated by the powers in Washington in accordance with America’s own interests, and it was. Dollars were supposed to provide liquidity to the world economy but initially the United States wasn’t printing enough of them. As a result, its partners experienced shortages of convertible currency. And in the later years the opposite occurred, the greenback was too inflated by the U.S. It quickly became evident that the agreement is tailored to the interests of the United States, which at the time of its signing owned two thirds of the global gold reserves.

In essence, the monetary union gave too much power to the U.S. and was only going to work as long as other countries were willing to accept the status quo. With Washington exporting inflation to the rest of the world, however, its partners started to convert large amounts of dollars into gold while the U.S. was ratcheting up the political pressure on them to accept and keep its printed money at fixed rates against their national currencies. Eventually, countries like France decided that enough is enough and started selling their dollars for gold. The U.S. then broke the link between its currency and the precious metal, which, along with the return of floating exchange rates, effectively put an end to Bretton Woods and the gold standard.

A similar situation currently exists in Europe’s own monetary union. Critics say much of its problems stem from its very design, which heavily favors the interests of Germany, the continent’s economic locomotive and one of the world’s largest exporters. The government in Berlin is a supporter of low inflation which ensures German high tech industrial exports continue to bring high revenues. However, in the Eurozone’s southern flank countries such as Italy, Spain, Portugal, and Greece need higher inflation to remain competitive as exporters.

It is becoming evident that a reserve currency beyond the control of various governments would be an improvement over fiat money subordinate to the national interests of one superpower or another. A cryptocurrency that serves as a means of exchange, store of value, unit of account, and which cannot be inflated or deflated through biased political decisions could be an instrument that would facilitate global commercial and financial transactions without favoring a side. Besides, participating parties would own the real asset itself and not some derivative.

Satoshi Nakamoto must have thought about these matters when designing Bitcoin. The person, or persons, behind this name listed a symbolic date as their birthday on Satoshi’s P2P Foundation profile – April 5, 1975. Be it intentional or serendipitous, that’s a date which evokes the historical development of relations between people, government and money.

On April 5, 1933, through Executive Order 6102, the U.S. government forbid its citizens from “hoarding of gold coin, gold bullion, and gold certificates.” The aim was to artificially increase demand for its fiat currency at the expense of demand for gold. During the Bretton Woods era, only foreigners, and not U.S. citizens, were allowed to convert dollars into gold, which is arguably one of the system’s flaws. The order was reversed in 1975, making gold possession in the United States legal again.

If you are looking to securely acquire bitcoin cash (BCH) and other leading cryptocurrencies, you can do that with a credit card at buy.Bitcoin.com. You can also freely trade your digital coins using our noncustodial, peer-to-peer trading platform. The local.Bitcoin.com marketplace already has thousands of users from around the world and is growing fast.

Source: news.bitcoin

[chrisburns733-blog]

How to decide timeshare is a smart move for you?

Love taking your annual vacations? Then you might consider investing in a timeshare, a vacation property that you share with others and get to visit certain times of the year. But is buying such a property a good move?

That depends on your goals.

If you expect to one day earn a profit when you sell your vacation property, then a timeshare is not a smart choice. These properties rarely increase in value, and it can be difficult to find a seller willing to pay top dollar for them. But if you prefer a fixed vacation spot in a location that you know you’d like to visit each year? Then a timeshare might work. More about timeshare : http://www.timesharerelease.com

The key to deciding whether a timeshare is a smart move for you is to carefully consider your own vacation habits. Timeshares aren’t a good choice for those who like traveling to different cities and countries each year but might work for those who prefer vacationing in the same spot on an annual basis.

Just be sure to remember that a timeshare, no matter how much you enjoy it, will never bring a financial windfall when it’s time to sell. “A timeshare can be a nice way to travel, but it should never be confused with an investment,” said Gordon Newton, author of the Consumers Guide to Timeshare Exit and president of Newton Group Transfers in Chandler, Arizona. “It will not increase in value and always has a maintenance fee attached to it.”

How Timeshares Work

As the name suggests, when you buy a timeshare, you are purchasing a vacation property that you share with others throughout the year. In many timeshare arrangements, you get to visit your vacation property once a year.

When you get to visit it depends on the type of timeshare you purchase.

You might purchase a fixed-week timeshare. With this arrangement, you can visit your timeshare property during the same week every year for as long as your contract allows. This type of timeshare provides predictability and makes it easy to plan your trip. You might, though, get bored traveling to the same vacation property during the same week every year.

If you don’t feel like traveling during a given year you can try to rent out your block of time to other travelers. You can also switch times with other owners. Of course, this works best when you own a timeshare in a popular location. How To Get Out of Paying Your Timeshare Maintenance Fees? http://www.timesharerelease.com/how-to-get-out-of-paying-your-timeshare-maintenance-fees

Floating timeshares are a bit different. In this arrangement, you can reserve your property any week during a certain time period. Maybe you can visit your timeshare sometime during the months of July, August or September, for instance. Not surprisingly, it’ll cost more to reserve time during the more popular traveling months of the year. Another option is the points system. This arrangement is more complicated: You can stay at different timeshare properties, but the properties and times available to you depend on the number of points you’ve accumulated. You get points by buying into a timeshare or by purchasing them from the vacation club of which you are a member. You can buy a timeshare directly from a vacation club offering them or from current owners trying to sell their properties. Buying from an individual owner is often a better bargain.

The Pros and Cons

Newton works with consumers to help them get rid of unwanted timeshares. He said that consumers should never consider timeshares to be a financial investment. Timeshare 101: How To Sell Bluegreen Property http://www.timesharerelease.com/timeshare-101-how-to-sell-bluegreen-property

Why? Because most consumers won’t be able to sell a timeshare they no longer want and make a profit, Newton said. Timeshares also come with maintenance fees, something that will eat away at any potential profit owners might make when they eventually sell their timeshares. Those maintenance fees are a big negative. Newton said that owners usually pay these fees each year. These fees usually increase annually, too, usually at a rate higher than inflation, he added. This doesn’t mean, though, that a timeshare is always a bad move. Those consumers who understand that a timeshare will cost them money and not make them any, might enjoy having a guaranteed vacation spot each year, Newton said. This is especially true if the timeshare is a nicely maintained property in a desirable location. The downside here? You might grow tired of vacationing in the same location each year. That’s when the challenge of a timeshare – getting rid of one – kicks in. You might have to pay a third party to help you get out of a timeshare arrangement if you can’t find someone to buy your property. How To Cancel A Vacation Club Contract http://www.timesharerelease.com/how-to-cancel-a-vacation-club-contract

“When they are no longer interested in traveling to that location, they will have to deal with the burden of getting out of the timeshare, which could cost money if an exit company or attorney is required,” Newton said. “Sometimes you just can’t find a buyer, and the resorts typically won’t take it back.”

Another challenge with timeshares? You might struggle to book a vacation at your location during popular weeks. You could avoid this by purchasing a fixed-week timeshare, where your vacation time is guaranteed each year. But if you don’t have one of these, you might struggle to book your location during popular times such as the height of the summer or during spring break weeks.

Newton said that timeshares often come with unexpected costs. The resort operating your timeshare might need to issue a special assessment for repairs such as replacing old roofs or upgrading a community pool. As an owner, you’ll have to contribute to this assessment, which could put an unexpected hit on your budget.

Hunt for Bargains

Paul Moyer, founder of the SavingFreak.com blog, doesn’t recommend that anyone buy a timeshare directly from a resort operator. Owners rarely make any money when they decide to sell such properties, he said. Buyers can usually purchase a timeshare at a much lower cost from the owners of used ones, Moyer said.

“Buying a timeshare directly is never worth the cost,” Moyer said. “There are so many people who are looking to sell their timeshares on the secondary market. Prices for these used timeshares can be as little as 10% of the cost of buying directly from the source.”

Not everyone who owns timeshares feels burned by the experience, though. Kari Lorz, founder of the Money for the Mamas personal finance blog, said that she and her husband purchased a timeshare in 2016. Before they bought, though, they did their research. The main factors they considered? Will they use the timeshare often and what will happen when they decide to sell it? What Is Timeshare Lease And How Can Owners Benefit From It http://www.timesharerelease.com/what-is-timeshare-lease-and-how-can-owners-benefit-from-it

After doing their research, Lorz and her husband invested in a timeshare arrangement through Disney Vacation Club. Through the club, Lorz can vacation at any of 11 properties at locations such as Disneyland; Hilton Head, South Carolina; or Vero Beach, Florida. All of these locations are attractive ones for Lorz.

Disneyland Vacation Club timeshares are also in demand, Lorz said. She said that if she and her husband sold today, they could make a 35% return on their purchase price. Lorz said, too, that she and her family have saved a significant amount of travel costs thanks to the timeshare.

[aaltjebarisca]

Are Timeshares Worth the Money?

Love taking your annual vacations? Then you might consider investing in a timeshare, a vacation property that you share with others and get to visit certain times of the year. But is buying such a property a good move?

That depends on your goals.

If you expect to one day earn a profit when you sell your vacation property, then a timeshare is not a smart choice. These properties rarely increase in value, and it can be difficult to find a seller willing to pay top dollar for them. But if you prefer a fixed vacation spot in a location that you know you’d like to visit each year? Then a timeshare might work.

The key to deciding whether a timeshare is a smart move for you is to carefully consider your own vacation habits. Timeshares aren’t a good choice for those who like traveling to different cities and countries each year but might work for those who prefer vacationing in the same spot on an annual basis.

Just be sure to remember that a timeshare, no matter how much you enjoy it, will never bring a financial windfall when it’s time to sell.

“A timeshare can be a nice way to travel, but it should never be confused with an investment,” said Gordon Newton, author of the Consumers Guide to Timeshare Exit and president of Newton Group Transfers in Chandler, Arizona. “It will not increase in value and always has a maintenance fee attached to it.”

How Timeshares Work

As the name suggests, when you buy a timeshare, you are purchasing a vacation property that you share with others throughout the year. In many timeshare arrangements, you get to visit your vacation property once a year.

When you get to visit it depends on the type of timeshare you purchase.

You might purchase a fixed-week timeshare. With this arrangement, you can visit your timeshare property during the same week every year for as long as your contract allows. This type of timeshare provides predictability and makes it easy to plan your trip. You might, though, get bored traveling to the same vacation property during the same week every year.

If you don’t feel like traveling during a given year you can try to rent out your block of time to other travelers. You can also switch times with other owners. Of course, this works best when you own a timeshare in a popular location.

Floating timeshares are a bit different. In this arrangement, you can reserve your property any week during a certain time period. Maybe you can visit your timeshare sometime during the months of July, August or September, for instance. Not surprisingly, it’ll cost more to reserve time during the more popular traveling months of the year.

Another option is the points system. This arrangement is more complicated: You can stay at different timeshare properties, but the properties and times available to you depend on the number of points you’ve accumulated. You get points by buying into a timeshare or by purchasing them from the vacation club of which you are a member.

You can buy a timeshare directly from a vacation club offering them or from current owners trying to sell their properties. Buying from an individual owner is often a better bargain.

The Pros and Cons

Newton works with consumers to help them get rid of unwanted timeshares. He said that consumers should never consider timeshares to be a financial investment.

Why? Because most consumers won’t be able to sell a timeshare they no longer want and make a profit, Newton said. Timeshares also come with maintenance fees, something that will eat away at any potential profit owners might make when they eventually sell their timeshares.

Those maintenance fees are a big negative. Newton said that owners usually pay these fees each year. These fees usually increase annually, too, usually at a rate higher than inflation, he added.

This doesn’t mean, though, that a timeshare is always a bad move. Those consumers who understand that a timeshare will cost them money and not make them any, might enjoy having a guaranteed vacation spot each year, Newton said. This is especially true if the timeshare is a nicely maintained property in a desirable location.

The downside here? You might grow tired of vacationing in the same location each year. That’s when the challenge of a timeshare – getting rid of one – kicks in. You might have to pay a third party to help you get out of a timeshare arrangement if you can’t find someone to buy your property.

“When they are no longer interested in traveling to that location, they will have to deal with the burden of getting out of the timeshare, which could cost money if an exit company or attorney is required,” Newton said. “Sometimes you just can’t find a buyer, and the resorts typically won’t take it back.”

Another challenge with timeshares? You might struggle to book a vacation at your location during popular weeks. You could avoid this by purchasing a fixed-week timeshare, where your vacation time is guaranteed each year. But if you don’t have one of these, you might struggle to book your location during popular times such as the height of the summer or during spring break weeks.

Newton said that timeshares often come with unexpected costs. The resort operating your timeshare might need to issue a special assessment for repairs such as replacing old roofs or upgrading a community pool. As an owner, you’ll have to contribute to this assessment, which could put an unexpected hit on your budget.

Hunt for Bargains

Paul Moyer, founder of the SavingFreak.com blog, doesn’t recommend that anyone buy a timeshare directly from a resort operator. Owners rarely make any money when they decide to sell such properties, he said. Buyers can usually purchase a timeshare at a much lower cost from the owners of used ones, Moyer said.

“Buying a timeshare directly is never worth the cost,” Moyer said. “There are so many people who are looking to sell their timeshares on the secondary market. Prices for these used timeshares can be as little as 10% of the cost of buying directly from the source.”

Not everyone who owns timeshares feels burned by the experience, though. Kari Lorz, founder of the Money for the Mamas personal finance blog, said that she and her husband purchased a timeshare in 2016. Before they bought, though, they did their research. The main factors they considered? Will they use the timeshare often and what will happen when they decide to sell it?

After doing their research, Lorz and her husband invested in a timeshare arrangement through Disney Vacation Club. Through the club, Lorz can vacation at any of 11 properties at locations such as Disneyland; Hilton Head, South Carolina; or Vero Beach, Florida. All of these locations are attractive ones for Lorz.

Disneyland Vacation Club timeshares are also in demand, Lorz said. She said that if she and her husband sold today, they could make a 35% return on their purchase price. Lorz said, too, that she and her family have saved a significant amount of travel costs thanks to the timeshare.

“We estimated that during our last vacation, we saved $6,000 compared to if we had booked a hotel room,” Lorz said.

Those savings include the cost of the initial investment in the timeshare and its annual maintenance fees, she added.

What experiences have you had with timeshares? Let us know in the comments!

The post Are Timeshares Worth the Money? appeared first on ZING Blog by Quicken Loans.

from Updates About Loans https://www.quickenloans.com/blog/are-timeshares-worth-the-money

[aaronsniderus]

Are Timeshares Worth the Money?

Love taking your annual vacations? Then you might consider investing in a timeshare, a vacation property that you share with others and get to visit certain times of the year. But is buying such a property a good move?

That depends on your goals.

If you expect to one day earn a profit when you sell your vacation property, then a timeshare is not a smart choice. These properties rarely increase in value, and it can be difficult to find a seller willing to pay top dollar for them. But if you prefer a fixed vacation spot in a location that you know you’d like to visit each year? Then a timeshare might work.

The key to deciding whether a timeshare is a smart move for you is to carefully consider your own vacation habits. Timeshares aren’t a good choice for those who like traveling to different cities and countries each year but might work for those who prefer vacationing in the same spot on an annual basis.

Just be sure to remember that a timeshare, no matter how much you enjoy it, will never bring a financial windfall when it’s time to sell.

“A timeshare can be a nice way to travel, but it should never be confused with an investment,” said Gordon Newton, author of the Consumers Guide to Timeshare Exit and president of Newton Group Transfers in Chandler, Arizona. “It will not increase in value and always has a maintenance fee attached to it.”

How Timeshares Work

As the name suggests, when you buy a timeshare, you are purchasing a vacation property that you share with others throughout the year. In many timeshare arrangements, you get to visit your vacation property once a year.

When you get to visit it depends on the type of timeshare you purchase.

You might purchase a fixed-week timeshare. With this arrangement, you can visit your timeshare property during the same week every year for as long as your contract allows. This type of timeshare provides predictability and makes it easy to plan your trip. You might, though, get bored traveling to the same vacation property during the same week every year.

If you don’t feel like traveling during a given year you can try to rent out your block of time to other travelers. You can also switch times with other owners. Of course, this works best when you own a timeshare in a popular location.

Floating timeshares are a bit different. In this arrangement, you can reserve your property any week during a certain time period. Maybe you can visit your timeshare sometime during the months of July, August or September, for instance. Not surprisingly, it’ll cost more to reserve time during the more popular traveling months of the year.

Another option is the points system. This arrangement is more complicated: You can stay at different timeshare properties, but the properties and times available to you depend on the number of points you’ve accumulated. You get points by buying into a timeshare or by purchasing them from the vacation club of which you are a member.

You can buy a timeshare directly from a vacation club offering them or from current owners trying to sell their properties. Buying from an individual owner is often a better bargain.

The Pros and Cons

Newton works with consumers to help them get rid of unwanted timeshares. He said that consumers should never consider timeshares to be a financial investment.

Why? Because most consumers won’t be able to sell a timeshare they no longer want and make a profit, Newton said. Timeshares also come with maintenance fees, something that will eat away at any potential profit owners might make when they eventually sell their timeshares.

Those maintenance fees are a big negative. Newton said that owners usually pay these fees each year. These fees usually increase annually, too, usually at a rate higher than inflation, he added.

This doesn’t mean, though, that a timeshare is always a bad move. Those consumers who understand that a timeshare will cost them money and not make them any, might enjoy having a guaranteed vacation spot each year, Newton said. This is especially true if the timeshare is a nicely maintained property in a desirable location.

The downside here? You might grow tired of vacationing in the same location each year. That’s when the challenge of a timeshare – getting rid of one – kicks in. You might have to pay a third party to help you get out of a timeshare arrangement if you can’t find someone to buy your property.

“When they are no longer interested in traveling to that location, they will have to deal with the burden of getting out of the timeshare, which could cost money if an exit company or attorney is required,” Newton said. “Sometimes you just can’t find a buyer, and the resorts typically won’t take it back.”

Another challenge with timeshares? You might struggle to book a vacation at your location during popular weeks. You could avoid this by purchasing a fixed-week timeshare, where your vacation time is guaranteed each year. But if you don’t have one of these, you might struggle to book your location during popular times such as the height of the summer or during spring break weeks.

Newton said that timeshares often come with unexpected costs. The resort operating your timeshare might need to issue a special assessment for repairs such as replacing old roofs or upgrading a community pool. As an owner, you’ll have to contribute to this assessment, which could put an unexpected hit on your budget.

Hunt for Bargains

Paul Moyer, founder of the SavingFreak.com blog, doesn’t recommend that anyone buy a timeshare directly from a resort operator. Owners rarely make any money when they decide to sell such properties, he said. Buyers can usually purchase a timeshare at a much lower cost from the owners of used ones, Moyer said.

“Buying a timeshare directly is never worth the cost,” Moyer said. “There are so many people who are looking to sell their timeshares on the secondary market. Prices for these used timeshares can be as little as 10% of the cost of buying directly from the source.”

Not everyone who owns timeshares feels burned by the experience, though. Kari Lorz, founder of the Money for the Mamas personal finance blog, said that she and her husband purchased a timeshare in 2016. Before they bought, though, they did their research. The main factors they considered? Will they use the timeshare often and what will happen when they decide to sell it?

After doing their research, Lorz and her husband invested in a timeshare arrangement through Disney Vacation Club. Through the club, Lorz can vacation at any of 11 properties at locations such as Disneyland; Hilton Head, South Carolina; or Vero Beach, Florida. All of these locations are attractive ones for Lorz.

Disneyland Vacation Club timeshares are also in demand, Lorz said. She said that if she and her husband sold today, they could make a 35% return on their purchase price. Lorz said, too, that she and her family have saved a significant amount of travel costs thanks to the timeshare.

“We estimated that during our last vacation, we saved $6,000 compared to if we had booked a hotel room,” Lorz said.

Those savings include the cost of the initial investment in the timeshare and its annual maintenance fees, she added.

What experiences have you had with timeshares? Let us know in the comments!

The post Are Timeshares Worth the Money? appeared first on ZING Blog by Quicken Loans.

from Updates About Loans https://www.quickenloans.com/blog/are-timeshares-worth-the-money

[mikebrackett]

Are Timeshares Worth the Money?

Love taking your annual vacations? Then you might consider investing in a timeshare, a vacation property that you share with others and get to visit certain times of the year. But is buying such a property a good move?

That depends on your goals.

If you expect to one day earn a profit when you sell your vacation property, then a timeshare is not a smart choice. These properties rarely increase in value, and it can be difficult to find a seller willing to pay top dollar for them. But if you prefer a fixed vacation spot in a location that you know you’d like to visit each year? Then a timeshare might work.

The key to deciding whether a timeshare is a smart move for you is to carefully consider your own vacation habits. Timeshares aren’t a good choice for those who like traveling to different cities and countries each year but might work for those who prefer vacationing in the same spot on an annual basis.

Just be sure to remember that a timeshare, no matter how much you enjoy it, will never bring a financial windfall when it’s time to sell.

“A timeshare can be a nice way to travel, but it should never be confused with an investment,” said Gordon Newton, author of the Consumers Guide to Timeshare Exit and president of Newton Group Transfers in Chandler, Arizona. “It will not increase in value and always has a maintenance fee attached to it.”

How Timeshares Work

As the name suggests, when you buy a timeshare, you are purchasing a vacation property that you share with others throughout the year. In many timeshare arrangements, you get to visit your vacation property once a year.

When you get to visit it depends on the type of timeshare you purchase.

You might purchase a fixed-week timeshare. With this arrangement, you can visit your timeshare property during the same week every year for as long as your contract allows. This type of timeshare provides predictability and makes it easy to plan your trip. You might, though, get bored traveling to the same vacation property during the same week every year.

If you don’t feel like traveling during a given year you can try to rent out your block of time to other travelers. You can also switch times with other owners. Of course, this works best when you own a timeshare in a popular location.

Floating timeshares are a bit different. In this arrangement, you can reserve your property any week during a certain time period. Maybe you can visit your timeshare sometime during the months of July, August or September, for instance. Not surprisingly, it’ll cost more to reserve time during the more popular traveling months of the year.

Another option is the points system. This arrangement is more complicated: You can stay at different timeshare properties, but the properties and times available to you depend on the number of points you’ve accumulated. You get points by buying into a timeshare or by purchasing them from the vacation club of which you are a member.

You can buy a timeshare directly from a vacation club offering them or from current owners trying to sell their properties. Buying from an individual owner is often a better bargain.

The Pros and Cons

Newton works with consumers to help them get rid of unwanted timeshares. He said that consumers should never consider timeshares to be a financial investment.

Why? Because most consumers won’t be able to sell a timeshare they no longer want and make a profit, Newton said. Timeshares also come with maintenance fees, something that will eat away at any potential profit owners might make when they eventually sell their timeshares.

Those maintenance fees are a big negative. Newton said that owners usually pay these fees each year. These fees usually increase annually, too, usually at a rate higher than inflation, he added.

This doesn’t mean, though, that a timeshare is always a bad move. Those consumers who understand that a timeshare will cost them money and not make them any, might enjoy having a guaranteed vacation spot each year, Newton said. This is especially true if the timeshare is a nicely maintained property in a desirable location.

The downside here? You might grow tired of vacationing in the same location each year. That’s when the challenge of a timeshare – getting rid of one – kicks in. You might have to pay a third party to help you get out of a timeshare arrangement if you can’t find someone to buy your property.

“When they are no longer interested in traveling to that location, they will have to deal with the burden of getting out of the timeshare, which could cost money if an exit company or attorney is required,” Newton said. “Sometimes you just can’t find a buyer, and the resorts typically won’t take it back.”

Another challenge with timeshares? You might struggle to book a vacation at your location during popular weeks. You could avoid this by purchasing a fixed-week timeshare, where your vacation time is guaranteed each year. But if you don’t have one of these, you might struggle to book your location during popular times such as the height of the summer or during spring break weeks.

Newton said that timeshares often come with unexpected costs. The resort operating your timeshare might need to issue a special assessment for repairs such as replacing old roofs or upgrading a community pool. As an owner, you’ll have to contribute to this assessment, which could put an unexpected hit on your budget.

Hunt for Bargains

Paul Moyer, founder of the SavingFreak.com blog, doesn’t recommend that anyone buy a timeshare directly from a resort operator. Owners rarely make any money when they decide to sell such properties, he said. Buyers can usually purchase a timeshare at a much lower cost from the owners of used ones, Moyer said.

“Buying a timeshare directly is never worth the cost,” Moyer said. “There are so many people who are looking to sell their timeshares on the secondary market. Prices for these used timeshares can be as little as 10% of the cost of buying directly from the source.”

Not everyone who owns timeshares feels burned by the experience, though. Kari Lorz, founder of the Money for the Mamas personal finance blog, said that she and her husband purchased a timeshare in 2016. Before they bought, though, they did their research. The main factors they considered? Will they use the timeshare often and what will happen when they decide to sell it?

After doing their research, Lorz and her husband invested in a timeshare arrangement through Disney Vacation Club. Through the club, Lorz can vacation at any of 11 properties at locations such as Disneyland; Hilton Head, South Carolina; or Vero Beach, Florida. All of these locations are attractive ones for Lorz.

Disneyland Vacation Club timeshares are also in demand, Lorz said. She said that if she and her husband sold today, they could make a 35% return on their purchase price. Lorz said, too, that she and her family have saved a significant amount of travel costs thanks to the timeshare.

“We estimated that during our last vacation, we saved $6,000 compared to if we had booked a hotel room,” Lorz said.

Those savings include the cost of the initial investment in the timeshare and its annual maintenance fees, she added.

What experiences have you had with timeshares? Let us know in the comments!

The post Are Timeshares Worth the Money? appeared first on ZING Blog by Quicken Loans.

from Updates About Loans https://www.quickenloans.com/blog/are-timeshares-worth-the-money

[slcarchives-blog]

Gold Collections & History of Bullion

Dr. Vladimir who is the creator of the division of numismatics at the Smithsonian institution responded generously to my request for illustrations. Indeed I am much to many nevertheless I like to think that at least some of the comments revelations opinions and cancellations expressly in our original. They were have her not always improvement in my editor at Arlington you deserve a special thanks for is a student and Coggins and Josh is in this week.

And finally been certainly not the least is important was the light assistance offered by my understanding wife who cares we laid aside other projects and considerations to eat in typing proofreading and correcting the silver version of the manuscript. Your criticisms and suggestions are always welcome and never without significance the book is better because of them. Or all out effort in the last days what is an indispensable help getting the final version ready for delivery to the publisher on time.

Although the original manuscript was completed in December 1968 world economic events continue to inform starling repeatedly. It's in became clear that through through overriding was needed to include a very important monetary and numismatic developments that occurred during 1969. Furthermore some of the original productions in the first draft of the many skip had already come to pass and consequently will be a little bit of it to the reader. For example I predicted in the moment of black pessimism that the prime interest rate of the US would reach her on her to figure out ETA 9% when it was unheard of at six and half percent. The unenviable goal of eight naff percent was reached less than a year after I had written it. I have never is the forecast of 12 to 15% of all. Also stated that the French Frank was probably next in line for devaluation and was denied with in a year.

I thought it quite possible the future developments in the international monetary drama might see her records different currencies that is currency is no longer maintain it fixed. In terms of gold but a lot of on their own level and a free 40 strange market. I was there at this process that which park has just been cut loose from the school parity temporarily they say and serious discussions are getting way within the IMF the May will result in the introduction of the so-called crawling peg system. Under this proposal of paper currency's except the dollar will be allowed to float across mostly down to their true levels in the marketplace. It is my opinion that the next step be on the crawling peg or any other flexible international monetary arrangements and inevitable one would be to let the dollar it's all float and sink is more through words to it's real value in terms of gold. This would be in a sense that affect the worldwide valuation for the corresponding right in the monetary price of gold which all of our political economic and say it's never going to happen.

The author also has advised as viruses that I would be more inflation more public on rest for their currency the valuations greater danger in the stock and bond markets in continuing called in balance of payment systems for the knighted states. And now appears that all these things involved in her coming to do so exactly is originally outlined. This is brought to the readers attention in order to post the powers of economic forecaster but actually to find it rather depressing that as an artist historian turn economic journalist can directly anticipate months and Vance the course of economic and monetary events the course which appears to take our treasury banking and economical for me completely by surprise but what I'm saying is trying to show that the ordinary common sense and understanding of history or better guys investment decisions and directions and allowing oneself to be tranquilized because I'm in and out is that all too often pass for economic news in the popular press these days.

[ronnykblair]

The Rates Trading Desk in London: How to Break In, and What to Expect on the Job

Is sales & trading still a good industry?

If it is, what’s the best desk for you, and how should you recruit for it?

It’s tough to give universal answers to these questions, so we like to present different groups and let you decide.

We’ve published articles on equities and fixed income, but I’ve always wanted to go into detail on individual desks within those areas.

And just as I had this thought, a reader who works on the rates trading desk at a large bank in London volunteered to share his experiences:

What is the Rates Trading Desk?

Q: Before we get started, can you explain what the “rates trading desk” does and how it’s different from other areas in FICC (Fixed Income, Currency, and Commodities), such as credit trading?

A: Most assets that a bank trades are split into cash vs. derivatives vs. exotics, and the same split applies to the rates trading desk.

“Cash” here means sovereign bonds, while “derivatives” means interest rate swaps and futures, and “exotics” means structured products based on rates, options on swaps, and others.

Of those, we focus on making markets in sovereign bonds and interest rate derivatives.

Sovereign bonds are ones issued by governments, such as U.K. Gilts, U.S. Treasuries, EUR-denominated bonds issued by European countries, and Australian Government Bonds (AGBs).

In London, EUR-denominated bonds and U.K. Gilts are the most common, though there are teams for the others as well.

Interest rate derivatives are financial instruments whose values increase or decrease based on movements in interest rates.

The simplest type is the “vanilla” interest rate swap, where one party receives payments based on a floating interest rate and pays the counterparty based on a fixed interest rate.

If you’re receiving payments based on a floating rate, you hope that LIBOR increases so you receive more; if you’re paying based on a floating rate, you hope that LIBOR decreases so you pay less.

Other derivatives include caps and floors, STIRT futures, Eurostrips, swaptions, and interest rate call options.

“Making a market” means providing liquidity to clients who want to buy and sell.

We commit to buy and sell anything from clients, even if we don’t want the position, and then we address the risk and try to turn it into a profitable trade.

Rates trading is very macro-focused compared with equities and areas of FICC such as credit trading or distressed debt.

In credit trading, you focus on securities like corporate bonds and credit default swaps (CDS), and company-specific knowledge (“the micro”) is critical.

But almost anything could affect interest rates, so you focus on “the macro” on the rates trading desk: economic growth, trade policy, inflation, exchange rates, and monetary policy.

Rates products offer significantly more liquidity than other types of bonds, so flow trading desks here tend to be loud and busy.

When there are central bank policy announcements, geopolitical developments, or economic data releases, activity on the desk flares up.

Rates Trading Desk Recruiting and Interviews

Q: Great, thanks for that overview.

What should you expect in the recruiting process?

A: You don’t specify a desk upfront, so you’ll just apply to the sales & trading divisions of banks, usually starting in August; sometimes you will pick equities vs. fixed income upfront.

Typically, you’ll have a first-round interview with junior traders in-person or on the phone, followed by an assessment center if you’re in the EMEA region (or a Superday if you’re in North America).

Traders look for technically-minded people who are comfortable with numbers and quick decisions under stress, which is why there are so many athletes on the trading floor.

It’s critical to apply early in London, especially if you’re from a non-target school.

Networking definitely “works,” but there are some cultural differences.

Q: Such as?

A: Just as in the U.S. and other regions, alumni networks at top schools are very helpful, but they work much better for recent graduates (i.e., those within 2-3 years of graduation).

After a few years, school affiliation in the U.K. becomes a weaker connection than it is in the U.S., so just going to the same university as a senior trader usually doesn’t cut it.

Traders won’t have time to meet during market hours and generally won’t be inclined for sit-down meetings – so your best bet is to aim for drinks right after work, especially on Thursday nights.

The after-work drinking culture is so prevalent in London that you might even be able to network with traders simply by going bar-hopping at the right times.

In London, Canary Wharf and the area between the Liverpool St. and Bank stations are the hot spots.

Q: That sounds more fun than coffee meetings…

Once you get past the networking stage, are there any London-specific interview differences?

A: Not really; you should expect a few brainteasers and math questions, lots of competency questions (“Why our bank?” and “Why sales & trading?”) as well as questions about market trends and trade ideas.

Especially for macro-oriented and fixed-income desks, you need to articulate clear views about central bank policy, geopolitics, market data, and news stories.

Product knowledge is also helpful so you can answer the “Why S&T?” question convincingly, but groups here stagger their expectations based on your background – they’ll expect someone with an MSF degree to know more than someone with a liberal arts degree.

Q: And what should you expect in S&T assessment centers?

A: Long days! ACs for S&T can sometimes run from 8 AM to 5 PM.

As with any AC, you’ll interview with senior professionals and complete individual and group case studies.

The three most common case studies here are trading games, group investment presentations, and individual trade idea presentations.

With the trading games, you’ll form groups, and in each turn, one group will make a market while the other group will buy and sell. You’ll receive more information about prices and orders in each turn as well.

The winner matters less than how you play the game – always track your positions and P&L and manage risk appropriately (e.g., don’t buy a huge volume of shares under the assumption that you can easily sell them).

Write down what others are doing so you can quote appropriate prices and present your ideas without being overly aggressive.

The usual group presentation task is to recommend 1-2 investments out of a set of 5-10 companies.

There is no “correct” answer, so make a decision quickly and then spend most of your time outlining your pitch and anticipating the questions you’ll get.

You should volunteer for a useful task that no one else wants to do (such as timekeeping or note-taking) so that you come across as a “team player.”

When you present, try to speak at the beginning or end so they remember you, and stick to your allotted time (usually 30 seconds per person).

If you have an observed group discussion, try to bring others into the conversation and don’t just give your opinions the whole time – recruiters like to see “humility.”

With the individual presentation, you’ll receive market information and research, and you’ll have to propose a trade idea.

Once again, make a decision quickly and aim for only a few minutes of presentation time so that you can spend more time answering the interviewers’ questions.

With trade ideas, many students don’t consider how they might hedge the risks.

It is not necessarily a good idea to suggest something specific, such as using call or put options, because you’ll almost always be quizzed on how exactly it would work. And if you don’t fully understand the specifics, it could easily backfire.

However, it is worth doing a bit of research beforehand on possible hedges so you can answer follow-up questions if the interviewers ask you about the topic.

Finally, don’t tell everyone that their desk is your #1 choice, and don’t focus too much on one specific desk.

You need senior traders across the desks to like you, so say that you’re open to anything, even if you do have a preference for one product.

You can always say that you’re very interested in what the person does and that you would like to know more, as markets people love to talk about their own roles.

On the Rates Trading Desk: A Day in the Life

Q: Thanks for that summary.

Can you walk us through an average day on the rates trading desk?

A: I need to be there before the European markets open, so I arrive around 6:30 AM, start preparing my comments for the 7 AM morning meeting, send our “axes” (trades we want to make) to the sales force, and mark my bond prices once the market opens.

I’m then at the desk for almost the entire day until 5 PM, when the market closes, except for ~20 minutes to grab lunch at mid-day.

If U.S. payrolls come in lower than expected, the ECB makes an unexpected announcement, and China announces a new trade deal, activity will spike, and we’ll be very busy making markets for clients (in front of all 8 of my screens).

But if it’s a quieter day with no major announcements or surprises, I’ll spend more time on analysis, Excel modeling, and longer-term projects.

It’s not the type of modeling you do in investment banking – it’s more for retrieving prices and positions and building graphs and analysis for swap curves (for example).

Senior traders rarely stay past 5:30 PM, but junior traders often stay later to finish P&L and risk reporting or other projects. But even they usually leave by 6-7 PM.

Q: How much do you interact with the sales force and structurers?

A: If you cover products with high flow, such as government bonds and swaps, you’ll work with sales force quite a bit.

For example, a salesperson might come to us and ask for a price on a government bond that a client wants to buy. Then, we look at our positions, who the client is, market activity, and recent prices, and give a quote.

The salesperson then relays this quote to the client, and the client says yes or no or makes a counter-offer.

If the trade goes through, the salesperson will confirm and book it, and I’ll start planning the next steps: unwind it right away, keep some or all of it, or buy something else as a hedge.

The structurers tend to have more contact with the sales force than us because the salespeople manage the relationships with clients that want custom products; traders just price and execute the trades and manage risk.

Q: Have new regulations, such as MiFID II, affected the job? What about automation?

A: Yes; they’ve changed the trading floor dramatically over the past decade.

These regulations are intended to reduce insider and rogue trading by making discussions between market participants more transparent, but some people argue that they’re killing liquidity and forcing banks to consolidate.

I think banks will have to specialize in fewer markets in the future, and that consolidation will continue because regulations tend to favor large incumbents.

It’s ironic because regulators want to eliminate “too big to fail” institutions, but many new regulations have the opposite effect because they increase the costs of doing business and grant advantages to large banks that can leverage their franchises.

Evercore closed its European equities execution desk two weeks after MiFID II was implemented, and we’ll continue to see stories like that.

Automation has affected many parts of S&T, but rates products are more complex, and therefore harder to automate, so my desk hasn’t seen a huge impact yet.

But it’s certainly true that banks want to hire computer science graduates and train existing employees to gain the technical and coding skills required to build and maintain trading systems.

Q: How does the advancement process work in S&T?

A: After your 2-3 years as an Analyst, compensation and advancement are less rigidly defined than they are in IB.

Bonuses depend on individual, team, and bank-wide performances, and if you perform well for a few years, you could accelerate your career and compensation.

But the job is also quite volatile – especially when the markets are volatile – and firing rounds can be frequent and ruthless.

There’s a huge range in compensation and advancement because everything comes down to performance. Star traders could advance to the top in 5-10 years, while others could struggle for years and never make it far beyond the entry level.

Your title may change as you move up, but in practice, all that changes are your risk limits – unless you move to the managerial side.

Some traders do move into managerial roles to reduce career volatility, and if they do that, their base salaries tend to increase.

However, they’re also far less likely to earn “star trader” bonus packages as managers, and their total compensation may fall.

Rates Trading Desk Exit Opportunities

Q: On that note, how long do most rates traders stick around? Are there solid exit opportunities for something so specialized?

A: The turnover between teams at different banks is quite high, and it’s common to work at 4-5 different banks over your career.

Rates trading is very specialized, so banks are always looking to poach other traders who have the skill set; normal companies and non-trading firms don’t necessarily place a high value on those skills.

Some traders do leave for hedge funds (usually global macro ones) and prop trading firms, and others switch to different desks, but these options become more difficult as your career progresses.

It is common to switch geographies and move to New York, Hong Kong, or another financial center since you can trade almost anywhere in the world.

But the bottom line is that if you want broad exit opportunities, go into investment banking, or work in sales rather than trading.

Q: Thinking about everything we’ve discussed, who would be a good fit for the rates trading desk, and who would not be a good fit?

A: You’d be a good fit for the rates trading desk if:

You’re comfortable with risk.

You’re able to work in intense environments while communicating with salespeople, clients, and brokers.

You prefer macro analysis.

You prefer fast-paced day-to-day tasks rather than longer-term projects.

You like math, but not quite enough to be a quant.

If you’re more project-oriented, or you want to work at your own rhythm, you’d be better off in structuring or research.

If you’re less comfortable with risk, but you have great people skills and you can work the phones quite well, you’d be better off in sales.

Q: Great. Would you recommend any books or other resources to learn more about this area?

A: Sure. Some of these books get very technical, but if you want to learn more about rates, I’d recommend:

Interest Rate Swaps and Other Derivatives

The Handbook of Fixed Income Securities

Interest Rate Markets: A Practical Approach to Fixed Income

Q: Thanks for your time. I learned a lot!

A: My pleasure.

The post The Rates Trading Desk in London: How to Break In, and What to Expect on the Job appeared first on Mergers & Inquisitions.

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