- Home Prices Are Still Too High
- Pensioner Insolvency Rises Fastest As Baby Boomers Struggle To Pay Off Debts
- Families £3,000 Worse Off
- The Only 2011 Forecast With A Bizarro Chance Of Getting It All Correct
- China Slows As Tightening Start To Bite
- Forever Stamps Tell Us Much
- Estonia’s Entry Expands Euro Into Former Soviet Union
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Most economists concede that a lasting general recovery is unlikely without a recovery in the housing market. A marked increase in defaults and foreclosures from today’s already elevated levels could produce losses that overwhelm banks and trigger another, deeper financial crisis.
Pensioners, although they made up less than 4pc of the total, now form the age group that is seeing the highest growth rate for insolvency, with a 14pc rise that RSM said could point to a worrying trend. “This is the first generation of people who have been used to carrying debt,” Mark Sands, RSM’s head of bankruptcy and personal insolvency said. “They’ll take out a new loan to pay off the old loan and to tidy up their credit card, and it just carries on.”
Families £3,000 Worse Off (pinecarr)
A family of four will lose out on £109 a year because child benefit is not being increased in line with inflation, as well as £545 because they will no longer be eligible for tax credit help from the Government. On top of this, they will be hit by the change in National Insurance, which the accountancy firm BDO calculated would cost £114 a year. Further changes to tax bands will cost them a further £100 a year.
One of the traditional characteristics of the financial media world in the last few days of any given year is the veritable cornucopia of next year “predictions” from those who believe their opinions are relevant/important/credible. Of course, with this whole process being nothing but an exercise in vanity, and resulting in pervasive ridicule by the rest of the media world 365 days later, unless of course one has immaculate luck, in which case playing the lottery has far better fringe benefits, Zero Hedge has no interest in actually predicting parallel outcomes, when event iterations are serial and just getting the one main thing right usually ends up paying off in droves (as such our one and only very vague prediction for the end of 2011 is that the Fed will be one year closer to completely losing control of its centrally planned schizophrenic reality, and the market will be ever closer to realizing this). That said, the following list of forecasts by Charles Hugh Smith is certainly worth reading.
China Slows As Tightening Start To Bite (pinecarr)
The central bank has nudged up reserve requirements for banks five times and raised a range of interest rates, including a surprise move over Christmas to lift the one-year lending rate to 5.81pc. Beijing bared its fangs again on Thursday, pushing the money market rate to a three-year high of 6.25pc. Tightening fears has triggered a 12pc fall in the Shanghai stock market since early November. Professor Michael Pettis from Beijing University said the Communist Party will struggle to engineer a soft-landing after letting rip with credit over the last two years.
Forever Stamps Tell Us Much (pinecarr)
Over the past fifty years, the USPS has raised the rates on first class postage 20 times. During that time the stamp prices have gone up more than 1,100%. Given the increasing frequency of rate hikes (three in the last four years) the Post Office claims it made the move to forever stamps to save money on printing costs and to increase customer convenience. The public seems to appreciate the product and has snapped up a staggering 28 billion forever stamps since they became available in 2007. But the real reason behind the permanent switch is that it allows the Post Office to hide its insolvency behind phony accounting numbers, setting itself up for a massive taxpayer financed bailout in the not too distant future.
As Europe grapples with the financial crisis, Estonia may be the last addition to the euro club for several years. Lithuania and Latvia, the next in line, aim to adopt the currency in 2014, while bigger eastern countries have shied away from setting target dates. “For Estonia, the choice is to be inside the club, among the decision makers, or stay outside of the club,” Prime Minister Andrus Ansip told reporters yesterday in Tallinn, the nation’s capital. “We prefer to act as club members.”
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