Oil and copper take to the slide

03-Aug-2011 | kate | Commodities Economy Government US Markets USA

Oil price continued to fall today for the fourth straight day; copper also continued Oil for slide. New York trade crude fell to $92 per barrel well Brent crude dropped to $113 per barrel.  The US Energy Information administration also announced that gasoline stockpile rose sharply and demand over the past four week has fallen 3.6% compared a year ago. Copper’s September future fell to $4.326 a pound in New York.

 

The US announced weak data, furthering investor concern about the world’s largest economies future, but it did help gold prices climb to yet another record of 1663.50, jumping nearly 2%.  

 

US data showed that the US service sector fell to its lowest level since Feb 2010, and that factory orders during the month of June also declined.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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US Debt Ceiling

01-Jun-2011 | kate | Economics Economy Government Market Outlook New Announcements

 

Yesterday, the US House of Congress voted NO to raising the debt ceiling even though the US will reach their maximum debt load on August 2nd, 2011.

 

History:

 

The federal debt limit was enacted in 1917 as a result of negotiation to secure funding for WW1 and creating a check on the fiscal power of the ruling party. The deferral debt is divided between debt held by the public and intra governmental debt, all of which is subject to the debt ceiling.

 

Current State

 

Us Treasure Secretary Tim Geithner, has said that the ceiling will be reach on Aug 2nd, and after that date, there is the possibility that the government will default on their obligation unless they raise the ceiling or enact a piece of legislation exempting new issuance being counted toward the limit.  Geithner does consider any payment failure as a detriment to the full faith and credit backing of the American government.

 

According to Fortune magazine, the following government liabilities are going to be affected by the debt ceiling:

 

  • US military salaries and retirement benefits
  • Social Security and Medicare
  • Veterans Benefits
  • Federal civil service salaries and retirement benefits
  • Individual and corporate tax refunds
  • Unemployment benefits
  • Defense Vendor Payments
  • Student Loan Payments
  • Medicaid Payments
  • General Operational Expenses for government facilities

Congress has already raised the debt ceiling 78 times since 1960, so raising the debt ceiling is actually a normal occurrence in the United States. With out support to raise the debt limit, the Obama administration will enter a complex period of trying to battle the federal budget.

 

With the voted behind us, bond traders and analyst are waiting for August 2nd, the date that the government is projected to run out of money. Without borrowing authority, the Treasure will be forced to default on some of their obligation which will have major consequences on the world markets.

 

Well it is certainly shaping up for an interesting summer on the market,, the us government is trying to shore up their balance sheet by pulling 200 billion from various programs such as farm subsidies, government pension and finding new tax revenue.

 

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Self Employed Pension Plan

21-Dec-2010 | kate | Budgeting Canadian Investing Economy Estate Planning Government New Announcements

For once they agreed. Federal and provincial finance ministers agreed on creating a system that would encourage self employed and employees of small firms to save for retirement. The minister had different views on how to ensure Canadian have enough saved for retirement but they did agree that they want to make sure that employers are not put under a burden by the new plan. The Pooled Registered Pension Plan, called PRPP’s for short will be used to increase retirement savings for individuals with out a corporate pension fund. Employer contribution will be determined by the provincial registration. PRPP will enlist insurance companies and financial institutions to administer then new saving plan network which will make it easier and cheaper for small companies to offer employee sponsored pension plans to their workers on a voluntary basis. Self employed would be able to contribute to the pooled pension plan under the government proposal. The terms for PRPP’s will be worked out next June, where they will also be working on trying to a consensus on changes to the Canada Pension Plan. So far, there have been no estimates of how many people would join the plan and how much it would cost them per year and the expected savings that the plan would generate.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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A Nickel for your thoughts?

15-Dec-2010 | kate | Banks Canadian Investing Currency Economics Economy FX Government The Wise Investor

The Canadian senate has been conducting a study since 2008 on the utility of the penny in the Canadian economy, which was presented last night. The penny is being targeted for removal after citing it’s significant as legal tender has diminished over the last sixty years.

For example, the cost to manufacture one penny actually cost around 1.5 cents and balloons to 4 cents when the government factors in shipping and handling to get it from production to costumer hands. So for the government to keep the supply of 30 billion Canadian pennies in circulation, it cost tax payers an estimated 130 million dollars, PER YEAR!

Seigniorage, is referred to difference between the sum of the cost and the face value of the coin and is getting larger with each passing year courtesy to inflation and higher labour and metal prices, while the value of the penny is stuck at 1 cent. The results are a piece of legal tender that cost more than it is worth. Adjusted for inflation, using the earliest records on the penny available, one penny in 1870 (it was introduced in 1858) was worth about 27 cents in 2005.

Another interesting argument against the penny is that only 37% of Canadians (yes I am one of them) actually use the penny. The rest of Canadians place their in saving dishes, fountains or miss place them because they do not find them valuable. Over half of one survey respondents reported that they view the penny as an inconvenience and view it as useless.

Another supporter to abolish the penny heard on CBC this morning, calculated the costs of the penny, time spent waiting for change to be counted and employee productivity levels from handling the penny at several million dollars a year.

Well all these people out there hate the penny, I am one who likes it and was interested by the extra money that it would cost me over my life time if the penny was abolished on cash transactions. Luckily for me, someone else had already wondered the same question and completed some analysis for me to share. Here are the Desjardin Groups findings

Desjardin findings suggest that 816 million pennies are produced annually, just to replace the amount of penny that consumers take out of circulation, some of which are literally thrown in the garbage. If we removed the penny from circulation, like some countries have already done, we would be saving millions of dollars in taxes per year.

Since all decimal points will exist on debit and credit card payments, a method called Swedish rounding will apply to cash transactions. Swedish round is symmetrical meaning that neither sellers nor buyers would profit over time from rounding. Over time, the method would balance out the gains and losses from rounding to the nearest decimal point.

Swedish rounding

A Price of Is Rounded Too
9.98

$10.00
9.99
10.00
10.01
10.02
10.03

$10.05
10.04
10.05
10.06
10.07

If the senate does determine the penny isn’t worth keeping, there will be 12 months notice until the penny is not longer accepted as legal tender.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Rumours and Speculation Surrounding the IMF

02-Dec-2010 | Reggie | Banks Commodities Currency Economy

Today the commodities and markets surged as investors are speculating that the IMF is pulling out all the stops to insure nothing even resembling a double dip in the economy and markets occur.  Continued weakness in certain European countries have kept investors feeling quite jittery and sent the cost of capital for these countries skyrocketing.  Meanwhile things have been looking pretty good in North America thanks to some great economic numbers in jobs and consumer spending.

The speculation is that the IMF could come up with a huge sum of money to basically backstop these European nations and keep them from going under.  The ECB said it will offer banks unlimited loans throughout the first quarter.  It really seems like the heads of the national and international banking groups will to go any measure to keep the economies of the world moving in the right direction.

This should help ensure the Santa Claus rally with the surge in investor confidence and continued strength in the commodity markets.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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