Posted by Nicholas Adams on Jun 30, 2011
Laura DAndrea Tyson is a professor at the Haas School of Business at the University of California, Berkeley, and served as chairwoman of the Council of Economic Advisers under President Clinton.
Long term, the United States faces a fiscal challenge that must be tackled –- but it is not an immediate fiscal emergency. In the labor market, though, there is an immediate crisis, the worst since the Great Depression.
According to the latest estimates from the Congressional Budget Office, if current fiscal policies are maintained, federal debt held by the public could rise to an unprecedented 187 percent of gross domestic product in 2035 from 62 percent of gross domestic product at the end of 2010.
This is neither a desirable nor a sustainable outcome. Long before we got there, the United States would lose the confidence of investors, igniting a spike in interest rates, a collapse of the dollar, a global financial crisis and a devastating recession. <
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Posted by Nicholas Adams on Jun 30, 2011
Papandreou clinched enough votes to pass the first part of an austerity plan aimed at meeting EU aid requirements and staving off a default. The EUR did what most anticipated, rally up towards 1.45 as residual speculative shorts are closed. Now what?
According to the script, upside momentum is expected to stall around these levels as markets turn their focus to this morning’s Greek vote on implementation of the various fiscal measures, weekend discussions on private sector participation in the 2012 bailout, and risks around key US PMI data due out tomorrow.
On the flip side, the EUR is certainly looking prettier than GBP and the USD this morning, proving to be market resilient. Certainly strong proof how fundamentally flawed the markets treatment of the dollar and sterling is!
The US$ is a weaker in the O/N trading session. C
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Tags: Eur, Eur Script
Posted by Nicholas Adams on Jun 29, 2011
Australia’s largest dealer group, Professional Investment Services (PIS), says banning life insurance commissions will impact many boutique licensees and may even threaten their survival.
PIS MD Grahame Evans says the dealer group supports some changes under the Future of Financial Advice (FOFA) reforms, but opposes some changes such as the ban on insurance commissions.
“The FOFA changes are not all to the group’s liking,” he said. “Opt-in and the banning of commission on insurance products inside super are all areas which cause concern to the group.
“The economics of this industry have developed to create a situation in which those who have more subsidise those who have less.
“While the idealism of a profession is certainly a very worthy goal, we must consider the impacts to the availability, cost and quality of advice.”
Mr Evans says the reforms will drive advisers back into becoming tied agents, which was the case more than 20 years ago when a life insurance adviser worked for the one life company selling only its products.
“The last thing we would want is to go back to a quasi-tied agency structure,” he said. “However, it appear
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Tags: Boutique, Boutique Advisers
Posted by Nicholas Adams on Jun 27, 2011
The European Banking Authority (EBA) continues to court controversy with the way it is administering the recent round of bank “stress” tests. The testing process has been in progress since March and is designed to restore confidence in the European banking system awash in questionable sovereign debt.
As part of the evaluation, the banks have been provided with a formula that will “address inconsistencies and excessive optimism” when it comes to assessing risk of these sovereign exposures. Based on the risk assumption, the banks can then determine the extent of the “haircut” to which they could face and then determine how much they need in reserves to cover the potential losses.
What the EBA is not doing, however, is to force the banks to simulate the impact of an actual default or debt restructuring. If the EBA is hoping to restore confidence with this approach, it leave much to be desired. Especially
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Tags: Stress Tests, Tests
Posted by Nicholas Adams on Jun 27, 2011
In an imaginary world of equal opportunity we would all be free to choose our own economic future. In reality, many children in the United States are born to lose, suffering health disadvantages at birth that reduce their likelihood of economic success.
Epidemiologists and economists have long agreed that low birth weight is an important, albeit approximate, predictor of future health problems. A wealth of new economic research tracing individuals over time shows that it is also an approximate predictor of future earnings problems, with statistical effects almost as strong as childrens test scores.
Among other things, low birth weight increases the probability of suffering from attention deficit hyperactivity disorder and lowers the probability of graduating from high school.
In the current American Economic Review, Janet Currie of Princeton, a pioneer in this new area of research, summarizes recent findings and points out that children of black mothers who dropped out of high school are three times as likely as children of white college-educated mothers to suffer low birth weight.
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Tags: Health, Health Inequality
Posted by Nicholas Adams on Jun 27, 2011
BOCA RATON, FL – Metropolitan Health Networks will acquire Continucare for $416 million in cash and stock, in a deal that will create a combined entity providing care to more than 68,000 Medicare Advantage and Medicaid customers in 18 Florida counties.
The deal will expand Metropolitan’s footprint in the Florida market to include Miami-Dade, Hillsborough and Broward counties. In all, the combined company will operate 31 primary care medical practices in the state and tap a contracted network of more than 250 independent primary practices.
“For many years Continucare and Metropolitan have each worked diligently in their respective regions throughout Florida to establish high quality and profitable primary care networks and operations that serve Medicare Advantage customers and, in the case of Continucare, Medicaid customers as well,” said Michael Earley, chairman and CEO of Metropolitan Health, in a statement. “Each o
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Tags: 416 Million, Acquire Continucare, Million
Posted by Nicholas Adams on Jun 26, 2011
This week has been a massive blow to risk trading, with investors being side swiped from all continents. Europe with is Greek austerity concerns, Australasia being hit by a think tank opining on China that authorities are concerned over growth, their ‘own‘ not just global and the Fed giving no signal of any policy changes soon. They did not even hint towards QE3. The market is concerned about holes in parts of the Greek austerity package that could put their own situation in further jeopardy. Next week, Greece’s governing PASOK party will try and ram through its austerity package through parliament while the country goes on a 48-hour strike. The world will be watching.
Below are some of the highlights of the busy week:
EUROPE
- Italian industrial orders disappointed for April with a -6.4%, m/m, fall and larger than the -4.0% expected. The s
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Tags: Week, Week Review
