Business and Finance Guide

Monthly Archives: December 2010

Privatization May Not Cure GSE Ills

Posted on Friday, 24th December 2010 by Charlotte W

Fully privatizing the secondary mortgage market might not protect taxpayers from having to once again underwrite major losses in the mortgage market, the Congressional Budget Office (CBO) has warned.

In a new analysis of the role of the federal government in the mortgage market, the CBO determined that eliminating Fannie Mae and Freddie Mac might not get rid of the major problems commonly associated with the two government supported enterprises (GSEs). In particular, it said the “moral hazard” associated with the government’s implicit guarantee of Fannie and Freddie loans might be extended to a fully private secondary market if it were regarded as too critical to be allowed to fail. Eve Read more…

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ECB announces a EUR 5bn capital increase

Posted on Thursday, 23rd December 2010 by Charlotte W

The ECB has just announced a EUR 5bn increase in its subscribed capital, which will almost double the existing amount to a total of EUR 10.76bn. The decision and the size of the increase were correctly anticipated by press leaks in the last few days. Importantly, the decision to hike capital stems from an assessment of capital adequacy conducted in 2009, i.e. before the beginning of the Securities and Markets Program. This means that government bond purchases carried out since May seem not to be the specific reason behind today’s decision. Rather, the ECB links higher capital needs to a generalized increase in the riskiness of its assets due to the heightened volatility in FX, interest rates, gold prices, and credit risk. Read more…

Tags: Eur 5bn, Increase
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Cartridge World gives holiday reminders to small business owners

Posted on Wednesday, 22nd December 2010 by Jana Sanders

Retailer says entrepreneurs can save money in many ways

One of the leading retailers of refilled ink and toner is giving small businesses advice for cutting costs and increasing profits in 2011.

In a recent statement, Cartridge World said that by making a few minor changes, small business owners would be able to keep expenses low and have more money to buy items for business needs. The advice includes buying used office equipment, using rewritable CDs and DVDs, printing on both sides of paper, turning off all equipment when you leave the office and taking advantage of bulk rates when shipping or mailing.

“The state of the economy is still a primary concern for most small business owners,” said Tom Fricke, CEO of Cartridge World regarding the news for small business owners.

Small Business Loan Guarantees renewed for businesses older than 3 years

Posted on Tuesday, 21st December 2010 by Mark Chambers

The U.S Small Business Administration has recently renewed an initiative that guarantees $560 million of loan grants to private parties and small businesses operating in the US for more three years. This grant is guaranteed to more than 7,000 veterans who are running small businesses.

An enhanced guarantee is being provided by the Patriot Express, a pilot loan product that is based on the agency’s SBA Express program. The reduced interest rate on loans thus is confirmed for small businesses that are owned by veterans, reservists and their spouses.

Such loans are offered by participating lenders and it ranges up to $500,000. This amount then can be used for any business purposes that include start up, working capital, expansion, inventory, buying equipment and real estate.

The local SBA district offices come up with a list of Patriot Express lenders. A

Economist at Outlook Conference Says He is Hopeful for a 2011 Economic Rally

Posted on Saturday, 18th December 2010 by Charlotte W

ITHACA, N.Y. — The national economy is not merely a minefield, but a mind field as well, said Cornell economist William Schulze, the keynote speaker at the annual Agribusiness Economic Outlook Conference Dec. 14 in Kennedy Hall.

Schulze, a behavioral economist and the Kenneth L. Robinson Professor of Applied Economics and Public Policy, said that panic contributed as much to the economic meltdown as policy, and warned that the difference between a recession and a depression is fear.

“Fear is the big problem,” Schulze said. “The American public made a huge mistake by driving stock prices down, selling out of panic. They were acting on their gut reactions rather than thinking. We still haven’t recovered from fear.”

The recent election campaigning based on fear hasn’t helped, he added. <

Few Discouraged from Homeownership

Posted on Friday, 17th December 2010 by Charlotte W

Despite plunging property values and waves of foreclosures, the housing crisis has discouraged few people from wanting to own a home, according to a recent study by Fannie Mae.

Fully half of those surveyed – 51 percent – said the housing crisis had little or no impact on their intentions to buy a home for their next residence. Of those who said it did have an effect, the number who said it made them more inclined to buy a home exceeded those who said it made them more likely to rent, 27 percent to 19 percent. Even among homeowners in negative equity, those whose mortgage exceeds what their home is worth due to declining property values, there was a strong preference for home ownership. Thir Read more…