Category Archives: Uncategorized

Why Most Economists Are So Worried About Trump by Justin Wolfers

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If the November election was intended as a rejection of elites, of expertise and of the sort of technocratic advice that economists often give, it’s a punch that has landed.
In somber analyses, huddled hallway conversations and pointed asides during endless panel sessions at the annual
conference of economists last weekend in Chicago, the major theme was a sense of anxiety about the incoming Trump administration. This foreboding was evident in roughly equal measure among conservative and liberal economists. But it is in direct contrast with the feelings of small-business owners and Wall Street traders.

Most of my fellow economists remain convinced that university-trained economists can offer useful insight to the new administration. Few believe it will matter. The life force that animates the econ tribe — that what they’re doing matters — has been drained away. Few see useful channels for influence. Partly this reflects President-elect Donald J. Trump ’s legislative plans. On issues like restricting trade, directly intervening to assist specific industries or corporations, targeting tax cuts to the wealthy, his agenda stands as a rejection of the advice that mainstream economist have typically offered. And partly this reflects Mr. Trump’s appointments. Few of his key economic advisers have any economics training, and the only official who identifies as an economist — Peter Navarro, who earned a Harvard Ph.D. in economics and will head up the newly formed National Trade Council — stands so far outside the mainstream that he endorses few of the key tenets of the profession.

Continue reading Why Most Economists Are So Worried About Trump by Justin Wolfers

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Three Tips for Building a High-Impact Resume By Julia VanDeren

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Now that social media plays such a significant role in how recruiters and potential employers evaluate you, is your resume still such a critical piece of the self-marketing puzzle?

Yes, it is, says career coach Dennis Grady of The Career Advisory Group. In a recent webinar, “Building a High-Impact Resume,” Grady explains that while social media is likely the first exposure a corporate or executive recruiter will have to you, your resume is still the most important factor in determining whether you receive an interview. Moreover, your resume often serves as the road map for that interview, giving you the opportunity to help determine what the focus of that conversation will be.

So what were Grady’s insights on building an impactful resume?

Continue reading Three Tips for Building a High-Impact Resume By Julia VanDeren

Central Bank Communique no 106 of the Monetary Policy Meeting- March 21-22, 2016.

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The Monetary Policy Committee met on
21st and 22nd March 2016 amidst
dithering global economic prospects
and continuing challenges in the
domestic economy. In attendance were
8 out of the 12 members. The
Committee appraised the international
and domestic economic and financial
environments in the first two months of
2016 as well as the outlook for the rest
of the year.

Continue reading Central Bank Communique no 106 of the Monetary Policy Meeting- March 21-22, 2016.

FG seeks $3.5bn emergency loans from World Bank, AfDB

Kemi-Adeosun

The Federal Government is seeking from the World Bank and the African Development Bank the sum of $3.5bn (N697bn) in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices.

The $2.5bn (N498bn) loan from the World Bank and a parallel $1bn (N199bn) loan from the AfDB, which will enjoy below-market rates, must still be approved by both banks’ boards, the Financial Times reported on Sunday.

Under World Bank rules, its loan will be subject to an IMF endorsement of the government’s economic policies and bank officials said they would have to be confident that the Nigerian government was undertaking significant structural reforms.

Both loans will carry far fewer conditions than one from the IMF, which does not believe that Nigeria needs a fully-fledged international bailout at this point.

The loan request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a N2.9tn ($15bn) state deficit, which has been deepened by a hefty increase in public spending as the country attempts to stimulate a slowing economy.

It came as concerns grow over the impact of low oil prices on petroleum exporting economies in the developing world.

Nigeria’s economy has been hit hard by the fall in crude prices — oil revenues are expected to fall from 70 per cent of income to just a third this year.

 

The Minister of Finance, Mrs. Kemi Adeosun, had recently said Nigeria was planning its first return to the bond markets since 2013.

But Nigeria’s likely borrowing costs have been rising alongside its budget deficit. A projected deficit of N2.1tn ($11bn), or 2.2 per cent of gross domestic product, had already risen to N2.9tn ($15bn), or three per cent, as a result of the recent turmoil in oil markets.

Officials from the IMF and the World Bank are heading to Azerbaijan to discuss a possible $4bn emergency loan package

“I think we all agree that Nigeria is facing significant external and fiscal accounts challenges from the sharp fall in oil prices, as of course are all oil exporters,” the IMF’s representative in Nigeria, Gene Leon, told the FT.

But he added that Nigeria was not in immediate need of an IMF programme. “We are not in that space at all,” he added.

An IMF mission that visited the country in January as part of a regular review estimated that Nigeria’s economy grew at 2.8 to 2.9 per cent in 2015 and predicted it would register 3.25 per cent growth this year, down from an average 6.8 per cent in the decade to 2014, Leon said.

The country’s financial buffers are also eroding. The Central Bank of Nigeria’s foreign exchange reserves have nearly halved to $28.2bn from a peak of almost $50bn just a few years ago. A rainy-day fund that had $22bn in it at the time of the 2008-09 global financial crisis now has a balance of $2.3bn.

About Eloka Finance Consult

investing-journey

Eloka Finance Consult is a personal finance blog dedicated to providing you with real time stock market news, investment insights and expert analysis of current micro and macro economic trends that affect your investment decisions. A daily visit of this blog is recommended, as it will keep you informed and up to date on the recent developments in the fast paced world of finance, thereby giving you an edge and equipping you with invaluable tools to help you make the right decisions and gain the maximum value possible from your investments. Simplicity of expression is upheld while explaining complex financial issues. This blog can thus be regarded as “THE LAYMAN’S BLOG FOR FINANCE AND INVESTMENT”. The principal consultant and editor-in-chief of the blog; Olisaeloka Nnamdi; is a chartered accountant and an expert in corporate finance and investment banking.

CONTACT ME:

EMAIL: olisaelokannamdi@gmail.com

TWITTER:  Olisa Nnamdi @NnamdiOlisa

GOOGLE+: Olisaeloka Nnamdi

FACEBOOK: Olisaeloka Nnamdi

LINKEDIN: Nnamdi Olisaeloka

PHONE: +2348086529837

Source: About

Public finances of 11 EU countries are at high risk in medium-term: EU

European Union (EU) flags fly in front of the European Central Bank (ECB) headquarters in Frankfurt, Germany, December 3, 2015. REUTERS/Ralph Orlowski

Eleven European Union countries including France, Italy and Britain face high risks to the sustainability of their public finances because even 10 years from now their public debt will still be high, the European Commission said on Monday.

In a fiscal sustainability report, the European Union’s executive arm said Belgium, Ireland, Spain, France, Croatia, Italy, Portugal, Romania, Slovenia, Finland and United Kingdom were all at high risk.

The estimates are based on the Commission’s macroeconomic forecasts for all 28 EU countries from last November that projected key economic indicators two years ahead.

The report did not contain any recommendations, but the commission is due to issue country-specific recommendations at a later date.

The sustainability analysis assumes no policy changes after the two years included in the forecast. It does not include Greece or Cyprus, which are still under bailout programs.

The Commission said there were no short-term fiscal sustainability risks to any EU countries. But it said that for instance in the case of Italy some factors such as gross and net debt, gross financing needs and the amount of non-performing loans, pointed to short-term “challenges”.

It made similar comments about challenges from non-performing loans and other issues facing 15 other countries.

The best performers in terms of fiscal sustainability, with low risks in the short-, medium- and even long-term, were Denmark, Germany, Estonia, Latvia.

(REUTERS)

 

Oil currencies dip, euro and yen gain

The dollar sign (R) is seen alongside the signs for other currencies above a currency exchange shop in Mongkok shopping district in Hong Kong in this file photo dated October 30, 2014.  REUTERS/Damir Sagolj

The dollar edged down on Monday as renewed selling on oil markets drove investors into their safe havens of choice, the euro and yen, and weakened the currencies of major crude exporters.

After an upbeat session in Asia, stock markets quickly turned negative in Europe and oil fell almost 3 percent, driving roughly half-percent falls in the Canadian dollar and Norwegian crown. CAD=D4 EURNOK=D4

The oil price fall turned investors’ focus back onto the broadly negative view of the outlook for the world economy that has dominated since the start of 2016.

That has tended to benefit the euro, yen and Swiss franc at the expense of the dollar.

“We cannot sound the all clear, there is clearly a lot of uncertainty out there,” Commerzbank strategist, Thu Lan Nguyen, said.

“The main theme this morning is of commodity currencies being under pressure. A lot depends on the oil price. If we see a sharp drop back to the levels we saw last week, we can see another round of the market nerves we have been seeing.”

The dollar fell about a third of a percent against the yen to 118.40 JPY=, well off last week’s one-year low of 115.97. The euro was also up about 0.25 percent at $1.0816 EUR=EBS.

Norway’s prime minister and central bank governor were set to meet at short notice on Monday and expectations for the outcome of the meeting helped the crown steady at 9.47 crowns per euro by 1221 GMT (7:21 a.m. EST), down 0.3 percent.

“Extra spending would be temporarily supportive for the crown but would not change the longer-term bearish currency story against the dollar unless there is a quick pick-up in non-oil sectors,” Morgan Stanley analysts said in a morning note.

Bullish bets on the dollar fell for a fourth straight week through Jan. 19, according to Reuters calculations and the latest data from the Commodity Futures Trading Commission, released on Friday.

Focus is on the pace of Federal Reserve tightening as risk aversion and volatile markets push investors to pare bets on any U.S. near-term hikes, with rates widely expected to be held on Wednesday.

The Bank of Japan (BoJ) will conclude a two-day policy meeting on Friday, at which sources familiar with its thinking say it is likely to cut its core consumer inflation forecast for the coming fiscal year to possibly below 1 percent.

Downbeat data has raised speculation of more BoJ easing by April.

(REUTERS)

 

NCAA warns airlines over arbitrary increase of air fares

NCAA

The Nigerian Civil Aviation Authority (NCAA) has warned scheduled commercial airline operators in Nigeria to desist from arbitrarily increasing miscellaneous charges on ticket payment content without the authority’s approval.
Airlines have variously been accused of padding charges to their tickets without any explanation to either the passengers or the regulatory authority.

NCAA has therefore directed that all airlines should file any proposed add-on charges, surcharges or other miscellaneous charges with the Authority, which must be approved before such charges are implemented.

NCAA said in the procedure of filing same, “all justifiable reasons for increment must be adduced in accordance with Parts 18.14.3.1 and 18.14.3.2.(i-iii) of the Nigerian Civil Aviation Regulations (Nig.CARs) which relates to the approval of charges on all flights within Nigeria or originating from Nigeria to international routes.”

 

As contained in the Nigerian Civil Aviation Regulations, (Nig.CARs) 18.14.3.1.”In requesting for approval of any add-on charges or surcharge, an air carrier is required to provide justifiable basis for the proposed increment with a consideration of all relevant factors including a new linear rationalisation for the specific aggregated costs sought to be recovered and consumer interests.”

1n addition, parts 18.14.3.2. of the regulation says, “When approving any application for an add-on charge or surcharge related to fuel, the Authority shall: Take into account changes in prices of aviation fuel, the relevant hedging policies of the air carrier, the justifications provided by the air carrier and other relevant factors; ensure that the revenue so generated would not exceed the additional fuel costs borne by the airline operators during the corresponding period; and approve on a short term basis, not exceeding a period of two (2) months in each instance.

“Therefore subsequently, NCAA wishes to notify all operators that any add-on charge, surcharge or any other miscellaneous added on passenger tickets without regulatory approval should cease forthwith. Any further breach would attract the appropriate sanctions,” the regulatory body said

Volatility: How Advisors Can Help Clients Stomach It

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Investment advisors are a combination of money managers, financial educators, and counselors. It’s this last role of counselor that becomes important as market volatility ramps up. Learning to handle customer’s investing fears and anxieties makes the financial advisor a better advocate for their client.

To keep volatility at bay, the advisor can educate the client about market returns and history, the importance of asset diversification, and how to manage the expected anxieties that accompany market declines.

Be Proactive, Not Reactive

Set the stage early to cope with the inevitable market drops. The investment education and collaboration starts when the client walks through the door. Prepare the client by including a risk tolerance and risk capacity quiz and conversation. These tools inform the advisor about how a client might react to the normal ups and downs in asset values. The risk conversations smooth the way to create the client portfolio.

Next, the advisor can include a conversation about investment asset characteristics as part of their educator role. When the client understands historical market returns, they are better equipped to cope with volatility. (For more, see: How to Be a Top Financial Advisor.)

Finally, let clients understand that market volatility is expected and occurs periodically along with changes in the business cycle, global occurrences, and national economic events.

Set Up the Portfolio to Minimize Volatility

The knowledge of how each asset class has performed in the past is an important tool when setting up the initial portfolio. The proper setup helps clients deal with market volatility over the long term. The more risk-averse investor – such as a client at the tail end of their earning years – will weight bonds more heavily than stocks, for example. Whereas the aggressive individual – such as a saver closer to the beginning of their career – holds a larger percent in riskier equities.

Gus Sauter, senior consultant to Vanguard Group, Inc., told The Wall Street Journal that “one of the most common mistakes investors make is not thinking holistically about their portfolio.”

In other words, think of the big picture, not how each specific holding or account is performing. (For more, see: Financial Advisors Need to Seek Out this Group NOW.)

With a broadly diversified portfolio, when emerging market stocks fall, U.S. equities may remain stable while bonds advance. Less correlated investment assets lead to greater diversification which tempers portfolio volatility.

When stock funds are soaring, a diversified portfolio won’t go up as much, but conversely, neither will it fall as low during a market correction.

Control the Mind; Control the Money

All the preparation won’t help if the investor panics at the first sign of market volatility. The advisor needs to be prepared for those phone calls after a big market drop to talk the client off the figurative ledge.

Many investors want to sell, after a big market decline and get out of the market altogether. The advisor must be prepared for some hand holding and refresher education. (For more, see: Money Habits of the Millennials.)

Research studies show that investors’ portfolios typically perform worse than the overall market due to mental money mistakes. If the investor jumps out of the market at the first sign of a decline, then he or she is selling at the bottom. The flip side of this behavior is when an investor gets swept up in market euphoria and buys back in as stocks trend toward their highs. This counterproductive trading activity causes the investor to buy at the highs and sells at the lows. The advisors job is to make sure this doesn’t happen by being available for hand holding and education.

DALBAR, Inc.’s 20th Annual Quantitative Analysis of Investor Behavior 2014 Advisor Edition not only confirms this, but reveals the gap to be especially wide. Over the past 30 years, the S&P 500 returned 11.11% per year while individual investors have averaged only 3.69%.

Trading too often yields subpar investment returns. Not only does buying and selling at inopportune times create lower returns, so does excessive trading which increases commissions and reduces profits.

Volatility Equals Opportunities

An often overlooked benefit of market volatility is the opportunity to invest additional funds during market dips. By keeping some cash on the sidelines, when the inevitable market decline occurs, the advisor can invest the clients’ money at bargain prices. Similar to buying on sale. (For more, see: How to Help Clients Spooked by Volatility.)

The Bottom Line

The best advisors remain in touch with their clients during market ups and downs and shepherd them through the investing landscape with a combination of education and support. (For related reading, see: How Financial Advisors Can Adjust to Robo-Advisors.)