22 December 2010

It’s a dog’s life

“A dog is for life not just for Christmas” the saying goes and there is a lot of truth in that statement. When you acquire a pet it becomes a part of the family very quickly, and the cost of any medical treatment can become very expensive. This is why it is worth taking out pet insurance. The level to which you want to insure your pet is up to you but coverage which provides medical care can save you a lot of money. Most companies will give you an option of accidental or comprehensive cover.

Accidental will provide cover for your pet in the event of accidental injury, including costly items like consultations with your vet, specialist care, hospital stays and prescription medicines.

Fully comprehensive will be packed with reassuring features. It should cover 100% of your veterinary bills in the event of an accidental injury, it also covers you if your pet should suffer an illness.

21 December 2010

Credit Card companies challenged by Competition Watchdog

Major credit card companies have been challenged by Canada’s competition watchdog over the rules they force upon retailers.

Canada’s Competition Bureau last week filed for a Competition Tribunal against Visa and MasterCard claiming that the credit card providers’ mutual ‘no-surcharge’ rule, among other policies, is eliminating competition between them.

Under Visa and MasterCard’s current policy, retailers are charged between 1.5 and 3 percent per credit card transaction but are prevented by the ‘no-surcharge’ rule from adding on a surcharge to offset the extra cost.

As a result, many retails are offsetting this cost by adding it to the price of products, clearly disadvantaging the consumer.

Competition Commissioner Melanie Aitken claims that, “Visa and MasterCard's anti-competitive behaviour hurts businesses and consumers alike.”

“Without changes to the rules, merchants will continue to face high costs for credit card acceptance, while consumers, even those who use lower-cost methods of payment like debit or cash, will continue to pay higher prices.”

The Competition Bureau also plans to take action against credit card policies which prevent retailers from encouraging customers to use more cost-effective methods of payment such as cash and debit.

However, MasterCard fears that credit cold holders may end up being penalised by facing higher charges.

It is estimated by the Bureau that Canadian retailers pay around $5 billion per year in hidden credit card costs, one of the highest levels world wide.

14 December 2010

Canadians Debt-To-Income Ratio Higher Than Americans

The debt to income ratio of Canadians is now higher than Americans for the first time in over ten years according to information released on Monday.

The ratio of household debt to disposable income has climbed to a high of 148.1 percent, Statistics Canada announced on Monday, a 6.7 per cent rise on last year’s figures.

The Canadian ratio is now higher than that of the United States which is currently at 147.2 percent.
Bank of Canada Governor Mark Carney spoke in Toronto earlier this week about the rising debt amongst Canadians and the danger of borrowers being lured by historically low interest rates.

Mr Carney warned that whilst current low interest rates make borrowing seem relatively cheap, the costs will climb again and people may find themselves in financial difficulty, especially as the debt load of many Canadians is rising faster than their incomes.

Policy makers must now decide how best to safeguard Canada’s economy - reduce spending and risk limiting the country’s recovery or risk the population sinking further into debt.

Mr Carney said, “The responsibility obviously starts with the individual, it extends to the financial institutions, and then we as policy makers need to ensure that a suite of policies are appropriate to ensure sustainable growth.”

Canada’s income level has also fallen 1.5 percent during the last three months.

13 December 2010

Banking Reforms Met With Mixed Reviews

Banking reforms proposed by the Australian government over the weekend have been met with mixed reviews.

The reforms, which include banning mortgage exit fees from July 1st 2011 and providing small lenders with new funding avenues, were announced by Federal Treasurer Wayne Swan on Sunday.

Mr Swan has pledged to increase competition in the banking sector to help reduce interest rates and ease the burden for businesses and mortgage holders. In addition, he has empowered the Australian Competition and Consumer Commission to act on price signalling.

He stated that the package would "build up competition in our banking system, which will ensure that interest rates are lower over time".

Consumer group Choice welcomed several aspects of the reforms including the transferability of lenders’ mortgage insurers, mandatory fact sheets for home loan customers and the ban on exit fees. They also approved of the review of ATM fees and the credit card reform legislation.

However, economists fear that the proposed ban on mortgage exit fees could be potentially damaging for smaller lenders.

Shane Oliver, head of investment strategy at AMP Capital Investors warned that if banks are no longer able to charge high exit fees, they will be equally unable to offer low mortgage rates:

'If exit fees are banned for mortgages, it could actually force up mortgage rates for some of these non-bank providers'

The Green party also argued that whilst long overdue, the cuts in ATM fees were only part of the solution to a larger scale banking fee problem which costs many Australian households up to $1000 a year.

09 December 2010

Aussie Gains On High Employment Statistics

The Australian dollar made gains yesterday following the release of statistics which show the largest rise in employment since January.

The Australian Bureau of Statistics reported on Thursday that the country’s employment reached 54,600 in November, exceeding the expected increase of 20,000 and reducing the national unemployment rate by a further 0.2 percent.

Following the release of the data at 1130 AEDT, the Australian dollar increased half a US cent trading at 98.40 US cents, up from Wednesday’s close of 97.89 cents.

Adam Carr, senior economist for ICAP said that the positive influence of the employment figures on the economy was clear and may prompt the Reserve Bank of Australia (RBA) to raise the cash rate in next year’s first quarter.

"The RBA gave a fairly neutral signal to us when they met (on Tuesday) and this data today shows why the RBA's pause isn't going to be that long," Mr Carr said.

"The chances of them being on hold until June next year is, I think, effectively zero."

It is estimated that more than 50,000 people joined the workforce in October, creating the second largest employment rise in Australia since 2006.

Analysts hope that these latest statistics signal the continuing rejuvenation of the Australian economy.

08 December 2010

Sterling Strengthens On Back Of Manufacturing And Retail Highs.

The Great British pound strengthened against its rival currencies on Tuesday as it was announced that the UK’s manufacturing output had reached a seven month high.

Buoyed by news of higher than expected manufacturing figures and retail sales, the pound sterling climbed 0.95 percent against the euro and reached a two week high of £1.5821 against the US dollar.

UK retail sales grew a healthy 0.7 percent last month, maintaining October’s increase of 0.8 percent. The output of UK manufacturing also climbed, reaching 0.6 percent for October and exceeding the expected increase of 0.4 percent.

The manufacturing output rate is the highest recorded since March this year, prompting optimism for the UK’s economic recovery.

Briain Hilliard of Société Générale said that he expects further gains in November:

"Stronger utility numbers with the colder weather should also give a pick-up in industrial production. It shows the economic recovery is continuing, although of course we need to look at the services side too. The biggest influence on the Bank of England will be the inflation profile and we know that is problematic."

It is thought that the figures are unlikely to prompt the Bank of England to make any changes in interest rates over the coming months.

Meanwhile all eyes are on the performance of the Euro as Ireland’s toughest austerity budget is passed its first parliamentary vote.

07 December 2010

Canada Unemployment Reaches Two Year High

Canada’s unemployment has reached its highest rate in almost two years, according to the Labour Force Survey released by government agency Statistics Canada on Friday.

Unemployment rose to 7.6 percent in November, a significant increase from October’s rate of 6.2%. This translates to 1,426,900 million unemployed Canadians, far more than were initially made jobless when the recession hit in 2008.

A huge decline in the number of manufacturing related jobs is thought to one of the major causes of the unemployment rise. Whilst 1 in 5 Canadians had manufacturing related employment three decades ago, that number is now 1 in 10 – the lowest rate since data began in 1976.

The Statistics Canada survey also revealed a decline in the quality of jobs available over the last year with an increase in temporary, part time and poorly paid work.

Ken Georgetti, President of the Canadian Labour Congress said, “We have a problem with both the number of jobs being created and their quality. We have to focus on creating full-time, family-supporting jobs”
He stated that Canadian workers are still being affected by the deep recession of 2008 and that employments rates would be even higher if it were not for the determination of the Canadian people to find work.

The survey’s figures also highlighted an East-West divide in the country.

The employment rate in Ontario and eastern provinces is teetering above the national average whilst in Manitoba and western provinces joblessness is well below average.

01 December 2010

Australia's Economy Growth Lower Than Expected

Australia’s economy grew by just 0.2 percent in the September quarter, the Australian Bureau of Statistics announced yesterday.

The country’s gross domestic product (GDP) was measured at 2.7 percent, much lower than the 3.4 percent rise expected by market consensus. The result was also down compared to the 1.1 percent rise of the June quarter.
The Australian dollar immediately fell from 96.08 US cents to 95.65 following the release of the figures at 11.30am (AEDT) on Wednesday, although later regained ground.

The share market also closed flat with a mere 0.05 percent increase in the benchmark SP/ASX200 index and a 0.01 percent increase in the broader All Ordinaries index.
Despite a muted response from the markets, Treasurer Wayne Swan insisted that the GDP figures showed proof of a resilient economy.
'Today's GDP figures are another solid result for our economy in the context of a world economy which is fragile,' he told Canberra reporters.
'There are bumps in the road for our economy but Australia's fundamentals and growth prospects remain strong.' He added, 'we are determined to continue our plans to build a stronger, broader, more competitive economy.’

The Treasurer pointed to several positives in the September quarter including a 0.6 percent increase in household consumption and the creation of 105,000 full time jobs.