Payments Imbalance – Future Komp Sun, 26 Sep 2021 08:03:43 +0000 en-US hourly 1 Payments Imbalance – Future Komp 32 32 How Much Money Do Millennials Really Make? Sat, 25 Sep 2021 13:33:25 +0000

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Your income allows you to pay for shelter and food, save for retirement, and achieve other life goals. Some people are fortunate enough to be able to meet all of their needs and wants with just one main source of income. Others, however, must stretch each paycheck to cover their basic expenses. And according to a report by the TIAA Institute, Millennials are the generation most likely to face financial hardship in areas such as paying off debt and saving money.

Millennials – ranked by Pew Research Center as people born between 1981 and 1996 – have received a ton of attention as a generation struggling to balance the costs of their lifestyle with their financial goals. And a big part of that imbalance could come from not making enough money to float their costs.

According to data from the United States Census Bureau, the median pre-tax millennial household income was $ 71,566 in 2020. However, a Sunmark Credit Union Study on the spending habits of different generations revealed that millennials spend an average of $ 208.77 per day. This includes the average daily costs for groceries, housing, utilities, insurance, entertainment, dining out and more. That number equates to $ 1,461.39 spent weekly and $ 5,845.56 per month. But by the end of the year, the average person will have spent $ 70,146.72 – just below the millennial median income.

Spending almost as much as they earn each year means there is less room to save for emergencies or invest for retirement. But with the average cost of rent – the biggest expense for millennials – weighing $ 1,584 for a studio and $ 1,636 for a one-bedroom in the United States, many millennials find their wages just not enough to cope at daily costs of living.

Factors Affecting Millennial Income

The 2008 recession took a toll on millennials. Lack of jobs meant fewer millennials could earn income or advance their careers, slowing them down financially. In fact, a report by a nonprofit group called the Invincible youth found that the 2008 economic downturn cost young workers about $ 22,000 in lost earnings per person.

Even after unemployed millennials finally found jobs in the years after the recession, their wages fell. The Hamilton project, an economic analysis from the Brookings Institute, found that before the economy-related job loss, millennials earned about $ 3,640 per month, which equates to $ 43,700 per year. But two years after the onset of the recession, those who found a job were earning an average monthly income of just $ 1,910 ($ 23,000 per year). Millennials had to work their way out of this huge difference in income.

And while the 2020 COVID-19 pandemic had an effect that occurred across all age groups, it looked like millennials had taken another hit, as they are the largest generation currently on the planet. the work market. According to Pew Research Center, 30% of Americans aged 30 to 49 report that they, or a member of their household, have lost their jobs because of the pandemic. However, it may still be too early to see the full impact of the pandemic on the income potential of millennials.

How millennials can keep more of their money

While the problem of low wages won’t be solved overnight, there are ways for millennials to keep more of their money. and adding new sources of income. Side activities have become increasingly popular as a way for workers to supplement their income, save more and even have a little more spend money. And while the extra money can go a long way, Millennials can also consider cutting some “silent costs” that eat away at their money, like interest charges and recurring monthly expenses that they may have forgotten about.

The mint The app can analyze your income and expenses and help you budget based on your spending habits. This can help you uncover unnecessary or unwanted expenses so that you can save extra money.

And while credit cards can be a useful financial tool when it comes to accumulating credit and earning reward points and cash back, you get hit with interest when you don’t pay your balance. In totality.

If you already have a balance that seems difficult to pay off, you may want to consider using a balance transfer card with a 0% APR introductory period. Consider the cards below:

American bank Visa® Platinum card

On the secure site of US Bank

  • Awards

  • Welcome bonus

  • Annual subscription

  • Introduction APR

    0% for the first 20 billing cycles on balance transfers and purchases *

  • Regular APR

    14.49% – 24.49% (variable) *

  • Balance transfer fees

    Either 3% of the amount of each transfer or $ 5 minimum, whichever is greater

  • Foreign transaction fees

  • Credit needed

Wells Fargo Active Cash Card℠

  • Awards

    2% unlimited cash rewards on purchases

  • Welcome bonus

    $ 200 cash rewards bonus after spending $ 1000 on purchases in the first 3 months after opening the account

  • Annual subscription

  • Introduction APR

    0% APR on qualifying purchases and balance transfers during the first 15 months from account opening

  • Regular APR

    14.99% to 24.99% variable on purchases and balance transfers

  • Balance transfer fees

    3% launch fee ($ 5 minimum) for 120 days from account opening, then up to 5% ($ 5 minimum)

  • Foreign transaction fees

  • Credit needed

If you are in control of your credit card payments, you can also use your card to earn extra money while shopping. You might consider a credit card with a big welcome bonus, like the Chase Sapphire Preferred® Card or the Citi Premier® Card. Welcome bonuses allow you to earn a large amount of points by opening a card and spending a certain amount of money within a specified amount of time.

With the Chase Sapphire Preferred® Card you can earn 100,000 points (worth $ 1,250 for travel booked through the Chase Travel portal or $ 1,000 in cash back) if you spend $ 4,000 in the first three months after opening the map. You can use the card to pay for your regular expenses – and you should be able to pay them back right away since you would be spending on fees that you would have to pay anyway – and then use your points for a vacation you really want. to take.

Finally, you can invest your money and make it grow on its own over time. When you keep all of your money in a regular savings account, your money loses value over time due to inflation, which means it will offer you less and less over the years. Investing, however, gives your money the opportunity to grow even if you don’t make additional contributions (however, the more you contribute, the more it will grow). If you are new to investing, you might consider robo-advisers like Wealth front and Improvement, who can invest your money in portfolios that best suit your goals.

Wealth front

On the secure Wealthfront site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle chosen. Minimum deposit of $ 500 for investment accounts

  • Costs

    The fees may vary depending on the chosen investment vehicle. No account, transfer, transaction or commission fees (fund ratios may apply). Wealthfront’s annual management advisory fee is 0.25% of your account balance

  • Premium

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources, and dividend-paying stocks

  • Educational resources

    Offers free financial planning for college planning, retirement, and home buying

At the end of the line

Millennials have already lost a lot of ground in terms of income thanks to the 2008 recession and now the Covid-19 pandemic. But by taking a few small steps, like using credit cards that allow them to save on interest, invest, and supplement their income through side activities, millennials can begin to find a better balance between this. what they need and what they can afford.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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Ray Perryman: The housing market is starting to normalize | Chroniclers Sat, 25 Sep 2021 03:30:00 +0000

Stories of buyers paying well above asking prices are common, and tight supplies leave few options. It’s a tough market unless you’re a seller and don’t need to buy anything else. In addition, recent significant gains are leading to the exclusion of some buyers from the market. Even with stimulus and low interest rates, affordability is an issue, especially for first-time buyers or those with low incomes. The job market is picking up and wages are rising, but not as fast as house prices.

In addition, fears of a bubble are worrying and the real estate crisis aspect of the Great Recession is certainly not forgotten. This time, however, the price growth is due more to a supply-demand imbalance than to speculative factors.

There are signs that conditions are starting to normalize. The United States now has about six months of home inventory, meaning the current inventory for sale would last about as long given the current sale rate if no additional new homes were added to the market. That’s up from just over three months last fall, which is about as low as it has ever been.

Healthy real estate markets are good for the economy, and rising prices increase homeowners’ wealth. At the same time, expensive housing obviously presents financial challenges for buyers. We seem to be heading towards a happy medium.

EEconomist Ray Perryman is president and CEO of Perryman Group, a Waco-based economic research and analysis company.

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Did Governor Newsom do the right thing in approving Senate Bill 9? Fri, 24 Sep 2021 11:45:52 +0000

Gov. Gavin Newsom recently signed a bill that would require cities to approve up to four housing units on what was once single-family land.

The legislation, Senate Bill 9, will allow the split lots to be sold separately. Homeowners looking to divide a lot will have to swear that they plan to have one of the units as their primary residence for at least three years.

The bill, by San Diego State Senate Chief Toni Atkins, was fiercely opposed by 241 cities and many groups across the state who argued it was removing local zoning control. The idea behind the legislation is that increasing housing options could lower costs and allow people to live in the neighborhoods where they work.

Critics of the bill argue that it may not create as much housing as lawmakers believe, as average homeowners may not have enough money to redevelop their lots, so leading to gentrification in existing neighborhoods instead of reducing costs.

Q: Did Governor Newsom make the right economic choice in approving Senate Bill 9?

Ray Major, SANDAG

YES: New state and local laws promote an increase in housing density. Historically, many parcels in San Diego County were defined under a different set of regulations that encouraged suburban-type developments with relatively large lots and low densities, and most of these residential parcels were developed. Redefining lot boundaries will free up much needed space to help alleviate the housing crisis and benefit owners who have not had the opportunity to develop their property in an optimal and optimal manner.

Lynn Reaser, Point Loma Nazarene University

NO: The legislation seizes the property rights of homeowners who bought their properties in the hope that they would buy in an area zoned for similar single-family homes. Without requiring additional infrastructure, this leads to parking problems, school overcrowding, and additional strain on police, fire protection and other public services. It eliminates open or green spaces without compensating for parks. It usurps the local control and broad public input that shaped community plans and their updates.

Reginald Jones, Jacobs Center for Neighborhood Innovation

NO: While well designed to increase housing stock, Senate Bill 9 has the potential for unintended consequences. It may be beneficial for those with access to capital to redevelop their property, but less so for black and brown homeowners who typically have more limited equity and ability to raise financing. Even with the three-year “intent” residency requirement, speculators could make unsavory deals with disadvantaged homeowners. For those who have invested in place, the potential change in community character is another concern.

Kelly Cunningham, San Diego Institute for Economic Research

NO: It’s hard to conceive of a more invasive action than the legislature could take from cities beyond local control, affecting nearly seven million California homeowners who have successfully acquired their own single-family homes. The law creates a huge opportunity for real estate speculators to take over established single-family neighborhoods, increase housing density in areas not intended for such numbers, and defeat well-established planning goals. encouraging development near public transport corridors and employment centers.

Phil Blair, Workforce

NO: Adding unreasonable units to currently zoned neighborhoods is unreasonable. Our residential streets will be transformed into parking lots. There are many opportunities for housing in areas currently zoned industrial or commercial. Why not build over huge retail stores with acres of parking at night? The city of San Diego and the county must first maximize their land.

Gary London, London Moeder Advisors

YES: We need housing to support our economy, and this legislation urges the local government to allow it, after decades of resistance. Disclaimer: I don’t see a realistic scenario where infill will bring enough additional housing to bring down our regional prices. But because land costs are the most important factor in home prices, building on quartered land means building homes on less land. So these will be cheaper houses. And most will be rentals.

Alan Gin, University of San Diego

YES: There is a desperate housing shortage in the state, especially in coastal areas. Despite the detractors, people still want to live on the California coast and they are no longer making land. The only solution for fully built up areas is to allow increased density. Senate Bill 9 does this, but includes safeguards against projects that threaten public health and safety. It is not the complete solution, but every little step is necessary to address the state’s housing affordability problem.

Bob Rauch, RA Rauch & Associates

Do not participate this week.

Austin Neudecker, Weave Growth

NO: I am not yet convinced that the bill does what it attempts: to address the serious problems of housing availability and affordability. The bill is well-intentioned, but appears to be drafted without serious consideration around the impacts of increased density (e.g. parking), nor the likelihood that the main beneficiaries will be commercial real estate investors and home sellers (not home sellers). buyers / tenants). If the state plans to override local jurisdictions, a more nuanced bill is needed.

James Hamilton, UC San Diego

NO: If my neighbor builds four houses on the land next to me, his property’s value goes up and mine goes down. Should he have to compensate me if he does? Zoning bylaws are one way to deal with this problem, by allowing him and me to commit to the characteristics of the neighborhood in which we plan to live in advance. Local regulations are imperfect, but preferable to one size fits all. all dictate from Sacramento.

Chris Van Gorder, Health Scripps

NO: The answer to the housing problem is not for the state to take control of zoning laws away from elected officials and voters. It will only be solved by making it cheaper to build new housing and collective housing in suitable locations. The development of multiple units on what used to be single-family land will increase traffic congestion and put a strain on the community’s resources and infrastructure. Developers and speculators will profit at the expense of longtime residents.

Norm Miller, University of San Diego

NO: While I applaud the effort to increase housing supply and affordability, and I like to limit the powers of the California Coastal Commission, this sweeping bill clashes with restrictive height limits that make it almost impossible to add density without demolishing houses and building micro-units, then without adequate parking. I suspect most cities will end up in lawsuits with the state. Perhaps it would be more effective to challenge restrictive covenants on minimum lot sizes and height restrictions in areas close to public transport?

Jamie Moraga, IntelliSolutions

NO: While homelessness and affordable housing remain a critical issue in our state, Senate Bill 9 is a step in the right direction, but it is unlikely to have a significant impact. The bill undermines local planning and control and could have unintended consequences, including overcrowding and stressed infrastructure. It may also provide an opportunity for community land trusts and qualified nonprofits to develop the properties as they are exempt from the three year owner occupation requirement. Reducing red tape (including fees / taxes / regulations) as well as labor and building material costs in California could help lower home building costs and increase affordability.

David Ely, San Diego State University

YES: Too many California households are spending too much of their income on rent or mortgage payments because housing supply has not kept pace with demand. Increasing housing density will help to remedy the imbalance. Until the housing stock increases and becomes more affordable, employers will face ever greater challenges in attracting and retaining employees. Senate Bill 9 alone will not solve the housing crisis, but is a step in the right direction.

Have an idea for an EconoMeter question? Email me at

Follow me on Twitter: @PhillipMolnar

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Graham Chapman: Was Michael Gove designed to fail in leveling up? Thu, 23 Sep 2021 10:59:13 +0000

Four serious fault lines will face the new Communities Secretary as he seeks to deliver on the Prime Minister’s top priority, writes the former deputy head of Nottingham City Council and former vice chairman of the East Midlands Development Agency.

Michael Gove has been hailed as Mr. Fixit and as such has been given the responsibility for the upgrade. It is also expected to show significant progress by the next election. The optimism behind this expectation betrays the main flaws in the government’s level-to-top strategy.

Graham Chapman (Lab), former Deputy Head of Nottingham City Council and former Vice Chairman of the East Midlands Development Agency

But let’s start with the positives. The government has recognized and prioritized the real problem in the UK, the regional imbalance: it is trying to do something, repackaging and inventing new sources of funding – the cities fund, the leveling fund, the prosperity fund. shared; it tries to develop new policies – the relocation of the civil service, the free ports, the regional investment bank, the revision of the Green Paper and the emphasis on the role of green energy production in the regeneration of post-industrial areas.

However, there are four serious flaws, most of which seem to have escaped the government’s attention.

A timid commitment

The first is the sheer magnitude of the task. This is not a two to three year project but a 20 to 30 year project and the funding required is in the order of billions of pounds, not millions of pounds. To expect such a reallocation of resources would be unreasonable, even in the medium term. But even initially, the promised regional funds fall short of the existing funding streams they replace.

The local growth fund (£ 1.5bn per year) ended in March and will be replaced by the annual leveling fund of £ 1.3bn over four years, with just £ 600m spent in 2021. European funds (mainly ERDF and ESF) to the value of £ 1.56 billion per year will cease and be replaced by the Shared Prosperity Fund, which the government says will be of equal value. However, it may take several years to reach this level of spending and only £ 220million has been committed in 2021. Future spending commitments are vague or nonexistent, so we have to wait and see. However, given the noise coming from the Treasury, they are unlikely to live up to expectations.

However, to appreciate the magnitude and complexity of the task, we must compare the timidity of this commitment with 2,000 billion euros over 20 years that have been invested in East Germany with effect, or the billions allocated on 35 years at the Italian Mezzogiorno to little effect.

National post-Covid growth

The second fault line is a lack of knowledge of the dynamics of regional development. You can’t level up expecting everywhere to develop simultaneously. Certain areas must be retained. In addition, there is the issue of concentration. With limited resources, you need to choose your targets carefully. But there are already competing demands that could deflect the policy.

The start of HS2 in the south risks worsening the imbalance of the first years

There is mainly the post-Covid imperative for overall national growth which currently, due to regional economic balance, can be best achieved by supporting high growth areas. This is anchored in the government’s 80:20 rule, which sees 80% of housing finance directed to areas with the highest affordability pressure, its fintech [financial technology] strategy, whose key hub will be London, or in the proposed arc of Oxford Cambridge, which risk widening the gap by further stimulating high-growth areas.

Success here could even suck growth from other more disadvantaged areas. For example, starting HS2 in the south risks worsening the imbalance in the early years and, if truncated in Birmingham, will end up negatively impacting disadvantaged regions. Additional tension is the ‘me too’ phenomenon of the pockets of poverty in the south demanding, and rightly so, the same support as the Red Wall areas. Then there is the phenomenon of powerful ministers who take action for their not-so-deprived constituencies (echoes of southern Italy here). This means that the limited resources made available will be of little value and may be subject to counterproductive forces created by the government itself.

“It’s about education, then skills”

The third and perhaps most important flaw in the approach is the failure to understand the basic factors that stimulate regeneration. The government has fallen into the classic trap of assuming that the key lies primarily in the physical projects – city funds, HS2, free ports, small package infrastructure projects backed by the leveling fund. Yet it is commonly accepted that in a modern economy any long-term policy must be based on human capital or, as Michael Heseltine stated in evidence before the Commons Business Innovation & Skills Committee in October 2016, “it s ‘it is education, then skills’. .

The role of skills remains an afterthought with only a genuflection towards investing in skills

Yet education funding regimes, and especially the early years, fall short of the challenge. Indeed, with the new funding mechanism which is likely to be based more on capitation than deprivation, and the disappearance of early childhood initiatives, the trend of education is going in the opposite direction. Meanwhile, the role of skills remains an afterthought with only a genuflection towards investing in skills and leaving the highly neglected, still grossly underfunded higher education sector.

Remove purchasing power from disadvantaged communities

The final fault line is completely self-inflicted. The government over the past 10 years has unveiled the benefits that the Blair-Brown government has conferred on disadvantaged areas, whether in funding education or more specifically in spending by local governments or the most disadvantaged areas, mainly in the North and the Midlands, saw the greatest losses in purchasing power compared to the more affluent areas mainly in the South (with the exception of London). Add to that the 80:20 rule for housing assistance and the imbalance in regional transport infrastructure and you have two compensatory policies. This will be compounded by three factors confirmed last month – the lingering expectation that adult care will be further subsidized by city tax, the end of the £ 20 universal credit hike and the increase in national insurance.

All of this risks depriving disadvantaged local communities of far greater purchasing power than any compensatory payment resulting from a leveling-up initiative. Yet the level of aggregate economic demand in a region is probably the main medium-term stimulus for private sector investment needed to support growth.

Suddenly, Michael Gove was he thrown what is called in rugby union a “hospital pass”, a challenge both daunting and complex, which the government has probably not still understood the risks? If he wants to make inroads, he may first have to reconsider his opinion on the value of experts.

For Graham Chapman’s full review of leveling, including policy proposals, see

Graham Chapman (Lab), former deputy head of Nottingham City Council; Former Vice President, East Midlands Development Agency

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COGOS Partners with Three Wheels United to Provide EV Financing to Driver Partners, Auto News, ET Auto Tue, 21 Sep 2021 13:38:00 +0000
New Delhi:
Bengaluru-based logistics start-up COGOS on Tuesday announced its partnership with three Wheels United (TWU), a light electric vehicle financier, to provide electric vehicle (EV) financing solutions to partner drivers.

According to a press release, this partnership will further encourage partner drivers to remain relevant to the changing needs of the logistics business and to secure easy financing for electric vehicles. This merger will easily finance more than 500 VE.

The combination between COGOS and TWU responds to current market challenges by providing smoother financing on the road price, easy payments and assured profits, according to the company statement.

he changing landscape and changing customer demands have changed the dynamics of logistics businesses. EV as a business model seems ideal to many; However, the financing of electric vehicles has been a major obstacle to full adoption of electric vehicles.Prasad Sreeram, CEO and Co-Founder, COGOS

Prasad Sreeram, CEO and Co-Founder of COGOS, said: “The changing landscape and changing customer demands have changed the dynamics of logistics companies. EV as a business model seems ideal to many; However, funding for EVs has been a major barrier to full adoption of EVs. We are very excited about the partnership with TWU. In addition to ensuring the acceleration of our electric vehicle adoption goals, it also helps our driver partners to be relevant to current market demands. ”

Cedrick Tandong, CEO and Co-Founder of Three Wheels United, said: “We continue to expand our partnership with logistics operators, making it easier for logistics partners and their drivers to switch to electric vehicles through the platform. TWU form. Our partnership shows our commitment to logistics operators and their drivers who can now easily switch to economical, very profitable and less polluting vehicles. We welcome other partners on board ”

COGOS said it plans to roll out the electric vehicle fleets from Tier 1 and Tier 2 cities.

The startup recently announced its plan to roll out 2,500 electric vehicles by the end of 2023. The company says its electric vehicle fleet could contribute to a reduction of 15,000 tonnes of CO2 per year, when operating at full capacity.

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Fond du Lac Worker Incentive Program Offers Affordable Price To UW Graduates The Badger Herald Tue, 21 Sep 2021 00:29:00 +0000

As numerous Small suburban and rural towns in Wisconsin, Fond du Lac faces a labor shortage.

As students of the University of Wisconsin system graduate and are tasked with finding jobs, many are turning to major cities like Milwaukee, Chicago, Minneapolis, and Madison for work.

It’s no secret that these cities, despite their metropolitan allure, are to become more and more unaffordable. Fond du Lac tries to reorient these young professionals and young graduates far from the big urban consumption centers towards their own city.

Fond du Lac’s economic development officials – faced with the reality of an aging workforce, 25% of whom will be 65 or older in the next 10 years – recently created a worker relocation incentive program to encourage professionals to settle in the region. Economic problems caused by COVID-19 restrictions also contributed to the city’s decision to launch the program.

The incentive offers several benefits in a tiered system and pays up to $ 15,000 in direct cash compensation. The workers who do $ 35,000 and rent a house for at least a year Is eligible receive $ 4,000. Those who earn $ 65,000 or more and buy a house in Fond du Lac can get the maximum of $ 15,000.

The program depends on the participation of local businesses, which should provide the cash incentives up front in exchange for 50% refund of the city’s economic development agency.

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The jury is still out on how effective these programs are in getting people to move and whether they significantly enhance the city’s development. But a similar program in Topeka, Kansas showed promising results in 2019, with 40 new workers moving to the city.

As numerous as individuals see it now, the choice to move to a smaller city depends mainly on the drop in the cost of living.

In 2021, the median rent of a T3 in Madison was $ 1,306, while at Fond du Lac it was $ 854. A high cash incentive could stimulate significant migration to rural towns. However, the ones that Fond du Lac offers may not be enough imbalance employment opportunities between metropolitan areas and more rural towns.

The initiative could partly increase the desire of young professionals to live in Fond du Lac. The government is trying to invest in the local economy by creating more jobs and purchasing power in the area, which could benefit current residents.

However, current residents who have already decided to move to the area before the start of the program will not receive money directly. If the program does not lead to a tangible economic boom in the region, it could prompt these residents to move to a larger neighboring city.

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In other words, this program is high stakes.

Grants as a strategy for solving social problems are only successful when they have a clear purpose within the local economy. But done too lazily – such as simply throwing money at people – can prevent the grant from reaching the service or entertainment. Industries most affected by COVID-19 in Fond du Lac.

For young graduates looking for a job, the advantages of moving to a city like Fond du Lac lie in its affordability. They won’t have direct ties to the local economy – like homeownership – and can spend most of their incentive payments on savings or debt repayment.

Ultimately, the Fond du Lac grant is a band-aid for a larger problem. In the United States, business development and population concentration are shift away from rural areas and in expensive metropolitan areas where economic bubbles exist.

Infrastructure is partly to blame for this brutal split. Roads, broadband access and utilities in rural areas are in poor condition across the country, which is why President Biden is trying to push a two trillion dollar infrastructure deal through Congress.

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The pandemic has shown that some jobs do not require an office or people to be in person to do the majority of their work. That being said, the majority of the country’s work can be done remotely.

Young professionals in Wisconsin, especially students looking for an affordable start to their careers, should consider participating in the Fond du Lac incentive program.

Until the federal government makes bigger changes to the way it levels infrastructure development between small and big cities, it’s understandable that graduate students and young professionals still see big cities as a point. attractive starting point for their career.

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Second Quarter Credit Union Investment Trends: Securities Holdings Rise As CUs Put Cash To Work Mon, 20 Sep 2021 14:00:15 +0000
Source: Callahan & Associates

The unrealized effects of three rounds of stimulus payments resulted in an annual deposit growth of 14.9% in the second quarter of 2021. However, from the first quarter, stock balances increased by only 1.1. %, down significantly from quarterly growth of 8.3% a year ago, but almost double the average rate recorded in the second quarter over the previous three years. With the slowdown and the cessation of direct payments of federal and state benefits in the second quarter, it is evident that members across the country are still managing their finances prudently and avoiding large purchases and investments. A new wave of COVID-related news has further clouded the prospects for economic recovery and more will be revealed in the months to come.

Markets widely interpreted June’s Federal Open Market Committee (FOMC) highlights as more belligerent than previous meetings, including the change in participants’ median forecasts for the federal funds rate (“dot plot”). The consensus went from the March meeting where no rate hikes were expected until 2023, to 50 basis points of rate hikes by the end of 2023 at the June meeting. Additionally, the pressure to deal with the Fed’s reduction in asset purchases continues to intensify as the FOMC navigates towards a future reduction, with many market participants expecting a more concrete plan in the months to come. coming and conversations begin and progress.

Decrease in total investments

In the absence of additional stimulus and a slight increase in loan demand, investment balances declined accordingly. On a quarterly basis, total investment fell 0.4% (- $ 2.9 billion) from March to June and totaled $ 699.9 billion at the end of the quarter. Contrary to recent trends and despite a crooked yield curve (yields on two to five year bonds rise and longer-term yields fall after the June FOMC meeting), cash balances contracted by 11.1 % from March, evidence of active participation of credit unions by putting money to work. As a result, investments in securities and certificates grew at a strong quarterly rate of 7.6%.

The quarterly change in net liquidity for the industry (change in equity balances minus change in loan balances) was negative for the first time since September 2019, as demand for loans, particularly vehicle loans, declined. gained momentum. First mortgages again accounted for the lion’s share of loan portfolio growth, up 2.7% from March, but auto loans trailed behind with balances up 2. 1% over the quarter.

Government and agency holdings drive portfolio earnings

Cash and investment balances decreased $ 2.9 billion to end the quarter at $ 699.9 billion. The main driver of the net decline was an 11.1% reduction in cash balances of credit unions across the country, while securities and investments rose 7.6%. Credit unions deployed the majority of funds to federal agency MBS (56.7%) and non-MBS (14.9%) securities and US government bonds (19.5%). In total, credit unions reported $ 241.7 billion in overnight cash balances, including $ 184.2 billion to the Fed and $ 44.1 billion to corporate credit unions. Cash on deposit fell across all segments, as Fed and corporate credit union balances fell 10.8% and 16.0% quarter over quarter, respectively.

Successful cash deployment strategies resulted in a reduction in cash flow as a percentage of total investments, falling to 38.3% of total balances in the second quarter. Prior to March 2020, when this metric peaked, the industry average cash allocation was 28.6% between 2016 and 2019.

With the exception of banknotes and cash, each major segment of the investment portfolio has grown on a related quarterly basis. U.S. government bonds posted the largest percentage increase in the quarter, 19.6%, as many investors looked at the curve when rates initially rose in late winter and early spring. . Mutual funds posted the second largest percentage gain, up 12.2%, thanks to a combination of entries into traditional investments and prefinance benefit accounts for executives. The biggest gain in dollars was again the MBS debt of federal agencies, up 8.9% (+ $ 17.3 billion).

Investment portfolio data pie chart Source: Callahan peer-to-peer analysis

Credit unions rework portfolios, add duration

Fixed income yields traded in a narrower range for most of the second quarter, after the rise in first quarter yields outweighed the impact of spread tightening over much of the period that regular. The Fed’s June 16 FOMC meeting changed the math for many as the quarter neared the end. The hawkish sentiment from the meeting notes, particularly the timing of a rate hike, pushed up price revision expectations, causing the yield curve to twist around the five-year mark. Yields in the two to five-year maturity range have increased while longer-term yields have fallen. The excess liquidity returned by the Fed’s balance sheet and US fiscal policy, combined with a shrinking pool of investable assets, pushed short-term rates and money market rates to all-time lows. The Fed’s technical adjustments to the IOER and the repo facility offer rate (both increased by 0.05% at the June meeting) should ease some of the downward pressure on rates at the end of the curve, but this is not a long-term solution as the supply / demand imbalance remains a problem, among other challenges.

In credit unions, a decline in cash holdings and a slight increase in investing activity resulted in longer maturities of investment portfolios in the second quarter. Investments continue to target the bottom of the curve – three to seven years – where the yield spreads were widest. Each securities maturity segment has increased since the first quarter. The strongest percentage growth was seen in investments with maturities of three to five years. This segment increased $ 17.8 billion, or 20.0%, from March and accounted for 58.2% of the quarterly growth in the investment balance. Likewise, investments with a maturity of five to 10 years increased 10.2% during the quarter, contributing 29.1% to portfolio growth.

Pie chart showing the composition of investments by maturity Source: Callahan peer-to-peer analysis
Sam taft

Sam Taft is Assistant Vice President, Business Development for Callahan Financial Services, Distributor of Trust for Credit Unions, in Washington, DC

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Bill Baker Targeting Neglected Services, Good Rx Healthcare – Lowell Sun Sun, 19 Sep 2021 09:03:33 +0000

Gov. Charlie Baker plans to reiterate health care reform legislation, two years after tabling a bill to increase spending on primary and behavioral health care.

“We’re going to get back to this one,” he told the New England Council on Tuesday.

Baker said Medicare payments underestimate services such as behavioral health, addiction treatment, primary care and gerontology, resulting in underfunding.

According to the State House News Service, the bill Baker tabled in October 2019, one of many set aside by the arrival of COVID-19, would have required further investment in these areas from suppliers and insurers.

Baker’s first crack in this legislation forced hospitals, physician groups and insurers to disclose how much they are currently spending on primary care and behavioral health. By 2023, spending in these two areas is expected to increase by 30%, without exceeding the annual ceiling for health spending.

This additional financial commitment would be offset by higher reimbursements from insurers for these services. Massachusetts is estimated to spend only about 11% to 15% of its health care dollars on primary care and mental health.

Suppliers or insurers who fail to comply would be subject to scrutiny by state regulators
Baker’s initiative would have brought Massachusetts closer to other industrialized countries, which spend much less on health care but have a higher life expectancy than the United States.

This is because these countries place a lot more emphasis on primary care than we do. Their gatekeepers can often dispense preventative solutions that can avoid the need for more sophisticated – and expensive – procedures later.

The result of this imbalance means that the vast majority of health care resources in this country go to hospital services, specialty care and prescription drugs.

The Governor’s Bill also followed the lead at the federal level to replace the fee-for-service model – the amount of care billed instead of quality – with a model that rewards positive patient outcomes, not volume.

These proposals for redistributing resources have not received a warm welcome from many Boston hospitals and others accustomed to providing high-tech medical solutions; they called these state-mandated measures unrealistic.

Baker told the New England Council that his bill, which he said he would likely table by January, couldn’t be more timely.

“Now we have bigger challenges in this space than before the pandemic …”

The News Service said Baker’s comments dovetail with those of Senate Speaker Karen Spilka and Speaker of the House Ronald Mariano, both of whom identified mental health and health care in general as top legislative priorities.

Public bodies including the Health Policy Commission and the Massachusetts Health Connector recently reported the rising costs facing Massachusetts consumers.

Last week, the Health Connector approved several plan offers for 2022, with a cost increase that some board members said was unsustainable.

The plans feature an average premium increase of 6.9% for the 85,138 members whose medical coverage is not subsidized or who receive advance tax credits on premiums.

With the aging of members taken into account, the increase in the rate of 6.9% for non-subsidized non-group members becomes a jump of around 8.5%.

Nancy Turnbull, who previously worked at the State Insurance Division and Harvard School of Public Health, noted that next year’s average premium increases are “twice, if not more” than the current cap. benchmark of 3.1% of health care costs.

The Policy Commission on Wednesday recommended several measures in response to these ever-increasing costs.

Approved unanimously, they include price caps for the most expensive providers, a more in-depth review of outpatient and outpatient hospital extensions, and new affordability standards for health plans.

The recommendations are part of HPC’s annual cost trends report, which explores the 4.3% growth in total state health spending from 2018 to 2019.

We don’t know if Baker’s new bill will accurately reflect his previous efforts, but to demand that cost caps be met and sufficient resources allocated to historically underfunded and undervalued sectors like primary care and healthcare. mental health should be its primary focus.

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Solving the economic crisis and meeting the challenges through reforms | Print edition Sun, 19 Sep 2021 00:56:30 +0000

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“Our country is facing a serious currency crisis. Data from the Central Bank shows that the country’s net foreign exchange reserves are close to zero, meaning that almost all of its reserves are borrowed.

The importance of this declaration to Parliament by Mr. Basil Rajapaksa, Minister of Finance, on September 7, does not lie in the announcement of this well-known economic situation, but in its admission by the new Minister of Finance.

No pink picture

Contrary to the optimistic images painted by some other ministers, who went on to say that the problem of insufficient foreign exchange reserves would soon be solved by inflows of foreign currency, this statement recognizes the critical state of the country’s foreign exchange reserves and implies the need to solve it.

Recognized problem

Recognizing the seriousness of the problem is an essential first step in finding solutions. However, the country’s external financial vulnerability can only be addressed with a new vision that adopts essential economic reforms. Persistent trade and balance of payments deficits are the result of inappropriate monetary, fiscal and trade policies.


While COVID has exacerbated the external financial difficulties due to the loss of tourism revenue, on the one hand, and increased spending, on the other hand, the precarious state of external finances has been caused by structural deficiencies and inappropriate fiscal and monetary policies.

Problem solving

Solving the problem requires economic policy reforms. International aid, whatever its source, is an essential and immediate need, but such palliatives, while essentially important, will not resolve the fundamental imbalances in the economy.

Budget imbalance

As the Minister of Finance himself noted in his September 7 speech to Parliament, public finances are in a precarious state with declining revenues and spending continuing to rise. Correcting this fiscal imbalance is vital for economic stability.

Budget consolidation

Large budget deficits negatively affect all sectors of the economy. Reducing the budget deficit or fiscal consolidation requires a dual strategy of reducing public spending and increasing public revenue.

The possibility of reducing public spending is limited due to rigidities in public spending. The bulk of government spending is on wages and pensions, debt service costs, and public enterprise (SOE) losses. However, prudence in public spending, reform of state-owned enterprises to reduce losses and not to undertake large unproductive capital expenditures are essential to reduce spending.


The improvement in income is the most important. As the Minister of Finance noted, many of the major sources of revenue have dried up. He told the House: “Due to COVID-19, government revenue for this year has fallen between 1.5 trillion and 1.6 trillion rupees from the estimated amount.”

These deficits included import duties on cars and other “non-essential imports” and on gasoline, excise duties on liquor and the income tax relief in the last budget.

Monetary Policy

Monetary expansion has been an underlying cause of economic destabilization. Now that it is clearly evident that the monetary policies adopted by the government have caused inflation and external financial instability, it is prudent to abandon it and pursue a moderate monetary policy.

Trade reforms

Several prominent international trade economists have stressed that trade policy reforms are vital for increasing the country’s exports. In a recent webinar hosted by the Advocata Institute, Dr SarathRajapatirana, former head of the World Bank’s Trade Division, Dr Dayaratna Silva, former Ambassador of Sri Lanka to the World Trade Organization (WTO} and Australian National University (ANU) Emeritus Professor of Economics, Dr Prema-chandraAthukorala, stressed the need for trade reforms to expand the country’s exports by making them competitive in the global market.

Para rates

“Countries that have grown rapidly, especially in East Asia, have understood the importance of trade reforms,” said Dr SarathRajapatirana.

The first step, he said, of such a reform program should be to simplify border taxes by removing paratrix. These are fees and charges in addition to the import duties that have been imposed. He advocated a single, uniform tariff of 15 percent for all imports.

Exports: GDP

Dr Rajapatirana pointed out that Sri Lanka’s trade as a percentage of GDP has been low compared to Thailand and Vietnam because we have not exploited our trade opportunity as we have high tariff rates compared to other developing countries.

In addition, although tariffs play a role in protecting domestic infant industries, if they are too high, they can become anti-competitive. Dr Rajapatirana observed that recent import restrictions, such as the ban on a wide range of consumer goods from April 2020, further worsened Sri Lanka’s growth potential and put Sri Lanka in contradiction with the rules of the WTO.

World Trade Organization (WTO)

Dr Dayaratna Silva explained the serious consequences for Sri Lanka’s economy if such import restrictions continue. There is a possibility of tariff retaliation.

“Prolonged import controls are not WTO-compliant, and it is high time they were corrected,” he said.

He also warned that such forms of retaliation could have a significant negative effect on our imports, exacerbating our current currency and balance of payments crisis.

“My concern is the long-term industrial development of the country due to these restrictions and the inefficiently allocated resources as a result,” he added.

European Union

Ambassador Denis Chaibi, head of the European Union delegation to Sri Lanka and the Maldives, stressed the importance of adhering to global trade rules.

“The European Union is trying to have a rules-based order. When a country does not follow these rules, the rules-based structure is affected. Without trade, Sri Lanka’s prospects are not good, ”he explained.

EU trade sanctions would be a disaster.

Value chains

“No country in the world today produces goods from start to finish within its geographic boundaries. Countries specialize in different components of the production value chain. The Made in the country X label has become invalid, ”explained Professor Prema-chandraAthukorala, Emeritus Professor of Economics at Australian National University (ANU), who is an authority on global production networks.

Comparative advantage

Professor Athukorala underlined the importance for a country “to identify its comparative advantage within the production network”.

He stressed that Sri Lanka cannot achieve economic growth without joining global production networks through trade.

Import controls

He concluded by commenting on recent developments in import controls.

“Selective intervention, without disrupting the country’s incentive structure as a policy, is going to be a recipe for disaster,” he said.

In summary

Foreign aid is of crucial importance to overcome the current external financial crisis. Whatever the source of such assistance, it is only a stopgap. The long-term economic stability and growth of the country depends on the adoption of a policy framework conducive to the competitiveness of exports.

The policies of import substations failed to improve the trade balance, on the one hand, and on the other hand, created shortages of basic goods and private industries of raw materials. Trade liberalization to ensure the competitiveness of international trade is the way forward.

While such trade policy reforms are necessary, they are insufficient. Comprehensive changes in monetary and fiscal policies are imperative. Fiscal reforms that are gradually moving towards fiscal consolidation are vital for the stability and growth of the economy.

In conclusion

The recognition that the country is in economic crisis is only the first step. The courage to change failed policies and adopt comprehensive economic reforms is imperative.

Will the government have the political courage and determination to adopt such reforms?

Isn’t it appropriate that all political parties unite in a national effort to save the country?

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Will UK house prices drop in Q4 2021? Sat, 18 Sep 2021 10:02:47 +0000

Image source: Getty Images

The Office of National Statistics (ONS) released House Price Index data for July 2021. Data shows average UK house prices are up £ 19,000 from the same period last year, an increase of 8%. While this may seem like a positive headline, it is lower than the annual increase from June 2020 to June 2021 (13.1%). The average house price in July 2021 was also £ 9,000 lower than in June 2021 (£ 265,000).

According to Sarah Coles, personal finance analyst at Hargreaves lansdown, that was to be expected. She explains: “The market stopped to catch its breath in July, as we passed the stamp duty holiday deadline. “

So, is the fall in real estate prices just a jolt? Or will they decline further in the fourth quarter? I watch.

Is the UK House Price Index Accurate?

The UK House Price Index (UK HPI) is considered to be the most accurate index as it derives its statistics from registration data provided by the HM Land Registry, the registers of Scotland and the Land and Property Services of ‘North Ireland.

This does not mean that other house price indexes are not accurate. Check the site for a complete table comparing the different measures used by various indices.

Are UK house prices going down?

Let me first point out that although the UK HPI is considered the most accurate measure of house prices, it publishes data that is lagged by two months. This is because collecting and processing data takes time.

For this reason, by the time the ONS releases data, other indexes, such as Halifax, have usually already released house price data for the previous month.

So while the UK HPI shows average house prices fell in July, Halifax has since released house price data for August 2021 which shows house prices are rising, albeit slowly.

Will UK house prices drop in Q4?

The short answer is that the future is uncertain, and no one can be sure. However, certain factors can influence the direction of house prices.

Clearly, the end of the stamp duty holiday has resulted in a monthly drop in the average house price. This was expected as buyer demand declined once the stamp duty holidays began to decline.

The Halifax House Price Index indicates that house prices rose slightly in August 2021. This shows that there are still factors supporting the increases. Buyers can still save up to £ 2,500 under the declining stamp duty holiday which ends on September 30, 2021. The rush to avoid missing the deadline could have contributed to higher demand and an increase housing prices.

Let’s not forget that buyers are looking for more space, mortgage rates are low and government plans encourage first-time buyers to access the real estate scale. These factors continue to fuel demand that is not balanced by supply. As a result, house prices continue to rise.

However, ONS home price data indicates that the number of new constructions increased by 12% and previously owned properties by 9.2%. If this trend continues, the imbalance between supply and demand could be corrected, leading to lower house prices.

Other factors could also affect house prices. As Sarah Coles explains, “Higher unemployment or further lockdowns could hurt confidence in the market. Then again, higher inflation could persist and persuade the Bank of England to review interest rates sooner rather than later next year, which would mean buyers would face higher mortgage payments, which could in turn hit the market. “

Naturally, it is difficult to predict how the fourth trimester will turn out. We’ll just have to wait and see.

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