Posts made in October, 2012

US Consumer Confidence Rises

Posted by on Oct 18, 2012 in Financial Focus

As retailers gear up for the holiday shopping season, they are likely to see some happy shoppers. US consumer confidence has reached its highest level since September 2007. The Thomson Reuters/University of Michigan reading for the October sentiment index reached 83.1, up from a previous level of 78.3. This reading surpassed economist’s expectations by a high margin. The index has averaged 64 since the recession began. In the five years prior to 2007, sentiment averaged 89. The return to pre-recession highs is an indication of an improved housing market, stock market, and falling...

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What is QE3 and Does it Matter to You or the Economy?

Posted by on Oct 16, 2012 in Financial Focus

On September 13, Federal Reserve Chairman Ben Bernanke announced that the Fed would undertake a new program to stimulate the U.S. economy. The move was immediately dubbed “QE3” by pundits and columnists. But what is it and how is QE3 likely to affect you and the rest of us? “QE,” as you probably know, stands for “Quantitative Easing,” a term which refers to a surprisingly simple tool that any government’s central bank can use to put new money into its economy. In most cases, the central bank buys government bonds and puts them on its balance sheet. A...

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Buying vs. Renting

Posted by on Oct 15, 2012 in Financial Focus

For people of a certain age who remember taking out a home mortgage at 15% to 18%, the astonishingly low rates that banks are charging today are a little hard to believe. The chart below, taken from statistics collected by the Federal Home Loan Mortgage Corporation for 15-year and 30-year fixed-rate mortgages, tells the story: rates have been historically low for years, and they have been trending lower ever since the bottom fell out of the real estate market. This has created a strange, but not unusual market situation. People who remember the housing market collapse are nervous about...

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