Consumer Spending Amongst Americans Set to be Stronger than Last Year

consumer shopping

It has been suggested that the increased spending by many Americans over the Christmas period may not be taking as much of a toll on them this January as it may have in previous years. Every year, many people who cannot really afford it end up spending a fortune on things such as entertaining, going out, new clothes, parties, and of course presents for loved ones. This results in a huge number of consumers finding themselves in financial dire straits during the early part of the year, as they struggle to get back on track with their finances having overspent at Christmas.

However, recent figures based on the Problem-Driven Consumer Index suggest that while some people are still having to reduce spending in January, the effects of Christmas overspending may not be as bad this year as they were in January 2015. The index is put together by the Georgetown Institute for Consumer Research, and officials from the institute said that the figures suggested that retail spending may be increasing compared to last year. This was based on the fact that the index was close to forty percent higher this January compared to last.

Contrasting reports from Commerce Department

Despite the encouraging figures and report from the consumer index with regards to what spending levels may be like this year, a very different picture has been painted in separate date that has been released by the Commerce Department. These were figures relating to December 2015 consumer spending, which showed that purchases at American retailers fell by 0.1 percent and this reflected the weakest year since 2009. This suggests that the consumer spending outlook for this year may not be as impressive as the index suggests. Continue reading

South Dakota Petition to Cap Bad Credit Loan Interest Rates

Downtown Sioux Fall, South Dakota

Downtown Sioux Fall, South Dakota

If public officials aren’t tackling the matter of bad credit loan lending then the general public will. At least that’s the idea behind a couple of new petitions circulating across South Dakota that would change the way payday loan establishments conduct their business.

In South Dakota, bad credit loan lenders charge interest rates on average 574 percent. Also, The Mount Rushmore State is one of the states in the nation to not cap payday loan interest rates. This allows retail payday loan stores like Dollar Loan Center and online websites to make a killing of their borrowers. Indeed, there have been attempts to reform the industry with capping interest rates but they have failed.

One petition is seeking to cap interest rates at 36 percent and is being sponsored by South Dakotans for Responsible Lending.

Steve Hildebrand is co-chair of the bipartisan organization and he says that there is “great disdain” within the general public regarding high interest rates that payday loan lenders charge the poor, especially those who are desperate. Continue reading

Sears May Consider a Sale-Leaseback Deal


Sears, Roebuck & Company more commonly referred as Sears saw its stock soar as the company considered a proposal about a sale-leaseback deal. The American Multinational Departmental Store Chain is considering implementing the solution at a time when it is facing increased competition in the market from new chains wanting to take their share of the market.

The Company is running quite low on cash and needs it to stay afloat in the current economic situation. Last year, the struggling retailer had to take a $1 Billion loan just to save itself from running out of cash and continuing its operations. Its dire need for cash has forced it to think about the proposal in which around 300 of its stores will be sold to real estate investment trust and then they will be leased back. No information has been released about the revenue this deal, if allowed to go through, will generate. However, it is a solution for the company to earn instant cash and regain its capital assets of a period of 10-15 years that is there is a change in which the company continues to perform in the market.

Investors of Sears are confident and feel happy about the idea as the company will also be allowing investors to purchase stocks in the trust. This was seen on early Friday morning as the stocks of sears rose by more than 30% in early morning trading. The move is aimed at reshaping the balance sheet after the company suffered its ninth consecutive quarter loss. The Company expects a third quarter loss in consistent with the loss experienced in the same quarter in the previous fiscal year i.e. $310 million. Continue reading

Report: Late Payments on Credit Cards Jump, Debt Falls in Q3


Americans will be spending a large portion of their free time this month at shopping malls, electronic outlets and department stores. On top of being bombarded with advertisements and sale posters by retailers, they will be accompanied by a list, bags and credit cards – also temporarily chucking fiscal responsibility out the window.

Prior to the official beginning of the holiday shopping season, credit reporting agency TransUnion published a report on credit card debt in the third quarter of the year late last month. Its figures came with mixed results.

According to the report, more consumers fell behind on their credit card payments. Between the months of July and September, the rate of credit card payments overdue by at least 90 days increased from 1.27 percent in the previous quarter to 1.36 percent. The figure is down from 1.5 percent from the same time a year ago. A positive number to show consumers are tackling their debt hurdles. Continue reading

When to Buy, Sell, or Hold Stocks?

Buy Hold And Sell Signpost Representing Stocks StrategyIn case of short term investments that are held for trading, it is highly important for an investor to know whether he should sell his investments, hold them, or whether he should acquire new investments. This decision may not be easy to make and there is always some risk involved, but there are certain factors that can help an investor make this decision. The historic market performance of the company is the biggest indicator of the prospective performance. Therefore, the trend in the market performance of the company can help an investor make this decision.

Following are the factors that indicate when to buy, sell, or hold the investments:

When to Buy

Shares can be bought when the company shows very promising financial performance in the future periods. Mostly, when the share price of a company is low and the company releases exceptionally promising financial results, this may set the share price on an upward track which may go on for a substantial period of time. Therefore, this may also be an opportunity for the investors to buy the shares in the company. Recent examples may be the stock of Qualcomm. The stock of the company was undermined due to the lack of the company’s ability to meet its demand. However, as soon as the company announced favorable financial results along with the disclosure that the supply chain issues have been dealt with, the stocks of the company were revived. This gave the investors an opportunity to buy the stock to earn high returns in a short term. Continue reading

Types of Swap Options

swap optionsSwap options hold particular importance for companies that intend to extend their business internationally. One of the risks related to international business expansion is the fluctuation of interest rates. Changes in interest rates influence the financial performance of an organization in a major way because the extent of the borrowing cost to be paid or received by an organization depends upon the prevailing interest rates. If an unanticipated rise or fall occurs in the interest rates, this may have a significant impact on the cash flow of the organization.

An organization projects its future cash flows in order to evaluate its performance. However, if the interest rates change frequently, the projected cash flows of the organization may not be valid therefore the comparison of the actual performance of the organization with the projected performance may not provide valid results. If an organization holds a loan which is subject to the floating interest prevailing in the market, the finance cost to be paid by the organization will depend upon that prevailing interest rate. The organization will have to bear a lower finance cost if the interest rate falls, however on the other hand, the organization will have to pay a higher amount if the interest rate rises.

Following are some of the swap options that can be utilized by a company to mitigate the risk related to fluctuating interest rates. Continue reading

Significance of Financial Ratios in Evaluating the Financial Performance of a Company

Quality and Price RatioFinancial ratios are considered to be the best tool for evaluating the financial performance of a company. Different financial ratios highlight different aspects of the financial performance of a company. Following is a brief introduction to the ratios that are used in ratio analysis.

Profitability Ratios

Stakeholders of the company are interested in the profitability of the company because the dividend payout depends upon the profit of the company. Therefore, in order to decide whether to continue the investment in a company the stakeholders of the company consider whether they are being benefited by the company.

Gross Profit Margin


Gross Profit Margin = Gross Profit/ Total Revenue

Gross profit margin helps the users of the financial statements assess the ability of the company to maintain an efficient difference between the total revenue and the production cost. This ratio indicates whether the company maintains a healthy margin over the sale of its products or services, and whether the cost of production of the company is reasonably low or unacceptably high. Continue reading

How to Find the Best Loan Deals & Options for Your Needs

money-exchanging-handsFrom the outlook, bad credit loans might seem like simple to some individuals but in reality, they are quite complex. A loan may be acquired for a car, a house, a business, or for any other reason. A long term loan is a long term obligation and it is highly important to ensure that this obligation does not turn into an unmanageable stream of cash outflows in the future. There are a number of loan options associated with house loan and this article explores some of those options.

Mortgage Options

House loans are differentiated in accordance with their structure. It is important to consider the structure of the mortgage option before acquiring it. Following are some of the mortgage options:

  • Fixed Rate Mortgage

    Fixed rate mortgage is considered to be the best option because it eliminates the risk related to the fluctuations in the interest rate. The interest rate is determined at the inception of the agreement and it remains the same throughout the term of the loan Continue reading

Significance of Diversity in Investment Portfolio

investment portfolio diversityIt is every investor’s goal to receive high returns from his investments while keeping the risk at its minimum, but one factor that every investor is not aware of is the role played by the diversity in investment portfolio in maximization of the returns and minimization of the risk.

The success of investments does not only depend upon the extent of capital invested or the investment avenues invest in, it depends mainly upon the way the investment portfolio is maintained. It is highly important to maintain a well diversified investment portfolio in order to ensure that the investment risk is managed efficiently.

Diversified Investment Portfolio

Investors can maintain a well diversified investment portfolio by making investments in numerous investment avenues that are not related to each other. This way, a negative trend in one investment will not influence the other investment. Many experts have tried to define a perfectly diversified investment portfolio but not all of them agree with the outcome. However, there is one factor that remains the same i.e.; the investment portfolio should hold securities that belong to independent groups and are not influenced by each other. Following is a brief introduction to the types of securities that can be included in a diversified investment portfolio: Continue reading

Potential Countries for Business Expansion

world mapWith the exponential rise in globalization, it has become difficult for a company to thrive without a significant global presence. Most companies are considering investment in the developing economies. The three countries that have shown significant economic growth in the recent past are; India, Brazil, and China. This article would include a brief evaluation of the economic, social, and technological environment of these countries.


India is one of those economies in the world that have shown an exponential rise in economic development in a very short period of time. A number of companies with significant global presence are establishing their operations in India. There are a number of factors that have influenced the pace of economic development in India. Some of those factors include; availability of skilled labor at a reasonable price, availability of resources, and a welcoming attitude to foreign investments.

Indian economy is growing at a rapid pace therefore the economic environment of the country can help a business earn higher revenues. Indian economy is very friendly to foreign investment and there are potential tax credits available for the international businesses. The human resource available in India is skilled and easily available. Continue reading