Sunday, 26 August 2012

Rhetoric of the Ridiculous

Did you happen to see this recent dramatic quote:
We are in a POW camp, trying to survive.
That's Christopher Donahue, chief executive officer of Federated Investors Inc., whose firm has most of its assets in money market funds.

So who has taken Donahue prisoner? The Afghans? Syrians? Iraqis? How did he smuggle out this message, past his captors? Who else is trapped in the camp? How long have they been held against their will? Why doesn't the U.S. --

Oh right. He's just straining for a metaphor.

Well, at least it's a richly deserved metaphor, yeah?

Judge for yourself.

Here's the context: SEC chairman Mary Schapiro believes that, in an effort to rein in the systemic risks of shadow banking, money market funds should declare a floating NAV (net asset value). That would replace the current fake $1 a share NAV that leads a dumb schmuck investor to believe the funds are invested in fairy tale assets that can never go down in price. Alternatively, the money market funds could hold higher levels of capital or put limits on withdrawals, to better protect themselves.

Remember something: this is an industry that could have undergone a catastrophic meltdown during the financial crisis. The Boston Fed recently reported that 21 money market funds had to be bailed out by their parents. Rules for money market funds need to be reformed. These funds are critical players in the unregulated shadow banking system.

And Mr. Donahue's response is to suggest ... we do nothing, while he spouts war rhetoric of the aggrieved and besieged.

Of course he's still not the winner in over-the-top, completely ridiculous rhetoric from the financial industry. That honor, as CBS recently reminded us, is still held by Blackstone chairman and co-founder Steve Schwarzman, who two years ago said, also choosing battleground imagery:
It's war. It's like when Hitler invaded Poland in 1939.
Schwarzman, if you recall, was talking about President Obama's suggestion to close the carried interest loophole that enables private equity bigwigs to pay a tax rate of only 15 percent on millions of dollars of income.

CBS breaks down what that's all about:

Fund managers earn a management fee, typically 2 percent of assets under management, and a share of the profits, typically 20 percent ... In some cases, Bain charged 2 and 30. The 2 and 20 structure makes for a nice tax deal: While the 2 percent management fee is taxed as ordinary income, the 20 is treated as a long-term capital gain, which is taxed at 15 percent. In private equity lingo, the income from profits is called "carried interest." Many people, including Warren Buffett, have criticized the tax treatment of carried interest, arguing that it's simply compensation, and ought to be taxed as such.

Indeed, it's a distortionary tax break that encourages excessive takeover activity.

And by the way, that 15 percent is the same marginal tax rate that someone with $9,000 of taxable income is paying ... and Mr. Schwarzman is worth oh, let's say, $5.5 billion (according to Forbes).

It's amazing how out of touch some people are.

Tuesday, 21 August 2012

Is It Smarter To Lease Or Buy Your Next Car?

We’ve all heard the terms ‘lease’ versus ‘buy’ in regards to automobiles. So when we start that dreaded car shopping experience we brace ourselves for the onslaught of terms, like financing and payment options, lease or purchase, sinuously spewing from the mouth of that overly-eager car salesman. Don’t get caught under his nebulous spell. If you do your homework before stepping foot into that car showroom, then you can feel confident in your decision making processes. Just in case you don’t know the differences or are unsure about what might work best for you long term, let’s explore the two options and weigh the good versus the bad.


Lease or buy that shiny new car?

Auto leases: Well, we’ve all heard that adage: That car you just bought began to depreciate the very second drove it off the lot. But you fooled all those naysayers, you didn’t buy the car, you’re leasing. What does this mean exactly? Well, first of all, you don’t have a lot of extra cash sitting around so leasing helps your situation since you’ll have a much lower down payment and your monthly payments are also going to be lower, remember you are only paying for the cost of depreciation, so you pay much less money each month than your purchasing brethren, but there are some unforeseen costs involved too. If you are someone who drives a lot, this is another area to take note of. Lease companies will often charge extra for mileage exceeding 15,000 miles generally between .15 and .25 cents a mile. Don’t forget that by leasing a car you will never be free of those monthly payments and you are responsible for all wear and tear costs on the vehicle, something that you should really consider since you constantly drive around with your five golden retrievers. Thank goodness you’ve got options; because a lease has set time limits, at some point you’ll have to choose: will you trade this car in at the expiration of the lease or look into purchasing? This will be difficult for you because you’ve really enjoyed this car, her name is Betsy by the way, and Betsy has been extremely reliable, as a matter of fact the thought of abandoning her to some other driver causes you a moment of panic. Not to fret, again, you’ll need to do some more research to see if Betsy’s outstanding balance is worth taking on or maybe you’ll have to break her heart a little and find someone new. It’s decision time, you love Betsy, but quite honestly she’s lost some of her initial charm and luster, what with all that dog hair. What’s really pulling on your heart is something a little sleeker and maybe a little sportier. You’re suddenly needing a little more freedom in your life, you bid Betsy adieu when your lease is up and drive off in that sportier model, Daphne.




Saving money makes sense.

Purchasing: You’ve coveted auto trader since you were a young boy, hiding them in-between your mattress like forbidden skin magazines. Your boyhood room was plastered with posters of muscle cars and there is only one car you for you; a 2012 ZL 1Coupe, cherry-red with black racing stripes and supple leather interior. Your heart races with that mental image of you behind the wheel, the looks of awe and appreciation you’ll undoubtedly receive from the ladies, the feel of that gear shift in your hand while you navigate your regal way among the common masses. You scoff at those poor souls, stuck in that 1980’s standard model sedan or heaven forbid--the totally uncool minivan. You shake your head and pity their sad existences until you start examining the cold hard facts; namely cost. You’ve been saving up for a long time, but, wow, you didn’t really factor in a lot of these extras; you love those chrome hubcaps, you agree with the salesman that they really do bring out that vibrant red, you can even see your giddy face when you peer into them, but you didn’t realize how much extra they cost. That calfskin leather that caressed your skin like a breath of heady tropical breezes is only going to add to that already hefty price tag. For the first time since stepping into the showroom, you’re starting to sweat a little, and it’s not from just excitement. It’s about all those little things you kind of forget to include and are adding up quickly. But you’re in it for the long run, you’ll never sell this baby off. True, you’ll have a bigger down payment than the lease option, higher monthly payments, oops, it appears your insurance company doesn’t really like these cars either, no matter, this is your dream car. And you’ll never settle for anything less. The thought of some other man’s hands touching any part of her causes your heart to clutch. Nope, you bite the bullet and buy her outright. As you sign your life away, you pray that you may live long enough to actually reach that last payment coupon.


For the type of person who really likes driving new cars each year or so or someone who is a little cash-strapped and doesn’t want to put down that large down payment, leases are a great option. If on the other hand, you know that you’ll drive this car around until the wheels fall off, purchasing would definitely be the better way to go.









Mark McCrell is an auto aficionado who loves to drive his 1974 Buick LaSabre around town and write about all things auto. He currently blogs for the website AutoInsuranceQuotes, which specializes in cheap auto insurance.


Friday, 10 August 2012

4 Ways to Finance a New Franchise Business




Many entrepreneurs and businessmen invest in franchises as doing so is a proven-effective way to generate profits. If you intend to share a business’ best and lucrative practices and you want to be in that business yourself but not on your own, buying a franchise will be advisable.

Franchisors (businesses that own and sell franchises) welcome franchise buyers into their teams. They are dedicated to franchisers’ success since they can succeed as well when the franchise owners succeed. If you invest in a new franchise, you can expect guidance from the franchisor if you need expertise regarding finances and operations.

Franchise systems use proprietary tools along with effective systems to make use of time-tested business techniques. The goal is to achieve positive and ideal financial results. It is also advantageous that you will not have to invest money and effort anymore to building a brand of business. Through investing in a franchise, you will be authorised to perpetuate or operate a business using an already popular or trusted brand.

Thus, you can never go wrong with franchising. However, it is not cheap. Investing in a franchise can be a costly endeavor. If you think your financial resources will not be enough to cover requirements, there are different ways to finance a new franchise business. Here are four of the most commonly used options.


1. Obtain traditional commercial bank loans. There are many lenders that offer and provide traditional commercial bank loans. In general, most of those financial products require collateral or security. You just need to prepare and submit required business documentations to assure the banks that your business will be able to sustain and repay the loan amount. Many non-traditional loan providers also offer and provide similar products to businesses.



2. Get unsecured loans or lines of credit. Unsecured loans are also available to businessmen who may need extra capital instantly. The difference of these products to traditional bank loans is that no collateral or security is required. However, you will also be asked to prepare and submit required documents, which will assure the loan provider that lending money to your business endeavor will not be too risky or that your business can be able to make repayments. It is also wise to get lines of credit that can be used anytime your business needs cash.



3. Use leverage of existing assets creatively. Do you have significant assets? You may use some of those as leverage for financing. There are ways to do so. You may use the assets as security to loans or you can sell some to gather the amount you need. Explore many other creative options.



4. Seek financial assistance from an ‘angel investor.’ That person is open to lending cash in exchange for convertible debt or ownership equity. He or she can be a family member, a relative, or a next-door neighbour who might be willing to invest about $10,000 to $100,000. Angel investors usually lend money to profitable and solid business opportunities like franchises.



Andrew holds a BA in Business Administration and has extensive experience in small business Loans. Over the last 3 years, Andrew has been a regular contributor in business blogs.


Thursday, 2 August 2012

Trying to escape the unemployment trap?


Blogger Amy :) 

According to a study by the Recruitment and Employment Confederation (REC) the number of permanent jobs fell for the first time in 6 months in June 2012 so for those who are unemployed or just left university, the prospects don’t look rosy.

Unemployment is set to increase as a new wave of graduates are set to enter the labour market over the summer. If this trend continues there is a danger that unemployment could hit 3 million in the not too far distant future, so what options are available?

Why are Payday Loan Affiliate Programs a good option for the unemployed?

There is the option of tedious days, trailing the Internet for jobs, writing applications, altering your CV only for it all to be fruitless or you could take control. Payday loan affiliate programs are a fantastic way to make money from home and if a pinch of dedication and enthusiasm is thrown into the mix they can be extremely profitable.

You can be up and running in no time meaning you can start making money immediately. All affiliates start out on the same revenue split but if you are successful and drive a lot of converting traffic/leads then this will be increased so that you receive more money for your leads.

Are Payday Loan Affiliate Programs complicated?

If you are worried that it is complicated, lengthy and expensive to set up, worry not! The best payday loan affiliate programs will have several ways in which you can integrate – set you up with a payday loan website that is ready to go; put their form onto your website; or you could just have a banner on your already existing site or blog and earn money through a pay per click campaign.

The best payday loan affiliate programs will have a dedicated support team that will advice you on which is the best integration option for you and how to make the most out of it.

Are Payday Loan Affiliate Programs expensive to set up?

With the best payday loan affiliate programs you shouldn’t expect any set up costs and you can be ready to go instantly. Once you are up and running it is then up to you as to how much you push traffic to your site; the more high quality traffic to your site, the more chance you have of those people applying and the lenders accepting which means more commission for you!

Are Payday Loan Affiliate Programs lengthy and unrewarding?

The emergence of ping tree systems in the payday loan affiliate industry means that as soon as a customer on your site submits their form it is immediately sent to multiple lenders on a tier from high to low until the lead is accepted. Once the lead is accepted you will receive your commission, the amount of which depends where on the tier the lead is accepted.

The best payday loan affiliate programs integrate with the biggest payday loan lenders in the industry as well as micro lenders and private lenders so there is a greater chance of your leads converting. They will also offer you a choice of how often you want to be paid either weekly, monthly or bi-monthly.

Take control of your life and start making money instantly with a payday loan affiliate program!

Amy Wilde is a marketing professional, currently embroiled in the world of Quiddi, a payday loan affiliate program; using her wisdom and inside knowledge to enlighten people on modern day online moneymaking ideas as well as pros and cons of the payday loan industry.