Monthly Archives: September 2017

Financial Markets and Institutions

If you enjoying watching television or listening to the radio, it is likely that you have seen or heard an advertisement on refinancing your home. Many homeowners have refinanced their home, even more are interested in doing so, but others do not even know what refinancing is. Whether you are just interested in learning more about home refinancing or you are interested in doing it, there are a number of things that you should first examine.

Refinancing is done for a number of different reasons. Those reasons are all likely to depend on the homeowner in question. Many homeowners make the decision to refinance their home to lower the interest rate on the mortgage that they currently have. There are others who refinance their home to help pay off any debt that they may have accumulated.

As with just about anything else in life, refinancing has a number of advantages and disadvantages. The biggest advantage of refinancing is the amount of money that you can save. It is important to emphasize the can. If you are looking to reduce the amount of money that you are paying in interest, you cannot refinance your home whenever you’d like. You will need to pay close attention to the market and the average interest rates. You will only be able to save yourself money if the going interest rate is less than what you are paying now.

Learn How the Financial Markets Really Move

Many experts rely on other experts to indicate a general trend and what then follows is a herd mentality which is then reflected in articles and press reports that you read in your newspapers and elsewhere. Of course there are exceptions to this and some experts really do seem to have an incredible knack for calling the market whether it be for the market to move higher or lower.

Some experts rely on fundamentals which include the underlying strength of certain high profile sectors and companies in order to derive a feeling for the general market direction.

While other experts rely on technical analysis which attempts to predict certain trends believing that once a trend is established it often continues for a considerable time, allowing traders to profit from these trends.

Look Into Financial Markets Before Leapin

Uncertainty with employment and the economic market have encouraged many people to find wealth building opportunities on their own. With a Internet connection and some basic research, anyone can become knowledgeable about the different investment options available. Investing in stock market for forex funds is one alternative way in which to build wealth. This presents an opportunity to generate an income that is outside of the standard methods. It involves making a financial investment in the foreign exchange market. Not only will it offer potential to solidify personal finances but it will also provide resources for emerging markets.

Using the stock market as a means to create an income can be a risky endeavor. Traditionally, smart choices will increase in value. The key to becoming an effective trader is to understand how the market works and pick investments that have good potential. This is where the work comes into play. Before making an investment for any company, review the background. Gain understanding of their business practices and review the potential marketplace for their offerings. Investing in stock market for forex companies will offer the chance to expand into new areas of the world. Knowing when a product can make an impact will improve chances of success.

Another factor to consider when investing in stock market for forex is the country that is involved. An area of the world that is undergoing change can be a risky investment. Wars, social upheavals and changes in government can signify the potential of failure. They can also result in major wealth. The right opportunity at the right time can provide many benefits to a country experiencing change. Depending on the usefulness of the new technology, it can help stabilize the economy in the nation. It will also provide excellent opportunities to realize a profit.

Why Global Financial Markets Are Doomed

Global central banks led by the Fed have painted themselves into a corner, as their two levers of control, interest rates and currencies, are apparently now seen as ineffective for fostering economic recovery and financial stability. Higher interest rates and an appreciating US dollar could cause severe stock and bond market corrections (by reducing earnings and price/earning multiples for the former and increasing debt payments for the latter). Debt-burdened global governments and private companies especially in emerging markets and the oil-ravaged energy sector could be particularly hard hit and even face bankruptcy in many cases. All of that would exert strong deflationary pressure on a global economy struggling to grow since 2009.

Lower interest rates and a depreciating US dollar could fare even worse, as they could thwart central banks’ ability to have any meaningful control over the financial markets and could pose an existential threat to the fiat currencies of their respective sovereignties. Gold and other precious metals could replace those paper currencies in that scenario. A weaker dollar would also likely boost prices of global commodities generally, including oil, industrial metals, food and other important production inputs, thereby creating the potential for runaway, even hyper, inflation.

The fact that a decisive move in either direction for interest rates and currencies could lead to economic calamity probably explains the Fed’s tentative, peripatetic and at times schizophrenic outlook and policies. It also explains the public’s assumed and publicized disdain for gold and precious metals, even though many nations have been privately, quietly expanding and securing their gold reserves recently. If the price of gold is “allowed” to increase it would signal a de facto loss of faith in paper currencies and in central bank authority and influence.

Mixed Signs on Troubled Global Financial Markets

The Dow Jones Industrial Average experienced a massive rally recently, as did most global markets, but the general trend for the first half of 2009 continues sideways. In Asia, banks jumped recently as described by MSN Money, quote”…with banks extending gains on hopes the struggling global financial system is stabilizing”.

Hope has no place on the financial market unless you are into funding abstract start-ups but the use of the word is perhaps indicative of today’s global sentiment: unstable uncertainty and suppressive denial of  indications of further decline.

The fact that the market contractions are gradual and constant instead of sharp massive corrections marks a historic difference to earlier crashes and bursting bubbles.

Financial Markets and the Housing Sector

Unless you’ve been lost on a deserted island over the last 2 years or so, you’ve probably heard about what’s going on in the financial markets out there. The government stepped in and finally approved a bailout bill to take all of the bad debt and non- performing mortgages and paper off of the books for so many banks and companies that drive our economy. And regardless of whether you agree with their plan or not, it was a necessity. It was actually the lesser of the two evils.

I firmly believe that the markets would have “eventually” corrected themselves, but not until after a long drawn out period of recession that was inevitable. Now that they are working on a plan, finally, to make the banks allocate the funds to stimulating the economy, and not paying bonuses to executives, we should start to see some relief over thye next several months. The government is now playing with the idea of a government owned “bad bank” to handle the non performing paper that’s out there.

And Obama will eventually have a tight grip on how these corporations are using government bailout funds. With the bad mortgages taken off of the books, the banks credit rating goes back up, they actually have money in reserves again, they have working capital, and they can actually put mortgage money back into the market place for home buyers and investors. Personally, I think a lot of this bailout money should actually come from money already stashed for some of these exec’s parachute retirement plans and exit packages. And did you hear that they’re still busting companies that received tarp funds for paying huge bonuses?!

How To Spread Bet The Financial Markets

For many years people have enjoyed a flutter on horse racing and other sports by going down to the high street bookies and placing a bet. A lucky few have made a few pounds doing just that.

But for a few years now some people have been betting on the financial markets with spread betting company’s and it is becoming more and more popular. Spread betting has quietly emerged as one of the fastest growing sectors of the entire financial services industry.

The advantages of financial betting

Investor Protectionism and Financial Market Size

A common denominator of market-based financial system like that of United States and U.K and bank-based financial system such as that of Germany or France is investor protection. The United States has a market-based system because its economy is largely dependent on property and financial asset value. Consequently, it has a large stock and bond markets creating a large market which attracts investors and companies from all over the world. This presupposes that the stock market and individuals (that is investors) play a significant critical role in corporate finance and governance as large fraction of individual portfolios is held in the equity market. Moreover, equity financing is practiced in this system.

On the other hand, bank-based systems are characterized by financial assets predominantly being held by financial institutions encompassing banks, mutual funds, insurance companies, pension funds and others. This means direct equity investment is small whilst individual investment is predominantly held in bank deposits, insurance policies, mutual and pension funds e.t.c. Debt financing comes mainly from banks instead of stock markets and so the stock market is comparatively small and less significant in this type of economic system. The fact is that, in market-based financial systems, investors property rights are protected well due to the fact that stocks and bonds markets are significant and form a higher percentage of the GDP. For example in 2003, financial assets was about 327% of GDP for U.S and 306% for U.K which are market-based dominant financial systems compared to 192% in Europe, 267% in Japan which tends to be bank-based dominant systems, an epitome of socialist systems [1}.

The large stock market size in terms of number of listed companies, aggregate market value relative to GDP and initial public offering (IPO) relative to population is a repercussion of the investor confidence and the quality of laws governing the market. Contrarily, inadequate protection rights minimize the integrity and size of the market as seen in the economies with dominant bank-based financial systems. Even in the efficient market-based systems where shareholders and creditors of the market are protected well by laws, political trends and shift in government policy can inhibit the smooth running of these markets. There is the tendency for governments to garner more power and control in terms of enforcement of the laws governing the market in times of deep economic recession.