Pakistan Keeps Benchmark Rate Unchanged for Second Time in 2010

I just thought it would be interesting to see that while many countries have been keeping their interest rates low, ranging from 0 to 3 percentage, Pakistan's central bank still maintains a particularly high discount rate of 12.5 percent. Pakistan wants to reduce the borrowing costs to spur the recovery of consumer and investment demand, yet the country cannot risk fueling already high inflation. Tariffs on essential sources of energy (gas and electricity), coupled with the food shortage and political instability, have significantly driven the consumer prices upward.

Housing Credit. Was it worth it?

The article discusses the extension of the housing tax credit that was passed in early November 2009. The vote in both the Senate and House were nearly unanimous but can it be called successful? Was the bill stipulated during the right time? The credit did boost the market in a very small way but I do not believe it can be labeled as successful. There was and is to many infrastructure problems with the housing credit market for this tax credit to be labeled as successful. The bill should have been held off until the rest of the credit market was restructured because it did give consumers incentive to buy but unfortunately there was not enough supply for housing loans. The real question is will this be re-initiated once the credit market shows improvement in the future.

A Bold U.S. Plan to Help Struggling Homeowners

Thousands to lose jobless benefits April 5

The article describes the persistent problem of unemplyment which has been a crucial problem for the United States over the last few quarters. The jobless benefits which was extended some days ago is about to get expired on April 5. And the expiry date was not extended on friday by the Senate. This will cause 212000 job searching workers to lose their benefits and this inturn will cause the problem even more severe. The rate at which unemplyed finds a job has been decreasing. Therefore the unemplyment rate is in danger of rising once again.
Hope this article sheds light on the knowledge of unemployment and provide enough information to forcast the future of American economy.

Fed’s Sack Says Financial System Needs Leverage

Brian Sack, head of the markets group at New York Fed, said that leverage is essential for financial system to operate and he totally supports the securitization market as long as it is properly structured. He comments that although, subprime crisis led to almost 2 trillion dollars of writedowns, and is an important lesson to learn, US lawmakers, who are planning to make changes in regulation to prevent occurence of such a crisis, should understand that "securitization is a powerful tool that plays an important role in intermediation of credit in the economy."He says that it is size of too extensive securitized credits which caused the crisis, but is not the vechicle itself.

Health Care Reform Bill Summary: A Look At What's in the Bill

The health care bill will cost 940 dollars over the next ten years. The bill will cover 32 million Americans that are currently uninsured. It will include individuals and families that make between 100 and 400 percent of the federal poverty line. Paying for the bill will come from medicare payroll tax, excise tax, and a tanning tax. The medicare payroll tax will tax individuals that make more than 200,000 and families that make more than 250,000 by 3.8 percent. The excise tax means that insurance companies will pay 40 percent on high-end plans. The tanning tax means that indoor tanning services will pay 10 percent. Hopefully, the increase in government spending will be offset by the increases in taxes, and that national saving won't be affected to badly. However, we will find out what will happen in the future.

Digging out of debt

This article discusses the road ahead of most countries.Historically, recessions are followed by periods of deleveraging. This period differs from country to country because not all leverage is in the same place in every economy.In most economies private debt has dropped but government debt has risen, and once private deleveraging is "done" the public sector must cut back. However, according to the research firm collecting all this data, deleveraging has just begun. The firm believes this period of deleveraging will be worse than those in the past because data collected for their sample included Britain as having the highest debt ratio with almost 300%. Currently half the richest countries in the sample have more than 300% of GDP as debt. The article concludes saying that the worst part of deleveraging lies ahead.

Are the Brits headed for the PIGS sty?

According to this article the United Kingdom is in danger of becoming just like Italy, Portugal, Spain, and Greece. The worry is that the U.K. will go deeper in debt, "Government spending is on track to account for more than half of U.K. gross domestic product in 2010, while government debt is heading toward 64% of GDP next year, up from 44% in fiscal 2009." All of these governments currently are in trouble and have needed some sort of help financially. What sets the United Kingdom apart from everyone else is that they have a number of different ways to help themselves out. In the article they talk about some of U.K.'s options in terms of solving this problem, "Both are able to raise funds by selling debt denominated in their own currency, for instance, and have free floating currencies that can ease economic adjustments."

EU approves bailout loans for Greece, if needed

This article is based on how EU and IMF finally came to an agreement that each EU country and the IMF itself will bail out funds to get Greece out of the economic downfall. Though the amount is not precisely known, but it is estimated that it will be around $28.6 billion. Each country will share the fund according to their GDP and population. This combined effort to get Greece out of the downfall is certainly not the best of the solutions but this is politically sustainable solution. Ultimately it is the euro which would suffer, so the decision is best considering the time and situation. Hope this article will give the readers enough information about the bail-out fund and the rescue effort.

Saving Greece

Greece, in dire need of aid, will be getting help from the IMF, France, Germany and other euro zone countries. The funds are not only open to Greece, but all euro zone states as long as there is unanimous approval. The loans are at "non-concessional" rates in order to lure hibernating investors into the market. Of course, with such a huge payout, there are cries of implementing stricter regulations in the management of deficits so a crisis like this does not repeat itself.