Financial bonds – Purple Ribbon Project http://purpleribbonproject.com/ Mon, 16 May 2022 14:32:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://purpleribbonproject.com/wp-content/uploads/2021/10/icon-12.png Financial bonds – Purple Ribbon Project http://purpleribbonproject.com/ 32 32 The little-known flexibility of the ECB | FinancialTimes https://purpleribbonproject.com/the-little-known-flexibility-of-the-ecb-financialtimes/ Mon, 16 May 2022 12:34:03 +0000 https://purpleribbonproject.com/the-little-known-flexibility-of-the-ecb-financialtimes/ Meyrick Chapman is Director of Hedge Analytics and former Portfolio Manager at Elliott Management and Fixed Income Strategist at UBS. It would have been fun to listen to the European Central Bank meeting in April. The Eurozone monetary family shindig was likely even more strained than normal. On one side of the coin are the […]]]>

Meyrick Chapman is Director of Hedge Analytics and former Portfolio Manager at Elliott Management and Fixed Income Strategist at UBS.

It would have been fun to listen to the European Central Bank meeting in April. The Eurozone monetary family shindig was likely even more strained than normal.

On one side of the coin are the inflation-averse Germans and their (relatively) new friends. On the other side are those who are panicking about the damage higher rates will do to their savings and debt burden.

In the end, last month’s press conference suggested that the hard-nosed family members won the day. It looks like the ECB will soon follow the Federal Reserve and raise interest rates. Christine Lagarde said it last week. The ECB could even start reducing its holdings of government debt at some point.

There were probably some grunts from some family members. The discontent has undoubtedly increased since then.

Yields on Italian debt have soared and the spread over German 10-year bonds has widened significantly. There have been references in bond markets to President Lagarde’s famous quip of March 2020 that the ECB is “not here to close spreads”.

Social media is awash with commentators metaphorically rubbing their hands at the prospect of another European sovereign issue emerging just as the ECB’s asset purchase programs wind down.

But isn’t the lesson of the dysfunctional Eurozone family that they always seem to threaten a fight on the front lawn, then end up reluctantly kissing and going inside together? There’s at least a chance that’s the outcome again this time.

No one claims that European rates are as high as those in the United States. The whole ECB policy change seems as much an effort to stop a sharp decline in the euro as an attempt to rein in inflation. And while rates may rise and the ECB’s asset purchases may come to an end, there are a few tricks that can be deployed if things get unruly.

There is the ECB’s long-awaited “crisis management tool”, which is reportedly in the works. So far, the details are a closely guarded secret. Maybe it will look something like the OMT scheme – but hopefully without shame.

It is also possible that the tool modifies the existing asset portfolio. The Pandemic Emergency Purchase Program (PEPP) purchased nearly €1.7 billion in government bonds. Unlike the earlier Asset Purchase Program (APP), the PEPP guidelines are remarkably flexible.

Here are some excerpts from the statement announcing it, with FTAV’s emphasis:

For purchases of public sector securities, the benchmark allocation across jurisdictions will continue to be the backbone of national central bank capital. At the same time, purchases under the new PEPP will be carried out flexibly. This allows for fluctuations in the distribution of purchase flows over time, between asset classes and between jurisdictions.

And from a later statement:

The maturing principal payments of securities purchased under the PEPP will be reinvested at least until the end of 2024. In any case, the future roll-off of the PEPP portfolio will be managed in such a way as to avoid any interference with the appropriate monetary stance.

The reinvested securities will surely follow the same permissive allocation as the initial PEPP investments.

It is therefore possible that the ECB will raise interest rates and launch QT to unwind asset purchases in some member states (such as Germany) while its reinvestment program continues to buy additional member state securities. vulnerable.

It is not common to see a central bank simultaneously easing and tightening its policy. Such flexibility has become a hallmark of an ECB that has had to get creative to keep the family together.

You can be sure that if a pandemic can be used to introduce such flexible rules, a European war will present an ideal excuse for creativity. As the Council said when announcing the PEPP in March 2020:

To the extent that certain self-imposed limits could impede the action the ECB is required to take to fulfill its mandate, the Governing Council will consider revising them to the extent necessary to make its action proportionate to the risks we face.

Moreover, if all that fails and peripheral yields continue to rise, there is always the possibility that domestic investors will step up to the rescue.

When Italian 10-year government yields rose above 4% in 2011, Italian investors enthusiastically bought their own debt even as foreigners sold on fears of Italian fiscal sustainability. When Italian yields fell below 4% in 2014, domestic buying stopped and Italian investors began buying foreign assets for higher yields.

Column chart of Italy's net international investment position as a percentage of GDP.  showing Back in green

Notably, Italy’s net international investment position moved from a large deficit to a large surplus. With Italian yields up over 3% at the start of the month and financial markets everywhere looking risky, it may not be long before domestic investors start buying Italian bonds again, regardless of ECB policy.

They can take comfort in knowing that the large PEPP reinvestment program could be persuaded to over-allocate to Italian government bonds if things continue to be difficult.

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Stocks, bonds and cryptocurrencies: financial winners and losers of the week https://purpleribbonproject.com/stocks-bonds-and-cryptocurrencies-financial-winners-and-losers-of-the-week/ Sat, 14 May 2022 17:30:12 +0000 https://purpleribbonproject.com/stocks-bonds-and-cryptocurrencies-financial-winners-and-losers-of-the-week/ volatility and inflation are the two words that marked the week. Markets remained on the sidelines ahead of the release of price data in Argentina, the United States, Brazil and China. In all cases, the figures were high, which generates worry by the reaction that the central banks will have. To this was added a […]]]>

volatility and inflation are the two words that marked the week. Markets remained on the sidelines ahead of the release of price data in Argentina, the United States, Brazil and China. In all cases, the figures were high, which generates worry by the reaction that the central banks will have.

To this was added a real shock in the world of cryptocurrencies, which generated significant losses for those who had invested in it. Although Friday ended on a brighter note, the week was characterized by red widespread.

I also read: Frequently asked questions about the bonus and everything you need to know

Argentinian stocks, a safe haven

the bolsa Buenos Aires managed to detach itself from the bad moment of the world markets and scored a up 2.7% within a week (i.e. 0.5% measured at the official exchange rate). The weekly performances of Banco Macro (11%), Holcim (6.3%) and Grupo Financiero Galicia (5.7%) stood out.

The S&P Merval index posted a rise of 2.7% over the week. (Photo: Mariano Sanchez/NA).

At the opposite extreme, the the biggest losses of the week went to the newspapers of Aluar (-5%), Transportadora de gas del Norte (-4.3%) and Cresud (-3.5%).

Contrary to what happened in Argentina, in Wall Street the main stock indexes closed with weekly losses of more than 2%. Among the homegrown newspapers listed in the United States, the results are mixed.

An operator of the United States <a class=Stock Exchange, whose stock indices ended the week with falls of more than 2%. (Photo: Andrew Kelly/Reuters).” src=”https://tn.com.ar/resizer/StT8dofIcpVI-5G6izzuCy9e2to=/767×0/smart/filters:quality(60)/cloudfront-us-east-1.images.arcpublishing.com/artear/G2TAF5EDFQOTWW4ETDM2GJJUYQ.jpg”/>
An operator of the United States Stock Exchange, whose stock indices ended the week with falls of more than 2%. (Photo: Andrew Kelly/Reuters).For: Reuters

Of ADR companies that trade simultaneously in Buenos Aires and New York, highlighted the 8% increase recorded by Banco Macro. Central Puerto (4.1%) and YPF (3.2%) also posted gains. On the other hand, Loma Negra recorded the biggest loss, with a drop of 2.9%.

For their part, the companies of Argentine origin who operate only in Wall Street closed field day negative. This was the case of the Mercado Libre, which fell by 14.2%; Despegar, which lost 9.9%; and Globant, which fell 3.8%.

Downgrades on all bonuses

April inflation data, official internals and uncertainty did not help Argentina’s debt. “During the week, the balance is very negative, losing the Global 3.5%”sharp SBS Group on dollar securities. Consequently, the countries at risk it rose 4.9%, or 88 points, to 1,894 points.

The company pointed out that bonds that track the official exchange rate also closed with half-point losses in the week.

Financial week: Falling bonds and cryptocurrencies drove Argentinian stocks higher

Once the April inflation data became known, the debt linked to this indicator decreased. “The good NCE they lost on average almost 1% for various reasons. Some investors thought it was a good time to To take advantage of given that they already looked expensive to trade at historically low real rate levels,” he said. Paula GandaraCIO of Adcap Asset Management.

I also read: Minimum payment alert: How much will credit card refinance cost after BCRA rate hike

The expert added that there was also bailouts in the mutual fund industry, due to seasonal tax payment issues. In this context, he recommended “take advantage of losses to rebuild positions in the face of persistent inflationary pressures and unanchored expectations”.

Dollar: the Central Bank was barely able to buy 20 million dollars

From end to end of the week, the price of blue dollar advanced $2.50 and closed at $203.50although it reached $205.

Financial exchange rates, for their part, recorded significant increases on the last day of the week that led them to reverse the losses of the first rounds. So the MEP closed at $210.94 and gained 1.3% for the week. the counted with liquidationmeanwhile, ended at $212.61, 2.3% above the previous Friday.

In full harvest, the Central Bank bought US$20 million in the week and accumulated a positive balance of about US$500 million during the month.  (Photo: Telam).
In full harvest, the Central Bank bought US$20 million in the week and accumulated a positive balance of about US$500 million during the month. (Photo: Telam).

For its part, the official wholesale dollar rose $1.13 during the week to $117.43 and marked the second highest weekly correction of the year. the central bankwhich had started the week by buying 110 million US dollars, ended with a positive balance of barely 20 million dollars.

crypto crash

who invest in cryptocurrencies lived a real week of panicdue to the collapse of one of the most important projects among the stablecoinsthat is, virtual currencies that seek to follow certain assets of the real economy one by one.

The stable cryptocurrency Terra was intended to follow the course of the dollar one by one, but a crisis of confidence brought the project down in recent days and it lost almost all of its value.  (Photo: Given Ruvic/Reuters).
The stable cryptocurrency Terra was intended to follow the course of the dollar one by one, but a crisis of confidence brought the project down in recent days and it lost almost all of its value. (Photo: Given Ruvic/Reuters).

“Stable Cryptocurrency UST (created to maintain a 1:1 parity with the dollar) and the asset used to absorb its volatility and maintain parity (Luna) They have lost almost all their value.after an outbreak of mistrust in the system’s ability to hold the price 1 to 1″, the economist explained Fernando Marulpartner of FM&A.

I also read: The Central Bank has banned banks from selling cryptocurrencies

The collapse of this Terra project dragged down the rest of even the most recognized cryptocurrencies. During the week, the bitcoin lost almost 18% and it traded below US$30,000.

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As interest rates are expected to continue to rise, what will happen to your bonds? https://purpleribbonproject.com/as-interest-rates-are-expected-to-continue-to-rise-what-will-happen-to-your-bonds/ Thu, 12 May 2022 21:05:06 +0000 https://purpleribbonproject.com/as-interest-rates-are-expected-to-continue-to-rise-what-will-happen-to-your-bonds/ The Federal Reserve recently raised interest rates by another half percent, and those rising rates are expected to keep climbing. Financial expert Carl Carlson, CEO and founder of Carlson Financial, says if you have bonds in your portfolio right now, you need to be careful. According to Carlson, if you owned an exchange-traded fund that […]]]>

The Federal Reserve recently raised interest rates by another half percent, and those rising rates are expected to keep climbing.

Financial expert Carl Carlson, CEO and founder of Carlson Financial, says if you have bonds in your portfolio right now, you need to be careful.

According to Carlson, if you owned an exchange-traded fund that held 10- to 20-year US Treasuries two years ago, today the value of your investment in that ETF is down about 25% or even a bit more.

Now US Treasuries haven’t gone bad, but the rate the Fed is charging is going up. So, every time interest rates rise, the value of bonds goes down.

Carlson said bonds and interest rates tend to have an inverse relationship.

Over the past 30 to 40 years, interest rates have come down. So when interest rates fall, bond values ​​rise.

As interest rates have fallen, the value of everyone’s bonds has risen fairly steadily. This helps offset the stock market when the market is down.

When the opposite happens, when interest rates begin to rise, bond values ​​begin to fall. So now we see portfolios and stock markets falling – and so are bonds.

Carlson said you really need to put yourself in a position where you don’t hold a lot of bonds, and especially long bonds, in your portfolios. Instead, consider a security that is not directly tied to your stock market investments, such as a fixed indexed annuity.

“People should probably start studying this product a bit in this one, you can’t lose money. If the market goes down, you don’t lose money. You just don’t get interest credit But if the market is going up, and it’s pegged to something in the stock market, like the S&P 500, then you get the upside,” Carlson said. “They usually limit it. Maybe you get half the upside of the S&P 500, but you have no downside. So that will give you security, good security, and then a nice potential upside below the rate of return.”

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KBRA Releases Report Assigning AAA and Stable Outlook to State of Wisconsin GO Bonds https://purpleribbonproject.com/kbra-releases-report-assigning-aaa-and-stable-outlook-to-state-of-wisconsin-go-bonds/ Tue, 10 May 2022 21:57:00 +0000 https://purpleribbonproject.com/kbra-releases-report-assigning-aaa-and-stable-outlook-to-state-of-wisconsin-go-bonds/ NEW YORK–(BUSINESS WIRE)–On May 9, 2022, KBRA assigned a long-term AAA rating with a stable outlook to the 2022 Wisconsin State (State) General Bonds, Series A. Concurrently, KBRA affirmed the AAA rating at long-term with a stable outlook on $6.8 billion of general bonds outstanding (GO); the short-term K1+ rating of the GO Commercial Paper […]]]>

NEW YORK–(BUSINESS WIRE)–On May 9, 2022, KBRA assigned a long-term AAA rating with a stable outlook to the 2022 Wisconsin State (State) General Bonds, Series A. Concurrently, KBRA affirmed the AAA rating at long-term with a stable outlook on $6.8 billion of general bonds outstanding (GO); the short-term K1+ rating of the GO Commercial Paper (CP) program and the GO Extendible Municipal Commercial Paper (EMCP) program; and the long-term AA+ rating with a stable outlook on outstanding Master Lease certificates of participation (COP). The long-term COP rating is derived from the state’s long-term GO rating and an assessment of the factors discussed in the KBRA’s Annual US State Appropriation Bond Rating Methodology.

Click here to see the report. To access relevant notes and documents, click here.

Disclosures

Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.

A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine credit rating are available in the information disclosure form(s) located here.

Information on the meaning of each rating category can be found here.

Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.

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Iron ore futures slide as investors watch demand in China https://purpleribbonproject.com/iron-ore-futures-slide-as-investors-watch-demand-in-china/ Fri, 06 May 2022 04:58:11 +0000 https://purpleribbonproject.com/iron-ore-futures-slide-as-investors-watch-demand-in-china/ (Bloomberg) — Iron ore suffered losses as risk aversion in financial markets intensified and investors weighed the outlook for demand in top consumer China. Bloomberg’s Most Read Stocks fell along with bonds on Friday as inflation, rising borrowing costs and virus lockdowns in China depressed sentiment. The outlook for iron ore is complicated by the […]]]>

(Bloomberg) — Iron ore suffered losses as risk aversion in financial markets intensified and investors weighed the outlook for demand in top consumer China.

Bloomberg’s Most Read

Stocks fell along with bonds on Friday as inflation, rising borrowing costs and virus lockdowns in China depressed sentiment. The outlook for iron ore is complicated by the country’s Covid-zero goal.

At a meeting on Thursday, the Politburo reiterated its support for a lockdown-dependent approach to containing the virus. This follows President Xi Jinping’s bold pledge last week to boost infrastructure construction to save economic growth, which has come under pressure from the country’s Covid strategy.

“The meeting held yesterday mainly focused on epidemic control,” said Wei Ying, ferrous analyst at China Industrial Futures. “This indicates that the restrictions will continue for the near future, which has raised some concerns” about the impact on the economy.

Meanwhile, post-holiday demand for the steel ingredient has only increased slightly, according to a note from Holly Futures. Virus-related lockdowns have slowed the movement of iron ore shipments, while overall market demand faces great uncertainty due to the spread of Covid in China, he said.

Singapore futures fell 2.8% to $141.50 a tonne, after closing up 1.7% on Thursday at 11:56 a.m. local time. Dalian futures fell 1.6%. Steel rebar and hot rolled coil declined in Shanghai.

Bloomberg Businessweek’s Most Read

©2022 Bloomberg LP

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Global government bonds fall as traders brace for Fed rate hike https://purpleribbonproject.com/global-government-bonds-fall-as-traders-brace-for-fed-rate-hike/ Wed, 04 May 2022 07:33:04 +0000 https://purpleribbonproject.com/global-government-bonds-fall-as-traders-brace-for-fed-rate-hike/ Global government bonds tumbled on Wednesday, with debt markets from Australia to the euro zone seeing heavy selling, as traders braced for the US central bank to begin an aggressive round of interest rate hikes. ‘interest. Australia’s 10-year bond yield rose 0.18 percentage points to 3.57% in European morning trade, its highest level since 2014, […]]]>

Global government bonds tumbled on Wednesday, with debt markets from Australia to the euro zone seeing heavy selling, as traders braced for the US central bank to begin an aggressive round of interest rate hikes. ‘interest.

Australia’s 10-year bond yield rose 0.18 percentage points to 3.57% in European morning trade, its highest level since 2014, while the more sensitive two-year bond yield policy, also rose by 0.18 percentage points to 2.9%. according to Bloomberg data. The moves came after Australia’s central bank on Tuesday raised rates for the first time in more than a decade by 0.25 percentage points higher than expected.

The Reserve Bank of Australia kicked off a big week for central bank decisions, with the Federal Reserve set to announce its first rate hike of 0.5 percentage points since 2000 at the end of its two-day policy meeting on Wednesday. Futures markets are pricing in three more half-point hikes at central bank meetings in June, July and September as it prepares to tackle soaring inflation.

The yield on the 10-year Treasury note, a key economic benchmark that banks and investors use to price loans and price other financial assets, rose 0.01 percentage points to just under 3%. , remaining around its highest level since the end of 2018.

“We believe that the FOMC [Federal Open Market Committee]will deliver a well telegraphed 50bp [basis point] rate hike,” ING strategists said. “With a 75 basis point move . . . not completely off the mark but unlikely at this point.

Bond yields rise when their prices fall, with expectations of rising rates reducing the attractiveness of fixed-income payments relative to bank cash.

Government debt markets have come under pressure as central banks roll back pandemic-era policies that suppressed borrowing costs during the crisis.

In Europe, the yield on the 10-year German Bund – a benchmark for borrowing costs in the bloc, which started the year below zero – added 0.07 percentage point to 1.03% on Wednesday. Italian and Spanish debt sold off heavily, with the yield on Italian 10-year bonds jumping 0.08 percentage point on Wednesday morning to 2.93%, its highest since the market turmoil in early 2020.

The European Central Bank could implement the first eurozone rate hike since 2011 in July this year, central bank board member Isabel Schnabel said in an interview with German newspaper Handelsblatt.

“Looking ahead today, a July rate hike is possible in my view,” Schnabel said.

The annual pace of consumer price inflation in the United States hit 8.5% in March, as energy and food costs jumped in response to the invasion of Ukraine by the Russia, which led to sanctions against Russian oil and disrupted wheat and grain supplies. Eurozone inflation hit a record high of 7.5%.

Speaking to the Handelsblatt, Schnabel also said the ECB would be able to ‘end net purchases’ under the central bank’s program to purchase member state debt ‘by the end of June’. .

On Wednesday, in stock markets, the European regional Stoxx 600 index rose 0.1%. London’s FTSE 100 fell 0.1%.

Hong Kong’s Hang Seng index fell 1.2% as traders positioned themselves for tighter monetary policy in the United States, where a stronger dollar has created higher funding costs for emerging market companies who borrow in the reserve currency.

The dollar index, which measures the US currency against six others, traded at 103.5 points, close to a two-decade high.

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Opinion: I’m a financial advisor and I don’t recommend putting bitcoin in your 401(k) https://purpleribbonproject.com/opinion-im-a-financial-advisor-and-i-dont-recommend-putting-bitcoin-in-your-401k/ Mon, 02 May 2022 15:23:00 +0000 https://purpleribbonproject.com/opinion-im-a-financial-advisor-and-i-dont-recommend-putting-bitcoin-in-your-401k/ As a financial advisor, I was surprised to see that Fidelity Investments is going to give employers the option to add bitcoin to their 401(k) menus this year. This is a big deal, given that Fidelity is a leading retirement trustee and a dominant player in the investment market. While Fidelity’s decision renders some bitcoin […]]]>

As a financial advisor, I was surprised to see that Fidelity Investments is going to give employers the option to add bitcoin to their 401(k) menus this year. This is a big deal, given that Fidelity is a leading retirement trustee and a dominant player in the investment market.

While Fidelity’s decision renders some bitcoin BTCUSD details,
+0.62%
easier investments, I remain hesitant to recommend cryptocurrencies to my clients. Except, perhaps, for those with a strong appetite for risk, who are big fans of cryptocurrencies and who can otherwise afford to lose money.

Other than early adopters making money, I currently see no argument for buying bitcoin as an investment. That’s a terrible reason to invest in something.

There are no productive individuals, companies or governments behind it, no reason for it to be profitable, other than it being rare, as it is limited to 21 million coins. Scarcity is a reason many give for buying gold or silver – there is only a limited amount of it.

This is often the case for other products. For example, let’s buy wheat because we think there will be higher demand leading to higher prices. Gold, silver and commodity prices however are very volatile and there is no long term history of strong positive real returns for them, unlike stocks, bonds and oil. real estate. This is why we do not buy gold, silver or other commodities for our clients. We believe this is more short-term speculation than investment. (I know that commodities can be used as hedges for different industries, I wonder if someone without those interests should buy commodities to speculate, and I don’t think they should.)

Despite bitcoin proponents embracing the fact that it is a non-sovereign currency, this is still not beyond the scope or reach of governments. The US government has caught at least a few crooks in cases involving crypto.

I’m skeptical that most people will use crypto as common currency due to its speculative nature. Who is going to spend crypto on a Tuesday to buy lunch if it can be worth 5% more later in the afternoon? Although it is widely adopted and used as a currency, I would not recommend it because we do not invest in currencies, again because there is no history of positive real returns. We don’t buy dollars; we buy investments denominated in dollars.

Some see crypto as an inflation hedge, but it’s lost a lot more value than the dollar has in the last inflationary year and it’s not old enough to have a history of inflation hedging in the past. during previous inflationary periods.

Some of the other issues surrounding it are that you have to buy it outside of your traditional investment channels, think Coinbase Global, not Charles Schwab, and it’s not secure – even the Wolf of Wall Street s got his digital wallet hacked.

You may also encounter a major problem by simply forgetting your password. Who hasn’t forgotten a password? We’ve all heard the story of the programmer who lost around $220 million because he couldn’t access his account. He says he is at peace with it now.

The Super Bowl… and Ukraine

So I was already skeptical about crypto, then the Super Bowl ads blocked it for me. They seemed so reminiscent of tech ads like pets.com that aired during the Super Bowl just before the tech bubble burst. Tom Brady imploring you to step into the game left me wanting no part.

Then Ukraine arrived. As mentioned earlier, bitcoin can be used as a non-sovereign currency, and there seems to be a case for it. You can transfer bitcoins to other people all over the world without the costs or delays of transferring regular money, like dollars, and without the various governments getting in your way.

It was used to help the Ukrainian government and people, and they needed all the help they could get. Maybe this leads to more change, innovation and productivity than we can see now? Maybe other uses will appear or current uses will lead to more changes for the better? Perhaps totally unforeseen uses will become commonplace? I do not know; I cannot predict the future. Bitcoin seems like a big game changer – and I don’t think anyone knows exactly where it will lead.

Fidelity’s entry into this market and the ability for employers to offer it in their 401(k) will change this market. This will fix some of the known issues with bitcoin investing. If Fidelity is acting as the custodian of your 401(k), you don’t have to worry about having to buy it through a new channel or keep it safe – that’s Fidelity’s job now.

And if you forget your Fidelity password, that’s okay. Click on the “forgot password” link. It’s much easier to fix than forgetting your digital wallet password – where there’s no one in a call center to help you.

If you want to invest in bitcoin and can afford to take the risk, Fidelity has the door open for you.

Michael J. Garry is a Certified Financial Planner who runs Yardley Wealth Management in Yardley, Pennsylvania. He is the author of two books, “The Smart Person’s Guide to Financial Planning & Investments: A Simple and Straightforward Approach to Understanding Your Personal Finances” and “Independent Financial Planning: Your Ultimate Guide to Finding and Choosing the Right Financial Planner.”

Learn more about bitcoins

Bitcoin in your 401(k)? Fidelity just introduced it as an option – when it makes sense and when it doesn’t

A 401(k) is 20% crypto? The Labor Department will likely pressure Fidelity to lower that limit, an analyst said.

Charlie Munger says he doesn’t like bitcoin because it’s ‘dumb’, ‘evil’ and makes people look bad

Hackers and scammers are after your crypto and NFTs. Here’s how to keep your digital money safe.

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CDNS issues new bonds of Rs 950 billion by April 30 https://purpleribbonproject.com/cdns-issues-new-bonds-of-rs-950-billion-by-april-30/ Sun, 01 May 2022 00:52:28 +0000 https://purpleribbonproject.com/cdns-issues-new-bonds-of-rs-950-billion-by-april-30/ ISLAMABAD: The Central Board of National Savings (CDNS) announced on Saturday that it had achieved its target of issuing 950 billion rupees of new bonds in the last 10 months of the current financial year 2021-22 from July 1 to 30 april. The CDNS has set an annual gross revenue target of 980 billion rupees […]]]>

ISLAMABAD: The Central Board of National Savings (CDNS) announced on Saturday that it had achieved its target of issuing 950 billion rupees of new bonds in the last 10 months of the current financial year 2021-22 from July 1 to 30 april.

The CDNS has set an annual gross revenue target of 980 billion rupees from July 1 to June 30 of the previous financial year 2020-21 to promote savings in the country, a CDNS official has said.

He said the CDNS had set an annual collection target of Rs 250 billion from July 1 to June 30 for the year 2020-21, compared to Rs 352 billion for the previous year (2019-20) for the same. period in order to improve savings in the country.

The CDNS had set an annual collection target of 352 billion rupees for the year 2019-20, compared to 350 billion rupees for the previous year (2018-19), he said.

Responding to a query, the official said that CDNS has decided to launch Islamic finance and will start implementing its procedural work from next month to provide the facility of Islamic finance in the institution.

“In this regard, as part of Islamic Shariah compliance, award bonds and savings certificates will be issued for investment in accordance with Shariah principles.”

He informed that CDNS would provide Islamic investment opportunities to its consumers in an institution like the rest of the private and public banking sector, where Islamic Shariah business had now reached 20%.

The official said the savings has started working to increase new investment opportunities and promote digital investment through many new projects. “The CDNS, in collaboration with the State Bank of Pakistan (SBP), is developing digital price bonds, which will be available through online electronic channels.”

He said the CDNS was in the process of launching its first mobile application for online purchase and cashing out of National Savings Plans.

The official said the savings will adopt RAAST in the current month of January for rapid flow of funds through its financial tributaries. “CDNS initially opened three separate accounts in SBP to avoid/stop direct access to Non-Food Account-1 for its Alternate Delivery Channel (ADC) operations, 1Link Payment, UPI Payment, and RAAST Payment.”

He added that the Finance Division would allocate a budget cap on a daily basis and that the CDNS would operate within the allocated funds.

As a result, the GFP law of 2019 is adopted in its true spirit for alternative savings distribution channels. He informed that the CDNS interest rates are tied to the GDP policy set by the SBP, adding that the CDNS has opened up new avenues for public and private investment to document the country’s economy and ensure transparency of the economy. financial system.

Responding to another question on the current revision of the profit rates of the CDNS certificates, the official said that the CDNS had maintained the same interest rate on the investment of the savings certificates due to the market situation and in accordance to the political decision of Pakistan Investment Bonds (GDP).

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7 economical ways to spend your tax refund https://purpleribbonproject.com/7-economical-ways-to-spend-your-tax-refund/ Fri, 29 Apr 2022 09:00:06 +0000 https://purpleribbonproject.com/7-economical-ways-to-spend-your-tax-refund/ For millions of Americans, the biggest incentive to complete their tax returns every spring is the prospect of getting a large sum of money at the end of the process. Averaging $3,100 this year, the tax refund is an important source of income for many households, bigger than any paycheck for most people. According to […]]]>

For millions of Americans, the biggest incentive to complete their tax returns every spring is the prospect of getting a large sum of money at the end of the process.

Averaging $3,100 this year, the tax refund is an important source of income for many households, bigger than any paycheck for most people. According to financial advisors, a lump sum can be an opportunity to achieve financial goals, such as paying off debt, creating an emergency fund, or even saving for a down payment.

Here’s what personal finance professionals are saying about spending that money wisely.

Consider your financial needs first

Before spending this refund, briefly assess your personal situation to determine what is most urgent.

“The #1 question people should be asking is what do they absolutely need to finance right now,” said Max Pashman, a California-based Certified Financial Planner. “The problem I often see is that people get a lump sum and try to figure it out later. The end result is a shopping spree or a purchase they might regret later.”

When assessing your financial needs, think about what is urgent. Have you deferred bill payments? Is credit card debt messing up your budget? Or maybe you’ve been waiting for a major purchase like an appliance or professional certification.

Usually, experts advise a combination of paying off debt and investing your repayment.

“If a problem is preventing you from achieving your goals, this is a great opportunity to attack it,” Pashman said.


How to avoid being overburdened when filing your taxes

06:48

1. Pay off your credit cards

Once necessities such as housing, transportation, utilities, and food have been paid for, debt repayment should be the next priority. Try eliminating high-interest debt first, like credit cards or personal loans, say financial planners.

“If you keep a balance from month to month, this should be one of your top priorities for spending extra money on it – it would be hard to beat that ROI!” financial adviser Sam Lewis, founder of SJL Financial, said in an email.

The average APR on a credit card today is between 19% and 20%, which means that paying off a balance will instantly give you a proportional return.

Maggie Klokkenga, a certified financial planner specializing in debt reduction, advises her clients to try to eliminate just one debt rather than tackling them all at once.

“A lot of people have multiple credit cards. If there’s a balance that you might just be able to pay off or pay off a hefty amount, that’s a huge mental win. It really gives them that impetus to say, ‘Look. what I just did – I can do more,” she said.

2. Pay off other debts

If you’re trying to tackle multiple debts with your repayment, focus on those that are affecting your credit score, such as an overdue credit card, auto loans or utility bills, Klokkenga advised.

Medical debt, while a burden for many Americans, will soon no longer affect your credit score, she noted. So while people with healthcare-related debt should try to arrange a payment plan with the provider, “medical debt is usually at the bottom of the pile,” she said.

3. Build up a financial cushion

After paying off expensive debt, consider seeing if you have enough money to deal with unpleasant financial surprises, such as job loss or a car accident.

Polls show that most Americans lack any sort of rainy day fun. More than half the country would not be able to cover a $1,000 emergency, Bankrate found in January.

A tax refund can be a great way to jump-start that emergency fund, which can keep you from getting into debt later.

“When you’re faced with unexpected emergencies, you don’t want to rely on high-interest credit cards, interrupt growing investments, or plunder your tax-protected retirement accounts to douse the fire,” he said. John Pak, a certified financial planner based in Los Angeles. .


How to start or restart saving for retirement, what type of account might be best

04:42

4. Prepay your pension or insurance

If your debt and bank accounts are in good shape, see if you can use your repayment for your retirement, said William Nunn, a CFP based in New Orleans.

“It puts your money to work for the rest of the year right now, instead of having to wait every payday,” Nunn said.

Making a lump sum contribution is easy to do with an IRA or a Roth IRA. Be sure to stick to the limits — this year, workers under 50 can contribute up to $6,000.

For workers with employer-based accountsLike a 401(k) plan, there’s always room to increase contributions sooner, Nunn said. Most plans will give you the option to adjust the portion of your salary that you put into your plan. Push that number higher by any amount equal to your tax refund.

If you have life or home insurance, paying a year’s worth of premiums up front could save you money. Most policies charge policyholders for spreading premium payments, which is about 6% more per year, according to Nunn.

5. Pay off your car loan

Car owners with high monthly payments but a low balance on the loan used to finance the vehicle should consider using their repayment to pay it off faster, Nunn said.

“It’s not going to calculate a new payment…but you’ll be done with the loan faster,” he said.

For example, if you have a monthly payment of $500 and you owe $10,000 on your car, paying the full $3,500 repayment toward the balance would reduce the equivalent of nine months of the term of the loan.

“If you know it’s a car you’re going to keep for a while, it might be worth it, especially since it puts $500 a month in your pocket to do other things,” said he declared.


Sticker clash continues for US car buyers

07:52

6. Invest in stocks

“If the fundamentals of your financial life are in order – that is, you have an adequate emergency fund, little to no consumer debt, actively saving in a 401(k) or other retirement plan – so consider investing in a taxable brokerage account,” Jason Dell’Acqua, president of Crest Wealth Advisors, told CBS MoneyWatch. “If you have a long-term investment horizon, then recent market declines may work to your advantage.”

In fact, investing your refund can help protect you against inflation, which is over 8% this year.

“With inflation hitting 40-year highs, there’s a very high probability that most of us will lose purchasing power by keeping money in a bank account,” Pak said.

“[B]Given today’s volatile stock and bond markets, investing seems daunting. However, to hold or beat inflation, equities have always been the proven vehicle of choice,” he added.

7. Buy I-bonds

Soaring inflation is making a somewhat obscure investment vehicle much more popular. Several financial professionals have recommended that taxpayers look into Series I bonds, which are US government bonds whose rate of return is indexed to inflation.

“Savings Bonds I adjust for inflation and the new May series annualizes a 9.6% return, which is higher than most stock returns,” noted Jay Lee, a CFP based in New Jersey.

It is simple to buy bonds directly from the US Treasury. Generally, investors are limited to purchasing $10,000 of I bonds electronically in any given year. However, if you direct your tax refund to I bonds, you can buy an additional $5,000 in paper bonds, Pak noted.

“The window to buy paper bonds is slim. You will need to complete IRS Form 8888 when you file your taxes,” he said. “If you can hold it for five years there is no penalty, but if you hold it for less than five years you lose the interest for the previous three months.”

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Delayed amid pandemic, Kentucky reimbursement now depends on rates https://purpleribbonproject.com/delayed-amid-pandemic-kentucky-reimbursement-now-depends-on-rates/ Wed, 27 Apr 2022 17:58:00 +0000 https://purpleribbonproject.com/delayed-amid-pandemic-kentucky-reimbursement-now-depends-on-rates/ The Kentucky Public Transportation Infrastructure Authority approved the sale of up to $443.8 million in tax-exempt bonds to repay a loan taken out in 2013 under the Transportation Infrastructure Finance and Innovation Act. Delayed during the COVID-19 pandemic, repayment now depends on savings that can be made in a rising interest rate environment. In 2018, […]]]>

The Kentucky Public Transportation Infrastructure Authority approved the sale of up to $443.8 million in tax-exempt bonds to repay a loan taken out in 2013 under the Transportation Infrastructure Finance and Innovation Act.

Delayed during the COVID-19 pandemic, repayment now depends on savings that can be made in a rising interest rate environment.

In 2018, the KPTIA began looking for opportunities to repay the US Department of Transportation’s TIFIA loan, which has an interest rate of 3.88%. In 2019, it began the process of issuing tax-free redemption bonds, according to a presentation by KPTIA’s financial adviser, Public Financial Management.

The Abraham Lincoln Bridge, right, opened in 2015 with bond financing from the Kentucky Public Transportation Infrastructure Authority.

Bloomberg News

The sale, along with a takeover bid, would also have paid off debt from the 2013 sale of $727.9 million of first-level toll revenue bonds for the Downtown Crossing project.

Kentucky and Indiana have worked together to develop a cross-border mobility project between Louisville and Clark County, Indiana. Completion of the bridge and toll, which began on December 30, 2016, was the largest public infrastructure project ever undertaken by the Commonwealth and was completed on time and under budget.

Highlights of the Louisville-South Indiana Ohio River Bridges Project are the two new bridges, the Abraham Lincoln Bridge in downtown Louisville and the Lewis and Clark Bridge eight miles upstream on the Ohio.

The Downtown Crossing project was a critical part of the plan and included the acquisition, financing, and construction of the Lincoln Bridge over the Ohio River from downtown Louisville to Jefferson, Indiana, as well as the reconstruction and reconfiguration of the nearby Kennedy Bridge. . He also upgraded the Kennedy Interchange and reconfigured the approaches to the bridge on the Indiana side.

Last September, the authority planned to issue $191.8 million of Series 2021 fixed-rate first-tier taxable redemption bonds amid speculation that some changes to the TIFIA program would allow for a rate rest. ready. A taxable sale in addition to the loan reset was seen as a source of greater savings. Ultimately, it was determined that a rest loan was not eligible to be enacted.

However, an exchange of bids for some of the bonds issued has been made in 2021, PFM chief executive David Miller told the KPTIA board on Monday when he approved the bond issue.

He said some of the existing bondholders offered their 2013 bonds in exchange for new tax-free bonds; for bonds that were not offered or exchanged, KPTI sold a taxable issue with prepayment.

“The total bond amount in total was approximately $185 million and that was in two series, 2021A and 2021B,” Miller said. “We achieved net present value savings of $58.5 million…the amount of present value savings as a percentage of the nominal amount repaid of the bonds…in our case was 32% – and that’s a little off the charts. graphics. We’ve really realized a lot of benefit and that benefit goes to the project in terms of improved cash flow to pay for capital improvements, potentially including the replacement of the Kennedy Bridge in the future.

On Monday, KPTIA cleared PFM to proceed with a tax-exempt sale, the exact timing of which will be determined at the discretion of the financial advisor and bond advisor when market conditions appear appropriate.

PFM said it was considering taking out bond insurance to secure a higher credit rating and lower interest rate on the deal.

Last year, before the taxable refund, Moody’s Investors Service raised KPTIA’s underlying rating to Baa2 from Baa3 and Fitch Ratings raised its underlying authority rating to BBB from BBB-minus. Fitch also raised its outlook to positive; Moody’s assigned a stable outlook. The bonds were insured by Assured Guaranty Municipal Corp.

The objective of the upcoming agreement is to achieve savings of at least 1% of the total principal amount of the loan amount repaid. The TIFIA loan has a current balance of $443.8 million.

Although this target is lower than the typical KPTIA target, reimbursement may provide additional benefits by eliminating any possible revenue sharing with TIFIA and reducing reporting requirements.

“At the start of this year, we were estimating quite a bit of savings using this strategy, $43 million, or almost 10% of par paid off,” said Roger Peterman, managing partner at law firm Dinsmore & Shohl LLC. . “But I’m sure you know the market has changed a lot in the last two months – it’s up over 100 basis points.

“So although we have started to take the initial steps to make a repayment, at this stage we would not be executing a repayment because we would not have the levels of savings that we think are adequate,” he said. he declares.

Still, he noted that the authority’s vote to approve a refund now gives him the flexibility to act quickly if market conditions turn more favourable.

Kentucky is experiencing an economic recovery as the pandemic fades from the public eye.

Governor Andy Beshear last week said the $22 billion budget for fiscal year 2022-2024 passed by the General Assembly builds on the economic momentum the state is experiencing.

He said he was making substantial new investments in infrastructure, such as high-speed internet, cleaner water, and roads and bridges, while making it easier for businesses to locate in the state.

“These are the areas we must invest in today to help the Commonwealth become a national leader in turning two years of incredible progress into 20 years of prosperity for Kentucky families,” Beshear said in a statement. “With these dollars, we will make major investments in critical infrastructure needed to build a better Kentucky and create and attract the jobs of the future.”

The governor’s budget proposal was based on a record revenue surplus, with the General Fund seeing $1.9 billion more than expected.

The state will receive an additional $100 million from the federal infrastructure bill and spend more than $2.3 million in public funds over two years to support broadband internet expansion and create an Office for Broadband .

Last year, the Kentucky Broadband Deployment Fund was created with $300 million in public funds to address the connectivity needs of unserved and underserved communities. Combined with at least 50% of required matching federal investments, a minimum of $600 million will support broadband expansion in Kentucky, the governor said, creating more than 10,000 direct and indirect jobs.

For transportation, the budget provides $250 million from the general fund for major transportation infrastructure projects. Three projects were specifically targeted – the Brent Spence Supplemental Bridge Project, the I-69 Ohio River Crossing at Henderson, and the completion of the Mountain Parkway Expansion Project.

Beshear said these one-time funds are intended to provide flexibility to meet state matching requirements for expected federal grants.

The governor said that with all businesses moving to Kentucky, continued efforts to improve the state’s infrastructure were imperative.

Additionally, the budget expands efforts to improve water and sewer systems and includes $250 million to support the Better Kentucky Plan’s cleaner water program.

Kentucky’s seasonally adjusted preliminary unemployment rate in February was 4.2%, the Kentucky Center for Statistics reported late last month.

February’s preliminary unemployment rate was down 0.2 percentage points from the 4.4% recorded in January and 0.5 percentage points from the 4.7% recorded over the same period. a year ago.

The seasonally adjusted U.S. unemployment rate for February was 3.8%, down from 4% in January, according to the U.S. Department of Labor.

The State of Kentucky is rated Aa3 by Moody’s Investors Service, A by S&P Global Ratings, and AA-minus by Fitch Ratings and Kroll Bond Rating Agency. S&P has a positive outlook on government while the other three agencies assign a stable outlook on credit.

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