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Tuesday, March 31, 2015

Newsletter: Managing the costs of education

Monday, March 30, 2015

Financial news: March 30, 2015

OQ: Eventually, oil prices will rise as exporters gain the upper hand
MW: Tax preparation services only require an application & fee for a PTIN
NYT: Less expensive & younger employees are employers first choice
ZH: Remedying next recession to be difficult due to overuse of stimulus
NYT: Republican Senators agree income inequality is a problem
BI: Young talent is cheaper for Wall St. than more expensive veteran bankers
Bloomberg:  Financial market data indicates a Greek default is 72% likely to occur
BBC: The Greek government prefers to default on the Troika than its own people
AP: U.S. officials say the Asian Infrastructure Investment Bank is a transparency risk
Reuters: The Chinese government seeks GDP growth around 7% in 2015

Friday, March 27, 2015

Interest rates and their history

Interest rates differ between countries, but are used by central banks to impact economic activity. When employment and inflation are high, raising interest rates helps limit the supply of money and acts as a brake to control overheated economic growth. This helps reduce the risk of financial cataclysm or excessive asset valuations and speculation. 

To the contrary, when economic activity is slow, monetary policy often lowers interest rates for the purpose of stimulating lending and economic activity. By making money cheap, the incentive to borrow rises or the disincentive is reduced. Low rates also encourage lending activity in specific economic sectors such as the real estate industry. 

The infographic below details international developments in interest rates over time:
History of interest rates infographic link

Financial News: March 27, 2015

Reuters: Apple Inc. CEO to donate $785 million of personal wealth to charity
ZH: U.S. median home prices rose 17.3% between 2012-2014
NYT: Payday loans are the third largest cause of bankruptcy
Bloomberg: Freight train oil logistics negatively impacted by oil prices
CNN: Middle-class college entrants in '04 had a graduation rate of 40% by '12 
AP: Slow pace of oil extraction needs early start for energy independence
BI: Large smartphones are the reason for flat iPad sales
CNBC: Brazil's economy shrunk by .1% in 2014
BBC: France's deficit for 2014 was 4%, .4% below forecast
MW: Japan's inflation rate fell to 0% in February