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| | | | | | | | Notices | PLEASE HELP US TO KEEP THIS SITE RUNNING Every pound donated to this site helps us to keep on helping others. Click Here to Donate | PayDay loans An essential way of making ends meet? - or just another expensive way climbing onto the spiral of debt?
The British Cheque Cashers Association says that it receives very few complaints from borrowers. | 
3rd July 2009, 16:21
|
#10905 (permalink)
| | Royalties Account Holder |  Re: The great interest rate rip off
http://www.nytimes.com/2009/07/03/bu...1&ref=business Quote: As the United States takes its first steps toward mandating that power companies generate more electricity from renewable sources, China already has a similar requirement and is investing billions to remake itself into a green energy superpower.
Through a combination of carrots and sticks, Beijing is starting to change how this country generates energy. Although coal remains the biggest energy source and is almost certain to stay that way, the rise of renewable energy, especially wind power, is helping to slow China’s steep growth in emissions of global warming gases.
While the House of Representatives approved a requirement last week that American utilities generate more of their power from renewable sources of energy, and the Senate will consider similar proposals over the summer, China imposed such a requirement almost two years ago.
This year China is on track to pass the United States as the world’s largest market for wind turbines — after doubling wind power capacity in each of the last four years. State-owned power companies are competing to see which can build solar plants fastest, though these projects are much smaller than the wind projects. And other green energy projects, like burning farm waste to generate electricity, are sprouting up.
This oasis town deep in the Gobi Desert along the famed Silk Road and the surrounding wilderness of beige sand dunes and vast gravel wastelands has become a center of China’s drive to lead the world in wind and solar energy.
A series of projects is under construction on the nearly lifeless plateau to the southeast of Dunhuang, including one of six immense wind power projects now being built around China, each with the capacity of more than 16 large coal-fired power plants.
Each of the six projects “totally dwarfs anything else, anywhere else in the world,” said Steve Sawyer, the secretary general of the Global Wind Energy Council, an industry group in Brussels.
Some top Chinese regulators even worry that Beijing’s mandates are pushing companies too far too fast. The companies may be deliberately underbidding for the right to build new projects and then planning to go back to the government later and demand compensation once the projects lose money.
“The problem is we have so many stupid enterprises,” said Li Junfeng, who is the deputy director general for energy research at China’s top economic planning agency and the secretary general of the government-run Renewable Energy Industries Association.
HSBC predicts that China will invest more money in renewable energy and nuclear power between now and 2020 than in coal-fired and oil-fired electricity.
That does not mean that China will become a green giant overnight. For one thing, Chinese power consumption is expected to rise steadily over the next decade as 720 million rural Chinese begin acquiring the air-conditioners and other power-hungry amenities already common among China’s 606 million city dwellers.
As recently as the start of last year, the Chinese government’s target was to have 5,000 megawatts of wind power installed by the end of next year, or the equivalent of eight big coal-fired power plants, a tiny proportion of China’s energy usage and a pittance at a time when China was building close to two coal-fired plants a week.
But in March of last year, as power companies began accelerating construction of wind turbines, the government issued a forecast that 10,000 megawatts would actually be installed by the end of next year. And now, just 15 months later, with construction of coal-fired plants having slowed to one a week and still falling, it appears that China will have 30,000 megawatts of wind energy by the end of next year — which was previously the target for 2020, Mr. Li said.
A big impetus was the government’s requirement, issued in September 2007, that large power companies generate at least 3 percent of their electricity by the end of 2010 from renewable sources. The calculation excludes hydroelectric power, which already accounts for 21 percent of Chinese power, and nuclear power, which accounts for 1.1 percent.
Chinese companies must generate 8 percent of their power from renewable sources other than hydroelectric by the end of 2020.
The House bill in the United States resembles China’s approach in imposing a renewable energy standard on large electricity providers. But the details make it hard to compare standards. The House bill requires large electricity providers in the United States to derive at least 15 percent of their energy by 2020 from a combination of energy savings and renewable energy — including hydroelectric dams built since 1992.
Chinese power companies are eager to invest in renewable energy not just because of the government’s mandates, but because they are flush with cash and state-owned banks are eager to lend them more money. And there are few regulatory hurdles. | More at the link
If China is doing this it's showing more wisdom than us in energy consumption, if they can deliver this is a good investment for the long term.
Meanwhile we continue to rely on oil and coal. | 
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3rd July 2009, 16:34
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#10906 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
FT.com / Companies / Banks - US bank buy-outs get tougher Quote: Private equity that want to buy troubled banks would have to maintain significant capital levels and promise not to “flip’’ investments for at least three years under proposals by US regulators seeking to attract money into the ailing industry.
The proposed rules, which would require private equity companies to maintain a tier one capital ratio of at least 15 per cent – three times what is typically required of other banks – for at least three years, were introduced on Thursday in spite of disagreements among regulators over whether the requirements were too strict.
First reported by the Financial Times, the proposed rules to facilitate private equity acquisitions of failing banks come amid a growing effort by regulators to unlock tens of billions of dollars that could be deployed to recapitalise ailing lenders. Authorities have traditionally preferred selling troubled financial groups to other banks because of concerns over conflicts of interest created by buy-out funds’ ownership of banks.
But buy-out executives say private equity companies are among the few remaining sources of capital for troubled lenders.
Sheila Bair, chairman of the Federal Deposit Insurance Corporation, acknowledged that the requirement to hold tier one capital such as shares and liquid securities equal to 15 per cent of a bank’s total assets, was “high’’. “Obviously, we want to maximise investor interest in failed bank resolutions. On the other hand, we don’t want to see these institutions coming back,’’ she said.
John Dugan, the Comptroller of the Currency, expressed concern that the proposal contained standards that “go too far’’. Some regulators suggested some elements might have to be scaled back. The private equity industry is likely to press for change to some of the proposed rules. Thursday’s guidance “would deter future private investments’’ in banks that need fresh capital, said Douglas Lowenstein, president of the Private Equity Council.
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4th July 2009, 09:05
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#10907 (permalink)
| | Royalties Account Holder
Where else can you earn 8% interest on your money?
Start your County Court claim NOW!!!
Cagger since
: May 2007
Posts: 14,617
| Re: The great interest rate rip off
BBC NEWS | Business | Bankruptcy in over-65s 'triples' Quote: The number of people over 65 filing for bankruptcy has almost tripled over the past five years, research based on Insolvency Service figures suggests.
Some 2,595 people aged over 65 went bankrupt in England and Wales in 2008 compared with 983 in 2004 - a rise of 164%, accountants Wilkins Kennedy said.
In the same period, the total number of bankruptcies rose 89% to 67,500.
The firm said more people were entering retirement with unpaid debts and also blamed rising food and energy prices.
It said pensioners tended to spend a higher proportion of their income on essentials such as food and energy than the wider population.
Wilkins Kennedy director Anthony Cork said: "While the number of personal insolvencies has been climbing relentlessly, the finances of those aged over 65 are deteriorating much faster.
"The property boom saw many people remortgaging their houses to withdraw cash, which has resulted in a growing number of pensioners being left with substantial mortgages.
"Pensioners may have outstanding credit card debts which were taken on during the credit boom, so they find themselves unable to meet repayments when their incomes shrink back on retirement."
And Brendan Paddy for Age Concern and Help the Aged agreed older people had been hard hit by rising prices and falling incomes.
"The second thing is, since towards the end of 2008 we've seen interest rates go off a cliff and they're staying down. And so the income from savings that pensioners often rely on just aren't there any more," he added.
The overall number of personal bankruptcies in England and Wales increased from 35,700 to 67,500 over the five-year period.
| I'm sort of cash I know I'll take on a huge debt I can't pay back. Genius financial planning.
Selling the house and downsizing too difficult?
Once more house prices prove peoples undoing. | |
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4th July 2009, 09:13
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#10908 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
IndiaDaily - US Job report confirms depression and bear market Quote: Employers cut a larger-than-expected 467,000 workers, driving the unemployment rate up to a 26-year high of 9.5 percent. The job report worldiwde is also very weak.
The secular bear market in US intact and gaining intensity. The next wave down has already started and is ready to take Dow below 4,000 level within next twelve months.
The stimulus money is getting used in sectors where very little impact is felt on the economy.
The biggest problem is still the severe depression in US home market. 60% of non-prime mortgages are about to enter the default zones. There will be no one to bid in the foreclosure markets.
People will not be able to pay the real estate taxes leave alone the hefty mortgages. | HoweStreet.com - The Source for Market Opinions Quote: Buy Stocks!...at Dow 4,000
By Bill Bonner
“Less bad” is not good.
"Things seem a lot better now than they did back in October," said a friend the other day. "I think we really hit bottom towards the end of last year."
Our friend's view is probably the dominant one. Things are looking up. Not that the news is good...but it just seems "less bad" than it was...or even less bad than was expected.
Foreclosure filings are at a record high. But "Most Homeowners Think Bottom Reached," said a news item on the internet. "Bank Crisis in US Could Last to 2013," adds a headline from Reuters. Yet, most people think the banks are on the mend. They think the financial sector will come back...maybe slowly, but more or less steadily and satisfactorily.
The average bear market bounce in the stock market lasts only two months. By that measure the current rebound should be over already. Stocks have recovered 30% to 40% - all over the world. But this rebound doesn't seem to be ending. Why?
Well, it might last longer than most because the feds are fighting this downturn far more than they usually do. So, it wouldn't be totally surprising if the rebound were robust. But if it's what we think it is - a bear market bounce, not a genuine new bull market - the government's support is pernicious. It helps disguise what it really going on...and draws even more investors into the trap. And the longer it goes on, the more investors will come to believe that this bull market is for real. As it continues, they'll commit more and more of their money to it...
How far could it go? Who knows? But it wouldn't be extraordinary if it took the Dow back to 10,000. And it would not be unusual at all if people stopped talking about the 'green shoots' and began noticing entire fields of clover.
So, let's take a minute to try to remember why we think this is only a bear market trap...
The problem is debt. It built up over a quarter of a century to levels that even President Obama says are "unsustainable." People have too much debt - student debt, credit card debt, private equity debt, mortgage debt, and every other kind of debt you can imagine. As long as the economy is expanding...and the credit markets are offering more debt...the problem is not critical. One debt is paid by taking on another, greater, debt. Houses are refinanced, for example, at higher prices...but lower interest rates.
Then, the cycle turns. Instead of continuing to expand, credit begins to contract. When people go to refinance, they discover that their collateral is worth less than it was before, real interest rates are higher, and the lenders don't want to lend any money anyway.
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4th July 2009, 09:17
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#10909 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
Why the Dow Is Headed to 6000 -- Seeking Alpha Quote:
The global capital-market rally since the March lows was a great trading opportunity, but the rally may have been based on shifting-sentiment (as opposed to structural improvements in the economy). The market was “pricing in” (or hoping for) a quick recovery; even though there was no evidence to suggest clear-&-compelling improvement in GDP, employment, deleveraging consumers, or corporate earnings.
- Yes, the government was able to stop Financial Armageddon; but that’s not the same thing as an improving economy.
- Yes, the US economy is resilient and will recover and prosper in the long-run. But “In the long-run, we’re all dead”, to quote the Nobel Prize winning economist Keynes.
Like the cartoon character that has run off the ledge of the mountain but has not yet noticed the fact that he’s running on thin-air, once equity investors look down it may get ugly.
Neither Borrower, Nor Lender Be
Whether you’re a bull or a bear, we can all agree on the following fundamental-facts:
- Deleveraging Consumers and Businesses. Everyone (except for the government) is tightening their belt and reducing their consumption. Government alone cannot carry the economic load forever, and if consumers (or businesses) don’t quickly step in we may face a double-dip recession. The $64,000 question is: How does the private sector look (or what’s left of it)?
- Unemployment Is Above 9% and Climbing. Unemployment is a lagging-indicator, and historically continues to get worse even if the economy picks up. This bit of bad news is not going to get better anytime soon, even if you think the economy is recovering now!
- Depressed Wages. Many corporations take advantage of high unemployment levels to keep wages down for their existing employees. This makes sense for the firms (the weaker economy justifies lower wage growth) but it has the unintended consequence of reducing the purchasing power of those already employed.
- Demographic Disaster. If consumers are the engine of the US economy, then Baby-Boomers are the turbo-charger; since they make up such a large demographic. But Baby-Boomers are nearing retirement and even if the economy picks up this year they have a lot of saving to do in order to repair the massive damage to their wealth. In short, deleveraging consumers & businesses, unemployment, depressed wages, and fortifying baby-boomers cast doubt on the bulls believe the economy is going to rebound…at least not by the consumer.
- Catch 22. Corporations cannot lead a recovery until banks are healthy. But banks cannot repair their balance sheets until they can lend to consumers that are both financially sound (which they are not), and willing to borrow (which they do not). But if things continue as the current rate (or “improve” only slightly) then banks cannot rebuild their balance sheets because for every item a bank recapitalizes, it faces another default somewhere else (foreclosure, credit cards, etc).
- Government Tapped Out. The resources and credit-worthiness of the US government are almost unlimited. Almost. But there’s only so much the government can borrow before it too must tap-out. Furthermore, if the borrowing becomes too excessive, then the medicine will become worse than the disease. Too much borrow may eventually crowd out private sector borrowing, increase borrowing costs, place a huge burden on taxpayers which reduces future consumption and economic activity, etc.
- Global Economic Decline. The US cannot export itself out of this problem, because the rest of the world is in the same position (if not a lot worse). The BRICs (or any other emerging market) grow largely due to exports and not organic domestic-growth. The OECD nations are all sickly, one worse than the other. Unfortunately, bad economic news has come “not as spies, but as battalions”.
Fear, Greed, & Beauty-Contests
So where is the DOW headed, as we enter Q2 earnings season? In the end, Q2 earnings will not matter. Nor will the mountain of forecasts dissecting it. What matters is how the market responds to Q2 earnings. As a trader, I agree with the Keynesian “beauty contest” rule: to determine winners of a beauty contest look to and anticipate the judge’s decision and don’t bother deciding who you think will win because you think they’re “pretty”. In short, what the market thinks matters, even if you think the market is “wrong”.
The rally off the March lows was based on shifting-sentiment. Fear of losing out on the rally, greed to jump in and make profits, and “pricing in” (or hoping for) a quick recovery. What the market thinks matters, even if you think the market is “wrong”. But the market is also self-correcting…like the cartoon character that has run off the ledge of the mountain, once it realizes its predicament, it will eventually come crashing down (or, “mark to market”).
| More at the link. | |
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4th July 2009, 09:19
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#10910 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
Stay Out of the Water Quote:
3 July 2009
Big news yesterday:
“Jobs report dashes hopes on recovery,” says the International Herald Tribune this morning.
Oh?
Yes, dear reader... once again, we’re right and they’re wrong!
You’ll recall from yesterday, the feds said that their monster stimulus program would hold unemployment below 8% in 2009. The year’s not half over and the rate is already 9.5%.
Then, they said the numbers were getting better each month – inevitably leading to a recovery by the end of the year. They predicted a loss of 365,000 jobs in June – considerably fewer than in May. Instead, the figures – even after they had beaten them up – said 467,000 jobs had gone, which was considerably more than May’s figure. The important thing is that the trend economists thought they were watching – which led to a recovery – has been broken. Instead of fewer job losses, we have more.
Ha ha... we laugh at them. We mock them. We turn up our noses to show our contempt. We turn our backs and point to our... oh, never mind...
But wait a minute. What are we saying? Hold the self-satisfied congratulations, please. As Yu Faz put it: ‘Bury pride; or it will bury you.’
Yes, we were right: there ain’t no green shoots. But we’re not vain and stupid enough to think we know what is actually going on. Only morons think they know what is going on. And the more sure they are – the bigger dopes they are.
Where, exactly, is this economy headed? How is it going to get there? When?
Damned if we know. (And damned if we don’t!)
Okay... now... shush... now that we’ve thrown the jealous gods off our case... we whisper to you: well, we actually DO have an idea of where this economy is going, which we will reveal to you, dear reader, in hushed tones, little by little.
For starters, you have to realize: this is a depression. It is not a recession. In a recession, an economy gets a cold and has to take a little bed-rest. In a depression, an economy drops dead. Businesses go broke. The whole structure of the economy changes as the corpses are dragged away and new enterprises take their places.
Economists were 100,000 off on their jobless predictions because they still don’t really understand what is going on. We knew the predictions of a recovery were dumb. This is a depression – meaning, it is a major change of direction... not merely a pause in an otherwise healthy economy. After more than half a century of debt expansion, debt is contracting. Businesses, households, investors and the government need to adjust. And that takes time – a lot more than the 20 months of recession we’ve had so far.
It would happen a lot faster of course, if the feds weren’t fighting it every step of the way.
“Rise of the Zombies,” is a headline in today’s Financial Times. It tells a familiar and predictable story: the feds have propped up businesses coast to coast. Instead of being allowed to fail, they are kept alive by the government... and continue to take resources that could be redirected to more promising competitors.
But don’t bother telling the feds that. They don’t care. The old, worn out Zombie businesses still make campaign contributions and employ voters. The businesses of tomorrow don’t. The present votes. The future does not.
| Continues at the link. | |
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4th July 2009, 09:40
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#10912 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
The Queen's £1,375 council tax bill (that's £400 cheaper than her neighbours in the next borough) | Mail Online Quote:
The Queen pays less council tax to live in Buckingham Palace than a family in a suburban semi, the Mail can reveal.
The Queen pays the tax on the most prestigious address in the country to Westminster City Council, which has the second lowest rates in the country.
That means the annual bill for herself and Prince Philip is £1,375.24 a year - £400 cheaper than the average bill for families living neighbouring boroughs.
In accounts published this week it was revealed that the Queen had been forced to raid her savings to shore up her crumbling palaces.
So she can take some comfort from the fact that her council tax, at least, is not going to cost her the Crown Jewels. The council tax system relies on property valuations conducted by the Valuation Office Agency 18 years ago - when the housing market was clearly very different to that today.
There are eight bands - starting at A for properties of lowest value, going up to H - with the bill set accordingly.
The charge for each band is set by the local authority, which accounts for the widespread variation in charges.
According to its 1991 valuation, Buckingham Palace was given the most expensive rating, Band H, which covers all properties valued at £320,000 or more.
Yet, because Westminster City Council has some of the cheapest council tax bills in the country, the Queen's annual bill for the palace - which has 775 rooms in all, including 52 Royal and guest bedrooms, 188 staff bedrooms, 92 offices, 19 state rooms and 78 bathrooms - is less than for a four-bedroom semi in neighbouring Lambeth. | I feel so much better after reading this.
The whole council tax system is one massive con, my own council tax bill is only a few hundred pound cheaper than this if only I had somewhere near the income of the Queen. | |
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4th July 2009, 19:14
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#10913 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
Treasury announces 'bonfire of quangos' to save taxpayer millions - Times Online Quote:
The Treasury has called for a crackdown on quangos, which are costing taxpayers billions each year. Analysis by The Times of 33 quangos shows that direct government spending on them jumped by more than £1 billion, from £16.1 billion to £17.2 billion, between 2006-07 and 2007-08.
The survey also shows that more than 100 board members or executives were paid at least £100,000 last year, with five earning more than £300,000. Despite government claims that the number of quangos is falling, at least 40 new bodies have been created since Gordon Brown took over as Prime Minister in June 2007. The Treasury has admitted that 160 of the biggest quangos, set up at arm’s length from Whitehall departments, cost the taxpayer £34 billion last year. Spending increases on these unelected bodies has far outstripped those on Whitehall departments — up 3 per cent last year — and main political parties are turning their focus on quangos as they search for big cuts in public spending.
Liam Byrne, the Chief Secretary to the Treasury, has written to Whitehall departments demanding an urgent review of all quangos to assess which can be abolished, merged with other bodies or taken back directly into their ministries. A number of quangos appear to have overlapping remits, including some covering skills, law and order, environment and transport. “The Ministry of Justice alone has 200 quangos,” said a Treasury spokesman.
Those likely to be scrutinised first include some of the biggest bodies, such as the Higher Education Funding Council for England, the Environment Agency and the Health and Safety Executive. The outcome, aimed at shaving billions from total spending on quangos of about £64 billion, will feed into the next public spending review, although interim results are expected in the Pre-Budget Report this autumn.
| Don't it will happen as a lot of these quangos are full of Labour cronies.
However it needs to happen. | |
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4th July 2009, 19:14
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#10914 (permalink)
| | Royalties Account Holder
Your bank owes you an awful lot more money than you realise See here
Cagger since
: May 2007
Posts: 14,617
| Re: The great interest rate rip off
China's BAIC joins fight for Vauxhall parent GM Europe
Formal offer from Chinese takes on Ripplewood and Russian-backed Magna Stephen Foley: Put Goldman on a diet of humble pie US Outlook: Perhaps you have heard by now that Goldman Sachs is "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". Return of the bonus
The Chancellor wants bankers to 'get real' over bonuses, but are payouts in the City getting out of hand again, or are executives like Stephen Hester just easy targets? Nick Clark reports | |
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4th July 2009, 19:15
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#10915 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
Labour's tax rise to pay for care homes - UK Politics, UK - The Independent Quote:
Labour is considering a plan to raise National Insurance contributions to fund a guaranteed minimum level of care for the elderly, The Independent has learnt.
The aim would be to end the current "postcode lottery" over the services provided to the elderly in their own homes, and to avoid the need for old people to sell their property to fund expensive care home fees. Ministers describe these issues as "unfinished business" from when the modern welfare state was set up by Labour after the Second World War.
The Government will set out its initial thinking in a Green Paper on long-term care next week.
An expansion of social care is emerging as one of the "big ideas" for a fourth term to be included in Labour's general election manifesto.
Under the plans, social care would not be nationalised, but tailored to individual needs through different providers.
It would be brought into line with the NHS, so that people would know what support to expect, ending the anxiety and uncertainty caused by the existing patchwork system. No decisions have been made, and ministers want a big national debate first.
The options include funding a basic national standard of care through a one-off payment by individuals of about £12,000 – either when someone retires or taken out of the estate when they die. However the option most favoured by ministers at present is an "earmarked" rise in National Insurance contributions, similar to the one Gordon Brown introduced as Chancellor in 2002 to boost the health budget, which won public support.
Although all workers could be expected to pay into a national social care "pool", higher earners would pay proportionately more than those on low incomes.
| If there's a problem put a tax on it. | |
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4th July 2009, 19:18
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#10916 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
BBC NEWS | Business | Construction sees sharp slowdown Quote: The UK construction sector is forecast to shrink by a record amount in 2009, the BBC has learnt.
The Construction Products Association (CPA) will say on Monday that it expects the sector to contract by 16% this year.
In April, the group had forecast a more moderate fall in output of 12%.
The CPA said the long lead time for contracts meant the commercial property slowdown was only just starting to show. It predicts a 5% fall in 2010.
The group, which represents the UK's manufacturers and suppliers of construction products, components and fittings, added there was a risk that growing public debt could threaten public sector construction as well.
Aggregate Industries chief executive Bill Bolsolver said the outlook for the sector "was bleak".
| But what about the recovery. | |
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4th July 2009, 19:22
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#10917 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
BT offers thousands of workers 'holiday of lifetime' on quarter pay - Telegraph Quote:
The former state telecoms company - one of Britain's biggest private employers with 106,000 staff - is trying to save money as it struggles to cope with the impact of the recession.
BT has proposed that employees take up to a year off, in return for taking a 75 per cent pay cut. To encourage as many workers to take up of the offer, the company will pay their reduced salary as an upfront cash payment.
It is also offering staff a one-off payment of £1,000 if they switch from full-time to part-time work.
Parents are also being offered the opportunity to work only in school term times, so they can spend the summer holidays with their children.
The radical proposals - leaked to The Daily Telegraph - are the latest example of the private sector having to adopt increasingly desperate and inventive measures to tackle the recession by cutting costs without sacking staff.
British Airways last month asked thousands of its staff to work for free during the summer, and to switch to part time hours. Many car manufacturers have sent workers home on half pay for months at a time.
BT - which made a £1.3 billion loss in the first three months of the year - has already announced 15,000 job cuts last year with plans to cut a further 15,000 jobs in the next 12 months.
A senior source at BT told The Daily Telegraph that the "Time Out Options" will save the company from having to cut further jobs as it radically restructures the company.
He said most of BT's divisional managers have been ordered to reduce their labour costs by "more than 10 per cent".
| This will feed into the economy in a big way, the tax take is going to get significantly reduced if this trend spreads. | |
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4th July 2009, 19:55
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#10920 (permalink)
| | Royalties Account Holder | Re: The great interest rate rip off
FT.com / UK - Ministers consider changes on council pensions Quote: Funding requirements for 3.7m council workers’ pensions could be loosened by the government to avoid a sharp increase in local taxes or a showdown with the unions.
According to a paper by the local government department seen by the Financial Times, councils should not have to keep enough money on hand to pay all promised pension benefits because their “constitutional permanence” means that they do not face the same threat of bankruptcy as private companies.
Many local authorities face spiralling pension deficits, but the paper says the cost of addressing the shortfalls, which some councils say would have to include tax increases and cuts in services or workers’ benefits, could be “disproportionately significant”.
John Ball, head of defined benefit pensions at Watson Wyatt, the actuarial consultants, said private employers would be “open-mouthed” when they learnt of the proposals.
“If these deficits are kicked into the long grass, it will mean that the council tax payers of tomorrow have to pay for the services their parents have consumed,” said Mr Ball.
The proposals come amid a rising tide of criticism about the cost of public sector final salary pensions. Growing numbers of private employers are closing schemes to new and existing members because benefits are too risky and expensive to provide.
The local government pension scheme, which has 3.7m members, has enough money to cover only 83 per cent of its promised benefits, according to its last valuation in March 2007, when stock markets were near their peak.
According to calculations by Watson Wyatt, that is likely to have fallen to no more than 50-60 per cent funded, leaving a shortfall of about £100bn today.
The paper by the Department for Communities and Local Government said that by the time of the next council pension scheme valuation – in March next year – the situation was likely to be even worse.
Although most private company pension schemes are obliged to erase their deficits within 10 years, public sector employers have more leeway. The most recent average target is 20 years.
The Pensions Regulator has said it will allow longer periods for some private employers but only those using realistic assumptions about how much their pension promises will actually cost.
| Excellent avoid the issue and it goes away.
There is no money, but like always leave the problem for tomorrow and for someone else to sort out.
As I said at the start of the year the pension crisis is huge. | |
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Reclaim the Right Ltd. - reg.05783665 in the UK reg. office:- 923 Finchley Road London NW11 7PE
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