Browsing: / Home
Shortlink

US Gas Prices Spike by 17 Cents in One Week

By Jessie Wilkens on February 27, 2011 in

Despite a huge rise in the price of gas in the United States last week, analysts believe the end of higher gas prices is nowhere to be seen. The turmoil in the Middle East has forced the price of crude oil to rise sharply, affecting the price of gasoline around the world.

The average national price for one gallon or regular gas rose to $3.33 by Saturday, a rise of 4.6 cents, according to the AAA, a motorist group. This represents the highest average price of gas since October 2008.

On Friday the highest one day gas price rise since at least 2008 was reported, an increase of 6 cents, said Tom Kloza, the chief oil analyst at the Oil Price Information Service.

"This will definitely be the most expensive February ever," he said, adding that the winter months usually experience the lowest gas prices of the year.

Moody’s Analytics is warning of a 37 cent increase in the price of gas over the next few weeks. Chris Lafakis of Moody’s expects that for every $1 increase in the cost of a barrel of crude oil retail prices of gas usually rise about 2.5 cents per gallon.

The great fear of the spiking cost of oil is the effect this will have on the overall economic recovery in the US and worldwide. A rule of thumb is that for every $1 increase in the price of oil consumers pay about $1 billion over the course of the year.

Mixx Delicious Digg Facebook Twitter
Shortlink

Libyan Oil Cannot Be Replaced by Saudi Crude

By Jessie Wilkens on February 24, 2011 in ,

According to analysts and observers of the Middle East, Saudi Arabia will not be able to pick up where the supply of Libyan oil leaves off.  A large number of foreign oil companies in Libya have stopped their operations, including production and exploration. Repsol, one of the largest of these firms has halted their activities, including their output from the El Sharara oil field which yields 200,000 barrels/day of export-grade crude oil for the company. Total shortfall for all oil production in the beleaguered country is estimated to be about 1 million barrels/day, a large percentage of the country’s total of 1.6 million barrels/day, the rest under threat.

Despite the fact that some observers suggested that Saudi Arabia could make up the difference by increasing their own oil output, this seems unlikely. Suki Cooper of Barclays Capital explained why Saudi Arabia can’t just step into Libya’s oil producing shoes:

"Firstly, the grades and quality of crude available from Saudi Arabia is likely to be different from Libya.

Moreover, the time taken to bring those Saudi barrels to the market is likely to be significantly longer compared to the ongoing Libyan production. Thus, the concept of a barrel for barrel replacement is not a correct one. 

"Ultimately, the overall significance of the situation in Libya is more than just about lost barrels. It continues to inject a huge amount of uncertainty in the oil market especially for the medium term, as destabilization in the Arab world, home to the world’s largest oil and gas reserves and production, is of extreme significance."

Mixx Delicious Digg Facebook Twitter
Shortlink

Britain Sees Surplus in Borrowing in January 2011

By Jessie Wilkens on February 23, 2011 in

Official data from Great Britain shows that January 2011 had the highest monthly surplus of borrowing in two years. The excellent financial figures were improved by expanding taxation revenues with a total net borrowing in the public sector at 3.735 billion pounds sterling for January, according th the Office of National Statistics (ONS.)

This was the first time since January 2009 that the public sector played the role of lender and not borrower, and it was the net highest amount since January of 2008.

January is a common month to see a surplus in the government’s kitty due to the receipt of annual tax payments in this month.

"Today's public finances release marks the first significant turnaround in the public finances this financial year," said economist Scott Corfe at the Centre for Economics and Business Research consultancy.

"Despite ongoing concerns about the fragility of the recovery, tax receipts have risen this month and this has led to a significant reduction in net borrowing."

Mixx Delicious Digg Facebook Twitter
Shortlink

Indices Up at BarclayHedge Investment Stategies

By Jessie Wilkens on February 17, 2011 in , ,

In a market which could be described as ‘elevator-like,’ the BarclayHedge-compiled “Barclay CTA Index” showed overall growth of 6.26% for the year ending in December 2010. Managed futures were up 2.85% according to the same index.

“As investor psychology fluctuated between risk-on and risk-off during 2010, the major market sectors – equities, bonds, currencies, and commodities – alternated rallies with price declines,” says Sol Waksman, founder and president of BarclayHedge.

The Barclay’s CTA indices showed gains by the end of the year, including the Barclay Diversified Traders Index, which increased by 4.19%; the Systematic Traders Index went up by 3.17%; and the Discretionary Traders Index showed improvement of 1.83%.

“Renewed optimism for growth in 2011 helped to propel prices upward for equities and commodities while simultaneously depressing bond prices,” said Waksman.

None of the managed futures strategies lost ground in 2010, despite the difficulties in the global economy.

“In spite of several sharp loss-generating price reversals, the major price moves were to the upside and provided sufficient gains to more than offset most losses,” according to Waksman. "At year-end, more than 81 percent of the CTAs tracked by BarclayHedge had generated profits for their investors.”

Mixx Delicious Digg Facebook Twitter
Shortlink

Venture Philanthropist Impetus Trust Set to Double Funds by 2013

By Jessie Wilkens on February 13, 2011 in

In the tricky business of venture philanthropy Impetus Trust has been successful- so successful that it plans to almost double its number of active investments from the present number of 13 to an ambitious 22 by the year 2013.

Impetus Trust is UK-based venture philanthropist organization which uses grants and corporate partners to give pro bono backing to charities and other social projects. But expanding is not so simple; the key is for Impetus to convince businesses and corporations that the organizations that Impetus supports are worthy of such support, but also to convince investors that their support will create growth in not only the financial base but also in the people-base; the number of people served.

Impetus Trust has the credentials with a growth of 40 percent in people served by the charitable organizations it supports and an accompanying 31 percent growth of income. But this is not the only aspect of venture philanthropy that is tricky; these trusts need to have organizations to fund or else the investors won’t provide their money or their services; and second, it also, at the same time, cannot have too many organizations or else the money and services are spread too thin, and growth can’t happen.

To date Impetus has already helped about one quarter of a million people throughout the world, including such charities and social enterprises as Keyfund Federation, Camfed International, Fairtrade Foundation, IntoUniversity and Street League.

Mixx Delicious Digg Facebook Twitter
Shortlink

Coutts to Change Image to Offering Investment Services

By Jessie Wilkens on February 8, 2011 in ,

Rory Tapner, the new head of wealth at the Royal Bank of Scotland, owner of Coutts, a private UK bank, is making plans to change the reputation of Coutts from a stodgy, conservative a traditional bank to one with a bit more pizzazz.

Tapner’s plan is to begin an ambitious drive into investment management services which will be just one aspect of a greater refocusing and broader restructuring in the hopes of stopping the trend of falling margins.

“In the UK space we need to move the needle so instead of having two legs of a three legged stool – credit and deposits – we have credit, deposits and investments,” Tapner said.

Coutts has an investment service, but it is drastically underused. The service at the moment emphasizes portfolios which are built mainly around funds which are externally managed. The bank also handles extremely wealthy clients’ portfolios, which are almost exclusively made up of highly sophisticated assets.

But these investments represent only 15 percent of Coutts’ clients in the UK. To compare, about 90 per cent of Coutts overseas customers also use the bank for their investment needs.

As Tapner explained,

“I thought we would have to spend two to three years building up a record but actually that was here. The trouble was nobody knew about it.”

Mixx Delicious Digg Facebook Twitter
Shortlink

FSA Opening Regulatory Discussion on EFTs

By Jessie Wilkens on February 7, 2011 in ,

The Financial Services Authority, (FSA) is beginning to take a closer look at the way financial advice is brought to consumers, especially in regards to exchange traded funds, or EFTs. The FSA is concerned with the financial markets in the UK and Australia, and are looking for ways to reduce the potential of conflict of interest situations from arising.

In a recent proposal from the FSA a more interventionist approach to regulating investment advisors to create a better balance between protecting consumers but also allowing consumers freedom to choose their own investment strategies. At the moment the FSA is just putting forth proposals in an effort to open the debate to discussion; however there does seem to be a feeling that consumers would prefer lower cost financial products.

“If regulators in the UK end commissions on sales of investment products, people see that as favoring ETFs, because ETFs don’t carry commissions,” says Loren Fox, senior analyst at Strategic Insight. “It makes it a more level playing field between ETFs and mutual funds.”

Mixx Delicious Digg Facebook Twitter
Shortlink

Three Years After Nationalization Northern Rock Heading Back to Private Ownership

By Jessie Wilkens on February 1, 2011 in

Financial analysts watching events have stated that a maximum of 20 investment banks will be competing to bring Britain’s Northern Rock back to being a privately owned firm. Those acquainted with the issue explained that the allure is based on the prospect of future large government mandates when the firm is privatized.

The government agency that owns the British holdings in banks set the deadline at 1700 GMT Monday for corporate finance advisors to come up with new ideas for Northern Rock. Some of those ideas are expected to include either a trade sale or a return of the venerable investment bank back to the stock market. Three years ago Northern Rock was nationalized as a response to the British financial crisis. Now that the crisis seems to be over the government is ready to release Northern Rock back into private hands, the only question is “How best to do it?”

The investment bank with the best idea for Northern Rock will win the mandate, and even more enticing, the chance at further mandates for other banks, such as Lloyds and RBS in the future. The winner should be announced within a month of Monday’s deadline.

Mixx Delicious Digg Facebook Twitter
Shortlink

Hops Hopping as English Beer Industry Booms

By Jessie Wilkens on January 30, 2011 in

Despite a host of difficulties in the world economy there is one sector which seems to be on the rise, and that is the world of brewing beer. The industry group which supports the development of the beer industry, known as CAMRA (Campaign for Real Ale) says there are now 767 breweries functioning all across the UK.

The industry journal the CAMRA publishes, the Good Beer Guide, stated in its newest edition that in just the last year alone 78 new breweries opened. After taking into account the breweries that closed, the net total gain was 56 breweries.

In what CAMRA says is a powerful response to ‘taste and quality’ the majority of new breweries were of the micro- variety, small scale breweries which can more easily meet specific tastes of the consumer.

Roger Protz of the Good Beer Guide explained that,

"The real ale revolution goes on in spite of all the problems facing the brewing industry such as the often anti-competitive behavior of the large pub companies, the heavy and continuing rise in tax on beer, grossly unfair competition from supermarkets, and the smoking ban in pubs.

"Yet, against all the odds, craft breweries continue to sprout like mushrooms at dawn. The main reason is a simple one – craft brewers are responding to genuine consumer demand.

"Beer in pubs may be expensive compared to cheap supermarkets but drinkers are prepared to pay a bit extra for beer with taste and quality."

Mixx Delicious Digg Facebook Twitter
Shortlink

Aegon Study Shows Distrust of Pension Plans

By Jessie Wilkens on January 27, 2011 in

In a study conducted for the giant investment firm Aegon a surprising number of people surveyed expressed distrust and dissatisfaction with saving through pension plans or other long-term saving vehicles and showed preference for investments in real estate and similar investment strategies.

Participants in the study believe that pension funds are old-fashioned and even worse; they showed a marked distrust of the government and financial institutions.

The 20-page conclusion of the study described a situation where people showed low understanding of the savings plans offered and also a lack of awareness about how the tax system works. The report describes employers as the ‘unsung heroes’ who are often the ones who explain what pension plans are about and persuade their employees to save in them.

Jackie Wells, a consultant for Aegon, said: “There was a strong sense of anger and fear about retirement and savings and a distrust of financial institutions and government. One person picked the word ‘terror’ to describe his view on long-term saving.”

Mixx Delicious Digg Facebook Twitter