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American Economy: Good Growth Records

During Q2 2017 the US economy witnessed some impressive growth; actually the fastest it has encountered in the last two years.  Some of this has been attributed to President Trump since economic growth reached 3% during his first full quarter, marking the highest it has been since Q1 2015, and more than double that of Q1 2017.

This optimistic economic climate has also been attributed to stronger consumer spending as well as better business investment.

The sentiment was echoed by Patricia Buckley recently who wrote: “Healthy employment growth and moderate increases in GDP continue to define the US economy, even as the composition of the labor force evolves.”

Still, while this does indicate cause for positive thinking (with unemployment lower than it has been since 2001, at 4.3%), there is still the matter of the fact that growth is somewhat underwhelming.  For example, while there has been 2-3% of salary increase (above inflation), it’s not great.  And while confidence in CEO and small businesses is high, businesses are not investing as much as they should.

Yes, we’re on the right tracks.  But we’re not out of the woods just yet.

 

Mandala Funding Ltd Stakes PT Sugih Energy with $41 million Loan

Cayman Islands based Mandala Funding Ltd has agreed to a funding scheme worth $41 million for the oil and gas exploration company known as PT Sugih Energy, through its subsidiary Eastwin Global Investments Ltd.

The recently appointed finance director of Sugih Energy, Rahman Akil said that $31 million would be used to pay for the Lemang oil and gas development. Sugih Energy has a 34 percent stake in Lemang.

The cost of development which was promised was for $11 million in 2016 and $20 million in future cash for the coming year of 2017.

“We will use the other $8 million to refinance corporate’s debt and the remaining $2 million for corporate’s cash,” Rahman said.

The Lemang Block exploration was approved by the government of Indonesia in 2007. In November of last year the production phase began in the Akatara field, starting with 300 barrels of oil per day.

“We plan to drill five more wells in Akatara field, increasing the production to 1,500 bopd at the end of the year,” he said.

Mandala Funding, the lender of the financing, is a subsidiary of Singaporean Mandala Energy Ltd, which also has an interest in Lemang Block. Ownership of the block is shared by three companies: PT Sugih Energy Tbk through Eastwin Global Investments Ltd with 34 percent shares; Ramba Energy Ltd through PT Hexindo Gemilang Jaya with 35 percent shares; and Mandala Energy Ltd with 31 percent shares.

Saving Money in the US Depends on Where You Live

Los Angeles is the hardest city to save in the US. Photo by By Thomas Pintaric
Los Angeles is the hardest city to save in the US. Photo by By Thomas Pintaric

Everyone knows how important it is to save money. There is no question that everyone would like to save, but in some US towns, it is simply not so easy. How much people can save is not only dependent on how much income is rolling in, but how much it costs to live.

Debt.com took a look at several parameters to create a list of the easiest (and most difficult) cities in which to save. They took the price of gas from GasBuddy, home prices and rent data from Zillow, and unemployment rates from the Bureau of Labor Statistics. The last parameter was income, which was garnered from the Census Bureau. Together they came up with a general idea of how hard saving money is throughout many of the county’s cities.

The web site created an interactive map to illustrate where the best and worst cities are. Not surprisingly, East Coast and West Coast cities are the most expensive places to live, while smaller cities further away from central hubs of commerce and industry are actually easier to save.

The top five cities for saving money are:

1.    Anchorage, Alaska
2.    Portland, Oregon
3.    Boise, Idaho
4.    Madison, Wisconsin
5.    Lincoln, Nebraska

The worst five are:

1.    Los Angeles, California (100 of 100)
2.    New York, NY (99 of 100)
3.    San Francisco, California (98 of 100)
4.    Long Beach, California (97 of 100)
5.    Oakland, California (96 of 100)

Toys ‘R’ Us Fires CFO Creasey

Taking Out the Old and Bringing in the New (CFO)
Taking Out the Old and Bringing in the New (CFO)

No reason was given as yet for the summary firing of Chief Financial Officer F. Clay Creasey Jr after serving in the role since 2006. Replacing him will be Michael J. Short, former executive at AutoNation.

Toys ‘R’Us will pay Mr. Short $700,000 as his annual base salary. He will also be able to receive up to the same amount in yearly bonuses. In addition the company will offer Mr. Short stock options.

Mr. Short was the CFO for seven years at AutoNation. He also had financial roles at Universal Orlando, Seagram & Sons, and IBM Corp previous to his stint at AutoNation.

“We are delighted to have Mike join the organization during this transformational time for our company and look forward to the benefit of his strong financial and strategic experience, as well as his unique insights and fresh perspective on the business,” said Toys ‘R’ Us Chairman and Chief Executive Antonio Urcelay.

New Year’s Advice from the Chief Executive of Morningstar

Sometimes, good advice can make all the difference. It can help a person make one right decision that will impact the future of their career and change their financial life forever. In honor of the holidays, the Wall Street Journal asked several experts to share the best advice they ever received, or gave.

Morningstar chief executive Joe Mansueto said:

“An investor should think like a business owner, not a renter. Most businesspeople don’t get up in the morning and ask whether they should sell their business that day. If they own a pizza shop, they don’t think about whether what they really should own is a shoe store instead. They show patience and persistence and try to understand their underlying business better so they can earn the greatest return for the longest period of time.”

“So investors are in many ways misled by stock-market volatility”, he continued. “The values of the underlying businesses just don’t change as quickly as stock prices do. You really don’t have to watch those changes hawklike day after day.

It is in a lot of people’s interests to get you to do something. Advisers and brokers earn commissions, fund companies want you to bring your assets to them. There are a lot of forces at work in the investment industry to get people to move, and there’s not really a countervailing force to encourage you to do nothing. But you should.”

A Step by Step Guide to Buying Gold

goldSome investors believe it is a complicated process to purchase gold as an investment, but this does not have to be true. Here is a step by step process to make buying gold easy.

1.     Understand the role you want gold to play in your investment portfolio. Knowing what you want gold to do for you can save time and prevent mistakes.

2.     Decide what percentage of your portfolio you would like gold to have. There is an old saying which goes, “Put 10% of your money in gold and hope you never need it.” Some experts that depending on an investor’s confidence in the economy, up to 30% invested in gold can be a smart move.

3.     Choose the correct gold firm. Check ratings, the Better Business Bureau, and precious metal reviews. The company you deal with can make a large difference in your experience of owning gold.

4.     When you have done the research you will be able to make an informed decision.
Gold is a traditional hedge for investors. By following these simple steps gold can work its magic for you, too.

Current Value of Gold

Jerusalem-GoldFor the first time in four sessions, 14 May witnessed an increase in gold.  This was assisted by a softer dollar.  As well, a somewhat unexpected increase in the US retail sales last month enhanced the notion that America’s economy remains buoyant.  The precious metal reached a peak of $1,444.96 an ounce and stood at $1,440.66 by 0419 GMT, up $10.61.

However, this has not been the general trend.  New Delhi witnessed a drop of almost Rs 400 which boosted retail purchase for jewelers reporting around a 15 percent increase in sales.  Indeed, there was a substantial amount of gold purchasing on Akshaya Tritiya Day, which is seen as “an auspicious day for buying gold and silver.”  There was also an increase of 14 percent in gold EFTs on NSE Monday.

 

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Christmas, a Boost to the US Economy

santaCertainly, as the fear of the fiscal cliff looms, everyone has their ears and eyes set on Christmas and the holiday season in general. Typically, this is the largest economic stimulus time of the year, as people come out to purchase Christmas gifts and to enjoy before the New Year. The US retail industry generated approximately 2.88 trillion US dollars during the holidays in 2011. This reflects approximately 19.5% of the entire retail industry total sales for the year.

These numbers also have a great impact on the regional employment figures, as 608 thousand employees were hired last year to deal with the holiday rush. All eyes are on the stores today, and during this time in general, to see what this year will bring for the economic forecast.

Consumer Confidence Seen Surging

Fueled by an optimistic job outlook, the Consumer Confidence Index was helped to climb to its highest level since last April, even approaching a post-recession high, according to the monthly survey taken by The Conference Board.

This was the second month in a row in which the Consumer Confidence Index rose, happily coinciding with a good holiday shopping season. Retailers attracted many shoppers with highly discounted prices to lure them into their shops.

Confidence seems to be rising in conjunction with a generally better outlook for the overall economy. A poll conducted by the Associated Press of three dozen private, corporate and academic economists predicts that there will be an increase in economic growth in 2012, as long as trouble in European economies does not interfere.

“This is encouraging. It’s good to be talking about improvement,” said Mark Vitner, an economist at Wells Fargo. “But there is still a lot of room for trouble.”

The Conference Board is a private research group. According to them the Consumer Confidence Index went up close to 10 points to 64.5 in December. This is an increase from the 55.2 figure of November. This level is not far from the highest post-recession figure of 72 which was attained last February.

Lynn Franco is the director of The Conference Board Consumer Research Center. She noted that last summer’s worry that a second recession was looming hurt consumer confidence then.

“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes,” Franco said. “Have we rebounded from a summer lull or are we turning the corner?”