Archive for the ‘Grow Page’ Category

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Latest Labor Stats Show Six Applicants For Every U.S. Job

Thursday, September 24th, 2009

These days, simply shining up your resume or strategically name-dropping in an interview may not be enough to land a paying gig…

  • Though it is widely believed the recession is at an end in the U.S., the unemployment problem is still sobering, and the ratio of unemployed Americans to available jobs is at a record high.
  • During the economic crisis, many companies laid off employees and took conservative financial stances to prevent losses. That added up to a large pool of jobseekers but increasingly fewer job openings.
  • Companies are afraid to resume hiring or try to expand now because they aren’t certain what the economic future will bring. Plus, any increase in overall workload can easily be shifted onto existing employees.

Facts & Figures

  • According to July data, there are currently more than six jobseekers for every job opening. In the 2001 recession, there were just over two jobseekers for every job.
  • The nationwide unemployment rate is up to 9.7%.
  • Job losses have hit hard in every sector of the economy, even in typically high-growth industries like healthcare and education.

Best Quote

“There’s too much uncertainty out there. There’s not going to be an upsurge in job openings for quite a while, not until employers feel confident the economy is really growing.” – Thomas A. Kochan, Labor Economist at M.I.T.’s Sloan School of Management.

The Recession Is Probably Over, But It’s Still No Party

Thursday, September 24th, 2009

Just because a recession is ending doesn’t mean huge growth right away. It’s interesting to see what the future may hold after such a terrible economic spell.

  • On Tuesday, Ben Bernanke – the Federal Reserve chairman – said that it was “very likely” that the recession has already ended, though the problems it caused will still linger for a while.
  • Forecasters predict that we will only experience moderate growth for the rest of 2009 through 2010 – the problems affecting credit markets, consumer confidence, and the housing crisis still need time to be fully solved.
  • One of the most important problems that needs to be addressed is how the government is going to carefully dismantle the spending, lending, and guarantee programs it put in place to stabilize the economy – too quickly and we could be back to more problems, but too slowly and significant inflation could set in.

Facts & Figures

  • Retail sales in August surged by 2.7% in July – the largest increase since January of 2006.
  • Growth in 2010 is predicted to be moderate, not much faster than the basic growth rate of the economy.

Best Quote

“Without these speedy and forceful actions, last October’s panic would likely have continued to intensify, more major financial firms would have failed, and the entire global financial system would have been at serious risk.” – Ben S. Bernanke, Chairman of the Federal Reserve

First Health Insurance, Now Bank Insurance

Thursday, September 24th, 2009

It’s not just the healthcare industry that’s compensating for costs by raising premiums. Check out the FDIC’s plan to finance the next wave of bank failures.

  • The Federal Deposit Insurance Corp. exists to protect customer deposits at banks up to $250,000. But with so many banks failing in the past year, the FDIC has had to pay out more than they expected, and projections indicate their fund will be out of cash early in 2010 if action is not taken.
  • To combat the drain without relying on government assistance or increasing the rate it charges to banks for customer deposit insurance, the agency’s board has decided to propose a kind of advance in premium payments from the banks it insures – to the tune of $45 billion, or three years’ premium payments.
  • Banks have been mostly supportive of the plan, expressing relief that the rates – which have already been increased once this year – will not go up again.

Facts & Figures

  • So far in 2009, 94 banks have failed.
  • FDIC projections indicate a potential $100 billion increase in failed bank payments through 2013.
  • Banks are already paying $17 billion into the fund this year, including the rate increase.

Best Quote

“It’s clear that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy for every problem. In choosing this path, it should be clear to the public that the industry will not simply tap the shoulder of the increasingly weary taxpayer.” – Sheila C. Bair, FDIC Chairwoman

A Chairman of the Board is…

Wednesday, September 23rd, 2009

A Chairman of the Board runs the board of directors for a corporation. He hires the CEO and along with the rest of the board, makes sure the company is in good financial shape and is doing its best to fulfill its mission statement. He is like the General Manager of a sports team, who hires the coach and makes sure the team business is being run efficiently. It goes without saying, of course, that the Chairman can be a woman (in which case she’d likely be referred to as the Chairwoman, Chair, or Chairperson of the Board).

A Mutual Fund is…

Wednesday, September 23rd, 2009

A mutual fund is a pool of securities (stocks, bonds, money market instruments, etc.) managed by an investment company or other professional and paid for by investors. Each share of a mutual fund contains a small piece of every different type of security in the fund (so when you buy a share of a mutual fund, you’re really buying a little piece of a stock from Company A, a little piece of a stock from Company B, a little piece of a government bond, and so on).

What does it mean to say “the Fed is raising the interest rate?”

Wednesday, September 23rd, 2009

At any given time, there are countless different interest rates for countless different transactions at countless different institutions. The government doesn’t control all of them – how could it? But then how can you say the Fed has raised or lowered interest rates?

The Fed, or the Federal Reserve, is the whole country’s bank. It operates out of 12 different locations and it lands money to commercial banks, which in turn land money to us. The Federal Reserve Board is the agency that controls this bank and its job is to maintain a secure financial system throughout the country. The Fed’s primary concern is to regulate our economy’s rate of growth – if the economy grows too quickly, we get swamped by inflation, and if it grows too slowly, we could enter a recession.

Because the Fed lands money to all other banks, its interest rate affects all other interest rates, which adjust to accommodate the Fed’s behavior. So when the Fed decides the economy is growing too fast, it raises its own interest rate – raising all other interest rates in a kind of domino effect – and slows down spending that way. If the Fed wants to try to increase economic growth, it lowers its interest rate, which usually increases spending. While interest rates can vary from institution to institution, they’re all proportional to the country’s most important interest rate: the Federal Reserve’s.

A Junk Bond is…

Wednesday, September 23rd, 2009

A junk bond (also known as a high-yield bond) is a type of investment that is very risky to make, but it can lead to higher yields than safer investments. High-risk bonds got the name “junk” because of their low credit ratings (typically below Ba or BB).

Who picks the stocks that are in the Dow?

Wednesday, September 23rd, 2009

The Dow gets its name from Charles Dow, the man who first created it in 1897. In the beginning, Mr. Dow made a list of the 11 most prosperous and most widely traded stocks on the market. Currently, the Dow is made up of 30 stocks, chosen by the editors of the Wall Street Journal (which is owned by Dow Jones and Company).

But what are the criteria for determining what the “best” stocks are? The stocks included in the Dow are generally from large, stable companies that are considered to be among the most successful, but there is a mathematical formula to go on. The basic formula involves adding up the prices of all the stocks in a given index (collection of stocks) of a particular corporation, then dividing by the total number of stocks in that index – in other words, finding the average price of a stock for that index. Today, however, the editors at WSJ actually divide by a higher number in order to adjust for stock splits (when a company multiplies the amount of shares it has).

Kenneth Polcari Describes What’s Changed On Wall Street

Wednesday, September 23rd, 2009

Kenneth Polcari is the Managing Director at ICAP and has a knack for storytelling. He agreed to take take some time with TILE to answer a few of our burning questions.

>>TILE brings you exclusive interviews from people doing great things in SPEND, GROW, and GIVE. To view more, click on TILEcasts in the TILE Library.

Have a burning question or someone you’d like to see interviewed? Let us know – just Ask TILE!

Interest is…

Wednesday, September 23rd, 2009

Interest is the cost of borrowing money (or a benefit of lending money). When you deposit your money in the bank, the bank is essentially borrowing that money and paying you interest for it. Interest is usually expressed as a percentage per year.

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