The Flaw In The Argument In Favor Of Credit Cards

Credit cards are powerful financial tools, however, if in the wrong hands, they can cause financial damage. People who have immaculate control over their spending tend to go overboard when it comes to credit card spending.

Here are the flaws in the reasoning:

Positive Incentives Too Small: Positive incentives such as interest earned and brownie points hardly add up to anything. If you run your usual household expenses with the card, you are likely to make an additional few dollars per month. The banks know it, which is why they give it to you. However, most people fail to realize that they are not going to make much by earning a few dollars in interest or getting a few gifts.

Tendency to Splurge: Research has shown that credit cards induce tendency to splurge. This is why a shopkeeper pays 3 percent off their margin to the card companies. An average American is known to spend 18 percent to 20 percent more with credit cards than with cash.

Convenient Options Leading To The Trap: Credit card companies offer you convenient minimum payment options. They then run usurious interest on remaining debt. Before you realize it, you are up to your neck in the credit card debt and may not have even spent most of the money.

Finance Enquiry – A Valuable Source of Authentic Investment Opinion

Investors now have a credible option to access authentic analyst ratings or analyst opinions online at www.financeenquiry.com. The site is particularly helpful for the serious investors as it covers a wide range of investment options ranging from equities, mutual funds, gold, silver, commodities, forex and ETFs. The site is already witnessing a steady rise in popularity and page rankings as more and more investors are logging in to get valuable investment opinion and advice.

Finance Enquiry is a dedicated business news portal specializing in presenting the latest and the most updated investment news, views and opinion, mainly covering North America and Europe. They source their information from a global network which includes some of the best financial institutions as well as a host of eminent analysts, investment banks and rating agencies. They have a dedicated team of journalists, specialized in business and finance that interpret and analyze the critical information for the benefit of the investors logging into the portal. ( Prlog.org )

The markets today are witnessing sustained lack of investor confidence mainly due to the beating that investors, big and small, have taken. As a result, every piece of market intelligence dished out by the scores of finance portals and publications is scrutinized intensely by the discernable investor community. In this scenario, sources like Finance Enquiry that captures investor attention on the basis of authentic and authoritative market information is like a breath of fresh air.

Finance Enquiry offers insightful, substantiated, authentic and up-to-date market news, views, updates and information that can certainly make a difference to the serious investor who is not looking for a quick buck, overnight. The kind of value that a substantive source like Finance Enquiry offers is generally understood by the patient investor, who doesn’t like to take undue risks. The bad times today are essentially the result of reckless investments by institutions and individuals alike. The content in this portal definitely suggests a cautious yet, dynamic approach towards investing. Investors that appreciate such a balanced approach will have the last laugh.

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Also Read : Perfect time to invest in the stock market

Specialty Retailing Industry to Achieve the November SSS Consensus At Least

Analysts at Deutsche Bank Securities report on the performance of Specialty Retailing Industry this month.

In a research note published this morning, the analysts mention that based on 200+ stores holiday survey and scores of store visits, it is expected that the strength of Black Friday/Saturday and Cyber Monday to offset a part of Europe driven macro concerns. The analysts believe that November industry SSS consensus looks achievable to the least on Thursday. Irrespective of the solid sales, the analysts are watchful of the heavy inventory given warm temps. The analysts find gross margins to be the line item look for. 4Q consensus already looks for -140 bp y/y, so perhaps ‘low enough’. Anthro./Urban (Buy, $25.20) screened better in our checks, Abercrombie (Hold, $44.64) /Hollister less so, the analysts add. 

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Fed Forecasts Weak Growth and High Unemployment in the Years Ahead

A gloomy outlook for the coming years has been forecast by the Federal Reserve as it downgraded its projections for the US economy Wednesday. The Fed warned that high unemployment and weak growth of the economy are here to stay for years.

The unemployment rate has been forecast by the Fed to be around 8.6 percent at the end of next year, slightly down from the current 9.1 percent. Even by late 2014, it is expected to be between 6.8 and 7.7 percent. Fed’s forecast in June had projected unemployment to be around 8 percent by the end of 2012.

The Fed’s policymaking board, during a two day meeting that ended Wednesday, did not initiate any action to boost the economy and left the interest rates at their current low levels. Central bank leaders have now reconciled to the idea that the economy is not likely to grow as before because of the consumer debt and a depressed housing market. As such, they feel that employment figures are not likely to improve given the expectations that economic growth will be stunted in 2012.

Fed Chairman Ben S. Bernanke said that “Evidently . . . the drags on the recovery were stronger than we thought,” and added that the problems in the housing market were more severe and stubborn than analysts had thought.

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Greek Referendum On Bailout Sends Shock Waves Across Markets

The unexpected announcement by Greek Prime Minister George Papandreou calling for a referendum on the agreement reached between European leaders last week to solve the sovereign debt crisis has sent shock waves which have plunged the Dow by more than 297 points, or 2.05%, to 11,657.96 on Tuesday. Most European indebted nations are not happy with the economic belt tightening that would be required if the above agreement is implemented.

Having lost 2.5% on Monday, stocks extended their losses to Tuesday with the result that in the last two days, U.S. stocks have gone down by 4.7%. Tuesday also saw major European Indexes like France’s CAC 40 and Germany’s DAX tumbling 5% or more.

Charles Crane of Douglass Winthrop Advisors said, “If Greece thumbs its nose at the rest of the EU over this bailout, we go back to where we were before last week’s euphoria. It’s pretty darn disruptive, but could it get worse? Yes.”

Fitch Ratings said that investors are now apprehensive of the increasing threat of the Greek debt crisis getting much worse. It also feels that a referendum will only raise the possibility of a “disorderly” Greek default. Investors are not happy that the seemingly quick-fix solution found by European leaders might not be enough or immediate in solving the sovereign debt crisis.

Michael Farr of Farr Miller & Washington said, “These problems were a long time in the making and will take a long time to mend.”

Read more : Greek Referendum On Bailout Sends Shock Waves Across Markets

Apple Loses out to Samsung in Smartphone Business

Samsung surged past Apple (NASDAQ: AAPL) and usurped its position as the world’s top smartphone maker, in the third quarter with a 44 percent jump in shipments. It has also forecast strong sales in the current quarter. Whereas Apple had introduced its first iPhone in 2007, Samsung is comparatively new as it entered the smartphone market only last year. However, its sales soared mainly because of a sleek production system that is capable of rapidly bringing new products to the market.

Kim Hyun-joong, a fund manager at Midas Asset Management, which owns Samsung shares, said that “In the handset division, Samsung has no real rival models to challenge its products except for the iPhone 4S. Apple and Samsung will continue to dominate the market in the fourth quarter.”

On Friday, Samsung posted more than double profits for its telecoms division, which stood at $2.2 billion and accounted for 60 percent of Samsung’s total profits. Its shipments of smartphones increased by 44 percent from the previous quarter and stood at 27.8 million units, up nearly four times from a year ago. On the other hand Apple’s iPhone sales dropped by 16 percent to 17.1 million units in the third quarter.

Samsung’s share of the global smartphone market stood at 23.8 percent, 9 points higher than Apple. Its shares were up 1.6 percent by 0500 GMT, versus a 0.6 percent gain in the wider market.

Read more on : Apple Loses out to Samsung in Smartphone Business