Belarus Lending Rate – Ibelarus http://ibelarus.net/ Mon, 12 Jul 2021 09:43:59 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://ibelarus.net/wp-content/uploads/2021/06/icon-4-150x150.png Belarus Lending Rate – Ibelarus http://ibelarus.net/ 32 32 How Bitcoin Could Be the End of the IMF http://ibelarus.net/how-bitcoin-could-be-the-end-of-the-imf/ http://ibelarus.net/how-bitcoin-could-be-the-end-of-the-imf/#respond Mon, 14 Jun 2021 08:01:51 +0000 http://ibelarus.net/how-bitcoin-could-be-the-end-of-the-imf/

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please review our website policy before making any financial decisions.

Bitcoin is emerging as an international monetary force, without borders and without a leader. As such, it can counter other more established financial forces. By understanding why they even exist, all the pieces of the puzzle fall into place.

Bad lessons from the Great Depression

The validity of any theoretical framework can be judged by its predictive power. You may know that all of our economic reality stems from Keynesian economics, but few are aware of its big predictive blunders even as it emerged as the dominant economic framework.

John Bernard Keynes became a monetary star as the Great Depression autopsy economist. His solution to prevent this from happening again is being followed to this day – the economy must be managed centrally to remain stable. You may have noticed that everything – from politics to the stock market – is significantly influenced by a central committee – the Federal Reserve.

It has been completely normalized to take a close look at every word spoken by Fed chairmen. Its movements then become “signals” that market players receive and react accordingly. Just recently, the Fed sent a signal by announcing the sale of corporate bonds.

Keynesian performance failure

It is now widely accepted that governments need to increase spending to create growth and manage inflation and unemployment. In Keynesian theory, the economy does not have an inherent mechanism to adapt on its own. However, a Keynesian prediction for the postwar era was another great depression due to the demobilization of millions of people involved in the war effort.

At the time, the best Keynesian economists were firmly convinced that such a sudden surge would lead to double-digit unemployment increases, destabilizing the economy because it cannot adapt on its own. Unfortunately for the reputation of the Keynesians, nothing like this happened. It wasn’t until September 1982, after decades of massive government spending, that the unemployment rate hit double-digit range.

Source: United States Bureau of Labor Statistics

When this prediction did not come true, the Keynesians resorted to “pent-up demand” as an alternative explanation. In other words, consumer spending had made up for the lack of public spending. However, that too didn’t make sense. When you look at the numbers, in 1947 government spending fell 75% while federal tax revenues fell only 11%.

Therefore, both pent-up demand and unemployment invalidated critical aspects of early Keynesian theory. And that’s just one of its failures of predictive validation. Unfortunately, the facts don’t matter when the central control mechanisms have already been set in motion – the creation of the International Monetary Fund (IMF) in 1944 – explicitly based on Keynesian economic thinking.

From Keynes to Modern Monetary Theory (MMT) to the Economies of the IMF’s Free Falling Countries

The constant disruption of market signals, centralized micro-corrections, and the shifting of money from taxes to government spending have inevitably led to the current state of affairs:

  • Unprecedented consolidation and concentration of the power of companies, directly or indirectly subsidized by tax money.
  • Merger of government and corporate power, the latter accepted as senior central managers.
  • A national debt so huge that it is no longer worth thinking about.
  • The emergence of MMT to deal with debt – it’s just untaxed spending that isn’t problematic as long as the nation has sovereign control over its currency.

When the United States embarked on this hyper-centralization project, the IMF was created as an exchange rate stabilizer during the Bretton Woods period which lasted until 1971 when President Nixon abolished the standard. -gold. A more direct way of looking at its mission is that the IMF has subsidized excess US capital in foreign markets.

Since then, the IMF has become an international debtor to low-income developing countries. Much of its loan budget comes from membership quotas, which are currently up to $ 1,000 billion.

source: imf.org

Contrary to its stated purpose, wherever the IMF exerts its influence in lending, it tends to leave indebted and impoverished nations behind. In reality there is limited evidence to see that the IMF leaves nations in a better state.

Just look at the background details of a recent IMF proposal. The IMF has offered Belarus a loan of $ 940 million, on condition that the country adopts certain measures to “fight the pandemic”:

  • Put on the mask, which some studies now suggest having a very limited advantage.
  • Implement closures and curfews, for which there are legitimate proof suggesting that such measures cause far more harm than good.

The Belarusian president ultimately turned down the IMF’s offer.

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Bitcoin as an escape from dystopia?

Unsurprisingly, when El Salvador announced its groundbreaking legislation to make Bitcoin legal tender, the The IMF was unhappy.

IMF spokesperson Gerry Rice said:

“The adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.”

Indeed, these issues have to do with Bitcoin going against the stability version of the IMF, which some say looks like plummeting economies, to then buy their debt. Instead, Bitcoin is about deflationary growth.

Well-known Bitcoin maximalist, investor and entrepreneur Max Keizer has already pioneered the idea of ​​founding a billion dollar Bitcoin-based lending facility to counter the IMF’s stranglehold on international lending.

Since Bitcoin has become the target of what many see as “questionable” environmental concerns, Keizer further suggested that El Salvador could issue Bitcoin Mining Backed Volcano (BMBVB) bonds. This is the composition of the country’s energy production, 25% of which comes from geothermal sources.

This could come to fruition sooner than some might have expected, as President Nayib Bukele has previously asked the country’s geothermal company to plan Bitcoin’s green mining operations.

One wonders if Michael Saylor saw this from the start. Through various entities, Saylor has acquired 111,000 BTC. Thanks to MicroStrategy, a major aspect of its business model has been to leverage Bitcoin against currency inflation. Could it also prepare for the IMF’s ousting from the scene of international debtors?

How do you see the future of the IMF? We would love to hear from you in the comments below.

About the Author

Tim Fries is the co-founder of The Tokenist. He has a BSc in Mechanical Engineering from the University of Michigan and an MBA from the Booth School of Business at the University of Chicago. Tim was a Senior Associate in the investment team of RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in detection, protection and protection solutions. control.




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Should you repay your student loans or invest? http://ibelarus.net/should-you-repay-your-student-loans-or-invest/ http://ibelarus.net/should-you-repay-your-student-loans-or-invest/#respond Thu, 13 May 2021 07:00:00 +0000 http://ibelarus.net/should-you-repay-your-student-loans-or-invest/

After you’ve paid your bills and covered the necessary expenses each month, you may have some money left over. While it’s tempting to splurge, it’s usually best to use that extra money to make extra payments on outstanding debt or invest. If you have a large student loan balance, you may want to use all the extra funds to pay off these loans. However, as a general rule, investing is a better option to explore when you can reasonably expect a return that exceeds the interest rate on your student loan.



a man sitting at a table in front of a window: a young woman is working on a laptop in a cafe


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Young woman is working on laptop in a cafe

Early repayment of student loans vs. investment: points to remember

  • It is important to make the minimum payments required on your student loans.
  • Prepaying student loans early might be a good idea if you have a high interest rate.
  • Consider investing if you have a potentially high rate of return or if you are participating in a loan cancellation program.

Factors to Consider When Deciding to Pay Down Student Loans or Invest

If you have extra cash at the end of the month, should you pay off your student loans or invest? In short, there is no right answer. A lot of things go into this decision – like your expected return and your personal priorities. Here’s what to think about when considering whether to pay off student loans or invest.

Personal priorities

Start by thinking about your overall financial situation. You need to consider your other debts, your savings goals, and your personal priorities. Here are some other goals you might decide to prioritize:

  • Save for emergencies: Build your savings – in particular your emergency fund – should be your first priority, as this can help keep you afloat in a financial emergency. So before you pay off student loans or invest, save at least a month of spending. Over time, try to rack up up to six months of spending.
  • Saving for retirement: It’s always a good idea to start your nest egg early and give it plenty of time to grow. If your employer offers a 401 (k) match, enjoy. Explore other opportunities outside of a 401 (k) to start contributing to retirement accounts and save for retirement.
  • Pay off high interest debt: Credit card balances, personal loans and other types of debt may have higher interest rates than your student loans or your return on your investment. Paying them off first can give you a higher return than investments or student loans.
  • Tackle Life’s Big Goals: If you are looking to have children or save for a house down payment, you may decide to make minimum payments on your debt and not invest just yet. This gives you space in your budget to save for those bigger financial steps.

One final personal priority that you need to think about is whether getting rid of your debt is a top priority for you. If so, you may want to put your investments on hold and devote all your excess funds to prepaying your student loans.

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Interest rate

Depending on when you borrowed the money, interest rate on federal loans vary from about 3 percent to 7 percent. The interest rates for private student loans are generally higher. Paying off your debt is like a guaranteed return, so if your student loan interest rate is 5%, you get a 5% return.

Compare this rate of return to your expected investment return. Money market accounts and certificates of deposit generally obtain a low yield, of the order of 0.5 to 2%. Stocks can offer a much higher return, around 10% per year in a strong economy, but they are more volatile. A prudent but realistic return on investment is around 6-7% per year.

If the interest rate on your student loan is lower than what you can actually expect to earn by investing, then it might be a good idea to prioritize investing over prepaying student loans. It is worth noting that until Sep 30, 2021, all federal student loans have an interest rate of 0% and payments are not required. Now is the time to start investing.

Video: How a teacher paid off $ 40,000 in student loans in 18 months (CNBC)

How a teacher paid off $ 40,000 in student loans in 18 months

FOLLOWING

FOLLOWING

Tax deductions

When you pay off student loans, you may be able to deduct the interest you pay on that debt. Eligible borrowers can lower their taxable income up to $ 2,500, which helps offset the cost of student loans over time.

Forgiveness programs

If you have federal student loans, you may be able to get a student loan forgiveness, which will eventually write off some or all of your student loan debt. If you plan to take advantage of student loan forgiveness, it may not make sense to assign additional payments to debt, as making additional payments will not get you loan forgiveness any faster. Instead, you could spend the extra money investing and growing your money over time.

But look carefully at the details of the loan forgiveness. When you sign up for income-based repayment plans, such as Pay as you earn (PAYE), you might pay more interest because the loan terms extend over several years. This may affect your decision to sign up for one of these programs or to start investing now.

Paying off student loans vs investing

There is no definitive answer as to when is the best time to prepay student loans or invest. However, consider a few scenarios where one option might be better than the other.

When to repay student loans

  • Your main goal is to free yourself from your debts: If being debt free is a priority for you, it makes sense to put all of your extra money into paying off your loans. Sometimes knowing that the burden of your loans will be gone is enough to be worth it.
  • Your loans have a high interest rate: A higher interest rate (closer to 7% or more) on your student loans means that you are likely to get as good a return on your investment for paying off your loans as you would with an investment.
  • You have no additional funds after setting your financial goals and budget: If your cash flow is unpredictable and you usually only have the minimum amount for your minimum student loan payments, it’s best not to invest.

When to invest

  • The rate of return on the investment is higher than the interest rate on your loans: While investing never offers a guaranteed return, if your research shows that the rate of return on your investments is likely to be higher than the interest rate on your loans, it might be a good idea to start investing.
  • You are enrolled in a student loan forgiveness plan: When your loans are canceled after a certain period of time, it might not make sense to repay as much as you can. Make the minimum required payments and use your remaining money to start investing.

How To Invest When You Have Student Loan Debt

If you’ve decided to start investing, start by figuring out how much you can invest each month to meet that goal while still paying off your student loan. Add up your monthly expenses (including some spending money) and subtract that amount from your monthly after-tax income. What’s left is a fair game for investing. Here are a few ways to try investing:

  • Use an investment app: Some applications, such as Hideout or Tassels, leave you start investing with as little as $ 5. They are great for people who are new to investing or who need a little help managing their investments.
  • Hire a broker: A stock broker is a person or business that buys and sells stocks on your behalf. You may decide to look for low cost online brokers, like loyalty, or opt for a free service like Robin Hood.
  • Buying an S&P 500 index fund: A S&P Index Fund owns shares of all stocks in the index, which helps you diversify your investment and achieve less volatile returns.

The bottom line

The decision to pay off student loans or invest depends on your financial priorities and which option gives you the best return. If the rate of return on the investment is greater than the interest on your student loan, you may decide to invest – but keep making minimum payments on your student loans in the meantime.

Learn more:

Read on


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Belarus refinancing rate to rise to 8.5% on April 21 http://ibelarus.net/belarus-refinancing-rate-to-rise-to-8-5-on-april-21/ http://ibelarus.net/belarus-refinancing-rate-to-rise-to-8-5-on-april-21/#respond Wed, 14 Apr 2021 07:00:00 +0000 http://ibelarus.net/belarus-refinancing-rate-to-rise-to-8-5-on-april-21/

MINSK, April 14 (BelTA) – On April 21, 2021, Belarus refinancing rate will be raised to 8.5%, overnight lending rate to 9.5% and overnight deposit rate at 7.5% per year, BelTA learned from Information and PR. Department of the National Bank of the Republic of Belarus.

The Board of Directors of the National Bank took these decisions at the end of the last discussion session on monetary management policy on April 14, taking into account all the external and internal factors affecting the current and future dynamics. consumer prices.

“At the end of 2020, inflation processes accelerated, which was caused by the transfer to prices of the weakening Belarusian ruble, as well as supply shocks in the markets of some food products . In early 2021, inflation continued to accelerate driven by further increases in global prices for food products, as well as imported non-food products, the cost of which has increased to consumers due to rising costs. logistics and supply disruptions due to the pandemic. An additional pro-inflationary impact on the Belarusian domestic market has formed in the framework of the removal of the benefits of the value added tax, ”the central bank said.

The aforementioned factors in the context of the acceleration of inflation and its prolonged deviation from the 5% level led to an increase in inflation expectations, which is confirmed by the results of the survey of population and business monitoring. As a result, the list of goods and services in the basket of consumer goods, the prices of which have started to grow at a higher rate, has been extended. In March 2021, the increase in consumer prices reached 8.5% in annual terms.

In order to limit inflation, the National Bank adopted a set of measures within the framework of the monetary targeting regime, aimed at strengthening the control of the money supply.

The National Bank said that a higher inflationary environment is expected in the global economy in the near future due to the number of developed countries pursuing stimulating monetary policies. Inflation in the countries, which are Belarus’ main trading partners, is also expected to be high. Thus, according to the Bank of Russia, the growth of consumer prices in the Russian Federation will slow down to reach target levels no earlier than the first half of 2022.

At the same time, the impact of shocks on food prices, as well as the consequences of the pandemic in terms of higher costs of imported non-food products, could be greater on inflation in Belarus.

“Taken together, these factors form preconditions for maintaining high inflation expectations of economic agents for a long period of time, which increases the risks of keeping inflation high in the future. At the same time, weak consumer and investment demand in the country will limit inflation somewhat. In these circumstances, in order to limit pro-inflationary risks and to strengthen measures to control the money supply, the board of directors of the National Bank has decided to increase the refinancing rate by 75 basis points ”, he added. said the central bank.

Taking into account the influence of all factors, experts predict a decline in the quarterly growth rate of consumer prices from the second quarter. At the same time, the earlier acceleration will trickle down to the annual inflation rate until the end of the current year. It is expected that the annual price growth rate will increase in the second quarter of 2021 from the current value and then decrease by the end of the year. In December 2021, consumer price growth is estimated at around 7%.

Thereafter, annual inflation will continue to slow and from the second quarter of 2022 is estimated at the medium-term target level of around 5%.

“When considering monetary policy issues, the Board of Directors of the National Bank will continue from the need to maintain price stability. Decisions will be based on a comprehensive analysis of external and internal factors, taking into account the duration of their impact and possible side effects, as well as an assessment of inflationary risks, ”the department said.


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EBRD Chairman: Turkey’s central bank reshuffle raises financial stability concerns http://ibelarus.net/ebrd-chairman-turkeys-central-bank-reshuffle-raises-financial-stability-concerns/ http://ibelarus.net/ebrd-chairman-turkeys-central-bank-reshuffle-raises-financial-stability-concerns/#respond Wed, 07 Apr 2021 07:00:00 +0000 http://ibelarus.net/ebrd-chairman-turkeys-central-bank-reshuffle-raises-financial-stability-concerns/

LONDON, April 7 (Reuters) – The change in the head of Turkey’s central bank has raised concerns about its financial stability and policymakers must focus on tackling inflation, the president of Turkey said on Wednesday. European Bank for Reconstruction and Development.

More broadly in the 38 economies under the bank’s jurisdiction, the slow rollout of coronavirus vaccination programs is the biggest threat to the recovery, Odile Renaud-Basso told Reuters.

Turkish President Tayyip Erdogan brutally sacked central bank chief Naci Agbal last week, just days after Agbal announced an exceptional rate hike to curb inflation. Erdogan – a self-proclaimed enemy of interest rates – sacked three governors in less than two years. Read more

“It is clear that changing central bank governors so often is not good for (his) … credibility,” EBRD president Odile Renaud-Basso told Reuters.

It was now vital for policymakers to stay focused on a restrictive monetary policy, fight inflation and not reverse the measures taken by Agbal.

“There are some concerns about financial stability and the next steps will be very important,” she said, adding that she hoped to visit the country – the EBRD’s main investment destination in 2020 – soon.

Erdogan on Wednesday aimed to cut interest rates below 10% and said his government was determined to bring inflation down to single digits. [nL8N2M02IM]

Turkey received 1.7 billion euros ($ 2.0 billion) of the record 11 billion euros that the EBRD invested last year in its region – which spans central Europe and Eastern Egypt, Tunisia and Morocco – to help mitigate the economic effects of the pandemic.

Renaud-Basso said she expected investments to reach the same level this year, with Turkey once again being one of the main beneficiaries.

NO WITHDRAWAL FROM BELARUS

The “big risk” the EBRD economies face this year is the difficulty in accessing COVID-19 vaccines, she said.

“If countries are not in a position to get rid of or ease the restrictions, the recovery is very much at stake, and this is especially true for economies heavily dependent on tourism,” she added, citing Georgia. as an example.

Speaking of other countries of operation, Renaud-Basso said the bank would continue to invest in private sector companies in Belarus, although it was carefully monitoring the political situation and avoiding companies with links to local authorities. .

Majority-owned by G7 powers, the EBRD has come under scrutiny after other institutions such as the EU’s lending arm, the European Investment Bank (EIB), said they would stop funding new projects in Belarus as part of the bloc’s response to last year’s contested re-election of President Alexander Lukashenko.

With a mandate to operate in countries that “apply the principles of multi-party democracy and pluralism,” the EBRD suspended all investments in Russia in 2014 after Moscow’s annexation of Crimea.

“We are not at this point in Belarus,” she said.

($ 1 = 0.8408 euros)

Reporting by Karin Strohecker; edited by John Stonestreet

Our standards: Thomson Reuters Trust Principles.


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If you’re selling a house these days, the buyer could be a pension fund http://ibelarus.net/if-youre-selling-a-house-these-days-the-buyer-could-be-a-pension-fund/ http://ibelarus.net/if-youre-selling-a-house-these-days-the-buyer-could-be-a-pension-fund/#respond Sun, 04 Apr 2021 07:00:00 +0000 http://ibelarus.net/if-youre-selling-a-house-these-days-the-buyer-could-be-a-pension-fund/

A bidding war broke out this winter in a new subdivision north of Houston. But the prize this time was the entire housing estate, not just a single suburban home, illustrating the rise of big investors as a powerful new force in the US housing market.

DR Horton Inc.

DHI 0.77%

built 124 homes in Conroe, TX, rented them out and then put the whole community, Amber Pines to Fosters Ridge, on the block. A Who’s Who of investors and home rental companies flocked to the December sale. The winning bid of $ 32 million came from an online real estate investment platform, Fundrise LLC, which manages more than $ 1 billion on behalf of approximately 150,000 people.

The nation’s most prolific homebuilder has set aside about double what it typically does by selling homes to the middle class, an encouraging start in selling entire neighborhoods to investors.

“We certainly wouldn’t expect every single-family community we sell to sell at a gross margin of 50%,” the builder’s chief financial officer, Bill Wheat, said at a recent investor conference.

From individuals with smartphones and a few thousand dollars to pensions and private equity firms with billions, yield-seeking investors are scrambling for single-family homes to rent or flip. They compete for homes with ordinary Americans, who are armed with the cheapest mortgage financing ever, and drive home prices up.

“You now have permanent capital in competition with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consultancy estimates that in many of the country’s major markets, about a in every fifth house sold is bought by someone who never moves in. “It’s going to make housing in the United States permanently more expensive,” he said.

The consulting firm found Houston to be the place of choice for investors, who recently accounted for 24% of home purchases there. Investor share in the housing market is growing, as it is in other booming cities, such as Miami, Phoenix and Las Vegas, among properties priced below $ 300,000 and in decent school districts.

“The limited supply of housing, low rates, a global reach for yield and what we call the institutionalization of real estate investors have paved the way for another speculative investor-induced house price bubble,” concluded the society.

A bidding war has broken out over the 124-unit rental community of Amber Pines built by DR Horton.

The bubble has room to develop before it bursts, according to John Burns Real Estate Consulting. But it swells quickly. The company expects home prices to climb 12% this year – on top of the 11% increase last year – and rise by at least 6% in 2022, a period of appreciation reminiscent of 2004 and 2005.

This boom was different, fueled by loose loans that allowed individuals to speculate on house prices by racking up mortgages that they could only pay off if house prices continued to climb. The money party ended a few years later when house prices stopped rising. The subsequent crash wiped out $ 11 trillion in US household wealth and brought the global financial system to the brink of collapse.

Financiers stepped in from 2011 and swallowed up foreclosed homes with significant discounts. They sent buyers up for auction in courthouses with duffel bags of silver. Smartphones and tablets, new at the time, allowed them to orchestrate land grabbing and subsequently manage tens of thousands of remote properties.

They dominated the market for a few years, accounting for about a third of sales in some markets and setting a floor for lower prices. There wasn’t a lot of competition. Stung by losses, banks have made it harder for regular homebuyers to get a mortgage. Millions of Americans were under water, owed more on their mortgages than their homes were worth, and unable to move.

Home rental companies, including Invitation Homes Inc.

INVH -1.03%

and American Homes 4 Rent,

AMH -1.50%

prosperous. Renting out suburban homes has proven to be so profitable that homeowners hit the open market and added heavily priced properties after foreclosures ended. Many are now building houses explicitly for rent.

The coronavirus pandemic has sparked a race for home offices and classes. Occupancy rates are at record highs and rents are rising with house prices. The ecosystem of businesses that serve, finance, and emulate mega-owners is booming.

SHARE YOUR THOUGHTS

Have you met investors in the housing market? Join the conversation below.

Burns has counted more than 200 companies and investment firms in the house hunting: computer-aided pinball machine Opendoor Technologies Inc.,

OPEN -4.82%

fund managers including JP Morgan Asset Management and BlackRock Inc.,

BLACK 0.48%

platforms such as Fundrise and Roofstock which buy and organize rental management on behalf of individuals and the builder LGI Homes Inc.,

LGIH 1.39%

which now reports wholesale home sales to wholesale buyers in its quarterly results.

Spring brought a new rush of buyers.

The US mortgage market involves some key players who play an important role in the process. Here’s what investors need to understand and what risks they take when investing in the industry. WSJ’s Telis Demos explains. Photo: Getty Images / Martin Barraud

PCCP LLC, which typically invests in apartment buildings and office towers, said it purchased rental housing communities in the Southeast, the start of a $ 1 billion pact with Calstrs, the system of California’s $ 286.9 billion teacher pension.

Lennar House Builder Corp.

LEN.B 1.16%

announced a leasing business with investment firms including Centerbridge Partners LP and Allianz ALIZY 0.65%

SE to which it and potentially other builders will supply over $ 4 billion worth of homes.

Madison Realty Capital has switched to leasing with clients who previously focused on developing owner-occupied apartment and subdivision buildings. On Thursday, he closed a $ 110 million loan on a project in Los Angeles, where 220 of the nearly 700 home sites are sold to investors. The initial plans, derailed by the real estate crash, did not contemplate any rentals.

“A lot of things that would have been homes for sale are going to be homes for rent,” said Josh Zegen, general manager of Madison.

Bruce McNeilage began building rental homes around Nashville, Tenn., In 2005. After the real estate crash, his Kinloch partners expanded to other Southeast markets, returning occupied rentals to larger investors. .

Kinloch was funded primarily by community banks in towns where he rehabilitated foreclosures and built rentals. These days Kinloch can borrow much more from Walker & Dunlop Inc.,

DEO 3.34%

a commercial real estate lender forging in suburban rentals. Mr. McNeilage’s problem is that others are bidding on houses and lots.

“I am locked up,” he said. “There are too many people chasing things and they are willing to pay too much. It’s silly money right now.

Selling entire neighborhoods to investors is exemplified by the Amber Pines at Fosters Ridge subdivision in Texas.

What you need to know about investing

Write to Ryan Dezember at ryan.dezember@wsj.com

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


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South African rand firmer ahead of cenbank interest rate decision http://ibelarus.net/south-african-rand-firmer-ahead-of-cenbank-interest-rate-decision/ http://ibelarus.net/south-african-rand-firmer-ahead-of-cenbank-interest-rate-decision/#respond Thu, 25 Mar 2021 07:00:00 +0000 http://ibelarus.net/south-african-rand-firmer-ahead-of-cenbank-interest-rate-decision/

JOHANNESBURG, March 25 (Reuters)The South African rand strengthened on Thursday, as investors awaited the results of a central bank monetary policy meeting later in the day, where the regulator is expected to leave its policy rate unchanged.

At 0610 GMT, the rand ZAR = D3 traded at 14.9275 against the dollar, 0.35% firmer than its previous close.

Wednesday’s data showing consumer price inflation in February fell below the central bank’s 3-6% target range did little to change market expectations that the Monetary Policy Committee ( MPC) from the central bank will no longer cut interest rates, keeping the rate at 3.5%.

“Local markets have traded cautiously over the week so far, with the rand’s short-term price action being somewhat

confusing for market participants at both ends of the price brackets, ”Nedbank analysts said in a note.

“This scenario is likely to continue before the MPC,

despite the consensual expectation of an unchanged decision. “

Emerging market central banks have come under increasing pressure in recent weeks amid rising global yields, weakening currencies and mounting inflationary pressures, with policymakers in Brazil, Russia and Turkey announcing a hike. surprise cumulative rate of 300 basis points last week.

This is in addition to signs that an easing cycle in emerging market central banks that began in 2019 and was the longest easing cycle since the 2008 financial crisis and the 2010 euro crisis. – could come to an end.

South Africa’s economy contracted 7.0% last year despite the Reserve Bank’s cumulative 300 basis point cut in Reserve Bank interest rates to counter damage from pandemic-induced lockdowns .

In fixed income, with the yield on the benchmark government bond due 2030 ZAR2030 = was up 4.5 basis points to 9.485% in early trades.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Rashmi Aich)

((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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With negative rates, homeowners in Europe are paid to borrow http://ibelarus.net/with-negative-rates-homeowners-in-europe-are-paid-to-borrow/ http://ibelarus.net/with-negative-rates-homeowners-in-europe-are-paid-to-borrow/#respond Thu, 25 Mar 2021 07:00:00 +0000 http://ibelarus.net/with-negative-rates-homeowners-in-europe-are-paid-to-borrow/

LISBON — Paula Cristina Santos has a dream mortgage: the bank pays for it.

Its interest rate fluctuates, but right now it’s about minus 0.25%. Thus, each month, Ms. Santos’ lender, Banco BPI SA, deposits interest on the mortgage of 320,000 euros, equivalent to approximately $ 380,000, into her account, which she took out in 2008. In March, she paid received about $ 45. She still pays the principal of the loan.

Ms Santos’ upside down relationship with her lender began years ago when the European Central Bank cut interest rates below zero to revive the continent’s fragile economy amid a crisis of sovereign debt. The negative rates have helped everyone get cheap financing, from governments to small businesses. It encouraged households to borrow and spend. And he broke the basic rule of credit, allowing banks to owe borrowers money.

Ms. Santos’ case was supposed to be rare and almost over now. After the ECB cut interest rates below zero in 2014, eurozone economies improved and expectations were that rates would rise in a few years. But the coronavirus pandemic has changed all that.

As economic hardship continues in Europe, negative rates persist and they are falling. As a result, more and more borrowers in Portugal as well as Denmark, where interest rates turned negative in 2012, find themselves in the unusual situation of receiving interest on their loans.

“When I took out the mortgage, I never imagined this scenario, and neither did the bank,” said Ms. Santos, a 44-year-old business consultant.

Deco, a Lisbon-based consumer rights group that estimated in 2019 that rates turned negative on more than 30,000 mortgage contracts in Portugal, said the figure has likely more than doubled since then.

Many European borrowers have variable rate mortgages tied to benchmark interest rates. Like most people in Portugal, Ms. Santos’s is tied to Euribor, which is based on the cost of borrowing European banks from each other. It pays a fixed rate of 0.29% in addition to the three-month Euribor rate. When she took out the mortgage in 2008, the three-month Euribor was close to 5%. It has declined in recent months and is now near a record low, at minus 0.54%.

Portuguese state-owned company Caixa Geral de Depósitos SA said around 12% of its mortgage contracts currently carry negative rates. The number of these contracts increased by 50% last year, according to a person familiar with the matter. Ms Santos’ bank, BPI, said it had so far paid € 1 million in interest on mortgage contracts to an undisclosed number of customers.

Spain, where most mortgages are also linked to Euribor, faced a similar situation. But the country has passed a law that prevents rates from dropping below zero. Portugal did the opposite, passing a bill in 2018 that requires banks to reflect negative rates.

“In the event that the fall in interest rates exceeds the mortgage spread, the client would not pay interest, but under no circumstances [would the bank] pay in favor of the borrower, ”said a spokesperson for Banco Bilbao Vizcaya Argentaria HER,

BBVA 1.40%

one of the largest lenders in Spain.

There are no official figures available on the number of mortgages currently with zero interest rates in Spain. The banks refused to disclose their figures.

In Denmark, more and more borrowers have seen their rates go negative, although in most cases they are still paying their banks because of administrative fees.

There, mortgage loans are not financed directly by the banks, which do not set the conditions. Instead, they serve as a type of intermediary, selling bonds to investors at a specific rate, lending the same amount to the borrower for the same rate.

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Nykredit, Denmark’s largest mortgage lender, said more than 50% of its loans with an interest period of up to 10 years have a negative interest rate before fees. This proportion increases because mortgage rates tend to be adjusted every few years.

This is the case of Claus Johansen, 41, who works in the mortgage department of Nykredit. In 2016, he took out a five-year variable rate mortgage for DKK 1.2 million, or about $ 190,000, to buy a house north of Copenhagen. Its interest repayments for the first five years were set at 0.06%. In January of this year, the rate was revised to minus 0.26%, which is subtracted from the 0.6% administration fee he has to pay to the bank.

“It’s strange, but negative rates have been around for so many years that we’ve gotten used to them,” Johansen said.

A setback for borrowers receiving interest from their lenders is that banks in Denmark and elsewhere have started charging customers for their deposits, claiming they can no longer absorb the negative rates their central bank charges them. Mr Johansen said he was keeping his account balance below the threshold at which his bank would start charging him.

In Lisbon, Ms Santos said that while it is great to receive interest from her bank, its overall situation is no better as BPI has sharply reduced the interest it was offering on its corporate deposit account these days. past years, to near zero, about 3%. His plans to buy a new home are on hold as BPI now charges a much higher spread on new mortgages, to avoid falling back into the negative rate trap.

“We wanted to get out of the city center, but it’s hard to leave such a great mortgage deal behind,” Ms. Santos said.

The US mortgage market involves some key players who play an important role in the process. Here’s what investors need to understand and what risks they take when investing in the industry. WSJ’s Telis Demos explains. Photo: Getty Images / Martin Barraud

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


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Economic recovery in the United States and rising fuel prices force Brazil to raise rates http://ibelarus.net/economic-recovery-in-the-united-states-and-rising-fuel-prices-force-brazil-to-raise-rates/ http://ibelarus.net/economic-recovery-in-the-united-states-and-rising-fuel-prices-force-brazil-to-raise-rates/#respond Wed, 17 Mar 2021 07:00:00 +0000 http://ibelarus.net/economic-recovery-in-the-united-states-and-rising-fuel-prices-force-brazil-to-raise-rates/

SÃO PAULO — Brazil on Wednesday became the first major economy to raise interest rates this year, a harbinger for other developing countries that may be forced to increase borrowing costs and put in danger their fragile economies.

The central bank’s decision to raise its policy rate to 2.75% from its all-time low of 2% comes as inflation hit a four-year high in Latin America’s largest economy in a context of weakening currency and sharp rise in fuel prices. On top of that, Brazil records nearly a third of all daily Covid-19 deaths globally.

Economists say the tightening of monetary policy in Brazil underscores the risks to emerging markets, many of which have dire prospects compared to developed countries. A strong recovery in the United States drives up long-term bond yields, prompting more investors to buy dollars at the expense of emerging market currencies. This could lead other developing countries to raise their interest rates to stem capital outflows, stifling the economic rebound these countries are counting on.

Brazil’s currency has depreciated by around 10% against the dollar over the past three months as investors pull their money out of riskier markets that got into debt during the pandemic, pushing consumer prices higher as imports become more expensive. Rising oil prices, driven by a strong recovery in Asian demand, also pushed up fuel costs in Brazil, which helped push inflation up to 5.2% in February, near the peak of the central bank target range.

“The global monetary backdrop is changing, and as it always does, unfortunately the most vulnerable economies are the ones that need to respond,” said Alberto Ramos, Goldman Sachs economist. “Brazil falls squarely into this category. “

Brazil is by far the largest emerging market to have raised interest rates in recent months. Ukraine’s central bank surprised economists this month by tightening monetary policy to fight rising inflation. Turkey sharply raised its benchmark interest rate in November and is expected to raise rates again on Thursday as inflation rises.

The sharp rise in US bond yields in recent weeks has awakened memories of the ‘taper tantrum’ of 2013 when US government bond yields rose sharply after the Federal Reserve said it was considering cutting back on buying of bonds, sending shock waves around the world.

A pedestrian street in São Paulo was nearly empty on Monday hours before a nighttime curfew in São Paulo state aimed at controlling the Covid-19 pandemic.


Photo:

miguel schincarol / Agence France-Presse / Getty Images

The result was a widespread decline in emerging market equity and bond prices and a weakening of emerging market currencies. Some central banks have raised their key interest rates in response, fearing that a sharp drop in their currencies will make it difficult to repay US dollar debts, weaken their financial systems and push inflation up.

This year, the Institute of International Finance, which represents banks, warned that a repeat of the taper tantrum was possible if US bond yields rose too quickly as emerging markets experienced a capital outflow.

In Brazil, growth projections are being stifled by an upsurge in coronavirus infections. As of Tuesday, 2,841 deaths were recorded and health officials expect the number of daily deaths to continue to rise.

This has forced authorities to implement new restrictions on businesses, as President Jair Bolsonaro faces growing anger over his handling of the pandemic.

Mr Bolsonaro has long played down the health risks of the pandemic as he sought to protect the economy by opposing lockdowns and rolling out one of the developing world’s largest stimulus packages. Brazil’s gross domestic product contracted 4.1% in 2020, a much smaller drop than in the rest of Latin America.

But economists say the president’s minimization of the health risks of the pandemic backfires as the economy crumbles and support for Mr Bolsonaro crumbles. A Datafolha poll released on Tuesday found that 54% of Brazilians believe its handling of the pandemic has been bad or very bad, up from 42% in December.

Selma Marconi, a 59-year-old retiree in São Paulo, said she had to cut spending to pay for rising food prices. And she deplores the management of Mr. Bolsonaro.

“It really messed up the economy,” Ms. Marconi said. “I no longer buy products based on the brand, I only look at the price. “

Hopes of quickly ending a pandemic that has killed an estimated 280,000 people here are eroding as government efforts to get enough vaccines collapse. Jason Vieira, chief economist at Infinity Asset Management in São Paulo, said: “The pandemic is hitting hard and we are begging to buy vaccines.

Mr Bolsonaro’s office declined to comment, but Brazil’s health ministry has defended the federal government’s performance, saying it has provided “unrestricted support” to states, cities and the Federal District to fight the pandemic.

The pandemic is forcing Brazil to increase public spending after last year’s stimulus package pushed national debt to record levels, raising concerns about the fiscal position.

Congress approved a new round of emergency household payments last week. Although lower than the cash payments made to millions of families last year, the payments are seen as another driver of inflation.

Investors are also concerned about efforts to control inflation through greater government intervention in the economy. In February, Mr Bolsonaro appointed an army general to replace the managing director of state-controlled oil producer Petrobras after the current market-friendly CEO ignored the president’s criticism of price increases .

Economists say the only way to turn the tide is to stop the spread of the deadly virus. “The best fiscal policy is to vaccinate the population quickly,” Bruno Funchal, Brazilian Treasury chief, told the O Globo news agency.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Ryan Dube at ryan.dube@dowjones.com

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bne IntelliNews – Multinationals under pressure to sever ties with Belarus http://ibelarus.net/bne-intellinews-multinationals-under-pressure-to-sever-ties-with-belarus/ http://ibelarus.net/bne-intellinews-multinationals-under-pressure-to-sever-ties-with-belarus/#respond Mon, 15 Mar 2021 07:00:00 +0000 http://ibelarus.net/bne-intellinews-multinationals-under-pressure-to-sever-ties-with-belarus/

International multinational corporations are under increasing pressure to sever their trade relations with Belarus as opposition leaders apply a “name and shame” campaign in their fight to oust incumbent President Alexander Lukashenko.

German heavy engineering firm Siemens and Norwegian agricultural firm Yara have found themselves in the crosshairs in recent months, as both have significant business with Belarus.

Since the end of February this year, Siemens has been caught up in what the German press has called a “shit storm” after German Chancellor Angela Merkel made the English word popular in German after using it in a public speech. Last year.

Siemens has come under relentless criticism online for its ongoing business with Brestenergo, a regional utility company. Siemens enjoys massive activity in Eastern Europe which depends almost entirely on its supply of turbines which are not produced anywhere in the region for power plants.

Social media such as Facebook have been inundated with comments in English, German and Russian such as: “Stop cooperation with dictator Lukashenko! “,” Do not support violence and torture in Belarus! “,” The contract with Brestenergo is fucked up money. “

German bank Commerzbank has been hit by a similar protest campaign, albeit to a lesser extent, as it also has business with Belarus. Commerzbank participated in the loan to facilitate the supply of gas turbines manufactured by the Swedish company Siemens Industrial Turbomachinery AB to the Belarusian state-owned company Brestenergo. The deal was reached in February, although no official announcement was made. Belarusian activists found out about the deal and launched a protest accordingly, reports German public media Deutsche Welle.

Belarus has been rocked by mass protests since last year’s protest August 9 presidential elections, which were massively falsified, and saw Lukashenko return to power by a landslide, according to official results. According to independent observers, the elections were in fact won by opposition leader Svetlana Tikhanovskaya, who now lives in exile in Lithuania.

The opposition has already succeeded in forcing the International Ice Hockey Federation (IIHF) to cancel plans to hold the ice hockey world championship in Minsk this year, after protests angered the event’s sponsors, who threatened to withdraw their support.

Car maker Skoda, a wholly-owned subsidiary of Germany’s Volkswagen, cosmetics company Nivea Men, and motor oil and automotive chemicals maker Liqui Moly all announced in January that they were canceling their championship sponsorship, fearing reputational repercussions following the outbreak of violence. in Minsk last summer.

Part of Siemens’ business in Belarus is supplying turbines to the new nuclear power plant in Ostrovets (aka Astravets) which was built and funded by Russia last year and went into full production at the beginning of this year.

Tatiana Manenok told DW that “Siemens won the tender [to supply turbines] before the events of August and the political crisis. It was a good choice; it is the world’s leading manufacturer of this type of equipment. “

The first turbines were delivered in December and a second batch should be delivered in March, work on the second nuclear unit is underway. In total, Belarus has ordered 16 gas turbines in addition to the Ostrovets advance, which will be delivered to Brestenergo.

Lukashenko has invested heavily in Belarusian power generation capacity in the hope of weaning the country from Russian gas imports and also in an effort to make a little more money from electricity exports to neighbors. Westerners of the country: in January Belarus exported more electricity to the Baltic States and Ukraine than it did in 2020, as temperatures plunged just as Ostrovets entered the line.

More equipment orders could be underway after the Almaty-based Eurasian Development Bank (EDB), which is partly owned by the Belarusian government, signed an agreement with Minskenergo in the Belarusian capital to open a long-term credit line in the amount of € 101.2 million to finance the supply of part of the turbines ordered from Siemens.

EDB, which was formed as a joint venture between Russia, Kazakhstan and Belarus to invest in things like infrastructure, funded its line of credit by raising funding from German state-owned banks KfW IPEX Bank and Landesbank Hessen-Thüringen (Helaba), while the loan was provided by the Swedish National Export Credit Agency (EKN). All these institutions are now in the crosshairs.

The Commerzbank press service, in response to a request from DW to comment on the situation, noted that “the mentioned energy project serves to modernize the energy supply in Belarus and thus the energy security of the population”. In general, the bank does not operate in Belarus and focuses on financing German exports to that country, the Commerzbank press service told DW.

While the bank stressed that it had no direct contact with Belarus or the authorities, it stressed that “the EU has not imposed any sanctions on the supply of energy equipment to Belarus”.

Likewise, the Siemens press service insists that it is not breaking any law. The company “strictly follows, of course, all applicable national and international regulations and ordinances,” the company told DW. “We are, of course, watching very closely how people in Belarus demand more democracy and the current development of events.”

Belarus

The situation with Belaruskali, the Belarusian potash producer, is a little different, as it is a very large state-owned enterprise and one of the country’s cash cows.

Belarus is home to very large deposits of potash, one of the most efficient fertilizers. It exports a large part of its products to China, but is present as an important player in most of the world’s markets. Belaruskali sells over 10 million tonnes per year (tpa) of potash and claims to control 20% of the world market, making it one of the world’s largest fertilizer companies.

During the mass protests, some of the Belaruskali workers joined the general strike which began the first week after the elections and 50 were quickly sacked by the company or even arrested and harassed by the authorities. But in January, the management of the southern Minsk-based company announced what it described as a turnaround, saying it was ready to take back the striking workers.

It came after Yara, a Norwegian-based agribusiness giant, called on the Belarusian company to take back the laid-off workers and sent senior company officials to Belarus to make the point face to face with the leadership of Belaruskali.

Yara was pressured by Tikhanovskaya and others to stop doing business with Belaruskali in order to put pressure on the Lukashenko regime.

“Yara continues to engage and seek advice from stakeholders inside and outside Belarus to assess how this can have the most positive impact. Yara’s main concern remains health, safety and the welfare of Belarusian workers, ”Josiana Kremer said in an email. comments to RFE / RL, adding that the company has the support of independent Belarusian unions.

“In Belarus, Yara’s approach to seeking influence was supported by both the Belarusian Independent Trade Union (BITU) and the Belarusian Congress of Democratic Trade Unions (BKDP),” Kremer said.

The political crisis has already hurt the company’s operations, and Belarusian potash exports fell 16% year-on-year to $ 2.2 billion in January-November, Interfax reports, citing the country’s statistical service.

In total, more than 100 Belaruskali workers are said to have taken part in a strike. Dozens have been arrested and at least 55 have been fired, according to reports. In August, a strike leader in Belaruskali was sentenced to 15 days in prison, reports RFE / RL.

On January 20, Belaruskali said that workers who had been made redundant could return if they filed an application and that financial penalties imposed on employees as a disciplinary measure would be removed. He also said he was ready to cooperate with Yara on industrial safety and accept specialists from Yara to monitor the production process.

But while welcome, these concessions are small. Tikhanovskaya performed in October when she issued a “People’s Ultimatum” and called a general strike in hopes of causing intolerable economic pain and overthrowing the government. The strike was met with a lukewarm response and the gambit graded.

Nonetheless, the opposition keeps the pressure on and hopes to put pressure on Lukashenko by intimidating big companies that work with Belarus and making life in Minsk as hard as possible.

Belaruskali’s descent came nine days after Tikhanovskaya urged Yara chief executive Svein Tore Holsether “to consider suspending or not extending the contract with his Belarusian partner at this point.”

“It is crucial that Yara conditions the collaboration with Belaruskali unless the repressions of the workers cease,” Tikhanovskaya wrote in a letter to Holsether posted on his website on January 11, as quoted by RFE / RL.

The pressure on international companies is a continuation of the initial efforts to mobilize the international community to support the Belarusian people by the opposition leaders. Tikhanovskaya tirelessly traveled across Europe pushing for sanctions and support. While the EU imposed sanctions on Belarusian elite, including Lukashenko himself, with Russian backing, Lukashenko could easily ignore harsh rhetoric from Brussels.

More and more Tikhanovskaya and his colleagues from Coordination Council have slowly improved their game and are targeting the economic interests of Belarus. It means trying to cut the state’s export revenue.

“While Belaruskali management continues to intimidate workers, we believe that the signing of a new potash supply contract between Yara and her Belarusian business partner will not be seen as a sincere commitment to the guiding principles of the process. ‘UN on business and human rights, as stipulated in Yara’s internal regulations, “Tikhanovskaya wrote to Holsether.

Belaruskali did not say whether someone who was fired has actually returned to work. The Belaruskali strike committee has repeatedly stated that it will only return once its political demands have been met, including the resignation of Lukashenko.


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Can New Zealand payday lenders survive? http://ibelarus.net/can-new-zealand-payday-lenders-survive/ http://ibelarus.net/can-new-zealand-payday-lenders-survive/#respond Thu, 11 Mar 2021 05:28:08 +0000 http://ibelarus.net/can-new-zealand-payday-lenders-survive/

OPINION: Former British Prime Minister and sometimes storyteller Harold Wilson noted that “a week is a long time in politics”.

It’s a sentiment I guess Simon Bridges and Jacinda Ardern have some sympathy for as they’ve had to deal with a plethora of colorful issues lately, from renegade MPs to kickboxing drug dealers.

This is a sentiment that also applies to start-ups, albeit with a slightly longer lead time, normally. More like a year, according to a Harvard Business School study.

Coincidentally, a year ago, short-term online lender Moola placed second in the Deloitte Fast 50 Awards. This made it New Zealand’s second fastest growing and fastest growing tech company, growing 1013% in three years.

READ MORE:
* Complaints on the rise about expensive short-term lenders
* Short-term lender Moola under investigation over fees
* Google boycots payday loan ads

At the time, responses in the public forum were overwhelmingly favorable. A few pointed out that the company’s business model – where it offers up to $ 5,000 in cash loans in an hour – makes it an online Shylock.

However, most observers were enthusiastic about the “scalable business” which used technology to “advance unsecured loans” with “responsible lending policies” at its heart.

A year later, this responsibility is in question now that the Trade Commission has confirmed that it has opened a formal investigation into Moola.

Mike O'Donnell: "A year is a long time in business."

PROVIDED

Mike O’Donnell: “A year is a long time in business.

ComCom’s investigation focuses on whether Moola meets the criteria for responsible lending and whether the fees charged are reasonable.

“Reasonable” is a key concept here.

On Moola’s website, the company magnanimously points out that “when you see our annual interest rate, you might have a slight panic.” This is an understatement.

Short term Moola loans up to 44 days are charged at an interest rate of 620.5% per annum. Meanwhile, longer-term loans with terms of between two and four months are charged 328 percent interest.

It doesn’t seem super reasonable to me.

In fact, for the four month loan, it’s about 15 times what my very profitable credit card company charges me for a cash advance and about 25 times what they charge me for the interest rate of purchase.

A few weeks ago, I wrote a column about Trade Minister Kris Faafoi’s welcome review of the Consumer Credit, Contracts and Finance Act.

The exam cleans up much of the third level financial industry. In particular, it sorts out the bottom of this level, where providers are often seen not only as the lender of last resort, but as the sole lender.

The <a class=government targets third-tier lenders.” style=”width:100%;display:inline-block”/>

TOM PULLAR-STRECKER / FAIRFAX NZ

The government targets third-tier lenders.

The review recommends that interest and charges on personal loans be limited to 100% of the amount borrowed. For people like Moola, this will take the jam out of their business model.

At the time, I was of the opinion that one area the MBIE exam missed was the new generation of online buy it now and pay after services that were taking off in New Zealand and Australia. Services like Afterpay, Openpay and Zip Pay. Services which, in my opinion, still deserve to be covered by the updated law.

Since that time, a number of people have contacted me to tell me that these new services have eliminated the need for third-level lenders. Lenders like Moola.

This new type of finance provider is effectively providing an interest-free relief service; So, as long as you repay the money on staggered dates (normally four), you pay no interest.

Here, it is the merchant who pays for the service.

For retailers and service providers, this is a useful way to enable higher throughput and higher revenues for their businesses. And since the buyer is already on their website or store, they can apply their marketing expenses to cover the on-hold costs.

For the consumer, he benefits from a completely free credit, on condition of respecting the four repayment deadlines. And contrary to what I understood, these companies do a credit check before you can sign up.

In the case of Afterpay, this means that I can buy Christmas gifts for children from Hallensteins or health items from Kmart, although my salary may be out of step with my need for these products. But I have to make sure that I can meet the repayment dates or I will have late fees.

Meanwhile, unlike traditional money lenders who may require people to incur additional debt to pay off their loan, Afterpay immediately suspends a customer’s account if a payment is not made on time.

In other words, you can’t take on more debt and there is a cap on what you could end up paying. If you cannot swim safely between the flags, you are not allowed to continue swimming.

Another great quote from Harold Wilson was his scathing attack on the Liberal Party, where he said he offered a mix of healthy and original ideas, but sadly noted that none of the original ideas were healthy. The same may be true of the business model of the 200 third-tier financial firms in New Zealand.

That means there might be a little less this time around next year. After all, a year is a long time in business.

Mike “MOD” O’Donnell is a professional manager and advisor. His Twitter handle is @modsta and this column is his personal opinion.

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