| BNZ picks strong spending figure
The Bank of New Zealand is predicting strong retail spending for September when the figures are released on Thursday. Spokesman Craig Ebert says the market is looking for a 0.6 percent increase in sales, but the BNZ expects the rise to be as much as 1.4 percent, because of strong key indicators it has already spotted. He says credit card billings and EFTPOS transactions were both unusually strong. However, Mr Ebert says the headline result could be overstating the true pulse of consumer spending, because there was an element of 'catch-up' from a very flat June-August quarter. And he says there are signs household budgets are getting squeezed, with mortgage rates going up and the housing market flattening out. .
BI warns of higher consumer loan risk
The central bank has warned of a rising risk from consumer loans amid the recent rise in total bank lending, which has already exceeded its 22 percent growth target for this year and is expected to add another 25 percent next year. Bank Indonesia director for banking research and regulations Halim Alamsyah said Monday more consumer loans could face default if household income weakens, with banks themselves facing regulatory constraints to resolve the potential bad debts. "We've noticed an increase in the non-performing loan (NPL) level of consumer loans, particularly from credit cards," Halim said at a financial stability discussion. "And banks cannot simply write off these bad debts, as this has regulatory implications regarding their financial reporting and taxation." Halim did not elaborate on the current NPL level in the consumer sector, but according to data from Bank Indonesia, as of the end of September it reached Rp 8.7 trillion (US$950 million) -- or 3.2 percent of total consumer loans.
Guest column: Keep a kit ready for disaster survival and recovery
At 4:16 a.m. on Monday, Oct. 22, we were awakened by a reverse 911 call warning all residents to evacuate our neighborhood in Escondido, Calif. The view from our master bedroom deck confirmed that the wildfires posed a real threat. This would be the third time California wildfires caused us to evacuate. In 1996 and again in 2003, the process of getting ourselves and our pets out of the house and to safety was nothing short of chaotic. Our first experience in 1996 was viewed as an isolated event. But the catastrophic fires of 2003 told us it could happen again—and last month, it did! However, the difference between the events of 1996 and 2003 is we were prepared. Without hesitation, we immediately put our disaster plan in motion. Nothing was left to chance: within those 30 minutes, my wife and I — along with our 9-year-old grandson, three dogs, two cats, two rats and a parakeet along with several days' supply of water, people and pet food, and other survival gear — were headed out of harm's way on a predetermined escape route to the home of our daughter and son-in-law, 25 miles to the west.
Card fees soar in Britain as credit crunch deepens
LONDON: Liquidity woes in financial markets are feeding through to consumers, who are being hit with stiffer credit card fees or being refused credit altogether.
In the past two months, there have been no fewer than 125 fee and rate increases in Britain�s credit card market, according to personal finance Web site Moneyfacts.Couk, as the credit crunch takes it toll.
It raises new fears that overstretched consumers could struggle to service existing debt, leading to further increases in personal insolvencies, already at a record high.
The worries come as Bank of England Governor Mervyn King said banks could take several more months to reveal the full extent of their losses, following news of more write-downs relating to US subprime mortgages.
This side of the Atlantic, cash withdrawal charges have borne the brunt in the consumer sector, with 69 credit cards hiking fees for withdrawing cash and 25 increasing the interest rate charged on the funds.
S. GURUMURTHY
The text book rule tells us that interest rate cut leads to two consequences. First, it dampens the saver and excites the spender, so that bankers mourn and traders celebrate. The second consequence is subtler. Cut in interest, tells the text, impedes only interest-rated savings, but, it nourishes risk-bearing savings through stock markets. It needs no seer to say how it happens. Disgusted with poor returns through low interest, savers take higher risks for better yield. In effect, low interest turns a saver into an entrepreneur! So when interest rates are cut, the stock broker joins the party with the trader. The text thus convinces us that fall in interest rate has the potential to promote savings and also spending simultaneously! Low interest may trigger inflation if demand outstrips supply, warns a footnote.
South Africa: Retail to Show If Rates Are Biting
RETAIL sales figures will provide insight this week into whether higher interest rates have curbed consumer spending, the main engine of economic growth. But they are unlikely to have much effect on the Reserve Bank's monetary policy decision next month, given its focus on the deteriorating inflation outlook. .
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