David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores

    This article by AnneMaria Andriotis for the Wall Street Journal appeared in Yahoo Finance and may be of interest to subscribers. Here is a section:

    The state settlements already had prompted the credit-reporting firms to remove several negative data sets from reports. These included non-loan related items that were sent to collections firms, such as gym memberships, library fines and traffic tickets. The firms also will have to remove medical-debt collections that have been paid by a patient’s insurance company from credit reports by 2018.

    Such changes might help borrowers and could spur additional lending, possibly boosting economic activity. But it could potentially increase risks for lenders who might not be able to accurately assess borrowers’ default risk.

    Consumers with liens or judgments are twice as likely to default on loan payments, according to LexisNexis Risk Solutions, a unit of RELX Group that supplies public-record information to the big three credit bureaus and lenders.

    “It’s going to make someone who has poor credit look better than they should,” said John Ulzheimer, a credit specialist and former manager at Experian and credit-score creator FICO. “Just because the lien or judgment information has been removed and someone’s score has improved doesn’t mean they’ll magically become a better credit risk.”


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    Zara Owner's Margin Shrinks to Eight-Year Low on Currencies

    This article by Rodrigo Orihuela for Bloomberg may be of interest to subscribers. Here is a section:

    Inditex put greater emphasis on online expansion last year, cutting its target for new brick-and-mortar stores. The retailer is also making changes to some of its brands to gain market share, with the most recent example being February’s foray into men’s clothing by the Stradivarius brand, which has focused on women.

    After starting online sales in Singapore and Malaysia this month, the company plans to add such services in Thailand and Vietnam in the next few weeks and also in India this year.

    “India is a very attractive market for us,” Isla said on a conference call with analysts. This year Zara will open a 5,000 square-meter flagship store in Mumbai, which will be its largest store in the country. Inditex has 21 stores in that market.


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    SNP Leftist Vision for Scotland Will End In Tears

    It’s not exactly great timing: on the very same day that Nicola Sturgeon called for another Scottish referendum, the price of oil tumbled again, falling to a fresh three month low.

    Given that Scottish nationalism is still predicated on the idea of using petrodollars to fund a big welfare state, this is bad news for the movement to break up the UK. Politics isn’t just about economics, of course, but the SNP’s case for an independent, socialist Scotland is even weaker today than it was when it was last defeated in 2014.

    There is little hope of the price of oil recovering in a game-changing way any time soon. Brent crude futures were trading at under $51 a barrel at one point yesterday: the rush for shale in the US and other global forces have devastated Opec’s ability to keep prices high. The cartel, together with the likes of Russia, has been trying to cut back on output, but it’s all been for nothing. Prices are down by 8pc in a week, with more to come, and the US industry has been adding rigs for the past eight weeks in a row.

    This is good news for inflation and for consumers – Asda was one retailer that announced a 2p cut in the price of petrol and diesel yesterday, for example – but not for the SNP. Scotland’s budget deficit was already a crippling 9.5pc of GDP in 2015-16, roughly as bad as the UK’s was at the height of the financial crisis. Thanks to the rest of the country’s generosity, the devolved government is able to get away with spending far more than the economy could possibly afford – yet Sturgeon is committed to more of the same, forever. Public spending per capita in Scotland was £12,800 in 2015-16, compared with £11,500 for the UK.

    The sums don’t add up - and if Scotland were to retain either the pound or adopt the euro, it wouldn’t even be able to print money to pay the bills. Sturgeon, like Jeremy Corbyn and the political left across the UK, still believes in the myth of the magic money tree. She still thinks that, post-independence, she would simply be able to click her fingers to conjure up the vast subsidies her government currently receives from England. It’s preposterous, dangerous nonsense, as is the view that Scotland would be able to tap the EU for massive transfers instead. Scotland is relatively wealthy by global standards and Brussels will find itself facing a fiscal crisis after the UK, a key net contributor, leaves.

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    Nicola Sturgeon Timing: A Cynical Ploy to Take Advantage of Brexit Uncertainty

    The risk that Scotland would leave the UK was one of the main reasons I voted Remain last June, despite my lack of enthusiasm for many aspects of the European Union. Entirely predictably, in both Scotland and Northern Ireland, an attempt to pull the UK apart as we negotiate our exit from the EU has now begun.

    There can be no going back on the decision nevertheless taken by the British people as a whole to leave. But the Government will now have to fight a war on two fronts, with each making an impact on the other. Every time EU negotiators warn there might be no deal or complain of British intransigence, they will be adding grist to the mill of the Scottish nationalists. And with each demand for special treatment for Scotland, those nationalists will weaken the ability of UK ministers to maintain tough positions that will lead to the best deal for the whole of the United Kingdom.

    Nicola Sturgeon’s speech on Monday morning showed that she has identified the seizing of this moment of extreme pressure on the Westminster government as the one best hope of destroying the UK. It also demonstrated that she will use any argument to achieve her ends – even complaining that Scotland faces ‘‘the prospect of a centralisation of power at Westminster’’ when the Scottish parliament has in fact acquired major additional powers, some of which it has not even used.

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    China H-Shares Advance as Industrial Output Rises, Inflows Climb

    This article from Bloomberg News may be of interest to subscribers. Here is a section:

    China’s industrial output and fixed-asset investment beat estimates for the first two months of the year, adding to recent data suggesting that the nation’s economic recovery is holding up. Depreciation pressures on the yuan have prompted Shanghai investors to buy Hong Kong stocks as well, with net southbound purchases in the past eight sessions rising to 9.8 billion yuan ($1.4 billion). The odds of a Federal Reserve interest-rate increase this week have climbed to 100 percent.

    “The market is extending a rebound after some consolidation in the past two weeks and as mainland funds continue to pile in to hedge against the risk of yuan depreciation after a possible Fed rate hike," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.


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    Email of the day - on vapes and e-cigarettes

    Hope you are keeping well.

    We are getting loads of orders for Vape labels at the moment and talking to other guys in our industry they are all getting the same - we are talking millions of labels. The industry is seriously expanding, at this time it appears to be multi small to medium players but there must be some serious money to be made somewhere!

    The label, bottle, liquid etc. can't come to more than £1.50 so potential profit is there.
    I know you've probably already had a look but thought I'd mention it!


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    Self-Employed? This Government is Determined to Punish You

    Here is the opening of this topical column by Janet Daley for The Telegraph - note; there have been several different titles for this article.  I have used a slightly shortened version of the original title from the newspaper's printed edition:

    Let’s stop pretending that the storm over Philip Hammond’s Budget and the self-employed is all about white van men. Not that I have anything against white van men. We have a clutch of faithful local tradesmen who have come out to rescue our household from disasters so often that they are now cherished family friends. Indeed, our actual extended family includes a cohort of white van men.

    But the issue at hand is about a huge range of vocations and occupations which do not involve spanners. As well as all the self-employed creative types I listed on this page last week — writers, artists, actors and musicians — there are the IT consultants, the web designers and the digital start-ups leading the technological revolution.

    And then there are the artisan bakers, the small farms reviving traditional British cheeses, and the mothers who create kitchen table businesses so they can work from home instead of being economically idle: all those innovative ventures which have introduced such vitality into the work culture. These are the people the Chancellor has chosen to clobber.

    The Chancellor has attacked enterprise

    Let’s not pretend either that this is only about putting up National Insurance contributions. That is only one front in what is clearly an organised campaign against the self-employed and small business owners who are among the most productive, self-reliant and progressive in the true sense of the word (meaning “encouraging progress”) participants in the workforce.

    There is a pattern here which it is now impossible to miss. The two measures I wrote about last week — the introduction of quarterly tax returns and the effective abolition of the flat-rate Vat system — are going to be devastating. The first of these is deranging and apparently pointless: in future, all self-employed individuals and small businesses will be required to file four income tax returns per year instead of one. These will have to be done digitally using specially designated software. This will, of course, quadruple their accountancy charges at a stroke and require access to online facilities.

    Even more damagingly, this change will oblige them to pay income tax at the end of each quarter rather than, as now, in one or two yearly instalments.

    So if your business is seasonally affected: if you have a healthy quarter (say, in the run-up to Christmas if you produce gifts, or the summer if you are a gardener), you will not be able to spread the cash flow from that good period to cover the fallow one that follows. It will not be possible any longer to even out your good and bad times over the course of the year.

    Of course, your next quarterly return will reflect the loss of business and your tax payment will be adjusted but that will take three months or more to come through. By that time, as almost anyone who runs on a tight margin will know, you could either have gone broke or found it necessary to borrow more to remain afloat.

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