European Union To The Rescue

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Like a knight in shining armor the European Union rode in with a loan package that with the support of the International Monetary Fund could reach one trillion dollars or if you prefer 750 billion euro's. This loan package is further supported by the European Central Bank wish indicated they would buy both government and private debt bonds.

World markets rose sharply with the news of this rescue package and most currencies either stabilized or showed marked increases.

Now for the bad news, Money Magazine Hoss questions the wisdom of loaning more money to already cash poor countries as a way to make that country or countries more solvent. Only a change in financial philosophy can accomplish this. For example Greece has about one third of there citizens on the government payroll. It is time for this to stop. The Governments of the weaker economic countries must implement strong and realistic cutbacks or this bailout plan will eventually fail.

Money Magazine Hoss and millions of other families around the world manage to successfully create household budgets that enable them to survive in tough economic times, why can't governments do the same?

However, maybe this crisis will wake people up to the fact that there is no free ride, we must all contribute as best we can, so that all our societies can survive and prosper.

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Euro Hits a Fourteen Month Low
European Financial Crisis Deepens

European Financial Crisis Deepens

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Money Magazine Hoss is alarmed by the deepening financial crisis in Europe. The Euro is under serious attack and slummed to a 14 month low last week following its biggest weekly decline since Oct. 2008 (4.3%).

On a positive note European finance ministers are meeting in Brussels today to tackle this problem head on. Among those attending are Belgium finance minister Ddier Reynders, Luxembourg finance minister Luc Frieden,Austrian finance minister Josef Proell,French economy minister Christine Lagar ,Swedish finance minister Anders Borg, Dutch Finance minister Jan Kees de Jager, British finance minister Alistair Darling,Finnish finance minister Jyrki Katainen and Spanish economy minister Elena Salgado.

It is clear that this European financial crisis has had negative impacts on the world wide financial markets. Even the Group of Seven finance ministers (Canada, France, Germany, Italy, Japan, United Kingdom, and United States) held an emergency conference call following which they urged their European counterparts to adopt a clear, timely and strong response.

The bond markets in Greece, Portugal and Spain are under serious pressure as interest rates continue to rise.The problem here of course is that unlike North American countries which have individual currencies the Euro is spread over many countries and therefore Countries like Spain, Portugal and Greece cannot devalue their currency to stabilize their economy. They must rely on aid from their Euro counterparts. For example, to date nine countries have signed off on a 110 billion-euro aid package for Greece. But what happens in Greece if this aid package falls apart. Germany (the largest contributor to the aid package) had to overcome a court challenge, which fortunately, was rejected by Germany's highest court.

Money Magazine Hoss hopes today's conference in Brussels will have the desired effect and calm the financial markets, last weeks huge swings are not easy on one's blood pressure.

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Euro Hits a Fourteen Month Low

Euro Hits a Fourteen Month Low

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Despite assurances from European Central Bank President Jean-Claude Trichet, Greece's continuing financial crisis has sparked fears that they just might be forced to default on their sovereign debt.

In order to obtain 110 billion euros in loans over three years from eurozone countries and the International Monetary Fund the Greek government agreed to increase taxes and cut spending.

In Athens protesters rioted over some of the Government's announced measures which included cuts to civil servants and retirees 13th and 14th month bonus pay; an additional three years for pension contributions; and the retirement age for women will be raised to 65.

At the Marfin bank police reported that two women and one man died when the bank caught fire after rioters threw Molotov cocktails inside. More were injured and taken to safety and treated for their injuries.

President Carolos Papoulias insistence that the measures were necessary for Greece's survival did not stop the unions from holding a general strike and protests.

World markets did not take kindly to this unrest as virtually all the major markets lost ground.

While The Hoss supports a persons or groups right to protest they must do so peacefully. The killing of innocent people is not acceptable.

These incidents in Greece should not be taken lightly similar instances could occur in the other areas under financial stress such as Spain not to mention a possible spread to North America and Asia. Let's hope that world leaders unite and solve this world economic mess before it is too late.

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United and Continental Merger

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United and Continental announced a merger agreement on May 3, 2010. The combined organization will serve 370 destinations around the world. Currently there are minimal domestic overlap routes and no international route overlaps. Together these two airlines serve more than 140 million passengers and fly to 370 destinations in 59 countries.

Sounds great right? However, upon closer look The Hoss discovered that both have been losing a substantial sum of money. Continental's 2009 losses were reported at $282 million and for the same period United reported losses of $651 million.

According to their press release the United, Continental merger is expected to result in a net annual savings of $1 to $1.2 billion by 2013. So what does this mean to the customer? Will we receive cheaper air fares, will baggage charges be dropped? Don't count on it. The only commitment the airline executives would make was that airfares would be governed by market demand. What that really means is we will charge you as much as the traffic will bear. We should all be thankful for low cost airlines such as Southwest, JetBlue, AirTran and in Canada West Jet. Their low cost tickets help keep the major air lines in check.

The Hoss has a suggestion for the name of the merged airline, Con U Air. First ad campaign will be you fly free and in small print each bag costs $500 two bag minimum.

By now you may have guessed The Hoss is a little skeptical that this merger will be of any benefit to the airline traveler. After all what benefit did we see with the merger of Delta and Northwest?

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Health Care Reform 2014 and Beyond

The Hoss apologizes for the delay in his final posting on Health Care Reform.

Mrs. Hoss's business required that we convert one of the stalls in the family barn (our house) into an office. Although Mrs. Hoss does the vast majority of the work the Hoss must be around to run for supplies, prepare the occasional meal and once in a while provide some actual labour.



Now, back to the health care reform timeline and the changes to take place in 2014 and beyond.

• If you do not have acceptable coverage in 2014 you will pay a fine of $95.00. This will increase to $325 in 2015, $695 in 2016 or a maximum of 2.5% of family income). Penalties will be indexed to the Consumer Price Index after 2016. Note: There will be a cap of $2,250 per family and the charge per child is half the required amount.

• Workers who don’t qualify for tax credits and who are exempt from individual responsibility can join an exchange plan by using their employer contribution.

• A fine of $2000 per employee will be imposed on companies with 50 or more employees who do not offer coverage to employees, if at least one of their employees receives a tax credit. The is per employee after the first 30. The maximum waiting period before insurance takes effect is to 90 days. Employers with employees receiving a tax credit will pay $3,000 for each worker receiving a tax credit.

• Health insurers are prohibited from charging higher premiums due to health status, gender or other reasons. They cannot refuse coverage due to a pre existing condition or current health status. They cannot impose an annual limit on coverage.

• Small employers and individuals will be able to shop around for standardized health plans through health exchanges.

• People not eligible for or who cannot obtain acceptable coverage and whose income is above Medicaid eligibility and below 400% of the poverty level will receive credits through health exchanges.

• New funding will be provided to the States so that all nonelderly individuals Medicaid eligibility can be increased to 133 of poverty level.

• Health insurance companies whose total premiums are greater than $25 million will have to pay an annual health insurance provider fee based on the insurers' market share.

• In 2018 so called "Cadillac Plans" will pay an excise tax.

This concludes The Hoss's summary of the upcoming changes to health care. I hope you have found the information useful.

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Related Posts:
Health Care Reform 2013
Health Care Reform Year One
Health Care Reform Year Two 2011