August 7, 2016

The Markets

Here’s a brain tickler for you:

In July 2016, there were four.
In June 2016, there were 10.
Since 2008, there have been 673!
What are they?

If you guessed central bank rate cuts, you are on the money. Financial Times reported:

“In the eight years since the collapse of Lehman Brothers, the world’s top 50 central banks have, on average, cut rates once every three trading days…Despite a modest global recovery, central banks have barely had any time to breathe since the summer of 2008 – carrying out mass asset purchases and entering into negative rate territory. Britain’s decision to leave the EU, coupled with political instability across Europe, still subdued inflation, and concerns over Chinese indebtedness, have spurred central banks back into action.”

The latest downward adjustment came last week when the Bank of Japan took its key interest rate into negative territory, reported CNN Money. Negative rates are intended to promote bank lending and consumer spending.

The stimulus package that accompanied the BOJ’s rate cut was more subdued than many had expected. The Wall Street Journal said the less-than-robust stimulus prompted speculation the central bank had “run up against the limits of monetary policy” and bank leaders wanted to see more robust fiscal policy introduced by Japan’s government.

The United States has been pursuing a different course of action. The Federal Reserve has been raising rates; however, it left rates unchanged last week. More rate cuts may be ahead elsewhere, though. The Bank of England is expected to cut rates next week.

The Best (and Worst) States to Retire

The envelope please! Every year, Kiplinger’s publishes a list of the best and worst states for retirees. The publication considers the share of each state’s population that is age 65 or older, as well as average income, average cost of living, and average healthcare costs for older Americans (relative to the national average). The economic health of each state and its citizens, and the taxes imposed on retirees also are considered.

For 2016, the best states for retirees include:

  1. South Dakota
  2. Utah
  3. Georgia
  4. Tennessee
  5. Alabama
  6. South Carolina
  7. Washington
  8. Florida
  9. Arizona
  10. Idaho

The worst states for retirees include:

  1. New York
  2. New Jersey
  3. California
  4. Connecticut
  5. Illinois
  6. Massachusetts
  7. Rhode Island
  8. Montana
  9. Vermont
  10. Wisconsin

Interestingly, taxes weren’t the most important factor in determining the states where retirees might be happiest. Just four of the most tax-friendly states in the nation made the list of best places to retire. Utah, Tennessee, Alabama, South Carolina, and Washington were all in the tax friendly category, while Idaho fell into the mixed group.

Weekly Focus (Amen to this One)

“If a country is to be corruption free and become a nation of beautiful minds, I strongly feel there are three key societal members who can make a difference. They are the father, the mother and the teacher.”
-A. P. J. Abdul Kalam, Former President of India

Image courtesy Ken Teegardin used in accordance with the Creative Commons ShareAlike 2.0 Generic license.

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