Today the world has gone Obamaniac.
The newswires are all talking about the US election. While most publications tending to favour Obama The Dispatch weighs in with a story that Obama may not be the best choice for South Africa. Under the previous US dispensation the African Growth and opportunity Act (AGOA) turned the US into our largest international market buying up 12.1% of our exports.
This was by exempting 98% of our products from import duties. McCain has published that he would support the AGOA while Obama has remained luke-warm on it.
At the end of the day the impact of who ever gets in will be felt down here. Justmoney reckons that getting a savings account is going to help your finances regardless of the new US policy dispensation.
In the Business Report today the lead story is a recession warning, comparing a recent commodity price plunge to the recession that the US entered in 1981 with Ronnie Reagan. Opinion was that this is a recession and that it is likely to last at least 16 months.
The commodity price index in the past has been a reliable indicator of whether the US economy is in a recession or not. Justmoney says you should compare banks and find one that won't take all your savings in charges while you wait for the world to turn.
Related to this here in South Africa the Business Report goes further to comment on the PMI or purchasing managers index, which has fallen in sync with the price of commodities. This index measures how much manufacturing is expected, when it contracts so does our manufactured output. When we make less it is generally because less people can afford to buy, this is a strong signal of a slowing economy.
In a final Business Report story they look at how there should be some very good deals to be found amongst all the financial fall out. SA companies are seen in the article as predators rather than prey. Even though the cost of credit is sky high there are a lot of opportunities for robust companies to buy strategic assets. There should also be a measure of consolidation in some sectors as less stable firms get bought out. The downturn is the time to start spending money, so click here for investments.
In other publications iAfrica carried a story by Cees Bruggemans the chief economist at FNB. He was of the opinion that we would have a soft and safe recession that despite the global backdrop would be shallow and turn early next year and would be supported by a series of rate cuts. Justmoney likes rate cuts, but until then while don't you consider consolidating your debt via your home loan?
The Times reports that the Standard Bank median house price index fell 2.5% year on year, leaving it flapping around with out any wind in its sails. The problem is apparently in the fundamental drivers of the market, such as interest rates and the levels of disposable income around.
These underlying factors are not expected to improve until the second quarter of next year. However opinion is widely varied apart from that everyone thinks it will get better, but only sometime next year.In the meantime if you are having serious problems with your debt you should consider debt management, which will allow you to protect your assets during the squeeze.