Personal bankruptcies in America

Every year, hundreds of thousands of Americans declare Bankruptcy (the inability or impairment of ability to pay their creditors). At 2009, almost one million and a half persons declared personal bankruptcies in the United States (200.000 only at California) Click on image to enlarge it.

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Meet the average american family....economicaly

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Current mortgage interest rates of the week: May 4th

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Current mortgage rates at United States of 4th week of May. Click on the image to enlarge it:




Now, we'll bring you the current mortgages rates of every week at Economy Lessons. Come every Wednesday to see them. And, of course, every day of the week to read daily news about economy and business

May interest rates:

Current mortgage rates of the week: May 3rd

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Current mortgage rates of the week: May 3rd

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Current mortgage rates at United States of 3rd week of May. Click on the image to enlarge it:


Now, we'll bring you the current mortgages rates of every week at Economy Lessons. Come every Wednesday to see them. And, of course, every day of the week to read daily news about economy and business


May interest rates:

Current mortgage interest rates of the week: May 4th

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HP unstoppable: Net income growth of 28% in Q1

Hewlett-Packard Co.'s, first computer company, remains unstoppable even in crisis, as their numbers prove it

Global crisis... competitors... nothing seems to be able to stop the computer's giant company Hewlett-Packard (or HP). Dived in crisis, Hewlett-Packard manages to not only save itself, but to experience an impressive growth. HP increased a 28% its net income the firsts quarter of 2010. Not expected by anyone, surpassed the most optimistic forecasts.

But how HP increased their benefits?

Besides of (a needed) high quality product, HP not limited himself to computers and started an aggressive expansion into more profitable areas, such as technology services and computer networking. More areas to 'fish', more profit, says the theory. And HP numbers.

HP numbers

- When Tuesday 18 marked closed, HP earned $2.2 bn, 91 cents per share. The same period one year ago, HP earned 'only' $1.7 bn, 71 cents per share. An improvement.

- HP earned $1.09 per share (excluding special items), when analysts expected $1.05 per share.

- Revenue increased 13% to $30.8 bn. Analysts expected $29.8 bn. In the same period one year ago, HP's revenue was $27.4 bn

HP's forecast

For this present year, HP expect a profit of $4.45-4.50 per share without special items.

Future of HP is to expand. Right now, the company acquired Palm Inc (smart-phone pioneer) for $1.4 in a bid to expand HP's small mobile business. Also, acquired 3Com Corp for $2.7.

HP's intentions is not limit only to computers, but expand to other related markets. And, if they keep the same path, they'll surely succeed

Read Also: The Seattle Times - HP net income jumps 28 pct; raises 2010 outlook

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Top 5 economic news, May 10-16 week, 2010

May 10rd - 16th week most important economics news compilation:

1) Greece Considering Legal Action Against U.S. Banks for Crisis

Greece is considering taking legal action against U.S. investment banks that might have contributed to the country’s debt crisis, Prime Minister George Papandreou said this 16th Sunday.


2) Schwarzenegger’s Budget Addresses Few Structural Issues

Proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor, Gov. Arnold Schwarzenegger on Friday outlined a stark vision of a California that would sharply limit aid to some of its poorest and neediest citizens.

His $83.4-billion plan would also freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs. State parks and higher education are among the few areas the governor's proposal would spare.

3) A rise on US retail sales and employment, boost American hope

Retail sales rose by 0.4% in April, following an increase in March of 2'1%, said Commerce Department. April was the seventh month in row to have a retail sales increasing, making possible believe that the trend will keep in same direction.

The figures have increased hope that consumer spending, which accounts for two thirds of the US economy, will keep the recovery on track in coming months.

4) Growth, rate worries drive euro near 4-year low

The euro slid to a 19-month low of $1.2355 in late trading in New York, close to what would have been the lowest point in four years against the dollar.

Economists said the tumbling euro could reflect fears that the European debt crisis will turn into a replay of the Lehman Brothers disaster. The collapse of the New York investment bank in September 2008 spread panic through the financial system. Credit froze as a result.

5) Toyota miracle: $2.2 billion profit in 2009

After a year of security issues, global crisis and more, Toyota managed to made a profit of $2.2/€1.73 bn in 2009. Despite the global crisis, a series of recalls that brought a lack of trust on the company, even fines from U.S. government, Toyota managed to made a profit of $2.2 bn in 2009, and $1.2 bn on Q1, a breath of fresh air after 2008, when the company lost $4.73 bn.

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Goldman Sachs: All you always wanted to know ... and a little more

Goldman Sachs company is at everyone's mouth. But what we REALLY know about the company? Is true or false what papers, radios, televisions, say about them? What you don't know? How much is Goldman's revenue? And assets? Know all you always wanted to know and much, much more about Goldman Sachs. Just relax, click, and read:

Click to enlarge. Source: Visual Economics

Also, you can read more about the same topic at our related articles.

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A rise on US retail sales and employment, boost American hope

With an increase of US retail sales and hiring, American people should have hope on the future.

Total retail sales rose by 0.4% in April, following an increase in March of 2'1%, said Commerce Department. April was the seventh month in row to have a retail sales increasing, making possible believe that the trend will keep in same direction.

James Cox, managing partner at Harris Financial Group in Virginia said that "This adds to a string of data we have received indicating that consumer spending is improving".

The figures have increased hope that consumer spending, which accounts for two thirds of the US economy, will keep the recovery on track in coming months.

US economic growth at first stage had been driven by business replenishing inventories. Now, the tendencies has changed, being more important the consumer spending, which accounts for two thirds of the US economy.

Also, motor vehicle purchases rose 0.5% in April, 6.7% in March. Remember the importance of motor sales: Show us important information about consumer spending trends, and the direction of the recovery o deterioration economy, as we said when we explained the Light Weight Vehicle Sales recovery in America.

On the working side, hiring has been increased too, specially manufactures: Industrial production rose 0.8% in April, surpassing economist's forecast of 0.6%.

As consumer spending, manufacturing hiring plays a leading role on the economic recovery, as manufacturing factories increased hiring, with 44,000 new jobs in April.

Of the 44,000 new jobs, most hiring belonged to heavy manufacture like metal products, machinery, electrical and electronic equipment, and food, paper and plastic products.

If you're eager to read more about this topic, you can read more about why is so important the Motor vehicles sales in America or about the first steps of United States recovery one month ago.

And, of course, we want to know your opinion, so comment!

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Euro Currency: Current state of the Euro at 2010

Visual Economics offer us today, an analysis of the past, present and future of the Euro currency. Click on the image to see the adaptation of the Euro currency since its start at 31 Dec, 2001, how evolved and Euro's weakening towards US Dollars:


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Welcome to the Euro, Estonia...or not?

Estonia meets currency's rules to adopt Euro currency, will they?

A fast-growing economy, free trade and a currency board for the ex-soviet Baltic country, gained the possibility to use the Euro. An increase of 14'1% Estonian GDP in 2009 proves that they deserve it. Some economists expected a devaluation of the Estonian economy but didn't happen: Flexible wages and prices gave to the country a sense of stability instead

While countries are near of bankrupt, Estonia, as well as Sweden, meet the requirements to use Euro currency. Why should they then, don't use it? That's why Commission gave Estonia the green light to adopt Euro at 2011.

• Estonian numbers

Why Estonia meets European requirements? What are the numbers behind Estonian economy?

- Low inflation, 0.7% at 2009, compared to the 1% benchmark.

- One of the smaller national debt of EU, 7.2% of GDP.

- In the middle of a crisis, exportations are expected to grow a 1%.


So, in 2011, we'll say 'Hi!' to Estonia

Read Also: The Economist Share

UK: Interest rates raise, a feared and expected forecast

14 months in a row without a single change on the 0'50% British interest rates, how much UK Economy will resist?

At May, the interest rate was unchanged for 14 months in a row, as today 12 May, the Bank of England confirmed it. That means UK kept their target of an interest rates below 2%. Experts don't expect that this norm will break in less than one year, as minimum.

Reuters 'probed' economists about their opinions about the future of the UK economy:

Click to enlarge. Source: Reuters

As we can see, the interest rates will keep below 2% until later Q4, on 2011. Forecasts also expect the start of the change of interest rates will start at Q3, 2010.

Ok, we know now that Bank Of England wouldn't start to increase interest rates until Q3 2010, but why is so important that interest rates keep as low as possible?

• Importance of low Interest Rates

Low Interest rates is a sign of a healthy economy: Borrowing is cheap, so companies can spend more, as well as consumers. On the other hand, high interest rates slow economic growth, as borrowing turns more expensive, so companies and consumers spend less, as high rates makes harder an profit.

Also, higher interest rates tends to stay on banks as saving, rather than invest in the stock markets.

Same goes for government bonds: A higher interest rate means more to pay yearly, less attractive to the investors.

Therefore, higher rates are sign of bad news in the short term. Keep them as low as possible, makes investors eager to spend, increasing the economic growth.

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Taxing wages: Single vs Married wages

To encourage or discourage population growth, different countries apply differents tax policies to ease the 'burden' of having children.

Luxembourg and Switzerland have the highest overall net income and the highest average gross wage. South Korea, Turkey and Poland families has almost no benefit, and Mexico has no benefits at all (Probably, because the average family has 2.4 children and Mexican government wants to cut it down) .

Click to enlarge. Source: Economist.com

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Toyota miracle: $2.2 billion profit in 2009

After a year of security issues, global crisis and more, Toyota managed to made a profit of $2.2/€1.73 bn in 2009.


'When dark times come, only the strongest will stand', how many times we heard this? Well, Toyota proves that's true. Despite the global crisis, a series of recalls that brought a lack of trust on the company, even fines from U.S. government, Toyota managed to made a profit of $2.2 bn in 2009, and $1.2 bn on Q1, a breath of fresh air after 2008, when the company lost $4.73 bn.

This is "still in a tough storm, but we are starting to see some sun on the horizon" Toyota President Akio Toyoda said.

But let's see the numbers:

• Toyota recalled 10 million of its cars due security issues (More info: Toyota suspends temporally Lexus GX 640 sales to United States and Toyota again faces safety concerns and recalls 600,000 Sienna minivans )

• Net revenues (Gross revenue minus returns and other negative revenue) decreased 7.7% compared to 2009, but thanks to cost-cutting measures, Toyota is profitable.

• Vehicles sales for 2009 totaled 7.24 mn units, 330,000 less than 2008. While at United States and Europe, sales fell 114,000 and 204,000 (remember safety issues), sales were up by 292,000 units

Toyota's secret of exit is a change of his market, retreating from Europe and United States to sell at the 'secure' Asia and cost cutting measures. This, even Toyota recalling 10 mn of its cars due safety concerts about accelerator pedal and a $16,4 fine from the U.S. government, built a safe present and future for Toyota automobile company.

Toyota's future

Toyota mid-long term plans are focus on green cars. Other companies are starting to produce hybrid models, just like Ford plant at Almussafes, València.

Toyota also, will expand to emerging markets like China and India in 2011.

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Toyota suspends temporally Lexus GX 640 sales to United States Share

European Economy: Weak growth for 2010-2011, according to an IMF forescast

While euphoria fades over Euro rescue, IMF sees a timid, small recovery of European markets.

International Monetary Fund sees a growth on European economy that will pick up in 2010, 2011 period, thanks to the €750 bn ($975 bn) bailout suggested yesterday, and an increase of EU exports.

In addition to calling for a stronger fiscal framework, the IMF report raised questions about the long-term sustainability of fiscal stimulus programs.

The bad news came today, after the unexpected worldwide increase of stock markets ( Yesterday Indexes ), Euro set foot on the ground and fell down to $1.267, down from $1.28 in Monday.

On June 4, German parliament will debate about Eurozone rescue. Sticky situation, as the country is divided."We cannot have a monetary union without an economic union", said EU Commission President Jose Manuel Barroso, who suggested a "More coordinated Europe"

FT's Lex Columnist, Vicent Boland, speaks on Bloomberg about €750/ $962 bn European help aid:

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Another rescue package: 750 bn to extinguish the flames of Greece

European ministers plan a €750 bn aid to strengthen the European economy.


Today, May 10, European ministers of economy and Ecofin ( Economic and Financial Affairs Council ) have agreed another 'rescue package' for Europe. This package will help to stop the currently spread of Greece crisis to other European countries (and non-European too), as bailout to countries heading to bankruptcy. On the other hand, the states with economy issues will commit to accelerate the public debt decrease.

This agreement was signed after eleven hours of conversations between 27 ministers, and EU will contribute with €500 bn while IMF will contribute with €250 bn, making a total of €750 bn ($975bn) to attend Eurozone countries, specially Spain and Portugal.

European Central Bank would buy public debt to stabilize markets, also.

Obama asked Angela Merkel and Sarkozy (Germany and French PMs) to take measures to stabilize markets and build trust.

Even this package will be activated in "some weeks", generated enough 'hype' to lead a great recovery of worldwide stock market, as you see below. Let's hope isn't just, 'hype'.

Click to enlarge. Font: CNN

Will last longer the good run thanks to the stability of a 'money cushion' or not? Comment it.

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Top 5 economic news, May 3-9 week, 2010

May 3rd - 9th week most important economics news compilation:

1) Wall Street: Dow Jones stocks fall nearly 10 pct

Due a (so-called) computer error, Dow Jones lost almost 1,000 points in less than 15 minutes. Later, Dow Jones recovered and finally 'only' lost one third of the original lose, almost 300 points. And the computer error wasn't a 'computer' mistake, but human one.

2) U.S Federal Reserve opens credit line to Europe

U.S. Federal Reserve, among some banks (Bank of Canada, European Central Bank, etc...) , are involved in dollar swap effort to help European economy. In this dollar swap, dollars are shipped to European Union through foreign central banks and, in turn, these central banks lends the dollars to countries that are in need of dollar funding to stabilize EU.

3) Greek €110 bn bailout arrives

Finally. 'rescue package' arrives at Greece. Would be enough to stop Greek crisis? Or will it spread further, damaging Europe?

4) Global globalization, global crisis

Global stock markets have dropped due Greece crisis, halting global economy recovery.

5) 12 Russians miners killed, dozens missed

Not related to economy, but an important and sad one. Two explosions at the largest underground coal mine at Raspadskaya, Russia, killed 12 miners and 83 were trapped inside. Poor safety standards, probably the cause of the incident.

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Average pay of U.S. jobs 2009 (And, surprisely, Obama is on 1% top)

Kiplinger using U.S Bureau of Labor Statistics, sorted different jobs of American landscape. Here are some highlights:

- U.S poverty line is located at $10,830/year, for a single-person household. Under this line, lives 39.1 million people, a 12.65%.

- The real median household income in 2008, according to the U.S. Census Bureau.

- U.S.Minimun wage is $15,080.

- A laundry / dry cleaning worker earns $19,945 every year.

- A construction worker, $28,520.

- Registered nurse is the profession projected to account for largest number of new jobs between 2008 and 2018 due Obama's healthcare.

- Postal Service Mail Sorter is the profession projected to account for third-most lost jobs between 2008 and 2018.

- Obama's (or any U.S president) base salary is $400,000, President of a United States Public University $436,111. Of course, Obama's earnings aren't limited to his base salary, as he earns every year over $5 million, in diverse ways.

Click to enlarge

Click to enlarge

Also, you can meet the Average American Family

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Chinese economy sky-rockets: Sales in rural areas increases 510%

China started a subsidy program in February 2010 to increase Chinese rural areas. This program, while help poor rural areas, far away from malls and big supermarkets, increases the Chinese consumption and China economic growth, while Europe and United States still struggles to recover from their crisis.

And worked. More than expected. While the subsidy only covers 13% of total price, rural consumption increased.... a 510%! But let's discover how works.

• Main points of China's subsidy

- Aimed to: Chinese families living in rural areas. The average rural Chinese family earnings are based in farming or works related to farming.

- Subsidy: Chinese government subsidy covers 13 percent of the price of some home appliances.

- Home appliances covered: Television sets, mobile phones, computers, air conditioners, water heaters, washing machines and kitchen appliances as micro-wave ovens, ovens and refrigerators.

- Government, seeing the exit of this operation, added another six items: Electric bikes, DVD players, smoke exhaust ventilators, gas stoves, pressure cookers and electric cookers.subsidy.

• Results?

Results were better than expected. While an increase of rural China purchases was expected, results are that the increase, in numbers, are more than 500%.

- Between January-April period, Chinese bought 20.84 millions sets of subsidized home appliances. 370% more than the same period at 2009.

- In April alone, 4.8 millions sets were sold, 170% more than 2009 April.

- Chinese economy ministry's website said total sales of subsidized appliances surged 510 percent year-on-year to 41.7 bn yuan ( €4.81 bn, $6.13 bn) during the period..

- Top sold appliances: Tv sets and refrigerators in January-April period totaled 3.2 bn yuan each. Computers 1 bn yuan, according to China's government.


This way, Chinese government increases sales, while Chinese rural areas families life quality multiplies and labor saving appliances give more time to do more productive work at factories, farms and offices, increasing the whole income of China.

Because labor saving appliances will free up workers to do more lucrative work at factories and in offices and increase the income of the country.

No one wonders why Chinese economy is increasing.

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Chart: Light Weight Vehicle Sales recovery in America

After a recession at US, Autos and other Light Trucks show a sign of slight recovery. Even that, there is room to improve and we're experiencing just the start of an America economic recovery (we hope).

Click to enlarge. Font: Economic Research

• Why is so important?

Motor vehicle sales are a big part of American population spending, like at others first world countries, and can show us important information about consumer spending trends, and the direction of the recovery o deterioration economy.

So, an increase of the light weight vehicle sales, means an increase of the American families savings and, therefore, potential spending.

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