Daily Archives: July 23, 2013 @ 1:56 pm (Tuesday)

Beer sales take a knock from payroll tax hike

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Now this is serious!

Beer sales take a knock from payroll tax hike

By Arjun Kharpal

July 23 (CNBC) — U.S. beer sales declined in the first half of 2013 fueled by the payroll tax hike and a jump in unemployment among young men, according to research published on Tuesday.

The beer market posted 1 percent growth in 2012, in-line with pre-recession averages, driving hopes that the worst was over for the industry.

But beer sales dropped 3 percent in the three months to May 2013 and are down 2.6 percent in the year to date, Bernstein Research analysts said in a note.

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Investors are moving out of housing

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Even at the right price, investing in single family houses to put them up for rent is a tough trade:

Investors are moving out of housing. Here’s why

By Diana Olick

July 22 (CNBC) — They swarmed the distressed housing market, buying thousands of foreclosed properties and pushing prices higher faster than anyone expected. Now investors are pulling back, dissuaded by the higher prices they themselves brought about.

“Perhaps the numbers aren’t working out,” said Lawrence Yun, chief economist of the National Association of Realtors, which reported that just 15 percent of June sales were by investors. That is the lowest share since the association began tracking this cohort in October 2008.

Current homeowners are now driving the housing market, as even investor traffic fell in June for the fourth straight month, according to Campbell/Inside Mortgage Finance. That could mean slower sales going forward, as still tight inventory keeps move-up buyers in place. That, and negative home equity.

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Consumption tax hike to make or break Abe’s reform plan

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Seriously!
:(

Here’s what could make or break Abe’s reform plan

By Dhara Ranasinghe

July 22 (Bloomberg) — If Japan’s Prime Minister Shinzo Abe, riding high on Sunday’s election victory for his ruling coalition, is serious about transforming the economy, it’s crucial that he pushes ahead with plans to raise a controversial consumption tax, analysts say.

The tax on goods and services, under the current law, is due to rise to 8 percent next April from 5 percent and to 10 percent in 2015, although there has been a heated debated within the government as to whether this should happen.

On the one hand a consumption tax is seen as a key measure to improving Japan’s fiscal health. Japan, the world’s third biggest economy, has a debt pile that is the highest among industrialized nations and its debt-to-GDP ratio is expected to top 245 percent this year.

But on the other hand, the tax could hurt consumer spending and stifle the economic recovery Abe is trying to engineer through a mix of fiscal spending and aggressive monetary stimulus.

“The decision on whether to raise the sales tax as early as next April is a finely balanced one with significant implications – both for the economy and for the perceived credibility of Abenomics,” said Nicholas Spiro, managing director at Spiro Sovereign Strategy.

“The last consumption tax increase in Japan ended in disaster, helping trigger a recession. Yet if Mr Abe puts it off, doubts about the fiscal credibility of his project will grow, potentially spooking the bond market,” he added

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