Money Talk: Beware Of Greeks Bearing Fed Rate Hikes

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BEWARE OF GREEKS BEARING FED RATE HIKES
In its highly-watched third quarter global market outlook, Russell Investments warns of market volatility based on the Fed’s first interest rate hike during the Obama administration and whether or not Greece will stay in the Eurozone.

“Financial markets are transfixed by two upcoming events: the negotiations around the Greek bailout and the timing of the first interest rate increase by the U.S. Federal Reserve (the Fed). Will Greece stay in the euro? And will Chairperson Yellen announce the first Fed rate rise in nine years?” writes Andrew Pease, head of global investment strategy at Russell.

Pease concludes: “We expect a September rate hike and that Greece will stay in the eurozone—but there is a large amount of uncertainty around both events. Markets hate uncertainty, which points to rising volatility.”

To view Russell’s entire report, click here.

SEC PROPOSES CLAWBACK POLICIES ON EXECUTIVE COMPENSATION
The Securities and Exchange Commission has proposed rules directing national securities exchanges and associations to establish listing standards requiring companies to adopt policies that require executive officers to pay back incentive-based compensation that they were awarded erroneously. With the proposal, the Commission has completed proposals on all executive compensation rules required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the proposed new Rule 10D-1, listed companies would be required to develop and enforce recovery policies that in the event of an accounting restatement, “claw back” from current and former executive officers incentive-based compensation they would not have received based on the restatement. Recovery would be required without regard to fault. The proposed rules would also require disclosure of listed companies’ recovery policies, and their actions under those policies.

STATE CLOSES OUT FISCAL YEAR UP $191 MILLION
Arkansas finished its fiscal year with a $191.6 million surplus and more than $6.47 billion in gross tax collections. Gross general revenues were up 3.7% above last year and 1.1% above forecast. Read more on the category breakdowns at this link.

REPORT: CREDIT CARD DEBT AT LOWEST LEVEL SINCE 1990
Total household debt in the U.S. was $13.512 trillion at the end of 2014 and credit cards accounted for 6.52% or $881.57 billion, according to the annual report on credit card debt in the U.S. published by The Nilson Report.

The ratio of credit card debt to household debt was highest in 1996 at 10.05%.
Credit card debt accounted for 26.58% of total consumer credit at the end of 2014, the lowest level of card debt to total consumer credit since 1990, when it was 29.42%, said David Robertson, publisher of The Nilson Report. Card debt was highest in 1997, when it was 40.95% of consumer credit, he said.

Total U.S. household debt of $13.512 trillion in 2014 was up $341.70 billion from $13.170 trillion at year-end 2013. The average debt for each of the 123.2 million U.S. households at year-end 2014 was $109,650. One year before the average household debt was $107,549.

Mortgage debt (and select other loans) of $10.195 trillion in 2014 increased by $123.3 billion in 2014. Credit card debt increased by $38.23 billion, while total consumer credit grew by $218.40 billion. For a complete copy of The Nilson Report, click here.

STATE REGULATORS APPROVE NEW INSURANCE PROVIDER
Arkansas Insurance Commissioner Allen Kerr announced last week that Western National Mutual Insurance Company (WNIC) has been approved to do business in the state of Arkansas:

“After completion of AID’s review, I am pleased to grant WNIC a Certificate of Authority to issue surety and fidelity products in Arkansas. Our state is open for business, and welcoming WNIC to Arkansas is another step forward in the Insurance Department’s commitment to being pro-business and pro-producer while still fighting for consumers,” Kerr said.

WNIC is the parent company of the Western National Insurance Group with over 110 years of experience serving policyholders’ property and casualty insurance needs. Domiciled in Minnesota, WNIC currently writes surety business in 25 states.