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Tag: counterintuition

Good News! Maybe?

Good News! Maybe?

​Here’s some Good News: Healthcare spending is expected to increase more slowly during 2016! It’s projected to grow by 6.5 percent this year, according to a report from PWC. That’s still a lot faster than inflation. The Economist projects overall consumer prices in the United States will increase by 1.2 percent this year.The report suggested several factors are contributing to lower healthcare spending, including:The Affordable Care Act’s Cadillac Tax. PWC reported the tax “…is motivating businesses to enact high cost-sharing….

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A Look Back at the Fourth Quarter

A Look Back at the Fourth Quarter

​Fourth quarter, a look back…The Federal Reserve pulled the trigger. At the December Federal Open Market Committee meeting, the Fed finally acted, tightening monetary policy by raising the funds rate from 0.25 percent to 0.50 percent. It’s important to remember the Fed doesn’t actually set interest rates. It takes actions designed to influence financial behaviors. The Fed has given rates a push, it remains to be seen whether its efforts will bear fruit.The European Central Bank (ECB) acted, too. Although,…

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Looking Back

Looking Back

​Looking back… Each week, ‘The Economist Explains’ blog expounds on subjects ranging from current events to economics, from philosophical or scientific issues to everyday oddities. Let’s take a quick look at a few of its headlines during 2015:Why the Swiss unpegged the Swiss franc (January 18, 2015). Remember when the Swiss National Bank removed its currency peg last January? The Swiss franc realized double-digit gains in value and the Swiss stock market dropped.Everything you want to know about falling oil…

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Second Guessing the Fed

Second Guessing the Fed

​Second guessing the Fed is an age old American pasttime. Americans have been speculating about the Federal Reserve’s monetary policy choices – rate hikes, rate declines, quantitative easing, etc. – for a long time. It’s clear when you take a look at a few modern Fed Chairs and the Fed’s activities under their leadership.Paul Volcker (1979-1987) took over an economic quagmire known as The Great Inflation. In the early 1980s, U.S. inflation was 14 percent and unemployment reached 9.7 percent….

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It Wasn’t Just About the Budget

It Wasn’t Just About the Budget

​ Last week, the bipartisan budget bill was signed into law, averting a U.S. default and deferring further battle over debt and spending levels until presidential and congressional elections are over, according to U.S. News & World Report.The new law includes provisions that CBS Money Watch said are likely to strengthen Social Security and Medicare by improving the programs’ finances. Since the provisions also have the potential to reduce benefits for some Americans, they may not prove to be all that…

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Rollover – Good Idea or Bad Idea?

Rollover – Good Idea or Bad Idea?

​It’s not always a good idea to rollover company stock from a 401(k) plan to an IRA. In fact, doing so might mean you pay more in taxes to Uncle Sam than necessary.If company stock held in an employer-sponsored 401(k) plan has appreciated, the difference between the amount paid for shares (the cost basis) and the current value of those shares is known as net unrealized appreciation (NUA). For instance, if an investor paid $10 a share for 1000 shares…

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First Laugh, Then Think

First Laugh, Then Think

​It’s official. the IGs are in. Ignoble is a word rarely heard in everyday conversation. Merriam-Webster defines it as meaning, “of low birth or common origin, or characterized by baseness, lowness, or meanness.”The 25th First Annual Ig® Nobel Prize Ceremony was held last week at Harvard University. Improbable.com reported, “Winners traveled to the ceremony, at their own expense, from around the world to receive their prizes from a group of genuine, genuinely bemused Nobel Laureates…” Winners completed research that made…

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The Big Picture

The Big Picture

​Are we seeing the big picture? It’s safe to say many people are worried about whether economic growth – in the United States and abroad – will be stifled by changing monetary policy in the United States. As a result, all eyes have been on the Federal Reserve, which is expected to begin raising the Fed funds rates sometime soon.However, the Federal Reserve’s monetary policy isn’t the only game in town. Fiscal policy – the actions taken by our government…

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From Abstract to Reality: The Potential Effects of Rising Rates

From Abstract to Reality: The Potential Effects of Rising Rates

When the economic data align, and the Federal Reserve pulls the trigger on tighter monetary policy, rising interest rates may affect everything from mortgage rates to bond yields to economic growth. Here are a few of the possible consequences: Higher demand for short-term bonds. When interest rates rise, bond values fall, and vice versa. However, changes in bond values will be influenced by the speed and magnitude of the rate change. A sharp increase over a short period would have…

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What Does the Future Hold?

What Does the Future Hold?

  It’s not stuff most of us think about every day, but we may soon be a lot more familiar with terms like brain organoids, megascale desalination, Internet balloons, liquid biopsies, and more. At least, that’s what the MIT Technology Review reported in Breakthrough Technologies 2015: “Not all breakthroughs are created equal. Some arrive more or less as usable things; others mainly set the stage for innovations that emerge later, and we have to estimate when that will be. But…

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