September 24, 2017, 7:49 am
Facebook iconTwitter iconYouTube iconGoogle+ icon
1 Philippine Peso = 0.07205 UAE Dirham
1 Philippine Peso = 2.19737 Albanian Lek
1 Philippine Peso = 0.03473 Neth Antilles Guilder
1 Philippine Peso = 0.33883 Argentine Peso
1 Philippine Peso = 0.02472 Australian Dollar
1 Philippine Peso = 0.03508 Aruba Florin
1 Philippine Peso = 0.03924 Barbados Dollar
1 Philippine Peso = 1.60624 Bangladesh Taka
1 Philippine Peso = 0.03223 Bulgarian Lev
1 Philippine Peso = 0.0074 Bahraini Dinar
1 Philippine Peso = 34.03414 Burundi Franc
1 Philippine Peso = 0.01962 Bermuda Dollar
1 Philippine Peso = 0.02647 Brunei Dollar
1 Philippine Peso = 0.13537 Bolivian Boliviano
1 Philippine Peso = 0.06149 Brazilian Real
1 Philippine Peso = 0.01962 Bahamian Dollar
1 Philippine Peso = 1.26104 Bhutan Ngultrum
1 Philippine Peso = 0.20051 Botswana Pula
1 Philippine Peso = 392.78006 Belarus Ruble
1 Philippine Peso = 0.03919 Belize Dollar
1 Philippine Peso = 0.02419 Canadian Dollar
1 Philippine Peso = 0.01905 Swiss Franc
1 Philippine Peso = 12.25231 Chilean Peso
1 Philippine Peso = 0.12921 Chinese Yuan
1 Philippine Peso = 57.14342 Colombian Peso
1 Philippine Peso = 11.22072 Costa Rica Colon
1 Philippine Peso = 0.01962 Cuban Peso
1 Philippine Peso = 1.81263 Cape Verde Escudo
1 Philippine Peso = 0.42857 Czech Koruna
1 Philippine Peso = 3.49225 Djibouti Franc
1 Philippine Peso = 0.12231 Danish Krone
1 Philippine Peso = 0.92211 Dominican Peso
1 Philippine Peso = 2.19774 Algerian Dinar
1 Philippine Peso = 0.25715 Estonian Kroon
1 Philippine Peso = 0.34589 Egyptian Pound
1 Philippine Peso = 0.45831 Ethiopian Birr
1 Philippine Peso = 0.01644 Euro
1 Philippine Peso = 0.03953 Fiji Dollar
1 Philippine Peso = 0.01454 Falkland Islands Pound
1 Philippine Peso = 0.01447 British Pound
1 Philippine Peso = 0.08679 Ghanaian Cedi
1 Philippine Peso = 0.87895 Gambian Dalasi
1 Philippine Peso = 174.63213 Guinea Franc
1 Philippine Peso = 0.14311 Guatemala Quetzal
1 Philippine Peso = 3.97705 Guyana Dollar
1 Philippine Peso = 0.15314 Hong Kong Dollar
1 Philippine Peso = 0.45756 Honduras Lempira
1 Philippine Peso = 0.12286 Croatian Kuna
1 Philippine Peso = 1.19973 Haiti Gourde
1 Philippine Peso = 5.08986 Hungarian Forint
1 Philippine Peso = 260.48656 Indonesian Rupiah
1 Philippine Peso = 0.0688 Israeli Shekel
1 Philippine Peso = 1.27132 Indian Rupee
1 Philippine Peso = 22.89582 Iraqi Dinar
1 Philippine Peso = 658.62271 Iran Rial
1 Philippine Peso = 2.10712 Iceland Krona
1 Philippine Peso = 2.56229 Jamaican Dollar
1 Philippine Peso = 0.01388 Jordanian Dinar
1 Philippine Peso = 2.20489 Japanese Yen
1 Philippine Peso = 2.02178 Kenyan Shilling
1 Philippine Peso = 1.3433 Kyrgyzstan Som
1 Philippine Peso = 79.4585 Cambodia Riel
1 Philippine Peso = 8.05435 Comoros Franc
1 Philippine Peso = 17.65745 North Korean Won
1 Philippine Peso = 22.18972 Korean Won
1 Philippine Peso = 0.00592 Kuwaiti Dinar
1 Philippine Peso = 0.01609 Cayman Islands Dollar
1 Philippine Peso = 6.67785 Kazakhstan Tenge
1 Philippine Peso = 162.84088 Lao Kip
1 Philippine Peso = 29.53698 Lebanese Pound
1 Philippine Peso = 2.99588 Sri Lanka Rupee
1 Philippine Peso = 2.29351 Liberian Dollar
1 Philippine Peso = 0.26015 Lesotho Loti
1 Philippine Peso = 0.05981 Lithuanian Lita
1 Philippine Peso = 0.01217 Latvian Lat
1 Philippine Peso = 0.02654 Libyan Dinar
1 Philippine Peso = 0.18329 Moroccan Dirham
1 Philippine Peso = 0.34501 Moldovan Leu
1 Philippine Peso = 1.00647 Macedonian Denar
1 Philippine Peso = 26.68236 Myanmar Kyat
1 Philippine Peso = 48.14597 Mongolian Tugrik
1 Philippine Peso = 0.15773 Macau Pataca
1 Philippine Peso = 7.0826 Mauritania Ougulya
1 Philippine Peso = 0.65097 Mauritius Rupee
1 Philippine Peso = 0.30135 Maldives Rufiyaa
1 Philippine Peso = 14.05376 Malawi Kwacha
1 Philippine Peso = 0.34969 Mexican Peso
1 Philippine Peso = 0.08232 Malaysian Ringgit
1 Philippine Peso = 0.2598 Namibian Dollar
1 Philippine Peso = 6.92564 Nigerian Naira
1 Philippine Peso = 0.58623 Nicaragua Cordoba
1 Philippine Peso = 0.15332 Norwegian Krone
1 Philippine Peso = 2.01197 Nepalese Rupee
1 Philippine Peso = 0.02683 New Zealand Dollar
1 Philippine Peso = 0.00755 Omani Rial
1 Philippine Peso = 0.01962 Panama Balboa
1 Philippine Peso = 0.06369 Peruvian Nuevo Sol
1 Philippine Peso = 0.06268 Papua New Guinea Kina
1 Philippine Peso = 1 Philippine Peso
1 Philippine Peso = 2.06494 Pakistani Rupee
1 Philippine Peso = 0.07028 Polish Zloty
1 Philippine Peso = 111.25171 Paraguayan Guarani
1 Philippine Peso = 0.07269 Qatar Rial
1 Philippine Peso = 0.0755 Romanian New Leu
1 Philippine Peso = 1.13354 Russian Rouble
1 Philippine Peso = 16.2576 Rwanda Franc
1 Philippine Peso = 0.07357 Saudi Arabian Riyal
1 Philippine Peso = 0.15204 Solomon Islands Dollar
1 Philippine Peso = 0.2669 Seychelles Rupee
1 Philippine Peso = 0.13067 Sudanese Pound
1 Philippine Peso = 0.15655 Swedish Krona
1 Philippine Peso = 0.02649 Singapore Dollar
1 Philippine Peso = 0.01455 St Helena Pound
1 Philippine Peso = 0.43567 Slovak Koruna
1 Philippine Peso = 147.14538 Sierra Leone Leone
1 Philippine Peso = 10.928 Somali Shilling
1 Philippine Peso = 402.77613 Sao Tome Dobra
1 Philippine Peso = 0.17167 El Salvador Colon
1 Philippine Peso = 10.10359 Syrian Pound
1 Philippine Peso = 0.2598 Swaziland Lilageni
1 Philippine Peso = 0.64921 Thai Baht
1 Philippine Peso = 0.04791 Tunisian Dinar
1 Philippine Peso = 0.0432 Tongan paʻanga
1 Philippine Peso = 0.06876 Turkish Lira
1 Philippine Peso = 0.13239 Trinidad Tobago Dollar
1 Philippine Peso = 0.59217 Taiwan Dollar
1 Philippine Peso = 43.90818 Tanzanian Shilling
1 Philippine Peso = 0.51422 Ukraine Hryvnia
1 Philippine Peso = 70.57092 Ugandan Shilling
1 Philippine Peso = 0.01962 United States Dollar
1 Philippine Peso = 0.56582 Uruguayan New Peso
1 Philippine Peso = 158.34804 Uzbekistan Sum
1 Philippine Peso = 0.19569 Venezuelan Bolivar
1 Philippine Peso = 445.73278 Vietnam Dong
1 Philippine Peso = 2.0155 Vanuatu Vatu
1 Philippine Peso = 0.04907 Samoa Tala
1 Philippine Peso = 10.773 CFA Franc (BEAC)
1 Philippine Peso = 0.05297 East Caribbean Dollar
1 Philippine Peso = 10.75142 CFA Franc (BCEAO)
1 Philippine Peso = 1.95017 Pacific Franc
1 Philippine Peso = 4.90386 Yemen Riyal
1 Philippine Peso = 0.25991 South African Rand
1 Philippine Peso = 101.81479 Zambian Kwacha
1 Philippine Peso = 7.10025 Zimbabwe dollar

Consumer debt growth can’t outpace wages

By James Saft

US consumers are taking out debt at a far faster rate than their incomes or the economy are growing, and just as we may be hitting a peak in employment.

Add in rising interest rates courtesy of the Federal Reserve and you have the consumer sector - 70 percent of the US economy - treading on thin and thinning ice.

U.S. consumers have run up over $1 trillion on credit cards, hitting a level not seen since January 2009 and up 6.2 percent from a year ago. For comparison, wages are up less than 3 percent and the economy is growing just under 2 percent a year.

Borrowers can only take on debt at twice the rate they increase the ability to service it for so long.

Student and auto loans are also at $1-trillion-plus levels and also growing about twice as fast as wages or the economy.

To be sure, the percentage of disposable income the average household needs to service debt is hovering at about 10 percent, near all-time lows. So too are interest rates, and the thing about interest rate changes at very low levels is that small increases in absolute terms imply large increases in proportional ones.

Two important points about the backdrop:

Firstly, the Fed, happy to ‘normalize’ rates while it can, is likely to hike rates by a quarter percentage point twice more this year and, as indicated in the most recent interest-rate-setting meeting minutes, is also planning to begin the long and fraught process of unwinding its $4.5 trillion balance sheet.

Secondly, while labor market conditions are on par with their 2006-2007 peak, according to Barclays Capital, momentum in the labor market is flagging. Friday’s jobs report showed payrolls expanding by just 98,000 in March, far less than expected, even as the jobless rate fell to just 4.5 percent.

Fed tightening, both balance sheet and interest rate variety, will both “only serve to strain liquidity conditions and raise debt service costs,” economist David Rosenberg of Gluskin Sheff wrote in a note to clients.

“Nobody sees a recession coming, but history shows there is a 90 percent chance we see one in the coming year. Household debt loads are at cycle highs. Fed rate hikes mean interest costs will be absorbing funds that would otherwise be diverted to cyclical spending.”

The larger question is why workers in an economy with such low unemployment see the need to borrow aggressively, even if debt service levels indicate they have headroom.

That’s because though many jobs have been created, they are not, by and large, jobs which allow for middle-class standards of living without spending above one’s income. The savings rate, at 5.5 percent, is well above the crazy 1.9 percent lows of 2005 but is hugely flattered by savings among the richest. Among the bottom 90 percent of Americans, the savings rate since the financial crisis has bumped along near zero, with the lion’s share made up by a 38 percent savings rate among the top 1 percent.

This paints a picture of an economy badly out of balance. Those consumers taking on credit card debt, and auto debt, and student debt are not, by and large, doing so out of confidence and with prudence, but because of need.

Wages simply have not risen enough for the typical household to make its way, and the fact that debt service has been kept artificially low only serves to underscore exactly how aberrant matters are.

This time, of course, won’t be like last time, and financial institutions are far less likely to be caught wrong-footed by a sudden downturn in the economy. That’s positive because we are far less likely, should we slide into recession, to face anything like a banking crisis. Banks are taking on less risk and monitoring the risks of their consumer-facing portfolios more closely.

This, though, means that banks will likely turn off the tap of credit availability more quickly, and with less provocation, then last time. Banks won’t be surprised by a recession, they will help cause it by tightening credit availability.

Data from the Federal Reserve’s survey of senior loan officers already shows a tightening is under way, with banks moving from making consumer debt easier to get to harder in the last six months. The last time we saw this pattern was 2008, and though the banks seem to be out in front of economic developments this time it will be of little comfort.

An economy this reliant on debt finance among a huge mass of households who can barely keep their heads above water is a risky proposition. – Reuters
Rating: 
No votes yet

Column of the Day

Barbaric fraternities (2)

By DAHLI ASPILLERA | September 22,2017
‘An added crime of the guilty is their scheme to plant the death of Atio to the police tokhang. Only asinine paranoid oppositionists believe all sidewalk killings are the Administration’s.’

Opinion of the Day

Conspiracy

By DODY LACUNA | September 22, 2017
‘Of course, the dean of the UST Faculty of Civil Law knew hazing was taking place.’