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Richard Seng asked:


Have you ever thought that organizing and managing your money was overpowering and hopeless? By using personal finance software, many of the concerns you have with managing money can be squashed.Picking the right software package for you can build your confidence in managing your money and making sure your finances are in order.Top Personal Financial Software Programs Some of the advantages of using personal finance software are:You can pay your bills online by using online banking.Manage your stock and 401K portfolio by trading stocks, bonds and mutual funds.You can get real time stock reports.Export your tax and financial data to your tax return.Build reports and graphs to find our where your money is going.You can keep all your financial information in one place.Maintain a list of usernames and passwords for all your investment websites.An excellent personal financial software program will allow you to store your information and data for as long as you would like. You will not need to store files of pager in boxes with all your yearly statements.Some financial websites will actually limit how long information is stored on their site. Personal financial software can help you to store your data on your computer so you can track your spending. You can build budgets and do long and short term goal planning.Personal financial software will not do everything for you. You still need to set up the program when you begin and depending on the difficulty of your financial information and how comprehensive you are, it could take your some time. You can download a lot of your data from your financial websites, but you will still need to record some transactions manually. You also will need to be attentive in recording your data.Here are some considerations and features when buying personal financial software.Make sure the software is user friendly and easy to set up and install.The software should be current on new tax laws.You should have the ability to do online banking and bill paying along with account transactions and reconciliation, exchange currencies, electronic payments and write checks.Features for investing should be including getting stock quotes, managing your 401k, stocks, mutual funds and bonds.Retirement planning options to achieve your financial goals, manage taxes, lifetime events, plan college expenses home purchases, expenses, debt relief and more.



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Australasian Investment Review asked:


The strength of Australia’s banks, especially the big four, is better than first seems, judging by comments in the International Monetary Fund’s latest report on the Australian economy.

Buried in the Fund’s latest report is a big vote of confidence in the health and stability of the Australian banking system.

The IMF also reckons Australia’s big four banks are so well capitalised that they could withstand a surge in home loans going bad and still maintain their capital levels at the minimum required by regulators.

That’s a big difference to the US, UK, Ireland and several other countries where plunging home prices, mortgage sales and falling property values have wreaked havoc on capital levels and forced big capital raisings

The information in this report from the IMF is likely to underpin the analysis and commentary in the RBA’s semi-annual Financial Stability Report to be released later this morning.

Australian banks and their health have been questioned by investors and commentators since the credit crunch erupted over a year ago, with nerves getting very frayed last week as the US financial system shook under rising pressures and soaring short term rates for cash.

As well a shortage of US dollars (hard to believe) caused short term interest rates to spike in the UK and Europe and forced the Fed into over a quarter of a trillion dollars US in currency swaps with central banks around the world (including Australia).

Some commentators fret about the level of debt in Australia and the house borrowing boom and the still high levels of prices and have warned of a debt binge driven slump.

But not so the chaps from the IMF.

They did admit that “Australia’s banking system is sound, but some vulnerabilities remain.” The banks were on the rollover risk in wholesale funding markets overseas with banks being forced to pay a lot more for new funds as existing loans rollover and have to be renewed.

But the IMF said “The authorities’ response to the credit market turmoil has been timely and fitting, with the RBA providing liquidity support and APRA intensifying its monitor of banks.

“The four large banks remain profitable and well capitalized, but the turmoil highlighted their vulnerability to rollover risks arising from short-term wholesale funding.

“The planned introduction of liquidity guidelines will be helpful to reduce the risk of disruptions arising from loss of access to offshore funding.

“Requiring the publication of more detail on the maturity structure of banks’ funding, especially from offshore markets, would also encourage banks to reduce their exposure to rollover risk.”

“APRA plans to introduce liquidity guidelines with a focus on improved disclosure and stress testing.

“The aim should be to encourage banks to reduce the risk of disruptions from restricted access to wholesale markets by diversifying their funding sources, lengthening the maturity of their funding, and holding sufficient liquidity.

“The staff advised that requiring banks to publish more detail on the maturity structure of their funding, especially from offshore markets, would impose additional discipline.”

(That’s a good news story on moves by the key regulators to force the banks to upgrade their disclosure on liquidity and funding.)The IMF said that “Banks are exposed to households, but appear resilient to an increase in default rates on mortgages. Households have become increasingly indebted, with debt reaching almost 160 percent of disposable income and debt-servicing costs at about 14 percent of disposable income.

“As more than half of banks’ loans are mortgages, banks’ asset quality would likely deteriorate with a large increase in interest rates, rise in unemployment, or fall in house prices.

“Staff analysis show that a very large increase in default rates (to 10 percent of all housing loans) would be required to reduce capital ratios of the four major banks below 8 percent.

“Moreover, staff estimates suggest that house prices are only moderately overvalued (5-15 percent) and that continued strong immigration and household income growth could increase equilibrium house prices.”

The IMF points out that to get a 10% default rate on all housing loans would require “a default on about half of mortgages with loan to value ratios of over 80 percent”.

House loans with an LVR of 80% or more are among the most stretched, but at the moment Australian banks have an arrears rate of 0.2% for impaired assets (including housing) and small banks a rate of 0.50%.

But in the most interesting stress test, the IMF says that its staff “using extreme stress test scenarios applied to the large banks suggests that they could suffer a significant fall in profits from an increase in funding costs associated with loss of access to offshore markets for 90 days, but that their capital would remain adequate.”

“This scenario is more severe than anything that Australian banks have had to face to date. As a result of the loss of access to offshore markets, banks have to refinance their offshore liabilities due in less than 90 days domestically.

“In the most severe case where all wholesale funds (domestic and offshore) due in less than 90 days have to be refinanced at an interest rate that is 500 basis points higher than before the shock, the aggregate capital ratio for the system only falls to 8½ percent.

“The worst affected among the four large banks has the capital ratio drop to 7½ percent.

“Banks’ profitability suffers a more serious hit, which is not surprising, given their heavy reliance on short-term wholesale funding. Nevertheless, it takes a 500 basis points increase in interest rates on liabilities to generate losses for banks.”

In other words, if that was to happen now, wholesale interest rates would have to rise to well above 12% (indicating mortgage rates above 15%) for three months for there be any significant damage to bank capital levels and the amount of capital in the financial system as a whole.

“That assumes the banks can’t get any money from offshore in that period, which hasn’t happened so far.

Even when the stress tests were applied at even more intense levels, the IMF team said the results showed the resilience of the system

“Even in a more extreme case where the interest rates on all deposits (including checking) also rise by 500 basis points, the aggregate capital ratio drops to 5¾ percent for the system, and to 5 percent for large banks.

“While this is a significant reduction in capital, the fact that the banks are able to maintain their capitalization ratios above 5 percent under a shock of that magnitude (and under a number of conservative assumptions that were made) underlines the resilience of the system.

“All four large banks were analyzed individually, and were shown to be sufficiently sound to handle a large interest rate shock. Small banks, however, were only looked at as a group.

“Some of these banks have smaller deposit bases, rely more heavily on securitization, and could be more vulnerable to certain shocks. Nevertheless, given their small size and the strong aggregate results, they are also not likely to present a threat to systemic stability.”

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.



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Nicky Pilkington asked:


When man invented the computer, it became an invaluable tool to many people who has learned to use it and has become a part of their everyday lives. Many people turn to various types of computer software to suit their needs, and most of these softwares are tailored to the clientele it hopes to accommodate.

Nowadays, many people can access their bank accounts online. From this single account, they can enroll other accounts which may include bills for credit cards, utilities such as electricity and water, and even schedule payments for their insurance premium. These advances in the financial world have helped facilitate better, safer, easier transactions which always benefit consumers.

Similarly, when stock market investments shifted from person to person trading to today’s more sophisticated process of online stock trading, companies began putting up websites to encourage their clients to do most transactions online. This is usually done using stock market investment software.

An investor may subscribe for free or pay a certain amount for an account through his trading company’s website. As he does this, he is required to download and install the stock market investment software that the company is using. This is mostly done so that the subscriber and the trading company use the same investment software.

There is a number of stock market investment software available in the software industry today. They can go from the simple to the highly sophisticated one. Most of these application softwares offer the same basic features of a graphical user interface (or GUI) to help a user perform one or more specific tasks. There are types of these stock market investment softwares that are intended for large scale use and there are types which cater for more personalized usage, as in the case of users installing and using personal financial managers in their personal computers and digital assistants.

Investors mostly use the software of their choice to manage their accounts, and check the value of their stocks. This is very helpful to online investors as the software’s GUI facilitates the tasks that they want to perform.

Stock market investment softwares are purchased separately by the trading companies that use them to transact with their clients. They usually have agreements with the company that developed the software so they could avail of their product at a lower price. Some companies hire stock market investment software developers to design their software so that it is easier to tailor it to their particular needs.



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