Tag Archive for Economy

Consumer Price Index at a Glimpse

A consumer Price Index (CPI) is a index number measuring the cipher toll of consumer goods and services purchased by households. It is one of several toll indices calculated by national statistical agencies. The percent change in the CPI is a measure of inflation. The CPI can be used to index wages, salaries, pensions, or regulated or contracted prices. The CPI is, along with the population counting and the National Income and Product Accounts, one of the most closely watched national economic statistics.

Two basic types of accumulation are needed to construct the CPI: toll accumulation and coefficient data. The toll accumulations are collected for a distribution of goods and services from a distribution of sales outlets in a distribution of locations for a distribution of times. The coefficient accumulations are estimates of the shares of the different types of expenditure as fractions of the total expenditure covered by the index. These weights are usually based upon expenditure accumulation obtained for sampled periods from a distribution of households. Although whatever of the sampling is done using a sampling frame and probabilistic sampling methods, much is done in a commonsense way (purposive sampling) that does not permit calculation of certainty intervals. Therefore, the sampling variance is normally ignored, since a single estimate is required in most of the purposes for which the index is used. Stocks greatly affect this cause.

The index is usually computed monthly, or quarterly in whatever countries, as a weighted cipher of sub-indices for different components of consumer expenditure, such as food, housing, clothing, each of which is in turn a weighted cipher of sub-sub-indices. At the most detailed level, the elementary aggregate level, detailed coefficient information is unavailable, so elementary aggregate indices are computed using an unweighted arithmetic or geometric mean of the prices of the sampled creation offers. These indices study prices each month with prices in the price-reference month. The weights used to combine them into the higher-level aggregates, and then into the overall index, relate to the estimated expenditures during a foregoing whole year of the consumers covered by the index on the products within its orbit in the Atlantic covered. Thus the index is a fixed-weight index, but rarely a Laspeyres index, since the weight-reference period of a year and the price-reference period, usually a more recent single month, do not coincide. It takes time to assemble and process the information used for coefficient which, in addition to home expenditure surveys, haw include trade and tax data.

Ideally, the weights would relate to the composition of expenditure during the time between the price-reference month and the current month. There is a large technical economics literature on index formulae which would approximate this and which can be shown to approximate what economic theorists call a true cost of experience index. Such an index would show how consumer expenditure would have to advise to compensate for toll changes so as to allow consumers to maintain a constant standard of living. Approximations can only be computed retrospectively, whereas the index has to appear monthly and, preferably, quite soon. Nevertheless, in whatever countries, notably in North America and Sweden, the philosophy of the index is that it is inspired by and approximates the idea of a true cost of experience index, whereas in most of Europe it is regarded more pragmatically.

Read more

Government SBA Loan Programs

Generally a lender of SBA is the choice for the financing of small company, including acquisitions. The administration of the small company of government the of the USA provides a guarantee to a lender for a part of the loan, and this of the marks the viable loan for the lender. The best aspect of the loan of businesses of SBA (called the program of SBA 7(a)), is that it is based on the cash flow of financing, real estate, are to receive and permanent assets. It is also relatively simple, and for strong companies clean the process can be rather easy. Other side you can pass by the hell one or the other because the isn’t of businesses clean and strong, or because you selected a lender that the doesn’t know completely what they do. I just spoke to a lender today who had a purchaser with a criminal record – apparently this help of doesn’t the process one or the other.

With Preferred SBA lender is one which can make their own decisions of placement rather than must subject to SBA each time for approval. I much prefer to function with a preferred lender. I’ve considering tables of risk for one of these large lenders, which enumerates which types of businesses they like to place, and what are the conditions of installment. For example, the dental and veterinary practices are with the top of the list, and require only one installment of 10% and they will throw even in working capital of exploitation of 10% on this (significance, primarily, no money downwards). Apparently the veterinary surgeons and the dentists are very good to remain in the businesses. At the bottom of the list was a couple of the concessions which were in the trouble, and for those you would probably take the same approval obtaining of difficult moment of the bank in all the conditions. This list changes all the hour so much any point into calling the concessions here. The lender is always in danger to the a-guarantee part of the loan, and the lenders thus always need guarantees as much collateral and personal which they can obtain from the purchaser, but if there are enough cash flow of financing (and stable history of cash flow of financing), then the lenders seen by I’ve give up much of that (although some, like personal guarantees, are required by the SBA). The loan of maximum SBA 7(a) is $2 million, but the senator Kerry presents the legislation after this month (February 2008) which can raise the limit to $3 million. That would help me completely a little because I precisely prove to sell the companies which could employ a higher limit.

There is also a programmed of loan of SBA for the real estate, called the program of SBA 504. It is much more complex and certainly can be a longer process to be achieved. You can mix and matched too. In 2007 we sold a steel company of manufacture to which the purchaser employed of the 504 loans for the real estate and one 7(a) for the businesses. You must also qualify like small company. The SBA has a table which places the maximum size thus that a company can be, it is important to seek your type of company to see what it is. For much of companies it is $6.5 million in the sales, but for others it can be $16 million, or even measured in terms of employees – to 500 employees. That the table of size killed a business I worked above because I had a company which wanted to acquire another company and all the size of the combined company was going to be above the limit of size of SBA. This put the business in a kind of no-team the ground.

Read more