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<keyword id="20762025" type="General" weightage="100" keywordseo="silver-prices" source="keywords">Silver prices</keyword> have reached a significant milestone on Monday, touching Rs 1,00,000 on the Multi Commodity Exchange (MCX) for the March contract. According to the experts, this surge is being driven by escalating <keyword id="19955176" type="General" weightage="20" keywordseo="geopolitical-tensions" source="keywords">geopolitical tensions</keyword> in the Middle East, actions by China, and uncertainties related to the upcoming U.S. elections. These global risks are pushing silver prices to fresh all-time highs, as investors seek <keyword id="21286754" type="General" weightage="20" keywordseo="safe-haven-assets" source="keywords">safe-haven assets</keyword> amidst the growing instability. "Silver prices have aligned with expectations, and we anticipate a potential rally towards the usd 40 mark in the next six months. <keyword id="23623786" type="General" weightage="20" keywordseo="MCX-March-contract" source="keywords">MCX March contract</keyword> silver tested Rs 1 lakh, as geopolitical tensions are expected to continue supporting its safe-haven appeal. Additionally, high ETF investments and China's economic support contribute to a positive outlook. With <keyword id="23623788" type="General" weightage="20" keywordseo="gold-silver-ratio" source="keywords">GOLD SILVER RATIO</keyword> dropping towards the 80 level, it is likely to outperform gold. We expect silver to reach Rs 1.3 lakh by March 2025" said Ajay Kedia, Director of <keyword id="23623787" type="General" weightage="20" keywordseo="Kedia-Advisory" source="keywords" meta.keywordsubtype="org" meta.entityname="Kedia Advisory" meta.hostid="261" meta.entityid="Kedia Advisory">Kedia Advisory</keyword>. Silver remains strong in the market, with industrial demand expected to further boost prices. Analysts predict that silver could soon approach the USD 40 mark, as demand continues to rise. The metal plays a key role in industries such as electronics, solar energy, and manufacturing, making it highly sought after for both investment and practical purposes. In the commodity markets, contracts refer to agreements to buy or sell a specific quantity of a commodity at a predetermined price on a future date. These contracts are standardized and traded on exchanges like MCX. Traders use them to hedge against price fluctuations or to speculate on price movements. For instance, in the case of silver, the March contract represents an agreement to trade silver at a fixed price in March, allowing traders to lock in prices now to avoid future volatility. The ongoing geopolitical tensions and global risks are driving the prices of commodities like silver, as investors look for stability in uncertain times. The surge in silver prices reflects both the increasing demand for industrial use and its value as a safe-haven asset. With the global outlook remaining uncertain, silver could see further gains in the coming months.

Silver touches Rs 1 lakh mark on MCX march contract

The Congress on Wednesday said the <keyword id="19900449" type="General" weightage="20" keywordseo="government" source="keywords">government</keyword>'s proposal of giving individuals the option to choose between two tax rates for long-term capital gains (<keyword id="6357448" type="General" weightage="20" keywordseo="LTCG" source="Orion">LTCG</keyword>) tax on properties is not enough. It should also allow <keyword id="21006654" type="General" weightage="100" keywordseo="indexation-benefits" source="keywords">indexation benefits</keyword> for other forms of <keyword id="20044873" type="General" weightage="20" keywordseo="savings" source="keywords">savings</keyword> such as <keyword id="19905382" type="General" weightage="20" keywordseo="stocks" source="keywords">stocks</keyword> and <keyword id="19975805" type="General" weightage="20" keywordseo="fixed-deposits" source="keywords">fixed deposits</keyword>. Professionals' Congress Chairman Praveen Chakravarty accused the government of "betraying" the middle and salaried class in the Union Budget through the removal of indexation and higher taxes on their savings and <keyword id="22703183" type="General" weightage="20" keywordseo="investment-gains" source="keywords">investment gains</keyword>. "On 23rd July, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> presented the government's budget in Parliament. We welcomed certain aspects but we strongly opposed many parts of the budget. We welcomed the fact that the FM took some ideas from the Congress party's manifesto such as the employment linked incentive (ELI) scheme, the Apprenticeship Act and removing Angel tax," Chakravarty said at a press conference at the AICC headquarters here. Among other things, we strongly opposed what the finance did to the middle class and salaried professionals, he said. Leader of the Opposition Rahul Gandhi in his response to the Budget in Parliament categorically said that this was a "betrayal of the middle class" through removal of indexation and higher taxes on their savings and investment gains, Chakravarty pointed out. "He (Gandhi) had promised to fight for the middle class on this issue. This issue affected nearly 7 crore Indians who filed income taxes, owned or aspire to own a home and invest their savings. In this budget, effectively, through removal of indexation and increase in capital gains taxes, the taxes of salaried professionals through investment gains went up dramatically," he said. Already, the middle class and the salaried professionals are bearing the brunt of taxation under the Modi government because for the first time in India, total income taxes paid by middle class individuals are higher than taxes paid by rich corporates, Chakravarty said. There were huge protests on social media and in business events in cities like Mumbai where professionals came out spontaneously to protest, he said. Chakravarty said the <keyword id="22703184" type="General" weightage="20" keywordseo="All-India-Professionals-Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="All India Professionals' Congress" meta.hostid="261" meta.entityid="All India Professionals' Congress">All India Professionals' Congress</keyword> and the Congress Party launched a campaign to 'Bring Back Indexation' with a petition asking people to sign it. "We had nearly 12,000 people who signed the petition in just one day since its launch. Yesterday, the government of India announced a rollback of indexation of property gains by giving individuals the option to continue with indexation benefits. We welcome this. This is a victory to the 7 crore people that file income tax," he said. "But this is not enough. We urge the government to allow indexation benefits for other forms of savings too such as stocks, debt, fixed deposits and so on," Chakravarty asserted. More importantly, this is a testament to middle class power and the power of democracy, he said. "When professionals come together and raise their voice, it will be heard. This is also proof of what a strong Opposition and a concerted and united effort can achieve for the people of India. The AIPC will continue to raise issues that impact the middle class working professionals," Chakravarty said. His remarks come a day after the government proposed significant relief for individuals who bought houses before July 23, 2024, by giving them the option to choose between two tax rates for long-term capital gains (LTCG) tax. The Budget 2024-25 had proposed to lower the LTCG from 20% to 12.5% but removed the indexation benefits. The new rates have come into effect from July 23, 2024. The indexation benefit allowed the taxpayers to compute gains arising out of the sale of capital assets after adjusting for inflation. The tax experts had said that the proposed changes in the Budget would raise the LTCG tax burden. As per the amendments to Finance Bill, 2024, circulated to the Lok Sabha members on Tuesday, individuals or HuF who bought houses before July 23, 2024, can compute his/her taxes under the new scheme (@12.5% without indexation) and old scheme (@20% with indexation) and pay such tax which is lower of the two. After the Budget presentation, the Income Tax department said that 'substantial tax savings' are expected for a vast majority of taxpayers due to a reduction in the long-term capital gains tax (LTCG) rate in the real estate sector. As per the changes brought in the 2024-25 Budget, the government has retained the indexation benefit for the taxpayers on properties bought or inherited before 2001.

Allow indexation benefits for savings such as stocks, fixed deposits: Cong to govt

We are once again at a crucial point in the world's economic recovery. Everything must go right, or global markets could turn violent.For the past four years, the world has been unified in its efforts to first ease the economic pain caused by the pandemic and then combat the historic bout of inflation that followed. When the pandemic set in, central banks around the world slashed rates to zero — just as they did during the financial crisis. Then as inflation set in, they started raising rates at a rapid clip unseen in decades. They did all this in nearly perfect time, which ensured that markets remained stable and predictable. But now, the world risks falling out of sync.The <a target="_blank" href="https://www.businessinsider.com/ecb-lagarde-economy-interest-rates-cuts-inflation-growth-central-banks-2024-6">European Central Bank began easing interest rates </a>on Thursday, cutting its benchmark rate by 0.25%. The move is not only a sign of confidence that the eurozone is in the last bouts of its battle with inflation but also an indication of worry that the economy needs a small boost to keep rolling. Investors and economists expect the Federal Reserve to follow suit and cut interest rates <a target="_blank" href="https://www.businessinsider.com/fed-interest-rate-decision-may-rates-held-steady-no-cuts-2024-5">in September</a>. And so, the story goes, central banks around the world will begin their coordinated descent into a soft landing — a perfect calibration of that push-pull between fighting inflation and evading a recession.The thing is, reality has been making a mockery of experts' assumptions all year long. Wall Street started the year expecting inflation to cool off, the economy to slow to a more leisurely pace of growth, and as many as <a target="_blank" href="https://www.businessinsider.com/interest-rates-2024-outlook-rate-cut-predictions-wall-street-stocks-2023-12">six interest rate</a> cuts from the Fed. Instead, inflation data has consistently come in hot, and the US economy's strength has defied expectations. This combination means there's a good chance that the September cut Wall Street is praying for may never materialize."Summer will definitely be interesting," Tamara Basic Vasiljev, a senior economist at Oxford Economics, told me. Her base case is that everything will go according to plan, but there are caveats: "The Fed has proven its ability to fight off any kind of financial stability issues. But what if services inflation keeps surprising to the upside through the summer? Then it becomes apparent they can't even cut in September."If the Fed doesn't cut come fall, America's high interest-rate regime will be out of step with the rest of the world. And any differential between the US and the rest of the world would send a weird wave of money crashing onto America's shores. That sudden surge of cash could, in turn, add liquidity to our financial system just as the Fed is trying to dry it up and push up prices around the economy. This would make it even harder for the Fed to ease, further diverging US policy from the rest of the world. Think of it as a vicious cycle standing in the way of the world's smooth, soft landing.Over time, this has the potential to add volatility to already skittish markets. Here in the US, stocks move on mood — one week, Wall Street thinks we're in for stagflation; the next, it believes a soft landing is coming. This divergence in interest policy, over time, has the potential to bring that same frantic energy to currency markets.<h2>The carry nation</h2>Wind is the result of an imbalance: air moving from areas of high pressure to areas of low pressure. The greater the pressure differences, the faster the wind blows. The same principle applies to the global flow of cash — investors chase imbalances, and sometimes things get blown over in the process.The US already has somewhat higher interest rates than other countries — the Fed's benchmark rate is <a target="_blank" href="https://www.businessinsider.com/fed-rate-cuts-forecast-2024-full-accommodation-economic-contraction-unemployment-2023-11">5.25%- 5.50%.</a> These differentials have allowed Wall Street to make what is called a "<a target="_blank" href="https://markets.businessinsider.com/news/currencies/foreign-exchange-funds-central-banks-fed-rate-hikes-carry-trade-2023-11">carry trade</a>": Investors borrow money from a country with low interest rates, invest it in bonds from a country where interest rates are high, and pocket the difference. In this case, that means moving money from the rest of the world and buying US assets, particularly government bonds. This trade has been hot since the start of the year — investment banks like JPMorgan and UBS recommended it to clients, and a Bloomberg index based on selling the lowest-yielding G10 currencies and buying the highest ones has already returned 7% this year. The Institute of International Finance reported that in May alone, Emerging Markets ex-China — where rates are also higher — saw bond-market inflows of $10.2 billion, mostly due to investors benefiting from carry trades like <a target="_blank" href="https://www.marketwatch.com/livecoverage/stock-market-today-dow-futures-dip-as-growth-concerns-linger/card/japanese-yen-strengthens-as-risk-aversion-rises-carry-trade-crumbles-9tGHrcickLndc749YzTO">selling Japanese yen</a> to buy Mexican pesos. These trades are "everywhere," Peter Schaffrik, a global macro strategist at RBC Capital Markets, told Bloomberg. And the more rates diverge, the more attractive this march of money from weak to strong becomes.What seems like a slam dunk for Wall Street is not such good news for either the US or the global economy. At a time when economies in Europe and elsewhere are losing momentum, sucking more money away from these economies will tighten financial conditions while they're trying to avoid a slowdown — especially in crucial regional data like <a target="_blank" href="https://markets.businessinsider.com/news/stocks/european-shares-fall-amid-data-deluge-1033460481">German industrial production</a>, which has come in soft of late. It will also weaken the euro, which will make it harder for the continent to import the energy it needs to fuel its economy and make it more expensive to buy American goods. And in Asian economies, where interest rates are already significantly lower than in the US, things could get even messier."We expect that <a target="_blank" href="https://www.businessinsider.com/japan-yen-slump-intervention-currency-buy-us-involvement-interest-rates-2024-5">Japan</a> and South Korea will face challenges balancing monetary policy to maintain stability as the dollar appreciates," Nigel Green, the CEO of deVere Group, a global wealth-management firm, told me. "I wouldn't be surprised if policymakers feel the need to intervene in the currency markets or adjust interest rates to manage these effects."For the US, more money sloshing onto America's shores has the opposite impact of what the Fed wants to achieve: It pushes up asset prices and loosens financial conditions. In other words, it makes it harder for the Fed to fight the inflation that is aggravating consumers."There are legitimate concerns that this influx of capital into the US will increase liquidity, driving up asset prices and inflationary pressure, making it more challenging for the Fed to lower rates," Green said. "Increased liquidity can lead to inflationary pressures, which the Fed might need to counteract by maintaining or even raising rates."As Green mentioned, there's a way for the Fed to fight back: hiking interest rates some more. But jacking up interest rates even further could finally break the back of the <a target="_blank" href="https://www.businessinsider.com/recession-outlook-hard-landing-economy-consumer-spending-slowdown-growth-gdp-2024-5#:~:text=Consumers%20are%20finally%20slowing%20their,and%20a%20weakening%20job%20market.">until now strong US consumer</a> and send us into a recession. It's the same calculation the ECB is making, though the EU's slowdown is more marked. Given these downsides, the Fed is unlikely to hike, which will create the perfect market for the carry trade to thrive. And as long as US data remains choppy — pointing to sticky inflation one day and disinflation the next — this carry-trade cash will end up sloshing around in the economy. This is a dynamic that central banks from countries already on their rate-cutting path will be watching. They're already seeing growth slow and, on top of that, will have money sucked away to the US, where data has been relatively strong through the first half of the year. Carry-trade cash exploits the dislocations between global economies that are keeping our policies from coordinating. We're in the early innings, but the longer this goes on, the more of an impact it will make. For Wall Street, that means <a target="_blank" href="https://www.businessinsider.com/wall-street-summer-worry-stock-market-crash-inflation-hamtons-vacation-2024-5">a summer of vigilance</a>. For economists, it means the picture of our economy that they're trying to cobble together with contradictory data is even blurrier. It's a time of increased uncertainty.<h2>Sticky-ing the landing</h2>There is, of course, hope that this divergence will be only a temporary state of affairs. If the US suddenly starts printing weak economic data, that will hasten the Fed's move to cut rates. And there are signs that EU inflation is stickier than policymakers would like, which could slow the pace of cuts enough for America to catch up.There are already signs of a slight tempering of America's red-hot economy: The household savings rate is at a 16-month low, disposable incomes have made only modest gains, and the amount that people have to pay on credit balances is elevated. The white-hot job market has cooled, and job openings have returned to prepandemic levels. But not every indicator is telling the story of a soft landing. On Friday, <a target="_blank" href="https://www.businessinsider.com/how-unemployment-rate-job-growth-looked-in-may-2024-6">May's jobs report</a> showed that the country created 272,000 jobs — way more than the 182,000 expected. The data seesaw stateside continues. On the other side of the Atlantic, there are signs that UK and EU inflation could be stickier than policymakers had foreseen. <a target="_blank" href="https://markets.businessinsider.com/news/interestrates/eurozone-inflation-rises-ahead-of-ecb-meeting-1033440963">EU inflation ticked up slightly to 2.6% in May</a>, surprising the ECB but not shocking it enough to stop a June rate cut. In the UK, stubborn services inflation, which came in at 5.9% for the month of April, may give the Bank of England reason to pause. Oxford Economics' Basic Vasiljev told me that this indicated that the EU and US were moving more in tandem than this policy lag suggests and the current policy divergence would remain short. Even the Bank of Canada, which cut its benchmark rate to 4.75% from 5% last week, is cautiously optimistic the dislocation will be momentary. "There are limits to how far we can diverge from the United States, but we're not close to those limits," Gov. Tiff Macklem said at the Bank of Canada's latest meeting. Not close… yet.This rosy outlook is not a guarantee: Wall Street still expects three cuts this year from the ECB and the <a target="_blank" href="https://markets.businessinsider.com/news/stocks/european-shares-fall-amid-data-deluge-1033460481">Bank of England</a>. Even in little clips of 0.25%, three cuts would create a divergence traders would exploit. And if September comes and the US is still hot, that exploitation could continue all year long, exacerbating the conditions that are keeping monetary policy out of sync. That sucking sound you'll hear all summer is the sound of Wall Street slurping money from Europe, Canada, the UK, and East Asia into US markets. Policymakers will have to recalibrate. This doesn't mean we won't stick a soft landing — especially if this disordered moment is brief — it just increases the odds of a bumpy ride until we get there.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Business Insider.

America's plan to fix its economy is going to screw over the rest of the world

<ul class="summary-list"><li>Many Americans are struggling, but make too much money to qualify for social assistance.</li><li>That's because the US poverty line is outdated, leaving behind workers who could benefit from help.</li></ul>Jason Hopkins, 43, has never made over $35,000 a year."If I made $45,000 a year, I would feel wealthy," the Illinois-based custodian told Business Insider.Hopkins said he's lived <a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5">paycheck to paycheck</a> for the last decade. He's unable to save money from his income and doesn't go out; he buys a new shirt once a year. Existing like that is "draining," he said.But he makes too much money for most forms of <a target="_blank" href="https://www.businessinsider.com/buying-groceries-snap-food-stamps-cant-afford-essentials-credit-card-2024-6">social assistance</a>. This is a common predicament among Americans who are <a target="_blank" href="https://www.businessinsider.com/middle-class-americans-earning-above-poverty-live-paycheck-to-paycheck-2024-4">ALICE</a> — asset-limited, income-constrained, and employed. Many forms of help are tied to the <a target="_blank" href="https://www.businessinsider.com/middle-class-americans-earning-above-poverty-struggles-afford-food-medicine-2024-4">federal poverty line</a>, which is calculated using a formula that has largely not been updated since the 1960s.<div type="image" title="Jason Hopkins and cat Nyx" height="1600" width="1200" msid="111020216" hostid="261"></div>"The way we measure poverty is incredibly outdated," said Beth Jarosz, senior program director at the Population Reference Bureau, a nonprofit organization that conducts demographic analyses.BI has heard stories from <a target="_blank" href="https://www.businessinsider.com/parents-lower-income-alice-paycheck-to-paycheck-minimum-wage-insecurity-2024-5">parents forced to choose</a> between putting food on the table and supporting their children's education, older adults worried they will <a target="_blank" href="https://www.businessinsider.com/retirement-peak-boomer-alice-social-security-masters-degree-student-loans-2024-5">never be able to retire</a>, <a target="_blank" href="https://www.businessinsider.com/dinks-childfree-parents-choice-kids-childless-2024-3">childfree couples</a> unable to access social services, and individuals concerned they will never be able to pay down debt.These households could use more access to social assistance — but the US' poverty threshold is leaving them behind. If America modernized its way of measuring economic needs, millions of low-income families could better make ends meet. The real question is whether the US ever will.<h2 id="41f17220-a392-4d67-ac85-197cf1416d93">The poverty line is calculated in an outdated way</h2>The current <a target="_blank" href="https://www.healthcare.gov/glossary/federal-poverty-level-fpl/">federal poverty line</a> for the 48 contiguous states and Washington, DC, is $15,060 a year for one person, $20,440 for a family of two, and $31,200 for a family of four. This does not vary by location or cost of living, but it's adjusted for inflation each year."Straight up, it is too low. It is not a sufficient way to measure how current families are doing," Kyle Ross, a policy analyst for inclusive economy at the Center for American Progress, told BI.Per the most recent Census data, the official poverty rate in 2022 was 11.5%, or about 37.9 million Americans. In 2022, 42% of Americans were below the ALICE threshold, the amount households need to cover their essential costs, according to research organization <a target="_blank" href="https://www.unitedforalice.org/national-overview">United For ALICE</a>.Mollie Orshansky, a government worker, originally estimated the federal poverty line formula in the 1960s using USDA data, which showed people often spent around a third of their income on food.But that doesn't account for how Americans actually live. Americans now spend just around 13% of their income on groceries, as food prices have fallen relative to incomes and housing costs have risen disproportionately. According to the Bureau of Labor Statistics, people spent 33.3% of their income on housing last year."With the way that costs have changed, the poverty measure that's just based on how much you're spending on groceries really does not reflect what people are paying for their expenses today," Jarosz said.Over 30 government programs use the Department of Health and Human Services poverty guidelines — or higher percentages based on the federal poverty line — to determine eligibility criteria.For instance, the Supplemental Nutrition Assistance Program (<a target="_blank" href="https://www.businessinsider.com/government-assistance-food-stamps-snap-doesnt-help-low-income-dinks-2024-5">SNAP</a>) is capped at 130% of the federal poverty line — which would be <a target="_blank" href="https://www.fns.usda.gov/snap/recipient/eligibility">$2,694</a> in gross monthly income for a family of three — while the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is 185% — $47,767 a year for a family of three. Head Start, the National School Lunch Program, and parts of Medicare and Medicaid are among other programs relying on federal poverty line eligibility.Notably, some outlier programs like Supplemental Security Income, the Earned Income Tax Credit, and Section 8 low-income housing assistance do not rely on the federal poverty line."So much of federal policy, state policy is focused around the poverty level," Stephanie Hoopes, national director at United For ALICE, told BI.That's all leading to an ever-widening gap of Americans who are technically in poverty but still aren't getting by."These thresholds have a cliff problem where they often become a trap where you have someone who is at a very low-income level and work because oftentimes programs have work requirements," Jarosz said. "Maybe over the holidays, they get an additional shift that they've picked up, and that bumps their income up just enough that they lose their Medicaid coverage that month."That financial cliff has left people like Melinda Binkley, 56, "less than $100" away from receiving SNAP or rental assistance but struggling to keep a roof over her family's head in Stillwater, Minnesota. Ryan Arbuckle, 36, also doesn't qualify for government help on his IT job salary. He's a single father to five children near St. Louis and can barely afford groceries and utility bills.Oleg Parubin, a 45-year-old security guard in Manhattan, makes $45,000 a year but struggles to afford insulin for his Type 1 diabetes and worries about eviction. Once he started making more at his job, he became ineligible for various benefits such as SNAP or reduced-fare transportation, which he estimates amounted to over $10,000 a year in lost benefits."I wasn't able to find an answer to how people can make it today, " Parubin said. "I just decided it is a faulty system, something is broken and doesn't work properly. But I still don't know what can I do."To survive, these Americans who fall outside financial safety nets have resorted to <a target="_blank" href="https://www.businessinsider.com/rent-healthcare-plasma-gen-x-government-assistance-2024-5">selling plasma</a> for extra income, <a target="_blank" href="https://www.businessinsider.com/snap-alice-food-stamps-hunger-government-assitance-free-meals-2024-5">skipping meals</a>, and risking the loss of their electricity or water supply because of <a target="_blank" href="https://www.businessinsider.com/middle-class-americans-earning-above-poverty-struggles-afford-food-medicine-2024-4">delayed bill payments</a>."It really creates a lot of additional stress and burden on families in a case where having consistent benefits available to everybody would be much more efficient for society as a whole," Jarosz said.<h2 id="cafaea22-1acf-4bb1-ab60-76c85ff535e7">There are better ways to calculate poverty</h2>Though <a target="_blank" href="https://tcf.org/content/commentary/time-reset-poverty-line/">many</a> <a target="_blank" href="https://www.americanprogress.org/article/poverty-line-matters-isnt-capturing-everyone/">experts</a> <a target="_blank" href="https://thehill.com/opinion/finance/3724866-were-using-1960s-guidance-to-measure-poverty-in-2022/">agree</a> the poverty line is <a target="_blank" href="https://nap.nationalacademies.org/catalog/26825/an-updated-measure-of-poverty-redrawing-the-line">outdated</a>, it's still used to determine cutoffs for a slew of federal assistance programs, leaving people like Melissa Hedden behind.Hedden, 41, has spent most of this year moving between Airbnbs and hotels in southeastern North Carolina with her partner and 11-year-old daughter. Her family's landlord raised the rent and evicted them last fall, and she can't afford the fees necessary to lease a new apartment. Still, her $3,300 monthly household income is too high to qualify for a rental voucher."I'm not homeless enough to get certain help because I have a roof over my head," <a target="_blank" href="https://www.businessinsider.com/not-poor-enough-low-income-millennial-cant-afford-rent-homeless-2024-5">she previously told BI</a>. "But I'm too homeless to get a job because I don't know where I'm going to live in three weeks. What do you do?"<div type="image" title="Melissa in a cap and gown" height="1114" width="834" msid="111020219" hostid="261"></div>Much of the resistance to changing the federal poverty line could stem from the government's desire not to inflate the number of people in poverty overnight."No one really wants to be the politician that is behind an increase in poverty," Ross said, adding: "Even if it may be a more accurate representation of how Americans are really doing financially, it looks pretty concerning on paper."Expanding eligibility would also mean that, intuitively, more people would receive assistance — and that could cost a lot more money."It can definitely be a costly measure to do that," Ross said. "I personally think that would be worth it; already, these programs are not meeting the needs of families as they are."Other barriers to updating the poverty line are political. Congress would need to pass legislation in order to officially change the way the US measures economic need, or the <a target="_blank" href="https://waysandmeans.house.gov/2023/10/25/five-key-moments-from-work-welfare-subcommittee-hearing-on-measuring-poverty/">Biden administration would have to step in</a>, which would both be unlikely in such a polarized political environment.Bills that expand social services and tax credits are also expensive and historically difficult to pass — most recently, with the expanded child tax credit <a target="_blank" href="https://19thnews.org/2024/04/child-tax-credit-tax-day-2024/">being stalled in the Senate</a>, and plans to expand Medicaid being <a target="_blank" href="https://www.npr.org/sections/health-shots/2024/05/16/1251691921/medicaid-expansion-mississippi-alabama-south">blocked in multiple states this year</a>.<h2 id="d5b4fdda-9f46-4a64-81a7-1f13a92afe7b">Experts differ on how to fix poverty measures, but there is already progress on solutions</h2>While researchers differ on how the poverty line should be tweaked, many agree it needs an overhaul."We know the poverty level is too low to reflect the true number of people who are in need," Jarosz said. "Is there really a need to have a threshold? Is there really a need to have a cap?"And Ross said that even if thresholds don't change, programs could still work to eliminate many barriers to entry, like burdensome application processes — making them more accessible to people who do qualify.Rep. Kevin Mullin, a Democrat from California, has introduced legislation — called the Poverty Line Act— that would modernize the federal poverty line, taking into account actual costs of goods and how prices differ across regions."The current poverty line is woefully out of touch with the realities that Americans face today," Mullin told BI in a statement, noting that the line doesn't account for how costs vary across the country — especially for key essentials like childcare and home rentals."Unfortunately, many working families make too little to afford their basic needs, yet because the federal poverty line is so low, they are not eligible for safety net benefits," Mullin added.The federal poverty line probably won't be changed for some time, Jarosz said, given how many benefits programs rely on it. Still, there is precedent for programs providing more widespread boosts or sidestepping stringent eligibility and spending requirements.The universal or guaranteed basic income model, which typically gives participants between $100 and $1,000 a month with no strings attached, has <a target="_blank" href="https://www.businessinsider.com/basic-income-gbi-ubi-low-income-americans-afford-housing-food-2024-5">been tried over 100 times</a> since 2019 and has helped thousands of households find housing and food security.Unlike traditional social services like SNAP or Medicaid, participants can spend the money <a target="_blank" href="https://www.businessinsider.com/immigrants-new-mexico-basic-income-for-housing-healthcare-ubi-gbi2024-5">wherever they need it most</a>. Basic income gives households an income floor, said Michael Tubbs, the founder and chair of Mayors for a Guaranteed Income and former mayor of Stockon, California, which launched the recent wave of GBI pilots."The top benefit is the choice and the ability to have agency and to figure out how to use your money because we know that no one's smart enough to think for everyone," Tubbs said.Hopkins — the ALICE in Illinois — has benefited from government assistance before. When the pandemic hit, he received enhanced unemployment benefits and a stimulus check — two measures that, unlike many other forms of social assistance, were widely available and not constrained by the federal poverty line.For him, that unprecedented support meant he could buy a house with his fiancé and live alongside two other roommates."The only way I could afford the down payment on this house is from the expanded unemployment during the pandemic and the stimulus," he said. "If we didn't have this house, I don't know how we would live."Do you make above the poverty line but not enough to meet your daily needs? Reach out to these reporters at <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a>, <a target="_blank" href="mailto:nsheidlower@businessinsider.com">nsheidlower@businessinsider.com</a>, and <a target="_blank" href="mailto:allisonkelly@businessinsider.com">allisonkelly@businessinsider.com</a>.

America's poverty line is letting millions slip through the cracks &mdash; here's how we could fix it

<ul class="summary-list"><li>Fixed assets are noncurrent assets that companies will use for more than a year.</li><li>Common examples of fixed assets include land, factories, and machinery.</li><li>Analysts may look at fixed assets and related financial ratios when comparing companies.</li></ul>A fixed <keyword id="12211591" type="UNKNOWN" weightage="60" keywordseo="asset" source="Orion">asset</keyword> is an accounting term that's used to distinguish between assets that will be quickly used up (i.e., current assets) and <a href="https://www.businessinsider.com/what-are-assets" target="_blank" rel="noopener">assets</a> that will provide value for a longer period. A company's fixed assets may include the land, machinery, and other tangible equipment that it will use to create the products and services it sells. <h2>What are fixed assets?</h2>Fixed assets are tangible long-term assets that a business plans to use for more than one operating cycle. Mike Zeiter, a CPA/PFS and CFP who runs <a href="https://www.zeitercpa.com/" target="_blank" rel="noopener">Zeiter Tax Services</a>, says generally, the easiest way to determine if something is considered a fixed asset is if it will last for more than one year. Fixed assets are contrasted by current assets, which get used up within a single operating cycle. For example, a toy company may buy an assembly machine that will last 20 years (a fixed asset) and use it to combine toy parts (current assets) to create the toys it sells. Fixed asset generally refers to tangible assets as opposed to intangible noncurrent assets, such as patents, trademarks, and goodwill. <h2>How fixed assets work</h2>Fixed assets are also called noncurrent assets, long-term assets, or long-lived assets, and they're often listed under the property, plant, and equipment (PP&amp;E) section of a company's balance sheet. To qualify as a fixed asset, an asset must be:<ul><li>Noncurrent </li><li>Not sold directly to customers</li><li>Used for more than one operating cycle (often, a year)</li></ul>Most tangible fixed assets also depreciate over their lifetime — land is an exception. Rather than taking a write-off for the cost of the fixed asset when it's first bought, the company will take deductions and lower the value of the asset over time. For example, if the toy company's assembly machine cost $20,000, is expected to be useful for 20 years, and will then be worth nothing, the company may deduct $1,000 each year. Note: A fixed asset has an estimated useful life, the period during which the business can use it for its intended purpose, and salvage value at the end of its useful life. These can determine how much the business can deduct each year. Businesses can't depreciate land because land doesn't get used up.<h2>What types of fixed assets might a company have? </h2>A company's fixed assets could depend on the type of company and the products or goods it sells. Zeiter says some common examples include: <ul><li>Buildings</li><li>Computers</li><li>Equipment</li><li>Office furniture</li><li>Land</li><li>Vehicles</li></ul>However, whether something is classified as a fixed asset can also depend on how the company uses it. For example, a data storage company might purchase computers that it will use to sell services to clients for years to come. The computers are a fixed asset in this case. But the company that builds and sells the computers wouldn't consider them a fixed asset. <h2>How do fixed assets impact a company's financial statements?</h2>"There are three primary financial statements that all businesses use. The income statement, balance sheet, and cash flow statement," says Ziete. "[And] there are a few ways that fixed assets impact financial statements." Understanding where they're recording and how they may impact or reflect aspects of a business's finances can be important for analyzing a company. <h3>The balance sheet</h3>A company's balance sheet shows an overview of the company's assets, liabilities, and shareholder equity. "Fixed assets are recorded on the balance sheet as part of the company's assets when they are put into service," says Zeiter.The tangible fixed assets may be listed under the property, plant, and equipment (PP&amp;E) section of a company's balance sheet. Current assets and intangible noncurrent assets are listed separately. "As the asset depreciates, an offsetting entry for accumulated depreciation reduces the value of the asset on the balance sheet," notes Zeiter. The accumulated depreciation may have its own line on the balance sheet, with a negative number to show how the depreciation decreases the fixed asset's current value. <h3>The income statement</h3>An <a href="https://www.businessinsider.com/income-statement" target="_blank" rel="noopener">income statement</a>, also called a profit and loss statement (P&amp;L), shows a company's revenue and expenses during a specific reporting period. "Fixed asset purchases are not recorded on the income statement," says Zeiter. "Instead, they are expensed over the expected lifetime of the asset using depreciation. Assets such as buildings are depreciated over a longer time period than assets such as computers." <h3>The cash flow statement </h3>A cash flow statement shows how much cash is moving into and out of a company during a reporting period, such as a month or year. "Fixed asset purchases and sales are considered investment activity on the cash flow statement," says Zeitier. If a company sells a fixed asset, the money may be recorded as proceeds from the sale of property and equipment. <h2>The financial takeaway</h2>Understanding what fixed assets are and how they're recorded in a company's financial statements can help investors analyze a company's financial position. "There are a variety of formulas that allow investors to compare metrics across companies using the fixed asset amounts," adds Zeiter. These include the: <ul><li>Fixed asset turnover ratio, which compares a company's net sales to the value of its fixed assets. A higher ratio may indicate the company can effectively use its assets to make money. </li><li>Average age ratio, which shows the average age of the company's depreciable assets. A higher average ratio may indicate the company will need to replace its fixed assets soon.</li></ul>What's considered good or bad may vary depending on the industry. But you can look at similar companies' fixed assets and the resulting ratios to better understand which companies are better investment opportunities.

Fixed assets are long-term assets that companies use to operate

<ul class="summary-list"><li>A collateralized debt obligation (CDO) is a structured credit product that pools <keyword id="11899862" type="UNKNOWN" weightage="60" keywordseo="assets" source="Orion">assets</keyword> and packages them for sale to institutional investors.</li><li>The assets that back these securities serve as collateral that give CDOs their value.</li><li>Research found that CDOs were at the heart of the 2007-2008 financial crisis.</li></ul>A collateralized debt obligation (CDO) is a type of security that derives its value from underlying assets. These assets could include commercial or residential mortgages, bonds, auto loans, student loans, and other types of debt. The assets are pooled and packaged into a product that can be sold to investors as an income-producing asset. The promised repayment of the underlying debt serves as collateral.<h2>How do CDOs work?</h2>Investment banks, retail banks, commercial banks, and other financial institutions create CDOs to sell in the secondary market. As these are extremely complex instruments, it takes sophisticated computer modeling and a team of quantitative analysts to package the debt and value the bundles of loans that make up a CDO. Then it takes a number of professionals to get the security to market. The CDO manager selects the debt to serve as collateral, which could be anything from mortgages, student loans and auto loans to credit card or corporate debt. Once the CDO manager selects the debt to be pooled, the investment banks can get to work structuring the security. Rating agencies, like Standard &amp; Poors and Moody's, assign credit ratings to the CDO. Finally, the CDO is sold to institutional investors such as pension funds, insurance companies, investment managers, and hedge funds. These investors often buy CDOs in the hope that they'll offer higher returns than their fixed-income portfolios of similar maturity. CDOs aren't available to retail investors and are typically sold to institutional investors in lots valued in the millions of dollars.Note: CDOs aren't available to retail investors and are typically sold to institutional investors in lots valued in the millions of dollars.<h3>How CDOs are Structured</h3>The market for CDOs exists because these securities guarantee cash flows to the owner. However, these cash flows are dependent on the cash flows from the original borrower. The investor receives interest at the stated coupon rate as well as the principal when the CDO reaches maturity. Most CDOs mature at ten years. CDOs are divided into tranches, each of which reflects a different level of risk. Senior tranches are the least risky, with investment-grade credit ratings and a lower chance of default. If the loan should default, the holders of the senior tranche are first in line to be paid from the underlying collateral. Payment continues according to the tranches' credit ratings, with the lowest-rated tranche the last to be paid.The mezzanine tranche comes between the senior and subordinated debt. Mezzanine tranches are rated from B to BBB. In the case of default, mezzanine is paid before the subordinated (junior) tranches. As with any fixed-income security, the safest tranche will bear the lowest coupon rate, while the junior debt will have a higher coupon rate since it carries the greatest risk of default.Note: CDOs are divided into tranches, each of which reflects its level of risk. Senior tranches are the least risky.<h2>Were CDOs responsible for the global financial crisis? </h2>The first collateralized debt obligations were created by Drexel Burnham Lambert during the 1980s, when Wall Street was booming. The bank was well known for both its junk bond business and employed Michael Milken, who played a significant role in developing the junk bond market and later was jailed for violating securities laws. Interest in CDOs waned in the 1990s but picked up significantly in the early 2000s. CDO sales went from $30 billion in 2003 to $225 billion in 2006. The US was experiencing a boom in the housing market, and financial institutions were originating mortgage-backed CDOs at a fast pace. Homebuyers were encouraged by low interest rates, easy credit, and little regulation. In 2003-2004, banks turned to subprime mortgages as a new source of collateral.In the subprime market, banks offered mortgages to borrowers who never would have qualified under earlier standards. The underwriting process became so lax that in many cases, complete documentation of income wasn't even required. The adjustable-rate mortgage (ARM) was even more dangerous for subprime borrowers. They offered very low interest rates for the first few years of the mortgage, which could then be increased drastically a few years down the line. CDOs issued prior to the global financial crisis consisted mainly of subprime mortgage-backed securities, and those backed by other CDOs were also common. In 2006, nearly 70% new CDO collateral consisted of subprime mortgages, while 15% were collateralized with other CDOs. By 2006, investment banks were turning to short-term collateralized borrowing to support the CDO business. On average, they were rolling over 25% of their balance sheets every night. When the housing bubble burst, uncertainty around asset pricing led lenders to cut off the nightly borrowing, leaving the banks exposed to falling asset prices with little capital. Trading in CDOs came to a halt, and it was only with the intervention of the Federal Reserve buying CDOs that restored the market.As Dr. Robert Johnson, professor of finance at the Creighton University's Heider School of Business, explains: "CDOs are extremely difficult to analyze and value. Issuer models failed to take into account the correlation between mortgages bundled into CDOs. In an event such as an economic downturn, the mortgages will move in sync." Post-crisis analysis found that CDOs lay at the heart of the financial crisis. Issuers and investors ignored warnings about the ticking CDO timebomb and failed to understand and manage risk. Bank balance sheets were often not transparent, and institutions throughout the industry were deeply interconnected. Trillions of dollars in risky mortgage-backed securities were entrenched throughout the financial system.Everything came to a head in March of 2008, when Bear Stearns found itself almost out of cash. Facing bankruptcy, the firm sold itself to JPMorgan. Lehman Brothers was next to fall. It was only government intervention that saved the financial system and economy from collapse. A government bailout program benefited some institutions that were considered "too big to fail."Note: Analysis after the global financial crisis found that Issuers and investors ignored warnings about CDOs and failed to understand and manage risk.<h2>Pros and cons of CDOs</h2>Like all assets, CDOs offer advantages and disadvantages. Johnson cites diversification as one advantage. "CDOs are created by bundling debt and spreading it out over many, many mortgages. Thus the investor is exposed to a range of risk levels," he says.Using CDOs, commercial and retail banks can reduce risk on their balance sheets. They can also exchange illiquid assets for CDOs to gain liquidity. Banks can use the additional liquidity to expand lending and generate revenue.CDOs have two principal disadvantages. The first is their complexity, which makes them extremely challenging to analyze and value. CDOs are also vulnerable to repayment risk, as the original borrower can choose to repay the principal, thus depriving the investor of a cash flow stream that would typically last until maturity,<h2>Are CDOs popular today?</h2>Following the financial crisis, CDOs underwent heavy scrutiny. The result was the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The law resulted in widespread regulatory reforms aimed at ensuring the country would never experience another crisis like 2007-2008. Among other measures, the Act was designed to protect investors, increase disclosures, require risk retention, and impose capital requirements. It required originators to retain a specified percentage of a CDO issue, in order to have "skin in the game." Investors in asset-backed securities are now required to hold more capital than if they were investing in other asset classes. Following enactment of Dodd Frank, the market has seen a steady increase in CDO issuance since 2011.Attempts were made to weaken the Act in 2017, and in 2018, President Donald Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. This new law exempted many financial institutions from Dodd-Frank regulations.Note: The Dodd-Frank Act was designed to protect investors, increase disclosures, require risk retention, and impose capital requirements.<h2>The financial takeaway</h2>Collateralized debt obligations serve several purposes. They allow financial institutions to move debt off their balance sheets to gain liquidity. Investors value the cash flow from coupon payments, and hope the return on CDOs will exceed the return of standard fixed-income portfolios.Investment in CDOs is limited to institutional investors —insurance companies, pension funds, hedge funds and the like. However, for the retail investor there are mutual funds and exchange-traded funds that include CDOs in their portfolios.

CDOs: Complex securities backed by loans and other fixed-income assets

<ul class="summary-list"><li>The Fed can pause rate hikes as financial conditions have tightened, the head of fixed income at JPMorgan Asset Management said. </li><li>"They've told us they're data-dependent. Look at the data. They've won. They don't need to pile on," Bob Michele told Bloomberg TV.</li></ul>The Federal Reserve can take a break from hiking interest rates as it's done enough tightening of financial conditions to cool inflationary pressures, a division head at JPMorgan Asset Management said Wednesday before the Fed released its March decision. "They've told us they're data-dependent. Look at the data. They've won. They don't need to pile on," Bob Michele, chief investment officer of fixed income at JPMorgan Asset Management, <a href="https://twitter.com/bsurveillance/status/1638520965142396931" target="_blank" rel="noopener">told Bloomberg TV in an interview</a>. "Look at inflation. If you look at month-to-date 10-year TIPS, they're down 30 basis points to 2.1%. Inflation expectations are coming down. Look at the University of Michigan consumer sentiment [survey.] One-year inflation expectations are down the most in two years," he said.Last week, the survey found inflation expectations <a href="http://www.sca.isr.umich.edu/" target="_blank" rel="noopener">falling to 3.8%, the lowest since April 2021</a>. The Federal Open Market Committee led by Chair Jerome Powell appears likely to raise interest rates for a ninth consecutive time on Wednesday. <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html" target="_blank" rel="noopener">Traders are largely expecting</a> a rate hike of 25 basis points, pushing the benchmark rate to 4.75%-5%, the highest since 2007. <a href="https://markets.businessinsider.com/news/stocks/svb-fed-rate-hike-expectations-funds-futures-pricing-march-powell-2023-3">Expectations for the Fed's next move</a> on interest rates swung widely this month partially because of the collapse and seizure of Silicon Valley Bank, a prominent lender to tech startups. A $1.8 billion loss from selling a <a href="https://markets.businessinsider.com/news/stocks/silicon-valley-bank-svb-goldman-sachs-bought-bond-portfolio-2023-3">bond portfolio burned by higher interest rates</a> triggered a run on SVB's deposits. The Fed and other financial regulators protected uninsured depositors at SVB and Signature Bank, another seized lender, to prevent wider contagion.Michele noted the <a href="https://www.stlouisfed.org/in-plain-english/history-and-purpose-of-the-fed" target="_blank" rel="noopener">Federal Reserve's roots</a> trace back to preventing bank runs, while also alluding to the role its tightening cycle has played in the current crisis."They pushed it to the point where they had to step in and stop a run on banks," said Michele. "So they've achieved the maximum pressure they needed to bring inflation down. It's happening. It's in the data. You pause, and you wait." Meanwhile, surveys of senior loan officers show banks have been making it more difficult for potential borrowers to get access to credit. After the banking industry's distress over the past two weeks, "there's no going back on that," Michele said. "We're all doing the work for the Fed anyway. They can hit the pause button. The banks are still tightening credit conditions and … non-bank lenders are as well."

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Fixed assets are long-term assets that companies use to operate

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