I’m going to be about 6 months behind schedule when I reach my first goal - which was pretty aggressive to begin with. I’m pretty much on target for my second goal, my medium term one - “total savings of €25,000 by the end of 2008“. At my current rate of saving, I’ll reach this goal with some time to spare. I’m not taking anything for granted though because expenditure normally rises during the summer so for the next few months I’m going to save hard and try and be as frugal as possible.

I’ve put my goal of maximising my pension tax relief aside for the time being for a couple of reasons. Firstly, I’ve only be eligible for my new company’s pension scheme for the past few month. Secondly, with the markets in complete disarray I don’t trust pension fund managers to invest my money better than I can. I’d be crazy ignore pensions completely though, so in the next couple of weeks I’m going to do the paperwork to join my company’s pension scheme and contribute 5% - this is mainly just to get the generous contribution from my employer. I’ll be choosing the pension option with the least exposure to risk for the time being - I think there’s one that equates to cash on deposit. When the markets stabilise for a 6-9 month period, I’ll then consider moving over to an option with more growth potential and accompanying risk.

So in summary, I think my own finances are showing some short-term volatility but overall I’m generally on target for my medium and long term goals.

I’ve been sceptical about the value of the ISEQ for some time now and as a result I haven’t started a pension again since moving jobs almost a year ago. While the employer contribution and tax reliefs on pension contributions are great and mean that you’re unlikely to lose based on your own contribution to a pension I’ve decided to sit back and wait things out for a while. Once the market has stabilised somewhat I can then join the pension scheme and get the benefit of the tax relief by making either a lump sum deposit or regular additional voluntary contributions.

(Disclaimer: I’m not advising anyone else to do this, it will all depend on your own circumstances - this blog is not giving any financial advise, I am just detailing my own circumstances.)

Before you take out a mortgage loan, confirm the fact that you are getting into an interest only mortgages deal or not. The next step should be the mortgage calculators. You should have a definite plan of paying back the mortgage before getting into the deal.

I feel sorry for Bernanke, it was always going to be very difficult to follow Alan Greenspan but his inability to win over the trust and confidence of the main market players has exaserbated the problems he faces as the US enters a period of negative growth. I thought the rate cut on Tuesday was a bad idea from the start. Showing that you’re willing to take decisive action can be a good thing but only if you have made the right decision. It’s looking increasingly likely that Bernanke made his decision without access to all the facts, in light of this one must question the wisdom of the decision that was taken. Would the Fed have made the same decision had they been aware of what was going on at SocGen? I’m not so sure they would have. Either way it looks like there will be plenty more twists and turns before this story is played out fully.

The Fed Reserve interest rate cut, a whopping 75 basis points, is a clear indicator that they are panicked. Is Helicopter Ben is trying to avoid or lessen the immediate effects of a US recession? Will this cut lubricate the credit markets and precipitate a corresponding drop in the inter-bank lending rates? I’m far from certain that they will, everything I have read suggests that the issues are too big to be resolved with an interest rate cut. I’m sure the news of a rate cut in the US will have raised the hopes of over extended Irish borrowers that the ECB will follow suit. But can the ECB even contemplate cutting rates with inflation 50% above their target of at or just below 2%? I really don’t think they can and hope to retain credibility, though I’m sure there are plenty of politicians who could care less about the bank’s credibility at this point in time.

The ISEQ has rallied since the rate cut was rumoured earlier today and after trading 4% down early this morning, it’s now 2% up on it’s opening price today, currently standing at just under 6,400. My gut feeling is that this bounce is going to last a day or two at most and then reality will kick in again and the ISEQ will continue to drop at the same kind of rate that we’ve been seeing since the new year began. How sure am I? Not at all sure, I’m just speculating wildly, I’m not confident enough in my predictions to put any money on it.

That is part of the problem at the moment though, there is so much uncertainty around that most people are content to sit on the sidelines and wait out the storm. Personally I think things are going to continue to get worse. In relation to the Irish markets, I can’t see where any good news is going to come from to lift the market. Unemployment is at it’s highest for 4/5 years and growing, the property market is collapsing, wages for large sectors of employees are stagnating and exchequer revenues are tumbling at the same time as the government announce huge spending plans. In the midst of all this uncertainty, governing has almost ground to a halt as government ministers try and save the tail of a Taoiseach who can’t even provide a tax clearance certificate to prove that he is in compliance with the country’s tax code.

So is it all doom and gloom? I don’t think it is. What’s happening now is painful but ultimately this unwinding of complex investments is a good thing in the long term. If even the most sophisticated of banks can’t accurate guage the value of complex debt bundles like CDOs then people have no business in trading them. It would seem logical to me then that people would rush to put their money in something simple that they can understand, like gold and deposit accounts. I’m glad I have the majority of my savings sitting in high interest accounts earning 7% at times like this.

A quick check of the forum at A Random Walk proved fruitful though. The Property Pin is still accessible using the following link: http://67.18.114.146/

Whether it is medical insurance we are talking about, or something as mundane as pet insurance, knowing the insurance quotes before hand gives an extra edge. One should also abstain from getting into deals of cheap car insurance and similar policies.

Given the recent turmoil in the markets and the pressure that has come on the ECB to hold the anticipated rate cut, predicting the outcome of todays decision is a lot less clear cut than normal. The Fed was expected to cut rates but now has hinted that they may hold firm, as ARandomWalk says, it’s all getting very confusing. All the same, I’m going to put my neck on the block and say that the ECB will follow through on last month signal (”strong vigilance”) to raise rates again. If I’m right, then I predict something of a riot on the trading floor this afternoon.

Update: Looks like I was wrong and the ISEQ has bounce back 50 points so far this afternoon. Now to see what JCT has to say for himself.

In contrast to the US system where you can frequently see online ads for agencies who will calculate your credit score for you and even allow you to subscribe to a service that will track changes, here in Ireland there is only one way to access you’re credit history, and that’s through the Irish Credit Bureau.

Now, when I visited the ICB’s website last year, I was surprised to learn that I had to fill out a paper based application and post it to them in order to receive my credit history. I was further shocked when I learned that I couldn’t even download a copy of the application form, though they did have a facility to request one be sent out to customers. I duely requested an application form but as is often the way with less urgent paperwork like this, it slipped through the cracks and I only recently went looking for my valuable application form again.

By chance, I also decided to revisit the ICB’s website, where this time I was surprised and delighted to learn that it was no possible to order and pay for my credit report online. I immediately filled out the online form, entered my credit card details for the €6 processing fee and 3 days later received a nice clean credit report.

Now I know a credit report isn’t important to most people, most of the time. But when it comes to looking for approval in an increasingly tough credit market, knowing the information that your lending institution will be basing their decision on could prove very valuable and the convienence of being able to order that online, rather than needing to visit the post office and apply for you report via snail mail has to be welcomed. So well done to the ICB - hopefully making this kind of information available online to the general populous in the same way as our tax details are now accessible will be their next step.

Keeping track of your credit score is one way of maintaing good credit. Sift through credit card offers with ease to find 0% intro rates on purchases and balance transfers. Browse and compare at CreditCardGuide.com.

The Pledge:

1. To demand that my country join an international treaty within the next two years that cuts global warming pollution by 90 percent in developed countries and by more than half worldwide in time for the next generation to inherit a healthy earth;

2. To take personal action to help solve the climate crises by reducing my own C02 pollution as much as I can and offsetting the rest to become “carbon neutral”;

3. To fight for a moratorium on the construction of any new generating facility that burns coal without the capacity to safely trap and store the C02;

4. To work for a dramatic increase in the energy efficiency of my home, workplace, school, place of worship, and means of transportation;

5. To fight for laws and policies that expand the use of renewable energy sources and reduce dependence on oil and coal;

6. To plant new trees and to join with others in preserving and protecting forests; and,

7. To buy from businesses and support leaders who share my commitment to solving the climate crises and building a sustainable, just and prosperous world for the 21st century.

While I’m sure Daft’s figures are correct their presentation is misleading. Would it be too much to expect them to highlight instead some of the statistics that their commentator, Constantin Gurdgiev, economist and editor of Business and Finance magazine, picked out such as “In Dublin, second hand properties prices fell by 3.0% in Q2 2007 – down 5.2% for the year to date.” I guess it probably would. Also I think some of my annoyance is that I have in the past defended the credibility of the Daft report. I think it’s clear from this latest report how the directors of Daft want to spin things. The one saving grace of the report is the excellent analysis of the property market by the aforementioned Gurdgiev.

EDIT: Ignore the next paragraph, the ESRI/PTSB index isn’t to be trusted either - see comments.

If you want some accurate figures on the state of the Irish property market, check out the ESRI/PTSB house price index. For a good summary of the 2nd Quarter Daft report, check out Blah Blah’s latest post.

Every Second Paycheck: The blogger at Every Second Paycheck had a habit of letting money slip away at the hands of “mysterious forces.” Frustrated that a decent salary was going to waste, this person now makes it a goal to live off of he funds from every other paycheck.

It’s nice to get referred to on lists like this. It’s also nice to give ideas to others be in in regards to saving or looking for a new job. All these things help keep me on the straight and narrow when it comes to meeting my goals.