A Reuter report has stated that financial analysts are predicting that banks worldwide could lose as much as US$400 billion from subprime mortgages. This prediction is a result of at least one in four risky home loans going into default.

According to the report, Mike Mayo, an analyst at Deutsche Bank Securities Inc., estimated US$150 billion to US$250 billion of losses based on US$1.2 trillion of U.S. subprime loans, and an additional US$150 billion of losses on derivatives linked to subprime debt.

David Hilder, a Bear Stearns & Company analyst, also estimated a US$150 billion to US$250 billion loss on subprime home loans, in what he called a US$2 trillion market.

"Given our fundamental outlook, which is for rising inflows of non-performing loans in both mortgage and commercial loan portfolios, we believe the odds are in favor of the write-downs getting worse, rather than better," this year, Hilder wrote.

Banks including Citigroup Inc., Merrill Lynch & Co and Wachovia Corp have announced more than US$40 billion of write-offs this year as U.S. foreclosures set records and after investors stopped buying many kinds of risky debt.

Over the past six months the financial and housing market have been undergoing a severe battering resulting from subprime loans that were made to homeowners, who would not have normally qualified for such loans. Borrowers of subprime loans included several people in Caribbean communities in Florida and across the U.S., were overjoyed at being able to secure what they believed to be extremely attractive loans to enabling them to realize the core of the American Dream – owning a home. However, when the real terms of these loans became effective 3 to four years after the loans were closed, hundreds of people were unable to meet the increased payments resulting in delinquent loans, foreclosures, and huge losses for lenders.

Last week, we explored how to compile an income and an expense budget. We said where expense exceeds income there is a budget deficit, and, where income exceeds expenses, there is disposable income.

Unfortunately, it is the deficit that a lot of us find ourselves dealing with monthly. There is often just not enough income to meet the expenses, even those inescapable expenses of rent/mortgage, car payments, electricity, groceries, etc.

One good thing about compiling a monthly budget is that it indicates if a deficit will be incurred so you make the appropriate arrangements to remedy it. This is much better than just drawing checks, or issuing debt cards, only to have the checks returned and debit cards rejected because of insufficient funds.

First, to let your monthly income meet budgeted expenses, you have to adjust some of the expense items, by spending less. Items such as rent/mortgage and car payments are impossible to adjust, plus it is unwise to miss them or make the late. You have to look at what are called “elastic” expenses for the adjustment. Elastic because you have the ability to expand or contract them. Elastic expenses include groceries, lunch, dining out, gas, entertainment, and clothing. In order to make the budget balance – expenses match income – one can contract grocery expenses by buying just the basics for the household. Saving $2 or $3 here and there will add up. If you are accustomed to dining out two or three times a week, this can be reduced to one or simply eliminated. Gas prices are now sky high, so you can save on gas by doing only the essential driving. This can take your weekly gas budget from $100 to $70.

While borrowing money to meet the deficit seems like a quick fix, it is not encouraged. Loans have to be repaid and they incur interests – that means spending more money that you don’t have and this escalates the expense budget for the next month or months.

It is very important to understand the virtues of making a budget to cope with the rising prices that are certain to follow the sharp rise in the price of oil, now at an all time high of $93. Although the Federal Reserve is trying to counter its inflationary effect by announcing another cut in the national interest rate to 4.5 percent, consumers are still going to incur pressure on their pockets over coming weeks.

Budgeting takes supreme self control. In some ways it is like New Year’s resolutions – we write them down, but they are hardly ever kept. However, it’s important to write your budget, preferably on a monthly basis, a few days before the start of a new month.

First write down your monthly income. This could consists of a combination or one or the other of salary, child support, alimony, pension, social security, partner draw, etc. but whatever is included as income must be funds that are certain to come in.

Next compile your expense budget. It is best to compose your budget chronologically, with the expenses that come earlier in the month listed first. For example, if the rent or mortgage is due on the 1^st of the month this should be the first item on the expense budget, car payments due on the 3^rd, then this should be the next item and so on. This order ensures that the income budget can meet the early expenses. Most expenses have a due date, and part of budgeting is to structure the budget that the bills due on specific dates can be met on those dates, to prevent late charges, and ruining your credit.

It is important to ensure that payments are not bunched up at a particular period of the month, as this usually over extend income budget. In terms of priority, always ensure that there is enough income to cover the cost of rent or mortgage, and electricity, which are usually due in the first five days of the month. Try not to have car payments and credit card bills due at, or around the time as the rent/mortgage and electricity bill. Many people get paid every two weeks, and normally the first paycheck is just enough to cover rent/mortgage, electricity, and groceries.

With the fast developing telecommunications market and the many competitive services available, Superbird Telecom, Inc. has thrown its hat in the ring with the launch of its revolutionary flat-rate international telecommunications service.

The Miami-based company launched the service in the South Florida market and began offering its one-of-a kind service to the public on October 17, 2007. The company allows customers to place unlimited calls to over 100 countries for a flat monthly rate of $49.95 without equipment or contract.

“We have launched a very unique international calling service. While there are other international calling services on the market, like phone cards, Superbird provides an exceptional product that is both convenient and economical, works with all major cellular and home phone service providers, can call any home or cellular virtually in the world and requires no additional equipment and no internet connection”, said Marvin McFarlane, General Manager of Superbird Telecom. “Our research also shows that many phone cards do not allow international callers to call a cell phone and eat up the value of the phone card with call origination fees.

Superbird Telecom’s service primarily targets people who communicate with family, friends and associates throughout the Caribbean, Europe, Latin America and Asia. A series of market analyses indicate that the number of international phone calls originating in the United States has increased more than 30 times in the past twenty years, going from 200 million a year to 6.2 billion per year. This is due, in part, to the increase of the number of immigrants in the United States.

According to a representative, South Florida is a perfect place to launch the Super Bird Telecom product as this market is over 150 percent more ethnic than the rest of America with huge influxes of residents from Latin America, The Caribbean, Mexico and Europe. Projections already indicate that between 2007 and 2011 the percentage foreign-born population will grow by an estimated 6.55 percent – that’s over ten million people.

For more information on Superbird Telecom call 1-800-780-8207 or visit www.superbirdtelecom.com.

Most of the residents in our community have heard the news that the world price of oil has again risen to currently approximately $90 per barrel, with speculation that it could rise as high as $100 per barrel soon. Of course, the rise in oil prices is nothing new, as these prices which are controlled by the oil producing countries (OPEC), have been rising for the past few years. This creates frequent mini crises, as consumers, especially the operators of motor vehicles, face higher prices at the gas pump each time OPEC raises its price.

OPEC is often responsible for the fluctuating gas prices at the pump, as well as the rise and fall in other costs, which are directly or indirectly affected by the price of oil. OPEC seems playing a game of with the rest of the world, which has become so used to the frequent fluctuation of oil and gas prices, so that very few people think of the long-term negative effects of a serious rise in oil prices.

As most of the Caribbean community will recall, gas prices rose to just over $3 per gallon in the summer, a traditional peak for motorists, with the related high demand for petrol. Since summer prices fell to an average of $2.69 per gallon this year, and OPEC price fell to an average of $69.25 per barrel, some people now have a false sense of security.

However, since then, OPEC has forced the price up to the $90 per barrel mark, and once more, consumers are hurting whenever they buy gas, and with the demand for oil bound to increase in the winter months, which are almost here, consumers must plan for a long haul of high gas prices.

Members of the Caribbean community must begin, assuming some do not, to become very serious about budgeting. The rise in OPEC oil prices does not only affect the price of gasoline and direct oil products, but it has an effect on almost every consumer product and service. For example, all the goods delivered to the neighborhood supermarket is transported by delivery trucks owned by companies paying more for oil, so this is passed on to the grocer who in turn increase the price of the goods in the supermarket.

There is the same ripple effect on the price of other end products like clothing, household products, bus ticket and airline tickets and services, like electricity. There is no doubt that the U.S. dollar, which is steadily losing value on the international currency market, is shrinking further. One of the ways of coping with this is to budget carefully, placing inescapable expenses like rent/mortgage/ food, electricity, school fee, medicine, healthcare, petrol, car payments, high on the list. Consumers must be very selective in their expenses to be sure that they avert serious crises in their domestic spending. If the choice is between a movie ticket and milk for the children, the choice must be the milk. People must seriously think of the value of their purchase before they spend their money.