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Morning Market Roundup: German Energy Tax, Inflation Eases in China, Social Sec. Benefits Increase

Oct. 15, 2012 9:34am

Here’s what’s important in the business world this morning:

Germany: Germany’s tax on households’ electricity bills to finance the expansion of renewable energies will rise almost 50 percent on the year as the country pushes ahead with phasing out nuclear power within a decade.

The country’s four main grid operators say Monday that the tax will rise from €3.6 cents to €5.3 cents ($6.7 cents) per kilowatt hour starting in January. That brings the annual cost of financing Germany’s energy switchover for a family of four to about €250 ($324) per year, including sales tax.

The tax is used to pay producers of solar, wind or biomass power guaranteed above-market rates to ensure their investment will be profitable.

Renewable energies currently produce a quarter of Germany’s electricity but are set to account for 80 percent by 2050.

China: China’s inflation eased further in September, giving the government more room to stimulate the country’s slowing economy.

Consumer inflation fell to 1.9 percent from August’s 2 percent rate, data showed Monday. Politically sensitive food prices rose 2.5 percent, down from the previous month’s 3.4 percent.

The decline gives Beijing more excuse to cut interest rates or boost spending to reverse the country’s deepest slowdown since the 2008 global crisis.

Producer prices contracted 3.6 percent compared with a year earlier, a striking sign of slack demand despite two interest rate cuts since the start of June and higher government spending on building airports and other public works.

Chinese leaders have been moving cautiously in response to the slowdown after their huge stimulus in 2008 ignited inflation and a wasteful building boom. Economic growth fell to a three-year low of 7.6 percent in the quarter ending in June and officials including President Hu Jintao have warned it may decline further before recovering.

Social Security Benefit Increase: Social Security recipients won’t be getting big benefit increases next year, but the small raises they will receive are playing an important role in helping seniors grow their incomes even as younger workers lose ground.

Preliminary figures show the annual benefit boost will be between 1 and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975. Monthly benefits for retired workers average $1,237, meaning the typical retiree can expect a raise of between $12 and $24 a month.

The size of the cost-of-living adjustment, or COLA, will be made official Tuesday, when the government releases inflation figures for September.

Markets: A round of figures showing China’s economy is in relatively good health helped buoy markets Monday, at the start of a week that could offer greater clarity on the economic fates of Greece and Spain.

Germany’s DAX was up 0.8 percent at 7,293 while the CAC-40 in France rose 1.3 percent at 9,434. The FTSE 100 index of leading British shares was 0.5 percent higher at 5,823.

Wall Street was poised for a solid opening, with both Dow futures and the broader S&P 500 futures up 0.4 percent.

Japan’s Nikkei 225 index rose 0.5 percent to close at 8,577.93, snapping a four-day losing streak. Hong Kong’s Hang Seng rose less than 0.1 percent to 21,148.25. South Korea’s Kospi fell 0.4 percent to 1,925.59.

The Associated Press contributed to this story.

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Comments (14)

  • RodT82721
    Posted on October 15, 2012 at 11:35am

    Oh boy, another SS raise! 1.5-2.0% that should really help! Have you bought a pound of bacon lately? Oh wait, you can’t, they have raised the price about 100% and reduced the “pound” to 13 Oz.

    I wonder where Washington intends to get the extra money, since they have reduced the FICA (payroll) tax payments? Maybe the tooth fairy, or better yet Bernanke’s printing press.

    The thing left out of the article is that the mandated monthly Medicare payment, will cover any increase, (always does) so the govt is paying themself for all that savings with Obamacare.

    In fact I have seen estimates that the forced Medicare monthly premium will be over $200.00 in 2014 (it’s $96.00 this year) – after the election is long past.
    The great thing is it really pays for almost nothing, if you want real health insurance, you have to buy what they call a “gap” policy, but you can only do that for short period every year. Those premiums are skyrocketing, again thanks to Obamacare.
    I have always wondered why the govt has to control when you can buy an insurance policy.

    Report this comment

    RodT82721  
  • JohnHW
    Posted on October 15, 2012 at 11:09am

    I have just be notified that my Medicare Advantage will increase 18 cents and this is before the increase in Medicare. Gas is up over 50 cents/gal. It now costs me 3 hours of work just to pay for the gas to get to work for 14 to 18 hours/week. My breakfast of Oats and Honey has gone up by over a $1/wk in the last year. After I retired 5 years ago, I had steak twice a week. Now, it is maybe once every other month (it has almost doubled).

    And, I PAID for Social Security every paycheck SINCE I WAS 15 (54 years ago). So, I say to the politicans – DON’T EVER SAY THAT IT IS A BENEFIT. Just take what I have paid into SS and give it to me, PLUS the interest an average savings account, compounded daily as every bank does that I could have made, and I would be geting THREE TIMES what I am receiving now and for 30 years.

    Report this comment

    JohnHW  
  • Cavallo
    Posted on October 15, 2012 at 11:08am

    So how will Germany finance the rest of the EU when they can no longer afford to power their factories and homes? I see much crying and gnashing of teeth in the future.

    Report this comment

    Cavallo  
  • Zipit
    Posted on October 15, 2012 at 10:44am

    As it has been stated many times before, the problem is not the people we have elected, implementing these policies, it is the uninformed, apathetic, the willfully ignorant class of takers in our society who vote for them! At what point do enough of them wake up to realize, that the train that they are on, is going to crash, and that there is still an opportunity to GET OFF! Hopefully that moment will hit enough of them in the next couple of weeks, so that we can at least begin to slow the train!

    Report this comment

    Zipit  
  • Ilikepeople
    Posted on October 15, 2012 at 10:33am

    The interesting thing about the media is that they make sure to mainly publicize the findings from mummies who lived during time frames when health issues were rampant.

    Report this comment

    Ilikepeople  
  • afishfarted
    Posted on October 15, 2012 at 10:31am

    I’m really tired of having SSI called a benifit when the monies received are monies the recipient was forced to pay in the first place.
    And secondly, the “raise” is negated by the increase of medicare payments. Some recipients will even see a reduction in their check because the rise in medicare will be more than the overall increase.
    How about the fact that determining the cost of living increase deletes the real cost of living—food and gas. THOSE are the two things that impact seniors the most–not the lower price of televisions, dishwaashers, and housing.
    What a dispicable sham.

    Report this comment

    afishfarted  
  • Ilikepeople
    Posted on October 15, 2012 at 10:27am

    Today “Blind” doesn’t mean the same thing that it meant 2000 years ago. In fact there was rarely a case of someone losing their eyesight back then unless it was from an accident.

    Report this comment

    Ilikepeople  
  • woodyee
    Posted on October 15, 2012 at 10:26am

    I think it says something like “take the log out of your own eye before attempting to help your brother remove his.”

    Young-uns, ALWAYS read your pay stubs. Look at the figures for Fed, State, Local, FICA, Soc Sec, and Medicare. The total is what comes out of what you made. Look at your gas, electric, water bills and add up all the deductions. That’s what you pay in taxes ON TOP of what you paid for usage. Do you know what all those deductions are for? Why NOT? You’re paying it!! Look for a “tax” sticker at the fuel pump – every single one has a tax sticker on it. It lists the taxes that you pay which are include for EVERY gallon of gas you buy. Here in California, it’s pushing $.50cents a gallon, the largest chunk going to the feds.

    No matter how you slice it, when government employees from Gaybama on down (yes, he is our employee) says the “rich” aren’t paying their fair share, they’re talking about YOU.

    Report this comment

    woodyee  
  • oldduffer
    Posted on October 15, 2012 at 10:19am

    We surpassed 14c long ago and went to a progressive 3 tier charge. Elect. bills that were $125 in the summer are now over $300. Harry Reid was responsible for the elect. company charging these higher prices to pay for renewable energy that donated millions to his last campaign. He’s gone so far as to incorporate 3 solar plants into being, and at a cost of 5 to 8 billion just for one. All are being built by a Chinese company. The one located by and on land he owns/owned is being considered and I believe being used for the one in Laughlin Nv. Ever heard the tale of the crooked man who walked a crooked mile? Try a few thousand crooked miles by only one crooked man.

    Report this comment

    oldduffer  
  • lel2007
    Posted on October 15, 2012 at 9:58am

    “helping seniors grow their incomes even as younger workers lose ground.” – I believe the average social security benefit is about $1400 a month, just above poverty level. Are these younger workers who are “falling behind” making less than $16,800 a year?

    Report this comment

    lel2007  
  • Deb C
    Posted on October 15, 2012 at 9:44am

    Local gas prices are $.20 to $.30/gallon cheaper around union auto mfg plants here

    Report this comment

    Deb C  
    • Deb C
      Posted on October 15, 2012 at 11:37am

      Our esteemed “officials” want to increase property taxes that will only cost: $100 each per year for:
      Schools
      Parks
      Zoo
      “operating expenses”
      How the hell is grandma and grandpa going to keep their home with real estate taxes increasing $400/yr

      Report this comment

      Deb C  
  • Ilikepeople
    Posted on October 15, 2012 at 9:41am

    Lol, sure. Apparently people still think the souls of males are worth 50 shekels. And all the news about the market is sorcery.

    Report this comment

    Ilikepeople  

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