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FNB's Financial Focus
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Protecting and Growing Your Assets
January 2008
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Greetings!
Today it is impossible to watch television, read a
newspaper, listen to the radio or have a conversation
without referencing the state of the economy.
The subjects invariably addressed are inflation and
recession concerns.
Inflation is one of the most important variables
in economics, impacting everything from food prices,
mortgage rates, oil prices, international trade, and
countless other economic activities.
The Fed says recession risk trumps inflation
fears. Is the economy on the verge of a recession or
already in one? According to a recent CNN Poll, 57
percent of Americans thought we were already in a
recession a month ago. Economists may complain
that this is only because the public is ignorant of the
technical definition of a recession.
Read this month's issue of FNB's
Financial Focus, "EYE ON THE ECONOMY:
Understanding Inflation and Recession,"
to learn more.
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What is inflation?
Definition from The Economist
The Economist, an authoritative weekly
magazine focusing on international politics and
business news and opinion, provides the following
definition for the layperson.
Inflation is rising PRICES, across the board.
Inflation means less bang for your buck, as it erodes
the purchasing power of a unit of currency. Inflation
usually refers to CONSUMER PRICES, but it can also
be applied to other prices (wholesale goods, WAGES,
ASSETS, and so on).
See financial glossary for additional definitions...
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What is a Recession?
Broadly speaking, a period of negative
economic GROWTH, usually accompanied by rising
unemployment. Economists have a more precise
definition of a recession:
- when Gross Domestic Product index,
GDP,
growth is negative for two consequitive quarters or
more.
However, you can feel like you are in a recession
before it has officially started because it is usually
preceded by several quarters of slow growth.
Read on....
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Bernanke to Cut Rates Further, Faster to Buoy Growth (Update2)
Recent Fed's emergency rate cut signals a dramatic shift by policy makers
Federal Reserve Chairman Ben S. Bernanke has
decided inflation concerns have faded enough to let
him cut interest rates further and faster to keep the
U.S. and the rest of the world economies from lapsing
into a recession.
The Fed's emergency rate cut of Fed Funds rate last week
signals a dramatic shift by policy makers hoping to
reverse the economy's decline. It indicates they now
see a risk of lower home and stock values feeding
back into tighter credit conditions that threaten to
choke off growth,
economists said.
Read full article from Bloomberg reporter in Washington
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FNB News: Fight Back
FREE Identity Theft Seminar
Identity theft is on the rise, but there are measures that
citizens can take to protect themselves and their
assets.
Join us on Wednesday, February 13, from
2 - 3 p.m., to learn about the important steps that
will preserve your good name and protect your
financial wellbeing.
The seminar will be presented by Milissa
Lenahan, Vice President of Security, with First
National Bank. Seating is limited, so call to
reserve a place at 215.860.9100. Location is the
First National Bank
Operations Building at 9 W. Centre Avenue
in Newtown Borough.
To learn more about identity theft please visit our website...
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We hope you found this eNewsletter useful
and
informative. Do you have a topic that you
would like
to see addressed in the coming months?
Please let us
know.
FNB's Financial Focus
First National Bank of Newtown
phone:
215 860-9100
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