Dow rallies 340 points.
The Dow soared on Thursday based upon the European Deal and strong US economic information.
The Dow gained 340 points on Thursday closing at 12,208. October experienced the greatest monthly gain since 1987. The first of the drivers of the gain was the announcement of a deal in Europe to bail out Greece and control the European debt crisis. The other key driver was that the US GDP grew 2.5% in the third quarter, much higher than predicted, according to the Wall Street Journal. While European markets are strong on Friday, Dow futures are pointing downwards before the opening.
Greek deal finally in place
The deal agreed to among the EU, the IMF, and the ECB includes a 50 percent loss on the previously issued Greek bonds, accordng to Reuters. Additionally the European banks, some of the largest holders of the bonds, will be recapitalized and supported by their governments and the European Financial Stability Fund(EFSF) will receive an influx of an additional $1 trillion euros. There are still a significant number of details that need to be finalized leaving the opportunity for failure still open.
Investors raising cash to buy foreclosed properties
CNBC reports that the Obama administration has a plan in place to auction off properties that banks have foreclosed upon to investors. This would allow the glut in housing to dissipate. Investors are apparently already raising cash prior to a pilot program. The properties would be Fannie Mae and Freddie Mac foreclosures. Experts predict the US is moving towards a rentership society.
China assists in European bailout
According to the Financial Times, the Chinese are playing a key role in the European rescue plan. The Chinese will allegedly be contributing to the bailout fund with almost $100 billion, however, there may be several restraints put upon the deal. The Europeans will be unable to criticize the way the Chinese control their currency, a key issue for the US. Additionally, the Chinese funds may have to be held in a special fund held in their own currency to avoid market fluctuations. No details on the deal are finalized at this point and the chief of the eurozone fund is currently in China discussing the deal.
Obama writes opinion piece on Eurozone crisis
President Obama was able to take time off from campaigning to write an opinion piece for the Financial Times. In the piece, Obama mentioned four things that must occur in the near future to overcome the global recession. First, America must get its own economy growing and reduce unemployment. That is why he is pushing his Jobs Act. Secondly, the European debt crisis must get resolved. Third, the European countries must confront their fiscal challenges, and finally, the G20 nations must cooperate with one another more fully.
Google purchases 27 companies in Q3
Google purchased 27 companies in the third quarterfor a total of $500 million, according to USA Today. The most expensive was its purchase of Zagats for $151 million. Google spent $1.4 billion on acquisitions this year through the end of September.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.