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APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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News Analysis For The Investor On Nov. 23, 2011

Economic growth slower than expected in third quarter.

| BY Catherine McBreen


Economy grew more slowly over the summer than originally predicted

The Commerce Department said on Tuesday that the economy grew at an annual rate of 2 percent in the July to September quarter, lower than the initial 2.5 percent estimate made a month ago, as reported by USAToday.  After tax income also fell by the largest amount in two years, reflecting high unemployment and lower pay raises. Economists predict that growth will strengthen to 3 percent in the fourth quarter.  Unemployment rates fell in 36 states in October, according to the Labor Department and only rose in 5 states.

Steep fall in China’s Purchasing Manager’s Index creates worries of global recession

The HSBC flash purchasing manager’s index, or PMI, in China fell from 51 in October to 48 in November, according to Reuters.  This is the lowest rating since March 2009 and indicates the factory sector is shrinking.  A reading of 50 or above indicates that the sector is expanding.   While some predict that this could mean that China is slipping towards a hard landing, other experts indicate that this means  China will focus more on its own domestic growth.

European stocks bouncing

European stocks bounced up from early losses on Wednesday due to a better than expected PMI, Purchasing Manager’s Index, for the euro zone. This report offset poor reports from China, according to the Wall Street Journal. The increase offered some temporary relief as even Germany had trouble selling its bunds.  Germany sought to issue $8.1 billion bunds but managed to sell only half at a yield of 1.98 percent.  The European Central Bank purchased Italian and Spanish bonds to try to build confidence in the market early on Wednesday.  This is reported to be the largest level of support that the ECB has historically undertaken.  Stocks began to drift downward later in the day.

Foreign exchange traders prepare for dissolution of the euro

The Wall Street Journal reports that CLS Bank International, which operates the largest platform in which banks settle most of their currency trades, is running stress tests to prepare for the possible dissolution of the euro.  Some of the 63 banks that co-own CLS are making similar plans. It is not uncommon for financial institutions to plan for worst case scenarios.  A recent Barclays Capital survey of 1,000 investors indicated that nearly half expect at least one country to leave the euro, up from 1 percent at the beginning of the year.

Federal Reserve to stress test six large U.S. banks

The Federal Reserve has announced that it will stress test six banks with large trading operations against a hypothetical market shock, including a deterioration of the European debt crisis, as part of an annual review of bank health, according to Reuters.  The banks include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.  In the stress scenario, unemployment would spike to 13 percent and GDP would fall by 8 percent.  Banks must submit capital plans by January 9, 2012 and the Fed will respond by March 15.  Under Dodd-Frank, the Fed is required to stress tests banks with over $50 billion in assets.  These stress tests for the larger banks are separate from the Dodd Frank requirement.  In total, 19 banks that have already been tested will be included in some type of test this year with an additional 12 added to the list.  Information and results will be disclosed.

Venture Capitalists are mostly White Men

A report by the National Venture Capital Association released what it called a census of its members this week, as reported by the New York Times.  In the report 87 percent of members were white, 9 percent Asian and 2 percent black  or Latino.  An additional 2 percent were mixed race. Only 11 percent of professionals were women while two thirds of the administrative jobs were held by women.  The report was done due to a flurry of publicity from a provocative CNN documentary highlighting the lack of African Americans in the technology blogosphere. Clearly the CNN report was correct.

About the Author

Catherine McBreen

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.