Markets in Europe are down in the beginning of the day due to Moody's downgrading of Spain's debt to a Aa2 rating, as reported by the Associated Press. Moody's blames the downgrade on Spain's low estimate of the cost of restructuring its banking system. Spain's finance minister disputes the rating and feels that Moody's should have waited until their official report is released later this week.
Bloomberg reports that, in addition to the Spain downgrade, increased fighting in Libya and greater than expected Chinese trade defecit of 7.3 billion, are also impacting the markets.
Yet, also reported by Bloomberg, Birinyi and Associates, the firm that encouraged investors to begin buying on March 9, 2009, when the market hit its lowest point, is still encouraging investors to buy as the market creeps closer to its all-time high. Their belief is that the bull market is "sustainable and durable" and that investors who have missed the early rise still want to "catch up" and are investing now.
Forbes magazine released its list of 1,210 billionaires, with Mexico's Carlos Slim Helu ranking as the wealthiest person in the world. Bill Gates and Warren Buffett have slipped to nos. 2 and 3, but this is primarily because of their pledge to give half of their wealth away, which is what they are in the process of doing. There are 413 billionaires in the U.S. The BRIC countries have 301 billionaires, exceeding the number of billionaires in Europe.
The Financial Times indicates that the U.S. is not alone in reassessing its funding of public pensions. Lord Hutton, a former Cabinet minister, proposed that an average salary over the lifetime of an employee be used as the pension calculation rather than the last few years of service. Additionally, the retirement age should rise from 60 to 65. Of course, those already in the system would be protected and the new rules would only apply in the future. This proposal, of course, was met with great criticism from worker's groups.
In an article in the American Banker, a TD Ameritrade study indicates that young Americans are more likely to rely on websites as their primary source of investment information rather than use a financial advisor. Fifty two percent of Gen Xers (those 35-46) and 64% of Gen Yers (those 22-34) are most likely to turn to websites for financial issues.
Senators McCain (R,AZ) and Kerry (D,MA) are sponsoring a bill, according to the Wall Street Journal, which will be the first comprehensive privacy law regulating the internet. It will require a company to get your permission before sharing any information about you with third parties. Additionally, you will have the right to see any information. The bill is focused on limiting the "tracking" that occurs when individuals go to multiple websites and the information is then shared with other companies for marketing purposes.
A store that did not quickly develop its online presence but has been a staple for Gen X and Gen Yers is finding ways to regain profitability. American Eagle, a store that was very popular during a time when kids hung out at malls has, according to the Wall Street Journal, been impacted by the fact that kids now stay at home and go online. American Eagle had 208 stores in 1994. That rose to 954 in 2008 but now the chain plans to cut back to about 900 stores. While the store has 4 million Facebook fans, only 11% of its sales come from online, unlike J.Crew who reports that 30% of its sales are online.
USA Today reports that Washington,DC is the most socially networked city in the U.S. This is from a story in the April edition of Men's Health. The worst city for social networking is El Paso, Texas.
And another Texas downer....according to a Fox Business News story, Experian released its cities with the highest credit card debt at year end 2010. San Antonio led the list with the average credit card debt of $5,177. The average U.S. household has $4,200 of credit card debt.