The Associated Press reports that foreign stocks are rising as oil drops due to the OPEC output report as well as rumors (according to CNN) that Moammar Ghadafy is negotiating for an escape route for he and his family.
Someone is benefiting from the turmoil in the Mideast, and that person is Vladimir Putin. According to the New York Times, Russia is pumping oil at its top capacity and the price of its oil has risen 24% since the beginning of the year. Russia, who is not a member of OPEC, is free to pump as much oil as it desires and its production is currently exceeding that of Saudi Arabia. In recent weeks, French energy producer, Total, bought 12% of an independent natural gas producer in Russia named Novatek. Novatek is running a liquified natural gas project in the Russian Arctic. BP recently invested $7.8 billion in state owned oil producer Rosneft. Social unrest is not expected in Russia due to its older population and relative stability in recent years. Putin was on Russian TV stating "budget revenue has become considerable" and promising a return of contributions to the Sovereign Wealth Funds which were depleted in 2008 at the onset of the Recession.
Another Madoff? A Connecticut financial advisor, Francisco Illarramendi, is facing civil fraud charges for running a Ponzi scheme and impeding a federal investigation, according to Fox Business News. Apparently the advisor's firm, MK Capital Management, has misappropriated assets from a hedge fund that his firm manages. Not only were the funds misappropriated, the advisor went as far as having an accountant from Venezuela write a false letter stating the funds were in a trust in that country. Stay tuned for more as this investigation continues.
Consumers borrowed more in January but credit card debt declined according to the Associated Press. Auto loans rose 6.9% but credit card debt fell 6.4%, its 28th decline in 29 months. Credit card debt is at its lowest point since September 2004. Overall credit rose 2.5% driven by the purchases of automobiles. Michael Green, economist from Barclay's Capital predicts consumer spending to grow 3.5% in 2011 due to increasing consumer confidence in the economy.
The International Monetary Fund, a prestigious group of economists and strategists is meeting this week. According to the Washington Post, discussions will center around dismissing the old belief that central banks need only to control inflation and banks will govern themselves with limited government interference. The new belief systems will center around interventionist governments and the need to control asset bubbles. According to Olivier Blanchard, Director of the IMF, there is a need to understand why and how the emerging economies performed so well during the U.S. crisis and the role of older developed economies in a changing world scenario. He also laughingly declared Dodd Frank as inadequate.
International Monetary Fund members predict that the EU is also unlikely to identify a decisive solution to the long term debt issues in its upcoming meeting. Fox Business News was informed that the EU announcements may be disappointing and upsetting to the markets. A major recapitalization of the financial sector is required and although stress tests for banks are anticipated to be strengthened it is unlikely that an in depth plan will yet be ready for agreement.
Silver closed at a 31 year high yesterday at $35.86 an ounce. USA Today reports that the price of silver has increased 113% since the end of 2009.
Colleges are beginning to move away from a "need blind" admissions policy and return to normal practices in which need is one of the factors in the admissions process, according to Howard Green, education consultant, and author of Making It Into a Top College. Cuts to Pell Grants are anticipated by Congress and could impact as many as 9 million students, Fox Business News reports.
Rising food costs could take a toll on the U.S. restaurant industry this year as many still struggling restaurant chains are unable to raise prices to cover the increasing costs of commodities, Fox Business News reports. Larger chains, such as McDonald's, will not be affected because of their brand, their market share and their ability to hedge the cost of commodities due to their size. Chains that are likely to suffer include Sbarro, El Pollo, Marie Callendar and Perkins restaurants, all of whom are currently in or near the process of bankruptcy.
Scientists are disputing the claims of alien life found in a meteorite, according to the Associated Press. Many believe the bacteria found by a scientist in some unusual meteorite is merely due to bad caretaking here on earth.....besides the scientist didn't have the right credentials, according to his peers, to make this type of discovery. Who could believe someone with the wrong letters after his name?