US Worker Productivity Falls for the Second Consecutive Quarter
US Worker Productivity Falls for the Second Consecutive Quarter According to a report in Bloomberg, worker productivity fell for the second consecutive quarter, the first time since 2008. Labor Department estimates show that levels will remain low for some time. In 1997-2003, levels averaged around 3.4 percent. This was known as the "productivity miracle" and hopes were that it was indicating the US was moving to a more productive service based economy. Recent levels are less than half of the numbers above. At current productivity rates the GDP will be reduced to $17 trillion by 2016, well short of the amount estimated by the Congressional Budget Office of $19.3 trillion.
Greece shut down by strikes
Greece is shut down due to strikes of various unions and other workers, according to Bloomberg. Garbage was picked up for the first time in more than a week yesterday due to an Executive Order. The strikes are in anticipation of another vote on additional austerity measures being pushed by President Papandreaou. Papandreaou is trying to meet the demands of the other European leaders before the October 23 summit in which a vote will be made to determine whether to bail out Greece.
European rumors driving stock market
Stocks were up 180 points on Tuesday, after having fallen precipitously earlier in the day. The rally was due to rumors that France and Germany had agreed to a $2.7 trillion plan on the European debt crisis. The Dow closed at 11,577. Later reports indicated that no agreement had been reached. The market is expected to fluctuate, according to the Wall Street Journal, as the Europeans attempt to resolve the debt crisis in the next few weeks.
Goldman Sachs reports losses
Goldman Sachs, once considered the best of the best by Wall Street, reported losses in the third quarter and its stock is down 40 percent since the beginning of the year, according to CNBC. Goldman is being forced to return to a more conservative investment banking model, similar to that of the 1980's and 1990's. It lost $3 billion on investments in stocks and bonds this year. Wall Street is projected to lay off 10,000 workers in 2012. This is in addition to the 32,000 laid off since 2008. The State of New York is anticipating a revenue problem. Revenues from Wall Street workers generally represent 14 percent of state tax revenue.
Apple misses estimates
Apple missed a bullish quarterly estimate for the first time in several years causing its stock to fall 6 percent, according to the Financial Times. Analysts were seeking earnings of $7.25 billion but received only $6.62 billion. Apple sold 17.07 million iPhones in the third quarter, up 21 percent from a year ago. Ipad sales were up 166 percent from a year ago, selling 11.12 million units. Even Mac sales were up 750,000 units from a year ago.
Tower to rise in Midtown NYC
CIM Group, a real estate firm known only in the real estate world, has announced it will build the tallest residential tower in Manhattan at a site in Midtown known as 433 Park. According to the Wall Street Journal, CIM purchased the site for $305 million, well below the surging prices earlier in the decade. It will build 128 condos. CIM pulled out of the real estate investment market in 2006 and 2007 and thus did not suffer the fate of other firms. It is still seeking a $700 million loan to begin construction.
California Homeowners Fail to Purchase Earthquake Insurance
You would think that homeowners in the earthquake ridded state of California would all own earthquake insurance to protect their homes in case the "big one" occurs. A new report, however, from the Insurance Information Network of California, and reported in USA Today, indicates that only 12 percent of Californians have earthquake protection on their homes or businesses. The cost of earthquake insurance is around $800 annually. Experts say that if an earthquake the size of the largest quake that occurred in 1857 at 7.9 in the Richter scale were to reoccur, damages would be well over $150 billion, about three times the damages suffered by Katrina.
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.