Fed Chairman Ben Bernanke announced on Wednesday that the Fed is considering another round of Treasury bond purchases (QE3) to ensure lower interest rates and spur economic growth in the U.S as reported by the Associated Press. While U.S. markets responded positively, Asian markets today are not as optimistic.
The Chinesehave indicated that they do not support another round of bond purchases because it would increase the cost of commodities thus hurting their economy and thus they may need to consider restructuring the amount of U.S. debt they hold. Currently China holds $1.15 trillion of U.S. debt.
Additionally, Moody's threatened to downgrade the U.S. bond ratings. Bonds would be downgraded from AAA to a slightly lower grade, requiring higher payments to attract investors.
President Obama and Republican lawmakers have yet to reach agreement over the debt ceiling with Obama walking out of the latest session.
Gold is at a new record
Gold surged by 1.4% to a peak of $1,587.46 per ounce, according to the Financial Times. While this is the highest value in recent years, it remains below the 1984 peak value of $2400 per ounce.
Foreclosure delays will stall US housing recovery
The USA Today reports that real estate experts indicate that the ongoing delay of foreclosures will continue to postpone the housing market recovery. While delays are due to many varying reasons from the banks stopping to review records due to legislative pressures - as well as new laws extending the foreclosure time on FHA loans, zillow.com reports that home prices can't recover until the distressed properties are no longer on the market. Zillow indicates that homes prices remain down 30% from 2006. In May, 31% of homes purchased were distressed properties. The properties sell at a 20% discount compared to others.
Credit Suisse planning layoffs
Swiss bank, Credit Suisse, is planning to lay off 1500 workers, almost 3% of its workforce, according to the Wall Street Journal. The layoffs are blamed primarily on the impact of other currencies, such as the dollar and the Euro, on the Swiss franc. The franc, which has remained strong, has eaten away at revenue and assets compared to other currencies. The largest portion of cuts will be in the investment banking division (600 people) as well as in the Private Banking division (500) in Zurich. UBS is also laying off 250 individuals in Zurich.
Senate calls for phone companies to disallow cramming
According to Fox News, 15-20 million Americans have found small charges from outside parties on their phone bills in recent years. In many cases these charges are found months after they have occurred and the phone companies are reluctant to remove these charges. The Senate Commerce Commission indicates that these charges amount to $2 billion annually and are known as "cramming". The FCC is currently considering a law that requires phone companies to notify customers that they can block third party charges from their bills. Many phone companies offer that service today, but few Americans know that this service is available or that they should even be watching for these charges.
New laws protecting passengers limit protection for baggage
As the Transportation Department seeks to finalize its new laws protecting passengers, one large gap remains, according to USA Today. While airlines remain responsible for bags that are lost, meaning never returned, they do not have responsibility for any retribution to passengers for luggage that merely arrives late. Many passengers are now demanding their charges to be refunded if the bag does not arrive with them on the plane. In 2011, the airlines charged $3.4 billion in baggage fees. According to SITA, a technology company owned by the airlines that tracks mishandled baggage, 12.07 bags were mishandled per each 1,000 customers. Additionally, 0.43 bags were lost and never returned for every 1,000 customers. Today, some airlines will refund fees for delayed bags but this is not a requirement. Passengers must remain diligent and ask for refunds.