The Associated Press indicates that world markets are down on Monday due to the results of the European stress tests on banks as well as the impending U.S. debt crisis. The Financial Times highlighted the results of the European Stress tests performed on banks indicating the banks in Spain and Italy were the strongest performers. European Banking Authorities found a shortfall in only 8 banks. Sixteen banks, however, were marginal. Yet some commentators feel this could be regarded as a positive sign as the Euro Zone enters continuing talks regarding the Greek debt restructuring.
Multi-family housing may be bright spot in upcoming Commerce Dept. Report
The Commerce Department will release its housing reports this week with multi-family housing anticipated to the bright spot of the report, according to the Wall Street Journal. As of May, multi-family housing was up 50% year on year as more families choose to rent rather than buy. While interest rates are at an all-time low, the ability to obtain credit is very difficult. Single family housing, in contrast, was down 9% in May from a year earlier, which is still down significantly from the highs experienced in 2006.
Conference call on Greek default Wednesday
The Financial Times reports that on Wednesday the European Central Bank will discuss in detail the analysis conducted regarding various scenarios of how to deal with the Greek default via conference call to European leaders. The question is whether the existing bonds are used as collateral and renegotiated or whether all are re-issued and private investors, rather than other European countries, increase their ownership of the debt. The head of the European Central Bank has indicated that defaulted bonds cannot be used as collateral. Germany's Prime Minister Merkel strongly disagrees. The Associated Press reports that on Monday, Greek taxi cab drivers are blocking roads to the airport and port in Athens to show support of those who do not support austerity measures.
U.S. Failing to Lead?
The World Bank President, Robert Zoellick, stated that the U.S. is failing to take responsibility and assert its leadership in the world economy. Zoellick was highly critical of the policies of the Obama administration in regards to the "Doha" talks. The administration indicates the Doha talks were set up in 2001 by George Bush and the structure does not allow them to be successful. Zoellick indicates that some of the debt crisis discussions are directly related to making the talks successful. One example is that subsidies to U.S. ethanol and agriculture need to be cut which will allow developing countries to compete more effectively in these markets.
Coffee markets perking
Multinational companies are wooing independent coffee growers and offering them significant amounts of money for their crops. This jeopardizes the coffee markets which have traditionally operated on a coop system. According to the Wall Street Journal, small farmers have traditionally joined coops that negotiate the price of the crop to gain leverage with buyers. This year the prices increased dramatically after the prices had already been agreed upon, causing farmers to break away from the coops. Coffee futures have increased 53% in the past year.
Links to a cause increase consumers price tolerance
According to the USA Today, consumers are willing to pay more for products that support a cause. In a study done by Edelman Purpose, a cause marketing firm, consumers indicate that "purpose" exceeds design, innovation or brand when buying an article. Additionally, half ranked "social purpose" as as the number one factor to purchase an item.
Shoplifting increases but not by whom you would expect
The National Retail Federation indicates that shoplifting increased by 11% in the past year up to $3.6 billion. According to the USA Today, the primary culprits for the increase are employees stealing from their corporations. Experts indicate that workers feel they have been working longer hours, most without a raise for several years, and thus they feel overworked and underpaid. The feeling of desperation has led to the increased shoplifting....justifying the feeling that they deserve more.