US Auto sales up in September in unexpected manner
US auto sales increased in September, especially the sales of SUVs and trucks. This is despite high gas prices and poor construction and real estate markets, which are generally the drivers of the sales of these types of vehicles. The belief is, according to the Associated Press, that many trucks are old and need to be replaced, with an average age of 10.1 years. Experts indicate that consumers are also becoming more comfortable with buying products in volatile times. Additionally, there are fewer cars in the showrooms this due to the earthquake in Japan earlier this year, therefore SUVs and trucks are more available. Overall auto sales were up 10 percent from last September with the sales of GM products up 20 percent.
Markets close at lowest level in over a year
The Dow closed at 10,480 on Monday,one of the lowest levels in over a year, according to CNBC. The Associated Press reports that Asian and European markets are down on Tuesday but not as much as on Monday. The Greek default situation continues to influence the markets although the Belgian finance minister, Didier Reynders, indicates that Greece will be bailed out and the firepower of the European bailout fund, the European Financial Stability Fund, will be increased.
House of Representatives expected to approve emergency spending bill
The US House of Representatives is expected to approve the spending bill today that will keep the government going until at least November 18, according to the Associated Press. The disaster relief portion of the bill has already been awarded and passed last week allowing FEMA and other agencies to continue operating. New iPhone to be announced today It is expected that Apple's new CEO, Tim Cook, will announce the new iPhone today. The new phone is expected to be thinner and have a larger screen. The Associated Press believes it will include a more powerful chip and it will include iCloud capabilities.
Eurozone leaders to overlook Greece's failure to meet cuts
According to the Financial Times, the Eurozone leaders are going to ignore Greece's failure to meet the 2011 cuts required by its lenders and to look at 2011 and 2012 together. New concessions are expected to be extracted from 2013 and 2014 budgets. Payments may be delayed until November but a default will be prevented. It is expected that Greek bondholders will be required to take a 21 percent haircut.
President encourages debt collection via cellphone
Hidden amongst the sections of the bill sent by the White House to Congress is a provision that will allow debt collectors to harass individuals for payment via their cellphones, provided it is a debt owed to the government. The Associated Press indicates that not even the Democrats in Congress support the measure. The Treasury Department indicates that it was owed $35.9 billion in just 2010. Collection agencies are allowed to keep 17.5 percent of what is recovered.
UBS reports profit despite trading loss
UBS assured its shareholders that it will be reporting a profit when its quarterly results are announced on October 25, despite a $2.3 billion trading loss by a rogue trader. According to the Financial Times, the bank indicates that changes to its accounting to value its own debt, combined with the sale of some Treasury investments, account for the profit. UBS indicates that its cost cutting remains on track and its capital ratios are solid. Its wealth management business remains strong.
Cattle futures at record high
Despite the fact that US consumers are decreasing their beef consumption, the export of beef has increased dramatically causing cattle futures to reach a record high, according to the Financial Times. The US cattle supply has dwindled to 100 million head, the lowest since 1973, according to the Department of Agriculture. The drought in Texas has been a major factor along with increasing corn prices. Yum Brands increasing in China Some of the beef exports discussed above are going to China where Yum Brands, the US company that owns KFC, Taco Bell and Pizza Hut, has expanded dramatically. Yum Brands biggest operating profit, forty percent, now comes from China, where sales are up 12 percent from a year ago. Sales in the US are down 3 percent and US sales represent only 26 percent of operating profit. The Chinese are now beginning to worry about the health effects of fast food.