Markets unstable after Dow lost 6.4 percent
Last week the Dow fell 6.4 percent, marking the worst loss since October of 2008. According to the Wall Street Journal, it is anticipated that this uncertain environment may continue as many fear a global recession impacting even the emerging economies. Last week the Dow closed on Friday at 10,771, a drop of only 37 after larger losses earlier in the week.
Global fears are based on the falling price of copper
Copper is an indicator of growth because it is used to build homes, bridges, appliances and other goods which indicate people are building and buying. Other fears are based on the falling markets in Shanghai, Brazil and Hong Kong. The Chinese economy appears to be slowing but it is unclear if that is due to lower demand for its exports, an overall slower pace due to its unsustainable fast growth, or government controls to calm inflation.
Free checking a thing of the past
The number of free non-interest checking accounts offered to consumers has dropped to 45 percent in 2011 down from 65 percent in 2010 and 76 percent in 2009. The average monthly fee for a checking account, according to USA Today, is $4.37, up 75 percent from 2010. Why the increase? As banks are forced to lower fees due to government regulation, fees in other areas must be increased. The drop in debit card transaction fees received by banks from 44 cents a year ago down to 21 cents today has been a major driver in increasing fees elsewhere.
Synthetic ETFs face possible ban by European regulators
A meeting is to be held today in Europe to discuss the future of synthetic ETFs, and according to the Financial Times, many fear an outright ban of the product. The European Securities and Markets Authority, known as ESMA, had written a paper in July warning against synthetic ETFs. This was before a rogue trader lost $2.3 billion at UBS trading synthetic ETFs. There is a significant difference between traditional ETFs and synthetic ETFs and regulators insist that traditioanl ETFs are safe. Opponents of the ban indicate that ETFs are more openly disclosed than other types of funds.
Gold is falling
After reaching a peak of nearly $1900, gold has fallen precipitously in the past week. CNBC experts predict that it may bottom out this week at around $1500. Others worry that the bottom may be between $1100 to $1200.
Luxury housing market is up
Unlike the traditional housing market which remains in the doldrums, the US luxury housing market is up .7 percent since February. The luxury market includes those houses in the $1 million plus market. Traditional housing remains down 30 percent since its peak in 2007. According to USA Today, the reason may be that credit is available to rich households, unlike more traditioanl consumers. Additionally, much of the growth in the luxury market has been due to international buyers. Almost $82 billion of luxury purchases were international in 2010 compared to $66 billion in 2009. The rising luxury market, however, is not enough to spur the overall housing market back to prosperity.