Markets anticipate Bernanke will promise stimulus
Asian and European markets posted modest gains on Tuesday as investors speculate that Federal Reserve Chairman Ben Bernanke will hint at more monetary stimulus in a speech later today. According to Reuters, weak US sales data released Monday, in combination with a cut in the International Monetary Fund’s global growth forecast, have bolstered the view that the central banks will take action. Additionally, even German citizens have lowered their economic sentiment indicating the Euro zone crisis is also impacting its largest economy. The Dow closed down 49 points on Monday to end at 12,727.
HSBC to meet with Congress over money laundering charges
HSBC executives will answer questions before a panel of US investigators today after a multi-year probe regarding money laundering activities, according to the Financial Times. HSBC is being questioned by the Justice Department, the US Treasury and the Manhattan district attorney centered upon a Senate investigation. HSBC has been cited twice in the last 10 years for deficient anti-money laundering policies. The bank moved billions of dollars in cash from its affiliate in Mexico to the US, more than any other Mexican bank, despite concerns of law enforcement that the cash was due to illegal narcotics. HSBC is also accused of improper activities with terrorist organizations. The bank could face a $1 billion fine or lose its US banking license.
Goldman Sachs to build in-house private bank
Goldman Sachs, known primarily for its aggressive trading and big corporate deal making, will soon become a private bank to serve wealthy customers around the world, according to the Wall Street Journal. The new private bank will lend money directly to corporations, some of whom already do business with Goldman. The goal is $100 billion in loans, up from the $12 billion at the end of March. The private bank will provide Goldman with a smaller steady income bucket unlike its volatile but lucrative investment banking business. At the height of the financial crisis, Goldman and its rival Morgan Stanley, were forced to become bank holding companies to access funds from the Federal Reserve. Goldman is just now taking advantage of its status as a bank.
Interest rates hit record lows
Interest rates hit another all time low on Monday, which is great for borrowers but bad for savers. According to USA Today, rates on a 10 year Treasury note went as low as 1.44 percent on Monday but ended at 1.46 percent. The Federal Reserve pushed its key fed funds rate to 0, down from 3.5 percent in 2008. Money funds yield an average of 0.03 percent. To get more income, senior citizens are being forced to move into riskier investments since their CDs and savings accounts are paying virtually nothing. At the same time, those looking for a 30 year mortgage will pay only 3.56 percent, another record low.
Coca Cola’s Earnings Beat Estimates
If you had bought one of the original $40 Coca Cola shares, it would be worth more than $10.3 million today, according to the Wall Street Journal. Today only one fifth of its 1.8 billion daily servings comes from the U.S. Analysts today were expecting a decline of earnings per share to $1.18 cents, down from $1.20 a year ago, but Coca Cola beat the estimates releasing earnings of $1.22 per share. Concerns existed regarding weak sales in non-US markets linked to currency issues. Expect the positive results to rally some other stocks today as well.
Man recovers stolen car 42 years later
Bob Russell of Southlake, Texas, recently tracked down his 1967 Austin Healy 3000, which had been stolen 42 years ago from the parking lot of his Philadelphia apartment complex. According to USA Today, Russell saw it listed on eBay, after spending several decades scouring every Austin Healy on the road and regularly checking online sites. The car was listed for sale online by the Beverly Hills Car Club. Russell didn’t have his original police report was able to recoupe the car after showing police the original title and using his key to open the door.
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.