Spain’s borrowing costs frighten markets
Reuters is reporting that Spain paid a euro era record price to sell its short term debt today, pushing it closer to becoming the biggest euro zone country to be shut out of the credit markets. Spain, the fourth largest euro zone economy, paid 5.07 percent to sell 12 month Treasury bills and 5.11 percent to sell 18 month bonds, an increase of 200 percent from a month ago. The leaders of the G20 are currently meeting in Mexico and a communiqué has allegedly been drafted regarding creating a more integrated banking system, however, Germany still rules out mutualizing euro zone debt. Asian markets were mixed on Tuesday but European markets are rising, based on rumors of Central Bank stimulus. The Dow was up slightly on Monday closing at 12,741.
Fed meeting brings hope for intervention
The Federal Reserve is meeting this week and many hope the group will announce new action or at least comment on potential upcoming alternatives, according to the Associated Press. The European debt crisis and the weakening US numbers regarding employment and production cause many to believe that further action is required. Experts believe that an extension of Operation Twist, in which the Treasury sells shorter term securities and buys longer term bonds, is the most likely scenario. The meeting will end on Wednesday and any actions are expected to be announced at that time.
Russia withdraws from shale oil fracturing in Poland
At the moment, the U.S. is ahead of other countries in being successful at shale oil development, according to the Wall Street Journal. Recently, Russia and Exxon Mobil walked away from a Polish shale development project which is unfortunate for Poland since it relies on Russia for 60 percent of its oil. Some of the factors contributing to the success of these projects in the US compared to other countries is the oil services industry and pipeline structure that is available in the US. Additionally, the US has developed mineral rights and financial markets that incent landowners to allow drilling and drillers with the means to manage their risk. Exxon will continue to help Russia develop oil in Poland and other places, but the development is much likely to be slower than what is occurring in the U.S.
Walgreen’s to expand internationally
Walgreen’s will pay $6.7 billion in cash and stock to buy a 45 percent stake in European health and beauty retailer Alliance Boots, according to the Associated Press. Alliance Boots runs 330 health and beauty retail stores in 11 countries. It also has a pharmaceutical wholesale business that supplies pharmacies, doctors and other health care providers in 21 countries. The option to buy the rest of the company will occur in three years. Walgreen’s currently operates approximately 7900 stores in all 50 US states.
Microsoft announces iPad competitor: the Surface
Microsoft announced its own version of the iPad on Monday. The Surface is similar to the iPad in size and price, according to the Associated Press. The release is being coordinated with the Windows 8 operating system and is expected to be available in September or October. Microsoft generally does not provide hardware devices, such as the tablet, for its operating systems. Experts believe that Microsofy is attempting to avoid tension with its typical hardware allies, therefore the Surface will only be available online or via Microsoft stores.
Julius Baer in talks with BofA
Switzerland’s Julius Baer is in talks with Bank of America to buy Merrill Lynch’s international wealth management business, according to the Financial Times. Bank of America placed the unit for sale in April after conducting an internal strategic review. The unit has approximately $90 billion of assets under management and a possible sale price of $1.5 to $2 billion. This would be one of the largest transactions ever conducted in private banking. UBS and Credit Suisse were both allegedly interested in the business but did not comment. Questions remain about the profitability of the unit and the ability for a Swiss bank to integrate an American unit into its culture.
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.