Sequestration cuts will not be avoided
After pulling back its rhetoric regarding the impact of the sequestration cuts, the Obama Administration and the Republicans failed to even negotiate in the last hours before the cuts were to become final. According to theAssociated Press, the Senate voted down a Republican proposal late on Thursday. That proposal was followed by a Democratic proposal to raise taxes on the wealthy which was also voted down. The $85 billion in cuts represents less than 2 percent of annual spending
China factory growth cools to five month low
An official Chinese government survey reported the official Chinese PMI (Purchasing Managers’ Index) fell to 50.1 after seasonal adjustments, down from 50.4 in January and the weakest since September 2012. CNBC reports that despite the drop, a mild economic recovery is taking hold in China. New orders fell to 50.1 but new Export Orders fell to 47.3, down from 48.5 a month ago. This is due to weak foreign demand, especially from Europe. Asian markets were somewhat mixed on Friday.
Foreclosure relief may be imminent
Reuters is reporting that borrowers whose homes were foreclosed on during the US housing crisis will start receiving payments in April from a $3.6 billion fund under a previously announced settlement with 13 banks. Payments will range from a few hundred dollars to $125,000 under settlements designed to end case-by-case reviews. The reviews were initially expected to determine which borrowers were harmed and to compensate them based on individual losses. The process, however, cost more than $1.5 billion. In January the regulators replaced the review process. Borrowers will fall into specific classifications and receive the amounts approved under those classifications. Originally, the OCC and the Fed said the error rate on the mortgages was 6.5 percent, but that amount has declined.
Groupon fires CEO
On Thursday, Groupon fired its CEO, Andrew Mason, a day after the company reported a quarterly loss that missed expectations and heightened scrutiny over whether the business model is flawed. According to the Wall Street Journal, tensions between Mason and Groupon co-founder and Chairman Eric Lefkofsky have been increasing. Groupon has only reported one quarter of profits since its November 2011 IPO. On Wednesday, it reported a net loss of $81.1 million.
RV business grows
Deliveries of motor homes from manufacturers to dealers rose 13.6 percent last year and are expected to climb about the same amount this year, according to the Recreational Vehicle Industry Association. USA Today reports that last year marked the third year of increases from a recessionary bottom that saw sales fall to the lowest levels since the 1970s. Growth in the RV industry shows that consumers are beginning to spend again. Additionally, all of the $100,000 plus vehicles are manufactured in the USA which is good for the local economies. Five companies represent more than 75 percent of RV volume. These companies include Winnebago, Fleetwood RV, Thor Industries, Tiffin Motorhomes and Forest River (owned by Berkshire Hathaway).
US Growth forecast revised up
The US economy grew only slightly in the 4th quarter of 2012 with the GDP advancing at 0.1 percent, according to the Commerce Department. This is in contrast to the reduction of 0.1 percent that was previously reported. The Wall Street Journal, indicates that last quarter’s GDP advance was the weakest of the current recovery. For all of last year, the economy grew at 2.2 percent.
Student loan delinquencies soar
The Federal Reserve Bank of New York said that 35 percent of people under the age of 30 who have student loans were at least 90 days late on their payments as of the end of the year, up from 26 percent in 2008 and 21 percent in 2004. According to the Wall Street Journal, 43 percent of all 25 year olds have student debt, up from 33 percent at the end of 2008. Total US student loan debt increased 11 percent last year to $966 billion and is up 51 percent since 2008.
Cleaning crew flushes away 6,000 gallons of scotch
The night shift at a Chivas Brothers distillery in Scotland screwed up this week and accidentally flushed about 6,000 gallons of Scotch whiskey down the drain, according to USAToday. The workers were cleaning equipment and accidentally expelled 18,000 liters of whiskey into the sewer system, mistaking it for wastewater. No one at Chivas noticed until 11 am when the sewage crews got a whiff of the problem. The wastewater treatment plant is now closely monitoring the Dumbarton, Scotland wastewater.
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.