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Asset Preservation Advisors




City:Atlanta

State: GA



BIOGRAPHY:
APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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News Analysis for the Investor on March 19, 2013

Cyprus softens original fine

| BY Catherine McBreen

 

Cyprus may soften original proposal

Over the weekend, the Euro zone announced a one-off tax on the bank deposits in Cyprus that shook the markets on Monday.  The IMF required the banks to collect a 6.75 percent tax on all accounts up to 100,000 euros and a 9.9 percent tax on accounts over 100,000 euros in order for the country to receive a bailout. According to the Associated Press, a new draft bill spares all deposits below 20,000 euros from a charge. The government indicates that it has no options but to accept the 10 billion euro bailout with the IMF’s required levy on deposits or go bankrupt. The seizure of the taxes from the deposit accounts will raise 5.8 billion euros.   The country’s central bank governor opposes the tax on amounts less than 100,000 because that is the amount of deposits that the government insures.  The banks in Cyprus are closed until Thursday to avoid a run-off. The concern is that depositors in other countries subject to bailouts will begin withdrawing funds from their own banks due to fears that similar requirements will flood the Euro zone.  The Finance Minister from Cyprus is flying to Moscow to discuss the matter with his Russian counterpart.  A third of all deposits in Cyprus are from Russia and are suspected to be accounts created for purposes of money laundering.

US tech firms holding cash

The Financial Times is reporting that tech companies in the US were holding an unprecedented $1.45 trillion in cash at the end of 2012, up 10 percent from a year earlier.  This is causing activism from shareholders demanding a dividend.  The activism causes concern for bond market investors since it could leave companies with weaker balance sheets.  Moody’s indicates that many companies took advantage of low interest rates to issue bonds. Much of the cash is in tax avoidance arrangements being channeled through low tax rate countries.

Suntech defaults on bond payments

Suntech, one of the world’s largest solar panel manufacturers, has defaulted on a $541 million bond payment, according to USAToday. The announcement was a severe setback for a company that was supported by the Chinese government and represents the challenges of the struggling global solar industry.  A sharp drop in solar panel prices has erased the profits of solar panel makers around the world.

Ryanair buys big from Boeing

According to the Associated Press,  Ryanair has made the largest European airline order ever made from Boeing.  It will purchase 175 aircraft which have a list price of $15.6 billion. It is suspected that Ryanair is receiving a significant discount off of the list price.  Ryanair is one of the world’s wealthiest airlines with more than $4 billion in cash available.  It offers internet-only sales of low fare tickets and has multiple extra charges including those for checked baggage, boarding card and reserved seats.  This model is being copied frequently in the industry.  The planes were ordered with no business class seating and no tray tables on the backs of seats, allowing for tighter seating of passengers.

Samsung working on a wristwatch to rival Apple

Samsung is developing a wearable digital device, similar to a wristwatch, to perform many of the tasks of a smartphone, according to CNBC.  Last month, the New York Times reported that Apple was experimenting with a wristwatch that would operate on the same platform as the iPhone and would be made out of curved glass.  Both Samsung and Apple shares have recently dropped.  Experts indicate that the new products of both companies have been underwhelming.

Companies return to Mexico as China becomes costly

Many US firms manufacturing goods in China are moving their manufacturing to Mexico, according to USAToday.  Mexico expects its economy to expand 3.5 percent in 2013 and manufacturing accounts for 20 percent of its economy.  In the past, China’s currency was artificially low and the government was subsidizing fixed costs.  Recently, however, Chinese costs have risen. China also fails to protect intellectual property rights of products.  Additionally, Mexico is part of a free trade agreement providing even greater incentives for US companies.  Ole!



About the Author


Catherine McBreen



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.