Fed stress test indicates that 17 of largest 18 banks are safe
According to the Wall Street Journal, 17 of the 18 largest banks could handle a sharp economic downturn if necessary. On Thursday, the Federal Reserve issued the results of the annual “stress tests” for the country’s largest banks. The stress tests do not include a clear pass or fail standard because they do not incorporate the latest dividend and share buyback plans. While the results show the banks could survive a downturn, many of the banks would suffer substantial losses. Next week, however, the Fed will comment on the capital plans of the banks. It is possible that banks may have passed the first part of the stress test but could still potentially fail the capital test.
US household wealth at highest level since 2007
The net worth of US families rose by $1.17 trillion at the end of 2012 to the highest level since late 2007 due to rising home values and gains in stock holdings. According to the Wall Street Journal, US households net worth, the value of homes, stocks and other investments minus debts and other liabilities, rose 1.8 percent to $66.07 trillion from October to December, according to a Federal Reserve report. Household income was up 9 percent from the end of 2011.
Wheat prices jump due to US export sales
A jump in US exports of grain caused an increase of 11.75 cents per bushel for wheat prices. Contracts rose to $6.955 per bushel, according to the Associated Press. Wheat exports rose by 40 percent over the four week average, catching traders by surprise. Other agricultural commodities also rose but not as much.
US Consumer debt increases by $16.2 billion in January
Consumers increased the amount they borrowed to purchase cars and pay for school in January, but remained cautious about using their credit cards. The Associated Press indicates that consumer borrowing rose $16.2 billion in January to $2.8 trillion. The category that covers student loans and auto loans grew $16 billion, following an $18 billion gain in December. Consumers barely increased credit card debt in January which remains 17.2 percent below the peak set in June 2008.
Beijing’s Parliament includes 83 billionaires
According to the Financial Times, the legislature of the world’s last major communist country is also the wealthiest. A popular rich list includes the names of 83 billionaires that are part of the Chinese parliament. In the US, there is not a single billionaire in the House of Representatives or Senate. The richest member is Texas Republican Michael McCaul who is only worth $500 million. Among the Chinese delegates currently in Beijing, at least 31 have more than $1 billion in assets according to the China’s Hurun Global Rich List. Another 52 billionaires are part of the Chinese People’s Political Consultative Conference. The number of billionaires was up 17 percent this year. Additionally, many anticipate that due to secrecy issues in China, the number of billionaires may actually be greater.
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.