Facebook falls 11 percent on first day of trading
Criticism of the Facebook stock deal grew on Monday causing its shares to drop below the offering price of $38 in the first full day of trading. According to the Wall Street Journal, retail investors are usually allocated 20 percent of the total shares allotted in an IPO but Facebook moved that to 25 percent in the last few days before trading. Many investors who initially bought shares and then sought to sell them were unable to do so on Friday, spurring many to sell shares on Monday. The same happened for hedge fund and other institutional investors due to technology problems at Nasdaq. Overall, Facebook lost $11.5 billion in market value on Monday.
Europe warned of severe recession
The Organization for Economic Cooperation and Development, the OECD, warned on Tuesday that the eurozone economy could contract almost 2 percent this year in a worst case scenario. The Associated Press reports that the average growth prediction for the eurozone is 0.1 percent this year and 0.9 percent in 2013. Germany is predicted to grow at 2.0 percent, in contrast to Italy and Spain who are predicted to shrink. The US is expected to grow 2.4 percent in 2012 and 2.6 percent in 2013. The OECD has more positive predictions for growth than the International Monetary Fund. European and Asian markets are both up on Tuesday. The Dow closed up 135 points on Monday, ending at 12,504.
Greek banks propped up by secret central bank
The Financial Times is reporting that Greece’s banking system is being propped up by an estimated 100 billion euros of emergency liquidity being provided by the country’s central bank, approved by the European Central Bank in Frankfurt. Extensive use of “emergency liquidity assistance” has been one of the less noticed features of the eurozone crisis. Should Greece decide to leave the eurozone, the ECB would pull the plug on the liquidity assistance. The loans are kept quiet because use of the funds would generally worsen the problem, causing panic in banking systems. The loans have been used frequently in both Greece and Ireland.
Drive through sales increase profitability
Fast food drive through is spilling into the mainstream with stores such as Starbucks and Panera Bread integrating drive through into its business. According to USA Today, Panera Bread is putting drive throughs into 20-30 percent of its stores. It will have 200 drive through locations by the end of 2012. Starbucks now has 2500 drive through locations. Last year 12.4 billion consumers visited fast food drive throughs, a 2 percent increase over the prior year. In a world where consumers lack time, these chains see drive throughs as a new boon to profitability.
American Express adds geolocatiion to its iPhone app
The American Express iPhone app will soon be able to make recommendations to consumers based on a consumer’s spending history, social network activity and location. Even variables such as the time of day and distance from home are taken into consideration. According to the American Banker, My Offers is being piloted in New York and Los Angeles
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.