Super Committee declares defeat
The 12 member Congressional Super Committee is set to release a joint statement that after three months their talks have failed and they cannot bridge their differences over taxes and spending, as reported by Reuters. This means that $1.2 trillion of cuts will occur across the board. Republicans are expected to scramble to shield the military from $600 billion of cuts that will begin to be felt in 2013.
European and Asian stocks down and lower Wall Street open predicted
European markets are slumping on Monday, according to the Wall Street Journal, and the Dow is anticipated to fall more than 150 points upon the opening of the US markets. The failure of the US government to deal with its debt crisis, in addition to the ongoing European crisis, is driving the markets. Over the weekend, Spain elected a new government which will help implement its own austerity measures. The Dow was up on Friday 25 points, closing at 11,796.
HUD program benefited homeowners in foreclosure in only three states
The Emergency Homeowners’ Loan Program, which closed on September 30 with $1 billion unspent due to the failure of the government to effectively administer the program, was successful in three states. The program provided up to $50,000 in no-interest loans to those in foreclosure, if they stayed in their homes and kept payments current for five years. According to USA Today, the program initially allotted $179 million to Pennsylvania, Maryland and Connecticut, but was able to provide an additional $46 million to these states who effectively ran their own programs. Other states, who relied upon HUD to administer the program, received much less.
Toyotato to shift more production to US
USA Today reports that Toyota is likely to shift more production to the US if Japan’s economy fails to rebound. The yen’s appreciation against the dollar has made production more expensive in Japan and demand for its cars is actually greater in the US. North American plans are running overtime.
European Commission recommends Eurobonds as stability bonds
A report by the European Commission, scheduled to be released on Wednesday, encourages the creation of Eurobonds, to build stability across the region. The Financial Times indicates that these bonds would be able to compete more effectively against US Treasuries and would be a benchmark for the region. The report acknowledges that it would take several years to implement and that pooling the debt of the various nations is not something that might be supported at this time, especially by Germany.
Social Security Program pushes doctors to lessen standard of care
According to the Wall Street Journal, the Social Security Administration in Baltimore, frustrated by a backlog of applications for federal disability benefits, told its 140 doctors that they would have to work faster to move cases. They also cut the pay doctors would receive for reviewing the cases. Additionally, doctors no longer had to review only the cases in which they had expertise, but expand their review to the backlog of cases, whatever their expertise may be. Overall 45 of the 140 doctors left within months. Doctors indicate that shortening and cheapening the process lowers the quality of decisions. The Social Security Disability program paid $124 billion in benefits in 2010, up from $55 billion in 2001. The backlog in September was 771,000. The doctors who review the claims are often retired doctors who do not feel comfortable making decisions outside their area of expertise. The SSA feels that all of the doctors went to medical school and therefore should be able to make decisions about multiple areas.
Chinese Vice-Premier promotes unbalanced recovery
China’s Vice Premier, Wang Qishan, indicated on Monday that the world economy is in a grim state and that an unbalanced recovery, in which China worries about its own domestic problems rather than helping out others, would be best for the world. Wang was speaking at the annual US-China Joint Commission on Commerce and Trade. His comments inferred that China was not willing to work on reducing the trade deficit with the US. US officials note that overall attitudes towards China are souring.
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.