Chinese gift-giving as well as the rich fleeing the country top the stories for today. In the US, builders are turning to apartments, and Men's Wearhouse turned to table on Jos. A Bank and has made a counter-offer. Worry spreads about a towboat leaking petroleum in the Mississippi River.
Chinese crackdown on gift-giving impacts luxury product providers
A crackdown by the Chinese government on the ability of government officials to give gifts and spend on personal items is impacting the results of some of the top luxury providers. The Financial Times reports that Remy Cointreau, the cognac maker, has warned that full year operating profits fell 10.4 percent compared to the same period in 2012. Other luxury retailers, including handbag providers and watchmakers, have reported similar results due to the changes in China combined with the slowdown in Europe.
China’s rich flee the country
CNBC is reporting that one of the largest and most rapid wealth migrations of our time is occurring as wealthy Chinese flee the country, moving billions of dollars to overseas destinations. Some firms estimate that the wealthy Chinese have from $450 billion to $658 billion in offshore accounts. More than half of Chinese millionaires are considering emigrating or have already taken steps to move overseas. The wealthy are leaving as the government cracks down on ill-gotten gains and corruption. The wealthy are also leaving to provide cleaner air and better environments for their children. Because of multiple laws regarding the movement of money, many Chinese are investing in collectibles such as art. Wine and diamonds have also become popular investments.
US home permits rise to 5 year high due to apartments
The Associated Press is reporting that US homebuilders planned to build apartments in October at the fastest pace in 5 years. The Commerce Department says that plans to build houses and apartments were 6.2 percent higher than in September and at the highest rate since June 2008. Nearly all of the increase was for multi-family homes. Those permits rose 15.5 percent. Permits for single-family homes rose only 0.8 percent.
FDA stops 23andMe
The FDA (Federal Drug Administration) has ordered the genetic-testing company 23andMe to stop marketing its $99 mail-order kit, indicating that false results could cause consumers to undergo unnecessary health procedures such as breast cancer surgery. According to the Wall Street Journal, the FDA has told the company that it does not have proper clearance to secure approval. The company has not responded to the FDA since May. Instead it has continued with new marketing campaigns and commercials. The company markets itself as being able to identify more than 240 genetic traits based on a saliva test. The FDA has said it will take more serious regulatory actions, such as product seizures, if the company does not take adequate corrective steps.
Men’s Wearhouse makes bid for Jos. A Bank
Men’s Wearhouse turned the tables on Jos. A Bank, its recent pursuer, and offered to buy Jos. A Bank for $1.54 billion. The offer comes two weeks after Bank withdrew its $2.3 billion bid for Men’s Wearhouse. According to the Associated Press, Men’s Wearhouse is offering $55 per share for Jos. A Bank, a 9 percent premium when compared to Monday’s closing price.
Towboat with 100,000 gallons of oil is leaking
A towboat sank Monday in the Mississippi River near the Quad Cities community of LeClaire, Iowa, releasing oil into the water and prompting a review by several agencies to see if fluid is leaking. CNBC is reporting that about 100,000 gallons of petroleum products were aboard the sunken towboat. The leaking fluid is difficult to see in the water and several agencies, including the Coast Guard and the EPA are reviewing the situation.
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.