IMF, Euro zone reach Greek debt deal
The International Monetary Fund, the IMF, and the Euro zone finance ministers reached an agreement on Monday regarding how to reduce Greece’s debt. According to Reuters, this is a significant breakthrough and will allow Greece access to 43.7 billion urgently needed euros. After 12 hours of talks at their third meeting, the finance ministers agreed on a package of measures to reduce Greek debt by 40 billion euros and to cut the debt to GDP ratio to 124 percent by 2020. The ministers committed to reducing the Greek debt below 110 percent by 2022, which will result in some write offs of loans. The interest rate on the debt will be cut and the maturity will be extended by 15 to 30 years. They will also grant a 10 year interest repayment deferral to Greece. The Dow closed down 42 points on Monday, ending at 12,967. Asian markets were mixed but European markets are up due to the news on Greece.
Wealth rises in America’s heartland
The oil and gas boom is driving up income in the heartland, according to USAToday. Small town America, unlike the cities and suburbs, is better off than before the financial crisis. Inflation adjusted income is up 3.8 percent for the 51 million people living in small cities and rural areas. This compares to the 3.5 percent decrease in the income of the 261 million individuals living in the cities and suburbs. The energy boom and the increase in prices of farmland have shifted the long term trend of money flowing to the cities and away from the farms.
More companies pay dividends early to avoid cliff
The Wall Street Journal is reporting that more US companies are paying dividends prior to year end to avoid the fiscal cliff which could send hundreds of millions to shareholders before tax hikes kick in. Both Dillard’s and Las Vegas Sands Corp. said they would pay dividends in December rather than in the new year. Las Vegas Sands CEO, Sheldon Adelson, will collect about $1.2 billion from the special dividend payment. Walmart, Drew Industries and Ethan Allen will all pay early dividends. The 15 percent top tax rate on dividends is scheduled to end in January. Additionally, President Obama wants to raise the tax rate on households with over $250,000 in annual income. The top rate for dividends would raise to 39.6 percent and another 3.8% tax will apply to investment income.
Bangladesh factory made clothes for Walmart
The garment factory in Bangladesh where a weekend fire killed 110 people had been making clothes for Walmart, according to the Associated Press. Walmart said it had no knowledge that its work had been sub-contracted to this company. Tazreen Fashions, Ltd., the company owning the factory, had been removed from Walmart’s list of authorized suppliers, but a sub-contractor had sent the work to the factory in direct violation of the agreement with Walmart. Walmart has terminated the relationship with the supplier. In a 2012 Global Responsibility Report, Walmart said it had stopped working with 49 factories in India due to fire safety issues. Bangladesh has 4,000 garment factories and the country earns about $20 billion annually from the export of garments, primarily to the US and Europe.
SEC Chairman steps down
SEC Chairman, Mary Schapiro, announced she will step down on Monday after four years on December 14. According to the Wall Street Journal, Schapiro had more than a year left in her term. Schapiro contends that the SEC is now more efficient and more advanced in its understanding of electronic trading. Critics believe the agency has not been aggressive enough in enforcement actions against senior corporate officials linked to the financial crisis. Until a new Chairman is appointed, Elisse Walter, a Democratic commissioner will take over for Schapiro.
Cost of 12 Days of Christmas exceeds $100,000
Seven swans, six geese and five golden rings all cost more than a year ago. USA Today reports that if you get all 364 items listed in the Christmas carol “The Twelve Days of Christmas”, you would spend $107,000, or 6.1 percent more than a year ago. The drought has been blamed for the increased cost of the birds. Geese were up 29.6 percent and swans increased 11 percent. The pear tree, golden rings and the three French hens also went up in cost. The eight maids a milking, however, cost the same as last year because there has been no increase in the minimum wage.
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.