Euro zone deal over bank bailout shaky
Germany and its two closest allies in the euro zone appear to have stepped back from a key agreement that would free Spain and Ireland of billions in debt, according to the Financial Times. The German, Dutch and Finnish finance ministers said in a statement that a plan to move bad bank assets off the books of struggling euro zone governments would not apply to “legacy assets”. The statement makes it unclear how new rules will apply to Spain, who is currently seeking a bailout for its banks. Under a deal made in June, bailouts of banks would no longer be the responsibility of the local government but would shift to the euro zone rescue fund. Germany, however, has been dragging its feet regarding many of the elements. Although the group of three represents only a small part of the 17 member Euro zone, they are very powerful and markets will react to this hurdle. All of the European markets are negative on Wednesday. Asian markets were also down. The Dow lost 101 points on Tuesday, closing at 13,457.
CFPB finds discrepancies in credit scores provided by credit bureaus
Credit bureaus sometimes provide Americans with credit scores that are different from those that lenders use in deciding whether to offer a loan and at what interest rate, the Consumer Financial Protection Bureau, or CFPB, found on Tuesday. According to the Washington Post, the CFPB has found that one in four people receive credit bureau information that does not match that of lenders. The Agency is hoping to identify a more transparent process.
World’s largest oil trader ignoring Iran sanctions
Vitol, the world’s largest oil trader is buying and selling Iranian oil, thus ignoring efforts of the West to put pressure on Iran over its nuclear program. CNBC reports that last month Vitol bought 2 million barrels of fuel oil from Iran and offered it to Chinese traders. Vitol is a Swiss based company and is not required to comply with the European Union ban because Switzerland decided not to match EU and US sanctions against Iran.
Greek debt crisis worsens
The Greeks are negotiating with the European Union, the IMF and its other lenders, according to the Wall Street Journal. The Greek recession has been worse than estimated with 24.4 percent unemployment and a predicted 7 percent contraction of its economy. The IMF had predicted a 19.1 percent unemployment rate and a 4.8 percent contraction in the economy. Greece is already behind its austerity targets and is asking for a two year extension. The northern countries do not want to bail out Greece for a third time and support an exit while the other countries feel it is only a small part of the overall economic situation and Greece should be given an extension.
Chinese stocks breach key level
Stocks in the Chinese benchmark Shanghai Composite Index broke below a key support level on Wednesday, according to CNBC. The market touched its lowest point in three and a half years and is expected to continue down. The Chinese market has been on a downward trend since May. Retail investors in China have been looking for less volatile investments than equities and that trend is expected to continue. Experts believe the market will fall at least another 2 percent in upcoming weeks. The slowdown in the world’s second largest economy is deeper than originally thought with factory output having contracted for 10 months in a row.
Home improvement sales increasing
Purchases of home related goods took priority over back to school spending according to a study by IBM Smarter Commerce. USA Today reports that more people are buying things online for their home or going to large stores such as Home Depot, rather than supporting local hardware stores. Home Depot says its sales are up in every area, and quarterly earnings were the highest ever at $1.5 billion. The IBM report shows that online home goods sales were up 30 percent in July compared to a year ago and up 25.5 percent in August.
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.