US likely to face another credit rating downgrade
According to Bank of America's Merrill Lynch, the US credit rating is likely to be downgraded by a second rating agency in November or early December. Reuters reports that analysts at Merrill Lynch are issuing this warning based on the fact that both Moody's and Fitch rating services have noted that the US' AAA rating has a negative outlook. Congress' Super Committee is scheduled to report back its $1.2 trillion in cuts by November 23. If the cuts are not identified specifically, that amount will be cut across the board. Analysts indicate that if the cuts do not appear to be real and sustainable, the ratings agencies are likely to downgrade.
Dow breaks cycle and closes at 11,808
For the last two months the Dow has been stuck between 11,650 and 10,650. The market broke the band on Friday, rising 267 points to close as 11,808. The Wall Street Journal suggests that three important drivers will all be announcing important information in the next few weeks to determine whether the market can continue to pull out of the band. The drivers include the Eurozone debit issues, the US economy, and corporate earnings. Eurozone remains in discussions On Sunday the EU leaders met and made tentative agreement on bank recapitalization and how to leverage the rescue fund. Questions remain on the amount of losses the bondholders will take on the existing Greek bonds, according to Reuters. The leaders have agreed to meet again on Wednesday to further discuss these issues. In the meantime, Italy has been sent back to the drawing board by the EU leaders to identify further austerity measures. According to the Financial Times, Italy's Prime Minister Berlusconi has called an emergency cabinet meeting. European Purchasing Managers Index Falls The European Purchasing Managers Index (PMI) fell unexpectedly the month to 47.2, the lowest level since July 2009. Experts had predicted the index would fall from 48.8 to 48.5, according to CNBC. A PMI of this level generally means a quarterly contraction of at least 1 percent which puts Europe into a recessionary mode.
Arizona regulators take over big mortgage insurer
PMI Group, Inc, the third largest mortgage insurer, who has paid more than $1.5 billion to cover mortgage losses held by Fannie Mae, Freddie Mac and Wells Fargo, was closed over the weekend by Arizona insurance regulators. The company has announced it will only pay back 50 percent of outstanding claims, according to the Wall Street Journal.
Condo market booming
While investors avoid the risk of buying single family homes, the multi-family apartment and condo market is booming, according to USA Today. The condo market was up 51 percent in September selling 233,000 units, the highest amount since October 2008.
12,000 police officers to lose jobs
In a report to the Justice Department, it is anticipated that 12,000 police officers will have lost their jobs this year. Additionally, 30,000 county and municipal jobs will be cut, according to USA Today. Vice President Biden has been touting that crime rates will increase dramatically due to these cuts in order to push President Obama's jobs bill. But experts say Biden's fear mongering is incorrect. Violent crimes have dropped 5.5 percent this past year despite the cuts compared to 2009. Property crimes have also declined 3 percent,
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.