After a miserable third quarter, fourth quarter begins with falling worldwide markets. After surviving one of the worst quarters on record, the Dow fell on Friday 2.2 percent closing at 10,913. Asian and European markets are once again plummeting on Monday, primarily due to the eurozone debt crisis and fears regarding economic numbers about the US economy that will be released later this week.
Greece to Miss Deficit Targets
According to the Associated Press, Greece announced that it will miss it deficit targets for 2011 and 2012. The deficit will be at 8.5 percent of GDP compared to the 7.8 percent demanded by European lenders. Greece blames the change in percentages on a deeper recession than anticipated. Its citizens are refusing to pay many surcharges and tax collectors are being blamed for failing to collect required taxes. Greece cut 28,000 police jobs instead of the required 30,000 and those cut will be receiving full pensions. Greece has been reliant since May on cash disbursed from the eurozone and will fail to make payments if it does not receive more cash by mid-October.
Dollar Stronger against Euro and other Currencies
The US dollar is stronger than it has been for many years primarily due to investors flocking to safety. The Financial Times reports that the dollar is stronger due to default rather than other economic reasons. The Japanese yen and Swiss franc are no longer viable options having been regulated by their governments. Yet many investors, including finance ministers in Saudi Arabia, are unhappy with the dollar indicating they feel "hostage to the irresponsible behavior of politicians."
Bank of America Being Hacked?
According to USA Today, Bank of America's homepage and online banking services have been having problems since Friday, the day the $5 debit card fee was announced. Rumors persist that the site has been subject to hacking but Bank of America denies that rumor.
Piracy Costing World Trade $7 Billion Annually
A report from the Indian National Shipowners Organization indicates the piracy is costing the world $7 billion annually, according to the Associated Press. The costs include increased insurance, longer routes, security guards and others. They are recommending that the United Nations create a safeguarding force to ensure safety.
Specialty Items Up
While overall consumer spending is down, shoppers are buying specialty items in much larger percentages. The USA Today indicates the Halloween purchases are up, especially for pet costumes. Total Halloween spending is anticipated at $6.9 trillion with purchases of pet costumes up 15 percent. Gourmet goodies, such as truffle butter and lobster macaroni and cheese, are up 7.7% to $70 billion. Nail care has also increased with the purchases of polishes and other items up $14.2 million from January to August, an increase of 61% from 2010. Nail salon services have also increased.
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.