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After weeks of Greek drama, the New Democracy party appears to have taken 29.7 percent of the seats in the Greek parliament compared to 26.9 percent taken by the radical Syriza party. According to the Financial Times, the New Democracy party will form a coalition with the Socialist and Democratic Left parties but plans to follow many of the austerity measures agreed upon to receive the bailout money from the Euro zone that is currently being withheld. It is expected, however, that even with the election of the more moderate party, some of the austerity measures will be loosened.
Asian stocks rally after Greek vote
Asian markets rallied after the Greek vote eased fears of global financial turmoil, according to the Associated Press, but experts warn that the European debt crisis is far from over. Additionally, despite the outcome of the election, many fear the Greeks will be slow to adopt austerity measures. Dow futures were up on Sunday. On Friday, the Dow closed up 115 points, ending at 12,767. European markets are mixed on Monday.
Small banks selling out
More than 90 bank mergers have been announced so far in 2012, the biggest year since 2007 when there were 286 transactions, according to the Wall Street Journal. There are 6,643 small banks in the US and many are now in the midst of seeking buyers due to onerous compliance regulations recently enacted. The worst is Basel III which requires a significant increase in capital requirements for small banks. Small banks had anticipated an exemption from these rules. New overdraft rules are also eating into profits and limits on specific types of loans are also challenging their businesses. While the merger activity is not expected to be a tsunami, it is expected to continue to increase.
Foreign holdings of US debt hit record high
The Treasury Department announced Friday that total foreign holdings of US debt rose 0.4 percent in April to $5.16 trillion, the fourth consecutive monthly increase, as reported by USAToday. China boosted its holdings 0.1 percent to $1.15 trillion. Demand for Treasuries has remained strong due to the European debt crisis. Standard and Poor’s lowered its ratings on US debt one notch from AAA to AA+ last summer but that seems to have done little to impact demand. The percentage of debt as compared to the economy will rise from 77 percent in 2011 to 83 percent this and 87 percent by 2016.
Unemployment rates rise in 18 states
According to USA Today, unemployment rates rose in 18 states in May, the most in nine month. North Carolina reported the biggest loss, followed by Pennsylvania. North Dakota continues to have the country’s lowest unemployment rate at 3 percent.
Chinese man fabricates bank
A Chinese man, Lin Chunping, fabricated that he had purchased a US bank and brought it to China. The Associated Press indicates that the man claimed he bought the Delaware based Atlantic Bank and brought it to China for $60 million. His hometown gave him a prestigious appointment and the state media called him “legendary”. There is no Atlantic Bank in Delaware, however. Lin is now in prison in China for fraud due to an unrelated claim.
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.