Added: Feb 6, 2012
Author: TheMillionaireCorner
Duration: 3:0
http://www.millionairecorner.com/article/news-analysis-investor-february-6-2012 Deadline looms for Greek debt talks, or does it? The European Union allegedly set a deadline of Monday for the private Greek bondholders and the Greek government to indicate whether they accept the new bailout deal, according to Reuters. In the new agreement, Greece will be forced to cut 1.5 percent of GDP, which will include wage cuts. The EU has demanded cuts to the minimum wage levels, holiday bonuses, and a decrease in public workers. Labor reforms and banks are the two big issues that have not yet been determined, according to inside sources. But Greek officials, according to CNBC, indicate that there is no Monday deadline. The deadline, they claim is before the EU meeting next week. Greek unions plan massive strikes this week. The outcome of these talks could have a dramatic influence on whether Europe, and potentially the rest of the world, enters a deeper recession. The Financial Times is reporting that the parties are quite far apart. Dow Closes on Friday at Highest Level since May 2008 The Dow was up 156 points on Friday, closing at 12,862, the highest level since May 2008, according to the Wall Street Journal. The rise was due to news of strong job growth, a three year low in unemployment, and other positive developments. Experts indicate, however, that some of the threats to the economy and the markets are not yet gone and it is not yet time to announce "all clear". Apparently election years are historically volatile. Today European markets are down but Asian markets were up. China Refuses to Follow European Carbon Emissions Law for Planes The Chinese government has barred its airlines from paying the 3 percent tax on airlines levied by the EU under its new carbon emissions rule. US airlines happily passed this tax on to passengers taking flights to Europe. According to the Financial Times, China indicated that Europe cannot levy this tax on them and should discuss with China their concerns over global climate change versus the development of international aviation. It is unclear how the EU will react because the tax has not yet been assessed. Hyposthetically, the airlines will be subject to a fine and eventually will not be allowed to land at the European airports. This action comes a week before a key summit between Chinese and EU leaders over the EU bailout. Gas prices to rise 60 cents or more by May Gas prices have increased 19 cents per gallon in the last four weeks with regular unleaded gasoline currently averaging $3.48, as reported by USAToday. The Oil Price Information Service indicated that last week the Energy Department reported anemic US gas consumption, the lowest levels since 2001. But experts believe that further tensions in the Middle East will continue to bump up the price of crude oil. The price of crude oil has not fallen despite the weaker consumption. Additionally refiners also switch from winter formulations to summer formulations which generally adds 15 cents per gallon. Historically, US consumers will not pay over $4 per gallon for gas and will dramatically decrease usage. It will be interesting to see whether prices continue to increase leading to an economic impact in the summer. Used Car Prices Increasing If you are looking for a used car, now is the time to buy. The average price tag on used cars is anticipated to increase by 1.8 percent in 2012, mostly in the second half of the year, according to the National Automobile Dealers Association. The Wall Street Journal indicates that this is the third year in a row that used car prices have increased. The financial crisis caused individuals to hang on to their cars longer, thus decreasing the supply at the same time that the demand was increasing. Experts believe that this may be a permanent shift and that people will continue to hold onto their cars longer in the future. Agriculture Department Being Questioned on Corn Reports The USDA data is relied upon heavily by farmers and traders to set the price of corn, but unexpected changes in the data are increasing the concern that the reports are faulty, according to the Wall Street Journal. Last year, corn hit an all time high of $8 per bushel. Corn prices have increased dramatically due to the rise of the ethanol industry. USDA forecasts were off the mark in 2009 and 2010 more than any two years since before the 1990s. The production forecasts released in mid-2011 also seemed off base. The challenge is that this industry and related industries rely upon the information for pricing. Inaccurate pricing impacts not only the cost of corn products, it impacts the livestock industry and companies that supply farmers with equipment. Industry participants are frustrated and are looking for the government to provide more reliable information.
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