Archive for the ‘Grow Page’ Category

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Drunken Broker Single-Handedly Alters Global Oil Price

Friday, July 9th, 2010

Bet your parents never warned you about this potential side effect of drinking…

  • Last year, Steve Perkins – a broker for PVM Oil Futures – got “blackout drunk” and decided to buy 7 million barrels of crude oil with his firm’s money, driving up the global price of oil.
  • After realizing what he’d done, the 34 year old broker texted his managing director saying that he wouldn’t be coming into work the next day due to an ill family member.
  • As PVM challenged his story, Perkins confessed to spending the firm’s money.
  • Perkins seems to have had no motive for buying the oil, and he claims that he has a blurry memory of the entire night.

Facts and Figures

  • Perkins spent $520 million of PVM’s money, but his job title only allows him to place trades on behalf of his clients.
  • He bought 7 million barrels of crude oil at 2am.
  • Perkins’s purchase raised the global oil price up more than $1.50 a barrel to an 8-month high.
  • Mr. Perkins has been fired, banned from trading for 5 years, and fined £72,000 (about $110,000).

Best Quote

“Mr. Perkins poses an extreme risk to the market when drunk.” – Financial Services Authority

Businesses Hesitate To Hire, Stall Economic Recovery

Tuesday, July 6th, 2010

Concerns about the stalled U.S. economic recovery continue to grow.

  • Last week, state unemployment aid claims increased unexpectedly, which may indicate that the economic recovery is stalling.
  • Although the number of layoffs has decreased in the past year, businesses are hesitant to hire.
  • New jobless claims rose to the highest level since the beginning of March.
  • Obama’s approval ratings have plummeted due to concerns about the economic recovery.

Facts and Figures

  • Claims for state unemployment benefits rose 13,000 last month.
  • Employers announced 39,358 job cuts in June, up 1.4% from May.
  • Private employers added just 13,000 jobs in May.
  • Announced layoffs hit a 4-year low in April.

Best Quote

“It’s looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn’t really picked up and this is disappointing. There is a lot of uncertainty on the hiring side that’s causing things to remain sluggish. In order for the recovery to give people confidence it needs to cut across different sectors of the economy.” – Stephen Bronars, Senior Economist at Welch Consulting

Strikes In Greece And Spain Indicate A Shaky Economy

Friday, July 2nd, 2010

Stress in southern Europe reaches a high as citizens protest continued economic blows.

  • Strikes raged in Greece and Spain as governments desperately tried to revitalize the tumbling Euro by cutting pension plans and public sector pay.
  • The European Central Bank, in a one year cash injection strategy to get Spanish banks back on their feet, has reported that their bailout strategy will not roll over into the following year, leaving shaky Spanish banks furious.
  • Investors fear that the rising stress caused by widespread strikes, coupled with the weak condition of the Euro, could hurt European economic recovery.

Facts & Figures

  • The Euro has been pushed to a lifetime low against the Swiss franc.
  • European shares fell to their lowest in nearly three weeks, dropping -1.7%.

Best Quote

“Sentiment appears fragile and significant downside risks remain to already pretty muted euro zone economic recovery.” – Howard Archer, Chief EuropeanEconomist, IHS Global Insight

Americans Save Up In A Fragile Economy

Thursday, July 1st, 2010

It seems our consumer culture is starting to appreciate a nest egg – spending less and saving more.

  • This May, wary Americans put more into savings then any other month since September, reflecting a cautious financial attitude after the economy’s tumble.
  • This conservative financial attitude comes mostly from sluggish wage growth, which could get even worse at the end of the year when temporary census jobs expire.
  • The gross domestic product takes a blow when consumer morale is low, because it is largely based on spending; meaning that saving – though wise – slows America’s economic recovery.

Facts & Figures

  • In May, the personal savings rate rose +4%
  • At the height of the housing boom in 2005, the personal savings rate was barely 1%

Air Traffic Rebounds In May

Wednesday, June 30th, 2010

After chaos in April when Eyjafjallajökull’s spewed volcanic ash all over northern Europe, air traffic increased in May.

  • Airlines remain focused on recovering from 2009.
  • The airline industry lost about $2 billion when passenger planes were grounded because of the eruption.
  • Because of recent economic turmoil, Europe has shown weak airline industry growth.

Facts and Figures

  • International passenger air traffic increased +12% in May.
  • Airlines expect a $2.5 billion profit in 2010 – a huge turnaround from the $9.9 billion loss in 2009.
  • Air freight increased +34% in May, up from 26%.

Best Quote

“This is good news, but it is only a 0.5% margin. We are still a long way from sustainable profitability.” – Giovanni Bisignani, Director General of the International Transport Association

Making A Legal Profit With Marijuana

Tuesday, June 29th, 2010

Colorado’s medical marijuana industry is hampered by a slew of rules and restrictions as lawmakers attempt to establish standards of respectability within this promising new market.

  • Amendment 1284, a new set of regulations for the marijuana industry, is expected to put many dispensaries out of business. But some dispensaries are welcoming the regulations since the more regulated (and respectable) their business appears to be, the easier it will be for them to operate.
  • In order to succeed as a dispensary of medical marijuana, entrepreneurs must grow their own weed (which vastly increases profits), and secure “caregiver rights” (the more customers who give your establishment caregiver rights, the more marijuana you can grow).
  • Thus far, the industry has failed to generate anywhere near the amount of revenue predicted by the lawmakers who supported the drug’s legalization. In fact, the people making the most money from the business are not dispensaries, but the medical professionals who issue medical marijuana certificates.

Facts & Figures

  • To date, 80,000 people in Colorado have medical marijuana certificates, and the number of certificate holders is increasing by about 1,000 people per month.
  • Americans spend approximately $25 billion per year on marijuana. The sales in Colorado so far are expected to generate about $2.7 million in license fees (not including the $681,000 in income taxes collected from July 2009 to February 2010). By contrast, Dr. Boland, a certificate-issuer interviewed by the newspaper, has grossed $1 million over the past year.
  • 13 states and the District of Columbia currently have medical marijuana laws.

Best Quote

“We’re past the days when people call here to ask if marijuana will give men breasts. Now, the calls are from angel investors, or REITs – people who are looking for ways to invest or offer their services.” – Allen St. Pierre, Executive Director of the National Organization for the Reform of Marijuana Laws (NORML)

The World’s Economies Try To Prevent Another Crisis

Monday, June 28th, 2010

Banks might have to operate under tighter rules in order to avoid another global financial slump.

  • Some of the world’s largest economies are designing major regulations for banks that would ensure they are prepared to absorb large financial losses and avoid another financial meltdown.
  • The negotiations, called Basel III, require banks to have secure and defined assets that they can hold against short- and long-term financial losses. But after a meeting on Sunday it seems that it could be years before these regulations are put into place.
  • Banks are reluctant to adopt these regulations. They argue that they could slow the global recovery from the recent economic crises.

Facts & Figures

  • If Basel III is put into place, the economic growth of the United States and Japan could fall 3% by 2015

Best Quote

“The quality and amount of capital in the banking system must be significantly higher to improve loss absorbency and resiliency.”  - Mr. Draghi, Governor, Bank of Italy.

The Dow Jones Industrial Average is…

Wednesday, June 23rd, 2010

The Dow Jones Industrial Average (or DJIA) gets its name from Charles Dow, the man who first created it in 1897. In the beginning, Mr. Dow made an index of the 11 most prosperous and most widely traded industrial stocks on the market. Currently, the Dow is made up of 30 stocks from all sectors of the market – not just industrial stocks. The companies in the current Dow index are chosen by the editors of the Wall Street Journal (which is owned by Dow Jones and Company). These stocks are intended to reflect how the largest U.S. companies are doing in the stock market.

Why Greece’s Debt Is Our Problem

Wednesday, June 23rd, 2010
Will Europe’s shaky financial situation cross the pond to the U.S.?
  • Moody’s – a major credit rating agency – handed Greece an awful credit score on Monday, and Wall Street reacted with a distinct slump.
  • The low credit score means low confidence in Greece’s ability to dig out of its debt crisis. Even the bailout plan set out by Greece’s neighbors wasn’t enough to convince the analysts at Moody’s that things would turn around anytime soon.
  • The fact that the U.S. market reacted so directly to this news illustrates the strong link between the European and U.S. economies. Still, analysts predict that the U.S. economy will continue to grow despite this temporary setback.

Facts & Figures

  • The DJIA was down 20.18 points (-0.2%) by the end of Monday
  • At the same time, the value of Bank of America stock fell 1.22% and JPMorgan stock dropped 2%

Best Quote

“It was not a huge surprise that Moody’s is following suit. But it is another reminder of the negative news stream coming out of Europe.” – Win Thin, Currency Strategist, Brown Brothers Harriman

Motivating Children Of Wealthy Families To Work

Tuesday, June 22nd, 2010

Affluent parents struggle to maintain a balance between helping their children financially and teaching them how to become self-sufficient.

  • While parents mean well by providing financial help, they may be hampering their child’s productivity and preventing them from learning the value of work.
  • Affluent or not, parents are concerned how to raise productive children. Setting financial limits and sticking to them can help ensure that their children don’t depend on what they see as an endless supply of money.
  • Banks like Gibraltar and J.P. Morgan have begun to offer classes and seminars focusing on understanding and managing finances and preparing for the future.

Best Quote

“You have to help a kid understand what it means out there. You can’t expect kids to go out in the world and be self-sufficient if they don’t know what a utility bill is.” – Joline Godfrey, Chief Executive of Independent Means

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