The stock market is declining on news that new claims for unemployment benefits rose more than expected last week, suggesting little improvement in the labor market this month after employment stumbled in May.  In addition, the Federal Reserve Chairman’s speech and question and answer session yesterday (see below) did not help matters either. 

The Greeks don’t want to take their economic medicine.  The country’s largest labor union called for a 48-hour general strike for June 28 and 29 to protest the bills and press demands for a change in policy by the country’s government.  As part of protests against the bills, Greeks faced more power cuts today as workers at the electricity company continued 48-hour rolling strikes, objecting to the privatization of the power company. 

Bottom line: some of the Greek citizenry realizes that their strikes and sometimes violent demonstrations can cause real damage to their economy and global stock markets in the near term.  I personally believe the Greek government, EU and IMF need to take these bullies to the woodshed and come up with a feasible long-term solution.  Caving into these protests only delays the inevitable, by rewarding bad behavior and unsustainable benefits.  Putting out the Greek economic fire will be a huge help for global stock markets.  However, how to do it and get it approved by all involved – well that’s a different story. 

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Financially Savvy Young Adults Event
Saturday July 9^th  9:30AM to 12 noon
Deer Creek Golf Club
7000 W 133^rd St.
Overland Park, KS  66209

This event is geared for young adults ages 17-24 who want to get started on a path for financial success.  We will demonstrate practical, easy and fun ways to make, save and grow your money that can be used into college and beyond.

Examples of topics covered are:

-  Budgeting and monitoring spending.
-  Implications of abusing debit and credit cards.
-  Student loans.  How to handle them responsibly.
-  Saving versus investing.  How and when to get started.
-  Credit score.  What it is and how can it affect me?
-  Things to consider when planning a major purchase.
-  And other important life lessons.

Those planning to attend are welcome to invite friends or family members who fall within the age range.  Space is limited, so anyone interested in attending should call the office at (913) 897-2074 by July 1st.  We look forward to this being a great educational event for all those attending. 

It’s a muddle through summer 

Various economic issues are playing tug of war with U.S. and global economies and stock markets.  Bottom line, raw material prices are up, economic growth has cooled a little bit and Greece’s debt problem continues to be a thorn in everyone’s side.  The following are some other economic and market issues that may be getting investors’ attention in the near term:

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I know that I am reaching middle age when I begin to yearn for the good ole days.  Regarding this, I find some current trends disturbing, and I am not talking about unemployment figures, the U.S. deficit or stock market.  What I am referring to is the lack of integrity in our society 

Webster’s defines integrity as: 

• firm adherence to a code of especially moral or artistic values : incorruptibility
• an unimpaired condition : soundness
• the quality or state of being complete or undivided : completeness 

The following are just some examples of our leaders or popular celebrities falling short of what I believe should be expected of them. 

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Economic news causes the market to pause

This week it was reported that:

• The factory sector and hiring both declined in the U.S. in May.  The Labor Department reported that employers added only 54,000 new jobs in May, the fewest in eight months.  The unemployment rate also inched up to 9.1 percent from 9 percent.  Private companies hired only 83,000 new workers, the fewest in nearly a year.
• Moody’s Investor Service (a ratings agency) said it was reviewing the ratings of Bank of America Corp., Citigroup Inc., and Wells Fargo & Co. for possible downgrades.  The rating agency gives the three banks fairly strong investment-grade credit ratings based upon the assumption that the federal government would prevent them from failing in a crisis.   Moody’s said Thursday that this “too big to fail” presumption may no longer be true.
• In addition, Moody’s Investors Service warned that it might review the U.S. Government’s Aaa debt rating for a possible downgrade as early as next month if there is no progress toward a deal in Washington to increase the $14.294 trillion federal borrowing limit and cut deficits.
• Goldman Sachs Group Inc. was subpoenaed by the Manhattan District Attorney’s office over the investment bank’s activities leading up to the financial crisis, a person familiar with the matter told The Associated Press.  In April of this year the U.S. Senate released a 639-page Senate report that showed Goldman had steered investors toward mortgage securities it knew would likely fail.  The report, which was the result of a Senate panel investigation of the financial crisis, found that Goldman marketed four sets of complex mortgage securities to banks and other investors.  The report said the firm failed to tell the banks and investors that the securities were very risky, secretly bet against the investors’ positions and deceived them about its own positions.  The report concluded this was part of Goldman’s effort to shift risk from its balance sheet to those of investors’.

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