What Young People Are Spending Their Money On

When people look to identify the most prominent obstacles to economic growth, the levels of consumer and federal debt are often high on any list. The current economic circumstances of the U.S. provides a case in point, as it is generally perceived that credit card debt and mortgage liability are key factors behind diminished consumer spending within society.

This is not entirely accurate because the total level of domestic debt as a share of the economy has been gradually declining. A more pertinent issue would appear to be the reluctance of national banks and financial institutions to lend money in instances where applicants have a less than perfect credit history. This cautious stance is impacting consumers and their capacity to spend and reinvest money into the economy.

Unemployment is also a contributing factor to diminished spending in the U.S., especially among Americans aged 18 to 29. The rate of joblessness within this social group is up to 12.7%, which is well above the national rate of 8.3%. This has forced many to reduce their weekly budgets and the amount that they spend on entertainment, food and transport. According to a study published by Generation Opportunity, 84% of this demographic will delay big-ticket purchases until the economy shows significant improvement. 

The Changing Face of Consumerism in the U.S.While young adults are undoubtedly spending less in the current economic climate, it is fair to say that they also have different spending priorities compared to previous generations. The pronounced decline of the U.S. automotive industry provides some insight into this. Young Americans are far less likely to purchase a vehicle than they have been in the past, and the number of young people with driving licenses has decreased significantly over the last three decades. According to CNW Marketing Research, citizens aged 21 to 34 purchased just 27% of new cars in 2010, which is considerably lower than the corresponding figure of 38% in 1985.

Technological purchases have emerged as far greater priorities among modern consumers, and this shift can be attributed to both cultural and economic factors. While it is obvious that there is a significant financial difference between purchasing a $12,000 Kia and a $2,000 Macbook Pro laptop, the multi-purpose nature of devices such as personal computers and smartphones also ensures that they offer far greater value for the consumer's money. In fact, these products are now central to the everyday function of young adults. Cars have become an optional and often unaffordable luxury.
 

The End of OwnershipThe changing cultural and economic landscape also offers considerable insight into the declining housing market. The level of ownership among Millennials continues to fall. Between 1980 and 2000, the share of Americans under 30 who owned property fell from 43 to 38%. This trend was also evident among individuals in their early 30s, whose own share of ownership declined from 61 to 55% during the same period.

In addition to soaring levels of student debt and an unstable job market, it is fair to say that the decline in Millennial home ownership has also coincided with falling marriage rates. The rate of adults aged 25 to 44 who married fell by a staggering 15% between 1980 and 2000.

The Bottom LineAs much as the current economic climate is impacting consumer spending in the U.S., it is clear that cultural changes and a significant shift in the priorities of young adults are equally influential. Millennials in America have a different set of values and beliefs than their elders. Home and auto ownership are no longer as important as they once were. A negative perception of the economy is also discouraging young-people from making long-term future plans.
 

Source: Investopedia

Eurozone PMI Data 'Points To New Recession'

The eurozone's economy is set to contract by 0.5%-0.6% in the July to September quarter, tipping it into its second recession in three years, a closely-watched survey suggests.

The Markit Flash Eurozone PMI Composite Output Index, which measures new orders in manufacturing and services, was 46.6 in August, compared with 46.5 in July. A score below 50 indicates contraction.

Output declined in both the manufacturing and services sectors, Markit said in a statement.
This is the seventh consecutive month of contraction in the eurozone's private sector.
Rob Dobson, senior economist at Markit said: "The August Markit Eurozone Flash PMI reinforces the prevailing view of the economy dropping back into recession during the third quarter of 2012.
"Taken together, the July and August readings would historically be consistent with GDP falling by around 0.5%-0.6% quarter-on-quarter, so it would take a substantial bounce in September to change this outlook."
The eurozone's economy contracted by 0.2% in the second quarter of the year. A recession is generally defined as two consecutive quarters of negative growth.
Julien Manceaux, senior economist at ING, said: "The composite PMI still indicates a contraction of activity in the eurozone as a whole.
"In our view, this confirms that the decline in eurozone GDP [gross domestic product] in the second quarter is likely to be the first leg of a technical recession."

Public Finances Even Germany, the eurozone's strongest economy, showed an accelerating decline in output, with its Composite Output Index falling to a 38-month low of 47.0, down from 47.5 in July.
German blue-chip companies ThyssenKrupp and Opel are reducing working hours because of weaker demand, while Bosch has announced it is negotiating reduced working hours with its workforce.
The findings contrast with more positive news relating to Germany's public finances, which were back in the black for the first six months of the year, according to Destatis, the country's federal statistics office.
Germany's public accounts showed a surplus of 8.3bn euros (£6.6bn), about 0.6% of gross domestic product, thanks largely to record low unemployment figures.
But Germany's second quarter economic growth of 0.3%, down from 0.5% in the first quarter, could fall further if Markit's surveys prove accurate.
In France, decline in output slowed, with the composite PMI output index rising to a six-month high of 48.9.
However, some analysts saw glimmers of hope in the Markit figures.
Marie Diron, senior economic adviser to the Ernst & Young Eurozone Forecast body, said the data showed "signs of stabilisation" in the eurozone economy and "supports our view that, while probably shrinking further, the eurozone economy is not falling off a cliff".
She added: "The manufacturing surveys for both Germany and France showed better results for the manufacturing sector than last month."

US Growth Earlier, the HSBC PMI survey for manufacturing in China indicated that activity in the sector fell to a nine-month low in August.
The PMI index was 47.8 this month, compared with a final reading of 49.3 in July.
Some analysts said the data indicated that the Chinese government's efforts to boost the economy had not boosted firms' confidence.
Meanwhile, the PMI measure for US manufacturing indicated that the sector saw a slight improvement this month, with the index rising to 51.9 from 51.4 in July.
Markit said that despite the increase - the first for five months - weak export markets meant overseas demand for US goods was subdued.

Source: BBC

Hewlett-Packard Sales Slump Shows CEO Whitman’s Challenge

Hewlett-Packard Co. (HPQ) posted a record (HPQ) quarterly loss and reported slumping sales for personal computers and services aimed at businesses, underscoring the turnaround challenge facing Chief Executive Officer Meg Whitman.
The fiscal third-quarter loss of $8.86 billion includes a writedown for the enterprise-services unit and reflects a 10 percent decline in PC revenue. The company pared the high end of its full-year forecast for profit excluding some items to $4.07 a share, from $4.10, missing the average $4.08 analyst estimate (HPQ) compiled by Bloomberg.
Almost a year into her tenure at the helm of the largest personal computer maker, Whitman is boosting investment in research and development and revamping the PC, printer and enterprise-services units. Hewlett-Packard, which will discuss its 2013 outlook at an analyst meeting in October, is under pressure (HPQ) from rivals such as Apple Inc. in computing devices and International Business Machines Corp. among corporate clients.
“HP seems to have lost share in all of the key enterprise segments,” Abhey Lamba, an analyst at Mizuho Securities USA Inc. in New York, wrote in a research note after the results.
Hewlett-Packard fell 8.2 percent to $17.64 at the close in New York, the biggest decline since August 2011. The stock (HPQ) has dropped 32 percent this year.
The PC market remains weak, and the company is in the “early stages of a turnaround,” Whitman said yesterday on a conference call with analysts.

Windows 8

To help revive the PC division, Hewlett-Packard plans to release a tablet computer running Microsoft Corp.’s Windows 8 software later this year. The device will be aimed mainly at businesses rather than consumers, Whitman said in an interview. The company decided to design a tablet that’s “desirable” to workers while including security and durability features, rather than trying to take on Apple’s iPad directly, she said.
“Make no mistake about it, the consumer tablet market today is an Apple market,” Whitman said. “Our decision was not to just go straight at Apple with a me-too product.”
The company wants to ship the tablet this year, after the October introduction of Windows 8, though it may land on store shelves until next year, Whitman said.
Sales in Hewlett-Packard’s PC division declined 10 percent to $8.62 billion, Palo Alto, California-based Hewlett-Packard said yesterday in a statement. That added to evidence of a slump that showed up in results this week from Dell Inc. (DELL), which forecast third-quarter sales that missed estimates and cut its full-year profit outlook.

Defending Position

Even as she avoids chasing Apple on the consumer side, Whitman said she plans to defend Hewlett-Packard’s leadership in the larger market.
“We’re going to defend our No. 1 position” in PCs, Whitman told analysts. Lenovo Group Ltd. (992) has almost caught up with Hewlett-Packard as the world’s top PC supplier.
Profit excluding costs was $1 a share and sales (HPQ) were $29.7 billion in the third quarter ended July 31, matching analysts’ predictions. The per-share figure also met Hewlett-Packard’s forecast. Earnings excluding some items for the fiscal year ending in October will be $4.05 to $4.07 a share.
Results were affected by global economic weakness as customers take longer to agree to purchases, Chief Financial Officer Cathie Lesjak said in an interview.

Challenging Environment

“It was a tough, challenging economic environment,” she said. “The amount of time it takes to close deals is lengthening.”
One bright spot was sales of servers aimed at helping consumer Internet companies handle the rising tide of data coursing through user-profile pages.
“It’s where all the growth in the market is,” Whitman said on the conference call.
Third-quarter revenue declined 3.1 percent to $8.75 billion in services and slumped 2.7 percent to $6.02 billion in printers. Sales also slipped in the servers, storage and networking unit. Software climbed, increasing 18 percent.
In services, IBM has emulated the more efficient models of rivals such as Wipro Ltd. (WPRO) and Tata Consultancy Services Ltd. (TCS) by staffing up in India, said Lamba, who has a neutral (HPQ) rating on the shares. Hewlett-Packard hasn’t done so, he said.

Cutting Jobs

Whitman is cutting 27,000 jobs over two years and plans to invest in areas including security, cloud computing and data- analysis software. She’s also dismantling the acquisitions (HPQ) of Electronic Data Systems Corp. and Palm Inc., which were made by Mark Hurd, who was CEO from 2005 to 2010.
The company had said on Aug. 8 that third-quarter profit would be $1 a share. The company also said at the time that it would write down the value of its enterprise-services business by $8 billion, and take a higher-than-expected $1.5 billion to $1.7 billion charge for early retirement packages offered to workers.
The company is eliminating 10,000 to 15,000 jobs from the enterprise-services unit as part of the job cuts. The writedown reflects the dwindling value of EDS, bought by Hurd for $13.2 billion in 2008.
About 11,500 workers will leave Hewlett-Packard by the end of October, and the company plans to spend the savings on new software for its employees, cloud computing services, and “rainy day funds” to help bolster profits, Whitman said in the interview.

Source: Bloomberg

Why Bank With Trust Bank?

In the year 1997 when Trust bank came into being there were just 5 banks in The Gambia. Most of these banks were located in the greater Banjul Area and the total number of bank branches did not exceed 20. Bank head office branches closed for the day at 1300, their branches closed at 1230 and reopened from 1600 to 1830. Computerization was already a reality but neither widespread nor versatile.
The market was far from saturated and the banking industry had all the hallmarks of a sellers’ market. Customers had limited choice and had to accept most of what was dished out from the banks irrespective of its suitability or the lack of it. There was limited scope for telecommunication and interaction between the bank and its customer was more transactional than customer-centric. The product range of banks was very limited because banks were more preoccupied with efficiency from their own perspective than providing specifically targeted products to satisfy customer needs.
Financial sophistication was not very high and customers made very few burdensome demands from their banks.
These were the realities of the banking industry on the day that Trust bank was born when we made a solemn, sincere and very challenging pledge to become a highly successful Gambian bank offering world class products and services brought to the doorstep of our customers.
Since then we have worked diligently and persistently to make this promise a reality. We know that a lot of work still needs to be done but today we are proud to say that our bank has played an incomparable and unparalleled role in changing the financial services landscape of The Gambia. In so doing we have given our owners excellent returns, become the highest employer in the industry and contributed immensely to the socio-economic development of this country while always staying true to the values that we have held since inception which have so endeared us to the market. Today we are open for business from 0800 to 1600 (Monday to Friday) and 0900 to 1300 on Saturdays.
Today we operate from fifteen branches spread all around the country with a presence in almost all the regions.
Today we have a robust online banking platform that allows access to our services through the internet.
Today we have 10 ATM machines in 9 of our branches and a 10th one strategically located at the Kairaba Shopping Centre on the Kairaba Avenue.
Today we have a Point of Sale payment system that allows our customers to effect payments by swiping their Quick Cash card through terminals installed at selected partner merchants around the Greater Banjul Area.
Today we have the Trust Bank SMS Banking service, the most comprehensive and resourceful of its kind in our sub-region.
Today we have the Trust Alerts that send an automatic SMS or email to a customer whenever there is any transaction on their accounts. The feedbacks we have received from the market suggest that this one is fast becoming a crowd favorite. It gives the customer the assurance that he will be the first one to know whenever there is any movement in or out of their account. Information is power and with the Trust Alerts we have really raised the bar in our quest to empower our customer with real time information.
Today we have the Trust receipts which, not only provides information but does so in a way that tells our customers that their money has reached its intended destination without a shred of ambiguity. Fraud and wrong entries have always been an undesirable part of banking reality and it is incumbent on all well-run banks to continuously reassure its clientele as to our unwavering commitment to our fiduciary responsibility. With two diverse bodies like the Central of The Gambia and The Ghana Stock Exchange regulating our activities, our customers continue to be reassured of our standing. In the same vein we look at our conventional receipts and the Trust receipt as an additional source of comfort.
Our bank continues to provide core banking products with more and more commitment and conviction just like the automobile industry continues to provide vehicles that take you from A to B. Also, just like the mobile phone industry makes it possible for us to make and receive calls.
With both of these industries additional features have provided safety, comfort and convenience although not necessarily part of their core product. In the same vein our bank remains passionate about its core activities and there is no doubt that the cumulative effects of the augmentations witnessed since our inception has made us unrecognizable from the Trust Bank of 1997. We believe strongly that this passion will propel us to a level that, the Trust Bank of 2020 will be positively unrecognizable from that of 2010.

Mission Statement

Our mission is to be the leading bank in The Gambia by operating a profitable banking institute, which meets the needs of all local, international, corporate and individual clients and returns excellent results to our shareholders.

To achieve this, we shall continue to set new standards by delivering quality services and innovative products with an inspired team dedicated to serving our Customers, Environment and Community at large in the most caring manner.

Source: Trust Bank Ltd

The Ghost Of Lehman Brothers Still Haunts Real Estate Investors

It wasn't a big private equity firm or luxury developer. Rather, it was the estate of Lehman Brothers, which is still making deals nearly four years after its demise. In the past year, it paid $3 billion to take over Archstone from its creditors, and it is now preparing to take the firm public.

The failed bank still has condos, hotels and mortgages in its portfolio, which it values at $12.9 billion, according to Bloomberg. And instead of going quietly into liquidation, Lehman has been reminiscent of the aggressive firm that gorged on subprime assets as it continues to buy.
“The entire strategy was ‘don’t put yourself in a position of having to sell',"Jeffrey Fitts, Lehman’s head of real estate, told Bloomberg. “If you’re selling with a gun to your head and people know it, you’re dead and you will leave hundreds of millions of dollars on the table."

Lehman is betting that it will be able to sell its assets for higher prices as the real estate market recovers. It plans to pay creditors $53 billion, or 18 cents for each dollar owed by 2016, said Bloomberg. Lehman's assets range in size and area. They include Manhatan's On the Avenue Hotel, which Lehman took over for $191 million last June, a ski-and-golf resort in Montana, 73 condos at a Ritz-Carlton in Hawaii and development parcels in Arizona.

Source: International Business Times

S&P 500 Up For Sixth Week; Fear Index Hits Five-Year Low

The S&P 500 held near a four-year high on Friday, and the market's key gauge of anxiety sank to its lowest since 2007, suggesting a belief that the problems stressing investors might be closer to a resolution.

The Nasdaq outperformed the broader market as Apple shares reached an all-time high. The CBOE VIX volatility index (.VIX) hit a 5-year low of 13.43 before closing down 5.9 percent at 13.45.

The S&P 500 made a solid move above the closely watched 1,400 level in the last session, posting its biggest gain in two weeks. But trading volume remained low.

"From a sentiment point of view, the market has little to inhibit it from proceeding higher," said Ralph Edwards, director of derivatives strategy at ITG in New York.

"The best rallies are, of course, the broadest, so it makes sense to view, in real-time, the stocks that are propelling the index so as to make sure that the advance is not just being carried on the shoulders of one sector. Here, the news is also good."

Edwards noted that 47 S&P 500 stocks in all industry groups except for utilities have recently hit a 52-week high, among them Home Depot Inc (HD), PepsiCo Inc (PEP), Chevron Corp (CVX), SunTrust Banks Inc (STI), Covidien Plc (COV), 3M Co (MMM), Google Inc (GOOG), CF Industries Holdings (CF) and Sprint Nextel Corp (NYS:S).

With few news headlines and light participation during summer holidays, traders are increasingly taking their cues from market technicals. The S&P 500 needs to close above 1,41904, the index's April high, to make a new four-year high.

Shares in Apple Inc (AAPL) jumped to an all-time intraday high of $648.19 earlier in the session. The stock ended up 1.8 percent at $648.11. The Broker Jefferies raised its price target on the stock to $900 from $800 and gave it a 'buy' rating.

But Facebook shares continued to slide after the expiration of a lockup period on some of the company's stock following its initial public offering. The shares fell as low as $19 a share on Friday.

Groupon Inc (GRPN.O) also slumped to a new low on Friday after Evercore Partners analyst Ken Sena downgraded shares of the largest daily deal company and set a $3 price target on the stock. The stock closed down 5 percent at $4.75, after falling as low as $4.51.

The Dow Jones industrial average (^DJI) was up 25.09 points, or 0.19 percent, at 13,275.20. The Standard & Poor's 500 Index (^GSPC) was up 2.65 points, or 0.19 percent, at 1,418.16. The Nasdaq Composite Index (^IXIC) was up 14.20 points, or 0.46 percent, at 3,076.59.

For the week, the Dow was up 0.5 percent, the S&P 500 was up 0.9 percent and the Nasdaq was up 1.8 percent.

The S&P 500 has risen 2.8 percent in August and about 11 percent since a year low in June as traders eye some encouraging U.S. jobs data and highly anticipated policy meetings at the European Central Bank and the Federal Reserve in September.

The economic data on Wednesday was mixed, leaving investors wondering if the recovery was real.

The Thomson Reuters/University of Michigan consumer sentiment survey for August showed the main index rose to its highest since May to 73.6, buoyed by sales at retailers and low mortgage rates.

Separately, the Conference Board said its leading economic index climbed 0.4 percent, reversing a 0.4 percent decline in June and pointing to slow growth through the end of 2012.

"It's interesting because we've had this mixed bag from the economic data. Today's is a good step and yesterday was a little disappointing, with the housing data, so we are all just kind of wondering, is this recovery real?" said Ryan Detrick, senior technical strategist, Schaeffer's Investment Research in Cincinnati, Ohio.

Trading volume, which has been meager over the past several sessions during a seasonally slow period, was at 5.3 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq.

This week has seen the lowest and second lowest full-day trading volumes of the year.

The low was hit on Monday with just 4.54 billion shares on the Nasdaq, the NYSE and the Amex, about two thirds of the daily average this year.

The S&P rallied for six days through August 10, boosted by the anticipation of more actions from central banks in the United States and euro zone.

The S&P 500 rose to a four-month peak on Thursday after comments from German Chancellor Angela Merkel reinforced investor expectations for action to tackle the euro zone debt crisis.

Gap (GPS) advanced 4.8 percent to $35.99 after the clothing retailer posted a higher quarterly profit and raised its full-year forecast.

Marvell Technology Group Ltd (MRVL) dropped 14.1 percent to $10.54 after the chipmaker posted second-quarter earnings and said current-quarter results may miss expectations.

Source: Yahoo Finance

European Economy Slumps In Q2

The eurozone economy stumbled through the second quarter with a modest decline in gross domestic product, according to preliminary estimates released Tuesday, but Germany trumped expectations as a bright spot in the zone.
GDP for both the nations that use the euro and all 27 members of the European Union fell by 0.2% in the second quarter, compared to the prior quarter, according to a flash estimate from Eurostat, the EU's statistical office. In the first quarter, the eurozone GDP was unchanged and the EU-27 GDP grew by 0.1%.
Germany's GDP rose 0.3% compared to the prior quarter, while the French GDP was flat. Both figures beat expectations.
Deutsche Bank analysts Colin Tan and Jim Raid said the markets were expecting a 0.2% decline in the eurozone, a 0.2% gain for Germany, and a decline of 0.1% for France
"The German economy has once again escaped the technical recession many other eurozone countries are currently experiencing with no more than a fright," said Carsten Brzeski, senior economist at ING. "In fact, the economy remains the strongest of the eurozone."
But Brzeski said that German growth could slow down in the near future, since new orders from its European neighbors -- a big part of the German economy -- are drying up.
"The safety net of richly filled order books and low inventories have become thinner very rapidly, not boding well for growth in the second half of the year," he said. "We should not get carried away by a seeming invulnerability of the German economy."

Source: Cnn Money