Super Bowl, Jobless Claims and a Debt Deal in Greece

Our Two Cents – Week of 1/23/12

There’s nothing better than kicking off the week on some high notes—especially coming off last night’s victory from the New England Patriots, sending them to the Super Bowl.

In the U.S., optimism remained the key theme last week. Jobless claims dropped 50,000 to 325,000—down from 402,000 last week—marking the lowest level since April 2008 and the biggest drop since September 2005. Experts said the sharp decrease illustrated signs of an upward-ticking economy. According to new survey results, 40 percent of wealthy Americans have optimistic thoughts about the U.S. economy in 2012, the highest level of optimism in six months. The findings came from the December 2011 Ipsos Mendelsohn Affluent Barometer, which examines lifestyles, spending patterns and media habits of wealthy Americans (those whose household income is $100,000 or more). While wealthy Americans signaled their optimism for 2012, the hedge fund industry also displayed early signs of a good year. In terms of inflows, more than half of investors planned to boost their hedge fund investments this year, according to a Barclays survey. In the Forex world, U.S. client profitability has increased on average 6.4 percent in Q4 of 2011.

Signs of economic confidence even transcended the Atlantic to Europe. Spain enjoyed a successful auction of benchmark 10-year bonds that investors gobbled up. In Italy, Prime Minister Mario Monti said Germany—in its own self-interest—must assist Italy and other embattled euro zone nations to help lower borrowing costs. Monti heralded Germany’s

“culture of stability” as “a precious German product [that] has been marvelously exported.” In Greece, officials and private creditors continued to devise solutions for its debt, nearing agreements to write down 50 percent of the face value of the country’s debt by exchanging existing bonds for newer ones with longer maturities and lower interest rates. Officials are expected to meet Jan. 23 to further discuss and resolve Greece’s debt.



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