Subscribe to feed

European leaders meet in Brussels amid growing fears that Spain, Europe's fifth-largest economy, is preparing to ask for a bailout which would dwarf the €110bn (£90bn) rescue plan for Greece. The Spanish government dismissed reports that it was already in discussions with the European Commission, International Monetary Fund and the US Treasury for a rescue package worth up to €250bn. Officials in Madrid, Brussels and Paris were forced to deny that a Spanish bailout - which would take the European debt and euro crisis into a potentially dangerous new phase - was on the Brussels summit agenda.
 
More than 90 U.S. banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations. The statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss.
   
The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed. Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month and overshadowed a report that showed consumer prices remain essentially flat. A rise in first-time jobless claims, combined with this week's report that said new home construction plunged in May after government incentives expired, highlighted fears about the strength of the economic rebound.
  
One of the effects of PBSS (Post-Bear Stress Syndrome) has been the flood of money into fixed income over the last couple of years.   According to the Investment Company Institute, from October of 2007 through May 2010 there have been net inflows into bond funds of $230 billion while there have been net redemptions from equity funds of $553 billion.  After going through two major bear markets in 10 years, investors want less risk. It is only understandable that investors have reacted this way.  Over the last ten years, investor’s focus has steadily moved from investing in order to achieve long-term financial goals, like providing for a comfortable retirement, to a focus on avoiding short-term portfolio losses.