Morning Business Memo
Thank you Europe! The global financial jitters caused by the European debt crisis are leading to big savings for American consumers. Thanks to a likely fall in global demand, crude oil prices have fallen to $88 a barrel. That could mean summer savings on gas at a time when prices at the pumps usually head higher. Averages prices fell to $3.67 a gallon, says the Energy Department. Surveys by the Oil Price Information Service and AAA report a sharper drop. Some oil analysts are forecasting a further 25-cent price reduction by August, if crude futures stay where they are today. Oil futures reached a peak $110 earlier this year.
The yield on 10-year Treasury note - a baseline for many mortgage rates - has fallen to a new record low of 1.60 percent. Fixed-rate home loans have been falling in recent weeks. The rate might come down a bit more. Investors see US Treasuries as a safe haven, and that means big savings for taxpayers. The US government is paying less to finance its debt.
The down side of Europe's debt crisis? There are many negatives here and overseas. US exports could be hit by falling demand, leading to lower sales for some businesses. The stock market is having a rough May, with the Dow Jones and other averages falling by more than 5 percent. The Dow closed down 161 points - more than wiping out the gain the day before.
Tough talk from Europe's top banker. Mario Draghi, head of the European Central Bank, is calling for more centralized authority to oversee troubled banks, criticizing national regulators for choosing "the worst possible way" to help their banking sectors by delaying tough decisions. Draghi said bailouts for Bankia in Spain, and before that Dexia in Belgium, show that national regulators are reluctant to admit the extent of troubles at home.
High fructose corn syrup won't get a wholesome new name after all. The Food and Drug Administration rejected the Corn Refiners Association's bid to rename its sweetening agent "corn sugar." Given the sweetener's tarnished reputation in recent years, the association submitted an application to the agency in 2010 to have the product renamed on nutrition labels.
Richard Davies Business Correspondent ABC NEWS Radio