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| Weekly Wrap Up |
The stock market had another down week as worries about the stability of some of the country's biggest financial institutions combined with continuing signs of a deep recession dogged equities. The DJIA declined just over 200 points for the week and the S&P 500 fell 2.64%. The markets were closed on Monday and therefore, inauguration day was the first trading of the week. Traders, who were hoping for at least a short-term bounce during the honeymoon period of the Obama administration, have so far been left disappointed. Instead, the stock market is still being held hostage to the financial sector which pulled the DJIA below the 8,000 level on Tuesday on concerns that Bank of America (BAC: Charts, News, Offers) and Citigroup (C: Charts, News, Offers) might need additional government assistance. State Street (STT: Charts, News, Offers) also disappointed the market by reporting a substantial amount of unrealized losses. Wednesday saw the opposite, as financials pulled up the Dow and tacked on 279 points to it. Traders were enthused by insider buying in BofA. However, it was downhill from there on for the rest of the week. John Thain leaving BofA and Microsoft’s (MSFT: Charts, News, Offers) disappointing earnings report along with continuing bearish data on jobless claims put an end to a short-lived rally. General Electric (GE: Charts, News, Offers) was the big headline on Friday as the industrial conglomerate met reduced profit expectations but investors wondered aloud whether the company could keep paying its dividend and maintain its Triple-A credit rating. More Market News
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| Economic News |
It was a tough speech for tough times. Barack Obama's inauguration was a sobering, bitingly cold morning of reflection, not the joyful celebration that the inauguration of the first black president would have prompted in less desperate circumstances. And by calling for sacrifice and maturity after the long enjoyment of "childish things", Mr Obama showed a grasp of the magnitude of the task ahead and also started to rein in the more messianic expectations of his supporters.
Not before time. In the past, Mr Obama has been a bit too prone to play to the zealots who surround him. As he clinched the nomination, he announced "this was the moment when the rise of the oceans began to slow and our planet began to heal." Even as he stood on the west steps of the Capitol, he was still not entirely immune from this temptation--promising the nearly 2m people before him solutions to failing schools, poor health care, lost jobs and even saying (rather awkwardly) that he would 'roll back the spectre of a warming planet". (Source: Economist) Full Story
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On the eve of Barack Obama's inaugural speech, with a tough economic downturn and the ongoing threat from global terrorism, perhaps it is useful to recall Ronald Reagan's first inaugural address, delivered on January 20, 1981.
Reagan faced a terrible economy, too, and the growing Soviet threat loomed large. Spirits at home were low then, just as they are today. Problems seemed insurmountable then, just as many believe they are today. Early in his speech Reagan set it all out: "These United States are confronted with an economic affliction of great proportions." He then defined the central problem: "We suffer from the longest and one of the worst sustained inflations in our national history. It distorts our economic decisions, penalizes thrift, and crushes the struggling young and the fixed-income elderly alike. It threatens to shatter the lives of millions of our people." (Source: National Review Online) Full Story
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Some leading Democratic and Republican lawmakers criticized aspects of President Barack Obama’s $825 billion economic-stimulus plan.
House Minority Leader John Boehner (R., Ohio) said there were elements of the Obama plan he could support, but taken together, not enough to win his vote. "If it's the plan that I see today, put me down in the 'no' column," he told NBC News's "Meet the Press." "I think a lot of Republicans will vote 'no,' because they see this as a lot of wasteful Washington spending, padding the bureaucracy and doing nothing to help create jobs and preserve jobs."
Senate Budget Committee chairman, Democrat Kent Conrad of North Dakota, meanwhile, said Obama's plan doesn't go far enough. (Source: Wall Street Journal Blogs) Full Story
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| Business News |
The stunning announcement of John Thain's departure from Bank of America (BAC: Charts, News, Offers) yesterday, less than a month after merging Merrill Lynch into the bank would have been unthinkable a few weeks ago. After announcing the shotgun marriage of Merrill Lynch with Bank of America in September, hours after Lehman Brothers collapsed, the sterling reputation of John Thain was cemented: This was a CEO who could do no wrong. Revelations leaking out of Bank of America in the last few days, and Thain's departure today, alter his image -- perhaps irreparably. Observers now wonder how this quiet, smart overachiever could have shown such poor judgment. (Source: TheStreet) Full Story
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One wonders whether Jack Welch, the former head of General Electric (GE: Charts, News, Offers), is already loading his handgun.
In April last year, Mr Welch threatened his successor, Jeff Immelt, that should the incumbent chief executive miss earnings targets again, he would "get a gun out and shoot" him.
This morning GE was forced to admit to Wall Street that while profits during the last quarter of the year had met modest expectations, they had still plunged 44 per cent over the period. Mr Immelt also warned shareholders that 2009 would be "extremely difficult". (Source: The Times Online) Full Story
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It seems that Pfizer (PFE: Charts, News, Offers) is willing to pay $68.0 billion to solve the problem of its upcoming patent vacuum.
The New York City-based pharmaceutical firm plans to pay $50.19 per share for Wyeth, in a part cash/part stock transaction. The move to buy Wyeth (WYE: Charts, News, Offers) is the first in a new round of consolidation in the pharmaceutical industry, in what analysts expect will be a significant shrinking of the sector. "The next big pharma merger is likely to see a level of cost cutting not seen before," wrote Sanford C. Bernstein analyst Tim Anderson in a note to investors. (Source: Forbes) Full Story
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| Technology Focus |
IBM (IBM: Charts, News, Offers) reported a solid 12 percent gain in net income for the fourth quarter, bucking the trend of steep declines for many technology companies amid the economic downturn and surprising Wall Street. The company is seen as a bellwether of global technology spending among corporations. Yet its strong performance in the fourth quarter, analysts say, mainly points to the success of its strategy in recent years of tilting toward higher-profit software and services and reducing its reliance on the computer hardware business, which suffers more in down economic cycles. (Source: New York Times) Full Story
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Even as the economy skids, Google (GOOG: Charts, News, Offers) keeps on rolling--just a little more slowly than it used to. Bucking the stalling economy and worsening outlook for online advertising, the search advertising titan on Jan. 22 reported better-than-expected fourth-quarter results. The numbers suggest Google will keep grabbing more of the online ad market from traditional media and from struggling online rivals such as Yahoo! (YHOO: Charts, News, Offers) and Microsoft (MSFT: Charts, News, Offers).
Shares of Google, which fell 56% last year, slipped almost 3% in extended trading after an initial 4% gain. Enthusiasm for the company's fourth-quarter results was muted by questions about whether Google can keep posting solid gains as advertisers rein in spending. (Source: BusinessWeek) Full Story
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Barack Obama is the first wired president, ready to exchange e-mail with close friends and advisers. When do the rest of us get to read them?
We may have to wait until as late as 2028, depending on when Obama leaves office as president. That's according to leading presidential historians who make their living hunting through records at the National Archives and Records Administration.
White House lawyers maintain that Obama's messages are subject to the Presidential Records Act, a post-Watergate law intended to stop former presidents from carting away the records of their time in office. But the law also gives ex-presidents exclusive access to their own records for lengthy periods, allowing them to cash in on memoirs that rely on material the public hasn't seen. (Source: Associated Press) Full Story
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| Your Money |
Consumers are paying close attention to all aspects of their finances these days. Plunging investments. Falling home values. And, erroneous credit card charges. When the latter are discovered, many consumers file disputes with their card issuers.
No industry statistics are available about how often such disputes are won by consumers. But to maximize their chances, consumers should know how to navigate the maze of rules governing credit card disputes.
Under federal law, "You're entitled to an investigation (of the dispute) but not entitled to a particular result," says Chi Chi Wu, staff attorney at the National Consumer Law Center.
Mike Gaynor of Chicago says he's become an unwilling expert after spending almost 10 months and more than 100 hours fighting credit card charges. (Source: USA Today) Full Story
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There is a major social and cultural message in the current economic collapse for the future retirees of America: Forget retirement.
That's right. The recession is making clear what we've suspected for a long time. The concept of not working and embracing leisure for the last third of one's life isn't practical for most people.
Put it this way: Survey after survey has shown that a majority of aging baby boomers plan on working in retirement. Well, that plan is coming true. (Source: MSNBC) Full Story
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