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| Weekly Wrap Up |
Last week's market ended with mixed results as the financial sector experienced a roller coaster of events. The week started off strong with the U.S. Treasury announcing its takeover of Freddie Mac (FRE: Charts, News, Offers) and Fannie Mae(FNM: Charts, News, Offers), which seemed to bring a sense of security back to investors. However, this positive momentum was quickly halted as news broke that South Korea Development Bank had stop dealing with Lehman Brothers(LEH: Charts, News, Offers). AIG(AIG: Charts, News, Offers) also experienced some troubles as its stock tumbled after reports surfaced claiming that its CEO is considering selling certain divisions to raise capital. The UAL Coropration(UAUA: Charts, News, Offers), United Airlines parent company, dispelled talks of it filing bankruptcy after announcing the source of the rumor was reporting false information. Nevertheless, the markets crept upward throughout the week as oil prices continued to decline. The turmoil in the financial sector was offset by the performance in oil services and other commodity stocks. Oil prices dropped 65 cents during Friday’s session alone, and ended the week at $100.22 per barrel. More Market News
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| Economic News |
Americans are losing their jobs at a steady clip. According to a Labor Dept. report released Sept. 5, the unemployment rate hit 6.1% in August, and U.S. payrolls dropped 84,000 with both numbers worse than economists were expecting.
After an initial decline, U.S. stocks seemed to shrug off the bad news by posting modest gains on Sept. 5. Nonetheless, there are plenty of reasons a weakening labor market should alarm investors. (Source: BusinessWeek) Full Story
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The U.S. dollar has been in a multi-year freefall, plummeting over 40% since early 2002. Recently, it has seemed as though this multi-year move might be reversing itself as the greenback has enjoyed a tremendous rally, rising nearly 10% since the middle of July. Like us, many investors and market commentators applaud this upward move in our currency. However, many investors and commentators do not seem to understand what the move means or why it is happening. (Source: Real Clear Markets) Full Story
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The new Census Bureau data on income and poverty reveal that many of the economic trends in this country are a lot more favorable than America's detractors seems to think. In 2007, overall real median family income increased to $50,233, up $600 from 2006. The real median income for intact families - mother and father in the home - rose to $78,000, an all-time high.
Although incomes fell sharply in the U.S. after the dot-com bubble burst in 2000 (and still haven't fully recovered), these latest statistics reflect a 25-year trend of upward economic mobility. More important, Barack Obama is wrong when he states on his campaign Web site that the economic policies started by Ronald Reagan have rewarded "wealth not work." Based on this false claim -- that the rich have benefited by economic growth while others have not -- he intends to raise tax rates on high-income individuals. (Source: Wall Street Journal Online) Full Story
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Crude oil on the futures market briefly sank below the $100 a barrel Friday for the first time since April 2. - suggesting investors believe a worsening global economy will continue to drive down demand for some time in the United States and elsewhere. Gasoline prices, however, jumped at the wholesale level as Hurricane Ike swept toward Houston, home to about one-fifth of U.S. refining capacity, and the site of a major fuel and grain distribution channel. (Source: USA Today) Full Story
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| Business News |
Biodel shares plummeted early Monday after the drugmaker reported mixed late-stage data on its diabetes treatment prospect VIAject. The trials met their primary endpoint, but data varied considerably between study sites - with "medically improbable" results in data collected from treatment sites in India. (Source: The Street.com) Full Story
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When the history is written on the collapse of Fannie Mae(FNM: Charts, News, Offers) and Freddie Mac(FRE: Charts, News, Offers), it will go down in the annals of corporate scandals as one of the greatest accounting scams committed in broad daylight. All anyone had to do to know the government-guaranteed mortgage financiers were insolvent was read their financial statements. You didn't need a trained professional eye to discern this open secret, only a skeptical one. (Source: Bloomberg) Full Story
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Its future in jeopardy and options dwindling, Lehman Brothers (LEH: Charts, News, Offers) scoured Wall Street Thursday for a financial lifeline. Top executives contacted banks and rival investment houses about a possible deal to buy the company, bankers and industry executives close to the situation said. The nation's fourth-largest investment bank, which had tenaciously resisted putting itself up for sale, finally relented after a free-fall in its stock price and growing doubts about whether other financial institutions would continue to do business with it, according to these officials. They asked not to be named because they are not authorized to comment publicly. (Source: MSNBC) Full Story
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| Technology Focus |
It was a familiar refrain: The U.S., the birthplace of the Internet, was a wireless backwater. Even early in this decade, many viewed the U.S. as a developing market, fit mostly for hand-me-downs from the more advanced Europeans and Asians. Unlike unified Europe, the U.S. market was fractured by warring radio standards and dotted with dead zones. Long after cellular was a way of life elsewhere, Americans still carried beepers and left messages saying to call cell phones only in emergencies. America was to be pitied, and the competitive upshot was huge: The next great innovations in wireless, including the mobile Internet, were likely to arrive from outside the U.S. (Source: BusinessWeek) Full Story
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Apple (AAPL: Charts, News, Offers), the consumer electronics giant, on Tuesday rolled out new versions of its popular iPod music player, but failed to deliver the surprises that finicky investors have come to expect. The new iPod line announced by CEO Steve Jobs at a press event in San Francisco, which Apple dubbed "Let's Rock." Among other things, Jobs cut the price on the year-old iPod Touch and unveiled a new Nano video player. Shares, which were flat throughout the presentation, fell 3% at the end of Jobs' speech as investors signaled their disappointment that more sweeping changes in products and pricing weren't in the works. (Source: CNNMoney.com) Full Story
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| Your Money |
The classic vision of retirement planning goes something like this: You start broke. You invest as best you can, and if nothing goes too terribly wrong, you finish with enough money to support yourself. Retirement expert Moshe A. Milevsky, an associate professor at York University's business school in Toronto, sees it a bit differently. In his view, you start with all the wealth you need in the form of your lifetime earning power. Your job is to convert that personal asset as efficiently as possible into financial assets you can live off once your earning power runs out. (Source: CNNMoney.com) Full Story
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