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| Weekly Wrap Up |
Equities continued to rally last week continuing to get a boost from the Fed and foreign central banks, which have collectively recently indicated that they do not intend to tighten liquidity in the near-term. The prospects of continued flow of easy money helped push the blue-chip DJIA to a 13 month high. It ended the week up 2.46% and the broader S&P 500 and the tech-heavy NASDAQ also enjoyed similar gains. Stocks were in the green each day last week except for Thursday as the market continues to inch up albeit on light volume. There are a still number of traders who believe that the market is overextended (especially given that the unemployment rate is at 10.2% and that consumer confidence is shaky (e.g. the University of Michigan index released on Friday came in well below expectations)) and due for a pullback but those voices are in the minority now. Any pullbacks are likely to be less severe than previously expected. Kraft Foods (KFT: Charts, News, Offers) continues to pursue a hostile takeover of Cadbury (CBY: Charts, News, Offers), Hewlett-Packard (HPQ: Charts, News, Offers) bought the networking company 3Com (COMS: Charts, News, Offers) for $2.7 billion, and GE (GE: Charts, News, Offers) is getting closer to selling 51% of NBC to Comcast (CMCSA: Charts, News, Offers). Retail stocks were in focus on Friday as investors expressed optimism that the holiday shopping season might end up being stronger than expected. Abercrombie & Fitch (ANF: Charts, News, Offers) and J.C. Penney (JCP: Charts, News, Offers) were among those in the sector that posted better than expected results. The dollar continued to lose ground as it fell 0.45% for the week.
Looking ahead, this week will see investors get some inflation data with the producer price index due on Tuesday and the consumer index out a day later. More economic reports are due Thursday including weekly jobless claims and the Philadelphia Fed's manufacturing survey. J.M. Smucker (SJM: Charts, News, Offers) and Ann Taylor (ANN: Charts, News, Offers) will report earnings on Friday. More Market News
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| Economic News |
Under Attack, Fed Chief Studies Politics
With the Federal Reserve under more intense attack than at any time in decades, Ben S. Bernanke, the professorial chairman of the central bank, was schooled last month in how to handle the increased political demands of his job. For months, he had warned -- without anyone on Capitol Hill appearing to listen -- that a seemingly innocuous bill to let Congress "audit" the Fed would gravely threaten the central bank's independence. (Source: New York Times) Click here to read the full article
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Robert Rubin: The Nexus Of Big Government and Wall Street
For anyone who thinks that big Wall Street and Big Government aren't joined at the hip, promoting policies and laws that keep each other fat and happy often at the expense of the American taxpayer, consider the career of Robert Rubin. Rubin, of course, is largely gone from the public scene after spending 10 disastrous years as a board member and senior executive at Citigroup (C: Charts, News, Offers), the banking giant that epitomizes all that is wrong with American finance, and before that, a largely successful run as Treasury Secretary in the Clinton Administration, which he joined after running another controversial bank, Goldman Sachs (GS: Charts, News, Offers). But his legacy looms large, mainly because I believe he was one of the reasons why the financial crisis occurred in the first place. (Source: Big Government) Click here to read the full article
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Why the last 10 years have been an economic disappointment for most Americans
As we dig out from the rubble of the financial sector's collapse, it's common to hear analysts fret that the United States may now be facing a Japan-style "lost decade." Throughout the 1990s, after its real estate and stock bubble burst, Japan struggled with low growth for more than 10 years. It emerged from the decade shrunken and sapped of confidence, with very little to show for a large amount of government spending and near-zero interest rates. I'm not particularly concerned that the United States is in for a lost decade. Our political and financial leadership reacted much more quickly than Japan's did, and the U.S. system, for all its faults, processes failure quickly. More importantly, we've already had our lost decade. (Source: Slate) Click here to read the full article
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| Business News |
Intel Escapes Its Legal Morass, One Settlement at a Time
Intel (INTC: Charts, News, Offers) and AMD (AMD: Charts, News, Offers) have finally put a long and bitter disagreement to bed, and in the end, all it took was a little open communication and understanding, along with one and a quarter billion dollars. The two have been at it for years -- accusations, threats, lawsuits. AMD said Intel engaged in anticompetitive behavior; Intel said AMD broke its licensing agreements.
Now Intel has agreed to pay AMD US$1.25 billion to stop with the lawsuits. That makes the underdog AMD the winner as far as this round is concerned, but just how much of a winner is uncertain because certain provisions of the settlement are to be kept secret. (Source: ECommerceTimes) Click here to read the full article
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Lessons from the Bear Stearns acquittals
How the prosecutors must have wished to have a go at Ralph Cioffi in the flesh! If only Cioffi and Matthew Tannin, the two Bear Stearns fund managers acquitted yesterday of insider trading and other charges, had had the gall to take the stand in their own defenses and to submit to what the Feds must have hoped would be a withering cross-examination. Well, no such luck. White-collar crime is by its nature often not the stuff of high drama in the courtroom, but what makes it fun is that so many defendants, convinced they can impress a jury with their authority, sincerity, and intelligence, take the stand. Then, most often, they go to jail. (Source: TheBigMoney) Click here to read the full article
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Why Comcast Should Focus on the NFL and not NBC
What's the point of being a media-mogul if you don't indulge every now and then with a splashy purchase? Focusing on your core business and driving more value to your customers is all well and good but it gets boring after a little while. M&A is where the real fun lies. Comcast CEO Brian Roberts shares these sentiments as was apparent when he launched a failed hostile bid for Disney in 2004 and as will be further crystallized, when he, likely next week, announces a deal to buy the majority stake in NBC Universal. Though Comcast shareholders will be getting NBCU at a decent price, over the long term, this transaction will not end up panning out as advertised. (Source: InvestorGuide) Click here to read the full article
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| Technology Focus |
Murdoch to Google: Search This
As unlikely as it sounds, Rupert Murdoch may end up being our last best hope for a peaceful solution to the Internet's war on professional journalism. A man who many blame for commodifying, globalizing, sensationalizing, and cheapening news is considering taking a stand against a force even bigger than himself: the Web link. "They shouldn't have had it free all the time, and I think we've been asleep. It costs us a lot of money to put together a newspaper." (Source: TheDailyBeast) Click here to read the full article
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Why Apple Leaves Low-End Computers to the Competition
It's no secret that Apple (AAPL: Charts, News, Offers) is doing really well at the high end of the personal computer business, but the other day I got some data that cast its recent achievements in a whole new light. In September, according to market researcher NPD Group, Macs accounted for 18.9% of all laptops and desktops sold in U.S. retail outlets. For computers priced above $1,000, Apple's share was an astonishing 89%.
The NPD numbers overstate Apple's dominance to some degree. They exclude most sales to large enterprises, which strongly prefer high-end PCs to Macs. Still, the business implications are inescapable. (Source: BusinessWeek) Click here to read the full article
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'Modern Warfare 2' crosses the line with controversial scene
"Call of Duty: Modern Warfare 2" made more than $300 million on its first day in North America and the United Kingdom. That's more than the Yankees spent to win the World Series. It's the highest-grossing launch in the history of entertainment, but it's nothing compared to what defense contractors earned this decade. Real war is still the best business going.
Video games should mature along with their audience. Games should tackle morally ambiguous situations in a thoughtful manner, challenging players to think long and hard about the actions and decisions they make. That's not what "Modern Warfare 2" does, though. It's less interested in contemplating violence, either real or fictional, than in testing the boundaries of good taste. (Source: Boston Herald) Click here to read the full article
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| Your Money |
Stocks: Five Market Mistakes to Avoid
Markets may have rebounded in 2009, but individual investors are still edgy and shell-shocked. Even as the broad Standard & Poor's 500-stock index remained up 56% since March, the U.S. unemployment rate crept above 10%, according to a Labor Dept. report released Nov. 6. "I don't think many people are feeling very relieved," says Milo Benningfield of Benningfield Financial Advisors in San Francisco. Many people believe the "[stock market rally] can't last," he says. These remain risky times, and the last few years have demonstrated to investors the high cost of doing the wrong thing. Against that nervous backdrop, BusinessWeek asked financial advisers what common mistakes investors are making, and how to avoid them. (Source: BusinessWeek) Click here to read the full article
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Give Me Goldman Over Gandhi
I have to laugh when I hear about greedy, unscrupulous financiers supposedly ripping off "hard working Americans." While it might make a sympathetic story on the 11 p.m. news, my own experience in subprime lending led to big losses for me, not the borrower. Three years ago I wrote about Prosper.com, a micro-lending marketplace where investors have made $183 million worth of loans since 2005. Prospective borrowers post eBay-style ads outlining their credit history and planned use for the money. Lenders bid on pieces of the loan and receive their corresponding share of interest payments. At one point I had invested in well over 1,000 loans. Some had rates as high as 36%. And while that might seem usurious to politicians in Washington, the reality is that interest rates on everything from mortgages to motor homes are not arbitrary. (Source: SmartMoney) Click here to read the full article
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