Current Event.... (again)

Here is yet another current event about the stock market.

Article: "Stock rebound on Citi talk," from CNNMoney.com

Here is the link:
http://money.cnn.com/2008/11/21/markets/stockswatch/index.htm?postversion=2008112109


Current Event

Stocks rebounded Friday with talks of Cit bank putting itself up for sale. This talk boosted stocks a little bit on Friday. This was needed because of the severe drop on Thursday to their stock and many others. The company has lost more than $20 billion in the last four quarters. Just to show the volatility of the market, their stock jumped 6% just because they were considering putting themselves on the block. Others are talking of the same thing as Citi. Washington Mutual, or WAMU, is cutting 1,600 more jobs near San Fransisco, Bringing their total employment to merely 11,000 people. Dell is also in the mix saying that because of the economic situation people are cutting on technology spending. Oil, However, is back up 50 cents to $49.92 a barrel. Gas price's average has slipped below two dollars to $1.989 for the national average.

I wrote this writeup on Thursday night of the week before break. But i still think that it is crazy that things, like just talk of sale, can make a stock rise 6% the very morning. People just plain don't know what to do in today's market. I see what the are thinking in this situation. They think that if Citi is bought, then the stock price will go up because they aren't in financial trouble at that second. that is when people plan to sell, PLUNGING the stock price to lower than what it was before they were bought out. The volatility of today's market falls completely on the people's indecisiveness and emotions. Emotions aren't supposed to be a part of investing because it normally turns out for the worse.

Bobby Donelson

Bobby died yesterday from cardiac arrest. This hit the school and everyone in it very hard. Bobby was a kid that always knew how to lighten the mood in a serious situation. He always lit up a room when he walked in. Even though I, personally, didn't know him as well as I would have liked to, he is still in my heart. My prayers go out to the Donelson Family and Chris. I know it may not seem like it now, but he is in a better place and God had this plan for him long before it actually happened. None of us here may know why, but it was definitely meant to be and he is in better hands.

We already miss you Bobby.
Good luck up there and have fun in God's presence.

Current Event

Here is my current event and writeup for this week.

Article, "Bank of England: Inflation to fall below 2%"

Here is the link and the writeup is below.

http://money.cnn.com/2008/11/12/news/economy/boe_inflation.ap/index.htm


Current Event

In this article, "Bank of England: Inflation to fall below 2%," from CNNMoney.com, the author talks about the current situation in Britain and how inflation is beginning to fall and will most likely be below the predicted 2% within the next year. Inflation rose to 5.2% during September of his year because of oil and fast food prices. The Bank of England expects to see inflation plummet because of the near recession fears and reduced consumer spending. Bank of England governor Mervyn King says, "Inflation will fall below targets, but we aim to get back there in the medium term." The bank can lower the base interest rate and, in turn, could increase the rate of inflation because it normally stimulates consumer spending. They have already slashed their rate by 1.5% this year to try and stay away from recession. this was definitely huge and not expected by most economists.Wednesday's report shows that other rate cuts are looming. "The report reveals that if interest rates were held at 3.0%, inflation would likely fall close to 0% in 2010," said Richard Snook. He is the senior economist at the Center for Economics and Business Research.

I think that this article shows that there is definite recession in the future. Inflation rates have not been this low in a long time. I belive that the interest rates in many countries will someday hit zero. this will be the day that we have a chance to dig ourselves out of the hole because people will most likely take out loans and spend because of the 0% interest. that is if we don't ever get to the point of no return, and we just continue going downhill.

Obama and Economy Current Event

Here is My second Current event for this week.

Article, "It will be hard to create jobs," from CNNMoney.com.

http://money.cnn.com/2008/11/05/news/companies/jobs_outlook/index.htm


Current Event

In this article, "It will be hard to create jobs," from CNNMoney.com, by Chris Isidore, the author talks about how jobs in the USA are still declining and will probably continue to do so even when Obama is in office. The article says that even though Obama had the better economic plan, there is really nothing he can do about unemployment and job loss in the short term. Andrew Reina says, "It's an uphill battle. He's going to have a lot of work on his hands early on." the article also talks about what Obama should focus on early on in his presidency. One of these things is Obama helping out the automakers of this country. The auto industry would like the same help from the government that the banks have gotten recently. Mark Zandi, Moody's economy.com's chief economist, says that businesses will do what they will do regardless of the government, in the next six months. Other economists say that it could be 2010 by the time jobs make a comeback. They do believe that Obama can set up a program to create long term jobs in the US. Mark Vitner, chief economist from Wachovia, says, Banks will continue to tighten until we see an improvement in credit quality. That's 18 months to two years away. The credit cycle has to pay out, You can't legislate lending."

I agree with this article because I think that short term job stimulation and lending stimulation will not work in tody's economy. Jobs need to make a comeback but that really can't happen until the economy is "fixed," and companies can hire more people.

Credit and Banks Current event

Here is my link and writeup for this week's current event. This article is about credit and banks of the USA.

Link to, "Lending expands in nervous market," from CNNMoney.com

http://money.cnn.com/2008/11/06/news/economy/commercial_paper/index.htm


Current Event

In this article, “Lending expands in a nervous market,” from CNNMoney.com, by David Goldman, the author talk about the recently stimulated credit market between banks. The Federal Reserve has officially stimulated the credit that banks are extending to each other. Even though the Fed is the main player, other banks have begun to get back to where they were last year around this time with extending credit to each other. The amount of dough being pushed around is up to $1.6 trillion. Back up to a five week high. We're still not where we were last year at $1.9 trillion but it is a sign that it may not be as long of a wait for the economy to get back on its feet. Because of the way things have been going the past quarter, banks and investors are only looking at the return, and that's it. Buying paper is definitely not a prosperous return at this point in time, this is why no one is buying it up because of the risk. They are not interested in helping anyone or anything out. They are only concerned about what is in it for them. The Fed's program was definitely aimed toward providing a “backstop” for the market to stimulate the buying up of paper by other banks and companies. The author believes that this program may still take hold, but he also says that it could take way longer than expected.

I think that this could be the best program that could be enacted and followed through with because this would keep banks where they are at with extending credit to other banks. The Fed can probably turn at least part of the crisis right side up with this program. Our entire economy definitely depends on banks extending credit to one another. If credit didn't exist, the current and past American Economy wouldn't either.