Last week, things looked bleak for equity investors. Â As the Dow Jones and S&P 500 slid to historic lows, and the TED spread soared to a historic high (more on that below), it looked to many like the thing to do was pull out of stocks entirely, and enter safer assets like gold , T-bills , and steady bank savings accounts. Â But on Monday, the market bounced, led by the news that the U.S. government will invest up to $250 billion to shore up the U.S. banking system in a plan similar to measures taken by several European powers, including Germany and the U.K.
Does this mean the crisis is over , and stocks will recover the trillions of dollars in market cap they lost over the past two weeks?  Unlikely.  Events of the past several months have shown that each time the market rebounds, a fresh bit of disheartening news about one macroeconomic indicator or another causes a sharp decline.  Just recently, this happened after the government intervened with Bear Stearns...
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REITs and the Survival of Fannie Mae and Freddie MacFrom: thesimplifiedinvestor.com
Post Date: 2008-09-09 18:53:59
The government takeover of Fannie Mae and Freddie Mac will have far-reaching economic effects. For example, hedge funds that bet against the two companies have already seen windfall profits as the stock prices of both companies plummeted over the weekend, while the financial institutions that invested in the nearly $5 trillion in mortgages and mortgage-backed securities that FNM and FRE guarantee can breathe a sigh of relief. The government bailout should help avoid a global financial c...
more Can TRW Automotive Escape the Michigan Auto Maker Mess?From: thesimplifiedinvestor.com
Post Date: 2008-09-04 13:26:31
The problems plaguing the Big Three American auto makers in 2008 have been well-documented. The push for flashy SUVs that guzzle gas but impress at the suburban strip mall caused Ford , GM , and Daimler to shift production towards these bigger cars, but these divisions have become huge drains on profits in recent quarters. Consumers have responded to the explosion of oil and gas prices and stopped buying trucks and sport utility vehicles, looking instead toward more fuel-efficient a...
more What Election 2008 Will Do For Our Economy, And Your Tax BillFrom: thesimplifiedinvestor.com
Post Date: 2008-08-28 00:20:41
The economic visions of the presidential candidates in 2008 are dramatically different, and the contrast is most striking when they discuss taxation. Barack Obama will steal from the pages of English folklore and take from the rich to give to the poor; well, actually, to the middle class, who will benefit from major tax cuts. John McCain sees things differently, and he will cut taxes across the board - most heavily in the highest income bracket, who will see more than $250,000 pumped back i...
more Can Boeing’s 787 Dreamliner Get off the Ground - or will Airbus Ride the A380 to New Heights?From: thesimplifiedinvestor.com
Post Date: 2008-08-21 14:44:45
In the battle for supremacy in the aircraft business, there are only two real players - Boeing Company (NYSE:BA) and Airbus (EPA:EAD). These two companies compete for market share in commercial and military planes, with demand far exceeding each company’s manufacturing ability, and both have a long order backlog. Some of Boeing’s customers, for example, will wait as long as five years before the planes they ordered are delivered. And while they fill these o...
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