Posted by: Kim_Hamilton on 11/18/2008 10:48 AM
Updated by: Kim_Hamilton on 11/18/2008 10:49 AM
Expires: 01/01/2013 12:00 AM
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Weekly Economic Update for November 17th, 2008~By Donna M. Stevenson of Pacific West Financial
Donna M. Stevenson- Pacific West Financial Group Presents Weekly Economic Update for the Week of November 17th, 2008....
Quote of the week. “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” – Gen. George S. Patton
Retail sales drop 2.8%. So says the October data from the Commerce Department. That is the biggest monthly dip ever (but recordkeeping only began in 1992). Analysts had forecast a 2.4% decline.1
Mortgage help on way? Friday, the Federal Deposit Insurance Corporation unveiled a plan to modify approximately 2.2 million mortgages: if lenders agree to refinance certain home loans, the FDIC will share in losses. The estimated $24.4 billion cost would come out of the Treasury’s financial industry rescue program.2 Citigroup also announced it would extend its pause on foreclosures and create a homeowner assistance program to try to help roughly 500,000 mortgage holders avoid delinquencies.3
New wrinkle in TARP. Treasury Secretary Henry Paulson wants to shift the focus of the Troubled Asset Relief Program. The Treasury has already used about $290 billion in bailout funds to buy bank stocks and help insurer AIG. Paulson now wants to shore up consumer credit markets in the plan’s next stage. He told Bloomberg Television Thursday that Congress, not the Treasury, should aid U.S. automakers.4, 5
Checking the markets. Stocks lost ground last week, and so did oil futures, which ended the week at $57.04 a barrel on the NYMEX. Gold had its best week in eight weeks, with futures closing at $742.50 an ounce on the COMEX.6
% Change
Y-T-D
1-Year
5-Yr Avg
DJIA
-35.94
-35.74
-2.60
NASDAQ
-42.81
-42.64
-4.28
S&P 500
-40.53
-40.62
-3.37
(Source: CNNMoney.com, 11/14/08)7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Riddle of the week. My head bobs lazily in the sun. You think I’m cute, for my face is yellow. My hair is white, and my body is green. What am I?
Contact my office or see next week’s Update for the answer.
Last week’s riddle: Two incense sticks of equal length are lit at the same time. Stick #1 burns for 6 hours before it extinguishes itself. Stick #2 burns for 3 hours before it extinguishes itself. How long must stick #1 burn before it is 2x the length of stick #2?
Answer: 2 hours. At this point, 1/3 of incense stick #1 will be gone – it will be at 2/3 of its original length. After 2 hours, 2/3 of stick #2 will be gone – it will be at 1/3 of its original length. So stick #1 will be twice as long as stick #2.
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Securities offered through Pacific West Securities, Inc. Member FINRA/SIPC
These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.
Citations. 1 online.wsj.com/article/SB122666930206528165.html?mod=googlenews_wsj [11/14/08]
2 reuters.com/article/newsOne/idUSTRE4AD4RF20081114 [11/14/08]
3 marketwatch.com/news/story/citi-unveils-housing-relief-plan/story.aspx?guid={F1F514F8-AC92-4734-A62C-DD8AFDB909C0}&dist=msr_33 [11/11/08]
4 nytimes.com/2008/11/13/business/economy/13bailout.html?ref=yourmoney [11/13/08]
5 reuters.com/article/businessNews/idUSTRE4AC8LB20081113 [11/13/08]
6 reuters.com/article/usDollarRpt/idUSN1444685620081114 [11/14/08]
7 money.cnn.com/data/markets/dow/? [11/14/08]
7 money.cnn.com/data/markets/nasdaq/? [11/14/08]
7 money.cnn.com/data/markets/sandp/? [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F07&mode=add&symb=DJIA [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F03&mode=add&symb=DJIA [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F07&mode=add&symb=COMP [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F03&mode=add&symb=COMP [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F07&mode=add&symb=SPX [11/14/08]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F14%2F03&mode=add&symb=SPX [11/14/08
Securities offered through Pacific West Securities Inc., Member FINRA/SIPC
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