News


The SPY was finally a little weaker this week, as the range moved down slightly, starting the week at 94, moving down to 91, and closing at 92. This coming week, the levels I will look at are 93 as resistance, and 90 as support.

Some of this week’s links:

An interesting look at the possible moves the Fed will make in the upcoming months. Really good read, this could give you some insight on possible scenarios that could play out.

A clip from 1994 regarding the Internet. It’s funny to hear how it was regarded just 15 years ago. We’ve come a long way in a pretty short period of time.

An interesting article on Bill Gross in the NY Times. I’ve got to side with Barry Ritholtz on this one. I think Bill Gross has had an agenda for too long, and every time he talks you have to wonder what his real motive is.

Goldman Sachs is on track for record bonuses this year. Probably one of the most ridiculous things I’ve read in a while. Nine months ago the company effectively bailed out Goldman by bailing out AIG, and now the company is paying record bonuses? This is absurd.

A little alphabet soup accounting. The Fed is taking on an awful lot of obligations.

Sony is set to unveil is new eBook reader this week. Apparently Sony, along with some big time publishing houses, is hoping the eBook will do for digital books what the Ipod did for digital music. Sony is even adopting the business model of the iTunes store, where digital books will be available for download and can be uploaded onto the eBook.

This is a great idea. Too bad it will fail in its current form. Apparently some smaller competitors will be coming out with readers that will be as flexible as magazines within the next two years. Now that will be nice. That’s what I see as being the single biggest problem with the eBook right now. First off, having an eBook would add to an arsenal of an digital music player, cell phone, possibly a PDA, and sometimes maybe even a camera. I would love to get a device that integrates all of these and doesn’t take up much pocket space.

Secondly, not as many people like to read as people that like to listen to music. Although it could help sales, I don’t see it the same way. I would be interested in seeing what Apple will introduce to counter this in their next Ipods.

I would love an eBook reader where I could download not only blogs that I read, but PDF files, text files, and books so that I can get some reading done when i’m not in front of the computer. But I would also rather read them on something that doesn’t feel like a computer.

I’m glad to at least see Sony taking a step in the right direction. I’ve always hated how Sony products only integrate with Sony technology. The Sony reader will be able to read PDF’s from my understanding, which is a great start. Hopefully they’ll be able to make the reader even more user friendly in future editions.

 

I have been reading some articles lately which have brought alot of concern to myself. I was always a believer that US economy is and would in my lifetime be the strongest economy in the world. But to be honest, after seeing the movie Syriana, I don’t think so anymore. Don’t get me wrong, I will always be pro-US, but right now I’m in a situation where I have doubts.

My first concern, is from what I have read of the oil producing nations’ wanting to receive gold and euros instead of US dollars. This shows that they are beginning to lose faith in the dollar. And rightfully so. Given the data that was released yesterday, it appears that the Fed will do whatever it can to keep the country from entering into a recession. Even if it means printing money.

So if the government were to continue printing money, what would happen? The dollar would fall against every currency in the world. People would rather have money in other hard currencies, thus increasing the rate of return on US bonds to make them attractive. There would be economic chaos, and fortunes could technically be lost or made overnight. Even more importantly, the US T-bill, often considered the safest investment in the world, would no longer be it. The economic world would be turned on its head. I would think the British Pound or the Euro would take over, I’m really not sure.

My biggest concern is how I would keep and possibly grow that money. I am thinking precious metals to be the best route. Gold, silver, and platinum. Other currencies would carry the same risks as the US, since every central bank can choose to produce more money. My next question is, if a recession were to occur, how soon would it happen? 3 months? 3 years? 10 years?

I’m going to have to be prepared with a plan for when this happens. I know what I pointed out was the worst case scenario. But nonetheless, even a much less extreme version would cause money to be lost. And for that, we should all be ready.