There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
- The Dow Jones Industrial Average opened the week at 8438 and, on Monday, jumped 91 points.
- On Tuesday, the Dow Jones Industrial Average fell 82 points.
- On Wednesday, the Dow Jones Industrial Average rose 57 points.
- On Thursday, the Dow Jones Industrial Average plunged 214 points and closed the week at 8290.
- On Friday, the markets were closed in celebration of the July 4th holiday.
- In June, 467,000 more people lost their jobs. The national unemployment rate now stands at 9.5%.
- Deere & Co, the farm machinery manufacturer, announced that approximately 800 salaried employees were leaving the company under a voluntary separation plan.
- USA Today reports that business bankruptcies are up 240% since 2006. Small businesses are being particularly hit hard.
- Crabtree & Evelyn, the soap and lotion seller, filed for bankruptcy protection.
- Bernard Madoff, the man behind the largest Ponzi scheme ever, was sentenced to 150 years in prison.
- Federal authorities are reportedly continuing to investigate the involvement of others in the giant Madoff scam and additional indictments may be forthcoming.
- A Texas judge ordered that Allen Stanford, another accused Ponzi scheme operator, be held in jail, without bail, while he awaits trial.
- The demand for legal services was 6.6% lower in the fourth quarter of 2008 than it had been in the fourth quarter of 2007.
- California Governor Arnold Schwarzenegger announced that he was shutting down government offices for the first three Fridays of every month in an effort to deal with California’s budget crisis. The shutdowns start on July 10th.
- Fannie Mae has reported a large increase in the number of mortgages that are past due. On Monday, it reported that 3.42% of its mortgages were 90 days or more delinquent in April up from 3.15% a month earlier.
- Freddie Mac received another $6.1 billion from the U.S. Treasury to help cover rising liabilities.
- State banking regulators closed six banks in Illinois and one bank in Texas. This brings the total number of banks closed this year to 52.
- California’s finances have gotten so bad that the state has issued millions of dollars of interest-bearing IOUs to pay some of its debts. The state will be forced to issue billions of dollars of additional IOUs in the near future if it can’t reach some sort of compromise on its financial woes. This action spells hardship for many of the recipients of the IOUs who need cash to pay their debts now not promises of payment in the future.
- Even if the economy does begin to recover later this year as predicted by some so-called experts, the recovery is likely to be long and slow. With so many people unemployed and others living more frugal lifestyles, consumer spending is likely to remain weak. Consumer spending is important because it makes up 70% of economic activity.
- Weak consumer spending continues to haunt most retailers. While retailers have tried to offset weak demand by offering deep discounts on their wares, experts wonder how long they can operate under this business model and fear that many will be forced to close their doors.
- The International Air Transport Association reported that airlines lost over $3 billion in the first three months of 2009.
- The World Bank recently reported that most of the world’s economies were mired in a deep slump and forecasted a contraction in the global economy.
- The British economy is one of many other economies suffering as much as the U.S. economy. In the first quarter of 2009, it contracted by the most in 50 years.
- Lloyds Banking Group, Britain’s largest mortgage lender, just eliminated 2,100 jobs.
- To date, more than 55,000 banking jobs in the U.K. have been eliminated and more job cuts are expected.
Page Perry’s Market Monitor is published periodically to give investors an overview of certain recent developments impacting the economy and/or the investment markets.