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 9605 and, on Monday, moved up 22 points.
- On Tuesday, the Dow Jones Industrial Average rose 57 points.
- On Wednesday, the Dow Jones Industrial Average soared 108 points.
- On Thursday, the Dow Jones Industrial Average dropped 8 points.
- On Friday, the Dow Jones Industrial Average rebounded 36 points and closed the week at 9820.
- Unemployment continues to remain one of the biggest barriers to a vibrant economic recovery. Unemployment rose in 27 states in August. The unemployment rate has reached record levels in California and Nevada.
- Drug maker Eli Lilly recently announced that it would eliminate 5,500 jobs over the next two years. The job cuts will reduce Eli Lilly’s work force by approximately 14%.
- Opel, formerly General Motors’ European division, has announced that it may eliminate as many as 10,500 jobs across Europe.
- Blockbuster announced that it may close more than 900 stores.
- The International Air Transport Association says that the global airline industry is expected to lose $11 billion this year and is unlikely to return to profitability until at least 2011.
- The delinquency rates on commercial loans have more than doubled in the last twelve months to approximately 7%. Bank regulators are reportedly keeping a close watch on the impact that these delinquencies are having on small and mid-sized banks.
- CNBC recently reported that four out of five Americans surveyed believe that securities regulators have too close a relationship with Wall Street firms.
- Following warnings from various securities regulators, investors have pulled $2.1 billion out of leveraged and inverse exchange traded funds over the past two months. The SEC, the North American Securities Administrators Association and the Financial Industry Regulatory Authority have all issued warnings about these investments.
- The Federal Deposit Insurance Corporation has begun selling some of the toxic assets it has acquired. Its has sold a 50% interest in a new company holding $1.3 billion of toxic mortgages. The sales price was $64.2 million or around ten cents on the dollar.
- Severe problems in the commercial real estate market are causing tax revenues to sharply decline putting greater pressure on local governments. Further cuts in government services are likely.
- In a recent survey 3 out of 4 Americans said that they had cut spending in the past year.
- The government reports that 1.4 million people have taken advantage of the $8,000 home-buyer tax credit. The deadline for first-time home-buyers to take advantage of this program is November 30th.
- Housing construction has hit its highest level since last November.
- UBS has apparently notified some of its clients that their undeclared income in Switzerland may be turned over to U.S tax authorities.
- Citigroup has announced its intention to dispose of its 49% interest in the Morgan Stanley Smith Barney joint venture.
- On Friday, the government’s emergency program to guarantee money market mutual funds was allowed to expire.
- According to the Charlotte Observer, the FBI and the Department of Justice are conducting a criminal investigation into Bank of America’s purchase of Merrill Lynch.
- Lawrence Summers, director of Obama’s National Economic Council, says that troubled firms should be allowed to fail.
- The total number of bank failures in the U.S. this year has reached 94.
- The Federal Deposit Insurance Corporation is considering borrowing from the U.S. Treasury to replenish dwindling reserves. The FDIC’s reserves are at the lowest level since 1992.
- Since 2000, the incomes of people over 54 have risen while the incomes of people 54 and younger have fallen.
- Federal Reserve Chairman Ben Bernanke claimed that the recession is probably over even though unemployment problems will persist. Is this just trying to put “lipstick on the pig?”
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.