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Utility and Income
Utility and Income Archives


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    The more data we see, the more obvious it is that the economy hit a brick wall in October. Today’s blockbuster number was retail sales, which plunged by the largest amount on record, 2.8 percent versus 2.65 percent in November 2001. But it’s just the latest in a steady string of lousy numbers, ranging from surging unemployment to weak manufacturing.


    Your View: Money Show Q&As

    Greetings from InterShow’s 2008 Washington, DC Money Show. This year’s event comes at a pivotal time in history for investors, with the global economy sliding and a presidential election only days behind us, as well as the globe in a full-scale effort to combat credit pressures that have literally frozen lending for several weeks.


    For the first time since third quarter 2001, the US economy is shrinking. Third quarter numbers for GDP showed a 0.3 percent decline from the prior quarter. And given the recent declines in consumer confidence and consumer spending employment, it’s likely we’ll see further contraction in the fourth quarter and possibly into 2009.


    Unfreezing Earnings

    The credit crisis is easing, at least for now. After two weeks of coordinated global action to unfreeze lending markets, the key London Interbank rate is back down to roughly 3.5 percent. That’s still somewhat above normal rates but well down from the peak set earlier this month.


    The Other Banking System

    Six years ago, US power companies were on the brink. A decade of deregulation that encouraged unprecedented risk-taking had come to a crashing halt, and nearly a quarter of the industry was either in Chapter 11 or perilously close to it.


    The Great Panic of 2008

    First, let’s start with the obvious: This is unlike any market meltdown I’ve seen in my career. That includes the 1987 crash, the 1990 invasion of Kuwait by Iraq, the 1993-94 utility deregulation scare, the 1997-98 Asian Crisis and the 2000-02 Great Bear Market and utility sector collapse.


    What's Next for Wall Street?

    Poor Wall Street: No one’s job is safe as the financial sector continues to go through its most dramatic upheaval since the Great Depression. Meanwhile, the US Congress—hardly a popular institution itself—is heaping scorn on the institution’s alleged “fatcats,” as it debates measures to stanch the global financial panic. Even the Republican candidate for Vice President has put the Street on her enemies list, railing about “corruption” and “predatory practices” throughout last night’s debate.


    Few Ports in the Storm

    Congressional negotiators are back at it again, working on a plan to support the mortgage market that will win enough votes. The last attempt, of course, failed spectacularly yesterday, as House Republicans refused to offer more than a sliver of support, despite the pleas of President Bush. Democrats also walked away from the bill instead of taking all the political heat for supporting the unpopular bill.


    Think Contrary

    Good businesses are what I prefer to buy. That means stocks, bonds, preferred shares and other securities backed by healthy, growing companies, which are becoming more valuable over time.


    Betting on Recovery

    Never underestimate the small mindedness of politicians: That looks like the lesson of the week for investors. The morning after the biggest bank failure in history—Washington Mutual—Washington is still squabbling about the details of how to sort out the mortgage securities mess and unfreeze the US financial system.




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