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The
Markets
The stock market suffered a setback this
week as the true state of the U.S. economy came into question
after a mixed bag of earnings, further housing woes, and
credit concerns.
U.S. stocks tanked Friday - the 20th anniversary
of Black Monday - as panicky investors opted to sell after
disappointing
earnings from blue chips Honeywell International Inc.,
3M Co. and Caterpillar Inc., along with crude oil's seemingly
incessant rise, fueled worries of economic trouble ahead.
The Dow Jones Industrial Average (DJI)
dropped 369.1 points, or 2.7%, to stand at 13,519.8, giving
it a weekly fallback
of 4.1% and capping a five- session string of losses. All 30
of the Dow's 30 components closed in the red, with shares
of 3M (MMM) among the hardest hit
-- down
8.6%.
Gold continued its upward path as the USD
hit a record low against the euro over concerns of a troubled
economy.
Other safe havens like treasuries had great weeks as
the yield on the 10-year reached its lowest level in 5 weeks.
Crude oil reached on all-time high as Turkey threatened
military action against Kurdish rebels located in northern
Iraq. Next week, housing data and earnings will take
center
stage as investors begin to discount the economic picture.
| Returns through 10/19/07 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
-4.1 |
8.5 |
12.7 |
11.0 |
9.6 |
5.5 |
| Nasdaq Composite |
-2.9 |
12.8 |
16.4 |
12.3 |
15.8 |
4.9 |
| Standard & Poor's 500 |
-3.9 |
5.8 |
9.7 |
10.8 |
10.8 |
4.6 |
Source: Yahoo! Finance, Barrons
Past performance is no guarantee of future results. Indices
are unmanaged and cannot be invested into directly. Three-,
5-, and 10-year returns are annualized. Assumes dividends
are not reinvested.
Top Headlines:
- The Consumer
Price Index gained 0.3% in
the month of September, led by higher food and energy prices.
Core inflation rose by a slower than expected 0.2% for
the month, giving more credence to the possibility of a
Fed rate cut. (10/17)
- Leading
Indicators rose by 0.3% for the month of September,
with seven of the ten leading indicators seeing an
increase. This month's increase has continued the indicator's
volatile
trend, as the August number was revised to a decrease
of 0.8%. (10/18)
- Banking
giants Bank of America (BAC), J.P. Morgan (JPM)
and Citigroup (C) announced that they have agreed
to create a joint fund to ensure liquidity in the commercial-paper
markets. Over the past few months the commercial-paper
markets have been in a crunch, seeing the amount
outstanding
asset-backed commercial paper fall by nearly 24%.
While no specifics about the fund have been confirmed,
many
are speculating that it could be valued at nearly
$100 bln. (10/15)
Earnings Snapshot:
- Citigroup (C) shook the street this week as the banking
giant reported a 57% decline in 3Q income from
a year ago. The company cites the current credit market
conditions
for their poor performance. (10/15)
- Yahoo (YHOO) surprised investors this week as they beat
estimates. The online retailer expects to further
profitability in the coming quarters as they complete many
growth initiatives.
(10/16)
- eBay (EBAY) reported a 30% increase in 3Q revenue this
week. The retailer saw improvements in marketplace
listings, PayPal payments and international operations.
(10/17)
- Bank
of America (BAC) struggled this week as the bank
reported a 32% decline in 3Q net income. The
corporation credits deteriorating credit market conditions
for the
substantial losses seen in investment banking
operations. (10/18)
- Google (GOOG) continued their dominance over the tech
sector this week as the internet giant reported a 57%
increase in 3Q revenue. Share prices soared to new highs
on the announcement late Thursday afternoon. (10/18)
 You Too, Can Be A Micro-Financier!
If you think twenty-five dollars is not enough to fight poverty,
think again. Dr. Muhammad Yunus, a Bangladeshi banker
and economist, won the Nobel Peace Prize last year for his
efforts to promote
economic and social development in poor countries by extending
small loans to people who were too poor to qualify for
traditional bank loans. Now you can help, too.
You may not
win a Nobel Prize, but your loan—an amount
that you might spend taking grandchildren to the movies—could
help to open a bakery in Afghanistan, establish a clothing
store in Ecuador, or set up a public pay phone in Uganda.
Imagine it. By lending twenty-five or fifty dollars, you
can make a difference in the world, and earn a reasonable
rate of return.
So, how on earth do you find an entrepreneur
in a poor country who won’t disappear with your money?
It’s easier
than you might think. All you have to do is sit down at your
computer and visit www.Kiva.org.
Kiva has formed partnerships with existing micro-finance
institutions in impoverished
communities around the world. These partners evaluate loan
requests and select qualified borrowers. The borrowers’ names,
photos, loan proposals, and credit histories can be found
online. Once you log in, you can review the candidates and
decide who will receive the money you want to lend.
EAT LOCAL!
Did you know the average ingredient on a Midwestern dinner
table travels about 1,500 miles?
(Source: Iowa State University,
Leopold Center for Sustainable Agriculture, Checking the Food
Odometer, July 2003)
You may not have realized
it, but if you’ve been enjoying
summer tomatoes and fresh produce from the farmer’s
market or from your garden, you’re participating in
the newest food trend—eating local. If you become
a devotee of eating food that is grown or raised close
to home,
you may qualify for the title of Locavore.
There are all kinds of Locavores. The very strict are
committed to a 100-mile diet. That means they eat food
that is grown
no more than 100 miles from where they live. This can
be tricky, especially if you live in an area that has
a long
winter season. It may require an ability to can fresh
food and grind your own flour.
If you’re not ready to give up things that aren’t
produced near where you live—salt, olive oil, chocolate,
rice, pasta, spices, coffee, and other essentials—you
may prefer the more lenient approach of wild Locavores. They
primarily eat locally produced food, but allow themselves
to indulge in some items that are brought from far away.
Why limit yourself to eating locally?
The reasons for eating local are as varied as the people
who choose to do it. The following are some of the most
commonly cited reasons for eating local.
- Tastes
good. Local produce is usually ripe, freshly picked, and bursting
with flavor. Generally, locally produced food is bred
for taste, rather than to withstand long distance travel
or
industrial harvesting.
- May reduce tax spending. According
to the Texas Department of Transportation, each heavy goods
vehicle (such as an 18-wheeler) causes
the same
amount of wear and tear on roads as 9,600 cars. Our tax
dollars are used to build and repair roads.
- Builds a
sense of community. Studies
have found that farmers’ markets produce
more than fresh food. They also produce nearly 10 times
as
many conversations between shoppers and sellers as a trip to a
supermarket or superstore. Participating in a community
garden can also build a sense of place and belonging.
- May help the planet. Food
supply systems in industrialized countries are some of
the biggest consumers of fossil fuels and producers
of greenhouse gases. Ironically, its product is at risk from
global warming (that may be caused by greenhouse gases)
which disrupts the predictable weather patterns on which agriculture
depends.
Learn more!
If you would like to learn more, there are many books available.
Some chronicle Locavores experiences with trying to eat
local—a challenging feat for most; while others discuss
what eating local means to the author and the world. You
could try:
- Animal, Vegetable, Miracle: A Year of Food Life by Barbara Kingsolver
- The Omnivore's Dilemma: A Natural
History of Four Meals by Michael Pollan
- Coming Home to Eat:
The Pleasures and Politics of Local Foods by Gary Paul
Nabhan.
Happy reading!
Best Regards,
P.S. Please feel free to forward
this newsletter to family, friends, or colleagues.
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