b2 gurus | business news

Wow, after watching the olympic ceremony yesterday, I have to admit that it was spectacular. An awe-inspiring show that was truly worth its millions. Anyways, would this and any Olympics affect global finance in any way? Of course, China spent a total of about $43 billion in preparations including city projects, and it is expecting billions and billions in television contracts and advertisement deals. China is also forecasting their economy to be stabalizing around 10.6% growth during the third quarter, up 0.5% from the previous one. However, after doing some reading and watching some videos, I actually found out that their economy is aiming to be growing in high single digits, after balancing economic factors such as inflation and internal demand. Although spending is booming globally during this time, traders will probably be too busy watching the games to be moving the markets *chuckle.

Well, now, lets move back to domestic issues. Fannie Mae posted a 2.3 billion dollar loss today, three times larger than expected. Again, another downward spiral will go on in the mortgage industry. Rates are destined to increase, credit will as as tight as ever, refinancing homes will probably be impossible, and forclosures will increase. Well, it seems that no government home financing plan will go underway until Bush comes back from the games, but this mess will probably be left to Obama or McCain to sort out, along with health care, foreign policy, and trade agreements such as NAFTA. The closing games and its aftermath will have massive significance and symbolic meaning for future policies in finance and politics.

Lastly, some positive news, oil is down to $115 a barrel, due to deflating commodities, assumed lower demand for oil, and a rising U.S. dollar. So, to close off, I hope Beijing has a happy and safe Olympic Games for the next two weeks, until the 24th, while the whole world watches and anticipates the end of China’s humiliating 100 years, and a brand new beginning towards the future.

Signing out

-ZEZ

P.S. If you have some extra time on your hands, here is this week’s video on global finance, it is a bit long, but none-the-less insightful.

http://www.cnbc.com//id/15840232?video=817573399&play=1

This week, as rain pours over Ontario, more wealth drains out of North America. The housing industry continues to drop, but it seems the rate is finally slowing down. Wachovia, SunTrust and three other banks reported a combined loss of over 11 billion, while their shares rose in value by about 11 billion. It seems, that expectations were so low, that the losses were better than what analysts saw coming. This, in turn, fueled the blind increases in their stock.

The only good news came out of tech stocks, as Apple, and Amazon posted amazing results. Speaking of Apple, there was some news regarding the health of Steve Jobs, but it seems that it has all cleared away. With oil finally falling, and a slight hint of consumer spending with box-office hits, the skies look good for next month. Oil has been hovering around $124 a barrel this week, about $20 lower than previous prices. A major contributor to this is due to the fact that global demand for oil has finally dried up. Another concern is the amount of regulation in the field of derivatives. Tougher regulations in options and futures trading could prevent or lessen future economic blow-ups like these, especially with something so fragile as oil and energy. None-the-less, the month of August has lots of sunshine on the forecast, and global expectations are high. I can’t wait to see what August brings.

Signing out,

ZEZ

Hello fellow readers, I would like to apologize again for not keeping a consistent weekly newsletter for the last while. Quite a few interesting events happened last week, especially on Friday, relating to the financial markets, technology markets as well as my own internet market failure… thanks to Rogers Communications.

Moving on, so, in the financial markets, the two largest mortgage companies were slashed almost in half, on Friday. Fears of major losses in mortgages drove away investors by the flocks. Estimates of losses rose to nearly $30 billion for these each of these two mortgage companies. Together, FreddyMac and FannieMae hold about $5 trillions worth and guarantees of mortgages. If they collapse, then we would be in major economic turmoil….

Depression *gulp*

!930s *tears*

Well, everyone knew this was coming, ever since the fall of Bear Stearns. Yep, Buffett was right about that long and painful recession. The Fed is again stepping in and preparing a backup plan, a.k.a., a buy-out. Tax-payer dollars are at rick, yet again, and the role of government in market economies is at question. In Canada, this sounds all too similar, with auto-companies, and the application of band-aid packages. Also, recently, GM announced more slashed, this time, in marketing and engineering. Wow, the two backbones of survival are being cut-off, maybe its the executives that need to be slashed. Say goodbye to innovation and next-gen designs from GM forever. It looks like governments are always wasting tax-dollars to fund bad business decisions. I think Canada tried to avoid loss of jobs and excessive strains on unemployment insurance, so they kept GM afloat, but now, nothing can prevent them from leaving.

Derivatives, and speculation are also at blame and I believe the Fed is also trying to regulate the shorting of Fannie and Freddy, to prevent huge sell-offs in the future. Many say the process of shorting even played a role in 1929, so markets learn from their bruises. Lastly, in the tech sector, Apple is expecting a billion dollar weekend from the release of the iphone, RIM missed expectations while Intel shined from foreign streams of revenue. Speaking of the iphone, Ram actually got one, so hopefully he will be able to write a product review soon, but apparently, his plan has enormous costs. Thanks to Rogers yet again, high phone plans and faulty internet services.

Signing out,

ZEZ

Hello World!,    I am hoping many of you will read this Tuesday morning when you all check your emails. First off I hope it is not too late to apologize for not posting last week. I was down in Atlanta along with my friend Ram at Deca Internationals. It was a fun and educating experience and I look forward to it next year. Anyways a recap at last week. Tech stocks are moving yet again and P/Es are somewhat coming back down though some good numbers were released from Google. There are predictions that the US economy will start rolling again. Also, big news, Microsoft walks away from Yahoo, (or was it Yahoo that rejected MSFT?), *SLAP….

First off, the yahoo-microsoft deal was pretty interesting. Mr. Yang asks for about 37$ a share, Mr. Ballmer says no, 33$, I can imagine that conversation going back and forth LOL. How come, they couldn’t agree at $35?  Well, Yahoo stock is still drifting pretty high. I suspect shareholders believe the deal might come back if Yahoo begins struggling again. I think Yahoo has a long way to go from its pre-deal price of 19$ a share to where Mr. Yang wants to go. But then again, who knows what Mr. Yang has up in his sleeves, … headlines, “The return of YANG’s YAHOO!” or  is there another deal going on? with AOL? Google even? Imagine the headlines that day; “Google and Yahoo team up to become GOoHOO! !!!, but would the federal board allow such a monopolistic deal? Probably NOT, or the merger could take a longggg time like Serius and XM radio which has many lawmakers up in arms.

Lastly, the stock I am going to follow this week, actually make that two, are going to be Pinnacle airlines and Apollo investment group. Theres been a lot of news about Pinnacle and its incredible cash flows, but a pilot picket strike seems to provide short term downfalls. I think the price will keep dropping, perhaps to a p/e of even in the 1.0 range. Apollo investment has also been steadily going up, and I have been following it for a few weeks, its also in our finance section. It has a crazy good dividend, and low P/E but something must be going wrong in the company for it to be downgraded a few weeks back. I hope they solve their issues, whether they be management, and I hope they improve on their ultra low earnings report last quarter. Well, their next earnings is in June, and I hope they have some good numbers, and enough cash to pay out those amazing dividends.

Anyways, I am going back to doing what normal kids do… ENGLISH homework :’(

To a rising economy

Zan Zhang is Logging out

Hey Guys,

I wanted to let everyone know that the b2logs team was competing in the International Career Development Conference in Atlanta, Georgia. I was specifically competing in the Business Services Marketing category representing the province of Ontario.

Overall, I didn’t do so well, but I will definitely succeed next year.

For our weekly financial newsletter, we will be releasing a post this weekend. In the mean time, enjoy this video interview from the Oracle himself on his thoughts about various business issues.

Cheers,

Ram Sharma