Tuesday, September 04, 2007

Market Update

The pain from higher borrowing costs may be spreading as consumers and businesses follow investors in shying away from risk, increasing the odds of a recession.

``While there is no basis for predicting a recession right now, the risks have surely gone up,'' says former Treasury Secretary Lawrence Summers, now a professor at Harvard University in Cambridge, Massachusetts. ``The combination of softness in the housing sector, contractions in credit, increased uncertainty and volatility, and losses in wealth make the chances significantly greater now.'' Bloomberg

As Wall Street lowers economic forecasts and increases the odds of a recession the markets are jittery this morning. Its all about adding 2 plus 2. The market is in trouble, home equity is decreasing and consumers are no longer able to use their homes as an ATM. The net effect will be seen in consumer spending which will drop of significantly. A recession in the US will be felt across the globe since we are the worlds biggest consumer. We decrease our buying of Chinese imports which in turn leads to a recession in China as layoffs there increase due to lower demand for their goods. The effect will be like a domino as it spreads all over the globe. I am not suggesting this will happen but, thiere is a strong possibility.

This morning, tech is looking very strong with solid gains in AAPL GOOG SNDK GRMN AMZN . Other stocks making big moves include LLNW JADE BBND RACK KALU SPWR FSLR TNH NFLX VDSI BCSI CREE LEAP HOKU LOCM ASTSF.

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