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Weekend Reading: Banks See Red

Paul Kedrosky

Good Sunday, and welcome to another edition of Weekend Reading. First, a look back at the week that just finished, then a look forward to the week ahead, and then a summary of some articles and papers worth reading.

It was another wild week for U.S. markets, and the major indices finished lower, with most of the damage done by General Electric'sGE lousy results on Friday. The Dow and the S&P 500 ended down 2.3% and 2.8%, respectively, while the Nasdaq lost 3.4%.

Next week should be far from boring, even if market volatility is settling down a little. Investors will focus primarily on the slew of banks that are planning to report earnings. They're expected to be lousy all around, but if they're less lousy than the consensus, then, of course, things will be all sunshine and roses. Among the big names reporting are JPMorgan ChaseJPM, Merrill LynchMER and CitigroupC.

Also next week, GoogleGOOG plans to report earnings, and although they are likely to have less of an impact on the broad market than they might have four or five months ago, they're still likely to be a) crummy, and b) bad for tech.

Turning to economic indicators, it should be a busy week. The highlights will be the producer price index and its consumer counterpart, scheduled for Tuesday and Wednesday, respectively.

Finally, here are some articles and papers worth reading:

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• The commodities boom means giant tires are crazy scarce. (BusinessWeek)
• High oil prices have California experiencing a mini oil boom. (San Francisco Chronicle)
• Wide variations in productivity across OECD countries. (OECD)
• Microsoft'sMSFT Windows is 'collapsing,' Gartner analysts warn. (Computerworld)
• John Paulson tops hedge fund earnings in 2007 with $3 billion. (New York Post)
• Many continue to blame high commodity prices on Wall Street. (Reuters)
• Will bank earnings be bad ... or less-than-bad? (Reuters)
• Auction-rate securities market shrinks with failure rate of 71%. (Bloomberg)
• Among Greenspan critics, one voice stands out. (Globe and Mail)
• George Soros is back to playing gloomy financial prophet again. (The New York Times)
• Lehman BrothersLEH is trying a new gambit to secure financial assistance from the Fed. (New York Post)
• Credit card process is creating a new airline cash challenge. (San Francisco Chronicle)
• Tomorrow's emerging markets: Africa and the Middle East. (The Washington Post)
• Central bank communication and monetary policy. (NBER)
• NAND prices up but oversupply rules. (EE Times)
• Ben Bernanke lays blame for credit crunch squarely on ratings agencies. (Times of London)
• Barron's picks Applied MaterialsAMAT and has good Jim Rogers interview. (Barron's)
• The consumer spending mirage. (BusinessWeek)
• Michael Lewis on the rise and rise of analyst Meredith Whitney. (Bloomberg)
• Weekend G-7 meeting was full of negative sentiment from bankers. (Bloomberg)
• Callable notes next credit market to turn south. (Bloomberg)

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting