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Weekend Reading: In a Mode

Paul Kedrosky

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

It was a decent week for the markets, which is another way of saying "at least it wasn't horrible." The S&P 500 and the Nasdaq Composite ended the week 0.3% and 0.1% higher, while the Dow lost 0.3%, aided and abetted by General Motors(GM Quote).

Looking forward to next week, oil and financials are likely to drive the action, once again. For those of you tired of thinking about crude oil prices and bank failures, this would be a good time to take a month or 12 off, because it's likely to continue in this mode for some time.

Turning to economic indicators, the big event next week will be the Fed meeting and its associated policy statement on Tuesday. Pretty much everyone thinks that the Fed will leave rates alone at 2%, even if some of us, ahem, wish rates were already trending higher.

Turning to earnings, we're two-thirds of the way through earnings season, and things aren't horrible, but aren't impressive either. This week's highlights include Cisco Systems(CSCO Quote), Procter & Gamble(PG Quote) and insurer American International Group(AIG Quote). Each of these is due to report Tuesday.

Finally, here are some articles and papers worth reading:

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• Opinion: Merrill Zigzag Makes Investors Uncomfortably Numb. (Bloomberg)
• Investment News Magazine -- Business Finance Magazine -- Business Finance. (Barrons.com)
• Shipping Costs Start to Crimp Globalization. (New York Times)
• UK businesses face biggest cash flow crisis in two decades. (Telegraph)
• Questions for T. Boone Pickens. (New York Times)
• FRB: FEDS Abstract 2008-34: Does Distance Matter in Banking? (Federal Reserve Board)
• Roads, airports on the block as budgets tighten. (Reuters)
• Small Florida bank is 8th U.S. failure this year. (Reuters)
• Other sectors may start playing catch-up, adding to job losses. (The Wall Street Journal)
• Peter Bernstein argues that saving homeowners is the only path of stopping current decline. (New York Times)
• Wave Goodbye to the Invisible Hand. (The Washington Post)
• What the yield curve is telling us now. (Bloomberg)
• Offshore drilling is political canard. (Bloomberg)
• 80 Year History: Earnings Yield vs. Interest Rates. (QVM Group)
• Watching the Growth of Wal-Mart Across America. (FlowingData)
• Amusing purported debunking of peak oil. (PeakOilDebunked)
• Barton Biggs predicting a big snap-back rally. (The Globe & Mail)
• Real Effects of the Subprime Mortgage Crisis: Is It a Demand or a Finance Shock? (NBER)
• Housing Wealth Isn't Wealth. (NBER)
• Time magazine cover profile names economy as job No. 1. (Time)
• Many top hedge fund managers are having a terrible year. (New York Post)
• Nice profile of Nassim "Black Swan" Nicholas Taleb. (Times Online)

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