Weekend Reading

Good Sunday morning, and welcome to Weekend Reading. As always, here are some articles and papers worth reading. First, however, a look back at the week that just finished, and a look forward to the holiday-shortened week ahead.

The major U.S. indices had a mixed week. The Dow and the S&P 500 ended the week down 0.2% and 0.4%, respectively, while the tech-heavy Nasdaq ended the week up 0.8%. For the month of August, the Dow Jones and S&P 500 ended up 1.1% percent and 1.3%, respectively. The Nasdaq gained 2% on the month.

Subprime issues will remain front and center, but it is going to take something truly unexpected to knock investors off their perch. Most professionals are already looking well past the subprime crisis to a rate-cutting environment over the next twelve months, one where growth is by no means assured but is a far better bet than stagflation. Some investors have begun picking away fitfully at some of the more beaten-up financials.

Turning to economic indicators, it will be a typically busy week. On Tuesday and Wednesday we will see car and truck sales, and also on Wednesday we will see the Fed's Beige Book of economic indicators. But the highlight of the week will be the August employment report, scheduled for release Friday.

As for earnings, companies reporting next week include Sycamore Networks and J. Crew.

Finally, here are some articles, papers, and books worth reading:

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• U.S. at risk of recession, says economist Martin Feldstein. (Reuters)
• How the mortgage crisis is slaying an entire town. (The New York Times)
• Hurricane Felix strengthens, but not set to affect Gulf oil production. (Reuters)
• Catastrophe bonds returned 3.4% since May 31. (Bloomberg)
• Fidelity's silence on its future can't continue much longer. (Fortune)
• Google supposedly set to announce "Gphone" next week. (Times)
• BlackRock's Finks says rate cuts would be "foolish." (Fortune)
• iPhone clones are rapidly surpassing the original. (EE Times)
• FTC says market factors explained '06 gas price spurt. (Oil & Gas Journal)
• Barron's launches its 400 index and picks tech and Japan as safe havens. (Barron's)
• Research: Good paper on flight-to-quality episodes in equity and debt markets. (MIT)
• The most popular CFO magazine articles you missed while away this summer. (CFO)
• Valuable economic data showing up increasingly on the Web. (San Francisco Chronicle)
• U.S. gasoline inventories have touched lowest levels ever recorded. (EIA)
• Ron "Veg-O-Matic" Popeil's best sale may have been his own company. (Forbes)
• The bear case on Google. (The Economist)
• Marge Simpson makes another Google bear case. (YouTube)
• Pine beetles have wiped out a swath of Canadian forest the size of Sweden. (Globe and Mail)
• There's life in biotech stocks, even if they have had a horrible summer. (Telegraph)
• Research: A nonparametric model for forecasting Venezuelan oil prices. (arxiv)
• Research: Housing and the monetary transmission mechanism. (FRB)
• Research: Securitization as the tool of financial transformation. (SSRN)
• Research: A unified theory of ten financial markets puzzles. (SSRN)