Good Sunday, and welcome to another edition of Weekend Reading. First a look back at the week that just finished, followed by a look forward to the week ahead, and finally a list of articles andpapers worth reading.

One word describes the week that just finished: crummy. As a matter of fact, it was the worst first three trading days of the year on the Dow since 1932, during the Great Depression. The Dow fell 4.2%, the S&P 500 lost 4.5%and the Nasdaq Composite fell a whopping 6.4%.

A number of things came together to make last week as bad as it was. First, a weaker-than-expected U.S. employment report -- the worst since 2003 -- raised recessionary fears. Granted, recessionary worries have been with us for a while, but now they're at a high level. Many people think we're already in a recession and that the economy won't come out of it until the second half of the year.

Meanwhile, technology stocks took it on the chin last week. With growth stocks having outperformed value stocks, there had been a real shift in investor assets into technology, which is always anervous place to be. It didn't take much to make those new growth-seeking investors skittish: An analyst at a major brokerage firm downgraded Intel ( INTC) (a growingfavorite among many growth investors).

We likely will see considerable churning in the week ahead, but it won't take much to drive markets lower. Investors are nervous that a recession looms and that their favored sector -- technology/growth -- is going to be hurt much more than they thought. While news from the big Consumer Electronics Show in Las Vegas could help make them feel better, it won't be an easy ridefor stocks next week.

It will be a fairly quiet week for earnings. There are, however, two reporting companies worth watching: KB Home ( KBH) on Tuesday, and Alcoa ( AA) on Wednesday. The former, in particular, will be heavily followed, especially the earnings conference call.

It also will be a fairly quiet week for economic news. There will be the weekly retail sales reports on Tuesday and the international trade report for November on Friday.

Finally, here are some articles and papers worth reading:

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  • Barron's picks out-of-favor stocks, and pans industrial andmaterials sectors. ( Barron's)
  • Byron Wien's top 10 surprises for 2008. ( BusinessWire)
  • 130/30 hedge strategies are making life tougher for some managers. (The Economist)
  • Skeptics abound about the XBRL financial data reporting standard.(CFO.com)
  • Busted Imperium IPO lowers likelihood of alt-energy bubble. ( VCRatings)
  • Bill Miller's Legg Mason Value Trust fund hopped on homebuilders and has trailed the S&P 500 for second consecutive year. ( Boston Globe/Bloomberg)
  • Interesting profile of NeuStar (NSR), the litttle-known company thatruns the North American phone numbering plan. ( The New YorkTimes)
  • Data breaches and thefts are on the rise, and wireless networks are part of the problem. ( washingtonpost.com/AP)
  • New class-action suit charges Apple (AAPL) with music monopoly ( InfoWorld)
  • This Week In Petroleum. ( EIA)
  • Who posted that $100 crude oil trade last week anyway? ( New YorkPost)
  • Despite oil being at $100, Venezuela's Hugo Chavez faces anindustry slump. ( Reuters)
  • U.S. video game industry growth seen slowing. ( Reuters)
  • U.S. may avoid recession, but the prospects are dwindling. ( Reuters)
  • Some think worries about last week's unemployment report are overdone. (The New YorkTimes)
  • Fed ups auction amounts to aid banks. ( AP)
  • New study suggests lengthy U.S. home price decline. ( Reuters)
  • San Diego County is going from residential to commercial real estate bust. ( SanDiego Union-Tribune)
  • Chinese sovereign wealth fund wants to hire Alan Greenspan. ( Fortune)
  • Are sovereign wealth funds smart, or just cash-stuffed? ( Bloomberg)
  • New year brings another false dawn for U.S. housing. ( Bloomberg)
  • Chinese telecom firm Huawei is big, getting bigger and focused on U.S. market. ( washingtonpost.com)
  • Why did the August 2007 hedge fund losses happen, and what do they say about the industry? ( CFO.com)
  • About 300 companies appearing at next week's big JPMorgan SanFrancisco biotech conference. ( San FranciscoChronicle)
  • Books: New book on Americans' love affair with their homesgetting good press. ( BostonGlobe / Amazon)
  • Books: New book on pre-currency America is getting positive comments. (The New York Times / Amazon
  • Department stores are newly in vogue around the world. ( Telegraph)
  • Investors sticking with growth stocks, even in the current slowdown. (The New York Times)
  • Digital video surveillance growth is set to drive big take-up in storage products. ( Byteand Switch)
  • Research: Good-looking people find it easier to get loans. ( SSRN)
  • Some cities are holding lenders accountable for blighted, abandoned homes. ( BusinessWeek)
  • Citadel hedge fund looks increasingly like it will go public. (BusinessWeek)
  • Some sources for tracking news from this week's big ConsumerElectronics Show in Las Vegas. ( iGreed)

RealMoney Barometer Poll
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?
3 Which of these sectors do you think is set to move down in the coming week?

View the results without voting

At time of publication, Kedrosky had no positions in stocks mentioned, although holdings can change at any time.

Dr. Paul Kedrosky is a former highly ranked sell-side technology equity analyst, and he currently runs a technology finance institute at the University of California, San Diego. He is also a venture partner with Ventures West, an institutional venture capital firm with more than $400 million under management. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Kedrosky cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.

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