IBM Suspension

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The IBM Suspension for bidding on contracts has been lifted. The suspension was put in place by the EPA and has been in force for for one week.

The suspension was put in place after an EPA debarring official received information that supported allegations that IBM employees had received source selection information from an EPA employee, according to the agreement that lifted the suspension. The document was signed Thursday by Robert Meunier, the EPA debarring official, and Richard Kaplan, vice president and assistant general counsel for IBM.

As part of the agreement, IBM has agreed to suspended five employees while the investigation continues, pull out of the procurement that sparked the controversy and pay EPA’s costs involved with a protest of that contract.

IBM is cooperating with EPA’s ongoing investigation and is conducting its own internal investigation, which it has agreed to share with the agency, according to the EPA document.

IBM hasn’t commented yet on the suspension lift.

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Bernanke Says Recession Is Possible

Will there be a recession or not? That is everybody’s favorite games these days. Many people claim the country is already in a recession, others are hoping that the U.S. will somehow escape that fate. Today Fed Chairman Ben Bernanke said bluntly that their could still be a recession, despite measures to avoid it.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Bernanke said “a recession is possible” but he also said he expects more economic growth in the second half of this year and into 2009, helped by the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed’s aggressive reductions to a key interest rate.

Bernanke has been getting a lot of good press in recent months for his actions regarding the financial markets implosion. Perhaps he’s just managing expectations with the latest remarks. Investors have been relatively pessimistic with today’s trading, so it’s doubtful his comments will be taken in a positive manner.

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Google Rises On Analyst Upgrade

Google stock hasn’t been moving up too boisterously lately, but that changed today when the stock bounced over 4% based on an upgrade by a Goldman Sachs analyst who rated the company a “BUY”.

In a note to investors, Goldman analyst James Mitchell took over primary coverage for the company with a “Buy” rating, saying the company’s plans will increase traffic over time.

He believes recent decelerations in the company’s paid click growth “reflect self-inflicted changes to improve the find-to-search ratio” and said a revenue slowdown in the fourth quarter of 2007 was “partly a reversion to trend growth rates.”

Google shares had been drifting lower based on concerns the company’s Adsense program had peaked as far as revenues and profits go.

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Google Seeks To Boost Ad Revenue By Boosting Quality

Google has been making the bulk of their money from their Google Adsense program, and now the company is forced to recognize signs that the gravy train is slowing down. In an attempt to bolster their results, GOOG plans on making advertisers pay for few, but supposedly “higher quality” clicks.

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Housing Declines, But Signs Of Reaching A Bottom Loom

The housing business is still hurting bad, but there is at least one sure sign things are starting to move in a positive direction. Houses are selling again, despite being priced as much as 10% lower than last year.

The Case-Shiller index takes a look at home sales data for 20 major U.S. metropolitan areas. Their latest report shows that the value of single-family homes plummeted 10.7 percent in January of 2008 as compared to January of 2007. This iappears to be due to less action in Debt Consolidation for mortgage buyers. That is the largest decline ever in prices, during the time the index has been kept.

But, there is a glimmer of hope in such news. It means for buyers, now is the time to purchase a new home. Beleaguered buyers are now seeing very attractive prices for homes. In many markets, the foreclosure market is brisk, with bargain seekers buying bank-foreclosed homes at a rapid pace.

A bottom for the beleaguered housing sector

Interest in the foreclosure properties has experts thinking a bottom has been reached. “It’s a necessary thing,” said Joshua Shapiro, of MFR. “It’s like the mess going down in financial markets. You gotta get through it. The sooner you get through it you can look for better times.”

If interest continues in purchasing, then it’s only a matter of time until price recovers. More likely initially is the recover of sales volume based on lower pricing. When sufficient inventory changes hand, it’s possible renewed consumer confidence will help push pricing higher.

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JP Morgan Ups Bear Stearns Offer To $10 Per Share

Last week it was beginning to look like Bear Stearns (BSC) was being purchased for the rock bottom price of just under $250 million. However, a number of BSC shareholders were quite aggrieved at the thought of letting the venerable company go so cheap, despite a number of long standing operational problems. JP Morgan (JPM) today upped the offer to $10 per share in an attempt to please the angry stakeholders.

Jamie Dimon of JP Morgan spent the week listening to Bear Stearns employees, who owned up to 1/3rd of the company say they wanted more.

We believe the amended terms are fair to all sides and reflect the value and risks of the Bear Stearns franchise,” Dimon said in a statement, “and bring more certainty for our respective shareholders, clients, and the marketplace.”

The total offer is 5 times more than the previous one from last week. Whether that is enough to appease disgruntled shareholders remains to be seen.

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Oil Falls Below $100 Per Barrel

Oil has dipped below $100 per barrel on news of diminishing demand. Year over year, crude oil consumption saw a 3.2% decline. This was enough to send speculators running for the hills on an orgy of profit taking.

Demand for gasoline also fell 1% for the same period.

Refineries also seem to be cutting back output on low grade gas, indicating less comsumption again. The higher prices at the pump seem to be translating into less driving for consumers.

Seasonal fluctuations with oil and gas consumption will be on the mind of investors this week.

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Winnebago Profit Down 67% In Q2

In a sure sign the economy is tanking, Winnebago announced a 67% reduction in profits for Q2. Consumer confidence is down, so less people are buying recreational vehicles.

The Forest City-based company said Thursday it cut employment by 9 percent, or about 300 people during the quarter to bring production in line with slowing sales.

Net income was $2.5 million, or 9 cents a share, down from $7.5 million, or 24 cents a share a year ago.

Sales fell 17.5 percent to $164.2 million from $199 million for the same period a year ago.

Low consumer confidence, not to mention high gas prices, might keep the negative trend going for a quarter or two.

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Bear Stearns Sales Worries Stock Market

J.P. Morgan took over Bear Stearns in a deal that highlights just how trouble the financial sector really is. In two weeks, Bear Stearns lost over 98% of its’ market value, and JPM is picking up the pieces.

The news has hit Asian markets particularly hard. Bear Stearns serves as an example of what can, and has, gone wrong with U.S. credit markets. The deterioration has been rapid and severe.

The Federal Government fast-tracked JPM’s offer of $2 per share, or $236.2 million for Bear Stearns, in order to show the concern with which they are approaching the credit problem. They feared that a Bear Stearns bankruptcy would have severely tested the overall sentiment in the market.

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Gas Prices Are 9 Cents Higher In Past Two Weeks

People, on average, are paying 9 cents more per gallon of gas in the United States in the last two weeks.

Oil prices have shot up to as high as $106 per barrel in recent trading, and the effect is certainly trickling down to users at the pumps.

The Lundberg Survey looks at the prices at 7,000 stations in the country. According to them, gasoline costs $3.19 a gallon for regular grade gas, mid-grade was $3.31 and premium was $3.42.

Gas this year is UP 64 cents per gallon nationally over this time last year.

Of course, high fuel costs are one of the main reasons investors are so gloomy right now about national prospects for growth.

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