Dow Craters 300 Points - To Low Point Of 2008

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The Dow Jones dipped by 300 points today as investors worried about interest rate increases dumped stocks. There was quite a bit of bad news to for everyone to digest.

The passel of worries that investors juggled Thursday added up to an increasingly troubled economy. Analysts’ negative comments on General Motors Corp. sent shares of the largest U.S. automaker to their lowest level in more than 30 years, while Citigroup Inc. fell sharply after an analyst placed a “sell” rating on the stock and warned investors to expect less from the brokerage sector in an uneasy economic climate. Disappointing outlooks from technology bellwethers Oracle Corp. and BlackBerry maker Research In Motion Ltd. further soured investors’ moods and made the tech sector one of the steepest decliners.

Also troubling were reports that oil prices would continue to climb, pushing worldwide inflation higher than ever. Read the rest of this entry »

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Exxon Valdez - Supreme Court Reduces Liability Award

It’s been almost 20 years since Captain Joseph Hazelwood caused one of the largest man made disasters by running the Exxon Valdez oil tanker aground, spilling 10.8 million gallons of crude oil off of Alaska’s Prince William’s Sound.

Exxon Valdez Oil Spill.

Today the United States Supreme Court overturned the original $2.5 Billion in punitive damages awarded to victims of the spill and reduced them to $507.5 million. The Supreme Court ruled that the original judgment was excessive under maritime law and should be reduced to the amount of actual damages.

The case was filed on behalf of almost 33,000 fisherman and other businesses that suffered as a result of the spill. It’s been in the court system for 13 years without resolve. In the time Exxon and
the Plaintiffs have been in litigation, 20% of the eligible plaintiffs have passed away.

The environmental disaster did unmeasurable damage to native fish, birds and other seafaring animals. It’s estimated that as many as 500,000 sea birds, 250 bald eagles, 3,000 harbor seals, 22 Orca whales and 1,000 sea otters were killed in the heavily polluted water. The number of fish lost remains
unknown.

$507.5 million seems like a small price to pay when you consider that in 2007 tests showed that there could still be as much as 26,000 gallons of oil in the contaminated shoreline of Alaska. There’s no way to take back such a horrible maneveur

Exxon has paid out $3.4 billion in remediation, fines, compensation and other costs since the accident on March 23, 1989.

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Home Prices Drop Worst In Twenty Years

Home prices have dropped in almost all markets, and now the decline is the worst in twenty years. The government is debating what can be done, if anything to combat the erosion.

The continued decline in home prices is driving down consumer confidence as well.

The Conference Board’s consumer confidence index plunged to 50.4 this month, hurt by inflation, sinking home values and soaring gas prices. It was the lowest reading since February 1992 and half what it was a year ago.

The index dropped more steeply than expected from 58.1 in May. Economists surveyed by Thomson/IFR had expected the report, released Tuesday, to show a more modest decline to 56.5 for June.

Inflation, political flux and job insecurity have created an ”uncertainty more acute, perhaps, than any time since 9/11,” said William Hummer, chief economist at Wayne Hummer Investments in Chicago.

U.S. home prices tumbled in April at the fastest rate since a widely followed index was begun in 2000. All 20 metro areas surveyed posted annual declines for the first time.

People are nervous, and value is disintegrating as their confidence wanes.

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Brian Mueller Resigns

Brian Mueller has stepped down from his job as President of Apollo Group (APOL). No reason was given for the quick stepping down of Mueller, who has been with Apollo Group since 1988.

Apollo Chief Financial Officer Joseph L. D’Amico will serve as interim president.

Mueller, who has been with the company since 1987, was president of Apollo Group since early 2006. He was previously chief executive of the University of Phoenix online campus. Apollo did not disclose the reason for his departure, but a quick scan of the news indicates he’s taking over at Grand Canyon University.

Greg Cappelli, Apollo’s executive vice president of global strategy said the company is looking for a permanent chief executive.

Apollo Group Shares are down slightly at the moment. Either the move was planned for some time, or the Apollo Group has one fast webmasters, because the changes have already been notated on the company’s website.

Brian Mueller is taking over at Grand Canyon University, a similar company to Apollo Group, which runs the University of Phoenix Online. Grand Canyon University is also going public.

“I’m excited about the opportunity to join this dynamic management teamand be part of a traditional university that will serve as a model for the future,” said Mueller. “It is a university that was founded on strong ethics and values and I look forward to helping build on their success.”

Mueller has served as President and a director of Apollo Group since January 2006 and has been with Apollo Group since 1987. He previously servedas Chief Operating Officer of Apollo Group from December 2005 to January 2006,Chief Executive Officer of UPX Online from March 2002 to November 2005, andChief Operating Officer and Senior Vice President of UPX Online from May 1997to March 2002. He is 53 years old.

Apollo Group shares are down 7% on the news right now.

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Analysts Predict That Fuel Prices Could Drop In 30 Days

Fuel prices have continued a steady climb upward and lawmakers are looking into making regulations on the very profitable business of oil speculation.

Analysts and Oil producers agree that excessive paper trading going on the oil commodity futures is to blame for higher fuel costs. These speculators never actually trade the oil, they just sell their lots of futures at a much higher cost.

Some feel that oil prices could significantly fall in 30 days if the Government steps in and regulates.

Senator Bart Stupak (Democrat - Michigan) is spearheading the initiative to impose regulations on oil speculators, called the PUMP Act (acronym for
Prevent Unfair Price of Prices) his act calls for banning Hedge and Pension funds from buying oil futures, making the transactions more transparent and increasing the amount of money an investor has to put down to purchase these futures. Speculators and investors in oil futures are only required to put down 5% - 7% in order to buy them, whereas stock requires a 50% down to buy.

You can definitely see where this leaves a lot of room for abuse.

Not everyone is convinced Federal Regulation is the answer, either. Some fear that this could drive
prices up further by driving oil traders will take their activities overseas and continue to drive the price up.

What are your thoughts? Do you think that Government regulations can help bring down the price of gas?

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Raffaello Follieri, Boyfriend Of Anne Hathaway Arrested For Fraud

Raffaello Follieri has been arrested for fraud and money laundering. All told, he’s been charged on 12 counts. Raffaello Follieri is a 29 year old who used to date Anne Hathway, and has influence with people such as Bill Clinton and the Pope.

Follieri has been charged with bilking investors out of millions.

Prosecutors allege Mr. Follieri duped several investors, including a California-based investment fund, into giving him millions of dollars for real estate investments. Instead, prosecutors allege Mr. Follieri used the cash to pay for a variety of personal expenses including his condo, $3,000 suits, and orthodontic expenses for his father.

He also allegedly used the money to pay for a $107,000 vacation in the Dominican Republic and dog walking services. Mr. Follieri even allegedly used $30,000 of investor money to fly his doctor to London from New York to treat him for a minor medical treatment, billing the service as a “house call.” He also allegedly set up an offshore company in Panama that siphoned off $3 million.

Who the heck spends $107,000 on a vacation to the Dominican Republic? Apparently someone with lavish tastes and enough bamboozled clients to live the lifestyle of the rich and the famous, at least for a little while.

Apparently Follieri was dumped by Hathaway recently. Follieri has been in the U.S. since 2003.

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Steven Colbert Weighs In On The Oil Crisis And Offshore Drilling

The oil crisis and the specter of offshore drilling are on everybody’s mind, including Steven Colbert. He thinks we don’t have much time before the crisis really screws up our way of life.

Check out the video. Steven Colbert certainly has some interesting ideas to cure the oil crisis, including shooting the Earth. Enjoy.

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Home Values Plummet In 20 Markets

With the sub-prime mortgage fallout continuing, it might be a great time time to bottom fish for a new home if you have the financial means.

Reports are in that home prices have went down over 15% in a year in 20 major metropolitan areas.

Not surprisingly, Las Vegas, Miami and Phoenix saw the largest declines of home valuations. These cities are reporting a 25% loss in home values, which is pretty huge. Undoubtedly, they are the same areas that flourished with development and new builds from 2003 - 2005.

Analysts are saying that this trend could continue with foreclosures on the rise and no market to absorb the empty homes.

Many homeowners owe more on their homes than they’re worth after using it as a virtual ATM during the high flying days of first, second and third mortgages. Many owners are unable to leave or sell their homes without taking a loss.

David Blitzer, chairman of the index committee at Standard & Poor’s said:

“There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline.”

Falling real estate values affect us all, because when homes are left vacant neighborhoods decline. Lawns that were once tended are left to become weed gardens and pesky people like metal thieves steal the copper and anything of value from the interior of these homes, which could cause serious damage with leaked natural gas etc. Squatters are another risk to these areas.

What are your thoughts on declining home values? Have you been directly affected by this?

Check out our Real Estate Discussion Forum

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Rep. Bart Stupak Pump Act Attempts To End Excessive Commodities Speculation

Michael Masters of Masters Capital Management testified before congress today that oil speculators are playing a great role in the high cost of crude oil. According to the testimony by Masters to the House Energy and Commerce Committee, crude prices could quickly drop from $135 per gallon to $65 or $75. Other analysts present at the meeting agreed with his assessment.

Rep, Bart Stupak has introduced the Pump Act, to try and stop excessive speculation in the commodities market.

Rep. Bart Stupak, D-Michigan, said that oil industry experts have agreed that speculation is causing $35 a barrel of price increases. Oil is now a financial asset. Commodity trading is now a massive market that is creating havoc in the markets and high consumer prices.

Stupak wants to end excessive speculation in crude oil. Check out the whole video from C-Span. His arguments are certainly compelling. The rise in commodity index funds is driving the price of commodities up worldwide.

Stupak has received broad support for his PUMP Act.

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John McCain $300 Million Prize - Clean Car Challenge

Obvious problems facing our nation are the high cost of transportation fuel, and global warming due to excess pollution, largely due to gas engines. These problems can be tackled by the American people, according to Republican Presidential candidate John McCain.

“In the quest for alternatives to oil, our government has thrown around enough money subsidizing special interests and excusing failure,” said McCain. “From now on, we will encourage heroic efforts in engineering, and we will reward the greatest success.”

The idea is certainly interesting. The prize could help stimulate interest in alternative fuels research, and the $5,000 per car tax rebate for zero emission vehicles would certainly appeal to auto makers, who have appeared reluctant to abandon the combustion engine.

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