Week May 18 2012 – Weekly Recap & The Week Ahead
“Wide diversification is only required when investors do not understand what they are doing” — Buffett
1. Greek Politicians Fail to Agree on Government, Talks End — CNBC reported Greek politicians failed to agree on a government, nine days after an inconclusive election.
2. Moody’s Downgrades Italian Banks, Outlook Negative — Moody’s Investors Service downgraded the long-term debt and deposit ratings for 26 Italian banks, citing the country’s recession and rising bad debt levels.
3. Feds crack down on “pump and dump” scamsters — Regulators halted trading in nearly 400 microcap stocks in one of the SEC’s biggest efforts yet to crack down on potential fraudsters using “pump and dump” tactics before they occur.
4. Industrial production rebound strongly in April — Overall production at the nation’s factories, mines and utilities rose 1.1% in April, the strongest gain since December 2010 and well above expectations. Also, the government reported that housing starts climbed in April and beat expectations.
5. Moody’s hits Spain banks — Moody’s Investors Service downgraded 16 Spanish banks and Santander UK PLC, a U.K.-domiciled subsidiary of Banco Santander SA (STD, SAN.MC), the latest blow for a country already facing economic recession, surging unemployment and a five-year property bust. Also, Customers of troubled Spanish bank Bankia, nationalized last week, have taken out over 1 billion euros ($1.3 billion) from their accounts over the past week, El Mundo newspaper reported .
6. Facebook IPO with record $104B market cap — Facebook (FB) debuted on Nasdaq last Friday with a market cap of $104B, the highest ever for a firm at the time of its IPO.
7. JPM’s CIO holds $100B of risky bonds — the FT reports JPMorgan’s (JPM) Chief Investment Office has built up over $100B of positions in complex, risky bonds and structured products, with the CIO’s “non-vanilla” portfolio now over $150B.
The week ahead — Economic data from Econoday.com:
