End of Q3

Microsoft criticizing Google is reminiscent of Andrew Carnegie badmouthing JP Morgan. There is such a thin line between shrewd and shady that often the line is blurry: less about right and wrong and more about fair competition. The only problem with that is there is an equilibrium that much be reached, at what point can a company be punished for being better run and more efficient than another company. That is the nature of competitive advantage.

All the Titan fighting aside, the DoubleClick deal is bad for Google, and the Facebook deal is a "make up" deal for Microsoft. You can expect to see a quick spike in MS stock price, but it remains a very solid long term investment.


Next week will be big, the start of the Q4 will bring out a a slew of earning reports from the previous report. The fear is that corporate earnings power was lessened in the third quarter. This is the last trading day of one of the most volatile periods in years -- one that pulled stocks sharply lower after the Dow Jones industrial average closed at a record 14,000.41 in mid-July. We also had an emergency Fed infusion of capital. Along with many big banks visiting the Discount Window. Not to mention that the loonie matched the dollar, and oil climbed to over $80 per barrel.

As the tumultuous third quarter draws to a close, investors appear a bit less concerned about the tightening in the credit markets that sent stocks plummeting in late July and August. On Thursday, the Fed said banks slowed their borrowing from central bank this week to the smallest amount in six weeks, after a huge spike last week.
But while most market watchers agree that conditions have improved, the credit markets still don't appear they are back to operating normally. Levels of outstanding asset-backed commercial paper fell about 17 percent in the week ending Wednesday -- not as steep a decline as seen a few weeks ago, but still suggesting that demand isn't meeting supply.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 285.9 million shares.