Hump Day News

In the every-changing technology sector we have some new "toys" coming out over the next few months. At the top of the BUY list is LG. Not only does LG have new iPhone-like phones coming out, but they also have a new line of durable goods such as: refrigerators, washers and dryers that will be hitting the market soon. Furthermore, LG is really showing the markets its acumen and flexibility by competing against Apple in the wireless arena with its new Voyager and Prada, but LG is also building iMac monitors for Apple.

As a side note, expect Verizon and Vodafone stocks to get a shot in the arm as a bi-product of the new LG cell phones. The LG phones will connect to Verizon Wireless' latest data network, providing speeds much higher than the AT&T network which the iPhone currently uses. The Voyager also has direct access to Verizon Wireless' online music store, which has been a big hit, mainly in part to some very crafty advertising.

The Big Bear
For weeks now I have been telling you to watch Bear Stearn, and again we have movement. Bear Stearns Cos. said earlier today that they were laid off more than 300 workers; affectively fusing its two mortgage businesses. While the stated cause was the ongoing uncertainty and turmoil in the home loan industry, Bear is not a big sub-prime lender, so the story does not add up. While the credit crisis may have contributed to a dramatic slide in the investment bank's profit, so did poor management.

As an investment bank, Bear did a lot of underwriting for many of these mortgages, which hurt them substantially. However, the heavy mortgage exposure is more a product of mismanagement then it is market timing. Bear Stearns is the company most heavily exposed to mortgages among the major investment banks. It has now laid off two-fifths of the employees in its mortgage businesses this year, the company said.
Shares of Bear Stearns lost 70 cents to $137.87. The stock is down more than 20 percent for the year. However, it is safe to say that over the next few months, or maybe years, Bear will bounce back. They will begin to diversify, and generate revenue through bond market and fixed income securities.

Dynasty Taxes
We at Landes try to stay away form politics, but there is a pressing issue that may affect us all. Earlier this week Hilary Clinton announced that he has risen over $28m over the summer months. As a candidate this is a good thing, as a financial advisor, I am not so sure. Mrs. Clinton has said that if elected she would move to raise the capital gains tax rate from 16% to 32%. What that means is that revenue from stock sales, treasury markets, forex, and other investment income would not be treated the same as money earned or "working" income. The question is: will this threat cause a major sell off if she is elected? Please leave your comments.