Everyday for the past two weeks, Goldman Sachs' stock has been hit by the subprime crisis in the United States. I feel that the panic is overdone with this particular stock. While I do not think that the subprime problem is over until 2009 when the housing market stablizes, I think the damage is overdone with this name. With a P/E ratio of just about 8, everyday this name gets cheaper and cheaper and should be bought as it goes down, that way profits can be maximized on the way back up to $200 a share.

Two weeks ago, Goldman was trading over $200, and today after the close Goldman finished at $177. Earlier today it was announced that one of Goldman's hedge funds got a bailout of over $3 billion. There have even been threats of Goldman cutting end of the year bonuses with it's recent losses, still with these concerns, this investment banking company is a solid name going foreward in the next 6 months to a year.

The Federal Reserve announced that it would keep it's discount rate steady at 5.25%, this is the first pause in 17 rate hikes throughout the past two years. This was widely expected since fed fund futures were at about 22 percent going into the decision. Some say that this may not be just a pause but also a ending to the hike cycle. It has been speculated that soon, the Federal Reserve will cut rates in the near future.

The Fed also appeared less concerned about inflation than it has been in recent months. In a statement explaining the decision to pause, the Fed described the potential threat from rising prices in muted terms."Inflation pressures seem likely to moderate over time," the Fed said, "reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand."

After the news was released, the markets rallied on the news only to fall just fifteen minutes later. The markets are concerned that the Federal Reserve still overshot and the United States could still experience stagflation. Stagflation is a period with a slow economy coupled with higher inflation.

There is no question that this economy is slowing. The big questions are if Bernanke and Friends are finished the cycle and what their next strategy will be to combat the troubles to come.

By: Michael E. Martinez

As if Microsoft didn't have enough problems with Windows Vista, here comes a lawsuit by the maker of Norton Antivirus, Symantec. Symantec is attempting to throw up a legal barrier in front of the software giant, accusing it in court of misusing intellectual property and violating a license agreement. Symantec is seeking financial damages, an injunction against the sale and shipment of both Vista and Longhorn server, and a recall of Windows versions currently on the market that allegedly infringe against Symantec's IP.

At the core of the dispute is Symantec VolumeManager. Originally developed by Veritas Software, Symantec acquired it when it bought out Veritas in late 2004. VolumeManager is a server management product that allows admins to easily partition volumes, automate some admin tasks, and remotely monitor volume, partition, and server information.

In 1996, Microsoft licensed a version of VolumeManager from Veritas for use in Windows 2000. According to Symantec, the company then rolled the technology into Windows Server 2003 without acquiring a further license. Symantec director of legal affairs Michael Schallop says that's problematic because Veritas (now Symantec) Storage Fondation for Windows competes with Windows Server 2003.

According to the complaint, Microsoft is now incorporating Symantec's IP into the upcoming Vista and Longhorn Server products, which is why Symantec is asking for an injunction against the release of those two products.

The two companies had spent some time negotiating over the issue. Once negotiations hit an impasse, they agreed to let the courts settle it for them. Micorosoft claims that it bought the intellectual property it needed from Veritas in 2004, prior to its takeover by Symantec and that the current dispute is a "very narrow disagreement" over the original 1996 contract.

By: Michael E. Martinez

The McClatchy Co.'s plan to quickly sell off a dozen of the newspapers it acquired in the Knight Ridder Inc. deal left journalists in those newsrooms stunned and uncertain Monday as they tried to divine their futures.

Newspaper staffers from California to Pennsylvania spent the day digesting the news that after months of uncertainty they still didn't know who their new bosses would be. Knight Ridder Chief Executive Officer Tony Ridder issued a letter to company workers Monday saying that "for those 12 newspapers that are being sold, the uncertainty is not over, and I regret that very much." However, he did not address how or when he discovered they would be sold.

In addition to the Mercury News and Contra Costa Times, McClatchy plans to sell one other California newspaper it acquired by swallowing Knight Ridder: the Monterey Herald. The San Luis Obispo Tribune is the only Knight Ridder paper in California that McClatchy intends to keep. Nine other newspapers - the Philadelphia Inquirer, Philadelphia Daily News, Akron Beacon Journal, Wilkes-Barre Times Leader, Aberdeen American News, Grand Forks Herald, Ft. Wayne News-Sentinel, Duluth News Tribune and St. Paul Pioneer Press - also will be sold.

By: Michael E. Martinez

Yesterday, on "Merger Monday", it was announced that McClatchy publishing would acquire the newspaper publishing company, Knight Ridder for $4.5 billion in cash and stock. McClatchy will pay $40 cash and 0.5118 shares for each Knight-Ridder share. The deal values Knight Ridder at $67.25 per share, above its closing price of $65 Friday.

The combined company will operate 32 daily newspapers and 50 non dailies after the sale of 12 Knight Ridder papers, including some of its best known titles such as the Philadelphia Inquirer and the San Jose Mercury News. It will rank as the second-largest U.S. newspaper publisher based on a daily circulation of about 3.2 million people. McClatchy said it expected the deal to close within three to four months.

McClatchy said it would retain Knight-Ridder newspapers serving its fastest-growing markets, including the Miami Herald, the Kansas City Star and the Charlotte Observer. The purchase also gives McClatchy a one-third stake in online job site CareerBuilder.com.

The company said it would assume about $2 billion in Knight-Ridder debt at closing and McClatchy will add two Knight Ridder directors to its board. McClatchy said it expected the deal to reduce earnings per share in the mid-single-digit percentage range in the first year after closing, then add to profit by 2008.