Investment News: Money Morning

Crude Hits $133; Time Warner Spins Off Cable Unit; Boeing Jettisons 750 Workers; UBS Sells Assets to BlackRock; American Airlines’ Desperate Moves; Moody’s Big Mistake; DOJ to Sue OPEC?; BOE Holds on Inflation Fears

• Crude oil for July delivery rose $4.33 to $133.38 a barrel yesterday (Wednesday) after U.S. stockpiles showed an unexpected decline. Supplies fell 5.32 million barrels to 320.4 million last week, the biggest drop in four months, according to the Energy Department.

• Time Warner Inc. (TWC) announced yesterday (Wednesday) that it plans to spin off its cable-television unit and receive a $9.25 billion windfall in the transaction, Bloomberg reported. The move will let the company focus on its cable network, entertainment, and publishing operations rather than distribution - something investors have been clamoring for.

• The Boeing Co. (BA) said yesterday (Wednesday) that it would lay off 750 Southern California employees after losing a lucrative military satellite contract and seeing a dip in demand for the technology, the Associated Press reported. The cuts involve engineering staff at plants in El Segundo and Seal Beach.

• Swiss bank UBS AG (UBS) yesterday (Wednesday) sold subprime and other mortgage-based securities to a newly created investment fund run by U.S. asset manager BlackRock Inc. (BLK) for $15 billion, the Associated Press reported. The securities had a nominal value of $22 billion but have been listed with a book value of $15 billion as of March, according to UBS.

• American Airlines, a subsidiary of AMR Corp. (AMR), announced yesterday (Wednesday) that it was taking drastic measures in the face of escalating oil and fuel prices, Reuters reported. The world’s largest airline will cut thousands of jobs, reducing capacity by 12%. American will also charge $15 for passengers’ first checked bag. AMR stock dropped 25% with a $1.98 decline to close at $6.22.

• Shares of corporate debt rating agency Moody’s Corp. (MCO) dropped over 15% yesterday (Wednesday) after a computer glitch mistakenly issued "Aaa" ratings for Constant Proportion Debt Obligations, commonly referred to as CPDOs, Reuters reported. Moody’s stock lost $6.99 to close at $36.91 yesterday (Wednesday).

• The U.S. House of Representatives passed legislation yesterday (Wednesday) that would allow the Department of Justice to sue the Organization of Petroleum Exporting Countries (OPEC) for limiting oil supply and price-fixing, Reuters reported. The measure still needs to be approved by the Senate, but President Bush has already threatened to veto the bill.

• Inflation fears were blamed for the Bank of England’s 8-to-1 decision to hold interest rates steady yesterday (Wednesday), MarketWatch reported. "For most members, a reduction in Bank Rate this month would make it more difficult to keep inflation expectations in line with the target," the minutes said. For April, consumer inflation clocked in at 3%, above the BOE’s preferred 2% target.

May 22nd, 2008

Peter Schiff: Why this Money Should Replace the U.S. Dollar

There’s a new universal currency, backed by solid gold. You can use it to make online purchases anywhere in the world. Converting some money to the new currency takes just 5 minutes. You can start with as little as $10… or as much as $10 million.

According to CNBC star analyst and Euro Pacific Capital President Peter Schiff, this money could double the value of your savings – automatically – in just 6-9 months.

For Schiff’s full analysis and recommendations, please go here.

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