This week in finance was marked by red cards from the U.S. court system, poor economic defense and Warren Buffett's World Cup soccer picks. (Did you miss last week's recap? Check out Water Cooler Finance: Billion Dollar Summits and Barack Vs. BP.)
IN PICTURES: Biggest Stock Scams
Judges Change the Playing Field
Obama's attempt at putting a halt to deepwater drilling in the Gulf of Mexico was ruled against by a federal judge in New Orleans. Despite dealing with the worst oil spill in U.S. history, the judge ruled that a total ban was too broad and not in the best interest of the public. The White House will appeal the decision. (For more, see The Most Expensive Oil Spills.)
In the Supreme Court, judges ruled that the use of the "honest services" federal law, used to convict Enron's Jeffrey Skilling and Hollinger International's Conrad Black, violates the Fifth Amendment. The decision will have a huge impact on the way white-collar crime cases are prosecuted, as it takes away the grounds on which many of these cases are brought to court. (Find out what went wrong in Pages From The Bad CEO Playbook.)
Speaking of convicts, former lobbyist Jack Abramoff who pleaded guilty to felony counts of conspiracy, fraud and corruption, has been hired at a kosher pizza joint in Baltimore, Maryland, as part of his transition out of prison. It's a long way from his previous job as the owner of a kosher restaurant, but I'm sure he finds comfort working in a familiar industry.
Market May Need a Time Out
Apparently we don't buy houses nowadays unless there's a tax credit involved. The month of May saw the lowest level ever for the sales of new homes in the United States, with levels collapsing 33% from the previous month.
Freddie Mac announced on Thursday that the rates on 30-year mortgages were at their lowest level in 40 years, and the news prompted the Dow Jones to fall nearly 146 points that day. The S&P 500 index continued its longest losing streak in seven weeks. All of this sounds troublesome, but if you are a homeowner looking to refinance, or a prospective home owner, those low mortgage rates have put you in a great financial position. Homeownership may be more easily within your reach than you think.
Consumers should also keep an eye on Congress as the houses vote on a financial reform bill that would create an independent "Consumer Financial Protection Bureau", charged with writing and enforcing rules for private student loans, payday lenders, credit-card companies, banks and mortgage lenders. The vote should take place in the coming week.
World Watches World Cup
World Cup fever is rampant among us – and the financially-inclined are no exception. For the U.S.-Algeria game on Wednesday, volume at the New York Stock Exchange dipped 32% lower than average as traders stopped to watch the 0-0 game as it hit the 72nd minute. At the same time, England was playing Slovenia, and trading didn't return to normal levels until both games were finished, according to CNBC.
Speaking of soccer, you might want to turn to Warren Buffett for more than just investment advice. The Oracle of Omaha bet $30 million against France, who was eliminated by South Africa earlier this week. Is there anything this man can't predict? (For more on the Oracle, check out Think Like Warren Buffett.)
The Bottom Line
If the economic news is getting you down, take heart – Apple (Nasdaq:AAPL) has sold three million iPads in 80 days. We may not be buying houses, but we are always buying Apple products. And at least you aren't playing an eleven-hour tennis match. There's always something to be thankful for. (Apple isn't the only company to come back from the edge, find out more in Biggest Corporate Comebacks.)