This week in finance, some perky numbers for the U.S. economy, extended tax cuts and a roller coaster for U.S. Treasuries. And don't forget about the latest FBI-led insider trading bust. Can you keep up with it all? (The better you understand why insider trading can be criminal, the better you'll understand how the market works. See Defining Illegal Insider Trading.)
IN PICTURES: 9 Ways To Use A Tax Refund

U.S. Treasuries & Dollar Bills
This week marked one of what will likely be many volatile periods for U.S. Treasuries, as investors may be looking to lock in gains as the year comes to a close. On Monday, December 13, 10-year Treasury yields fell four basis points, dragging the U.S. dollar with it as the currency toppled 1.3% against the euro from its December 10 value. By Thursday, December 16, key yields hit a seven-month high, which sent Treasury prices back up, with 10-year notes yielding 3.475%.

That rise also affected the U.S. dollar, leading to its strongest position against the euro in two weeks, up 0.4% to $1.3188 per euro as of Friday, December 17, 2010.

A Little More Insider Trading
In a move that seems to be straight out of a Hollywood movie plot, the FBI charged four corporate managers with insider trading-related offenses, like selling company secrets about products such as Apple's iPhone. The four charged worked as consultants for Primary Global Research LLC out of Mountain View, California.

The investigation relied on wiretapped conversations from two telephones at Primary Global's offices and cell phones of two of the accused, according to the New York Times.

Fed Impatient For Recovery
New jobless claims fell again last week, marking the sixth straight week of decline, and bringing that number down to the lowest level since the pre-recession summer 2008. For those with their eyes on the housing market, starts were up slightly in November, rising by 3.9%, but the high levels of inventory remain a concern. There are simply too many houses with not enough buyers.

Despite these hopeful numbers, according to the Fed, the recovery has been "disappointingly slow", prompting the Fed to stick to $600 billion of Treasury purchases and vow to keep interest rates low for the foreseeable future. That repurchase number is in addition to the long-term Treasuries that the Fed has been buying since August with revenue from maturing mortgage debt at a rate of about $110 billion per month, according to Bloomberg. Under QE2, $114.1 billion worth of Treasuries have been purchased since November 12.

Obama's Taxes
On Friday, President Barack Obama signed an $858 billion tax cut bill which will extend Bush-era tax cuts for the next two years, saying the law is "a good deal for the American people". The law is being described as a "bipartisan effort" (Washington-speak for "compromise"), as it extends tax cuts for the wealthy, but also benefits for the unemployed, according to ABC World News. The tax cuts for the wealthiest Americans have received a lot of attention, with high profile figures like Warren Buffett expressing their opinions that those with the most should also be taxed the most heavily. (Learn more by reading How Will The Expiring Bush Tax Cuts Affect You? and 8 Tax Cuts Set To Expire In 2011.)

As usual, both sides feel they made too many concessions and promised to continue to fight for their version of the package. The feeling seems to be one of grudging acceptance from both parties, yet the bill passed with strong support, 277 to 148.

IN PICTURES: Top 10 Solutions For A Big Tax Bill

The Bottom Line
The song remains the same: we're in recovery, but we want to recover faster. Luckily, while we're waiting, the Hollywood-style stories of insider trading, greed and deception should keep us entertained. (Recovering from an economic slump isn't the easiest thing to do, but here are a few potential methods of rebuilding. Check out Profiting From A Consumerless Recovery.)

Find out what happened in financial news last week. Read Water Cooler Finance: Barack Obama Vs. The World.

Related Articles
  1. Stock Analysis

    How Rollins Inc. Transformed from Radio to Pest Control

    Discover how Rollins, Inc. grew and expanded, making numerous acquisitions, transitioning from the radio industry to the pest control industry.
  2. Term

    Understanding the Maintenance Margin

    A maintenance margin is the minimum amount of equity that must be kept in a margin account.
  3. Entrepreneurship

    Mark Cuban Success Story: Net Worth, Education & Top Quotes

    Learn more about America's favorite billionaire: Mark Cuban, outspoken owner of the Dallas Mavericks and star of the hit show "Shark Tank."
  4. Credit & Loans

    Co-signing a Loan? Make Sure You Know The Risks

    Contractually, co-signers are just as responsible for the loan as the person actually borrowing the money. Be careful not to put yourself at risk.
  5. Investing

    Trends In Copyright Litigation

    The Internet has resulted in an explosion in content. An increasing number of copyright trolls are monetizing such content through litigious practices.
  6. Investing News

    Acquisition of Zulily Inc

    On August 17, 2015, Zulily Inc (ZU), an e-commerce company that caters mothers and children, announced that it will be strategically acquired by QVC, a part of Liberty Media Corporation (LMCA), ...
  7. Taxes

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  8. Investing Basics

    Toshiba's Accounting Scandal: How It Happened

    Learn how Toshiba's corporate culture and lax internal controls led to an accounting scandal that ended with the resignation of the company's CEO.
  9. Investing

    Is Airbnb Safe? What You Need To Know

    Thinking of booking a room or listing your home on Airbnb? Get up to speed on safety features for both guests and hosts.
  10. Investing Basics

    3 Companies You Never Thought Would Go Bankrupt

    Understand more about company bankruptcy and why a company would file for bankruptcy. Learn about three companies that went from industry leaders to bankruptcy.
  1. Black Money

    Money earned through any illegal activity controlled by country ...
  2. Emergency Banking Act Of 1933

    A bill passed during the administration of former U.S. President ...
  3. Slander

    Slander is the act of harming one person’s reputation by telling ...
  4. Libel

    Libel is publishing a statement about someone in written form ...
  5. Defamation

    Defamation is any statement (written or spoken) that damages ...
  6. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
  1. What are some high-profile examples of wash trading schemes?

    In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
  2. What are examples of inherent risk?

    Inherent risk is the risk imposed by complex transactions that require significant estimation in assessing the impact on ... Read Full Answer >>
  3. What is the difference between wash trading and insider trading?

    Wash trading is an illegal trading activity that artificially pumps up trading volume in a stock without the stock ever changing ... Read Full Answer >>
  4. How did Enron use off-balance-sheet items to hide huge debts and toxic assets?

    Prior to its infamous accounting scandals and collapse, Enron used off-balance-sheet special purpose vehicles (SPVs) to hide ... Read Full Answer >>
  5. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  6. How can I profit from monitoring open interest?

    Since markets experience asymmetric information between parties, monitor whether there is an imbalance between the open interest ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!