October 7th, 2009
03:44 PM ET

Financial Dispatch: Gold on record-setting run

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Andrew Torgan
CNN Financial News Producer

Gold continues to push higher into record territory amid concerns about a weak U.S. dollar, inflation and technical-based buying by large investment funds.

The December contract for gold rose $4.70 to settle at a fresh all-time high of $1,044.40 an ounce today. Earlier in the session, it traded as high as $1,048.20, topping Tuesday's intraday mark by $3 an ounce.

Gold, which is up 17% so far this year, has been supported recently by concerns about the dollar and bets that inflation will rise over the long term as the economy recovers and stimulus measures will have to be reversed.

Analysts expect the rally to continue and say gold could push past $1,050 this week and top $1,100 in the near future.

Sources: Administration considering safety net measures

Amid nervousness about states' economies and a growing unemployment rate, the Obama Administration is considering a series of measures aimed at putting many Americans back to work before the 2010 midterm elections, sources close to the process told CNN.

The effort is largely being directed by the Treasury Dept, and Lawrence Summers, director of the National Economic Council, one source said.

Ideas include enhancing tax credit flexibility for small businesses, extending unemployment and health benefits and offering states temporary "loan packages" to help governors get through the worst of the recession.

Unlike the stimulus package, the loans to states would be voluntary: "We would like to avoid the stimulus problem," the source said.

GM hits a big speed bump

For General Motors, the road out of bankruptcy isn't proving to be as smooth as its quick trip through it.

In the past week, the company's plans to sell its Saturn brand to auto retailer Penske Auto Group fell through, forcing GM to start winding down a network of about 350 dealerships.

But that's not the only post-bankruptcy problem for GM. Its plans to sell Hummer to a Chinese industrial company missed a target date of closing by Sept. 30.

GM is also trying to close a deal to sell two-thirds of GM's European Opel brand to a joint venture between a Canadian auto parts maker and a Russian automaker. Despite ongoing losses at Opel, the decision to sell that stake was a difficult one for GM. Many experts are concerned that the Opel sale will weaken GM by limiting its global reach.

The great tax drought of 2009

You don't need a Ph.D in economics to know that the government fiscal year that ended last week was ugly for the budget.

Much attention has been paid this year to the record-high spending and deficit accrued because of the financial and economic crisis.

But one of the driving factors that has gotten less notice: plummeting tax revenue. The crisis, after all, walloped company profits and savaged Americans' income stream.

Through the end of August, Uncle Sam collected 25% less in tax revenue for the year than he did during the same period a year earlier. The two biggest culprits - a 56% drop in corporate income tax revenue and a 20% drop in individual income tax revenue.

On balance, the Congressional Budget Office expects that tax receipts will be 14.9% of gross domestic product this year, well below the historical 18.3% average.

Amazon lowers ‘Kindle’ prices

Anyone who has visited Amazon.com recently knows the company has been relentlessly promoting its “Kindle” e-book reader.

Now, with Christmas less than 80 days away and amid predictions for a dismal holiday shopping season, Amazon is cutting the price of the Kindle in the U.S. and launching a version that can be used worldwide.

The company lowered the U.S. price of the Kindle by $40 to $259. It also launched a new Kindle that can be used globally. That device, which has wireless capabilities in more than 100 countries, sells for $279 and will begin shipping Oct. 19.

Target slashes toy prices 50% for the holidays

Discount retailer Target is offering up to half off of popular toys like Barbie and Fisher Price to lure bargain hunters this holiday season, the company said today.

Target says the price cuts went into effect Oct. 1 and will remain in place throughout the holiday season.

A selection of toys are discounted by as much as 50%, including the Barbie Fashion Doll, on sale for $5, and the GI Joe Tough Troopers Figure, marked down to $14.99. Most are available both online and in stores.

Whether these efforts will pay off in the form of stronger sales remains to be seen. Retailers are bracing for another potentially weak holiday shopping season amid an uncertain economic recovery.

Tiger says he’s no billionaire

Forbes magazine reported last week that golfer Tiger Woods was the first athlete to earn $1 billion.

One problem, though: Woods says he doesn't have that much money. At a news conference yesterday ahead of the start of The Presidents Cup, a reporter asked Woods directly about the Forbes report.

Reporter: "This last week, it was announced you hit the billionaire status. What's that like to learn?"

Tiger Woods: [Laughs] "Well, one, I haven't, so I don't know where that number came from."

Forbes cited estimates of Woods's earnings from endorsements, tournament winnings, appearance fees and his nascent golf-course design business. Other than tournament winnings, Forbes could only guess at the other income of the famously circumspect Woods, and the magazine admitted its figures could not be exact.

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Filed under: Andrew Torgan • auto bailout • Economy • Finance • Technology
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