A Massachusetts company has developed the world's first commercially viable "street-legal plane.  The Transition converts from plane to car and vice verse in "about the time it takes to lower the top on a convertible" says co-founder Carl Dietrich. The vehicle must take off and land at airports and the FAA has granted the Transition an exemption so that it can include airbags & other safety features.  It weighs 1,430 lbs. and has a 460- mile range in the air. The Transition has a 110 mph cruising speed (60 mph highways) and uses premium gasoline. The company plans to start deliveries at the end of 2011 for the $194,000 vehicle.

During the week, President Obama signed into law the financial reform bill. With Congress on a roll, the powers-that-be also moved to restore jobless benefits to 2.5 million unemployed people who have been unable to find work for over six months.  Finally, Treasury Secretary Geithner weighed in on the expiring Bush tax cuts, claiming that the wealthiest Americans will see their tax burdens increase come January as extending such benefits could prove detrimental to the nation's mounting deficit.

An 1839 J.M.W. Turner painting, "Modern Rome - Campo Vaccino" sold at auction on Wednesday for $45.1 million, setting a new record for the British artist. The auction was held by Sotheby's in London and was sold to the J. Paul Getty Museum in Los Angeles.

And what a week it was...Goldman got back to business as usual as it agreed to pay $550 million for mortgage improprieties;  BP finally capped that well (maybe?); earnings season got off to a solid start (until a few banks and Google disappointed the optimists); boardroom confidence returned as transactions were once again in vogue (with even a Hefner sighting); the Fed admitted the economy may be slowing, but stopped short of announcing new stimuli; the streak continued (temporarily) as the Dow climbed for seven straight days, reversing the pre-July 4th downturn that lasted a similar duration. 
 

Ferrari World, set to open in October in Abu Dhabi, is the world's first Ferrari theme park and largest attraction of its kind. It will be an intense multi-sensory experience.  The park features Formula Rossa, the world's fastest roller coaster, reaching speeds up to 150 mph with a G-Force of 1.7Gs. The park is the latest addition to a $40 bil. project on Yas Island.

After a seven-day slide amid talks of double-dip recession retesting March 2009 lows, and the European contagion, investors received virtually no new news this week. Still, many ventured back into risky assets as stocks experienced their best week of gains in almost 12-months.  (What changed?)  Despite the uncertainty of another earnings season, investors woke up after a long holiday weekend and apparently found good value in equities.  Seemingly benign news about EU bank stress tests (see below) and Google's license renewal in China generated decent buzz and even lackluster retail reports could not dissuade the newfound bulls from pushing the Dow back above the 10,000 level.  Volume remained light, however, as traders enjoyed extended vacations and cautious investors chose not to initiate many new positions in advance of the earnings announcements.  
 

More than 1,200 prison inmates, including 241 serving life sentences, defrauded the government of $9.1 million in tax credits reserved for first-time home buyers, according to a Treasury Department report released Wednesday.

Despite very little Republican support, the revised financial reform bill is expected to pass both Houses and be signed by President Obama in early July.  Consumers should enjoy greater protections; banks could be spinning off proprietary (and derivative) trading desks into separate entities; the SEC and CFTC will have enhanced powers over risk trading (hedge funds and derivatives), "too-big-to-fail" could become a thing of the past.  On the other hand, the Senate rejected a bill that would extend jobless benefits for over 1 million unemployed folks as Republicans  took a stand and clamped down on expensive stimulus programs to focus on deficit reduction much like their European counterparts.  (Stay tuned...)
 

The luxurious Ty Warner Penthouse at the Four Season's Hotel in New York, is the most expensive hotel room in the country outside of Las Vegas. At $35,000 per night, the room offers floor to ceiling windows with 360 degree views of the city skyline. The nine-room suite has walls inlayed with mother of pearl, gold and platinum-woven fabrics, and includes a private butler, unlimited global calling and TVs programmed to receive every channel in the entire world.

As the quarter nears a close, investors are already focusing on upcoming earnings season to gauge the recovery and its impact on Corporate America.  Over the past few months, the headlines have focused on the oil spill, the plight of BP, the sovereign debt crisis, and the plunging euro.  Some companies have already warned about their results and expressed concerns that consumers remain nervous about these and other issues (labor market).  During the week, Fedex issued conservative projections that fell below prior forecasts.  Best Buy reported lower-than-expected earnings as consumers shied away from higher priced items (though PC sales were strong).  Nokia slashed its outlook as the company continued to struggle against Apple (iPhone) and Research in Motion (Blackberry).  While the inflation data remained relatively tame (see below), some analysts point out that certain commodity prices like steel, copper and aluminum have been on the rise, but companies have been slow to pass along cost increases to consumers for fear of lost business (and thus, margins get squeezed).  On the other hand, labor costs have held steady given the uncertain employment picture and many companies are benefiting.  

The 1964 Aston Martin DB5 driven by Sean Connery in the films "Goldfinger" and "Thunderball" is set to go up for auction. The car, equipped with machine guns, a bullet-proof shield and revolving number plates, is expected to fetch $6 million.

BP garnered top headlines as the "to pay or not to pay" a dividend dialogue moved center stage.  As the political pressure grows hotter, the company is weighing the option of irritating politicos vs. its shareholders.  In the midst of the late, great recession, BP refused to cut its dividend and its CEO even stated "I pay taxes so I don't go to jail.  I pay dividends so I don't get fired."  With billions of dollars in sanctions and penalties and thousands of lawsuits on the horizon, the company's share price fell to levels not seen since 1996.  Still, management continued to downplay cashflow issues (though PR issues are another story) and the UK government offered a well-timed vote of confidence about its economic viability. Meanwhile, Goldman Sachs again found itself on the regulatory hot seat as new subpoenas and lawsuits emerged and its stock dropped to its lowest level in over a year.  
 

On June 15, Microsoft will unveil "Project Natal". Natal is a device that can be added on to the Xbox. Using an infrared sensor and video camera, it detects movements and expressions so users can play games without controllers. The device will cost $100.

Rating agencies took their turn to face the wrath of Congress over their role in the financial debacle.  Ex-Moody's officials testified about the intimidation felt by agency employees as analysts and investment bankers pushed for "rosy" outlooks on risky securities.  Some spoke of the imbedded "conflict of interest" as these bankers actually pay to have their investments rated so it may behoove the agencies to (try to) offer the most favorable assessments in order to win more business.  Enter Warren Buffett to bring levity to the situation.  "I want to thank you for the subpoena" (upon being thanked for testifying).  "It looks like they (Moody's) tweaked their model when they should have gone at it with a meat axe."  "There's room for improvement (in their process) because Moody's rated Berkshire one notch lower than S&P."  At the end of the day, Buffett, a Moody's shareholder, refused to cast blame on the rating agencies.  For their part, Fitch (and Moody's) looked to prove the critics wrong about their competence by downgrading BP, a mere month after claiming the oil spill would have "limited financial impact on the company."  
 

Commenting on Europe's debt crisis, JP Morgan CEO Jamie Dimon said "if they don't fix the problem now, they're still going to have to fix it by bailing out their banks. A lot of that sovereign debt is owned by banks."

During the week, Treasury Secretary Geithner spanned the globe, sharing his views on international economic affairs to anyone who would listen (and the markets responded with a collective yawn).  Meanwhile, late in the week, the China State Administration of Foreign Exchange provided a vote of confidence to the euro-zone and its "ailing" sovereign debt, by discounting rumors that the country was planning to unload EU-related securities; additionally, the agency stressed that Europe remained a key investment market for China.  On that news, equities skyrocketed with the Dow rising close to 300 points in a day and reclaiming the previously relinquished 10k threshold.     
 
Transactions dominated much of the business news of the week as boardrooms continue to express confidence.  IBM will be acquiring Sterling Commerce from AT&T for $1.4 billion in a move to enhance its B2B software presence.  Gentiva is buying Odyssey Health in a $1 billion deal to form the largest domestic home-health and hospice company.  Toys "R" Us is planning a $800 million IPO as its operations have shown nice improvements during what has been a challenging period for many retailers.  In other corporate news, Apple successfully launched iPad in nine European countries during the week; not to be outdone, Dell introduced the latest competitive touch-screen tablet called Streak.  BP struggled with the Gulf oil spill on two fronts..."Top Kill" became its latest strategy to plug the well (or, at least, try), while politicos continued to lash out at the company's ongoing efforts and its overall preparedness (or lack thereof) for such a tragic event (which will likely pass Exxon Valdez in terms of devastation).  Fearful about the negative PR over "Obama's Katrina," the president suspended drilling projects and future permitting for the Arctic region until next year, a move that hinders a significant Royal Dutch Shell program scheduled to commence off Alaska over the summer.  Distressed over the decision, Shell also made headlines by purchasing East Resources, a natural gas exploration company for $4.7 billion, in the latest industry move to target the potential for shale-gas production.  

A California entrepreneur has invented and patented a vending machine designed to help medical marijuana dispensaries meet the challenge of regulating and distributing the cannabis. The Prescription Vending Machine helps dispensaries verify marijuana patients' names and confirm they are properly and legally registered to receive the cannabis.
 

The machine uses a touch-screen and biometric fingerprint technology to match information embedded with a patient's name and other information.  It includes a special, prepaid member contribution card that is debited when someone receives marijuana.  In all, 14 states have approved medical marijuana; similar ballot measures or legislation is pending in another 14.

The Senate passed its financial reform bill that would bring the most sweeping regulatory changes since the 1930s; it must be reconciled with one approved in the House.  In the spirit of bipartisanship, four Republicans crossed over to support the Senate version that, among other things, restricts certain speculative trading practices, creates a consumer protection agency, and attempts to end the perception (practice) of "too big, too fail."  Analysts peg Wall Street firms as big losers and estimate that derivative trading restrictions could hinder profits by up to 20% at certain institutions.  Meanwhile, the financial reform in Europe is having lasting implications on global markets.  Germany banned naked short-selling, apparently without sharing its plan with its counterparts, stirring up concerns that EU countries are not close to being on the same page.  Its government also approved its $185 billion contribution to the bailout fund and EU finance ministers are trying to stay ahead of the game and initiate meaningful budgetary checks and balances before the next "Greece" emerges with major bailout needs.  If the protests on the street are any indication, the austerity programs remain hard sells (though the alternatives would be worse).  US investors monitored overseas developments with bated breath as domestic banks and corporations could be dramatically impacted should more EU countries seek aid and their economies fall into recession. 
 
Earnings continued to reflect economic strength as Home Depot and Lowe's bested expectations and boosted their outlooks.  Though Wal-Mart's US sales disappointed, luxury retailers like Saks and Ann Taylor saw enhanced activity and Target even revealed better sales of higher-ticket items.  Analysts feel the news implied consumers are now moving away from the discount-only mindset.  In other strong boardroom moves, Pepsico announced a $2.5 billion investment in China and Samsung plans to upgrade factories and equipment to the utune of $15.6 billion.

The world's first gold vending machine was unveiled in a hotel in Abu Dhabi in the UAE and began attracting customers minutes after it opened.  The machine, called Gold To Go, is covered in 24-carat gold and dispenses one, five and 10 grams of gold, in addition to a one-ounce gold bar. A one-gram gold bar will cost about $48 and $1,265 for an ounce. Six gold coins of varied weights and engraved with symbols of gold-producing nations Canada, Australia and South Africa, are also dispensed by the machine.
 

The machine tracks the gold price on fluctuating markets with a built-in website that transmits the information every 10 seconds, and updates the price accordingly every 10 minutes. Ex Oriente Lux, the German firm that makes the machine, claims the vending machine is the first of its kind in the world and is looking at investors and tourists as target customers.

While investors survived a week without computer glitches, and soon-to-be enacted circuit breakers (thanks Waddell & Reed), volatility has definitely returned to the markets and triple-digit moves have become the "new normal."  A $1 trillion-ish EU bailout plan was greeted with much enthusiasm at least until late in the week.  Regulators are now scrutinizing Morgan Stanley, J.P. Morgan Chase, Citigroup, Deutsche BankandUBSwith regard to mortgage-related CDO's, and analysts expect a monster settlement. Meanwhile, ratings services are not skirting blame for the mess and a new oversight board is on the way to hopefully eliminate the "conflicts of interest" involved in the ratings process.    
 
Retailers took center stage in earnings season as Macy's and J.C. Penney offered decent results, but analysts were disappointed in their cautious projections for future quarters.  On the other hand, Whole Foods posted solid profits and raised its views for the full-year.  Next week, some of the big boys (Wal-Mart, Target) report.  Shifting away from retailers, Cisco Systems saw its earnings jump by over 60%, but also gave a lackluster estimate for continued sales growth.  Fannie Mae's latest report brought renewed pessimism to the housing recovery as the company lost $11.5 billion in the quarter and looks to be in need of even more substantial government aid.  In transaction news, German software company SAP AG is buying Sybase for about $6 billion.  J.P. Morgan Chase apparently likes the newspaper business as the financial giant now has a 10% position in Gannett (USA Today).  Research firm VentureSource reported that venture capital funds are selling off more high-growth and start-up investments either through private placement or IPO as confidence returns to the boardroom and major players like IBM are participating.  Speaking of, IBM's CEO expects earnings to double by 2015 and these acquisitions remain a key part of its overall strategy.  Intel also sees significant revenue growth in its future as chip demand is on the rise for both consumer and business shoppers.