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George Chamberlin's Money in the Morning

Blame it on CDOs of ABS. That is the source of the problems that are rocking the stock and bond markets around the world. Unless you are a really serious trader you've probably never heard of Collateralized Debt Obligations of Asset-backed Securities, but that the source of all of the consternation these days. In particular, hedge funds that have made leveraged, highly speculative bets on the subprime mortgage market. It really has little to do with the underlying loans, but rather the technique used by traders.

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Of course, all of this convoluted activity has consumers running for cover, right? According to the RBC Consumer Attitudes and Spending by Households Index, sentiment has rebounded this month after a two-month decline. It's pretty simple: If people are comfortable with their jobs -- as the survey suggests -- and it doesn't cost as much to fill their gas tanks, they are happy campers. The RBC index found that its jobs index, confidence in the investment climate, and future and current conditions all rose. By the way, this is a very current survey, not a reflection of attitudes a month ago. Amazingly, the people that put out this survey can't even appreciate the power of consumer attitudes. "The rise in the investment index might prove short-lived if current market volatility persists," they said. Volatility is hardly a new situation. The Dow industrials have posted triple-digit closes in eight of the last 10 trading sessions, the exact period when the survey was being conducted.

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On a much sweeter note, Campbell Soup has announced it wants to get out of the chocolate business and is looking for a buyer for its Godiva Chocolatier operations. Nothing wrong, they just want to focus on their core packaged foods business. According to Packaged Facts, the U.S. market for chocolate products is expected to climb from $16 billion last year to $18 billion by next year.

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A big party today in Hastings, Neb., the home of Kool-Aid. It was in 1927 that Edwin Perkins invented the popular powdered drink and each year they throw a big party featuring celebrities and the world's largest Kool-Aid stand. Americans pour down a half billion gallons of the drink every year. By the way, Perkins later married his childhood sweetheart, Kitty Shoemaker, who herself had created a popular product -- Jell-O.

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A couple of SDSU student were on hand this morning to ring the opening bell at the NASDAQ Center in Times Square. Brad Chisum and Nick Rhea are members of the Omega Sensors, the winning team in the Moot Corp Competition, a venture capital competition that provides MBA student teams a chance to simulate the real-world process of raising venture cap funds. Unfortunately, Brad and Nick had a lot of competition at the NYSE. Ringing the opening bell uptown were supermodels from Victoria Secret. Unfortunately, not even the models could give the markets a boost ... pardon the pun.

— George Chamberlin, Executive Editor

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