Newsletter 1

THIS ISSUE
U.S. Double Dip recession p.2

Dear Friends,
Congratulations with reading the very first newsletter coming from iFund, especially when it in wrapped in such a fancy visual appearance. This great thing will show up 52 times more often than the Santa Claus does, so wait for it / read / watch / improve and enjoy. As always, comments and suggestions are more than welcome, so with high expectations and little sense of criticism, lets proceed. Nowadays the world keeps enjoying the R word transformation. Now it is again the word RRRRecession. The headlines are crowded with fear that worlds most powerful economy might go into another period of economic downturn. Its becoming increasingly rare nowadays that the is somebody who doesnt have an Apple. By that we mean the innovative and stylish products of a Californian electronics manufacturer. And guess what important event happened there: its long standing CEO has suspended his post, and now the firm sets off for a new strategy. Yours financially, iFund

There is no hurry and therefore no intention to jump right from the scratch into financial world from any side - either theoretical or practical. Instead there will be a smooth beginning by having a glance at what moods are prevailing in the world economy as a whole, in particular, the U.S. economy, which will be subject of our this weeks discussion. Apple in the Lurch p.3

There are rare cases when a soul of a whole company incorporates only one person. For Apple it was Steve Jobs, who after several suspensions and returns managed to return the company back on track. However, his dismissal may shed light on the question: what will happen next? Board updates Upcoming Events p.4 p.4

U.S. Double-Dip: a myth or reality?

We present a short qualitative overview of why there is conern that the United States are heading for another recession.
It has been three decades since the United States suffered a recession that followed on the heels of the previous one. But it could be happening again. The unrelenting negative economic news of the past two weeks has painted a picture of a US economy that fell further and recovered less than we had thought. When what may eventually be known as Great Recession I hit the country, there was general political agreement that it was incumbent on the government to fight back by stimulating the economy. It did, and the recession ended. But Great Recession II, if that is what we are entering, has provoked a completely different response. Now the politicians are squabbling over how much to cut spending. After months of wrangling, they passed a bill aimed at forcing more reductions in spending over the next decade. The U.S. Consumer If there's any way to squeeze some hope out of the grim June statistics (where consumption stayed where it was), it would be by hoping that consumers are responding positively to declining energy prices. Although real consumer spending technically worsened during the month, it was really virtually flat. That's by no means wonderful, but it's certainly better than the declines we saw in the prior two months. Retail sales, however, increased and hit another new high. This stronger spending came despite worsening consumer confidence; however, we know that in July confidence actually rose a bit. Perhaps a small bump in disposable income helped during the month. That marks one of the few clearly positive developments in June. Although additional saving is also a good thing, it indicates behaviour typical of wary consumers. During the month, saving rose by the most in more than a year. Business Activity Firms clearly weren't feeling very comfortable with the economy in June. Small business optimism continued to tick down for the fourth straight month. Durable goods orders slowed. Although the service sector continued to grow, it did so at a slower pace than in May and is approaching contraction (which occurs when the index shown drops below 50). Although the manufacturing sector grew faster, we learned on Monday that in July the index plummeted and is nearly shrinking. For a final slap across the face, the stock market declined by a bigger percentage than in May. Jobs The labour market also worsened during the month. The unemployment rate rose as the number of employed Americans shrunk. Although more jobs were created according to a separate government survey, the 18,000 it reported aren't nearly enough to keep up with increasing population. In recent news, it was said the economy created only 70,000 new jobs during July, which is obviously an indicator of some short-term fallacies. Where the Economy Goes from Here So all this looks pretty bad. The recovery clearly deteriorated from April through June. How does the U.S. avoid a double dip? Let's consider the major reasons for the economy's recent struggle. First, the housing market was very weak as home prices declined. Second, rising energy prices stressed consumers. Finally, events abroad including a severe earthquake in Japan and unrest in the Middle East caused negative economic shocks. Those latter two reasons shouldn't be as much trouble going forward. We're already seeing energy prices decline, and those temporary disruptions appear to be behind us. The housing market will likely continue to act as a drag, but that's nothing new: it has been very weak for a year. So if consumers and businesses see their food and energy costs relax a bit and paired with greater economic stability, the recovery could get back on track. But even that best-case scenario, we would likely be heading back into excruciatingly slow recovery-mode, not a sudden boom. By Igors Pauks

Learn more about the topic

The weak and slow recovery as well as lack of economic activity in the private sector are the causes being mainly attributed to the issue: http://www.ft.com/intl/cms/s/0/aa8 1cf92-8c3f-11e0-b1c800144feab49a.html#axzz1X11plyv8 The matter has become more serious after the recent downgrade of U.S. creditworthiness, triggering widespread fear in the financial markets: http://business.blogs.cnn.com/2011 /08/09/could-the-u-s-be-headedfor-a-double-dip-recession/ This topic is surrounded by extreme controversy as many economists have split into two counterparties.Let us have a look at what the opponents say. http://business.financialpost.com/2 011/06/22/u-s-double-diprecession-unlikely-but-risks-remainlarry-summers/ http://www.vancouversun.com/busi ness/Alan+Greenspan+double+rece ssion+Europe+worry/5219114/story .html http://www.youtube.com/watch?v= T6urdFqmDbs https://mninews.deutscheboerse.com/content/imf-chiefeconomist-chance-us-double-dipveryvery-small Here are the views of people claiming a recession is inevitable: http://www.riskwatchdog.com/2011 /08/04/us-%E2%80%98doubledip%E2%80%99-scenario-comesback-into-view/ http://www.msnbc.msn.com/id/439 46055/ns/businessus_business/t/signs-double-diprecession-has-begun/ http://www.newyorker.com/online/b logs/johncassidy/2011/07/gdpshocker-us-on-verge-of-doubledip-recession.html

Learn more about the topic:

Apple always remains a subject of widespread discussion in the financial press, representing a somewhat twofold view of the companys current situation and ever-increasing competition that could challenge its leading positions. Se here is what the news say: In case you have not got acquainted with the news, here is a brief coverage of what happened: http://www.bloomberg.com/news/2 011-08-24/apple-ceo-steve-jobsresigns.html Despite some scepticism, Tim Cook appears to have a strategy of his own in terms of product development, namely, internet services, where he already has made some substantial changes: http://www.bloomberg.com/news/2 011-09-01/apple-ceo-cookpromotes-eddy-cue-to-top-roleoverseeing-internet-software.html Paradoxically, yet Apple manages to sit on a larger chunk of money that the U.S. government. Maybe they could help the state out in such hard times? http://www.appleinsider.com/article s/11/07/28/apples_76b_in_cash_res erves_surpass_us_government_ope rating_balance.html Here is a good one about how the company made substantial profits without even setting that as a primary goal: http://blogs.reuters.com/greatdebate/2011/08/29/jobs-madeapple-great-by-ignoring-profit/ For a detailed overlook of what analysts think of Apple and other companies over the course of 20112012 visit this blog: http://finance.yahoo.com/news/Exp ectations-for-2012-Begin-zacks4082045092.html?x=0&.v=1

Apple in the Lurch

August 24, 2011. Is the day to remember. Innovative business genius, guru, icon and the living legend for millions of people all around the world - Steve Jobs resigned as the CEO of Apple Inc. I think a lot of people asked themselves: What will happen to Apple without its flagman with its black turtleneck, blue jeans and white sneakers? Steve Jobs successor Tim Cook who was chief operating officer for Apple and already dedicated 13 years of service to the company really knows what Apple Inc. stands for. He was the one who reorganized Apples supply chains and helped dramatically increase margins for companys products. But now there will be much more responsibilities lying on his shoulders. This year Apple became second most valuable company in the world just after Exxo Mobil. And with a 76 billion dollars of cash in their hands, which even exceeds U.S governments operating cash balance there is huge opportunities all around. We think that we can expect that we will set to see not one or two mergers & acquisitions in upcoming of Jobs resignation cost 523.29 $ and as of today (September the 1st) they costs 532.5 $ and it is 1.76% rise. We can confidently say that investors see Tim Cook as a rightful substitution for Steve Jobs and that companys face and policy wont change dramatically because of the loss of the one of the greatest entrepreneurs of our time. So for the end we would like to conclude that the new era of Apple Inc. is coming and it will be a magnificent experience to observe how Apple will evolve onwards. One of the most exciting thing for me in future is to see if Tim Cook will be as remarkable in new product presentations as Steve Jobs was or he will change this extraordinary feature of Apple Inc. to something else. By Tomas Matulionis

years. Especially considering that the rivalry

between two giants, Apple and Google, is rising each day. How do investors see this change of power within Apple itself? Apple stocks at the day

Board updates
Here the iFund board will post weekly updates on what has been done or achieved during the week by the board. So give it up for the first week recap: 1. The presentation of the organization was held in SSE Riga premises in Soros auditorium; A proposal to Swedbank has been made (was made already a few weeks ago, but anyway) for iGame Gold Sponsorship. Awaiting reply...; Chief Investment Game organizer met with iGame IT developers to discuss organizational matters and possible improvements; A board meeting was held where the necessary positions for associates from both Y1 and Y2 have been acknowledged. Soon the app. process will open, so dont miss it! During the board meeting, prospective sponsors were detected and will soon be approached Agreement on making several improvements to the ifund.lv website and linking it to Facebook.

2.

Upcoming Events
Seminar 1: Introduction to Financial Markets I
September 8, 16:00 17.00 in Soros (TBA)

3.

Seminar 2: Introduction to Financial Markets II

September 19, 16.00 17.00 in 303 or 311 (TBA)

4.

Seminar 3: Introduction to Financial Markets III

5.

September 29, 13.00 14.00 in 311 (TBA)

Movie Night: Wall Street

6.

October 3, 17.00 19.00 in Soros (TBA)

SSE Riga Investment Fund

Strlnieku iela 4a, Rga LV-1010, Latvia Ifund.sseriga@gmail.com http://www.ifund.lv