FORTUNE - Last Updated: August 4, 2008: 3:04 PM EDT

Lower prices mean less pain at the pump - but tougher times ahead for the economy.

By Colin Barr, senior writer

NEW YORK (Fortune) — Oil prices are falling sharply, and that’s good news. But not nearly as good as you might think.

No doubt the drop, down to $120 by mid-day Monday, gives strapped consumers relief at the gas pump. Prices have dropped below $4 a gallon and could be headed toward $3.50, going by trading in wholesale futures markets. Any decline will be welcomed by Americans struggling under the burden of falling house prices, rising layoffs and stagnant wages.

But falling oil prices also suggest that the recession the U.S. has so far avoided is well on its way, as consumers pull back from the spending spree that drove economic growth earlier this decade. A weakening economy will mean more layoffs, further pressuring already reduced spending.

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BUSINESSWEEK - Around the Street August 4, 2008, 5:55PM EST

What will Ben Bernanke & Co. do—and say—at the Fed Open Market Committee’s Aug. 5 meeting? Wall Street economists speculate

The Federal Reserve remains in a tricky position with respect to its Aug. 5 policy meeting. U.S. economic growth remains sluggish, and risks that the economy could tip into recession are significant. That would argue against any upward moves from the current Fed funds rate of 2.0%. But recent data reports show that inflation continues to gather strength, which ordinarily would prompt the central bank to consider tightening policy.

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FORTUNE - Last Updated: August 4, 2008: 2:33 PM EDT

The star analyst tells Fortune magazine that housing woes will force banks to keep taking writedowns.

By Jon Birger, senior writer

NEW YORK (Fortune) — The credit crisis is far from over, star analyst Meredith Whitney tells Fortune magazine in its upcoming issue.

Whitney, who audaciously - and correctly - predicted last October that Citigroup (C, Fortune 500) would have to cut its dividend, tells the magazine that banks in general today are still facing much bigger credit losses than what they’ve reported so far.

The Oppenheimer & Co. analyst warned last year - and continues to warn today - that the “incestuous” relationship between the banks and the credit-rating agencies during the real estate bubble will have a long-lasting impact on banks’ ability to recover.

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InformationWeek - Aug 4, 2008 03:15 PM

Posted by John Foley

In deciding to locate new data centers in Iowa, Google (NSDQ: GOOG) and Microsoft (NSDQ: MSFT) are benefiting from incentives offered for years to manufacturing companies like John Deere, which has 10 manufacturing plants in the state. It turns out that, in addition to plentiful land and affordable electricity, the Hawkeye state gives hefty tax breaks.

Under Iowa’s tax structure, large manufacturing companies pay no sales tax on the equipment used to build and operate their facilities or on the electricity that powers them. Originally designed to bring blue collar jobs to the state, Iowa’s tax rules were amended for Google a year ago, and more recently for Microsoft. Not all state residents are thrilled with the idea of giving tax breaks to multibillion dollar companies, but the strategy is obviously working. “We’re just trying to equate the new economy with the old economy,” explains Mike Tramontina, director of Iowa’s Department of Economic Development.

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BUSINESSWEEK - Special Report August 4, 2008, 12:01AM EST

A major shift in the way companies obtain software and computing capacity is under way as more companies tap into Web-based applications

by Rachael King

At first, just a handful of employees at Sanmina-SCI (SANM) began using Google Apps (GOOG) for tasks like e-mail, document creation, and appointment scheduling. Now, just six months later, almost 1,000 employees of the electronics manufacturing company go online to use Google Apps in place of the comparable Microsoft (MSFT) tools. “We have project teams working on a global basis and to help them collaborate effectively, we use Google Apps,” says Manesh Patel, chief information officer of Sanmina-SCI, a company with $10.7 billion in annual revenue. In the next three years, the number of Google Apps users may rise to 10,000, or about 25% of the total, Patel estimates.

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InformationWeek - August 4, 2008 03:15 PM

The Patent and Trademark Office’s recent narrowing of what qualifies as a patentable software innovation may help Google in this case but could harm the Internet giant in other lawsuits.

By Thomas Claburn

Google last week was sued by Web Tracking Solutions and Daniel Wexler for providing accounting information for its Internet ad publishers.According to a complaint filed on July 31, Google (NSDQ: GOOG)’s AdSense service violates Wexler’s patent, “Third-party on-line accounting system and method therefor,” which was filed on Oct. 11, 1996, and granted Sept. 28, 1999.

The patent describes a way to provide online accounting and statistical information about ads served by a third party — Google, for example — to a Web site on behalf of advertisers.

This marks the fourth time Google has been sued for patent infringement in 2008. In 2007, the company was named in 13 patent suits.

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Sillicon Alley Insider - Peter Kafka | August 4, 2008 3:45 PM

Facebook employees are in an enviable position: Each of them owns a small piece of a company that’s worth billions of dollars, which means each of them is looking at the prospect of a windfall — one day. But until Facebook sells or goes public — and neither prospect looks imminent — it’s hard for them to do much with their paper wealth.

Solution: Create a way for employees to sell a small portion of their shares at a pre-determined price. That’s what VentureBeat’s Eric Eldon says Facebook intends to do: He says workers will be able to sell up to 20% of their vested equity, at a $4 billion valuation this fall.

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