We have some good news and some bad news. The bad news first: The U.S. Gross Domestic Product declined by 5.7% in the first quarter, compared with a drop of 6.1% last month. This was a slight improvement over the 6.3% decline in the fourth quarter. The last six months have been the weakest in the past 51 years. Pulling the economy down were plunging exports, business inventories and the collapse of spending for non-residential construction.

Now for the good news: Corporate profits surged 3.4% to $1.307 trillion, after plunging 16.5% in the fourth quarter. The financial sector led the way with a jump of 94.9% compared with a drop of 18% last quarter. It is believed that the massive stimulus spending has prevented the economy from spiraling downward any further.

As was reported in AP online, "Members of the Rockefeller family are pressuring Exxon Mobil (NYSE: XOM) to focus more on renewable energy. The family members, who say they are the oil giant's longest continuous shareholders, say Exxon is too focused on short-term gains from sky-high oil prices. They also argue splitting the roles of chairman and CEO will help the company be more flexible in the future."

Last time I checked, companies had a responsibility to provide value for shareholders, and no one has done it better than the oil giant. It has been producing record earnings quarter after quarter, and that is exactly what it is supposed to do. Corporations are not supposed to be politically correct organizations that throw money around at the latest fad. Maybe Exxon doesn't believe that there is a global warming problem? Or maybe it wants to see a lot more scientific evidence of the problem before committing billions and billions of dollars to research. If I were a shareholder, I would want management to take the exact approach that it has been taking. The fact that it is the most profitable company in the world means something. It should be commended for providing shareholder value.

In fact, Bloomberg has an article that says that ocean cooling will stop global warming. Moreover, the article indeed mentions that the authors tried to spin the article because of Exxon. "We thought a lot about the way to present this because we don't want it to be turned around in the wrong way," Keenlyside said. "I hope it doesn't become a message of Exxon Mobil and other skeptics."

Sounds to me that they are right to be skeptical.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/1/08

Corporate profits have slowed in Q3, and U.S. economic growth most likely slowed in Q4 as well, but analysts say talk of a recession may be slightly premature.

Corporate profits fell to an annual rate of $19.3 billion in Q3 as domestic earnings dropped by $41.2 billion, according to U.S. Commerce Department data. The U.S. economy is being hurt by sluggish retail sales and write-downs in the subprime mortgage sector; the two have been offset by strong earnings abroad, but the domestic side may outdo the international side in Q4.

"The earnings recession has already arrived,'' said David Rosenberg, North America economist for Merrill Lynch (NYSE: MER) in New York told Bloomberg News. "We are going to see an economic recession in '08.''

The Institute of Supply Management's manufacturing index for November 2007 totaled 50.8, above the consensus estimate, but slower than October 2007's reading of 50.9. Any reading above 50 indicates economic expansion.

Today Alcoa Inc. (NYSE: AA) announced some restructuring plans that will trim down (SELL) some under-performing consumer packaging and automotive castings divisions. It will be taking some charges to the tune of $845 million as well, and intends to gear up for expansion into higher margin areas. Alcoa also said it raised cash by selling its 7% stake in Chalco, the Aluminum Corp China ADS (NYSE: ACH) and bringing in $2 billion dollars on what was initially a $200 million investment -- "A ten bagger."

It is this latter decision that is not smart, and without further explanation from management I have to question selling a winner. If you look at all of the things that Alcoa did in the last 10 years you will find that the Chalco investment was the smartest, and more importantly, the most profitable, thing it has done. For many years Alcoa stock has been adrift. Since it sold the stock it has only gone up further and as I write these words and look at the price now, ACH is trading up over 5% more to $75.70.