Archives for May 2010

May 2010 - Page 9 of 9 - Money Morning - Only the News You Can Profit From

Taipan Daily: Could Continent-Wide Bank Runs Collapse the Eurozone?

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The eurozone's woes are giving us a preview of what could eventually happen in the United States (but not before Europe is engulfed first). As fears of sovereign debt crisis mount, the debt "contagion" spreads. It is not just Greece that has investors afraid, but Portugal. And Spain… and Italy… and so on.

The problem is classic, and long ago highlighted by Austrian economics. Building up a lot of debt, to make a slightly crass analogy, is like putting on a bunch of weight. It's hard work getting the debt off – the same as it is taking weight off.

The way to lose weight is to eat right and exercise. The way to get out of debt is to cut back on spending and increase productivity.

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$147 Billion Bailout Package for Greece Won't End European Debt Crisis

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In an effort to stabilize the widening European debt crisis, the International Monetary Fund (IMF), together with Eurozone countries, agreed to extend an unprecedented $147 billion (110 billion euro) bailout package to Greece in return for deep cuts to the country's budget.

Under the three-year agreement reached late Sunday, Greece would receive $105 billion (80 billion euros) in loans from other Eurozone members and $40 billion (30 billion euros) from the IMF. The planned rescue is the largest ever attempted by the IMF and a first for the 16-member Eurozone. It still requires final approval from national governments.

Also, the European Central Bank (ECB) said on Monday it would indefinitely accept the country's debt as collateral regardless of its credit rating. The ECB didn't release figures, but the value of Greek assets used as collateral in its liquidity-providing operations is thought to be worth tens of billions of euros.

Many observers felt the huge bailout was designed not only to support Greece, but to shore up confidence in the euro, which has come under fire by currency traders. Just a few weeks ago, EU countries offered only $40 billion (30 billion euros) to help Greece.

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British General Election: Even the Winners Will be Losers

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The British general election campaign reaches its climax on Thursday, and at this point appears to be anybody's game. The most likely outcome is a "hung parliament" in which no party has a majority and a government is formed through backroom haggling.

However, after looking yet again at the state of the economy in my native Britain, I'm forced to ask a simple question: Why would anybody want the job?

To find out just what the future holds for the British economy, read on...

With a Record Amount of Cash on Hand These Companies Are Delivering Dividends

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Dividends are one of the most overlooked ways for investors to notch big gains in their portfolio. And with earnings for companies in the S&P 500 surging 176% in the fourth quarter of 2009, more and more companies are using this as an opportunity to reward their investors. Read this report to find out what stocks could bring much needed income to your portfolio.

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United, Continental Merge Into World's Largest Airline

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United Airlines parent UAL Corp. (Nasdaq: UAUA) and Continental Airlines, Inc (NYSE: CAL) announced today (Monday) that they plan to merge and create the world's largest airline in a stock swap valued at $3.17 billion.

The merger is the is the biggest airline deal since Delta Air Lines, Inc. (NYSE: DAL) bought Northwest Airlines Corp. in 2008, and it further demonstrates how an industry plagued by losses has devolved into a pattern of consolidation.

The "merger of equals," as described by the companies, would top Delta as the biggest global carrier, have combined annual revenue of $29 billion, and $7.4 billion in unrestricted cash. The deal should yield cost savings of $1 billion to $1.2 billion by 2013.

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Full Cost of Gulf Oil Spill Just Beginning to Surface

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As oil soiled the shores of Louisiana over the weekend, the costs of the oil spill in the Gulf of Mexico are just beginning to surface.

The effects of the spill, which may prove to be bigger than the 1989 Exxon Valdez disaster in Alaska, are proving to be widespread–and costly.

The oil threatens one of the world's richest fisheries, and could decimate entire species of wildlife and their habitat, while convincing the millions of tourists they attract to take their vacation dollars elsewhere.

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Buy, Sell or Hold: Altria Group Inc. (NYSE: MO) - The 'Sin Stock' You Have to Own

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With more than 1 billion smokers worldwide, it is hard to conceive that companies selling cigarettes would not be extremely profitable.  In addition, the majority of people who are smokers also tend to be alcohol consumers. One company that services both of these vices is Altria Group Inc. (NYSE: MO). 

Altria Group is a holding company; its wholly owned subsidiaries consist of Phillip Morris USA Inc., U.S. Smokeless Tobacco Co. (prior to 2001 it was known as United States Tobacco Inc.), John Middleton Co. and Phillip Morris Capital Corp.

On Jan. 6 2009, Altria Group purchased UST Inc. in a $10 billion deal that gave the maker of Marlboro cigarettes an entrée into the "smokeless tobacco" market, thanks to UST's ownership of the Skoal and Copenhagen brands.

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European Debt Crisis Raises Caution Flags But U.S. Economy Won't Be Derailed

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Stocks somersaulted into the red early last week in the wake of European debt downgrades, rising revulsion over the prospect of a bailout of Athens and a broad re-pricing of risk. Breadth was negative, the number of new highs shrank and number of new lows swelled. Financials tumbled and retailers stumbled. Caution flags are rising.

Click Here to Read More on how European Debt Will Affect the Markets

Downgrades Crush Goldman Sachs Stock On News of Criminal Investigation

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Goldman Sachs Group, Inc (NYSE: GS) fell 9.39% Friday after being downgraded on news released Thursday that federal prosecutors started a criminal investigation into whether Goldman committed securities fraud.

Standard & Poor's Financial Services LLC downgraded Goldman to sell from hold and lowered its price target to $140 from $180.

"Though traditionally difficult to prove, we think the risk of a formal securities fraud charge, on top of the SEC fraud charge and pending legislation to reshape the financial industry, further muddies Goldman's outlook," S&P analysts wrote in a note to clients Friday morning.

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