Archives for July 2010

July 2010 - Page 10 of 11 - Money Morning - Only the News You Can Profit From

The "New" Global Energy Sector: "The Profit Opportunity of Our Lifetime"

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Oil prices will reach a record $150 a barrel, sending gasoline prices to $3.80 a gallon. Commercial nuclear power is making a comeback – but in "nuclear batteries," instead of in hulking power plants of the past. New global-warming regulations will turn air-pollution credits into financial assets that can trade like stocks or bonds. And China's zooming growth will turn the global energy sector upside down.

If this sounds like a view of the distant future – the global energy sector's own version of "Future Shock" – think again.

All of these "predictions" are becoming a reality, even as you read this. And while these transformative events will likely make the global energy sector more volatile and confusing than ever, they are also creating the largest wealth-creating opportunities that most investors will ever see, says Dr. Kent Moors, a career energy-sector consultant who works with governments and corporations throughout the world.

For all the details on Dr. Moor's energy-sector predictions, please read on...

Unemployment Report Shows Sluggish Recovery Will Take Years to Replace Jobs Lost in Great Recession

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Unemployment figures released Friday confirmed that the U.S. economy is still recovering, but they also showed it will take years to replace the 8 million jobs lost during the Great Recession. 

And until meaningful hiring takes place, consumers are unlikely to loosen their purse strings, the key to putting the economy back on track to full recovery.
Employment fell in June for the first time this year, reflecting a drop in federal census workers and a smaller-than-forecast gain in private hiring.

Payrolls declined by 125,000 as the government cut 225,000 temporary workers conducting the 2010 census, Labor Department figures in Washington showed. Economists projected a decline of 130,000, according to the median forecast in a Bloomberg News survey. Private employers added 83,000 to their payrolls.

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Australia Reduces Mining "Super Tax," Reviving Profitability of Resource Sector

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Australian mining companies declared a huge win today (Friday) when the government announced the proposed mining "super tax" would be reduced, prompting some companies to reactivate shelved projects and reopen merger and acquisition talks.

Australia's Prime Minister Julia Gillard agreed on a compromise plan that would reduce the planned tax to 30% of profits from iron ore and coal, and 40% tax on oil and natural gas, down from the originally proposed 40% tax on all resources. The new plan, called the mineral resource rent tax, would also raise the tax's trigger level to profits that exceed a 12% rate of return instead of 6%.

"The reduction in the headline rate is an amazing concession," John Robinson, chairman of Global Mining Investments Ltd., told Bloomberg. "It's certainly better than I had expected."

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U.S. Economy: Headed For a Second-Half Slowdown

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Constant stock market volatility, a crippled job market and the troubles plaguing the European markets are starting to take their toll on the U.S. economy. After the major market rally of 2009, is the U.S. economy headed for a second-half slowdown… or, worse, the dreaded double-dip recession? Read this report to find out exactly what’s in store for the U.S. economy…

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Misguided Policy Paving the Way for a Double-Dip Recession

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With unemployment still hovering near 10%, policymakers should be doing all they can to combat joblessness and reinvigorate a recovery that is showing signs of weakness.

But they're not.

Instead, they're reeling in stimulus measures and enabling a double-dip recession, simply for the sake of fiscal austerity.

The Labor Department is expected to report today (Friday) that the unemployment rate held steady at 9.7% in June, or worse, edged up to 9.8%. That would follow yesterday's (Thursday's) disappointing report that showed new claims for jobless benefits jumped by 13,000 to a seasonally adjusted 472,000. The four-week moving average, which smoothes out volatility, rose by 3,250 to 466,500 – its highest level since March.

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Money Morning Mailbag: Emergent Natural Gas Market Improves U.S. Fleet Vehicles

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The global energy sector is shifting which means huge changes lay ahead for the U.S. natural gas market. Dr. Kent Moors, a career energy-sector consultant who works with governments and corporations throughout the world, says the United States' fragmented natural gas market is "about to become one global market, operating at the speed of light."

U.S. natural gas will play a major part in reducing greenhouse gas emissions by replacing older, inefficient coal plants. Its use is likely to double to 40% of the energy market over the next several decades, according to a study by the Massachusetts Institute of Technology.

The abundance of natural gas – especially shale gas, an unconventional source packed tightly in rock formations – in the United States has driven down natural gas prices, making the fuel more desirable. Shale gas has grown to 15%-20% of the U.S. natural gas output, and as companies design better drilling technology, shale gas reserves will be more easily attainable.

"Natural gas is becoming sexy again, with all this new technology to get the gas out of the shale," Kim Hill, director of the Sustainable Transportation and Communities group for the nonprofit Center for Automotive Research told The New York Times.

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High-Yield Hangover: Cash Pouring Into Junk-Bond Funds May Signal Stormy Seas For Stocks

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Investors are plowing money into junk-bond funds, which leveraged borrowers at private equity funds are using to pay dividends to themselves and to buy out more public companies.

The huge-and-growing overhang of debt-laden portfolio companies that private-equity shops want to take public – when combined with additional leveraged deals in the pipeline – will keep a lid on U.S. stock prices and could even spark a sell-off for stocks in both the United States and Europe.

Let me explain…

To understand how this push into junk bonds is magnifying stock-market risk, please read on...

Slowing Factory Output Suggests Global Economic Recovery May be Weakening

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A slowdown in manufacturing growth spread across the globe in June, as factory output fell in China, Europe and the United States, suggesting the global economic recovery may be losing steam.

But the overall level of factory activity continued to expand, suggesting that manufacturers may be experiencing a return to more normal rates of growth rather than heading for a contraction.

In China, manufacturing growth slowed more than economists had forecast, and a gauge of factory output in the 16-member euro region fell for the second consecutive month, two surveys showed.

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Canada: The World's Economic Compass

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If you're looking for a reliable investment, look no further than Canada.

It's strange, but with so much talk about troubles in the United States, Europe, China and the Middle East these days, one of the best-performing economies in the world is often overlooked.

Of course, that's finally started to change since the financial crisis has exposed our northern neighbor as a model economy – something the Group of 20 (G20) summit highlighted last weekend.

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