March 2011 - Money Morning - Only the News You Can Profit From
BATS Global Markets to Challenge NYSE, Nasdaq for Stock Listings
Just as a wave of mergers and acquisitions among the world's major bourses has raised regulatory concerns, a feisty challenger, BATS Global Markets, has announced plans to enter the stock listings business by year's end.
As an Electronic Communication Network (ECN), BATS currently can conduct trades of stocks listed on other exchanges but has no stock listings of its own. As another primary U.S. market, BATS would compete directly with NYSE Euronext (NYSE: NYX) and Nasdaq OMX Group Inc. (Nasdaq: NDAQ) for listings of publicly traded U.S. companies.
Its timing couldn't be better. A merger proposed in February between the Deustche Börse AG and the NYSE Euronext would create an exchange nearly four times bigger than any rival. News of that deal drove Nasdaq to consider a counter-bid for NYSE Euronext, which if successful would leave just one U.S. listing market.
Fast Casual Restaurants Slice Off Bigger Portion of Dining Dollar
Led by the rapidly growing fast casual segment, the restaurant industry should see significant sales increases in 2011 after getting rocked by the recession.
Consumers who were worried about the economy cut back on dining out in 2008 and 2009. But with modest gains in 2010 pointing to better days ahead, industry analysts believe this year could be the best for restaurants since 2007.
"Consumers are finding some retail therapy in things like eating out," John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC inBoston told Bloomberg. "They may not be ready for that two-week vacation inEuropeyet, but they'll go to a restaurant once every couple of weeks. It's an affordable luxury."
- How to Profit from Hottest M&A Activity Since 2007
Libyan Rebels May Oust Gadhafi, but the Fight Against Higher Oil Prices is Lost
Information has surfaced that forces opposing Libyan leader Moammar Gadhafi secured the major oil towns of Brega and Ras Lanuf (both port cities on the Mediterranean).
The Libyan rebels now control oil fields producing between 100,000 and 130,000 barrels a day, and they say that will quickly increase to 300,000, with exports renewing in a week. That higher figure would account for about 19% of daily exports from Libya before the unrest started.
To the extent that anti-Gadhafi forces can secure the oil fields presently under their control, at least some of those exports should begin to flow again.
Federal Reserve Report: Central Bank's Record $82 Billion "Profit" is a Red Flag Warning
If the record $81.7 billion in profit that the U.S. Federal Reserve reported for 2010 was turned over to taxpayers directly, there's no doubt it would have some "stimulus" benefit – after all, a $270 check for every man, women and child in the United States ain't chicken-feed.
But since that money actually just "disappears" into the coffers of the U.S. Treasury, it does very little good for anybody.
Still, since the pretax earnings of Goldman Sachs Group Inc. (NYSE: GS) never got above the $12 billion mark, it's worth taking a closer look at the Fed's reported profits to see just what's going on – especially since we taxpayers will be called upon to bail out the central bank, once the inevitable losses arrive.
And once you take the time to investigate, you'll quickly realize two things – this "profit" isn't what it seems. And you should be worried – very worried – about what's to come.
U.S. Consumers Get Creative to Handle High Food and Fuel Prices
There's no question the staggering rise in food and fuel prices will eat away at U.S. households' income in coming months.
But there is the question of how U.S. consumers will cope with those increased costs – especially when so many are already worried about their jobs, savings, investments and retirement.
With gas prices nearing $4.00 a gallon, and the consumer price index (CPI) in February for food-at-home up 2.8% from 2010, U.S. consumers are facing an economic double whammy. As food and fuel expenses make up a larger slice of household budgets, U.S. consumers have to evaluate just which goods are worth buying.
Montana resident Myriam Garcia some days has to choose between filling up her truck with gas or buying food.
Long-Term Investing Strategies: The Final Four Ways to Invest in Global Demographic Trends
Stock-market icon Warren Buffett once said that "our favorite holding period is forever."
Clearly, if you want to be a stock-market winner, you need to find profit opportunities that offer a predictable, long-term payoff.
And one of the best ways to do that is to capitalize on global demographic trends.
The Death of the "Dollar Carry Trade"
By maintaining a F ederal F unds rate below the 0.25% level – and injecting $600 billion into the banking system through a second round of quantitative easing – the U.S. Federal Reserve has orchestrated a bubble-like surge in commodity prices, an uptick in global inflation and a historic resurgence in U.S. stock prices.
The low-interest-rate strategy has enabled the U.S. central bank to achieve another important objective – a massive depreciation in the value of the U.S. dollar.
There's only one problem with all these "successes" the Fed has achieved: If the dollar ever rebounds, this elaborate financial structure the central bank has engineered will be exposed for what it really is – a shaky arrangement that will collapse like the house of cards that it is.
The fallout from such a collapse could be widespread and painful – especially for investors who've been riding the so-called "dollar carry trade" to major profits.