Archives for March 2011

March 2011 - Page 6 of 10 - Money Morning - Only the News You Can Profit From

Retirement Concerns Plague U.S. Baby Boomers

Retirement used to be synonymous with leisure and travel. Americans believed that decades of hard work and thriftiness would make for a prosperous and successful life they could enjoy after their jobs – the "American Dream."

Now retirement doesn't evoke the same sense of tranquility for most U.S. workers. Instead, economic anxiety has taken its toll.

Americans used to ride a "three-lane highway" into retirement: a traditional pension, Social Security, and individual savings plans, like 401(k)s.

But the recent economic downturn packed a devastating punch to many 401(k) accounts, U.S. households have dipped into savings to make ends meet, and debt-laden federal, state and local governments will have trouble meeting pension and Social Security obligations.

As the first of the 78 million U.S. Baby Boomers start to retire, most of them worry they don't have enough retirement savings to support them in their post-work years.

Read More…

Japan Nuclear Crisis: New Power Plant Construction Renaissance in Peril

Concerns revived by the nuclear crisis in Japan could well reverse a renaissance in new power plant construction in many countries, while design upgrades to prevent similar reactor failures will make those that are built more expensive.

The 9.0 earthquake and resulting tsunami that struck northeastern Japan on Friday have caused a series of catastrophic failures in several nuclear reactors at the Fukushima Daiichi plant. Attempts to cool overheating fuel rods have led to four explosions, giving rise to fear over how much nuclear radiation may have escaped.

As the crisis has deepened, so has its potential to inflict lasting damage on the nuclear industry.

Read More…

What Are Your Five Biggest Worries?

Earthquakes and nuclear meltdowns in Japan, uprisings in the Middle East, scary job prospects, a gargantuan federal deficit, zooming gasoline prices, and soaring food prices … the list of economic challenges facing the world is long and just seems to get longer.

It's tough to remember the last time U.S. consumers and investors faced so much uncertainty. But the worst thing is that there's no clear end in sight.

No wonder consumer confidence remains shaky, at best.

Read More…

Japan's Stock Market Plunges as Export Disruption Threatens Global Supply Chain

Japan's stock market fell the most in two years yesterday (Monday) in the aftermath of Friday's devastating earthquake, the biggest in Japanese history. Rolling blackouts and factory damage threatened exports for some of the country's biggest companies, many of which play a key role in industries' global supply chain.

The Nikkei 225 stock index closed down 6.2% yesterday at 9,620.49, after falling 1.7% Friday.

"The market is pricing in a better understanding of the enormity and complexity of the two natural disasters that struck Japan," Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., told Bloomberg News. "The immediate impact will be felt through lower global aggregate demand, disrupted supply chains and funds flows into Japan."

Read More…

Insights on Interest Rates: Why Treasury Bonds Are No Longer the Market Bellwether

Divining the direction of interest rates used to be a lot easier.

With the Federal Funds Rate, policymakers at the U.S. Federal Reserve would indicate precisely what they wanted the overnight lending rate between big banks to be. And the prices of U.S. Treasury securities of all maturities fell in line like obedient soldiers.

But things have changed.

Forget about watching the Fed Funds Rate now. That central bank benchmark has ranged between 0.00% and 0.25% for a couple of years now. Going forward, i t's not going to be an indicator of interest-rate movement, because it's not going to change much.

Sure the Fed wants it there. But more to the point, the Fed Funds Rate remains in that range because all the too-big-to-fail (TBTF) banks like Citigroup Inc. (NYSE: C) and Bank of America Corp. (NYSE: BAC) are far bigger now, are lending less, and have huge excess reserves on which they'd love to earn an overnight profit. So for now and for the foreseeable future, they'll be plenty to lend between giant "TBTF" club members.

And t hanks to its "quantitative-easing" (QE) strategy, the Fed is essentially monetizing the U.S. Treasury's debt by buying in the secondary market from primary dealers like Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) the equivalent of every new issue that comes to market.

The net result: There's no real gauge of demand because the Federal Reserve has hijacked the free market.

To understand the workings of the "new" interest-rate market, please read on…

Read More…

Buy, Sell or Hold: Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is a Mining Play with a Major Upside

Sometimes the market offers investors a rare chance to buy shares of a great company on a dip. That's precisely the opportunity we're getting right now with Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX).

The current market volatility is giving investors with an eye toward long-term investments a great chance to buy shares in a world-class company.

FCX is one of the best-run global mining companies and a great way to gain exposure to gold and copper. So it's time to "Buy" Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) (**).

And if scooping up a top-notch commodities play on a pullback isn't reason enough, here are six other reasons to buy FCX.

Read More…