U.S. President Barack Obama outlined significant tax reforms in his 2012 State of the Union address Tuesday night. As expected, tax reform was a main theme in the president's speech, mentioned 34 times. The White House today (Wednesday) fleshed out in detail the tax reforms aimed to achieve the president's goals of reviving U.S. manufacturing […]
Archives for January 2012
January 2012 - Page 3 of 11 - Money Morning - Only the News You Can Profit From
Five Things Obama Didn't Want You to Hear in His State of the Union
Seeking to put the best possible spin on his message, President Barack Obama took some liberties with the truth in his State of the Union address.
Although the president never actually lied, he repeatedly left out facts that contradict his claims of success.
President Obama hadn't yet left the House chamber when the reality check started. And it didn't take long to find some pretty big the holes in the State of the Union address.
To continue reading, please click here...
Obama's Trade Enforcement Unit and the Looming Trade War with China
U.S. President Barack Obama in Tuesday's State of the Union speech called for the creation of a Trade Enforcement Unit to end unfair practices hindering U.S. trade growth – especially tactics employed by China. "I will go anywhere in the world to open new markets for American products," the president said in his annual address […]
Restoring the Dream: State of the Union Pitches an Economy "Built to Last"
In a speech before the nation last night, President Obama's State of the Union Address spoke of a new American economy that is "built to last."
Of course, in the wake of the dot com bubble, the subprime mortgage fiasco and the funny money of the last decade, that's certainly an objective all of us can heartily agree with.
The American Dream is in need of repair.
The good news is that with one exception the President's State of the Union Address did outlined some useful steps that could be taken to help boost the economic recovery.
Naturally though, I think the details could use a little tweaking!
The Worthy Goals in the State of the Union Address
To start off with, the President outlined his primary strategy to help bring manufacturing jobs back to the United States. That's an entirely worthy objective.
What's more, this goal actually has a decent chance of being met— at least partially.
Here's why…
Chinese manufacturing costs have been rising rapidly over last few years, since its workforce is now demanding a larger share of the profits in the country's new found prosperity.
Also the President was correct when he claimed that there are several intrinsic advantages to manufacturing here in the states. As a result, the cost equation has been swinging pretty rapidly in favor of bringing manufacturing jobs back home.
His example of the Master Lock plant in Milwaukee running at full capacity for the first time in fifteen years is just part of a greater trend.
The President's proposal to lower corporate tax rates, while eliminating the loopholes that allow companies like General Electric to pay almost no U.S. taxes, will also undoubtedly help to bring even more manufacturing jobs back home.
Not only is this sensible, the President's proposal is politically clever as well.
After all, it's always pretty smart to call for something already starting to happen. That way your success is almost guaranteed!
Unfortunately, some of the President's other ideas were less satisfying…
Click here to continue reading...
Four Natural Gas Companies Investors Can Buy Right Now
Natural gas companies are hurting – there's no doubt about it. But that doesn't mean natural gas companies are bad investments.
In fact, some of these companies are currently on the bargain rack. You just have to know where to look.
Take EOG Resources Inc. (NYSE: EOG), for instance.
Traditionally known as a natural gas producer, EOG has reinvented itself as a major oil producer.
It's still heavily involved in the natural gas market, but the company also has managed to increase its total liquid oil production by 49% to 130,000 barrels per day.
Chief Executive Officer Mark G. Papa said he expects to reach 200,000 barrels per day this year. That would make EOG the second- or third-largest oil producer in the United States.
The effects of this transformation are evident in the company's earnings.
After taking a third-quarter loss of $70.9 million in 2010, EOG reported net income of $541 million for the third quarter of 2011.
That's not all. EOG's potential for growth is outstanding, since it has huge oil shale reserves. The company is the largest oil producer in both North Dakota's Bakken Shale and the Eagle Ford Shale in South Texas.
These two shale oil fields have played a key role in ramping up U.S. oil production over the past few years. They each have an estimated 4 billion barrels of recoverable reserves.
Earlier this month, analysts from Goldman Sachs Group Inc. (NYSE: GS) raised their EOG share price target to $118, while RBC Capital Markets (NYSE: RY) analysts set their target at $119. Those targets estimates represent a 13% to 14% premium from yesterday's (Tuesday's) closing price of $104.55.
And that's just one natural gas company with a strong investment pedigree.
Here are three others…
To continue reading, please click here...
Options Strategy: How a Home Depot (NYSE: HD) Straddle Could Provide Investors Lower Costs, Higher Returns
After more than two years of false starts, the battered U.S. housing market may have finally found a bottom.
If so, that prospect offers options investors a chance to earn higher returns on lower costs using a Home Depot (NYSE: HD) straddle. (More on that later…)
In fact, here are just a few of the latest statistics that lead me to believe housing will slowly begin to recover over the next four months…
- Sales of existing U.S. homes rose by 5% in December to a seasonally adjusted rate of 4.61 million.
- Rates for all types of mortgage loans hit record lows this month, with the benchmark 30-year fixed mortgage being offered at 3.88% last week.
- Both housing starts and applications for new residential building permits rose steadily throughout 2011, hitting respective seasonally adjusted annual rates of 657,000 and 679,000 in December, both up more than 250,000 from 2009 lows.
- And finally, last Wednesday, members of the National Association of Home Builders (NAHB) expressed their highest level of confidence in the housing market since June 2007 – the fourth consecutive month that sentiment levels have risen.
So, given the increasingly positive outlook for the housing market, the real question becomes: How can investors use this opportunity to their advantage in the first half of 2012?…
The answer is an options strategy that offers lower risk and potentially higher rewards.
How to the Play the Housing Market Bottom
Now typically, stocks that rise or fall with the tides of the housing market fall into three categories:
To continue reading, please click here...
State of the Union Excerpts Outline Speech Focused on Income Inequality, Job Creation
According to excerpts released by the White House, U.S. President Barack Obama will deliver an ambitious speech when he addresses the nation at 9 p.m. ET today (Tuesday) in the annual State of the Union. His plans for 2012 will focus on job creation, rebuilding the middle class, U.S. government spending, and tax reform. State […]
List of Apple Inc. (Nasdaq: AAPL) Suppliers
In a fortuitous turn of events for investors, notoriously secretive Apple Inc. (Nasdaq: AAPL) has released a list of more than 150 of its suppliers.
But for investors, the list of suppliers is a potential a treasure trove. Although many of the names on the list were known, some are new and represent possible ways to play Apple without paying the premium for Apple stock.
Apple was compelled to release the list of suppliers to mollify critics who accused the Cupertino, CA,-based company of being complicit in questionable workplace practices in parts of its Asian supply chain.
According to Apple, the list of suppliers represents "97% of Apple's procurement expenditures for materials, manufacturing, and assembly of Apple's products worldwide."
To continue reading, please click here...
What's Different About this Week's FOMC Meeting
The two-day Federal Open Market Committee (FOMC) meeting starting today (Tuesday) marks a historic shift in how the U.S. Federal Reserve communicates its policy decisions with the public. The changes center on disclosing individual FOMC members' interest-rate forecasts and economic projections. It may also release an agreed target for inflation. "It's a significant innovation," Jeremy […]
Ratio Analysis: $DAX/European Financial Index Going Parabolic?
by Albertarocks
Global Economic Intersection Article of the Week
Executive Summary
Recently I've tuned my focus to Europe in order to try to get a better handle on exactly what the hell is going on over there. Well actually, whatever is going on over there will probably forever remain a mystery to all of us… hidden under so much paperwork, lies and spin that we'd never be able to get to the bottom of it. Nonetheless, I want to know if there are any clues we can garner from across the pond if we just focus a little harder and do some meaningful analysis? Yes, I think there are.
We begin by putting together a chart of the DAX as if it were priced in units of the Dow Jones Europe Financials Index. This would be similar to pricing the S&P 500 in terms of the BKX. The only difference is that the study which follows is purely European. The first picture we're going to look at is the monthly chart of the $DAX:$E1FIN (the DAX divided by the Dow Jones European Financial Index). We have to look at the big picture first in order to see if there is in fact any pattern or relationship that suggests reason to investigate further. And immediately, we see that there is. The result is a ratio which in turn can be compared directly to activity within the DAX itself. I've also added the European Financials Index as a separate entity in its own panel in order that we can look at all 3 at the same time and in the same context. I realize it's a rather long lanky chart, but it contains a ton of information and there's not much point in presenting a chart that lacks useful data:
The first thing we want to know is whether or not any major top or bottom in European equities (using the DAX as the most logical proxy for all) coincides with a major change in the ratio. In other words, was there any sort of major shift in the ratio at the time that the DAX made a sudden change in trend? If so, which of the components contributed the lion's share to that shift? We also want to know what happened within the European financial sector at the time of that abrupt change. In the pursuit of studies like this, occasionally it becomes apparent that there doesn't seem to be any such relationship occurring at all. Indeed, there have been times when I have put together a study similar to this with the expectations that some sort of meaningful correlation would pop right off the chart, only to find that there in fact was none. I can occasionally be surprised by such a revelation but hey… if I'm on the wrong track, I recognize that in a hurry, dump it and move on to the next one. But of course, when we're talking about the German stock market and the entire European financial district in the same sentence, surely there has to be a meaningful relationship that can lead to clues? And of course… there is.