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Global Markets

Dubai World May Ask Banks to Take 20% "Haircut," Delay Payments to Solve its Debt Bomb

Dubai World may ask banks to take a so-called 20% "haircut" from the face values on their loans and stretch out loan maturities when it presents a restructuring plan this month. The banks may be able to avoid the haircut if they allow the state-owned investment firm to stretch payments for as long as 10 […]

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How to Profit From the "Fertilizer Wars"

There's nothing like scarcity and supply disruptions to fuel violent price spikes. And there's nothing like the basic human needs for food and water to light that fuse.

Today's world food supplies run on razor-thin inventories.

While the food riots of 2008 have all but disappeared from our short-term memories, the threat of them returning grows stronger with every passing day.

According to the World Bank, food prices increased 83% between February 2005 and February 2008. In April 2008, when the United Nation's World Food Programme warned that a "silent tsunami" of hunger was sweeping the globe because of soaring food prices, it was more than just a clever sound bite tossed off by a bureaucrat: It was a warning that the world's poor were being squeezed as increasingly higher portions of their family incomes were being spent on the food they required for their very survival.

Improved fertilizers will be a key to the solution of this problem. And they won't just promote crop growth – savvy investors who fertilize their portfolios will be pleased with their profit harvest.

Let me explain …

To discover how to profit from zooming fertilizer prices, please read on….

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China Draws Plan to Reduce Risk While Continuing Economic Growth

Chinese Premier Wen Jiabao on Friday pledged to maintain economic growth of at least 8% in 2010, while gradually drawing down government spending and taking measures to guard against inflation and potentially devastating asset bubbles.

The remarks came during Wen's annual report to the National People's Congress in Beijing – which is the equivalent of the United States' State of the Union speech – and they highlight the central government's determination to promote responsible levels of growth.

The call for 8% annual economic growth is the same goal that has been maintained since 2005 – and one that was easily passed last year with the implementation of a sprawling $586 billion stimulus package.

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Six Ways to Profit as Brazil's Economy Takes Off

In many ways, Brazil offers some of the best prospects among emerging markets and deserves to be a core holding in any international portfolio.

Brazil's economy had only a shallow recession and is now recovering nicely. Its market has been one of the best performing since Dec. 31, 2008, and both inflation and the budget deficit remain under control.

Yet one can be only moderately bullish – and I'll explain why.

To find out how to profit from Brazil's bullish prospects, read on...

Greece Cutting Back to Court EU Favor

Greece unveiled its third austerity plan Wednesday and was met with praise from the European Union (EU), European Central Bank (ECB), and the International Monetary Fund (IMF), but hostility from the Greek public.

The plan consists of spending cuts and tax increases that will cut the budget deficit by $6.5 billion, and help Greece to reduce its current deficit to 8.7% of gross domestic product (GDP) from 12.7%.

"This was a necessary decision. It was not a matter of choice," said Greece's Prime Minister George Papandreou. "It was a matter of survival for our country, allowing it to breathe and break free from the clutches of speculative forces."

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Did Hedge Funds Conspire to Devalue the Euro?

The Department of Justice is investigating whether several prominent hedge funds conspired to drive down the value of the euro as the Greek debt crisis left the currency vulnerable to sophisticated trading methods employing credit default swaps and other derivatives.

Likewise, the European Commission yesterday (Wednesday) said it would examine trades in sovereign credit-default swaps (CDS) related to the Greek crisis, which has driven the euro lower and prompted officials to warn hedge funds against trying to profit from the region's debt crisis.

The Justice Department's antitrust division "has opened an investigation into agreements among various hedge funds that trade euro contracts," including contracts to trade euros in the "cash or the derivatives market," a person familiar with the letter told The Wall Street Journal.

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Australia Increases Rates, Canada Stays Steady as Both Cast Wary Eyes Toward Inflation

Canada and Australia, two resource-rich nations that are recovering quickly from the global recession, yesterday (Tuesday) reaffirmed interest rate policies as both promised to remain vigilant about rising inflation.

The Reserve Bank of Australia (RBA) raised its cash rate target by a quarter of a percentage point to 4.00%, while the Bank of Canada (BOC) kept its benchmark interest rate at record lows. Both central banks said inflation and economic output have been higher than policymakers expected.

The target rate for overnight loans between commercial banks in Canada will remain at 0.25%, the same level it's been since April 2009, exactly in line with predictions by 22 economists surveyed by Bloomberg News. The central bank also repeated a pledge to leave it unchanged through June unless the current inflation outlook shifts.

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Prudential-AIG Deal Another Case of Corporate Empire Building

To inattentive observers, the recent announcement that the British insurance company Prudential PLC (NYSE ADR: PUK) would pay $35.5 billion for American International Group Inc.'s (NYSE: AIG) Asian insurance operation, AIA, might seem like just another belated expansion of the old British Empire – a strange contrast to the sale of the premier British chocolate company Cadbury PLC (NYSE ADR: CBY) to Kraft Foods Inc. (NYSE: KFT) last month.

Yet in reality both deals are examples of Empire-building that for shareholders is much more dangerous than the benign British variety – Empire-building by corporate management that runs contrary to capitalist ideals.

To read more about why the Prudential-AIG deal contradicts capitalism, click here...

Brazil's Stock Market is Heating Up at Just the Right Time

With risk mounting in other places around the world, Brazil's stock market is heating up at just the right time. The country's benchmark Bovespa Index has risen for four straight days since hitting its cheapest level since May last week.

What's more is that Brazil's stocks are poised to surge even further as its economy storms back from recession and investment firms rush to cash in on the country's upside.

"The investment environment is probably the best in 20 years," Geoffrey David Cleaver, who manages a $500 million private equity infrastructure fund at the Sao Paulo unit of Banco Santander SA (NYSE ADR: STD), said last week at an event in New York.

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India Says Economy Will Grow by 8.75% This Year, but Obstacles Remain

The Indian economy will grow by as much as 8.75% in the coming fiscal year, the country's finance ministry predicted on Thursday. But concerns about inflation and a growing deficit have some analysts worried.

The annual Economic Survey released in parliament yesterday (Thursday), one of New Delhi's most important policy documents, said Asia's third largest economy will return to a high rate of growth as it stages a "remarkable recovery" from the global recession. Economic growth this year is estimated at about 7.5%.

The comprehensive annual assessment of India's economic performance was released a day before the government is scheduled to reveal its national budget, which is widely expected to outline policy changes to wind down fiscal stimulus measures and reduce the country's worst deficit in 20 years.

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