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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. Top AIG Lawyer Quits Over Pay Restrictions, Gets Millions in Severance; Biggs & Faber: S&P 500 Has Room to Run, Dollar Will Rebound; Consumer Confidence Rises for Second Month in a Row; U.S. Home Prices Unchanged in October; China Audit Finds $35 Billion in Fraud by Officials; GM Holds Fire Sale on Remaining Pontiacs and Saturns; Oil Moves Closer to $79 Outgoing American International Group Inc. (NYSE: AIG) General Counsel Anastasia Kelly will get "several million dollars" in severance after she quit over federal pay curbs, people familiar with the matter told The Wall Street Journal . Kelly was entitled to the money under AIG's severance plan, which says certain executives can resign and collect severance if their pay is significantly reduced, the people said. Kelly's pay stood to take a large hit after the Obama administration "pay czar" Ken Feinberg capped annual salaries at $500,000 for executives at companies that received billions in bailout money. The exact amount of severance was not specified. Hedge fund manager Barton Biggs and contrarian investor Marc Faber both said in an interview with Bloomberg Television that the dollar and the U.S. equity market may gain up to 10% in the next two years. "History would suggest that after such a severe economic shock like we've just had that the odds are that we're going to have a pretty good burst of growth in 2010, 2011," Biggs said. "I don't see any reason why we can't have a further rally in the dollar and a further rally in stocks. And my guess is that the next move in both could be on the order of 10%." Both Biggs and Faber recommended investors buy U.S. stocks on March 9, 2009 when the Standard & Poor's 500 Index was at its lowest point in 12 years.

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How to Profit From the Oil-Price Spike of 2010

Oil prices staged a remarkable rally this year on the back of a weak dollar and a nascent economic recovery. In 2010, it's likely that these same factors will combine with an increase in global energy demand to push oil prices back up over $100 a barrel.

With stockpiles still high and energy demand rebounding sluggishly, most forecasts are calling for the "black gold" to edge up into the low-triple-digit price range. That's 40% higher than where oil is trading right now - but is still well below the record high of nearly $150 a barrel that was established in 2008.

Money Morning Chief Investment Strategist Keith Fitz-Gerald is even more bullish. He believes that a price of $100 a barrel is "easily attainable" and says that some sort of unforeseen market shock could cause crude oil to spike as high as $150 barrel by the end of 2010.

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Could a Spike in Bond Yields Cause the Economy to Stumble in the New Year?

In normal times, at their most basic level, bond prices follow some very simple laws of financial physics: When interest rates rise, bond prices fall and bond yields rise; when rates fall, bond prices rise, and bond yields drop.

However, bonds could break those laws of financial physics in the New Year - and in a big way. That could inflict some real financial pain on the U.S. recovery, the dollar, the shuddering housing market - and could even ignite a major stock-market reversal.

The U.S. Federal Reserve continues to hold rates on U.S. Treasury securities to artificially low levels - a strategy central bank Chairman Ben S. Bernanke just this week said the Fed intends to adhere to for the foreseeable future.

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Bargain Hunters Turn Out for Black Friday

More shoppers turned out for the Black Friday weekend this year, but they spent less per capita and favored lower-priced items, according to a survey by the National Retail Foundation. The survey showed that about 195 million consumers shopped stores and Web sites, up about 13% from the 172 million who ventured out last year.  […]

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Markman on the Markets: Is it Time to Buy Monsanto?

Is it time to buy Monsanto Co. (NYSE: MON)?

My research tells me that the answer to that question is a definite "yes."

When it comes to basic materials investments, we've talked a lot about gold and steel, but don't forget the agricultural goods. As you can see in the chart that follows, St. Louis-based seed-producer Monsanto last week broke out of a long downtrend and consolidation.

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Why Gold Will Reach a Record $2,000 in 2010

Gold has surged 60% in the past 12months and it’s not letting up. The “yellow metal” is continuing that scorching surge into the last part of the year, establishing new highs on a near-daily basis. In fact, gold established yet another record price yesterday (Wednesday) when it peaked at $1,153.40 an ounce on the New York Mercantile Exchange (NYMEX).
<br And the records are going to keep on coming.

With the U.S. dollar in a freefall and global gold demand rising, analysts say the precious metal will likely continue its bullish trend through at least the first half of 2010. It could rise as high as $2,000 an ounce, which would represent a 73% gain from current record levels.

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Trade Gap Unexpectedly Widens on Surge of Oil and Auto Parts Imports

The trade deficit in the U.S. grew by an unexpectedly large 18.2% in September, the most in a decade, reflecting rising demand for imported oil and imports from China.

The gap grew to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said today (Friday). Imports jumped the most in 16 years, overcoming a gain in exports.

U.S. exports and imports were at the highest levels since December 2008, in a sign that the U.S. economy is recovering. Imports grew 5.8% in September, the biggest monthly gain since March 1993, while exports rose 2.9%.

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Kraft Launches Hostile Bid for Cadbury

Kraft Foods Inc. (NYSE: KFT) yesterday (Monday) refused to sweeten its $16.4 billion offer for Cadbury PLC (ADR NYSE: CDY).

Instead, the North American food giant repeated the terms of its original offer, which Cadbury rejected two months ago. Kraft will now put its bid directly to Cadbury shareholders, setting the stage for a battle that could last months.

Cadbury swiftly rejected the bid, saying the offer is now worth less than the initial proposal, which had already undervalued the company. Kraft's bid is now worth 4% less than the original offer, and 6% below the current stock price, because Kraft shares have lost some of their value.

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Tax on Foreign Investment Won't Dent Brazil's Currency

Beginning today (Tuesday), Brazil will impose a 2% tax on foreign investment in the country's stocks and bonds. Analysts have called the move a "desperate" bid to reign in the skyrocketing value of its currency, which has gained more than 30% against the dollar this year. The tax will make it more difficult for companies […]

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How China is Torpedoing the U.S. Dollar…

The Federal Reserve isn't the only player driving down the value of the dollar. The Red Dragon is launching an attack of its own. China's recent deal with Argentina is just the beginning. Find out China's plan in this special report.

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Greenback Woes Boost China's Global Muscle

Washington continues to believe that the U.S. dollar is a weapon and most of the G8 is playing along. They simply can't see – or won’t acknowledge – where the dollar is actually headed, even though the evidence is right before their eyes. On the other side of the world, however, China is refusing to […]

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Silver's Run Quietly Gains Momentum

New fears over the U.S. dollar's vulnerability – warranted or not – have been a boon not only to gold prices, but its more affordable inflationary hedge silver. The white metal is up roughly 10% since Money Morning's Sept. 28 analysis of silver with futures trading as high as $17.71 this morning on the New […]

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Emerging Market Rebound Evidence of a Growing Divide From Developed Nations

Stocks in emerging market economies continued their torrid run yesterday (Wednesday), hitting a 13-month high and further separating themselves from developed economies. The MSCI Emerging Market Index rose for the third consecutive session climbing 0.4% to 928.40 -; its highest level in more than a year according to Bloomberg News. "The outlook for emerging markets […]

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Is the United States on Sale?

When more than $14 billion in merger-and-acquisition deals were announced in a single day last week, U.S. stock prices zoomed as investors embraced a suddenly more-bullish outlook. As last Monday demonstrated, any increase in dealmaking activity tends to move markets higher: With the chance of windfall profits from a surprise buyout, investors tend to bid […]

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Gold Prices Soar to Record High on Report of Secret Plan to Dethrone the Dollar

Gold prices surged to record high $1,045 an ounce yesterday (Tuesday), after a report surfaced that global oil producers are planning to stop using the U.S. dollar for oil trade. "There's no telling the veracity of these reports, but the general trend has been going in this direction anyway: a weaker dollar and rising gold," […]

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