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Cash In as This Rural Telephone Company Outsmarts the Sector Giants

As the longtime subscribers among you folks know, we love spin-offs here at Private Briefing.

These corporate breakups are a way to make market-beating returns – and at below-market risk.

It’s that penchant for spin-offs that prompted our pre-breakup recommendation of Abbott Laboratories Inc. (NYSE: ABT) back in June 2012.

  • Featured Story

    YHOO, JPM, and GS Earnings Top Today's Wall Street News

    Wall Street News

    Wall Street news today, July 15, 2014: U.S. markets rallied on Monday as concerns over European debt subsided and investors took a more optimistic stance on second-quarter profit season. The financial sector led the charge ahead of their earnings this week. Today's futures were mixed as the markets prepare for Federal Reserve Chair Janet Yellen's semiannual testimony before Congress.

    Investors will also keep a close eye today on earnings reports from Yahoo! Inc. (Nasdaq: YHOO) and Goldman Sachs Group Inc. (NYSE: GS), among others.


    Here’s what you should know to make your Tuesday profitable:
  • Eurozone

  • Stock Market News: DJIA Hits Another Record, BAC, JPM, and GS Lead Financial Sector stock market today

    Stock Market News, July 14, 2014: U.S. markets rallied on Monday as concerns over European debt subsided and investors took a more optimistic stance on second-quarter profit season. The financial sector led the charge ahead of their earnings this week. Bank of America Corp. (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and Goldman Sachs Group Inc. (NYSE: GS) were all up more than 1% on the day.

    Here are the top stock market news stories of the day:
  • Here's Why Gold Stocks Are on the Rise – Plus Three Picks That Will Benefit gold price

    Gold stocks are poised for an upswing.

    Just recently, the European Central Bank (ECB) announced a new policy to promote lending and, ultimately, inflation in the Eurozone. The move sent investors flocking to precious metals like gold and silver. And a recent election in April saw the seating of a new government in India. On account of the platforms of these new leaders, the Indian press has indicated to expect a considerable decrease in import duties.

    With the upward pressure on gold prices, here are three gold stocks that can benefit from a potential price spike...
  • These U.S. Natural Gas Stocks Are Critical to the EU's New "Master Plan" natural gas stocks

    The ongoing civil war in eastern Ukraine, along with the corresponding crisis between Kiev and Moscow, means that Russian gas supplies to the EU could be cut off again come September.

    In 2009, the last time Russia said nyet to European natural gas deliveries, the continent barely survived one of the coldest winters in years. This time around, Europe's savior could be U.S. liquefied natural gas (LNG) exports.

    And that's good news indeed for these natural gas stocks...
  • Eurozone Risks Don't Rule Out These Solid Income Opportunities Europe has a bigger combined economy than the US and we've been economic partners for decades. If things don't turnaround in Europe, the US revival will certainly falter.
    Our chief investment strategist, Keith Fitz-Gerald, just got back from "across the pond" and answered some questions about the risks and opportunities unfolding in Europe right now.
    He also brought back some great inflation-beating, solid income stocks...
    Read More...
  • Eurozone Debt Crisis: Now It's a Hopeless Game of Whac-a-Mole wackamolehome

    The Eurozone debt crisis that was supposed to have blown over long ago instead has become more like an endless game of Whac-a-Mole, with both new and old problems popping up faster than European leaders can bop them.

    As Europe's finance ministers gathered in Dublin today (Friday), they faced at least half a dozen major issues threatening the fiscal health of the Eurozone.

    Although Europe's leaders, in concert with the International Monetary Fund (IMF), have succeeded in keeping a lid on each successive crisis over the past three years, that streak can't survive in the face of the new and old fiscal woes that have been peppering the Eurozone.

    U.S. investors can't let those past successes deceive them into thinking the Eurozone is no longer a worry.

    When the Eurozone debt crisis finally implodes - and sooner or later, it has to - it will hammer stock markets around the globe.

    To continue reading, please click here...

    Read More...
  • The Eurozone Hangs On By a Whisker Four days after the Italian elections, only one thing is really clear: A majority of Italian voters have rejected austerity.
    The problem is, their victory came up short by the slimmest of margins.
    0.36%.
    That's the difference between a firm new government that could move Italy out of the Eurozone and the constitutional logjam Italian voters woke up to the next day.
    Here’s why that's likely bad news for us all... Read More...
  • Berlusconi is Back, and So Is the Eurozone Debt Crisis Since the beginning of the year, the markets have been behaving as if the Eurozone debt crisis has been magically solved.
    Yields on Spanish and Italian debt are trading more than 1% lower than at their peak, while world stock markets have soared close to all-time highs.
    Unfortunately, you can expect that all of this euphoria will fade when the Italian elections take place on February 23 and 24.
    The reason is summed up in two words: Silvio Berlusconi. Read More...
  • 2013 Eurozone Forecast: Why A Eurozone Breakup Is Now More Likely Than Ever To the complete shock of several analysts, the Eurozone managed to make it through 2012 without breaking up. However, 2013 is another story.

    Now that Italy's Prime Minister Mario Monti has resigned, there's a good chance that Italy will be in the forefront of a new Eurozone crisis.

    That means 2013 doesn't look to be a good year for the euro, either-especially with new Italian elections likely to take place in February.

    Of course, the EU establishment hopes that Monti can remain in office, but with four very different candidates now jockeying for position, Italy is one of the continent's great question marks.

    Here's why...

    The leading candidates in this crucial contest include:
    • Silvio Berlusconi, leading the remnants of his former rightist coalition,
    • Monti himself, currently in negotiations with several centrist parties,
    • Luigi Bersani, leading the left-wing Democrats, currently regarded as most likely to win
    • And comedian Beppe Grillo, whose Five Star Movement is leftist and anti-authoritarian.
    Of these four, only Monti and Bersani would represent the continuation of the status quo.

    Meanwhile, the return of Berlusconi, whom the establishment forced out in 2011, would be a nightmare for the euro. That goes for the ascension of Grillo as well.

    In the balance of this pivotal contest could be the fate of the Eurozone itself.

    To continue reading, please click here...

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  • Try as He Might, Mario Draghi Cannot Save the Euro Of all the pyramid schemes that governments and banks have perpetrated in the last decade, the Eurozone debt crisis is the most damaging.

    No amount of posturing by European Central Bank President Mario Draghi can change that fact.

    The market may like what Draghi has to say about the fate of the euro, but tomorrow's big ECB meeting will change little.  

    The massive amount of money Draghi will need to print is far too great for the German taxpayer or the ECB's balance sheet.

    Eventually, the Eurozone will break up and drag the global economy right down with it.

    In the long run, that will mark the beginning of the recovery, but in the short run it will precipitate a banking and economic crisis that will make 2008 look like child's play.

    As investors, we had better be prepared.

    Politicians Doomed the Euro

    The Euro was a reasonably sensible idea, although without political integration it was always likely to cause trouble.

    What's more, the technical side of it was for the first ten years handled very well by Otmar Issing at the European Central Bank.  Issing spent his career in the Deutsche Bundesbank and knew what a decent currency looked like.

    However, two decisions taken by politicians doomed the currency.

    One was to admit Greece into the union, which to any competent observer was a hopelessly corrupt and uncompetitive economy propped up by giant EU subsidies.

    More important, though, was the design of the TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer System) payments system which was replaced in November 2007 by TARGET 2.

    As I wrote in an earlier article, it is the secret system that blew another hole in the euro.

    Target 2 requires all payments between banks in different countries to go through the national central banks (thus giving those otherwise redundant entities something to do).

    Theoretically that's the same system as in the U.S., where many payments are made through the regional Federal Reserve Banks.

    However, in the U.S. the larger banks deal direct, and outstanding payments in the regional Fed banks are cleared regularly. What that means is that if Alabama runs a payments deficit with New York, no large balances are allowed to build up.

    Conversely, there has been no automatic clearing between the central banks in Europe. This may sound arcane and boring, but I promise you it is not.

    These payment imbalances have two nasty side effects.

    To continue reading, please click here...

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  • Can the U.S Economy "de-couple" from the Eurozone Debt Crisis? As the Eurozone teeters on the edge of a breakup, it begs the question: Can the U.S economy "de-couple" from the Eurozone debt crisis?

    Ultimately, the answer comes down to fate of the euro. It's the linchpin to everything.

    From the point of view of one who has travelled fairly frequently in the Eurozone I can tell you I find the euro very convenient indeed.

    In my London merchant banking days, when I used to go on marketing trips around continental Europe, I found that while the excellent European train service was a pleasure to use, the proliferation of local currencies made travelling a pain.

    There was nothing more annoying than to be on a long-distance train that had just crossed the border from Belgium to Germany at Aachen, only to discover that I could not enjoy the excellent Deutsche Bundesbahn bockwrst and fine local beer because I had only sterling and Belgian francs in my wallet, but no deutschemarks!

    The other problem was that after a long trip I ended up with my wallet stuffed with small amounts of ten different currencies, none of which could be changed back into anything useful because the bank charges ate up their value.

    In southern Europe, local exchange controls were a pain too.

    Walking through Madrid airport with $25,000 of legitimately earned pesetas in bills which could not be transferred to Britain through the banking system was far too exciting for my liking.

    From a British merchant banker's point of view, it was thus very convenient when all the local foreigners converted to the same currency, rather than lots of different ones.

    After that, you needed only two compartments in your wallet: one for British money and the other for foreign money. Then you could travel all over Europe without worrying about changing currencies.

    It was a very 19th century feeling, almost as good as being back on the gold standard!

    To continue reading, please click here... Read More...
  • Jim Rogers: Market Surge from Eurozone Debt Crisis Deal Won't Last Stock markets around the world soared Friday in reaction to the morning's Eurozone debt crisis deal, but noted investor Jim Rogers wasn't impressed.

    "This is no more than just another temporary stopgap to make the market feel good for a few hours, days or even weeks," Rogers, Chairman of Rogers Holdings, told CNBC. "Then everybody's going to wake up and say, "This doesn't solve the problem.'"

    Meeting in Brussels, European leaders announced a plan early Friday that would provide struggling banks with money directly from the bloc's bailout fund.

    The leaders also said bailout funds could be used to stabilize European bond markets. But they did not tie such use to additional austerity measures, which have angered citizens in debt-troubled nations like Greece and Spain.

    The summit is just the latest in a series of high-level attempts to resolve the 2-year-old Eurozone debt crisis, which has required bailouts of Greece, Portugal, Ireland, and most recently the Spanish banking system.

    Markets around the world surged on the announcement, with some European indexes rising as much as 4%. In the United States, the Dow Jones Industrial Average shot up 200 points at the open. The Standard & Poor's 500 Index was up about 25 points, or just under 2%.

    Don't get used to it, Rogers said.

    To continue reading, please click here... Read More...
  • Eurozone Debt Crisis: Why Cyprus Needed the Fifth Bailout U.S. stocks were rattled Monday as two more countries asked for bailout packages in the ongoing Eurozone debt crisis.

    Shortly after word came that Spain had formally requested a bailout package for its ailing banks, Cyprus chimed in and also asked for aid.

    The Mediterranean country has become the fifth Eurozone nation to hold out its hand for an international rescue. While the smallest of the bunch to seek relief, Cyprus highlights the European Union's increasingly stressed resources as it wrestles with weakening economic conditions.

    The aid request followed Fitch's downgrade Monday of the island's stressed banks to "junk" status. The credit cut means the country has lost it investment status with the trio of the largest and most influential rating agencies.

    Fitch said in a statement, "Cypriot banks will require substantial injections of capital in order to secure confidence in their financial viability."

    Cyprus, saddled with Greek private sector debt, could need as much as 10 billion euros ($12 billion) in bailout funds.

    "Classic contagion, "BBC's chief economics correspondent Hugh Pym said of Cyprus' troubles.

    To continue reading, please click here... Read More...
  • Spain Bailout Package of $77 Billion Will Not be Enough The Spain bailout package has a steep price, but still might not be enough to save the country's banking sector.

    Spanish economy minister Luis de Guindos formally asked Eurozone partners for up to 62 billion euros ($77.4 billion) to recapitalize his country's ailing domestic banks. The financial institutions are weighed down by bad loans to property and construction companies, and by an ongoing Eurozone debt crisis.

    In a letter to the Luxembourg Prime Minister Jean Claude Juncker, who serves as head of the 17-nation Eurozone finance ministers, Guindos explained he wanted to settle on details and conditions of the loan before the next euro group meeting on July 9.

    Juncker acknowledged receipt of the letter and said that the ministers expect to give a go-ahead to the European Commission, the European Central Bank and the European Banking Authority to negotiate terms of the bailout.

    The request was anticipated after the results of two independent audits were released last week. Financial consultants Oliver Wyman and Roland Berger made the first step in a two-part audit of the Spanish banking system.

    Wyman found that worst-case scenario, Spain's banking sector would need a bailout package of between 51 billion euros ($63.6 billion) and 62 billion euros ($77.4 billion). Berger estimated on the lower end with 51.8 billion euros ($64.6 billion).

    The formal request for a Spain bailout has made investors more nervous, and is driving the bond yields higher, making it increasingly likely Spain will need more money to try and resolve its debt crisis.

    To continue reading, please click here...
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  • Stock Market Today: Europe Concerns Ruling the Day The factors weighing on the stock market today should sound pretty familiar to investors by now. The Eurozone debt crisis - with its carousel of struggling countries thirsting for a bailout - worsens every day.

    Today the Spanish government made a formal request for more financial aid for its struggling banking sector. In a letter to Euro group Chairman Jean-Claude Juncker, who is also Luxembourg's prime minister, Spain's Economy Minister Luis de Guindos asked for up to 62 billion euros ($77 billion) in financial assistance for the recapitalization of the Spanish banks that require it.

    This move was expected as yields on the Spanish 10-year bonds have been under tight scrutiny as they hover around the alarming 7% line.

    Members of Germany, France, Italy and Spain on Friday agreed on a set of growth-enhancing policies equal to about 125 billion euros, or 1% of Eurozone gross domestic product. The European summit takes place later this week and investors are expecting less and less to come from the meeting.

    In a bit of good news that doesn't seem to be impacting the sell-ridden market today, new single family home sales grew 7.6% to their highest level in two years. New sales were at a seasonally adjusted 369,000-unit annual rate, almost 20% higher year-over-year, but still a far cry from where sales should be in a healthy economy.

    Here are some companies making headlines today.

    Chesapeake Energy Corp. (NYSE: CHK) is in the news again and this time for anti-trust violations. Reuters reported today that Chesapeake, led by CEO Aubrey McClendon, conspired with its top competitor Encana Corp. (NYSE: ECA) to suppress land prices. The two companies apparently agreed through numerous emails to avoid bidding against each other at public land auctions to drive land prices for oil and gas fields down.

    If these reports are true Chesapeake and Encana violated both federal and state anti-trust laws.

    To continue reading, please click here... Read More...
  • The Eurozone Crisis is Far From Over The Greek election last weekend has brought us a brief reprieve. The nation and the Eurozone have stepped back from the brink.

    But the larger truth is that little has changed.

    Yes, the Eurozone has survived its latest test, yet there is little indication where it will go from here. Considerable continental support for the common currency remains, and EU officials will soon introduce initiatives to consolidate banking and financial policy in the European Union.

    Still, the problems keep mounting, and there is very little resolve to fix them.

    At this point, a lot of actions (or lack of actions) could still upset the entire apple cart.

    To continue reading please, click here...

    Read More...