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While Washington Stews, You Can Cash In on the Biggest "Tax-Inversion" Deal in History

Back in June 2012, we recommended that you pick up shares of Big Pharma player Abbott Laboratories Inc. (NYSE: ABT). The reason: Abbott was planning to split in two at the end of the year, meaning folks who took our advice would end up with stakes in two companies for the price of one.

There was more than bargain-basement thinking at work here.

You see, these corporate breakups – known as spin-offs – have a habit of turning into market-beating profit plays. And the newly minted spin-off firms often end up as takeover fodder – also at big profits.

Abbott followed part of that blueprint.

  • Profit Massively from This "Margin Call" on American Homeowners

    Get ready. There's more trouble ahead for home buyers, home builders, and especially homeowners who took out home-equity lines of credit before the housing crisis. Those heydays have turned into haymakers.

    What's already started to happen might not only knock out the formerly aspiring but now petering-out housing recovery, but also might knock the already weak economy to the ground.

    Back in the good old days, when banks and mortgage shops were selling mortgage money and home-equity credit lines like carnival barkers wowing crowds into the big top, millions of homeowners stepped right in.

    That circus tent was nothing but a trap, however. And now I'm going to tell you what that trap means for those borrowers - and the rest of the economy... Full Story

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  • Why We're Making These Housing Market Trades Now housing market-001

    Get ready. There's more trouble ahead for home buyers, home builders, and especially homeowners who took out home-equity lines of credit (HELOCs) before the housing crisis.

    What's already started to happen might not only knock out the formerly aspiring but now petering-out market recovery, but also might knock the already weak economy to the ground.

    That’s why we’re making these housing market trades now...
  • Let's Make the Mortgage Due for Fannie Mae and Freddie Mac Fannie-Mae

    You can call it a bailout, a rakeover - I mean, takeover - or socialism for cash.

    But, whatever you call it, it's not going to last.

    The $187.5 billion bailout of Fannie Mae and Freddie Mac back in 2008 was absolutely necessary.

    Yes, we had to do it. But here's why it's time for the government to get out of the mortgage business for good...
  • This Echo of the Housing Market Bubble Is About to Triple Loan Payments House for sale with "For Sale" sign The housing market is bracing for another shock. Thousands of borrowers who took out home equity loans during the bubble years are now getting alarming news - their monthly payment will soon triple. And as more bubble-era home equity loans reach their 10th birthday, more homeowners will be affected. This 'wave of disaster' is just getting started...
  • New Rental Securitization Deal Likely Heralds Double Dip in Housing Today, in New York, investors will be pitched the first-ever REO-to-rental securitization deal. The $500 million deal bundles foreclosed single-family homes, "real-estate-owned" by Blackstone Group, into securities that pass-through rental payments to investors.
    The new securitization of rental properties comes at a time when home prices have rebounded dramatically across the country. But rather than confirming a bull market in housing, the "trade," as Reuters calls the transaction, likely heralds a coming double-dip.
    The upward trajectory of housing prices, fueled by private equity companies and hedge funds' cash purchases, now faces institutional liquidity demands - and their potential exit.
    Here's what the Blackstone deal is all about, why its structure is problematic, how the ratings agencies will view it, and what it portends for the future.
    This is a very big deal...
  • How to Buy Prime Manhattan Real Estate for Less Than $100 Unless you own a home in each of America's 20 biggest cities - or you're an economist - a 12.4% increase in the S&P/Case-Shiller Index doesn't mean much.
    You can't make money from a nationwide statistic. Not in real estate...
    Cleveland, for example, may have seen a 3.4% increase from July 2012 to July 2013. But that's nothing compared to Los Angeles, where prices jumped 20.8%. Or San Francisco, which posted a 24% year-over-year increase.
    Las Vegas prices jumped even higher, up more than 27%.
    And then there's New York, where you can make a killing on some prime Manhattan real estate right now...
    There's a hassle-free way to do it, too. So you'll never have to worry about tenants, taxes, insurance, maintenance...
    You won't need a million-dollar down payment, either.
    Thanks to one savvy New York firm, you can start building your own Manhattan real estate empire with less than $100...
  • The All-American "Short Squeeze" No One Else Sees Everyone knows the U.S. housing "recovery" has been resurrected on slippery ground. But now that we're finally about to slip - big time - no one sees it coming...

    Then again, how could they?

    The numbers are incredibly misleading...

    According to the Commerce Department, new residential home sales in July fell a whopping 13.4% from their June sales pace. And sales in April, May, and June were all revised significantly lower.

    Yet according to the National Association of Realtors, existing home sales (completed transactions that include single-family homes, townhomes, condominiums, and co-ops) increased 6.5%... to a seasonally adjusted annual rate of 5.39 million in July, from a downwardly revised 5.06 million in June.

    On the surface, the divergence is confusing. But not when you look below the surface, where the real money gets made.

    As you'll see (before anyone else), the housing "recovery" is just one giant "short squeeze."

    And you can make a flat-out killing the moment it ends...
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  • The Rise in Home Prices Isn't Real… At All 08272013SG1

    Money Morning Capital Wave Strategist Shah Gilani talked with FOX Business' "Varney & Co." today (Tuesday) about a huge red flag in the housing recovery.

    Shah has found that we may be on the cusp of a double-dip in home prices.

    To continue reading, please click here...

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  • How Higher Mortgage Rates Will Dent Housing's Recovery Housing Question

    How much do higher mortgage rates reduce home sales?

    That, of course, depends on how much rates rise and whom you ask. But there's no doubt higher mortgage rates hurt sales, experts say.

    Interest rates have been climbing since May. Rates on 30-year, fixed-rate mortgages averaged 4.37% for the week ending July 18, Freddie Mac's weekly survey of conforming mortgage rates said. That's up more than a percentage point from early May.

    And existing home sales fell 1.2% in June, to a seasonally adjusted annual rate of 5.08 million, from 5.14 million in May (but still 15.2% higher than in June 2012), the National Association of Realtors said Monday.

    Lawrence Yun, the NAR's chief economist, told Money Morning he expects interest rates to hit 5% to 5.5% within a year. And while he foresees existing home sales rising as much as 10% for 2013, he predicts only a single-digit percentage increase next year primarily because of higher mortgage rates.

    "There's no risk of any reversal of this housing recovery; it's just slowing the pace of this housing recovery," Yun said.

    He said robust demand and affordable prices would lessen the impact of the higher mortgage rates in much of the country, but pricier markets in New York, parts of California and Hawaii would be hit harder by the higher mortgage rates.

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  • DON’T BE SO ARROGANT, MR. PRESIDENT Empires have come and gone. Some lasted a blink of an eye and some millennia.
    The question is, after 9/11, the rise of China and a great financial crisis, where does the U.S. empire stack up to its predecessors?
    Well, it seems the one commonality they all have is the point when their might was undermined by sloth and greed. And entitlements: free bread and circuses. For some it took years, others centuries.
    Here, in a compelling and unique address, is what Romulus Augustus, the last emperor of the Roman Empire, might say to President Obama now about how to keep America great.
    Read on and share with family and friends...
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  • Big REIT Opportunities in the Housing Market Recovery Ultra-low interest rates have given an artificial advantage to regions with very high real estate prices, while artificially depressing rents. But that trend is shifting.
    And that means that a new opportunity in the real estate market is appearing.
    While the herd investors are chasing the real estate rally in all the wrong places, there's a handful of real estate investment trusts (REITs) that are well positioned to profit on this first wave of recovery -- and the second.
    Don't get stuck with REITs that will wash out…
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  • How to Profit from the Housing Market Recovery House in palm

    Housing has rebounded in a big way.

    Sales of new, single-family homes surged from April to May at the highest rate since July 2008 and by 29% over the previous year, while existing home sales reached the highest level since November 2009.

    And home prices posted their biggest annual increase in more than seven years in May and are expected to continue rising, CoreLogic said Tuesday.

    How can you profit from the housing market recovery?

    Buying the homebuilders' stocks? Sure, but that's almost too easy, and after impressive gains, homebuilder stocks may have peaked for the short term.

    But savvy investors trying to figure out how to profit from the housing market recovery can look beyond the homebuilders to other companies benefiting from the recovery.

    Among them: construction materials suppliers, home improvement retailers, paint companies and those manufacturing and selling furniture and appliances.

    In fact, furniture and related products led all other manufacturing sectors in the latest Institute for Supply Management report for June.

    Here are five companies worth a look if you're seeking to profit from the housing market recovery.

    Playing the Housing Market Recovery

    To continue reading, please click here...

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  • Why U.S. Home Prices Have Been on a Tear Coins and house key ring In another sign the housing recovery is genuine, home prices soared the most in more than seven years in April in 20 U.S. cities.

    The S&P/Case-Shiller index, released today, climbed 12.1% from April 2012, marking the biggest year-over-year increase since March 2006, and rose 2.5% from March to April.

    “The recovery is definitely broad-based," David M. Blitzer, chairman of the S&P's index committee, said in a news release. "Recent economic data on home sales and inventories confirm the housing recovery’s strength."

    Experts cited an improving job market, low mortgage rates, high demand and a shortage of housing on the market.

    Meanwhile, new home sales rose a bit less than expected in May but climbed a whopping 29% compared with May of last year.

    All 20 cities in the S&P/Case-Shillert index, which includes metropolitan areas, showed year-over-year increases in home prices.

    San Francisco posted the biggest gain, 23.9%, followed by Las Vegas, at 22.3%. Atlanta, Detroit, Los Angeles, Miami, Minneapolis, Phoenix, Portland, San Diego, Seattle and Tampa showed double-digit gains.

    Homebuyers in Bidding Wars

    Home prices in Dallas increased 7.4%; in Washington, D.C., 7.2%; and in Cleveland, 4.8%. The smallest increase was in New York, at 3.2%.

    Even with the increases, home prices aren’t rising fast enough to price buyers out of the market. Indeed, competition for homes has led to bidding wars in some places, including Los Angeles, Boston, San Francisco, Seattle, Washington, New York, Miami and Phoenix.

    And home prices haven’t even approached levels seen during the housing bubble.

    Celia Chen, an analyst with Moody's Analytics, told Money Morning that home prices still remain 26% below peak bubble levels.

    “The recovery’s alive and well,” Jed Kolko, chief economist at the real estate site Trulia.com, told Money Morning. “Prices continue to rise, new home sales are up and delinquencies and foreclosures are falling.”

    Higher prices have also rescued many underwater homeowners.

    Kolko noted an extraordinary statistic: It’s cheaper to buy than to rent in the top 100 U.S. housing markets.

    At the same time, the inventory of houses available for sale has begun increasing as higher prices have prompted more homeowners to list their homes and more homebuilders to construct new homes.

    And one of the nation’s largest homebuilders, Lennar Corp. (NYSE: LEN) reported today it beat analysts’ estimates for the three months through May as prices and sales increased.

    Lennar Chief Executive Officer Stuart Miller said on a conference call today he wasn’t too concerned about rising interest rates.

    “Interest rates are moving higher in the context of economic improvement,” Miller said. “We’re looking at a supply shortage, so that means that even in the context of rising rates and a better economy, we’re likely to see price increases and rental increases.”

    Last week, a new survey of homebuilder confidence from Wells Fargo Bank and the National Association of Home Builders reached its highest level since 2006, and housing starts climbed 6.8% in May and 28.1% year to date.

    To continue reading, please click here…

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  • The Latest Obama Outrage: the Family's $100 Million Vacation Flip flops Q

    How much do you spend on your summer vacation? American households usually spend about $1,200 per person on summer vacations, according to a recent American Express survey.

    Presidents spend more on their vacations than you or I. They have to. Air Force One and security does cost more than loading the Honda and heading to the beach.

    Here's how much some recent presidents spent our tax dollars on vacation.

    Ronald Reagan spent most of his free time at his California ranch. Taxpayers covered the cost of approximately $8 million for presidential travel during Reagan's first six years in office, according to the Los Angeles Times. That amounts to $1.3 million a year.

    For George Bush the cost of flying Air Force One to his Texas ranch was approximately $56,800 per trip, for each of the 180 trips according to Media Matters. President Bush spent Christmas during his two terms at the White House so his staff and secret service could spend the holiday with their family, according to Conservative Byte.

    Now Obama plans to blow away all previous presidents' leisure travel costs on our dime with a better than Disney World extravaganza trip to Africa.

    However Obama had to cancel the safari because of the need to fill the surrounding jungle with snipers to guard the president from wild animals!

    To continue reading, please click here...

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  • 7 Reasons This Housing Market Recovery is Genuine House on white background. See portfolio for similar Images

    The housing market recovery is for real this time. Coming after the housing market crash, the recovery is welcome news to those in the industry - and bodes well for the economy as a whole.

    "It almost seems too good to be true," Lawrence Yun, the chief economist at the National Association of Realtors, told Money Morning.

    The latest confirmation of the market's rebound is the new survey of home builder confidence from Wells Fargo Bank and the National Association of Home Builders, which climbed to its highest level since 2006.

    And housing starts were up 6.8% in May and 28.1% year to date, the U.S. Census Bureau said.

    To continue reading, please click here...

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