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Cash in as the "Alibaba Shockwave" Creates the World's First Trillion-Dollar Company

How many times have you been reading about a long-ago historical event – or been watching a documentary about it on the History Channel – and thought to yourself: “Wow, it would’ve been really cool to have actually been there to see this happen.”

I couldn’t agree more: As a big history buff myself, I find myself making that statement on a regular basis.

  • U.S. Economy

  • Is the Bond Bubble About to Burst? Bonds have provided a welcome safe-haven for investors seeking shelter from the financial maelstrom of the past two years. But now many analysts fear bonds have entered bubble territory and pose a rising threat to their holders.

    The amount of money flowing into bonds is "probably not sustainable on a consistent basis" Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc., told Bloomberg News. "Eventually it won't be sustainable. Whether that means five years from now or five weeks is a little difficult to tell."

    Bond funds have attracted more investment than stock funds for 31 straight months, which matches the record streak that ran from 1984 - 1987. Bond funds attracted $559 billion in the 30 months through June, according to the Investment Company Institute (ICI). Meanwhile, investors withdrew $209.4 billion from U.S. stock funds and $24.4 billion from funds that buy foreign stocks.

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  • We Want to Hear From You: Are You Seeking 'Safe Haven' Shelter in the U.S. Bond Market? Ongoing stock market worries and a string of discouraging economic reports have imbued the U.S. bond market with "safe-haven" status. The upshot: Investors have poured record amounts of money into bond funds.

    "It is hard to pick up the newspaper and see anyone optimistic," Francis Kinniry from The Vanguard Group Inc., told Bloomberg News. "The problem is there is not a lot of good news on the recovery front and that translates in people's mind to poor capital markets."

    Bond funds for the past two years have seen inflows almost as high as stock funds did during the Internet bubble, according to the Investment Company Institute (ICI). From January 2008 through June 2010, outflows from equity funds totaled $232 billion, while inflows to bond funds hit a staggering $559 billion.

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  • Three Ways to Brace for a Double-Dip Recession: Recession-Proof Stocks Today (Friday) we conclude our series on bracing for a double-dip recession.

    In Part I of this investment series, "Three Ways to Brace for a Double-Dip Recession: Going for the Gold," we discussed ways investors could safeguard against the imminent decline of the U.S. dollar by buying gold.

    In Part II, "Three Ways to Brace for a Double-Dip Recession: Going Global," we explored potential investments in foreign countries that have more stable economies and better growth prospects.

    And today, we're going to conclude by looking at "recession-proof" stocks right here in the United States.

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  • Money Morning Mailbag: Ending Bush Tax Cuts Not a Cure-All for U.S. Financial Woes The question of whether or not to extend the Bush tax cuts will be a pivotal issue as Washington prepares for this year's midterm election.

    The Congressional Budget Office yesterday (Thursday) reported that extending the tax cuts would result in only short-lived economic benefits.

    "[It would provide] a considerable boost to economic activity in 2011 and beyond for a few years," CBO Director Douglas Elmendorf told CNN. "Over time, [however,] the negative consequences of very high federal borrowing build up."

    The CBO reported that if the cuts for most U.S. taxpayers were made permanent - as proposed by U.S. President Barack Obama - the nation's accrued debt (not including money owed to Social Security and other government trust funds) could climb to 100% of gross domestic product by 2020, up from 62% this year.

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  • Investing Strategies: How to Protect Yourself if the U.S. Economy Catches the "Japan Disease" Grim unemployment figures, growing worries about crushing debt loads and the apparent absence of any inflation are causing many investors to ask a tough question: Is the U.S. economy catching the "Japan disease," the dreaded and dreadful malaise that has left the onetime Asian powerhouse in a stagnant state since 1990?

    It's a crucial question.

    And the answer will guide your investment decisions for the next 20 years.

    To find out the best investments to be making right now, please read on... Read More...
  • Three Ways to Brace for a Double-Dip Recession: Going Global The last time the U.S. economy suffered through a double-dip recession, this country was struggling to overcome the fallout from an Arab oil embargo, Vietnam War-era deficits, and an inflationary spiral that just wouldn't let go.

    That 1981-82 double-dip downturn - the result of an economic "shock treatment" aimed at curing those ills - consisted of two recessions that were separated by a single quarter of growth.

    The current backdrop is very different from the one that was in place back then, but the threat of a double-dip recession is no less real.

    The world's No. 1 economy lost 8.4 million jobs during the recession that got its start in December 2007, making it the worst national downturn since the Great Depression and the biggest loss of employment since the end of World War II.

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  • Are Bonds a Bubble? Don't Bet on It With the stock market unsteady, don't overlook the value of adding bonds to your portfolio. They provide income and are more reliable than equities.

    Indeed, bonds have had a strong run up in the past decade - so strong, in fact, that many investors are afraid they've entered bubble territory. But not Albert Edwards, chief strategist at the old-school French bank Societe Generale SA (PINK: SCGLY).

    Edwards isn't your typical white-shoe analyst. Guys in his position tend to have a perpetually optimistic worldview. Since they are in the business of selling the dream, they need to talk up assets. But Edwards is an iconoclast who is known as one of the dourer professional forecasters.

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  • Three Ways to Brace for a Double-Dip Recession: Going for the Gold The last time the U.S. economy suffered through a double-dip recession, this country was struggling to overcome the fallout from an Arab oil embargo, Vietnam War-era deficits, and an inflationary spiral that just wouldn't let go.

    That 1981-82 double-dip downturn - the result of an economic "shock treatment" aimed at curing those ills - consisted of two recessions that were separated by a single quarter of growth.

    The current backdrop is very different from the one that was in place back then, but the threat of a double-dip recession is no less real. Indeed, with each passing week, and with every new economic report that comes out, the possibility that the U.S. economy will backslide into a double-dip recession seems to become more of a probability - or even a likelihood.

    "For me a 'double-dip' is another recession before we've healed from this recession [and] the probability of that kind of double-dip is more than 50%," Robert Shiller, professor of economics at Yale University and co-developer of Standard and Poor's S&P/Case-Shiller home price indexes, told Reuters. "I actually expect it."

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  • The Headline You Never Expected: Foreign Growth Could Bail Out the U.S. Economy During a period of increasingly worrisome headlines about the U.S. economy, there is one bright spot.

    The rest of the world appears to be doing much better than we are.

    In the long run, that's good news for the United States. Rapid world growth will eventually rekindle the economic fires here, producing a growth that is more balanced than the bubbles of 1995-2008.

    Still, getting to that point will be a challenge, since - economically speaking - the home fires don't appear to be burning all that brightly.

    To see how foreign growth could bail out the U.S. economy, please read on...


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  • Special Report: Why Investors Must Buy Gold … Before it Runs Away in Price As gold hovers near $1,200 an ounce and pundits speculate about a "gold bubble," it's important for investors to remember that a mere decade ago the picture was very different.

    In the year 2000, gold sat at an unimpressive annual average of $279 an ounce - a two-decade low. At that time, most analysts thought gold was finished as a monetary metal. They said its price would never recover and only kooks with tin hats would invest in it. I was one of the very few financial commentators publicly saying that gold was not only viable, but entering a long-term uptrend.

    With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow Jones Industrial Average, the Nasdaq Composite Index and U.S. real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends.

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  • Question of the Week: Investors Preparing for Double-Dip Recession The "pause" button has been hit on the U.S. economic recovery, fueling worries that we're headed for a double-dip recession.

    "We're in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession," Former U.S. Federal Reserve Chairman Alan Greenspan said in an interview on NBC's "Meet the Press" broadcast last Sunday.

    Greenspan touched off speculator interest in a double-dip downturn when he announced that a further decline in home prices could push the economy into a new recession.

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  • Defensive Investing: Use Dollar-Cost Averaging to Reduce Volatility Risks Dollar-cost averaging has long been a strategic staple among mutual fund buyers. Longer-term investors use it to smooth out the effects of short-term price fluctuations, but the tactic seldom has been practical for purchasers of individual stocks - that is until now.

    For those unfamiliar with the strategy, dollar-cost averaging - also known as constant-dollar investing - involves the regular purchase of a smaller fixed-dollar amount worth of shares over time, as opposed to the lump-sum purchase of a large number of shares at once. For example, rather than buy $1,200 worth of shares of fictitious company XYZ in January, you might buy $100 worth of XYZ shares each month for the full year.

    The technique offers several advantages for fund investors:

    • Because you are investing a fixed-dollar amount at regular intervals, you don't have to be concerned with trying to time the markets.
    • Since the fixed-dollar amount you invest buys more shares when prices are low and fewer when they are high, your average cost basis levels out over time. This reduces the risk that you might pay too high a price by making a lump-sum purchase at the wrong time.
    • The lower average cost basis mutes the impact of short-term volatility on your existing holdings.
    • You can build a sizable position in a single fund, even if you never have a large sum of money to invest at any one time.
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  • A Tale of Two Investments: U.S. Steel Scenario Illustrates the Power of Dollar-Cost-Averaging To understand the potential defensive-investing benefits of dollar-cost averaging, let's take a look at two scenarios involving United States Steel Corp. (NYSE: X).

    Thanks to the general downtrend in the market, the May 6 "flash crash," and the rapid subsequent rebound, U.S. Steel shares fell from a 52-week high of $70.95 on April 6 to just $52.81 at the market close on Friday, May 14.

    Indications of some new life in the construction sector and an uptick in autos would seem to indicate that steel demand could rise - which would be especially good for U.S. Steel, which supplies both businesses.

    You've got $10,000 to work with.

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  • With Mid-Term Elections Looming, Will Democrats Fire Back with a Second Stimulus Data last week showed a job market that's careening down a steep street with no breaks. Yet investors were able to shrug off employment concerns, as the stock market actually ended the week up 1.5% due to that rockin' Monday on the first day of the month.

    That's because there is growing speculation that the Democrats are plotting a surprise stimulus in the run up to November's mid-term elections.

    Let me explain...

    Click here to read on...

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  • It's Time to Keep America From Becoming Just Another Banana Republic The great American tradition of individualism, entrepreneurship and revolution is being systematically undermined by a cadre of financial strongmen bent on turning us into just another "banana republic" - where a subdued and apathetic population is subjugated by a ruling class of wealthy oligarchs.

    The gross irony is that the same capitalist system that molded America into the strongest, most productive and richest nation in history, has been transformed into a mostly private moneymaking enterprise whose beneficiaries are those who actually produce nothing but paper profits.

    The story of America's transformation from great experiment to another banana republic is one in which economic crises were manipulated to create a political front for an elite banking class.

    It's a story that's worth examining...

    To find out why America is headed for banana-republic status, please read on...

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