Archives for December 2009

December 2009 - Page 3 of 10 - Money Morning - Only the News You Can Profit From

Senate Healthcare Bill Headed for Christmas Eve Vote Without Public Option

by

Shares of health insurers and pharmaceutical companies gained yesterday (Monday) after a new version of the Senate's healthcare reform bill eliminated the so-called public option. But it's the next few weeks on Capitol Hill that will determine the long-term effects that Congressional reforms will have on health-related sectors.

As one of the worst December snowstorms on record passed over Washington last weekend, Senate Democrats successfully negotiated to get the 60 votes needed to clear the first of three motions to thwart further debate on the bill and pave the way for final passage of the bill on Christmas Eve.

"It defies logic that we are now expected to vote on the overall, final package before Christmas with no opportunity to amend it, so we can adjourn for a three-week recess even as legislation will not fully go into effect until 2014," said U.S. Sen. Olympia Snow, R-ME.

Read More…

Shoppers Expected to Bounce Back After Snow Storm Wipes Out "Super Saturday"

by

After a massive snowstorm blew away "Super Saturday," last-minute shoppers are expected to make up for the lost weekend and keep retailers' holiday sales even with forecasts, the National Retail Federation (NRF) announced yesterday (Monday).

The trade group stuck to its previous projections for a 1% drop from last year's levels, saying the weather wasn't bad enough to deter shoppers from bouncing back in the last days before Christmas.

"There are more than enough shopping days to make up any challenges due to weather in the east," Matt Rubel, chief executive officer of Collective Brands Inc. (NYSE: PSS), said in an e-mail to Bloomberg News. Kansas-based Collective Brands is the owner of the Stride Rite and Payless ShoeSource chains.

Read More…

Stagflation in 2010 May Look Like Reruns of the 1970s

by

The rare combination of surging inflation, artificially low interest rates, and a jobless recovery may be setting the stage for stagflation, an unpleasant economic malaise not seen in 40 years.

Although uncommon, it's quite possible for the economy to slow and for inflation to rise. It happened in the 1970s, and it could be happening now.

In this case, the definition of stagflation means a stagnant economy that grows well below its potential while both inflation and unemployment are rising.

And just like the global stagflation of the 70s, it begins with a huge rise in oil prices. It then continues as central banks use excessively loose monetary policy to counteract the resulting recession, causing a runaway price spiral.

Read More…

The Recovery is Picking Up Speed, Setting the Stage for Big Gains in the Next Year

by

Do you hear a rumbling, a honking, the smell of new carpet in the air? If so, it's all a result of the biggest surprise of the past month: the rise of U.S. vehicle sales, which was supposed to have ended with the "Cash for Clunkers" deal over the summer.

And it's a very positive surprise. 

The U.S. auto industry may be beleaguered, beaten, bruised and battered, but it is still extremely important to this country. If it can get rolling again, shocking the skeptics, then a lot of good things will happen.

When car sales rise, auto factory production rates rise, causing more car parts to be ordered, more steel and rubber and glass ordered and more advertising purchased. This leads to more people being hired in manufacturing, product planning and marketing, and all ancillary industries. A stronger auto industry will make the U.S. economy start to spin faster on its axis in ways no one is expecting. You cannot overestimate the importance of the improvement of this key industry, and yet I really don't think that investors are really onto it yet.

Read More…

Buy Sell or Hold: The SPDR Gold Trust ETF Will Rally in 2010, as Recent Dollar Strengthening Loses Steam

by

Gold prices surged to a record high $1226.10 an ounce on Dec. 3, but have since retreated. Meanwhile, the U.S. dollar has been weak for many months, but shown signs of strength in the past week.

So what's next for the dollar and the price of commodities like gold?

In order to answer that question we must look at the factors that brought us here: loose monetary policy and government stimulus.

Read More…

Japan's Measures to Fight Deflation Struggle to Show Progress

by

For Japan's central bank and government, there are no easy answers to a growing deflation problem. A loose monetary policy so far has been ineffective and extra stimulus comes with the dire consequence of adding to the nation's debt burden.

As expected, the Bank of Japan (BOJ) held interest rates at 0.1% Friday as the budding recovery in the world's second-largest economy is showing signs of slowing.

"The BOJ felt compelled to show that it doesn't accept deflation and is committed to fighting it," Yasunari Ueno, chief market economist at Mizuho Securities Co. Ltd. told Bloomberg News. "It's reinforcing the view that interest rates will stay very low."

Weak international demand for Japanese goods and a strengthening yen prompted deflation earlier this year, and the nation's consumer price index (CPI) – excluding fruit, vegetable and seafood prices but not oil products – is expected show a decline of 1.7% in November according to a median estimate of 25 analysts surveyed by Bloomberg. The CPI fell 2.2% in October and 2.3% in September.

Read More…

Investment News Briefs

by

Senate Approves Bernanke Nomination; Commodities, Markets Fall as Dollar Gains; Citi Shares Fall After Lower-Than-Expected Price for Stock Sale; Weekly Jobless Claims Rise; Whitney Reduces EPS Estimates for Goldman, Morgan Stanley; Report: AIG Asian Subsidiary to Have Hong Kong IPO; RIM Beats Estimates on BlackBerry Shipments; Palm Q2 EPS Misses Wall Street Expectations

Read More…

Copenhagen Talks Getting Back on Track, but China May Not Climb Aboard

by

U.S. Secretary of State Hillary Clinton yesterday (Thursday) broke a major deadlock in negotiations at the United Nations Climate Change Conference (COP15) in Copenhagen, but China's aversion to transparency could keep a deal from being brokered.

For months developing countries have blamed the lack of a cohesive global response to climate change on the unwillingness of the world's richer nations to help finance green projects.

However, that all changed yesterday when Clinton said the United States would be willing to support a $100 billion fund to help emerging countries finance green energy initiatives.

Read More…

New "Profit Routes" Emerge in Oil - Reporting from Moscow

by

MOSCOW – Sergei Kudryashov likes pizza, poker and American jazz. He's also deputy head of the Russian Ministry of Energy (Minenergo) and former VP at NK Rosneft OAO (LSE: ROSN), the No. 1 state-controlled oil producer.

I've known Sergei for almost two decades now. We compare notes whenever I'm in Moscow. This time, I briefed his team on key developments in the international oil markets. And, as usual, I came away from the meetings with some incredibly valuable information – information the public simply can't get on its own.

So let me share what I've just learned. It's a tremendous opportunity to profit from Russian oil – without investing a dime in the country itself. Indeed, as you'll see in a minute, there are several ways to make money right here at home.

First, here's what's going on.

Read More…

Is Incoming Bank of America CEO Moynihan "More of the Same?"

by

Bank of America Corp.'s (NYSE: BAC) decision to appoint Brian Moynihan as its next president and chief executive officer puts the pressure on Moynihan and the bank's board of directors to prove to investors that the company is serious about changing direction.

Moynihan joined Bank of America via its 2004 merger with FleetBoston Financial and has held several positions since. While technically an insider, Moynihan sits outside BofA's executive circle in Charlotte, N.C.

"This is a real break with the past," Tony Plath, a finance professor at the University of North Carolina and a close follower of BofA's many executive "tribes" told The Wall Street Journal. "It signals to the market that the FleetBoston guys are in charge of the bank now."

Read More…