Archives for February 2010

February 2010 - Page 2 of 8 - Money Morning - Only the News You Can Profit From

Obama's Targets Insurers with $950 Billion Health Care Reform Plan

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Health insurance providers are protesting this week as the government comes a step closer to strengthening its industry regulation by calling for new "common sense" practices.

This latest development in U.S. President Barack Obama's push for health care reform occurred Monday when the White House released a sprawling $950 billion proposal in anticipation of tomorrow's (Thursday's) scheduled summit.

Obama's plan, which combines the respective reform bills of the Senate and the House of Representatives, suggests drastic changes are coming for insurance providers.

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Is it Time For Investors to Beware of the Bear?

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With U.S. stocks down about 5% from their 2009-2010 rally peak, investors basically want to know one thing: Is this just a correction, or are they looking at a potentially long bear market?

That's no small question. U.S. stocks could be experiencing one of three scenarios at present. They could be:

  • Undergoing a short-term "correction" of its 2009 gains.
  • Beginning a multi-month "pause."
  • Or starting a new bear-market cycle.

These aren't just arbitrary labels. For instance, a typical "correction" lasts but a month or two, with average declines of 8.5% to 10% on the Standard & Poor's 500 Index. A multi-month pause, by contrast, could last eight to 15 months, and involve an S&P 500 decline of 10% to 18%.

But a new bear market is an entirely different animal. A bear-market cycle could last as long as two years and could be marked by a decline of 20% or more.

To learn the warning signs of a new bear market, please read on ...

The Essential Eight: The Only Economic Indicators Investors Need to Know

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Housing starts. PPI. Same-store sales. Weekly jobless claims. Philly Fed. Lagging indicators. Core CPI. Industrial production.

When it comes to economic indicators, the list is almost endless. One economic indicator follows another, filling an entire calendar – weekly, monthly, quarterly, annually. But on the specific day an indicator is announced, it seems to be the biggest deal going: Commentators comment, pundits pontificate, analysts and economics analyze, predict and forecast, and financial markets around the world react – often violently.

The next day brings a new batch of indicator reports. Yesterday is forgotten as the frenetic cycle plays itself out all over again.

Given this pattern, it's not surprising that the economic-indicator game seems confusing – and perhaps even pointless. In the eyes of many investors, the only thing these indicators seem to "indicate" about the economy is that it can be highly confusing and extremely difficult to predict.

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Plans to Hide Commercial Real Estate Losses Won't Avert a Double-Dip Downturn

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Sooner or later, mounting losses on commercial real estate could crash through the market's 2009 optimism and send the economy and stocks into a double-dip downturn.

The major problem is that lawmakers and regulators are setting up investors into believing that commercial real estate (CRE) losses are being effectively addressed. The truth is that escalating losses are being hidden as part of a campaign of optimism in a desperate gamble that a robustly reviving economy will save the day.

To protect yourself from another investment beating, here's what you need to know.

To find out how to avoid the commercial-real-estate implosion, please read on...

Saudi Arabia Shifts its Focus to China as the United States Falls Out of Favor

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Saudi Arabia, the world's largest oil producer, last year shipped more oil to China than it did the United States for the first time ever – a shift that highlights China's ascension to the ranks of the world's economic elite, as well as its position as the new focal point for the world's energy producers.

The flow of oil from Saudi Arabia to China rose to more than 1 million barrels per day (bpd) last year, just as demand in the United States fell below that level for the first time in more than two decades.

China in December alone imported a record-high 1.2 million bpd of Saudi oil, as its economy rode the momentum of Beijing's $585 billion (2 trillion yuan) stimulus package. U.S. imports of Saudi oil, on the other hand, fell to a 22-year low of 998,000 bpd in the first 11 months of 2009, as the world's largest oil consumer clawed its way back from its worst recession in 70 years.

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Freakish Winter Freezes Some Profit Plays, Heats Up Some Others

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This article was supposed to be about investments that would allow you to profit from the typical cold-and-snowy weather that's part of the winter routine at this time of year.

But as everyone from Southern California to the Middle Atlantic East Coast states, and the Great Lakes to the Deep South, is painfully aware, this year's winter has been neither "routine" nor "typical" – not by a long shot.

Indeed, the so-called "snowpocalypse" of 2010 has been so fierce that pundits have already coined new terms to describe it. This run of winter bluster has actually nullified some of the usual "winter plays" – those that can be found almost every year – while at the same time creating other opportunities you might not ordinarily think of.

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Profit From the Broadband Explosion With Cisco Systems Inc. (Nasdaq: CSCO)

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Last Friday I unveiled my two most compelling stock ideas to the readers of my Money Map VIP trading service. They are the best ways to hop onto an exploding trend that I recently discovered and researched extensively – the exponential explosion in broadband traffic.

To learn more about this broadband explosion – and the two top stock picks I isolated from my research – check out this new report. It's a huge issue – with the potential to cause the kinds of network breakdowns and outright outages that could cost the economy billions of dollars and that could even cost people their lives.

In the course of my research, I discovered a third company that's perfectly positioned to benefit from this broadband paralysis. My conclusion: Cisco Systems Inc. (Nasdaq: CSCO) is going to see a lot of upside from this trend, too.

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Where's the "Big Money" Headed Now?

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The remarkable week that just concluded actually began on February 12, which was two Fridays ago. Stocks plunged in the opening minutes of trading that morning as investors' faith in the global economic recovery was shaken. In China, policymakers again tightened monetary policy in a fight against rapid credit growth and fast rising asset prices. In Europe, which is plagued by concerns over the bailout of deeply indebted Greece, a report showed economic growth slowing dramatically. 

For a few minutes, it looked like all of the prior week's advance would be lost and stocks were preparing to plunge into oblivion. But then, encouraged by a positive retail sales report, buyers swamped the tape — focusing their attention on smaller, riskier companies, particularly in the technology sector. And off we went for the next six sessions.

To find out where the "Big Money" is headed now, click here.

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Fed's Discount-Rate Increase Illustrates Exit-Strategy Challenges That Await the U.S. Central Bank

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Is the U.S. Federal Reserve finally launching its "exit strategy?"

When the nation's central bank boosted the discount rate last week, it assured investors that this wasn't a monetary tightening. The assurance didn't seem to matter. The move late Thursday touched off a furious global-market reaction and U.S. dollar increase on Friday. This demonstrates the challenge the central bank will face as it crawls toward an ultimate increase in interest rates.

In a move that surprised the markets, the Fed announced Thursday that it was increasing the rate it charges banks for emergency loans to 0.75% from 0.50%. The also reduced the central bank also slashed the maximum-loan-maturity length from 28 days (it was once as high as 90 days) to overnight.

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