Archives for March 2010

March 2010 - Page 8 of 11 - Money Morning - Only the News You Can Profit From

Terra Industries Favors Competing Offer in Raging "Fertilizer Wars"

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The bidding war for Terra Industries Inc. (NYSE: TRA) heated up yesterday (Wednesday) when the fertilizer company said it preferred a takeover bid from CF Industries Holdings, Inc. (NYSE: CF) to be a "superior proposal" to its agreement with Yara International ASA (OTC: YARIY).

Yara made a $4.1 billion bid for Terra in February, in an all-cash deal valued at $41.10 per share. Per their agreement, Terra can give Yara notice it intends to break the contract, giving Yara five days to provide a better offer. If the break-up goes through, Yara gets a cozy fee of $123 million.

CF came forward March 2 with a $4.75 billion bid — $37.15 in cash and 0.0953 per share for each Terra share.

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China Standing Firm on Currency Policy Despite Mounting Pressure

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China's rigid stance to not appreciate its currency continues to cause problems with "hot money" and foreign trade relations.

A report from Yi Gang, China's director of the State Administration of Foreign Exchange (SAFE), today (Tuesday) shrugged off calls for currency appreciation. Yi said China's foreign-exchange reserves – which are the largest in the world at $2.4 trillion – are safe and stable, and the country will strengthen its supervision of speculative cash inflows.

Speculation that China's currency, the yuan, is soon to rise has increased investment, but such speculation is not particularly welcome. "Underground money shops" disguise funds as foreign direct investments and trade accounts in an attempt to profit from the increasing spread on interest and exchange rates, according to Yi.

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Germany: The "Must-Invest" Economy

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If you're a U.S. investor, you can't be happy about the prospects for your portfolio. After all, you're mostly trapped in an economy with a gigantic and dangerous financial-services sector, a central bank that can't stop itself from printing money and a government that overspends wildly.

But there is an answer: You should consider allocating some of that "at-risk" capital to a country that has none of those problems – Germany.

Germany has a banking system, of course, but that banking system is not the overgrown financial-services monster that we have here in the United States (or, for that matter, in Great Britain). It's impossible to get a subprime mortgage in Germany: Even now – and even after mortgage levels have crept up in recent years – the average down payment for the purchase of a new home in this key Eurozone nation is 50%. As a result, the homeownership rate in Germany is only 43%, the lowest rate in the European Union.

That's actually healthy; far less of Germany's capital is tied up in unproductive housing and the savings rate is correspondingly higher. (Let's face it, most Americans don't accumulate 50% of the cost of a house in savings over their lifetimes – unless forced to do so in a company pension scheme).

To find out how to profit from Germany's promise, read on...

Plummeting British Pound Leads to Worries of Another Currency Market "Black Wednesday"

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Outside of the earthquake rescue efforts in Chile and the Greek-rescue efforts in Brussels, the big news in the world economy last week occurred in currencies.

As you can see in the chart below, the plummeting British pound sterling has dropped even more than the beleaguered euro in the past month and a half, while the good old U.S. dollar has been as good as gold. (That last bit was a bit of currency irony; the dollar has actually been much better than gold, which has flat-lined in the past six weeks.)

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RE: "The Tyranny of Wall Street," by Shah Gilani

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Okay, I am going to state the obvious… all branches (executive, legislative, and judicial) of our government and all of our representatives from State level up to the top of the pyramid, whether it be Democratic, Republican, Independent or Green Party, ARE IN BUSINESS WITH Wall Street…. Heck, Mr. Dimon (President of JP Morgan Chase) […]

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How to Profit From the "Fertilizer Wars"

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There's nothing like scarcity and supply disruptions to fuel violent price spikes. And there's nothing like the basic human needs for food and water to light that fuse.

Today's world food supplies run on razor-thin inventories.

While the food riots of 2008 have all but disappeared from our short-term memories, the threat of them returning grows stronger with every passing day.

According to the World Bank, food prices increased 83% between February 2005 and February 2008. In April 2008, when the United Nation's World Food Programme warned that a "silent tsunami" of hunger was sweeping the globe because of soaring food prices, it was more than just a clever sound bite tossed off by a bureaucrat: It was a warning that the world's poor were being squeezed as increasingly higher portions of their family incomes were being spent on the food they required for their very survival.

Improved fertilizers will be a key to the solution of this problem. And they won't just promote crop growth – savvy investors who fertilize their portfolios will be pleased with their profit harvest.

Let me explain …

To discover how to profit from zooming fertilizer prices, please read on….

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PetroChina, Shell Target Australia's Arrow Energy

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Oil companies Royal Dutch Shell PLC (NYSE ADR: RDS.A) and PetroChina Co. Ltd. (NYSE ADR: PTR) yesterday (Monday) made a joint offer for Australian energy producer Arrow Energy Ltd. in yet another demonstration of how China is turning Australia into its personal commodities broker.

The $3.4 billion (A$3.26 billion) deal would give shareholders A$4.45 per share – a 28% premium from Friday's share price – and a share in a new Arrow international-business entity for each current Arrow share.

Market reaction was favorable as Arrow's prices soared 47% Monday following the news, up to A$5.11 on the Australian stock exchange (ASX).

"It's an opportunistic bid and good for Arrow shareholders," Tim Schroeders, Pengana Capital portfolio manager, told CNBC.

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Buy, Sell or Hold: Ford Motor Co. Is Ready to Haul In a Fortune for Investors

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Last week the Money Map team got together at the Baltimore Marriott and had a two-day conclave to discuss the market and what we can do to better serve you. We had many productive exchanges about our market views, preferred ways to profit, and other important issues.

Keith Fitz-Gerald, Martin Hutchinson and Shah Gilani all had terrific ideas that I am sure you will be reading about here in Money Morning, as well as in their trading services and in the Money Map Report.

But ultimately, we all see opportunities to make very good money out there.

I saved this one for you: Ford Motor Co. (NYSE: F).

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AIG Sells Alico Unit to MetLife for $15.5 Billion, Raising More Cash to Pay Fed

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American International Group Inc. (NYSE: AIG) today (Monday) agreed to sell its American Life Insurance Co. unit, better known as Alico, to MetLife Inc. (NYSE: MET) for $15.5 billion, taking yet another step towards paying off its U.S. government debt.

MetLife will pay $6.8 billion in cash and $8.7 billion in equity securities for Alico, AIG's second-largest foreign life-insurance business.

With a deal inked a week ago to sell its Asian life-insurer unit, American International Assurance Ltd. (AIA), to Prudential PLC (NYSE ADR: PUK) for $35.5 billion, the Alico sale means AIG is now expected to return $32 billion in cash to the Federal Reserve Bank of New York in the coming months – provided both deals close as scheduled by yearend.

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