Archives for March 2010

March 2010 - Page 9 of 11 - Money Morning - Only the News You Can Profit From

China Draws Plan to Reduce Risk While Continuing Economic Growth

Chinese Premier Wen Jiabao on Friday pledged to maintain economic growth of at least 8% in 2010, while gradually drawing down government spending and taking measures to guard against inflation and potentially devastating asset bubbles.

The remarks came during Wen's annual report to the National People's Congress in Beijing – which is the equivalent of the United States' State of the Union speech – and they highlight the central government's determination to promote responsible levels of growth.

The call for 8% annual economic growth is the same goal that has been maintained since 2005 – and one that was easily passed last year with the implementation of a sprawling $586 billion stimulus package.

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The Dividend Stock Recovery: Get Ready for a High-Yield Bonanza

It's been a tough time for income investors lately.

Ten-year Treasuries pay less than 4%. The Standard & Poor's 500 Index yields just over 2%. Money market fund returns are microscopic, paying an average of just 0.05%. (At that rate, it will take your money one thousand years to double.)

What should you do?

Take a look not at the stock market, but inside it. The S&P 500 may yield 2.1%, but many individual stocks are yielding far more. In addition, yields are about to arch higher.

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Which Stocks and Sectors Will Shine as Market Fear Subsides?

A lot of my commentary lately on the markets has been relatively short-term oriented. Today let's take a moment to pan back and consider the weekly perspective, which is rather benign, even positive.

From this point of view, stocks are broadly recovering from their most oversold condition since March of last year — and the release of the energy stored up then persisted at near-full strength for three months.

To find out which stocks are positioned for profit, .

click here

Mortgage Markets Show Increased Stability, But Limited Opportunity

[Editor's Note: This analysis of the U.S. mortgage market is part of a two-story package that appears in today's issue of Money Morning. To read a related story on the outlook for adjustable-rate mortgages (ARMs), please click here.]

It doesn't have four letters, but "mortgage" has definitely been a dirty word in the financial world the past few years. That's especially true when the word "mortgage" is paired up with such other terms as "subprime," "delinquent," and "foreclosures."

Little wonder that mortgages – along with the derivative securities backed by them and the often-unseemly practices of the people pushing them – have gotten much of the blame for precipitating the economic meltdown from which the American economy is now struggling to recover.

There's still plenty of woe in the mortgage world. But in recent months there have also been some signs that the real-estate-financing markets are at least regaining some semblance of stability, with foundations being poured for a rebuilding phase that might not be too far down the road.

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Epitaph For the ARM: Is the Adjustable-Rate Mortgage Finally Dead?

[Editor's Note: This analysis of the adjustable-rate-mortgage (ARM) market is part of a two-story package on the U.S. mortgage market. To read the package mainplay – "Mortgage Markets Show Increased Stability, But Limited Opportunity" – please click here.]

Is it the end of the line for the adjustable-rate mortgage (ARM)?

A close look at the interest-rate paradox involving credit cards and ARMs indicates that it may be time to start writing the epitaph for adjustable-rate home loans. Here's why.

The U.S. Federal Reserve's benchmark Federal Funds rate is at all-time lows – with a target rate near 0.00% – but credit-card interest rates linger at record highs. The all-in rate on some credit-card transactions approaches 30%.

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Six Ways to Profit as Brazil's Economy Takes Off

In many ways, Brazil offers some of the best prospects among emerging markets and deserves to be a core holding in any international portfolio.

Brazil's economy had only a shallow recession and is now recovering nicely. Its market has been one of the best performing since Dec. 31, 2008, and both inflation and the budget deficit remain under control.

Yet one can be only moderately bullish – and I'll explain why.

To find out how to profit from Brazil's bullish prospects, read on...

Greece Cutting Back to Court EU Favor

Greece unveiled its third austerity plan Wednesday and was met with praise from the European Union (EU), European Central Bank (ECB), and the International Monetary Fund (IMF), but hostility from the Greek public.

The plan consists of spending cuts and tax increases that will cut the budget deficit by $6.5 billion, and help Greece to reduce its current deficit to 8.7% of gross domestic product (GDP) from 12.7%.

"This was a necessary decision. It was not a matter of choice," said Greece's Prime Minister George Papandreou. "It was a matter of survival for our country, allowing it to breathe and break free from the clutches of speculative forces."

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Having Served its Purpose, TALF Could Soon Turn a Profit for the Fed

The Term Asset Backed Securities Loan Facility (TALF) program has succeeded in reviving the consumer loan-backed market and may even return a profit for the Federal Reserve, according to William Dudley, one of the main architects of the facility.

In an interview with Dow Jones Newswires, Dudley, the president and chief executive officer of the Federal Reserve Bank of New York, said that the TALF program has reignited the market for securities backed by loans on vehicles and credit-card debt.

TALF was launched by the Fed to entice buyers to buy new bonds backed by auto and student loans.  At the time, investors were reluctant to purchase securities backed by shaky collateral, fearing they would lose their entire investment.

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Apple Goes "Island-Hopping" in its War Against Google

Apple Inc. (NASDAQ: AAPL) on Tuesday took aim at rival Google Inc. (NASDAQ: GOOG) and its Android operating system by filing a patent-infringement complaint with the International Trade Commission (ITC) against smartphone manufacturer HTC Corp.

Taiwan-based HTC is the largest maker of phones that use Google's Android operating system, such as the Nexus One. Apple involved the ITC in hopes of banning U.S. imports of HTC devices made with the technology in question. However, that filing was paired with a suit filed in federal court in Delaware that claimed infringement on 20 patents.

"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it," said Apple Chief Executive Officer Steve Jobs. "We think competition is healthy, but competitors should create their own original technology, not steal ours."

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Senate's Plan for Financial Reform Promises Nothing But Political Gridlock

U.S. senators Christopher Dodd, D-CT, and Bob Corker, R-TN, have fashioned a compromise on stalled banking regulation that straddles divisions over establishing a financial consumer protection agency and addresses unwinding too-big-to-fail firms.

The deal deftly divides lawmakers on both sides of the aisle in the Senate, as well as in the House of Representatives, which passed its plan for financial reform in December.

By engineering gridlock in the nation's capitol, lawmakers seem determined to stall any meaningful overhaul of financial-markets regulation. But rather than counting on backsliding into the status quo to grease the wheels of economic recovery, the overhang of unresolved and ineffectual legislation threatens long-term investor confidence and desperately needed public protections.

To read more about the deal's shortcomings, please continue below...