Archives for June 2010

June 2010 - Page 6 of 11 - Money Morning - Only the News You Can Profit From

Question of the Week: Readers Respond to Money Morning's Technology Trends Query

Apple Inc. (Nasdaq: AAPL) delighted smartphone consumers and enthusiasts of technology trends when it unveiled its new iPhone 4, which will go on sale in the United States on June 24. The fourth-generation iPhone upgrades previous versions with a front-facing video camera for video calls, a higher-resolution screen, slimmer body, and an operating system that accommodates multitasking ability.

Chief Executive Officer Steve Jobs referred to the phone as the "biggest leap we have taken since the original iPhone." It's aimed at keeping the company's momentum going as Motorola's Droid phone, which uses Google's Android system, has edged some market share from Apple.

Apple's iPhone and iPad have helped supercharge the mobile-communications market. Those products – and others – have helped make sure that consumers and companies alike are inundated with new technologies, new applications, and a slew of new products. All these new options have potential buyers asking such questions as "Can this help me? " or "Do I need one? " or "Should I upgrade? "

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Are You Worried About Stocks? The U.S. Housing Market Should Be Your Real Concern

According to the latest reports on the U.S. housing market, the 96,400 homes hit with default notices last month were 7% less than in April and 22% less than in May 2009.

And that's not all. Foreclosure auctions were scheduled for the first time on 132,680 properties last month – 4% fewer than the month before and 16% fewer than in May a year ago, according to the Irvine, California-based RealtyTrac Inc.

In fact, foreclosure filings of all types – default notices, scheduled auctions and bank repossessions – were reported on 322,920 U.S. properties in May, a decline of 3%. All told, this latest report seems to have painted a picture of a gentle and steady recovery for the embattled U.S. housing market.

Unfortunately, these figures are quite deceptive – as is the reassuring portrait they helped create. Despite the apparent improvement in the foreclosure figures, there exist some dangerous undercurrents that threaten to further drag down U.S. housing prices – as well as U.S. investors.

To discover the "real" state of the U.S. housing market, read on…

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We Want to Hear From You: Is Afghanistan's Mineral Wealth a Blessing or a Curse?

The news that there is $1 trillion of Afghanistan mineral wealth hiding in the country's scarred and deserted landscape has global investors calculating how likely it would be for this incredibly poor country to transform itself into a major global exporter.

It has also spawned debates about which nations should be given a piece of this potential fortune.

At $1 trillion, the estimated value of the mineral reserves is 100 times the size of Afghanistan's $12 billion economy. And it's not just the dollar figures that could bring about change. Much of Afghanistan's economic activities involve drug trafficking and terrorism. About 40% of the country's population lives below the poverty line, and 70% lives on $2 a day.

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Cost to Fix Fannie Mae and Freddie Mac May Reach $1 Trillion

The cost to fix Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the government-backed mortgage companies that bought or guaranteed three-quarters of all U.S. home loans last year, could run as high as $1 trillion, according to a report by Bloomberg News released yesterday (Tuesday).

The minimum amount required to keep them afloat will be $160 billion, or $15 billion more than they have already drawn from an unlimited line of government credit granted to keep the home mortgage market functioning. That exceeds the amount already spent on bailouts for American International Group Inc. (NYSE: AIG), General Motors Co. or Citigroup Inc. (NYSE: C).

"It is the mother of all bailouts," Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry told Bloomberg.

Fannie and Freddie own or guarantee 53% of the nation's $10.7 trillion in residential mortgages, according to a June 10 Federal Reserve report. Their books are loaded with millions of bad loans, and delinquencies are on the rise.

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Will Afghanistan's Mineral Wealth Bring the Nation's Rebirth or a Commodities Curse?

Overnight, Afghanistan has gone from being a political pariah to one of the most significant, and potentially richest, countries on the globe. But can the rocky, war-torn desert – known mostly for harboring terrorists and exporting opium – be reborn as a major commodities exporter?

U.S. geologists have found some $1 trillion of untapped mineral deposits in Afghanistan, The New York Times reported Sunday. Afghanistan's mineral wealth includes large caches of iron, copper, gold and lithium that could turn the country into one of the most important mining centers in the world.

Think of Australia, Canada, and Latin America. That is the league into which these geographical revelations have thrust Afghanistan.

"There is stunning potential here," General David Petraeus, commander of the United States Central Command, told The Times. "There are a lot of ifs, of course, but I think potentially it is hugely significant."

Those "ifs" include ongoing warfare, a lack of infrastructure, and more than a little political corruption. But the upside for the country is enormous.

While U.S. officials estimate the potential value of Afghanistan's mineral wealth at $1 trillion, President Hamid Karzai said last month during a visit to Washington that his country's deposits could be worth three times as much.

So why did it take so long for this information to surface?

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Defensive Investing: Seven Signs Your Dividend is in Trouble

Both the U.S. stock market and the U.S. economy are navigating rough waters right now.

U.S. employment, which had appeared to be moving into rapid expansion, suffered a setback in May, with the economy creating only 41,000 jobs. Meanwhile, the stock market – even with the recent rebound that brought it back to the 10,000 level – remains more than 15% below its cyclical high.

That's been the uncomfortable pattern: One economic report points toward a continued U.S. recovery; the next one points toward recession. Sometimes the contradictory research is separated by a single day, other times they are just hours apart. The resultant uncertainty is whipsawing U.S. stock prices – and is leaving investors feeling shaky.

Fortunately, there is a ready remedy, not to mention a place of refuge, from this kind of grinding uncertainty – high-yielding dividend stocks.

To discover the seven signs that a dividend isn't secure, please read on...

Oil Industry Leaders Try to Avoid Regulatory Fallout From BP's Gulf Oil Spill

The leaders of the three largest U.S. oil companies will testify before Congress today (Tuesday) about the Gulf oil spill's effect on U.S. energy policy, hoping to convince legislators to be cautious about introducing new regulations on the industry.

Chief Executive Officers Rex Tillerson of Exxon Mobile Corp. (NYSE: XOM), John Watson of Chevron Corp. (NYSE: CVX) and James Mulva of ConocoPhillips (NYSE: COP), are scheduled to appear before a House Energy and Commerce Committee panel examining offshore drilling safety and energy policies.

The review comes after a blowout at BP PLC's (NYSE ADR: BP) Deepwater Horizon drilling platform in the Gulf of Mexico caused a massive oil spill.

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Taiwan Outlines Export Deal With China To Boost Its Economy and Open Door for Global Trade

Taiwan on Sunday announced a monumental trade deal with China that will boost the island's exports and shift its economy toward China-centric policies.

The Economic Cooperation Framework Agreement (ECFA) will reduce tariffs on 500 products exported from Taiwan to China and 200 products shipped from China to Taiwan including car parts and machinery. It will also open the door for Taiwan to be included in future free trade agreements that China previously prevented because it viewed Taiwan as a rebellious province.

"Signing the ECFA is a route that Taiwan must take and it is a milestone, " Liu Bih-rong, a political science professor at Soochow University in Taipei, told Bloomberg. "It signifies how the relationship between the two sides has recovered and, more importantly, it will pave the way for more free-trade agreements and benefits. "

The agreement's details still need to be ironed out and should be finalized by early July at the latest.

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Buy, Sell or Hold: A Copper-Price Rebound Could Mean a 50% Gain For Freeport McMoRan Copper & Gold Inc. (NYSE: FCX)

It's time to play "the metal of the economists"- copper. And that brings us to one stock: The publicly traded king of copper – Freeport McMoRan Copper & Gold Inc. (NYSE: FCX).

Let me explain …

Last week, I provided a solid "defensive-investing" pick for readers who wanted to balance their portfolios – and wait for the latest global-financial storm to pass.

During the past week, we got very strong indications that strong hands see value in the market:

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