Archives for September 2011

September 2011 - Page 9 of 10 - Money Morning - Only the News You Can Profit From

Potash Corp. of Saskatchewan Inc. (NYSE: POT) Is Reaping the Rewards of a Global Ag Boom

by

Potash Corp. of Saskatchewan Inc. (NYSE: POT) is the world's largest fertilizer company by capacity, which means it's perfectly positioned to capitalize on the current global agricultural boom.

Not only are populations growing, but middle class consumers in emerging markets are developing a taste for meat as well. This insatiable hunger for more choices has resulted in greater demand for corn-fed livestock, which is taking a hefty chunk out of crop yields.

And when you include new biofuel demands, crops are now being used for feed, fodder and fuel.

Of course, there's only so much arable land in the world, so fertilizer has become one of the primary drivers of increased crop yields.

When it comes to capitalizing on this evolving trend, Potash Corp. has the size and global diversity to dominate. That was clearly evidenced when the company reported record earnings in the second quarter.

So it's time to buy Potash Corp. of Saskatchewan Inc.(NYSE: POT) (**).

To continue reading, please click here...

Obama May Soon Join America's Unemployed

by

It may not be long before U.S. President Barack Obama joins the swollen ranks of America's unemployed.

A government report released Friday showed no job growth in August.

President Obama is scheduled to address a joint session of Congress Thursday night with his latest proposals on how to reduce the nation's stubborn 9.1% unemployment rate.

He faces numerous obstacles, including a glum economic outlook that has held employers back from hiring, public dissatisfaction with how he has handled the economy, and an uncooperative mood among congressional Republicans who have spoken openly of making him a one-term president.

At this point everyone in Washington realizes that high unemployment is probably Obama's greatest obstacle to re-election in 2012.

"Our nation faces unprecedented economic challenges, and millions of hardworking Americans continue to look for jobs," President Obama wrote in a letter to congressional leaders requesting time for the speech. "It is my intention to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the middle class and working Americans, while still reducing our deficit and getting our fiscal house in order."

Jobs Picture Bleak

The Bureau of Labor Statistics data released Friday was almost uniformly bad, with most categories either holding steady or getting worse.

Although private employers added 17,000 jobs, equal losses in the public sector, mainly from local governments meant that net job growth for August was zero – something that hasn't happened since World War II.

To continue reading, please click here...

Investing in Farmland: How to Turn Healthy Profits From the Heartland

by

If Mark Twain was talking about investing in farmland when he suggested "buy land – they're not making anymore," then he knew more about finance than he's credited with.

The Federal Reserve Bank of Chicago just reported that prime farmland prices in the heart of the U.S. grain belt (Indiana, Illinois, Iowa, Michigan and Wisconsin) – were up 17% in the second quarter compared to 2010, the biggest year-over-year increase since 1977.

That's on top of a 12% jump for all of 2010, the second-largest yearly increase in the past 30 years.

In fact, farmland value since 2000 has appreciated by more than 1,200%, according to the National Council of Real Estate Investment Fiduciaries (NCREIF), and netted nice profits for farmland investors.

Just look at the NCREIF's Farmland Returns Index, which measures the quarterly performance of a large pool of individual agricultural properties acquired in the private market for investment purposes.

The index has posted some incredible quarterly gains over the past decade – most notably 22.78% and 14.63% in the fourth quarters of 2005 and 2004, respectively.

Farmland gains for the first two quarters of 2011 were recently reported at 2.40% and 1.48%.

What's more, negative quarterly returns for farmland are extremely rare. Only once since 1992 has the NCREIF Index fallen period-over-period, and that came in the fourth quarter of 2001 amid post-9/11 economic turmoil.

Given the large value gains since 2000, a lot of potential has been realized, but there's plenty of room for future profit.

"It's not the first inning of the game," Shonda Warner, managing partner at Chess Ag Full Harvest Partners, told CNBC, "but it's not the eighth inning either."

To continue reading, please click here...

These U.S. Companies Made Billions in Profits - And Received a Federal Tax Refund!

by

If you weren't already irritated by the exorbitant paychecks U.S. CEOs routinely pull down, or the fact that U.S. corporations aren't bearing their share of the tax burden, wait until you get a load of this fun fact when those two issues are combined: D espite earning billions in profits, no less than 25 major U.S. firms paid less in federal income taxes last year than they paid their CEO.

And get this – most of those companies actually received tax refunds!

What makes this revelation particularly painful is that so many U.S. companies are minimizing their tax payouts just as this country more than ever needs to boost its revenue, nearly 97% of which comes from taxes of all types. It needs the revenue because of spiraling deficits, and a debt burden so large that it contributed to the United States losing its pristine AAA credit rating for the first time in more than 50 years.

Read More…

Pink Sheets Basics: How To Profit From Pink Sheet Stocks - Without Getting Fleeced

by

Most investors have heard the term "pink sheets" as a reference to stocks. But how many know what they are?

Pink sheets are companies that are traded over-the-counter and that aren't part of any major stock exchange. But that doesn't mean they are any less valuable than traditional stocks, exchange-traded funds (ETFs) or mutual funds.

In fact, expanding your portfolio with pink sheets can be extremely lucrative, but you have to make the right moves to rake in the big profits.

Let me explain…

Read More…

Get Ready Now for Dismal September Market Performance

by

Investors beware – the dismal days of September market performance are here.

September notoriously often leaves markets in negative territory. Since the start of the Dow Jones Industrial Average in 1896, the index has lost an average of 1.07% in September, with a 0.71% average gain for all other months.

That's a 1.78-point spread – enough to be "statistically significant at the 95% confidence level," and be considered a genuine pattern by statisticians.

More discouraging, the market has performed especially poorly in past Septembers when the preceding months were weak.

And that's where we are today.

August took markets on a wild ride. The Standard & Poor's 500 Index fell 5.7% and the Dow 4.4%. The month included two of the top ten worst-performing Dow days ever – a 635-point drop on Aug. 8 and a 513-point drop on Aug. 4.

Now with investors digesting a slew of disappointing economic reports, and the U.S. Federal Reserve unlikely to announce any stimulus measures until the end of the month at the earliest, it doesn't look like this September will buck the trend.

In fact, it could easily be worse.

30 Dismal Days Hath September

Investors tend to misidentify October as the worst month for stocks, but September has had its share of dismal days.

To continue reading, please click here...

The Only Way to Solve the European Sovereign Debt Crisis

by

It's often difficult to comprehend – much less internalize – the risks posed by the European sovereign debt crisis.

But understand this: If Europe's problems aren't resolved in an orderly fashion, the stock market drops we saw last month will be small potatoes compared to the steep declines that lie ahead.

So here's the solution: Let the Eurozone break up right now on its own terms. And let a new, stronger euro currency come as a result.

At this point, that is the only viable solution to the problems Europe faces.

So far, everything the European Union (EU) has done to try to subdue this outbreak has come up short. In spite of all the group's efforts, the European sovereign debt crisis continues to snowball, drawing more and more countries into the fold as it gathers momentum.

The trendy solution is to simply expel the weaker members of the Eurozone. That would work if Greece was the only problem, but it's not.

That's why a better solution would actually be the opposite – for the stronger countries to abandon the euro and create their own currency.

European countries with strong economies – Germany, the Netherlands, Finland and Sweden – should simply walk out.

I'd like to take credit for breaking new ground with this idea, but I can't. Former head of the Federation of German Industries, Hans-Olaf Henkel, writing in the Financial Times recently proposed this alternative solution as well.

Still, it's worth subscribing to for a number of reasons.

To begin with, it would absolve the strong countries of their liability to prop up their weak Mediterranean sisters.

It was one thing when only small countries, such as Greece, Ireland and Portugal needed propping up. But now Spain, with a collapsed housing bubble and eight years of bad management, and Italy, with the most debt of any country in the EU, are at risk. Both of those countries' economies are large enough to put a sizeable dent in even Germany's vast wealth.

Even more ominous, storm clouds have started swirling around France, which is still rated AAA but does not deserve to be. The country has not balanced its budget since the early 1970s, and public spending has soared on the back of hopelessly uneconomic schemes such as the 35-hour workweek.

Now the French government has come up with a supposed solution – one that consists entirely of tax increases.

So it's clear now that something must be done. And the solution I support has benefits for both strong and weak Eurozone countries.

The Benefits of Breaking Up

For the stronger countries, leaving the Eurozone voluntarily and forming a new, stronger euro currency would…

To continue reading, please click here...

Why the Weak Economy Will Lead to More Fed Intervention

by

Despite evidence that its previous actions have done little to revive the U.S. economy, the U.S. Federal Reserve is likely to take more action before the end of the year barring a swift turnaround in such indicators as unemployment, consumer spending, and housing.

The Federal Open Market Committee (FOMC) minutes from its Aug. 9 meeting, released on Tuesday, indicated that several members already favor more Fed intervention.

The FOMC discussed virtually every policy tool available to it, including a third round of bond-buying known as quantitative easing (QE3), an "Operation Twist" that involves selling shorter-term notes and using the proceeds to buy longer-term notes, and setting numerical targets for unemployment and inflation.

Some members pushed for immediate action based on worsening economic news such as a second-quarter gross domestic product (GDP) of just 1%, but others doubted that more Fed intervention would help.

"Some participants judged that none of the tools available to the committee would likely do much to promote a faster economic recovery," said the Fed. "Those critics believe that current economic headwinds can lessen only gradually over time, or that recent events had lowered the impact such moves might have."

Critics of the Fed's interventionist policies, engineered by Chairman Ben S. Bernanke, maintain that the previous rounds of quantitative easing, as well as holding interest rates at between 0% and 0.25% have been ineffective, if not harmful.

"Bernanke's first two rounds of quantitative easing had three major consequences: higher inflation, higher unemployment, and higher borrowing costs for average Americans," said Money Morning Global Investing Strategist Martin Hutchinson.

To continue reading, please click here...

Never Bet on Ben

by

The U.S. Federal Reserve Chairman Ben S. Bernanke is running out of ways to stimulate the economy. Investors looking for markets to rise should be wary of what's ahead as the Fed sends out its last lifeboat. See what Money Morning Chief Investment Strategist Keith Fitz-Gerald has to say to FoxBusiness' "Varney & Co." about […]

Read More…