Archives for May 2012

May 2012 - Page 9 of 15 - Money Morning - Only the News You Can Profit From

JPMorgan's (NYSE: JPM) Busted Bet Was No Chance Encounter

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This weekend I was strolling by JPMorgan Chase's (NYSE: JPM) Park Avenue office building in Manhattan.

It was 11:40 am, and I was returning from a long walk from my midtown hotel down to Chelsea (it was definitely "a Chelsea morning" in NYC… thank you Joni Mitchell).

I hadn't planned to walk by their office building; I didn't even know where it was.

But there I was, rounding 48th Street on Park Avenue, when I saw the JPM sign. I thought, how ironic, I'm in New York, appearing on FOX News to talk about the debacle at JPM, and here I am serendipitously walking by their office building.

But it gets even better.

There was no one on the street, which is pretty unusual for New York. I was looking at the barricades in front of the building and imagining that they must have needed them on Friday, when the press and public must have been surrounding the building on news that the bank had just admitted losing $2 billion (actually it's $2.3 billion and counting) on a hedge position.

I was thinking, poor CEO Jamie Dimon.

And how ironic; he's been publically deriding the Volcker Rule as being stupid and unnecessary, and now he's the tempest in the teapot (which is what he called rumors about his London office's rumored losses)…

When who else should get out of a shiny GMC chauffeured "black car" but Jamie Dimon.

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New Video Surveillance Technology Spots Crime Before it Happens

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Falling statistics aside, crime is still a national epidemic.

The truth is 1.2 million of us will fall victim to a rape, robbery or murder by the end of this year.

That adds up to 3,400 new crime victims each and every day–all year long.

Yet the odds are growing daily that video cameras will catch these ultra-violent thugs in the act.

The fact is the U.S. has roughly 30 million cameras watching banks, malls, factories and city streets manned by law enforcement, federal agents, the military, homeowners and private security.

For the surveillance industry, though, that's just the beginning.

New video surveillance technology is growing by leaps and bounds with a compound annual growth rate of more than 10% a year.

In fact, ABI Research predicts the video surveillance market will grow to $41 billion by 2014.

But there's just one problem with the current approach…

We simply don't have enough people to watch all those cameras at any thing approaching real time.

Think of it as a river of information that's impossible to sort. It comes at us so fast that it's not much use when it comes to actually preventing crimes.

If only there was a way to figure out in advance what the bad guys were going to do next.
No doubt that would be huge.

"Smart" Software Finds Crooks Fast

That's why I'm glad to tell you about a new breakthrough video surveillance technology created by a startup called BRS Labs.

It's called AISight and it could literally transform video security throughout the United States.

And just to drive the point home even further, the name is pronounced "eyesight." It's what's known as "smart" software since it's based on artificial intelligence, or AI.

Here's the thing. Its smart software combines computer vision with machine learning to recognize behavior. Think about that for a moment.

Not long ago AISight spotted a man who had no business hanging out with a group of school kids. What happened next will blow you away.

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Yahoo (Nasdaq: YHOO) Needs More Than Just a New CEO

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The black cloud following Yahoo! Inc. (Nasdaq: YHOO) seems bigger than ever.

Just one day after he was forced to leave the forlorn Internet company for padding his resume, reports surfaced that ex-Yahoo CEO Scott Thompson revealed he has cancer.

According to a report in The Wall Street Journal, citing unnamed sources, Thompson told Yahoo's board and several colleagues of his thyroid cancer before resigning Sunday.
A source told The Journal that Thompson's decision to leave his position at Yahoo was in part influenced by his cancer diagnosis.

News broke last week that Thompson embellished his resume with a degree in computer science, when he actually earned a degree in accounting from a small Massachusetts college.

Thompson was hired in January to replace Carol Bartz, who was fired by phone last September.

In the revolving position at Yahoo, former head of global media Ross Levinsohn has been named interim CEO.

New CEO Boosts YHOO

Levinsohn had a triumphant stretch running Internet services within Rupert Murdoch's media empire at News Corp. before Bartz lured him to Yahoo in 2010. Levinsohn previously ran ad sales for Yahoo's Americas unit.

Yahoo investors applauded the media veteran's appointment. Yahoo shares tacked on 2.2% in premarket trading Monday ahead of a nasty open for U.S. markets.

Levinsohn has significant credentials as a negotiator. Before coming aboard at Yahoo, he had a history of recognizing and acquiring an assortment of digital media companies around the globe. That is a striking comparison to Yahoo's last two CEOs, who had stronger backgrounds in technology than media.

"We view Mr. Levinsohn as well-equipped to lead the organization and to build off the company's core strengths – advertising products and digital media," said Spencer Wang, an analyst with Credit Suisse.

But Yahoo still faces a rocky road ahead.

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Time to Like Microsoft (Nasdaq: MSFT)

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Microsoft (Nasdaq: MSFT) is up almost 20% this year – so is it time to buy? Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business' "Varney & Co." to talk about this rise. Fitz-Gerald also talked about Yahoo (Nasdaq: YHOO) and its increasing pile of issues. To find out what to do with these […]

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Three Reasons Silver Prices Will Rally

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With the recent volatility and lows in the gold market, many investors also have been wary of silver prices.

Silver on Friday closed down 0.4% to $28.87 per ounce. For the week, prices dropped 5.1%.

Not the prettiest picture, but for the year silver has increased more than twice the price of gold thanks to growing confidence that the global economy will dodge another recession bullet.

David Jollie, an analyst at Mitsui & Co. Precious Metals Inc., recently said to Bloomberg News, "A greater amount of confidence in the global economy generally means higher growth and that means more silver demand. If you look out beyond the end of the year, you can still see reasons to be bullish."

Why Silver Prices Will Rally

Increased Demand: The global head of metals analytics at Thomas Reuters GFMS, Philip Klapwijk, has forecast silver sales to increase as end-users expand inventories that thinned at the end of 2011.

A large portion of silver demand – 80% – comes from fabrication, which is expected to rise about 3% to 5% this year to roughly 900 million ounces.

Also helping is China's manufacturing expansion and an increased electronics industry demand.

Klapwijk also sees current monetary policy increasing investors' appetite for silver and triggering a subsequent price rise.

He expects "a continuation of very loose monetary policy," he wrote in a report earlier this year. "We also see rates likely being cut in some of the emerging-market economies such asChina, India and Brazil."

This means current silver market lulls are great buying opportunities since the long-term outlook remains bullish.

Klapwijk toldDow Jones Newswire, "We see a range for silver north of $40 and maybe getting to a low of $28" per troy ounce.

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High Oil Prices: The Truth About Obama's Misguided Witch Hunt

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It has been less than a month since President Obama declared war on those evil oil speculators.

Standing in the Rose Garden on April 17th, the president laid out a $52 billion initiative to increase federal supervision of oil markets in an effort to crack down on oil price spikes.

At the time, oil was trading at $117.41 a barrel and $5 a gallon gas seemed all but inevitable.

According to the p resident, evil speculators had been working behind the scenes to screw the rest of us while engorging themselves on riches beyond our wildest dreams.

I said it then and I'll say it again…the president is chasing a ghost he'll never catch. Spending $52 billion on additional oversight is a complete waste of money and a misguided witch hunt.

I mean, think about it. If speculators are the same ones responsible for high oil prices, ask yourself why they're the ones getting raked over the coals these days as oil prices fall.

The short version: It's because speculators don't control oil prices and never have.

The Real Culprits Behind High Oil Prices

Pricing inputs – for better or worse – are driven by geopolitics, supply constrictions, war, tyrants with spigots and buyers who will only purchase as long as the prices are low enough.

This is not complicated. Any time there are more buyers than sellers, prices go up. When there are more sellers than buyers, prices go down.

Whether or not what's happening now turns out to be short- term noise or a long- term trend remains to be seen.

As I noted in a widely read article on April 20th, legitimate speculation has a valuable and essential role in the markets. It's very different from the already illegal manipulation that the president seems to confuse with speculation.

Oil prices are driven by two groups of participants – hedgers and speculators.

The former are typically producers or suppliers with a vested interest in securing as high a price as possible for their output. They can also be manufacturers who depend on procuring as low a price as possible for their raw materials. Both parties are interested in delivery as a function of pricing.

Speculators don't care about delivery and, in fact, go to great lengths to avoid it.

They profit from price changes that would otherwise hold hedgers apart while also providing liquidity to other market participants.

Here's an example that may help bring this to life.

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Towerstream Corp. (Nasdaq: TWER): Is It Time to Buy This Mobile Technology Innovator?

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Steve Jobs was legendary for his attention to the smallest details. That included the packaging.

When the Macintosh was introduced, Jobs insisted the only way to remove it from the package was by its handle since it was the first "portable" computer.

Of course, the original Mac was far too heavy and bulky to actually carry around. But to Jobs, the handle was essential. It made the $2,500 device (in 1984!) more accessible and less imposing of a technological wonder.

It also tapped into that human concept of mobility.

Now you didn't have to go somewhere to use a computer; it came to you. Technology was not the master, but the companion.

It seems simple, but it helped open up a whole new world.

And now we see where Mobility 2.0 is taking us. Smartphones, tablets, and ultrabooks are changing the way we interact-not only with the Web, but with one another.

But it's not just the devices that are changing.

It's the infrastructure that allows them to receive signals, upload information and communicate across different platforms, etc.

Let's face it, the iPhone wouldn't be nearly as cool if it couldn't communicate or snap photos for your Facebook page. Or if you lost your connection every time you turned a corner on an augmented reality history tour of Chicago.

Behind the scenes is a complex infrastructure that makes it all work.

One company at the heart of Mobility 2.0 is an Innovation Investing newcomer, Towerstream Corp. (Nasdaq: TWER).

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Stocks Have You Worried? Here's What You Do

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Last Tuesday, USA Today ran a long Page 1 story under the headline "Invest in Stocks? Forget About It."

The story's message was loud and clear: U.S. stocks have risen more than 100% from their March 2009 bear-market bottom – including 25% since October and 9% so far this year – but most retail investors still wouldn't touch them with a 10-foot pole.

And with the Standard & Poor's 500 Index now on a losing streak – it's down about 5% from its April 2 high, according to Bespoke Investment Group LLC – you can bet that this "keep-stocks-away-from-me" sentiment has only intensified.

I mentioned this to Keith Fitz-Gerald, our chief investment strategist, during a private briefing last week.

True to form, Keith quickly said out loud what I had already been thinking.

"BP, those investors are making the mistake of their lives," he said. "In fact, I'll wager that they're actually compounding an already-huge mistake. They missed out on the most-powerful stock market rebound since the Great Depression – and they did that after having sold out at the very bottom of the bear market that preceded it, meaning they locked in some of the most-horrific market losses most investors have ever seen."

If you're in that group, don't fret: You can recover.

In fact, Keith helped me lay out a game plan just for you – one that will let you take charge, put the odds in your favor and even capitalize on approaching opportunities that Wall Street will be slower than you to see.

Let's take a look …

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The Gloss is Coming Off the Eurozone

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Europe, Europe, Europe…

I know, you're sick of hearing about problems in the Eurozone.

But the problem with Europe is that it won't go away. And if it does go away, we'll have even bigger problems. What a mess.

Of course, I'm talking about the Euro-currency zone and the European Union, not Europe itself.

I love Europe. I love every country in Europe. I love the different cultures. I love the different languages. I love the different societal models. I love the history of Europe.

And no doubt all the Europeans love all the same things about their Europe – except maybe some of their history.

But even more than loving Europe, Europeans love their own countries. Why? Because they have different cultures, languages, societal models, and differing views of their history. Vive la différence!

So, whose bright idea was it to gloss over (with shiny promises and, later, a shiny new currency) thousands of years of differences and shove all Europeans into a funnel in the hopes that they'd all come out the other end as one homogeneous mass of humanity?

Oh, that would be the bankers and financiers who wanted a United States of Europe so that the free flow of goods and services payable with a common currency would make everyone better off, and make themselves better, better off, by a lot of betters.

And now, what a surprise! There are differences all across Europe about, well, Europe and what it has become and where it has to go to get out of the mess it's created for itself.

How that's going to end is playing out right before our eyes.

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Nanotech Breakthrough Delivers "Cleaner" Oil

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A recent nanotech breakthrough means we won't have to rely on wind and solar as the main ways to fuel the coming Green Economy – to drive our cars and trucks and planes and keep our factories running.

And that's a huge relief.

You see, there's a problem with "clean energy".

Nothing in the world today can compete with the power provided by oil.

At present, it only takes a few barrels of oil to match the power a big windmill or a massive array of solar panels can provide.

And efficiency is just one problem. Unlike oil, it's very difficult to store clean energy to use (after the sun goes down or when the wind refuses to blow).

On the other hand, drilling for oil poses big risks. We want to keep our land and water clean and need to protect ourselves from the huge damage oil spills do to the environment.

Those safeguards, however, raise the cost of drilling and the price you pay at the pump. But what if you could drill for oil without concern for spills?

It would provide a boon to the entire U.S. economy and reduce our need for oil imports. We could save billions a year at the pump, lower the cost of making U.S. products, and create millions of jobs in the process.

No doubt, that would be a game changer…

That's why I'm happy to report that researchers recently invented tiny sponges that can soak up huge amounts of oil.

I predict that, in as little as a decade, these "nanosponges" will help the U.S. become more energy independent.

Too bad clean-up crews didn't have these two years ago to soak up the 200 million gallons of oil BP spilled in the Gulf of Mexico.

That was a big job, but these tiny new sponges – much smaller than a single human hair – could have handled it. In fact, their miniscule size is what gives these sponges their huge advantage. It's hard to imagine making sponges any smaller. After all, you can't see them individually without the aid of a powerful microscope.

Yet they can soak up many times their own mass… It's almost like being able to drain a swimming pool with an ordinary kitchen sponge.

Not only that, these sponges resist damage. You can actually abuse them without the material breaking down. Consider that a team of researches "squeezed" the sponges 10,000 times in the lab and found that they remained elastic and ready for use.

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