Archives for June 2012

June 2012 - Page 6 of 16 - Money Morning - Only the News You Can Profit From

U.S. Economy 2012: What's Ahead for Debt, Banks, and Stocks

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In addition to monitoring Wall Street's latest tales of greed, Money Morning Capital Waves Strategist Shah Gilani has been following how the Eurozone's sovereign debt mess will affect the U.S. economy in 2012.

Shah explained last month how the Eurozone was involved in a game of "chicken" that could wreak havoc on the region's bankers.

"Germany has basically said to Greece, we aren't going to ease up on the austerity requirements imposed on you so you could get more money from all of us, so, if you think that by electing a left-wing group of groupies who are campaigning on easing your burdens by leaning on us, your fed-up creditors, go lean on Atlantis instead, cause that's where you'll end up… underwater, and lost," wrote Shah.

"The Greek politicians – at least the lefties throwing curveballs – think there's no way the Germans will let them exit the currency zone, and of course don't want them to exit the European Union," Shah continued. "They are saying to the population, elect us, we'll spit on their boots and they'll bend over to shine them themselves. And, in the end, we the people will prevail."

Shah's take on the Eurozone debt crisis caught the attention of Steve Pomeranz, a renowned financial advisor and investor advocate based in southeast Florida.

Steve's not only a subscriber to Shah's free newsletter, Wall Street Insights & Indictments, but he also hosts the "On the Money!" radio show.

The "On the Money!" radio show is a weekly program dedicated "to protect you from self-serving forces within the financial services industry."

Pomeranz interviewed Shah earlier this week to discuss more of what's going on in Europe, and what will happen in the U.S. economy in 2012. Shah and Steve discussed the "extend and pretend" game being played in Europe and at home.

"There is no easy resolution to the fiscal problems of these nations, including the United States," Shah told Steve.

Shah said there's one thing right now nations can do to stabilize financial institutions – but even that option is a "dangerous game." Shah detailed how nations' plans to deal with debt are intended to help banks, and how they will actually play out.

He explained how these issues will play into the course of the U.S. economy in 2012.

Shah also analyzed the following hot topics:

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Here's When to Expect an Operation Twist Market Rally

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After the U.S. Federal Reserve announced yesterday (Wednesday) that the central bank would extend Operation Twist, the markets dipped then climbed back to finish basically flat for the day.

Today all three major indexes are down nearly 2% or more. The Dow Jones sunk more than 250 points, or 1.96% to 12,573.57. The S&P 500 fell 2.23% to 1,325.51.

So when will the fun begin, if ever, following this new dose of stimulus?

That's what Money Morning Executive Editor William Patalon III wanted to find out.

In his Private Briefing newsletter yesterday, he asked Money Morning Chief Investment Strategist Keith Fitz-Gerald what investors should expect following this latest Fed move.

Bill wanted to know three things about the second round of Operation Twist:


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Six Alarming Tax Increases You Can Expect on January 1st

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Get ready. On January 1, 2013, "Taxmageddon" is set to strike.

If you're not worried yet, you should be.

Here's why…

January 1st is when six alarming tax increases and hundreds of drastic spending cuts could begin draining as much as $607 billion out of the pockets of American taxpayers.

"It's a fiscal tsunami," says Money Morning's Don Miller. "The damage will be so widespread it could derail the entire U.S. economy."

The tax changes won't just slam a few income brackets. They'll reach all taxpayers.

Every one of the existing income tax brackets will be ratcheted up – by as much as 50% in some cases. And for most American households, these tax increases could mean thousands of dollars in lost income.

"If Congress fails to act, Taxmageddon assures that we will all be paying higher taxes next year," says Miller.

Along with higher income taxes across the board, specific increases will hit retirees, investors and wage earners even harder.

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How Obscure "Fallen Angel" Penny Stocks Can Make You Rich

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Don't waste your time scouring through the thousands of pennies found in the Over-The-Counter Bulletin Boards or Pink Sheets…

The best penny stocks can be found in plain sight… on the Dow Jones, NASDAQ or any other major exchange. These stocks are fully regulated…can be easily traded with a broker… and are very cheap. Under $5 a share.

I'm talking about "Fallen Angels."

A "Fallen Angel" is a high quality-company whose stock price has been beaten down due to market forces out of its control. They are typically off the radar screens of the big institutions. Yet these stocks have extremely strong fundamentals and offer hellacious upside.

Pick one up at the right time, and you could see your profits soar.


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Wall Street Says Facebook Shares Will Double. But Here's The Shocking Truth

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Wall Street analysts now predict that Facebook share prices will double this summer.

If true, the rally could erase some losses for the millions who got ripped-off in the most controversial IPO in history.

But global financial expert Keith Fitz-Gerald warns: [ppopup id="70011"]"Don't get suckered again."[/ppopup]

Fitz-Gerald, author of the best-selling book "Fiscal Hangover, How To Profit From the New Global Economy," says Facebook is still way overvalued… and in bigger trouble than most people realize.

In fact, Facebook's May 16 IPO, which bilked investors out of an estimated $35 billion in the span of a week, exposed some enormous holes in the social network's basic business model.

"Start-ups are already cannibalizing Facebook's user-base," Fitz-Gerald points out. "Furthermore, the company cannot possibly dominate the mobile markets that are becoming the preferred channel for millions of people."

So that leaves one question investors want to know: What is Facebook really worth?

To answer that question, Fitz-Gerald dug deep for some hard data… data Wall Street analysts like Morgan Stanley and Goldman Sachs suspiciously overlooked.

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Stock Market Today: Avoid the Stock Slump with this 40% Gainer

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The stock market today (Thursday) is trying to recover from a disappointing announcement yesterday by the Federal Reserve, which lowered its economic outlook and extended Operation Twist.

The markets had hoped for something more out of the two-day FOMC meeting and responded negatively to the stimulus.

Also impacting the markets today are a number of weak economic reports including disappointing manufacturing indicators from overseas.

Europe's PMI index, based on a survey of purchasing managers in both the services and manufacturing industries, held steady at 46 which is near a three-year low. A measure of specifically euro-region manufacturing fell to 44.8 from 45.1 – another three-year low – in May, London-based Markit Economics said today in an initial estimate.

Both of those gauges were dragged down by a decrease in Germany's manufacturing output.

China also reported a preliminary PMI index, which if correct at 48.1 would be its lowest level in seven months. PMI levels below 50 indicate contraction.

In the U.S. existing home sales fell 1.5% in May, weekly initial unemployment claims remained depressingly high at 387,000 and the Fed's Philadelphia economic index fell to negative 16.6 in June, its lowest level since August.

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Is the Fed's Operation Twist Just the Start of More Stimulus?

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The Federal Open Market Committee (FOMC) ended its two-day policy meeting Wednesday announcing an extension of Operation Twist, the policy of swapping short-term Treasury securities in its reserve for bonds with a longer maturity.

The program, set to expire June 30, will now continue until year's end. During the next few months the Fed plans to buy some $267 billion worth of bonds.

In a press conference after the meeting, Federal Reserve Chairman Ben Bernanke indicated the Fed sees weaker times ahead. Its outlook has changed, and not for the better.

It was not what investors wanted or needed to hear.

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The Best of the Best Dividend-Paying Stocks

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Over the past few years there have been unprecedented swings in the major indexes, scaring some investors out of the markets altogether.

What people don't realize is that successful investing is a matter of continuous performance, not instantaneous performance.

That's why we like dividend-paying stocks.

Over time, dividends and reinvestment can account for 85%-90% of total stock market returns.

In some cases, the dividends are so steady and increase so much that you actually make more in dividends than you paid to buy the stocks that produce them.

But before you go hunting for the best dividend-paying stocks, let's set some ground rules for evaluating which ones are most valuable.

First, a good cutoff is a stock with 3% yield or more, and a payout ratio less than 60%. Any higher payout ratio would indicate that the company cannot sustain the dividends, manage debt and grow at the same time.

Second, look for companies that have price/earnings ratios of less than 25 and a solid history of paying dividends.

This establishes a solid benchmark for dividend stocks and their fundamentals. Sometimes a dividend stock can look great because it has a 10% yield, but you have to look at the other numbers to decide if it's a worthy investment.

With that said here are some of the best dividend-paying stocks out there right now.

Investing in Graphene Stock: How to Get in on this "Miracle Material"

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Last December, Money Morning technology specialist Michael A. Robinson told you about a radical new material that would soon have a pervasive impact on the U.S. economy – and the entire human race.

Robinson detailed how this new material is so powerful and versatile, it's going to play a key role in new products for the U.S. military, leading tech companies, and medical researchers.

"Stronger than steel and lighter than a feather, this high-tech medium will shape virtually every part of our daily lives by the end of this decade," said Robinson. "The possible uses are almost limitless."

It's called graphene, and it's one of the most versatile elements ever created – useful in a multitude of applications and potentially capable of redefining the world as we know it.

The "Miracle" of Graphene

Specifically, graphene is a two-dimensional structure made from the carbon atoms in graphite – the stuff in pencil leads – but bonded together in honeycomb-like sheets a mere one atom thick.

Imagine a sub-microscopic chicken-wire mesh, but made up of carbon atoms and their connectors rather than metal.

First envisioned back in 1947, graphene didn't become a reality until 2004, when several teams of researchers demonstrated that single layers of carbon atoms could actually be isolated.

Now there's a mad dash to exploit the unique properties of the material, which are impressive:

How the Apple (Nasdaq: AAPL) iPhone Will Save Millions of Lives-and Make Early Investors a Bundle

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It's hard to believe, but it's true. The iPhone turns five years old next week.

Since its official launch on June 29, 2007, Apple Inc. (Nasdaq: AAPL) has sold well over 180 million iPhones. Hands down, it's the most successful mobile phone ever launched.

But what most investors don't realize is the huge impact the iPhone has had on medicine.

The fact is, more than any other product on the planet, the iPhone is driving a whole new sector called mobile healthcare, or mHealth for short.

With an iPhone in hand, it will redefine how doctors and other health-care pros work with their patients.

But here's the big payoff: mHealth promises to save millions of lives as doctors use it to detect and treat diseases much more quickly than they could with old-school devices.

These radical advances will undoubtedly make lots of early mHealth investors quite rich.

But don't take my word for it….

A trade group known as GSMA says the mobile healthcare sector will reach total sales of $23 billion by 2017.

Of course, phones and tablets that use Google Inc.'s (Nasdaq: GOOG) Android operating system also could play a big role in the sector.

But at this point the iPhone remains the clear leader in this rapidly growing market.

It's So Much More Than a Phone

That's why I'm glad to introduce you to a startup firm that has staked much of its future on the iPhone platform.

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