GenOn Energy, Inc. (GEN) posted second-quarter 2012 pro forma loss of 14 cents per share compared with a loss of 11 cents per share in the prior-year quarter. The company reported wider loss primarily due to a decline in contracted and capacity revenues in Eastern PJM and Western PJM/MISO; partially offset by higher realized value […]
Archives for August 2012
August 2012 - Page 14 of 20 - Money Morning - Only the News You Can Profit From
Silver Wheaton Tops, Net Slips - Analyst Blog
Silver Wheaton Corp.’s (SLW) second-quarter 2012 earnings of 40 cents a share topped the Zacks Consensus Estimate by 3 cents but trailed the year-ago quarter’s earnings of 42 cents. The Canada-based silver mining company said that its profit fell 4.5% year over year to $141.4 million. A decline in silver price weighed on the bottom […]
How Higher U.S. Food Prices in 2013 Will Starve the Global Economy
The epic drought – the worst in 56 years – that has wreaked havoc on more than half the United States is setting up 2013 to deliver record-high U.S. food prices that will affect more than just our grocery budgets.
As the drought continues to kill crops throughout the Midwestern U.S., a region known as the "corn belt" because it produces 40% of the world's crop, the problem reaches farther than the dry U.S.
Now the United Nation's Food and Agricultural Organization (FAO) warns that if countries, including the United States, restrict exports on concerns of higher grain prices, the world could face a kind of food crisis like the one seen five years ago.
"There is potential for a situation to develop like we had back in 2007/08," Abdolreza Abbassian, FAO's senior economist and grain analysts told Reuters. "There is an expectation that this time around we will not pursue bad polices and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/08. But if those policies get repeated, anything is possible."
Abbassian added, "The very strong appreciation of the dollar, and the surge in prices, is basically a double blow which is going to be quite stressful for some of the more fragile countries."
Rising Food Prices Stall Economic Recovery
The FAO Food Price Index jumped 6% in July after three months of declines. Grain markets got a boost from speculation that Black Sea grain producers, particularly in Russia, might levy export restrictions after a drought there walloped crops.
A study conducted last year by the National Center for Atmospheric Research, based on some 70 years of weather data, found that from heat waves to cold snaps to droughts, weather could cause up to a 1.7% rise or fall each year in the U.S. economy's gross domestic product. In 2011, not counting extreme weather events like tornadoes or hurricanes, the amount was $507 billion.
Jeff Lazo, one of the study leaders, told USA Today that the findings are significant "especially when GDP is growing a percent or so a year, if that."
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How Global Growth Fears Are Playing Out in the Stock Market Today
After a strong start to the week the stock market today is down on fears of a worldwide economic slowdown. Investors are dealing with weak reports from China and more signs that the drought's effect on U.S. crops is not over.
China, the world's second largest economy, has been a leader of global growth, but is showing more and more signs that its economy is slowing.
China reported its exports grew just 1% from last July, well below forecasts and much lower than the 11.3% increase in June. Import growth stalled as well, up only 4.7% compared to a year earlier, well below the June growth of 6.3%.
At home, the U.S. Dept. of Agriculture released a report today projecting an enormous drop in corn production and an ensuing spike in prices.
In its monthly World Agricultural Supply and Demand report, the USDA projected the corn harvest would fall by 2.2 billion bushels, or 22.6 bushels per acre, resulting in a harvest of 123.4 bushels per acre.
Analysts had anticipated a decline of 20 bushels per acre and a harvest of 126 bushels per acre.
The 2012-2013 crop yield is now expected to be the worst since the 1995-1996 season and prices are soaring.
The USDA said it now expects farm prices for corn to reach a record high this season of $7.50 to $8.90 per bushel, sharply higher than its July forecast of $5.40 to $6.40 per bushel.
The food crisis is affecting consumers across the world as the United Nations released a report on Thursday indicating that world food prices rose 6% in July.
2012 London Olympics Means Sweat, Tears… and Costly Medals Tax
As the 2012 London Olympics slowly comes to an end this weekend, the Americans still maintain their lead in medal winnings. As of Friday morning, the United States led with 90 medals comprised of 39 golds, 25 silvers and 26 bronze.
At this year's Olympics, the U.S. swimmers cleaned up with 31 medals while track and field is trying to catch up with its 24 medals. They may still have a chance.
And unless your completely tuned out, you'll know that swimmer Michael Phelps won six medals, leading the overall U.S. medal count.
But this doesn't just mean those Olympians are coming home as decorated, victorious athletes.
It means they're coming home to a pricey tax bill.
Turns out even Olympic achievements can't escape the U.S. Internal Revenue Service.
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The Dumb Money Hates Silver, it’s Time to Go Long
Speculators hate silver…
For the past year, the positive silver headlines have been few and far between.
Ever since the poor man's gold peaked near $50 in April of last year, it's become a despised metal.
Admittedly, it's been languishing near $27 since early May not far from where it was for the first time – in this bull market – back in late 2010.
But as I'll show you, right now a number of technical, seasonal, and sentiment indicators are pointing upwards for this volatile metal.
This could well be the critical turning point silver investors have been waiting for. One of these indicators is the resilient price of gold.
Let me explain.
The Silver/Gold Ratio
Silver has always pretty much been gold's lapdog and on a relatively short leash at that.
As a rule, silver prices usually follow the direction of gold. But as long time silver investors recognize, the moves are amplified both on the downside and the upside. Silver prices are simply more volatile than gold prices.
As for gold, since it peaked about a year ago, it seems to be drifting aimlessly in zombie land. For the better part of the year it's been consolidating about 16% below its previous peak of $1,900.
Today, at $1,600, gold is back to levels its first saw a whole year ago. What investors need to pay attention to is the gold to silver ratio.
Options Trading Strategies: Everything You Need to Know About Put and Calls
There are hundreds of option trading strategies. And they can be vastly different in terms of tactics and desired outcome.
Covered calls are very conservative, for example, while uncovered or "naked" calls are high-risk. How you select them depends on your risk tolerance and comfort level with different degrees of exposure.
But in fact, there are really only a few basic strategies, and everything else is built on these in some form.
At Money Map Press, we use eight general strategies (and "families" of strategies). These will cover most of the approaches you are likely to see and to take in your own trading.
But I do want to mention something first.
This same huge range of possible strategic designs is what makes the options market so interesting, challenging, profitable… and also nice and risky.
Are you surprised by my characterization of risk as "nice?"
Well, "risk" and "opportunity" are really the same thing, and every option trader needs to accept this.
If you want to go fast and get some serious movement, well, you have to climb on board the rollercoaster first, even if it scares you a little bit. Okay, here we go.
Today we'll take a deeper look at four of the eight options strategies we use on a routine basis.
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Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again
Tech giants like Apple, Google, and software producer Oracle have pushed their stocks to incredible heights since the tech bubble burst 10 years ago.
Microsoft, on the other hand, has done little for its investors in the last decade.
That's because the computing firm's massive size and saturation in the market (75% of computers sold in the U.S. already operate on some form of Windows) have hampered its ability to make any more lasting gains… until now.
A new technological advance that's owned – lock, stock, and barrel – by Microsoft could be about to change the company's fortunes… and the future of technology, too.
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Even with Wells Fargo (NYSE: WFC), Investors Should Read the Fine Print
For centuries, Wells Fargo (NYSE: WFC) has put its reputation above all else.
The San Francisco-based banking giant appeared to emerge relatively unscathed from the 2008 financial crisis. It was named Most Valuable Bank Brand in the United States and number two worldwide in 2012.
It's even a favorite and primary position in legendary investor Warren Buffett's iconic Berkshire Hathaway (NYSE: BRK.A, BRK.B) portfolio.
It has avoided the reputation of being manipulative, like its rivals – but that doesn't mean investors aren't getting burned.
An article last week from The New York Times showed that investors need to fully understand the risks of their investments, and can't always trust their bank – no matter the reputation – to look out for them.
Turns out investors who purchased an unusual security suffered steep losses, while Wells Fargo came out ahead. The risks, and there were many, were deeply hidden in the prospectus, a wordy and complicated document few investors understood.
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Election 2012: Reid Has Nothing to Lose in Romney Tax Returns Rant
Senate Majority Leader Harry Reid, D-NV, appears to have one sole mission until November: Find a way to get the Mitt Romney tax returns released.
The tax returns battle began in the primaries when GOP rivals asked the former Massachusetts governor to release the information. Romney has released the past two years' of returns and refuses to share more.
Now Reid has gone full force in questioning Romney's secrecy, and doesn't appear to have any reason to stop.
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