Archives for November 2012

November 2012 - Page 19 of 20 - Money Morning - Only the News You Can Profit From

The Hottest 2013 Natural Gas Story You've Never Heard

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The story for natural gas companies in 2013 is an improving one.

As Money Morning Global Energy Strategist Dr. Kent Moors explained last month, he believes natural gas prices in the U.S. will come back strong next year.

But the natural gas story is not just an American one.

Ask the average energy executive what region he or she is really excited about today and the answer you will get is one that was not even on many companies' radar a few short years ago – and one of which many investors are unaware.

2013 could be the year when investors become aware of the vast potential of the prolific natural gas fields in this region, potential that will be unlocked when gas from those fields is someday turned into liquefied natural gas (LNG) and sold to the energy-hungry markets of Asia.

I'm talking about the offshore waters of East Africa.

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October Jobs Report: Reality vs. Politics

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Today's October jobs report from the U.S. Bureau of Labor Statistics (BLS) – the last before next Tuesday's presidential election – has something for each of the major party candidates.

The BLS report showed a net increase of 171,000 jobs, beating the average analyst estimate of 125,000 and exceeding the net increase of 148,000 jobs seen in September.

The unemployment rate increased to 7.9% from 7.8% in September as more people returned to the labor market.

Given the tight race for the presidency, there is likely to be a lot of partisan chatter on the results of the October jobs report. The data may even sway some undecided voters to lean one way or the other.

The unexpectedly large number of net new jobs created will certainly be cited by U.S. President Barack Obama as proof that his policies are working and that he should be re-elected.

The uptick in the unemployment rate to 7.9%, just above the 7.8% level where it was when President Obama took office in January 2009, will surely be cited by Republican candidate Mitt Romney as evidence of President Obama's failure to revive the economy.

But before you let these numbers influence your political decisions, here are some often overlooked truths behind the jobs report.

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Strong 3Q at AXIS Capital - Analyst Blog

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AXIS Capital Holdings Limited (AXS) reported third quarter 2012 operating earnings of $1.63 per share, substantially beating the Zacks Consensus Estimate by 62 cents and surging ahead of 74 cents earned in the year ago-quarter. Operating income was $201 million in the quarter, soaring nearly 112% over the prior-year quarter. The quarter experienced low level […]

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Union First Market Bankshares - Value

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Union First Market Bankshares Corporation (UBSH) reported a third-quarter earnings surprise of 12.1% last month, which means that this regional bank has now beaten quarterly estimates in 9 of the last 10 quarters. Shares have been on the rise since the announcement, while rising earnings estimates helped UBSH become a Zacks #1 Rank (Strong Buy) […]

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What Hope Means in Japan These Days

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[Kyoto] – Frustrated by a system that has trapped them in decades of low to no growth, an entirely new generation of Japanese may be working with the most precious of all resources – hope.

They're taking matters into their own hands and going around the traditional Japanese way of doing things.

That's good.

The so-called "Lost Decade" is now entering its 3rd lost decade following 8-10 separate bailout failures, depending on how you count the various initiatives over the years.

Growth remains a paralyzed version of its former self with the nation's GDP roughly the size it was in 1990.

Worse, many Japanese companies like Panasonic and Sony, once at the vanguard of innovation, now find themselves scrambling to keep up with clever rivals who have taken the lead and who now threaten to push them out of the global industries they once dominated for good.

Combined public, private and corporate debt now approaches 500% of GDP.

Roughly 35% of the working population here remains trapped in arubaito, or part- time work. T hat's a far cry from the vision of lifetime employment that once dominated the corporate landscape.

Some, like Tadashi Yanai, who founded and heads the Japanese brand Uniqlo (pronounced yu-ni-klo), are deemed "young thinkers" bent on change through the sheer force of will and the economic means to bring it about. Yanai is actually 63 years old.

Speaking Truth to Power

Others are truly young, like Osaka's controversial mayor, Toru Hashimoto. At 43, he's as frank as they come in the staid world of Japanese politics where change is nearly impossible to come by.

To give you an example of what I am talking about, consider Hashimoto's recent observation that the Japanese political system is "crap." Not "difficult," not "worth consideration," not deserving of "careful thought," as would be the traditional ways the hyper- polite Japanese have expressed their opinions — but "crap" as in the four- letter variety.

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Why Hurricane Sandy May Not Be All That Stimulating

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Invariably, every major disaster comes with the pundits who promise it brings a silver lining.

With a price tag of $50 to $70 billion, some economic forecasters are already rejoicing about the economic "stimulus" that rebuilding from Sandy will bring. If only it were so.

In fact, this paradox is well worn since it involves one of the central conflicts of economics itself. You may recognize it as a battle between Maynard Keynes vs. Frederic Bastiat.

It involves Bastiat's famous "Parable of the Broken Window".

You see, according to Bastiat (1801-50), the glazier who fixes the broken shop window earns money from it, and so he regards the broken window as economically beneficial. However, that's only half of the story.

It doesn't take into account what the shopkeeper might have done with the money he used to pay the glazier to fix the broken window.

As Bastiat points out there is a "hidden cost" within the broken window itself. The broken window made the shopkeeper that much poorer.

What's more, if the glazier secretly paid the boy who broke the window to generate the "new" business, he would be effectively engaging in theft from all the town's shopkeepers.

On a net basis, it's a no win ballgame.

Yet that is the effect of such misguided policies like the "cash for clunkers" scheme of 2009, which paid consumers to junk their still-usable automobiles long before their time.

Likewise, it's found in the same line of argument that somehow World War II rescued the United States from the Great Depression because it fails to properly account for the immense destruction of wealth (admittedly, mostly outside the U.S.) the war caused.

It seems easy enough—unless you're a Keynesian economist.

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A Positive October Jobs Report Will Seal an Obama Victory

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With less than five days to go until America casts its vote for U.S. president, Friday's October jobs report could have a major impact on an election hinged upon the economy and, more importantly, employment.

After last month's highly-questioned jobs report, where only 114,000 jobs were added but the unemployment rate ticked down 3 percentage points to 7.8%, many have cried foul.

From Donald Trump to Jack Welch the shouts of conspiracy and manipulation were voiced. To many the only explanation was that the report was indeed "cooked."

"I agree with former GE CEO Jack Welch, Chicago style politics is at work here," Rep. Allen West, R-FL, posted on his Facebook (Nasdaq: FB) page after last month's strong report. "Somehow by manipulation of data we are all of a sudden below 8% unemployment, a month from the Presidential election."

Whether or not those numbers were manipulated, the fact remains that unemployment dropped below 8% for the first time in over three years.

That was a significant milestone for President Obama and revived his campaign following Mitt Romney's surge in polls since the first debate.

Another move downward in the unemployment rate, or simply staying below 8%, could be enough to clinch an election that has become almost a dead heat.

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Netflix (Nasdaq: NFLX): Is Carl Icahn a Madman or Genius?

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Netflix Inc. (Nasdaq: NFLX) shares rallied 11.4% in late trading on Wednesday to close at $79.24 following news that activist investor Carl Icahn made a big move on the stock.

Icahn took a nearly 10% stake in the company through shares and long-term, over-the-counter call options mostly purchased at prices below $60.

In afternoon trading on Thursday, Netflix shares were down slightly, trading just under $79.

That means that Icahn and his partners are sitting on gains of between 30% and 44% on Netflix shares and call options purchased between Sept. 4 and Oct. 25, according to Schedule 13D filed with the U.S. Securities and Exchange Commission (SEC) yesterday.

That alone should put Icahn firmly in the genius category.

What is Carl Icahn's motivation for acquiring his stake in Netflix?

"I believe that there is going to be great consolidation between Netflix and, everybody's read about it, Amazon or Microsoft or Verizon or Google, there are so many possible combinations," Icahn told Bloomberg TV.

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Protect Your Money from the Fiscal Cliff Attack on Dividends

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Anyone not living in a cave by now knows about the ominous tax-cut situation – fiscal cliff 2013 – that could be unleashed on the U.S. economy early next year.

That is assuming Congress does nothing, and, let's be honest, doing nothing is one thing in which Congress is truly proficient.

Unfortunately, one of the tax cuts that will sunset should the fiscal cliff become a reality is the dividend tax break that went into effect in President George W. Bush's first term.

This is not an endorsement of one candidate or party over the other. After all, the economy could fall off the fiscal cliff regardless of the outcome of next week's presidential election.

However, there is little refuting the fact that the dividend tax break has been a winner for investors.

The top dividend tax rate is currently 15%, but for the most fortunate among us, that rate could surge to 40% under the fiscal cliff scenario.

In other words, letting the dividend tax cuts expire amounts to a government boondoggle of epic proportions that even Uncle Sam would have a hard time topping.

Here's why.

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What to Expect from Gold Prices If Romney Wins Election 2012

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With the presidential election less than one week away, market watchers are estimating what kind of impact a Mitt Romney win would have on the markets, including gold prices.

Gold is expected to continue its rise in 2013, reaching up to the $2,000 mark – or higher.

On Oct. 23, Deutsche Bank analysts called for gold to exceed $2,200 an ounce next year. This came in light of the stimulus measures by central banks.

They wrote in a research note via Commodity Online, "While we have targeted gold prices moving above $2,000/oz. since the beginning of 2011, we believe the Fed's open-ended program of QE announced last month increases our confidence that a surge in the gold price above this level is only a matter of time."

Yesterday (Wednesday), December gold futures closed at $1,719.10.

But if we fast-forward to January, even March 2013, if Romney wins Election 2012, would gold prices be able to continue their upward run?

Here's what a Romney win would do for the yellow metal.

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