Archives for December 2012

December 2012 - Page 12 of 17 - Money Morning - Only the News You Can Profit From

Tax Fight Remains Biggest Roadblock in Fiscal Cliff Deal

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The fiscal cliff countdown clock tells us there is just 21 days left for Democrats and Republicans to come to some sort of deal.

With little resolved after months of back-and-forth discussions, which have recently turned into more heated exchanges, U.S. President Barack Obama has taken over the role of leading negations for his party, while Republican House of Representatives Speaker John Boehner is chief negotiator for the GOP.

The two men met for an unplanned White House meeting Sunday. Little details were made public regarding the powwow, but from duplicate statements from both sides, it doesn't appear much was accomplished.

The following messaged was delivered by White House spokesman John Earnest as well as an aide to Boehner. "This afternoon, the president and Speaker Boehner met at the White House to discuss efforts to resolve the fiscal cliff. We're not reading our details of the conversation, but the lines of communication remain open."

Statements from each side Monday made it clear core tax and spending issues remained unresolved, but both sides maintain they are waiting for details from the other side.

Democrats and Republicans are basically saying to each other, "it's your move."

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Stock Market Today: U.S. Markets Flat; Focus Shifts to Europe

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The stock market today opened quietly in the United States as investors prepared for a very busy week ahead.

Just after the opening bell on Wall Street, all three major indexes were flat.

As Barron's noted, the average daily volume on the NYSE last week fell to 3.3 billion shares, compared with 5.5 billion that changed hands during the same period in 2009, when we were slowly emerging from the Great Recession.

The "fiscal cliff," which could drain $607 billion from the U.S. economy through tax increases and spending cuts, dominated U.S. news and moved markets.

But the fiscal cliff, along with the $16.4 trillion national debt and the growing federal deficit, took a back seat Monday as the focus shifted to Europe.

Anxious market participants kept a wary eye on Italy after Prime Minister Mario Monti announced he is resigning, citing a loss of support in Parliament. Italian bonds plummeted with the yield on the 10-year rising the most since August.

French, Belgian and Austrian 10-years dropped to euro-era lows, and Spain's debt also declined.

Bucking the trend was Greece, where bonds gained after the ailing country pushed further out the deadline for buying back some of its mountainous debt.

Elwin de Groot, a senior economist at Rabobank Nederland in Utrecht, Netherlands, told Bloomberg News: "We are seeing a selloff but I wouldn't call it a panic yet. The auction this week could be an interesting litmus test for investors. This has also created uncertainty for
Europe-wide policymaking."

Italy's deep-rooted economic troubles and political drift have been taken too lightly, a bevy of analysts warned.

As Nomura Securities' Silvio Peruzzo wrote in a note to clients, "Markets have grown too complacent about Italy, in our view."

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Warning: The Fiscal Cliff Could Cost You Your Job

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While Americans stash extra cash to prepare for the economic effects of the looming fiscal cliff in 2013, another more immediate concern has developed: How many people will get laid off as companies brace for spending cuts and tax hikes?

The fiscal cliff will pack a double whammy to some businesses. Companies in certain tax brackets will be paying more to Uncle Sam, while some will see their government funding disappear.

The substantial fiscal cliff effect has prompted firms to rein in spending, delay projects, defer bids – and cut staff.

In fact, a recent study from Ernst & Young, the National Federation of Independent Business, the U.S. Chamber of Commerce and other business advocates revealed the fiscal cliff could slash 710,000 jobs from the already beleaguered job market.

It's already starting…

According to a Bloomberg News, companies in North America cut more than 62,000 jobs from Sept 1 through the end of October… the biggest two-month slashing of jobs since the beginning of 2010.

Further in the same time period, the computer industry cut more than 40,000 jobs… the transportation industry more than 33,000 jobs… and the insurance more than 7,000 jobs – all tremendous job loss increases over the same period in those industries last year, according to the USA Today.

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Gannett Co. - Value

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Gannett Co., Inc. (GCI) is diversifying its business model by adding new revenue streams in an effort to adapt to the changing face of the multiplatform media universe. These endeavors have helped this Zacks #1 Rank (Strong Buy) media conglomerate to gradually emerge as a true value pick, as is evident from its compelling valuation, […]

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Will the Government Confiscate Your Gold?

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Whenever I write about gold, I can be certain of two things.

First and foremost, I know that readership will be exceptionally high. The interest in gold, silver and other precious metals is as intense as I've ever seen.

And, second, I can be sure that, in the days that follow, I'll receive a slew of e-mails, phone calls and letters from folks asking some variation of the same three questions:

  • What are the chances that the federal government will confiscate my gold?
  • Can I put gold in my IRA?
  • And how much gold should I hold?

The bottom line is that a lot of folks are investing in gold for the first time.

To give those newcomers a unique (and informed) perspective on these questions, I picked up the phone and called industry colleague Rich Checkan at Asset Strategies International (ASI), a precious-metals and foreign-exchange dealer that operates out of Rockville, Maryland … just down the highway from our own offices here in Baltimore.

ASI is a veteran player, having just celebrated its 30th anniversary, so I was certain that Rich and his staffers would have something of value to say on these topics.

On that point, I was right.

How the Biggest Investors Are Playing the "New World Order" in Oil and Gas

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Thanks to the fracking boom of the last few years North America is now on a path toward energy self-sufficiency.

In fact, the International Energy Agency (IEA) now believes that, thanks to astonishing growth in oil and natural gas output, the U.S. could even become a net exporter of natural gas by 2020, and even net-energy self-sufficient by 2035.

According to IEA estimates, the U.S. is already the world's No. 2 natural gas producer.

The IEA has also indicated that increasing production from Canadian oil sands means North America could become a net oil exporter. And by 2035, it's forecast that nearly 90% of Middle Eastern oil exports will find a home in Asia.

These tectonic energy shifts have not gone unnoticed by OPEC and large state-owned energy companies. Major Asian and Middle Eastern interests have already made major acquisitions in Canada and the U.S., with an eye towards many more.

Every day it seems the energy scene is changing at a lightning pace, creating a new world order in energy.

So to gain further insight into this rapidly changing climate, I recently sat down with energy consultant Peter Barker-Homek, a true energy insider.

Peter is the founder of Eta Draco, an advisory firm focused on building operations and capital structures to provide for enduring growth and to anticipate cyclical downturns for small- to medium-sized enterprises.

Mr. Barker-Homek knows more than a thing or two about the global energy sector.

As the previous CEO at TAQA, the Abu Dhabi national energy company, and a seasoned energy executive in a Fortune 20 company, Peter has completed $40 billion in energy-related transactions.

He has more than 20 years' experience in major markets worldwide, and even served in the U.S. Department of State and the U.S. Marine Corps as an Officer/Pilot. He has appeared on CNN, BNN, CNBC, Sky News, Bloomberg TV, BBC Radio, Al Jazeera, and CrossFire, and is regularly cited in industry journals and periodicals.

I think you'll enjoy what Peter had to say during our recent Q&A.

If I did my job right, some of it may even shock you.

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Is the Bond Bubble About To Burst?

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When the global economic crisis hit in 2008, investors everywhere abandoned the stock market and piled into bonds.

Treasury sales boomed, thanks to their perceived relative safety and stability. Since early 2009, investors have poured more than $500 billion into U.S. bonds.

There was just one problem…

All that demand pushed bond prices way up, to what analysts feel are unsustainable levels, and sunk yields to multi-decade lows. (Short-term bonds pay virtually nothing right now. The Vanguard Prime Money Market Fund (VMMXX) today yields just 0.04%!)

Indeed, the combination of large supply, enormous demand, and unsustainably inflated bond prices has formed nothing less than a bubble in the U.S. bond market. Now there's only one way bond prices can go – down.

It doesn't take a financial whiz to figure this out.

In fact, this simple chart below tells you everything you need to know about the Treasury Bond market.

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Lincoln Electric Hikes Dividend - Analyst Blog

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Lincoln Electric Holdings Inc. (LECO) maintained its trend of raising its dividend annually, by announcing a 17.6% (3 cents) hike in its quarterly dividend to 20 cents from the prior dividend of 17 cents. The increased dividend will be paid on December 28, 2012, to stockholders of record on December 17, 2012. The company has […]

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