Archives for 2012

December 2012 - Page 9 of 185 - Money Morning - Only the News You Can Profit From

The Federal Reserve's Magic Act is Destroying America

by

When it comes to the Federal Reserve, it's not a matter of what you see is what you get. It's more a matter of what you don't see is what you'll end up getting.

Getting, as in up the you-know-what!

I'm talking about getting socialism shoved up our capitalist backsides, for one thing.

It's simple: We are about to go over the so-called fiscal cliff. Why? Because Congress can't figure out how to stop spending money it doesn't have.

Forget the whole revenue side of the equation. It's only part of the mix of fixes, and the only fix that matters ain't fixed.

Stop spending money you don't have and you don't have to tax people more to pay for a bunch of crap they don't need, don't want, and don't even know they're getting.

Oh, that would be because on top of what we are getting there's even more that we're not getting.

Congress' paymasters are getting pork and beans for whatever they want because that's how our Congress gets elected, by greasing the wheels of insiders to get taxpayer money for their private purses, enough to plentifully pay for campaigns.

But that's only the "private" side of spending.

The spending scheme has mushroomed by expanding (and paying sickeningly outrageous wages and benefits) an ever-growing number of government workers.

And by expanding entitlements beyond what we are entitled to. And by expanding welfare and "social programs."

Yes, I am including 99 weeks of unemployment, and accompanying food stamps, and free money for unwed mothers to have more kids so they can collect more free money, and free day care, and all the other free stuff that ain't free if someone (that's you and me) is paying for it.

All that spending creates a class of people, a voting class. And, guess what they vote for?

Duh, that would be more free stuff.

So what's this got to do with the Fed?

I'm glad you asked…

To continue reading, please click here...

Five U.S. Natural Gas Companies Set to Soar from an Export Boom

by

A U.S. Energy Department study released Dec. 5 has intensified the debate on what America should do with its abundance of natural gas – which could lead to huge opportunities for natural gas companies.

You see, critics of exporting natural gas have argued that exporting the resource to global markets would hurt the U.S. economy by raising natural gas and oil prices.

But last week's NERA Economic Consulting study, done at the DOE's request, showed the United States would get a positive economic boost from exporting liquefied natural gas (LNG), even under all possible scenarios in which exports are envisioned.

"Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased," the study found. "In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports."

The study could increase the chances of the Energy Department approving permits for natural gas companies to build LNG export facilities. Only one company has ever been approved to build an LNG export terminal, and at least 15 more LNG export projects are waiting for the green light.

Here's why companies are vying for a piece of the LNG export market.

How LNG Leads to Profits

LNG is simply natural gas in liquid form, and when it is liquefied the cooling process actually reduces the space LNG occupies by more than 600 times.

That makes transporting LNG on tankers much easier than moving natural gas through pipelines. It also allows companies to sell natural gas overseas, where natural gas prices at $11.83/MMBTU are about 3.5 times higher than U.S prices at $3.4/MMBTU.

Money Morning Global Energy Strategist Dr. Kent Moors says the export of LNG from the U.S. to global markets "is the single most significant change in the energy market for the next several decades."

"American operating companies recognize the LNG market will provide a major outlet for surplus production," said Moors. "Last week while I was in Moscow, Russian natural gas giant Gazprom again gave an estimate. They now believe that the U.S. will account for 9-12% of the world's LNG flow before 2020 from 0% today."

Natural Gas Companies to Watch

Some U.S. natural gas companies are ahead of competitors in setting up LNG-export facilities.

Investors who want to profit from LNG exports should keep an eye on these:

To continue reading, please click here...

This "Massive" Cybersecurity Attack Targets Your Money

by

If you haven't yet been the victim of a cybersecurity attack, you might be soon depending on what bank you use.

Computer security firm McAfee issued a report yesterday (Thursday) alleging a "massive cyberattack" was being planned for next spring.

According to CNNMoney, a gang of criminals headed by a Russian cyber mafia chief known as NSD had developed a powerful "Trojan Horse" program designed to take money out of victims' bank accounts and channel it into their own.

The plan, called "Project Blitzkrieg," was aimed at 30 U.S. financial institutions, including online payment company PayPal, and was based on a malware program that would clone an account holder's computer to make it look like the accounts were being accessed from the owner's home computer, avoiding security questions that would deny the criminals access to the accounts. The idea was to then access thousands of accounts simultaneously to take out small amounts of cash from each one that would total millions of dollars.

Project Blitzkrieg first came to light when notices were posted on hacker Websites looking for hackers to join the group planning the attack. They offered a share of the loot for service.

Once the plan was discovered, it seems to have "gone dark."

It is impossible to know if Project Blitzkrieg has been cancelled or whether it is proceeding under much tighter security but security companies, including McAfee, have been working with banks to bolster their security.

To continue reading, please click here...

After Hostess Brands, Who is the Next to Go?

by

The bankruptcy of Hostess Brands is just the latest example of once-famous U.S. companies that have gone out of business.

History's dustbin is full of familiar brands that are now extinct, including Studebaker, Woolworth's and Braniff.

Analysts blame changing consumer tastes for the plunging sales of Wonder Bread and Twinkies that led to Hostess Brands' demise.

Most companies fail because management keeps trying to sell the same products, using the same marketing and business model, long after the products have hit the skids.

So which famous brands might not be around much longer?

The Next Hostess: Four U.S. Brands That Could Disappear

Here are four U.S. brands that have fallen so far behind the competition they are in danger of disappearing in the near future.

1. Sears Holdings Corp. (NASDAQ: SHLD)
Sears has a proud history of pioneering markets and once dominated retail with its catalogs.

But in 2005, a buyout of Sears and discount retailer Kmart by fund manager Eddie Lampert spawned a spate of management missteps.

Sears and Kmart, with more than 3,000 stores in the United States, have been unable to compete against other low-cost retail chains like Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT).

Sears sales have been on a downward spiral for years. In fact, Sears has posted 23 straight quarters of declining same-store sales.

Meanwhile, Lampert has shown himself to be remarkably tone-deaf.

He recently bought a $40 million home north of Miami about the same time Sears decided to sell 1,200 stores and close another 173.

In 2011, Sears' American Customer Satisfaction Index score was 76 out of 100. Only Wal-Mart received a lower score.

Stockholders have shown their dissatisfaction with Sears. Shares have declined from about $180 to the low $40's.

2. RadioShack Corp. (NYSE: RSH)
At a time when more Americans are doing more of their shopping online, RSH clings to its traditional, brick-and-mortar retail store model.

To continue reading, please click here...

Gold Prices: Where to Now After the Sell Off

by

After the final Federal Open Market Committee (FOMC) meeting decision of the year Wednesday, gold prices got good news: the Fed will institute a new bond-buying program. February Comex gold increased $8.30 (0.5%) Wednesday and settled at $1,717.90 an ounce. And then the sell-off started. Gold fell 1.2% in the next session to $1,696.80, for […]

Read More…

How to Find a Job in this Economy

by

With the November U.S. jobs report showing unemployment at a still elevated 7.7%, there are still hundreds of thousands of Americans wondering how to find a job in this low-growth economy.

No question, it's a tough job market. As The Wall Street Journal noted, there are 3.4 jobless workers for each available position, nearly double the level back in December 2007, when Americans were enjoying a robust economy.

Hiring has slowed to a snail's pace. Jobs are scarce and employers are extremely selective.

With that in mind, LinkedIn (NYSE: LNKD), the world's leading social networking site for professionals, just released for the third consecutive year its list of the most overused buzzwords on job seekers' profiles.

If you're one of the masses worried about how to find a job in this economy, make sure you aren't making the following mistakes.

How to Find a Job: What Not to Do

If you tout yourself as a creative, organized, effective and motivated individual with extensive experience and a proven track record, who is also innovative, responsible, analytical and excels at problem solving, consider yourself a dime a dozen.

Those unoriginal and clichéd adjectives make up LinkedIn's Top Ten List of Overused Profile Buzzwords – in that order.

For the second year in a row, creative topped the list. In 2010, the list's debut year, with LinkedIn's member tally at 85 million (less than half its current count), extensive experience was at the apex.

But for job hunters, using these clichés could be killing their already slim chances.

To continue reading, please click here...

GameStop - Growth & Income

by

A healthy dividend yield of 3.6% and a long-term earnings growth projection of 9.3% make GameStop Corporation (GME) an interesting option for investors seeking both growth and income. Shares of this Zacks #2 Rank (Buy) achieved a 52-week high on Dec 12 and have returned of 21.4% year to date. Earnings estimates for this video […]

Read More…

2013 Natural Gas Forecast: Six Bullish Reasons Why Now Is The Time to Buy

by

Natural gas is developing into a very different market from oil, one that offers plenty of opportunities for investors to make big profits in 2013.

There are two contrasting dynamics when it comes to natural gas prices. First, the amount of recoverable volume has been accelerating, thanks to increasing unconventional (shale, tight, coal bed methane) reserves and technological improvements to extract it.

A rise on the supply side would generally reduce prices, especially if the number of operators continues to increase. More gas moving on the market from more suppliers results in a downward pressure on prices.

The second dynamic, however, is moving in the other direction, enticing the increase in drilling and expansion of infrastructure.

This factor considers the demand side, and there are at least six major trends colliding to increase the prospects for gas usage as we move through 2013.

As a result, I expect natural gas prices to see a 25% increase from current levels… here's why.

To continue reading, please click here...

Can You Really Trust Chinese Stocks?

by

At first glance, Chinese stocks that trade on U.S. exchanges are dirt cheap. But the truth is you need to take a long hard look before you leap.

Behind the curtain you could find that they've cooked the books.

In fact, last week, the U.S. Securities and Exchange Commission accused the Chinese affiliates of "the Big Four" auditing companies of breaking securities laws after they refused to produce the "work papers" related to accounting fraud investigations at nine Chinese companies.

Naturally, they all cried foul.

According to auditors from Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers producing this paperwork is illegal under Chinese law-hence the stalemate.

It's a dispute that highlights the cultural clash between the Chinese need for secrecy and U.S. anti-fraud efforts that demand more transparency.

The bottom line in this case, though, is quite a bit more simple: If there's no way to ensure the accounting practices at Chinese companies are candid, investors should completely avoid them.

Whether it's here or abroad, you should never invest in anything where you can't trust the numbers.

Chinese small caps are just the latest example now that this brewing accounting scandal seems to be coming to a head. The SEC has filed fraud allegations against 40 individuals or companies.

To continue reading, please click here...

FOMC Meeting: What the Fed Policy Changes Mean For You

by

The Federal Open Market Committee (FOMC) meeting ended yesterday (Wednesday) with two important changes to Fed monetary policy.

First, the central bank said it would increase the amount of quantitative easing by replacing Operation Twist, which ends Dec. 31, with outright purchases of long-dated Treasury bonds.

Under Operation Twist, every month the Fed sold $45 billion in short-term Treasury bonds and notes and bought $45 billion of long-term Treasury bonds in an effort to keep long-term interest rates low.

Because the Fed funded its purchase of long-term bonds with the sale of short-term bonds and notes, no new money was created.

However, outright purchases of long-term bonds will create new money-$45 billion every month-and, by concentrating its buying at the long end of the yield curve, the Fed should be able to keep long-term interest rates low.

The Fed also said it will continue to purchase $40 billion of mortgage-backed securities each month, creating a total of $85 billion in new money from these operations monthly.

That means QE4 is here.

Starting in January, the Fed will be more than doubling the amount of money it is pumping into the economy. Happy New Year!

Second, the Fed set unemployment and inflation "thresholds," instead of setting a date for when the central bank expects to be able to raise interest rates. What this means is that the Fed will not raise interest rates unless unemployment is 6.5% or less or inflation is more than 2.5%.

By setting thresholds where monetary policy might change, the Fed is attempting to improve its communications with the public.

To continue reading, please click here...