Archives for January 2013

January 2013 - Page 16 of 20 - Money Morning - Only the News You Can Profit From

Four Safe Banks You Can Buy Right Now

Between the financial crash of 2008 and the Eurozone debt crisis, big Western banks have turned into pretty dodgy investments.

I'm talking about the banks that were "too big to fail."

These days the profits of these fine institutions are largely dependent on not writing off too many bad loans or incurring huge fines and lawsuits from various past misdeeds.

But that's not the only reason not to like them. Western economies are barely alive, making new lending a highly competitive and marginally profitable business, even before the loan write-offs arrive.

What's more, the investment banking businesses just adds risk from overpaid, over-testosteroned traders, making matters worse.

However, all is not lost. There is one region where the banks are actually safe to buy.

It's in Asia where economic growth remains robust, interest rates remain reasonable, and banking remains a business to invest in. Unfortunately, many U.S. investors are not aware of the opportunities Asian banks provide.

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Dividend Re-Investment Plans (DRIPs): How Fast Can These Accelerate Your Income?

The real secret to long-term investing success is income – and with stocks, that means dividends.

Numerous studies, both academic and financial, have found dividends accounted for more than 60% of total U.S. stock market returns since 1870.

More recently, a study by Ned Davis Research covering the period from 1972 through 2008 found that dividend-paying stocks provided an annual return of 7.6% versus a mere 0.2% for non-dividend-paying shares.

What's more, companies with a record of steadily raising their dividends returned an even more impressive 8.6%.

But if you really want to boost your returns, investing in DRIPs – dividend reinvestment plans –is a safe, steady road to building true wealth.

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Will Jack Lew be the New U.S. Treasury Secretary?

U.S. President Barack Obama is preparing to nominate Jacob "Jack" Lew as the new U.S. Treasury secretary, according to a number of reports released today (Wednesday.)

The nomination could be announced as early as Thursday.

Lew would replace current U.S. Treasury Secretary Timothy Geithner who made it known he would leave the White House by month's end.

Sources say President Obama had to convince Geithner, the former head of the New York Federal Reserve Bank, to remain in the position for the duration of the president's first term. Geithner was ready to leave after the nasty debt fight during the summer of 2011.

The appointment comes as the budget battle on Capitol Hill is heating up.

Lew would immediately have to tackle major debates in Washington, focusing on what to do with the country's $16.4 trillion debt ceiling (reached on Dec. 31) and how to handle the $1.2 trillion in automatic spending cuts.

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CES 2013: Check Out This Year's Five Most Outrageous Gadgets

You know you're going to find a lot of crazy gadgets at the annual Consumer Electronics Show, and CES 2013 has delivered.

Some of the products are actually clever and could do well in the marketplace. Some are simply absurd, proof that just because something is possible doesn't mean it's a good idea.

Sorting through the avalanche of CES 2013 reports coming out of Las Vegas this week,

we've identified five of the most head-turning things people have been talking about...

Five Stock Market Charts Bears Have Been Waiting For

As the bull market tries to enter its fifth year, many are wondering if it still has legs – but a handful of stock market charts warn there's high risk of a coming sell off.

In fact, a recent report from Credit Suisse Group AG (NYSE ADR: CS) outlined 10 technical factors that show the market is at its most risk-on level since just before the stock market crash that began in 2007's third quarter.

"Many of our tactical indicators point to a consolidation phase in the equity markets, in the near-term," Credit Suisse Global Equity Strategist Andrew Garthwaite said in a note to clients.

For a closer look at this bearish forecast, check out these five stock market charts pointing to a pullback.

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Fuel-Efficient Car Owners: Beware this Proposed Tax

Owners of fuel-efficient cars in Oregon could soon face a new tax. Under a proposal being considered by the state Department of Transportation, the tax would be based on miles driven. It's designed to make up for the lower gas tax tab for drivers of hybrids and other fuel-efficient vehicles. Money Morning Chief Investment Strategist […]

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Stock Market Today Rallies on this Encouraging News

The stock market today (Wednesday) opened higher for the first time in three days, on the heels of better-than-expected numbers from the Alcoa Inc. (NYSE: AA) earnings report.  

Shortly before noon, the Dow Jones Industrial Average was up 77 points, the Standard & Poor's 500 Index rose 6 and the Nasdaq was better by 17.

Aluminum producer Alcoa posted Q4 earnings after the close Tuesday of six cents a share, in line with expectations. But sales came in ahead of forecasts at $5.6 billion. Shares rose 2% after hours and added another 1% in early trading Wednesday.

Alcoa's results are viewed as the start of earnings season.  Alcoa's positive Q4 results encouraged anxious investors that Q4 might not be as sluggish as originally thought.

The company said prices have stabilized for raw aluminum and sales have increased in the higher-profit aerospace business. Economic growth in China appears to be coming back, and Europe is doing better than most people anticipated. CEO Klaus Kleinfeld also noted that the automobile and aerospace markets in the United States remain strong.

Q4 earnings for S&P 500 companies are projected to rise 3.3%, according to data from S&P Capital IQ.

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Why the Spending Cuts Battle Looks Uglier Than Fiscal Cliff Fight

Washington's rushed fiscal cliff deal failed to resolve half of the issue at hand: what to do about the $1.2 trillion in automatic spending cuts.

The short-term deal struck on New Year's Day delayed the cuts for a couple months. Talks are set to resume March 1, and Republicans are ready to play a mean hand by trying to use the debt ceiling debate as its ace-in-the-hole.

U.S. President Barack Obama needs swift approval from the Republican-run Congress to raise the swollen $16.4 trillion debt ceiling next month in order to prevent the U.S. government from a detrimental default. The GOP has said it won't give the nod without some hardnosed across-the-board spending cuts.

Since Republicans gave in to raising taxes (on couples earning more than $450,000) in the fiscal cliff deal, they expect steep spending cuts in return.

$1 Trillion Coin Isn’t the Right Answer to Our Debt Ceiling Crisis

There's increasing support for the idea of minting a $1 trillion coin to help the United States avoid hitting the debt ceiling.

Even those supporting the idea – including The New York Times' Paul Krugman – admit it sounds "silly," but say it deserves consideration in that it could help solve one of our country's biggest economic issues.

"By minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling – while doing no economic harm at all," Krugman wrote.

While the government can't make infinite sums of money however and whenever it likes, there's a legal loophole that gives the Treasury Department the authority to create platinum coins of any denomination.

The law that gives Treasury that authority is meant to allow the issue of commemorative coins, but its intentions have been misinterpreted and distorted by politicians and economists alike.

Here's the real deal with a $1 trillion coin and what it would do to the U.S. economy.

Bear of the Day: NYSE Euronext - Bear of the Day

NYSE Euronext's (NYX) third quarter earnings breezed past the Zacks Consensus Estimate but plunged year over year based on weak volumes and pricing across trading venues, which led to a reduced top line and lower operating margin. However, lower expenses partially offset the downsides, although capital deployment remained intact. The proposed merger with ICE should […]

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