Archives for January 2013

January 2013 - Page 8 of 20 - Money Morning - Only the News You Can Profit From

Bank of Japan Policy is Doomed to Failure

by

The Bank of Japan (BOJ), Japan's central bank, bowed to government pressure this week by adopting a 2% inflation target and accepting responsibility for achieving that goal "as early as possible."

The BOJ announced today (Tuesday) that it will begin a program of "unlimited easing" beginning in January 2014 following the end of the central bank's current asset-purchasing program in December.

In a statement announcing the results of Tuesday's Monetary Policy Committee meeting, the Bank of Japan said it anticipates purchasing 10 trillion yen in Treasury notes and 3 trillion yen in Japanese government bonds (JGBs) each month beginning in January 2014.

The statement also indicated the central bank's balance sheet will expand by about 10 trillion yen by the end of 2014 as a result of the purchases. No further expansion of the BOJ balance sheet is anticipated thereafter.

To continue reading, please click here...

How Will the Debt Ceiling Debate Affect Gold Prices?

by

If you're wondering how the debt ceiling debate will affect gold prices, you need to check out a new report from Goldman Sachs Group Inc. (NYSE: GS).

Investment powerhouse Goldman believes gold prices will log impressive gains over the next three months as the debt ceiling debate takes center stage on Capitol Hill. The bank is advising investors to position portfolios ahead of upward moves in the precious metal.

"We see current prices as a good entry point to re-establish fresh longs," Goldman analysts Damien Courvalin and Alec Phillips wrote in a Jan. 18 report.

The bank reaffirmed its three-month price target for gold of $1,825 an ounce. (Gold was trading at $1,695.20 in New York Tuesday.)

"The uncertainty associated with these (debt-ceiling) issues, combined with our economists' forecast for weak U.S. GDP growth in the first half of 2013 following the negative impact of higher taxes, will push gold" to the three-month target, the report stated.

The Goldman strategists pointed out six instances between 1996 and 2007 when the country hit the debt ceiling and the Treasury responded by using its muscle to execute "extraordinary measures" to keep the country afloat and running.

Gold prices rallied some 10% in half of these instances in the month prior to the debt-limit increase.

To continue reading, please click here...

Middle Class Decline Under Obama Shown in 5 Charts

by

U.S. President Barack Obama often makes a point of talking about how important our country's middle class is to our economic growth – something he reiterated yesterday (Monday) in his second inauguration speech.

"Our country cannot succeed when a shrinking few do very well and a growing many barely make it," President Obama said. "We believe that America's prosperity must rest upon the broad shoulders of a rising middle class."

But the financial reality that currently faces the U.S. middle class is not one that can support a country's economic future.

For example, many middle-class workers have lost jobs or taken a pay cut since the president took office in 2009, and the 7.8% unemployment rate is the same as when President Obama first took office.

The labor force participation rate – the percentage of working-age people who are employed or actively seeking jobs – is at its lowest level in over 30 years, and those who are working are making a lower median income than they did 10 years ago.

At the same time, almost half of Americans are unprepared for financial emergencies. About 49% of Americans don't have enough money saved to cover three months of expenses and 28%don't have any money saved, according to a survey by consumer financial services firm Bankrate.com.

Here are five startling charts that outline a middle class decline that's taken shape under President Obama.

Debt Crisis to Spark Economic Crash Worse Than 2008, Expert Warns

by

Investors should prepare for an upcoming economic collapse far worse than 2008. That's according to Peter Schiff, the economist and CEO for Euro-Pacific capital, who says that if drastic steps are not taking in the coming months, America's $16 trillion federal debt "cancer" will create a massive economic catastrophe unlike anything ever seen. "We have […]

Read More…

Bull of the Day: School Specialty - Bull of the Day

by

School Specialty's (SCHS) second quarter fiscal 2013 adjusted earnings of $0.82 a share beat the Zacks Consensus Estimate by 28% and the prior-year quarter earnings by 60.8%, driven by overall margin improvement and the company's cost control strategy. Though down year over year, total revenue also surpassed the Zacks Consensus Estimate. Although School Specialty lowered its […]

Read More…

The Tech Play That's Better Than the "Next Google"

by

I probably spend more time than anyone searching for hot young startups that will make money for my readers – even as the companies themselves change the world around us.

I'm talking about firms like Google Inc. (Nasdaq: GOOG), which in nine years has grown from a newly public company into a Web search, digital advertising, and online video juggernaut with a market value of $230 billion (and a stock price of $705 a share).

To continue reading, please click here…

Why Uranium Prices Are at a Critical Tipping Point

by

Despite the Fukushima disaster in March 2011, the demand for nuclear power continues to rise.

For uranium investors, that means the commodity is at a critical tipping point towards much higher prices.

Thanks to considerably higher energy costs, even Japan is now shifting its stance on nuclear power. According to Japan Today, newly elected Prime Minister Shinzo Abe now says he is willing to build new nuclear reactors.

That's a dramatic shift from the previous government's pledge to phase out all of the country's 50 working reactors by 2040.

But the most significant impact in nuclear power is likely to come from the developing world-especially China.

China's commitment to nuclear power means they could be adding as many as 100 nuclear reactors over the next two decades. That's a monumental shift considering China currently operates only 15 reactors.

Other nations such as Russia, India, South Korea, and the UAE are contemplating new nuclear power plants as well that would add to the 435 nuclear reactors already providing base-load power worldwide.

In this year alone, 65 nuclear power plants are under construction, another 160 new reactors are currently in the planning stages and 340 more have been proposed.

Given this ongoing shift, the demand for uranium is clearly going to be getting stronger, which presents a problem since there is already a uranium supply deficit.

According to the World Nuclear Association, total consumption of uranium was 176.7 million pounds in 2011 and growing. Meanwhile, last year's total uranium output was 135 million pounds. That's an annual deficit of roughly 40 million pounds.

Of course, you know what happens when supply can't keep pace with demand— uranium prices will begin to rise.

But that's only part of the story. Thanks to the end of a program called Megatons to Megawatts the supply deficit promises to get even worse.

Is the Japanese Yen Headed for a Long Decline?

by

The Japanese yen has already fallen by more than 12% against the U.S. dollar since Nov. 1, 2012 – and it could still have further to fall.

That's mainly because the Bank of Japan appears likely to go along with the wishes of the Liberal Democratic Party, led by newly elected Prime Minister Shinzo Abe, and step up its attempts to eliminate deflation by using "unlimited easing" and setting a 2% inflation target.

Most of the Japanese yen's weakness we have seen so far stems from aggressive jawboning by Prime Minister Abe and other LDP leaders. And outgoing Bank of Japan Governor Masaaki Shirakawa has appeared likely to go along with Prime Minister Abe's demands for closer cooperation between the government and the central bank.

The Bank of Japan's Monetary Policy Committee (the Japanese equivalent of the Fed's Federal Open Market Committee) is in the middle of a regularly scheduled two-day meeting. It is widely anticipated that the BOJ will agree to additional easing measures – most likely purchases of Japanese government bonds (JGBs) – and will formally adopt the government's 2% inflation target.

To continue reading, please click here...

Stocks To Buy Now: Profit from Blockbuster New Drugs in 2013

by

One sector offering stocks to buy now is an industry that's been prepping for huge product deliveries in 2013.

I'm talking about Big Pharma.

After being pummeled by generic rivals for the past few years, a few big pharmaceutical companies are fighting back with a new wave of blockbuster drugs that will hit the market in 2013.

More than ever, Big Pharma companies need new revenue streams to battle the "patent cliff – replacing fading profits from drugs that spawned generic competition.

Last year alone, the industry suffered from the expiration of patents for such lucrative name-brand drugs as AstraZeneca PLC's (NYSE ADR: AZN) Seroquel, Pfizer Inc.'s (NYSE: PFE) Lipitor and Wyeth's Protonix, which total accounted for nearly $36 billion in U.S. sales in 2011 and 2012.

But help is on the way.

Pharmaceutical firms logged 39 new drug approvals last year – the most since 1996 – and there are signs the trend could continue through 2013, according to Reuters.

Drugmakers are betting that a new wave of medicines for cancer, diabetes and heart disease will shape up as tomorrow's blockbusters.

European drugmakers, for example, have the potential to deliver new drugs with peak annual sales of $64 billion in 2013-2015 while patent losses will be only $12 billion, according to Deutsche Bank AG (NYSE: DB) estimates.

No doubt about it – Big Pharma is taking aim at generics with both barrels.

That could mean fat profits for savvy investors who focus on high-quality companies with strong late-stage pipelines.

Here are three that are loaded for 2013.

Stocks to Buy: Big Biotech Delivers Big Profits

Innovations in biological science – or biotech – are evolving at the speed of light.

In fact, leading edge biotech products and breakthroughs are saving thousands of lives every day.

And business is booming for one biotech bellwether …

To continue reading, please click here...

The Debt Ceiling Isn't What Worries Warren Buffett

by

Investment guru Warren Buffett isn't sweating the debt ceiling as much as he is some of the country's other issues.

Buffett this weekend said the $16.4 trillion in debt the country has collected is not the number on which everyone should be focused.

"It is not a good thing to have it going up in relation to GDP, that should be stabilized, but the debt itself is not a problem," the CEO of Berkshire Hathaway (NYSE: BRK.A) told CBS' "Sunday Morning" this weekend.

Buffett said the country's debt is a "lower percentage of GDP than it was when we came out of World War II. You've got to think about in relation to GDP."

Here's why debt-to-GDP is what Buffett watches.

To continue reading, please click here...