Archives for May 2013

May 2013 - Page 2 of 20 - Money Morning - Only the News You Can Profit From

How to Invest as America Spends $190 Billion to Fix Our Highway System

The United States' Eisenhower Interstate Highway System was the biggest, most expensive public works project since the Pharaohs had the Pyramids built.

The Interstate System, started in 1956, became the envy of the entire world, except perhaps Germany, symbolizing a nation on the march to progress – a four-lane wonder stretching from sea to shining sea.

But now, in the early decades of the 21st century, that once-vaunted highway network is overwhelmed, underfunded, and flat out crumbling in parts.

Interstate 5 is the West Coast's main artery, spanning the distance from Canada to Mexico. Last week, a portion of Interstate 5 fell into the Skagit River north of Seattle.

The Skagit River Bridge was 58 years old, and listed as "functionally obsolete," meaning the bridge was safe but did not meet current standards. No one was killed, but three people were injured as their vehicles plunged, along with the bridge's deck, into the river.

Thirteen people were killed and 145 injured in August 2007 when a bridge carrying Interstate 35W across the Mississippi River at Minneapolis collapsed during rush hour. In that tragedy, the bridge was found to have been over its weight limit, and some non-critical components had been corroded by, of all things, bird droppings.

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Three Hidden Water Costs That Promise to Boost Energy Prices

This may sound funny, but water availability is becoming an issue in energy generation. And it may start to impact prices.

The issue here is not the environmental impact of water usage. That is quite a different debate.

What I'm talking about today is the water supply/demand issue.

Because water is plentiful in those areas of the U.S. where shale gas and tight oil drilling is most concentrated, the price of the water itself is very low.

But there are three other costs involved with the usage of water, and those are beginning to cause some serious concerns.

Here's what I mean…

How to Invest for Retirement

One of the biggest problems facing investors nearing retirement is how to invest their money in such a way that they will have the capital needed to fund their golden years.

This has become even more difficult thanks to the current low interest rate policy established by the Federal Reserve. Conservative investments like bonds and bank instruments simply no longer provide the return necessary to fund retirement.

Many investors are also reluctant to turn to the stock market as well. The past 12 years have seen two horrendous bear markets that destroyed many hopeful retirees' nest eggs, delaying retirement for several years.

Most mutual funds have underperformed the somewhat minuscule returns offered by the market the past ten years, and many of the specialty products offered by Wall Street have featured poor performance and very high fees.

And asking for solid, reliable advice on how to invest, without paying a fortune for the input, has been extremely difficult.

Japan's "Lehman Brothers" Moment: What It Means to You

Japanese markets suffered an elevator shaft-like failure late last week, dropping 7.32% in the single largest decline since the horrific March 2011 earthquake and tsunami. Global markets followed suit but recovered.

This is the third-largest economy on the planet in the fastest-growing region in the world.

Ostensibly, a drop in Chinese PMI that fueled global slowdown fears was what the talking heads agreed was the reason.

They were wrong.

In reality, there were three other real factors.

And every investor needs to know what actually happened:

How Big Corporations Are Destroying the "Free Market"

As an economist, I wince whenever I hear someone say that we live in a true free market.

The reality is we live in a semi-free market where regulation stifles business and corporate money influences and distorts what would normally be a highly competitive marketplace.

And over the last two decades, the situation has only gotten worse for consumers, producers, and defenders of the so-called "free market."

From 2008 to 2010, 30 major corporations paid more money in lobbying fees than they did in taxes, according to the Public Campaign.

But while traditional lobbying once centered on altering tax rates and encouraging legislation to liberalize and deregulate the economy, it has now evolved into a competitive weapon for companies trying to box out competitors and raise barriers to entry in their markets.

It's a business phenomenon that I like to call the "Rise of the Fifth Rail."

You see, in traditional markets, companies compete on four specific principles: Price, product quality promotion, and place (market access). These principles are known as the "four P's."

The first three are self-explanatory in that customers want the highest quality product at the cheapest price. Companies use promotional techniques to instill a need for its products and do so by marketing against the offerings of a competitor.

The fourth principle centers on a company's ability to reach new markets and still provide low prices for high-quality products. A strong coordinated distribution network tends to make this possible.

Naturally, when all four work together, you end up with a company like Walmart (NYSE: WMT), which has the ability to provide low, everyday prices due to its best-in-class distribution network.

But over the last few decades, this new phenomenon of using lobbying as a competitive tool has altered the course of market economics, and driven fair competition into the ground.

And that phenomenon is rotting the American free market from the inside.

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With Gold Prices Down, Here's Where the Money is Flowing

As pointed out in a recent article by Money Morning Global Resource Specialist Peter Krauth, there is something interesting happening with gold prices.

Paper gold, controlled by Wall Street, is going down. But demand for physical gold all over the globe is going up every time that gold prices are down.

That's not the only place divergences are occurring in the global gold market. A divergence can even be seen in the difference between Wall Street speculators and commercial interests in the paper gold market.

The speculative momentum players continue piling on shorts, while commercial interests are following a path 180 degrees opposite.

The question remains for those investors interested in gold as to who will be right in the end. The short-term Wall Street speculators or more long-term players?

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Facebook Stock Just Hit a New Low for 2013

Missing amid the numerous stock market milestones and seemingly unstoppable rallies since the start of the year is Facebook stock.

Tuesday marked the 20th consecutive Tuesday the Dow Jones Industrial Average closed with a gain. And, the Standard & Poor's 500 Index, up 16.4% year-to-date, finished just nine points shy of its all-time high of 1,669.16 hit mid-month.

Meanwhile the Nasdaq, Facebook's (Nasdaq: FB) home exchange, has gained 4% in May and 16% this year.

In contrast, Facebook stock is down some 10% year-to-date.

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Best Investments: How China's Creating a Huge Market for These Metals

Looking for some of the best investments in metals?

Don't overlook palladium and platinum, key materials used in building catalytic converters.
Demand for the metals – and prices – will take off.

We asked Rick Rule, the founder of Sprott Asset Management's Global Companies unit, to explain why.

Rule told Money Morning in the following interview the prices will rise partly because demand for palladium and platinum will grow as a result of what's happening in the automobile market in China, now the largest automaker in the world.

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Here's why these metals could be the best investments you make in 2013

Flowserve Announces Dividend Again - Analyst Blog

Flowserve Corporation (FLS) recently announced a dividend of 42 cents per share or $1.68 on an annualized basis. The dividend is payable on Jul 12 to shareholders of record as on Jun 28. Flowserve has paid quarterly dividends consecutively for over 23 years and has been raising dividends every year. On Feb 19, 2013, the […]

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