Archives for June 2013

June 2013 - Page 10 of 16 - Money Morning - Only the News You Can Profit From

Keith Fitz-Gerald: Anybody Listening to Bill Gross Is "Probably Headed to the Poorhouse"

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Bill Gross' Pimco, which manages the world's largest bond fund, predicted earlier this week there's a more than 60% chance of a recession in three to five years.

"Given that the last global recession was four years ago, and also given that the global economy is significantly more indebted today than it was four years ago, we believe there is now a greater than 60 percent probability that we will experience another global recession in the next three to five years," Saumil H. Parikh, a managing director and generalist portfolio manager at Pimco, said in a note Tuesday.

But Money Morning Chief Investment Strategist Keith Fitz-Gerald took issue with the prediction from Gross' firm during an appearance on Fox Business' "Varney & Co."

Keith also said stocks haven't peaked – and won't as long as the Fed keeps printing money.

Check out the accompanying video to see why Keith doesn't exactly see eye-to-eye with the Bond King.

Watch the latest video at video.foxbusiness.com

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The Six Questions that Can Make You Rich (Part Three)

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In May, McKinsey Global Institute released its latest report,Disruptive Technologies: Advances that will transform life, business, and the global economy. The highly prestigious research and consulting firm devised a list of 12 technologies that could have a potential economic impact of $14 trillion to $33 trillion a year by 2025.

These 12 technologies (ranked by economic impact) are mobile internet, the automation of knowledge work, the "internet", cloud technology, robot automation, autonomous vehicles, next-generation genomics, energy storage, 3D printing, advanced materials (like graphene), advanced oil and gas discovery, and renewable energy.

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Stock Market Today: Is the End of the Winning Streak the Start of Something Big?

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All good things must come to an end…

A winning investment strategy since the start of the year has been to buy the dips. But that tactic may be changing in the stock market today.

In another rollercoaster session on Wednesday, U.S. equities fell as investors prolonged a recent selloff spurred by the unwinding of bullish bets.

In all, the Dow experienced a triple digit swing Wednesday, an occurrence that has happened twice in the last three week versus only once in 2012.

Meanwhile, the S&P shed 13.61, or 13.61, to 1,612.52, and the Nasdaq was nudged lower by 36.52, or 1.06% to log benchmark's third down day-the worst losing streak of the year.

How the "Wal-Mart Syndrome" Pushes Millions More Onto Food Stamps

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Call it the "Wal-Mart Syndrome".

Entire industries — such as low-end retailers like Wal-Mart Stores Inc. (NYSE: WMT) and fast food chains like McDonald's Inc. (NYSE: MCD) – pump up their profits by paying employees extremely low wages.

But thousands of Americans who need to support a household on such low wages – either the federally mandated minimum wage of $7.25 or just a bit above it – can only do so with public assistance.

In other words, with the help of welfare.

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As Economy Heats Up, Will Commodities

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Thanks to the life support of $12 trillion and 515 rate cuts by the world's central banks since March 2009, the global economy's heart is beginning to beat again.

As the market senses a robust economic recovery is underway, expectations are climbing that this growth will continue. Even the Federal Reserve has hinted that it may taper quantitative easing because of the improved economic situation. As a result, interest rates are increasing.

Europe was the lone wild card, but following Germany's change of heart away from austerity, a positive outlook for growth, and therefore, rates, is rising in that area of the world as well.

Wrong, Again: S&P Upgrades U.S. Outlook

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If you're not familiar with the term "putting lipstick on a pig," well I think there is an apt example at play again from the people who seem to be experts at applying the lipstick.

Standard and Poor's this week raised the outlook for the U.S. credit rating from "negative" to "stable," citing reduced fiscal risks and policymakers' willingness to sustain growth.

Oink. Oink.

There's another recession wave coming, and the U.S. economy is ill-prepared to take the hit.

But that doesn't mean you have to take it on the chin. You can prepare yourself by shunning one investment and looking to a surprising sector that at first glance wouldn't seem a great port in this storm.

Three Reasons Why Now is a Great Time to Buy Utility Stocks

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In a challenging economic environment, scores of investors crave what feels safe. For many investors, it's utility stocks.

Indeed, these equities have even garnered the moniker "widow-and-orphan stocks."

Simply put, people put their trust in utility stocks. They have long been a safe traditional option that also enables investors to capture high dividends.

Another benefit is they deliver essential services such as water, gas and electricity-which are always in demand no matter what shape the economy is in.

That's why the sector tends to be one of the more stable areas of the stock market in terms of daily performance.

The truth is utility stocks are also apt to hold up better in declining markets and anemic economies since investors are more comfortable sticking with lower risk investments.

Since utility stocks also typically pay above market dividends that makes them one of the best defensive investments in the market.

In fact, over the last decade, the Select Sector SPDR Utilities (NYSE: XLU), whose holdings span the entire U.S. utility sector with a concentration on the largest companies, has typically carried a yield 1.75 to 2.5 times that of the S&P 500 Index.

What's more, it's done so with a lower level of volatility than the overall market.

With markets on a tear, and more and more companies paying hefty dividends, utility stocks have lost a bit of their appeal. The sector is off some 10% since its late April highs due to a broad market selloff.

The rout leaves the sector up roughly 8% year-to-date, which is enticing compared the Dow's 16.36% rise, the S&P 500's 15.23% gain and the Nasdaq's 14.89% increase.

Bank of Japan Called "Single Biggest Danger to Global Markets Today"

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The Bank of Japan is sticking to its policy of fiscal stimulus to try to stoke inflation, and that's rattled markets worldwide.

There are short-term signs of economic recovery such as an increase in consumer spending and in manufacturing.

But longer-term, Money Morning Chief Investment Strategist Keith Fitz-Gerald told CCTV, "there has never been an instance in history where stimulus has worked. So the question really is when, not if, this will break down."

Check out the accompanying video to learn why Keith considers the Bank of Japan "the single biggest danger to global markets today."

Bill Gross: Why QE Will End Before the Fed Wants It To

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Legendary bond guru Bill Gross doesn't think too highly of the Federal Reserve and Ben Bernanke's monetary policies.

"There comes a point when no matter how much blood is being pumped through the system as it is now, with zero-based policy rates and global quantitative easing programs, that the blood itself may become anemic, oxygen-starved, or even leukemic, with white blood cells destroying more productive red cell counterparts," Gross writes in his June investment outlook titled Wounded Heart.

Gross believes that QE, which he describes akin to a bad dose of chemotherapy, will end later this year but not because of a suddenly strengthening economy.

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The Hidden Tax the IRS Levies on Free Speech

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Ordinary Americans have been thrust into a nightmarish Orwellian daze. 

I see tinfoil hat-wearing conspiracy theorists waiving their hands about in joyful affirmation, and it feels plain unnatural. 

Yet, people are starting to ask strange questions which only the tinfoil hat-wearers were willing to entertain before. 

And it turns out the answers to those questions are frightening. 

Citizens are being spied on, bullied, and punished because their opinions differ from reigning political agendas. 

In fact, a litany of cases  recently uncovered shows that the IRS has targeted the free speech of vocal Obama opponents, including conservative non-profits, tea party activists and other individuals and businesses.

If you speak out against the president's agenda, there's a good chance the IRS will audit you. Or if you organize a grass-roots tea party group…the IRS will refuse to grant it tax-exempt status. But if you're left-wing, not only will the IRS rubber stamp your tax status, it'll leak to you the donor list of conservative groups for you to attack.

Keep quiet or else…

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