Archives for August 2013

August 2013 - Page 13 of 14 - Money Morning - Only the News You Can Profit From

This S&P 500 Chart Shows Why You Need to Be In the Market Now

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Our friend and frequent Money Morningcontributor Frank Holmes put together a chart of S&P 500 gains that you have to see.

The index closed July with a monthly gain of 4.9%. This is the 14th month since 2009 that the S&P 500 has gained at least 4%.

Holmes, CEO of U.S. Global Investors, went back and reviewed the other 13 months with +4% gains.

He recorded the S&P's performance in the following one-month and three-month period after the month that it gained more than 4%.

His chart tells an interesting story…

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Why You Have to Be Investing in the Stock Market Now

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Money Morning Capital Wave Strategist Shah Gilani – sometimes called "the reluctant bull" – joined FOX Business' "Varney & Co." today (Friday) to discuss why the U.S. is the "place to be."

Shah emphasizes that all reluctance aside, when it comes to investing in the stock market now, "You have to be in it to win it."

Why you should be investing today

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Our Worry-Free Way of Investing in Biotech

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If there's one sector that's primed for explosive growth right now, it's biotechnology.

Its position as a new market leader in the tech sector cannot be overstated. Clearly, investing in biotech is an idea few can afford to ignore.

Genentech, the first biotech company, was formed in 1973 and was the first to go public in 1980, which launched the biotech sector.

Though the sector is only 33 years old, humans have been using varying forms of biotech for thousands of years, before anyone was investing in anything.

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July Jobs Report Confirms These Major Problems with U.S. Employment

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The July jobs report brings the total number of part-time jobs created this year to more than three times the amount of full-time jobs added.

Welcome to America: Land of part-timers…

The trend was pronounced in June when data revealed part-time jobs grew by a robust 360,000 and full-time jobs declined by 240,000. Friday's July jobs report was further proof.

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How China's One-Child Policy Will Transform the Future Global Economy

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In 1979, China implemented a one-child policy in an effort to alleviate social, economic, and environmental problems in the country.

Government officials indicate that the policy prevented over 250 million births between 1980 and 2000, and 400 million births between 1979 and 2011.

"China was a very different place back then," recalls Money Morning Global Investing & Income Strategist Robert Hsu. "It was very poor and there was overpopulation; they had to do something about it. I'm not saying that it's the best policy, but that's what they did to fix these problems. Nowadays though, the economic situation in China has vastly changed."

And changed it has – China is currently the world's second-largest economy, which is precisely why investors worry about how demographic issues there will play out globally. How will China's shrinking birthrate affect global economic growth?

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Fight Club: Is the Home Mortgage Interest Deduction Worth Keeping?

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Garrett Baldwin: Don't Just Cut the Mortgage Deduction… Cut All Deductions and Lower Taxes


If home ownership is the American Dream… then why do we need government to subsidize it?

The home mortgage interest deduction (HMID) is a lopsided tool of economic alchemy that favors the rich, and artificially increases housing prices due to the "stimulus" it creates.

According to the Congressional Budget Office, this tax break will "cost the government" more than $1 trillion over the next decade. The HMID mostly benefits households earning $75,000 to $500,000 a year. According to the Tax Policy Center, this range of Americans earns 77% of the tax savings from the HMID.

This Could Shake Muni Bonds to the Core

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Editor's Note: Detroit is more than a sideshow. What's at stake here is bigger than most investors realize. It could take a Supreme Court decision to determine the viability of many municipal bonds. Regardless of whether you are a muni bond investor or not, what happens in Detroit will affect you. Shah Gilani has the whole story.

Detroit went bankrupt, but so what?

Its own decades-long gross political mismanagement, corruption and incompetence pushed the city over the cliff into bankruptcy.

Why should we care?

It could change the way investors look at muni bonds. And not for the better.

The largest Chapter 9 filing in U.S. history will reverberate well beyond this once- bustling city and its creditors.

But w hat's most threatening to muni bond investors, and in fact all investors, is whether the city's general obligation bonds are secured or unsecured issues.

General obligation bonds, backed by a city's ability to levy taxes to pay interest and principal, are thought to be the safest of all munis.

Detroit is putting this to the test.

Why the Dodd-Frank Act Didn't Work

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On July 21, the Dodd-Frank Act turned three years old.

But, unlike most three-year-olds who can walk and talk, this one hasn't gotten out of the crib yet…

You see, the Dodd-Frank Act was a promise to protect Americans from the excesses and ruthlessness of Wall Street. It was meant to streamline the regulatory process.

But three years later, we are still waiting for its full implementation.

In fact, as of last week, only 155 of 398 rules required by this law are considered final.

That's because instead of focusing on the systemic problems that caused the crisis, the pen to write the bill ended up in the hands of disconnected agencies and lobbyists.

Instead of fixing the serious problems of current law, Dodd-Frank failed to curtail Wall Street – just a few years after a major financial crisis.

At a time when Sen. Elizabeth Warren, D-MA, and Sen. John McCain, R-AZ, have pushed for a new Glass-Steagall Act to reduce risk, some voices like Treasury Secretary Jack Lew argue that the Dodd-Frank bill will alleviate the problems of Too Big to Fail, systemic risk, and cronyism.

But we know that such arguments are spurious at best.

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President Obama's Grand Bargain is DOA

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In attempts to break the fiscal stalemate lingering in Washington, D.C., U.S. President Barack Obama claims he's ready to do some serious "grand bargaining"…

The president presented his so-called grand bargain plan Tuesday during a trip to an Amazon.com Inc. (Nasdaq: AMZN) distribution center in Chattanooga, TN. The controversial proposal includes cutting the corporate tax rate, long-favored by congressional Republicans, in exchange for stepped-up spending on jobs programs.

"I've come here to offer a framework that might help break through the political logjam in Washington and get some of these proven ideas moving," President Obama said.

The GOP, unmoved, immediately slammed the suggestions and cast doubts about the plan's prospects.

And the "grand bargain" turns into just another speech…

How to Invest in the Next Stage of U.S. Shale Oil Production

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If you want to know how to invest in the most lucrative area of energy, just focus on U.S. shale oil production.

In fact, we just uncovered the next wave of "millionaire-maker" shale oil plays.

It's hard to believe that an advancement as profitable as this one was practically non-existent merely 10 years ago.

Fast forward to last year, when domestic oil production marked the largest single-year increase on record, thanks in large part to increased U.S. shale oil production, according to BP's Statistical Review of World Energy. Oil production, including U.S. shale oil, grew by about one million barrels a day last year to about 8.9 million barrels per day, reported BP.

That's up 13.9% from 2011.

And, in turn, the increased U.S. shale oil production caused U.S. crude oil imports to drop to the lowest level since 1997, according to the U.S. Energy Information Administration (EIA). Crude imports in 2012 were about 8.5 million barrels of oil a day, down from a peak in 2005 of 10.1 million barrels per day – again thanks to rapidly growing U.S. shale oil production.

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