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Energy Investing

A Big Time Squeeze for Refineries is About to Begin

After banking some very hefty profits for Energy Advantage and Energy Inner Circle subscribers on refining stocks earlier this year, the entire sector now is about to land "between a rock and a hard place."

Once a high-flying place for investors to earn substantial profits, refiners have been under pressure for the last two months. But that's actually just the beginning of what's to come.

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The Fed

Another Big Fed Week: The Bernanke Monetary Policy Testimony to Congress

There's a key market-moving event this week investors can't miss: the semi-annual Ben Bernanke monetary policy testimony before Congress on Wednesday (House) and Thursday (Senate).

Congressional legislation known as Humphrey-Hawkins (now expired) required the Federal Reserve's Open Market Committee to report to Congress on both the state of the U.S. economy and monetary policy twice a year (February and July). The Fed Chairman testifies before Congress in conjunction with the report.

Traditionally, it had been one of the most important public appearances by the Fed Chairman, back when speeches were rare. But now with news conferences after many Fed meetings, these appearances are less important.

However, this time may be different, as it will be Ben Bernanke's last time in front of Congress before his term ends in 2014. The testimony may once again be a market moving event due to the market's recent concern about the Fed's 'tapering' of quantitative easing (QE).

Which Ben Will Deliver the Monetary Policy Testimony?

The markets have been confused lately by seemingly contradictory statements coming from various Fed members and particularly from Bernanke himself.

In fact, Bernanke's actions lately remind me of Batman villain Two-Face, aka former District Attorney Harvey Dent.

For example, one time he said that winding down QE may happen as soon as the middle of next year. But then, like last week, he flips saying the Fed will not taper the $85 billion a month bond purchasing plan until the U.S. economy is stronger.

He said, "highly accommodative monetary policy for the foreseeable future is what's needed [for the economy]."

Bernanke added that there would not be an automatic rise in interest rates either when the U.S. unemployment hit the Fed's target of 6.5%.

These statements sent the stock market solidly higher with both the S&P 500 and the Dow Industrials nearing their record highs. The S&P 500 and Dow Jones Industrial Average hit new record highs Monday closing at 1,682.50 and 15,484.26.

Traders believe the 'Bernanke put' was back in play. That is, Bernanke will do everything he can to keep stock prices higher.

So which Ben Bernanke will testify before Congress this week? Accommodative Ben or Tightening Ben?

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China

Keith Fitz-Gerald Sheds Different Light on China’s Economic Growth Forecasts

We've heard reports of a slowdown in the Chinese juggernaut. Forecasts have shown that China's economy will grow by "only" 7.5% in the second quarter of 2013.

Europe is already in a recession, and America's own economic growth is wheezing along at less than 1% this quarter.

Is the media hype about China's economic growth slowdown overblown, or will it have real fallout for the United States and Europe?

Money MorningChief Investment Strategist Keith-Fitzgerald speaks with FOXBusiness' "Varney & Co."about what these figures really mean for the global economy. Watch the following video for the answer.

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Corporate Taxes

Corporate Tax Avoidance in the Crosshairs of OECD Plan

Fed up with corporate tax avoidance that keeps their fingers off of billions of dollars in potential revenue to feed their spendthrift ways each year, governments in the world's richest economies soon hope to have a plan to do something about it.

The Organization for Economic Cooperation and Development (OECD) will present a preliminary version of such a plan at the meeting of G20 finance minister in Moscow on July 17.

Getting the world's major governments to cooperate on anything is never easy, but in corporate tax avoidance they have an issue that politicians of almost any culture or political stripe can agree on.

"This is a very challenging piece of work," said OECD secretary general Angel Gurria at the organization's annual conference in May. "We have created a regime where it is legal to pay no or little taxes. But I'm very confident we can find a formula that provides a level playing field."

In government speak, this level playing field means hiking corporate taxes.

Most of the world's developed economies also happen to have severe debt problems and are looking for revenue wherever they can find it. Getting more money out of multinational corporations would be a big help.

And several high profile examples of corporate tax avoidance over the past year have also put the issue on the public's radar screen, adding to the political pressure to "do something."

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Currencies

The Best Currencies to Invest in for 2013

Currency markets in the first half of 2013 have been roiled by central bankers' delusional efforts to prop up their lackluster economies.

That means the best currencies to invest in for 2013 – or, the remainder of the year – will be in Asia and Canada – countries where the governments have refused to engage in debasing their currencies in a "race to the bottom."

Fact is, the strength of any currency is strongly related to decisions made by governments and central banks.

So knowing the best currencies to invest in this year can help protect against our government's spendthrift policies.

Stocks

Buy, Sell or Hold: Talking Trash about Waste Management

Nothing is more unappealing than having to discuss the finer points of garbage. While on the contrary, nothing is more exciting than discussing America's transition to a "greener" society.

This is where Waste Management (NYSE: WM) finds itself – caught in the middle of these two discussions.

With a market cap of nearly $19 billion Waste Management is the largest trash collector and processor of waste in the U.S. The company owns 264 active solid-waste landfills and services over 21 million customers.

Waste Management recycled 9 million tons of trash in 2012. It also produces sustainable energy through landfill gas and burning waste.

That's the down 'n dirty basics of the company's operations. But let's do a little bit of dumpster-diving and look somewhat deeper at its business model.

Collection & Landfill

The large bulk of Waste Management's revenues starts with those trucks we see visit our home every week. Waste Management enters into multi-year agreements with local governments and commercial customers for garbage pick-up. The trash then gets hauled to a local landfill or transfer station.

The fees Waste Management receives from these established customers act very much like an annuity since it is unlikely that the customer will ever leave. Local governments are trying to lower costs, so the idea of them starting (or even continuing with) city sanitation departments are quickly discarded.

Bond Market

Wading Through the Bond Market Bloodbath

If you're an investor who has been following a traditional income-style portfolio allocation that includes a lot of U.S. Treasury bonds, then you are likely having a very uncomfortable summer.

Indeed, since the Federal Reserve's "taper" narrative was first introduced to Wall Street by Chairman Ben Bernanke on May 22, there's been a virtual bloodbath in the bond market.

To give you a sense of how much red ink has been spilled in Bondville, let's take a look at the broad measure of the long end of the Treasury bond spectrum, the iShares 20+ Year Treasury Bond ETF (NYSEARCA: TLT).

Here we see that from May 21 through July 10, the value of TLT plunged 9.6%. A near-10% drop in just seven weeks, in what has traditionally been a safe-haven sector to park capital, is something few market observers expected to see.

If we go up the maturity ladder and look at the damage to the 10-year Treasury note, we see that the closely watched yield on this metric has gone parabolic.

Washington

After 14 Years of Free-for-All, Glass-Steagall Is Back

Three cheers for Elizabeth Warren!

Yesterday she launched a wire-guided Scud missile at the too-big-to-fail banks.

The freshman senator from Massachusetts, formerly a Harvard Law School professor specializing in bankruptcy law, introduced her "21st Century Glass-Steagall Act" co-sponsored with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.), and Angus King (I-Maine).

And it's got the Big Banks shaking in their boots.

Here's why.

The 21st Century Act would separate institutions with savings and checking accounts, in other words FDIC-insured depository commercial banks, from investment and trading "banks" engaged in capital markets activities, most of which are on the border between speculation and manipulation.

Finally!

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Precious Metals

Short-Term Gold Price Outlook is Bullish

Gold continues its short-term rally as assurances from Federal Reserve Chairman Ben Bernanke that QE3 remains alive kept the precious metal on track for its first weekly advance in a month.

After Bernanke's pronouncements, gold prices jumped by 2.6% to $1,299 per ounce, marking a fourth winning day in a row – gold's longest winning streak since mid-March.

In turn, the U.S. dollar dropped sharply because Bernanke indicated the Fed isn't in any hurry to raise interest rates.

You see, gold prices and the dollar are connected: a weaker dollar helps dollar-denominated commodities because it makes them less expensive to buy for holders of other types of currencies. Demand also increases for gold as a hedge against a drop in the dollar's value.

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Washington

Senators Move to Create 21st Century Glass-Steagall Act

Warren, John McCain (R-Ariz.), Maria Cantwell (D-Wash.), and Angus Kin (I-Maine) introduced legislation that would again separate bank's traditional activities (like deposits currently backed by the Federal Deposit Insurance Corp.) from riskier activities like investment banking, insurance underwriting, swap dealing, and hedge funds.

Glass-Steagall was repealed by Congress back in 1999.

When the news broke of Warren’s determined attempt to bring back Glass-Steagall last week, it covered front pages across the country and instigated a firestorm of commentary on the future of the U.S. economy.

The problem, of course, is the ability to cut through the hype and understand if financial reform is necessary to fix the U.S. economy.

Rarely do I find myself championing regulatory efforts by the Federal Government, but the financial sector is an entirely different beast from energy, agriculture, and other resource sectors.

But reinstituting key elements of the Glass-Steagall Act is just one step on a long return to sanity for the economy.

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