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How to Profit From Europe's Stealthy Resurgence

By , Global Investing Specialist, Money Morning -

European countries - both inside and outside the Eurozone - are slashing their budget deficits.

Greece, Portugal and Spain - three of the so-called "PIGS" - have to do so, of course. But Germany - generally reckoned to be in excellent shape - is also cutting its deficit, as is France, which hasn't run a budget surplus in 40 years. Britain, too, with no need to protect the euro (it's not a Eurozone member) just introduced a budget that cut the deficit by $140 billion over four years.

U.S. President Barack Obama and other Keynesians warn that Europe may push its own economy - or even the global economy - back into recession.

But here's the surprising reality: Europe may gain from its fiscal pain - and its deficit-trimming actions offer the best hope for a lengthy recovery.



To see which European countries are expected to rebound - and which ones to invest in - please read on...

The Eurozone Bailout Plan Puts a $962 Billion Price Tag on Saving the Euro – But Is It Finally Enough?

By , Associate Editor, Money Morning -

European Union (EU) finance ministers yesterday (Monday) announced a $962 billion (750 billion euros) Eurozone bailout package that rallied global markets with a drastic new attempt to prevent a euro collapse and contain the Greek debt crisis. European policy makers agreed to the massive effort in a 14-hour meeting Sunday, trying to beat the start […]

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British General Election: Even the Winners Will be Losers

By , Global Investing Specialist, Money Morning -

The British general election campaign reaches its climax on Thursday, and at this point appears to be anybody's game. The most likely outcome is a "hung parliament" in which no party has a majority and a government is formed through backroom haggling.

However, after looking yet again at the state of the economy in my native Britain, I'm forced to ask a simple question: Why would anybody want the job?



To find out just what the future holds for the British economy, read on...

Greece Activates Emergency Bailout, Testing Financial Strength of Eurozone Countries

By , Associate Editor, Money Morning -

Greece on Friday officially asked to tap into a $60 billion (45 billion euro) emergency aid package after months of talks, setting into motion a bailout process that will put the financial strength of Eurozone nations to the test.

Greece Prime Minister George Papandreou called his debt-stricken country's economy a "sinking ship," as borrowing costs reached 12-year highs and recent austerity measures didn't rally the market support needed to save Greece.

"This is the moment. The time that was not granted to us by the markets will be given to us by the support of the Eurozone," Papandreou said.

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Is There an Ulterior Motive for Bailing Out Greece?

By , Contributing Writer, Money Morning -

Since back in December, when Fitch Ratings Inc. slashed its credit rating on Greece's debt to below investment grade for the first time in 10 years, there's been a mind-numbing flood of media coverage of that European country's debt crisis.

And yet, despite high-volume of high-level media coverage, none of the stories have picked up on a very basic - yet very key - fact...

The bailout being developed is as much for Germany as it is for Greece.

Let me explain ...

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Why the Fed Won't Rescue America's Plunging Savings Rate

By , Global Investing Specialist, Money Morning -

In the 1992 election campaign, H. Ross Perot predicted a "giant sucking sound" of U.S. jobs heading for Mexico if the North American Free Trade Agreement passed. Perot seems to have been wrong on that - wherever U.S. jobs have gone, it's not Mexico. 

Nevertheless, if you listen carefully there's still a "giant sucking sound" - but this time it's the sound of U.S. capital headed overseas.

To find out what the Fed must do to keep capital at home, and why it won't act, read on...

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Money Morning Mailbag: Short-Term Maturities Are the Best Bet for Tax-Free Municipal Bonds

By , Global Investing Specialist, Money Morning -

Question:  We have some money invested in tax-free municipal bonds, but read in the local newspaper that with the potential rise of interest rates these bonds tend to do poorly. Can you better explain this, and if this is the case, what do you recommend?  I appreciate your input. Thank you.

- Joan


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Question of the Week: Is it Too Late to Stage an Intervention for Our Government's Spending Addiction?

By , Associate Editor, Money Morning -

As government debt levels soar, is America on the road to ruin?

The Obama administration's 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years - $1.2 trillion more than the administration predicted and enough to bring the federal debt to 90% of U.S. gross domestic product (GDP) by 2020, the Congressional Budget Office reported two weeks ago.

U.S. public debt was $6.3 trillion, or $56,000 per household, when President Barack Obama took office in the middle of the worst financial crisis since the Great Depression. It's now at $8.2 trillion ($72,000 per household) and if the present course continues, federal debt will hit $20.3 trillion (in excess of $170,000 per household) in 2020, the CBO predicts.

U.S. debt hasn't been that high since the end of World War II, when the debt-to-GDP ratio hit 109%. Greece - the focus of global default fears - currently has debt that's at 115% of GDP.

Money Morning Question of the Week: Are you worried about U.S. debt levels? Are we headed down the road to ruin? Why or why not? Would you favor tax increases and/or budget cuts if it meant the country would get this debt under control?

What follows are some of the most-well-thought-out and articulate answers to this question that we've received to date.

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We Want To Hear From You: Time to Answer the Question of the Week

By , Money Morning -

With the inaugural installment of our new "Money Morning Question of the Week" feature under our belts, we are extremely excited about the insightful and passionate responses our readers continue to share on the topic of health care. We are dedicated to reporting and sharing cutting edge news and information with you, and we think feedback is a necessary part of making this process as successful as possible.

Please take some time to ponder this week's question, and share any thoughts, concerns or questions you have about U.S. debt. Some fear it, some are angered by it, and others are finding ways to profit from it. We want to know what you think about our country's situation and how it will affect you in all the positions you may hold - taxpayer, employee, business owner or investor.

Check back here later this week as we post the answers and pose a new question for discussion - don't be shy, we are ready and waiting to hear what you have to say!

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Will America Choke on its Own Debt?

By , Executive Editor, Money Morning • @privatebrief -

Is America getting in too deep?

According to a new estimate by the Congressional Budget Office (CBO), if the United States continues along its current path, U.S. public debt will reach 90% of the nation's economic output by 2020.

Given that federal debt has already zoomed to 53% of gross domestic product (GDP), this projected additional escalation seems outrageous.

Unfortunately, it's only a piece of the story.

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Drug Companies and Hospitals Get a Boost from Healthcare Reform

By , Associate Editor, Money Morning -

After months of trying to predict how the healthcare reform proposals would affect the respective futures of their industries, drug companies and hospitals are optimistic about the prospective long-term profits the final version of the health care reform bill could bring them.

President Barack Obama yesterday (Tuesday) signed the $940 billion health care reform bill with support from pharmaceutical companies and the hospital industry. Both will benefit from a sharp increase in the number of insured customers, as the bill expands healthcare to up to 32 million more people.

While the bill will cost tens of billions of dollars over the next 10 years, the planned reforms create something drug companies and hospitals can't live without: paying consumers.

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Shaky CBO Deficit Projections Help Healthcare Reform Bill Pass House

By , Contributing Writer, Money Morning -

When the comprehensive healthcare reform bill won approval from the House on Sunday, some of the swing lawmakers were won over by a new Congressional Budget Office (CBO) analysis showing the bill will slash the deficit by over $1.3 trillion over the next 20 years.

But at a time when the U.S. budget is already saddled with hefty doses of red ink, there's a growing debate about whether the new bill will reduce the deficit or evolve into another entitlement program that will expand the country's debt beyond already record levels.

Even though the bill - which President Barack Obama has hailed as the "most significant effort to reduce the deficit since the Balanced Budget Act" of the 1990s - will cost the federal government $940 billion over a ten-year period, the CBO said it will increase revenue and cut other costs by an even greater amount.

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Six Ways to Profit as Brazil's Economy Takes Off

By , Global Investing Specialist, Money Morning -

In many ways, Brazil offers some of the best prospects among emerging markets and deserves to be a core holding in any international portfolio.

Brazil's economy had only a shallow recession and is now recovering nicely. Its market has been one of the best performing since Dec. 31, 2008, and both inflation and the budget deficit remain under control.

Yet one can be only moderately bullish - and I'll explain why.



To find out how to profit from Brazil's bullish prospects, read on...

It's Time to Tackle Government Pay

By , Global Investing Specialist, Money Morning -

It's fairly well known that the U.S. public sector is paid more than the private sector. What's less well known is that the gap between federal-employee pay and benefits and private-sector pay and benefits is increasing - by about 18% over the last decade.

Given the current level of U.S. unemployment and the size of the budget deficit, it would appear that some economies could be made. In short, it's time to tackle government pay.

After all, if Greece can economize, so can the United States...

To see why government pay cuts are justified, read on...

The Five Factors That Could Rescue U.S. Stocks

By , Contributing Writer, Money Morning -

When the stock market is enduring as much trouble as it has been lately, it pays to remember that there are still many positive catalysts that are in place and working to buoy securities prices.

Let's take a few moments to consider the top candidates:

  • A Friendly Fed: The current U.S. Federal Reserve under Chairman Ben S. Bernanke is the most accommodative in history and is likely to keep short-term interest rates at or near zero for the remainder of this year. Occasionally there will be rumblings of an increase - as there was in The Wall Street Journal last Monday, but they are likely just smoke screens.
To find out about the other four factors - as well as three possible profit plays - please read on ...

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