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Article Index

How We Can Fix Education and the U.S. Economy, Too

By , Associate Editor, Money Morning • @DavidGZeiler -

One of the biggest threats to the future of the U.S. economy is that more and more of the U.S. workforce lacks the skills needed to fill the jobs being created in the 21st century.

Last year, a survey by ManpowerGroup found that 49% of U.S. employers are struggling to fill essential jobs, because they can’t find workers with the proper skills.

Amazingly, there are 3.8 million job vacancies in the U.S. Yet the Bureau of Labor Statistics says there are 11.8 million Americans looking for work and the U.S. unemployment rate is an unacceptably high 7.6%.

The crisis is having an adverse effect on individuals, communities, and businesses as well as the U.S. economy as a whole.

That’s why improving education is one of the themes President Barack Obama is focusing on in his series of speeches on the U.S. economy this summer.

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Corporate Tax Avoidance in the Crosshairs of OECD Plan

By , Associate Editor, Money Morning • @DavidGZeiler -

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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Cashing in on Canada: Four Ways to Profit - Big - From the World's "Safest Economy"

By , Money Morning -

Canada is more than just back bacon, maple syrup, and hardscrabble-mining claims. It's a leader in natural resources, precious metals, and such alternative-energy investments as oil sands. In fact, Canada right now boasts one of the world's most compelling targets for investors' hard-earned money. In this free report, find out exactly how you could be making a fortune in what is widely considered the world's "safest" economy...

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Cashing in on Canada: Four Ways to Profit - Big - From the World's "Safest Economy"

By , Money Morning -

Canada is more than just back bacon, maple syrup, and hardscrabble-mining claims. It's a leader in natural resources, precious metals, and such alternative-energy investments as oil sands.

In fact, Canada right now boasts one of the world's most compelling targets for investors' hard-earned money. Consider that:

  • Through 2008, Canada enjoyed 12 straight years of budget surpluses.
  • Since the outset of the global financial crisis, not a single Canadian bank failed.
  • Canada was the first G-7 nation to raise interest rates.
  • And while Canada has already reaped the benefits of a full 10 years worth of a full-blown bull market in commodities, there are at least 10 years more to go.
Added together, this points to a major potential payoff for those who invest in Canada right now.

For the four best profit plays in the world's safest economy, please read on...

Canada: The World's Economic Compass

By , Contributing Writer, Money Morning -

If you're looking for a reliable investment, look no further than our neighbor to the north. This oft-overlooked country is quickly emerging as one of the world's strongest economies. Find out why in this report...

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Canada: The World's Economic Compass

By , Contributing Writer, Money Morning -

If you're looking for a reliable investment, look no further than Canada.

It's strange, but with so much talk about troubles in the United States, Europe, China and the Middle East these days, one of the best-performing economies in the world is often overlooked.

Of course, that's finally started to change since the financial crisis has exposed our northern neighbor as a model economy - something the Group of 20 (G20) summit highlighted last weekend.

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Is the Plunge in Commodities a Bear Market Signal for Stocks?

By , Contributing Writer, Money Morning -

The biggest slump in commodity prices since 2008 is undermining confidence on Wall Street and fueling speculation that a new bear market has been born.

Despite forecasts for accelerating economic growth and higher prices, commodities, with the notable exception of gold, are taking a big hit.

The Journal of Commerce (JOC) Commodity Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57% in May, the most since October 2008 - something that gave analysts a sense of déjà vu.

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Canada Leads Developed Nations in Emerging From the Great Recession

By , Contributing Writer, Money Morning -

The Bank of Canada (BOC) today (Tuesday) raised its key interest rate, becoming the first Group of Seven (G7) central bank to raise rates since the global recession started in 2007.

Indeed, Canada with its rich cache of commodities is ahead of most other developed economies still struggling to emerge from the economic downturn. In fact, it is one of the "winners" in the "commodities new world order" recently outlined by Money Morning Contributing Editor Martin Hutchinson.

"The principal winners among the world's 'rich' economies are Canada and Australia - each of them well-managed, financially wealthy countries with abundant commodity resources," said Hutchinson. "Australia has particular strategic importance as supplier of iron ore and coal to China, while Canada is even more crucial to U.S. oil security through the Athabasca tar sands.

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Global Recovery Gaining Momentum, but Obstacles Remain

By , Associate Editor, Money Morning -

The Organization for Economic Cooperation and Development (OECD) announced yesterday (Wednesday) that it has lifted its economic growth outlook, but warned that governments must enforce strict fiscal policies to sustain the global recovery and balance global expansion.  

The OECD reported that the combined economy of its 31 members would grow 2.7% this year and 2.8% in 2011. Troubles of debt-plagued developed economies will be offset by the rapid economic growth of emerging markets. The numbers have been revised upward from November predictions of 1.9% growth in 2010 and 2.5% growth in 2011.

The OECD estimated global gross domestic product (GDP) would rise 4.6% this year and 4.5% in 2011, up from the previous expectation of 3.4% and 3.7%, respectively.

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Fastest Recovery Ever Could Push Corporate Profits to Record Highs in 2010 

By , Contributing Writer, Money Morning -

Sometimes we get a little carried away talking about esoteric subjects like bulls, bears, supply, demand, moving averages and the like. But if you just want to focus on something real, then look at corporate profits. When they're rising from a low, that's good; when they're flat-lining or declining, that's bad. Pretty simple.

Much of the rally of the past year has been in anticipation of a profit recovery. And now that recovery is actually coming in a bit better than bulls expected, which is why they are able to elbow bears so effectively. ISI Group now figures that corporate profits will clock in at +38.8% for the first quarter (year over year) of 2010, then +42.4% in the second quarter, +36.8% in the third quarter and then +30% in the fourth quarter (against harder comparisons). That would put profits in 2010 up a record 36.1% overall.

To read more about how corporate earnings will shape the market click here.

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Are Coal Prices Ready to Burn Hot in 2010?

By , Contributing Writer, Money Morning -

For most of the past 50 years, since the birth of environmental awareness, coal has been the "black sheep" of the power-production family. Now, thanks to more efficient furnaces, better exhaust-scrubbing systems and other technological advances, coal is regaining favor in the world's energy markets.

However, the biggest factor in coal's recent price surge is steadily increasing demand for the fossil fuel in power generation and steel-making process, abetted by rising costs for other types of fuel, like oil and natural gas.

The question for investors, of course, is will this rising demand continue - and how can you profit if it does?

The answer to the first part of that question is almost certainly, "yes," but solving the second part is a little trickier.

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Eight Ways to Profit From the World's Biggest Spending Boom

By , Contributing Writer, Money Morning -

Back in the 1970s, environmentalists feared we were going to "blacktop the Earth." It's not likely that will ever happen. However, governments around the world do have plans to pave a good portion of it in the decade to come. And they also plan to build bridges, power plants, water systems, and to develop other infrastructure projects that will bolster the global recovery and meet the needs of an increasingly modern global population.

What's more, the projected pace of new infrastructure spending is accelerating, meaning there's still plenty of time for new investors to climb aboard - and profit from - the trend.

Just a year ago, an analysis by CIBC World Markets (NYSE: CM) predicted worldwide government spending on public works projects would total $35 trillion over the next 20 years. By the middle of 2009, a number of analysts - reviewing projected demands in the commodity and raw materials markets - had raised that forecast to $40 trillion, with nearly $4 trillion of that coming in 2010 and 2011 alone.

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Asia's Economic Recovery Gathering Steam with China at the Helm

By , Money Morning -

Manufacturing data today (Monday) confirmed that Asia's economic recovery is gaining strength, and China - whose economy may have expanded at a rate of 9.5% in the fourth quarter - is leading the revival.

The China Federation of Logistics and Purchasing on Sunday said the country's official purchasing managers' index (PMI) rose to 55.2 in December from 54.3 a month earlier. That's the biggest increase since April 2008, and it was aided by an increase in trade. The gauge of export orders rose to 54.5 and the reading for imports climbed to 52.8.

Similarly, the China Manufacturing PMI produced by HSBC Holdings PLC (NYSE ADR: HBC) and Markit Economics jumped from 55.7 to 56.1 last month. The index's average monthly increase in the fourth quarter was the largest on record.

Economists point to these numbers as further evidence of a robust recovery for China's economy, which grew at an 8.9% annualized pace in the third quarter.

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How to Profit From the Oil-Price Spike of 2010

By , Money Morning -

Oil prices staged a remarkable rally this year on the back of a weak dollar and a nascent economic recovery. In 2010, it's likely that these same factors will combine with an increase in global energy demand to push oil prices back up over $100 a barrel.

With stockpiles still high and energy demand rebounding sluggishly, most forecasts are calling for the "black gold" to edge up into the low-triple-digit price range. That's 40% higher than where oil is trading right now - but is still well below the record high of nearly $150 a barrel that was established in 2008.

Money Morning Chief Investment Strategist Keith Fitz-Gerald is even more bullish. He believes that a price of $100 a barrel is "easily attainable" and says that some sort of unforeseen market shock could cause crude oil to spike as high as $150 barrel by the end of 2010.

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IEA World Energy Outlook: Declining Investment Threatens Recovery

By , Money Morning -

Declining investment and a lack of progress on alternative energy development could lead to sharply higher oil prices in the decades ahead, the International Energy Agency (IEA) said in its 2009 World Energy Outlook.

The IEA for the past year has warned that the financial crisis was undermining investment in energy development. The advisor to 28 developed nations says the financial crisis is already responsible for a $90 billion drop in worldwide oil and natural gas investment, which is 19% below last year's levels.

"Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty," said the IEA. The decline in energy supplies combined with a sharp rise in prices could "undermine the stability of the economic recovery," it added.

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