Is This Man the Next Carl Icahn? (Here’s What He’s Buying Now…)

December 7th, 2010

Is This Man the Next Carl Icahn? (Here's What He's Buying Now...)

In a recent column on billionaire activist investor Carl Icahn, I detailed that tracking the moves of a high profile investment manager can be an extremely valuable strategy for individual investors. At the end of the day, coming to your own conclusion on whether an investment makes sense is most important, but there is certainly nothing wrong with leaning on other astute money masters in getting to your own buy, hold, or sell decision.

I just spent some time getting more familiar with William Ackman, who is another activist investor that, like Icahn, has become a billionaire by managing a number of hedge funds. Ackman's investment vehicle is Pershing Square Capital Management. His results so far are nothing short of impressive, returning more than +480% since inception in January of 2004.

Pershing Square is a traditional hedge fund in that it charges a hefty performance fee, but even after subtracting that out, along with a standard management fee, his funds are still up nearly +293% — 16 times greater than what the S&P 500 has done in this period and handily outperforming all primary market indexes (Ackman lists the S&P500, NASDAQ, Russell 1000, and Dow Jones Industrial average as performance “bogeys” in his investor letters).

To briefly summarize Ackman's primary investment approach, it is generally what you would expect from a successful manager. He takes a concentrated approach to investing, as he has the confidence to select a very small handful of companies that have a high probability of beating the market and garnering high total returns for his investors. This approach is also needed as an activist investor, given the need to talk directly to and in many cases confront company management teams. Too many investments would make this activist-bias extremely difficult.

Ackman's willingness to bet big on a few names he believes in mirrors that of legendary investor Warren Buffett earlier in his career. [Read: What Buffett Says About Diversification Will Shock You ] A focus on free cash flow, or operating cash flow minus capital expenditures, and companies that are trading well below intrinsic value are also similar to Buffett and value investors in general. (“Intrinsic value” is basically the value of a company if its future cash flow could be known with certainty.)

With that, here is an overview of some of his most recent investments and a summary of his opinions on the stocks…

J.C. Penney (NYSE: JCP)
J.C. Penney is one of Ackman's more recent investments. He recently disclosed he owned nearly 17% of J.C. Penney's shares and likes the name, given “its inexpensive valuation, strong brand name and assets, and well-deserved reputation for overseas sourcing, high quality systems, and large in-house brands.” This is clearly a turnaround play: J.C. Penney has lagged key rivals, including Kohl's (NYSE: KSS) and even big-box retailers such as Target (NYSE: TGT), which Ackman also happens to hold. He sees a coming recovery as the economy improves and will undoubtedly agitate for change to make Penney's more competitive with its peers.

Fortune Brands (NYSE: FO)
Another recent investment is Fortune Brands, a conglomerate that operates in the housing materials, alcoholic spirits, and golf industries. Ackman met with the company on November 4 and has been rumored to suggest a breakup of the company to enhance shareholder value. This makes sense as the housing and golf segments have really struggled. Demand for things like faucets, windows and doors have plummeted because of the housing bubble, and golfing continues to lose popularity as a hobby for younger people. The spirits business is the crown jewel of Fortune Brands, and Ackman believes that “there is substantially greater value that can be realized” in the stock, even though it has rallied strongly since Ackman's interest became public.

Ackman was unsuccessful in convincing Target to spin the real estate its stores are on into a separate company to increase shareholder value, but he still holds a sizable position, betting on

Uncategorized

Don’t Miss These 3 Solar Stocks on Sale

December 7th, 2010

Don't Miss These 3 Solar Stocks on Sale

Even with all of the hype around clean energy, a wide number of solar stocks have never been able to find much affection on Wall Street, settling for single-digit price-to-earnings (P/E) multiples. Blame it on Germany. The country has been such a huge supporter of solar power that investors have perennially feared that any spending pullback would wreck the solar industry. That feared pullback in Germany is now happening, yet the industry looks set to handle the transition just fine. And that could serve as a key catalyst to expand sector multiples in 2011. [Catalyst Investing Secrets]

Based on analysis conducted by IMS Research, Germany accounts for 46% of all spending on solar power in 2010. That figure should drop to 35% in 2011 and even lower after that as Germany slowly pulls back its support for solar subsidies. Yet other countries are stepping in to pick up the slack: IMS has identified 18 markets that will each install at least 100 Megawatts (MW) of solar power in 2011, up from just eight markets in 2009. That means the solar industry “will eventually become much less dependent upon just one or two countries and less susceptible to the swings in demand caused by changes to incentive schemes,” noted the IMS analysts in a recent report.

To be sure, Germany's pullback means that the solar market will barely grow in 2011. Goldman Sachs believes the market will be flat in 2011, with around 17 Gigawatts (GW) of power installed. IMS Research pegs that figure at 19 GW — a +10% jump. Those figures would have been higher were it not for the recent changes in the U.S. political landscape. The U.S. government had been previously expected to make a major clean energy push in 2011, but that has now been pushed out until at least 2012.

European governments have also turned more cautious, thanks to budget problems. The fact that the market will still be at least flat while Europe and the United States hold back full support, and also while oil prices remain well below the peaks of a few years ago tells you that this is still a quite-healthy industry.

Yet it's that geographic diversity that holds the key. Analysts are likely to stop waiting for a demand-related plunge in pricing as more countries step in to absorb demand. Indeed many solar companies have already sold out much of their 2011 production and are starting to look at orders for 2012. In the next year, we may well see a boost from rising oil prices (if the global economy picks up steam) or renewed government support in Europe and the United States.

Right now, I'm focusing on three solar plays that could make investors money.

I already discussed the reasons to be bullish about LDK Solar (NYSE: LDK). You may also want to check out the industry's premier technology play as well as one of the industry's cheapest stocks, First Solar (Nasdaq: FSLR) and JinkoSolar (Nasdaq: JKS), respectively.

First Solar
This company offers customers the most bang for the buck. Its technology approach yields less power, but can also be made much more cheaply. Year after year, demand has been so strong management saw the need to build yet more plants. The company boosted the number of production lines from seven in 2007 to 23 in 2009. Management decided to slow down in 2010 to wait and see how demand would fare, but now sees a much more robust market in the years ahead, with plans to operate 36 production lines in 2011 and 48 in 2012.

Yet shares have gone nowhere in the past two years, still fetching $130. That's because investors have questioned the company's move into partial ownership of massive solar fields in partnership with utilities. The move drained away some of the company's nearly $1 billion in cash and is also leading to lower gross margins. But management has noted all long that total profits should rise well higher once all of its investments are complete.

First Solar's per share profits are likely to be flat this year, but they are expected to rise +15% in 2011 and perhaps +20% in 2012 as it benefits from those capacity additions. Shares trade for less than 15 times likely 2012 profits. That's not cheap compared to the rest of the sector. But for an industry leader that has a clear path to strong long-term growth, that's a nice entry point.

JinkoSolar
During the summer this was shaping up to be one of the hottest IPOs of 2010. The stock raced from an $11 IPO price in May to nearly $40 as quarterly results came in far, far ahead of forecasts. That led analysts to sharply boost profit forecasts, and analysts now think JinkoSolar can earn more than $5 a share this year.

So why have shares come plunging back down to less than $25? For starters, the company announced a secondary equity offering that was initially feared to be very dilutive (and has since been completed with only 10% dilution). In addition, JinkoSolar's six-month post-IPO lock-up period has expired, and insiders are likely taking profits with the stock still more than +100% above the IPO price. Lastly, investors have been shedding exposure to the whole group, and this high-beta stock has been especially hard-hit.

It looks to me as if all of the damage is done. For starters, investors appear to be underestimating 2011's earnings power, just as they have been well behind the eight ball with recent impressive quarterly trends. Secondly, the company's recent capital raise is expected to sharply boost capacity next year, which should help more than offset expected pricing declines. Lastly, the stock has finally started to rebound after falling for five out of six trading sessions. I always like to see that kind of action when analyzing a stock that has been in freefall.

Action to Take –>The solar industry has few supports at the moment, either in the analyst community or in the financial media. That's how I like it. This sector was similarly out of favor last spring, and those with fortitude made a killing in the sector this summer.

I'm not anticipating a rapid rebound for this sector, but the three stocks I mentioned above look like solid long-term solar plays, and are currently out of favor. Now looks like a good time to get in on First Solar if you're looking for a good long-term growth play. And even if you think JinkoSolar deserves to trade at just seven or eight times profits, you're still looking at +40% to +60% upside. [Be sure to read my previous analysis on LDK Solar, as I think the stock could double in a year or so.]


– David Sterman

David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and a Managing Editor at TheStreet.com. Read More…

Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

This article originally appeared on StreetAuthority
Author: David Sterman
Don't Miss These 3 Solar Stocks on Sale

Read more here:
Don’t Miss These 3 Solar Stocks on Sale

Uncategorized

Don’t Miss These 3 Solar Stocks on Sale

December 7th, 2010

Don't Miss These 3 Solar Stocks on Sale

Even with all of the hype around clean energy, a wide number of solar stocks have never been able to find much affection on Wall Street, settling for single-digit price-to-earnings (P/E) multiples. Blame it on Germany. The country has been such a huge supporter of solar power that investors have perennially feared that any spending pullback would wreck the solar industry. That feared pullback in Germany is now happening, yet the industry looks set to handle the transition just fine. And that could serve as a key catalyst to expand sector multiples in 2011. [Catalyst Investing Secrets]

Based on analysis conducted by IMS Research, Germany accounts for 46% of all spending on solar power in 2010. That figure should drop to 35% in 2011 and even lower after that as Germany slowly pulls back its support for solar subsidies. Yet other countries are stepping in to pick up the slack: IMS has identified 18 markets that will each install at least 100 Megawatts (MW) of solar power in 2011, up from just eight markets in 2009. That means the solar industry “will eventually become much less dependent upon just one or two countries and less susceptible to the swings in demand caused by changes to incentive schemes,” noted the IMS analysts in a recent report.

To be sure, Germany's pullback means that the solar market will barely grow in 2011. Goldman Sachs believes the market will be flat in 2011, with around 17 Gigawatts (GW) of power installed. IMS Research pegs that figure at 19 GW — a +10% jump. Those figures would have been higher were it not for the recent changes in the U.S. political landscape. The U.S. government had been previously expected to make a major clean energy push in 2011, but that has now been pushed out until at least 2012.

European governments have also turned more cautious, thanks to budget problems. The fact that the market will still be at least flat while Europe and the United States hold back full support, and also while oil prices remain well below the peaks of a few years ago tells you that this is still a quite-healthy industry.

Yet it's that geographic diversity that holds the key. Analysts are likely to stop waiting for a demand-related plunge in pricing as more countries step in to absorb demand. Indeed many solar companies have already sold out much of their 2011 production and are starting to look at orders for 2012. In the next year, we may well see a boost from rising oil prices (if the global economy picks up steam) or renewed government support in Europe and the United States.

Right now, I'm focusing on three solar plays that could make investors money.

I already discussed the reasons to be bullish about LDK Solar (NYSE: LDK). You may also want to check out the industry's premier technology play as well as one of the industry's cheapest stocks, First Solar (Nasdaq: FSLR) and JinkoSolar (Nasdaq: JKS), respectively.

First Solar
This company offers customers the most bang for the buck. Its technology approach yields less power, but can also be made much more cheaply. Year after year, demand has been so strong management saw the need to build yet more plants. The company boosted the number of production lines from seven in 2007 to 23 in 2009. Management decided to slow down in 2010 to wait and see how demand would fare, but now sees a much more robust market in the years ahead, with plans to operate 36 production lines in 2011 and 48 in 2012.

Yet shares have gone nowhere in the past two years, still fetching $130. That's because investors have questioned the company's move into partial ownership of massive solar fields in partnership with utilities. The move drained away some of the company's nearly $1 billion in cash and is also leading to lower gross margins. But management has noted all long that total profits should rise well higher once all of its investments are complete.

First Solar's per share profits are likely to be flat this year, but they are expected to rise +15% in 2011 and perhaps +20% in 2012 as it benefits from those capacity additions. Shares trade for less than 15 times likely 2012 profits. That's not cheap compared to the rest of the sector. But for an industry leader that has a clear path to strong long-term growth, that's a nice entry point.

JinkoSolar
During the summer this was shaping up to be one of the hottest IPOs of 2010. The stock raced from an $11 IPO price in May to nearly $40 as quarterly results came in far, far ahead of forecasts. That led analysts to sharply boost profit forecasts, and analysts now think JinkoSolar can earn more than $5 a share this year.

So why have shares come plunging back down to less than $25? For starters, the company announced a secondary equity offering that was initially feared to be very dilutive (and has since been completed with only 10% dilution). In addition, JinkoSolar's six-month post-IPO lock-up period has expired, and insiders are likely taking profits with the stock still more than +100% above the IPO price. Lastly, investors have been shedding exposure to the whole group, and this high-beta stock has been especially hard-hit.

It looks to me as if all of the damage is done. For starters, investors appear to be underestimating 2011's earnings power, just as they have been well behind the eight ball with recent impressive quarterly trends. Secondly, the company's recent capital raise is expected to sharply boost capacity next year, which should help more than offset expected pricing declines. Lastly, the stock has finally started to rebound after falling for five out of six trading sessions. I always like to see that kind of action when analyzing a stock that has been in freefall.

Action to Take –>The solar industry has few supports at the moment, either in the analyst community or in the financial media. That's how I like it. This sector was similarly out of favor last spring, and those with fortitude made a killing in the sector this summer.

I'm not anticipating a rapid rebound for this sector, but the three stocks I mentioned above look like solid long-term solar plays, and are currently out of favor. Now looks like a good time to get in on First Solar if you're looking for a good long-term growth play. And even if you think JinkoSolar deserves to trade at just seven or eight times profits, you're still looking at +40% to +60% upside. [Be sure to read my previous analysis on LDK Solar, as I think the stock could double in a year or so.]


– David Sterman

David Sterman started his career in equity research at Smith Barney, culminating in a position as Senior Analyst covering European banks. David has also served as Director of Research at Individual Investor and a Managing Editor at TheStreet.com. Read More…

Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

This article originally appeared on StreetAuthority
Author: David Sterman
Don't Miss These 3 Solar Stocks on Sale

Read more here:
Don’t Miss These 3 Solar Stocks on Sale

Uncategorized

Watch Out For A Fake Breakout In Gold And Silver

December 7th, 2010

In my studies of the financial markets, I have found the study of trading tactics to be similar to my studies of military history and sports.

In 329 BC, Alexander the Great, in his mid-20s, led his army through the Hindu Kush mountains to Central Asia to expand his empire that covered 1 million square miles. He was a terrific military strategist who would often defeat his opponents psychologically in order to preserve his army, which for many years marched 30 miles a day across deserts and mountain ranges carrying heavy equipment. Alexander became the most powerful leader in his generation until his mysterious death at the young age of 32.

One of his classic battle strategies consisted of ordering his men to blow the war trumpets and yell their battle cries night after night so that a besieged city would need to prepare for war repeatedly. Eventually, the foes would grow tired of this daily routine and Alexander would monitor exactly when the enemies stopped reacting. As soon as Alexander saw the window of opportunity he attacked fast and hard and would decimate his adversaries.

Similarly in football, a defense will line up at the line of scrimmage often faking a blitz, forcing the quarterback to call an audible. Eventually, after faking a few times, the quarterback lets down his guard, and that’s when the blitz comes and the major yardage loss occurs unexpectedly.

Similarly with the gold ETF (GLD). Last week it broke the August-to-November trend and showed a negative divergence, causing many technical analysts, myself included, to be concerned of a steeper correction. Since my October 4 signal, where I ventured out of bullion into the junior miners, the best way to play the gold market is through trading the oscillators. In August and September, gold had a steady climb higher. This was a trending market. We began seeing some key psychological bearish one-day reversals in October and the gold market began behaving volatile with a false breakout in early November. At that time I focused on my highly rated junior miners as I believed that their breakouts were more secure than the bullion due to the upside volume. After the false breakout we had high volume distribution days and broke the August-to-November trendline. The battle cry from the “bears” was heard. Bulls supported gold but the enthusiasm and volume was nowhere near the previous sell-off. Now we’ve just broken highs, but on recent breakouts there has been a lot of profit taking. This signals an area of key psychological resistance. A lack of volume on the breakout and high volume reversal is signaling that the bears’ battle cry is heard again. Will this be the real deal?

Read more here:
Watch Out For A Fake Breakout In Gold And Silver

Commodities, ETF

Watch Out For A Fake Breakout In Gold And Silver

December 7th, 2010

In my studies of the financial markets, I have found the study of trading tactics to be similar to my studies of military history and sports.

In 329 BC, Alexander the Great, in his mid-20s, led his army through the Hindu Kush mountains to Central Asia to expand his empire that covered 1 million square miles. He was a terrific military strategist who would often defeat his opponents psychologically in order to preserve his army, which for many years marched 30 miles a day across deserts and mountain ranges carrying heavy equipment. Alexander became the most powerful leader in his generation until his mysterious death at the young age of 32.

One of his classic battle strategies consisted of ordering his men to blow the war trumpets and yell their battle cries night after night so that a besieged city would need to prepare for war repeatedly. Eventually, the foes would grow tired of this daily routine and Alexander would monitor exactly when the enemies stopped reacting. As soon as Alexander saw the window of opportunity he attacked fast and hard and would decimate his adversaries.

Similarly in football, a defense will line up at the line of scrimmage often faking a blitz, forcing the quarterback to call an audible. Eventually, after faking a few times, the quarterback lets down his guard, and that’s when the blitz comes and the major yardage loss occurs unexpectedly.

Similarly with the gold ETF (GLD). Last week it broke the August-to-November trend and showed a negative divergence, causing many technical analysts, myself included, to be concerned of a steeper correction. Since my October 4 signal, where I ventured out of bullion into the junior miners, the best way to play the gold market is through trading the oscillators. In August and September, gold had a steady climb higher. This was a trending market. We began seeing some key psychological bearish one-day reversals in October and the gold market began behaving volatile with a false breakout in early November. At that time I focused on my highly rated junior miners as I believed that their breakouts were more secure than the bullion due to the upside volume. After the false breakout we had high volume distribution days and broke the August-to-November trendline. The battle cry from the “bears” was heard. Bulls supported gold but the enthusiasm and volume was nowhere near the previous sell-off. Now we’ve just broken highs, but on recent breakouts there has been a lot of profit taking. This signals an area of key psychological resistance. A lack of volume on the breakout and high volume reversal is signaling that the bears’ battle cry is heard again. Will this be the real deal?

Read more here:
Watch Out For A Fake Breakout In Gold And Silver

Commodities, ETF

Don’t Bet on New Zealand’s Recovery

December 7th, 2010

On Wednesday, December 8, the Reserve Bank of New Zealand will announce its latest interest rate decision. At first glance, it might appear that a small rate hike is in order, considering the country’s rising costs of living. But dig a bit deeper, and the overwhelming likelihood is that the bank will not change rates at all – placing a lot of short-term selling pressure on the New Zealand dollar (NZD).

It’s a shocking turn of events for a country that enjoyed a nice rebound. After contracting by an average of about 0.4% a quarter, the Pacific economy enjoyed an average of 0.5% gain over the last 12 months. But the recovery isn’t expanding fast enough. In fact, it’s quite the opposite – it has been slowly contracting since the middle of this year.

A big part of the problem is consumer spending. On paper, sales were strong last quarter, despite the country’s high unemployment rate – 6.4% heading into the fourth quarter. But it turns out the boost in spending wasn’t triggered by optimistic shoppers. Instead, it was a reaction to something that stands to take a big bite out of future retail sales: an increase in the goods and services tax (GST).

New Zealand’s GST – a fancy way to say “sales tax” – recently jumped from 12.5% to 15%. So retail sales surged as consumers stocked up on things at lower prices. Without the surge, retail spending may have been flat to negative for the last three months.

Meanwhile, in another sign of trouble, building consents (new housing authorizations) have dropped by 20% since the first quarter. This is a big deal because, as in the United States, new homes are an important spending generator.

Needless to say, the lackluster sales have helped keep New Zealand’s inflation in check. Consumer prices have remained well below the Reserve Bank of New Zealand’s benchmark target of 2-3%. In fact, the overall inflation has increased by only 1.6%.

The numbers aren’t suggestive of deflation, and they do indicate a rising cost of living. But just barely – overall, they aren’t inflationary. With prices at below target levels, there is no justification for higher interest rates in the short term.

Weak manufacturing isn’t helping the case for higher rates, either.

For three straight months, the New Zealand manufacturing sector has shown nothing but contraction. According to the country’s manufacturing index published last month, factories saw little growth in new orders and delivered goods. At the same time, the monthly production index dropped to a reading of 49.7. Anything below a reading of 50 is considered a contraction.

This means that companies are completing current product projects but have little in the pipeline for the sector’s future growth.

A quick look at the country’s two trade partners shows why. New Zealand’s export market is primarily driven by trade with Australia and the United States. Combined, the economies are responsible for over one-third of New Zealand’s exports. And with both economies in a slowdown, you can bet that the country’s manufacturing sector will continue to remain in the doldrums.

Put it all together, and the short-term future of the kiwi dollar looks grim. Softer economic times in New Zealand. Low rates of inflation. Stable to low manufacturing growth. Add on a sidelined Reserve Bank of New Zealand, and it’s making the case for a weaker New Zealand dollar exchange rate even more realistic.

Richard Lee
for The Daily Reckoning

Don’t Bet on New Zealand’s Recovery originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
Don’t Bet on New Zealand’s Recovery




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

Don’t Bet on New Zealand’s Recovery

December 7th, 2010

On Wednesday, December 8, the Reserve Bank of New Zealand will announce its latest interest rate decision. At first glance, it might appear that a small rate hike is in order, considering the country’s rising costs of living. But dig a bit deeper, and the overwhelming likelihood is that the bank will not change rates at all – placing a lot of short-term selling pressure on the New Zealand dollar (NZD).

It’s a shocking turn of events for a country that enjoyed a nice rebound. After contracting by an average of about 0.4% a quarter, the Pacific economy enjoyed an average of 0.5% gain over the last 12 months. But the recovery isn’t expanding fast enough. In fact, it’s quite the opposite – it has been slowly contracting since the middle of this year.

A big part of the problem is consumer spending. On paper, sales were strong last quarter, despite the country’s high unemployment rate – 6.4% heading into the fourth quarter. But it turns out the boost in spending wasn’t triggered by optimistic shoppers. Instead, it was a reaction to something that stands to take a big bite out of future retail sales: an increase in the goods and services tax (GST).

New Zealand’s GST – a fancy way to say “sales tax” – recently jumped from 12.5% to 15%. So retail sales surged as consumers stocked up on things at lower prices. Without the surge, retail spending may have been flat to negative for the last three months.

Meanwhile, in another sign of trouble, building consents (new housing authorizations) have dropped by 20% since the first quarter. This is a big deal because, as in the United States, new homes are an important spending generator.

Needless to say, the lackluster sales have helped keep New Zealand’s inflation in check. Consumer prices have remained well below the Reserve Bank of New Zealand’s benchmark target of 2-3%. In fact, the overall inflation has increased by only 1.6%.

The numbers aren’t suggestive of deflation, and they do indicate a rising cost of living. But just barely – overall, they aren’t inflationary. With prices at below target levels, there is no justification for higher interest rates in the short term.

Weak manufacturing isn’t helping the case for higher rates, either.

For three straight months, the New Zealand manufacturing sector has shown nothing but contraction. According to the country’s manufacturing index published last month, factories saw little growth in new orders and delivered goods. At the same time, the monthly production index dropped to a reading of 49.7. Anything below a reading of 50 is considered a contraction.

This means that companies are completing current product projects but have little in the pipeline for the sector’s future growth.

A quick look at the country’s two trade partners shows why. New Zealand’s export market is primarily driven by trade with Australia and the United States. Combined, the economies are responsible for over one-third of New Zealand’s exports. And with both economies in a slowdown, you can bet that the country’s manufacturing sector will continue to remain in the doldrums.

Put it all together, and the short-term future of the kiwi dollar looks grim. Softer economic times in New Zealand. Low rates of inflation. Stable to low manufacturing growth. Add on a sidelined Reserve Bank of New Zealand, and it’s making the case for a weaker New Zealand dollar exchange rate even more realistic.

Richard Lee
for The Daily Reckoning

Don’t Bet on New Zealand’s Recovery originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
Don’t Bet on New Zealand’s Recovery




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

Gold Mining Mergers And Acquisitions In 2011

December 7th, 2010

Video Interview With thestreet.com on some of the potential targets for majors in 2011.

Read more here:
Gold Mining Mergers And Acquisitions In 2011

Commodities

America’s Next Great Commodity Boom

December 7th, 2010

If you’re interested in making money in energy commodities over the coming decade, I have two important numbers for you…

The first is the price of natural gas in the US – which is less than $4.50 per million British thermal units (mBtu). The second is the price of natural gas in Asia, where people will pay $10 per mBtu for natural gas they import from overseas.

This is a disparity someone can make a lot of money on. The only reason it exists at all is that the natural gas market is mainly a local market. It is not as easy to ship natural gas across the seas as it is to ship oil. You have to supercool it so it liquefies. Then you can put it on a tanker and ship it to a terminal where your buyer can re-gasify it. This is the liquefied natural gas (LNG) trade.

There are problems. US energy companies, before the shale gas boom changed everything, thought the US would need to import natural gas. So the US has about 10 LNG import terminals and two more in the works. Now, with a natural gas glut in the US, these terminals are pretty much useless.

Owners of these terminals want to refit the terminals to turn them into export terminals, where the gas is liquefied and shipped out. They are now petitioning the US government for export licenses.

As The Financial Times reported, “The US could soon be competing with Russia and the Middle East to supply the world with natural gas, a shift in production that would reshape energy markets over the next decade.” Even if the US exported just 10% of its natural gas, it would become the largest exporter of LNG in the world. Few countries can match the US in natural gas resources or low costs.

So where will the natural gas go? This is an interesting question, because it yields some surprising answers.

I attended the ASPO conference last month in Washington, DC. (ASPO stands for the Association for the Study of Peak Oil and Gas.) One of the more fascinating presentations was by Jonathan Callahan, founder of Mazama Science.

He looked at natural gas through the lens of the import/export markets. This is a good thing to do for any commodity because it can tip you off to what’s happening in that market. When China went from being one of the biggest exporters of soybeans to the biggest importer, the effect on the agricultural markets was huge.

Any time a big exporter becomes a big importer, you can bet it spells opportunity for that commodity. China, for instance, remains a big importer of oil and iron ore, which has been good for investors in those commodities. China will very soon become a big importer of coking coal – which is used to make steel. So will India and Brazil. This is good to know if you’re an investor, as it will drive demand for coking coal.

So Callahan looked at natural gas through the same kind of lens. He created these charts that capture the natural gas import trends in some of the world’s largest economies.

China and UK Shift From Being Net Exporters to Net Importers of Natural Gas

You can see that the UK was an importer of natural gas through the 1980s and 1990s. Then there was the North Sea boost, matched by a step-up in consumption. Finally, as the North Sea supplies dwindle, the UK has gone deep into the red as an importer. This chart exhibits a pattern we see time and time again. Consumption is sticky and stubborn. It doesn’t go down much.

Using this same analysis, Callahan looks at all the big producers and consumers of natural gas. The big buyers here are Japan, South Korea, and Taiwan. All of the gas they import comes from LNG tankers.

But what about, say, China? Note that China is flipping from a net exporter to a net importer – which means China is just becoming a net buyer of natural gas. Per-capita consumption, Callahan points out, is only a fraction of China’s neighbors’. He predicts – and I agree – China will become a huge importer of natural gas.

Combine China with Japan, Taiwan, and South Korea and Callahan concludes, “Clearly, East Asian demand for LNG will not be letting up anytime soon.”

Callahan’s data suggest this trend is present all around the world…from the Middle East to South America to Europe.

The impact on the global market seems clear. “If shale gas doesn’t turn out to be as prolific as hoped,” Callahan wraps up, “we can expect to see increasingly expensive natural gas in the next decade. Forewarned is forearmed.” (I encourage you to check out his website – mazamascience.com, where you can see his presentations and read his blog.)

So put together Callahan’s data on exports and imports with the glut in the US and the lack of export terminals. I think it’s pretty clear we’ll see more export terminals in the US. It’s too big of an opportunity to ignore. The US could become the leading exporter of natural gas in the next decade.

It’s also pretty clear that worldwide, we’ll see the LNG trade grow significantly to make up the shortfalls that are emerging in South America, Asia, Europe, and the Middle East.

It’s a great time to buy infrastructure firms that build these plants. It’s also a great time to look at companies with lots of North American natural gas reserves. With natural gas in the dumps right now, these assets are cheap…but they won’t stay that way for long.

Regards,

Chris Mayer
for The Daily Reckoning

America’s Next Great Commodity Boom originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
America’s Next Great Commodity Boom




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

America’s Next Great Commodity Boom

December 7th, 2010

If you’re interested in making money in energy commodities over the coming decade, I have two important numbers for you…

The first is the price of natural gas in the US – which is less than $4.50 per million British thermal units (mBtu). The second is the price of natural gas in Asia, where people will pay $10 per mBtu for natural gas they import from overseas.

This is a disparity someone can make a lot of money on. The only reason it exists at all is that the natural gas market is mainly a local market. It is not as easy to ship natural gas across the seas as it is to ship oil. You have to supercool it so it liquefies. Then you can put it on a tanker and ship it to a terminal where your buyer can re-gasify it. This is the liquefied natural gas (LNG) trade.

There are problems. US energy companies, before the shale gas boom changed everything, thought the US would need to import natural gas. So the US has about 10 LNG import terminals and two more in the works. Now, with a natural gas glut in the US, these terminals are pretty much useless.

Owners of these terminals want to refit the terminals to turn them into export terminals, where the gas is liquefied and shipped out. They are now petitioning the US government for export licenses.

As The Financial Times reported, “The US could soon be competing with Russia and the Middle East to supply the world with natural gas, a shift in production that would reshape energy markets over the next decade.” Even if the US exported just 10% of its natural gas, it would become the largest exporter of LNG in the world. Few countries can match the US in natural gas resources or low costs.

So where will the natural gas go? This is an interesting question, because it yields some surprising answers.

I attended the ASPO conference last month in Washington, DC. (ASPO stands for the Association for the Study of Peak Oil and Gas.) One of the more fascinating presentations was by Jonathan Callahan, founder of Mazama Science.

He looked at natural gas through the lens of the import/export markets. This is a good thing to do for any commodity because it can tip you off to what’s happening in that market. When China went from being one of the biggest exporters of soybeans to the biggest importer, the effect on the agricultural markets was huge.

Any time a big exporter becomes a big importer, you can bet it spells opportunity for that commodity. China, for instance, remains a big importer of oil and iron ore, which has been good for investors in those commodities. China will very soon become a big importer of coking coal – which is used to make steel. So will India and Brazil. This is good to know if you’re an investor, as it will drive demand for coking coal.

So Callahan looked at natural gas through the same kind of lens. He created these charts that capture the natural gas import trends in some of the world’s largest economies.

China and UK Shift From Being Net Exporters to Net Importers of Natural Gas

You can see that the UK was an importer of natural gas through the 1980s and 1990s. Then there was the North Sea boost, matched by a step-up in consumption. Finally, as the North Sea supplies dwindle, the UK has gone deep into the red as an importer. This chart exhibits a pattern we see time and time again. Consumption is sticky and stubborn. It doesn’t go down much.

Using this same analysis, Callahan looks at all the big producers and consumers of natural gas. The big buyers here are Japan, South Korea, and Taiwan. All of the gas they import comes from LNG tankers.

But what about, say, China? Note that China is flipping from a net exporter to a net importer – which means China is just becoming a net buyer of natural gas. Per-capita consumption, Callahan points out, is only a fraction of China’s neighbors’. He predicts – and I agree – China will become a huge importer of natural gas.

Combine China with Japan, Taiwan, and South Korea and Callahan concludes, “Clearly, East Asian demand for LNG will not be letting up anytime soon.”

Callahan’s data suggest this trend is present all around the world…from the Middle East to South America to Europe.

The impact on the global market seems clear. “If shale gas doesn’t turn out to be as prolific as hoped,” Callahan wraps up, “we can expect to see increasingly expensive natural gas in the next decade. Forewarned is forearmed.” (I encourage you to check out his website – mazamascience.com, where you can see his presentations and read his blog.)

So put together Callahan’s data on exports and imports with the glut in the US and the lack of export terminals. I think it’s pretty clear we’ll see more export terminals in the US. It’s too big of an opportunity to ignore. The US could become the leading exporter of natural gas in the next decade.

It’s also pretty clear that worldwide, we’ll see the LNG trade grow significantly to make up the shortfalls that are emerging in South America, Asia, Europe, and the Middle East.

It’s a great time to buy infrastructure firms that build these plants. It’s also a great time to look at companies with lots of North American natural gas reserves. With natural gas in the dumps right now, these assets are cheap…but they won’t stay that way for long.

Regards,

Chris Mayer
for The Daily Reckoning

America’s Next Great Commodity Boom originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
America’s Next Great Commodity Boom




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

The Gross Mismanagement of Mexico’s Oil Industry

December 7th, 2010

Mexico should be rich. Instead, the country provides a disheartening example of what author P.J. O’Rourke might call “making nothing from everything.”

We’ve been trekking around the Pacific Coast – well, a very small part of it – for the past week or so. The stretch between Puerto Vallarta and Sayulita – about 40 miles – boasts some of the most pristine coastland your Aussie-born editor has ever seen. It is the type that might inspire California’s “trustafarian” community to erect multi-million dollar beachfront mansions, around which they would shoot opening credit footage for teen reality shows about the trials and tribulations of the good life. But down here, the towns are tiny, peaceful and conspicuously devoid of L.A.-style bling. Life is simple. Only the occasional fishing or surfing village punctuates enormous swaths of virgin, oceanfront real estate.

The locals, at least from what we’ve seen, are an especially hard-working bunch. By day, they toil under the red-hot sun…and then, when it goes down, they toil some more. What’s more, unlike their depressed, though highly privileged cousins north of the border, they smile like it’s a national sport.

But so what? If a tropical clime and a broadly grinning local workforce were the only ingredients necessary to bake a cake of national economic prosperity, Cuba might be the preferred dessert of the Caribbean. Instead, it barely passes for an econo-Twinkie. (The Mexican captain of a fishing boat we took over the weekend made the point for us: “Ok amigos. Today we go to a beautiful island for your pleasure,” he told the eager crowd. “Are you ready for this? We go to Cuba! Haha… Just joking! We wouldn’t do that to you. You’re our amigos!”)

The real wealth, of course, is to the east, in the Gulf of Mexico. The Cantarell Field, in particular, should have been a boon to this nation. And for a while, it was. Ironically, however, nothing suffers at the hands of bureaucrats quite like raw, capitalistic opportunity and the success it threatens to visit upon ordinary, voting citizens.

With roughly 18 billion barrels of recoverable oil (35 billion in total), the Cantarell Field is roughly one third larger than Alaska’s mighty Prudhoe Bay (with a “measly” 12 billion). What’s more, unlike the extreme arctic conditions in Alaska and the sheer remoteness of the project (at 650 miles north of Anchorage), Mexico’s black gold sits just 50 miles off the coast…and in Caribbean waters of scuba-friendly temperature.

Such is the richness of the Cantarell Complex, and the luck of Mexico, that it didn’t even take a geophysicist or highly paid geologist to discover it. Instead, Rudesindo Cantarell, a fisherman, noticed that his nets were actually clogging up with the black stuff. It seems the natural oil seeps were literally begging to be discovered. Cantarell couldn’t have missed it if he tried. But the story gets even more interesting. The holes in the rock – or pores – where the oil is located appears to be – wait for it – part of the rubble formation from the asteroid impact that created the Chicxulub Crater some 65 million years ago. More amazing still, many scientists actually credit this as the (or one of the) “extinction event/s” that eventually wiped out the dinosaurs. Call it a gift from the heavens (unless, that is, you happened to be a God-fearing dinosaur).

With heaven and earth conspiring to deliver such a bounty to the Mexican people, one is tempted, perhaps beyond better judgment, to ask: What could possibly go wrong? Enter Pemex, the nation’s state-owned petroleum company. Again, it seems there is no privilege so vast as to render it beyond the destruction of the “people’s” government.

Pemex was “created” back in 1917 when, bowing, as politicians seem genetically preprogrammed to do, to public pressure, President Cárdenas embarked on the state-expropriation of all resources and facilities and, in the process, nationalized both United States and Anglo–Dutch companies operating within its borders. Despite international boycotts, Pemex led Mexico to become the world’s fifth largest oil-producing nation.

Now, Fellow Reckoner, what do you suppose a wide-eyed group of bureaucrats might do with a plump, oily egg-laying goose? Invest in exploration and development of nearby fields? Farm out some of the work to foreign companies with the necessary expertise and proven track records to bring the stuff to market? Look to secure the future of the voters who put them in office by shoring up the foundation of the nation’s largest tax paying company? Ha! Don’t make us laugh. Why, they sharpen the cleaver…and sit down to enjoy a one-time-only feast. And after the last feather is plucked and morsel consumed? Hey, this is politics! That’s a problem for the next bum to deal with.

Despite annual revenues in excess of $75 billion dollars, Pemex is only able to survive today through its immense borrowing. Pemex pays out over 60% of its revenues in taxes and royalties. Those receipts, in turn, account for around 40% of the federal government’s entire budget. As such, the state-owned dinosaur is now over $40 billion in the hole (so to speak) and, to make matters worse, is facing inexorable production decline in many of its fields, including that giant asteroid baby, Cantarell.

“Mexico’s oil industry is in crisis,” Byron King, the intrepid editor of Energy & Scarcity Investor, recently explained to his readers. “Indeed the grim numbers come from no less a source than the Mexican Energy Ministry. Production statistics make it clear that Mexico’s overall oil output is declining rapidly – with the word ‘crashing’ coming to mind as one views the chart [below].

Mexican Crude Oil Supply 2001-2009

“After decades of production,” continues Byron, “Cantarell is getting long in the tooth. Oil output is declining rapidly. Cantarell is depleting at an astonishing rate. Meanwhile, the yield from new Mexican oil fields is simply not making up the difference.”

Cantarell “peaked” around 2003…and only then after a massive nitrogen injection project to boost production. Since then, it’s been in steady decline, from a high of 2.9 million barrels per day to just 464,000 per day currently.

“Due to falling oil output, especially from offshore, Mexico will likely cease being an oil exporting nation by 2015,” concludes Byron. “This looming problem holds dire implications for the national balance sheet of Mexico, as well as – by implication – for US energy and national security.”

We can only hope the “next bum” has better ideas about how to maximize Mexico’s vast oil potential than all those preceding him. Judging by their track record, that shouldn’t take much. Then again, we are talking about politicians here.

Joel Bowman
for The Daily Reckoning

The Gross Mismanagement of Mexico’s Oil Industry originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
The Gross Mismanagement of Mexico’s Oil Industry




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Real Estate, Uncategorized

The Gross Mismanagement of Mexico’s Oil Industry

December 7th, 2010

Mexico should be rich. Instead, the country provides a disheartening example of what author P.J. O’Rourke might call “making nothing from everything.”

We’ve been trekking around the Pacific Coast – well, a very small part of it – for the past week or so. The stretch between Puerto Vallarta and Sayulita – about 40 miles – boasts some of the most pristine coastland your Aussie-born editor has ever seen. It is the type that might inspire California’s “trustafarian” community to erect multi-million dollar beachfront mansions, around which they would shoot opening credit footage for teen reality shows about the trials and tribulations of the good life. But down here, the towns are tiny, peaceful and conspicuously devoid of L.A.-style bling. Life is simple. Only the occasional fishing or surfing village punctuates enormous swaths of virgin, oceanfront real estate.

The locals, at least from what we’ve seen, are an especially hard-working bunch. By day, they toil under the red-hot sun…and then, when it goes down, they toil some more. What’s more, unlike their depressed, though highly privileged cousins north of the border, they smile like it’s a national sport.

But so what? If a tropical clime and a broadly grinning local workforce were the only ingredients necessary to bake a cake of national economic prosperity, Cuba might be the preferred dessert of the Caribbean. Instead, it barely passes for an econo-Twinkie. (The Mexican captain of a fishing boat we took over the weekend made the point for us: “Ok amigos. Today we go to a beautiful island for your pleasure,” he told the eager crowd. “Are you ready for this? We go to Cuba! Haha… Just joking! We wouldn’t do that to you. You’re our amigos!”)

The real wealth, of course, is to the east, in the Gulf of Mexico. The Cantarell Field, in particular, should have been a boon to this nation. And for a while, it was. Ironically, however, nothing suffers at the hands of bureaucrats quite like raw, capitalistic opportunity and the success it threatens to visit upon ordinary, voting citizens.

With roughly 18 billion barrels of recoverable oil (35 billion in total), the Cantarell Field is roughly one third larger than Alaska’s mighty Prudhoe Bay (with a “measly” 12 billion). What’s more, unlike the extreme arctic conditions in Alaska and the sheer remoteness of the project (at 650 miles north of Anchorage), Mexico’s black gold sits just 50 miles off the coast…and in Caribbean waters of scuba-friendly temperature.

Such is the richness of the Cantarell Complex, and the luck of Mexico, that it didn’t even take a geophysicist or highly paid geologist to discover it. Instead, Rudesindo Cantarell, a fisherman, noticed that his nets were actually clogging up with the black stuff. It seems the natural oil seeps were literally begging to be discovered. Cantarell couldn’t have missed it if he tried. But the story gets even more interesting. The holes in the rock – or pores – where the oil is located appears to be – wait for it – part of the rubble formation from the asteroid impact that created the Chicxulub Crater some 65 million years ago. More amazing still, many scientists actually credit this as the (or one of the) “extinction event/s” that eventually wiped out the dinosaurs. Call it a gift from the heavens (unless, that is, you happened to be a God-fearing dinosaur).

With heaven and earth conspiring to deliver such a bounty to the Mexican people, one is tempted, perhaps beyond better judgment, to ask: What could possibly go wrong? Enter Pemex, the nation’s state-owned petroleum company. Again, it seems there is no privilege so vast as to render it beyond the destruction of the “people’s” government.

Pemex was “created” back in 1917 when, bowing, as politicians seem genetically preprogrammed to do, to public pressure, President Cárdenas embarked on the state-expropriation of all resources and facilities and, in the process, nationalized both United States and Anglo–Dutch companies operating within its borders. Despite international boycotts, Pemex led Mexico to become the world’s fifth largest oil-producing nation.

Now, Fellow Reckoner, what do you suppose a wide-eyed group of bureaucrats might do with a plump, oily egg-laying goose? Invest in exploration and development of nearby fields? Farm out some of the work to foreign companies with the necessary expertise and proven track records to bring the stuff to market? Look to secure the future of the voters who put them in office by shoring up the foundation of the nation’s largest tax paying company? Ha! Don’t make us laugh. Why, they sharpen the cleaver…and sit down to enjoy a one-time-only feast. And after the last feather is plucked and morsel consumed? Hey, this is politics! That’s a problem for the next bum to deal with.

Despite annual revenues in excess of $75 billion dollars, Pemex is only able to survive today through its immense borrowing. Pemex pays out over 60% of its revenues in taxes and royalties. Those receipts, in turn, account for around 40% of the federal government’s entire budget. As such, the state-owned dinosaur is now over $40 billion in the hole (so to speak) and, to make matters worse, is facing inexorable production decline in many of its fields, including that giant asteroid baby, Cantarell.

“Mexico’s oil industry is in crisis,” Byron King, the intrepid editor of Energy & Scarcity Investor, recently explained to his readers. “Indeed the grim numbers come from no less a source than the Mexican Energy Ministry. Production statistics make it clear that Mexico’s overall oil output is declining rapidly – with the word ‘crashing’ coming to mind as one views the chart [below].

Mexican Crude Oil Supply 2001-2009

“After decades of production,” continues Byron, “Cantarell is getting long in the tooth. Oil output is declining rapidly. Cantarell is depleting at an astonishing rate. Meanwhile, the yield from new Mexican oil fields is simply not making up the difference.”

Cantarell “peaked” around 2003…and only then after a massive nitrogen injection project to boost production. Since then, it’s been in steady decline, from a high of 2.9 million barrels per day to just 464,000 per day currently.

“Due to falling oil output, especially from offshore, Mexico will likely cease being an oil exporting nation by 2015,” concludes Byron. “This looming problem holds dire implications for the national balance sheet of Mexico, as well as – by implication – for US energy and national security.”

We can only hope the “next bum” has better ideas about how to maximize Mexico’s vast oil potential than all those preceding him. Judging by their track record, that shouldn’t take much. Then again, we are talking about politicians here.

Joel Bowman
for The Daily Reckoning

The Gross Mismanagement of Mexico’s Oil Industry originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
The Gross Mismanagement of Mexico’s Oil Industry




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Real Estate, Uncategorized

Join Corey at the eTradingExpo Chat Sessions Wednesday Dec 8

December 7th, 2010

I’m excited to announce that I’ll be participating in an eTradingExpo Chat Session from the MoneyShow (Las Vegas Traders Expo) on Wednesday, December 8th from 12:30 – 1:00 EST (11:30am – 12:00 CST) and wanted to invite you to the interactive session.

I’ll be doing a brief chat – introduction/explanation – on the Popped Stops Play – How to Profit when Good Trades Go Bad – and then opening up the remaining time for questions.

If you’re already a MoneyShow.com member (free), you can just sign-in via the links above or the direct link to the eMoney Show Chat Sessions on December 8th.

If not, you’ll just need to take a moment to register (again, free) at the MoneyShow, where you’ll be able to attend the chat and also view the archived webinars, interviews, and much more.

Many archived presentations from the Las Vegas Traders Expo, including my hour-session on Popped Stops, will be available for you on demand until January 2nd.

Beyond my chat at 12:30 EST, you’ll be able to attend the other sessions at your convenience as listed above:

Ken Calhoun’s “How to Enter the 5 Strongest Trade Set-ups

Mike Turner’s “The Trader’s Edge

Toni Turner’s “How Volume Signals Can Enhance Your Profits

Kerry Given’s “What Your Mother Didn’t Tell You About Iron Condors

and Leslie Jouflas’ “Learn How to Become  Successful as a Trader

These traders also have archived webinar sessions available for you to view.

Thank you as always to the folks at the MoneyShow for hosting these eTradingExpo interactive Chat Sessions and I hope to see you there!

Corey

Read more here:
Join Corey at the eTradingExpo Chat Sessions Wednesday Dec 8

Uncategorized

Join Corey at the eTradingExpo Chat Sessions Wednesday Dec 8

December 7th, 2010

I’m excited to announce that I’ll be participating in an eTradingExpo Chat Session from the MoneyShow (Las Vegas Traders Expo) on Wednesday, December 8th from 12:30 – 1:00 EST (11:30am – 12:00 CST) and wanted to invite you to the interactive session.

I’ll be doing a brief chat – introduction/explanation – on the Popped Stops Play – How to Profit when Good Trades Go Bad – and then opening up the remaining time for questions.

If you’re already a MoneyShow.com member (free), you can just sign-in via the links above or the direct link to the eMoney Show Chat Sessions on December 8th.

If not, you’ll just need to take a moment to register (again, free) at the MoneyShow, where you’ll be able to attend the chat and also view the archived webinars, interviews, and much more.

Many archived presentations from the Las Vegas Traders Expo, including my hour-session on Popped Stops, will be available for you on demand until January 2nd.

Beyond my chat at 12:30 EST, you’ll be able to attend the other sessions at your convenience as listed above:

Ken Calhoun’s “How to Enter the 5 Strongest Trade Set-ups

Mike Turner’s “The Trader’s Edge

Toni Turner’s “How Volume Signals Can Enhance Your Profits

Kerry Given’s “What Your Mother Didn’t Tell You About Iron Condors

and Leslie Jouflas’ “Learn How to Become  Successful as a Trader

These traders also have archived webinar sessions available for you to view.

Thank you as always to the folks at the MoneyShow for hosting these eTradingExpo interactive Chat Sessions and I hope to see you there!

Corey

Read more here:
Join Corey at the eTradingExpo Chat Sessions Wednesday Dec 8

Uncategorized

The US Federal Reserve: A Bank that Will Live in Infamy

December 7th, 2010

“A day that will live in infamy…” – Franklin D. Roosevelt

The Dow ended down 19 points yesterday. Gold up $9.

Thanks to the socialist Senator from Vermont, Bernie Sanders, we get to see what the Fed is up to. He insisted on learning where the Fed’s bailout money was going. Turns out, not only did billions go to European banks…billions more went to firms in the US that pretended they needed no help.

Goldman Sachs, for example.

Goldman went to the Fed 212 times between March 2008 and March 2009, according to Fed documents. It collected nearly $600 billion.

Morgan Stanley. GE. Citigroup. They were all in on it.

The Fed put out $3.3 trillion worth of credit, buying up speculators’ bad bets. Not surprisingly, the price of the bad credits rose. So that now the Fed can say it hasn’t lost a penny.

Ha. Ha. What a sense of humor!

Let’s imagine that instead of banking and speculating…Goldman was a cabbage grower. And let’s say Goldman overdid it. It planted far too much cabbage. The price dropped…and Goldman was on the verge of bankruptcy. So, in comes the Fed…and buys cabbage by the boatload. And what do you know? The price of cabbage goes up. So, the Fed then looks in its warehouse and it finds it owns tons of cabbage. It multiplies the price of cabbage by what it has in inventory. Wow! It hasn’t lost a penny!

The feds are supposed to pursue corrupt operators. But now the feds are at the center of the racket. Talk about infamy? Now, it’s right here at home…

How does the racket work? It’s very simple. The Fed hands out money to its powerful cronies. Remember, the Fed is a private bank. It serves what is supposedly a public purpose. But it is neither owned nor controlled by the government. Instead, it’s part of the banking industry. Its official role is to give the US a trustworthy currency…and (more recently) to promote full employment. You can see how well it fulfilled the fist part of its mission. Consumer prices are up about 33 times since the Fed was formed in 1913.

Or, to look at it another way, a $20 gold piece from pre-Fed days – a one-ounce US gold coin – is now worth about $1,450. How’s that for a stable currency?

As to employment… Before 1913, unemployment was virtually unheard of. Why? There was a free market in labor. If you need to work, you took whatever work you could get at the then-prevailing wage. End of the story. There were no subsidies for people who were unemployed. No minimum wages. No safety nets. It was just supply and demand. When demand for labor increased, so did wages. When it decreased, wages went down. Except for brief periods of adjustment, there was no unemployment.

And now? Well, you know the facts as well as we do.

The Fed’s real mission now is to make sure the banks stay in business and make a profit. This it does in the simplest way – by transferring money to the banks. How does it get the money? It just prints it up. Who pays the bill? Eventually, taxpayers and citizens…when this new money reduces the value of their old money.

Neat huh? Who complains? Who has a cause of action? Who even realizes what is going on?

The European Central Bank is duplicating this trick in the other part of the Old World. It is buying up the debt of Ireland and Greece. And what ho! The more you buy…the more the price goes up. Pretty soon, the ECB – with hundreds of billions of this paper in its vault – will be able to announce that it too has made money!

But there’s a strange smell coming from the central bank vaults. Maybe that cabbage isn’t so good after all.

Bill Bonner
for The Daily Reckoning

The US Federal Reserve: A Bank that Will Live in Infamy originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
The US Federal Reserve: A Bank that Will Live in Infamy




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

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