CASSANDRA'S HYPOTHESIS

Credit Default Swaps, Who Really Knows What They Are Worth? - Seeking Alpha

2012-02-17T09:31:00.000-05:00

A Credit Default Swap (CDS) is a derivative contract traded over the counter, designed to "transfer the credit exposure of fixed income products between parties." Essentially the buyer of a CDS pays a premium to the seller of the CDS, and if a credit event as defined by the ISDA (International Swaps and Derivatives Association) occurs, the Seller of the CDS pays the notional amount to the buyer of the CDS. CDS can be likened to insurance on fixed income products (bonds).

Best Stock Market Indicator Ever: New Update

2012-02-16T10:52:00.000-05:00

The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com that can be used to forecast conservative entry and exit points for the stock market.

Greece Is Broken, And Can't Be Fixed - Seeking Alpha

2012-02-16T09:51:00.000-05:00

As Mohamed El-Erian says, the broken dynamics surrounding Greece right now are extremely reminiscent of what was happening in Argentina in 2001. New money is necessary, but it’s also insufficient; it all feels like some kind of Samuel Beckett-style existential paradox. You must go on, I can’t go on, I’ll go on.

Are Investments In China Becoming Worthless? - Seeking Alpha

2012-02-16T09:43:00.000-05:00

Seeking Alpha contributor John Lindauer wrote a couple of articles about China that have us somewhat puzzled. The first one, titled 'Why Investments In China Will Eventually Be Worthless,' seems an inquiry into different effects of Chinese currency movements (at least for most of the article). According to Landauer, the most important question is:

Is it safe to rely heavily on Chinese imports and make Chinese-related investments?

Before You Buy Silver, Remember Grover Cleveland - Seeking Alpha

2012-02-15T09:52:00.000-05:00

Before I say some negative things about silver (SLV), let me first say that now is likely a great buying opportunity. In addition to the main theme that has been driving silver for the past 11 years -- a global sovereign debt crisis leading to demand for precious metals as monetary assets, as well as increasing industrial demand for silver and declining silver reserves that are easily extracted in the earth's crust -- are the short-term technical factors.

oftwominds-Charles Hugh Smith: When Greece Defaults, the Credit Default Swap Dominoes Fall

2012-02-14T11:14:00.000-05:00

When Greece Defaults, the Credit Default Swap Dominoes Fall...A default by any other name is still a default. When Greece defaults, the inter-connected chains of credit default swaps will fall like dominoes.

12 High Dividend Energy Stocks With Low Beta - Seeking Alpha

2012-02-14T09:40:00.001-05:00

Below we compiled a list of high dividend energy stocks with low beta. All companies have at least $5 billion market cap, dividend yield of at least 4%, and beta lower than 1. The market data is sourced from Finviz and the sector classification is obtained from Fidelity. We are long-tem bullish about energy prices and we believe the U.S. dollar will lose value in real terms. We also agree with Warren Buffett that Treasury bonds aren't good investments at the moment. We believe one of the best alternatives for conservative income investors is energy storage and transportation stocks. Most of these stocks yield more than 5%.

It Is Safe to Resume Ignoring the Prophets of Doom ... Right? - NYTimes.com

2012-02-13T00:28:00.000-05:00

I remember the first time I interviewed a relatively unknown economist named Nouriel Roubini. It was 2005, and as we sat in his New York University office, he laid out his scary vision of the future. Roubini is a specialist in the flow of money around the world and the crises that (sometimes) result. But on that day he wanted to talk about the U.S. housing market.

Greeks Pessimistic in Anti-Austerity Protests - NYTimes.com

2012-02-12T21:07:00.000-05:00

After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early on Monday to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.

The Student Loan Debt Bomb

2012-02-12T10:50:00.000-05:00

What with the word "next"? Also what's with the words "could be"? Without a doubt student loans are in a bubble and have been for many years. The source of the problem, as it always is with financial bubbles, is cheap money, loans to nearly anyone, and in the case of student loans, no way to discharge the debt, even in bankruptcy.

Canadian financial fraudsters prefer foreign exchanges: RCMP

2012-02-10T12:03:00.000-05:00

Canadian investors suffer more from market fraud that occurs on other nations' stock exchanges than in Canadian ones. These were the findings of Project Stockholder, a June 2011 internal report by the RCMP criminal intelligence branch that was obtained by the Financial Post under the Access to Information Act, although some sections were withheld for security reasons. It is the first and only intelligence overview of capital market fraud in Canada since the RCMP Integrated Market Enforcement Team, or IMET, was created in 2003.

Jobs Outlook 2012: Careers Headed For The Dustbin - Forbes

2012-02-10T09:55:00.000-05:00

After years of bad news, recent U.S. job reports suggest market stabilization. Employment rose by 243,000 in January, and the unemployment rate decreased by 0.2% to 8.3%. “We are seeing several signs that the economy is on a better track,” says Gautam Godhwani, chief executive of SimplyHired.com, a job search engine with 17 million monthly users. “The recovery has momentum.”

Mortgage Settlement Is Just Another Stealth Bank Bailout

2012-02-10T09:51:00.000-05:00

The 50-state settlement with the banks (Oklahoma didn’t sign, but supports letting the banks go scot-free) over mortgage fraud is a stealth bank bailout, according to many top observers. See this, this, this, this, this, this, this and this. This is par for the course … All of Obama’s previous “mortgage relief” programs have really been stealth bank bailouts which screwed the homeowner. And see this.

The Gabelli Equity CEFs: Leveraged Funds For A Bull Market - Seeking Alpha

2012-02-10T09:09:00.000-05:00

When it comes to Closed-End funds (CEFs), having a well-known and trusted name as a fund sponsor can have a big impact on a fund's market price and can mean the difference between a fund trading at a premium to the fund's Net Asset Value (NAV) or trading at a discount. Though I don't necessarily like this valuation metric because it tends to be more emotionally driven and often overrides more important valuation measures such as NAV performance, still one has to be aware that in the world of CEFs, a fund sponsor name can make a big difference.

The Case Against Long-Term Treasuries - Seeking Alpha

2012-02-09T08:35:00.000-05:00

Just last week, the yield on 10-year Treasury notes slid in response to the Federal Reserve’s announcement that interest rates would remain low through 2014, and yields dropped further early this week on concerns about Europe.

Greece: Default/Agreement Scenarios For The Market - Seeking Alpha

2012-02-08T10:55:00.001-05:00

I have no strong opinion on which way the Greek tragedy will play out. I am however prepared for the potential outcomes for both scenarios. I would suggest that all investors have strategies prepared (in advance) as this drama unfolds. One other related point regarding CDS. Please read this article on the makeup of the CDS spread committee and the risks involved - fascinating. The banks that issue the CDS are on the committee to decide if the CDS are to be triggered! Figure that one out.

5 High Yielding Energy Preferred Stocks - Seeking Alpha

2012-02-08T04:33:00.000-05:00

Europe may be getting its act together to impose austerity, but there are no concrete proposals to promote growth. After all, eurozone unemployment stands at 10.4%, in Spain, it is 22.9%, and in Greece, it is 19.2%. Additionally, the US personal saving rate in December climbed to 4.0% from 3.5% in November, signaling a risk-averse mood by American consumers. The US Q4 GDP report was disappointing as well, with growth in inventories leading the way, instead of showing some other organic form of growth. As such, consumer sentiment fell unexpectedly to 61.1 in January, according to the Conference Board. You may want to build a nuclear fallout shelter, but good dividend yields may help your portfolio survive in the future.

High Yielding Stocks Boosting Distributions - Seeking Alpha

2012-02-07T08:53:00.000-05:00

Utilities, Pipeline Master Limited Partnerships and Real Estate Investment trusts typically distribute a large portion of their earnings and cash flows to their shareholders. As a result, most of them typically enjoy high dividend yields in comparison to the broader market. The main disadvantage is that dividend increases are not as high as those for other traditional dividend growth stocks such as PepsiCo (PEP) or Coca Cola (KO). Given the low interest rate environment over the past two years however, many investors have started chasing the high distributions from these sectors, which has lead to increases in stock prices and decrease in dividend yields to historic lows. This has led some market analysts to proclaim that we might be approaching a dividend bubble. In a previous article I noted that we are far from a dividend bubble at this point. Any further increase in popularity for high yielding stocks such as Utilities, Master Limited Partnerships and Real Estate Investment Trusts however could bring us closer to this point for these sectors, and would make other dividend growth sectors more appealing

7 High Dividend Yield Stocks Undervalued By The Graham Number - Seeking Alpha

2012-02-06T11:04:00.001-05:00

Evaluating dividend stocks by dividend yield can be tricky - since dividend yield is dividend/share price, the dividend yield can rise without any increase in dividend. This gives rise to the term "value trap."

For ideas on how to avoid value traps, we ran a screen on high dividend yield stocks for those that have traded higher over the last quarter. However, we also wanted to search for those that could still be undervalued, by looking for those trading at steep discounts to their Graham Number.

Canadian Housing Market Collapse: Part II

2012-02-06T09:29:00.000-05:00

As mentioned Part-1, Canadians like to think they are 'different' than their southern neighbors. That is certainly true in some respects, but not in the accumulation of debt. Canadian households debt to disposable income versus that in the USA is shown in the below chart, however Canadians went quite a bit further in debt! Well at least that's different, right?

Beware Of Europe's Ticking Demographic Time Bomb - Seeking Alpha

2012-02-06T09:22:00.001-05:00

These days everybody talks about Europe's debt problem and how southern Europe is destroying the economy and the prospects of rest of Europe. In the short term, it is true that countries in the South will have to face painful realities surrounding their economies, however in the long term, all of Europe will suffer from a chronic disease that's been in the continent for a few decades now. This disease is called "demographic time bomb" and when it strikes, it will leave no prisoners behind. Not even countries with relatively healthier economies such as Finland, Germany and Netherlands are immune to it.

Top 5 Foreign Dividend Stocks For 2012 - Seeking Alpha

2012-02-04T10:58:00.001-05:00

Looking for the best stocks to buy for dividends in 2012? We're following up last week's article, Top 5 U.S. dividend stocks for 2012, with the top five foreign dividend stocks for 2012 - those most likely to make the biggest total cash payouts in 2012. This group includes two oil majors, a mobile phone firm, a bank and a major commodities producer, two of which are listed in our High Dividend Stocks By Sectors Tables:

Cities Where Home Prices Are Falling Dangerously - Morgan Brennan - Forbes

2012-02-04T10:17:00.000-05:00

The folks at Local Market Monitor compiled a list of the 13 cities that suffered relatively big home price hits this year with more projected through the next 12 months. LMM sifted through market data for more than 300 Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions (MSADs), as defined by the U.S. Office of Management and Budget. The company crunched home prices from October 2010 through September 2011 and calculated price projections through September of next year, taking into account job growth, population growth, sales and rental prices.

America's Most Overpriced Cities - Forbes Galleries

2012-02-04T10:10:00.000-05:00

Overall, Los Angeles took the top spot on our list this year (eight other California cities were also on the ranking). In LA and Santa Ana (#15) only 43% to 45% of residents can afford to own homes and daily livings costs closely trail New York’s in terms of priceyness. Up north, three Silicon Valley cities make our list: San Jose at No. 8, Oakland at No. 14, and San Francisco at No. 19.

“Coastal state cities are high-amenity cities and people are willing to pay more for those amenities,” explains Robert Helsley, a professor at the University of California, Berkeley’s Haas School of Business, specializing in real estate development and urban economics.

Providence, R.I., Mayor Proposes Cuts to Avert Bankruptcy - NYTimes.com

2012-02-03T09:25:00.000-05:00

The mayor of Providence, R.I., on Thursday laid out a series of steps he said were crucial to shoring up the city’s finances. He warned that it would otherwise run out of money in June.

14 Strong Dividend Stocks With Low Debt, Low P/E Ratios - Seeking Alpha

2012-02-03T06:37:00.000-05:00

During the past few years, the financial markets have been hit by one crisis after another. For example, the market was crashed by the European debt crisis over the past summer. But these issues will not last forever. Stocks are priced at attractive multiples based on current and forward earnings. Since the end of the third quarter last year, the S&P 500 index was up nearly 18%. Conservative investors who are investing in long-term Treasuries probably won't be able to beat the inflation. On the other hand dividend stock investors will potentially enjoy much higher yields and capital gains. That's why we have been consistently recommending dividend stocks as an alternative to long-term Treasuries.

12 High Dividend Technology Stocks - Seeking Alpha

2012-02-02T06:34:00.000-05:00

We are very concerned about the Fed's recent announcement to keep policy rates extremely low for three more years. Ben Bernanke is trying to inflate the economy by punishing conservative investors who generally invest in low-risk fixed income securities. We believe long-term Treasuries are in bubble territory because of Fed's actions. We think it's not prudent to invest in long-term Treasuries anymore. We recommend that investors consider high dividend stocks that might also offer some upside through capital gains. Below we compiled a list of top 12 high dividend US technology stocks. All companies have a market cap of over $2 billion and a dividend yield of at least 3%. The market data is sourced from Finviz.

10 Gas Utility Stocks That Offer Good Dividend Yield - Seeking Alpha

2012-02-01T06:32:00.001-05:00

Natural gas prices are changing rapidly due to changes in supply and demand. Since the end of 2008, there has been a significant decline in natural gas prices because of the economic crisis and a decline in natural gas consumption overall. In the near future, economic growth in the world could drive up natural gas demand and prices. Projections show that industrial natural gas demand will increase from 7.3 trillion cubic feet in 2009 to 9.4 trillion cubic feet in 2020. Here we prepared a list of ten gas utility companies which pay fat dividends regularly. All of the companies in this list have dividend yields of more than 3%, and market-caps of more than $2 billion. These ten stocks averaged a return of 11% (including dividends) in 2011, beating government bonds and the S&P 500.

Building A Capital Preservation And Income Portfolio, Part 4 - Seeking Alpha

2012-01-31T09:04:00.001-05:00

In Part 3 of this series I provided my thoughts about using precious metals and/or commodity-based equities for hedging purposes, as well as the next four defensive, equity-income offerings of the series. In Part 2 of this series I provided a brief summary of Part I, my thoughts on diversifying into investments denominated in other than the US dollar, and four defensive, equity-income offerings. Part 1 included an overview of what I intended to accomplish with this series, why I decided to write these articles now, and the first four equity-income offerings. In this final article of the series I intend to provide the last four equity-income offerings combined with a summary to tie, as necessary, any loose strings remaining from the first three articles.

The Real McCoy?

2012-01-31T08:59:00.000-05:00

Everyone is up in arms because, as I pen this column, gold has rallied above $1,700 … silver has jumped as high as $33.79 … and the broader stock markets have risen to the top of the resistance ceiling I’ve previously cited at the Dow Industrials 12,800 level. So my readers are now piling on the wagon about my recent bearish calls on the above markets … that they were about as dead-wrong as can be … and they’re dumping on me like crazy … claiming that I’m just one of those stopped clocks that’s right only twice a day. Admittedly, my recent short-term forecasts have indeed been well off the mark. But that doesn’t bother me because I have complete confidence in my signals and my analysis.

9 Reasons Why Dividends Always Matter, 11 Stocks That Prove It - Seeking Alpha

2012-01-31T08:56:00.001-05:00

In much the same same way many "experts" are now recommending dividend stocks based on this investing makeup. Some are recommending dividend stocks as part of their sector rotation, or as the next hot fad, - stay tuned and they will tell you when to jump out. Others are recommending dividend stocks as substitutes for bonds since yields on fixed income investments have all but dried up. Both arrived at what I consider to be the correct conclusion, but do they really understand why dividends matter? Below are nine reasons why dividends matter in all markets:

The Great Repression: The Impending Economic Collapse of 2012-2022

2012-01-31T01:13:00.000-05:00

In Part 1 of this series, Is This The Best Stock Market Indicator Ever?, I examined the technical indicator known as $OEXA200R, that is, the percentage of S&P 100 stocks above their 200 day moving average, found on StockCharts.com. The $OEXA200R can be thought of as a valuable early yellow light flashing 'bears ahead' or a confirmatory green light that we're really back in a bull market after a bear. It is an extremely accurate market timing and short term predictive tool for any investor.

But what of the long term trends in the market? What does the future hold over the next 2 or 5 or 20 years? Is there a predictive tool for that?

What A Ron Paul Presidency Could Mean For Defense Stocks - Seeking Alpha

2012-01-30T10:01:00.000-05:00

The two defense contractors I would expect to be most negatively affected by a Paul administration are Raytheon and L-3 Communications. Both companies derive a high percentage of their revenue from defense spending and products or services, which do not align with Paul's libertarian politics.

I Know Who You Are and I Saw What You Did - Social Networks and the Death of Privacy - By Lori Andrews - Book Review - NYTimes.com

2012-01-29T19:03:00.000-05:00

It may surprise anyone under 16, but even before the advent of social networking we faced threats to our privacy. A hospital accidentally releasing patient records or a shady marketing firm engaging in Stasi-like data collection — such violations were substantial enough and disturbing enough to make the evening news. Today, however, the “death of privacy” is more like death by a thousand cuts: information leaks out slowly and invisibly, and so routinely that we’re hardly shocked when it does. Internet companies, which use the word “sharing” almost as a euphemism for “oops,” like to pretend these lapses are normal, even natural. If Mark Zuckerberg’s private photos are up for grabs (as when a recent glitch exposed his Facebook account), what can the rest of us expect?

5 High Yield Stocks From The S&P 500 With Lowest Debt To Equity Ratio - Seeking Alpha

2012-01-27T00:51:00.002-05:00

Many investors own stocks from the Dow Jones and the S&P 500. Both indices include 500 leading companies in leading industries of the U.S. economy, capturing 75 percent coverage of U.S. equities. 19 companies from the S&P 500 have yields above 5 percent (high yield). At the first view, they give you an attractive income if the payments are sustained. Some major criteria for persistent dividends are the business cyclic, the payout ratio and the debt situation. Remember, a highly leveraged company with big payout ratio hides a huge risk for a dividend cut.

In order to avoid some negative surprises in terms of dividend cuts, I screened the S&P 500 Index by stocks with a dividend yield of more than 5 percent as well as a debt to equity ratio of less than one. The debt ratio shows that the company has more equity than debt and is solid financed. There are only five stocks that fulfilled my mentioned criteria. These are the detailed results sorted by yield:

Searching for the Bottom in Home Prices - Blogs at Chris Martenson

2012-01-26T06:09:00.000-05:00

In my December 2011 look at housing, I examined systemic factors such as employment and demographics that represent ongoing structural impediments to the much-awaited recovery in housing valuations and sales. This time around, we're going to consider policy factors that influence the housing market.

Yesterday while standing in line at our credit union I overheard another customer at a teller’s window request that her $100,000 Certificate of Deposit (CD) be withdrawn and placed in her checking account because, she said, “I’m not earning anything.” The woman was middle-aged and dressed for work in a professional white- collar environment -- a typical member, perhaps, of the vanishing middle class.

Sadly, she is doing exactly what Ben Bernanke’s Federal Reserve policies are intended to push people into doing: abandoning capital accumulation (savings) in favor of consumption or trying for a higher yield in risk assets such as stocks and real estate.

THE MESSENGER OF CHANGING TIMES… | PRAGMATIC CAPITALISM

2012-01-25T10:17:00.001-05:00

While fundamentalists scour the news for indications of bullish news, the internals of the stock market continue to deteriorate. Even the action of the stock market is bearish as the market rallies on dull volume but declines on higher volume. Furthermore, rising breadth is narrow on rallies while declining breadth is broad when the market heads down.

5 Undervalued Gold Stocks On A Discounted Cash Flow Basis - Seeking Alpha

2012-01-25T09:57:00.001-05:00

Gold. The very word conjures up images of opulence and feelings of comfort and joy. Why is gold such an attractive investment? Because of its short supply. The entire quantity of gold in the Universe can fit into a fairly large field. And the fact that it never tarnishes or depreciates in value: it is solid and inorganic. In this article, I analyze some of my best ideas in the gold mining industry. I provide my fair value estimate based on a discount cash flow analysis, assuming a $1600 per troy ounce gold price and a 10% cost of equity.

Shilling says new global recession is here - Howard Gold's No-Nonsense Investing - MarketWatch

2012-01-24T12:38:00.000-05:00

Unlike many gloom and doomsters, Shilling is a genial sort who likes cracking jokes and keeps bees as a hobby. But when it comes to economics he’s dead serious: He’s been consistently gloomier than the economic fraternity and consistently right over the past few years.

18 S&P 500 Dividend Stocks Undervalued By Graham - Seeking Alpha

2012-01-24T06:46:00.001-05:00

Looking for stocks trading at attractive prices? Here are some ideas to get you started on your search.

We ran a screen on the S&P 500 for stocks paying dividends above 1% and sustainable payout ratios below 50%. We then screened these stocks for those that appear undervalued relative to the Graham Number.

This number was created by the "godfather of value investing" Benjamin Graham, and calculates a stock's maximum fair value based off of its EPS and book value per share (BVPS). Stocks trading below their Graham Number may be undervalued.

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

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On the Edge with Gonzalo Lira - Max Keiser

2012-01-23T01:27:00.000-05:00

Very interesting Max Keiser interview with Gonzalo Lira.

10 Foreign Dividend Stocks With A History Of Consistent Payouts - Seeking Alpha

2012-01-22T06:43:00.001-05:00

Dividend yield should be one of the most important factors when selecting a stock for investment. Dividend payments come out of a company’s earnings and are usually a strong barometer of a firm’s financial health. Unlike other metrics, cash dividends are not susceptible to accounting or other manipulations. Hence consistent dividend payers and growers are excellent options for investors seeking both growth and income. It is widely known that over the long-term, dividend returns account for a major portion of the total returns of the S&P 500.

11 High-Dividend Stocks That Can Afford To Double Dividend Payments - Seeking Alpha

2012-01-21T10:51:00.002-05:00

High-dividend stocks are very popular among defensive investors. These stocks are considered as viable options especially in inflationary environments. In order to achieve sustainable returns, defensive investors also select companies that are able to consistently pay fat dividends. We are concerned that the Fed's inflationary monetary policy will lead to inflation in the near future, and therefore we recommend investors play defensively by purchasing high-quality dividend stocks.

3 Winning Silver Stocks To Buy, 2 To Avoid - Seeking Alpha

2012-01-21T09:36:00.001-05:00

Silver might not be as precious as gold, but it is also in limited supply so demand remains quite good, and so does respect for this metal. Whereas gold is popular for its investment value, silver has industrial use which could make it an investment as strong as gold. Here are some companies to consider for post-holiday exposure to silver miners.

5 High-Yield Investments For Retirees - Seeking Alpha

2012-01-20T10:11:00.001-05:00

Considering the importance of high dividend yields these days, I have filtered my five best stock picks with high dividend yields, strong industry positioning and a future outlook that will allow them to keep paying the dividends on a consistent basis. It's the sustainability of the dividend payments that should be given focus when choosing dividend stocks in one's portfolio. Investors should use this analysis as a starting point in their own research.

Nigel Farage - UKIP - President ! Schulz - 17th Jan 2012 - YouTube

2012-01-20T09:31:00.000-05:00

Well good morning Mr Schulz, President Schulz. I know it is my job to congratulate you but given that we knew the result two and a half years ago as a result of a stitch-up there does not seem to be much point, after all, no one in Europe, or modern day Europe would dream of having a big powerful job that was decided by a full open process, I am sure Mr Barroso would agree.

Canada: One Of The Few Unthreatened AAA Credit Ratings - Seeking Alpha

2012-01-19T08:53:00.000-05:00

The way analysts at Citigroup see things, Canada could be one of the few countries left with a triple-A credit rating over the next few years, with ratings agencies likely not done with their downgrades after taking a wide swipe at Europe last week.

7 Great Diversified CEFs For The Income Investor - Seeking Alpha

2012-01-19T05:56:00.001-05:00

Closed end funds (CEFs) are some of the most unique and misunderstood investment vehicles in the markets. Built within these funds are characteristics that make them difficult to understand, yet advantageous enough to be classified as an outstanding assets within an income portfolio. For 2011 investors had to suffer through a tumultuous year with many ups and downs in the market. The volatility of these markets also took their toll on the CEF world. Income investors held tight as the markets swooned and rebounded time and time again. In the end there were a number of great CEFs that not only held their ground, but also made money in the process for those willing to hold them through 2011. Listed below are some the best funds for 2011 that income investors should closely examine to see if they might be right for one’s portfolio as we move into 2012.

Few Cities Have Regained Lost Jobs, Report Finds - NYTimes.com

2012-01-18T09:15:00.000-05:00

Less than a tenth of the nation’s metropolitan areas have regained the jobs they lost in the economic downturn, according to a report being released Wednesday by the nation’s mayors as they gather in Washington to express their exasperation that the federal government seems more intent on cutting aid to cities than on sending more.

Defining Value In High-Yield Dividend Stocks - Seeking Alpha

2012-01-18T09:11:00.000-05:00

What is the best valuation metric used to identify stocks trading at a discount to intrinsic value? The most popular metric is the price to earnings (P/E) ratio. Others may argue that price to book or price to cash flow is the best valuation metric. The proven answer is the enterprise value to EBITDA (EV/EBITDA) metric. Enterprise value is the price plus debt while EBITDA is the earnings before interest, taxes, depreciation and amortization. Recent research has found the EV/EBITDA to be the most effective method to getting better returns.

6 Solid Swiss Stocks For Total Returns - Seeking Alpha

2012-01-16T01:56:00.001-05:00

In this article, I discuss a few stocks from Switzerland that are listed on U.S. stock exchanges. I am deeply intrigued by the resilience of the Swiss economy and the use of Swiss Franc as a reserve currency (along with US Dollar, Euro, British Pound and Japanese Yen). Recently, in September 2011, the Swiss Central Bank decided to peg the Swiss Franc to the Euro whereby the Swiss National Bank will not allow the Franc to get worth more than €0.83 (which is CHF 1.20 to the Euro). I estimate that this forced weakening of the Swiss Franc will benefit export-oriented Swiss companies boosting their profits in the coming year(s).

2012 Investment Themes by Gary Shilling

2012-01-13T10:30:00.000-05:00

As my good friend Gary Shilling says, in leading off his piece on 2012 investment themes, which is this week’s OTB, “This year is just the first step in the long-run journey that will continue to be dominated by The Age of Deleveraging” – which also just happens to be the title of Gary’s latest book. Whether you call it that or call it the End Game, as I have, it shapes up as a profoundly different and challenging era for all of us. Gary identifies 9 causes of slow global growth in the years ahead:

7 Dividend Ideas For A Volatile 2012 - Seeking Alpha

2012-01-11T10:58:00.001-05:00

The continuing global sovereign debt crisis and the weakening U.S. economy are likely to result in a highly volatile and uncertain equity market in 2012. Investors should focus on large capitalization equities with strong global brands and wide economic moats. Investors should be highly focused on capital preservation in 2012. Due to the significant risk surrounding the global economy, U.S. equity prices are vulnerable to large pullbacks in 2012.

Gold And Gold Equities In 2012 - Seeking Alpha

2012-01-10T05:56:00.001-05:00

I was reading a Merrill Lynch report about gold and gold stocks. An interesting view with a lot graphics and tables.

Complete Cheatsheet For What To Buy Ahead Of QE3 | ZeroHedge

2012-01-09T10:48:00.001-05:00

Fed and/or ECB intervention is coming: whether it is called LSAP, QE x, Nominal GDP targetting, selling Treasury puts, or what have you. A regime that now exists only by central planning intervention, by definition requires ever more central planning intervention to sustain itself, let alone grow further. Furthermore, the banks not only want QE, they need QE. And since central banks serve other banks, not the people it is only a matter of time. Don't believe us? Read anything written by Bill Gross in the past year. So what to do ahead of QE3? Luckily, SocGen has released a complete cheat sheet of not only the dates of the next steps, but what to buy and what to sell ahead of the announcement. In short - one should buy Mortgage Backed Securities, in order to "simply buy MBS before the Fed" - something Bill Gross knows too well and has been hoarding MBS relentlessly as a result, as reported here. More importantly - one should buy gold. Lots of it as "USD debasement restarts."

Recession Takes Toll in Lorain, Ohio - NYTimes.com

2012-01-08T09:20:00.000-05:00

The dark, empty storefronts that clog the heart of this aging industrial city stare blankly at the street, their fading signs mute reminders of better and busier times.

10 Predictions For 2012 From BlackRock's Bob Doll - Seeking Alpha

2012-01-07T09:49:00.001-05:00

Bob Doll, chief investment officer at the world's biggest money manager-- BlackRock ($3.6 trillion in assets), who has produced an annual prediction for over a decade, just published his 10 predictions for 2012:

How Today's 'Deflation' Can Turn Into Tomorrow's Hyperinflation - Seeking Alpha

2012-01-06T10:09:00.000-05:00

Since the 2008 Credit Crisis, deflation has been the primary worry of mainstream economists and monetary and fiscal policies that utilize various forms of “money printing” have been implemented throughout the world to try to stop it. Unfortunately, money printing combined with deflation can potentially lead to hyperinflation.

Hyperinflation is a little understood and little studied phenomenon. Even inflation itself is only partially understood and traditional university economic programs devote minimal attention to it (just ask someone with an economics degree what courses they took in inflation). Almost no one seems to have made the connection between deflation and hyperinflation, which are intimately related. Hyperinflation in fact could actually be defined as a self-feeding cycle of severe deflation combined with escalating money printing.

Hungary Marches Down Hyperinflation Path; What About the US?

2012-01-05T23:48:00.000-05:00

As I watch political events in Hungary, I cannot help but think Hungary is on a path towards hyperinflation. Please consider Der Spiegel report 'Democracy Is Being Trampled On in Hungary' and see if you agree.

What Mitt Might Mean For Stocks - Seeking Alpha

2012-01-05T05:25:00.000-05:00

At this point, it appears likely that Mitt Romney will win the Republican nomination for President (his recent win in Iowa will go a ways towards sealing the deal) and quite possible that he will be elected president of the United States. So what will this self-described "conservative businessman" be able to do for the sputtering American economy, and (more importantly from an investing standpoint) what impact can he have on domestic stocks? To find out, I delved into his jobs plan (compiled with help from star economists Glen Hubbard and Greg Mankiw), paying attention to how the proposed policies will impact equity markets in the U.S. Here is what I found:

30 Statistics That Show That The Middle Class Is Dying Right In Front Of Our Eyes As We Enter 2012

2012-01-04T10:54:00.000-05:00

Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing. The statistics that you are about to read prove beyond a reasonable doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012. The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades. Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families.

Gonzalo Lira: A Run On The Global Banking System—How Close Are We?

2012-01-04T10:45:00.000-05:00

My own sense is, this is the first tremor of the earthquake that’s coming to the global financial system. And how the central banks and financial regulators treated the “Systemically Important Financial Institutions” that had exposure to MF Global—to the detriment of the ordinary, blameless customer who got royally ripped off in its bankruptcy—is both the template of how the next financial crisis will be handled, and an accelerator that will make the next crisis happen that much sooner.

5 High Yield Dividend Picks From A Famed Contrarian - Seeking Alpha

2012-01-03T10:03:00.001-05:00

Hedge fund manager David Dreman has spent his long career finding hidden gems in beaten up stocks. The contrarian investor looks for stocks that are in the bottom 20% of the market. He analyzes them based on value, with his favorite metrics being earnings yield, dividend yield and forward P/E., in order to find stocks that have been unfairly punished by the market.

The results have been impressive. Since its inception in 2003, his fund has more than doubled the S&P500 (6.3% vs 2.8% annualized). For those of you with nerves of steel, here are five dividend picks from David Dreman:

4 Easy Ways to Play ‘The Great Chinese Migration’

2012-01-03T09:39:00.002-05:00

Today we’re witnessing one of the greatest human migrations in the history of the world, and not many people in the West even know about it. It’s the tidal wave of poor Chinese peasants moving from the interior of the country to the large, affluent coastal cities, such as Shanghai and Shenzhen.

In 2000, just 36% of China’s 1.3 billion people lived in cities. But in the past decade, that number has exploded. Today, roughly half of the population — 650 million people — lives in the urban centers. And there’s no sign of that trend slowing down.

Five Businesses That Did Not Survive 2011 - NYTimes.com

2012-01-02T11:01:00.000-05:00

It has been another tough year for many small businesses. One in four, according to the National Federation of Independent Business, believes the biggest problem is weak sales. No matter what other challenges they face, said William Dunkelberg, the federation’s chief economist, “the key to everything is cash coming in the front door.”

Buy.....Buy.......Bankrupt!!!!!

2012-01-01T11:21:00.000-05:00

The lack of foresight and insight by the pros that run Wall Street is just stunning. And it’s not only happening to individual stocks, this type of mentality permeates the stock market. Of course, that bias helps keep the stock market up in the face of big problems, but long term, it also means that when the mentality changes, it will change fast. Does that mean it will change this year? Unlikely. That strong bias plus some help from the Fed should be enough to keep the market from having huge problems this year. In fact, the right tonic of stock market bias and printed money could push this market way past a 10% increase. But, it won’t last. Will it last to the end of the year? Possibly. There’s lots of psychology driving this market. So, the tradition keepers on Wall Street could be right. But, as in the past, and even more in the future, it will go back down and when it does, it could go quite quickly. If you’re not sure, just remember one of the increasingly popular traditions on Wall Street: BUY, BUY, BANKRUPT!

3 Arguments For An Inevitable Economic Collapse - Seeking Alpha

2011-12-31T20:25:00.000-05:00

An informal survey a year ago of Seeking Alpha writers seems to indicate that not 1 in 500 writers thought a 1929 type economic collapse to be likely in our near future. Even today, it appears not 1 in 30 thinks this is likely. Yet there are powerful arguments on why this is probable. Three prominent writers have published books that make these arguments, and I believe any reader of Seeking Alpha would greatly benefit from reading these books. A brief synopsis below of the contents provides you a feel for the validity of these books. Links point to the Amazon readers’ reviews of these three books, revealing what many other people think about them.

The Ideal Dividend Portfolio In 3 Investments - Seeking Alpha

2011-12-31T10:51:00.001-05:00

Investors relying on dividend income need to count on the reliability of consistent payments in a timely fashion. They want to stay relatively diversified, sheltered from the volatile flows of the market’s day-to-day. Last of all, they also want to maximize their profits, thereby needing an above-average yield.

Negating the share price appreciation due to its inconsistency, controlling the yield return is the most practical aspect of choosing an income portfolio in which to invest. The typical dividend fund, whether it be an ETF or a mutual fund, offers investors somewhere between 2%-4%. As is the case with most funds, the typical fund has a management fee of about 0.5%-1%, which essentially is taken off the yield on an annual basis.

10 Dividend Stocks Retirees Should Buy In 2012 - Seeking Alpha

2011-12-31T08:12:00.000-05:00

Our central belief is that in a low interest-rate world, retirees are experiencing dwindling incomes from their risk-free assets (e.g. government bonds and cash equivalents). With ultra easy monetary policy the Federal Reserve will continue to pick the pockets of savers by keeping rates low with inflation (as measured by the CPI) at above 3%. We do not foresee interest rates at the short end of the curve rising any time soon. The debt burdens of sovereign governments as well as consumers are simply too high.

Ten Predictions for Next Year — Rick's Picks

2011-12-30T10:09:00.000-05:00

As promised, here are my predictions for 2012. So many things could go horribly wrong that it’s probably best that we simply try to live our lives to the fullest and not worry too much about the headlines. Before I start listing away then, let me wish you all a happy New Year. Whatever the news brings in 2012, may you and yours enjoy good health, happiness and inner peace.

Are Storm Clouds Gathering For These 7 High-Yielding Dividend Stocks? - Seeking Alpha

2011-12-30T09:56:00.001-05:00

Everyone wants to earn more. For investors in dividend growth stocks, the quick way to earn more is to select dividend stocks with higher yields. Swap those 2-4% yields in for stocks earning 7-10%, or more. Before making the trade, you should ask yourself the following two questions:

1. Why is the yield higher?

and

2. Are these higher yields sustainable?

Sino-Forest's fall heard - Winnipeg Free Press

2011-12-28T20:28:00.000-05:00

Carson Block's investigation into alleged fraud at Sino-Forest, one of Canada's most valuable forestry companies, began with a simple tip. Little did he know it would ignite a powder keg that sent ripples of shock through the investing landscape and sparked a newfound skepticism about companies that list their shares in Canada but operate in faraway emerging economies. While Canadian companies eye lucrative Chinese markets to export everything from coal and potash to lumber, wheat and oil and gas, major Chinese players have sunk billions of dollars into Canadian resources in the last year. Yet Block's research has tarnished the reputation of some Chinese firms and raised a red flag for Canadian investors.

8 High Dividend Stock Picks From Billionaire Ray Dalio - Seeking Alpha

2011-12-28T09:03:00.001-05:00

Bridgewater Associates is one of the largest and best-performing hedge funds today. Back in 1975, when the fund was founded by Ray Dalio, its office was just a two-bedroom apartment. Now it manages more than $100 billion in global investments and has nearly 1200 employees researching the market and trading in various markets and geographies. Last year, Bridgewater returned 44.8%. It generated a return of 25.3% through the end of August this year despite the financial turmoil in the markets.

ETF Showdown: Which MLP Is Master Of The Universe? | Etfs | Minyanville.com

2011-12-27T18:09:00.002-05:00

In case you didn't already know, master limited partnerships (or MLPs) have been simply en fuego as an asset class in recent years. And what's not to like? Stellar performance, robust yields, and tax advantages make it impossible to ignore MLPs.

7 High-Yield Stocks For A Resource-Scarce World - Seeking Alpha

2011-12-27T09:01:00.000-05:00

If one of my resource investments manages to maintain or increase reserves over time I'd be ecstatic, and some will. However, I don't want to buy a resource company with a dependence on infinite reserves growth and an unknown return of capital.

The following screen identifies resource stocks with the potential to pay high dividends to investors for a long time. The first step identifies resource stocks with a market capitalization over $10 billion, dividend yield over 4% and p/e ratio under 15. Here is a selection of 7 stocks that I came up with:

7 Dividend Champs With Yields As High As 18%, Part III - Seeking Alpha

2011-12-26T10:18:00.000-05:00

This is part III of the dividend champ series. In part II we looked at seven stocks with yield as high as 23%. Extreme volatility is propelling more and more investors into dividend yielding investments in contrast to speculative investments.

Our favourite play on the list is VGR; it has increased its dividends for 12 years in a row, has an earnings growth rate of 60.9%, a decent five-year dividend growth rate of 5.00%, a total return for the past three years and five years of 93% and 86% respectively, and it has been paying dividends since 1990.

7 Dividend Champs With Yields As High As 23%, Part II - Seeking Alpha

2011-12-26T10:17:00.000-05:00

This is part II of the dividend champ series. In part I we looked at seven stocks with yield as high as 15%. Extreme volatility is propelling more and more investors into dividend yielding investments in contrast to speculative investments. In coming up with this list we screened for the following;

7 Dividend Champs With Yields As High As 18%, Part III - Seeking Alpha

2011-12-26T10:16:00.000-05:00

5 Warren Buffett Quotes To Make You A Better Long-Term Investor - Seeking Alpha

2011-12-26T08:50:00.000-05:00

Warren Buffett, the CEO and Chairman of Berkshire Hathaway (BRK.A), has a reputation for taking a long-term view of the market when other investors get distracted by the day-to-day fluctuations and sometimes make short-sighted situations that are often at odds with their long-term interests.

Optimizing Value In The Pursuit Of Dividend Yield Income: REITs, MLPs And BDCs - Seeking Alpha

2011-12-25T09:11:00.001-05:00

Double taxation is the main problem for investors reliant on dividend-paying companies. For most companies, the income is taxed on the corporate level first, and then passed down to the individual where it’s also taxed again on an individual level. Thereby, companies that typically pass value to their investors in the form of dividend payouts tend to lose a compounding amount of value over every dividend paid. This can be disadvantageous for investors as an industry peer (all things considered equal) that doesn’t pay out dividends should in theory outperform the company that does.

REITs, BDCs, and MLPs are therefore the ideal entities under the right circumstances by which income streams can be obtained. Through bypassing the corporate tax level and enforcing a high payout requirement, income investors focused on yield can extract an optimal amount of value from their investment.

The Corruption of America?----Porter Stansberry

2011-12-24T12:34:00.001-05:00

The numbers tell us America is in decline... if not outright collapse. I say "the numbers tell us" because I've become very sensitive to the impact this kind of statement has on people. When I warned about the impending bankruptcy of General Motors in 2006 and 2007, readers actually blamed me for the company's problems – as if my warnings to the public were the real problem, rather than GM's $400 billion in debt. The claim was absurd. But the resentment my work engendered was real.

So please... before you read this issue, which makes several arresting claims about the future of our country... understand I am only writing about the facts as I find them today. I am only drawing conclusions based on the situation as it stands. I am not saying that these conditions can't improve. Or that they won't improve.

A simple plan to keep your assets safe from an out-of-control government - Casey Research

2011-12-23T10:02:00.000-05:00

Americans, by and large, run all their affairs within the confines of the US. The US economy is so large and so varied that it's easy to assume that everything you want to do with your wealth can be done without crossing any borders. And people in the US, like people anywhere, live with the habits and attitudes developed over generations. They're only human. In the case of Americans, those habits grew out of long experience with a government that was small and that generally practiced the rare virtue of following its own laws. In a happy exception to mankind's experience with rulers, there was little to fear from it.

Stay at home is still the norm for Americans, but it's a norm that is slowly fading. Every billion-dollar tick of the government debt clock, every expansion of the government's regulatory apparatus, every overreaching judicial decision made in the name of a compelling public need, every inversion of protection for citizens into license for the state and every intellectually tortured discovery of a new meaning in the Constitution's 4,400 old words leaves a few thousand more people wondering how prudent it is to consign all their eggs to a single national basket. Encounters with high-handed IRS agents and eager TSA gropers do nothing to ease that concern. And for those who listen thoughtfully, the messages from our designated leaders and their would-be replacements only hurry the dawning sense of unease.

20 Dividend Monsters That Hedge Funds Love The Most - Seeking Alpha

2011-12-23T09:51:00.000-05:00

We are concerned about the Fed’s inflationary monetary policy and the huge budget deficits of the Federal government. We think high dividend stocks will perform much better than treasury bonds over the next decade. Under the current market situation, we strongly recommend investors to play defensively by investing in high dividend stocks instead of government bonds. One of the practical ways to pick good dividend stocks is to invest in what hedge funds are bullish about. Insider Monkey tracks 300+ hedge funds. Most of these hedge funds employ fundamental analysis to make investments. Below we compiled a list of stocks with at least 5% dividend yield and over $5 billion market cap that hedge funds love the most.

A Look At How Far Gold Might Correct

2011-12-22T10:33:00.000-05:00

A correction in the price of gold is well on its way after a substantial run up from July to early September. Gold reached an intraday high close to $1900, formed a double top and has been in a correction mode ever since. A question on many people’s mind is; how far will the price of gold correct and how long will this correction last?

An aggressive run up in prices, like we witnessed this summer, usually leads to a correction in itself sooner or later. We have also had strong deflationary forces due to the debacle in Europe, pushing asset prices down, and strengthening dollar. All this is bearish for gold.

However, it is important to keep the focus on the bigger picture and not let the volatility of the market shake you out of your gold positions. The fundamentals are still in favor of gold. The problems in the world have not gone away; we still face sovereign debt wows, record deficits, high unemployment, and depreciating currencies. There is no quick fix for these problems and until these issues goes away gold will continue to outperform.

Trending Value (or how to crush the market) | The Reformed Broker

2011-12-22T10:18:00.000-05:00

Market returns have become so volatile that daily returns of 3%-5% — up or down — are hardly surprising. Volatility is a cruel beast, because it leads investors to make emotionally based decisions that center on the near term future and ignore longer-term opportunities. Moreover, many investors are staying out of the stock market entirely or selling their equity stakes.

Looking For Margin Of Safety In Dividends - Seeking Alpha

2011-12-21T22:00:00.000-05:00

Dividend investing is a form of value investing, where investors do not realize all of their return all at once, but rather on regular and consistent intervals. Dividends provide a direct link between the financial performance of a company, and the returns of its shareholders. Sometimes the market does not recognize that certain firms are more valuable for extended periods of time, even if their earnings are higher and valuations are cheap. With dividends, value investors realize a return that puts them closer to realizing the intrinsic value of the stock, no matter what the market or the stock price does.

Sluggish Demand Downgrades China, Canada, Saudi Arabia; India, Singapore Looking Up - Seeking Alpha

2011-12-21T10:11:00.000-05:00

The economies of China, Canada, and Saudi Arabia face sluggish global demand, while India and Singapore's economies improve despite global economic challenges.

6 Types Of Dividend Investment Strategies, Part I

2011-12-20T09:32:00.001-05:00

Dividend investing can take many different forms. The ever-present trade-off between current dividend yield and dividend growth rate can create puzzling decision making situations for investors. They are faced with the eternal dichotomy of: is it better to concentrate on higher current dividend yields or opt for lower current yields and higher dividend growth rates (DGR)?
To further complicate matters, there is also the question of: is it better to go with individual stocks or dividend paying funds, or some combination of all of these? In this article I present six types of dividend investing strategies along with a portfolio based on each strategy.

6 Types Of Dividend Investment Strategies, Part II - Seeking Alpha

2011-12-20T09:31:00.001-05:00

In Part I, I discussed and presented portfolios for types 1 and 2 strategies-- Income Investing and High Yield Investing. In Part II, types 3 and 4 will be discussed: High Growth Investing and Long Term Growth Investing. Readers who have not read Part I, please start there, since it contains important information necessary in order to better follow the rest of the article.

6 Types Of Dividend Investment Strategies, Part III

2011-12-20T09:29:00.002-05:00

In Part I, I discussed and presented portfolios for Type 1 and Type 2 strategies. In Part II, Type 3 and Type 4 were discussed. Part III is the final installment and will examine Type 5 and Type 6 strategies. Readers who have not read Part I, please start there, since it contains important information necessary in order to better follow the rest of the article.

Ann Barnhardt explains MF Global

2011-12-20T05:44:00.001-05:00

Ann explains the corruption and bluntly explains why she closed her firm down due to the crisis of MF GLobal.

7 Dividend Champs With Yields As High As 23%, Part II

2011-12-19T09:44:00.000-05:00

This is part II of the dividend champ series. In part I we looked at seven stocks with yield as high as 15%. Extreme volatility is propelling more and more investors into dividend yielding investments in contrast to speculative investments. In coming up with this list we screened for the following;
1) A dividend payment history of 4 or more years, or 3 years or more of increasing the yearly dividend. The only exception is ARR and it has been included because of its stunning quarterly revenue growth rate (yoy) of 12484%
2) EBITD of $200 million or higher. The only exception is ARR and the reason for this has been listed under point 1.
3) A Yield of 5.5% or higher.
4) Quarterly revenue growth rate (yoy) of 26% or higher. We have 3 exceptions, BWP, KMP and ARR. The reason we included ARR is covered in point 1. BWP was included because it has a strong Operating cash flow rate of $450 million, a healthy levered free cash flow rate of $177 million and has increased its dividends for 4 consecutive years in a row. KMP was included because it is a true dividend champ; it has increased its dividend consecutively for 14 years in a row, has a very strong operating cash flow rate of $2.87 billion and a healthy levered free cash flow rate of $265 million.

Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else | ZeroHedge

2011-12-19T05:44:00.000-05:00

In an oddly prescient turn of events, yesterday we penned a post titled "Has The Imploding European Shadow Banking System Forced The Bundesbank To Prepare For Plan B?" in which we explained how it was not only the repo market, but the far broader and massively unregulated shadow banking system in Europe that was becoming thoroughly unhinged, and was manifesting itself in a complete "lock up in interbank liquidity" and which, we speculated, is pressuring the Bundesbank, which is well aware of what is going on behind the scenes, to slowly back away from what will soon be an "apocalyptic" event (not our words... read on). Why was this prescient? Because today, Reuters' Christopher Elias has written the logical follow up analysis to our post, in which he explains in layman's terms not only how but why the lock up has occurred and will get far more acute, but also why the MF Global bankruptcy, much more than merely a one-off instance of "repo-to-maturity" of sovereign bonds gone horribly wrong is a symptom of two things: i) the lax London-based unregulated and unsupervised system which has allowed such unprecedented, leveraged monsters as AIG, Lehman and now as it turns out MF Global, to flourish until they end up imploding and threatening the world's entire financial system, and ii) an implicit construct embedded within the shadow banking model which permitted the heaping of leverage upon leverage upon leverage, probably more so than any structured finance product in the past (up to and including synthetic CDO cubeds), and certainly on par with the AIG cataclysm which saw $2.7 trillion of CDS notional sold with virtually zero margin. Simply said: when one truly digs in, MF Global exposes the 2011 equivalent of the 2008 AIG: virtually unlimited leverage via the shadow banking system, in which there are practically no hard assets backing the infinite layers of debt created above, and which when finally unwound, will create a cataclysmic collapse of all financial institutions, where every bank is daisy-chained to each other courtesy of multiple layers of "hypothecation, and re-hypothecation."

A Performance Review of 7 U.S.-Traded Canadian Oil & Gas Equities - Seeking Alpha

2011-12-17T11:14:00.000-05:00

Canada is the largest foreign supplier of energy to the United States. Canadian-based companies pay their dividends in Canadian currency, which has natural resource backing. Over the last two years, Canadian currency has been strong against the U.S. dollar, and the Canadian dollar was stronger than the U.S. dollar for the first half of 2011, but it has weakened over the last few months, as various commodities became reduced in price. Additionally, European and Asian concerns have led investors to leave various currency investments and flee to the perceived safety of U.S. dollars.

Yield Famine Equities For Retirees

2011-12-17T10:58:00.001-05:00

As the global economy struggles with heavy developed country debt loads, retirees seeking yield have been hurt by ultra low interest rate policies from global central banks. Financial repression through ultra low yields is likely to be here to stay. Due to a very weak and uncertain economic environment for the developed world I do not see the U.S. Federal Reserve raising rates in the short-term. I expect to see rates at these levels throughout Chairman Bernanke’s term.

Lockheed Martin Is Fairly Valued With A Tempting 5%+ Yield - Seeking Alpha

2011-12-17T10:45:00.001-05:00

As part of our process, we perform a rigorous discounted cash-flow methodology that dives into the true intrinsic worth of companies. In Lockheed's (LMT) case, we think the firm is fairly valued at today's prices. We think its fair value is in the high $60s per share. (Our report on Lockheed and hundreds of other companies can be found here.)
For some background, we think a comprehensive analysis of a firm's discounted cash-flow valuation, relative valuation versus industry peers, as well as an assessment of technical and momentum indicators is the best way to identify the most attractive stocks at the best time to buy. This process culminates in what we call our Valuentum Buying Index(click here for more info on our methodology), which ranks stocks on a scale from 1 to 10 (best).

Euro Doomed By The Irish Super Keynesian Death Spiral - Seeking Alpha

2011-12-17T10:17:00.000-05:00

One of the most puzzling aspects of the eurozone's technocrats' insistence of austerity for Ireland is the complete lack of math based theoretical support for their actions. According to the Expansionary Fiscal Contraction (EFC) hypothesis, successful austerity during times of global excess capacity is extremely difficult to achieve. In fact, the math of both neo-classical and Keynesian economics shows that government contraction will push down employment under all conditions. (Note: the linked article is in JSTOR, which you should be able to access online through your local library-save and invest the $36.)

Equity Closed-End Funds: Why EXG Is A Better Fund Than You Think - Seeking Alpha

2011-12-16T13:25:00.001-05:00

There has been a lot of controversy over the Eaton Vance Tax-Managed Global Diversified Equity Income fund (EXG), perhaps because it is the second largest equity closed-end fund (CEF) at about $3 billion in net assets and thus, has a lot of investors spread among its 305 million shares outstanding. With that many investors, there's bound to be plenty who voice their opinion and many aren't very happy with the poor market price performance or the current -17.2% discount from its Net Asset Value (NAV), one of the widest of all equity CEFs and the widest since the bear market of 2008. On the other hand, there's been a lot of positive write-ups on EXG lately. So how should an investor interpret this?

The ABCs of Re-hypothecation in Gold and Securities Markets: What You Need to Know - Casey Research

2011-12-16T09:56:00.000-05:00

A new polysyllabic term has entered the Wall Street lexicon and is sweeping through the investing world like a brush fire through a dry canyon: "hypothecation." With its connection to the MF Global bankruptcy and aftermath, it engenders the kind of fear a homeowner might feel while monitoring the approaching flames.
The rise of hypothecation as the lead suspect in the MF Global tragedy has caused a fair bit of confusion about what, exactly, it is – and is not. Proving the idiom that nature abhors a vacuum, the blogosphere has weighed in with all manner of explanations, many of which have been less than accurate.
In an attempt to help our readers get to the heart of the matter, we will briefly review hypothecation – what it is and how it is used – and do so in plain English.

Top 7 Dividend Stocks From The Basic Materials Sector

2011-12-15T09:49:00.000-05:00

Many basic materials stocks have dividend yields that exceed Treasury yields. Taking a long-term (10-year) view, many of these firms have steadily paid dividends, increased dividend payouts and generated respecitible returns on euqity. Seven such basic materials firms were found: