After their infamous and massive bets on crude oil sent prices doubling and brought $5-a-gallon gasoline a year ago, hedge funds are now pouring their billions into raw sugar.Wed Sept 30
Sugar prices have doubled since springtime, causing US officials to consider lifting tariff barriers so that more imported sugar can reach food and candy makers.
Analysts say hedge funds are in search of high profits on commodity gambles, since returns on stocks and bonds are meager and less certain.
"The issue is not just [that] something amazing is going to happen in 2045," he says. "There's something remarkable going on right now."Mike Hodgkinson dishes about his mind-blowing, sci-fi gratuitous, but REAL-life interview with Kurzweil. It is a must-read, so click here to read the whole piece.
For those who'd been optimistic that Federal Reserve officials might eventually wake up to the true nature of inflation, last week's FOMC meeting likely dashed all hope. The Fed continues to reveal a shocking blindness about inflation's actual causes, and instead comforts itself with the false notion that subpar economic growth is inflation's cure.
The important part of last week's FOMC statement went like this:
"With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time."
What Fed officials still don't see is that unemployment and "slack" have nothing to do with inflation. Zimbabwe has enormous amounts of slack, but thanks to a currency that's been in freefall for years amid a collapsing economy, inflation is rampant there. That is so because inflation is solely a monetary phenomenon caused by a decline in the value of a currency. Economic growth has nothing to do with it, though it should be said that economic weakness has historically correlated with currency weakness, and vice versa.Zing! Read his whole piece here...
Simply put, dollar weakness IS inflation, and with the dollar at historic laws, we ARE inflating.
“Bernanke, Geithner and Summers didn’t see the crisis coming so why are they still there?” Taleb told a group of business people in Hong Kong. Bernanke is like “a pilot who didn’t see a hurricane,” he added.Now, Taleb says the only solution is to purge the U.S. of the poison. Literally, to detoxify of these bad assets.
“The solution is simple: we have to sweat it out,” Taleb said. The U.S. has “to kill the debt,” not pass it on.Read more from Bloomberg...
You know the American system is in lousy shape when Dick Cheney's investment manager and Michael Moore start to agree about it.and
If he's looking for a populist rebellion against the banking industry and the financial system, it's a surprise that Moore didn't recommend the most radical weapon at the public's disposal: personal bankruptcy.Read Arends' whole commentary here...
Robertson said the US faces a tough struggle ahead, and the only escape is to "grow and save our way out of it."It's almost Armageddon if the Japanese and Chinese don't buy our debt," Robertson said. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."
"The U.S. has to quit spending, cut back, start saving, and scale backward."
Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing. Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.Some of the hotels mentioned as being at risk, include:
Beginning Oct. 19, Bank of America will stop charging any fees for customers who overdraw their accounts by less than $10 in a single day. It will also limit the number of overdraft fees it charges to four a day, although the bank will continue to charge a fee of $35 per overdraft.The Debtors Revolt, which took Youtube by storm and now has spread to all the major media, is beginning to see some small successes. Here is what Rockerchic4god, the lady who began the Debtors Revolt with her video-gone-viral, stated on her Youtube channel:
Chase will cap the number of overdraft fees it charges a day to three. It will stop charging fees when accounts are overdrawn by less than $5. Chase’s overdraft fees are $25 for the first fee each year, $32 for the next four and $35 after that.
"Ken Lewis hides in the shadows like the coward he is, but I was contact by Jeff Crawford, Sr. Vice Prez of Existing Customer Credit Services at BofA. While we have won one battle, WE MUST MARCH FORWARD to stop the plunder of this great nation and this people by global banking interests and our sell-out gov't representatives!!!"Rockerchic4god may be on a roll: at the end of this video she reveals she already has her next mission in mind: a taxpayers revolt!
China accounts for about 97% of global rare-earth production, while, the U.S., a major buyer of rare earths, mined no rare-earth elements last year.Elusive as the rare earth metals are, they are lucrative to investors.
"This hot commodity play has some room to run still," said Brent Cook, geologist and author of the investment letter Exploration Insights. "These elements are a hot new suite of minerals, that no one can say or spell, needed for all the high-tech gadgets the X, Y and Z generations know and love."Thu Sept 24
Just like the government's "cash for clunkers" program, investors are ready to cash in junk stock holdings for sounder equities, analysts say.
The stock market is up 57 percent since March 9, led by so-called junk stocks -- or badly beaten names with hazy growth prospects. Many of have been in the financial sector, which has lifted the S&P Financial index .GSPF by 146 percent since the March lows.
But few believe the junk rally can be sustained. Analysts say the mantle will need to be passed from financials and other high fliers to underperformers that actually have stronger growth potential in the coming quarters.
Many of the laggards are in defensive sectors such as healthcare, telecommunications and consumer staples. The sectors sport lower price-to-earnings ratios than both financials and the overall S&P 500, which looks expensive after the momentum-driven run.
Of the 10 major sectors in the S&P 500, telecoms .GSPL, consumer staples .GSPS, utilities .GSPU, energy .GSPE and healthcare .GSPA have all underperformed the rally, showing gains between 23 percent and 33 percent.
"Whenever you see a sustained bull market advance, you tend to see a rotation from the best-performing groups to the lesser performing groups," said Gail Dudack, chief investment strategist of Dudack Research Group in New York.
Some analysts say the rotation has already started, however tentatively. The expectation is that a superior outlook for earnings, lower valuations and safer revenue streams will feed investor appetite for the stocks as financials and discretionary names lose luster.Read the whole story here...
Partly driving this unusual trend is the dollar's newfound status as one of the cheapest currencies to borrow among the developed nations. Thanks to the Federal Reserve's moves to drive interest rates to near zero percent, the U.S. dollar carries a low yield, particularly compared to currencies in Brazil and other emerging markets, where rates are much higher.
Simultaneously, the falling dollar may be encouraging foreign central banks to buy U.S. Treasurys, either because they are relatively cheaper because of the currency or as part of a plan to support their own currencies.Wed Sept 23
Perhaps you never thought of animal fat or dead carcasses, as anything besides gross. But in fat, as commodities, icky animal byproducts are quite lucrative.
A ‘perfect storm’ of new technology, producers’ reluctance to cut production, and a pricing anomaly has created a new opportunity for natural gas to emerge as a dominant energy source in the United States in the decades ahead. Here’s why:
First, there’s natural gas’ low price. Natural gas hit a 7-year low earlier this year, falling through the psychologically-significant $3 per million BTUs (MMBtu) level on rising supplies and low demand from industry and power plants. Traders say prices could fall to $2.25-2.50 per MMBtus before demand picks up, assuming the U.S. economy’s recovery track continues to progress. Natural gas is currently trading at about $3.65 per MMBtu.Read more from the Money Matters blog….
Second, long-term, natural gas will likely at least remain competitive with oil, and probably remain cheaper on an energy delivered per dollar basis. The main reason? Large storage capacity in the United States, and the to-date unwillingness of natural gas producers to stop producing the stuff. New technology, including a process called hydraulic fracturing, enables the tapping of natural gas sources in the previously cost- prohibitive U.S. regions of Appalachia, the Mid-Continent, the Gulf Coast, and in the Rocky Mountains.
What’s more, estimated U.S. natural gas reserves have increased 35 percent, mostly on the ability to access those new sources, with estimated reserves totaling 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006, according to the Potential Gas Committee, The New York Times reported.
Maybe the generation is already married—to their college loans! So what category do you fall into: single in the city, too broke to date or afford that ring, or married for health insurance?The never-married included three-quarters of men in their 20s and two-thirds of women in that age range. Sociologists say younger people are taking longer to reach economic independence and consider marriage because they are struggling to find work or focusing on an advanced education. The Northeast had the most people who were delaying marriage, led by states such as New York and Massachusetts.
Again, too much of a good thing..."Investors should back out of risk assets back into relatively risk-free assets. That doesn't necessarily mean Treasurys, but other high-quality type triple-A and double-A securities."
One of the only measures of stock market valuation that shows a strong tendency toward long-term mean-reversion--the cyclically adjusted PE ratio--suggests stocks are now about 15%-20% overvalued.
This, of course, is nothing new: Stocks were overvalued on this measure for most of the two decades from 1990 to 2007. (They dropped below fair value for a few minutes in 2003, before blasting off to the moon again).
Now, thanks to the S&P's 58% rise off the bottom, stocks are now trading at 19X Robert Shiller's cyclically adjusted PE ratio.* This compares to an average of about 16X for the past 130 years.
Keep in mind that this level of over-valuation alone does not herald a near-term reversion to the mean: Last time this PE ratio soared past 20X, for example (in 1992), it stayed above 20X for 16 years. It is also possible that the "average" PE ratio has shifted upwards over the past century and that the "new normal" is something closer to 20X.
Unless we really have hit a new normal, however, the cyclically adjusted PE ratio does suggest that the long-term return on stocks from this level will be less than the long-term average. Specifically, it suggests that stocks will return about 4% real (after adjusting for inflation) over the next decade, versus the 7% average).
How many gadgets do you own? As Americans are more plugged-in than ever, the demand for electricity is spiking to the point of possible regulation.
The company will raise around $50 million, we’ve heard, although the final amount of the raise is apparently not yet locked down.
Twitter raised $35+ million earlier this year in a round led by Benchmark Capital and Institutional Venture Partners. That round valued the company at $250 million.
The company has raised a total of around $55 millionto date, and sources tell us they have approximately $30 million left in the bank.
Update: A source tells us that New York based Insight Venture Partners is the primary investor in this round.
"an open, community-powered idea and information service for investments. Users can eavesdrop on traders and investors, or contribute to the conversation and build their reputation as savvy market wizards. The service takes financial related data – using Twitter as the content production platform – and structures it by stock, user, reputation, etc."Check out the video from Financial Times.
In this recession, starting a business from scratch or buying a franchise has been the way out for many. Of job seekers who gained employment in the second quarter of 2009, nearly one in 10 — 8.7% — did so by launching their own businesses, according to outplacement firm Challenger Gray & Christmas' quarterly Job Market Index. That is up from 6.4% in the first quarter and is twice the rate reported in Challenger's 2008 second-quarter update.
The business owners nearly all believe they have enough energy and ambition to succeed — but statistics for success aren't on their side. Even in non-recessionary periods, about half will fail in their first five years, according to the Small Business Administration's Office of Advocacy.So, everyone out there with an idea: don't be shy! What have you got to lose? Rock out to the Zombies— it's the time of the season for...startups.
