By Money Matters Editors
Two stocks to get your new investing year – 2010 – off to a good start: Potash and Freeport McMoRan.
Potash (POT). Potash remains one of the preeminent fertilizer companies in the world, producing three critical, primary plant nutrients and phosphate animal feed ingredients for both developed and developing world markets. As emerging markets develop, they need more food on a per capita basis, and that’s good news for solidly-performing fertilizer companies, such as Potash. Sell/Stop Loss for POT: $57.
Thursday, December 24, 2009
Wednesday, December 23, 2009
Build mega solar fields in the desert? Not so fast
By Money Matters Editors
You knew solar energy could not be the no-doubt-about-it superenergy form of the 21st century – at least not at the start.
The solar panel now has a few ‘cracks’ in it, as a result of a new environmental concern about destroyed or impacted vistas – basically sight pollution, but also pollution that physically harms the environment.
U.S Sen. Dianne Feinstein’s (D-California) stated opposition to building in the Mojave Desert has effectively scuttled 13 big solar energy plants and wind projects there, The New York Times reported Tuesday.
You knew solar energy could not be the no-doubt-about-it superenergy form of the 21st century – at least not at the start.
The solar panel now has a few ‘cracks’ in it, as a result of a new environmental concern about destroyed or impacted vistas – basically sight pollution, but also pollution that physically harms the environment.
U.S Sen. Dianne Feinstein’s (D-California) stated opposition to building in the Mojave Desert has effectively scuttled 13 big solar energy plants and wind projects there, The New York Times reported Tuesday.
Tuesday, December 22, 2009
OPEC is sitting pretty
By Money Matters Editors
For OPEC, it’s the best of times.
OPEC, meeting in Angola, said they don’t plan to reduce production despite bountiful supplies, Bloomberg News reported Monday.
The reason? Oil prices are so advantages – oil closed Monday at $72.47 per barrel – that the group does not have to take action even though demand is modest and supplies are at 1-year and in some cases at 3-year highs in key developed world markets.
What’s keeping oil’s price so high? Well, part of it is the expectation that global economic growth – in particular, emerging market demand – will eventually place pressure on global oil supplies in a year or so. But perhaps the biggest factor in oil’s unusually high price despite sluggish demand is the weak dollar. Depending on the model one uses, the weak dollar has added $10-25 to oil’s price.
For OPEC, it’s the best of times.
OPEC, meeting in Angola, said they don’t plan to reduce production despite bountiful supplies, Bloomberg News reported Monday.
The reason? Oil prices are so advantages – oil closed Monday at $72.47 per barrel – that the group does not have to take action even though demand is modest and supplies are at 1-year and in some cases at 3-year highs in key developed world markets.
What’s keeping oil’s price so high? Well, part of it is the expectation that global economic growth – in particular, emerging market demand – will eventually place pressure on global oil supplies in a year or so. But perhaps the biggest factor in oil’s unusually high price despite sluggish demand is the weak dollar. Depending on the model one uses, the weak dollar has added $10-25 to oil’s price.
Monday, December 21, 2009
Senate Democrats hope to retain 'Sweet 60' to pass health care reform
By Money Matters Editors
Senate Democrats late Sunday night were poised to begin a test vote for the health care reform bill, now that U.S. Sen. Ben Nelson, D-Nebraska, was granted certain concessions and agreed to support the bill on Saturday
If the health care reform bill passes, it would be the biggest social policy advance by the United States since the passage of Medicare in 1965, and it would rank third behind the latter and the establishment of Social Security of 1935 in terms of social safety net significance.
Senate Democrats late Sunday night were poised to begin a test vote for the health care reform bill, now that U.S. Sen. Ben Nelson, D-Nebraska, was granted certain concessions and agreed to support the bill on Saturday
If the health care reform bill passes, it would be the biggest social policy advance by the United States since the passage of Medicare in 1965, and it would rank third behind the latter and the establishment of Social Security of 1935 in terms of social safety net significance.
Friday, December 18, 2009
Health care reform: A good bill is better than none
By Money Matters Editors
Health care reform update: Former President Bill Clinton, D-Arkansas, hit the nail on the head Thursday when he evaluated whether Democrats should or should not vote for a health care reform bill that does not contain a public option.
Clinton urged Democrats and others to vote for the bill: “Does this bill read exactly how I would write it? No. Does it contain everything everyone wants? Of course not," Clinton told the Agence France-Presse. “But America can't afford to let the perfect be the enemy of the good.”
Health care reform update: Former President Bill Clinton, D-Arkansas, hit the nail on the head Thursday when he evaluated whether Democrats should or should not vote for a health care reform bill that does not contain a public option.
Clinton urged Democrats and others to vote for the bill: “Does this bill read exactly how I would write it? No. Does it contain everything everyone wants? Of course not," Clinton told the Agence France-Presse. “But America can't afford to let the perfect be the enemy of the good.”
Thursday, December 17, 2009
Job growth is the honey for voters' vinegar
By Money Matters Editors
Tea Partiers. People upset at the Fed. People who want to put term limits on Congress. You name it: the United States abounds in vocal, but for the most part thinly-supported critics.
And although their complaints run the gamut of the political, social, and cultural spectrum, they all really come down to one aspect of American life: the economy. And regarding the economy, the issue of jobs is front and center.
Some critics want to replace Fed Chairman Ben Bernanke, who, by the way, was just selected Time Magazine’s “Person of the Year” for 2009. Money Matters Editors wholeheartedly agrees with the selection: it is deserved.
Tea Partiers. People upset at the Fed. People who want to put term limits on Congress. You name it: the United States abounds in vocal, but for the most part thinly-supported critics.
And although their complaints run the gamut of the political, social, and cultural spectrum, they all really come down to one aspect of American life: the economy. And regarding the economy, the issue of jobs is front and center.
Some critics want to replace Fed Chairman Ben Bernanke, who, by the way, was just selected Time Magazine’s “Person of the Year” for 2009. Money Matters Editors wholeheartedly agrees with the selection: it is deserved.
Wednesday, December 16, 2009
Look for the Fed to keep rates low for a long time
By Money Matters Editors
U.S. Federal Reserve Chairman Ben Bernanke is not raising short-term interest rates Wednesday, and he’s not for several quarters.
And it’s not just because the Fed needs to stimulate the U.S. economy: there’s a new fad making the rounds in Washington – it’s called ‘scapegoat the Fed.’
The fad appears every 20 years or so when lawmakers want to blame someone or something for the nation’s economic woes: why not blame the Fed.
U.S. Federal Reserve Chairman Ben Bernanke is not raising short-term interest rates Wednesday, and he’s not for several quarters.
And it’s not just because the Fed needs to stimulate the U.S. economy: there’s a new fad making the rounds in Washington – it’s called ‘scapegoat the Fed.’
The fad appears every 20 years or so when lawmakers want to blame someone or something for the nation’s economic woes: why not blame the Fed.
Thursday, December 10, 2009
Natural gas speed-bump: hydraulic fracturing may be polluting groundwater
By Money Matters Editors
Not so fast regarding shale gas or ‘unconventional gas.’ Accessing the potentially plentiful, domestic energy source has encountered a obstacle: it may be contaminating wells and groundwater, The New York Times reported.
The new techniques used to access the gas – one major techniques is called hydraulic fracturing – are causing environmental problems, The Times said. So far, the incidence of groundwater contamination is thin, but more-thorough government checks may turn up many more problems.
Natural gas companies acknowledge the validity of some concerns, The Times added, but they argue that their technology remains fundamentally safe. The U.S. Environmental Protection Agency is investigating various contaminated wells and sites.
Not so fast regarding shale gas or ‘unconventional gas.’ Accessing the potentially plentiful, domestic energy source has encountered a obstacle: it may be contaminating wells and groundwater, The New York Times reported.
The new techniques used to access the gas – one major techniques is called hydraulic fracturing – are causing environmental problems, The Times said. So far, the incidence of groundwater contamination is thin, but more-thorough government checks may turn up many more problems.
Natural gas companies acknowledge the validity of some concerns, The Times added, but they argue that their technology remains fundamentally safe. The U.S. Environmental Protection Agency is investigating various contaminated wells and sites.
Wednesday, December 9, 2009
President Obama's jobs bill will jump-start hiring
By Money Matters Editors
President Obama Tuesday proposed using a portion of the surplus TARP bank bailout money to fund infrastructure spending, tax credits, and related small business credits, all aimed at creating jobs, Bloomberg News reported.
We at Money Matters heartily agree. There is an enormous amount of work that needs to be done in these United States, and millions of skilled professionals and semi-skilled workers who are willing to do it: more than 7.6 million Americans have lost their jobs in the recession that started in December 2007.
President Obama Tuesday proposed using a portion of the surplus TARP bank bailout money to fund infrastructure spending, tax credits, and related small business credits, all aimed at creating jobs, Bloomberg News reported.
We at Money Matters heartily agree. There is an enormous amount of work that needs to be done in these United States, and millions of skilled professionals and semi-skilled workers who are willing to do it: more than 7.6 million Americans have lost their jobs in the recession that started in December 2007.
Monday, December 7, 2009
For solid stock gains, consider Potash, Mosaic, and Agrium
By Money Matters Editors
Fertilizer plays are ‘in,’ and that’s no bull.
Money Matters is Reiterating its Buy rating for Potash (POT), Mosaic (MOS), and Agrium (AGU).
All three will perform well in 2010 and 2011 as the U.S. and global economic expansions strengthen.
Fertilizer plays are ‘in,’ and that’s no bull.
Money Matters is Reiterating its Buy rating for Potash (POT), Mosaic (MOS), and Agrium (AGU).
All three will perform well in 2010 and 2011 as the U.S. and global economic expansions strengthen.
Friday, December 4, 2009
Headline: ‘Cheap oil is here to stay’ – when did it arrive?
By Money Matters Editors
CNNMoney.com published a story Thursday entitled “Cheap Oil Is Here To Stay.”
Question - Oil closed at about $75 per barrel Thursday: Money Matters Editors want to know, when exactly did cheap oil arrive?
The CNNMoney. com article goes on to say that a combination of conservation, increased engine efficiency, and an existing glut of oil will keep the price of oil “well below $100 a barrel.” How comforting.
CNNMoney.com published a story Thursday entitled “Cheap Oil Is Here To Stay.”
Question - Oil closed at about $75 per barrel Thursday: Money Matters Editors want to know, when exactly did cheap oil arrive?
The CNNMoney. com article goes on to say that a combination of conservation, increased engine efficiency, and an existing glut of oil will keep the price of oil “well below $100 a barrel.” How comforting.
Thursday, December 3, 2009
New York City is testing hybrid garbage trucks
By Money Matters Editors
Sometimes the answers to difficult, complex problems stem from the least likely of places. Are economies of scale – basically the lowering of the per unit cost of a good through mass production - starting to make themselves felt in the hybrid vehicle sector?
Well, that may very well be the case, if the hybrid truck trend gains momentum, as expected. Right now, the City of New York is testing a series of hybrid garbage trucks – those big, diesel-spewing trucks that haul away garbage, lots of garbage – with the hope of lowering long-term fuel and maintenance costs, The New York Times reported.
Sometimes the answers to difficult, complex problems stem from the least likely of places. Are economies of scale – basically the lowering of the per unit cost of a good through mass production - starting to make themselves felt in the hybrid vehicle sector?
Well, that may very well be the case, if the hybrid truck trend gains momentum, as expected. Right now, the City of New York is testing a series of hybrid garbage trucks – those big, diesel-spewing trucks that haul away garbage, lots of garbage – with the hope of lowering long-term fuel and maintenance costs, The New York Times reported.
Wednesday, December 2, 2009
The EPA should ban E15
By Money Matters Editors
The U.S. Environmental Protection Agency has sent the E15 proposal – gasoline with 15% ethanol – back for more study.
Money Matters Editors argues E15 from should be abandoned outright. Here’s why:
Ethanol from corn is not achieving its environmental, energy or conservation goals.
First, the scientific community is divided as to whether corn-based ethanol results in less or more greenhouse gas emissions. Some studies have shown that when one considers the energy to grow corn, harvest it, load the trucks, and process it, corn-based ethanol emits more greenhouse gases than it, in theory, would save from not drilling for oil.
The U.S. Environmental Protection Agency has sent the E15 proposal – gasoline with 15% ethanol – back for more study.
Money Matters Editors argues E15 from should be abandoned outright. Here’s why:
Ethanol from corn is not achieving its environmental, energy or conservation goals.
First, the scientific community is divided as to whether corn-based ethanol results in less or more greenhouse gas emissions. Some studies have shown that when one considers the energy to grow corn, harvest it, load the trucks, and process it, corn-based ethanol emits more greenhouse gases than it, in theory, would save from not drilling for oil.
Tuesday, December 1, 2009
Good deal: U.S. Treasury borrows $44 billion for 1%
By Money Matters Editors
The inflation hawks continue to circle, but for the duration of the U.S. Federal Reserve’s unprecedented quantitative easing and credit market intervention, they’ve been circling in vain.
Case in point: With more than $23 trillion pumped into the financial system via monetary and fiscal policy in the last 12 months, there’s good reason to fear a rise in inflation, particularly if the U.S. Federal Reserve’s quantitative easing is not withdrawn in time.
The inflation hawks continue to circle, but for the duration of the U.S. Federal Reserve’s unprecedented quantitative easing and credit market intervention, they’ve been circling in vain.
Case in point: With more than $23 trillion pumped into the financial system via monetary and fiscal policy in the last 12 months, there’s good reason to fear a rise in inflation, particularly if the U.S. Federal Reserve’s quantitative easing is not withdrawn in time.
Monday, November 30, 2009
Cheap gas and U.S. GDP growth: they go to together like Simon & Garfunkel
By Money Matters Editors
Right now, average U.S. gasoline prices are at an inflection point: move any higher and there’s real trouble up ahead for the U.S. economy.
Conversely, a drop from current levels – about $2.63 per gallon for unleaded regular – and the U.S. economic recovery could get a tail wind.
Here’s the bleaker scenario: something happens to Americans as they see the price of gas top $3 per gallon. (It’s already above $3 for super unleaded in higher-costs areas like Los Angeles, New York, and San Francisco.) Americans cut back discretionary purchases in order to be able to fill their gas tanks with the gas they need, without breaking their budget. And that cutback in discretionary purchases shaves growth off U.S. GDP. Further, if the price remains over $3, it also convinces more Americans to choose a more fuel-efficient vehicle. And we know the impact higher gasoline and diesel prices have across the U.S. economy: it increases costs at just about every stage of production.
Right now, average U.S. gasoline prices are at an inflection point: move any higher and there’s real trouble up ahead for the U.S. economy.
Conversely, a drop from current levels – about $2.63 per gallon for unleaded regular – and the U.S. economic recovery could get a tail wind.
Here’s the bleaker scenario: something happens to Americans as they see the price of gas top $3 per gallon. (It’s already above $3 for super unleaded in higher-costs areas like Los Angeles, New York, and San Francisco.) Americans cut back discretionary purchases in order to be able to fill their gas tanks with the gas they need, without breaking their budget. And that cutback in discretionary purchases shaves growth off U.S. GDP. Further, if the price remains over $3, it also convinces more Americans to choose a more fuel-efficient vehicle. And we know the impact higher gasoline and diesel prices have across the U.S. economy: it increases costs at just about every stage of production.
Wednesday, November 25, 2009
Go nukes! Nuclear power gains support in U.S., abroad
By Money Matters Editors
Finally, the United States appears to be heading in the correct direction, from a nuclear power for electricity standpoint.
And there’s even better news: environmentalists, in an impressive switch, are starting to side with nuclear power, too, so says The Washington Post. Here’s why:
Environmentalists now realize that nuclear power represents ‘the lesser of two evils’ versus coal-fired electric power generation plants. When faced with a choice of processing nuclear waste or seeing soot and other carbon emissions spew into the atmosphere – heating up the atmosphere to irreversible levels – the choice is clear: nuclear power wins, easy.
Finally, the United States appears to be heading in the correct direction, from a nuclear power for electricity standpoint.
And there’s even better news: environmentalists, in an impressive switch, are starting to side with nuclear power, too, so says The Washington Post. Here’s why:
Environmentalists now realize that nuclear power represents ‘the lesser of two evils’ versus coal-fired electric power generation plants. When faced with a choice of processing nuclear waste or seeing soot and other carbon emissions spew into the atmosphere – heating up the atmosphere to irreversible levels – the choice is clear: nuclear power wins, easy.
Tuesday, November 24, 2009
Memo to Congress: Pass a $200 billion jobs bill
By Money Matters Editors
Memo to Congress: What would be the best Christmas/ Hannukah present for the American people? Oh, 15 million or so new jobs.
U.S. House Majority Leader Steny Hoyer, D-Maryland, said he expects the U.S. House of Representatives to vote on legislation that would create more jobs by the year-end holiday recess.
“Clearly 10.2 percent unemployment is unacceptable and is causing great pain to literally millions of people around the country.” U.S. Rep. Hoyer said, CNN reported.
Memo to Congress: What would be the best Christmas/ Hannukah present for the American people? Oh, 15 million or so new jobs.
U.S. House Majority Leader Steny Hoyer, D-Maryland, said he expects the U.S. House of Representatives to vote on legislation that would create more jobs by the year-end holiday recess.
“Clearly 10.2 percent unemployment is unacceptable and is causing great pain to literally millions of people around the country.” U.S. Rep. Hoyer said, CNN reported.
Monday, November 23, 2009
CVS and Walgreen: A drug store dynamic duo
By Money Matters Editors
You’ve heard of the Dynamic Duo – Batman and Robin. Well, consider owning shares in the Dynamic Duo of U.S. drug store chains: CVS-Caremark (CVS) and Walgreen (WAG).
Short-term, each is likely to benefit from increased store traffic, due to the H1N1 flu virus. Long-term, each is destined to increase their market share.
CVS is renowned for its highly effective new store location formula. Meanwhile, Walgreen is ‘the defensive’s defensive’ because it’s not only in a conservative sector (drug stores), it’s resisted the urge to grow by acquisition, instead focusing on the old-fashioned method of growth by opening new stores, and other methods (large penetrations into new markets, relocating stores, expanding 24-hour service to more stores).
You’ve heard of the Dynamic Duo – Batman and Robin. Well, consider owning shares in the Dynamic Duo of U.S. drug store chains: CVS-Caremark (CVS) and Walgreen (WAG).
Short-term, each is likely to benefit from increased store traffic, due to the H1N1 flu virus. Long-term, each is destined to increase their market share.
CVS is renowned for its highly effective new store location formula. Meanwhile, Walgreen is ‘the defensive’s defensive’ because it’s not only in a conservative sector (drug stores), it’s resisted the urge to grow by acquisition, instead focusing on the old-fashioned method of growth by opening new stores, and other methods (large penetrations into new markets, relocating stores, expanding 24-hour service to more stores).
Friday, November 20, 2009
For the good of the global economy, China must end its fixed-rate currency policy
By Money Matters Editors
Memo to China: let your currency, the yuan, float, or be determined by market forces, in stages.
If you undertake the above measure, you’ll help your economy, and the global economy.
If you don’t, difficult conditions are up ahead for your economy, and the world’s, as well. Here’s why:
Keeping the yuan fixed at roughly 6.83 yuan to the U.S. dollar is only hastening the day when China will have to transition to a more domestic-consumption-based economy. That’s because China’s artificially-cheap international products that stem from that fixed-rate are increasing protectionist sentiment in the United States, a key customer nation. Conversely, allowing the yuan to appreciate, in stages, may quell protectionist sentiment that’s building in Congress, enabling China to transition to a consumer economy more gradually. Failing to do so may result in Congressional tariff on China.
Memo to China: let your currency, the yuan, float, or be determined by market forces, in stages.
If you undertake the above measure, you’ll help your economy, and the global economy.
If you don’t, difficult conditions are up ahead for your economy, and the world’s, as well. Here’s why:
Keeping the yuan fixed at roughly 6.83 yuan to the U.S. dollar is only hastening the day when China will have to transition to a more domestic-consumption-based economy. That’s because China’s artificially-cheap international products that stem from that fixed-rate are increasing protectionist sentiment in the United States, a key customer nation. Conversely, allowing the yuan to appreciate, in stages, may quell protectionist sentiment that’s building in Congress, enabling China to transition to a consumer economy more gradually. Failing to do so may result in Congressional tariff on China.
Thursday, November 19, 2009
Home Depot: Considerable upside exists
By Money Matters Editors
The Home Depot’s (HD) Q3 earnings report is an example of what ails Wall Street right now: an expectations game that’s slightly unrealistic.
Home Deport reported Q3 EPS of 41 cents per share Tuesday, well above the First Call EPS consensus of 36 cents, and what did Wall Street do? Of course it sold the stock, with shares closing down about 30 cents to $26.99.
Home Depot even offered decent Q4 earnings guidance of 13 cents per share, compared to the First Call EPS of 16 cents. True, same store sales are decelerating, but that’s no surprise, given the housing sector’s contraction and the ‘frugal consumer’ era. In any event, the company still expects FY2009 EPS of $1.55 – in-line with the First Call FY2009 EPS estimate of $1.55.
The Home Depot’s (HD) Q3 earnings report is an example of what ails Wall Street right now: an expectations game that’s slightly unrealistic.
Home Deport reported Q3 EPS of 41 cents per share Tuesday, well above the First Call EPS consensus of 36 cents, and what did Wall Street do? Of course it sold the stock, with shares closing down about 30 cents to $26.99.
Home Depot even offered decent Q4 earnings guidance of 13 cents per share, compared to the First Call EPS of 16 cents. True, same store sales are decelerating, but that’s no surprise, given the housing sector’s contraction and the ‘frugal consumer’ era. In any event, the company still expects FY2009 EPS of $1.55 – in-line with the First Call FY2009 EPS estimate of $1.55.
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