John Jansen submits: Prices of Treasury coupon securities are posting modest (very) losses in overnight trading as some of the fear and angst which dominated trading yesterday fades today. Equity markets around the globe have posted losses but as one follows the sun the losses diminish and early indications are that the US market will open with small gains.Complete Story »

  Gerard Jackson submits:First and foremost, cap and trade is a carbon tax on capital, which really means a tax on economic growth. To get some understanding of the severe ramifications of Obama's proposed carbon tax we need to get a grip of basic capital theory. In everyday parlance capital has several meanings. It can be what an entrepreneur needs to start a business or what a business needs to expand output. It can also be an individual's assets: his house, savings, investments, etc. Using the term capital in this way is perfectly legitimate. However, in economics capital is something else altogether: it is the material means of production. It consists of those tools by which we eventually transform lower-valued resources into those higher-valued products we call consumer goods.Unfortunately the vast majority economists tend to treat capital as a homogenous lump in which capital goods are perfect substitutes for each other. When challenged on this approach they readily admit that it is pure fiction. On the other hand, (there's that phrase again) they would argue that from a theoretical point of view it ultimately doesn't matter whether capital is treated as homogeneous or heterogeneous. This is a dreadful error that is preventing economists from grasping the enormity of Obama's insane energy policy.Complete Story »

  Andy Kern submits: The question I am posing is whether Verizon Communications (VZ) can add 5.4 million new wireless subscribers and whether its likelihood of doing so is greater or lower that of than AT&T’s (T) adding 4.7 million new wireless subscribers. Verizon looks like a great buy right now. The company has weathered the crisis very well, is adding new subscribers faster than its peers and sports a 6% dividend yield. The important question, however, is can the company deliver results sufficient to justify its current stock price of $30?Complete Story »

  Gary Gordon submits: The most battered sector ETFs over the last 5 days all relate to natural resources. Is it time to give up on the stuff that we excavate or drill for? In essence, there are 2 reasons for the tremendous hit to lumber providers, oil explorers, gold miners and steel producers. First, the U.S. dollar’s ascent for 4 consecutive days has effectively lowered the spot prices of commodities. The lower the price of the commodity (e.g., crude, iron ore, silver, etc.), the less profitable these types of companies are likely to be.Complete Story »

  

  Gary Gordon submits: Back in the day when bonds acted as a safer haven, investors often rotated out of stocks and into bonds. Since the March lows, however, all assets have gone up together. In fact, during the credit collapse, virtually everything went down together. Stocks, non-U.S. Treasury bonds, currencies, commodities, REITS, MLPs, preferred shares, precious metals – it really didn’t matter. Liquidity was king.Complete Story »

  The Private Equiteer submits: A recent reader asked, why do I keep differentiating between private equity and venture capital, especially if venture capital is just a form of private equity. Well, in the strict sense, venture capital is private and it is often structured as equity, ergo, venture capital is private equity. (With that same definition, a $100 investment into a friend’s lemonade stall may also qualify as private equity.) However, when I refer to private equity, I’m referring to a business model of investment. A few characteristics of this strategy include the following:Complete Story »

  Macro Man submits: Life all comes down to a few moments. This is one of them. -Bud Fox, Wall Street Looking back on his sixteen year career in finance, it's been Macro Man's experience that each year is often defined by a handful of critical days or events. While Bud Fox had the benefit of knowing how important his visit to Gordon Gekko's office would be, it's often not quite as obvious in real time how important an event will be.Complete Story »

  If anybody imagines that the transition from recession to growth would be a smooth one, they are going to be disappointed. Yesterday’s market figures from Europe amplified this point forcibly. The FTSE shed 2.3% of its value with the CAC 40 in Paris down by 2.14% and Frankfurt’s Dax lost 2.46%. The declines came on the back of less than stellar company performance data for Q3 in Europe and uninspired economic data emerging from America. Of course, the market levels reflect the average value of all of the shares that a given market trades, so there were some big losses hidden in the details. The Prudential (PRU), in the UK, reported a Q3 sales decline of 22% for its financial services; Prudential shares fell 9.8% in London yesterday. Major German software company SAP shed 7.7% upon the news that it was reducing its sales forecast Mining stocks were also significantly lower on the basis of doubts about the strength (or otherwise) of the global recovery; Xstrata (XSRAF.PK) was down by 9.4%, Kazakhmys fell 9.1% and Lonmin (LNMIY.PK) shed 8.4% of its value. If the recession is still driving down economic activity, there will be reduced demand for raw materials – hence the falls in the mining sector. Complete Story »

  Profit taking helped spur the Japanese Yen higher against a number of currencies in Asian trading today. As reported at 3:42 pm (JST) in Tokyo, versus the U.S. Dollar, the Japanese Yen traded at 90.40 Yen, an increase of .4%, continuing yesterday’s gains. Higher yielding currencies also lost ground against the low-yielding Yen; versus the Australian Dollar, the Yen hit on a 3-week peak of 80.85 Yen before retreating to 81.22 Yen and the New Zealand Dollar fared no better, falling .6% against the Yen, to trade at 65.00 Yen. The single currency Euro lost .2% to trade at 133.11 Yen, following yesterday’s 1.8% decline to the lowest point in 2-weeks, which was attributed to investor unwinding of their long Euro positions. The U.S. Dollar also saw some broad gains in Asian trading yesterday, especially against higher-yielding currencies. The Australian Dollar slipped nearly 2% versus the greenback yesterday, the largest decline in 2-months while the New Zealand Dollar lost 3%, the largest single day drop in nearly 4 months. Earlier in the day, the New Zealand Reserve Bank governor indicated that no hike in the cash rate would be forthcoming, and the historical low rate of 2.5% would remain for at least until after the first half of 2010.Complete Story »

  When there are more opportunities for fundamental societal changes, there is more volatility, and correspondingly, more exciting prospects for investments. That’s why I find China and developing economies, which are becoming more “open,” more intriguing than the relatively mature economies of the US and Europe. One of the next big-money macro plays in the next coming decade or so will be leveraging the thesis that a correction of trade and economic imbalance will occur as the US and China dynamic evolves towards a more mutualistic relationship. As Paolo Pelligrini said in a recent Bloomberg interview, “There are going to be huge shifts in wealth around the globe … I want to invest in that.” Wealth is certainly shifting in the world as China continues to implement more market-based policies, the shift exacerbated by wealth destruction in the West; however, there is a dark-side—growing and rampant wealth inequality. It is my belief that this inequality will have to be adequately addressed in order for this particular wealth-shift to play out nicely, and for that above thesis to hold. I do think that this will happen, and I think answering the question of how it will be addressed will be of primary importance from an investing standpoint. Complete Story »

  Erwan Mahe submits:Just two quick points on this process today, which we have been covering relentlessly, because we continue to view it as the persistent symptom of a debt (and asset) phenomenon which just won’t go away. Blackstone (BX) is trying to renegotiate with creditors its $20.6bn in debt contracted in July 2007 (!) during the acquisition of hotel conglomerate, Hilton, which suffers, like its rivals, from the recession. In exchange for the private equity firm’s fresh injection of $800m, the goal is to cut debt by $5bn by converting it into shares and by extending its maturity by three years to 2016.Complete Story »

  Naveen Selvaraj submits:Success Factors, Inc (SFSF), a SAAS (Software as a Service) provider of workforce performance management solutions is discovering that cloud services can also lose steam in a weak economic environment. While on the face of it, a 30% revenue growth rate is impressive, investors will not be pleased with another quarter of operating losses.Revenue Growth Is Slowing Down Pushing Operating Break-Even Further Down The Road Complete Story »

  Scott's Investments submits:Even though I said I would be only posting links to articles this week, I couldn't help myself. The SPY is either going through a healthy consolidation, or the end of the bull run is here. It is too early to tell, either way we have seen a significant pullback in the last week. I previously wrote in July that the 'Lehman Gap' was an important resistance point to watch on SPY. We have filled the Lehman Gap and are now pulling back. I also previously detailed some daily and weekly charts with trend lines. We could be looking at the 100 range as a support level on SPY.Complete Story »