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Wall Street Breakfast: Must-Know Newsby SA Editor Rachael Granby- Bank trio becomes duo. Wells Fargo (WFC) will become the largest U.S. bank by branches with its bid for Wachovia (WB), after Citigroup (C) withdrew from compromise negotiations late yesterday on concerns about the quality of some of Wachovia's assets. Wells Fargo, with a bid valued at $11.4B, expects the purchase to be completed by the end of the year, and denies it will have to absorb assets shakier than originally thought.
- Government considers next steps. As the financial crisis continues to worsen, the U.S. government is considering two dramatic steps to turn around, or at least slow, the damage: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits. The moves, which would mark the government's most extensive intervention to date, are in discussion stages only.
- Credit stays frozen. As frozen credit markets refuse to thaw, the cost of default protection on corporate bonds reaches new global records amid investor concerns the credit crisis will trigger corporate failures as companies struggle to finance their businesses. Interbank lending remains limited, and borrowing from the Fed's expanded discount window continued its trend of setting new highs every week, as the total daily average rose to $420.2B vs. $367.8B last week.
- Oil demand withers. The International Energy Agency warned Friday worldwide oil demand...
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- Jim Cramer's Picks -SampleBetter Choices - Cramer's Lightning Round (10/15/08)by SA Editor Rachael GranbyStocks discussed in the lightning round session of Jim Cramers Mad Money TV program,
Wednesday, October 15.Bullish Calls:Continental Resources (CLR) -- "This is a remarkable decline. All of the high quality ones are down so much, I can't go against it. This is where you pull the trigger.
3M (MMM) -- The moment this stock starts yielding 5%, I'm a buyer. Until then, keep your powder dry.Bearish Calls:Computer Sciences (CSC) -- This is a company that was going to be bought, but they passed up the chance. Now I don't want to buy it."Email continues...
Annaly Mortgage (NLY) -- I think this is a business model that needs to borrow money. Definitively do not buy."
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Why Mining & Metal Investments Could Shine in the Coming Years
Why Mining & Metal Investments Could Shine in the Coming Years
Proof it.
OPEC's Move to Devalue the Euro
(Emphasis mine)
This is just such a nice string of hollow words. Perhaps OPEC should actually MEASURABLE INCREASE oil producton, instead of uttering words. Stop the talk, start the walk you puppets!
Mid-Year Picks and Pans From Barron's Roundtable Part II
In 2008: Oil at $140, DOW at 12,000.
In 26 years, oil increased 3.5 times, DOW increased 12 times! You tell me where the bubble is...
Mid-Year Picks and Pans From Barron's Roundtable
In 2008: Oil at $140, DOW at 12,000.
In 26 years, oil increased 3.5 times, DOW increased 12 times! You tell me where the bubble is...
Mid-Year Picks and Pans From Barron's Roundtable Part III
In 2008: Oil at $140, DOW at 12,000.
In 26 years, oil increased 3.5 times, DOW increased 12 times! You tell me where the bubble is...
Fed Tightening and the Gold Market
In the 70's, interest rates had to go to 15+% to derail the gold bull. Long way from that now...
Something's Smelly: Gas Prices Should Soon Reverse
Nasdaq vs. Homebuilders vs. Oil
In 1982, after a decade long run from a low of about $4, the price of oil peaked at about $40. A 10-fold increase. At the peak, the DOW/OIL ratio was at 25.
Today, oil is at about $140 coming from a low of about $10 during the late 90's, a 14-fold increase, while the DOW is at about 12100. This gives a current DOW/OIL ratio of about 86.
Although the gains of oil in the 21st century so far are much larger than during the 70's, the DOW/GOLD ratio is actually higher now, implying CHEAP OIL compared to the DOW.
Conclusions: 1) The much larger rise in the price of oil in the 21st is for a large part due to hyperinflation. 2) The DOW/OIL ratio eventually will drop to the mid 20's, implying a much higher oil price. Even with a DOW crash to say 8000, it implies an oil price of at least $300.
U.S. Market Setting Up for a 2nd Half Rally
I remember back in 2005 talking to my collegues. They were all of the opinion that hous prices could only go up. "Buy now", "you don't need much money", "just get a loan." Two years later, the housing market started crashing.
But what do I hear now when talking commodities? "Bubble, bubble, bubble." No stories from ordinary people telling me that "gold is only to go up," or "oil is only to go up, get a loan and buy gold".
I think the commodities bull market has a long way to go. But when, in the far future, I will hear my neighbor talk to me about his hot commodities investment because "it always will go up", THEN I will sell.
Compared with Canada, U.S. Economy Looks OK
Choosing Between Wall Street and Main
Example: FED prints money and hyperinflates the money supply. Next, FED buys treasuries by the boatload. As a result, yields come down.
Conclusion: money printing leads to hyperinflation, but is not reflected in the yields of treasuries.
To prove this, plot the ratio of gold divided by the price of 30 - Year treasuries, i.e. $GOLD/$USB. It is going UP, i.e. INFLATION.
Farm Bill Stands to Overhaul Retail Forex Industry
Crude Oil: Congress Acts, Iran Hoards, RTX Soars
Why would any trader or commercial keep trading via a US exchange? Might as well move the capital out of the country in invest via London or Dubai where lower margin requirements are set.
This will just lead to an even larger loss of economic dominance.
Hard Assets Heresy: Talking Down Gold