Unleveraged Oil and Gasoline ETFs and ETNs

• iPath S&P GSCI Crude Oil Total Return Index ETN (OIL)
• PowerShares DB Oil Fund ETF (DBO)
• PowerShares DB Crude Oil Long ETN (OLO)
• United States Gasoline Fund, LP ETF (UGA)
• United States United States Heating Oil Fund, LP ETF (UHN)
• United States Oil Fund, LP ETF (USO)
• United States 12 Month Oil Fund, LP ETF (USL)

Unleveraged Mixed Agricultural Commodity ETFs and ETNs

• E-TRACS UBS Bloomberg CMCI Agriculture Index ETN (UAG)
• E-TRACS UBS Bloomberg CMCI Food Index ETN (FUD)
• iPath Dow Jones-AIG Agriculture Subindex Total Return ETN (JJA)
• iPath Dow Jones-AIG Grains Subindex Total Return ETN (JJG)
• iPath Dow Jones-AIG Livestock Subindex Total Return ETN (COW)
• iPath Dow Jones-UBS Softs [coffee, cotton and sugar] Subindex Total Return ETN (JJS)
• MLCX Biofuels Index ELEMENTS ETF (FUE)
• MLCX Grains Index ELEMENTS ETF (GRU)
• PowerShares DB Agriculture Fund ETF (DBA)
• Rogers International Commodity Index – Agriculture ELEMENTS ETN (RJA)

Unleveraged Gold ETFs and ETNs

• E-TRACS UBS Bloomberg CMCI Gold Total Return ETN (UBG)
• ETFS Physical Swiss Gold ETF (SGOL)
• iShares COMEX Gold Trust ETF (IAU)
• PowerShares DB Gold Fund ETF (DGL)
• streetTRACKS Gold Shares ETF (GLD)

The panelists are three SA contributor portfolio managers who use ETFs in client portfolios and write actively on new developments in the field of exchange traded funds. Here are the panelists, their credentials and a preliminary writeup from each of them with their views on leveraged ETFs:

Treasuries posted big long end-led losses in the past week after two weeks of gains to low yields since May when the market violently reversed course late in the week following a somewhat softer, but certainly not terrible, 30-year auction that wrapped up the latest flood of supply. After having gotten progressively longer and more and more into flatteners for a while recently into the 30-year auction, the less-than-stellar results ended up driving a fair amount of lightening up of both outright and curve positions ahead of the long weekend. Fundamentally the week's backdrop certainly also supported a correction, but as long as the auctions, the week's main market focus, were coming in so strongly, this was being ignored. The economic data calendar was light but quite positive in what was released, helping to ease some of the concerns raised by the prior week's run of more negative numbers. A back-and-forth pattern in the tone of the incoming data like the past couple weeks could become the norm for a while if, as we expect, the economy has moved into a sustainable but modest and bumpy recovery.

• • •

Right now two sets of opportunities are very compelling. First, many deep value stocks, with good business models that generate substantial cash flow and are undervalued, have failed to rally significantly in the past months. The reason is that most of these stocks are not only under-followed but also had small short interests, and so did not benefit from the rally to the same extent as some lower-quality names. This is a very compelling opportunity and we are working flat out on some of these names.

Baidu's overwhelming dominance comes down to Google's woeful ineptness at adjusting to Chinese market realities. Google entered the Chinese market and treated it like any other. But, from the beginning, Baidu operated as a Chinese company, using Chinese strategies and tailoring itself for Chinese needs. Thus, in terms of dealing with the government, popularizing the brand, making sales, and offering the masses what they want, Baidu bests Google.

Today’s lack of appropriate anchoring frameworks appears to be exacerbating short-termism. The issue goes well beyond the still-limited appreciation of the multi-year realignment of the global economy, which is gaining momentum. It also relates to tendencies well-documented by behavioral economists – such as framing the problem wrongly and refusing to question past approaches.

• Citigroup looks to cut U.S. stake. Sources say Citigroup (C) is working on a plan to pare the government's 34% stake in the bank, including a multibillion-dollar public stock sale followed by a buyback of some of the government's shares. Citi spoke briefly with the Treasury over the weekend, which said it has no objections as long as the bank first raises offsetting capital. Any move would give a clearer picture of how the government plans to balance its desire to wind down financial system intervention against its continued concerns over the health of the banking industry.
• Judge blocks $33M settlement. U.S. District Court Judge Jed Rakoff told the SEC and Bank of America (BAC) their proposed $33M settlement over the lack of disclosure of $3.6B in bonuses just before BofA's merger with Merrill Lynch was "neither fair, nor reasonable, nor adequate." Judge Rakoff demanded the case be tried in court, calling their proposed consent judgement "a contrivance designed to provide the S.E.C. with the facade of enforcement and the management of the Bank with a quick resolution of an embarrassing inquiry - all at the expense of the sole alleged victims, the shareholders." (see Judge Rakoff's order (.pdf))
• Obama says they can. Speaking to Wall Street Monday, U.S. President Barack Obama told financial leaders to expect new regulations. Potential new rules include: a new consumer financial protection agency, higher capital requirements for banks and a systemic risk regulator. Obama also said that the necessity for bailouts are waning, and that the financial sector is showing improvement. Still,the president stressed that the lessons from the past year must not be ignored.
• Lacker says bank reforms miss mark. Richmond Fed president Jeffrey Lacker pushed back against proposed changes to financial system regulation, saying in a speech Monday that creating an apparatus for the government to 'resolve' big financial firms without forcing them into bankruptcy could weaken market discipline and lead to greater volatility. "The leading proposals before Congress concentrate almost exclusively on expanding government protection and regulation, but I believe we would be better off placing greater reliance on market-based incentives for prudent risk management," Lacker said.
• Lilly slashes costs, jobs. Eli Lilly (LLY) announced Monday it will cut company costs up to $1B, including eliminating 5,500 jobs over the next two years. The company plans to restructure several of its business units in response to generic competition to its antipsychotic drug Zyprexa, as well as its 2008 purchase of ImClone Systems.
• Avaya takes the call. Nortel’s corporate networking unit will be acquired by privately-owned Avaya for $915M, over Verizon's (VZ) objections. Nortel, which went into bankruptcy in January, decided selling off its main businesses was a better option for creditors than trying to reorganize. The sale follows Ericsson AB's (ERIC) purchase of Nortel's wireless business in July of this year.
• EU wants details on GM loan. The EU Commission has asked Germany for the country's formal plan to inject €3B ($4.38B) in loan gurantees to GM's European Opel unit. Meanwhile, a meeting today between German and European government officials over state aid for the new company is unlikely to produce any results because the buyer, Magna (MGA), has yet to submit a detailed business plan. The turnaround may include cutting over 10,000 jobs.
• So goes the year. Today marks one year following the collapse of Lehman Brothers, and risk appetite is back, with five U.S. banks recently reporting large gains from their trading desks. While some argue that recovery is clearly on the way as China's economy grows, others warn investors should not count on government bailouts for future growth.
• Elan, J&J fix JV. Elan (ELN) dropped the value of its $1.5B deal with Johnson & Johnson (JNJ) by $115M after a ruling earlier this month that its terms violated Elan and Biogen Idec's (BIIB) partnership over their MS drug Tysabri. Under the original deal, J&J had the option of financing Elan's purchase of Biogen's stake in Tysabri under certain circumstances; the new deal eliminates this clause.
• ING hits roadblock on government aid. Shares of ING Group (ING) fell 3.8% in Amsterdam following media reports saying European Competition authorities will reject the Dutch government's €22B guarantee of ING's U.S. Alt-A portfolio over concerns the terms may be too sweet. Analysts say ING could have to pay €1-1.7B more if the deal is rejected.
• Genworth seeks $500M: Genworth Financial (GNW) fell in AH trading Monday after saying it's looking to raise $500M in an offering led by Goldman Sachs (GS), BofA Merrill Lynch (BAC) and Deutsche Bank (DB). Shares will be diluted as a result, but some analysts say after five consecutive quarterly losses, totaling more than $2B, it's a good sign that the company is in the position to issue at all.

Today's Markets

Overseas stocks posted modest gains Tuesday, while U.S. futures are down a drop ahead of today's retail sales data (full calendar).

• Asia: Nikkei +0.15% to 10,218. Hang Seng -0.31% to 20,866. Shanghai +0.23% to 3,034. BSE +1.48% to 16,454.
• Europe at midday: London +0.2%. Paris +0.3%. Frankfurt -0.1%.
• Futures at 7:00: Dow -0.1% at 9542. S&P -0.1% to 1042. Nasdaq -0.1%.
  Crude +0.6% to $69.28. Gold flat at $1001. 30-year Tsy -0.08%.
  Euro -0.1% vs. dollar. Yen -0.5%. Pound -0.5%.

Tuesday's Economic Calendar

7:45 ICSC Retail Store Sales
8:30 Producer Price Index
8:30 Retail Sales
8:30 Empire State Mfg Survey
8:55 Redbook
10:00 Business Inventories
5:00 PM ABC Consumer Confidence Index

Which position do you find more convincing? And what does this debate mean for one's investments: How, if it all, should you brace your portfolio for Laffer's hyper-inflation scenario?

Pandemic: H1N1 Is Back

Oil Prices Surging

What's Left for Citi to Do?

Certain Banks Are Still Broke by James Bibbings

10 Banks Giving Back to TARP

The Case for Allowing TARP Repayments by Felix Salmon

How TARP Paybacks Expose Weakest Banks by Rick Newman

Apple Conference Reports

Apple Is Still Giving Its Competitors Headaches by Chris Krasowski

iPhone: Smartphone War Just Got Hotter by Bruce Everiss

PIMCO Enters the ETF Fray (Finally)