Minlita

Can the U.S. Save the World? (House Testimony)

What about China?
- No toxic assets
Economists say that China's financial sector is just primitive enough to have prevented its banks from getting burned by buying complicated and ultimately toxic subprime mortgage products and derivative securities.
- Price of commoditys are falling
China's export-driven economy will suffer in a global slowdown, but commodity price are falling, thus reducing the price of manufacturing.
- Makes high-end produts that US buy in Wal-Mart.
China makes the things you buy in Wal-mart and people are still shopping there, so China that produces high-end goods will not be very affected.
- Strong resources
China's resources are strong enough to ensure its own economy

Uranium: An Under-the-Radar Bull Market

The simplest play on uranium is to buy the metal, buy shares of Uranium Participation Corporation (U.TO), a corporation that stores uranium at power plants, and U.TO is linked to the price of uranium
U.TO website: www.uraniumparticipati.../

The real value is in the metal (not in the explorer stock) , so when you buy a share in stored uranium the metal exists and all risks are already dealt with, you just have to worry about the commodity fundamentals (not country or company risk like the risk of the discovery not being as good as hoped).

What Does Dr. Copper Think of the Economy?

This is a great video from Nassim Taleb:
Gold, Copper Could Rally “Massively’
www.youtube.com/watch?...

Copper is used in products and, with manufacturing stalling across the globe, demand (and thus prices) will likely drop or remain relatively stable during this crisis.

Fed Watch: Green Shoots Notwithstanding, Odds Favor More Easing

I think people are relieved that the new Administration is competent. That gives them a kind of long run confidence that the decline will eventually hit bottom.
I don't think they are confident in a recovery

Stock Returns by Sector and Market Cap

- The S&P gained just over 8% for April and the best performing
sectores for the month were Financials (+ 17.5%) and Retai (+ 16%), Health Care were (slightly) negative and Consumer Staples and Utilities also under-performance.
- Last month there us a large volume of buyers and small amount of
puts trading, meaning that fund managers are now buying seeking for returns and loosening up their hedges.
- The Conference Board Consumer Confidence Index increases in April meaning more people are buying therefore sell and earning are up.
www.conference-board.o...

Stock Returns by Sector and Market Cap

The S&P gained just over 8% for April and the best performing sectores for the month were Financials (+ 17.5%) and Retai (+ 16%) Health Care were (slightly) negative and Consumer Staples and Utilities also under-performance.
Last month there us a large volume of buyers and small amount of puts trading, meaning that fund managers are now buying seeking for returns and loosening up their hedges.

The Conference Board Consumer Confidence Index increases in April meaning more people are buying therefore sell and earning are up.
tp://conference-board.org/e...

Hotels Are Blessed: Ignore the News

Fears of the swin flu are unlikely to help the already in recession U.S. tourism industry.
Airline, hotel, cruise Lines, casinos and gambling shares can be affected.

People are afraid and that keeps tehm from traveling or congregating indoors with lots of strangers is bad for tourism and hotels, so they stay home.

Some stocks that can be affect are:
- Carnival (CCL) - plenty of sailing due to global economic downturn and for the fact that dollar has gained in strength and demand has dropped, the company canceled Mexico stops for 3 ships.
- MGM Mirage (MGM)
- Marriott (MAR)
- Las Vegas Sands (LVS)
- Boyd Gaming (BYD)
- US Airways (LCC)
- Alaska Airlines (ALK)
- Delta (DAL)
- Continental (CAL)
- Walt Disney (DIS)

Hotel and airlaines shares suffered selloffs in the immediate wake of the swine flu news.

Monday The European Union’s health commissioner told Europeans if possible to avoid traveling to the U.S. or Mexico.
And suggested avoiding areas where large groups of people congregate (like hotels) .

So IMO let's wait and see how this swine flu scare evolves befor buying large amount of stocks in the tourism industry

Equities Are Likely Heading Lower: Resist the Temptation to Short Them

"Author also holds U.S. dollars by necessity"

LOL buy what you are going to need in the future (food and supplies) right now while your dollars still have some value.

We all know that any major currency not backed by gold in the history of the world has eventually failed, and the actions currently taken by the U.S government and by the FED will lead the dollar to a collapse too.

This chart from the FED shows the U.S. monetary base from 1960 untill 2009, currency in circulation just exploded since 2008:
3.bp.blogspot.com/_b3G...

And inflation acts like a tax so you make some good money now, you buy less then you could buy before.

Gold Up Sharply as the Bear Market Rally Falters

Gold does well in periods of high economic stress (deflation, stagflation, hyperinflation, and periods of prolonged credit stress) and we are in a period of extreme credit stress.
The ratio of silver to gold is 75:1, so silver has some catching up to do, go long silver too.
Also China is buying GOLD and sell BONDS www.marketwatch.com/ne...={7EDBF160-456B-46AD-B...

Book Review: When Giants Fall, by Michael Panzer

In the book the American age is over and it provides a perspective on the coming age, what it will mean for the U.S., and the economic opportunities that will derive from it.
Yes, there are areas of the world that might actually offer the promise of investment opportunities-countries such as Canada, Brazil, Mexico, New Zealand, Thailand, and Vietnam.
What makes the book remarkable is that 35 year veteran of the global stock, bond, and currency markets, a faculty member at the New York Institute of Finance, is forecasting the collapse of empire and the daunting challenges, not exclusively economic, of a post-industrial world. In this moment, we are witnessing the rapid decline of that world in the form "great wealth destruction."

Book Review: When Giants Fall, by Michael Panzer

The Video:
Presentation by Michael J. Panzner, the author of When Giants Fall (and the 2007 best-seller, Financial Armageddon) vimeo.com/3843644

Dividend Stocks to Avoid

I like companies that pay dividend from 7% to 12% but first we must determine the stock value, and buy only some we belive to have some groth in the future, for that we have look for stocks that have:
- Good financial position
Find how the company is using the money, and what the financial trends look like (see balance sheet and income statement in particular Management/Profitability ratios)
- Management team who is doing good
A way to determine how the management is doing is looking through the profitability ratios vs. those of their peers.
- Have a strong brand name or that consistently have a competitive advantage over related companies.
This keeps other businesses from getting into the sector and makes the stock worth more in the long time.
- Growth
The stock growth that must be factored into a price/earnings ratio.
- Future earnings raising
A company that as products coming out, cash flows raising, return on assets or return on investment raising

Why High Inflation Will Not Take Hold

Bailout money is being used by the banks to trade the market up in attempts to pretty up their financial outlook (and others) so they can raise more cash.
Inflation it’s going from the goverment to the banks and into the stock market. It hasn’t made its way to the economy….yet.
Does it even make any sense to fight it at this point but inflation but we it will end someday and end very badly.
Stock markets are in a rally for a long time, but the stock market doest runs on it’s own rules, we have to look to the underlying health of the business behind the stock, for national and world wide economic fundamentals they provide large influence.

Is China the Next Great Bubble?

GS forecasts predict real GDP growth of 8.3% in 2009 (versus 6.0% previously) and, that it will reach 10.9% in 2010 (up from 9.0%). These figures are significantly above consensus.
According to the team, the forecast was revised higher as
1) Chinese policy stimulus has been more aggressive
2) Domestic demand response has been stronger and has occurred earlier than originally forecast. They expect above-trend growth in 2010 to be largely driven by stronger investment growth, especially from private investment.
3) GS expect stabilization in domestic unemployment and external demand.
www.investmentpostcard...
4) China is building gold reserves, last time China disclosed this information was 2003 when had 600 tonnes, so this move to 1,054 is large in magnitude but spread over 6 years since the last update .
China boosted its gold reserves by 76 percent since 2003 and has the world’s fifth-biggest holding by country.
By purchasing from domestic producers, China demonstrated that it has the ability to acquire substantial amounts of gold in a way that is difficult for the international market to track and therefore not disruptive to prices reserves

Bootom line:
IMF is selling gold and Asian central banks are buying (diversifying into gold) Asian central banks, in times of dollar uncertainty and the global volatility in the forex market gold is a safe warbor.
So China doesent the money internally to finance its continued growth.

Is a Copper Bubble Now Forming?

A lot of analysts have been watching copper for signs of life that
might signal an early recovery is in the works and now it´s prove that copper prices, having been in an uptrend (just take a look at the Cooper futures).
The weak dolar is good for copper and other commodities, so keep cooper futures in the radar to see if buyers are holding or not these levels as the market expectes.