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Wednesday, April 28, 2010
Cuts to Debt Rating Stir Anxiety in Europe
Greece’s credit rating was lowered to junk status Tuesday by a leading credit agency, a decision that rocked financial markets and deepened fears that a debt crisis in Europe could spiral out of control.
The ratings agency, Standard & Poor’s, downgraded Greece’s long-term and short-term debt to non-investment status and cautioned that investors who bought Greek bonds faced dwindling odds of getting their money back if Greece defaulted or went through a debt restructuring. The move came shortly after S.&P. reduced Portugal’s credit rating and warned that more downgrades were possible. (more)
The ratings agency, Standard & Poor’s, downgraded Greece’s long-term and short-term debt to non-investment status and cautioned that investors who bought Greek bonds faced dwindling odds of getting their money back if Greece defaulted or went through a debt restructuring. The move came shortly after S.&P. reduced Portugal’s credit rating and warned that more downgrades were possible. (more)
Canada's National Debt
In 1993, the Canadian Taxpayers Federation commissioned the construction of a giant debt clock – 12 feet long by 8-and-a-half feet high – with changeable faceplates for the federal and each provincial government. The clock displayed the per-second increase in debt along with the share for each Canadian family.
Debt ClockThe clock was toured around the country and made headlines everywhere it went. The clock went into temporary retirement once the federal government balanced the budget in 1997 and began paying down the federal debt.
Now we can reach more Canadians through debtclock.ca than we could by touring around a physical debt clock. But the message hasn’t changed.
In fiscal 2008-09 the debt clock climbed by $183.92 per second, taking our federal debt up to $463,700,000,000. After April 1, 2009, the clock, and our federal debt began growing by $1,772.58 per second. That’s $106,355 per minute, $6.4-million per hour, or $153-million every day! By March 31, 2010, Canada’s federal debt will hit $519,600,000,000. (more)
Debt ClockThe clock was toured around the country and made headlines everywhere it went. The clock went into temporary retirement once the federal government balanced the budget in 1997 and began paying down the federal debt.
Now we can reach more Canadians through debtclock.ca than we could by touring around a physical debt clock. But the message hasn’t changed.
In fiscal 2008-09 the debt clock climbed by $183.92 per second, taking our federal debt up to $463,700,000,000. After April 1, 2009, the clock, and our federal debt began growing by $1,772.58 per second. That’s $106,355 per minute, $6.4-million per hour, or $153-million every day! By March 31, 2010, Canada’s federal debt will hit $519,600,000,000. (more)
Barbara Hollingsworth: Fannie Mae owns patent on residential 'cap and trade' exchange
When he wasn't busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the "green" movement were inventing a patented system to trade residential carbon credits.
Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 -- the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had "nothing to do with Fannie Mae's charter, nothing to do with making mortgages more affordable." (more)
Barbara Hollingsworth: Fannie Mae owns patent on residential 'cap and trade' exchange
When he wasn't busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the "green" movement were inventing a patented system to trade residential carbon credits.
Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 -- the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had "nothing to do with Fannie Mae's charter, nothing to do with making mortgages more affordable." (more)
Silver-Mining ETF Emerges as Latest Niche
Mining stocks got support as GlobalX Funds started selling the GlobalX Silver Miners ETF(SIL).
It's the latest in a flurry of mining-stock exchange traded funds, which include the Market Vectors Junior Gold Miners ETF(GDXJ) and the First Trust ISE Global Copper Index Fund(CU). GlobalX also has a new copper fund with its Copper Miners ETF(COPX). The company has the silver category all to itself for now.
Canada accounts for 58% of the ETF, Mexico, 24%, the U.S., 10%, and Russia and Peru, 4% each. Many of the Canada-based companies have much of their operations in South or Central America. (more)
It's the latest in a flurry of mining-stock exchange traded funds, which include the Market Vectors Junior Gold Miners ETF(GDXJ) and the First Trust ISE Global Copper Index Fund(CU). GlobalX also has a new copper fund with its Copper Miners ETF(COPX). The company has the silver category all to itself for now.
Canada accounts for 58% of the ETF, Mexico, 24%, the U.S., 10%, and Russia and Peru, 4% each. Many of the Canada-based companies have much of their operations in South or Central America. (more)
Oil Volatility Sinks as Shortage Concern Eases: Energy Markets
Crude oil volatility is falling to the lowest level in almost three years as brimming stockpiles and rising OPEC investment in production capacity eases concern of shortages.
Oil’s 50-day historical volatility, a measure of how much crude fluctuates around its average price during that period, declined to 23 percent yesterday, the lowest since July 2007. The measure rose to a record 108 percent at the beginning of 2009 as prices collapsed following the demise of Lehman Brothers Holdings Inc. and the onset of global recession.
The Organization of Petroleum Exporting Countries said it is planning 140 oil projects over the next five years and that its 6 million barrels a day of unused production is enough to meet demand and avoid a repeat of the price swings of 2008. U.S. crude stockpiles rose to 356 million barrels on April 2, the highest since June, and inventories held on ships are climbing, according to Morgan Stanley. (more)
An illegal bank is the second-largest holder of U.S. treasury securities
From the U.S. Treasury Department’s latest numbers of major foreign holders of treasury securities, we see that China owned $877.5 billion and Japan owned $768.50 billion in February 2010.
From their historical data, we see that China overtook Japan as the largest foreign holder of treasury securities as recently as September 2008, the month that the world’s economic system was thrown into turmoil by the collapse of Lehman Brothers and the stock and real estate market.
However, Japan isn’t the second-largest holder of U.S. treasury securities — the privately owned Federal Reserve Bank of New York is. That is, one of the 12 member banks of the illegal privately owned Federal Reserve System of the United States.
From their official numbers on April 21, 2010, they owned $771.57 billion in U.S. treasury securities — $3 billion more than Japan did in February. (more)
From their historical data, we see that China overtook Japan as the largest foreign holder of treasury securities as recently as September 2008, the month that the world’s economic system was thrown into turmoil by the collapse of Lehman Brothers and the stock and real estate market.
However, Japan isn’t the second-largest holder of U.S. treasury securities — the privately owned Federal Reserve Bank of New York is. That is, one of the 12 member banks of the illegal privately owned Federal Reserve System of the United States.
From their official numbers on April 21, 2010, they owned $771.57 billion in U.S. treasury securities — $3 billion more than Japan did in February. (more)
11 cities of the 20-city index saw year-over-year declines
“Further,” notes S&P’s David Blitzer, “in six cities, prices were at their lowest levels since the prices peaked three-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering.” This chart might be a better representation of what’s really happening… that year-over-year gain looks pretty silly plotted this way:
In all, 1.8 million buyers have taken advantage of these $8,000 free tax credits, at an expense of $12.6 billion to the US Treasury. Those numbers are just through February.
That program is supposed to expire this Friday. The National Association of Realtors (NAR) estimated last week that 44% of March homebuyers would NOT have purchased a home without the credit. That doesn’t bode well for the rest of 2010. Agora Financial
Hunting for the Next Gulf Gusher
Between its acquisition of Devon Energy's (NYSE: DVN) shelf properties and its takeover offer for midsized Mariner Energy (NYSE: ME), Apache (NYSE: APA) sure made some big waves in the Gulf of Mexico this month.
The moves prompted me to assess how ATP Oil & Gas (Nasdaq: ATPG) stacks up from a comparable valuation perspective. ATP Oil & Gas shareholders are far from the only ones wondering whether they're sitting on the next Gulf gusher, however. A reader asked me to opine on W&T Offshore (NYSE: WTI), and I'm happy to oblige.
If you're not familiar with W&T Offshore, this is a company that's focused on the Gulf of Mexico shelf. Of the company's top 10 fields at year's end, only one was out in the deepwater. W&T Offshore recently reported holding an interest in 77 producing fields spread across the Gulf, so its asset base is far less concentrated than that of ATP Oil & Gas or Contango Oil & Gas (AMEX: MCF). Production is 53% natural gas-weighted, and clocks in at around 220 million cubic feet equivalent (Mmcfe) per day. Reserves dropped to 371 billion cubic feet equivalent (Bcfe) last year, largely on account of low average gas prices. (more)
The moves prompted me to assess how ATP Oil & Gas (Nasdaq: ATPG) stacks up from a comparable valuation perspective. ATP Oil & Gas shareholders are far from the only ones wondering whether they're sitting on the next Gulf gusher, however. A reader asked me to opine on W&T Offshore (NYSE: WTI), and I'm happy to oblige.
If you're not familiar with W&T Offshore, this is a company that's focused on the Gulf of Mexico shelf. Of the company's top 10 fields at year's end, only one was out in the deepwater. W&T Offshore recently reported holding an interest in 77 producing fields spread across the Gulf, so its asset base is far less concentrated than that of ATP Oil & Gas or Contango Oil & Gas (AMEX: MCF). Production is 53% natural gas-weighted, and clocks in at around 220 million cubic feet equivalent (Mmcfe) per day. Reserves dropped to 371 billion cubic feet equivalent (Bcfe) last year, largely on account of low average gas prices. (more)
Chart of the Day: US Housing Prices
The Case-Shiller 10-city index is up 1.6% since February of last year. The 20-city has risen 0.6%.
An ETF to Play the Gold Miners
For investors expecting the gold miners to report strong first quarter earnings this week, now is the appropriate time to gain exposure to gold through the miners.
Newmont Mining(NEM) will report earnings Tuesday, while Goldcorp(GG) and Barrick(ABX) report on Wednesday. Combined, these companies account for 38% of the net assets of Market Vectors Gold Miners ETF(GDX).
Last earnings season, the reports from these top components of GDX were spread out over the course of almost a month, with a week or more separating each company's announcement. All three companies beat estimates, but the impact on GDX was minimized due to the timing of the reports. This time around, the effect of the reports on GDX will be more direct. (more)
Newmont Mining(NEM) will report earnings Tuesday, while Goldcorp(GG) and Barrick(ABX) report on Wednesday. Combined, these companies account for 38% of the net assets of Market Vectors Gold Miners ETF(GDX).
Last earnings season, the reports from these top components of GDX were spread out over the course of almost a month, with a week or more separating each company's announcement. All three companies beat estimates, but the impact on GDX was minimized due to the timing of the reports. This time around, the effect of the reports on GDX will be more direct. (more)
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