Thursday, August 25, 2011

Breaking: Steve Jobs Resigns As CEO Of Apple: AAPL

Silicon Valley legend Steve Jobs on Wednesday resigned as chief executive of Apple Inc in a stunning move that ended his 14-year reign at the technology giant he co-founded in a garage.

Apple shares dived as much as 7 percent in after-hours trade after the pancreatic cancer survivor and industry icon, who has been on medical leave for an undisclosed condition since January 17, announced he will be replaced by COO and longtime heir apparent Tim Cook.

Analysts do not expect Jobs’ resignation — which had long been foreseen — to derail the company’s fabled product-launch roadmap, including possibly a new iPhone in September and a third iteration of the iPad tablet in 2012.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come,” he said in a brief letter announcing his resignation.

The 55-year-old CEO had briefly emerged from his medical leave in March to unveil the latest version of the iPad and later to attend a dinner hosted by President Barack Obama for technology leaders in Silicon Valley.

Jobs’ often-gaunt appearance has sparked questions about his health and his ability to continue at Apple.

“I will say to investors: don’t panic and remain calm, it’s the right thing to do. Steve will be chairman and Cook is CEO,” said BGC Financial analyst Colin Gillis.

Apple shares slid to $357.40 in extended trading after a brief halt. They had gained 0.7 percent to close at $376.18 on the Nasdaq.

Analysts again expressed confidence in the Apple bench, headed by longtime company No. 2 and supply-chain maven Cook.

“Investors are very comfortable with Tim Cook even though Jobs has been a driver of innovation and clearly an Apple success. Tim has shown Apple can still outperform extremely well when he’s been acting as CEO,” said Cross Research analyst Shannon Cross.

“I don’t know if it’s a health issue. I don’t know if it is a shock. Most likely it was going to happen at some point. Why today versus another day? I don’t know.”

And There's Your Perfectly Leaked Explanation: CME Hikes Gold Margins, Again, This Time By 27%

Two weeks after the CME hiked gold margins by 22%, and two days after the Shanghai Gold Exchange sent them higher by 26%, here comes the CME, as we expected, with another 26% gold margin hike (previously: "Should we expect 3 more SGE margin hikes in the next 2 weeks? Or will the CME rightfully accept the baton and do everything in its power to dent the parabolic rise in the alternative reserve currency? We are cautiously looking at what the CME will do today and will advise readers."). And now we know that this particular margin hike was leaked well in advance, and explains the entire $100 plunge in gold today. And as a reminder, the August 1 CME margin hike worked... for about 30 minutes.

CME Gold 8.24

Gold (GLD) bubble pops: Where to put your money now? (JNJ, BMY)

As Gold prices post a triple digit fall today, I find myself asking this question: Where is the next safe-haven? Funds are being diverted from Gold to other investment instruments - and I want to get in there quick before the next bubble forms.

Some say smart investors are going to get into Silver (SLV), however, I think the metals are played our right now. Another option is T-bills or cash, but obviously with interest rates as low as they are now, money manager will not be able to beat the S&P 500 on these meager returns.

Personally, I think there is going to be a big influx of money back into equities. Where else to go but safe-haven dividend paying stocks such as Johnson & Johnson's (JNJ) 3.48% dividend yield and Bristol-Myers Squibb Co (BMY) 4.57% yield?

Johnson & Johnson (JNJ) shares have traded between $56.99 and $68.05 over the past 12 months. J&J shares are now trading with a P/E Ratio of 15.6 and EPS of 4.18. Johnson & Johnson 's (JNJ) shares closed at $65.57 today and are 4% from its 52-week high.

Over the past 12 months Bristol-Myers Squibb Co (BMY) shares have traded between $24.97 and its 52-week high of $29.73. Bristol-Myers shares are now trading with a P/E Ratio of 14.9 and EPS of 1.92. BMY shares closed today at $28.93 and are 3% off its 52-week high.

McAlvany Weekly Commentary

David McAlvany in Argentina: Protect Yourself from the Horrible Consequences of Government Mismanagement

A Look at This Week’s Show:
- Argentina was once an engine of economic prosperity that destroyed itself with debt and worthless currency (multiple times).
- The United States will not outright default on it’s debt but can and will print it’s way to the same outcome.
- The current debt market crises cannot be isolated from the much larger derivative leviathan.

Top 5 Closed End Funds with the Biggest Discount to their NAV: BTF, BIF, ZTR, RMT, CAF

Unlike an open-end fund, a closed-end fund issues a fixed number of shares during an initial public offering after which these shares are traded on a stock exchange or over the counter. Thus, shares of this type of fund are bought and sold at the market price instead of the securities’ underlying value. This may create a situation where the market price is lower than the net asset value of its components which means that there is a discount to net asset value (NAV). Due to the serious market decline many high quality closed end funds are now selling at a huge discount to their net asset value. Below we will share with you 5 Closed End Funds with the Biggest Discount to their (NAV).

Mutual Fund

Current Discount to NAV

Boulder Total Return


Boulder Growth & Income


Zweig Total Return


Royce Micro-Cap Trust


Morgan Stanley China A Share


Boulder Total Return (BTF) invests heavily in common stocks of utilities, real estate investment trusts and regulated investment companies. The fund also purchases fixed income instruments such as bonds and preferred stocks. The fund focuses on acquiring domestic securities, but it may also invest in foreign stocks and sovereign debt

The fund has net assets of $206.4 million and as of May 2011, 25.8% of its total assets were invested in Berkshire Hathaway Inc. A. The fund has an expense ratio of 2.19%

Boulder Growth & Income (BIF) seeks both capital growth and current income. The fund invests in both common stocks and income producing securities. At least 25% of its assets are invested in real estate investment trusts and companies. It may also invest in other closed ended income funds such as bond funds

The fund has net assets of $ 175.7 million and as of May 2011, 24.5% of its total assets were invested in Berkshire Hathaway Inc. A. The fund has an expense ratio of 2.19%

Zweig Total Return (ZTR) invests half of its total assets in equity and the other half in fixed income instruments. The fund focuses on investing in large cap companies, but may also invest in small and mid-cap firms. It may also invest 75% of its total assets in equity securities under specific circumstances.

The fund has net assets of $521.1 million and as of March 2011, 12.41% of its total assets were invested in US Treasury Bill. The fund has an expense ratio of 1.12%

Royce Micro-Cap Trust (RMT) focuses on investing in firms with market capitalizations less than $500 million. The fund invests across many sectors such as consumer products, diversified investment companies, consumer and financial services.

The fund has net assets of $258 million and as of June 2011, 13.93% of its total assets were invested in State Street Bank & Trust Company. The fund has an expense ratio of 1.10%

Morgan Stanley China A Share (CAF) seeks capital appreciation. The majority of the fund’s assets are invested in A-shares of Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges. It may also invest in a variety of structured instruments.

The fund has net assets of $585.1 million and as of June 2011, 9.89% of its total assets were invested in Tsingtao Brewery Co., Ltd. The fund has an expense ratio of 1.78%

Giant Technology Stocks Are Now Too Cheap (AMAT, CSC, GLW, DELL, HPQ, INTC, KLAC, LRCX, MSFT, MU, SNDK, WDC)

The sell-off and market volatility have made it difficult for many nervous investors to either stand pat or even to stay interested in the market when they are more interested in vacations, getting ready for back to school, or even looking for career opportunities. Hard times bring great opportunities. It is exactly times like this that new millionaires are made by picking great undervalued investments. The reality is that there are some incredible opportunities for value investors out there waiting for investors right now.

Value for the sake of value may never seem like a true catalyst on the surface. In fact, it usually requires an outside economic event or an internal event that creates that next catalyst. All value investors know two things for long-term picks: first is that the value has to be cheap enough to be worth what may be a very long wait, and second is that when the catalyst arises much of that great opportunity may have already been missed. The town crier may be telling you that many of the great tech stocks are just too cheap today, even if there is a lack of catalysts and even if there is no assurance that the absolute bottom has been seen in the market. One upcoming catalyst could be the calendar: investors have historically preferred to buy technology shares shortly ahead of the fourth quarter.

The old rule of thumb is that stocks should trade at roughly 15-times earnings, with a premium or discount applied to growth and to certain industries. That number may be 12-times or 13-times earnings now. Most value investors also use 3.0-times book value as the basic line for “value.” 24/7 Wall St. has found 12 great technology giants at steep market discounts that are all rather well-known with long histories, they trade at less than 10-times current earnings, they also trade at less than 10-times forward earnings, they have large cash balances, most are at very low multiples of book value, and they are all down considerably from recent highs and highs of the past five years.

The late-summer technology value picks are as follows: Applied Materials Inc. (NASDAQ: AMAT); Computer Sciences Corporation (NYSE: CSC); Corning Inc. (NYSE: GLW); Dell Inc. (NASDAQ: DELL); Hewlett-Packard Co. (NYSE: HPQ); Intel Corporation (NASDAQ: INTC); KLA-Tencor Corporation (NASDAQ: KLAC); Lam Research Corporation (NASDAQ: LRCX); Microsoft Corporation (NASDAQ: MSFT); Micron Technology Inc. (NASDAQ: MU); SanDisk Corporation (NASDAQ: SNDK); and Western Digital Corporation (NYSE: WDC).

Looking for value is usually tricky as there is generally a reason for such a low valuation. Earnings that make up that P/E might not live up to expectations, cash reserves can be chewed up, analysts often change their targets and many fail to trust that the value is reflecting uncertainty in the markets. This will show you the good and the bad in these uncanny technology values.

Applied Materials Inc. (NASDAQ: AMAT) is the king of chip cap-ex and it carries a $15 billion market value. The company usually trades with a lower-than-market earnings multiple, but as the leader this one has always managed to come back. The stock trades at only about 9.6-times current earnings and trades at about 8.7-times forward earnings. It also trades at only about 1.8-times book value, it carries little long-term debt, and its cash and investments are listed as being close to $4.6 billion combined. It also carries a 3% dividend yield. At $11.44, the 52-week trading range is $10.27 to $16.93 and this was above $22 back in 2007 and shares went under $9.00 at the selling zeniths of late-2008 and early-2009. (more)

Louise Yamada - Gold & Silver Still Solid But Avoid Stocks

With continued volatility in gold, silver and the stock market, King World News interviewed legendary technical analyst Louise Yamada to see where things are heading from here. When asked about the action in gold Yamada responded, “Well, I think the most telling aspect of it is that you’ve had quite a decline in the equity markets and for the first time gold hasn’t responded on the downside, so you weren’t getting margin calls in gold. Seems like people are taking money and putting it into gold as a protective measure this time.”

Louise Yamada continues: Read More @

TD raises possibility of recession in Canada if U.S. economy disappoints

The Canadian economy ground to a halt in the second quarter and could slip into recession if the United States weakens more than expected, TD Bank said Wednesday.

TD chief economist Craig Alexander said the bank expects the U.S. economy to narrowly avoid a recession in the coming quarters, but if the forecast is wrong that could spell trouble for Canada.

"I'm sorry, but Canada is just along for the ride. If the U.S. economy slumps, then the Canadian economy will experience economic weakness," he said.

"One would hope that there would be some outperformance by the Canadian economy, but it can't be guaranteed.

Alexander noted that consumers held up remarkably well during the last recession, but that may not be the case a second time as many are saddled with debt.

In its economic update Wednesday, TD Bank estimated zero growth for Canada in the second quarter which ended June 30, but noted that there's a reasonable chance the economy actually shrank in the spring quarter.

Economists define a recession as two consecutive quarters in which real gross domestic product shrinks.

Last week, Bank of Canada governor Mark Carney acknowledged the Canadian economy was growing at a slower pace than the central bank had expected earlier this year, but noted that he did not expect a return to recession here or in the United States.

Carney said the Bank of Canada continues to expect that growth will accelerate in the second half of the year, led by business investment and household spending.

However, the U.S. is being squeezed by a troubled housing market, weak consumer and business confidence and worries about government debt.

A wave of public sector layoffs in many cash-strapped states and corporate reluctance to hire new workers has contributed to a U.S. jobless rate of more than nine per cent, about two percentage points higher than in Canada.

The U.S. Federal Reserve has said it will keep interest rates at exceptionally low levels for another two years to help spur growth.

Canada last slipped into recession in 2008-2009 after the Wall Street financial crisis sparked a global credit crunch that battered economies around the world and led to a huge restructuring in the North American auto sector, with the loss of tens of thousands of jobs.

Statistics Canada has said that the recession in Canada lasted from the fourth quarter of 2008 to the second quarter of 2009, but was less severe and shorter than in other G7 countries.

Between the third quarter of 2008 and the third quarter of 2009, Canada's real GDP fell 3.3 per cent, compared with 3.7 per cent in the United States and bigger declines in Europe and Japan.

TD's new economic outlook calls for the Canadian economy to grow 2.3 per cent for 2011, down from a June forecast of 2.8 per cent. TD also cut its expectations for 2012 to growth of two per cent compared with an previous estimate of 2.5 per cent.

The report came as the Conference Board of Canada said consumer confidence slipped 6.6 points to 74.7 in August, its lowest level since July 2009.

The Conference Board's Pedro Antunes said Wednesday it was the fourth consecutive monthly decline, but noted it was the first really substantial month-to-month drop.

"Negativity towards future job creation and an unwillingness to make a major purchase were the primary signs of this waning consumer confidence," Antunes said.

The survey found pessimism was higher on answers to questions about current and future household finances.

It also suggested consumers were at their most pessimistic since April 2009 about whether it is a good or a bad time to make a major purchase.

The survey was done between Aug. 4 and Aug. 14, a volatile period for financial markets that saw daily triple-digit swings and debt-rating agency Standard & Poor's downgrade the credit rating of the United States.

49 % of All Babies Born In the U.S. Are Born to Families Receiving Food Supplements

In high school, Katherine Foronda trained herself not to feel hungry until after the school day had ended. She wasn't watching her weight or worrying about boys seeing her eat.

She just didn't have any food to eat or any money to buy it.

"I thought, if I wasn't hungry during class I'd be able to actually focus on what we were learning,'' said Foronda, now 19.

Every day, children in every county in the United States wake up hungry. They go to school hungry. They turn out the lights at night hungry.

That is one of the stunning key findings of a new study to be released Thursday by Feeding America, a network of 200 food banks and the largest hunger charity in the country.

As many as 17 million children nationwide are struggling with what is known as food insecurity. To put it another way, one in four children in the country is living without consistent access to enough nutritious food to live a healthy life, according to the study, "Map the Meal Child Food Insecurity 2011."

Those hungry children are everywhere, and with the uncertain economy, the numbers are only growing, experts say.

The consequences of malnutrition can be severe. Several studies have shown that food insecurity affects cognitive development among young children. And for older children, students like Foronda, school performance is affected. Additional research shows that with hunger comes more frequent sickness and higher healthcare costs. (more)

Bob Chapman: $8,000 Gold & $500 Silver, MINIMUM: SGT Interview