Debt commission leaders paint gloomy picture

BOSTON (AP) -- The heads of President Barack Obama's national debt commission painted a gloomy picture Sunday as the United States struggles to get its spending under control.

Republican Alan Simpson and Democrat Erskine Bowles told a meeting of the National Governors Association that everything needs to be considered -- including curtailing popular tax breaks, such as the home mortgage deduction, and instituting a financial trigger mechanism for gaining Medicare coverage.

The nation's total federal debt next year is expected to exceed $14 trillion -- about $47,000 for every U.S. resident.

"This debt is like a cancer," Bowles said in a sober presentation nonetheless lightened by humorous asides between him and Simpson. "It is truly going to destroy the country from within."

Simpson said the entirety of the nation's current discretionary spending is consumed by the Medicare, Medicaid and Social Security programs. (more)

U.S. stocks rise, log best week in nearly a year

(MarketWatch) -- U.S. stocks climbed Friday, capping their best week in nearly 12 months, as optimism ahead of the second-quarter earnings season powered a strong rebound from the market's worst levels this year.

The Dow Jones Industrial Average (DOW:DJIA) closed up 58.73 points, or 0.6%, to 10,187.72. The Standard & Poor's 500-stock index (MARKET:SPX) added 7.68 points, or 0.7%, to close at 1,077.93.

Alcoa Inc. (NYSE:AA) rose 2.1% ahead of its second-quarter report due Monday, and put in the best performance of a Dow component this week.

The four-day rally represents a bounce back after the Dow sank last week to its lowest point since October in its worst five-day performance leading up to July 4 since 1896.

The Dow has climbed 5.3% this week, its best weekly performance since the week ended July 17, 2009. The rally comes as investors have grown hopeful that the market's recent drop to 2010 lows may have exaggerated expected effects on corporate earnings from the slumping euro and slower global growth. (more)

15 Stock Picks from Top Mutual-Fund Managers

As any good contrarian investor knows, the time to buy is when there’s blood on the streets. The roads of America may not yet be sanguinary, but virtually every stock on the list below has been bleeding for the past two or so months. That means they’re a lot cheaper than they once were, and in many instances undeservedly so.

We took advantage of the recent Morningstar Investment Conference in Chicago to buttonhole a baker’s dozen of managers and ask them to name the single stock that investors had to own. Their answers are below. Share prices and related data are as of the July 6 close. (more)

Bloomberg Businessweek - 12-18 July 2010

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The World Financial Report, July 9, 2010

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Gold and silver: Good news and the bad

Less than 1% of total global assets in 2009 were in gold-related investments

“The future ain’t what it used to be”…Yogi Berra

Judging by several e-mails I’ve received from anxious readers of my articles during the past few days, some of you are wondering if you should have ‘sold in May and gone away.’

Let’s look at a chart from last year and see if that strategy would have worked in 2009.

Here is the daily bar chart for gold from last year. Selling in May (green rectangle) and going away would not have been a good idea in 2009. The good news is that the best buying opportunities for buying gold and silver usually come in May – June – July.

“There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be turned into ingots bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence” ... Charles Degaulle. (more)

Commercial real estate transactions collapse 90 percent from 2007 to 2009. The next taxpayer bailout in the $3.5 trillion CRE market

The massive commercial real estate market is already plaguing the weak balance sheets of banks. It is the case that each Friday, we are likely to see one U.S. bank fail because due to high levels of commercial real estate (CRE) debt on their books. This market is likely to cause the failure of hundreds of banks and put the economy down into another real estate funk. The amount of commercial real estate transactions shows no sign of recovery in this market. And why would there be any recovery? This is an area for hotels, strip malls, condos, and other projects that usually reflect a healthy and growing economy. We do not have that and the problems embedded in CRE are going to stifle any growth for years to come. First, we should look at the trend in commercial real estate prices: (more)