Could Thorium Replace Uranium For Nuclear Power?

Goodbye, Great Bond Bull Market

HERE WE ARE on the eve of an election on which precariously hangs the fate of the nation, if not the universe. We know that because both the contending parties tell us so. We have to own up, though, to some small kernel of doubt, since lo! the many elections we've been witness to over the years were invariably also described as being crucial for the fate of the nation, if not the universe.

But as someone who staunchly believes in Winston Churchill's conclusion that democracy is the worst political system devised by man except for all the others, the history of this nation compels us to diffidently suggest that truly "crucial" elections have been rare as hen's teeth and the country has survived even the numerous times the populace perversely has chosen to throw rascals in instead of out.

Still, this election, whatever the outcome, does boast a significant distinction from all its midterm predecessors. Not, unfortunately, in the quality of the candidates; they're easily as mediocre or worse a crop as any produced in the past couple of hundred years. But where they truly stand out is in the enormous sums raised on behalf of their candidacies. As Will Rogers put it so aptly, "politics have gotten so expensive that it takes lots of money even to get beat." (more)

The Ten Biggest American Cities That Are Running Out Of Water

Some parts of the United States have begun to run low on water. That is probably not much of a surprise to people who live in the arid parts of America that have had water shortages for decades or even centuries. No one who has been to the Badlands in South Dakota would expect to be able to grow crops there.

The water problem is worse than most people realize, particularly in several large cities which are occasionally low on water now and almost certainly face shortfalls in a few years. This is particularly true if the change in global weather patterns substantially alters rainfall amounts in some areas of the US.

24/7 Wall St. looked at an October 2010 report on water risk by environmental research and sustainability group Ceres. We also considered a comprehensive July 2010 report from the Natural Resources Defense Council, which mapped areas at high risk of water shortage conflict. 24/7 Wall St. also did its own analysis of water supply and consumption in America's largest cities, and focused on the thirty largest metropolitan areas. One goal was to identify potential conflicts in regions that might have disputed rights over large supplies of water and the battles that could arise from these disputes. And, 24/7 Wall St. examined geographic areas that have already been plagued by drought and water shortages off and on. (more)

Why Bill Nygren Is Buying Stocks Now

Many of Wall Street's greatest investors seem to agree: Now is a great time to buy stocks.

Warren Buffett has opined that stocks are a better buy than bonds these days. Legg Mason's Bill Miller, famous for the 15-year streak in which he beat the S&P 500, is also bullish, arguing that large caps now present the investment opportunity of a lifetime.

Now Bill Nygren, co-manager of several high-performing Oakmark mutual funds, has joined that chorus. His Oakmark I (OAKMX) fund has placed in the top 10% of funds in its category over the past three, five, and 10 years. Over the past decade, it ranks in the top 2%!

Growing dividends and buybacks
In his third-quarter commentary to shareholders, Nygren shook his head at investors plowing money into bonds while withdrawing from stock funds. "We continue to believe that equities are attractively priced," he wrote, "and are highly likely to dominate returns from more popular assets such as fixed income."

He goes on to explain that many investors look only at companies' income statements, and see sales grow too slowly, if at all. But they're missing all the mighty heaps of cash that many companies have been accumulating. Nygren expects to see rising dividend payments and heightened share repurchases, both of which can benefit shareholders significantly. (more)

Iran Announces It Has Converted 15% Of Its $100 Billion+ In FX Reserves Into Gold

As of today, one of the world's top oil exporters announced that has exchanged about $15 billion of its FX reserves into gold. Earlier, Iran announced that the country has converted about 15% of its foreign exchange reserves into gold, and "will not need to import the metal for the next ten years." There is your mystery buyer to all that gold the IMF was selling in Q3... And since Ahmadinejad said that Iran's total FX reserves exceed $100 billion, the amount of gold in stock held by Iran is more than $15 billion. Which is equivalent more than 345 tonnes at a closing price of about $1350. Which also means that the WGC's official gold holdings are in dire need of an update, as Iran does not appear anywhere on the IMF's listing of official gold holders, and with over 345 tonnes, it would make Iran a top 15 holder of the yellow metal. (more)

US Debt: A Recipe for Economic Disaster?

The foundation of the US dollar is already under threat. If it collapses, it will take other economies and currencies down with it.

The United States has dug the biggest economic hole in human history. It's become so severe that if you listen carefully, you’ll hear the Chinese -- the biggest holders of American debt -- wondering if they’ll ever get their money back. The foundation of the US dollar is already under threat. If it does collapse, it will take other economies and currencies down with it.

At the summer 2010 meeting of G20 countries, European countries including the United Kingdom and Germany urged President Obama to implement austerity measures with them. The American president refused. Instead, he steered the economy in the opposite direction -- by pumping billions more into the economy.

The United States is moving to the left. Meanwhile, European countries, recognizing some major flaws in their system, are moving right. Some socialist aspects of their societies are being reduced. For example, the tax burden on citizens and companies are being relaxed even as they decrease government spending. Europe is moving toward free enterprise.

In essence, the Obama administration plans to tax and spend the country back into prosperity. While it might make sense in theory, the policy has never been attempted in this magnitude before and it can fail (at my firm, we're believers in a small government). It's also important to note that more than four out of every 10 dollars today is already borrowed -- in stimulus spending. Another concern is that “redistributing” the wealth is inefficient. (more)

Luxury, Discount Stocks Red-Hot for Holidays

Investors betting on U.S. retail stocks this holiday season are advised to buy high and low, and sell the in-betweens.

Luxury chains and discounters are likely to emerge as winners, unlike last year when the recession depressed retailers across the board, industry watchers said.

Seasoned stock pickers are urging clients to hoard high-end players such as Tiffany & Co and Nordstrom Inc, as well as discounters including Target Corp.

Tiffany turns analysts on despite its high valuation, with many seeing promise in the jeweler's recent line of clutches sporting its signature robin's-egg blue color. Nordstrom, too, has won praise for its better merchandise.

"The housing market is still in the ditch. Unemployment is still very high," said Craig Johnson, president of Customer Growth Partners. "But if you are (among) the 83 percent of people (who) ... still has a full-time job and you have made it through this far, you are probably going to do OK." (more)