Wall Street Dumps Most Treasuries Since 2004 on Growth Wager

Wall Street banks are cutting their holdings of Treasuries at the fastest pace since 2004 as the world’s biggest bond firms bet that the economy will strengthen and demand for higher-yielding assets will increase.

The 18 primary dealers that trade with the Federal Reserve reported that holdings of U.S. government debt tumbled to a net $2.34 billion on Dec. 29 from $81.3 billion on Nov. 24, the most since June 2009, according to the most recent central bank data. While the stake is the lowest since February, corporate bond and mortgage securities have risen from the lows of the year.

Dealers had stocked up on U.S. debt anticipating demand from customers who wanted to sell the securities to the central bank as part of Fed Chairman Ben S. Bernanke’s plan to buy $600 billion of Treasuries. Government bonds lost their allure as stocks rose, corporate financing conditions eased, expectations for inflation increased and the dollar strengthened.

“Slowly but surely the economy’s getting on stronger footing,” said John Fath, who helps manage $2.5 billion as a principal at investment firm BTG Pactual in New York and was the former head government-bond trader at UBS Securities LLC, a primary dealer. “There are people moving or thinking of moving out of risk-free assets. This is what Bernanke wanted.”

Berkshire Hathaway Inc., the Omaha, Nebraska-based holding company controlled by billionaire Warren Buffett, and General Electric Co.’s finance unit led companies selling a record $48.5 billion of bonds in the U.S. last week as relative yields on investment-grade debt shrank to the narrowest since May. (more)

THE ECONOMIC HYDRA

by: Dr. Elias Akleh

Economic crises are lately sweeping the globe like a contagious virus. They started in the US, the strongest economy in the globe, and then crept onto most European countries. They degraded the value of the American Dollar, the European Euro, and all international currency that use them as money reserve. The crises had led to what is referred to as austerity measures; cutting down luxury expenses, but instead the cutting down was on the necessary expenses; budget cuts on major social services including education, health, unemployment benefits, and social security, increase of taxes and educational tuitions, loss of jobs leading to homelessness and poverty, loss of businesses, increase of retirement age, theft of retirement funds and attempts to tab into social security funds, among many other devastating measures.

These economic crises, we are told, were created by the governments’ inability to repay debts and interests taken to cover the alleged global wars against terror. The important questions I like to pose in this regard are: who are the debtors and where did they get the debt money from?

Throughout thousands of years a political hierarchy of very wealthy financiers had grown into power elite whose ultimate goal is global economic domination and enslavement of nations. (more)

Alaska Pipeline Closes Drop in Production by BP, Others Threatens to Push Oil Toward $100 a Barrel

By GUY CHAZAN

BP PLC and other oil producers were forced to shut down nearly all their output on Alaska's North Slope, after a leak led to the closure of the Trans Alaska Pipeline.

Analysts said the shutdown of the 800-mile pipeline network could trigger a jump in oil prices unless the flow of oil resumes quickly, as the region represents a significant slice of domestic U.S. oil output. Some analysts said the disruption could help drive crude-oil prices toward $100 a barrel from below $90 now.

Alyeska Pipeline Service Co., which operates the pipeline network, said the spill has had no apparent impact on the environment or wildlife. Alyeska said no oil was leaking as of Sunday evening. About 10 barrels of oil had been spilled and most of it had been cleaned up, Alyeska said.

The shutdown, however, was a "significant event," BP spokesman Steve Rinehart said. BP and other oil companies operating on the Slope, including ConocoPhillips, have periodically been forced to cut output because of major power outages or when heavy winds interrupted tanker loadings at the port of Valdez, he said. But the latest shutdown means "a big reduction" in the middle of winter "when we have temperature and weather challenges" as well, Mr. Rinehart said. The temperature at the pump station where the incident occurred is about four degrees Fahrenheit.

BP said it was too early to say what impact the shutdown would have on the company's first-quarter earnings.

Total production on the North Slope is around 630,000 barrels a day—about 9% of total domestic U.S. output. (more)

Bullish on AT&T (NYSE: T)

AT&T Inc. (T-N28.85-0.30-1.03%) declined from $40.70 (U.S.) to $20.90 in 2008 (A-B) rallied and then settled into a trading range between $23.50 and $28 (dashed lines). The recent rise to $29.43 (C) signalled the breakout and the start of a new major up-leg. The stock has traded between $27.50 and $29.50 for the past three months (dotted lines); a move above $30 would confirm the resumption of the up-trend. Only a decline below about $27 would be negative.

Point & Figure measurements provide initial targets of $39 and $43. The large area of accumulation (dashed lines) supports higher targets.

Ron Meisels is a contributor to the www.NA-marketletter.com website. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.

New York owes $200 billion in retiree health care costs - but there's no money

New York State, along with its cities and counties, have promised $200 billion worth of retirement health care benefits to their employees, and no one knows where that money is going to come from, according to a study conducted by the Empire Center for New York State Policy.

Unless the governments in question figure out a way to raise that money, they will soon be forced to decide between paying the promised health care bills and paying other expenses, such as the $264 billion in bonds that they also owe. With rising health care costs, a faltering economy, and steady public opposition to higher taxes and bailouts, the problem is only likely to worsen in the coming years.

"In fact, the cost of our 'health' is spiraling so far out of control that the Health Care Financing Administration predicted that our system would cost 16 trillion dollars by 2030," write T. Colin Campbell and Thomas M. Campbell II in their book The China Study. (more)

Six top silver stock picks for 2011: SLW, PAAS, SSRI, MFN, CDE

The consensus of market experts with regards to silver in 2011 goes something like this: silver prices are generally expected to stay hot in 2011 – though not without troughs – after dramatically outpacing gold prices in 2010.

According to Jefferies analyst Michael Dudas, silver prices should “achieve higher highs and greater lows in the next 12 to 18 months” driven by monetary, supply-demand and technical drivers. The prediction comes as BullionVault announces that its online gold and silver trading business grew nearly 29 per cent by volume to $1.33-billion (U.S.) in 2010, while customer numbers increased to 21,000 given the increased appetite for safe-haven and alternative investments.

In light of this, TheStreet sat down with numerous silver stock analysts and market watchers to arrive at six stocks the experts say they would buy during the expected silver price dips – in hopes of later benefiting from anticipated silver-price spikes in 2011.

Silver Wheaton (SLW-T33.19-0.92-2.70%) is considered to be one of the most stable silver stocks due to its unique and stable business model. (more)

Here are 5 Stocks Trending This Weekend

Although most businesses are closed over the weekend, money never sleeps.

Here are the 5 Stocks Trending This Weekend:

1) Progress Energy (NYSE:PGN) and Duke Energy (NYSE:DUK): North Carolina based power company Duke Energy is in talks to acquire key competitor Progress Energy for $13.1 billion. Although the companies are allegedly announcing the news Monday morning, investors should be very concerned that this deal will receive major scrutiny from the NC Utilities Commission.

2) Verizon (NYSE:VZ) and Apple (NASDAQ:AAPL): Investors are heavily focusing on what the WSJ confirmed will be Verizon’s announcement about selling Apple’s iPhone. The announcement this Tuesday will end years of rumors and add very solid revenue streams for both companies.

3) Mitsui & Co., Ltd. (NASDAQ:MITSY): According to Japanese press, Japanese firm Mitsui & Co. is teaming up with Mitsubishi Corp. to consider “joining a massive liquefied natural gas project on Russia’s Yamal Peninsula on the Arctic Ocean.” This would be Russia’s biggest liquid natural gas project.