Il voto scozzese NON sarà un cigno nero

Non lo sarà prima di tutto perché invaliderebbe il primo postulato e l’essenza stessa dei cigni neri, cioè il fatto di essere inaspettati (come fu Fukushima, per esempio, o il crollo di Lehman Brothers, anche se si sapeva/credeva che qualcosa sarebbe crollato negli USA in quel periodo).

Non fatevi prendere per il bavero od il sedere come al solito: nel caso la Scozia diventasse democraticamente indipendente, NON sarà un disastro (se non per la Scozia). Non ci saranno rivoluzioni indipendentiste, non ci sarà il frazionamento dell’Europa, né la guerra tra Livorno e Pisa… NONFATEVI PRENDERE IN GIRO dai media e dai bischeri che scrivono sui giornali, QUALUNQUE FESSERIA SCRIVANO.

Poi non dite che non ve l’avevo detto.

CWS Market Review – September 28, 2012

September 28, 2012

Don’t try to buy at the bottom and sell at the top. It can’t be done, except by liars. – Bernard Baruch

I’ve been warning investors that the stock market may be in for a rough patch, and we got a taste of that this week. On Thursday, the stock market finally snapped its five-day losing skid. Once again, the problems stem from Europe.

I know it sounds like a broken record but the economics of that continent seem terminally dysfunctional. There have been anti-austerity riots this week in Spain and Greece. Investors are beginning to realize that even if the euro survives, there will be a severe recession in Europe, and there’s a continent-wide rebellion against austerity policies.

In this week’s CWS Market Review, I want to take a closer at the economy and show you the best ways to protect yourself during the weeks ahead. The good news is that the worst of the euro crisis has already passed, but the road to recovery won’t be easy. Remember that the U.S. stock market bottomed out six months after Lehman Brothers went bankrupt.

The third quarter officially ends on Sunday, and we’ll soon get a look at Q3 earnings reports. Earnings season is Judgment Day for Wall Street; the good will be rewarded and the bad will be severely punished. I expect that our stocks on the Buy List will again demonstrate their superior attributes. Before we get to that, let’s dig into the surprising comeback of U.S. consumers.

U.S. Consumers Are Finally Waking Up

Putting Europe aside, not all the economic news has been dire. In fact, there’s been more evidence that U.S. consumers are finally waking up from their looong hibernation. This week, the Conference Board said that consumer confidence rose to a seven-month high. I was impressed to see that the expectations index rose as well.

This confirms previous evidence that there’s some emergent optimism in the air. Earlier this month, for example, Monster Worldwide, the job search website, said that there was an increase in online labor demand in August. And on Thursday, the Labor Department said that new claims for unemployment benefits dropped by 28,000 (though this number tends to bounce around a lot).

So what’s behind the new-found optimism of U.S. consumers? The main reason boils down to one word—housing. Economic recoveries in the U.S. have typically, but not always, been led by the housing sector. If you think about it, this makes a lot of sense. Not only is housing a major expense for consumers, but it also spills over into several other industries from retail (think Bed Bath & Beyond) to construction, transportation and finance.

The problem with this past recession is that we had so much overbuilding during the good times, that were was no need to build more homes. The homes built during the bubble weren’t going to disappear, so it’s taken us five years to work off the excess inventory. Only now are we getting the first clues that home prices are rising again. The CEO of Lennar (LEN) recently said, “the housing market has stabilized, and the recovery is well underway.” Let’s hope so because higher home values cause a “wealth effect” which makes consumers happier and more willing to spend.

I’ll show you an example. Check out this chart. It shows the Homebuilders ETF (XHB) in black along with the Retailers ETF (XRT) in gold.

As you can see, the two ETFs have risen together. I’d say that they’re both lifting each other up. Homebuilders have done better because that sector had suffered more damage. I don’t think this trend will let up soon. A recent survey of retailers indicates that many plan to hire more holiday workers this year. Toys R Us just said they plan to hire 45,000 employees for this holiday season. Both Walmart (WMT) and Kohl’s (KSS) plan to add 50,000 workers for the holidays.

In the near-term, Wall Street will be focused on events in Europe and the election battle in America. Those events will most likely lead to greater volatility and a soggy market for stocks. The Spanish ETF (EWP) recently gained 50% in just 52 days so some give back is probably due. But once the market gets past that, the signs are pointing to a strong year-end rally. Until that happens, investors need to play it safe.

Focus on High-Quality Dividends

The best way to protect yourself over the next few weeks is by making sure your portfolio has high-quality high-yield stocks. On our Buy List, this includes stocks like Reynolds American (RAI), our tobacco stock. Reynolds is a classic consumer staples stock because their business is barely impacted by the twists and turns of the broader economy. RAI currently yields a very generous 5.42%. That’s the equivalent of 730 Dow points a year just in dividends. Reynolds is a buy up to $45.

I know some investors are skittish about investing in tobacco but there are several other top-notch stocks that pay big dividends. Thanks to its recent pullback, Nicholas Financial (NICK) now yields 3.58%. Not only is NICK in good shape but I think the business has gotten stronger this year. Plus, the Fed’s willingness to keep short-term rates low is very good for NICK’s bottom line. Buy up to $15.

I highlighted Sysco (SYY) in the CWS Market Review from three weeks ago, and the stock just broke out to a new 52-week high. The food service industry tends to be quite stable. Despite the rally for Sysco, the shares currently yield 3.46%. SYY is a buy up to $32.

AFLAC (AFL) isn’t one of our higher yielders but I expect we’ll get another dividend increase when the company reports earnings next month. I’m not expecting a major increase. The quarterly dividend is currently 33 cents per share, and it will probably rise by one or two cents per share which means AFL may be yielding close to 3% right now. It’s frustrating that the market is treating AFL as if it’s a proxy for Europe. That’s simply not the case. AFL has dumped most of its lousy European holdings. This is a very undervalued stock. AFLAC is a strong buy up to $50 per share.

Another stock with an above-average dividend is Hudson City (HCBK). The bank is the process of being taken over by M&T Bank (MTB). Thanks to a rally for M&T, the buyout price for Hudson City has also increased. It will be a while before the deal is complete and management seems committed towards maintaining Hudson’s eight-cent-per-share quarterly dividend. At Thursday’s close, that works out to a yield of 4.07%. Hudson is a buy up to $8.

Thanks to its recent pullback, CA Technologies (CA) now yields 3.86%. I’m looking forward to another good earnings report next month. CA Technologies is a good buy up to $30 per share.

Moog (MOG-A) isn’t a dividend payer but I wanted to highlight it this week because it’s become one of the best values on our Buy List. Even though Moog gave us decent earnings guidance for 2013, and beat Wall Street’s earnings forecast in January, April and July, the stock hasn’t done much at all. Moog should be a $45 stock.

That’s all for now. Next week is the start of the fourth quarter, plus we’ll get the big jobs report on Friday. The summer is over so expect to see more volatility. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

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Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 for the last five years in a row. This email was sent by Eddy Elfenbein through Crossing Wall Street.

When the Safest Investments Turn Risky

by Alexander Green, Investment U Chief Investment Strategist
Friday, August 31, 2012

Many investors lump money market funds in with Treasury bills and certificates of deposit. Don’t be one of them.

Treasury bills and CDs are backed by the full faith and credit of the United States government. Money market funds are not.

Yes, the federal government had its credit rating taken down a notch last year. But a U.S. government guarantee still means something powerful and important in a risky and uncertain world.

Read your history and you’ll find that the money market industry has a few blemishes. In 1994, for instance, Community Bankers U.S. Government Money Market Fund “broke the buck.” The fund’s net asset value dropped to 96 cents on the dollar, a shock to shareholders who believed their money was “completely safe.”

In 2008, thanks to the collapse of Lehman Brothers, the Reserve Primary Fund broke the buck again. This time investors fared a little better, receiving 99.04% of their funds. But it also sparked a panic.

Investors rushed to liquidate their money market funds and move them into guaranteed bank accounts. Their actions destabilized an already fragile financial system. The federal government took the unprecedented step of backstopping money market funds to avert a meltdown.

“Losses Are Entirely Possible Again”

Of course, the financial crisis is behind us now and money markets are safe again, right?

Hold on. For starters, the federal guarantee on money market funds ended nearly three years ago, on September 18, 2009. Losses are entirely possible again. And money market fund assets have grown from roughly $4 billion in the mid-1970s to approximately $2.5 trillion today. As economist Art Laffer points out, this is the size of the Federal Reserve’s entire balance sheet.

Also, the SEC recently turned down a couple of sensible proposed regulations. And investors are the worse off for it.

Don’t get me wrong. I’m an unrepentant capitalist and sharp critic of senseless or burdensome regulations. But the primary proposal here was to establish reserve requirements and require that money market fund share values be marked to market, rather than held at the fixed one-dollar level that has been the industry practice since money markets were created in 1971.

If you were the shareholder of an uninsured, unguaranteed fund whose assets were falling in value, wouldn’t you want to know about it as soon as possible rather than hold on to an illusion? Me too. But the interests of the mutual fund industry – not to mention all the corporations and municipalities who use money markets as a vehicle for short-term funding – won out over the interests of fund shareholders.

“An Uninsured Mutual Fund”

What should you do? First, understand that a money market is an uninsured mutual fund. And while the government may step up again in a full-blown financial crisis, there is no guarantee of this.

Most money funds, commonly called “prime” funds, invest in commercial paper and repurchase agreements, as well as Treasuries. But if you are highly risk-averse or have large cash balances, you should hold money market funds that invest solely in U.S. Treasury securities. Yes, the income is taxable and the yields are pathetically low, but we’re talking about safety here. You will almost certainly lose ground to inflation but your principal is secure.

Some will say this is only necessary for the truly paranoid. But I disagree. True, the chances of losing money in a regular money market fund are small. But since all money markets pay next to nothing at the moment, the cost of this insurance is low.

In the event of another financial crisis, you’ll have peace of mind. And you won’t find yourself using technical jargon like shoulda, woulda, or coulda.

Good Investing,

Alex

ECB Leaves Interest Rates Unchanged As Expected – DJ

FRANKFURT — The European Central Bank left its main interest rate unchanged for a second straight month Thursday, amid signs that the euro-zone economy is stabilizing and Greece’s government may be nearing a deal with creditors that would avoid a messy default.

The decision to leave rates at a record low 1% confirms the forecast of almost all analysts surveyed by Dow Jones Newswires, who had expected the ECB to hold fire after its recent robust policy steps helped restore calm to markets.

Borrowing costs of non-core euro-zone countries such as Spain and Italy have fallen sharply in recent weeks, a sign of easing market tensions since the ECB injected nearly half a trillion euros into the banking system in December via its first-ever three-year loans.

Attention will now turn to the press briefing at 1330 GMT, where ECB President Mario Draghi is likely to face questions on the economic outlook and, above all, on the ECB’s possible participation in a Greek bond swap.

With Greece’s government still in talks with its private creditors over a second, EUR130 billion bailout, it seems increasingly likely that public creditors, particularly the ECB, will have to share the pain.

At last month’s rate decision Draghi said the ECB wasn’t involved in the talks with private creditors and would only “make up [its] mind” once those talks concluded.

The Wall Street Journal reported Tuesday, however, that the ECB has agreed to exchange the Greek bonds it purchased last year at a price below face value, provided the restructuring talks are successful. Draghi is likely to be grilled Thursday on how the ECB would participate in a restructuring and whether it stands to lose profits.

Investors will also watch closely for signs of future policy easing. Although the ECB has never cut rates below 1%, even after the collapse of Lehman Brothers, roughly half of the analysts surveyed by Dow Jones expected that to happen before October.

Draghi is unlikely to signal an imminent rate cut Thursday, amid signs that the euro-zone economy is stabilizing and inflation remains stubbornly high.

Recent economic data have been bumpy but generally more positive. In Germany, Europe’s largest economy, unemployment hit yet another record low last month, while Ifo’s closely-watched business confidence indicator rose for a third straight month.

The picture is less rosy in Southern Europe, where economies including Spain and Greece face a brutal contraction this year. But overall, composite euro-zone purchasing managers indexes in January pointed to very modest growth.

Draghi is likely to repeat that he sees “tentative signs of stabilization at a low level” in the euro-zone economy, despite “significant downside risks.”

Although inflation held steady at 2.7% in January, clearly above the ECB’s target of just below 2%, the new president is likely to say it “will probably stay above 2% for several months to come, before declining to below 2%,” his refrain since he took over in November.

Nor is Draghi likely to announce any new unconventional measures this time. Draghi has stressed repeatedly in recent weeks that the central bank’s three-year loan measure has already helped avert a major funding crisis.

But Draghi is expected to explain changes the central bank has made to its collateral framework to make conditions even more favorable for banks to tap the next three-year operation, due at the end of February.

-By Tom Fairless, Dow Jones Newswires, tom.fairless@dowjones.com; +49 69 29725 505