InvestMacro FX

By MoneyMorning.com.au

Last year, Australian Wealth Gameplan editor, Dan Denning suggested where you should have your assets to prepare for “complete financial collapse”. He provided the following handy chart…

Dan’s advice was to move into assets that had real value… assets you could use to sustain life and trade. The break-up was partly tongue in cheek… but the idea behind it was not.

The one problem is that it’s almost impossible to know when the collapse will happen.

Will it be this year? Or next year? Or will it be in 30 years…

That’s why even though you may have a big picture, macro-economic view on the state of the economy, it’s still important to think about the small things. And that means earning a living and building your wealth through the right investments… regardless of when the collapse happens.

Remember, despite the poor state of the economy, businesses and ideas still carry on. Business owners and managers still look to make profits… entrepreneurs still think of new ideas and take risks… and, share prices can still go up.

It was this kind of thinking that got Dan interested in the shale gas industry. And in particular, three stocks he backed last year to benefit from this booming industry.

If you’re not familiar with shale gas, in simple terms it’s gas that’s trapped in deep rock formations. It’s different to conventional gas. With conventional gas, the gas forms in porous rocks and can be easily “sucked out” by drilling into the rock.

But with shale gas, the rocks aren’t porous. They need to be cracked apart (fractured) to allow the gas to escape. Only then can it be “sucked out” through the well.

It’s this kind of innovation that provides benefits to shale gas investors (such as the readers who invested in Dan’s recent stock tips) and to consumers. As this report from Bloomberg notes:

“A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50% and reduced investment in costlier sources of energy.”

Buy Shale Gas While the Price is Low

Yesterday we mentioned how the natural gas price was back to 2008/09 levels. Overnight it has fallen further, to just USD$2.49 per million British thermal units.

At some point you’ll see a floor under the gas price. After all, with all the money spent on exploring and producing the stuff, gas producers aren’t going to give it away for free.

That’s what makes taking a punt on natural gas (and especially unconventional natural gas) a good bet right now. The best time to buy an asset that’s about to leap in demand is when prices are low. Compare that to oil which is still at USD$100.

The longer things stay this way and with more big gas discoveries, there’s a big chance natural gas will be the energy source to replace oil. And when that happens you can expect a boost to the natural gas price and big rewards for the companies and investors who take a punt while the price is low.

Cheers.
Kris.

P.S. We’ve written about shale gas for some time. But you’re mistaken if you think it’s too late to join in the boom, because it’s only now starting to hit the mainstream. As a report in today’s the Age proves: “Australian shale assets ‘next big thing’ for investors”.

The report notes, “While shale assets in Texas sold at $US25,000 an acre this year and a holding in Ohio and Pennsylvania changed hands at about $US15,000 last month, shale properties owned by Australia’s Beach Energy can be bought for $US406 per acre…”

Could Aussie shale assets increase 6,057% to the same price as Texas shale assets? Why not? To find out which shale stocks Dan Denning has picked to benefit from the shale gas boom, click here for a no-obligation trial to Australian Wealth Gamplan…

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Building Your Wealth From Shale Gas

By MoneyMorning.com.au

Yesterday the papers splashed the latest warning from the World Bank.

The Financial Times reported:

“Predicting significantly slower global growth in 2012 than it expected last summer even if the eurozone muddles through its crisis, World Bank economists said that if financial markets deny funds to eurozone economies, global growth would be about 4 percentage points lower than even these figures, with poorer economies far from immune.”

There’s no doubt there will be another downturn. The pieces are already in place for it to happen. The only unknown is when.

Of course, the knee-jerk reaction is to say, what would the World Bank know? It never gets things right. But it is worth remembering what the Bank wrote in 2007…

“A soft landing remains likely, but the global economy has reached a turning point and many factors could result in a more pronounced slowdown. A faster-than-expected weakening of housing markets in high-income countries could generate a much sharper downturn and even recession, with potentially significant effects for developing countries. Much slower growth would likely cause commodity prices to weaken more than already projected…”

But we won’t big-up the World Bank too much. After all, the guys over at our sibling newsletter The Daily Reckoning banged on about the economic meltdown as early as 1999.

Besides, it’s important to understand why the World Bank is making this prediction. It’s not to warn investors about the risks of investing. It’s not to admit that the world is now paying for the mistakes of the past. No. It’s simpler than that…

It wants more taxpayer dollars.

Or rather, it wants governments to give taxpayer money to the International Monetary Fund (IMF) so the IMF can give more cash to broken banks and corrupt governments.

If you needed any proof, right on cue the following report appeared in the FT yesterday:

“The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world’s spreading fiscal emergencies, which it estimates will generate demand for bail-out loans totalling $1tn over the next two years.”

Coincidence? No.

It’s the latest attempt by meddling bureaucrats to stall the inevitable: a full-scale economic collapse. Whether it’s a repeat of 2008 or something much worse is anyone’s guess.

That’s why it’s vital you have an emergency plan…

Cheers.
Kris.

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AUDUSD stays in a upward price channel on 4-hour chart, and remains in uptrend from 0.9861. Support is at 1.0300, as long as this level holds, the price action from 1.0448 is treated as consolidation of uptrend, and one more rise towards 1.0600 is still possible. However, a breakdown below 1.0300 will indicate that a cycle top has been formed at 1.0448, then deeper decline to test 1.0145 key support could be seen.

Forex Signals

On Wednesday, the World Bank revised its global growth projections to reflect the deteriorating debt situation in Europe. Comprised of over 180 member countries, the World Bank predicted last June that global activity for 2012 would expand by 3.1 percent. The downgraded outlook now places global growth for 2012 at just 2.5 percent, with most of the growth slated for the emerging economies.

In fact, noted World Bank economist Justin Lin, Europe was likely already in recession and could trigger a return to the turmoil that led to the recession of 2009.

“The risk of a global freezing-up of the markets and as well as a global crisis similar to what happened in September 2008 are real,” Lin told reporters in Beijing.

The Bank of Canada agreed with the World Bank’s assessment of the situation in Europe saying on Wednesday that Europe will likely be in recession for most of 2012. The Bank also said it expected the impact will cost the Canadian economy about $10 billion due not only to lost export sales, but also a general decline in world-wide investor confidence and the impact this will have on global markets.

In November, the Federal Reserve likewise revised downwards its outlook for 2012. The Fed predicted that growth would expand by only 2.5 to 2.9 percent compared to its earlier view of between 3.3 and 3.7 percent. News of a more positive nature came in the form the Fed’s “Beige Book” which showed that for seven of the twelve regions surveyed, the last quarter of 2011 ended on a more upbeat note compared to the year before.

Despite the year-over-year gains, the recovery is still being held in check by two significant forces; a still-depressed housing market and stubbornly-elevated unemployment rate.

The longer-term view provides little optimism for a quick fix for either predicament. As a result, the Fed remains committed to its low-interest rate policy that will see the Federal Funds rate capped at 0.25 percent until mid-way through 2013.

Greece Close to Deal with Creditors

One hopeful sign from Europe is the latest news suggesting that Greece could be close to inking a deal with its major bond holders. Late last year, a committee made up of thirty-two of Greece’s private creditors was formed to lead the negotiations to set the guidelines for addressing about 200 billion euros ($254.6 billion) in debt due to mature in the first half of 2012.

An agreement reached Oct. 26^th of last year called for these soon-to-expire bonds to be swapped for new bonds with a significantly discounted face value expected to be about half of the original par value. Discussions are now said to be centered on the interest rate these new bonds will pay; insiders expect the annual interest rate will be between 4 and 5 percent with 20 to 30 year maturity dates.

Foreign currency markets reacted positively to the news of a potential agreement with the euro gaining half a percent on the dollar yesterday. The euro gained another 0.9 percent by early afternoon in New York rising to a 12-day high of $1.2853.

Scott Boyd is a currency analyst and a regular contributor to the OANDA MarketPulse FX blog

DirecTV (DTV) was downgraded today by UBS (UBS) to neutral from buy with a $46 price target, as the firm believes that subscriber growth will likely slow. Shares are lower by about 2.7 percent.

MGM Resorts (MGM) was upgraded today by Credit Suisse (CS) from underperform to neutral with a $13 price target, as activity on the Las Vegas strip is showing steady gains which should bode well for the bottom line. Shares are higher by about 3.6 percent.

According to a person familiar with the matter, Ford (NYSE:F) is marketing $1 billion of bonds backed by auto loans, Bloomberg reports.The individual says the offering, issued through Ford’s finance unit, could be sold as early as this week.Ford Motor (NYSE:F) has potential upside of 37.6% based on a current price of $12.13 and an average consensus analyst price target of $16.69.Ford Motor is currently above its 50-day moving average (MA) of $10.85 and should find resistance at its 200-day MA of $12.27.

Lions Gate (NYSE:LGF) shares are catching a bid today, up 4.3% today, after the NY Post reported the company was looking to sell its stake in TV Guide Network.The NY Post said Lions Gate was already in talks with several PE firms.Nielsen estimated the TV channel lost 20% of its viewers in 2011.

Is Google Search Plus Your World Really That Bad of An Idea?

by Jeannette Di Louie, Investment U Research

Wednesday, January 18, 2011

“Google May Have Just Made the Worst Mistake in its History This Week,” a Business Insider headline speculated on Friday.

And Forbes echoed similar sentiments, firmly stating with one of its own that “Google CEO Larry Page Just Made His First Big Mistake.”

But perhaps the most shocking headline of all concerning the reigning search champ’s alleged error was Gizmodo’s, which read: “Google Just Made Bing the Best Search Engine.”

That forceful declaration demands two immediate responses: “Really?” and “How bad could it have been?”

Now don’t get me wrong – because I actually prefer Microsoft’s (Nasdaq: MSFT) Bing over Google (Nasdaq: GOOG). But that doesn’t mean I have any illusions that Bing is anywhere close to being as powerful or as popular as Google.

Yet Bing did get a boost with Google’s announcement last week concerning its newest innovation. With Google Search Plus Your World (SPYW), the company managed to tick off prominent techies – like Gizmodo’s Mat Honan and Business Insider’s Matt Rosoff – enough to allegedly leave Google for good.

Google Search Plus Your World in a Nutshell

When it comes down to it, Google SPYW is really just an attempt at self-promotion.

Last year, Google launched a social media site called Google+ in an attempt to beat out Facebook. And since that’s no easy task, the search engine went a step further and came up with SPYW.

Search Plus automatically draws from information posted on Google+, generating query results based off of that data. So if John Smith logs into his Google account and then conducts a general internet search for one of his Plus buddies, he’s much more likely to get relevant results than otherwise.

This is “potentially groundbreaking” technology, as Wired Senior Writer Steven Levy points out. “If Google is able to leverage the knowledge it accumulates about you, it can deliver much better search results.”

On the downside, that capability doesn’t extend much further than Google+. John’s Facebook, for example, might as well not exist according to Google+.

The company says it’s looking into changing that, but it has some other kinks to work out, as Levy also points out:

“With SPYW, the search experience deeply becomes intertwined with Google’s social networking product. You see it in the search box, where the Google+ identity becomes the way to identify a person whose name is in a query. You see it in the search results, where Google+ content is overwhelmingly displayed compared to other social material from Google’s competitors. You see it in a ‘People and Pages’ list – suggestions for connections on Google+ –that appears in the same column as Google’s ads.”

In other words, SPYW is obnoxious in its self-promotion. Though, admittedly, anybody who doesn’t like the feature can simply turn it off and go back to a regular Google experience. And anybody who doesn’t have a Google account doesn’t have to worry about it at all.

So Did Google Mess Up or Not?

When everything is said and done, Google SPYW may very well have been far too bold a move to promote a still largely insignificant service. Then again, it might be the kick that Google+ needs.

At this point, it’s far too early to say one way or the other.

While Rosoff makes a good point in saying, “In tech…You lose when you make your customers angry,” and people don’t seem to be very happy with SPYW so far. But that’s mostly techies and not the main public.

Right now, a lot of assumptions are being made over a product that hasn’t really hit the market yet. And Google has the benefit of already having a loyal following that all but laugh at other search engine attempts.

Knowing that, don’t buy or sell into the hype. Just keep an eye (only one is necessary for the time being) on the situation and see what happens.

Good Investing,

Jeannette Di Louie

Article by Investment U

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned dollars to make a purchase, is that they expect to make money. Today we look at a noteworthy recent insider buy.