News

The New American Baby Boom... And How It Will Affect You... - 18.07.2008
The US National Center for Health Statistics just reported a population milestone. In 2007, 4,315,000 babies were born in the US. This means that more babies were born in the US last year than any other year in history. We’ve been hearing about Baby Boomers for the last 50 years. The US has just beaten their baby boom peak of 1957 by 15,000. My big concern when I read these figures was water.

The Party Is Over - 18.07.2008
Despite the European Central Bank’s hard line against inflation – the ECB’s key rate is nearly twice that of the Fed – inflation in Europe is running at about the same level as it is in America.

Has Oil Burst Its Bubble? - 17.07.2008
“Oil hits a new record high!” We were getting used to that, weren’t we? But as the price of a barrel ticked up, whispers about a bubble grew until they became deafening shrieks. “It’s all speculators!” was the cry. No less a speculator than George Soros said as much to the US Senate (which, let’s face it, was a bit rich of him, wasn’t it?). The market seemed to be getting ahead of itself...

Asian Markets Look Set For A Rebound : Here’s How You Could Profit From It - 17.07.2008
In fact, China isn’t even the most exciting Asian market. In a moment, I’ll show you the one Asian market that I believe is going to outperform all the others in the coming months.

Great Buy Opportunities In Oil Will Be Few And Far Between In The Future… But One Is Coming Soon - 17.07.2008
We may see further dips in the coming months. Grim news continues to come out of the American economy. However, I still don’t see the “bubble bursting” as some commentators fear.

Has Oil Finally Topped Out? - 17.07.2008
Everyone knows oil is useful. Everyone knows the Chinese, the Indians and all the other foreigners are becoming addicted to it – just as Americans have been addicted for the last 50 years.

The Golden Age Of Lending – Part Two - 17.07.2008
Another man who is finding today’s conditions quite to his liking is Mike Johnson, who is fast recovering the fortunes of a real AIM minnow with the strange name of 1PM.

'Decent wages' Will Guarantee Inflation - 16.07.2008
"The lowest-paid member of staff tends to be the guy who locks and unlocks the office. So if he strikes, you’ve kind of got no choice!" I’ve been predicting industrial unrest for months now. As I see it, a union’s natural inclination is to demand higher pay if its members are feeling poorer. Right now, the official inflation rate is 3.8%. But if you look at the retail price index (RPI) — the measure commonly used in pay negotiations — it’s 4.6%.

Why India’s Falling Stock Market Could Mean Big Profits For UK Investors - 16.07.2008
We’ve seen 24 Indian companies list on the AIM over the last two and a half years. That gives you the chance to invest in everything from Indian infrastructure projects to clean energy providers to Bollywood film studios.

Why George Bush’s Useless Plan Is Great News For Your Oil Investments - 16.07.2008
The mains points of the plan concern development of the Colorado oil shales, the lifting of a ban on US offshore drilling, and the opening up the Arctic National Wildlife Refuge (ANWR) in Alaska.

The Financial News Has Gotten Hilarious - 16.07.2008
Ben Bernanke on the cover, looking rather serious, as he appeared before the US Congress yesterday. The poor man was expected to explain what was going on. What could he say, but that the economy was beset by “numerous difficulties?” He had to play the politician, in other words – the cunning dumbbell...avoiding at all costs saying anything useful or true.

Why The Big House Price Plunge Is Yet To Come - 15.07.2008
Fewer people want to buy, because they think house prices will fall. But fewer want to sell at the prevailing price. Some are in denial, and won’t accept that their primary asset is worth what they hoped. Others are deciding to stay put and wait for things to improve. Who’ll blink first? I’ll tell you who — the sellers. It’s already happening. House prices are gradually creeping downwards, as our climber finds toeholds and moves down the cliff. But right now, I’d say we’re on a bit of a ledge. The big plunge is yet to come...

The Hottest Market In Asia Keeps Getting Better - 15.07.2008
They’re still struggling with a 26% inflation rate but Vietnam’s central bank has been raising interest rates aggressively to bring it back down to single-digits next year. That’s good news because it was nervousness about surging inflation that led to foreign investors pulling-out of this market.

Profit Now From The Destruction Of The Dollar - 15.07.2008
The US housing crisis has resulted in an unprecedented wave of wealth destruction across the world over the last 12 months. And it’s going to get much worse before it gets better. This is good for commodities.

Give Capitalism A Chance - 15.07.2008
Despite the rescue of Fannie and Freddie, US banks, such as Washington Mutual and Cleveland’s National City, are in full retreat following the collapse of IndyMac. WaMu went down 35%...National City plunged 27%.

Three Beautiful Babies - 15.07.2008
These are companies that prove that there is life outside the wretched banking and consumer sectors. There are industries out there that are benefiting from the very trends that threaten recession.

How Peter Hambro Built Russia's Second-Largest Gold Miner - 15.07.2008
BP’s Peter Sutherland must cry his heart out when he looks at Peter Hambro. The chairman of the world’s third largest global energy company is being forced to watch the Russians turn its Russian joint venture, TNK-BP, into a patsy. Yet the equally foreign Peter Hambro seems to find building his group into Russia’s second largest gold miner a doddle.

3 Recession Investments To Make Right Now - 14.07.2008
The recession is only beginning to flex its muscles. Expect more profit warnings in the months ahead as Mr and Mrs UK continue to tighten their belts. As I say, a time to trim your stock holdings. But we don’t advise abandoning the markets completely. A useful by-product of bearish sentiment is that it uncovers value. Solid, profitable companies can be yours for considerably less than their ‘fair value’.

The New Great Game : The Struggle For Central Asia’s Energy Resources. - 14.07.2008
I’ve talked quite a bit about how China has already invested more than $30 billion in African oil and gas assets in order to lock-up a secure supply of energy for its industries. But it’s a long way from Africa to China. So, the Middle Kingdom’s rulers are looking for energy sources closer to home that are going to be harder to disrupt if there’s ever an international conflict.

Mention 'Iran' And 'Bomb' In The Same Sentence And See Your Oil Investments Rise - 14.07.2008
In any crisis gold is a safe haven – and with inflation and war fears at the top of the agenda it is no surprise that it is charging ahead again. Tight oil supply means the oil price is sensitive to any potential or implied supply shock…. And boy, there are plenty of potential supply shocks ahead.

You’ll Find Your Bottom When You’ve Forgotten To Look For It - 14.07.2008
Investors are still holding on – barely. Fannie’s shares fell to $10.25 on Friday. Freddie was down to $7.75 – for a total loss of 87% from the peak. (We previously reported that the share had traded as high as $60. Actually, the high was closer to $100. Sometimes we get the facts wrong, here at the Daily Reckoning. But it’s the interpretation of the erroneous facts that matters; of course, we get that wrong too, sometimes.)

Saving The Environment - 14.07.2008
It gives a few reasons that may seem obvious but clearly never occurred to policy makers when, in their anxiety to display their green credentials, they encouraged the use of biofuels. Specifically the EU proposed that biofuels account for 10% of energy consumption by 2020, but the Gallagher Review makes it clear that the side effects of such a rush into biofuels could do more harm than good.

Surviving The Coming Bear Market - 11.07.2008
The FTSE 100 is flirting with The Bear. But move away from the blue chips, and we see the mid caps of the FTSE 250 first entered it back in January (I'm defining a bear market as a 20% fall from the peak). The picture’s even worse if we look at the FTSE All Share. As The Times reports today...

A Fifty-day Countdown To A Potentially Colossal Gain - 11.07.2008
Now, within the next fifty days, the company is set to issue a report on the feasibility of re-opening the mine. If things go the way we believe they will, Profit Hunter readers could be set to book a massive gain on this…

Are You Ready For The Biggest One-day Rise In The Oil Price EVER? - 11.07.2008
That’s why you should keep all of your oil plays in your portfolio. The oil price is unlikely to slump while Dick Cheney is being driven around Washington in his motorcade.

When Delusion Conquers Reality - 11.07.2008
Nothing is as cheap as it used to be. Coming and going on our journey, we had to fill the gas tank twice, which cost a total of 186 euros – or about $260. We can afford it – barely. But what about people who only earn minimum wage? Or even an average income?

Unemployment To Keep Rising As Economy Weakens - 10.07.2008
What’s going on today? Well, there’s the Bank of England rate decision. The phrase ‘between a rock and a hard place’ has had a nice airing in newspapers up and down the land. What can the Bank do? Battle inflation by raising rates? Or help a weakening economy by lowering them? To the surprise of nobody at all, the Bank decided to leave rates on hold today. That won’t really help anyone...

Buy This One Share And Tap Into The Biggest Transfer Of Wealth In History - 10.07.2008
What we’re seeing right now is probably the biggest and fastest transfer of wealth and economic power in history, but our daily media is still focussing on UK retail sales blues and falling property prices. These are obviously serious concerns, but smart investors still have plenty of opportunities beyond these shores...

It Doesn’t Take Much To Be Happy - 10.07.2008
Conventional wisdom holds that inflation will not be a lasting threat. The experience of the last quarter century is that short bursts of rising prices are soon replaced by another longish period of stable ones...This was also the period in which interest rates were falling...and almost infinite amounts of money were available to increase consumer spending and production. That period is over.

What Price Iran? - 10.07.2008
This is Persian Gold, which has built a portfolio of mining projects in Iran on the sound principle that ‘while rocks do not change, politics do.’ Teeling is hoping that the west’s political relationship with Iran might change for the better next year when new leaders will be installed both in Iran and the USA.

Weren't Equities Meant To Protect Us From Inflation? - 10.07.2008
UK equity investors have double reason to feel shell-shocked. Ambushed last summer by the impact on their domestic investments of some far away problems in the US, they could at least draw comfort that the long-term case for equity investment seemed in tact. “Don’t keep your cash in a savings account – it will just be eroded by inflation,” was the received wisdom. “For inflation-beating returns, you have to invest in the stock market.” Words of wisdom indeed. Until inflation accelerated, that is.

FTSE Enters Bear Market... - 09.07.2008
Officially, we’re in a bear market if the index falls more than 20% below its peak. Yesterday afternoon, the FTSE reached that point. It closed a little higher, meaning the bear market hasn’t officially started yet. But it’s only a matter of time... So this morning, I cornered our research director, Theo. I wanted to know if he thought staying out of stocks completely is the best way to go.

Here’s Why You Should Ignore The Commodity Bears - 09.07.2008
Commodity prices have fallen in the last two days, with oil falling as much as $9 a barrel. This has prompted many commentators to call the top of the commodity bull market… but I think they are wrong.

Who Wants To Lend? And Who Wants To Borrow? - 09.07.2008
Yesterday, while the Dow rose 152 points – a weak bounce after a long streak of losses – both oil and gold fell. Gold dropped back $5, to $923. Oil lost $5 too – slipping down to $135. Commodities, generally, may be in retreat.

How To Stage An Investment Coup...Without Firing A Shot - 08.07.2008
Mann’s company also provided military training to the Angolan army as they battled the UNITA rebel movement. The first areas secured by the government’s EO-trained forces were the country’s oil- and diamond-producing regions.

Oil Supply To Tighten After Research Reveals 5 Year Wait For Drilling Rigs - 08.07.2008
China Oilfield Services, which is the listed entity of the China National Offshore Oil Corporation (CNOOC), is to buy Norway's Awilco Offshore for around $2.49bn. This has brought the number of oil rigs effectively owned by the Chinese government to 22 from 15.

Freddie And Fannie Get A Good Shoeing - 08.07.2008
Freddie and Fannie are huge government-chartered mortgage lenders. In 18th century France, speculators bet on the riches of Louisiana, through the government-chartered Louisiana Company. In the 19th century, they wagered their money on the riches of India, through the government-chartered East India Company. And in the last 20th century, they gambled on rising housing prices through Fannie and Freddie.

A Stain On Aim - 08.07.2008
The mastermind behind Darwen is the same Roy Stanley, who in a series of deals expanded Tanfield rapidly in the areas of electric vehicles and powered access. Now Tanfield has been hit by manufacturing problems at its electric vehicles division and a downturn in demand for powered access machinery. Its cash position does not appear to be as good as was thought and the shares have crashed spectacularly.

An Oil Company With Assets Worth 7,000 Times Its Shares - 08.07.2008
The company in question is worth less than £100 million at today’s share price. Yet it’s recently discovered an oil resource worth more than $1.4 trillion at today’s oil price. In pounds sterling, that’s over £700 billion — or more than SEVEN THOUSAND TIMES this firm’s market value...

Rising Unemployment - The Newest Phase Of The Economic Slowdown - 07.07.2008
We know all about Britons’ personal indebtedness – and so do the loan sharks. But now the economic slowdown is entering a new phase – rising unemployment. Last week Taylor Wimpey shed 900 jobs. Today we read that another home builder, Persimmon, is to lose 1,000. In the past week, the construction sector as a whole has added 3,200 bodies to the unemployment count.

On The Trail Of The Bin Laden Billions - 07.07.2008
The mastermind behind this proposal is Tarek bin Laden, half-brother of the more colourful Osama. His Tarek Bin Laden Construction has been negotiating with the governments of Yemen and Djibouti about plans for a massive 28.5km bridge that will span the Red Sea.

Food Prices Will Continue To Rise – Here’s How To Profit - 07.07.2008
I see little chance that Britain will take the lead and scrap biofuels targets – this is very bad for the world’s poor, but it makes the outlook for our food investment very rosy indeed.

Capitalism Rewards The Good, Not The Nice - 07.07.2008
Even today, we’ve seen estimates that the entire world’s population could be fed on what America COULD produce. But when the US got squeezed by high energy prices, Americans decided to squeeze energy out of their own food crops. Result: they pay record prices for energy AND food.

How Pringles Make The Lawyers Fat - 07.07.2008
That is £100,000 of tax-payers money being transferred into the fur-lined pockets of lawyers, who no doubt took the case frightfully seriously, spun it out for months and months, and came to Court with the mountains of paper that they think justify the huge fees that they charge.

Randgold Still Has The Ingredients For Success - 04.07.2008
There’s nothing like a roaring gold price to bring out the forecasters! Investors are scuttling for a refuge from the slumping dollar and surging energy costs. And low and behold, Citibank, Gold Fields and leading US coin dealer Blanchard, to name a few, all see $1,200 gold on the horizon! Randgold first roused our interest back in July 2007 when the share price hovered around R12. By April 2007 it reached R28 – a gain of more than 130%!

Who Should We Believe? The PM Or The Chancellor? - 04.07.2008
Alistair Darling said yesterday that everything’s fine. We won’t have a recession. The economy will continue to grow. Gordon Brown, on the other hand, said there are "difficult times" ahead. He urged pay restraint. He believes the public purse is set for a hammering — and he’s blaming it all on that dastardly oil price. One is upbeat, the other a prognosticator of doom. Now, I don’t want to oversimplify this, but there’s a basic question to be addressed here. Just how bad are things going to get?

It’s 4th July, And Americans Are More Dependent Than Ever - 04.07.2008
It is Independence Day...and Americans have never been more dependent on the kindness of strangers. The foreigners have some $4.8 trillion on currency reserves – most of it dollars.

Political Risk – And How To Avoid It - 04.07.2008
You need to be an expert in politics and in local mining regulation to weigh up the attractions of one country versus another. But still junior mining companies do not have the ability to spread risk across several countries, and quite understandably they go to places where they believe they might make a real strike, and trust that the political side of things will take care of itself.

House Sales Down... Car Sales Next? - 04.07.2008
It was banks that felt the UK credit squeeze first, then the housebuilders, as underlined by yesterday’s funding problems at Taylor Wimpey. And what, after homeownership, is the typical Brit’s next biggest purchase or aspiration? Yes, it’s the car. And, despite the desperate revival of 0% car finance – a product not seen on these shores for years – the punters have no reason to buy. There’s pain on the horizon for everyone connected with the automotive industry, in both manufacturing and retail.