Month: March 2013

By WallStreetDaily.com

More than a month after its initial launch overseas, Research in Motion’s (BBRY) BlackBerry Z10 smartphone is now available in the United States.

Needless to say, there’s a lot riding on this debut.

As you know, BlackBerry used to be the smartphone before Apple’s (AAPL) iPhone and Google’s (GOOG) Android operating system came onto the scene.

Now it’s struggling with less than 6% market share.

Will the Z10 give BlackBerry the boost it needs? The jury is still out.

However, according to Kevin Burden, the Director of Mobility at Strategy Analytics, pre-sale numbers indicate that it will at least have a solid start:

“It certainly appears when we look at the pre-orders, it appears as though BlackBerry will have a successful first weekend. There are enough good reviews around its hardware, around its platform and certainly a lot of pent-up demand from the BlackBerry faithful that should make this first weekend very good.”

Article By WallStreetDaily.com

Original Article: BlackBerry Z10 Gets a Respectable Start Stateside

By Chris Hunter, insideinvestingdaily.com

Last week, investors got more happy news. The Fed announced it would
keep printing $85 billion a month to buy Treasury and agency
mortgage-backed bonds.

By printing money and buying bonds (aka monetizing debt),
the Fed is going to keep shooing investors out of bonds and into
stocks… funding government spending… and pushing up inflation rates
to make outstanding debt easier to pay back.

And not only that, but it’s also going to keep doing so until the
unemployment rate becomes “acceptable” again – in other words, as far as
the eye can see. The one thing that has not responded to the Fed’s
credit and cash deluge is the unemployment rate, which is still at 7.7%.

Against this backdrop, stocks have been rallying. And the big question everyone is asking is: Should they join the party?

Frankly, this is a terrible question. I can virtually guarantee that
if this is the way you think about investing, you’re going to have a
miserable time in the markets over the long run.

Here’s how my friend and legendary resource investor Rick Rule put it recently (with my own emphasis added):

Speculating on the events that are
certain or almost certain to occur is almost always more profitable than
gambling on a long shot, unlikely occurrence. Make investments based on
unlikely scenarios only when the potential risks and rewards are disproportionately in your own favor and you can afford the loss that you may incur.

This is the only question that matters: Are the potential risk and rewards disproportionally in your favor?

Usually that happens when you can buy a stock… or other investment
asset… at a price that is below its intrinsic value. It certainly
doesn’t happen when you rush out and buy something because: (a) everyone
else is buying or (b) because you think you can find a “greater fool”
to buy something that is already overvalued.

So are the risks and rewards of following the crowd into U.S. stocks disproportionately in your favor right now?

To answer that question, let me share with you an observation made by
bearish fund manager John Hussman recently. Then you can decide for
yourself.

[Two weeks ago], Investors Intelligence
reported that the percentage of bearish investment advisors has
declined to just 18.8%. The last time bearish sentiment was below 20%,
at a four-year market high and a Shiller P/E above 18 (S&P 500
divided by the 10-year average of inflation-adjusted earnings – the
present multiple is 23) was for two weeks in May 2007 with the S&P
500 at about 1,525.

The next instance before that was two
weeks in August 1987 (bearish sentiment never dipped much below 27
approaching the 2000 peak except for a reading of 22.6 in April 1998,
just before the Asian crisis). The next instance before that was for
three weeks of a five-week span in December 1972 and January 1973, which
was immediately followed by a 50% market plunge.

Now, I realize this isn’t the kind of analysis you’ll find on CNN
Money or CNBC. But it’s vitally important because it shows you what has
happened in the past when we have had the same kind of market setup we
have today.

Here’s a chart of what happened after the most recent instance of this same setup – in May 2007.

View Larger Image

I am not saying that stocks are destined to plunge again. They may or
they may not. I’m simply pointing out that the kind of sentiment
readings we’re seeing today mixed with the kind of valuations we’re
seeing today have not been a recipe for profits in the past.

The risks and rewards, in other words, have NOT been disproportionately in investors’ favor.

Forewarned is forearmed, as they say.

Good investing,

Chris

London Gold Market Report
from Ben Traynor
BullionVault
Monday 25 March 2013, 08:45 EST

U.S. DOLLAR gold prices fell back below $1600 per ounce Monday morning in London, falling
back towards where they started last week, as stocks and commodities gained after news that
Cyprus has agreed a bailout deal.

“We expect gold to move sideways this week with, however, a tendency for lower prices,” says a
note from precious metals refiner Heraeus, adding that it saw increased demand for investment gold
bars, with gold “much influenced by worries over Cyprus”.

“[Gold’s] price action remains well below the uptrend which was broken in February,” says the
latest technical analysis note from bullion bank Scotia Mocatta.

“There is a major base of support in the $1522 area, which will be pivotal to the long-run trend; the
risk is for a test of this low.”

Silver meantime dropped below $28.60 an ounce, while US, UK and German government bond
prices also fell.

Cyprus has reached agreement with international lenders over a €10 billion bailout deal. The
country’s second-largest lender Laiki will close, with shareholders, bondholders and uninsured (over
€100,000) depositors set to take losses.

The largest bank, Bank of Cyprus, will take over those assets of Laiki deemed viable. European
Union officials have said uninsured depositors at Bank of Cyprus should not lose more than 40%,
Bloomberg reports.

The deal also “safeguard[s] all deposits below €100,000 in accordance with EU principles,” says a
statement from the Eurogroup of single currency finance ministers. An earlier plan, unveiled a week
ago but rejected by the Cypriot parliament, would have imposed a 6.75% levy on deposits below
€100,000 and a 9.9% levy on those above that level.

“This solution…doesn’t have the downsides that the solution of last week did,” said Jeroen
Dijsselbloem, Dutch finance minister and Eurogroup chair, adding that the agreement now reached
was not one of the “political possibilities” a week earlier.

“The Cyprus situation is a dramatic situation but it was well managed,” reckons Dider Duret, chief
investment officer at ABN Amro Private Banking in Amsterdam.

“It has not turned into a big systemic fear. We’re not in the abnormal years of the big systemic risks
that we’ve seen with Greece or Lehman.”

The agreement means that the European Central Bank will not carry out its threat to cut off
Emergency Liquidity Assistance to Cyprus’s banks today as it warned it would do if there were no
deal and it had reason to believe banks were insolvent.

In the US meantime, the difference in the number of ‘bullish’ long minus ‘bearish’ short contracts
held by gold futures and options traders classed as noncommercial, that is managed money such
as hedge funds, rose 3% in the week ended last Tuesday, weekly data published Friday by the
Commodity Futures Trading Commission show. The rise took the so-called speculative net long
position to its highest reported level since November.

“The gold price rise in the period under review was supported by financial investors,” say analysts
at Commerzbank,”as a result of which short-term investors have evidently acquired greater
influence again.”

“The underlying moves also smacked of a keenly bullish attitude,” says a note from Standard Bank,
adding that short positions were unwound on aggregate while the number of long positions went
up.

Last month saw the number of short gold futures contracts rise to its highest level this century.

“The impact of recent events for Eurozone crisis-management ahead offers underlying support for
gold,” says UBS.

“The fragile situation in Europe combined with the recent display of vigor from physical demand
would make shorts think twice before moving as aggressively as they did last month.”

Over in India, traditionally the world’s biggest gold buying nation, “demand [for gold] is very thin”
one trader at a state-run bank told newswire Reuters this morning.

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership
service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-
running investment letter. A Cambridge economics graduate, he is a professional writer and editor
with a specialist interest in monetary economics. Ben can be found on Google+

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best
place for your money, and any decision you make will put your money at risk. Information or
data included here may have already been overtaken by events – and must be verified elsewhere –
should you choose to act on it.

Global markets on positive footing Monday, with U.S. stock futures rising and European stocks sharply higher after Cyprus reaches a deal that will prevent its banking system from collapsing. Jyske Bank’s senior strategist, Ib Fredslund Madsen, expects the positive vibes to continue the entire week.

Legal information

Video courtesy of en.jyskebank.tv

By www.CentralBankNews.info     Vietnam’s central bank cut its benchmark refinancing rate by 100 basis points to 8.0 percent, as expected, saying inflation was under control and at a low level but firms have faced with numerous difficulties in expanding their output and business.
    The State Bank of Vietnam, which cut rates by 600 basis points in 2012, said its discount rate had also been cut to 6.0 percent from 7.0 percent along with the overnight rate in the interbank market, which has been cut to 9.0 percent from 10.0 percent.
   Vietnam’s consumer price inflation rate fell by 0.19 percent in March from February for an increase of 2.39 percent from the end of 2012, the central bank said.
    It attributed the low rate of inflation to joint measures together with the government, ministries and agencies.
   On an annual basis, Vietnam’s inflation rate was steady at 7.02 percent in February from January’s 7.07 percent.
    The State Bank also said liquidity in the banking sector had improved while money markets, the exchange rate and inter-bank rates have been stable. International reserves have risen.

    “However, production and business have faced with numerable difficulties due to the decline of the market’s purchasing power, and the limited absorption of banking capital resources for recreating and expanding production and business,” the central bank said.
    Last month Vu Duc Dam, head of the government office, told reporters that the central bank would cut interest rates and the level of bad debt in the banking system has been cut to 6 percent from 8.82 percent.
     In 2012 Vietnam’s economic growth eased to 5.03 percent from 2011’s 5.9 percent.
    
    www.CentralBankNews.info

By Bill Bonner, billbonnersdiary.com

“Can you by legislation add one farthing to the wealth of the
country?” The great classical-liberal thinker Richard Cobden asked the
House of Commons on Feb. 27, 1846.

The Argentines think so. So do the Europeans. And of course, the Americans.

But first let us continue with Cobden’s remarks:

“You may, by legislation, in one evening, destroy the fruits and
accumulations of a century of labour; but I defy you to show me how,
by the legislation of this House, you can add one farthing to the wealth
of the country.”

Two news items yesterday reminded us how vain and treacherous the politicians can be.

Uh Oh!

First, from the Argentine press came a story with the following headline: “Kirchner Government to Tighten Capital Controls.”

Uh oh! It’s already a pain in the neck to try to keep the lights on
south of the Rio de la Plata. If you move money into the country
officially, you will take about a beating. Officially, the exchange rate
is under six pesos to the dollar. But guys will come up to you on the
street and offer you eight pesos to the dollar – and more.

In Salta, for example, you pull up in front of a bank at the corner
of the central square. You beckon to one of the many money changers
standing on the sidewalk. You don’t get out of your car.

“How much do you want,” he asks.

“I want to change $1,000,” you reply.

“Then, I’ll give you eight.”

“No thanks,” you say… shooing him away.

“Alright, 8.1.”

“OK… we have a deal.”

You count out your money and go on your way. No standing in line. No
need for photo IDs. Cash and carry. Remarkably efficient. As long as you
stay in the black market. You can spend your money, no problem.

But try to do business in an aboveboard way and you will quickly be
caught in a trap. The government is running out of dollars. It tries to
force you to give up dollars at less than the market rate.

Already, these controls have driven many imported products off the
market completely. And now, with even stricter controls coming, it’s
going to get even tougher.

But what would you expect from Argentina? Is there any foot in the Argentina banking system

that isn’t missing at least a couple of toes? Give them a super-stupid policy “gun,” and they will aim for their feet.

The Turning of the Screw

Europe is a different matter. Or so we thought. More sophisticated.
More subtle. More careful. Run by German bankers with memories that
stretch all the way back to the Weimar debacle of the 1920s.

But here’s another story from yesterday’s news. You’ll see that Europe is thinking of imposing the same capital control policies that are hobbling the Argentine economy. From Reuters:

Eurozone finance officials acknowledged
being “in a mess” over Cyprus during a conference call on Wednesday and
discussed imposing capital controls to insulate the region from a
possible collapse of the Cypriot economy.

“In detailed notes of the call seen by
Reuters, one official described emotions as running “very high,” making
it difficult to come up with rational solutions, and referred to “open
talk in regards of (Cyprus) leaving the eurozone.”

“Some additional laws need to be
passed. Overall we are in a very difficult situation,” the official
said, according to the notes. “(We’re) trying to do everything within
the powers to limit any unauthorised outflows.”

We hope you are paying attention, dear reader. The euro feds are
talking about passing laws to stop “unauthorized” outflows. In other
words, they will make it illegal for you to put your money where you
want. You will need their permission to move it. They want it right
where they can get it… if they need it.

They think they can pass laws and add to the wealth of the nation –
or at least parts of it. And it won’t be too long before Americans join
in. They’re already robbing savers with ultra-low interest rates. And
the U.S. has already passed laws to make it difficult to keep funds in
foreign bank accounts.

As their financial problems mount, the feds will turn the screws harder – just like the Europeans and the Argentines.

Regards,

Bill

By www.CentralBankNews.info

By MoneyMorning.com.au

Even though the newsletter I write for Casey Research is focused primarily on gold, our metals investments cover all the precious metals, and when warranted, some base metals plays too. And with the markets in the state they are, I want to say something about silver…

My talk at the Vancouver Resource Investment Conference in January was titled ‘Is D-Day for Silver Approaching?’, and highlighted the delicate balance between supply and demand. I concluded that there would be insufficient precious metal to meet a major spike in investment demand if it were to occur, leading to all kinds of negative consequences for those who don’t own silver (and lots of wonderful rewards for those who do).

I had plenty of compelling charts and convincing data. But here’s the rub: I don’t believe that what’s ahead for the price of silver and gold will have anything to do with that data. After all, there are articles from researchers and analysts that use similar data to paint a bearish outlook for the metal.

Instead, my reasoning is based on psychology. Here’s a good example…

At a recent outpatient hospital visit, the nurse ran through the usual background questions, one of which was what I do for a living. I told her, and this was her response:

‘Oh, gold. That’s exciting. But it’s too expensive for me. I can’t afford it.’

Now, this is an RN in a hospital – someone who earns a good living and can afford to take a vacation and eat at the occasional fancy restaurant. She has money to buy birthday presents for her kids and probably contributes to a retirement account.

But when the value of money begins to erode more seriously and inflation makes front-page headlines, and my nurse turns to precious metals to gain some semblance of lifestyle protection, what is she going to buy? If she can’t ‘afford’ gold now, it won’t be any ‘cheaper’ later.

She’ll buy silver. And so will a lot of other panicked investors who don’t think they can ‘afford’ gold and are watching their purchasing power relentlessly decline. It will drive prices higher. Perhaps wildly so.

The effect on the availability of bullion is obvious and will be all negative – high premiums, delayed delivery, and mandatory rationing. For those of you who’ve followed our lead and purchased bullion, consider this: you’ll be paid above spot for any ounces you sell during this time.

The message is crystal clear: if you don’t have a meaningful amount of silver bullion, buy more now.

Why Silver Will Outperform Gold

This is why I’m not worried that the silver price continues to be range bound. Precious metals will be pursued by an alarmed and increasingly angry citizenry as their money loses more and more value. And just like my nurse, many will find silver more affordable. The result is that silver’s percentage gain will almost certainly be much greater than gold’s.

Meanwhile, the ramifications for silver producers are all positive. Revenue will jump. Earnings will rise. Dividends will increase. Stock prices will soar. And given the small number of stocks of primary silver producers trading in the industry, the rise in their share prices could be breathtaking.

This may seem like a distant scenario. And there will be retreats along the way, based on the false appearance of economic recovery – but these will just be last-gasp buying opportunities.

Don’t worry about the timing. Whatever happens in the near term, global economies cannot avoid the fallout from currency abuse indefinitely. History has repeatedly shown this. We don’t know if the shift to price inflation will be sudden, occur in fits and jolts, or appear in a slow dawning, but escape it we will not.

Make sure you own some silver bullion, my friends. And then buy the grossly undervalued miners.

Jeff Clark
Contributing Editor, Money Morning

Join Money Morning on Google+

From the Archives…

Why You Should Buy This Falling Stock Market
22-03-2013 – Kris Sayce

Stock Market Warning: Part II
21-03-2013 – Murray Dawes

New Developments on Whether You Can Get Your Mortgage Cancelled
20-03-2013 – Nick Hubble

Your Retirement or Your Mortgage?
19-03-2013 – Nick Hubble

Get Used to This Stock Market Action, It’s Set to Last…
18-03-2013 – Kris Sayce

By MoneyMorning.com.au

Is that it?

Is the Cyprus crisis over?

That seems to be the message coming out of Europe…or not.

If it is over, it means you can rest easy now…until the next crisis hits.

In last Friday’s Money Morning we explained why it’s a mistake to sell this stock market. In fact, we laid it on the line and told you to buy this market.

Today, we’ll give you another reason, and provide ‘proof’ that despite the talk of crisis, this is the best time to buy a certain class of stocks…

Our old pal, Diggers & Drillers editor Dr Alex Cowie, spent last week mixing it up with the resources elite at the Hong Kong Mines & Money conference.

As you may have read in the reports he sent back, he’s as bullish as heck about the prospects for gold and gold stocks. And he’s not the only one.

One of the keynote speakers was gold and silver investing guru Eric Sprott. The Doc sat down with him on Friday morning to chew the fat over the commodities markets, and especially gold.

As Alex wrote on his Google+ page over the weekend:

‘I spent the whole morning today with Eric Sprott, who manages an $11 bil precious metals fund, and he was kind enough to do a half hour interview with me at the end.

‘It was a cracking interview and I’m relieved as all hell that he agrees fully with me that gold stocks are on the verge of massive moves.’

We hope to get excerpts of the Doc’s chat with Eric Sprott to you as soon as we can.

This Stock Market: Buy When No One Else is Buying

To be honest, the Doc’s views on gold played a big part in our decision to tip two gold stocks in the March issue of Australian Small-Cap Investigator…the first time we’ve tipped a gold stock in more than two years.

One of the clinchers was a nifty little chart the Doc included in his presentation at the Hong Kong Mines & Money conference:

As you can see on the chart, the Doc circled periods when the stock market has reached extreme pessimism. At those points, the gold price has sold off and mainstream commentators have run up the flag announcing the end of the gold bull market.

Only, each time they’ve gotten it wrong. Gold has continued to rally, and while we’re not convinced gold will take out the all-time high this year, you won’t find us betting against gold finishing the year in the black.

Looking at the chart it seems as though the Doc has missed out a few other times when gold has dipped as pessimism has taken hold.

To our mind, this chart is as good as proof that gold is about to march higher. It’s already gained USD$40 since the start of March. That was when plenty of folks said the gold price had started a precipitous fall.

There’s More to High Stock Prices
Than High Commodity Prices

However, the gold price isn’t the same as gold stocks, as the following chart demonstrates:

The blue line is the SPDR Gold Trust (ETF) [NYSE: GLD], which tracks the US dollar gold price. The red line is the Market Vectors Gold Miners ETF [NYSE: GDX], which tracks a range of small, medium, and large gold stocks.

As you can see, since 2006 the GLD has gained 169%, while the GDX has gained just 10.6%.

You’ll note that both ETF’s tracked each other until global markets started to crash in 2008. Then they diverged. Why? This goes back to what we wrote in the March issue of Australian Small-Cap Investigator.

A rising commodity price is only part of the equation when it comes to rising stock prices. You also need two other parts: economic growth (especially in China), and credit expansion.

You’ve had both of those to some degree. China is still growing by about 7.5% per year. And central bank money printing has created some credit expansion. Trouble is, neither have fully filtered through to all parts of the economy.

So at the moment the stock market is lacking a key fourth factor: confidence.

And it’s pretty hard for confidence to take hold when governments worldwide are looking at any way possible to get their mitts on private savings – taxing bank accounts and nationalising retirement accounts.

Not the Time to Sell

But as bad as that all sounds, we believe an epic bull market run is on the cards. With the stock market recently trading at its highest point since 2008, thanks largely to gains by dividend stocks, our analysis tells us that investors will soon start putting their money to work in a different type of stock – growth stocks.

That won’t happen overnight. And it may not even happen within the next few months (that’s why you’ll see a lot of volatility in dividend stocks as they range between ‘expensive’ and ‘cheap’).

But based on what we’ve seen of the stock market’s behaviour here and overseas, it’s only a matter of time before the epic bull run begins.

Commodity prices are high. The Chinese economy continues to grow. And credit markets continue to recover and expand. That’s pretty much the three ingredients that caused the stock market to boom from 2003 to 2007.

All that’s remaining is investor confidence. But if you think back to that time, you’ll remember that investors had the confidence knocked out of them more than once during that four year run, and yet stocks gained 127%…more than doubling the performance of the Dow Jones Industrial Average.

If we’re right, we’ve barely begun this bull run, and it’s only a matter of time before growth stocks lead the stock market higher. As we said last Friday, this isn’t the time to sell stocks…it’s time to buy.

Cheers,
Kris
Join me on Google+
From the Port Phillip Publishing Library

Special Report: Australia’s Energy Stock BLOWOUT

Daily Reckoning: The Global Property Obsession Continues

Money Morning: Mountains of Natural Gas and Oceans of Sunlight

Pursuit of Happiness: The Bright Side of the Cypriot Banking Crisis

Australian Small-Cap Investigator:
How to Make Money From Small-Cap Stocks