Month: September 2013

By Profit Confidential

The stock market surged on Monday, but it wasn’t due to the report of any major positive economic data.

The S&P 500 surged on news that stimulus-friendly Fed Vice Chairman Janet Yellen may become the next leader of the Federal Reserve after front-runner Lawrence Summers announced his withdrawal. The boost to the stock market was due to the assumption that Summers was a supporter of tapering and less monetary stimulus.

Yet while the upward move was welcomed by Wall Street, it’s not what the U.S. economy needs. What the stock market and America really need are stronger economic numbers that support the rise in the stock market.

We need to see the jobs market picking up instead of losing steam, as was the case in August. After spending trillions of dollars on stimulus, we still need more growth in the economy.

Also, with the third quarter coming to an end in a few weeks, we need to see a boost in earnings in corporate America as a result of revenue growth, not because of aggressive cost-cutting and income manipulation. Revenues are estimated to grow 2.6% in the third quarter, according to FactSet. (Source: “Earnings Insight,” FactSet Research Systems Inc., September 13, 2013.) The estimate has already been revised downward from the three percent in June, so I’m skeptical.

If the economy was truly healthy, we should be seeing consistent jobs growth, better manufacturing data, higher consumer spending, and rising corporate revenues.

These are the reasons why the stock market should advance higher, and not simply because the easy money is allowed to flow unabated into the economy. When this happens, it opens up the stock market to potential issues and selling down the road.

According to FactSet, earnings growth for the S&P 500 in the third-quarter earnings season is estimated at 3.5%, with the financials leading the way and healthcare trailing the group.

But as of September 13, about 88 S&P 500 companies have issued negative guidance for the third quarter, versus a mere 18 issuing positive guidance. The negative guidance representing 83% of the companies that have issued guidance is well above the five-year average of 62%. In my view, this implies corporate America is shakier now than in the past few years.

The stock market should advance based on solid fundamentals with reference to the economy and the companies. The problem over the last few years is that many poorly performing companies moved higher only because of the overall momentum of the broader stock market. Without the support of solid fundamentals, these companies could easily plummet on the charts. (Learn how to protect your investments from the Fed-induced stock market in “Worried the Market Will Crash, but Don’t Want to Sell Your Stocks? Buy This Insurance Policy.”)

With the third-quarter earnings season set to begin in a few weeks, it will be important to see if revenues are growing to drive earnings. If this is the case, then I would be more bullish.

Article by profitconfidential.com

By Profit Confidential

There’s a notion among central banks of the global economy that goes like this: if you lower interest rates, you will get economic growth. On the surface, it makes sense; easy monetary policies by central banks are supposed to bring confidence to an economy—they’re supposed to encourage consumers and businesses to borrow, which should translate to more jobs created and an improvement in the standard of living.

This phenomenon of lowering interest rates to spur the economy has spread through the global economy like wild fire.

Interest rates at the central bank of Australia have been trending lower since the financial crisis. In December of 2007, the cash rate (the benchmark interest rate) there was 6.75%. Fast-forwarding to today, this rate is 2.5%. (Source: Reserve Bank of Australia web site, last accessed September 16, 2013.)

Brazil’s central bank has lowered its benchmark interest rate since the end of 2008. The interest rate dictated by the country’s central bank stood at 13.75% near the end of 2008; now it stands at nine percent. (Source: Banco Central do Brasil web site, last accessed September 16, 2013.)

The benchmark interest rate in South Africa is down almost 50%. The South African Benchmark Overnight Rate (SABOR) was above 10% near the end of 2007. Now it stands at 4.82% and has been hovering around this level for some time. (Source: South African Reserve Bank web site, last accessed September 16, 2013.)

While we’ve been watching this happen, no one is really asking the question how are interest rates being kept low? The answer: to keep the interest rates low central banks print more paper money and stay involved in their bond markets.

Since central banks in the global economy started to lower their interest rates, their money supply has gone up significantly. For example, since the last quarter of 2007 to the second quarter of 2013, Brazil’s M1 money stock (the amount of notes and coins in circulation plus timed deposits, such as checking accounts) has increased over 52%. (Source: Federal Reserve Bank of St. Louis web site, last accessed September 16, 2013.)

But in spite of all the money printing and other games being played by central banks in their effort to keep interest rates down, the global economy isn’t seeing robust growth. The International Monetary Fund (IMF) has lowered its expectation on growth in the global economy repeatedly.

Hence, despite their easy money policies, central banks are failing in their attempts to revive the global economy. But what are the long-term effects of all this newly created money? One thing that really does concern me is inflation at the global level.

While the skewed government numbers don’t show it, inflation is a problem right now. Eventually, inflation will be reflected in the government stats. And to control that inflation, higher interest rates will be required. In fact, the massive jump in the yield of the 10-year U.S. Treasury bond (from 1.84% at this time last year to 2.85% today) is warning of inflation ahead.

The 30-year downtrend in interest rates may have finally come to an end. As an investor, you need to look at your investments (and your debt) and realign your affairs accordingly to account for higher inflation and higher interest rates ahead. And you better do it now before it’s too late!

Article by profitconfidential.com

USDCHF breaks below 0.9147 support, suggesting that the downtrend from 0.9751 (July 9, high) has resumed. Further decline could be expected after a minor consolidation, and next target would be at 0.9050 area. Resistance is now at downward trend line on 4-hour chart, as long as the trend line resistance holds, the downtrend from 0.9455 will continue.

Provided by ForexCycle.com

By MoneyMorning.com.au

Today was a breath of fresh air. And of all the sessions, speakers and exhibition stands that SIBOS has thrown at me, the biggest buzz was held out for today.

It was the grand final of the Innotribe Start-Up challenge. It was a chance for the best start-up companies in Financial Tec (FinTech) to pitch and showcase their company in six minutes.

Although there was considerable buzz, you could feel the pressure on some of these companies. Up for grabs was $50,000 in prize money, which for these start-ups would be vital in getting their products to market.

Organisations like Innotribe are vital for small young companies like those on display today. It puts these start-ups in front of the big business they want to sell and distribute their products to.

But it wasn’t just prize money up for grabs. A successful pitch could translate to millions of dollars in funding from the right investor. Add the credibility and distinction of the win, and it was high stakes competition.

It’s competitions like this, put on by groups like Innotribe, that could spark the next great tech company. It’s very possible one of the nine start-ups in this grand final could go on to be the next PayPal, Square, Mint or Xero.

Of the nine pitching companies, three were micropayments start-ups. Essentially their angle is to bank the unbanked of the world. The billions of people that don’t operate a bank account still often need to send and receive money.

To do that through traditional bank channels or companies like Western Union is expensive. Fees can be 10% to 20% of the transaction cost. Often the payments are as low as $100 too. So it’s a big whack for people who haven’t got a lot of cash to begin with.

Of course every one of the new payment companies wants to be the next big thing. Downside is they’re competing in a hot space. There are a number of companies already involved in micropayments that are low cost, easy and quick to use. Some established companies (although new themselves) are already billion dollar businesses.

But with potentially billions of users up for grabs there’s space for a few competitors. Africa is still the key target, with Asia and the Pacific not far behind. It’s an interesting space.

I spoke with Michael Kent, CEO and Founder of Asimo, one of the start-ups. Asimo was one of the three pitching as a payments company. I’m sure you’ll be hearing a lot more about this group in the coming months. They were particularly impressive.

Michael pointed out at the moment 25% of their flow goes through Poland. But they’re only in early phase development. Although with their focus on customer satisfaction and ease of use in the digital age they might be onto something.

Asimo was the first company in the world to enable money sending through Facebook. It’s clear to see the passion they have for change to a better system. And I think they’re on their way to some longer term success.

Australian Innovation on the Global Stage

Another one of the most impressive start-ups to pitch was an Australian company, PocketBook. Alvin and Bosco are the founders, and by far and away had the best pitch, the most enthusiasm and concept of what a good tech company is all about.

I enjoyed how they handled one question from the crowd during the Q&A. The question was, ‘How do you make money?’ Although they answered the question, they didn’t really have a clear-cut answer.

There’s two reasons I liked their lack of a response. One, because their focus is front and centre on solving an unmet need. That is they’re building a platform and technology first. They’re building and caressing an idea to life…then worrying about how to make money from it.

As I’ve mentioned previously, it’s a similar mentality Silicon Valley takes to new businesses and technologies. First you build great technology, something that solves a problem.

Think of how you can change the world first. Then you find a way to make money from it. If the idea is good enough and the technology is sharp enough, the thing will practically sell itself anyway.

Of all the start-ups there, Pocketbook seemed to have the most entrepreneurial flair of all their competitors.

They didn’t win, but in a room full of bankers I wouldn’t have expected them to either. And that’s the other great shame about the competition.

You’d Think Banks Would Be Interested in Innovation…They’re Not

Innotribe put on a brilliant competition. And to be fair, all the start-ups were excellent. There were some pioneering ideas and technologies. But the room was only three quarters full.

Over the whole week, this was the ONLY session showcasing brand new companies all less than a couple of years old with under $1 million in turnover.

Now there is something like 7,000 delegates at SIBOS this week so I got to this session half an hour early. I thought I wouldn’t get a seat.

I was expecting queues out the door. People clambering over themselves to see what some of the best start-ups in the world had to offer. If I were one of the major banks, I would have had every major decision maker in the session.

I had two empty seats next to me and even saw people walking out during some of the pitches! It was a bigger reflection of the narrow mindedness of the incumbents in the banking and finance world.

I’ve written over the last few days that banks are losing trust. You only need to look at Pocketbook to understand why. With over 35,000 users in Australia already, the Pocketbook app requires access to your bank account and email to work their tech magic. Having seen the app and what it can do, how easy it is and the benefit it would have to managing my money…I’d be more than happy to provide that level of access.

But ask me if I’d give any of the existing banks that I use access to my email? No way. If CBA came to me and said can we use your email to help you manage your money better, I’d tell them to nick off. Same for Citibank, or Bank of Melbourne.

It was pleasing to see some homegrown Australian talent on the global stage. And more importantly it was pleasing to see something truly innovative and mould-breaking in FinTech,

The Pocketbook guys might not have won. But they certainly got my vote.

Start-ups like these are vital as we shift towards a new future of money. It’s companies like Asimo and Pocketbook that will be the household names you hear over the next few years.

You might not necessarily agree, and you might continue to use your existing banks and manage your money perfectly well. But as I wrote yesterday, the Digital Natives of this world will be looking for companies that fit their psychological framework.

Companies that get how they think and work and tailor solutions to their problems. And it’s the digital native of tomorrow that will be the customers Asimo and Pocketbook.

It’s best summed up by something the Pocketbook guys said in their pitch and a question I posed to you on Tuesday.

If Google become a bank, what would it look like? The fact that was the only question Pocketbook asked itself before building their platform is the exact reason why they’re going to be successful.

It’s also the reason why the world of FinTech will help to shape the future of money. The revolution in banking and finance is underway. As more start-ups grow and come to market, the picture will become clearer for those of you that doubt things are undergoing significant change.

Sam Volkering+
Technology Analyst

Ed note: You can follow Sam at SIBOS on his Google+ page here… 

By MoneyMorning.com.au

We started writing today’s Money Morning yesterday evening.

Why? It was an act of defiance.

We wanted to prove to you that the world of investing doesn’t revolve around the comings and goings of Dr Ben S Bernanke and his US Federal Reserve.

We wanted to point out that as much as central bank meddling may have a short-term impact on markets, it has nothing approaching the impact of other more exciting and important events.

And so today we wanted to wiggle our derrière in the general direction of the US Fed and ignore all things taper.

And when we woke up to the news this morning, we couldn’t help ourselves – ‘Nailed it.’ We knew there was virtually no chance the Fed would do anything to spoil the stock rally, and we were right… 

See if you can pick the moment when the Federak Reserve revealed it wasn’t scaling back its bond buying program:

Source: Google Finance

Well spotted. It wasn’t that difficult was it?

What surprises us most is that so many investors appear to have been blindsided by what was completely obvious – even to an old hack like your editor.

The Fed is current part-way through a five-year experiment in irregular monetary policy principles. With the US economy and unemployment still in a mess it’s laughable to think the Fed would pull back from the brink now.

We’re certain that in their mind there is still so much more they can do. And this morning they’ve proved it.

Rates Going Nowhere

Now, this isn’t to say it was a slam-dunk. If we thought that we would have told you to bet your house on the market. But we don’t like betting on macro-economic events.

There’s no telling exactly how the market can interpret them. The one thing we’re 100% sure about is that the Fed intends to keep interest rates as low as possible for the foreseeable future.

That’s why throughout this whole mess we’ve been one of the few analysts in Australia to recommend that investors stay invested in stocks. Hopefully that approach will continue to pay dividends with a strong performance today.

All this shows you exactly why we prefer to focus on the individual companies that make up the market. You can’t know for sure on what whim the Fed will act, so it pays to not show it too much attention.

But we do know something else. Over the past two weeks and the next three weeks, nine of the Australian Small-Cap Investigator stocks picks have gone or will go ex-dividend. With a combined share price of $19.64, they’ll pay out a total of 42.25 cents in dividends.

That’s for a combined dividend yield of 2.2%.

Now, that may not seem like a bumper haul, and we’ll agree it isn’t. But when you add in capital growth plus the fact that some of these stocks have a low yield due to expectations <a
rel=”nofollow” href=”http://pro1.portphillippublishing.com.au/148477/” target=”_blank”>they’ll pay a higher dividend in the future, it’s a pretty good return.

Buy Stocks Before the Rally Ends

The reality is there are companies all over the Australian market doing, making, creating and innovating things.

They’re doing all this while bankers and bureaucrats meddle with interest rates and pull and prod the economy. Yesterday we pointed out the success of the NASDAQ index this year – one of the world’s best performing stock indices.

Well, closer to home is the S&P/ASX Emerging Companies index (blue line). This is an index of some of the smallest stocks on the Australian market. We’ve compared it to the blue chip S&P/ASX 200 index (red line):

Source: Google Finance

As you can see, small stocks have beaten big stocks hands down over the past three months. Why would that be? After all, if the market is so risky and the economy is so bad doesn’t it make more sense to buy safe blue chip stocks?

There are a number of reasons. First, small stocks tend to get unfairly hammered during a market rout. It only takes a few thousand dollars worth of shares to knock them over, and so when they recover it only takes a few thousand dollars worth of shares to pick them up again.

But secondly, these tiny companies tend to have outsized opportunities. The decision of a central banker whether or not to buy more bonds has very little impact on whether a mining company proceeds with a project or whether a medical firm invests in a new MRI machine.

Although we’ll agree there is an element of interconnectedness in the global economy, some things are less connected than others. And to a large degree what happens among Australian small-cap stocks isn’t much influenced by what goes on in the bigger world.

In short, as we’ve said for a long time, you can pay attention to the big macro-economic events, that’s fine. Just don’t assume things are about to change. Interest rates are low and they’re staying low. Got it?

Folks can carp about it as much as they like and say that it’s wrong. But that’s just the way it is. We prefer to take a different stand. Rather than carping from the sidelines we prefer to make the best out of a rotten situation. That means continuing to cautiously buy stocks that are best placed to gain from this rally.

It has been an indisputably winning strategy so far this year, and if we’re right about Australian stocks hitting 7,000 points in 2015 it’s destined to be a winning strategy for at least two more years.

Buy stocks now, before this rally ends.

Cheers,
Kris+

Join Money Morning on Google+

Special Report: Are You Waiting for a Real Estate Crash That Isn’t Going to Come?

Source: J. Alec Gimurtu of The Gold Report

http://www.theaureport.com/pub/na/pro-or-seizes-market-opportunity-with-platinum-recycling-technology

The largest end-use application for platinum group metals, automotive catalytic converters, is also North America’s largest potential source. Every year, nearly 15 million North American cars expire—and recycling the platinum group metals within them is far cheaper than building a three-mile mine shaft in a faraway country. In this interview with The Metals Report, Sylvain Boulanger, CEO of Pro-Or Inc., describes how his company’s technology improves recoveries, simplifies the supply chain and reduces costs.
MANAGE Q&A:VIEW FROM THE TOP

The Metals Report: What is Pro-Or Inc. and how is it tapping North America’s platinum group metals (PGMs)?

Sylvain Boulanger: Pro-Or Inc. (POI:TSX.V) is a clean technology company that uses a patented chlorination process to recover PGMs from recycled automobile catalytic converters. The company currently operates a small-scale industrial plant that recovers platinum, palladium and rhodium. The process recovers more than 97% of PGMs from a typical catalytic converter. Our PGM recovery process is much less capital intensive, with a much quicker turnaround than conventional recycling or smelting alternatives. Our company goal is to become the global leader in sustainably recycled precious metals for the automobile industry. Our technology can apply to a number of different metals, but for now, Pro-Or is focused on dry solid-phase extraction of PGMs because those are high-value, in-demand metals that are widely available from the automotive recycling industry. While our process recovers other base metals, the main value is in the PGMs.

TMR: Can you give us an explanation of how the technology works and the chemistry involved?

SB: I’ll try to skip a Ph.D. chemistry course and give you an example that people will be able to remember. Our process starts with removing the ceramic catalyst material from the spent catalytic converter. The ceramic is ground to powder, combined with additives and processed through a rotating reactor. Inside the reactor, we create a chlorine gas environment. The end product of our process is a PGM salt.

I used to say that we make a valuable table salt. Its consistency is similar to the salt that you have on the table. And like table salt, PGM salt is water soluble. PGMs in the metallic phase are extremely resistant to temperature and corrosion; that’s why they are used as catalysts. However, when converted to salts, it is possible to separate PGMs and other metallic materials from the non-water-soluble ceramics. The process uses filtering to remove the non-metallic material from the dissolved salts.

TMR: Once you have the PGMs separated from the ceramic, what is the next step?

SB: The process includes a resin adsorption step, which removes the metal from solution. After the resin is burned, the collected metal is a fine, high-quality powder containing all the PGMs. This powder is sent to the refiner to isolate and refine the individual PGMs before final processing into the finished product, which is usually a new automotive catalyst.

TMR: Does the feedstock vary geographically or by catalytic converter source? If so, does your process easily adapt to changing feedstocks?

SB: PGM content varies by feedstock. Feedstock is influenced by the car manufacturer, model, year, engine size and so on. Manufacturers will vary the platinum and palladium content to achieve the emission control requirements. The ratio of PGMs will also change depending on the value of the metal at the time of manufacture. The cocktail of PGM metals can change throughout the year when PGM prices are volatile. Interestingly, we’ve found that most catalytic converters contain between 5–8% rhodium. This is important because rhodium is a very high value material. Back in 2008 the price of rhodium reached $10,000/oz. It is much lower now, but still high value. For all metals, our total recovery is at least 97%. That applies to the most valuable PGMs like platinum, palladium and rhodium, but also includes iridium and osmium that are used in some other catalytic converters, refractory materials and alloys.

TMR: Is your technology adaptable to converters from different regions and sources? Many precious metal producers spend a lot of time tuning their operations for a very specific feedstock, and then, if the “ore” varies they have extraction problems.

SB: We’re extremely fortunate because the manufacture of catalytic converters is fairly constant across the industry. There are only a few firms that manufacture the ceramics so we have a constant base. The different coatings that are used are always PGM based, so what we have is a very stable feedstock. Our recovery process has worked well regardless of the source in all the material we have tested so far.

In the prototyping plant, we watched for contaminants that may show up in the feedstock. The feedstock was and continues to be extremely stable and hasn’t had any bearing on recovery. Used catalytic converters are a very stable source of material compared to ore that comes from the earth, which can vary tremendously from mine to mine and even within a single deposit. As long as there are PGMs in our inputs, we are extracting the PGMs. The more PGMs there are, the more material we extract per kilogram. The operational cost is independent of the quantity of PGM, but is directly related to the quantity of feedstock.

TMR: Because your technology is based on reuse and recycling, it is a little different from the common resource investor mindset of mineral exploration and mine building. Does this present a challenge for Pro-Or to get its message out to investors?

SB: The reasons that investors are interested in PGM producers all apply to Pro-Or. Global demand for PGMs is growing because PGMs are required of “clean technologies,” but there are serious challenges to the traditional sources of supply. Historically, South Africa has provided approximately 80% of global PGM supply. But the African PGM mines are getting very old. These mines are up to three miles deep. Labor and infrastructure costs have risen and the costs of extraction have started to exceed the recent PGM market price. As a result, many companies are suspending operations. The other major PGM producer is Russia, which has its own set of challenges.

As catalytic converters usage grows globally, automotive manufacturers are in a bind as to where to obtain PGMs. That means there is a market opportunity for a more efficient recycling process. The current catalytic converter recycling process takes at least six months and you have to pay for the feedstock up front. With Pro-Or Inc., the entire process, from acquiring the material to processing and refining, takes less than eight weeks in the prototype plant. In a full-scale production setting, wherein we would use liquid-to-liquid separation, the time will be shortened to one or two weeks.

With recycling, our metal source is not a deep mine on another continent, but a scrap metal supplier located close to home. As a matter of fact, every car that is 10 years old or more is a potential source of PGMs. In North America, approximately 15 million (15M) cars reach end of life every year, and the value of PGMs in these cars can reach $2 billion ($2B). And you don’t have to dig a mineshaft to access that value. The number of recyclable catalytic converters is sufficient to supply the North American auto industries’ requirement for new cars. In other words, the best PGM deposit available to investors is in the form of catalytic converters rather than in-ground mineral deposits.

TMR: How is Pro-Or Inc. getting the technology to market? What does that rollout look like?

SB: Pro-Or is currently operating a small-scale PGM extraction facility. We are planning on building a four-reactor plant that we will run and operate as a showcase for the industry. We will use partners to supply feedstock to these reactors. We’re targeting one supplier per reactor to prove the technology on a commercial scale. The goal is that each partner will eventually install the equipment to become vertically integrated. Once the partners sign on, we will train their staff to operate the technology. It’s not complex, but we want to make sure that they understand how the system works. After construction, we will assist partners in ramping up production.

The overall goal of our technology and our solution is to simplify the recycling process. We will eliminate the long supply chain that includes wasted effort and needless transportation, storage, assessment and processing. Our solution offers a huge reduction in labor, time and energy compared to the existing PGM recycling processes.

In a large-scale production environment, once the partners make the PGM salt, it will be shipped to Pro-Or to be made into PGM metallic powder concentrate. Pro-Or will then work with refiners to take the metal powder and create new PGM alloys for use in catalysts. Johnson Matthey Plc (JMAT:LSE) is our partner, and performs the final separation and refining. The company also has an extensive distribution network, so it can offer recycled catalyst materials directly to the manufacturing industry. This reduces the number of organizations involved, because we won’t need to send the final product through a smelting facility or to ship it to South Africa for additional refining.

TMR: Where is Pro-Or in implementing the technology?

SB: We successfully completed the prototyping phase. We’re using the plant to process material on a small operational scale. At the corporate level, we are raising money to fund the construction of four additional reactors at a production facility. That facility will be a dedicated production facility operating 24/7. We are halfway to our goal of having four suppliers. The current plan is to have the plant up and running within eight months. Once we have finalized the private placement, we will start the construction of the plant, which will recover the equivalent of 200,000 catalytic converters per year. Based on the prefeasibility study, the construction cost of the complete operation will be approximately $8M.

TMR: What are the most important points about the Pro-Or story?

SB: Pro-Or is offering a unique technology to supply PGMs from existing sources. Our technology is dramatically more cost effective and energy efficient, and is quicker and “greener” than existing recycling processes. It’s an excellent alternative to developing new mines. Pro-Or fits into the existing supply chain between the automotive dismantlers and the catalytic converter manufacturers. The current industry cannot recover a large percentage of these precious metals, whereas our technology is able to recover PGMs cost effectively and quickly.

TMR: What other plans does Pro-Or have for its future?

SB: All our attention is currently devoted to building our first commercial production plant. At some point in the future, there may be many other applications for our technology. Our technology is not limited to recycled material. With our partner in South Africa, we have a technology with a different reactor that can process mine tailings. That process can also accept run-of-mine ore. We will investigate this by building a prototype plant in the years to come. But we don’t want to get distracted from our current plan to generate revenue. There are lots of other opportunities for potential application of our processing technology, including refining and recycling gold and rare earth elements. But at this time, we are completely focused on PGMs from automotive catalysts. It is a good place to be.

TMR: Thanks for speaking with us.

SB: It has been a pleasure.

Sylvain Boulanger is the president of Pro-Or Inc. and has managed the company since 2011. He graduated from École Polytechnique in Montreal in 1977 with a bachelor’s degree in applied science (electrical engineering) and worked for over 20 years in manufacturing, holding intermediate and senior management positions with General Motors, Paccar and Nike. He subsequently moved into supply chain management at the ALDO Group, La Vie En Rose and GENCO Distribution Systems, where he was vice president for 10 years.

DISCLOSURE:

1) J. Alec Gimurtu conducted this interview for The Metals Report and provides services to The Metals Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) Pro-Or Inc. paid The Metals Report to conduct, produce and distribute the interview.

3) Pro-Or Inc. had final approval of the content and is wholly responsible for the validity of the statements. Opinions expressed are the opinions of Pro-Or Inc. and not Streetwise Reports or The Metals Report or its officers.

4) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

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Article by Investazor.com

The FOMC decided to wait and hold  the QE3 in place at a pace of $85 billion per month. Apparently, the economy of the United States is not ready to quit the stimulus, decided the FOMC members by a 1-to-9 vote. Indeed, the data below expectations coming from the labour market influenced the decision took today and Ben Bernanke gave assurances that the progress of the economy  is basically deciding whether or not the QE3 will continue to run or not.

Likewise, the interest rate is going to remain at low levels with no changes on the long-term. The “no tapering” indicated an economy still fragile, then add the fact that the Fed is revising down its economic growth forecasts, seeing  growth between 2% and 2.3% this year, down from 2.3% to 2.6%. Even if the program is being maintained, it doesn’t mean that it failed to deliver results, just that a better recovery of the economy is needed.  As an example, since September 2012 when the QE3 started, the jobless rate fall from 8.3% to 7.3%, a substantial improvement but still above the targeted percentage. As there are no worries about inflation which this year is expected to vary between 1.2% and 1.3%, the Quantitative Easing program will continue to support the American economy as long as needed.

The post The Quantitative Easing Program Remains in Force appeared first on investazor.com.

By www.CentralBankNews.info     The U.S. Federal Reserve will continue to purchase $85 billion worth of mortgage-backed securities and long-term Treasury bonds a month “until the outlook for the labor market has improved substantially in a context of price stability.”
    The decision by the Federal Reserve took financial markets by surprise as the overwhelming majority of economists and analysts had expected the Fed to start reducing its purchases of assets this month due to the recent decline in the unemployment rate.
    The Federal Reserve’s policy making body, the Federal Open Market Committee (FOMC) said the economy and labor market had improved over the last year when its began its latest asset purchase program, known as Quantitative Easing 3, despite the impact of the cuts in the federal deficit.
    “However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the FOMC said after a two-day meeting.
    “The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability,” it added.
    “In judging when to moderate the pace of asset purchases, the Committee will, at its coming meetings assess whether incoming information continues to support the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective,” the Fed said, adding that asset purchases were not on preset course and the pace of the purchases will depend on conditions in the labor market.
    The Fed affirmed that it still expects to keep the federal funds rate between zero and 0.25 percent at least as long as the unemployment rate is above 6.5 percent and inflation is below 2.5 percent.
    The U.S. unemployment rate has been declining steadily from a high of 10.0 percent in October 2009 to 7.3 percent in August but much of the improvement has also been due to workers no longer seeking jobs.

      www.CentralBankNews.info

By The Sizemore Letter

Last week, I spoke with Covestor’s Mike Tarsala to give my outlook for the rest of 2013.

From Covestor’s Smarter Investing blog:

“You can always talk your way out of investing,” Sizemore says. “The best antidote to that kind of thinking is to pick up a newspaper from a year ago. Look at the headlines at what people were worrying about then. It will all seem ridiculous — the same way that a lot of what we worry about today will look ridiculous a year from now.”

Better questions to ask, Sizemore says, is if stocks are priced fairly, if there are pockets of investment opportunities and if there are reasons that the market may continue to rise.

To his latter point, Sizemore believes there are three reasons why the stock market may continue to climb as we approach the end of 2013: 

1. Syria conflict may be averted

Uncertainties that are widely known and understood by most investors tend to be priced into the market, Sizemore says. For that reason, he thinks that any possible U.S. military conflict in Syria and how its potential impact on oil prices and corporate earnings are already factored into today’s stock prices.

To the contrary, Sizemore thinks that the unlikelihood of war is not being reflected.

“There is no consensus for a Western military response, and there is no support for this,” Sizemore says. “ If the U.S. does get involved at this point, the response is going to be really, really small.”

2. Stimulus will continue

For months, expectations have been rising for the Fed to begin cutting back on its monthly bond purchases — a fiscal stimulus move that seemingly has aided stock performance for much of 2013. It even has its own buzzword — tapering.

“I am so sick of hearing the word tapering, Sizemore says. “I think it has already largely been priced into the market. A lot of the yield-sensitive investments have already gotten pounded. In my estimation, most of the damage has already been priced in.”

Sizemore argues the Fed may taper less than many economists and investors are anticipating, which could also contribute to possible stock upside.

3. Valuations

There are stock values to be found, especially in European markets, Sizemore says — where many possible investments are being ignored by US investors.

Many investors in the US may not be closely watching the news headlines about the sex scandal that has engulfed Italian Prime Minister Silvio Berlusconi.

The good news, says Sizemore, is that it’s not moving European markets.

“ A year ago, that would have caused a major market selloff. Now, the Italian market’s actually up. No one really seems to be reacting to political news in Europe anymore. And when the market stops reacting to bad news, that’s usually a pretty good sign that the bottom is in.”

So for all that’s supposedly “wrong’” with the stock market, keep in mind that there’s almost always a scary headline somewhere. And at least in Sizemore’s eyes, there also are a lot of “rights” that make it worth sticking with stocks.

This article first appeared on Sizemore Insights as VIDEO: Reasons to Stay Invested This Fall

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By The Sizemore Letter

Last week I sat down with InvestorPlace’s Jeff Reeves to discuss the diverging fortunes of Facebook (FB) and Apple (AAPL).

From The Slant:

When it comes to high-tech investments, few players are more closely watched than the trio of Apple, Microsoft (MSFT) and Facebook.

There’s good reason for all of the attention — these picks all represent different phases in the mobile revolution that is reshaping consumer, business and investor behavior.

Microsoft once was the ultimate technology company with its dominant Windows and Office duo, but the post-PC age is slowly eating it alive. Apple currently is a dominant player in mobile, but many are worried it’s a fading star as devices running Android software from Google (GOOG) continue to gain appeal both at home and abroad. And then you have Facebook, which is growing its mobile audience at a breakneck pace and is one of the few players that seems to have a successful strategy when it comes to the ever-changing smartphone and tablet space.

But when do you stop focusing on the narrative and begin focusing on the numbers? Like with Apple and Microsoft, when do you begin to see the massive cash hoards and operating cash flows as undervalued? And with Facebook, when do you see the optimistic narrative as already baked into shares after a big run?

This article first appeared on Sizemore Insights as VIDEO: Apple and Facebook’s Diverging Fortunes

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