Month: September 2013

By WallStreetDaily.com

At this point, we might as well relocate the New York Stock Exchange to Washington, D.C.

Why? Because instead of focusing on individual economic and corporate fundamentals emanating from the financial center of the world, investors can’t stop obsessing over policy decisions being made in our nation’s capital.

For weeks, investors fretted over whether or not the Federal Reserve would start tapering its bond purchases.

And now?

They’re panicked (and paralyzed) by the possibility of a government shutdown, thanks to the latest partisan impasse on the budget and debt ceiling limit.

Case in point: Stocks entered Wednesday on a four-day losing streak – determined to extend it to five – as every major market index opened to the downside.

Fear not, though. We’ve been here before. As for the latest political impasse, it promises to be no different. (Sorry speeders. Police will still be on active duty – and using radar – during any government shutdown.) 

Here’s proof – and, more importantly, how we should be responding…

All Bark, No Bite

While politicians on both sides of the aisle desperately want us to fear the impact of a government shutdown starting October 1, we shouldn’t.

Why? Do you remember the fiscal cliff fears from last December?

For weeks, politicians uttered dire predictions about the debilitating impact of massive tax hikes and draconian spending cuts. A deal was struck at the last minute. No nasty side effects materialized. And, sure enough, stocks tore out of the gates in 2013 as if nothing had happened.

In short, the fiscal cliff was “a bunch of sound and fury signifying nothing,” says Jeffrey Saut, Chief Investment Strategist at Raymond James. Indeed!

As for the latest political impasse, it promises to be no different.

“In spite of all the brinkmanship being talked about… there will be a deal, and then we will move on,” says Stephen Massocca, Managing Director at Wedbush Equity Management.

I couldn’t agree more. Not only does recent history back us up, so does the longer-term data.

A History Worth Mentioning

While a government shutdown might sound like a rare event, it’s not. In fact, we’ve experienced a total of 17 since 1975. In other words, politicians have a history of extreme discord.

By the same token, politicians also have a history of reaching a compromise (quickly) when there’s no time left to grandstand for their respective parties.

You see, shutdowns rarely last very long. Only eight have lasted more than three days. And the average shutdown duration is only 6.4 days.

What if we’re in store for an outlier this time? Statistically, it’s possible. But there’s no real reason to worry.

For one thing, credit default swap (CDS) prices for U.S. Treasury notes aren’t flashing any legitimate warning signs.

According to Bloomberg, CDS prices trade at about 23 basis points, compared to an average of 41 basis points over the past three years. If a shutdown were going to be particularly bad for the economy, CDS prices would be trending higher.

Also, we can’t overlook the fact that the Fed has our back.

You’ll recall, at the September 18 news conference, Fed Chairman Ben Bernanke revealed part of his reason for not tapering, when he said, “Upcoming fiscal debates may involve additional risks to financial markets and to the broader economy.”

Translation: I’m here to paper over any damage politicians do by being stubborn and creating a protracted shutdown.

Above all else, though, we shouldn’t fear a government shutdown, because stocks ultimately don’t.

Stocks Just Don’t Give a Darn

During the last two government shutdowns, the stock market didn’t even flinch.

In 1995, the S&P 500 Index actually rose 1.3% between November 13 and 19. And from December 15, 1995 to January 6, 1996, the Index eked out a 0.1% gain, according to Bespoke Investment Group.

The only thing that did happen? “Volatility did pick up during – as well as after – the shutdown,” says Bespoke.

In other words, temporary buying opportunities materialized in the midst of the political negotiations. And that’s instructive.

It means we should treat any pullbacks on worries over the current impasse in Washington as a time to buy.

Chris Hyzy, Chief Investment Officer at U.S. Trust, agrees. “Any market drawdown would be temporary in nature,” says Hyzy.

Bottom line: The biggest threat to this bull market isn’t Washington. A government shutdown sounds much scarier than it promises to be. If anything, it represents a compelling time to put new money to work in the stock market.

And based on the legislation being considered to avert the October 1 shutdown, we might get another such opportunity before long. (It only funds the government through November 15.)

But don’t worry. I’ll serve up a friendly reminder to be greedy when others are fearful (again), as that deadline draws near.

Ahead of the tape,

Louis Basenese

The post Don’t Fret a Government Shutdown (Stocks Won’t) appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Don’t Fret a Government Shutdown (Stocks Won’t)

By HY Markets Forex Blog

Even though gold has enjoyed more than 10 consecutive years of price gains, several market experts predicted recently that the precious metal will depreciate in the near future.

Forecasts such as this could prove beneficial to any individuals who want to make money trading gold.

Citi Predicts Gold Decline Below $1,250

While there have been many predictions for what the price of gold will do, one that has managed to generate visibility recently is a forecast from Citi analysts that the metal will depreciate to less than $1,250 per ounce before 2013 is over, according to MarketWatch.
These individuals also projected that the metal will have an average price of $1,250 an ounce in 2014.

The analysts who wrote the note cited several variables to back up their prediction, Barron’s reported. They emphasized the tapering of quantitative easing that everyone expects will happen in the near future. In addition, the market experts projected that the emergence of increasingly stronger economic data will push gold prices lower. The analysts also asserted that while the price of the metal has enjoyed a rally lately, this general uptrend will not last forever.

“Our expectation is that the postponement of the tapering decision by the [Federal Open Market Committee] represents only a short-term reprieve for gold,” they wrote in the note, according to the news source. “U.S. unemployment continues to grind closer to the Fed target level, with the current reading at 7.3 [percent], although concerns remain that labor force participation is weak and the Fed has indicated ongoing support for low rates at the front-end for the next several years.”

Goldman Sachs Prediction

While the forecast that Citi made might seem bearish, individuals who want to make money by trading gold might be interested to know that Jeffrey Currie, head of commodities research for Goldman Sachs, stated in a recent interview that the price of the metal could fall below $1,000 per ounce in the near future, MarketWatch reported.

Like the analysts at Citi, Currie also noted the importance of both economic data and also the bond purchases made by the Federal Reserve, according to the news source. He stated that once the information about the strength of the nation’s economy – such as data related to the jobs market – is released, gold selling will surge.

“While we agree with the mid-cycle price somewhere around $1,200, we believe that at least near term it can overshoot to the downside, which is why we have $1,050″ as a target price, he stated, the media outlet reported. “It clearly could trade below $1,000.”

Forecast From Morgan Stanley

Another major financial services firm that recently predicted declines in the price of gold was Morgan Stanley, according to MarketWatch. This firm projected that next year, bullion will have an average value of between $1,200 and $1,350 an ounce and then decline after that.

“While any further postponement would likely continue to benefit gold prices in the near term, we still think it is just delaying the inevitable,” Peter Richardson and other analysts at Morgan Stanley wrote in a note, the media outlet reported. “The longer-term narrative for gold remains in place – waning investor appetite for a risk and inflation hedge, challenged physical demand and a rising USD.”

These predictions were made after the precious metal experienced twelve consecutive years of gains and rose to more than $1,900 per ounce late in 2011. Gold has managed to draw substantial visibility over this period, and many have thought of it as a safe haven from economic turmoil.

In 2013, gold has experienced sharp enough depreciation to fall into a bear market in April and then move into a bull market in August. Even after its recent recovery, the price of the metal is sharply lower for the year.

The post Several Market Experts Predict Falling Gold Prices appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

GBPUSD is in consolidation of the uptrend from 1.4813 (July 9 low). Deeper decline to 1.5700 area to complete the consolidation is possible. Key support is at 1.5700, as long as this level holds, the uptrend could be expected to resume, and one more rise towards 1.6500 is still possible after consolidation. Resistance is at 1.6162, a break above this level could signal resumption of the uptrend. On the downside, a breakdown below 1.5700 support will indicate that the uptrend from 1.4813 had completed at 1.6162 already, then the following downward movement could bring price to 1.4500 zone.

Provided by ForexCycle.com

Source: Kevin Michael Grace of The Gold Report (9/25/13)

http://www.theaureport.com/pub/na/search-for-speculative-juniors-with-the-potential-to-soar-michael-curran

In the fall, an investor’s fancy returns to the market. Michael Curran of Beacon Securities believes that the end of the summer doldrums could result in gold reaching a high of $1,500/oz this year. In this interview with The Gold Report, Curran argues that investors should pay particular attention to speculative plays with modest potential downsides and exciting potential upsides.

The Gold Report: The Federal Reserve decided last week against tapering its quantitative easing. Gold rose $55/ounce ($55/oz)—over 4%—as a result, and silver was up 6.5%. Were you surprised by how robust this one-day rally was?

Michael Curran: Not really. We had already been out with our call in early July for a potential 25% recovery in the gold price in H2/13, which is the average fall recovery seen over the past four years. As such, we saw potential for gold to reclaim $1,450–$1,500/oz over the next few months, so we viewed the Fed tapering news as just another “quiver in the bow” to see our recovery scenario come to fruition.

TGR: Now that tapering is off the table, can we expect an end to the downward pressure on gold and silver?

MC: Our view is that with tapering off the table, short-term prospects for gold and silver are materially improved.

TGR: To what would you attribute gold’s spectacular fall earlier this year?

MC: I think it was a stock market malaise leading investors to liquidate gold to cover other losses.

TGR: We’ve been hearing about liquidation bringing down the price of gold for some time. Is there a point at which investors have done all the liquidating they need to do?

MC: That would be our view. In prior pullbacks in the gold price, we didn’t really see much liquidation in gold exchange-traded funds (ETFs). But this year, for the first time, we saw meaningful selloffs, and these investors redeployed their assets elsewhere. I think we’ve seen the bulk of that. August was the first net positive month for gold ETFs since the spring.

TGR: Small- and micro-cap explorers have suffered terribly in the last 18 months. Can we now expect a resurgence of these stocks?

MC: I think we’ve seen the bottom, but it’s the quality juniors that are going to be the beneficiaries. Not all boats will rise. Investors need to be more selective than in past recoveries.

Our recommendation is to focus on early exploration or discovery plays. We’re also looking beyond gold. We like select base metals and uranium, and we have a few favorites there as well. Diversification is our focus for investors right now.

TGR: There are a great many low-price metal stocks today, but how do we find the real bargains?

MC: We concentrate on assets, location, management and balance sheets. We’re looking for assets with potential for high-grade discovery. We’re looking for low political risk in the location of these assets. We’re looking for strong management with backgrounds in exploration and discovery or people who have demonstrated past involvement in success stories. And we’re looking for companies that have enough cash to do exploration in the short term or a combination of assets and management expertise sufficient to raise money, which is not the easiest thing to do in this market.

TGR: Which speculative gold play do you find most attractive?

MC: Cayden Resources Inc. (CYD:TSX.V; CDKNF:NASDAQ) is currently our favorite speculative drill play. It has two main projects in Mexico, Morelos Sur in the Guerrero Gold Belt, which many investors will be familiar with, and the El Barqueño property in Jalisco.

TGR: Cayden is up about 50% in the last month to about $1.50 a share. Your 12-month price target is $3, which would be a 100% increase. On what do you base that projection?

MC: We’ve visited Cayden’s properties earlier this year. Morelos Sur is more of a long-term play. This is a blind, buried deposit several hundred meters below surface. It could take some time to discover a new skarn-hosted gold deposit, but certainly the market interest in the Guerrero Gold Belt is so strong that one good drill hole could generate a lot of interest.

Cayden’s neighbors in the area, Goldcorp Inc. (G:TSX; GG:NYSE), Torex Gold Resources Inc. (TXG:TSX) andNewstrike Capital Inc. (NES:TSX.V), have all had very good success on these kinds of targets and found multimillion-ounce deposits.

TGR: Goldcorp has found over 13 million ounces (13 Moz), Torex over 5 Moz and Newstrike over 2 Moz.

MC: That’s right. So Morelos Sur is the big potential discovery. El Barqueño has the lower short-term risk; as recent results have confirmed near-surface mineralization. Drilling will begin shortly and we expect the initial drill program can be successful and delineate resources. We see initial potential of 1–2 Moz at El Barqueño.

TGR: Hasn’t Cayden’s management had success in the past?

MC: A lot of the management team was with Keegan Resources, which was recently renamed Asanko Gold Inc. (AKG:TSX; AKG:NYSE.MKT). Your readers will know about Asanko’s 6 Moz Esaase gold deposit in Ghana.

TGR: What other companies would you like to mention?

MC: One company we like in the gold patch is Premier Gold Mines Ltd. (PG:TSX). The company has a very strong portfolio of assets with high-grade components in both Ontario and Nevada. It has made several additions in the last 18 months from former Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) management. This is a junior with the technical expertise of a mid-tier producer.

TGR: Premier Gold Mines shares rose 19% last Wednesday on results from two holes at its Cove Project in Nevada, including 6.74 grams per ton (6.74 g/t) gold over 9.1 meters and 26.3 g/t gold and 39.8 g/t silver over 2.3 meters. How significant are these results, in your opinion?

MC: We believe Premier Gold’s 19% rise was a result of two positive developments that day—the Cove project drill results reported before the open and the announcement by the Fed regarding tapering in the afternoon. We viewed the drill results as positive as the latter higher-grade intercept you mentioned successfully extended the Helen zone gold mineralization to the east of previous drilling. The other intercept you noted opens up the potential for the Helen zone mineralization to extend several hundred meters to the east, to below the previously mined Cove open pit. Of course, follow-up drilling will be required to confirm this.

TGR: Under a joint-venture agreement, Newmont Mining Corp. (NEM:NYSE) can buy 51% of Cove. How likely do you think that is, and do you think Premier is a possible takeover target?

MC: We believe that it is highly likely that Newmont will be involved with any mine development at Cove, either through the exercise of its right of first refusal or as the preferred partner to process Cove ores, thus holding either a direct interest or via a toll-processing agreement.

TGR: Goldrock Mines Corp. (GRM:TSX.V) was another winner last Wednesday, up 11% after announcing a $9.25 million ($9.25M) strategic alliance with Austral Gold Ltd. Goldrock’s stated objective is to develop its Lindero project in Argentina by 2015 so as to “become a mid-tier gold producer with annual gold production of 250,000 oz.” Does it now have the means to accomplish this?

MC: While we view the news of attracting a new strategic partner as positive for Goldrock, the company still has a long way to go to complete full financing for the development of its Lindero gold project in Salta, Argentina. Even with successful fundraising, the Lindero mine would only represent the first step toward achieving the company’s production target of 250,000 oz/year (250 Koz/year), as the open-pit, heap-leach mine is only forecast to be a 125 Koz/year mine. Thus we assume Goldrock’s target of becoming a 250 Koz/yr gold producer would require a second producing asset, likely via acquisition.

TGR: At its Coffee gold project in the Yukon, Kaminak Gold Corp. (KAM:TSX.V) has already drilled more than 35,000 meters this year and has announced a $2.5M bought-deal private placement so it can drill more. Is Kaminak looking to increase the size of its resource or its reliability or both?

MC: One of the main objectives of this summer’s $11M exploration budget was to delineate additional gold resources in proximity of the main mineralized zones at Coffee. We expect the expanded drill program will continue these efforts, as well as provide some infill drilling to increase the reliability (confidence) of gold resources in the main zones, presumably focusing on areas of higher-grade mineralization.

TGR: How many ounces could we see at Coffee?

MC: We believe drill results this summer could increase total resources at Coffee from the previous 3.2 Moz level to 3.7–4 Moz. Longer-term, we maintain our view that gold resources are likely to exceed 5 Moz.

TGR: Shares of Dalradian Resources Inc. (DNA:TSX) are up almost 50% over the last month. Its flagship project, Curraghinalt in Northern Ireland, has exceedingly high-grade gold, although most of its measured ounces (2.23 Moz out of 2.79 Moz) are Inferred. How close is Dalradian to derisking Curraghinalt?

MC: We are awaiting a major milestone for Dalradian later this fall, when the company is expected to receive environmental permits that will allow the next phase of exploration at Curraghinalt to begin. This phase centers on 2 kilometers of underground development that will allow Dalradian to perform detailed infill drilling to confirm and upgrade the Inferred resources, as well as test mining methods and provide a bulk sample for metallurgical testwork, as part of feasibility-level economic studies. We expect this phase to begin early in 2014 and take 15–18 months to complete.

TGR: If the price of gold makes a substantial and sustained move toward $2,000/oz, will we see an end to the doom and the gloom and a return to excitement in the junior sphere?

MC: I think so. For some existing companies, it’s probably too late, but if we approach $1,800/oz, $1,900/oz and $2,000/oz, we’ll have a new wave of names coming up. We’d see new money going into new stories, as opposed to propping up existing exploration stories that haven’t worked.

TGR: Mike, thank you for your insights.

Michael Curran, CFA, is a managing director and a mining research analyst with Beacon Securities Ltd. in Toronto. He was previously a managing director and a mining research analyst with RBC Capital Markets. Curran received the #1 Ranking for Mining and Metals research coverage in The Wall Street Journal’s Annual Best on the Street Survey in May 2013. He holds a Master of Science degree in mineral exploration, a Master of Business Administration and is a CFA charterholder.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:

1) Kevin Michael Grace conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Cayden Resources Inc., Goldcorp Inc. and Premier Gold Mines Ltd. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Michael Curran: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. A principal of Beacon Securities is on the Board of Directors for Cayden Resources Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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By www.CentralBankNews.info    Georgia’s central bank held its benchmark refinancing rate steady at 3.75 percent as the impact of five rate cuts earlier this year have yet to be fully reflected in the real economy.
    The National Bank of Georgia (NBG), which has cut rates 150 basis points this year for a total reduction of 425 points since July 2011, said it was still expecting inflation to remain at a low level and first return to its 6.0 percent target at the end of 2014.
    Georgia’s inflation rate was a negative 0.4 percent on an annual basis in August and the central bank said it expects the inflation rate to decline further in September due to temporary factors impacting the supply side. Since February 2012 Georgia has been gripped by deflation.
    Lending activity in Georgia is still at a modest level, the bank said, though loans are expected to increase as low interest rates encourage demand.
    The central bank noted positive trends in the external sector with remittances from abroad up by an annual 11.2 percent in August, boosting domestic demand.

    www.CentralBankNews.info

By The Sizemore Letter

If you manage money professionally–or write about it–then using social media has become part of your day job.  Think about Carl Icahn tweeting about his decision to buy Apple (AAPL) or of Twitter tweeting to announce its own IPO.  Though it hasn’t completely replaced traditional public relations and advertising (and it never fully will, at least for larger companies), social media has created an earthy, authentic parallel publicity universe for making announcements and for new talent to be heard.

In 2008, blogs were not taken seriously as “news” sites.  Hardly anyone had heard of the Big Picture, The Reformed Broker or Zero Hedge.  But today, due in no small part to the success of these bloggers and their contemporaries, the line between blogger and mainstream financial journalist is too blurred to distinguish.  The edgy, anti-establishment voices have elbowed their way into the establishment by filling an information void that needed to be filled and by sheer force of personality.  And in doing so, they have changed the way we get our news.

Going hand in hand with this is Twitter. I have no idea what Twitter’s founders had in mind when they created the service; it’s evolved so much over the past few years, I doubt if they even remember themselves.  For lack of existing vocabulary (Twitter has since spawned a vocabulary all its own), they called it a “microblog.”  To me, it looked like a Facebook status update…but without the rest of Facebook.  But today, it’s grown to become everything from news aggregator to chat room.  In this line of work, the Twitter format is perfect for blasting out an article you wrote or one that you read and wanted to pass on.  It’s also a great forum for tossing around trading ideas (StockTwits is even better for this).

And like blogging, tweeting give you a way to shape the discussion.  It makes the the news interactive.
All of this brings me to Vestorly.  I’ve used Vestorly for years as a way of funneling casual social media contacts into actionable leads.  And as of now, the service is now available for free.  Here is the press release they put out earlier today:

New York, NY – September 24, 2013. Vestorly, a leading digital content marketing platform for financial professionals, announced today the availability of a free and comprehensive content marketing suite This no cost alternative for content marketing frees financial professionals from having to pay for content distribution services they are currently using for email newsletters, social media publishing services or digital content marketing hubs.

“The current technology behind digital content marketing is becoming commoditized,” said Justin Wisz, CEO of Vestorly. “The real challenge for digital marketing platforms is delivering actionable data that helps professionals convert new clients as opposed to simple content distribution.”

As the wealth management industry embraces digital marketing, there are industry-specific challenges, such as compliance and qualified lead generation, which are not included in most current content marketing platforms. Paid-for marketing tools may schedule, push and archive content across multiple digital channels, but typically lack the intelligence to identify, attract and convert new clients. As a result, Vestorly believes that these base-line services have become so commoditized that they ultimately will become free, just as many other online features have become.

“Vestorly’s mission is to power up the wealth management industry and its professionals with smart data that accelerates client acquisition” continued Wisz. “As part of that mission, we believe that the basic features of digital content marketing services should be free.”

The key functionality that separates Vestorly from other digital content marketing platforms is Vestorly’s ability to gather new prospective clients from the entire Web presence of a professional or firm. Vestorly captures the basic interaction between individuals and wealth management professionals. It then synthesizes user content views into better client service data and user content-sharing into new client referrals. Vestorly’s proprietary algorithms then facilitate the client acquisition process by collecting smart data on individual prospects.

For enterprises and firms that seek industry-specific ROI from marketing efforts, Vestorly offers an API (application programming interface) to enable the turnkey integration with current content marketing tools, compliance platforms, and CRMs. Through the Vestorly API, enterprises and firms can quickly enhance current digital marketing initiatives with data-powered lead generation and nurturing.

With the additional ability to archive and gain compliance pre-approval on all outgoing content, Vestorly can provide a comprehensive digital content marketing suite specifically built for financial professionals and their enterprises, or simply be added on as a powerful new feature. Vestorly offers these integrations at the enterprise-level on a license fee basis.

With Vestorly, financial professionals and firms are able to:

• Schedule and automate email newsletters and Social Media posts
• Capture or upload unlimited contacts from lists and social media profiles
• Deploy lead capture technology for website, blog, email marketing and social media presence
• Harness smart data reporting on individual leads to accelerate qualifying process and client acquisition.
• Utilize compliance monitoring, pre-approval and archiving

“One of the most challenging aspects of the investment management business is getting your message across to would-be clients,” said Charles Sizemore of Sizemore Capital Management. “ Vestorly gives me a “compliance safe” venue to reach out to clients and prospects, but it is also much more than that. Vestorly leverages the power of social media and expands my reach by allowing clients and
prospects to refer you to their friends and colleagues in a comfortable way that adds value to everyone involved.”

“Investment professionals have very specific requirements when it comes to client acquisition, and current marketing solutions may not be addressing that,” said Wisz. “Client acquisition is a science, not a gamble. With the data available now, professionals in wealth management can be more efficient in making smart decisions about how they communicate and grow.”

About Vestorly

Vestorly is a technology company dedicated to solving the client acquisition
problem for professionals in wealth management, and the enterprises that support
them. Founded in 2012, Vestorly is the brainchild of marketers, data analysts, and
engineers from Fisher Investments, J.P. Morgan and Microsoft. Vestorly’s
technology suite provides a comprehensive digital content marketing platform that is currently being used by professionals from over 300 wealth management firms. For more information, please logon to www.vestorly.com.

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Nexus Strategy, LLC
[email protected]
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This article first appeared on Sizemore Insights as Social Media for Money Managers and Financial Bloggers

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By The Sizemore Letter

China made news this week by announcing that it would allow censorship-free access to Facebook (FB), Twitter, and many Western news sites in its Shanghai Free-Trade Zone. Though China is still a long way from implementing anything resembling American freedom of speech, the fact that the government is loosening its grip on information at all is noteworthy.

But as interesting as this might be, what really caught my eye were comments that the Chinese government would allow non-Chinese telecom companies to provide internet services. Currently, only China Mobile (CHL), China Telecom (CHA) and China Unicom (CHU) are authorized.

Whenever the words “China” and “opening to foreign firms” are used in the same sentence, investors’ eyes get big. You know the storyline: There are 1.3 billion potential customers in China. If you only get  2% of them, that’s 26 million new customers, or a quarter of Verizon’s (VZ) current customer base.

We should keep things in perspective here. China is not opening its telecom market to foreign competition. At this stage, the liberalization is limited to the Shanghai Free Trade Zone.

Still, it does get you to wondering: If China were to fully liberalize its internet service market, who would stand to benefit?

I wouldn’t put AT&T (T) or Verizon at the top of the list. Neither has much of an international presence outside of a few partnerships with local providers.  These are very much American companies serving a primarily American market.

What about globe-trotter Vodafone (VOD)? Vodafone is the most internationally diversified of the major mobile carriers, and after the Verizon Wireless divesture, they will have the cash on hand to do pretty much anything they want.

However, Vodafone already has a strategic relationship in place with China Mobile; it’s hard to see VOD encroaching on its partner’s turf. Likewise, France’s Orange (ORAN) has a strategic partnership in place with China Telecom.

Spain’s Telefonica (TEF) is one possibility. After Vodafone, it’s the most internationally diversified mobile carrier in the world. Telefonica has experience investing in China. Until last year, the company was a major shareholder in China Unicom — eventually selling its China Unicom stake as part of its efforts to shrink its balance sheet. Unlike many of its competitors, Telefonica also has experience providing fixed-line telephone and internet service in addition to mobile.

Telefonica hasn’t been making any major expansion moves of late, as the company has instead made paying down its debts a priority. This may be changing, however, as just this month Telefonica  struck a deal for control over Telecom Italia (TI).

Will any of this actually pan out? We’ll have to wait and see — at this point, it’s pure speculation. But if any of the major Western telecom companies were to jump into the Chinese market, my bet would be Telefonica.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long CHL and TEF. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”  This article first appeared on InvestorPlace.

This article first appeared on Sizemore Insights as China Opening Its Telecom Market: Who Benefits?

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Article by Investazor.com

The end of the month will bring to the American government the end of the budget. Until recently, everybody’s mind was occupied by the Quantitative Easing program’s fate and the next decision that FOMC is considering. Thus, gold remained at low levels, not signaling any concerns. Now that the fever has passed, the Treasury returned to the spotlight. As the problem of the government spending and the possible raising of the debt ceiling are mentioned, we could observe the main indexes of the American economy (The Dow Jones industrial average, The Nasdaq Composite Index, The Standard & Poor’s 500 Index) going down. The American dollar is not reacting yet, but waiting for final decisions.

The next deadline is on Monday when U.S. congressional officials must find a solution and agree on a deal to have the government running. Obama’s proposed health care reform is currently criticize and might be removed from the negotiating table.

The influential factors for the evolution of the American dollar today were the report which came from the real estate sector and the report regarding the new purchase orders placed for durable goods, excluding transportation items. Thus, the Purchases of new U.S. homes rose in August, recovering and overcoming the last two months which were the worst period of the year for this sector. It seems that the keeping of the monetary stimulus program gave a boost to the new home sales report, pushing the figures to 421k closer to 497k, the best result of the year. The Core Durable Goods Orders declined by 0.1%, a report which tends to be very volatile and didn’t have a major impact on the American dollar.

The post The U.S. Remember the Problems of the Past appeared first on investazor.com.

London Gold Market Report
from Adrian Ash
BullionVault
Weds 25 Sept 09:00 EST

WHOLESALE gold held unchanged in London on Wednesday, moving around last week’s finish of $1325 per ounce as world stock markets and the US Dollar also reversed yesterday’s small moves.

 Silver traded in a 15-cent range either side of $21.70 per ounce.

 Major government bonds were flat. Crude oil and industrial commodities ticked higher.

 “It will likely be a very quiet few days,” reckons brokerage INTL FCStone in a note, “at least until Friday, when we get some end-of-the-quarter book squaring.”

 October gold options contracts on the US Comex expire today.

 “We remain range bound,” agrees brokers Marex, “but the drop down towards 1300 yesterday and the subsequent good recovery will have deterred the bears for the time being.”

 However, “speculation that the Feds will begin tapering as early as next month,” counters Commerzbank, “continues to pressure the yellow metal.”

 London’s wholesale precious metals trading is likely to be subdued early next week, as trade group the London Bullion Market Association holds its annual conference from Sunday to Tuesday, this year in Rome.

 China’s long Golden Week holidays are also likely to dent import demand from stockists, dealers report.

 Ahead of Golden Week, the government of Hong Kong – a major tourist destination for mainland residents during these annual holidays – has banned “forced shopping” trips, says the South China Morning Post.

 Cut-price flights and hotel rooms were previously subsidized by kick-backs from stores to tour operators who brought in large groups, the paper explains.

 Almost one million mainland tourists went to Hong Kong in Golden Week 2012, theWall Street Journal reported last October, “up nearly 25%” from the prior year. But sales of watches and gold jewelry “actually dropped” compared with 2011.

 Gold prices for Chinese consumers have now fallen 25% since Golden Week 2012.

 “We’re not seeing too much physical demand around,” Bloomberg today quotes senior vice-president Afshin Nabavi at Swiss refiner MKS in Geneva.

 Elsewhere the newswire reports that for iPhone manufacturer Apple Inc., “bringing together China and gold is a recipe for success” after the US company reportedly asked its suppliers last week to increase production of “gold-colored” plastic casings for the new 5S handset.

 Forbes says the same of gold-colored iPhone sales in India – now widely expected to take second place to China in physical gold demand this year.

 “An assistant of the Punjab chief minister called me and asked for five gold-colored iPhones,” the magazine quotes a distributor for Apple products in the affluent Indian region.

 Across in Thailand, meantime, YLG Bullion International Co. – the largest gold importer into the world’s 6th largest gold-buying nation last year – says its gold inflows will double in 2013 thanks to the surge in demand caused by gold’s 25% price drop.

 YLG is also one of seven Thai companies calling for the launch of a formal bullion-contract exchange, the Bangkok Post reports, aiming to “enhance Thailand as a regional gold trading hub.”

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.

(c) BullionVault 2013

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By www.CentralBankNews.info     The world’s major banks continue to shore up their risk-based capital as they prepare to meet new stricter banking regulations, narrowing the total shortfall under Basel III’s 4.5 percent minimum capital requirement to 2.2 billion euros as of end-2012, 1.5 billion less than as of June 30, 2012.
    In its latest review of the impact of the new, stricter global banking rules that are being phased in by 2019, the Basel Committee on Banking Supervision (BCBS) said the aggregate shortfall for the major banks under a 7.0 percent common equity Tier 1 (CET1) target – which includes surcharges for banks that are considered systemically-important – fell by 82.9 billion euros to 115.0 billion.
    This shortfall compares to combined net tax profit prior to distributions at the so-called Group 1 banks of 419.4 billion euros at the end of 2012, which means the shortfall accounts for just over one-quarter of the banks’ total profit.
    The Basel Committee, which groups supervisory authorities from almost 30 jurisdictions, has conducted three previous reviews of the impact of Basel III on financial markets and the result is that banks are slowly but surely making progress in meeting the new rules that were agreed by global leaders in 2010 in an effort to strengthen the global financial system following the 2008 crises.

    The new rules imposed higher capital charges on banks and stricter supervision, especially on those banks that were globally active.
    The latest survey, which assumes that Basel III has been fully implemented as of Dec. 31, 2012, looked at the impact of the new rules on a total of 223 banks that are split into two groups. There are 101 banks in the so-called Group 1, banks with Tier 1 capital above 3 billion euro while Group 2 comprises 122 banks that are smaller, yet still internationally active.
    The capital shortfall for the Group 2 banks was estimated at 11.4 billion euros under the 4.5 percent capital minimum and 25.6 billion under the 7.0 percent capital standard compared with total net profit before distributions of 29.5 billion euros in 2012.
    Unlike the lower capital shortfall for the major Group 1 banks, the Basel Committee said the capital shortfall for the smaller banks had risen but this was mainly due to the first-time inclusion of some new banks while a very small part of the sample had actually posted an increase in the capital shortfall.
    The average Tier 1 capital ratio across the entire sample of 101 major banks amounted to 9.2 percent – well above the minimum of 4.5 percent and the targeted 7.0 percent. For Group 2 banks the capital ratio averaged 8.6 percent, also well above the minimum standards.

    In addition to higher risk-based capital requirements, global banking regulators have also included a so-called liquidity coverage ratio (LCR) that aims to ensure that banks have an enough high quality liquid assets, such as cash or assets that can quickly be converted into cash, to meet a bank’s need for liquidity during a 30-day period of stress in financial markets.
    In January this year global regulators gave banks more time to build up these cash buffers, phasing in the rules at 60 percent from January 2015 and the rising to 100 percent by 2019.
    The latest review for the first time includes data for the new LCR standard and finds that the weighted average LCR for the Group 1 major banks was 119 percent end-2012 and 126 percent for Group 2 banks, i.e. well above the minimum for both samples of banks.
    For all 223 banks, 68 percent reported an LCR that met or exceeded the 100 percent minimum while 90 percent reported an LCR at or above a 60 percent initial requirement, raising the question of why banks had complained so vocally that they could not meet the original 2015 deadline.
    A third component of Basel III is the Net Stable Funding Ratio (NSFR), a standard for longer-term liquidity that is currently under review by banking regulators to avoid any unintended consequences prior to its implementation in January 2018.
    Based on the original NSFR standards from 2010, the review found that the weighted average NSFR for the Group 1 banks improved to 100 percent by end-2012 from 99 percent in June 2012. For Group 2 banks, the average NSFR declined to 99 percent from 100 percent in mid-2012.

    www.CentralBankNews.info