InvestMacro Forex News

Source: ForexYard

The Riksbank, Sweden’s central bank, will meet on Tuesday for its latest interest rate decision and could surprise investors. Consensus expectations are for only a 25 bp rate cut. This is despite a larger than forecasted reduction in the Norwegian interest rate by the Norges bank who cut rates by 50 bp last week.

In light of the spillover effects of the European debt crisis and lower inflationary pressures the Riksbank is expected to provide a bit of monetary policy easing with a 25 bp rate cut. There is the possibility the Riksbank could surprise investors with 50 bp of easing as CPI has steadily declined to 2.8% y/y in November from a high of 3.4% in August. Swedish growth forecasts are also likely to be trimmed as well given the expected slowdown in European.

Despite the possibility of additional easing of Swedish monetary policy the SEK has strengthened versus the EUR with the EUR/SEK falling to support at 8.9800. A break here would then find support at the September low of 8.8600, followed by February’s double bottom reversal at 0.8700. Turning to the USD/SEK the pair has surprisingly been unable to sustain a bid above the September high near 7.0000. The 50% Fibonacci retracement of the 2010 high to the 2011 low rests at 7.0500. Support is found back at the December low of 6.6890.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The EUR sunk to its lowest level since early October following comments by both Moody’s and Fitch. The rating agencies criticized last week’s EU economic summit which fell short of a solution to the current fiscal problems. There is a risk of additional sovereign credit downgrades before the end of the year which would weigh on market sentiment and the EUR.

Equities are off to a poor start today with the Shanghai Composite finishing lower by 1.9% to close on a 33-month low. Today we’ll be getting a slew of data releases from Europe. This morning there will be UK CPI which is expected to show a decline from last month’s high. Should inflation come in under last month’s 5% reading this would support additional QE from the BoE. The GBP/USD has support at 1.5520 followed by the November 25th low of 1.5420.

German sentiment is expected to fall further as the EU economy looks set to slip into a recession. The EUR/USD has support at 1.3145 from the October low. A break here will put 1.3050 in play, the 61% Fibonacci retracement of the 2010-2011 rally from 1.1875 to 1.4940. Resistance is found at 1.3210 the November 25th low and 1.3240 the bottom of the channel line from December.

The highlight of the day will be the FOMC meeting. No policy changes are expected though the Fed could restructure some of its methods of communication with the public. The recent appreciation in the USD/JPY appears to be a result of overall USD strength rather than JPY weakness as the JPY is strengthening in the crosses. As such the USD/JPY could find resistance at 78.50 from its long term trend line from 2007.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

On Wednesday at 13:00 GMT the Norwegian central bank will meet. Markets have already priced in a 25 bp cut but there may be scope for further easing of monetary policy which would likely weigh on the NOK.

The 25 bp rate cut would take the Norwegian interest rate lower to 2.00% though some economists are calling for a 50 bp reduction. Recent inflation data suggests there is room for additional interest rate cuts in 2012. Statistics Norway said inflation for the month of November remained unchanged at 1% while year-over-year inflation is up 1.2%. The Norges bank keeps an inflation target of 2.5%.

As is the case with most central banks the Norges Bank is facing headwinds from the European debt crisis and is affecting Norwegian monetary policy. At the last Norges Bank press conference Governor Oeystein Olsen made it clear interest rates would decline if global growth were to turn lower. As of the latest EU economic summit the European debt crisis remains unsolved and European bond yields are once again falling under pressure. In addition Europe looks headed for a recession in 2012 given the sharp fall in PMI surveys. Thus, the Norges bank could sound more dovish in its press conference that will begin at 13:00 GMT on Wednesday.

The USD/NOK has support from last week’s low at 5.7110 with resistance in a range between the November high of 5.9350 and the October high of 5.9700. A break here would expose 6.1465, the 61% Fibonacci retracement from the June 2010-July 2011 move.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Central Bank News
Here's today's Central Bank News link list, click through if you missed the previous central bank news link list.  Remember, if you want to submit links for inclusion in the daily link list, just email them through to us or post them in the comments section below.

By Euan Wilson, originally published in the Nov 2011 Socionomist | Download the Complete Issue (1.48 KB)

The socionomic model has often noted the dramatic effect social mood has on the public’s attitude toward sitting leaders. For example, the November 1999 Elliott Wave Theorist featured a short story on elections in a report titled “Socionomics In a Nutshell.” It showed that rising public mood tends to lead to presidential reelections while falling public mood leads to oustings. Robert Prechter, Peter Kendall and others have proposed other aspects of the mood/election relationship, such as the observation that rising mood favors traditional candidates while falling mood tends to smile upon perceived agents of change.

The charges that Obama was born outside the United States and therefore is ineligible to hold the presidency fit right in. The same charge was leveled at the Republican presidential candidate during the same election: John McCain was born in the Panama Canal Zone when his father served there as a Navy officer. The public always looks for justification to support its feelings; during extreme mood phases, voters embrace increasingly farfetched rationales.

Figure 1

Barack Obama’s presidency has so far endured two major social mood phases: the strong bear phase that he inherited and a powerful bull phase (see Figure 1). The “Birther” charges dogged him during his candidacy and early presidency, as stocks plunged. But during the subsequent two-year rally, those same charges faded–and then melted away.

It turns out that Obama is not the first sitting president to face charges of ineligibility. James Fallows of The Atlantic noted that such an expression has happened once before: to President Hoover, another big-bear-market president (see Figure 2). In 1931, John Hamill released his book, The Strange Career of Mr. Hoover Under Two Flags. Among other accusations, Hamill asserted that Hoover had given up his U.S. citizenship as early as 1900 in order to gain an edge in an overseas business deal.

Figure 2

Hoover’s eligibility question did not get legs, despite the continued plunge in public mood. But mood did do a number on Hoover’s reelection bid (and legacy). First, he was the people’s overwhelming choice for president: He entered the office with a 58% landslide victory in the popular vote as the Roaring Twenties came to a head. Then he was tossed from office just four years later in a near-mirror-image landslide defeat of 57%. The reason for this emphatic dismissal? Social mood had plunged, as displayed by the Dow, which had shed 89% of its value.

Having dodged the Birther charges, presumably for good, the question now is how President Obama will fare from here. What are his chances for reelection? The direction of public mood, as reflected by the stock market, will set the odds.

This article is syndicated by The Socionomist, a publication of the Socionomics Institute, and was originally published under the headline Does Social Mood Influence Accusations of Presidential Ineligibility?. The Socionomist is designed to help readers understand and anticipate waves of social mood. Copyright © 2012 Socionomics Institute.

Source: ForexYard

The Pound appreciated against the 17 nation euro during Monday’s trading ahead of fresh concerns over Europe’s debt crisis. UK 10-Year Gilts climbed for the first time in 5 days as investors took to the sterling as a safety precaution as the French Presidential Elections and turmoil in the Dutch Government have made the British pound the more appealing “safe haven” currency.

The Sterling appreciated to its strongest level in 20 months against the Euro after French President Nicholas Sarkozy has fallen behind Socialist Francois Hollande going going into the final round of the French Presidential Elections.The Pound was given a further boost from news out of the Dutch Government where early elections are due to take place as a party from the minority ruling coalition withdrew.

The Sterling rose 0.5 percent versus the 17-nation currency and reached 0.8149, its strongest level since back in August 2010.

There are a number of financial reports expected for the next few days which could affect the movements of the currency markets. Tomorrow,Canada will release its Retail Sales Figures as well U.S New Home Sales while European Central Bank President Mario Draghi will deliver a speech on Wednesday. Other important news items on this week’s Agenda include GBP Gross Domestic Product,FOMC Statement,U.S Interest Rate Decision, a speech from Federal Reserve Chairman Ben Bernanke,New Zealand’s Interest Rate Decision as well as the Bank of New Zealand’s Rate Statement.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By MoneyMorning.com.au

“Taxes are what we pay for civilised society.” – Oliver Wendell Holmes, Jr. U.S. Supreme Court Judge

Rubbish.

There’s nothing civilised about taxes. And in fact, we’ll argue that taxes actually destroy society rather than enhance it.

So we prefer the comments by Albert Jay Nock in Our Enemy The State (your editor’s new favourite book):

“On the contrary, it is clear that whatever party-competition we shall see hereafter will be on the same terms as heretofore. It will be a competition for control and management, and it would naturally issue in still closer centralisation, still further extension of the bureaucratic principle, and still larger concessions to subsidised voting-power. This course would be strictly historical, and is furthermore to be expected as lying in the nature of things, as it so obviously does.

“Indeed, it is by this means that the aim of the collectivists seems likeliest to be attained in this country; this aim being the complete extinction of social power through absorption by the State.”

It’s a long quote. But worth it… in our opinion.

Of course, you may not agree. In fact, whenever we write anything that’s anti-taxation, anti-government or free market, Money Morning subscription cancellations spike higher.

It seems most don’t like it when we touch a raw nerve. Proof of that is in the feedback scores from the “After America” conference. It shows the audience disliked our presentation the most.

Perhaps it was what we said…

“It’s not that China is moving towards capitalism. It’s that Western Welfare States are becoming more centrally planned.”

“Western democracy has its own breed of thugs – politicians, bureaucrats and vested interests – who try to exert… power over individuals.”

“Before your very eyes, the whole world is slowly but surely turning towards communism and central state control. As you can tell, I despise these economies and political systems.”

It shows that even those who follow our advice closely can’t always cope with what we say.

But why not check out what offended so many people for yourself. You can find out how to access the video covering both days of the “After America” conference by clicking here.

Plus you’ll get to see which stocks and sectors the Port Phillip Publishing editorial team are most bullish (and bearish) on for 2012. Find out more here…

How the State Destroys Society Through Taxes

But getting back to the argument on taxes, it’s undeniable that taxes destroy society rather than enhance it.

Think back to your childhood… or your parents’ childhood. Back then, there were genuine communities. People looked out for their family and their neighbours.

If a neighbour was in a spot of bother, the local community would hold a whip-round for spare change or unwanted food and clothing.

But as soon as the State gains a stranglehold, individuals are far less likely to chip in. Not because they don’t care, but because the government has taken taxes, it leaves individuals with less disposable income.

But that’s not all. Taxation and the Welfare State are used to brainwash the public into thinking it’s not their place to help… after all, they’ve outsourced “helping” to someone else… namely, the government.

You saw a similar reaction following the Queensland floods. But not before human nature kicked in first. People helped… they provided food, shelter, clothing and money to those in need.

But then, as always, the stinking government took control and ruined everything. Not satisfied with the voluntary good nature of humans, the government decided it must force people to help.

The result? People who may have donated voluntarily, thought twice about it. Rather than asking where their neighbours are for help, they asked, “What’s the government going to do about this?”

It’s the same wherever government pokes its nose where it’s not needed. And it’s the same regardless of which party is elected.

Taxes and the “Criminal Class”

Remember, contrary to belief, no-one voted for the current system of welfare states seen around the world. They happened by degrees.

That’s what makes government so sinister and evil.

One group enters government and offers favours to its supporters… paid for by the taxes of others.

The next group that enters government needs to reward its supporters, but without alienating too many others. So it keeps what it can of the previous government’s plans and then adds its own.

Or as Albert Jay Nock puts it:

“[Governments] meet from time to time, decide what can be ‘got away with,’ and how, and who is to do it; and the electorate votes according to their prescriptions.”

The outcome is perpetual growth in the size of government. And therefore, perpetual growth in government spending and taxation.

Bottom line: Given a choice, if people living under a truly free market, with limited government intervention could vote to keep their system, or vote for an exact replica of today’s bloated welfare state, there’s not a man or woman alive who would vote for change.

With one exception: the bureaucrats and hangers-on who would see the money they could make and the influence they would hold from it.

To finish, we’ll leave the last words to Mr. Nock:

“Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators and beneficiaries from those of a professional-criminal class.”

Cheers
Kris

P.S. Don’t forget to check out how you can get your hands on the “After America” DVD. Full details are available here…

The Conference of the Year “After America” DVD

Why You MUST Speculate

Disruptive Technology Stocks For Smart Small-Cap Investors

How Taxes Destroy Society, Rather Than Enhance It

By MoneyMorning.com.au

To do serious business in America requires vast campaign contributions to several layers of elected politicians, an army of lobbyists in Washington, retired government employees on your board and public devotion to the American civic religion. It goes on every year and restarts every election cycle.

Even then, it is hard to know if you are going to get what you pay for.

It’s easier and more efficient in Mexico. You pay bribes directly. The decision maker gets the money. He or she clears the path for you to do the thing. The facilitator takes a slice. People mostly keep their promises. The deal is done.

Apparently, bribe paying in the United States is a sign of a healthy, functioning democracy; doing the same thing in Mexico in a more streamlined way is a criminal violation of the standards of good corporate governance.

Not Quite Getting It

Here we have The New York Times “exposing” the shocking and presumably ghastly fact that over several years, Wal-Mart paid out some $24 million in payoffs to politicians, bureaucrats and petty gatekeepers in Mexico, all in the hope of employing people who need jobs and bringing goods and services to those who need them.

The breathless and bloviating Times expose is written as if these intrepid reporters were exposing a violent mob engaging in killings to get its way. You never quite get that Wal-Mart would much rather have used the money to expand its business, hire more employees or beef up its inventory. Money used for bribes is a loss to any company, a terrible price of doing business under the state.

In any case, the trove of information was shovelled on the paper by disgruntled employees. And it is hardly unusual. It’s how business is done. Regardless, the Times is out for blood — not from the extortionists who run the system, but the victim, Wal-Mart.

At last count, there were 1,200 news stories about this on the wire. Forbes reports:

“Wal-Mart Stores will likely face the wrath of the U.S. Department of Justice for reining in an internal investigation into bribery allegations at its Mexican subsidiary.”

I’m sure that congressional investigations are around the corner, with all the named executives hauled before committees and harassed by regulators.

The bitter irony is that it will transfer more of the Mexican system to the U.S. To survive, Wal-Mart will be forced to spend more than the $12 million-plus it already spends every year on campaign contributions and lobbying.

All that enforcement of the Foreign Corrupt Practices Act (FCPA) does is increase the amount of domestic corrupt practices. Indeed, that is the way the system is supposed to work. Truly, if the FCPA were actually enforced as written, business around the world would come to a grinding halt.

Eliminate Barriers to Enterprise

Under the well-known Mexican system, people called “gestores” specialize in interfacing between business and bureaucracy. They deal with inspectors, permit issuers, environmental bureaucrats, labour officials and zoning regulators.

If the gestores can make the deal, they keep 6% as a matter of convention. Even average citizens use these people to stand in line for them — all in an effort to find nonviolent means around the bureaucrats.

Given the ridiculous barriers in place, it’s not a terrible system. Corrupt government that you can buy your way around is far better than “good government” that blocks all progress.

The rap on Wal-Mart is that it did far worse. When the company discovered this was going on, it buried it, rather than go public. No kidding. Maybe the company imagined that it would be smeared and attacked?

Bribing officials is illegal in Mexico, just as it is in the United States. But of course, that is just the gloss. Anywhere there is government, there is corruption. That’s the purpose of barriers to enterprise, to extract wealth from those who want to get past them.

Is it worth it? It is either pay or don’t do business, which means lasting poverty. Today, Wal-Mart Mexico employs 209,000 people and is the country’s largest employer. It has provided a fabulous example of the merit of private enterprise in this country, which is finally getting on its feet economically.

It has brought food, goods and services to millions of people who otherwise would not have them. It has done more in 10 years for Mexico than all the government bureaucrats have done in one hundred or a thousand years.

For its crime of bringing economic development to this country, it must be smeared, beaten and forced to pay obeisance to the American political class. Why should Mexico enjoy such largess when there are millions of American bureaucrats who need to be part of this gravy train?

You can read thousands of academic papers on the problem of “corruption” in countries around the world and completely miss the central point. The way to eliminate the corruption is to eliminate the barriers to enterprise.

Why is this not obvious? Because many people imagine a utopian ideal that does not now and never has existed: good government. They imagine that government rules can be enforced impartially based on science or the public good.

It’s Sheer Nonsense

As Ludwig von Mises writes in Human Action:

“Unfortunately, the officeholders and their staffs are not angelic. They learn very soon that their decisions mean for the businessmen either considerable losses or — sometimes — considerable gains. Certainly, there are also bureaucrats who do not take bribes, but there are others who are anxious to take advantage of any ‘safe’ opportunity of ‘sharing’ with those whom their decisions favor… Corruption is a regular effect of interventionism.”

But here’s the part that upsets me so much. Somehow, private enterprise is always and everywhere blamed for perpetuating corruption, when the truth is obviously that the blame rests with government. It’s like watching a mugging and blaming the mugged for carrying too much money. It’s like telling anyone who faces the demand “Your money or your life” should always choose to give up his life.

The background here is nothing short of anti-capitalist resentment. The elites loathe Wal-Mart for its achievement in putting on display the incredible reality about capitalism that you never hear about in school: It is a system that is maniacally focused on the well-being of society in service of the common man.

Go to Wal-Mart and you see the workers and peasants not rebelling against the system, but buying stuff that makes their lives better. It looks rather mundane. It’s how civilization is built: one economic exchange at a time. The people who stand in the way don’t deserve a dime, but private enterprise is kind enough to cough it up, anyway. Wal-Mart deserves sympathy, not condemnation.

Jeffrey Tucker
Contributing Writer, Money Morning

Publisher’s Note: This article originally appeared in Laissez Faire Books

From the Archives…

Small Caps – A Way to Bet on Developing Markets…Without Investing Overseas
2012-04-013 – Kris Sayce

All Transactions to be Conducted in the Presence of a Tax Collector
2012-04-12 – Simon Black

How You Can Use Government Intervention to Profit on the Stock Market
2012-04-11 – Kris Sayce

Australia – The Pacific Pawn in USA Versus China
2012-04-10 – Dr. Alex Cowie

If Ron Paul Were US President…
2012-04-09 – Mark Tier

Why Walmart is the Real Victim of the $24 Million Pay-off in Mexico

The White House announced it was getting into the commodities game in an effort to protect consumers from some of the geopolitical factors spilling over into the retail gasoline market. OPEC and the IEA both said in their monthly reports that market perceptions were behind higher energy prices, not physical shortages. With most U.S. consumers still economically gun shy, gasoline consumption is down amid high retail prices. But on the business side, protection against potential oil shocks in the long-term could help push a reinvigorated U.S. economy over the recessionary hump. Apart from the murky waters of economic nuance, however, President Obama said that, no matter what, American commuters need gasoline. Speculation aside, maybe that’s the problem.

High gasoline prices make for angry constituents. That means politicians, especially politicians fighting to keep their paychecks, start pointing their legislative guns at Wall Street almost as soon as the gavel strikes. Market indices don’t particularly care one way or the other if consumers and lawmakers are frustrated, but they are concerned nonetheless. U.S. lawmakers in March complained to the Commodity Futures Trading Commission that nobody was watching energy markets closely because perceptions are trumping real-world scenarios. Demand is down and supplies are up, which typically means prices drop. But not so fast, the critics say. Someone must be cheating.

Energy wonks note, correctly, that hedging your energy bets is a good way to protect against future shocks. Imagine how much plane tickets would cost if the airline industry practiced a just-in-time policy for its fuel needs. The same would likely hold for refineries and oil producers. But that doesn’t mean much for the average consumer when gasoline prices can increase as much as 10 percent overnight because Iran’s Press TV ran a false report about a Saudi pipeline explosion, or U.S. refineries closed for maintenance or the weather suddenly turned colder or any of the other reasons cited for volatility in consumer gasoline prices.

It’s getting close to the so-called driving season in the United States when Americans take to the road for their summer vacations. But gasoline demand is down more than 3 percent compared with the same period last year. That may be because of improved fuel economy, a lack of general consumer spending or because of sluggish employment numbers means nobody has a job or vacation to drive to anyhow. Yet, the government said gasoline prices are starting to come down. But no matter. U.S. lawmakers, including the president, made a big show of their rhetoric on gasoline, jobs, energy security, American families and the like.

“Obviously rising gas prices means a rough ride for a lot of families,” said Obama. “Whether you’re trying to get to school, trying to get to work, do some grocery shopping, you have to be able to fill up that gas tank.”

And therein lies the problem. Most commuters go to school, get to work and run errands using a vehicle that runs on gasoline. Gasoline is a necessity and that’s in part why the debate ensues. Without massive subsidies, gasoline is going to get more expensive no matter what the politicians say. And until commuters move beyond the carbon mindset, that ride to work will continue to be a rough one.

Source: http://oilprice.com/Energy/Gas-Prices/Gasoline-is-Expensive-Deal-with-it.html

By. Daniel J. Graeber of OilPrice.com

Article by Investment U

In focus today: Canada’s oil is bypassing the U.S., underestimated industries, a tech play other than Apple (Nasdaq: AAPL), and the SITFA (in fact we have several quick SITFAs today)

Seagate Technology (Nasdaq: STX) is undervalued, shareholder-friendly, dominant, and boasts a big dividend. Could it be the best tech play outside of Apple (Nasdaq: AAPL)?

Almost all of Canada’s crude oil is exported to the U.S., for now anyway, but that’s going to change as soon as 2017.

In 2011, just 1.65% of Canada’s crude was exported to countries other than the U.S., but Kinder Morgan has initiated a $5-billion pipeline project that’ll redirect Canadian oil to the West Coast for export to Asia.

According to the Journal, this decision was accelerated by Obama’s decision to shelf the Keystone pipeline project that would have sent the crude south to the U.S.

This new pipeline will increase the amount of oil piped to the West Coast of Canada from 300,000 barrels per day to almost 850,000 per day, and since, according to the Journal article, the expanded pipeline will follow the route of an existing line, they expect little if any objections from native people or environmentalists.

Obama has stated that he will reconsider the Keystone pipeline project if the Canadians will reapply for a new permit, but not until after the election. But Canadian officials were quoted in the Journal as saying they are looking to expand their exports outside of the U.S.

If Canada shifts its export emphasis away from the U.S. markets, we here at home will have to rely on the less stable parts of the world for more of our oil imports. That will add a volatility factor to the price of our imports and that’s not good news.

Canada is our single largest oil supplier and having them focus on Asia instead of the U.S. could have a significant affect on the U.S.

Watch this one!

Underestimated Industries

Next up, analysts are underestimating the oil and natural gas industry.

According to Barron’s, the estimates for the first quarter for oil companies don’t include the increased prices we have seen for the past few months and they expect earnings and revenue to come in ahead of estimates.

The names Barron’s likes the best in the first quarter that will benefit most from the low estimates: Pioneer Natural Resources, Rosetta Resources and Oasis Petroleum.

Barron’s also thinks these three have the best asset bases and are top takeover candidates.

They also expect the oil names to beat expectations and natural gas to fall short in the first quarter.

But do not expect much of a drop in natural gas names from their current prices. They see expectations as being at the bottom of the range.

Julian Jessop, the Chief Global Economist at Capital Economics, said in a recent MarketWatch interview that he sees natural gas prices suffering from an unusually warm winter and expects them to run up to the $3 range by the end of the summer, and as high as $4 by the end of 2012. He attributed the move to more fundamental supply and demand by the end of the year.

Both look to have real upside potential.

A Tech Play Other Than Apple (Nasdaq: AAPL)

Seagate Technology (Nasdaq: STX), the drive manufacturer, is one of the dominant players in that industry, but trades for a ridiculous P/E of four times this year’s estimates and only three times 2013’s expectations.

And, according to the Journal, besides the super low valuation, it’s shareholder friendly, has a strong market position, a 3.8% dividend, plans to cut it shares by 25% this year, and it’s estimated to generate over $20 billion of the whole industry’s total of $30 billion a year.

Richard Kuegle of Needham has a strong buy rating on the stock and a target of $45. He thinks the current valuations are absurd!

There has also been a huge consolidation in the disc industry in the last few years, which has resulted in just two names, Seagate and Western Digital, holding 86% of the business. That bodes very well for pricing and margins going forward.

This is an industry in transition. The advent of tablets and mobile devices have altered for ever how the drive business does business, and that usually means it is undervalued. Kugele called it the best tech play outside Apple (Nasdaq: AAPL).

This one definitely needs to be on your screen.

Finally, the SITFA

This week, three quickies!

First up Buffett, yes the so-called sage of Omaha, gets the slap. I’m really tired of Buffett stories, but this one is funny.

It seems an Omaha charity auctioned off a dinner at his childhood home and there were no bidders. Really?

A chance to have dinner where he ate as a kid and no one bid. But you got to see a video of him, too. Still no takers, no stock tips either.

Gee, I’m stunned.

What are these folks thinking of?

Next, an update on the presidential election in France gets the nod, again!

As I mentioned a few months ago, a person named Hollande is running for the office and now it looks like he will in fact win, beating Sarkozy.

Here’s the funny part, he is a staunch socialist whose only real experience in politics was as mayor of a town of about 35,000 people.

He promises to increase government employment, lower the retirement age, and spend their way out of the Euro mess. Oh, and rewrite the agreement Sarkozy has with the Germans, which is essentially keeping the whole Euro thing together.

This one could be real mess.

And finally, Thailand has to get a cheek smacker. The Thais think they have found the solution for drunk driving and a way to reduce the injuries and fatalities associated with excessive drinking.

Dancing police women; I’m not making this up!

Here’s a little bit of the video.

That looks really effective. I’m sure Budweiser is shaking in their boots. Can you imagine your local or state police dancing to stop drunk driving?

Stay close, it’s getting crazier out there.

See you next week.

Article by Investment U