Month: February 2012

Last week a few articles were forwarded to me about the misconduct of government sponsored enterprises (GSEs) – specifically Freddie Mac. However, when you look closer you should come up with a different conclusion.

On January 30, ProPublica and NPR released Jesse Eisinger’s article, Freddie Mac bets against American Homeowners.

And it states:

“Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

“Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.”

In late 2010, Freddie Mac, according to the ProPublica story, started to retain a greater number of “inverse floaters,” an instrument created when mortgage pools are turned into collateralized mortgage obligations.

ProPublica contended that Freddie Mac’s use of inverse floaters represented a conflict of interests because it would lose money from the hedges if borrowers refinanced to a lower rate mortgage. They implied Freddie could abuse its influence in the housing market to prevent lower-interest refinancing programs, which are better for borrowers.

And from the title and the harsh language you come up with the idea that Freddie Mac is out to get you America. I think once you get a quick overview of what a collateralized mortgage obligation and how they usually work, I think you’ll see the change in their portfolio was the result of a numbers game and not the actions of “Big Brother.”

What Does Freddie Mac Do?

Hold the jokes…

In a nutshell, Freddie Mac purchases and bundles mortgages into pools of mortgages, then sells the expected mortgage payments to investors in the form of bond-like securities.

This process was and still is a vital component of today’s mortgage market, or most other credit markets for that matter, since securitization frees up capital that can then be used to make more mortgages.

These bundles of mortgages are called collateralized mortgage obligations (CMOs), which are securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corp. (Freddie Mac), or the Government National Mortgage Association (Ginnie Mae).

So the structuring of a CMO creates a series of tranches from the cash flows from mortgage securities.

In structured finance of this sort, a “tranche” is one of a number of related securities offered as part of the same transaction. In other words, after you put all the mortgages together, you then slice it into pieces and sell those pieces depending on how risky the tranche. Remember, the set-up of Freddie and Fannie bonds is to tackle interest rate risk. GSEs are guaranteed in regards to principal.

Your tranches will usually look like this: some fixed-interest rate tranche of various maturities (created at a lower interest rate than the yield on the mortgages) and one medium-term maturity fixed-rate tranche, which is then decomposed into a floating rate bond and an “inverse floater,” which consists only of the inverse of the interest rate payments on the floating rate note.

The Undesirable Feature…

The undesirable feature of a mortgaged-backed security is their prepayment risk. People repay when they refinance. You’re paying off an existing loan to gain another one at a better rate. Prepayments are very unattractive to bond investors, since the time you’re happiest as a fixed-income investor is when interest rates fall, since your bonds go up in value. But if you hold a simple mortgage pass-through, the bond can disappear due to prepayments.

Both Freddie and Fannie have a long standing practice of hedging their prepayment risk.

Moreover, the inverse floater is the portion of the CMO that is most exposed to prepayment risk. Given the uncertainty about government intervention in the mortgage market, investors in both straight pass-throughs and in CMOs would be more leery than usual of taking prepayment risk.

Why the Increase in Inverse Floaters?

The article tried to argue that the increase in the last two years of inverse floaters on Freddie’s books were a sign of the GSE positioning itself to bet against homeowners. But they didn’t tell the story of an increase in Freddie’s CMO issuance during this period – it appears the increase in inverse floaters was due to an increase in mortgage funding.

I think what Freddie tried to do was keep the “refinancing risk” to itself, and since Freddie controls the levers and can obstruct refis, it can package securities that are attractively low-risk for investors while retaining the high-risk stuff and “game” the risk-management for its own benefit.

Is this evil? No. Can this be done in a different manner? Yes. But this style of risk management isn’t out to harm Americans. Innovative finance is complex and hard to explain. I believe that Freddie Mac’s inability to explain the subject matter is at the heart of the misunderstanding and maybe with a little more due diligence on the part of ProPublica and NPR, this would all be a moot point.

Good Investing,

Jason Jenkins

Article by Investment U

By TraderVox.com

Looking at a chart of the AUD/USD you will realize that since January the AUD has been growing stronger. In fact in under just about 3 months the AUD/USD has gained almost a 1000 pips!

Analysts have been left bemused by this recent rally of the AUD and some say it is just a matter of overvaluation on the part of traders. We try to examine what really is keeping the AUD as strong as it has been and where this trend is expected to continue.

1. Influence of foreign investment:

The mining industry in Australia nowadays is nothing but booming and seriously. This has led many foreign investors to increase their demand for the AUD. Of course, we know this is logical as in order to buy stocks and create the capital they need to partake in what they want, they first of all need to have the AUD.

Moreover there is increased focus by Japanese investors especially to partake in Australia’s mortgage market. This huge and obvious inflow of capital into Australia is considered one of the main reasons why the AUD has been on the up and if this trend of foreign investment in Australia continues you can expect the AUD to reach new highs.

2. Highly rated debt

There have been many debt downgrades in the past months that have affected many countries. Investors and portfolio managers who are in search of highly rated and investment grade debt have been pushed to Australia which has its credit rating unaffected.

3. A Safe Haven:

While the Australian dollar may not be on the same level as currencies such as the CHF, USD and JPY as far as safe havens are concerned; it still remains a good alternative for investors seeking a safe haven. It gets better when we put just Asia into perspective, as many believe that investing in Australia is by far safer than investing in the majority of Asian nations. With a good business environment, enhanced by supportive legal institutions, the AUD becomes a key way for many investors to preserve their capital.

To conclude though this rally of the AUD is shocking, it is justified. Expect this rally to continue if the euro zone remains risky and Australia remains a good investment alternative and safe haven.

Article provided TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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By TraderVox.com

The Bank of Japan is expected to refuse any additional monetary easing expected next week since there are signs of stronger global economy. Moreover, the reconstruction efforts from last March’s earthquake have boosted the country’s economy.

The Bank of Japan Governor Masaaki Shirakawa together with his board is expected to uphold the overnight lending rate between zero percent and 0.1 percent on Valentine’s Day. According to some analysts, the 55 trillion yen asset-purchase proposed will remain unchanged. Yesterday BOK promised additional stimulus in the England’s economy and Fed in the US promised to keep the interest rates at their lowest.  Indications are there that in Tokyo; officials may focus of positive signs from the financial market and the low unemployment rate as indicators of growth in global economy. This is despite the strong yen crippling exports which analysts say might have caused the economy to shrink last year.

However, analysts are cautious about the sovereign problems in Europe and they are advising that the policy makers should leave an allowance of additional accommodative policies for April. It is estimated that the GDP declined by 1.4% over the last quarter after expanding by 5.6 percent over the previous three months.

The country’s economy had experienced some difficulties due to the recent weakness in exports due to a strong yen, the floods that hit Thailand which disrupted production significantly, and the reduced business and consumer confidence which was caused by the Europe’s debt crisis. Following the March earthquake, the government approved four supplementary budgets to strengthen demand and rebuild the country. The budgets were worth 20 trillion yen.

Japan officials are grappling with measures to take to ensure that their currency remains weak against the currencies of its major trading partners. Yesterday, the Japan’s Topix Index rose to its highest level since August and the currency remained 2.4 percent (77.21) weaker than the postwar level of 75.35 yen. The strong Euro has caused enormous losses to Panasonic Corp and Sharp Corp. necessitating the monetary easing that had been conducted.

Article provided TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Source: ForexYard

The EUR/USD came off a two-month high today, following fresh concerns that Greece could soon default on its debt. The pair spiked as high as 1.3322 yesterday, after Greece reached a deal on austerity measures late in the European session. Hopes that the country would soon reach a debt swap deal with its creditors were dashed today, after euro-zone finance ministers demanded additional spending cuts from Greece before approving a second bailout.

The EUR/USD has dropped close to 100 pips so far today, while the EUR/CHF has dropped as low as 1.2090. The news adversely affected other riskier currencies, including the Australian dollar, which has tumbled well over 100 pips against the greenback since the beginning of the day. Crude oil has once again dropped below the psychologically significant $100 a barrel, and is currently approaching the $98 level.

Turning to next week, traders will want to continue monitoring any announcements out of the euro-zone. In addition to Greece, Portugal is likely to soon require a bailout. Further negative news out of Europe may result in riskier currencies extending thier bearish trends.

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.

The National Bank of Serbia held its 2-week repo rate unchanged at 9.50%.  The Bank said: “The key risks to inflation projection stem from the international environment due to the still unresolved crisis in the euro area, as well as from fiscal policy at home. Keeping the budget deficit within the framework earlier agreed with the IMF would serve as an additional safeguard of macroeconomic stability and leave more scope for future relaxation of monetary policy.”

The Bank previously cut the interest rate by 25 basis points in January, 75 basis points in December and November, 50bps in October, and 50bps in September, after pausing in August, while previously the Bank reduced the 2-week repo rate by 25 basis points to 11.75% at its July meeting, and cutting the rate 50 basis points at its June meeting to 12.00%.  Serbia reported inflation of 7% in December, down from 8.7% in October, 10.5% in August, 12.1% in July, 12.7% in June, 13.4% in May, 14.7% in April, and just above the bank’s inflation target range of 3-6%.  

By MoneyMorning.com.au

[Ed Note: You can read Part I here]

The commodity boom has created a “two track” economy. The mining and commodity boom benefits a small part of the economy whilst simultaneously creating problems for other parts.

The mining and energy sector account for less than 10% of the Australian economy. This is smaller than the Australian finance sector or manufacturing industry.

Mining and mining-related sectors, such as construction, manufacturing and services industries which benefit from mining activity, make up about 20% GDP. These sectors will contribute approximately two-thirds of the projected 4% GDP in 2011/12. The remaining 80% of economy will contribute one-third of growth.

Mining employs 1.5% of the workforce reflecting its capital intensive nature. Unfortunately, a portion of the equipment needed is imported adding to the current account problem, especially in the short run. A combination of high domestic costs and the strong Australian dollar means that a significant portion of project related work is now done offshore.

The revenue earned and the overall contribution to national income does boost the economy and creates employment. But dividends and interest payments to overseas investors reduce the amount of earnings that stays in Australia.

The concentration of mining activity in Western Australia and Queensland also creates imbalances within the domestic economy. Skill shortages in mining means rising salaries, attracting workers from other industries and placing pressure on general wage levels.

It also exaggerates property price increases in some areas. This creates inflationary pressure that forces the Reserve Bank of Australia to raise interest rates.

The rising demand for Australia’s mineral exports also pushed up the value of the Australian dollar. Since deregulation in 1983, one Australia dollar has purchased, on average, around 77 US cents. The commodity boom and Australia’s high interest rates relative to the rest of the world increased the value to around 95 to 100 US cents, peaking at around 110 US cents.

The high Australian dollar places exporters at a cost disadvantage and also makes it difficult to compete with cheaper imports. Affected sectors include key Australian industries that are significant employers such as education services, tourism and manufacturing. Australia may lose up to 170,000 manufacturing jobs over the next 10 years, almost double lost jobs in the past decade.

The domestic economy remains lack lustre. Consumers are affected by significant debt levels and weak wage growth. Public spending has fallen reflecting pressure to return the budget to surplus. Business investment has been weak, reflecting sluggish demand.

Debt levels remain high. Between 1991 and 2011, household debt rose from around 49% to 156% of disposable income. In 1989, when mortgage rates were 17%, the ratio of interest payments to disposable income was 9%.

Currently, despite the fact that mortgage rates are around 7.5%, the ratio has increased to around 12%. As households increase savings and reduce debt, consumption is lower, contributing to slower growth.

Slow growth in credit, reflecting households reducing debt and problem in the banking sector, also constrains growth. Employment in manufacturing, retail and financial services is weakening, with major employers announcing layoffs.

There are other unresolved problems. Housing prices remain high based on traditional measures such as affordability and rental returns.

According to the latest Economist survey (published on 26 November 2011), Australian house prices were overvalued by 53% based on rents and 38% measured against income levels relative to long run averages.

According to The Economist, Australian home prices are overvalued by at least 25% based on the average of these two measures. The level of overvaluation is greater than in America at the peak of its housing bubble.

The real issue is over investment in housing stock, which produces low or nil return for inhabitants. Encouraged by complex subsidies, large amounts of capital are locked up in housing, unavailable for more productive wealth creating activities such as new industries.

In international rankings, Australia regularly performs poorly in competitiveness, productivity and innovation. This is inconsistent with the national character, which prides over achievement in competitive sports. Australia believes it can “punch above its weight”.

In a recent paper entitled “Productivity – The Lost Decade”, economist Saul Eslake found that Australia’s productivity growth during the 2000s was 0.50% below that of the 1990s, when it was broadly comparable to the OECD average.

Between the mid-1990s and the mid- 2000s, annual labour productivity declined from 2.8% to 0.9% per annum. Over a similar periods, broader measures of productivity that incorporate capital as well as labour fell from 1.6% to near zero.

The GE Global Innovation Barometer ranked Australia 16th out of 30 countries, well behind the leaders like the US and Japan. While 18% of local business leaders, perhaps blinded by patriotism, nominated Australia, only 2% of global senior business executives cited the country as an innovation champion.

The GFC also significantly reduced the wealth of individuals, especially retirees. The value of their investments declined. At the same time, income and returns from investments also declined. The “wealth effect” limits consumption but also encourages those planning for retirement to increase their savings.

These problems mean that Australia’s non-mining sector is forecast to grow at a modest 1% per annum, compared to the mining sector which is forecast to grow at 5%.

Despite the recovery, many parts of the economy, other than the buoyant mining sector, remain subdued. The stock market, although not an accurate measure of economic health, remains over 30% below its levels before the crisis.

Interest rates for 3 and 10 year government bonds have fallen sharply to record lows, reflecting increased pessimism amongst investors about economic prospects.

Australia remains vulnerable. A slowdown in Chinese growth and fall in commodity prices and volumes would affect the economy adversely. Australian history suggests that mining booms are finite and end suddenly causing significant disruption.

Problems in sovereign debt and attendant pressures on the banking system may decrease available funding and increase borrowing costs for Australian banks and companies. Overvalued house prices and high household debt increases vulnerability to an economic slowdown, with an accompanying rise in unemployment or to higher mortgage rates.

A credit crunch or recession could cause house prices to fall worsening domestic conditions, which would in turn affect domestic banks.

The perfect storm for Australia would be the coincidence of those events.

Australia has some flexibility. Public debt at around A$250 billion is a modest 22% of GDP providing flexibility to stimulate the economy. But this capacity can be over-estimated. Prior to the GFC, Ireland’s debt levels were modest, around 25% of GDP, but the need to bail out troubled banks and the collapse of the real estate market led to debt levels increasing rapidly
Australian interest rates are relatively high (official rates are 4.25%), providing flexibility to cut borrowing costs to buffer any shock. The currency is flexible and a fall in value of the Australian dollar would help cushion any weakness, as was the case in 1997/1998 Asian crisis and again in the GFC.

Australia Treasurer Wayne Swan was recently anointed as the world’s best Finance Minister. It is worth noting that a previous Australian Treasurer received similar accolades in 1984, only to subsequently preside over a deep recession, which “the country had to have”.

Australia’s economy remains vulnerable to a variety of external factors over which it has no control.

© 2012 Satyajit Das All Rights Reserved.

Satyajit Das is author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011). He is a keynote speaker at After America: the Port Phillip Publishing Investment Symposium, March 14th-16th at Sydney’s Intercontinental Hotel.

From the Archives…

Facebook Shares – Notice for Mad Punters: Buy This Stock
2012-02-03 – Kris Sayce

Why Your Money is Better Off in Stocks Than in the Housing Market in 2012
2012-02-02 – Kris Sayce

Why You Should Pay Attention to the ASEAN Bloc
2012-02-01 – Cris Sholto Heaton

Will Australian Property Prices Keep Falling?
2012-01-31 – Dr. Alex Cowie

Is Ben Bernanke Secretly Buying Gold and Silver Stocks?
2012-01-30 – Dr. Alex Cowie

Vulnerable to External Influences – The Economic State of Australia (Part II)

By MoneyMorning.com.au

Warren Buffett is a hater.

He hates gold. And he’s keen to tell as many people as he can just how useless it is.

In an article for Fortune magazine, the multi-billionaire investor “proves” that stocks, farmland and cash are a better investment than gold.

In a moment we’ll show you why Buffett is right… but also why he’s dangerously wrong. First, let’s summarise Buffett’s position…

He compares two investments. One is to buy the entire stock of gold ever produced. He says it would “form a cube of about 68 feet per side”. And the estimated value would be USD$9.6 trillion.

The alternative is to invest USD$6.4 trillion in Exxon Mobil shares (this isn’t possible because the market cap of Exxon Mobil is only USD$409 billion. But for the purpose of his example he says you could buy 16 Exxon’s). And USD$2.2 trillion-worth of farmland.

The remaining USD$1 trillion is for “walking-around money”. In other words, pocket change.

In fact, Warren Buffett says gold is so useless when compared to other investments…

“A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobile (XOM) will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions… The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube [of gold], but it will not respond.”

Look, he’s using an extreme example. But we get the point he’s trying to make. He’s saying is that gold is useless because it doesn’t produce anything and doesn’t even earn its owners an income (unless you lend it to someone for a fee, which arguably defeats the purpose of owning gold in the first place).

In a way, Buffett makes the same argument for investing in Exxon Mobil and farmland that we make for investing in gold – they are hard assets. Exxon Mobil produces the world’s most important energy commodity.

Farmland is necessary for feeding the human population.

And gold is an asset the government can’t devalue by decree – even though governments may try. And unlike shares and farmland it’s very hard for the government to expropriate it (again, even though they may try).

For years the U.S. government rigidly tried to keep a lid on the gold price. Right up until the U.S. dollar gold-exchange standard ended in 1971, the U.S. government insisted the official price of gold was only USD$35 per ounce.

But that didn’t stop the market setting its own price. In the early 1960s the gold price “bubbled” to over USD$40 as traders bet the U.S. government would raise the official price. It didn’t and so the “bubble” popped.

But by the late 1960s there was no stopping the market from taking over the gold price. Before U.S. President Richard M. Nixon announced the end of convertibility of U.S. dollars into gold in 1971, the market had already pushed the free market price of gold back above USD$40. By 1972 it was USD$58 per ounce.

Or put another way, the value of a dollar in gold terms had fallen nearly 40%.

That’s why you should own gold.

(By the way, the U.S. government still sets the official price of gold at USD$42.22! There’s no accounting for the stubbornness of bureaucrats.)

We agree with Buffett. Stocks are a great investment. But not all the time… as anyone who bought shares at the top of the dot-com boom in 2000 or the mining boom in 2007 will tell you.

As we see it, gold isn’t just an alternative to stocks or other income-producing assets. Gold is also an insurance policy. And as many real money supporters will tell you, gold is also money… and has been for thousands of years.

But this isn’t an argument over whether one asset is better than another. That’s just dumb. Who cares if gold is better than stocks… or cash is better than property?

What’s important is to figure out when to buy a particular asset. Take a look at the following table. It shows the respective returns for five assets since 1978:

We’ve chosen five year intervals for no other reason than space limitations.

If investors followed Buffett’s advice in 1978, 1983 or 1987 they would have done well. Exxon Mobil [NYSE: XOM] shares have produced quadruple- and triple-digit gains for those investors who bought and still hold.

But in 1992 the best investment would have been in Warren Buffett’s Berkshire Hathaway A-Class [NYSE: BRK-A] shares. An investor would have made a 929.05% gain holding them from then until now.

Yet investors who followed Buffett’s advice since 1997 haven’t done as well. Either from buying shares in his company or in Exxon Mobil.

Because by far and away the best investment has been… gold. Iowa farmland and Exxon Mobil come a distant second and third. Berkshire Hathaway and the S&P 500 come in fourth and fifth.

What this simple exercise tells you is that you won’t achieve investing success by backing one investment and running with it forever. The trick is to identify a trend early on and stick with…

But only until you find the next trend.

Cheers.
Kris.

P.S. We’re betting on natural gas as the next big trend for 2012. But it isn’t the only potential trend. At the Port Phillip Publishing investment conference in Sydney next month, your editor, our colleagues and a select few guest speakers will highlight some of the best investment ideas for the year ahead.

It’s a must-see event for any serious investor. You can check out the subjects we’ll cover by clicking here…

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Pity the poor Eastern Europeans. Fifty years under the domination of their massive Soviet eastern neighbor then the collapse of Communism there two decades ago offered undreamed of opportunities to join both the European Union and NATO.

But they still remain dependent on the Russian Federation for the majority of their oil and gas needs, and the new capitalists in Moscow do not hesitate to charge the highest prices possible.

According a number of East European nations, particularly Poland and Bulgaria, are actively investigating the possibility of establishing hydraulic fracturing (“fracking”) operations on their territory to develop an indigenous natural gas industry and undercut the Russian Federation’s state-owned natural gas monopoly Gazprom.

Mindful however of the possible negative environmental effects of fracking last month 166 members of the Bulgarian National Assembly’s 240 parliamentarians voted to impose an indefinite ban on shale gas exploration and extraction in Bulgaria using hydraulic fracturing or other similar technology.

Now a hard-hitting editorial in the Trud newspaper by Ivan Sotirov entitled, “Russian Lobby Against Shale Gas,” accuses pro-Russian Bulgarian supporters of fomenting protests against shale gas operations in the country.

Commenting that “nightmare” protest rallies against fracking have taken place in the capital’s Sofia streets Sotirov wrote of their effects, “The ostensibly rightist majority at the National Assembly has capitulated, without any serious arguments, to this pseudo-civic pressure, and has adopted a moratorium on prospecting and extracting shale gas in Bulgaria. In other words, the National Assembly has banned Bulgaria from learning whether it has shale gas deposits – information which could have released us from the total energy dependence on Russia. The majority in the National Assembly has allowed the Bulgarian Socialist Party (BSP), the Movement for Rights and Freedoms (DPS), and several semi self-disintegrating mini-parties to insult the Minister of Energy (Traycho Traykov), who has been appointed by the same confused and helpless majority… It has been inadmissible for the chairman of the Union of Democratic Forces (Martin Dimitrov) and rightist deputies to support this decision, which contradicts the Bulgarian national interest and protects our total energy dependence on Russia. In addition, all this has been done without any serious motivation because the campaign against the shale gas prospecting has been based on cheap manipulations and lies. This has been an attempt to disguise a political issue as a purely ecological matter.”

Writing about the campaign as one of disinformation Sotirov continues, “The first lie has been that experiments with a new technology will be conducted in Bulgaria. This is totally untrue… Second – the so-called defenders of environment protection among the politicians have not cited even a single example of a serious case of pollution after fracking.”

Finally, Sotirov names names: “Noted chiefs of the Sixth Department (of State Security – the Communist era secret service), led by Dimitur Ivanov – Mityo the Gestapo and the supporters of (former President) Georgi Purvanov’s Grand Slam (the ‘Belene’ Nuclear Power Plant construction, the ‘South Stream’ (natural gas pipeline to export Gazprom gas) project, and the ‘Burgas-Alexandroupolis’ oil pipeline project, are among the protestors against shale gas prospecting…

Sotirov concludes, “The most shameful fact is the realization that after 22 years of democracy Bulgaria’s policy continues to be dictated by oligarchic pro-Russian circles, which, hiding behind nationalistic and ecological rhetoric have not allowed a single serious strategic Western investor to set a foot in Bulgaria. The question is when somebody will finally stop them.”

Why would Bulgarian pro-Russian interests do such a thing?

Could it be that because of a long-term contract, Gazprom delivers more than 90 percent of the natural gas consumed in Bulgaria?

Or that last November it was announced that Gazprom will enter Bulgaria’s retail fuel market by buying gas stations in the country through its Serbian unit Naftna Industrija Srbije?

Or that, according to Gazprom CEO Aleksei Millter, addressing Gazprom’s Annual General Shareholders Meeting on 30 June 2011, during his presentation “Gazprom: New Horizons,” outlined a series pf projected natural gas pipelines across Bulgaria to deepen Gazprom’s market share in Eastern and Central Europe?

Or that in December 2010 Gazprom acquired a 50 percent stake in the South Stream Bulgaria AD pipeline project?

Or the fact that the natural gas contract between Bulgaria and Gazprom expires later this year?

Or that Gazprom is forecasting its consolidated net profit for 2011 at $40 billion, or 25 percent more than in 2010?

Nah, surely none of the above – Bulgarian parliamentarians are only being good custodians of the country’s environment, surely.

Source: http://oilprice.com/Energy/Natural-Gas/Russia-Behind-Bulgarian-Anti-Fracking-Protests.html

By. John C.K. Daly of Oilprice.com

The Wall Street Journal reports that Chrysler is in talk with plenty of major lenders including JP Morgan (NYSE:JPM) and Ally Financial about starting an in-house consumer and dealer auto-lending and loan operation through a joint venture.Chrysler has used Ally as its preferred leader for loans and leasing, but the contract is scheduled to end in 2013.JPMorgan Chase (NYSE:JPM) has potential upside of 19.7% based on a current price of $38.17 and an average consensus analyst price target of $45.7.

RBC Capital upgraded shares of Kite Realty Group (KRG) to outperform from sector-perform. Shares of Kite Realty Group are up about 0.5%.