Month: March 2012

Apple (NASDAQ:AAPL) announced on its website yesterday that it has reached 25 billion app downloads since it was first launched four years ago.Apple has paid out $4 billion to developers after taking its 30% cut, added last week that its application business had created 210,000 US jobs.SmarTrend is bullish on shares of Apple and our subscribers were alerted to buy on December 02, 2011 at $391.11. The stock has risen 39.4% since the alert was issued.Apple Inc. designs, manufactures, and markets personal computers and related personal computing and mobile communication devices along with a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, third-party wholesalers, and resellers.

By TraderVox.com

The euro remained weaker against the yen after declining for the last four days. This comes before a report forecast showing that the euro-zone economy declined in the fourth quarter is released later today. Investors are taking this as an additional sign of the effects of the debt crisis in the region.

The demand for the dollar increased after the Federal Reserve Bank of Dallas President Richard Fisher indicated that he is opposed to additional bond purchases. If there are no additional bond purchases, the world’s reserve currency will be lowered significantly. The Australian dollar declined to its week’s lowest prior to central bank meeting today to decide on the interest rates.

According to Marito Ueda, buying euro makes no sense at this time since the ECB is caught up in efforts to tackle the region’s sovereign debt crisis. Ueda, who is the Senior Managing Director in Tokyo, further added that the ECB has no room left to boost the economy through its monetary policy.

The euro dropped 0.2 percent to sell at 107.57 yen from 107.79 yen registered at the close of trading in New York yesterday. The 17-nation currency was a bit changed at $1.3208, while the dollar dropped to 81.43 yen from yesterday’s close of 81.56 yen.

The Gross Domestic Product in the euro area is estimated to have fallen by 0.3 percent in the fourth quarter of 2011 from the figure recorded in the third quarter. This is a figure that has been given by some economists in the region ahead of the release of the official GDP report by the European Union. If this drop is actually true, then this would be the first drop since the second quarter of 2009 and would confirm the Feb. 15 estimate.

Economic analysts are also estimating that the European Central Bank will keep the interest rate at 1 percent in its efforts to spur growth in the region. ECB officials meet on March 8^th to deliberate on this issue and Greek debt swap deal will be completed on the same day.

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By MoneyMorning.com.au

Warren Buffett has to be one of the top investors of all time.

Even those who question whether his best days are behind him have to admit that he’s one of the most influential movers and shakers in the markets.

That’s why it’s worth keeping an eye on what Buffett is doing – and on what he’s watching.

So today we want to take a look at Buffett’s favourite economic indicator. It’s the one that tells him all he needs to know about the US economy.

And it’s not looking good…

Warren Buffett’s ‘Desert Island’ Indicator

In a 2010 interview with CNBC, Warren Buffett was asked which single set of economic data he’d request access to if he were stranded on a desert island.

Buffett’s response? Freight car loadings. These show the volume of raw materials and industrial supplies being moved by rail around the US every week.

Continue reading “A Warning From Warren Buffett’s Top Economic Indicator”

By MoneyMorning.com.au

I think the Aussie dollar is overvalued against the USD. Buying some US dollars, as a shorter-term trade, is a good hedge against the deflationary turmoil I see hitting markets in the next few months.

It is also useful to think of gold as a separate currency. You see it quoted in US dollars because the US dollar is the world’s reserve currency. It’s therefore a global benchmark for the price of gold.

But if you’re earning and spending Aussie dollars, it’s the AUD gold price that’s important. The strength of the Aussie dollar against the USD means that AUD gold has not advanced as rapidly these past few years.

But in times of turmoil, AUD gold does a superb job of protecting your wealth. Look at this very long-term chart of AUD gold below. In uncertain times (late 2008/early 2009) a falling Aussie dollar (versus the USD) turbo charges the rise in AUD gold.

The bottom line is gold seems certain to rise against all paper currencies. The long-term trend in the Aussie dollar gold price (see chart above) illustrates this perfectly.

In the meantime, short-term, central bank liquidity is pushing the market around.

If we know anything from the past few years, it’s that central bank money only has a short-term impact on markets.

More ominously, short-term, central bank liquidity has even less of an impact on the real economy. While global equity markets – and especially those in the US – have rallied strongly these past few months, the fundamental picture continues to deteriorate.

You make think this a strange thing to say given the generally upbeat commentary we have heard recently. Listening to the mainstream media, you’d be forgiven for thinking the global economy is ‘recovering’.

But I want you to consider two pieces of research that debunk this myth.

The first is from Bianco Research in the US. They point out that on 30 September 2011, the estimate for company earnings growth in the first quarter of 2012 was 8 per cent. By 30 December that had dropped to a 3 per cent growth expectation. As at 10 February, earnings growth expectations had fallen to 0%.

So after growing at double-digit rates for 8 quarters, then slowing to 5 per cent growth in the final quarter of 2011, earnings growth is likely to stall completely in the first quarter of 2012.

Meanwhile, the market rallies.

And just recently, Lakshman Achuthan, head of the Economic Cycle Research Institute (ECRI) pointed out that the US economy continues to deteriorate despite the feel-good news filtering out.

So don’t be seduced by the price action. Be wary of the crowd. Stay away from the running, blundering herd. And most of all, be patient.

It won’t be long before deflation rears its head again. At which time steel yourself to wade into the market and buy some very undervalued companies. It will happen, it’s just a matter of timing.

Greg Canavan
Editor, Sound Money. Sound Investments.

Publisher’s Note: Price action isn’t the only thing seducing investors. In fact, Greg Canavan has identified the three key mistakes Aussie investors are making right now. To find out what they are and how you can avoid them, click here…

From the Archives…

The Stock Market Financial Winter is Coming
2012-03-02 – Dan Denning

Why You’ll Want to Watch This ‘Bad’ Retail Stock Very Closely
2012-03-01 – Kris Sayce

Higher Oil Prices – Government Guaranteed
2012-02-29 – Dr. Alex Cowie

Asymmetric and Economic Warfare with Iran
2012-02-28 – Dan Denning

Why the Greek Debt Crisis Has Nothing to Do With the Euro
2012-02-27 – Nick Hubble

Using Aussie Dollar Gold to Hedge Against Deflationary Turmoil

By MoneyMorning.com.au

I’m probably the last person you want to get stuck sitting next to at a dinner party.

At least that’s what I reckon the people sitting next to me on Saturday night were thinking.

To be fair, my social skills weren’t at their sharpest. My wife has just had a beautiful baby girl. After two weeks of sleepless nights, this was my first outing into the world. So I was a bit rusty.

Of course, as an immensely proud father, I was beaming about the latest addition to the clan. I have a ’10-photo rule’ in this situation. I probably have 2000 photos of my kids on my iPhone. Apart from my family – and that includes our two year old who navigates the iPhone better than me – no one wants to see them. So … after 10 photos, that phone goes back in my pocket. And that’s ‘the 10-photo rule’.

So after a selection of cute pictures, in my exhausted state my conversation fell back to default mode – resources and mining.

Note to self: Most sensible people don’t want to hear about how tight the short-term fundamentals of the copper market are. At least not on a Saturday night!

When the people sitting around me gave me that ‘I don’t give a rodent’s rectum about Chinese copper inventory levels’ look, I thought hmmm … maybe it’s time to switch to a more inclusive topic: Aussie property.

Turns out, everyone at the dinner party had a view on the Australian property market. And they were fighting to be heard. I was happy to have a chance to catch my breath and sip on my first beer in a fortnight. But after listening to five minutes of an ‘Australian property will go up forever’ chorus, I bludgeoned my way into the conversation…

Maybe I should have stuck to the baby photos!

Why the Property Market is Running Out of Gas

It seems almost no Australian property owner wants to hear anything negative about the property market – even if it is the truth.

So when I started throwing about a few iffy statistics I’d had my eye on, I felt about as welcome as a fart in a spacesuit.

Do you think they wanted to hear that annual housing credit growth is at a 35-year low?

Not particularly.

But it is.

Housing credit is the ‘gas’ that inflated the property bubble. As investors and home buyers take out more loans, it facilitates property demand, which leads to higher prices. A month ago, annual housing credit had fallen to a record low of 5.4% year on year. Last week, this fell again to set a new 35-year low of 5.3% year-on-year growth.

The result? At best – housing holds its ground. At worst, gravity finally catches up with the Australian property market in earnest, and we see it fall significantly as it has in every other Western property market.

Housing credit is the lifeblood of rising property prices. Housing credit growth levels spent most of the last 20 years in the double digits. With levels of only 5.3% year-on-year growth today, it is impossible to see property prices staying at their ‘laws-of-physics-defying’ high levels.

We have also just got news that new homes sales in Australia crashed by a record monthly fall of 7.3% in January. The monthly fall in new sales was not a one off, and is part of a trend. Multi-unit sales have been smashed 25.1% if you compare sales over the last three months to the same period in 2011.

So where do we stand now?

The chart from the Reserve Bank of Australia gives us an idea.

Australian Property Prices Are Clearly Trending Down

Australian property prices did actually pick up 0.8% in February, and these charts don’t show this. I’m not reading too much into this. One month’s figures are meaningless on their own, and this is likely to be just a blip. The trend is still clearly down, which suggests prices have further to fall just yet.

The Aussie economy has just had more bad news. Data released yesterday on the Aussie retail sector, painted a bleak picture for the economy.

The Australian services index contracted in a big way last month. Anything under 50 means the sector is shrinking – and in February it was at 46.7, plummeting down from a barely expansionary 51.9 in January. The ‘employment measure’ figure dropped from 51.2 to 47.5. Sales and new orders also fell by a similar amount.

This matters to Australian property owners because the retail industry directly employs around 15% of the Australian workforce, and indirectly employs far more. When such a large chunk of the Aussie workforce is starting to do it tough, you should expect a slowdown in the Australian economy and a further fall in property prices.

Betting on Australian Property Prices Falling

Many large hedge funds overseas are betting on Australian property prices to crack sometime this year. They don’t tend to reveal how they are doing this, but I expect they are shorting property funds, the Aussie dollar, or possibly interest rate futures.

The easiest way for most everyday investors to do the same is to sell their homes. However, RP Data-Rismark are now launching an index that allows investors to trade Australian property prices on a daily basis. It is not up and running yet, and it’s not clear yet whether it is possible to short sell the index to profit from falling prices.

If it is possible to short sell this index, it may have started just at the right time for property bears.

It looks increasingly like Australian property could face the same dose of salts that has affected nearly every other property market in the world in the last few years.

But … do you think the other dinner guests wanted to hear all that?

After retreating to some banal small talk about how nice the food was, I politely moved seats to sit next to the birthday girl who wanted to see those baby photos.

She’d just bought an apartment as well.

So … I tactfully broke my 10-photo rule, and kept those cute baby pictures coming.

Dr. Alex Cowie
Editor, Diggers & Drillers

Related Articles

The Conference of the Year for Australian Investors

Why the Australian Economy is Much Weaker than the RBA Thinks

Sydney – Hero or Villain of the Aussie Housing Market?

The Australian Property Market and the Conversation Nobody Wants to Hear

EUR/JPY Daily outlook – 06 March

Monday saw an initial fall for the Euro against the Yen, with the pair once again testing the important technical and psychological level at 107.00. Early losses were later clawed back as the bulls pushed the pair higher, closing the day slightly lower than it opened.

Yesterday’s price action produced a bullish pin bar on the daily charts suggesting further gains in the coming days. The pin showed an almost perfect bounce of the support level at 107 confirming its importance and relevance in the market.

We can see in the chart below the strength 107.00 has shown in the past. You’ll notice how the market has on numerous occasions bounced of this area. Its proven to be a stronger support area as opposed to resistance which may strengthen yesterdays bounce.

Our long bias can further be confirmed buy a potential bullish Hikkake setting up. The chart below shows how on Tuesday last week the market produced an inside bar. The following bar signaled the start of a bullish Hikkake with its Lower Low and Lower High in relation to the previous bar. For the bullish Hikkake to confirm we’d need to see today’s price continuing to push higher and breaking the high of last Tuesdays inside bar. Should this happen, our bullish outlook for the near term would certainly be strengthened and confirmed.

With Mondays strong bullish pin we’ll be looking to long the market in anticipation of further gains. We’ll aim to buy on limit at a 50% retracement of the pin, placing our stops just below 107.00. Initial targets will be placed just above last Tuesdays inside bar. Should the market reach this level in today’s trading session we’ll look to adjust our targets towards last week’s highs.

Article by vantage-fx.com

The 11 March 2011 earthquake and tsunami that effectively destroyed Tokyo Electric Power Company’s six-reactor Fukushima Daichi complex have claimed another victim, Japan’s fast breeder reactor program.

Fukushima’s effect on Japan’s atomic energy program has not had the consequences of a nuclear blast, but more the relentless drip of acid rain, slowly eroding public confidence in the country’s nuclear power industry, which last month saw 49 of the country’s 54 nuclear power plant (NPP) reactors idled. The figure is hardly insignificant, as the nuclear power plants (NPPS) collectively generated more than 47,000 megawatts, nearly 30 percent of the country’s electrical needs.

Now another nail has apparently been driven into Japan’s civilian nuclear future.

On 23 February a Japan Atomic Energy Commission panel of experts reviewing Japan’s nuclear fuel cycle production policy in the wake of the Fukushima debacle, while acknowledging that a fuel cycle involving a fast-breeder reactor has some advantages, concludedthat for Japan it cannot be considered as a realistic option for the next two to three decades due to technological considerations.

The review is effectively a death sentence for Japan’s Monju troubled $12 billion experimental fast-breeder reactor in Tsuruga, Fukui Prefecture, intended to reprocess spent nuclear reactor fuel to produce plutonium that can subsequently be recycled and reused to generate electricity. Japan had high hopes that the fast-breeder reactor program could close the loop on its nuclear fuel cycle, allowing it to reuse, recycle and produce fresh fuel for its 54 reactors. The subcommittee’s report effectively ends Japan’s hopes of using nuclear fuel on a near-endless cycle.

The Japan Atomic Energy Commission subcommittee commented in a draft document summarizing its discussions that the country’s best option during the next 20-30 years instead of reprocessing spent nuclear fuel would be instead to recycle plutonium-uranium mixed oxide (MOX) reactor fuel. The subcommittee recommended that spent nuclear fuel be treated in the “once-through” cycle, where after it is burned in a nuclear reactor the spent fuel is buried after being used in nuclear reactors just one time rather than recycled.

The subcommittee members’ viewpoints were varied, not unanimous, as Chairman Tatsujiro Suzuki told reporters that he believed that fast-breeder reactors have “extremely advantageous characteristics from a long-term viewpoint.” According to the subcommittee’s report, the “once-through” cycle has high economic efficiency, while MOX recycling has high efficiency of uranium use.

Given Japanese public opinion sensitivity about nuclear power in light of Fukushima, every aspect of Japan’s civilian nuclear power program is more closely scrutinized than in the past, and the Monju fast-breeder reactor has had its share of problems. Construction started on the sodium-cooled, MOX-fuelled Monju fast-breeder reactor in 1986, with the reactor going critical in April 1994, but shortly after coming online the facility suffered a severe fire. Japanese officials subsequently attempted to cover up the accident, with the result that the Monju fast-breeder reactor was kept offline until 6 May 2010.

Exemplifying its problems, as of June 2011, the Monju fast-breeder reactor has only generated electricity for one hour since going critical in 1984.

Adding to the irony, Fukui Prefecture is Japan’s most pro-nuclear province, housing 14 nuclear reactors. Fukushima Prefecture held a distant second place with 10 reactors. But Monju’s effective mothballing ends Tokyo’s vision of using fast-breeder reactors to produce more nuclear fuel than they burn, allowing for a cycle in which new nuclear fuel is created by the fast-breeder reactor, extracted, reprocessed and used anew by other NPPs.

Japan Atomic Energy Agency fast-breeder program Director General Satoru Kondo commented, “It was supposed to be the dream reactor, powering Japan for 100 or 200 years. I never thought it would take this long.”

But dreams remain exactly that – dreams, with the effective loss of Monju, Japan’s nuclear power industry is back to square one after more than two decades and $12 billion invested – importing nuclear fuel for its increasing contentious nuclear power generation program.

So, Japan’s NPP program, for which Monju was hoped nearly to eliminate costly uranium imports, is, like Japan’s other, more conventional sources of power generation, yet one source of hard currency expenditure.

Dreams die hard, some more and expensively so than others.

Source: http://oilprice.com/Alternative-Energy/Nuclear-Power/Another-Fukushima-Casualty-Japans-Fast-Breeder-Reactor-Program.html

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

Google (NASDAQ:GOOG) is working on developing a new version of it operating system for Android called ‘Key Lime Pie’, according to sources on the Verge website.Android’s current OS is Jelly Bean, following the Ice Cream Sandwich.Google (NASDAQ:GOOG) has potential upside of 15% based on a current price of $621.25 and an average consensus analyst price target of $714.43.Google is currently above its 50-day moving average (MA) of $615.11 and above its 200-day of $570.64.In the last five trading sessions, the 50-day MA has remained constant while the 200-day MA has risen 0.39%.

Greif (GEF) was upgraded today by JP Morgan (JPM) from neutral to overweight, as the firm believes that the stock was oversold during the last eight months. Shares are higher by over one percent.

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned dollars to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.