Gasoline Inventories Drop
The U.S. Energy Department said that fuel stockpiles have declined thus signaling a European Central Bank official to allow lenders to act and add to the region's debt crisis.
Futures climbed as much as 1.5% after the department stated that gasoline inventory numbers fell 4.28 million barrels last week. Supplies of distillate fuel, a category that includes heating oil and diesel, dropped 4 million barrels. Last week, the drop in supply left gasoline supplies at 217.6 million barrels the lowest level since December. Stockpiles were forecast to fall 1.38 million barrels, according to the median of analyst estimates in a Bloomberg News survey.
Top Forecasters Predict Euro Weakness in Spain
The top foreign-exchange forecasters believe the Euro will decrease in value as Spain self disciplines itself by hacking spending cuts. Meanwhile Italy continues to fight debt turmoil and is dragging the region into recession.
According to data compiled by Bloomberg, the head of currency strategy at Wells Fargo & Co., Nick Bennenbroek, expects that the Euro will drop more than 5 % to $1.24 at the end of 2012. Westpac Banking Corp., which had the second-lowest margin of error, predicts $1.26.
Swiss Franc Rifts Past Euro Currency Limit
The Swiss National Bank established the limit to protect exports for investors seeking a way out from the euro-area turmoil that drove the currency to a record 1.00749 per euro—the franc's strongest level yet. It breached the limit for the first time last week as the Euro slumped and Spain’s 10-year bond yields posted their biggest weekly gains since January on concern the region’s turmoil is spreading.
Canadian Dollar Strengthens After Job Gains
For the first time in 3 days the Canadian dollar, also known as the Loonie, strengthened after a government report showed evidence that the economy is firming up. Employers have added the most jobs since 2008 last month.
The Loonie's appreciation wiped out a previous loss that occurred amid concern European’s sovereign-debt crisis will weigh on global growth and drive investors to the safety of its U.S. counterpart. The job gains were more than seven times greater than economists forecast and dominated by full-time positions.
Pound Gains to 2-Month High Versus Euro
The pound is at its strongest against the euro in more than two months as reports released recently showed the United Kingdom services expanding unexpectedly last month and thus house prices increased.
Sterling has appreciated against most of its 16 major counterparts before the Bank of England meets tomorrow to review monetary policy. There's speculation policy makers will increase debt purchases to boost the economy. Meanwhile the pound weakened against the dollar as stocks around the world spiraled downward, boosting demand for the relative safety of the greenback.
Canadian Dollar Climbs
The Canadian dollar made a comeback by the most in the past two months by appreciating in its value against its U.S. Counterpart. Analysts think it might have to do with an improved outlook for the nation's exports after a report outlined U.S. manufacturing to be growing at a faster pace than previously predicted by analysts.
“The general tone for risk today is rather better,” Adam Cole, global head of foreign-exchange strategy in London at Royal Bank of Canada’s RBC Capital Markets unit, said in a telephone interview. “The global-risk backdrop still trumps the domestic data flow in terms of overall direction.”
Canada’s currency, nicknamed the Loonie, rose during the second quarter amid indications of a stronger U.S. economic recovery due to a Chinese manufacturing gauge released yesterday. Bank of Canada Governor Mark Carney said the nation’s economy has performed better than forecast.
Oil Prices Continue to Skyrocket
As oil prices continue to rise in almost six weeks after a report showed that the U.S., the world’s biggest crude-consuming country, is expanding at a faster pace than expected acting as a catalyst to signal economic growth.
“The West thinks that Iran, like many other countries, will surrender under pressure from the U.S., but this belief is wrong,” Foreign Minister Ali Akbar Salehi said in an interview with the official Islamic Republic News Agency published today. While sanctions continue to create challenges for Iran, the country is determined to stay steadfast in its stand.
U.S. Secretary of State Hillary Clinton said that negotiations between Iran and the five permanent members of the United Nations Security Council including Germany are set to be held on April 13 and 14 in Istanbul. The last time talks of such nature were held there was a communication break down without any commitments to hold another round in Turkey in January 2011. Since December, futures dropped 3.6 percent last week, the biggest decline amid speculation that emergency reserves would be released to lower prices.
Palladium Racing Ahead of Gold
Analysts predict a rise in demand and declining supply in Palladium causing a fury of investors to buy the precious metal at the fastest pace in more than a year. It is predicted that this quarter’s worst- performing precious metal, Palladium, will turn into the best by December. Palladium lagged behind in its growth this year due to sluggish vehicle sales in China, the world’s largest car market. According to the median estimate of 11 analysts surveyed by Bloomberg, it is expected that there will be a gain of 15 percent for gold, 13 percent for silver and 11 percent for platinum.
Bernanke to Cue QE3 in April?
It's safe to say that tax breaks that President George W. Bush originally put in place are now over marking an end of an era. In addition, a $1 trillion mandatory federal budget cut has analysts worried that it might slow down the economy's growth rate drastically. According to Bill Gross – the man who runs the world's largest bond fund at Pacific Investment Management Co. – there's a high probability of of Bernanke and the Federal Reserve announcing QE3 plans when they meet on April 25.
Federal Reserve and Big Banks Are Going to Crush the Dollar and American Savers
According to Charles Kadlec, a Forbes’ op-ed contributor, The Federal Reserve Open Market Committee (FOMC) has officially announced its goal to devalue the dollar by 33% over the next 20 years in its two day meeting. The decline of the dollar will be even greater if the Fed exceeds its goal of a 2% per year increase in the price level.
The big banks have also decided to demand issuing negative yield bonds through their treasury borrowing committee headed by JP Morgan and Goldman Sachs. In other others the once boisterous banks now wants Americans to pay to have the luxury of holding their money in bonds. American savers and especially the majority of American population living on fixed incomes and pensions – are going to suffer the consequences.
Bank of Greece Implicated in a Large Scale Embezzlement
Greece entered a new phase of illegally denied default when Health News, mainstream Greek public health website informed the public that approximately 70% of public utility funds in various large, interest-bearing accounts at the Bank of Greece were raided. These included most of the State’s regional hospital budgets, various universities and allegedly at least one utility company.
Monetary Policy May Be at Turning Point
Federal Reserve Bank of St. Louis President James Bullard says that the U.S. monetary policy might finally be at a turning point. There are public expectations that inflation will remain low thus granting the Fed leeway to maintain easing of monetary inflation. Chairman Ben S. Bernanke and other policy makers believe that a slow economy and subdued inflation will probably act as a controlling factor in keeping the main interest rate at close to zero at least through late 2014.
Fed officials have differed on whether more easing may be needed. New York Fed President William C. Dudley said that while economic reports have improved, it’s “far too soon to conclude that we are out of the woods” and “nothing has been decided” on more bond purchases.
Crude Prices Decline
Oil fell to a one-week low after manufacturing was seen in a downward trend in the Euro area and China this month. The trend signaled that fuel consumption will coincidentally also be on the decline.
The European and Chinese manufacturing data is weighing mightily on prices,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. The market is susceptible and there are significant economic signs of slowing.
Demand for Crude oil in May fell $1.92 to $105.35 a barrel on the New York Mercantile Exchange, the lowest settlement since March 15. Futures are 6.6 percent higher this year.
Bernanke Says Europe Must Continue to Aid Banks
Federal Reserve Chairman, Ben S. Bernanke, informed the Congress today that higher energy prices would discourage consumers from spending and thus weaken the U.S. Economy. Bernanke defended that growth in the economy would slow down at least in the short run because rising fuel costs would act as “short-term inflation pressures” and keep consumers trapped in their homes, cutting down on their purchasing power.
Regarding the European sovereign-debt crisis, the Fed chairman told Congress that Europe must further strengthen its banks and that its financial and economic situation “remains difficult” even as stresses have declined.
Saudi Arabia Can Raise Output 25% If Needed
Saudi Arabian oil minister, Ali al-Naimi, says that Saudi Arabia can increase their production by 25% if needed to calm qualms about supply concern that has led to skyrocketing oil prices in the past 3 years.
The world’s biggest crude exporter has the output capacity of 12.5 million barrels a day and will be expected to pump about 9.9 million barrels a day this month as well as next month. Al-Naimi reassured the press.
Saudi Arabia is a major player in the Organization for Petroleum Exporting Countries (OPEC) as it makes up the bulk of spare capacity. The second-biggest OPEC member, Iran may be diminishing its input as it faces U.S. embargoes and Europe is holding its consumers back from buying its oil.
Gold Bulls Weakest in Two Months
Extreme volatility in gold prices for the last two months has left gold traders the least bullish. The drop in prices has erased more than half of this year's gain based on speculation that the U.S. economy is strengthening and thus will advise the Federal Reserve against buying more debt.
Job growth in the U.S. has been at its strongest since 2006 in the past six months. Data released last week showed a sharp rise in payrolls that surprised economists. In addition, there is a 1.1% advance in retail sales in February which is the biggest in five months. The Bloomberg Consumer Comfort Index reached a four-year high in the week ending March 11.
California Sinking Into the Ocean?
A Wall Street Journal published an op-ed article today outlining California's troubles as high taxes and even higher government spending paves the way to the sunny state making grave mistakes that could land it under the same gloomy clouds of debt as Greece. Many Silicon Valley CEOs have decided against expanding in California due to heavy set regulations and high taxes. Whereas a reverse net migration has started, hundreds and thousands of workers and their families are leaving state in search of better opportunities elsewhere.
France’s Upcoming Election Means Euro Devaluation
France will be holding its second round of Presidential elections on May 6th and the socialist candidate Francois Hollande is expected to be the likely victor. Until now, Europe was forcing the weaker euro zone nations such as Greece, Portugal, Ireland, Spain, and Italy to tighten their budget strings and cut down their deficit spending. In theory it would help shave off their extreme debt. However, the French version of Paul Krugman to the Presidency, doesn't agree with this strategy. François Hollande favors direct stimulus and like the Americans wants to up the ante on the bond printing machine and borrow their way out of their debt.
Brazil Winning Currency Fight
Brazil's fight to nurture currency gains by a “monetary tsunami” is proving successful. The government will continue to stay cautious as borrowing costs in rich nations have been foresighted to be low in the next decade. Brazil's measures to manage capital inflows have proved effective.
Gold Futures Fall
Gold dropped in price to $1700 an ounce along with other commodities due to concern that economic growth in China is slowing down and it may impact the demand for raw materials. In fact, the Standard & Poor’s GSCI Index of 24 raw materials dropped as much as 1.2% from demand as China faces one of its biggest trade deficit last month in about 22 years. The world's second-largest economy dealt with weak factory-production in the last two months and retail sales are marked below the median economist-estimate in the same time frame, according to government data.
Copper Futures Dwindle
Copper fell the most in two weeks on concern that demand will slow after China, the world’s biggest metals consumer, cut its economic-growth target. Premier Wen Jiabao stated, that the country’s 8 percent annual goal in place since 2005 was lowered to 7.5 percent, today. Copper also dropped on forecasts that automobile sales in China in the two months ended Feb. 29 headed for the biggest decline in seven years after gasoline costs climbed to a record. On the London Metal Exchange, copper for delivery in three months fell 0.9 percent to $8,505 a metric ton ($3.86 a pound). Nickel, zinc, lead, aluminum and tin also slid in London.
Manufacturing Unexpectedly Slows Down
Manufacturing in the U.S. grew less than forecast in February as orders eased, slowing the industry that has powered the two-year expansion. The Institute for Supply Management’s factory index fell to 52.4 from 54.1 in January according to the Tempe, an Arizona-based group. Readings above 50 signal growth. Higher fuel prices may be holding Americans back from spending on goods and services. At the same time, auto sales and exports are experiencing a boost which is crucial in underpinning the manufacturing industry. Manufacturing accounts for about 12 percent of the world’s largest economy.
Bernanke's Leaks Are Spoiling The Punch Bowl
Ben Bernanke's been watching the price of crude and has come to the realization that his inflation forecast is no good. He's hinting that the market is already full of inflation and he knows better than to add to it. Jon Hilsenrath, at the Wall Street Journal, says that the Fed is on hold for the next three months, till June. Moreover, Bernanke isn't able to make a move on the monetary front within five months before a national election. Nonetheless, these circumstances will do little to drastically move markets. Other crucial factors are at play when it comes to the dollar. It should put a floor under bond yields, but it's still not a good reason to sell bonds. While it may affect the stock markets, chances are that it will have little if any effect on the price of crude.
Something big is about to happen to silver and gold
This has been a great week for precious metals. Last week gold climbed 2.9% while silver soared 6.4%. The fact that silver is not pulling back is an indication of how strong that market is right now. “It is remarkable to see both metals hold their gains with no profit taking”, says Gold guru James Turk. It's evident that traders are see something big is about to happen in the next 2-3 months.
Europe's debt crisis clouds hang over G20 talks
Group of 20 (G20) policymakers meet this weekend to discuss Europe's debt crisis as the rest of the world looks for pledges that the euro zone will boost its crisis safety net. Advanced and developing nations are keen for the European Union to do whatever it takes to contain the crisis and convince the International Monetary Fund (IMF) to boost it's support in helping the victims. However analysts see little hope of that happening given the down-to-the-wire negotiations over every step of Europe's response to the debt crisis so far.
When Will Silver Reach a New High?
According to Jeff Clark, from last week's Metals, Mining, and Money from Casey Research, it may take until May 2012 for gold to reach a new high given the magnitude of the correction that started in September last year.
The Silver bull market is far from over it seems, regardless of any shortcomings we may see in the near term. It's important to keep in mind that silver has a lot of industrial uses for which demand is rising. Let's also not forget that silver, like gold is a hard currency.
That said, it would be wise to take advantage and buy silver at $30 because the window won't be open for too long. The profit you someday realize from silver will be made buying now, when the price is low.
Gold Is a Safe Bet
While you certainly can't walk into a grocery store and expect to pay with a 32 oz gold bar like you would with any other currency. Nevertheless gold is hard currency. If things go further south in regards to the current state of the U.S. Economy, then hard currency is exactly what you need to make it through. Gold is known for its divisibility, portability and scarcity. Just ask the people who used gold to bribe their way out of Nazi Germany.
When paper currency loses it value, gold will hold true time and time again. If the current state of the U.S. economy continues to tank, times are definitely going to get tougher. Hard currency is a safe bet but you'd be well advised to hang on to smaller units of gold such as gold coins. Especially if you need to jet out of the country in a hurry.
Greece's Second Bailout Funds Insolvent European Banks
The Greek initial 'bail out package' meant the bulk of the money went to European and Greek banks which funded the ECB and therefore European banks. As part of the latest conditions set by the second Greek bailout, an 'escrow account' is to be created. It would allow Greek creditors to override the distribution of funds previously planned to be channeled where they're needed the most-to Greek citizens. Greece's second bailout is really a Greek-funded bailout of insolvent European banks.
Yen Hits Seven-Month Low
The Japanese yen dipped to its lowest in the past seven months, causing concern for the economy. Japanese manufacturers. The Bank of Japan's move to suddenly increase its stimulus measures has caused the yen to fall by 3.7% against the greenback since the14 February move. A strong yen is painting a gloomy picture for profit outlooks for Japanese manufacturers, with some focusing on overseas production. Car makers, such as Toyota, Honda and Mitsubishi, have been some of the worst hit by the strong yen as it makes their products less competitive abroad.
Nancy Pelosi Issues Statement On Soaring Gas Prices
Democratic leader Nancy Pelosi released a statement today on the issue of gas prices skyrocketing. Independent reports have confirmed that speculation is driving oil prices higher to the point of hurting consumers and damaging the economy. There are no so called oil shortages but its a convenient lie in which Wall Street stands to profit. Whatever the reason for the gas surge, one thing is for certain - the situation is about to get far, far worse.
Wall St loses steam after Dow crosses 13,000
U.S. stocks made little improvements on Tuesday after the Dow topped 13,000 for the first time since May 2008. Higher oil prices further damped prospects for the economy.
Since the start of the year, signs of improvement in the economy and stabilization of Europe's debt crisis have driven the Dow up 6.1 percent, while the S&P has climbed 8.3 percent.
In addition, "gas prices across country are raising some questions about earnings," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. Higher gas prices severely affect corporate profits as consumer hold back on their spending habits and their businesses' expenses escalate.
Approval for Greek Bailout Plan Delayed in Brussels
On February 15, there was a meeting held to discuss the approval of Greek bailout plan in Brussels but was further delayed by Euro zone finance minister. The Minister claims the Greek political parties chiefs failed to commit to the necessary reforms. In addition, Euro zone leaders said that Greece did not provide a solid plan for how it would fill a €325 million Euro gap as promised in budget cuts for 2012.
Greece desperately needs approval for this bailout plan before the end of the month other wise it will face catastrophic bankruptcy. The €14.5 billion debt is due in March. Reports from Brussels indicate that Antonis Samaras, the head of the New Democracy Party and the likely next prime minister in the next election has not signed off on the austerity plan in Greece.
EU leaders are concerned that if Samaras failed to express his support for the proposed pension, pay and job cuts in Greece-- they will not be implemented in the country’s upcoming elections in April. In the mean time news coming out of Greece marks further deterioration in the country's economy.
U.S. Debt Deal Struck
The American economy is heading towards some troubled waters by raising its debt ceiling today (with 52 votes from the Senate), to borrow another $1.2 trillion in an attempt to bolster the economy. In essence, the Americans have added $120 billion to their national debt in the span of two days.
Stock Market is Over Stretched at Present
Since the beginning of the year 2012, the benchmark S&P 500 has climbed 7.5%. This is nearly a year's worth of returns in just over a month. This surge has left the market "overstretched" and vulnerable to a sharp short-term correction. The investors should be cautious in short term. Investors must remember that markets are like runners. They can’t run for miles without taking time to breathe. And since the start of the year, stocks have sprinted. Each time stocks have gotten to this "overbought" level, they've suffered sharp short-term selloffs. Realize this is a trader's concern, not an investor's concern. It's no cause to sell any long-term investment you have made like a good dividend-paying stock.
But if you're considering putting on any long-side trades now, it's worth keeping this "overstretched" condition in mind. With the market in this position, a 3%-5% correction down to around the 1,300 level is quite possible.
Bank of England injects another £50bn into UK economy
The Bank of England recently announced that it will pump another 50 billion pounds ($79 billion) into the British economy to help boost and fortify financial institutions. As it stands, the Bank of England has printed $515 billion since the commencement of the liquidity program in March 2009.
Heritage Foundation Report Explains Federal Spending Trends
According to a new study conducted by conservative think tank, Heritage Foundation, Americans have outgrown their dependence on federal government assistance by 23% in the past two years under Obama. The report shows spending on "dependence programs" accounts for more than 70% of the federal budget.
The Aussie Commodity Boom
Australia is a commodity powerhouse-- ranking second in the world for recoverable reserves of bauxite, copper, gold, ilmenite and silver. While a large importer of crude oil and oil products, Australia is also a major exporter of coal, iron, gold amongst other commodities. In addition, Australia is also geographically located right next to the world’s largest consumers of commodities - Asia.
Governor O’Malley’s Budget Raises Taxes On Maryland’s High-Earners
In his 2013 fiscal year budget proposal, Gov. Martin O'Malley wants to raise taxes for Maryland's high earners in order to help cover the state's $1 billion shortfall. Maryland residents who earn six figures or more face tighter restrictions on personal exemptions for themselves and family members as well as face caps on personal deductions at 90% of total income. In addition, O'Malley's plan to introduce Internet sales tax would raise more than $300 million which would account for a third of the state's budget shortfall next year, according to lawmakers. .
Investors Seek to Hedge against Financial Losses in the Wake of U.S. Debt Crisis
The Wall Street Journal reported that the Weiss Rating for the U.S. Government was that of a nation just two marks above “junk” — the category assigned to countries on the brink of bankruptcy. As news of the U.S. debt crisis looms ahead---all your money, savings and investments are going to be impacted. As an investor, it's crucial now more than ever to hedge against financial losses in managed Forex funds, protect investments and even make money as the crisis unfolds.
California in Crisis
Now a days most of the time Eurozone debt crises is highlighted in the financial news but very few people are paying, if any attention to what is going on in their own backyard. You already know home prices have gone down the hill in California that has affected many people. Now the state controller, John Chiang has told the legislators that only a month worth of cash is left. He stated “California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payments delay and borrowing”. Chiang made this disclosure in a letter sent to lawmakers today. The announcement was surprising since lawmakers previously believed the state had funds to last through the fiscal year that ends in June. California is the 8th largest economy in the world.
Debt Limit - A Guide To American Fedral Debt Made Easy
We all know the drama of US raising the Debt limit. For those of you who want it to be explained like a two year old, you would love this video clip. It will give you a great idea as to what mess United States is in presently. How long do you think before US goes bankrupt? Click here to watch the video now.
Silver is Up 6.6%
You may have missed it, as the markets are ripping on the first trading day of the year, but silver is up 6.6% in its biggest one-day move in more than three years. Gold is up more than 2.3%. Silver, like gold, trades as a monetary asset. When people are worried about fiat currency, they buy precious metals. And today's move in metals shows that despite the bullish market sentiment (likely born from expectations of quantitative easing), the market understands the end game.
More Sovereigen Debt More Inflation
In his latest investment outlook, Pimco co-CEO Bill Gross said we're entering a "paranormal" state in the markets, where participants will be more worried about "return of capital" than "return on capital."
Gross is concerned about "zero-bound" interest rates and newly found credit risk in sovereign debt. These days, investors are worried about the credit quality of nations where previously, the only risk was the direction of interest rates. Gross believes these two factors will potentially lead to massive de-levering. He also admits the possibility of massive inflation, should the market continue accepting more sovereign credit. The result will be painful with either outcome.