Saturday, January 29, 2011

Casey Research: What the Australian floods could do to coal prices

By Marin Katusa, Casey’s Energy Report:

The most important metallurgical coal basin in the world is underwater. Open pits have become lakes, stockpiles are soaked, and rail lines are submerged... and, in places, destroyed. Damage is estimated at $5 to $6 billion.

Australia accounts for almost two-thirds of global coking coal production. Much of it comes from Queensland, where an area the size of France and Germany combined is underwater. That includes the Bowen Basin coal region, which produces almost a third of the world's coking coal. The Bowen Basin was hit with 350 mm of rain in December, against an average of 102 mm.

Floods are now receding from the Bowen, giving some miners an opportunity to ship from existing stockpiles. Other mines are still inaccessible, and several rail lines are still submerged or damaged. And since open pits are still flooded and will take weeks to drain, shipping from stockpiles only postpones the inevitable: a reduction in met coal supply. Analysts think a recovery to pre-flood coal production levels will take at least three months.

At least six major global coal miners have declared force majeure, which means they can miss contractual shipments because of circumstances out of their control. The list includes Anglo American, Aquila Resources, BHP Billiton, Macarthur Coal, Rio Tinto, Vale, and Xstrata. Mines responsible for between 100 and 140 million tons of annual coking coal production are now under force majeure, representing as much as 40% of global supply.

And it's probably not over yet. Australia's Bureau of Meteorology predicts both eastern New South Wales and southeastern Queensland have a 60% to 70% chance of receiving higher-than-average rainfalls between January and March 2011.

What does it mean for coal prices and coal equities?

Read full article...

More on coal:

The easiest way to profit from skyrocketing coal prices

Why the breathtaking rally in coal could be going much, much higher

China will soon be the world's largest importer of this essential energy commodity


View the original article here

The top five ways to file your taxes for free

From Money Crashers:

If you’re getting ready to send this year’s income taxes to Uncle Sam, you can avoid spending extra money on tax preparation by using the resources listed in this article.
There’s no need to pay more than your fair share in taxes, and similarly, there’s no need to pay extra when preparing them either! Note that these services will only cover your federal taxes, so you’ll need to either complete your state forms using another method or pay a fee to do them alongside the federal taxes.
If your taxes are simple, be sure to take advantage of these…
Read full article...
More on taxes:
The world's best place to file taxes
MUST read piece on the White House's huge tax lie
Crux Classic: This tax fact should make your blood boil
View the original article here

Wednesday, January 26, 2011

Six big signs the market could plunge soon

From Gold Scents:
Warning signs are starting to build. To start we have a Dow Theory non-confirmation. Usually this is a sign of distribution.

Breadth is diverging. This often happens at intermediate tops.

Emerging markets have failed to make new highs.

China, the driver of global growth appears to be in a bear market.
 
Read full article (with charts)...

More on stocks:
This rare divergence could mean big trouble for stocks
Why this is a great time to buy "insurance" on your stocks
Top market-timer DeMark: A BIG stock market decline is about to begin
View the original article here

Saturday, January 22, 2011

Why this "forgotten" green energy could take off soon

From Marin Katusa, Chief Energy Strategist, Casey Research:
The Canadian Geothermal Energy Association (CanGEA) is a pretty active group. It regularly hosts networking and news events for its members, who range from scientists to industry reps. One meeting that grabbed our eye took us to Toronto in October, ready to sniff around the Geothermal Investment Forum.
CanGEA members worldwide operate approximately 20% of global geothermal capacity and have a reported 3,377 MW in reserves and resources. So when these fellows convene, the formal presentations and hallway exchanges offer some significant insight and even a competitive edge for investing in this sector.
To begin, geothermal is still the forgotten renewable and, compared with fossil fuels, has...
Read full article...
More on green energy:
This green energy is set to soar next year
China is leading the alternative energy revolution
This green energy has the potential to power the entire world
View the original article here

Tuesday, January 18, 2011

A group of stocks you should sell immediately

From Newsmax:

Orange juice isn't the only thing at your supermarket that's been squeezed.
Rising food prices mean grocery store chains must absorb extra costs on items like meat, seafood, and produce, or they try to pass them along to customers. But many of those consumers are unemployed or have less money to spend, even on essentials. For now, the big chains are mostly choosing to absorb. As a result, profits are falling, and so are their stocks, making them one of the few dim lights in the market in 2011.
On Tuesday, Supervalu was the first of the grocers to report quarterly results, and the numbers for its fiscal third quarter were ominous: a loss of $202 million, or 95 cents a share, compared with a profit of $109 million, or 51 cents, in the same period a year earlier. The company, which operates Albertsons, Jewel-Osco, Acme, and other chains, also cut its forecast for the year.
"This is going to be a challenging year going forward to manage inflation," Supervalu CEO Craig Herkert told analysts Tuesday. "It's just a fact and we believe these inflationary measures are going to...
Read full article...
More on agflation:
Inflation grabs a hold of food prices...
A "perfect storm" is setting up in these essential commodities
Porter Stansberry: Food crisis looming... prices set to skyrocket...
View the original article here

Friday, January 14, 2011

Forget oil... this is the future of energy investing in the Middle East

From Marin Katusa, Casey’s Energy Report:
As the conventional and cheap oil and gas start to dry up in the Middle East… a bigger, even better opportunity seeks to replace it.
For many who aren't familiar with the region, the Middle East comes across as an updated version of Lawrence's Arabia, only with lots of oil. But this mosaic of cultures isn't made up of only Arabs or Muslims, and most Middle East countries are neither awash with heavily armed, rather excitable citizenry… nor with black gold, which is what we're interested in. Twenty-three countries comprise the Arab League, but only Saudi Arabia, Iraq, Kuwait, the United Arab Emirates (UAE), and Iran are major oil producers.
No matter... With the exception of Kurdistan in northern Iraq, none of the oil heavies are currently open to U.S. investors anyway. We're digging for other finds, with three basic criteria. We're looking for countries in the Middle East that...
Read full article...
More on energy:
Oil soars dangerously close to $100
Marc Faber: The three commodity investments you must buy now
New BP leak in Alaska could disrupt more than 15% of U.S. oil production
View the original article here

Thursday, January 13, 2011

When this alarm goes off, it's time to get out of stocks

From Jeff Clark in Growth Stock Wire:

Periods of low volatility in the stock market are always followed by periods of high volatility. Always.
It's as certain as spring following winter.
Of course, when you're suffering through temperatures that would make an Eskimo shiver, it's hard to remember spring is on its way. And when stocks are a one-way bet, when the market moves higher day after day in unending bullishness, it's hard to imagine it moving in the other direction.
But it always does. You can bet on it.
By the look of the Volatility Index (VIX), the market may be about to change temperature...
Read full article ...
More on stocks:
You're taking a big risk buying stocks today
This chart says the bear market will return in 2011


If you're thinking of buying stocks today, read this first
View the original article here

Monday, January 10, 2011

Top analyst Rosenberg reveals an amazing fact about the stock market

From David Rosenberg, Chief Economist & Strategist, Gluskin Sheff:
One has to really wonder about a stock market (talking about the S&P 500 here) in which 134 points of the 143 points that were racked up in 2010 occurred in the first trading day of each month (see The Trader on page M3 of Barron’s). That is truly remarkable - 94% of the entire year boiled down to 12 sessions. And what do you know? 2011 started with a 1.1% pop and has sputtered since.
It is truly the nuttiest thing - the best days last year were the first day of each month (save for June and July) and then after that there were practically no crumbs to nibble on: These are the point changes for the first trading day of each month in 2010, which totals 134 points (as we mentioned above): December +26 points; November +1 point; October + 5 points; September +31 points; August +24 points; July –3 points; June -19 points; May +16 points; April + 9 points; March +11 points; February +15 points; and January +18 points.
Now look at 2011 - +14 points to kick off the month and year, to close at 1,271.87, and here we are today, after a supposedly ripping ISM and ADP set of numbers, and as of January 7, the S&P 500 is sitting at 1,271.50. Hope you didn’t decide to get in on the second day.
As for bond yields, the nice backup in December, as was the case a year earlier, has set us up again for a 2011 of decent returns. After a bit of a struggle at the onset, we have the yields across the U.S. Treasury curve out to the 5-year maturity (very nice 10 basis points rally there on Friday too), lower now than they were at the end of 2010. The 10-year note yield has also rallied nicely after the opening day selloff. Ignore the masses and stay the course. Bonds still offer decent value with the long Treasury yield now nearly 270 basis points above the S&P 500 dividend yield (you won’t hear that discussed much on Wall Street since broker commissions are driven by stocks, not bonds).
Crux Note: To learn more about David Rosenberg and Gluskin Sheff, click here.
More from David Rosenberg:
Top analyst Rosenberg: "Buy bonds now!"
Top analyst Rosenberg: 10 big reasons to worry
David Rosenberg just wrote the most important thing you'll read this week
View the original article here

Thursday, January 6, 2011

Warren Buffett is making a big bet on higher interest rates

Warren Buffett's Berkshire Hathaway Inc. sold $1.5 billion of mostly fixed-rate debt to retire floating-rate notes at a time when government bond yields are rising and the U.S. is showing signs of economic improvement.
A unit of Buffett's Omaha, Nebraska-based holding company issued $750 million of 4.25%, 10-year notes yesterday priced to yield 95 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. It also sold $375 million of 3-year, 1.5% notes and the same amount of floating-rate debt yielding 33 basis points more than the 3-month London interbank offered rate, the data show.
"The market scrutinizes Buffett's moves very closely and this would indicate he's thinking interest rates in the longer term may go up," Vijay Chander, Hong Kong-based head of credit strategy at Standard Chartered Plc, said in a phone interview. "That's consistent with our house view that the U.S. economy is improving."
The world's most successful investor locked in interest payments on most of the debt as a report showed U.S. manufacturing expanded in December at the fastest pace in seven months, spurring confidence the world's biggest economy is gaining momentum. Former Federal Reserve Governor Frederic Mishkin said yesterday that while the central bank will complete its $600 billion bond-purchase program, a third round of so- called quantitative easing to spur growth is unlikely.
Treasury Yields
The yield on the benchmark 10-year Treasury note was at 3.35% today after falling to as low as 2.33 in October, according to data compiled by Bloomberg. It will advance to 3.53% by year-end, according to a Bloomberg survey of 66 banks and securities companies, with the most recent forecasts given the heaviest weightings.
Berkshire issued the debt through its Berkshire Hathaway Finance Corp. unit and plans to use the proceeds to repay floating-rate notes maturing this year, it said in a regulatory filing yesterday. It has $1.5 billion due on Jan. 11, Bloomberg data show. Buffett didn't immediately respond to a request for comment e-mailed to his assistant, Carrie Kizer, outside normal business hours in the U.S.
Berkshire guarantees all of Berkshire Hathaway Finance's debt, Moody's Investors Service said in a statement yesterday.
The company, whose holdings range from Burlington Northern Santa Fe Corp. to General Re Corp. and Fruit of the Loom Ltd., last sold public debt in December when it issued $500 million of 2.45%, five-year notes at a spread of 85 basis points, or 0.85 percentage point, according to data compiled by Bloomberg.
Floating Versus Fixed
In the floating-rate portion of the new debt Berkshire is paying 10 basis points less than in its last benchmark sale of similar-tenor securities. The company sold $2 billion of one- year securities, $1.1 billion of two-year notes and $1.2 billion of three-year debt in February, the data show. The 2013 notes, which priced at a spread of 43 basis points more than three- month Libor, traded at 100.55 cents on the dollar yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
When Buffett announced the $26 billion acquisition of Burlington Northern Santa Fe in November 2009, he described the railroad company as an "all-in wager" on the U.S. economy.
"Management believes that the credit crisis has abated and as a result, interest rates for investment grade issuers relative to government obligations have declined," Berkshire Hathaway said Nov. 5 in a filing with the Securities and Exchange Commission.
Stock Rally
Yesterday the Standard & Poor's 500 Index rallied to its highest close since Sept. 3, 2008 after the Institute for Supply Management said its manufacturing index climbed to 57 last month from 56.6 in November. Increased spending by American consumers and business investment is helping drive production gains at factories that make up about 11% of the U.S. economy.
Investors demand 166 basis points of extra yield to hold U.S. corporate debt instead of government securities, according to Bank of America Merrill Lynch's U.S. Corporate Master Index.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. managed yesterday's bond sale, Berkshire said in its regulatory filing.
View the original article here

Wednesday, January 5, 2011

These stocks could see big dividend increases this year

From Dividends Value:
In this space we normally look at companies that have recently raised their dividends. However, as the year draws to a close there were very few companies of note increasing their dividends this week.
With that, I thought it would be interesting to see who were the big dividend-raisers in 2010 and what we might see in 2011.
Here are 10 companies for your consideration:
Abbott Laboratories (ABT) in April 2010 raised its dividend 10% to $0.44/share from $0.40/share. In April 2009 it raised its dividend 11%. ABT has increased its dividend for 38 consecutive years and I expect them to...
Read full article...
More on dividends:
These stocks are an income investor's dream
Introducing the world's top dividend stocks for 2011
The No. 1 "secret" for compounding your wealth with dividends
View the original article here