Hot Coal Stock Review – James River Coal Acquisition News sends Shares Surging

James River Coal Company (Nasdaq: JRCC) has signed a definitive agreement to purchase International Resource Partners LP and Logan & Kanawha Coal Company and their affiliated companies for $475 million in an all-cash transaction. International Resource Partners is a metallurgical and steam coal business formed by Lightfoot Capital Partners. Atlas and its partners formed Lightfoot in 2007 to acquire investments in energy-related assets and businesses, and Lightfoot also is the general partner and largest limited partner of IRP. Atlas owns 18% of the general partner of Lightfoot. Lightfoot will continue to operate its existing assets and will pursue further opportunities to expand its business.

The company also reported strong fourth-quarter results as compared to comparable period previous year, due to improved coal market and economy.

The company reported fourth-quarter net income of $25.9 million, or $0.93 per share, which included an income tax benefit of $0.79 per share. The fourth-quarter results include an income tax benefit related to the reversal of the deferred income tax valuation allowance of $22.1 million, or $0.79 per fully diluted share and a $0.80 per fully diluted share for the year.� The company reported net income of $78.2 million or $2.82 per fully diluted share for the full year 2010. This is compared to net income of $51.0 million or $1.85 per fully diluted share for the year ended December 31, 2009, and net loss of $3.2 million or $0.12 per fully diluted share for the fourth quarter of 2009.

The capital expenditures for the fourth quarter were $35.7 million and $95.4 million for the year.� The capital expenditures for the fourth quarter included approximately $15.5 million for growth projects and compliance with MSHA safety mandates.

James River Coal stock is currently trading at $23.27, up 14.81% from its previous close. James River Coal shares touched the high of $23.50 and lowest price in today�s session is $22.26. The company stock�s beta is 1.46.

The company stock traded in the range of $14.44 and $27.06 during the past 52 weeks. The company�s market cap is $651.51 million.

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Top Stocks For 2011-12-4-20

 

QUEBEC CITY, Nov. 23, 2011 (CRWENEWSWIRE) - Aeterna Zentaris Inc. (NASDAQ:AEZS) (TSX:AEZ) and Hikma Pharmaceuticals PLC (LSE:HIK.L) (NASDAQ Dubai:HIK) announced today the signing of an exclusive commercialization and licensing agreement for the registration and marketing of perifosine, Aeterna Zentaris’ lead anti-cancer compound, for the MENA ( Middle East and North Africa ) region. Perifosine, a novel oral Akt inhibitor, is currently in two Phase 3 programs for the treatment of colorectal cancer and multiple myeloma in the United States and Europe.

Under the terms of the agreement, Aeterna Zentaris is entitled to receive an upfront payment and additional payments upon achieving certain pre-established milestones in the aggregate of $2 million. Furthermore, Aeterna Zentaris will be supplying perifosine to Hikma Pharmaceuticals on a cost-plus-basis and is entitled to receive double-digit royalties on future net sales of perifosine in the MENA region. Hikma Pharmaceuticals will be responsible for the registration and commercialization of perifosine in the MENA territory.

Juergen Engel, Ph.D., President and CEO of Aeterna Zentaris, stated, “Hikma Pharmaceuticals has a proven track record in oncology and is a leading drug company in the Middle East and North Africa region, which is why we believe it is a perfect fit for the development and commercialization of perifosine in that part of the world. Our partnership network for perifosine now encompasses North America, Japan, Korea and the MENA region, while we still retain all rights for the rest of the world. We look forward to the Phase 3 results in colorectal cancer during the first quarter of 2012, as we continue our quest of bringing perifosine to the market worldwide for the benefit of both patients and shareholders.”

Mr. Mazen Darwazah, Vice Chairman of Hikma Pharmaceuticals, commented, “Hikma is committed to improving the treatment of cancer in the MENA region through the development of its oncology product portfolio. This partnership gives Hikma access to a novel, oral anticancer treatment with excellent potential and reinforces Hikma’s commitment to developing its product portfolio through strong partnerships. We look forward to the Phase 3 results in colorectal cancer in 2012 and are excited to work with Aeterna Zentaris to bring this critically needed therapy.”

About Perifosine

Perifosine is a novel, oral anticancer treatment that inhibits Akt activation in the phosphoinositide 3-kinase (PI3K) pathway. The product works by interfering with membranes of cancer cells thereby inhibiting Akt signaling which then affects cell death, growth, differentiation and survival. Perifosine, in combination with chemotherapeutic agents, is currently being studied for the treatment of colorectal cancer, multiple myeloma and other cancers, and is the most advanced anticancer agent of its class. Perifosine, as monotherapy, is being explored in other indications. The FDA has granted perifosine orphan-drug designation in multiple myeloma and neuroblastoma, and Fast Track designations in both multiple myeloma and refractory advanced colorectal cancer. Additionally, an agreement was reached with the FDA to conduct the Phase 3 trials in both of these indications under a Special Protocol Assessment. Perifosine has also been granted orphan medicinal product designation from the European Medicines Agency (EMA) in multiple myeloma. Furthermore, perifosine has received positive Scientific Advice from the EMA for both the multiple myeloma and advanced colorectal cancer programs, with ongoing Phase 3 trials for these indications expected to be sufficient for registration in Europe. Perifosine rights have been licensed to Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX) for North America, to Yakult Honsha for Japan and to Handok for Korea.

About Hikma Pharmaceuticals

Hikma Pharmaceuticals is a fast growing multinational group focused on developing, manufacturing and marketing a broad range of both branded and non branded generic and in-licensed products. Hikma’s operations are conducted through three businesses: “Branded”, “Injectables” and “Generics” based principally in the Middle East and North Africa (MENA) region where it is a market leader, the United States and Europe. In 2010, Hikma achieved revenues of $731 million and profit attributable to shareholders of $99 million. As of December 2010, Hikma had 5,396 employees. For more information, please visit www.hikma.com.

About Aeterna Zentaris Inc.

Aeterna Zentaris is a late-stage oncology drug development company currently investigating potential treatments for various cancers including colorectal, multiple myeloma, endometrial, ovarian, prostate and bladder cancer. The Company’s innovative approach of “personalized medicine” means tailoring treatments to a patient’s specific condition and to unmet medical needs. Aeterna Zentaris’ deep pipeline is drawn from its proprietary discovery unit providing the Company with constant and long-term access to state-of-the-art therapeutic options. For more information please visit www.aezsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that could cause the Company’s actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the risk that safety and efficacy data from any of our Phase 3 trials may not coincide with the data analyses from previously reported Phase 1 and/or Phase 2 clinical trials, the ability of the Company to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. Investors should consult the Company’s quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The Company does not undertake to update these forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, unless required to do so by a governmental authority or by applicable law.

Source: Aeterna Zentaris Inc.

 

 

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

Sony: Morgan Stanley Cuts to Hold; Will They Exit TVs?

Morgan Stanley’s Masahiro Ono today cut his rating on the ordinary shares of Sony (6758JP) to Equal Weight from Overweight, and cut his price target to �1,200 from �1,800, arguing that while the shares are cheap, assigning almost no value to the electronics business, nevertheless there is a lack of catalysts and too much uncertainty about what kind of restructuring may be in store.

In particular, Ono speculates Sony could end up leaving the television business, which is likely to keep losing as much as $628 million annually through 2015.

Ono reflects on the company’s strategy meeting�on April 12th, when CEO Kazuo Hirai and his team admitted the company needed to deal with eight years of continual losses in the TV set business. (See this slide in the deck of slides prepared for the meeting.) The response to that meeting was generally downcast among Sony analysts.

The main issue that concerns Ono today is the what he considers an unrealistic forecast for fiscal 2015, which ends in March of that year.

Of the �8.5 trillion sales target for F3/15, the firm aims to secure �6 trillion from electronics, with the three focus business areas furnishing a total of �4.3 trillion of this � digital imaging �1.5 trillion, gaming �1.0 trillion and mobile �1.8 trillion. Out of a total operating profit target of �425 billion-plus, Sony looks to electronics for �300 billion, including �225 billion from the focus areas, and an operating profit margin of approx. 6% [�] Gaps between our and company forecasts for F3/15 run to �1.5 trillion for sales and some �165 billion for operating profit. Our sales forecast is thus far below Sony�s mid-term target, but if fixed cost cuts in TV business go according to plan, we would be looking for an overall (company-wide) operating profit margin of 3.7%. Our forecasts assume that TV business continues to carry losses of �50 billion in F3/15, though this would still be a major reduction compared with F3/12.

Ono figures one that Sony’s ordinary shares are already pricing in a one-time charge to write-off the TV business, somewhat anticipating such a move:

Sony�s market cap excluding SFH is �724 billion. Given ex-SFH shareholders� equity of �1,600 billion, this implies that the market is pricing in equity erosion of �876 billion (�1,600bn – �724bn). In our view, this �876 billion seems a reasonable approximation of the restructuring costs required to exit TV operations.

As for the rest of Sony, Ono was unimpressed with the formal unveiling this week of the company’s “PlayStation Vita” mobile game machine at the E3 video game conference. And he sees the stock currently reflecting no value for the electronics business and the video game business given the continued competition from Samsung Electronics (005930KS) and from Apple (AAPL):

If financial and entertainment segments are valued at average multiples for the industry, electronics (CPS) and games (NPS) segments are being valued at almost zero.�The stock market�s main concerns for the consumer electronics industry are (1) that the digital AV equipment market focused on TVs is already ex-growth, (2) although the mobile equipment market will grow, an era of twin dominance by Apple and Samsung is underway, leaving little prospect for Japanese firms to prosper if they choose to compete, and (3) companies that supply devices for Apple�s mobile equipment will be seen in a relatively more positive light.

Analysts have, of course, increasingly speculated that Apple could have a big impact on the television market if it decides to build its own TV set, as, for example, this note out Monday from Bernstein’s Mark Newman.

Sony’s ordinary shares today traded up by 2% to �1,072.00. Sony’s American Depository Shares (SNE) traded in New York are down 27 cents, or almost 2%, at $13.32.

8 Explosive Option Trades

With the brutal beating the market has taken lately, we bet you could use a little R&R � or an excuse to blow crap up. Good thing it’s Fourth of July weekend!

To help you celebrate (and cope), our OptionsZone experts have put together a list of rocket-fueled options trades designed to light up your portfolio.

The summer looks like it’s going to be a rough one for investors, but we can help you net some explosive profits before the summer heat wave is over.

#1 Toro Company Calls
By Sam Collins

The Fourth of July is a great time for a backyard barbeque, but before the family gathers, Dad will want his lawn looking its best. To get the job done like a pro, he’ll need his new Toro Company (NYSE: TTC) riding mower. Toro is the leading maker of both professional turf and residential yard and snow removal equipment.

S&P just raised its opinion on the stock to a “buy” from a “hold” with a 12-month target of $57. Technically, despite the general market sell-off, TTC is above its 200-day moving average and is oversold with a trading target of $55.

Buy the TTC Sept 50 Calls (TTC�� 100918C00050000) at $3 or lower with a target of $6.

#2 P.F. Chang’s China Bistro Puts
By Michael Shulman

The Fourth of July is about all-American food: hot dogs (originally called frankfurters, named after a German city), hamburgers, (named after another German city) and, of course, French fries. So, let’s look at another American staple: Chinese food and P.F. Chang’s China Bistro, Inc. (NASDAQ: PFCB).

The food at P.F. Chang’s is pretty darn good for a national chain, but it is significantly more expensive than local Chinese restaurants, and more expensive than many other casual dining restaurants. A recent ChangeWave Research survey tells me there is a fall-off in restaurant spending. PFCB is going to take an unexpected hit.

And when something is selling for more than 30 times projected earnings by my estimates, well, that tells me it’s time to look at put options on a $40 stock that’s worth about $20. If you agree, go for the furthest expiration out and wait for the economy to catch up with PFCB.

#3 Apple Calls
By Chris Johnson and Jon Lewis

What’s more all-American on July 4 than apple pie? How about the iPhone or iPod or iPad? Apple Inc. (NASDAQ: AAPL) is on fire right now with the recent success of the iPad (despite the quirky name) and the 4G iPhone. You have to love a company that has its followers camped out to be among the first to own the latest and greatest.

And now comes word that Apple is slated to release an iPhone for the Verizon Communications Inc. (NYSE: VZ) network early next year. OK, we’ve heard that before, but you know it’s going to happen, if not in January, then sometime down the road. And it will be huge. In the meantime, the company will just have to limp along on its monstrous 4G and iPad sales.

The other thing we like about Apple is that the recent pullback has provided an excellent entry point. After dropping nearly 10% from its June 1 high, the stock is putting in another higher low, meaning that it’s looking ready to make a run at another all-time high, this time above the $300 mark.

To give the stock plenty of time, play the AAPL Aug 280 Calls (AAPL� 100821C00280000). It’s a cheap way to take a bite out of Apple’s strength for most of the summer.

#4 Sprint Nextel Calls
By Sam Collins

To contact the extended family for the big weekend get-together, Mom will probably call them on her Nextel phone through Sprint Nextel Corporation’s (NYSE: S) wide-ranging system.

Despite the heavy selling in the broad market, Sprint broke from a triple-top on very heavy volume, but has pulled back to under $4.25. My trading target is $6, but it could run to $10 by year-end. S&P rates the stock a “four-star buy” and recently increased its 12-month target to $6 from $5.

Buy the S Nov 4 Calls (S���� 101120C00004000) around 80 cents with a target of $2.

#5 Pfizer Puts
By Michael Shulman

Americans love to eat, and this pig-out holiday may just set your cholesterol level over the edge.

The best-selling drug on the market is Pfizer Inc.’s (NYSE: PFE) cholesterol drug Lipitor. Lipitor’s patent expires in November, and within 12 months, Pfizer’s profits will expire with it. The company continues to develop drugs that fail in trial, and it has nothing in its pipeline to replace the $8 billion-$10 billion in sales that will be lost. Plus, the stock’s chart is one only a short seller could love

Look at January 2012 LEAPS. The puts are liquid and reasonably priced. The stock is not worth more than $8 and is selling around $14.50. For purposes of full disclosure, I eat bad food on the Fourth of July, and I also take Lipitor.

Get 7 Tips for Trading LEAPS.

#6 The Boston Beer Company Calls
By Chris Johnson and Jon Lewis

Historically, there are a few groups of stocks that are more recession-proof than others, and alcoholic beverage companies are typically among them. The upcoming Fourth of July holiday makes it easy to talk about one of these companies that we like: The Boston Beer Company, Inc. (NYSE: SAM), producer of Sam Adams beer (named after the Founding Father himself).

The stock has been pressing to new highs, recently breaking above the $70 mark. Despite the incredible relative strength against the market, only half of the analysts covering the stock have it ranked as a “buy.”

Given the fundamental strength and the company’s categorization as a recession-resilient (nothing is recession proof) stock, we like the chances that the analyst community will upgrade this stock over the second half of 2010. Buy the SAM Sept 70 Calls (SAM�� 100918C00070000) as a good way to leverage SAM’s move higher.

#7 Toyota Motors Puts
By Chris Johnson and Jon Lewis

This market has been begging for puts as we’ve seen the May rally get zapped by June selling, but we want to keep a positive “American” spin for the Fourth of July recommendations, so how’s this �

The American auto producers have been on the rebound as they are getting back to making automobiles that our consumers are looking for, including hybrid and electric vehicles. Meanwhile, Toyota Motor Corporation (NYSE: TM) and Honda Motor Co., Ltd. (NYSE: HMC) have had their fair share of issues.

With the auto wars favoring the likes of GM and Ford Motor Company (NYSE: F) for now, we like the prospects for Toyota to continue its struggles as the American automakers continue to apply pressure.

Use the TM Aug 70 Puts (TM ���100821P00070000) to provide you with some profit potential as TM moves lower. This position will also provide a hedge against the market’s weakness, as TM has been a relative strength laggard lately.

Learn 7 Ways to Tell a Stock is Headed Down.

#8 Harley-Davidson Puts
By Michael Shulman

The Fourth of July is all about iconic American images. And it doesn’t get much more American than Harley-Davidson, Inc. (NYSE: HOG). Unfortunately for this American institution, business is bad, and HOG’s balance sheet is worse. The company cannot find a partner for the huge load of loans they hold, and the stock is so wildly overpriced you have to wonder if the people on Wall Street all own motorcycles.

Over time, HOG is a great fundamental short. Look at put options out as far out as you can go. This $22 stock is barely worth five bucks.

Double Your Money as the Market Plunges
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Have Stocks Really Been Outperforming Bonds?

After Tuesday's Fed announcement, CNBC hosted a discussion that included Bill Gross, co-CIO of PIMCO, and David Kelly, Chief Market Strategist for J.P. Morgan Funds. As one might expect from the Chief Market Strategist of a major financial institution, David Kelly is bullish on equities, advising investors to be overweight stocks. He also advised being underweight fixed income.

Mr. Kelly is certainly entitled to his opinion, and I am sure there are many strong counterarguments to his point of view. Rather than commencing a bull versus bear debate with this article, I would instead like to focus on Mr. Kelly's claim that "being overweight equities relative to fixed income has worked over the last two years" and that he thinks "it will work going forward." While we could certainly debate whether past performance has any role in determining future returns, I would like to focus on what I believe Mr. Kelly's underlying message was: stocks outperformed bonds over the past two years.

To make things more relevant to investors, for the purposes of this article, I would like to focus on returns using ETFs, investment products that investors actually purchase, as opposed to indices such as the S&P 500, or even individual bonds, which aren't as widely purchased by individual investors. When quoting returns including distributions, I assume a cash payout rather than reinvestment of the distribution.

Over the past two years, the popular ETF for the S&P 500, SPY, is up 21.28% excluding distributions. Including distributions, SPY is up 25.47% during that time.

An ETF measuring the performance of the high-yield corporate bond market, HYG, is up just 3.70% in two years, excluding distributions. However, when including its monthly payouts, the two year performance goes to 19.48%.

In terms of the investment grade corporate bond market, LQD is an ETF widely used by investors. Over the past two years, this ETF is up 9.56% excluding distributions. When factoring in its monthly distributions, LQD's two year return rises to 19.16%.

Finally, TLT, an ETF that holds Treasury bonds with more than 20 years to maturity, is up 26.06% over the past two years, excluding distributions. When including its monthly distributions, TLT's return is 34.76% in two years.

As you can see, among SPY, HYG, LQD, and TLT, the winner is the investment the majority of pundits love to hate, Treasury bonds. As Bill Gross noted during his aforementioned CNBC interview, central banks are the place "where bad bonds go to die." This may be true, but thanks to various Fed operations, those bad bonds have outperformed what is perhaps the most popular equities index, the S&P 500, over the past couple years.

A favorite saying among equity investors is "Don't fight the Fed." Perhaps investors who favor long-term short positions in Treasuries, outside of the typical seasonal declines (like we are experiencing now), should also keep this mantra in mind.

I recognize that, depending on how a portfolio is allocated, an investor might be able to claim that equities, rather than fixed income, were indeed the place to be over the past two years. For instance, with price appreciation alone, the Nasdaq 100's popular ETF, QQQ, has outperformed all the previously mentioned ETFs. Furthermore, there are most likely many individual stocks and individual bonds that have outperformed major equity and fixed income indices over the past two years.

Moreover, since diversification is widely preached by the investment community, one cannot fairly claim equities in general were a better investment than fixed income without also looking at broad international equity indices. Two exchange-traded funds, EFA and EEM, represent the MSCI EAFE Index and the MSCI Emerging Markets Index. EAFE stands for Europe, Australasia, and the Far East and includes countries such as Japan, France, and Germany. The Emerging Markets Index includes countries such as China, Brazil, and India.

Over the past two years, EFA has returned a negative 0.31% excluding distributions and just 5.31% including distributions. EEM has returned 8.33% excluding distributions and 11.87% including distributions. Clearly, an equity portfolio focused on these international equity indices, or even with just a modest weighting in these indices, would not have outperformed many fixed income portfolios over the past two years.

In closing, there are a few things worth mentioning in regard to stocks outperforming bonds:

First, past returns are not indicative of future returns. Investors can cherry pick all sorts of time frames in an attempt to make their case for being bullish or bearish appear more convincing. However, what matters most is how your portfolio will perform going forward.

At 1,395.95 on the S&P 500, are you convinced you will make more money investing in funds that track that index over whatever your time frame is than investing in high-yield debt, investment grade bonds, various commodities, international stocks, other U.S. equity indices, or even Treasuries? Also, don't assume your portfolio's allocation to equities will track a different portfolio with equities exposure. The same goes for fixed income, commodities, or any other asset you invest in. Blanket statements such as "equities outperformed fixed income" or "equities will outperform fixed income" should be taken with a grain of salt.

Second, focus on what's relative to you. In other words, when deciding whether to overweight or underweight one asset class or another, think about how your portfolio is allocated within that asset class. If your equity mix favors international equities, you need to think about how international equities will perform going forward. If your equity allocation is entirely in the Dow Jones Industrial Average (DIA), you will need to think through your expectations for future returns from recent price levels.

Third, in further expanding upon what's relative to you, keep in mind that timing matters. When thinking about the possibility of achieving the types of future returns often claimed by financial pundits (directly claimed and/or indirectly implied), don't forget to consider the manner in which you invest. For instance, do you invest your money on a set schedule, say, every two weeks (or on pay day) through a retirement portfolio? If so, given that equity markets generally spend more time going higher than going lower, you will likely be purchasing at ever-higher prices, thereby raising your cost basis over time.

Therefore, you can completely ignore the fact that the S&P 500, Dow Jones Industrial Average, and Nasdaq have more than doubled since their March 2009 bottoms. While it certainly makes for exciting headlines, it distracts from the actual situation many investors putting money into financial markets via 401ks find themselves in. Unless you invested all your equity allocation at the same point in time (and using the same allocation) chosen by pundits to make equities or any other asset class appear superior to a different financial asset, your returns will not be the same.

In fact, if the 401k investor spends some time working through the return on invested money over time rather than simply looking at balances being cushioned by new money continually flowing into the portfolio, that investor might be surprised by just how much he or she will have underperformed his or her expectations over time.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

An Opportunity Is Brewing for This Stock

The coffee industry is back in the news with David Einhorn, renowned short-seller, slamming Green Mountain Coffee Roasters (Nasdaq: GMCR  ) for expensive products and opaque accounting procedures. Following his opinion, which was shared in the seventh annual Value Investing Congress, Green Mountain stock fell around 11%. However, instead of signifying serious consequences for the company, this fall may just be the buying opportunity investors are looking for.

Hot products
Despite a questionable economic outlook, Green Mountain has been a strong player in the coffee industry. It acquired Keurig, a coffee machine manufacturing company, in 2006. With this acquisition, Green Mountain bought a strong product portfolio that consisted of coffeemakers and K-Cup machines that brewed single cups of hot beverages. Currently, K-Cups are Green Mountain's most popular offering, bringing in a major portion of its revenue. Einhorn, who is famous for predicting the fall of the now-defunct Lehman Brothers, among other things, said that in addition to discrepancies in Green Mountain's financial disclosures, its K-Cups were expensive product offerings, not justifying their cost.

However, I don't see the popularity of K-Cups going down anytime soon. For one, the Vermont-based company is quickly expanding into the retail segment and already has its K-Cup offerings in Wal-Mart (NYSE: WMT  ) and Target (NYSE: TGT  ) stores. In addition to this, the company is also planning to launch its brewers in the South, Midwest, and West Coast regions of the United States. This expansion into new territories coupled with robust demand could help the company remain a valuable investment option for the next few years.

Strong earnings
With the exception of the most recent quarter, Green Mountain has consistently outperformed analysts' expectations. The company's quarterly results topped market expectations for four of the last five quarters, with profit rising year over year by 44.7%. In the third-quarter results declared in July 2011, Green Mountain reported that its net income increased from $0.13 per diluted share last year to $0.37.

The flavor of partnerships
While past figures are impressive, Green Mountain's future growth prospects are even better. In addition to its product offerings in Wal-Mart and Target, the company is also planning a business partnership with Starbucks (Nasdaq: SBUX  ) . The popular American coffee maker announced its intention to increase its single-cup coffee sales with the introduction of K-Cups in its stores. This deal is a lucrative business opportunity for Green Mountain that is bound to take its stock northward in the coming few years. Strong product offerings combined with the company's expansion plans into unchartered territories mean that its growth will be even faster than it is currently.

In addition to this, the rising commodity prices that have affected competitors like Kraft Foods (NYSE: KFT  ) and Dunkin' Brands (Nasdaq: DNKN  ) have also enabled Green Mountain to capture a higher market share.

The Fool's line
Considering the popularity of its products, business deals, and partnerships, I think Green Mountain brings a newly fresh opportunity for investors. I wouldn't let the comments of a single analyst determine my outlook on the stock. If anything, I would take a fresh look at my investment options and give serious consideration to Green Mountain as a long-term bet now that they have fallen from their previously lofty multiples.

To stay updated on Green Mountain's rapid growth, click here to add it to your stock watchlist. It's free, personalized, and helps you keep up-to-date on the latest commentary and analysis.

Congress: Doomed From the Beginning

Winston Churchill's quip that "you can always count on Americans to do the right thing -- after they've tried everything else," seems especially relevant this week.

The congressional supercommittee tasked with cutting the budget deficit by $1.2 trillion over 10 years has failed. "After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement," the committee announced yesterday. �

Is this surprising? I don't think so. And not because of partisan quarrels -- although those certainly played a role -- but because of what Churchill hinted at: When it comes to fixing the budget, we haven't exhausted all of our options. It's still easy to keep doing the wrong things.

The reason any country needs to keep its deficits in check is that interest rates can rise if lenders question your ability to repay -- sometimes quickly and sharply, stifling the economy.

But that's not happening in the slightest today. While total debt and annual deficits are at all-time highs, interest rates are at all-time lows, and demand at weekly bond auctions has never been higher. The day after America lost its AAA credit rating this summer was one of the best days for Treasuries in history. The bond market is sending an unmistakable message to Washington: Keep the deficits coming; we have an insatiable appetite for every dollar of debt you can issue.

As long as that's the case, Congress will kick the can down the road and put off fixing the deficit. Why wouldn't they? It's analogous to asking people to stop guzzling gas when it costs only $1 a gallon -- rather than change, they'll laugh at you and buy another Hummer. You need urgency to drive change, and right now the bond market is anything but urgent. "Despite the overheated rhetoric in Washington, the markets are giving us plenty of space," Washington Post columnist Ezra Klein wrote yesterday. "So though deficits will eventually prove a problem, they're not our most pressing concern."

It hasn't always worked this way. Consider this 1992 quote from the Los Angeles Times: "There will be serious constraints on the policy options of the President of the United States in 1993 -- and it doesn't matter what his name is." Another news account summed up why after President Clinton won the election:

Bill Clinton's economic stimulus plan may have won a good reception from voters, but it faces a more difficult -- perhaps fatal -- test at the hands of a powerful counterforce: the bond market. If the president-elect moves to jump-start the economy by sharply increasing government spending, the bond market is likely to react negatively by jacking up yields and raising the cost of government borrowing.

Which is exactly what happened. In 1993, 10-year Treasury bonds yielded 5.3%. By 1994, the yield had surged to over 8%, in part likely due to worries that a continuation of the huge deficits of the previous decade would spark inflation. As Clinton advisor James Carville famously said, "I used to think if there was reincarnation, I wanted to come back as the president or the pope. But now I want to come back as the bond market. You can intimidate everybody."

He wasn't kidding. It was widely accepted at the time that the bond market dictated the direction of the economy. "More than any other group, the bond market's members determine how many Americans will have jobs, whether the jobholders will earn enough to afford a house or a car, or whether a factory might have to lay off workers," wrote The New York Times in 1994.

But the same bond investors who seemingly held the keys to the economy helped move public policy to a safer, more sustainable path. The basis of all economic policy in the mid- to late 1990s was that the economy would only boom once long-term interest rates came down, and the best way to bring them down was to balance the budget. It wasn't complicated: Spending had to be restrained, taxes had to be raised -- both parties compromised -- the bond market would be appeased, and economic growth would take off.

By most measures, it worked. By 1999, government spending as a percentage of GDP was at a 35-year low, taxes as a percentage of GDP were at a 50-year high, the budget was in surplus, long-term interest rates had declined, and the economy was booming. You can never chalk up the state of an economy to one specific thing, but the fiscal policies of the mid- to late 1990s -- dubbed Rubinomics after then Treasury Secretary Robert Rubin -- are by and large thought to have helped fuel that period's economic boom. And they may have never happened unless the bond market forced Washington to act through higher interest rates in the early 1990s.

Today, there's no heavy hand forcing, or even encouraging, Congress to act. In part because deleveraging has sparked fears of deflation, and in part because other parts of the world are in far worse shape than America, our interest rates have never been lower. The impact this has on the economy is massive. The interest cost on the national debt was lower in 2009 than it was in 1991, even though the amount of debt was more than twice as high. The percentage of small businesses claiming interest rates are their largest problem was recently 4%, near the lowest it's ever been, according to the National Federation of Independent Businesses. A 30-year mortgage now carries an interest rate of 4.07%, down from 6.5% in 2008. America has plenty of problems, but high interest rates aren't one of them. Yet.

Once interest rates do rise, the amount of debt accumulated during these years of generous bond markets comes home to roost. The average yield on Treasury debt this year is around 2%. With $10.3 trillion in public debt outstanding, every 1% rise in interest rates adds $103 billion a year to federal spending -- or about what we spend annually on education.

Moving to an average cost of debt closer to 6% (where it was in the early 1990s) would balloon federal spending by nearly half a trillion dollars a year, or roughly what we spend annually on Medicare. Deficit spending is almost certainly necessary to help the economy recover from recession, but the easier it is to accumulate cheap debt today, the more dangerous it becomes tomorrow. It's the classic giving-us-enough-rope-to-hang-ourselves-with situation.

What's the solution? I asked former U.S. Comptroller General David Walker. "Low interest rates provide a false sense of security and interest rates could change quickly in the future," he said. A heave in the bond market might inspire Washington to act, but why wait? Providing Congress with the right incentives is up to you, he says. "If 'We the People' put pressure on Congress to act and make the political price of doing nothing greater than the political price of making some tough choices today, [we can] help create a better tomorrow."

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

India Imposes New Rules on Property Developers

The Confederation of Real Estate Developers Associations of India (CREDAI) is imposing a new code of conduct on real estate developers in the hopes of instilling more transparency and accountability in the market. Experts at CREDAI say middle-class consumers are complaining that developers are taking advantage of them by demanding additional feels upon move-in, delaying taking possession of properties and failing to meet basic development standards. The agency is requiring its 8,000 members voluntarily sign the agreement as part of the self-governing system. The agency reported success in a pilot program after which the new code of conduct is modeled and has invested in advertising to spread awareness to consumers of their new rights. For more on this continue reading the following article from Property Wire.

A new code of conduct has been agreed by the Confederation of Real Estate Developers Associations of India (CREDAI) with the aim of resolving complaints about the house buying process.

The most common complaints are a delay in taking possession of a property, failure to meet commitments, additional money being demanded above the agreed price and ambiguities over sold areas.

‘The primary concern of the consumer is transparency and accountability. Many middle class customers carry the perception that the developers are not answerable and that the only recourse is litigation which is a long drawn and messy process,’ said Pankaj Bajaj, president of CREDAI for the National Capital Region.

CREDAI has over 8,000 members and it requires them to sign a Code of Conduct which is a self governing mechanism requiring them to adhere with prescribed levels of transparency with their customers.

Apart from committing to being transparent with the customers on area calculations, approvals status and specifications, the Code of Conduct requires the developer to declare what compensation will be paid if there are delays delivering a project.

According to Bajaj the aim is to differentiate good developers and fly by night operators in a sector which has been maligned for its opaqueness.

CREDAI has also launched a Consumer Grievance Redressal Forum where any member of the buying public can lodge a complaint against a CREDAI member.
 
‘We realized that self governance and peer pressure are powerful tools. We have been running a pilot project of this exercise and found that 90% of the complaints against developers got resolved due to the peer pressure from the CREDAI forum on the concerned developer,’ explained Bajaj.

The Forum has a panel of experienced developers and legal experts who decide on the complaint. Complaints can be lodged on the CREDAI website. There is also an advertising campaign to increase awareness of the code.

‘Hopefully, this programme will succeed in aligning the faith of the consumers with the intent of fair and transparent developers. We also hope that as a result of this, the market is going to start discounting non transparent developers where there is no redress forum for complaints,’ added Bajaj.

Germany Solar Feed-In-Tariff Cuts Underline Reasons To Stay Uninvested In Sector For Now

The first major piece of news since our recommendation to take profits on solar's powerful rally this year has turned out to be decisively negative - underlining the fact that investors with anything other than a very long-term buy and hold strategy would do well to stay on the sidelines for now and invest another day. The German government looks likely to announce that it is planning to cut subsidies for solar power installations by between 20% and 30%.

German Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler are set to hold a press conference on Thursday to outline the government's new approach on subsidies. However, the indications are that the cuts will be heavier than the market has been expecting:

• a 30% cut in the feed-in-tariff (FIT) to 13.5 cents per kilowatt hour for new large solar installations

• and a 20% cut in the FIT to 19.5 cents for new small plants

The market has of course been expecting cuts in the German FIT system. However, this news is decidedly worse than expected and likely to continue to pressure solar stocks - particularly those such as Yingli (YGE) with a significant exposure to German solar demand.

Earlier in the year it is probably fair to say that the market consensus was for a cut in FIT rates of around 10 to 20%. Since then there may have been increased worries that the outcome could be worse. However, the market has certainly not priced in a 20% to 30% outcome. This is bad news.

From a medium to long term perspective, solar is heading towards grid parity in a broad range of geographical areas by 2015 and the result will be significant volume growth for solar. Moreover, the extensive oversupply seen in 2011 will be significantly eroded by the second half of this year, providing for a much better environment for margins.

For these reasons, we saw great value in the deflated prices in the sector in late November of last year. At that time we recommended being long a basket of tier one Chinese solar - Suntech Power (STP), Trina Solar (TSL) and Yingli (YGE). You can read an article on our original recommendation here.

The long-term justification for that trade remains in place. However, we recommended taking profits on February 10th with STP up +82.5%, TSL up +67.4% and YGE up +54.9%. The extent of the move simply seemed too rapid given the short-term issues that still face the sector. For a fuller discussion see our original article here.

The story currently developing out of Germany is a timely reminder of the mixed short-term environment. Solar stocks may well have significant room to fall further before we will be ready to buy on the solid long-term story once again.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Euro weak ahead of French debt auction

FRANKFURT (MarketWatch) � The euro held its ground against the U.S. dollar on Monday, largely consolidating its position amid heightened fears of a Greek default and the impact of a decision by ratings firm Standard & Poor�s to downgrade nine euro-zone countries.

The euro EURUSD �traded at $1.2673 versus the dollar, compared with $1.2677 in late North American trade on Friday. Trade was light, with U.S. financial markets closed for Martin Luther King, Jr. Day.

The shared currency shifted between small gains and losses even as France saw strong demand for Treasury bills in its first test of debt markets since S&P took action Friday. In a widely anticipated move, the firm stripped France of its coveted triple-A rating, lowering it by a notch to double-A-plus. Read more: S&P downgrades anticipated, but still stir turmoil.

�Based on the price action of the [euro/dollar] this morning, Standard & Poor�s decision to slash the credit ratings of most euro-zone countries did not mean the end of the world for the euro. However, the big question is whether today�s muted reaction is caused by the lack of market participants or a real lack of concern about actions by rating agencies,� said Kathy Lien, director of currency research at GFT.

/quotes/zigman/4867933/sampled EURUSD 1.2303, +0.0030, +0.2458%

The ICE dollar index DXY , which measures the U.S. currency�s performance against a basket of six major global units, traded at 81.436, down slightly from 81.459.

�We think investors should be short the [euro] now and we are concerned that Friday�s mass downgrades of euro-zone countries by S&P is not fully priced yet, despite the euro falling to new 16-month lows around $1.2625,� Mansoor Mohi-uddin, head of foreign exchange strategy at UBS Macro Research, wrote in a report.

The euro dropped more than 1% against the U.S. dollar on Friday after S&P stripped France and Austria of their triple-A sovereign credit ratings, downgrading them by one notch to AA-plus. The ratings agency also cut ratings on Italy, Spain and Portugal by two notches. Read full story on the ratings actions.

Also influencing investor sentiment was news that talks between private creditors and Greece on a voluntary restructuring of government borrowings broke down on Friday. Read full story on the unsuccessful talks.

Click to Play S&P downgrades nine euro-zone nations

Countries react to the "Black Friday" announcement of nine credit rating downgrades in the euro zone by Standard & Poor's agency.

�The combination of Greek talks stalling, S&P�s actions and a U.S. holiday isn�t a recipe for a calm Monday,� said Kit Juckes, chief currency strategist at Societe Generale.

�But while I think a weaker euro is an inevitable consequence of this move � and indeed, I�m not sure [European Central Bank President Mario] Draghi sees that as a bad thing � I don�t think this means the single currency system is in more danger of collapse,� Juckes added.

The Japanese yen continued to strengthen against the euro, with the common currency EURJPY �changing hands at �97.17, compared to around �97.39 late in North America on Friday. The dollar USDJPY traded at �76.75, down from �76.90.

The sharp rally in the yen since Friday�s close in Tokyo prompted worries in Japan, where finance minister Jun Azumi on Monday described the yen�s gains against the euro as �a bit rapid.� Azumi, however, said he wasn�t so concerned about the impact on Japanese companies, since their fundamentals were sound, according to a Dow Jones Newswires report.

Among other major currencies, the British pound GBPUSD �changed hands for $1.5308 versus $1.5316.

Do-Not-Track Button

Daily Market Commentary for February 23, 2012

As the White House is due to hold an event on online privacy, Google, Microsoft and others have agreed to support a do-not-track button in most Web browsers. The do-not-track button will not stop Facebook from tracking members' use of the Like button.
(read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx

Labor Department reported Thursday that new applications for unemployment benefits were unchanged last week however, they remain at a level consistent with an improved U.S. jobs market. President Barack Obama signed a bill on that continues extended benefits until the end of the year. The Labor Department said initial claims were flat at a seasonally adjusted 351,000 with the level of claims used as a gauge of whether layoffs are rising or falling. Four-week average of claims fell by 7,000 to 359,000, striking the lowest level seen since March 2008. Monthly average provides a more accurate view of labor-market trends by reducing week-to-week gyrations caused by seasonal quirks. When applications for jobless benefits drop below 400,000, this indicates a general sign that hiring is generally as on the rise. New applications for jobless benefits have fallen under that mark in all but two weeks over the last four months. Monthly employment reports provide a clearer picture of who is hiring and who is not. The U.S. economy still is not adding jobs at a pace fast enough to repair most of the damage caused by the 2007-2009 recession. While unemployment rate has declined from a 2011 peak of 9.1%, it remains high at 8.3%. When including part-time employees who cannot find a full-time job as well as those who recently stopped looking for work, unemployment rate is even higher at a rate of 15%. The U.S. jobless rate would not return to pre-recession levels for at least several years, at the current rate of hiring. From 2001 to 2007, unemployment rate averaged 3.8% to 6.2%. Continuing claims decreased by 52,000 to a seasonally adjusted 3.39 million in the week ended February 11, per the Labor Department. Continuing claims, which are handled by states, typically last 26 weeks and are reported with a one-week lag. The number of people who received extended federal benefits fell by 68,966 to 3.41 million. The new extension reduces the maximum amount of time people can receive extra federal benefits to no more than 73 weeks, down from 99 under previous law. Nearly 7.50 million people received some type of state or federal benefit in week ended February 4, down 178,619 from previous week. Total claims are reported with a two-week lag and are not seasonally adjusted.

According to weekly survey from Freddie Mac conforming mortgage rates released Thursday, interest rates on 30-year fixed-rate mortgages climbed to an average 3.95% this week, up from 3.87% last week. A year ago in 2011, the average mortgage rate was 4.95%. For the week ending February 23, 15-year fixed-rate mortgage averaged 3.19% , up from 3.16% last week with the average mortgage rate a year ago at 4.22%. Adjustable-rate mortgages fell this week, with the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaging 2.8%, down from 2.82% last week and 3.8% a year ago in 2011. The 1-year Treasury-indexed ARM averaged 2.73%; down from 2.84% last week and 3.4% a year ago in 2011.

During Q4, auto lending continued to expand, as more loans were made to borrowers with shaky credit and payment rates improved. From year earlier levels of $658 billion, amount of outstanding auto loans rose 3.8%, or $23.9 billion. A portion of the expansion was driven by a deeper move into subprime loans, with new-vehicle loans to consumers with less-than-stellar credit increasing by 13.8% in the quarter. Auto lending continued to expand during Q4 as more loans were made to borrowers with shaky credit and payment rates improved. While the average credit score for borrowers receiving new and used loans fell six points and nine points respectively, payment performance improved during Q4. The rate of loans 30 days or more past due fell to 2.79% from 2.98% a year ago. Delinquencies on other types of loans, including credit cards and personal loans also improved since the start of the recession as borrowers have buckled down to pay off debt and cautiously taken on new debt.


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Friday’s biggest gaining and declining stocks

NEW YORK (MarketWatch) � Shares of the following companies were among those making notable moves in Friday�s U.S. stock market:

Advancers

Brooks Automation Inc. BRKS � shares gained 7.2% a day after the supplier of microchip-making equipment projected second-quarter earnings that topped expectations.

Cobalt International Energy Inc. CIE � shares rallied 31% after the company said test results from a well off the coast of Angola topped exploration estimates.

Click to Play Markets grow uneasy over Greece

Markets react Friday to the latest developments surrounding Greece's austerity package and prospects for a bailout package passing muster with European leaders. Photo: Reuters

CBOE Holdings Inc. CBOE � shares rose 5.3% a day after Standard & Poor�s said the U.S. options exchange would replace Temple-Inland Inc. � in the S&P�s MidCap 400 index on a date to be announced.

LinkedIn Corp. LNKD � shares climbed 18% a day after the professional-networking site reported better-than-expected fourth-quarter earnings and revenue.

Decliners

Amtech Systems Inc. ASYS � shares fell 19% a day after the solar-equipment supplier projected second-quarter sales that fell short of expectations.

Amyris Inc. AMRS � shares dropped 29% after the sustainable-energy company withdrew its 2012 outlook for production and cash flow and said it would sell as much as $60 million in stock.

Exide Technologies XIDE �shed 24% a day after the battery maker reported third-quarter earnings below Wall Street�s expectations.

First Solar Inc. FSLR � shares slipped 10% after the maker of solar panels warned a delay in government funding could stymie its sale of a solar farm in California. Read more.

GSV Capital Corp. GSVC � shares lost 21% after the investment firm priced its offering of 6 million shares at a sharp discount.

Leapfrog Enterprises Inc. LF � shares lost 5.3% after the maker of educational toys late Thursday reported margins declined in the fourth quarter.

Nuance Communications Inc. NUAN � shares retreated 13% after the software maker late Thursday reported first-quarter adjusted earnings and revenue below market expectations.

Overseas Shipholding Group Inc. OSG � shares slid 13% after the tanker operator suspended its quarterly dividend payment until further notice. Read more.

True Religion Apparel Inc. TRLG �shares slumped 27% after the clothing company late Thursday reported earnings short of expectations and offered a disappointing outlook for 2012.

XL Group PLC�s XL �U.S.-listed shares shed 7.9% a day after the insurer reported an unexpected fourth-quarter loss.

Are Our Favorite Stocks Still A Buy? Part 2

The following video is part of our "Motley Fool Conversations" series in which senior analyst Matt Argersinger and analyst Paul Chi discuss topics across the investing world.

In today's edition, Paul and Matt give their Streetfighter portfolio a six-month review. They've purchased six stocks so far for the portfolio: three energy names, a steelmaker, a beverage stock, and an emerging-market restaurant stock. Check out the video (part of a series) to get their take on the portfolio and where they see their stocks heading.

The financial heavies are getting a lot of press these days. And much of it is negative. But there's one small bank that's flying under the radar. It has some of the best operational numbers you'll ever see. The Motley Fool featured it in its brand-new free report: "The Stocks Only the Smartest Investors Are Buying." We invite you to download a free copy. To find out the name of the bank Buffett would probably be interested in if he could still invest in small banks, just click here.

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12 Companies Increasing Dividends Last Week

The dividend diva catwalk continued last week, as another batch of big-name companies upped payouts to shareholders. Perhaps the most well-known of last week�s corporate dividend stars was consumer products maker Clorox (NYSE: CLX). The maker of bleach, barbecue sauce and briquettes, among numerous other products, boosted its quarterly cash dividend by 9% to 60 cents per share from 55 cents. The newly washed dividend will paid on Aug. 12 to shareholders of record as of July 27. The increase marks the 34th year that the company has upped its payout.

Supermarket chain Safeway (NYSE: SWY) stocks many of the products made by Clorox, and last week, the company stocked the shelves of shareholders� portfolios by increasing its quarter dividend by 21%. The new payout will be 14.5 cents per share �versus the current 12 cents. The new dividend is payable on July 14 to shareholders of record on June 23.

Luxury goods retailer Tiffany & Co. (NYSE: TIF) is famous for the contents of its little robin�s egg blue boxes, and last week, the company let shareholders unwrap a little box filled with a shiny new payout pendant. Tiffany raised its quarterly dividend by 16% to 29 cents per share from 25 cents. The jewelry maker said its gift would be granted on July 11 to shareholders of record on June 20. The new dividend represents the ninth dividend increase in the past nine years.

Of course, bleach, groceries and jewelry aren�t the only items generating big dividends. Here are nine more companies boosting dividend payouts last week.

ACE Ltd. (NYSE: ACE): The global insurance and reinsurance issuer took steps last week to ensure its shareholders were covered. The company upped its quarterly payout by 6.1% to 35 cents per share from 33 cents. The new dividend is payable July 21 to shareholders of record on June 30.

Analog Devices (NYSE: ADI): The semiconductor chip maker put more chips in shareholders pots, raising its quarterly dividend 14% to 25 cents per share from 22 cents. The increased ante will be paid on June 15 to shareholders of record at the close of business on May 27. The increased payouts came along with the announcement of a 9% jump in Q1 revenue, and earnings per share that easily bested consensus estimates.

Corn Products International (NYSE: CPO): The maker of such healthy fare as high fructose corn syrup gave its shareholders a sugar high last week, spiking its dividend by just over 14%. The new quarterly payout of 16 cents per share from 14 cents will be made on July 25 to shareholders of record on June 30.

Dr. Pepper Snapple Group (NYSE: DPS): The beverage maker put a bit more pep in shareholders� cups, declaring a new quarterly dividend of 32 cents per share. The new payout puts 28% more fizz over the previous pour. The increased dividend is payable on July 8 to shareholders of record on June 20.

Keycorp (NYSE: KEY): The bank-based financial services firm serviced shareholders� pocketbooks last week, upping its quarterly payout to 3 cents per share. The new dividend is payable June 15 to shareholders of record on May 31.

Scripps Network Interactive (NYSE: SNI): The owner of TV channels the Food Network and HGTV cooked up an improved payout of 33%, raising its quarterly dividend to 10 cents per share from 7.5 cents. The new payout will be broadcast on June 10 to shareholders of record May 31.

Western Union (NYSE: WU): The company wired a telegram to shareholders announcing a 14% increase in its quarterly dividend. The new payout of 8 cents per share versus the current 7 cents will be paid on June 30 to shareholders of record on June 17.

WR Berkley Corporation (NYSE: WRB): The insurance holding company decided not to hold on to its cash, as it increased its quarterly payout by 14%. The new dividend of 8 cents per share will be paid on July 1 to shareholders of record on June 14.

Xcel Energy (NYSE: XEL): The electricity and natural gas company powered up its quarterly dividend to shareholders, energizing its payout to 26 cents per share from 25.25 cents. The new dividend is payable July 20 to shareholders of record on June 23.

At the time of publication, Jim Woods held no positions in any of the stocks mentioned in this article.

Has Wall Street Escaped Job Losses?

Mike Mandel has the chart of the day, asking why the finance industry has lost so many fewer jobs than much of the rest of the private-sector economy (click to enlarge):

I don’t agree with Mandel’s theory, which is this:

As long as the U.S. is running a big trade deficit, financial sector jobs are going to do very well. The rest of the world has to lend large amounts of money to the U.S. to keep the global economy going, and all of that money has to be funnelled through Wall Street, which creates well paid jobs.

The US twin deficit is more weighted than ever towards the public sector these days, rather than the private sector, and the number of jobs on Wall Street involved in dealing in Treasury bonds is pretty constant, and pretty small. More generally, while Wall Street does do quite a lot of debt finance, I don’t think that activity explains big headcount trends nearly as well as Mandel thinks it does.

So what’s my theory? If you look at the chart, it turns out that the job losses in finance are put into two buckets. There’s “commercial banking”, on the one hand, which has had very small job losses: people have just as many checking accounts and bank loans as they always did. And then there’s “finance and insurance”, which is what we generally think of as Wall Street, but which also includes the enormous number of employees in the insurance industry. And just like commercial banking, the insurance industry is pretty steady, and is going to have seen very few job losses indeed. What’s more, it’s probably bigger, in terms of total headcount, than the investment-banking industry.

So assume that insurance has seen even fewer job losses than commercial banking, and that it accounts for most of the jobs in “finance and insurance” — in that case, the job losses on Wall Street alone could be very large indeed to get to that final 7.3% figure.

Before reading too much into these numbers, then, I’d like to see a bit more disaggregation. It might be true that Wall Street hasn’t seen condign punishment in terms of job losses. But on the other hand, it might not.

Gold, Precious Metals Tumble on Japan Quake Calamity

Commodity investors lost their taste for gold in a broad sell-off that saw precious metals tumbling along with oil and other commodities in the wake of Japan’s tragedy.

Reuters reported that, while gold did not fall as much as other commodities, it was not immune to the sell-off that saw panicked commodity investors shedding a number of “safe-haven” investments. While the precious metal had risen as much as 1% on Monday, on Tuesday gold fell by 1.2% in early trading to $1,409.05. U.S. gold futures fell as well, down 1.1% to $1,409.10. Part of that, according to analysts, is attributable to investors cashing in on the metal’s previous rise of 8% in the last month on unrest in the Middle East/North Africa (MENA) region.

UBS strategist Edel Tully said in a note, "We argue that it's not unusual for gold to tumble during initial episodes of a severe broad asset sell-off. Investors sometimes have little choice but to sell the yellow metal to cover margin calls and losses elsewhere before gold then divorces itself from the downtrend." She added, "In the current climate there is more opportunity for gold to rally, as the need for safe havens accelerates."

Brent crude dropped by as much as 2.2%, partly due to risk aversion and partly due to Japan’s inability to consume as much oil as it generally does.

Platinum was also a big loser, falling nearly 2% to its lowest level in almost two months. Refiner Johnson Matthey said in the report that in 2010, Japan was the largest single national user of platinum, accounting for 18% of global autocatalyst demand of 2.985 million ounces. With much of its manufacturing, including Toyota, Nissan and Honda automobile plants, out of commission in the wake of earthquake and tsunami damage and unreliable power supplies, its consumption will fall, fueling a drop in demand for the metal.

Palladium and silver were also down, the former by 2.3% in its fifth day of loss in a row, and the latter by 3%.

Retirement Portfolio Update: Replacing Exelon With Southern Company

I have been reviewing my portfolio - as well as our "Team Alpha" retirement portfolio - during this lull in our overall strategy and am re-evaluating our position in Exelon (EXC), replacing it with Southern Company (SO).

Sometimes we need to face facts that we might be hesitant to face, and I simply cannot find enough good reasons to continue to hold EXC any longer since natural gas prices just keep dropping with no end in sight.

Yes we are getting paid to wait, but what exactly are we waiting for? EXC put a hold on some nuclear endeavors, the earnings were not great, and we just do not know how the Constellation (CEG) deal will pan out yet.

Trust me, I really hate dumping a stock that has not lost us money nor made us money, aside from the dividend; however, this is our business - to manage our portfolios to make the most that we can with the best companies we can find. That being said, while I think EXC will be in a trading range and will not fall off of a cliff, our money will be dead aside from the dividend and who knows how long the dividend will stay where it is.

Southern Company has a stellar track record of growth as well as paying dividends. They have paid them for over 60 consecutive years!

Last week the company announced that the Nuclear Regulatory Commission has given its stamp of approval on the very first 2 newest nuclear energy facilities since 1978 to none other than SO.

This is huge news, folks (read the entire report here). These 2 new plants will not only generate clean energy for a vast number of people, but will create in the neighborhood of 25,000 JOBS (on site, as well as peripheral) for the State of Georgia, where the plants will be located, not to mention the increased revenues and earnings for SO as well as the government monetary assistance that reduces SO's overall operating and startup costs. I see this being a tipping point for a slew of companies as well, but I will write about those in another article.

Chairman, CEO and President Thomas Fanning said in the report;

This is a monumental accomplishment for Southern Company, Georgia Power, our partners and the nuclear industry. We are committed to bringing these units online to deliver clean, safe and reliable energy to our customers. The project is on track, and our targets related to cost and schedule are achievable.

The Basic Fundamentals

Southern Company:

• Price $44.61/share
• Dividend Yield: 4.22%
• ESS Rating: Neutral

In April of 2009, the PPS was $28.88 and it has not looked back since then. We all know that share prices can go up, down and sideways but never the same way forever, so maybe there is a pullback in store.

I am not really concerned with that now. At the end of the year (2011) SO reported increases in revenues and earnings and while not blow-out amazing, with the 2 new plants on track to begin producing energy in 2016 and 2017, when do you think lots of other folks will jump on the SO band wagon? I can tell you one thing, they won't be waiting for 2015!

Not only that, we get paid to wait (4.22%). So my question is: Why not swap the EXC for SO now?

My Opinion

I read oodles of articles here and on lots of different sites and not that often do I find one that admits they made a mistake (well, maybe they massage the original opinion a bit) but I am stating it clearly right now: I made a mistake with Exelon. It is a very good company, and will be just dandy without us. I just should not have simply looked at the Constellation merger as the catalyst to drive the stock.

We are only human and we do the best we can. Now it's time to make a strategic move within my personal portfolio as well as the Team Alpha core portfolio we have been following here.

I will be selling EXC at the open Monday morning and using the proceeds to hopefully buy SO the same day.

I think we can all take some comfort with Southern Company.

Disclaimer: Please remember to do your own research prior to making any investment decisions. This article is not a recommendation to buy or sell any securities or stocks, and is the opinion of the author.

Disclosure: I am long EXC but am planning sell EXC and buy SO.

Forex Megadroid – Will the Forex Megadroid Help Leary Investors Get Back on Track?

It is becoming more and more hard to find investments that will рƖасе forward consistent returns and long term financial success in today’s economy. Record unemployment, large foreclosure rates, and an up and down stock market has found a fаntаѕtіс number of people in very unstable territory. Thіѕ all leads to a lack of consumer confidence and many are left searching for a ехсеƖƖеnt, solid investment vehicle which will hеƖр them on the road to financial frankness.

Thе global аnԁ, уеt, fluid world of the Forex market has provided a opportunity at success. Trillions of dollars in foreign currency is bουɡht and sold daily. Thе key, ѕау experts, is to bυу and sell. Thіѕ type of trading is counter to what hаѕ, typically, been engrained within υѕ bυу and hold. Thе bυу and hold theory will work with real estate, stocks, bonds, etc. but not with the Forex market. Those who have realized major success aver that consistent, weekly profit requires discipline and focus.

Automated trading programs, such as the Forex Megadroid have become extremely standard. Bυt, automation is a bit of a double edged sword because it can be both a hеƖр and a hindrance. Thе hеƖр comes in thаt, the decisions by the Forex Megadroid are void of any type of greed or preconceived notions that mау be based on ԁrеаԁ. Once an investment market has been select and the settings and safeguards have been put in рƖасе, the Forex Megadroid will do the actual trading. Thе hindrance is that the Forex Megadroid or other robot is incapable of using common sense or intuition when building decisions.

Forex experts ѕау thаt, as with anything еƖѕе, there will be a learning curve. Users of automated software programs like the Forex Megaroid should minimize their risk іn anticipation οf some trial and miscalculation has taken рƖасе. If possible, practice with demo software before laying down real, hard earned dollars. Thеу go on to ѕау thаt, automated trading trading software is capable of mаkіnɡ enormous profits for those willing to use it properly. WhіƖе this mау be rіɡht for ѕοmе, it is undoubtedly untrue for others. Thіѕ is whу one should always invest risk capital οnƖу. If it саnnοt be lost, then it should not be invested. Dο a little research and learn some more about the Forex market, іtѕ volatility, the Forex Megadroid and other trading robots. Mаkе sure that an extensive and knowledgeable support team will be available. Once the research has been done, an informed аnԁ, therefore, better сhοісе should be аbƖе to be made concerning an investment venue and vehicle. Find someone who is successful and learn from their mistakes and milestones.

Has Freeport-McMoRan Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Freeport-McMoRan Copper & Gold (NYSE: FCX  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Freeport-McMoRan.

Factor	What We Want to See	Actual	Pass or Fail?
Growth	5-Year Annual Revenue Growth > 15%	31.7%	Pass
�	1-Year Revenue Growth > 12%	24.1%	Pass
Margins	Gross Margin > 35%	56.9%	Pass
�	Net Margin > 15%	24.5%	Pass
Balance Sheet	Debt to Equity < 50%	19.6%	Pass
�	Current Ratio > 1.3	3.37	Pass
Opportunities	Return on Equity > 15%	43.1%	Pass
Valuation	Normalized P/E < 20	5.63	Pass
Dividends	Current Yield > 2%	2.6%	Pass
�	5-Year Dividend Growth > 10%	8.7%	Fail
�	�	�	�
�	Total Score	�	9 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Freeport-McMoRan last year, the miner has inched closer to a perfect 10. A drop in shares combined with a dividend increase pushed the stock's yield up significantly, and even with recent fluctuations in copper prices, the company still seems to be firing on all cylinders.

As its full name suggests, Freeport has long benefited from the steady rise in gold and copper prices in recent years. But between August and early October, copper prices fell from around $4.50 per pound to just above $3, sending shares of both Freeport and rivals Southern Copper (NYSE: SCCO  ) , Ivanhoe Mines (NYSE: IVN  ) , and Taseko Mines (AMEX: TGB  ) down sharply. Despite a rebound in the stock market, copper prices remain somewhat subdued.

The company faces other ongoing challenges as well. Along with Newmont Mining (NYSE: NEM  ) , Freeport has seen labor-related strife eat into production at its Grasberg facility in Indonesia, as workers seek huge increases in wages. Yet Southern Copper, which saw some production challenges as well, still managed to post good results, and long-term demand for copper seems healthy. That showed up in Freeport's earnings report as well, in which third-quarter earnings beat analyst expectations despite falling short of last year's levels.

To get that last elusive point, Freeport will need to continue its history of recent dividend growth. That in turn is dependent on metals prices. If copper, gold, and molybdenum demand remains high, then Freeport could reach perfection in the near future.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate the best investments from the rest.

Click here to add Freeport-McMoRan Copper & Gold to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our "13 Steps to Investing Foolishly."

Are Pawnshops Better than Banks?

The wealthy are turning their backs on banks...

But where are they turning to?

The chief executive of the National Pawnbrokers Association, Ray Perry, says “With banks often refusing to lend or being unable to satisfy demand for short to medium-term small cash loans, many are using pawnbrokers instead.”

And why not? When the wealthy need money quickly pawnbrokers are always there for them.

You've seen television's hottest new trend of documenting pawnshops and storage wars, but this trend is catching, beyond the reality shows and into reality.

You can see just how valuable pawning is to individuals in The Telegraph's report this week on pawnbrokers throughout England.

Simon Bennett is an entrepreneur out of Wolverhampton, England and was having some bad luck with his bank when he needed quick cash for his personal business. So instead of being yanked around by the banks, he looked to pawn his Aston Martin Virage.

Mr Bennett says, "The banks seem very reluctant to lend, so securing a short-term loan against some of my assets in order to grow my business seemed the easiest way to get the money I required."

The beauty of Bennett's quick thinking is that he has since bought back his car, but also has used additional assets like an Omega watch, an expensive painting, and even another Aston Martin (DBS V8), to increase his cash flow for his business.

(Courtesy of Cars124.com)

He said, “I have no plans to lose the items I've pawned, so it was essential that I had an exit plan when I took out this type of loan. But so long as you know how you will pay the money back and it is only for the short term, it can be a great way to raise capital when you need it.”

But Bennett's pawning of his Aston Martins is just the tip of the iceberg when it comes to the wealthy dodging banks .

One antiques dealer, Boudicca Scherazade has been pawning personal assets for years now and it has meant keeping her business afloat during the downturn.

She says that in terms of raising money, it is much easier and faster to get a loan through a pawnbroker, especially in her business of antique sales. She often needs money quickly to pay upfront for a purchase for one of her clients, so pawnbrokers are ideal for such sales. Going to a bank takes too much time and for her, time is money for antiques.

“I have always got my items back [like an 18ct gold Rolex and Cartier love bangle she got £4,000 for]. So for me this is a swift and slick way to get access to cash when I need it.”

Pawnbroker shops have been on the rise for the past few years. In England, the Albermarle & Bond pawnbroker company is taking over, expanding to 300 outlets and recording up to £12.1 million in profits over just the last six months. In the past five years, the number of shops increased from just 530 in 2007 to more than 1,800 today in England alone. The National Pawnbrokers Association reports that there are over 30 million pawn store customers per year while the national average loan amount has just jumped from $80 to $100 over the past year.

And the people that are making the most from these pawnshops are the wealthy middle class, like Bennett and Scherazade.

From the Telegraph,

"People are undoubtedly being hit by these tough economic times and are looking at different ways to raise money for various reasons – tax bills or business cash flow issues, for example," said Paul Aitken, the chief executive of Borro.

He said many consumers who had interesting and valuable personal assets sitting in their homes or in storage were now realising they could use them to gain access to cash to make ends meet. "We have seen an influx in the number of high-value personal assets coming to us," he said.

Companies like Albermarle & Bond and H & T are both considered stocks to buy lately, as the popularity of pawnbrokers across the globe has increased significantly.

For individuals that are smart with their investments but even smarter with their quick loans, pawnshops are becoming the best answer. As Bennett said it bluntly, “Pawning my Aston Martin was the best option.”

 

It’s Not Blue Skies for All Cloud IPOs

The so-called Internet cloud sector, where software and applications are delivered via the Web, got a huge boost this week when SAP (NYSE:SAP) agreed to plunk down$3.4 billion for SuccessFactors (Nasdaq:SFSF). Using the cloud lowers costs because there is no need to invest in infrastructure like servers. There are also immediate updates and access to real-time information, since the databases are centralized.

But will this new takeover interest help the IPOs of cloud companies as well? Perhaps, but investors should be careful. For the most part, the cloud space is highly fragmented and competitive.

Take GlassHouse Technologies, for example. In 2007, the company filed for an IPO but pulled the offering because of the financial crisis. Two years later, GlassHouse tried again, but it couldn�t gin up enough interest and the company just pulled its deal on Tuesday.

GlassHouse is a solid company — it has a system called Transom, which is a blend of consulting and software tools that help improve datacenter operations. The focus is on leveraging information technology assets, improving service levels and finding cost efficiencies. GlassHouse has roughly half of the Fortune 500 as customers.

And the company has been growing at a nice pace. For the six months ended June 30, GlassHouse�s revenue grew to $65.5 million go from $48.3 million. On the other hand the company lost $20.9 million.

But with that revenue growth, why was there such a lack of interest in the deal? One issue is likely the company�s heavy reliance on consulting. This can be a tough business to scale. Plus, there are other huge consulting firms moving into the cloud, such as Accenture (NYSE:ACN).

At the same time, investors also want to see a cloud company that has a platform, meaning the software spans many industries and provides core functions, which makes it easier to lock in customers. This is what SuccessFactors built.

Interestingly enough, the platform strategy has been a key factor for another upcoming IPO company called Jive (it�s planned for next week). It has developed a �Facebook for business� � software that helps with sharing documents and status updates to get better performance from projects.

The SAP-SuccessFactors deal will likely provide a nice boost to Jive�s expected $8-$10 pricing range. In fact, it could be enough to give the company a billion-dollar valuation when it hits the market.

 

SM: Bond Rates May Not Go Up for Years

The "bond vigilantes" who once imposed law and order on financial markets are being run out of town. That means investors thirsting for a quick return to "normal" interest rates might stay parched for a long time to come.

Throughout most of the bull market in bonds over the past 30 years, big investors dumped Treasury securities whenever the U.S. flirted with fiscal recklessness. By sending a stinging signal to Washington that they wouldn't tolerate irresponsible policies, the vigilantes imposed discipline and kept rates stable at yields investors could live on.

But the bond vigilantes are on the run, warns Todd Petzel, chief investment officer at Offit Capital, a New York firm that manages $6 billion for wealthy clients. In recent years, Mr. Petzel says, the Treasury market has changed in profound ways.

Historically, the bulk of U.S. Treasury debt was held by private investors -- including the big institutions that used their enormous market power, vigilante-style, to keep interest rates in line.

Now, Mr. Petzel points out, much of the demand for U.S. debt comes from "uneconomic" buyers who scoop it up -- and hold on to it -- at any price. Only 23% of Treasurys are held by individual and institutional investors -- down from 55% in 1982 and 31% a decade ago.

Today, foreign holders -- largely central banks desperate to stabilize their currencies and banking systems -- own 34% of Treasury debt. That is up from 13% in 1982 and 18% a decade ago. The Federal Reserve, meanwhile, holds 11% of Treasurys, twice its share in 2008.

With so much demand from price-insensitive buyers, "Treasurys are priced like fire insurance gets priced after the buildings are already burning," says Dan Dektar, chief investment officer at Smith Breeden Associates, which manages $6.4 billion in bonds in Durham, N.C.

The conventional wisdom is that after another year or two, interest rates are bound to go up as investors penalize lawmakers for their profligate ways by demanding higher yields.

Don't be so sure, Mr. Petzel says. "The single biggest mistake that smart people have made over the past few years," he says, "is assuming that interest rates have to go up."

Instead, he warns, the yield drought might last not only until 2014, as the Fed is forecasting, but far beyond.

The market says Mr. Petzel is wrong. Derivatives traders expect short-term rates and the yield on the 10-year Treasury to rise by roughly 0.4 and 0.75 percentage points, respectively, by 2015 -- and by up to 1.5 points five years out.

But the market might not be fully recognizing another looming problem, Mr. Petzel says. Under the Dodd-Frank financial-overhaul law, the trading of many derivatives -- complex instruments like interest-rate swaps -- will eventually migrate to central "clearinghouses." Buyers and sellers will have to post "margin," or collateral, to back their positions.

One obvious choice for that margin would be U.S. Treasurys -- yet another form of the artificial demand for government debt that the economist Carmen Reinhart calls "financial repression."

Such derivatives total an estimated $700 trillion in "notional" or face value outstanding. If only 10% of the total is affected, with an initial requirement of even just 1% margin from both the buyers and the sellers, that implies an extra $1.4 trillion in demand for short-term Treasurys, reckons Mr. Petzel. Those new purchasers would have to buy the debt no matter how paltry its yield.

A derivatives trader at one of the world's largest hedge funds tells me that he finds Mr. Petzel's estimate "quite believable" -- if not conservative.

So what should investors do to survive a potential long march through a yield desert?

First, with so many new holders who aren't price-sensitive, Treasurys are more likely than ever to hold up in a crisis -- as they did in 2008 and 2009. Thus, even at today's measly yields, Treasurys still have a place as a hedge against a fall in your stock portfolio.

Next, recognize that if rates stay low for years on end, inflation will eat your cash alive. "So you should keep your cash component as small as possible," Mr. Petzel says.

When interest rates are low and stable, a Ginnie Mae or other high-quality mortgage fund should generate some extra income, Smith Breeden's Mr. Dektar says. The Vanguard GNMA fund, for instance, is yielding 2.6%, versus 2% on the Vanguard Total Bond Market Index fund. (Warning: Mortgage funds generally do poorly when interest rates rise.)

Investment-grade, intermediate municipal bonds are yielding 2.2% and up, or 3.4% after tax for upper-income investors.

Above all, grit your teeth and lower your expectations for higher yields. We might be stuck in the flatlands for a long while.

—intelligentinvestor@wsj.com; twitter.com/jasonzweigwsj