Chances are that you have to allocate your investing dollars wisely and where you think you’ll get the best payoff. So, should you put your money on Facebook? Or might it be another company?
I actually think investors can find some much better deals to choose from — without worrying about the fickleness of Internet fads, upstart competitors — which are getting tons of venture capital — as well as giant rivals like Google (NASDAQ:GOOG). Besides, in the Facebook S-1, Mark Zuckerberg does write: “we don’t build services to make money; we make money to build better services.” Yes, this may be scary for some investors.
So what might be some other stocks to consider? Here’s my shortlist of those with a market cap similar to Facebook’s estimated $100 billion:
3 Stocks That Are Better Than Facebook to buy in 2012 - ConocoPhillips (NYSE:COP) — $92 billion market cap.
Let’s face it, the world is having a tougher time finding oil reserves. Yet the demand continues to grow, especially in countries like China.
In the latest quarter, Conoco’s profits came to $3.39 billion while revenues increased by 17% to $62.39 billion. The company also plans to spin off its refining division, which will generate cash to pay down debt and allow for more focus on deepwater exploration.
Finally, Conoco has a juicy dividend, currently at 3.8%. In other words, if you bought Conoco for $92 billion, your annual distribution would be $3.5 billion. That should be enough for any kind of lifestyle.
Oh yeah, Berkshire Hathaway’s (NYSE:BRK.A) Warren Buffett, who is probably still worth more than Facebook’s Zuckerberg, holds 2.19% of the stock.
3 Stocks That Are Better Than Facebook to buy in 2012 - McDonald’s (NYSE:MCD) — $100 billion market cap.
As seen recently, the company has had some snafus with its social media marketing campaigns. But it’s something that Mickey D. will definitely learn from. When it comes to building a brand, few are better than McDonald’s.
And as InvestorPlace.com contributor Gene Marcial points out, the company is really the Apple (NASDAQ:AAPL) of fast food. And unlike Facebook, it also has a thriving business in China.
Despite the sluggishness in the global economy — especially in Europe — McDonald’s still finds ways to crank out growth. In November, global comparable sales growth came to 7.4%.
What about a dividend? The current yield is 2.8%.
3 Stocks That Are Better Than Facebook to buy in 2012 - QUALCOMM (NASDAQ:QCOM) — $103 billion market cap.
Yesterday, Qualcomm reported a blowout quarter. Revenues soared by 40% to $4.68 billion, with profits coming to $1.4 billion, or 81 cents per share. The company sees next quarter’s revenues at $4.6 billion to $5 billion, which compares to the analyst consensus of $4.51 billion.
Of course, Qualcomm is getting a lift from its Apple business, and it has lots of strength in India and China. So, in light of the expected momentum in the smartphone market, Qualcomm is likely to continue to post high-performance results. By contrast, Facebook makes virtually nothing from its mobile business.
Something else: Qualcomm even has a decent dividend yield of 1.5%. Don’t expect a dividend from Facebook anytime soon.
Consider This Gasoline ETF As A Hedge (UGA)
The United States Gasoline Fund (NYSEARCA:UGA) is a way for investors and hedgers to manage their exposure to gasoline prices. This exchange traded fund is designed to reflect changes in percentage terms of the price of gasoline as measured by the change in the price of the gasoline futures contract traded on the New York Mercantile Exchange.
Let's take a look at the chart below. UGA formed a breakaway gap from a "Descending Triangle" pattern to start 2012. A descending triangle pattern shows demand at a fixed price level which is where I drew the blue horizontal trendline. It also shows increasing supply pressures with each rally off of support marked by the falling blue trendline.
Eventually either the demand or the supply is going to be depleted by the other. Normally this is a very bearish pattern, since once demand has been depleted; you can almost hear on the chart "look out below". The path of least resistance is lower below $45. Why? Traders who were buying and holding inside the triangle now have a losing position and potentially will be looking to cut losses. This increases supply. Bids become smart money doesn't like to catch a falling knife. Increasing supply with decreasing demand means down we go in price. Eventually the market hits a stopping price where the prior sellers are gone and long term investors now believe there is value and step in for a bargain. This is the reality of a two way auction.
The breakout that we see now on the other hand is not the most bullish indicator. What happened does signal a potential change in trend when the trendline is broken to the upside but you may still have some buy and hold investors at higher levels looking to get out. This can cause a false breakout. Volume was not that strong so this has potential to fill the gap.
I do not rely on technical indicators to make trading decisions, but it's worth pointing out that we had a MACD centerline crossover while UGA was inside the triangle as well as some prior positive bullish! diverge nce the last time UGA was bouncing on support. This was a signal to some technicians that momentum was building to the upside.
I would like to see Gasoline fill the gap and retest that backside of the falling trendline to see if any additional supply comes in. Any move back above this recent high afterward will be bullish and have me taking trades.
A longer term investor might find the horizontal support a great place to put a protective stop, but keep in mind this would be about a 10% move if you are proven wrong. Position sizing would be critical to keep losses to a minimum. Position sizing has everything to do with your account size and how much you are comfortable risking in capital (or how much you drive, since you may offset losses in your UGA hedge at the pump).
UGA often trades less than 100,000 shares so this is not a wise day trading vehicle.
Let's take a look at the chart below. UGA formed a breakaway gap from a "Descending Triangle" pattern to start 2012. A descending triangle pattern shows demand at a fixed price level which is where I drew the blue horizontal trendline. It also shows increasing supply pressures with each rally off of support marked by the falling blue trendline.
Eventually either the demand or the supply is going to be depleted by the other. Normally this is a very bearish pattern, since once demand has been depleted; you can almost hear on the chart "look out below". The path of least resistance is lower below $45. Why? Traders who were buying and holding inside the triangle now have a losing position and potentially will be looking to cut losses. This increases supply. Bids become smart money doesn't like to catch a falling knife. Increasing supply with decreasing demand means down we go in price. Eventually the market hits a stopping price where the prior sellers are gone and long term investors now believe there is value and step in for a bargain. This is the reality of a two way auction.
The breakout that we see now on the other hand is not the most bullish indicator. What happened does signal a potential change in trend when the trendline is broken to the upside but you may still have some buy and hold investors at higher levels looking to get out. This can cause a false breakout. Volume was not that strong so this has potential to fill the gap.
I do not rely on technical indicators to make trading decisions, but it's worth pointing out that we had a MACD centerline crossover while UGA was inside the triangle as well as some prior positive bullish! diverge nce the last time UGA was bouncing on support. This was a signal to some technicians that momentum was building to the upside.
I would like to see Gasoline fill the gap and retest that backside of the falling trendline to see if any additional supply comes in. Any move back above this recent high afterward will be bullish and have me taking trades.
A longer term investor might find the horizontal support a great place to put a protective stop, but keep in mind this would be about a 10% move if you are proven wrong. Position sizing would be critical to keep losses to a minimum. Position sizing has everything to do with your account size and how much you are comfortable risking in capital (or how much you drive, since you may offset losses in your UGA hedge at the pump).
UGA often trades less than 100,000 shares so this is not a wise day trading vehicle.
Oil Trades Near One-Week High on Speculation U.S. Economy May Boost Demand
Oil traded near the highest price ina week in New York and is poised for the first weekly gain inthree amid signs of economic recovery in the U.S., the world sbiggest crude consumer.
Futures were little changed after climbing for a second dayyesterday. U.S. durable goods orders rose more than forecast inDecember, according to Commerce Department data, while a reportthis week showed gasoline demand increased the most in more thantwo months. Australia s crude production may have been cut by aquarter as Tropical Cyclone Iggy shut platforms. Brent oil spremium to New York-traded West Texas Intermediate widened.
The data we ve seen out of the U.S. over the last fewmonths is indicating a recovery in the economy, Michael McCarthy, a chief market strategist at CMC Markets Asia PacificPty in Sydney, said by telephone today. The spread betweenBrent and West Texas has blown out again. That suggests thepotential for some supply disruption out of the Middle East isin the back of traders minds.
Crude for March delivery was at $99.63 a barrel inelectronic trading on the New York Mercantile Exchange, down 7cents, at 3:29 p.m. Singapore time. Yesterday, the contractgained 30 cents to $99.70, the highest settlement since Jan. 19.Prices have climbed 1.2 percent so far this week and 16 percentin the past year.
Brent oil for March settlement on the London-based ICEFutures Europe exchange was at $110.68 a barrel, down 11 cents.The European benchmark contract was at a premium of $11.10 toWest Texas futures. The spread shrank to $9.90 on Jan. 18 andreached a record $27.88 on Oct. 14.
Technical Support
Crude in New York has technical support along its 50-daymoving average, around $99.28 a barrel today, according to datacompiled by Bloomberg. Futures slid to an intraday low yesterdayof $99.23. Buy orders tend to be clustered near chart-supportlevels.
West Texas is in a key area between $99 and $102 so if wedo see it trade up through $102.50 in the next few sess! ions wec ould well get a bit of a gallop on, McCarthy said.
U.S. bookings for durable goods, or products meant to lastat least three years, advanced 3 percent after rising 4.3percent the prior month, the biggest back-to-back gains inalmost a year, based on a Commerce Department report yesterdayin Washington. A median 2 percent increase was predicted by 78economists surveyed by Bloomberg News.
Fuel consumption rose 7.5 percent to 19.2 million barrels aday in the week ended Jan. 20, the largest gain since Nov. 4,the Energy Department said on Jan. 25.
Iran Sanctions
Oil has also risen this week amid concern European Unionsanctions on Iran will curb supplies. EU foreign ministersagreed on Jan. 23 to ban petroleum imports from the Persian Gulfnation from July 1 to pressure the country over its nuclearprogram. Iranian President Mahmoud Ahmadinejad said his countryis willing to revive talks on its nuclear plans and accusedWestern countries of dodging discussions, the state-run Farsnews agency reported yesterday.
Iran has threatened to close the Strait of Hormuz inretaliation against the embargo. The waterway is a transit routefor about a fifth of the world s crude, according to the U.S.Department of Energy.
More than 70 percent of investors in a quarterly BloombergGlobal Poll said an attack on Iran s nuclear facilities wouldcreate only a short-term disruption in crude markets. About athird of 1,209 global investors, traders and analysts surveyedfrom Jan. 23 to Jan. 24 said an attack could trigger an oilshock leading to a global recession.
Tropical Cyclone Iggy
Crude may rise next week on the EU embargo plan and afterthe Federal Reserve committed to keep interest rates near arecord low through 2014, according to a Bloomberg News survey.Fifteen of 32 analysts and traders, or 47 percent, forecast oilwill advance through Feb. 3. Ten respondents, or 31 percent,predicted prices will drop and seven estimated there will belittle change.
Tropical Cyclone Iggy! reduced Australian oil output thisweek by as much as 100,000 barrels a day, or about a quarter ofthe country s average production last fiscal year. The stormwill strengthen to Category 3 tomorrow, the third-strongest on afive-step scale, the Bureau of Meteorology said on its website.
Futures were little changed after climbing for a second dayyesterday. U.S. durable goods orders rose more than forecast inDecember, according to Commerce Department data, while a reportthis week showed gasoline demand increased the most in more thantwo months. Australia s crude production may have been cut by aquarter as Tropical Cyclone Iggy shut platforms. Brent oil spremium to New York-traded West Texas Intermediate widened.
The data we ve seen out of the U.S. over the last fewmonths is indicating a recovery in the economy, Michael McCarthy, a chief market strategist at CMC Markets Asia PacificPty in Sydney, said by telephone today. The spread betweenBrent and West Texas has blown out again. That suggests thepotential for some supply disruption out of the Middle East isin the back of traders minds.
Crude for March delivery was at $99.63 a barrel inelectronic trading on the New York Mercantile Exchange, down 7cents, at 3:29 p.m. Singapore time. Yesterday, the contractgained 30 cents to $99.70, the highest settlement since Jan. 19.Prices have climbed 1.2 percent so far this week and 16 percentin the past year.
Brent oil for March settlement on the London-based ICEFutures Europe exchange was at $110.68 a barrel, down 11 cents.The European benchmark contract was at a premium of $11.10 toWest Texas futures. The spread shrank to $9.90 on Jan. 18 andreached a record $27.88 on Oct. 14.
Technical Support
Crude in New York has technical support along its 50-daymoving average, around $99.28 a barrel today, according to datacompiled by Bloomberg. Futures slid to an intraday low yesterdayof $99.23. Buy orders tend to be clustered near chart-supportlevels.
West Texas is in a key area between $99 and $102 so if wedo see it trade up through $102.50 in the next few sess! ions wec ould well get a bit of a gallop on, McCarthy said.
U.S. bookings for durable goods, or products meant to lastat least three years, advanced 3 percent after rising 4.3percent the prior month, the biggest back-to-back gains inalmost a year, based on a Commerce Department report yesterdayin Washington. A median 2 percent increase was predicted by 78economists surveyed by Bloomberg News.
Fuel consumption rose 7.5 percent to 19.2 million barrels aday in the week ended Jan. 20, the largest gain since Nov. 4,the Energy Department said on Jan. 25.
Iran Sanctions
Oil has also risen this week amid concern European Unionsanctions on Iran will curb supplies. EU foreign ministersagreed on Jan. 23 to ban petroleum imports from the Persian Gulfnation from July 1 to pressure the country over its nuclearprogram. Iranian President Mahmoud Ahmadinejad said his countryis willing to revive talks on its nuclear plans and accusedWestern countries of dodging discussions, the state-run Farsnews agency reported yesterday.
Iran has threatened to close the Strait of Hormuz inretaliation against the embargo. The waterway is a transit routefor about a fifth of the world s crude, according to the U.S.Department of Energy.
More than 70 percent of investors in a quarterly BloombergGlobal Poll said an attack on Iran s nuclear facilities wouldcreate only a short-term disruption in crude markets. About athird of 1,209 global investors, traders and analysts surveyedfrom Jan. 23 to Jan. 24 said an attack could trigger an oilshock leading to a global recession.
Tropical Cyclone Iggy
Crude may rise next week on the EU embargo plan and afterthe Federal Reserve committed to keep interest rates near arecord low through 2014, according to a Bloomberg News survey.Fifteen of 32 analysts and traders, or 47 percent, forecast oilwill advance through Feb. 3. Ten respondents, or 31 percent,predicted prices will drop and seven estimated there will belittle change.
Tropical Cyclone Iggy! reduced Australian oil output thisweek by as much as 100,000 barrels a day, or about a quarter ofthe country s average production last fiscal year. The stormwill strengthen to Category 3 tomorrow, the third-strongest on afive-step scale, the Bureau of Meteorology said on its website.
Obama and Buffett Rule Make ¡®Good Tax Politics, Not Good Tax Policy,¡¯ Expert Says
President Barack Obama delivering the State of the Union address on Tuesday night. (Photo: AP)
Obama’s proposal to cut $3.6 trillion from the deficit over the next decade through a measure called the Buffett rule, named for billionaire investor Warren Buffett, which increases taxes on wealthy Americans who earn $1 million or more per taxable year, is merely “good tax politics, not good tax policy,” says Christopher Bergin, president of Tax Analysts.
The fundamental problem with the tax code, Bergin says, is that “our tax system right now picks winners and losers.” The wages that average workers pay and are reported on their W-2s are taxed “differently” than the money Buffett and Mitt Romney, the current GOP presidential candidate, make, which is “not by working but by moving money around.” The way the law is written, Buffett and Romney “get a better tax rate than the rest of us.”
As Obama said during his speech on Tuesday, “Tax reform should follow the Buffett rule. If you make more than $1 million a year, you should not pay less than 30% in taxes.… Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions.” On the other hand, he said, “if you make under $250,000 a year, like 98% of American families, your taxes shouldn’t go up. You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.”
But “sticking it to the rich” will not fix the income tax code, “which is extremely problematic,” Bergin says. The tax system as it stands now “benefits the rich, and the poor–however you want to categorize them–lower income people do not pay federal income taxes. Some of them get refundable earned income tax credits for some of the payroll taxes they pay.” But it is the middle income folks–those generally earning $100,000 to $500,000 per year, Bergin says, that “really get hit; and are paying more of an effective [tax] rate than Romney.”
Obama also said he wants to let the Bush tax cuts expire. “When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices,” Obama said. “Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2% of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.”
Asked Obama: “Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else–like education and medical research; a strong military and care for our veterans? Because if we’re serious about paying down our debt, we can’t do both.”
Obama went on to say that America needs “to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes.”
But Bergin doubts Congress will make any headway in reforming the tax code this year. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and “his colleagues have to deal with things that are timed to blow up this year or have already blown up last year; there is no opportunity for tax reform this year.”
Lawmakers must grapple this year with the Alternative Minimum Tax, as the patch instituted last year has expired, as well as the estate tax. Bergin says he’s been hearing from wealth managers “who don’t know how to advise their clients” because the estate tax rules revert back to 2001 rates at the end of 2012.
Then there’s the payroll tax cut, which was extended for two-months before Congress’ holiday recess and that expires on Feb. 29. The Temporary Payroll Tax Cut Continuation Act of 2011 extends the two-percentage-point payroll tax cut for employees, continuing the reduction of the Social Security tax withholding rate from 6.2% to 4.2%.
Obama urged Congress during his speech to pass the payroll tax cut “without delay.” He said Congress’ “most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile.”
Bergin says there’s a danger for Social Security if Congress continues to “extend” the payroll tax cut as opposed to a long-term solution. “If [Congress] keeps extending this payroll tax cut there’s a threat to Social Security that no one is talking about, of it not becoming a separate system but just another budget item” for Congress.
But Bergin doubts Congress will make any headway in reforming the tax code this year. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and “his colleagues have to deal with things that are timed to blow up this year or have already blown up last year; there is no opportunity for tax reform this year.”
Lawmakers must grapple this year with the Alternative Minimum Tax, as the patch instituted last year has expired, as well as the estate tax. Bergin says he’s been hearing from wealth managers “who don’t know how to advise their clients” because the estate tax rules revert back to 2001 rates at the end of 2012.
Then there’s the payroll tax cut, which was extended for two-months before Congress’ holiday recess and that expires on Feb. 29. The Temporary Payroll Tax Cut Continuation Act of 2011 extends the two-percentage-point payroll tax cut for employees, continuing the reduction of the Social Security tax withholding rate from 6.2% to 4.2%.
Obama urged Congress during his speech to pass the payroll tax cut “without delay.” He said Congress’ “most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile.”
Bergin says there’s a danger for Social Security if Congress continues to “extend” the payroll tax cut as opposed to a long-term solution. “If [Congress] keeps extending this payroll tax cut there’s a threat to Social Security that no one is talking about, of it not becoming a separate system but just another budget item” for Congress.
The Reorganization Man - the government we have is not the government we need
The Washington rap on President Obama is that he's humorless, but that's unfair. He may not be Jay Leno funny, but his bit Friday on reforming and reducing government was great.
There he was in the East Room, explaining that "the government we have is not the government we need." That's for sure, and Mr. Obama even added the Gingrichian theme that "We live in a 21st-century economy, but we've still got a government organized for the 20th century. Our economy has fundamentally changed—as has the world—but our government, our agencies, has not."
Alas, the President wasn't talking about modernizing Medicare or the entitlement state. He merely wants Congress to give him more power to reorganize the government. He says he wants his team to scrub down the executive branch looking for waste, duplication and bureaucratic complexity, and then to fast-track their proposals to Congress for an up-or-down vote within 90 days.
Mr. Obama's first targets for such "consolidation authority" are the six agencies related to business and the world economy, from the Commerce Department to the Export-Import Bank to the U.S. Trade Represen! tative. Maybe the White House chose to start there because, with an eye on the GOP campaign, Rick Perry wants to eliminate Commerce and a few other cabinet departments he can't remember.
Another way of putting it is that this new emphasis on streamlining the bureaucracy is Mr. Obama's version of the Texas Governor's "Oops." Having presided over the largest expansion of government since LBJ—health care, financial reregulation, spending 24% of GDP, the surge of industrial policy—Mr. Obama's pollsters must be saying that voters have the jimmy-legs about bigger government and that he thus can't run only as a Great Society man.
This jobs boom is projected to decline slightly this year, to 2.116 million public employees, and the Administration says the Commerce unwind will take it down by another 1,000 or so. Yet even that would come through attrition, which usually means the competent people leave when they've had it with the lifers.
Proposals for government reorganization are the elevator music of politics, always present but never leaving much of an impression. Newt Gingrich says he's running in part to apply Lean Six Sigma best practices to the bureaucracy. Al Gore famously drew up a scheme for "reinventing government" in the late 1990s. He abandoned it after the airline unions revolted amid his attempt to reinvent the Federal Aviation Administration.
Reshuffling agencies rarely works because what's important in government isn't where the bureaucrats sit but their mindset. The incentives are for inertia, turf protection and blame-shifting—unless change is imposed from the top. Mr. Obama has made it clear with his priorities over three years that his preference is for the government status quo, only more of it.
But Mr. Obama is now at least bowing to the principle of smaller government, and our advice to Congress is to weigh his proposals and extract some concessions to see if the President means what he says.
A major concern is the office of the U.S. trade rep, which Mr. Obama wants to subsume within the Commerce monolith. But the trade rep office is one of the best in government precisely because it is small, reports to the White House, and is focused on the single mission of trade expansion. As part of Commerce it may be drowned out by protectionist voices.
Another priority ought! to be r eforming the 47 separate job retraining programs, all but three of which overlap. The Government Accountability Office calls this wasteful with "no measurable benefit," but the White House has rebuffed any meaningful change.
This is a President who last year promised a review of all regulations while riding the greatest rule-making wave in American history. Now he's calling for leaner government without mentioning ObamaCare and Dodd-Frank, which create so many new boards and commissions that government auditors (literally) can't even count them. We suspect many in the White House were laughing themselves when they came up with this one.
There he was in the East Room, explaining that "the government we have is not the government we need." That's for sure, and Mr. Obama even added the Gingrichian theme that "We live in a 21st-century economy, but we've still got a government organized for the 20th century. Our economy has fundamentally changed—as has the world—but our government, our agencies, has not."
Alas, the President wasn't talking about modernizing Medicare or the entitlement state. He merely wants Congress to give him more power to reorganize the government. He says he wants his team to scrub down the executive branch looking for waste, duplication and bureaucratic complexity, and then to fast-track their proposals to Congress for an up-or-down vote within 90 days.
Mr. Obama's first targets for such "consolidation authority" are the six agencies related to business and the world economy, from the Commerce Department to the Export-Import Bank to the U.S. Trade Represen! tative. Maybe the White House chose to start there because, with an eye on the GOP campaign, Rick Perry wants to eliminate Commerce and a few other cabinet departments he can't remember.
Another way of putting it is that this new emphasis on streamlining the bureaucracy is Mr. Obama's version of the Texas Governor's "Oops." Having presided over the largest expansion of government since LBJ—health care, financial reregulation, spending 24% of GDP, the surge of industrial policy—Mr. Obama's pollsters must be saying that voters have the jimmy-legs about bigger government and that he thus can't run only as a Great Society man.
But let's go to the videotape. One measure of government size is the federal work force, measured by the White House budget office as civilian full-time equivalent employees, excluding the military and Post Office. The executive branch had about 1.875 million workers in 2008 when the financial crisis hit, a number that held relatively constant throughout the post-9/11 Bush Administration. That number climbed to 2.128 million two years later under the 111th Congress—or growth of 13.5%. That's the largest government since 1992, when the Clinton Administration began to slash defense! spendin g.
This jobs boom is projected to decline slightly this year, to 2.116 million public employees, and the Administration says the Commerce unwind will take it down by another 1,000 or so. Yet even that would come through attrition, which usually means the competent people leave when they've had it with the lifers.
Proposals for government reorganization are the elevator music of politics, always present but never leaving much of an impression. Newt Gingrich says he's running in part to apply Lean Six Sigma best practices to the bureaucracy. Al Gore famously drew up a scheme for "reinventing government" in the late 1990s. He abandoned it after the airline unions revolted amid his attempt to reinvent the Federal Aviation Administration.
Reshuffling agencies rarely works because what's important in government isn't where the bureaucrats sit but their mindset. The incentives are for inertia, turf protection and blame-shifting—unless change is imposed from the top. Mr. Obama has made it clear with his priorities over three years that his preference is for the government status quo, only more of it.
But Mr. Obama is now at least bowing to the principle of smaller government, and our advice to Congress is to weigh his proposals and extract some concessions to see if the President means what he says.
A major concern is the office of the U.S. trade rep, which Mr. Obama wants to subsume within the Commerce monolith. But the trade rep office is one of the best in government precisely because it is small, reports to the White House, and is focused on the single mission of trade expansion. As part of Commerce it may be drowned out by protectionist voices.
Another priority ought! to be r eforming the 47 separate job retraining programs, all but three of which overlap. The Government Accountability Office calls this wasteful with "no measurable benefit," but the White House has rebuffed any meaningful change.
This is a President who last year promised a review of all regulations while riding the greatest rule-making wave in American history. Now he's calling for leaner government without mentioning ObamaCare and Dodd-Frank, which create so many new boards and commissions that government auditors (literally) can't even count them. We suspect many in the White House were laughing themselves when they came up with this one.
Chapter 7 Or 13 on Personal Bankruptcy in 2012
Bankruptcy laws in the United States are made to ensure the interests of the borrower are safeguarded, and are formed by the federal government and addressed accordingly by various US Bankruptcy Courts, and it is believed that each year as many as one million Americans go bankrupt and are found filing for bankruptcy. Most of these individuals that file for bankruptcy do so under different personal bankruptcy laws that include chapter thirteen and also chapter 7, and in a few instances, they can even qualify for chapter twelve, especially if they are anglers or farmers and business is owned by the family.
Filing Under Chapter Seven
You can file personal bankruptcy and at the same time do so under chapter seven in which case it is necessary for you to provide a list of all your assets to the court and also have to assign a trustee who will liquidate items in order to pay off creditors. Furthermore, filing personal bankruptcy is allowed once in seven years and the cost of filing personal bankruptcy is approximately three hundred dollars which goes towards filing fee.
If you plan on filing personal bankruptcy under chapter thirteen, it will help in reducing your debt though unlike chapter seven, does not cancel out your debt. And, chapter thirteen personal bankruptcies also means having to set out a plan for repayment with creditors and courts and assigning trustee who will make monthly payments after paying them the money. The trustee will receive payments from you and apportion them to various creditors, and an advantage to using chapter thirteen for filing personal bankruptcy is that unlike in chapter seven, under this chapter you may hold on to everything that would have been lost under chapter seven.
However, both these types of personal bankruptcy allows the debtor to rid him or herself of debts, though remember when filing chapter thirteen bankruptcy, you need to have debt that is not more than two hundred fifty thousand dollars and that such debt is uns! ecured, while debts that are secured should not exceed seven hundred and fifty thousand dollars.
The bottom line is that before filing for personal bankruptcy, makes sure to know what the ramifications of different chapters are and in most instances it may be better to file for chapter thirteen instead of chapter seven as the latter shows that you are a person that does not pay your debts.
Filing Under Chapter Seven
You can file personal bankruptcy and at the same time do so under chapter seven in which case it is necessary for you to provide a list of all your assets to the court and also have to assign a trustee who will liquidate items in order to pay off creditors. Furthermore, filing personal bankruptcy is allowed once in seven years and the cost of filing personal bankruptcy is approximately three hundred dollars which goes towards filing fee.
If you plan on filing personal bankruptcy under chapter thirteen, it will help in reducing your debt though unlike chapter seven, does not cancel out your debt. And, chapter thirteen personal bankruptcies also means having to set out a plan for repayment with creditors and courts and assigning trustee who will make monthly payments after paying them the money. The trustee will receive payments from you and apportion them to various creditors, and an advantage to using chapter thirteen for filing personal bankruptcy is that unlike in chapter seven, under this chapter you may hold on to everything that would have been lost under chapter seven.
However, both these types of personal bankruptcy allows the debtor to rid him or herself of debts, though remember when filing chapter thirteen bankruptcy, you need to have debt that is not more than two hundred fifty thousand dollars and that such debt is uns! ecured, while debts that are secured should not exceed seven hundred and fifty thousand dollars.
The bottom line is that before filing for personal bankruptcy, makes sure to know what the ramifications of different chapters are and in most instances it may be better to file for chapter thirteen instead of chapter seven as the latter shows that you are a person that does not pay your debts.
Marathon Petroleum Corp (NYSE: MPC) May Soon Be the World¡¯s Richest Refiner
There's an oil price trend that's giving some oil refining companies a huge competitive edge.
Specifically I'm referring to Marathon Petroleum Corp. (NYSE: MPC).
You see, production from North Dakota's Bakken oil shale formation - the largest known reserve of light sweet crude in North America - is soaring. It went from a mere 3,000 barrels a day in 2005 to 225,000 in 2010, and could hit 350,000 barrels a day by 2035, according to the Energy Information Administration.
Currently, there aren't many ways to ship oil out of the basin, and supply in the region is outpacing refining capacity. That's helped keep the price of West Texas Intermediate (WTI) crude lower than the price of Brent crude in London, with the spread now around $17.
Since U.S. East Coast refineries usually source Brent-priced crude oil, their input costs have skyrocketed. This is one of the reasons major integrated oil companies have shed their refining capacities.
But Midwest refineries have been able to save money by running WTI-priced oil, getting crude at significantly cheaper prices than globally sourced locations.
With the Bakken formation ramping up production in coming years to meet growing demand, the region's refineries will continue to enjoy low input costs. It also means refineries that have access to Bakken oil will have a steady supply that's cheaper than their competitors.
This is why Marathon Petroleum Corp., the largest Midwest refiner, is a "Buy." (**)
Specifically I'm referring to Marathon Petroleum Corp. (NYSE: MPC).
You see, production from North Dakota's Bakken oil shale formation - the largest known reserve of light sweet crude in North America - is soaring. It went from a mere 3,000 barrels a day in 2005 to 225,000 in 2010, and could hit 350,000 barrels a day by 2035, according to the Energy Information Administration.
Currently, there aren't many ways to ship oil out of the basin, and supply in the region is outpacing refining capacity. That's helped keep the price of West Texas Intermediate (WTI) crude lower than the price of Brent crude in London, with the spread now around $17.
Since U.S. East Coast refineries usually source Brent-priced crude oil, their input costs have skyrocketed. This is one of the reasons major integrated oil companies have shed their refining capacities.
But Midwest refineries have been able to save money by running WTI-priced oil, getting crude at significantly cheaper prices than globally sourced locations.
With the Bakken formation ramping up production in coming years to meet growing demand, the region's refineries will continue to enjoy low input costs. It also means refineries that have access to Bakken oil will have a steady supply that's cheaper than their competitors.
This is why Marathon Petroleum Corp., the largest Midwest refiner, is a "Buy." (**)
Marathon Petroleum Corp.
Ohio-based Marathon Petroleum Corp. was formed July 1, 2011 when Marathon Oil Corp. (NYSE: MRO) spun off its highly profitable refinery and gas station business. It's the fifth largest petroleum refiner in the United States, with its six refineries offering a combined capacity of 1,142,000 barrels of oil per day.G! ary R. H eminger, Marathon's new chief executive officer, said his company has built a strong enough refining position in the Midwest to ward off competition. He doesn't expect new pipelines and rail yard capacity bringing oil from the Bakken to the Gulf Coast to soften his competitive edge. The oil still needs a high-volume consumer and his refineries are the most obvious choice.
"If you look at Midwest refineries, we already have plenty of pipeline capacity into our plants," Heminger said at the Reuters Global Energy and Climate Summit. "It really comes back to (West Texas Intermediate) and lighter-type crudes that are in and around Cushing [Oklahoma, where WTI is priced]. They're looking for a home."
Marathon also will profit from its operations beyond the Midwest.
It's negotiating with pipeline companies to use its Texas refinery to process more crude from the new Eagle Ford Shale. The new Eagle Ford is unconventional shale oil that's extremely light, and can be mixed with another cheap blend - a heavy, sour crude - to make a more expensive finished product.
Marathon's Detroit refinery is undergoing a $2.2 billion overhaul that'll let it process heavy Canadian crude, which currently is priced even cheaper than WTI.
Marathon also has a profitable retail footprint. It operates 5,100 Marathon-branded gas stations in 18 states and 1,350 Speedway-branded convenience stores in seven states. It has more than 9,600 miles of pipelines into and out of its facilities.
The new refining company has a market cap of $13.3 billion with an enterprise value of $14.6 billion once net cash and debt is taken into consideration. The company reported $66.8 billion in revenue over the last trailing 12 months.
Third quarter earnings released Nov. 1 showed a 309% increase in net income from 2010's third quarter to $1.13 billion. Earnings per diluted share rose to $3.16 from $0.77 last year. Marathon also announced Oct. 26 a 25% div! idend in crease, for a yield of 2.6%.
The company has historical price/earnings (P/E) ratio of 7.2 over the last 12 months with an estimated forward P/E ratio of 5.6.
Its stock has soared more than 17% in the past month, closing yesterday (Wednesday) at $37.02.
Action to Take: Buy Marathon Petroleum Corp. (NYSE: MPC) (**).
It's time to buy Marathon Petroleum Corp. as it positions itself to profit from low input costs and high refining capacity.
I would buy half of our position now at market price, with an eye toward selling naked puts contracts for the other half of the position. This would give you a chance to be exposed to the upside move while increasing the overall cash yield on your first-half position.
(**) Special Note of Disclosure: Jack Barnes has no interest in Marathon Petroleum Corporation. (NYSE: MPC).
It's time to buy Marathon Petroleum Corp. as it positions itself to profit from low input costs and high refining capacity.
I would buy half of our position now at market price, with an eye toward selling naked puts contracts for the other half of the position. This would give you a chance to be exposed to the upside move while increasing the overall cash yield on your first-half position.
(**) Special Note of Disclosure: Jack Barnes has no interest in Marathon Petroleum Corporation. (NYSE: MPC).
See what happens when the dead cat doesn't bounce in 2012
In Monday’s Daily Market Outlook, we examined charts of the S&P 500 and Nasdaq — two indices with a focused nature. The S&P 500 is generally considered to be the “best” 500 companies, while the Nasdaq is heavily weighted toward the technology sector. I concluded that it was likely that Friday’s rally resulted from the expiration of April options and was therefore a forced short-covering rally that could quickly turn into a dead cat bounce.
Today, we’ll look at charts of two of the broadest-based indices, the NYSE Composite, which is composed of all common stocks traded on the New York Stock Exchange, and the Russell 3000, which measures the performance of the largest 3,000 U.S. companies representing about 98% of all stocks traded in the United States.
The NYSE Composite chart shows a clear break of the 20- and 50-day moving averages following a strong sell signal from our internal indicator, the Collins-Bollinger Reversal (CBR). This coupled with a Moving Average Convergence/Divergence (MACD) sell signal (lower right) indicates that Friday’s rally was not sustained.
The only remaining bit of evidence to fully wrap it up for the bears would be a close under the green support line at about 8,220. A close under that line would confirm a breakdown from a double-top with a trading objective of about 7,900.
The Russell 3000 chart is similar to the NYSE, but shows twin CBR sell signals (strong bearish indicators). However, we require a close under the green support line at 770 to fully confirm a breakdown.
Neither chart supports the bulls, and both charts, as well as the ones of the S&P 500 and Nasdaq that we examined yesterday, closed below their respective 20- and 50-day moving averages.
Conclusion: The stock market is headed lower with objectives close to their respective 200-day moving averages (red solid line.)
Investors should remain on the defensive, selling into rallies, and traders should actively pursue bearish strategies. For one stock to sell or short, see the Trade of the Day.
Today, we’ll look at charts of two of the broadest-based indices, the NYSE Composite, which is composed of all common stocks traded on the New York Stock Exchange, and the Russell 3000, which measures the performance of the largest 3,000 U.S. companies representing about 98% of all stocks traded in the United States.
The NYSE Composite chart shows a clear break of the 20- and 50-day moving averages following a strong sell signal from our internal indicator, the Collins-Bollinger Reversal (CBR). This coupled with a Moving Average Convergence/Divergence (MACD) sell signal (lower right) indicates that Friday’s rally was not sustained.
The only remaining bit of evidence to fully wrap it up for the bears would be a close under the green support line at about 8,220. A close under that line would confirm a breakdown from a double-top with a trading objective of about 7,900.
The Russell 3000 chart is similar to the NYSE, but shows twin CBR sell signals (strong bearish indicators). However, we require a close under the green support line at 770 to fully confirm a breakdown.
Neither chart supports the bulls, and both charts, as well as the ones of the S&P 500 and Nasdaq that we examined yesterday, closed below their respective 20- and 50-day moving averages.
Conclusion: The stock market is headed lower with objectives close to their respective 200-day moving averages (red solid line.)
Investors should remain on the defensive, selling into rallies, and traders should actively pursue bearish strategies. For one stock to sell or short, see the Trade of the Day.
A123 Systems Expands Partnership With IHI Corporation to Meet Increasing Demand for Lithium Ion Battery Technology in Japanese Transportation Market
IHI to License A123’s Nanophosphate(R) Battery System Technology to Develop Solutions for Passenger and Commercial Electric Vehicles in Japan; IHI Will Make $25 Million Equity Investment in A123
WALTHAM, Mass., Nov. 7, 2011 (CRWENewswire) — A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate(R)lithium ion batteries and systems, today announced that it has expanded its business development partnership with IHI Corporation, one of the largest industrial equipment manufacturers in Japan, to more strategically meet increasing demand for A123’s solutions in the Japanese transportation market. A123 will license its battery system technology to IHI, which will develop solutions for passenger and commercial electric vehicles in Japan using A123 battery cells. In addition, IHI will make a $25 million equity investment in A123.
“Since first partnering with A123 in 2009, we have seen increasing interest in A123’s advanced lithium ion battery technology for transportation and other applications. We believe that expanding our partnership enables IHI to address this growing market opportunity by commercializing innovative solutions powered by A123’s batteries,” said Taizo Suga, Associate Director, General Manager, Corporate Development Division at IHI. “A123’s Nanophosphate lithium ion chemistry has proven to be among the highest-performing, most durable and longest lasting battery technologies we’ve seen, which we feel makes them optimal for vehicle electrification. We look forward to working closely with A123 as a technology partner, and we also believe our equity investment in A123 will demonstrate a meaningful commitment to our expanded strategic business relationship.”
Under the terms of a technology license agreement, IHI will be the exclusive provider of A123 battery systems and modules in the Japanese transportation market, licensing A123’s advanced battery system technol! ogy and systems integration expertise to manufacture solutions for electric vehicles. It is expected that this will enable A123 to leverage the customer relationships IHI has developed with leading Japanese automakers. A related product supply agreement also establishes A123 as the exclusive supplier of lithium ion battery cells to IHI for transportation as well as non-transportation applications that IHI may develop as a future value-added reseller, which has the potential of creating new market opportunities for A123 technology across IHI’s global businesses.
“IHI is a well-established technology supplier to the Japanese auto industry , so we believe that expanding our relationship provides us with a strong strategic partner to help us more effectively and efficiently deliver our solutions to the Japanese transportation market,” said Jason Forcier, vice president of the Automotive Solutions Group at A123. “Additionally, we believe that we have a competitive advantage as the exclusive provider of lithium ion battery cells to IHI for the licensed applications as well as potential additional applications beyond transportation, allowing us to capitalize on new market opportunities introduced by IHI’s robust global network of businesses.”
About A123 Systems
A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company’s proprietary Nanophosphate(R) technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please vis! it www.a 123systems.com.
Safe Harbor Disclosure
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the anticipated benefits of the expanded strategic business relationship, the market for alternative energy transportation in Japan and the timing of expected production and availability of IHI’s solutions based on A123’s system technology and their anticipated performance, benefits and features, as well as the expected demand by IHI for battery cells to be supplied by A123, and the expected performance of A123’s battery technology and lithium ion battery cells . Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in customer and market demand for and adoption ofIHI’s battery system products, delays in the development, production and supply of IHI’s products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and IHI operate and other risks detailed in A123 Systems’ 10-Q for the quarter ended June 30, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123’s expectations only as of the date of this release and should not be relied upon as reflecting A123’s views, expectations or beliefs at any date subsequent to the date of this release.
WALTHAM, Mass., Nov. 7, 2011 (CRWENewswire) — A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate(R)lithium ion batteries and systems, today announced that it has expanded its business development partnership with IHI Corporation, one of the largest industrial equipment manufacturers in Japan, to more strategically meet increasing demand for A123’s solutions in the Japanese transportation market. A123 will license its battery system technology to IHI, which will develop solutions for passenger and commercial electric vehicles in Japan using A123 battery cells. In addition, IHI will make a $25 million equity investment in A123.
“Since first partnering with A123 in 2009, we have seen increasing interest in A123’s advanced lithium ion battery technology for transportation and other applications. We believe that expanding our partnership enables IHI to address this growing market opportunity by commercializing innovative solutions powered by A123’s batteries,” said Taizo Suga, Associate Director, General Manager, Corporate Development Division at IHI. “A123’s Nanophosphate lithium ion chemistry has proven to be among the highest-performing, most durable and longest lasting battery technologies we’ve seen, which we feel makes them optimal for vehicle electrification. We look forward to working closely with A123 as a technology partner, and we also believe our equity investment in A123 will demonstrate a meaningful commitment to our expanded strategic business relationship.”
Under the terms of a technology license agreement, IHI will be the exclusive provider of A123 battery systems and modules in the Japanese transportation market, licensing A123’s advanced battery system technol! ogy and systems integration expertise to manufacture solutions for electric vehicles. It is expected that this will enable A123 to leverage the customer relationships IHI has developed with leading Japanese automakers. A related product supply agreement also establishes A123 as the exclusive supplier of lithium ion battery cells to IHI for transportation as well as non-transportation applications that IHI may develop as a future value-added reseller, which has the potential of creating new market opportunities for A123 technology across IHI’s global businesses.
“IHI is a well-established technology supplier to the Japanese auto industry , so we believe that expanding our relationship provides us with a strong strategic partner to help us more effectively and efficiently deliver our solutions to the Japanese transportation market,” said Jason Forcier, vice president of the Automotive Solutions Group at A123. “Additionally, we believe that we have a competitive advantage as the exclusive provider of lithium ion battery cells to IHI for the licensed applications as well as potential additional applications beyond transportation, allowing us to capitalize on new market opportunities introduced by IHI’s robust global network of businesses.”
About A123 Systems
A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company’s proprietary Nanophosphate(R) technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please vis! it www.a 123systems.com.
Safe Harbor Disclosure
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the anticipated benefits of the expanded strategic business relationship, the market for alternative energy transportation in Japan and the timing of expected production and availability of IHI’s solutions based on A123’s system technology and their anticipated performance, benefits and features, as well as the expected demand by IHI for battery cells to be supplied by A123, and the expected performance of A123’s battery technology and lithium ion battery cells . Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in customer and market demand for and adoption ofIHI’s battery system products, delays in the development, production and supply of IHI’s products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and IHI operate and other risks detailed in A123 Systems’ 10-Q for the quarter ended June 30, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123’s expectations only as of the date of this release and should not be relied upon as reflecting A123’s views, expectations or beliefs at any date subsequent to the date of this release.
McCann and His Team: Lots of Merrill Lynch
Bob McCann, the former head of Merrill Lynch's brokerage force, joined UBS in November 2009, when it had about 7,300 advisors in the Americas. And the recently hired head of wealth management for the Americas is now putting together a team to help him boost results.
In a January 19 memo, in which he describes his effort in forming a "Renewal Team," McCann says that leaders are being hired to make changes "in how we interface with our clients and financial advisors, with particular focus on streamlining processes, increasing efficiencies and driving the business forward."
The new hires and leadership shifts include:
- Bob Mulholland, formerly of Merrill Lynch, will now head UBS Americas' Wealth Management Advisor Group (replacing Jamie Prince);
- Brian Hull, another ex-Merrill Lynch executive, will head Wealth Management Partnerships;
- John Brown, head of Wealth Management Solutions;
- David Satler, chief of staff - as well as head of Human Resources; and
- Paula Polito, another Merrill Lynch veteran, is now chief marketing officer.
Other executive changes effect:
- Jamie Price, who moves to an advisory role for the firm, "working with Bob Mulholland and his team, while he considers new career opportunities;"
- Jim Hausmann, who has been serving as interim head of Products and Services for the past six months, will assume a leadership role in the new Wealth Management Solutions organization, reporting to John Brown; and
- Kim Jenson takes on a new senior role and will be responsible for Wealth Management Advisor communications, reporting to Paula Polito.
In a January 19 memo, in which he describes his effort in forming a "Renewal Team," McCann says that leaders are being hired to make changes "in how we interface with our clients and financial advisors, with particular focus on streamlining processes, increasing efficiencies and driving the business forward."
The new hires and leadership shifts include:
- Bob Mulholland, formerly of Merrill Lynch, will now head UBS Americas' Wealth Management Advisor Group (replacing Jamie Prince);
- Brian Hull, another ex-Merrill Lynch executive, will head Wealth Management Partnerships;
- John Brown, head of Wealth Management Solutions;
- David Satler, chief of staff - as well as head of Human Resources; and
- Paula Polito, another Merrill Lynch veteran, is now chief marketing officer.
Other executive changes effect:
- Jamie Price, who moves to an advisory role for the firm, "working with Bob Mulholland and his team, while he considers new career opportunities;"
- Jim Hausmann, who has been serving as interim head of Products and Services for the past six months, will assume a leadership role in the new Wealth Management Solutions organization, reporting to John Brown; and
- Kim Jenson takes on a new senior role and will be responsible for Wealth Management Advisor communications, reporting to Paula Polito.
Subscribe to:
Posts (Atom)