Wednesday, January 26, 2011

Pavlov’s bulls: 2011 and Beyond

Jeremy Grantham has become a familiar and very popular face on this site. For those treasuring his insight, wisdom and prescient calls, the co-founder and chairman of Boston-based GMO has just published the January edition of his quarterly newsletter entitled “Pavlov’s Bulls!”.


Here is his opening paragraph:

“About 100 years ago, the Russian physiologist Ivan Pavlov noticed that when the feeding bell was rung, his dogs would salivate before they saw the actual food. They had been “conditioned.” And so it was with “The Great Stimulus” of 2008-09. The market’s players salivated long before they could see actual results. And the market roared up as it usually does. That was the main meal. But the tea-time bell for entering Year 3 of the Presidential Cycle was struck on October 1. Since 1964, “routine” Year 3 stimulus has helped drive the S&P up a remarkable 23% above any infl ation. And this time, the tea has been spiced with QE2. Moral hazard was seen to be alive and well, and the dogs were raring to go. The market came out of its starting gate like a greyhound, and has already surged 13% (by January 12), leaving the average Year 3 in easy reach (+9%). The speculative stocks, as usual, were even better, with the Russell 2000 leaping almost 19%. We have all been well-trained market dogs, salivating on cue and behaving exactly as we are expected to. So much for free will!”

He concludes as follows:

Looking Forward

• Be prepared for a strong market and continued outperformance of everything risky.

• But be aware that you are living on borrowed time as a bull; on our data, the market is worth about 910 on the S&P 500, substantially less than current levels, and most risky components are even more overpriced.

• The speed with which you should pull back from the market as it advances into dangerously overpriced territory this year is more of an art than a science, but by October 1 you should probably be thinking much more conservatively.

• As before, in our opinion, U.S. quality stocks are the least overpriced equities.

• To make money in emerging markets from this point, animal sprits have to stay strong and not much can go wrong. This is possibly the last chapter in a 12-year love affair. Emerging equities seem to be in the early stages of the “Emerging, Emerging Bubble” that, 3½ years ago, I suggested would occur. How far a bubble expands is always anyone’s guess, but from now on, we must be more careful.

• For those of us in Asset Allocation, currencies are presently too iffy to choose between. Occasionally, in our opinion, one or more get far out of line. This is not one of those occasions.

• Resource stocks, as in “stuff in the ground,” are likely to be fine investments for the very long term. But short term, they can really ruin a quarter, and they have certainly moved a lot recently.

• We think forestry is still a good, safe, long-term play. Good agricultural land is as well.

• What to watch out for: commodity price rises in the next few months could be so large that governmental policies in emerging countries might just stop the global equity bull market. My guess, though, is that this is not the case in the U.S. just yet.

Things that Really Matter in 2011 and Beyond (in one person’s view) for Investments and Real Life

• Resources running out, putting strong but intermittent pressure on commodity prices

• Global warming causing destabilized weather patterns, adding to agricultural price pressures

• Declining American educational standards relative to competitors

• Extraordinary income disparities and a lack of progress of American hourly wages

• Everything else.

Source: Jeremy Grantham, GMO, January 2011.


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

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Thursday, January 20, 2011

Rosenberg's 2011 Outlook and Beyond

For those who follow my Blog, you know just how much respect I have for this man and his views. To date I have only posted upbeat outlooks and predictions of where things are to head in 2011 - Rosenberg paints - as he is customary to - a different picture, backed by hard fact.

We have an incredible bear market rally on our hands. History shows that these spasms can go further than anyone thinks. But after the U.S. market staged a monstrous 80-per-cent-plus rally from its March, 2009, lows (the most pronounced bounce in such a short time since 1955), it has become seriously overextended. Meanwhile, practically every pundit is extrapolating the recent trend into the future because that is the easy thing to do.


Most investors see only the recent returns; they do not see the nearly invisible risks. But the risks are there. I recall all too well the 2003-07 bear market rally – yes, that is what it was. It was no long-term bull run such as 1949-1966 or 1982-2000. It was a classic bear market rally, and it ended in tears because what drove the market upward was phony wealth generated by a non-productive asset called housing alongside widespread financial engineering, which triggered a wave of artificial paper profits.

‪Remember, returns only count if they aren’t ultimately reversed by excessive greed. Right now, I believe clients are well served by equity strategies that focus on stocks of high quality companies and by investments in both hard assets and income-producing securities. Also good are long-short strategies (vital in controlling risk in the portfolio) and a concentration on fixed-income products (outside of commodities, deflation in the developed world remains the primary trend – against such a backdrop, searching for yield makes perfect sense).‪

‪ As far as equities are concerned, the current bear market rally is likely at the very late stage. Few people will know to get out at the peak and as we saw in late 2007 and into 2008, many investors will be trapped in a falling market. Bear market rallies are not the same as secular, or long-term, bull markets – the former are to be rented, the latter are to be owned.

‪This is not the 1949-66 secular bull market, which was underpinned by troops coming home and spurring on a baby boom that would unleash years of tremendously strong domestic demand growth. The demographics in the U.S. are now downright poor – just look at the dwindling ratio of the working age population to the total population.

Nor is this the 1982-2000 secular bull market that began when the U.S. Federal Reserve ushered in years of disinflation. (The current Fed is trying desperately to create inflation.) That market floated higher on a wave of innovation that saw the mainframe, the personal computer, the Internet and then the cellphone transform many businesses. At the same time, a boom in the capital stock enhanced productivity growth and led to sustained gains in private sector economic activity, which by the end of that bull run allowed the government to actually start to record budget surpluses.

What is the major innovation today? The iPod? The iPad? Facebook? These may be fun, but they don’t do much to promote the growth rate in capital stock or productivity. ‬

‪What we have on our hands is an economic revival and market bounce premised on unprecedented monetary and fiscal stimulus. How the Fed and the U.S. federal government will manage to redress their swollen balance sheets without creating a major disturbance for the overall economy is a legitimate question. Under such conditions, the market does not deserve to trade at a double-digit multiple of earnings. ‬

‪Just as the 2003-07 bear market rally was built on a shaky foundation of unsustainable credit and house price appreciation, the current bear market rally has been built on even shakier ground of surreal public sector intervention. This may well have “saved the system” or “prevented a depression” back in the opening months of 2009, as many like to believe. However, the reality (and even former Communist regimes figured this out a few decades ago) is that there is no such thing as a free lunch. ‬


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

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Wednesday, January 19, 2011

China’s Stock Market Set for Big Gains in 2011

Low valuations and lots of sidelined cash point to a rally in bank, energy and industrials.


Chinese stocks are poised to advance by nearly 40% in 2011,

according to Standard & Poor’s Equity Research (ERS)-Asia, amid

a broad market rally and a global economic recovery.


“On valuation grounds, China and Hong Kong markets are still

attractive in our view,” according to S&P ERS-Asia’s Hong

Kong/China 2011 outlook. S&P ERS-Asia says that a

combination of high levels of cash and attractive stock valuations

should boost the Shanghai Composite by 38.8% from January

3, 2011 levels to finish 2011 at 3,900.


Investors will likely reduce their holdings in bonds and take larger

positions in stocks in 2011, according to S&P ERS-Asia, which

notes that retail participation is still limited in the stock markets

but that liquidity is ample. “We expect that there is room for

equities to gain favor with investors particularly on rotation

out of fixed-income into stocks,” S&P ERS-Asia writes.


S&P Economics expects China’s gross domestic product to expand by

8.5% to 9% in 2011, down from its estimate of 9.7% to 10.2%

growth for 2010.


Sector Recommendations

On a sector-specific level, the energy and industrials sectors will

likely be leading the advance in 2011. S&P ERS-Asia recommends

an overweight position in the China energy sector. S&P expects

world oil consumption to grow by 1.7% in 2011 over 2010, much of

this stemming from strong growth from China and other emerging

markets, especially those not included in the Organization for

Economic Cooperation and Development (OECD).


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

http://www.everyoneweb.com/saveriomanzo/     http://saverio-manzo.jimdo.com/   http://saverio-manzo.yolasite.com/   http://saverio-manzo.webs.com/  http://saverio-manzo.weebly.com/   http://saveriomanzo.terapad.com  http://www.shareowners.org/profile/SaverioManzo  http://www.linkedin.com/pub/saverio-manzo/b/995/63  http://twitter.com/saveriomanzo   http://www.facebook.com/people/Saverio-Manzo/854720596?ref=search

Wednesday, January 12, 2011

The Road Ahead: The Investment Outlook For 2011

Canadian investors got off to a slow start in January, but with markets rallying since July 2010, the New Year slowdown looks pretty tame.

The economists have had their turn, prognosticating on GDP growth for 2011, and with the recession now well behind us, the question is “How do I invest for 2011?”

Here’s what money managers have told us.

Canadian equity bull has room to run - By Vikram Barhat
It’s the time of year when investment experts get busy writing commentaries and fashioning forecasts. With one eye on the road ahead, and the other looking in the rear view mirror, here’s their vision of Canadian equities for 2011.

Bonds face challenges, but no bubble – By Steven Lamb
The crisis of 2008-09 sent investors on a mad search for safety and a huge number of them sought refuge in bonds. Fixed income led mutual fund sales since the crisis, driving the price of bonds higher and yields lower. Some have suggested fixed income poses a threat as the next bubble.

Bias for U.S. equities is positive - By Brenda Craig
The U.S. economy has been walking around in a daze since it fell off that cliff in 2008, but if America can get its mojo back, 2011 could prove to be a turn around year.

Global investing lowers risk – By Diana Cawfield
When it comes to investing in international equities, the forecast for 2011 finds a mix of challenges and opportunities on the horizon. Turmoil in Europe, and inflationary concerns in emerging markets may pose risks, but consumption spending and prudent companies offer a promising outlook.

Global recovery to drive commodities - Bryan Borzykowski
This past year has been a wild one for commodities — gold reached all time nominal highs, oil climbed from around $70 to almost $90, while natural gas bas barely budged from a low $4. Fortunately for investors, the outlook for 2011 is less volatile; commodity prices should be on their way up.

Does the loonie still have room to fly? - By Al Emid
It might be the riskiest financial forecast of all: currency. The stakes are a huge. Get it wrong, and your foreign content allocation can implode. Get it right, and you’ll enjoy a multiplier effect on those out-of-county assets.
Filed by Staff, editor@Advisor.ca


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

http://www.everyoneweb.com/saveriomanzo/     http://saverio-manzo.jimdo.com/   http://saverio-manzo.yolasite.com/   http://saverio-manzo.webs.com/  http://saverio-manzo.weebly.com/   http://saveriomanzo.terapad.com  http://www.shareowners.org/profile/SaverioManzo  http://www.linkedin.com/pub/saverio-manzo/b/995/63  http://twitter.com/saveriomanzo   http://www.facebook.com/people/Saverio-Manzo/854720596?ref=search

Wednesday, January 5, 2011

Off With Our Heads!

The mating rites of mantises are well known: a chemical produced in the head of the male insect says, in effect, “No, don’t go near her, you fool, she’ll eat you alive.” At the same time a chemical in his abdomen say, “Yes, by all means, now and forever yes.”


While the male is making up what passes for his mind, the female tips the balance in her favor by eating his head. The male, absorbed in the performance of his vital functions, holds the female in a tight embrace. But the wretch has no head – he has hardly a body. And, all that time, that masculine stump, holding on firmly, goes on with the business!

–Annie Dillard, Pilgrim at Tinker Creek

If you’re ever in the mood for a glimpse of raw nature that closely parallels the human condition, read Annie Dillard’s Pulitzer Prize winning Pilgrim at Tinker Creek. We are all, in her well-documented tale, mantises eating and being eaten, mindlessly thrusting and flailing about in activity that would make little sense to a visitor from another space-time. What mimics the pelvic thrust of the male mantis is really the struggling ego of the human being, stretching for more habitable space, gasping (metaphorically) for purer air, reaching for dominance over what we know not. Herman Melville, speaking through the visage of Captain Ahab in Moby-Dick, writes that “all mortal greatness is but a disease.” The egos that seek renown, however, are hard to kill and expert at masquerading and wearing disguises. Even those advocating or living by the Golden Rule can be held suspect to some chemical – this time above the belt – that says, “Look at me, look at me.” Presidents, Dalai Lamas, and yes, bond managers are more than likely infected and affected as opposed to philanthropically or altruistically directed and intentioned.

If so, I’m not sure how one escapes from the philosophical darkness of this self-described “Tinker Creek.” Eastern religions speak to seeking the Buddha mind – an “unconscious” consciousness that supposedly confirms an “inner worldly” worldliness. Theoretically this can lead to Nirvana, which is the absence of ego – an antibody against Ahab’s mortal disease. “Nirvana” it is said, “soars on wings that whisper.” Perhaps, but almost all of us come into this world screaming and the decibels diminish but never really whisper as the chemicals of old age work their will. We are all, more than likely, doomed to be mantis-like – some of us eating, some of us being eaten, but none quite aware as to why we are at the dinner table in the first place.

Americans, unlike their developed world counterparts, have been eating their fill lately, and supping at a dinner table laden with pork and tax breaks for all. Unequivocally, we have been playing the part of the female mantis, munching on the theoretical heads of future generations, while paying no mind to the wretches that will eventually be called upon to pay the bills.

I liked the op-ed on this subject by comedian Larry David in The New York Times the other day. He thanked Congress and, of course, President Obama for being able to afford more blueberries in his granola. Job creation for more berry pickers would be Washington’s convoluted rationale, I suppose. But, if so, they will assuredly be temporary instead of permanent jobs and the $800-$900 billion price tag may add up to 3% of GDP to the U.S. deficit annually for which future wretches will thrust headlessly to service. The American hegemon knows no limits, it seems, when it comes to spending other people’s money for their own consumption. Unlike Euroland or the United Kingdom, which appear to have gone on an extreme fiscal diet, the American answer to a bulging waistline is always “maƱana.” Debt commission recommendations are tossed in the trashcan, tea party election rhetoric eventually focuses on miniscule and merely symbolic earmarks, and both Democrats and Republicans congratulate each other on their ability to reach a bipartisan agreement for the good of the nation. Munch! Munch! Off with our heads!

The problem is that politicians and citizens alike have no clear vision of the costs of a seemingly perpetual trillion dollar annual deficit. As long as the stock market pulsates upward and job growth continues, there is an abiding conviction that all is well and that “old normal” norms have returned. Not likely. There will be pain aplenty and it’s imperative that we recognize now what the ultimate cost of blueberries will mean for American citizens of tomorrow. Four major factors come to mind:

1. American wages will lag behind CPI and commodity price gains.

Because policy stimulus is focused on maintaining current consumption as opposed to making the United States more competitive in the global marketplace, American workers’ real wages will almost necessarily lag historical norms. Chart 1 points out the graphical evidence of an erosion of labor’s share of the American economic pie, falling from 62% of GDP just recently to a current anemic 58%. Blame it on poor education, blame it on globalization, but an ongoing rebalancing of rich country/poor country wages inevitably will keep U.S. wages compressed as deficit spending serves to reflate commodity and end product prices in future years but not paychecks. Americans will feel the pain but like the male mantis, probably not understand why they’ve lost their head.

2. Dollar depreciation will sap the purchasing power of U.S. consumers, as well as the global valuation of dollar denominated assets.

Unique amongst almost all other global citizens, Americans are ignorant of the merits (and the negatives) of currency depreciation. Unless they are smacked with the reality of an expensive hotel or a meal in a foreign port of call during summer vacation, we have few concerns when the dollar depreciates against a basket of foreign currencies. If our stock market goes up 10% annually in dollar-denominated terms, we assume we are 10% richer even if the dollar sinks at the same time. If the cost of imported goods and especially gasoline goes up more than our paychecks, we blame it on a political conspiracy. The fact is that annual budget deficits in the trillions of dollars add a like amount to the stock of outstanding dollars, resulting in currency depreciation, higher import inflation, and a degradation of dollar based assets in global financial markets. We become less, not more wealthy, losing our heads while we “hold on firmly and go on with (our) business”!

3. One of the consequences of perpetual trillion dollar deficits is the need to finance them, and at attractively low interest rates for as long as possible.

Currently, the Fed is doing both, holding short term interest rates near zero, and engaging in Ponzi like Quantitative Easing II purchases of longer dated Treasuries in the open market. The combination offers bondholders about as an attractive situation as the one facing a male praying mantis: zero percent interest rates if you stay in cash, or probable principal losses if you take durational risk by buying 5 and 10 year maturities. Eventually, as reflationary policies take hold, long-term bondholders lose their heads (and a portion of their principal as well), as yields rise to reflect higher future inflation. Bondholders’ metaphorical warning: “don’t go near those longer term bonds you fool.”

4. Trillion dollar annual deficits add up, and eventually produce a stock of debt that can become unmanageable: witness Greece, Ireland, or a host of Latin American countries of generations past.

According to Carmen Reinhart and Kenneth Rogoff’s excellent research in This Time Is Different, once a country’s debt approaches 90% of GDP (as the U.S. is now doing), its economic growth slows by up to 1% annually as the interest payments drain resources that should be going for productivity enhancements. Sovereign credit risk increases and yield spreads rise relative to global competitors. Future generations pay the price for their parents’ mindless thrusting.

Investment Implications

1. An astute mantis-like investor must defer immediate gratification, make a 180˚ turn from that sexy looking female with those long green legs (long term bonds) and mend his ways fast! It is still possible to earn an attractive return from bond strategies (such as PIMCO’s Total Return strategy in 2010), and the way to do it is to focus on “safe spread” that emphasizes credit, as opposed to durational risk.

2. These “safe spreads” include: emerging market corporates and sovereigns with higher initial real interest rates and wider credit spreads; floating as opposed to fixed interest obligations; and importantly currency exposure other than the dollar.

3. For those inclined to lunch on stocks, remember to go where the growth is – developing as opposed to developed markets. If the U.S. must pay an eventual price for mindless deficit spending, then find countries and currencies that appear to have their act under control: Canada, Brazil, and yes even Mexico with its drug related violence. Mexico has a net national savings rate that exceeds our own by 20% of GDP.

4. Above all, remember that all investors should fear the consequences of mindless U.S. deficit spending as far as the mantis eye can see. Higher inflation, a weaker dollar and the eventual loss of America’s AAA sovereign credit rating are the primary consequences. Fear your head – fear your head.

by William H. Gross, Managing Director, PIMCO


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

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Tuesday, January 4, 2011

What history tells us: 2011

If history is any kind of guide, this could be a decent year for stocks.

Add a grain or two of salt to that. If the financial meltdown, the recession, Europe’s debt crisis, and the ups and downs of the recovery have taught us anything, it’s that nothing is a given, and that one bad number or credit downgrade can burst the hopes of investors dreaming of heady days. Some believe the market is running ahead of itself anyway.

So with that in mind, here’s some trivia to mull over today as global markets continue to rally:

* Since 1945, when the S&P 500 has gained on the first trading day of the year, the index has been up 74 per cent of the time for an average gain of 10.6 per cent, says Cleve Rueckert, equity strategist at Birinyi Associates.
* Historically, the third year of a U.S. administration has generally been a positive one for stocks, Malcolm Polley, president of Stewart Capital Advisors, tells the Wall Street Journal.
* Over about the past eight decades, when the S&P 500 climbed in January, it gained on the year 73 per cent of the time, Howard Silverblatt, senior index analyst at S&P, tells the Journal.
* A rise in the S&P 500 over the first five days of the year has been followed by annual gains almost 90 per cent of the time, according to the Stock Trader’s Almanac and reported by The Associated Press.

For some, January is a barometer of sorts for the year. Of course, we’re just one day in, and it was a good one, boosted by U.S. economic data and continuing on December’s hefty gains, which were the best since 1991. The S&P 500 climbed 1.1 per cent and the Dow Jones industrial average 0.8 per cent. Canadian markets were closed.

Yesterday, Citigroup boosted its target for the S&P 500 to about 1,400 for this year. That’s up from an earlier projection of 1,300 and would mark an increase of more than 10 per cent from where the index closed out 2010. The U.S. bank also sees the Dow reaching 13,500, which would mean a gain of about 14 per cent.

But helping stocks along yesterday was the “January effect” that traditionally sees investors putting cash into retirement savings and asset managers acquiring stocks they believe will do well, according to Reuters, so the gauge is obviously questionable. There was also the December run-up to keep in mind.

“I do think that the best December for equities in almost 20 years has likely brought forward some of the performance we might typically see in January, so I expect the pace of the market’s advance to slow,” David Joy, chief market strategist at Columbia Management, told Reuters.

* U.S. economy stirs again, but recovery won't be vigorous
* Bull v. Bear: The outlook for 2011

Loonie on a roll
The Canadian dollar is starting off the year in fine fashion, continuing to trade above its U.S. counterpart.

That's a far cry from the days of 40 or so cents ago when the loonie was dubbed the Hudson Bay Peso and Canada, with its public finances in a mess, was deemed a basket case.

Analysts believe the loonie will continue strong throughout the year, buoyed by a stronger economic outlook, high commodity prices and a weaker U.S. dollar.

* Why 2011 could be year of the loonie
* Goldman sees loonie reaching $1.05

Coal prices rise

Coal prices are at a two-year high today, though floodwaters are receding somewhat in Australia's key mining area.

Some mines are slowly bringing production back, Reuters reports, though most remain shuts in the wake of the stunning floods in Queensland state, the world's largest exporter.

"Due to wet weather/flooding, the largest producers in Queensland have in the past month declared force majeure," UBS analysts said in a research note today, citing several companies including BHP Billiton, Xstrata, Rio Tinto and Vale, among others, and noting that the floods have affected both mines and rail lines.

"The flooding in Queensland will disrupt the supply of metallurgical coal the most followed by thermal coal," they wrote. "As explained, it is not possible at this stage to estimate the volume impact, as further wet weather could prolong the disruption."

The analysts also said that the "ideal equity exposures" to higher prices are those companies with large interests in metallurgical coal, but with no impact on volumes. In Canada, they cited Teck Resources , Western Coal , and Grand Cache Coal .

* Australia floods hit commodity exports

Israel debates energy tax
Israelis want their share of profits from gas discoveries off the Mediterranean coast.

Israel's parliament today is discussing a hike in energy taxes while demonstrators outside want an even higher increase.

The move follows an announcement by Noble Energy Inc. last year that its Leviathan field is estimated to hold 16 trillion cubic feet of gas, a massive find.

Yesterday, a government committee proposed boosting its levy from its current 30 per cent to up to 62 per cent. While energy companies are, of course, fighting such an increase, some Israelis want an even bigger hike.

* Huge gas find a boon for Israel

Buffett locks in the mortgageWarren Buffett's Berkshire Hathaway is selling debt to lock in low rates and using the money to retire floating rate debt on a bet that it's not going to get better from here for bond yields, Streetwise columnist Boyd Erman writes today.

Source: Michael Babad, Report on Business


.

About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

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Sunday, January 2, 2011

2011 OUTLOOK: Intro to Annual Consensus of Predictions

Our 2010 OUTLOOK: Markets, Interest Rates & Commodity price CONSENSUS OPINIONS proved to be remarkably accurate. While I won’t dwell on the past, as we are a forward-looking opinion sharing Blog, I will say that that the old axiom of “be weary of following the crowd” certainly did not hold true for 2010. The wide consensus of positive market outlook for 2010 came in almost as predicted.


So what are the brightest pundits saying about 2011’s outlook? Today we begin with the first of several views. Expect to see the outlook and opinions of Wall Street, Bay Street, and global research documents - many of the very best outlooks on what to expect for the coming year. And not just fro anyone, these managers are recognized as the world’s brightest minds – those with proven track records.

Each day over the course of the next few weeks expect to see a prediction from one of these guru’s and before month’s end I will summarize and chart all of these views in my annual OUTLOOK 2011 CONSENUS REPORT.

To date I heave received no less than 12 reports, and here’s where we stand thus far:

  • A wide consensus of investment managers were accurate in expecting 2010 to end on a high note, and now largely share the opinion that this trend will continue into the first quarter of 2011.
  • A whopping 82% of managers said they were bullish on the S&P/TSX for next year. The percentage of managers expressing bearish sentiment fell from 31% in the third quarter, to just 15% in the Q4 survey.

  • Nearly one-in-three believe the returns on the S&P/TSX will be 10% or higher.

We’re hoping that this report will help you in having a happy and prosperous 2011. Happy New Year to all.


Saverio Manzo


About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

http://www.everyoneweb.com/saveriomanzo/

http://saverio-manzo.jimdo.com/
http://saverio-manzo.yolasite.com/
http://saverio-manzo.webs.com/
http://saverio-manzo.weebly.com/
http://saveriomanzo.terapad.com
http://www.shareowners.org/profile/SaverioManzo
http://www.linkedin.com/pub/saverio-manzo/b/995/63
http://twitter.com/saveriomanzo
http://www.facebook.com/people/Saverio-Manzo/854720596?ref=search