Stock Preacher

The United States is making a serious effort to increase the amount of electricity that’s generated by wind turbines grouped into wind-power “farms.” Attempts to harness the wind are part of a broader national, and global, commitment to “green” energy sources as a way of reducing dependence on Crude Oil and other fossil fuels for power generation. i.e Natural Gas and Coal. Other power sources include solar, geothermal, hydroelectric and nuclear for commercial electricity production, while automakers are looking at new types of batteries and such innovations as power-storing “fuel cells” as alternatives to the conventional internal combustion engines that power most of the world’s cars and trucks. The objectives are twofold. By decreasing the US reliance on foreign Crude Oil, the country is hedging against the time when global supplies of the “black gold” begin to dry up, an eventuality that will propel the prices of crude and gasoline skyward. Diversifying away from Crude Oil and, perhaps, even coal is also a way of reversing, or slowing, environmentally ruinous global warming. US President Barack Obama is attempting to use the ongoing financial crisis to create a sense of urgency about America’s energy future, a challenge that no prior administration has yet been able to meet. About one-third of President Obama’s US$800B + stimulus package will go to infrastructure, with US$30B allocated for US roads and highways and another US$10B earmarked for railways and mass-transit systems. President Obama has also proposed spending US$150 B “over the next 10 yrs to catalyze private efforts to build a clean energy future.” The administration also proposes to increase the amount of electricity that comes from renewable resources from 10% in 2012 to 25% by 2025 as reported in January 2008 in the WS-J.

Popularity: 1% [?]

Last week Goldman Sachs Group Inc. settled its US$10B debt with the US taxpayer; now, what will they do about Warren Buffett? Last year, Buffett’s Berkshire Hathaway Inc. invested US$5B in Goldman and acquired preferred shares and warrants to buy common stock, making Buffett’s presence large, because of his reputation for integrity and as one of the world’s savviest investors. So what will Buffett, now the 2nd wealthiest man in the United States do? “Basically not much,” said Vahan Janjigian, author of the book ‘Even Buffett Isn’t Perfect.’”He has a history of making fairly large investments in these kinds of companies and sitting back and letting the management team run the company.” Janjigian expects Buffett to sit tight as Berkshire collects US$500M of annual dividends on the preferred shares and earns paper profits on accompanying warrants to buy an additional US$5B of common stock at $115 per share for up to five years.

Popularity: 3% [?]

The benchmark S&P 500 should move back to its October 2007 record high above 1,500 by the end of 2012, provided the US economy sees a V-shaped recovery, JPMorgan Chase Chief U.S. Equity Strategist Thomas Lee said last Wednesday. “The global economy is in the midst of a synchronized recovery,” Lee said at the Reuters Investment Outlook Summit “If we end up with a V-shaped recovery, we could go back to our record high of 1,500 in 2011-2012,” he added, referring to the S&P 500. Lee also reiterated his year end 2009 target of 1,100 for the S&P 500, saying the United States will likely come out of its recession some time this summer, followed by the rest of the developed world. In October 2007, the S&P 500 hit a record closing high of 1,565.15, before falling back. In March of this year, it slumped to a 12-year closing low, but has rebounded by about 35% on hopes the recession that begun in December 2007 was moderating. Lee added that a market correction in the wake of the recent run-up would be “healthy,” and could lure back investors who opted to sit out the recent rally. “This rally has left many investors uninvested or underinvested. The pullback is the entry point to really see more meaningful money put to work,” said Lee, who has been named a top analyst in Institutional Investor magazine’s annual all-star poll. He favors the financials, industrials, technology and consumer discretionaries sectors, in that order, saying the sectors would be the biggest beneficiaries of an economic recovery. Within financials, he favors asset managers. The S&P financial index .GSPF is up 84 percent since the broader market’s 12-year low on March 9, 2009

Popularity: 3% [?]

The economic outlook is improving, but US stocks’ rally that began in March may run into an obstacle or two this week as investors will assess data on new and existing home sales that could point to whether the battered housing sector has bottomed, and they will keep an eye out for profit forecasts or warnings as Y 2009 Q-2 comes to a close. The US Fed is expected to leave rates unchanged after its two-day meeting ends Wednesday, but investors will check its statement for clues on the central bank’s economic outlook going forward.

Popularity: unranked [?]

The conventional wisdom is that retail investors, and not institutions, have powered the market’s rally off the March 2009 lows. Not so, says Charles Biderman, CEO of TimTabs Investment Research. The firm tracks the flow of money in and out of mutual funds. Since the start of May, he says, “U.S. equity funds have taken in a modest US$7.1B” despite improved performance. Instead, retail investors are plowing money into bond funds. Moreover, Biderman says that individuals did capitulate in the heat of the crisis, having been burned twice in the last ten years. The retail investor is not in the market yet, but history tells us that they will be, Biderman expects them to come in to the market in 2010.

Popularity: unranked [?]

The largest expansion of US health care since the creation of Medicare in 1965 may emerge from legislation designed to reshape the medical industry and change how Americans receive and pay for care. Congress today begins crafting legislation that Democratic leaders plan to push through both chambers by their August recess. The measure may require all Americans to get medical insurance, force insurers to accept all patients and end the tax break for employer-paid health benefits. These changes may be hammered out with unprecedented speed at the urging of President Barack Obama who, four days ago, said “this is the moment.” Obama has made a health-care overhaul his top domestic priority, using his February budget proposal to call it a “moral” imperative to extend coverage to the country’s 46 million uninsured. Obama also tied the long-term fiscal soundness of the US to controlling medical costs. Health care consumes 18 percent of the US economy and may rise to 34% by 2040, the White House Council of Economic Advisers reported June 2. “I don’t think we’ve ever had anything this large in American history aimed to go this quickly that touches everybody’s lives,” said Robert J. Blendon, a professor of health policy and political analysis at Harvard University in Cambridge, Massachusetts, in a telephone interview. “They’re moving at a pace we’ve never seen before.” The US will spend more than US$2Tthis year on health care, the Health and Human Services department reported in February. Today, the Senate Health committee will begin debating a bill that includes “gateways” where consumers may compare coverage plans. The Senate Finance Committee later this week will unveil a bill that among its provisions will call for taxes on health benefits, and House committees will release a draft of their own comprehensive measure that would create a government-backed plan to compete with private insurance.

Popularity: unranked [?]