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December 31, 2010

FOMC to have more hawkish membership in 2011

Filed under: Central Banks — Tags: , , , , — admin @ 5:30 pm

The regional Fed presidents are all members of the Federal Open Market Committee, the rate-setting body of the Federal Reserve Board. Not all members have a vote every year, however. Only the president of the New York Fed has a permanent vote and also serves as the Vice Chair of the committee. The membership of the committee changes on January 1 of each year.

The Federal Open Market Committee consists of twelve voting members: the seven members of the Board of Governors and five of the twelve Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves on a continuous basis; the presidents of the other Reserve Banks serve one-year terms on a rotating basis beginning on January 1 of each year. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco.

All of the Reserve Bank presidents, even those who are not currently voting members, attend FOMC meetings, participate in the discussions, and contribute to the assessment of the economy and of policy options.

The new votering members of the committee are on balance more hawkish than most District presidents.

Uber-Hawk Tom Hoenig loses his vote, is being replaced by the middle of the road head of the Minneapolis Fed. Locherlakota.

Dove Pianalto from Cleveland is being replaced by dove Evans of Chicago.

The hawkish Dick Fisher of Dallas is replacing the quixotic Bullard who tiled from hawkish at the begiing of 2010 to the father of QE2 by the end…

Boston’s dovish Rosengren will be replaced by Philadelphia hawk Plosser.

What does the more hawkish tilt to the voters mean? Diddly.

Hoenig is by far the most hawkish member of the committee, voter or non-voter. At most, we may see once of the hawks assume the role of loyal opposition to super-easy policy…

The FOMC governs by consensus with the Chairman usually setting the tone. It has been that way for more than 30 years and is unlikely to change anytime soon.

USD/JPY- Bullish Signal

Filed under: Forex News — Tags: , , — admin @ 3:16 am

By Anton Eljwizat

The USD/JPY pair saw quite a consistent bearish trend during the past few weeks. The pair lost about 300 pips since December 16th, falling from the 84.40 level to the 81.40 level today. However, after the pair failed to breach through the 81.40 level it began correcting itself, and is now trading near the 81.60 level. The bullish correction is likely to extend today, with potential to reach the 82.00 level.

• The chart below is the 4-hour chart USD/JPY by ForexYard.

There is a very distinct bearish channel formed on the 4-hour chart, and the pair is now floating in its bottom.

• The pair recently reached as high as the 84.20 level, yet this appears to have initiated a mild bearish correction.

• The Slow Stochastic has just completed a bullish cross above the 20-line, indicating that a bullish correction might take place.

• In addition, The RSI signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

• The next support levels are located at the 81.20, 80.80 and 80.50 levels.

• The next resistance levels are found at the 81.90, 82.30 and 82.70 levels.

USD/JPY 4-Hour Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

My Trading Outlook for SP500, Oil & Gold in 2011

Filed under: Forex News — Tags: , , , , — admin @ 3:14 am

By J.W Jones, OptionsTradingSignals.com

The end of 2010 is rapidly approaching and the pundits and commentators continue to make their 2011 market predictions. I for one believe predicting future market moves is a futile endeavor where if you are right one year later you are viewed as a sage; if you are wrong nobody seems to remember or care.

In fact, I try not to read any predictions for fear that it might place a bias in my subconscious. I am a trader and thus have no need for emotions, bias, or opinions when trading. I try to stay away from the media and the pundits as often as possible.

With that being said, the managed money crowd will be finishing up their window dressing and the performance anxiety of 2010 will slowly shift to assessing their portfolio risk and making appropriate adjustments for the coming year. Based on current market sentiment it would make sense that most money managers are bullish as cash levels remain quite low when looking at mutual funds and institutional money managers’ portfolios.

S&P 500

The S&P 500 is extremely overbought in almost every time frame and headline risk remains high. At current price levels I would not be interested in being long the S&P 500, in fact I would likely be taking some money off the table before 2011 rolls in.

I think opportunities are going to present themselves in 2011 for outstanding longer term entries into the equities market, however a disciplined approach will be required. Headline risks such as continued monetary and fiscal issues in the Eurozone, municipal budget concerns and potential defaults, potential for rising interest rates, inflation / deflation, and rising energy prices to name just few. Unfortunately some, if not all of the headline risks listed above will likely come to pass. Having fresh capital ready to deploy and developing a trading plan ahead of time for solid entry points will likely lead to a positive trading outcome in 2011.

I believe there are going to be some outstanding trading setups in 2011 regardless of market conditions or economic factors, but in order to be prepared we need to have trading capital available and a trading plan prepared. The weekly chart below illustrates some key support levels on the S&P 500 e-mini contract.

At some point in the future, the S&P 500 is going to suffer from a correction and I intend to be prepared to take advantage of lower prices in my longer term investment accounts as well as in my short term option trading accounts. While I am generally a contrarian when sentiment and bullishness are this high, deep down I am hopeful that the economic recovery continues. However, I am not blind to believe that the worst is over and it is smooth sailing from here. There is nothing about financial markets that is ever easy, and when the directional bias is this strong I tend to step back and develop contrarian strategies just in case the crowd is wrong.

Oil

I try to stay away from opinions and focus on facts when conducting analysis regarding financial markets. However I am going to break my rule briefly to point out that in my humble opinion, the single largest threat to the U.S. domestic economy is not unemployment or housing, but energy. If energy prices continue rising, it causes nearly everything to rise in price in the United States as producers and manufacturers pass down rising fuel costs to the consumer. Essentially we have leveraged the ability to support our substantial population and tremendously high standard of living with the ability to use cheap and plentiful oil.

Some of the reasons that oil prices could rise have fundamental and technical foundations. From a fundamental standpoint, supply appears to be declining and will continue to decline going forward unless some oil fields that are currently unknown are discovered and make available immense supplies of oil. Additionally, the basic principles of supply and demand are present as emerging market countries are needing more and more energy to keep their economies growing and to satisfy the concurrent rising standard of living. Countries like China, India, and Brazil are only going to see their need for energy increase and other countries in the world need to recognize that demand is rising and supply is falling.

While the argument among economists rages on regarding inflation versus deflation, if inflation were to rise suddenly this would also be bullish for energy. Most investors may not have considered that oil prices are over $90/barrel and the economy is relatively sluggish. Where would prices be if the economy were to boom in 2011?

From a technical standpoint, the Great Recession pushed oil down from the all time highs in 2008. Many economists believed that the rise in oil prices is what really caused the market to crater in early 2009. If we view a weekly chart of oil, it would appear that we are continuing to trend higher and that in the longer term this trend will likely persist.

I would be shocked if oil prices do not reach at least $100/barrel in 2011. Some analysts are saying that it could reach $115-$120 by the summer and could probe all time highs as early as 2012. The fundamental and technical analysis is mutually supportive and in the longer term I think rising energy prices is not only a near certainty, but also a major threat to the global recovery.

Gold

The recent pullback offered a nice entry around the $133/share on GLD. In full disclosure, I purchased GLD around 133.25 and sold a slew of naked puts on silver and gold which I have closed for solid gains. Argument surrounds gold and silver as economists bicker over whether we are going to see hyperinflation or deflation in 2011. I for one do not know or claim to know. What I do know is that gold appears to be nearing a final wave of buying which could push it to all time highs.

However, I do believe without question that the volatility in the price of gold is likely to increase dramatically. Large price swings are likely in 2011 as headline risks will drastically impact the price of gold and silver and cause volatility to increase. While this is somewhat speculative, the various headline risks in Europe and in the United States will have a significant impact on precious metals prices.

Gold continues to trend higher and fighting the trend makes little sense and could be a great way to lose precious trading capital. I will continue to play the rising trend until it fails which at some point in the future is inevitable. Neither gold, nor any other asset can continue rising forever. A pullback at some point is not only likely, but would be healthy. Obviously gold remains in a bullish uptrend as illustrated by the weekly chart below:

I do believe that gold is a solid hedge against currency risk and higher inflation based on recent price action, but I am not willing to buy into the world is ending philosophy that many gold bugs envision.

I do not believe that the entire financial construct will fail and that a barter system will be created with gold becoming currency. Through a variety of emails from all over the world I have been presented with all kinds of analysis and data that all fiat currencies fail, that gold is a store of value, and that gold will protect investors from currency manipulation and inflation. While all of these things may be true, I am unwilling to abandon hope for peace, prosperity, and a better future.

Conclusion

I am optimistic about the domestic and global economy in the long term. I believe that great opportunities for long term investment will be offered in 2011 and I intend to take advantage of the price action. I am an options trader at heart, but in the end I am an eternal optimist. Being pessimistic is not only depressing, but it offers very little in the form of solutions. Consequently an absolute pessimistic forward looking view serves to only create biases that are not conducive to success in financial markets. Let’s forget about predictions and pundits and focus on what really matters – price action.

If you would like to receive my Free Options Strategy Guide & Trade Ideas join my free newsletter: www.OptionsTradingSignals.com/profitable-options-solutions.php

J.W Jones

euro near weekly highs, following commodities

Filed under: Technical Analysis — Tags: , , , , , — admin @ 3:07 am


Quote of the day: “Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.” – Milton Friedman

EURUSD

Trading strategy: standing aside

The euro recovered Tuesday’s losses as the dollar weakened against commodities and commodity currencies. Intra-day resistance around 1.3250 was under pressure earlier today, after breaking above former resistance around 1.3180 yesterday, but the pair shows minor signs of weakness at the time of writing. Momentum studies remain bearish on a short-term basis but should turn positive around 1.3450 if current recovery continues. Most notable data release in the economic calendar today is the US Initial Jobless Claims at  13:30 GMT. I am neutral on EUR/USD at this time and will look for some clues next week. Current exchange rate is 1.3234 @08:50 GMT

Support: 1.3180/00, 1.3070/00, 1.3000/30, 1.2970 and 1.2900
Resistance: 1.3250/75, 1.3300/30 and 1.3400
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bullish

EURUSD 4hrs chart 12-30-2010
EURUSD 4hrs chart 12-30-2010

AUDUSD

AUDUSD daily chart 12-30-2010
AUDUSD daily chart 12-30-2010

EURGBP

EURGBP daily chart 12-30-2010
EURGBP daily chart 12-30-2010

Gold

XAUUSD daily chart 12-30-2010
XAUUSD daily chart 12-30-2010

Have a great day and good luck trading!


© liviu for innerfx.com, a Forex Analysis blog, 2010. |
Article Source | Post tags: AUDUSD, EURGBP, EURUSD, Gold

Best of Currency Currents Past: Bubble Theory Battle Royale (November 2009)

Filed under: Currency — Tags: , , , , , , , , , — admin @ 2:30 am

Thru the end of the week we will be publishing some of the Currency Currents past we liked …and think still contain some thinking points for markets as we move into 2011…

From 10 November 2009

Quotable

“Oh, most excellent gold!” observed Columbus while on his first voyage to America.”Who has gold has a treasure [that] even helps souls to paradise.”

                         Peter Bernstein, The Power of Gold

Bubble Theory Battle Royale

I spoke at a conference yesterday (November 9th 2010). It shall remain nameless [major newsletter house, my last such event] in order to protect the guilty. What was most funny/incredible/nutty is a belief by said conference chief the US dollar, and in fact all paper currencies, will disappear within 10-years. We will then move to a commodity-based monetary system and Mr. Greenback will be gone.

Anxious as I was to try out the 10-year dollar disappearance idea on someone who wasn’t drinking the newsletter crowd Kool-Aid, so I called my number one son, John Ross, and shared the idea; JR asked the following right out of the gate: “Does this guy think the US currency is going to start disappearing a bit each year, then eventually vanish, or is it a 10-year date to destiny whereby someone flips a switch, then poof it goes away?” I told JR I wasn’t sure the purveyor of said lunacy had thought through the technical problems of replacing the world reserve currency. Maybe a house to house search team would be in order.

I hope you think that kind of thinking not only represents nonsense, as I do, but is a flashing yellow light exemplifying the max one-way bets against the buck [in hindsight, we now know the buck bottomed about two weeks after this farcical forecase]. But, given the implicit signal by the US Fed last week of rates on hold forever, and no bone at all thrown to the buck by the G-20 over the weekend, it seems an orderly decline in the dollar is the policy tool at hand. So further, or even much further, it could go.

There is only one problem; the dollar is tied at the hip with the stock market; negatively correlated tick by tick.

Many of us now believe stocks are in bubble territory and prone to pop. If that’s the case then the dollar is prone to stage a very big rally. Both events would throw cold water on the current policy of using the dollar to juice stock markets to enhance the so-called wealth effect of real people and thus build confidence—to stimulate the minions into doing what they do best—shop!

So, the question of the day: Is there a bubble in asset markets?

Some of our most public and lofty seers seem at odds over that question, and it is making for strange bedfellows, or tag-team, partners.

Talking their respective books over this question we have a tag-team match of historic proportion shaping up: In the red corner we have Marc “The Ponytail” Faber teaming up with Nouriel “Party Animal” Roubini; well lubricated machine these two. And in the blue corner, we have Jim “Gosh I love China” Rogers teaming up with Alan “The Maestro” Greenspan; this is a real odd couple, but their skills cannot be questioned.

If you know anything about tag-team matches, you know there is always someone lurking in the background ready to bend the rules and jump in one side of the fight…he has already identified himself, it’s none other than Frederic “The Bruiser” Mishkin (former Fed governor and expert at full body slams).

The Pony Tail gets the action started with a roundhouse punch glancing against the Maestro’s forehead:

“I would regard a failure *Gold+ to hold above the ‘upside breakout points’ in the period directly ahead with great caution. In the case of gold a decline below US$1,000 would likely lead to further more meaningful weakness, possibly down to between US$800 and US$900,” Faber added. Faber has been reiterating, in various recent interviews, the notion of over-streched assets and a possible short-term dollar turnaround. Speaking in a Bloomberg interview from Istanbul on Tuesday, Faber said: “Maybe the dollar has made a turn, it can easily rebound by 10%”.

The Maestro recovers quickly, and finds The Pony Tail off-balance, and looks to end it early, going for the pile driver, a dangerous move indeed:

Nov. 9 (Bloomberg) Former Federal Reserve Chairman Alan Greenspan said a rebound in stocks is “re-liquifying” the U.S. economy and housing prices are showing early indications of ending their decline.

“We have been very fortunate that the stock markets moved back” and are “re-liquifying the whole process,” Greenspan said at an event in Edmonton, Alberta, presented by Abu Dhabi National Energy Co., the state-controlled energy producer known as Taqa.

Pony Tail shakes it off and tags up with Party Animal who leaps off the top rope, a direct hit here and the match is over:

“But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronised rally. While asset prices were falling sharply in 2008, when the dollar was rallying, they have recovered sharply since March while the dollar is tanking. Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.”

Fresh off another win and well rested, “Gosh I Love China” quickly moves into the ring, helping his partner The Maestro avoid the death blow. He does. And then launches into his own with a flying drop kick to the head of the Party Animal:

How can you talk about a bubble when assets such as silver are 70% below their all-time high? Same for coffee, sugar, cotton, natural gas, and many more. I have a problem talking about a bubble when assets are this depressed from their all-time highs.

A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.

I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except Gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.

If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge off the bottom but nowhere near it’s old highs. Look at Citigroup. The stock is up 3 or so times off the bottom …

“… And since Mr. Roubini thought oil would stay below $40 a barrel for all of 2009, I would love for him to tell me and the rest of the world exactly where are all the oil supplies because the International Energy Agency (IEA) — which has the best global data set on energy supplies — has no idea where is the oil. Mr. Roubini should tell us where this price suppressing oil supply is hidden. All the oil possessing countries in the world have declining reserves. All the oil companies have declining reserves. So Mr. Roubini must know something the rest of us don’t.”

Ouch…that hurt Party Animal more than his usual late night last call mixer. It was a powerful kick indeed delivered by Gosh I Love China. But, the Party Animal knows how to take a blow, and has plenty of fighting experience while dazed and dreary. Even so, he’s wobbling.

Slipping under the bottom rope, from across the ring, out of sight of the referee, The Bruiser enters the ring to end it with one of his patented full body slams:

“There is increasing concern that we may be experiencing another round of asset-price bubbles that could pose great danger to the economy. Does this danger provide a case for the US Federal Reserve to exit from its zero-interest-rate policy sooner rather than later, as many commentators have suggested? The answer is no.”

Wow! The Party Animal has taken a beating, and is about to be pinned…one, two…and just in time, The Ponytail applies the Thai death-lock to the referee before he can count to three…what a match…everyone’s in the ring now, flailing away. This is exciting stuff. Man, it’s a lot more than we bargained for. These guys are tough, smart, and technically gifted. Stay tuned. This battle has legs and ain’t over yet.

[Are we now in bubble territory fast-forwarding to December 2010—a case can be made. More on that next week in Currency Currents 2011…]

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11 for ’11!

Filed under: Business — Tags: — admin @ 12:36 am

A worst-case scenario.

2010 is about to end after experiencing an economic ride that did not lack drama.  Euro debt crises, various rounds of US quantitative easing, a political upheaval in Washington DC, extremely high unemployment, and declining housing prices were but a few of the major drivers of economic activity last year.

So what do we have to look forward to in 2011?

Well, I think if we get a repeat of the type of events we saw in 2010—then we’re in for some volatility!  However, I’m not sure if the global economy can handle another set of events like this again.  My hope is that as things start to “normalize” we get back to more stable ground and leave behind the “economic bubble” mentality.

Do I expect that to happen?

Absolutely Not!

With politicians, banksters, competing economic interests, and everyone trying to get to the top—something’s gotta give.  So I’ve put together a list of “predictions” or things we need to look out for in 2011.  If all of these predictions come true—then we might be in serious trouble!  With that said, these predictions represent a combination of things that could potentially be good or bad for the global economy.  I’ll let you decide which is which!

1.    Commodity inflation increases and causes social unrest.   As we end 2010, oil prices are around $91.25 and gold is around $1400 thanks to Bernanke and QE2.  While CPI data (which strips out food and energy) is likely to be engineered lower by the powers that be, the US consumer is not going to believe it this time.  In fact in China, inflation is already out of control and government attempts to curb it will likely not work.  So expect tensions to flare as prices for necessities pick up and the middle class gets squeezed yet again.

2.    Just because the US government says there is no inflation, doesn’t make it so.  In fact, intelligent investors around the globe not only recognize this, they position themselves accordingly.  In addition to inflationary forces at work, government deficits around the globe are being scrutinized.  Bond investors seeing this toxic combination will demand more interest for lending governments money—the US included.  These investors known as “bond vigilantes” are going to push interest rates higher, if Central banks won’t do it themselves.

3.    As interest rates rise, housing prices will continue to fall.  This is a general rule of thumb that was all but forgotten over the last 5 years of the housing bubble.  In addition, as the amount of foreclosure properties currently on the bank’s books (in addition to a potential new crop if rates go higher and even more people are under-water) increases, this could send housing prices lower by another 15%.

4.    Don’t think for a second that the EU is going to escape unharmed as the market’s attention is on the problems in the US for the first half of the year.  Spain, the Euro zone’s 4th largest economy will likely be the target of the bond vigilantes and would be a crowning achievement if they can force yields in Spain higher and cause them to access the emergency facility before any meaningful reform is enacted.  Germany will most likely try to sacrifice Portugal, which may be given up if Spain can’t be toppled.  Either way, this will put tremendous pressure on the Euro and could revive the “end of the Euro” talk again.  The Euro won’t totally collapse, as it likely to start a run lower from a higher starting off point due to US Dollar weakness to start the year.  I expect this to happen around mid-year.

5.    China is going to allow the Yuan to appreciate—for real this time!  Tired of the games being played by the US, China decides that the only way to keep its economy under their own control is too allow their currency to strengthen.  China has built up such an enormous economic surplus that it could likely subsidize any losses incurred to exports due to a higher Yuan value.  At this point, there is no other country prepared to take China’s place in exporting, and the new found “currency wealth” that Chinese citizens would experience will help buoy an already rising domestic demand.

6.    With real estate prices dropping, US municipalities find it harder to find revenue even if they were wise enough to attempt to rein in spending.  For those who haven’t cut costs, the potential for default on liabilities will have increased.  First it starts in the towns, then small cities, then big cities, and then to actual states.  Of course the federal government will just attempt to paper this over, but it may not be possible given the new make-up of Congress.

7.    As both a cause and result of all of this economic malaise, unemployment remains high.  Even in the face of the Bush tax cut extensions, business are still loathe to expand quickly despite the tax cuts for the rich.  President Obama was forced to admit that indeed tax cuts stimulate the economy much to his party’s chagrin—however because of the temporary nature of the extension, he won’t see a meaningful benefit until either A) there is a major overhaul of the tax code; or B) much of his agenda is defeated or reversed (Obamacare) and it appears likely that he will be a one-term President.

8.    GDP growth in the US slows to 1.5%.  With high unemployment, declining asset prices, higher commodity inflation and the removal of government stimulus, growth in the US is modest at best.  There will be times throughout the year where the “dreaded double-dip recession” talk heats up, and we will narrowly avoid this fate.  Consumer spending is some 70% of GDP and higher energy and food prices coupled with housing price losses will send the consumer back to the sidelines.

9.    US stocks trade higher despite the economic conditions and rising interest rates.  Corporate profits will be maintained as cost-cutting measures and lack of spending allow businesses to maintain reasonable profitability.  With no other place to put capital to work, investors turn to the stock market despite earnings multiples which become inflated.  However, this house of cards is likely to tumble near the end of the year, even after navigating year-long volatility.

10.    A new “BRIC” currency emerges, as these countries decide to move away from the Dollar and provide an alternative as a reserve currency and medium of exchange.  Already, these countries are forming bi-lateral agreements amongst themselves so it is only a matter of time before this happens.

11.    Bernanke and the Fed launch QE3/4 in response to the housing and municipality crisis, as well as to ward off the potential sell-off in the financial markets.  The “audit the Fed” talk heats up and this becomes Bernanke’s last stand.  However, the economy is saved by the thought that it “needs to get worse before it gets better” and that the “extend and pretend” policies of 2010/early 2011 are finished.

Happy 2011 to all!

Tags: AUD, bank, Bernanke, central bank, China, commodity, course, crisis, currenc, currency, data, dollar, economic, economy, EUR, Euro, fed, financial, gold, Il, interest, interest rate, interest rates, invest, investor, launch, lower, market, Mike Conlon, money, oil, real estate, recession, ssi, stock, stocks, time, tip, trade, unemployment, wealth

Gas prices: Bracing for more pain at the pump

Filed under: Business — Tags: , , , , — admin @ 12:36 am

NEW YORK (CNNMoney.com) — Drivers may be bracing for more pain at the pump in 2011 as gas prices continue to head higher.

The price for a gallon of gas has risen 3% over the past 10 days and last week, prices crossed the $3 mark for the first time since October 2008. At $3.071 a gallon, gas prices are still 34% below their peak of $4.114 set in July 2008.

Still, former Shell Oil president recently said drivers could be paying $5 for a gallon of gas by 2012 as the global demand for oil increases. And that’s no joke.

Fred Rozell, director of business development and retail pricing at Oil Price Information Service says it’s tough to project whether gas prices will go up over the next couple years, but consumers should count on gas prices rising into the spring.

“Generally the trend is up, and we’ll continue to see prices go up assuming the economy remains on track,” he said. “Based on historical trends we generally see increases throughout the year and into the spring.”

As for $5 gas in 2012?

Check gas prices in your state

“That would be a gigantic increase that I don’t think will happen,” said Rozell, adding, “any forecast beyond 6 months is really witchcraft.”

Overall, Americans are expected to wind up spending a total of $35.8 billion on gas this December, according to the Oil Price Information Service. That’s up 17% from last year.

Oil surge: Oil, the main ingredient in gasoline, has also been on a tear, with crude prices topping $90-a-barrel for the first time in more than two years.

Platts senior oil analyst Linda Rafield attributes some of the spike in oil prices to speculation.

“That can push prices to a level that doesn’t reflect supply and demand,” Rafield said.

But higher oil prices could still translate to higher gas and home heating bills for consumers.

“The price of the barrel of crude oil translates somewhat into gasoline and higher home heating prices… since the price of the barrel of crude affects making the product,” Rafield said.

“If oil prices sustain themselves at the $90-a-barrel level… it will translate to higher prices if demand stays at the level we’re currently seeing.”

Air fares on the rise: Consumers may also feel the squeeze when it comes to booking a flight.

Airlines are beginning to raise ticket prices, citing higher fuel costs among other factors. Several airlines have already increased one-way ticket prices by $10 in the last week.

“If you think about the hundreds of thousands of gallons that we run through every single day, a penny here and there adds up very quickly,” said American Airlines spokesperson Ed Martelle.

JetBlue has also hiked fares but says it’s not just fuel driven.

“In select markets we’ve matched the $10 one-way fare increase filed by other airlines. This is not a fuel surcharge but rather an increase in fares,” said JetBlue spokesperson Bryan Baldwin. “We generally consider a number of factors when making pricing decisions, including the competitive landscape, underlying demand as well as fuel costs.”

Delta, United, Continental, and U.S. Airways have also increased their fares to match rising costs.

“In general, airlines want to have a fare structure in a market that is similar to and competitive with other airlines that fly in the same market. So if one or more airlines don’t match a fare increase, often times the airline(s) that initiated the increase will rescind it,” Baldwin said.

Southwest Airlines has no current plans to raise fares but is keeping a close watch on oil prices, said Southwest spokesperson Marilee McInnis.

“Our goal is to have low fares and give our customers the freedom to fly. We are watching the price of oil very closely but don’t plan to match the fare hikes,” she said. To top of page

December 30, 2010

Best and Worst Investments of 2010

Filed under: Investing — Tags: , , , — admin @ 11:59 pm

A broad stock market index would have delivered a perfectly good year in 2010. The S&P 500 rose 12%, and after a 27% gain in 2009, stocks are just 13% off its 2007 peak. Not bad. But what about those investors who made big bets on a particular sector, or country? How did wind-energy optimists or gold-bug pessimists fare? Earlier this week, SmartMoney.com columnist Jack Hough highlighted the
best and
worst stocks of the year (guess which list
Crocs (
CROX ) showed up on?). Here’s a look at the best and worst performing investments among mutual funds, ETFs, countries, and real estate markets:

BESTNWORSTCA

Best:
Dynamic Gold and Precious Metals (
DWGOX ) , up 66.92%

The average small-cap growth fund was up 27% this year. The average gold fund: 39%. The top performer among all equity mutual funds over the last 12 months? This little small-cap gold fund. Launched fewer than two years ago by ex-mining industry engineer Robert Cohen, Dynamic Gold and Precious Metals holds shares in just 38 companies with an average a market cap of just $1.5 billion, smaller than the average $9.5 billion market cap of precious metals funds. Cohen has made a big investment in Canadian gold miner
Osisko Mining Corporation (
OSK ) , which is up 70% this year. Another winner:
Perseus Mining Limited (
PRU ) , a $1.4 billion Australian company that mines for gold in West Africa – and minted money for investors this year, as its shares rose 85%.

SmartMoney lays out the best and worst investments in 2010 among mutual funds, ETFs, countries and real estate markets. Sarah Morgan discusses. Also, Ethan Smith says that concert ticket sales are fizzling, a troubling sign for what had been one of the music industry’s brighter areas.

Worst:
Z Seven (
ZSEVX ) , down 73.2%

Investors in this year’s worst-performing fund are now getting what’s left of their money back: management has decided to liquidate the fund as of December 29. The Z Seven fund’s stock-picking system was designed to incorporate lessons learned in the 1973-74 bear market, and the international stock fund did outperform a world stock index during the downturn in late 2008 and early 2009, but it quickly fell behind in the recovery. Anyone who put $10,000 in this fund at the beginning of this year would have lost more than $7,000 in the last 12 months. So what went wrong? With just 14 stocks in its portfolio at the end of the third quarter, the fund may have suffered from bad timing – some of its top holdings, including British investment management company Rathbone Brothers PLC, PetMed Express, and British consulting firm RPS Group suffered steep losses in the spring and summer. While shares of those companies have since recovered, this fund’s shareholders never did.

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Next: Bond Mutual Fund

 

Irish banks upped their ECB dependancy in November

Filed under: Central Banks — Tags: , , , , , — admin @ 5:32 pm

Sort of old news, considering the Irish government has since nationalized Allied Irish and Ireland itself has been bailed out by the EU/IMF but borrowing by Irish banks grew 13.7% in the month of November.

Crude Oil Prices Set to Decrease

Filed under: Forex News — Tags: , , — admin @ 3:13 am

By Anton Eljwizat

Crude oil prices have recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. A downward trend today is also supported by relative Strength Index. Forex traders involved with commodities like this can take advantage of this knowledge by going short on Crude Oil now, and at a great entry price!

Forex Market Analysis provided by ForexYard.

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