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The Fed’s Hands Are Tied… Right as the Financial System Begins to Crack

Graham Summers Writes:

The Fed would do well to look at Japan.

Japan’s Nikkei, after rallying over 70% since November, just collapsed 11% in less than two days. Looking at the chart, it’s pretty clear where this thing is heading: the same as the NASDAQ in 2000.

This is the problem with economic policy that focuses on pushing stocks higher: eventually the collapsing economy comes home to roost and stocks implode. We saw this in 2000 and 2008. We’re currently seeing it in Japan. And it’s only a matter of time before it his the US.

Indeed, Bernanke’s whole life work has been based on the belief that the Fed didn’t do enough during the Great Depression. So he’s opted to expand the Fed’s balance sheet to over $3 trillion and to monetize most of the US’s debt issuance via QE to battle the Financial Crisis.

Altogether,

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Marsh & McLennan Buys Peru Insurer – Analyst Blog

Zacks Market Commentaries Writes:

Focusing on growth through acquisitions, Marsh & McLennan Companies Inc.’s (MMC) leading insurance brokerage wing – Marsh Inc. – announced its intention to purchase a leading Peru-based insurance advisor – Rehder y Asociados Group (Rehder).

The transaction is expected to culminate by the end of Jun 2013. The acquisition includes both the insurance operations of Rehder and the employee health benefits operations of Humanasalud. Other terms and financial consideration of the deal remain undisclosed.

Further, the acquisition complements Marsh & McLennan’s strategy of expansion into global emerging economies. Armed with annual revenue of over $30 million, Rehder’s excellent risk management capacities and superior market position in Peru will broaden Marsh & McLennan’s product offerings in South America, thereby laying down scope for enhanced growth for the company. The latest acquisition is yet another attempt by the company to enhance its manpower resources in order to

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P&G Brings Back Lafley as CEO – Analyst Blog

Zacks Market Commentaries Writes:

The Procter & Gamble Company (PG) brought back its previous chief executive officer (CEO), Alan George Lafley, to immediately replace its existing CEO Robert McDonald, as the consumer goods giant struggles to turn around its business.

Lafley has re-joined P&G as President and CEO and will also chair the board of directors, effective immediately. Joining the company in 1977, he became the President and CEO of P&G in 2000 and continued till 2009. McDonald is due to retire in June this year after serving P&G for 33 years. He was President and CEO from 2009 to 2013. P&G also stood by its fiscal 2013 and fourth-quarter guidance.

It is widely rumored that McDonald was asked to step down as the company’s results and turnaround efforts were not showing any material improvement. Fiscal 2012 (ending Jun 2012) was a tough year for P&G and it performed

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Noah Holdings Upped to Strong Buy – Analyst Blog

Zacks Market Commentaries Writes:

On May 22, Zacks Investment Research upgraded Noah Holdings Limited (NOAH) to Zacks Rank #1 (Strong Buy). Why the Upgrade? Noah Holdings has been witnessing rising earnings estimates owing to robust first-quarter 2013 results (released on May 6). Moreover, this Shanghai-based asset manager delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 37.9%. First quarter earnings per share came in at 17 cents, surpassing the year-ago number by 240.0% and the Zacks Consensus Estimate by 112.5%. Results were primarily aided by better revenues and increased other income, partially offset by a rise in expenses. The company witnessed a higher number of registered clients during the quarter.   Total revenues jumped 94.3% from the prior-year quarter to $34.5 million. Other income was $1.8 million, up 50.6% year over year, mainly attributable to higher investment income. Investment income

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Apple Is a Tax Dodger… You Should Be, Too

Investment U Writes:

There was a collective gasp in some quarters last week when it was revealed that technology giant Apple avoided taxes on billions of dollars in offshore profits. CEO Tim Cook will almost certainly catch plenty of flak in the weeks ahead.

But shareholders can breathe easy. Apple is unlikely to pay an extra cent in taxes.

And you would be well advised to follow its example. Here’s why…

Apple did nothing illegal. It is simply playing the game that Congress created with the near-incomprehensible tax code.

Hundreds of other multinational companies also use cost-sharing agreements to shift profits to a tax haven jurisdiction. They take advantage of tax law loopholes and use countries like Ireland as the base for offshore subsidies. (However, Apple did push the envelope a bit by having a subsidiary, Apple Operations International, with no employees or physical presence.)

This is exactly the sort of behavior you should expect with such a

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Chinese and German Manufacturing Now Both Contracting

Michael Lombardi Writes:

Chinese-and -GermanA recession for the global economy is becoming an increasingly likely scenario.

The Chinese economy, the second-biggest in the world, witnessed a contraction in manufacturing in May. The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) registered 49.6 for May, declining from 50.4 in April. (Source: Markit, May 23, 2013.) Any number below 50 represents contraction in the manufacturing sector.

 The Chinese economy exports a significant amount of what it produces to the global economy. Contraction in Chinese manufacturing shows exports are falling—the global demand for goods is falling.

Similarly, Germany’s Flash Manufacturing PMI showed continuous contraction in the manufacturing sector. The index stood at 49.0 in May. (Source: Markit, May 23, 2013.) The German economy is important to observe, because it’s the largest economy in the eurozone and an economic

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Psychic Friends Network Inc. (PFNI) Video Chart for Friday, May 24, 2013

QualityStocks Writes:

PFNI jumped on Thursday for gains of about 20 percent. Notably, the share price moved above the 50-day moving average and a resistance level at 1.35 cents. Technical traders will be looking for volume to increase and the share price to hold the new support level as the chart tries to make a continued move off the bottom at $0.008.

To view the video chart, visit the following link: http://www.qualitystocks.net/videocharts

Let us hear your thoughts below:

If the Economy is Improving, Why Are Business Executives So Scared to Spend?

Michael Lombardi Writes:

As I have been writing in these pages, economic growth in the U.S. economy won’t happen by printing more paper money—it’s a short-term fix that creates more long-term problems.

According to data compiled by Bloomberg, 2,267 non-financial constituents of the Russell 3000 index saw their cash holdings increase by 13% to $1.73 trillion in the first quarter of 2013 compared to the same period a year earlier. (Source: Bloomberg, May 23, 2013.)

As the cash hoard continues, business spending declined 21% in the first quarter compared to the last quarter of 2012. This was the biggest decline since the financial crisis of 2008.

To top this off, business executives in the U.S. economy are worried about troubles in the global economy, and they don’t have a very optimistic view on conditions here at home. A CEO Confidence Survey conducted by the Conference Board

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Boston Scientific showcases one of the largest rooftop solar power installations in Massachusetts — 3,900-panel project at the company’s international distribution center in Quincy

Investor Ideas Writes:
May 24, 2013 (Investorideas.com renewable energy newswire) Boston Scientific Corporation (NYSE:BSX) celebrates Earth Week by inaugurating a 3,900-panel rooftop solar installation atop the company's international distribution center in Quincy, Massachusetts.

Sell In May And Go Away

Trading School Writes:
This old adage has been around Wall Street for as long as anyone can remember. What does it mean? Well, it means sell your stocks in May, have a nice summer and come back in September and get long stocks again if the signals are aligned. With that in mind, I analyzed the S&P 500 [...]









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