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Global Investing Roundups, Tuesday, December 2nd, 2008

Source: http://feeds.feedburner.com/~r/ContrarianProfits/~3/472628515/9393
 Posted on Tuesday, December 2nd, 2008 | In Market Commentary
Contributed by: Contrarian Profits (http://contrarianprofits.com) -

NBER: U.S. in Recession Since Dec. 2007; Fed Reserve Could Buy T-Bills; JP Morgan Sees 0% Interest Rates; Pilgrim’s Pride Files for Bankruptcy Protection; Consumer Credit Crunch in the Making; Crude Slides on Recession Outlook; J&J to Buy Mentor

  • It’s official: The United States has been in a recession since December 2007, the National Bureau of Economic Research said yesterday (Monday). Already 12 months into it, this recession is longer than eight of the 10 recessions the U.S. has experienced since World War II, CNNMoney reported. Should it continue past the June 2009, it will be the longest.
  • U.S. Federal Reserve Chairman Ben Bernanke said the central bank could buy long-term Treasury securities to help revive the economy. “This approach might influence the yields on these securities, thus helping to spur aggregate demand,” he said in a speech yesterday (Monday) in Austin, Texas, Bloomberg reported.
  • A report from JP Morgan Securities (JPM) predicts the U.S. Federal Reserve will lower its benchmark federal funds rate to 0% and hold it there at least until the end of 2009. The current rate is 1.0%, and many analysts predict the Fed will lower it to 0.5% at its December 15-16 meeting, Reuters reported.
  • Pilgrim’s Pride Corp. (PPC), the largest U.S. chicken producer, filed for Chapter 11 bankruptcy protection after four consecutive quarters in the red fueled by rising grain costs. The company is the poultry supplier to Wal-Mart Stores, Inc. (WMT) and Kentucky Fried Chicken, a subsidiary of Yum! Brands Inc. (YUM), Bloomberg reported.
  • The U.S. credit-card industry could pull back more than $2 trillion of credit lines over the next 18 months due to risk aversion and regulatory changes banking analyst Meredith Whitney said yesterday (Monday). “Already, we have witnessed the entire mortgage market hit a wall, and we believe it will, for the first time ever, show actual shrinkage over the next few months,” she wrote. The credit card market will be 18 months behind the mortgage market and will begin to shrink by mid-2010, Whitney said.
  • Light, sweet crude for January delivery yesterday (Monday) fell $5.15, more than 9%, to settle at $49.28 a barrel on the New York Mercantile Exchange. Reports showing declines in both manufacturing activity and construction spending also contributed to the decline.

Global Investing Roundups, Tuesday, December 2nd, 2008

Last 5 posts by Contrarian Profits
About Contrarian Profits (http://contrarianprofits.com)

ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.

ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.

Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.

If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.

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