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Currency

3 Charts That Confirm Greece's Death Even After Restructuring


Posted by ZeroHedge

on Wednesday, 08 February 2012 08:23

Perhaps after today's budget miss in the Hellenic Republic it is time that the focus shift from the reality of a pending #fail for the voluntary PSI (for all the reasons we have at length discussed no matter how many headlines the markets tries to rally on) to a post-restructuring real economy reality in Greece. Whether self-imposed by devaluation or Teutonia-imposed by Troika, austerity is in the cards but there is a much more deep-seated problem at the heart of Greece - a total and utter lack of innovation and entrepreneurship. As Goldman's Hugo Scott-Gall focuses on in his fortnightly report this week "the competitive advantage of innovation is one that developed markets need to keep" and in the case of European nations that desperately need to find a way to grow somehow, it is critical. Unfortunately, Greece, center of the universe for a post-restructuring phoenix-like recovery expectation, scores 0 for 3 on the innovation front. Lowest overall patent grant rate, lowest corporate birth rate, and highest cost of starting a new business hardly endear them to direct investment or an entrepreneurial dynamism that could 'slow' capital flight. Perhaps it is this reality, one of a Greek people perpetually circling the drain of dis-innovation and un-growth, that Merkel is starting to feel comfortable 'letting go of'. Maybe some navel-gazing after seeing these three doom-ridden charts will force a political class to open the economy a little more, cut the red tape (after a drastic restructuring of course) and shift focus from Ouzo, Olive Oil, and The Olympics. We also suggest the rest of the PIIGS not be too quick to comment 'we are not Greece' when they see where they rank for innovation.

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As if these were not bad enough, via Wikipedia, we also note the following three fun facts about the glorious Mediterranean nation:

Greece has the EU's second worst Corruption Perceptions Indexafter Bulgaria, ranking 80th in the world, and lowest Index of Economic Freedom and Global Competitiveness Index, ranking 88th and 90th respectively.

Quite impressive...and no wonder 5Y CDS held their high cost of protection even when immediate credit event triggers were doubted...sooner rather than later they will default again unless something drastic changes and our admittedly premature discussion of more violence is becoming more and more likely every day as social unrest seems the only catalyst for change in a surreal world of central bankers, banks, and politicians.





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Currency

Jack Crooks: A self-feeding loop of confusion...


Posted by Jack Crooks - Black Swan Capital

on Wednesday, 08 February 2012 08:23

I think by most conventional measures, used by most professional investors, European Central Bank Chief Mario Draghi has been a success. He has bolstered the returns for equity funds considerably since his decision to utilize a three-year term, instead of one year, in the ECB recent liquidity injection to European banks.
 
The fact is I missed the trees for the forest on this, and it has hurt. Failing to understand this lending-which reduced stigma associated with 1-year terms and better matched the funding needs of banks, led to more participation than expected. This in turn created a classic self-reinforcing positive feedback loop for asset prices:



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Gold & Precious Metals

Peter Schiff: The Main Driver Behind the Gold Bull


Posted by Peter Schiff & James Rickards

on Wednesday, 08 February 2012 07:19

Screen shot 2012-02-08 at 6.30.34 AM

 

A Wall Street pro named James Rickards recently released his first book,Currency Wars: The Making of the Next Global Crisis, and it's creating a buzz. Euro Pacific Precious Metals' CEO Peter Schiff often talks about competitive devaluation of currencies as the main driver behind our gold and silver investments. Recently, Peter sat down with James to get his perspective on what's behind these currency wars, and find out what he recommends investors do to preserve their wealth through this tumultuous time.

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Peter Schiff: You portray recent monetary history as a series of currency wars - the first being 1921-1936, the second being 1967-1987, and the third going on right now. This seems accurate to me. In fact, my father got involved in economics because he saw the fallout of what you would call Currency War II, back in the '60s. What differentiates each of these wars, and what is most significant about the current one?



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Stocks & Equities

The Best Growing Energy Stocks With Highest Dividend Yield


Posted by Dividend Yield

on Wednesday, 08 February 2012 01:14

Energy is of huge importance for the growth of the economy. The demand is steadily growing and the political change away from nuclear power to renewable energy slows the supply growth of energy. I screened stocks from the investment theme by the best growth over the past 10 years. I decided to select only stocks with a double-digit sales growth and a dividend yield of more than three percent. Fourteen stocks fulfilled my criteria. The highest growth was realized by Penn Virginia Resource Partners (PVR) who had a yearly growth of 40.3 percent. One company has a yield of more than 50 percent.

Here are my favorite stocks:

BPL

1. Buckeye Partners (BPL) has a market capitalization of $5.89 billion. The company employs 859 people, generates revenues of $3,151.27 million and has a net income of $43.08 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $338.70 million. Because of these figures, the EBITDA margin is 10.75 percent (operating margin 8.87 percent and the net profit margin finally 1.37 percent). 

 

The total debt representing 50.51 percent of the company’s assets and the total debt in relation to the equity amounts to 129.65 percent. Due to the financial situation, a return on equity of 5.27 percent was realized. Twelve trailing months earnings per share reached a value of $0.80. Last fiscal year, the company paid $3.82 in form of dividends to shareholders.

 

Here are the price ratios of the company: The P/E ratio is 79.04, Price/Sales 1.88 and Price/Book ratio 3.26. Dividend Yield: 6.44 percent. The beta ratio is 0.26. 


HEP


2. Holly Energy Partners (HEP) has a market capitalization of $1.22 billion. The company employs 148 people, generates revenues of $182.10 million and has a net income of $58.87 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $121.35 million. Because of these figures, the EBITDA margin is 66.64 percent (operating margin 49.84 percent and the net profit margin finally 32.33 percent). 

 

The total debt representing 76.43 percent of the company’s assets and the total debt in relation to the equity amounts to 449.52 percent. Due to the financial situation, a return on equity of 17.33 percent was realized. Twelve trailing months earnings per share reached a value of $2.47. Last fiscal year, the company paid $3.32 in form of dividends to shareholders.

 

Here are the price ratios of the company: The P/E ratio is 22.39, Price/Sales 8.30 and Price/Book ratio 4.86. Dividend Yield: 6.41 percent. The beta ratio is 0.65. 


PAA


3. Plains All American Pipelines (PAA) has a market capitalization of $11.65 billion. The company employs 3,500 people, generates revenues of $25,893.00 million and has a net income of $514.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,016.00 million. Because of these figures, the EBITDA margin is 3.92 percent (operating margin 2.96 percent and the net profit margin finally 1.99 percent). 

 

The total debt representing 43.47 percent of the company’s assets and the total debt in relation to the equity amounts to 137.19 percent. Due to the financial situation, a return on equity of 8.01 percent was realized. Twelve trailing months earnings per share reached a value of $4.18. Last fiscal year, the company paid $3.76 in form of dividends to shareholders.

 

Here are the price ratios of the company: The P/E ratio is 18.64, Price/Sales 0.47 and Price/Book ratio 2.60. Dividend Yield: 5.25 percent. The beta ratio is 0.50. 

 

Take a closer look at the full table of energy stocks with fastest growth and big dividends. The average price to earnings ratio (P/E ratio) amounts to 20.95. The dividend yield has a value of 9.02 percent. Price to book ratio is 2.70 and price to sales ratio 2.88. The operating margin amounts to 26.35 percent.


Related stock ticker symbols:
ARLP, BPT, BPL, HEP, MMP, MMLP, PGH, PVR, PTR, PBR, PAA, RES, TGS, YZC



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Timing & trends

The Fed Resumes Printing


Posted by Bud Conrad, Casey Research

on Wednesday, 08 February 2012 00:00

 

AllCentralBanksArePrinting 0

The Federal Reserve recently announced important policy changes after its Federal Open Market Committee (FOMC) meeting. Here are the three most important takeaways, in its own words:

 

1.The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

 

2.The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. In the most recent projections, FOMC participants' estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 6.0 percent.

 

3.The Fed released FOMC participants' target federal funds rate for the next few years.



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