pimco

Managing multi-speed markets, according to Mohamed El-Erian

Filed in BP, ceo, Debt, economy, Gold Prices, o, pimco by on January 15, 2011 0 Comments

A 2011 market outlook, with Mohamed El-Erian, CEO and co-CIO of Pimco.

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Market Wrap-Up for Dec.16 (FDX, ABX, DFS, V, MA, WYNN, SBUX, more)

There was an interesting story out today talking about how Bill Gross’s $250 billion PIMCO Total Return Fund may be investing 10% of its assets in equity securities in 2011 — and has seemingly turned a lackluster market right back up. Gross, the so-called “bond king,” has grown much less bullish on bonds, but has been on record in some of his recent newsletters that he likes income plays such as dividend stocks for long-term investors. We sent out our Thursday “Dividend Top 100 Names on Our Watchlist” post this morning. Each Thursday we look at our various proprietary watchlists and sort through the names that are trading at or near all-time highs and put them in a list to share with all our Premium subscribers. Outside of looking for names that we feel are becoming a real bargain, this list is what we are using to find our next recommendations. Of course, the stocks on this list that have low or minimal dividend yields would only be suited for “aggressive” investors who are seeking growth over yield. I hope everyone checks it out! There appeared to be a bit of rotation out of gold today going on with mining plays Agnico-Eagle Mines ( AEM ) and Barrick Gold ( ABX ) both getting hit hard, along with gold prices. On the earnings front, Discover Financial Services ( DFS

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Weekend: 2011 Stock Market Forecast

Weekend: 2011 Stock Market Forecast

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. It’s not often that Bloomberg’s headlines give me much pause, but this one sure did. Bullish to the max, it quoted an analyst named Brian Barish from Cambiar Investors who believes the S&P 500 will gain 17% from here. In fact Barish believes the S&P 500 will rise to 1,300 by June 30, and to 1,380 by the end of year based on the weighted average of estimates by Cambiar’s nine analysts. Advertisement The Video Footage that has Electric Companies Terrified They won’t announce it yet, but your utility company is shaking in its boots… That’s because one tiny engineering firm just demonstrated a technology that could put every last utility out of business — by harnessing your own solar energy at any time, from any window ! Before the first big ticket contract comes through — doubling the share price — click here to see exclusive footage. Propelled by energy and industrials, 2011 will be marked by a “multi-speed recovery” that will completely lay waste to the “new normal” thesis put forward by the likes of PIMCO and your humble analyst. Instead, Barish believes, “the bleeding has stopped” as low market multiples will give way to an environment where multiples expand.  In short, it’s the classic bullish argument, since the price-to-earnings ratio is now 15 — below the 16.4 average for the index going back to 1954. But as every market watcher knows, Barish’s thesis eventually comes to rest where all of them do. In the end, it will always be all about earnings.   That’s why we aren’t so eager to help ourselves to all of this bullish Kool-Aid talk of late — especially as Goldman Sachs boosts their outlook to 1450 (!!) for 2011. Now for those of you keeping score at home, Goldman’s latest forecast would put the S&P 500 right back within a whisper of its 2007 highs, going back to the days of the housing bubble peak. How they arrive at that figure, I’ll never know… After all, is there anything that leads you to believe we are going see to the type of real economic activity we witnessed before it all fell apart? A return to the 2007 peaks? I would even argue the two-year peaking cycle — circled in the chart below — was nothing more than an illusion brought on by cheap credit and the bubble atmosphere it created. Without them, in other words, that peak encompassed by the circle never would have happened. In many ways, it really was mirage. Simply put, the market overshot at the top the same way it overshot at the bottom. It was, in the purest sense, a function of our bubble-based economy — similar to the market action after the dot-com bust. Of course, that doesn’t mean another stock market bubble cannot form anew. The FED is actually working overtime…

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Market Wrap-Up for Dec.3 (WAG, PVH, BTU, DD, COST, more)

With this morning’s jobs’ number worse than expected, we could likely see the Democrats and Republicans align on extending the “Bush Era” tax cuts. This could lead to the capital gains tax rates remaining the same, also good news for dividend payouts as well. Well-known bond guru Bill Gross of PIMCO was on the wires earlier, saying the Federal Reserve will likely be unable to raise interest rates for several years. Income investors will need to be alert to this continuing trend and look for the best investment vehicles that will take the place of savings accounts and CDs. The good news is you’ll need to look no further than dividend-paying stocks as a great source to help your current retirement/wealth goals. Taking a peek at today’s action, the averages were able to muster late gains following the weak monthly unemployment report. Phillips-Van Heusen ( PVH ) traded lower following the company’s earnings results. Safeway ( SWY ) was also lower on a negative analyst call. Walgreen Co. ( WAG ) was up on solid November sales data. Also higher were shares of Dupont ( DD ) and Peabody Energy ( BTU ), following bullish analyst commentary. Gold and oil prices pushed higher on the weak economic data from the morning as well. Looking ahead to next week, earnings will be continue to be light, with notables such as Costco ( COST ) and National Semiconductor ( NSM ) coming out with earnings results. Be sure to catch up with our latest watchlist updates, including the new reports on earnings/story stocks, analyst upgrades/downgrades and how those names performed on the week. All that will be available this weekend on Dividend.com Premium , and as always, you can view our current recommendations on our industry-leading Best Dividend Stocks List. Have a great weekend everybody, and thanks for reading! Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Trade The News Weekly Market Update

– Volatile trading has been the rule during the Thanksgiving-shortened week. In weekend negotiations with the ECB and the IMF, Dublin dropped its initial reluctance to a bailout and agreed to accept funds. Having evidently learned a lesson from the painfully drawn-out Greek crisis earlier in the year, European partners are rushing to finalize details of a rescue package, which will apparently amount to €85-100B, and will include funding from the ECB, the IMF and the UK. Meanwhile, contagion from the sell-off in Irish bonds has already driven risk spreads in Portugal and Spain to record levels, as S&P exerted additional pressure by cutting Ireland’s sovereign rating two notches. On Tuesday North Korea shelled a South Korean island in one of the most dramatic attacks on the nation since the end of the Korean War. The attack sent US and European equity indices tumbling and completely sidelined the relatively strong second reading of US Q3 GDP. Key economic data in the US was also in play this week. After growing in September, existing and new home sales returned to declines in October; sky-high inventories helped push median new home prices to lows last seen in 2003, raising concerns about a double dip in housing prices. The October durables data was also cause for concern, as the nondefense capital goods figure (ex aircraft) was down 4.5%, missing nearly all estimates, though it was cushioned by an upward revision in the prior month. Hope was seen in the weekly initial jobless claims, which fell to their lowest level since July 2008, possibly portending sunnier results in the November payrolls report next week. For the week the DJIA fell 1%, the S&P500 dipped 0.9%, and the Nasdaq gained 0.7%. – It was a big week for private equity deals. An investment group struck a deal to buy software developer Novell for $6.10/share in cash, in a deal valued at $2.2B. The acquiring firm Attachmate, a provider of technology services, is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thomas Bravo. Takeover chatter starting last week materialized in a private equity deal for Del Monte Foods, as a group led by KKR announced it would buy the foods company for $19.00/share. Clothier J. Crew confirmed it would be acquired by TPG and Leonard Green for $43.50/share. Blackstone lost its $602M bid to buy power producer Dynegy after failing to win shareholder support, likely forcing the company to find another buyer, sell assets or restructure. Blackstone met strong resistance from Dynegy’s two largest shareholders, Carl Icahn and hedge fund Seneca Capital. Elsewhere, German fertilizer giant K+S said it would acquire Canada’s Potash…

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Insiders Head for the Exits

Filed in BP, Debt, economy, euro, Gold, GOld juniors, o, pimco, shares by on November 23, 2010 0 Comments
Insiders Head for the Exits

If insider selling is any indication, we appear to be at or near a top in stocks. Over the last six months, corporate insiders sold over 120 million shares, while they bought just 38,000 (per CNBC ). That’s 3,177 times more sells than buys. The ratio hit another fresh high last week, with insiders selling 8,279 times more stock than they purchased. The chart below tells the story from a long-term perspective. The top section shows price of the S&P 500. The middle graph shows a “score” representing the ratio of insiders buying to selling; a high score indicates insider buying, and a low score means insiders are selling. The bottom graph shows net volume ($ value of transactions, buys minus sales)… Data by InsiderScore.com, via SentimenTrader. Insider selling is useful as a market indicator because it gives us a gauge on sentiment among top business execs. When they’re bullish on the economy and their company’s prospects, they buy. And vice versa. With that in mind, a few things stand out here: Note how strong selling volume was from late 2005 to late 2007, as insiders sold at the top. And see how the buy ratio spiked from late 2008 to early 2009? Insiders nailed it again, buying near the market bottom. The highlighted section of the last graph is especially…

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Gross, Grantham Agree: QE 2 is Troublesome

Gross, Grantham Agree: QE 2 is Troublesome

As QE 2 prepares to set sail, the Federal Reserve has plenty of doubters Among them are bond guru Bill Gross and famed investor Jeremy Grantham. From Reuters by Jennifer Ablan entitled: Gross, Grantham blast, Fed’s asset buying “ Two top asset managers, Bill Gross, co-founder of Pacific Investment Management Co., and Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co., lambasted the Federal Reserve’s loose monetary policy and said renewed asset purchases are in danger of becoming ineffective. The U.S. central bank’s bond asset purchasing program “is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme,” Gross, wrote in his monthly investment outlook posted on Pimco’s website on Wednesday. “It raises bond prices to create the illusion of high annual returns, but ultimately it reaches a dead end where those prices can no longer go up,” said Gross, who manages the world’s largest bond fund. The Fed is expected to announce another round of large-scale asset purchases when it holds its next policy meeting on November 2-3, after already deploying $1.7 trillion to pull the economy out of the financial crisis. Gross said the United States is in “‘a liquidity trap,’ where interest rates or trillions in asset purchases may not stimulate borrowing or lending because consumer demand is just not there.” Gross’s views came a day after Grantham, who helps oversee over $100 billion at Grantham Mayo Van Otterloo & Co., said Fed policy has resulted in “extraordinary destructiveness” and “ruinous cost.” “I would force (the Fed) to swear off manipulating asset prices through artificially low rates and asymmetric promises of help in tough times — the Greenspan/Bernanke put,” Grantham wrote to clients on Tuesday. He referred to Fed Chairman Ben Bernanke and his predecessor, Alan Greenspan. “It would be a better, simpler and less dangerous world, although one much less exciting for us students of bubbles,” Grantham wrote in a report titled “Night of the Living Fed,” in a play on the traditional scary Halloween season.” The last gasp from the Ponzi scheme is about to be expelled… Related Articles: Commodities are Poised to Head Higher The World According to Bill Gross Part 3 Weekend Edition: QE2 Sets Sail Hoenig: QE2 Won’t Work To learn more about Wealth Daily click here Advertisement World’s Industrial Supermetal A metal with a name you probably can ‘ t even pronounce… is absolutely essential to a $987 billion-a-year global industry. And today — thanks in part to a massive Chinese campaign to monopolize this most crucial of elements — we’re at the brink of a global deficit. Learn how one microcap mining outfit can make you 2682% as it taps into one of the world’s last major deposits. Gross, Grantham Agree: QE 2 is Troublesome originally appeared in Wealth Daily . Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.

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New York Fed Suing Bank of America…

Filed in bank of america, Gold Market, lead, pimco by on October 19, 2010 0 Comments

And the banks wonder why they’re not trusted… The banks are worried as hell that it is now proven these banks gave mortgages with fraudulent documentation AND then illegally went on to sell these “securities” as legal tender.  Few banks will survive. This fraud is only now unraveling. It’s not about foreclosures and the impact on the humans behind the house, it’s behind the investors caught in the banks scam. Utter banking stupidity… again.  And after we bailed them out over and over.  How can these banks be so stupid? Here’s what’s screwed up the most by this garbage.  One of the companies suing Bank of America is Blackrock… a company that’s 34% owned by Bank of America. From CNBC: “Bloomberg reported earlier Tuesday that the New York Fed had joined with the Pacific Investment Management Company, better known as Pimco, and investment management firm BlackRock in an attempt to force BofA to buy back $47 billion in mortgage bonds. Kathy Patrick, lead attorney for the consortium, confirmed in a statement Tuesday that the group holds more than 25 percent of the voting rights in more than $47 billion worth of Bank of America securities.” Here’s more… New York Fed Suing Bank of America… originally appeared in Wealth Daily . Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.

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PIMCO Municipal (PMF): A 10% Tax-Equivalent Yield

Filed in Bank Gold, pimco, recession by on October 6, 2010 0 Comments

Filed under: Newsletters , ETF Investing , Recession “We’ve all read stories about the states’ budget woes. In the wake of falling tax revenues, brought on by the decline in the housing market and the recession, U.S. states are tightening their belts; so why would I invest in state municipal bonds?” asks income specialist Amy Calistri . The editor of The Daily Paycheck explains, “Here’s the reasoning behind our recommendation for PIMCO Municipal Income ( PMF ). “In the wake of falling tax revenues, brought on by the decline in the housing market and the recession, U.S. states are tightening their belts. Some states, such as California, are facing sizable budget challenges. Continue reading PIMCO Municipal (PMF): A 10% Tax-Equivalent Yield PIMCO Municipal (PMF): A 10% Tax-Equivalent Yield originally appeared on BloggingStocks on Wed, 06 Oct 2010 10:00:00 EST. Please see our terms for use of feeds . Permalink  |  Email this  |  Comments

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Weekend: A September to Remember

Weekend: A September to Remember

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. Thank goodness that’s over with… I was beginning to think that I’d never be able to wear my smiley face button again. According to the National Bureau of Economic Research, the longest recession since World War II officially ended in June 2009 or a full 16 months ago.  That’s the good news. The bad news is that nobody really believes it. And why would they? Advertisement The Next GE Thanks to a push to revolutionize our power grid… A small group of hi-tech startups is about to take a major chunk out of a $297 billion/year market. In the coming years, these outfits will become the next GE, the next Google, and the next Microsoft. Get their names and ticker symbols now , before they take off. As this chart from Gluskin and Sheff’s David Rosenburg shows, it really is different this time… What is supposed to be up at this point is still down across the board. That’s because on a percentage basis, corporate earnings, shipments, housing starts, retail sales, home sales, industrial production, commercial construction, real GDP, orders, and non-farm payrolls are all usually up big by now. Instead, what is happening this go-round is actually…

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Covered Bonds: An Investing Stalwart Through the Centuries

Filed in Debt, euro, Gold Prices, pimco, silver by on September 15, 2010 0 Comments

So-called “covered bonds” are debt securities that are backed by the cash flows from public-sector loans or from real-estate mortgages. Covered bonds resemble other asset-backed securities (ABS) created through the process known as “securitization.” But there’s one big difference : Covered-bond assets must remain on the issuer’s consolidated balance sheet. Created in Prussia in 1769 by Frederick the Great , covered bonds have a long history and through the centuries have become a very popular investment instrument in Europe. There, known as Pfandbriefs , these mostly AAA-rated debentures make up the third-largest segment of the German bond market (behind public-sector bonds and unsecured bank debt). “In the past few years, covered bonds have enjoyed a resurgence as investors search for high quality investments with attractive yields and as European banks look to finance the growth in mortgage lending,” fixed-income heavyweight PIMCO wrote in a 2006 research note to investors.

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2010 Conference on the Future of Housing Finance

Filed in bank of america, Debt, depression, Gold Market, pimco, recession by on August 16, 2010 0 Comments

I’m sure Obama and Geithner mean well. But just how much they hope to accomplish in a mere four hours at a housing finance conference is the big question. Sure, they’ll discuss Freddie and Fannie and take a look at the housing meltdown. They may even look at the coming flood of four million foreclosures. But come on… Four hours to talk about a disaster that’s years in the making?  In that limited time, the Administration hopes to engage attendees as they “consider proposals for reforming the housing finance system,” said U.S. Housing and Urban Development Secretary Shaun Donovan.  “The need for reform is clear and we want to listen to a wide range of views as we chart a course to a more robust and stable housing market that works for the benefit of the American people.” While we hope for more meetings, we need a solution now . Millions of homes are being lost to foreclosure… People are strategically defaulting… People are underwater on their mortgages and can’t afford to refinance… And millions face a battle with higher mortgage rates once Option ARMs reset. So while this meeting is more for political grandstanding, is right now really the best time to take down Fannie and Freddie — even though they have to go?  Yes and no… Fannie Mae and Freddie Mac, both having gone through billions of taxpayer dollars, need more money. Are we supposed to give the “black holes” billions more and hope it’s enough when a plan is solidified months from now?  I say let them fold — they’re nothing more than societal leeches feeding off taxpayer generosity. Then again, if they are folded too quickly, whatever is left of housing confidence goes out the window. Do we risk taking down the mortgage market heavyweights — flawed as they are — and hope Wall Street doesn’t become more discouraged with housing? That alone could be dangerous for the overall health and well-being of a frantic market — and wreak havoc on the Fed’s balance sheet. According to reports, the two companies could be turned into “wholly owned government agencies that buy and hold pools of MBS, which would return to the original, post-Depression model for Fannie Mae,” according to Reuters . “But analysts say such a move is highly unlikely because it would dramatically increase the government’s role and make a dire U.S. budget deficit situation even worse.” Others want to privatize the firms. But the same report maintains “that also seems unlikely, as government support for housing is seen by many as akin to a birthright.” Whatever the case may be, Obama wants to deliver a proposal to Congress by January 2011. And it’ll be quite an interesting outcome. A world without Fannie and Freddie The backbones of our housing market are finally buckling under the weight of a faltering market — even after a $400 billion injection. And taxpayers are still responsible for another $6-$8 trillion in obligations because of them. These two giants were the biggest reasons why the housing bubble popped in the first place. They made it…

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