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Monthly Archives: March 2013

42 Things About Motivation

“When it comes to motivation and performance, few focus on what they’re doing or how to improve it. They might respond to specific feedback from a boss, but rarely examine what motivates them to do their best at their job or in life.

Luckily, there’s a large body of research focusing on how people can get the most out of themselves, and how managers can unlock employee potential.

For example, making too many decisions in a day depletes your willpower, setting goals can backfire, and employees have a hard time working for managers who emphasize their own power….”

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Rosenberg Says D.C. Will Cause The Next Recession

“Improving U.S. economic data, including today’s strong personal income and spending report, has economists cranking up their forecasts for GDP growth.

However, the economy is nevertheless fragile and the risk of a recession is always within sight.

But what could cause the economy to tip into recession?

Some think that it could be premature tightening by the Federal Reserve. Or spillover from the euro crisis. Or a hard landing in China.  Or turmoil in the Middle East.

Gluskin Sheff economist David Rosenberg thinks it won’t be any of those.  Rather, he thinks if we slip into a recession, it’ll be Washington’s fault.

From Rosenberg…”

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Barron’s: Stay the Course in the U.S., There is No Alternative

“Business periodicals get a bad wrap for making market calls.

However, Barron’s continues to be unapologetically bullish.

In this week’s magazine, Randall Forsyth reviews how the Dow and S&P 500 marched to all-time highs despite the uncertain backdrop.

And his ultimate message is to stay bullish.

All of which shows it doesn’t pay to worry about such things as fiscal drag, the inevitable rise in interest rates, the ever-more precarious situation in Europe, and the uncertain outlook in China. Indeed, these are reasons to be bullish. With risks abroad and interest rates near zero, it’s been dubbed a TINA market — as in There Is No Alternative to U.S. stocks as a place to store your money.

Forsyth argues we can ignore recent tax hikes and budget cuts.  He also argues that a break-up of the euro zone would be bullish as investors would likely shift there assets to the U.S.  Furthermore, bonds continue to be an unattractive place to be, which leads him to the Federal Reserve…”

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$FB Phone Expected Shortly, You May Never Buy Minutes Again

“………..MG Siegler, partner at venture firm CrunchFund and notable tech blogger, thinks a Facebook phone could turn carriers into the “dumb pipes they were meant to be.”

He writes:

Presumably, [Facebook will] have at least one on board with the HTC phone. Facebook has been making a lot of noise about “free calls” within their Messenger apps — this could all but destroy the notion of cellular “minutes”.

Of course, that writing has been on the wall for some time. Data phones are the way going forward. Still, the carriers must be a little scared of the post-minutes, post-SMS world that this Facebook Phone highlights. It’s a huge change. The carriers are finally becoming the dumb pipes they were meant to be.

This particular Facebook phone may not be the device that mucks up their business models forever. But carriers have to know their days of making easy money on minutes are numbered.”

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COO Dixon to Become Interim CEO of $CHK

“(Reuters) – Chesapeake Energy Corp appointed Chief Operating Officer Steven Dixon as interim chief executive officer on Friday and made him part of a three-person committee to search for a replacement for Aubrey McClendon.

McClendon is expected to step down on Monday.

In a statement Chesapeake, the second-largest producer of natural gas, said its board has established an Office of Chairman to steer the company after McClendon leaves. The three-man team will also include Chesapeake’s non-executive Chairman Archie Dunham and Chief Financial Officer Domenic Dell’osso.

McClendon’s departure was announced in late January, following a governance crisis and a liquidity crunch caused by heavy spending on oil and gas properties, and a collapse in the price of natural gas.

Chesapeake’s board is considering both internal and external candidates for the job they had initially said would be filled by April 1….”

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China Feathers Ruffled as We Limit IT Imports

“BEIJING (Reuters) – China expressed “resolute opposition” and “strong dissatisfaction” with a newU.S. cyber-espionage rule limiting imports of Chinese-made information technology products, state media reported on Saturday.

The remarks underscore growing tension between the world’s top two economies after the United States accused China of backing a string of hacking attacks on U.S. companies and government agencies.

China says the accusation lacks proof and that it is also a victim of hacking attacks, more than half of which originate from the United States.

The new provision, tucked into a funding bill signed into law on Thursday, requires NASA, as well as the Justice and Commerce Departments, to seek approval from federal law enforcement officials before buying information technology systems from China.

The United States imports about $129 billion worth of “advanced technology products” from China, according to a May 2012 report by the U.S. Congressional Research Service.

State media including Xinhua, the China Daily and the People’s Daily, quoted a spokesman for the Ministry of Commerce as saying the U.S. bill “sends a very wrong signal”.

“This will directly impact partnerships of Chinese enterprises and American business as they conduct regular trade,” said Shen Danyang, the commerce ministry spokesman….”

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Big Banks Win a Key Dismissal in Antitrust Allegation Trial Concerning Libor

“Banks including Bank of America Corp.Barclays Plc (BARC) and JPMorgan Chase & Co. (JPM) won dismissal of antitrust claims in lawsuits alleging they rigged the London interbank offered rate.

More than two dozen interrelated lawsuits are before U.S. District Judge Naomi Reice Buchwald in New York alleging the banks conspired to depress Libor by understating their borrowing costs, thereby lowering their interest expenses on products tied to the rates. Potential damages were estimated to be in the billions of dollars.

Buchwald yesterday issued a 161-page ruling dismissing antitrust allegations against the banks while allowing some commodities-manipulations claims to proceed to a trial.

“We recognize that it might be unexpected that we are dismissing a substantial portion of plaintiffs’ claims, given that several of the defendants here have already paid penalties to government regulatory agencies reaching into the billions of dollars,” Buchwald wrote. “There are many requirements that private plaintiffs must satisfy but which government agencies need not.”

Libor is a key metric for setting interest rates for trillions of dollars in financial instruments. It fixes the rates under which banks lend money to one another for as little as a day and as long as a year. Rates for 10 different currencies including the U.S. dollar, Japanese yen and British pound are computed daily after canvassing banks that comprise membership panels for each type of money.

Global Probes…”

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Documentary: Zero

You can’t call 1000’s of people conspiracy theorists….can you ?

This documentary has a collection of highly respected people from all walks of life.

Professionals in their own right who collectively stand as one to ask simple questions that have yet to be answered.

Cheers on your weekend!

[youtube://http://www.youtube.com/watch?v=8XRMrMdn0NQ 450 300]

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The Big Bull Market Road Map for April

“The end of March brought on the last trading of the quarter, with the S&P Index hitting new all-time closing highs in what felt like a very choppy couple of weeks. While we still have not raised our official 14,590 price target for the Dow Jones Industrial Average as the peak for 2013, we will be adjusting that number by the end of the first week of April. 24/7 Wall St. has laid a blueprint and road map for what you should watch for in the month of April as the bull market continues despite the woes in Europe.

We evaluated many key market and economic issues for this April bull market road map. Companies raising dividends, the lists of stocks to buy and stocks to sell, the top merger trends, activist investors, gold and oil, tax issues, quantitative easing, the best bank stocks to buy, the earnings season on the way and many more key issues were considered….”

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U.S. Savings Rate Near Record Lows

“There was some good news for headline scanning algos this morning, when both personal incomes and spending came in modestly higher than expected, with incomes rising 1.1% compared to an estimated 0.8% increase, while spending was up 0.7%, also higher than the 0.6% expected. But while the superficial headline grab did indicate a modestly better climate for both spending and incomes, it was a look under the cover once again that revealed the full extent of the pain that US consumers continue to find themselves in, over 5 years since the start of the second great depression.

First, the bulk of the bounce in spending was driven by a surge in Non-Durable Goods, which rose by $48.5 billion in one month, and amounting to 61% of the total increase in personal outlays in February. This was the biggest monthly jump since the onset of the financial crisis: hardly inspiring much confidence for those companies which are wondering whether to ramp up capital expenditures and spending, especially since spending onDurable Goods declined by $400 million in February….”

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Russia Considers Limiting Cash Transactions

“The Russians are taking a page from the Europeans book (and not a positive one for libertarians). Given the substantial criminal activity and illegal entrepreneurship in Russia – the grey and black economies account for 50–65 percent of GDP and estimates that about $50 billion was taken out of Russia illegally in 2012 alone – the great and glorious leaders have decided to impose restrictions on cash transactions. As Russia Beyond The Headlines reports, Russia may ban cash payments for purchases of more than 300,000 rubles (around $10,000) starting in 2015 – starting with a higher ($19,500) restriction in 2014. They will also enforce mandatory cash-free salary payments (cash compensation accounts for 15% of GDP currently) in an effort to both bring some of the population’s ‘grey’ income out of the shadow; and increase the volume of cash reserves in the banks. It would appear that wherever we look now, leadership are realizing that the limits of fiscal and monetary policy have been reached and now changing rules, limiting freedom, and outright confiscation are the only way to maintain a status quo. Ironic really, when the enforcement of said rules may just be the catalyst for the end of the status quo as the middle class suffers….”

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Italy Still Has Yet to Form a New Government

“Center-left leader Pier Luigi Bersani has failed in his attempt to find a way out of Italy’s political deadlock and President Giorgio Napolitano will now seek another solution, the president’s palace said on Thursday.

Bersani reported back to Napolitano on Thursday night after being given a mandate almost a week ago to see if he could muster enough support to form a government after the inconclusive election in February.

Napolitano’s office said Bersani, who took the largest share of the vote but failed to win a viable majority, had told him his talks with other parties had ended without resolution and the president would now assess other options “without delay”.

Bersani said he had told Napolitano of “significant, positive elements of understanding” in the talks with groups including Silvio Berlusconi’s centre-right bloc and the populist 5-Star Movement led by ex-comic Beppe Grillo.

“I also explained the difficulties deriving from objections or conditions which I did not consider acceptable.” …”

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Slovenia Becomes the Next Sovereign Debt Target as Yields Push Over 7%

“Cyprus may be a “special case” in the eyes of European officials, but their handling of its bailout is taking a toll on another small euro zone member with an over-burdened banking sector – Slovenia.

Yields on its two-year bonds surged to nearly 7 percent on Thursday, overtaking those on longer-dated paper and inverting the yield curve – a sign investors are pricing in a high risk of default.

Slovenia issued its first bond in 19 months in October and former Prime Minister Janez Jansa has said the country must sell another bond by June 6, when 907 million euros of 18-month treasury bills mature, to meet its financial obligations.

Contagion from Cyprus, which clinched a bailout deal on Monday at the expense of large bank depositors, has made that task more challenging and the prospect of a rescue more likely.

“One way or another things are coming to a head. June is a long way away for these guys now, so they need to do something,” said Tim Ash, head of emerging markets research ex-Africa at Standard Bank.

“It’s becoming increasingly likely they are going to have to begin to talk to the IMF and the Troika (about a bailout),” Ash said, referring to lenders including the International Monetary Fund, the European Union and European Central Bank.

The new government has so far declined to say anything about its borrowing plans, but it is expected to tap markets in coming months to repay some 2 billion euros of debt falling due in the middle of this year….”

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The Death of Peak Oil

“On November 7, 1973, President Nixon addressed the nation with a serious warning: America was running out of oil.

The Yom Kippur War had disrupted imports, and there weren’t enough domestic supplies to plug the gap.

As a result, he said, we were going to have to make sacrifices:

…not just here in Washington but in every home, in every community across this country. If each of us joins in this effort, joins with the spirit and the determination that have always graced the American character, then half the battle will already be won.

The immediate crisis actually proved relatively short-lived: after spiking from about $4 to $10, oil prices settled around $13 until 1979, when the Iranian revolution hit.

But the announcement raised from the dead a wild-eyed theory that’d been proposed a generation earlier: American oil production was soon going to peak.

In 1948, M. King Hubbert, a geophysicist for Shell, predicted that given estimates of the amount of crude in the ground and contemporary production rates, we were going to run out of oil by 1965. He articulated his findings eight years later in a paper called “Nuclear Energy And The Fossil Fuels.”

By Hubbert’s own admission, the study didn’t get much reaction.

But with Nixon’s announcement, Hubbert’s hypothesis began to look a lot more credible.

For the next 40 years, “peak oil” became the boogeyman of the U.S. economy. Google ngrams nicely summarizes its hold over the psyche of many Americans.


peak oil

Google ngrams



But today, it is probably safe to say we have slayed “peak oil” once and for all, thanks to the combination new shale oil and gas production techniques and declining fuel use.

With the advent of fracking, U.S. oil production has climbed back to levels not seen since the mid-90s…”

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U.S. Treasuries Fall for a Second Quarter as Investor Believe in Recovery

“Treasury 10-year notes fell for a second quarter, the first back-to-back drop in two years, as investors sought higher-yielding assets amid improved economic data and a Federal Reserve pledge to maintain monetary stimulus.

Yields on the benchmark securities reached 11-month highs as the U.S. unemployment rateunexpectedly fell in February and employers added more jobs than forecast. Payrolls also swelled in March, a report next week may show. The rise in yields was tempered as the bailout of Cyprus and political turmoil in Italy renewed the haven appeal of U.S. government debt.

“The U.S. economic data was stronger in the first quarter than in the fourth, and it has confirmed the notion that while we are not into a roaring recovery, the U.S. economy seems to be on somewhat better footing,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut.

The U.S. 10-year yield increased nine basis points, or 0.09 percentage point, from January through March to 1.85 percent. It touched 2.08 percent on March 8, the highest since April 5, 2012. The yield climbed 12 basis points from October through December. Its last two-quarter rise ended in March 2011.

Ten-year yields fell eight basis points this week in New York, according to Bloomberg Bond Trader prices.

For the benchmark yield to rise to a Bloomberg survey’s median year-end estimate of 2.25 percent, “we will have to see the employment market improve, the situation in Europe subside and the end of the Fed’s quantitative-easing program become apparent,” Lyngen said.

Cheap Levels…”

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The Chinese Yuan Hits a 19 Year High

“China’s yuan rose to a 19-year high after the central bank raised its daily reference rate to the strongest level in more than 10 months.

The People’s Bank of China increased the fixing by 0.08 percent to 6.2689 per dollar, the highest since May 2, 2012. The currency is allowed to trade 1 percent either side of the rate. The Purchasing Managers’ Index for manufacturing in March will be 51, indicating a sixth month of expansion, according to the median estimate in a Bloomberg News survey of economists before official data on April 1. President Xi Jinping is on his first foreign visit since taking over earlier this month and has held meetings with the heads of the so-called BRICs nations of Brazil, Russia and India as well as African countries.

“Investors continue to be convinced about the gradual appreciation of the yuan,” said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp., which oversees $700 million. “The yuan’s recent strength is probably politically driven as Xi is on overseas visits.” …”

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Industrial Output Unexpectedly Falls in South Korea

“South Korea’s industrial production unexpectedly fell in February, signaling that a recovery in Asia’s fourth-largest economy may be slower than expected as a weaker yen threatens exports.

Output fell 0.8 percent last month from January when it fell 1.2 percent, Statistics Korea said today. The median estimate of 10 economists in a Bloomberg News survey was for a 0.3 percent gain. Production fell 9.3 percent from a year earlier, a decline partly attributable to February having fewer working days this year because of the Lunar New Year holiday….”

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Analysts Predict a Rebound in Japanese Manufacturing, Best Performance Since Earthquake

Japan’s manufacturers predict a rebound in production this month after the deepest slide since the aftermath of the March 2011 earthquake, with the central bank poised to step up monetary stimulus next week.

Industrial output will rise 1 percent in March after a 0.1 percent on-month drop in February, according to forecasts submitted for a Trade Ministry report released in Tokyo today. Production tumbled 11 percent in February from a year earlier, the steepest since April 2011, reflecting last year’s recession….”

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Consumer Spending Jumps the Most in Five Months

“Consumer spending in the U.S. climbed in February by the most in five months as incomes rose, signaling an improving job market is spurring demand.

Household purchases, which account for about 70 percent of the economy, gained 0.7 percent after a 0.4 percent advance the prior month that was bigger than previously estimated, a Commerce Department report showed today in Washington. The median estimate in a Bloomberg survey of 78 economists called for a 0.6 percent rise. Incomes increased 1.1 percent, more than projected, sending the saving rate up from a five-year low.

Labor market progress and an increase in household wealth linked to rising home values and stocks are helping Americans cushion the fallout of higher payroll taxes and costlier fuel. Strength in purchases is one reason economists project the economy picked up this quarter after slowing to a 0.4 percent annual rate in the final three months of 2012.

“The economy is in a very good place right now ahead of the fiscal restraint,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “This recovery is sustainable. Consumers are in the driver’s seat.” …”

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