The trends that drove gold prices higher in 2010 are still in place. In the U.S., the Federal Reserve is buying $600 billion in treasuries in an attempt to keep interest rates low. Low interest rates encourage higher gold prices.

In Europe, the situation is still unstable. The European Central Bank (ECB) has stepped up its purchases of member nations' bonds. Spain is still on the table as a country teetering on verge of a bailout. Until the European mess is settled, gold remains a surrogate currency.

Continue reading Analysts Forecast Higher Gold Prices in 2011

Analysts Forecast Higher Gold Prices in 2011 originally appeared on BloggingStocks on Sun, 02 Jan 2011 14:15:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Time to Redial Telefonica

Chasing Value: Time to Redial Telefonica originally appeared on BloggingStocks on Fri, 03 Dec 2010 14:30:00 EST. Please see our terms for use of feeds.

Continue reading Is Spain the Next Debt Domino?

Is Spain the Next Debt Domino? originally appeared on BloggingStocks on Mon, 29 Nov 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading The Irish Bank Bailout and Spain's Downgrade

The Irish Bank Bailout and Spain's Downgrade originally appeared on BloggingStocks on Fri, 01 Oct 2010 11:30:00 EST. Please see our terms for use of feeds.

Options Update: AIG Volatility at 28-Month Lows originally appeared on BloggingStocks on Thu, 30 Sep 2010 17:30:00 EST. Please see our terms for use of feeds.

So you thought the sovereign debt crisis in Europe was over? Wrong. For the past two months we've had a temporary respite. The euro rose and we got a nice warm and fuzzy feeling. But now the problem is back.

According to Bloomberg Markets Magazine's October issue, even though Europe did stress tests on their banks, there is still concern that one or more countries could default. Banks hold sovereign debt bonds from many different countries. That is putting pressure on all eurozone banks.

A default by Greece could trigger the collapse of banks with large holdings of Greek debt. Europe's largest banks hold €134 billion in Greek, Portuguese and Spanish government bonds.

Continue reading Worries of European Sovereign Default Rattle the Markets

Worries of European Sovereign Default Rattle the Markets originally appeared on BloggingStocks on Tue, 07 Sep 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Trouble in Spain Does Only Modest Damage (BAC, CSCO, F, BP, HAL, SLB, RIG)

Closing Bell: Trouble in Spain Does Only Modest Damage (BAC, CSCO, F, BP, HAL, SLB, RIG) originally appeared on BloggingStocks on Fri, 28 May 2010 17:00:00 EST. Please see our terms for use of feeds.

If you believe the economic recovery is just beginning, then the sell-off this week was a welcome opportunity. If you bought any stocks two weeks ago, you were hurting, but if you were looking to buy, opportunity was at the front door. Will the rally that started last July when the DJIA traded at 8058 continue? Or is this the apex, having touched 11,309 (up 40% in less than a year), and the only direction is down? I don't think so. Here's why.

The U.S. economy is recovering. All the data from manufacturing to housing sales, even employment (224,000 non-farm workers were added in April, 290,000 total workers found new jobs), show improvement.

Car sales were up 25% for most automakers in the month of April compared to last year's April. Factory orders rose 1.3% in March, helped by higher demand for machinery, appliances, and primary metals. Analysts thought the number would be negative .1%. Pending home sales rose a seasonally-adjusted 5.3% in March. Again, analysts thought the number would be 4%. Pending home sales for the year to date are now up 21.1% from a year ago.

Continue reading Comfort Zone Investing: If You Believe ...

Comfort Zone Investing: If You Believe ... originally appeared on BloggingStocks on Sat, 08 May 2010 10:30:00 EST. Please see our terms for use of feeds.

Continue reading Is the Eurozone History?

Is the Eurozone History? originally appeared on BloggingStocks on Tue, 04 May 2010 10:00:00 EST. Please see our terms for use of feeds.

When the financial meltdown struck in the United States in 2008, the contagion quickly spread throughout the world, including the European Union (EU). However, unlike the Federal Reserve, which has unilateral authority to act on behalf of the United States, the EU has no such authority.

The EU barely survived 2008 and 2009. Then this year, Greece had difficulty refinancing its sovereign debt. Again, unlike the United States, where the debt came from financial institutions, in Greece the debt is government debt.

Continue reading The European Banking Crisis: An Overview

The European Banking Crisis: An Overview originally appeared on BloggingStocks on Sun, 02 May 2010 09:40:00 EST. Please see our terms for use of feeds.

Continue reading Aid Package to Greece Now Priority After Contagion Fear Rises

Aid Package to Greece Now Priority After Contagion Fear Rises originally appeared on BloggingStocks on Thu, 29 Apr 2010 10:30:00 EST. Please see our terms for use of feeds.

During a crisis, never mind what the media or government officials are saying, follow the money.

The Mercantile Exchange (CME) posts open contracts for each currency traded -- both long and short positions. By subtracting them you can get a sense of whether traders are net long or short. In the case of the euro, traders are net short 40,000 contracts or nearly $8 billion.

Meanwhile, officials of struggling countries, Greece, Spain and Portugal are telling the media that they have things under control. Elena Salgado, Spanish finance minister and Jose Manuel Campo, her deputy flew to London to meet with bondholders, the Financial Times reports. They want to reassure promises to cut Spain's budget deficit by 3% of GDP by 2013. But then the treasury wants to raise 116.7 billion euros.

Continue reading Traders Are Net Short the Euro by $8 billion

Traders Are Net Short the Euro by $8 billion originally appeared on BloggingStocks on Tue, 09 Feb 2010 10:40:00 EST. Please see our terms for use of feeds.

Looking back just a few weeks, the markets ushered in the new year with euphoria. Within a few short weeks, things have turned sour. The Dow dropped below the 10,000 mark last week. S&P 500 is down 7.3% from its 15-month closing peak.

Now the question facing investors and traders is whether the market is in a corrective phase. Eric Kuby of NorthStar Investment Management Group thinks so. "I'm in the camp that believes that we are in a correction," he said.

Continue reading Are U.S. Stocks in a Correction Phase?

Are U.S. Stocks in a Correction Phase? originally appeared on BloggingStocks on Sun, 07 Feb 2010 16:40:00 EST. Please see our terms for use of feeds.

On Thursday, markets across Europe, Asia and the U.S. sold off sharply. The reason is concern over Greece, Spain and Portugal being unable to manage their sovereign debts. The problem did not vanish overnight. The spread between the Greek and German 10-year government debt expanded since Thursday. Investors and traders sold the euro and bought dollars. Again on Friday, even with the Swiss Central Bank selling its own currency, the euro is still under pressure.

The dollar is strong again Friday, with the U.S. dollar index trading at 80.39, up .315 (8:30 EDT). In contrast, the euro has fallen 1.1% so far this week. This is the fourth consecutive week of losses.

Continue reading Dollar Rallies as Worries Over Greece, Spain and Portugal Debt Persist

Dollar Rallies as Worries Over Greece, Spain and Portugal Debt Persist originally appeared on BloggingStocks on Fri, 05 Feb 2010 10:30:00 EST. Please see our terms for use of feeds.

Continue reading Buying Euros, Selling Dollars a Slam-Dunk Winning Strategy? Not Quite

Buying Euros, Selling Dollars a Slam-Dunk Winning Strategy? Not Quite originally appeared on BloggingStocks on Mon, 01 Feb 2010 17:00:00 EST. Please see our terms for use of feeds.

Europe is hot, if you don't look too far over your shoulder. The Dow Jones Stoxx 600 Index played well through the stock market recovery of 2009, ticking up 28% (60% from its March 2009 low). This was the index's best annual performance in a decade.

Basic resources and banks gained 100% and 46%, respectively, this year, after having turned in dismal performances the year before. China helped, as well, with its elevated economic growth forecast good for another 0.5% gain during the shortened week of Christmas.

Continue reading Good Year, Bad Decade for Europe

Good Year, Bad Decade for Europe originally appeared on BloggingStocks on Sun, 03 Jan 2010 16:50:00 EST. Please see our terms for use of feeds.

While we may be focused on unemployment in the United States, the loss of jobs has become a truly global affair. Next year, unemployment rates in the industrialized world are expected to hit their highest levels since the second world war, according to the Organization for Economic Cooperation and Development (OECD).

Projections put the jobless rate for the 30 countries that belong to the OECD at 10% in the second half of 2010, which translates to 57 million people without jobs. Unemployment reached its highest post-war level in June at 8.3%. The organization calls the short-term outlook "grim," especially with the early stages of a recovery next year anticipated to be cautious.

Continue reading OECD: 2010 unemployment to pass WWII level

OECD: 2010 unemployment to pass WWII level originally appeared on BloggingStocks on Thu, 17 Sep 2009 11:20:00 EST. Please see our terms for use of feeds.

Yes, you may hear that the corporate bond market is breathing again and the exotic "TED spread" -- the difference between T-Bill and LIBOR rates -- is shrinking, but no one is lending money to anyone and confidence is non-existent.

Recently the entire country of Spain (meaning Spanish national debt) was put on credit watch due to deteriorating economic conditions.

Remember, the Wall Street Crash of 1929 and the Great Depression (I am not forecasting either one, by the way) started at a medium-sized bank in Austria, not on Wall Street or in London.

Credit markets are not only frozen because we don't know what is on the banks' balance sheets; they are also frozen because banks are repairing their own balance sheets by hoarding capital.

Be sure to read all 7 reasons the stock market isn't going up any time soon.

Michael Shulman is a contributor to OptionsZone.com.

Seven reasons the market is not going up any time soon: #3 Credit markets remain frozen originally appeared on BloggingStocks on Sun, 25 Jan 2009 16:00:00 EST. Please see our terms for use of feeds.

One way investors/readers could characterize the current environment is as a world filled with concerns.

Concern about the U.S. housing sector. Concern about declining U.S. disposable income. Concerning about slowing GDP growth in Europe and Asia. Concern about the Yankees not winning the American League pennant.

O.K., that last item was a purely subjective, parochial one, but you get the point: there's concern that global economic conditions are worsening, not improving.

Europe's GDP is latest focal point

Further, while emerging markets in Asia, led by China and India, have been the growth story of the decade, the region really sending a chill up economists' -- business executives' -- spines is Europe, so says economist Glen Langan.

"Up through July we had seen weakness in Italy, Greece, Spain, and Portugal, and the investment community's response was one of 'no big deal, they are not the major growth regions, anyway,'" Langan said. "But now there's signs of slowing in Germany, France, and the United Kingdom, and nearly every demand-side indicator is in retreat. It's a pronounced psychological shift, no question."

Continue reading Right now, it's a globe filled with economic concerns

Right now, it's a globe filled with economic concerns originally appeared on BloggingStocks on Sat, 16 Aug 2008 13:40:00 EST. Please see our terms for use of feeds.

Continue reading American Airlines, British Air, Iberia sign joint venture deal

American Airlines, British Air, Iberia sign joint venture deal originally appeared on BloggingStocks on Thu, 14 Aug 2008 12:12:00 EST. Please see our terms for use of feeds.