As expected with the coming of the summer months, oil prices have surged over the last couple of weeks from $40 to $60. Fueled by a slew of recent economic data which points to an easing of the recession, investors have been snapping up oil stocks as well as increasing their trade positions in the commodities market. Upward pressure from economic data, which suggest future supply, will be cut at an even more rapid pace than demand is dropping and political turmoil in the Nigeria’s oil rich south will help to lengthen black gold’s recent success.
Treasury Secretary Timothy Geithner is proposing requirements that will improve the transparency of over the counter derivatives trading on instruments such as interest rate and credit default swaps. Geithner calls for electronic execution of trades to replace the current system, which mostly involves telephone orders. The goal is to make price information on these derivatives continuously available to investors via electronic means, much like stock and options price data. The increased transparency will level the proverbial playing field by preventing price manipulation and will reduce risk to “less sophisticated investors”.
Gillian Tett’s new book, “Fool’s Gold”, is a refreshing and innovative approach to the failings of financial institutions, in that she convincingly ties such failings to the personalities and tribal behavioral patterns of the bankers and economists who putatively cause them. As a trained anthropologist, Tett is well qualified to examine tribal behavior, and her research demonstrates quite clearly that it is alive and well at the corporate level. In her view, the current global credit crisis was unleashed by a relatively small tribe of bankers at J.P.Morgan, a wholesaler of financial services and a significant part of JPMorgan Chase & Co (JPM) which is a leading global financial services firm with assets of $2.1 trillion.
According to a recent article in the Wall Street Journal, “Civilian air-traffic computer networks have been penetrated multiple times in recent years”. The article goes on the describe a disturbing incident in which hackers stole a network administrator’s password and used it to install malicious code on air traffic control computers. Security experts have identified vulnerabilities in current air traffic control software, 763 of which are classified as “high risk”. The potential for hacker to gain access to air traffic control has both the airline industry and the FAA worried about security. The question looming large in the minds of our legislators is, “What could happen if terrorists were to gain access to air traffic control systems?” Of course the question investors are asking is, “Which companies will benefit from the new air-traffic control upgrade?”
Wouldn’t it be nice to make money, even if the stock market didn’t go up or down? Well, there’s a way to do it and it’s called the Iron Condor. An iron condor is a stock options strategy and a lot of investors eyes start to glaze over when they hear stock options, because they think stock options are either really really dangerous, or really really complicated.
For owners of construction stocks, the fallout of the subprime lending crisis has hit home in a big way. With prospective homeowners finding it difficult to obtain credit, this is not a good time to be in the process of selling new homes. Business construction has slowed too, as more companies are cutting back instead of adding to their existing facilities. Even in the worst of times, however, there are always companies still able to weather the storm. Here are four construction stocks whose strong performance will help build your portfolio:
On April 22nd, the U.S. Energy Departmentannounced that it will spend $6 billion to clean up nuclear weapons facilities dating back to the Cold-War era. This endeavor is part of Barrack Obama’s stimulus package, and more than half of the money is going toward clean up in South Carolina and Washington. In total, twelve states will receive funding to clean up nuclear and other hazardous waste left behind from the Cold War. This plan has the potential to be a lucrative opportunity for investors as there are only a handful of companies who specialize in hazardous waste clean up. These companies include American Ecology (ECOL), Clean Harbors (CLH), and Perma-Fix Environmental Services (PESI).
We live in an age and environment when, no matter what threat we face, there are organizations that stand to benefit. The current swine flu outbreak (more scientifically known as H1N1) is no exception. Several large international companies are well placed to gain from what is now being referred to as a pandemic. The two essentials in combating this flu will undoubtedly be diagnostics and treatment via antiviral drugs and vaccines.