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Doubling Stocks Review: Is this a scam? If you are looking for the truth about doubling stocks this is a necessity. One always thought there was something wrong with a doubling of stocks.

Wednesday, July 13, 2011

The IEA Justifies Oil Hasn't Lowered The Price

Marker crude prices fell by $5/bbl immediately after the action was announced. Since then Brent futures have  oscillated  between  $105‐$119/bbl,  and  WTI  between  $91‐$99/bbl.  At  writing,  flat  prices  of $116/bbl  (Brent)  and  $95/bbl  (WTI)  are  close  to  those  seen  immediately  prior  to  the  action,  but  will  doubtless  fluctuate  further  in  the  weeks  ahead.  However,  it  is  blinkered  to  focus  on  specific price  levels,  which  were  never  the  rationale  for  the  action.  Narrower  sweet‐sour  spreads,  modestly  stronger  refining  margins  and  an  easing  of  the  steep  backwardation  evident  before  the  release  on  the  other  hand all suggest a more benevolent market reaction. We acknowledge that the impact of the collective action will  only  be  truly  evident  in  hindsight. However, recognising  the  flexibility  and  market  liquidity  it  has  already  provided, we take a resolutely positive view so

Germany’s stock market has been no exception to these benefits

 Germany, which we have been recommending to overweight over the past few months and which we continued to do. We have four main reasons for being positive on Germany. First, we think German companies are likely to be able to pass on wage increases to their customers, and capacity utilization implies scope for price increases. Second, robust earnings growth and waning risk aversion opens scope for multiple expansion. Third, its has a high degree of cyclicality and export orientation, as the country is benefiting from large exposure to exports and emerging markets, as well as from a competitive level of the EUR. Germany strongly profits from global demand as its export share amounts to around 40% of GDP. And fourth, undemanding valuation in terms of traditional valuation multiples, especially in terms of market-implied valuations. If P/E ratios for the DAX were to revert to their historic average of 15 times 12-month forward earnings, the DAX would quote above 10,000 on current earnings, which are now above the 2007 highs (see Figure 1). We like Adidas, Allianz, BASF, BMW, Daimler, Deutsche Post, Fresenius Medical Care, Henkel pref., Infineon, SAP, Siemens and Volkswagen.”

Why The Euro Is Not Worth Saving

The Euro crashed yesterday to record lows against the Swiss Franc, and interest rates on Italian and Spanish bonds have hit record highs.

Eurozone crisis is a result of fears that the contagion is now hitting Italy. With a two-trillion dollar economy and $2.45 trillion in debt, Italy is too big to fail and the European authorities are worried.

Although there is currently little basis for the concern that Italy’s interest rates could rise high enough to put its solvency in jeopardy, financial markets are acting irrationally and elevating both the fear and the prospects of a self-fulfilling prophesy.

The fact that the European authorities cannot even agree on how to handle the debt of Greece – an economy less than one-sixth the size of Italy – does not inspire confidence in their capacity to manage a bigger crisis.

The weaker Eurozone economies – Greece, Portugal, Ireland, and Spain – are already facing the prospect of years of economic punishment, including extremely high levels of unemployment (16, 12, 14 and 21 percent, respectively).  Since the point of all this self-inflicted misery is to save the Euro, it is worth asking whether the Euro is worth saving. And it is worth asking this question from the point of view of the majority of Europeans who work for a living, i.e., from a progressive point of view.

It is often argued that the monetary union, which now includes 17 countries, must be maintained for the sake of the European project. This includes such worthy ideals as European solidarity, building common standards for human rights and social inclusion, keeping right-wing nationalism in check, and of course the economic and political integration which underlies such progress.

But this confuses the monetary union, or Eurozone, with the European Union itself. Denmark, Sweden, and the UK, for example, are part of the EU but not part of the monetary union. There is no reason that the European project cannot proceed, and the EU prosper, without the Euro.

And there are good reasons to hope that this may happen. The problem is that the monetary union, unlike the EU itself, is an unambiguously right-wing project. If this has not been clear from its inception, it should be painfully clear now, as the weaker Euro-zone economies are being subjected to punishment that had previously been reserved for low- and middle-income countries caught in the grip of the International Monetary Fund (IMF) and its G-7 governors.

Instead of trying to get out of recession through fiscal and/or monetary stimulus, as most of the world’s governments did in 2009, these governments are being forced to do the opposite, at enormous social cost. The insults added to injury, as with the privatizations in Greece or “labor market reform” in Spain; the regressive effects of the measures taken on the distribution of income and wealth; and the shrinking and weakening of the welfare state, while banks are bailed out at taxpayer expense – all this advertises the clear right-wing agenda of the European authorities, as well as their attempt to take advantage of the crisis to institute right-wing political changes.

The right-wing nature of the monetary union had been institutionalized from the beginning. The rules limiting public debt to 60 percent of GDP and annual budget deficits to 3 percent of GDP – while violated in practice, are unnecessarily restrictive in times of recession and high unemployment. The European Central Bank’s mandate to care only about inflation, and not at all about employment, is another ugly indicator.

The U.S. Federal Reserve, for example, is a conservative institution but it is at least required by law to concern itself with employment as well as inflation. And the Fed -- for all its incompetence in failing to recognize an $8 trillion housing bubble that crashed the U.S. economy -- has proved to be flexible in the face of recession and a weak recovery, creating more than $2 trillion as part of an expansionary monetary policy. By comparison, the extremists running the European Central Bank have been raising interest rates since April, despite depression-level unemployment in the weaker Eurozone economies.

Some economists and political observers argue that the Eurozone needs a fiscal union, with greater coordination of budgetary policies, in order to make it work. But right-wing fiscal policy is counter-productive, as we are witnessing, even were it to be better coordinated. Other economists – including this one – have argued that the large differences in productivity among the member economies present serious difficulties for a monetary union. But even if these problems could be overcome, the Eurozone would not be worth the effort if it is a right-wing project.

European economic integration prior to the Eurozone was of a different nature. Unlike the “race-to-the-bottom” approach of the North American Free Trade Agreement (NAFTA) – which displaced hundreds of thousands of Mexican farmers while contributing to reduced wages and manufacturing employment in the U.S. and Canada – the European Union made some efforts to pull the lower-income economies upward and protect the vulnerable. But the European authorities have proved to be ruthless in their monetary union.

The idea that the Euro must be saved for the sake of European solidarity also plays on an oversimplified notion of the resistance that taxpayers in countries such as Germany, the Netherlands, and Finland have demonstrated to “bailing out” Greece. While it is undeniable that some of this resistance is based on nationalist prejudice – often inflamed by the mass media – that is not the whole story. Many Europeans don’t like to pay the bill for bailing out European banks that made bad loans. And the EU authorities are not “helping” Greece any more than the U.S. and NATO are “helping” Afghanistan – to take a somewhat analogous debate where those who oppose destructive policies are labeled “backward” and “isolationist.”

It appears that much of the European left does not understand the right-wing nature of the institutions, authorities, and especially macroeconomic policies that they are facing in the Eurozone. This is part of a more general problem with the public misunderstanding of macroeconomic policy worldwide, which has allowed right-wing central banks to implement destructive policies, sometimes even under left governments. These misunderstandings, along with the lack of democratic input, might help explain the paradox that Europe currently has more right-wing macroeconomic policies than the United States, despite having much stronger labor unions and other institutional bases for more progressive economic policy.