Gold prices rose above $1,000 per ounce on Tuesday to its highest since March 2008 -- suggesting investors are wary of the U.S. dollar's weakness and expect international interest rates to remain low for some time.
The gold contract for December delivery traded up $6.50, or 0.7 percent, at $1,003.20 per troy ounce on the New York Mercantile Exchange. It had gone as high as $1,009.70; that is the highest since it hit a record of $1,033.90 on March 17 last year.
Gold is typically bought as an alternative to the dollar among safe-haven assets favored by investors seeking to preserve capital. So its rise often correlates to a drop in the value of the American currency.
That is what happened in spring of 2008, when worries about the financial crisis brewing in the U.S. helped drive gold to a record. Gold last went over $1,000 in February.
"It is mainly the reflection of the weakness of the dollar," said Julian Jessop, economist at Capital Economics.
The dollar fell to 92.32 yen on Tuesday from 93.05 yen the night before, while the euro strengthened to $1.4467 from $1.4332 as stock markets rose and investor sentiment improved.
Jessop noted, however, that gold was also being boosted by market expectations that global central banks would keep their interest rates low for some time to come. One disadvantage to holding gold is that no interest is earned -- but rates on dollar-denominated assets such as government bonds have fallen sharply, lessening that disadvantage.
"Near-zero interest rates in many of the world's largest economies reduces the opportunity cost of holding gold," Jessop said.
The fact that 20 of the world's rich and developing nations promised over the weekend to keep in place their stimulus measures -- which include both spending as well as low interest rates -- reinforced the appeal of gold.
Jessop was not convinced gold could sustain such high prices for very long or push much higher, since consumers quickly start selling gold items to take advantage of stronger prices.
Shares of JDS Uniphase Corp. climbed Thursday after the communications equipment maker posted a smaller-than-expected loss for its fiscal fourth quarter.
The company posted a wider loss than the year-ago period, and its revenue fell slightly below expectations. But it said it has "successfully navigated through the global economic turbulence that took place in fiscal 2009" and it's in a good position to grow when the economy rebounds.
RBC Capital Markets analyst Mark Sue said JDS Uniphase is "is the latest company to point to stabilizing trends, as evidenced by its improved order rates."
Improving trends in North America, offset by challenges in Europe led to the company's revenue guidance $283 million to $300 million for the current quarter, Sue added. This compares with analysts expectations of $287.7 million, according to a Thomson Reuters poll.
"Notably, through the first seven weeks of (the fiscal first quarter), JDSU saw a sequential increase in demand across all businesses," the analyst wrote. Sue rates the company "sector perform."
Shares of the Milpitas, Calif.-based company rose 45 cents, or 8 percent, to $6.24 in late trading. The stock has traded in the 52-week range of $2.01 and $11.98.
Las Vegas Sands shares in the US rose on Thursday after the cash-strapped company announced it had applied for a possible listing in Hong Kong that is estimated would raise as much as $2bn this year.
The casino operator, controlled by tycoon Sheldon Adelson, said it had filed an application with the Hong Kong stock exchange but no decisions had been made regarding the timing or terms of any such offering, according to a filing to the Securities and Exchange Commission.
Las Vegas Sands has been considering a Hong Kong public offering of its Macao assets for some months as the company aims to raise funds to complete its partially built projects in the world’s biggest casino market.
The spin-off had been made possible after its bankers agreed to amend a $3.3bn credit facility last week, which allowed the company to sell a minority interest of its Asian businesses, while $500m of the proceeds must be used to repay debts.
Las Vegas Sands, which has been struggling to service its debts, also said its lenders had agreed to give it six quarters of relief from its covenants and the option of issuing up to $1.5bn in bonds.
While the company did not say how much it planned to raise in Hong Kong, JPMorgan analysts said the size of the listing, which could take place in late November or early December, was likely to be from $1bn to $2bn.
“We believe this moves LVS one step closer to a clearer path of much-needed improving liquidity and balance sheet de-levering,” said the analysts, who estimated that the company could sell 25 per cent to 30 per cent of the operations.
The share sale would be an important boost to the company’s balance sheet. Las Vegas Sands, which has opened two of the world’s largest casinos in Macao, has been forced to halt construction on some projects and slash thousands of jobs because of its financial problems.
Macao casino companies are experiencing a tough operating environment as the global financial crisis and Beijing’s visa policies dissuaded people from gambling. First-half gaming revenues dropped 12.4 per cent year on year to $6.4bn.
Las Vegas Sands shares rose 3.5 per cent to $13.19 on Thursday after earlier reaching a high of $13.47. The stock has jumped about 40 per cent this month.
Long-suffering Sirius XM investors who’ve held onto the stock despite its troubles are being rewarded for their perseverance. Sirius (SIRI) shares are up over 13 percent today at 68 cents. And they’re up about 26 percent for the week.
Why? A few reasons. First, there’s the government’s “cash for clunkers” program, which will likely stimulate new car sales and new Sirius subscriptions thanks to the satellite radio trials often packaged with new cars.
Then there are rumors of new iPod-related hardware that may or may not debut at the company’s holiday gift-guide event next week. Scheduled for Wednesday, that gathering promises “a new line-up of accessories…for the home, office, vehicle and beyond.” This has led some folks to speculate that we’ll soon see a Sirius dock for the iPod/iPhone.
As the U.S. economy continues to writhe in the clutches of recession, sustainable growth — both in corporate profits and economic output — seems distant.
In China, however, near-term recovery is a reality.
Real estate, automobile, and industrial sales have all rebounded, driving stocks on the Shanghai exchange up as much as 85% for the year.
In fact, the acceleration of China's comeback has been so strong the World Bank recently increased its estimate for the country's GDP growth this year from 6.5% to 7.2%.
All of this makes China an alluring prospect for investors again. Especially when you consider. . .
China's Gold Investment Potential
In the mid-1990s, the Chinese government revolutionized the country's gold industry.
Lawmakers began reforms that encouraged small gold producers to consolidate and, more importantly, allowed foreign companies to form joint ventures with Chinese companies.
It was a brilliant move.
Foreign companies — mainly from the United States and Canada — brought modern mineral exploration techniques, management practices, financial controls, and industrial, environmental and safety standards.
The single most important asset foreign companies brought the Chinese gold industry, however, was money.
As foreign investment capital gushed into China, the number of projects skyrocketed, leading to new gold discoveries.
As a result, China's total gold production has steadily increased 7.4% annually and 66.9% since 1999. And in 2007, China became the world's largest gold producer, overtaking South Africa, which held the title as top gold producer for over 100 years.
* December gold GCZ9 slipped $14.20, or 1.50 percent, to $934.50 an ounce on the COMEX division of the New York Mercantile Exchange.
* Range extended down to $931.30, lowest since July 30, from $950.40.
* Investors sold gold along with other metals and commodities as investors returned to a more risk-averse posture - traders.
* The dollar was sought as a less risky currency, undermining dollar-denominated gold's value in overseas markets - traders.
* Dollar hit a two-week high against the euro as doubts about the strength of the U.S. recovery caused heavy selling in crude oil and global stock markets. [USD/]
* Oil's steep decline also hit gold as investors unwound their yellow metal holdings as a guard against inflation - traders.
* Crude oil prices slid below $66 a barrel, their lowest level this month, as investors became more cautious about the pace of global economic recovery. [O/R]
* Monday's selling follows heavy selling in Friday's session after a gloomy consumer confidence reading cast doubt on an economic pickup - traders.
Silver investors care about two things: the value of the metal today, and its prospects for tomorrow.
And with the U.S. dollar losing more might every day, the value of raw silver has never been in greater demand.
For investors like us, it has never been more important to understand how to avoid costly premiums that add nothing to the value of the commodity you're trying to acquire when you buy silver coins.
Take a look at the following premium rates for these popular bullion coins, which have "legal tender" status.
The percentages listed below represent the average premium you'd pay right now above the value of the raw metal alone:
American Silver Eagle — 21%
Canadian Silver Maple Leaf — 15%
Austrian Silver Vienna Philharmonic — 16%
For investors seeking only to benefit from owning the metal, paying this 'cost to play' is counterproductive, to say the least.
The cheapest silver bullion coins are privately minted.
Lacking the status of legal tender, and with little to no collector's value to speak of, these bullion coins maximize the purchasing power of your dollars.
Here are a few to consider and their average premiums right now:
Pan-American Silver — 8%
NWT Mint Silver Bullion — 8%
Sunshine Silver Rounds — 6%
Whether you decide to go with these or with another brand of privately-minted bullion coin, remember to shop around for the lowest premium. Armed with this information, you'll guarantee yourself the most silver for your buck.
During precious metal bull markets, gold usually gets all the media attention. . . but the biggest gains go to silver.
In fact, silver prices have consistently outperformed gold during bull markets — doubling, tripling, even quadrupling the price of the precious yellow metal. So it should go without saying that a well-diversified precious metal portfolio includes silver.
One of the most popular ways to invest in silver are bullion coins, the cheapest and most direct way to own silver.
The retail market offers a variety of silver coins that will maximize profit. But investors are urged to exercise caution when considering some bullion coins. Here's why. . .
All bullion coins — gold and silver — have a premium included in their price. This premium is an additional cost over spot prices that covers manufacturing, distribution, and administration costs incurred by the mint or refiner in making the coin.
The result is paying over silver's spot price.
For those coins classified as "legal tender," or those with collectible or numismatic value, the premium is higher still.
A 1-ounce American Silver Eagle, which has a face value of $1, has a much higher premium than a 1-ounce privately-minted, non-legal tender silver bullion coin in part because of its legal tender status.
As a silver investors, however, we aren't concerned with a coin's legal tender status because— let's face it, what kind of investor would care if their 1-ounce, 99.9% pure silver coin, whose silver value stands at around $14 today, will be accepted at the local store in exchange for a dollar soda?
The same goes for numismatic coins, whose value is not solely dependent on the metal from which they're minted, but rather from their rarity and collectability.
Gold and silver prices rose to 2-month highs today after a US jobless report boosted sentiment in precious-metals trading.
The US Labor Department reported that first-time claims for state unemployment benefits declined by 38,000 to 550,000 last week. The news helped push gold for October delivery to a high of $972.70 an ounce, its highest level in 8 weeks. Silver also gained on the news pushing over $15 an ounce since mid-June.
While we remain bullish in the mid- to long-term, gold prices may experience a pullback as investors take profits in the short-term.
In other precious metals, both platinum was last seen down about $15 to $1,278 an ounce, meeting strong resistance at the $1,300 level. Palladium was also down almost $6 after hitting a 10-month high of $278.80.
Meanwhile, the US dollar slightly recovered after hitting its lowest level since September 2008. The US Dollar Index, a measure of the dollar's value against a basket of six foreign currencies, was down to a low of 77.428.
Sirius XM Radio Inc (SIRI.O) posted higher quarterly revenue on Thursday, despite a reduction in subscribers, and raised its income outlook, citing cost cuts and a potential rebound in automobile sales.
The company, which earlier this year secured financing from John Malone's Liberty Media Corp (LINTA.O) (LCAPA.O) (LMDIA.O) to stave off looming debt problems, said subscribers to the pay-radio service declined by some 186,000 from the first quarter, better than many analyst expectations.
Shares of Sirius XM, which had risen sharply in the days ahead of the report, slipped 9 percent after it reported that it ended the period at 18.4 million. It attributed the quarterly decline to weakness in auto industry sales.
Proforma revenue rose 1 percent to $607.8 million, on par with analysts' views. The proforma figures reflect the fact that Sirius completed its purchase of rival XM Satellite Radio last July and compare the results as if they were a single company a year ago, also making some accounting adjustments for the transaction.
Net loss attributable to common shareholders for Sirius XM, home to programs by Howard Stern and Oprah Winfrey as well as Major League Baseball, was $157.3 million or 4 cents a share.
Excluding special items the loss was was 1 cent a share, matching analysts estimates, according to Reuters Estimates.
In the quarter, Sirius also trimmed subscriber acquisition costs to $57 per gross subscriber addition from $71 in the year ago quarter.
It raised its 2009 outlook for adjusted income from operations to more than $400 million, fueled by accelerated cost cutting. It was the second time it lifted the forecast, after raising it in May to $350 million from $300 million.
"We think the stronger subs performance, as well as better-than-expected profitability, in the quarter, suggests this number should be attainable," J.P. Morgan analyst Lev Polinsky said in a note to clients.
The outlook improvement comes as more subscribers to Sirius, which gains most of its new users from radios built into cars, sign up for premium programming packages and on higher prices for users with multiple subscriptions.
Over the past two months, gold prices have settled into the $910 to $950 range as investment demand for the precious metal continues to balloon. Gold stocks, on the other hand, remain in the doldrums.
The gold stock market is now dependent on a new breakout for precious metals prices. And in order for precious metal stocks to disconnect from the global financial turmoil, gold and silver prices will need to make some pretty big moves.
In the case of gold, I believe the yellow metal would need to move over $1,100 an ounce to force this disconnect from general market activity. In the case of silver, I am looking for a breakout in excess of $23 an ounce.
So, the question is: when will this next wave hit?
Gold was up pretty big this week. But I don't see the big breakout occurring until sometime in the fall when a confluence of factors appears. In the meantime, I expect to see a sideways trading pattern for the next six weeks or so before things start to heat up again.
I continue to believe with all that is happening in the United States and worldwide, higher gold and silver prices are going to rule the day. This would dictate for us to stay on course with gold stocks and not fret too much about what happens over the summer.
American International Group's (NYSE:AIG - News) newly named CEO, Robert H. Benmosche, has lots of experience making deals and overseeing complex organizations. He's going to need it. Benmosche's selection lands him in one of the hottest seats in business, as AIG struggles to gain its footing after its near-bankruptcy and government rescue last fall.
Industry observers give Benmosche (pronounced ben-mo-SHAY) high marks for his tenure as CEO at MetLife (NYSE:MET - News) from 1998 to 2006. "There are very few financial-services executives with insurance background that have his experience and track record," says M. Evan Lindsay, vice-chairman of recruiter Heidrick & Struggles (NasdaqGS:HSII - News). He did "an extremely good job at Metropolitan" and "changed it into a performance-based culture," Lindsay says. (Heidrick was not involved in the AIG search.)
Benmosche, 65, will succeed Edward Liddy, the former head of Allstate (NYSE:ALL - News) who came out of retirement to run AIG in September for a salary of $1 a year. In a statement, AIG said Benmosche will take over from Liddy on Aug. 10. Despite this act of public service, Liddy became a lightning rod for congressional critics and others over AIG's pay practices. The federal government has a nearly 80% stake in AIG. Benmosche won't come so cheap. According to The Wall Street Journal, his compensation package will total $7 million to $10 million -- a salary that must be approved by Kenneth Feinberg, the government's new pay czar, and could trigger more political fireworks. AIG consulted with government officials about Benmosche's selection, the Journal reported, citing a person familiar with the situation. It's not clear if federal officials have agreed to the compensation. But, Lindsay notes, "that is market (rate) for anyone in this position."
Financial Discipline
While at MetLife, Benmosche oversaw the insurer's conversion from a mutual company to a public corporation. He also orchestrated several major deals, including the $11.5 billion acquisition of Travelers Life & Annuity from Citigroup (NYSE:C - News) in 2005. He "instilled a lot of financial discipline" at MetLife and led a "seamless integration" of acquired businesses, says Andrew Edelsberg, an insurance industry analyst at A.M. Best. Before MetLife, Benmosche was an executive at Paine Webber -- now part of UBS (NYSE:UBS - News) -- and when that firm acquired Kidder Peabody in 1994, Benmosche oversaw the combining of the brokerage firms' operations. This experience makes him "a good choice" to lead AIG, Edelsberg says.
Whether Benmosche will be building AIG's business or dismantling it remains to be seen. The onetime industry goliath remains deeply wounded. On Aug. 3, Moody's Investors Service (NYSE:MCO - News) downgraded two AIG lending units to near junk status. Saddled by its massive IOU to U.S. taxpayers and battered in its operations by competitors taking advantage of its weakness, AIG had appeared headed for effective liquidation. But, says Marc Steinberg, another A.M. Best analyst, that's not a foregone conclusion. "There are a lot of different strategies they could take," he says. In the statement issued by AIG, Benmosche says: "With my AIG colleagues, we will focus on this mission: maximizing the value of the company's assets and meeting all of our stakeholder obligations."
Casino mogul Stanley Ho, the father of Macau's fabled gambling industry, has been hospitalized and had surgery in Hong Kong, his office said Tuesday.
The brief statement did not say what surgical procedure the 87-year-old billionaire underwent.
"He is in satisfactory condition and is progressing well in recovery," the statement said.
The confirmation of Ho's hospitalization came after Hong Kong media reported Tuesday different medical reasons for his stay at Hong Kong Adventist Hospital.
Pictures from Hong Kong's Apple Daily newspaper showed a stream of Ho's family members, including daughter Pansy and son Lawrence, visiting the hospital Monday. None of them commented on Ho's health.
Ming Pao Daily cited Angela Leong, one of the four women Ho calls his "wives," as saying last week that he needed treatment because of a rectal injury that he suffered two years ago following a procedure to relieve constipation.
Apple Daily newspaper, meanwhile, cited an unidentified source as saying that Ho had fallen and hit his head last week at Leong's home and that he required brain surgery. The report said he is in stable condition in Adventist Hospital's intensive care unit.
Leong did not immediately return calls from The Associated Press seeking comment. The hospital also declined comment.
Uncertainty over Ho's health sent shares of his company Sociedade de Jogos de Macau Holdings, or SJM, 4.5 percent lower at HK$3.15 on the Hong Kong Stock Exchange.
Ho, worth more than $9 billion according to Forbes, presided over Macau's casinos for four decades until his monopoly was broken up in 2002.
Since then, he has faced fierce competition from American operators such as Wynn Resorts Ltd. and Las Vegas Sands Corp., but SJM still leads with nearly 30 percent of the local gambling market.
Macau is the only place in China where casinos are legal.
SINGAPORE, Aug 4 - Computer hard disk maker Seagate Technology said it will lay off 2,000 workers in Singapore, or more than 4 percent of its global workforce, as it closes manufacturing facilities in the city-state in a bid to cut costs by $40 million a year.
The move, which Seagate said would result in restructuring charges of $80 million, follows a slide in electronics exports from Singapore this year due to weaker consumer demand in the economic downturn.
"We are moving our hard disk operation at Ang Mo Kio (in Singapore) to other Seagate sites in other countries," company spokeswoman Lotus Tan told Reuters but did not provide further details.
She said Seagate employed a total of 8,000 workers in Singapore and would keep Seagate's Asia headquarters, media operation as well as a product development and design center there. According to Seagate's website it has about 45,000 employees around the world.
Seagate said the Ang Mo Kio hard drive factory would be closed by the end of 2010 but would not meaningfully change its production capacity as it will move manufacturing to other locations, which include Thailand, China and Malaysia.
Seagate said in a filing with U.S. regulators that total restructuring charges of approximately $80 million would include about $60 million for severance payments and about $10 million for the relocation of manufacturing equipment.
It plans to record the severance charges of up to $60 million in the current quarter, with the remainder of the charges to be incurred throughout the calendar year of 2010. Seagate's fiscal year 2009 ended on July 3.
The company expects the move to generate annual savings of $40 million when the closure is completed.
Singapore's overall unemployment rate stood at 3.3 percent in the second quarter but the number of people employed in Singapore fell by 12,400 in April-June, twice as much as in the first quarter
Physically owning the metal is the most direct and traditional method of investing in gold. In some countries, gold bullion can be bought and sold at major banks. In most regions, however, bullion dealers provide the services necessary to purchase physical gold.
Gold bullion is generally sold in two main forms, bars and coins.
Gold bars are available in various weights, generally ranging from one ounce to one kilogram. There are approximately 100 active gold refiners around the world whose bars have earned “good delivery” status from one or more of the associations and exchanges. Johnson Matthey, Pamp Suisse, and Credit Suisse are among the most popular.
Gold coins are another way to invest in physical gold. Priced according to their weight and purity, coins often carry a slightly higher premium than gold bars. Among the most popular are the American Gold Eagle, American Gold Buffalo, Canadian Gold Maple Leaf, Australian Gold Nugget, South African Krugerrand, Chinese Gold Panda, and Austrian Gold Philharmonic. All of these coins contain one troy ounce of gold— except the American Gold Eagle, which is only 91.67% pure gold.
Both gold bars and gold coins are priced according to their weight and purity, but they always carry a premium above spot gold prices. We recommend investing in gold bars because the premiums are always lower than coins.
Investment #2: Gold ETFs (Exchange Traded Funds)
If you're not comfortable owning and storing the physical metal, gold Exchange-Traded Funds (ETFs) are your next-best bet.
Gold ETFs are special types of exchange-traded funds that track the spot price of gold and are traded on major stock exchanges such as New York, Paris, Zurich, Tokyo, and London.
The main drawback is the management fee charged by the issuing company. On average, a commission of 0.4% is charged for trading in gold ETFs, in addition to an annual storage fee.
U.S.-based transactions are a notable exception, where most brokers charge only a small fraction of this commission rate. Annual expenses such as storage, insurance, and management fees are charged by selling a small amount of the gold represented by each certificate— a process that gradually diminishes the value in each certificate. In some countries, gold ETFs represent a way to avoid the sales tax or VAT which would apply to physical gold coins and bars.
In the United States, revenue from the sale of a gold ETF is treated as a sale of the underlying commodity. Thus, it's taxed at the 28% capital gains rate rather than the 15% long-term capital gains rate for non-collectibles.
Investment #3: Gold Production Stocks
These do not represent gold at all, but rather are shares in gold mining companies.
If the gold price rises, the profits of the gold mining company could be expected to rise. As a result, the share price may rise. However, there are many factors to take into account, and a rise in the price of gold will not always lead to a rise in the price of a share.
Unlike gold bullion, which is regarded as a safe haven asset, unhedged gold shares and funds are considered to be higher risk, more volatile investments. This instability is a result of the inherent leverage in the mining sector.
For example, if you own a share in a gold mine where the costs of production are $250 per ounce, and the price of gold is $750, the mine's profit margin will be $500. A 10% increase in spot gold prices to $825 per ounce will push that margin up to $575, which actually represents a 15% increase in the mine's profitability and a potential 15% increase in the share price. Conversely, a 10% fall in spot gold prices to $675 will decrease that margin to $425, which actually represents a 15% drop in the mine's profitability and a potential 15% decrease in the share price. The amplification of gold mining profits during periods of rising prices can cause a gold rush in mining exploration.
In order to reduce this volatility, many gold mining companies hedge the gold price up to 18 months in advance. This provides the mining company and investor with less exposure to short-term gold price fluctuations, but reduces potential returns when the gold price is rising.
After waiting for the Gold Price to drop, i decided to open a Gold saving acct this morning at UOB . Price has dropped from $44.60 to $43.43 today. After waiting for about 30 min at the counter account opening since there is only 1 desk counter available. When it is my turn , the lady Miss Wong is very friendly and knowledgeable to my question. Unlike... you know, some CSOs are not experience and every question you ask, they will say pls hold on, i check with ......
Glad to have increased my Gold investment. Will plan to go for some physical Gold again if price dip further a bit. At this point of time writing, Gold price has increased from USD927.00 this morning to USD936.30 night time 22:50 Singapore Time. How about you ?
Citigroup shares continued their march higher Wednesday, closing above the $3 mark in heavy trading.
Three trading days after the completion of an exchange offer in which the company swapped new common stock for preferred securities, Citi announced in a release that Wednesday would be the settlement date for the public exchange offers.
It is also the recording date for determining holders of common stock that are entitled to vote on the company's common proxy statement, which includes a proposal to issue as many as 60 billion shares, up from 15 billion. The increase to the standing authorization to issue shares is designed to give the company room to maneuver above its current number of shares outstanding. Citi's total shares outstanding were expected to jump to as much as 23 billion from the completion of the exchange vs. 5.5 billion at June 30.
Citi's stock closed up 8.4% to $3.22 with more than one billion shares changing hands in Wednesday's regular session. The stock's three-month average trading volume is 291.4 million.
The exchange offer, announced in February, swapped roughly $58 billion worth of preferred shares and trust preferred securities for common stock. The private and public offerings included a total of $25 billion preferred securities owned by the U.S. government. The exchange transaction has made the government Citi's largest stakeholder, holding roughly 34% of the company's shares.
Analysts and investors will now be focused on how long it will take before Citi can get out from under the government's grasp. Other big financial firms including Goldman Sachs, Morgan Stanley and JPMorgan Chase were able to repurchase their preferred stakes during the second quarter.
Unfortunately Citi's businesses are still struggling -- and more so than its large bank counterparts. The company's attempts to reshape itself during the worst financial crisis since the Great Depression through a deleveraging of risk, expense cuts, restructuring of core businesses and management changes, has taken a toll on its revenue. Citi has a large consumer loan book that remains troubled. It also keeps fidgeting with its executive management team and board of directors to add more commercial banking experience. Most recently the company added, including the former superintendent of the New York State Banking Department.
Shares of common stock to be issued in the public exchange offers will be delivered to the voting trust Wednesday and then delivered to the Depository Trust Company on Thursday to be issued to participants, the company also said. Additionally, shares of common stock that were issued in the public exchange offers will be "subject to an irrevocable proxy issued by the voting trustee in favor of all of the matters covered by the common proxy statement."
Gold fell in London and New York to more than a one-week low as a stronger dollar dimmed the metal’s appeal as an alternative investment.
The Dollar Index, a gauge of the currency’s value against six counterparts, climbed for a second day, paring this month’s loss to 1.1 percent. The currency’s advance contributed to declines in all precious metals, oil and copper.
“The key driver is very much now the currency movement,” Suki Cooper, an analyst at Barclays Capital, said today by phone from London. Gold may trade little changed through August as investors in Europe and North America take their summer vacations, she said.
Gold futures for August delivery fell $5.20, or 0.6 percent, to $933.90 an ounce as of 8:40 a.m. on the New York Mercantile Exchange’s Comex division. The contract earlier traded at $932.80, the lowest level since July 17. Bullion for immediate delivery in London dropped 0.4 percent to $934.05 an ounce.
Demand may pick up in September before the Indian wedding season begins in October, Cooper said. India is the world’s largest consumer of the precious metal.
The next support level for the metal, indicating clusters of buyers based on technical charts, is at $931.60 an ounce, Credit Suisse said in an e-mailed report today.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 3.36 metric tons to 1,083.25 tons as of July 28, according to the company’s Web site.
Spot silver lost 0.9 percent to $13.6150 an ounce. Platinum declined $24.30, or 2 percent, to $1,176.20 an ounce and palladium shed $4.65, or 1.8 percent, to $256.10.
How's the economy, you ask? I have the proverbial good news and bad news, but in this case, they're exactly the same: The U.S. economy appears to be hitting bottom.
First, the good news. Right now, it looks like second-quarter GDP growth will come in only slightly negative, and third-quarter growth will finally turn positive. Compared to the catastrophic decline we recently experienced -- with GDP dropping at roughly a 6% annual rate in the fourth quarter of last year and the first quarter of this year -- that would be a gigantic improvement.
Furthermore, there is a reasonable chance -- not a certainty, mind you, but a reasonable chance -- that the second half of 2009 will surprise us on the upside. (Can anyone remember what an upside surprise feels like?) Three-percent growth is eminently doable. Four percent is even possible. Surprised? How, with all our economic travails, could we possibly mount such a boom? The answer is that this seemingly high growth scenario isn't a boom at all. Rather, it follows directly from the arithmetic of hitting bottom.
Bear with me for two paragraphs while I do some numbers. In recent quarters, several critical components of GDP have declined at truly astounding annual rates -- like minus 30% and minus 40%. You know the culprits: housing, automobiles and business investment. (Also inventories, about which more later.) Eventually, those huge negative numbers must turn into (at least) zeroes. Notice that the move to zero doesn't constitute a boom, not even a dead cat bounce, but merely the cessation of catastrophic decline. In fact, hitting zero growth and staying there would be a disaster scenario. We'll almost certainly do better.
But watch what happens when -- and remember, it's when not if -- the arithmetic of bottoming out takes hold. Housing, which is down to 2.6% of GDP, will serve as an example. In the first quarter, spending on new homes declined at a stunning 39% annual rate. If that minus 39% number turned into a zero in a single quarter, that change alone would add a full percentage point to that quarter's GDP growth (because 2.6% of 39% is about 1%). If the move to zero were to happen over two quarters, it would add about a half point to each. Many people think housing may in fact bottom out in the third or fourth quarter. Autos may already have passed their low point. And business investment will follow suit.
Now back to inventories. Recent quarters have seen an almost unprecedented liquidation of inventory stocks, which means that American businesses were producing even less than the paltry amounts they were selling. That, too, must come to an end. As inventory change turns from a large negative number into just zero, GDP will get another a big boost.
Now the key point: None of these events are probabilities; they are all certainties. The only issue is timing, about which we can only guess. But if several of these GDP components happen to bottom out at roughly the same time, we could be in for a big quarter or two.
Feeling a little better? There's more.
Remember the fiscal stimulus that everyone seems to be complaining about? One of the critics' complaints is that little of the stimulus money has been spent to date. OK. But that means that most of the spending is in our future.
And remember all those interest-rate cuts the Federal Reserve engineered in 2008, in a futile effort to stem the slide? The Fed's efforts were futile largely because widening risk and liquidity spreads negated any impacts on the interest rates real people and real businesses pay to borrow. Now those spreads are narrowing, which allows the Fed's rate cuts to start showing through to consumer loan rates, business loan rates, corporate bond rates, and the like. In short, monetary stimulus is in the pipeline -- a pipeline that was formerly blocked.
So why, then, is everyone feeling so blue? That brings me to the bad news: The U.S. economy is hitting bottom.
If things feel terrible to you, you're not hallucinating. Economic conditions are dreadful at the bottom of a deep recession. Jobs are scarce. Layoffs abound. Businesses scramble for penurious customers. Companies go bankrupt. Banks suffer loan losses. Tax receipts plunge, ballooning government budget deficits. All this and more is happening right now, in what looks to be this country's worst recession since 1938. At such a deep bottom, few people have reason to smile. (Bankruptcy lawyers maybe?)
What's more, GDP is not terribly meaningful to most people. Jobs are -- but they will take longer, maybe much longer, to revive. The last two recessions, while shallow, illustrated painfully that job growth may not resume for months after GDP bottoms out. And the unemployment rate won't fall until job growth rises "above trend" (say, 130,000 net new jobs per month). That's a long way from where we are today. So, even though the economy may be making a GDP bottom about now, the unemployment rate will probably keep rising for months -- which is bad news for most Americans.
One last, obvious, but unhappy, point: The bottom of a deep recession leaves the nation in a deep hole. Our economy now has massive unemployment and vast swaths of unused industrial capacity. It will take years of strong growth to return to full employment.
After the last big recession bottomed out at the end of 1982, the U.S. economy rebounded sharply, with a remarkable six-quarter spurt in which annual GDP growth averaged 7.7%. That spurt induced President Ronald Reagan, running for reelection in 1984, to declare "It's morning again in America." Nobody thinks we can repeat that today, hampered as we are by a damaged financial system, decimated household wealth, rising foreclosures, and traumatized consumers who have suddenly learned the virtues of thrift.
So, yes, the good news is also the bad news. The economy is hitting bottom, but it's a long, uphill climb to get out.
Mr. Blinder, a professor of economics and public affairs at Princeton University and vice chairman of the Promontory Interfinancial Network, is a former vice chairman of the Federal Reserve Board.
There's something about the idea of doubling one's money on an investment that intrigues most investors. It's a badge of honor dragged out at cocktail parties, a promise made by over-zealous advisors, and a headline that frequents the cover of some of the most popular personal finance magazines. Where this fixation comes from is anyone's guess.
Perhaps it comes from deep in our investor psychology; that risk-taking part of us that loves the quick buck. Or maybe it's simply the aesthetic side of us that prefers round numbers - saying your "up 97%" doesn't quite roll off the tongue like "I doubled my money." Whatever the source though, it is both a realistic goal that investors should always be moving towards, as well as something that can lure many people into impulsive investing mistakes. Knowing some of the most trusted avenues to doubling your money is something that all investors should have in their toolboxes.
The Classic Way - Earn It Slowly Investors who have been around for a while will remember the classic Smith Barney commercial from the 1980s, where British actor John Houseman informs viewers in his unmistakable accent that they "make money the old fashioned way – they earn it." When it comes to the most traditional way of doubling your money, that commercial's not too far from reality.
Perhaps the most tested way to double your money over a reasonable amount of time is too invest in a solid, speculative portfolio that's diversified between blue-chip stocks and investment grade bonds. While that portfolio won't double in a year, it almost surely will eventually, thanks to the old rule of 72.
The rule of 72 is a famous shortcut for calculating how long it will take for an investment to double, if its growth compounds on itself. According to the rule of 72, you divide your expected annual rate of return into 72, and that tells you how many years it takes you to double your money.
Considering that large blue-chip stocks have returned roughly 10% over the last 100 years, and investment grade bonds have returned roughly 6%, a portfolio that is divided evenly between the two should return about 8%. Dividing that expected return (8%) into 72, gives a portfolio that should double every nine years. That's not to shabby, when you consider that it will quadruple after eighteen years, and octuple (8 times) after 27.
The Contrarian Way – Blood in the Streets Even straight-laced, even-keeled investors know that there comes a time where you've got to buy. Not because everyone is getting in on a good thing, but rather, because everyone is getting out. Just like great athletes go through slumps when many fans turn their backs, the stock prices of otherwise great companies occasionally go through slumps because fickle investors head for the hills.
As Baron Rothschild (and Sir John Templeton) once said, smart investors "buy when there is blood in the streets, even if the blood is their own." Of course, these famous financiers weren't arguing that you buy garbage, at any price. Rather, they were arguing that there would most surely be times where good investments become oversold, which presents a buying opportunity for brave investors who have done their homework.
Perhaps the most classic barometers used to gauge when a stock may be oversold, is the price-to-earnings ratio and the book value for a company. Both of these measures have fairly well established historical norms for both the broad markets and for specific industries. When companies slip well below these historical averages for superficial or systemic reasons, smart investors will smell an opportunity to double their money.
The Safe Way Just like how the fast lane and the slow lane on the freeway eventually lead to the same place, there are both quick and slow ways to double one's money. So for those investors who are afraid of wrapping their portfolio around a telephone pole, bonds may provide a significantly less precarious journey to the same destination.
But investors taking less risk by using bonds don't have to give up their dreams of one day proudly bragging around the lunchroom about doubling their money. In fact, zero-coupon bonds (including classic U.S. Savings Bonds), can keep you in the "double your money" discussion.
For the uninitiated, zero-coupon bonds may sound intimidating. In reality, they're surprisingly simple to understand. Instead of purchasing a bond that rewards you with a regular interest payment, you buy a bond at a discount to its eventual maturity amount. For example, instead of paying $1,000 for a $1,000 bond that pays 5% per year, an investor might buy that same $1,000 for $500. As it moves closer and closer to maturity, its value slowly climbs until the bondholder is eventually repaid the face amount.
One hidden benefit that many zero-coupon bondholders love is the absence of reinvestment risk. With standard coupon bonds, there's the ongoing challenge of reinvesting the interest payments when they're received. With zero coupon bonds, which simply "accrete" or grow towards maturity, there's no hassle of trying to invest smaller interest rate payments or risk of falling interest rates.
The Speculative Way While slow and steady might work for some investors, others may find themselves falling asleep at the wheel. They crave more excitement in their portfolio and are willing to take bigger risks to earn bigger payoffs. For these folks, the fastest ways to super-size the nest egg may be the use of options, margin or penny stocks.
Stock options, such as simple puts and calls, can be used to speculate on any company's stock going up or down. For many investors, especially those who have their finger on the pulse of a specific industry, options can turbo-charge their performance. Considering that each stock option potentially represents 100 shares of stock, a company's price might only need to increase a small percentage for an investor to hit one out of the park. Be careful and be sure to do your homework; options can take away wealth just as quickly as they create it.
For those who want don't want to learn the ins and outs of options, but do want to leverage their faith (or doubt) about a certain stock, there's the option of buying on margin or selling a stock short. Both of these methods allow investors to essentially borrow money from a brokerage house to buy or sell more shares than they actually have, which in turn, can raise their potential profits substantially. Again, this method is not for the faint-hearted, since margin calls can back your available cash into a corner, and short-selling can theoretically can generate infinite losses.
Lastly, extreme bargain hunting can quickly turn your pennies into dollars. Whether you decide to roll the dice on the numerous former blue-chip companies that are now selling for less than a dollar, or you sink a few thousand dollars into the next big thing, penny stocks can double your money in a single trading day. Just remember, whether a company is selling for a dollar or a few pennies, its price reflects the fact that other investors don't see any value in paying more than that price.
The Best Way to Double Your Money While it's not nearly as fun as watching your favorite stock on the evening news, the undisputed heavyweight champ of doubling your money is that matching contribution you receive in your employer's retirement plan. It's not sexy and won't wow the neighbors at your next block party, but getting an automatic 50 cents to $1 for every dollar you deposit is tough to beat.
Making it even better is the fact that the money going into your 401(k) or other employer-sponsored retirement plan comes right off the top of what your employer reports to the IRS. For most Americans, that means that each dollar invested really only costs them 65-75 cents out of their pockets. In other words, for every 75 cents, most Americans are willing to forgo out of their paychecks, they'll have $1.50 or more added to their retirement nest egg – not too shabby! Before you start complaining about how your employer doesn't have a 401(k) or how your company has cut their contribution because of the economy, don't forget that the government also "matches" some portion of the retirement contributions of taxpayers earning less than a certain amount. The Credit for Qualified Retirement Savings Contribution reduces your tax bill by 10-50% of what ever you contribute to a variety of retirement accounts (from 401(k)s to Roth IRAs).
If It's Too Good to Be True… There's an old saying that if "something is too good to be true, then it probably is." That's sage advice when it comes to doubling your money, considering that there are probably far more investment scams out there than sure things. While there certainly are other ways to approach doubling your money than the ones mentioned so far, always be suspicious when you're promised results. Whether it's your broker, your brother-in-law or a late night infomercial, take the time to make sure that someone is not using you to double their money.
This serves to inform all our Valued Customers that Bank Negara Malaysia has commenced an investigation into GENNEVA Sdn Bhd on 21st July, 2009 under suspicion of conducting illegal deposit taking activities.
In view of the above investigation, our bank accounts have been frozen and our cash and Gold stocks have been sealed temporarily. Our director’s personal bank accounts have also been frozen.
GENNEVA is cooperating fully with Bank Negara Malaysia on the above investigations and we would like to assure all our Valued Customers on our commitment to protect their purchases with our company.
The Management would like to extend a big thank you to all Valued Customers for their kind understanding and we apologized for any inconveniences caused in relation to the above investigation.
We look forward to be of service to you again soon.
Meanwhile, please do not hesitate to contact us via email at genneva3@gmail.com should you need any clarifications on the above.
Please continue to visit our website www.genneva.com for news update.
PETALING JAYA: Bank Negara Malaysia (BNM) is investigating Genneva Sdn Bhd and Etika Emas Estet Sdn Bhd on suspicion of conducting illegal deposit-taking activities.
The central bank said in a statement posted on its website yesterday that it raided the premises of Genneva and Etika Emas in Klang Valley yesterday following public complaints.
Officials from the two companies say that they are giving full cooperation to the central bank investigators.
Etika Emas president Mohd Amin Supian said he was surprised when Bank Negara officers’ visited his company.
He said that he was told that the visit was a routine check on the business operation.
He added that Etika Emas was a legitimate business dealing in physical gold.
A Genneva official, who did not want to be named, declined to comment except that his company was cooperating with Bank Negara.
Last week, Genneva senior general manager Tony Yao in a response to a StarProbe article said that his company’s business model is not a Ponzi scheme.
He explained that the company sold gold coins and bars to the public at a 5% discount to the prices set by the Federation of Goldsmiths and Jewellers Associations of Malaysia.
The US government and Federal Reserve would like you to believe that the US dollar has inherent value. . . that it's stable. . . that it's a store of value. . . that it is, and will always be, the world's preferred currency.
But, as more and more people are learning everyday, that is all just a fairytale. . . a fantastic misrepresentation of reality. The truth is. . .
The Value of the US Dollar is Gone
A dollar, once redeemable for physical gold or silver, is only backed today “by the full faith and credit of the United States government.”
That means the US dollar is given credit and strengthened by the government's ability to levy taxes or borrow from a separate entity, like the Federal Reserve or a foreign government.
Think about that for a minute.
First of all, no entity, not even one as large as the United States government, has unlimited credit.
The American government, just like you or me, is limited by how much it can borrow. And with the national public debt already approaching $11.5 trillion — and growing by an astonishing $3.8 billion per day — the nation must be quickyl reaching its credit limit.
Perhaps more frightening is the government's guarantee to back the US dollar through its ability to tax the American people.
If you don't pay your taxes, you may be fined, your paychecks may be garnished, your property may be seized, and you may even be thrown in prison. . . federal prison!
In other words, the government's guarantee of the dollar ultimately rests on your fear of incarceration.
What once derived its value from gold now takes its strength from state-sponsored intimidation.
It's true, we've fallen quite a ways from the days when the greenback meant something. And what's really scary is that. . .
The US Dollar's Value Has Eroded in Just a Few Decades
At the close of WWII, with just around 5% of the world population living in the US, the nation nevertheless produced 75% of the manufactured goods consumed globally.
It was an astounding achievement that set the stage for what many historians dubbed “America’s Century.”
That century is now over, literally and figuratively.
Although our economy was once responsible for a constant flow of steel, cars, ships, high-tech equipment, and all varieties of household goods. . . although our nation once fought off the Nazis and supplied the Allies with the goods and capital required to defeat the forces of evil and build the modern world up from the ravages of global war. . . today, American's number one product is debt.
And the mountains of debt we accumulate on a daily basis will only keep growing because our industry and exports simply cannot keep up.
We've all felt it, from the common citizen to the biggest corporations.
Unfortunately, the Fed’s main tactic for combating this mounting crisis is adding to the money supply, which they’re doing at an unprecedented rate today.
Economist and executive editor of Shadow Government Statistics John Williams began tracking the total supply of money in circulation after the Federal Reserve refused to continue publishing the figures in 2006. Today, Williams estimates the total supply of US dollars — including large time deposits, institutional money-market funds, short-term repurchase agreements, and other larger liquid assets — is approximately $15 trillion.
This is a shocking 250% increase to the supply of US dollars in the past 15 years alone!
Of course, you know the result of this approach. . .
Every dollar the Federal Reserve prints, when not supported by an equivalent growth in productivity, just leads to a devaluation of every dollar in circulation. That includes all those dollars you’ve slaved to put away for your household improvements, your kids’ college fund, and your retirement.
Inevitably, as the Federal Reserve's hunger for capital increases, and the individual value of each dollar decreases, the taxpayer — the true backer of the US Dollar — will be coerced into paying ever-increasing chunks of precious income to keep the machine alive.
Eventually, something will have to give: either your ability to earn or Uncle Sam's ability to take it from you.
You make the call which will outlast which.
There is a way out, however. You can still salvage your savings and secure the value of your assets, as they're valued today, before it’s too late.
But for that, you’ll have to return to the antiquated practice our national economy dropped back in the early 1970s.
You can take your faith out of the future prospects of the US economy and put it back into something inherently valuable. . . something that maintains and even increases its worth just by existing.
The political machine that has ravaged our economy has had its chance, and has blown it every step of the way. Take your financial future into your hands today and learn why now is the best time in American history to invest in the metal that was once the backbone of an empire. . .
Today we'll look at some of the myths and misconceptions these same institutions want you to believe, along with the down-to-earth realities that will put your mind to rest about the unique benefits of owning gold.
Gold #1: Stocks always outperform gold
Fact: This is a misrepresentation popularized by institutions whose job it is to sell you stocks for commission, regardless of whether you see gains. But the truth is gold has increased by as much as almost 3,000% since the US abandoned the gold standard and the metal was allowed to trade freely on the open market in 1971. Meanwhile, the Dow Jones Industrial Average has only increased by about 900% since that time. Even at the top of the market, when the Dow Jones was over 14,000, the index had only gained 1,500%.
Gold #2: Gold is a risky investment
Fact: Gold is the opposite of risky. In fact, it's one of the safest investments you can make. And that's simply because gold can never be considered as a liability. Companies can go fall to zero.
Of course, every investment carries some degree of risk. The price of gold is subject to supply/demand fundamentals, currency fluctuations, government and central bank actions, etc. But the value of physical gold can't disappear in the middle of the night with a crooked investment manager or in the wake of a collapsing government.
Gold #3: Gold is a poor hedge against inflation
Fact: Gold is actually one of the best hedges against inflation. Consider this. . . In 1971, the factory sticker price for a Mustang Boss 351, Ford's final muscle car masterpiece, was $5,198. If you decided to hold onto your cash and buy a car today, your $5,200 would only make for a good down payment. The lowest MSRP of any vehicle sold in the US today is about $11,000—and that's for a tiny plastic death trap. But say that you bought gold instead of holding cash. At the time, $5,200 would have also bought you about 150 ounces of gold. Those same 150 ounces of gold are now worth over $140,000 at today's gold prices. With that kind of money, you could buy a brand new, fully loaded BMW M6. . . plus have an extra $20,000 leftover to put towards gas.
Gold #4: Gold ETFs or gold mining stocks are a better investment than bullion
Fact: This is another myth touted by institutions interested only in commission. It's true that gold ETFs and gold mining stocks are a slightly more convenient way to invest in gold. But as I mentioned in Gold Myth #2, funds can become defunct and companies can go belly-up.
It's also important to note that while gold ETFs do represent shares of the physical commodity, they end up costing you more in the long run because of annual storage fees. Owning and holding physical gold in your house costs you nothing.
Gold #5: Physical gold is illiquid
Fact: It may not be accepted by most vendors in lieu of cash, but the liquidity of gold has increased significantly over the past few decades thanks to the large number of brokers streamlining the process of buying and selling. Today's brokers have made trading gold as easy and attractive as possible by offering nearly instant payments and guaranteed sales prices.
An easy way to significantly increase the liquidity of your physical gold investments is to buy small coins and bars that are minted by a government or well-known refiner. You can purchase gold coins as small as 1/10 of an ounce, and you can buy gold bars weighing as little as small as 1 gram. These small gold coins and bars offer higher marketability than their larger cousins simply because they are much easier for private individuals to afford.
Conclusion
With its reputation for value stability and long-term growth spanning most of recorded human history, gold remains a popular and viable method of preserving and growing wealth during economic downturns as well as periods of prosperity, even today.
Those that will have you believe otherwise argue against gold ownership out of a purely pecuniary interest. Take hold of your future today and make your decisions based on objective fact, not self-interested fiction.
A group of Hong Kong banks said Wednesday they had agreed to refund partially thousands of investors who bought complex financial products at the centre of a mis-selling scandal.
The deal covers around 29,000 investors who were sold so-called mini-bonds backed by US investment bank Lehman Brothers, according to a joint statement issued by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and the banks.
The deal was brokered by the two regulators and the banks. The refunds could cost the 16 institutions who agreed to the deal up to 6.3 billion Hong Kong dollars (S$1.17 billion).
Martin Wheatley, chairman of the SFC, said the settlement was "a watershed" in the regulation of financial services.
"The scale of the settlement is unprecedented in Hong Kong, if not in other jurisdictions," he told a news conference.
Under the deal, the banks will repurchase from each eligible customer aged below 65 all outstanding mini-bonds at 60 percent of their nominal value.
Those aged 65 or above will be able to recoup at least 70 percent of their investment in the products.
The ultimate payout to investors may be higher if the banks are able to sell the underlying collateral linked to the minibonds, the regulators said.
Wheatley said the total amount the investors could receive would be equal to or greater than what they could otherwise recover at today's current market value.
He said although the deal concluded the SFC's investigation into the mis-selling cases, investors still dissatisfied with the terms could seek redress through legal channels.
He nevertheless pledged to continue the SFC?s investigation in unresolved claims.
"In no way are we giving up our right or ability to investigate unresolved cases," he said.
In January, leading Hong Kong brokerage Sun Hung Kai Investments agreed to repay around 85 million dollars to 300 investors in a full refund after the SFC reprimanded its sale of the minibonds.
Asked why the banks could not follow the brokerage's example, Wheatley said Sun Hung Kai's case was different as it involved fewer investors and a smaller amount of money.
Some investors were nevertheless angry that they could not get a full refund and Wednesday protested in the lobby of the SFC office in Central district, where dozens of police officers and security guards tried to maintain order.
Peter Chan, chairman of the Alliance of Lehman Brothers Victims, told AFP: "Although some elderly investors will be able to recover most of their investment, I am very disappointed because the SFC has indicated it will not investigate these cases any more after the settlement."
The value of the products, which were sold as safe investments, collapsed when Lehman went failed last September.
The scandal has rocked Hong Kong's financial centre and led to a string of protests by disgruntled investors, many of whom were elderly and said they did not understand what they were being sold.
In May, the SFC won another victory when a Hong Kong court supported the regulator's request to block the privatisation of telecom giant PCCW amid allegations of vote-rigging.
A high-yield investment program (HYIP) is a type of Ponzi Scheme, which is an investment scam that promises an unsustainably high return on investment by paying previous investors with the money invested by newcomers.
HYIP operators generally set up a website offering an "investment program" with returns as high as 45% per month or 6% a day that discloses little or no detail about the underlying management, location, or other aspects of how money is to be invested because no money is invested. They often use vague explanations, asserting little more than that they do different types of trading on various stock markets or exchanges to generate the returns they purport. The SEC has said the following on the matter: "These fraudulent schemes involve the purported issuance, trading, or use of so-called 'prime' bank, 'prime' European bank or 'prime' world bank financial instruments, or other 'high yield investment programs.' ('HYIP's) The fraud artists... seek to mislead investors by suggesting that well regarded and financially sound institutions participate in these bogus programs."
HYIPs collect large sums of money for the operators by using the classic Ponzi Scheme method of using second- and third-tier investments to pay principal and interest back to the first-tier investors. This is continued for the first several tiers, generating positive word-of-mouth advertising for the scheme using a variety of dedicated forums. HYIPs may also mirror Pyramid Schemes by offering current investors incentive commissions, for example 9% of current investment, to recruit new investors. Some HYIP promoters, aware of the negative connotations of the term, have begun to use other terms such as "HYIP game" or "HYROL" (High Yield Return On Loan) as well.
The introduction of e-currencies in the late 1990s made it easier for HYIPs to operate on the Internet and across international boundaries, and to accept large numbers of small payments. HYIPs usually accept payments only by digital currency.
WASHINGTON: The Federal Reserve is likely to maintain its easy money policy for some time despite signs of improvement in the economy and financial markets, chairman Ben Bernanke said on Tuesday. Bernanke, delivering his semi-annual economic report to Congress, cited "notable improvements" in financial markets and a somewhat brighter economic outlook but considerable risks led by high unemployment. "In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery," Bernanke told the House of Representatives Financial Services Committee. He added that "a highly accommodative stance of monetary policy will be appropriate for an extended period," suggesting that the Fed is in no hurry to end its near-zero interest rate policy or special programs to pump money into the financial system. But Bernanke also maintained the Fed was working on a so-called exit strategy to unwind the trillion-dollar effort once a recovery takes root. He said the the vast effort "can be withdrawn in a smooth and timely manner as needed, thereby avoiding the risk that policy stimulus could lead to a future rise in inflation." The policymaking Federal Open Market Committee "has been devoting considerable attention to issues relating to its exit strategy, and we are confident that we have the necessary tools to implement that strategy when appropriate," he added. He said some of these tools "will unwind automatically as the economy recovers and financial strains ease" because of the premium charged by the Fed for its programs. In an effort to address concerns that the Fed could create a new financial bubble, Bernanke said the central bank was prepared to act. "Should economic conditions warrant a tightening of monetary policy before this process of unwinding is complete, we have a number of tools that will enable us to raise market interest rates as needed," he said. The Fed noted that the it is preparing for a recovery taking root: "When this process has advanced sufficiently, the stance of policy will need to be tightened to prevent inflation from rising above levels consistent with price stability and to keep economic activity near its maximum sustainable level." Kathy Lien at Global Forex Trading said Bernanke's comments failed to ease financial market jitters, leading to a rise in the dollar. "Although the Fed chairman talked about exit strategies, his emphasis was on economic risks and this cautiousness did not sit well with currency traders," she said. Bernanke also delivered the Fed's latest economic projections, which were made public last week, which called for a resumption of growth in the second half of 2009 after a brutal recession. He commented that financial markets, which had been severely strained at the the time of his last report in February "remain stressed," with credit sometimes difficult to obtain, but that "on net, the past few months have seen some notable improvements." He added that better conditions in financial markets "have been accompanied by some improvement in economic prospects" including stabilisation of consumer spending and moderation in the housing slump. But he argued that the Fed would remain focused on adding stimulus to avert a relapse. "Despite these positive signs, the rate of job loss remains high and the unemployment rate has continued its steep rise," he said. "Job insecurity, together with declines in home values and tight credit, is likely to limit gains in consumer spending. The possibility that the recent stabilisation in household spending will prove transient is an important downside risk to the outlook." The Fed chief also repeated his concerns about a ballooning federal budget deficit that could threaten financial stability. "Maintaining the confidence of the public and financial markets requires that policymakers begin planning now for the restoration of fiscal balance," he said. "Agreeing on a sustainable long-run fiscal path now could yield considerable near-term economic benefits in the form of lower long-term interest rates and increased consumer and business confidence. Unless we demonstrate a strong commitment to fiscal sustainability, we risk having neither financial stability nor durable economic growth.
I'm a Self employed been investing for almost about 8 yrs. Here is the chance for me to post my Blog to share experience and investment information with everyone.
