Conquer The Wallstreet !!!: Sunday, November 9, 2008

Sunday, November 9, 2008

ETF sectors that could be pulled up by Obama Policy

Summarized from Tom Lydon's Article
November 09, 2008 01:00 am

Very few health care analysts expect the new president to act upon health care issues any time soon. The Democrats are expected to abandon the Bush administration’s positions on Medicare and other issues. This could give Medicare the power to negotiate directly with pharmaceutical companies, reports Reed Abelson for The New York Times.

Vanguard Heath Care (VHT), down 25.9% year-to-date.

With Obama’s leadership, the energy industry faces a shift with the emphasis on conservation and renewable power. But bigger issues, such as global warming, could once again stew on the back burner.

High energy costs and concerns about global warming have heightened the sense of urgency for a broad policy that tackles both the nation’s oil use and its energy-related carbon emissions, though. Expansion of offshore drilling may have shifted in Obama’s eyes as a possibility instead of remaining adamantly opposed, reports Jad Mouawad for The New York Times.

Energy Select Sector SPDR Fund (XLE), down 39.5% year-to-date

The tech industry will call upon the new president for things such as net neutrality, policies to spread high speed Internet access, and step up broadband penetration to higher standards. They hope he will be committed to his stated support of certain issues affecting their industry.

First Trust NASDAQ 100 Technology Sector (QTEC), down 43.8% year-to-date

Roche to gets the rest of Genentech shares in the buy out offering

Sources :

Obama’s Sector To-Do List May Impact ETFs

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Roche to get the rest of Genentech shares in the buy out offering

A logo is pictured on Swiss drug makers Roche plant in Kaiseraugst
near Basel, July 21, 2008. REUTERS/Christian Hartmann
According to Reuters, Roche Holding AG (ROG) is sticking by its $43.7 billion offer to buy out the rest of Genentech Inc (DNA) it does not already own, its pharmaceuticals chief said in an interview published on Sunday.

The Swiss drugmaker, which already holds 56 percent of Genentech, has had its July offer to buy out the remainder of its U.S. biotech partner rebuffed.

But Genentech's share price has recently fallen below the $89 offer price as concerns mount about Roche's funding of the bid, given ever tighter credit conditions.

"We are sticking to our plan to buy out the remaining 44 percent of Genentech," William Burns, head of Roche's drugs unit, told Swiss newspaper SonntagsZeitung. "It remains our aim to reach an agreement with Genentech."

Related Posts :

Subway is a largest and fastest growing market of franchises

Sources :

Roche sticks by $43.7 billion Genentech bid: report

Subway is a largest and fastest growing market of franchises

Sandwich bar franchise Subway, which now has over 1,100 locations operating in the UK, has become the leading sandwich retailer in the country according to a report published by the British Sandwich Association in May. The international quick service brand tallied up sales of £300 million, nearly twice that of the second-placed retailer Tesco.

Although it is a sandwich shop, Subway's locations, customer profile and operating style, such as late opening hours, give it more in common with fast food chains such as McDonalds and Kentucky Fried Chicken than Prêt a Manger.

One industry expert says: "In a lot of city centres it has replaced the donor kebab shop as a place where people go to get food and hang out after the pub."

Subway, founded in Bridgeport Connecticut in 1965 by Fred DeLuca, now has 28,000 restaurants in 86 countries worldwide. The company first launched in the UK in Brighton in 1996 and grew slowly at first, as its concept based on made-to order filled rolls took time to catch on.

But by 2005 Subway's franchisees had a total of 300 British stores, partly thanks to clever financing plans which enable franchisees to sign up and fit out their stores relatively cheaply.

Subway may have just squeezed past McDonalds with 1,300 outlets in the UK and Ireland compared to 1,266 but the private company does not report its profits and turnover in the UK and Northern Ireland. However with an estimated turnover of £400m at present, it is less than half McDonald's £1 billion-plus British sales.

Still, the UK is an important model for Subway's spread into Europe, as the largest and fastest growing market outside north America.

Over 29,000 Stores Worldwide

The Subway network, which spans 86 countries, has its routes in a New York submarine sandwich shop opened by company founder Fred DeLuca in 1965 as a way to fund his college studies. Fred and his business partner Peter Buck opened 16 units before developing the franchise offering in 1974.

The company is now a major national brand in many markets worldwide and has overtaken McDonald's in the USA, Canada and Australia in unit numbers.

Major markets for Subway:

On September 25, Subway will be opening in as many as six schools in Scotland in the near future. Subway will be offering healthier food for the kids. Subway allows schools to pick and choose the menu available to students. Because there are regulations and requirements that differ from town to town, some school districts can serve certain items that others can't, So Subway allow schools to choose what they want to sell, which further reduces their costs. It's very flexible and marketable.

Sources :

Subway to Open School Locations in Scotland

How Subway overtook McDonalds

Subway beats Tesco to number one spot in sandwich retail

The High yield stocks at low price to book ratio

Name	Symbol	Price to Book	Yield	P/E Ratio	PEG
Genworth Financial, Inc.	GNW	0,17	8,3%	4,1	0,44
Protective Life Corp.	PL	0,28	11,3%	2,9	0,31
Ternium S.A. (ADR)	TX	0,33	5,7%	2,4	0,35
Colonial BancGroup, Inc.	CNB	0,34	9,4%	6,6	0,78
Oshkosh Corporation	OSK	0,38	5,2%	5,3	0,24
Royal Caribbean Cruises Ltd.	RCL	0,41	5,5%	4,5	0,35
Lincoln National Corporation	LNC	0,46	9,6%	5,8	0,58
ProLogis	PLD	0,51	14,8%	7,1	0,91
Teekay Corporation	TK	0,55	5,4%	10,7	0,67
ArcelorMittal (ADR)	MT	0,58	5,7%	2,7	0,35
Banco Macro SA (ADR)	BMA	0,59	11,3%	2,9	0,29
Teck Cominco Limited (USA)	TCK	0,59	10,0%	3,4	0,67
AU Optronics Corp. (ADR)	AUO	0,59	11,5%	2,4	0,24
Alcoa Inc.	AA	0,61	5,9%	5,5	0,66
Petrobras Energia Participaciones SA ADR	PZE	0,62	6,0%	5,1	0,08
Autoliv Inc.	ALV	0,66	7,7%	5,3	0,71
AXA (ADR)	AXA	0,67	10,0%	5,9	0,98
Constellation Energy Group, Inc.	CEG	0,67	7,9%	5,3	0,44
Freeport-McMoRan Copper & Gold Inc.	FCX	0,70	6,9%	4,0	0,80
Seagate Technology	STX	0,71	6,5%	3,7	0,33
Deutsche Lufthansa AG (ADR)	DLAKY	0,73	13,9%	8,0	0,80
Williams-Sonoma, Inc.	WSM	0,74	5,8%	5,0	0,49
Koninklijke Philips Electronics NV (ADR)	PHG	0,76	5,9%	4,9	0,38
OMV Aktiengesellschaft (ADR)	OMVKY	0,77	7,1%	3,3	0,42
Tomkins plc (ADR)	TKS	0,79	12,0%	9,5	0,47
Petroleum Geo-Services ASA (ADR)	PGSVY	0,81	18,7%	2,2	0,31
Methanex Corporation (USA)	MEOH	0,82	5,3%	3,4	0,07
Temple-Inland, Inc.	TIN	0,83	6,8%	0,6	0,11
Sappi Limited (ADR)	SPP	0,85	5,1%	7,4	0,62
Sotheby's	BID	0,86	6,4%	3,7	0,21
Cincinnati Financial Corporation	CINF	0,90	6,0%	9,5	0,95
Mechel OAO (ADR)	MTL	0,92	8,3%	3,2	0,49
Entertainment Properties Trust	EPR	0,94	9,0%	11,9	0,79
Brasil Telecom Participacoes SA (ADR)	BRP	0,94	9,1%	5,9	0,20
Carnival Corporation	CCL	0,98	6,3%	8,8	0,76
Banco Santander, S.A. (ADR)	STD	0,98	6,9%	5,9	0,40
Capstead Mortgage Corporation	CMO	1,00	21,9%	5,2	0,90
Whole Foods Market, Inc.	WFMI	1,00	7,5%	10,2	0,62

Source: Wall Street News Network

Sources :

Below Book High Yield Stocks

China announced $586 billion stimulus package to tackle the economic slowdown (Update 1)

Bloomberg Video: China unveils $586 Billion stimulus plan as world faces recession;
Consensus for China's 2009 growth is 8% to 9%, Central Bank Governor;
China manufacturing contracted September as crisis cuts exports; Analysis
by Ben Simpfendorfer, RBS Chief China Economist
China's government announced a two-year stimulus exceeding a half-trillion dollar to offset the impact of slowing global growth and unlock the spending power of its vast population.

Premier Wen Jiabao's cabinet set plans for 4 trillion yuan, or $586 billion, in spending and stimulus measures through the end of 2010 aimed specifically to target people's livelihood. The funds, equivalent to almost a fifth of China's $3.3 trillion gross domestic product last year. The measures may stimulate domestic demand, but they won't prevent China's economy from slowing further as the global economy is certainly in a recession.

The stimulus plan may boost China's economic growth by 2 percentage points next year. UBS AG and Credit Suisse AG before today's announcement forecast expansion of no more than 7.5 percent for next year, which would be the slowest in nearly two decades. The policies include a comprehensive reform in value-added taxes, which would cut industry costs by 120 billion yuan. 100 billion yuan of the package is earmarked for this quarter, will go toward low-rent housing, infrastructure in rural areas, as well as roads, railways and airports, the State Council said.

Commercial banks' credit ceilings will be abolished to channel more lending to priority projects, rural areas, smaller enterprises, technical innovation and industrial rationalization through mergers and acquisitions.

Wen is trying to stop China's economic slowdown from deepening as exports wane, manufacturing contracts and a property slump undermines domestic demand. The central bank has already cut interest rates three times in two months, reducing the one-year lending rate to 6.66 percent.

A man walks past an electronic board showing stock information
at a brokerage house in Wuhan, Hubei province August 20, 2008.
China's main stock index soared more than 7 percent on Wednesday
because of hopes that the government would introduce
a stimulus package to boost the slowing economy and aid the stock
and property markets. REUTERS/Stringer (CHINA).

ETFs/Stocks :

iShares FTSE/Xinhua China 25 Index (ETF)  FXI   $25.60   +2.91 (12.83%)
UltraShort FTSE/Xinhua China 25 ProShares  FXP  $76.32  -25.67 (-25.17%)

Cash-rich sovereign wealth funds from Asia have been burnt

Brazil, Russia, India and China had agreed to boost trade and capital flow

Sources :

China's 4 trillion yuan stimulus to boost economy, domestic demand

China Announces $586 Billion Stimulus Package

China Announces 4 Trillion Yuan Economic Stimulus (Update2)

Video: China Economic Growth; China Unveils $586 Billion Stimulus Plan; China Manufacturing Contracted September As Crisis Cuts Exports

Cash-rich sovereign wealth funds from Asia have been burnt

Market is still in the uncertainty condition as long as there are large amount of loans which have been unloading from financial institutions and we call it as deflation. While investors become more panic and redeem their funds. Force liquidation had dropped down markets in the two consecutive days last week, November 5th & 6th, see the following chart.

Chart courtesy of Stockchart
The force selling was driven by Downgrading Ambac on Wednesday, November 5. MBIA insured more than $1 trillion of debt as of Dec. 31, according to the company. Ambac insured $524 billion of bonds as of April.

If 10% of those bonds default are uninsured, there will be $150 billion dries up. But if that $150 billion is being used as regulatory capital or margin deposits by leveraged entities, and can't be replaced under current market conditions, it could provoke the liquidation sale of much larger amounts of assets.

This event is like what have been occurred on the late week in last October when investors pulled $9.2 billion from stock mutual funds.

This force liquidation was signed by rising USD and Japanese Yen while commodities plunge, including gold as investment hedge (see: This is de-leveraging. This is a forced liquidation). It had spread around financial system in the world. No more countries will resist to the current crisis, including China which has spectacular economic growth year on year because China and Japan export depends mostly on US and Europe market.

Now there is $50 trillion worth of notional value in credit default swaps insuring only $5 trillion worth of bonds. How could you end up this monster of financial disaster?

Since last year, financial institutions hit by the unfolding slump in the US housing market have sought and received billions of dollars in fresh capital from sovereign wealth funds created to invest national savings and surpluses fed by crude-oil windfalls in the Gulf and rapid industrialization in Asia.

Now, cash-rich sovereign wealth funds from Asia and the Middle East have been burnt and may be turning cautious after getting burnt by investments in Western firms hit by the current financial turmoil. They put a lot of capital into financial institutions earlier on and they lost a lot of money, according to Minton-Beddoes, a former economist with IMF.

The IMF has estimated that sovereign wealth funds collectively hold total assets of between 1.9 trillion and 2.8 trillion dollars and could be worth 12 trillion dollars by 2012, while the UN Conference on Trade and Development puts their current holdings at about 5.0 trillion dollars.

Right now there is a lot of fear in the marketplace from all investors... Sovereign wealth funds are not interested in making more large investments because of how their previous investments have turned out.

For example, Singapore was among the most prominent investors with its two main funds, Temasek Holdings and the Government of Singapore Investment Corp (GIC), emerging as sought-after sources of capital by ailing Western financial firms.

Temasek invested 8.3 billion US dollars into Merrill Lynch, which was later acquired by Bank of America in an all-stock deal worth 50 billion dollars, while GIC pumped billions into Citigroup and Swiss banking behemoth UBS.

A worker cleans the water fountain pond in front of the Government
of Singapore Investment Corp building in October. Cash-rich sovereign
wealth funds from Asia and the Middle East may be turning cautious after
getting burnt by investments in Western firms hit by the current financial turmoil,
analysts said. AFP PHOTO/ROSLAN RAHMAN
The state-owned Kuwait Investment Authority injected a total of 5.0 billion dollars in Citigroup and Merrill Lynch in January this year.

The Abu Dhabi Investment Authority, controlled by the largest member of the United Arab Emirates, poured 7.52 billion dollars into Citigroup late last year.

Analysts said sovereign wealth funds from Asia and the Middle East would continue to be major financiers, but any potential partnerships would be carefully weighed before the cheque book is taken out.

ETFs/Stocks :

iShares MSCI Emerging Markets Indx (ETF)   EEM 24.64   +1.85 (8.12%)
UltraShort MSCI Emerging Markets ProShares EEV 85.84  -16.41 (-16.05%)

Brazil, Russia, India and China had agreed to boost trade and capital flow

Sources :

Sovereign wealth funds turning cautious: analysts

Brazil, Russia, India and China had agreed to boost trade and capital flow

World Bank President Robert Zoellick (back row L) poses for
an official picture with the G20 Finance Ministers and
Central Bank Chiefs during their meeting in Sao Paulo November 8, 2008.
Finance ministers and central bank governors from
the 20 most industrialised and important emerging economies
are gathered at the meeting to discuss global financial stability.
REUTERS/Marcos Issa/Argosfoto/Handout (BRAZIL).
FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING
OR ADVERTISING CAMPAIGNS.
Brazil, Russia, India and China, or the BRIC nations, had agreed to cooperate with each other to boost trade and capital flow, according to Russian Finance Minister Alexei Kudrin, who is attending an annual meeting of the Group of 20 (G20) major industrial and emerging-market countries.

He noted that the financial crisis troubling developed countries was yet to hit bottom and predicted a recession for the United States and the European Union next year, whereas the economies of the BRIC nations would continue to expand.

Actually, Russia's economic growth in 2009 would be lowered to 3.5 percent, down from a previous projection of 5.5 percent. The price for the country's oil, called Urals, will average about $50 a barrel next year, down from a forecast of $95 a barrel a month ago. The average price will climb to $55 in 2010. If oil price really declines to $50 a barrel next year, then Rusia will have a current-account deficit in 2009. Declining oil prices may also affect the ruble. Oil prices will have an impact over it and, because of that, the current account, and the capital account as well. All these factors will have an impact on the exchange rate policy.

Rusia's Cental Bank sold a net $43 billion of dollars and euros in October, as investors withdrew cash from the country amid the nation's worst financial crisis since its $40 billion debt default in 1998. Reserves, the world's third-biggest, declined $2.4 billion to a revised $487 billion last week.

Finance ministers and central bank governors from the G20 nations began the two-day meeting in Sao Paulo Saturday. Founded in 1999 as an informal arena to facilitate dialogue between major industrial and emerging-market countries, the G20 accounts for 85 percent of the world's economy and about two-thirds of the world's population.

ETFs/Stocks :

iShares MSCI Emerging Markets Indx (ETF)   EEM 24.64   +1.85 (8.12%)
UltraShort MSCI Emerging Markets ProShares EEV 85.84  -16.41 (-16.05%)

Crisis is far from over - Will China be the next?

Sources :

Major emerging economies agree to jointly cope with financial crisis

BRICs May Coordinate Response to Crisis, Kudrin Says (Update2)

Sunday, November 9, 2008

ETF sectors that could be pulled up by Obama Policy

Roche to get the rest of Genentech shares in the buy out offering

Subway is a largest and fastest growing market of franchises

The High yield stocks at low price to book ratio

China announced $586 billion stimulus package to tackle the economic slowdown (Update 1)

Cash-rich sovereign wealth funds from Asia have been burnt

Brazil, Russia, India and China had agreed to boost trade and capital flow

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