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Dec 29, 2009

Forbes . com: INTELLIGENT INVESTING




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Intelligent Investing Panel
We Need Loans
Christopher Hyzy, Paul Maidment, Bernie McSherry and Carol Pepper discuss the health of the financial services and banking sector.
With Paul Maidment
Intelligent Investing Panel
2010 Will Be Fine
Some experts gathered by the Intelligent Investing team express their confidence in the economy's growth.
With Paul Maidment

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2010 Outlook: Personal Finance
Paul Maidment, Forbes editor, discusses personal finance and housing tips for 2010 with Christopher Hyzy, Bernie McSherry and Carol Pepper.

Department of the Treasury : U.S.A. International Reserve Position

U.S. International Reserve Position
The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $133,166 million as of the end of that week, compared to $133,834 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)




December 24, 2009
A. Official reserve assets (in US millions unless otherwise specified) 1
Euro
Yen
Total
(1) Foreign currency reserves (in convertible foreign currencies)


133,166
(a) Securities
10,242
14,189
24,431
of which: issuer headquartered in reporting country but located abroad


0
(b) total currency and deposits with:



(i) other national central banks, BIS and IMF
14,802
6,910
21,713
ii) banks headquartered in the reporting country


0
of which: located abroad


0
(iii) banks headquartered outside the reporting country


0
of which: located in the reporting country


0
(2) IMF reserve position 2
13,417
(3) SDRs 2
57,370
(4) gold (including gold deposits and, if appropriate, gold swapped) 3
11,041
--volume in millions of fine troy ounces
261.499
(5) other reserve assets (specify)
5,194
--financial derivatives

--loans to nonbank nonresidents

--other (foreign currency assets invested through reverse repurchase agreements)
5,194
B. Other foreign currency assets (specify)

--securities not included in official reserve assets

--deposits not included in official reserve assets

--loans not included in official reserve assets

--financial derivatives not included in official reserve assets

--gold not included in official reserve assets

--other









II. Predetermined short-term net drains on foreign currency assets (nominal value)









Maturity breakdown (residual maturity)

Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Foreign currency loans, securities, and deposits




--outflows (-)
Principal





Interest




--inflows (+)
Principal





Interest




2. Aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps)




(a) Short positions ( - ) 4
 -10,272
 -10,272
 

(b) Long positions (+)




3. Other (specify)




--outflows related to repos (-)




--inflows related to reverse repos (+)




--trade credit (-)




--trade credit (+)




--other accounts payable (-)




--other accounts receivable (+)











III. Contingent short-term net drains on foreign currency assets (nominal value)








Maturity breakdown (residual maturity, where applicable)

Total
Up to 1 month
More than 1 and up to 3 months
More than 3 months and up to 1 year
1. Contingent liabilities in foreign currency




(a) Collateral guarantees on debt falling due within 1 year




(b) Other contingent liabilities




2. Foreign currency securities issued with embedded options (puttable bonds)




3. Undrawn, unconditional credit lines provided by:




(a) other national monetary authorities, BIS, IMF, and other international organizations




--other national monetary authorities (+)




--BIS (+)




--IMF (+)




(b) with banks and other financial institutions headquartered in the reporting country (+)




(c) with banks and other financial institutions headquartered outside the reporting country (+)




Undrawn, unconditional credit lines provided to:




(a) other national monetary authorities, BIS, IMF, and other international organizations




--other national monetary authorities (-)




--BIS (-)




--IMF (-)




(b) banks and other financial institutions headquartered in reporting country (- )




(c) banks and other financial institutions headquartered outside the reporting country ( - )




4. Aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency




(a) Short positions




(i) Bought puts




(ii) Written calls




(b) Long positions




(i) Bought calls




(ii) Written puts




PRO MEMORIA: In-the-money options 11




(1) At current exchange rate




(a) Short position




(b) Long position




(2) + 5 % (depreciation of 5%)




(a) Short position




(b) Long position




(3) - 5 % (appreciation of 5%)




(a) Short position




(b) Long position




(4) +10 % (depreciation of 10%)




(a) Short position




(b) Long position




(5) - 10 % (appreciation of 10%)




(a) Short position




(b) Long position




(6) Other (specify)




(a) Short position




(b) Long position





IV. Memo items



(1) To be reported with standard periodicity and timeliness:

(a) short-term domestic currency debt indexed to the exchange rate

(b) financial instruments denominated in foreign currency and settled by other means (e.g., in domestic currency)  

--nondeliverable forwards

   --short positions

   --long positions

--other instruments

(c) pledged assets

--included in reserve assets

--included in other foreign currency assets

(d) securities lent and on repo
5,296
--lent or repoed and included in Section I

--lent or repoed but not included in Section I

--borrowed or acquired and included in Section I

--borrowed or acquired but not included in Section I
5,296
(e) financial derivative assets (net, marked to market)

--forwards

--futures

--swaps

--options

--other

(f) derivatives (forward, futures, or options contracts) that have a residual maturity greater than one year, which are subject to margin calls.

--aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps)

(a) short positions ( – )

(b) long positions (+)

--aggregate short and long positions of options in foreign currencies vis-à-vis the domestic currency

(a) short positions

(i) bought puts

(ii) written calls

(b) long positions

(i) bought calls

(ii) written puts

(2) To be disclosed less frequently:

(a) currency composition of reserves (by groups of currencies)
133,166
--currencies in SDR basket
133,166
2--currencies not in SDR basket

--by individual currencies (optional)


Money Morning : December 29,2009




December 29, 2009
U.S. Stocks Will Reward Optimistic Investors in 2010

By Jon D. Markman, Contributing Writer, Money Morning

I have been surprised to see the air thick with pessimism in recent weeks. Not so much the stock market, where the sentiment indexes show the bulls dominating the bears by slightly more than 52%. But among the general public.

An NBC/Wall Street Journal poll last week found that 55% of all Americans feel the nation is heading the wrong direction. This is the highest level since January of this year - when the financial crisis was red hot and U.S. President Barack Obama was just entering the White House! That's amazing.

A recent CNBC "Wealth in America" report found more negativity. Negative sentiments were expressed about the economy, stocks, home values, and wage growth. Faith in institutions like the U.S. Federal Reserve, the U.S. Treasury, and the financial sector were very low. President Obama's approval rating has fallen below 50% for the first time.

However, Merrill Lynch & Co. Inc. researchers picked up on this theme, and said in a recent note to clients that 2010 would be the year we exit the "pessimism bubble."

And I couldn't agree more. In fact, there might not be a better time to buy stocks.

Let me explain...
Markman on...
- The Recovery is Picking Up Speed, Setting the Stage for Big Gains in the Next Year
- How Simple Investing Strategies Can Generate Maximum Profits


Make This Mistake and Kiss Your Retirement
Good-bye


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The "January Effect" Could Offer Quick Gains for Small-Cap Investors

By Larry D. Spears, Contributing Writer, Money Morning

If your investing tastes run more to small-cap issues than the giants of the Dow Jones Industrial Average and other major indexes, you could find 2010's best buying opportunities before the new year even starts - today (Tuesday) and tomorrow to be precise. That's the promise of the so-called "January Effect," historically one of the most reliable of the recognized stock market anomalies.

Although there are some minor variations, the primary thrust of the January Effect states that stocks do better in January than in any other month - and small stocks do better than large stocks, with the bulk of the gain realized from the final trading day of December through the middle of the following month.

While the first portion of that hypothesis isn't strictly true - historically, April has held a slight edge over January in general stock market performance - the small-stock portion has a strong record. In fact, in some years, small-stock gains in the first trading days of January have accounted for the sector's total advance for the entire year.


Continue...


Investment News Briefs

Money Morning Staff Reports


With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

Fannie, Freddie Get Blank Checks; Holiday Retail Sales Rise 3.6%; Fed to Banks: Set Up CDs with Us; Health Care Bill Likely to Resemble Senate Version; JPMorgan Sues Former Bank Exec; Oil Tops $79 for First Time in Four Weeks

  • In what's been called a "perplexing" move by one analyst, the U.S. Treasury lifted a $200 billion cap on the amount of taxpayer dollars that can be injected into ailing mortgage firms Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) , providing unlimited support to them. The Treasury put into $60 billion into Fannie and $51 billion into Freddie, and were unlikely to need more than the $200 billion cap, wrote Keefe, Bruyette & Woods Inc. analyst Bose George in a note to investors yesterday (Monday). George views the Treasury's move as a way to more aggressively prop the U.S. housing market, and said the government could step up efforts of its Home Affordable Modification Program (HAMP), a mortgage-modification program designed for homeowners who can no longer afford them. But so far, HAMP and other government props have failed to stop a continuing wave of foreclosures, as Money Morning reported last fall. Shares of the firms, both government-sponsored enterprises (GSE) skyrocketed in trading yesterday. Fannie was up 20.95% to close at $1.27, while Freddie gained 26.98% to close at $1.60.


  • Retail sales gained 3.6% year-on-year from Nov. 1 through Dec. 24, according to SpendingPulse, a unit of MasterCard Advisors (NYSE: MA) . However, there was an extra day between Thanksgiving and Christmas this year, and it's unclear how much this factor skews the data, which could be anywhere from 2% to 4%, SpendingPulse said. The National Retail Federation (NRF) expects holiday sales will have declined 1%. Sales in the same period last year declined 2.3% as consumers began reeling from October's meltdown of the financial markets.


  • The U.S. Federal Reserve proposed a program to set up what essentially amounts to certificates of deposits at the central bank, in an attempt to mop up some of the $1 trillion in excess liquidity in the banking system. Under the proposal, the Fed would offer so-called "term deposits" that would pay interest, providing banks with another incentive to keep their money at the central bank instead of having it flow back into the economy. Despite this, the Fed says its proposal "has no implications for monetary policy decisions in the near term."


  • The final version of the proposed healthcare bill in the U.S. House Representatives and Senate will likely resemble the Senate version when it's submitted to President Barack Obama, top Democrats said on Sunday. The Senate version of the bill omits a government-sponsored insurance program that would compete with private insurers. Instead, companies like UnitedHealth Group Inc. (NYSE: UNH) and Aetna Inc. (NYSE: AET) would get 31 million new customers who would receive coverage by 2019, according to an estimate by the Congressional Budget Office (CBO). House Democratic Congressional Campaign Committee Chairman Chris Van Hollen, D-MD, told "Fox News Sunday" that maintaining the Senate's 60 votes is important, but the House is "not going to rubber-stamp the Senate Bill. On the other hand, we recognize the realities in the Senate."


  • JPMorgan Chase & Co. (NYSE: JPM) is suing Hernan Arbizu, a former private banking executive, accusing him of stealing $2.8 million from a customer's account. Arbizu, who was arrested last year in Argentina on criminal charges, "committed this theft by lying to JPMorgan employees, falsifying documents, and forging the JPMorgan customer's signature on wire transfer authorizations, in order to mislead JPMorgan to believe that the JPMorgan customer had directed these transfers," a complaint in a Manhattan federal court said. Arbizu told Reuters in an e-mail he "had no idea" about the lawsuit and would consult with his lawyer.


  • Benchmark crude oil for February delivery gained 72 cents to settle at $78.77 per barrel in light trading on the New York Mercantile Exchange (NYMEX) yesterday (Monday). At one point during trading, prices rose above $79 per barrel for the first time in four weeks.
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