How To Save Half A Million Dollars?

According to the U.S. Commerce Department, 40% of American households believe they could accumulate $500,000 more easily through the lottery than by savings.

If only you could save $12,000 per year and invested it at 12% in a tax-defferred account, you'd get there about 14 years! Sounds like a more fool-proof way than playing the lottery!

Sleeper Stocks Of 2007

RadioShack Corp. and Amazon.com Inc. have defied short sellers and Wall Street analysts this year by posting the top gains in the Standard & Poor's 500 Index.

Shares of RadioShack, the third-largest U.S. electronics chain, and Amazon, the world's biggest online retailer, were among the 10 most-shorted in the S&P 500 as of June 15, according to data from the New York Stock Exchange and the Nasdaq Stock Market. Short sellers try to profit from stock declines by selling borrowed shares and buying them back at a lower price.

RadioShack has almost doubled since December on buyout speculation and earnings that beat analysts' projections. Amazon jumped 71 percent as the company increased its 2007 profit forecast and introduced a new music download service.

-Bloomberg

Sub-prime CDOs Dressed Up In Hooker Heels!

Holders of investment-grade portions of collateralized debt obligations may lose all of their money in the securities, which have been dressed up in "six-inch hooker heels," according to Bill Gross, manager of the world's biggest bond fund.

Subprime mortgage bonds made up about $100 billion of the $375 billion of CDOs sold in the U.S. in 2006, Moody's Investors Service and Morgan Stanley data show.

CDOs are created by bankers and money managers who bundle together securities and divide them into slices with credit ratings as high as AAA from Standard & Poor's and Aaa by Moody's.

Gross maintains his prediction the Federal Reserve will cut its target interest rate in the next six months as a slowdown in the housing market causes risk premiums to rise and the U.S. economy to slow. Gross said in October that slowing U.S. growth would prompt the Fed to lower rates in the first half of this year. The Fed has kept the benchmark rate at 5.25 percent for the past year.

-Bloomberg

Demand For Diamonds About To Rise?

There will soon be derivatives based on diamonds. A few outfits are coming out soon with some kind of diamond futures. This is only my personal opinion, but I believe we're going to see a major bull market in larger diamonds (three carets and up). Any diamond over ten carets is now considered rare.

A few years ago the Sotheby's and Christie auction catalogues were filled with larger size diamonds for sale. Now, nobody seems to want to part with their large diamonds. The catalogues have very few for sale. I believe the price for larger stones is headed considerably higher.

-Richard Russell

Diamonds are forever – or so investors in the latest alternative investment to hit the London Stock Exchange will be hoping.

Diapason Commodities Management is aiming to raise $400m for the first listed fund to invest in gemstones, buying only large polished diamonds worth more than $1m.

The fund is the latest in a series of offbeat investments aimed at satisfying booming demand for "alternative" returns that are not directly linked to stock and bond markets. Many commodities have already become mainstream, and the search for new investment frontiers has seen investors pile money into hedge funds specialising in reinsurance, wine, art, shipping, and even football players.

Diapason argues that diamond prices have lagged behind the boom in other commodities and are due for a further cyclical upswing – helped by a rise in numbers of wealthy individuals willing to buy extremely expensive jewellery, supply constraints and low stockpiles.

-Financial Times

Hmm....didn't someone put together a hedge fund for antique violins too?

Mortgage Defaults To Worsen

Losses in the U.S. mortgage market may be the `tip of the iceberg` as borrowers fail to keep up with rising payments on billions worth of adjustable-rate loans in coming months, Bank of America Corp. analysts said.

Homeowners with about $515 billion on adjustable-rate home loans will pay more this year, and another $680 billion worth of mortgages will reset next year, analysts led by Robert Lacoursiere wrote in a research note today. More than 70 percent of the total was granted to subprime borrowers, people with the riskiest credit records, they said.

Surging defaults on subprime loans have pushed at least 60 mortgage companies to close or sell operations and forced Bear Stearns Cos. to offer a $3.2 billion bailout for one of two money-losing hedge funds. New foreclosures set a record in the first quarter, with subprime borrowers leading the way, the Mortgage Bankers Association reported.

`The large volume of subprime ARMs scheduled to reset at higher rates in '07 and '08 will pressure already-stretched borrowers,` putting more loans into foreclosure, the Bank of America analysts wrote from New York. A collapse of the Bear Stearns funds `could be the tipping point of a broader fallout from subprime mortgage credit deterioration,` they said.

-Bloomberg

I wouldn't be surprized if companies like LEND sank back down again!

Buy Asian REITs

Morgan Stanley raised $8 billion to create the world's largest global property fund and tap increased demand for real estate in Asia and emerging markets.

Morgan Stanley will invest almost half of the money in Japan and about 25 percent in countries including China and India.

-Bloomberg

Anyone know how to buy Asian REITs?

Is BioDiseal A Commercially Viable Solution

In its monthly crop report released Monday, the U.S. Department of Agriculture said escalating prices have crimped the profitability of some biodiesel plants. At many plants, soybean oil accounts for as much as 80 percent of the operating cost.

Industry experts say biodiesel plants make a profit if soybean oil prices are 34 cents per pound or less.

On Monday, soybean oil for July delivery was trading at nearly 35.5 cents per pound on the Chicago Board of Trade. The market was anticipating prices to rise, said Fred Seamon, a Board of Trade agriculture analyst.

Soybean oil for December 2008 delivery was trading at just under 38 cents a pound, he said.

Seamon said the demand for edible oils in China and India is expected to continue to increase, and the increasing demand from the biodiesel industries in the European Union and the United States for soybean oils is expected to continue to pressure world stockpiles.
-Sioux City Journal

Experts have discovered a crop that can produce diesel fuel... at the same price as regular diesel fuel. Sounds unbelievable, huh? Just think about that for a moment. This plant is going to revolutionize transportation...

- This fuel produces 78% less carbon emissions than regular diesel, so it's popular with the renewable-energy crowd.

- This plant grows anywhere, like a weed, including deserts. Proof: The Saudis are building a plantation on 100,000 hectares of desert right now. In contrast, palm oil is the current choice for biodiesel production in most of the world... but growers must clear massive swathes of rainforest to plant it.

- This plant cannot be eaten by humans. It does not compete with food demand, therefore it is much cheaper than corn or soybeans.

- This plant cannot be eaten by humans, therefore you can irrigate it with any water you want. It doesn't have to be clean water. Water it with water from the nuclear-waste processing facility if you want.

- This plant yields four times as much oil as soybeans, but costs half as much to produce. Soybeans are the cash crop of choice in the U.S. to make biodiesel today.

Basically, this is the perfect plant for making biodiesel... and that's very important.

The world is crazy for renewable energy... crazy enough to put up $19 billion just looking for renewable energy investments. The European Union has mandated that all cars must run on 20% biodiesel by 2020... the UK is introducing similar legislation right now.

India imports 70% of its fuel for transportation. Other Third World countries find themselves in similar situations. In India, there's a strong movement to use biofuels. It's a very fertile country, with more arable land than any other country on earth, including Brazil. India thinks it can grow its diesel cheaper than importing it.

This isn't pie-in-the-sky stuff. Big Oil and big government are getting interested in the plant known as... jatropha.

The government-owned China National Offshore Oil Corp. (CNOOC) is planning to have 80,000 acres of jatropha in Sichuan Province alone by 2010.

Renova Biodiesel of Brazil is expected to plant 60,000 acres of jatropha, and reports suggest that other oil companies are considering planting nearly 500,000 acres in the next four years.

D1 Oils, a British company considered by many to be the leader in cultivation, has plantations from Swaziland to Indonesia and hopes to nearly double its 385,000 acres of jatropha worldwide by the end of 2008.

The Philippine National Oil Co. recently earmarked $14 million for jatropha planting and production, while Indonesia plans to set up 52 biodiesel plants across the country at a cost of $7.3 million.

- Tom Dyson

Look Who's Holding The Bag!

Six Persian Gulf states now have almost $1,600 [billion] in foreign assets, dwarfing even China's mammoth $1,100 Billion of foreign reserves, according to a new report from the Institute of International Finance.

The IIF report attempted to assess how the countries of the Gulf Co-operation Council had deployed their "oil windfall" in recent years. But it noted an "extraordinary deficiency" of information on the capital flows and foreign asset holdings of the GCC's members, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. As well as traditional dollar investments, the IIF said evidence also suggested the six countries had "a strong interest in investments in emerging markets, particularly in the Middle East region and east Asia."

-Financial Times