Financing FAQ

Posted on Friday, 22nd July 2011 by Emily Smith

EUROPEAN markets enjoyed a respite from trouble today; equities rose, along with the euro, and yields on Spanish and Italian debt fell back. There’s no enduring good news here, however. Rather, traders are probably taking profits while they await the outcome of this Thursday’s emergency summit. And beneath the main indexes, trouble continues to build.

In a new debt auction, yields on Spanish 12-month and 18-month bonds rose sharply from the last debt sale; the yield on the latter rose to 3.912%, up from 3.26% a month ago. Spain will return to markets again on Thursday, when it will auction off €2.75 billion in long-term debt. Right now, the market yield on long-term debt is over 6%. If that’s what Spain gets from markets in its new auction, the sustainability of its government finances will face new doubts. The Spanish government is on the brink; at lower interest rate levels its debts are manageable, but at higher rates it might well prove insolvent. This is why confidence is key. But there seems to be little urgency within the euro-zone’s leadership regarding the need to get ahead of contagion.

Meanwhile, the economic picture continues to darken. Bu

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Posted on Thursday, 21st July 2011 by Emily Smith

WASHINGTON – Last Thursday, the National Prevention, Health Promotion, and Public Health Council released the National Prevention and Health Promotion Strategy, a comprehensive plan that will help increase the number of Americans who are healthy at every stage of life. 

“This National Prevention Strategy, called for under the Affordable Care Act, will help us transform our health care system away from a focus on sickness and disease to a focus on prevention and wellness. We know that prevention helps people live long and productive lives and can help combat rising healthcare costs,” said Department of Health and Human Services (HHS) Secretary Kathleen Sebelius in a statement. Sebelius is on the council, which is composed of members representing 17 federal agencies.

“As a family physician, I understand the importance of stopping disease before it starts,” added Surgeon General Regina Benjamin, chair of the council. “The leaders

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Tags: National Prevention, Strategy
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Posted on Thursday, 21st July 2011 by Emily Smith

Energy exchange traded funds have rallied over the past month as oil prices grind their way back to $100 a barrel and the sector ETFs extend their market lead.

Energy Select Sector SPDR Fund is up 8.2% over the past month, compared with a 3.9% gain for the S&P 500. Year to date, the energy ETF has climbed 17% while the broader market has advanced 8%, according to Morningstar.

Energy ETF holding Chevron is up more than 20% so far in 2011. The rally in the top Dow component is one reason why the index is outperforming the S&P 500 this year.

The energy ETF “is outperforming today with the point and figure price chart nearing a spread triple-top breakout, a move which would notch a new 2011 high. Beyond that we would look for a test of the 2008 high, also the all-time high, at $91.42 a share,” according to the Coe Report, a newsletter from Investors Intelligence.

“Just as compelling is the P&F relative chart for XLE versus the S&P 500. That

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Tags: 100
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Posted on Thursday, 21st July 2011 by Emily Smith

Exchange traded funds that target U.S. Treasury bonds, which many investors use to steady their portfolios, have seen volatility ratchet higher this week with swings of more than 1% the past two days as markets look for resolution on the debt ceiling.

The long end of the Treasury yield curve has seen the biggest twists and turns this week as traders hang on every headline about the U.S debt limit.

A plan from the so-called Gang of Six senators that would cut the deficit by nearly $4 trillion may provide the framework for breaking the political deadlock over the nation’s debt ceiling by the Aug. 2 deadline, Reuters reported.

The iShares Barclays 20+ Year Treasury Bond was down 1.3% on Wednesday after soaring about 2% the previous session.

Treasury ETFs spiked in late 2008 and early 2009 as the worst of the credit crisis tore through financial markets. They also rose in 2010 as the economy faltered before the Federal Reserve announced its second round of quantitative easing.

Now in 2011, Treasury ETFs have been trending higher since February as yields fall. B Read more…

Tags: Bond, Treasury Bond
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Posted on Wednesday, 20th July 2011 by Emily Smith

WASHINGTON – The latest plan to surface in the Congressional debate to raise the debt ceiling is the proposal from the recently resuscitated “Gang of Six” senators that aims to reduce the federal deficit by $3.7 trillion and includes significant cuts in government healthcare programs.

Under this plan, the Senate Finance Committee would be required to find $500 billion in healthcare spending cuts over 10 years, though it carries the proviso that cuts cannot come at the expense of services that the poor and elderly rely upon. The cuts to healthcare are reportedly deeper than the bi-partisan group of senators had in their original proposal earlier this year. The deeper healthcare cuts were reportedly added in order to bring Sen. Tom Coburn (R – Okla.) back into the fold, after he abruptly pulled out of the group earlier this year.

“I understood Sen. Coburn,” Gang of Six member Sen. Mark Warner (D – Va.) told Politco. “He wanted even more reductions in certain entitlement programs. He wanted speci

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Tags: Plan
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Posted on Wednesday, 20th July 2011 by Emily Smith

A “HEAT dome” is descending on Washington. It’s hovering over much of America, actually, sending temperatures into triple digits (or the upper 30s, if you prefer). This is just the latest in what has been a remarkable series of extraordinary weather events. America’s south is experiencing a record drought. So, too, is the horn of Africa, where a famine may impact millions of people. In late June, an airport in Oman recorded the highest ever low temperature; on the evening of the 27th, the mercury failed to drop below 107 degrees Fahrenheit. Droughts, floods, deadly storms: the news is full of them. While it’s not easy to attribute any individual event to climate change, it is clear that a hotter planet translates into a higher frequency of extreme weather events.

When we emit carbon into the atmosphere, we impose a tiny cost on society as a whole in the form of more rapid global warming and a greater intensity of the accompanying social ills. Views of the magnitude of this cost differ. Many studies peg it at somewhere between $5 and $150 per tonne of carbon.

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