This Special Deal Ends Tomorrow
It’s no wonder we’re celebrating. Keith Fitz-Gerald just racked up 58 winning recommendations out of 60 for his readers. For three years running. To our knowledge, a milestone of this magnitude has never been achieved before. That makes this Three-Year Anniversary event the most potentially profitable ever. This short video shows exactly how you could achieve the same thing for yourself - with the help of an important secret weapon. Please note: this special “test drive” opportunity ends tomorrow.Go here to see it.
February 2, 2012Godzilla Will Come Out of Tokyo Bay Before Japan Rebounds
By Keith Fitz-Gerald, Chief Investment Strategist
Let's talk Japan.
Every year some analyst comes out with a variation of the story that Japan is about to rebound.
Usually the argument goes something like this: Japanese markets are impossibly cheap and the central bank will be there to prevent a catastrophe.
Or sometimes there is another variation of the Cinderella story.
Either way, don't hold your breath. Japan posted its first trade deficit since 1980 last year and the big trade surpluses needed to drive the Nikkei back to its glory days are over.
At best, Japan is going to see balanced trade figures or a small surplus in the years ahead. It won't be enough.
If you're not familiar with what a trade deficit is, here's what you need to know: Japan imported $32 billion worth of stuff more than it exported for the first time in 31 years.
Fighting the Demographic Tide
Critics say there are mitigating factors behind the figures and they're right.
Against the backdrop of one of the world's fastest aging populations, one of the lowest birth rates on the planet, a renewed reliance on foreign energy, and a yen that is so expensive that Japanese corporations are offshoring production, it won't be long before the country eventually plows through its savings.
So $32 billion is just the beginning...
In fact, we are more likely to see Godzilla walk out of Tokyo Bay than we are to witness a return to Japan's halcyon days.
Worse, I believe that within the next five years, Japan will long for the good old days when the trade deficit was merely $32 billion, instead of $100 billion, $200 billion or worse.
Not one of the things I've just mentioned - that the critics cite as short-term influences - are anything but continuations of much longer-term trends. Nearly all of them are being driven by Japan's declining population.
You may not know this, but Japan's population is projected to shrink by 30% by 2060. That means the total population will go from 128 million people today to only 87 million people in less than 50 years.
That's hard to imagine since Japan is one of the most densely populated countries on the planet. But the effects are already visible.
In my neighborhood in Kyoto, for example, we see abandoned houses that fall in on themselves after people die and there are no longer any other family members to live there. We see schools that are shut down in the region because there are no kids to attend them.
We're also seeing companies shuttered because there are no markets for their products, including my wife's family kimono business, which closed after 300 years in existence.
Simply put, you just can't grow a population or its stock markets without people.
Japan also has no immigration policy to speak of, so there is no means of replacing the "silvers," or senior workers, who are leaving their productive years behind them.
By 2060 the number of people who are 65 or older is going to double. At the same time, the number of people in the workforce between 15 and 65 is going to shrink to less than 50% of the total population.
By 2050, there will be 75 retirees for every 100 workers. By comparison, in the United States in 2050 there will be about 32 retirees per 100 workers.
You'd think Japan could get "busy" and produce more children but even that's problematic. The country has one of the lowest birthrates on the planet. Many young Japanese simply don't want romance -- let alone children.
In fact, many Japanese don't even want sex.
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We Beat The “January Barometer” By Several Months
The S&P gained 4.4% last month, the best January in 15 years. Now everyone’s talking about the “January Barometer” predicting a good year for stocks. Yet this is old news to Private Briefing subscribers. They’ve posted 15 double-digit gains over the last several months. And now we expect those gains to grow infinitely bigger, as you’ll soon see. Just go here to learn more..
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LNG Stocks Are Set to Take Off
By Dr. Kent Moors, Global Energy Strategist
As I have discussed over the last two years, liquefied natural gas (LNG) is going to be a complete game-changer.
And along the way, a small group of LNG stocks will become the main focus for investors.
Remember, the LNG process cools natural gas to a liquid form, allowing it to be shipped over long distances. Upon arrival, the liquefied gas is returned its original state before being injected into pipeline for delivery to foreign consumers.
Already, the construction of LNG receiving terminals in Asia and Europe is accelerating.
Here's why.
The European and Asian markets have the biggest need for imports. These markets have a need to meet rising demand and restrain the prices commanded by long-term pipeline-delivered gas.
Luckily, LNG can do both.
Traditionally, natural gas has only been able to develop regional "spot" markets. These are locations where the availability of volume provides an opportunity for traders to execute a price for a quick sale (usually within 72 hours).
This is because the availability of product depends upon the development of import pipelines, which are multi-year, capital-intensive projects.
LNG, on the other hand, can be delivered to a terminal, so it can provide an immediate increase in available local supply.
To the extent that the LNG trade can be sustained, new spot markets are immediately formed around the hubs that develop at the intersection of terminal and delivery pipelines.
And now Qatar - one of the world's largest producers of conventional gas (that is, from freestanding gas fields) - has banked on LNG being the wave of the future.
Qatar has become the first country to commit all of its production to the LNG trade.
And that is a huge vote of confidence for this market.
Considering the number of new tankers involved, this single decision jolted the global shipbuilding industry into one of the most significant increases in business ever recorded.
The Qatari decision was just the first step...
A Global Boost for LNG Stocks
New export terminals are being built by other major gas producers - Russia, North Africa, and Canada. Our neighbors to the north have clearly signaled where the U.S. will be moving next.
A project is moving forward at Kitimat, British Columbia, on the North Pacific coast. It is scheduled for completion in 2014.
Developers originally intended this project to be an LNG receivingfacility. But by the time the construction began, the intended flow of gas had changed by 180 degrees.
Today, this facility will be 100% committed to exporting LNG.
And the reason is the same one that is prompting so much U.S. discussion...
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How You Can Profit from the Fed's "Height
of Stupidity"
The U.S. Federal Reserve plans to hold interest rates down near zero until 2014.
How do we know? Because Team Bernanke delivered the news last week as part of the Fed's new policy to disclose its interest rate forecast - a plan Capital Wave Strategist Shah Gilani calls the "height of stupidity."
Now that the Fed has made this misstep, what should you do with it?
Money Morning Executive Editor Bill Patalon wanted to give you that answer. He turned to our team of financial experts and asked them to outline the risks and profit opportunities arising from the Fed's low interest rate policy.
They all agreed that the cheap-money world the Fed has created holds dangerous pitfalls - as well as potentially soaring profits. Investors can avoid those pitfalls and actually make money if they know what steps to take.
Click here to get those steps, detailed Jan 27. in our Private Briefing investment service. You'll also gain access to all ourpast Private Briefing columns and receive them in your inbox every day.
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Buy, Sell or Hold: A Look at Carnival Corp (NYSE: CCL) After the Costa Concordia Tragedy
Jack Barnes, Global Macro Trends Specialist
Carnival Corp. (NYSE: CCL) is the world's largest provider of vacation cruises operating under the names Carnival Cruise Lines, Holland America Line, Princess Cruises, and Seabourn in North America; and AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, and P&O Cruises in Europe, Australia, and Asia.
As you know, Carnival has been all over the news lately because of the deadly sinking in Italy, when the Costa Concordia suffered one of the largest cruise ship accidents in decades.
Since then, Carnival Corp. shareholders have taken some steep losses. Shares are down nearly 12%.
For investors, that leaves the question of what will happen to Carnival Corp. in the wake of the tragedy.
However, from strictly a business standpoint what investors need to know is that the ship is fully insured and at this stage it is the reinsurance firms that will have to fund the refloating and fixing costs.
So as tragic as the disaster has been, Carnival Corp. will survive.
According to a Carnival Corp. release, "the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share."
The larger concern, as management admits in the very next sentence of the release, is that "the company anticipates other costs to the business that are not possible to determine at this time." (Full release)
So our problem here in deciding whether to buy, sell, or hold CLL are the after-effects of the accident, such as whether or not people will decide to book vacations on any of Carnival's brands.
More importantly, we won't be able to measure year-over-year comparisons for first quarter bookings until quarter end, and we won't be able to tease the bookings data for quarters two, three, and four for almost a year, when full data will be available.
However, while the company is probably going to be looking at a slower-than-expected year, I believe insurance and the diversity of assets make the Costa Concordia disaster a unique one-off event.
As a result, it's time to "Hold" Carnival Corp. (**).
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