TFN eNews 11/30/2009: One stock to play this “Cyber Monday”
Published via e-mail broadcast on November 30, 2009
In today’s TFN eNews:
* Teaching banks their business
* Betting on China’s consumer demand
* Betting on cyber shopping
Dear TFN eNews reader,
This weekend, Venezuelan President Hugo Chavez threatened that he’d nationalize private banks “because the banks don’t want to extend credit to the poor.”
The business of banks being, I suppose, making loans to the poor.
A simple solution to a simple problem, I thought. How cumbersome we handle this kind of stuff back in the United States! In the mid-1990’s, now-President Obama still had to sue banks into writing bad loans… and Barney Frank wheeled and dealed countless hours beefing up Fannie Mae and Freddy Mac to assure banks that subprime loans were safe and sound!
China’s approach, by comparison, is even more simple. Then again, they didn’t have to deal with pesky concepts of private property to begin with. The big four banks are government-owned already! And issuing credit now substitutes for economic policy.
Over the past couple of weeks, there were rumblings that Beijing might actually rein in its easy-money policy. (After all, credit has now created huge bubbles in commodities, stocks, and real estate.)
But Chinese stocks rebounded from their biggest weekly loss in three months today: China’s government pledged to maintain its stimulus policies next year. No new stimulus money beyond the existing $585 billion package was committed so far. But banks will continue to enjoy increased leeway to make loans. Subsidies for purchases from cars to home appliances also will continue — at least for another year.
Helping banks do what they’re supposed to do: Ladle out money…
*** I bet this news came as a relief to Global X Management Company LLC.
They’re about to launch the first exchange-traded fund linked to Chinese consumer companies. It will begin trading in New York tomorrow.
The ETF includes, among others, Tsingtao Brewery Co. and department-store operator Golden Eagle Retail Group Ltd.
China’s proclaimed ‘vigorous’ steps to “boost domestic demand and reduce reliance on investment and exports for economic growth” (President Hu Jintao) sound like a great idea for a country that owed its prosperity mainly to one sector of its economy.
In fact, it’s almost as good as the plan to wean a spoiled Persian Gulf emirate from its reliance on oil and natural gas exports by building a glimmering, futuristic fata morgana of a city state smack dab in the middle of the desert…
*** “On any other day, the Dubai story would have been a B-page sidebar,” writes TFN’s chief strategist Andrew Snyder. “But on Black Friday, with nothing but mall Santas and frenzied shoppers to interview, the media managed to turn it into a full-fledge financial emergency. While the world markets haggle over $60 billion in debt restructuring (a drop in the bucket in modern Wall Street bailout terms), traders are using the volatility to their advantage.
“One stock all traders should be aware of on this so-called ‘Cyber Monday’ is ValueVision Media (NASDAQ:VVTV), the home of ShopNBC. As consumers cut back this holiday season, shoppers will diligently search for the best deals. One place they will find them is on the company’s home-shopping network and the ShopNBC web site.
“I’ve tracked ValueVision for numerous holiday seasons. It is a predictable, cyclical play with the holiday season the catalyst for strong swings in either direction. Historically, buyers that got in before the holiday season and got out early in the New Year made sizeable and reliable gains. But predictability kills Wall Street…
“Over the past several years, buyers that got in on December 1 and out on January 1 lost money. That’s because after years of predictable gains, the bandwagon became overloaded. But this year I’m expecting another turnaround in the trend. We’re back to ‘buy now and sell in January’! You won’t get rich from the play (I give it a 20% upside), but you will find a way to eliminate most market volatility and put weaker consumer spending on your side.”
How to play this? Just read on here!
***A new way to play gold:
“The Chinese government has secretly created a new type of government-backed gold investment. We believe it could pay 500% over the next few years, because a similar government investment has returned 1,084% in recent years. The details of this situation have never appeared in The Wall Street Journal, The New York Times, or any other mainstream U.S. media.”
See the full story here… http://www.stansberryresearch.com/pro/0907OILCHI39/MOILKB02/PR
*** Quote of the Day:
“Advocates of government control want you to believe that the serious shortcomings of our medical and insurance system are failures of the free market. But that’s impossible because our market is not free. Each state operates a cozy medical and insurance cartel that restricts competition through licensing and keeps prices higher than they would be in a genuine free market. But the planners won’t talk about that. After all, if government is the problem in the first place, how can they justify a government takeover?” — John Stossel, Creators.com
Recommended Reading:
3 Penny Stocks With Winning Potential
Worst-performing commodity of 2009
Dubai credit crunch: Red alert for these companies!
Today’s Top 3 Financial News Stories:
MoneyNews.com – Prechter: Leverage 200 Percent, Go Short “One of the leading financial newsletter publishers in the U.S., Mark Hulbert of The Hulbert Financial Digest, is reporting that now may be the time for investors to leverage their portfolios ‘200 percent’ and short the stock market.”
Telegraph.co.uk — Benign neglect may turn the dollar from a safe haven to a dangerous place to be “The US government is shouldering a vast $12 trillion debt pile – that’s 12, followed by 12 zeros.”
Bloomberg.com — Dubai May Forfeit Financial Hub for Abu Dhabi Help “Dubai, the debt-laden Gulf city- state, may lose its status as the region’s financial hub in return for a rescue package from its oil-rich neighbor Abu Dhabi, economists and analysts said.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
P. S. 12 stocks with ”Moon Shot” potential:
Even in this market, it’s not really uncommon for some stocks to return 500%, 1000%, even close to 3,000% in just a few months. Sometimes it only takes weeks. Or even days. What do they all have in common? We’ll tell you right here…
http://www.todaysfinancialnews.com/PSC/LAUNCH/EPSCKB07.html
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