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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (6560)	5/19/2006 3:44:18 PM
From: energyplay	Read Replies (1) \| Respond to of 220280

On commisions - I am getting 9.95 with Schwab, 8.00 with Fidelity, and about 1.00 with IB Interactive Brokers. IB has a more complicated interface, and a simpler web based one too. Their tax reporting needs to be improved. I expect you are right about 2007, but it could be longer. Many of the smaller stocks I have do not have much support, and are dropping much more than large caps. GPXM and Mercator mining are down more than Phelps Dodge. I intend to hold both of those. I am really worried about oil and gas. The Iranian mullahs don't want Iran to be a pariah state. When they took over from the Shah they stopped most of Iran's nuclear work. There is a natural gas glut comming for North America as storage gets filled up. I can see that with high tax rates, holding makes more sense, especailly with dividend paying stocks.

To: Seeker of Truth who wrote (6560)	5/21/2006 5:45:57 AM
From: TobagoJack	Read Replies (1) \| Respond to of 220280

I see no way out, except worldmarket.blogspot.com Chugs, J

To: Seeker of Truth who wrote (6560)	5/24/2006 7:22:19 AM
From: elmatador	Respond to of 220280

Real's fall versus dollar might offer clue to Brazil's prospects By Jonathan Wheatley in São Paulo Published: May 24 2006 03:00 \| Last updated: May 24 2006 03:00 The recent sell-off across Latin America's financial markets was part of a global flight to quality and has nothing to do with fundamentals in the region. That is the consensus view of investors in Latin America. But once the dust settles, investors will have to take a fresh look at local fundamentals and prospects for growth. The region's main stock market indices have fallen roughly in unison since the start of last week. Brazilian shares had lost 6.87 per cent by midday trading yesterday, Argentina's 8.2 per cent and Mexico's 7.03 per cent. It was a different story on currency markets. The Mexican and Argentine pesos weakened slightly during that time but the Brazilian real fell 5.65 per cent against the dollar. That might be a clue about Brazil's prospects. The real was due for a correction. It reached R$2.06 to the dollar this month, from R$3.20 two years ago. As a result, manufacturers have found it increasingly hard to compete at home and abroad, so there will have been some relief when it slipped to R$2.20 last Friday and R$2.29 on Monday. Some of those losses were already being reversed in early trading yesterday. This trend can be expected to continue, powered by Brazil's mighty trade surplus and high interest rates. After Brazil's financial crisis in 2002 the central bank raised its reference interest rate to 26.5 per cent. As inflation has come under control, the rate has eased and now stands at 15.75 per cent. Manufacturers are clamouring for faster cuts - to reduce borrowing costs, drive growth and ease pressure on the currency - but the central bank has found it hard to comply. One reason is caution over inflation. Another, less widely noticed reason concerns the profile of domestic public debt. At 49.2 per cent of gross domestic product, domestic public debt is a significant impediment to growth in Brazil. It uses up public revenues that could otherwise be freed for investment and crowds other more productive borrowers out of the market. Reducing the ratio of debt to GDP is the priority of the economics team at the finance ministry and central bank, while improving the profile of domestic debt (making it less vulnerable to changes in external conditions and reducing the cost of borrowing) is the narrower priority of the Treasury. The Treasury team has done a good job during the past decade of improving the profile of external and domestic debt. Its priority on the domestic side has been to reduce the amount of floating-rate debt - vulnerable to swings in the currency and interest rates - and replace it with fixed-rate debt. It has been hugely successful in removing dollar-linked debt from the market. This is the debt that is most subject to factors beyond the government's control and that has caused most trouble in the recent past, sending debt-service costs rocketing after devaluations in 1999 and 2002. The Treasury has been able to remove dollar-linked debt because investors have few concerns over Brazil's external accounts. Trade and other flows have kept the current account firmly in credit and reserves are growing. Investors are confident that Brazil can pay its bills and see little reason to demand protection against the threat of devaluation. But the Treasury has been much less successful in reducing the amount of interest rate linked debt. The reason is that in moving from floating-rate to fixed-rate debt, investors look at the risk of inflation, in large part determined by the success or failure of fiscal policy. To accept fixed-rate debt would be to give a vote of confidence in fiscal policy similar to that given to the current account. This is something investors are reluctant to do. It is not hard to see why. Brazil devotes a massive 42 per cent of public spending to pensions and social security, far more than any other country in the region. Yet the government has declared its intention not to tackle the problem through structural reform, preferring to improve things at the margin through changes in inspection and management. Investors are unimpressed. As they begin to reallocate assets, they might focus more on Brazil's fiscal imbalances and their implications for future growth.