Ben Bernanke Must Love This profitable shares

At a press conference this morning, was the Federal Reserve Chairman, Ben Bernanke, binding, whether the central bank to initiate a new round of quantitative easing. According to Bernanke, the Fed "additional policy accommodation, if necessary."
While the market had hoped for a clear commitment, the Fed's decision is to stay well on the sidelines for at least a group of files: high yield mREITs like Annaly Capital Management (NYS: NLY) and Chimera Investment (NYS: CIM).
The typical mREIT is nothing but a leveraged fund that specializes in mortgages or mortgage-backed securities. They borrow money at low short-term interest rates generally in the repo market, and then use the money to buy more profitable asset-backed securities. The difference between the proceeds, known as the yield spread, is the source of income, because they are legally obligated to pay 90% of income, their generous dividend yield of 12.7% and 14.4% have, or distribute.
In this sense, in the last few years a veritable gold mine for these companies, such as short-term interest rates as low as they can literally move. But in the middle of last year, it seemed like this could skim threatened by appropriately called Operation Twist from the Fed, a variation on the theme of quantitative easing.
Among the traditional monetary policy of the Fed sets his sights on the reduction of short-term interest rates by buying bonds in the vicinity. You can also use quantitative easing by the Fed shifts the goal of decreasing income by buying longer-dated bonds. Since the latter obviously brings together long and short sentences, it is. Than the flattening of the yield curve
While the lower yields are very well suited for most businesses and consumers because it allows them to borrow cheap money can come for many years, it is an abomination mREITs like Annaly and Chimera. As I said earlier, these funds make money on the difference between the cost of the low short-term interest rates, and the yield of higher long-term rates. In the second quarter of this year, for example, was Annaly average interest margin 1.54%, a 91 basis point decline from the same period a year ago.
Foolish stroke
At the end of the day, the Fed may be the decision to leave as the diffusion of better news for yield-seeking investors in mREITs.
Ben Bernanke in Jackson Hole Speech - The Energy Report
The Energy Report Friday 31 August 2012
Ben Bernanke in Jackson Hole speech was news from the wake Hurricane Isaac overshadow but it is new in Russia shale gas revolution, America has been shaking things.
Fed Chairman Ben Bernanke can make or break the oil market. The market had Ben pulled the expectations that Mr. Bernanke at this historic meeting recently, the Fed chairman would QE3d signal. But while the market downplay the hope that the recent speech by Mr. Bernanke, against expectations, leading the conversation seem to go. I think we might already shown a bit more of an aggressive policy to see how we are progressing.
Of Course Mr. Bernanke is the challenge for management. If Mr. Bernanke sees the economy falters would increase the likelihood that Mitt Romney would have become president. Of course, if Mr. Romney is selected then no longer Federal Reserve Chairman Ben. Interesting decision, do not you think?
May delay or power outages and flooding Louisiana and other parts of the South to return to normality. This also applies to the U.S. energy industry. Phillips 66 said there were "some flooding" at the Alliance refinery in Belle Chasse, Louisiana. The U.S. Bureau of Safety and Environmental Enforcement said 94.99 percent from 72.52 percent of the oil and natural gas production by the hurricane in the Gulf has been lost. Reuters News reported that companies, including Royal Dutch Shell and Anadarko said they could start restaffing and restarting shut-in offshore production platforms on early Friday. Closed from Thursday, 95 percent of oil production and 73 percent of natural gas production in the offshore Gulf of Mexico remained, showed the U.S. government figures. About 936,500 barrels per day (bpd) or 5.5 percent of total U.S. refining capacity was still active. It will probably be a few days or a week to about 1.3 million barrels per day (bpd) of offshore oil and 3.2 billion cubic feet per day of natural gas production, which is embedded recover, experts say. Refineries are also expected to start.
Bloomberg reported that Marathon Petroleum Corp. 's Garyville refinery in Louisiana at a reduced rate until the normal crude oil continued procurement logistics return, Shane Pochard, a company spokesman said in an e-mail. The refinery is not to hold significant losses from Hurricane Isaac, he said.
Remember back when Russia was cut in a labor dispute with Gazprom in January 2006 left Europe feeling vulnerable to the whims of Russia, which could soon only the gas supplies in the middle of winter. Then came Belarus and Russia destroy in a labor dispute ... Remember when it was proposed by Iran that Russia United Arab Emirates and Iran to form a gas cartel to try to use his influence on the price and not to mention the threat to Europe in the cold supplies left be. Now remember, the fears. Russia does not feel more powerful on natural gas primarily because of the shale gas revolution in the United States.
The Energy Expert Center reported that "the economic development of Russia's Ministry:" shale gas revolution "in the United States, it is even more difficult for Gazprom gas in Europe European shale gas Gazprom USA sale for the first time ever, the Russian authorities admitted that Gazprom may be problems with the sale of gas in Europe. According Market Leader, they believe in economic development Ministry of Russia, given the "shale revolution" in the United States and some other countries Gazprom ways finds its investments to more efficient make. They say the service that publishes the development of shale gas production in the United States and the growing number of spot contracts on the market no longer Gazprom on prices high. in a letter after a meeting in August, citing the department as critical by 2016 - when the United States to build terminals for exporting cheap shale gas Gazprom may also internal problems such as rising domestic gas prices and growing tax burden..
Today is the monopoly urges the government to the burden. The final decision on the increase of the mineral production tax to be passed this fall. Gazprom and the supervisory authorities of the Department of Energy have already informed the government that the increase in conflict with WTO rules because the monopoly, to prevent the sale of its gas at sufficient profit. It is in the government believes that Gazprom is ways to increase to find the efficiency of their investments to improve or it may stop competing in both the domestic and overseas markets. The main risks for Gazprom, based on the economic development ministry are as follows: in 2011, exports almost 75% of sales of Gazprom, the largest portion of gas under long-term contracts, the costs associated to oil product prices with a 6-9 months delayed.
As the demand for LPG is on the rise, the pressure on Gazprom in Europe is growing. Today, the price of gas is on the spot market $ 320 per 1,000 cm, while the gas from Gazprom costs sold under long-term contracts whopping $ 400-450 per 1,000 cm Consequently, the share of Gazprom in the European market shrinkage that can result in reduced performance on period lead.
Now the shale gas production in the United States is growing, gas in this country costs only $ 110 believe every 1,000 mc experts, start that the United States could export gas in 2016, which means that gas prices in the European market is even even lower. The first gas export terminals in the U.S. and Canada in 2015, appear to have more connections opened in 2016-2017. Canada is exported 40bln cm of gas per year to South-East Asia and Japan.
In 2011, the proportion of independent gas suppliers on the Russian market increased by 25% by optimizing gas production and more aggressive marketing policy. In the meantime, grow Gazprom investment and operating costs, resulted in lower efficiency and reduced competitiveness which. "
The truth is that more gas means that Europe is not held hostage to a hostile Russia. Plus be a very bearish open for new gas pipelines to more fast-moving gas.
The AFP is oil increases by reporting that German Chancellor Angela Merkel, Israeli Prime Minister Benjamin Netanyahu asked not to order a military attack on Iranian nuclear facilities, the newspaper Haaretz on Friday. The article quotes an Israeli official on condition of anonymity, said Merkel urged Netanyahu 10 days ago amid a wave of reports of an imminent Israeli attack a "clear message about his opposition" to show such an action. Merkel called Netanyahu "to work more time for sanctions and diplomacy to give", and warned of the consequences of such an attack on the security in the Middle East.
Of course, such a warning might be speculation that Israel is ready to attack lead. This is the day after Bloomberg News reported that Iran could say the production of enriched uranium, the world powers eventually be used for nuclear weapons, and kept doubling enrichment capacity on a mountainside plant of the International Atomic Energy Agency. / Portfolio of medium-enriched uranium Iran grew by 31 percent to 189.4 kg (417.6 pounds) of 145 kg in May, the IAEA said today in a limited 11-page report. The Persian Gulf country was the production of 20 percent enriched material brought by a third in the three-month period to 25 May "The Agency is unable to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is for peaceful activities in the report.
IMF comments are always going to oil! IMF says Lipton Draghi was the right approach!
Ben Bernanke Channels The Dalai Lama
In a classic scene from the classic movie Caddyshack, Bill Murray character, Carl Spackler, tells a young caddy at the point of a pitchfork time he wore the Dalai Lama bag (big hitter, the Lama).
Carl noticed how badly he mood at the end of the round, the Dalai Lama was not tipping him. He said, "Hey, Lama, hey, how about something with a little, you know, for the effort, you know" According to Carl, the Dalai Lama replied, "Oh, uh, there is no money but if you die, on his deathbed, you will receive total consciousness. "forced Overlooking the Caddy afraid to hear the story, Carl quips," So I got that goin 'for me ... which is nice. "
If we are good memories this scene, we see a strong connection with the stock market, where we would assign the role of Carl and Ben Bernanke, whom to assign the role of the Dalai Lama.
In his speech in Jackson Hole today, Ben Bernanke actually said: "There is no tip for today will be, but on your deathbed, you will receive total consciousness."
In more specific market parlance, the restaurants by the speech that QE3 is no certainty, but if economic conditions justify the extra accommodation, the Fed stands ready to give you ... what the market thinks is beautiful.
All kidding aside, the long-awaited speech from Jackson Hole was primarily an academic exercise. The Fed chief focuses on the history of monetary policy since the end of 2007, pointing to the various studies are unconventional monetary policy actions of the Fed.
The conclusion was not absolute, that "... a balanced reading of the evidence supports the conclusion that the central bank buys securities have meaningful support economic recovery while mitigating deflationary risks."
The stock market has a knee-jerk sell-out as headlines from the speech hit the wires. The quick-strike interpretation of many was that the market was disappointed that there is no clear signal down that QE3 is the road. The same people had to explain to the rally, which was followed a few minutes later and brought the market to new highs for the day scrambling.
Read between the lines of underground action in an illiquid market is pointless note especially since we, too, that the last day of the month for a three-day weekend that Spain, a "bad bank" plan was announced, and that the ECB holds court next week.
What have we learned from the 2012 Jackson Hole speech was more of the same:
The Federal Reserve, under consideration of the respective costs and benefits of unconventional instruments employ these tools is as it feels the benefits outweigh the costs.
The obstacle to the use of non-traditional policy must be higher than the traditional policy given their uncertain costs.
There are limitations of monetary policy support, if it can not reach itself (said that the chairman that they do not agree on the fiscal and financial risks that the country faces what could be broad and balanced set of economic policy, because it can not ) neutralize economic outcomes.
With stable inflation expectations employment trends remain the most important guide for the Federal Reserve and how it assesses progress in meeting its dual mandate.
The Federal Reserve has confidence in his ability, an exit strategy from its unconventional monetary policy.
The Federal Reserve would fiscal policy makers to create like a credible plan in place, that the federal budget on a sustainable path in the medium and longer term runs to get, while for a sharp short-term fiscal contraction that bring the recovery in danger . avoid
Say the same thing over and over again gets the message, but that does not guarantee that the message is effective.
In 2009, was the message, the unconventional instruments were used effectively, because these tools were new and innovative. In 2012, the U.S. economy will grow less than 2.0%, the message is still the same unconventional instruments used may not have nearly the same effect.
Partially due to the fact that now the unconventional than conventional instruments. In this context, I talk of Jackson Hole recording a real impact in our opinion, for there was nothing on the market in mind as new and innovative. Some references to unconventional monetary policy turned the purchase of assets and communications. Been there, done that
As we discussed in our paper, "the irrelevance of QE3" monetary policy to maintain the status woe contribute sales growth, but it is not the catalyst for sustained economic growth above potential. The last three years have been successful and we are concerned, the market is just too much confidence in the monetary policy as a growth engine.
There is a growing risk that the stock market lost faith in the Federal Reserve and other central banks as market savior. This is a risk that should not go unnoticed as economies slow around the world slowly and both revenue and profit growth.
Something other operators should be aware that the September 12-13 FOMC meeting comes and goes without a QE3 announcement. To be sure, it is not a foregone conclusion that many experts had only a short time suggests. This is not to unravel the stock. Today's speech offered the least hint that the Fed will do more if needed. That may be enough to tease that a floor of support under the share prices will be during the period of consolidation.
Nobody knows for sure what the future will bring - not even the Dalai Lama. There are also some interesting days will rule in the near future with the ECB meeting (Sept. 6), Supreme Court of Germany on the constitutionality of the ESM (Sept. 12), the U.S. presidential election (Nov. 6), and the task dealing with the fiscal cliff (TBD).
In light of these unknowns and the weakening of earnings our tip is to remain defensive.
Disclosure: I have no positions in any mentioned shares, and no plans to initiate, positions within the next 72 hours. I wrote that article, and it expresses my own opinion. I get no compensation for it. I have no business relationship with a company whose shares are listed in this article.
Ben Bernanke is more political pressure than ever
On Friday, Federal Reserve Chairman Ben Bernanke will give a speech at an economic conference in Jackson Hole, Wyoming Investors will closely Bernanke remarks about signs that the Fed will do something to help the economy. Zachary A. Goldfarb reports:
Is arranged with his speech between national political conventions, there is more political pressure on Bernanke than ever.
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Republicans that he try it nothing to dispense pumps economic growth. Democrats, who demand a more cautious on the issue, that it tend to take further action.
The truth is, Bernanke has repeatedly said that the Fed is in a position to the direction of the economy is limited change control, and it is not clear, the benefits of new measures outweigh the potential costs.
Economists say that the new Fed measures likely. Only a small effect on employment Bernanke has no control over the two biggest factors that economic growth: How Congress and the President to respond to the government spending and taxation decisions, and how the European leaders on crises that can handle their continent.
Nevertheless, global investors looked at him - and not the two men addressing millions of people this week and next, as they campaign for president - is a sign of the U.S. government do something to keep the U.S. economy, and expansion of the global one healthy.
Some economists, however, buy doubt the Fed Chairman, any measure to more bonds The Associated Press reports signal:
Investors hope Chairman Ben Bernanke is at least hint Friday that the Federal Reserve ready to try for a new round of bond purchases to stimulate the long-term U.S. interest rates and more borrowing and spending to start.
He is not likely to deliver.
Economists who monitor the Fed's Bernanke will undoubtedly say something dramatic, speaking at an annual economic conference in Jackson Hole, Wyoming Many think a slightly better economic outlook, the urgency for the Fed to act is rapidly reduced.
"I do not expect him some important idea what to give the Fed the next train," says economist Tim Duy at the University of Oregon.
At the end of each year, in August, economists and central bankers met in the Rocky Mountains at a symposium of the Federal Reserve Bank of Kansas City organized. They present and discuss economic issues. But mostly, they are waiting to see what the Fed chief has to say.
Traders will mainly follow what the Federal Reserve chairman said Friday. At this time the dollar in narrow areas, the Associated Press reports listed:
Traders see if he will that take to the central bank additional measures to the U.S. economy is indicated to help.
Last week a few minutes appeared after the last monetary policy meeting of the Federal Reserve to indicate that leaned more help for the U.S. economy.
The euro fell to $ 1.2502 in afternoon trading from $ 1.2528 late Wednesday. The British pound fell to $ 1.5790 from $ 1.5836.
The dollar fell to 78.56 yen from 78.70 yen and 0.9603 Swiss francs from 0.9587 Swiss franc.