With the year quickly coming to a close, it may be time to begin rethinking some of the personal finance decisions you have made and figure out if it is still the proper course for you or not.

For example, is there a pesky credit card balance you have that you’ve only been paying the minimum amount on for the past several months? Miscellaneous expenses you know you could do without, yet spend money on anyway? Been paying too much interest on a loan or mortgage that you know you could most likely refinance? Did you buy a stock that you thought was going to fly high, and it hasn’t even gotten off the ground? Now is the time to ponder these thoughts and make action plans for 2010.

According to a post on New York Times’ Bucks blog, this could be a fantastic time to refinance your mortgage due to low interest rates that probably cannot go any lower. The story states the rate on a 30-year fixed mortgage with no points reached 5.01 this week, .96 percentage points lower than this time last year. The 15-year fixed mortgage rate dropped slightly to 4.46 percent this week, according to data released by Bankrate.com. The NYT post states these rates are close to the lowest levels since Bankrate.com began tracking them in 1985.

While I don’t have direct experience in holding — or paying off — a mortgage quite yet, I am always for lower interest rates. There are many other factors that you should consider before refinancing your loan, including your break-even point, how many years are left on your current mortgage, how stable you are in your job (and income), etc. Take this as a starting point, and if you believe that a refi is a good option, speak with a financial adviser and get the ball rolling. You’d be surprised at just how much money you could save.

If you’re in the room with a financial adviser and you happen to own some stocks and bonds, print out a copy of this piece from Wall Street Journal and ask some tough questions about where you should be putting your money in 2010.

There are a lot of changes going on with regard to our global financial system, which unfortunately will greatly affect how stocks, bonds, and other investment vehicles perform. It’s best to at least go through your current portfolio and ensure that it is balanced to your liking — and comfort level.

This is something I must do as well very soon, as in a couple of weeks I’ll make a yearly contribution to my Roth IRA and take a hard look at my inherited stock, as I’m growing increasingly uncomfortable with it all just being in that one stock. I’ll have to look at how it has performed, and what other options are out there with which I’m comfortable.

What are some of the things you will be revisiting and looking to change come 2010?

Islamic followers can be capitalists too. Although oil prices (currently around $77 per barrel) have fallen from the peak near $150 per barrel in 2008, oil rich nations have gotten creative in how they raise debt-like financing. Critical to fueling the speculative expansion in some oil rich areas has been the growth in sukuk bonds, which have been created as function of loophole exploitation in Islamic finance principles.

U.S. Does Not Have Monopoly on Debt Driven Greed

The pricked debt bubble that spanned the range of Icelandic banks to Donald Trump (read more)  has now spread to Dubai commercial real estate – evidenced by the plastering of recent global headlines. At the center of the storm is Dubai World, a quasi-government owned conglomerate of Dubai, which is in the process of negotiating a $26 billion debt restructuring with the government and sukuk bondholders. This overleveraged Dubai market ($80 billion in total debt) helped finance the tallest building in the world, largest man-made islands, and a ski-resort based in the desert, in the face of collapsing real estate prices. Critical to Dubai World’s debt restructuring is a $3.5 billion sukuk bond issued by its commercial real estate subsidiary Nakheel Development (“Nakheel”). So what exactly is a sukuk (plural of sakk)?

Investopedia lists the following definition for sukuk:

“An Islamic financial certificate, similar to a bond in Western finance, that complies with Sharia, Islamic religious law. Because the traditional Western interest paying bond structure is not permissible, the issuer of a sukuk sells an investor group the certificate, who then rents it back to the issuer for a predetermined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value.”

Sukuk “No-No”s

The generation of money on top of money – interest payments or what’s called “Riba” – is strictly forbidden by Shari’ah law. As a result, issuers must issue and repurchase sukuk at par (original value), not at a discount or a premium. Shari’ah law encompasses more than Islamic law, it also covers the amorphous spiritual and moral obligations demanded from the religious practitioners. In order to ensure compliance with Islamic principles, many financial institutions and funds typically have a Shari’ah Board monitoring the details of the sukuk. Shari’ah law is very consistent with the teachings in the Quran (the Western version of the Bible). Mixing finance and religion may seem strange on the surface, but I guess if we use world history as a proxy, we shouldn’t be surprised that money and Muhammad somehow find a way to coexist.

Click Here to View CNBC Interview on Sukuk Bonds

Sukuk Structure  & Market

The core Islamic finance principles underpinning the sukuk market have been around for more than 1,500 years, but the actual sukuk market was actually introduced in Malaysia around 1990. Since then, the market has been on an uptrend. What makes this $1 trillion Islamic debt market (HSBC estimate) even fuzzier is the scores of sukuk structures (See Ijara Sukuk chart below – very similar to a sale-leaseback arrangement), and the diverse geographic issuer/investor base. For example, greater than 60% of Nakheel’s investors are based outside the Middle East (a large portion in Malaysia). Making matters as clear as mud, each geographic region and structure has its own interpretation of legal rights and Shari’ah law. Layer on issues such as derivatives, bankruptcy rights, and penalty fees and you end up with only more complexity. What’s more, many of these sukuk bonds involve Special Purpose Vehicles (SPVs) – made famous by the off-balance sheet variety used by Enron Corp. – in order to get around the Islamic issuance loopholes.

Source: Moody's Investor Service

Sukuk Liquidity

The illiquidity of sukuk market hasn’t made resolving the Dubai debt restructuring any easier. The sukuk market doesn’t come close to matching the liquidity of traditional corporate and sovereign debt markets. Little trading is done in secondary markets because most investors in sukuk bonds follow a buy and hold strategy. The lion’s share of trading in this immature market gets completed through inter-institution, over-the-counter transactions. A recent $500 million sukuk deal issued by General Electric (GE) last month has only raised awareness for the financing structure (pre-Nakheel restructuring).  As oil rich states strive to diversify their economic bases, I would expect more deals to get done, in spite of the recent Dubai mess. How severe the recent Dubai sukuk black eye will be depends on how Nakheel, the United Arab Emirates (UAE), Abu Dhabi, bondholders, and other constituents restructure the pending sukuk obligations by the December 14^th deadline.

 The recent debt restructuring talks in Dubai highlight the complexity of this relatively new Islamic financing structure. With very few sukuk bankruptcy cases in existence, the structures remain largely untested and uncertain. How the Dubai debt debacle ultimately gets resolved will have a significant impact on this nascent, but rapidly growing market. Until the sukuk restructuring is settled, Dubai may just need to put the construction of that next man-made island on hold.

Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper. 

DISCLOSURE: Information and data from Moody’s Investor Service (Shari’ah and Sukuk: A Moody’s Primer 5/31/2006), CNBC interview 12/2/09, Financial Times 12/1/09, and other articles. Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at time of publishing had no direct positions in GE. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

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Today’s market-moving headlines, macro trade ideas and more…

• Dave Rosenberg 12/01/2009 How Can the Recession Be Over?
• Marc Faber: Dubai Was Just The Tip of The Sovereign Default Iceberg
• Deep down, even the fiercest equity bulls must be doubting themselves
• China Longyuan I.P.O. Attracts Billionaire Investor
• Gallup Economic Weekly: Thanksgiving Week Disappoints
• Dubai Panic Sparks Few Deals in Emerging-Market Bonds
• Cyber Monday: A lot of clicking and shopping
• JP MORGAN SAYS TO STAY IN THE RISK TRADE
• Russia Must Cut Rate 2 Points This Month, Gilman Says
• Beijing Gives Nod to Modified Rice

Beijing Gives Nod to Modified Rice

Posted: 02 Dec 2009 12:00 AM PST

China’s government declared two strains of genetically modified rice safe to produce and consume, taking a major step toward endorsing the use of biotechnology in the staple food crop of billions of people in Asia.

ETFDesk users see this as a potential opportunity to: buy Market Vectors–Agribusiness ETF (MOO);

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Dubai Debt Fallout Leaves Thousand of Indian Families Worried

The $59-billion debt woes of state-run Dubai World, one of the largest global conglomerates, has left thousands of Indian families worried, as the region accounts for half of the country’s $25-billion remittances.

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Gulf countries employ five million Indians, out of the 25 million total strength of the Indian diaspora in 130 countries, and Dubai being a key driver of the region’s economy, a shakeout there is seen unsettling the job market – and the incomes of relatives.

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Market experts have expressed that there will be at least 25-percent contraction in the job market and there may be a ripple effect on most Middle East countries because of Dubai World bust.

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They also said that Middle East meltdown is not a last month generated phenomena  rather it has been there for the past one year.

Infact, people have been coming back to India for the past one year.

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Market experts and policy makers have expressed concern over the prospect of Indians employed in the Gulf losing their jobs.

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However they insist that much would depend on Dubai world Bust’s impact on the real economy there and employment.

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Many relatives of Indian expatriates in the Gulf have expressed concern and worries over the prospect of the loss of jobs in Gulf  in the wake of Dubai World Fiasco !!

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Many of families have taken huge amount of home loans to construct houses or to buy flats.

(With the dependence of paying it through the remittances they generally receive from their relatives working in Gulf).

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Now, they have worries like if their close family member working in Gulf loses the job then it will get impossible to repay the loan amount in full.

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In Andhra Pradesh, which accounts for the largest share of remittances from the Gulf after Kerala, the realty industry feel there is an underlying worry that the Dubai World episode may just be the tip of the iceberg.

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Experts over there feel that things might go from bad to worse when the Dubai companies announce their financial results in December and January and many more could lose jobs.

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Analysts, nevertheless, maintained that while the future plans of Dubai World in India may be affected, the existing ones may not suffer much.

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Wheat sowing picks up pace across India

Wheat sowing picks up pace across India:

As per the latest government estimate, wheat has been sown in around 13.70 million hectares of land till last week, almost 5% more than the same period last year.

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Sowing in India ’s two main wheat growing province of Punjab and Haryana,which contribute almost 80% of the total country’s production is nearing end.

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Officials believe that  barring delayed harvest kharif crops, cooler temperature in most parts of northern, central and western India added with the recent unseasonal rains should provide an ideal climatic condition for good wheat sowing and early growth.

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The government expects an additional two million tonne of wheat production during the rabi season to offset some of the losses incurred during the kharif harvest.

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However, as per studies done by Indian Council of Agriculture Research, wheat yield can come down by almost 50 kilograms per hectare per day if it is sown very late (beyond December) in northern states.

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The output drop in southern wheat growing states and in Maharashtra and Karnataka is estimated to be around 36 kilograms per hectare per day if the crop is sown very late.

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In Other major Commodities Updates we can read about India’s FM statement on Inflation root cause and launching of in 12 commodities by MCX.

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Inflation due to food items shortage: FM

The current trend in inflation in India is a result of a shortage of food items and not due to a demand-push factor, Union finance minister Pranab Mukherjee told Parliament on Tuesday.

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The food articles index rose an annual 15.6% as at 14 November, up from the previous week’s 14.6% rise.

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The weakest monsoon since 1972 and then floods in parts of the country have hurt farm output and pushed up food prices.

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The finance minister said the government is keeping a close watch on futures trading in commodities.

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The Centre is planning massive investment to boost farm output, the minister said.

MCX launches EFP in 12 commodities:

The Multi-Commodity Exchange of India (MCX) has introduced the exchange of futures for physicals (EFP) transactions in 12 commodities from Tuesday, the bourse said in a release.

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This process will help traders who have already entered into an agreement for physical trade to take position on futures platform for transparent pricing mechanism.

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In EPF, if the quality of the commodity traded does not match MCX specifications, both parties can then decide on a premium or discount to the settlement price on the futures platform on the delivery date.

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I’ve noted a pattern in our local government investments.

CIB Conseco Fieldhouse, CIB Lucas Oil Stadium, Carmel Clay Parks Monon Center, Indianapolis Airport Authority Midfield Terminal, Carmel Regional Performing Arts Center and the CIB Convention Center Expansion seem to have the same issues.

They were built with public funds to meet public and private needs.  The bondholders are well secured by public revenue sources and commitments.  The operating revenues are less than what is required.  The users do not want to pay more.  Current political forces are criticizing historical decisions and current operations.  The public thinks that the politicians are incompetent and/or captured by special interests.  The public wants a simple solution that does not include more taxes.

The greatest problem is that these facilities inherently serve BOTH private and public purposes.  The CIB facilities serve customers, but also the nearby local businesses and our collective sense of importance in hosting the undefeated Colts.  The airport serves passengers, but also economic development.   The Monon Center offers an alternative health club, but also provides subsidized recreational programs.  The CRPAC offers ticketed cultural events, but also subsidizes local arts groups and stimulates the hospitality and retail arts industry.

In each case, the public is confused because it is not clear what part of the capital and operating costs are due to private and public uses.  It is not clear what part of the costs are being paid by the users and what is being picked up by the public through current and future taxes.

Political and civic leaders would be well served to clarify these “buckets” of costs, benefits and responsibilities in the future.  It is not easy to do and any well-defined fence will be inherently arbitrary and sub-optimal.  However, the political costs of an ostrich approach are now apparent.  I’m sure that many local leaders decided that this “direct” communications style would be impossible, because well-informed Hoosiers would choose to NOT invest in any ventures where each did not personally receive an ROI.   I point to the overwhelming success of the Wishard Hospital campaign as a counterexample.  I point to the recent consensus that requires schools and other local groups to seek voter approval as a situation of “what’s good for the goose is good for the gander”.

State leaders should review these investments and outline a state review process that meets the public needs.  There is an inherent bias towards overinvestment by civic and political leaders.  Many constituencies benefit greatly in the short-run from major projects.  The operating deficits are often a decade away.  The positive ego benefits of creating 50-300 year monuments is too attractive.

Future capital projects should be required to clearly explain public and private benefits, costs and funding sources.  The projects should protect taxpayers at a level equal to bondholders.  Contingency funds should be included to handle the typical 5 year business cycles.   Even with these constraints, our local leaders will be able to justify investments in viable projects.

Stocks climb as falling dollar boosts commodities – Yahoo! Finance.

Another Yahoo! article that sums up the day better than I can. 

Reports of the 3.7% rise in sales contracts for October have surfaced.  Driven by the 1^st-time homebuyer tax credit deadline (now extended) and lower sales prices, sales contracts reached a new record.  Another good sign, housing inventory dropped to a  7-month supply versus 10.2-month supply a year ago.  Some experts predict housing conditions will stabilize and home prices will firm up by mid-2010.

Auto sales are in a pickle.  In October 2009, the numbers were the same as 2008, when we were knee deep in the economic slide.  Now, the November numbers, though only a nose hair higher, are still parallel to Novemer 2008 numbers. 

Although, high gas mileage cars saw great increase, many other saw HORRID decline.  Unemployment is were the Automakers lay blame.

The 30 Year Treasury Bond closes right at 4.28%.  Mortgage rates to increase, and at a good clip too.  Expect roller coaster like changes well into Spring.

More news as it comes!

Article By Yahoo!

This article talks about reports released that show some steady economic growth.  Worth a read.

Modest but steady growth seen in economic reports – Yahoo! Finance.

• In other news, the Dollar’s weakness makes the Stock Market have a great day (so far).
• We will know Thursday of the outcome of “Black Friday” and the retailers success/failure in sales.  This will be a sign of things to come in Q4 2009. 
• Last year, retailers sales fell 7.8%, the worst decline since 2000.  Let’s hope, for the economy’s sake, that doesn’t happen this time.
• From the mortgage rates world, the 30 year treasury bond gave up the gains from yesterday.  As of now it sits at 4.24%

More news later!

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Today’s market-moving headlines, macro trade ideas and more…

• 5 REASONS TO EXPECT A NEAR-TERM SELL-OFF
• Dave Rosenberg 11/30/2009 KEEP AN EYE ON THE CREDIT MARKETS AGAIN
• Tail Risk in Sovereign CDS
• How overbuilt is China?
• Why Black Friday Data Points To A Grim Holiday Season
• Hussman: 80% Chance Of A Market Crash Over The Next Year
• Morgan Stanley fears UK sovereign debt crisis in 2010
• Morgan Stanley: Here Comes A Brutal 2010
• GCH Reports Earnings and Holdings as of November 30, 2009

Tail Risk in Sovereign CDS

Posted: 30 Nov 2009 04:32 AM PST

Will the tail wag the dog again? Or, more specifically, will the rise of sovereign credit default swaps drive pricing in government bond markets? The Dubai shock has highlighted disconnects between the two markets. The traditional flight-to-safety bid led U.S. Treasurys and U.K. gilts to rally sharply. But the nature of the shock – a reminder that governments have balance-sheet constraints – pushed up the cost of insuring even high-quality sovereigns against default. That suggests

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The facts about the imminent restructuring of Dubai World are gradually becoming clearer.  Over the past several days , we’ve learned:

1.  The amount of debt that Dubai World proposes to restructure is about US$26 billion, less than half what was originally thought.  The borrowings are centered around DW’s property subsidiary, Nakheel, and Nakheel’s international property development arm, Limitless World.  According to DW, its other activities are on sound financial footing.

2.  It appears that about half of DW’s overall obligations are to entities within Dubai.  It’s a reasonable working assumption that the same ratio would hold with the debt requiring restructuring.  If so, foreigners’ exposure would be $13 billion or so, plus whatever credit default risk they might have taken on through derivatives.

3.   The UAE central bank pledged support on Sunday for the federation’s banks through a new liquidity facility, again suggesting that a lot of the direct financial exposure is held internally.

4.  The actual restructuring has been underway since at least November 20th, when Dubai fired the head of its International Financial Center, as well as three members of the Investment Corporation of Dubai–including Sultan Ahmed bin Sulayem, the chairman of Dubai World.

5.  Yesterday, according to Bloomberg, Dubai’s finance minister, Abdulrahman al-Saleh, clarified the relationship between the government and DW.  He said in a TV interview that when DW was set up the government decided that DW’s debt should be secured by its investment projects, not a government guarantee.  Further, the government stated in a sukuk prospectus in October that it assumed no obligation to support strategic state-owned enterprises (like DW) financially, although it reserved the right to do so if it chose.

6.  Despite the government’s statements, it appears most investors thought that this was similar to what the US government said about Fannie Mae and Freddie Mac–that in the end, despite its protestations, the government would bail DW out.  Unlike the US case, this expectation has proved false.  It would be doubly interesting if, again unlike the case in the US, a corruption investigation follows.

So the DW debt problems are looking more and more like a tempest in a teapot.  Yes, there may be domestic repercussions and emerging markets debt investors may look more askance at countries like Greece, but further fallout appears unlikely.

To me, by no means an expert on sharia-compliant finance, one big surprise is that investors should have so unreflectively assumed that they would be bailed out by the Dubai government.

In a country like the US, where the banking paradigm accepts that the interest of creditors and equity holders are somewhat opposed–that the equity holder is allowed to financially leverage his returns in return for the debt holder being partially insulated from the full consequences of business failure, debt holders would not expect to be fully sheltered from the failure of the debtor’s business.  Under a banking paradigm like Dubai’s, however, that, in contrast, brings debt and equity holders together as common participants in the fruits of business success or failure, it’s hard to imagine how a bailout of debt holders could be, even in principle, justified.  Go figure.

Also see my original comment from November 29th.

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales:

Wheat rose to a one-week high on speculation that prospects for U.S. exports gained because the dollar declined this month and as demand increased from investors seeking a hedge against inflation.

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Wheat prices also got a boost from concern that some U.S. growers were unable to plant winter crops because unusually heavy rainfall delayed the soybean harvest and hindered access to the fields.

U.S. shipments have lagged behind the year-earlier pace because of rising world stockpiles and because competing suppliers offered grain at lower prices.

Wheat also gained as speculative investors including index- and hedge-fund managers bought commodity futures that they deem to be undervalued, including wheat.

In Other major Commodity Update, there is information about Soybean Prices rising on surging Chinese demand for U.S. Supplies.

Soybean Prices Rise on Surging Chinese Demand for U.S. Supplies:

Soybean prices rose to a five-month high on surging demand for animal feed and cooking oil made from oilseeds shipped by the U.S., the world’s biggest producer and exporter.

From Sept. 1 to Nov. 19, U.S. export sales of soybeans rose 58 percent to 27.1 million metric tons (995.4 million bushels) from a year earlier, and China accounted for 62 percent of the total, government data show.

A drought this year in Brazil and Argentina, the largest shippers of feed made from the oilseed, boosted consumption of U.S. supplies.

U.S. sales of soybean meal from Oct. 1 to Nov. 19 surged 72 percent to 4.7 million tons from a year earlier, Department of Agriculture figures show.

Shipments of soybean oil have tripled.

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I don’t have much else to report on the economy today, so here is an article from Yahoo! that recaps the rest of the day.  Enjoy!

Stocks rise as Dubai concerns ease, Guess up late – Yahoo! Finance.

Dubai : Well, well, well… What we are seeing unfolding in front of us, is absolutely the opposite of what we saw some years ago.

A small fever to the United States of America could potentially pull out the thermometers in different countries of the globe. For now though, it seems as if Dubai is the hot favorite to trigger such reactions. They sneeze and everyone else catches cold – It is fair in saying this only because of the reactions across the globe because of the decision of Dubai Government to hold off on their debt repayments until May 2010. Coming from a country that not too long ago, was the blue-eyed investment boy for investors, the world was probably not anticipating this.

What’s making news is the fact that Dubai has proposed to put off debt repayments, but what not a lot of people have seen the fact that the Government wishes to do something to make sure they can succeed commercially.

Banks seem to be doing their bit to put some soothing on the issue with them subscribing to bonds worth $5 Million.

Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates Airline and Group issued a statement clarifying that all decisions are being taken to ensure that the financial and the commercial well-being of Dubai World, the principal company of the Dubai Government.

Issuing an appeal to all its creditors who had lent their monies to the Dubai World, the Shaikh asked the creditors to hold on to all their repayments until May, 2010.

In the statement, Dubai World clarified that they have their businesses in good world and have a well-diversified portfolio that can take care of the restructuring needs.

Leading investment company, Moody’s believed that this time would give enough time to Dubai World to arrange things on their end. Moody’s also believes that after this time, Dubai World would be repaying the debts diligently.

Leading analysts believe that the world is heading East and though the markets in emerging economies are volatile for now, these markets on a high risk-reward principle.

The Government of Dubai has stepped on to the situation and of course, has quite a bit of stake in Dubai World. The Government feels that it is in a nice position to restructure the debts of Dubai World.

Shaikh Ahmad believes that the situation is dire and it is only the government’s intervention that can help Dubai World to come out of the current mess.

Impact

Experts believe that a negative trigger to Dubai can cause a tremendous dominoes effect to the economies of all other countries in the Gulf Region.

With all the negatives being given, one thing all the experts believe in is – Dubai will have to endure quite a bit of pain and that for some years at least. But, experts also believe in the fact that rewards would come through with time.

The effects of economic slowdown have been felt all over the world over the last some years, but Dubai for some reason has been relatively immune to all these shocks. In such a scenario, experts believe that any shock of the latest announcements will only be short-lived.

On its part, Dubai Government has launched the Dubai Mall and the Dubai Metro, two landmarks that adds to the lifestyle quotient of Dubai residents. The fact that these have come at potentially challenging times for the country’s economy is a bit of a surprise.

Shaikh Ahmad believes that the infrastructure and other fundamentals to the economy would actually still drive in investments to the country and sooner than later, all lapsing assets will ensure they have a good list of good buyers.

No ways, Dubai can bow down with this latest shock! It’s economy probably is too resilient to face a horrid time of this impact.

The Senior Vice President of Corporate Finance Group of Moody’s believes that the support of the Government probably is only for the stronger companies, whereas the less stronger companies could face a tough task on hand.

Difficult times

All the experts believe that the debt burden is huge, but the local banks are contributing their level best to alleviate the issue. Bonds worth $20 Billion have already been subscribed to, and with the banks pumping in an additional $5 Billion, things are only looking a bit positive for Dubai.

Some experts are of the thought that the banks would be able to absorb the debts of the country, if they are limited to Dubai World and Nakheel, with the latter being a construction giant in Dubai.

It is just fair in saying that the fortunes of a country could go on to hit those of another. We have just seen how fluctuations in Dubai could hit the fortunes of other countries in a big way.

Read more about this on the BankersAvenue Blog

Black Friday Turns Out to be “Red” Friday (compared to last year).

 This article from Yahoo! Finance shows that the busiest shopping day of the year may not have been so busy.  Here is an excerpt from the article:

The S&P Retail index (Chicago Options:^RLX – News) fell 1.3 percent after the National Retail Federation said that total Black Friday holiday spending was down from last year, suggesting that consumers were still reluctant to spend.

“So far, the numbers don’t look very strong,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.

“It will be hard to attract shoppers without discounting, which will hurt margins, and given all the stimulus that has been thrown at the economy, this is a disappointment.”

• In other news, the FED is trying to drain money from the economy using a tactic called Reverse Repo.   The method will involve so-called reverse repurchase agreements. That’s when the Fed sells securities from its portfolio with an agreement to buy them back later.
• The government is putting pressure on the Mortgage Industry for the “lackluster” attempt to modify mortgages for borrowers in crisis and facing foreclosure.  In an effort to shame the companies into doing a better job, Treasury will publish a list in December of the mortgage companies, also known as servicers, that are lagging.
• Bond prices are looking favorable for lower rates, as the 30 year treasury bond has hit 4.20, which is even lower than last months low of 4.23 (when interest rates were really low).

That’s it for now.  More as the news is revealed.

Because there's beauty around you everywhere...you just fail to notice it.

It’s funny that i love this picture so much, It’s taken in a place i considered the dullest place on earth..with no beauty whatsoever..!! having visited it once every year as a school trip for the past five years with nothing to do but to sit around in the sun and stare at funny couples who just want their privacy not a babble of school kids ogling and giggling at them..the very mention of this park made me groan !.

it’s hilarious that i learned to love this place only on my last trip there when i knew there was no coming back…. . I wanted to capture every corner of that park, want to remember every second, i didn’t want to let go of the feeling i had standing in the middle of that park with my camera and the sun in my eyes knowing that the bond i had with the park (yes, i really did hae one !) had broken, that the tradition of my yearly visit probably was over with my school life coming to an end. i could promise myself it wasn’t,  – that i still would visit, but i wouldn’t be fooling anyone, i don’t even know where in the world  i will be in  three months. so i just stood there and tried to remember every memory associated with it, the feeling i had at that moment standing in the sun with that particular smell that can only belong to one place and each place has one. that’s all we can really do sometimes – remember and try to never forget.

Is it true that taking things for granted is human nature ?. is it true that we never really appreciate what we’ve got until we’ve lost it ?.

I don’t know…but I’m starting to belive it more with every day that passes.

Hope All had a Great Thanksgiving, and a “SAFE” Black Friday (which only grew by 0.5% over 2008, which isn’t good).  Here are the indicators that will be released this week and where the numbers are expected to land.

Just so you know (not many people do), The Fed “Beige Book” is a summary of economic conditions from  the 12 Federal Reserve regional districts. The release takes place eight times a year about two weeks ahead of  the Federal Open Market Committee meetings. The report is used at the FOMC meetings, which tends to be one of the most influential events in the market.

I will keep a close eye on this and more throughout the day!

The Dubai World situation, as it stands now

On Wednesday, Dubai government-owned conglomerate Dubai World announced it intends to ask creditors to postpone maturities on Dubai World’s debt until at least May 30, 2010.  The heavily debt-laden company intends to use the time to restructure itself.

In the grand scheme of things, where the world financial crisis has already seen trillions of dollars of value erased from global banks’ balance sheets, Dubai World is not much more than a drop in the bucket.  No one seems to know exactly how much the company owes to others, but the largest estimates remain below $100 billion (though not by much).

Why creditors should be worried

There are several disturbing aspects to Dubai World for its creditors:

1.  The announcement comes after repeated assertions by Dubai that the situation was completely under control.  Recently, for example, the government has consistently responded to enquiries about a $3.5 billion sukuk of Dubai World property subsidiary Nakheel that matures in the middle of next month by saying that it would be paid in full when it came due.

2.  The announcement coincided with the start of Eid al-Ahda (a religious holiday commemorating Abraham’s willingness to sacrifice his son Isaac) and the beginning of the UAE national day celebrations, so that no further information will be available for several days.  Whether Dubai intended this or not, it employed a trick often used by poorly-managed, troubled companies, of announcing information just before a weekend or holiday, in order to avoid having to elaborate–and in hopes of “burying” the press story so that no one notices.

3.  Press reports suggest Dubai made the Wednesday announcement before consulting creditors.  If so, that would be most peculiar.  And no banks have come forward that I’m aware of to say everything’s basically ok.

4.   As other financial problems involving sharia-compliant debt over the past year or so have illustrated, there are no established conventions governing their status in restructuring or liquidation.

5.  Ambiguity also extends to bank lending in the Middle East, much of which appears to have been done on a “reputational” basis–that is, because of the borrower’s perceived status or wealth–rather than after careful study of pertinent financial documents.

6.  In addition, in cases of monarchy like Dubai, the line between public money and private money is sometimes blurred.

7.  It’s also unclear how much financial support the United Arab Emirates, the federation of which Dubai is a member, will provide for Dubai overall, and to Dubai World in particular.

What should be worrying the stock markets

Emerging markets contagion?–not so much, especially with oil prices above $70 a barrel.

Serious problems in developed stock markets?  Maybe if this were happening a year ago, but I think that markets will properly size the Dubai problem (i.e., understand it’s small) in short order.

Worries about banks with exposure to Dubai?  Maybe.  For HSBC and Standard Chartered, Dubai exposure appears to be small.  Could Dubai lead to general sukuk fears–and thus to the assumption that any bank with sukuk exposure is a risk?  Could happen, but if so I think this would present a buying opportunity.

Downward pressure on stocks?  Yes, but not for the reasons you might be thinking of.  Big investors in Dubai-related sukuks may find themselves in worsened financial straits if money is not repaid on time–as it appears now it won’t be.  They may have other obligations they can’t now meet without selling other holdings.

Monday’s trading will be more revealing about how much the market’s psyche has been damaged by the Dubai World announcement.  My guess is that it won’t be a particularly big deal–but then again, I’m a growth investor, that is, an inveterate optimist.

Thursday and Friday aren’t telling, since Wall Street was closed for Thanksgiving on Thursday and worked with reduced staffs for Friday’s abbreviated trading.  Even looking at Friday, though, the US market sold off initially, bounced back during the day and sold off again–as one would have expected–before the close.  Short-term traders understandably haven’t wanted to hold net long positions over the weekend.  However, selling didn’t approach the early-day lows, which is a positive sign, to me anyway.  I’d imagined that the market might breach them just before the close and the day at new lows.  That would imply heavier selling on Monday.

See also my update of December 1st.

Just a year after the global downturn  derailed  Dubai’s explosive growth, the  city is now  so  swamped  in  debt that  it’s  asking  for a  six-month  reprieve  on  paying  its bills.

Dubai Debt Fears Grip World Markets

This has cast a shadow on a world only just emerging from the worst economic crisis since the 1930s,  knocking markets  from Sydney to Sao Paulo and raising questions about Dubai’s reputation  as a magnet for international investment.

For India, which has tens of thousands of its citizens living  and working in the emirate,  the concerns are more direct:  thousands of its expats staring at job losses and  the economy, sharply reduced trade.

India, which gets nearly a quarter of the remittances from the United Arab Emirates and  has lakhs of laborers working in the region, could be worse off than most other nations  if the crisis escalates into a full-blown one  like the Russian or Argentinean crises of the past.

India’s exports to the UAE stood at $23.92 billion in FY09.

It is very likely that we may see one more leg of job losses in Dubai.

The only consolation for the region is that Abu Dhabi is booming.

Indian shares and the rupee fell in sync with other global markets where investors are fleeing for safety after Dubai debt trap concerns.

The Bombay Stock Exchange benchmark Sensex on Friday tumbled over 451.63 points to 16,403.30 points in the first ten minutes of trading on hectic selling by funds in line with weak global cues and concerns over Dubai’s debt.

Similarly, the wide-based National Stock Exchange index Nifty dropped by 140.50 points to 4865.05 points.

Brokers said the selling focus was more on banking and realty stocks after Dubai’s debt problems revived concerns about the global financial system and rattled markets across Europe and Asia.

Indian rupee fell 24 paisa to 46.55 against the dollar.  The MSCI Emerging Markets Index lost 1.4%.

Most European indices were about 2% lower after Asia tumbled.

The Shanghai Composite Index slumped 3.6%, its biggest drop since August, and Brazil’s Bovespa Index slipped 1.1%. U.S. markets were closed for the Thanksgiving holiday.

Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571.

“Dubai isn’t doing risk appetite any favours at all and the markets remain in a vulnerable state of mind,” said Market analysts.

“We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

Uncertainty over stocks leads to price volatility in turmeric futures:

In an unusual situation this week, far-term turmeric contracts were trading much below near-term ones, offering a big arbitrage opportunity for hedgers and speculators, on the National Commodity & Derivatives Exchange (NCDEX).

The price difference was 39 per cent.

Last year’s carryover stock is estimated to have declined steeply, at around 150,000 bags (a bag is 70 kg) as of today, as compared to around 700,000 bags around the same time last year.

Arrivals at the Erode market were 2,000 bags and sold at Rs 10,900-11,000 a quintal.

In Duggirala, prices were placed at Rs 9,800-10,500 a quintal and in Warangal at Rs 9,900-10,500 a quintal.

Turmeric exports climbed seven per cent to 4,000 tonnes in October 2009 from the same period last year.

Weak turmeric futures put downward pressure on spot markets, to send the product down by Rs 800 a quintal.

In Other major Commodities Updates also read Soybeans and Wheat Drop as Dubai Default Risk Dents Confidence of the Investors.

Soybeans, Corns and Wheat Drop as Dubai Default Risk Dents Confidence:

Soybeans, corn and wheat slumped after Dubai’s bid to reschedule debt sent equities tumbling and eroded investor confidence in commodities.

Soybeans for January delivery dropped as much as 2.7 percent to $10.2625 a bushel, the lowest level since Nov. 19, in electronic trading on the Chicago Board of Trade and were at $10.385 at of 10:50 a.m. Tokyo time.

The contract has lost 0.7 percent this week, the first such drop in three weeks.

Wheat for March delivery in Chicago lost as much as 2.4 percent to $5.5775 a bushel before trading at $5.595.

The grain dropped 3.7 percent this week, falling for the first time in four weeks.

Production may be around 21 million metric tons, down 2 percent from last harvest and lower than the 23 million tons forecast in October,2009.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Nov. 26 (Bloomberg) — European stocks fell the most in seven months and bonds jumped as Dubai’s attempt to reschedule its debt rattled investors seeking higher returns in emerging markets. The dollar slid to a 14-year low against the yen.

Europe’s Dow Jones Stoxx 600 Index retreated 3 percent at 3:29 p.m. in London. The Shanghai Composite Index slumped 3.6 percent, its biggest drop since August, and Brazil’s Bovespa Index slipped 2 percent. Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571 according to CMA DataVision. U.S. markets are closed today for the Thanksgiving holiday.

Causing problems for equity markets while the US is closed and limited trading on Friday. Might add some volatility.

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 1

In previous Blog, we had touched upon the aspect like what is seasonal pattern and reasons for studying seasonal variation.

Seasonal Index……“Time is Money”

Now we would see the analysis part of seasonal patterns in predicting the future prices of the commodity.

The Analysis

Crop prices tend to follow a general seasonal pattern of their own, identifying the major turning points in prices, setting their seasonal low at harvest followed by a post-harvest rally, where the supply of the crop is fixed and consumption gradually takes that supply, causing prices to rise.

However, major market shocks or powerful influencing factors like monsoon, production figures, stock levels & demand may significantly alter seasonal patterns & the prices may experience the special condition.

This is what happened with the Guar prices.

The ‘Guar’ legume plant is rain-fed monsoon crop.

Monsoon has been the decisive factor for the trend in guar futures.

The sowing period is July and August right after the first shower of the monsoon and the harvesting period is September and November.

Fresh arrivals of the crop from Haryana and Punjab begin immediately after the first week of September and continue till the month of December.

One example would be redeploying capital in Guar futures in two phases by taking selling positions from April as monsoon sets in – boosting the production levels, and buying in the month of June when the rally begins.

If we follow the price index & compare it with the actual, then it is seen that the prices have followed the path of the seasonal trend many times in this year & have given their best highs from month of June to August.

The seasonality shown in the below graphs depicts that the positive wave has given a satisfying return on investment in both of these commodities, & the strategy adopted of “Sell in April” makes this clear.

Guar Seed Seasonal Index vs Actual

Guar Seed Seasonal Index vs Actual

Again, the investors taking fresh buying positions from the end of June & holding till the end of the year have had always hard-earned profits.

Stay Tuned for more on this.

In next blog we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

 

Dubai Woes to Hit India Hard? "No" Says India's Think Tank

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Indian policy-makers are not really worried over the potential adverse impact on the country’s economy because of the multi-billion-dollar debt default risk faced by Dubai World, ranked among the largest conglomerates in the region.

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Commerce Minister Anand Sharma said “India is a very large economy. It is a resilient economy”.

“I don’t think some development in real estate in Dubai will have an impact on the Indian economy” he added.

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He also said “As far as India is concerned, the housing, real estate sector and construction industry are all doing well.

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This is confirmed by the increasing demand for construction materials, cement and steel,”

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Finance Secretary Ashok Chawla also saw little impact of the Dubai World’s woes on the country’s economy.

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Though he was a trifle more circumspect and preferred to watch the situation before hazarding a guess.

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“We will have to study what the issue is, what is the problem, what will be the possible implication if any for the Indian economy, the people and corporates,” Chawla told.

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Asked if the crisis will impact money flows into India,since the Gulf region accounts for over half the total inward remittances worth over $25 billion annually from expatriate Indians,

Chawla said: “It’s unlikely.”

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The state-run Dubai World stunned the global financial world Thursday when it announced it would need to restructure its debt, estimated at $59 billion, to preempt default and asked creditors for a six-month deferment.

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The conglomerate, which has a host of companies under its fold, has interests in a wide range of businesses such as realty, infrastructure, logistics and economic zones.

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And that is not just in the region but across a clutch of countries including India.

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Indian equities reacted adversely to the development, with the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) down as much as 634.16 points, or 3.76 percent, midway into the trading session Friday.

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It later recovered and closed with a loss of some 220 points, or 1.3 percent over the previous close.

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“Indian markets have rallied more than 100 percent from the lows a year ago,mostly backed by news of recovery and not necessarily on fundamentals,”

said Jagannadham Thunuguntla of brokerage firm SMC Capital.

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“This is why such news will have a negative impact on our markets and we will be dragged down,” Thunuguntla, who heads the equities division of SMC Capital told.

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Even some Gulf-based companies, like Emmar, which have business interests in India, said there will be virtually no impact on their ongoing projects in India.

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The response was similar from India’s leading engineering and construction major Larsen and Toubro Ltd, which said its exposure in Dubai was around $20-$25 million.

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