Where to go for growth and avoid pitfalls in 2013

Investors looking for clear ideas on where to invest in 2013 and beyond should keep in mind three important themes: that quantitative easing (QE), dubbed the greatest financial experiment in history, is ongoing and its results are not yet known; that income has become very expensive to extract from many assets, particularly bonds; and that some stockmarkets, especially China, have become historically cheap.

We will also need to keep an eye on the actions of politicians and policymakers this year. The global economic background remains challenging: experimental (or perhaps increasingly desperate) measures - from Washington and Tokyo to Brussels and London - will continue to be used to get credit flowing again, kick-start anaemic economic growth and shore up the eurozone.

Will inflation be benign or damagingly high? Will interest rate expectations start to rise in 2013? Can we look forward to normal, higher levels of economic growth or more years of austerity-driven weakness? Is the global financial system on firmer foundations or are the tough decisions still being kicked down the road?

We cannot be sure what effect all of the unconventional, experimental measures that are being adopted will have, but it's safe to assume that we won't know all the answers in 2013.

Money Observer's Wealth Creation Guide should not, therefore, simply be viewed as a compendium of tips for 2013 alone, but as an analysis of the current and potential future state of financial affairs and how you might want to factor some of the resulting investment ideas and themes into your own wealth creation, or preservation, strategy.

Certainly the most compelling theme for me is just how expensive income has become. Put another way, investors are not being adequately rewarded for the risks they are taking by investing in particular asset classes, chiefly bonds. The chart below shows the 20-year range of yields on various assets, with the yellow dots indicating where, worryingly for bond investors, they are now.

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Second pond search turns up body near where Arvada man went missing

Font ResizeLocal NewsBy Jessica Fender
The Denver Postdenverpost.comPosted: 12/17/2012 07:35:00 PM MSTDecember 18, 2012 2:35 AM GMTUpdated: 12/17/2012 07:35:01 PM MST

A second search of the pond near the Westminster hotel where a 36-year-old construction worker went missing revealed a body in the water on Monday, said Westminster police investigator Cheri Spottke.

Crews are still working to recover the body from the icy water and have not yet identified the remains.

John Lucas Edwards went missing early Dec. 9 following a Christmas party at the Westin Hotel at 10600 Westminster Blvd.

A Westminster Fire Department crew initially conducted a sonar search of City Park Pond and was satisfied that Edwards' body was not there.

"But there was some ice on the water," said Spottke, noting the weather had warmed a bit in the meantime. "With the storm coming in, if we were going to send divers in, it had to be today."

The second search uncovered a body.

Edwards rented a room for his company's Dec. 8 holiday party. He was last seen around 3 a.m. Dec. 9, and witnesses said he appeared intoxicated.

He never made it to his Arvada home, and both his truck and belongings were discovered at the Westin after a missing persons report was filed.

City Park Pond, about a quarter mile from the hotel, is 18 feet deep and reached temperatures as low as 36 degrees.

Authorities at the time of Edwards' disappearance said they had no reason to suspect foul play.

Spottke said that until the body is recovered and identified, officials won't be able to determine cause of death.

"We've been working ever since he went missing," Spottke said.

Jessica Fender: 303-954-1244 , jfender

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Bridal Guide: how to decide where to spend the holiday

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Crude Production Rise: Credit Where Credit’s Due

Last week the Energy Information Administration (EIA) told us that U.S. crude oil production in the first quarter of the year topped 6 million barrels per day (bbl/d) for the first time in 14 years. EIA’s chart:

EIA’s analysis:

“Strong growth in U.S. crude oil production since the fourth quarter of 2011 is due mainly to higher output from North Dakota, Texas, and federal leases in the Gulf of Mexico. … After remaining steady between 5.5 million and 5.6 million bbl/d during each of the first three quarters of 2011, EIA estimates that U.S. average quarterly oil production grew to over 5.9 million bbl/d during the fourth quarter and then surpassed 6 million bbl/d during the first quarter of 2012.”

Certainly, great news like that will restart discussion of who deserves credit for such a production milestone – beyond, of course, the energy companies that are actually pulling the oil from the ground or the seafloor. Politico Pro [subscription required] reports White House spokesman Clark Stevens emailed in the administration’s claim for credit:

“Despite misleading rhetoric by some in Washington, President Obama has made expanding responsible oil and gas production here at home a clear priority and the facts speak for themselves. Since the president took office, domestic oil and gas production has increased each year, with oil production in the first quarter of 2012 higher than any time in 14 years and natural gas production at its highest level ever, and that is certainly thanks in part to steps taken by this administration.”

That’s one view. Others disagree. Politico quotes Tom Kloza, chief oil analyst at the Oil Price Information Service:

“In the end, the president and Congress can’t take credit for what price and technology have delivered. It would be akin to taking credit for the iPad. … Unless there is a price collapse, or a true scientific indictment of fracking, one can expect to see plentiful growth in light sweet crude coming from the Rockies, North Dakota, and even Ohio or West Virginia.”

And Richard Newell, the EIA’s head from 2009-2011:

“In a political year, different parties would like to take credit for positive news in the energy sector and I think here the credit largely goes to technology."

And also Amy Myers Jaffe, an energy fellow at Rice University, who notes that North Dakota and Texas shale production has occurred mainly on private land, while increases from the Gulf result from the actions of previous administrations:

“Production rises from Gulf of Mexico would have been in the hopper way before President Obama took office.”

Settling the argument isn’t as important as recognizing that with the right policies the oil and natural gas industry can further develop America’s energy wealth. With the right strategies and leadership, the United States could see 100 percent of its liquid fuel needs met from North American sources. And along with it: jobs and tax revenues for government.

Strategies, policies and action: It’s what separates election-year rhetoric from substantive progress toward a more secure energy future.

View the original article here

Crude Production Rise: Credit Where Credit’s Due

Last week the Energy Information Administration (EIA) told us that U.S. crude oil production in the first quarter of the year topped 6 million barrels per day (bbl/d) for the first time in 14 years. EIA’s chart:

EIA’s analysis:

“Strong growth in U.S. crude oil production since the fourth quarter of 2011 is due mainly to higher output from North Dakota, Texas, and federal leases in the Gulf of Mexico. … After remaining steady between 5.5 million and 5.6 million bbl/d during each of the first three quarters of 2011, EIA estimates that U.S. average quarterly oil production grew to over 5.9 million bbl/d during the fourth quarter and then surpassed 6 million bbl/d during the first quarter of 2012.”

Certainly, great news like that will restart discussion of who deserves credit for such a production milestone – beyond, of course, the energy companies that are actually pulling the oil from the ground or the seafloor. Politico Pro [subscription required] reports White House spokesman Clark Stevens emailed in the administration’s claim for credit:

“Despite misleading rhetoric by some in Washington, President Obama has made expanding responsible oil and gas production here at home a clear priority and the facts speak for themselves. Since the president took office, domestic oil and gas production has increased each year, with oil production in the first quarter of 2012 higher than any time in 14 years and natural gas production at its highest level ever, and that is certainly thanks in part to steps taken by this administration.”

That’s one view. Others disagree. Politico quotes Tom Kloza, chief oil analyst at the Oil Price Information Service:

“In the end, the president and Congress can’t take credit for what price and technology have delivered. It would be akin to taking credit for the iPad. … Unless there is a price collapse, or a true scientific indictment of fracking, one can expect to see plentiful growth in light sweet crude coming from the Rockies, North Dakota, and even Ohio or West Virginia.”

And Richard Newell, the EIA’s head from 2009-2011:

“In a political year, different parties would like to take credit for positive news in the energy sector and I think here the credit largely goes to technology."

And also Amy Myers Jaffe, an energy fellow at Rice University, who notes that North Dakota and Texas shale production has occurred mainly on private land, while increases from the Gulf result from the actions of previous administrations:

“Production rises from Gulf of Mexico would have been in the hopper way before President Obama took office.”

Settling the argument isn’t as important as recognizing that with the right policies the oil and natural gas industry can further develop America’s energy wealth. With the right strategies and leadership, the United States could see 100 percent of its liquid fuel needs met from North American sources. And along with it: jobs and tax revenues for government.

Strategies, policies and action: It’s what separates election-year rhetoric from substantive progress toward a more secure energy future.

View the original article here