By RealtyTrac Staff
Jan. 29, 2008

U.S. FORECLOSURE ACTIVITY INCREASES 75 PERCENT IN 2007

IRVINE, Calif. – RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released year-end data from its 2007 U.S. Foreclosure Market Report, which shows a total of 2,203,295 foreclosure filings — default notices, auction sale notices and bank repossessions were reported on 1,285,873 properties nationwide during the year, up 75 percent from 2006. The report also shows that more than 1 percent of all U.S. households were in some stage of foreclosure during the year, up from 0.58 percent in 2006.

A total of 215,749 foreclosure filings were reported in December, up 97 percent from December 2006 and bringing the fourth-quarter total to 642,150 filings on 527,740 properties — up 1 percent from the previous quarter and up 86 percent from the fourth quarter of 2006.

“The year ended with a monthly increase of 7 percent in December, making it the fifth straight month with more than 200,000 foreclosure filings reported and giving the fourth quarter the highest quarterly total we’ve seen since we began issuing our report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “It also pushed the foreclosure filing total for 2007 well over 2 million. And while filings were up 75 percent, the number of properties in some stage of foreclosure was up 79 percent, indicating that some properties may have just entered the initial stage of foreclosure in 2007 and could be going through the rest of the foreclosure process in 2008 — unless lender and government intervention efforts begin to gain more traction.”

Top annual foreclosure rates
Nevada posted the nation’s highest state foreclosure rate for 2007, with 3.4 percent of its households entering some stage of foreclosure during the year — more than three times the national average. The state documented the highest monthly foreclosure rate in all 12 months of the year. A total of 66,316 foreclosure filings on 34,417 properties were reported in Nevada in 2007, an increase of more than 200 percent in total filings from 2006.

With more than 2 percent of its households entering some stage of foreclosure during the year, Florida documented the second highest state foreclosure rate for 2007. A total of 279,325 foreclosure filings on 165,291 properties were reported in the state during the year, more than twice the number of filings reported in 2006. The state’s foreclosure filing total in December was up 275 percent from December 2006, and its fourth quarter total was up 211 percent from the fourth quarter of 2006.

Michigan documented the nation’s third highest state foreclosure for 2007, with 1.9 percent of its households entering some stage of foreclosure during the year. A total of 136,205 foreclosure filings on 87,210 properties were reported in the state during the year, a 68 percent increase in total filings from 2006. Michigan foreclosure activity dipped 17 percent from the third quarter to the fourth quarter, but its December foreclosure filing total was still up more than 70 percent from December 2006.

California, Colorado, Ohio, Georgia, Arizona, Illinois and Indiana all posted foreclosure rates among the nation’s top 10 in 2007, and all these states documented more than 1 percent of their households entering some stage of foreclosure during the year.

Highest foreclosure filing totals
With a total of 481,392 foreclosure filings on 249,513 properties during the year, California documented the highest number of foreclosure filings and the most properties in some stage of foreclosure in 2007. The state’s total foreclosure filings more than tripled from 2006, and the state’s 2007 foreclosure rate — 1.9 percent of its households entering some stage of foreclosure during the year — ranked fourth highest among the states. California foreclosure filings were down 3 percent from the third quarter to the fourth quarter despite a 33 percent spike in December, but total foreclosure filings in the fourth quarter were still nearly three times the number reported in the fourth quarter of 2006.

Florida tallied the second highest totals, both in terms of foreclosure filings and properties entering some stage of foreclosure in 2007. (See above for more details on Florida.)

Ohio’s total foreclosure filings, 153,196, and total properties entering some stage of foreclosure, 89,979, both ranked third highest among the states for 2007. The state’s foreclosure filings increased 88 percent from 2006, and its 2007 foreclosure rate was the nation’s sixth highest, with 1.8 percent of the state’s households entering some stage of foreclosure during the year. Ohio’s high ranking for the year came despite a dip in foreclosure activity in the fourth quarter, when foreclosure filings decreased 2 percent from the previous quarter. The state’s December foreclosure filings were down 26 percent from the previous month but still up 64 percent from December 2006.

Other states with foreclosure filing totals among the top 10 were Texas, Michigan, Georgia, Illinois, Colorado, Arizona and Nevada.

Report methodology
The RealtyTrac 2007 Year-End U.S. Foreclosure Market Report provides the total number of foreclosure filings nationwide and by state, along with the total number of unique addresses entering some stage of foreclosure and percentage of total households entering some stage of foreclosure (foreclosure rate). Data is also available at the individual county level.

The household numbers are based on the U.S. Census Bureau’s 2005 estimates of total housing units. Foreclosure filings include foreclosure-related documents in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank).

http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=3988&accnt=64847

You have worked hard. Now Its time to work smart. Learn to Diversify Your Income.

You have worked hard. Now Its time to work smart. Learn to Diversify Your Income.

Posted by Dan Denning on Feb 4th, 2008

Somewhere, Vladimir Putin is chuckling…

First the facts. Just days before BHP Billiton’s (ASX: BHP) London deadline to make a formal offer for Rio Tinto (ASX: RIO), the Aluminium Corporation of China (Chinalco) swept in from the left flank to seize 12% of Rio’s U.K. listing. The $15.5 billion raid included an American wingman. Alcoa (NYSE: AA) is a junior partner in the deal, which gives Chinalco a 9% stake in Rio’s dual-listed corporate structure.

What just happened?

The short answer is that China did what South Africa did not: it anticipated future demand and secured ownership of a strategic natural resource. More on South Africa in a moment. But for China, Chinalco’s move gives it a seat at Rio’s table, and thus, a voice in the on-going negotiations between Australia’s two biggest mining stocks about their collective future.

Not a bad weekend if you’re the China Development Bank, one of Chinalco’s financiers. And not a bad weekend if you’re a strategic policy maker in China. The move does not kill the prospect of an OPEC of iron ore-united Pilbara operations under the BHP banner. But it will force BHP to increase its offer for Rio, or recognize that it’s been outflanked by a strategic customer.

Chinalco’s bid valued Rio at four times a BHP share. BHP’s initial offer was a 3-1 swap with Rio shareholders. In the past, these disagreements over the appropriate valuation of mining assets were resolved with cash. Is BHP all in or not? More on strategic business units and Vlad Putin below.

Did you see that power-station coal prices in Newcastle were up 25% last week and 75% in 2007? We wrote about the trifecta of causes in the February issue of Diggers and Drillers. Iron ore gets all the buzz for the projected 70% rise in the contract price between Aussie producers (and Vale) and Chinese steel makers. But coal is in a nice little bull market of its own.

Part of the action in coal is explained on the supply side. South Africa is in the midst of a power crisis. Demand for electricity has grown faster than installed capacity. Now, the company’s only power company (Eskom) can’t keep up. The government has slapped restrictions on coal exports and imposed rations on electricity for industrial users.

Gold and platinum prices are getting a nice kick as a result, with South African production down for the last two weeks. Is this just a temporary problem, though? Maybe not. South Africa is providing the world with a perfect case study for what happens when energy demand remains high but supply meets the brick wall of physical scarcity.

In the grip of a ferocious winter, China isn’t exporting any coal either. With some of Queensland’s big coal mines flooded, the supply of seaborne coal in the global market has suddenly been choked off. There isn’t much margin for supply error in a world that runs on energy. The scary thing to keep your eye on is how long civil order is maintained when the lights go out in Capetown. Or when the lights go out in Beijing.

Why did we say Vladimir Putin is probably chuckling somewhere this weekend? In 1997 Putin received his Ph.D. from the St. Petersburg Mining Institute for a thesis titled, “The Strategic Planning of Regional Resources Under the Formation of Market Relations.”

It sounds like something out of a 5-year communist party plan, doesn’t it? Well, there is some evidence that Putin’s thesis wasn’t even written by him, and that a good portion was copied from a 1978 book called “Strategic Planning and Policy,” Professors William King and David Cleland of the University of Pittsburgh.

We happen to have a copy of that tome right here on our desk at the Old Hat Factory. It should not be described as a page turner. But thumbing through it this morning, we did come across a term that might put Chinalco’s move on Rio in the kind of light Vladimir Putin sees it: a strategic business unit (SBU).

That is, the trend among the world’s nation states is to view resources as assets too important to be simply signed over to private ownership for the purposes of individual wealth creation. Instead, resources are strategic national assets (when you have them), and strategic liabilities (when you do not have them).

China’s economy is built on industrial production. That production requires raw material inputs, many of them from Australia. “China now represents more than 45 per cent of global seaborne iron ore demand, 22 per cent of copper, 25 per cent of aluminium, and 17 per cent of nickel demand. Its demand for these has more than doubled in the last five years,” according to the Chanticleer column in today’s Australian Financial Review.

In this context, “Rio is no longer a merger candidate; it’s the centrepiece of an auction for some of the world’s most desirable mining properties.” It is, in academic terms, a strategic business unit. The question now is who values it more as a strategic business unit: China or BHP?

That auction is being conducted in public equity markets. But it includes corporations owned by foreign governments, as well as publicly listed corporations and individual punters like yourself. How it all works out will be interesting to want. Ownership of Australia’s resource wealth is what’s at stake.

But more importantly, who’s going to profit the most from Australia’s increasingly co-depending mining relationship with China? Aussie shareholders and investors? Or foreign owners using public markets to secure strategic resources? Hmmn. While you think about that, let us remind you that while the top of the resource heap is providing a lot of drama, there is a lot of business opportunity and earnings growth to be had just beneath the surface. That’s the really good news this week.

And let’s not forget the currency markets, which directly affect commodity prices and thus earnings forecasts for Aussie resource producers. All these resources are priced in U.S. dollars. The dollar finds itself in the unfamiliar position of enjoying a little technical support against its cousin-in-paper-fraud, the euro. Our currency and technical analyst Gabriel Andre reports:

“The last trading sessions of last week confirmed that investors were not ready yet to oversell the US Dollar. Indeed, despite the fall on last Friday’s Asian session at 1.4952 against the Euro, the Greenback gained around 1% during European and US trading. It is now currently trading around 1.48.

EURUSD 6 Month Daily

“We were saying a few weeks ago that 1.50 was a strong psychological level for the EUR/USD. It still appears that investors are hesitant to push the US Dollar over this precipice. Of course the interest rate differential between the dollar and everything else has widened with the Fed’s two recent rate cuts. However, these rate cuts were more than expected by the market players, and consequently already priced in the currency markets.

“This is the third time the EUR/USD attempted and failed to reach and break the 1.50 level. So what does the chart show?

“The record low of last November of 1.4968 and last Friday’s low of 1.4952 are now drawing a double-top (points A and B) pattern. With the double-bottom formed by the highs of December and January (points C and D), we have now the medium-term trading channel of the US dollar against the Euro. The currency pair will stay rangy as long as it remains in this channel, any break of one of those two lines (resistance through the points A and B, support through the points C and D) would accelerate strongly the move.

Meanwhile, we expect precious metals to appreciate against all paper currencies for most of this year. But you knew that already. With a growing yield differential and soaring coal and iron ore prices, the Aussie will get even stronger against the greenback this year. You still have time to plan that ski trip to Aspen. Hurry. February is the best month for Colorado’s champagne powder.

Dan Denning
The Daily Reckoning Australia

http://www.dailyreckoning.com.au/china-bhp-rio/2008/02/04/

You have worked hard. Now Its time to work smart. Learn to Diversify Your Income.

Commentary: There are plenty of factors aligned to drive prices up
By Sean Brodrick, Money and Markets
Last update: 12:01 a.m. EST Feb. 4, 2008

JUPITER, Fla. (MarketWatch) — Gold has enjoyed a great run over the past few years, but it hasn’t been a straight path.

There have been enough dips and outright plunges to make gold traders feel like they’re riding the devil’s own roller coaster. But one strategy has worked time and time again: Buy the dips.

It takes courage to buy when everyone else is selling. But if you do your research, you can act with confidence that even if gold dips lower than you’re buying it, the upside potential is huge.

My preliminary price objective for gold is $1,065 per ounce, and it could go a lot higher than that. Let’s look at some forces driving precious metals higher.

Global gold production fell to a 10-year low of 2,444 metric tonnes in 2007, according to Gold Fields Mineral Service. This year, production will likely drop again. While China is producing more gold — up 12% — South Africa’s output is falling off a cliff, down 8.1%.

Gold miners are exploring frantically, but the mother lodes are getting harder to find. This should drive consolidation in the industry going forward as the big companies gobble up the smaller fish to replace their reserves.

The most active gold ETF, the streetTracks Gold Shares (GLD:
streetTRACKS Gold Shares ETF, held 630 tons of gold at the end of January — more than the European Central Bank or China’s central bank. What’s more, a new gold ETF in India is planned for this year.

Global demand for gold is exploding. Especially in places like China, where the first gold futures contract launched on January 9th. But also in the Middle East, where petrodollars are pouring into gold, and the gold trade in Dubai is accelerating.

The U.S. dollar is sliding

Since hitting a low in 2001, the Euro has nearly doubled against the dollar, but gold has more than tripled. The dollar and gold are on what I like to call “the see-saw of pain” — as one goes up, the other generally goes down.

The Federal Reserve’s actions are bullish for gold

In January, the Fed slashed its benchmark interest rate to 3%. It’s the most aggressive rate-cutting since 1990, and I think Fed Chairman Ben Bernanke will keep cutting until rates are at 2.5%. Why? Because the Fed is worried that the U.S. is sliding into recession. Indicators include the worst January for retailers since 1996, plunging consumer confidence, and S&P 500 earnings expected to tumble for the second quarter in a row.

Looking ahead, one million adjustable mortgage resets will start hitting with a vengeance in April. The Fed will likely want rates as low as possible when that happens.

Lower interest rates weigh on the U.S. dollar, because international funds will flow to currencies with higher interest rates. So, cutting the benchmark interest rate is generally inflationary and bullish for gold. Adjusted for inflation, gold would have to hit $2,200 to hit its high from the early 1980s. Even if we get just halfway there this year, it could be one heck of a ride.

Ways to play the coming surge

If you think the U.S. is dragging its trading partners into a global recession, you’ll probably want to own bullion, because the Fed and other central banks will pull out all the stops to reflate the economy, especially in an election year.

We’re already seeing inflation. Last year, consumer prices rose 4.1%, the most since 1990. And despite some tough talk from Bernanke, I don’t think the Fed gives a rat’s patoot about inflation. It will risk that to avoid a deep recession.

A general inflationary trend should keep gold prices moving higher even if market malaise drags gold mining stocks lower. I think the easiest way to own gold is through one of the gold exchange-traded funds like the streetTRACKS Gold Trust. You don’t have to store the bars or carry them back and forth to your local gold dealer.

On the other hand, if you think the Fed can stave off a recession and/or you think the global economy will chug along nicely even if the U.S. slides into recession, then gold miner shares could rally hard.

http://www.marketwatch.com/news/story/coming-gold-surge/story.aspx?guid=%7BBB3FA1DA-71CE-4F30-95DF-45B887AEA9C8%7D

You have worked hard. Now Its time to work smart. Learn to Diversify Your Income.

* Reuters
* Wednesday January 30 2008

By Mica Rosenberg
MEXICO CITY, Jan 30 (Reuters) - Chinese miners eager to feed a roaring economy with raw materials are buying some of the last remaining big mines in Latin America, where risks are lower than China’s other commodities sources like Africa.

Still, there are pitfalls ahead. The choicest known mining resources in the region have already been snapped up, while labor unions are independent and quick to strike for a greater share of the boom in commodity prices.

The Chinese are scouring the globe for the few remaining mineral deposits since they produce less than half the iron and copper and less than 70 percent of the alumina needed to build huge infrastructure projects from highways to power grids to airports.

Earlier this month, China’s largest nickel producer, Jinchuan Group Ltd, bought Mexico’s biggest untapped copper-zinc deposit from Canadian company Tyler Resources Inc , the latest in a spate of acquisitions across the region.

China has invested billions of dollars in Africa in recent years but civil war, coups d’etat, lack of infrastructure and disease hinder mining companies there.

Latin America, by contrast, has a long mining history and a well-developed regulatory framework to deal with foreign companies, making it a “natural hunting ground” for Chinese investors, said mining analyst Charles Kernot from investment bank Seymour Pierce.

“Latin America is very attractive given the geological potential and the ability to transport straight across the Pacific Ocean,” said Kernot.

“The logistics are easier than trying to get stuff out of central Africa,” he said.
Chinese state-owned companies can open new mines at up to 50 percent less cost than Western companies, importing everything from Chinese-made vehicles to lower-paid, highly experienced engineers, giving them an advantage in these emerging markets.

Beijing’s foreign reserves of $1.3 trillion give state-owned companies a massive war chest, allowing them to buy up companies as they gain experience in the sector and graduate from earlier joint ventures.

FEW RESOURCES LEFT

But with dwindling mineral resources around the world, China has already bought some of the biggest remaining targets in Latin America this past year.

In December, China’s Minmetals and Jiangxi Copper acquired Canadian miner Northern Peru Copper Corp for about $450 million, the third time last year that Chinese miners bought assets in Peru.

Aluminum Corp of China (Chalco) <2600.HK> agreed in June to pay $790 million for Peru Copper, owner of the Toromocho property, which could be one of the country’s largest copper mines by 2011 or 2012.

“These are the types of projects where if the Chinese put in the infrastructure they are going to reap the rewards for some time,” said Vaughan Wickins, an analyst at Standard Bank in London.

“With their demand requirements there is no point in them going out and securing a couple 100,000 tonne copper operations, they need some big resources,” said Wickins, whose bank has advised Chinese companies interested in buying Latin American assets.
The Jinchuan Group is currently in talks with Petaquilla Minerals about its project in Panama, one of the largest undeveloped copper properties in the world, said a Petaquilla spokesman.

Tyler’s Bahuerachi project in northern Mexico has an estimated resource of over 500 million tonnes of metal and will cost about $600 million to develop, said the company’s chief executive, Jean Pierre Jutras.

“I think what Jinchuan saw in Mexico made them very optimistic … that the climate in Mexico may be very favorable for expanded activities,” said Jutras.
But investing in Latin America, while not as risky as Africa, could potentially be complicated for Chinese companies.

Mining projects in the region have been plagued by labor disputes and environmental complaints from local communities.

“The last thing the local population would want would be boatloads of Chinese workers coming over to operate mines,” said Kernot.

“If you are going to use a local work force you will have to be subject to all the local rules and regulations,” he said.

Striking miners have shut down mines in Mexico repeatedly over the past couple of years, costing the industry some $2.4 billion, according to the country’s mining chamber.

And Latin American locals are wary of Chinese mining companies operating with poor environmental practices.

Last September, three towns in northern Peru voted to reject the $1.4 billion development of the Rio Blanco copper project by China’s Zijin Mining Group’s <2899.HK>, fearing the company would pollute the area’s rich agricultural lands.

Peru’s government is siding with the company in the dispute, but concerns from indigenous communities in the region have forced foreign miners to scrap mining projects in the past. (Additional reporting by Lucy Hornby in Beijing and Terry Wade in Peru; editing by Matthew Lewis)

http://www.guardian.co.uk/feedarticle?id=7269198

You have worked hard. Now Its time to work smart. Learn to Diversify Your Income.