Silver Wheaton (SLW) Still a Buy

Some financial writers are attempting to cast doubt on silver and gold specifically, and also precious metals streaming company Silver Wheaton in particular, on the dubious and weak unemployment numbers, which allegedly dropped below 8 percent, producing the best results for the Obama administration about a month before the presidential election.

Former General Electric (GE) CEO Jack Welch asserts the numbers have been manipulated in order to cast Obama in a much brighter light than he should be. But even if they're close to the actual unemployed, all that means is a bunch of retailers hired temporary, part-time help, which they'll shed soon after the inventory is counted at the end of the year. Consequently, as usual, the unemployment numbers will jump up after the holiday season.

A major impediment from those making it look like the so-called improving economic situation in America being believable is that most are looking at the weak supply and demand circumstances, along with the assumption QE3 will end sooner than later as a result of the "improving" unemployment numbers.

That's a fallacy, and the open-ended monthly acquisition of mortgage-backed securities by the Federal Reserve is far from ending, and hints have been made that it won't stop until unemployment drops below 6 percent, and possibly as low as 5.5 percent. That isn't going to happen any time soon.
With Europe and China slowing down considerably, what could possibly be the catalyst to really end the ongoing recession? There aren't any, and that means QE3 will go on for a long time into the future; probably for many years.

About the only real positive in the American economy is the probability the housing market has reached, or is close to reaching a bottom. But even there it'll take years before a rebound will happen which will bring prices back to pre-2008 levels.
Even so, new construction could begin on homes in America, which would be a positive for silver and other commodities on the demand side, but which won't do much to change the jobs picture in the next couple of years.
As it all relates to Silver Wheaton, the price is driven more by QE3 at this time than any other factor, and the ongoing stimulus has formed support for silver prices, which means it has also put support under Silver Wheaton as well.
That, and the recent deal between Hudbay and Silver Wheaton shows the management is still seeking to boost its silver resources, as well as gold, which locks in revenue streams for years.

Silver Wheaton will only pay $5.90 an ounce for silver from Hudbay, which brings to overall total the company pays for silver production from all its deals to about $4.04. The operating margin enjoyed by Silver Wheaton are now about 75 percent. What's not to like about that?

As for real unemployment, the U-6 rate remains the same, which stands at 14.6 percent of Americans. That includes the underemployed or those that quit looking for work. Those are the numbers that really count, and that means there is no chance the Federal Reserve and Ben Bernanke are even close to thinking about easing up on the easing. Those that think they are don't understand the motivations and reasoning behind QE3.
This doesn't even take into account inflation and the necessity for the Fed to unwind its position.

Taken together, Silver Wheaton remains a great buy, and those who don't own the company will regret they didn't get in before the price of silver and Silver Wheaton take off to even more dizzying heights.

Silver Wheaton closed Tuesday at $38.70, falling $0.99, or 2.49 percent.

7.8 Percent Unemployment Numbers a Joke

If I were Barack Obama, Joe Biden and the Democrats, I would keep my mouth shut concerning the alleged drop in the unemployment rate from 8.1 percent in August to 7.8 percent in September. Former General Electric (GE) CEO Jack Welch said on Twitter that the numbers appear to be manipulated. While that's definitely a possibility, the other part of the equation is the typical seasonal hiring in response to the busy holiday season. And the jobs created had nothing to do with anything positive, as the vast majority were part time jobs, which was a positive nod to American who were willing to take the jobs in order to get work; apparently hoping for full-time employment after the holidays by proving they are worth keeping to employers. It's almost certain, even with seasonal hiring, that we'll see adjustments to the numbers right before the presidential elections, which by that time the majority of people have already made up their minds on who they're going to vote for. So even though the Obama administration will boast about an improving labor market, that will likely backfire on them as the reality sets in that even if the numbers are accurate, it reflects nothing but part-time, seasonal hiring, and nothing to do with long-term, full-time, good-paying jobs. With that in mind, the best thing the Obama campaign could do is shut up so it doesn't boomerang back on them. The good news for Republicans is that is unlikely to happen, which should give them plenty of ammunition to shoot at Obama, as they hit hard on the fact he can only create low-paying, part-time jobs.

General Electric (NYSE:GE) Receives Order for 55 Wind Turbines from Suncor (NYSE:SU)

Suncor Energy (NYSE:SU) has reportedly ordered 55 wind turbines from General Electric (NYSE:GE) for its project in Alberta, Canada.

The order is expected to be fulfilled by General Electric in the second quarter of 2011.

Teck Resources (NYSE:TCK) is a 30 percent partner with Suncor in the project, which has the remaining 70 percent stake. The Wintering Hills project is located 79 miles northeast of Calgary.

Approximately 35,000 homes will be supplied power from the 88 MW project.

Suncor closed Tuesday at $32.81, gaining $0.26, or 0.80 percent. Teck Resources closed in New York at $45.33, increasing $0.48, or 1.07 percent. General Electric closed at $15.94, losing $0.01, or 0.06 percent.

GE (NYSE:GE) to Aquire Dresser in $3 Billion Deal

General Electric Co. (NYSE:GE) chief executive officer Jeffrey Immelt has stated one of his primary goals for GE in the near term is to strengthen and expand their industrial businesses, and they've taken one of the steps to do that by acquiring the maker of equipment for oil fields, Dresser, for $3 billion.

GE said in a statement that Dresser will bring almost immediate impact to the bottom line of the company, adding earnings in 2011.

Vice chairman of GE and president and chief executive of GE Energy, John Krenicki, said about the deal, “Dresser is a great fit for the GE business model. Dresser’s technology complements our existing gas engine portfolio ... Eighty-five percent of Dresser’s revenue is from energy customers, and it has developed a large installed base of equipment, which is a big reason why 40 per cent of its total revenue is derived from aftermarket service offerings, and there is a lot of room for future expansion.”

“We’re doing this deal to grow,” Krenicki added. “We know the customers. We like the technology. The businesses they have are leaders in the spaces they’re in.”

The manufacturers of oil-field equipment have drawn significant interest this year, with 43 deal being made across the globe.

For General Electric's overall strategy, they've said they should have a war chest of about $25 billion by the end of 2010 to work with concerning expanding the business.

GE also said today they attempted to acquire UK-based Wellstream Holdings Plc but had the $1.2 billion offered rejected.

BHP (NYSE:BHP), Freeport (NYSE:FCX) and Alcoa (NYSE:AA) Advance on Weakening Dollar

While the U.S. manufacturing report posted better numbers than believed, the drop in the value of the U.S. dollar was the impetus behind mining companies surging Wednesday.

Oddly, the cut in jobs in the private sector for August was largely shrugged off by those desperate to grasp onto any positive economic news, which has been very little lately.

For BHP Billiton (NYSE:BHP), Freeport McMoRan (NYSE:FCX) and Alcoa (NYSE:AA), they enjoyed the weakening of the dollar which is always a boost to commodity prices.

The index from the Institute for Supply Management showed a reading of 56.3 in August, whereas analysts had been looking for it to drop to 52.9.

While the mining sector performed the best, manufacturers like Deere (NYSE:DE), General Electric (NYSE:GE) and Caterpillar (NYSE:CAT) were beneficiaries of the index number increase as well.

The Dow rose by over 250 point Wednesday in response to the news.

Caterpillar (NYSE:CAT) Acquires "Electro-Motive Diesel"

Caterpillar (NYSE:CAT) has confirmed it has come to an agreement to acquire Electro-Motive Diesel from private equity firms Berkshire Partners LLC and Greenbriar Equity Group LLC, enlarging its holdings in railroad sector.

Over the last several years, Caterpillar has spent close to $2 billion in this particular segment.

The spin-off from General Motors will operate in the Progress Rail operation of Caterpillar, and go more head-to-head with General Electric (NYSE:GE).

In 2009 Electro-Motive Diesel generated $1.8 billion in revenue.

Terms of the deal were $820 million in cash.

GE (NYSE:GE) Deal with King Fahd University of Petroleum and Minerals

GE (NYSE:GE) announced they've made a deal with King Fahd University of Petroleum and Minerals to develop a fuel research center in Dhahran, Saudi Arabia, on the grounds of the university.

Dubbed the GE Energy Fuel Research Center, it'll work on teaching about alternative fuels produced in Saudi Arabia, and to search out ways to deal with technical challenges related to them, as well as market and distribute them.

Other projects would help the existing refinery and power plants increase fuel efficiency.

Increasing efficiency while decreasing fuel consumption is one of the goals of the partnership in the energy strategy of Saudi Arabia.

Alcoa (NYSE:AA), Sovereign Debt Crisis Pushes Dow Down

Alcoa (NYSE:AA) led Blue chips in a downward spiral as investors aren't convinced aluminum demand will increase this year, and the dangerous sovereign debt crisis in Europe threatens to spread.

Consequently the Dow dropped the worst it has in three months, falling 225.06 points, or 2 percent.

Other stocks getting hit hard were Cisco (Nasdaq:CSCO), which dropped 3.57 percent, and General Electric (NYSE:GE), which plunged 3.53 percent, and Intel, (Nasdaq:INTC), which ended the day down 3.01 percent.

The Dow Jones Industrial Average ended the session at 10,926.77 points.

Measured by percentage, the Nasdaq fell the worst, down 74.49, or 3 percent on the day. The S&P dropped 28.66 points, or 2.4 percent to 1,173.60.