A Tricky Game

Ben Bernanke wants to keep the faucet running full blast while some Federal Reserve members want to unplug the drain. It's a great way to suck the massive liquidity pumped into the system out slowly; however, if the faucet is turned off, the whirlpool may pull many folks with it. I understand why Bernanke is saying what he is saying: You have to keep the faucet on, or at least the appearance that it will remain on. Theoretically, this concept could work over a long period, but the Fed seems to be in faucet-on or drain-open mode only. It doesn't have to be mutually exclusive, but it sounds as though monetary policy is taking this approach.

Brazil's Companhia Energetica Minas Gerais (CIG) has struggled for the better part of six months. Foreign utilities can be a tricky game. Any utility that faces government pricing regulation or intervention poses an investment risk, and CIG falls into that category. Still, the influence of the cost cuts and proposals from the Brazilian government appear priced into these shares. There is an attractive yield, but it is important to note that it is also a volatile yield, so what you see may not exactly be what you get. Even with the recent price cuts, I anticipate this name will pay a very healthy dividend. What I like most, however, is its chart....209 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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