At the Jeddah Energy Meeting in Saudi Arabia Saturday, Ibrahim Al-Muhanna told CNBC’s Melissa Francis that production would increase significantly “by the middle of next year.”

The kingdom’s current total capacity of 11.3 million barrels per day is expected to increase to 12.5 million barrels per day, Al-Muhanna said. Previous estimates by the International Energy Agency put current Saudi capacity at about 10.8 million barrels per day. The Gulf nation has also become increasingly concerned that record oil prices could hinder growth in the U.S. and other major industrialized economies, potentially leading to a decline in oil demand and a sharp drop-off in prices.

While Saudi Arabia has been reluctant to drastically increase production, it has announced several small increases recently that it says were made to satisfy increased customer demand. The country has consistently said that it will produce enough oil to ensure the market is supplied.

The kingdom increased oil production by 300,000 barrels a day in May, and is expected to add another 200,000 barrels a day in July. Meanwhile, U.S. Energy Secretary Samuel Bodman said Saturday that insufficient oil production, not financial speculation, was driving soaring crude prices.

The U.S. and many other Western nations have put increasing pressure on Saudi Arabia, the world’s top oil exporter, to increase production. Bodman disputed that assertion Saturday, saying oil production has not kept pace with growing demand, especially from developing countries like China and India.

“Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices,” Bodman told reporters. “There is no evidence that we can find that speculators are driving futures prices” for oil.

Many countries around the world have experienced social unrest by populations angry that rising fuel prices have driven significant increases in the cost of food and other basic goods.

Bodman made clear that the responsibility for reducing oil prices did not simply fall on the shoulders of producing nations, saying consuming countries must increase energy efficiency and invest in the development of alternative fuels. But he saved his strongest words for oil producers like Saudi Arabia, who he said must step up long-term investment in production and spare capacity.

Don’t look now but the price of gold is back above $900 an ounce.

Gold, which typically rises during times of economic uncertainty and inflation, hit an all-time high of more than $1,030 an ounce back in mid-March.

A week ago, gold futures were trading at $866 an ounce. There is a case to be made that gold prices will continue to rise modestly. Demand for gold is still strong in many emerging markets. As such, profits for many gold miners are expected to double this year.

Still, most financial planners and market strategists say that people should only have a very small percentage of their portfolio dedicated to gold. Gold prices are up nearly 9% year-to-date. Not surprisingly then, gold stocks, mutual funds and ETFs have been some of the market’s better performers during this tumultuous year on Wall Street.

According to fund tracker Morningstar, precious metals funds are up 1% year-to-date compared to a 8.5% loss for the S&P 500. Keep in mind, when gold hit its all-time high, the overall market was in a panic about whether Bear Stearns would collapse.

“There is a wide pricing disparity between gold and oil but I think that will narrow with crude coming down, not gold catching up.”

In addition, Walter said that although global demand is still strong for gold, there are concerns that China’s economy may be starting to slow a bit. That could dampen gold prices.

It still owns several though, including Newmont Mining and Freeport McMoRan Copper & Gold.

So even though investing in gold and gold mining stocks may be a good idea for a long-term portfolio, now’s not the time to go overboard and make too a big bet on all that glitters.

Eight-cylinder luxury cars will rumble along Jeddah’s highways guzzling cheap Saudi gasoline as energy powers hold emergency talks in the Red Sea port this weekend to brake the free-wheeling rise in oil prices.

Oil Minister Ali al-Naimi told Ban that Saudi Arabia would raise oil output to 9.7 million barrels per day in July, its second output rise in two months and the highest Saudi output since August 1981, according to U.S. statistics.

Venezuela is snubbing the Jeddah meeting.

Officials from the producer group say oil supplies are adequate and blame the high price on warmongering over Iran’s nuclear program, massive investment flows into commodities and the slump in the U.S. dollar.

Spare Capacity

Limited extra capacity and the potential for demand to outstrip supply in years to come have helped drive oil’s rally.

Either you slow demand and increase supply or prices are going to go a lot higher.”

Longer-term capacity commitments from Saudi and other producers might help, Sieminksi said.

Sanctions have constrained international investment in Iran, the second-largest oil reserve holder.

OPEC blames speculators for inflating oil’s rally and adding to volatility and wants increased regulation of futures markets.

Oil market observers question whether very much can be done in Jeddah in the short-term to bring oil down.

Ferretti SpA, the Italian maker of Riva yachts, plans to file for an initial public offering in the next few days after receiving approval from shareholders, Chief Executive Officer Vincenzo Cannatelli said.

Ferretti, which is 60 percent-owned by private-equity firm Candover Investments Plc, wants to both expand its current operations and buy new companies, Cannatelli said today before a luxury-goods conference on the Mediterranean island of Sardinia.

Ferretti has purchased eight companies in 12 years. The company’s sales are rising by 20 percent a year by selling yachts that cost at least 2 million euros ($3 million.) Clients that want a “mega-yacht,” which are 45 meters long and sell for at least 40 million euros are on a waiting list until 2012, the CEO said. London-based Candover, the manager of a 3.5 billion-euro buyout fund, completed its purchase of Ferretti in January 2007, valuing the company at 1.5 billion euros.

“The company is ready,” said Cannatelli in a Bloomberg interview. “The company is focused on growing both by expanding into new markets such as Russia, the Middle East and Asia as well as through introducing new products.” Details of the IPO haven’t been decided, Cannatelli said. Buyout firm Permira Advisers LLP and Ferretti’s managers, the previous owners, own the outstanding 40 percent of the Forli, Italy-based yachtmaker. Ebitda

The company reported a 23 percent increase in production value of 950 million euros in the fiscal year ending August 2007 and a 33 percent increase in earnings before interest, taxes, depreciation and amortization of 158 million euros, Cannetelli said.

The yacht maker was founded in 1968 by Alessandro and Norberto Ferretti and generates about 75 percent of sales outside Italy, including 15 percent in the U.S. Revenue has increased in the past four years on stronger demand from Russia and the Middle East and orders for bigger boats.

More than 70 percent of the company’s sales come from exports, said Cannatelli. Ferretti plans to introduce a new boat with a hybrid gas- electric motor in Milan in the next few weeks to respond to consumer demands for products with alternative fuel sources.

Mediobanca SpA and Merrill Lynch & Co. will act as joint global coordinators of the offering, Ferretti said in a statement yesterday. Citigroup Inc. and UBS AG will be joint bookrunners.

Anheuser-Busch Cos., the U.S. brewer being pursued for a takeover by InBev NV, said Grupo Modelo SAB Chief Executive Officer Carlos Fernandez resigned from the Anheuser-Busch board.

Fernandez resigned “to avoid appearance of any conflict,” said Modelo spokeswoman Jennifer Shelley.

Smith’s Anheuser-Busch recommendations returned 10 percent in the last year, ranking her fifth among 16 analysts tracked by Bloomberg.

Modelo, which is 50 percent owned by Anheuser-Busch through direct and indirect stakes, said last week it wants to remain a Mexican-owned company, countering speculation it may sell to the U.S. brewer.

The company’s directors meet today to consider InBev’s $65-a-share offer, the St. Louis Post-Dispatch reported yesterday, citing the uncle of CEO August A. Busch IV.

“It shows that Grupo Modelo doesn’t want to get in the middle of the negotiations between InBev and Anheuser,” said Marco Reyes, an analyst with Mexico City-based brokerage IXE Casa de Bolsa SA. Reyes is the top-ranked analyst in terms of Modelo recommendations, with his picks returning 9.9 percent.

Anheuser-Busch, which makes Budweiser beer, declined 38 cents to $60.67 at 4:02 p.m. in New York Stock Exchange composite trading. Grupo Modelo fell 1.73 pesos to 53.02 pesos in Mexican stock exchange trading. Anheuser-Busch also said today it is buying the remaining 50 percent stake in Crown Beers India Ltd. from its joint venture partner Crown International. Modelo’s controlling families may decide either to try to buy the stake now owned by Anheuser-Busch or sell their shares after a transaction, analysts said.

“I don’t think they’re willing to sell,” said Reyes, who recommends buying Modelo shares. “If InBev buys Anheuser, Modelo will remain just as it is.”

Separately, InBev CEO Carlos Brito, addressing critics of the company’s previous cost-cutting, said that Anheuser-Busch’s wholesale distributors will be “key” should the brewers agree to a transaction.

Japan’s five-year notes completed the biggest weekly gain in 10 months as declines in stocks spurred demand for bond yields near the highest since July.

Bonds also gained as traders trimmed bets the central bank will raise interest rates this year, according to Bloomberg calculations using interest-rate swaps.

“Weaker stocks supported bonds,” said Keiko Onogi, a debt strategist in Tokyo at Daiwa Securities SMBC Co., one of the 26 primary dealers that are required to bid at government debt sales. The yield on the 1.5 percent note due June 2013 fell 18 basis points this week to 1.35 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price gained 0.84 yen to 100.70. A basis point is 0.01 percentage point.

Ten-year bond yields decreased 8 basis points this week to 1.76 percent and 10-year bond futures for September delivery added 1.15 over the five days to 133.50 on the Tokyo Stock Exchange. The Nikkei declined 1.3 percent yesterday, completing the second weekly slide.

`Extremely Uncertain’

“Shirakawa-san is not suggesting a rate hike,” said Hitomi Kimura, a bond strategist in Tokyo at JPMorgan Securities Japan Co., also a primary dealer. The chance the central bank will increase its benchmark rate this year fell to 54 percent yesterday from 67 percent at the end of last week, according to Bloomberg calculations using overnight interest-rate swaps from JPMorgan Chase & Co. The odds were as high as 92 percent on June 11.

Demand for bonds may be limited before a government report next week that economists say will show inflation quickened to the fastest in a decade, said Susumu Kato, chief economist at Calyon Securities in Tokyo. Inflation erodes the value of the fixed payments from debt.

The report is due June 27.

The so-called breakeven inflation rate reflects investor expectations for average annual increases in consumer prices over the next decade.

Establishing an appropriate asset mix is a dynamic process, and it plays a key role in determining your portfolio’s overall risk and return. As such, your portfolio’s asset mix should reflect your goals at any point in time.

Strategic asset allocation is a method that establishes and adheres to what is a ‘base policy mix’. This is a proportional combination of assets based on expected rates of return for each asset class.

Strategic asset allocation generally implies a buy-and-hold strategy, even as the shift in the values of assets cause a drift from the initially established policy mix. For this reason, you may choose to adopt a constant-weighting approach to asset allocation. With this approach, you continually rebalance your portfolio. For example, if one asset were declining in value, you would purchase more of that asset, and if that asset value should increase, you would sell it.

There are no hard-and-fast rules for the timing of portfolio rebalancing under strategic or constant-weighting asset allocation.

 
Over the long run, a strategic asset allocation strategy may seem relatively rigid.

Tactical asset allocation can be described as a moderately active strategy, since the overall strategic asset mix is returned to when desired short-term profits are achieved.

Another active asset allocation strategy is dynamic asset allocation, with which you constantly adjust the mix of assets as markets rise and fall and the economy strengthens and weakens. With this strategy you sell assets that are declining and purchase assets that are increasing, making dynamic asset allocation the polar opposite of a constant-weighting strategy.

With an insured asset allocation strategy, you establish a base portfolio value under which the portfolio should not be allowed to drop. If, however, the portfolio should ever drop to the base value, you invest in risk-free assets so that the base value becomes fixed.

You can implement an insured asset allocation strategy with a formula approach or a portfolio insurance approach. The formula approach is a graduated strategy: as the portfolio value decreases, you purchase more and more risk-free assets so that when the portfolio reaches its base level, you are entirely invested in risk-free assets.

With integrated asset allocation you consider both your economic expectations and your risk in establishing an asset mix. While all of the above-mentioned strategies take into account expectations for future market returns, not all of the strategies account for investment risk tolerance. Integrated asset allocation is a broader asset allocation strategy, albeit allowing only either dynamic or constant-weighting allocation - obviously, an investor would not wish to implement two strategies that are competing with one another.

Whether an investor chooses a precise asset allocation strategy or a combination of different strategies depends on that investor’s goals, age, market expectations and risk tolerance.

Walt Disney Co.’s ESPN, the most- watched sports channel is in partnership talks with the National Football League to carry more games, according to a person with knowledge of the discussions.

A deal may end the league’s carriage dispute with cable systems, the Wall Street Journal reported yesterday. NFL Network Chief Executive Officer Steve Bornstein has been meeting with Disney executives, the newspaper said, citing people familiar with the discussions. Disney CEO Robert Iger and NFL Commissioner Roger Goodell are also involved, the Journal said.

“They banked on the nation’s appetite for NFL programming being insatiable and that they could use that as leverage for the carriage they needed,” Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, said in an interview. “Well, lesson learned.”

Under one scenario, ESPN would carry the eight regular season games scheduled by the league on ESPN Classic, the Journal reported. The NFL channel started in November 2003, airing highlights, interviews and the league’s annual draft.

In 2006, the network began broadcasting games on Thursday and Saturday nights.

Cable Spat

Disney fell 95 cents, or 2.9 percent, to $31.94 yesterday in New York Stock Exchange composite trading. ESPN began airing Monday Night Football in 2006.

“We have a long-term and extensive relationship with the NFL,” Mike Soltys, a spokesman for Bristol, Connecticut-based ESPN, said today in a statement to Bloomberg News. Soltys declined to comment beyond the statement.

“We talk to ESPN on a wide range of issues,” NFL Network spokesman Dennis Johnson said in an interview. The NFL Network asked federal regulators last month to force Philadelphia-based Comcast Corp., the largest U.S. cable provider, to make the league’s channel more widely available.

Comcast carries its own sports networks on a basic tier of service that reaches more subscribers, while placing the NFL Network in a package that costs more, the NFL said in the filing with the U.S. Federal Communications Commission.

Regulatory Filing

Comcast has said the NFL agreed to have the network appear on a sports tier.

“The NFL’s complaint is a blatant example of regulatory gamesmanship,” Comcast said in filing yesterday with regulators. Swangard said a partnership between ESPN and the league makes sense.

BCE Inc.’s plan to go private in the world’s largest buyout got back on track yesterday after the Supreme Court of Canada approved the deal, sending the stock up as much as 8.2 percent in late trading.

Canada’s highest court unanimously overturned an appeals- court decision blocking the C$52 billion ($51.3 billion) deal. The lower court had ruled that the transaction ignored the interests of BCE’s bondholders. The Supreme Court said yesterday it would provide reasons for its decision, without saying when.

The stock has since slumped on concern that bondholders would block the deal or that financing would collapse.

Shares Climb

“We’re back to where we were before the appeal decision came down,” said Greg MacDonald, an analyst at National Bank Financial in Toronto during a Bloomberg interview. The buyout group plans to raise C$34 billion in debt from Toronto-Dominion Bank, Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc to pay for BCE.

The final price of the deal may be 10 percent lower than the current offer price, Veritas’s Monga said.

In May, the bondholders — including Manulife Financial Corp., Canada’s biggest insurer — appealed a trial judge’s decision to approve the transaction, claiming the additional debt would cut the value of their holdings because the bonds would lose their investment-grade rating.

Falling Value

BCE had its biggest drop in 25 years on May 22, after the Quebec Court of Appeal blocked the buyout transaction.

The offer by the buyout group includes C$16.9 billion in debt, preferred shares and minority interests. Before the appeals-court ruling, the deal was slated to close this quarter.

The case is Between BCE Inc. and a group of 1976 Debentureholders, 32647, Supreme Court of Canada (Ottawa).

Call the latest banks-inspired stock market selloff whatever you want, but don’t call it a capitulation.

That’s wishful thinking, according to many market pros, who say that despite Merrill Lynch’s warning that banks are in capitulation and on their way to dividend cuts, the phenomenon hasn’t spread to the larger market.

Capitulation is considered a point at which stocks are oversold and setting themselves up as bargains. “I think capitulation’s a strong word,” says Brian Gendreau, investment strategist at ING Investment Management.

One measure getting a lot of attention as the market heads toward testing new lows is the Chicago Board Options Exchange’s Volatility Index , which moved up sharply on Friday but remains well off the highs it generally shows during a market bottom. A reading above 20 in the VIX generally indicates substantial volatility, but the number typically has reached the 30s during times of market bottom like in 2002 and 2003.

For investors, the lack of a real market bottom creates both peril and opportunity.

Merrill said it expects dividend cuts at Bank of America and Wachovia and some other large-cap regional banks.

“Have we reached the bottom with the banks? “There’s no clarity in this market right now. When there is clarity you’ve got a much more expensive market,” Krosby says. “The market is going to change direction when you least expect it.”

Cohn, though, advocates “nibbling” at both financials and consumer discretionary, two sectors scaring investors in these uncertain times both for the market and the economy, where consumers are getting squeezed by soaring energy prices.

“The market needs a major catalyst to push it on the upside range, to pull out of the top of trading range,” Krosby says in a CNBC interview.