Why the Media Are Wrong on Stem Cells… Again

As I predicted, the Obama administration is moving forward with policies that will directly benefit stem cell and thorium nuclear power top stocks.

The administration's health care summit takes place this week. It is widely expected that the president will make official his pledge to lift the limitations on embryonic stem cell (eSC) research. Last week, Democratic Sen. Tom Harkin and Republican Sen. Arlen Specter introduced a bill that would make it illegal for any future president to impose such limits.

Once again, the media are getting the stem cell story wrong. This change will have little impact on companies working on SC therapies. As I've said many times, the ability to create induced pluripotent stem (iPS) cells from adult cells has changed everything. The use of embryonic cells in future therapies is now unnecessary, if not foolish.

This is not to say, though, that lifting the ban on the use of federal funding will not produce winners. The reason is that stem cells have important uses beyond therapies that were stifled by the funding ban.

Theoretically, it was possible to privately fund research on unapproved eSC lines under the Bush ban. To do so, though, researchers would have had to cut themselves off from any other work involving federal grant monies. In most cases, disconnecting from the intricate network of federally funded research was a practical impossibility. You would be hard pressed to find a university or big pharmaceutical company that does not accept government grants in some form. The impact of the ban was, therefore, enormous.

The field of research that suffered most was genetic disease drug discovery. Specifically, it was research aimed at finding cures for the inherited genetic diseases that afflict millions of Americans alone. What scientists have long wanted is access to stem cells that carry the diseases they want to treat. With an unlimited number of disease-carrying cells, potential treatments could be tested and analyzed with far greater efficiency.

Now, let's move to the thorium front…

I previously told you about the Thorium Energy Independence and Security Act of 2008. Sponsored by Senate Majority Leader Harry Reid and Republican Sen. Orrin Hatch, this bill is designed in large part to produce an alternative solution to the problem of nuclear wastes. Thorium reactor technologies fit that bill for two reasons. Not only do they produce fewer byproducts, they can be used to burn the wastes produced by other nuclear technologies.

Last week, President Obama dramatically moved the thorium industry forward. He announced that he would kill the Yucca Mountain nuclear waste depository project. This is despite the $9 billion already spent on the project.

Reid, of course, is bragging about his role in the decision. So where does this leave us? The Yucca Mountain project, located in Reid's home state of Nevada, was considered critical to the future of nuclear power generation in America. Since Obama, Reid and Pelosi all promote nuclear power, this significantly increases the likelihood that thorium reactor technologies will be fast-tracked.

Peak Oil Stock: The Collapse of Banking

What next? Isn't that a question, though...
     
The Peak Oil story was never about running out of oil. It was about the collapse of complex systems in a world economy faced by the prospect of no further oil-fueled growth. It was something of a shock to many that the first complex system to fail would be banking, but the process is obvious: no more growth means no more ability to pay interest on credit... end of story, as Tony Soprano used to say.
    
There was a popular theory among Peak Oilers the last decade that the world would enter a "bumpy plateau" period when the global economy would get beaten down by peak oil, would then revive as "demand destruction" drove down oil prices, and would be beaten down again as oil prices shot up in response ― with serial repetitions of the cycle, each beat-down taking economies lower ― the only imaginable outcome being some sort of quiet homeostasis. This scenario did not play out as expected. It was predicated on a mistaken assumption that all systems would retain some kind of operational resilience while ratcheting down. Anyway, the banking system was mortally wounded in the first go-round and the behemoth is dying hard.
    
The last desperate act of the banking system in the face of Peak Oil's no-more-growth equation was to engineer species of tradable securities that could produce wealth out of thin air rather than productive activity. This was the alphabet soup of algorithm-derived frauds with vague and confounding names such as credit default swaps (CDSs), collateralized debt obligations (CDOs), structured investment vehicles (SIVs), and, of course, the basic filler, mortgage backed securities. The banking system is now choking to death on these delicacies.
    
The trouble is that the EMT squad brought in to rescue the banking system ― that is, governments ― can't remove these obstructions from the patient's craw. They don't want to drown in a mighty upchuck of the alphabet soup.
    
The collapse of complex systems is actually predicated on the idea that the systems would mutually reinforce each other's failures. This is now plain to see as the collapse of banking (that is, of both lending and debt service), has led to the collapse of commerce and manufacturing. The next systems to go will probably be farming, transportation, and the oil markets themselves (which constitute the system for allocating and distributing world energy resources). As these things seize up, the final system to go will be governance, at least at the highest levels.
    
If we're really lucky, human affairs will eventually reorganize at a lower scale of activity, governance, civility, and economy. Every week, the failure to recognize the nature of our predicament thrusts us further into the uncharted territory of hardship. The task of government right now is not to prop up doomed systems at their current scales of failure, but to prepare the public to rebuild our systems at smaller scales.
    
The net effect of the failures in banking is that a lot of people have less money than they expected they would have a year ago. This is bad enough, given our habits and practices of modern life. But what happens when farming collapses? The prospect for that is closer than most of us might realize. The way we produce our food has been organized at a scale that has ruinous consequences, not least its addiction to capital. Now that banking is in collapse, capital will be extremely scarce. Nobody in the cities reads farm news, or listens to farm reports on the radio. Guess what, though: we are entering the planting season. It will be interesting to learn how many farmers "out there" in the Cheez Doodle belt are not able to secure loans for this year's crop.
     
My guess is that the disorder in agriculture will be pretty severe this year, especially since some of the world's most productive places ― California, northern China, Argentina, the Australian grain belt ― are caught in extremes of drought on top of capital shortages. If the US government is going to try to make remedial policy for anything, it better start with agriculture, to promote local, smaller-scaled farming using methods that are much less dependent on oil byproducts and capital injections.
     
This will, of course, require a re-allocation of lands suitable for growing food. Our real estate market mechanisms could conceivably enable this to happen, but not without a coherent consensus that it is imperative to do so. If agri-business as currently practiced doesn't founder on capital shortages, it will surely collapse on disruptions in the oil markets. President Obama at least made a start in the right direction by proposing to eliminate further subsidies to farmers above the $250,000 level. But the situation is really more acute. Surely the US Department of Agriculture already knows about it, but the public may not be interested until the shelves in the Piggly-Wiggly are bare ― and then, of course, they'll go apeshit.
    
The recent huge drop in oil prices has left the public once again convinced that the world is drowning in oil ― if only the scoundrelly oil companies were forced to deliver it at reasonable prices. The public has been consistently deluded about this for decades. What's missing so far is for the president of the US to lay out the reality of the situation in a dedicated TV address. I know a lot of you think that Jimmy Carter already tried this and failed to make an impression (and ruined his presidency in the process). I guarantee you that Mr. Obama will have to do this sometime in the next few years whether he likes or not, and he'd be well-advised to get it done sooner rather than later. And by this I don't mean just vague allusions to "energy independence" or "renewables" in speeches devoted to many other issues. I mean telling the public the plain truth that we'll never offset oil depletion and the intelligent response i s to do everything possible to transition to walkable towns and public transit, not to sustain the unsustainable.
     
The alternatives ― i.e. what we're trying now ― is to further delude ourselves into thinking that we can run WalMart and the suburbs by some other means than oil. Despite all our investments in these things, we won't be able to run them by other means, and the news about this had better get out before enormous disappointment turns into titanic rage. If Americans think they've been grifted by Goldman Sachs and Bernie Madoff, wait until they find out what a swindle the so-called "American Dream" of suburban life turns out to be.
    
On this blizzardy Monday in the power centers of America, attention is fixed on the never-ending fiasco of AIG ― a company whose main product turned out to be credit default swaps, and is now choking on them. Kibitzers on the sidelines of finance are forecasting a king-hell bear market suckers' rally in the stock markets followed by a belly flop to Dow 4000 or lower. I myself called for Dow 4000 two years ago ― and was obviously a bit off on my timing. All this is surely trouble enough. But while your attention is focused on Rick Santelli in the Chicago trader's pit, or Larry Kudlow desperately seeking "mustard seeds" of new growth in financials, try to let one eye stray to the horizon where these other complex systems are working out their next moves. Farming. The oil markets. These are the coming theaters of alarm and distress.

"How can two obviously intelligent guys like yourselves find anything to value in Sarah Palin? I read your essay, Don, and found it somewhat insightful, the points obvious for those of us who consider the economy and its effects (but still your points are valid) and I'm sure news to some.

"But then you state that Sarah's your gal? And Gary, you also state some support for Palin. I'm at my wits end.

"That woman is such an obvious fraud that it became painful to watch her embarrass herself. If she has any intellect capable of understanding anything beyond the immediately obvious to any dog or cat, she wins an Academy Award for her ability to hide it. When she opened her mouth to speak it was painfully obvious that she fails to understand the simplest rationale, and she honestly believed she made points instead by employing colloquialisms, further defining her shallow, narrow understanding of most anything.

"As far as any knowledge of societies, economies, history, governing philosophies, or even our government, she proved to possess little knowledge. Electing people like Palin to governing positions because they're popular, or considered good communicators, is exactly how we've arrived at our current predicament. It's past time for voters to do an infinitely better job of selecting electing representatives and then following their actions and demanding accountability, while diluting the influence of special interests and their paid, professional lobbyists. Failing to do so will surely eliminate our right to vote at all.

"Surely you two are pulling my leg about the Sarah thing."

I do not dare speak for Don, but I agree with your assessment of Sarah…but when did I say anything about voting her into office? I just wish she'd return my phone calls.

Another Shooter seemed to know where I was coming from and warned: "God will damn you to hell for the lust in your heart." I assure you, Shooter, that my intentions are honorable.
 
And here is some angry protest from the Marxists who insist on reading our letters…

"Dear writer of the article: Gary Gibson?

"This article is an insult to my intelligence! You cater to fear [and] ignorance, and you propound borderline conspiracy-doomsday theories of the most banal ilk. Your beloved unregulated capitalism has sent the world economy into a tailspin of epic proportions. Even Allen Greenspan an avatar (Ayn Rand devotee and all) of the free enterprise system said his core working assumptions are now in doubt! Added insult to this rant is your mention of Sarah Palin as a serious candidate for our nation's highest office. Even John McCain's aides were appalled at her ignorance and leaked negative information. I spent ten years being a high school social studies teacher; you do a disservice to our country by these Jeremiads, which are not even half-truths, but one-eighth truths at best! Please remove me from this email list!

"A recovering ex-Republican, conservative and Ayn Rand devotee

"P.S. I would love to debate this point further with you. How about the thesis: unregulated free markets caused the sub-prime mess and brought us into a recession? How do you logically refute this?"

We spend a couple thousand words each business day trying to explain that the fiat money, fractional reserve banking, government-regulated thing that is destroying all your lives is not a free market based on sound money.

If you don't understand this or simply refuse to, then I'm not sure why you were receiving our newsletter in the first place. If you don't know the difference between our modern day Alan Greenspan and the dashing young Randian he replaced, then nothing you read in this newsletter can help you anyway.

That a statist and proponent of centralized planning such as you taught "social studies" in high school wouldn't surprise me, especially if you did so in a public school…but it still saddens me.

The Washington Post reports: "The government needs to continue moving aggressively to combat the recession and financial crisis, even as it takes steps to rein in the budget deficit in the longer term, Federal Reserve Chairman Ben S. Bernanke said this morning."

With an entire planet of people clamoring for more government management and bailouts ― and with the government happily obliging ― you may want to consider bailing yourself out.

Making Home Affordable: The Kickoff Begins

Help is coming for nine million overtaxed, indebted sods - so goes the jingle from our newest president of these United States.

That's a little more than those who are drowning right now.

One in five U.S. mortgage-payers is underwater. That's over eight million of us. In times like this I cross myself and thank God I'm a renter.

Home values plunged a collective $2.4 trillion last year.

California, Texas, Nevada, Virginia and Florida form the primary wastelands.

However, according to First American ― who tracks mortgages from California's ground zero ― should housing prices drop another 5%, another 2.2 million will get dragged under the swift current of decline. 

That takes the tally up to 10.2 million ― no surplus to be found in this "new" program.

President Barack Obama proposed $275 billion plan makes use of refinancing or restructuring America's home loans. All you need: most recent tax return and two pay stubs…oh, and also an "affidavit of financial hardship."

About $75 billion (good until 2012) would be used to rescue homeowners by paying lenders to alter troubled mortgages ― inducing the lender to reduce borrowers interest rates as low as two percent.

The catch: you can only modify once. And if you bought after Jan. 1, 2009, you're outta luck. Also, if you were mad enough to try for property worth over $729,750…call your relatives and hand the keys to the bank. (If you're lucky, they'll want to make a reality TV show about your "hardship." I hear one of the latest TV pilot shows is an ex-Wall Streeter who has to move back home with mom and dad.)

About five million folks fall under the aegis of Fannie or Freddie, and they've got until 2010 to rework these rotten loans to temporarily sweeter terms.

Now here's what's rotten in the state of Washington D.C. ― this currently un-legislated and unfunded plan looks pretty similar to its circa 2005-2006 cousin…the brainchild of one Neel Kashkari, interim head of our Office of Financial Stability. (Yes, created by that first "bailout bill" ― code name: Break the Glass.) 

This fellow from Akron, Ohio, who advanced in life to Hank Paulson minion, took this hallowed fiscal post on Oct. 6, 2008. Before that, he was a V.P. of Goldman Sachs in San Francisco, where they nicknamed him "the Borg." Then, Kashkari approached Mr. Paulson for that solid government job in 2006 ― great timing! He worked shoulder to shoulder with Hank in bailing out Fannie, Freddie and our perennial problem with the gambling addiction AIG.

In the years between making money for Goldman and overseeing money for Goldman-times-Politics-squared, Mr. Kashkari dabbled in the housing market. Fat surprise that!

To get to any useful information on his 2006-2008 years in service of our government, one has to sift through all sorts of gush, childhood stories, college professor praise, and even "sexiest man alive" references. 

Finally, after typing "Kashkari 2006" into my search engine, I found blogger Angry Bear, corroborating my recollection of forays I conducted just after Paulson tapped this "wet-behind-the-ears" pipsqueak for this interim post.

"HOPE NOW"  ― The John the Forerunner of "Making Home Affordable"

Kashkari was the genius behind Bush's HOPE NOW Alliance in 2007. (Again, it was already far too late to do much).  HOPE NOW looks like Obama's plan of today, only it "encouraged" mortgage lenders to restructure subprime loans voluntarily. Hank announced it in Oct. 2008 ― just after the takeover of Fannie and Freddie.

Like a McDonald's sign, the HOPE NOW slogan is "Over 1 Million Helped" ― when in fact, it just seems that they mailed letters about HOPE NOW to 1 million delinquent homeowners. 

Ha! How many subprime borrowers even live at the address? I hear story after story of mortgage lenders who convinced folks to take funds for homes they couldn't afford, then arranging a deal where they could buy a second home!

Ultimately, what HOPE NOW boils down to is a trademarked Hotline: 808-995-HOPE.  The number of calls fielded is what goes into the press release ― 1.2 million in 2008 ― not the number of workouts.

With today's new plan, we're stuck with dollar-for-dollar matching to encourage lenders to notch down their lending rates. Guess that's how the government can put its money where its mouth is.

We applaud Kashkari's immense ability to lobby a mere six years' work in finance to such a high position, and hope the Senate won't be asked to confirm him anytime soon.

How About Holding Someone Accountable?

Now, a chum of mine, who worked at Fannie circa early 2000, since retired in disgust. Why? Because he saw how pervasive the federally-mandated home ownership tyranny had become. It sickened him. Physically…seeing the heads of Fannie conduct their pep-talks and flash pocket-of-the-government comments. (I'll warn ya, we're getting him to write you a "chock-full-of-numbers" shot soon!)

Now, I'm all for buying a chunk of good land, planting a garden, and having a home of one's own. But I don't have my own house yet. Because the kind of house my income affords is in a neighborhood I can't walk unmolested in. Facts of life. I swallowed them.

I use my credit card for what I can pay off at the end of the month. And I resist the urge to "hope for better times" and shoulder a nice, hearty "American Dream" mortgage. Now if only about five million or so (giving cushion for those surprised by lost jobs, etc.) had been as grown up as me.

I presume the same toxic shenanigans my friend describes at Fannie were happening over at Countrywide…and we know how that one blew! 

So let's play a little round of "Where Are They Now?" before Gary pours our parting shot.

See What Countrywide's Iago Does Today: PennyMac

Fannie, Freddie, AIG, are just like blokes foisting a tin cup in our faces… And they've got just as many sob stories up their sleeves as you find in the savvy street bum ― the one you know is faking it.

Here's how it runs: 

"Got here on the bus, see. And I went to the hospital here (flashes ubiquitous pink or orange plastic bracelet). I'm trying to get back to the hospital, and I need some money for the bus.

"(We wait another minute to point out that said hospital is only 10 blocks down the street.) Now is when he trots out the wife or child in the background, hanging in the shadows on the street corner. "Me and insert name, we've just come all the way up from West Virginia…")"

Here's someone who's not holding out the cup ― because he's working the system instead ― and better than an welfare check recipient we know of. Stanford Kurland. And he now stands to mint millions from this home mortgage mess.

Don't know him? Mr. Kurland played Iago to Mr. Mozilo over at Countrywide Financial. His bag of tricks?

With the more than $200 million he netted from selling his Countrywide stock, and hundreds of millions raised from private equity giants like Blackrock, he's buying up the delinquent home mortgages that the government was forced to takeover from the likes of Fannie and Freddie ― we're talking for pennies on the dollar here.

So how's that for private enterprise making lemonade from lemons? I see it as reprocessing lemonade to shape something that looks, tastes, and smells like a lemon ― but ain't.

He's got this nice, glass-walled boardroom in L.A. for an outfit called PennyMac. 

Yes, PennyMac. The irony of the name makes my stomach lurch.

Can we say nothing about their abusive lending processes that gave some trash-compactor firm like PennyMac a raison d'être in the first place? And I can't help but want to stalk Mr. Kurland when I fly out to West next week and ask him about the proliferation of low-rate "teaser" loans at Countrywide starting back in 2003.

But he'll blame Mozilo, of course, and say it all went to pot in 2006. Yes, yes, businesses regulate themselves ― when those disgusted by bad business practice defect to create new businesses.

How's that for "growth?"

Of course our government will abet Stanford and friends' modus operandi. What choice does it have?

I leave you with this lovely quote from Depression-hardened investor Leon Levy:

"Business people who often sound like libertarians when markets are going up suddenly sound like socialists and beg for bailouts and protection from governments when the economy heads south."

500% Profit From the Media-Ignored Bull Stocks Market

"Don't get too used to cheap oil prices. They won't be around for long."

That's the warning we first shared with you three weeks ago -- when oil traded for $35 a barrel.

Since then, while virtually every media outlet exclusively focused on our financial crisis, oil prices quietly surged an astounding 28%.

And it's just getting started.

The truth is, our team of researchers recently confirmed that we're now in the early stages of another massive bottleneck in supply... one so large that we're realistically looking at $100+ oil -- within the next few months.

But as you'll see in your free report below, we also uncovered a rare investment tool that could pay you as much as 500% as it happens.

In fact, in the past two weeks alone, investors using this powerful tool already gained 34%.

In a market this gut-wrenching, you can't afford to pass this virtually-guaranteed money-making opportunity up.

Every November, the International Energy Agency (IEA) releases its World Energy Outlook report.

The 578-page document blueprints exactly where our future energy sources will come from and when - for leaders and elite investors around the world.

And they read it for good reason...

Since its inception, the findings within the pages have been so accurate that the annual report reigns as "the authority of energy analysis and projections."

In fact, many people today trust their report without question.

I just finished pouring through my copy.

It was handed to me after a fellow geologist, with first-hand experience in the Canadian oil sands, pointed out a shocking error - one that guarantees an imminent spike in the price of oil.

In short, the report claims that:

"Thanks to ever-dwindling supplies in the Middle East, the world will rely on Canada as the largest oil producing country by 2010."

It's been their same projection since 2006.

But there's just one problem.

The World Energy Outlook forgot the other half of the story...

You see, what you won't read in the report is that many of those companies we will rely on have already halted production in scores of their fields.

They were forced to postpone production as the price of oil crashed into the unfeasible $30 range.

Many projects, projects that were expected to seamlessly come online within weeks, are now months - even years - behind.

It's a supply and demand bottleneck we can't stop. And it's guaranteed to once again launch the price of oil violently back to the $140 plus range... very soon.

That's a 250% increase from what we're paying today. And that's a conservative estimate.

The good news is that we also, very recently, uncovered a secret investment - which most Americans know nothing about - that could hand you 500% gains as this spike hits.

And the best part is that it's not related to risky exploration or production companies, either. Instead, it's directly - dollar for dollar - related to the price of oil. Only this gem pays you DOUBLE the gains!

In fact, investors using this blockbuster already pocketed 34% gains - in the last seven days as oil popped 17%!

I've written this letter to give you every last detail on exactly how it works. But first, let me quickly remind you...

How The Smallest Supply Crunch Could Make You Filthy Rich

As you know, four years ago, a pair of hurricanes blitzed our Gulf Coast's oil and gas refineries, forcing our production to a crawl.

That instant, Americans witnessed the unthinkable... oil prices launch from $50 to over $70 per barrel.

It was the first lesson in a cold, hard truth... and what should have been the investment eye-opener of a lifetime.

We learned first-hand exactly how sensitive we were to the tiniest interruption - or even threat of interruption - in our supply.

And it broadsided almost everyone.

In fact, month after month, most so-called experts all over TV, from the CNBC analysts to Dick Cheney... even most Americans foolishly believed everything was fine. And that the price would soon tumble back down.

They were so confident that everything would immediately pan out that they did nothing. And it cost them - quite possibly the opportunity of a lifetime.

Do you remember where you were when gas suddenly hit $4.13?

Most of us sat back in shock and awe as daily gas prices became so painfully expensive that we were forced to cancel holiday and summer vacations... Going out on weekends turned into USA Channel reruns of Monk on the couch... And we only filled-up our tanks just enough to make it to and from work.

But not everyone...

You see, one small group of investors saw it coming from the start. They knew exactly how to play this "bottleneck."

And they played it for everything it was worth... churning winning trade after winning trade.

I'm talking about everyday investors - people like you and me, working long hours just to pay the bills - who saw it coming, suddenly found themselves collecting dozens of massive payouts, the likes of 33% in three months... 156% in 9 months... 611% in 6 months... 1,014% in 17 months... etc.

People like Norman Wilson, an insurance salesman and father of four, who turned a small $10,000 into $61,900 on just three plays during the bottleneck.

And then there's Bill Walker, a machine worker. He used this amazing opportunity to rapidly spin $15,000 into $65,400.

Even school teachers like Lee Davis took advantage of this opportunity and raked in a cool $12,500 profit - in a single week.

They didn't just take the safe - and highly profitable - road by investing in oil futures either... they took advantage of the scores of oil companies, spreading like wildfire, to our northern borders.

And their timing was perfect. Shortly after their positions were already secured:

Canada.com declared - "Energy Stocks Drive TSX Higher"

Fortune Magazine printed - "Canada's oil sands remain alluring as a future source of crude. Suncor (Research), the pioneer of Alberta's booming industry, has returned 142 percent since we recommended it."

Forbes noticed - "Gurus Fill Up With Oil And Gas Stocks"

Bloomberg reported - "Canadian Stocks Headed For Best Weekly Advance In Three Months... Led by materials and energy producers"

And with an estimated 1.5 trillion barrels locked under their soil, and oil prices skyrocketing faster by the day, Canada's low-priced outfits suddenly became the hottest investments since Exxon.

Investors in companies like Suncor, Grey Wolf, UTS, Conacher and many more - companies sitting on oil resources that we desperately need to come online as early as 2010 - easily raked in 200%, 300%, even 1,000% gains in a matter of months, as oil prices skyrocketed beyond $147 per barrel!

But By The Time The Easiest Money Was Made, Most Americans Catching On Found Themselves S.O.L.

Sadly, it took oil prices to break over $100 a barrel before most investors started realizing that they could have made an absolute fortune.

They missed the boat.

And those earlier investors - the ones who caught the first stages of a run - the ones who knew where the profits would be juiciest, started cashing out at the peak, just as our banking and economic crisis cranked into high-gear.

Then, of course, the weakened world-wide economy acted as the final bulldozer that toppled July's high of $147 all the way down to $33 a barrel by December 17th.

And while the average American rejoiced that - at the very least - gasoline was "affordable" again... something much more tragic - and much more profitable quietly unfolded.

You see, thanks to prices becoming too low, many of Canada's oil companies - resources that would supply crucially needed oil for the U.S. and rest of the world in a few months - couldn't stay in business.

And we need that oil, like a junkie needs his fix.

In fact, the U.S. depends on AND imports more oil from Canada than from Saudi Arabia, Kuwait, Libya, and Iraq - combined.

But one by one, we started finding major oil projects temporarily closing up shop. Drilling and refining stopped. Exploration and testing lost all capital. And their share prices ultimately plummeted.

Just to name a few examples:

StatoilHydro recently yanked the rug from under a $12 billion project in Canada's Peace River.

Both Nexen Inc and Opti Canada Inc were forced to halt advancement on major projects in Alberta.

Suncor, Canada's oldest oil sands operator, was forced to cut its spending by 33%, thanks to lack of profitablility with the current extremely low prices.

Oil giant Dutch Royal Shell's stopped work on several of their Canadian projects until prices regain strength.

The major partners in the proposed $24 billion Fort Hills oil-sands project in northern Alberta - Petro-Canada, Teck Cominco and UTS Energy - announced they may defer a decision to build an upgrading refinery northeast of Edmonton.

The list goes on.

As I mentioned earlier, within months, precious deposits of oil - even locations that were set to come online within weeks - are now months behind.

Some are trading now for a 90% discount.

But ironically, these outfits just created a powerful, self-fulfilling prophecy... an unstoppable bottleneck guaranteed to launch oil prices - very soon - through the roof.

And it's already started.

Your Second Chance To Ride One Of The Most Profitable Bull Markets In History

Don't let oil's current low price fool you this time.

Thanks to an already guaranteed shortage -- just around the corner -- these low prices won't be around for long.

Here are just a few more of the critical points from their latest report:

Global oil demand is projected to expand 2.2% a year, on average, reaching 95.8 million barrels a day by 2012, up from 86.13 million barrels a day this year. The forecast is based on global economic growth of about 4.5% annually. Oil demand is expected to increase most rapidly in Asia and the Middle East.

OPEC, which supplies more than 40% of the world's daily oil needs, will have little spare capacity left by 2012.

Increases from non-OPEC oil producers and biofuel producers should start flagging after 2009.

Natural gas markets will also be tight because of inadequate supply increases, limiting the ability of consumers to switch between oil and natural gas.

And that's just the beginning of the coming bottleneck. Here's what CNN recently reported:

And very soon, when word of the shortage hits, the exact same scenario that the hurricanes caused will already have started unfolding... only this time, the gains will hit much, much faster.

The smart money's already placing their bets.

They're already preparing to collect a fortune!

And if you're prepared, as I'll show you, step by step, in just one moment, you'll soon find that many of the very same companies that surged before will rapidly once again start compounding your wealth.

And here's the kicker:

This time, they won't need nearly as much capital to get started! Most of their infrastructure is already ready to go - and they're trading for just pennies on the dollar.

And if you think that's a juicy opportunity, let me show you how you could...

Collect Twice The Gains Of NYMEX Oil Traders... with One Simple, Yet Little-known Play

Listen...

We know oil prices are about to skyrocket. We know they're just around the corner. And we know that those slick traders playing NYMEX futures - guys who need hundreds of thousands of dollars just to get started - somehow always come out ahead.

But here's what you might not know...

Very recently, we've uncovered a rare investment that could pay you gains just as astonishing as any jackpot oil resource company out there - but without the risk!

Here's how it works.

You see, this special investment, which most investors know absolutely nothing about, doesn't even follow oil producers or risky exploration companies... it strictly follows the physical oil market.

And get this:

Thanks to the unique nature of this investment, you can actually get paid double the gains that oil makes!

In other words, a 10% gain pays you 20%... 20% gain pays you 40%... 100% rise in oil prices pays you 200%

That means, if oil shoots 50% this year, which is our gross-underestimate, you double your money!

If oil shoots up to the $70 range... every $5,000 invested suddenly turns into a $10,000 payday!

With oil trading in the upper $30-range, this unique opportunity doesn't get any easier.

Just imagine how much money you'll be sitting on when oil prices plow through the $140 a barrel mark!

I'm not talking about several years down the line either. We could realistically find ourselves staring right down the throat of $100 before January... $140 by next April... even $200 a barrel by the end of 2010!

Every last detail is spelled out for you in our latest report. It's called, Hotter Gains Than NYMEX Traders Could Ever Make. And I want you to have it for FREE.

All you have to do is test out our top-performing trading advisory, The Pure Energy Trader.

But before I divulge all the details about how to get started collecting a fortune in this Bottleneck Bull-Market, let me introduce myself and my team...

Introducing... The Pure Energy Trader

My name is Brian Hicks.

I'm the president of the investment research company Angel Publishing Investment Research. I've spent my entire investment career, going on two decades now, uncovering the market's best moneymaking trends and showing investors like you how to profit from the most undervalued opportunities in the world.

I've taken investment junkets all over the world... to historic oil boomtowns like Desdemona, Texas, to the Powder River Basin in Wyoming to Kiev, Ukraine. We've been to the heart of the oil sands industry, Fort McMurray in Alberta, Canada. I've been blown away by a wind park in Palm Springs, California. And I've seen first-hand the natural gas boom in the Barnett Shale.

My investment insights and ideas have landed me frequent spots on financial shows like CNBC, Bloomberg, Fox, CNN, Fox Business, and, most recently, C-SPAN... where I spoke on the energy markets and the U.S. dollar.

I'm not telling you this to be a showboat. But I want you to understand that it's this dedication and never-ending persistence that has allowed me to develop friendships and contacts with some of the best financial minds and industry insiders around the world.

And recently, it's allowed me to acquire a man who could easily be considered, with well over 1,153 successful trades under his belt, one of the best traders on the planet today.

His name is Ian Cooper.

And to get a better handle on why I cherry-picked Ian over any other research analyst out there, look no further than his track record...

120% on Royal Caribbean 

194.12% on QQQ

269.52% on On2 Technologies

270% on ONT

268% on CYD

206.33% on VTSS

246% on IPIX

233% on TLTCJ

515.38% on MQJSB

225% on ETGP

302.15% on ASTM

And that's just to name a few. Had I shown you all of his winning trades just for the past 2 years, it would be five pages long.

His off-the-charts accuracy for reliably reading the markets, matched with his winner-after-winner track record, have plastered his sought-after advice on the pages of numerous publications. He's filled columns from Investor's Business Daily all the way to Forbes.

He's also frequently appeared on investment shows such as Money Matters with Barry Armstrong and On the Money with Mike Stein.

In other words, Ian is the real deal.

In the past few months, I'm willing to bet that you've gained valuable wisdom just from Ian's dead-on articles in Wealth Daily or Energy and Capital.

He's spotted scores of blockbuster buy and hold opportunities. But it's his knack for finding rapid, explosive trades - just like the one that could pay you double the gains oil makes - that brought him to the Pure Energy Trader team. After all, he's constantly...

Picking The Best Trades... Trade After Trade

Since starting our hottest trading advisory, The Pure Energy Trader we've already initiated and closed 91 trades.

85% of them closed for massive gains! In fact, each trade - winners and losers - is averaging +24%.

In other words, you're more than doubling your money every four trades!

Even more amazing is that his tight-knit group of investors (of which I'll show you how to become a part of) only holds each one of these trades for about 24 days.

Sometimes it's a matter of hours.

That means, on average, you're doubling your money every four months!

I can't think of a single other investment opportunity on the planet that could deliver those gains... especially in today's unpredictable market.

And according to Ian, with energy prices about to launch sky-high, he's lining up more and more knock-em down winners that he's already set to alert you to the moment the time's right.

Now, I could go on all day detailing the fast-moving trades Ian has been making and the ones he can't wait to share with you soon. But here's what I want you to walk away with...

All of our winners have a couple of very important things in common...

They're all energy top stocks with enormous potential...

And they're all companies that our team of researchers closely follows on a daily basis.

And with a track record like that, even in today's market, investors are begging for more recommendations. Problem is for some investors, these recommendations, unlike the ones in many of our other services, aren't buy and holds, which may take up to three years to reach full value.

We're after the fast money. And with Ian following and executing the trades, the fast money is turning into the easy money.

And just to be clear...

"I just joined and the SPF puts are my very first trade using your services. Bought at 0.85 and it's now trading at 1.90... and 121% gain in 3 days... very nice." - NZ

No one is complaining at all about the track record for any of our buy and hold services. Nothing will ever change the fact that investors can make good, solid returns by maintaining a portfolio filled with top stocks we like for the long term.

But... the reality is you could make a lot more.

In some cases, over 300% more!

By not having a pure trading service - where we can get in and out quickly with 25 to 50 percent profits in just a few days - we're missing out on some easy money.

Just take a look at this scenario:

How Loosely Following Ian's Trading Research Turned $5,000 Into $58,913.14... In 6 Months

This is why you also need to be trading top stocks instead of strictly investing in "buy and holds." You see, with the right trades...

You don't need to start with a lot of money to make a fortune in the market... You don't need to have all your savings tied up in multiple investments for several years, either... You don't even need to find dozens of trades every year.

"You did a great job for me. Thank you very much. I made about $35,000 on IPIX but continue to hold on for another few weeks." - Nhan N.

In fact, all you needed to make more than 10-times your initial investment was to loosely follow seven of them.

Take the following scenario, for example:

On November 30th, 2007, Ian alerted his investors to an amazing situation in the solar market. A leading company, LDK Solar, announced the ground-breaking of their latest polysilicon plant - news of which, he knew would soon cause the share price to surge.

Because of his timely alert, his traders secured an entry price of $29.55.

And just five days later, on December 5th, he recommended they sell half of their position for a 49% gain. Two days later, the other half sold for a 41% gain - turning an initial stake of $5,000 into $7,250.

Then, just 12 days later, on December 19th, he showed them another explosive opportunity: An options call on China Sunergy, after news of an amazing deal struck with a German manufacturing company. 

Much like with LDK, readers took gains of 204% on the first half of their shares within six trading days. The second half claimed 141% after six more.

Suddenly, their $7,250 compounded into $19,756. It didn't end there, either.

On February 19th, 2008, he struck gold again. He alerted readers to what Ian called a "no brainer" with U.S. Natural Gas.

Like clockwork, two weeks later, his readers were sitting on an easy 80% gain as the first half sold... 140% gains on the second half, just a week later.

Within three weeks, your $19,759 turned into $41,488.13.

And then, on April 22nd, they were alerted to one of the many tiny oil and gas companies flocking to the riches within the Bakken oil formation.

Three weeks later, on May 15th, these hit-and-run traders sold their shares for an incredible 42% gain.

Today, that initial $5,000 investment - using just those seven alerts and reinvesting profits - is now worth $58,913.14! $10,000 would be $117,826.30 - all within six months!

That's the rapid-fire power trading offers you.

And I haven't even accounted for taking gains from the multiple other trades that Ian issued to his readers during that time... gains like 33% from Hoku Scientific in five days... 119% from Cree Inc. in six days... 118% from PetroQuest in 15 days... to name a few

Just imagine how quickly you can compound your wealth with gains that large - gains that fast - again and again.

That's the sort of hit-and-run excitement you should expect by joining Pure Energy Trader. You can make a fortune from several rapid trades.

You see, when you sign onto Pure Energy Trader, you're enrolling into...

An Exclusive Trader's Club Unlike Any Other

Unfortunately, the number of investors who can sign up for our Pure Energy Trader is strictly limited.

In order to make sure every one of our subscribers has the ability to get maximum value out of each recommendation, membership will be strictly limited to 2,000 seats.

... most of which are already spoken for.

The first time we opened this window, nearly half of those seats were gobbled up by our premium, profit-hungry readers in the span of a weekend.

So it's important that you act quickly if you'd like to get in.

"I am doing great in about the two weeks I have been following your trades. So far I have made the following: LEN: 52%, HOV: 41%, SPF, 131.25%, XLF: 88.8%, IMB: 37% and TOL: 100%" - BS

You see, we don't want 5,000... 10,000 people buying the best stock. If we allowed an unlimited number to join, we could easily push the best stock up several hundred percent. That would be a disaster.

But if getting rich doesn't bother you, and you're ready to follow Ian as he shows you the secrets to landing dead-on hit and run trades in this market, I urge you to join right now.

Get Ready

Another point I want to discuss is how the trades will be delivered to you. The trades will be sent via e-mail. No Faxes. That's because we want everybody to receive the trade at approximately the same time.

And just so that you don't have to recheck your email 10 times a day, we're also offering Pure Energy Trader updated VIA live RSS feeds - so you can get the alerts the split second they're available!

If you're comfortable with what I've said so far, I urge you to consider joining.

Again, I know this style of trading isn't for everybody. But by signing up for the Pure Energy Trader, you're elevating yourself into the top tier of the trading community. If you have second thoughts on the price or the frequency of recommendations, stop reading now... the service isn't for you.

If you're interested, welcome aboard. Let's get to work.

Now Listen Carefully

When you fill out the membership form (assuming there are remaining slots), you'll immediately receive a confirmation and a welcome letter, as well as a link to the Pure Energy Trader site where you'll be able to access every single one of the trades Ian issues 24 hours a day. We'll give you full instructions.

And that's not all!

You'll also learn about a secret investment that actually pays double the gains of any oil futures trader. All those details are in your free report, Hotter Gains Than NYMEX Traders Could Ever Make - just for trying us out. 

Plus, by signing on today, I'll also rush you a free copy of my latest book, titled Profit From the Peak.

In short, Profit from the Peak is a roadmap that shows you how to profit from the rise of oil prices.

In the book, my colleague, Chris Nelder, and I go into full detail on tackling the world's energy problems... and how investors can maintain financial security in the process. I can say with confidence that Chris and I know a little more about today's energy markets than your average "oil expert."

You see, Chris is a well-regarded energy expert who has designed and built dozens of solar energy projects. This is a guy who understands the energy market inside and out... from energy's worst problems to its brightest solutions. And for the last decade, Chris and I have preached that investing is key to solving the world's energy challenges... Investments in a multitude of energy practices and technologies that will wean us away from our dependence on oil.

But we're also quick to point out that this blueprint for success also includes the economic harvesting of remaining and unconventional oil sources.

And again, in addition to full access to our web site, along with your free copy of Profit From the Peak, the moment a new trade is bought or sold you'll immediately be sent an email and, if you elect it, the RSS feed (We'll show you how to quickly and painlessly set up your RSS feed). The reason we're doing this is - we want everybody to be on equal footing. Our trades could arrive any time of the day, from 9am to 8pm.

So it's imperative you follow the instructions. This way you'll get the trade... and you'll have ample time to execute it.

By now, I'm sure you're wondering...

How Much Does Pure Energy Trader Cost?

Truth is, this level of service is highly specialized. And the countless hours it takes Ian to find, study, and recommend just one of the trades he uncovers - as you can imagine - takes a lot of time, expertise, and resources.

He doesn't draw top stocks from a hat. He's not paid by other companies to recommend one over the other. His secret is that he's an insomniac, sleeping just three hours a night.

The rest of the time, when other traders and researchers rest, spend time with their family, and take vacations, he's intently focusing on the latest news, studying the markets, and developing high-ranking contacts.

That is, however, precisely what it takes in order to hold a track record as clean as Ian's... a portfolio that scores investors like you the greatest energy trades the market has to offer.

Now, I've seen other "experts" billing themselves out for several thousand dollars a day - and their trading advice can't tread water next to the winners Ian shows you on a weekly basis.

That being said, I wouldn't feel the least big guilty for charging as high as $5,000 a year for a membership to his advisory.

But I'm not going to go anywhere near that.

In fact, the normal membership price is $1,500 a year.

Pure Energy Trader's Bottleneck Bull-Market Special Pricing

If you sign on to the Pure Energy Trader today, you can save a full 33%, and join for just $999 this year.

I know for many of you $999 is a big lump of money to take down, even considering that many of you have made hundreds of thousands of dollars following our advice.

So here's the deal. We're also offering a quarterly bill program. If you choose that method, you'll be charged $275 every three months.

It's as easy as we can make it to get you on board.

Please keep in mind - we're capping Pure Energy Trader at 2,000 investors.

In addition, we want to make sure you're 100% satisfied. So, if for any reason you're unhappy with Pure Energy Trader, you can get a full refund at any time before the end of the first month of your membership.

After that, the refund is prorated.

But you have to act now. We fully expect every last seat to be taken in the next few days!

So if you're committed to capturing the rebounding energy sector's biggest profits, please do so quickly.

The World's Most Profitable Gold Investment

The biggest gold rush in world history has just begun.

It will be remembered as the most profitable gold event... ever.

But this gold rush will be different than any of its predecessors.

It won't take place on a remote desert plateau... or in a frontier mountain range. And you don't need to be a grizzled prospector to get in on the action, I promise you.

No, the biggest gold rush in history is about to take place on Wall Street. And right now is the perfect time to act because...

We Have Just Entered the Final and Most Profitable Stage of the Gold Bull Market

During this stage, speculative mania buying will curve gold prices higher into a blistering parabolic spike.

And fortunately for us, a new investment vehicle is now available in the market...

...One that allows investors to retain the historic safety of gold and yield double the monthly profit!

It is without a doubt the world's most profitable gold investment, for reasons you'll understand shortly.

But before I get into this new gold vehicle, it's important to first understand why a rapid, near-vertical increase in gold prices is coming soon, and how...

Gold could go over $5,000 an ounce!

You see, to get an idea of what to expect in the future, we always look to the past.

During the great gold bull market of the 1970s, the average monthly gold price increased from under $35 to over $675 an ounce... representing a 1,833% gain.

If today's gold bull market makes similar moves forward, the average monthly gold price could skyrocket well past $5,000 an ounce.

Gold at $5,000 an ounce may seem like a stretch, especially considering the metal hasn't had too much strength over $1,000.

Nevertheless, $5,000 gold is absolutely possible. And it's very simple to understand once you know...

How a Gold Bull Market Works

It's simple. Every major gold bull market in modern history has consisted of three main stages:

1. Currency Deflation Stage
2. Investment Demand Stage
3. Mania Stage

During these three stages, gold prices typically rise in a parabolic upswing, which ultimately results in a sharp, skyrocketing price spike. (Take a look at the 1970s gold bull market chart above, as an example of this phenomenon.)

So far in today's gold bull market, we've seen evidence of the first two stages...

1. During the first stage of a gold bull market, prices increase because of currency devaluation.

In this bull market, a dramatic drop in the value of the U.S. dollar against other world currencies has lifted gold prices over the past 8 years. This devaluation is evident in the 42% drop of the U.S. Dollar Index between the summer of 2001 and spring 2008.

The U.S. dollar is expected to continue falling as the nation continues to dig itself deeper and deeper into debt, which will ultimately lead to inflation and result in higher gold prices.

2. In the second stage, gold prices continue to grow due to increasing investment demand.

Attracted by the modest gains of the first currency devaluation stage of the gold bull market, investors begin to buy gold as an investment, which further snowballs the price of gold higher. And with the introduction of the popular gold ETFs - and similar products - investment demand has had incredible strength since the beginning of this gold bull market, growing in terms of both tonnage and dollar demand.

The first and second stages of a gold bull market generally return considerable gains. In fact, gold prices in this bull market have increased as much as 306%.

3. But it's the third and final stage of a gold bull market that can turn everyday investors into instant millionaires. It's what I like to call...

Gold's Lucrative Final Act: The Mania Stage

There's no rush like a gold rush, and speculative mania buying can kindle an inferno of popular greed that rivals that of the Conquistador's legendary lust for gold.

During the third and final stage of a gold bull market, demand from a massive surge of gold investment finally turns gold's parabolic upswing into a blistering price spike.

We saw a similar price spike during the 1970s gold bull market when investment demand spiked gold prices over 200% in a matter of weeks... leaving a trail of nouveau-riche investors in the wake.

Make no mistake. The speculative mania investment stage is coming. And here's the proof...

Total world gold demand increased significantly during 2008 compared to the previous year. Meanwhile, total world gold supply continued to drop, leaving a deficit in the gold supply and demand market worth $6.74 trillion!

This kind supply/demand imbalance is typical during the final stage of a gold bull market. And driving this imbalance is investment demand.

The biggest source of growth in demand for gold, both last quarter and during the year as a whole, was investment.

World identifiable gold investment demand during 2008 increased over 64% compared to the previous year. See for yourself...

Increasing investment demand is key to the final stage of a gold bull market. In fact, it's surging investment demand that will ultimately lead to the coveted speculative mania buying stage and the peak of this gold bull market.

And now is a better time that ever because...

When it comes to safe haven investing, people immediately think about physical assets such as gold, silver, oil, land, real estate.

There is a reason for this: Physical things have intrinsic value. The value of a paper fiat currency, or a stock, can fall to zero. But the value of any physical asset can never fall to zero.

The intrinsic values of physical assets are the reasons why they preserve wealth during times of financial and economic crises.

As a result of the current financial meltdown, all investor classes - from massive central banks to gold bugs who buy bullion on eBay - are beginning to buy more gold at a faster rate than ever.

Gold is traditionally used for wealth preservation.

But fortunately for us, a new investment vehicle is now available in the market... one that allows investors to retain the historic safety of gold and yield double the monthly profit!

A Unique "Double Return" Gold Investment

Earlier this year, one of the world's leading international investment managers launched a new, one-of-a-kind investment vehicle designed to double the monthly return of gold prices.

Mind you, this investment has been all but ignored by media since its launch. Gold, after all, has never been understood or appreciated by the mainstream, despite its historic economic significance.

Let me explain how it works...

For every 1% increase in the price of gold, this new gold investment vehicle delivers a positive 2% return!

There's no investment club to join. You won't have to open a special account to get in on the action. It trades on the NYSE. Plus, it's completely liquid... and easy to add to any stock account you own right now.

Which is why I can't reinforce this notion enough... Now is time you want to be in gold!

The mania buying stage could skyrocket gold prices to previously unthinkable levels...

...Making this new gold investment vehicle a true 'no-brainer.'

How to Get Started Doubling Your Gold Profits

I've just finished putting the final touches on a new research report, "How to Double Your Gold Profits: The World's Only Investment Vehicle Yielding Double the Monthly Return of Gold Prices."

And for a brief time, I'm offering this report free.

All you have to do is take a risk-free trial of my Mining Speculator advisory.

Why Mining Speculator Is a Must-Buy in this Market

Mining Speculator isn't your normal investment advisory. It is, however, the definitive resource for investors seeking profits - and protection - in a gold and precious metals bull market with no end in sight.

It's where investors burned by the financial crisis are now turning... as a safe-haven alternative to the agenda-guided mainstream financial media. Truth is, in our Mining Speculator portfolio, we disqualify 99.9% of the gold, mining and precious metals plays out there. But when we're fully, 100% behind a company, you'll get the trade recommendation in a moment's notice. We tell you what to buy, when to sell, and when to hold... so you can enjoy the greatest gains possible.

And for as little as $25, you can begin receiving my Mining Speculator advisory, in addition to getting a free copy of my new special report, "How To Double Your Gold Profits: The World's Only Investment Vehicle Yielding Double the Monthly Return of Gold Prices."

In Mining Speculator, I tell you what to buy, when to sell, and when to hold... so you can enjoy the greatest gains in the easiest possible manner. In fact, during the precious metals bull market of 2001 - 2007, I gave subscribers an average return of 212% across all of my stock picks.

Once the gold bull market resumes, I plan to give my readers those same gains.

I cannot emphasize this enough. Gold should be a part of every investor's portfolio. And with this kind of offer, there's no reason not to buy gold right now.

 

Shipping Stocks Are Starting to Rebound...

Has every ship run aground? Have all the oceans frozen over? You might think so if you've followed the dramatic tumble of the Baltic Dry Index ― which had at one point fallen 94% from its peak just seven months ago. The index tracks the price to ship dry goods ― everything from corn to cement ― and unless the world suddenly stops eating and building, the odds are this index is ripe for a stunning rebound...that looks already underway.

The Baltic Dry Index isn't a regular best stock index like the S&P 500 or the NASDAQ. It's actually a composite survey of daily shipping prices around the world. And although it doesn't track underlying stocks market indices, its movement does affect almost every shipping company's share price, as it is viewed as a proxy for the overall industry. As the index has plummeted, it has taken the share prices of most shipping companies with it. This provides new investors a chance to capture some of the most appealing yields that we have ever seen.

The BDI's Bubble Trouble

In May 2008, the Baltic Dry Index was riding high. Commodity prices were still on the upswing, and commodity buyers were insensitive to shipping costs. In preparations for the headaches of tighter port security surrounding the Olympics, Chinese companies had stockpiled raw materials, pushing shipping prices even higher. And the U.S. subprime crisis appeared to be contained at its borders ― meaning the rest of the world's trade went on unhampered. On May 20, shipping spot prices hit an all-time high.

No one, not even the shipping companies, considered the May highs sustainable. But few anticipated the perfect storm of downward pressure shipping prices would face over the next few months. How bad has it been? Rates for Capesize ships ― so named because initially their large size prevented them from using the Suez Canal, forcing them to sail around either Cape Horn or the Cape of Good Hope ― that were priced at $230,000 a day in late May have fallen to almost $20,000 a day. The Panamax-class shipping rates have seen a similar trend, tumbling from daily rate quotes of $90,000 a day to about $12,800.

The BDI has fallen more than 90% since its high on May 20, 2008.

There are a number of valid reasons why the Baltic Dry Index should be off its highs. In addition to being grossly overheated just a few months ago, the U.S. subprime mortgage problem blossomed into a full-blown financial crisis and has undoubtedly weighed on economies outside the U.S. When world economies slow down, the demand for shipping also slows. And the speculative bubble in the commodities market also has burst, making commodities buyers more price-sensitive when it comes to shipping.

Short-Term Problems, Near-Term Solutions

Many of the short-term pressures weighing on shipping prices are already showing signs of abating:

* Easing Credit Worries: The worldwide credit crisis that has made it harder for small companies and consumers to borrow money, has also made it harder for dry bulk buyers to get their cargos loaded onto ships. Now, the credit freeze has begun to thaw. Bank-to-bank lending has resumed. Governments around the globe have put up hundreds of billions of dollars to back the world's banking system, and letters of credit appear to be navigating their way through the system again.

* Stabilizing Demand: In an effort to reduce pollution, China shut down hundreds of construction sites, coal-fired power plants, cement factories and chemical manufacturers a month before the Olympics and throughout the games. While this was only a temporary measure, the drop-off in shipping demand made an already nervous sector panic. But the temporary fits and starts from the Beijing Olympics are now long behind us. The Olympic cutbacks were not a real measure of demand any more than the pre-Olympic build up was, and these anomalies are now being seen for what they were.

* Short-Term Feuds and Still-Strong Growth: A tiff between China's steel companies and Brazilian iron ore suppliers, which has resulted in limited shipments of ore between the two countries, had wreaked havoc on the index. This situation has cooled, with Brazilians backing down from the price hikes they were demanding. Bottom line: China will need iron ore and other materials to build out that growth. Brazil and other international suppliers with sell it, then ships will move it.

Generous Yields at Unprecedented Highs

As many of the temporary pressures on the Baltic Dry Index are already starting to ease, it's hard not to believe the BDI has overshot its floor and will soon find a more rational level ― certainly off its unsustainable highs but also above its equally unrealistic lows.

In fact, we're already seeing this. The BDI is more than +20% off its lows ― but still nowhere near a rational level. And as normalcy returns to the index, investors still have a chance to profit from shipping's worst fears. While you can't trade the index itself, almost every shipping stock was pummeled by the fall, and most will follow it up on the rebound.

In the meantime, with many shipping top stocks trading near their 52-week lows, already generous yields are at unprecedented highs. Investors not only have the opportunity to lock in 10%-plus yields with hot stocks like Navios Maritime (NYSE: NM), they have the added potential for share price gains once sanity returns to this sector.

 

Top Stocks Market Trouble In Tokyo

Tokyo reported terrible GDP numbers a few weeks back. The U.S. dollar was spurred by this report, moving 5 whole cents, from 93 and 1/2 to 98 and 3/4. But believe it or not, the news is still working magic in the market.

In short, it initiated a new change in currency relationships. Up until this point in the last several months, any time the U.S. dollar weakened against the pound or euro, it strengthened against the yen, and vice versa. Now the U.S. dollar is taking on all challengers. All three of the other majors weakened together, while the U.S. dollar went on to make new credit crisis highs.            Hot Stocks

However, on Friday of last week, it appeared that the old correlations may have been coming back. The end of the week brought U.S. dollar weakness against the yen, but strength against the euro and pound.

So let's look at the skinny on this dollar/yen relationship a bit more.

It wasn't just last week that brought about a revival in the yen's weakness. Since Jan. 21, the yen has lost 12% against the greenback. That's in only five weeks... a pretty substantial move. On the technical side we saw it put in the infamous double bottom formation. It has moved steadily in favor of the dollar ever since.

The question in my mind is this: While Japan's GDP number was deplorable, it wasn't entirely unexpected, was it? It came at the end of a long line of bad news. Consider that industrial output fell 8.5% in November, 9.8% in December and then 10% in January. Exports dropped a whopping 45% in the last year. Many pundits bemoan the U.S. plight of being a non-manufacturing economy, but Japan's numbers show that manufacturing economies are faring no better than service economies.

But in spite of all this bad news, how has Japan's currency continued its stellar rise, and why now does it appear to be reversing? Have the fundamentals become just too bad to ignore? Or is something else afoot?

Currencies do not rise and fall on the sheer strength or weakness inherent in them or in their economies. They rise and fall because of the factors of supply and demand. The yen was not appreciating because it was the strongest or the surest or the safest. It was driven to these levels simply because the money flows from the long-held carry trade absolutely overwhelmed the market's ability to distribute them quickly enough.         Best Stock Investing

In other words, for years, a popular trade was to borrow yen and use them to buy just about any other currency. Since the yen had an official interest rate of zero, traders could borrow them practically for free. Then they'd use the yen to buy a currency producing a higher rate of interest. The profit came from the appreciation of other currencies against the yen, as well as in the form of the interest rate differential. This is what is commonly called the yen carry, or the carry trade.

Its simplicity made it exceptionally valuable. How could you go wrong? If you can get something for free, and then sell it at any price, you will always make a profit.

But when the housing crisis began to unfold, followed by the credit crunch, traders began to worry that their high-paying interest rate differentials might be in serious trouble. What if the high-paying currency they were holding defaulted? What if the banks started cutting interest rates and they could no longer get that primo return? What if pigs started flying? What if? What if? What if?

And so, the panic began. and traders began "unwinding" (getting out of) their carry positions.

What did this do to the yen?

As you know, all currencies are traded in pairs. That is, you sell one currency then buy another. For the years of the successful carry trade, traders sold the yen to buy other money. In doing so, the yen became less and less valuable the more it was sold. Japan, as an exporting manufacturing economy, was perfectly content for it to be so, as it made their goods cheaper for the rest of the world to buy.

But when panic and fear gripped the market, and traders started to get out of their carry positions, it meant that they were selling everything else and buying back the yen. More buyers meant fewer yen. More demand on less yen meant higher prices. So the yen began appreciating like a rocket, especially against the dollar.

Was it fundamentally more sound? Was it an interest rate acceleration that propelled it? Not at all.

Just as there was no real reason for the U.S. dollar to be at 123.50 during the middle of 2007, there was also no economic rationale for the yen to be at 88.00 either.

As the world was flooded with euros, pounds, Aussies and kiwis, the yen was forced higher and higher. The money flows were essentially a one- way street, and the yen could only go in a single direction: up.           Top Stocks Market

But now that the vast majority of these trades are unwound, and the money flows are subsiding in this trade, the fundamentals are again reasserting themselves.

Japan's economic condition is considerably weaker than that of the United States, and it appears that there is little the country can do about it. Printing money has not worked in the past, and it is not likely to start working now. Perhaps world demand for their goods will increase. It is doubtful, but even so, there is nothing that they can do to alter that factor either. Finally, in a world where no one is buying, trying to change from a manufacturing/exporting economy to an economy that favors domestic consumption does not happen overnight.

 

 

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