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Jun 6, 2009

The Stress Tests Are Out... What Now?

I've got great news...

On Wednesday morning, Bank of America announced they'll only need another $34 billion more from Uncle Sam.

Somehow that's bullish news, according to CEO Ken Lewis.

The truth is, while we're not out of the woods just yet, we are finally starting to see some signs of a slow recovery.

Amex, JP Morgan, and the Bank of New Mellon Corp all got a passing grade on their "stress tests." And to top it off, it seems the Dow's low of 6,600 looks well behind us, and oil prices are starting to charge full steam ahead.

But like I said, we're not in the clear yet.

Want proof?

Just take a look at the sheer number of blockbuster trades that Ian Cooper's made from issuing puts in the Options Trading Pit portfolio recently.

Ian and his team are still cleaning house by safely betting that companies major companies will plummet.

And as far as high-profit trades go, they've been spot on for readers who can stomach the fast-paced world of options.

Of course, not many can.

In fact, over the past several months, we've been getting swamped with emails from investors who crave those rapid, reliable profits, but don't want anything to do with the all-or-nothing world of options.

If that sounds like you, trust meYou can't afford to miss this:

track record

You see, after months of scouring the markets and applying many of his own, unique indicators to qualify worthy options plays for his Options Trading Pit readers, Ian Cooper stumbled across another moneymaking trend so astounding, some of his close friends are already talking about early retirement...

... Those very indicators he uses to uncover the +100% options plays have also been - over and over - pinpointing explosive whole top stocks for 2010 as well.

... Top stocks 2010 that don't quite fit the profile for one of his legendary options trades but still experience share price surges that rapidly and reliably skyrocket upwards of 20% - 50%.

For example, just take a look at the 265% jump that one online gaming software developer made in anticipation of the recent movement to legalize online gaming:

20090507 chart

Then there's the 301% explosion his indicators pointed out from National Coal, after the Dow bottomed in early March:

National Coal chart

And then there's the 182% jackpot he uncovered from, once again, anticipation of online gambling legalization with YouBet:

UBETchart

And those are just a few. Since Ian started following some of his "discarded" top stocks of 2010, he's been finding these opportunities left and right.

For example, earlier today, he raced upstairs to my desk to share with me two natural top gas stocks and one major oil play that those same indicators tell him are about to go absolutely ballistic!

Unfortunately, these - increasingly more common - jackpots don't fit into the scope of his Options Trading Pit... or any other advisory we offer, for that matter.

And that means that, as investors, we're leaving a lot of easy money (3 near-guaranteed winners even as I write this) on the table...

That is, until now.

In fact, I have a very special invitation I'd like to extend your way.

It's a deeply discounted, sneak-peak into a groundbreaking new advisory Ian recently launched called the Pure Asset Trader.

In it, he shares with you the details behind every single one of these explosive trades he's been uncovering... starting with the oil play that he just recommended, which could hand you rapid double (even triple) digit gains in less than a week or two.

And the two natural top gas stocks Ian has been tracking will be recommended in the next two weeks.

One thing you'll notice with Ian's new cutting-edge service is that these powerful trades come from anywhere and everywhere. That's because Ian doesn't like to pigeonhole himself - or you - into any specific sector.

The truth is, at any given moment, somewhere in the market, Ian's indicators are firing on all cylinders about one company or another, whether it be on news, general market trends, overselling, earnings reports, or any of Ian's indicators.

In other words, he's everywhere... but nowhere for too long.

And that's exactly how this unique advisory is geared - for investors like you to take advantage of the scores of rapid-fire gains coming from 2010 top stocks across the market as our economy slowly starts to recover.

Inside of just a few weeks - even in this market - not only could you recoup some of your losses... You could make fortunes without needing to rely on all-or-nothing options trades!

Plus, if you accept this offer right now, I'll show you how you could secure a test run of this $1,495 service for only $199!

Best Stocks For 2010 Could Make You 500% In Two Years

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 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 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...

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.

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.

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 investment 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 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 Quantum Leap of Quantum Computing

The rate of technological change is accelerating.

Yes, I know. It's been said before, but it bears repeating. The reason is that we tend to assume that progress will continue as an upward sloping straight line. It won't, in fact, it will be much more rapid ― even exponential at times.

Think about the changes in computer technology we've seen in the last few years. Computers have been getting cheaper and faster in relatively predictable ways for a while now.

Don't be lulled.

The electronics and computing industries are getting primed for a massive transformation in the years ahead. Quantum technologies that were only theories in scientific journals just a few years ago are being prototyped in labs now. These new components will change the way we live forever. They will also create transformational profit opportunities. If you missed the chance to buy into the computer industry when it was young, this is a second shot.

Currently, the mainstream electronics industry processes data by moving bunches of electrons about in huge batches. Think of the components in your PC as electrical plumbing. Data are usually stored as batches of electrons. Imagine your computer's hard drive as a bunch of very small buckets, some full of water, some not. This will change.

Improved materials technologies from emerging nanosciences are allowing us to replace batches of electrons with the smallest individual unit: the electron. As a result, computers will work at far higher speeds. Additionally, far less electricity will be required to do the same amount of work.

Much of this exciting news is being ignored by the market. It's an unfortunate truth that investors often lose sight of long-term opportunities to create wealth because they get distracted by the short-term noise and news in the markets. When it comes to big transformational technologies, don't worry about timing. The returns that disruptive technologies yield justify getting in early.

Quantum Superposition

One important quantum effect that will be used in future generations of computer technology is "quantum superposition." In a nutshell, this means that a quantum particle can exist in multiple states and everything in between at the same time. This is because a quantum particle, such as an electron, behaves as both a particle and a wave.

Have you heard of the particle wave theory? In practical terms, it means that bizarre and counterintuitive effects occur on very small scales, and they can be harnessed.
 
This "quantum superposition" effect will, for example, utterly transform how we do "computer math." Currently, nearly everything done by computers is done in binary. The smallest piece of information a computer handles, the bit, is either one or zero, something or nothing. A quantum computer, though, would be able to store and work with number systems other than binary.

This means computers would become exponentially more powerful because each "quantum bit" (qubit) could store a much greater range of numbers than the two that binary math restricts us to. Imagine a laptop with the computing power of the world's 10 most powerful supercomputers. Then you begin to grasp the potential of quantum computing.

Decoding Quantum Encryption

Quantum computing also offers the means of making our communications and business transactions far more secure than they are today. Quantum cryptography exploits several remarkable effects of "quantum entanglement." One is the ability to generate pairs of utterly unique and unbreakable keys. Basically, two random but identical particle keys can be created using entanglement. Since reading a quantum particle alters it, any effort to eavesdrop on communication is detected and that communication is either disrupted or ended.

Using this technology, we can create completely secure communications networks. Recently, Toshiba's R&D labs announced the successful testing of quantum cryptography over fiber-optic networks. Austrians were able to send entangled photons between two Spanish islands nearly 90 miles apart.

Spintronics

One of the likeliest quantum technologies to go mainstream is the field of spintronics. This is the exploitation of different electron states. The only property of the electron that we use in electronics now is charge. Electrons, however, have another property called "spin." Because we can change and read this spin, it can be used to compute. Already, the tech giants are investing in this technology. And there's a reason.

I've written a lot about HP's work on memristor technology. Memristors are going to provide the next great leap in computer technology. HP has been making rapid and well publicized advances. It could, in fact, have product on the market next year. This initially concerned me because HP is too big to get us anything close to a memristor pure play.

Fortunately, memristors can be built using techniques other than HP's. My associate Ray Blanco has been poring through patents and tech journals. What he's found is enormously exciting.

Basically, a number of other groups have made similar memristor advances using different technologies. One is based on spintronics. The big question now, however, is not which of these technologies will emerge as the best solution. The question we're looking at today is who will build these new components. Who, in effect, will be the Intel of the future?

 

Patrick Cox will be making his first appearance on the Whiskey Bar panel this year at our annual Agora Financial Investment Symposium. He'll be there along with our other regular Whiskey contributors like Byron King and James Howard Kunstler.

This year is extra special, Shooters, because we're celebrating Ten Years of Reckoning. It's the tenth anniversary of our flagship newsletter The Daily Reckoning (and of the symposium itself) and we mean to make the occasion special.

A Shooter sends this:

Gary,

Keep up the excellent work.  A quick question about the 10-year anniversary gala… Unfortunately, I won't be able to make it (bummer!). Are you planning on making any of the sessions accessible via the internet (can we watch/listen in over Webex)? Send in questions via email? In short, for those of us unable to travel to Vancouver, is there any way to participate?

Thanks for the kind word. Short answer: NO!

Sadly, in order to get all the good stuff ― stock picks, recommendations, analysis and ideas, networking opportunities, and the ineffable joy that is Agora in Vancouver ― you have to be with us in Vancouver.

BUT we will be doing daily email updates and we're considering some real time updates from your roving Whiskey Bar manager via Twitter. We may also post some video clips on YouTube, but if you want to participate, you simply have to be there.

I don't care how you get there. Just get there if you can.

In other news…

Baltimore got edged out of the number one spot.

That's right. Among cities with over 500,000 residents Detroit just barely eked out a victory over Charm City with 37.4 homicides per hundred thousand residents. Baltimore managed only 36.9. We'll get 'em next year!

Traditionally, young black males have been the group most represented in that impressively high murder rate, but that may be changing in Baltimore…

Gangs of black teenagers have taken to attacking white residents and tourists at random in Baltimore's moneyed neighborhoods. A couple of particularly vicious attacks took place just a couple of blocks from your editor's heavily fortified domicile.

I may or may not be inoculated from harm by my race. Hard to call it. This is why I normally only leave the Whiskey bunker to forage for food.

I'll do my best to stay alive and intact over the weekend so we can meet again on Monday.

Jun 5, 2009

Monetizing Debt: the Grandest of Larcenies

"Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation," said Ben Bernanke in response to a question posed by a member of Congress. Then, he added...

"The Federal Reserve will not monetize the debt."

That last sentence has a ring to it. It reminds us of Richard Nixon's "I am not a crook." Surely, it is destined to make its way into the history books, alongside Bill Clinton's "I did not have sex with that woman" and the builder of the Titanic's "even God himself couldn't sink this ship."

Monetizing the debt is precisely what the Fed will do. But it will not do so precisely. Instead, it will act clumsily...reluctantly...incompetently...accidentally...and finally, catastrophically.

That's our prediction, here at The Daily Reckoning. Prove us wrong!

In today's reckoning we describe why you don't have to be an astrologer or an economist (the two are similar...except the astrologers have more professional credibility) to see what is coming.

First, a look at the market. Yesterday, investors seemed to think it over and change their minds. Their first reaction - on Wednesday - to Geithner's reassurances to the Chinese and Bernanke's reassurances to Americans was positive.

"Maybe these guys are on the level, after all," they said to themselves. "Maybe the dollar won't fall apart."

But after 24 hours of deep reflection and heavy drinking they came to their senses: "What was I thinking? Of course they're going to undermine the dollar...what else can they do?"

So yesterday they were back at it - buying assets that are priced in dollars but that move in the opposite direction. The euro went right back to where it was at the beginning of the week, at $1.41. Gold, which had lost $18 on Wednesday, recovered $16 on Thursday. Oil had slipped $2 after Bernanke's comments; yesterday, it gained $2.

Stocks rose too - with the Dow up 79 points.

A friend sent a recent report from analysts with Barclays Bank. Barclays is advising private clients that the "bear market is probably over."

Anything is possible, of course. But for the many reasons we've described in these reckonings we doubt that we've seen the last of this bear. Or the last of this recession. What we've seen so far is merely a classic post-crash bounce. Nothing more.

Which is WHY the Fed will eventually monetize the debt. "Monetizing" debt, by the way, is larceny on the grandest scale. Rather than honestly repaying what it has borrowed, a government merely prints up extra currency and uses it to pay its loans. The debt is "monetized"...transformed into an increase in the money supply, thereby lowering the purchasing power of everybody's savings.

Of course, the Fed will not want to do such a dastardly deed; but it will do it anyway. Even good people do bad things when they get in a jamb. The feds are already in pretty deep...and they're going a lot deeper.

Now over to Ian at The 5 for some news on today's jobs report:

"The U.S. economy shed 'only' 345,000 jobs in May, the Labor Department said this morning. We forecast Wednesday that today's employment gauge would beat expectations, but wow...this number smashed the Street's guess of 520,000. Last month's loss is the smallest since it all hit the fan last September.

"May's number establishes a trend for 2009, too. The jobs scene is far from rosy, but at least it doesn't seem to be getting worse...not yet anyway.

"So 'Buy, buy, buy!' as they say in Cramerica, right? U.S. index futures jumped on the news and the Dow and S&P 500 opened up 1%. And if you aren't the type to be bothered by the fine print, we suggest you slam the buy button too.

"But the details of today's jobs report aren't quite as rosy as the headline number. The unemployment rate rose to 9.4%, notably higher than the expected 9.2%. In other words, the unemployed are not being rehired. While the rate of firings cooled off, the bread line is just getting longer and longer. 9.4% is the highest rate since 1983.

"And it's funny how the dark science of charting works. The chart above would lead you to believe the jobs scene has bottomed...but does this one inspire the same confidence?"

Wanna make sure you get The 5 - in its entirety - sent to your inbox, every Monday through Friday? You can...by becoming a subscriber to one of Agora Financial's paid publications, such as Capital & Crisis. And in the latest report of C&C, you'll discover a little-known way to receive up to three extra paychecks a month...without lifting a finger. It's the perfect way to ensure a constant influx of money, whenever you may need it. Click here for all the info.

And back to why the Fed will monetize the debt:

The European Central Bank came out yesterday and said that its forecasts for the recession were on the low side. Instead of putting total output back 3.5% this year - as it had estimated in March - it now thinks the setback will be between 4% and 5% of GDP.

Unlike Japan's slump of the '90s and '00s, this depression is worldwide. Americans aren't buying like they used to. So, foreigners aren't selling. Everyone gets poorer as expected income and profits disappear...and turn into losses.

Meanwhile, in America, today's jobs report shows that unemployment is still on the rise. People without jobs can't buy stuff - neither the kind of stuff you get at the grocery store...nor the kind of stuff you get from real estate agents. Since they don't buy stuff, manufacturers don't make stuff. And since they don't make stuff, they don't need the stuff that stuff is made of, nor the employees who turn the raw stuff into the finished stuff.

Result: the stuffing gets knocked out of the economy.

Also, while Tim and Ben reassure investors, long bond yields go up. The Chinese have shifted from buying long bonds to buying short bills. This causes the return on bills to go down, but it pushes up yields on the 30-year bond...to which long-term fixed-rate mortgages are calibrated.

Last week, according to Freddie Mac, the average 30-year mortgage had a fixed rate of 4.9%. This week it's 5.27%. At the margin - which is where most people live - this extra cost of financing pinches would-be homeowners. Either they buy a smaller house...or they pay less for it.

It also pinches anyone who needs to refinance - which includes not only sub-prime borrowers, but many others too. MSN Money reports:

"The next group of Americans to lose their homes seemed to have good credit and affordable loans. But those families have been walloped by the recession.

"In the housing market, a lot of prime mortgages are becoming subprime as a new wave of foreclosures begins to hit. Mainstream homeowners - those previously 'safe' borrowers with sound credit who have conservative, fixed-rate mortgages - are getting into trouble at an alarming rate.

"In the first quarter, the percentage of these borrowers who were behind on their mortgages or in foreclosure had doubled from a year earlier, to nearly 6%. For the first time in the housing crisis, these homeowners accounted for the largest share of new foreclosures.

"Job losses are a major reason once-safe borrowers are falling into trouble. With unemployment likely to rise, the problem will only get worse. So the core challenge at the heart of our economic crunch - a poor housing market that infects banks and the whole credit system - is not going away soon. That's bad news for the stock market and the economy in general.

"'A couple of months ago, a lot of people had hoped that the housing collapse was about over,' says money manager and forecaster Gary Shilling, a well-known bear who called the housing problems early in the cycle. 'But it was more hope than reality.'

"Economists call rising delinquencies and foreclosures among prime borrowers the third wave of trouble. The first two waves were housing speculators going bust and subprime borrowers - those with poor credit histories and some version of no-down or low-down adjustable-rate mortgages - getting into trouble.

"Mark Zandi, the chief economist for Moody's Economy.com, calls the third wave a 'significant threat' to the economy. '"It is gathering momentum,' he says. 'The problem is now well beyond subprime and deep into prime.'"

Following this article was a series of comments. One, filed on Wednesday, was particularly interesting:

"This is my world crashing down on me. I own apartments and I rent to poor people. I more than most know what people are experiencing. While my properties are struggling, the income they generate has not dropped significantly to threaten the payment of any loan. Unfortunately, my loans are due this year and I am simply unable to borrow money to replace the loans I am currently servicing successfully. What can I do? All my capital reserves are gone, but effectively, I am losing my job because the banking system and market will not allow me to borrow money. If you bought my property today at the current market rate, your cash on cash return would be over 15%. This type of return in the Atlanta Real Estate market has not been seen in decades. When employment growth rises in Atlanta in 12 to 24 months, the cash on cash return will be over 20%. I probably will not survive. I will lose everything, my house, my business and my savings. I will have to start all over..."

Now, dear reader, we ask you a question: Is a politician from either party willing to stand in front of this man and tell him that interest rates are going up? Or how about telling him that Congress is raising his taxes? Even if the goal were only to balance the budget ten years from now, it would take a permanent, across-the-board tax increase of 60% to do so. (See below...) Would any politician in his right mind vote for such an increase? Ben Bernanke talks about cuts in spending and tax increases. But Bernanke is not up for election. Besides, practically every economist in the country in telling Congress it needs to spend MORE money, not less. Cut spending and increase taxes in a recession? Are you kidding?

We are in a serious, multi-year depression. No increase in taxes and no decrease in spending will be seriously considered until we are out of it. But if it follows the patterns of the past, then genuine, durable healthy growth will probably not return for many years...maybe 5...maybe 10...maybe 20. Long before then the US will have too much debt to carry...let alone pay back. It will have no choice but to "monetize" this debt by means of inflation.

We'll tell you more of the HOW...on Monday.
 
This week brought an entertaining episode. Wall Street's man in Washington, incidentally Secretary of the US Treasury, was sent to Beijing. His mission: to convince the canny Chinese of something that everyone knows is untrue - that US bonds are safe. But if the Americans keep faith with China, it won't be for lack of trying.

Of US government paper China has plenty. Bond holdings alone tote to $768 billion. Other dollar-denominated assets in Chinese hands add another $700 billion or so. Despite this Newcastle in its vault, the US would like China to buy more coal.

But lately, those dollar holdings have done poorly. Thanks, supposedly, to the economic rebound, the dollar has fallen against just about everything. Against gold, it is down 15% in 2009. Against oil, it is off 50%. As for copper, the dollar has lost 65% of its purchasing power. Thirty-year US Treasuries have fallen too - down about 27% since January. A rough guess is that China has lost more than $200 billion so far this year, thanks to the fall of the dollar and US Treasury bonds.

Martin Wolf, in the Financial Times, says these trends are signs of progress. "Rising government bond rates prove policy is working," begins his line of thought. Spreads between corporate bonds and Treasuries are narrowing. Real yields on corporate bonds are falling while yields on Treasuries go up. "Normalization," he calls it; investors now expect inflation instead of extinction.

The rise in inflation expectations is clearly visible in the US bond market, where inflation-indexed bonds are once again selling for substantially higher prices than their non-indexed cousins. Towards the end of '08, the bond market anticipated zero inflation. Now, the latest figures imply a 1.6% positive inflation rate over the next 10 years.

If inflation doesn't show up as forecast it won't be for lack of effort on the part of Mr. Geithner and his friends. The US deficit for the current year is $1.84 trillion. Every two months, the feds need to borrow nearly the equivalent of the previous entire year's record- breaking deficit. And if private lenders balk, the Fed stands ready to raise its own hand at the next auction of US government debt.

The Chinese are worried. They've put a lot of eggs in the basket now being carried by Geithner, Bernanke et al. What if Team America isn't as surefooted as it claims?

"It will be helpful if Mr. Geithner can show us some arithmetic," said Mr. Yu Yongding, described as a former advisor to the central bank of China.

Mr. Geithner showed up with numbers, of course. From a deficit of 12% of GDP, the US plans to take its deficit down to 3%, he said. But when he delivered this solemn fib at the University of Beijing the students laughed at him.

American Secretaries of the Treasury are not used to being laughed at. Almost 40 years ago, a US Treasury Secretary - John Connally - expressed the imperial view: "it may be our currency, but it's your problem." Even after the crack up in the fall of '08, the US continued in the fantasy that it could lay off as much paper on the foreigners as it wanted.

The aforementioned Mr. Yu Yongding addressed this point directly:

"I wish to tell the U.S. government: 'Don't be complacent and think there isn't any alternative for China to buy your bills and bonds... The euro is an alternative. And there are lots of raw materials we can still buy.'"

China is hedging its bets, buying assets that don't have dollar signs on them. Along with shrewd speculators, they're worrying about a government-fueled melt-up in prices. These anxieties - not a return to 'normalcy' - are sending the price of gold back towards $1,000 and the dollar towards $1.50 per euro.

Inflation, like cholesterol, comes in two forms - good and bad. The good inflation raises asset prices. The bad inflation raises consumer prices. No one complains when prices of houses and stock are rising. But when toothpaste and bread begin to follow, an alarum goes up. Soon, central banks are taking action to stop it - raising interest rates and credit standards. But this time it is different. Both types of inflation are welcome. Harvard economist Ken Rogoff says he advocates 6 percent inflation "for at least a couple of years." It would make it easier for debtors to repay loans, he says. Economist John Taylor, of the eponymous 'Taylor rule' gives another reason inflation would be well met. He points out that running a balanced US federal budget - even 10 years in the future - would require a permanent 60% tax increase. "A 60% tax hike won't happen," he writes. "The government will attempt to inflate the problem away instead." Even Warren Buffett told CNBC that the likely solution to America's problem was inflation.

Yu countered: "You should not try to inflate away your debt burden..." But that is exactly what the US is trying to do. So far, it's not good faith that protects China's dollar assets. It's a depression...and incapacity. The Geithner team tries to create inflation, but hasn't yet got the hang of it. Give them time.

Stocks Cannot Hold Modest Gains

After a string of upside weeks, we finally had a down week. There's nothing wrong with that. After 30% gains and more, getting a little downside is no problem at all. In fact, it's healthy. We're going to make some money from the downside, and thus the downside becomes a positive. We always take whatever the market gives, whether it's upside or downside, we're going to take it. And with the market primed to give us downside, that is exactly what we want to look for. We like to look for those easy setups where we can just walk up and pick the money up off the ground. If we can do that, that's great. We did that with the Potash, the POT play this week; the money was there on the ground, we stepped up and picked it up. Got to love that.

As for Friday, it was really what we expected and what we wanted. We had that big down day on Wednesday -- it's expiration week -- and sometimes you get the big moves mid-week, and that's what we had. Friday was rather calm. It was up, at first, as we thought it would be, and then it came back. We didn't really know if it was going to come back Friday or not. As top stocks market went ahead and declined that gave us a chance to move in and get into some downside positions, to position ourselves for next week. We got a little Amazon, we got a little Apple, we got some of the Q's (QQQQ) to the downside to get ready for more of the downside move. We were getting in position for what we think will be a down Monday as the downside resumes. We also have some continuing upside plays with some pulling back, some continuing higher. CME was down Friday, but it was a great mover for us this week. As a matter of fact, this week we had a bunch of good moves that went to the upside, even when the market was going down. We had Potash. We had CME. We had Amazon to the downside; nothing wrong with going with the market direction. That was nice. We doubled up on some more of Amazon puts Friday. We took some Priceline gain off the table as retail was having some issues. Digital River gave us some more gains. That's the way we do it. We let them go up, we take some gains as they go up, taking money off the table as key moves are made. But we still get bigger gains, because we're leaving some on the table as we go. As long as the stock remains in its trend, whether it's up or down or sideways, we can make money by just letting some of the position run for free after we bank some nice gain on strong surges. That's what we've been doing, and it pays off; we had a good week that way.

As for Friday in specific, we had a lot of economic data. We had the CPI. It was basically in line, but the core was hotter (no food and energy), and it was hotter at 0.3% versus the 0.2% expected. We had the New York PMI. It was much better at -4.55. Still contracting, as is all the economic data, but it was a lot better than the -14 prior, and the -12 expected and showing that little bit of improvement. Again, slowing on the way down, slowing the fall into the abyss. Indeed, it no longer looks like we're going to fall in the abyss. Just the ditch. That can hurt too, but not as bad as never finding the bottom.

CME (CME Group, Inc.)
Company Profile
Once more the market was seeing if anyone was watching. The action was toppy with many top stocks for 2010 rolling over for a needed correction, but the market was again laying some money on the ground to the upside and seeing if anyone was going to take it. We have made some great money on CME and it is one of those top stocks of 2010 that is a 'watch,' i.e. it is on our short list of top stocks for 2010 that we always look at no matter what. Why? Because it can run like a deer to the upside or fall like a rock, ripping off big chunks of real estate when it does. When it sets up, get ready.

We just played CME off of the 50 day EMA, and thus were watching as it tested that surge. Ironically, on Monday it showed a perfect doji at the 10 day EMA, the set up we love. We SHOULD have been anticipating this after the action to end the prior week and been ready to enter when we saw the doji Monday, but sometimes, just sometimes, the market is very generous: it laid the money on the ground and it gave us a second chance to pick it up.

We put CME on the report Monday night. Tuesday CME gapped higher and did not come back to test much at all on the session. That didn't give us much to work with, but we did like that the stock was holding over the 200 day SMA in the last hour. We moved in with options given the stock price (near $250). We bought June $250 strike call options for $16.20 when we saw that CME was going to hold the 200 day SMA and on strong volume into the close. Given the gap and the less than optimal entry point, that was important for continued upside as it showed enough strength on the break to continue the move.

It was. CME blasted higher another $15.60 on Wednesday, building some excellent gain into our options. Thursday CME surged higher again, gapping out of the gates and running toward $300. It started to stall after another big surge, putting the 3-day move at over $50. For any stock showing three strong, outsized gains back to back, it is time to take some money off the table. We sold some of our options for $37.20, netting $21/option or 126% gain in less than three days. Did I mention CME runs like a deer? Very nice way to end a week in a down market, and all we did was take what the market was giving.

We also had some other great plays for the week. Once more we ran to the POT, or Potash, picking it up as it completed a test of its late April break higher. It moved laterally for a week, tested the 10 day EMA on an intraday move and started to bounce. That was our signal to get in and we jumped in with some stock and September $95 Strike call options at $11.50. We also sold some May puts for $2.80. POT blasted higher again, surging 13% through Thursday. We sold some of our options for $18, banking a 56% gain. We sold some top stocks for an 11.5% gain, and on Friday those puts we sold expired worthless and we kept the entire $2.80 per share. We tripled up on POT and our cup overflowed. Better than the pot, eh?

STOCK SPLIT PLAY

Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the best stocks 2010 from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stocks splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays.

IDXX (Idexx Labs--$40.80; -0.21; optionable): Diagnostic substances
Company Profile
After Hours: $40.80
EARNINGS: 07/24/2009
STATUS: Test 200 day SMA. Broke out of a rolling trading range in late March and rallied nicely on into early May. It paused some at the 200 day SMA (39.61) on the way up, then bolted to 44 before fading back last week. It held over the 200 day and indeed closed just over the 18 day EMA Wednesday to Friday. Sitting right on top of the late April lateral move below the 200 day, a level that also matches the mid-October lows. Looking for that support to hold this week on some more testing and then for IDXX to rebound and continue the breakout move. Very nice.
Volume: 463.325K Avg Volume: 575.965K
BUY POINT: $41.65 Volume=700K Target=$47.55 Stop=$39.39
POSITION: UID GH - July $40c (54 delta) &/or Stock

MON (Monsanto--$89.95; -0.08; optionable): Ag chemicals
Company Profile
After Hours: $89.95
EARNINGS: 06/24/2009
STATUS: Test breakout. MON was on the report recently, but it gapped away and required us to be patient and wait to see how it reacted to the gap. MON has held the gap, now moving laterally, testing the late March peak on the lows and rebounding. Very solid action as ag top stocks 2010 were stronger all week (see POT). Likely to continue testing laterally for a few sessions, and when it finishes and makes the break higher we move in. Nice higher high after the November low shows plenty of support for MON. Just spent $97 for a gallon of the super concentrated Round Up. Don't they know there is a recession going on? Doesn't seem to matter, huh?
Volume: 6.211M Avg Volume: 6.853M
BUY POINT: $91.04 Volume=8M Target=$103.45 Stop=$87.21
POSITION: MON GU - July $90c (52 delta) &/or Stock

Have You Heard of “Blue-Sheeting”?

Two of our good friends and colleagues (Tom Dyson and Brian Hunt) just told us about a Chinese small stock that's getting ready to take off...

What's so fascinating isn't so much that this stock has a track record of periodically shooting up by as much as 320-times in value...

What's really interesting (to us at least)...is how Tom and Brian have been finding small top stocks 2010 like this one.

Typically, I stay behind-the-scenes...

But this idea is too good - and too important on a personal level - not to share it with you myself.

My name is Brian Hunt.

I'm the Editor in Chief of Stansberry & Associates Investment Research.

Late last year, my colleague, Tom Dyson, and I discovered a new and unconventional way to generate unusually high returns in this extremely volatile market.

(So far, we've had an 83% success rate.)

We expect that this radical technique will continue to perform at this level for approximately the next 12-18 months.

Then, like all great investment strategies, the time will pass.

That is why, on June 16th, we will begin publishing our insights for the general public.

I'm writing you today because from now until then, we're offering loyal readers first crack at membership � at a substantially reduced price, which we will never offer again.

Because our new research involves many of the smallest and most illiquid securities on the stock exchange...

We're limiting charter membership to what will most likely be a small group of folks.

But I'm getting ahead of myself...

Let me show you what's going on, why we're so excited at S&A Research... and what's in it for you...

Introducing "BLUE SHEETING"

As I mentioned, about 9 months ago, my colleague, Tom Dyson, and I discovered a radically new way to make money in the stock market...

We call it "BLUE SHEETING."

In more than 12 years of active trading, I've never seen anything quite like it.

When this strategy works, it's not uncommon for you to see returns of 1,000-3,000% (or more):

Phoenix Companies (PNX) shot up 1,000% in 2 months.

Diedrich Coffee (DDRX) jumped 6,533% in less than 2 months.

Sealy Corp (ZZ) rose 927% in 65 days.

So far, our "BLUE SHEETING" strategy has worked 83% of the time.

I'll show you the full details of our preliminary testing a bit later...

But first...

What's so radically different about what we do?


While most analysts look at things like earnings statements, balance sheets, insider buying and cash flow statements...

Tom and I examine a completely different set of data:

It's called a BLUE SHEET.

Several decades ago � before the Internet came along � secretaries at financial clearing firms would type these data-sets onto pale blue forms.

Hence the name, "Blue Sheets."

This is not a Form 4, Form 13, or any other financial document you might be familiar with. And it has nothing at all to do with "insider buying" or the government either.

So what's so important about BLUE SHEETS?

The best way to show you is through an example...

You Could Have Seen this 936% Jump Coming from a Mile Away


Recently, shares of a tiny paper company called Boise Inc. (BZ) shot up 936% in just under 2 months.

Most investors didn't have the slightest clue this was coming...

After all, Boise Inc. manufactures newsprint � the large rolls of paper used by the Washington Post, the Seattle Examiner, and other newspaper publishers.

Now is not a good time to be doing anything related to the newspaper business.

Just last month, Boise Inc. announced it was shutting down half its news-printing capacity at one plant.

That's pretty much the only news of any kind to come from this tiny company in several months.

So you can probably see why many people who follow the markets were surprised to see shares of Boise Inc. take off like a surface-to-air missile.

While this stock blindsided most investors... you could have seen it getting ready to move.

You could have seen this rise far enough in advance to have made a tremendous amount of money...

Here, take a look:


On March 10th, we were able to access certain figures in the company's Blue Sheet "stock buyer" data, indicating a very big upward move was on the way.

Boise's stock began to rise on March 12th.

Had you invested $5,000 then... you'd be sitting on $48,000 today.

What in the world would cause a tiny paper stock in Boise, Idaho to rise 936% in two months?

I don't know. And to be quite candid, I don't care!


You see, in the short term, top stocks for 2010 rise and fall for a variety of reasons... many of which you and I can never know.

Perhaps corporate insiders are buying or selling... Maybe a pension fund just took a position. Maybe Jim Cramer moved a stock simply by saying the word "buy."

Who knows? And really, who cares?

The only thing Tom and I care about... the only thing worth knowing... is whether a certain stock is going to rise � and when.

That's where BLUE SHEETS come in...

These data have let us know � with an unusually high degree of probability (83%) � when a stock was going to rise... and when it was going to fall...

Stock stories can be inflated. Earnings figures can be fudged. And, unfortunately, balance sheets get warped all the time.

In our experience, BLUE SHEET data is the only information we can truly rely on to provide an objective reading...

Here, let me show you what I mean...

The Market ALWAYS Leads the News


Many investors � even fellow newsletter editors � think they can beat the market by following the right financial news stories...

Find a big stock story before everyone else does, and you get rich. Find out the negative news stories before the market prices that information in... and you get to keep your money.

That's how it works... Right?

That's what most investors and analysts believe.

They think that by looking at a company's debt, cash, EBITDA, and price-to-book ratio... that they'll find a stock worthy of buying...

How many times have you bought an "undervalued" stock, only to wait...

And wait...

While the stock keeps falling in value...

The truth is, I don't give a damn what a stock is "worth." Like most investors I really care only about whether the stock is going to go up or down after I buy it.

That's what makes our approach quite different.

Tom and I don't play the waiting game. If a stock doesn't have the potential to move fast and far, we just won't recommend it. And we never EVER pick a stock on the basis of news... or earnings... or "valuation," or anything like that.

Quite the opposite...

The Secret Behind those Seemingly Inexplicable Financial Events


I'm sure you've heard how the U.S. automotive industry has been getting hammered recently...

General Motors � America's biggest automaker � just laid-off 60,000 workers. They plan to close 1,100 dealerships... And the Federal Government just saved them from total bankruptcy.

Chrysler just filed its Chapter 11 bankruptcy papers. And Ford is fighting to turn things around.

Simply put, things look really bad for the U.S. Auto industry.

Yet � in the past two months � shares of tiny automotive suppliers have been soaring:

Tenneco Inc (TEN) has risen up 901%.

ArvinMeritor (ARM) has risen 811%.

TRW Automotive Holdings (TRW) has risen 597%.


Why has this been happening?

Why have these tiny auto suppliers been multiplying in value... while every piece of conventional evidence suggests they should be falling?

Well, it's probably a combination of factors... but no one can explain it with any certainty...

But there's the thing...

IT DOESN'T REALLY MATTER.

You see, these moves were laid out and described to the day... if you knew how to decipher the appropriate Blue Sheet data.

And all you had to do to see large returns from these tiny top stocks for 2010 was to have the capability to find and interpret the right Blue Sheet data.

And you could have known about it � far enough in advance to make a lot of money...

HERE:
 
HERE:
AND HERE:


Had you taken an early $5,000 stake in Tenneco alone, you could have made as much as $45,000.

Sounds nice...

But is it really that easy?

For you, it could be...

But as you probably guessed, these BLUE SHEETS don't just spit out ticker symbols and buy dates for anyone who knows about them. Tom and I had to devise a strategy for accessing and interpreting these things...

Here's how the whole thing works...

What We Discovered...


Tom and I discovered that we could use BLUE SHEET data to determine � with high probability � which top stocks investors would be buying tomorrow... and which top stocks they would be selling... several weeks before the moves actually happened.

Why is this important?

Because, in the short term, that's the ONLY thing that determines whether a stock will rise or fall in value.

It doesn't matter if a stock is "cheap." It doesn't matter if the insiders are buying. It doesn't matter if earnings are up or if they're down.

If people want a stock, it goes up.

If investors don't want a stock, it goes down.

It's that simple.

Remember Boise Inc. � the paper company I told you about earlier?

It shot up in value because thousands of new investors wanted shares.

Like I said before, no one knew exactly WHY all of these people suddenly wanted shares of an obscure paper company with ailing operations.

But you could have spotted the sudden flare-up in demand and capitalized on it.

Same thing with the auto-suppliers I mentioned.

Tenneco, ArvinMeritor, TRW Auto Holdings... they all shot up because an influx of new investors wanted shares.

Again, no one knows why investors do the things they do... but Blue Sheet data have let us know with extremely high probability what U.S. investors were going to do... right before they did it.

The point is, using Blue Sheet data, it is legal and extremely profitable for us to spot these flare-ups in demand � and you can capitalize on them, in a very rational and dispassionate way...

So what are "BLUE SHEETS" exactly?

Let me explain...

How Tom and I Have Been Able to Find Out Which Stocks Investors Would Buy Tomorrow


If you've never heard of Blue Sheets before, I'm not at all surprised...

To most people, the amount of raw data they contain is simply overwhelming...

You see, every time you buy or sell a stock anywhere in the United States... your information goes to what's called a clearing firm.

Clearing firms act as middlemen between the stock market and your broker.

These firms receive every conceivable detail on every security you buy and sell, the number of shares you purchase, the ticker symbol... along with a bunch of additional information you probably wouldn't like to know.

Once the market closes, each clearing firm is required by Federal regulators to send the details on every market transaction to the EBS System. The EBS System is basically a vast Federal Government information warehouse for the U.S. stock market.

It's short for "Electronic Blue Sheets" System. Financial insiders just call them "BLUE SHEETS."

Every trade... no matter if it's Jane Smith, the small time market player in Santa Fe, New Mexico... or Steve Cohen, the big shot hedge fund manager in Manhattan...

They all get logged in the EBS System.

What does the Electronic Blue Sheet system tell us about what investors are likely to be buying tomorrow?

That brings me to Dr.S...

First, "Dr. S." Sends Us an Email


More than 3.9 billion stock market transactions take place on the U.S. stock market each day.

So, as you can probably imagine, at the end of every trading day, the EBS System contains a mind-boggling amount of information. Simply too much for one person � or any team of people � to sift through.

That's why last year Tom and I reached out to a gentleman whom we'll refer to as Dr. S.

"Dr. S" is a computer programmer with a PhD in applied mathematics..

When he's not helping us out, he does contracting work for 2 of the 20 largest Fortune 500 companies in America.

What does Dr. S. help us out with?

Processing the billions of data bytes embedded in the BLUE SHEETS.

Once a day, he searches through the BLUE SHEET info � over 3.9 billion stock transactions from all across the world � and filters it through a powerful computer program he personally created.

THIS PROGRAM IS AVAILABLE TO NO ONE ELSE IN THE WORLD.

It compares and examines that data over the previous 60 trading sessions.

And while a lot of this information is useful and interesting for historical comparisons...

We really only care about one set of numbers, which he analyzes from the daily Blue Sheet reports...

That is: WHAT INVESTORS WILL LIKELY BE BUYING TOMORROW... AND WHAT THEY WILL LIKELY BE SELLING.

Because remember...

The more investors who buy a stock, the higher its share price climbs...

That's the ONLY thing that ultimately moves a stock's share price.

And if you can find out which top stocks investors will be piling into the most... you can make a killing in the stock market.

I know, this might be hard to visualize. After all, it is counter-intuitive to how 99% of the population invests...

So here, take a look...

Find Out Where Investors Will Likely Put their Money � Even Before they Know Themselves


If you knew investors were about to pour millions of dollars into a certain stock...

Then you could invest before they did... and make a lot of money by riding that stock all the way up...

That's the idea behind our BLUE SHEETING strategy...

Incredibly, this allows you (in many cases) to find out where investors are likely to put their money, even before they know themselves...

Crazy, I know...

But just consider what happened recently to a tiny wireless telecomm company called FiberTower Corporation (FTWR)...

Get a 72-Hour Head-Start on Everyone Else...

On March 2nd, BLUE SHEET data indicated that investors would likely pile into a tiny stock called FiberTower Corporation (FTWR)...

Why?

Again, who knows... and who cares!

Let the TV show pundits, blogs, and newspapers try to explain why top stocks of 2010 go up. Frankly, I really don't care. It doesn't really matter.

All I want to do is know which stocks are going up... BEFORE they make their move.

What matters in the case of FiberTower Corporation is that on March 5th � roughly three days after we received the full details on the Blue Sheets � investors started loading up on shares...

In just a few short days, the usual number of FiberTower investors nearly tripled...

And by May 11, the stock � as a direct result of all the new demand � had jumped by 757%.

Had you known how to follow the right numbers on the BLUE SHEETS, you could have gotten a 72-hour head-start on the crowd... and turned a $5,000 stake into $37,850.

How is this possible?

How can you know which top stocks other investors are likely to pile into, even before they do?

Here's the short (and perhaps unpleasant) answer:

When it comes to investing, people are extremely predictable...

In psychology, this theory is known as "social proof." In short, it says that when lots of people start doing something ― wearing a particular type of shoe, going to a particular movie, or listening to a certain song ― it must be the right thing to do.

Well, in the investment world, it works much the same way...

When more people get interested in a particular stock, the higher the price will go.

What's incredible is that we've been able to consistently use Blue Sheet data to find out exactly which top stocks of 2010 have been generating the most investor interest... and which stocks would make the biggest moves.

It requires access to a little-known and seldom-used set of data, a high-powered computer, and a very talented computer analyst to figure out what it all means...

But the results are well worth the effort.

For example...

On March 9, shares of a tiny insurer called Phoenix Companies (PNX) began to take off...

In less than 2 months, they rocketed from 21 cents a share to as much as $2.31.

A 1,000% rise...

We were able to see this move 5 days before the stock began to rise...

How?

The BLUE SHEETS indicated investors would likely be piling into the stock...

From April 21st to April 30th, Uranium Resources (URRE) jumped 219%.

We were able to see this move 96 hours in advance...

How?

The BLUE SHEETS indicated waves of new investors would likely be pouring into the stock...

Dr. S's data analysis has found dozens of these opportunities so far...

How have we known which ones to get into and when?

Let me explain...

A Rapidly Closing Window of Opportunity


I know this whole scenario probably seems a bit unusual...

But very little this year has fit the norm. In fact, that's what put us on the path to make this breakthrough in the first place...

Late last year, as the markets continued to plummet, Tom Dyson and I began taking a very close look at the smallest and most illiquid securities on the stock market...

I'm talking about companies like Boise Inc. � top stocks worth less than $200 million in the stock market...

Why would we look at the most volatile area of the stock market... at the very worst time in stock market history?

Because we knew the bloodbath would eventually end...

And when it did...

We wanted to make sure we could provide our subscribers with an effective strategy for what would inevitably follow...

An 18-Month Explosion

You see, at the end of every major market downturn, small stocks move faster than any other investment in the world...

In 1975, as the markets turned around, small stocks averaged a 78.43% return.

In 2003, as the markets recovered from the tech-inspired bear market of 2001, small stocks outpaced all others by a nearly two-to-one margin.

Today, it's happening again...

Just in the last several months, small stocks have been making some incredible moves:

Ivanhoe Mines (IVN) has risen 361%.

Orion Marine Group (ORN) has risen 431%.

Cott Corp (COT), a soda pop maker, has risen 604%.>

Sealy Corp (ZZ), a bed maker, has jumped 927%.

Virgin Mobile USA (VM) has jumped 487%.

How long do these revitalization periods typically last?

The exact time depends of course on the severity of the preceding crash...

But typically anywhere from 3-7 years...

HOWEVER, the real thrust of the small stock explosion � the truly spectacular part � lasts only for a short while:

According to our calculations, small cap stocks will likely experience a rapid, hyperactive period of growth lasting anywhere from 18 to 24 months

This could last longer... or it could happen in less time.

Again, it's only an estimate.

Why does this happen?


Why do tiny top stocks 2010 rise faster and higher than everything else?

Two reasons...

After a big market downturn, businesses must adapt if they hope to survive and prosper...

Charles Darwin once said the fittest species are not the ones who are the smartest or strongest...

Rather, they're the ones MOST RESPONSIVE TO CHANGE.

It's the same in business...

The companies most capable of retrenching and adapting to the new credit situation and the new (and battered) economy are the smallest companies. They had the least to lose... and now they have the most to gain...

What's the second reason?

Basic mathematics...

Recently, shares of a business software company called Workstream (WSTM) rose 1,850% in just a few months.

For a much larger business software company such as Google to grow by the same amount...

It would have to become a $2.2 trillion dollar company (as valued on the stock market) � the largest publicly traded entity in the history of the world. It would have to consume the equivalent of ExxonMobil, Pfizer, Microsoft, Yahoo, and Chevron combined.. and even then it would still fall short.

But the point is this:

You have a limited period of time to grab as much cash as you possibly can from the stock market.

We're looking straight in the eye of a rare � and potentially very profitable � market anomaly... and now we have an effective strategy to capitalize on it.

That's exactly what we found with our Blue Sheeting breakthrough.

And with Dr. S's assistance, we've conceived, built, tested and fine-tuned a research advisory to help you capture these opportunities...

We're calling it Penny Trends.

On June 16, 2009, we're going public with our new strategy... and marketing this product to a broader audience.

So for the next few days, we're offering you first crack � the chance to get in before the official commercial launch of Penny Trends.

..For much less (55%) than what the general public will have to pay.

We will NEVER offer this price again...

Before I give you the details... and show you how to get started...

Perhaps you're wondering...


"If small stocks are going to outperform all other investments, then why shouldn't I just pick a few on my own?"

Of course you could do that...

But keep in mind, the averages I showed you are based on the overall performance of several hundred small stocks.

If you have enough capital to invest in that many top stocks of 2010, then go ahead...

You probably don't need our research anyway...

What Tom and I are proposing here is a radical new way to potentially get very rich by making a series of small and calculated moves in the market over the next year or so...

We're not fund managers. We're not trying to beat any standard benchmarks...

Nor are we advocating you hold any of these securities longer than several months.

If any of the tiny stocks we recommend aren't meeting our unusually high standards for performance, then we'll recommend you let them go.

For instance, just last month, we recommended selling a tiny lumber company called BlueLinx... even though it had risen 11% in about a month...

Most analysts would be thrilled to see a stock rise 11% in a year, let alone one month...

So why did we suggest cutting it loose?

Because that's not fast enough for us...

Not even close.

Penny Trends is a trading research service. We will not suffer any slow-moving laggards in our portfolio...

Since we began testing our new strategy, we've made 12 recommendations.

As of May 20, 2009, ten have either been closed out as winners or have gone up in value.

That's an 83% winning percentage.

Plus, we made two trial recommendations when the markets were still crashing this past September.

One stock � Questcor Pharmaceuticals (QCOR) � was trading at $5.53/share. By December 8, 2008, shares had raced to $9.54/share.

That's a 73% return during the worst market collapse since 1987.

That same day � Sept. 10 � we recommended buying Emergent BioSolutions, Inc. (EBS).

3 months later, the DOW, S&P 500 and the NASDAQ had all fallen by 30% or more.

Shares of EBS had risen 57.4%.

To Tom and myself, this was validation that our BLUE SHEETING strategy truly worked.

If we could pick two of the only 2010 top stocks to rise during a severe market crash... we had high hopes for what our strategy could do when the penny stock market began to take off...

So, what can you expect in the months ahead? And how can you get started right away?

I'll explain everything in a minute. But first, I wanted to tell you about one more aspect of this situation.

This BLUE SHEET Feeding Frenzy Could Turn Every $5k into $300,000 (or more)


I've already told you how BLUE SHEETS work... and about how we analyze them to find out what stocks investors will likely be buying...

I've also told you why we use them to track and capitalize on the smallest securities on the stock market...

But there's one more benefit to the BLUE SHEET situation, and it may be the best part of the whole thing...

When Tom and I receive a short list of BLUE SHEET prospects from Dr. S...

One of the things we look for are "clusters" of top stocks for 2010:

Groups of companies that operate in the same industry, sector, or niche...

The more unusual the better, too...

For instance, a couple of months ago, we received a short list from Dr. S.

On it were 4 coffee companies:

Starbucks (SBUX)

Green Mountain Coffee Roasters (GMCR)

Coffee Holding Company (JVA)

Diedrich Coffee (DDRX)

According to the BLUE SHEET data, U.S. investors had suddenly grown very interested in coffee (of all things)...

And they were about to start pouring money into the four coffee stocks listed above.

Why?

Again, who knows, who cares...

It didn't really matter.

What mattered is that investors from all over the world THOUGHT something VERY big was about to happen in the coffee market.

Remember, "social proof" is probably the strongest force in the entire financial market.

Something so big, that to them it didn't really matter which coffee stock they invested in...

They were going to act on it, one way or another...

And you could have known about their interest early enough to make a lot of money...

That's what the BLUE SHEETS data tells us: Not why people are prepared to invest. Rather, WHERE and WHEN.

In the days that followed, waves of new investors poured into coffee stocks...

As a direct result:

Starbucks jumped 34%.

Green Mountain Coffee Roasters climbed 95%.

Coffee Holding Company rose 517%.

And Diedrich Coffee � a tiny California Coffee manufacturer � rose a whopping 6,533%.

There was nothing especially appealing about the fundamentals of these top stocks for 2010.

But the more people who loaded up on shares of coffee companies... the higher their share prices jumped...

The higher their share prices jumped, the more attention coffee stocks got in the mainstream press...

The more attention coffee stocks received in the mainstream press... the more people wanted to buy shares...

And so on and so forth...

Eventually, so many people were loading into tiny stocks like Diedrich, that its share price had jumped 63-fold.

Crazy, I know...

But that's why we love finding "clusters" of top stocks for 2010...

Do you see how this works?

The more of the same kind of stock investors want, the better. Because when the herd piles into an entire sector, it pushes a stock's share price (and your investment) up higher than it would ordinarily move on its own.

We don't care about the big stocks like Starbucks and Green Mountain Coffee...

We care that investors want coffee stocks so bad... that they're willing to buy anything coffee-related...

Why?

Because that kind of insane demand will push tiny little stocks like Diedrich through the roof...

These "clusters" appear on our BLUE SHEET lists more often than you might think...

And in some pretty strange sectors too...

Recently, we've seen heavy "clustering" in everything from Internet top stocks 2010 and aerospace companies to home furnishing retailers...

For instance, a couple months ago, we saw a flurry of BLUE SHEET activity indicating strong interest in car rental companies...

Boom, boom, boom...

One blue sheet after another...

In companies like Hertz, Avis Budget, and Dollar Thrifty Automotive.

Why?

Again, who knows, who cares...

What mattered is that investors REALLY had a sudden and strong desire for car rental companies... and were about to pony up a lot of cash to satisfy it.

Hertz � the largest company of the cluster � jumped 385%.

The other two companies jumped even higher. Avis Budget jumped 1,097% in two months...

And Dollar Thrifty Automotive jumped 779%.

These companies are so tiny and excite-able...

You could breathe on your computer screen and they'd jump 200% or 300%...

If this kind of trading is too opportunistic for you, I understand.

And that's okay. As it turns out, we can only afford to take a small group of folks along for the ride...

Enrollment: Limited

Because our new Penny Trends research deals with highly illiquid, extremely sensitive equities, we're limiting enrollment to a very small group of readers...

Ultimately, many folks will be excluded.

So to keep things fair, here's what we're doing...

Right now, we are opening this service only to current readers. We will DEFINITELY open it up to the rest of the investment public as of June 16th... and may do so even sooner, depending on what happens in the markets, and the response from our subscriber base.

If there are any charter subscriptions to Penny Trends still available by June 16th...

Then we'll offer them to a broader audience, at the full price.

But we doubt we'll reach that point.

What's the price?

One full year of Penny Trends will cost $2,000.

If you respond to this offer right away, you can lock in a ridiculously low price of $900.

We will never offer this price again.

We'll ask everyone else to pay 122% more when we go public with our new strategy on June 16 (if there are still spots left).

Why are we making this offer?

Because we are confident this service can help improve your net worth. I truly believe you could make an absolute killing in the market from Tom and my trading recommendations for at least the next 12 months.

As an independent financial publisher, the success of our business depends on how satisfied you are with our research.

If you like our work and think our investing strategy is right for you, then you stick with us and S&A continues growing as a business.

Sign up today � claim your charter membership for the limited time we're offering it.

You'll have 90 DAYS to decide whether our research is right for you. If for whatever reason you want to cancel your subscription in the first ninety days, just let us know. We'll give you a full refund (minus a 10% refund fee).

You see, we want to avoid "tire-kickers" - the folks who sign up without any intention of paying. This costs us a small fortune in overhead expenses, especially when we offer special discounts ($1,100 off) like this one.

Here's what you'll receive as a Penny Trends charter subscriber:

Penny Trends Trading Primer: This special, members-only report represents your TRADING BIBLE. Read it right away, before you review anything else.

You'll learn the full details on this unique situation... including the secrets behind our BLUE SHEETING strategy.

You'll also learn a trading secret called "R-1." This is a very simple, but incredibly important rule we ask that you follow when EXITING our recommended positions.

You see, a big part of our investment strategy � and a great deal of your success � depends on your ability to remain disciplined and dispassionate. When we issue a buy recommendation, it's okay of course if you choose not to invest. But if you do, please do not drag your feet. These are fast moving issues. A day or two can make all the difference in the world. Likewise, when we email you to exit a play, it's important that you don't sit on it.

Penny Trends Trading Alerts: � Every Tuesday at 6 p.m, Tom and I will email you our play of the week, why we're recommending you make it, and every important detail you'll need to know. In these reports, you'll also receive a detailed summary of what you should do with any positions we're currently holding.

Waxman-Markey Whacks Industry

The so-called Waxman-Markey bill snaking its way through the greasy halls of Congress looks likes the most expensive thing to hit the economy since the financial crisis began. Even the normally mild- mannered Wall Street Journal called it "one of the most ambitious efforts to re-engineer American social and economic behavior in decades, presenting risks and opportunities for a wide array of businesses from Silicon Valley to the coal fields of the Appalachians."

First off, the stated objective of cutting carbon emissions by 83% by 2050 will go down in history as outrageous - akin to when Who drummer Keith Moon drove his Lincoln Continental into the pool at the Holiday Inn. I think members of Congress must be smoking the same thing Moon was.

To show you how patently ridiculous such a goal is, I turn to Questar's CEO - a man with the unfortunate name of Keith Rattie. Questar is an oil and gas company. Rattie is an engineer. He has been in the business since the 1970s. He walks us through the basic math in a speech he made at Utah Valley University on April 2 called "Energy Myths and Realities." Rattie uses Utah as an example:

"Utah's carbon footprint today is about 66 million tons per year. Our population is 2.6 million. You divide those two numbers and the average Utahan today has a carbon footprint of about 25 tons per year. An 80% reduction in Utah's carbon footprint by 2050 implies 66 million tons today to about 13 million tons per year by 2050. If Utah's population continues to grow at 2% per year, by 2050, there will be about 6 million people living in our state. So 13 million tons divided by 6 million people equals 2.2 tons per person per year.

"Question: When was the last time Utah's carbon footprint was as low as 2.2 tons per person? Answer: Not since Brigham Young and the Mormon pioneers first entered the Wasatch Valley and declared, 'This is the place.'"

You can extend this math over the whole country - a growing mass of 300 million people. To meet the Waxman-Markey bill's goals would mean we have to go back to a carbon footprint about as big as the Pilgrims' at Plymouth Rock circa 1620.

So I think the bill is absurd. I think it is also a great blow to what is left of American industry. But who cares what I think? As the great Jeffers wrote, "Be angry at the sun for setting/ If these things anger you." This is the way the world works. Politicians do dumb things. We have to play the ball where it is. And that means we have to figure out who wins and who loses.

Here are some thoughts along those lines...

Agriculture. Agriculture, for whatever reasons, is exempt from the new rules. So farmers don't have to worry about those manure pools out back or the flatulent cows emitting methane all over God's green meadows. Those big tractors? Burn up that diesel!

Agriculture is a winner by virtue of not losing, like a hockey team that skates to a tie.

Steel. Big loser. U.S Steel, AK Steel and even foreign steel companies with US operations all get a big kick in the family jewels on this one. Steelmaking emits all kinds of carbon dioxide. The worst-case scenario here is that the US simply won't be making steel at some point in the future. The plants will all go to Brazil. China is already the biggest steel producer in the world. Now we just handed the country a bunch of new business.

Avoid big steel in the US.

Utilities. Mostly losers. Under the bill, utilities will have to get 12% of their electricity from renewable sources. That means they are going to spend money buying windmills and solar panels. For some of the coal utilities, this is bad news - even though they caught a break when the government made a change to let coal have carbon permits for free to start off with. Gas utilities are better off, as they emit less carbon, but since coal gets some free carbon allowances upfront, their advantage will not be as big as I made out in my letter to you a month ago. (See, the problem with writing about potential legislation is the rules change every week.)

Still, I'd avoid coal producers or coal utilities. They wear big targets on their backs and can't do much about it, except spend a lot of money. Bad for shareholders. There may be some very good ideas on the picks-and-shovel angle for coal, though. For example, a number of companies will sell equipment to clean up coal. And of course, the solar and wind guys are big winners.

Oil refiners. Losers. This is an industry in which it is hard to make money most of the time as it is. Now, under the new bill, refineries are really screwed. Basically, they are on the hook for about 44% of US carbon emissions. They would be among the biggest buyers of carbon emission allowances. I think with one stroke of the pen, the US government just made the US refining industry that much smaller. Lots of these older refineries will just have to close. US imports for gasoline will rise.

I think the refinery industry already sees the writing on the wall. This is one reason why Valero, the biggest US refinery, has been quick to get into the politically favored ethanol business. It's also expanding overseas.

Avoid the refineries.

Trading desks. Winners. It figures. As if the government doesn't help financial firms enough, it is going to hand them a nice tomato in trading carbon credits. The head of Morgan Stanley's US emission trading desk said: "Carbon, while relatively small, is a critical piece of our commodities offering." So some financial firms with trading desks in carbon get a nice little payday.

To sum up, this is only the beginning. At the end of the day, this obsession with carbon footprints means that Americans are going to have to pay a lot more for products that use fossil fuels. It means we are going to pay a lot more for energy. Obama and his crew can draw up whatever fantasies they want, but they can't repeal the laws of economics, which, like forces of nature, win out every time.

Exclusive Glimpse at the Next Google

On May 15, 2009, the Internet changed forever. Did you miss it?

The widespread acceptance of the Internet has lead to a monumental shift in the way we do almost everything. Communication now happens instantly across thousands of miles, e-commerce has generated billions of dollars for companies like Amazon.com and eBay, and, with the advent of search technologies like Google, the planet's information is at our fingertips.

But in spite of these advances, something was missing…

After all, why should you have to scour pages and pages of Google results to find out which country is the world's fifth smallest exporter? How is it that that sort of factual information isn't readily available? In the past, search technologies had a big limitation ― they required you to ask a question that's already been asked and answered. But on May 15, with the public release of Wolfram Alpha, that all changed.

Wolfram Alpha is a computational knowledge engine. What that means is it answers factual questions based on structured databases that catalogue information. And it's creating quite a stir among technology experts.

"[Wolfram Alpha] doesn't simply return documents that (might) contain the answers, like Google does, and it isn't just a giant database of knowledge, like Wikipedia. It doesn't simply parse natural language and then use that to retrieve documents… Instead, Wolfram Alpha actually computes the answers to a wide range of questions," said Nova Spivak in an article posted on Twine, a social networking site.

So, if you really do want to know what the fifth smallest exporter nation is, or the average salary of a school bus driver, or what 20/200 vision looks like, with Wolfram Alpha the answer is truly only one click away…without having to rummage through search results.

Not a Search Engine

The most critical thing to remember about Wolfram Alpha is that it's not a search engine ― it's an answer engine. While searching for "penny stocks for 2010" will yield you 5.7 million results on Google, Wolfram Alpha won't return a single web page. Where Wolfram shines is in answering factual questions (asking subjective questions like "which car is cooler" won't get you much success).

So, enter something like "What is the circulation of the Wall Street Journal?" or "What is the density of milk?" and you'll get your answer (2.012 million readers and 242 g/cup respectively).

The most important thing about Wolfram Alpha isn't what it's capable of right now, it's how the unique way it handles data makes big advances possible in the future. "Where Google is a system for finding things that we as a civilization collectively publish, Wolfram Alpha is for computing answers to questions about what we as a civilization collectively know. It's the next step in the distribution of knowledge and intelligence around the world ― a new leap in the intelligence of our collective 'Global Brain.' And like any big next-step, Wolfram Alpha works in a new way ― it computes answers instead of just looking them up," explains Spivak.

Putting Wolfram Alpha to Work for You

And as an investor, Wolfram Alpha has some abilities that transcend the potential of its technologies. With this platform, you can instantly get a slew of financial information on a stock just by typing its ticker into Wolfram's engine.

You can also make interesting computations on the fly, like this chart of GM revenues divided by Ford's revenues:

If you're interested in options, bonds, or currencies, Wolfram Alpha also has the ability to make complex calculations (like the value of a straddle option) instantly for you.

Keeping an Eye on the Future

There's little question that the work the folks at Wolfram Research are doing on Wolfram Alpha is going to change the way we interact with data. I think it's clear that those changes are going to trickle down to make data more available to investors ― and they're also going to fuel huge growth for the handful of companies who are working on computational engine technologies. Visit wolframalpha.com to check out this amazing new technology for yourself.

Unfortunately for us Wolfram Research is a privately held company, but there are other plays in the field. We'll keep you posted as they make their moves.

Our Heroine, Angela Merkel

Angela is a genius. Tim is a schmuck. That's what we took away from yesterday's news.

As near as we can make out, Tim Geithner's trip to Beijing was, at best, a draw. He told his soothing lies. China listened. The markets reacted favorably.

Stocks fell...with the Dow down 99 points. Gold was down too - $18. And oil lost $2, to close at $66.

But the dollar went up - to $1.41 per euro.

His goal was to bluff and bamboozle the world's investors - notably China - into believing that the US had its finances under control. Once we're out of this mess, he told China's top man, we're going straight. No more binges of EZ credit and wild government spending. We just need a little more of that old time medicine...just one more time...to get us through this dark night of economic downturn. But once the sun comes up and the economy is back on the road to recovery, trust me on this, America is going to balance its budget, foreswear Quantitative Easing forever, and join AA. No kidding. Cross your heart and hope to die.

But some habits are hard to break. The habit of getting something for nothing is one of them. Spending money someone else earned is like eating a big slice of Black Forest cake and watching someone across the table get fat. You're likely to ask for seconds.

Americans are in the habit of spending huge amounts of money...with no intention of ever paying it back. Consumers did it in the '09s and '00s. Now the feds are doing it. The federal deficit for this year alone is four times last year's record. The official US debt is exploding. Bill Gross says it will be 100% of US GDP within 5 years. Our guess is that it will reach that level even sooner.

At 100% of GDP...even mainstream economists believe the situation will be irreversible...interest payments will be more than the US can afford. At that point, forced to borrow more and more just to keep up with the interest, the system will go into a Ponzi-scheme endgame. You can protect your investments from the inevitable fallout with seven super shields, available here.

"Our expectation is the government won't be able to exit" from its deficit spending positions, said Gross in an interview on Bloomberg Radio. The programs "will be semi-permanent positions on their balance sheets."

Once you go down that road, it's hard - maybe impossible - to come back. The US won't be able to pay off its debt...and it won't be able to unload GM. Nor will the Federal Reserve be able to sell its holding of bonds onto the open market - without causing yields to rise.

Even Ben Bernanke says that "long-term deficits threaten the financial stability" of the nation.

As we've pointed out many times, the problem is more political than financial. The bums in Washington could still straighten up - if they wanted to. We've already told them how they could bring the deficits...and the economic downturn...under control. But they're not about to take our suggestions. Instead, they're "gonna have fun, fun, fun until Daddy takes the T-bird away..."

Daddy China, that is. The Middle Kingdom. The Red Menace. Now, the leader of the bond vigilantes.

Remember the bond vigilantes? They are supposed to keep a lookout for inflation. And when they see it increasing, they come riding into town guns ablazing...they sell bonds and force up yields, thus bringing inflation back under control.

Inflation rates and bond yields have generally been going downhill for the last 26 years...so the old vigilantes have retired. But now China seems to be strapping on its six guns. Are you prepared for when this bubble gets shot out? If not, learn how to profit during the burst by participating in the anti-stock market, available here.

According to the press reports of the showdown in Beijing, it sounds as though Geithner diverted attention from the main issue - at least for a while. There's some blah blah about China paying a bigger role in the IMF, for example, and more blah blah about cooperation between the US and China on financial matters.

Someone actually asked the Treasury Secretary why he was talking about involving China in the IMF. His answer: "I just see it as the necessary evolution." We won't stop to wonder what a 'necessary evolution' is. Because the whole IMF discussion was irrelevant and pointless blah blah.

The real story is the last thing Geithner wanted to talk about. Partly because he doesn't understand it. And partly because he can't say anything about it that would help. China has a lot of money with pictures of dead US presidents on it. It's worried that those green presidents may soon by not only dead, but worthless.

"If the US can find a way to protect China's assets," said Yu Yongding, going right to the bottom line, "America's standing here will increase."

If not...well...that's what we're going to find out.

But first, a quick briefing on the latest news from Ian in Baltimore...

"Washington is on track to issue more than $5 trillion in new debt over the next 18 months," begins Ian Mathias in today's issue of The 5 Min. Forecast. "Total interest payments on government debt are plotted to exceed $800 billion in the next 10 years, up almost five-fold from 2009. That's if long bond yields stay under 5%, as the Congressional Budget Office forecasts. Every one percentage point higher, says Harvard economist Kenneth Rogoff, will cost the U.S. government an extra $170 billion annually.

"Perhaps our only saving grace; the whole western world has bought into America's economic school of thought.
 
"'The Fed can only manipulate interest rates so far,' notes our currency trader Bill Jenkins. 'Then the market takes over. Our Treasury bonds are becoming a greater and greater risk to people who buy and hold them. Of course, basic market theory holds that to assume greater risk going forward, one must have a higher rate of return. So no matter what the Fed "dictates" by lowering rates, they are on their way up!'"

Ian's entire daily email brief is free to subscribers to our paid publications, including Byron King's elite service Energy & Scarcity Investor, available here.

And now, we return to Bill in Big Ben's hometown...

How much of what goes on is just blah...blah...blah...just people talking?

Probably 90%. People come to think what they must think when they must think it. Then they blah...blah...blah to convince each other that they're right.

But what really matters are the deep, long patterns...patterns of history that no one can control and few take the trouble to try to understand.

Bill Gross: "I think it is important to recognize that General Motors is a canary in this country's economic coal mine; a forerunner for what's to come for the broader economy. Their mistakes have resembled this nation's mistakes; their problems will be our future problems. If the US and General Motors have similar flaws and indeed symbiotic fates, they appear to be conjoined primarily by the un-competitiveness of their existing labor cost structures and the onerous burden of their future healthcare and pension liabilities. Perhaps the most significant comparison between GM and the US economy lies in the recognition of enormous unfunded liabilities in healthcare and pensions. Reportedly $1,500 of every GM car sold in the dealer showrooms goes to pay for current and future health benefits of existing and retired workers, a sum totaling nearly $60 billion. The total future healthcare liability for all US citizens can be measured in the tens of trillions."

Our heroine, Angela Merkel, made the front-page news yesterday. She stood up against almost every mainstream economist, politician, and central banker in the world - and gave them all hell.

"What other central banks have been doing must be reversed. I am very skeptical about the extent of the Fed's actions and the way the Bank of England has carved its own little line in Europe," she said at a conference in Berlin.

"Even the European Central Bank has somewhat bowed to international pressure with its purchase of covered bonds.

"We must return to independent and sensible monetary policies, otherwise we will be back to where we are now in 10 years' time."

You go girl!

"This lady is currently the only person among all of our mighty and famous whom ordinary taxpayers in the western world can look to in order to hope for any protection of their interests," says a letter writer to the Financial Times.

Of course, the professional economists and the earnest press all replied with the typical blah, blah, blah...

"Ms. Merkel's intervention may be a political ploy and will probably come to nothing," says the Financial Times editorial page. "But it is, nonetheless, harmful..."

Bloomberg reports:

"Ben Bernanke, the chairman of the United States Federal Reserve, said Wednesday that he "respectfully disagreed" with Angela Merkel, the German chancellor, about her recent criticism of efforts by the Fed and other central banks to stabilize Wall Street and the banking system.

"The US and the global economies, including Germany, have faced an extraordinary combination of a financial crisis not seen since the Great Depression, plus a very serious downturn," Mr. Bernanke told lawmakers Wednesday morning at a House Budget Committee hearing, after being asked to respond to the chancellor's remarks. "In that context, I think that strong action on both the fiscal and monetary sides is justified."

"I am comfortable with the policy action the Federal Reserve has taken," Mr. Bernanke said Wednesday. "We are comfortable we can exit from those policies at the appropriate time without inflationary consequences."

Ha! That's the question. Like Bill Gross, we don't think the US can get out of its inflation-causing positions. It won't want to act too soon - that's the lesson Bernanke thinks he learned from the Japanese. And then, when it finally does act, it will be too late. It may want to unwind its positions by then, but the market winds will be against it. Bond prices will be falling - inflation will be responsible for that. The feds won't want to dump more bonds onto a falling market.

Then, traders - especially the same Wall Street institutions that they are subsidizing - will take advantage of them. In effect, the feds will have a massive short position in bond yields. When yields rise, they will have to cover...and shrewd traders all over the world will know it. They'll stick it to them...selling bonds ahead of the feds' massive selling.

Finally, the feds will be hung out to dry...like Long Term Capital Management, but with no one to bail them out.

Six Easy Ways to Lock in Steady Income Checks

I can show you six easy ways to lock in steady income checks for the rest of your life.

This is just one of the three reports you'll find in the full "Plan B Retirement Library" I want to send you. The whole set is yours right now, at no charge. That's right… I'm offering it to you free.

Just follow the simple steps at the end of this letter so you can download it immediately…

A new Financial Times/Harris Poll found that 59% of Americans are more concerned over the safety of their retirement income than they were this time last year. And for good reason…

The Wall Street Journal found that 401(k) managers are now starting to freeze individual plans. Meaning if you wanted to take a portion of your savings out ahead of time, you wouldn't be allowed to.

In some cases, even if you were at retirement age, you still wouldn't be allowed access to your own money.

This is a scary situation if you paid into a 401(k). You aren't even allowed to take out your own money ― even if you were laid off and needed to. Meanwhile, the values of these accounts continue to fall as the market stagnates

Suppose you could collect up to $120,000 or more in work-free "paychecks" per year, every single year... for the rest of your life.

On average, you could get these checks every 12 days.

For as long as you need them... at any age.

And you can even pass this steady stream of annual cash on to your spouse, your children, even your grandchildren. In fact many of America's richest families already do exactly that.

Wouldn't that go a long way toward helping you forget about the special treatment those Wall Street jerks are lapping up, right about now?

And here's the thing... even though this is easy to do... so few people know about this right now. Although I'm willing to bet that's about to change, and quickly...

The Best "Little-Talked-About" Lifetime Income Secret I've Ever Come Across

Let me start by saying that, even though we're smack in the middle of the most devastating market shakedown since the 1930s, this is easily the best time in history for you to hear about this "little-talked-about" secret.

How so?

For one thing, these "Plan B Pensions" I'd like to reveal to you have a long and proven track record over time. But even little-known ability to completely outclass conventional fixed-benefit pension plans.

Just take a look at the comparison in this chart...

As you can see, "Plan B Pensions" give you many, many times more options for rebalancing your portfolio in a shifting market than you'll see in either the classic plans or more modern versions, like the 401(k) approach.

What's more, unlike those better-known approaches, with a "Plan B Pension," you'll never butt your head against age limits, withdrawal penalties or participation restrictions.

It's also automatic.

Once you set up your "Plan B Pension," it starts running itself.

What else? Even now... you can start getting your income "paychecks" doing this as often as every 12 days, starting with the next payout date on March 14, 2009.

In fact, in the free copy of The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life I'll send you, I can show you six different "Plan B Pension" programs you're invited to join right now.

I'm not personally affiliated with any of them. But after a lot of research and analysis ― all of which I'll share with you ― these six moves are easily the best "Plan B" opportunities you'll find on the market today.

And by the way, you don't need a lot of money to get started.

You can start some of these "Plan B Pension" programs with as little as $10.

How does that sound?

And once you're set up, you could collect as many as 38 "Plan B Pension paychecks" over the next 12 months alone... with more of the same every year to come.

The checks keep coming for as long as you need them.

You can even get "matched" gains with these plans... much like a typical 401(k) plan... but without having to work a single day for the companies that will pay into your account.

Some of these "plans" even reward you with fat discounts on the top stocks fo 2010 you've chosen, well below what others pay to own the same shares on the open market.

In itself, that's like getting an instant gain on the day you buy shares. It's also a special "perk" reserved only for members of these "plans."

What's more...

You Can Collect "Plan B Pension" Checks as Often as Every 12 Days

Even if you just stick with the six "Plan B Pension" opportunities I'll reveal to you... over the next five minutes... that alone could start you off with checks as frequent as every 12 days.

Let me show you more of these opportunities and you could start collecting even more often... and with even greater results. I'm ready to give you my research right now.

In fact, I'll send you the details on the six "Plan B Pension" moves I just mentioned at no charge. Just as soon as you give me your permission. Details on that in just a moment.

But first, let's take an even closer look at how doing this ― using a "Plan B Pension" ― can give anyone an advantage of the much more common moves most of us are used to.

Take, for instance, the classic "defined-benefit" pension plan.

You know how these work. Or at least, you do if you've got a good memory. Because, you see, these same classic company pensions ― given out like golden parachutes to parents and grandparents ― have all but disappeared today.

In just the 10 years from 1994�2004, the total number of defined-benefit pension plans fell by half ― from 59,000 to just 28,000. Today that number is even lower, with more old-school pensions set to get wiped out over the rest of 2009.

The idea of getting a "fixed-benefit" check for life was great. But a benefit that disappears when you need it is no benefit at all! Anyone who worked years for the promise of a classic pension got rooked. And now a lot of these people face hard times ahead.

The same is true if you were "duped" into accepting the modern-day alternative, the so-called 401(k). You know these plans all too well, I'm sure.

About 30 years ago, companies came up with 401(k) plans because they seemed like a great way to slash exposure to classic pension obligations... while giving employees a chance to manage their own retirements.

Guess what happened.

Today, top economists are calling 401(k) plans a "failed experiment." And The Wall Street Journal recently reported that today's credit crunch has already wiped out over $2 trillion in these 401(k) accounts alone ― with more big slippage to come!

Over 60% of Americans depend on 401(k) plans for retirement. Many have seen them lopped in half, with little time left to make up the lost ground.

What's more, with these more common kinds of plans, you can easily get stuck putting your eggs in only one basket, if you've worked with only one employer. Or two or three, at the most, if you've put in the years at more than one job.

That's not at all the case with a "Plan B Pension."

First of all, "Plan B Pensions" can move with you the day you get started. They're yours to control and yours to draw from whenever and wherever you like. You control the size of the checks. You control how many you get. You control how fast the wealth pile grows.

With no limits based on your age, whom you work for or how many of these programs you'd like to tap at one time. There are over 1,020 of these "Plan B Pension" plans in America.

You can enroll in as many of them as you like.

All at once or switching between them until you find ones you prefer.

It's literally up to you. And I can help you choose the best possible ones to follow, starting with the six "Plan B Pension" opportunities I'm ready to name for you at the end of this letter.

You can collect "retirement paychecks" not just from one company... but from as many companies as you like... even the ones you've never worked for a single day in your life.

This is a "work-free" strategy. Except for the work you'll do to set it up ― which is only about as much as it takes to set up a bank account.

It's really that simple. Even though doing this now could give you astounding, life-lasting results.

Here's something else...

How "Plan B Pensions" Can Double Your Wealth

Forbes reported a study...

In other words, "Plan B Pension" helped double the size of those gains over time.

Despite the '87 market bust... the S&L banking crisis and first Bush recession... the currency crash of '97 and the dot-com bubble... Sept. 11 and the start of this most recent real estate bust...

What's more, the best of these "Plan B Pension" programs just keep on paying straight through the current credit crunch. With checks that could be landing in your accounts right now.

And unlike typical pensions or 401(k)s, "Plan B Pensions" don't quit working for you when you retire. That is, you can keep putting money in and taking it out as you like.

Growing it, tweaking it, even spending it... as you see fit.

There's no penalty for early withdrawal.

And no age or employment restriction when you get in or out.

Start now, and even with just the six special moves I've promised to show you, you can already start collecting a "Plan B Pension" payout as often as every 12 days.

Plus, with many of these "Plan B Pension" plans, you can also...

Collect an Instant "Matching" Bonus With Each Payout

One big draw on 401(k) programs is supposed to be the "matching" dollars some companies throw in when employees use the plans to set money aside.

When it works, it's a great benefit. But right now, cash-strapped companies have started slashing those "matching" benefits too. Again, a benefit you don't get... is no benefit at all.

The thing is, "Plan B Pensions" also offer your own kind of "matching." Because many of the 1,020 "plans" you can choose from "match" your gains by as much as 10%... with each regular payout.

This can be like "free money"... piled up on top of what you're already making.

Why would any "Plan B Pension" operator want to give you a bonus out his own pocket? Simple. When you participate in these "plans," the companies that back them get lots of benefits too.

A more stable share price. Long-term shareholder loyalty. A reliable pool of capital. A blue-chip reputation and market respectability. The list could go on.

And in exchange for that loyalty and stability... especially when we're looking at unpredictable markets that could last for years to come... they're willing to pay out of their massive, tucked-away cash piles to "thank" you for staying on board.

Maybe you're thinking only a few lucky insiders or elite market players can wiggle their way onto these "Plan B Pension" payrolls. But anyone can do this. Just by taking the steps I'll show you to get on board.

It works at any age or income level. With starting amounts as little as $10. And work-free, meaning you don't have to work for or even be directly associated with any of these companies in any other way to participate.

Some Americans quietly use this "personal pension" to beef up the regular retirement pensions they already collect... others use it to quit working and retire well before 65... still more use it to replace typical sponsored retirement strategies completely, while "personal pension" incomes as high as $120,000 and higher... for as long as they desire.

Kim Kundra collected $11,611 in one month. And the same again 30 days later. And then two checks, each for nearly $12,000 over the next eight weeks after that.

Gary Malina's "personal pension" so far placed checks worth $22,919 into his account ― not once but twice this year, along with at least two more checks, each worth more than $21,500.

Paul Meure's last monthly "personal pension paycheck" gave him $16,074.

As of October, just one of the companies in Mike Pressman's "personal pension" had already paid him $65,269.

Larry Piero's latest "personal pension paycheck" clocked in at just under $26,993. And that's only one of several he'll collect this year.

John Harrington just collected $16,336 on one of his "personal pension paychecks." Tom Skane took in $33,920 all in one go. And Gerald Amoss clocked in with $42,052.

And in each case, these amounts are just a small glimpse of the totals they'll collect this year... even after everything that's already happened on Wall Street.

There's zero limit on how many of these income streams you lock in at once...

Two, three... a dozen.

It's really up to you to mix and match them to your liking. And the door is open to you, once you know how to enroll. Get set up now and you could start receiving checks immediately.

(For the six opportunities I'll show you, that next payout date is March 14, 2009).

The Ultimate Retirement Recovery Plan

Before you start jumping to conclusions, don't think that "Plan B Pensions" have anything to do with the risky bond investing or measly T-Bill returns.

Nor do I want you to get it into your head that we're talking about tinkering with money markets, low-paying CDs, risking options, or questionable insurance annuity strategies.

"Plan B Pensions" have nothing to do with these.

Instead, you're looking at more than 1,020 of these special "Plan B Pension" ways to directly draw income "paychecks" with the blessing of some of the biggest, most cash-rich and reliable companies in America. And over 600 of these dividend-compounding programs can also offer you the accelerated "instant matching" gains we've talked about.

Sure, not all "Plan B Pension" opportunities are right for everybody.

That's why I want to help you get started by sending you my full research on the six carefully selected "Plan B" moves that I've mentioned. You'll find all six detailed in my new report, called The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life.

This is just one of the three reports you'll find in the full "Plan B Retirement Library" I want to send you. The whole set is yours right now, at no charge. I'm offering it to you free.

Just tell me where you'd like it mailed... or even better, follow the simple steps at the end of this letter so you can download it immediately, minutes from right now.

The first payout you can qualify for is due to come out very soon, and you can keep on drawing more checks as quickly as every 12 days after that, on average.

All told, the moves you'll read about in the report can total up to 38 checks this year... and each year that you decide to continue with what you'll read in my report.

Based on what I'll show you, you can do this without big risks. Without losing sleep over Wall Street catastrophes. Without giving yourself over to failed government retirement programs. And without breaking any rules or stepping on anybody's toes.

The companies who want to pay you are just as eager for you to do this as you are to try it. And everything you need to decide for yourself, you'll find in your free copy of The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life.

I'll show you how to send for it in just a moment.

But first...

The Lifelong Income Secret That Couldn't Have Come at a Better Time

If you still think the "old school" plans will still deliver on their promises, just take another look at the wasted landscape of today's American financial scene...

Across America, thousands of old school pensions have gone belly up. And the Pension Benefit Guaranty Corp ― the government agency that insures those retirements ― has already slipped over $14 billion in the red. And this was before the stock market plunged!

401(k) plans, of course, aren't insured at all. With more than $2 trillion in those retirement accounts already gone, it's not looking good. That money could simply be erased forever.

Meanwhile, D.C. bureaucrats continue to blow hundreds of billions more on one ill-planned bailout after another... while decimating the future spending power of every nickel you set aside.

Ten years from today, every $100k you have saved could only get you as little as $35,859 buys today... and in twice that time, it could be worth as little as $12,859 is today. Without a matching rise in Social Security payouts.

Dignified health care? Forget about it. Luxurious retirement vacations? Beach houses? Big graduation blowouts for the grandkids? Millions of Americans will be lucky if they can go to the grocery store without clutching a calculator in their hands.

Over the last 100 years, our own government has stolen more than 95.2 cents of purchasing power out of every dollar... just to fund their own waste... and that's quickly made a long healthy retirement a liability in America!

The financial statements you don't want to open... the pile of backed-up credit card bills... wrecked housing values and disappearing jobs... impossible healthcare...

Even before the latest financial crisis, millions of Americans didn't even have a "Plan A" for retirement... let alone a "Plan B." The retirement savings of a typical Boomer, for instance, totals just $38,000.

That's everything, even Social Security.

Even Boomers with money in 401(k) type plans have just $88,000 set aside... not enough to generate more than $5,000 per year once they stop working.

Could you live on $5,000 a year?

But let's assume you're one of those smart individuals who did get ready. You started early. And you put your eggs where everybody said they would do just fine.

Energy. China. Index funds.

Only to see much of those short-term gains evaporate. Along with the equity you counted on in your house. Now that's gone too. College funds? Retirement funds? Pummeled beyond recognition... if not gone completely.

My point is this...

If you want security without sacrifice... if you need the income you counted on and then some... if you were counting on living at least as well as you do now, if not better... and if you want to have a prayer of leaving something for your grandchildren...

Then you can't count on anybody else.

You need another way to win back your financial security.

And I can't think of a smarter, better way for you to do this than by tapping into the power of "Plan B Pensions." Sooner rather than later. And you can do this easily, starting with the six moves you'll find in your free copy of The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life.

Once you've had a chance to look that over, dig into the rest of the three free reports I want to send you in my new "Plan B Retirement Library."

This entire set is also yours at no charge. And I'd love to get it into your hands, as quickly as possible, because I'm that eager for you to discover the rest of what you'll find inside...

The Quick Retirement "Catch-up" Strategy Everybody Is Talking About

Doing what I'll show you is easy.

In fact, it's automatic.

You just set it up and the checks start coming. One after another, with a check arriving every 12 days on average ― for up to 38 checks just in the next 12 months.

But what I find even better is the opportunity this will give you to pile up even more "future" wealth too. Especially once you factor in the combined growth and instant "matching" gains we've already talked about.

Take a look at this chart...

As you can see, a regular interest-paying account can take $10,000 and more than double it. But it would take close to 30 years. Too long for even someone who starts early.

You'd get a slightly better result if you put that same $10,000 in an account that compounds the interest. After the same period, you'd have over four times your money ― $10,000 growing into $41,161.

But let's suppose you were to take a "Plan B Pension" approach.

All other things being equal ― but with the steadily growing payouts we talked about ― the "Plan B Pension" strategy could turn that $10,000 into more than $5.4 million.

I don't have to tell you that smashes the results on the more boring moves. But in case you don't feel like doing the math... that's a showing of more than 132 times better!

How Does Turning $10,000 Into $5.4 Million Sound?

What happens as the base size of your wealth grows, inside of the "Plan B Pension?" Naturally, the already large income stream ― that is, each individual cash payout ― gets larger too.

It's like packing 35 years of retirement planning... into just a few years.

I lay it all out for you in the "Plan B Retirement Library" I'll send. But before I show you how to download this library of three reports, let me just run through what we're looking at so far...

"Plan B Pensions" let you "catch up" quickly, even after years of no savings

They're perfectly legal, even encouraged by America's best companies

There's no limit on how many of these income streams you're entitled to

You get to decide exactly how big you want your regular "paychecks" to be

You even decide how often and how many of these checks you'll receive

This "plan" pays you cash right now ― without touching your principal

Even in a falling market, you can use this to fill your bank account

There are no brokers or managers to go through (and no commissions)

You do this without options, insurance annuities, or low-paying money markets

You'll use, instead, a strategy preferred by countless millionaires

You can get unique "instant matching" gains with each payout

With this, your cash payouts grow over time, even if you don't put in another dime

On top of the income, it's also one of the smartest ways to grow long-term wealth

It's completely automatic ― you just set it up once and it runs itself, cranking out your checks

Market experts agree: "Plan B Pensions" are among the safest moves ever devised

Done right, you can even collect all or part of your payouts "tax-free" ― and I explain how in your free special reports.

As I said, there are over 1,020 of these special "plans" offered nationwide.

And more than 600 of them can offer you the sped-up "matching" gains I mentioned.

The sky's the limit on how many of these you lock into. Start collecting as many of these checks, in amounts only you help control, at any age and for as long as you like.

Without raising a single eyebrow, even though this can be...

Like Sneaking Your Own Fulltime Salary From the Payrolls of America's Safest Companies

Wal-Mart, Procter & Gamble, and Johnson & Johnson… Chevron, Microsoft, and ExxonMobil… these are just a few of the well-known companies sending out "Plan B Pension" checks to individual members of their plans.

However, there are many more I can show you. Some you'll know. Others will sound new to you. But I don't pick and choose the opportunities I'll tell you about based on a popularity contest.

Rather, I use my own proprietary seven-point analysis system to find these moves.

In fact, I'm watching several that I'm ready to share with you right now.

And I'll happily share more with you as they come along.

In each case, thanks to my proprietary seven-point analysis system, I'm able to target moves that can give off steady streams of income. And quickly. In fact, these checks can start arriving in just a few days from right now ― if you act quickly ― starting with the next "Plan B Pension" payout date, March 14, 2009.

To collect, you don't have to be an employee of any of these companies.

You don't have to be an insider or sit on the company board.

You don't need to qualify according to age or employment status.

You only need to follow the simple steps ― including filling out a simple form ― which I explain to you in full in your free "Plan B Retirement Library" set of reports.

But I know what you're wondering.

Why these companies... and why now?

The Best Time for This Alternate Income Strategy in Two Decades

Before I start showing you these "Plan B" opportunities in detail, let's just pause for a second so I can put something critical into perspective ― today's gloomy financial headlines.

There's no hiding the facts...

Everything from commodities to health care has taken a beating. As I write this, the Dow is down approximately 40%. Some with just months to go before retirement have seen their market savings slashed by half or worse.

Meanwhile, we're talking over $4 trillion in U.S. home equity evaporated since 2006. And a lot more downside to go over the rest of 2009 and possibly into 2010.

Yet this same horrible market offers you and me the best investment window in nearly 20 years for the kind of "Plan B Pension" strategy. How so?

See, while most publicly-traded companies constantly hunger for new shareholders ― especially in today's massive sell-off environment ― not all companies go about getting them in the same way.

Some count only on hype, headlines, and PR. Others drum up support with "buzz" on the trading floor. But there's another class of company that takes a different approach.

Instead of hopping on the stock-market treadmill, churning through wave after wave of new investors, these smarter companies look for "owner" shareholders... individuals who believe in the company and look like they'll stick around for the long haul.

And what kinds of companies are these?

Cash-rich. Well-established. Well-positioned. Safe and fundamentally solid. In the right industries at the right time. With a long history of doing good business, doling out cash as steady dividends, taking care of customers, and looking out for their shareholders.

Now, I know what you're thinking. Bonds and many funds pay income too. And that's true. Even if bonds typically only pay twice a year. And those funds, once a year.

And lots of companies pay dividends, some very high dividends. That's true too.

In fact, maybe you're familiar with the study from Ned Davis Research showing how, from 1972 to 2006, dividend paying companies in general did two and a half times better than companies that paid no income to shareholders.

But high dividends and even some medium dividend payers can also come with hidden levels of risk. What's more, many of them don't offer the added income growth and compounding advantages of the "Plan B Pension" plans I'm telling you about today.

It's this special combination of income growth and compounding ― a step beyond just collecting stock, bond, or fund income ― that famous Wharton Professor Dr. Jeremy Siegel credits with producing a whopping 97% of all the real money made on the S&P 500.

Do most market amateurs know this? They do not.

Of course, when it comes to finding the best of these "Plan B Pension" paying companies, lots of market amateurs ― and a few of the so-called pros ― have no idea where to look.

On your own, separating the best from the worst can be work.

That's why I've developed my own carefully crafted approach...

How You Could Lock in Lifetime Income, Using My Strategic Seven-Point Filtering System

Obviously not all income-paying plans get cut from the same cloth. Not all fit the "Plan B Pension" model either. That's why I've crafted what I consider the most bulletproof filtering system for finding reliable, consistent streams of market income...

Filter #1: The Largest Income Yield That Still Makes Sense ― Really high yields can signal far too much risk. Still, you can find some fat yields right now... paid out by some of the most fundamentally solid top stocks for 2010 on or off Wall Street. I don't stop looking once I find higher yields, but I certainly start there.

Filter #2: Bigger and Bigger Income Streams Over Time ― What's even better than regular "Plan B Pension" payouts? Payouts that get bigger and bigger over time. Not only because they speed up your wealth accumulation, but also because they're an excellent sign of a well-managed "Plan B" opportunity.

Filter #3: Cash Payouts Like Clockwork ― Checks that don't come aren't worth the paper they're not printed on. I stick with the "Plan B" opportunities that have a long history of paying out and paying on time. And I steer clear of those who don't.

Filter #4: Businesses Your Mother Could Love ― Short-sighted market players may have forgotten what makes for a best stock, but it's just as basic as ever ― lots of cash, very little or no debt, a steady flow of business, and low expense ratios. I don't touch anything that can't pass those benchmarks. And you shouldn't either.

Filter #5: The Right Industry For the Right Time ― Let's face it. Some top stocks for 2010 work for the long term, and work hard. Others work best in some kinds of markets, and a little less than others. I don't try to time markets. But if something looks extra ripe for solid growth and can pay us cash payouts, I see no reason to hold back.

Filter #6: Payouts as Big as They're Supposed to Be ― Some kinds of "Plan B" companies will have a lot of cash to fork over to you. Others, on a percentage basis, should fork over less. It depends on the businesses they're in. If they're paying more or less than they should, that's a red flag you have to know to watch for.

Filter #7: The Absolute Best Share Price ― Even companies that can put steady cash in your pocket have a fair price. I don't recommend paying a nickel more when you don't have to.

It's no coincidence the most successful and well-known market mega-players in history favor these kinds of companies, in good markets and bad.

It's also no coincidence that right now, these companies are exactly the ones offering the biggest rewards to both new and loyal shareholders... with some of the biggest "Plan B Pension" payouts in 17 years... simply because, especially in this market, these income-payers are eager to attract the "best" kinds of shareholders possible.

It's really that simple. And I can start showing you how to find these companies right now, as soon as you're ready. With a brand new service I've just created, called the Lifetime Income Report.

This new service uses my special seven-point filtering strategy to find you the best income streams possible ― including the "Plan B Pension" payouts we've talked about.

I'd like you to be one of the first to give Lifetime Income Report a try.

To help encourage you, not only will I rush you the free "Plan B Retirement Library"... I'll guarantee your satisfaction 100%... in not just one, but three very specific ways.

"Plan B Pension" Guaranteed Opportunity #1: "Current Cash" You Can Start Spending Right Now

What's the worst part about planning for tomorrow?

Having nothing left to spend right now.

The first thing I'll start showing you in my new Lifetime Income Report service is that it's possible for you to build future wealth... and still have right-now cash... at the same time.

No more punishing early-withdrawal fees. No nasty memos from 401(k) administrators. And you don't need to wait until you're 65 to get paid. This is money you can spend today.

(With your first check arriving as soon as 12 days from right now.)

You Could Get Cash Payouts as Often as Every 12 Days

The following list shows scheduled cash payout dates, based on past results, for the six "Plan B Pension" programs I've identified for you, in the "Plan B Retirement Library" I'd love to send:

In fact, as soon as you agree to try the new Lifetime Income Report research letter... and send for the free "Plan B Retirement Library" set of bonus reports... you'll find included a second report called, Income You Can Count On.

This is your instant primer to everything we'll do together, giving you a chance to piece together a whole fortress of income-driven financial security... while still tapping a stream of immediate cash income.

One of the first things I'll walk you through is what I call my "Current Cash" portfolio.

This is where I track income streams specifically designed to pay the largest possible immediate "Plan B" payouts. We'll use this portfolio to target faster growth and bigger income, right out of the gate.

This is the "right now" part of the program you'll discover just as soon as you send for your FREE "Plan B Retirement Library"... and your "100% Triple-Guaranteed" trial issues of the Lifetime Income Report.

But it gets even better...

"Plan B Pension" Guaranteed Opportunity #2: Self-Renewing Wealth, Even in Flat Markets

Have you ever noticed that some people just work too hard to get rich?

Think about it.

The wealthiest American families... the multi-millionaires and billionaires who hit the headlines... don't really work that much harder or longer than you.

Some even seem to get wealthier... doing nothing.

Except maybe letting their money make more money, all by itself.

How do they do it?

The thing is, using the secrets I'll show you in your FREE "Plan B Retirement Library" and in first issues of my new Lifetime Income Report research letter... you see how you too could also collect similar kinds of "no show" wealth.

Just like those wealth insiders.

Collect in your sleep. Collect long after you've retired. Collect from the front porch of your house on the beach... or the deck of your new sailboat or fishing cruiser.

How many times have you heard of someone who "sits on the board" of a half-dozen companies, raking in best stock option riches while he trolls the golf courses and knocks back champagne at top clubs and restaurants?

The simple strategy you'll find in your FREE reports and first issues shows you the simple formula for putting together as many multiple work-free "paychecks." Allowing you, too, to pile up lots of money that works so you don't have to...

Wealth That Never Retires

I call this kind of self-growing wealth "Legacy Income"...

In each issue of your trial subscription to the new Lifetime Income Report you'll find a second "Legacy Income" portfolio, designed to help you load up on this kind of wealth that can automatically continue to grow.

And no, don't think I'm just talking about the miracle of compound interest. That's an extremely powerful tool. But this is better. And it can work for you, much faster.

Einstein may have called compound interest "the most powerful force in the Universe"... but this is like compound interest on steroids.

And my new Lifetime Income Report will make it simple for you to learn how it works, should you choose to try this yourself.

Not just with how to collect this kind of "Legacy Income" over time... or the "Current Cash" we talked about... but also in a third way, with something I can only call "Special Income."

"Plan B Pension" Guaranteed Opportunity #3: "Special Income" Others Leave On The Table

What's "Special Income?"

It's the pile of income payouts other investors simply leave on the table.

These little-talked-about income payout opportunities don't come on a schedule. You won't read about them much in the paper either, until they're already doled out and it's too late to collect.

But when you can tap these "special income" opportunities... it can be like getting a surprise windfall... a bonus... even a check from a wealthy relative or a fat premium on the sale of a big asset, like a luxury car or investment property.

The companies that offer you this special kind of income usually get the money themselves from winning a piece of corporate litigation, making a major sale, having an especially good financial quarter, and so on... in an unexpected glut of cash.

Naturally "special income" opportunities are harder to spot.

But then, there's that old saying... "It's amazing how lucky I get when I work 16 hours a day."

In other words, to catch a fat "special income" payout, you need to stand in the right place at the right time. But if you let me do the research work for you, there's a good chance I can show you where to stand.

The third portfolio you'll find when you try my brand new Lifetime Income Report service is what I call our "Special Income Portfolio"... and it's where I'll line up "special income" opportunities on the brink of spilling cash into shareholder accounts.

That's three different kinds of potential lifetime income I can start revealing to you immediately, the moment you let me know you're ready to get started.

From the short to long term.

And only the highest quality opportunities I can find...

My Six Favorite "Plan B Pension" Income Streams Right Now

You'll find my six favorite "Plan B Pension" payout programs right now... in your free copy of The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life.

This free report is just one of the three reports included with your instant "Plan B Retirement Library" bonus. And it's yours at no charge whatsoever, the moment you accept my invitation.

Here's a small taste of the kinds of wealth moves you'll find inside...

A North Carolina based "Plan B Pension" plan that's increased the size of its cash payouts to members every year since 1978 ― that's 30 years straight ― and that doesn't include the instant 5% gain you could make every time you use their zero-fee plan to pick up more shares

Easily the most popular "Plan B Pension" opportunity in America, this 39-year old company has sent its members cash "paychecks" each of the 458 months in a row… and they've bumped up the amount in those checks 51 times since 1994

A "Plan B Pension" plan that's handed out cash payouts to its members steadily every year for the last 38 years straight. And backed by a business that couldn't be safer, because they dominate 75% of the massive, worldwide market for the household product they make

A "Plan B Pension" plan that the London Financial Times is calling a kind of safe haven in the latest global financial storm. This one plan has steadily doled out bigger and bigger cash payouts to members, every year since 1997

A major play on the Brazil boom, with a "Plan B Pension" plan that could give you nearly double-digit income, with the safety of a solid energy company. This could easily be a way to pick streams of steady cash you can spend as you like

A "Plan B Pension" play so popular, it has over $3.8 billion in the program and offers regular cash payouts that are already 16% larger than they were in October of last year… for a total of nearly 12% payouts on every dollar you put in the program, regularly paid to your account.

Again, all six of these are fully detailed in your free copy of The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life ― which you're welcome to download or have mailed to you, the moment you sign on.

I can't wait for you to try this for yourself.

The Simple Secret That Could Pay Your Retirement Millions

Of course, you don't need to wait until you get your free reports to see the evidence behind this approach. For instance, let's say you had used the "Plan B Pension" strategy to pick up 160 shares of Pepsi in 1980.

It would have cost you $4,000.

However, that amount would have automatically grown to over $300,000 by 2004, without you investing another penny. Not bad?

Now let's try the same with Philip Morris... starting with the same dollar amount, which would have amounted to 58 shares. By the time you'd finished, your $4,000 would have ballooned to nearly $600,000... and over 4,300 shares.

Without you putting in an extra nickel.

Here's another one. Say you put $5,000 into a company called Terra Nitrogen in 2003. That's 1,136 shares at the then-price of $4.40 per share. Today the share price has exploded to $110 per share. Pretty good. But the "Plan B Pension" income on top of that could have exploded your $5,000 into $151,026 in just five years.

Like I said, it's an almost perfect self-growing cycle.

Like a tree that waters and fertilizes itself.

Take a look at a few more...

One of the moves I've tracked since Jan. 2005 would have grown every dollar you put in 155%. Not bad. But make that same move using a "Plan B Pension" strategy and you would have more than tripled your money, for a total net gain of 244.8%. Much better

Another move I'm tracking has already issued enough "Plan B Pension" income checks... from 2003 until now... to cover double what it might have cost to get in... plus the shares in this one plan alone, over that same time period, also shot up another 329%. Even now, I see this as a steady income-payer for years to come

One more of the many possible "Plan B Pensions" I've just tracked has cranked up the size of the income it pays out with every single check, steadily for the last 10 years... already, had you started getting your checks in 1998, you'd collect nearly 40% more per check right now, above what you earned when just getting started. It's like getting an automatic pay raise that you don't have to lift a finger to earn.

Over the last 80 years, regular hot stocks for 2010 could have turned $10,000 into about $1,013,000. Fold in the kind of income that you can get with these kinds of "Plan B Pensions" and $10,000 grows to a dazzling $24,113,000.

And that includes results in all kinds of markets.

The Only Money Strategy That "Works" In Good Times or Bad

One study shows "Plan B Pension" companies can consistently double the gains other individuals get following the S&P 500 alone.

And not just in the "best" years, but over the period between 1970 and 2005... which included at least seven bear markets... a half-dozen wars and minor military skirmishes... on-again-off-again energy crises... countless rate hikes... and piles of political scandal...

In a down market, you'll see the market flock to "Plan B Pension" companies for cash. In up markets, "Plan B Pension" companies have even bigger cash piles to divvy up.

Even in a flat market, you can do well with a "Plan B Pension"... because it's the one way you can be sure that no matter what happens, you qualify to get paid.

Just looking at the last two decades, the kinds of moves you'll make with the "Plan B Pension" approach accounted for more than half of the total return on the S&P 500.

This is the best way to reward steady, cool-headed market players I know of.

And yet...

You'd Be Stunned to Discover How Many Americans Miss Out on This Simple, Wealth-Boosting Step

This is so easy to set up, you'd be shocked to find out how many Americans don't ever discover how to put "Plan B Pensions" to work. But don't let that stop you from getting started.

Send for your free "Plan B Retirement Library" reports.

Look over your first issues of the Lifetime Income Report.

You'll see how this can work for you automatically, in a self-growing cycle of income. And likewise, how you can also use this approach to tap a stream of "right now" cash.

Your first check could arrive within days of right now ― the next payout date as I write this is March 14, 2009 ― followed by as many as 38 checks, each and every year you decide to stick with this "Plan B Pension" strategy.

That's just the beginning.

Because you'll find even more of these opportunities... and others like them... as you dig into your introductory "100% Triple-Guaranteed" trial subscription to the Lifetime Income Report.

I hope you see why you need to seize this opportunity.

But just so we're clear on what you'd be giving up...

Let's Run Through All This One More Time

Everything you need will start arriving immediately.

First I'll rush you your FREE "Plan B Retirement Library," which gives you three full and detailed new research reports on how to get started immediately on collecting and building these endless streams of "Plan B Pension" income, including...

FREE "Plan B Pension" Payout Gift #1:
"Income You Can Count On"

This is your full start-up guide to "Plan B Pensions" and other key kinds of work-free income. You'll discover exactly how this strategy works, how to set up one of these lifelong income streams in as little as 10 minutes, and how doing this can give you both cash right now and cash you can set aside for the future. (Worth $49, Yours FREE w/ Your Trial Subscription.)

FREE "Plan B Pension" Payout Gift #2:
"Let Your Money Work For You: The Smart
Investor's Secret Trick to Retiring With Millions"

If you've ever wondered how "PWM" (People With Money) seem to get even richer while they sleep, you'll love discovering this technique. Anyone can do it, even without a fortune to start. It's automatic. And it's deceptively simple. Maybe you know a little about it already, but there's more I'm sure you don't. Find the full details in this second special new report. (Worth $49, Yours FREE w/ Your Trial Subscription.)

FREE "Plan B Pension" Payout Gift #3:
"The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life"

When we first started pulling together this special invitation, I already had three of these unique "Plan B Pension" opportunities set aside for you to review. Since then, we found more... stopped the presses... and now you're getting all six of my latest, favorite new income-expanding picks. You'll want to jump on these now while you can get in at the best possible moment. Find all six steadily paying plays in this third special report. (Worth $49, Yours FREE w/ Your Trial Subscription.)

That's a total of $147 in special research reports... yours FREE.

And yours to keep, even if you cancel your trial subscription.

Download this full set of free reports immediately, and I'll also drop them in the mail for you. And of course, you'll also receive...

Your Own Private Lifetime Income Password ― I'll immediately see to it that you get your private password to our brand new, members-only Lifetime Income Report website, where you can download past issues, pick up regular updates, and track our three special income portfolios around the clock.

Members-Only "Flash Alerts" To Make Sure You Don't Miss a Thing ― As part of your subscription, you'll immediately qualify for flash e-alerts that will keep you up to date on anything that impacts the plays in our three special portfolios. This way, you won't miss a beat between issues.

My Brand New Research Service, the Lifetime Income Report ― The crown jewel of this whole invitation, of course, is the never-before-offered Lifetime Income Report... where you'll find your pick of powerful streams of "work-free" income. Every issue names my latest recommendations, reveals my full research, and shows you exactly how to proceed. Plus, I'll always tell you exactly what's happening in the portfolios, from how to pick up piles of "current cash" payouts to how to continue to build your own steady stream of "legacy income." You'll find everything you need, month after month.

And last but not least, you'll receive the legendary Daily Reckoning e-letter ― now in its 10th year ― delivered right to your inbox. You'll also get the paid members-only Executive Series, which includes The 5 Min. Forecast and The Rude Awakening, two exclusive e-letters with specific ideas on how to make more money today.

I know of no better way to have income now while still preserving your financial security... that's what you'll experience when you give the Lifetime Income Report a try.

This is the best possible thing you can do with your money.

Not just right now, but in any market.

And getting started right now couldn't be easier...

Just 27 Cents Per Day, For a Potential Lifetime of Income

With your "Plan B Retirement Library" alone... you're already getting almost $150 in free research reports... that could be worth many times more, even with your first payout check.

And with the private members-only website... plus the flash alerts... and the trial issues of the Lifetime Income Report... let's just say that my publisher usually likes to charge as much as $199 a year for this kind of thing.

And even at that price, I'd say that's an enormous value.

But here's the deal. I know this service is new. And I know you like to make your choices wisely... so here's what I've arranged: if you cover the first half of your trial subscription, I'll cover the second half.

In other words, to accept this special "early subscriber" invitation, you'll pay just $99 ― half of my publisher's preferred price ― for a full 12-month trial subscription to my brand new Lifetime Income Report research letter.

That works out to just 27 cents a day.

For research that could quickly put thousands of extra dollars in pocket... money every month... not to mention up to 38 "Plan B Pension" payout checks this year alone...plus the potential for several hundred thousand dollars added to your retirement nest down the road.

Doesn't that sound like a fair invitation?

Naturally, either way everything I mentioned above is included. And all three special reports in your "Plan B Retirement Library" are yours to keep. No matter what.

Triple-Guaranteed Satisfaction... Or All This is Yours Free!

Just in case you still have any doubts, see if this helps you decide...

Send for the three reports in my "Plan B Retirement Library"... plus a full subscription to my brand new research letter, the Lifetime Income Report. Soak up the easy recommendations.

Promise #1: If you don't discover how to start collecting cash payouts within weeks of getting started... cancel and you'll immediately get a full refund.

Promise #2: If I don't show you how to lock in instant "Plan B Pension" gains on every payout you receive from the companies I'll name... plus how to use this to build long term wealth... cancel and still get a full refund.

Promise #3: Even if we get to your last issue of your full subscription, if you decide I just haven't done all that I've promised to help you find these kinds of special payouts... you can still cancel and get a full refund, despite the late date.

No matter what, you'll keep everything.

This is a "lifetime" guarantee.

That is, you have the full length of your subscription to look everything over.

If the Lifetime Income Report isn't everything I've said it was, tell me and I'll send you a refund to cover your no-risk trial subscription.

You'll pay nothing and still keep everything.

Doesn't that sound fair? I hope so. Because this is one of the most airtight and generous guarantees around. I believe that much in what I'm about to send.

Of course, you can look everything over and decide for yourself.

Just let me hear from you soon, before the next payout date ― March 14, 2009 ― comes and goes.

Use the button below to let me know what you want to do.

 

Jun 4, 2009

Stocks Market's Good News Saturation?

(source: http://www.investmenthouse.com/blog/2009/05/good-news-saturation.html )
 
SUMMARY:
- Good news saturation? Market still hungry for positive news and drives higher.
- NASDAQ, SP600 break to new post-November highs.
- Low volume move suddenly turns to higher upside volume.
- Kernels of economic positives continue showing up here and abroad
- Stocks are moving higher, but not a lot are in buy position at the moment as new money chases many beyond good entry point.

More earnings and some of the indices start to break out.

Typically the market gets a week or two of earnings, figures the general gist, and then starts to head the other way after moving into earnings and continuing the move as the early returns come in. It is called the saturation point. Thus far, starting with the WFC pre-announcement and the BBBY earnings that start things off, the positive earnings results and outlooks have outweighed continuing government intervention issues and some guidance that in more instances than not is simply not that positive.

That continued last week with several key names in tech such as AAPL, MSFT and YHOO, retail (AMZN), and even autos (Ford) beat nicely. Their earnings overcame misses and weak outlooks from MS, UPS, RS, MRK and CAT's first quarterly loss in 17 years. In an ironic twist you may recall the President stumping at a CAT plant for his stimulus/spending/social engineering package, touting it would result in hundreds of jobs 'saved' at CAT. Last week CAT issued a statement that the stimulus package in its final form failed to be real stimulus, noting as we did back in February that China's stimulus package, if you are going the government spending route, was actually stimulus.

Despite some earnings issues, despite bank stress tests and concerns about the effect of released stress test results the indices, after a dive on Monday the indices mounted another rally. Not all finished positive for the week as SP500 and DJ30 broke their string of weekly gains at 6, but NASDAQ made it seven straight with its performance that saw a breakout to a new post-November high to close the week Friday. Even the small cap SP600 put in a new high for this bear market as the small caps, an important economic bellwether, try to shoulder into a leadership spot.

What was a low volume rise through late March and mid-April 'got volume' last week. It didn't start that well on Monday with a NASDAQ volume spike to the highest level of trade since the October low when the market gyrated in massive daily swings up and down. That did not look positive, but then again, most of the volume that day was due to JAVA and its takeover bid by ORCL. ORCL has no pride; it picks up the sloppy seconds but it has done quite well doing just that. Volume really started to come in Wednesday through Friday, however, as solid tech earnings helped propel and extended market higher.

As noted during the week, the action was modestly higher to modestly lower on the open, a lot of midday range-trading with dips to negative territory common, and then late the indices would climb. The earnings were not jacking the market higher on the open, instead just providing a bid. That made it look as if the indices were tired (they were) and that earnings results were wearing out their welcome.

Then LATE in the sessions the market would rally back to positive. Happened Tuesday, Thursday, and Friday. As noted Thursday, what is happening is that despite the indices logging 20+% gains off the lows 'chase money' is coming in on every dip. Good earnings fail to elicit a huge response? Use a dip to buy positions. There are many big hedge and other funds that were caught short by the upside move. They helped drive the move higher when they finally had to toss in the towel and cover, and now they are helping keep an extended market, near term at least, moving higher as they chase top stocks for 2010 that fall intraday and thus giving the characteristic late session rallies.

Nothing wrong with late session rallies; that shows big money is buying and that is bullish. The important thing as we said Thursday is to watch and see when the 'chase money' starts to fizzle out. As of Friday afternoon with the afternoon move it was not there yet though there was some late weakness that was likely due to pre-weekend profit taking by those already in the rally and taking gain on top stocks 2010 such as, say PCLN or SINA as we were doing.

As noted above, we said that typically top stocks get information overload or get the general theme of earnings season one to two weeks into the season and then the jig is up. This market is hardly typical in that it is an economic recession market, and a deep recession at that. Nothing typical about that, and as we have seen, money that missed the rally is not chasing the rally, keeping it going when it is pretty extended. The money helped prop up the market in a lateral move when it would likely have faded back to test the bottom of the range quicker. Again, it is still in the market as shown Friday after the MSFT earnings, it is not done yet.

So, is it totally 'different' this time? Dangerous words; when you hear the old 'it is different this time' you can be just about 100% sure the old patterns are about to reassert themselves. Look at the calendar. While earnings season starts in April, it does not really start until the end of the second week of the month. Thus it really is just the SECOND week of the season. Thus predictions that the earnings season will be different this time are likely a tad premature.

The breakout by NASDAQ Friday is nothing to discount, but it is also not proof that it or any other index will avoid testing back. Look at SOX; it was the early leader in the rally, not only making the first higher high but also the only highest high following the bear market selloff. It is currently going through a three week consolidation that has it trading in quite a large range. It has come back all the way to test its breakout over the mid-level peaks before moving up late in the week. SP500 has not even broken out of its trading range, just making it up toward the 875 level that is a mid-level resistance point, this despite all the rallying in financials.

That is one reason we were not loading up with more upside positions to end the week and actually picked up some downside positions, including some additional downside SP500 positions heading into the Friday close. That does not mean we think the rally will fail. As noted Thursday this is great overall action. We just recognize where the rally is in its cycle, where we are in earnings, and know that the 'chase money' won't likely overcome this resistance in SP500, at least on this round of the move. Thus we are looking for some downside again while top stocks for 2010 that surged really far, really fast test back some and set up for another move higher.

TECHNICAL. Once again the intraday action was bullish with that second half session, and particularly last hour, rally after a modest start and intraday trading range. That shows big money funds that missed the early rally still putting money to work to beef up their upside portfolios, and big money moves are always important.

INTERNALS. Solid breadth again with 3:1 NYSE and 2.5:1 NASDAQ. Volume was up to average on NYSE and was again above average and stronger on NASDAQ. Trade has been low on most of the latter part of this move. That is not necessarily bad for a lateral consolidation where quieter action is preferred, but a lot of the upside action was occurring on lower trade. Thus when NASDAQ volume jumped last week on the upside, that was very bullish. Earnings from AAPL, YHOO, MSFT and others helped pump up the volume. On NYSE trade remains lackluster with a big spike two Fridays back when SP500 hit near the top of its current range and turned back. Outside of that volume has been mediocre at best and is a key reason we feel SP500 is going to test back in its range before it moves higher again.

CHARTS. As noted, NASDAQ broke to a new post November high, clearing once more the January peak, and this time doing it with a bit more flare, moving on strong volume and putting some mileage on that level. Still below the November peak, but that is now at the 200 day SMA so that is the next story to worry about. SP600 broke to a new post March high itself, at least on the close. The small caps are trying their hand at returning to the leadership role. SOX bumped into its 200 day SMA again on its high as the chips continue their three week lateral trading range, bouncing to the top of the range last week after holding the February peak. The early market leaders they are in a well-deserved consolidation and are indeed holding their gains as they recover from the run. Last there is SP500 and it managed to close the week breaking back over 850 that was holding it back, moving toward next resistance at 875 in the form of the late January peak. We were looking for a rollover as it broke below the 850 level Monday, but it did not hold as the general market move took it higher. Now we see what it does with 875; we are still looking at a fade again toward the bottom of the range, anticipating that the 'chase money' cannot break it out on this run.

LEADERSHIP. Energy started getting back into the game late in the week, adding some support to the market as industrial metals took most of the week off along with semiconductors. With those leaders taking a needed rest another group stepped up. Indeed it was more than just metals as industrials enjoyed a good end to the week along with some technology top stocks for 2010 moving on those tech earnings. Small caps in general are moving higher though it is interesting that some of the early small cap leaders (HMSY, EPIQ) are in full retreat, turning the reins over to others. In sum the market continues to find new leadership stepping up when one group needs a pause, the kind of rotation that signals an overall healthy market.


THE ECONOMY

Signs of slowing declines continue but do they mean recovery?

We have chronicled for a couple of months now, well in advance of any impact from the so-called stimulus bill, how the economy is showing signs of slowing the fall. That is not a recovery; that requires improvement. But of course the decline ahs to slow before a recovery can take place. Will it be a 'V', a 'U', a 'W' or an 'L' or hockey stick as some call it? Thus far we are still in the decline phase though it looks as if it is just before some kind of turn toward a leveling off or even some upside.

Shipping materials and shippers.

This past week saw corrugated box orders rise for at least on manufacturer. Cardboard boxes hold most of what we ship around the US, and if orders are indeed hitting year ago levels that is a large positive as it was one of the indicators we used in 2002 to hone in on an economic turn.

As for company news UPS in shipping, one that moves those cardboard boxes, said it sees no recovery until maybe 2010. Something to note about shipping companies: they have been bearish for three years now, starting with the 2006 holiday season when orders were lower and were not recovering. Were they early or just overly pessimistic? We had some good economic years during that time. Thus take what the shippers say with a grain though I can tell you they are in lockdown mode, i.e. they are only spending on the things that make the trucks roll, i.e. tires, gas and oil. So regardless of what reality is, that is their mentality and they are not spending money. Other businesses are in that same mentality, and they have to see tangible improvement before they start feeling better and then actually start spending money again.


Goods orders.

Durable goods orders fell 0.8% in March but that was almost twice as good as the -1.5% expected. February was revised lower to 2.1% from 3.4%, however, and revisions are what can make or break a turn. We are seeing mixed results in the revisions on the economic data, i.e. some up, some down. That is volatility that can indicate a change, but you want to see solid upside revisions to show a turn is really taking place versus still in the stage of feeling its way around.

Home sales.

The week saw home sales, existing and new, fade from the February gains. New home sales fell 0.6% versus gains in February, indeed big gains of 8.2% as the original 4.7% was revised upside. Existing home sales fell 3% versus the 4.95% February gain. A pause in housing though it is making use of those lower interest rates to show overall improvement. Looking at the housing top stocks to buy and you see a group that is preparing for a breakout. If they can make that move that is the best indicator for this sector. Improvement but not there yet.


Foreign indicators.

As noted last week, China's economy grew at 6.1%. Impressive for anyone else, but that was the slowest growth in over 10 years. Still, China said its stimulus was working and the economy was picking up momentum. Yee ha.

Europe observed that its overall PMI was showing 'signs of stabilization.' As with here in the US that means it is falling less than it was. Again, slowing does not equal a turn, though all trends slow before they turn. The question is whether this is THE slowdown to a turn or just an interim blip in a crappy manufacturing cycle.

German business confidence came in greater than expected last week. That was keeping me up at night; now I can sleep knowing they are more confident.

UK GDP fell 1.9% in Q1. That was the lowest since -2.4% in 1979 and it was worse than the -1.4% expected. The UK continues to languish, and while it is not the EU it shows the issues for Europe are bad and indeed most say worse than here.

SUM: there are signs that the world economies are slowing their decline. It helps when the credit markets are a bit better with LIBOR improving to 1.07% (3-month) last week as the decline finally got some wheels and is now close to the levels hit after all of the facilities were put in place last fall before the game plan changed and sent the credit markets back into freeze. It is interesting to not that Trump says that banks are NOT lending despite what the Fed and Treasury tell us. Our polls are mixes, but it is clear that there are still many issues with credit. It happens every recession: easy money caused by whatever source (bad management, government pressure, etc.) leads to bad loan decisions and in the aftermath the Fed cracks down, lenders get cold feet, and no money is lent. The credit market has to be healthy enough to respond to economic improvements or government policies that promote confidence. That is all you can hope for. Banks are not going to just dump money out as Congress wants; that is what caused the current problem. No, it takes a confidence in the future to get money lent and spent, and right now the government policies are not evoking confidence in banks or in small and medium businesses that make this economy work. Now your GE's are happy because the government programs basically subsidize their businesses, but they do not represent most of the economic activity in the US, particularly in jobs creation.


THE MARKET

MARKET SENTIMENT

VIX: 36.82; -0.33
VXN: 36.8; -1.15
VXO: 38.13; +0.22

Put/Call Ratio (CBOE): 0.83; -0.08


Bulls versus Bears:

This is a reading of the number of bullish investment advisors versus bearish advisors. The reason you look at this is that it gives you an idea of how bullish investors are. If they are too bullish then everyone is in the market and it is heading for a top: if everyone wants to be in the market then all the money is in and there is no more new cash to drive it higher. On the other side of the spectrum if there are a lot of bears then there is a lot of cash on the sideline, and as the market rallies it drags that cash in as the bears give in. That cash provides the market the fuel to move higher. If bears are low it is the same as a lot of bulls: everyone is in and the market doesn't have the cash to drive it higher.

This is a historical milestone in the making. Bulls are impressively low considering we are in general a very optimistic country. The few bulls is a positive indication because it means most everyone that is getting out is out and there is money on the sidelines. In other words the ammunition boxes are full and as the market recovers investors will start opening up the boxes and firing. Little by little they will be forced to put more money into the market and there will be some rushes higher in fear they are missing the train. You relish times when sentiment is so negative because it means some tremendous buys are setting up. This could indeed be the opportunity of a lifetime, and you take advantage of it by buying quality top stocks and letting them work for you as long as they will. If we can hold them for years, great.

Bulls: 39.1%. Sharp decline from 43.2%. A bit of a cooling after the market rally revved up the bulls. 36.0% the prior week. Still over the 35% range considered bullish, but as noted this is not a bearish indication yet. Has to get up to the 60% to 65% level to be bearish. Dramatic rise from 21.3% in November 2008, the bottom on this leg. This last leg down showed us the largest single week drop we have ever seen, falling from 33.7% to 25.3%. Hit 40.7% on the high during the rally off the July 2008 lows. 30.9% was the March low. In March the indicator did its job with the dive below 35% and the crossover with the bears. A move into the lower 40's is a decline of significance. A move to 35% is a bullish indicator. This is smashing that. For reference it bottomed in the summer 2006, the last major round of selling ahead of this 2007 top, near 36%, and 35% is considered bullish.

Bears: 34.5%. Not as large a gain , up from 34.1%. Halted the decline for a moment, falling from 37.1%. Well off the high on this run at 47.2%. Hit the 34's on the lows, falling from 38.5% and 46.2% in mid-December. Just slipped below the 35% level considered bullish for top stocks of 2010. Bearishness hit a 5 year high at 54.4% the last week of October 2008. The move over 50 took bearish sentiment to its highest level since 1995. Extreme negative sentiment on this move. 35% is the level that historically indicates excessive pessimism. Bearishness peaked at 37.4% in September 2007. It topped the June 2006 peak (36%) on that run. That June peak eclipsed the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). That was a huge turn, unlike any seen in recent history.


NASDAQ

Stats: +42.08 points (+2.55%) to close at 1694.29
Volume: 2.477B (+3.42%)

Up Volume: 2.023B (+644.044M)
Down Volume: 555.239M (-523.806M)

A/D and Hi/Lo: Advancers led 2.54 to 1
Previous Session: Decliners led 1.59 to 1

New Highs: 18 (+4)
New Lows: 10 (+3)

NASDAQ CHART: http://investmenthouse.com/ihmedia/NASDAQ.jpeg

NASDAQ 100 CHART: http://investmenthouse.com/ihmedia/NASDAQ100.jpeg

SOX CHART: http://investmenthouse.com/ihmedia/SOX.jpeg


SP500/NYSE

Stats: +14.31 points (+1.68%) to close at 866.23
NYSE Volume: 1.733B (+10.64%)

Up Volume: 1.286B (+280.35M)
Down Volume: 408.993M (-146.243M)

A/D and Hi/Lo: Advancers led 3.23 to 1
Previous Session: Advancers led 1.5 to 1

New Highs: 11 (+5)
New Lows: 66 (+20)

DJ30

As with SP500 the blue chips are moving up to the top of their range marked by the October closing low at 8175. With all the financial rallying the large cap NYSE indices are still in their ranges, still trying to break even the first resistance.

Stats: +119.23 points (+1.5%) to close at 8076.29
Volume: 402M shares Friday versus 327M shares Thursday.

MONDAY

Earnings continue. Will the market finally get the 'gist' and hit the earnings saturation point and test back? Will SP500 and DJ30 hit the top of their ranges and follow NASDAQ with the breakout or fade back? Will NASDAQ turn back after a breakout, the worst action you can see?

Mondays have generally tended to undercut some of the gains of the prior week but that pattern can change if the market character changes, and there was some character change last week with NASDAQ volume growing as it made a new post-November high. As noted it can reverse head and shoulders but that would require a failure of the new money and prior holders. We do anticipate a test of the breakout as some important names such as AAPL, RIMM and others test back after their long runs and now that earnings are out. We are looking to play that; RIMM looks particularly ripe and AAPL gapped higher Thursday and lower Friday in a reversal move.

SP500 and DJ30 are not nearly as strong as NASDAQ, and if the chips are coming back to test those two will likely come back to test in their ranges as well, the key being whether SP500 returns just to 850 or heads on down to 800ish again. 800 would be better as it sets up a better move and gives us more gain on our SPY plays, but the market does not always do what folks think is better.

We have a mix downside and upside plays this week. We are looking at some strong top stocks to the downside; that may surprise some but if they show gaps lower, etc. they are ready to play to the downside. As for upside we have some plays that are setting up for moves, but if the overall market pulls back they likely continue their consolidations, etc. Moreover, a test allows some sectors that are consolidating already to finish up their bases, e.g. semiconductors.

In short a pullback would really set up the next run nicely. Again, however, the market does what it wants to do and thus we are ready with new buys at this point as well as some downside. Friday we had some chances to take some upside positions, but Fridays, especially when the market is extended, are not our favorite entry points. Thus on a weak Monday we may get some more opportunities but we are also watching for what could be a more substantial test, particularly if NASDAQ stumbles after its break to a new high. It did that in late March, Early April, and twice mid-April: every time it hit a new high it sold back 2 to 3 sessions to test it.


Support and Resistance

NASDAQ: Closed at 1694.29
Resistance:
The 200 day SMA at 1770
1770 is the mid-October interim peak
1780 is the November 2008 peak
1947 is the October gap down point

Support:
1666 is the intraday January 2009 peak
1661 is the April 2009 prior peak
The January closing peak at 1653 (intraday)
The 18 day EMA at 1618
1623 is the early April peak
1620 from the early 2001 low
1603 is the December peak
1598 is the February 2009 peak, the last peak NASDAQ made
1587 is the March 2009 high is getting put to bed again
1569 is the late January 2009 peak
The 50 day EMA at 1555
1542 is the early October 2008 low
1536 is the late November 2008 peak
1521 is the late 2002 peak following the bounce off the bear market low
1505 is the late October 2008 closing low.
1493 is the October 2008 low & late December 2008 consolidation low


S&P 500: Closed at 866.23
Resistance:
866 is the second October 2008 low
878 is the late January 2009 peak
889 is an interim 2002 peak
896 is the late November 2008 peak
899 is the early October closing low
919 is the early December peak
944 is the January 2009 high

Support:
857 is the December consolidation low; cracking but not broken
853 is the July 2002 low
848 is the October 2008 closing low
846 is the April peak
842 is the early April peak
839 is the early October 2008 low
833 is the March 2009 peak
The 90 day SMA at 825
The 50 day EMA at 821
818 is the early November 2008 low
815 is the early December 2008 low
805 is the low on the January 2009 selloff. KEY Level
800 is the March 2003 post bottom low
768 is the 2002 bear market low
752 is the November 2008 closing low but it is not broken and done away with
741 is the November 2008 intraday low


Dow: Closed at 8076.29
Resistance:
The early April peak at 8076
The April peak at 8113
8141 is the early December low
8175 is the October 2008 closing low. Key level to watch.
8197 was the second October 2008 low
8375 is the late January 2009 interim peak
8419 is the late December closing low in that consolidation
8451 is the early October closing low
8521 is an interim high in March 2003 after the March 2003 low
8626 from December 2002
8829 is the late November 2008 peak
8934 is the December closing high
8985 is the closing low in the mid-2003 consolidation
9088 is the January 2009 peak

Support:
7965 is the mid-November 2008 interim intraday low.
7932 is the March 2009 peak
7909 is the early January low
7882 is the early October 2008 intraday low. Key level to watch.
7867 is the early February low
The 50 day EMA at 7801
7702 is the July 2002 low
7694 is the February intraday low
7552 is the November closing low. KEY Level.


Economic Calendar

These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.

April 28 - Tuesday

Consumer Confidence, April (9:00): 28.8 expected, 26.0 prior
Case/Schiller Home price index , February (10:00): -18.85 expected, -18.97% prior

April 29 - Wednesday

Q1 GDP advance (8:30): -4.95 expected, -6.3% prior
Q1 Chain deflator (8:30): 1.7% expected, 0.5%
Crude oil inventories (10:30): 3.8M prior
FOMC Monetary Policy Decision (2:15)

April 30 - Thursday

Initial jobless claims (8:30): 640K prior
Personal income, March (8:30): -0.2% expected, -0.2% prior
Personal spending, March (8:30): -0.1% expected, 0.2% prior
Employment cost index (8:30): 0.5% expected, 0.5% prior
Chicago PMI, April (9:45): 34.0 expected, 31.4 prior

May 1 - Friday
Michigan sentiment, revised for April (9:55): 61.5 expected, 61.9 prior
Factory Orders, March (10:00): -0.7% expected, 1.8% prior
ISM Index, April (10:00): 38.0 expected, 36.3 prior

Gold Stocks in a Depression

What if deflation wins?

While we think the odds are strongly stacked against it, particularly given the government's furious pace of money printing, the prudent investor understands ― and respects ― the time-tested adage, "Nothing is guaranteed." So while our chips sit squarely on the spot marked "inflation," what will happen to gold stocks for 2010 if we're wrong?

The Great Depression Speaks

The most notable example of what happens to gold stocks 2010 in a prolonged deflationary environment is the Great Depression. However, the United States was on a gold standard at the time, so miners had a guaranteed selling price ― which was a good thing for them, because their operating costs were plummeting. So the comparability isn't perfect, but let's see what we can learn.

When the best stocks market crashed in 1929, gold stocks were part of the general wreckage (sound familiar?). The market then rallied and recovered almost 50% of its losses by April 1930, with gold shares again tagging along. It's what happened next that gives us our first clue about deflation's effect.

When the bear market resumed in the summer of 1930, all securities sold off again ― except gold stocks. Gold shares stayed basically flat until early 1931, when they boarded the elevator and headed for the penthouse.

Let's look at how shares of Homestake Mining, the largest gold miner in the U.S. at the time, and Dome Mines, Canada's senior producer, performed during the Great Depression.

And the chart doesn't show that you could have bought both best stocks at half their 1929 price five years earlier, which would have led to gains of around 1,000%. And get this: both companies paid healthy and rising dividends as the depression wore on; Homestake's dividend went from $7 to $15 per share, and Dome's from $1 to $1.80. 

Yes, volatility was high in the gold stocks of 2010 throughout the depression, with occasional wild price swings, but after the 1929 crash most of the volatility was to the upside.

The bottom line is that the two largest gold producers ― during a time of soup lines and falling standards of living ― handed investors five and six times their money in four years.

From Homestake's chart, you get a clear picture of what the stock did compared to the market as a whole: 

You'll notice the large spike down in both Homestake and the Dow during the 1929 crash...but then look at Homestake's recovery immediately afterward, returning close to its old high. This is eerily similar to our recent pattern: our best stocks of 2010 sold off violently last October but have since doubled or more from their bottoms.

You'll then notice that Homestake took almost two years to exceed its old high, but once it broke out, it was off to the races. The stock doubled four times in five years during a seven-year run to its peak after the '29 crash.

The conclusion? If history is any guide, gold stocks 2010 can hold their own against deflation. And they could profit tremendously if the demand for gold as a safe haven continues to grow.

Gold vs. Deflation

On April 5, 1933, President Roosevelt issued an executive order forcing delivery (confiscation) of gold owned by private citizens to the government in exchange for compensation at the fixed price of $20.67/oz. And less than nine months later, he raised the gold price to $35, effectively diluting the dollar in every wallet 41% overnight and swindling everyone who had turned in his gold.

We don't know exactly what an untethered gold price would have done during the depression, but given its distinction in history as a store of value, it's likely to retain its purchasing power in a deflationary setting regardless of its nominal price. In other words, while the price of gold might not rise, or could even fall, your best protection is still gold.

But with this said, the overriding concern is that in a fiat system, any deflation will be met with an inflationary overreaction (as we're seeing). And the worse the deflation, the more extreme the overreaction will be.

It's for this reason that the editors of BIG GOLD urge you to own physical gold, in your possession and under your control, given its reliability as a store of value in both inflationary and deflationary environments. If you have less than our recommended one-third of your investable assets in some form of gold, check around for places to buy gold coins and bars at good premiums.

The Silver Lining

For those with an inclination toward silver, our research points to clear signs that silver is increasingly being viewed as a store of value and not just as an industrial metal.

Here's a comparison of silver's performance vs. base metals over the past six months (10-1-08 through 3-31-09), which includes last fall's meltdown:

If silver were viewed solely as an industrial metal, the price would be off sharply.

This doesn't mean we think silver or silver stocks can't go temporarily lower from here, but rather that the demand for silver as a store of value metal will be growing.

Bottom line: Whether we're served debilitating deflation or insidious inflation, holding gold (and silver), along with an appropriate allocation of precious metals stocks for 2010, offers us both a fort for protection and a canon for profit.

Buying physical gold and silver as safe-harbor assets is for many investors a no-brainer at this point. But only a few have heard of another prudent gold investment ― one that has gone up more than 50% in 2008, at the exact same time when the overall best stock market bombed. You don't want to miss out on owning this "48 Karat Gold" stock…

 

Inflation has a hard time of it when the currency is tied to gold and/or silver. That's why the collectivists like to cut those ties whenever they can.

During a deflationary depression things get cheaper in terms of whatever happens to be money. Governments like to fight deflation by making saving (holding onto money) less attractive; that is, they like to inflate. Gold sort of puts the kibosh on that, hence the state's hatred of the stuff.

Now to your letters. Here's one that snuck in just in time for publication…

Gary,

I enjoy the give and take that is flowing through the bar.  I have a couple of observations on taxation and capitalism.

First, I think of myself as what is today termed a conservative.  I support free enterprise and capitalism, not because I think they are perfect but because they seem to be about the most effective systems that humankind has developed for taking care of the most people and providing the most possible people with higher standards of living.  That said we have on obligation to apply them, as individuals and capitalists with some responsibility and recognition that our resources are not unlimited and that people are not to be exploited.  We need to be observing the golden rule of treating others as we would like to be treated. As regards our natural resources we have an obligation to use them carefully and wisely and to only use what is really needed, in other words not to waste what we have or to exercise good stewardship. 
  
Second, regarding taxation, we need to decide what the purpose of taxation is.  A mildly progressive system may not necessarily be bad, but what is its purpose?  Are we trying to raise revenue? Are we trying to punish the people who work hard and are successful? Or are we trying to bring everyone down to basically the same level so that the state has all the power?  If the issue is generation of revenue then we need to look at the tax cuts that went into place under first Kennedy, then Reagan, then G.W. Bush.  Each of these sets of tax cuts generated significantly more revenue, course Congress could not control itself and for every $1 increase in revenue spent $2, so to speak.  Never the less, if revenue is the objective then the Administration and Congress should be looking at carefully, even cynically, lowering taxes to maximize revenue.  There is a point when the rates will go so low as to cause a lowering of revenue; at that point they could be raised back to optimum point.  This whole concept seems to be foreign to our higher level elected officials (I serve on a Town Board), so apparently the intention is not to raise revenue, but to accomplish some other objective.

Thanks for the thoughtful letter. Now to a Shooter who's been a little disappointed lately…

Bartender,
 
I was a little disappointed to down the latest shot of W & G to find so much attention by so many smart shooters given to Comrade "God I hate conservatives". There will always be those who look at others who have more than they do and chalk it up to an unfair 'system' where invisible forces keep them at bay while their neighbor with the big house, Mercedes, and hot wife has free reign. It is not their lack of ingenuity or hard work that has condemned them, but the others guy's unfair advantage. This attitude is ripe in college dormitories and public housing projects alike. Universities are infiltrated by leftist professors who attack the founding fathers of this country as the homogenous evil 'white men' who disdained diversity and paying taxes, and the Second World War should be remembered less for the defeat of aggressive militaristic forces as much as it should be for the racist internment of Japanese-American s. Oh, and then there are the 'accomplishments' of the spirit of the 60's and the wonders of Affirmative Action. I can go on and on (and all of it from actual classroom examples I was forced to sit through). The point is, a college student indoctrinated by this bunk while simultaneously protected by the womb of a state institution and regular checks from Mom & Dad quite naturally views government along those same lines: a 'protective blanket' that should provide for everyone while keeping things 'fair & equal'. My guess is this confused fellow will sing another tune when he stands on his own feet and earns what he has, only to see a growing piece of his own pie sliced away and thrown into the governmental black hole.
 
Now, can we please get back to you providing me with the investment roadmap I am so sure I will sorely need?

Fine. Let's take a look at this peak oil thing again…

So, in light of your current issue, the concept of "peak oil" is just so much claptrap.  There's enough oil in the form of heavy oil, to last for several hundred years and Kunstler et al are mere calamity howlers.  Hah! I thought so all along.

Not so fast, Shooter!

Peak oil hasn't gone anywhere and James, Byron and all the rest never said we'd run out just like that. The point is that what's left will be increasingly difficult to get and require higher energy investments in the first place.

The EROEI (Energy Returned On Energy Invested) or "bang for the buck" is bound to start decreasing. Industrial civilization has to run faster and faster just to stay in place.

Friend and contributor James Howard Kunstler does a great service by exploring the links between peak oil and vanishing wealth. The takeaway lesson is that standards of living are likely to drop for the unwary.

But here in the Whiskey Room we do our best to make sure that those who patronize this bar are very wary. If you have an idea of what's coming, you can prepare and―perhaps perversely―have your standard of living rise while most of your friends and neighbors watch in dim disbelief as theirs fall.

Byron King could help you out with that. He knows where the money will be heading due to the changing energy landscape. Click here to read more.

And finally, this Shooter enjoys the show, but feels there is a lack of helpful detail…

Gentlemen:

I find your writing refreshing and informative but often incomplete.

You do not go into the tax code like you should. Anyone in finance should study the tax code since it is not how much you make but how much you keep.

The current field for making money is not level, particularly for the rich. Under the IRS code, the rich (unlike the wealthy who are more taxed as a percentage of their compensation/income than any other class) if they structure their wealth properly, particularly in offshore Family trust corporations, pay little tax as a percentage of their total compensation. This is because their compensation is largely in the form of capitalization or unearned income rather than earned income (the distinctions are tax distinctions).

Given a family trust corporation, you can (under section 230 and231 of the IRS code) accumulate money for years without bringing it home ( the mainland) and then bring it home under a favorable political environment ( Bush- December 2004- 5.67% levied tax) and be taxed very lightly. Or a "special bill" provided by your House of representative, who you have supported with generous political contributions for years, will have this bill attached to the once a year general revenue bill that the president has to veto in total or affirm in total and it will say that on such and such a time and day, a certain sum of money from a certain corporation located in a certain untaxed foreign jurisdiction will transfer 100 million dollars (of which 50 million is profit) to a certain bank in the US free of all federal, state and local taxation under the Fe deral Supremacy Clause- i.e. NO TAX. AND A NEW HIGHER BASIS POINT WITH THE 100 MILLION BEING TRANSFERED OUT AGAIN BACK TO THE FOREIGN UNTAXED JURISDICTION. You speak of a system of a capitalist system that does not exist especially for the rich.

Do some work in US taxation law and accounting; it will help you and your readership.

The tax code is theft wrapped in bureaucracy wrapped in torture. I would dispense entirely with it if I had my druthers.

There are times when taxes are sensible means of support because they simplify payment for things that all the taxpayers desire. Municipal infrastructure comes to mind.

But usually taxes are just a way to fund things that the market would never allow, like welfare, bread, circuses and wars of aggression. And the ever-increasing and staggering complexity of the tax code is enough to make hardened men want to curl up and weep.

Speaking of which, it's about that time of day. The bar will be shutting down for the afternoon slump. Your editor will be pulling down the blinds, sitting very still and contemplating his sins.

How To Trade In Tandem With The Market

On Wednesday of last week, the market staged a "negative reversal" as it found resistance at the place it formed a double top (often the first sign that a change in trend - from up to down - is near).

The market wasted little time as, on Thursday, the markets triggered a short-sell by breaking below their upward trend lines. This is what we teach you to do - trade in tandem with the market. When the market triggers a short-sell, we want you to be going short in stocks that are also triggering a short sell.

So that said, here's what happened Thursday:

Step 1 -- Market signals it's time to go short

Both the Dow and Nasdaq formed a Double Top (red lines) and signaled it's time to go short by breaking below their upward trend lines (green on the Dow, pink on the Nasdaq):

Step 2 -- Watch the short-sell trades get triggered

Friday was a great day to do anything else but watch the market as it was your typical low volume, do nothing, pre-holiday trading day.

So where does that leave us now? Well, since the market just triggered Thursday, and Friday was a do nothing, pre-holiday trading day, we are very well positioned to benefit from continued declines in the market and a likely move down to its 50-day. We'll be looking for that to happen early next week. At that point, we'll be looking for the market to bounce and move higher.

So in advance of the market hopefully finding support and bouncing at its 50-day moving average, we are getting prepared to make the most of the market's next move higher. Just like when the market signaled it was time to go short, the market may soon signal it's time to go higher and we want to be prepared on the long side.

The Pullback Off Highs pattern is one of the most bullish and constructive long-side set-ups out there. Rather than go straight up, an index or stock will make a move higher, then spend some time consolidating those gains often down to an area of chart support such as its 50-day moving average, before making another move into new high ground.

When a stock clears these consolidation periods, it's your opportunity to buy them and take advantage of the next run -- and the bonus part is when you catch a stock at the beginning of a new uptrend, you'll often get to trade the stock and lock in profits over and over again. You are buying it at the point where it's just started a new move and is near support, which minimizes your risk.
 
On Wednesday of last week, the market staged a "negative reversal" as it found resistance at the place it formed a double top (often the first sign that a change in trend - from up to down - is near).

The market wasted little time as, on Thursday, the markets triggered a short-sell by breaking below their upward trend lines. This is what we teach you to do - trade in tandem with the market. When the market triggers a short-sell, we want you to be going short in stocks that are also triggering a short sell.

So that said, here's what happened Thursday:

Step 1 -- Market signals it's time to go short

Both the Dow and Nasdaq formed a Double Top (red lines) and signaled it's time to go short by breaking below their upward trend lines (green on the Dow, pink on the Nasdaq):

Step 2 -- Watch the short-sell trades get triggered

Friday was a great day to do anything else but watch the market as it was your typical low volume, do nothing, pre-holiday trading day.

So where does that leave us now? Well, since the market just triggered Thursday, and Friday was a do nothing, pre-holiday trading day, we are very well positioned to benefit from continued declines in the market and a likely move down to its 50-day. We'll be looking for that to happen early next week. At that point, we'll be looking for the market to bounce and move higher.

So in advance of the market hopefully finding support and bouncing at its 50-day moving average, we are getting prepared to make the most of the market's next move higher. Just like when the market signaled it was time to go short, the market may soon signal it's time to go higher and we want to be prepared on the long side.

The Pullback Off Highs pattern is one of the most bullish and constructive long-side set-ups out there. Rather than go straight up, an index or stock will make a move higher, then spend some time consolidating those gains often down to an area of chart support such as its 50-day moving average, before making another move into new high ground.

When a stock clears these consolidation periods, it's your opportunity to buy them and take advantage of the next run -- and the bonus part is when you catch a stock at the beginning of a new uptrend, you'll often get to trade the stock and lock in profits over and over again. You are buying it at the point where it's just started a new move and is near support, which minimizes your risk.

Green Shoots? Not According to Richard Russell

As I wrote last week, wisdom is where you find it.

And while I admit that is a tad generic, finding wisdom is the easy part as long as you're willing to look for it.

However, actually following the words of the wise is another matter entirely, since they always seem to be a whole lot more prophetic in hindsight. Even still, more often than not, it pays to know the opinions of people who "have been there and done that."

That's why when guys like Richard Russell have something to say about the direction of the markets, people listen.  

After all, Russell has not only seen it all, but he also has the market-calling history to back it all up. For him, this recession is just the latest in a long string of them.

His market prism ― as always ― has been Dow Theory, which has served as the very basis of technical analysis for over 100 years.

Using Dow Theory to Predict Price Action

Created in part by Charles Dow himself, Dow Theory is a market system that uses trend analysis to chart which way the market is headed.

In fact, in the simplest terms, it is a system which basically says the market is in a bullish trend if one of its averages ― either the Dow Jones Industrial Average (^DJI ) or the Dow Jones Transportation Average (^DJT) ― advances above a previous important high and is followed by a similar advance in the other.

Conversely, the theory also states that when both averages fall below previously important lows, the market is in a bearish trend.

The logic behind this, of course, is pretty simple. You see, Dow believed the general performance of the stock market was a reliable way to forecast the overall business conditions within the economy. 

Thus, if one could accurately gauge the price performance of the broader markets, a bullish or bearish trend could be established ― along with the likely direction of individual top stocks.

In this regard, Dow theorists closely watch the price action in the transportation and industrial averages, since the overall broad market trend must be confirmed by their moving in tandem on increasing volume. One moving without the other, to Dow theorists, is a false signal.

In fact, if one index does not confirm the other, then it is a warning sign that the current trend may be over and positions may need to be liquidated.

Of course, the reason for identifying the trend is to trade with it, not against it. After all, that is how good traders manage to stay ahead of the markets.

These trends, according to Dow theorists, are either primary or secondary.

The primary trend is more vital, generally lasting for one to three years. In short, it's the longer-term trend which is either bullish or bearish.

Along with it are the secondary or countertrends that occur along the way, since no market goes either straight up or straight down. As such, these move in the opposite direction, producing either bear market rallies or bull market corrections. Typically, these can last from anywhere from three weeks to three months.

Knowing the difference, of course, is what trading the trends all is about.

Richard Russell's Market Call

But short of being a market technician yourself, there is always the judgment of Richard Russell. He has seen enough of both these trends to have an educated opinion on them.

Here's what he wrote about the state of the markets in April, as the current rally was gathering steam:

The market situation has seldom been more confusing. Many analysts are convinced that we are in a new bull market. Others (me included) believe we are in a bear market correction (rally).

Because of the confusion, I'm going to step out and make a few guesses (might as well, since nobody really knows what's going on).

1) I believe that we're in a secondary (upward) correction of a bear market. I'm going to guess that this correction could rise further or at least last longer than most people are expecting. A bear market rally is supposed to convince the majority that a new bull market has started. The rally will often continue until a large number of investors are back on board, and then the bear will kill them as it fades away, leaving the new optimists high and dry and with losses.

2) Gold is in a downward correction of its primary bull market. Gold may decline or stall until it convinces the majority of gold-fans that the gold bull market has died. Holders of "paper gold" and gold futures and options will be frightened out of their holdings. What we're experiencing now is the big correction that often occurs prior to the third speculative phase in gold. Holders of physical gold (coins, bars) will do best, since they will tend to hold on to their gold positions no matter what. 

So what are the markets trying to do? They're doing what they always do, keep investors in the equity bear market and keep investors out of the gold bull market. Why would they do that? Because that's the very nature of markets. Markets tend to thwart the majority. And that's logical and self-evident. If markets existed to make money for the majority, then most market participants would be millionaires, and we know that sadly, that is not the case.

So, in the view of a very wise man, the current run up is nothing more than a bear market rally. Meanwhile, the primary market trend remains bearish ― unless you've invested in gold. (Russell thinks gold is about to enter the "mania phase.")

"This bear market will be deeper and longer than most people think," the legendary market watcher said recently. "People got optimistic too quick."

Great stuff, Mr. Russell.

As for the "Green Shoots," I don't really see them either.

Heavy Oil Starts Looking a Lot More Enticing

When most people think of oil, they think of light, sweet crude that comes up out of little holes in the ground. You describe oil by its API gravity. For example, oil like Brent crude or West Texas Intermediate has an API gravity of 38-40. The oil that Col. Drake pulled from the ground at Titusville, Pa., in 1859 had API gravity near 60. These types of oil are relatively easy to pump from a reservoir, lift to the surface and transport via pipeline to the refinery.

The Shift to Heavy Oil, with an "Energy Microsoft" at the Forefront

But a significant portion of the world's oil is much lower quality than the light, sweet stuff. Indeed, most oil that's found in nature is a heavy, viscous hydrocarbon with the consistency of cold molasses. This heavy oil ― defined as API gravity 22.3 or less ― is difficult and costly to produce and refine. That's why people have pumped and burned the light, sweet oil for the past 150 years. Throughout its history, the oil industry has usually bypassed the heavier oil fractions. Why go to the trouble and expense, right?

But now conventional oil resources are drying up. The reasons have to do with geology, politics, macroeconomics and the investment cycle. Boiled down, it's the Peak Oil argument, which focuses on the worldwide decline in output of light, easy-to-get oil. And Peak Oil is a serious matter. As light oil gets scarce, however, a lot of new heavy oil plays are coming out of the industrial shadows.

Indeed, with the breakout of heavy oil into the marketplace, the world energy business is about to change dramatically. It's kind of like what we saw with the computer revolution that began about 30 years ago. Big, heavy mainframes gave way to small-scale, distributed and personalized computing power. At the heart of the revolution was the operating system, much of which wound up coming from Microsoft.

Today, the energy industry is on the cusp of a revolution equally profound. And in the forefront of that change is the company that I'll describe in this issue of Energy and Scarcity Investor. This visionary firm is sort of an "Energy Microsoft."

How Much Heavy Oil is Out There? A Lot!

First, let's define a few terms and look at some numbers. According to oil service giant Schlumberger, only about 30% of the total world oil resource is the conventional, light, sweet crude (technically, API gravity 22.3 and above). Heavy oil (API 22.3 and below), by comparison, makes up about 15% of the world's oil resource. Extra-heavy oil (API gravity less than 10) makes up 25% of the world's oil resource. And nearly 30% of the world's oil resource is in the form of tar sands and bitumen (with API gravities in the low single digits ― it doesn't flow at all).

Schlumberger estimates that there are between 6-9 TRILLION barrels of heavy oil in the world. Big numbers, right? Especially since the current total world demand for oil is in the range of 30 billion barrels per year. With heavy oils, we're talking about 200-300 years' worth of potential supply. (That's at current rates of use. If we can get it all. Which we can't. So it won't happen. But it illustrates the point.)

Where is all of this heavy oil? Here are the nations with the largest estimated deposits:

This list goes on to include other nations with significant heavy oil deposits, such as Brazil, Saudi Arabia and Indonesia. Further down the list of countries holding sizeable heavy oil resources are Australia, South Africa, Nigeria, Libya, Argentina, Peru and Vietnam.

So you can see that heavy oil (and extra-heavy oil, tar sand and bitumen) is a vast and underutilized energy resource. Of course, keep in mind that nowhere near all of this resource is recoverable under even the best scenarios. But the point is that heavy oils, of all types, constitute immense energy potential ― many decades worth of supply. And it's all but certain that, as conventional oil becomes scarcer and more expensive to extract, the world's energy industry will turn to heavy oils. It's already happening.

Early and Current Efforts with Heavy Oil

Looking back in history, people and nations used heavy oils when necessity demanded. During World War II, Italy supplied its military (and the military of Germany) with oil products from a modest-sized heavy oil deposit in Albania. The Soviets, desperate for oil products, utilized several heavy oil deposits in south-central Russia. The Japanese exploited heavy oil deposits in Japan, Indochina and Indonesia.

Today, the energy industry has an array of projects that exploit heavy oils. Chevron, for example, lifts about 80,000 barrels per day of heavy oil from its large complex (of 8,000 wells!) at Kern River, California. Venezuela's national oil company PDVSA produces about 400,000-500,000 barrels of heavy oil per day from projects in the Orinoco region. Offshore Brazil, Petrobras has a deep-water project targeted at a string of heavy oil deposits. And BP has several billion barrels of heavy oil resources located under the Arctic tundra near the conventional oil fields of Prudhoe Bay, Alaska.

When it comes to tar sands and bitumen, the massive developments in western Canada offer a $500 billion example. The Canadian tar sands projects currently yield nearly two million barrels of oil per day out of bitumen, strip-mined from the near-surface prairies of Alberta.

Next week, I'll be in Denver for the American Association of Petroleum Geologists (AAPG) convention. I've been a member of AAPG for 30 years, and it's been a source of great professional education and growth for me. I'll attend the exhibits and talks and meet with several energy companies to get the latest insight into what's going on out in the field. I'm even scheduled to be a judge on some of the programs for geothermal and heavy oil. All that, and I'm visiting with some hard rock miners while I'm in the area.

Naturally, I'll look for great investment ideas and keep you posted.

 

Always a pleasure to have Byron at the bar. I would also like to extend a note of thanks to fellow editor Matt Insley (occasional contributor and Extra Secret Byron Liason) for helping me get this issue together for you.

Don't forget! Byron will be on the Whiskey Bar panel at the Agora Financial Investment Symposium. We'd love to have you join us.

To your letters!

To the guy that wrote, "God, I hate you conservatives.":

He tried to make the case for progressive taxation to keep the wealthy from getting wealthier and holding down the masses. If his thesis were correct, there would only be a handful of super rich, and the rest of us would be scraping the rubbing off our necks from their boots. How the hell does he think those people became millionaires? They worked. They were more dedicated, driven, and probably smarter as well. I am not a millionaire, although twice in my working life I was. I'm not bitter, confused or looking for a rich scapegoat. I'm 65, still working (my own business as before) and guess what? I'm making a go of it in this miserable economy.

Us older folks have a small advantage.  We've seen this before, many times, and have pretty good instincts, along with good advice, (thanks guys) and while everyone was blinking, we looked elsewhere in the economy. I don't have it all down pat, but we must have it at least half-right. I have always made the most progress during the worst of times. I would tell that loser to get off his ass, stop writing from bitterness, and get to work!!!!! The tax laws look a lot different from the top of the heap.

Good point, but you know that people like he are just going to say that the only reason that capitalism hasn't resulted in most of us with fancy boots on our necks is because of the safeguards put in place by the collectivists. Also for such people good can only come from the state. To them the scheming mind of the bureaucrat is better than that of the engineer and the physician.

A reader and regular correspondent takes issue with my definition of capitalism…

In my opinion, it is you who has to get your terms straight. Capitalism IS by definition "heedless, rapacious greed." Capitalism has no conscience and no master other than the bottom line and anything that gets in its way, whether that thing is flesh and blood, a commodity or a natural resource to be exploited and destroyed, is only useful if it can be consumed by the corporation. You confuse capitalism with free enterprise "where people are free to pursue the crime of their own best interest" as you, tongue firmly in cheek, stated.

But I would maintain that free enterprise is a tenet of a capitalist system, just as progressive taxation is a manifestation of covetousness and coercion.

This reminds me of a conversation I had with a progressive acquaintance in my last watering hole in New York. Whenever the words "exploitation" and "greed" came up, he'd yell "That's capitalism!"

I begged to differ. He ― like a lot of folks ― just lumped everything he hated about the world under the rubric of capitalism. "Capitalism" was his personal shorthand for corporate welfare, the destruction of the rainforests and the clubbing of baby seals. 

I also recall an internet poster on one of the sites I troll who maintained that Stalin was a conservative! But Stalin and his ilk are just the sort of emotionless men of will who take statism to its logical conclusion of centralized planning, repression and mass murder.

While we're at, let's note the way the word "liberal" itself has been perverted over the years…to the point where classical liberals had to go and get themselves a new moniker (libertarian).

It's like old school conservatives and liberty types are being framed.

Hello Barkeep:

Thank you for all of the shots and target practice.  It is interesting to learn in the latest release that you are a "conservative."  Of course "progressives" rarely let facts or history confuse things.  It may make their heads explode to learn that libertarian though is most closely aligned with "classic liberal" philosophy a la Thomas Jefferson.  Then again, with all of the Orwellian doublethink coming from government, Main Stream Media, and schools (or do I repeat myself?) it is easy to understand the confusion when presented with new information.

The meddler states, "The system we have is a very good one except that the top rates have been lowered too much."  Did the meddler mention when the rates were lowered too much?  I consulted Wikipedia and it seems that the progressive tax, in various incarnations, has been tried repeatedly and still does not seem to please your reader.  Perhaps that is because the system simply does not work?  Does anyone notice that the wealthy tend to remain wealthy even with all of the meddler schemes?  Here is an example of New York state using progressive thinking to drive another tax paying citizen to relocate.  The phrase "unintended consequences" leaps to mind. 

Note: My favorite part of the Wikipedia entry is "Arguments against the U.S. income tax."

James Howard Kunstler is a not exactly a little ray of sunshine, but the more I learn from various sources the more I tend to agree with many of his insights.  He discusses the impact of peak oil and I agree that it will be profound.  Another looming crisis is water and how it is used.  While W.C. Fields has some valid points about water versus whiskey, water is still valuable.

Thanks again for all of your mixing and pouring.

You're welcome! Thank you for the delightful letter.

Here's another missive in regards to yesterday's conservative-hater (note liberal use of italics by your editor to indicate hand-clapping):

The writer claimed that history would back up his claims.  This is not so.  History is a record of the accumulation of wealth and power and the abuse of both.  This has nothing to do with progressive or regressive taxation except that, historically, those who had the power to tax used that power to accumulate wealth and power and then abused that power.  This writer seeks to grant greater power to the taxing class over the taxed classes in the name of fairness and egalitarian values.

An egalitarian society is one where everyone has an equal chance to earn an income, to be recompensed for their labor and their industry.  It follows that this egalitarian society would also be one where everyone would get to keep their earnings and use them as they saw fit, not as the taxing class sees fit.  If this were so, then the people, like this writer, who wish to 'spread the wealth' would never get the power to favor some while holding others back; which is what happens in a society with "progressive" taxation.

There is no way to make taxes "fair".  Someone would always have to surrender a larger percentage of their total purchasing power than another who had more money.  When we followed the Constitution and limited taxes to imports we at least didn't deprive anyone except the wealthy while we supported domestic enterprises.  In any case taxes only benefit tax collectors or social parasites who perpetually think that whatever their condition is it must be someone else's fault and that no one should have more than anyone else.

I recall a conversation I had with a college student friend who was just like that writer.  He thought that inheritance taxes should be 100%.  Not so he could have any of it but because he hadn't gotten any.  He had to work to get through college and resented his fellows because so many of them had parents who had saved enough money to put their kids through school without any hardships.  He thought the money, earned and saved through a lifetime, or several lifetimes, should be returned to the government where it came from.  Then there would be enough for everyone to go to college (or, presumably, do anything else their hearts desired) and we would all be equal.  No amount of evidence could dissuade him.  Instead he just got louder, as if shouting would prove his position against the example of historical proo f.  Hope you find this of some use someday.

Good points and a wonderful letter, but to many "egalitarian" means the ridiculous notion of forced equality. There is no such thing as equality of men, merely equality of treatment before the law.

Thomas Sowell reminds us that no man is even equal to himself from day to day. Some of us are smarter, prettier, more fragrant, stronger and faster than others. Some of us will be luckier in money and in love.

All of us are going to get different results out of life. No amount of whining, political envy and redistributive tax law will change that.

The "Axis of Overspending," Inflation and the Rush to Precious

Top Stocks Investment Report:
 
I have been banging the drum so hard for precious metals that readers must know the drill by now. Government spending is out of control. We have a big-spending Congress in Washington that can't say no to anything (except the token defense cut, or taking away school vouchers from inner-city kids in the District of Columbia). It's been going on for way too many years, under both previous and current party management.

Everybody who's anybody in this country, it seems, gets a permanent, pet government program, if not a large bailout. (Huh? You didn't get your program or bailout?) How long can it last? I think we're about to find out.

As Bernie Madoff might say, "Bailout, schmailout." Still, the axis of overspending leads to inflation. It's the 1970s redux. And inflation will soon rear its head and roar so loud that even the wizards of Washington will have to admit the obvious.

Actually, our betters in Washington are waking up to the issue of inflation and the decline of the dollar. Just yesterday, I received an inquiry asking if I want to appear on a nationally syndicated show that originates from Washington, D.C. (well, Alexandria, Va., to be exact). The audience is Washington people - you know the type - and their intellectual and spiritual kin in "blue spots" across the country.

Here's the exact inquiry:

"We're doing a story on hoarding behavior and I am looking for people who have taken some (or all) of their savings out of traditional top stocks investments and are now storing money as cash or in the form of physical gold or some other precious metal in a safe or secret place. I am having trouble finding anyone like this. Do any of you know of someone who fits this description, who might be willing to talk to me about it? I am looking for someone in Boston; Washington, D.C.; New York; or maybe Chicago. If anyone has any leads, please let me know!"

Oh, man! That's rich! Verbatim! Honest to God, I have not edited this inquiry by EVEN ONE WORD! These people are clueless!

The producer wants to interview gold bugs for the show. In an anthropological fashion that would do Margaret Mead proud, the subject of the story is "hoarding behavior." But the poor producer says, "I am having trouble finding anyone like this." (Like looking for a registered Republican at the Harvard Faculty Club?) And how about that request to find somebody in Boston, Washington, New York or Chicago? If you're from, say, the silver mining town of Wallace, Idaho, you need not apply.

Here was my reply: "People who've taken their savings out to buy gold and store it or hide it probably don't want to brag about it on NPR."

Remember that line from the movie Apollo 13? "Houston, we have a problem."

Wow. Do we have a problem in this country, or WHAT? It's WORSE than Apollo 13. We should be so lucky as to be in a small capsule in the cold of space heading away from Earth toward the moon with almost no oxygen or electrical power. Instead, we're watching the national currency declining and dying right before our eyes. And the opinion makers of the nation don't know anybody who owns gold. Amazing!

Top Stocks For 2010

Well, the producer could always go find somebody in Dubai. Because from that distant desert kingdom comes word that the Dubai Multi Commodities Centre (DMCC) has finished building a state-of-the-art precious metals vault, with world-class tracking and security systems. Think Fort Knox, but in the desert and without the trees and pretty landscaping we see in the hills of Kentucky.

You want "hoarding behavior"? The new vault will become the home for the exchange-traded fund (ETF) of Dubai Gold Securities. Also, "It's a natural home for the central banks in the region to store their gold in Dubai, rather than in London, where they have typically held their gold," said a Dubai-based gold dealer INTL Commodities DMCC's CEO Jeffrey Rhodes. Yep. "Natural home." (Margaret Mead, call your office!)

A DMCC official stated that the new vault will be used to store precious metals associated with precious metal-based ETFs that are on the drawing boards and scheduled for launch later in 2009. This can only add to worldwide demand for gold and silver, especially from the traditionally gold-friendly Middle East.

OK, so here's the bottom line. When the American people realize that the dollar is in for another round of inflation, they're going to look for a way out. When people envision the future decline in their purchasing power, we'll see a rush for the monetary exits. It'll be the "Gold Panic" of 2009, or 2010 or 2011... Whichever year gets the naming rights.

When the reality sinks in, people will flock in droves to physical precious metals (yeah, try to get some!), as well as mining shares. I'm old enough to remember the last time it happened, in the 1970s and early 1980s. And I've studied enough history to know it won't be pretty.

So beat the gold stocks rush! Hoard now!

Jun 3, 2009

Still Think the Free Market Is To Blame?

Last April, I wrote an article for Wealth Daily titled "There Is No Free Stocks Market in America." 

The thesis of the article was simple: The current financial crisis isn't the result of a free market failure because there is no free stocks market. The current financial crisis is the result of a credit bubble created by the U.S. government.

I wrote. . .

The housing bubble was the result of a massive government stimulus plan. Right after 9/11, the U.S. Treasury and U.S. Federal Reserve cut rates to historic lows and increased money supply to obscene levels.

Couple that with the push for more home ownership. . . and what you get is a toxic brew of government-sponsored economic activity.

This raised the ire of every government lover who read my article.

Steven writes. . . "Bullcrap. Read the tea leaves, dude, and leave the Kool-aid alone."

Conner comments. . . "The problem wasn't expanding home ownership to include low income home buyers. The problem was deregulation, which is the fault of the GOP. The Clinton Administration never said do it at all cost. The GOP has always supported laissez-faire. That's the very reason why our food supply and medicine is tainted. Are you going to blame the Democrats for that too?"

Tony says. . . "The heading of your article is to the point; but like many others you are just stoking the partisan debate by pointing out what liberals did wrong instead of what you think a free stocks market should be."

And Susan writes. . . "Fess up. . . deregulation and the free stocks market are to blame. It's time for a change! Only the government can properly manage an industry like housing."

Well, well, well. . .

My article was published on April 1.

The Wall Street Journal ran this on May 12:

MAY 12, 2009 - Geithner's Revelation

He concedes that monetary policy was "too loose, too long."

The Earth stood still, the seas parted and a member of the U.S. political class admitted last week that the Federal Reserve helped to cause the financial meltdown. OK, only the last of those happened, but it's a welcome miracle nonetheless.

The revelation came from Timothy Geithner last Wednesday with PBS's Charlie Rose, who asked the Treasury Secretary: "Looking back, what are the mistakes and what should you have done more of? Where were your instincts right, but you didn't go far enough?"

Mr. Geithner: "We need a little more time to get full perspective."

Mr. Rose: "Right."

Mr. Geithner: "But I would say there were three types of broad errors of policy and policy both here and around the world. One was that monetary policy around the world was too loose too long. And that created this just huge boom in asset prices, money chasing risk. People trying to get a higher return. That was just overwhelmingly powerful."

Mr. Rose: "It was too easy."

Mr. Geithner: "It was too easy, yes. In some ways less so here in the United States, but it was true globally. Real interest rates were very low for a long period of time."

Mr. Rose: "Now, that's an observation. The mistake was that monetary policy was not by the Fed, was not. . ."

Mr. Geithner: "Globally is what matters."

Mr. Rose: "By central bankers around the world."

Mr. Geithner: "Remember as the Fed started ― the Fed started tightening earlier, but our long rates in the United States started to come down ― even were coming down even as the Fed was tightening over that period of time, and partly because monetary policy around the world was too loose, and that kind of overwhelmed the efforts of the Fed to initially tighten. Now, but you know, we all bear a responsibility for that. I'm not trying to put it on the world."

Mr. Geithner went on to cite a lack of supervision over bank risk-taking and the slow pace of government response to the problem ― both of which are now conventional wisdom. But the real news here is Mr. Geithner's concession that monetary policy was "too loose, too long." The Washington crowd has tried to place all of the blame for the panic on bankers, the better to absolve themselves. But as Mr. Geithner notes, Fed policy flooded the world with dollars that created a boom in asset prices and inspired the credit mania. Bankers made mistakes, but in part they were responding rationally to the subsidy for credit created by central bankers.

We disagree with Mr. Geithner on one point. He's right that monetary policy needs to be considered in global terms, but he's still too quick to pass the buck from the Fed to other central banks. The European Central Bank was much tighter than the Fed throughout this period. The Fed was by far the major monetary player because much of the world was on a dollar standard, with its monetary policy linked to the Fed's. That was true of China, most of Asia and the Middle East.

The Fed's loose policy from 2003 to 2005 created the commodity and credit bubbles that made these countries flush with dollars. Given their low domestic propensity to consume, these countries then recycled those dollars back into dollar-denominated assets, such as Treasurys and real-estate-related assets such as Fannie Mae securities. The Fed itself had created the surplus dollars that kept long rates low and undermined for a substantial period its belated attempts to tighten.

Mr. Geithner's concession is important nonetheless because before he moved to Treasury, he was vice chairman of the Fed's Open Stocks Market Committee that sets monetary policy. His comments mark a break with the steadfast refusal of Fed Chairmen Alan Greenspan and Ben Bernanke to admit any responsibility. They prefer to blame bankers and what they call the "global savings glut," as if the Fed had nothing to do with creating that glut.

Mr. Geithner's remarks are a sign of intellectual progress, and they suggest that at least some in government are thinking about their own part in creating the mess. The role of Fed policy should also be at the heart of the hearings that Speaker Nancy Pelosi is planning on the causes of the financial meltdown. We won't begin to understand the credit mania and panic until we acknowledge their monetary roots.

How does this make y'all feel?

Greg McCoach's Personal Portfolio

Some of the biggest gains of the last 10 years have come from the mining industry. In fact, it's not uncommon to see explosive gains on the order of 1,000% or more. 

And now, according to gold expert Greg McCoach... The junior exploration sector is back.

Its leading indicator -- the TSX Venture Exchange -- confirms it

20090518 chart

And the timing couldn't be better... because Greg has uncovered something big.

It's a unique gold play in eastern Ontario's Abitibi Greenstone belt, where over 180 million ounces of gold have been produced in the last century.

To the point -- This play centers on not one, but TWO huge discoveries.

It's about to get even worse.

If you're like most investors, the simple act of looking at your IRA or 401(k) statement over the past few months has been depressing enough.

But in just a few months... even thinking about what happened to your retirement account could make your blood boil!

That's because - at this very moment - the U.S. Government is considering a radical plan that could sabotage those hard-earned retirement dollars you still have socked away.

I call it the "Obama IRA" - and it could become a cold, hard reality for millions of Americans in just a matter of months.

Here's what the "Obama IRA" means to you:

ZERO control over your own retirement assets...

A "Guaranteed" rate of return that is only guaranteed to ensure you'll never make back what the market has taken from you over the past 12 months...

And a front-row seat for the inevitable collapse of the U.S. dollar... along with the financial chaos that will follow.

But listen up...

There's still - for the time being - a perfectly legal way for you to safeguard your retirement assets.

By taking this one simple step, you'll not only move your money safely out of reach of the U.S. Government... you'll also set yourself up for a potential blockbuster return of 50-to-1 or more.

In fact... this one extraordinary gold investment could turn a $10,000 investment into $1.23 million - using even the most conservative estimates.

I've written you this letter to spell out all the details - including just how the U.S. Government plans to come after your retirement dollars... and how you can protect yourself by acting quickly.

I urge you to take the next five minutes to read this important message...

How a 76-Year-Old Executive Order is Suddenly Your Biggest Financial Threat

I realize what I'm saying may be controversial...

But what follows is a news story you're very likely to see within the next eight months.

Does that "news story" sound like something from a far-fetched movie based in the future? Something so ridiculous there's no way it could ever happen in the good ole U.S. of A. that you know and love?

Here's the thing:

It already happened - back in 1933 when Franklin Roosevelt signed Executive Order 6102, effectively outlawing the ownership of gold by private citizens.

In fact, much of the text from the "story" above was lifted directly from Roosevelt's Executive Order. Just substitute "gold" for "retirement assets" and you'll have the original text.

And if you think taking a step as drastic as this couldn't possibly happen in this day and age... Think again!

Brazil's government confiscated its citizens' assets in 1990 - and then introduced legislation seeking the authority to do it again as recently as 2004... and Argentina took steps to confiscate private pensions last October.

And soon... if these Guaranteed Retirement Accounts - "The Obama IRAs" - become a reality, the United States of America could do to its own citizens precisely what the Argentinian government pulled off on October 28, 2008.

Listen... at this point in our economic crisis, the United States and Argentina are more alike than you think. So you can't dismiss Argentina's move to confiscate its citizens' retirement assets as a crazy action taken by a "banana republic."

In fact - a Banana Republic is defined as a country that "typically has large wealth inequities, poor infrastructure, poor schools, a 'backward' economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency."

Sounds familiar, doesn't it?

More than 75 years after FDR ordered all privately held gold confiscated... the U.S. government is about to do it again. They need cash. And this time -- instead of going after gold -- they're going after something worth even more: the retirement assets of every U.S. citizen.

History Is Repeating Itself Right in Front of Our Eyes

The period of economic prosperity - and excess - of the early 1920s was fueled in part by soaring real estate prices. But then - after 1925 - the real estate market went south, leaving many hardworking American families facing foreclosure.

And we all know what happened in October of 1929 - a devastating stock market crash that produced a slew of bank failures and a crippling nationwide credit crunch. Unemployment soon skyrocketed... and our nation's economy ground to a halt.

This frightening scenario - from more than 80 years ago - is precisely what we're facing right now.

And here's what's even scarier: Our government is about to make the same mistakes - including potentially confiscating the assets of its own citizens - all in the name of "economic recovery."

I know this sounds shocking - but in the next few moments I'm going to tell you exactly how this incredible "Obama IRA" scenario has already begun to unfold... and I'll tell you what you and I can do about it.

Here's what I mean...

The U.S. Government's Next Drastic Step:Act Now and You Might Be Able to Protect Your Assets

You can see it unfolding right before your eyes...

So that's why it's so important you take action now to protect your assets.

My name is Greg McCoach, and I'm writing you this urgent letter to show you exactly what steps you need to take immediately.

Because this situation so closely resembles the period from 1929-1934, I can tell you precisely what's going to happen next. Only this time, things will happen much faster.

More importantly - because we know what will happen next, I can show you how to protect your retirement assets.

And I'll also identify the massive, short-term profit opportunities that will present themselves at every step of the way... including a potential blockbuster 50-to-1 return that I've uncovered in the eastern portion of Ontario.

Make no mistake: we are - at this very moment - living in historic times. The world around us is changing rapidly... and that presents both danger and opportunity.

Let's start with the opportunity...

How You Can Legally Protect Your Assets from the Obama IRA...  And Profit From "The Best Gold Story in the Last 14 Years"

They say that every crisis presents extraordinary opportunity.

And the prospect of seeing the Obama IRA plan come to pass has pushed me to uncover not just a way to save your retirement assets...

You can also make back everything you've lost during the current economic crisis - and then some - with one simple investment.

Here's what I mean...

Within the past few weeks, I've closely examined the potential of a Canadian-based gold and metals exploration company that presents an enormous opportunity.

To tell you that I liked what I saw would be an understatement.

That's because I've discovered that this extraordinary company has the potential to see its share price explode from 30 cents all the way to $37 in short order.

Now before you whip out your calculator, I'll do the math for you. That type of gain would turn a $10,000 investment into $1.23 million. And I have to confess - I arrived at that figure using the most conservative of estimates.

So what gives this little-known exploration company such explosive potential?

This company has staggering short-term profit potential because it's sitting on not one, but TWO potentially explosive discoveries in a region with an unmatched history of gold discovery.

The Abitibi Greenstone Belt lies on the border of Quebec and Ontario border in Canada. And over the last 100 years it has produced more than 180 million ounces of gold.

Because of this rich production history, any discovery within the Abitibi region must be taken seriously.

And what's more... the location of this company's projects is even better news. You see, they're positioned right near existing mines, and as close as three kilometers away from one "major" exploration company. Because of the location, the likelihood of a large discovery is increased... and the infrastructure is already in place to take advantage.

On top of the favorable location - and the massive potential for each of the two properties - there's also an astounding geological story behind one of this company's properties.

The company drilled three geological holes in 2008 to determine if volcanic massive sulfide was present - and the results were positive. Since that time the company has invested a ton of money drilling additional test holes - and graphite was discovered.

This is a huge positive indicator - along with the large magma chamber that was discovered - because it's located next to an aging, producing mine... one that's owned by a major and figures to be depleted in 2014.

For all intents and purposes - any new volcanic discovery of size on this property would make it nearly impossible for the neighboring major NOT to buy this company out.

Get Back What You've Lost - and Stake Your Claim in this Once-in-a-Lifetime Exploration Blockbuster!

Now as I said - I've done the math on potential buyout scenarios. And using even the most conservative figures, I'm estimating a value of roughly $37 per share... just based on what I know about the properties at this moment.

The potential exists for even greater profits - although $37 for a 30-cent stock is certainly remarkable enough!

One legendary metals investor has already called this company "The best gold story in the last 14 years." And the truth is... he may be understating the opportunity!

This investment in a relatively unknown Canadian junior exploration company would not only help safeguard your retirement assets - moving them out of the U.S. Government's reach - but it would also position you to make back everything you may have lost during the market's recent decline... and then some.

There's only one catch. This story is moving with lightning-fast speed. It's entirely possible that the next report of favorable drill results could send share prices soaring... and at that point it will be too late.

So it's important for you to stake your claim in this potential blockbuster right away... not only to rake in the enormous profits - but also to protect yourself from the coming disaster.

I'll tell you how you can find out the name of this company - and all the relevant details - in just a moment.

But for now... I need to tell you more about that very real - and immediate - danger we're facing...

Coming Soon: The Obama IRA...Here's Why Your Retirement Assets Are at Risk

On October 7, 2008 - at a committee meeting held at the U.S. House of Representatives - an idea was floated that would eliminate tax breaks for 401(k)s and other retirement accounts...

But the idea didn't stop there.

The idea - presented by economics professor Teresa Ghilarducci - also included a suggestion that the government actually confiscate 401(k), IRA and other retirement accounts and convert them into something called "Guaranteed Savings Accounts."

These Guaranteed Savings Accounts - something I refer to as "Obama IRAs" - would take away your ability to manage your own retirement account. Instead, you would simply be paid a fixed return of three percent per year.

No more... no less. And absolutely no freedom whatsoever.

Now... the initial press coverage of this hearing was sparse. And what little attention was paid to the ideas floated that day was ultimately clouded by "political agendas" and the usual Washington finger-pointing.

I'll be honest - I couldn't care less about the politics of it all.

And I have no idea if a suggestion as radical as the total confiscation of all retirement assets belonging to every U.S. citizen would ever hold up - although, astoundingly, the New York Times listed Ghilarducci's proposal as one of its "Ideas of the Year" for 2008.

But then again... it happened right here in the U.S. back in 1933 - and it happened in Argentina just a few months ago!

So that's why I get more than a little nervous when I hear about trial balloons like the Obama IRA being floated in Washington.

In highly volatile environments - like we're in right now - things can go from looking good to sheer panic at the drop of a hat.

The Fed is working feverishly at the moment to avoid deflationary panic, but their only solution is to throw money, lots of money at the problem.

So let's assume that the U.S. Government continues its out-of-control spending - billions of dollars at a time - in the name of "bailouts" and "economic stimulus."

Those actions alone are enough to destroy the U.S. Dollar in due time.

But once the Government takes that next step - and moves toward either eliminating 401k and IRA tax benefits... or goes all-out in an attempt to claim the retirement assets of every U.S. citizen...

That will trigger an immediate - and disastrous - collapse of the U.S. Dollar.

Within a matter of days, the foreign central banks who have gobbled up U.S. debt will realize just how desperate the U.S. Government has become... and panic will set in.

The rush to gold is going to be incredible as this happens. While the world at the moment is still seeking safety in paper fiat currencies, there is only one alternative left to the U.S. Dollar as it fails...

And that alternative is GOLD!

Author David Hale said it best in the Financial Times just a few weeks ago...

"The clear alternative to the dollar in 2009 is not other currencies but that ancient form of money: gold. Precious metals could emerge as a hedge for investors suspicious of central banks and fearful that inflation will be the simplest solution to the challenge of global deleveraging."

The parallels between our current economic crisis and the scenario that unfolded in the late 1920s and 1930s are obvious. And it seems clear that another Great Depression is unavoidable.

Making matters worse is the fact that the politicians in charge today are essentially the same as the "New Deal" crowd of the 1930s - and their political majority means they can't be stopped.

So what are we left with?

The trial balloons for "Obama IRAs" - or "Guaranteed Retirement Accounts" - has already been floated. That means the wheels are already in motion, as the U.S. Government is now following the disastrous blueprint that was created over seven decades ago!

The inevitable destruction of the U.S. Dollar is going to cause major problems here in the U.S. and worldwide. The time to prepare is quickly coming to a close.

And at the same time - for those of us who are prepared - the potential exists for staggering upside potential as precious metals stampede higher.

Time is of the essence - so let's talk about the OPPORTUNITY we need to prepare for starting right now.

How You Can Claim Your Share of 50-to-1 Returns As Part of an Unprecedented Profit Opportunity

I've been recommending - to my Mining Speculator readers and in every media interview I give - that you begin accumulating precious metals stocks in 2010.

Precious metals are the best recession-proof, anti-inflation investment vehicle available to you. Period.

And I wouldn't say this if I weren't heavily invested in precious metals stocks for 2010 myself.

But here's the thing...

I'm not writing you today to talk about any "ordinary" precious metals stocks for 2010.

You see - we're in the middle of a once-in-a-lifetime global economic crisis. And we're seeing historic changes to our financial system on what seems like a daily basis... with more staggering changes yet to come.

It's in times like these that historic profits are made by those who know where to look.

This is the time when fortunes are built.

And that's just what I intend to help you do.

So like I said... I'm not talking about investing in an assortment of precious metals stocks of 2010 that some analyst spotted on his computer screen in the middle of an office somewhere in New York.

Instead, I'm talking about investing in top stocks for 2010 with 50-to-1 return potential - regardless of how the overall market does - right alongside the analyst who has personally inspected the property of each recommendation... carefully evaluated its management... and felt so strongly about the play that he sunk his own money into it.

You see... I'm talking about having you invest along with me... by getting in on the top stocks for 2010 in my own personal portfolio.

Let me explain how it all works...

A Second Chance at Profit Opportunities You Won't Find Anywhere Else on the Planet

If you've followed my Mining Speculator recommendations at all then you know about the kind of explosive returns my picks can deliver on a regular basis.

If you were with me from the beginning, you'd be enjoying...

1,400% gains from American Bonanza

1,316% from Guyana Goldfields

1,200% gains from Canadian Zinc

1,803% gains from Nova Gold

And 7,060% gains from a little-known copper and platinum company

But those are just a handful of the winners my readers and I have brought home.

And as impressive as those gains are... the potential for profits with my own stock portfolio for 2010 is even greater.

And now I'm inviting you to join me in this astounding profit potential.

Here's what it's all about...

Just over one year ago, my publisher and I put together an exciting new service that allowed investors like you access to the companies in my personal portfolio.

We offered this access to my readers - and as you can imagine, the demand was staggering.

We haven't offered new memberships in this group - which we call the Greg McCoach Insider Alert - for more than 12 months.

But - starting today - I'm re-opening the doors for a limited time to let a select few investors claim the few spots we have remaining.

Now... the top stocks for 2010 I recommend as part of the Insider Alert are too small for me to recommend them in the Mining Speculator. But in spite of their size... their rewards far outweigh their risk.

You see... not a single stock makes its way into my personal portfolio without having the potential for 50-to-1 returns.

And now you can get your hands on the complete list of every single stock I own.

Not only are these the top stocks of 2010 that pull in higher gains than you'll find in the Mining Speculator - or any other advisory service for that matter - they're also the ones safe enough for me to personally trust my money with.

And what's more - you can get immediate access to all of the top stocks 2010 in my personal portfolio just as we're standing on the verge of a once-in-a-lifetime opportunity for explosive profits in precious metal stocks of 2010.

The Obama IRA Program - and the shocking collapse in both the U.S. Dollar and our global financial systems - presents you with the chance to invest in the "cream of the crop" when it comes to metals investments... at the single greatest moment to invest in our lifetime.

And here's one of the ways we'll seize that moment...

The Small, Canadian Company I Just Added to My Portfolio Could Easily Launch from 30 Cents a Share to over $37!

Before I tell you about my latest Insider Alert recommendation, I must warn you:

This one is - at least for now - too small to fit into my Mining Speculator. In other words, it's far from your "typical" opportunity.

Instead, it's more like the type of investment typically reserved for those few "insiders" who have devoted a lifetime to researching potentially explosive natural resource plays.

But that's all changed for you with this letter - now you have the opportunity to cash in on top stocks 2010 like this one that are poised to launch sky-high.

This Canadian metals exploration company has a lot going for it... starting with the location of its properties.

I've found that one of the best places to look for the next big discovery is in areas where big discoveries have already been made.

And this company's property is in such a place - Canada's Abitibi Greenstone Belt.

I toured this area last year and made it a priority place to look because of all the infrastructure and existing mining activity that I saw.

The company I've just added to my personal portfolio has 100% ownership of TWO projects in the Abitibi Greenstone Belt with enormous potential.

How enormous?

One of the company's properties is located just a few kilometers away from a "monster" mine owned by another company... one that has a value approaching $28 billion at today's prices.

Using conservative estimates, the potential for my new recommendation's property is roughly $11.2 billion... which, when you divide by the number of shares outstanding gives you a per-share price of $149.

And even if we are more pessimistic and assume continued global economic weakness... and the 90% discount that a major would be willing to pay for this company's deposit - we're still talking about a per-share estimate of over $37.

Not bad for a stock that was trading for $0.30 at the time of this writing.

After all, a $10,000 investment would turn into $1.23 million - truly a once-in-a-lifetime return!

But that's just one of a handful of 2010 top stocks in my own personal portfolio right now that have the potential for returns of 50-to-1 or more.

The Simple, Risk-FREE Step You Can Take - Today -to Claim Your Share of My Next 50-to-1 Winner

As I mentioned earlier, the response to our initial offer for memberships in the Insider Alert was overwhelming.

And as a result, we haven't offered new memberships in this group for more than 12 months.

But - starting today - I'm re-opening the doors for a limited time to let a select few investors claim the few spots we have remaining.

Now... I have to tell you - to get access to the kind of information you'll receive in the Insider Alert, you'd likely have to pay a minimum of $10,000 per year anywhere else.

And that's only if you can find someone willing to do the research... visit the mine sites... kick the tires... and deliver only those companies with the potential for 50-to-1 gains or better.

That's why we offered the Insider Alert a bit higher than my other services - at a retail price of $3,000 per year.

But listen... that $3,000 investment is truly just a drop in the bucket when you consider that you could ring the cash register with returns of $10,000 or more from just a single Insider Alert trade.

And even though I consider that $3,000 to be an absolute steal...

I'm not even going to come close to charging you that much.

Instead, my publisher and I are offering the limited number of Insider Alert reservations we have left for just $1,995 per year.

Now let me be clear - we only have a few spots left. And at a discounted rate of just $1,995 I fully expect those remaining spots to sell out in short order.

So it's absolutely critical that you ACT NOW in order to claim your spot. After all...

We've set a strict limit on Insider Alert memberships - no more than 500 investors will be allowed to participate at any one time.

The response to our initial offering of Insider Alert memberships was so overwhelming that we haven't been able to open our doors again for more than 12 months... until today!

And at a discounted rate of just $1,995 - more than $1,000 off the retail price - our few remaining spots are sure to disappear quickly.

And what's more - I'll give you a full 30 days to examine my research and investment philosophy. If you decide my Insider Alert isn't right for you... just let me know within 30 days and I'll refund every last penny of your subscription price.

Remember... the profit potential here is off the charts.

Consider this - just $10,000 invested in the average Mining Speculator play each year since 2001 would already break $2,956,466.55 today.

But compared to the potential in my personal portfolio... that's nothing.

One last thing...

I realize that even a discounted rate of $1,995 might be more than you want to plunk down all at once in today's economy.

That's why I'm also offering a quarterly billing program. If you choose that method, you'll be charged $499 every three months.

So let's get started.

The Obama IRA program - and the financial chaos that will follow - is guaranteed to present a number of challenges for investors all over the globe. But for you and I - it's a once-in-a-lifetime opportunity to build wealth.

France's Moment in the Sun

"You ain't seen nothin' yet!"

Actually, we've seen so much already that it's hard to believe there's more coming. But there's sure to be more...and we have a feeling it will be worth the wait.

Yesterday, for example, GM filed for Chapter 11 bankruptcy protection. It couldn't pay its bills. GM was once the strongest corporation on the planet. But it has been around for nearly 100 years. Heck, everything wears out eventually...even a '55 Chevy.

"Obama Nationalizes GM," says a triumphant headline in France's La Tribune.

Triumphant?

Yes, according to the papers, Obama may have been handed the keys to GM...but the old jalopy is worn out. The French say the whole US economic model is ready for the junkyard. More on the French...and the French model, below...

First, let's stick with the USA.

The Dow rose 221 points yesterday - to 8,821... Investors think the worst is over.

Everything is going up. Copper is up 65% so far this year. Oil is up 53%. Soybeans are up 22%. Stock markets are up about 30% worldwide. And gold is 12%. In this company gold is a laggard!

Copper has risen so much, say the papers, because China is buying all it can get. What it is doing with the stuff we don't know; maybe it is stocking up at what it believes are low prices.

Maybe it is hedging its bets. China has the biggest pile of Treasury bonds in the world - $768 billion of them. That's 768 billion reasons to worry. Because each T-bond is denominated in dollars...and while everything else is going up, dollars are going down. Yesterday, the dollar touched a new low against the euro for this year - at $1.42.

T-bonds are down too - minus 5% for the year. It would not be at all surprising for the Chinese to be stockpiling oil, gold, copper and all the other inflation hedges they can get. Their dollar-denominated bonds may go down...but their commodities and gold would go up. Overall, they'd come out even. You can also hedge your own nest egg with commodities. Find out how in tomorrow's webinar...by registering here.

Yet this week, Mr. Tim Geithner - the big banks' main man in Washington - is in China trying to reassure the Chinese that America takes its financial obligations seriously. That's something we never expected to see either. America may have the strongest economy on earth. But if the commies stop financing it, we're out of business.

So Geithner is in China, hat in hand, like a major debtor called into the bank president's office. Geithner, of course, has no choice. He has to go...and say what he has to say. He will use all the right words. He will show the appropriate seriousness...he will smile when it is called for...and put on a grave face when he needs to.

The trouble is, there's little he can do to help the Chinese. They want him to protect the dollar and the bond market. That's something he can't do.

"It will be helpful if Mr. Geithner can show us some arithmetic," said Yu Yongding, a former advisor to the Chinese central bank.

Yes, we'd like to see that arithmetic too. How do you add $1.75 trillion in deficits...pay for it with funny money from the Fed...and still come out even on the value of the dollar? There's no arithmetic we know of that works in the Chinese favor. Right now, the numbers...and the logic of the situation...are telling us that feds aim to create inflation. Instead of trying to keep prices under control...they're trying to get them to go up. That's yet another thing we didn't expect to see!

The US government is less concerned with protecting foreign lenders than it is with getting the US economy back to its old E-Z money ways. Cheap money is what people want. Cheap money is what the feds are trying to give them.

To strengthen your hand against the ravages of cheap money you may want to consider investing in gold. Here's one option that offers an exceptionally low cost way to get aboard...read more here.

Today - will wonders never cease! - the US is pushing its phony money all over the world. The Chinese, meanwhile, are champions of financial integrity. Just wait until they give up on US bonds...then, we'll really see something we ain't seen yet!

And, Bill will continue in a moment, but first, more news from yesterday's guest host...

"Yesterday's rally brought us to another pivot point... 2009, take two," reports Ian from today's 5 Minute Forecast.

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"The Dow and S&P 500 climbed 2.5% yesterday, bumping the broader index into the black for the year, with the Dow close behind. Tech stocks crossed this break-even point long ago, as the tech-heavy Nasdaq is up almost 15% year to date.

"It takes a 'special' kind of market to rally over 2% the day GM sold the farm. So what's gotten into traders this week? In a word: manufacturing.

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"The ISM's measure of American manufacturing scored 42.8 in May, the group reported yesterday. That's its fifth straight monthly rise and the best reading since September 2008. At the current rate, the index will be out of the sub-50 contraction range by the end of summer... reason to buy the S&P 500 hand over fist, evidently.

"Construction spending unexpectedly rose from the void too, popping 0.8% in April. According to yesterday's Commerce Department release, that's the biggest gain in eight months. Like the ISM's, this gauge is still on its knees, down 10% from this time last year. But also like with the ISM's...better to buy now and ask questions later...right?

"Alas, the only truly positive manufacturing data yesterday came from China. The red nation reported its manufacturing purchasing managers index (like our ISM) scored 53 in May, its third straight month of expansion."

If you want to make sure you get Ian's insight from The 5 - in its entirety every Monday through Friday - you can...by subscribing to one of Agora Financial's paid publications. One such fortune-building read is Wayne Burritt's Easy Money Options...available here.

Now back to Bill, continuing his thoughts from London:

The French think they were right about everything. Iraq, for example. The French have deep ties to the Arab world. They knew Iraq would be a tar baby for the US - just like Algeria had been for them. You pick it up...you can't put it down.

But Congress and the administration not only ignored the French (as they had when Charles DeGaulle advised against intervention in Vietnam in the early '60s - it was a "rotten country," he said) they accused France of cowardice, dumped good bottles of Bordeaux down the drain and renamed French fries 'freedom fries.'

Remember the jokes? When a bomb blew up a Spanish train, France raised its color-coded Terror Alert system...from mauve for "Collaborate" to chartreuse for "Run and Hide."

And remember what Anglo-Saxon economists said about the French economy? It was 'sclerotic'...it was a 'museum'...first, it was tied up by labor unions and then the socialist politicians did kinky things to it.

But every dog has his day, and now the French are enjoying a delicious moment of schadenfreude.

The frogs stayed out of Iraq...avoided a housing bubble...and side- stepped a credit crisis.

And now, the "French model" for managing an economy is the envy of the world. At least, that's what you might think if you read The Economist. A recent issue has Sarkozy on the cover...looking confident and pleased with himself. By contrast, Britain's Gordon Brown and Germany's Angela Merkel look as though they needed a drink.

What's the 'French model?' It's a system where the state meddles heavily in the economy. Health care, education and public transport are all government enterprises. And political cronies, rather than entrepreneurs, run key businesses.

Heck the French don't even have a word for "entrepreneur," as George W. Bush pointed out.

It seems to work fairly well. The health care system functions fairly well - while taking a smaller percentage of GDP than in the US. The trains run on time (except when there is a strike). Grammar and secondary schools are probably better than in the US; the universities are probably worse. And many of France's private businesses are world leaders - Air Liquide, Danone, LVMH, to name just a few that come to mind.

And so far, France has suffered less from the worldwide financial meltdown than any of its rivals. The last time we were in Paris, the restaurants seemed as full as ever; taxi cabs were as hard to get as ever; and Paris property had barely come down at all - at least, officially.

"I'm not so sure..." said a colleague in Paris. "I've been looking for an apartment for the last year. A year ago, there was almost nothing available in my price range. Now, I'm seeing lots of places. I looked at one last week. It is listed at $340,000 - about what it would have been a year ago. But the agent told me that the seller would probably take $275,000. If they're telling me that right off-the-bat, I figure it might go for $250,000."

Entering a Crux

In our younger days, when we used to rock climb, this was known as the crux - a move or series of moves that were particularly dicey and could leave you dangling from the end of rope 20-30 feet lower in a dazed state if you failed to finesse them.

As we have documented in recent weeks, the list of US macro series showing stable nominal levels over the past 3-4 months continues to increase. These include

1. Retail sales
2. New orders for durable goods
3. Imports of materials and finished goods.

That is not what usually happens in a debt-deflation dynamic, which cumulatively builds on itself.

Our read always has been that the wave of debt-deflation dynamics building last year would provoke a massive policy response. While home price deflation is still ripping, and headline consumer price indexes are showing mild deflation, it appears the debt-deflation risk is being contained by extreme fiscal and monetary measures.

Stability is better than free fall, but it is not the same as expansion, and we believe equity top stocks investors have shoved valuations high enough over the past three months that they now require signs of economic growth, not just stability, to carry equity indexes higher. We think the odds of them getting that could improve after we get past the auto production and dealer downshift later in the summer, but the rise in Treasury yields is becoming alarming.

While there were no failed auctions this week, longer-dated Treasury bond yields continue to back up not just on supply issues, but also as private portfolio preferences have moved toward riskier assets and, in some cases, into inflation hedges on the bet the Fed will be forced to monetize the growing fiscal deficit.

Our view has been unless the commercial banks start putting some of their $1 trillion in cash holdings into Treasuries (thereby picking up net interest income to rebuild profitability and balance sheets), the Fed will be forced into taking steps that imply a ceiling in Treasury yields is in place. The only other way out we can see is if the US macro news flow relapses and private portfolio preferences shift back to less risky assets, which puts equity indexes at risk of a sell-off.

So from a strategic point of view, we believe equity top stocks investors want and need to see stronger economic and earnings results to drive indexes higher, while bond top stocks investors need just the opposite to calm Treasury yields down. In addition, through near-zero interest rate policy (ZIRP) and quantitative easing (QE) approaches, the Fed has been trying to push private top stocks investors into riskier asset classes while the Treasury's debt issuance calendar implies they need private top stocks investors to prefer owning Treasury bonds, which are generally not the asset of choice in an economic recovery scenario.

In other words, we have contradictory crosscurrents here. If the Fed doesn't intervene to slow or halt the Treasury yield backup, there is a chance the stabilization in unit home sales will wither away. If the Fed does step up QE operations to halt the Treasury yield rise, professional top stocks investors taking the "green toilet paper" view will continue to sell dollars and buy commodities. Down the line that implies higher energy prices for consumers and higher input prices for manufacturers, neither of which we would consider growth supportive developments.

Our concern is the green toilet paper contingent has the Fed in a corner for the moment with a trade that initially could look self- fulfilling, along the lines of the infamous Soros 1992 trade against the British pound and the Bank of England. At the moment, we honestly cannot see an easy resolution unless some Goldilocks growth path (not too hot, not too cold) develops, but we would we need to monitor this one very closely.

To wit, we can envision the following scenario feeding on itself.

You cannot have

  • A central bank pursuing near ZIRP and QE, which, after all, are designed to trash cash and force private top stocks investors out the risk spectrum into equities, corporate bonds, mortgage bonds, lower rated debt, etc...

  • And have the Treasury issuing loads of public debt at the same time from a massive fiscal ease designed to reaccelerate the economy without expecting Treasury yields to increase...
  • unless the central bank and commercial banks are willing to soak up Treasury issuance with money creation, or unless the Treasury can get away with "underfunding" - that is, direct monetization of the deficit. There is a policy incompatibility problem, in other words, or at least really incoherent expectations management.

    And that puts the Fed on the spot. Do they choose to cap Treasury yields by explicitly stepping up QE operations and buying more Treasury bonds in the open market (or possibly more mortgage-backed securities, to thereby decouple mortgage rates from rising Treasury yields)? Or do they just let Treasuries find their own equilibrium, accepting the risk the economy may relapse again as 10-year US Treasury yields sail through 4%?

    Let's say Helicopter Ben Bernanke decides he does not want to take the tail risk of setting off the next Great Depression. He doesn't want to go there because he has already exhausted his bag of unconventional monetary policy tricks and he knows he will have to come up with even crazier policy moves, like buying equities outright or making direct loans to companies, if he faces a relapse in economic activity. That means if he flinches, some top stocks investors will take that as a sign to increase their short dollar/long commodity trades...

    which feeds inflation fears...

    encouraging more top stocks investors to sell existing Treasury holdings to the Fed...

    which creates more "monetization" of public debt...

    and more short dollar/long commodity trades...

    eventually begetting more intervention by foreign central banks trying to defend the dollar and thereby prevent their own currencies from kiting higher by creating their own money to buy dollars...

    which transmits inflation fears out of the United States into a wider range of countries...

    creating a fantastic, self-fulfilling feedback loop.

    Stepping back, one could see this as a doomsday machine for fiat currencies...Shades of Soros 1992, when he took on the Bank of England and broke the pound, except this one is larger scale, with much more at stake.

    We intentionally avoid sensationalizing our analysis - the world is a wild enough place without all the hype. But we feel it important to flag this one for you, because we can see how this dynamic could feed on itself... and we know professional top stocks investors have been trained over the serial asset bubble years to flock toward such trades... and we can see how policymakers may be checkmated by professional stocks investors.

    Gov't to Seize Your 401k

    It's official.

    Whether you like it or not, you're now the "proud" owner of G(overnment)eneral Motors.

    In fact, Uncle Sam's decided that you, me, your kids, my kids, and our grandkids should own 72.5% of one of the worst-managed automobile companies of the last quarter-century.

    It's nothing new, mind you.

    The government's been forcing us to pay for so much "other-people's debt" over the past few years that it's now commonplace.

    But sadly, this administration's just warming up.

    In fact, as you'll see in the shocking report below, your 401k funds could be the next target in Washington's crosshairs... all in a new initiative to "save" your retirement, of course.

    Fortunately, the report also reveals the secrets behind a little-known investment that could protect you from this coming disaster - permanently.

    In fact, investors like you could even start using it to cash in on returns, the likes of 50-to-1... starting today!

    Trust me. You can't afford to miss this.

    It's about to get even worse.

    If you're like most investors, the simple act of looking at your IRA or 401(k) statement over the past few months has been depressing enough.

    But in just a few months... even thinking about what happened to your retirement account could make your blood boil!

    That's because - at this very moment - the U.S. Government is considering a radical plan that could sabotage those hard-earned retirement dollars you still have socked away.

    I call it the "Obama IRA" - and it could become a cold, hard reality for millions of Americans in just a matter of months.

    Here's what the "Obama IRA" means to you:

    ZERO control over your own retirement assets...

    A "Guaranteed" rate of return that is only guaranteed to ensure you'll never make back what the market has taken from you over the past 12 months...

    And a front-row seat for the inevitable collapse of the U.S. dollar... along with the financial chaos that will follow.

    But listen up...

    There's still - for the time being - a perfectly legal way for you to safeguard your retirement assets.

    By taking this one simple step, you'll not only move your money safely out of reach of the U.S. Government... you'll also set yourself up for a potential blockbuster return of 50-to-1 or more.

    In fact... this one extraordinary gold investment could turn a $10,000 investment into $1.23 million - using even the most conservative estimates.

    I've written you this letter to spell out all the details - including just how the U.S. Government plans to come after your retirement dollars... and how you can protect yourself by acting quickly.

    I urge you to take the next five minutes to read this important message...

    How a 76-Year-Old Executive Order is Suddenly Your Biggest Financial Threat

    I realize what I'm saying may be controversial...

    But what follows is a news story you're very likely to see within the next eight months.

    Does that "news story" sound like something from a far-fetched movie based in the future? Something so ridiculous there's no way it could ever happen in the good ole U.S. of A. that you know and love?

    Here's the thing:

    It already happened - back in 1933 when Franklin Roosevelt signed Executive Order 6102, effectively outlawing the ownership of gold by private citizens.

    In fact, much of the text from the "story" above was lifted directly from Roosevelt's Executive Order. Just substitute "gold" for "retirement assets" and you'll have the original text.

    And if you think taking a step as drastic as this couldn't possibly happen in this day and age... Think again!

    Brazil's government confiscated its citizens' assets in 1990 - and then introduced legislation seeking the authority to do it again as recently as 2004... and Argentina took steps to confiscate private pensions last October.

    And soon... if these Guaranteed Retirement Accounts - "The Obama IRAs" - become a reality, the United States of America could do to its own citizens precisely what the Argentinian government pulled off on October 28, 2008.

    Listen... at this point in our economic crisis, the United States and Argentina are more alike than you think. So you can't dismiss Argentina's move to confiscate its citizens' retirement assets as a crazy action taken by a "banana republic."

    In fact - a Banana Republic is defined as a country that "typically has large wealth inequities, poor infrastructure, poor schools, a 'backward' economy, low capital spending, a reliance on foreign capital and money printing, budget deficits, and a weakening currency."

    Sounds familiar, doesn't it?

    More than 75 years after FDR ordered all privately held gold confiscated... the U.S. government is about to do it again. They need cash. And this time -- instead of going after gold -- they're going after something worth even more: the retirement assets of every U.S. citizen.

    History Is Repeating Itself Right in Front of Our Eyes

    The period of economic prosperity - and excess - of the early 1920s was fueled in part by soaring real estate prices. But then - after 1925 - the real estate market went south, leaving many hardworking American families facing foreclosure.

    And we all know what happened in October of 1929 - a devastating stock market crash that produced a slew of bank failures and a crippling nationwide credit crunch. Unemployment soon skyrocketed... and our nation's economy ground to a halt.

    This frightening scenario - from more than 80 years ago - is precisely what we're facing right now.

    And here's what's even scarier: Our government is about to make the same mistakes - including potentially confiscating the assets of its own citizens - all in the name of "economic recovery."

    I know this sounds shocking - but in the next few moments I'm going to tell you exactly how this incredible "Obama IRA" scenario has already begun to unfold... and I'll tell you what you and I can do about it.

    Here's what I mean...

    The U.S. Government's Next Drastic Step:Act Now and You Might Be Able to Protect Your Assets

    You can see it unfolding right before your eyes...

    So that's why it's so important you take action now to protect your assets.

    My name is Greg McCoach, and I'm writing you this urgent letter to show you exactly what steps you need to take immediately.

    Because this situation so closely resembles the period from 1929-1934, I can tell you precisely what's going to happen next. Only this time, things will happen much faster.

    More importantly - because we know what will happen next, I can show you how to protect your retirement assets.

    And I'll also identify the massive, short-term profit opportunities that will present themselves at every step of the way... including a potential blockbuster 50-to-1 return that I've uncovered in the eastern portion of Ontario.

    Make no mistake: we are - at this very moment - living in historic times. The world around us is changing rapidly... and that presents both danger and opportunity.

    Let's start with the opportunity...

    How You Can Legally Protect Your Assets from the Obama IRA...  And Profit From "The Best Gold Story in the Last 14 Years"

    They say that every crisis presents extraordinary opportunity.

    And the prospect of seeing the Obama IRA plan come to pass has pushed me to uncover not just a way to save your retirement assets...

    You can also make back everything you've lost during the current economic crisis - and then some - with one simple investment.

    Here's what I mean...

    Within the past few weeks, I've closely examined the potential of a Canadian-based gold and metals exploration company that presents an enormous opportunity.

    To tell you that I liked what I saw would be an understatement.

    That's because I've discovered that this extraordinary company has the potential to see its share price explode from 30 cents all the way to $37 in short order.

    Now before you whip out your calculator, I'll do the math for you. That type of gain would turn a $10,000 investment into $1.23 million. And I have to confess - I arrived at that figure using the most conservative of estimates.

    So what gives this little-known exploration company such explosive potential?

    This company has staggering short-term profit potential because it's sitting on not one, but TWO potentially explosive discoveries in a region with an unmatched history of gold discovery.

    The Abitibi Greenstone Belt lies on the border of Quebec and Ontario border in Canada. And over the last 100 years it has produced more than 180 million ounces of gold.

    Because of this rich production history, any discovery within the Abitibi region must be taken seriously.

    And what's more... the location of this company's projects is even better news. You see, they're positioned right near existing mines, and as close as three kilometers away from one "major" exploration company. Because of the location, the likelihood of a large discovery is increased... and the infrastructure is already in place to take advantage.

    On top of the favorable location - and the massive potential for each of the two properties - there's also an astounding geological story behind one of this company's properties.

    The company drilled three geological holes in 2008 to determine if volcanic massive sulfide was present - and the results were positive. Since that time the company has invested a ton of money drilling additional test holes - and graphite was discovered.

    This is a huge positive indicator - along with the large magma chamber that was discovered - because it's located next to an aging, producing mine... one that's owned by a major and figures to be depleted in 2014.

    For all intents and purposes - any new volcanic discovery of size on this property would make it nearly impossible for the neighboring major NOT to buy this company out.

    Get Back What You've Lost - and Stake Your Claim in this Once-in-a-Lifetime Exploration Blockbuster!

    Now as I said - I've done the math on potential buyout scenarios. And using even the most conservative figures, I'm estimating a value of roughly $37 per share... just based on what I know about the properties at this moment.

    The potential exists for even greater profits - although $37 for a 30-cent stock is certainly remarkable enough!

    One legendary metals investor has already called this company "The best gold story in the last 14 years." And the truth is... he may be understating the opportunity!

    This investment in a relatively unknown Canadian junior exploration company would not only help safeguard your retirement assets - moving them out of the U.S. Government's reach - but it would also position you to make back everything you may have lost during the market's recent decline... and then some.

    There's only one catch. This story is moving with lightning-fast speed. It's entirely possible that the next report of favorable drill results could send share prices soaring... and at that point it will be too late.

    So it's important for you to stake your claim in this potential blockbuster right away... not only to rake in the enormous profits - but also to protect yourself from the coming disaster.

    I'll tell you how you can find out the name of this company - and all the relevant details - in just a moment.

    But for now... I need to tell you more about that very real - and immediate - danger we're facing...

    Coming Soon: The Obama IRA...Here's Why Your Retirement Assets Are at Risk

    On October 7, 2008 - at a committee meeting held at the U.S. House of Representatives - an idea was floated that would eliminate tax breaks for 401(k)s and other retirement accounts...

    But the idea didn't stop there.

    The idea - presented by economics professor Teresa Ghilarducci - also included a suggestion that the government actually confiscate 401(k), IRA and other retirement accounts and convert them into something called "Guaranteed Savings Accounts."

    These Guaranteed Savings Accounts - something I refer to as "Obama IRAs" - would take away your ability to manage your own retirement account. Instead, you would simply be paid a fixed return of three percent per year.

    No more... no less. And absolutely no freedom whatsoever.

    Now... the initial press coverage of this hearing was sparse. And what little attention was paid to the ideas floated that day was ultimately clouded by "political agendas" and the usual Washington finger-pointing.

    I'll be honest - I couldn't care less about the politics of it all.

    And I have no idea if a suggestion as radical as the total confiscation of all retirement assets belonging to every U.S. citizen would ever hold up - although, astoundingly, the New York Times listed Ghilarducci's proposal as one of its "Ideas of the Year" for 2008.

    But then again... it happened right here in the U.S. back in 1933 - and it happened in Argentina just a few months ago!

    So that's why I get more than a little nervous when I hear about trial balloons like the Obama IRA being floated in Washington.

    In highly volatile environments - like we're in right now - things can go from looking good to sheer panic at the drop of a hat.

    The Fed is working feverishly at the moment to avoid deflationary panic, but their only solution is to throw money, lots of money at the problem.

    So let's assume that the U.S. Government continues its out-of-control spending - billions of dollars at a time - in the name of "bailouts" and "economic stimulus."

    Those actions alone are enough to destroy the U.S. Dollar in due time.

    But once the Government takes that next step - and moves toward either eliminating 401k and IRA tax benefits... or goes all-out in an attempt to claim the retirement assets of every U.S. citizen...

    That will trigger an immediate - and disastrous - collapse of the U.S. Dollar.

    Within a matter of days, the foreign central banks who have gobbled up U.S. debt will realize just how desperate the U.S. Government has become... and panic will set in.

    The rush to gold is going to be incredible as this happens. While the world at the moment is still seeking safety in paper fiat currencies, there is only one alternative left to the U.S. Dollar as it fails...

    And that alternative is GOLD!

    Author David Hale said it best in the Financial Times just a few weeks ago...

    "The clear alternative to the dollar in 2009 is not other currencies but that ancient form of money: gold. Precious metals could emerge as a hedge for investors suspicious of central banks and fearful that inflation will be the simplest solution to the challenge of global deleveraging."

    The parallels between our current economic crisis and the scenario that unfolded in the late 1920s and 1930s are obvious. And it seems clear that another Great Depression is unavoidable.

    Making matters worse is the fact that the politicians in charge today are essentially the same as the "New Deal" crowd of the 1930s - and their political majority means they can't be stopped.

    So what are we left with?

    The trial balloons for "Obama IRAs" - or "Guaranteed Retirement Accounts" - has already been floated. That means the wheels are already in motion, as the U.S. Government is now following the disastrous blueprint that was created over seven decades ago!

    The inevitable destruction of the U.S. Dollar is going to cause major problems here in the U.S. and worldwide. The time to prepare is quickly coming to a close.

    And at the same time - for those of us who are prepared - the potential exists for staggering upside potential as precious metals stampede higher.

    Time is of the essence - so let's talk about the OPPORTUNITY we need to prepare for starting right now.

    How You Can Claim Your Share of 50-to-1 Returns As Part of an Unprecedented Profit Opportunity

    I've been recommending - to my Mining Speculator readers and in every media interview I give - that you begin accumulating precious metals stocks immediately.

    Precious metals are the best recession-proof, anti-inflation investment vehicle available to you. Period.

    And I wouldn't say this if I weren't heavily invested in precious metals stocks myself.

    But here's the thing...

    I'm not writing you today to talk about any "ordinary" precious metals top stocks for 2010.

    You see - we're in the middle of a once-in-a-lifetime global economic crisis. And we're seeing historic changes to our financial system on what seems like a daily basis... with more staggering changes yet to come.

    It's in times like these that historic profits are made by those who know where to look.

    This is the time when fortunes are built.

    And that's just what I intend to help you do.

    So like I said... I'm not talking about investing in an assortment of precious metals stocks that some analyst spotted on his computer screen in the middle of an office somewhere in New York.

    Instead, I'm talking about investing in top stocks 2010 with 50-to-1 return potential - regardless of how the overall market does - right alongside the analyst who has personally inspected the property of each recommendation... carefully evaluated its management... and felt so strongly about the play that he sunk his own money into it.

    You see... I'm talking about having you invest along with me... by getting in on the stocks in my own personal portfolio.

    Let me explain how it all works...

    A Second Chance at Profit Opportunities You Won't Find Anywhere Else on the Planet

    If you've followed my Mining Speculator recommendations at all then you know about the kind of explosive returns my picks can deliver on a regular basis.

    If you were with me from the beginning, you'd be enjoying...

    1,400% gains from American Bonanza

    1,316% from Guyana Goldfields

    1,200% gains from Canadian Zinc

    1,803% gains from Nova Gold

    And 7,060% gains from a little-known copper and platinum company

    But those are just a handful of the winners my readers and I have brought home.

    And as impressive as those gains are... the potential for profits with my own stock portfolio is even greater.

    And now I'm inviting you to join me in this astounding profit potential.

    Here's what it's all about...

    Just over one year ago, my publisher and I put together an exciting new service that allowed investors like you access to the companies in my personal portfolio.

    We offered this access to my readers - and as you can imagine, the demand was staggering.

    We haven't offered new memberships in this group - which we call the Greg McCoach Insider Alert - for more than 12 months.

    But - starting today - I'm re-opening the doors for a limited time to let a select few investors claim the few spots we have remaining.

    Now... the top stocks for 2010 I recommend as part of the Insider Alert are too small for me to recommend them in the Mining Speculator. But in spite of their size... their rewards far outweigh their risk.

    You see... not a single stock makes its way into my personal portfolio without having the potential for 50-to-1 returns.

    And now you can get your hands on the complete list of every single stock I own.

    Not only are these the top stocks of 2010 that pull in higher gains than you'll find in the Mining Speculator - or any other advisory service for that matter - they're also the ones safe enough for me to personally trust my money with.

    And what's more - you can get immediate access to all of the top stocks for 2010 in my personal portfolio just as we're standing on the verge of a once-in-a-lifetime opportunity for explosive profits in precious metal stocks.

    The Obama IRA Program - and the shocking collapse in both the U.S. Dollar and our global financial systems - presents you with the chance to invest in the "cream of the crop" when it comes to metals investments... at the single greatest moment to invest in our lifetime.

    And here's one of the ways we'll seize that moment...

    The Small, Canadian Company I Just Added to My Portfolio Could Easily Launch from 30 Cents a Share to over $37!

    Before I tell you about my latest Insider Alert recommendation, I must warn you:

    This one is - at least for now - too small to fit into my Mining Speculator. In other words, it's far from your "typical" opportunity.

    Instead, it's more like the type of investment typically reserved for those few "insiders" who have devoted a lifetime to researching potentially explosive natural resource plays.

    But that's all changed for you with this letter - now you have the opportunity to cash in on top stocks of 2010 like this one that are poised to launch sky-high.

    This Canadian metals exploration company has a lot going for it... starting with the location of its properties.

    I've found that one of the best places to look for the next big discovery is in areas where big discoveries have already been made.

    And this company's property is in such a place - Canada's Abitibi Greenstone Belt.

    I toured this area last year and made it a priority place to look because of all the infrastructure and existing mining activity that I saw.

    The company I've just added to my personal portfolio has 100% ownership of TWO projects in the Abitibi Greenstone Belt with enormous potential.

    How enormous?

    One of the company's properties is located just a few kilometers away from a "monster" mine owned by another company... one that has a value approaching $28 billion at today's prices.

    Using conservative estimates, the potential for my new recommendation's property is roughly $11.2 billion... which, when you divide by the number of shares outstanding gives you a per-share price of $149.

    And even if we are more pessimistic and assume continued global economic weakness... and the 90% discount that a major would be willing to pay for this company's deposit - we're still talking about a per-share estimate of over $37.

    Not bad for a stock that was trading for $0.30 at the time of this writing.

    After all, a $10,000 investment would turn into $1.23 million - truly a once-in-a-lifetime return!

    But that's just one of a handful of top stocks for 2010 in my own personal portfolio right now that have the potential for returns of 50-to-1 or more.

    The Simple, Risk-FREE Step You Can Take - Today -to Claim Your Share of My Next 50-to-1 Winner

    As I mentioned earlier, the response to our initial offer for memberships in the Insider Alert was overwhelming.

    And as a result, we haven't offered new memberships in this group for more than 12 months.

    But - starting today - I'm re-opening the doors for a limited time to let a select few investors claim the few spots we have remaining.

    Now... I have to tell you - to get access to the kind of information you'll receive in the Insider Alert, you'd likely have to pay a minimum of $10,000 per year anywhere else.

    And that's only if you can find someone willing to do the research... visit the mine sites... kick the tires... and deliver only those companies with the potential for 50-to-1 gains or better.

    That's why we offered the Insider Alert a bit higher than my other services - at a retail price of $3,000 per year.

    But listen... that $3,000 investment is truly just a drop in the bucket when you consider that you could ring the cash register with returns of $10,000 or more from just a single Insider Alert trade.

    And even though I consider that $3,000 to be an absolute steal...

    I'm not even going to come close to charging you that much.

    Instead, my publisher and I are offering the limited number of Insider Alert reservations we have left for just $1,995 per year.

    Now let me be clear - we only have a few spots left. And at a discounted rate of just $1,995 I fully expect those remaining spots to sell out in short order.

    So it's absolutely critical that you ACT NOW in order to claim your spot. After all...

    We've set a strict limit on Insider Alert memberships - no more than 500 investors will be allowed to participate at any one time.

    The response to our initial offering of Insider Alert memberships was so overwhelming that we haven't been able to open our doors again for more than 12 months... until today!

    And at a discounted rate of just $1,995 - more than $1,000 off the retail price - our few remaining spots are sure to disappear quickly.

    And what's more - I'll give you a full 30 days to examine my research and investment philosophy. If you decide my Insider Alert isn't right for you... just let me know within 30 days and I'll refund every last penny of your subscription price.

    Remember... the profit potential here is off the charts.

    Consider this - just $10,000 invested in the average Mining Speculator play each year since 2001 would already break $2,956,466.55 today

    But compared to the potential in my personal portfolio... that's nothing.

    One last thing...

    I realize that even a discounted rate of $1,995 might be more than you want to plunk down all at once in today's economy.

    That's why I'm also offering a quarterly billing program. If you choose that method, you'll be charged $499 every three months.

    So let's get started.

    The Obama IRA program - and the financial chaos that will follow - is guaranteed to present a number of challenges for investors all over the globe. But for you and I - it's a once-in-a-lifetime opportunity to build wealth.

    Have a Bite of the “Apple Economy”

    BusinessWeek calls it the "Apple Economy" ― the flurry of new products, services, and companies that have sprung up over the last few years to cater to Apple customers. In recent years the Apple economy has become a multi-billion dollar business for scores of smaller companies who want a piece of the pie. And one week in June could be a big catalyst for penny stocks profits.

    As you read this, analysts at top financial and consulting firms are getting ready for next Monday, June 8. That day marks the start for Apple's World Wide Developers Conference (WWDC), an annual meeting of the company's software and hardware partners that's historically been the launching pad for some of Apple's most prolific products.

    Rumor has it that a pretty big announcement is set for Monday: The next generation iPhone.

    For months now, the dozen or so Apple-obsessed websites have been publishing leaked photos, product specs, and speculation about the new device ― whether or not any of it will actually prove true come Monday is another story. One of the reasons for the hysteria is Apple's culture of secrecy. The Cupertino, California-based technology company keeps new products closely guarded until the time is right for a big release.

    The Small-Cap Connection

    All of those big releases have meant big money for Apple ― the company took in $32 billion in revenues last year. They've also meant big money for the handful of small companies that makes money by selling peripherals, software, and support to Apple's customers.

    One of the best examples is Zagg (OTC: ZAGG), a company that makes screen protectors, cases, headphones, and other accessories for the iPhone. While the company posted net losses in 2006 and 2007, since the iPhone's release it's managed to swing to a pretty substantial profit. ZAGG stock is up 420% since January as a result.

    And some people are seeing even bigger returns from the Apple economy.

    Look no further than Ethan Nicholas, a one-man team who watched his iShoot, a game sold on Apple's iPhone Application Store, climb to No. 1 on Apple's list of most popular paid applications.

    In just two weeks, iShoot netted Nicholas almost $400,000 in profits…and the application is still selling as we type. That mountain of money has prompted Nicholas to quit his day job at Sun Microsystems to pursue game development full time.

    Since the App Store was launched in July 2008, the company has sold more than 1 billion applications to iPhone and iPod Touch users. Clearly, Nicholas hasn't been alone in his Apple windfall, and penny stocks game developers are cashing in too.

    "Hi, I'm a Mac"

    Apple's come a long way from the computer company that almost went bankrupt in the mid 1990s. Since Steve Jobs returned to the helm of this prolific company fortunes have been great for Apple ― and for Ethan Nicholas and Zaggs of the world.

    Keep your eyes peeled on Monday…it could be a big day for small stocks for 2010 that operate in the Apple economy.

    Jun 2, 2009

    Small-Caps And Chinese Stocks: Steroids For Your Portfolio

    Have you been doubling your money -- or better -- as top stocks for 2010 have rallied in the past several months?  Readers of the Oberweis Report are cashing in handsomely!

    Bear markets are brutal, no doubt about it.But when top stocks of 2010 recover, you have a great chance to make absolutely ridiculous profits -- if you know where to look. 

    Like Warren Buffett, Jim Oberweis, editor of the Oberweis Report, knows to be greedy when others are fearful and fearful when others are greedy. Right now, says Jim, "Greed is good!"

    Click here for all recommended top stocks for 2010 in the June Oberweis Report, including three new Chinese stocks set to soar.

    Results do not lie! When the market was falling apart last fall and panic prevailed, Jim Oberweis surveyed the damage for quality small-cap top stocks of 2010 with accelerating growth in sales and profits.  

    Check out the top stocks Jim recommended...and the returns through June 1, 2009:

    Pegasystems (PEGA) @ $12.99 on 9/28/08:  +164%
    Green Mountain Coffee Roasters (GMCR) @ $36.30 on 11/30/08: +128%
    Neutral Tandem (TNDM) @ $14.71 on 11/30/08: +119%
    ArcSight, Inc. (ARST) @ $8.01 on 12/31/08: +249%

    Besides these four top stocks of 2010, Jim Oberweis was also recommending that his readers buy into shares of a longtime favorite stock that he'd added back on May 28, 2006: Chinese Internet portal Baidu.com (BIDU). Jim told subscribers to buy BIDU at $79.45 and in less than 18 months, shares of the Chinese Web portal were above $400 for a quick 400% gain!

    BIDU touched down at $100 in late December and Jim Oberweis told readers to buy it again because Baidu.com's sales and profit growth was still accelerating. By June 1, Baidu.com had rallied to $286 for a 5-month gain of 186%!

    Is BIDU near $300 still a buy or is the bounce over?  Click here for the June issue of the Oberweis Report with Jim's latest buy/sell/hold call on Baidu.com and three more Chinese growth top stocks of 2010 that look a lot like BIDU did three years ago.  

    In March 2005, Jim recommended his subscribers buy Ctrip.com (CTRP), a Shanghai-based online travel agent whose shares traded on NASDAQ for $9.71.  Still bullish, he went on to mention the best stocks on Forbes.com in November 2006 at about $28. The best stocks got up to $70 in May 2008, a gain of 620%!

    Is Ctrip.com (CTRP) still a buy at $40?  Click here to begin your subscription to the Oberweis Report for a complete model portfolio with all of Jim Oberweis' current buys and sells.

    Jim is not a guy who suddenly has a hot hand. 

    Corona, CA-based Hansen Natural is the maker of the Monster brand of energy drinks and juices. Its sales exploded thanks to a surge in demand for Monster. Hansen's amazing success was not news to subscribers to The Oberweis Report.

    Jim Oberweis recommend buying Hansen in June 2004 at a split-adjusted price of $2.37 per share. One year later the best stock traded at $12 and it peaked at $70 when Jim urged readers to cash in their gains.

    Click here for the June issue of the Oberweis Report with all recommended buys and sells, including Jim's TOP 3 CHINESE STOCKS for 2010.

    Forbes has been so impressed by Jim's ability to find undervalued growth top stocks for 2010 that we have recently made him our official Small-Cap stock columnist in Forbes Magazine. He's been red-hot going way back, and before Jim, his father has been putting up mind-blowing market-beating returns since 1976.  Since The Oberweis Report's inception, its model portfolio has gained 33,945%. That would have turned a $10,000 into nearly $3.4 million today!

    We checked out Jim's ENTIRE small-cap stock model portfolio as reported in his newsletter. Since The Oberweis Report's inception in 1976, its model portfolio has gained 30,992%. That would have turned a $10,000 into more than $3.1 million today!

    Take a look at some of the other winning recommendations from Jim's portfolio:
    Central European Distribution Corp. (CEDC) - recommended at $1.28 in April 2001, currently trading around $20 after getting as high as $77. . . a 1,462% gain!
    aQuantive, Inc (AQNT) - recommended at $6.29 in April 2003 . . . When Microsoft bought AQNT for $60 a share earlier this year, Oberweis readers posted a gain of 854%!
    ValueClick, Inc. (VCLK) - recommended at $3.14 in March 2003, and sold in May 2008 for a 540% gain!

    Now may be the perfect time to make money in small-cap growth top stocks of 2010. Why? Small-cap growth top stocks for 2010 outperform all other stocks over the long term and during economic recoveries, small-caps typically lead the market.

    I invite you to test drive the Oberweis Report investment newsletter.  Included in your subscription will be Jim's model portfolio of small- and mid-cap growth stocks and his TOP 3 CHINESE STOCK BUYS.

    What Are Commodities Saying About the Financial Crisis?

    Can you believe it's already June? What a month May was for commodities. They are Lazarus, come from the dead to tell us all that the world will not stop turning if there is a financial crisis in the West. Or something like that.

    If we were using numbers instead of metaphors, we'd say the CRB Reuters/Jeffries Index had its biggest monthly rally in 34 years. It was up 14% on the month. That was the best performance since July of 1974.

    A monthly performance like that can only mean one thing. We're just not sure what one thing it is. It could mean commodities have rebounded from being oversold, as they were in late 2008. It could mean that markets are less pessimistic about the global economy than your editor at the Old Hat Factory (though we doubt that).

    It could also mean that investors increasingly prefer tangible assets as a long-term growth strategy over financial assets. Even after $1.465 trillion in realized losses by global banks and financial institutions, there are trillions more to come. Commercial real estate...the option-ARM recast period in the U.S. housing market...European banks...any or all of these things could conspire to lead to more losses and more capital raisings in the financial sector.

    Perhaps that is what explains crude oil's biggest monthly gain in a decade. July crude futures traded at $66.52 in Friday's New York action. The U.S. dollar price of gold powered to $981.20, before sliding back a bit $975.

    The Aussie gold price is fighting its way up despite the fact that the Aussie dollar keeps gaining on the greenback. While the Aussie gold price is up just $1.71 in the last 30 days (0.14%), the U.S. gold price is up nearly nine percent. We reckon the Aussie gold price will begin moving up closer to $1,500 again on a combination of events (weakness against the greenback for one.)

    There are also two data releases this week that will affect the Aussie dollar. The RBA meets today to decide the price of money in Australia (set interest rates). And then Wednesday, the March quarter GDP figures come out. This will tell us how bad the recession is, although not how bad it may become.

    It's no use predicting these things, but for what it's worth, our view is that we're in a bit of a plateau between down moves. The "down moves" will come again in financial stocks 2010, although they may not be as "down" as before, and employment. Mostly, the indices are going to have to price in very slow GDP growth for the remainder of the year and more job losses.

    The wildcard for Australia is trade. Its proximity to Asia means that a rebound in that part of the world provides some cushion to resource companies. But then, we thought the resource stocks of 2010 would be pretty well insulated from the first round of deleveraging too, and we were wrong about that. And the second time around?

    Well, even if the long-term underlying demand for Aussie resources is real and growing, it still takes real money to make new projects happen. The financing of resource projects will continue to be a key issue in your best stocks selection. The other issue, obviously, is the direction of commodity prices.

    Take LNG, for example. Last year the Australian Petroleum Production and Exploration Association said it wanted to triple Australia's LNG output to sixty million tons per year. Meeting this weekend in Darwin, the group says 50 million is a more realistic target, given both the slump in energy prices and tight credit markets.

    If LNG prices track oil prices-as they did in the big run up to $150 per barrel for crude-the economics of big Aussie projects get a lot better. Our view is that energy prices are going structurally higher anyway. Global recession aside, the big plunge in energy capital spending virtually guarantees a supply shortage in the coming years anyway.

    Besides, you have to wonder why big international energy firms would be investing in conventional and unconventional Australian LNG projects if they weren't convinced that a) oil prices were going higher, or b) more carbon-friendly fuels like gas would gain as coal gets politically demonized and punished with cap-and-trade or emissions-trading-schemes.

    Obviously, if global trade continues to contract and a second round of losses in the global banking industry triggers another financial crisis, demand for energy is going to fall. And while we're at it, best stocks for 2010 would probably test the 2003 lows too. We enter a new stage of grimness.

    In the meantime, energy and precious metals best stocks of 2010 are riding higher commodity prices. And there's a distinctly 2007 mind-set in the air. It's vogue to be long-commodities and indifferent to risks in the financial system. It's enough to make an investor with a short memory nervous.

    Dan will be with us in Vancouver this year…and he may be on the Whiskey Bar panel (Dan, if you're reading this, allow me to say "pretty please with a cherry on top"). You can be there, too, if you click here.

    And you can still sign up for our Webinar which is…hold on let me check… Yep, it's tomorrow at 3:00 pm. It's still free to sign up, but time is running out. Just click here to learn more.

    Here's that scintillating conversation I promised…

    What if the government outlaws gold and silver AGAIN! I think it's better to invest in bullets, in the four major recessions of the world people went to the barter system. And in all four bullets were at the top of the list of barter items. You can protect yourself and family and shoot a deer too eat. You can't eat gold or silver.

    It's a fine plan, truly, but I quickly point out that the government could just as easily outlaw bullets and the mechanisms that put them to their intended use.

    Give any government enough time and they'll start blurting all kinds of nonsense that it's best to ignore clandestinely if you can.

    Of course government prohibition just encourages a black market so people can get what they want. Prohibition introduces a tremendous risk premium that marks up the price of the goods and richly rewards the scofflaws willing to traffic in those banned goods.

    So best stock up on all of it! If you've got guts to go along with your convictions despite what your imperial overlords say, you could end up rich beyond your wildest dreams.

    As long as we're on the subject, maybe you could take this Shooters advice…

    Gary,

    Thanks for all the entertainment you provide on a daily basis. Whether I agree or disagree is really irrelevant in regards to all the issues that face this society and economy.

    I think though that as I am too poor to buy gold and silver or any investments for that matter, and my 401(k) doesn't allow for the possibility of that investment, I may be stuck with investing in ammunition.

    If inflation and the gloom and doom prophesies come true, It will be much easier to exchange .22 caliber ammo, than say a one ounce gold bar. It breaks down in small increments a lot easier.

    Hmm maybe I can buy some silver bullets, ya think?

    Keep up the lively comments and keep antagonizing all the dissenters. I really enjoy it.

    Thanks! And now it's time for a confession.

    I am terribly afraid of werewolves. I saw the original The Howling at a tender age and without my parents' knowledge. Scarred me emotionally and I live with the effects to this day.

    I strenuously endorse silver bullets as a practical matter. They are just all kinds of useful. Made of mankind's longest standing honest currency, protection against other men and werewolves.

    Mr. G:

    One quibble: I believe you should have started with LBJ as the initial source of our present dilemma. While you're certainly correct in your assessment of Nixon, LBJ's Guns & Butter started this whole "live-beyond-your-means" era. Please note that it was under LBJ that the first "raid" was made on the Social Security "lock box." All presidents have continued the practice, but LBJ led the parade.

    I won't accuse James Howard Kunstler of central planning, either. Just to let you off that hook.

    Point taken. Great Society...boils my blood every time I think of it. We could go back to that arrogant meddler Wilson. Then there's the imperialist Lincoln...

    Or we could address this meddler who has something to say about an article Dan Denning penned a couple weeks back. You remember…the one about the unfairness of progressive taxation…

    The current mess we are in is all about abuse of wealth and power.
     
    The system we have is a very good one except that the top rates have been lowered too much. The rates should be spread out much further with many more brackets so that the middle and upper middle class has lower graduated rates than the very rich.
     
    God I hate you conservatives. This is idiotic. Progressive taxation is all about fairness. If we lived in a truly egalitarian society where everyone had an equal chance to earn incomes it wouldn't be fair. But the reality is that on average, the more you have the more you make is the way it is set up. And as you get more and more you earn more and more. This leads to consolidation of wealth and power, which has historically been the greatest drag on wealth creation all through human history. Progressive taxation could be set up in a better fashion but it is a balance against this. Progressive taxation is a much better solution than say Communism. Would your wealthy readers really want their children to have to compete on the same basis as the average child and go into the world just on their wits? No fancy prep schools, Ivy League on merit alone? Have to get jobs just to pay month-to-month bills instead of building up careers. Work their way up in corporations instead o f getting favored treatment? It isn't fair that their children should have such favored lives or that many of their parents also had it that way as well.

    Uh huh.

    Progressive taxation is communism, just as free will, private property and honest (commodity) money are capitalism.

    That's part of the problem. You have to get your terms straight. Capitalism isn't by definition heedless, rapacious greed. It's the movement of wealth in a society in which people are free to pursue the crime of their own best interest (like eating and using their gifts to capture a share of the resources other free human beings choose to give them in mutually beneficial exchange).

    But slavers and thieves just love to accuse capitalism of their own sins. The irony!

    Redistribution ― which progressive taxation blatantly is ― is morally wrong and as with other sins, the result is punishment from on high. As Dan Denning already pointed out, it's merely the politics of envy.

    I'm not particularly religious, but I can't help notice the bits of hard-won wisdom collected in the works of humanity's major religions. I also can't help but recall that covetousness and larceny are as much an affront to God and notions of justice as murder. Progressive taxation manages to embody two major evils at once. Impressive.

    But some people are naturally inclined to want to meddle and boss people around on their way to a better world. Some of us are also simply more inclined to figure out eternal principles, live in the world of facts and not go a-begging or a-meddling.

    And these phenotypic, philosophic orientations pop up rather randomly in each litter ― like red hair or unusual height, bad eyesight and teeth ― so you can't even reliably breed it out of the species.

    They will always be with us, Shooters…the nannies and the ninnies, meddlers and parasites…and they cannot help but be what they are.

    But as dear old Dad often points out, God must love them…because he made so many of them.
     
    Here's an impressive missive from a Shooter on good terms with reality:

    James Howard Kunstler's thoughts resonate with me.  I am mister average.  I wonder how many are thinking along the same lines.  I guess the rush to the gun shops is a good indication.   I am 51 years old.  I am burned out.  I have increased my income over the years only to find my purchasing power about the same as it was 20 years ago.  I don't have a pension, I don't have any savings, I am upside down in my mortgage, I have no confidence in social security.  Wake up call.  We were raised with expectations of what we needed to survive in a world which is disappearing.  I am hunkered down.  I am trying to wean myself from the 2 latte a day, 80-mile commute.   But I am glad to see the ship go down.  I am glad to be relived of a system that forced me to work more and more for les s and less.   It is going to be uncomfortable; there won't be health care, air conditioning, food supply that we all enjoyed.  On the other hand, I was not that comfortable working 50 hours a week to support a family, two cars, and a house.  I achieved the American dream.  It lasted about 2 years.  I would like to see what comes next if I only have the endurance.  How many are there just like me, mister average?
     
    The human animal is collectively irrational.  He thinks more is better.  A larger government or city or whatever is better.  With all his cleverness he creates systems which become larger than his ability to manage.  James Howard Kunstler and others point out we need to reorder ourselves into small sustainable groups.  People need the ability to vote with there feet and there is nowhere to run.

    That was refreshing. Thanks for writing.

    Your editor needs a shot and a nap, but he's going to medicate himself with more coffee and go on with his day.

    MicroCap Gems Weekly Issue: PROCERA NETWORKS, INC.

    PROCERA NETWORKS, INC.
    (AMEX: PKT) $0.82

    OUTLOOK
    Procera Networks is a Los Gatos, California based global provider of traffic awareness, control, and protection products and solutions for broadband service providers.

    We find Procera attractive due to its strong and consistent revenue growth, its expanding customer base, its strong balance sheet and its increasing margins as well as the quickly growing market in which its products compete.

    Furthermore, from a technical analysis view point, we believe the hot stocks for 2010 may be attempting to build support just below the $0.75 area. Therefore, should we be correct in our analysis and should this possible support area continue to hold, levels near this possible support area may offer long term investors an attractive entry opportunity.

    The network traffic and service management solution company's growing portfolio of evolved DPI products are marketed under the name of PacketLogic.

    DPI (Deep Packet Inspection) technology provides a network intelligence that permits effective business decisions.

    DPI technology examines and identifies packets of data passing through an inspection point in the network and can be used in analysis of optimum network utilization, network protection and by offering advance differentiated services.

    It should be noted that the DPI market has grown quickly over the past couple years and is expected to continue its strong growth into the future. Analyst expect the DPI market to grow from less $400 million in 2007 to over $1 billion in 2012.

    Procera's DRDL (Datastream Recognition Definition Language) and evolved DPI products are built to provide the scalability, flexibility, as well as accuracy, control and protection that is required by large networks.

    Additionally the Company's evolved DPI technology looks at bi-directional packet flows and its proprietary DRDL processing engine allows the use of off the shelf hardware rather than customized Application Specific Integrated Circuit based solutions.

    The Company currently has over 600 customers located through out Europe, North America, Australia and Asia and its products and services are sold through a combination of direct sales and channel partners as well as a global network of value added resellers.

    What's more, the Company recently added four global Tier 1 operators to its customer list as well as some prestigious universities in North America.

    During fiscal 2008 ending December 31, 2008, the Company reported revenues of $11.524 million, an increase of 72% compared to sales of $6.673 million in 2007.  Net loss for fiscal 2008 was $13.902 million compared with $12.481million in 2007.

    It should be noted that gross margin for fiscal 2008 improved to 36.6% compared to 34.4% in 2007.

    More recently, for the three months ended March 31, 2009, revenues increased 72% to $2.947 million from $1.715 for the comparable period of 2008.  Net loss for the quarter was $2.334 million, down from $3.483 million for the first quarter of 2008.

    Additionally, it should be noted that operating expenses decreased by $561,166 from $4.211 million for the quarter ended March 31, 2008 to $3.650 million for the quarter ended March 31, 2009.

    What's more, gross margin for the three month period ended March 31, 2009 was 39% compared with 28% for the three months ended March 31, 2008.

    For the quarter ending March 31, 2009, the Company reported cash and equivalents of $1.721 million and working capital of $5.272 million. It should be mentioned that $5.454 million of accounts receivables and $3.445 million of inventory make up a large percent of the short term assets in this working capital equation.

    We believe the Company's working capital, cash on hand and income from operations are sufficient to cover any funding needed for operations in the foreseeable future.

    Still, readers should be warned that failure by the Company to successfully obtain additional future funding if and when needed, may jeopardize its ability to continue its business and operations.

    Also, readers should be aware that the Company competes in a highly competitive sector of the networking technology market and faces strong competition from U.S. and global companies with larger customer basis, greater name recognition, and significantly more financial, technical, and marketing resources.

    Likewise, investors should be aware of possible technical obsolescence as more advanced products are developed that may compete against Procera's products.

    Furthermore, a significant amount of Procera's sales are generated outside the United States. The Company could be adversely affected by fluctuations in the value of the U.S. Dollar against foreign currencies.

    Summary Data
    52 wk high $2.40
    Chart courtesy of StockCharts.com
    52 wk low $0.25
    One year return -60%
    Average Daily Volume 178,800
    Shares Outstanding (mil) 84.498
    Market Capitalization ($mil) 69.3
    Insider Ownership 6.7%
    Annual Cash Dividend 0.0
    Dividend Yield (%) 0.0
    Risk level High
    Industry

    Business Software & Services

    INCOME STATEMENT
    (Dollars In thousands, except per share amounts)

    Full Year Ended December 31
    2008
    2007
    Revenues
    $11,524
    $6,673
    Cost of Revenues
    5,310
    4,380
    Gross Profit
    4,214
    2,293

    Total Operating Expenses

    19,198
    15,899
    Income (Loss) from Operations
    (14,984)
    (13,606)

    Total Other Income (Expense)

    40
    52
    Net Income (Loss) before Taxes
    (14,944)
    (13,554)
    Provision for Income Taxes
    1,042
    1,073
    Net Income (Loss)
    (13,902)
    (12.481)
    Basic earnings (Loss) per share
    $(0.18)
    $(0.17)
    Diluted earnings (Loss) per share
    $(0.18)
    $(0.17)

    AVERAGE ANALYST ESTIMATE
    Full Year Ended December 31
    2009
    2010
    Fiscal Yr
    $0.05^
    $0.15^
    ^Single analyst Estimate.


    COMPANY NAME
    SYMBOL
    INDUSTRY
    DATE RECOMMENDED
    PRICE ADDED
    CURRENT PRICE
    (5/18/09 Close)
    RETURN PERCENTAGE
    Air T Inc. AIRT Air Delivery & Freight Services
    3/19/2008
    $8.96
    $7.90
    -11.8%*
    Computer Task Group, Inc. CTGX Information Technology Services
    6/25/2008
    $5.018
    $4.86
    -3.2%
    GSI Technology Inc. GSIT Semiconductor - Broad Line
    10/29/2008
    $3.30
    $3.308
    0.2%
    Jewett-Cameron Trading Company Ltd. JCTCF Lumber, Wood Production
    7/23/2008
    $6.75
    $4.90
    -27.4%
    NAPCO Security Technologies, Inc. NSSC Security & Protection Services
    12/3/2008
    $1.41
    $1.25
    -11.4%
    North American Galvanizing & Coatings Inc. NGA Industrial Goods
    3/7/2007
    $2.256**
    $5.94
    163.3%
    Procera Networks, Inc. PKT Business Software & Services
    5/13/2009
    $0.80
    $0.82
    2.5%
    Santa Fe Holding Company, Inc. SFHD Restaurants
    5/7/2008
    $1.88
    $1.40
    -25.5%
    SORL Auto Parts SORL Auto & Truck Parts
    5/5/2005
    $3.00
    $3.00
    3#6699#6690.0%
    UFP Technologies Inc. UFPT Packaging & Containers
    2/13/2008
    $6.30
    $4.19
    -33.5%

    *Excludes dividends.
    **Split adjusted price.


    To see some of MicroCap Gems' past and present winners please click here.

    The Holding Period Return for the MicroCap Gems portfolio year to date (12/31/2008 - 5/15/2009) is 13.29%.***

    The Holding Period Return for the MicroCap Gems portfolio since inception (5/5/2005 - 5/15/2009) is -25.69%.***

    The Russell Microcap™ Growth Index year to date return (12/31/2008 - 5/15/2009) is 5.16%.
    The Russell Microcap™ Growth Index cumulative return for the period 5/5/2005 - 5/15/2009 is -26.12%.

    ***The portfolio is assumed to be equal weighted and is re-balanced every time there is an addition or deletion. Any dividends paid are incorporated into the holding period return. Data presented reflects past performance, which is no guarantee of future results. Due to market volatility, current performance may be higher or lower than the performance shown. Investors may incur a loss despite previous gains. Results will vary with economic and market conditions.

    GSI Technology Inc.
    (NASDAQ: GSIT) $3.308
    T
    SC reported that it upgraded its rating on GSI Technology from a SELL rating to a HOLD rating.

    Currently
    , from a technical analysis view point, we believe the hot stocks of 2010 may be attempting to build support just below the $2.50 area. Therefore, should we be correct in our analysis and should this possible support area continue to hold, levels near this possible support area may offer long term investors an attractive entry opportunity.

    We continue to find the
    developer and marketer of static random access memory (SRAM) attractive due to its strong balance sheet, its consistent profitability and its strong margins.

    However, readers should be cautioned of possible liquidity issues with the hot stocks for 2010. There are 26.833 million shares outstanding and the float is approximately 15.64 million. Additionally, volume averages only approximately 43,200 shares per day. Keeping this in mind, when trading such thinly traded 2010 hot stocks, we strongly recommend the use of limit orders and warn readers to expect added volatility.

    Furthermore, readers should be aware that one customer accounts for a large percent of the Company's revenues. The loss of business from this or any one of its current customers could have a material adverse effect on GSI.

    Over each of the past
    three fiscal years, Cisco Systems (CSCO) accounted for between 28% and 30% of the Company's net revenue.

    For more information on GSI Technology Inc., please visit the Company web site at www.gsitechnology.com. Additionally, information can be obtained from the Company at (408) 980-8388.


    SORL Auto Parts Inc.
    (NASDAQ: SORL)
    $3.00
    The Chinese truck and automotive air brake valves and hydraulic brake valves manufacturer and distributor announced financial results for its first quarter ended March 31,2009.

    The Company announced that its revenues for the first quarter decreased 34% year over year to $20.243 million from $30.658 for 2008. Net income attributable to stockholders for the quarter fell to
    $927,629 from $6.555 million the comparable quarter of 2008. The decline was primarily due to the decreased demand in domestic and international markets due to the global financial crisis.

    Additionally, SORL reported that gross margin for the quarter fell to 27.2% from 28.2% for the comparable quarter of 2008. The decline was a result of the lower sales.

    Currently, from a technical analysis view point, the 2010 hot stocks market appears as if it may be attempting to build support just below the $2.00 area. Therefore, should we be correct in our analysis and should this possible support area continue to hold, levels near this possible support area may offer long term investors an attractive entry opportunity.

    We maintain our optimism about this Company's sales expansion and our belief that the international market continues to hold substantial potential. We continue to feel SORL's export marketing and sales commitment will continue to pay off and that the international market alone could lead to tremendous revenue growth.

    However, readers should be cautioned of possible liquidity issues with the hot stocks 2010. There are 18.279 million shares outstanding and the float is approximately 6.92 million. Additionally, volume averages only approximately 33,400 shares per day. Keeping this in mind, when trading such thinly traded 2010 hot stocks, we strongly recommend the use of limit orders and warn readers to expect added volatility.

    Furthermore, in addition to the normal risks associated with micro-cap companies, SORL has the added risk of potential changes in Chinese regulations and economy. Also, readers should be advised that a small amount of customers account for a large percent of the Company's revenues.

    On Friday, May 15, 2009, the Russell Microcap™ Growth Index closed at 610.37. The index ended the week with the best performance of the four indexes for the three periods covered. The Russell Microcap™ Growth Index was up 7.79% over the past month and up 5.16% year to date. The Microcap™ Growth index was down 34.31% over the past twelve months.

    The Russell 2000® was up 5.12% over the past month and down 4.11% year to date. The index was down 34.88% over the past twelve months.

    The S&P 500 ended the week with the worst performance of the four indexes for its past month and past twelve month periods. The S&P 500 was down 1.14% over the past month and down 2.26% year to date. The index was down 37.98% over the past twelve months.

    The Dow Jones ended the week with the worst performance of the four indexes for its year to date period. The Dow was down 0.75% over the past month and down 5.79% year to date. The index was down 36.36% over the past twelve months.

    From a technical analysis point of view of the two major indexes, the S&P 500 may see some support around the 650 area and some resistance just above the 900 area. The Dow may see support coming in just below the 6,500 level while resistance may be expected just above the 9,000 area.

    Scam Watch
    "Lending Scams"

    The Federal Trade Commission is warning consumers to be aware of lending fraud in the form of advance fee scams.

    In this scam the fruadster guarantees an unsecured loan regardless of your credit history.

    The advance fee in this scam is an amount that you must pay in order to receive the loan.

    Some of the recent scams claim that the loan requires a deposit or that the victims credit is so bad that a few payments are needed in advance. Other forms of this scam ask for an insurance fee or collateral for the loan amount.

    There are a number of measures investors can take to help protect themselves from these types of scams.

    Remember that legitimate lenders will not normally ask for up front fees when you are applying for a loan.

    Also, legitimate lenders will give you a full rundown and written details on the total cost of the loan. Many lending scams will refuse to give you the loan details in writing.

    Additionally, many of the lending scams will use company names that are similar to well known reputable institutions in hopes of confusing the victim. Consumers should check out unfamiliar companies with your local consumer protection agency.

    Finally, Individuals can seek help from a consumer credit counseling agency if you are having financial problems and have no access to credit or savings.

    Mission
    We know that micro-cap hot stocks for 2010 can be risky but we believe that large profit potential exists in some of those same micro-cap companies.

    The MicroCap Gems Newsletter attempts to find tremendous growth opportunities in the micro-cap market. We look for companies showing unusual promise and what we perceive as a favorable risk to reward ratio by using meticulous analysis of the company and its competitors. We do this by reading and evaluating all of the research reports written about micro-cap hot stocks for 2010, contacting the companies, customers and competitors.

    Most of the research written about micro-cap hot stocks for 2010 is termed "issuer paid research" since the companies themselves pay the research firm to have the report written.

    MicroCap Gems is not an issuer paid research provider and to preserve our objective evaluations MicroCap Gems and its employees do not accept money, stock, services, or in-kind advertising in exchange for coverage of particular companies, securities or markets nor do any MicroCap Gem employees trade in any of the companies covered.

    We believe that issuer paid research holds much value as long as you can filter out those reports making noise from the companies with true promise.

    When we find a real 'gem' that merits your consideration we will profile the company in the MicroCap Gems newsletter. As many of these Gems are long-term investments, once we profile a company we will keep you abreast of on going developments as its investment story unfolds. As we do our due diligence we will also uncover and alert you to scams and pump/dump operations, which will help you avoid the land mines in the micro-cap world.

    Editor Bio
    The editor, Steven J. Anderson, has over 16 years experience in the investment and trading arena. He graduated from West Virginia University in 1992 with a BSBA in Finance/Investments and Securities. While in college, his stock market passion had him actively analyzing and speculating in small and micro-cap hot stocks for 2010 by the time he started his junior year.

    After college, Steve began trading commodity options and Dow futures as a member of the Chicago Board of Trade. However, his infatuation with smaller hot stocks soon had him starting up his own small cap investment newsletter. In 1996 he began writing the Anderson Small Cap Report that was an equities newsletter to investors focusing on small and micro capitalized stocks. Commentary from that newsletter was featured on many web sites and investment publications.

    In 2004 Steve gave up trading to take a job as an Equity Analyst and ended the Anderson Small Cap Report.

    Once again he found himself longing for the opportunity and excitement only found in the micro-cap stock arena. So in 2005 the MicroCap Gems newsletter was born.

    Steve still believes that one of the most enjoyable aspects of writing his newsletter is his being permitted to help others benefit through his knowledge and experience. His infatuation with the markets and his desire to help others learn drives him to speak annually at the West Virginia University MBA Executive Speaker Series. At these seminars Steve speaks to students and industry professionals about his insight and involvement within the intriguing world of trading and investing.

     

    Stem Cell Breakthrough

     have to keep it a bit short this time because Gary needs lots of room for today's responses to yesterday's issue. I have remarkable news for you. It ranks, in fact, among the great humanitarian breakthroughs of our age.

    BioTime, Inc. (BTIM: OTCBB) CEO Dr. Michael West was the final speaker at the World Stem Cells & Regenerative Medicine Congress 2009. On May 14, he presented preliminary scientific data about his ability to program stem cells to become precursors to joint, cartilage and other skeletal cells. An in-depth peer-reviewed journal article will follow.

    If that doesn't excite you, you haven't been paying attention.

    This is why it should: West produces these purified cell lines using information produced by his ACTCellerate platform. As you may know, it just won the California Institute for Regenerative Medicine's largest grant ever. This programmed purity, in turn, makes regulatory approval far less problematic.

    This is because all but a few other researchers using his platform extract stem cells from a soup of different developing stem cells. BioTime's cell lines, however, are pure because they have all undergone the same biological programming. But I digress. Let's talk about the implications of the fact that West and BioTime can program cartilage stem cells specifically.

    Arthritis is a national tragedy. It is a human tragedy. It causes acute, unrelenting pain. Two-thirds of its victims are under 65, but the odds of getting it skyrocket as we age. As life spans continue to increase, arthritis will become an even larger catastrophe. Severe arthritis almost inevitably causes other problems. These include depression and conditions created by the lack of physical activity, such as heart disease and obesity.

    How big is this problem? Think of this human scourge in financial terms.

    In the long term, if we could increase our GDP by 2-3% annually, we could probably solve our current deficit problem. It would certainly move the entitlement crisis meltdown out by many years.

    Somewhere between 2-3% of our GDP is currently consumed by arthritis. This includes increasingly expensive therapies and lost incomes. More than 46 million Americans have been diagnosed as having the disease. With unreported cases, the actual number may be 70 million. It is America's leading cause of disability and morbidity. The CDC says it costs the U.S. $128 billion in 2003, but it is increasing rapidly.

    Arthritis is caused by the deterioration of joint, cartilage and other skeletal cells. Like brain and heart tissues, these cell types are among the few that do not regenerate. With cells potentiated to regenerate these tissues, however, the cure for arthritis is at hand.

    There are a few therapeutic details to be worked out yet, but they are trivial and will be worked out in clinical tests. The big breakthroughs have been made and Dr. West has patents pending on many of them. Moreover, the cost of a cure will be far less than the cost of current treatment modalities.

    Oh yeah, one more thing. West also announced in Geneva that his road map includes spinning off companies to treat specific diseases, including arthritis. If you own BioTime, you will own part of those companies. There will almost certainly be other companies that license his cures, which may include cells that cure the leading cause of death today ― heart disease. I'll be speaking with Dr. West frequently to make sure you know about these companies as soon as the information is available.

    I have much more information for you, but I'm over my word count. Specifically, I have personal news about International Stem Cell Corp.'s (OTCBB: ISCO) new stem cell-based cosmeceutical that will cheer the hearts of anybody who wants to look younger or make transformational profits.

    I got permission from the boss, Addison Wiggin, and our legal department to accept some of ISCO's skin treatment. I was concerned about possible conflict-of-interest issues, but my wife is now using the product. The results, happily, were rapid and dramatic. More on that later.

    Before we commence with the yelling and recriminations, let me remind you that Patrick Cox will be on this year's Whiskey Bar panel at the Agora Financial Investment Symposium. Haven't signed up yet? You can do so here.

    Here we go…

    Guys,
     
    I keep reading about the demise of motoring as we now know it.  Do you honestly think that this staple of the American way of life is going to go away anytime soon?  You've got to be kidding me.  That will happen when pigs fly.  People will still buy used cars if they can't afford new one.  You will always have people wealthy enough to afford cars no matter how expensive they are.  Gas could be $8.00/gallon and still people will buy cars, gas and whatever else is necessary to be able to be independently mobile.  Things will definitely change but motoring will not be eliminated anytime soon.  Maybe 50 years from now we will have much more efficient vehicles but they will still be around and gas will still be used. 
     
    If you want to see a revolt from the masses on a scale never before seen, just try to suggest removing independent motoring from the American landscape!  I, for one, will be one of the first to lead the charge against it.

    Exactly.

    No one is saying "we" should deliberately remove anything. We're just saying that a facet of life taken as a god-guaranteed right may prove to be prohibitively expensive to maintain in years to come. Unthinkable to most of us now, I know, but it wouldn't be the first time in history the unthinkable took a nation by surprise.

    We also expect the reaction against this very likely reality to manifest as violence toward some group or another.

    This Shooter provides me with a little cover fire…

    Gary, thoughtful column from you and JHK, as always. Just a small point that may have a big, big impact on how the 'average' American ― soon to be former middle class? ― will react to having the perks of being an American evaporate before disbelieving eyes.

    If you're not familiar with Robert B. Cialdini's Influence: The Psychology of Persuasion, this is a must-read. In very accessible language, he lays out the processes that mold what we collectively believe and why, and how we behave because of those beliefs. The crucial part for purposes of JHK's theme of 'peasants with pitchforks' is contained in the section on scarcity. Just to sum up, he documents that newly experienced scarcity has a more profound affect on those who suffer it than those who have always known it...makes sense. He quotes sociologist James C Davies. This from Wikipedia:

    Davies asserts that revolutions are a subjective response to a sudden reversal in fortunes after a long period of economic growth. The theory is often applied to explain social unrest and efforts by governments to contain this unrest. This is referred to as the Davies' J-Curve, because economic development followed by a depression would be modeled as an upside down and slightly skewed J.

    "Revolutions are most likely to occur when a prolonged period of objective economic and social development is followed by a short period of sharp reversal. People then subjectively fear that ground gained with great effort will be quite lost; their mood becomes revolutionary. The evidence from Dorr's Rebellion, The Russian Revolution, and the Egyptian Revolution supports this notion; tentatively, so do data on other civil disturbances. Various statistics ― as on rural uprisings, industrial strikes, unemployment, and cost of living ― may serve as crude indexes of popular mood. More useful, though less easy to obtain, are direct questions in cross-sectional interviews. The goal of predicting revolution is conceived but not yet born or matured."

    (From the abstract of J. C. Davies: "Toward a theory of revolution" American Sociological Review 27(1962): 5-19

    It seems fairly obvious a huge middle class that is taken down relatively abruptly here in the States will not go as quietly as they did in Argentina a few years ago...they've had more practice down there. I have been saying for some time now that we could see political acts that are at least as extreme as we experienced during the Viet Nam years. Personally, I think it likely they will be more extreme, because it was our ideals being challenged then, not our economic survival.

    Keep up the thought-provoking messages. There will always be naysayers, but they're getting a bit shrill now...they so want to believe, eh?

    Another Shooter sends a gentle and well-received rebuff:

    Gary,

    You live two blocks from your grocer, take no vacations to far away places and have no credit cards.  What are you still living for?  I agree one can live without television and even credit cards, but your life sounds a lot like that of an inmate.  You and Kunstler are two of the dreariest people I have read in a long time.
     
    You can curse the darkness or turn a light on.  You're darn right this country, and world, is in one heck of a mess but I choose to not participate in the destruction.  I enjoy some of the stuff you guys write but boy do you guys have a rough view of things.  Surely you don't mean you never get out of that little world you wrote of; "two blocks from my job and local grocer", "no faraway vacations".  What do you do besides lift a little iron and poke around on the piano.  Get out of prison, man.  It's time for a jailbreak.

    And also, I live on 3 acres out in the country and I don't plan on having to move into the ghettos as Mr. Kunstler seems to suggest everyone will have to do one day.  I have been to Europe many times and it seems that that is where you guys should be living.  It's very crowded over there with tiny cars and miniature houses and grumpy people all around.  Kind of like your world.  On the other hand, just hang around awhile as Mr. Obama is rapidly doing everything in his power to lower us to that standard of living in Europe.  We are now socialists/Marxists.  Our media is now a propaganda tool of the government; our President has thrown away the Constitution and is nationalizing everything in site. Once again freedom and liberty are waging a battle against the socialists.   But you know what? He's not going to suc ceed because America is spirit, a spirit of freedom and liberty with no gaggle of insecure, lying, academic fools about to dictate how we live.  Tally ho.

    Just so you all know: I'm not kidding when I say the most important thing in the realm of human interaction is the right of the individual not to be interfered with, to enjoy freely the fruits of his own thought and labor. In a just world this notion would be the guiding light of all political behavior, but it's an unpopular opinion you only hear from fringe elements and in frontier bars like this.

    Another tenet that defines the crowd in the Whiskey Room is our familiarity with and acceptance of limits. Children stop being such when they comprehend their own mortality. We think it'd be a mite healthier if our species came to terms with notions of scarcity and extinction. No individual life lasts forever, nor does any individual species.

    Ways of life and civilizations end, too. Things change and not always for the better or to our liking. That's the way of things.

    So are we just a bunch of slightly soused classical liberals with a clinical, fatalistic bent?

    If the shoe fits, Shooters...

    Many of you out there just don't like it when we in the Whiskey Room bang the Drum of Doom. I know it gets a little tiresome to hear it, but we just don't want anyone saying that we didn't do our best to warn them.

    Maybe it'd be easier coming from Bill Bonner who has considerably more street cred than the no-name punk managing this watering hole…

    The International Herald Tribune says that Latvia is being crushed under a huge government deficit. Formerly middle-class citizens are out of food, says the paper. Further down on the socio-economic ladder are scenes of "Dickensian misery."

    What provoked this horror, according the IHT, is a current budget deficit equal to 12% of GDP.

    Wait! The US budget deficit is 13% of GDP. Sooner or later, that deficit will crush Americans too...

    There. Latvia as prelude…a deracinated middle class…and those below the middle are landing in "Dickensian misery" (good one!). And I didn't say it.

    It can get really bad for all us, Shooters…even those who have the means to prepare and take pains to do so. Doesn't mean you shouldn't take pains if you have the means, however.

    In fact if you can, you should be doing everything in your power to prepare for economic depression, encroaching scarcity and the dumb things government will do along the way.

    Allow us to help…for free. Sign up for our webinar and learn how to turn the inevitable disaster in the Treasury bubble into 71% profit…which we aim to make in three weeks. It's this Friday, May 29 at 3:00 pm…and it's free! See you there.

    Before we part, I'd like to thank Patrick for tending the bar today. It does seem likely to me that some technologies will make life healthier and happier for everyone…even if we don't get to drive as much or have as many doodads from Asia on credit.

    It Pays to Listen to Meredith Whitney

    We've always been a fan of Meredith Whitney. . .

    Not just because she's agreed with everything we've said, but because she tells it the way it is.

    And we're happy to see Meredith Whitney doesn't drink from the same Kool-Aid the banks do. Nope. She tells it the way it is, destroying the idea that the financials rally is real.

    "They were overdone all the way into this rally. What happened was the government ― I call this the great government momentum trade ― the government enabled the banks to have better than expected, better than even the banks could organically deliver, first-quarter earnings. That looks like it could continue into the second-quarter and the third-quarter. The banks rallied from well below tangible book multiples to almost two times tangible book multiples. . . the underlying core earnings power of these banks is negligible," she says.

    Worse, this will not be the last time banks need to raise capital. And she believes bank earnings in 2010-2011 will be below consensus estimates.

    But if you ask Bill Miller, he'll tell you she's dead wrong. Miller believes "financials have the biggest potential to outperform other top stocks for 2010 because of how far they've fallen in the worst bear market since the Great Depression. . ."

    Miller also said he expects U.S. housing prices to stabilize "this year and for the economy to perform better than Federal Reserve projections." He also believes the equity markets will rise 20% to 30% in 2009 and that his fund will rebound. (But if he continues to invest in companies like AIG and Freddie Mac, or make any other massive bets in companies that crumbled, the fund may not improve any time soon.)

    Who do we agree with?  Top stocks market of 2010!

    Whitney. . . and for reasons we've spoken about here in Wealth Daily: crumbling commercial real estate and coming Option ARM resets.

    Investors may disagree with us, too, as they disagree with Whitney. But we are the same analysts who called for the downfall of subprime and its spillover into the greater economy, the downfall of financials, the Treasuries, the British economy, and even the breakdown of our own economy, which is struggling to come back.

    But our economy will not come back until at least 2012, in our opinion (mark these words). And that's because of commercial real estate, mounting foreclosures, higher unemployment figures, and more pain in residential real estate. . .

    Commercial Real Estate Problems: "Have the Potential to Intensify"

    Even as banks deal with rising foreclosures and defaults, lenders have something else to worry about ― quick rising tides of potential losses from commercial real estate. These losses could easily stretech into the billions, as delinquencies and defaults on office buildings, retail buildings, and hotels have more than doubled in just six months.

    Says the Associated Press, "While homeowners are defaulting at almost four times the rate of commercial landlords, the sudden spike in late payments has many industry insiders worried about the collateral threat to the economy and financial sytem. Nearly $73 billion worth of commercial real estate loans are in some level of financial distress, according to Real Capital Analytics."

    And its risk to the greater economy is largely unknown, but it'll be bad. . . real bad. Frighteningly, its impact is likely underestimated in the government's bogus stress test.

    Worse, about $271 billion worth of commercial real estate loans are coming due this year alone. That's part of the reason why General Growth Properties dug itself an early grave.

    Yep, the commercial real estate market is just beginning to mirror the 2007 residential real estate market. The meltdowns at some of the biggest commercial REITs will be another blow to a financial system teetering on the brink of disaster. And nothing may be able to stop the slide.

    Even Jamie Dimon is bearish, saying the bank industry should brace itself for "rapidly rising" losses related to commercial real estate. "In general, the losses [in commercial real estate] are going up, and I think if you talk about the whole system. . . you are going to see rapidly rising charge-offs in real estate loans."

    Even Dallas Fed chief Richard Fisher believes "problems in the financial industry and commercial real estate have the potential to intensify. . ."

    Additionally, vacancies in commercial properties are skyrocketing, and millions of square feet of commercial real estate are currently under construction and ready to flood the market. About $171 billion in loans backed by offices, shopping centers, hotels, and other buildings are coming due this year, according to Union Tribune. Experts are fearful there may not be enough "credit capacity in the system to refinance them."

    As for Option ARM resets. . .

    They are just around the corner and will mark the beginning of the second half of our crisis. But this is nothing new. We've been warning about these resets for months, just as we warned about subprime in February 2007.

    It's the reason I remain bearish on the market medium-term.

    For an idea of just how bad the resets could get, take a look at some of these charts pulled from Dr. Housing Bubble.

     

    Top Stocks Chart

    resets1

     

     

    resets2

    Top Stocks For 2010

    What's more, about $750 billion of Option ARMs were originated between 2004 and 2007. And a reported 55% of those who took out an Option ARM owe the bank more than what their homes are actually worth.

    As of December 2008, 28% of Option ARMs were already delinquent or in early stages of foreclosure.

    We haven't even begun to see massive resets, and already one in every four is a disaster. Guess what happens when $30 billion of Option ARMs reset this year and another $67 billion reset next year?

    Even worse, according to Dr. Housing Bubble, "the average Option ARM monthly payment is going to go up by 63 percent or $1,052." And this will happen to all of these loans, whether or not the loan holder loses their job.

    You've been warned. Option ARMs will be the next leg of the credit crisis. No one can stop this from happening. Again, this is the reason we remain bearish medium-term and why we'll continue to load up on put options.

    So, the next time someone says we or Meredith Whitney are wrong. . . just laugh in their face.

    We sold 23 oz. of silver at a gun show!

    We sold 23 oz. of silver at a gun show this weekend! Woo Hoo! I had three people transport and sell silver on our behalf at the Vallejo, CA gun show this weekend. There was only one other numismatic dealer, and we had the lowest prices on bullion, and we were the only ones who had bullion in bulk. We took and offered 6500 ounces of silver and 70 ounces of gold. While the booth was cheap, there was also the cost of hotels, and wages, so we spent nearly $1000 to offer silver at the show.

    Silver was just not even on the radar screen of people at the show. They had no thought or comprehension of silver or gold.

    When asked if they wanted silver, people retorted, "What do I need silver for, I have a gun, and ammo! I can get whatever I need." Scary, but true!

    It appears that these thoughtless gun owners are all planning on turning to a life of crime to provide for their needs if the economy gets much worse. That is very, very bad news for us all.

    Unfortunately, the manipulation in the precious metals market extends into all media and schooling as well. People are just not being properly educated on how to take care of themselves in the event of a dollar collapse, or banking collapse, and I, personally cannot afford to educate them all. I have a reach to the 80,000 people on this email list, but only about 15,000 read each one, and my market reach is to just over 1 in 1000 investors out there.

    Let this serve as a severe rebuke and warning to those people in positions of influence in the media and universities who are assisting the manipulating of precious metals, and all of society, through a propaganda machine that rivals the days of the Nazis.

    While Obama has been called the "gun salesman of the year", he has also been the "silver salesman of the year". But recently, silver sales have declined, as can be seen in lower premiums, probably due to the propaganda that we have a "green shoots" recovery in play. Nice propaganda campaign, it worked, temporarily, but to what end?

    To those in power and who have influence, let me ask you one thing. When 80 million gun owners become impoverished due to the crashing dollar, what are you going to do, and where are you going to go to escape their wrath?

    When you rob people on a mass scale, it's going to backfire unless you put precious metals into the hands of the people so they can feed their families in case of hard times. What do you think is going to happen when gun owners lose the value of their investments and bank deposits due to all the paper money fraud crimes? Those people will be out for blood, and they will have the means to get it!

    And it will be the heads of bankers and politicians that they will seek vengeance upon, after all, those are the "fat cats" who have robbed the people, and who can be robbed, especially if they are dead.

    Of course, the manipulators have not thought that far ahead. They are deceivers, self deceived, the blind leading the blind, and both will fall into the ditch!

    With government funding of schools and universities, and with CFR controlled globalist media in cooperation with the banking establishment, there is a news blackout on the opportunity and importance of owning silver and gold.

    How is it possible that silver prices have literally exploded from the $8/oz. level in October to nearly $16 today, a mere 9 months later, while public investment demand has all but dried up?

    Is that somehow evidence of a top? Hardly!

    It's simple. We have a manipulated market.

    And I'm not just talking of the COMEX, the manipulations extend throughout all of society. See here:
    Major Frauds of the U.S. Monetary System Feb 26, 2004

    When public investment demand goes through the roof, as it did on the "breakout" when silver topped $20/oz. back in the spring of 2008, they dropped the price, as a falling price trend can discourage investment demand. For the first time, the dip did not work, and investment demand increased, and premiums stayed high all the way down to $10/oz by October, when I started dealing.

    And then, when the public stops buying, as the public gets sick and tired of low prices, or when the public silver buyers start to pause, looking for another dip, they let the price rise.

    But the market structure tells the real story of why silver is not remotely close to a top:

    About 100 million oz. of silver are purchased for investment per year. This, at $15/oz., is a paltry $1.5 billion going into silver each year.

    $1.5 billion spent on silver, from a world with well over $50,000 billion or more in assets, means that far less than 1% of 1% of people's capital is being converted into silver per year.

    Meanwhile, the banks owe people over $190 billion worth of "other non-gold precious metals", or basically, silver, which is over 100 times more than real physical annual market demand.

    BIS Admits $190 Billion Silver Fraud April 6, 2009

    This data, $190 billion, is directly from the BIS, the Bank of International Settlements. This is good and valid data.

    http://www.bis.org/statistics/derstats.htm

    At the link above, see
    21 Amounts outstanding of OTC single-currency interest rate derivatives
    "21C By instrument, maturity and counterparty"

    That's this link:
    http://www.bis.org/statistics/otcder/dt21c22a.pdf

    See the center middle column towards the bottom, under "Other Precious Metals", which excludes Gold.

    There is just no way that the bankers can pay their silver debts. How can they get 100 times more silver than is produced in a year to pay everyone off? The printing press? They protect their silver debts by creating more silver debt, selling excessive futures contracts, like a credit card junkie who takes out a cash advance on a new credit card to pay all the bills.

    People are just too trusting of the banks still, and what will it take to wake them up? Do they somehow need to take even more catastrophic losses before they begin to trust the reality of real precious metals?

    I warned about the bankruptcy of General Motors years ago.

    The Death Of The Dollar Mar 18, 2005

    It was so obvious, it was a theme in my writings for over a year before I and my readers simply grew tired of the theme.

    GM filed for bankruptcy today, at long last.

    And look how GM stock compared with silver over the last 6 months.

    Silver is up 60% and GM is down 90%.

    Where is the fanfare and accolades and free publicity that is my due? Let me tell you, you can have a better mousetrap, but the world will NOT beat a path to your door, especially if they are not listening.


    You, my readers, are among the few who are actually listening to, and actually know, the real story on silver. And nearly all of you are on my list because you went looking for information about silver. So act on it. Don't delay. Buy silver today, while premiums are at their lowest all year.

    As of last night, we have 80,000 oz. of various kinds of silver for sale, and 451 ounces of various kinds of gold.

    That's barely enough now for 1 oz. of silver per reader. Didn't I tell you that the silver market is small, and cannot handle the orders when YOU all decide to buy at once? Our minimum is 100 oz. at a time, otherwise we lose money on shipping and handling, because our prices are so low!

    Buy it now from our shipping department, 10 AM - 4 PM, M - F, Pacific:
    (100 oz. silver minimum, 100 oz. increments, USA shipping, wire transfer only!)
    Breana (530) 913 4359 silver_support@vzw.blackberry.net
    Janelle (530) 913 0553 silver_support1@vzw.blackberry.net

    Bullion Price List: http://www.hommel.name/cgi/ssrbidask
    These are price indications only, and may change daily as we attempt to narrow the spread. We may offer gold and silver for less if, or as, people start selling large amounts of gold and silver to us.

    P.S. If you have purchased the "look at my portfolio" it is now updated. Please login to the site, or email support@silverstockreport.com if you have lost any passwords, or in case your subscription expired.

    The High Ground in China's IPO Flood

    The second half of 2009 promises to be profitable for ETF investors who play China.

    Following an 8-month break in new stock issues ― the sixth such pause since 1994 ― 33 IPOs will hit the mainland exchanges in Shanghai and Shenzhen between now and August.

    That's over 1.86 billion fresh shares about to get dumped on top of a rallying market. Understandably, some local stocks investors fear the IPO flood may "short circuit" the run up.

    But the move to re-introduce new share sales looks like a net positive for the health of China's equity markets, stoking new participation and easier access to liquidity for deserving companies.

    So, let's ride the IPO shock downtrend with a combination of emerging market shorts, inverse ETFs, and options. . .

    Then buy back into the upswing after the new issues settle and local sotcks investors get roaring again!

    Here's the angle.

    "A Welcome Development"

    Instead of giving priority to institutions like banks and pension funds, regulators have decided to offer retail stocks investors first crack at the Summer '09 crop of IPOs.

    There will be some growing pains in the process of introducing such a huge change, of course. . .

    Above all worries, an IPO onslaught could dial back the nearly 50% upswing in A-shares (as opposed to Hong Kong-traded H-shares) we've seen so far in 2009 for Morgan Stanley's China ETF (NYSE: CAF).

    Those fears have led to a moderate sell off in A-shares, even with a half-trillion dollar stimulus package buttressing optimism about 2009-2010 earnings.

    Are sellers way off base? Not necessarily.

    The local head of JP Morgan's equity strategy unit Jing Ulrich says, "Concerns that the new offerings will divert funds from the secondary market are legitimate."

    But Ulrich also called the IPO resumption "a welcome development, considering the attention paid to market-oriented pricing and small stocks investor participation."

    The short-term shock should lead to medium- and long-term benefits.

    Why not exploit both trends as they unfold?

    Playing the Downside and the Upside Too

    The Morgan Stanley China A Share Fund (NYSE:CAF) has gained more than 54% in the past six months. Even though the Dow has pulled up since early March, CAF has doubled the blue chip index's success.

    china etf comparison

    A-shares also outperformed H-shares over that same period, as we see when we look at NYSE:FXI, the iShares FTSE/Xinhua China 25 ETF, in the same chart above.

    The difference in China-based share varieties is important: H-shares can be bought directly by foreigners, A-shares can't.

    So, on one hand, FXI didn't enjoy the same upward momentum as CAF did from February through April. But on the other hand, FXI isn't being hurt by mainland uncertainty ahead of the IPO deluge.

    CAF is the one to short, while the FXI's inverse ETF ― FXP ― offers an easy option for going against the less-volatile H-share index.

    As the IPOs soak in, you'll want to reverse those positions and go long again.

    By September, it will be time to buy FXI again as Chinese shares tick back up.

    Jun 1, 2009

    Today, a Guest Host of Stocks Investment

    Bonds down. Gold up $17.

    Someone seems to think there is a whiff of inflation in the air.

    Sniff...sniff....

    We're not so sure. It seems too early to us.

    But we're not even going to think about it. Today, we've got to make tracks. We're traveling.

    In light of our voyage we're turning today's essay over to guest host Ian Mathias, of Agora Financial's 5 Min. Forecast. He'll take over from here...

    Your family's share of the government debt is now over half a million dollars. A record $546,668, to be exact.

    That cheery Monday stat comes courtesy of a USA Today study, which claims that each American family's share rose 12% in 2008. That's $55,000 in new government debt last year for every US household - thousands more than the median household annual income. Here's how it breaks down:

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    Last year's spike is the biggest since the Medicare prescription drug benefit was added in 2003. According to the rag, the government garnered $6.8 trillion in "new obligations" in 2008, bringing the total US tab to $63.8 trillion. Given our spending record so far in 2009, it's safe to say your family's burden is already much, much larger.

    And you ain't seen nothin' yet... the Social Security program will grow by 1-2 million beneficiaries every year until 2032 as baby boomers retire. Medicare will add just as many each year starting in 2011, when that same demographic starts turning 65.

    Unless the US becomes a net saver, "another global financial crisis triggered by a dollar crisis could be inevitable," forecast former Chinese central banker Yu Yongding over the weekend. (Oy... Beijing is 7,000 miles from Washington, and even they can see this coming.)

    Yu's comments were purposefully timed - US Treasury Secretary Geithner embarked on a sudden PR tour of China this weekend. His mission? Keep the cash flowing from America's No. 1 creditor.

    "No one is going to be more concerned about future deficits than we are," said Geithner,