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We'll Tell You When It's Time to Tap Tesla

A week ago today, in a strategy story aimed at helping you survive and thrive in today’s whipsaw markets, Chief Investment Strategist Keith Fitz-Gerald told us to put Tesla Motors Inc. (Nasdaq: TSLA) on our “watch lists” for a likely future purchase.

“BP, Tesla is a definite ‘shopping list’ stock,” Keith told me back then. “We’ve been nibbling at it here, and have played it successfully several times. But it’s not yet at the point where I’m ready to jump all the way in. I think my rationale behind Tesla remains upbeat. I mean, you’ve got a real winning combination here – a disruptive sales model, a CEO who’s the most innovative guy on the planet, all the capital in the world that can be brought to bear. I don’t give a rat’s [tail] that New Jersey won’t let the company sell its cars there. There are much bigger opportunities. Wait ’til you see what the company does with China.”

Sometimes I think Keith has a “crystal ball” in his hip pocket…

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    Bailout Bandits: The Biggest Borrowers From the U.S. Federal Reserve

    The Eurozone debt crisis has replaced the U.S. financial crisis as the disaster du jour. But make no mistake: U.S. taxpayers will be paying the tab for the U.S. crisis for years.

    That's evidently not true of the banking sector, however, whose massive financial-crisis windfall is just now coming to light.

    In its January issue, Bloomberg Markets magazine reveals that - at the March 9, 2009 nadir of the financial crisis - the U.S. Federal Reserve had committed $7.77 trillion to rescuing the American financial system. That total was more than half the value of all that was produced in the U.S. economy for that entire year.

    While this was going on however, it was a deep, dark secret. The Fed never let on, for instance, that American banks were in such deep trouble that they required a combined $1.2 trillion on Dec. 8, 2008 - "their neediest day," Bloomberg said.

    But here's the best part: Many of the biggest banks have ended up doing great as a result of the central bank's largesse.

    Here's why: Because these "emergency" Fed loans gave banks access to ultra-low (well-below-market) interest rates between August 2007 and April 2010, banks worldwide were able to earn an estimated $13 billion.

    Dean Baker, co-director of the Center for Economic and Policy Research in Washington, told Bloomberg that banks seemed to have it both ways.

    Banks "were either in bad shape or taking advantage of the Fed giving them a good deal," he said. "The former contradicts their public statements. The latter - getting loans at below-market rates during a financial crisis - is quite a gift."

    Shah Gilani, a financial-crisis expert and Money Morning columnist who edits the free Wall Street Insights & Indictments newsletter, put it more simply: "The average American has no idea how protected the big banks in this country really are. Maybe that's because the biggest bank in the world is the U.S. Federal Reserve. And it happens to be a creation of - and 100% beholden to - the banks that it is a master shill for. It also lies to us and covers up Wall Street's misdeeds."

    What follows is a "power ranking" of the 20 banks that saw their outstanding loans peak at more than $25 billion - and some insight on how this Fed lending enabled Wall Street to profit, even as Main Street suffered.

    Click here to continue reading...

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