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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.”

  • Eurozone

  • Hungary's Spat with the IMF and EU Could Signal Another Crisis to Come The biggest financial news story out of the Europe this summer is getting very little play in the U.S. mainstream press. However, it has the potential to torpedo the European Union (EU), and has disastrous implications for borrowing costs worldwide.

    Basically, a miniature banking crisis is festering in Hungary. If it isn't contained, it could grow into a genuine crisis that infects the secondary lending markets around the world.

    Hungary is supposed to have about $30 billion in domestic liquidity for exchange, the equivalent of about five months of capital in its national account. But it won't be getting additional funds from the EU machine in Brussels, or the International Monetary Fund (IMF), anytime soon.

    Read More...
  • Money Morning Mailbag: Jaded Investors Cast Wary Eye On Scope of Bank Stress Tests The results of Europe's bank stress tests are due July 23. But the question remains whether the tests will shed enough light on the banking sector to restore investor confidence.

    "All these stress tests mean that we are peeling away layers of the onions, but chances are we are not going to get the full clarity that we as investors deserve," Neil Dwane, chief investment officer for Europe at equities specialist firm RCM, told The New York Times.

    Readers who are already on guard from Wall Street manipulation and stalled financial reform have pulled back from volatile markets and are skeptical about the effectiveness of bank stress tests:

    Read More...
  • Uncertainty Undermining the Global Economic Recovery The International Monetary Fund (IMF) said yesterday (Thursday) that the global economic recovery is losing steam because uncertainty in financial markets is keeping businesses and consumers from investing in future growth.

    In a revision to its World Economic Outlook released yesterday in Hong Kong, the IMF said worldwide economic expansion will decline to 4.3% next year from 2010's 4.6% pace. The forecast for 2010 was revised upwards by 0.4 percentage points to reflect faster-than-anticipated growth earlier this year.

    However, "downside risks have risen sharply," the IMF warned, referring to European governments' debt problems and volatility in financial markets.

    Read More...
  • U.S. Economy: Headed For a Second-Half Slowdown Constant stock market volatility, a crippled job market and the troubles plaguing the European markets are starting to take their toll on the U.S. economy. After the major market rally of 2009, is the U.S. economy headed for a second-half slowdown... or, worse, the dreaded double-dip recession? Read this report to find out exactly what’s in store for the U.S. economy... Read More...
  • Money Morning Midyear Forecast: The U.S. Economy is Headed For a Second-Half Slowdown Most textbook economists say that the U.S. economy is engaged in a broad-based recovery. But while there's a consensus that there's no "double-dip" recession on the horizon, the evidence suggests the nation's economy is headed for a slowdown in the second half of 2010.

    The reason: In a market that derives 70% of its growth from consumer spending, the last half of this year will be all about those consumers - and about the economy's inability to generate enough jobs to keep the nation's cash registers ringing.

    If you add to that concern the end of the various government stimulus efforts, possible fallout from the Eurozone debt contagion, and oil in the Gulf of Mexico defiling the shores of four states, you end up with an economic outlook that's clouded with uncertainty.

    And that uncertainty will continue to stifle hiring and will result in another round of consumer belt-tightening - and a continued economic malaise.

    Read More...
  • Is it Time to Bet Against the U.S. Dollar? The U.S. dollar has been one of the world's strongest currencies in the first part of 2010. But, is the greenback really the bet choice for safety, quality and security? Read this report to find out why it's time to bet against the dollar... Read More...
  • How to Profit From Europe's Stealthy Resurgence European countries - both inside and outside the Eurozone - are slashing their budget deficits.

    Greece, Portugal and Spain - three of the so-called "PIGS" - have to do so, of course. But Germany - generally reckoned to be in excellent shape - is also cutting its deficit, as is France, which hasn't run a budget surplus in 40 years. Britain, too, with no need to protect the euro (it's not a Eurozone member) just introduced a budget that cut the deficit by $140 billion over four years.

    U.S. President Barack Obama and other Keynesians warn that Europe may push its own economy - or even the global economy - back into recession.

    But here's the surprising reality: Europe may gain from its fiscal pain - and its deficit-trimming actions offer the best hope for a lengthy recovery.

    To see which European countries are expected to rebound - and which ones to invest in - please read on...

    Read More...
  • Why Investors Must Keep an Eye on Spain Greece is not the big story of Europe anymore - just a smoke screen.

    The big story is Spain and the United Kingdom, and the news is getting worse.

    In the past week, Spanish officials acknowledged to reporters that the country's banks and companies were having difficulty obtaining credit. The credible website EuroIntelligence reported that Spain is now effectively cut off from international capital markets, which is a major new development.

    Read More...
  • United States Fears Economic Stimulus Measures Will Choke on Europe's Drastic Budget Slashing While U.S. President Barack Obama will be gunning for more economic stimulus measures at this weekend's Group of 20 (G20) meeting in Canada, European lawmakers continue drastic efforts to rein in spending.

    The coordination of global efforts to promote economic recovery will be the main issue at the weekend's meeting, which was set to spotlight the value of China's currency before Beijing announced Saturday that it would allow the yuan to appreciate. The United States and Europe's differing views on the most effective strategies to maintain global economic growth and slash bloated government budgets are increasing tensions between leaders.

    "There is a need to move toward rebalancing," Stewart M. Patrick, a senior fellow at the Council on Foreign Relations in Washington, told CNN. "But every country has different domestic political demands, and that is what drives decision making."

    President Obama is worried that drastic austerity measures in Europe will choke global growth and collapse a fragile recovery.

    Read More...
  • The Sovereign Debt Crisis: Bad For Europe, Good For U.S. Stocks For several months now, we've been talking about the post-financial-crisis "new world order" that's emerged from the speculative excesses, recessionary realities and regulatory breakdowns of recent years. This new world order has created a world of lucrative new profit opportunities - that are governed by a new set of profit rules.

    In terms of that whole new rules/new profit opportunities paradigm, here's one that may surprise you: The ongoing European crisis could end up as a net positive for U.S. stocks.

    Let me explain...

    To see how Europe's travails can aid U.S. stocks, please read on... Read More...
  • Money Morning Mid-Year Forecast: The Dollar Headed for Some Change  In spite of an assortment of economic uncertainties at home, the U.S. dollar has been the star of the currency world for most of 2010. Spooked by persistent and seemingly insurmountable debt problems east of the Atlantic and the specter of unsustainable growth and potential inflation on the Pacific side of the globe, savers and investors fled European and Asian currencies for the relative safe haven of the dollar.

    As Keith Fitz-Gerald, Money Morning's Chief Investment Strategist, pointed out last week (June 10), from January through May, the dollar gained ground against all but two of the world's leading currencies - China's yuan and the Japanese yen - and it retained parity with them. The greenback appreciated by as much as 16% versus the struggling euro, which last week (June 8) briefly dipped to a four-year low below $1.20, and 13% against the British pound.

    The InterContinental Exchange's (ICE) U.S. Dollar Index (USDX), which measures the dollar's value versus a trade-weighted basket of six leading foreign currencies, climbed from a low of 76.732 on Jan. 14, 2010, to an intra-day high of 88.586 on June 8.

    Read More...
  • Hungary is the Latest European Domino to Fall As if Greece, Spain and Portugal were not enough of a concern for the European financial system, another villain has emerged from behind the curtains: Hungary.

    A new government swept into office in late May and the ruling party leader declared the country had little chance of avoiding a Greek-style credit crisis because the former government had been cooking the books.

    A spokesman for Prime Minister Viktor Orban said it was not an exaggeration to talk about the potential for default.

    Read More...
  • Are Spain's Banks Better Off than Speculators Would Like to Believe? Somebody is bluffing.

    Either Spain's financial system is on the verge of a breakdown, or hedge funds and speculators are exaggerating the vulnerability of Spain's banks to capitalize on short-selling Eurozone securities.

    Investors will have a clearer picture of what's going on in Spain when the results of stress tests performed on the nation's banks are released. But until those results are known, rumors of a bailout of Spain will continue to circulate and liquidity will remain tight.

    Borrowing costs in Spain and throughout Europe have been on the rise in recent months, as market observers fret over high levels of debt. At a closely watched auction for 12- and 18-month bills on Tuesday, the Spanish government raised $6.4 billion (5.2 billion euros). However, the 2.3% interest rate on the 12-month bills was 0.7 percentage points higher than what it paid last month. And t he yield on the country's benchmark 10-year bond rose 9 basis points to 4.823%, the highest in almost two years.

    Read More...
  • Stock Market Stuck as Investors Demand Risk Premium for Buying Stocks rose worldwide over the past week by 2% to 5%, swelling with sudden courage after positive economic reports from China and shaking off some worsening news in the United States about retail sales and jobs.

    Yet results in the past month are still heavily negative, ranging from -5.5% for U.S. stocks and -8.5% for Europe. China has suddenly become the most buoyant region, up 1.5% in the past month.

    The variation in one-week and one-month results illustrate perfectly how investors are showing that they are hopeful but unconvinced that recent strength in GDP growth and corporate income advances are sustainable, and therefore won't buy stocks heavily until prices are so cheap that they discount worst-case scenarios. They want a high risk premium, in other words, before buying -- sort of like demanding a 72-month warranty before buying an expensive car.

    Click Here to Find Out How the Risk Premium is Holding Back Stocks...

    Read More...
  • From Leader to Laggard: Is it Time to Bet Against the U.S. Dollar? The U.S. dollar has been one of the world's strongest currencies in the first part of 2010, posting double-digit gains through the end of May.

    And little wonder. The Greek debt crisis continues to threaten Europe's overall health, and could unleash an entirely new contagion on the rest of the global economy. Then there's China, - the engine of world growth during much of the financial crisis - which now appears to face the near-term triple threat of slowing growth, accelerating inflation and workplace unrest. Add in concerns about commodity prices and global debt levels and it's easy to see why currency investors have sought the safe haven of the U.S. dollar.

    In short, it appears that "everybody" knows the greenback is the best choice for safety, quality and security.

    But is that really the case? To me, the dollar is looking more and more like a colossal short that could wind up being one of the biggest moneymakers of the year for traders gutsy enough to take a stand.

    To see why the dollar could roll over - and to see how to play it - please read on ... Read More...