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Wednesday's "Earnings Beat" Makes This The Perfect "Bad-Market" Tech Stock

In last week’s Private Briefing report Our Experts Show You the Stocks to Pick in a ‘Stock-Picker’s Market’,” Money Map Press Chief Investment Strategist Keith Fitz-Gerald identified SanDisk Corp.(NasdaqGS: SNDK) as one of three stocks to buy in the face of the stock market sell-off.

And now we see why…

  • Featured Story

    The Secret System that Blew Another Hole in the Euro

    This may sound arcane and boring, but I promise you it's not.

    What I've learned will blow yet another hole in the already shaky euro.

    It begins with Bernd Schunemann, a law professor at the Ludwig-Maximilian University in Munich. He has sued the German Bundesbank over its participation in the Eurozone "Target-2" settlements system.

    Now I'll be the first to admit that yes, my eyes do glaze over when thinking about settlements systems-and I used to be a merchant banker.

    But looking at the details of the case I had something of a banker's moment of clarity.

    I realized that Schunemann was claiming that the settlements system had saddled German taxpayers with a potential liability of 615 billion euros, over $800 billion, in exposure to Greece, Italy, Spain and Portugal.

    After all, who would have to bail out the Bundesbank if it became insolvent?

    What's more, when you un-glaze your eyes and look closely, the risk is entirely unnecessary. It is yet another huge botch-up job by the EU bureaucrats.

    Here's what I mean...

    The Euro and the Target-2 Settlement System

    The Target-2 settlement system was introduced in 2007, as a replacement for Target (Trans-European Automated Real-time Gross Settlement Express Transfer System).

    The first Target was the large-scale payments system between central banks that had been introduced with the euro in 1999.

    Under the system, when a Greek makes a large euro payment to a German, his Greek bank makes a payment to the Greek central bank, which in turn makes a payment to the Bundesbank. Once it reaches the German central bank, it pays the German bank, which pays the German.

    For ordinary trade transactions, that's all fine and good. Greek exports to Germany are balanced with German exports to Greece.

    If, however, there's a big trade imbalance between the two countries, then gradually an imbalance grows up between the central banks. As it develops, the Bank of Greece ends up owing the Bundesbank more and more money.

    Even more serious is when Greek citizens rush to get their money out of Greek banks and put it in German banks. Every million euros Greek citizens remove from their banks is a million euros by which the Bundesbank increases its exposure to the Bank of Greece.

    You can see how this could be big problem-especially since that's the arrangement all around the Eurozone.

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  • euro collapse 2011

  • France May be the Domino that Causes the Euro to Collapse Commentators are wringing their hands again, worried the troubles in Spain could cause the whole euro project to collapse.

    As a result, all eyes are now on Spanish 10-year debt yields, which went above 6% last week as the threat of euro-chaos returned.

    But it's not Spain the markets should be worried about.

    The reality is that Spain is not in too bad a shape and that a rescue would be affordable for the European Central Bank even if it was needed.

    The real tottering European domino to worry about is France.

    After all, it would be impossible for the remaining solvent members of the EU to bail out France if it began to fall.

    The larger reality is that France's fiscal position is considerably worse than Spain's.

    The country's debt-to-GDP ratio was 85% at the end of 2011, while Spain's was only 66%. What's more, France's public spending is 56% of GDP, according to the Heritage Foundation, compared to Spain's 45% of GDP.

    Spain's current government has also instituted a stiff austerity program, mostly comprised of cuts in public spending, which will reduce its deficit below France's by 2013.

    Meanwhile, France's austerity has so far consisted almost entirely of tax increases on the rich -not actual spending cuts.

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