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A Game of Global Bailout Dominoes

Written By Brian Hicks

Posted February 13, 2010

Editor’s Note: For a more updated and in-depth analysis of the Euro bailout from Wealth Daily, click here…

What a week! Unlike the Vancouver Olympics, we didn’t have to manufacture our own snow for the weekend. We were buried in foot upon frozen foot of the blizzard of 2010 that left us with a record 46.6 inches over just five days — and more than 70 inches for the season (which, might I add, is not over yet…)

We were stuck in our homes after emptying grocer shelves of milk and toilet paper, advised we’d be ticketed if we dared trek out in our cars on the ice-covered city streets of Baltimore. 

But blizzard conditions on Wall Street didn’t stop traders from cheering news that Greece could be bailed out.

Failure to bail them out would have sparked a European contagion, crippling European financials. But thanks to European President Herman van Rompuy, that possibility has just about been ruled out. He announced this week that the EU would provide Greece with “determined and coordinated action if needed,” with details to be provided within days.

But this announcement leads many of us to wonder: Who’s next?

This could very well be the start of the global bailout domino game. Who’s next? Spain? Portugal?

Will these countries be followed by other nations of the world, pulling numbers and getting in the bailout line, just like the local deli counter?

You see, it’s not just Greece. Just about every major country in the world — including the United States — is drowning. It seems as if the economic situation has become a game of passing the “pin-pulled grenade.”

Here’s what else got Wall Street excited this week…

  • In a sign the auto industry may be on the up and up, AutoNation (NYSE: AN) put out strong Q4 results. “The worst is over,” Chairman and CEO Mike Jackson. “We have a firm bottom and the recovery is under way.”
Despite recent recalls, keep an eye on this industry. Watch Ford, especially. Goldman Sachs believes there are market shares and earnings growth potential for the company, strengthened by the Toyota Motor Company recall. 
  • Remember to keep rare earth stocks on your radar. They’re still exploding in the Pure Asset Trader portfolio.  But here’s why you need to own them now… When you think of where your iPods, cell phones, computers, and electronic motors come from — and all the batteries that keep them charged and at your convenience — think about this: China holds 97% of the materials that go into each of those products. And all China has to do is halt the export of such materials, and we’re screwed…
Electronics would disappear from the shelves; products that depend on these materials would see prices skyrocket, possibly bankrupting the very companies that depend on these sales.
But the worst part is the impact on our future — of which computers and green technologies are an intricate part.  So if China really does hold back on rare earth, we’d better have a plan on how we’re going to make up for the short supply — and fast.  And it could very easily happen by 2012…
  • A bull market is brewing in DNA vaccines, according to WD‘s Steve Christ. A third generation of new vaccines holds the kind of promise that will make early investors small fortunes — if they are patient. The sector is still very young, and the global market for these vaccines is expected to increase from $193.2 million this year to more than $2.7 billion by 2014. But again, patience is key… or you risk missing out on some explosive potential. (Steve’s full article on DNA vaccines can be found below.)

Now, if you’ll excuse me… I have to dig out two cars, my deck, and somehow find the mailbox that’s been buried in white since last Friday evening…

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

P.S. In case you missed any of the week’s top-read articles from Wealth Daily and our sister publications, you can catch up on them now:

Olympic Stocks: These Companies Want You to See Them this Winter
Wealth Daily‘s Sam Hopkins reports on six stocks to keep an eye on during the 2010 Winter Olympics.

Geothermal Energy in Iceland
: Could Magma Heat Power Your Car?
Green Chip Editor Sam Hopkins breaks down key lessons from his meeting with the head of Iceland’s National Energy Authority…

The Bakken Oil Formation: Being Wrong Never Felt So Good
Readers take a moment to reflect on how one simple error has made their Bakken investments wildly successful. In this free report from Wealth Daily, you can learn about one company that’s moving into the Bakken spotlight.

Today’s Greatest Investment – Mongolia: The Mongolian Mineral Rush is On
Wealth Daily Editor Christian DeHaemer reveals a massive profit opportunity in China with which investors can protect themselves and still profit even as the Euro crashes… and the dollar will soon follow.

DNA Vaccine Investments: This Bull Market is Just Heating Up
Editor Steve Christ takes a look at DNA vaccine investments and explains why this market is just getting started…

Raiders of the Last Mega-Boom: Why Mongolia is an Investor’s Treasure Trove
Mongolia offers extremely compelling values, strong demand, and a clear catalyst for share price appreciation. But most importantly, Mongolia is a treasure trove of the resources neighboring China needs in order to maintain its status as the world’s factory: gold, copper, coal, uranium, oil, molybdenum, tin, tungsten, fluorspar — earning it its nickname “China’s Pantry.” This new report from Wealth Daily outlines what you must know before China’s pantry is raided — and the door for this mega-boom opportunity closes.

Chinese Cleantech Companies: Made in the USA (by China): Where China’s Spending $12 Million/Hour
Energy & Capital Editor Nick Hodge discusses China’s clean energy spending, how they’re outpacing the U.S., and why they’ll soon emerge as a cleantech powerhouse.

Biotech Stocks: How to Make Your Portfolio 1,000 Times “Healthier”
Wealth Daily reports: One miniscule, all-but-ignored American bio-pharma firm owns the breakthrough that could soon render millions of deaths a thing of the past. We reveal the company creating the vaccine that will turn your $5,000 investment into an easy $500K return.