Agora Financial’s Rude Awakening

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Siem Reap, Cambodia

· The “New Nukes” that “No Nuke” rockers are cheering about,
· Tapping profits in the “most critical market story of the decade,”
· Why you should be familiar with #90 on the periodic table and more…

Joel Bowman, reporting from Siem Reap, Cambodia…

“Take you for ride, sir,” the tuk-tuk drivers here in Cambodia are fond of saying, before launching, unprovoked, into a warped kind of bartering soliloquy. “Not $20…not $15…for you, my friend, only $5!”

Nevermind that you only wanted to go around the corner, or that the fare is only worth $1, or that you didn’t even want a tuk-tuk in the first place; to the driver, $5 is a fair price to offer…but only because it’s not $20.

If you’re looking to be taken for a ride, Rude reader, Cambodian tuk-tuk drivers are probably your best bet. Well, either them or American financial institutions. Yesterday’s market action mirrors sadly the deluded tuk-tuk logic we find here in Southeast Asia, only on a much, much grander scale.

Take, for instance, America’s largest bank by deposits, Bank of America. Their bartering process might sound something like this:

“Our recent acquisitions include such portfolio grenades as Merrill Lynch and Countrywide Financial, for which we shelled out about $50 billion in total. We also managed to lose $1.79 billion in Q4, 2008 (excluding a $15.3 billion deficit at Merrill Lynch.) Our share price has dropped about 70% since October. And, as if that wasn’t enough to make us a sparkling buy, we also pay a monthly dividend of, wait for it, one shiny penny per share!

“So how ’bout it? Can we take you for a ride, sir?”

Strangely enough, a good number of people jumped right on board. BofA shares rose 14% yesterday. The story was similar for Citigroup (up 18.6%) and Wells Fargo & Co. (up more than 30%), among others.

So, why the rush to dive into bad banks? The answer, it seems, is the creation of another bad bank; the biggest, baddest bad bank the world has ever seen.

“New Treasury Secretary Timothy F. Geithner is exploring the creation of a government-funded “bad bank” to buy up mortgage-backed securities and other troubled assets from banks in hopes of boosting their capital levels so they can begin lending again,” explains Businessweek.

The baddest bank on the block will start with $100 billion from the TARP program, then, with leverage from the Fed and the FDIC, expand to anywhere from $1 trillion to $2 trillion.

This whole scheme begs a few questions. Firstly, what happens to the banks (and individuals) that acted prudently during the lending and spending spree of the past 5 years? What get-out-of-debt-free card do they get? Second, what kind of message does rewarding the biggest loser send to the industry as a whole? And, who will foot the multi-trillion dollar bill for the creation of the world’s baddest bank?

We don’t know the answer to the first two questions, Rude reader, but the last is a given: You will foot the bill…and so will your children…and their children… The price, once the government gets around to printing its way out of the new debt, will be the further erosion of your currency and the destruction of any global faith left in it.

Fortunately for investors, the news is not all big bailouts and bad banks. In fact, a few savvy experts are cashing in right now on some of the “lesser reported” policies of the new administration. One such fellow is Patrick Cox, our resident technology expert.

While everyone was screaming “buy the banks” (or just plain screaming), Patrick was advising his readers to load up on a handful of emerging tech companies, ones likely to benefit under the new President’s science and energy policies. As we mentioned earlier in the week, one of Patrick’s recommendations leapt nearly 70% after Obama’s inauguration day, when it received the go ahead from the FDA to conduct clinical trials using their patented stem cell technology.

In an effort to make this report available to as many Rude readers as possible, our publishers have agreed to slash the sign-up fee…but only until noon today. Please give this report a good read through before you get into today’s regular column, below. This discount ends a few hours from now, and we want everyone who is interested on board.

— Patrick Cox’s Breakthrough Technology Alert —

UPDATED AGAIN For Breaking News…THIS IS YOUR LAST CHANCE TO GRAB GAINS ALREADY UNDERWAY…

Shocking, Behind-The-Scenes Inauguration Report: PROVEN CORRECT…

This Man Has Obama’s Ear on the Most Critical Market Story of the Next Decade

What He Has to Say Could Hand You Three Generations of Wealth…

The most massive wealth creation in human history is underway. To take part, you must respond by Noon Thursday, Jan. 29.

Hanging in the balance — potentially millions of dollars for your family’s next three generations.

This is your last chance to lock in three generations of wealth from companies that have already zoomed up since Inauguration Day.

Your children and grand-children can’t afford for you to miss this report…and this is the last time you’ll receive it. Read on Here

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The Ultimate Alternative Energy
by Patrick Cox

Contrary to the common misconception, we have no energy shortage. In fact, we have more energy available than we could ever use. Unfortunately, “No Nuke” rock musicians and actors have had more influence on U.S. energy policies than scientists like Petr Beckmann.

Dr. Beckmann was a Czech refugee from the Nazis, who spent much of his career in America promoting nuclear power. Until he died, Beckmann was treated as some sort of demon by the environmental movement. No longer.

Today, even green leaders are admitting the folly of rejecting this cheap, clean and safe (when compared rationally with other energy sources) technology. If there were justice, Beckmann would have statues erected in his honor.

The green turnaround on nuclear power is particularly relevant now. President-elect Obama has picked several “climate change” activists to serve as top officials. The most important is Harvard physicist John Holdren. As presidential science adviser, he could have a significant impact on energy policy. His career, in fact, has focused on climate change, next-generation nuclear energy and nuclear disarmament.

From the perspective of an investor, what does this mean? Among other things, it could rapidly accelerate the transition from the current generation of nuclear power plants to the next. I would, incidentally, never invest in a technology simply because it has political support. Ethanol, for example, had lots of it. It was never a good idea, though, and is finally being recognized as such.

Nuclear power as we know it today is obsolete. Current light water reactors use uranium-235. This fuel is not only expensive, but its byproducts create problems. They are difficult politically to handle and can be used to create nuclear weapons.

Those byproducts are, ironically, the reason we initially adopted uranium-235. America needed the materials for nuclear weapons. Power plants using uranium-235 provided them. Regulators, naturally, favored the technology despite the fact that there were superior fuels – especially thorium, element #90 on the Periodic Table.

Thorium is not only far more abundant than uranium-235, but thorium reactors do not produce waste materials useful in nuclear weapons. In fact, the wastes are far less hazardous and much cheaper to deal with. Thorium reactors are safer in general to operate, producing little radioactive threat outside their shielding. They cannot, in fact, experience a catastrophic meltdown.

This is a much bigger deal than it appears on the surface. Fuel costs, though much lower for thorium, don’t play much of a role in total nuclear power costs. In his book The Nuclear Energy Option, Bernard Cohen estimates that safety measures to counter meltdowns account for about 75% of current plant costs. As thorium plants can’t melt down, energy costs would be significantly lower.

Additionally, thorium reactors can be almost any size. Prototypes have been made small enough for military aircraft. This makes them economically viable in developing countries without the additional cost of large-scale electrical infrastructure. Thorium reactors would also be easier to sell internationally because they cannot be used to manufacture nuclear weapons. (To learn a bit more about the wonderful world of thorium energy, check out this blog.)

The shift to thorium would facilitate economic, environmental and nonproliferation causes. So why are we still building plants that burn uranium-235? This is one of the hazards of government involvement in the sciences. Once grants and regulatory attitudes that favor a technology are in place, they are huge barriers to competitors.

A free market would favor thorium over uranium anyway. Coincidentally, Obama’s administration could significantly reduce barriers to thorium energy production. I’m looking hard now at several ways to take advantage of this revolutionary development.

P.S. Obama’s science adviser John Holdren is not only a fan of fusion, but he worked on it at the Lawrence Livermore National Laboratory. I’ll have more information for my Breakthrough Technology Alert readers as the story develops.

If you aren’t a subscriber, now is the time. Get all the details on how you can get in on the most critical market story of the decade here . But hurry – you only have until noon today, January 29, to get in on the enormous creation of wealth – already underway.

Editor’s Note: Patrick Cox has lived deep inside the world of transformative technologies for over 25 years. In the 1980s, he worked in computer software development and manufacturing. By the mid-1990s, he worked as a consultant for Netscape – the company that handled 90% of all Internet browsing traffic at the time. InfoWorld and USA Today have featured Patrick’s research many times. He’s also appeared on Crossfire and Nightline . This expertise bought him to Agora Financial, where he now heads Breakthrough Technology Alert , the only place you’ll find the truly transformational technologies that offer exponential gains.

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[Rude Endnote: We’ve run a bit over time today, so we won’t go into any extended afterthoughts.

We’ll be back with more thoughts from the Rude desk tomorrow. In the meantime, if you’re interested in Patrick’s technology report, don’t wait until 12:01 today…the doors will be closed and your editor will be asleep on the other side of the world, unable to do anything about it. Beat the rush, grab it now.

Until next time…

Cheers,

Joel Bowman

The Rude Awakening
aussiejoel@the-rude-awakening.com