One-fifth of the US currency is backed by fetid collateralized debt obligations (CDO) say Addison Wiggan and Ian Mathias in Agora Financial’s  5 Min. Forecast.  More from this story:

“Illiquid collateralized debt obligations — including mortgage-backed securities,” says our government stats watchdog John Williams, “now total in excess of 20% of the collateral backing the Federal Reserve Notes.”

“According to the Fed,” John explains, “U.S. dollar currency in circulation is estimated at $818 billion, the better portion of which circulates outside the geographic confines of the United States. While the U.S. currency has been a fiat currency for decades, the Federal Reserve Notes presently in circulation are collateralized by securities held by the Fed.

“Those securities traditionally are U.S. Treasury securities.

“Since the onset of the banking solvency crisis and the establishment of various new lending facilities by the U.S. central bank, however, an increasing portion of the U.S. Treasury securities held as collateral has been lent to troubled financial institutions in exchange for largely illiquid collateralized debt obligations.”

It’s no wonder the US is in a bear market, says Justice Litle in Taipan Daily.

“The party is revving up again now — for the bears. It wasn’t just that the market saw its biggest downward jolt in months last week. The S&P 500 also managed to fail right at its 200-day moving average… a slightly ominous sign (and a plenty loud new shorting signal).

“People get hopeful in bear markets and try to pretend reality isn’t what it is. That’s just what they do. This creates opportunity on the short side — or, barring that, opportunity to sit back and avoid the mess.

“Meanwhile, in those markets where strong bullish trends apply — which today means areas like energy, precious metals, the commodity currencies, “cleantech,” agriculturals, and so on — the real trick is a focus on not being clever, but being wise.

“Or, to put it another way, being wise often means resisting the temptation of being clever. Sticking to the facts and letting the trends play out isn’t always the cleverest or most fashionable thing; but, more often than not, it’s the most profitable thing.

There are few pretty clear market trends that Taipan Daily has identified to help investors home in on profit opportunities, despite the bearish signals from Wall Street.

The first is that emerging markets will continue to grow by leaps and bounds, and will offer amazing long-run opportunity pretty much regardless of what happens the West.

Read on here to learn about the other three trends identified by Taipan Daily.