Shares went up close to 30%… meaning that the former banking behemoth is no longer a penny stock. TFN Hot Stock Confidential members rode the coat tails of Citi Group’s rise to watch their position in Bank of America (NYSE:BAC) clock in at 21% gains.

Among the top-performing sectors today were energy and utilities. Especially alternative energy stocks.

Coincidence? Check out the stimulus bill, and you’ll find plenty of mention of renewable energy sources. Billions and billions of dollars are allocated to new battery technologies, solar energy, wind power… you name it.

Seems like only nuclear energy is too self-sufficient or promising to qualify for new subsidies. Not so geothermal energy. There’s a whopping $400 million… that’s $400,000,000… allocated for geothermal technologies.

Now, unless you live in Iceland, geothermal energy has not played a big role in your own backyard. The United States may generate more geothermal electricity than any other country. But the electricity produced represents less than one-half of a percent of the total U.S. output. And since the most active geothermal resources are usually found only along major tectonic plate boundaries, only four states have geothermal power plants so far:

California has 33 geothermal power plants that produce almost 90 percent of the nation’s geothermal electricity. Nevada has 14, and Hawaii and Utah each have one geothermal plant. So, there’s four states with geothermal capacities. That’s $100 million stimulus per state. There are a total of 49 geothermal power plants in the United States. That’s almost $8.2 million per plant.

Will $400 million in “government investments” double the U.S. output of geothermal energy? It just may. Come 2012 or 2016, geothermal energy may account for a whopping 1% of U.S. energy output. Money well spent, indeed.

Meanwhile, I expect government money to lift especially the smaller geothermal outfits. Companies like U.S. Geothermal Inc. (AMEX:HTM), which ended the fourth quarter in the hole $800,000. The company has a well-developed pipeline into government grants already.

Read the full article here: Geothermal Energy: This company is a stimulus magnet!

Here he distinguishes the pros, the cons and how you could profit on the “largest speculative bubble” he has ever seen.

This from Lou:

A few months ago I warned you about the bubble in U.S. Treasuries. And sure enough, it’s popping.

Treasuries have already plummeted 20% from their December peak. By my estimates, they’ve still got another 20% to go.

But regardless of how far price falls, it’ll be a pittance compared to the losses from the next bubble – one that could be $21-trillion large when the air comes rushing out…

In what, you ask?

Green energy… but first let me provide you with a brief historical and psychological perspective. Otherwise, I’m afraid you’ll be too quick to dismiss my prediction. And that could lead to disastrous results.

Speculative Bubbles Dot The Free-Market Landscape

Instances of speculative bubbles dot the free-market landscape…

• The 17th century brought us the Tulip Mania bubble, which like every bubble, was fueled by the social contagion of boom thinking. Tulips were the most-coveted flowers on the planet, different from every other flower known to horticulturists. As such, the incredible demand sent prices through the roof. The madness reached its peak during the winter of 1636-37, when tulip bulbs were changing hands ten times in a day. Soon after, however, the market crashed in spectacular fashion.
• In 1720, it was the South Sea Bubble, where massive over-speculation in Britain’s South Sea Company – which was granted a monopoly to trade in Spain’s South American colonies as part of a treaty during the War of Spanish Succession – caused financial ruin for many. (Incidentally, the bursting of this bubble led to a Bubble Act – talk about a useless and ineffective piece of legislation.)

Fast-forward a couple hundred years and we endured the Japanese asset price bubble of 1990 and, of course, the infamous dot-com bubble of 2000.

Lately, we’ve stepped it up even more. Three bubbles – the housing bubble, the commodity bubble and the U.S. Treasury bubble – have been crammed into a ridiculously short time span of less than eight years.

The Green Energy Super-Bubble

And unless our pattern of behavior suddenly changes, the ominous green energy super-bubble that’s forming will burst before the prior three have ample time to deflate.

We’ve ordained a bubble economy because favorable speculative conditions constantly exist. The ever-shrinking gap between bubbles serves as all the proof we need.

• Cash is the fuel.
• Legislation is the accelerant, providing extra incentives via tax credits or subsidies.
• And popular culture is the explosive kicker.

Together, they comprise the primary ingredients for a first-rate asset bubble.

And right now, there’s only one industry that rests squarely at the intersection of public policy, investing and popular culture – alternative energy.

That’s right. I believe “going green” will lead to lots of red for unprepared investors. As much as $21 trillion, based on former venture capitalist, Eric Janszen’s estimates. And here’s why…

1. The legislation is in place. And more is on the way. Under the Bush administration we got the ridiculous ethanol mandates. And solar and wind credits were routinely extended. Now, President Obama is making the environment and green-collar jobs the cornerstones of his economic recovery plan.

2. Money is already pouring into the sector. More than $200 billion was invested in clean energy and clean technology markets in the last two years. And yet, record amounts of cash are still waiting to be deployed. According to Bloomberg, speculators are sitting on $8.85 trillion in cash, desperate for an outlet.

3. Tough credit conditions actually encourage more speculation. Wayne Woo, director of Good Energies, reports that green start-ups will now give up to 75% ownership (up from 50%) to get their projects off the ground. Getting a bigger piece of the potential profit pie, for the same perceived level of risk, is bound to encourage more speculation.

4. Green is the new black. Forget fashionable. Going green resembles a religious movement nowadays. This alone has people ignoring economics in the name of social responsibility.

Unmistakably, the ingredients are all there.

What Will Burst This Green Energy Bubble?

The only question left is, “What will burst this green energy bubble?” Plenty of scenarios exist…

• Government spending could fail to create sustainable jobs, which would, in effect, cause green investment to grind to a halt. Or, the lack of focus toward one be-all, end-all alternative-energy solution, whether it be wind, solar, biofuel, or something else, could frustrate investors and force them to bail.
• Likewise, too many so-called green innovations still reside in the laboratory. Many will never make it to market, which is another surefire way to hand investors 100% losses and sap enthusiasm and future investment.
• In the end, the economics just don’t add up. Without tax breaks and government subsidies, not a single alternative energy will be able to compete. So no matter how popular or fashionable alternative energy becomes, if it remains economically stupid, it’s destined to fail.

No doubt, the run-up and profits will be historic. Just be forewarned that the green euphoria will ultimately be replaced with despair and massive losses.

It’s hard to gauge exactly when it will occur, however. I estimate we’ve got another two to three years before we hit the peak. That’s why, given the capital still rushing in, I don’t recommend avoiding the sector altogether.

Just be smart and buy proven (not probable) green energy companies. You don’t want to own companies that are stuck in the lab with loads of potential. Instead, pick the ones with bona fide products and loads of sales. And religiously use trailing stops. It’s the only way to make sure you don’t bail too early… or worse, too late.

Source: Green Energy: The Largest Speculative Bubble We’ve Ever Seen

The putrid haze of Beijing that has engulfed China and greater Asia is reducing the amount of sunlight that actually reaches the ground, according to a new report from the United Nations Environment Program.

In addition to being responsible for millions of deaths and blighted crop yields, these so-called Atmospheric Brown Clouds (ABCs) have dimmed China’s skies to the extent that the country’s solar initiative, and its huge solar industry, could become DOA.

As it stands now, Chinese solar stocks are on life support — depleting the portfolios of investors who got in at the top of the China IPO solar bubble of 2006-2007.

The losses have been staggering…

Solarfun Power Holdings Co. (Nasdaq:SOLF) has a 52-week range of $4.20 – $40.19 – a drop of 89.5%

Trina Solar Ltd. (NYSE:TSL) fell from 56.50 to 8.51 over the past 52 weeks – for a loss of 84.9%.

Suntech Power Holdings (NYSE:STP) saw it’s 52-week price plunge to $9.53 from $90.00 – a loss of 89.4%

And JA Solar Holdings, Co., Ltd. (Nasdaq:JASO) fell from $27.00 to 2.01 over the past 52 weeks – a loss of 92.5%.

In a conference call to analysts on Nov. 12th, JA Solar CEO Samuel Yang said “At this moment the market reaction has been panic.”

Now it appears that China’s home market for solar products is facing a very dim future as well from decades of pollution.

ABCs reflect solar radiation back to space by absorbing heat in the atmosphere.

In China, ABCs can cut sunlight on the Earth’s surface in two ways. Fossil-fuel particles such as sulphates reflect and scatter rays back into space, while black carbon in soot, absorbs sunlight before it reaches the ground.

According to the report, smog blocks 10-25% of the sunlight that should be reaching terra firma in China.

This isn’t just a thin layer of pollution blocking out the sun. In some places, it can be a mile thick. It can stretch from the Arabian Peninsula to the Yellow Sea, sometimes drifting as far east as California.

The U.N report says “In China the observed dimming trend from the 1950s to the 1990s was about 3-4 per cent per decade, with the larger trends after the 1970s.”

What does this mean for investors?

Those of you who tend to be bottom feeders should stay away from China solar stocks at any price. As we all know, when it comes to stock markets nothing is permanent. But zero is the share price we could be looking at for some these fallen IPO stars.

The higher oil rose, the more valuable their green portfolio grew. Making money in alternative energy was a fait accompli.

Well, the wheel has turned, pretty quickly in fact, so now the green contingent can blame those dastardly hedge funds for their own reversal of fortune.

The credit crunch has forced many hedge funds to get out of the oil trading business. While it’s difficult to say exactly how much oil inventory hedge funds controlled in the heydays of 2008, today their influence has waned along with tighter credit.

When we talk about oil and the laws of supply and demand, gas-guzzling SUVs, the Chinese and Arab sheiks are trotted out as the usual suspects. And of course, this is largely true.

But they don’t cause oil prices to spike overnight. That’s the job of hedge funds. Investors see oil bolt, and their knee-jerk reaction is that alternative energy is a sure thing. Next thing you know, there’s a stampede into green.

After all, the math is easy. The more expensive fossil fuels, the faster the ROI for alternative energy.

The sentiment is easy to play as well. The more volatile oil prices, the safer green becomes.

Who would’ve thought, however, that it would be a credit crunch that brings the green contingent to its knees?

With no cash to leverage, hedge funds are having extreme difficulty in oil arbitrage. In these dark, cashless days, hedge funds have only one thing to do with oil: sell, sell, sell.

Now the tight credit markets are hindering hedge funds from amassing oil inventories, removing a source of demand that has lifted prices to historic highs.

On Wednesday, light, sweet crude futures for December 2008 delivery fell $3.17, or 5.3%, to settle at $56.16 a barrel on the New York Mercantile Exchange – a far cry from betting on oil reaching $150.00

So if you’re tempted to go green, expand your due-diligence beyond mere consumption. Keep an eye on market liquidity. Once the hedge-fund crowd starts to suck it up again, you could be back in the business of green energy.

This from Investment U:

Our next President will be faced with unprecedented challenges in health care, energy, global warming, an aging infrastructure and huge “legacy” automobile businesses that are teetering on the verge of bankruptcy.

He’s also being presented with an incredible opportunity… one that, if implemented correctly, could have profoundly positive effects on the economic health of the world, just when we need it.

For years, the engine that fueled global economic growth was the spending of the American consumer. Market crashes because of the dot-coms and the housing boom have left many individuals with too much debt and not enough money. Americans are tapped out, and they’re closing their wallets.

Reinvigorating our economy rests upon jumpstarting consumer spending – and ultimately improving the financial condition of millions of Americans. It’s much easier said than done – and this new administration will have its work cut out for it.

If you’ve got an eye on how these government actions could benefit your bottom line, you should take a look at our past. You might find these newest sources of “economic fuel” and wealth creation look surprisingly familiar. The government’s solution could be just the thing our portfolio needs for a healthy return in the years to come…

The Cause of The Current U.S. Economic Slowdown

Ask most people to give you the cause of the current economic slowdown enveloping the United States and the rest of the world, and their likely answer will be the explosion of housing and the subsequent bubble in the credit markets.

But that was just the peak of the problem, not the beginning. The trouble has its roots in something that started 20 or 30 years ago.

That was when we started seeing the shift away from personal savings in America and toward the beginning of a huge consumer credit crisis.

And now, we are witnessing first-hand the effects of the increasing use of massive leverage can have on the markets, and ultimately on the American consumer. They’re broke and can no longer be the fuel that powers the world’s economic engine.

With consumer spending slowing, layoffs increasing and hiring all but stopped, the prospects for future economic growth aren’t particularly bright. Or are they? We have almost everything we need to fire up the world’s economic engine again: The ingenuity of the American people, plenty of factories, etc.

There’s only one thing missing… the fuel to get it going again. So what’s going to be the new “fuel?” History is a great teacher, and we need look no further than the Great Depression, and Franklin D. Roosevelt’s New Deal.

The New Deal was a series of programs Roosevelt employed between 1933 and 1936 with the intent to provide work for the unemployed, reform of financial and business operations, and economic recovery. Here are a couple of examples:

• The Works Progress Administration (WPA) was the largest of the New Deal agencies. It alone was responsible for providing almost eight million jobs. What did all of those people do? They built public buildings, roads, bridges and other infrastructure projects. Anyone who needed a job could easily become eligible.

• Another program, created by an act of Congress in 1933, was the Tennessee Valley Authority. The TVA, as it was known, was chartered to provide food, navigation and flood control, electrical generation, fertilizer manufacturing and general economic development for the people of the Tennessee Valley, a region hard hit by the Great Depression. And it was just what the doctor ordered: The TVA’s projects were catalysts that fueled unprecedented economic growth in the area that continued through the 1960s. Today, the TVA’s 43 power plants make it one of the largest producers of power in the country.

7 Companies Profiting From a “New” New Deal

While the slowdown we are experiencing is nowhere near as severe as the Great Depression, the solution will be the creation of similar New Deal programs in two specific areas: the infrastructure and energy sectors.

More specifically, developing energy savings, making alternative forms of energy our mainstream sources, and building the green infrastructure to support what will be our growing energy independence.

More insulation in a house’s walls, lower thermostats, fluorescent bulbs, more fuel efficient cars and commercial building energy management systems are just a few of the ways to save energy. Public transportation is another. Expect the new government to provide tax incentives for these and other programs as short-term incentives to save. Companies that stand to benefit are Owens Corning (NYSE:OC): insulation, General Electric (NYSE:GE): lighting and Johnson Controls (NYSE:JCI): energy management systems.

Clearly wind, solar geothermal and tidal energy companies stand to benefit, too. While a comprehensive list is beyond the scope of this article, companies like First Solar (Nasdaq:FSLR): solar panels, Ormat Technologies (NYSE:ORA): geothermal and Vestas Wind Systems (PINK:VWDRY): wind turbines, will do well.

As new green sources of energy begin to come on-line in a big way, the nation’s electrical grids will have to be upgraded to move the power to where it’s needed. This is a huge project, and one of the biggest winners will be ABB (NYSE:ABB): power and automation technologies.

Ironically, the same government that’s trying to find a solution to the energy problems we face has been the biggest roadblock to solving them. The trillion dollar coal and oil subsidies prolong the carbon industry’s advantage over – and are a constant roadblock for – fledgling alternative energy companies.

The new President and his administration have an opportunity to turn the recession ship around, before it runs aground. By implementing new energy and infrastructure projects, thousands of new jobs will be provided at a time when they are desperately needed, and most importantly, these projects will provide the fuel to restart the world’s economic engine.

Source: Obama’s New “Economic Fuel”… and 7 Ways to Profit

This from Investor’s Daily Edge:

It’s finally here.  The long awaited and hard fought election will end tomorrow (at least I hope we don’t see a repeat of 2000 where we don’t know who won for weeks).  Rather than make predictions about the election itself, I want to tell you how I think things will play out after the election.

First, I think the overall market will rally after the election regardless of which candidate wins.  There could be a knee-jerk reaction to the downside should Obama win, but this is part of the old belief that Democrats are bad for business and investing.  History tells a different story than the actual belief though.

The thing that will happen on Wednesday is that the uncertainty will be removed.  The uncertainty of the election has been weighing on the market for the past few months.  It’s been hard to tell, because of the credit crisis, but trust me the election has been weighing on the market as well.

So overall we will likely see the market rally over the next couple of months.  Historically the market rallies after elections, regardless of whether it is a Republican or Democrat that is elected.

Secondly, as I have expressed in recent articles, the market is extremely oversold and the sentiment is extremely bearish.  So even if this weren’t “the most important election of our life” we would likely see a year-end rally.

As far as each candidate and the sectors they will impact the greatest, the scenarios are very different in some areas and very similar in others.  Let’s look at the winning and losing sectors under both Obama and McCain.

The big winners with an Obama victory will be Biotechnology and Alternative Energy.  With Biotech, the fact that Senator Obama wants to give the healthcare system a complete overhaul will push for new technology that improves healthcare at a lower cost.  Look for incentives to flow into this sector whether it is with tax credits or grants, there will be a push for new developments from the group.  Senator Obama also supports stem-cell research and should he win, look for a boost to stocks in this arena.

Alternative Energy, particularly solar, will be a big beneficiary of an Obama administration.  On the campaign trail he has said he wants to direct $150 billion towards alternative energy and lowering our dependence on foreign oil.  As we all know, what is said on the campaign trail and what is done after the fact can be very different.  While he might not able to direct the whole $150 billion toward the sector, you can bet there will be money pushed that way, how much money is available will be determined later.

One sector that will certainly get hurt with an Obama administration is big-cap pharmaceuticals.  The same desire to overhaul the healthcare system that I mentioned as a benefit to biotech will be a hindrance to pharmaceuticals.  The reason for this is that he will likely push for lower drug prices at the consumer level.  This will limit what the drug makers can charge and limiting their revenues.

As for McCain, the obvious winners will be the Defense sector and oil and gas sectors.  While Obama believes a timeline should be set for withdrawing from Iraq, McCain doesn’t believe such a mandate should be put forth and the U.S. will likely continue to spend heavily on Defense should McCain win.

A McCain victory should also provide a boost to nuclear energy companies. He has made it clear on the campaign trail that he is in favor of finding alternative energy sources beyond oil, but where Obama prefers wind and solar energy, Senator McCain prefers nuclear energy.

One area that will likely lose should McCain win is the infrastructure sector.  Senator McCain wants to curb government spending, at least that is what he is saying on the campaign trail.

Like I said about Mr. Obama wanting to spend $150 billion on alternative energy sources, what is said on the campaign trail and what actually happens after the election are two different things.  Remember President Bush campaigned on less spending as well, but there haven’t been any cuts in spending over the last eight years.

Regardless of which candidate wins, they will be inheriting one heck of a mess.  The current economic environment is one of the worst I have seen in my lifetime, the deficit that we are facing is astronomical, and the job losses we have had over the last year have combined to make this a daunting task for the next administration.

Consumer confidence is at an all time low recently.  The best thing the new President could do for this country is lift the spirits of our citizens.  Consumers are not likely to open up their wallets until they see hope that the economy is improving.  Lifting the confidence level might get them to open their wallets a little.

Regardless of who wins tomorrow, I wish them luck.  They are going to need more after the election than they need it in the election.

Source: Winning And Losing Sectors After The Election

My primary weather experience was in a windswept place, where even calm days had an intermittent 30 mph “breeze.”

And maybe that’s why I can’t get excited about storage for wind-turbine energy. The idea that the wind might stop blowing for an extended period of time and you may need to rely on stored power, while evident to me on a daily (or at least weekly) basis out here on the East Coast, is antithetical to deep-seated instinct.

Despite my insistent, if illogical, argument against the idea, I am assured by those in the business that, yes, wind turbines do sometimes stop moving. And when they do, batteries to store and release back excess energy from earlier, more blustery, hours is a necessity, which is where NGK Insulators (NGKIF: Pink Sheets) comes in.

Alternative Energy Stocks: Sodium and sulfur

NGK, a Japanese industrial ceramics manufacturer, just began selling nontoxic sodium-sulfur batteries with 4.3 times the capacity of their highly toxic lead-acid counterparts.

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Japan Wind Development Company, which helped NDK create the batteries specifically for the wind-farm industry, is trying them out at its Rokkasho wind farm, and analysts think the batteries could generate 13 times the profit for the farm during peak hours if they work as expected.

The NAS batteries, named for the elemental symbols of their two main components (Na for sodium, S for sulfur), offer wind farmers the chance to store energy generated during non-peak hours, meaning much higher profits when they sell it at peak-hour prices.

And it’s a good thing, too. The batteries cost $2.9 million per megawatt of storage capacity. But that could be worth it if wind farms can efficiently save the power they build up at night to sell to electric companies during the day, when energy goes for a much higher price.

The NAS batteries are the most “dense” on the market, meaning they store the most amount of energy in the least amount of space. And they require uniform, high-grade ceramic that, NGK says, it, alone, has been successful in producing. In other words, they’re the most efficient batteries in the industry, and only NGK makes them.

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The Biggest Solar Energy Project Ever

Using a source officially discovered by NASA in 1978, a small California company has perfected a way to harness the “Earth’s Energy Budget.” which NASA has measured at 174 trillion kilowatts per day.

Yes, I said 174 trillion kilowatts each day. That’s enough energy to power New York City for 1,827 years.

And this tiny California solar company, recently featured on NBC’s Today Show, just figured out how to harness this energy. In less than a decade, these systems will be on nearly every home and office building in North America. Learn more…

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Alternative Energy Stocks: Trial runs

Xcel Energy (XEL: NYSE), the largest wind-power company in the U.S., is testing out NAS batteries. And the country’s largest coal-electricity producer American Electric Power Company (AEP: NYSE) just ordered 7 megawatts of storage from NGK in hopes that the batteries will smooth out its current power production. Success in these companies could mean energy storage may soon have a new leader.

NGK trades on the Tokyo Stock Exchange, and it has a pink sheet listing in the States. But I’m not willing to recommend the company just yet.

Alternative Energy Stocks: 1% is not enough

NGK is still primarily an industrial ceramics company. And its battery division, although profitable for the first time in 2007, currently makes up less than 1% of the company’s total earnings.

Estimates for the fiscal year ended March 31 put the company’s NAS battery division at a profit of 500 million yen (about $4.96 million), while the company’s total profit will probably be around 67 billion yen ($664 million). If NGK’s new batteries do catch on, the division will have to ramp up sales quite a bit before it makes a sizeable impact on the company’s bottomline.