This from Laura:

Lithium is becoming the commodity of choice for investors — for good reason. Car makers are choosing lithium-ion batteries for their much-anticipated hybrid and electronic vehicles. And the $2 billion the U.S. intends to invest in that technology will help ease the way.

At car shows globally, everybody’s talking lithium…

• GM announced it would build a plant to manufacture lithium-ion (Li-ion) batteries for the Chevy Volt scheduled to debut in 2011.
• BMW plans to launch its remodeled Li-ion battery-powered 750i luxury sedan to the Japanese in 2010. This year, the company is producing 500 all-electric MINI Es, also with Li-ion batteries, for leasing in select cities.
• Toyota (NYSE:TM) hopes to launch plug-in hybrid Priuses with Li-ion batteries later this year.
• Mercedes-Benz anticipates launching its S400 Blue HYBRID with a Li-ion battery next year.
• The (NYSE:F)Ford Escape plug-in hybrid with the same power technology is slated for 2012.
• Then there’s the Tesla Roadster, Chyrsler EcoVoyager, Dodge ZEO, Jeep Renegade and the Saturn Flextreme.

Government money to the tune of $2 billion has been earmarked for hybrid technology. And with the greater demand for all these Li-ion car batteries, miners, processors and battery manufacturers stand to profit.

Read the Full Article Here: Lithium stocks on the rise

In the midst of such a marked economic downtown and weak consumer spending activity, it’s logical to expect more concessions and deeper bargains from companies. But not in this case…

Dead Wood

Having spoken to someone at the “contractor’s desk” a week earlier to place my order for some lumber, I spent a couple of hours at Lowe’s last weekend trying to buy some.

It wasn’t a small order and the employee had assured me that they would waive the delivery charge because of it. I was happy, since those little concessions can make a difference in where I shop – and I usually shop at Home Depot (NYSE: HD).

But with coupon in hand, I arrived at Lowe’s and wasn’t surprised to see how empty it was. I strolled over to the desk to find that the person I had spoken to wasn’t there that day. Regardless, she’d processed my order beforehand.

That’s when things started to go wrong…

It took about 30 minutes to get the help I needed to pick out and mix some paint, which I also needed. And when I headed back to the desk, the assistant said there was no note about the free lumber delivery.

I wasn’t happy since that was agreed upon and the charge only amounted to about 2% of the total order. Obviously, he didn’t believe me, so I asked him to throw in the delivery anyway. He said only his manager could approve that.

When the manager arrived, he said he’d knock $20 off the delivery charge. I laughed and informed him that we’re in a recession. It made no difference. Business must be going gangbusters at Lowe’s, since the store had no trouble letting me walk away without spending a dime towards what was a large order.

Home Again

Lowe’s didn’t want any money from me, but Home Depot did. In fact, I was able to buy all the same stuff and even used the store’s “bid” process to substantially lower my lumber cost. And a paint rep offered me a 20% discount on top of that, too. Sold! Plus, I felt glad to contribute my little bit to keep the wheels of commerce turning.

Next stop… Circuit City. But not for a couple of weeks. The electronics chain is going out of business, but apparently it’s in no hurry to discount its wares to vulture-like levels. Either there are lots of consumers willing to buy at higher prices, or… well, I don’t know the answer. What happened to the bargains that were supposed to be out there?

* * * * * * * * * *

If You Got The Credit, You Can Get The Money

Yesterday morning, I heard a floor trader complaining that nobody is lending money, which is why the market is tanking.

But two hours later, General Motors (NYSE: GM) said the thaw in credit markets is now visible and that funds are flowing. Every banker I talk to says there is money to lend. The only difference now is that you need good credit to play the game. Why that should be a surprise is anyone’s guess. I guess I now know the answer to the question I ask my accountant every year: “Why is everyone driving a new BMW?”

* * * * * * * * * *

Housing Still Overpriced

Turning to our old nemesis, the real estate market seems to be no different when it comes to disappointments.

Apparently, the only bargains out there are for houses that nobody wants. I just received an e-mail flyer for an auction in Miami. I know Miami pretty well and let’s just say that the city has its good areas and not-so-good areas.

I scanned the flyer and went online to see what the prices were like. Based on the opening bids alone, it was readily apparent that there was nothing good for sale on the bankruptcy steps. Sure, there was a lot for sale, but sellers are either saving the good stuff for their friends, or anything decent is still overpriced.

I admit none of this is scientific. But they’re everyday observations anyway.

* * * * * * * * * *

The Key To Knowing Which Financial Stocks To Speculate In

If you’re invested in the stock market, you know there’s a recession in stock prices in addition to the economic recession.

Even as President Obama took the oath of office yesterday, the market endured another assault on the banking sector – a situation that led to new lows, even though the general market hasn’t re-tested its recent lows.

Not a pleasant Inauguration Day – and not a good sign for the near-term. We saw some interesting dislocations last week, as the general market headed higher, while the financials sold off. It didn’t last.

At their peak, the financials accounted for almost 25% of the S&P 500’s valuation – and that was just over a year ago. Today, they make up less than 10%. Everybody wants to sell them. By the middle of next week, the major financials will have reported their quarterly earnings. Those left standing may actually be worth speculating in. The key? The ones that don’t need more money from the government. We’ll be watching.

Source: Will Someone Tell Lowe’s That We’re In A Recession?

European stocks ended higher on Friday, as buoyant pharmaceutical shares eclipsed a drop in cyclical mining and industrial sectors hit by renewed economic fears, while energy shares tumbled along with oil.

The FTSEurofirst 300 index of top European shares closed 1.1 percent higher at 862.07 points.

Although it gained 13 percent during the week, the index dropped 7 percent in November, recording a ninth month of losses in what has been a torrid 2008 for equities worldwide.

Pharma stocks made strong gains on Friday, with GlaxoSmithKline up 5.1 percent and Sanofi-Aventis up 4.5 percent. Novartis , whose CEO said the company could increase its dividend and also resume share buybacks once it has reduced its debt, gained 4.4 percent.

The sector rallied after the publication of a long-anticipated EU report on generic competition. Although Competition Commissioner Neelie Kroes said preliminary results showed competition in the pharmaceuticals industry “does not work as well as it should”, traders said the absence of specific penalties in the report brought some relief to pharma stocks.

Energy firms such as Total and BP dropped 0.7-2.6 percent as oil prices sank below $52 a barrel on signs OPEC would defer cutting production when it meets this weekend in Cairo.

Industrials were also among the biggest losers, with Siemens down 3.8 percent and Alstom down 6 percent.

Despite the market’s recovery during the week, analysts remain wary about a potential “Christmas rally” this year.

“The volatility is not about to come down immediately. The economic newsflow is just too horrible. It’s too early to call for a straight market rally at this point,” said Arthur van Slooten, strategist at Societe Generale, in Paris.

“With deflation fears, risky assets have been pricing in the worst. But it doesn’t mean that all of a sudden, from now on you have a straight way up. We know that the newsflow will be terrible, but we need at least some sort of indication that the bottom is maybe in sight,” he said.

“Next year’s first quarter will really look awful in terms of macro data and with analyst further downgrading their estimates and companies finally becoming realistic in their own guidance. That in itself could provide us with a sound basis to build from there.”

Miners took a beating on Friday, adding to recent sharp losses. Anglo American shed 2.4 percent and Xstrata dropped 3 percent.

Prices for copper, a key industrial metal, slipped as tumbling industrial production data from Japan highlighted bleak prospects for demand in an oversupplied market, while prices for aluminium also fell, hit by the rising fears about the health of the embattled auto sector.

“There is little doubt that the outlook for metals demand is grim for at least the next few quarters and prices have fallen to levels that reflect market expectations for further stock increases,” Barclays Capital said in a note.

Automakers lost ground, with Volkswagen down 5 percent, BMW off 3.4 percent and Renault down 4.8 percent.

“Going into the weekend, one can’t help but worry that we are only a heartbeat away from the next scare story,” said Chris Hossain, senior sales manager at ODL Securities.

“The markets appear to have been buoyed by the feeling that the U.S. will be bailing out the auto industry, but one has to wonder how much more the global governments can continue to support troubled industries,” he added.

Around Europe, Germany’s DAX index eked out a gain of 0.1 percent, UK’s FTSE 100 index rose 1.5 percent and France’s CAC 40 added 0.4 percent.

By Blaise Robinson
PARIS, Nov 28 (Reuters)

Oy. “The $700 billion financial bailout program,” the New York Times sums up Treasury Secretary Paulson’s speech this morning, “will not be used to buy troubled mortgage-backed assets, as originally intended. Instead, capital would be provided directly to nonbank companies, as well as banks and financial institutions, and that more would be done to prevent home foreclosures.”

Is it any wonder 83% of Americans think the U.S. is “headed in the wrong direction”?

According to a CNN poll released this week — after Obama rode to victory on the audacity of hope, mind you — a record number of respondents think I.O.U.S.A. is in trouble. CNN’s been asking this simple, ambiguous question for 34 years… last week’s was the gloomiest response yet.

A record low 16% think the U.S. is in good shape. Stewards of the study note that optimism was higher during the worst of the Carter years… and the week of the Watergate scandal.

The U.S. economy will likely contract at an annual rate of 3% this quarter and another 1.5% in the first quarter of 2009 , says a slightly more articulate Bloomberg survey. Citing a recent poll of economists, the financial publisher says this current downturn will be the worst since at least 1974.

But never fear, Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) are back, and they’re ready to save the world.

Only two days after Fannie revealed a $29 billion quarterly loss, these two government-controlled mortgage enablers — which as late as December 2007 were involved in 90% of all new home loans in the U.S. — announced, umn, an audacious mortgage rescue plan. We’ll give you a few seconds to digest the irony.

Here’s the new plan: Fannie and Freddie will modify hundreds of thousands of distressed loans. In order to qualify you must be at least 90 days late on a mortgage payment, owe at least 90% of your home’s value, live in the house with the distressed mortgage and have not filed for bankruptcy.

If you fall within this “not a total deadbeat, but still incapable of managing money” sweet spot, congrats! You’ll qualify for a free Fannie/Freddie refi. The companies aim to bring payments down to at least 38% of the monthly household income for at least five years, with interest rates as low as 3%. After five years, the rate will climb 1% annually until it meets the market rate.

Preliminary estimates suggest about half a million homeowners will be eligible. If you are one of the millions of homeowners who took out a traditional mortgage on a house you were able to afford… umm… you get… ahhh… nothing. Enjoy watching your home’s price continue to fall while you pay 6%.

The naysayers are already complaining that the plan will not reach enough of the folks who are facing foreclosure to matter. About 200,000 homeowners will fall into foreclosure by the end of the year, bringing the yearly total over a million. Plus, Fannie and Freddie only control about 20% of America’s seriously delinquent mortgages.

Investors made more sensible decisions in equity trading yesterday. Major indexes in the U.S. fell about 2% yesterday after a choppy day of trading. Energy and commodity stocks suffered the most again, as the hard assets trade is still out of favor.

Cash is still king in today’s market, specifically the U.S. dollar variety. The dollar index is a breath away from its 52-week high this morning. Clocking in at 87.3 as we write, it’s about a half a point from the high-water mark set late last month. Should the index crack 88, the dollar will be at its highest valuation since 2006.

On the other side of the trade, gold and gold stocks are still in the dumps. The spot price is down another $15 today, to $725.

And at $57 a barrel, light sweet crude resides at its lowest level in 20 months. Traders shaved another $3 off the forward futures contract yesterday, mostly in anticipation of the Energy Dept. announcing higher oil and gas inventories today.

That’s bad news, of course, if you’re an oil investor… but good news if you’ve got a daily commute. Retail gasoline prices are now down for the 17th week in a row, with a national average of $2.20 a gallon.

Enjoy it while it lasts. According to the International Energy Agency today, the world will need to cough up a $26 trillion investment in global energy infrastructure over the next 20 years just to keep the status quo.

“The IEA’s findings state,” notes Chris Mayer, picking up where Dan Amoss left off yesterday, “that without additional investment to raise production, output will decline 9.1% annually. Everyone knows that oil production is on a treadmill, on which aging fields produce less oil over time. But that decline rate was faster than previously thought. Even with investment, the annual decline rate is 6.4% per year. These are big annual declines in a market that already wobbles along a knife edge of supply and demand.

“That’s a good backdrop if you own oil shares. Demand probably will continue to taper off as we get into this recession. But supply is falling also, and it’s not as if there is a lot of unsold oil lying around. The Economist reports ‘Official oil stocks [or inventories] are well below their average of the past five years.’

“And we can’t forget that most of the world’s oil reserves are in the hands of governments who use the cash for political purposes and social spending programs. They are not making the needed investments to keep these oil fields producing at current levels.”

There’s still time to get a free DVD and companion book with your subscription to Chris’ Capital & Crisis… details here.

We’re also polishing off the final details on a special report that addresses this matter directly… stay tuned.

Russia is taking the oil correction hard. For starters, check out the slide in the country’s currency:

The ruble got a nice bump as oil soared through the stratosphere this summer, but its retreat, the global credit crisis and a crashing Russian stock market has put the ruble in the doghouse.

The MICEX, the ruble-denominated major Russian index, fell 12.6% Tuesday. The decline was so swift, regulators shut down the exchange until tomorrow. The index is down a remarkable 67% since May.

“There’s some huge news coming on the medical front,” forecasts our tech adviser Pat Cox.

“I predict that real stem cell therapies will be offered offshore within the year. Currently, there is a billion-dollar industry offering stem cell snake oil, but real lifesaving and life-extending therapies are already available in the laboratory. These therapies are relatively inexpensive to produce and will revolutionize medicine. Even the FDA will come around when wealthy early adopters begin reporting true rejuvenation results. By the end of Obama’s first term, we will see S.C. and other therapies that will radically cut the cost of treating horrendously expensive illnesses.

“Obama already announced yesterday that he plans on reversing current bans on embryonic stem cell research funding. The market has already begun to lift stem cell companies, but mostly the wrong ones. We’ll be adding to our stem cell portfolio soon, and I’ll have much more on that in my next monthly issue.”

If you’re looking to capitalize on this breakthrough technology, be sure to read Pat’s latest report, here.

“I’m wondering,” ponders a reader, “why a financial institution that accepts tax dollars in order to be able to loan money to other business does not step up to loan to the automakers. Was that not Paulson’s argument for TARP?

“I mean the banks have received $3.4 trillion-plus in tax bucks… they can’t spare a dime to help out the economy… like preserving jobs so there will be someone left to borrow from them or pay on their mortgages?

“Two-10 million more laid-off workers and untold business failures like plastic plants, steel mills, etc., can’t be good for the bankers. Banks would fail also, causing all them bucks we spent bailing them out to be a waste.”

The 5: What a mess…

“It is true,” writes another, “that the American consumer should be able to buy any automobile that he can afford, domestic or foreign. It is also true, at least the last time that I checked, that Toyota (NYSE:TM), Mercedes-Benz, Nissan (NASDAQ:NSANY), BMW and the like have no obligation to pay for the American consumer’s unemployment benefits, Social Security, Medicare and Medicaid. So I will not feel sorry for those buyers of foreign cars when there are no more funds at the national or state level to satisfy these financial promises.”

The 5: So… you recommend before buying a car one should check to see whether the maker contributes to entitlement programs? You’ve lost us already. But let’s continue…

“Ah, but you say that it makes perfect sense that Americans should buy Japanese and German autos when they are clearly more reliable and of higher quality. Wrong! If you had cared to do some minimal research on this subject, rather than mouthing long-outdated facts and uneducated opinions, you might have stumbled upon some interesting, accurate and pertinent information. J.D. Power has at least for the past five or six years pointed out in its annual Vehicle Dependability Study that though Lexus has ranked No. 1, it has consistently been followed by Buick (this last report finds Buick TIED with Lexus), Cadillac and Lincoln. So three American makes have routinely scored higher than Infinity, Toyota, Acura and Honda. As for BMW and Nissan, they have rated well below Ford (NYSE:F), Chevrolet, Mercury (NYSE:MCY) and Dodge. And as for such makes as Mercedes, Mitsubishi and Volkswagen, they were ranked well toward the very bottom of the list for most of the time.”

The 5: We’re not saying you should buy Japanese or German cars per se, but that the choice is up to the person spending the money. As a consumer, I’ve always been under the impression the J.D. Power and Associates is just a shill for American automakers. But that must also be our mouths stating another uneducated opinion.

“Do you and other automobile buyers know or even care that to know other salient facts about the industry, such as the recent imprisonment of the head of Mitsubishi for failing to initiate safety recalls of his company’s cars, as mandated by Japanese law? It amuses me to see the smug looks on the faces of drivers of such luxury makes as Infinity and Mercedes when I contemplate that my Cadillac CTS-V has higher build quality and reliability than their much-overpriced status symbols.”

The 5: If the dude broke the law, he should go to jail. We’re not quite ready to indict all foreign carmakers because of one guy. You clearly have a lot of emotion invested in your own choice of status symbol.

“I am disappointed in you for not performing the same kind of research in this area that you so highly recommend that the consumer perform before making investments in the stock and bond markets.”

The 5: Uh… we would say we’re disappointed in you for expressing such a bizarre xenophobic affinity for American cars, but we happen to agree with your point. People should make big-ticket purchases with care. But if they choose badly… isn’t that their problem? When did it become a federal issue? Let’s see, (NYSE:GM) GM’s share price has fallen to a 65-year low and banks refused to lend them any more money. If that isn’t enough evidence of a broken business model, what more do you need?

Wow,

Addison Wiggin
The 5 Min. Forecast

Source:American Optimism, Russia’s In Trouble, But Good News For Oil, Breakthrough Med Tech, And More!

Immersion develops haptic technologies that allow people to use touch to operate digital devices. Think the type of fancy touch-screen technology used by the much-hyped iPhone.

Paul says Immersion remains loaded with potential but remains still somewhat on the launchpad. But with three major set to toss the firm new business, Paul is bullish…

While Immersion has met its financial expectations, the mass adoption curve for its technology has been pushed out and has overlapped a point in time where high beta stocks have been stripped of premium valuations.

That said, we believe the underlying fundamentals remain intact and the stock is attractive here.

In case you don’t know about Immersion’s industry, the company is a market leader in the field of haptics – a technology that simplifies and enhances human interaction with everyday technology. The company holds hundreds of patents and provides products and patent licensing to some of the world’s biggest firms.

We’ve already seen the first wave of enthusiasm, as Immersion’s technology is incorporated in cutting-edge consumer electronics products like cellphones (Immersion’s patented VibTonz software is already in Nokia (NYSE: NOK), Samsung, and Motorola (NYSE: MOT) handsets) and Sony (NYSE:SNE) PlayStation video games.

However, the company’s smaller segments (mobility, gaming, and automotive) are enjoying faster growth at the moment and offer the most opportunity. And as this technology matures, it will filter into products with lower price points that have mass appeal. At that point, IMMR’s top line will have the potential to grow exponentially in line with unit shipments.

Medical Division Set To Spring Back To Life, While Other Segments Rise Rapidly

While the consumer products receive most of the attention, the bulk of Immersion’s revenue actually comes from medical training devices that help surgeons learn their craft.

That core business has slowed in the US recently, but a push to expand in Europe and Asia is likely to reaccelerate revenues from this segment later this year. And even as its Medical division has slowed, Immersion has managed to offset that through rapid growth in newer areas.

For example, strength in the Mobility (NADAQ:USMO) division saw sales shoot up by ten times during the most recent quarter and now accounts for 13% of revenues. And looking ahead to the remainder of 2008, there is plenty to be excited about…

The Buyer’s Favorite Word

Right off the bat, three major industries are set to toss more business Immersion’s way:

1. Auto: BMW (FRA:BMW) is expanding the use of iDrive into its 3-series models.
2. Telecom: Samsung and LG are shipping handsets that leverage haptics and Nokia is expected to follow later this year.
3. Gaming: 3M (NYSE:MMM) is producing casino gaming screens, which could offer upside over the second half of 2008.

That’s the business end. But what about the stock’s valuation?

In a word: Cheap.

While the concept of buying low and selling high is a mainstay of investing, every now and again, this simple concept temporarily eludes investors.

That explains why Immersion trades for less than two times its net cash. In the software industry, buying a profitable company at that price is relatively unheard of. But at a time when fear is rampant, you occasionally get the opportunity to snag a bargain.

In Immersion’s case, it boasts $4.52 in net cash per share. This is in cash equivalents that could be quickly liquidated if a majority holder were to buy the company.

This basically means that if a third party such as Sony or Apple (NASDAQ:AAPL) or Oracle (NASDAQ:ORCL) were to buy the company, it would be getting the operating business and patent portfolio for $2.30 per share (assuming a $6.82 share price). When stocks get to these levels, it becomes cheaper for a partner to acquire the firm than pay royalties for the licenses.

The Big Boys Bailed Out… But Are Now Getting Back In

Unless you took a vacation from the planet over the first three months of the year, you’ll probably know that it represented the worst start to the year for the stock market, as gridlock in the credit markets plunged financial institutions into dire straits.

That goes some way to explaining the unusual selling pressure that Immersion endured during the first quarter.

For example, Immersion’s largest holder, Goldman Sachs (NYSE: GS), all but liquidated its position over that period. Goldman sold 78% of its 3.1 million share position and if you assume that the firm sold those evenly throughout the quarter (a measured program of selling, rather than panic), it accounted for 5% of the daily volume each day. This represents a significant hurdle for a stock to overcome in a stable market, let alone a panic situation.

Since then, however, big institutions have ramped up their buying of Immersion shares. Two large shareholders have stepped up big-time, with Balyasny beefing up the size of its position by 131%, while Immersion’s largest current shareholder, Mazama, has bought 23% more stock.

This represents a strong vote of confidence from institutions that are intimate with Immersion’s story and have combined to own 15% of the shares outstanding.

Here’s The Skinny On Immersion’s Plan To Fatten Up

To sum up, Immersion has its finger on several different developing markets that have the ability to dramatically increase its growth. If one of them catches fire, investors will benefit from accelerating profit growth and multiple expansion. Additionally, Immersion remains a buyout candidate for the likes of Sony or Samsung and a precedent was set earlier this year when Nokia acquired Navteq (NYSE:NVT).

The downside scenario would be if Immersion’s share price stagnates at current levels. That could happen if increasing pressure on consumer spending delays the adoption of devices using haptics. However, the low valuation would likely still provide support for the stock and you’d merely sacrifice opportunity, which is much better than sacrificing investment capital.

Source: Immersion Is ‘Force-Feeding’ Its Way Towards Solid Growth

Take a look at the chart, and you’ll see that SBUX looks like a massive cardiac arrest…

But there’s a much bigger part of the story that, in fact, Starbucks played down. Like a good corporate lap dog, Big Media ignored this important piece of news — depriving investors of a key piece of market intelligence that could make Starbucks a good long-term play.

For us emerging-market bulls, this glossed-over aspect of the Starbucks’ closures proves once again that alternative investments in growing nations could be the best opportunity of our time.

Here’s what Starbucks and Big Media didn’t tell you…

During same time that the company plans to close stores, it will continue a very aggressive international expansion with a heavy emphasis on emerging markets.

In 2009, Starbucks expects to open about 1,000 new foreign stores. If successful, it would mark the first time that international expansion outpaced the U.S. Starbucks’ biggest foreign growth has been in Asia, the Middle East, and Latin America — with Europe holding a steady pace. So as Starbucks throttles back here in the U.S., it’s revving up growth overseas.

“The response to the Starbucks brand has been phenomenal in our international markets,” Howard Schultz, CEO of Starbucks, told Fortune in January.

That was about the same time that Starbucks entered into a partnership with Kishore Biyani, founder of the biggest publicly traded Indian retailer, to open 1,000 new outlets in India.

“When you look at that market and couple it with China, those are two places that Starbucks can continue to grow for a long time,” Schultz told Bloomberg that very same week he spoke with Fortune.

You would have to read the Starbucks Q1 2008 10-Q report to see the magnitude of the chain’s enthusiasm for international development.

You’d see that while U.S. operating income declined by 4% to $310.9 million, international operating income grew 63% to $54.1 million. This remarkable Q1 revelation set the stage for Schultz, chairman at the time, to take on the additional role of chief executive officer, effective immediately, replacing Jim Donald, who left the company.

In conjunction with Schultz’s new hands-on role, Starbuck’s announced a series of initiatives “aimed at driving shareholder value…” Among those new initiatives Starbucks said it was “accelerating expansion and increasing the profitability of Starbucks outside the U.S., including redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.”

When you read the table below, it’s obvious that most of Starbuck’s new international initiatives could take place in emerging markets such as Australia, Brazil, China, Thailand and Turkey — as well as Western Europe.

Few people have probably seen this table. But it completely substantiates Schultz’s remarks three weeks ago to the German newspaper Frankfurter Allgemeine Zeitung (FAZ): “The international business is cushioning the weakness in America at the moment,” he said.

He also told FAZ that Starbucks plans to license 150 new coffee shop locations in Germany, Britain and France in the next three years, with 120 of those in Germany.

Starbucks, he said, is aiming to raise its sales abroad by 20% per year over the next three years while annual growth of only 6% is expected in the U.S.

In its multi-pronged expansion, Starbucks opened its first store in Argentina on May 30th. Prior to the new Buenos Aires store, Starbucks had a presence in seven Latin American countries, including 18 stores in Brazil. The president of the company’s Latin American division said he expects to open four new stores in Argentina by year-end.

The company is also widening its footprint in China. This year will see 80 new locations added to its existing 300 Chinese stores.

Starbucks is now positioning itself to set up shop in Easter and Central Europe. Also in April, the company opened its first story in Bucharest, Romania. It’s a
joint venture with Marinopoulos Holding SARL. The Bucharest outlet followed on the heels of Starbucks first Moscow store.

With nearly 4500 coffeehouses in 45 countries, Starbucks is fully committed to emerging and other foreign markets. Whether or not the company pans out as a long-term investment is anyone’s guess. Still, Starbucks is following a path set down by the likes of GM, IBM and Caterpillar (CAT) where emerging markets are an alternative path to continued growth.

Source: What Starbucks Didn’t Tell You

Good day… And a Tub Thumpin’ Thursday to you! Well… You heard it! Big Ben says that everything is going to be all right! Man, do I feel better about that! Just when I was getting all nervous and out of whack because of the debt situation, the jobs situation, the war situation, the credit situation, the housing situation, and the awful state of financial institutions… Whew! Everybody back in the pool! Big Ben says the water is fine!

Whoa! (In my best John Wayne) Now, just wait a minute there partner… Haven’t we heard these words of euphoria before from Big Ben? Hmmm… Seems to me that last July, he told us that the mortgage meltdown wouldn’t filter out into the rest of the economy… And then he followed that gem up with the August all clear sign that the housing meltdown had bottomed… Now… He expects us to believe him that the economy will be strong again in the second half of this year?

Hmmmm… OK… Before I go on, I had better tell you what happened so you can catch up… I just realized I immediately went into level 4 on Big Ben…

OK, so, yesterday, Big Ben was talking to Congress about the economy… He admitted that the economy would contract (notice the mass media didn’t pick up that ditty) He also said that the there are “downside risks”…  But then he put lipstick on the pig by quickly switching to statements about how the economy would be strong in the second half of this year… Well… You know my old saying folks… You can dress up the pig… You can put lipstick on the pig… But in the end… You still have a PIG!

I want to know and I can’t understand why the lawmakers don’t ask him this stuff… But I want to know where this growth that he’s spouting off about is going to come from? Or, how about this one, triple B… Why don’t you SHARE with us what you feel the downsides risks are? Nah… You wouldn’t want to do that, because it would expose the awful job you and your Fed Heads have done! I feel like Ricky Ricardo… Hey Lucy, you got some ‘xplainin’ to do!

I could go on… But I’ve had it with this guy! He has begun to give me the same kind of rashes Big Al Greenspan gave me!

So… The currencies gyrated all over the place yesterday… First rallying on the Triple B words of a contracting economy, but then seeing the dollar rally on the “recovery” words. At the end of the day, the euro was back to rally mode, moving close to the 1.57 handle once again. Then came a report on Reuters that the Eurozone was going to voice concern at the euro’s gains at the next G-7… That sent the euro back down…

This morning… The euro saw further selling when Eurozone Retail Sales unexpectedly declined in February, thus signaling to the markets that the U.S. recession is spreading to Europe… That news was followed by a German bank announcing a $6.7 Billion write down… So… The euro has taken on some water from the weakening of the economy… But, Hey! We all knew the U.S. recession would spread to other parts of the world… What I kept thinking though was that it would not be as devastating to other parts of the world, especially the Eurozone, as it had in the past…

I know, I know, I dislike the saying, “but this time will be different”… That saying costs people trillions of dollars a few years ago… But my point here is that on of the reasons the Eurozone was created was to buffer the countries from suffering U.S. slowdowns… 80% of all Eurozone trade is among themselves… And lets face it, the exports of BMW’s, Mercedes, and other high end cars shouldn’t see that much of a shift… Rich people don’t suffer recessions!

So… We have the euro trading in the mid 1.55 handle… IT’S NOT A TREND REVERSAL! I said this the other day, but it’s worth repeating… We’ve seen these “flash in the pan” dollar rallies several times over the past 6 years of the weak dollar trend… Nothing, fundamentally, has changed… So, why would the dollar reverse the trend?

OK… Another note on Iceland this morning… Yesterday, there was an OP-ED in the Wall Street Journal titled: Iceland Isn’t Melting… Here’s a snippet…

“But fears of a meltdown in my sub arctic homeland are vastly overblown. True, the current account deficit was 16% of GDP last year, but that’s an improvement from more than 25% in 2006. And while net private-sector debt is about 120% of GDP, there is virtually no public debt in Iceland. This is largely the result of unparalleled political stability and continuity.”

That’s all nice… But it was written by an insider… A board member of the Central Bank of Iceland… I detect a note of “homerism”… But… Soothing words nonetheless, eh?

George Soros, a guy that I personally wouldn’t have over for dinner, called the current financial crisis: “the worst since the Great Depression”… He also noted that the “markets will fall more this year after a brief rebound.”

Well… I may not like the guy, but I agree with him on the second statement… Seems the markets are getting all pumped up on the Kool-Aid Big Ben is serving up… But these are just words folks… We’ll see who’s right and who’s wrong on this… His track record isn’t so good!

The Carry Trade is back on the books after spending the month of March getting unwound… This is good news for Aussie, and kiwi… And should be good news for South Africa and Iceland… But, I think the “once bitten twice shy” campers have had enough of the volatility of these two currencies and are sticking to Aussie and kiwi… So… Aussie and kiwi rallied yesterday, bucking the sell off of euro (EUR), yen (JPY), francs (CHF), and sterling (GBP)…

Remember what they taught you in 6th grade science… A star burns brightest right before it burns out… And I think this can be applied to the Carry Trade… But, we’ll have to wait-n-see, eh?

One of my fave currencies… The Norwegian krone, has held strong during this euro weakness… And this morning, Norway reported that Retail Sales jumped 5.6% in February… Seems that the recent wage increases, the largest in 5 years, spurred consumer spending… Hmmmm…

That would work here too… EXCEPT! Wages haven’t increased in the U.S. in so long, people have forgotten what that looks like! My friend, Bill Bonner, here at The Daily Reckoning had this to say about wages yesterday…

“The part of the economy in worst shape now is the consumer. He’s the one whose salary has not gone up. He’s the one whose house is being foreclosed. And he’s the one who’s got to buy gas and food.”

Here’s another note Bill made that I believe is important to note: “Again, we see the sad evolution of the U.S. of A. since the end of the ’60s. Then, fewer than five million people received food stamps. Now, nearly six times that number are living on them…after, what was supposed to be the biggest boom the world has ever seen.”

But not to worry, Bill… Big Ben, or triple B, and I like to call him, tells us that it will be alright on the night in the second half of this year… I sure hope he’s right! That would certainly make things easier for me and my family!

Currencies today: A$ .9140, kiwi .7865, C$ .9870, euro 1.5550, sterling 1.9825, Swiss .9815, ISK 75.05, rand 7.7980, krone 5.1430, SEK 6, forint 165.40, zloty 2.2410, koruna 16.07, yen 102.70, baht 31.65, sing 1.3870, HKD 7.7910, INR 40, China 7.0175, pesos 10.58, BRL 1.7250, dollar index 72.67, Oil $103.70, Silver $17.16, and Gold… $894.60

That’s it for today… I found out yesterday that I will be doing a joint presentation with my friend Addison Wiggin, at the Agora Vancouver Investment Conference in July… Addison, by the way, has done an update of his best seller, Demise of the Dollar, and it should be available soon… I was honored to write the forward for the book! You’ll need to check that out, when available! So… If you’re interested in the Vancouver Investment Conference check it out here.

Took my little buddy to get fitted for his football gear last night… I sure wish he would get a growth spurt, these other kids are really starting to get big! But he can hold his own… He has the bulldog approach like I did, when I played… So… The Cardinals score 8 runs the night after I freeze watching them scratch out 1 run! UGH! Oh well, at least we won a game! Time to hit the “send” button, as our accountant extraordinaire, Mary Owens just walked in the door… I must be running late! Hope your Thursday is Tub Thumpin’… I get knocked down, but I get up again…

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Editor’s Note: Chuck Butler is the senior vice president of EverBank World Markets. He oversees the trading desk and operations for over 12,000 individual and corporate clients, both in the United States and abroad, who look to EverBank for FDIC-insured World Currency Deposit Accounts, and Single-Currency and Index CDs .