The 64-year-old Mack will remain as Morgan’s Chairman when Gorman, 51, takes over the CEO post on January 1, the company said.

Mack came under criticism as he scaled back Morgan’s risk profile even as rivals like Goldman Sachs Group Inc. (NYSE: GS) regained momentum as the worst economic downturn since World War II began to wane, according to the Associated Press.

“Gorman has really earned his stripes,” Anton Schutz, president of Mendon Capital Advisors Corp., which owns Morgan Stanley shares, toldReuters. “He did a great job at Merrill, he’s doing a good job at Morgan Stanley, and the timing for a change seems to be good, because we’ve made it through the worst of the crisis.”

Before joining Morgan in 2006, Gorman had held a series of positions atMerrill Lynch & Co. Inc., including leading its global private client business from 2001 to 2005.

Morgan received $25 billion in federal funds under the Troubled Asset Relief Program (TARP) last year, and has since repaid the entire amount to the U.S. government.

Source: Morgan Stanley CEO Steps Down, Will Remain As Chairman

The big question preoccupying the talkers at CNBC is whether the post-March upturn is the beginning of a new bull market or only a pause in a bear market that will last for years. Don’t obsess over figuring out the answer. Markets are always perverse and unpredictable. Instead of trying to time your next buys and sells, think about what is going to happen over the next decade and how you will cope with it. You should be thinking about the purchasing value of the dollar.

Dremen, like your Notes editors, believes we are in for a bout of “wild inflation” – something along the lines of what we saw from 1979 to 1982. (For those of you too young to remember, this period saw the CPI rise 13% a year and long-dated US Treasurys yield as much as 15%.) Why this dire outlook? This, again, from Dremen:

Simply because our Treasury and its counterparts in other countries are printing money around the clock. They are also printing bonds, and with the same objective: reviving stagnant economies. The Keynesian belief that large fiscal stimulus is crucial to ending an economic downturn is prevalent among policymakers worldwide. No democratic government could stay in power these days if it didn’t undertake countermeasures against unemployment, the possibility of deflation and the worst financial crisis since the 1930s. It is inevitable that all this stimulus will be followed at some point by a period of rapidly rising prices.Central banks, including our not-so-omniscient Federal Reserve, will again fail to take the punch bowl away from the party soon enough, keeping stimulative polices going far past the point when unemployment has turned a corner and the financial debacle is behind us. Treasury Secretary Geithner and Fed boss Bernanke are trapped by politics and events. They make pronouncements downplaying the inflation threat, but inflation will hit like a tsunami within three years, maybe sooner..

So what can you do about this threat to your savings? First, sell long bonds. When inflation hits long-bond prices are going to plummet as yields skyrocket. Remember, bond market crashes can be as bad as stock market crashes.

Dremen also recommends repositioning your portfolio with heavier weightings in oil, natural resources and cyclical stocks… and cutting back on utilities and consumer staples. If you believe, like we do, that a crash in stocks is coming, hold off on buying stocks until values come off their current highs – buy the dips.

The third weapon in your armory against inflation is real estate. Dremen reckons real estate will be “one of the best investments in the years ahead.” Remember Buffett’s great contrarian maxim: “Be fearful when other are greedy and greedy when others are fearful.”

Also keep in mind Steve Sjuggerud’s rule of thumb for successful investing: buy assets that are cheap, hated and on an upswing.

Companies posting solid results before the bell included AON Corp and industrial conglomerate Tyco International Ltd .

Goldman Sachs raised its recommendation on GE to “buy,” saying comments made by the chairman of a key congressional committee suggests a decreased chance of a break up of the finance arm of the diversified industrial manufacturer.

U.S. House Financial Services Committee Chairman Barney Frank in an interview with Bloomberg late on Wednesday suggested there was broadening support for regulatory reform that would not mandate the separation of GE Capital, Goldman analysts said.

GE shares rose 5.5 percent to $12.94 before the bell.

“A lot of this is a follow up of the resilience we’ve seen in the market over a couple of weeks. The clear sentiment is to be buying on any dips,” said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey.

“We get buying into the close on a consistent basis. The trend right now is higher. We have earnings improving, and that’s giving people the reason buy.”

S&P 500 futures rose 6.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 53 points, and Nasdaq 100 futures were 8.5 points higher.

Investor sentiment was also buoyed by signs that the global recession is abating following upbeat economic reports from Europe.

European stocks were up more than 1 percent after data showed July euro zone economic sentiment rose to its highest level in eight months, while German unemployment unexpectedly fell for the first time in July.

International Paper Co posted a 40 percent drop in second-quarter profit but said the worst of the economic downturn had passed, and it was seeing improvements in some markets. . IP shares rose 3.3 percent to $19 in premarket trading.

Motorola Inc shares rose 3.5 percent to $6.80 before the bell after the mobile phone maker swung to a quarterly profit.

Exxon Mobil Corp shares fell 1 percent after it reported second-quarter earnings.

The U.S. economic calendar includes the weekly report on initial jobless claims at 8:30 a.m. (1230 GMT). A Reuters survey of economists forecast claims to have risen to 570,000 from 554,000 the previous week.

Also on the calendar is a record $28 billion 7-year note auction from the U.S. Treasury, which could make investors cautious on the heels of poor demand for two government auctions this week.

NEW YORK, July 30 (Reuters)

But don’t expect that to last. A slump in consumer spending and soaring unemployment could both pose a significant threat to retailers going into the 2009 holiday season.

The U.S. unemployment rate hit 9.5% in June and could eclipse 10% by the end of the year, sending the economy into a “jobless recovery.”

In a speech to Congress on May 9, Federal Reserve Chairman Ben Bernanke cited a lack of consumer spending could serve as a constraint on hiring. This could create a paradoxical effect as employment obviously plays a key role in consumers’ spending habits.

Even for the employed, the lessons learned from the worst economic downturn since the Great Depression will resonate with consumers. That has already been evidenced by the U.S. savings rate, which has climbed above 4% for the first time in more than a decade.

In addition to taking money out of the hands of potential customers, soaring unemployment could lead to higher lending standards. As unemployment rises, so too will credit defaults and the cost of credit will increase accordingly.

In the past, consumers have counted on attractive financing promotions for the purchase of big-ticket items such as high-definition televisions and kitchen appliances. But that won’t be the case with tighter credit

“Consumers were also able to spend more because of the easy availability of credit, most notably through mortgage equity withdrawal and they responded by buying more items,” said Deloitte Strategic Advisor Richard Hyman.  “These conditions underpinned retail growth for the past 10 years but have now disappeared. However, it’s worse than that. They will clearly not return once the recession is over.”

Of course, tighter credit isn’t just a problem for consumers.

A Brick & Mortar Inventory Crunch for the Holidays?

The potential bankruptcy of commercial lender CIT Group Inc. (NYSE:CIT) could be a major tipping point for businesses that rely heavily on credit. Vendors for retail giants such as Wal-Mart Stores Inc. (NYSE:WMT) and Target Corp. (NYSE: TGT) rely on CIT for factoring – an old form of finance in which the lender pays the vendor for its accounts receivable. If the retailer fails to pay for the goods, the lender assumes the responsibility to pay the vendor.

“Right now our industry is preparing for the fall and winter season,” Kevin M. Burke, president and chief executive of the American Apparel and Footwear Association told The New York Times. “A lot of these orders are going to come to a grinding halt if there is no capital.”
A CIT bankruptcy would be a “double whammy” to stores whose suppliers have already cut the amount of merchandise they are making to better align inventory with the drop in consumer spending, said Burke. If those suppliers lose their sole source of capital, what little merchandise retailers originally ordered might never arrive.
The timing of CIT’s woes is “terrible,” Al Ferrara, a partner in retail and consumer products business of consulting firm BDO Seidman LLC said in a Reuters interview. “Retailers now are basically gearing up for the back-to-school and the fall season.”
An inventory crunch at brick & mortar retailers would give a competitive advantage to online retailers, which have more flexibility and already account for about a third of holiday retail sales.

For brick & mortar retail businesses, managing inventories during the holiday season is a delicate balancing act in which managers must walk a fine line between over- and under-ordering stock.

If retailers overstock, they will be forced to offer even steeper post-holiday discounts than they would like in a desperate bid to unload inventory. But if they don’t stock enough merchandise to meet demand they risk not only missing out on sales, but driving potential customers to online retailers, such as Amazon.com Inc. (Nasdaq: AMZN) whose warehouses are not restricted by the display racks and checkout counters found in brick & mortar stores.

This doesn’t mean brick & mortar retailers will sit idly by this holiday season as Amazon siphons off customers via the Internet. All of the nation’s biggest retail players have their own websites too, but the gap between Amazon and the No. 2 online retailer, Staples Inc. (Nasdaq:SPLS) is huge: Amazon generated $19.2 billion in online revenue in 2008, while Staples generated less than half of that in the same year: $7.7 billion.

While half of the top 10 online revenue generators came from traditional stores, notably absent were brick & mortar discount giants Wal-Mart and Target.

And even Best Buy Co. Inc. (NYSE: BBY), which displays in-store signage promoting an “expanded assortment” of products online for consumers who did not find what they were looking for in the store, came in at just No. 10 on the list.

Shopping for a Silver Lining

While a continued slump in consumer spending would benefit no one, certain retailers are better positioned than others, and could ultimately use adverse economic conditions to turn a profit.

For instance, the aforementioned Amazon.com, which is the world’s largest online retailer, could see a sizeable boost in its web traffic as consumers comb the Internet for bargains.

Companies that have a consumer-friendly economical brand, such as Wal-Mart, will also benefit.

Wal-Mart’s “Save Money, Live Better” slogan is already resonating with consumers, and The No. 1 retailer in the world has gone to great lengths to cement its reputation as the affordable choice for shoppers.

The company has set up a “Save Money, Live Better” website (complete with testimonials of what people are doing with the money they save by shopping at Wal-Mart) and a “Live Better Index,” which includes an interactive map of the United States to show how much money people have saved in each state by shopping at Wal-Mart.

The result of Wal-Mart’s efforts? Holiday sales grew 7% last year, according to the Advertising Research Foundation.

Similarly, same-store sales are consistently rising at discount houses such as Family Dollar Stores Inc. (NYSE: FDO), and Ross Stores Inc. (Nasdaq: ROST), the latter of which has the “Dress for Less” sloganright under its name at every store. On the flip side, stores like Macy’s Inc. (NYSE: M) and Saks Inc. (NYSE: SKS) have reported consistent declines in same-store sales over the past few quarters.

“Needs-driven spending will gravitate towards retailers able to tick the most important consumer boxes like price and convenience,” said Deloitte’s Hyman. “Although it will remain the engine of retail growth, wants-driven spending will slow and consumers will be much more choosy.”

Source: Retail Sector Faces Uphill Climb in 2009

Hard commodities weakened across the board, hit by global economic concerns and worries a potential clampdown on speculation in U.S. energy and commodity trading could hurt buying of the asset class.

Spot gold slipped to a low of $915.20 an ounce and was bid at $918.00 an ounce at 1414 GMT, against $923.30 an ounce late in New York on Tuesday. Meanwhile platinum was at $1,109 an ounce from $1,132, having touched a low of $1,099.

The dollar climbed broadly as growing risk aversion prompted buying of the precious metal as a safe store of value. The U.S. unit, weakness in which boosts gold’s appeal as a currency hedge, is currently the metal’s chief driver.

“In the last few weeks, the relationship between gold and the dollar has been fairly slavish,” said Stephen Briggs, an analyst at RBS Global Banking & Markets. “But gold has even been underperforming that, if you look at the euro price.”

He said seasonally weak demand in the third quarter and a tailing off in investment buying are also pressuring the metal.

Gold buying in India, the world’s largest bullion consumer, was weak as the dollar strengthened against the rupee, making the metal more expensive for local consumers.

Meanwhile gold jewellery sales in Dubai were down 30 percent in June from a year earlier, as high prices and the economic downturn hit buying.

U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange slipped $10.70 to $918.40 an ounce.

CAUTION

On the wider markets, sentiment was cautious, with European shares falling for the fifth straight session. The losses reflected a slide in Wall Street stocks to a ten-week low on Tuesday, amid fears over economic weakness.

Deutsche Bank analyst Michael Blumenroth said stock market weakness could be seen as a sign of fresh trouble to come for the economy, which may prompt further gold buying later in the year.

Industrial commodities slipped amid doubts over the outlook for the global economy, with both oil and industrial metals trending lower. The more industrial precious metals — platinum, palladium and silver — all posted losses.

News the U.S. futures market regulator, the Commodity Futures Trading Commission, was considering a clampdown on excessive speculation in commodities by restricting holdings of big players also hurt prices, dealers said.

“The CFTC announcement is definitely putting some pressure on metals, as well as on energy,” said one European precious metals trader.

The news prompted speculation that the approval of proposed U.S. platinum and palladium ETFs could be delayed until the CFTC had finished its deliberations.

“We do wonder whether the proposed U.S. listing of platinum and palladium ETFs – under consideration by the SEC at present – can possibly be approved until the CFTC’s investigations are concluded,” UBS strategist John Reade said in a note.

Palladium was at $234 against $239. Silver fell below $13 an ounce for the first time since May 5 to hit a low of $12.91. It was later at $12.95 an ounce against $13.10.

LONDON, July 8 (Reuters)

• The U.S. economic downturn may be slowing, but conditions remained weak in almost half of its regions, the Federal Reserve reported in its Beige Book business survey. “Contacts from several districts said that their expectations have improved, though they do not see a substantial increase in economic activity through the end of the year,” the central bank said in the report. But the words “stable” or “stabilize” appeared in some form more than 60 times in yesterday’s (Wednesday’s) report,according toBloomberg. Many district banks reported that homebuilding “appeared to have stabilized at very low levels,” and some regions said “manufacturing employment levels may soon stabilize.” The Fed report reflects information collected through June 1 and summarized by staffers at the Cleveland Fed bank. It is published two weeks before the next Federal Open Market Committee meeting.

• Home Depot Inc. (NYSE: HD) yesterday (Wednesday) raised its 2009 profit forecast and said economic indicators signal the worst of the U.S. housing correction has passed. The company, which has been upgrading services and products in its stores to win back market share from rival Lowe’s Co.’s Inc (NYSE: LOW), said earnings could be flat this year, rather than falling as it previously forecast.  Admitting its sales were hit hard by the housing market slump and recession, the nation’s biggest home-improvement chain said it sees better margins this year through improved efficiencies,Reuters reported.

• Total home loan applications were driven down by spiking U.S. mortgage rates last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said yesterday (Wednesday).  Borrowing costs have soared as bond yields have risen, even as the Federal Reserve has purchased hundreds of billions of dollars in bonds to keep rates low and stimulate the housing market, Reuters reported. The average 30-year fixed mortgage rate jumped 0.32 percentage points in the week ended June 5 to 5.57%. That’s nearly a full point, about 100 basis points, above the record low rate of 4.61% in March, the trade group said.

• Legislation introduced in the Senate yesterday would almost double an $8,000 tax credit for first-time homebuyers and expand the program to all borrowers, Bloomberg reported. Senator Johnny Isakson (R-Georgia) is co-sponsoring a bill that increases the tax credit to $15,000 and removes income and other restrictions on who can qualify for the credit, according to his spokesman, Sheridan Watson.  It would eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit and extend it to owner-occupied, multi-family units.  “The housing market continues to be a drag on the economy,” said John Castellani, president of the Washington-based Business Roundtable, which represents the interests of more than 100 large-company CEOs. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”

• Citigroup, Inc. (NYSE: C) yesterday (Wednesday) began a $58 billion recapitalization process that will make the U.S. government the company’s largest shareholder, MarketWatchreported. The Treasury will exchange up to $25 billion of the bank’s preferred securities for interim securities and warrants. The recapitalization would create roughly $58 billion in new common Citi shares.

• Oil prices have eclipsed $70 a barrel for the first time in seven months, and now analysts say escalating energy costs could inhibit global recovery, MarketWatchreported. “As if the U.S. consumer didn’t have enough to worry about,” said Peter Boockvar, equity strategist at Miller Tabak, referring to gas prices, which are rising to their highest levels since last fall. The U.S. government reported an unexpected decline in supplies last week. “If gasoline prices stay elevated, it will dramatically dilute the tax-cut portion of the Obama stimulus plan,” said Boockvar, adding that for every dollar the price of gasoline rises, “it’s an extra $140 billion more in consumer spending at the pump.”

• Euro Pacific Captial, Inc. President and Chief Global strategistPeter D. Schiff is considering a run for the U.S. Senate on the Republican ticket, Reuters reported, citing his Tuesday appearance on Comedy Central’s “The Daily Show.” He would challenge Connecticut Sen. Christopher Dodd. Supporters have launched schiff2010.com to encourage Schiff to run. Schiff is an occasional guest columnist for Money Morning.

Source: Investment News Briefs Thursday June 11, 2009

Joel Bowman, reporting from Taipei, Taiwan…

Everybody is busy counting…but nothing’s adding up the way they want.

The Chinese are counting on the American’s not to clip their coins; Americans are counting on the Chinese to keep accepting them. The Chinese count on the Americans to buy their widgets; Americans count on the Chinese to loan them the money to pay for them.

The Chinese ask the Americans for some numbers, “some arithmetic.” The Americans squeeze and mold, cram the equations through their models and computers, but still the numbers come out the same: with a negative sign in front of them.

But sometimes bad numbers can be good, or so the market is trying to tell us. What would once have been terrible numbers are now reason for celebration and sighs of relief. Anything under half a million, for example, is apparently a wonderful number of jobs to lose in a month. Maybe we should get some of these newly laid-off people around for a party, to join in the celebration. They must be positively stoked to be part of such a “less-bad” statistic.

“The world’s largest economy has lost 6 million jobs since the recession began in December 2007,” Bloomberg reports, “exacerbating the biggest drop in any post-World War II economic downturn.”

Hmmm…Good number or bad number?

The report continues:

“Including those that have stopped looking for work because they are discouraged by employment prospects and those working only part-time who prefer a full-time job, the jobless rate would have jumped to 16.4 percent in May, the highest level since comparable records began in 1994, from 15.8 percent the prior month.”

Good numbers or bad numbers?

Well, the markets seem to like them, whatever that means. The Dow is back to where it started the year and the S&P is actually up a few percent. Measures from Dubai to Tokyo are racing ahead (though the former collapsed almost 4% today…proving our next point.) Stock markets, by their very nature, suffer from a very severe type of multiple-personality disorder. They are the collection of millions of peoples’ very own hopes, fears and delusions…all wrapped-up neatly in a daily print. And, because of those millions of clashing opinions, markets have a tendency to overshoot themselves.

The higher this rally goes, in other words, the harder we can expect it to fall when the next jolt hits.

Markets across the Eurasia region traded mixed overnight.

European markets were mostly down, last we checked. London’s FTSE dropped over 1% shortly after the open as was down about 1.2% a few minutes ago. France’s CAC 40 was also off the pace, as was Germany’s DAX. Both were down 1.5%.

Here in Asia, Hong Kong’s Hang Seng kicked off the week with a 2.3% loss while Japan’s Nikkei 225 managed to gain 1% even. Down Under, the Aussies took the day off to celebrate the queen’s birthday. How embarrassing.

Over in the commodity pits, oil is down slightly at $67.70 per barrel while gold fell to $950 an ounce on dollar strength.

We’ll be back again tomorrow.

Source: Geithner’s Shoddy Abacus

]]> http://www.contrarianprofits.com/articles/geithner%e2%80%99s-shoddy-abacus/17626/feed 0 http://www.contrarianprofits.com/articles/as-key-global-markets-stumble-gold-and-dividend-stocks-may-keep-investors-on-course/17088 http://www.contrarianprofits.com/articles/as-key-global-markets-stumble-gold-and-dividend-stocks-may-keep-investors-on-course/17088#comments Tue, 26 May 2009 13:53:56 +0000 Jason Simpkins http://www.contrarianprofits.com/?p=17088 Is the hoped-for economic rebound merely a mirage? And if it is, how should you play it? For the past few months, optimistic analysts and investors have been scouring the global economy for so-called “green shoots” – a new financial buzzword that refers to any early indicators of a financial recovery.

Investors believe they’ve seen enough evidence that the U.S. economy may be bottoming out to ignite one of the strongest stock-market rallies in years. After closing at a 12-year low on March 9, the Standard & Poor’s 500 Index has soared 32%. The  Dow Jones Industrial Average has zoomed more than 27%, and the tech-laden Nasdaq Composite Index has rocketed 34%.

In a March 15 interview on the CBS show, “60 Minutes,” U.S. Federal…

Oil prices have recovered, climbing over $60 a barrel, the recent stock market rally has lured many investors back off the sidelines, and President Barack Obama’s clean energy agenda has breathed some life back into the browbeaten sector.

Now, solar energy stocks – some that lost more than two-thirds of their value last year – have come roaring back.

After topping $300 a share last spring, shares of First Solar Inc. (Nasdaq: FSLR) plummeted to just $85.28 a share in November. But since then the company has bounced back, soaring 125% to Friday’s close of $191.72 a share.  Shares of Trina Solar Ltd. (NYSE: TSL) hit $52 last summer before bottoming out at $5.61 in November. That stock is up more than 260% since Nov. 21.

Global economic growth is far from guaranteed at this early stage, but there’s good reason to believe that when a recovery does get underway, solar stocks will be shooting for the moon.

California’s Gold Standard

While many other solar energy companies have collapsed under the weight of the economic downturn, a small upstart out of California has managed to greatly expand its business.

That company is BrightSource Energy, which last week agreed to what the company’s Chief Executive Officer, John Woolard, called the “the largest solar deal in the world.”

Pacific Gas and Electric Co. agreed to purchase 1,310 megawatts (MW) of solar thermal power from BrightSource Energy for a sum that analysts’ believe tops $3 billion.

BrightSource had already agreed to transmit 900 MW of solar power to PG&E in a deal that analysts valued at $2 billion to $3 billion. The terms of the new deal, which expands upon the original 900MW agreement, will build on top of that figure.

BrightSource plans to build seven solar power plants in the Mojave desert of California that will use mirrors to direct sunlight onto a group of centralized water towers to create steam that will, in turn, power turbines. PG&E estimates that the amount of energy produced by the plants will be sufficient enough to power 530,000 homes.

Earlier this year, BrightSource signed a similar 1,300 MW agreement with Southern California Edison Co. – an indication that, despite economic hardship, the solar energy business is still hot.

But a lot of BrightSource’s recent activity has to do with California’s newly adopted state energy policy. In 2006, California passed a law that required electrical utilities to get 20% of their power from renewable sources by 2010.

However, on November 17, 2008, California Gov. Arnold Schwarzenegger took the state’s green energy mandate further by signing Executive Order S-14-08, which requires that utilities generate 33% of their power through renewable sources by 2020.

Indeed, the state of California has led the country in adopting renewable sources of energy, particularly solar.

Renewable energy accounts for 13.5% of the state’s energy consumption, and for the past three years, the California Energy Commission has been managing $400 million targeted for solar on new residential building construction. That includes an ambitious “Million Solar Roof” initiative that will create 3,000 megawatts of installed photovoltaic capacity by 2018.

But California is more than an energy pioneer. It’s an early indication of where U.S. energy policy is headed.

If President Barack Obama’s administration has its way, mandates similar to those issued in California will be employed across the country over the next 10 years. In fact, they already are.

Solar Shift

Obama announced Tuesday that he is making California’s standard for vehicle fuel efficiency and greenhouse gas emissions the new national standard.

Under Obama’s new proposals, vehicles would be 30% cleaner and more fuel efficient by 2016. And that’s just the beginning.

The President’s budget incorporated $646 billion in revenue from capping global-warming pollution, while allocating $150 billion to renewable energy investment over the next 10 years, making his green-funding initiative the largest such effort in U.S. history.

Among other things, Obama’s recent stimulus package provides a tax credit of up to 30% for home solar installations.

The Obama administration also advocates a policy that would require 25% of U.S. electricity demand be met by renewable energy by 2025. The President has the support of the Democrat-led Congress. U.S. Sen. Jeff Bingaman, (D – N.M.), Chair of the Senate Energy and Natural Resources Committee, is working on legislation that aims to make 20% of U.S. energy demand renewable by 2021.

While a renewable energy policy was largely neglected by the administration of George W. Bush, Obama’s effort can hardly be described as partisan. It is more representative of a shift in political ideology that arose when gas prices soared above $4 per gallon last summer.

A recent Gallup Poll showed that the majority of Americans support higher fuel efficiency standards such as those Obama announced Tuesday. In March, 80% of Americans said they favored higher fuel efficiency standards for automobiles.

Currently, just 28 states have renewable energy goals, but with the Obama administration’s effort and a shift in public opinion, it won’t be long before all 50 are enacting their alternative energy mandates.

According to a study by Allianz Global Investors, 78% of investors think green technology could be the “next great American industry,” and 97% of investors believe the development of alternative fuel sources will remain important even if oil prices remain relatively low.

And statistics bear that out. Venture capitalists invested $4.1 billion in alternative energy projects in 2008 – a 54% increase from the year prior, according to a report by PricewaterhousCoopers. What’s more, 45% of that money went to solar projects, compared to 23% in 2007.

“Alternative energy’s rise isn’t going to be smooth, but it’s going to be one of the great new growth industries,” Steven Berexa, managing director of research for RCM Informed, an Allianz subsidiary, told Kiplinger’s Personal Finance magazine.

A Global Industry

In addition to the United States, solar energy is gaining traction around the world.

After subsidizing 2,400 MW of solar projects last year, the Spanish government will subsidize an additional 500 MW this year. Japan aims to create more than 100,000 new jobs in its solar industry as part of an effort to jumpstart its flailing economy. Proposals for solar energy plants are also being considered in the Middle East and northern Africa.

Even BrightSource’s Woolard has attributed some of his company’s success to its overseas operations.

“PG&E looked hard at what we’d done,” Woolard told The San Francisco Chronicle. “They looked at the results from our plant in Israel, and that built a lot of confidence that we were meeting milestones and delivering.”

Most recently, Australia announced plans to build a solar power station that will rival BrightSource’s Southern California operation. The network is expected to produce about 1,000 MW of energy, but won’t be operational until at least 2015.

“We don’t want to be clean energy followers worldwide, we want to be clean energy leaders worldwide,” Prime Minister Kevin Rudd told the Financial Times.

The Australian government hopes renewable energy will account for 20% of the country’s power grid by 2020. Rudd said the government intends to spend about $1 billion (A$1.4 billion) of the $3.6 billion (A$4.7 billion) it has pledged to clean energy initiatives over the next decade.

Like in the United States, the Australian government hopes its alternative energy initiative will be a catalyst for private investment. John Connor, head of the Sydney-based Climate Institute, told the FT that Australia’s clean energy plan will drive an estimated $15.5 billion (A$20 billion) in private investment.

Another country with an ambitious solar agenda is China. A country with notoriously high greenhouse gas emissions, China installed about 50MW of solar capacity last year, more than double the 20 MW in 2007, Renewable Energy World reported.

Beijing plans to expand the installed capacity to 1,800 MW by 2020, as the demand for new solar modules in China could be as high as 232 MW each year from now until 2012.

China is also a good place to find promising solar companies. LDK Solar Co. Ltd. (NYSE ADR: LDK), Yingli Green Energy Holding Co. Ltd. (NYSE ADR:YGE), and JA Solar Holdings Co. Ltd. (NYSE ADR: JASO) have all been beaten down by the market, but could post a strong rebound when China’s solar initiative takes full flight.

Many analysts also like the aforementioned First Solar and Trina Solar Ltd., which stand a better shot of withstanding the recession because of their size and experience.

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald is the editor of the new Geiger Index trading service. As the whipsaw trading patterns investors have endured this year have shown, the ongoing global financial crisis has changed the investment game forever.

Uncertainty is now the norm and that new reality alone has created a whole set of new rules that will help determine who profits and who loses. Investors who ignore this “New Reality”will struggle, and will find their financial forays to be frustrating and unrewarding. But investors who embrace this change will not only survive – they will thrive. With the Geiger Index, Fitz-Gerald has already isolated these new rules and has unlocked the key to what he refers to as “Golden Age of Wealth Creation” The Geiger Index system allows Fitz-Gerald to predict the price movements of broad indexes, or of individual stocks, with a high degree of certainty. And it’s particularly well suited to the kind of market we’re all facing right now. Check out our latest report on these new rules, and on this new market environment.

Source: Is the Dark Cloud Over Solar Energy Beginning to Break?

Tuesday

Earnings Announcements: AMAT

Wednesday

Economic Reports: Retail Sales

I’ve mentioned it before, but until Americans feel confident about the future of the economy, they won’t spend money. A slowing decline could show some hope that things are bottoming out. Tied into this report, and worth noting, is the large number of clothing retailers that are reporting this week (Macy’s, Nordstrom’s, JC Penney, Abercrombie and Fitch, Kohl’s, and American Apparel), and Wal-Mart’s earnings are announced on Thursday.

Earnings Announcements: FRE

Thursday

Economic Calendar: PPI, Core PPI

It looks as if inflation has been kept under control for at least another month. Both the PPI and Core PPI readings that are announced on Thursday are expected to show only the slightest increases since last month. We know inflation will start creeping in soon; it’s just a matter of when.

Earnings Announcements: WMT

Friday

Economic Reports: CPI, Core CPI, Industrial Production, Michigan Sentiment

As mentioned above, inflation has been held in check, and the CPI and Core CPI announcements that come out on Friday are expected to show little to no change since last month.

The Industrial Production report (and Capacity Utilization) for April are expected to show more sobering numbers. The manufacturing sector is going nowhere fast. Until these readings turn positive, any economic rally will be short lived.

Finally, the preliminary Michigan Sentiment report for May is released on Friday. Expectations are for a very small drop since last month. With the market moving up over the last few months, and the Fed stating that they see and end to the economic downturn by the end of the year, I think this report will surprise to the positive side. Nothing major, just a slight improvement.

Source:  A Big Week for Retailers, Will Inflation Be Held In Check?