The prevailing Wall Street wisdom – and I use that term loosely – thinks there’s a better chance that some other “boom” is going to get under way. And over $8 trillion is parked on the sidelines waiting for it.

I guess the thought is that this economic resurrection will come seemingly out of nowhere. And that will lead us out of the deepening morass we’re mired in. Right…

But we’re not the closed-minded type around here. We don’t judge, and we don’t turn down a chance for above average profits.

So in the interest of fairness, let’s look at the probability of “booms” in other sectors, in the hopes they could fuel a global economic recovery.

4 “Boom” Possibilities

• A Housing/Building Boom?

Sure, maybe in my kid’s lifetime, but not in yours or mine. Let’s face it – we’re still in the process of busting. Just look at this sobering statistic:

In “normal” real estate markets, the inventory of bank-owned foreclosed properties is usually around 160,000 or so. Last November, completed foreclosures hit 900,000. Another 72,694 were added in January. February tacked on another 121,756.

But it gets even worse. According to RealtyTrac, nearly 75% of the property in foreclosures have yet to be listed for sale. That means another 300,000 or so homes already in the foreclosure process will be added to the total.

And there’s more coming behind them… lots more. Foreclosure filings for February alone hit 207,703, up 24% from January. Sales of foreclosed homes rose 4.4% in 2008, but availability of homes for sale doubled.

All this has the effect of keeping home supply much greater than demand. Bottom-line: You can forget a housing/building boom anytime soon.

• A Consumer Spending Boom?

Spending with what? Most consumers who used their home’s equity as an ATM are finding it out of cash. And now they’re strapped with big payments they can’t afford.

With home values cut in half in some parts of the country, most couldn’t squeeze more out even if they wanted to. Some will lose their jobs and will have to give up their homes (adding to the foreclosure situation).

Another nail on the consumer spending boom coffin is that Americans are saving more than they have in over 14 years. After years of dismal savings, consumers have started to get the message of “saving for a rainy day.” Unfortunately, only because it’s raining.

• An Export Boom?

The last time this country had a trade surplus was in 1991. As Warren Buffett likes to quip, “Right now, the world owns $3 trillion more of us than we own of them.”

And that’s not going to get better anytime soon.

While imports are certainly down (see consumer spending boom), many of the industries that contribute to exports are being decimated, too. Take the recyclables industry for example: It exported $22 billion worth of recyclables in 2007, mostly to China. 2008’s numbers, while not finalized, are expected to be down 50% to 75%.

And that’s just one example. We aren’t even touching on the fact that the world’s economies are in worse shape than ours is. So you can forget about an export boom.

• A Manufacturing Boom?

Every day, we read about another company laying off workers, in response to a drop in its business. It’s not too surprising, given the slowdown in consumer spending, the virtual shutdown of automobile sales, and the lack of consumers and businesses buying “stuff.”

We can expect that to continue.

It’s very likely that unemployment percentages will reach double digits later this year nationally. In some regions it’s there already. And it’s not hard to see why. (See the last three boom reasons above.)

So where does that leave us? Well, we could talk about a health care boom, or a biotech boom or some other mini boom that might have an uplifting effect on some small area of the country or the population.

But none of them will have the desired effect. They can’t cast a wide net over the entire economy to pull the country up from the depths of the deep recession we’re stuck in. None of them are the economic panacea, if you will, that we need.

Except two…

Energy and Infrastructure – 2 More Boom Possibilities

History has repeatedly shown that cheap energy and modern, efficient infrastructure are the key building blocks of sustainable economic growth. The World Bank estimates that for every 1% increase in a country’s infrastructure equates to a 1% increase in its GDP.

And I can think of no other initiative that can match the wide-ranging boost that energy and infrastructure projects will give to an ailing economy:

• Employment: Hundreds of thousands, perhaps millions, of jobs would be created both in the United States and around the world. When people have jobs, they have income, and they’ll spend it on things like houses, cars and trucks, consumables and “toys.”

• Construction: nothing jumpstarts an economy better than huge, labor-intensive energy and infrastructure projects. Jobs, heavy and light equipment purchases, and material purchases will boost companies in those sectors, many of whom are hurting right now.

• Manufacturing: Many things will have to be made and entirely new industries will spring up to support solar, wind, geothermal and infrastructure initiatives.

I believe that this administration – similar to that of FDR’s – likes the idea. Bank balance sheets are well on their way to being stabilized enough to lend and extend credit to both individuals and businesses. Government-induced catalysts in the form of monetary stimulus and tax incentives are slowly being put into place.

They need to happen quickly though – and be large enough – to kickoff the energy and infrastructure build-out… the “EIBO Boom” as I like to call it.

It’s an acronym I’ve coined to describe what I believe will be the single best place to focus your investment dollars for the next 20 years.

I’ll be writing about those opportunities here, and speaking about them at the Investment U Conference in St. Petersburg, Florida in just a few weeks. I hope to see you there.

Source: Energy & Infrastructure: The Cure For Our Economy

Recession resistant and sure to benefit from President Obama’s energy policies, David explains why this  Sleeper Stock is the way to go.

This from David:

Sleeper Stocks… Are There Any Left?

Regular Investment U readers know I’m an old propeller head (retired engineer). As such, my focus has been on the energy, infrastructure and technology sectors.

Since the beginning of the year, I’ve been on the lookout for stocks that stand to benefit as a result of President Obama’s stimulus package, and the energy policies his administration plans to enact during his term as President.

As investors – regardless of our political persuasions – we are looking at some exciting months and years ahead and some great opportunities.

Yesterday I went searching for a “sleeper” stock. You know the type: a boring company that just sits there, making money, day after day, resistant to the recession. All while no one notices – that’s the important part.

Hard to imagine I’d have any luck finding one these days. But I did.

The “Referee” of the Telecommunications Industry

I found a little-known telecommunications company that has a unique position in the industry. It provides the neutral interface between nearly every national and regional wire-line carrier, wireless carrier, cable company, and competitive local exchange carrier (CLEC).

If that sounds too much like tech-babble, let me break it down for you.

In the United States, we refer to the entire telecommunications system as the Public Switched Telephone Network or (PSTN) for short. It includes all the telephone switches and lines, regardless of which system or whether its wireless or wire-line based.

Nearly all voice, data and broadband signals travel over the PSTN at some point in their journey. The problem arises when a telephone call or a broadband signal has to go from one carrier to a competitor. In the past, these guys didn’t treat each other’s signals very well.

As signal switching and interconnections became more complicated, carriers had to deal with network blocking, network inefficiencies and expensive tolls from competitors.

All this had the net effect of stifling competition and customers bailing to competitors.

Enter Neutral Tandem, Inc. (Nasdaq: TNDM), the creator of the largest tandem switched network in the country. It currently provides tandem-switching capabilities to over 90 wireless, CLEC’s, cable and broadband providers terminating in over 391 million phone numbers.

Neutral Tandem’s network is well, neutral. Every signal gets routed, switched and delivered to its destination as fast as possible, no matter where it came from or where it’s going.

Neutral Tandem’s lack of bias is critical to fostering the vigorous competition that has spawned the cheap telecommunications services we all take for granted. It’s virtually eliminated bickering among the major carriers, since once the signal hands off to Neutral Tandem it’s as good as delivered.

It’s no wonder that Investors Business Daily gives the stock one of its highest rankings. And in the last year, when most other stocks in the telecomm space have been hammered in half or more, Neutral Tandem is up 2.5%.

That’s better than 94% of all publicly traded companies.

And management recently guided its 2009 revenues above the consensus. How many companies have you seen do that lately? President Obama’s stimulus bill has plenty of money available for broadband network expansion, and I expect Neutral Tandem will be a direct beneficiary.

Given its position in the network, Neutral Tandem’s revenue stream is all but guaranteed… to keep on increasing, that is. Think about that the next time you pickup the phone.

Source: Neutral Tandem, Inc. (Nasdaq: TNDM): Stock of the Day

Buenos Aires, Argentina May 26, 2008

Upon my arrival at home last Friday, my wife approached me with the following question: “What is the UNASUR?” Initially, I really did not know how to respond… I already have answers to some of her questions related to domestic issues such as why she cannot spend more money, why I have my clothing all messed up, who ate something, and others … but explaining the UNASUR really left me with no immediate answers at all.

To give you a little background, last Friday twelve South American countries formally ratified the Union of South American Nations Treaty (UNASUR), a regional integrative initiative going back informally to 2004. UNASUR hopes to strengthen Latin American and Caribbean unity by working together to create solutions to persistent regional problems while at the same time respecting the sovereign rights and territorial integrity of the individual member states. UNASUR hopes to achieve these goals through the development and implementation of policies addressing a diversity of issues such as those related to politics, economics, social and cultural issues, the environment, energy, infrastructure development and more. It is hoped that through addressing these concerns, solutions will also be found for the ongoing problems related to persistent poverty, social exclusion and inequality.

The members of UNASUR are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Perú, Surinam, Uruguay and Venezuela. To give you an idea of the importance of the region constituting this union: it includes 388 million citizens with a combined GDP of $ 1.9 billion, (3.5% of the world’s GDP).

UNASUR will be headquartered in Quito, Ecuador and consist of four main bodies: the Council of Heads of State and Government, the Council of Ministers of Foreign Affairs, the Council of Delegates, and the General Secretariat. It will also create a South American Parliament, seated in the city of Cochabamba, Bolivia.

One of those most delighted by the creation of this new union was Brazilian President Lula who pointed out that: “we shall move forward with innovative projects and will fully attain the goal of financial and energetic integration, as well as that of realizing the improvement of regional infrastructure, and the creation of a social cooperation agenda.” Lula, as always, has in mind ambitious ideas where of course, Brazil takes the lead in initiatives.

In reality, the creation of UNASUR has taken many by surprise as it has happened at a moment in history when the union of so many countries seems unimaginable.

Relating to this idea, we should be mindful that this union was created at a time when many Latin American countries have reached a powerful level of macroeconomic and institutional consolidation; achieving international recognition as having gained the much desired investment grade for many of its countries.

The establishment of regional blocks is more viable now with the consolidation of the economy and institutions within these countries, coupled with a long-term vision. The regional blocks of the past have not reached significant achievements in the long run due to difficulties within their individual countries, recurrent crisis and political instability. Mercosur serves as a prime example of these kinds of problems.

In the instance of UNASUR, there is a political and ideological fragmentation among many of the signatory countries. There are countries with serious internal problems such as Bolivia. Venezuela and Argentina are plagued with internal issues as well, but to a lesser extent. There are also member state conflicts such as those between Colombia, Ecuador and Venezuela. Additionally, there are ideological divisions between several countries that make it very difficult to imagine how those countries could go forward with the successful coordination of policies.

UNASUR’s successful unification of regional forces having benefits realized by all member states will depend in part on the influential leadership of Brazil coupled with the lessening of individual differences between countries.

This brings us to the question: what benefits could UNASUR bring investors in the region? I think that there are no short-term benefits. However, if UNASUR is able to successfully establish itself, it can then contribute to the development of the regional financial market (one of its main stated goals) creating one with stronger depth and liquidity than other financial markets of the region. More importantly, UNASUR can contribute to the strengthening of the regional economies, underpinning their growth and development which will benefit the investor who will then find less risk and more profitability in their investments in the region.

The UNASUR has just been born. It will be necessary to give it time to grow and develop. We hope that the countries comprising this new group allow this to happen.

We will meet again tomorrow,

Horacio Pozzo

Editor’s Note: A new community in South America is born with a variety of diverse and complex objectives spanning cultural, social and economic realms… another aim is the social inclusion, the civic participation, the strengthening of democracy for all… Horacio’s wife is asking questions and Horacio finds he does not know how to respond. If you want to know, keep on reading… Enjoy, and send your comments to the editor here: paola@latinforme.com