There, I said it. If the markets were unregulated, AMD would have never had a chance.

That’s because Intel is big and powerful. If markets had been unregulated, Intel would be a monopoly (according to AMD, Intel has monopolistic tendencies). That means AMD would have never had a chance to compete.

The only real way to prevent a monopoly is through government intervention. After all, it took government intervention to break up U.S. Steel, Standard Oil, and even AT&T.

So you see, the right kind of government intervention in the markets isn’t that bad of a thing. Really, it’s good. Yet so many people don’t see the need for regulation. Maybe that’s because they’ve never been in an unregulated market.

Of course, there are government interventions that are totally backwards. Like the Plunge Protection Team (PPT), which is a government ‘working group’ that helps ‘stabilize’ markets during crashes. In other words, they buy up the futures market to give the appearance that a big buyer is snatching up shares during a market crash.

Pretty dirty if you ask me. Plus, it destroys the mechanics of a free market. That’s not to say that all intervention is bad.

It was intervention that forced public companies to standardize their reporting practices. It was intervention that saw the need for making insider trading illegal. And it was intervention that told banks that they had to alert you anytime your interest rate changed on your credit card.

You can’t deny that these things are all good. They all try to level the playing field between powerful corporations and the consumer. Yet many economists and market players believe that all government intervention is akin to being punched in the face.

Case in point – my interview with Peter Schiff. The guy is smart. In his opinion, any government intervention in the markets is a bad thing. He goes on to say that government intervention helped cause the mortgage mess we are in (through fixed interest rates and expanding money supply).

Now, I won’t argue the interest rate or money supply points. Both are good points. But the truth is we got into this mortgage mess because the financial industry has been slowly deregulated for the past 30 years.

The Gramm-Leach-Biley Act (which your Monday editor, Rick Pendergraft talked about) was the final nail in the coffin. It freed banks to consolidate with insurance and securities companies. And it gave Citigroup and other banks the perfect incentive to begin packaging mortgages into CDO’s and then sell them through their financial services arm.

Alan Greenspan – much like Peter Schiff – didn’t believe in regulation either. So he turned a blind eye when banks – who were supposed to be conservative – started issuing risky no-documentation, zero-down payment, subprime, and even interest-only loans.

That brings up a little bit of irony on Mr. Greenspan’s part. Alan essentially screwed the consumer by refusing to intervene and tell banks to stop being idiots and to stop loaning money to people who might not even have a job. After all, he was anti-interventionist!

Yet, it was his very intervention – of putting interest rates UNDER the level of inflation – that helped balloon the housing market into a huge bubble.

What was Alan doing while the bubble was inflating? He was wondering about the ‘conundrum’ of low long-term interest rates during an expanding global economy. In other words, he wasn’t paying attention.

We all know where that led the industry. Hundreds of billions in losses, thousands of job cuts, and a flagging economy. Had Alan gotten off his ass and taken his nose out of his ideological beliefs, maybe he would have been able to regulate better what was going on in the mortgage industry. Maybe then, he would have thought to himself how crazy the financial industry was being and how it would lead to HUGE trouble later on.

And it couldn’t have come at a better time. You see, Intel’s biggest competitor is AMD. But AMD is bleeding money and can’t give Intel any real competition. Result? Intel dominates.

Before we declare Intel the winner of the war, graphic chipmaker Nvidia has something to say in the matter. They have the technology to go up against the big boys. Over the past few months, Nvidia’s CEO has even talked about how they have better technology than Intel!

People speculated what it all meant. Now we know – Nvidia is putting out a new CPU that combines a CPU with graphics processing power. In other words, anyone buying this chip wouldn’t need to buy a separate graphics card for their computer.

This is technology that Intel won’t have available until next year, and AMD has been struggling to release their first version for over a year now. It’s funny that a company that wasn’t even a competitor came out with a comparable product first.

These chips could be used inside laptops, miniature computers, future iPhones, and other products.

With AMD losing power in the CPU market, it seems that Nvidia could pick up their market share. And if their product is better than Intel’s future offering, then Nvidia could make plenty of money in the years ahead.

Source: Nvidia is No Slacker

Stock options are the single best speculative vehicle ever created. With options, you can speculate with limited risk and unlimited reward. It’s the best of both worlds.

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But most people lose money trading options. And, the only explanation for that is most people do stupid things with option contracts.

Your job is to take advantage of that stupidity. And you can get rich off of it.

Please understand, I’m not trying to be harsh. And I’m using the term “stupid” in the kindest of ways. But I’ve seen people lose fortunes at the blackjack tables in Vegas, and those same people do the exact same darn thing trading options.

There is, however, a huge difference between gambling and speculating.

You will ALWAYS lose money gambling. But, if you do it right, you can EARN a fortune speculating.

There are two secrets to a successful speculation…

No. 1 Only speculate when the odds are always in your favor, and

No. 2 never go “all in.”

Today, we’ll explore secret No. 1 – only speculate when the odds are in your favor… This rules out anything that goes on in Vegas and limits your activity to the stock market, various horse races, and friendly poker games.

The odds are only in your favor when you bet against the trend. And it’s the most gut-wrenching bet you’ll ever have to make.

Understand, in a bull market everyone expects stocks to go up. In a bear market, everyone expects stocks to go down. Option prices reflect those facts. If you bet with the trend, then you pay premium prices for option contracts. While you may win once in a while, the payoff is relatively small. However, if you bet against the trend, you’ll typically be buying inexpensive options. While the odds of success are limited, the payoff more than justifies the risk.

Think of it this way… Everybody expects Tiger Woods to win every golf match in which he competes. The odds of a Tiger Woods victory are so high the bookies have to offer incentives for people to bet on other players. Bets on Tiger often go off at 2 to 1 (win $2 for every $1 bet), while bets on Stewart Cink, Phil Mickelson, and the rest of the field often pay 20 to 1 (win $20 for every $1 bet) or more. Tiger is good, but he’s not 10 times better than the A-list pros.

As hard as it is to bet against Tiger, it’s the smart bet to make. The odds are in your favor, and you’ll be well paid if you’re right.

It’s stupid to pay up to buy calls in a bull market and pay up to buy put options in a bear market. It’s also unwise to bet on Tiger Woods to win every week. You may win on that bet every now and then. But the reward is not commensurate to the risk.

The smart bet is to buy options that go against the trend. They’re cheap and they pay off handsomely if you’re right.

For example, back in January I told S&A Short Report subscribers to buy calls on a housing stock. It was the most ridiculous idea anyone could consider – but the odds were in our favor. We made 150% on that trade.

We also bought call options on one of the worst performing banking stocks. I didn’t like the long-term outlook of the shares, but the odds favored a bounce in the short term and the options were cheaply priced.

We made over 150% on that trade, too.

Last week, I bought calls in the semiconductor sector. Everyone seemed to be betting on bad news out of Intel when the company announced earnings on Tuesday. Put options looked expensive and call options looked cheap.

So, I told subscribers to buy call options and we doubled our money overnight.

I’m looking at the exact same setup with another recommendation I plan to make this week in the S&A Short Report.

The bottom line is, you should only buy call options when everyone else is looking to buy puts… and buy puts when everyone else is looking to buy calls. It’s a simple strategy, but it’s the easiest way to profit during turbulent markets.

On Thursday, we’ll look at the stupidity of going “all in” on any individual trade.

Best regards and good trading,

Jeff Clark

At midday in New York, the blue-chip Dow Jones Industrial Average Index was down 25.57 points (-0.21%), to trade at 12,276.49. The tech-laden Nasdaq Composite Index dropped 6.65 points (-0.29%), to reach 2,269.17. And the broader Standard & Poor’s 500 Index decreased 3.31 points (-0.25%), to hit 1,325.01.

The basic materials sector (up 0.87%) and the conglomerates sector (up 0.61%) posted the biggest gains, while the capital goods sector (down 0.42%) and the technology sector (down 0.49%) posted the largest declines.

“The market is digesting the whole banking and financial issues, but the market has still to digest the recession story and how much of a damage to earnings we’ll get,” Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank AG (DB), told MarketWatch.

Tech shares such as Dow-component International Business Machines Corp. (IBM) and Cisco Systems Inc. (CSCO) were down. Intel Corp.’s (INTC) earnings release is slated for after the market the closes this evening.

Oil futures traded near $114 a barrel, boosting energy stocks such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).

In overseas markets early today, Japan’s Nikkei 225 Index gained 0.6% with an increase of 73.07 points to close at 12,990.58. Hong Kong’s blue-chip Hang Seng Index inched up 0.4% with a 90.13-point gain, to close at 23,901.33.

European bourses were up, with the Paris-based CAC40, London’s FTSE 100, Madrid’s IBEX 35 and the Frankfurt-based DAX all posting slight gains.

At midday, the dollar had gained ground against the yen (up 0.486%) and the pound sterling (up 0.540%), but lost ground against the euro (down 0.051%).