A Lot Happened While I Was Away

Chart of the ever-lovin’ day …

This chart is just the beginning of the new report I just sent to my Red-Hot Global Small-Caps subscribers, “3 Red-Hot Picks From Vancouver.” If you’re a subscriber, look in your in-box. If you’re not a subscriber, you can change that pretty quickly and act on these three recommendations immediately: click here.

Anyway, I’m back from Vancouver. Here are some of the things that caught my eye while I was away …

First, the Guardian in the UK gives us

“25 People at the Heart of the Meltdown.” It’s a bit British-heavy, but that’s understandable for a paper published in London. But why’d they leave out Robert Rubin? Maybe I should make my own list.

Meanwhile, John Hempton at Bronte Capital believes the

Fed should literally try throwing money out of helicopters. I have to believe there are aspects to that plan that he is just not thinking through.

Now for the story that caused steam to come out of my ears in my Vancouver hotel room. Remember how the US taxpayers have bailed out Citigroup (

C: 4.06 -0.14 -3.33%) with $45 billion of our hard-earned money? Well, Citi turned around and was going to buy a $50 million corporate jet from France.

Citigroup is one of the biggest recipients of TARP funds. It received $25 billion under the original payout late last year and received another $20 billion after its stock started to sink in November. It also got the government to backstop some $306 billion in troubled assets on its books. <>So, naturally, buying a $50 million corporate jet is the only thing to do <>

Perhaps I missed it because I was running around Vancouver like a crazy man, but I didn’t see this story on CNBC. Maybe that’s because back in 2007 — almost exactly two years ago – CNBC’s

Maria Bartiromo got in some hot water for taking Citi’s corporate jet with then Citi-executive Todd Thomson.

Oh, wait, look here: CNBC prints an AP story that

Citi will not take possession of the new jet. That story ran at 8:04 pm the day the scandal broke. Yeah, hot on the trail of that one!

And it’s not that Citi suddenly developed a sense of shame.

ABC News reports that Obama administration officials called Citi execs about the jet and told them to “fix it.”

Now, don’t you go feeling sorry for the Citi execs. Even after reducing the size of their air fleet, they STILL have two jets.

In other news, the

Congressional Budget Office compared the economic downturn we’re experiencing today to the Great Depression. Does that make it official? Someone find out for me.

Now for three non-business stories that interested me and may interest you …

1) Here is some comic relief if you have a weird (gallows) sense of humor:

An Interview With The Central Banker of Zimbabwe. And if you think a trillion is a large number when applied to currency, brace yourself for “sextillion.” I assume the central banker of Zimbabwe didn’t scream that number while spitting blood and tearing his hair out in clumps, so you’ve got to admire his coolness in crisis.

2) It will surprise many leaders in the business community (but should surprise no one) that

Free Monty Python Videos on Youtube Lead to 23,000% DVD Sale Increase. Why does that work? Because no one wants to watch bad-quality YouTube videos for very long.

3) The headline says it all: Pakistani Taliban Turns Honeymoon Spot into Slaughterhouse. Such lovely people. And yes, that was sarcasm.

Check out my new gold and energy blog at MoneyAndMarkets.com

Great News for Red-Hot Global Stocks

Check out the news on Kingsgate and Sino Gold, two recent additions (albeit repeat buys) to the Red-Hot Global Small-Caps portfolio …

Kingsgate Jumps Most in 10 Years After Winning Approval for Thailand Mine Kingsgate Consolidated Ltd., owner of Thailand's biggest gold mine, rose by the most in a decade in Sydney trading after receiving final ministerial approval for the Chatree North mining lease next to its existing operation.

Sino Gold 2nd-Quarter Output From Jinfeng Mine Rises More Than Threefold Sino Gold Mining Ltd., owner of China's second-largest gold mine, said second-quarter output at the Jinfeng operation rose more than threefold as a greater volume of ore was mined.

And here's my latest interview with Phil at HoweStreet.com ...

http://tinyurl.com/6cc7qb

In Other News …

Just how much money does China have? How fast are China’s foreign assets growing? And how much is hot money?

XX Sean’s note – this post at Brad Setzer’s blog is well worth reading. The numbers on China may shock you. And the charts, well …

ECONOMY

The global economy is at the point of maximum danger

It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.

The International Monetary Fund has abdicated into schizophrenia. It has upgraded its 2008 world forecast from 3.7pc to 4.1pc growth, whilst warning of a "chance of a global recession". Plainly, the IMF cannot or will not offer any useful insights.

Its "mean-reversion" model misses the entire point of this crisis, which is that central banks have pushed debt to fatal levels by holding interest too low for a generation, and now the chickens have come home to roost. True "mean-reversion" would imply debt deflation on such a scale that would, if abrupt, threaten democracy.

FANNIE MAE-FREDDIE MAC MELTDOWN WATCH

Pimco's Gross Says Fannie, Freddie Need Treasury

Bill Gross, who manages the world's biggest bond fund, said it's not possible for government sponsored mortgage-finance companies Fannie Mae and Freddie Mac to raise capital without the Treasury Department's support.

``Let's be blunt: to the extent the Treasury suggests they'll never have to use their authority, that's a sham,'' said Gross of Pacific Investment Management Co. ``It's fallacious to suggest that the agencies could issue capital, preferred stock, without the co-participation of the Treasury. I don't think that's possible.''

Fannie, Freddie May Record More Losses on Subprime, Alt-A Debt, Ofheo Says Fannie Mae and Freddie Mac may need to record more writedowns after they expanded their purchases of non-guaranteed subprime and Alt-A mortgage securities just as other investors fled to safer investments, their regulator said

Measures to avoid the worst recession in 30 years

Ben Bernanke, Federal Reserve chairman, this week alluded to an economy facing “numerous difficulties”. In fact there are only two, but each alone is cause for genuine concern over the US economy’s prospects: first, an implosion of the financial system triggered by the teetering housing market; and, second, record prices for oil and other commodities that are largely driven by events abroad. … It is time to devise a programme to promote overall economic recovery by fighting for the economy’s future on both fronts simultaneously.

ENERGY

Goldman Sachs Group Says Energy Stocks Are a `Buy' After Shares Retreated Investors should buy energy stocks, which fell the most last week in six months, as oil prices will rebound, Goldman Sachs Group Inc. said.

OPEC Must Increase Oil Output to Lower Prices, Promote Growth, CGES Says OPEC needs to raise oil production to reduce crude prices and help global economic growth, the Centre for Global Energy Studies said.

IEA warns non-Opec oil could peak in two years

Oil production in non-Opec countries is set to peak within the next two years, leaving the world increasingly dependent on supplies from the cartel of exporting nations, according to one of the world's leading energy experts.

Fatih Birol, chief economist of the International Energy Agency (IEA), said that falling production from key regions such as the North Sea and the Gulf of Mexico would leave international oil companies such as Shell and BP increasingly sidelined at the expense of national oil companies, such as Saudi Aramco.

URANIUM

Kazakhstan Wants to Be World's Biggerst Uranium Miner in 2009, Top Canada Kazakhstan, the world's third- biggest uranium miner, plans to overtake Canada and Australia next year by producing 12,826 metric tons of the radioactive metal.

Xx Sean’s note – sure beats the other leading occupation in Kazakhstan … turd farming.

Check out my new gold and energy blog at MoneyAndMarkets.com