This Week’s Financial News: Bernanke takes to the tightrope, the carry trade’s in trouble and Christoph’s a Democrat

Posted April 5, 2008

“Now that Congress is getting involved, we should see some decisive action, a clear and easy solution to eliminate the financial collapse now knocking on our doors… and if you believe that, I’ve got these great banking shares to sell you.” — Stephanie Grimmett

by Stephanie Grimmett

Here at Today’s Financial News, we spent the first two days of this week giggling ourselves silly. And it wasn’t just because of Henry Paulson’s “solution” to the U.S. financial crisis.

Yes, I know the government circus has come to Wall Street. Hank and Ben are performing their tightrope act, and the clowns of Washington are piling out of their not-so-tiny black SUV.

But now that Congress is getting involved, we should see some decisive action, a clear and easy solution to eliminate the financial collapse now knocking on our doors… and if you believe that, I’ve got these great banking shares to sell you.

— John Browne wrote some great commentary on Henry Paulson’s plan, which, he says, effectively puts the American public on the hook for all current and future screw-ups of Wall Street speculators. U.S. hyperinflation here we come, even faster than before.

— Laura Cadden discussed the strength of the U.S. dollar with currency expert Jack Crooks and found out some worrisome things about our current situation. According to Jack, America is staring down the barrel of a Western sequel to the Asian currency crisis in 1998. And it could be just as bad. Jack explains why in this week’s Smart Trading Action Alert.

The dollar is heading toward ruin and Bernanke and Co. are doing their best to refill the liquidity swimming pool with taxpayers’ hard-earned cash. So how do you know when the worst is over? And when should you get back into the markets?

— Krista Das asked those exact questions of Money Map advisor Martin Hutchinson. He tells her three signals that Wall Street is safe again. And you may be surprised to find out that one of those signs is the firing of Ben Bernanke. Martin is serious about that. He believes Bernanke’s days are numbered, and you can find out why in this week’s Smart Investing Market Insights.

— But while Bernanke takes one step closer to his own demise this week, the kids in the TFN camp were sniggering over our April Fool’s Day joke on our boss J. Christoph Amberger.

On Tuesday, April 1, we released a very special Amberger’s Smackdown, just like I promised you last week. And how, exactly, was it special? Well, for starters, it was a SmackUp featuring “Christoph” expounding on the virtues of the Democratic party.

If you’ve ever seen one of Christoph’s Smackdowns, you know that our fearless leader enjoys nothing better than stomping all over liberal philosophy, Democratic candidates and what he calls their proto-Communist economic policy.

So unbeknownst to our boss and with the help of a little high-tech trickery, Christoph became a democrat, if only for the day. And surprisingly, he didn’t fire any of us for it, when it showed up on the TFN Web site on Tuesday.

— Speaking of proto-Communism, Mexico’s president Felipe Calderon is trying to push his country farther away from it’s remnants of nationalization. Mexico’s government-controlled oil company Pemex, which holds a monopoly on the country’s oil industry, is floundering, but will Calderon convince his people and his congress that they would make more money and have a stronger economy by following the lead of Brazil’s Petrobras?

— While oil has fallen from its peak, to the chagrin of oil companies worldwide, Dominic Frisby of Money Week thinks it could reach as high as $160 per barrel as soon as next week. And he has a pretty convincing argument to back up his claim.

So where do you put your money in this market? How do you find a company that isn’t going to suffer from the current crisis? We have two answers for you this week.

— Lynn Carpenter will show you how to predict performance using stock charts. She gives easy instruction for technical traders in her series on Stock Chart Smarts in our Investment Strategies section.

— And Andrew Snyder has discovered what he calls a Diamond in the Mud for value investors in this week’s Hot Stock Pick. Andrew explains his three criteria for finding a good value investment in today’s volatile market, and he gives you a company that has the potential to bring in nearly 60 times its current revenue in coming years.

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