As the old adage says, "when the U.S. sneezes, the rest of the world catches cold". Unfortunately for the global economy, and emerging markets in particular, today, the good ole U.S. of A has come down with a case of severe pneumonia.

Driven by the ongoing U.S credit crisis and a worsening global economy, investors are charging out of emerging markets in droves. Heavy selling caused MSCI's main index of emerging equities to slide about 4.8% Wednesday to its lowest print since 6/05; far further than the 3.1% dip for its index of world stock markets.

One major force behind the drops was mounting global concern that Argentina may be set to default again, not ten years after its $95 billion 2001 collapse, the largest ever. The country's government has taken drastic steps to try to prevent another disaster and opted to nationalize its $30 billion pension plan in effort to pay down debt. Judging by the market's reaction, the move is probably just delaying the inevitable.

World economies were largely down across the board Wednesday and a number of key indicators point to tough times ahead. China has reported that September factory output reached a 6-year low while 6, that's right SIX, emerging European nations (Hungary, Turkey, Ukraine, Iceland, Serbia & Belarus) are currently in talks with the International Monetary Fund for assistance. In addition, the U.S. dollar recently hit a two-year high and continues to advance as U.S. investors bolt out of foreign stocks and into U.S. Treasury bonds.

Despite a number of signs clearly indicating that the U.S. credit crisis has spread its ugly wings globally, the future of emerging markets is still a hot topic of dispute.

On the positive side, analysts note that developing nation GDP growth isn't expected to slow much from its recent annual levels. Moreover, optimists point to a recent Merrill Lynch report that states that emerging markets are cheap from a number of standpoints including their 10 to 1 price-times-earnings ratio, or 20% discount to developed markets.

On the negative, in addition to what has been stated above, the United States and Europe are now both faced with almost imminent recession which could ultimately be the worst they've seen in nearly half a decade and lead to a full fledged global recession which would strongly impact most emerging markets. Supporting the theory that a global recession is indeed imminent over the near-term, the IMF forecast a slowdown in global growth from 3.9% in '08 to 3% next year.

Furthermore, borrowing rates for developing nations have hit a six-year high and even world-renowned consumer product brands such as Dell are reporting softening demand in emerging regions. In addition, well respected NYU professor Nouriel Roubini and other economic experts feel that the ongoing global market meltdown may even force policy makers to take measures as drastic as closing down markets for a few weeks in order to temporarily stop the bleeding. Overall, the general consensus on the negative side here is that this is just the beginning of tough times for emerging markets.

Believe it or not, the United States banks are actually five times less exposed to emerging markets than their U.K. and European counterparts, making our nation somewhat of a safe haven despite our growing debt and widespread economic problems. That being said, given the volatility of emerging markets today, I suggest playing it safe for now and paying close attention to developing markets that have historically been impacted to a lesser extent by slow downs in the U.S. and global economy's.

One such emerging economy is Peru, the largest silver producer in the world and the 3rd largest source of copper, zinc, and tin. While other Latin American nations including Argentina, Bolivia, Ecuador and Venezuela teeter on economic crisis, Peru may be a bit safer of a bet. The country is also expected to boast economic growth of 9.2% in 2008, the best in Latin America and has experienced economic expansion in each of the past 86 months. Moreover, there is no credit crisis in Peru and BAP is the country's leading financial services holding company.

One company poised to benefit from this emerging market's growth is CreditCorp Ltd. (NYSE: BAP). The stock is now trading at a discount of roughly 86% to its 52-week high of $86.91 and has been hammered over the past month along with many other emerging market stocks. I'm anxiously awaiting the upcoming quarterly report and was quite impressed with the company's second quarter results. Quarter-over-quarter earnings grew nearly 24% from $109M to $135.2M while net income approached $74M.

With the U.S. market maneuvering through troubled waters, I'll be on the lookout for opportunities elsewhere over the coming months and weeks. Since I've always loved BAP despite Jim Cramer's endorsement, which oftentimes can be the kiss of death for some stocks, but its been a bit too rich for my blood, I'll likely analyze the company a bit more closely in the future.

Labels: Argentina defualt, Creditcorp Ltd., Developing Nations, Economy, Emerging Markets, NYSE: BAP

After speaking with the CEO Eugene Chiaramonte, Jr briefly today we were able to answer a few questions shareholders have been having.

Q. Where does the company stand in regards to the bankruptcy?

A. QMNM is submitting the disclosure statement to the judge this week. Once the judge reviews it he will approve it or disapprove it and the company will have to revise the plan. The CEO Eugene said that this should take about three months before it is finalized.

Q. Is the company still mining and what are their production levels?

A. Eugene says that he should have production numbers at the end of the month and that they have been mining everyday.

Check back periodically as we will continue to update our sites as information becomes available.

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Let's face it, capitalism, the lifeblood of our economy, has long been the nemesis of successful implementation of green policies and their effectiveness in any given market. Its not that American companies don't care about the environment per se, it is just that they care more about their bottom line, competitiveness and company growth. When faced with the prospect of adhering to new greener standards, many companies either fight the new standard or acquiesce more out of regard for their reputation than efficiency or philanthropy.

But as the cost of resources increase, conservation will beget conservation for large companies that suddenly see a rising cost basis from very basic necessities such as water and gas. Quite necessarily, companies worldwide are standing at the threshold of a very different mentality about consumption, if not out of good conscience, at least out of good business.

So, when we come across a company like Legacy Holdings Inc. (OTCBB: LGYH), it is as much from environmental reverence as good business that we sink our teeth in.

Today's press release, to those of us not fully briefed on wafer chip processing, is a lot to take in. However, while an extensive knowledge of wafer chip processing might be interesting reading for some, it is not vital to see why LGYH is on the right track for growth. This morning's news is another small step for Legacy Holdings as a company but another giant leap for green business as a whole - particularly in such a fitting sector as solar energy (aka Photovoltaic).

While news of LGYH's wafer chip wet processing has been its flagship product this last year, today news focuses on another green process that deals with wafer chip production. Legacy's dry processing of wafer chips stands to meet the high demands the market is seeing for solar energy. And with the technology able to meet the needs of different sized chips, it opens a lot of doors for Legacy. CEO, Robert Matthews said this morning, ". . . industries such as manufacturers of photovoltaic's, light emitting diodes, and flat panel displays can benefit from the advanced cleaning and drying technologies."

Cliffnotes for your Due Diligence

First, let me give you the readers digest of what we have found on wafer chip processing. There is such a thing as too much information on this subject and our bleary-eyed research team can attest to it. Again, understanding this process in depth is not necessary to understanding Legacy's business but it is worth knowing for the sake of investment research.

The wafer chip, a vital element in everything from your home PC to flat screen displays to solar panels, is a pretty delicate little piece of hardware. The wet processing of this small but integral device usually involves a series of steps, which involve but are not limited to everything from cleaning the product, coating it, removing films left by prior process, re-cleaning, then re-coating, then removing debris left by prior process, etc. etc.

With wafer chip processing, the issue is not drying the substrate (removing water through evaporation) but doing this without leaving any residues. Water is a great solvent, which means it dissolves many things including the silicon wafer itself. The issue arises when you remove the water and all the very tiny impurities that were in the water get left behind. In the world of semiconductors this amounts to very small particles being left on the wafer surface resulting in a water spot. If all these particles were collected and weighed we would be talking about contamination levels in the parts per billion or parts per trillion regimes. But as small as these particles are, they still have the ability to affect device yields. The water spot itself is the remnants of nonvolatile inorganic and organic compounds that are left behind when the water disappears. One of the parameters which distinguished the leading wet station manufactures is their ability to dry the wafers without leaving water spots (process yield), doing this in the shortest period of time (wafer through put) and using the least expensive process (cost of ownership).

The ABC's of Wafer Chip Processing

Both wet and dry processes, which can be thought of as extra-complicated enameling process, are not only lengthy and time-consuming but use an exorbitant amount of water, chemicals, electricity and manpower. Until now, this was a necessary evil in production of a piece of equipment that has more uses than super glue. (While this last fact has yet to be proven, after what we've read, it seems about right.)

In fact, LGYH's wet processing takes about 1/20th the amount of water as typical wet processing (competition uses 200 gallons of water; Legacy uses 10 gallons of water) which involves only 1 rinse step and takes about 1/3rd the amount of time to complete (competition needs 2 rinse cycles with each cycle a 10 minute rinse @ 10 gallons per minute flow rate plus a 10 minute dry cycle; Legacy's system needs only a 10 minute combined rinse and dry time).

Also, through the LGYH system, the drying process for solar panels is reduced to a mere 2 minutes, down from the 5-15 minute industry standard. With these processes, which according to Legacy have been virtually error free, each solar panel is processed with 1/8 the amount of water, in about 1/3 the amount of time. This savings comes replete with less energy expended, saved manpower and far less toxic chemicals. If this is not conservation in its most capitalistic hybrid form, I don't know what is.

For a better understanding of how this process works or what this sector looks like, check out a few resources we have compiled for you.

It's All About Who You Know. . .

However, what appeals to us most about the potential of Legacy Holdings is not necessarily how it stands to change the wasteful way that wafer chips are manufactured, or how many kinds of chips are currently on the market or being developed that can benefit for this streamlined process or even the amount of money this new and improved wafer chip system saves the clients of LGYH. No. What we like most about LGYH comes down to a canned adage that makes or breaks a business. . . It's all about who you know.

From what I have read, Legacy Holdings Inc. CEO Robert Matthews not only knows what this market needs, he knows the people that need it - well. After working for Intel, Steag, SubMicron and Texas Instruments for 20 years collectively, Mr. Matthews seems to have a good grip on his product market and potential market just though his rolodex of contacts, which were built through years of being entrenched in the target market itself.

LGYH's current client list includes many of the nations "tier 1" technology manufacturing companies. Beyond that, with today's news that LGYH's manufactured wafer chips are reaching into new burgeoning markets such as the flat panel screen and photovoltaic sectors, Legacy seems to have a slew of potential new clients at its fingertips and a competitive edge to speak of.

We all have to agree that energy, now being viewed seen as the finite source that it is, is where the investment dollars are going. Whether you favor oil and gas, solar or alternative energy, most will agree that until we make drastic advancements in the conservation of or production of energy, this is a trend that is not going anywhere.

However, in an economic climate where companies are tightening the purse strings, being environmentally conscious has to equate to more than good PR. Legacy has a foothold in a growing market, with a more cost effective solution that also reduces the use of resources. Top that off with a strong management foundation and you will see why this company is one that we think has a very bright future.

Labels: Legacy Systems, Legacy Systems Holding, LGYH. LGYH.ob

City Loan Inc. (OTCBB: CYLN) plays in one of the most interesting credit markets that I've ever come across.

The company provides loans to consumers and takes their automobiles as collateral. Think you're gonna drive off into the sunset with their dough? The joke's on you, Jack. CYLN.ob equips each car that it issues a loan on with a state-of-the art GPS system that directs the good ole repo man right to your front doorstep should you neglect to pay up.

While condemned by many consumer advocacy groups as one of the worst forms of predatory lending, the number of title loan companies has grown significantly over the past 5-10 because of the massive profit potential afforded by the auto pawn business model.

Massive Profit Potential for Companies Providing Title Loans

For starters, title loan companies typically don't fall under the same category as banks and credit card companies and get away with charging triple digit APRs. And you thought your Amex was bad.

Moreover, loaners typically only give out about 20% to 50% of the car's value, but in many states can retain all of the proceeds collected from sales of repossessed cars for defaulted loans. Many times the auto lone co. comes out of it all with the automobile even after the principal has been paid back, sometimes two times over.

Simply, put the auto title loan market is not exactly a feel good investment idea for most. But, with the economy in a recession and fears of another great depression mounting, consumers are increasingly hunting for cash to keep their businesses running and families fed. Ethical or not, company's like CYLN.ob are cashing in and will continue to do so until the bleeding stops.

Labels: City Loan Inc. City Loan, CYLN, OTCBB: CYLN

Courtesy of http://www.altfueltechnology.com/

What is DME made from?

1. Stranded Natural Gas
2. Coal
3. Biomass
4. Black Liquor
5. Corn Stalk Waste
6. Grasses
7. Wood
8. Wastes
9. And more

What vehicles would benefit from DME?

• DME is a diesel fuel replacement, so all diesel cars, trucks and buses could run on DME.

Will DME be expensive?

• In production, DME is equivalent to diesel fuel when crude oil is $30-$70 a barrel. This depends on which source (see question 1 above) the DME is made from. Crude oil has reached prices of $150 plus, making DME a very affordable fuel.

Labels: AFTC, Alternative fuels, Bio Fuel, Dimethyl Ether, DME, green

PENC stock price has broken above the upper symmetrical triangle trend line and could be headed for new highs.

A break above $1.19 will take PENC back to $1.25 followed by $1.30 and a new 52 week high above $1.40.

Labels: OTCBB: PENC, PENC, PENC.ob, Pinnacle Energy, Pinnacle Energy Corp

Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash.

However, most of the research that I've come across lately indicates that heading for 'greener' pastures is not historically as profitable a decision as holding tight and weathering the storm.

According to a recent New York Times article that takes a look at a 2005 study conducted by the University of Michigan, "From 1963 to 2004, the index of American stocks tested gained 10.84 percent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 percent. Less than 1 percent of the trading days accounted for 96 percent of the market gains."

Timing is Everything

Timing is everything folks, and most investors like ourselves never seem to end up getting back in before the market bounces back. Unless the world disintegrates over the next 5-10 years, a market rebound is inevitable. Since there indeed is not much upside potential in cash today other than short-term safety, if you have the money, I suggest looking hard for value in today's bargain basement environment.


Here are a few potential candidates

Outside of the small cap arena, I've fallen in love with CreditCorp (NYSE: BAP) over the past few months only to watch share price erode nearly 50% from its 52-week high. Peru's biggest bank should benefit greatly from the country's booming economy which is expected to grow by 9.2% this year despite the ongoing global meltdown. Shares now trade at around $40 vs. $73 on September 10th.

Also, some very sexy Asian and South American ETFs including the iShares FTSE/ Xinhau China 25 Index Fund ( (NYSEArca: FXI) and the iShares MSCI Brazil ETF(AMEX: EWZ) have been battered over the past few weeks as well. Although both nations have been severely impacted by the slowdown in the U.S., both stocks are now down 50% to 60% since January 1st. If the global markets rebound majorly, these could be two of the first stocks to rally.

On the other side of the fence there is Quantum Fuel Systems (Nasdaq:QTWW). The stock ran from under $.40 to over $3.20 earlier this year and has given back most of its gains despite commenting publicly on a number of very positive developments in its solar energy business over the past month or so.

Net-Net

With Wall St. bouncing back this morning in early trading after a global market rally and a number of solid companies now trading at major discounts, we suggest thinking twice before moving too heavily into cash.

Note:

Microstockprofit.com and its affiliates hold no position in any of the companies mentioned in this edition.

Labels: BAP, EWZ, EXI, Market Rally, Panic Selling, QTWW

We typically don't post articles from other sources verbatim, but given the current economic circumstances we feel Ben Stein's recent commentary on how to ruin the U.S. economy bears repeating. The following is quite alarming and also true.

How to Ruin the U.S. Economy
by Ben Stein

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America's posterity with staggering burdens of repaying the debt.

2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people's money with few or no regulations and little oversight.

3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.

4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.

5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.

6) Allow the creation of large betting pools called "hedge funds" that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.

7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.

8) Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.

9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The "subprime" market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.

10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.

11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.

12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.

There, that should do it.

Labels: How to ruin the U.S. Economy, US Economy