It seems everyone is turning against US Treasuries now. But Justice Litle says it might not be the best move. After a vicious fall at the start of the year, investors could flock back to Treasuries as the recent rally in stocks subsides. Justice says the arguments for shorting the dollar are far more convincing right now.

This from Taipan Daily:

Has the U.S. Treasury bubble popped? It’s starting to look that way.

USTs gapped higher in mid-December, traded in a quiet range til year’s end, and then immediately went into freefall with the start of the new year.

This wasn’t a total surprise. On Dec. 23rd, in a Taipan Daily piece titled “A Treasury Bond Mystery and a Currency Clue,” I gave a summation of what was happening and how to play it:

Based on

The deep recession expected in 2009 will likely lead to higher rates of crime. Adam Lass says investors can play this trend by picking up shares of commercial jails. Florida-based Geo Group (NYSE:GEO) operates in several countries and is rapidly expanding its detention facilities. Adam says investors could be in line to double their money by the summer.

This from Taipan Daily:

I’d like to talk to you about prison for a moment.

Now, don’t start panicking or checking your Rolodex for your attorney’s number. I am not looking to prosecute anyone (nor be prosecuted myself for that matter) any time in the near future.

It’s just that jails have been cropping up a bit as I look about the investing scene these days. Sort of a theme, as it were.

The Smartest Guys in the Room Get Burned

For one, there’s that fellow Bernard Madoff.

You know the

We are in the early stages of a long and deep recession, says Adam Lass. But that doesn’t mean savvy investors can’t make a profit. Rising unemployment and underfunded local governments is a recipe for crime in urban areas. And that means big business for companies in the self-protection industry. Adam says TASER International (Nasdaq:TASR) stock could triple in the next 18-24 months.

This from Taipan Daily:

It’s certainly no challenge finding stocks under $10 these days. Unfortunately, many of them used to trade for at least twice that much. To make matters worse, in most circumstances, these sad sacks deserve this ignominious fate.

Take your pick: Homebuilders who put up pasteboard shacks alongside highway interchanges and called them “mini-mansions”… banks that sold mortgages to undocumented workers… brokerage houses that bought and sold worthless bonds… retailers who based their

We hope you had a happy holiday.

We’re on our way back to our home in Buenos Aires tonight. We’re looking forward to getting back, but not to the nine-hour flight with our nine-month-old son… It’s likely to be grueling.

But at least we’re not in the retail business…

They are likely to be disappointed by the holiday season. According to the Commerce Department, consumer spending fell 0.6% in November, the fifth monthly decline in a row.

The Wall Street Journal reports that 10% to 26% of U.S. retailers are now in danger of filing for Chapter 11 in 2009 or 2010.

That’s up from 4% to 6% of retailers in trouble in the last two years.

It’s no surprise, really.

More Americans are out of work now than at any time since 1982. The number of American’s filing for unemployment for the first time leapt to 586,000

A great business will always have clients and will always get paid, says Justice Litle. That’s why Key Energy Services (NYSE:KEG), the world market leader in maintenance of oil and gas wells, is in a great position. The company is growing rapidly and has a healthy balance sheet. Best of all, it is hugely undervalued at today’s price, meaning a chance for investors to triple their money.

This from Taipan Daily:

Key Energy Services (NYSE:KEG) is the largest rig-based well service company in the world.

You could say the main job for a company like Key is to “keep the oil & gas flowing.” Once a well is drilled, that well has to be maintained and serviced throughout its life. This is what Key does.

It’s a great business

US Treasuries are in a bubble, making them ripe for shorting. But that trade is too obvious, says Justice Litle. And the situation is more complex now that the Fed is getting involved. Bernanke & Co could support T-Bills in the medium term, but that will only increase the odds of an epic decline after.

This from Taipan Daily:

U.S. Treasuries look so lousy here that shorting them has become the “obvious” trade. But there is more to this mystery than meets the eye, as Justice explores…

Jim Grant nailed it in a recent Financial Times piece. Known for their “risk-free return” in more normal times, Grant observes that U.S. Treasuries (or USTs for short) now offer “return-free risk.”

Treasury buyers, in other words, choose to lend to Uncle Sam for free these days… or, worse still, to pay for the privilege. As 2008 draws to a close, USTs are an

Dear Value Seeker,

Christmas is almost upon us.

Business activity is winding down. In some cases, it’s stopping altogether.

According to the Financial Times, some of the biggest tech names in Silicon Valley will be shutting up shop over the holidays to cut costs.

Meanwhile, the bosses at Toyota have signaled that the automaker could post its first yearly operating loss.

Contrarian blogger Mish Shedlock warns that corporate losses may be the least of our worries. That’s because a new, highly-contagious fiscal virus is taking hold of the world economy.

“The primary symptom of FIV [Fiscal Insanity Virus] is irrational, often delusional fear of deflation. The virus has an uncanny ability to seek victims in positions of authority. Those afflicted with the virus start taking (or promoting) fiscally reckless actions guaranteed to damage the host country.”

There’s a fine line between a stimulated economy and a destroyed currency, says Adam Lass. And the world’s central bankers are in a race to the bottom. Japan’s latest rate cut has given the US dollar a short-term lift versus the yen. But the greenback will soon plummet again. Adam says investors should take up a short dollar/long gold position for 20-30% gains in the coming months.

This from Taipan Daily:

Japan’s absurd 0.2% rate cut is offering American “Dollar Shorts” a second chance at doubling their money.

Welcome to the World Banking Limbo competition, wherein central bankers around the world try to calculate that fine line between a stimulated economy and a destroyed currency.

Last Tuesday, U.S. Fed Chairman “Helicopter Ben” Bernanke re-earned that moniker when he announced that the U.S. central bank would move rates below 1% for the first time in history. What’s

Dear Value Seeker,

Sometimes words speak louder than actions.

Especially when it’s the Fed’s words.

Today, market watchers are on the lookout for clues about how the Fed is going to tackle deflation.

A rate cut of at least 0.5% is already in the can as far the pundits are concerned.

But with consumer prices plunging, investors expect the Fed to signal more emphasis on more unorthodox ways of ‘stimulating’ the economy.

According to MarketWatch, “The bottom line on Fed policy is supply of money. The Fed typically targets the price of money but, with the price so low, it will focus on increasing the quantity of money through its balance sheet.”

Not that the Fed hasn’t tried this already.

It has doubled the size of its balance sheet to over $2 trillion since September.

As Bud Conrad at Casey Research notes, “Mostly under the covers, [the Fed]

The world is changing. The American consumer has been the backbone of the global economy for the last quarter of a century. But the credit crisis is ushering in a new era of thrift. Is this the end of the world as we know it? Yes, says Justice Litle, but it isn’t necessarily a bad thing…

This from Taipan Daily:

Jim O’Neill is the Goldman Sachs economist who invented the BRIC acronym – shorthand for “Brazil, Russia, India, China.”

Now O’Neill thinks the BRIC countries – or rather, the shoppers in these countries – will save the global economy in its great hour of need.

“The BRIC consumer is going to rescue the world,” O’Neill says. There are 2.8 billion of them… and they are “poised to spend more.”

2.8 billion is a pretty big number. (As the old saying goes, anything times a billion