<a href=www.latintrade.com>LatinTrade June, 2003 Investors can take solace in this news: Microsoft founder Bill Gates, the world’s richest person, has lost more than half his fortune in the last five years, according to an exclusive Latin Trade analysis of the annual Forbes magazine ranking of the world’s billionaires. Bill is scraping by on US$41 billion. In Latin America, billionaires are suffering far less than Bill, yet los ricos are crying, too. Mexican telecom mogul Carlos Slim has $7.4 billion in 2003, down from $8 billion in 1999.

Argentina’s Gregorio Pérez Companc’s holdings were cut in half to $1.6 billion during the last five years. Overall, José Billionaire—the average Latin American billionaire—is almost 14% richer than he was in 1999, but his wealth has declined $300,000 to $2.2 billion in the last two years. The primary challenge for Latin American investors in recent years has not been to increase wealth, but simply not to lose it.

“Latin American investors face double jeopardy: significant risk in their own markets and risk associated with investing in developed markets,” says Ted Berenblum, chief investment executive for Citigroup Private Bank, which manages money for 24,000 of the world’s wealthiest and most influential families. “The vast majority seeks to preserve capital.”

The fortunes of Latin America’s elite have been dwindling due to political and economic instability at home during the past year. Currencies have collapsed with respect to the dollar in Argentina, Venezuela, Brazil and even Chile, with little or no rebound in the countries’ economies. Brokerage Morgan Stanley’s index for emerging stock markets has fallen 40% during the last five years, while J.P. Morgan’s index for emerging market bonds has been cut practically in half.

Taking no chances. Global markets have been abysmal during the past five years, too. The Dow Jones industrial average was at the same level at the end of March 2003 as it was at the start of 1998. A five-year U.S. Treasury bond now pays an annual yield of less than 3%—close to the historic U.S. inflation rate, or effectively a zero real return.

Accordingly, investors are combining traditional assets like cash, stocks and bonds with alternative investments such as positions in hedge funds, private equity, real estate, commodities and art. People who don’t like to take chances favor traditional investments, while those who like to live on the edge see a buying opportunity.

“A large pool of clients is risk averse,” says Citibank’s Berenblum. “One could argue historically that when it has looked the worst, it was often a good time to enter into private equity or other alternative investments. However, to say that this is happening in a large way today would be misleading.”

Latin American investors are exploring new ideas to preserve capital while trying to put a little zip into returns of a small portion their portfolios. Mainstream ideas include stable value funds that have short- and medium-term bonds, guaranteed investment contracts and insurance to keep the fund’s net-asset value stable. According to specialized research firm Heuler Analytics, annual returns on these funds has been more than 5% for the last five years.

Gold, real estate and art, the traditional havens for emerging market investors in tough times, especially during periods of high inflation, have not proven risk free. Investors who plowed into gold, seeking refuge from uncertainty surrounding the Iraq war, watched in horror as prices zoomed to more than $380 per ounce during January 2003, from $325, only to collapse back to $325 by the start of April. Nonetheless, the average price is up 10% since 1998.

Real estate, another favorite of emerging market investors, is harder to quantify. Prudential Real Estate Investments, which managed $21.6 billion in assets for 363 institutional clients at the end of 2002, puts the minimum acceptable rate of return for Latin American real estate investments at anywhere from 13.8% for Chile to 34% in Argentina. It then requires a further average return of 11.5% for Latin America for taking the risk of investing outside the United States.

Oil futures. Some Latin American developers are building projects in Miami to reduce the risk of investing in Latin American real estate. Mexico’s Grupo Inmobiliario Cababie is building a $40 million twin-condo tower, shopping mall and office complex in the northern suburb of Aventura, where the developer expects to sell units for as much as $1.4 million each.

Art has traditionally been hard to buy and sell as an investment because each piece’s unique value makes it harder to trade than, say, a commodity like pork bellies. Returns are even harder to predict. Nevertheless, slowly but surely, it is becoming a market like all the rest. U.K.-based fund managers Fine Art Management Services has been trying to raise $350 million to create a fund dedicated to investing in museum-quality pieces.

In a recent article titled, “Can Rembrandt Get You Through Wars and Recessions,” Jianping Mei and Michael Moses, associate professors at New York University’s Stern School of Business, calculated that the average annual appreciation of art prices from 1875 to 2000 outpaced inflation but was considerably less than the 6.6% real return of the S&P 500 index.

“People don’t buy art for a return in three to six months,” says Ana Sokoloff, head of the Latin America art department at auction house Christie’s. “They don’t talk about returns on investment.”

While the amount of work offered at auctions of Latin American art continues to decline, the total value of art sold grew slightly last year to $30 million, according to the London-based research firm Art Sales Index. Auction house Sotheby’s reports a $2 million rise in Latin American art sales, including an estimated 20% buyers’ premium, to almost $17 million last year, albeit far below Sotheby’s peak sales of almost $24 million in 2000.

Kirsten Hammer, director of Latin American art at Sotheby’s, says that works in the $800,000 to $1 million price range continue to sell well even though these paintings, by artists Frida Kahlo, Diego Rivera, Rufino Tamayo and Wifredo Lam, among others, do not necessarily offer the highest return.

Buying lesser-known or under-appreciated artists at $10,000 to $30,000 is where art offers a large payback. Kahlo’s work sold in that price range in the 1970s and went on to sell for $5.1 million in 2000—still the highest price paid for a female artist’s work, says Hammer.

The artists don’t have to be dead to sell well. Pablo Vallecilla of the Marlborough Gallery in New York says that investors are paying $100,000 to $300,000 for paintings by Colombian Fernando Botero, Chilean Claudio Bravo and Cubans Tomás Sánchez and Julio Larraz. The Marlborough Gallery’s presence in New York, London and Madrid create el marketing muscle, he says, to give artists worldwide exposure. “Whenever an artist crosses borders with an international exhibition, it’s always an important sign,” says Vallecilla.

As the pool of buyers of Latin American art grows, Vallecilla says, Latin Americans don’t see its importance as only art. “They see it as an investment,” he says.

Given the time frame to generate returns on art, however, investors may be well-advised to take to heart what a professor once said to Sotheby’s Hammer about investing in art: “You have to think of the dividend as sitting and looking at wonderful art.”

Reuters, 05.29.03, 2:14 PM ET

NEW YORK, May 29 (Reuters) - U.S.-traded shares of foreign companies traded higher on Thursday, bolstered by a rally in Latin American and Asian issues.

Leading the Latin American issues were Brazilian and Venezuelan companies. Investors bid up Brazilian shares despite news that its economy grew by a modest 2 percent in the first quarter over last year, sustained by booming exports. "People feel positive about Brazil and like what's been happening in the economy and that the government continues to follow through on reforms," said Hugo Rubio, international equities trader at Lazard Freres.

Shares of Unibanco Holdings S.A. (nyse: UBB - news - people), one of Brazil's biggest banks, jumped 4.5 percent to $18.19. In Venezuela, CANTV (nyse: VNT - news - people), the country's leading telecommunications company, rallied 7.5 percent, or 89 cents, to $12.74. Investors were cheered by news that Venezuela's President Hugh Chavez and his foes agreed last Friday to a referendum on his rule, Rubio said. Opinion polls show that Chavez would most likely lose a referendum.

"Most businessmen would prefer Chavez to get out of office," Rubio said.

The Bank of New York's index of ADRs <.BKADR>, or American Depositary Receipts, rose 0.77 percent, and the bank's index of leading Latin American ADRs <.BKLA> jumped 1.2 percent.

Overnight in Tokyo, the benchmark Nikkei average <.N225> ended up 1.71 percent at its highest finish since March 24, while the broader TOPIX index <.TOPX> rose 1.44 percent to a three-month high.

Among key Japanese issues, Sony Corp. (nyse: SNE - news - people) jumped 2.1 percent, or 56 cents, to $26.91, a day after the world's top consumer electronics maker unveiled a new video entertainment device called the "PSX."

Taiwan stocks helped push up the Bank of New York's index of Asian ADRs <.BKAS> 1.09 percent by late afternoon.

Shares of Taiwan Semiconductor Manufacturing Co. (nyse: TSM - news - people), the world's biggest contract chipmaker, rose 1.7 percent, or 16 cents, to $9.63.

The Bank of New York's index of European <.BKEUR> edged up 0.66 percent. Leading technology stocks gained in tandem with a slight rise in the Nasdaq market, but were offset by declines in large-cap oil companies.

Shares of Geneva-based STMicroelectronics (nyse: STM - news - people), Europe's biggest chipmaker, rose 1.3 percent, or 28 cents, to $22.39. But Britain's BP Plc (nyse: STM - news - people), one of the world's biggest integrated oil companies, slipped 3 cents to $42.07.

<a href=> <a href=www.ethicalcorp.com>Ethical Corp17 May 2003 Jon Entine

Jon Entine asks whether socially-conscious investors should grade countries.

How can individual investors play a role in "regime change," the latest political buzz phrase? So-called socially responsible investing claims as its greatest success and the seminal event of the movement its boycott in the 1980s of companies doing business in South Africa. Let's put aside for a different column the role of social investors in toppling apartheid (tease: next to nothing). We do know that today's version of social investing, with its myopic obsession on excluding companies that its screens adjudge to be social miscreants, fails miserably in putting pressure on countries to reform, either politically or economically; no individual company has enough impact to make much of a difference.

What are the alternatives? In a prior column, I discussed the incipient movement to identify companies that invest in countries that wink and nod at terrorism. This shifts the focus from exclusion, which does little but assuage the anxiety of individual client investors, to transparency, which impacts all of a company's stakeholders.

Avoiding investment

The US$133 billion California Public Employee's Retirement System takes another approach. For a second year, CalPERS, one of the world's leading advocates of corporate governance reform, has announced its list of emerging market countries in which it will avoid investments. Based on research provided by Wilshire Associates of Santa Monica, CalPERS evaluates a slew of market and non-market considerations including civil liberties, press freedom, political stability, judicial independence and accounting standards. This year's boycott list excludes investments in 12 countries including export giant China and some of the world's best performing markets, such as Russia and Egypt.

The economic impact of CalPERS black list is insignificant. Although the mega-pension fund can move markets in the US, it has less than $2 billion invested in emerging markets. But it is considering dramatically increasing such investments. And the fund's worldwide prominence, particularly in the area of corporate governance, has turned it into a bell-weather for some international fund managers. The list has also turned foreign governments into nervous Nellies. After CalPERS exxed Malaysia last year, government officials censured the fund. "Our record on human rights is good," whined the deputy prime minister. The Thai market plunged nearly 4 percent after it was listed. Government officials pleaded for time, saying, "There should be sufficient channels in which we are given appropriate opportunities to show that Thailand has complied with good-practice standards, as we have every intention to do." India, Jordan, Sri Lanka, Colombia, Venezuela, Morocco, Indonesia, Pakistan and the Philippines, the other 2003 no-no countries, have all contacted CalPERS to find out what steps would be necessary to get in its good graces. From a market performance standpoint, CalPERS' list has yet to prove its worth. For example, black listed Indonesia soared 27% last year while the Thai market went up 20%. On the other hand, the Argentine and Turkish markets, given a seal of emerging market approval, tanked 51% and 34% respectively. Almost every emerging market on CalPERS must-avoid list at least matched major western indices. As one wag put it, the question for investors is not whether the dog has fleas but whether the price of the dog takes the fleas into consideration. Of course the real value of CalPERS' ratings is not as a timer of notoriously unpredictable emerging markets but as a club for transparency and change. "There is a relationship between economic growth and underlying conditions in a country," argues California state treasurer Phil Angelides in defense of the investment boycotts. "We are long-term investors. There are certain countries that don't have the requisite stability to put our money at risk. It makes sense to set some minimum thresholds." Higher standards Part of what CalPERS is trying to do is to force western accounting and indeed political standards on other countries. That's a dubious goal in today's dicey, anti-American climate. Its critics also point out that CalPERS uses haphazard standards in determining which country passes and fails. Why is it pulling out of much of South East Asia but not economically insolvent Argentina and repressive Turkey? "They [CalPERS] are making a political decision, one that is not only subjective but questionable," comments Mark Konyn, Asia director of Dresdner RCM Global Investors. Well, one has to start somewhere. "This is a living document subject to ongoing change," responds William Crist, president of CalPERS' Board of Administration. CalPERS is actually following in a tradition blazed less ceremoniously by the conservative Heritage Foundation. Each year in cooperation with the Wall Street Journal, Heritage releases an "Index of Economic Freedom." The index has emerged as a popular measure of economic freedom around the world, which roughly (with notable exceptions) correlates with political freedom. It evaluates 161 countries on 10 broad variables including wages and prices and trade policy. Not surprisingly, many on CalPERS' black list rate low on the economic freedom index. In its ratings released last fall, Russia came in 135th, China 127th, India 119th and Egypt 104th. There are some intriguing differences between CalPERS and Heritage. Turkey, which CalPERS gives a pass, ranked a dismal 119th in the Economic Freedom Index. On the other hand, countries that are free market oriented but politically authoritarian, such as Thailand, ranked 40th and Jordan 62nd, are on CalPERS boycott list. CalPERS might do well to consider adopting a broader range of criteria including some standards included in the Economic Freedom Index. Obviously, no single list is fool or manipulation proof. These are only tools, weapons if you will in an enduring campaign for more openness and reform. In the case of CalPERS, its boycott not only encourages accountability, it is backed by the capitalist club of money. It's a sign of real hope that one of the world's most influential funds is willing to walk its talk when it comes to meaningful regime change. Perhaps other pension funds, public and private, might have the wherewithal, indeed the guts, to follow in CalPERS footsteps. by Jon Entine

ameinfo.com Monday, May 12 - 2003 at 16:26

US Equities

1Q results of the Standard & Poor’s 500 index have just passed. It was the best profit growth since the 3Q of 2001, an average of 13.2%. But looks can be deceiving.

Over half the growth came from oil companies when crude prices went as high as $40 during the quarter. Excluding the energy sector, the average increase of earnings of the S&P500 was just 6.3%. This figure is even lower than the average profit growth of 7% for the index since the 1950.

With oil prices down to $25 per barrel, the market hardly looks like a bargain at 17x expected 2003 earnings. We believe the fair value for the market is around 15x. Therefore, we advice caution, and use rallies to take profits.

We continue to like high yield, low valuation and low-beta stocks:

• Altria Group Inc. (MO, $31.70, CSFB: Neutral) • Northrop Grumman Corp. (NOC, $88.80, CSFB: Outperform) • Johnson Controls Inc. (JCI, $83.82, CSFB: Not rated)

Continue with our theme play. The Federal Communications Commission (FCC) will vote on what would be the most significant change in the rules governing media ownership. This would expand the reach of the nation’s largest broadcast and newspaper companies. The following are companies that we think would benefit from the up-coming changes:

• Clear Channel Communications (CCU, $39.60, CSFB: Outperform) • Walt Disney (DIS, $18.66, CSFB: Outperform)) • Viacom (VIA/B, $44.57, CSFB: Outperform)

General Motors Corp.’s (GM, $35.97, CSFB: Restricted) assembly plant in Oklahoma City has been shut down temporarily. The plant had been running on two shifts with daily output of 600 units. According to management, the company is currently assessing damages and has not yet determined when the plant would be re-opened. However, with current inventories above normal for vehicles assembled in Oklahoma City, sales should not be affected dramatically in the short-term. However, if the plant remains closed for a longer period, the company would face shortages, which could have a significant impact on an already weak business. It is unclear whether the company’s coverage includes only repair costs of the plant or any portion of the lost profitability on the units of both. Morgan Stanley estimates GM could be losing roughly $3.6mm per day, assuming a variable profit of $6,000 per unit produced at Oklahoma City. Therefore, we would not recommend investing in GM for the moment.

JP Morgan Chase & Co.’s (JPM, $30.08, CSFB: Outperform) commercial credit portfolio has been for several quarters a source of concern. Lately, the company has seen stabilization, and expects cost to be in line with the results reported in 1Q’03 (commercial charge-offs were $292 million, down 33% q-o-q). First, there have not been a lot of new credits deteriorating, and certain industries, such as telecom, are progressing and generating recoveries for lenders. Furthermore, the company has been actively looking to reduce the overall size of the portfolio. In 1Q’03, commercial credit exposure stood at $406 billion (18% non-investment grade), down from $413 million (20% non-investment grade) q-o-q. This is a good step for JPM in order to regain investors’ confidence, however, despite this reduction; JPM still has a significant amount of risk from troubled industries such as telecom ($2.3 billion in criticized exposures), cable ($2.2 billion), and merchant energy ($1.4 billion, source: Putnam Lowell NBF). For investors having bought JPM stocks at lower prices, we recommend taking profit, because we believe stock price would remain under pressure in the short-term, due to profit taking on U.S. equities. The theoretical price, given by the Dividend Discount Model is $29.40 (source: Bloomberg).

Our recommended oil service Schlumberger Ltd. (SLB, $44.98 CSFB: Neutral) and Noble Corp. (NE, $33.81 CSFB: Neutral) saw a nice rally during last week, as the inventory build up was lower than the market had expected at the beginning of the month. Instead of the expected increase of 3 million barrels, the API reported an increase in inventories of 1.2 million barrels of crude oil.

But the rise in the share prices was also helped by a steady increase in exploration activity. The rig count has been increasing since the beginning of the year, driven by the strong crude oil prices, but during the last couple of weeks the increase seems to have accelerated, mainly thanks to growth in offshore and especially in natural gas exploration activity. The growth in end demand for natural gas in the US is expected to continue its rising trend over the next couple of years. Globally demand for natural gas could be growing by 12% per annum through 2007, driving the exploration activity in this area and thus creating new opportunities for companies such as Noble Corp and Schlumberger.

Exxon Mobil Corp. (XOM, $35.47 CSFB: Neutral) has a strong position in natural gas production in the US, where demand is growing rapidly, and therefore should be benefit from this trend. However, in the very short term we expect to see some profit taking activity, mainly in Schlumberger, whose share price has risen over 18% over the last four weeks and is starting to look toppish on a technical perspective. We therefore advise trading oriented investors to consider locking in some of their short-term gains in the stock.

European Equities

• The DJ EUR Stoxx 50 closed the week slightly lower at 2314.10 • The ECB decided to leave rates unchanged • Societe Generale – took profit, 15.8% (20% including dividends) since mid February 2003

After a 25% gain since mid March a justified question to ask is if this rebound is sustainable. Given the weak economic environment with growth estimates revised downwards, unemployment rising and consumer confidence although rebounding, but still below the pre-war level, we believe what is needed now is an improvement in economic data before we can call this rally sustainable. In addition, a risk to European earnings remains the strong Euro which approached 1.15 USD last week and today trades even higher on the back of the European Central Bank’s (ECB) decision to keep rates unchanged. Although it was widely expected that the ECB would not be proactive enough, the overall package was not disappointing. The Council evaluated its strategy and confirmed the definition of price stability (defined as a yoy increase in the Harmonised Index of Consumer Prices (HICP) for the Euro area), but did say that instead of targeting inflation between 0 and 2% they ‘aim to maintain inflation rates close to 2% (but below 2%) over the medium term’. The previously defined price stability left room for misinterpretation and with this clarification the ECB signalled that a rate just below the 2% would be acceptable. Another interesting point was the comment that the current level of the Euro reflects fair value and is in line with fundamentals.

During the recent reporting season, most of the companies met expectations, but this was often the result of intense cost cutting. Although the recent cost-cutting exercise was necessary, painful as it was, it would not lead to a sustainable upswing. What it can do is to limit the downside. Therefore, given the current economic environment we believe we need to see a correction and would advise investors to be nimble and to take profit whenever possible.

Hence we decided to take profit on Societe Generale (GLE FP; EUR 55.35). On the back of BNP Paribas’ good earnings results the stock reached our target price of EUR 58 and although we continue to like the company from a fundamental point of view, we would prefer to protect our profits of 15.8% (20% including dividends) since mid February 2003, and have decided to take the stock off our recommendation list. We will wait for lower levels to re-enter.

BNP Paribas (BNP FP; EUR 41.55) reported net income of EUR 962m, which was well ahead of analysts’ expectations. The main difference came from stronger than expected performance from trading income in the wholesale and investment banking business. As we have seen from many US banks the fixed income divisions did very well, but in addition BNP referred to equity derivatives to explain the surge in income.

Despite the difficult environment, a sharp decline in the Dollar and a challenging comparison to strong 1Q02, BNP managed to post a net banking income of EUR 4513mn, which represents an increase of 2.1% compared to 1Q02 and is the group’s highest quarterly net banking income since its inception.

On the provisioning front, group provisions came in at EUR 339m, which includes a provision of EUR 85m to the general reserve in the US. Credit quality did not deteriorate. Cost income ratio stands at 63.3% and annualised return on equity was 14.4%.

We believe this was a sound set of result, which confirms our buy rating.

Further earnings report came from our two preferred energy stocks TotalFina (FP FP; EUR 125.5) and ENI (ENI IM; EUR 13.284). Total, which changed its name from TotalFina, reported a 49% increase in net income to EUR 2.12bn for the 1Q, coming in at the top end of analysts’ forecasts. EPS excluding non-recurring items rose by 55% to EUR 3.28. The favourable oil market environment, higher oil prices and a rebound in European refining margins more than offset the impact of an 18% decline in the US Dollar against the Euro and the continued weakness in Chemicals.

The upstream division achieved its target return of a 5% growth in hydrocarbon production and at the same time the group was able to report a 17% return on average capital employed over the last 12 months. Investors were concerned that the company may not be able to achieve its 2005 target ROACE of 15.5%. However, an output growth of 5% provides 35% of the profit improvement required and is backed by a diverse project portfolio, good reserve replacement rate and a strong track record both on volume and costs.

These figures confirm our belief in the company, which among the supermajors shows one of the highest production growths.

Please recall that CSFB recently upgraded the stock to an outperform as they believe that the current share price assumes no further improvement in underlying returns by 2005 which is much too pessimistic.

Eni’s figure came also in at the top end of the range and overall 41% higher compared to 1Q last year. Net income was EUR 1.9bn and EPS EUR 0.50. Whereas production growth was on the lighter side with 4% yoy due to outage during the strike in Venezuela, strong Gas & Power division mainly drove the outperformance. The rolling return on average capital employed at 22% is higher than the average of the Big Five Majors.

We believe Eni is an interesting play on the energy sector and in addition comes with an attractive dividend yield of 5.65% which, given the high cash generation and strong balance sheet, looks sustainable.

With Credit Suisse, Private Banking Monday, May 12 - 2003 at 16:26 UAE local time (GMT+4)

Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of AME Info FN FZ LLC.

This Article was updated on Monday, May 19 - 2003

<a href=cbs.marketwatch.com>THOM CALANDRA'S STOCKWATCH By Thom Calandra, CBS.MarketWatch.com Last Update: 10:31 AM ET May 12, 2003

SAN FRANCISCO (CBS.MW) - The dollar is crashing. The dollar is crashing. CBS MARKETWATCH COMMENTARY THOM CALANDRA (WEEKDAYS) How to time the timers TOMI KILGORE (MONDAYS) A convergence of technicals weigh in on IBM BAMBI FRANCISCO (TUESDAYS) The reality behind the 'Matrix' technology MIKE TARSALA (WEDNESDAYS) Microsoft XBox: A game of pitfall? DAVID CALLAWAY (THURSDAYS) Wall Street analysts: the new SARS JON FRIEDMAN (FRIDAYS) N.Y. Times' explanation of reporter fiasco falls short

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The American dollar is now at its lowest point since January 1999, its euro nemesis rising as high as $1.1626 Monday morning. The Australian and New Zealand dollars notched nearly four-year highs against the U.S. dollar as well.

Gold, which benefits from dollar weakness, rose above $350 an ounce for the first time since March 12. See: Euro riding high.

U.S. Treasury Secretary John Snow "has been all over the heartland and now all over talk-TV, saying 'strong dollar, best interests' out of one side of his mouth and 'the market sets rates competitively' out of the other.' This time he is able to add that exports are getting

stronger because the dollar is weak," notes longtime currency strategist Barbara Rockefeller at Rockefeller Treasury Services.

"This is where the administration wanted to be all along and now they can admit it, especially given the Fed's seal of approval last week to devaluation-inspired inflation," says Rockefeller, whose work on currencies is among the best of U.S. strategists. "Now the only issue is how long it takes for the new perspective to reach the majority of interested parties."

Rockefeller says Wall Street issuers of stock and bonds have the most to lose as the dollar slides (more than 20 percent this year alone against the euro). "The stock boys love to scare themselves with panic stories and the crashing dollar offers a good opportunity. Corporate bond issuers can't be too thrilled, either. They have to offer a premium," she says from her Connecticut headquarters. "But before the U.S. says or does anything to rebalance the outlook, we will probably see both Japanese and European intervention."

The dollar's continued slide this year will embolden some currency speculators, says Chuck Butler, chief strategist at Everbank.com. "Liberties are going to be taken with the dollar now, whenever traders feel feisty enough to do so," Butler said about the currency markets. "They don't have the fear of a strong dollar policy as they once did."

Butler, whose Everbank.com in St. Louis allows individuals to shuttle dollars into foreign-denominated certificates of deposit, has been forecasting the dollar's decline for at least the past two years. His thesis is that investors are seeking the higher yields available on cash deposits in currencies other than the dollar. Market yields on U.S. Treasury bonds Monday morning were falling to historic lows, with the 10-year yield below 3.6 percent.

The dollar still has a way to go -- down, says Butler. "I'm still concerned about the speed euro traders are marking up the currency, but until I see any signs of a pullback," he says, "so you just go with the flow."

For now, stock market investors are paying little attention to the dollar's continuing cascade. Most must believe, as the Treasury secretary indicated, that cheaper dollars will help American exporters of goods and services, such as McDonald's (MCD: news, chart, profile) and Gillette (G: news, chart, profile), in their overseas businesses.

The stock market, says Richard Dickson at pioneering analytics firm Lowry's Reports, "has developed a pattern of ignoring signs of short-term weakness, so at this point we would give the benefit of the doubt to the bulls. "Until selling shows definite signs of picking up ... the market is unlikely to suffer anything more than an occasional short-term setback."

One wild card is oil. Higher oil prices could derail any economic recovery that is in the cards for this year. Supply constraints could boost oil prices just as the summer driving season heads our way.

"What's the bottom line? For the oil markets, it means oil in the $25 to $30 per barrel range for the near term," says Joseph Duarte, Dallas fund manager and financial author. "But if circumstances worsen in the Middle East, we could see much higher prices for some time. For investors and traders, it suggests a potential profit opportunity in the energy sector."

Duarte points to "razor-thin storage margins" of oil in U.S. markets, as well as declining oil-rig counts across the world as signs supply troubles may be just ahead. "Oil companies are doing everything that they can to control refinery capacity. And with no chance for any kind of a swing producer appearing (such as Nigeria or Venezuela), any kind of further supply disruption, either intentional or accidental with or without an increase in demand, would send oil prices rising significantly once again," he says.

Duarte, of River Willow Capital Management, uses shares of oil-services firm Lonestar Technologies (LSS: news, chart, profile) as his leading indicator for where oil prices are headed. Lonestar shares are up almost 30 percent since April 1. "The pieces for another round of supply squeezing are certainly in place, and the oil stocks are clearly forecasting that the dynamics of the marketplace have been altered significantly," Duarte says about the flow of oil through Middle East ports. "Lonestar Technologies is predicting higher prices for oil, just as the oil market fundamentals are dramatically pointing the same way."

As for gold, Wall Street and Main Street strategists increasingly see the metal eclipsing its $389 an ounce high from earlier this year as the dollar declines. "The world is dangerously awash with U.S. dollars. More than three quarters of global central bank reserves are in U.S. dollars," notes Frank Giustra of Endeavour Capital, a Canadian merchant banker. "The downward trend in the dollar began two years ago and is very much intact. Although it has fallen approximately 25 percent against the U.S. dollar index, the dollar is still overvalued and will most likely fall a further 15 percent in the next two years alone."

Giustra, former president of mining financier Yorkton Securities, says gold investors will benefit. "As gold is priced in U.S. dollars, the dollar's decline will make it cheaper to purchase in other currency terms and less attractive for non-U.S. gold producers to produce," says Giustra, writing for International Speculator. "More importantly, if its imperial status is severely challenged and no other currency emerges as a viable alternative, then gold will regain its historical status as the currency of last resort and the ultimate store of wealth."

The Calandra Report: a new 'spec-buy'

Out this week: the latest from The Calandra Report, a new subscription service. Included in the report is a new "speculative buy," a profitable company whose business will see a quantum boost in revenue from at least one major customer. The report's first spec-buy in late April is up 25 percent after making The Calandra Report's Recommended List. Click here for more on how to subscribe.

Thom Calandra's StockWatch is CBS MarketWatch's flagship column. The regular report is in its eighth year at CBS.MarketWatch.com. Thom Calandra is also author of subscription service The Calandra Report.