Dazed and Confused

We just witnessed the last surviving big investment banks on Wall Street exit the stage. Rather than go the way of Bear Stearns and Lehman Brothers (LEHMQ), however, Goldman Sachs (GS) and Morgan Stanley (MS) chose a less dramatic exit strategy -- they have become regulated banks. This spells the end of the investment banking industry as a separate sector.

With good reason, most Americans are dazed and confused about what's happening in the financial services industry, and are simply worried about the well-being of their saving accounts, money market funds and stock holdings. Check out today's Rant to get my take on the situation and learn how you can navigate these monumental changes in the investing world.

Toby

Enron All Over Again

It's sad to say that, less than a decade later, the Enron scandal is small potatoes. The current market fiasco is bringing the whole financial system to its knees. Washington Mutual is down 94%, AIG is down 95%, and Lehman Brothers is down 99%.

It will take most investors years to recover. But you can start capturing gains a helluva lot quicker.

At Big Money Options, we're closing winning trade after winning trade. Just today, members captured 57% profits, and since June they have profited on 19 out of 22 trades. 

Don't wait. Get in on the profits with a risk-free trial subscription.

Your Post-Bailout Recovery Strategy

Lately, I can't help but be reminded of the movie "Groundhog Day," in which Bill Murray's character has to keep reliving one of the worst days of his life until he gets it right.

And wrapping your head around the surreal financial times we're currently living in is no easy task, but sometimes the best way to understand transformative change is with a metaphor.

There is no shortage of metaphors in the news for the happenings on Wall Street. I'm partial to sports metaphors, so try this one on for size:

Yankee Stadium just ended its 85-year run, and the team will begin the 2009 season in a shiny, new stadium, just as Goldman Sachs (GS) and Morgan Stanley (MS) gave up their investment bank status and are turning into regulated banks.

Or perhaps we could liken the government's bailout plan to the U.S. Ryder Cup team, which emerged victorious for the first time since 1999, thanks to a fresh strategy for selecting team members.

Maybe the message in that one is that, with time, all defeats can be overcome -- eventually. Often an innovative strategy is as important to the outcome as the execution.

While I'm not trying to wax philosophical in today's rant, I want to share something President Franklin D. Roosevelt said after he declared a bank holiday to stabilize the nation's banking system in 1933.

"The rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence. They know only the rules of a generation of self-seekers.

"The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths."

It seems that what is old has become new again. Let's just hope that the outcome is better this time around.

A ChangeQuake of Massive Proportions

During the past few days, we lived through one of the greatest transformative economic events -- or, as we call them, ChangeQuakes -- since the Great Depression.

Let's assume that we see:

1) A government bailout of the residential and commercial real estate industry to the tune of $700 billion approved in the next five to 10 days;

2) A structural change in the $3 trillion money market fund world; and

3) The complete transformation of the investment banking world to a commercial bank model, a la Goldman Sachs, Morgan Stanley and Merrill Lynch (MER).

Combine that with the nationalization of AIG (AIG), Freddie Mac (FRE) and Fannie Mae (FNM) -- not to mention the fact that it's anyone's guess what will become of Washington Mutual (WM) and Wachovia (WB) -- and the federal government's stake in the financial services and real estate bailout will be more than $1.5 trillion. That's equal to more than 10% of our annual GDP!

That's a large number, but this level of debt can be rationalized by the fact that, as a percentage of GDP, our national debt is much lower than the national debt of countries like Japan or Europe.

In the end, our strategy is essentially the same as it was during the Cold War: mutually assured destruction. Other countries know that if the U.S. economy goes, their economies go, too.

Change Brings Opportunity

These are scary times, but one thing is certain: The tectonic transformation in the financial services world -- and in the role the government will play in financial services -- will lead to winning and losing investments during the next six to 12 months.

Our proprietary research network, the ChangeWave Alliance, is proving to be one of the best independent sources of macroeconomic and sector intelligence, and in predicting the direction of economic trends.

They will continue to answer two key questions for us:

1) How will these developments impact Main Street (i.e., consumers) and the U.S. economy?

2) Which corporations will emerge as the best and worst performers in this very challenging environment?

The Alliance has a stellar track record, and the answers to these questions will help us to make money in this bear market.

At ChangeWave Investing, we have positioned our portfolios to take advantage of the massive changes in the financial and regulatory world, and we have a number of investment strategies in play to make money from these transformations. (Get in now.)

Boys and girls, the world just changed. Has your portfolio changed to meet the challenge?

Toby

P.S. The rules of the game have changed, and the investing world as we know it has come to an end. But with transformation, comes opportunity. We can show you how to position your portfolio to not only navigate the current market, but profit in it. Sign up for your 90-day, risk-free trial of ChangeWave Investing today.  

The Profits Keep Rolling In!

ChangeWave Shorts subscribers continue to grow their wealth. Last week, they closed three trades for 90%, 103% and 150% profits. The week before, they captured 85%, 105% and 128% gains by using simple, easy-to-execute put option plays. 

And there's plenty more to come. Sign up today for your 90-day, risk-free trial and watch your trading account grow.

Ask Toby: Hybrid and Electric Cars

Watch
Or listen

In today's video, Toby talks about a few ways investors can play this trend toward more eco-friendly vehicles.

Watch 'Bulls & Bears' on Fox News

Be sure to tune in to Fox News Channel this weekend and join Toby and the crew on "Bulls & Bears" for their weekly market roundtable as they kick off the Fox News Channel business block on Saturday, Sept. 27, at 10 a.m. Eastern. ("Bulls & Bears" replays at 4 p.m. Eastern, Sunday, Sept. 28, and 4 a.m. Eastern, Monday, Sept. 29.) Or you can catch the show Saturday evenings at 6 p.m. Eastern on the Fox Business Network.

Position Yourself for Profits Each Morning

Stay informed of the market happenings that could impact your portfolio each trading day before the opening bell with Sam Collins' Daily Trader's Alert.

As a bonus, you'll receive a daily stock pick complete with a chart and supporting data!

Sign up today to get Sam's Daily Trader's Alert delivered to your inbox.

Wine Find: The World is Your Oyster

You might have noticed from recent Wine Finds that I've been on a seafood kick lately. So, while waiting to do a news special for Fox Business this week, I went to Johnny's Half Shell in Washington, D.C., to enjoy some fresh oysters.

To complement those tasty morsels, I had the Aforado Albarino Rias Baixas 2006. It's an incredible Spanish white with enough citrus and mineral to stand up to all seafood.

This wine is from Galicia in northwest Spain, which is where we'll be heading in just a few weeks for our annual ChangeWave Wine, Dine and Stocks Seminar.

Best of all, you can pick up a bottle for less than $20.

To share your favorite wine or food experience, e-mail me through the form at www.changewave.com.

Join ChangeWave at the D.C. Money Show and Las Vegas Traders Expo

You and a guest are invited to join ChangeWave at the D.C. Money Show and the Las Vegas Traders Expo.

At the D.C. Money Show, you'll find more than 50 top financial experts who will address the biggest challenges in this volatile market.

Get your free tickets now.

And at the Las Vegas Traders Expo, you'll have the opportunity to network with the best traders in the country and attend workshops designed specifically to help you make better trading decisions immediately.

Sign up for your free tickets today.