Off the Radar Opportunities from Greenland to Outer Space!

• A rising tide does NOT lift all boats… how beachfront property could be in real danger

• While the world frets over Greece, China, U.S, et al.… one off the radar opportunity: Greenland

• Could it get worse for BP? Mother Nature answers, “Of course”

• Plus, Patrick Cox on the next great frontier of private capital: Space

  “It will take MANY centuries,” our friend and Reserve member John Englander writes today, kicking off this millennial edition of The 5, “possibly a thousand years, for Greenland to melt entirely, causing the 24 feet of sea level rise.”

Mr. Englander joined us for our first Rancho Santana Chill Weekend back in March. We’ve since invited him here to meet Trish at Mick O’Shea’s and been exchanging e-mails on his work.

John is a bona fide member of the Explorers Club. “Founded in New York City in 1904,” the club’s website boasts, “The Explorers Club promotes the scientific exploration of land, sea, air and space by supporting research and education in the physical, natural and biological sciences. The Club’s members have been responsible for an illustrious series of famous firsts: First to the North Pole, first to the South Pole, first to the summit of Mount Everest, first to the deepest point in the ocean, first to the surface of the moon — all accomplished by our members.”

On behalf of the Club, John had the honor of placing a flag at the bottom of the ocean beneath the polar ice cap. As a researcher, he’s been to Greenland and Antarctica seeking to understand the causes behind the earth’s rising sea levels… and extrapolating their economic impact on coastal communities:

Not going to happen in 5 Min., of course, but sea level rise could dampen one famous city’s housing market

“Just a couple of feet can be devastating to coastal property,” John warns, “when combined with storms and erosion, regardless of theories about global warming.

“Forget the hype and scare statements. We need to get a clear understanding of reasonable projections for sea level rise during this century. I think you will agree that this is important information for anyone interested in protecting coastal investments — whether they be personal property, family interests, businesses, etc.”

There are, of course, investment implications to this macro trend, too.

“Greenland is getting… well, green,” our Chris Mayer helps tune us in. “This is a big deal for the 56,000 people who call Greenland home, living in the rocky places between the ice and sea. Greenland is a place where an ice sheet up to two miles thick covers 80% of the land. Most Greenlanders have never touched a tree.

“According to National Geographic, Greenland’s ice sheet, which holds 7% of the world’s supply of fresh water, is melting at a rate of 50 cubic miles each year. This alarms most of the world. If all of Greenland’s ice melted, it would cause ocean levels to rise by 24 feet, thereby ruining a lot of beachfront property.

“OK, so I am being flip. But I want to skate around the incendiary politics and debate about global warming. I’d like instead to focus on the investment opportunity that might be opening up in Greenland. The Greenlanders are excited about what some greening could do to the hard economics of this place.

“The melting ice opens up access to oil and gas and mineral deposits that could make Greenlanders the next Saudis. Greenland’s coastal waters could hold half as much oil as the North Sea. Already, Exxon Mobil, Chevron and others have bought exploratory rights to the sea off the west coast, which now is ice-free for half the year. Cairn Energy, a Scottish firm, will sink the first well this year.

“Some estimates put Greenland’s oil reserves at more than 50 billion barrels. Production could happen in as little as 10 years.”

A handful of companies stand to profit immensely from the changing fortunes of the sea. Chris recommended one such company to his Special Situations subscribers on Friday. If you’re not already a subscriber and you’d like to try it out, you can do so here for $1. We’ll also send you a free copy of a special report John prepared on the subject entitled Sea Level Rise and Coastal Property Value Impacts This Decade. Just click on this link… and enjoy.

Also, just a reminder, if you, too, are a Reserve member and would like to join us down at the ranch for Chill 2.0, you can check out the website here and get more details from Marc Brown, our man on the scene, by emailing him at this address.

  The inevitable court battle over the offshore drilling moratorium has begun.

Late last week, a Louisiana judge ruled the government ban was imposed “contrary to law” and called it off. Of course, within nanoseconds, the departments of Justices and the Interior appealed. The moratorium stands, for now.

  One sure thing: BP is about as popular as W.R. Grace, the disgraced Baltimore-based asbestos manufacturer. While the media salivates over the details, BP’s PR team surely has taken to drink.

The oil spill is pushing a popular breed of tuna into extinction, for example. A recent Drudge headline suggests BP is burning sea turtles alive. Meanwhile, Rolling Stone “uncovered” another deep-water project BP is still pushing forward in Alaska… not considered “offshore” because BP built an island of gravel in the middle of nowhere before setting the drill bits.

No respite for the weary, either. The Gulf hurricane season kicked off in earnest over the weekend. Tropical Storm Alex isn’t headed for the spill yet… but it’s only the first storm of the season. Whoopee!

Shares of BP reflect this utter lack of good news. You can pick one up today for $27 — a 14-year low. While waiting for the shares to drop even further, why not take some time to enjoy this bit of YouTube satire: The BP Coffee Spill.

  Most stocks in the U.S. will fall alongside BP today.

The Chinese economy has given the world jitters once again. The Conference Board’s index on the Asian miracle belied its slowest growth rate in five months this morning. The release whacked the Shanghai Composite in the shins… its down 4.3%, the worst day in six weeks.

China’s bad juju headed west, where it collided with this sudden realization: European banks owe the ECB over $530 billion in one-year loans… and they’re coming due this Thursday!

The ECB will undoubtedly roll over these debts over, but the soft underbelly of European sovereign debt remains exposed. Greek citizens are staging more nationwide austerity protests today.

As a result, most major exchanges in Europe fell around 3%, and the euro fell to $1.22 against the dollar and 0.81 against the pound, a 19-month low. The Esperanto currency remains at an all-time low against the Swiss franc.

The S&P 500, doing its part in New York, opened down 1.7% this morning.

  Likewise, yield on the 10-year Treasury plummeted this morning, falling over 30 basis points, to 3% on the nose.

Despite all the reports to the contrary, U.S. debt remains the safe haven of choice… for now. Sounds like a good time to add to your Trade of the Decade position.

  One data point here in the U.S. isn’t so bad today, all things considered. The Case-Shiller home price index eked up 0.8% in April, says this morning’s report. That’s the first gain in six months.

Of course, we remain skeptical. April was the last chance for homebuyers to get their government tax credit. May and June should register a more realistic pulse.

  “The problem with your argument,” a reader writes following yesterday’s Krugman nugget, “is that you miss the point of why we are in a recession. Spending isn’t the problem. It was the deals that were made, and the lack of accountability. It wasn’t that loans were made; it was that loans were made to people who couldn’t pay off the loans… it was banks taking on too much risk. Blaming spending for causing this recession is completely missing the point.

“If you think that cutting spending will revive the economy, then you are in for a shock. Thousands of jobs will be lost, and that will only pull back on consumption, and in turn reduce business revenue and set up a deflationary spiral that we haven’t seen since the ’30s.”

The 5: You’re missing the point because you’re not listening. We agree with you on the risks taken. And the root causes of the crisis. We’ve been writing about them for years. But deeper borrowing and spending now only socializes those risks… and makes those who didn’t even take them share in the burden of a recovery, including future generations who have no idea what awaits them.

As we’ve been tooling around the country interviewing entrepreneurs for our next documentary, we’ve been trying to answer the question, “Where will the recovery come from?” Will it come from increased government debt? Or from entrepreneurs with fresh ideas and products to sell for profit?

“Entrepreneurs are the sole driver of economic activity,” suggested Clayton Christensen when we talked to him last Monday, holding up his right hand as if he were taking an oath. Amen.

The key however is when entrepreneurs take risks and fail, the government has to let ’em get back up, dust themselves off and start again. Otherwise, the system stagnates and grinds to halt.

  “Krugman is a person who keeps contradicting himself,” another reader writes. “I recently wrote a piece containing a list of his contradictions on various topics.

 
  “Why is Baltimore taxing bottled water?” a reader writes, picking up on an environmental theme we’ve been trying to avoid. “Simple. The waste caused by plastic water bottles is clogging landfills, and when the bottles are thrown into streams, lakes and the ocean, marine life, but especially marine birds, ‘eat’ the plastic or feed it to their young, who die from undernourishment.

“Buy a Brita or PUR filter and an aluminum water bottle. Besides, much of the bottled water is merely filtered tap water, which you’re already paying for as a municipal service.

“BTW, I’m no environmental nut, just a subscriber with a Scottish heritage who also hates to see plastic litter. Why should I pay Coca-Cola, Nestle or Pepsi for something I can have that’s cheaper and tastes as good?”

The 5: So… plastic bottles are bad for the planet. Fine. The chemicals used to produce them are the same that are used in the production of gasoline and they leach into the water at room temperature. We get it.

But why are we paying the City of Baltimore a cut of each sale for them? It’s not like city employees are picking them up after the lazy and apathetic toss them in the gutters. Oy.

Regards,

Addison Wiggin

The 5 Min. Forecast

P.S. “Cheaper private outer space access may actually be just around the corner,” our tech analyst Patrick Cox wrote yesterday. We couldn’t resist the opportunity to rise from the bottom of the ocean to the opposite extreme frontier in a single issue of The 5.

“Earlier this month, PayPal founder Elon Musk’s space exploration company, SpaceX, moved us closer to that goal. It did so by successfully launching a medium-lift rocket into low Earth orbit…

“Although many have regretted the cancellation of Constellation, NASA’s future space vehicle program, it might actually prove a catalyst for increased long-term space exploration. Rather than depending on a vast wasteful bureaucracy to design and launch rockets, the U.S. space program contracts out transportation services to more efficient startups like SpaceX.

“No more mythical $600 toilet seats. Instead of a single platform, a diversity of many smaller players will emerge in the space launch business. This is the sort of environment that cuts costs and improves performance.

“With the Space Shuttle winding down as a launch platform, SpaceX has already earned contracts to resupply the International Space Station to the tune of $1.8 billion. Full ISS resupply missions are scheduled for 2011. Following on June’s successful Falcon 9 launch, SpaceX also inked the largest launch contract in history. Iridium Communications plans to put its next-generation communications satellites in space via SpaceX and has signed a $500 billion contract with SpaceX to do so.

“I strongly suspect that if space launch costs fall enough, we will be seeing space access put to commercial use in unexpected ways. How many people saw the eventual existence of Google, Facebook or even Musk’s own PayPal back when the Internet was a small government defense network?”

Early followers of Patrick’s ideas are sitting on paper gains of 774% on one of the portfolio’s core holdings. Of course, they’re not real gains until they sell… but 774% is pretty incredible, especially considering the recommendation is a mere two years old.

If you want in all of Patrick’s game-changing ideas, like picking up SpaceX if it were to ever go public, we’ve assembled a special report on the matter, after which you’ll have the opportunity to subscribe:

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