Time to Eat Europe's Lunch

 | Mar 21, 2012 | 11:44 AM EDT
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We've got a big change going on, one that feels almost like another era, the era when America was ascendant and we had the capital and the smarts to go international.

We're not used to it. Three months ago we were negatively joined at the hip to Europe. Our financials were their financials. Our financials had to play with one hand tied behind their backs because of regulation.

Now, with stress tests passed, with the restrictions in Congress being watered down and with capital abundant, our banks are the ones who can take advantage of the near collapse of the European banking system. The capital our banks have and the lack of capital their banks have will make it so we get the business, not them. A stronger dollar will lead to mergers and acquisitions and that could be one more reason, besides the end of dilution, that the group is so buoyant. Watch Morgan Stanley (MS), Citigroup (C), JPMorgan (JPM) and Goldman Sachs (GS) to monitor this nascent trend.

It's not just services though. For years I had felt our machinery companies and our manufacturing enterprises had been playing second fiddle to the Japanese. I hated seeing Komatsu where I should have been seeing Caterpillar (CAT). It drove me crazy to see Kubota when I wanted to see Deere (DE).

I sense that's changing. The Japanese have been pushed aside by American industrial and technological might.

Then there's the ultimate in apotheosis of America, the take back of the oil and gas industry. Here's a business that, again, is reminiscent of the days of Spindletop. Last night I had a guest on "Mad Money," Don Sinclair, the CEO of a terrific little master limited partnership, Western Gas Partners (WES). This company has pipelines in places that I didn't even know we had natural gas and oil and we may have trillions of cubic feet of the invisible stuff and billions and billions of barrels of sweet crude. Because of the OPEC umbrella we can spend enough money to develop our own resources. We can change our whole energy dependence, much like Brazil did with ethanol in the 80s. We have a chance to do so and we all know it. Right now we simply lack the political will as Washington is possessed with trying to get non-surface vehicle energy to go solar, without recognizing that the big picture is switching diesel burning trucks to compressed natural gas.

That's OK, the marketplace will, in the end, overwhelm the small thinkers in Washington, allowing us to have cleaner, cheaper American fuel. Memo to Washington: this is a Bob Dylan situation, meaning come Senators and Congressmen please heed the call, don't stand in the doorway don't block the hall, because, indeed, the times they are a changin'.

Finally, aerospace. Here's an industry that we seem to have ceded to the Europeans for a moment in time as Boeing (BA) got stalled with engineering problems for the new 787 Dreamliner. Now Airbus has its production woes and Boeing's back. We will all see that come the Paris Airshow in July.

It's, as I like to say, a USA moment. We're just so gloomy we don't know it. Or at least the sellers and sidelined people don't know it. That will change over time. Consider yourself still early if you agree.


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