You won’t read this in the newspapers. But the global liquidity crisis–which just a couple weeks ago was shaking the very foundations of modern capitalism–is now showing real signs of working itself out.

To be sure, there are still plenty of things to be worried about. Even A-rated utility companies are paying yields 400 basis points more than Treasury paper to issue bonds, nearly three times the spread a year ago. Other investment grade companies are being forced to offer bond yields of up to 10 percent, and some desperate non-investment grade securities are paying 15 percent and more.

Other guideposts, however, are pointing to a calming environment. At the top of the list is the London Interbank Offered Rate (LIBOR), which has fallen to its lowest level in more than a month, though it’s still well above historic norms. The so-called TED spread, measuring the difference between yields on three-month Treasury bills and the three-month Eurodollars contract as represented by LIBOR, has also come off its highs, though it, too, remains at elevated levels.

Ultimately, the best guarantor of an end to the liquidity crisis is the unprecedented commitment of global governments to unfreeze lending. On Sept. 29, Republicans in the US House of Representatives played a losing game of chicken with the markets by refusing to pass President Bush’s plan to inject USD700 billion into the troubled banking system. The titanic crash on Wall Street later that day was all it took to get everyone back to the negotiating table. And since that time every move made by governments–from dogmatic free market conservatives to unreconstructed socialists–has been to pump money into banks, and by extension the broad economy.

Thus far, we’ve seen everything from outright nationalizations and national governments taking direct ownership positions in banks to blanket guarantees of the financial integrity of money market mutual funds and bank deposits. This week, the US Federal Reserve cut interest rates again and Congress began debating a massive new stimulus package.

My view remains the US financial system will ultimately follow the path of the US utility system over the past half decade. The US government will eventually cede its ownership interests in major institutions–likely at a profit–but will maintain much tougher regulation of the system than before. Finance will again be a good business, just not a great one where everyone’s goal is to become a millionaire overnight.

For now, however, there’s clearly a commitment to keep throwing everything possible on the fire to unfreeze global lending and revive global economies. It may take a lot more to get the job done, and it could well take a few more months of pain. But sooner or later, this fire is going to flare up into a mighty blaze.

That’s the easy part. What’s a lot more difficult to discern now is just how weak the global economy will get before that happens. And until there’s a lot better visibility, markets are going to be vulnerable to more selling.

What we have today is basically a bifurcated marketplace. In Group A, we have what investors run to when they’re deathly worried about the health of the global economy. That’s basically been the US dollar and investors’ preferred way to own it, US government-backed Treasury bonds. In Group B, on the other hand, there’s pretty much everything else, from US stocks of all stripes to emerging markets, energy and other commodities and bonds not issued by the US Treasury.

Right now, fear rules and group A has the upper hand. Group B in contrast is the best buyer’s market since at least late 2002. There is danger, but there’s also staggering opportunity, and it’s selling for a song.

By far, the world’s biggest and surest opportunity for outsized growth over the next decade is the need to build a new 21st century infrastructure. The opportunities are myriad, ranging from builders and operators to resource players and innovators of all manner of technology. And the players are a varied lot as well, ranging from super strong global giants to relatively small innovators.

One of the longer-term consequences of the recent financial meltdown is a diminished appetite for risk, for businesses, consumers and governments alike. We’re also likely to see more focus on saving and debt reduction, rather than the borrow-and-spend ethos that seemed to pervade the last few years.

That’s not good news for companies focused on consumer spending. But it’s the best possible news for the kind of companies that tap into long-term infrastructure projects. Their fees are paid by governments and other large entities, making them literally recession proof. That security will attract investment dollars, further driving down their cost of capital and rewarding their shareholders.

Our pledge at New World 3.0 is to bring the best players in the most compelling opportunities to your attention. When you subscribed to this service, you received three bonuses. One is the book Massive Change, written by Bruce Mau and the Institute without Boundaries. This is an excellent introduction to some of the changes now reshaping the world for everything from energy and transportation to information, manufacturing and the military.

The second is the Field Guide to the $21 Trillion Pie, which highlights companies that are tapped into the unprecedented investment opportunity these changes represent. The third is Pitfalls and Traps, which focuses on a few investment rules we’re following to create our New World 3.0 Portfolio.

Once you’ve taken in these bonuses, you’re ready to use this advisory. The centering element of every issue is this Viewpoint column, where I’ll be laying out our overall direction on a continuing basis.

Clicking on the New World 3.0 Portfolio tab takes you to our current holdings, which we continue to build on from week to week. Stocks are cheap now. But this isn’t the kind of market that rewards a strategy of buying in all at once. 

Rather, we’re gradually building on our holdings every week, with the goal of ultimately having 25 to 30 first rate companies in three general groups. Red, White and Blue lists US-based companies that are using their current market dominance to establish equally strong positions in 21st century infrastructure. Beyond Our Borders features similar companies domiciled in other lands. And Cutting Edge Tech offers up the innovators that are most likely to make change happen.

As you check out the site, you’ll notice a queue of featured articles on the left side titled On the Beat 3.0. My editors and I rotate a new article here every week, each focused on the author’s expertise. These are later archived in the lists on the right hand side of the page, and can be accessed under each author’s name.

New Portfolio picks are drawn from these articles as they appear. Subsequent developments are spotlighted in New World Alerts, found in the top center of the home page, as well as the blog entries on the far left side.

Since my last Viewpoint, we’ve featured two On the Beat articles. In Water Infrastructure, Yiannis Mostrous highlights the world’s overwhelming need for safer water supplies, and the immense investment opportunity providing it. Our favored play and new Portfolio addition Hyflux Water Trust (OTC: HXWTF) is particularly tapped into the parched Asian markets.

The other On the Beat article, Mr. Keynes Returns to Washington, is written by politics and policy editor David Dittman and keys off our featured graphic of the week, WPA By the Numbers. The government bailout of the banking system won’t be the last step taken to revive the economy. And massive projects to rebuild our rotting infrastructure have already been discussed at length during this election by all parties. Note featured graphics from prior weeks can be found by clicking on Multimedia in the On the Record section in the middle of the homepage.

This week also features my own piece on the unfolding negawatt revolution, along with my Portfolio offering this week, advanced meter leader Itron (NSDQ: ITRI), now trading at its lowest price since early 2007 despite torrid growth since then. Advanced meters are the key for boosting efficiencies at utilities of all stripes worldwide, and the company’s product line and rolodex are formidable.

As always, I welcome your comments about New World, and particularly on our posts in the Salon. We also offer the opportunity to comment on every article in the issue.

Thanks again for giving us a try.