When Starbucks (NasdaqGS: SBUX) announced on July 1 it was closing 600 U.S stores, Big Media played it up with an apocalyptic gusto. The Starbucks meltdown was portrayed as divine retribution for our yuppie excess — the Angel of Doom descending on every street corner in America where BMW owners doubled parked for their $5 White Chocolate Mocha Frappuccinos.

Take a look at the chart, and you’ll see that SBUX looks like a massive cardiac arrest…

But there’s a much bigger part of the story that, in fact, Starbucks played down. Like a good corporate lap dog, Big Media ignored this important piece of news — depriving investors of a key piece of market intelligence that could make Starbucks a good long-term play.

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Budweiser and Busch are as American as camo seat covers in a F-150.

Yet a hostile offer by InBev SA (Brussels:INB.BR) on Anheuser-Busch (NYSE:BUD) is about to show us that the star-spangled King of Beers is up for play because it ignored emerging markets.

When you look at the dynamics behind the InBev bid, it’s important to see America as a diminished player. The headlines tell you that the economy is dismal. What Big Media rarely tells you is that smaller, developing economies are kicking our butt. American companies that count strictly on the U.S. for revenues are destined for the rustbelt of the future — or a foreign buyout.

Analysts have been badgering A-B for years that it relies too heavily on the U.S. — one of the slowest growing beer markets in the world. A-B has buried its head in the sand as InBev and other competitors have pushed into high-growth emerging markets.

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Ask yourself this…

If the U.S. housing market is at rock bottom, how can heavy-equipment maker Caterpillar, Inc. grow its sales by 13%?

The answer is simple: emerging markets.

In April, Caterpillar (NYSE:CAT) announced surprisingly strong results and a 13% surge in Q1 profits. Caterpillar’s work-around to the U.S. housing crunch is an aggressive push into emerging markets.

Countries such as China, India and Russia contributed to the company’s 30% leap in international sales. By contrast, North American sales rose a paltry 4%. Sales and revenues outside North America represented 58% of total sales and revenues in Q1 — up from 53% of the total a year ago.

Naturally, Caterpillar is increasing its commitment to emerging markets. In addition to China and India, the company is focused on the Commonwealth of Independent States — or the former Soviet Bloc.

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For the first time since we’ve compiled our index, we’ve experienced a loss. Not too bad really, given the insanity of markets everywhere.Inflation is wreaking havoc this week, ripping through emerging markets like a typhoon. Hopefully by next week, we’ll have clear skies.

Key
ALL ORDINARIES IDX (ASX: ^AORD) Australia
BSE SENSEX (Bombay: ^BSESN) India
IBOVESPA SAO PAULO (^BVSP) Brazil
EGYPT CMA GENL INDX (Cairo: ^CCSI) Egypt
HANG SENG INDEX (HKSE: ^HSI) Hong Kong
COMPOSITE INDEX (Jakarta: ^JKSE) Jakarta
COMPOSITE INDEX (Kuala Lumpur: ^KLSE) Kuala Lumpar
KOSPI Composite Index (KSE: ^KS11) South Korea
MERVAL BUENOS AIRES (Buenos Aires: ^MERV) Argentina
IPC (Mexico: ^MXX) Mexico
NZX 50 INDEX GROSS (NZSE: ^NZ50) New Zealand
IGBM (Madrid: ^SMSI) Spain
TEL-AV TASE-100 IND (^TA100) Israel
TSEC weighted index (Taiwan: ^TWII) Taiwan
SSE Composite Index (Shanghai: 000001.SS) Shanghai
iShares MSCI South Africa Index (EZA) South Africa
RTSI INDEX (RUS: RTS.RS) Russia
ISHARES MSCI THAILAN (NYSEArca: THD) Thailand
iShares MSCI Turkey Invest Mkt Index (TUR) Turkey

Our biggest winner this week is the Shangahi SSE Composite Index. We had written about it in the June 11 issue, suggesting it was time to perhaps double down. Even though it was our biggest winner, we missed the mark. It dipped 7.6% since that article.

Hold tight. Keep the faith. Our first loss is always a bruiser. Have a great weekend.

–Irwin Greenstein