The financial sector has been a strange double-edged sword in portfolios over the past two years or so. In the wake of the Lehman Brothers bankruptcy, billions of wealth was erased in what were long thought of as conservative stocks. Then the resurgence of some banks since the lows of last year made other investors a fortune, with Citigroup (C) and Bank of America (BAC) both soaring about 300% since historic lows on March 9, 2009.

The drama continues in the financial sector even now with the endless see-saw of mortgage default news and the continued worries over sovereign debt in the eurozone. Any investor jumping into financial stocks right now is really taking the tiger by the tail -- but if you do your homework, there a number of opportunities in the sector become clear -- particularly among financials in Latin America.

The hotel market may be straining in the United States and Europe under the weight of new capacity financed during the real estate boom, but the situation is much different in Latin America.

According to travel industry research firm PhoCusWright, international, regional and independent hotels are popping up all over the continent, with both large and small projects in the works to tap into growing demand in the region. In the cities, where it's tough to find real estate, old neighborhoods are "reinventing themselves," PhoCusWright reports, in order to take advantage of the market's potential.

MAJOR PAPERS:

• According to the Wall Street Journal, troubled Ohio bank National City Corporation (NYSE: NCC) is considering a plan to sell itself to rival KeyCorp (NYSE: KEY), people familiar with the matter said.
• The Financial Times reported that Lehman Brothers Holdings Inc (NYSE: LEH) yesterday said it had sent information to the SEC about possible abusive short-selling in its shares in recent days. Lehman CFO Erin Callan said the SEC was examining whether hedge funds collaborated to drive down the bank's share price in the days following the near collapse of The Bear Stearns Companies (NYSE: BSC).
• Colombia's heavy oil area could hold 20B barrels of recoverable resources, the Financial Times reported, giving the country greater reserves than leading producers such as Mexico and Algeria, according to Colombia's government.

WEB SITES:

• The Silicon Alley Insider reported that Douglas Merrill, Google Inc's (NASDAQ: GOOG) CIO, is leaving the company to become the president of music company EMI.

Oil closed above $105 for the first time in the industrial, modern, or postmodern eras Thursday, after status-quo monetary decisions in Europe and political tension in Latin America sparked both new buying of the commodity as an inflation hedge and renewed concerns about supply.

Oil, which traded at a high of $105.95, closed Thursday up 95 cents to $105.47 per barrel, an all-time record-high close.

The other major energy commodities also closed higher. Heating oil gained 3 cents to $2.97 per gallon, unleaded gasoline added 1 cent to $2.65 per gallon and natural gas climbed 3 cents to $9.75 per million BTUs.

It was all over the news today. Colombia is taking the war on drugs to the supermarket, prohibiting the sale of products made from the coca plant, including the successful energy drink from the Nasa Indian tribe, Coca Sek.

Natural coca products have been used for ages in Columbia for different remedies and to stave off hunger. The president has been promoting the natural use of coca products while magnifying the country's war on drugs with the help of U.S. aid. Lately, however, following a letter from the International Narcotics Control Board, Columbia changed its lax attitude towards the natural products as well, taking them off the shelves.

Many, of course, blame Coca-Cola Co. (NYSE: KO), saying the company was really behind this campaign as the Coca Sek started gaining popularity. Moreover, they say, why should Coca-Cola be allowed to use the extract in its drink and they shouldn't?

Coca-Cola, of course, will not reveal its secret formula and whether coke is indeed made of the coca leaves, but it is largely assumed the syrup is made from "spent" coca leaves and kola nuts. The issue was raised just two months ago as Bolivian coca growers (the plant is sacred in Bolivia) demanded copyrights on the coca name and for Coca-Cola to drop "coca" from its name.

I do find the change of heart of the Colombian president to be odd, although it's not obvious what caused it. I'm sure the whole matter, other than PR, didn't affect Coca-Cola one way or the other. Coca Sek was too small for it to worry about. And yet, is it possible Coca-Cola saw a potential risk and decided to nip the competition in the bud, before it became a threatening force?