Morning Call
[7:36am ET] Trading opened this New Year on a bullish note as the US Dollar plunged -0.81 during the early hours from a high of 78.59 at 2:30am ET to a low of 77.78 at 6:20am. As INO.com had pointed out, the March Dollar had closed lower on Thursday, ending a two-day short covering bounce. However, they believed the high-range close would set the stage for a steady to higher opening this morning. Although Stochastics and the RSI indicators pointed to a short-term slide this week, other indicators had hinted at a higher opening today.
I believe the jury is still out as to the Dollar’s direction this week, and that will be the key indicator of how commodity and equity prices will start the year.
INO.com says that March Dollar “closes below the 20-day Moving Average crossing at 77.38 are needed to confirm that a short-term top has been posted, but that if the March contract renews the December rally, the 38% retracement level of the 2008-2009-decline crossing at 79.72 is the next upside target. First resistance is last Tuesday's high crossing at 78.77. Second resistance is the 38% retracement level of the 2008-2009-decline crossing at 79.72. First support is Tuesday's low crossing at 77.67. Second support is the 20-day moving average crossing at 77.38.”
That’s a pretty good set up I’d say. The fact that spot gold popped from 1100 to a high of 1118.81 at the same time the March Dollar plunged earlier today is not too important as Silver lagged the move in Gold during that lift. The real move in precious metals and commodities and equities will come in the opposite direction to the Dollar break out.
CTA Trading Desk Report
We hope everyone had the opportunity to spend some quality time with family and friends, celebrating the many gifts bestowed upon us. For those of us using the time to recharge our batteries, preparing for a frenzied trading environment, I guess normal markets are destined never to return in our lifetimes!
Today's session was like so many we have witnessed over the past several months; a low volume spurt to higher levels within the first hour of trading, with the remainder of the day spent meandering around in an extremely tight sideways consolidation. If you didn’t come in long, or reach to buy the +1% opening gap higher, there was really nothing to do except observe the subsequent dull price action. As we have noted before, sometimes the hardest thing for a trader is to have the patience to step aside, and watch the festivities from afar. If your set up isn't materializing, we say do not force the trade, simply stand aside; opportunity costs are much easier to recover from than real capital losses.
While the S&P (+1.7%) has pushed above the top of the box, bordered by 1080 to 1120, we prefer to wait for three consecutive closes above a level before concluding the upper boundary has been conclusively been taken out. With volume in the S&P e-mini running approximately -50% below normal it is impossible to ascertain whether this break out will stick. Time will tell but if upside action continues the next few higher targets are roughly 1160, and just under 1230; the first target is where the advance off the July 2009 lows will be equal to the first leg up from the March 2009 lows; the second target is the .618 retracement of the entire bear market move (1576 to 666).
Gold (GLD +2.3%) and crude oil (USO +2.42%) had nice pops higher to start the year, aided by a weaker US Dollar (DXY -0.44%) and the conviction of some money managers that commodities (priced in dollars) must rise over the long term.
One of the only losers over the past year has been historical and implied volatility (VIX -7.04%), as intra-day and day-to-day movement has been steadily compressing, with most traders acknowledging something is suspiciously dampening price movement, but unable to forecast when the situation will revert back to a more normal activity. We do know Bulls may be overstaying their welcome once the VIX breaks 19, as in most prior periods (the Greenspan liquidity driven 2003 to 2006 markets an exception) the VIX oscillates between 18.5 and 35, meaning risk is beginning to be priced at very low levels. On the weekly VIX charts there are now 4 positive RSI divergences against lower prices; RSI-7 low of 23 on June 26 with the VIX hitting a low of 25.76; higher RSI reading of 25.54 with the VIX dropping to a low of 23 on July 24; an RSI reading of 34.3 with the VIX dropping to a low of 20.98 on October 16; and last week the RSI only hitting declining to 36.4 while the VIX was hitting new yearly lows at 19.25. With the price of portfolio insurance plummeting, now may be a good time to consider purchasing a bit of long-term protection just in case there is a lurking "event" about to unfold.
Have a great evening.
Comments
Cara 100 Ratings Changes
Good morning.
Upgrades:
BA - to Overweight @ Barclays
BA - to Buy @ Jesup & Lamont. PT = $63
INTC - to Outperform @ Robert W. Baird. PT Raised from $24 to $26
----
GOOG - Price Target Raised from $680 to $810 @ FBR Capital. Outperform.
MICC - Citigroup Initiates Coverage with a Buy.
"Timothy Geithner Meets Vladimir Lenin"
January 4, 2010
"Timothy Geithner Meets Vladimir Lenin"
John P. Hussman, Ph.D.
“The best way to destroy the capitalist system is to debauch the currency.”
Vladimir Lenin, leader of the 1917 Russian Revolution
What is FNM/FRE suppport effect on SRS?
I had been thinking of going back to the inverse real estate (SRS) because of the unavoidable mortgage losses coming, but....
This is from Jon Hussman today: http://tiny.cc/EPQrl
"From the standpoint of the financial markets, we can anticipate an increase in mortgage delinquencies in the coming months if only from the combination of high unemployment, high loan-to-value ratios, and a gradual movement into the heaviest portion of reset schedule on Alt-A and Option-Arm mortgages written at the peak of the housing bubble. That this will result in true credit losses is virtually certain. Whether or not this leads to fresh reported credit losses depends on how much latitude regulators allow in maintaining current (substantially written-up) values for securities that are not delivering the underlying cash flows."
Question:
How will SRS react? Anyone?
Ambrose Evans-Pritchard airing his thoughts for 2010
Japan hyperinflation, Yen crash, an EU cliff dive all on his to do list:
http://www.telegraph.co.uk/finance/comment/ambrose...
FWIW
GL in 2010
Re: "Timothy Geithner Meets Vladimir Lenin"
Wow... someone digs deep... :) This quote is a historical curiosity. Some attribute it to Lenin, some to Keynes; no one ever found it in any of Lenin's works, and Keynes himself attributes it to Lenin but without any reference, just by "Lenin is said to have declared..." Doesn't really matter, just one of those things that linger forever unresolved :)
Watch out for NVDA Grym... red in a green market and: "NVDA Broadpoint AmTech Cuts NVDA to Sell from Hold, price target: $14"
Cara 100 Update
BRCM - Upgraded to Outperform @ Wells Fargo
Downgrades:
BMY - to Hold @ Citi
EXC - to Neutral @ Macquarie
INFY - to Underperform @ Wells Fargo
XOM - to Market Perform @ Raymond James
First eco-numbers of the year
(US) Preview: Dec ISM Manufacturing Index due out at 10:00ET
**consensus expectations:
- ISM Manufacturing: 54.3e v 53.6 prior (estimates range between 52-56).
- Prices Paid: 57.2e v 55.0 prior.
Re: "Timothy Geithner Meets Vladimir Lenin"
ALOHA !!
Grym posted - "“The best way to destroy the capitalist system is to debauch the currency.” Vladimir Lenin, leader of the 1917 Russian Revolution
It seems the quote was printed in newspapers in 1919 derived from an interview with Lenin.
From the American Economic Association:
One frequently quoted passage from the work of John Maynard Keynes is that “the best way to destroy the capitalist system [is] to debauch the currency.” The passage, attributed to Vladimir Illyich Lenin, appears in Keynes' book The Economic Consequences of the Peace, which became an international bestseller when it was published in 1919. Economic historian Frank W. Fetter and others have expressed doubt that Keynes was really quoting Lenin because they found no such statement in Lenin's collected published writings. Fetter suggested that Keynes based his remark on stories about what the Soviets were supposed to be saying that he heard at the Paris peace conference of 1919. It is now possible to show that Keynes based his remark on a report of an interview with Lenin published by London and New York newspapers in April 1919. Keynes' discussion of inflation in the Economic Consequences can then be read as an extended commentary on the remarks attributed to Lenin in the interview. While the report of the interview was not reprinted after 1919, it will be also shown here that Lenin responded to Keynes in a speech that was reprinted in his Collected Works.
Cara 100 Update (Final)
BMY - target upped at Government Sachs. Shares of BMY now seen reaching $26. MJN split will boost the company's earnings. Neutral rating.
Re: Ambrose Evans-Pritchard airing his thoughts for 2010
ALOHA!!
Let me see if I get this right ...
The US Dollar rallies, which kills US exports, while the only way Japan survived the 20 year old Japanese deflation was "exports"! Can the US Treasury have "your" cake and eat it too? Sure it can! Without income(tax receipts) how can you pay your debts(outlays)? At the US Treasury they pay debts with more debt! In fact "debt" is on the "asset" side of the Balance Sheet, whereby debt is now income. Welcome home George Orwell!
After reading that report all I could hear my brain saying was "LIABILITY ... LIABILITY ... LIABILITY ... LIABILITY ..." When I look at the World in terms of a huge Balance Sheet all I ever see are "liabilities", so we must be in a "LIABILITY BUBBLE"! On both a public and private level I see nothing but "liability" exposures. The one "asset" I see is that due in part to the SubPrime and unemployment the private sector is either dumping debt or paying it off and saving more, which would be great, if we did not have the US Treasury and US FED PRICE FIXING. By buying up the toxic debt that the private sector is "dumping" at inflated levels the US FED and the US Treasury are "freeing the banks from losses", but those losses are still losses, only unrealized. The gamble is that the PRICE FIXING can be carried on long enough for the economy to recover and thereby unemployment to abate so lending can return. In the meantime banks lose the "revenue" from those foreclosed homes while the US Treasury gains more debt ... more liabilities ... to keep the LIABILITY BUBBLE growing. In order to compensate for the revenue losses at the banks they gamble and inflate the stock market(especially their own shares). Then the cost to PRICE FIX for the US Treasury is enormous debt that grows at rapid rates. Once again that is a "liability" ... What I see at the US Treasury is that Congress is outspending US citizens, picking up the debt slack, which still must be serviced. The service of that debt is siphoning off capital for essentials like infrastructure. It is a vicious debt spiral as more debt is required to maintain the infrastructure at optimal levels.
As usual another pundit who sees the greatest debtor Nation in human history coming out on top. Somehow the World economies collapse and there are riots in the streets of London and Paris and Beijing but still the US Treasuries love affair continues. With what spare cash is a destitute, Great Depression 2 World suppose to use to buy US Treasuries, which will require multi-trillion auctions just to pay interest on the debt?
When the HOUSING BUBBLE burst did people run out and buy houses? When the TECH BUBBLE burst did people buy up tech stocks? When the DOTCOM BUBBLE burst did people buy up CMGI and Pets.com? When the CREDIT BUBBLE burst did people run out and buy BAC and LEH and even GS? So when the LIABILITY BUBBLE bursts will people go run out and buy "more" liabilities or will they seek "less" liabilities? One of the biggest debt and liability derivatives is the US Dollar. In simple terms the US Dollar is a "Store of debt" not "value"!
Its a monetary crisis, but nobody dare label it as such ... As I see it we have been in a monetary crisis since 1913. What else do you call it when the purchasing power of a US Dollar declines by 96%? If the value of your stock portfolio declined by 96% would that be a "crisis"? Most sane people would say, "YES", but somehow when it comes to the money in your wallet it's never a crisis. This is why I am of the opinion that Americans suffer from Stockholm Syndrome. Our captors, the US FED and our Congress, dictate our reality and we have all become quite comfortable with that over the past 97 years.
The official definition: "Stockholm syndrome is a psychological response seen in abducted hostages, in which the hostage shows signs of loyalty to the hostage-taker, regardless of the danger or risk in which they have been placed."
Re: "Timothy Geithner Meets Vladimir Lenin"
Thanks for the heads up on NVDA. I hadn't seen that, but have raised my stop to protect a gain.
I am sick and tired of controlling attitude.
This morning I am trying a new asthma medication. My former one of 20 years has been discontinued to protect polar bears. I can't do much about government intrusion in my life, but have vowed to shoot the next polar bear that comes into my yard! :-)
Re: "Timothy Geithner Meets Vladimir Lenin"
Kaimu, Vad,
I don't know if anyone has said it, but wouldn't an extension of the Lenin quote be the best way to take control of a country is to buy enough shares to become management?
It has occurred to me that just as the institutional equity investors have crowded out individuals to the point where it is far more difficult to influence corporate policies...
The mass of debt held by foreigners make it likely we could see corporate boards packed with Chinese or others, and simply inserting their own management teams in US corporations.
Trades Today
OSIS
Sold some OSIS that I bought on Wednesday for a small gain. I think the move to buying full body scanners will not be fast enough or big enough to move this company, which has over $600 Million in annual sales, although it is still not that expensive of a stock.
BAC
Bought some Feb $14 Calls at $1.77.
IMMR
Bought more at $4.67; I still like this one long term as a play on touch screens in all electronic devices/platforms.
KNDI
Bought at $5.01; sold half at $5.45.
AIB
Watching this one? Anyone else in it? I thought bsi was in it. There doesn't appear to be much overhead resistance until around $5.
Re: "Timothy Geithner Meets Vladimir Lenin"
Grym,
I'll leave it to others to comment on that, not my area of expertise really... I prefer to limit myself to setups, entries, exits, risk management and other insignificant aspects of trading, with only occasional excursions into social rants. The only thing I have to say on this topic is this:
If I owned a whole lot of debt issued by a burly armed to the teeth neighbor with good weaponry skills, powerful enough to be a useful suburb resident if he is healthy and being put on the edge of his very survival if I exercise my rights, would I
a) try to corner him by exercising my rights with no regard for consequences for him or
b) try to negotiate and find the way to derive the most from my financial position while guaranteeing his survival - providing he himself takes according steps to improve his situation of course.
I know I'd pick option b.
Back to my setups, entries and exits :)
My pick for 2010 PM stock of year- UXG
I started accumulating at an average of $2.25. I will continue buying on dips, no chasing up. I have a stop in place for profit protection.
Why I like it: Will release, in the first quarter, results of Nevada drilling. Will release results of Mexican drilling in second quarter (I have to check that for confirmation).
The Mexican property may be better than expected from what I hear. I think the risk reward on owning this stock is very good, I can't see it falling out of bed because CEO McEwen owns such a large percent of the company. I can't project an upside target but some estimates give the metal value something like $30 per share. This could be exaggerated but, with McEwen running the show, I place a very high value on his expertise, one of the best in the industry.
I think this is a great speculation play for a small investment. I would be glad to hear anyone else's opinion.
gold rally
Bought back half my gold miner put writes: GG, AEM at around the magic 50% profit level. Still keeping UXG and the AUY puts - UXG is close enough to a breakout (with a forming ascending triangle) at 2.60 that it's worth holding onto just in case, although the resistance looks formidable.
I'm noting the move in gold today came entirely premarket, and it's faded all day long, which always makes me worry about how sustainable the move might be.
Re: gold rally
"I'm noting the move in gold today came entirely premarket, and it's faded all day long, which always makes me worry about how sustainable the move might be."
It is very rare for gold to rise at all in NY as there always seems to be a not-for-profit seller lurking about. Here is a good article that charts how gold is suppressed specifically during NY trading...
http://tinyurl.com/yb2jrth
Re: gold rally
we have seen many times before where gold's gains occur pre-market followed by steady declines during trading hours,
the moves tend to take the POG upto the past few sessions highs before a gradual decline followed by a sudden swoop down towards the close.
what we saw today has all the markings of a classic trap with a large upwards move pre-market, followed by a dip right at the open and then a quick burst upwards before a gradual slope down the remainder of the session.
note how the USD hovered just below the targets mentioned in bill's post (77.38 i believe)
without a follow through on this and a real turn down in the indicators for the USD this will be nothing but a bounce before the grind back down towards $1000.
as always, we'd like to see strong volume with follow through on the miners or this means a whole lot of nothing.
best of luck to everyone 2010!!
Flatliners
Prices not moving, TRIN not moving, TICK moving only between 0 and 400. I cannot remember that I have seen this before.
Any paid subscriptions?
Does anyone here pay for monthly services that you feel are very beneficial to your trading and would recommend to others? I was looking at briefing.com which gives you real time alerts and other pay services like the Kirk Report to see if other people here feel that they provide real value which translates to real $ in your portfolio? Thanks
Re: Any paid subscriptions?
stockcharts.com is good. Have you looked at http://finance.yahoo.com/marketupdate/inplay for new information??
Re: Any paid subscriptions?
Thanks Kyle - No I hadn't seen that - you just saved me $50/month :)
GERN news
It had a nice pop 10 minutes ago, but don't see any news.
Re: GERN news
14:33 GERN Strength attributed to report that study on Imetelstat shows it may benefit patients with brain and prostate cancers (5.90, +0.35, 6.31%)
Re: GERN news
Thanks Vad. I'll take the 10%.
Re: Any paid subscriptions?
Believe some others go with tradethenews.com but I've found that the inplay news works OK....
Re: Any paid subscriptions?
For the last couple of months I have subscribed to Stops&Targets which is fairly new to the web. My experience has been good so far but two months is not enough time to recommend it. It's not too useful for very short term traders and even the short term trader would get bounced around quite a bit. The algorithm was originally designed for institutions supposedly and is better for swing traders and long term players.
GS is upgrading any stock with a letter in it
BAC is upgrading anything that GS forgot about.
C is upgrading every company that JPM forgot to upgrade.
DB is upgrading and recommending every company that C neglected!
Almost all stocks are hitting session highs or 52 week highs!
If it looks like a t@rd, and smells like a t#rd, it must be a t....
Don't get me wrong, I'm all for letting the Humongous Banks and Bookies trying to suck everyone into their well orchestrated equity traps, but I'm going to cash out today and let the suckers ride this January rally!
Last one caught hold the bag...shoot out the lights!
Inquiry into Goldcorp in Honduras
My daughter works for the NGO which commissioned the environmental studies underlying the case against Goldcorp in Honduras. Here is the Guardian's article from last week:
http://www.guardian.co.uk/environment/2009/dec/31/...
Does anyone know the situation or truth behind the allegations? Should "dad" take the other side, or agree with his daughter?
Re: GS is upgrading any stock with a letter in it
don't let your emotions get in the way
How much longer can they keep this up?
And when will they be bored enough, and positioned to the heels enough, to sell the crap out of this market again to profit again? at this unrelenting 1.5% daily pace we are going to Dow 15k pretty soon.
What is the next manufactured "black sqwan" event hb&b is conjuring up to profit on the way down?
Why are avg joe's not liquidating their phony valued stocks?
Is this all a dream? am I dreaming this?
Re: How much longer can they keep this up?
I just read Rosenberg this am and according to him, avg joe is not participating, but rather has been "rebalancing" bought net 350b in bonds and net redemptions of 4b in stocks and equity funds last year and 213B in US the year prior.
Joe Average selling into the rally, look elsewhere for who is buying: Institutional money, mutual funds. ????/
Re: GS is upgrading any stock with a letter in it
My emotions are completely in-tacked.
But when the Humongous Banks and Bookies are offering free koolaid to everyone, I've learned enough in the last three years to step back and let them drink it first!
Nothing is free, not even their advise, when it comes to HB&B!
Re: How much longer can they keep this up?
NYUGrad,
What I have been reading indicates the average Joe have been selling (mutual funds) and buying treasuries. Most individuals and businesses are NOT going to be buying much of anything. They are paying down debt for the first time in years. There is little capex spending.
The huge cash pile waiting to go into equities is a myth also.
http://contraryinvestor.com/mo.htm
What we are seeing in the indexes is due to the kabuki staring the Fed, Treasury Dept and the too-big-to-fail crowd.
http://hussmanfunds.com/wmc/wmc100104.htm
DOW 15,000 or whatever it goes to is an unreal continuation of the scam of all eternity.
I am not one qualified to lecture on the value of patience since I am as angry as anyone with the lies and pretense of it all.
But... IMO this is not a time to be taking chances. Go back and read what Bill, Vad and a few others have said about letting the market come to you and watching for a trend.
Re: How much longer can they keep this up?
Keep in mind that since mid October the market is only up about 3%. I know it's been frustrating trying to figure out what is going on but after the initial 7 month rally the market hasn't been going straight up. It seems like that after a day like today, but it really hasn't been going that way of late.
Re: Inquiry into Goldcorp in Honduras
Hola Jock, you've probably looked at Golcorps' website, mainly emphasis on "quick and dirty".
Your daughter is probably right. We Canadians tend to hire people to do the work, without enough scrutiny.
This will not be the first tome a Canadian miner has run into a problem, and any of us who has attended the conferences at the Royal York in Toronto has heard the horror stories. Canadian companies control 60% of the mining here in Mexico, but how much real supervision is involved ?
Not much.
This is not the first time.
Allen
Re: Inquiry into Goldcorp in Honduras
Hi Jock - Tell her to look at sampling below Mammoth Hot Springs - south of Gardiner, MT - must be a Super Fund site just above there, i.e Yellowstone National Park. Lots of other examples non-criminal cases of elevated metals, nitrates etc. in water domains. Expect the GG property is in an area of significant oxididation in the country rock of a graben enviornment in the Tegucigalpa volcanic center with associated hot springs not unlike Mammoth Hot Springs - by the way of good place to visit in Jan. / Feb. time frame. Happy Trading
Thanks again Bill for your heads up early in 2009 on TCK - took nice gains this fall and hold a bunch for free so to speak.
How to Get your Congress Bod's ATTENTION!!
I just did something Grover says not do: use capital letters!
Read: Five tips from Grover Norquist
The anti-tax advocate gives his advice on how to write Congress.
http://www.congress.org/news/2009/11/13/five_tips_...
3 Day candles
Noted CTA comments....on 3 consequetive closes up to confirm....
I have been using 3 day candles, and that really takes the noise out of things, give it a try.
Pimco cutting back on US and UK debt
"We don’t think the Fed is going to tighten any time in 2010, but long before the FOMC (Federal Open Market Committee) actually does the deed, it will have to change its language. That could very well happen in 2010, and there is genuine uncertainty over how quickly and strongly the market will anticipate a tightening process. Our gut feeling is that the moment the Fed changes any one of its words, it’s going to be a very unpleasant experience, because the marketplace has very little patience and a very big imagination. The most important book at the Fed right now is a thesaurus, and it’s probably sitting on top of Paul Samuelson’s Foundations of Economic Analysis."
http://www.pimco.com/LeftNav/PIMCO+Spotlight/2009/...
http://www.telegraph.co.uk/finance/economics/69311...
Pimco is playing a very cautious game portfolio wise entering the new year. Too many uncertainties.
NOW WHAT?
ALOHA!!
Okay ... NOW WHAT?
SWEET MOTHER OF GOD!!!
The US PUBLIC DEBT subject to limits went up $166.5BIL USD in one day and it happened on the very last day of calendar year 2009. Remember when the US Congress raised the debt ceiling by $290BIL to $12.394TRIL USD well the gross US PUBLIC DEBT on Thursday went up to $12.311TRIL. They are literally $83BIL away from crossing the new limit and it only took a week! The net US PUBLIC DEBT subject to limits now sits at $12.254TRIL USD.
At this rate the US Congress will need to raise the US PUBLIC DEBT ceiling next week! How embarrassing and perhaps this is why the POG shot up today!
Let me add that there are two line items like a Hulk Hogan tag team for GSE. There is the new line item entitled "GSE Obligations/HFA Initiative" and also the old line item "GSE Investment". Well then its the "GSE Investment" turn to add another FNM and FRE $15BIL USD TARP2, so in less than a week total for both line items is over $30BIL USD. Perhaps another reason why China wants out of "agency debt"!
Also on the last day of the year the "Three Horsemen of Entitlements" outlays, Social Security, Medicare and Medicaid, were nearly $27BIL in one day.
Also, again on the last day there was almost $5BIL USD spent on "US Treasury interest".
We also saw some big Defense and Military Active Duty outlay numbers near the $9BIL USD mark.
By the way, how much tax revenue did the US Treasury take in on this day? Right at $9BIL USD, just enough to cover the Defense and Military outlays only. The rest of the $177BIL USD the US Treasury spent on that day was not covered.
Lets see how did all that get paid for? All total for all US DEBT issued on December 31st the US Treasury created $525.3BIL USD of debt! Here is the breakdown:
MARKETABLE US TREASURY
BILLS = $86.3BIL USD
NOTES = $121.5BIL USD
NON-MARKETABLE US TREASURY SECURITIES
GOVERNMENT ACCOUNT SERIES = $316.8BIL USD
Total US DEBT issued over a three month time period for FY 2010 is $13.9TRIL USD. That is roughly $4.7TRIL per month.
Lets look at the total breakdown so far for FY 2010.
MARKETABLE US TREASURY
SHORT TERM ONE YEAR OR LESS = $1.452TRIL USD
LONG TERM OVER ONE YEAR UP TO 30 = $613BIL USD
NON-MARKETABLE US TREASURY SECURITIES
GOVERNMENT ACCOUNT SERIES = $11.8TRIL USD
Let me just say this about the "marketable" US Treasury debt issues, which total nearly $2.1TRIL in three months time. At the current rate we are allowing our Congress to create debt at the rate of one TARP($700BIL) almost every month for FY 2010. Who needs HANK PAULSON, in fact he was a miser compared to Obama and his US Congress.
Another perspective is that the US Treasury, in three months, has issued total debt of $2,042USD for every man, woman and child that now lives on planet Earth! That goes along with the 4.2 shares of Citibank for every person on Earth! In three months time every American now owes $45,086USD each. What is $13.9TRIL divided by 308 million?
I have never seen US DEBT jump this much in one day EVER! Considering that one day it is no surprise that the POG went up $25USD and the USD tanked.
I am supposed to be preparing for the CTA CONFERENCE 2010, but I am just mesmerized by the staggering debt load the US Treasury has created. This is unprecedented.
"Government is essentially the negation of Liberty." -Ludwig Von Mises
Re: Pimco cutting back on US and UK debt
ALOHA!!
Les - What caught my eye over at PIMCO was this at the bottom of the interview.
Make sure you read it all because this is what PIMCO will point to in the event they start seeing class action lawsuits. Obviously a lot of these "loopholes" are already well known here at the Bill Cara blog, especially what PIMCO attorneys say about the CPI.
Past performance is not a guarantee or a reliable indicator of future results. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and while generally supported by a government, government-agency or private guarantor there is no assurance that the guarantor will meet its obligations. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Currency rates may fluctuate significantly over short periods of time and may reduce the returns of a portfolio. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity.
High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Build America Bonds issued by state and local governments are taxable issues. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. Government. Certain U.S. Government securities are backed by the full faith of the government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value.
The Consumer Price Index (CPI) is an unmanaged index representing the rate of inflation of the U.S. consumer prices as determined by the U.S. Department of Labor Statistics. There can be no guarantee that the CPI or other indexes will reflect the exact level of inflation at any given time. It is not possible to invest in an unmanaged index.
This material contains the current opinions of the author but not necessarily those of PIMCO and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800.... ©2009, PIMCO.
What you just read is the definition of the LIABILITY BUBBLE!
More from GERN
Tuesday, January 05, 2010 7:30:23 AM
Geron Corp Journal publishes positive data on telomerase inhibitor in Glioblastoma
- This preclinical data demonstrates that telomerase inhibitor drug, imetelstat, inhibited telomerase activity and reduced tumor size in xenograft models of glioblastoma, and inhibited the activity of glioblastoma stem cells in culture. The data, authored by Geron collaborators at the University of Texas Southwestern Medical Center at Dallas, were published in the January 1, 2010 issue of Clinical Cancer Research.
- CEO: "Cancer stem cells pose an additional therapeutic challenge. These data add to the growing list of cancer types where the inhibition of cancer stem cells by imetelstat has been shown preclinically. We will further investigate imetelstat's anti-cancer stem cell potential clinically in our Phase II trials in breast and lung cancers, multiple myeloma and chronic leukemias that will begin later this year."
IVAN The Terrible
Full Disclosure: I don't know what to make of this stock and most likely won't touch it at all or will day trade it IF clean setup appears. Daily chart looks very intriguing but over the years I've seen this one behaving erratically on what seemed to be a good chart. So, for you research types just throwing it out there, together with fresh news:
Tuesday, January 05, 2010 7:45:25 AM
Ivanhoe Energy Inc. (USA) Commences drilling first appraisal well in the Pungarayacu Field in Ecuador
- Spud its first appraisal well, IP-15, in the Pungarayacu field in Ecuador.
- IP-15 is the company's first appraisal well to be drilled in the Pungarayacu field, believed to be Ecuador's largest known accumulation of heavy oil.
- The well is expected to be drilled to approximately 1,300 feet (400 metres) and operations will include capturing valuable core data from all identified oil bearing zones. Drilling and coring will be followed by an extensive logging and testing evaluation program and may continue into February 2010.
- State-of-the-art evaluation equipment and coring methods will be employed and steam equipment will be used if lower gravity oil is encountered.
- Ivanhoe will provide updates as key results are received. Completion of IP-15 will be followed by drilling and testing of additional wells in different areas of Block 20, three of which are already permitted. Permitting for 20 additional wells will begin in January 2010.
- An independent review completed by Gaffney, Cline & Associates estimated that within the 250-square-mile delineated portion of the block, and within the formation of primary interest, the Hollin, there are 4.3B barrels (low case), 6.4B barrels (mid case) and 12.1B barrels (high case) of original oil in place. Ivanhoe Energy Ecuador holds a 100% working interest in the contract for the exploration and development of Block 20.
Re: How to Get your Congress Bod's ATTENTION!!
Loannetter,
First of all let me say I hope a million people who've never written before will do so and ask their friends to do it too.
However, don't expect the addressee will ever set eyes on it.
I wrote letters which match the Grover Norquist advice for over three decades. Then, my last letter (no swearing, no caps) was obviously and intentionally insulting.
"As Chairman of the House Small Business Committee you have done a remarkable job, Since taking office (and even staying far longer the the three term limit you promised) most businesses are much smaller and many have evaporated all together."
I got the usual boiler plate, "Thank you for your interest in the unemployment situation. Congressman Manzullo is aware and very concerned about it also."
At least twice I can remember receiving replies to topics I had no interest in at all.
The best we can hope for is the "con" pile weight to get someone's attention.
Edit: Frankly, they will most likely only get action if tied to a rock and thrown through his window :-(
CTA re Vix comments
What vehicle do you use to buy some insurance the vxx?
Iceland faces crisis
I find it refreshing that little Iceland has a leader big enough to "face a crisis" head-on.
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http://tiny.cc/nXzoT
REYKJAVIK (Reuters) - Iceland's president refused on Tuesday to sign into law a bill to repay more than $5 billion lost by savers in Britain and the Netherlands, forcing the issue to a referendum and stirring fresh turmoil in the crisis-hit country.
"It has steadily become more apparent that the people must be convinced that they themselves determine the future course," Grimsson told a news conference.
Only once in the republic's 65-year history has a president, whose post is largely symbolic, refused to sign a bill into law. The constitution requires the issue to be put to a public vote if the president refuses to sign.
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I wonder if they have room for one more. (I'll wait to see how they vote.)
Cara 100 Ratings Changes
Good morning.
Upgrades:
QCOM - to Market Outperform @ JMP Securities. PT = $60
POT - to Outperform @ Credit Suisse. PT Raised from $40 to $45
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DELL - Stifel Nicolaus Initiates Coverage with a Buy. PT = $18