Cara's Commentary & Community Chat, Friday, Sept. 18, 2009

bought some in my long term account as "lottery tickets" in what I think is an economy recovery. Bought ETFC at $1.77 and BEE at $2.04. I've mentioned these in the past and I think they perform the best in an economic recovery.

Up in the morning, now that's something new to behold. A couple more days of this and I'll be able to call this a dollar rebound. True to form, PM, oil, and SPX all falling off.

I think this was a good sign to fade the opening runup in the s&p. And based on yesterday's sharp reversal around 1075 I think that is going to prove to be tough resistance to break through, at least in the next few days given the large runup over the past couple weeks.

I'm watching to see the dollar rise and the markets rise. It is doing so today. I believe ultimately this will happen contrary to everyone's opinion.

Banking some profits in pm's, selling some fully. Probably too early.

Got rid of some residual WNR at $7.89 this morning. This was a leftover from a busted trade. Refiners are doing well again today. The daily RSI7 on WNR was up to 92 when I opted out.

To those here in the community who are descendant of Abraham, Isaac & Jacob
I would like to say שתהיה חקוקה שנה טובה [Leshana tova tekatev v'etachetem]!

To the rest of the community I have been laying low just scalping either DTO or PCLN both ways while waiting for the market to top. From the various Elliot Wave counts that I seen it looks like we could be nearing the latter stages of the corrective wave B up. Some see the S&P topping just over 1100. Once this wave B finishes then the catastrophic wave C down which they expect to occur would begin. We do have that gap in the S&P just below the 1100 mark which may get filled. So I'll be watching more carefully as we approach the 1080-1110 area.

[Side note: I am about 4+ days behind here on my reading. So it may take some time if I owe anyone a response to a previous post.]

I am surprised that this theory (conspiracy theory?) actually works. Couple of days back Billy came up with a gutsy call on the airlines (UAUA/AMR) and he has turned me into a believer.

the market rate:

http://finance.yahoo.com/q?s=%5EIRX

the fed funds rates:

http://www.federalreserve.gov/releases/h15/update/

the IOR rates [interest on reserves at 2/13th the timeframe of the market rate at best]:

http://www.federalreserve.gov/monetarypolicy/reqre...

at .25%, the rate for banks NOT TO LEND is ~3x the market rate.

how does that compare to the Great Depression, keeping in mind that banks create money BY LENDING?

Milton Friedman:The Federal Reserve System had been established to prevent what actually happened. It was set up to avoid a situation in which you would have to close down banks, in which you would have a banking crisis. And yet, under the Federal Reserve System, you had the worst banking crisis in the history of the United States. There's no other example I can think of, of a government measure which produced so clearly the opposite of the results that were intended. And what happened is that [the Federal Reserve] followed policies which led to a decline in the quantity of money by a third.

Bernanke: Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

http://www.wnd.com/index.php?pageId=59405

---

http://online.wsj.com/article/SB125302699911812197... [more reserves coming?]

http://blogs.wsj.com/economics/2009/09/16/fed-payi...

MPG seems to be the small hotel in favour today ...

Here is a link to the latest Boeckh Investment Letter for anyone interested, its dated 16 September.

The Fed's Dilemma : When to Tighten?

http://tinyurl.com/llu8bk

He talks about QE (Says they wont be tightening any time soon),$USDollar,commodities,Housing,etc.

Intraday, we have a "sell alert" on GLD and SLV, and a "buy alert" on UUP.

GLD RSI: monthly=66, weekly=78, daily=65
SLV RSI: monthly=67, weekly=79, daily=69
UUP RSI: monthly=32, weekly=17, daily=32

Isn't it interesting how they're an almost exact mirror?

Note it isn't quite a real alert since the monthly RSI for GLD & SLV never quite got above 70, and the monthly for UUP never got below 30. But I'd say it is darned close. The evident weakness in PM along with the dollar bottoming - we may have a trend change here. Take into account weakness in the miners - and gold may be leaving the dance floor.

ALOHA !!

Dollar up/PM down ... just in time for the T auction and the G20!

Meanwhile, at least someone is looking at the US TREASURY DAILY STATEMENTS! I guess Putin noticed the $1TRIL per month spending and DEBT.

READ ON:
Russia's Putin says US debt out of control
Russian premier Putin says US dollar issuance 'uncontrolled', calls for diversified reserves
•By Sergei Venyavsky
•On Friday September 18, 2009, 8:37 am

SOCHI, Russia (AP) -- Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.

Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.

Putin renewed Russia's call on the U.S. administration and global community to give the green light to alternative reserve currencies: "If there are several reserve currencies, this will not harm the U.S. economy in any way."
President Dmitry Medvedev's economic advisor, Arkady Dvorkovich, said Thursday that Russia would at next week's G-20 summit in Pittsburgh press for more follow-throughs on measures to confront the global downturn and to change Western-dominated international financial institutions.
Russia and China have pushed for alternative reserve currencies, but being the world's largest holders of U.S. dollar assets -- such as Treasuries -- they are unlikely to abandon it. Dvorkovich stressed on Thursday that Russia is not out to replace the dollar, but only diversify.MORE

Remember those communist domino theory countries that we went to war against in the 1960s in Vietnam? Russia and China? Remember they were helping to arm the North Vietnamese against us?

THEY'RE OUR BIGGEST CREDITORS NOW! Now they are lecturing the USA on its spending and debt! The Founding Fathers would have had Bush and Obama strung up for Treason ... Instead they both get billion dollar "libraries"!

The USA was once a guiding light for Freedom and Liberty and an inspiration to all those downtrodden in the World who sought the numerous opportunities that the US Constitution offered. Now America is but TAX and DEBT SLAVERY and a trampled Constitution that favors Crony Socialism aligned with a corrupt Banking Cartel(US FED). Putin is very reserved in his admonishments of US DEBT, but in private he must be laughing at the irony of it all ...

I am all for a strong dollar and strong America but what we have now is a complete failure of government and the work ethic that once made America great. Now the work ethic is nothing but Union handouts and entitlements at any cost! ANY COST!! Even if America and every State and City in America goes bankrupt! IOUS-R-US!

IT'S THE MONEY STUPID!

IT ALL WORKS UNTIL IT DOESN'T ...

Yes, I saw this coming and sold 50% of my miners (only one day before the peak).

Too many $ sellers out there and it should bounce, even if temporarily. I would not try to short anything though. Sitting 50% in cash.

Saw this recently: http://www.investmentu.com/IUEL/2009/September/bla...

Ken Fisher is a joke. He makes money the old fashoned way. He takes a piece of yours.

This list is a great 'inverse' list IMO.

Thanks for the update...hadn't thought of running the numbers mid-day. Do you do that in yahoo? google? or excel?
s

ALOHA !!

What has happened to America and this infatuation for PC, especially when it comes to Freedom and Liberty? Anyone ever seen and heard the goings on at the British Parliament sessions that are televised nationally? Those MPs must be laughing ...

My only objection is that Joe yelled "You Lie" and Obama should have yelled back "So do you Sir!" Because they all lie ... that's how they got elected! Put the heckler in his place ... its all STAND-UP any way! Obama blew a great opportunity to make the Nation united and scrap the two party agendas and say the truth in front of millions of TV watchers.

I personally think the Founding Fathers would have applauded Joe and then told him to resign for his part in growing the US GOVERNMENT and its DEBT. They are all guilty as traitors. How else did we get to this point where our creditors, Russia and China, are lecturing us?

Vote them all out ...

Ha no I run the numbers by looking at the various stockcharts.com daily/weekly/monthly values. No high tech involved. Its tedious but on a slow day like today - its something to do.

Good job finding an interesting stock.

Flash Orders Likely On Their Way Out; The Positioning BeginsFont size: A | A | A2:13 PM ET 9/18/09 | Dow Jones
By Geoffrey Rogow

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Flash orders, the subject of so much debate and scrutiny in recent months, may soon be a thing of the past. But that means little in the battle over high-frequency trading, which is far from settled.

Late Thursday, the Securities and Exchange Commission proposed banning flash orders, which give certain large traders sneak peeks at some market activity. While some traders say they have seen improved pricing through flash orders, critics in Congress and on Wall Street say the practice creates an unfair advantage for certain investors.

News of the likely ban on flash orders didn't create much of a stir Friday. Even at Direct Edge, the one large firm that still engages in flash orders, the practice only accounts for 5% of its matched trading volume. Direct Edge accounts for about 12% of overall U.S. stock trading volume.

The real issue the SEC is going to have to tackle is high-frequency trading - and flash and high-frequency are only slightly related. On that score, SEC Chairman Mary Schapiro has said the agency is exploring possible regulations for high-frequency trading, which involves lightning-fast electronic trades, and dark pools, which are private venues where large blocks of securities are traded anonymously.

Up next for flash will be a 60-day comment period of public comment before the rule is once again voted on. The broader debate on high-frequency will remain an internal debate at the SEC for now, as market participants on both sides of the issue push to get the SEC's ear through means including the opinion pages of major newspapers.

In the coming weeks and months, executives from high- frequency trading firms will say they are at ease with Washington's increased focus on their business, saying the improvement they've provided to stock spreads and transaction costs will come to light in a full evaluation of their business. Moreover, unlike the issues felt in the credit market, the stock market operated effectively in the past year and has never frozen.

But there is a public fervor over high-frequency that has more-traditional money managers railing against these 21st century market makers. These funds, critics say, don't hold positions overnight, canceling out the liquidity they provide and increasing volatility.

Regardless, the highly profitable practice of high- frequency trading is a much bigger deal than flash or even dark pools, making up nearly two-thirds of stock trading volume.

"They trade hundreds of thousands of names at any given time," said Allen Zaydlin, chief executive of InfoReach, a Chicago financial services technology provider that services some high-frequency firms. "But most high-frequency shops have huge volumes but few transactions, about 95% to 97% of trades are orders sent and canceled."

-By Geoffrey Rogow, Dow Jones Newswires; 212-416-2179; geoffrey.rogow@dowjones.com

I would agree that it's time to take longs off the table. But if you're trying to time entries for shorts, I think you're going to be frustrated.

Look at it this way- You can open shorts at 2-6% of the portfolio every day, and either scalp a few bucks or get stopped out for a few bucks. Or you can wait for a clear trend reversal, and open shorts at 25-50% of the portfolio for a swing trade. Which will pay off more in the long run? As well as spare you completely unnecessary emotional swings?

Bought AHR at $.85...REIT that has a lot of volume in it and looks pretty undervalued.

Shorted MTW at 10.00

Stopped out of some of my BEE at $1.96

There is so much idiocy in that article, hard even to know where to begin.

No one ever managed to explain what exactly the problem with flash orders is. No one bothered to explain what exactly the problem with HFT is - other than if you hate speculation as such and want to kill it. I have a lot to say about almost each line in that but let me limit myself to just one, to illustrate to what degree people speaking on the issue have zero clue:

"They trade hundreds of thousands of names at any given time," said Allen Zaydlin, chief executive of InfoReach, a Chicago financial services technology provider that services some high-frequency firms. "But most high-frequency shops have huge volumes but few transactions, about 95% to 97% of trades are orders sent and canceled."

Let's see...

1. Hundreds of thousand of names? How many stocks are there in US markets? Care to look it up?
2. If 95 to 97% of orders are canceled, how can they have huge volumes? Or he implies that there are few transactions with huge volume each, i.e. blocks? That's not what HFT does, and even if so - what's the problem with that? Or we want to forbid cancelling orders now? Once entered, you committed and are not allowed to change your mind? Ditto for unhappiness with them not holding positions overnight - ethical ones must do that I suppose...

I feel like in parallel universe where people can say anything with no regard to common sense, zero knowledge on the subject and no logical connections whatsoever. It's all about rage it seems. "Public fervor" indeed - whipped up by attention seekers.

PM really doesn't look very good today. And the buck isn't even going up at this point.

"It also goes without saying that the documented lies or inaccuracies of Bush dwarf anything that this guy has said."

Yes. That is the reason we gave Obama and the democrats an overwhelming victory, not because we believed Obama would present us with merely dwarfed lies. We expected change that serves OUR interests.

And you are getting change, at least to some extent. Like you I don't agree with some of the policy decisions and proposed solutions. In my view some proposals are completely wrong. But at least you have these issues being debated, issues that were totally ignored by the past administration to the detriment of our kids and to our standing in the world. Healthcare, environment, financial regulation. It was a closed shop before- no debate. That is how we got into a trillion dollar war. Now you have a semblance of debate on critical issues.

Bill,
You had an impresive blog on the H1N1 vaccine a couple of days ago that I made sure to forward it over to all of my ex peers at Dupont and GE. I am sure it has spread faster than the flu.I have 6 little ones and very worry about them. Reuters just reported that Med Immune will be the first vaccine out and will be distributed to 90,000 state health, retail chains and doctor's office...I will post this article in next blog. Another article came out this morning and they don't recommend the nasal vaccine for young or the elderly, so who exactly goes to the State Health offices when they are sick and w/o insurance.
http://tinyurl.com/muk96o
JoeAl
Friends, sorry aboth the acronyms, the 2000 is when I retired and I will never forget that date, it was my freedom from the big C's.

I just noticed that the NG spot price fell 9% today according to http://intelligencepress.com/. The intra-day up move in UNG also seems to have stalled. So I have just re-opened a UNG short at $11.70, slightly above the point where I covered the previous short earlier today. There is also still about 5% premium remaining in UNG, which should disappear by the end of next week as UNG issues the new shares. Placed a buy to cover stop at $11.91, at the recent high for November NG futures.

Closed AHR at $.89 - only was a day trade.

Closed MTW at $10.00 - I'm mainly using this as a short term hedge because of the volatility and high beta.

bought at $3.55. They are a BDC like ACAS but are much healthier and are breaking out today on higher volume than usual. Also at a 52 week high, yet down considerably from it's all time highs in the $20 range.

Bought a few SPY puts as protection against my long positions. Bought $107 Puts expiring in October for $2.64...just being prudent...

TOF...you were spot on with your call on rotation into higher quality stocks like PG and KO...both had nice moves this week.

the man Jim sincliar who i hold in High esteem, has seen his own stock TNX/TRE collapse. it has done nothing but go down for over a year now, it was recently delisted from the S&P gold index

the late day move will be met with cries from his supporters that its the time to buy... they will buy thing until it reaches zero.

jturner, thankx for posting that interesting article on the Denver Gold Show. Mention of several takeout candidates, and of institutional fund managers taking a quick course on the gold sector !

http://tinyurl.com/mb5fqx

Brief article from Huffington Post. Apparently September 25th is the decision date for Feds appeal. Then we will see if the Obama administration is real in their calls for transparency and openness or if the buck stops at HB&B and the "potentially irreparable harm" they might incur if this FOIA request is approved. To be honest, I'm quite concerned that they won't "do the right thing" and stop trying to play the public for fools.

Amazing how media coverage of this case has been VIRTUALLY NONEXISTENT!

All of which, while true or not, is not relevant to what is now happening. The Black Plague was probably worse than the Swine flu, but is history as is Bush.

Pelosi, Obama the Wall St. crowd — are trashing our nation and future generations will be stuck with the bill for their crimes.

An editorial in our local paper this AM was an indictment of the behavior of Acorn as shown in the hidden videos, but ended with a lament that Congress was cutting their funding because,"...they also did a lot of good."

We should not excuse anyone's actions because others have done bad or some good was done along with the crimes.

Knife - I noticed that too. It has also used the 50 DMA as a base in its entire run up.

One other thing on a fundamental side: they have a Book Value of $8/share. In their most recent divestitures they have sold on average for about 98% of book value. Assuming a 98% return on all investments yields a Book Value of about $7.84/share. In the past decade they have typically traded at about 20 to 30% above book. Assuming they only trade at book I can see at least a double from here.

The thing that makes me most bullish about this is the insider buying, which has been going on during this up move...

FWIW, in the 10 trading days from 9/3/2009 to 9/17/09, both indices made 10 consecutive days with a higher high, until today.

(a) Bev posted this link:

http://tinyurl.com/kvtp5y

(b) SiO2 pasted one response from the Comments section, which I am reproducing in part below:

"This does not matter - the Big Banks will not let the "market" drop. I was bearish until it occurred to me that elevated stock prices are just part of the bailout/recovery plan. This is the only way to explain the sudden reversal in the stock market in March, the disproportionate rise of stock prices relative to the economy and earnings, and the lack of any significant correction in spite of continued underlying bad news.
Except for small downturns to make it look realistic, there will be no significant correction because the Big Banks will prevent it. In return for the fed/gov’t bailout goodies, the Big Banks were required to start moving the stock market up in March and then keep it up. Now after establishing huge positions after filling in the crater during March lows, all they have to do is fill in the pot holes to lure more investors in and keep the market moving up. They can start cashing out when the herd starts jumping in to prevent an obvious bubble, but not enough to trigger a sell off. This is also their restitution for screwing the middle class, and it helps prevent substantial market reform and regulation since negative public sentiment is subsiding.
In return, the Big Banks get recapitalized through equity offerings and investment/trading gains, and the ability to make huge profits on their new loans using free money from the fed. They also get bigger as smaller banks, which were left out of the deal, fail.

For some reason, this guy's take resonates with me. It smacks of a real-life response (by HB&B) to the market drop last fall.

Thank you for taking the time to explain.

Who knows which way it's gonna go. Pour yourself a bourbon, enjoy your life, and give this one a listen...

http://www.youtube.com/watch?v=KOxq8F0wDkM

KC

http://www.youtube.com/watch?v=dVC2cszdTao&feature...

http://www.youtube.com/watch?v=fVXYzcb3r-w&feature...

From the Monongahela Valley
To the Mesabi iron range
To the coal mines of Appalacchia
The story's always the same
Seven-hundred tons of metal a day
Now sir you tell me the world's changed
Once I made you rich enough
Rich enough to forget my name

Results for MaxPain are attached. I have a lengthy post on this but it got lost into blogland.

2nd...thanks for posting. I've never heard that song and my family is from that area, just south in East Liverpool, OH. Both of my grandfathers worked in the mills and my dad did during college. It's been a recession in those parts for a long, long time.

Amen...

ALOHA !!

IMF selling 403 tons of gold ... It'll never see the light of day on the open market.

Complete hoax and illusion!

Did I get that right? They are selling the gold to help the "poor"! Its the IMF that made the poor ... poor!

I would better guess the gold is being sold to plug the holes in the IMF's own Balance Sheet! What a con job!

Further, starting in 1999 the Washington Agreement signed by 11 central banks allowed for the sale of 500 tonnes of gold annually(about 100 tonnes more than the IMF sale)up until 2004 then the agreement was revised and extended another five more years until Sept 27, 2009 for the same 500 tonnes of gold per year, yet look what the gold price has done since 1999. Just imagine what will happen to the gold price if on Sept 27th, which is in about ten more days,the Washington Agreement is NOT renewed? That would mean that central banks are indicating they are either sold out or leased out or they no longer wish to sell gold any more. SEPTEMBER 27th!!

Then you have to ask yourself why would anyone want to announce plans to sell gold prior to selling if you wanted to maximize your gain? I would sell first then announce it!

I have been following central bank sales for many years now and I have yet to see one pertinent fact mentioned whenever central banks announce their sales and that is WHO WAS THE BUYER ... You hear all day long Gordon Brown sold the UK gold but you never hear who bought it ...

Now if you want to believe that when a central bank wants to sell 100 tonnes, which is 3.2mil ounces on the open market either through the COMEX or LME then the inventory/delivery would need to swell by 3.2mil gold ounces. The COMEX total gold ounces combined is around 7.1mil ounces. I think someone might notice a 3.2mil ounce delivery for one day(half the COMEX) and so far that has never happened, so WHO WAS THE BUYER? More than likely the central bank and IMF gold sales are purchased by other nameless central banks.

No matter how you slice it these central bank and IMF gold sales have been great for making the price of gold go up since 1999.

KC- LOL. You're right. What's wrong with pain, anyway? Without it, none of us would get much done, feel much pride about what we've accomplished, or be driven to accomplish more than we would otherwise. Pain gets a bad rap. What needs to get a bad rap is the expectation of (worse, a feeling of entitlement to) a pain-free existence.

Mr Mortgage discovers that substantially lower equity + 20% down + 6% realtor fees = many, many more existing homeowners are unable to "move up" - or even "move across" - than we currently imagine. He writes:

"Unlike the bubble years when zero down or a 100% HELOC after the purchase in order to replenish savings was the norm, today’s buyer has to sell for enough to cover the Realtor cost and the 20% down needed to buy most mid-to-high end houses using new vintage loans. Most analysts look at the reported negative-equity figures as the tipping point — it’s not.

If homeowners can’t sell for enough to pay a Realtor 6%, extract the down on the new property, and pay for moving costs they are effectively in a negative equity position. Homeowners know this — a homeowner that has only 15% equity knows they are trapped in their house. We are still learning what this realization does to spending habits, as the focus for many becomes ‘how do I earn or save my way out of this’.

When looking at neg-equity if you move the bar down to 90%, 80%, or even 74% (6% Realtor fee + 20% down) then it changes everything. The vast majority of homeowners in the nation become stuck (see chart below). Without these existing homeowners active in the real estate market, we will never find a true bottom."

More detail at:
http://mhanson.com/archives/236

Bring Back Bubble Financing! Have the government insure it against loss. What could possibly go wrong?

G'day Jack, am afraid I don't have an answer for you, but like you said the other day, its a shame, because I thought it an interesting question too

:)

All the best
Ad

ALOHA !!

Please have a look at this recounting of MELTDOWN USA told in photos and quotes by the main characters responsible. Please note that those who created the SUBPRIME mess and those who were most involved in BANKING the SUBPRIME and had the most to lose if they did not get bailed out, got it all wrong from day one. Is that a coincidence or did they have a hidden agenda? Some of these quotes go back to 2004.

LINK: http://www.newsweek.com/id/215371?GT1=43002

Link provided by the Cunning Realist ...

By the way, these same people who failed to predict the entire US financial collapse are the same people still in charge of the so called "recovery" even though we elected a new President who promised a CHANGE!

ELIMINATE THE US FED ...

http://ronsen.blogspot.com/2009/09/saturday-mornin...

The where, the what, and the why...from my perspective.

Special thanks to a (unnamed)medical colleague who has sent me a subscription to "The Economist".

Loannetter,

I recently read there was a $7,800 loan in 2008 which must be paid back over a 15 year period (though the IRS). Picture how these people would feel with the $8,000 hand out this year.

Is this true?

Well worth 9 minutes of your time. He's certainly fighting the same good fight.

http://market-ticker.denninger.net/

There are many voices across America and the world speaking out now. But what I think needs to happen is some kind of alliance between the many voices, pooling resources and energy. The sum of which would be greater than the individual parts.

Think about it

Paul, Cara, Spitzer, Ratigan, Denninger, Murphy, Turk, Schiff, Rogers, Beck - just to name a few. There are hundreds more

Imagine the resources a united front could tap. One united fight would be much harder for the 'masters of the universe' to ignore.

Just a thought

Is there any conceivable way the RSI tool could be expanded to include stocks of other exchanges around the world at some stage in the future?

Or are there costs or other issues involved that would prove prohibitive?

Just curious as I dream of having access to such a tool for the ASX200/300

Frank Langella is always worth watching.

Grym -

I'm not from the greatest generation, probably more 2nd's, but have always had a very strong belief that your generation embodied the very best of what America has struggled for since its Reveolution. Like you, I believe that a good measure of that unity has been not so much immediately lost, as just slowly fractionalized away by narrow individual interests. My father served in WWII and was never a complainer either...if he had a job to do, he just did it, and then accepted the responsibility for it "wherever the chips may fall", as he used to say. What a difference from today, when it's so obvious that those that nearly brought (and may still bring) the world to it's knees have taken absolutely zero responsibility for their actions, and further, sought (and succeeded) in enriching themselves at the expense of the multitude of us - that would be the "We the People", us.

I love trading, but I will say that I have redoubled my efforts these last few years primarily as a means of self defense against my own financial system. Kaimu (thank you as always for your many excellent posts) posted a link to a newsweek slide show. A quote from said link:

"Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich." James Grant.

Or as it's been said before: "Socialize the pain, privatize the gain."

The greatest generation was clearly not perfect, as only to be expected from Lincoln's "imperfect union" slowly trending it's way towards a hopefully brighter future, but it seems to me that those greatest Americans were just mostly on the same side, all pulling on the same oars - today I feel our boat is beached, at least temporarily.

I want diversity - I want truth tellers - I want agitators, like Bill and Kaimu, 2nd, Craig, et.al, helping people to wake up, remember their history, and not be conned in order that we may make a better future for us all.

"It was the best of times, it was the worst of times..."

Gyrm, I thank you and yours for your service.

BRILLIANT! Thanks Olaf.

ALOHA !!

aiki100 posted - "Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich." James Grant.

Now I doubt that Michael Moore's new movie will come to that conclusion ...

PERFECT ... I also thought that was the best quote mentioned. I wondered if anyone would pick up on it. When the US government allows risk to be socialized then CAPITALISM is just a bygone dream, Now we have CRONY SOCIALISM, where politically well connected companies get "risk guarantees" and who could be better connected than the member banks of the US FED. Since they OWN America's money they can dictate terms to any sitting US President and Congress any time they want to ... AND IT WILL BE DONE! Its the ROTHSCHILD SYNDROME all over again and again ... wash, rinse, repeat in every country in the World.

ELIMINATE THE US FED ...

No American generation can ever become great again when we are all divided politically and imprisoned into DEBT slavery!

Grym,
The 2008 tax credit was $7500 with a payback period correct. Essentially an interest free loan. The $8000 tax credit of 2009 is a gift that can be taken over a couple of years as I understand it. The tax law has not been released to tax accountants last time I asked. Check with your tax advisor as always!

Here's the link http://www.irs.gov/newsroom/article/0,,id=204671,0...

Thanks. Just curious.

I have no plans to move. Been here 42 years and too much stuff accumulated. My wife says we should get rid of stuff so he kids won't have to.

I say let them take what they want and bulldoze the rest over me;-)

I always identify with the George Carlin bit about our "stuff."

I discovered yesterday(accidentally) that the Cara RSI Tool also works with stocks listed in London. e.g.

HGM.L HOC.L PAF.L NGL.L MIRL.L GSK.L HSBA.L RDSB.L CCL.L

Thanks Kaimu. Well I support you, because money is truly only a unit of productivity if we don't refocus on getting back to that above all we're screwed.

About the statement: "Its the IMF that made the poor...poor!"

Before, I had no context to understand this. How do providing loans hurt those poor countires? I used to think that we are the productive ones on a level playing field, thus that explains our wealth differential. Well, not exactly.

I like the following 5 minutes of video -

http://www.youtube.com/watch?v=yTbdnNgqfs8

TIME 825-1320 in video: Our job was to convince other countries to take huge loans,say Ecuador to take huge loans of $1 Billion, to build infrastructure, which would only serve the wealthiest people... A few of their people would get really wealth as would ours, but they are stuck with this huge debt. Eventually, they would have to spend 50% of their budget for debt service. We tell Ecuador since you can't pay off your loans, we need you to turn over your rain forest to our oil companies" Is it about building empire. It is resources we covet. When we - the economic hitmen- fail the CIA will come in as in Panama...the jackals are sent in...try to foment coups...or assassinated (as in Chile, or Guatemala). If we fail and the jackals fail, as in Iraq, the final step is to attack, and we send in our men and women.

(and more if you want)
1900-2020 I was the economic hit man. Other men were designing transmission lines, distribution systems, etc. The majority of the people working for those organizations are not economic hitmen, they are technicians designing systems. Most of the people are in the dark about this. The system is amazingly subtle and incredibly effective...

(Ben) So Barack put us all together in a room. Tim and I chaired the meeting, but we were open to all comers. Warren was invited. Bob Rubin was there, Larry Summers. All the bankers, of course. We had 750b on the table... No one wanted guns in the streets. And no one wanted another Spitzer with a six-gun and an attitude... We settled at Dow 10000 by October. It had to be October, and October had to be a good month. Obama wanted JohnQ in a good mood on the anniversary of the crash.

Zach - You might enjoy reading 'Confessions of an Economic Hitman' by John Perkins. Here is the blurb from Wiki

"Covertly recruited by the United States National Security Agency and on the payroll of an international consulting firm, Perkins traveled the world—to Indonesia, Panama, Ecuador, Colombia, Saudi Arabia, Iran and other strategically important countries...Perkins reveals the hidden mechanics of imperial control behind some of the most dramatic events in recent history, such as the fall of the Shah of Iran, the death of Panamanian president Omar Torrijos, and the U.S. invasions of Panama and Iraq."[1]

According to his book, Perkins' function was to convince the political and financial leadership of underdeveloped countries to accept enormous development loans from institutions like the World Bank and USAID. Saddled with huge debts they could not hope to pay, these countries were forced to acquiesce to political pressure from the United States on a variety of issues. Perkins argues in his book that developing nations were effectively neutralized politically, had their wealth gaps driven wider and economies crippled in the long run. In this capacity Perkins recounts his meetings with some prominent individuals, including Graham Greene and Omar Torrijos. Perkins describes the role of an EHM as follows:

Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign "aid" organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet's natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.

yes, that Video is of the author :)

The short play book is World Bank loans big -> asinine development plans/no bid contracts -> eventually country can't pay -> IMF (ie Wall Street and Treasury) comes in to save the day -> loans money in emergency -> implements SAP (structural adjustment programs) that privatize resources, allow foreign ownership, cramps all govt spending (social programs)).

Anyway, it seems like most people are traders here. I think this has a lot of implications for that because you can bet the same great thinking is going to go on here internally. There is no way a public option flies for healthcare. Look for pieces of public infrastructure to be rapidly privitized. Oh, and there is no way JPM goes bankrupt :) Stuff like that.

ALOHA !!

Speaking of the IMF and the US Treasury and America, the Global Police, I came across a link to a prior Empire's narrative written by George Orwell back in 1936. One I have mentioned here before, SHOOTING AN ELEPHANT. Its a fairly short essay, but to me explains Empire from the point of view of the Empire's foot soldiers who must without question carry out the dirty deeds that Empire forces onto itself from just the sheer weight of Empire always having to look so Empirical!

To me this explains the dilemma of Empire in which the only possible outcome of Empire is total loss of Freedom and Liberty. This was well understood by our Founding Fathers yet not the least considered in Washington DC today. That is where America is headed and the DEBT aspect is only part of the equation, as Orwell here addresses the human toll of Empire. This took place in Burma.

Here is the last paragraph. The very last sentence says it all.

"Afterwards, of course, there were endless discussions about the shooting of the elephant. The owner was furious, but he was only an Indian and could do nothing. Besides, legally I had done the right thing, for a mad elephant has to be killed, like a mad dog, if its owner fails to control it. Among the Europeans opinion was divided. The older men said I was right, the younger men said it was a damn shame to shoot an elephant for killing a coolie, because an elephant was worth more than any damn Coringhee coolie. And afterwards I was very glad that the coolie had been killed; it put me legally in the right and it gave me a sufficient pretext for shooting the elephant. I often wondered whether any of the others grasped that I had done it solely to avoid looking a fool.

LINK: http://www.netcharles.com/orwell/essays/shooteleph...

Now how much of what happens in Washington DC and the US FED today is done "solely to avoid looking a fool"? What if, in private, Obama and Geithner look at each other and say this ... Geithner says: "Man Barrack, this is a frickin' mess and God knows what the hell will fix it! I have no clue what money is going where and whether it will do a damn thing to change anything!" Barrack says back: "Yeah, well whatever you do don't let the public know we're clueless!" I mean at some point FDR must have thought, "Thank God we're in WW2!" It's HIT HARD AND HOPE time in DC! It was only after LBJ was dead and the LBJ tapes were made public that he confided in 1969 in those tapes that the Vietnam War was lost, yet he committed another 100,000 troops to battle any way! So 60,000 American kids died just so US Foreign Policy could "avoid looking a fool"! Peace with honor is what Nixon said ... LBJ died a broken man ... As the leader of the American Empire in Southeast Asia LBJ had no choice ... no Freedom to be honest. Freedom is lost at the highest levels and choices few. Its an Empire thing ...

"The closed-door policy is one of the root causes of our wars.-Ludwig Von Mises

BUYING TIME ...

Wonderful last sentence.

I just finished reading "The Korean War," by Max Hastings and this sentence pretty much summarizes the whole mess.

Granted, when taken in historical context there was a generally accepted belief that communism was a united and global threat — that Soviet and Maoist adherents were out to take over the world. Recent post WW2 annexations by the USSR were enough to convince most important westerners.

But Syngman Rhee was little better than the most vicious leftist dictator and saving face kept the military slaughter going through months of "Peace Talks" ending with the 38th Parallel as both beginning and end with no gains to either side.

It set a pattern for US involvement in Viet Nam and once again in Iraq. The similarities are many, the differences few.

"Our enemy's enemies are our friends," is a poor justification for major military action.

My dear Grym, yes I can suggest a better place to start: get corporate money out of politics.
Every reform idea I hear kicked around over a pint of Guinness or a cup of coffee has one fatal flaw, and that is the mischief wrought by a flood of corporate monies.
The ability to drown out, dilute, side track, confuse, or outright sabotage legitimate debate is the direct result of our present system of access for sale.
Imagine where the homeless would be if they could lend the use of Lear jets to congressmen....
Ciao, Z.

And speaking of holes, let's look at a huge one that is looming at the FDIC. Institutional Risk Analytics (IRA) is maybe the premier bank-analyst service in the country. IRA takes the data from the FDIC and crunches it with their own set of risk parameters. While the FDIC has a little over 400 banks on its current "watch" list, IRA gives 2,256 banks an "F." They project that over 1,000 banks will either fold or be taken over during the current cycle. To date in 2009, a total of 92 banks have failed across the country, compared with 25 for all of 2008, according to the FDIC. 900 more to go. Ouch.

http://www.frontlinethoughts.com/pdf/mwo091809.pdf

critical information ahead of time... funny how life imitates art... was just watching the ' Minority Report ' with Tom Cruise...

loannetter, Vassal to Lord Freddie and Lady Fannie,

FYI, FHA just adopted components of HVCC including the prohibition of mortgage brokers ordering appraisals.

Cheers.

Yes, I noticed that the best questions are not answered on this blog.
Let me take a shot on your T-bill observation and it stems from my research at the M3 anomaly I observed.
The US Money Market founds lost their FDIC insurance recently. That generated a massive withdrawal from MM and an influx of money into stocks, gold, and your T-bills. IMHO, this explains the recent surges in stocks and gold and drop in T-bill yield. I don't know if it explains the M3 drop issue.

http://www.reuters.com/article/bondsNews/idUSN1721...
http://theburningplatform.com/groups/quinns-daily-...

So, I would not consider that bearish, the opposite, such yields are usually very bullish. And I expect another surge back after a minor pullback as $USD is making a minor rebound lately.

Coincidence - After Amazon's "orwellian moment" of snatching back from thousands of Kindle's all the copies of 1984 which had been sold without copyright authorization, I tried an experiment.

I looked for Orwell works to buy on my Kindle, to see if I too would be subject to an "orwellian moment". I downloaded Orwell's essays, and stumbled upon "shooting an elephant".

The essay is still there. Very powerful, as are many of his essays. AND Amazon's ability to snatch back "books" from thousands of kindles holds a good lesson too.

Amazon was able remotely to turn on, activate cellular connections to and execute commands on thousands of kindles. Kind of like shooting thousands of elephants at once. Just so Jeff Bezos wouldn't look like a fool?

Perhaps somebody can help me on this. I would like to play the market on the short side as maybe a few others may like to do now and I was thinking to use the short index ETF's like SDS, QID and SFK. However, when I analyze them on the few days when the market has gone lower, there seems to be much less upward price movement of these particular ETF's than with their counterparts SPY, QQQQ and IWB when the market heads higher by say the same amount.

And if this is true then what might be the better solution shorting the long index ETF instead of buying the short index ETF?

http://ronsen.blogspot.com/2009/09/of-cats-and-sec...

Have a good one.

So Grym, you're not being accurate here.

Our friend Barney was not head of the banking committee during the time when he and his then-boyfriend were together (1987-1998). Frank only became banking chairman in 2007, long after his boyfriend had left Fannie, and after they'd broken up (also 1998). And after 1994, the committee was run by Republican leadership. Think the Repubs paid much attention to what a gay jew from the liberal northeast wanted? I'm guessing, not so much.

Now let's review how you described what happened: "Barney Frank, as head of the House Banking Committee, allowed his live-in boy friend to be paid a percentage of all Fannie loans issued."

A Fox News piece supports my chronology of events:

http://www.foxnews.com/story/0,2933,432501,00.html

WASHINGTON — Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

I think that this response stays on point to 'social equity.' I would simply point out that meddling by our elected leaders, Frank, etc, in agency business has generally resulted in worse policy decisions by those agencies than would otherwise be the case. It seems to me that giving congress greater control over our purse strings, i.e. the Fed, monetary policy, would lead to a greater disaster than that which is to fall. It is an indictment of the population's ability to recognize and act on long term problems through the ballot box. This is a profoundly sad statement, but notice too that our founding fathers did not give a direct vote to the people (electoral college). I'm not so sure that things have changed. The vast majority of the population, I'm sorry to say, would rather have 'a beer and a ballgame' as opposed to thinking about problems that will cripple this nation and our children in the long term.

What you are saying makes sense in principle, vote the legislature out of office, but we have the vote now and Frank and others get reelected over and over. The legislature always gets reelected by promising the world to narrow interests, at the expense of larger issues. Perhaps it is partly the result of blatant 'gerrymandering' that occurs on the federal and national levels. The constitution calls for something like 'compact and contiguous' election districts. It has been interpreted by the courts up until now as being totally in the the hands of the legislature (a political decision). Too bad, if legislative districts had to be 'little squares' it would weaken the power of incumbents.

Good morning.

COST - Upgraded to Outperform @ William Blair

Downgrades:

AMAT - to Average @ Caris & Co. PT Lowered from $16 to $14
POT - to Hold @ Soleil

New:

WMT - HSBC Initiates Coverage with an Overweight. PT = $61

CTSH - PT Raised from $37 to $49 @ Credit Suisse. Outperform

deleted - duplicate post - internet explorer = bad browser

PT Raised:

DIS - from $32 to $34 @ Barclays. Overweight
NOK - from $13.50 to $14 @ Barclays. Equal Weight

My guess is, this PM "shakeout" has everything to do with the dollar. Remember how Bill said we should watch to see if gold had strength if the dollar were strong? Well, gold isn't having any of it. The linkage still holds - dollar up, gold down. And as gold goes, so goes silver, but with a multiplier attached.

So the trick is, how far will the buck go? Its coming from some pretty oversold territory, so it might have a ways to run. There's resistance at 77.50 and at 78, but we're only at 77.25 right around now.

I've seen gold have some bad days. Today doesn't look so bad, actually - only down 11.

You still long that one TOF? That one looks like a fun trader - decent volume and pretty volatile... in addition to being a potential longer-term lottery ticket.

Sold BGZ at $21.41 that I bought on Friday at $21. Sold SPY $107 Puts at $3.1 that I bought at $2.80 avg

I liked the MCGC story- started accumulating this morning too- average cost around 3.45. Will give it some room with a stop around $3.25 while seeing how it plays out...

so I don't really know what happened. What exactly happened?

Also, I stepped up and bought some more PAL in the low 3's.

I try to buy PAL in the low 3's on weakness and keep hoping that each upmove will be the big one but usually I just sell most of it into the move.

Wassup yall?

Added more at $3.43.

What a joke,

Last week I took note of the Standard and Poors reports on a few airlines stocks.

AMR - last time I checked, think it was last Wed, they had a target of $5
This morning, they have a target of $10.

CAL - last time I checked, definitely last Wed, they had a target of $15.
This morning they have a target of $22.

AMR 5 -> 10
CAL 15 -> 22

I didn't save the old S&P reports, so I can't compare but I'm pretty sure they just rejigged the model factor and multiplier to pump out the new pricing!

WHAT GARBAGE!

I did a lot of thinking on BAC over the weekend and I think this is a good time to start scaling into in the money calls that expire at least a few months out. After reading through DFS's earnings report I have come away with a more optimistic outlook on BAC. Believe it or not, this is a good environment for credit card issuers because of the low interest rates. Not only is their cost of doing business very low with low interest rates, but they have been able to raise rates on their loans because of higher default risks. That means the spread between the rate they borrow at and the rate they lend at is basically at all time highs.

BAC reports earnings on October 16, options expiration. In the past month or so, the stock has essentially traded sideways around $17. However, I believe they will crush estimates of roughly break even on the 16th. If I were a gambler, I'd be betting heavy on the October calls, but being more risk averse than a gambler, I'm looking to scale into $15 calls expiring in at least January as I think this stock has room to run to about $22 in the short term.

Thanks to Zero Hedge for posting,

Looks like the stocks with the highest short % have been out performing those with the lowest short % (and similarly highest borrowing cost stocks vs lowest borrowing cost stocks)....since Sept 1 (Russel 1000 data)

http://www.zerohedge.com/sites/default/files/image...

Bought my first Jan $16 Calls on BAC. Only bought a few at $2.77. I'm going to keep this to a max of 7% of my portfolio and plan on buying a few at a time over the next week or so.

As of right now I'm bearish in the short-term. S&P looks like it will have trouble making a higher high today, which will make two lower highs in a row (after a string of 10 higher highs on S&P).

Just went long some TZA and FAZ. Looks to me the bounce of the morning lows was mostly fading the gap and now prices have stalled. I think we could be setting up to consolidate for awhile.

on a moderately quiet down day. something to watch.

Also C daily and 60 min chart shows price is currently back testing the wedge breakout and could be executing a bull flag formation.

SRS finally did enough of a retracement today and hit my sell limit order today at $9.50 for the shares that I purchased at $9.05 then sold at $9.10 and the re-purchased at $9.13. The position size was very small (as usual), but hopefully it is just the beginning of a larger move in SRS. $USD seems to be in a clear uptrend channel since Thursday, and if that channel up continues, the equities should keep going down.

I also sold today at $1.91 1000 shares of ESLR that I acquired on Friday at the cost basis of $1.50. How did I do that? :) A few months ago, when ESLR issued more shares and collapsed down to $1.80, I sold 20 contracts of September $2.50 puts on it for $1. That's why I wasn't too eager to buy more ESLR during its recent weakness -- I knew that I will be acquiring 2000 shares anyway at the end of September at a very good cost basis.

I just placed a sell stop limit (stop 1.81, limit 1.8) order for the remaining 1000 shares that I acquired at $1.50. If ESLR keeps moving up, I'll keep moving up this stop order.

Now I understand. And I figured out how to access the chat that usually follows. Don't know how you do what you do Bill, but hope you keep it up!