Cara's Commentary & Community Chat, Mon., Apr. 13, 2009

Good morning.

AMAT - Coverage Resumed @ Piper Jaffray with a Buy. Price Target Raised from $ 10 to $14.

BA - Price Target Lowered from $60 to $52 @ Jefferies & Co. Buy Rating.

GOOG - Price Target Raised from $390 to $410 @ Oppenheimer. Outperform Rating.

INTC - Price Target Raised from $11 to $14 @ FBR Capital. Market Perform Rating.

I believe the website was posted before. This seems to be becoming a "clearinghouse" if you will for HB&B transgressions. The person states his purpose and his sources. I do not believe this to be gratuitous in that much of what he states is preaching to Bill's choir.

Bill,

There is no question this is so. But is the next midterm election too far away?

People have short memories. Congress knows it and may just continue the stimulus charade with an occasional rant against a scapegoat like AIG.

It looks as though we are living in a two-tiered reality:

In Washington Congress and the White House are talking about improvements in the economy — more housing sales, bank earnings up, Europe enthralled with Obama, happy days not here again, but around the corner with recovery late this year.

Down here at the bottom people are hurting — nearly everyone I talk with has a sad story and increased fear to relate. A former client told me Saturday his son's job in Milwaukee is in jeopardy. (He's in his 50s.) Another said Friday his company is at 55% of last year's business and he just had his benefits cut. drastically.

There needs to be a vertical connection and action now or we will continue downward in the US and globally.

I'm hoping the "Tea Parties" will have an impact.

I recall the stock rally starting after Pandit's internal memo was "leaked" talking about record profitability in the first two months. At the time, I thought that this was spin and that the first quarter numbers might instead show a loss. Now I'm hearing (no stronger than rumor) that Citibank will indeed take a loss when they release numbers Friday morning. If that turns out to be true, I'm speculating that it may knock the steam out of the rally as they realize the good news they've been buying on is just a new pack of lies.

Reading this article about what could have happened if Washington had done nothing except provide robust FDIC assurance to taxpayers, I'm left wondering if Washington was willing to deal with the devil and trade transparency for more power. (whether they can wield that power better is an open question).

http://www.financialsense.com/editorials/casey/200...

I give politicians less credit for being bunglers and more for being schemers.

ALOHA !!

Thanks BILL ...

Is CHINA and its governor of the Peoples Bank legitimate enough? I guess so, since they are our creditors, if that means anything to anyone any more ...

The global Nations met at the G20 and decided that a HAPPY FACE is best right now. I personally don't buy it! On April 15th Americans across the USA will protest "business as usual" on TAX DAY ... I also believe the global community is tired of USA "business as usual". You know ... its just so damn "tired and boring"! The same people Dems and Reps keep yapping about the NEW WORLD and CHANGE yet what is NEW about US GOVERNMENT manipulation and interventionism? That's the same tired and boring story that's been repeated by Dems and Reps for decades now. B-O-R-I-N-G !!!

The difference between Americans protesting in the streets and CHINA protesting our money is NIGHT AND DAY! What CHINA wants to do with the US DOLLAR makes US citizens protesting in the streets about taxes look like Sesame Street! Now not using a US DOLLAR for trade ... that's REAL CHANGE! Thats NEW WORLD ... but keeping FIAT is B-O-R-I-N-G!

Here is what CHINA is saying and doing ...

FROM REUTERS and AFP:

"Finance officials from Beijing in Moscow on Thursday(4/9/2009) held a videoconference to discuss the creation of a “supra-national reserve currency,” the latest evidence of the support China is getting from developing countries as it seeks to replace the U.S. dollar as the world’s main reserve currency.

This controversial proposal – and the support that it’s getting – also underscores China’s continued emergence as a growing global force in both the financial and political arenas. That’s a trend that successful global investors won’t be able to ignore.

The recent torrent of criticism to swirl around the dollar began with remarks by Chinese Premier Wen Jiabao. Speaking last month at a press conference leading up to the recent Group 20 meeting in London, Premier Wen voiced his concern about the value of China’s large holdings of U.S. Treasuries.

“We have lent a huge amount of money to the United States,” he said. “Of course, we are concerned about the safety of our assets. To be honest, I am definitely a little bit worried. I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

Of China’s $2 trillion in foreign currency holdings, about $1 trillion is invested in U.S. Treasuries and notes issued by other government affiliated agencies, such as Fannie Mae (FNM) and Freddie Mac (FRE).

“They are worried about forever-rising deficits, which may devalue Treasuries by pushing interest rates higher,” JP Morgan & Co. (JPM) analyst Frank Gong told The Associated Press. “Inside China, there has been a lot of debate about whether they should continue to buy Treasuries.”

Earlier this year, the Congressional Budget Office (CBO) projected that the U.S. budget deficit would nearly triple from last year’s $455 billion - and would reach a staggering $1.2 trillion. And that was even before U.S. President Barack Obama unveiled his $787 billion in stimulus, bank-rescue and anti-foreclosure plans. And that massive projected shortfall also doesn’t include other fix-up initiatives that are sure to surface in the months ahead.

But rather than sit idly by and watch the value of its reserves be eroded by the U.S. government’s economic policies, China is trying to lay the foundation for future change." END

More to the point this is what Gov Zhou Xiaochuan of the Peoples Bank Of China is saying and he has a real plan not a Ben and Timmy plan:

"Zhou called for the “re-establishment of a new and widely accepted reserve currency with a stable valuation” to replace the U.S. dollar - a credit-based national currency. The central bank governor noted that the International Monetary Fund’s Special Drawing Right (SDR) should be given special consideration.

Created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system, the SDR was redefined in 1973 as a basket of currencies. Today, the SDR consists of the euro, Japanese yen, pound sterling, and U.S. dollar.

“The SDR has the features and potential to act as a super-sovereign reserve currency,” said Zhou. “Moreover, an increase in SDR allocation would help the Fund address its resources problem and the difficulties in the voice and representation reform. Therefore,efforts should be made to push forward a SDR allocation.”

Zhou proposed the following actions to move the SDR in a direction that could better accommodate demand for a more stable reserve currency:

- Set up a settlement system between the SDR and other currencies. Therefore, the SDR, which is now only used between governments and international institutions, could become a widely accepted means of payment in international trade and financial transactions.

- Actively promote the use of the SDR in international trade, commodities pricing, investment and corporate bookkeeping. This will help enhance the role of the SDR, and will effectively reduce the fluctuation of prices of assets denominated in national currencies and related risks.

- Create financial assets denominated in the SDR to increase its appeal. The introduction of SDR-denominated securities, which is being studied by the IMF, will be a good start.

- Further improve the valuation and allocation of the SDR. The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and the GDP may also be included as a weight. The allocation of the SDR can be shifted from a purely calculation-based system to one backed by real assets, such as a reserve pool, to further boost market confidence in its value.

China Rallies BRIC Allies

While China has been the most vocal proponent of a new – less-dollar-oriented – global currency system, other countries around the world have taken up the cause.

Russia, as Thursday’s videoconference illustrated, is working with China to push for an overhaul of the current currency system. In fact, the creation of a new reserve currency to be issued by international financial institutions was one of the measures Russia proposed to the G-20 on March 16.

Russia and China have also been joined by India and Brazil. Representatives from each of the four BRIC countries met in the weeks before the G-20 summit, and an unnamed source told Reuters that a shift away from the dollar was discussed.

"They (China) did not formally put forward their position for the G-20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency)," the source told Reuters, speaking on condition of anonymity.

Shortly after the G-20 meeting, Russia proposed that the IMF or G-20 study the creation of a new international reserve currency.

"The new global reserve currency has not been discussed at the summit. We only discussed it at several bilateral meetings," Russian President Dmitry Medvedev’s chief economic aide, Arkady Dvorkovich, told a news briefing.

Weeks later, China agreed to a $10 billion (70 billion yuan) currency swap with Argentina. That deal will allow China to receive yuan, instead of dollars, for its exports to the Latin American country.

Including the latest deal with Argentina, Beijing has signed about $95 billion (695 billion yuan) of currency deals with Malaysia, South Korea, Hong Kong, Belarus, and Indonesia over the past few months.

These deals undermine the status of the dollar as the world’s leading trade-and-reserve currency, but they also broaden the status of the yuan - something policymakers in Beijing see as being vital to China’s economic success, particularly in light of the current financial crisis.

“Beijing has its eye on raising the status of the yuan,” Ben Simpfendorfer, an economist at the Royal Bank of Scotland Group PLC (ADR: RBS), told The Associated Press. “They are the world’s second-largest exporter and the third-largest economy, so it is in their interest to handle trade in the yuan.”

While it continues to push for reform, China is also realistic about a timetable for achievement.

“"When a problem comes up, it’s always better to discuss it than not. But important reforms take more than one or two days,” Sun Zhongtao, a professor of international strategy at the Central Party School in Beijing, told the AFP. “Under the new system, the dominance of the dollar is set to be challenged. But it’s impossible to reach consensus on such issues overnight.”

But for many analysts, the support that China has been able to drum up in just a short matter of time is evidence of the nation’s growing economic and political clout."END

Okay, would any of this matter if we as a Nation did not live beyond our means and squander World Reserve Currency status? Would it matter if we produced all we consumed here instead of importing? Would it matter if we did not spend trillions on insolvent banks and military invasions? Would it matter if we had "real money" instead of floating fiat currencies? This is the price we as a Nation pay for "dependence" on others! When you depend on others for your existence you no longer have Freedom.

The FEAR DU JOUR is the bank crisis ... but I believe that FEAR will be trumped by GEOPOLITICAL crisis emanating out of the Pakistan, Iran, Iraq or China or Russia ... Take your pick! But then that was the FEAR DU JOUR of the BUSH regime! FEAR ... We were suppose to FEAR the collapse of the BIG BANKS, but we've already had Bear Stearns and Lehman Bros collapse as well as many others like IndyMac and Wamu and Merrill Lynch and Wachovia, yet somehow life goes on! The Sun rises in the East still ...

FEAR ... Whats next? I say the two most FEARFUL entities on this Earth right now is the US GOVERNMENT and the US FED! We can eliminate one of them tomorrow if the will is there.

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY!

Besides she cleaned out 4 upper management positions the same month she came on board just to make sure she was the only captain of the yhoo ship not the first mate. With all the write downs her first quarter at the wheel, April 21 should be a better quarterly for yhoo.
Gutsy moves on her part.
You could almost be convinced Bartz could competently manage YHOO without a MSFT advertising deal. In fact she has added almost 3.00 to the yhoo equity price in this sideways market since her ceo appointment.

Neither is WFC.

I'm not sure I'd call the last month a "sideways market"

I'd play the warrants, Bill. Plenty of beta potential.

Warrant Symbol - MGA.WT / MEGUF
Number Trading - 3,392,687
Expiration Date - February 12, 2012
Cusip - 58516W 11 2
Exercise Price - CAD$6.00

04/13/2009 Fair Value CAD$1.22
04/09/2009 Last trade CAD$0.18

Why gold and silver dropped previously but are now rallying? What is the unseen force?

FD: For some reason, my trades tend to backfire the first trading day after a good day. On the other hand, still bullish.

Trading the decline of the US dollar, this Yank wants to lessen exposure and buy Canadian and possibly Australian Dollars long term. I think my options are buying FXC/FXA, which really isn't owning CN/AUS $$, trading Fourex, which I have never done, but willing to learn/do, or the third option, which I think could be the best, opening up a bank account in Canada / Australia. What I like about the third option is that as the $$ appreciate, they can also work for me if I buy long term bonds, etc. I don't know anything about this, whether or not I can even open a bank account outside of the USA. I am told that I need to be a Canadian resident to open an account. I wonder if having an address will suffice. However, if my I go the Fourex route, can I invest those Canadian/Australian dollars into foreign securities/government bonds? Any comments/suggestions from this astute audience about this idea? Any suggestions regarding which bank/institutions to use?

SKF, FAZ losing grip on AM gains. C Divergence has been a reliable indicator lately for financials.

And all the above, despite dow -100

To Bill's point of lack of transparency, how will that ever change unless the masses demand that it change ?

There's a lot of talk from the people, but not much action. This forum is the exception, in that the vast majority of people do not fully understand or grasp the devious connections and arrangements between government and HB&B. Bill (and others here) have helped readers here greatly to expose how this works.

In order for a system like ours to work properly, there has to be a certain level of honesty, trust, and decency, or else things run amok. We have gotten away from the very basic principles of our founding fathers, and we're now reaping what has been sewn.

Unfortunately, things will have to get still worse (and they will), until enough of the masses are in desperate and dire situations before real change will occur.

Why is citi up? Any news

I have an automatic transmission (Corolla). When you first put the car from park to drive, it lands in first gear with a decided "thud" and the sensation of something hitting something, as opposed to a seamless feel-less sensation of nothingness. Switching from first to second you feel a similoar thud, like there's slack in the system, as though it's "loose".

What's wrong with my transmission?

ERX @ 24.85...XLF now green

In sand... That sand stuff can be a big problem and it has those special higher resistance forces to exert extra wear in donut season. My bet though...torque converter, although in sand a u-joint could be begging for mercy.

Make sure it's not the CV joint.
Jack up the front end, grab tire 3 oclock and 9 oclock, move foreward and back, should have very little movement and no noise, boot should be grease free and no tears.

Stink bids anyone? Perhaps F gets a lift through process of elimination?

...

wow, finally the much awaited event :)

ALOHA!!

What's to understand Shark?

When you have global fiat currencies "floating" ... when a news release from any global central bank can move money values up and down within minutes whats the rush to understand? Why? Its all INTERVENTION ... What we have been witnessing all our lives is currency values in a race to the bottom! Is that fundamental somehow going to change any time soon? VERY EXTREMELY AND HIGHLY DOUBTFUL! You can BANK on that!!! You can base TRADES on that!! FIAT based government will never be prudent or risk averse. They cannot afford to ... its that SIMPLE! EMPIRE? When has EMPIRE ever survived?

I'm not sure how you "trade" intervention successfully unless you are one of the insiders at the US FED and US TREASURY, like Goldman Sachs. You can guess or use TA and fundamentals to a degree but as we have seen there have been many "experts" bamboozled and nobody has a 100% success rate! Who here was buying GOLD and SILVER in 2001? Who here was buying real estate in 2001? The DOW? TECH? As Vadym intimates the HERD is never right! If you were buying gold and silver in 2001 you were the minimal few practically zero, definitely NOT the HERD. You're still not the HERD!

I really don't pay attention to "short term noise" ... I buy the dips and once in awhile sell huge spikes.

Right now I am living off three stock trades I made back in 2006/2007. In 2003 I bought a lot of shares(100,000+) "low"(less than $1USD) of NORTHERN DYNASTY, URANIUM ONE and US GOLD and then I sold all of them "high" (>$6USD)... I have been accumulating lots of shares(100,000+)again of my next "supplemental income" stocks since Oct/Nov/Dec 2008(the big dip), mainly on the ASX and some TSX. This is my "HIGH RISK" portfolio.

My core money(savings)/dividend(income) LOW RISK portfolio only has four components: GOLD/SILVER and XOM/CVX. Through all this bank crisis while other companies have been slashing dividend yields XOM and CVX have not. Like my Father said in the early 1980s when I asked him about buying XOM and CVX stock he said, "If EXXON goes out of business that means the US GOVERNMENT is already out of business!"

Aside from dividends and farming that is how I survive ...

I make huge attempts at understanding "real money" and "real wealth", because through every crisis known to man those two assets have survived ... every thing else is for QUAKERS!

As one of my flower customers always tells me, "Carry on bravely!"

IT IS WHAT IT IS ...

Seeing some long doji hammers in the financial ETFs

Even @ 9.56

Is this front wheel drive?
How can any self respecting driver do donuts with front wheel drive?
Nah, it's gotta be RWD and have a driveshaft.....but I admit total ignorance of this make/model/yr.

Considering that one started trading at $20 and the other at $120 and now both trade at $9, and $4.4B have been lost in them, incredible it's that the issuers have not been jailed.

Are we ever going to see a pullback? It's been almost straight up 150% from the low

should have placed bets on it

What color is the fluid, when was it last changed, and how many miles on the car. If the fluid has a burned smell, time for a new tranny.

The hood release is on the left bottom of the dash panel. No tools necessary to examine fluid condition, just a clean white paper towel.

If there's a damaged clutch pack or bent torque converter fin, new tranny time. Rule out other possibilities first as a tranny ain't cheap and they'll sell you one even if it's just something simple like a motor mount. (Oops, sorry!)

How about betting on whether they cross again? Anyone like FAZ@6 or SKF@40 ?

Wasn't it selling premkt for 9.40? Amazing.

RE:>Considering that one started trading at $20 and the other at $120 and now both trade at $9, and $4.4B have been lost in them

And that is my definition of capitalism :)

Les- If loannetter were here, we could ask her whether it has astrological significance. Other than that, it just represents the realization of another of my karmic dreams ;)

bought AIG 1.11 for a cheap trade????????????
And on top of all that crap Barbie is sporting a tatoo!

What I've learned from this site is the more information I get, the better the results. How many miles on the tranny? Any leaks? Level and condition of fluid? Put a newspaper under the car when parked overnight and see if there is even a small amount of leakage. Fluid should be pink, so with engine running check dipstick level and fluid. Then check when engine not running. Should appear pink and no bubbles. Hard shifting is often result of low or contaminated fluid. Good luck!

"And that is my definition of capitalism :) "

You have a point! But it's 'selective' capitalism, only mom & pop or whoever buys that stuff loses money, HB&B does not.

Those $4.4B were not "lost", they just changed hands. To whose hands?

HB&B just gets the govt. to create and print new money for them, ultimately paid by the future generations.

even to wild for me today. Put your chips on black, no wait red! :')
Also, appears UXG did nothing today so far.

2nd- Notice the divergence from crude?

first time i've scalped

China demand for copper aside, is it possible that the crooked cartel is buying copper to help create the impression of a recovery, just as they suppress PMs to make the USD look good?

I will add that at 25 cents per share, this issue may be fairly priced to the risk that was always there but which we chose to ignore/downplay. The list is reasonable and it's possible that this thing could work out to a degree or other. It would be just like the stock market for this thing to work out now, after just about any investor would have sold. What better way to capitalize on the mine though than for Chavez to acquire plenty of this sucker in the climate he created and then to use the capital markets and the fact that KRY is public to quickly monetize a good bit of the value underground. The Russians can't do that for him (can they?). Then, after he dumps the stock at 12, 14 bucks a share into the accounts of banks which see the thing positively by that point, and after the infrastructure's in place, the gold is coming out of the ground and Chavez has made billions for VZ and personally selling the stock, THEN he nationalizes the sucker. How's that one for ya?

Anyone who holds this one I'm pulling for you.

And I see that As I've been writing this KRY has ticked up to 26 cents.

and they want to sell it.

DD required

Is the clunking noise accompanied by a resounding jerk when it goes into gear? If so, I'd consider a tranny solenoid and/or tranny fluid issue based on my experience, albeit with a Ford, not Toyota.

I've been watching FAZ form 30 minute narrow (relatively narrow) channels this morning. From 9:30 to 10:00, from 10:30 to 11:00 and now from 11:30 to noon. So far all three have led to a trading indicator when they broke the ST channel. Not really TA, more like a hypothesis I'm trying to prove or disprove.

it was a nice thought when I had it...

Yes, there's a jerking that happens as the thing whams into gear and as it upshifts. What on earth is a solenoid?

I read somewhere, I think Bloomberg, that Japan just saw a huge drop in wholesale prices and is looking at serious deflation again.
Ah, here it is:
http://tinyurl.com/ceroow

Ford uses a solenoid to direct the valves to open/close dependent upon which gear you'd like to be in. A sticking solenoid results in a delay between the time you select a gear and the time the selected valve opens. And if you've got your foot on the accelerator when the valve finally opens, the tranny SLAMS into gear rather then eases into gear.

There is a rumor about Goldman Sachs flying around on the street - allegedly they are about to report their second-best quarter in history, +$12 billion or so.

In addition, there is this from Bloomberg:

A 47 percent gain for the company's stock price this year and a return to profitability in the first quarter may help Chief Executive Officer Lloyd Blankfein raise new money, analysts said. That might let Goldman Sachs, the sixth-biggest bank, return the cash received in October from the Treasury's Troubled Asset Relief Program and shake off compensation and hiring restrictions imposed on banks that took the U.S. aid.

Gee, you don't think being paid by the taxpayer through AIG's "conduit" for losses that didn't (yet) happen at 100 cents on the dollar might have anything to do with that, do you?

And further (and potentially much worse) there is the repeated statement by Goldman executives that they were "fully hedged" against a potential counterparty default by AIG.

One wonders - was that "hedge" to be short the equity on AIG itself, perhaps?

Why is this important?

Because if that's how Goldman hedged they got paid twice and the taxpayer literally got robbed.

Someone in Congress needs to look into this now; there are already rumblings of investigation. Those rumblings need to get a lot louder and turn into subpoenas, not "polite inquiries."

If in fact Goldman (or anyone else) was "hedged" against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!

This is not small potatoes either - we're talking $100 billion+ in aggregate with these various banks on a worldwide basis.

We the people deserve answers on this right now and if persons in our government handed these banks $100 billion dollars of our tax money for what was a covered bet, allowing them to collect twice on a risk that had not yet been realized (when at most they were entitled to collect once via their private hedging activity) every single person involved in that scandal must be immediately removed from office, prosecuted if possible, and every nickel of those funds must be clawed back by whatever means are necessary.

There is a rumor about Goldman Sachs flying around on the street - allegedly they are about to report their second-best quarter in history, +$12 billion or so.

In addition, there is this from Bloomberg:

A 47 percent gain for the company's stock price this year and a return to profitability in the first quarter may help Chief Executive Officer Lloyd Blankfein raise new money, analysts said. That might let Goldman Sachs, the sixth-biggest bank, return the cash received in October from the Treasury's Troubled Asset Relief Program and shake off compensation and hiring restrictions imposed on banks that took the U.S. aid.

Gee, you don't think being paid by the taxpayer through AIG's "conduit" for losses that didn't (yet) happen at 100 cents on the dollar might have anything to do with that, do you?

And further (and potentially much worse) there is the repeated statement by Goldman executives that they were "fully hedged" against a potential counterparty default by AIG.

One wonders - was that "hedge" to be short the equity on AIG itself, perhaps?

Why is this important?

Because if that's how Goldman hedged they got paid twice and the taxpayer literally got robbed.

Someone in Congress needs to look into this now; there are already rumblings of investigation. Those rumblings need to get a lot louder and turn into subpoenas, not "polite inquiries."

If in fact Goldman (or anyone else) was "hedged" against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!

This is not small potatoes either - we're talking $100 billion+ in aggregate with these various banks on a worldwide basis.

We the people deserve answers on this right now and if persons in our government handed these banks $100 billion dollars of our tax money for what was a covered bet, allowing them to collect twice on a risk that had not yet been realized (when at most they were entitled to collect once via their private hedging activity) every single person involved in that scandal must be immediately removed from office, prosecuted if possible, and every nickel of those funds must be clawed back by whatever means are necessary.

"Japan, according to this article, only had deflation briefly during its lost decade. Perhaps the original poster can cough up the article again for us? It was excellent! :)"

Was it this?

http://tinyurl.com/c8eept

The Fed under no circumstances will allow deflation to occur. It is Enemy #1.

Our entire rotten system is predicated on inflation, which forces people to buy before prices go up, and to not save but put their money in the markets to try to stay ahead.

From the Financial Times:

Neil Barofsky, special inspector-general for the troubled asset relief programme, told the Financial Times he was seeking evidence of wrongdoing on the part of banks receiving help from the fund, which was designed to ease credit conditions and support distressed industries.....

Large banks from Citigroup to Goldman Sachs and hundreds of regional banks have taken billions from Tarp to rebuild balance sheets weakened by the financial crisis.

But institutions applying for Tarp money had to show they were fundamentally sound, potentially prompting them to mis-state their assets and liabilities.

Mr Barofsky also said the Treasury's expanded term asset-backed securities loan facility (Talf) was ripe for fraud.

The former New York prosecutor said the decision to expand the Talf to encourage investors to buy distressed, or "legacy", assets from banks could put public money behind investments that were backed by fraudulent mortgages.

"One of our strongest recommendations of the last report was do not expand the Talf to buying legacy assets. If its structure is not changed considerably it's very, very dangerous," he said.

"We know the triple A rating [ascribed to the securities by credit rating agencies] was a sham. We could be buying securities that are backed with assets that we know were likely riddled with fraud."

Mr Barofsky revealed at a Congressional hearing earlier this month that he was involved with "probably more than a dozen" investigations into possible wrongdoing and fraud. He told the FT that potential fraudsters would pay attention when his team began seeking indictments. "Indictments can serve as great deterrents," he said....

With scant reporting requirements when the bail-outs began at the end of last year, banks had a fairly free rein on what to do with Tarp money. Concerned about a lack of transparency, Mr Barofsky has written to all of them to ask how the funds were spent.

"We haven't served a single subpoena," he says. The preliminary audit will be published in the next few weeks, after analysis of the "pretty detailed descriptions with what banks say they've done with the money".

That fulfils part of his office's transparency remit and is not necessarily a trawl for fraud. But big banks are potential targets...

"One of our main areas of focus [on executive compensation] is to see if there was a significant communications breakdown as to how that policy decision was made," says Mr Barofsky.

...

Les - Was it this?

YES!! You're the man. :)

I loved that article. If you guys can punch holes in what he says I'd be very interested to hear it.

from my novice eyes the theory sounds good.

I've heard others berate the Fed for its fear of the deflation bogey.

But which deflation? monetary - the japanese experience was mild and good for consumers - or asset deflation? Where everything we possess (including our 401k assets) is worth less?

mbernold: You neglected to mention the source of the material in this post.
http://market-ticker.denninger.net/archives/948-Ja...

As long as your debt is denominated in your own currency, I think you can always print money to avoid sovereign debt defaults. We luck out again. I think this is a trick we can only pull once.

Perhaps China has figured this out. :-)

After reading something recently, I'm of the opinion that QE is more about sopping up the massive treasury issuance, and less about lowering interest rates. I think they're just trying to avoid a failed auction. Ah if I were only a member bank. Then I'd know for sure.

2nd, a month ago, thinking we were still in a trading range, I bought DB at 24 and sold a week later at 29; I bought MET at 12 and sold at 15. Now DB is at 50 and MET is 28, similar to other financials. What's fundamentally changed in a month that we see such gains? (other than I missed profits) :)

Tempted to buy May puts on DB at 50, but who knows in this trend, maybe next week it hits 60...could say the same for PNC...

Asset deflation is not an option if the fractional reserve banking system is to survive. Growth is negative with asset deflation, the FED can print asset deflation away but must do so very carefully. Of course in the process the rich are positioned to get richer on the backs of the middle class.

Some things never change, they do it for the children. Some people live just to complain about others and about their interests. There's not much room for tolerance in this day and age of people who aren't completely aligned with group mentality even when filtering tools are provided.

C is the most heavily shorted stock with 23% or 1.2billion short.
AIG 11.5% short
I can't help but think that being on the wrong side of any good news for financials this week will be negative for hedge funds and the banks that shorted their own equity.
If C starts a small rally into the close, I'll add C to go along with AIG.

Take2 ?

Kaimu,

I checked out NZ property a little after you did in 1999, also in the Nelson area of the South Island.

I was deterred from buying in NZ by two principal factors, which I believe still apply today, viz. 1) an investment of NZ$2million is necessary to stay more than 180 days in any one year 2) the opaqueness of the RE market, with very few sellers actually stating their asking price. It also did not help that Kiwi's do not seem to believe in central heating something that they have in common with their South African cousins.

I would hazard a guess from having visited Melbourne that the Australian
market offers a lot more value for money, especially in creature comforts. That said, Australian property law is full of pitfalls for foreign buyers.

The Port Elizabeth property is a joke at that price level, unless it's being quoted in HK$!

There are now bargains to be had in the far, far safer community of Jeffreys Bay to the west of P.E., famous for its surfing. Practically any price you see listed on the internet is close to double what it might sell for these days.

As an expat American, I find living in South Africa quite pleasant these days.

gb58- It's well known that bipolar manic depressives can view identical situations very differently depending on mood. My take would be that investors suffer a similar mood disorder when viewing the market as a whole, and the effect is even more pronounced when looking at individual sectors (airlines, financials, oil being volatile sectors that come to mind).

I think 1 or more and FAZ will be out for the count for several sessions.

it will all depend on how the markets act after 3pm for me. FAS has touched this resistance level 9.50 twice today. lets see if it can power through and turn it into support.

EDIT: that was not coincidence the two crossed each other at 9.56 the second time today.

"What scares the Big 3 is independent minded, educated people making unemotional, responsible decisions based on facts. What we need is more self sufficient people who think rationally, plan long term and can enact real change."

Isn't Elizabeth Warren on deck?

"Does anyone for a second believe that CNBC has any other anchor who would speak up like that?"

It is somewhat disturbing to understand that they don't want anchors that speak up like that...

Who is calling the shots?

http://tinyurl.com/c3ub7q

got a play to finish up the day with? I've scalped financials in the TSX a couple of times. Thinking of keeping powder dry and see what sort of activity happens in Europe tomorrow.

See if C bursts out the gates in Frankfurt

Les- Actually, I'm too busy to trade much today. Back from a 10-day holiday and trying to catch up on work. I like your idea of keeping powder dry- forcing trades can backfire big time.

2nd, I agree that explains a part of it; the other part might be that the financials were sold off heavily to begin with; and now the recent rally has some shorts covering, i.e. pushing it artificially higher (but that theory appears too obvious, and this trend seems to be picking up strength).

Earnings will tell; there was a very bearish vertical 9/10 put spread on BAC today that eclipsed open interest.

Despite all this talk about the GM bankruptcy, SWC is up 10%. I just sold all my remaining SWC at $4.75, as I think many other stocks will double before SWC does (and so I would rather keep my money elsewhere at this point) and don't have the risk of SWC (related to the fact that a GM bankruptcy can terminate the agreement according to which SWC is selling a part of its palladium to GM at around $400/oz).

"So it's all baloney that you stay at home to gamble while your wife works? You're a phony!"

Les- Yeah, well, I try my best to pass myself off as a trader ;) It never ceases to amaze me that I actually have something to offer. Seriously, I don't use much of a 'system-' it's all instinct and common sense.

...

Honestly, if I were thinking about buying FAZ, I would walk around until the (self-destructive) impulse passes.

So you're saying I shouldn't take a 90% allocation @ 9.35? ;-)

It was not reply to you Bill, but additional information

CS- LOL.

(I should also clarify to anyone who might take percentage numbers [too] literally that 90% allocation is NOT the same as 90% OF allocation. I generally cap position sizes at 6-20% of the total portfolio, with higher numbers usually reserved for sectors rather than individual companies. So when I say 90% of allocation in FAZ, for example, it really means [90% of 10%] of the portfolio = 9% exposure. Even my outsized trade on FAS last Wednesday/Thursday only netted a 4% gain for the entire portfolio.) Sure, it's nice to see your bottom line go up 40% in one day with one trade. Not so nice if it were to drop that much, though ;)

WFC peeking green. What does that tell you NYU?

Not sure what it means. On the way back to double digits? Or bankruptcy?

This rally in financials is obscene.

Reminds me of those Enron traders who were cackling how they would bankrupt grandma in California with her electric bill.

Causing me some concern considering they report tomorrow.

From the $5's to $11-ish.

ALOHA !!

"The rally in financials is obscene" ... YES, but as all the BUYERS pile in there are as many sellers selling! WHO'S SELLING? I have my suspicions as to who will be left holding the bag! HERD? HERD? Where are you HERD?

Its the pension plans trying to make up their losses! Even GECKO used to trade against the clunky pension plans ...

PUMP AND DUMP! Maybe the insiders can make this years bonus by the end of April ...

yep, wudhv cudhv, i had a couple of thousands of C & BAC. Should hv read the index charts first before selling them

Sio2
I have a silly question I like to know what price FAS has to be to have FAZ around 100?
I am just curious. And thanks for your valuable time
2nd
Out of everything in morning and have no feeling about direction. Did o.k.

vinod,

When FAZ was at $83, FAS was at $20.95
When FAZ was at $145.25, FAS was at $15.97

FAS-FAZ, from http://nexalogic.com/nexahistorical.html:

2008-11-24 20.95 83.00
2008-11-21 15.97 145.25

It is absurd.

There are many possible combinations. At 30% daily rally for 9 straight days will do it (=10.6X). FAS would be at ~$0.90. Now, we know financials do not rally for 9 straight days, they will have their ups and downs, and we also know what happens with FAS and FAZ when they go up and down. So, maybe $0.40? This is disregarding MER.

Could be anything really - if it happens. All I know is 80% of the money will be lost by then.

ALOHA!!

Okay FAS 160 ... Hummmmm?? I thought it was FAS 133 like FNM and FRE, but that FAS rule change has worn out! Yet another accounting rule change from 2007 that conveniently took effect Jan 1, 2009! Any more tin hats left? Like FAS rule changes ... my tin hat is worn out! Off to TINHATS-R-US!

So the CEO of WFC "pre-announces" profit yet his stance on "live public webcasts of financials" is NO WAY! Well ...

What are the chances that while the WFC share price is in rally mode that they will announce a similar type GS fund raising? HA!

READ ON:
Wells Fargo Q1 Profits Packed with Accounting Gain
By TERI BUHL
April 13, 2009 1:09 PM CST

Last week, Wells Fargo & Co (WFC: 19.61 0.00%) pre-announced $3bn in expected profit and growth for the first quarter of 2009, along with growth in a closely-watched earnings ratio known as tangible common equity. The stock soared over 30 percent on the incomplete earnings news, with an official announcement due later this month. Some analysts have questioned the results, as both loan loss reserves and charge-offs came in unexpectedly low, helping the bank boost reported profits.

It appears, however, that as much as nearly one-third of the bank’s first quarter earnings may be nothing more than the result of an accounting treatment; without such a move, tangible common equity would be 10 bps less than the 3.1 percent the Street expects.

The jump in earnings pertain to FAS 160, an accounting rule first announced in 2007 that became effective on January 1, 2009. The rule addresses accounting for minority interests, and mandates that the ownership interests in subsidiaries held by parties other than the parent corporation be clearly identified and presented as equity for the purpose of consolidated reports. Until now, minority interests in the U.S. have been reported either as a liability or as a mezzanine line item between liability and equity.

The effect of the new accounting rule allows certain liabilities to ‘jump over’ to the asset book as non-cash transactions via paid-in capital, thereby rolling directly into earnings and boosting reported equity. In the case of Wells Fargo, the bank found itself with up to $824m it could use this quarter as an accounting gain to earnings.

That gain comes as the result of WFC’s controlling interest in a legacy joint venture with Prudential Financial; the joint venture was acquired when Wells took over Wachovia last fall. Prudential currently holds a 23 percent non-controlling interest in the venture, as well as a put option on its interest in the venture; according to government filings, Prudential intends to exercise such an option “at a date in the future.”END

Now where are all the banking fundamentals? Do any of them actually have REAL earnings and profits or are they all "manufactured" by accounting rule changes?

More from one of the FASB members who voted NO to FAS rule 160!

"“I am always still amazed how the market responds to a stock because of an accounting move,” said USC School of Accounting professor and GASB board member William Holder, after reviewing the developments at Wells Fargo.

Holder reiterated that a negative vote by FASB board member Leslie Seidman on FAS 160, who published a written dissent, states that one of the reasons she voted no on the accounting rule was because she was concerned about a non-cash capital transaction now following through to earnings."END

Hummmm okay ... "non-cash capital transactions" are now earnings. Will the IRS tax these guys based on these phoney profits? You need to compare FASB rules to actual US TAX CODE rules! Will WFC pay taxes on $3bil of profits for Q1? IRS? I need to call them! HA!! That would be a great question to ask the CEO of WFC ... Oh yeah ... he doesn't take questions from the shareholders! Strange that a CEO of a public company has such a policy where he does not answer public questions! More Hummmmm????

When you see this guy resign, think of Jeffrey Skilling of ENRON!

IT IS WHAT IT IS!

Re: the Faircanada website. I fully support their mission and efforts in important areas such as conflicts of interest (particularly with the TSX) and shareholder rights. They also have links to another organization (Investors-Aid cooperative of Canada)that make some dubious claims and repeat claims of others as fact.

A couple of the tidbits from the Investor-Aid site I find a little off:

*Trading = High Costs and Low Returns
*Market Timing = High Costs and Low Return
*Regarding Individual Stocks - Holding these is a quick way to lose large amounts of your portfolio.
*Members should be asked to consider only mutual funds rated A or A+ by
Globefund

I think Investors-Aid is likely well intentioned but need to stay on track with their message and not try to provide investment advice or repeat unsubstantiated claims of others.

I would only add that I think this was Presidential in that Obama stayed out of the way and let the highly trained professionals do their jobs. Other personalites could've blustered toughguy anthems and made proclamations but Obama let the military deal with these thugs and did not elevate them to a higher status than the criminals they are.
Others tried to make this a "test" of the Obama admin but it was a simple matter, and simply dealt with by highly trained professionals. (Not to diminish the anxiety of the families involved in any way.)

To: Internal Revenue Service, Department of the Treasury Washington, DC 20001

Enclosed is my 2008 Form 1040, together with payment. Please take note of the attached article from USA Today archives. In the article, you will note that the Pentagon paid $171.50 each for hammers and NASA paid $600.00 each for toilet seats.

Please find enclosed in this package four toilet seats (value $2,400.00) and six hammers (value $1,029.00). This is in payment for my total tax due of $3,429.00.

Out of a sense of patriotic duty, and to assist in the political purification of our government, I am also enclosing a 1.5 inch Phillips head screw, for which HUD duly recorded and approved a purchase value of $22.00, as my contribution to fulfill the Presidential Election Fund option on Form 1040.

It has been a pleasure to pay my taxes this year, and I look forward to paying them again next year in accordance with officially established government values.

Sincerely,
Another satisfied taxpayer

Interesting to note we are at the seasonal peak in copper prices:

http://beta.theglobeandmail.com/globe-investor/sha...

Just received this from a fund company.

Global Finance Magazine's "World's 50 Safest Banks"

Top 5.
1. KfW (Germany)
2. Caisse des Depots et Consignations (France)
3. Bnak Nederlands Gemeenten (BNG) (Netherlands)
4. Landwirtschaftliche Rentenbank (Germany)
5. Rabobank (Netherlands)

Top U.S. Bank
Wells Fargo (# 21)

Cara 100 Banks
Royal Bank of Canada (#10)
HSBC (#19)
Deutsche Bank (#30)

It didn't mention the criteria used for the rating.

the case of the Navy-Seals rescuing an american captain from somali pirates was right out of a harrison ford movie:

little if any attention was given to the fact that there has been illegal dumping of toxic waste by western nations for decades off the shores of somalia and that while many pirates are thugs, many others are legitimate defenders of their nations shores that are used not just as toxic dumping groups but as illegal fishing sites, depleting their stocks.

somali is very unstable w/ virtually no formal rule of law, it was fisherman who were forced to initially adopt the gun-boat wolf-pack style of pursuit to chase away ships.

why wasnt this highlighted when all the doom and gloom about this one captian was being splashed on the screens? how many somali's have died or been sickened by toxin's leeching into their water tables and the fish?

this is sadly typical american myopia about the broader context of things. of course the pirates shouldnt take hostages but the total lack of context in this situation, with an over empahsis on how brave everyone is from the navy seals to the president, you loose sight of the bigger problem.

http://www.mbali.info/doc331.htm

http://www.independent.co.uk/opinion/commentators/...

Dr. Cosa: "this is sadly typical american myopia about the broader context of things. of course the pirates shouldnt take hostages but the total lack of context in this situation, with an over empahsis on how brave everyone is from the navy seals to the president, you loose sight of the bigger problem."

Couldn't agree more. Basically are most elite commandos take out 3 uneducated and untrained teenagers. Bravery would mean going after the warlords that are sending out these pirates or actually giving a crap about Somalia. instead of using it as the dump for the western world.

ALOHA !!

Okay ... here's your GANG OF FIVE from the FASB. These guys as a group run the show over at FASB. I distilled their expertise and accomplishments into a couple sentences or less. All of them have been former employees of the top US accounting firms, even some that went out of business due to fraud(Artur Anderson). All of them have their IVY LEAGUE degrees and yet they sit on the FASB making the most complex decisions to promote banks who hire their former employers CPA firms. How is it with all this "expertise" there is a banking crisis?

At the end you will see a familiar Goldman Sachs alumni ...

Mr. Herz - authored book, 'The Value Reporting Revolution: Moving Beyond the Earnings Game'.

Dr. Linsmeirer - the role of accounting information in securities markets, including the usefulness to investors of fair value and market risk management disclosures, the valuation–relevance of bank earnings component information, and the economic effects of changes in accounting regulation.

Ms. Seidman - Previously, Ms. Seidman was vice president of accounting policy at J.P. Morgan & Company where she was responsible for establishing accounting policies for new financial products and analyzing and implementing new accounting standards.

Mr. Siegel - proprietary research methodology for identifying hidden risks of business deterioration through forensic financial statement analysis.

Mr. Smith - mission to establish and improve financial accounting and reporting standards to increase transparency for users of financial reports and increasing investor confidence in the capital markets.

Who sits on the FCAG-Financial Crisis Advisory Group, part of the FASB?

Jerry Corrigan
Goldman Sachs and Former President of the New York Federal Reserve Bank
United States

WOW ... the rest of the "advisors" are all domestic and foreign Whos Who of the private banking and central bank community! Who better to write rules in times of crisis?

So like the SEC the foxes are in charge of the hen house!

A really BIG VOTE of NO CONFIDENCE from me!

And whoever said accountants weren't imaginative...

KBW expects $120 billion of “stress” losses at Wells Fargo, assuming the recession continues through the first quarter of 2010 and unemployment reaches 12 percent, Cannon wrote today in a report. The San Francisco-based bank may need to raise $25 billion on top of the $25 billion it owes the U.S. Treasury for the industry bailout plan, he wrote.

First-quarter net income rose 50 percent to about $3 billion, Wells Fargo said last week in announcing preliminary results that topped the most optimistic Wall Street estimates and sparked a 32 percent jump in the stock. The bank attributed the profit to a surge in mortgage originations and revenue from Wachovia Corp., acquired in December. Full results are scheduled for April 22.

“Details were scarce and we believe that much of the positive news in the preliminary results had to do with merger accounting, revised accounting standards and mortgage default moratoriums, rather than underlying trends,” wrote Cannon, who downgraded the shares to “underperform” from “market perform.” “We expect earnings and capital to be under pressure due to continued economic weakness.”

http://tinyurl.com/czkw2h

at $70.5 for 25 shares and at $80.5 for 50 shares (out of the 100 shares I purchased today at $60.5).

Also, placing a buy limit order for 25 shares of SKF at $50 and for 50 shares at $40.

Muni:

If you monitored your emotional response to the take-off in FAS around $10 this afternoon, it came pretty close to the emotional state I normally target as an exit point. I was not holding FAS, which made it easy to 'identify' with potential buyers- at $10 the impulse to chase was quite high> so the 'right' decision was clearly (at least to me) to stay away and/or (for those fortunate enough to be holding) sell into it.

Amtrak:

The problem I'm having with financials right now is the (somewhat) longer-term picture: (a) I don't think the short squeeze is over, and (b) this week may ultimately prove to be a great buying opportunity- what IF C/BAC/WFC/JPM double/triple/quadruple from here? How many people LIKE financials right now for more than a trade? No one? That's actually quite bullish from a contrarian perspective. From that POV, no one's even close to chasing the train, and it may in fact be EARLY?

And what if (after all the speculation) results turn out way better than expected, and the purpose of the delay is/was to brake price moves to the UPside?

I haven’t been so clue less like today about what is going on and what is truth about financial. Who is telling the truth?
Decided to stay away and watch the game from bleacher

there is a record date in the data
it is april 9 2009

Why do the 'record dates' show up as "2009-AprilA?" What does the "A" represent?

http://www.nni.nikkei.co.jp/e/fr/freetop.aspx

I think we need a downer to take the edge off- I just can't see investors continuing to binge on financials without a break.

My goodness, look at the short squeeze out for C. No other financial has this level of short. What does this tell us?

The reason that C has so many shorts is an Arbitrage play that Preferred share holder put on when they lost their dividend. I believe they got an option to buy common stock at a certain strike in replacement of the dividend. I would research all the ramifications of this before divining in. If we are above that strike the Preferred share holder may be able to call in their shorts at the strike price which may be lower than the current price. I have swore off financial or I would research this myself.
Bob

2nd- Can you imagine if real time short volume ran along side bid/ask/price/total volume? Kind of like you can do watching volume on long/short etf's. Now that would be powerful. And the shorts complain about having to borrow stock/uptick rule, while they trade in the dark.

Ooooh, rub it in. All my coulda's in somebody else's pocket. Ah, lessons learned. I hope.

btw- I sold FAS @ Thursday's open @ 7.34/7.57. I was watching as it breached 10 today. But I also remember playing FAS at 8, 5, and 15. We all play/played the game, and each day is a different game. It's like playing tennis or basketball- whatever the ending score, it's a new game the next day/week. No point 'keeping score' each day.

HK up 2%, Japan down 2%.

Love TGB- traded it before the bust for some good money. Always sell it too soon. Out today at 1.66 (in at 1.16 last week). Will look to buy it again on a pullback- maybe in the 1.50 range. Don't see much resistance on the chart until around $2 or so...

How's this for a heartache though. wrote covered calls on TCK for $5 back when it was struggling in the $4+ range - expire this week. Coulda, woulda, shoulda.

"I’d like to see a lively discourse because I believe that HB&B’s lack of transparency is the biggest hurdle that stands in the way of free capital markets."

With all the fantastic earnings reports coming from HB&B, there's bound to be some extremely interesting questions in the pipeline!

jragusa-- I checked out IBKR. Quite an operation going on there. It seems very complex.

Regarding your comment about buying currency ETFs, what I don't understand in your example is the relationship between a rising loonie and declining asset value of the Canadian ETF. If the loonie is rising against the dollar wouldn't the ETF (FXC) also be rising? Why would the loonie rise and the ETF decline? I thought the FXC ETF mirrored the rise and fall of the loonie vs. the US Dollar.

Amazing so many posters are trading the most volatile and dangerous stocks-financials and doublers/triplers on these. So dependent on the whims of big, almost bankrupt government. So many bank write downs to come in reality. Such bad corporations.

I like Billy ball per Cara Trading. I only play with 3/4s of a deck since I don't do options. In the near future I will be looking to get out of INTC over 16 for a loss, keeping SMH in mind for re-entry into semis if INTC doesn't respond after earnings tomorrow and when market goes lower. Intel= fine company. Nice safe dividend. Newest chip out very soon creams the competition on both speed and energy efficiency.

Note: Holdrs, such as SMH, seem good for a short term proxy. However, the only time I held one for a longer term I ended up with small fractional holdings in a few companies. Those were a bit expensive to clear out due to commissions. They were the result of stock dividends, splits, etc. Thats the nature of the beast. Also, they are a Merrill Lynch product.

HA! speak of the devil and he will appear...

I was just checking to see if I'm at the computer early enough in the morning to trade the ASX (and I am) so had a gander at your picks Kaimu.

CTO - it's a name I picked up from you and its going in the complete opposite direction to SLR. Does CTO have a future?

PEM as well you reckon? Ok.

both popping very nicely today. Will have to get me a piece of long-term action there.

cheers.

ALOHA !!

The key word on the April 10th, 2009 US TREASURY DAILY STATEMENT is SPEND ... SPEND ... SPEND!!!

The two infamous mystery line items OTHER and UNCLASSIFIED went up almost $22bil USD on Friday, April 10th from $1.411TRIL to $1.432BIL USD ...

The FOUR HORSEMEN line items DEFENSE, SOCIAL SECURITY, MEDICARE AND MEDICADE all went up $76.9BIL USD for the month of April so far and the month is not even half over!

Add up those five line items for the two mystery line items and the FOUR HORSEMEN and the total for April is now at $158.4BIL USD for ten ... TEN DAYS! That's $15.84BIL USD per day! When do the baby-boomers retire?

I was reading some comments on the TEA BAG PARTY YouTube videos from a SANMMM, whatever, who was saying all us tax protesters won't be needing our Social Security checks then! Only an idiot could rack his brain for days and come up with that logic! Of course he or she fails to understand that we have already paid for those Social Security checks in advance as deductions from our payroll. Over the past 30 years I have been hitting the maximum for SS and MED so I have been paying way more than my fair share! Obviously SANMMM has never had a job!

Speaking of jobs! What a con job ... YEAH ... pay for your Social Security in advance and we'll borrow your money and leave an IOU in the "kitty" for you! Well the IOU is now sitting at $102.2TRIL USD. Anyone banking on that ever getting paid back? We've got a bridge for sale too! Right ... let me guess ... IT GOES NOWHERE ... like all your promises?

The 2009 Y-O-Y breakdown in US PAYROLL WITHHOLDING TAXES has exceeded the chart capacity its pegging the red line!

The USDX took a dive today as well!

So what will a government that plans to go into another $3.6TRIL of DEBT(if you add the two mystery line items we're at $5TRIL)do to pay for that when TAX REVENUES are non-existent and LIABILITIES are off the charts? That's a structural collapse that transcends mere banks and economic woes and lands squarely on the US Dollar and the US GOVERNMENT'S ability to pay which ultimately translates into a SOVEREIGN CREDIT RATING downgrade, whether it is official or not!

AH-H-H-H !!!

RE:>"Amazing so many posters are trading the most volatile and dangerous stocks-financials and doublers/triplers on these...

I like Billy ball per Cara Trading. I only play with 3/4s of a deck since I don't do options. In the near future I will be looking to get out of INTC over 16 for a loss"

I'm just a newbie Illini but perhaps a reappraisal of your trading options might be beneficial. I've learned very quickly here to distinguish trading on sentiment and trading on fundamentals or even technicals.

The Motley Fool purchased INTC at 13 late last year or early this year (can't remember) and have been writing covered calls since. You could have sold this fine company at a profit by now if you had done similarly with your purchase. Why sell it at a loss?

I'd guess that killing 3 teenagers in a boat isn't tough - but making sure you don't hit the hostage, or give the hostage takers time to kill the hostage, when both your team and the hostage takers are floating, well that's probably more challenging. I'm glad they're on our side, and if I were in the boat with the hostage takers, I'd be REALLY glad.

Agreed about the goal of creating a coherent robust foreign policy, and not just for the non-christian groups. Cuba is one hopeful note, expanded arms control regimes are another. Perhaps Somalia is a hole in the donut - but I feel there is the donut there too.

Missile strikes - well if we have actionable intel on the location of people who continue to be at war with us, and getting permission from Pakistan means they get away time and again, and Pakistan is incapable of doing anything about it - what's that alternative again? I'm not seeing it.

ALOHA !!

Les ... "He still has time." Will you still be posting this on his last year in office? What's your deadline for OBAMA to fix everything? Just so you know OBAMA will have to stop running the country in about six months so he can start running for re-election in 2012!

Do you guys really buy that these guys know how to run a country? I believe all they have expertise at is getting elected!

So far OBAMA has proven me right!

By they way ... I agree ... shooting teenagers happens every hour in Oakland,CA! The US FOREIGN POLICY, as I have said many times, is just pure EMPIRE and of course that is just how EMPIRES fail!

I think the last Arab types the USA helped win a War was Osama Bin Laden! Prior to that we helped Saddam Hussein win his little War! That pretty much says it all regarding our FOREIGN POLICY record! I wonder what the "counterparties" to Osama and Saddam's little Wars thinks? RUSSIA? IRAN?

We have a huge list of global "evil-doers" now!

OBAMA did open up Cuba ... now the MAFIA can go visit their old casinos!

America just can't afford EMPIRE!

ALOHA !!

Well Les, the base metal miners are pretty much tied to base metal prices unless one of them makes some astounding HIT with huge "eye candy" grades.

CTO: I still own but they have to quit dragging their heels and make greater strides in the production arena. They're in production but they need more. The latest NR shows a 5 AUoz(161 g/t) per tonne grade, so grades are high but widths are not sizable. Seems as if they do a lot of drilling and declines and crosscuts but not enough gold in the can! Also seems range bound in the 20 cents region. Plus I am not impressed with exec pay/benefits. These guys need to perform or take a pay cut ... CTO has financial backing(a plus)from the DUBAI GROUP ... On hold!

PEM: Somethings up, plus the Chinese like them ... The ASX has a share price inquiry. Strange that their pal CBH is on some big share price moves as well(up 40% today). Yet CBH has no share price inquiry from the ASX last I looked. Maybe some combo? Maybe the Chinese are buying them both? I own no CBH shares. I do think it would be a positive development to unite Broken Hill under one company, not two. We'll see ... Hummmmm??

NOTE: Did you guys know that during WW2 Australia moved all its gold reserves to a house in Broken Hill. Not a bank or a fort, but a house in the neighborhood! I think the UK could move all its gold reserves to Gordon Brown's closet! Maybe his shoe! He would know ... I wonder where the USA gold reserves would fit now? Maybe Gordon Brown's other shoe! I mean who would know? DONT ASK ... DONT TELL!!

SRL/SLR: Both going places ... only ones I have added to, but SLR is at an all time high right now and SRL does not want to give up much ground either. Be careful with these two. A two letter typo and you could end up selling SRL for 44 cents!

Right ...

RE:>"How do you buy shares listed on the ASX. Does anyone have a recommended broker?"

IB

37.50 AUD per month for market information.

One point of note David. This is the radicalisation of tribes people of the autonomous region of Pakistan - not Al Qaeda a la Bin Laden per se, who have been hiding in the region for some time. Al Qaeda is no doubt happy to see the region destabilized and sympathetic to their cause.

Think of the area as a zone of militant Islamic fascism. It was initially a small zone located in the border region of Afghanistan. The zone of this fascism now risks to encompass the populated swath of Nth Pakistan, where attacks in Lahore have occurred.

http://news.bbc.co.uk/2/hi/south_asia/7972565.stm

The United States by its imperialist activity risks to create another failed state - Pakistan is politically fragile - which poses some bloody dreadful questions over the security of the Pakistani nuclear arsenal and its nuclear armed neighbour.

This is not a road we want to be going down.

It needn't be said that Afghanistan is a failed state. NATO is propping up Kabul, but this cannot continue, even if Obama desired another Vietnam. The Taleban of Afghanistan are the children of Soviet imperialism, and are uneducated camp dwellers forced to flee in the late 70's. They've known and had nothing - except the Koran - the 20 years they spent in makeshift camps. Little wonder they are the way they are.

I can only recommend journalist Robert Fisk's collosal work - "The Great War for Civilisation".

Up early looking for a good downer to start the day, but I see futures are flat.

I see bets on the table for an INTC beat, and I think they will. However, with sentiment high, it's probably been priced into both the stock and the calls. Less so, but still the case, for SMH/ROM/USD/TYH.

Tired of making lay-ups. Joining Vinod on the sidelines until a set-up emerges.

Les- Yes, I had KGC in my sights at last night's close, as it dropped to a one-month low.

It would be a decent hedge to my long exposure right now.

What was Pierre's target for support, 14.50? Pretty close. It may test the March 10 low of 14.33.

To borrow a phrase from Pierre:

I'm "[changing] from a "mindset of expected return maximization to one of risk minimization."

http://tinyurl.com/ch9p7v

I guess it won't help with the rebound in uranium miners.

Mr. Fairtex points out the conundrum: O.K. I'm all for the better relationship with non-Christian countries, but they have to want that too-makes sense. Now, just as we probably have extreme Christian's who want to wipe out the non-Christian infidels, you've got that on the other side too. I'm not one that subscribes to the conversion mentality. You can deal with moderates, you can't deal with extremists...so, as Mr. Fairtex says, where's the answer? Unfortunately, there is no clean answer.

The principle is simple - take away the guns. Take away the reasons to hold a gun. What were three African teenagers being assassinated in a dingy for? Probably 'cause they've got nothing else except a life of crime and violence before them and they were duped into being the stooge for whichever clan is making money off their backs.

I was pleased to hear someone arguing on Bloomberg that the role of the political economist will be elevated because of this crisis. That is because the questions of "who" (the people that should be served by the economy) and not simply the "what" (money) of our economy has come back into question. The disenfranchised, who take up extreme beliefs or are easily persuaded to, figure heavily in this discussion.

The ideological hard cases like Bin Laden need to be imprisoned, pure and simple.

GS has been down slightly since the close on Monday.
Struggled buying C near the close Monday at the 3.54 range, and now I'm seeing C trading premarket 4.50 with over 15 million for volume. Oh well!
I still have AIG @ 1.11 so will watch the banksters very close again today with an eye on the lagered wfc.
GS.....you had to know they would report stellar earnings, but on the other hand they didn't realize someone with a 1 week online accounting degree would start doing just enough math to figure out the crooks would compensate themselves about 4 times more then the shareholders.
To-big-to-fail........I have a bridge for you, real cheap!

If you have ever been in a life threatening situation, our cops, soldiers, rescue squad — are a welcome sight. Criticism of the underlying causes is for those at home sipping coffee.

There are always extenuating circumstances whether a cop shooting a teenage druggie or Somali pirates. The new "One World" scheme will change nothing. Don't other countries know about toxic waste dumping, etc?

BTW — Were any other nations involved in this rescue? Are any others doing anything about the other hostages? If so what? Nasty letters and UN resolutions aren't worth much to those in peril.

Good for the SEALS! A well coordinated job.

I think not arming the crews is the stupidest part of this whole affair.

I suspect it has always been so. History is always written in shorthand by those who "win" in any confrontation.

Today's news is about "bank profits" and "home and auto sales" — never mind how computed and at what price. Media blather ignores the "details" and goes for effect.

You setting yourself up for a drop in price the AM?

CUBA up in pre market. S.TO doesn't trade pre-market.

San Gold, SGR.TO reports a high grade intercept prior to market open:

http://www.stockwatch.com/newsit/newsit_newsit.asp...

Good morning.

Downgrades:

CVX - to Perform @ Oppenheimer
XOM - to Perform @ Oppenheimer

New:

GOOG - Benchmark Initiates Coverage with a Buy. Price Target = $430
NKE - Robert W. Baird Initiates Coverage with a Neutral. Price Target = $61

Price Targets Raised:

ABV - from $53.60 to $62.30 @ Credit Suisse. Outperform
AMAT - from $10 to $12 @ Oppenheimer. Perform
QCOM - from $39 to $47 @ Jefferies & Co. Buy

Now that those jobs are leaving Iraq, looks like there will be job security on the high seas, at least around the horn of Africa.

This is a simple Skinnerian answer. To stop various actions requires a substantial negative to extinct the behavior. IE: Illegal parking will only stop when illegally parked cars burst into flames. It doesn't have to be every time, but enough to not take the chance.

Same for piracy. Every other ship needs to destroy a boat full of pirates.
It is certain at that point that the behavior will stop.

Previously they all got a nice payday/reward.

Grym, it's about giving up the need to commit violence.

I am in the real world. Your government and its croneys on wall st. are stealing your future from you, your children and your grandchildren.

It could have been otherwise, for you and those kids in the dingy.

No. No bounty hunters. Just defenders of ships.
The aggression would be on the part of pirates.
The defense would be on the part of ex-military.
I'm not suggesting anything other than intermittent self defense.

I suppose self defense is bad now?

BTW, it will become policy because it makes sense and will work.
We have literally decades of behavioral study proving it will.

BTW, I'm not suggesting this be the lone policy.
Combined with positive responses to some sort of government, economy, apologizing and acting to repair our wrongs, then the policy is guaranteed to work.

With defensive action it would work, but not as quickly.

Ignoring simple behavior is why prisons don't work and they have revolving doors.

I'll bet a bunch of you have parking tickets....just ponder the question.
If the ol' car exploded when you illegally parked, would you ever park in the wrong place? Not purposely. No it is *certain* this works.
It would surely be hit and miss if we didn't supply good parking places that would be positive reinforcement.

And if you or your kids were in the dingy what would you have wanted?

No SEALS?

A nasty letter from the UN — Attention all pirates, we realize you've had a raw deal, but please let our people go.

Wall St. is a totally different topic — so far no one is shooting the bastards which brought this on. You brought the guns into the blogging.

In the real world it is more than just dollars — it may well be life or death.

If you are a total pacifist, we are never going to agree and may as well leave it that.