Cara's Commentary & Community Chat, Thurs., Feb. 5, 2009

Good morning.

DELL - Downgraded to Underweight @ JP Morgan

--------

Price Targets Lowered:

COST - from $55 to $50 @ McAdams Wright Ragen
CSCO - from $19 to $18 @ Jefferies & Co.

Anything, good or bad is going to take longer then two weeks.

I think it's, um....more than reasonable..... to give the newly elected President more than a couple weeks before we start trotting out juries.

The former knucklehead had a lot more time jury-free and he was the biggest screw-up in history. I know we are all concerned, but a bit more time would seem like a good idea given the size of the problem. No?

Hi Bill, I posted this the other day in reply to your reply, but I think it was just before Wednesday's discourse was started. I know your a busy man, (how do you find the time?), but if you happen to get a couple of minutes spare and fancy replying I'd be all ears (or eyes?).

As an aside, we sold an apartment in Melbourne a couple of days ago (though settlement is not for a couple of months) and we plan to wait about 12 months before buying here in Perth. I think I've just convinced the wife to entrust CTAB with some of it.

Anyway, here's what I posted re the 'detective work'

Thanks for the reply Bill. Great analogy. A mix of observation and experience. Guess if I work on the observation the experience will come. I reckon by the time the boys reach their teens, I might have figured this all out!

Also, if I may, I just have one more question. When you say you didn't like the action (SLW 12/03), what bits of 'evidence' did you not like? We are only talking about a 3c move, so I figure it can't have been only the price.

All the best
Ad

Isn't it strange how none of the insiders/regulators know anything about how Wall Street really works? The same holds true for Congress in more ways than we can imagine. This is corruption folks, front and center.

Sold 1/2 position @$922.30

Hi,

picked up Bill's comments on sndk. Just want to do a little exercise in options.

Buy @9.29 for 100 shares

options for July.

sell puts @ 9.00 for 2.05

simultaneously sell calls @ 10.00 for 1.93

new price 5.31

if drops to 9 double up with an average cost around 7$

if rises to 10 sell for near 100% profit.

Is this right? would others buy in such a tight price range?

This is a straddle, right?

Just heard on the idiot box that Goldman just raised it's gold target to $1000.

I did so about a week ago.

Regarding CNBC: Can you imagine the sage wisdom we would have been deprived of if Joe Kernan had, instead of pursuing the path he did, had instead stayed in the insular world of medical research?

This guy's gotta have friends at the network.

Craig,

I usually look a little more svelt, I plump up a little after lunch:)

[Note: This is basically a repost from yesterday's topic.]

Can anyone explain to me just how TBT is designed to work inversely to the long bond? When I look at their largest holdings at
ETF connect they are:

Bank of America Corp. 2.100% 09/02/08
UBS Warburg LLC 2.100% 09/02/08
Credit Suisse First Boston Corp. 2.120% 09/02/08
JPMorgan Chaseá& Co. 2.120% 09/02/08

What does this mean? How does it work?

Since I am not primarily a day trader — and have too many failed attempts to make money using the inverse funds — I am unfamiliar with the actual process.

I will NEVER invest (trade) in what I do not understand... (Will write on the balckboard one hundred times.)

----------------
My longer view is still expecting deflation and allow my Treasuries to continue to pay off for some time as this "rescue" attempt drama continues.

I know some were a little unsettled by his demeanor in the hearings...

This is one of those truly dramatic moments in history, when someone who had shown heroic persistence over nearly a decade and to no avail, and who, in April of 2007 finally gave up on hoping for any action from the SEC after delivering his final detailed report on the Madoff crimes, has now at long last had his moment of vindication.

It must be extremely bittersweet given the damage to the economy and the lives of so many people that occurred over his time in the wilderness. And of course it is likely the damage to the credit markets would have happened anyway even if Markopolos would have been taken seriously, the SEC done its job and Madoff brought to justice, years ago and long before anyone had heard of a CDO or CDS. But the failure reveals a systemic core of corruption in our government and financial markets, and the Markopolos hearings yesterday revealed that better than anything this side of a Robert Towne screenplay.

No one came off worse in yesterday's hearings than Smith and Harvard Law educated Linda Thomsen, the SEC enforcement director since 2005. She is most directly responsible for this particular disaster. And she did not show a scintilla of shame or regret, but rather hid behind a flimsy legal protection as a tactic to answer direct questions about her catastrophic failure. Equally atrocious was SEC general counsel Andrew Vollmer, who was obviously the author of the SEC's absurd legal pretense for not responding to questions.

I hope this thing is just getting started. The rottenness at the heart of the SEC and the culture of corruption that permitted the Madoff crimes to go on for so long must be "changed". A good start would be the immediate dismissal of Thomsen and Vollmer by Pres. Obama's new SEC chairman Mary Shapiro.

ucbi buy stop limit 4.44/4.47
ncx buy limit 1.40
txt trailing buy stop .42

one cancels all order.

Do ur own homework.

Not considering the wider commodities (ie. Silver, etc.) via an ETF?

The printing presses going super fast and hard, including in commodity-reliant Australia, the prices of commodities overall (not just gold, silver, etc.) must be heading up. And with China (which uses a lot of these commodities) pumping money into infrastructure, this has to go up.

As an example, CITIC Pacific in HK is being pumped by it's China parent to move ahead with it's steel biz (which AFAIK is also a deal with Australia) as China needs more. Ultimately, the commodities will be pushed higher... Gold, yes, but I would have to assume the wider commodities market as well.

Unless you have a view that only Gold (and Oil, which you said you had a smaller percentage in), is going up, and the rest like steel and so forth is going down?

thanks Bill,

not intending to buy however. Just theorising how to use options to make the best of a beaten up stock like SNDK.

GLD took a leap out of the 9:30am shute, coming back now

Doc,
Having your back feel better is probably a sound technical indicator. Probablly as sound as an elliot wave or a Fibonacci number or A GS analyst opinion. Personally I hope you still give us your daily thoughts on POG. I find your analysis very good and an excellent filter of the Bullcrap.
Bob

Says here echostar may be planning a SIRI takeover.

I go by the belief that the crude oil run up was a market corner, which will not see a repeat. Some people are swearing by a significant bounce.

Strange and ironic when you consider looking at the futures chain for copper, gold and oil, crude is in a steeper contango. That would say that the oil market is anticipating inflation where copper and gold for the moment are relatively flat. Notable also is that many of the predictions coming out for gold exceed the futures curve years out.

Differring to the commodity aspect, gold is not indicating anything resembling a rise. That could mean the onset of backwardation. I also think that from a commodity perspective, copper should be watched a little more. The copper price has not yet caught up with the rapid escalation of metal in inventory.

This might all be the effect of inventory that gold will excel as a store of value. Copper and oil do not accumulate value in storage.

http://finance.yahoo.com/futures?

"I go by the belief that the crude oil run up was a market corner, which will not see a repeat. Some people are swearing by a significant bounce."

I agree with the above comment. We had the perfect storm for oil prices a few years back, rampant dollar inflation versus other currencies, a war in the middle east on the heels of a manufactured terrorist attack, and of course, we had the Houston oilman in the White House, who accomplished all of the above in a sweeping and quite successful war on the citizenry in the service of, primarily, higher oil prices (as well as to obtain higher defense spending and a diminution of our constitutionally guaranteed rights).

It's a dark view, but it's the most plausible one.

Hearings start in <15 minutes. I keep Bloomberg tv up on my desktop

in 1/30 at 5.09
out this AM at 6.68

I am watching volume as a clue. abx, gg less than 2M traded. thats not below avg. but thats not big money buying hand over fist either.

I got my "BONUS" today. want back in on TOG. but cautious.

RSI 7 day 11.07

VOIP - An evil competing technology which should be outlawed in all free markets.

What a great plan Bill. I especially like the new structure of the SEC with the checks and balances that will make it harder to commit institutionalized fraud and easier to actually regulate. It seems that now we have it exactly the opposite way.

I also still wish we could get Markopolos to head the SEC instead of Shapiro. She seems too connected to not be compromised like we know Geithner is.

The best tag team would be Markopolos running the SEC with you as his most trusted advisor.

Rob.

Dow down 100.

10 day ATR is 212.

ZZZZZZZZZZZZZ

I'm thinking if SLW can close and hold 7 it means a break out of current action.

If ABX can break 40 and hold it,

If GG can break and hold 32.

Noted Cosa's probable "painful climb" comment referring to volatility

Comments welcome

in 6.06/out 6.59

Need to free up some cash plus max pain for March shrank to 7.50

liking the action in gold...note Twiggs' targets on breakouts either way:

http://tinyurl.com/54qccl

Despite market news PRGO is holding up well 23.60 off of 23.29 low this morning. I think it's a good long term hold. Disclosure: I'm long PRGO.

Way to go bsi. The BDI is up again today to 1498. Keep having fun!

yeah looking at the same levels for the big cap golds.

and by painful climb i meant to say:

horrific rattan-esqe death march of gold stocks moving 3 steps back for every 2 steps forward attempting to break out after 3 years of underperformance and disappointment in the face of an ever rising gold price.

i think its going to be an ugly ugly ride that will knock even gold bugs off as we move up. watch for deteriorating earnings and more geo-political disasters to follow the miners. oil prices do not in my review have any correlation to the price of gold miners, no matter how much they claim energy costs ate up their spending the past 2 years. they will only find somethign else to blame for declining profits.

the key is that they still move leveraged to the gold price, and is the only reason i invest in them. the idea of investing in a gold company on its own merits as an actual company is waaay too difficult for me, it invites nothing but heart-break watching guys post hopeful stories on message boards and chat rooms of 43-101 pending, drill results and merger stories. Barrick is not a gold company, its a shell-game w/ a crook at the helm. but man does it jump up when gold gets moving.

;)

Sold BAC @ 4.25

I liquidated half at 8.30 for 50 cents - it's healthy 6.5% in less than a day. Will add it back on pullback to or under 8, or ride the balance if no pullback comes.

Anyone watching Regions in the last ten minutes?

FD no position

About time it woke up.

showing bearish engulfing candlestick right now. How it acts in the last hour will be critical

Flat. (No position)

Extreme views can be appropriate at rare points in time, but they are generally bad bets. In reality, few (if any) can pick the tops and bottoms with any certainty. Importantly, it is a rarity when one's top or bottom calling is a profitable endeavor. Rather, stick with some basic tenets for investment success. They always (regardless of bull or bear) remain the same. But a warning: They are simple to articulate and write down but often hard to execute:

Stay permanently flexible.
Stop your losses.
Let your profits run.

I would tread with some caution here. The case for supply "destruction" is somewhat overstated in the short run as significant reserves have been added in the last two years; whereas demand destruction is quite evident. Factor in LNG with no place to go, and there are a few calls for $3.50 gas in the industry.

Thanks for the warning, I have close stops and will move them up. I am thinking that the $3.50 calls for gas at this point are similar to the $200 a barrel oil warnings back last summer before July 16, a sign of the reversal point.

Who knows?? We are all traders as Bill says.

just looking over a few more charts and i noticed another critical
influence of miners moving to a bullish stance along side gold:

for much of the rise in gold the past year or two youve often seen the miners jump up fast on movements. strong volume breakouts aside the prices will move when gold gets moving.

what we tend to see during short term tops and unsustainable rallies is gold miners jumping along side gold, and then sliding down during the day if the POG remains stable. a more short term signal is when the miners run back down and fill the gap by EOD when gold itself stays flat or moves up slightly.

when a constantly rising gold price through the trading day is required to keep the miners holding onto any gains made after the initial run up, i deem the run to be short-lived and possibly the set up for a plunge.

coupled w/ the Technical posisitions of many of the miners (ABX,GG,NEM) the price aciton is all the more critical as the closing or gap at the moment on these charts is above/below or at 200 MA which are on the cusp of turning upward. these are paradigm changes in my book that take weeks if not months to fully suss out.

today's action to me will be very very critical to examine. any slide into the close despite a stable gold price portends more ST weakness in both the miners and gold. but if these levels hold as previously posted by someone earlier today, i think the turn will slowly begin to happen.

these moves in gold are all the more impressive in the face of USD strength right now.

if only crude can follow suit.

Probably not too surprising to some...

The government used the press to drive down the share prices of some of the UK's leading banks to lower the cost of nationalising them, MPs were told today.

"The government, knowing it was about to acquire large chunks of these banks was, I sense, using the press to force down the share price," Jenkins said.

"Ministers and officials were de facto insider trading and using the journalists to that end.

"I would like to know from internal government sources how far they instigated it, who was leaking and for what purpose. It was clearly designed to rig a market in my view."

http://tinyurl.com/b3326b

Vinod, Kudos on being wrong 3 out of 4 times and still churning a profit. Imagine your gains when the law of averages swings your way. Great trading.
Bob

Chickenpookie
couple days ago you listed stock you are watching LNN/CCC/FLS/BMI
they all doing very good, wish i brought some

vb

For a company whose stock just fell 90% in one year, well, sentiment changed quickly. Haven't seen any specific news; from a TA view,(I'm a total neophyte), that huge volume spike must mean something.

Traders may feel that RF is 'better off' than other banks. Don't know yet.
Personally, my business parks all its cash at Regions. My partners and I are worried. We get great service from Regions here in Miami. It's why we switched over from BAC. I subscribe to the famous words of Tanta: "We're all subprime now!".

As for speculation: Wilbur Ross announced that he'd buy a bank in Jan. He did; a small FL bank: http://tinyurl.com/aklrmg

Maybe Regions is in his sights.

Me, I'm just trying to stay on the plus side this year, as in shooting for absolute performance returns as opposed to last year's cold comfort of 'relative performance' beating returns.

Not advice, but I'm taking profits when I can. I'm not interested in dealing with the intraday volatility anymore.

nice job

now

White House Now Plans Limited Bank Aid Package
Thursday February 5, 2009, 8:59 am EST

The Obama administration has decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce them next Monday, according to a source familiar with the planning

http://finance.yahoo.com/news/White-House-Now-Plan...

That sucks! So frustrating I as a citizen had no vote or say. I need to move out of this country sooner than later.

The markets will speak and i hope it crashes on the news next week. when we had tarp 1 it also tanked.

So the bad assets are not being eliminated. just moved from the balance sheet of hb&b onto my back, the tax payer's backs. wtf!

I am enraged!

Easy there chief....could be worse. ; ' ) You could be working a factory line taiwan for 1$ a day. Though we have many problems, good ol'e USA is still where its at.

Get into PM's today NYU or still cash?

I'm heavy into PMs which lost egregiously so far, but I am holding and will buy more as gold/slvr pull back. Watching FAZ/FAS & QID/QLD

I'm with you but even more enraged because we have two small children and it's their money the all-knowing government is spending so noone except the little guy has to bear any losses for poor investment decisions.

What I would love to see is a list of who still has their money deposited at any of these failing banks and also a list of who stands to lose if these banks go down.

401K America is down around 50% right now so it's unlikely they'll lose much more if we say goodbye to these inept banks. It must be government pension funds who would be on the hook.

Also, I wonder if it's foreshadowing that Obama is using the same rhetoric for Tarp II that Paulson and Bush used for Tarp I. Except Obama also threw in that "we may never recover if this bill doesn't pass".

And why isn't anyone focusing on the over 9 Trillion we've already promised the banks. These Tarps are just a sideshow compared to that amount of money. Last time I heard almost 4 Trillion of the 9 has already been used up by whoever is getting it.

My question is what's in Tarp II that will fix everything that 4 Trillion and another 5 Trillion in promises hasn't fixed yet?

Rob.

Back to 100% allocation @ $910

Anyone hear that the stimulas package will be passed today>? If so, that will cause some action -

Gold has a lot of enemies.

Check out this email letter i got from my property mgmt company, who does an excellent job btw. Not suprising as my tenants are current but often late. I am a pretty agreeable landlord. If tenants cannot pay rent, how are they supposed to buy a home? just a report from the battle field.

Dear Homeowner:

As we are sure you can appreciate, the current state of our economy is causing ______& Associates to be especially vigilant and diligent in managing your property? and in taking steps to protect your investment in that property. As the economy has tightened one of our increasing challenges has become the timely collection of rental payments.

Since the last quarter of 2008, we have noticed a significant increase in the number of returned rent checks?returned due to "insufficient funds".
In an effort to insure the receipt of good funds from your tenants, we feel that Company-wide we must enforce the policies regarding late payments just as they are spelled out in our leases. Up to now, we have tried to discuss individual situations with individual landlords, but our legal counsel has advised us that we need to apply and enforce all rules and policies systematically.

So that you are fully in the loop, we want you to know that effective March 2009, if a tenant is late with their rent, then in all cases ?after the 10th of any month ?our office will require receipt of certified funds and/or money orders from any delinquent tenant. Our leases already provide for this system.
What this means is that any rental payment received in our office from a tenant as a personal check after the 10th of a month will be declined and held in pursuit of certified funds.

Please be advised that your tenants have been appropriately notified in detail of this policy and its strict enforcement so as to ensure smooth operations.

Thank You for your understanding the necessity of our being uniform with these rules and above all? Thank You for the opportunity to be of service. We do sincerely appreciate your business.
Best regards,

This is why I began exiting the real estate market last year, although a bit late because of my commitments to tenants. A couple years ago I began anticipating rental property proceeds meeting competition from falling home prices and new financing opportunity as home sales began cooling. Just 6 mos of lost income has a profound impact in many ways.

I doubt this lease provision is enforceable in court. In other words, proof to a judge that legal payment was attempted may negate any eviction action. At least it would up here in civilization. In North Carolina, it may be a different story.

I don't get something here: silver once again moved up today, but SLW moved up only marginally and then collapsed back to its yesterday's level! This nonsense has to stop at some point. So I just bought 500 more shares of SLW at $6.62, placing a sell limit order at $7.58 together with the previous two share lots I purchased at this level last week at the same price.

Are the people that got the slw stock for the capital infusion able to sell it right away or was there some stipulation they had to hold the stock for a time period like an IPO? Maybe this is slowing SLW down.

Shark,
Yesterday about mid session you made a cameo apperance and said AUY was about to break out. It was around $8.30.
Today it did gap up and now is up around $8.50.
What did you see yesterday that led you to believe AUY may break out. Thank you in advance.
Bear E

Vad, Thanks as I was about to nibble at FAZ until I saw your note, which allowed me to take some caution.

Just a real basic breakout on a daily chart. It failed yesterday, because the gold gain dropped by about half, (as it did again today) and the market did also. All I know is, one of these days Yamana will no longer be an 8 dollar stock, as it is no longer a 7 dollar stock, nor a 6 dollar one, as it has recently been. The real sharks of this business play around with the price constantly in order to accumulate enuff stock, then one fine day when yer no longer in it it will zoom.

>2 bedrooms are 2100.00 and 3 bedrooms are 3000.00.

Damn that's expensive VB, especially for a recession and 0% rates. Is that the price in LA or everywhere in CA?

Large volume on WY 25 Ps ($ up 40%). Same thing happened with the AKAM 15 Cs. Somebody is buying, so somebody is selling, straddles still the best for risk management.

Netanyahu expected to form a new right wing government.

Allied with N. will be Lieberman who leads a small harder line party.

Will this event influence the prices of gold and oil?

Love this website.

Thank you, terryC.

I glean a lot from this place. Most of the posters are miles ahead of me in TA and other areas and this is my small way of trying to contribute to the knowledge.

Besides, Bill asked me to do it. How could one turn him down after all he does for us?

Regards,

BH

OUT with very small profit....haven't liked the action the last 2 days. Happy to be taking very small profit.
Will likely buy lower. Its an addicting trade as I have not had to stop out of it yet.
Sell 500 shares UCO at 10.04 Stop Loss Day 02/05/09 Filled

02/05/09 14:48 Filled 500 at 10.0599

Now might be the time to consider putting money into oil, for those that haven't yet. From Haraatz, a liberal Israeli newspaper:

>"Benjamin Netanyahu will apparently be Israel's next prime minister. There is, however, something encouraging about that fact. Netanyahu's election will free Israel from the burden of deception:

Netanyahu's election is likely to bring the curtain down on the great fraud - the best show in town - the lie of "negotiations" and the injustice of the "peace process." Israel consistently claimed these acts proved the nation was focused on peace and the end of the occupation.

Netanyahu would offer something else. First, he is a faithful representative of an authentic "Israeli" view - an almost complete distrust of Arabs and the chance of reaching peace with them, mixed with condescension and dehumanization. Second, he will finally arouse the world's rage towards us, including that of the new U.S. administration. Sadly, this may be the only chance for the kind of dramatic change that is needed.

http://www.haaretz.com/hasen/spages/1061736.html

Have made nice short entries lately. I expect a new range to be established after 830AM CST tomorrow. Which way will the narrowing wedge break?

GEOY go see.

i enjoy boy hoye's work, fairly lucid without the douche-baggery of most gold/oil bugs, good simple update from him on crude

http://321energy.com/editorials/hoye/hoye020709.html

Yes, Geoy(a stock I have been following for months) took off this afternoon after publishing that GEOY-1 photos are now available for commercial sale. NGA certification is now assumed assured. Stock already up 20%. Long Geoy in early stage of run-up today.

02/05/09 04:07pm
[ESLR] Evergreen Solar Inc Reports Q4 -$0.32 v -$0.14e(incl charges), R$44.2M v $46.7Me

More good times with Mr. madoff.
http://tinyurl.com/8aphb9

I just called ProShares to see if they agree with me about UCO moving up next week, and they corrected my reasoning by saying that the Dow Jones-AIG Crude Oil Sub-Index (^DJAIGCL) tracks the *daily* returns in whatever futures they are tracking. So next week they will simply roll gradually from tracking the daily return in March futures to that of May futures.

So I guess I'll have to sell the UCO I have accumulated "the normal way." That is, I am placing a sell limit order at $10.50 for the shares I picked up at $9.50 and at $10.90 for the shares I picked up at $9.77.

That's too bad. It sounded like such a great plan. Too good to be true I guess.

Rob.

What if the rest of the world was doing the same.....and we are hoping they will pull the curtain back on the Wizard.....but they can't for fear they will be exposed too?

I need a drink. This one's to Kaimu.

SLW closed up today on marginally higher volume. Rising volume as it climbs now would be a great sign.

Would it be too easy to expect the dollar to tank and commodities to rise after Tarp II passes?

If I'm thinking about it, most people must expect it.

Rob.

If you back out the charges the EPS is -.07. I read this as beating the numbers.

"Common Sense took a beating when you couldn't defend yourself from a burglar in your own home and the burglar could sue you for assault."

This is thankfully not the way it works here in Texas. You know the hunter in the cartoon "Southpark" who get's away with poaching by yelling "He's coming right for us!"...he then kills the deer "in self defense". It's basically the same in Texas. Intruder breaks in, you give him a few .45ACP center body mass. When the cops show up you simply state "I felt threatened. He came at me in an aggressive manner". That's all you have to say. The robber is no longer around to sue you, nor can he provide testimony against you. Case closed.

dboy

CP, I'm reading the article again right now. I was so busy during the day all I could do was scan it once or twice.

This is the tell "In effect, the Fed will guarantee to buy up the unsold proportion of the debt issues, but indirectly via the primary dealers, preserving the important illusion the central bank is not monetizing the government's borrowing.

The deal (banks guarantee to buy the whole issue, and the Fed guarantees to lend them the money) is attractive for the banks because the Fed will be lending short-term funds at an interest rate close to zero while the banks will be buying assets yielding 2.5-3.0%...."
http://tinyurl.com/aabdhn

"This is the tell "In effect, the Fed will guarantee to buy up the unsold proportion of the debt issues, but indirectly via the primary dealers, preserving the important illusion the central bank is not monetizing the government's borrowing."

It seems too easy doesn't it? Like shooting fish in a barrel.

"This is the tell"

I learned more about treasuries in that one article than in anything related to that topic in the CFA program. (the CFA is bull$hfeathers btw).

dboy

Its hard to find an article that is positive on Natural Gas but here is one that has some of the thinking I have embraced in entering a UNG position. My finger is always near the sell button though in this environment.

http://www.pennysleuth.com/natural-gas-ep-stocks-s...

Reuters - "NEW YORK, Feb 5 (Reuters) - U.S. stocks extended gains on Thursday as shares of financial services companies sharply cut losses on talk that Washington's rescue plan for banks may include suspension of a key accounting rule, traders said.

"The market suspects there maybe a suspension of mark-to-market accounting as part of the plan coming out of Washington to shore up the financial system," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "It would be very impactful."

http://www.reuters.com/article/marketsNews/idUSN05...

So it turns out Bank of America was pressured by fedgov into buying Merrill after they started having big doubts about the deal. I have suspected this for a long time as I don't think Ken Lewis is the idiot that this situation is making him look like. Now that we know this, one could say that the fedgov now "owes" BofA. Wonder what the payoff will be ? (disclosure: ex-BofA employee, neither long nor short).

dboy

If indirectly monetizing the debt like this works then could they have no limit to how much they can spend?

If the rest of the world is playing the same game and won't be upset with any amount of debt we create and buy ourselves then does that change the meaning of debt for the largest players?

People under a certain level would be expected to pay their debts on time and people over that level would be allowed to play the debt shell game with themselves or anyone else willing to play. In essence, the bigger players could grow indefinitely by increasing their debt every year and create the illusion of prosperity, never having to make a dime or pay back a dime.

Rob.

I think the world is doing it much the same — dueling wizards. A lot double speak a la 1984 coming at us from all directions. Accusations of currency manipulation — so who isn't?

For all the talk of restoring confidence — how about, "The truth will set you free." It would be nice for a change.

I've read Europe is in worse shape than we are and great Britain is worse than the EU. We e-mail regularly to several London friends who don't complain too much, but have been getting shafted for so long they may be a bit numb.

As for Europe, I haven't heard much about it lately, but when the Wall went down they absorbed a lot of people from the communist bloc who were in very poor economic condition. That must still be a drag, I expect.

CP, I especially like this part "The deal (banks guarantee to buy the whole issue, and the Fed guarantees to lend them the money) is attractive for the banks because the Fed will be lending short-term funds at an interest rate close to zero while the banks will be buying assets yielding 2.5-3.0%...."

The great income redistribution scam! ...borrow near zero interest and get a guaranteed taxpayer funded interest rate of 2.5-3.0%

The citizens are losing life savings, jobs and homes, but the banks get the citizens money, compliments of the citizens freely elected government. What a great deal!

...and all you need to be is "Too Big To Fail". Ain't America great!

Barry, thanks for the informative article and I also like the chart. I follow petroleum and have played the dips via UCO and occassionally other ETFs and stocks. But, here on the U.S. east coast we will be coming out of winter in a few weeks. That means less demand for heating oil/gas/coal/wood.

The demand will move on as other areas fall into winter, but I do not have any stats to indicate the level-of-need for heating energy. My guess is that it will fall. Most autos do not run off of NG, so I am staying clear of it.

I have a hunch petrolium prices will fall further, which makes me nervous playing with "the knife" aka UCO.

You got it FL. The emperor has no clothes. It's as if the sovereign governments & banker-buddies think the Ponzi scheme can go on forever!

"Michael Steele has requested the resignations of the entire RNC staff and signaled a dramatic turnover at the party organization." http://tinyurl.com/awdckt

Johnny - Yep, some call it a Ponzi scheme, kaimu calls it dishonest money, others believe it's a game of shells. Here's someone's attempt at explaining the process in flowchart form, although I believe they've unnecessarily overcomplicated the process:

http://www.geocities.com/rebornempowered/mandrake/...

I remember the big run-up of gold to $850 a few decades ago. The story at that time was that gold was a good hedge against inflation. However, it soon became apparent that gold went up because people believed the story that gold was a good hedge against inflation. So it arced up parabolically and then, just as quickly, came crashing down. That really left me with the impression that it is the story, and people's belief in the story, that is important. Of course a good story is always based on something true. But somehow it gets ahead of itself and competing ideas cannot be heard. Thus oil and commodities in 2008 and thus treasuries and the dollar as the "safe currency" now. How to profit from plausible stories without getting sucked in, that is the question. Perhaps by listening intently to the counter-arguments.

I'm finding more and more that I tend to substitute long hours of reading blogs, which is addictive, for thinking on my own. Of course you need to do a certain amount of reading as an aide to thinking. But how many of us, for instance, come up with our own indicators, like Alexander Elder, or even understand the underlying mathematical construction of the indices we use, as opposed to just use them based on experience? I know I've been too busy reading and too lazy to do that myself.

Barring unusual weather, I'd expect demand for natural gas to vary less from history than I would oil.

My understanding (and this is based on not much in the way of evidence) is that oil is used to produce all sorts of transport fuel (gas, diesel, jet fuel) and plastics (consumer goods). Recession lowers demand for all of these things.

Natural gas is used for heating (not many people going to scrimp here), electricity (they might try, but it seems to me changes in electrical consumption behavior make a marginal difference to my bill, so i doubt change would be significant), a/c (part of electricity really). These things, I believe, are a lot lest demand-elastic. There is also nat gas use in fertilizers and oil sands production, first being probably less elastic, oil sands aren't yet being shut down, just project on hold, so consumption there should hold steady.

A quick search found some data on govt site:

http://tonto.eia.doe.gov/dnav/ng/hist/n9140us2m.htm

Compared to previous year, consumption was higher in 2008 in months

Jan, Mar, Apr, May, Jun, Jul, Oct, Nov

and lower for 2008 in

Feb, Aug, Sept.

Granted the recession is deeper now, so maybe consumption will drop, but so far, no indication...

So like the article says or at least implies, the storage numbers now are driven by overproduction, not reduced demand. And when production cuts start taking hold, it's easy to see the stocks declining rapidly.

Long (and occasionally burned by) HNU.TO

Canadians should be happy that a normal person wants to come here in winter.

Earnings did come in below the guidance provided in their Q3 report. They gave a range of $13-19 million for their net loss and it came in at negative $23 million. This was due primarily to the reduction in average sale price and the stronger dollar versus the euro. They have fared no worse than other companies facing "challenging" economic times.

Management has wisely chosen not to provide future guidance given the uncertain economic times we live in. They have no control over prices, but they have been hoeing a close row when it comes to meeting their goals for developing large-scale production capacity.

That said, they should reach sustained profitability in this quarter or the next. We'll have to see. What distinguishes this company is the large start up costs they have been incurring as they move from a R&D company into commercial production. On that score, they continue to hit their marks.

One of the more intriguing revelations in their conference call was that the company was in negotiations with asian electronics manufacturers about sub-contracting their solar panel assembly. This would significantly reduce their production costs and allow them to focus on their core business of manufacturing string ribbon wafers.

They have enough cash on hand to get them through completion of the Massachusetts manufacturing facility and their Michigan materials plant.

The wild card in all of this is the pending U.S. gov't stimulus package, which many expect will feature development of energy alternatives. Evergreen could not be better situated for this.

If the stock opens down substantially in early trading tomorrow morning I'll be opening a collar on the Jan '10 2.50 options.

>Common Sense lost the will to live...

I disagree. Common sense was murdered! *play dramatic music*

*Voice of reporter* Detectives on the case reasoned that suspect A, capitalism, an old hand at the game and looking for new profits, got into bed with suspect B, legalism, in order to plunder new depths of depravity.

Detectives suggest that the suspects' actions show sufficient motivation for the murder of common sense and an APB has been put out to all units for their arrest.

Although detectives have their suspicions that there was a mastermind behind this nefarious plot, due to insufficient evidence they are unable to pursue the matter any further.

*voice of detective answering a question* Ladies and gentlemen, citizens' 'Wall St' and 'Capitol Hill' have refused to respond to our inquiries, citing executive privilege, therefore we have no alternative but to let the status quo continue. We do similarly share reservations with yourselves that a new player, 'advanced technology', will complicate efforts to redress these issues in the future and we can only hope for the best.

http://tinyurl.com/crqk3s

We know what Katie's talkin' about.

If there is a play in Natgas this spring, it should be in the next few weeks. I wish I had better charting but you can line up these two charts and get a view.

Seasonals here
http://www.seasonalcharts.com/future_energie_natur...

verses Storage, the storage anticipation buying might rise soon(or already be happening).
http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs...

By the way, oil follows a close pattern seasonally and I was looking for my entry about option expiration day. FWIW

http://www.seasonalcharts.com/future_energie_crude...

While this does fine in bullish years, this is the first bear of this magnitude I have experienced trading and I am very cautious as you seem to be as well, Good luck!!!!

So far I couldn't have been more wrong on the day. Hope everyone is on the right side and making money.