Bill Cara: Cara’s Daily Commentary, Thurs., May 24, 2007, 8:55 AM

« Stressed out, Wed., May 23, 2007, 4:50 PM | Main | Cara’s Daily Commentary, Fri., May 25, 2007, 9:25 AM »

May 24, 2007

Cara’s Daily Commentary, Thurs., May 24, 2007, 8:55 AM

After strong moves up in the middle of the day yesterday, the broad market then took a deep breath as former Fed Chief Alan Greenspan reportedly talked about possible overvaluation in the Chinese stock market. The DJIA (-14.3 pts -0.11 pct) and NASDAQ (-11.0 pts -0.42 pct) closed lower on the day.

For the second straight session, the S&P 500 traded at a record intra-day price, and then lost ground as the day went on.

Once again, deals (SRR/PSS), deal talk (DJ, AL/BHP, FCX, IGT) and strong earnings (TGT, DKS, MW, TLB, TWB) helped the market. But, on this day it wasn’t enough.

The negative was the gloomy bond picture, as yields lifted (10-year 4.859 pct and 30-year 5.014 pct), taking the 30-year T-Bond down -0.31 pct to 109.25, and Crude Oil ($WTIC +$0.26/bbl) where prices lifted to 65.77.

The bellwether Semiconductors (SMH -1.80 pct) and Utilities (XLU -1.48 pct) led the way south. On the other hand, the broker-dealers (XBD +0.40 pct) closed a little higher.

Let’s see if the Gold stocks ($XAU +1.61 pct) can keep things positive.

For sure it will not be ex-Cara 100 Toll Brothers (TOL), which just announced plunging earnings.

Economic calendar

Econoday weekly report.

Today there is a lot of important US economic data out: Durable Goods Orders and Jobless Claims (at 8:30am ET) and New Home Sales (10am). On Friday, we learn the US Existing Homes Sales data.

US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

The air coming out of the US equity balloon was loud and clear after Greenspan started talking about valuations in China. Just like Goldman Sachs a few days ago.

It’s time for the “B” Team to step in and replace the “G” Team. The “B” Team realizes that those who point fingers ought not be living in glass houses. The US is so weighted down with its own problems, why does the world listen to these people who seem to think they can point elsewhere.

I say to the “G”-men, fix what’s broke in your own home before wasting our time with your complaints about China or Japan or Russia or South America or the Middle East or whatever. After a while, doesn’t it seem like these people are trying to change the focus on what’s truly important?

International Equity Markets Review

Here’s the latest session data for the Asia-Pacific markets.

Lots of red arrows in the Eastern sky this morning.

Here’s the latest session data for the bourses of Europe.

At mid-session, the European bourses are all showing red arrows. That’s not a good sign.

Bonds & Yields Review

Here is the T-Bond chart.

More pain for the holders of the US T-Bond. Last trade yesterday was 109.2500 despite a pick-up at the end of the session, down from 109.59375, after hitting a low yesterday of 109.09375.

Ugly, if you are a bond Bull.

Forex Review

Here is the $USD chart at the close of the prior session.

Some radical $USD moves – Mon and Wed morning, for example.

Presently at 82.347 (about 7:40am ET) with a high of 82.439 in the early am, the $USD has dipped a bit, but the real big dip was yesterday morning.

Commodities Review

Here is the $CRB Index chart.

Closed marginally up on Wednesday at 311.69. Yesterday, I opined that after (Tuesday’s) “down day (-5.07 -1.63 pct), with oil and PM firming here, $CRB ought to begin to rally.” Voila. But we need to watch the metals and PM’s. Greenspan, Goldman and the G-Team have it in for China and metals and PM’s. They’d prefer we rally behind the flag, ie, the $USD.

That might be the right thing to do if they’d stop printing money like they are out of control.

Oil Review

Here is the e-miNY July-07 Crude Oil chart.

Last at 65.42, after zipping to an overnight high of 66.125. Ouch.

Now we see that the FOMC trading desk has turned on their PC’s and gotten to work pushing down the oil price.

But isn’t that like pushing against a string? The IPE Brent in Europe is now over $70. Now, that’s painful!

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

Gold & Precious Metals Review

Here is the Jun-07 Gold futures chart.

For all the moaning going on, the five-day picture for the June AU futures doesn’t look that bad. June Gold futures last traded at 660.5, which is a small bump, but we’ll take it.

Here is the Recent Spot Gold chart.

This morning at 8:27am ET, the AU spot price was at 660.05.

Here is the Recent Spot Silver chart.

At 8:28am ET this morning, the AG spot was 12.99, exactly the same as at this time yesterday, but off the early morning high of 13.05.

Here is the Recent Spot Platinum chart.

Platinum has been soft, but stabilized somewhat yesterday. Today at 1292, the price is almost the same as yesterday at this time.

Spot Platinum was at 1315 at the end of last week.

Here is the Recent Spot Palladium chart.

Palladium has moved back to 371 from 374 at this point yesterday. There seems to be a 368 floor that I think will be tested today before going higher.

Precious Metals Stocks Review

Here are the Daily and Weekly Data charts of the indexes:

Interactive Chart of Daily U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

The U.S. goldminer share trust ETF trades under the ticker symbol GDX.

The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.

Here are the Daily and Weekly data charts for the TSX Goldshares (XGD) index:

Interactive Chart of XGD Daily data:

Interactive Chart of XGD Weekly data:

To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows:

ABX NEM GG GFI KGC AU HMY AUY BVN
Interactive Daily data
Interactive Weekly data

MDG LIHRY AEM BGO IAG EGO RGLD GOLD CDE GRS
Interactive Daily data
Interactive Weekly data

CBJ SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI
Interactive Daily data
Interactive Weekly data

KRY came off -0.14 (-2.8 pct) yesterday. The KRY-babies just are besides themselves waiting for an environmental permit. I say it will come when it comes, and the Company’s man Richard Marshall will be there to report it. I’m sure the news release was written and pre-authorized many moons ago.

NXG GSS MNG DROOY MFN RNO RANGY MRB CLG
Interactive Daily data
Interactive Weekly data

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

After saying yesterday morning, “some of the silverminer stocks are exhibiting positive signs,” they did more of same.

This data is supplied every day by the folks at KNOBIAS, Inc.

Here are the previous session’s Cara 100 gainers

Interactive chart of the top 12 Watch List gainers

Here are the previous session’s Cara 100 losers

Interactive chart of the top 12 Watch List losers (Interactive link)

Here are the Cara 100 stocks that hit 52-week intra-day highs or lows in the previous session

Here, from “Chris”, are the interactive charts of up to a dozen stocks with (unsmoothed) RSI-7 above 70 and below 30, from “Chris”:

RSI-7 > 70 (12 of 17)

RSI-7 < 30 (6)

There are 6 Cara 100 Company stocks that are below 30 on the Daily RSI-7 versus 17 above 70, using data from “Chris” – which he takes from BillCara2.com, which is not smoothed like David’s data, which he takes from Worden.

Here, from “David”, are the stocks in the Cara 100 trading with the highest and lowest Daily RSI-7 sorted by (i) daily and (ii) monthly values, for the previous session.

Here are the stocks in the Cara 100 trading with highest RSI-7 with Monthly-Weekly-Daily all either >70 or <30

Here are the stocks in the Cara 100 trading with RSI-7 Daily all >70 or all <30.

After dropping down into the Cara Accumulation Zone for some time, there was a Buy Alert Tuesday for WFMI. Now the Daily RSI-7 is up to 37.17 and rising.

When the Daily RSI-7 crosses back above 30 (using the Welles Wilder Smoother at Worden Bros.), that’s a Buy Alert, which then makes me look for a rising MACD and Stochastic, probably with cross-overs between the shorter-term and longer-term lines. I take in all these technical indicator clues to help with decisions. It’s a terrific discipline that over long periods of time works.

In Focus

On Tuesday and yesterday, the casino operators were the talk of the market. Doesn’t that Kirk Kerkorian look great for a man almost 90? Still a powerful force in Las Vegas and in money centers around the world. He gives us young folk something to aspire to.

You see, once you get hooked by the capital markets, you don’t look back until you cannot look anymore. It’s just that way.

But, for today it will be all about TOL.

For whom the bell tolls; it’s a sad story that traders ignored at the cycle peak two years ago when I SCREAMED that CNBC was fleecing the lambs with their cross-nation bus tour, examining all the “hot” spots in real estate. “Buy More. Buy. Buy. Buy. Forget the price; it’s only going to be higher next month.” Yes, I remember those two realtors from Miami that CNBC interviewed. I called them bimbos. But, really, bimbos should never be put into such a bad light. The language that came out of those realtors mouths would put the world’s greatest liars to shame.

Look at the Miami picture now, ladies.

At the time, I wrote that this was a classic case study of a market cycle peak in the making. Books will be written, I said. These melt-ups never happen without somebody putting fuel to the fire. Thank you CNBC. You really showed your colors in the Summer of 2005.

Wall Street upgrades

Wall Street recent downgrades

The story here is that HSBC Securities, which is a prominent firm that has a high-profile mining analyst, has downgraded three Precious Metals stocks (HMY, IAG and BVN) and upgraded three others (RGLD, AU and AEM). I do like RGLD and AEM.

There have been a number of recent Cara 100 downgrades (CEO, SNDK, CVX, DOW, LLTC…). When an analyst downgrades a stock that usually means there is a valuation issue. It’s almost always not a swipe against the company, but against the price of the stock relative to what that analyst sees going on in the company, the industry, etc. Almost always, these analysts will subsequently change their ratings.

So ratings are one yardstick. Sometimes they are helpful, and sometimes not. Once when I worked for a major US-based HB&B, we used to bet against one particular analyst (not saying who) because we figured he had to be the world’s worst market timer.

There are various sources for up/down grades by broker-dealers. One is at Briefing.com. Traders ought to check everyday for ratings changes. That website updates in the morning.

Community Chat

Yesterday was another slice of life. Some time ago, I started a blog, like doing daily crossword puzzles, an opportunity to exercise my brain. Then I could see how my experience in life and my perspective on capital markets could be used for teaching, which most of us would agree is one of the noblest of life’s missions. That led to – well one thing led to another – the blog became popular, I was being called ‘populist’ in the mainstream media, and the world leading book publishers came calling with opportunities.

But all through the piece, I have been learning ways to keep this little blog that grew from going corporate, which meant I had to learn html, links, uploads, screenshots and FTP and take self photographs on my tiny digital camera. In other words, to continue to be my ‘eccentric’ self, I needed to be a one-man show.

I could have hired an assistant, set up an office, run ads, taken fees, and the like, but six years ago I had left the corporate world and I didn’t need to go back. More importantly, I never wanted to go back. So as ridiculous as my self photo might look, or my shots of the geese, ducks and swans that surround me in my home on the shoreline of Lake Ontario, away from the noise and bustle of the city, it is fair to say I have been doing my thing, not the corporate thing.

Then along comes the right book deal – a small publisher, but one who specializes in capital markets, books like “The Rules of the Hong Kong Stock Exchange” and stuff like that. I choose them because they are entrepreneurs. While the husband was founding and operating the hugely successful Bermuda Stock Exchange and consulting to stock exchanges, securities commissions and people like Sheik Mohammed bin Rashid al-Maktoum, crown prince of Dubai, the wife is editing and publishing some 200 books, none of them from “a trading blog rock star who has a cult for a following” as she says.

I wouldn’t know who that is, but I do know I like the people and the personal touch. You see, if I am going to get back into the money business, the last thing I want to see are boardrooms and committees, and the rest that comes with it. Because they offered me that luxury, I decided to give them a deal to be my blog administrator as well. The latter was necessary because once I get to Bahamas I won’t be able to keep up my usual pace. Besides the public utilities there, like any Caribbean island nation are not say as reliable as Toronto or New York, yet.

So when my new reps (“my people”) told me the blog photo has to go, I understood. I called a friend who is Mr. Multicultural Media who says he has a photographer friend he wants me to meet. I agree, but despite the publisher’s deadline, the man is somewhere in Western Canada, and upon his return there might be a rush to get in to see him.

Yesterday, in the midst of teeth-gnashing over changes to my literally home-spun blog that look to me awfully corporate like, I get a phone call. He says, “You have 75 minutes to meet me at a Starbucks near the Mississauga Hospital and we’ll go from there to meet the photographer who lives out there in a place I cannot describe too well.” OK, I say, done deal.

So I give you the mock-up link (the responses are terrific, thank you) and I rush off with a complete wardrobe, just in case.

As I walked in to the photographer’s home, he’s watching a business related news story – diamonds in Africa or something – and I think I recognize him. “I think we know one another, right?” He replies, “Broker. Financial District. Right?” That’s when I renewed acquaintances with George Onuska.

Now before you Google Onuska, here’s what I found:

So after a chat, George says, “Let’s go into the yard. It’s 6:45pm and we’re losing the sunlight.” He snaps off 24 photos in a couple minutes as the three of us chat around the table, and he says, “I’m just having some fun with this. I’ll give you a disk, tell me what you like and that will give me an idea of what to do when you come back. In the meantime, I’ll look at your blog.”

Then he says, “By the way, do you still trade stocks? Have I got a stock for you. And by the way I just came back from a mining property with so and so and so and so.” I knew them all, so he starts rhyming off names, probably 20 or 30, and I knew most of those. Then he starts phoning people thousands of miles away to tell them he has me at his place.

So George will probably join our community. He’ll tell you about stocks – uranium, moly, maybe even copper-gold porphyry stuff. My kinda guy.

Not bad for a world-famous photographer.

And thank you for all your comments. Keep them coming. Here’s the link again to the recommended design change. As I say, it is a work-in-progress mock-up only, and the graphic artist did not finish the task because I needed some time to think about the change implications.

I’d like the community to send me whatever thoughts come into your head. I’ll have a business strategist I rely on to review your letters and tell me whatever’s on your mind. That way, we’ll both decide on how this blog looks in future.

For those who feel up to it, please send comments to surveyleader@billcara.com, with the subject header “My thinking” or whatever. That will help choose the direction I take.

That reminds me of a story I heard in business school 40 years ago. A developer of a new campus of buildings purposefully did not do any landscaping or paved walkways for a couple months until well after the residents had moved in. Then he simply paved the areas where the people had walked, and he landscaped appropriately. I have never forgotten that.

When you build something, it’s always for the user. It’s never about the builder.

So, before I have George shoot me professionally, here are two photos to choose from. After you let me know which one you prefer, I'll drop the loser. And please don’t tell me I broke the camera. I’m just trying to get into my Arthur Hailey ‘look’ before heading to Bahamas. Hahaha.

And I'm not worried about the weight. I'm taking only a 'medium' size swimsuit with me, which won't fit somebody who weighs 225 lbs. I'll lose 25 lbs, and keep it off. (LOL). Sorry about the size of the screen capture. I'd make it smaller (and easier to take), but time is running out. I have people to see, places to go. :-)

[And the winner (on a test) is]

Posted by Posted by Bill Cara on May 24, 2007 08:55:32 AM | Category: Cara's Bull Board

Discourse

Good morning Bill!

Last night Cramer said regarding Crystallex (KRY): 'No. Chavez don't give a darn about his people... sell, sell, sell! I want you out of that stock now. Enough with him. Enough with that country, unless they come around to our ways.'
Is Ivan going up finally? I'm not a believer 'till upside volume improves. Also watching GSS and AZK rather closely for signs of a turnaround.

Looks like Summer's here.

Chris

Posted by: shark_attack at May 24, 2007 9:14 AM [link]

great story and a smart photographer.. :-)!

Financial Firms Taking More Risks With Their Own Capital / Economist

Builders Laugh at Paulson? / Greenberg

Paulson, Wu Cool China Growth; Local Leaders Add Fuel

clik on my initials "jmf" to visit my blog

Posted by: jmf at May 24, 2007 9:16 AM [link]

Kry is collapsing...

Posted by: shark_attack at May 24, 2007 10:33 AM [link]

Bill,
I have expressed the Non-Defense Capital Goods(ex aircraft)as percentage of Durable Goods and plotted against the Amex Technology Index. It is interesting how it peaked during the investment boom of the late 90's and ever since it oscillates in a narrow range. It is approaching the higher end of the range.
I tought you'd be intereseted.

Posted by: Will Rahal at May 24, 2007 10:35 AM [link]

Great reading jmf, gracias!

And fwiw, I no more believe this spike in new home sales than I do in the Easter Bunny. I've yet to see the source of such and if anyone has it, do link it.

I live in one of the areas which has been in the top ten of fastest growing areas since such things began being tracked (ATL). As of right now, foreclosures in these new subdivisions exceed purchases as there are over 350 NEW listings for auction on the first Tuesday in June. Vacancies are so prevalent that price reductions and premiums like HDTV's & appliances are being offered, which would explain the modest rise in durable goods orders the last quarter...;)

Sorry folks and forgive me as I must call BS on today's Fed Economic Propaganda release. Just like the Imperial Congress, the Agencies don't trade in the truth nor the facts, for if they did we'd be in the midst of a second American Revolution as the Citizens wouldn't stand to be lied to at the same time their wallets were being emptied.

Posted by: redclaydawg at May 24, 2007 10:46 AM [link]

My contrarian senses are tingling on KRY....

Let's see if the monkey wins?

http://cramerwatch.org/

Can someone give me an idea on which options they would purchase to play this one?

Posted by: wavesmash at May 24, 2007 10:54 AM [link]

Wavesmash -

My contrarian senses tremble for the price action: a falling knife!

Posted by: Jock at May 24, 2007 11:02 AM [link]

Just for kicks I'm going to buy a couple hundred thousand $$ of KRY in my fantasy account and see what happens...

Posted by: wavesmash at May 24, 2007 11:15 AM [link]

Thank you Bill:

I finally tiptoed all the way out of IVN this morning near 150% APR on an investment you guided me to last year.

PS the first pix w/o the fist is the better of the two. The second looks like you are worried ;)

Posted by: C.Note at May 24, 2007 11:16 AM [link]

Folks,
Monthly MACD on gold is now negative. I am worried :( We need a close above 676 by month end for the MACD to remain positive.

Posted by: AA at May 24, 2007 11:29 AM [link]

Regarding pictures--I like the second (and emailed). Not a worried look, but confident, steadfast and no-nonsense.

Posted by: Leisa at May 24, 2007 11:44 AM [link]

Good morning, Bill.

Unfortunately, i think we're in the swoon period. I guess three straight intraday reversals was the tell. I'd like for this post to be a contrary indicator but i think it's time to just watch and get the buy list ready.

Posted by: mogwai8myball at May 24, 2007 11:48 AM [link]

ALOHA !!

Let me know if anything here rings a bell?

From the book "When Money Dies", by Adam Fergusson ...

- Speculation on the stock exchange has spread to all ranks of the population and shares rise like air balloons to limitless heights. My banker congratulates me on every new rise, but he does not dispel the secret uneasiness which my growing wealth arouses in me...it already amounts to millions.

- No people could be expected to remain unconcerned while huge profits and riotous luxury were ostentatiously being enjoyed by the few. Corruption bred corruption, and the Civil Service caught the infection even in the war years.

As the old virtues of thrift, honesty and hard work lost their appeal, everybody was out to get rich quickly, especially as speculation in currency or shares could palpably yield far greater rewards than labour. While the anonymous, mindless Republic in the shape of the Reichsbank was prepared to be the dupe of the borrowers, no industrialist, businessman or merchant would have wished to let the opportunities for enrichment slip by while others were making hay. For the less astute, it was incentive enough, and arguably morally defensible, to play the markets and take every advantage of the unworkable fiscal system merely to maintain one's financial and social position.

As that position slid away, patriotism, social obligations and morals slid away with it. The ethic cracked. Willingness to break the rules reflected the common attitude. Not to be able to hold on to what one had, or what one had saved, little as it worried those who had nothing, was a very real basis of the human despair from which jealousy, fear and outrage were not far removed. The air of corruption in business, politics, and the public service, then, was general.

- Most of them clung to the mark, the currency they knew and believed in, long after the eleventh hour had come round for the umpteenth time. Most had no choice; but all were encouraged or bemused by the Reichsbank's creed of "Mark gleich Mark" -- paper or gold, a mark is a mark is a mark. If prices went up, people demanded not a stable purchasing power for the marks they had, but more marks to buy what they needed. More marks were printed, and more, and more.

- Dr. Havenstein plunged on. Day and night 30 paper mills, 150 printing firms and 2,000 printing presses toiled away adding perpetually to the blizzard of banknotes under which the country's economy had already disappeared. Havenstein spoke of the efficiency -- the Leistungsfahigkeit -- of his printing system.

Such was Germany in the 1920s ...

Posted by: kaimu at May 24, 2007 11:54 AM [link]

A Rorschach on the pic survey, but personally think Leisa nailed it. fwiw, that was my choice when I first saw it and it's cool to have the words to explain it.

Even with my double shorts and heavy cash I've been getting chewed on and now trampled. T'hem gold stocks . The nimble traders win this round. Technically, longer term trend still intact, barely. And Leisa knew what she was doing when she bouht srs, the other commodity(short).

Posted by: jasper at May 24, 2007 12:05 PM [link]

For
- video commentary from Patricia Croft (PH&N Investment Mgmt) on the markets
- an OECD report on world economies

click on my initials "Wolf Stone" to visit my blog

Posted by: WolfStone at May 24, 2007 12:15 PM [link]

Well, now for a contrary opinion re: Bill's pixs:

My preference is for the first photo, with the hand although I don't particularly like the hand. The expression is warm and welcoming.

Kinda the way I imagine Bill to be in person.

I hate to disagree with my good online friend Leisa!

/GS

PS: And, yes, I did send in my comment, FWIW.

Posted by: GemmaStar at May 24, 2007 12:26 PM [link]

I agree with GemmaStar, the first photo. It struck me as extremely warm. Similar thoughts about the hand, maybe the hand could be removed.

Also, thanks to Leisa for her interesting blog and others here who link their blogs.

Mahalo

Posted by: Telestar3d at May 24, 2007 12:51 PM [link]

Holy Bell Cow! I leave for a while and all hell breaks loose!

Red, Red, Red....except for MU and any ultrashorts. Yikes.

The trick is to find something resembling exhaustion of this selling.

How are you all doing? Diving the Red Sea?

Posted by: Craig at May 24, 2007 12:54 PM [link]

We're gonna remove Bill's right hand? That doesn't sound good.

Posted by: Craig at May 24, 2007 12:55 PM [link]

Thinking outside "the box"......maybe too far...

Use both pics.

When bearish - use the second. When not - use the first.

Posted by: Learn2Invest at May 24, 2007 1:01 PM [link]

Bill,

I've come to think of you as the guy in the thumbnail photo at the top left of your blog. Were I you, I would go with that. Less is more. let your identity possess an air of mystery, to draw people in.

PS: was stopped out of my 3.9 KRY position at essentially breakeven after going profitable and being too dumb to sell.
Thinking of going back in.

Posted by: shark_attack at May 24, 2007 1:14 PM [link]

this is exactly why i'm leaning towards pring's advice on trading less and letting positions unfold over time...if you're holding gold today, why watch it...

Posted by: 2nd_ave at May 24, 2007 1:16 PM [link]

Lo all..sure is a lot of red on the board! Not underwater but waves are getting high. Any comments on the Gold Fields news, sale of 75% of position by Barrick?
Thanks Kaimu for the historical comparison. I just read these lines in a scary SF thriller..."never sugar coat the truth"
Re the photo, I was mostly in favor of door #2 as it is sharper but Learn2invest has a gooder idea, let the photo change as moods of Bill or the market change. I will say that the first photo is an inviting one. When I saw it I thought, ...hmmm Bill looks better.
Peace
Gray

Posted by: Photogray at May 24, 2007 1:27 PM [link]

To BUY it my friend!

But, you are right as far as holding and patience.

I'm learning too. I used to freak at times like this and think defensively. I did much the same as you have described 2nd. You know, i lost money. Now I'm a cold blooded bastard looking for killer deals when we get these downturns.

I must admit, MU and WFMI are easy to hold here.....Thanks to Bill! There is confidence in buying with a margin of safety.

Posted by: Craig at May 24, 2007 1:29 PM [link]

bill looks friendlier in #1 b/c he's smilin'...but i gotta go with #2...

Posted by: 2nd_ave at May 24, 2007 1:30 PM [link]

Here's a link to the Kirk report's Q&A from May 22.

http://www.thekirkreport.com/2007/05/qa_with_kirk.html

This came from Bespoke:

http://bespokeinvest.typepad.com/

Which is new from the guys who created Tickersense at Birinyi"s shop.

Some readers may find it interesting.

Posted by: Telestar3d at May 24, 2007 1:31 PM [link]

Telestar...thanks of your nice comments.

Jasper--SRS is tricky. I expected a bounce in IYR a few days ago and exited SRS. That thing moves fast against you. Plus, beware that the bid ask is quite wide in the a.m.. So it is very hard to establish a position (or exit one) at the open. You could always hedge that exposure in the beginning by doubling a short or a long on IYR which is quite liquid and small bid/ask gap. FWIW. I'm no trader, and this is definitely not advice.

I have posted my Part II on investor behavior--so if you're interested, please stop by and take a look.

Posted by: Leisa at May 24, 2007 1:32 PM [link]

Going with Dr. Edlers advice of trading with disciplin and plan, I am trying a new approach this week.
I had my wife change the passowords on all our accounts.This way I wil not make any impulse buying decisions. If I have a good idea now, I run it through her and the incredible charts.

No trades this week other than exiting LEH at 74.4, which started as a day trade last week.

Posted by: JogyP at May 24, 2007 1:44 PM [link]

World Gold Council's Q1/07 Update -
Jewellery Rebounds

• Jewellery consumption rose 17% to 573 tonnes, up 48% in India with a strong wedding season and 27% higher in China. Jewellery demand is expected to remain strong in Q2, particularly in India.

• Net retail investments increased 28%; however, demand in ETF and similar products slowed down to 36 tonnes (68% lower year over year) compared to 79 tonnes in Q4/06. A total of approximately 690 tonnes are invested in ETFs to date.

• Bar hoarding increased 41%, while demand for
medals/imitation coins increased 72%. Industrial
demand was flat.

• Total supply was down 2%. A 13% decrease in scrap supply was offset by a 1% increase in mine production and 10% reduction in producer dehedging.

• Official sector sales increased 2% (95 tonnes sold). France sold 31 tonnes during the quarter and Spain sold 40 tonnes (with an additional 40 tonnes in April).
---------------------------------

BMO Goldminer 12-Month Price Target Changes
↓ AGI C$7.75 from C$8.00
↓ AU $50 from $56
↓ G C$33 from C$36
↓ GAM C$25 from C$29
↓ IMG C$11.75 from C$12.75
↑ JAG C$10.50 from C$9.00

Except for AU, these are Cdn Dollars.

Posted by: Bill Cara at May 24, 2007 1:45 PM [link]

With respect to Gold: I let go all of my GLD last Friday on their disclosure of selling off many tonnes. Kaimu’s analysis only confirmed my decision that I think it’s the right thing to do, for me. Today, I let go AEM and RGLD which is mention as being upgraded today in Bill’s blog.

When I look at the gold stocks many are deeply oversold, but many are in defined downtrends. I just do not want to repeat what I experienced last year from May on in Gold and shares although by December it was fine.

So, in the last week my Gold position has been cut by 67% and is at its lowest level in years. My thinking is that if we do not hold here Gold could swoon to 630 and perhaps 590. I’m willing to give up the upside here to protect against this possibility. Hopefully for all those Gold bulls here I’m calling the low. Good Luck.

Posted by: Telestar3d at May 24, 2007 1:54 PM [link]

That looks to be a flat to up gold report Bill.
They are hard on some of the miners but demand looks good with the exception of Kaimu's correct call of ETF's selling (68% less holdings YOY).

Still keeping an eagle eye on the gold chart.

And all this talk of a bottom in housing is rediculous. I drove to Olympia this morning and passed by rhe same DL Horton tract I've been passing for a few years now. All new ticky-tacky homes side by side, all shiny and new with $289,000 up price tags. ALL TOTALLY EMPTY and have been for months now. We're talking several hundred homes just sitting there while the local paper writes of how bad repos are.

There are no buyers of these homes no matter what lies the realtors tell us.
No bottom in sight. I think this spike in rates is temporary on temporary BS.

Posted by: Craig at May 24, 2007 2:06 PM [link]

First, my two cents re: the pics. I have also grown fond of the existing site' headshot. A wizard keeps some mystery... The second picture is a nice book jacket choice conveying experience, honesty and sympathy to the reader. #1 comes across as engaging, but too soft (when it comes to the difficult art of trading). Maybe a celebrating magician after a good trick. A set-up suggestion (based on my personal taste): #2-like but full frontal seated waist up with visible hands in a position of strength.

Back to some toughts. With each passing days, I feel that Goldman will join Drexel Burnham and Enron in the pantheon of the infamous beacons of greed whose dominance typified the market ebullience and whose downfall will uncover barely believable tales of unbounded arrogance. They all share the mystery of incredible riches spawn from a secretive, blackbox organization and extend their power throughout all nooks of the market. Now GS creates, like his predecessors, its own market (GSTRuE) where it probably will enjoy the ultimate insider advantage in terms of privileged information and potential for profitable arbitrage. I just look forward to the Business Week cover that will cement the top and announce the downfall.

Finally, I keep noticing today a nearly perfect mirror image from the move over the past three days as if everybody was looking to flatten their position. Just a vague impression from the stocks I track...

JML

Posted by: Jumble at May 24, 2007 2:25 PM [link]

JML

Posted by: Jumble at May 24, 2007 2:27 PM [link]

FRG down big, thinking of taking a nibble, any thoughts?

Posted by: GTT at May 24, 2007 2:37 PM [link]

Talk about spin...

Headline at Marketwatch.com

HOUSING | Economy & Politics
New and improved
U.S. sales of newly constructed housing unexpectedly surges

From the Econday report
http://www.nasdaq.com/econoday/index.html

New home sales jumped 16 percent in April...
...The median price eased, down 11 percent in the month to $229,000 for a year-on-year decline of 10.9 percent.

Prices are dropping so sales goes up. Not surprising. Which is more important, price or number of units? (a rhetorical question)

TimG

Posted by: TimG at May 24, 2007 2:49 PM [link]

kaimu - i think it was you who mentioned CUU.V once. Here's a writeup on some speculation. could be a good entry point after the big pullback.

http://gold.seekingalpha.com/article/36425

Posted by: rob d at May 24, 2007 2:51 PM [link]

http://seekingalpha.com/article/36407

good one for uranium too. check James Finch on Seeking Alpha - lots of good uranium stories recently.

Posted by: rob d at May 24, 2007 2:55 PM [link]

When the derivative time-bomb goes off (and it will), what asset do you want to be holding: Stocks, Bonds, Cash, or Gold?

I can see arguments for both gold and cash. Any opinions?

Posted by: AZ_Cowboy at May 24, 2007 3:10 PM [link]

Leisa,

Holy Moly, not have that ultrashort today?
I keep forgetting the spreads on some of these etfs are not very good even though this one has decent daily volume. Howie Mandel's rule: timing and guts. An asset mgr confided, as I may have posted this before, that he acts more consistently and does better for his clients than for himself..because he is using OPM/other people's. money. That may be the guts part...or translation: confidence in timing.

Posted by: jasper at May 24, 2007 3:11 PM [link]

Bill,
The first picture is a little too "soft" and the second has very distracting glare above your head. I'd suggest neither.

Posted by: RB at May 24, 2007 3:13 PM [link]

I am holding some Copper Fox. They are undervalued for the amount of gold and copper they have found and the partner they have in Teck. Shares are also closely held by management. The deal with Teck is complicated though.

They adopted a poison pill amendment recently so perhaps they got wind of a buyout attempt.

Great trades has some good info. MMG is doing very well for me.

Posted by: moab at May 24, 2007 3:29 PM [link]

Jasper--I re-entered SRS yesterday. I did sell today though for a decent enough gain.

I've tried not to beat myself up on selling too early when there is a gain. IYR broke hard yesterday, went up to the last support line, and has broken down quite badly today. It looked to be holding around $80 with some girly-man gumption, and then skipped away lower!

Posted by: Leisa at May 24, 2007 3:33 PM [link]

A lot of 20ema bounces have happened. Really no big deal. Market has to breathe. A lot of major moving averages showing orderly ebbs and flows. Plenty of pessimsm to feed the fire/up trend. Midcaps...leaders in this market getting a little sloppy, though. Breaking thru 20ema, same for fincials/iyf.

Emotionally: I don't know whether to worry about my meaty short position or my longs. Plan: hard stop on the shorts....wish I had had the guts to enter SRS yesterday. Leisa,next time will you please write your trade in the sky?

Posted by: jasper at May 24, 2007 3:47 PM [link]

On the pictures, I'd like to say that I don't like the 'softness' of the first picture, or your hand. I think the second is decent, but I'd like to see a picture of you in the style of the second but with a smile like the first. I like the smiling-but-focused thing you have going on in the current picture that is at the top of every page. It's a good look for a trader to have, IMO.

Posted by: korvus at May 24, 2007 3:48 PM [link]

Bill. Your original picture is just fine. A little air brush/digital treatment will suffice. My mother always said "leave well enough alone" and "if it ain't broken don't fix it" and lastly "vanity is a deadly sin".

Posted by: Horatio at May 24, 2007 3:50 PM [link]

Bill,

What,no Bahamas shirt?? I am shocked, truly shocked!

Posted by: TerryC at May 24, 2007 3:55 PM [link]

What I'm finding interesting about the coverage on CNBC about the "good news" on housing is that there has been literally no mention that the average price has been reduced by 10% yoy. (unless I imagined that I had read that.)

Posted by: Leisa at May 24, 2007 4:01 PM [link]

Bill or Other Learned Folks, Why do higher interest rates usually cause gold to decline?

Posted by: mrmockbird at May 24, 2007 4:04 PM [link]

Wow, tomorrow / overnight should prove interesting, many of the international ETFs down more than 3% (FXI, TRF, EWZ for instance).

$USD is waging battle around the 82.35 December low. I'm not convinced it's going to retake that ground, though I'm not adding to any PM positions until I see some improvement.

Regarding the pictures Bill, I prefer the second one. It'd be better, though, if you were wearing an Alfredsson jersey. :)

Best regards from Ottawa.

Doug

Posted by: doug11 at May 24, 2007 4:08 PM [link]

Leisa, regarding housing, in addition to the price drop, YOY sales also decreased by about the same per cent that you quote. That 16 per cent rise the media use reflects the April over March increase, and doesn't result in an apples-to-apples comparison.

Posted by: mrmockbird at May 24, 2007 4:11 PM [link]

mrmockbird,

I'm no expert here, but I believe it is because higher rates mean that someone can make more money holding dollars, and when dollars are more attractive the value goes up, lowering the cost of hard assets priced in dollars.

Hopefully someone smarter than I am can confirm or deny that. :)

Posted by: korvus at May 24, 2007 4:28 PM [link]

Gold runs inverse to the dollar.
Dollars are like anything else. If you have more of them than needed, the cost of them (interest rates) go down. This is supply and demand.

If the opposite happens, and dollars are seen as in shorter supply, the rates go up.

So if the supply of dollars is perceived as shrinking or the economy is perceived as heating up which makes dollars in short supply, the cost of dollars goes up and the cost of gold goes down.

Today we got another lie from the governmental lying liars. They tried to tell us houses are selling at a 16% increase in 30 days. As I posted here earlier, that is total BS and I've seen the empty houses myself. But, this got the bond guys thinking that the economy was better than they thought and dollars are now more valuable, so the rates (cost of dollars) went up and PM's went down.

That may change if the mkt continues this silliness and they then think the economy isn't so strong.....again. Or, they average several months of home sales and get a real number.

Posted by: Craig at May 24, 2007 4:29 PM [link]

Mrmockbird:

Rising interest rates=stronger USD = lower oil/gold. (I'll graciously accept correction).

You are spot on about the numbers. Thank you. Though not an apples to apples comparison, that prices are coming down does not portend well for those hight LTV loans made last year.

Posted by: Leisa at May 24, 2007 4:31 PM [link]

mrmockbird/Leisa-

CNBC's treatment of new home sales has consistently been pathetic since the going got tough for homebuilders. Although they use the proforma disclaimers pointed out over time by several housing bears (e.g. Ritholz/Roubini) on the air i.e. high margin of error / no cancellation, they maintain the positive spin of month-on-month comparison (with recent down revisions in previous month propping the current number up). I agree that the most notable take-away is the apparent caving on prices by homebuilders (likely the smaller bunch (70-75% of the market) or their foreclosing banks), free upgrades do not lure the client anymore.

I also suspect that the publicly-traded homebuilders are no longer guiding because the price pressures they long fought are entering into liquidation mode. They can't forecast their results as long as they don't know how low they will have to go to clear the inventory.

A couple nuggets worth a tought from the report. South is exploding as an echo to Katrina's devastation (?). How sustainable? Two, although inventory in terms of month-of-sales dropped, inventory rose. No effect of lower permits there either.

Back to CNBC. Despite Santelli's regular comments about the rates moving up, it seems that this housing report and its coincidence with YTD highs on the 10-year woke them up to the move in the bonds market. A true unresolved question: is the bond market moving due to strengthening economy, lack of buyers/competition from LBO paper, or foreign bond markets? Maybe a combination of all three. I recall that the early Feb. highs brought commentators noting a 5 handle as a possible trigger for a downturn in equity markets at the time (we never got there, but I remember the tension was building and the expanding P/E pipedream was under threat).

JML

Posted by: Jumble at May 24, 2007 4:47 PM [link]

What was truly shocking to me was that the median new home price declined 10% from March to April, if you believe the numbers. That is downright astonishing. Builders rallying on these numbers is the height of the absurd. If your margins are compressing or you are selling at a loss, how is that good news? These numbers have a high margin of error and also do not include cancellations, which are significant, so things may actually be worse (or better).

Existing home sales should be interesting tomorrow.

Posted by: moab at May 24, 2007 4:49 PM [link]

BTW, I'm no expert on any of this. I'm the Strawman on the way to Oz on the YBR. Remember, I need a brain from the Wizard and proved it today.

I had a nice QID position at last night's close but had an appointment this AM and the mkt took off at the open so guess what the strawman trader genius did? Gotta get that brain.

Posted by: Craig at May 24, 2007 5:18 PM [link]

Wow.. took a bath on MLY today.

When in May stay far away...

Think I'll stick some money in 4.15% GICs for a bit. Any suggestions on a bit riskier investment that doesn't involve losing 6% in a day?

Posted by: wavesmash at May 24, 2007 5:23 PM [link]

In the May 17, 2007 Basic Points by Donald Coxe of BMO answers the following question:

The above two paragraphs are quotes and only part of the discussion.

The above statements are profound. Think about what it says, “if food and fuel prices change direction together on a sustained basis, inflation or deflation ensue.”

Think about what it says again, “if food and fuel prices change direction together on a sustained basis, inflation or deflation ensue.”

And again, “if food and fuel prices change direction together on a sustained basis, inflation or deflation ensue.”

If someone can debate that these two conditions are false, I’m listening. All learned people understand that inflation is here and rising. The whole report is interesting, but this is the most important point IMHO. This is long-term bullish for Gold.

Posted by: Telestar3d at May 24, 2007 5:38 PM [link]

For anyone looking for a site that is thought provoking, and just plain good, give Leisa's blog a gander. I've been investing for quite a while, but I still learn some good stuff there.

Posted by: mrmockbird at May 24, 2007 5:42 PM [link]

Housing - the rosy picture does not include 'cancellations' - it never has. The housing bulls (only they get interviewed on CNBC!) typically don't mention it or mention it in passing.

So a house that was under contract and the intended buyer cancels (or just doesn't turn up), keeps being sold repeatedly - and keep inflating the 'houses sold' number.

If these numbers were reported more correctly and were marching lower steadily, serious home buyers may even pause and wait causing the numbers to fall even further.

Posted by: mSquare at May 24, 2007 5:44 PM [link]

Here are the two paragraphs, I do not know why they did not show up in the previous post. T3D

1. How can you switch from being a super-bull on bonds to being a super-bear
in a month?
Once we concluded that food price inflation was inevitable, we found our
visceral bond bullishness was no longer tenable. David Hackett Fischer’s The
Great Wave, a work of archaeo-economics, traces consumer prices in Europe
and, more recently, America, back to Renaissance times. He shows that if
food and fuel prices change direction together on a sustained basis, inflation
or deflation ensue. If one or the other moves alone, there may or may not be
a sustained change in overall prices.

Add inflation of foods to inflation of fuels and metals, and then add the fastdeveloping
scarcity of skilled labor, and the main vectors of the 25 years of
disinflation are either going or gone. Either central bankers will hang tough,
which will be bond-bearish, or they will succumb to political pressure to
ease up—which would be even more bond-bearish.

Posted by: Telestar3d at May 24, 2007 5:45 PM [link]

Is Donald Coxe still bullish on base-metal stocks?

Posted by: mrmockbird at May 24, 2007 5:52 PM [link]

Remain substantially overweight the base metal stocks. As we have been
saying for four years, these are core investments and will continue to
outperform almost all other stock market sectors.

Per Coxe

Posted by: Telestar3d at May 24, 2007 5:55 PM [link]

Get ready for trade war with China. It's coming soon at a theatre in your neighbourhood and in the proces save American jobs & their families.

----

China still in play

"We've had an incredible two months, so it's not surprising that the S&P couldn't hold the old high," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "But the market saw some real technical damage today," he said.

The U.S. and China held economic talks this week, which were aimed at easing trade tensions between the two.

But "I think those Chinese negotiations are not going all that well," said Windham's Mendelsohn. "And if Congress passes trade restrictions, whether or not the administration vetoes them, this wouldn't be good news and could pull the rug under the market."

Link:
http://www.marketwatch.com/news/story/us-stocks-fall-sharply-after/story.aspx?guid=%7B8449611B%2DC128%2D474D%2DA86C%2D90F79FB724FD%7D

Posted by: marginnayan at May 24, 2007 6:16 PM [link]

Goldman creates it's own private system to trade stocks...

http://online.wsj.com/public/article/SB117996989061312894-NCL8HfLFUcw6vKuz1GWogIfg3JY_20070623.html?mod=fpa_editors_picks

Posted by: JIM at May 24, 2007 7:18 PM [link]

Mrmockingbird also keep in mind what is causing these rates to go up. The fact that longer term notes and bonds are being avoided or at least there is waning interest in these by other nations and entities. This action may cause a short term bounce in the $ however this move away from longer term bonds is a direct result of fear of the future of the $ and the ability of the U.S. to manage it's finances. The (quickly)dropping price of these vehicles causes their yields to rise. Short term, yeah, sucks for gold, long term it is a supporting indicator to hold/invest in PM long positions and bullion.

Posted by: agaunv at May 24, 2007 7:41 PM [link]

Steve

Posted by: agaunv at May 24, 2007 7:41 PM [link]

Followed through on last night's post and as of today -> 25% oil/gas + gold (OIH, GDX, + several small companies including BMD, UXG, WGDF, UXG, SLW). The concept of coming out ahead by trading less fits my psyche right now, and I'm betting the commodities bull cycle has quite a ways to go. Why today? The decision was made last night and trying to time an entry point would immediately jeopardize the strategy. I may arrive at targets at some point, but I don't have any right now. Time horizon--thinking along the lines of 2010, but I won't be holding myself to any dates. If the bet is on a bull cycle, then long-term is the way to play it. I remember starting my IRA in the mid-eighties, and everything went into Fidelity Magellan. Not being a market timer in my younger years, I patiently sat through the 1987 Crash, Desert Storm, Long-Term Captial, the Asian Crisis, and "irrational exuberance," watching the DJIA breeze through 3000, 5000, 8000, 9000, 10K, 12K, correcting many times along the way. I have no idea where oil and gold prices are going, but the bet is >100 for oil and up to 2K for gold. Of course, no one knows...but that's why it's a bet. As I've mentioned before, every one of my ideas has eventually played out, but I exited every position too early. Will this be the one time I'm wrong? Well, you can't live your life thinking like that. I've defined my downside risk, and feel pretty confident there is a good chance all upside targets will be exceeded.

That leaves the question of whether I plan to watch the market. That's one reason I capped the position at 25%--it allows to compartmentalize those holdings into a different category where it stays untouched.

Craig--with all due respect, if the bull cycle plays out, I should end up doing far better with this perspective.

Posted by: 2nd_ave at May 24, 2007 8:18 PM [link]

Frustrating week up at the 2nd home having a sprinkler system put in . . . the crew cut the VZ dsl line while I was on about to make a trade exiting some positions. . . VZ showed up TWO DAYS LATER after 2 calls . . cost me time and money . . . and the crew also cut a water line and then a line to an outdoor light . . . UGH! But the sprinklers work fine and are tied into a satellite feed. Cool!

Reference the rising interest rates---China is now investing some of their money into equities in lieu of US bonds (i.e. Blackstone investment). Thus, interest rates move up as the Chinese are not quite buying the same number of treasuries. One of the factors.

Reference the housing industry, I heard an investment analyst on the car radio say it's getting like the US auto industry. Allegedly, some builders are now taking trade-ins of existing homes from buyers for new houses! Yes. What's next-zero (0%) interst mortgages? (LOL)

When the line went back up, I tried to post earlier, but no luck; so, I decided to wack a golf ball around this afternoon. Things are better now and the beer tastes great. And I can post!

Lots of red, but tomorrow's another day!

Posted by: Seamus at May 24, 2007 8:30 PM [link]

RTTNews) - Peru Copper Inc. (CUP | charts | news | PowerRating) announced that it has entered into an exclusivity agreement with a third party in order to facilitate discussions with such third party regarding a potential transaction which may involve the acquisition of the Company or other material transactions.

CUP traded up a buck thirty in the aftermarket on these potential takeover developments. Maybe it's a trade?

Chris

Posted by: shark_attack at May 24, 2007 9:20 PM [link]

2nd, No due respect required, I agree with you.
You don't think I was agonizing over my BMD holdings today do you? No, that's a buy and hold. If I wasn't confident thinking it was worth more I shouldn't have bought it. Besides I was busy berating myself for selling the QID early.

I think this could be made much easier using something akin to Bill's system which puts you in as essentially a value investor with a margin of safety that makes long term holding more comfortable. I followed those rules and got into MU at $10.90 and bought on the pullbacks to the low $11's and it was great to have a margin of safety so I could buy the dips with confidence knowing I was holding for the long run. On days like today it pays off. I would still use stop loses to avoid huge corrections in major trend changes though, but that's just me.

Posted by: Craig at May 24, 2007 10:07 PM [link]

A major reason April turned in such a good showing was the spike in one-time tax receipts from non-withheld taxes. This allowed a huge amount of cash to flood into the markets as the Treasury did not have to borrow.

Now, however, not only is that short-lived party over and the Treasury is once again back to borrowing, but the FCBs are reeling in their purchases of treasuries - to the tune of almost $4B less this past week - that is a shortfall the Fed has to monetize.

Money supply is slowly tightening - U.S. home loans, the PBoC increases in reserve requirements, Brittain's rate increases, Spain's near desperation in their housing bubble - if the yen seriously rises, look out below, because all that liquidity will evaporate.

Bonds will rally soon while equities sell-off for a few weeks; shoulder season a bit late this year.

Leisa gets it, your right gurl I noticed that CNBC was not talking about price to achieve these housing gains noting huge discounts were offered to move product. Look at where the 90 day T-Bill is trading, another few b.p.'s and whammo!

Posted by: Rick45 at May 24, 2007 11:43 PM [link]

Can we get a RATE HIKE FOR SURE NOW Booya even though the MSM and Good Old Boyz want us to believe that the economy is actually strong; I wouldnt mind 10000 shares of MRB if I can get my price!

Posted by: Rick45 at May 24, 2007 11:46 PM [link]

The median sales price of new homes in April was down $28,500 to $229,100 from $257,600 in March. This is a one month price decline of 11% folks! I'll repeat what I have said in earlier posts: The story on the housing market collapse is about price not volume and the financial media do not want to talk about price because it makes the dummied-down public realise that their personal wealth is rapidly evaporating at a time when their government is printing money like there's no tomorrow. HB&B knows that when Joe Public wakes up to this fact then the game is over until there is blood in the streets, financially-speaking. Since, for most people, their principal residence makes up the largest component of net worth - it may not take too many more sizeable price declines to get us to the tipping point. Add to the mix high food, energy and fuel prices and you have a consumer faced with making big changes in spending. We know what follows.... the R word ( if we are lucky). Good night, and sleep well... we will need our rest.

Posted by: TerryC at May 24, 2007 11:51 PM [link]

Today's news was more about Paulson than Greenspan. Paulson's trip flopped and immediately there was talk about the US Congress erecting trade barriers.

This could work well for the Bush administration. Tatcially, the Chinese could not do much for the US prior to the People's Congress's meeting. In the meantime, the US Congress will be able to pass some anti-China trade bills. Thus, the next time Paulson heads back to China, Bush will have his pen raised over these potential trade threats, thus giving Paulson some real leverage in the next round of discussions.

It is interesting to note that the Chinese stocks corrected today in the western market, but that the Shanghai B is up tonight. Will the crazy 8's be able restore the western markets by tomorrow?

So let's take the economy's temperature: rising inflation, energy shortages, Middle Eastern conflicts, weakening US influence, falling dollar, emerging social unrest in many places, rising socialist governments... I am hanging onto my gold stocks. (well not KRY... Nothing personal against all the KRY proponents on this board but by the time they start producing gold there, the corruption will be so bad that none of it will ever make it out of the country.)

Posted by: ableape at May 25, 2007 2:23 AM [link]

This plan would work if Schumer didn't have enough Senators for a veto proof trade bill.
But this is not the case. You may want to see Sen. Grassley, Baucus, etc. as the Prez. can't stop them, thus no threatened pen leverage can happen.

We will still have weakened USD, inflation, high PM's etc.

Posted by: Craig at May 25, 2007 7:56 AM [link]

BTW, the KRY people aren't counting on gold production. They are planning on a permit, which will then prompt the sale of the assets at an increased price to a co that has the scale and resources. They are waiting for the permit news to sell into, they don't really care about production.

Posted by: Craig at May 25, 2007 8:15 AM [link]

Ableape,

Allow me to go so far as to say that once the permit has been issued and my position is sold (I actually don't have a position yet but maybe today) I welcome Mr. Chavez to nationalize the asset and to tell us to get lost, Gringo, with a big flourishing upper cut that looks suspiciously like the international symbol for...uh, you get it, right?

Chris

Posted by: shark_attack at May 25, 2007 9:09 AM [link]

May 24, 2007

Cara’s Daily Commentary, Thurs., May 24, 2007, 8:55 AM

US Equity Markets Review

International Equity Markets Review

Bonds & Yields Review

Forex Review

Commodities Review

Oil Review

Gold & Precious Metals Review

Precious Metals Stocks Review

Community Chat

Discourse

Post a comment