With all the activity of yesterday I forgot, so before I forget again . . . Halvardo, you previously posted problems with your broker and your account. . . . It may be more than technical . . . you may be a victim of identity takeover and someone hijacked your account . . . that may explain why it went to zero . . . best of luck straightening out things.

Craig—Quentusrex is right about those internet cafes . . . there are some security programs that block and warn when someone tries to access your info in these public places, but I’m with the majority, check thru Yahoo or some other site. I wouldn’t log on to your brokerage account there. (I’m not a technical guru, but I know about investigations and crime trends.) Good luck today.

With some of the oversold situation yesterday, picked up some RIO at 36.75 on the way back up near the close . . . will have a tight leash on it. Usually have some sort of Homeland Security related position in one of the accounts, so picked up pharmaceutical EBS in the IRA. Like the fundamentals.

Options expiration on top of everything else (Fed cut) today! Good trading, good luck and may your brokerage be able to handle all smoothly!

$300 billion is a Big Freakin' Lot (BFL) of money.

http://tinyurl.com/334p2h

A small $1B hedge fund in Australia collapses.
http://tinyurl.com/2jtk5b
http://tinyurl.com/3cycyp

Stock futures up on rate cut.
http://tinyurl.com/38ppeb

http://tinyurl.com/2smzpn

Watching DELL, YHOO, MSFT, WFMI, KRY, WMT today.

Moin,

The Fed Blinked.....Let the bailout begin.....Got GOLD :-)

Golden times ahead.... Things must be really ugly......First repos, then taking MBS as collateral for the repos, now the discount rate cut, next week......

Fed Cuts Discount Rate to 5.75%, Cites `Downside' Risks

The Federal Reserve, in an unscheduled meeting, cut the discount rate to 5.75 percent from 6.25 percent, noting market conditions have deteriorated since it last met Aug. 7.

``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward, '' the central bank's Federal Open Market Committee said in a statement. ``The downside risks have increased appreciably.''

The FOMC left the overnight federal funds target rate unchanged at 5.25 percent.

> The Yield on the 10 year just spiked 9 points......

Proof of concept: the port closed up! Aided and abetted by my better half, who also waded into the carnage, and picked up (among other things) the battered shares of her former employer WFC...

Pork Chop Hill-it was draining to watch. Minor skirmishes the past two months good preparation. Earlier this morning felt more like "seven-out," with players leaving the table..

kaimu-well, good call my man. HUI 290 was stuck in the "no way, but it might happen anyway" recesses of my brain...unfortunately, it now lends credence for your other call...gotta wait for POG 580 before the coast is clear...;)

make that "credence TO your other call.."

Thank You Seamus, I set up a string of symbols at BillCara2.com. This guy needs the plug..LOL!

As an aside, I use Scottrade and while someone could get personal info which would be BAD, they can't steal money as Scottrade doesn't have electronic withdrawls. They have to cut you a physical check and it isn't that easy to make deposits. Never-the-less, I'm not going to access my acct and the Starbucks I will use is the most out of the way and low traffic possible except for Nassau, Bahamas. I should be alright.

Hope all of you do GREAT today!

Over 40000 Goldman Sachs August (160-175) calls traded yesterday.
The AUG-175 Call buyers are going to enjoy 1 day gain of more than 400%. Did they know?

LEND's up 10% in premarket.

CFC's up 18%.

Any takers?

"Moin,

The Fed Blinked.....Let the bailout begin"

no, man...it's cramer and poole playing chicken ;) first round goes to cramer...but it's not over yet...

Craig

There's other ways to take your money besides withdrawals. Someone takes over your account and purchases small illiquid stocks they own in another account where their cost basis is much lower.

In other words, they sell their stocks to your account at high prices. You'll own the stocks, they cash out in their accounts and the stock price then drops to 10 cents or worse.

That's just one simple example, but it's happening.

craig-

fwiw, i spent one morning last week day-trading on the wireless network of a hotel...i called fidelity ahead of time to ask about security, and they said "don't worry about it." whether or not that was clueless reassurance, or whether hotels differ from cafes, i don't know...

Re: speed of brokers. I'm already having trouble with ET this morning, and the market isn't even open. Must be some heavy pre market trading off the site, or everyone's logging on and scrambling to change their orders all at once.

Craig,
What Seamus is saying may sound unbeleivable, but it has happend in the past.

http://www.elitetrader.com/vb/printthread.php?threadid=50700

http://tinyurl.com/2b2gup

let's move the discourse on to bill's second-take...i like the better opening on that one ;)

GRZ:

IMO on sale at 4.13. That's the price they were trading before they had the permit.

Well, was that the rally?

quite a slow down in the past 5 minutes...

So what are the plans around here for PMs and PM miners?

Anyone biting at the flat SLV ETF? Anyone adding here even with such a large pop since yesterday's lows?

I think SLW, GFI, GG, and even KGC are relatively on sale... IVN has had a dramatic rise here.

FWIW: I don't know if this means anything, but yesterday, I compiled a short list of stocks with a decent short interest, in case we got a rally. None of them is rocketing upwards this morning, as one might expect in a rally. SO, are the shorts holding off and not covering, because they know that by this afternoon, they won't have to?

So the Fed officially moved the discount rate down 50 basis points. Although they left the target for the federal funds rate at 5.25% they have been injecting so much liquidity into the banking system over the last 5-6 days that the effective federal funds rate has already moved down about 50 basis points. Expect the Fed to officially move the fed funds target down to 4.75% at their September 18th FOMC meeting. In the meantime, the stock market recovery rally will be fast and furious to the upside but it should only last 1-3 weeks. If this scenario plays out, I will be publishing a research report ( at http://www.2globalmarkets.com ) on what to expect from a renewed downtrend in the U.S. stock market. Stay tuned!

I picked up some MU here as it is moving off an intermediate low.

And it looks like I'm early as it is moving sharply lower after its spike open. If this stock can't hold yesterday's close, I'll be out.

So now what?

Sell the bounce or buy this morning's pullback?

Financial stocks opened pretty much at their highs of the morning and have been moving down ever since.

Same with the miners and gold stocks.

Oils hanging in better.

Nasdaq is stuck just below 2500... can't seem to get over it.

Markets responded on cue, just like one of Pavlov's dogs: woof, woof.

Good little doggies.

I'm out and will be for a few days until the dust settles. This was the worst thing they could do -- fer cryin' out loud, let the damn markets take care of themselves. Laissez faire? Phhhht!

Good luck and good trading.

Wow WGI / WGDFF!!! This stock has had a 30% turn around since yesterday's low!!!

Poole looks like a fool today.

Grrrrr.....

So the fed announces the cut and I immediately started buying GFI, GLD, GDX.

Works alright for GFI, GLD which I got deals on, however, the AMEX was jammed and didn't execute my GDX order. You may have had the same experience on AMEX orders.

And I'm still lagging the mkt by about 45 seconds which, as Bill notes, is FRUSTRATING.

I'm a seller of this rally where I can.
I took AUY profits, GME profits, and everything else I'm sitting and waiting. I think we get back to volatility due to Fed and financial uncertainty.

The cut was wanted but now the mkt will be thinking of the reason for the cut, which will be bad. So we have good mkt, bad mkt. for a while. I'm looking for short entries at some point here.

JogyP, you may be right today. But the way the market is reacting, I sense that many believe he was right.

No one seems to have confidence in this market or the people responsible for its smooth functioning.

This is on my mind: why did the ECB dump so much money into the markets? Why after all the 'calming' pronouncements does the Fed behave with such sharpness.

Is the entire situation much worse than a little peanut investor imagines, and what to do? I am already out in cash.

Do you think the Fed has some late night dicussion when they say the Nikkei tank. As most people have been sayint the rate-cut reduction will help the psychology of the market more than anything else. If the Fed was to really work on the sub-prime issue they would have to cut interest rates back to 1%. What is important to know at this time is the Fed will cave to the pressure of the market and cut rates when stocks are getting hit too hard. This can be interpreted from investors as an inflationary cycle begining.
Again just my humble opinion or (JMHO)

JogyP-

Poole found a convenient "scheduling conflict" on his calendar to avoid an embarrassing volte-face. Fisher voted in his stead to secure unanimity.

JML

ALOHA !!

The FED ... You gotta love em!! What a useless lot! Do we print money or do we stop? In the end thats about all their choices are ... Sure they put out a few economic reports here and there given their bias and agenda are questionable at best! So why do we need them? Can't the US Treasury print money? Given that the US Federal Reserve Bank is a group of private banks with no official sanction under the US Constitution why is it that the FED even exists as a legal entity?

Here is a link to sign a petition to abolish the Federal Reserve.

Link: http://www.petitiononline.com/fed/petition.html

Remember what the founder of Rothschilds Banking empire said a couple hundred years ago ...

“Give me control of a nation's money and I care not who makes it's laws."
- Mayer Amschel Bauer Rothschild

Should we not, as citizens and taxpayers, control our own money and not banks like Goldman Sachs and JP Morgan? You are at this blog learning how to successfully gamble in a rigged casino just so you can beat the ravages of inflation which were created by the US Federal Reserve Bank and Wall Street in the first place by getting rid of the gold standard. First they create the casino(NYSE) and then they create the chips(fiat US Dollar).

The first step to taking back control of our money is to kick the unconstitutional US Federal Reserve Bank out! Then vote out the "business-as-usual" two party aristocracy the Dems and Reps ... Send a message instead of just "waiting" for a change!

Dollar down across the board vs. a number of currencies.

Meanwhile, market still facing carry trade issues and unwind (selling by hedgies) continues.

The market is definitely not behaving as many of us expected. Stocks like CFC and CTX are now down significantly from their open (both about -7% as I write).

I have hedged short positions in both. And I came within an eyelash of removing my hedge on CFC early today. Now I'm glad I didn't.

And no one seems eager to buy miners, even though they are still in an extremely oversold condition and the dollar is getting whacked.

Of course, all this could change in the after lunch.

Fidelity streaming quotes not keeping pace. IB quotes continue to update instantaneously, as always.

Bill re your reference to burning candle. A chap goes to see his doctor who tells him he must stop burning the candle at both ends. Patient says doctor I didn't come here for advice - I came for more wax.

looks like shorts are seriously hurting today. bulls are not doing all that good either. market has not made up its mind, and is very headline driven. it is day to day, quick up and downs based on news. for day traders taking bear or bull position, one piece of unexpected news can seriously hurt you if you are day trading.

fed is a wild card. carry trade and subprime loss are the hanging clouds. seems we need another month to know whether market will be in any definitive trend. a fed cut next month will help bulls. meanwhile, we are still be in a very choppy market.

That's the way I see it also Bill.

Dollar weakening vs. other currencies, hedgies unwinding yen and swiss franc carry trade loans and like Fazelli said PMs are "on sale."

It will be interesting to see what the BOJ does next week (8/22-23 if I recall) with the Japanese interest rates. Could be a big rush for the exits.

Nevertheless, retaining FXY hedge position.

ALOHA !!

US SECURITY
The other day I was in Hilo doing errands with my oldest nephew. I was driving a Mazda MPV van with surf racks on it, obviously a family type car. As I passed the Hilo port authority I noticed a beautiful brigantine sail boat docked there at the port. The masts were huge and it reminded me of the days of old when these types of ships ruled the day. I had to go there and see if we could get up close. Also in the back of my mind I thought ... "Hummmm, this would be a good test of the Homeland Security new port security measures ..."

We were backed up in a long line that had mostly semis and delivery type trucks. I noticed there were two guards with clipboards asking questions and writting down plate numbers and stuff. I announced to my nephew, "Looks like we may not get in! But we'll give it our best ... right?" My nephew is 21 and very talky! I told him to not talk one bit ... just shut up, sit there and look stupid! After all I had been at the Hilo dock prior to the new security restrictions many times picking up supplies at Young Brothers, the interisland shipping company. We finally get up to the first guard and I say, "Beautiful morning today. I'm here for a meeting at Young Brothers ..." Without skipping a beat she quickly said, "I'm too busy go to the next guard!" Okay ... so I did after I told her I was happy to see the extra security and what a great job she and the guards were doing, etc ... etc ... Eddie Haskell like ... The first guard did not ask me for ID nor did she write down my plates or question me at all as to why I was there and nor did she look inside my van. Well about another 50 yards up the line was the next guard. When I got up to her she immediately said to me, "I see you already gave all your info to the first guard ... go on through ... keep it moving sir!" So I said thank you and drove off towards the area of the brigantine sailboat. I was totally shocked by the second guard! Obviously a flaw in their system. Well when we got there we saw it was some sort of tourist boat from Japan by the name of Nippon Maru. A beautiful boat but the hull and the rigging was all steel and not wood, so it wasn't exactly what I had hoped for. We got out and walked around and took some photos and then left. We were only there for twenty minutes. On the way out there was another guard and another long line. I saw trucks just going past us in another empty lane next to ours not even stopping. So I got in that lane and drove. When I got to the guard area one of them yelled at me to stop. So I stopped and yelled, "What Bruddah?" The guard yelled over to me, "Do you have anything that I need to inspect?" I yelled back to him, "NO ... just dropping off at the ship, Bruddah!", pointing to the brigantine! We were about fifty feet away from each other and during the whole conversation he sat in a chair. He yelled ... "Go then!" and he waived for me to go! So I waived back the shaka and off I went ...

Afterwards as we were driving away my nephew quipped ... "Do you have anything I need to inspect? NO ... JUST SOME STINGER MISSLES WE ARE SELLING TO THE HILO AL-QAIDA JIHAD!"

No crusie ships were in port at the time so it was nowhere near as busy as when cruise ships are in ... When crusie ships are in the place is crowded with taxis and tour buses on top of the usual trucks.

Not much port security here in HILO ...

TERROR ALERT
So why all this security talk? Well, I got an email from a Jewish friend of mine and via his sources in New York he informed me that there is a terror alert put out by Juval Aviv of Interfor. Juval Aviv is a consultant to the US Congress and CEO of Interfor. He was also one of Golda Meir's bodyguards and he was the lead agent in the hunt for the 1972 Munich Olynpic Games terrorists who captured and murdered Israeli Olympians. He was the guy in Spielberg's movie "Munich". Interfor also predicted the 9/11 WTC.

Interfor has predicted, based on their intelligence, that there will be multiple bombings simultaneuosly at various US malls prior to end of this year. I am just putting this out there. I do not know if this is a credible e-mail or not. I had always wondered about malls though ... Seems like a perfect place to disrupt the American psyche and economy. For me ... I rarely go to a mall. We have a small one here in Hilo but I only go there if we go to a movie, which is maybe twice a year!

Just an FYI ...

Does anyone know how to get access to Don Coxe's reports without joining the BMO Nesbitt group.

Cheers
Bobb

Kaimu, I was interested in what you wrote so googled Juval Aviv. You may want to check out Snopes.com first.

Aloha Kaimu! What's the URL to your orchid farm? I've searched for 5 minutes and can't find it... Want to send a housewarming gift to a friend in Ohio.

I'm just so disgusted I won't look at the market until the close. It's like giving crack to a crackhead thinking it will cure him.

Per Bill's advice, I set up a small account with BMO Nesbitt ($20K) and got them to put it into Bond Mutual Funds, so the Rep can earn a little commish for setting this up. Bill said that they will try and upsell me which is fine, but in the meantime, I now have access to Donald Coxe as well as the rest of the BMO research which is really excellent and head and shoulders above what the discount brokers provide.

kaimu Concur. Recent intell has increased the likelihood of an attack.

number2son welcome back from your vacation (retreat).

FWIW, water ETFs (CWG, PHO, FIW, PIO)look like they may be on sale here. Not a bad idea in a long term portfolio. (Disclosure: long CWG in IRA).

With opening this a.m., exited RIO at 40.05.

By the way, Donald Coxe is still very bullish on commodities and has now added a section on Commodity Stock Weightings to his Asset Allocation Page.

Bill's timing may be correct today... definitely seeing an oscillating buying / selling pattern, seems like the strength is being seen as a miracle gift for a lot of hedge funds and firms that need strength to sell.

smart money is probably sitting on the sidelines waiting, since this fed move isn't going to solve underlying problems, at least not quickly... let's see if 2 PM brings in buyers.

added small bits of GLD and SLV.

"All financial crisis exit roads lead to gold."
-- Don Coxe (on this morning's call)

http://tinyurl.com/ysk7wu

Bob - Google search for Cox found:

http://events.startcast.com/events/199/B0003/#

Learn2Invest

Hi All,
I'm writing you from NOT Cara 100 Stabucks, but from a closer place, Mud Bay Coffee with FREE wifi. NO, I haven't signed on my acct!

The free yahoo sites are working fine for now. I notice we are stuck in the mud and even with piles of cheap cash we can't seem to get out yet. From the sounds of the scaredy-noggins it appears we may need to test the previous lows before a run which is fine as we should get another chance at cheap PM's if this is the case.

If not yesterday's basis will have to do.

This place is pretty nice and the coffee is good.
The Dr. says they want me to be there during Dad's surgery (wrist) so I'll have to go in a hour or so.

Glad I took profits on some of my trades from yesterday. That seems to be the plan except for PM's and oil. This game of tantrum chicken the whales are playing with the fed and that nasty hurricane are my market movers for now.

I remember writing I didn't trust this mess until the fed cut, jawboned really good, or the market figured it out on it's own and we had confirmation of a bottom. Somehow I knew it would be the big jawbone first. Like Samson and the lion's jaw, only in this case it's use is to prevent a haircut and keep power.

I must say, wifi is pretty cool. Too bad it isn't as secure as it needs to be.

Hi All,
I'm writing you from NOT Cara 100 Stabucks, but from a closer place, Mud Bay Coffee with FREE wifi. NO, I haven't signed on my acct!

The free yahoo sites are working fine for now. I notice we are stuck in the mud and even with piles of cheap cash we can't seem to get out yet. From the sounds of the scaredy-noggins it appears we may need to test the previous lows before a run which is fine as we should get another chance at cheap PM's if this is the case.

If not yesterday's basis will have to do.

This place is pretty nice and the coffee is good.
The Dr. says they want me to be there during Dad's surgery (wrist) so I'll have to go in a hour or so.

Glad I took profits on some of my trades from yesterday. That seems to be the plan except for PM's and oil. This game of tantrum chicken the whales are playing with the fed and that nasty hurricane are my market movers for now.

I remember writing I didn't trust this mess until the fed cut, jawboned really good, or the market figured it out on it's own and we had confirmation of a bottom. Somehow I knew it would be the big jawbone first. Like Samson and the lion's jaw, only in this case it's use is to prevent a haircut and keep power.

I must say, wifi is pretty cool. Too bad it isn't as secure as it needs to be.

Arrrgggg! Darned type key. sorry guys.

Two more miners have been caught today with their short term cash invested in asset-backed securities, like the ones at Coventree. This includes Ivanhoe mines today.

It opens your eyes to find out where the cash these miners have raised has been invested. It should part of doing your DD when buying them. Some of them could eventually have no cash to operate. Sure, out the window they go now.

"Ivanhoe Mines said on Friday that it has $66.5 million of holdings in Canadian asset-backed commercial paper, representing about 34 percent of its total cash position of about $200 million. Of that, $13.8 million is held with funds sponsored by Coventree Capital , the Canadian mineral explorer said. Coventree has been at the heart of the credit crunch in Canada's asset-backed commercial market since it announced earlier this week it couldn't find funds to repay outstanding paper."

Bill, any idea where VAL, UXG invest their money? Kaimu, how about the ones you have recommended like CNU, ECU, GIX? Thanks.

Alert from Fidelity:
"Please be advised that we are experiencing delays in receiving trade execution reports. Orders are being executed by the market centers in a timely manner, but reporting is delayed. We are experiencing extremely high call volumes due to this issue."

ALOHA !!

geckojb ... I did not see the e-mail but if the one on snopes.com is the one then it looks like someone wants to sell a book at the very least.

Interfor is a credible company and even snopes.com says it is difficult to prove the e-mail real or false. Apparentky some critics of Aviv point out his credentials as a soldier in Mossaud are not true.

From Interfor website:
INTERFOR

Founded in 1979, Interfor, Inc. is an international investigation and security consulting firm offering comprehensive domestic and foreign intelligence services to the legal, corporate and financial communities.

Interfor is staffed by highly skilled investigators and fraud examiners, many of whom have been associated with government, defense, and intelligence agencies worldwide, including the British Secret Service, Israeli intelligence, various European agencies, and the United States CID, CIA, DEA and FBI agencies. Our investigators are also supported by a sophisticated research division using state-of-the-art technology.

Interfor is fully licensed and operates in the United States, Europe, the Middle East, the Americas, Africa and Asia. While the nature of Interfor services precludes disclosing the identity of specific clients, they include Fortune 500 companies, major law firms, an international airline and a number of Western governments.

Interfor link: http://www.interforinc.com/home2.asp

At any rate Israel has had suicide bombers at malls and restaurants and night clubs for years now, so it seems a likely target in the USA as well.

omphalos ... Here is the link to our orchid farm here in Hawaii. Still a 5% discount to all Bill Cara bloggers, just mention Bill Cara in the "instructions" section. We just sent a couple orders to Canada this week!

Link: http://www.kaimuflowers.com

'I believe this because GS, LEH and MER are strong still. Should they weaken, I would have to re-consider.'

So far so good but Bill, what is the other side of this coin? 'Black Monday? Could you provide a heads up before the close?

Also:
Fido is experiencing order execution delays because of high volumne.

Kaimu, I agree. I think most people in the back of their mind have been wondering "why haven't they thought of the malls yet"? Probably not if but when and it certainly doesn't hurt to be reminded.

Don Coxe: "if you found out your mining company had invested in these papers you'd want to throw management down a mine shaft". "beyond idiocy".

Expects the USD to go down and is very bullish on gold, and "the bear is not over".

Khan Resources (KRI.TO) stock annihilated today. Apparently Mongolian government invalidated (?!) previously issued exploration license for so called Additional Dornod Property. Yet another blow to my miners portfolio :(

Wouldn't the hedging non-mining players like AUY be a safer bet then?

A very nice recovery today for Laramide Resources - LAM.to - up around 20% now

Looks like the market is in the process of sorting out the babies from the bath water as far as the junior miners are concerned.

ALOHA !!

SiO2 ... I still stand behind ECU, CNU and GIX. I have to say that GIX was the recommendation of AussieOnTop though. However GIX has also been a recommendation of Peter Grandich a year ago. Now you can add to the list John Kaiser who says GIX will have a $10C price within 12 months.

I did post yesterday that I bought ECU SILVER on the latest dips. None of these companies fundamentals have changed one bit! All are still sitting on huge deposits waiting to be proved up. I expect ECU SILVER to have a $5C stock price by the end of 2007 ... after their 43-101.

I also still hold PMI GOLD-PMV.V/PMVGF.PK and MOLYCOR GOLD-MOR.V/MLYFF.PK. Both of those companies I have participated in private placements to the tune of 200,000 shares.

That said ... they are all stocks and as I have posted before with charts(1987 crash)even gold stocks go down when the DOW does. I believe there will eventually be a decoupling.

Here is my strategy and it has nothing do with the price of gold or copper or even what happens to the DOW!

STRATEGY
Buy the junior explorers with the largest most prolific deposits in the most stable countries you can find. The major producers have had to mine their best grades at their biggest deposits for the last 20 years just to keep their doors open when POG was at $250USD and silver was $3.50USD. They have depleated their best grades and now are mining lower grades which they are finding are still having problems keeping up with inflation(gas/equipment) and unions(labor). In an effort to keep doors open the majors also sold off their most prospective exploration properties to juniors.

Also I buy the juniors with no debt and no non-recourse loans and no JVs with major producers. That reduces the derivatives risk associated with hedge books. I let go of WGI because of the $105mil loan facility tied to forward sells at POG $800. That is just my rules. I also let go of Golden Star(GSS) for the same reasons.

If you want a perfect example of this strategy in action then look at Northern Dynasty-NDM.V/NAK.AMEX. I bought Northern Dynasty at $0.65USD and three years later sold at $9 and $10USD. I also bought AFlease now SXR at $0.25USD and sold off at $9USD three years later after a 2:1 stock split.

This strategy will work even if POG drops $200USD from here, because the majors need more resources and they will pay for the best deposits in the most mining friendly and safest countries.

I fully expect a similar scenario with ECU, CNU and GIX. I also see PMV in that arena and actually may beat GIX to production.

Hello kaimu,
No WGDF/ WGI? Do you mind sharing your reason if you do not own Western? Will help me with my perspective as I am way over weight on Western.
Much appreciated,
Tom

Thank you Kaimu. May I ask you, do you know where they invest their short term cash? Is that part of your dd with them?

ALOHA !!

golden 7 ... I have nothing against the WGI deposit or its potential for profitability or its country risk. I just do not support loan facilities where banks demand forward selling in a rising POG environment(inflationary pressure). Its that simple ...

Now it could be that WGI gets into some fast production and pays off the loan quickly or refinances or sells stock or some other avenue for repayment. Who knows? All I know is they are tied to a $105mil loan that requires them to sell forward at $800USD. Could be if POG never goes past $800USD over the next 3-5 years they will be okay since they can apparently mine at a profitable level. As the years go by the cost to mine will increase in real terms because gas and equipment and labor(unions) won't get cheaper. Will the WGI grades hold up? If the US Dollar tanks then POG would be over $800USD and all import costs mainly oil and gas would skyrocket. Thats the hedge book squeeze I speak of and the risk that a number of majors and minors have succumb to.

A few questions there, but I prefer not to be invested in companies constrained by hedge books or JVs with majors who own such non-recourse loans.

SiO2 ... Thats another issue. Already two juniors have lost millions in short term cash ventures. One RedCorp(as I posted $92mil yesterday)and the other New World($6.5mil). Even R1 A Notes are not safe apparently! Currently both companies are operating and moving forward but they face "repayment delays" from banks(HSBC)that utilize MBS from Coventree.

Welcome to the "fiat world" where cash isn't even 100% safe!

I believe that wake-up call will reverberate into the future and show up on earnings reports for 3Q in October. It was in October 1987 there was a market crash also.

where is MarkM? Interested to hear his take.

Good Afternoon Everyone,

Anyone worried about an afternoon selloff? This market may feel listless and vulnerable now, but it's nothing a few billions can't fix.

BBBRRRRRrrrrriiiiiiiingggg........

Hello. Plunge Protection?
Hey Ben. I was just about to call you.

Kaimu...Those cookies and macadamias are looking good.
(I also notice that money is only as honest as government..your insightful comment works both ways..what's that called?)

He is probably at the beach. Whevener he is away, we get a good rally :)
So, I hope he comes back after we close.

"Anyone worried about an afternoon selloff? This market may feel listless and vulnerable now..."

fill in the blank: never short a ______ market.

taking a (small) position in EWJ...think the Japanese exporters have been battered enough for the moment...

What's up with GG? After opening strong, its now down over 2% on heavy volume.

piggybacking onto the WFC position with another (small) position in XLF

jogyp-this is all i see...

SAN FRANCISCO (MarketWatch) -- Goldcorp Inc. (GG:goldcorp inc new com
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Last: 21.34-0.22-1.02%

2:37pm 08/17/2007

CA:G22.69, -0.48, -2.1%) said Friday roughly $14 million of its $600 million in cash and cash equivalents is invested in a Canadian asset-backed commercial paper fund, representing 2% of its overall cash and cash equivalent investments. The Vancouver, B.C.-based gold producer said it does not consider its investment in the fund at risk. Goldcorp shares rose 16 cents to $21.72 in Friday afternoon trade.

JogyP:
GG-SubPrime loan problems. Reported earlier this week now out as a news flash once more. I'll buy when it slips below $21.

GG used to be the banner senior PM miner prior to the Glamis fiasco... they are probably held by many funds and so continue to see selling into market strength. But that's just a theory.

2nd_ave: you plan on holding EWJ over the weekend?

is it possible the reactions to the credit squeeze are now extending to "unreasonable" proportions?

think back to some of the crises we've had in the recent past and what became predictable over-reactions: do you still postal workers wearing latex gloves, or face masks on workers in HK?

it's easy to "see" threats where there are none when you're looking for them in every corner...

previous post re: GG

No real lift-off so far, but the 3 PM mark is here, let's see what that brings.

Financials have enjoyed a serious bounce here, but precious metals are weak. Silver is down???

fazeli-that's right...and that's why i took a (small) position-that way i can average down if the Nikkei goes into free-fall ;)

GG:

GG news release on subprime looks like good news to me. I think it may be option expiration related.
I bought some Sep 20 calls yesterday at these levels.

Looks like we're headed for an upward close?

Please excuse this novice question. According to Bill, do we get a buy signal when the daily RSI dips below 30 and then rises above 30? Or do we need to wait for a MACD crossover to get the buy signal? Thanks.

So 2% of Goldcorp is in abs, that is not so bad. I agree that it looks good to buy.

Hopefully all the miners will come clean now and tell us where their funds are invested.

Kaimu, I'd feel more comfortable knowing that your PPs did not end up with Coventry (et al), not so much for the possibility of them losing the funds, but for Coxe's management "idiocy" comment. He is so right.

Sadly, I suspect there are a lot of funded companies out there hoping to make money with their investments. These investments offer a higher interest for a reason.

Novice: it's your choice which you choose... if both, then you have a more robust indication of a positive turn-around. If you choose one or the other, you risk being tied to a single metric, but you may find that you can enter positions earlier.

Risk vs. reward.

There are in fact many indicators. Another favorite of mine is the CCI (Commodity Channel Index), where crosses above -100 (from below -100) are an early indicator, and crosses above 100 (from below 100) are a solid indicator of positive momentum.

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:commodity_channel_in

I have taken an entry position in HMIN (hotel chain in China - looking for the Olympics). The stock has been beaten down to 1-year lows. China may try to cool down its market, so do your dd.

Is Pan American Silver getting hit here because of the earthquake in Peru? They report no damage to their mines, but I can't see any other reason for them to be negative on the day with such weakness yesterday as well...

Worth buying a bit more of PAAS?

re: miners holding asset-backed paper --- Kinross has $50M of its $250M cash holdings in short-term R1 notes expiring Sept. 12.

i don't believe this is cause for serious concern. also, it appears the third-party asset-backed paper market in Canada will be bailed out:

http://www.reportonbusiness.com/servlet/story/RTGAM.20070816.wbailout0816/BNStory/robNews/home

Thank you learn2invest.

Bob

2nd,
To be philosophical, ... I feel like I am becoming more aware of two inner executives of our investment self. There's the setting up of a portfolio and the strategic adjustments along the way that can spawn, or not, synergy that transcends periodic and inevitable flaws. As Bill has been able to connect with us I sense just how well he wears both hats. Too much stress for me. While I find the investment world fascinating, I'd hope that I can let go of the "keys."
We can't all be MarkM, as I think so many have appreciated his input. I made my decisions a few weeks ago and now just waiting before I deploy cash on the sidelines. My hat is off to those that can capitalize on the huge volatility. For me it would only make sense to risk even a small position IF my portfolio already had a large component that was income producing/absolute return oriented. Looks like a decent close with even GS offering decent if not restrained participation.

jasper-hope you survived the root canal...
you can relax a little...until monday ;)

craig - re: security at public wifi spots

http://lifehacker.com/software/privacy/surf-safely-on-public-networks-255480.php
http://lifehacker.com/software/top/help-with-hotspots-211705.php

lifehacker.com is great for usable tech info and a resource for great free programs. bookmark and/or put in your RSS reader.

KGC

RSI7 daily moved up and crossed 30 today.

(Disclosure--already had long position)

Fazeli - Re IB, how are they in terms of tax reporting? By that I mean how much trouble to reconcile their gain/loss report with the 1099-B. That's another area where Schwab fell down.

If they are good in that area, I'm ready to switch!

Jock - I mentioned awhile back in another discussion that the IB tax forms are excellent. All I did was itemize the IB account on my tax return with a "see attached" printed the IB generated 1099 form and bingo. No generating my own cost-basis or deducting commissions that I have been left to do with other discount brokers (or asked to pony up extra for).

Jock:

I am in the process of transerring my account to IB. Make sure you do not have any untradable (eg: Bankrupt)securities in your account, or the ACAT transfer will fail, causing delays.

Check out the ratings for IB:

http://www.elitetrader.com/br/index.cfm?action=view&R_FirmID=43&start=11

Long IBKR.

Hi Guys,
Back from Dad's surgery. All went well and I could check in on the markets pretty much as needed except for the scary vital close (where lord knows ANYTHING can happen).

I See Bill is experiencing type key as I did....a triple! That MUST be good luck, eh?

Let's say so and go with it. Maybe It's good for a choice residence in the Bahamas.

Let's keep on the sunny side of life. The alternatives just won't do. Hope the connections get better Bill, I can relate to the frustration.

Nice finish today, let's hope Asia and Europe can build on it for Monday.

Bill,
Please, no worries. I would usually be a longer term trader, but in this environment am either a holder of cash and sitter on hands, or a participant to prosper on volatility short term/day trading.

I think you wear more than two hats but they all look stunning with a tan and work perfectly if you apply them to the proper time frame.

The fishing lessons must be working because when I saw the fed headline this morning I didn't need to check the blog to know what to do.
I instantly knew what it meant and got a line in the water and started buying gold, silver and miners, then sold into the strength as they popped. Now we're back below those buys and sells and I was able to add a bit before the weekend. I may have Barrick and others to thank for an extended opportunity, but today's fishing was good and the lessons, at least part of them, are sticking.

Many Thanks Captain. Have a relaxing weekend.

Jock, as long as you don't trade any Canadian income trusts the accounting is fine. Their accounting for income or royalty trusts bears absolutely no resemblance to what is the actual breakdown of the distributions. I end up sending the IB info to my accountant but mark on it what the breakdown should have been. We've always used my figures as correct.

For U.S. accounting it still is probably wrong.

2nd,
On my hit list, if I could have one, would be one or more dentists. Narcotics, beer, endless dvds and my sweet wife will be my weekend diet. And, yes it helps a lot to see the week end with .xau on the mend. The hard part will be knowing when to put cash to work before the gaps up continue. Maybe if i didn't think of it as my money it would be so much easier. I have some regrets of not pulling the trigger this week...just not in the state of mind to risk more exposure for an "intermediate" trade and I got spooked by early zero volume this morning on the etfs of interest.

My etf choices,fwiw:
pwj(mid cap growth), pey (hi dividend/heavy on financial),xes (gas and oil), and ilf (latin am). All mechanical choices based on varied rocs adjusted for volatility. And, all looked like leaders today. I'm noticing that powershares really does add value to their hybrid indices.

On some of the etfs that trade volume circa 100-200k, I'm not finding that fidelity's real time quote screen "appears" to match end of the day volume. I get the feeling that trading is happening but there is signficant delay in posting it. When I saw zero volume in these etfs at 10am I held back. Bad enough to have an order confirmation delayed.

Anyone else out there having a similar experience trading etfs? The solution is to take the time to call the trading desk. On days like today I wonder how long it would take to get a rep. Would be really cool if there was enough interest for an etf bill cara blogging site. Then again, bill would have to clone himself.

jasper,
early on today a few of the proshares ETFs were showing trades at the ask when market closed ($399) - I thought some poor innocent had put in a market order before markets opened and gotten royally screwed. Showed on Scotrade and Yahoo! but sounds like it was a reporting problem.
WiFi users may want to look into a personal VPN - found this for $40/year - haven't tried it, so do your own DD:
http://www.witopia.net/personalmore.html

Craig,
If you're still using Scottrade Elite, security MAY be less of a concern, given that the platform is proprietary, allowing them to build in their own protocols. Don't know if they did, but they'd be really stupid not to. I'm still having problems with it - up till 2 weeks ago it would load up my charts and quote grids quickly, now it seems to lose the initial connection immediately after login, and I have to re-enter all chart symbols manually - very tedious.

Bill,
I was surprised to see you write that the Fed did the right thing. Seems to me that money was always available at the discount window, they've just made it cheaper. Postponing the pain of dealing with the problem just allows the disease to progress (and I guess allows HBB to pass the buck).

cyderman -

From a fundamental standpoint, I agree with your analysis of the Fed action today. They lowered a bit the cost disincentive to borrow from the local Federal Reserve Bank (vs. on the interbank market), extended available loan duration, but stayed short from putting themselves on par with commercial counterparts (at least for the time being).

With Bloomberg's background article from C. Baum (http://tinyurl.com/3dfheo) in mind, I disagree with the majority of market analysts who view this action as foretelling cuts in the federal fund rate throughout the fall. Bernanke has just started to put into action the plan that could have averated (in his view) the Great Depression. Recent lock-ups in credit markets are symptoms of a nascent crisis of intermediation.

Step#1 (last two weeks): Reassert FRB's monitoring of the situation, concerns for problems, and readiness to act as lender of last resort (LOLL). Inject short term liquidity to major primary dealers in the hope that tehy can unstick the snags.

Step#2 (today): Step up FRB's LOLL profile. Offer more competitive terms & conditions. Reassert readiness of more action.

Step#3 (next month(s) if system continues to freeze up): Cut discount rate to federal fund rate (or below). Execute large scale transactions with a group of national lenders simultaneously to signal LOLL role and meaningful involvement.

Step#4: if all fails, put on an helmet, duck and cover....

In short, Uncle Ben has launched the first act of his kabuki play aimed at lowering the stigma attached to the discount window. If, yesterday or even today, any publicly traded bank walked up to the discount window in their district with a package of consumer & business credits (of good quality) for a short term loan, I can assure you that their fate would be sealed and their next appointment would be next door with the bankruptcy judge. No pity from commercial correspondents and Wall Street for the poor soul.

If the current action does not work, I truly see a Step#3 large scale operation (multi-billion repo) involving a few Wall Street firms with a CFC, a WaMu, even an IMB that would make clear that FRBs are open for business.

So IMO Bernanke still sticks to the academic script which calls for preserving bank reputation, effective intermediation and FRB's credible LOLL function at all cost to avert a run on any mid-to-large bank and its cascading effect through the system. His effort is to tackle the risk of credit disruption, not the deterioration of existing asset quality. So success should be ephemereal if no solution addresses the impending losses (and increased risk to future credit creation) on the books of the lenders.

JML

Bill - Personally I think you've been at your best ( for the past year i've been a reader ) during the past month. Quite possibly b/c we've been running scared chasing every and any piece of bait, it's refreshing and reassuring to see you standing at the helm...calm, cool and collected - offering direct advise during a melting market. thanks much, keep up the excellent work. rk

Very red overseas. Any idea what's going on with Nikkei?

peter: pasting your july 28 post, which came eerily close to both calling the magnitude of the drop, and the fact that it would be time to cover shorts:

"Where is the market going from here?

In real dollar terms the overall Stock Market in the U.S. fell from 31.36 to 29.38; that is the average price of over 8000 stocks.

While it has taken out all kinds of technical lows, we haven't seen this type of overall fall since the period from May 9th 2006 to June 13th 2006 when the average was at 27.82 and then proceeded to fall to 24.74 over that 24 Business Day period of time.

I looked at the DJIA chart and we could see another 600 points shaved off the DJIA which may mean we are only half the way through this correction.

If you own good quality stocks, with good growing earnings, there is no need to panic.

Personaly I would be looking to cover shorts and go long if the market falls 300-400 more points.

I would suggest that this is in no way the end of the bull market, as the Vector Vest Value line has only fallen 51 cents over the same 6 day period mentioned above.

It was on November 16th that the VV Value line first broke to the up side above 32.36 to play in the range it has held for the last 8 months peaking at 34.17 a $1.81 spread.

During this same period (mentioned above) the price of the Vector Vest Price line bottom was 27.73 while it peaked at 31.44 a $3.71 spread.

So we see that the value line of the VV Composite has played in a narrower range than the price line. And the price started to get closer to the Value line.

Over the last 5 years, the price of the VV Composite has normally played at about a $3.50 discount to the Value line; and as of Friday we have a $3.58 difference in the two lines. So in essence what we have done is corrected to the aveage price in these two lines, with this correction.

The market is in no worse shape then it ever has been, but if the stocks continue to fall they will be able to be bought at a discount to regular normal prices from here on in.

IT IS TIME TO BUY THE MARKET FROM HERE ON, IF THE MARKET CONTINUES TO FALL."

Posted by: Peter [TypeKey Profile Page] at July 28, 2007 6:50 PM

follow up post from the same date:

"If I had to put a number on the chances of this market falling another 300-600 points, I would say it is about 80%. So I am anticipating it. But as I said before: "I dont think we will see much more then 600 points more taken off the DJIA from this point".

Posted by: Peter [TypeKey Profile Page] at July 30, 2007 2:37 AM

and finally:

"As I have stated before: The global economy is growing, and the US dollar has fallen over 33% against most major currencies in the last 5-7 years. So the stock market has risen about 50% if you take out the currency depreciation from the increase in assets of the US Corporations, listed on the stock exchanges, since the markets lows of October 2002. Considering the 350% gain, in the 9 year period, the DJIA had from Jan 1991-2000 I would hardly say the market is overheated and due for a serious long-term fall.

Unless you are suggesting the global economy is in serious trouble? I think you would be making a big mistake to believe that the United States has the ability to turn the Global economy into a world wide recession. Actually if it wasn't for the Global economy; the U.S. would be in the worst recession since the GREAT DEPRESSION: and maybe heading for the worst recession ever.

Once you rap your head around this, you see that this bull market has very long legs ahead of it: BUT SELL IF YOU WANT.

I am confident in 6 monthes from now, the DJIA will be closer to 15000 then 13000 or even 14000 for that matter."

Posted by: Peter [TypeKey Profile Page] at July 30, 2007 2:37 AM

we'll see...

brianr: what page are you on, man?

"Narcotics, beer, endless dvds and my sweet wife will be my weekend diet."

jasper-actually, it sounds like a pretty good weekend ;)

brianr,
If you live in Europe or North America, I think you're looking at last night's Asia news.

Bill -

I sincerely hope that your interpretation is correct and my suspicions too pessimistic. Granted, Bernanke's action for the past two weeks has focused on reestablishing a sense of calm to market participants and confidence in the functioning of the market macrostructure. Yet I fear that the Federal Reserve (and/or other governmental institutions) will be forced into more direct actions to avert a wave of simultaneous "bank runs". The multiplication of critical problems in similar, yet not directly connected markets, underlines that the conditions (in terms of a sudden shift to risk aversion extremes on the part of creditors, a pervasive suspicion as to "who's next?" and the collapse of a long-lasting credit pyramid) are present for such a calamity.

IMO, Bernanke has seen more than "just" jittery, borderline panicky markets. He is genuinely concerned that he may have to deal in practice with problems similar to those he has spent his academic career dissecting: a complete economic dislocation (beyond financial markets collapsing & recessions) so profound that it unravels the tenets of global commerce and social interactions on a world scale.

At the end of a long and arduous week, I should probably log off as I feel my mind slipping beyond the scope/subject at hand here.

Best to all. A refreshing weekend b4 more fun-filled market gyrations.

JML

Hey 2nd_ave

Looking at previous charts I would think we see a rally here and then another pullback to test the lows. Until we see interest rates fall the bulls won't want to move the markets higher by too much.

Look for more volitility: up maybe a few hundered points from here and then down again: until we see interest rates fall.

That is my best guess from here.

1 more thing: I looked at another set of charts and one view showed a possible drop to 11800 on the Dow. I thnk we are safe from that as a possiblility for now.

If the fed let the market collapse it would most certainly mean the collapse of the USD. I don't believe the Fed wants that and will not let the US economy fall into that predicament.

It is imparitive that the fed drops interest rates, to keep the economy going forward while the global economy is growing. Given the U.S. personal and Federal Debt, a serious recession would would mean the U.S. would have to print more dollars and devalue its currency much further and would cause double-digit interest rates in the States.

Now while this may be the eventual outcome, if the U.S. doesn't deal with its debt problems, you can bet no U.S. government wants to be seen to be responsible for this outcome on their watch.

As long as the global economy has as much possible growth ahead of it as it does, you can bet the Bull market will stay intact: The U.S. needs to ensure this happens until it gets is debt under control.

In the years to come, watch for a stagnation in the TOTAL growth of all economies and short the hell out of everything: starting with the financials.

Here is some food for thought. Once the world has finished satisfying this hunger for the physical consumption of goods and growth stops: I think you will see a number of currencies collapse and there will be a movement to solve this problem which will see the dispelling of physical currency. Seeing we have computers and technology is reaching all ends of the earth: it is conceptionally possible to not need physical currency as a form of keeping track of credits for debts owed.

This was predicted to be what would take place, in the end, by the writer of the book of Revelations.

Mom&Pop and the rest of the community:

The last several entries in this string could very well be WIR#33.

As you know most of the important commentaries here hold views of: ‘here is what I think from my past experience’ (and then) ‘however if that doesn’t work’ (how about this).

Please consider the following entries from above and the financial world of what is in front of us comes to top brightness of a 3-way light bulb:

“To be philosophical… Posted by: jasper at August 17, 2007 3:55 PM

“jasper, thank you kindly….Posted by: Bill Cara at August 17, 2007 4:29 PM

“In case I cannot get out the WIR this weekend…Posted by: Bill Cara at August 17, 2007 4:59 PM

“From a fundamental standpoint…Posted by: Jumble at August 17, 2007 8:10 PM

“cryderman and Jumble ….Posted by: Bill Cara at August 17, 2007 8:19 PM

All of the PETER postings found re-posted by 2ndAve

and the actual PETER posting:

“Looking at previous charts …Posted by: Peter at August 17, 2007 11:37 PM

and finally:

Jumble,
I too am in the Michael Panzner Financial Armageddon camp, and believe that the problems are far too great for the good Professor to solve.
I enjoyed your contribution here.
Posted by: Bill Cara at August 18, 2007 12:43 AM

Bill enjoy your weekend your blog has worked for you ;)

ALOHA !!

It is a well known fact that during any crisis whether it is financial or enviromental people can cope just fine without government. That was proven by Katrina when the US government failed it citizens of New Orleans. I won't go over all the details since everyone here can recall them. While there will always be examples of looting(self preservation)and other crimes the vast majority of people helped each other. Crimes and criminals tend to flourish and center at large cities not in suburbs or rural areas. In terms of time Katrina was brief, but what a lot of posts here are evaluating are longer term consequences of a total collapse.

Katrina made it obvious to me what all governments fear most is that people would see and understand that a massive centralized government is not needed ... much less a global one. I think the Euro will prove that in time. How much longer can such a currency exist as it rides on the back of the productivity of the Germans all the while continuously lowering its "economic and financial" standards until a Euro starts smelling like a US peso! I would think the Germans would get sick and tired of being tied down and dump the Euro to get their DeutschMark freedom back. I equate the Euro "experiment" along the lines of LBJs "great society" experiment. Its failed ... only problem is ... its not yet official! Unless you measure success in terms of high inflation and huge debt ... then like the Euro the "great society" is an outstanding success! In all these examples and even the great Russian "experiment" of Socialism there is one common denominator ... BIG CENTRALIZED GOVERNMENT THAT STEALS FROM THE PEOPLE AND SPENDS ITSELF INTO OBLIVION ...

So Bill and Peter and others when you speak of failure and crisis and Armageddon it is BIG government that fails every time. It is Empire that fails ... The "people" in all cases keep on going. People are resilient and will find ways to survive without government. It is government that cannot survive on its own! If BIG government could survive on its own then we'd all still be speaking the Roman language and living under Ceasar XXXXXXXXVVVVVIIII !!!

As I sit out here in the jungles of Hawaii I come to realize that more and more. If the US government fell off the face of the Earth tomorrow I would do just fine! I would just spend more of my day here fishing and gathering coconuts instead of working half a year to pay taxes! Come to think of it my life would be 1000% BETTER without the US government. What would the US government do though, if I stopped paying my taxes? How long would the US government last if we all stopped paying our taxes?

BIG GOVERNMENT ... A LEGEND IN ITS OWN MIND !!

ALOHA !!

Speaking of taxes ...

TAX FREEDOM DAY !!! That is the day when you no longer work for the federal government(paying taxes)and can pocket the money yourself!

Back in 1900 TAX FREEDOM DAY(TFD) was on Jan 22nd! In 2007 it was April 30th ... Notice a trend here?

Globally India has the lowest average tax at 20% of income and TFD is the 74th day of the year. The two highest taxed countries are Sweden and Israel, both over 56% and both TFD over 207 days! Seems the more Socialist the country the longer you work for the government!

Link to TFD: http://tinyurl.com/2kbbvb

Global tax rates vary wildly ... By far one of the best countries to live and do business in would be the United Arab Emirites(UAE). They have 0% taxes on corporations, 0% on personal income and 0% VAT/sales tax! No wonder Haliburton moved there!!!

What is it in the Bahamas Bill?

Link to global tax rates: http://tinyurl.com/yvqc4q

2nd ave. ,,you are a good shorterm trader. I on the other hand am mediocore ST at best.

I do my best in a rising medium term(2-6 months).

I have certain indicators that hardly ever fail me based on the broader mkts.

I believe that, as Bill stated, the naz and the nyse are poised to rise over the next 3-5 months.

I bought heavily on this past Thursday all day.

I have just about completed my buys and hope to finish on Monday morning.

MU is one of them(I bought at 10.65 and 10.90).

If you buy decent companies they will rise with this incoming tide.

I also think one should trade them within this bounce based on trending indicators, ie. rsi/slow stoh, etc. within the guidelines of your favorite moving avgs.

IMHO.

Dab

kaimu

The Governmnent will do what its always done when people revolted, which is bring out their armies and crush the people into submission.

It is illegal for the fed to collect taxes and yet they do. Go ahead and don't pay them and see what will happen to you.

Governments purpose is to be a collective body to oversee the enforcement of rules so that the body of people (society) can exist without people doing as they all please an thus in the end keep from killing themselves off.

If there is no overseer to enforce Law, I can kill you and what is to stop it from happening (I use this analogy to show you how you need an enforcer of laws; Government). One thing is for sure: mankind cannot exist without government like it or not. And since you need government someone must pay their bills.

If you think people can govern themselves, you misundersstand the nature of people; people are selfish and seek the their own interests above others: thus they rob, steal, and seek to rule over others.

Those who are the most materialistic seek to rule over the masses and will do so at all costs. Do you really think you don't need government to protect you from them. Be thankful that you have a government that has checks and balances in place, which give the people the final say as to who they have rule over them.

dab-

thank you, but my recent performance has nothing to do with being "good." ST trading "works" during periods of volatility, and simply adapting my trading style to fit the environment. like you, i prefer swing trades over a period of months...as previously mentioned, my time horizon on the miners immediately changed to "longer-term" when the selling clearly became a rout.

as to your comment: "I bought heavily on this past Thursday all day." ;)

peter-

thanks for an update on your outlook.

as you point out, the "hunger for the physical consumption of goods" has zoomed to unreal levels just in my short lifetime. as wavesmash might put it, we have spent a BFL of money on stuff that has nothing to do with living a full life. the fed's job may very well be to help unwind the spiral of debt while minimizing the destruction of wealth. of course, they would have do be under the direction of an administration with enough charisma to pull it off.

btw, you posted something a few weeks back pointing out the "buy high-sell low" trap. i was looking for it thursday afternoon, couldn't find it, and ended up ad-libbing about it. definitely played in my mind thursday.

"the book of Revelations" and "Financial Armageddon"- all need to look beyond the trading platform..

Oh Peter....your financial posts are very good, but your government idea isn't very comprehensive.

If people cannot manage themselves as individuals then organized groups of people are not going to break out of their behaviors of trying to control other individual people or other groups of people, at least without guidance. They simply kick it up to the mob level. This is simple first semester sociology. As a perfect example we have our government trying to force the governments of other people to do what we want (and using every cheapo idea ever used by one group to dehumanize another so it's okay to KILL them). All that happens is instead of individuals using individual force (which can be countered by another individual BTW, *I* would stop *you* from killing me, the same as a cop would) we have more or less mob rule with one mob against another and then it comes down to brute force. Is that the high idea of government? That's just MOB rule.
All that happens is the individual weakness you cite then is transferred to a group of "like minded" people.

The actual danger is not individuals, this has been proven throughout history. It is organized groups like governments and religions that seek to find a central idea they agree on and then to impose it on everyone else.....by force.
Taxes in the guise of serving the people are then STOLEN to be used for MOB rule of others.
An once we control them the government then has the means to control IT'S OWN people and source of currency/wealth to do so.

So far we have seen this with ideas of democracy, socialism, fascism, Islam, Christianity....etc. etc......every ism, ity, or ocracy known has been turned to mob rule.
Name one that hasn't been corrupted for the control of others. Just one.

Do you have any idea how much of our tax money has been stolen in Iraq by those supposedly working "for the people" to control groups of other people? PLEASE!

The promise of America is our Constitution, not the government we have now which attacks the Constitution at every turn. The Constitution is the checks and balances, not the government.

When our government is made up of people that actually fulfill their OATH to defend the Constitution (instead of their own MOB desires) then there may be a government we can all be proud of. But as long as it's another mob amongst mobs with no Constitutional compass, it will continue to be the enemy of the people and their liberty. Clearly, right now we do not have the checks and balances you presume.

Habeas Corpus anyone?

Dearest Kaimu,

I possess a profound respect for you and your views and I share many of them. However, above you say:

"It is a well known fact that during any crisis whether it is financial or enviromental people can cope just fine without government. That was proven by Katrina when the US government failed it citizens of New Orleans."

Excuse me? Katrina an example of people coping just fine? It's true that Republican hands-off politics, combined with a new, brazen and hateful though subtle type of racism/classism were at work. But hey...Why should poor people and blacks expect to avail themselves of the services of government during a full blown state of emergency? They don't "work" until April 30 in order to pay taxes, so why should they be rescued?

I am guessing you would scoff at the notion that in the 1930's WPA projects actually did keep American citizens from starving to death. FDR tried to jump start a dead capitalist economy, failed, and then succeeded with the biggest government spending project of them all, WWII. We can debate the economics of war and economically, it was a war well worth fighting, but could it have happened without Big Government?

I had a distant cousin nicknamed Red who was a fighter pilot in WWII and was ambushed by the Japanese and fell to the ocean dead at the age of 24. Another uncle who survived was a paratrooper in the 101st and after he served heroically in the war he came back to New York and became a butcher on long island and barely could support his family in the America he had helped to vouchsafe. There are people whose relatives lost their lives in the Civil War, or in Vietnam, or in WWI like my own grandpa Dom who was gassed by the goshdarn Germans in the trenches, brutal stuff, chemical weapons, and who lost his voice and almost his life. My point is, there are those who have a kind of an inheritance, not a monetary inheritance but a blood-equity inheritance, a debt owed by a nation for service rendered at a time when the country's sovereignty was in doubt. These people and there antecedents, and there are many of them, are the rightful "owners" of this thing called America too, just as you are, and have a right to a share of it's resources, as do, perhaps, everyone else, depending on how far one wished to extend moral arguments.

Finally, you say:

"As I sit out here in the jungles of Hawaii I come to realize that more and more. If the US government fell off the face of the Earth tomorrow I would do just fine! I would just spend more of my day here fishing and gathering coconuts instead of working half a year to pay taxes!"

I get that this big government thing is happpening on your dime, and that must be really irritating. I have to say though, I don't like paying taxes and I don't pay nearly as much as you do, but I don't obsess about paying taxes and I don't have 7 figures in cash. Be grateful for your life, it sounds like a good one. And please, don't call into question your awesome and profound intellect by offering ill-considered and invalid arguments.

Just was bored and wanted to weigh in, not on a vendetta or anything. Send macadamias, I will be nice.

Chris,
Organizations usually start with the best of intentions. To defend the rights of a group or to advance an idea. Noble beginnings.

That is how our country started. To defend the rights of individuals so individuals could all live together in peace free of the rule of other individuals and groups.

Once the whole is broken into sub-groups and the real interests of the whole are abandoned, then we no longer have the original idea because these sub-groups now have an agenda to promote.

Be it the military industrial complex, Wall Street and the capital markets, or AARP, the original allegiance somehow gets lost. How many people describe themselves as "Republican", 'Democrat", "liberal",
"Conservative"? There is sociology at work being used to divide the whole. Old against young, rich against poor, white against black, one religion against another.

We are ALL AMERICANS (or in many cases here, Canadians) and we aren't these sub-groups. The powerful use sub-groups to divide and rule the whole.
The sub-groups have supplanted the real *one* group the Constitution and Bill of rights was designed to defend. THE original organizing idea of America.

Once one or more of these sub-groups turns the aim of the whole to IT's purpose, that is to force others to adopt their idea or to steal their resources, then the high idea of America is lost.

We often make the mistake of applying high moral values to government actions that are really in the interests of one powerful group. At minimum these interests are purposely blurred or confused.

Iraq for instance, is foisted upon the people as "the war on terror", when in reality it is one segment of the American MOB STEALING RESOURCES from another MOB by force. If this were not true, then all Americans would be able to read the minutes of Dick Cheney's oil baron meetings at the beginning of this administration and you could get a full accounting of the graft and corruption directly benefitting
Dick and his friends and family (and Halliburton). It's still mob vs mob.

Your proud relatives didn't serve and die for anything BUT the Constitution. That is the oath they took too. I guarantee they weren't thinking they were fighting for GM or Standard Oil. They were fighting for ALL of us, for the Constitution and Bill of Rights, not one sub-group. They are not reponsible for blurring or confusing the interest they fought for.

Ron Paul (and interestingly Dennis Kucinich)have it right. The government's only purpose is to defend the country and our individual rights.
Once those ideals have been hijacked for the interests of anything other than those two purposes we are in deep trouble.

Kaimu's intellect is in perfect working order.
His arguments are well considered and though out.
He has the advantage of age and experience to gather useful and pertinent historical information and to make his life experience part of his well considered picture of life.

You are rightly proud of your relatives that served the country. That they also passively served the purposes of others and other sub-groups in doing so I'm they were never aware of and has no bearing on their service or honor, anymore then those serving now think they are lining the pockets of Halliburton or Dick Cheney and his F&F. That is why the powerful divide us.
Otherwise we would know and those in control would freely share that information. That is clearly not the case.

In considering our history and the truth, Kaimu does nothing to belittle those who have served, or even the country itself. He is simply pointing out that it isn't as simple and wonderful as those disseminating and controlling information would have you believe.

Sheesh,,,,all this Big Government discussion and I was looking for a tip for Monday,,,lol.

I'll weigh in with something simple.

I have been a foot soldier in a war and dealt with the real blood and guts of it all, and came home to a job in a factory.

I will say this, I never complained once about the big government that sent me and I don't complain because I have to pay from my meager salary for taxes to help support it.

In fact, had it not been for Big government America would be nowhere near where it is today.

Without a strong central government, there is no body to plan, organize and control the masses in a direction which better serves the majority while protecting the minority.

I thank God, and I am very happy with what I have and where I am today.

Dab

ALOHA !!

Look, I thought I made it fairly clear that what I am against is a BIG CENTRALIZED GOVERNMENT ... Like the government that toppled the Roman Empire ... Like the government that toppled the British Empire ... Like the government that toppled the USSR ... Like the current US government that is now toppling the US Constitution. I can't tell you how many times I have posted here about how the US Constitution is about small, unintrusive government. What we have now would have the Founding Fathers mad as hell if they were alive today. What we have now is purely large scale elected "Treason" !!

To me the only things government should be doing is protecting our borders ... WHICH THEY DO NOT DO! Also defending the laws derived from the US Constitution and Bill Of Rights ... which they only do selectively when it meets their own political agendas, hidden or otherwise.

British common law, from which our laws are adopted is based on two simple priciples. One ... that you do all that you say you will do and Two ... that you do not encroach on other people's rights or properties. The current and past US government has become quite adept at breaking those laws on a frequent basis, usually with disastrous results. Witness the "War On Terror" ...

Lets talk about sacrafices ... First I said nothing about those serving in current and past wars. I have lost relatives and friends in every war from WW1 to Iraq. Our Founding Fathers and the people of that time took on the largest SUPERPOWER in the World and won! That was a truly incredible feat ... miraculous in fact! They were the original "freedom fighters". Without their sacrafices we'd still be saluting the Queen and there would have never been any FDR or WPA ... much less a Baby Bush! What was created by the US Constitution was a "Republic" not a "Democracy". We all know the history of the early USA and yes people were imported from Africa as slaves and yes not everyone had the right to vote, basically only land owners, so it was not perfect. I believe that what we now have is, as Craig has said, "MOB RULE" which is not even a Democracy any more but Socialism. When government is in every part of your life and most of the country, including corporations, either lives off a government check directly or indirectly, to me that is Socialism ... USSA style ...

Peter, if you read US History you would see that most of the USA and its territories and citizens were able to live without any real government enforced law throughout the West for over a hundred years. Settlements throughout the West spread rapidly and aside from your basic robbers and looters things were mostly peaceful. In fact most of the Indian tribes were peaceful until the US government sent in their military to claim land for government endorsed profiteers like the railroads. All US government treaties made to settle differences with the "original landowners" were broken ... not by Indian tribes but by the US government.

In short the US government like the British Empire are no saints! I distrust my government more than my neighbors! I have the Founding Fathers and the US Constitution on my side ... If you argue in favor of BIG CENTRALIZED GOVERNMENT then you have Bush and Cheney to thank. They are your heroes not mine ...

What I have here in Hawaii ... I made on my own efforts without the aid of government. In fact my biggest hurdle to this limited financial freedom I possess has been my own stupidities and the ever-greedy US government and the State Of California with their far reaching profit annialating tax and regulatory systems. I get no subsidies or welfare for growing orchids. The US government assumes no risk in my business yet they take 30% of my profits to fund radical policies such as the "War On Terror" and the "War On Drugs". I voted for neither of those false and failed policies and I did not vote for Bush or any Rep or Dem. Government produces no wealth, government only destroys it! How would you know we would be better off with a BIG CENTRALIZED GOVERNMENT? Have you ever lived under anything any different?

This has been my main argument ... We have given the same two party aristocracy power for a hundred years now and yet we are in the worst possible financial condition ever and it is deteriorating faster not slower. We are more dependant on foreigners than ever before and we face ever greater military hostilities from not only foreign countries but foreign ideologies and religions. At one time not so long ago we were a creditor nation and an exporter, even oil. Nothing is improving. Why do we keep these same people in power for so long? When do we say ... THIS IS NOT WORKING? Neither party has our best interests at heart ... only their own. That should be obvious by now! What does it take ... $10 gas and $30 bread?

Their credo of late has been: SAVE THE DEBT ~ SELL THE GOLD!!

In the end the USA will just fade away like the USSR into the abyss of failed Empire and corrupt money. I have the US Comptroller General backing me up who I trust way more than Ben and his fraudulent bank.

Bill ... please explain how we as people participating in the markets benefit by having central banks control money supply and the velocity and flow of money? As I see it central banks only offer temporary solutions to a permanent problem ... like a band aid on a malignant melonoma! It is the constant printing of money that is the culprit and the cause here. There is no real wealth production to offset the enormous money supply present globally. Add in the tax and spend policies of global government and the regular working guy is being squeezed between visible taxation(1040) and invisible taxation(inflating money supply), which is nothing more than taxation without representation. That was one of the main reasons our Founding Fathers revolted against the British King ... unfair taxation.

A week or so ago I posted M3 stats for developing countries(BRIC) which Peter claims will take over as the new Middle Class spenders, yet their inflation rates are running higher than American rates some as high as 40% and their taxation rates meet or exceed US rates if you include corporate and VAT taxes. How can people spend, even in developing nations, when their incomes are being constricted by monetary inflation and government taxation? It is truly now a global house of cards thanks to computers. The name of the game is ... who can devalue their currency faster? I see nothing much healthy about the global economy and global politics looks even more grim! I do not call that pessimism ... just stark reality! In 1940 when Hitler was bombing London were Brits saying, "Oh, bloody hell ... don't be so pessimistic its only Nazi bombs ... Oh look that one was a dud ... SEE you're much too pessimistic mate!" No ... Britts were taking cover in the subways ... I sometimes use the anology of an avalanche. Three skiers caught in an avalanche ... as long as they are looking at each other it appears they are not sliding downhill or moving at all, but once they look at the trees flying by they know the truth. Thats how I see the global economy under a fiat monetary regime. Constant re-weighting, manipulating and modification and correographed devaluing makes it look like all countries are stable with great rising markets of wealth and not in an avalanche of debt sliding off a cliff of false "fiat" wealth! There is a HUGE difference ... don't be fooled!

The greatest secret never told is the DOW isn't going up the US Dollar is going down ... watch the trees go by for a change!!

Kaimu,

Thanks for your thoughtful words of wisdom. Unfortunately not many in the US are prepared to think about this point of view yet alone support it.

That day will only come only after events unfold that wake everyone from their lifestyle induced stupor.

You would not have convinced Germans in 1935 to overturn their government for the same reason we can not convince Americans to elect responsible leaders today. They accept their favorite faction's authority, moral and political, without question. They condemn the other faction's ideas with no forethought. It is one of our greatest weaknesses.

Some may say this discussion is too political for this forum. I disagree (ok...especially on a weekend!). How can we ever have social equity if we can't wake people up from their long slumber before it's too late? Doesn't absolute acceptance of authority have something to do with the financial mess we're in today? Ya think!

Perhaps this is all to philosophical for the traders here on the forum. I hope not. I hope we all can spend some quality time reflecting on these issues and our own responsibilities.

Instead of asking 'what's in your wallet?' we should be asking what do we need to do to preserve freedom, prosperity and social equity for our grandchildren. If not now, when?