Holy Cow Bill this is like the old days!!! Before 5:00AM WOW

Why would average traders now buy up stocks in companies that just fell due to the unwinding carry trade(due to a stronger yen), when the BoJ is temporarily weakening the yen? I can see how this could be a good trade if you could react faster with a shorter time horizon than the BoJ, but why else would the stocks that suffered at the hands of the Yen now rise?

I was just going back trying to find the page where you gave the 40 odd oversold stocks, I mean no offense to you Bill, but it was Wednesday not Thursday. Here is the link for anyone looking for it.

http://www.billcara.com/archives/2007/08/caras_commentary_community_cha_8.html

I am estimating a %10 move upwards from the price when Bill wrote his article on Wednesday. I'm using that info to base some quick estimates. I am also choosing only the stocks that are above 25'ish and from what I see are more likely to have undervalued call options. Do your own DD first!

PG was @ 62 +%10=68.2
$65 .pgim now @1.90 ~>3.2
$70 .pgin now @.15 ~>? estimated not to get to $70. sell into strength early.

TM was @ 117 +%10=128.7
$115 .tmic now @4.30 ~>13.7
$120 .tmid now @2.00 ~>8.7
$125 .tmie now @.70 ~>3.7

Echostar is already up over %10 from when Bill wrote the article.

I'm not trying to question you. I meant it in a way to try to figure out what would be driving the market. You said something would happen, from what I have seen I agree. I'm just dazed and confused as to the why. I just meant it as a question of curiosity as to market internals.

Quent-

"Why would a trader who just had to sell securities due to the stronger yen repurchase them due to the short term weaker yen? without any protection from the long term stronger yen?"

it was hard to find the thread here, but i'll paste the two relevant points for anyone else interested:

"The Nikkei Dow rallied +3.0 pct to 15732 today. The index has a long way to go to recover, but the good news is that there is not that much volume of the past week to eat through.

The Yen strength has really hurt the Japanese exporters, including the auto manufacturers. As I wrote last Thursday, I would be bottom-fishing the top quality auto makers, if, as, and when the Yen weakens, which it has now with the Bank Of Japan liquidity injection, and a return (for now) of the Carry Trade."

-and

"This morning, with the Yen weakening as the Bank Of Japan is pouring more liquidity into markets (along with the Australian central bank), equity markets in Asia-Pacific are rallying. Some are up as much as any time in the past ten years.

Ergo: buy short term call options on stocks of top quality companies today."

-so it sounds as if there weren't that many sellers last friday, and if you want to trade the current landscape (which is all you can do each day), then you buy now...

UNG-preparing to buy back in (leisa-c/w/s > gonna ;)-guess dean is no longer a threat, but i consider a 7% drop in NG futes an oppty...

UNG-what the heck, in pre-market at 41.05...
EWJ-not seeing much happening pre-market
miners-minor gains, but that's exactly the kind of open i prefer-chance to open/add, no invitation to sell..

Thanks 2nd,

I think I might have made the mental connection.

Bill,
I did some work on the relative leveraging of the consumer and corporate sector. The consumer borrowing capacity appears to have culminated a couple of years ago but its relative level of debt has much further to drop. This has obvious detrimental effects on the economy.

See this graphically at
http://wrahal.blogspot.com/2007/08/de-leveraging-of-consumer.html

GFI upped to buy from sell by Matrix:

http://tinyurl.com/38lbwb

Will,

I just got off the phone with a friend who is high up the food chain in the rug biz.[25yrs] He's been at carristan and now some multi national out of Egypt and he said it's been dead for 2 yrs and has never been this bad not even the early nineties. Nothing coming dn the pipe. I only mention this because you mentioned 2 yrs ago and he did. Everyone keeps saying this is Psychological/ blah blah but it is fundamentally based and it probably goes back as far as the .com pop when that injection of liquidity went into housing under the camouflage of 9/11 with the Japanese yen fire sale. Does that make sense? If the consumer is spent then regardless of the resumption of the carry trade things should get pretty nasty globally.

Sto

Moin from Germany,

Marc Faber has some interetsing insights about some market internals (looking not so pretty)

On August 16, 2007, says Faber: “The Dow first sold off more than 300 points, but ended the session basically unchanged. On the same day, we had on the NYSE only 10 stocks hitting 52 weeks new highs, but a staggering 1,045 stocks reaching new lows (which would indicate to me some kind of an intermediate panic low for the stock market).

“Moreover, the US stock market reached strong support around the March 2007 low of 1,363 for the S&P500, which ended the sharp February 25-March 13 correction.”

On August 17, adds Faber, “the S&P500 soared 34 points and the Dow Jones 233 points, as the Fed cut the discount rate. However, new 52-week highs expanded to only 55 and were outpaced by 149 new lows, which is unusual during such a powerful upward move.”

Faber is also “not surprised”, he says, by the strong rally from the August 16 intraday low, “because investors are still conditioned to buy the dips and not to sell into strength”. The fear of ‘missing the next advance’ is negative for the market, from what Faber calls his “contrarian point of view”.

jmf-totally agree the "fear of missing the next advance" is a negative for the market, but a positive in the ST...in fact, right now there is rampant skepticism about a return to the highs, which is what you want to see...which then allows you to sell into the fear of being left out...

Speaking of Japanese automakers & opportunities, which way do the technical indicators point for NSANY? Any comments on this one?

Market doesn't seem to be much in the mood to rally. I think traders are far more weary than a lot of people are talking about. Everyone is wanting to see what everyone else does.

We've got some key metrics coming in later in the week. Durable goods orders, new home sales, jobless claims... with all this liquidity, I wonder if they'll even matter, or if there's supposed to be a knee-jerk positive reaction!

Hi Bill,

just wondering, if you had a chance, if you would give your views on the North American Union meeting being held in Quebec this week (next week?).
many are saying that the dollar's collapse will be a catalyst for the US to gain public support for a new currency. Does this mean Canada's position in the world is really no better than the U.S.'s? No offence to American readers.

Some good comments today and over the weekend. It is clear that a few of the commenters have thought about what is going on and aren't satisfied by facile explanations. Good for you.

I am not able to monitor the markets much this week so I'd be loathe to share with you dteails about what I am thinking here.But I will say that there are no strong underpinnnings to this rally yet and so my purchases have been strategic and ST.

Good luck and good trading.

In short Mr. Mark, we are up to our asses in liquidity but adrenaline is still coursing through our veins. No eating, just nibbling. A bit more on PM's, likely in reaction to present and future liquidity injections. We do think about tomorrows feed.

I'm a follower here. That's what I'm thinking.

Let the big bulls break trail.

BTW, this may be the healthiest way to proceed. A big rush would really be unsettling and possibly introduce more volatility and fear.

I like Bill's musings over the weekend as they were well thought out, clear and conscise as to where he stands in the sort term (bullish 30 to 90 days) and modestly bearish (90 days out +). Hopefully I have this right.

My quetion to the group is what is the risk to Bill's thinking short term if the markets don't rally here. Here's my list of "my" possible risks to a short term rally. Just thinking out loud here.

1.) All the known's are not known yet therefore markets cannot resume upward bias until the mass feels confident we get all of the news out.

2.) Market psychology for the first time in a long time has shifted. Tepid at best?

3.) The market as a discounting mechanism could already be discounting 6 months out and providing us for what will happen to earnings or possibly the Xmas season?

4.) The fear that the fed knows more than they have let on or a potential rate cut isn't bullish for stock prices as it might be if you are in the middle to end of a recession rather than the beginning of one?

5.) technically the market still looks to be distrubuting as new lows still outpacing new highs decidedly. Trend appears to be lower highs and lower lows.

Anything to add here?

“Mining and exploration stocks are gambling
and one must be prepared to lose part or all of
their capital.”
Peter Grandich

He is actually positive on PM stocks.
http://www.grandich.com/docs/alert_08-16-07.pdf

Wondering if Noodle is out there today and has any comments on how the bond markets are now functioning?

Bill,

Thank you for a very lucid explanation of what currently seems to be a crucial transition period. In times like these a good picture is worth far more than 1k words!

UNG-adding at 40.04...perceptions in the NG market have got be more bipolar than any other i've traded...but that's where the oppty lies..

Does anyone follow citibank's chief analyst tobias levkowich? The fellow loves his proprietary charts and data collection. I get his weekly reports because I have an account, but try not to give to much attention to him. He remains bullish. Sell side guy, but I hear he is earnest in his views. Excerpts below.

Risk Tolerance Never Got Excessive in the Stock Market – While credit markets
have gone through a severe shakeout and risk aversion has returned in a major
way, driving the Fed to provide more liquidity, the equity market never enjoyed a
return to “irrational exuberance.”
Equity Risk Premiums Have Increased – Our estimate of the equity risk premium
has shown a pickup to near 3.2% and is now off of slightly below average levels a
few months ago. Nonetheless, risk premiums have stayed elevated since the tech
bubble burst, and there was never a decline in the risk premium to the excesses of
the late 1990s.

Bill,

Can you give us an update on the advisory component of your plans? In light of the connectivity issues is now still a bad time to directly contact you? Thanks.

jasper-

If the excesses of the late 1990s market is his standard, no wonder he is bullish. The utter stupidity of his remark brands him completely as a sell-side WHORE. Run, not walk, away. As always, JMHO.

The Fed may want to purge some of the speculative excesses out of the system, but they will not stand for asset price deflation over any lengthy period of time.

Bernanke has both the Great Depression and Japan as two periods of deep study. I read his book "Inflation Targeting" and it seems like his main method is subterfuge. He did not advocate for fixed money supply growth targets because they do not allow enough flexibility.

Instead he appears to be a big fan of doing whatever is necessary behind the scenes to keep the economy going and credit expanding while in public the goal is to present a picture of calm and control - the key word of the day is keeping "inflation expectations well contained." This sounds like a bunch of BS to me, making the Fed Governor position more of a politician type GURU than an impartial third party that is supposed to be lender of last resort.

Anyways, bottom line is that I agree with Bill, that the Fed will commit to propping up asset prices here. If that initial Discount Cut was not enough then they will ease aggressively for the rest of the year.

The main lesson that Bernanke and Krugman learned from the Great Depression and Japan is that if deflation occurs the interest rate needs to be cut so far that the government drops dollars out of thin air so that REAL interest rates go negative and encourage spending and borrowing. Both the Great Depression and Japan scenarios are examples of asset price deflation and debt liquidation cycle.

The current economic outlook is remarkably similar. I expect Bernanke to act sooner rather than later as the longer that you wait the more difficult it is to stabilize the asset prices.

Japan Real Estate - 1990 to 2002 - Down 80%
Nikkei (Japan Stock Market) 1989-2002 - 39K to 8K - Down 80%.

The Fed will not allow 80% asset price deflation in USA - we will have Weimar Republic wheelbarrow money before that happens.

We live in exciting times.

GDX lifting. UNG not...yet.

gold stocks and the price of a oz. of gold-----prior to 2008?? whats the opinion of $1,000.00 per oz. and how will this affect the prices of gold stocks?? if this happens. have a pleasant tradin day.

2nd,
With so much excess invetory in NG, the only real hope for the NG Bull was Dean.
Now you need another hurricane to push NG higher, according to Tim Evans, Engery Analyst on Bloomberg Radio.

UNG -- Maybe now?

Aside from the gold markets, its getting kind of obvious that liquidity injections have mostly benefitted Asian markets.

Anyone have an opinion on the 13 week treasury Bill? My goodness what's this all about.

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

NOAA is predicting a very high likelihood (85% chance) of an above-normal 2007 Atlantic hurricane season, a 10% chance of a near-normal season, and only a 5% chance of a below-normal season, according to a consensus of scientists at the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center, National Hurricane Center, Hurricane Research Division, and Hydrometeorological Prediction Center.

The outlook calls for an even higher probability of an above-normal season than was predicted in May (75%), and reiterates the expectation for a sharp increase in activity from the near-normal season observed last year. The 2007 season is expected to become the tenth above-normal season since the current active hurricane era began twelve years ago (in 1995).

The 2007 outlook calls for a likely range of 13-16 named storms, 7-9 hurricanes, and 3-5 major hurricanes.

http://tinyurl.com/m4mkq

3-month T-Bill yields have plunged 100 basis points today. 100 basis points in one day! Something scary is out there. Deutche Bank using the discount window is frightening too.

UNG -- Ok, I'm done nibbling until UNG clears it's 3-min EMA(12), currently @ 38.94.

UNG- OG, you have a better basis than i do...at this point, you're about where leisa first took her position (not sure if she closed out earlier today or not)...

moab,

Isn't this just people switching out of whatever looks or smells like a money market and into T-Bills?

2nd -- Basis would be better if I had waited at least for PSAR to go positive....which it just did.

Jasper -

His advocating for stock exposure on the basis of equity risk premium (a field of controversial academic research & numerous conundrums/aberrations) strikes me as a refuge into abstruse approaches when market/economic conditions have made all other, accessible justifications murky at best. Without knowledge of his complete work, I am sure that one could question the generally accepted use of U.S. T-notes/bonds as risk-free investment pricing benchmarks (truly risk free? mispricing conundrum?). In addition, equity risk premium should (yet classical theory says, it shouldn't) adjust to degrees of leverage in financial system and the existence of glaring mispricing of risk for instruments senior to equity. And maybe, just maybe, risk aversion may be the rational stance an objective investor should adopt in the current environment.

JML

FWIW Chrystallex (KRY) issued this press release today.
http://tinyurl.com/28pxxj

It looks like panic - the biggest one day drop in 20 years. Bob Hoye has said that the bigger the decline in the 3 month T-Bill rate the worse the bear market in stocks will be. I don't know if that is true but he has much more experience that I do.

The yield is recovering now.

One reason for a rally: Oil below 70.

Soulek1,

Marc Faber in a recent interview in Vancouver, BC (if I can, I will try to find the url--it was mentioned by someone at this site the other day--Bloomberg TV I think was where it was) thought that maybe the DOW would only be likely to go down maybe 30% because of these new Sovereign Investment entities that would move in and pick up US assets as a way of using their dollar reserves. So maybe that's one reason we wouldn't see an 80% decline here.

Soulek1 -

In a deflation environment, I think that Japan showed that interest rate cutting is an ineffective instrument of monetary policy. Problem #2: would reflation work if nobody wants to borrow or just be an hyperinflation trap?

JML

UNG -- Ok, we've now made a double bottom @ 38.50 and have since touched 3-min EMA(12) @ 38.74. 3-min RSI(14) is climbing and 3-min MACD(24,48,9) is about to cross to the upside. I may nibble a bit more, with close stop @ 38.49 or so to limit risk that slide is not over.

all the pessimism in the headlines right now-great! ready for a drop, but also ready for a great close...

moab - where did you get your info on Deutche Bank using the discount window? Do you have a link?

Expected yield on the 4-wk T=1.960% last week at this time it was=4.620%

Why would anybody buy this, unless ....

Deutche Bank at fed window: http://tinyurl.com/28al3a

They wanted to show 'support for the fed'!

NBR/PWE-seeing enough buying interest to re-establish half positions here (29/28.80)...

I just got long some KRY as a position trade.

The National in Canada announced today that it is bailing out its holders of ABCP in its money markets. The reason: because the "alternative was worse".

This only accounts for $2B of the $33B in ABCPs in Canada.

Please read "National Bank" above.

Kuddos to ECU for keeping investors in the loop. I wonder, did Kaimu get on the horn with these folks? :)

http://tinyurl.com/2cm4gu

ALOHA !!

ECU SILVER UPDATE

This is what I'm talking about!!! This is why I own this stock! No exposure at all to the prevailing "risk" that other major producers and other juniors have mistakenly put onto their books! In a rising gold enviroment such mistakes can quickly turn into a very heavy anchor on performance and true value ...

READ ON:
August 20, 2007
ECU CASH INVESTMENTS HAVE NO DIRECT EXPOSURE TO RECENT CREDIT CRISIS

The current global credit crisis has many investors concerned about the short term investments of cash resources by public companies and in particular, the liquidity of these short-term investments. ECU Silver Mining Inc. ("ECU") is pleased to report that its positive working capital and excess cash have been invested in short-term certificates with National Bank Financial in Canada and Scotiabank Inverlat in Mexico. The total amount of these invested funds are immediately redeemable at any time.

ECU HAS NO EXPOSURE TO JOINT VENTURE RELATED NONRECOURSE LOANS

Certain articles have been written regarding companies with exposure to joint-venture related non-recourse loans. ECU reports that it has no major company joint ventures and as such has no non-recourse loans with a major company on any of ECU's mineral exploration properties. In addition, ECU has no hedging contracts and/or derivative contracts in place. ECU has a joint venture agreement with Golden Tag Resources Ltd. ("Golden Tag"), a junior exploration company, on the San Diego property. There are no nonrecourse loans between ECU and Golden Tag. ECU maintains only one debt facility for US$12 million which has standard debt covenants and no direct hedging or derivative exposure. The loan facility is with IIG Capital of New York.

Link: http://tinyurl.com/2ssu9l

That seems like good news indeed, but please note that the PR says no "direct" exposure". It also says they invested with National Bank, which had lots of exposure, but it is bailing them out. There is not enough information to really know in that PR, but in the worse case they would be bailed out. Tha National Bank announcement seems like a much better deal for the investors than the other one announced last week by a groups of Banks re. Coventree, which seems to greatly benefit the group of banks.

BTW, on Friday I requested from all the miners I own shares of that they clarify their exposure, many discussed here. None has responded, aside from that ECU PR.

The issue is really with the management of these miners, whether they made these high risk investments or not.

Need a bit of help. Are Krugerrands good enough or should I look for something fancier / pure ?

Re NBR-

Midnight Trader
06:36 a.m. 08/20/2007

Boston, Aug 20, 2007 (MidnightTrader via COMTEX) -- Nabors (NBR) ultimately could hit 50 and a big wild card for the stock is the possibility that it eventually will be an acquisition target, according to Barron's.

NBR has a strong balance sheet, solid profits and one of the lowest price/earnings ratios among non-financial companies in the Standard & Poor's 500 index, it says.

NBR is trading at about 8 times 2007's estimated profits of $3.45 per share, and 7 times next year's projected $4.01, the story says.

Before the credit market imploded, NBR was seen as a potential leveraged-buyout candidate, Barron's notes. Still, it might eventually attract an industry buyer or even General Electric (GE), which has a growing presence in energy. Nabors is valued at less than six times projected 2007 pre-tax cash flow, an attractive multiple, it says.

Hugh Cleland just published his Innovation fund's monthly letter. He has some good points about WGDFF.

So for those who are not hyping just 2 hour moves or fast moving trains hopping on and off with and without boarding passes give this some thought.

>

http://www.northernriversfunds.com/a...uly%202007.pdf

Disclosure I was way long WGDFF before I discovered Bill's website but his opinion regarding WGDFF does give me comfort on darker days. :-))

The comments did not paste but the above link should work:
Western Goldfields: Actually, this one has held up better than most. From a June low of about $2.08, it hit a July high of about $3.10. It was quite a rude shock, however, when I saw a number of market-sell orders (probably margin calls) take it down to $1.75 within 20 minutes of the open on Thursday, August 16, 2007. (August 16th has been the bottom to date.) It closed Friday (the next day) at $2.44. Six features of Western Goldfields continue to make it a core position:
1) World-class management, starting with Randall Oliphant, former CEO of Barrick Gold. Randall convinced a top-notch mine-development team to join him from Barrick, including President Ray Threlkeld.
2) World-class resource: The NI43-101 resource now stands at close to 4 million of proven and probable gold ounces.
3) Location: continental USA means no political risk, and its fully permitted.
4) The company is fully financed to production, including all necessary debt and equity. (i.e., the only way to acquire shares now is in the open market.)
5) Management is exceeding expectations, having recently announced that the mine will be going into production in January 2008, 3-4 months ahead of the previous guidance. (That almost never happens in the mining industry…)
6) Valuation: with the mine going into production in January, Western Goldfields is in the process of being re-rated from a pre-production multiple of ½ times NAV to the 1 to 1.5x NAV multiple that a producer gets. Bottom-line: with an NAV in the $4-$5 range (depending on the assumptions you want to use), the stock should be in the $4.00 to $7.50 range by February 2008, only six months away.

Bill,

Will your services include portfolio asset management? Perhaps this is included in your reference to "trading"...just eager to know. Otherwise, I'll do my best to patiently wait for further announcements. Thanks.

Occam Razor,
Gold coins/bullion coins all sell for varying rates. If you buy Krugerrands they will generally cost a bit less than Maples or Eagles and they will sell for a little less depending on who you sell to. Many times the cost is "spot" plus a certain mark-up. I have two local coins shops I buy and sell to. One is spot plus $10 and the other is spot plus $20, but he sells me silver Eagles for the same as silver trade units so I buy Silver Eagles from him.
It pays to look around.

I have some of each, Eagles, Maples, Krugerrands, Sovereigns, etc.

I apologize to the board for my botched cut and paste job and for the fact the link to Hugh Cleland's WGDFF comments did not work. I hope this is better:
http://www.northernriversfunds.com/assets/downloads/Cleland%20-%20July%202007.pdf

Golden7, thanks for the info on WGDFF.
I bought WGDFF last thu at 1.92 and was looking to hop off tomorrow, but after reading your note I plan to stay on this train for a while.

Another point on Western Goldfields for those interested - in Q2, ABC Funds Irwin Michael who is one of Canada's best Long Term mutual funds managers with an annualized lifetime return of over 17% picked up 6,000,000 shares in Q2 at a price of $2.17 Cdn. He is a deep value investor who tries to buy stocks which are at least 50% undervalued and generally does a very good job.

Bill - this paragraph of yours got me thinking:

"I believe that last month, some financial institutions broke the credit ring amongst themselves because they either failed as an enterprise or because other financial institutions held back on payments. When the whole thing plays out to where we get full transparency, I think that our earlier concerns about the credit swap market will prove well founded."
_____________________________________

There's no way that "we the people" can know what takes the markets to their tipping points until well afterwards.

I've been reading the FT for a year, which does as good a job reporting as can be done. They sketch out the big trends and issues, but don't pick up defining events till afterwards.

The information is simply not available: how much gold the CB's sell; whether one player withholds loan payments from another, etc.

The best we can do is develop our intuition based upon discourse, and then watch the charts - being ready to change course immediately when facts change.

I wish there were easy affordable access to charts on those new default insurance indices, and the other numbers that HB&B either generates or knows to watch ...

Another Mortgage Company bites the dust. Talk about value destruction - a $6 billion acquisition shut down in a year!

http://online.wsj.com/article/SB118764159728403271.html?mod=hps_us_whats_news

Capital One Shuts Down
GreenPoint Mortgage Unit
Plans to Close 31 Locations
And Eliminate 1,900 Jobs
By VALERIE BAUERLEIN
August 20, 2007 4:42 p.m.

Capital One Financial Corp. plans to shut down its struggling GreenPoint mortgage unit, becoming the latest casualty in the mortgage meltdown.

Capital One bought GreenPoint in last year's $13.2 billion purchase of North Fork Bancorp, of Melville, N.Y. North Fork had earlier paid $6.3 billion for GreenPoint Financial Corp., then a large N.Y. savings-and-loan specializing in mortgages.

I received a response from Western Goldfields that they "have no exposure to asset-backed securities" and that "all our funds are with the Bank of America".

UNG--I added to my position. I have an original basis of 38.42 or so. I sold one tranche at 45 in another account. I think that this will go back up. I read elsewhere that there was a hedge fund that might have blown up and had to sell.Hard to give credence to some of the rumors that abound./ I got hurt in Fidelity's NG gas mutual fund around the Amaranth time. I bought at the top and sold at the bottom. Momma Mia!

I really enjoyed the conversation over the weekend -- catastrophe theory, phase-locking, dog training... even a thoughtful rebuttal to my rant on the Fed. (it was rhetoric, Fran!)

I'd love to hear more from Craig and Dab about herding behavior as it applies to dogs and perhaps us humans. For those who may not have (ahem) herd of it, there's a fascinating book called _Extraordinary Popular Delusions and the Madness of Crowds_ http://tinyurl.com/2fc9oo
which is required reading for anyone interested in bubbles, financial or not.

I'm taking a break this week and only glanced at my charts after the close. Like MarkM, I can only say the charts are in a sorry state of affairs and the lack of follow through on Thursday and Friday's action doesn't look good to me in the short-term. As in tomorrow.

Last week, maybe friday or saturday, I think someone posted a link to an empirical research paper on CDO's/Hedgefunds. Can't find it anywhere.

Help anyone...

Hallvardo--I spent the better part of March and April studying (in an amateur way) hedge funds/systemic risk as well as the CDO's and reading 10-k's of the mortgage insurers and insurance companies. Admittedly, it made my head hurt.

Here's the first item-- You can click on the label and find the other two installments. http://theperplexedinvestor.blogspot.com/2007/04/hedge-funds-and-systemic-risk.html

I hope it doesn't bore you to death! And it is essentially a summary of a terrific paper. Systemic Risk and Hedge Funds
Nicholas Chany, Mila Getmanskyz,
Shane M. Haasx, and Andrew W. Loyy
This Draft: August 1, 2005

I closed my last installment post with this paragraph: "Thank you for reading this and your comments (both public and private) on the material. Because I wrote (regurgitated) this information, it forced me to wrestle with concepts that were both foreign and complex. Nevertheless, I understand the risk--so if we ever have a meltdown, you can say, "Yes, I've read about those auto-correlations and this event is not a surprise to me.""

Not to sound proud (but I'd be lying if I didn't say that I wasn't a wee bit proud), this was not a topic that had any air time. It should also encourage any of you to do (should you have time) some digging around on your own. The Federal Reserve sites have great papers--in fact, I think that is where I found the one that I read and referenced extensively.

Posted by: Leisa [TypeKey Profile Page] at August 19, 2007 2:20 AM

thanks 2_nd

I was actally just reading Leisha's work on the topic (and your comments), which made me realize that's where I found the paper. Could be an interesting topic for my financial strategy class this semester...

Leisa may not want to toot her own horn, but her excellently summarized abstraction, in 3 parts, is worth a read.

Part 1 http://tinyurl.com/2fn4ph
part 2 http://tinyurl.com/2hfghj
Part 3 http://tinyurl.com/2eqvtg

thanks omphalos. I just finished part 3. Now on to the reference paper, which I began on saturday

ALOHA !!

A new record low for Goldman Suchs short positions on the TOCOM! Now down to 15,536 as they covered 3,885 short contracts on the Aug 20th TOCOM session!! WOW ... thats a lot!!! They also added 140 long contracts bringing the total to 510. Remember this is the first time Goldman has had any longs in gold on the TOCOM! If only they would let us know what they are doing on the COMEX and LME ...

Maybe they're using that $3bil bailout from last week to cover TOCOM shorts! HA !! Perhaps this is a sucker play ... perhaps not??? I cannot help but think they have been keeping gold short contracts on the low side of accumulation this year. One thing is for sure they know what is up ... they just don't want us little guys to know!

I'm seeing people say that some treasury only money market funds are restricting have been restricting purchases now. So I renew my question, what do you think is the most financially solid treasury only money market fund? I'm personally with Vanguard.