Lehman Bros. (LEH) reported earnings of $1.54 per share this morning, down from $1.57 last year. This "beat" analysts estimates of about $1.48. Ah, but if you follow such things you'll also see those estimates were steadily walked down over the past month. 30 days ago, the estimate was $1.77.

http://tinyurl.com/23c76x

PPI just released Bill. Top line lower, core higher:

http://tinyurl.com/2ymjms

MarketWatch billing it as "Plunging". Get ready to rock, people.

Our morning comments:
1) Our FedCall for today's FOMC meeting has been posted on our website at:

http://www.2globalmarkets.com/2GMPages/FedCall.htm

2) Greenspan in his new book comments that the Fed had to keep rates "modestly low" after the year 2000. This is disingenuous at best. Greenspan reduced rates to 40-year lows and real rates went negative for months on end...to bring the fed funds rate down to 1% and call that "modestly low" is revisionist history. The "modestly low" rates created the conditions necessary to generate the housing bubble. Fed Chairman Bernanke is now trying to manage the bursting of that bubble because rates finally normalized.

3) If the markets trade down quickly in the next week or so to re-test the mid-August lows, we will post a new research report on our website:
http://www.2globalmarkets.com Stay tuned!

Hulbert's contrarian gold-timing sentiment indicator is bullish:

http://tinyurl.com/yptxcr

it will be a very positive open...if i hadn't cleared the table last night, i'd be selling into it...

Amazing.

We get a backward-looking PPI that has its entire "good side" in food and energy (but those don't count when we do inflation numbers that are BAD, right?) and pop goes the Futures.

Lehman reports what can best be described as "mark to myth" and of course gets a pop. Nearly $2 higher premarket.

Oook. So we're going to take a run at the 1490 level on the SPX again, and likely sit near there until 2:15.

Cut? Into this? Hmmmm..... Core PPI says there's no room to do that with its Y/O/Y numbers. How do you spell "Inflation"?

Oh, watch Bucky today. He's not happy this morning, after being reasonably stable the last two. If he takes a dump on the announcement from the Fed (and he will if Bernanke doesn't show a pair of church-bells this afternoon) we're going to have a very serious problem on our hands.

Let's hope that Bernanke is something other than a front-man for "The Pigmen" lest we watch "Shock and Awe" in the form of Capital Flight - an ugly thing that, once initiated, is nearly impossible to control.

A joint panel created by the British Columbia and federal governments has ruled against the Kemess North copper-gold mine project as currently proposed by Northgate Minerals Corp. (TSX:NGX).

"In the panel's view, the economic and social benefits provided by the project, on balance, are outweighed by the risks of significant adverse environmental, social and cultural effects, some of which may not emerge until many years after mining operations cease," the panel's report says.

I was wrong on GSS, but I'm holding, 'cause I see limited downside from here. All the downside happpened while I was playing golf yesterday.

The TIC (Net Foreign purchases) fell from 120 to 19??? Could someone more savvey with this measure please comment on the implication going forward.

SEE
http://biz.yahoo.com/c/e.html

Thanks in advance!!

NFI- if there is a 90% short position, have to wonder much longer it can go down...who's left to sell...good chance it closes in the green...

GSS- shark, you're gonna have to put the whales on for this one...

2nd,
New 52 wk low for BMD on report of advance of more financing.

No worries...My position's small, the 20 day is near and ought to be supportive. I was dead wrong, probably impatient but strangely, I'm feeling kind of serene about it. There's no doubt though...that Livermore quote is right on. It's the sitting, as in, waiting for the right moment that's key.

Also, the daily gap from 9/5 should hold, $3.28

sharkie - Jesse also said "Remember that stocks are never too high for you to begin buying or too low to begin selling."

UNG dropping into the buy interest zone...down >4%...

Alex Roslin's "COTs Smile On Silver" [ http://tinyurl.com/326h2w ] gives an intriguing view into his 'commitments of traders' (COT)-based spreadsheet system of using public COT data for profitable trading decisions. Further details and explanation of his approach can be found in his blog at http://www.cotstimer.blogspot.com/

I have only just begun looking into his system, but it seems like a very promising method of gleaning the "wisdom of crowds" from publicly available information. One wonders how the predictive value of such a system would be impacted should it ever become widely used among those also generating the market activity underlying the weekly COT reports.

Econoday: Consensus expects 50 basis point cut

http://tinyurl.com/3a3hbz

Maybe it’s me, but I thought the consensus was 25 basis point cut.

Oh, I must be thinking about the Cara Community poll (administrator Si02). Could be a setup for a disappointment.

Re: TIC I would expect August to be down because things were so crazy, but today’s release is July’s report.

U.S. requires more than $2Bil a day (or $70-75Bil a month) to finance the deficit. If it doesn’t cover, Fed can raise rates or let the currency fall. Looks like the dollar will go lower.

Everbank’s Daily Pfennig has repeatedly cited the TIC importance. This morning’s edition sent before the release, mentioned the August Chinese “nuclear option” talk of selling treasuries in response to talk about protectionist measures from Congress. The Pfennig writes: “If July's balance shows further weakening, August's balance should be quite ugly.”

Today's number is stunning!

For those who follow oil,

"We are all peakists now" - Recent Schlesinger interview

http://www.davidstrahan.com/audio/schlesinger%20final.mp3

or get from
http://www.davidstrahan.com/blog/?p=42

Seamus, I'm an amateur economy-watcher - do you mean, then, that since the July TIC number is negative, then the Fed almost certainly has to maintain the current rate, and that if they do that, the dollar will fall? But if the dollar falls, doesn't that mean that foreign entities are still selling? Just trying to understand the "interesting times" we are living in.

NFI down over 11% at $7.28. 50 day MA at $12.75. Maybe it is worth looking at as a long play. Caveat: A little knowledge is a dangerous thing. And, that's what I have :-)

Bill, nice pictures of you & your wife. She looks like a very nice lady. Beautiful shots of the resort also.

Lower USD happens because of supply.
If selling by foreign holders increases supply then USD goes down, hence China's "nuclear option" to sell USD if we impose tariffs which would annihilate the USD and the economy.

The main source of supply however is our constant borrowing and printing. See M3 supply #'s. If Ben cuts he is increasing supply and the USD will go down while gold moves inversely.

I wonder if the central banks are selling tons of gold right now before the fed cut rate. Gold and godl shares have turned slighty negative. It looks like a nice buying oppurtunity to me.
When investor see there is little value to the dollar I would imagine they will move out of treasury and into gold. Any opinions?
Have a good day, and hang tight to gold. JMHO

RE: Northgate's unfavorable ruling

This probably doesn't bode well for copper miner TGB, who is expecting very soon (later this month?) a ruling on its large Prosperity project.

Same location, same native tribes, same issues....

Craig, thanks, yes, I got that much. But something about Seamus' either/or statement made me wonder if I was missing something else.

writersblock I’m not an professional economist either. The number wasn’t negative, it was $19.2B. Previous was $120.9B. I’m not sure, but I think the consensus was around $60B. Maybe it’s an anomaly. Maybe there will be a revision in the future. Maybe not! It is what it is for now.

As stated many times over the last year by those observing the handwriting on the wall, the Fed is between a rock and hard place. Higher rates attract foreign investment. With lower rates, foreign investors look elsewhere. U.S. Treasuries are perceived as safe so that plays into the equation with other more risky investments.

China, among others, has a vested interest in providing some support to the U.S. at this time in their history because they produce and sell so much to the U.S. They don’t want to shoot the golden goose that has provided oomph to their economy. On the other hand, as Bill states, how many wooden nickels can they take? The haunting statement is “at this time in their history,” because some future day it may not be necessary and important to them. (Good luck to all our children).

My 2 cents, the TIC (especially if repeated in August) will be a driver to weaken the dollar unless rates are raised. I don’t see that coming at this time with all the other problems out there and today’s anticipated cut. Think the market has already priced in the cut, so wording in their statement about future cuts or inflation concerns will be important.

That said, GS “tell” went down at the open only to turn around and is now up 5 points (2.7%). Looks like there was a move to drive out some GLD and PMs holders early (KGC), but recovering now. Could be a roller coaster day as someone said.

I guess I shouldn't worry about dumping BMD just yet?

Maybe I will start adding...

Bill - I'm good with a tip jar. I checked out a few subscription sites recently and think that your data and advice together with the great community commentary is worth more than all of them I looked at. Maybe a PBS approach keeps it conflict free. Let me know how.

With yesterday's unfortunate delay long forgotten, bulls are showing their hand a bit earlier than I would have tought. As we are kissing the underbelly of the all-important 1,490/5 resistance (and the chatter over inverted head-and-shoulder), are we set up for a repeat of Jan. 2007 resistance hopping on the back of the Fed announcement (in the fog of hype - actually, it was a minute early through the futures if my memory hasn't faltered since)?

JML

Hi guys, I took a small position this morning in gs at 188.90. My plan was/is to get in after lehman reports but before the fed meeting. If the feds cut half a point or more( which I doubt) financials will go up. If the fed cuts only a quarter point or less in the fed fund rate along with change in the discount rate, then they will need stronger than expected numbers from the likes of gs, ms, and as we saw this morning leh. My question is on exit strategy, my thoughts are to close out by the end of the day on friday. Not sure I want to be long over the weekend with all the market, social/political risks. Hopefully a small short term gain will be a baby step in getting my portfolio turned around.

Will be shorting HOV very soon waiting for it to rise a little higher...anyone else have this on their radar? I have many reasons to short this stock (as I did for AHM). This company stinks to high heaven, starting w/the CEO Ara Hovnanian. He was just interview on CNBC on 9/14/2007 (already a bad sign!) This man has ZERO creditability in my book.

Green Arrow -

You are confused with your own plan: get out before Fed announcement in about 2 hrs. or by Friday close. Choose one and set your objectives & (possible) stops accordingly.

JML

I would expect interest sensitive equities like HOV to get a bit of a lift from a rate cut.

Finanacials should as well.

If I were going to short it I would wait until the fed shows their hand and we see if it pops.

I think people would be disappointed by the .25 rate cut market will sell of after the announcement.

aces - I agree w/ Craig, but then I'm long at the moment and biased. Looking to unload my shares on the anticipated (but not guaranteed) Fed pop.

??? Can someone please explain this to me. Duvernay (DDV) says they're issuing a bought deal for a million shares at $43.10 per share. Duvernay is a favourite midcap Canadian play on natural gas. The shares are currently trading at $34.00 and their 52 week high is $42.40.

http://tinyurl.com/ytzehf

LOL! No position OG and no plan for HOV so I'm totally neutral.

Agree with the key word...anticipated. No guarantees in this life.

I am lying in wait for PM's, miners, financials.
I'm also watching retail and industrial gases.

green arrow- agree with JML...i would not try to game the fed announcement...if you're right, great, but if not, then you will take a mean hit...there should be plenty of time after the announcement to make your play (although you should be planning it out now)...

Ink Research reports Pinetree Capital insider selling, yet price has risen over 50% from recent lows??
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ca%3Apnp&sid=0&o_symb=ca%3Apnp

Bill -

Am I in a good MOODY! - I decided to short MCO Sept 45 puts on 8/21 when you mentioned that MCO was crossing above 30 RSI7! WooHoo!

JML, I didn't meant to write an either or situation. I think gs is going up regardless of what the fed does. If they cut more than a quarter point, then gs goes up huge. If no rate cut or a small rate cut coupled with some other moves by the fed, then the fed will need companies like gs to report stronger than expected numbers which will be good for gs stock price. I don't see a downside to gs stock this wk, but will have a tight stop in case I am wrong. As long as Paulson is treasury secretary, gs numbers will be positive. And my decisions were also based on following positive rsi and macd movements.

A .50 pt cut could turn against you GA.

The mkt could read that as a panic move and react counter to your expectation.

I'm with 2nd, I hold very small positions and will wait until after the moves and counter moves to come after the announcement.

I don't know why why I am compelled to catalogue my own stupidity again - sharing a learning experience I guess. I was into MCO yesterday at $43.24. When the RSI on my E*Trade screen went over 80 I sold near $46. This thing is now at $47 - I guess my mistake was not waiting for the RSI to drop BELOW 80? I think this is a good candidate for longer term hold, I just expected this movement was short term and I could buy back in later - time will tell

one add'l point- often a sharp reversal to the initial reaction, followed by another reversal, so either be prepared to play the whipsaw or hold your position against it if you feel strongly about it...

2nd and NT

NFI is moving up - any insights?

Fred, re: DDV
I believe they are flow through shares so the tax benefits are greater for the purchaser, therefore the higher price.

Regarding PPI: If folks have lots of inventory (read: drop prices to move)or if their price elasticity is getting some dry rot (read: they've already pushed as much through to customers as they can), then this number is not surprising to me.

bobj,
Thanks, the DDV issue is flow through shares.

My broker says it's a 0.5% cut!

Wow, miners rocketing on 50 bps rate cut.

Looks like the Fed gave into the double barrel shotgun.

I said it would happen. The U.S. has to much debt not to give into the Financial community.

This really should not have been to much of a surprise.

If the debt in the States was not as high as it is, then we would have seen a different result.

... The U.S. cannot afford a U.S. economic slowdown/recession

The Dow and Nasdaq are rockin' at the dance. My PMS are wallflowers though.

This is so much fun. My IWM calls were automatically sold at the extreme high price I had set this AM, now I bought October puts and still still holding the September puts. So, now waiting for the down leg of the roller coaster now, hoping we get one.

saxman- re NFI, my only take right now is i wouldn't want to be short...but i see better plays out there right now...

Bill, would you have any comments on how high do you expect the XAU to go on this leg?

UNG- almost back to even...
GSS- the blue one with the whales is working...
HOV- wish i had those october calls now...

jsaxman, I don't have any comments beyond what I posted earlier re NFI. 2nd might have more insight on this stock.

I'm hoping to see the junior gold stocks move up with this .50 bps rate cut!

Hello out there,

Anyone, I have ABX & RGLD. Will they hold and move higher or what ??? I've not seen this before so could use guidance.

Thanks much.

Looks like GFI is going for the Google moon landing prize.

http://news.bbc.co.uk/2/hi/technology/6993373.stm

So why isn't BMD repeating the favour?

Something tells me I should be buying more....

lot of bids out there...makes you wonder how many people shorted the spike this morning and now caught leaning the wrong way...

OG- are you the one with the HOV Oct calls...what a squeeze...

Peter:

Bingo!!!!!!!!!! Tell us more now that you've called this one right on the nose. Are you still sticking to what you said several weeks ago? and I copied every word ;)

Alright BOS, do we sell into this and reload on fed meddling with POG or hold?

going long MU/AMD...

I'm making a fortune, just by using cash talk as a contrarian indicator. JUST KIDDING> The winners, at this moment, are the buy and holders,the positions with normal mental stops, those that trade less, and those that stick to a moderate time horizon. I have a subscription service and the guys that run it think they were geniuses being in cash, gradually buying up to 25% exposure. They truly thought that they could take more positions on a breakout. At the moment, no way to risk a late entry. I agree. They exclaim huge winners in a "few" of their positions. Nice, but I can't get too excited. It's the total portfolio that counts. I'm amazed the way so many keep score. The fellows above keep score by wins vs losses; they decline to use a portfolio. Bottom line. Portfolio management, not picks alone, is what accumulates wealth. I'm ok with my exposure but my quest is for something more routine and less plaqued by second guessing. Did anyone really expect the depth and intensity of this rally? The market, as they say, likes to disappoint the most, most of the time. Well, who knows the twists and turns ahead.

aces - You can go ahead and short HOV now (if you dare); I've closed my long position.

I left lots on the table the last couple of days, but it still feels like Somewhere over the Rainbow. I am whistling off to work and later to band practice better off financially and spiritually thanks to this community. Good luck the rest of the day.

PS - 6.6% in and out on NFI today too! thanks for the hints.

craig-i'm just not a big believer in this market right now...so not buying much...playing tech for a trade and that's about it...if you think about it, the 0.50 cut on both rates says a lot about how bad things are...

Euro well over 139 on the way to 1.40.

Canadian dollar over .98 on the way to par.

Brazil (EWZ) on fire!

Glad I held those miners all this time.

Euro well over 1.39 on the way to 1.40.

Canadian dollar over .98 on the way to par.

Brazil (EWZ) on fire!

Glad I held those miners all this time.

Now I understand: moral hazard is a rational behavior that dissipates with increasing net worth (and disappears when one reaches the inner circle). I am back on the DJI 1K down day watch after this Fed action and the market reaction. The economic situation from the central bankers with the most inside information is precarious enough to justify massive reflation (and surprising a bit the market). I guess that I should espouse the permabull stance: earnings outlook remain great and we need a cut. Something doesn't jive for me here.

JML

Just checking bid ask spreads on some etfs: HUGE. All part of the risk in buying on such extreme strength.

was wondering how/when we would get around to having enough bullish sentiment to take the market down...this is a good start...

Seamus,
What kept you a holder? For how much longer?
Personally, I kept about 64%. Congrats. What huge green numbers out there. Bill has been giving pretty accurate guidance here.

Call it what it is, theft from Main Street to Wall Street.

2nd,

I would post the link but i get blocked out.
Put $gdm over gld at stockcharts. More to overshoot, I think...Prior, I just didn't want to add more this late in the game.

A lot of hope out there...another way that has made sense to me, fwiw to measure hope-despair is the 21ema of $cpc...compare it to bottoms of spx.

C.Note

Onward and upward. Follow my previous statements... Will we see more troubles in the future? Yes. But will the market go forward? Yes.

Once the U.S. pulls troops out of the Iraq the Fed will be in a little better position to play hardball with the Financial Markets.

I don't believe we will see a pullback in the last quarter of this year of any relevence although the creditcrunch will have some affect on the last quarter earnings of some companies.

I think a lot of people here are afraid because of what Bill might be saying; as it appears he was expecting a pullback in October (although I think he is now revaluating that hypothesis after the rate cut).

I would be looking for the next pullback in the market probably in-and-around Feb-April time-frame of about 3-4% of the highs at that time.

Obviously there are possible things, that could come out of left field, that could throw the market for a loop and not be predicted. So this scenario is barring any significant event.

jasper- you kept 64%? ;)

peter- congrats on your call...i was a little skeptical on the odds for a rate cut, and still am skeptical of the market, but skepticism is what feeds the bull...

jasper--you kept 64% of your portfolio in PMs?

Answer to your question, the trendlines for the USD and Bill's sage advice in his daily postings.

Certainly didn't expect the 50 basis points, but we'll pay for this w/inflation (other than real estate). Dr. Sen (Ron) has it correct.
To use Leisa's dictionary--I smell peculation.

Would anyone care to speculate on how today's move will impact the price of Japanese financials in the short-term? I've been looking for the right opportunity to take half positions in Misubishi UFJ (MTU) and Mizuho (MFG) as long-term holdings. Thanks.

ALOHA !!

While the BIG NEWS is the FED plays their games and makes everyone think the FED is in control of rates the US Dollar gets hit and POG goes up, although not in a monumental way! Laddidah!

All that aside for now something happened to me yesterday that I can only file under "DISGUSTED" !! What happened yesterday underscores the entire long standing failure of the US government and its "many" policies.

Yesterday I was spraying my orchids as I always do and when I finished I walked over to the house and my wife was crying. As I was about to ask her "Why?" I heard a blood curtling animal howl that I knew only too well was one of our wild pigs. She then said, "He is killing one of our pigs!" Well, with the pig squealing noise and my wife's tears I grabbed my Glock 40 put it in my shorts and proceeded to hike through the jungle to our nearest neighbor's house. I was at their fence and I heard music playing from inside so someone was home, so I yelled out ... "HEY!" Well, the next thing heard was more pig screams so I pulled out my pistol and fired off a shot in the air trying to get someone's attention. That did not work ... So, I jumped the fence and made my way slowly around their yard to see what was going on. Now, you have to understand I know this neighbor and I never trespass on anyones territory much less blast off a gun, but the situation called for some drastic action. I packed my Glock because I was going to shoot a pig. I had had it with the pig torture and my wife's tears! I figured my neighbor was not all there and was botching the pig slaughter so I thought I'd end it all this mayhem with a single shot to the pig's head! Why should we all suffer, especially the pig? That was my mentality at the time ... seemed rational to me. What I am not letting you know is that my neighbor is a Hawaiian and Vietnam vet in his 60s and a total drunk and not all there. We have a few Vietnam vets living out in the jungles here that are not all there ... They are not violent just disorderly at times. Another one I know just spends his day hitchhiking up and down highway 130. I pick him up when I see him and I have been to his house and he grows and smokes pot. It seems to be the way it is ... Back to my story ... In the back of mind I also did not know what condition this Vietnam vet was in and I know a lot of these guys have guns and knives so I "brought mine" to the party! As I round the corner of his property I see him there with a small baby pig tied with a rope by one hoof. He has an old axe handle he is hitting a small wood table next to the pig. Everytime he would hit the table the pig would squeal in agony. I thought to myself,'What a load of shit!" I walked out of the jungle waving my hands in the air yelling "Bruddah! Hey Bruddah!" When he saw me he stopped with the pounding. He was in his tiddy whitties, barefoot, belly and all, a mess and lethargic. He said "Hey ... what ya doing er?" So I replied ... "ME? What ya doin' Bruddah?" He saw my gun, which I wanted him to, and he asked "What dat for man?" I looked at my gun in my shorts, but did not pull it out for fear things might escalate and I pointed at it and replied, "Ta kill da pig man! I hear it hollering and a squealin' and my wife gets pissed off and is cryin' so here I am ... I can't take this Bruddah ... So you want me to kill dis pig?" I had absolutely no intentions of killing the pig but I saw it was okay, so I just wanted to unhook the rope so it could scamper off back into the jungle with the rest of its little family that were patiently standing nearby grunting. I then flashed on the book "Killing An Elephant" by Orwell and thought here I am with a Hawaiian and a gun and a pig and ... well it just seemed too close for comfort ... Hummmmm????? Then my neighbor said to me, "Nah ... dis pig too little to eat ..." Hawaiians for many hundred of years have been eating wild pigs which are the featured event at any Hawaiian luau. Its what they served to Capt. Cook ... So I said back to him,"Den whatya doin' this torture crap Braddah? Kill it or let it go, but don't sit der bangin' on it! ... Let it go!" He then said he was just teaching it a lesson for messing up his yard. In the back of my mind I am thinking, so you're punishing this pig for being a pig! I mean that's what pigs do ... they rutt and look for food and tromp on plants! They mess up my yard too! I replied, "I think dis pig got it Bruddah ... he learnt his lesson ... Let it go! Come on man!" He then said he was afraid the pig might bite him, so I reached down and unhooked the rope and the pig ran off grunting to his family and they all ran into the jungle! "Good on ya Bruddah!" We blabbed a bit more and then left and I hiked back through the jungle back home stumbling on wet rocks along the way. As I was going along I started thinking about what just happened and got "disgusted" ... I mean I was pissed off that my damn government that ever so eagerly rushed into Vietnam to protect us from the "Communist Menace" just as eagerly abandoned the guys that they so callously dumped there to fight "the good fight"! Then I thought of all the new vets from Iraq destined for this same fate as my Hawaiian Vietnam Vet neighbor and the other Vietnam vets in the area are suffering through. In my mind our government has no business starting another War if it does not have the common decency to clean up after the last one! The Vietnam vet that I told you about earlier that was hitchhiking as a means to live died not long ago and the family has never known why but they suspect it was due to "Vietnam Vet syndrome" where it was some or a comibination of exposures to Agent Orange and post traumatic stress or just the mind altering experience of War and coming home to despair. Me and my community deal with the Vietnam Vets and their anguish not the US government. The US government abandoned them on the first day they set foot in Vietnam. The US government has abandoned all of us!

For Christ's sake even Iraq had to expell BLACKWATER !!! Our own government didn't have the balls to!

These politicians wage War far too easily and for dubious reasons at best! We must be much more diligent and responsible for who we vote for and what they represent. In my mind neither party, Dem or Rep, represnts anything of value or morality. Like the bumper sticker says ... QUESTION AUTHORITY !! Question it every day!

fwiw,
64% of original basket of miners kept, sold the rest when beginning to get wiff of despair.

Entire portfolio: 35%cash/65%equities; up 2.1% today on entire port;up3.2%on equities.
Miners: 21% of portfolio

To get perspective, russell 3000 was up 2.98%. Didn't have to be a stock picker, today.

Kaimu - That is a HAUNTING tale, and MAJOR food for thought! It should go into your book. (I hope there's a book in the works!)

kaimu From this morning's WSJ online roundup.

Washington Post: The White House in recent days told nearly a dozen cabinet secretaries to send letters to Capitol Hill rejecting Democrats' proposed new funds for their agencies -- including increased funding for health care for veterans, education, medical research and infrastructure improvements -- escalating a confrontation between lawmakers and President Bush over domestic spending priorities.

That vet was not that wrong for tormenting that pig... I heard a story of a bear trapper tormenting a bear to make it not come back into that area... It seem to be a working method to make an animal stay away from an area.

Hmmmm...if I were a hedge fund with more redemptions in the queue...would I use this across-the-boards strength to raise funds??

It's so easy to predict up, up and away from here...but I wonder?

Glenn --

Maybe not so many redemptions if clients believe the "bernanke put" has arrived !

ALOHA !!

You guys it is not the lack of funding for the consequences of going to War it is the shear immorality of War ... the act of invading someone elses country. Using our tax dollars to bring death and mayhem to all the Iraqis and our soldiers and our allies soldiers and their families and Nations. If we were going to War to avenge 911 then we should have stopped at 2800 dead "Saudi Arabian" Muslims not 1.2mil Iraqis! Obviously 911 has nothing to do with it ... We have been invading Muslims since 1805 and the Barbary Wars. Muslims have also been invaded by a host of other European countries, the last being Russia in the 1980s. The Middle East people are just plain tired of being invaded and killed. That's all it is ... Their tired and pissed off! Quite frankly ... I am too!

Peter, interesting and insightful observation. I posted this thought elsewhere today...that is, there has been very little talk about HF's post 08/15 redemption notices. Now, if I were a desperate HF manager having to (1) meet redemptions and/or (2) retain clients, I would bet heavily (meaning leverage heavily) on this move. Why, because it is the only catalyst between now and 09/30 that a HF manager is going to have. Now, if you do not bet correctly you blow up. I wonder how many blew up today? I think that alot were leaning on the short side hence the explosiveness of the rally.

A rate cut and discount window cut MAY prove to be a stimulus to the economy, but if it is merely keeping folks afloat, which I suspect that it is, is likely to have less stimulus than the market is thinking.

We still have the opportunity for the news to be quite bad as banks report 09/30 earnings. I know that many are saying that the market goes up when the fed cuts, but this is a market with a credit crisis--a fed cut stabilizes, not revitalizes.

But I don't have any special knowledge, and all will unfold in due time. My gold stocks rocked today--I just have EGO and WGDFF, and small positions relative to my portfolio.

Re: Gammon Gold (GAM/GRS) - Love it or leave it, I imagine that we will see some news (and possible movement) regarding Gammon within a couple of days. "Gammon will host more than 45 Analysts and Institutional Shareholders at Ocampo where they will see first-hand the progress the Company has made in recent weeks. Site visits at the Ocampo Open Pit and Underground mine operation will begin September 17, 2007 and continue over a period of three days."

I think you are correct Leisa. The Fed has injected some oxygen (life support) today, but what has changed as to the state of the economy? There will still be plenty of bombs in the next days and week. I wonder how much today was due to a short squeeze, it's surprising that this move caught big fish by surprise.

Kaimu, USDX is at 79 and change, is 80 finally broken for good? You mentioned it was always heavily defended.

I mentioned DRYS, about a month ago, as a stock that could have another $25 dollar move in it... I think it is good for another $10 from here (short term) and the trend longer term is still very bullish. 6-9 months out I am thinking this is a $120-$150 stock.

Ditto to Kaimu ie: war.

People with critter issues, ie: wild critters or those you want to keep, see: www.premier1supplies.com/c/fencing/

Net fencing works great for pigs.

It's also got a pretty good div. if Im not mistaken. Another in this seg. is EGLE although it's now near it's high.

SiO2/Leisa -

After reading very insightful Phil Davis' piece this morning (The Oil Scam Driving Crude Over $80 - http://tinyurl.com/2vu3m6), I find myself wondering as to the fuel of the general market move post rate cut. Conventional wisdom (and some facet of the reality) puts the cause of such an overseized move at the feet of shorts. Yet wouldn't it also make sense that some players (in need of fast results) are engaging in a musical chair, buying frenzy where few counterparties are selling and fewer willing to short? Losers be damned, but if the mirage holds through month-end... Those buyers would be forced to play NOT because they are short, but because by not being long enough they risk not surviving. Unless I am mistaken, speculative blow-off tops do not occur with massive short covering, but when the incremental buyer (whatever his/her motivation) does not show to take the last one out. See Miami condos for a recent experience.

JML

Jumble, yes makes sense. As for Phil, he was been calling oil too high for quite a while, and it has not gone down at all. When you play options, that does not produce healthy profits. What he doesn't think about is that oil is far from a record price if you consider inflation. With the USD dropping so much, the oil producers will not accept payment in the same wooden US dollars as before. I think oil is cheap. Now if and when we have a recession, and if global consumption drops, then prices may come down. Just my uninformed opinion.

Kaimu, the Iraq War is terrible. Torturing wild baby pigs, or any animal, is terrible. All animals are mindless and innocent. They do what they do to survive. You bring home the point of helpless animals and this unjust war with its corollary of many soldiers' post war condition in a vivid way.

This is easy. Oil is priced in USD and the USD is heading for 75 cents. 3/4 of a dollar. 25% off.

So when we hand Saudis 4 shiny quarters they only get three. To get a full 4 quarters worth of buying power they need to get paid about $1.334 in USD. And it's gonna get worse.

Demand is only part of the problem.

NT Anyone who knows animals know they are not mindless.

That is an ignorant statement.

No offence, just stating a fact.

Animals are actually (for the most part) pretty smart.

Peter, mindless in the sense of being innocent.

Craig: Very good analysis on oil: I agree totally.

SiO2 -

I hold no informed opinion on oil price levels nor Phil's other activities; I am particularly enlightened by his clear description the mechanics through which market prices rise even with shrinking demand i.e. a sort of fictional (Ponzi-like) price discovery with accelerating turnover. I also find the "shorts are getting squeezed" refrain a bit simplistic and convenient on the part of CNBC cheerleaders. All in all, we had a fairly typical bull day: more liquidity for more leverage for assets that originators staunchly refuse to Mark-to-Mark.

JML

Panic buying...speculation....blow off....if so really would be time to sell strongly into profits, short, make other plans etc. What would be the typical tells on this?

We can scare ourselves into missed opportunity. As an investor my job is not to be a truth detector of the economy or our government....though, certainly this might be useful and of value to character.....but it may not help to accumulate wealth. Personally, need to grow my account so I can take less risks in the years ahead.

I guess I want to explain myself further about animals. I do think they are smart - some much smarter than others. But they are mindless(that's not an ignorant statement) and they are without guile.

And, I did take your "ignorant statement" comment with offense.

BTW, the pig may associate this treatment with a number of things unrelated to rooting in a Vet's yard. He may now fear loud slamming noises or people. It is HIGHLY unlikely this will stop a pig from instinctively rooting for food as it is 1) instinctive, and 2) it has an automatic built in reepeating positive reinforcement that will overpower one negative reinforcement.....FOOD.

They are smart, but the teacher has to set-up the lesson to achieve the desired result.

The fencing is the only thing that can compete with instinct and food reinforcement. 9 joules of capacitor discharge going to ground through a pig will do the job. It will also teach the REST OF THE PIG FAMILY our drunken Vet conveniently forgot will be leading the temporarily frightened baby one back.

I use this fence (premier) and my neighbors tell me they have seen 7 coyotes OUTSIDE the fence watching my sheep. I have never lost a sheep.

Maybe without guile, but not mindless.

I see dogs routinely out think people. I know dogs that can tell a red color factored holstein from a Guernsey which is a red breed or suffolk sheep from dorpers. I'll bet only one or two people here could do that.
All dogs know exactly how YOU feel but almost no people understand their dog. It would be pretty arrogant for humans to apply many limitations to the capacity of dogs (or most animals) as it is largely the limitations of humans that prevents THEM from knowing.

I've been saving this one from a Starbucks cup for just this occassion!

"Scientists tell us we only use 5% of our brains. But if they only used 5% of their brains to reach that conclusion, then why should we believe them?"

We do most other creatures the same disservice because of our lack of experience.

jasper- missed the entire move today..but next best scenario is to see you caught the wave...

green arrow- what did you end up doing?

HOV- unbelievable..C/W/S hung on another day (took even my LT position off at 11.50), but my bias was towards a sell-the-news reaction to any rate cut...

with the announcement out of the way, i think the contrarian play is to keep pressing the long side...i'm as skeptical as anyone about more upside, but that's why i think we'll get it...waiting for the hold-outs around the table to finally buy in after watching too many winning rolls...maybe in two months CNBC will be saying 50 basis points was the writing on the wall and how the hell did we all miss it? can't see that far down the road, but i'm conceding that jasper is holding the better hand right now...

HOV up 28%??

Bill Gross is saying the Fed will cut to 3.75%. From Bloomberg:

"To keep economic growth near 2.5 percent or 3 percent, that implies ``ultimately at least a 3.75 percent destination for fed funds,'' Gross said.

Only twice in the last 20 years has the Fed started a rate cutting cycle with a half-point reduction, Gross said. Both times, the economy fell into recession, he said.

``I'm not suggesting we do that here,'' Gross said. ``I'm suggesting the Fed has their eye on housing.'' "

Hi Bill,
I am with you on the tip jar! did you ever look at setting up an acc with Paypal, I know it would make it a lot easier for most of us.
Regards
Brian

2nd...You are a better man than I. To miss today would make this fractured tooth in my head hurt even more. Share you secret, though I suspect that it's your temperament. You are certainly one of the more given to being thoughtful of others.

Special Midweek Update:

ronsen.blogspot.com/2007/09/special-conors-midweek-update-dollars.html

Hey you guys: Two points regarding the current market conditions and the Pig.

First the market: I like charts more and more because they don't have emotions.

The current market direction from the charts standpoint clearly show an up move coming. The thing that charts don't tell you is the emotional rollercoaster people had to go through during those market moves.

Both the duration and the strength of the move where strong and long enough, to signal the downside is done for now. Take that for what its worth: We all have to make our own decisions on what way the market is going to go and pay the consiquences or reap the rewards for our decisions. As for me I am 100% long the market right now.

As for the Pig: I know a lot of people that believe animals are stupid and I feel that they are ignorant to animals; as I believe most are pretty smart.

The bear hazing I mentioned earlier was used to give the animal an experience that was undesirable with the area and seems to work in keeping the animals from returning to that area again.

Will the Pig continue to scour through peoples yards in search of food? Yes. But maybe just not in that man's yard again.

Hey Bill: I like the tip jar idea, if it is promoted maybe at the end or each page... sounds like a good idea.

No one is obligated to leave a tip, but it would be a good idea for people that feel they have benifited from your services, to be able to send you a few dollars to help keep the site going and maybe help take care of other out of pocket expences that people benifit from through your research.

A tip is not an obligation but a gratuity, so I like the idea of setting it up on a forum like this one.

ALOHA !!

Just so you guys know this is not the first time my drunken Vietnam vet has tortured the pigs and much to your surprise the same pigs are on his property as I type. They wander from one property to the next 24/7. Sometimes I don't see them for a week and some days I see them a few times ... they just wander looking for food to eat ... thats all! Its all about food! They don't care whose property they are on ... they are boundriless ... trespassing is not on their minds one bit! Put up all the KAPU signs you want ... They will come right up to you and eat right out of your hand and roll around and grunt ... they're just pigs! These are just animals of God trying to get by the best they can dodging the bullets and madness of mankind ...

Like all of us here really also ... trying to get by the best we can dodging the bullets and madness of our own damn government and the FED! Ever think about that? I mean really ... Our government has all the money in the World and can hire "experts" all day long and spend countless hours finding new ways to steal from us and make us poor. The government and the FED literally never sleep yet you and I only have a few waking hours during the day and a couple hours at night to try and decipher and understand what these madmen are doing just so we can make a vain attempt at keeping our heads above water.

Really ... isn't it totally insane? It is insanity!!! We send them our hard-earned tax money and they turn around and use it against us! The government earns no income, produces nothing and without our generosity as taxpayers they could not afford a military or a Plung Protection Team or even a US Federal Reserve Bank much less a printing press. Why have a FED if the US government has no tax revenues? Without our tax revenues these guys could not afford a single soldier or even the electric bill for the White House. They are totally dependant on us ... We The People! WE THE PEOPLE!! Yet they act like we "need" them ... That we could not acheive the monumental screw ups they have wrought onto this Earth without their brilliant leadership. I mean someone please list their successes for me! I am at a loss here ... Is the US Dollar at 79 and change a success? Is the housing industry a screaming success? Is Iraq a resounding success? Is our GDP at double digits? Is the price of gas low enough for you? Isn't the tax system a miracle of simplicity? WHAT IS GREAT? When I ask this I often get as an answer "our many freedoms"! Well, I guarantee you that these people that have been in the oval office the past 50 years were not the ones that got you the many freedoms you enjoy today. In fact it seems they have been doing their damnest to limit those freedoms at every opportunity. No ... these guys are utter and complete failures. Yet we keep electing these people to office ... so I have to ask ... What does that make us?

My drunken Vietnam vet friend ... I almost hugged him yesterday in the mayhem ... I really did ... I thought about it ... but didn't ... I almost cried for him and for me. We have been through so much torture ourselves here on Earth. It didn't have to be this way ... We as a Nation had the chance to change things for the better. We had the chance ... Instead we chose Vietnam and Iraq and most evil of all ... we chose printing money! You may not understand it but it is one and the same ... It is pure evil because it allows the darkness of misguided men and their egos to reek havoc and spread their destructive power over the people of this Earth. The evil of the US M3 is just not for Americans only ... Think about that ...

Sometimes when I catch myself screwing up or riding the skids I take pause and I have a fairly new mantra I have been using the past few years. I take pause and ask myself simply ... IS THAT THE BEST YOU CAN DO WITH YOUR LIFE?

I would love to be the moderator of one of these so called TV political debates and just ask that one simple question out of the blue ... Senator Romney or Senator Clinton ... IS THIS THE BEST YOU CAN DO WITH YOUR LIFE? Then just sit there in total silence staring off into their faces and watch them scramble for words of poetry and brilliance ... Perhaps there would just be silence. You know I would vote for the politician that just stood there, motionless and let the total silence of soul searching engulf the room and our TVs! And if they cried one speck of a tiny little honest tear I would stand up and say ... "Hello my Leader ... I am with you!!" What are the chances?

Bill,

In July my trading portfolio was looking pretty bad as I had moved out of golds into uraniums and then they nosedived ( CCO , DML ) when it became apparent that hedgies had propped up the U market and were now bailing to cover excesses elsewhere. In the midst of all the chaos you kept advising that it was time to buy on weakness. I re-made my gold position entirely with Goldcorp (G) on Aug 22nd @ 23.01 CDN.
I kept moving up my stop over the past several days and raised it to 28.99 last night on the consensus 1/4 point drop in the Fed rate being already priced into the market. Of course, today I was stopped out and watched the market move higher. Am I upset? NO WAY! I have learned from your blog that it is essential to be be a disciplined trader and take profits on solid moves in turbulent markets. A 26% return in 27 days qualifies. Thank you, and I will patiently wait for my U stocks to return to the plus side when oil moves to the point where energy alternatives are all the buzz again, as they were in the spring.

Bill,
Any updates on various client/subscriber services being developed?

Dearest kaimu,
RE: "What are the chances?"

I tell you, NIL to NONE !!! Because it is the nature of the world, like them there pigs, to tend towards evil.

The trick is, to live in the world but not of it. Seems to me you are doing very well for the most part.

love and light to you and yours.

re GRS:
Actually gold stocks in general. If, as seems more and more likely, the shackles are off the price of gold, then the major miners like ABX will show early strength, but the bigger profit will be made from marginal miners (like GRS if their ore turns out to be a lot poorer than expected in their BFS), as the rising POG has greater impact on their profitability. This applies to existing producers rather than explorers who have many other unknowns. So does anyone have any faves they'd like to share.

BTW, Bill, I've been wondering these last couple of months that I've been benefiting from your blog, why you included GFI in the Cara100 rather than ABX (yes,I'm long), which I see as a well run business that happens to be a gold miner.

Like most, I'm with Kaimu (though I was neo-conned again :-( by Colin Powell, who I thought was honest, having been there and done it, but there's no fool like an old fool),and one of the advantages of a gold standard is that if you don't have the gold, its a lot more difficult to go to war, although it didn't stop WW1, like Iraq an ego war.

ALOHA !!

moneygenie ... Come on mate ... what is this "for the most part" bit? It's bloody Hawaii ... bloody paradise here!

I am still waiting for that long list of GREAT SUCCESSES that our leaders over the past 50 years have accomplished ...

One answer to my own question coming from the Financial Post, which says GSS:

http://tinyurl.com/2vkoa7

2nd_Ave - Thanks for asking, I was in at 188.90 at 9:45am then watched it drop and stay down for the next hour. It was the first move I've made in weeks and was nice to see it turn around and end positive. I plan on holding until after gs reports on thursday. I'm trying to take my lead from a technical analysis point, so might hold longer and wait until I see a downturn in the indicators.

The fed cut more than I expected, and I couldn't understand why Ben would move from one extreme to the other. After surfing around the net, It dawned on me, all the chaos in Britain is the key. If you go and look at pictures from the Northern Rock fiasco(you will probably have to go to european news sites), they look like a mini version of the hysteria from the 1929 crash. Those pictures probably gave numerous heart attacks to some bankers. And the powers that be do not want that to happen here, not while their war machine is in full steam ahead mode.

Asian market is up about 4%. TM and MTU are big gainers. Gold looks good. Knock on wood, I hope that the positive momentum continues in Europe and here again in the morning. My strategy isn't to sell or buy. I'm currently 95% invested. I just want to be able to place tight stops, in black territory, under my speculative holdings.

ALOHA !!

From Adam Fergusson's book When Money Dies:

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

You are a passionate good man Kaimu.