HBSC downgraded a handful of miners today, including one that I've had my eye on - Kinross. We'll see if this sets up a buying opportunity.

Bill & others,
Do you follow Lihir Gold (LIHR)? An Australian metals analyst for a hedge fund on CNBC Asia touted it as one of his best for the coming years. He was stating that it was not hedged.

Treasuries Fueled by Petrodollars From Mideast Funds

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYkVuQ0h3RaE&refer=home

Also, I want to mention that I was pleased to see Ivanhoe Mines favorably mentioned in a program about social justice that aired on PBS last night. The segment involved the toll unregulated mining was taking on the environment in Mongolia. Ivanhoe has worked with, not against, those concerned with the environment.

I don't own Ivanhoe, but I would be proud to be an one. Bill, kudos to you for bringing this stock the attention of this community long ago (and when I would have been wise to become an owner ;).

As Bill Has said..the shareholders are left holding the bag

Marketwatch article from today...
http://tinyurl.com/ytmchg

stocktrader, LIHR presented at the recent Denver Gold Forum.

The site requires registration (free):

http://tinyurl.com/2ehja3

Isaiah had asked about a target price for Western Goldfields yesterday and I quoted $4 from John Doody's table in the current newsletter. On reading his article about WGDF's Mesquite mine in the newsletter released yesterday I see that he there gives a target price of $5.

Just sold the MNG that I bought yesterday at around 5 for about 6 pre-market. Will re-load if possible.

Yeah, I know...some guys get all the luck.

I sold the MNG I bought yesterday at around 5 for around 6 premarket today. Will re-load if possible. This is a good stock chart.

Oh, Bill and stktrader, LIHR was among the miners downgraded by HSBC. LOL.

On another note, I see that MSFT has reached that rarified +30 air in pre-market. I expected the stock to trend up in the Halo 3 afterglow. However, in talking with my son, who is an avid gamer, he was not particularly impressed with the game. So we'll see how long the magic lasts.

Thanks number2son. I will check them out. Do you like the miner?

shark, do you know why it is up in pre-market? It's getting bought by Newmont for $6.25.

You shoulda held, man. ;)

stktrader, I haven't listened to LIHR's presentation. But I will later today.

I checked news and didn't find. So I left a quarter on the table, you say? Still, I did the best I could. So there aint gonna be any re-loading, eh? I'm sorry to hear theey're getting bought, I liked trading this stock. I bought on a tweezers bottom the only other time I traded it a few months back and within minutes a positive pick came out on it and it rocketed that time too. I think this stock I have a 100 % winning percentage in and I've never had to wait more than a couple hours at most. By the way, you could could see in the stock chart the last week or two that, as Cyderman would say, "something was up".

I also bought GMO after it's stupendous swan dive yesterday which looks iffy but the price action has been compelling.

i heard a great quote on saturday while watching the big boxing match, from one of the announcers:

"you want to transform yourself from being a risk-taker to a risk-calculator"

thats what im trying to do every trading day, and hopefully it pays off.

Bill/All,

Another excellent report by CitiGroup Global Markets dated yesterday October 8, 2007. Highly recommended read:

http://www.mediafire.com/?3jxn2xipqn1

Hey thanks Sharkie

I never thought of monitoring the pre-market pricing. I followed you in MNG in at 5.15 out at 6.15 this AM

jsaxman

Here is a very useful link to get comparison information on silver,gold,uranium miners in spreadsheet form:

Investor's Guide to the Resource Stock Universe
http://tinyurl.com/22r7g4

Gold has twice reached this area (mid 720s)in the past week and bounced firmly. This may be information. We shall see.

Isn’t it quite amazing how, with the right spin, even the grimmest of situations usually offer some entertainment value? The credit squeeze was no exception. Try the "The twelve days of crisis" for a laugh:

http://investmentpostcards.wordpress.com/2007/10/09/the-twelve-days-of-crisis/

“from a long-time reader”:

RE:

Bill, I am very disappointed that you did not address this obnoxious posting today:

“Not sure how much you want to get into politics here, Bill, but a company whose idea of corporate philanthropy is to open branches for the troops in Guantanamo and Afghanistan and whose CEO is a pillar of the warmongering Israel Lobby in the US doesn't fit my picture of socially conscious. Posted by: badius at October 8, 2007 3:09 PM”

Dear Bill,

I need to focus on my portfolio today but I will take a min. to say this now and forever hold my piece. From the above we know what Badius means and that it is his opinion, he ought to be free to express it?? But What is "Obnoxious" to longtime reader I do not know, and I don't think it fair to assume that everyone is offended because of one complaint.

I hope free speech does not get muzzled today.

Light and Love always!!!!!!

NEWS ALERT!

Agnico-Eagle Tgt Raised To US$64 From US$56:
Scotia >AEM
Last update: 10/9/2007 7:54:47 AM

IVN-T
IVN-N

Up 3% .

ULAANBAATAR, MONGOLIA--(Marketwire - Oct. 9, 2007) - John Macken, President and CEO of Ivanhoe Mines Ltd. (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN), and Charles Forster, Ivanhoe's Senior Vice President of Exploration, Mongolia, today announced results from eight additional drill holes on the newly discovered Heruga copper, gold and molybdenum deposit in southern Mongolia. The Heruga Deposit is on the Javkhlant license, which adjoins the southern boundary of Ivanhoe Mines' Oyu Tolgoi copper and gold development project. The Javkhlant license is part of the Entree-Ivanhoe Mines joint-venture agreement area.

Mr. Forster said that the new discovery, previously referred to as the Javkhlant deposit, now has been officially named the Heruga Deposit. The name, proposed by the Buddhist Hamba Lama of Mongolia, means "supreme happiness". The Heruga Deposit lies within the southwest-trending Oyu Tolgoi structural corridor, approximately five kilometres southwest of the high-grade centre of the Oyu Tolgoi Southwest Oyu copper and gold deposit. Drilling to date on the Heruga Deposit has delineated a 1,100-metre-long coherent zone of molybdenum-rich copper and gold mineralization. A zone of gold-rich copper mineralization lies beneath this molybdenum-rich shell.

Additional drill results and sections from the Heruga Deposit will be posted to the Ivanhoe Mines website at www.ivanhoemines.com.

ValGold issued a PR today:

ValGold Intersects 13.67 g/tonne Gold Over 3 Meters to Confirm Deep Continuity of Los Patos Discovery Near El Callao

http://biz.yahoo.com/ccn/071009/200710090417639001.html?.v=1

Anyone who is savvier than I at analyzing drill results care to provide some insight?

Bill, I’m with Moneygenie on this one. Yesterday when I read this, by badius, I basically scanned it as a rant and moved on.

Exactly what is obnoxious here? Is it the words Guantanamo, Afghanistan, or warmongering Israel Lobby?

If I had to take a guess, the person who complained objected to the term “warmongering Israel Lobby.” Well IMHO just substitute warmongering American Lobby.

I must say that it is the quality and civility of the participants that continue to attract me to your blog, and of course your contributions. But, we need to be able to express our views/opinions even if it enrages others who have different opinions.

I hope free speech is welcome here everyday. Like Moneygenie this is the last I have to say on this.

As Forest Gump would say life is like a box of chocolates you never know what you get till you bite it, or something like that.

Ah, I see COP & VLO is still moving.

As many of you know I like discussing macro issues and themes. It helps me invest a portion of my portfolio for the intermediate term (12-36 months). With that in mind I bring to you Marc Faber's current article and a question. You will notice similarities between his views and Bill's (not bad company Bill). The one thing that Faber differs from Bill is the inflationary/deflationary argument that seems to be overhanging the future economic backdrop.

At the risk of getting caught up in minutia I was wondering if we could have some discourse over the infaltionary v. deflationary argument?

I understand inflationary forces quite well as I feel it each time I enter the grocery store or send in my utility payment but my mind has a hard time understanding how deflation will play out in America and maybe someone can help me here.

In a classical sense I believe that deflation is the contraction of credit. Ok I get that. I also see that housing is in a deflationary pattern. What I don't understand how this trumps inflationary forces or counteracts it and how it will play out.

Here's the Faber article:

http://tinyurl.com/28y6d3

JSAXMAN,

Congratulations! That makes me very happy knowing that:)

Telestar and moniegenie. badius made what is known as an ad-hominem post. http://en.wikipedia.org/wiki/Ad_hominem

Structured differently it would of fostered a different response. Ad-hominem posts are regular in forums and one step away from flame wars.

If badius would of posted. " I believe Starbucks is xxx and here is why. Or "I feel due to XXX Starbucks could be xxx" It may of gotten a different response.

Just my 2 cents and for the record badius seems like a keeper.

Scotia Capital Risk & One Year Targets

ABX US$40.55 1-SO Med $55.00 36.4%

ABZ C$39.27 2-SP High $47.00 22.2%

AEM US$51.11 1-SO High $64.00 25.5%

AUY US$11.57 2-SP High $13.00 12.7%

EGO US$6.07 2-SP High $8.00 31.8%

GBU C$2.26 2-SP Caution $2.50 10.6%

GRS US$10.97 2-SP High $13.50 23.1%

GSL C$6.82 2-SP Caution $8.50 24.6%

HRG C$2.98 3-SU High $2.75 -7.7%

IMG US$8.57 2-SP High $11.00 28.9%

KGC US$15.04 Restricted

MAE C$5.19 3-SU Caution $5.25 1.2%

MDG US$32.86 4-T High $35.00 6.5%

NXG US$2.62 3-SU High $3.40 29.8%

RBI C$6.51 1-SO High $9.00 38.2%

WGI Restricted

Scotia Capital expects gold to range between $675-825 for 2008/2009 period.

KXL.V on the move. I don't see any new news to speak of. I bought in for a tiny position last week after the impressive drill results.

VANCOUVER — — Newmont Mining Corp. [NEM-N] has struck a $1.5-billion deal to acquire Miramar Mining Corp. [MAE-T] of Vancouver, owner of the Hope Bay project in Nunavut.

The companies said Tuesday they entered into a definitive agreement, with the unanimous support of Miramar's board of directors, for the acquisition of Miramar a $6.25 cash per common share.

The offer represents a premium of approximately 29 per cent over Miramar's 20-day average trading price on the TSX through Friday, the firms said.

badius.......

Thanks for the up date on the traget price for Western Goldfields.

CARA100 GOL is flying high, up 33% in the last month.

Silver and Gold flying. Markm, what are you taking from today's action so far? I see that AEM has bested Friday's high.

I like Vista Gold here. Technically, it has cycled back to a place where I feel comfortable buying.

MNG was on my shopping list, until this a.m. Shark, congrats on your good fortune.

WFMI

Must say, I'm enjoying being in this stock this last month, having bought using Bill's AZ method.

In the context of social commentary informing business: an article in the Toronto Star quoted Alex James, (a British rock star turned cheese maker), as saying "You simply cannot make a food that is too posh or too expensive".

I think the future is rosy for WFMI. Some trends that support high-end food retailing are the advancement of Baby Boomers into their wealthiest, most free-spending years; and the argument that the rick are getting richer, (hollowing of the middle class). While the likes of Walmart will suffer general reductions in average consumer spending, reducing revenues in a recession, (if it occurs or is occurring), the wealthier always seem to have enough money for the day-to-day finery they've become accustomed to. They may hold onto their Mercedes an extra year or two if times are tight, but they'll still buy quality food.

That's my case for long-term growth at WFMI, but I will acknowledge that the recent run-up may need to be reverted to the mean. The RSI is rather lofty.

Geckojb, a great question with respect to inflation versus deflation debate, I googled prechter and deflation and found the following article.
The main points I took about deflation are:
1) A contraction in credit
2) Deflation involves a substantial amount of involuntary debt liquidation because almost no one expects deflation before it starts.
Is the sub-prime/derivatives fiasco of August the beginning of an ongoing involuntary debt liquidation that the HB&B’s are trying to mask?
3) Velocity of money.
4) Death of the consumer.
I have been waiting for this siren call to come to fruition for a long time. Are we closer or is it a fool’s call?
Here is the article:
May 04, 2005
Get Ready for Deflation
by Steve Moyer

"If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children wake up homeless." ~ Thomas Jefferson
I know. I know. Home prices are skyrocketing. Gas costs $2.79 a gallon. Health care costs are getting out of hand. College tuition is rising to infinity...and beyond! Even interest rates are trying to edge up. According to Elliott Wave International, Proquest's database revealed that the six leading U.S. metropolitan newspapers featured 139 articles about inflation during March; just two having anything to do with deflation. Concerns about deflation - somewhat evident in the media in mid-2003 - have pretty much gone away, wouldn't you agree?
True, deflation is not creating headlines right now but that monster is quietly lurking in the background as existing pockets of inflation ironically add fuel to the deflationary fire. There is really no way around it, money supply pumping or no money supply pumping. Safehaven readers should take heed and, in some cases, take action - the relentless drag of deflation is coming soon to a theater near you. I hope you'll ready yourself for it.
Understand, deflation does not just mean "falling prices." Automobile, computer and home electronics price-cutting is symptomatic of early deflationary pressure, but in the context of this thesis, I am referring to the coming Big Kahuna - a contraction in credit that, once its psychology takes hold, will change the rules of the asset game for at least a decade.
History has shown that post-bubble economies face overwhelming deflationary pressure as it is, but the Alan Greenspan Federal Reserve's "Let's Get This Party Re-Started By Throwing Gun Powder, Kerosene and Nitroglycerin On The Post Mania Fire" approach to monetary policy all but assured it.
When the tech bubble initially burst, the loss of capital, U.S. jobs and personal income created an immediate demand for cheaper goods, and in very short order the manufacturing sector of our economy moved lock, stock and barrel to China, which was better set up to facilitate that type of demand. American corporations, suddenly in full cost-cutting mode, quickly bought into the new paradigm and the U.S. lost more than 2,000,000 manufacturing jobs by the end of 2002.
The Fed, in an all-out attempt to soften a post-bubble free-fall (and blithely ignoring everything modern financial history had taught them), aggressively lowered interest rates (to 40 year lows), which essentially encouraged Americans to incur debt in order to spend money as a way to give the economy a badly needed boost. We needed a shot in the arm, and given the stock market's free-fall and what can only be described as a preposterously low (just above 0%) national savings rate and miserable job and income numbers, Greenspan & Co. decided there was only one avenue left to travel. The Fed lowered interest rates (to a Federal Funds rate of 1%), furiously pumped the money supply and wittingly enticed people to use their homes as ATM's in a band-aid style, stunningly misguided attempt to get us over the post-bubble economic hump. "Reflation," the experts called it.
Whereupon, intoxicated by low interest rates, Americans went on a borrowing and spending binge the likes of which this planet has never seen.
Perhaps you've grown accustomed to the dozen or so credit card solicitations in your mailbox each week ("2.9% APR for the first 6 months!!"), or one year, no-payments-no- interest at Circuit City (and The Good Guys and Home Depot and Best Buy and Orchard Supply Hardware and Sears and pretty much every other big box retailer in town), or no fee home equity loans up to 100% equity on your house. Perhaps you've purchased a car with zero down and 1.9% GMAC financing, or better still, 0% financing for five years. Consumer credit has become the name of the economic game. So be sure to sit down when I tell you that revolving credit card debt in the United States has increased exactly 58,868% since 1968 (that's right, not 580%, not 5,800%, but 58,868%. Whoa, momma!).
Esteemed market guru Robert Prechter, Jr. writes, "Near the end of a major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely. Deflation involves a substantial amount of involuntary debt liquidation because almost no one expects deflation before it starts."
The problem is, folks used the equity in their homes to back it all up. Refi became the name of the game. Up to your eyeballs in debt? Consolidate it into your home loan! Need cash? Refi, baby! Looking to buy a house? "Hey, buddy, how about a quick 100% (or 110% or 120%) of value loan!" Mailers offering "$1,000,000 loans for $3300 a month, EZ qualifying!" flood my office desk. "100% CASH OUT REFIS!" scream others. Go ahead and read that Prechter quote one more time. Enticingly low interest rates allowed folks to rationalize an entire pot full of financial decisions.
So what if everyone borrows their way to "prosperity?" Is there a problem, officer? Unfortunately, history says yes - credit bubbles don't have happy endings. Eventually, folks decide they have borrowed enough and they cut back. The credit-driven economy falls of its own weight. Even low interest rates no longer entice people to borrow. The short-term fix ends up adding to the post-bubble, long-term problem, as the increasing burden leads to a braking economy, a credit contraction, falling asset values and not enough liquidity left in the marketplace to prop everything back up. The result is a full-blown liquidity crisis, affecting all asset values - stocks, bonds, real estate, precious metals, collectibles - at least for a time.
"The psychological aspect of deflation...cannot be overstated," Prechter continues. "When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation. As creditors become more conservative, they slow their lending. As debtors and potential debtors become more conservative, they borrow less or not at all. As producers become more conservative, they reduce expansion plans. As consumers become more conservative, they save more and spend less. These behaviors reduce the "velocity" of money, i.e., the speed with which it circulates to make purchases, thus putting downside pressure on prices. These forces reverse the former trend."
Market technician Phillip Erlanger refers to the current phenomenon as "inflation in all the wrong places and deflation in all the wrong places." Yes, there are pockets of inflation evident within the global economic framework but those will prove to be gnats on the back of the slow-moving deflationary elephant. Mostly, those rising costs put the squeeze on producers, who lack the pricing power necessary to pass those cost increases along (go ahead and ask now just-above-junk-bond rated General Motors about that). In fact, while rising crude oil and fuel prices seem to skew the numbers towards inflation now, the squeeze it imposes upon consumers and others will actually be deflationary, as people curtail purchases and start looking for ways to dig their way out of debt (the good news is, deflationary history suggests that oil and gas prices will fall, as well).
Forget the mainstream financial media; the reversal has begun. The again-declining stock market - particularly at this point in the post-bubble wave pattern - is a telling and leading indicator, as is the drop in the money supply and in the velocity of money. Commodity prices are falling. The "flattening" of the bond yield curve (short term interest rates rise; longer term rates don't), a precursor to economic recession, looms large. And given the fact that Americans have spent the last three years using the equity in their homes to "buy stuff," there is really no way around it at this point. Consumers are quietly putting their clothes back on after their three year borrowing/spending orgy. The irresponsible, Fed-encouraged post-bubble borrow-fest is winding down and there simply is not enough savings nor fundamental (read: manufacturing) strength in the U.S. economy to support any investment market - at least for a while. Up to their eyeballs in debt, the rules of the consumer game are about to change and debt reduction is sure to be the coming rage. Deflation is upon us.
Because the credit contraction will be taking place in a post-bubble framework, the result will be a slow, grinding, painful decade-long decline for most, if not all asset classes. As the money supply necessarily contracts (and without a national savings rate to back things up), today's asset values will become downright nostalgic.
Most significantly, when the post-bubble shakeout is winding down, the vast majority of Americans will be unable to play the investment game, and cash will be king.
Those who prepared themselves by holding cash will be able to cherry-pick assets in many cases for literally pennies on the dollar. I sincerely hope you'll be one of them.

Steve Moyer,
PonderThis.net

The link: http://www.safehaven.com/article-3009.htm

Got to love the action in Gold.

Hey guys!

GSS looks to be breaking out of it's triangle-consolidation, long GSS, GMO, URZ

Hoosier-

This whipsaw action seems designed to throw longs off. Premarket dive down to support followed by a sharp spike higher.

The chart looks like chop, chop, chop which is a very volatile way to digest the recent gains. Nightmare scenario for anyone who doesn't hold a core position. For me, it may still mean that I don't get to reload at lower levels but it doesn't mean I have missed anything so far. We shall see.

Very odd for it to be this volatile right in the face of the Fed Minutes. Usually it goes quiet as traders wait for more information. Has Beeks stolen the orange crop report again?

Thanks number2son,

And I agree with you about Vista gold.

Markm,

I found it awfully strange as well that this action is before the Fed minutes release... action like this up or down is what I expected after the release.

So what's the call?

Are you selling into this POG strength or holding through the fed minutes?

Moneygenie and Telestar3d ...

I agree with you 100% regarding the danger of censorship in a democracy (or republic).

Creators and hosts of "blogs" from time to time point out that their creations are not democracies and that they "rule." Such creators would do well to consider the great risk we all take when we embrace such an attitude.

No less a person than Archbishop Desmond Tutu has recently encountered the dangers of censorship extant in the USA today. Many of you will be aware of the story but for those who are not you can locate the details over at juancole.com.

We, the people of the United States, and we, the people of Canada, and in fact all free people should never allow even the slightest steps to be taken in the direction of comfort with censorship.

Down such a path lies a society in which I have no interest in living.

The call? I have no clue. I've never liked any days that were Fed related. Anyway, all I can guess is that folks are figuring out that it doesn't matter what the Fed says... it's what they DO. This from Bob Pisani, "Today, the International Council of Shopping Centers is lowering their Sept growth estimate to about 2% from an original target range of 2-2.5%, the slowest gain since April. Problems? First, there's the weather -- unseasonably warm. Second, comps are tough. Third, the Street believes that economic weakness may still be accelerating and spilling over to the consumer, despite the strong jobs report."

Hmmm.....Bob Pisani, eh? Crap. He's citing weather? It's cover for the third reason. In CNBC lingo that means ST sell and wait to pick them up on the next leg down.

As for "free speech" on blogs...what total tripe.

This isn't a public place for speech, it's a privately provided blog, read livingroom, where manners and the rules of the house dictate one's behavior and speech.

This is NOT a public for sale newspaper, TV or radio station, it's a private blog and free speech isn't mandated or required, no matter how ridiculous an argument can be attempted to regulate the property of others.

Everyone has free speech. Simply pay for your own blog and speak as freely as you wish.

About predatory lending: how a worker who makes $9 an hour got a $615,000 loan. How can it happen?!? Maybe some HB&B sold a very good collateralized debt obligation with this loan?
http://www.latimes.com/business/la-me-housing8oct08,1,232295.story?page=1&cset=true&ctrack=2&track=rss
A single story does not say it all, but if US economy has been pumped so much I expect many problems. But it will be slow, in my (Italian) company we are still receiving good orders from US.

Predatory lending: My painter friend has a colleague who just this week walked away from his house. This person apparently did not understand the implication’s of his adjustable rate mortgage. It reset from $3,000 to $5,000 per month. He simply said I cannot afford 5K. Both of these guys make about $45 per hour.

(SBUX, CBOU)

Reference coffee conversation postings here

As an individual you decide the reason why you invest in a company.

Coffee companies sell coffee wherever they can. I purchase and drink both SBUX & CBOU coffee. I seem to prefer CBOU as a matter of taste.

CBOU is 88% owned by Crescent Capital, the investment arm of First Islamic Bank of Bahrain. There has been all kind of internet rumors associating First Islamic Bank of Bahrain with a controversial sheikh. CBOU’s CEO has spent a lot of time addressing these false rumors.

http://tinyurl.com/37pb9a

As traders, we question, investigate and form decisions. Perhaps my fraud investigative background makes me wary and skeptical of internet postings.

SBUX is basically a large cap while CBOU is a small or micro-cap.

I agree with Bill listing SBUX as a Cara 100.

(Disclosure: I’ve owned SBUX & CBOU in the past. Only exposure I currently have are those Jan SBUX puts I sold in the summer that if “put” to me, will provide SBUX shares to me in the 21 and change area.)

Shoot! I see while I was writing this, I missed my entry point on CNH this a.m.

Re: Badius/Starbucks
"a company whose idea of corporate philanthropy is to open branches for the troops in Guantanamo and Afghanistan and whose CEO is a pillar of the warmongering Israel Lobby in the US doesn't fit my picture of socially conscious."

I suppose it is a matter of degree what "socially conscious" really means. Perhaps there is a part of the Israel lobby that may or may not be "warmongering". On the other hand how many individuals can pass this test of "socially conscious" if applied to a more broad sense; lets say mining. Is it socially conscious to strip and pollute the rainforest to get at some nuggets of gold and displace the indigenous peoples? The comment about Starbucks seems like a highly personal one that cannot be broadly applied or discussed. Attempting to walk the razors edge of being more socially conscious is a path fraught with peril, because anyone can be attacked from a very narrow and perhaps biased viewpoint. I felt the comment was a very narrow one, which indicated extreme bias and cannot be responded to in the context of this blog. Free speech is not just license to rant but a right to engage in frank and open discussion. The question is: does this level of rant belong on this blog? Does this community really want to support this level of rant? In the name of free speech I say NO.

Bill,

Did you have a chance to look at the latest CitiGroup file I posted earlier?

Any comment on its contents?

There is an interesting article in The New Yorker about Victor Niederhoffer titled “The Blow-up Artist.

The Link:http://www.newyorker.com/reporting/2007/10/15/071015fa_fact_cassidy

Telestar, thank you for the article. It helped understand the deflationary argument a little better.

Innovative companies continue to get attention with decent liquidity. AVAV is one such company...I might have posted this one sometime ago..not sure..I know that I wanted to but was hesitant because it's revenues are from the Dept of Defense. Electric power is at the heart of its R&D. Defense assets have the aura of being less vulnerable to inflation, slowing economy, or decline in the dollar. In light of today's heated topic, I'm not sure where I would draw the morality line for myself re investing. It's there but I can say that I feel OK with this one while I'm sure others would not. On the positive side, the company has a "green" component:Ridgeland, MS, SEP 18, 2007 (EventX/Knobias.com via COMTEX) -- By David Bridges, dbridges@knobias.com

AeroVironment (AVAV) has been granted a patent by the United States Patent and Trademark Office for a battery charging innovation that enables simultaneous or parallel charging of multiple batteries. The USPTO awarded AV patent No. 7,256,516 titled, "Battery charging system and method," on August 14

Disclosure:I have a little larger than usual allocation here for a single stock in my port.

Bill & Cara Crew:

The following statement definitely describes your blog and The Crew

In Dr. W. Edwards Deming's Theory of Profound Knowledge, he makes the point that true learning never takes place unless we place our credibility on the line. Or, unless we become a real part of the learning experience.

Exerped from
http://www.pro-fundity.com/index.html

I suggest that investors/traders check out this site for some great fundamental and TA investing info.

Thanks Bill

Re: predatory lending....could it be the result of indiscriminant borrowing.........

http://dantwo.net/video/snl_dontbuystuff.wmv

RE: Commodity prices will be pushed down (by HB&B) because that is the only way that central bankers can reflate without interest rates soon soaring and thus causing more examples of the Northern Rock situation.

Lovely. I tend to almost agree.

manx928 -

Without intending to reignite a debate that took place a Friday evening few months back on this blog re: WFMI/SBUX and "status" consumption, I would take a position opposite yours in the secular bullish argument: a "stereotypical" WFMI customer is more likely to trim on the small luxuries (and those that he/she enjoys mostly in private) rather than lose the most visible symbols of status (car, house, memberships, private schooling, etc.).

BTW, make sure that you book some gains from the nice 2/3-month move. It looks to me that low-mid $50s kisses the underbelly of the downtrend started early last year (see weekly chart with May and Nov. 2006 downtrend). Unless the resistance is cleared with conviction (say $57-58 on good volume), watch for a trip back down.

JML

ALOHA !!

ON THE GROUND
My Father-In-Law owns a business that provides specialized loans to homeowners who want to landscape or add a pool or spa. He has been in this business for over 20 years now in San Diego, CA.

He informs me that a few days ago the #2 pool contractor in California filed bankruptcy, Hallmark Pools, due to mismanagement and lack of sales. The #1 pool contractor in California, Mission Pools, reports sales have crawled to the lowest since the last housing crash in the 1980s and they see no end in sight. My Father-In-Law also reports that his main source of loans CE Capital has within the past four months changed their name to GE Money Bank and have now a ton of bad loans(non-performing) and have announced they will no longer use "brokers" for loan origination. Well with these changes my Father-In-Laws business is down 75%! He claims it is the absolute worst in all his life as a broker. He is semi-retired so it is not a major concern for him, but the guy that took over his business is none too happy!

Here is a typical customer scenario that occured many times ...

Customer: I would like to know why you turned down my application for a $200k loan to landscape and install a pool?

Broker: You did not qualify in the eyes of GE Capital ...

Customer: How can that be? The last appraisal on my home was at $965k so I have some $300k in equity which more than covers a $200k loan!!

Broker: Not according to GE Capital ... It does not work like that. You qualify for the minimum, which is $75k.

Just so you know an average not so flashy pool costs $50k ... Add in a vaccuum system and its $75k.

We hear all sorts of news about homebuilders and sub-prime liar loans but this is a domino effect and the pool contracting and cement contractors that I know are taking a big hit! Awhile back I reported a friend of mine who is a residential concrete contractor in Las Vegas,NV for the past 35 years has seen his business drop to zero! He even had to lay off his own brother!

The domino effect is in full swing ...
JUST AN FYI ...

Telestar3d ... For once I'd like these deflationist pundits to figure out how we got these rising prices. Here's a hint ... IT ISN'T THE CONSUMERS! You cannot have deflation as long as WW3 is going! It is the global governments and their spending that is causing inflation and it is hyperinflation that preceeds deflation. Governments always inflate or die to prevent deflation. Then guess what they try once deflation has its grips on their economy? They start up programs like they did during the Great Depression like NRA, WPA and AAA of the NEW DEAL era. In effect the global currencies of today are Socialist and under the Socialist system governments have to inflate or die! Look to the USSR ... The idea of a "nanny state" where all our needs are taken care of by a benevolent master is all very warm and cozy at first and then reality sets in.

The USA is on verge of "socialized medicine" and 70million baby-boomers and an infinite WW3 ... I won't even include the ongoing liar loan and bank derivatives "mark-to-fantasyland" bailouts ... Where is there any signs of "less" government spending? Less money printing? Surely you don't expect a politician to grow a "spine" under those circumstances? If these guys ever had a "spine" then we would not have ever had a FED in 1913 ...

jasper- tide's lifting again...other than a couple of junior miners, have no boat in the water, man...nothing like your schooner...

still waiting for UNG to take off...

Anyone know the size of the subprime paper market (in particular that portion created by the bank's "conduits"). I'd like to know it as a percentage of US or world GDP - I can't handle very large numbers well - they don't relate to my personal affairs. My guess is that the Fed caught a whiff of the deflation potential last month and turned a whiter shade of pale. I suspect that a collapse of that market could bring on a deflation faster than any monetary agency could handle, and that would overwhelm the ongoing destruction of the currency that Kaimu narrates. When the consumer turns saver, its a psychological change that the Fed will have to allow to run its course. In the 70s the expression went something like "The Fed is pushing on a string".

2nd,
The schooner belongs to another and more confident tactical asset investor with whom I share communication. He can make weekly decisions over Pthe weekend, do his buys on tuesdays, let his trailing stop losses make the sales, keep to a max drawdown of no more than 5% in a week or 12% in a yr, ytd be up around 44%, and have plenty of time to walk in the woods of BigFork Montano.

Re bullish on gold citi report...Interesting that the chief analyst at Citi has no mention of precious metals in his current report, but does return to his theme of specialty retail. I have this funny image of the upper class here scrambling into Saks juxtaposed to the upwardly mobile in the BRICs latching onto gold.
"
North America | United States
Equity Strategy (Citi)
Living Large Index Update
To be fair, it would be inaccurate to assume that the idea of “the rich getting
richer” has been thoroughly missed by many investment industry professionals.
Indeed, many of them fortunately partake in such trends. Yet, despite such
widely known and disseminated concepts, the stock prices of the companies
that tend to cater to upper income Americans continue to perform very well."

Northern Dynasty is making a huge move today up 10%. Buyout candidate as Grandich thinks? I'm glad to be riding this pony but will get out when the weekly RSI(7) gets to nosebleed territory.

Anyone interested in Geo-thermal energy companies, the largest being Ormat technologies? It is ridiculously overvalued unfortunately. I read this article a while ago and suddenly understood the potential:

http://web.mit.edu/newsoffice/2007/geothermal.html

Nice up moves in EGO (6.1%), FRG (7.14%) and PAL (6.73%)

May be early, but sold recent pickup spec VZ miner GRZ in IRA.

(Disclosure: Long PAL)

I love PAL here and I am kicking myself for not buying it yet.

IVN-t
IVN-n

Up 7.4 %

Ivanhoe in breakout mode!Kick that camel BOB.

Long....for a long while.

Big moves in the coal sector. (Long MEE)

Utilities moving also on fed minutes release.

ALOHA !!

Nostalgic talks of Democrats when Bill Clinton ran a "surplus" are in actuality pipe dreams! There never was a surplus and never will be when the US government is forced to be honest. The "off budget" deficits grow larger by the day and even make an Enron CEO blush!

READ ON:
From Ron Paul Media ...
"An analysis of the Social Security "Trust Fund" shows we are not doing a credible job of keeping these promises. Official reports show the trust fund having assets of $2.1 trillion. In reality, those dollars are just IOUs the government is writing to itself when it borrows from the fund to spend on unrelated programs. There are no real assets in the Social Security Trust Fund. This is similar to taking money out of your savings account, spending it, then replacing it with an IOU to yourself, and calling that IOU an asset.

In addition, this money we owe to our seniors is not even included in official budget deficit figures. In fiscal year 2006 alone, $185 billion was borrowed from Social Security. The official deficit was reported to be $248 billion. The actual deficit for 2006 would be $433 billion when combining the two. This sort of accounting would land private sector executives in prison for fraud ... "END

Link To Ron Paul: http://tinyurl.com/2sdcrf

Now add in the "off budget" deficits for the Iraq War and God only knows what else ... The "on budget" deficits are bad enough. For instance the interest on the current US debt is running at $460bilUSD annually. Thats $1.2bilUSD per day! Thats just interest payments. Current costs for Iraq alone are at $330milUSD per day or $2.5bilUSD per week! The military needs to repair damaged equipment ... just damaged, not counting destroyed ... and needs $17bilUSD. The emergency funds the military is asking for is $90bilUSD in 2008. Then there is the lifetime treatments for injured Iraq Vets. Estimated total costs for Iraq by 2012 will be $2trilUSD if present spending continues. Now add in the "War On Terror" expenses for security of US borders and airports and shipping terminals and added policing.

How would gutless politicians finance these "off budget deficits"? They will monetize them ... in other words ... PRINT MORE!

The day our elected leaders are forced to quit spending and be honest is the day DEPRESSION arrives! Not deflation, but a full blown DEPRESSION ... The kind only a massive default in confidence can bring ... Deflation would be too kind!

The "go-to" asset under any financial crisis circumstance is gold and silver. That is a historical fact. The only reason the price of gold did not soar higher during the Great Depression is because FDR had it artificially capped at $35 and even to this day the US government counts their gold reserves value using $42USD per ounce. This is something akin to the current US credit rating of AAA ... Everyone knows its a lie but it just has not yet been announced it is a lie ... "officially"! To acknowledge US gold is worth more than the long standing $42USD per ounce would be admitting the US Dollar is a fraud! Once again only the US government could exist in such a FantasyLand!

I think the US voter suffers from "Stockholm Syndrome" ... We have become enamoured with our kidnappers after decades of brainwashing!

ALOHA !!

Nostalgic talks of Democrats when Bill Clinton ran a "surplus" are in actuality pipe dreams! There never was a surplus and never will be when the US government is forced to be honest. The "off budget" deficits grow larger by the day and even make an Enron CEO blush!

READ ON:
From Ron Paul Media ...
"An analysis of the Social Security "Trust Fund" shows we are not doing a credible job of keeping these promises. Official reports show the trust fund having assets of $2.1 trillion. In reality, those dollars are just IOUs the government is writing to itself when it borrows from the fund to spend on unrelated programs. There are no real assets in the Social Security Trust Fund. This is similar to taking money out of your savings account, spending it, then replacing it with an IOU to yourself, and calling that IOU an asset.

In addition, this money we owe to our seniors is not even included in official budget deficit figures. In fiscal year 2006 alone, $185 billion was borrowed from Social Security. The official deficit was reported to be $248 billion. The actual deficit for 2006 would be $433 billion when combining the two. This sort of accounting would land private sector executives in prison for fraud ... "END

Link To Ron Paul: http://tinyurl.com/2sdcrf

Now add in the "off budget" deficits for the Iraq War and God only knows what else ... The "on budget" deficits are bad enough. For instance the interest on the current US debt is running at $460bilUSD annually. Thats $1.2bilUSD per day! Thats just interest payments. Current costs for Iraq alone are at $330milUSD per day or $2.5bilUSD per week! The military needs to repair damaged equipment ... just damaged, not counting destroyed ... and needs $17bilUSD. The emergency funds the military is asking for is $90bilUSD in 2008. Then there is the lifetime treatments for injured Iraq Vets. Estimated total costs for Iraq by 2012 will be $2trilUSD if present spending continues. Now add in the "War On Terror" expenses for security of US borders and airports and shipping terminals and added policing.

How would gutless politicians finance these "off budget deficits"? They will monetize them ... in other words ... PRINT MORE!

The day our elected leaders are forced to quit spending and be honest is the day DEPRESSION arrives! Not deflation, but a full blown DEPRESSION ... The kind only a massive default in confidence can bring ... Deflation would be too kind!

The "go-to" asset under any financial crisis circumstance is gold and silver. That is a historical fact. The only reason the price of gold did not soar higher during the Great Depression is because FDR had it artificially capped at $35 and even to this day the US government counts their gold reserves value using $42USD per ounce. This is something akin to the current US credit rating of AAA ... Everyone knows its a lie but it just has not yet been announced it is a lie ... "officially"! To acknowledge US gold is worth more than the long standing $42USD per ounce would be admitting the US Dollar is a fraud! Once again only the US government could exist in such a FantasyLand!

I think the US voter suffers from "Stockholm Syndrome" ... We have become enamoured with our captors after decades of brainwashing!

Khan Resources KRI

up 8.4%

Bill mentioned this stock here previously.Just hitting 50 day ma.5day ma crossing 10 day ma.
Long small position

Funny how on a day where all of retail got clobbered really bad, the leading Dow stock is AXP.

JML

Bill,
re: badius

The Web 2.0 community phenomenon is amazing. As far as comments go, I think the best structure to set up is a vote system for the "value" of comments, and comments with enough negatives aren't shown, while comments with enough positive ratings can be highlighted or sorted by the user. Additionally, you can make ratings by high rated commenters "worth" more and low rated commenters worth less.
I realize this is probably beyond the scope of your blog at this point, but if and when you do have a web developer working on stuff, a system like that would eliminate the need for you to police the blog yourself.

Re: AXP

Consumer credit growth is at 8% as consumers are forced to borrow to keep up their lifestyle. This is good for credit card companies in the short term, until the delinquencies surge.

http://globaleconomicanalysis.blogspot.com/2007/10/consumer-credit-vs-weakening-demand.html

VAL Gold Resources
Volume Alert !
10DayAvg: 96,795
Total today 805,675
Block: 350,000 ( 1)

Long VAL (thanks to this blog)

moab -

Just like the subprime refinancing activity was good for the mortgage companies? As short sighted as traders may be, I can't believe that they would welcome an accelerating rate of growth (far greater than income growth) with a sunny attitude.

BTW, AXP somehow took off around 12:30p/1:00p without any news I could trace. So my previous post probably failed to convey the depth of my sarcasm.

JML

re: AXP

In my opinion, traders are incredibly short sighted here, especially with any company with China in their name running like tech stocks in 1999 - check out RCH!

The housing crash was very predictable with Bill and iTulip both calling the top in summer 2005. Didn't stop traders/analysts from denying reality.

Jumble,

I'm sorry I missed the earlier discussion of consumption patterns. I'm sure it was an interesting debate!

While we somewhat disagree on consumer behaviours, we do agree that WFMI could easily go soft here. I like it long term, but am pretty close to having my stops exercised - - which will have me looking for a re-entry point later on.

RE: ValGold

A big thank you for keeping us in the loop on ValGold. It is difficult for us small fish to get a real sense of quality of management for many micro-cap exploration companies. Your comments are reassuring.

*************GOOD GOLLY GENERAL MOLY (GMO)!*************

GMO: I bought GMO one yesterday at $7.02 after the spike upward indicated a potential breakout above 7 resistance. It closed at the high, at $7.90 up 90 cents, and there may be more to come.

GSS: This one could've gone either way I thought in recent days, but today when the triangle came to a point it indicated up also, and engulfed quite a few days' action with a strong close, this will go higher, probably much higher. I got long today a little higher than I would have liked but I was knee deep in another trade at the right moment. Also the notion of more possible fed cuts (unanimity at the last meeting) seems to auger for a policy shift rather than a one-of and hence, should encourage the pretty yellow metal.

URZ: I bought a tiny amount a few days ago and the little guy's starting to perform. It broke it's downtrend weeks ago on the daily, corrected to the 20 day, and is advancing now. It's volatile so play small. Baby needs a new pair of reactors.

PAL: I bought this one on the close. It's breaking up and out also, rising 20 day good price action.

MNG: I recommended this one last monday I think as my stock of the week. I should have built a bigger position but it was taken over and did go up a buck-40 today. I am glad that I at least bought yesterday and caught most of the move. And if you check the price action in the past few weeks, I do not in any way believe that this news did not find ears prior to today. This thing was trading as though it was going to be taken over. Food for thought.

Agriculture stocks are too expensive, at least I feel that I would be chasing them, so when I went through the Cara100 charts with price not too far away from the 50dma, the DOW chemical chart looked interesting and there was news in the past month about its ag program. So, I took position knowing that it's a quality company...which is a huge leg up.

Questions. On days like today and other recent rallies...is this panic buying mixed with short covering?....is this main street moving more cash into equities forcing mutual funds to put money to work? Maudlin claims to have mega exposure to his news letter, over one million I think; he's highlighting gold miners with a promo to a newsletter by someone he trusts to find just the right miner. Is this one of the early signs of a bubble in the making?

jasper- "On days like today and other recent rallies...is this panic buying mixed with short covering?....is this main street moving more cash into equities forcing mutual funds to put money to work?"

leaning towards (certainly hoping) both of the above...still think we cannot go down significantly before seeing more exuberance, which is best defined as an "i'll know it when i see it" phenomenon...not there yet...and nothing like a series of of 3-digit up days to get us there...for once i can honestly say if i had your port i would hang onto it for now...good luck

2nd ave: Thanks! Everyday it's a ride unknown.

I just learned today that Daihatsu found a way to eliminate platinum from fuel cells. This comes just after Mazda found a way to reduce platinum and palladium in catalytic converters by 90%. My question is, why were these discoveries not made by our car companies in America? Perhaps Ford was too busy coming up with ideas such as saving money on coiled springs by cutting the steel use in half and encasing them in plastic. This worked great for me until I backed into a snowbank and the plastic ripped, after which the coil spring rusted and collapsed. Or like the time I discovered that they had skipped priming the roof of my van, so that after a few years the paint peeled off. I think this is what they call cutting costs, making the company lean and mean, and increasing shareholder value. I have an idea that would really appeal to Ford buyers--a gauge that says after 80,000 miles, "Time to buy a new Ford!." With the collapsing dollar Ford will undoubtedley have more foreign sales, particularly to the Japanese. Lucky Japanese!

Another urban/breakthrough myth. Did you hear this on Bloomberg? CNBC? A reliable news outlet? We'll need to see sources. Why is platinum rocketing this AM?

Speaking on PM's, everyone should be absolutely giddy watching the GDX and it's CA equivalent this morning.

Craig,

Perhaps I was too trusting of Bullionvault's website. Normally I've found what they write to have been reliable afterwords. Are you saying that there are substantial reasons to doubt these statements? How do you establish that they are urban myths?

I read this blog, of course!

Bill covered this within the last few days due to a similar posting by someone else.

There is always one of these stories ala the penny dreadful type of hype when prices are in flux.

Look at the timing and PM prices. Do you believe the story or your eyes? If the use of these metals was cut by the percentages in these stories, how would they be going higher?

Point well-taken. I haven't been able to reconcile the market action with the story myself, although I have noticed that Platmin (PPN.TO) had dropped considerably. I understand, however, that there is often little correlation between the news and the market.

LOL! We do what we can.

LME Platinum up a bit over $22 this AM.
Someone was trying to get you to sell yours cheap.

I'll believe it when it's reported on a well known reputable news source with no metal in the game.

Shark:

Scotia Capital target on your General Moly pick

GMO US$7.90 1-SO Caution $9.50 20.3%

Also,Scotia capital has raised 2008 copper outlook by 35% ie 3.25lb from 2.40.Zinc lowered by 8% from 1.20 to 1.10