It all starts with the general rule: “Those who print the money, make the rules” and that happens to be the governments, the private sector bankers that I call Humungous Bank & Broker (HB&B), and the go-between central bankers.

As always, rotting fish begin to stink at the head (well known proverb).

Rotten liars are destroying the capital markets.

The syndication of Liar Loans involved vast amounts of fraud as much as bad judgment on the part of their creators. Both reasons (ie, fraud and bad judgment) were permitted to exist by HB&B self-regulatory organization (SRO) rules. Those rules, which omitted the most basic checks and balances, like transparency and a mark-to-market requirement, facilitated Liar Asset Values.

Ultimately, it was the Pension Funds and the Hedge Funds (ie, the organized end of the Buy-side) that said to the financial services industry (ie, the Sell-side), something like “Enough is enough, we no longer have the confidence the value is there in light of foreclosures in the real estate market”.

After the Buy-side started selling these SIV’s back to HB&B and their proprietary Funds in June and July in huge numbers, the jig was up for HB&B.

After that point, the Federal Reserve Bank did its job of protecting HB&B to the extent it could, regardless of the negative impact on the $USD, by lowering rates and pumping liquidity into HB&B by record-level purchases of their Treasury and mortgage asset holdings. The NYSE did its job of protecting the listed companies that were caught up in the exploding mess, by failing to require “full, true and plain disclosure” of the phony assets of so many of its companies. The US government did its part in loosening rules for the Government Sponsored Agencies and other mortgage lenders, and in putting out a sequence of Liar Economics reports.

Financial Entertainment TV even did its part to protect HB&B and its near-bank, money-lending sponsors like General Motors (Ditech) and General Electric (GE Capital) by rolling out another Trans-America Caravan, the “America is Open For Business 2007 Tour” -- similar, by the way, to their well-timed “Real Estate is Red Hot 2005 Tour”.

Throughout this shameful period, the Securities and Exchange Commission, whose mandate it is to “Serve and Protect the People”, went AWOL. I could go into the political reasons why the SEC failed its leadership responsibility, but the plain fact is that the People have been left holding the bag with worthless SIV asset-backed holdings in pension plans, both directly and indirectly held by private and public sector Funds, and by the much higher interest rates that are soon to come once HB&B declares the system healthy and strong. At that point in a year or so, the People will simply be told that interest rates must rise in order to check the rise in commodity prices and soaring inflation.

That’s cute -- steal the people’s wealth now and make them pay for it later.

Without an effective securities regulator, where do the people turn?

Some, like you, come to blogs like this one. Regrettably, when the pain starts to show, we even have to suffer the remarks from idiots among us, saying the negativity here is too strong. Don’t let that stuff distract or stop us. We know we have two jobs: (i) we primarily focus on prices and trade the opportunities to accumulate or distribute positions, and (ii) we secondarily plan for that day in the future when we the People wrest back control of our capital market from the Sell-side, and we put them in their rightful place as product creators and sales people.

What is needed of course is an apolitical voice for the People that is organized. To accomplish our goals and objectives, it will take an organization on our part to beat the ones that work against us.

In fact, different types of organizations are needed: one, say, a well-funded formal investor advocacy strategic planning and spokesperson group, and another one, a type of guerilla tactical fighting action group, of the kind this Community is rapidly shaping into, with multiple units on the ground, working in the trenches.

At the end of the day, effective leadership will come not from government, HB&B or central banks. It will come from us. The simple reason is that we are the Buy-side, the people and corporations who do most of the world’s value-creating work and own most of its wealth.

It is time we stopped those who are misguiding us, and stealing from us, as they meet their own goals and objectives. We need to organize to meet ours.

Enjoy your day. I will return tomorrow with the Week In Review #46-07.

And keep positive because in time we are going to win.

---

Table 1: Cara ETF List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLP	28.57	0.13	0.46%	2.47%	2.00%	3.03%	8.71%	7.73%	3.66%	10.52%
IYH	71.02	0.48	0.68%	1.85%	0.45%	0.87%	6.86%	6.48%	-1.36%	8.03%
IYZ	29.69	0.26	0.88%	1.40%	-6.04%	-9.34%	0.10%	-5.11%	-10.95%	5.06%
XLF	30.40	-0.29	-0.94%	0.86%	-4.58%	-6.86%	-17.66%	-8.30%	-19.81%	-15.98%
XLY	34.08	0.04	0.12%	0.50%	-4.51%	-5.33%	-11.53%	-3.46%	-13.28%	-10.74%
XLI	38.75	-0.05	-0.13%	-0.44%	-3.53%	-2.39%	9.99%	3.00%	1.15%	9.53%
SMH	32.79	0.09	0.28%	-0.46%	-4.26%	-7.97%	-2.32%	-8.92%	-12.44%	-7.50%
XLU	41.68	0.01	0.02%	-0.60%	-0.57%	5.20%	13.20%	8.83%	-2.39%	15.78%
XLE	72.40	1.60	2.26%	-2.75%	-4.26%	-2.75%	27.96%	11.21%	10.20%	27.85%
XLB	40.31	0.01	0.02%	-2.94%	-5.44%	-4.25%	16.47%	10.74%	0.40%	18.49%

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CVX	85.98	1.82	2.16%	-1.47%	-2.83%	-3.69%	21.15%	5.64%	6.50%	25.43%
PBR	105.77	5.99	6.00%	-1.85%	13.37%	31.05%	112.26%	97.48%	98.67%	137.05%
XOM	85.10	0.61	0.72%	-2.01%	-3.22%	-7.64%	14.83%	5.49%	4.48%	17.10%
TOT	79.99	2.00	2.56%	-3.24%	0.97%	1.07%	12.71%	14.26%	9.53%	14.34%
ECA	68.04	0.68	1.01%	-4.91%	-6.13%	4.44%	50.07%	19.39%	12.59%	38.21%
IMO	52.91	0.66	1.26%	-5.25%	-3.83%	7.61%	48.37%	34.60%	25.05%	45.80%
SU	102.27	2.50	2.51%	-5.86%	-5.78%	-1.87%	38.37%	21.17%	22.48%	35.40%
CEO	163.26	-3.19	-1.92%	-7.24%	-21.13%	-8.54%	73.18%	68.27%	80.48%	91.08%
STO	30.87	0.38	1.25%	-7.49%	-7.66%	-6.11%	20.16%	18.69%	14.80%	15.66%

Table 3: Senior metals and steel equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
GGB	30.03	1.06	3.66%	3.44%	-0.30%	6.11%	82.89%	54.87%	35.64%	99.93%
TS	48.25	1.27	2.70%	3.43%	-6.33%	-5.60%	-0.56%	13.37%	6.23%	10.79%
PKX	158.95	2.34	1.49%	1.85%	-4.48%	-0.25%	100.11%	27.67%	40.44%	118.37%
RIO	35.40	0.90	2.61%	-0.84%	-2.69%	6.43%	22.83%	-7.35%	-22.01%	35.06%
BHP	74.73	0.63	0.85%	-1.42%	-10.75%	-9.57%	92.26%	42.97%	44.94%	86.41%
AA	36.31	-0.02	-0.06%	-2.10%	-5.84%	-3.02%	23.80%	13.75%	-6.99%	28.26%
MT	70.75	1.20	1.73%	-3.10%	-6.56%	-8.86%	73.41%	31.46%	23.39%	73.11%
NUE	52.46	1.48	2.90%	-4.25%	-9.41%	-11.28%	-3.74%	14.39%	-20.96%	-4.95%
RTP	442.43	1.47	0.33%	-7.51%	19.34%	29.69%	116.77%	88.55%	55.88%	114.87%
TCK	42.12	0.25	0.60%	-11.03%	-13.23%	-12.70%	-39.18%	12.14%	3.41%	-39.93%

Table 4: Senior capital goods makers and transportation

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
ERJ	48.83	0.87	1.81%	5.49%	1.98%	1.86%	19.74%	16.26%	3.48%	14.33%
MMM	81.57	1.92	2.41%	2.59%	-3.91%	-5.83%	4.23%	-4.48%	-5.16%	1.59%
UTX	74.30	0.35	0.47%	1.07%	-1.78%	-2.24%	18.29%	4.53%	8.50%	11.29%
GE	38.65	0.34	0.89%	0.70%	-4.17%	-3.47%	1.79%	3.90%	4.94%	7.48%
CAT	69.44	-0.29	-0.42%	-1.38%	-7.12%	-5.61%	13.54%	-4.88%	-8.57%	13.15%
FDX	96.80	-4.57	-4.51%	-2.95%	-5.50%	-6.31%	-11.82%	-7.07%	-11.14%	-18.06%
HON	55.88	-1.28	-2.24%	-3.25%	-5.85%	-4.18%	23.90%	3.25%	-3.89%	28.99%
BA	89.99	-1.35	-1.48%	-4.48%	-7.95%	-4.16%	0.92%	-2.97%	-5.61%	1.44%
ABB	27.97	0.22	0.79%	-6.58%	-9.10%	3.06%	56.96%	31.44%	38.12%	75.80%

Table 5: Senior consumer discretionary equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
SBUX	23.17	-0.93	-3.86%	2.66%	-9.24%	-11.23%	-34.27%	-12.93%	-17.84%	-41.33%
CCL	44.91	0.21	0.47%	2.32%	-2.58%	-4.95%	-11.85%	3.27%	-6.22%	-10.00%
TM	110.20	-0.28	-0.25%	2.17%	-2.48%	3.57%	-18.55%	-3.26%	-10.05%	-10.10%
WHR	76.16	-2.19	-2.80%	0.95%	-3.75%	-11.59%	-10.04%	-17.93%	-31.75%	-13.78%
NKE	62.64	-0.41	-0.65%	0.69%	-1.93%	-1.09%	28.28%	17.77%	18.21%	31.54%
DIS	32.53	0.13	0.40%	-0.64%	-4.10%	-3.79%	-4.88%	-0.15%	-9.66%	-1.60%
EBAY	32.74	0.61	1.90%	-2.15%	-6.51%	-10.84%	8.52%	-2.68%	-1.53%	-1.71%
BC	20.51	-0.70	-3.30%	-3.62%	-7.32%	2.55%	-35.75%	-14.61%	-37.55%	-36.81%
JCP	43.19	-1.14	-2.57%	-7.89%	-18.95%	-21.97%	-44.67%	-32.66%	-42.96%	-47.09%

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
WMT	46.34	0.14	0.30%	8.02%	4.87%	3.02%	-2.54%	6.53%	-1.78%	-3.28%
WAG	39.97	0.38	0.96%	4.91%	2.20%	5.60%	-13.24%	-11.41%	-11.73%	-6.44%
WFMI	45.31	-0.49	-1.07%	4.45%	-7.36%	-4.11%	-0.37%	10.06%	13.79%	-8.39%
PG	73.19	1.36	1.89%	3.93%	5.23%	3.38%	13.40%	14.31%	15.59%	15.22%
KO	62.62	0.67	1.08%	2.94%	3.49%	6.57%	28.90%	17.31%	18.73%	32.84%
ABV	74.75	1.23	1.67%	1.84%	-9.37%	-1.57%	52.24%	34.52%	15.64%	57.80%
PEP	74.15	0.57	0.77%	0.91%	1.60%	5.33%	18.22%	8.45%	8.03%	19.98%
MO	73.18	0.91	1.26%	0.65%	1.48%	3.80%	12.72%	10.28%	4.56%	16.68%
DEO	89.30	0.37	0.42%	0.12%	-2.67%	-1.11%	12.28%	13.05%	5.57%	18.01%
BUD	49.74	-0.07	-0.14%	-0.14%	-1.82%	-3.06%	1.06%	5.94%	-1.07%	5.67%

Table 7: Senior healthcare equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JNJ	67.75	0.87	1.30%	3.97%	4.58%	5.48%	2.03%	9.93%	7.45%	1.83%
UNH	53.42	0.40	0.75%	3.39%	9.15%	12.58%	1.62%	9.33%	-0.71%	12.18%
PFE	23.39	0.10	0.43%	2.45%	-1.18%	-2.83%	-11.03%	0.00%	-14.39%	-12.59%
AMGN	55.49	0.70	1.28%	2.23%	-2.00%	-0.82%	-18.87%	12.31%	2.14%	-23.40%
NVS	52.84	0.05	0.09%	1.42%	0.44%	0.48%	-9.12%	1.91%	-8.01%	-9.24%
AET	54.92	0.07	0.13%	0.55%	0.99%	3.92%	28.08%	12.40%	5.49%	32.59%
BMET	45.99	0.06	0.13%	0.24%	0.31%	0.48%	10.90%	1.05%	8.47%	41.68%
DNA	74.99	0.46	0.62%	-0.13%	0.21%	-0.01%	-8.33%	2.42%	-4.51%	-7.10%
GSK	48.95	-0.33	-0.67%	-1.55%	-3.68%	-3.57%	-9.03%	-1.71%	-13.82%	-5.81%
BMY	27.79	0.04	0.14%	-1.77%	-3.77%	-5.22%	5.34%	1.53%	-7.61%	12.69%

Table 8: Senior financial company equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
LEH	62.38	-0.59	-0.94%	7.42%	3.76%	9.02%	-20.67%	13.94%	-14.96%	-17.85%
GS	225.25	-1.77	-0.78%	6.59%	-1.89%	3.47%	12.22%	32.62%	-0.82%	14.50%
MER	56.11	-1.19	-2.08%	5.33%	-2.04%	-15.32%	-40.06%	-21.12%	-39.33%	-38.39%
UBS	47.55	-0.20	-0.42%	4.07%	-3.49%	-12.78%	-22.54%	-8.79%	-25.27%	-22.21%
C	34.00	-0.58	-1.68%	2.72%	-9.89%	-19.74%	-38.46%	-28.50%	-38.08%	-32.89%
JPM	43.09	-0.44	-1.01%	1.84%	-0.14%	-4.29%	-10.36%	-5.23%	-18.67%	-9.95%
DB	123.48	0.45	0.37%	1.38%	-2.43%	-1.22%	-8.76%	-2.12%	-21.38%	-2.86%
CS	60.28	0.03	0.05%	1.23%	-4.33%	-8.39%	-14.02%	-7.69%	-20.80%	-7.83%
HBC	87.31	0.04	0.05%	-0.71%	-7.83%	-7.02%	-6.09%	-0.31%	-6.31%	-7.50%
MS	52.90	-0.37	-0.69%	-2.40%	-10.19%	-14.61%	-35.19%	-10.29%	-37.08%	-32.77%

Table 9: Senior technology equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
QCOM	41.36	0.55	1.35%	8.56%	0.05%	2.60%	10.41%	12.00%	-8.19%	9.42%
ORCL	20.80	0.38	1.86%	7.44%	-5.58%	0.24%	18.79%	8.67%	9.53%	8.90%
CSCO	29.94	0.64	2.18%	4.76%	-7.91%	-4.95%	7.93%	2.18%	13.07%	10.28%
CTSH	31.40	0.31	1.00%	1.98%	-23.23%	-21.54%	-19.24%	-16.13%	-19.18%	-21.73%
INTC	25.51	-0.02	-0.08%	1.43%	-4.81%	-3.00%	25.36%	10.43%	15.01%	14.24%
ADSK	46.41	-1.05	-2.21%	0.54%	-4.92%	-1.17%	14.42%	8.92%	5.96%	25.43%
INFY	42.15	0.91	2.21%	0.33%	-16.73%	-13.49%	-24.49%	-7.97%	-18.06%	-25.12%
SAP	51.24	0.60	1.18%	-0.60%	-3.77%	-4.33%	-3.68%	-0.70%	10.05%	-1.02%
ADBE	42.19	1.37	3.36%	-2.43%	-11.88%	-8.82%	5.69%	5.58%	-0.24%	0.81%
SNDK	37.36	0.09	0.24%	-4.08%	-15.91%	-12.53%	-10.45%	-27.62%	-15.93%	-19.98%

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	3.29	3.19	3.13	3.84
6 Month	3.42	3.40	3.49	3.99
2 Year	3.33	3.32	3.40	3.97
3 Year	3.24	3.22	3.36	3.99
5 Year	3.69	3.67	3.75	4.21
10 Year	4.16	4.14	4.22	4.55
30 Year	4.53	4.53	4.60	4.83

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.30	3.31	3.32	3.39
2yr AAA	3.29	3.31	3.31	3.41
2yr A	3.42	3.43	3.42	3.45
5yr AAA	3.43	3.46	3.43	3.51
5yr AA	3.46	3.41	3.39	3.50
5yr A	3.53	3.56	3.53	3.76
10yr AAA	3.82	3.86	3.85	3.77
10yr AA	3.77	3.89	3.89	3.75
10yr A	4.05	4.09	4.08	3.90
20yr AAA	4.48	4.49	4.47	4.42
20yr AA	4.67	4.68	4.67	4.62
20yr A	5.13	5.13	5.07	4.43

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.38	4.30	4.33	4.70
2yr A	4.59	4.56	4.49	4.85
5yr AAA	4.69	4.60	4.57	4.89
5yr AA	4.99	4.96	4.99	5.11
5yr A	4.83	4.86	4.90	5.14
10yr AAA	5.21	5.06	5.27	5.39
10yr AA	5.66	5.63	5.73	5.62
10yr A	5.68	5.74	5.79	5.68
20yr AAA	5.58	5.65	5.63	5.80
20yr AA	5.79	5.79	5.89	5.99
20yr A	6.04	6.10	6.05	6.14

Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance.

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
TLT	92.41	0.13	0.14%	1.18%	1.50%