Moin from Germany,

just from the ECB news conference

Some members wanted a hike.....

That is really surprising and is sending the $ lower and Gold higher.

But i assume we will soon see a rising gold price even in the face of a stronger $.

With all the major central banks now in a easing mode and trying to reflate it shouldn't´t make any difference what the $ is doing..

At least in theory.... :-)

Q..

Which source of RSIs is being used?

I have RSI from Stockcharts, Google RSI tool, the RSIapp from Korvus,Investor Tech...

all different..

Which source is being used?

Posted by: golfer at December 6, 2007 9:24 AM

Q..

Which source of RSIs is being used?

I have RSI from Stockcharts, Google RSI tool, the RSIapp from Korvus,Investor Tech...

all different..

Which source is being used?

Posted by: golfer at December 6, 2007 9:24 AM

Once again, thank you to all those who participated in the Skype streaming testing yesterday. Everything seems to be been working fine. Thank you for the feedback, please keep it coming.

Those wishing to join today's session, please send a chat message to user 'nexalogic', if you did not already do so yesterday. We are assessing bandwidth usage today, so the more users we have the better. Thank you.

A lot of the small guys won't be around either.
Employment in the Service sector(like Finacials)
has gone up for the last 30 years reaching 84% of total emplyment.
The Relative price inflation favoring services is starting to subside and this will lead to job losses, putting the US economy in danger.
You can see this graphically in "The Service Economy Peril"

Does increased "Skyping" mean less discourse here?

Cara 100 Update:

Another DNA downgrade from Outperform > Mkt Perform @ Leerink Swann.

golfer, no, not at all. The skype system is just for streaming to users, not from users, it's a 1-way street (at least for now). All posting must be done through Bill's site. Thanks.

Hi!

What have I missed: is skyping on already?

Will that substitute the discourse?

Bill:

Thanks for update on RSIs.

BMD-

fwiw-

Dec 06, 2007 (M2 PRESSWIRE via COMTEX) -- International Stock Targets has announced a "Strong Buy" recommendation along with a one-month and six-month price target for our newest "Stock Target". Please note that the following is an investment opinion issued by International Stock Targets. For full details on this equity visit the attached link and we highly recommend that all interested small-cap investors contact phone one of our representatives toll free 1 866 657 3334 to get access to our "small-cap" stock pick of the year. International Stock Targets has also added Birch Mountain (BMD) to our "Speculative" stocks to watch list, their recent market activity has made them a possible candidate for a full analytical research report, to see a sample of our newest report view this link http://www.internationalstocktargets.com/December_2007_Target_Report.pdf

assuming access to target prices will require more resources (or resoucefulness) than i'm willing to part with/able to summon this morning...

Has Elvis left the building?

Re RSI:
golfer, The data I use in the Google RSI Gadget (www.bitdrip.com) is grabbed from yahoo historical prices. When I created the tool I checked the values it generated against InvestorTech and the Korvus tool and they were pretty spot on (not off by more than .1). Since then, I believe Korvus has changed the way his is calculated (with input from Bill). One thing to remember is that RSI values will change depending on how much historical data is used.

On a related topic, would the community be interested in me putting the RSI Gadget on its own page so that it could be easily used from Blackberries, iPhones, and other smartphones?

Re RSI

Also don't forget that Stockcharts back adjusts most of their historical data for dividends, so their RSI calc's are based on slightly different data.

But for example they don't do it for Canadian income trusts, I guess they can't figure out which part is a div and which is return of capital.

This is one feature of Stockcharts that I wish I could turn on and off.

reposting Telestar's link to the washintonpost.com article from last night comparing the current "credit bubble" to 1929:

http://tinyurl.com/2zyqmg

first two sentences resonate: "It was Charles Mackay, the 19th-century Scottish journalist, who observed that men go mad in herds but only come to their senses one by one.

We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen."

from a retrospective (often historical) viewpoint, many "realizations" seem to occur in this way->what is obvious after the fact (or should have been obvious to anyone with "(un)common sense," finally plays out the old-fashioned way, along the lines of 'if it's too good to be true...' denial can time (and a lot of psycho-portfolio-therapy) to unwind...

Mortgage delinquencies reach 20-year high.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aalYt3UzOuLU&refer=home

And the market remains distracted by Bush/Paulson bail out and pending Fed rate cuts.

"...denial can TAKE time..."

Yaba, right on. The Wall Street world is a sick system full of conflicts of interests that look at the little people as fish food.

The Kass article is a validation of the sharks we swim with on a daily basis in the stock market.

HOKU 207,642 block share trade @12.03.
10 day vol = 2,999,906
90 day vol = 1,172,555

UNG catching a bid->jan 35 calls up to 3.30...

bwl and Quasi:

I understand what you are saying but my Q is which data are you using to make your decisions as to the zones and the alerts?

Yahoo? stockcharts? ????

NG inventories released, down 88 billion cubic feet (Bcf) from last week, UNG up 3% (go UNG go, if it goes up my gas bill is free this year.)

this week: 3,440 last week: 3,528 Diff: -88

Golfer

I use Stockcharts, easy to plot monthly, weekly, daily data. But its also a mix of RSI, other indicators, market conditions, news and of course gut feeling.

WAG flashed a buy alert on the Lorvus RSI 12-5-07 @ 36.46.

Bill, this morning I am having a hard time interpreting this comment from todays commentary...

"Some might say that the current enthusiasm for stock prices might send the Dow 30 level to 14,000 or 15,000 before the Bull dies. I have to agree with the possibility, but then I have already opined that we have been forced to become day traders."

In the past I believe your thought was the market has topped out, or was in process of. Are you stating that it's feasible that the bulls could push the ceiling up to 15k? Further clarification is needed on this point. Thanks.

UXG - just an opinion

I agree with Bill's comments of December 4, 2007 3:57 PM in regards to our meeting with Mr McEwen.

First impressions: When Bill introduced us to Mr McEwen, we got a chance to shake hands in our initial greeting. It felt like a handshake I could make a deal with. That is just how I felt.

Later with our group discussion at that crowded table, I did not get a buy pitch or any indication that if I did not buy I would miss out on a sure thing. I did appreciate this.

At one point in our discussion, Mr McEwen pointed to our tablecloth that had a pattern of circles on it. This is how the geologists are outlining (drilling) for the gold:

......... "." = drill hole that steps out from the last one.
..........
.......
......

This is what Rob said he wants to see from the geologists:

----.----. "-" no drilling
---X--.-o---- "X" drill where the probable gold is
--X-.---o------ "o" drilling showing promise
---------

I could sense his frustration with the geologists. He wants the geologists to think 'outside the box'. Don't be predictable by drilling the vein every x feet. Find the highest probable drill area and then drill. That is when the Gold Corp contest to find gold was mentioned by Bill (I think). I feel that Rob is in no rush to build a mine just yet. He does want to get on with the discovery of gold. I sense that Rob is not interested in putting a mine in the wrong spot on the property. And if he has to put in $1.00 to get out $1.20 to make 20 cents or 4 wooden nickels, then one might just as well buy treasuries. I am willing to give this project the time to put in $1.00 to get 3, 4 or 5 dollars out.

And when I left the show, I was not rushing to put in a buy order on Monday as I was of the opinion that more time was needed before a buy was initiated. Now, it has been a while since I have bought a stock (still mostly in cash). On November 16 I did step up to buy a small position getting a limit fill at $4.01 (this is the first time I have owned shares in UXG). When you buy a stock you start to pay more attention to it. I am surprised at how quickly UXG broke the $4.00 CDN support that I thought would hold. Initial mental stops of 8% and 25% on this stock were both taken out far too fast for any selling (I guess I froze - I don't watch the market during the day).

I am putting this latest drop to: the 12% fall in the canadian dollar, no (good) news, margin selling, year-end tax loss selling, junior mining stocks taking a hit, lack of buyers, the rising cost of exploration and development and now in hindsight, technical signals that spelt 'terror', well maybe - don't buy yet. And position sizing is important. The interest I earned in November will cover a third of the loss I took in buying early. If this stock was bought on margin, then those who bought at $6.50 CDN on 50% margin, just blew up the position and are now holding the stock with no equity. And maybe the holders will blame Mr X rather than themselves for the loss.

I just can't believe this stock is worth a dollar. I am sure that if UXG does not continue with mine development, the land assembly will be sold to one of the majors in the area and UXG will move on with another project.

On another thought, after meeting Mr. Cara and Mr. McEwen I would not want to work for them. They are great people but I sense they would kick my butt for my laid-back work attitude. If we spent a week with Bill, I think we would check into the hospital to recover from exhaustion (I don't think I could keep up with all he does).

Cheers to those who are working on the development of this blog. Your are true troopers for the rest of us. We will all be better in our abilities to trade prices with the tools you are developing. [025]

^^Korvus not Lorvus^^

From the Globe and Mail
Former Bema Gold CEO Clive Johnson is part of new public company B2Gold he and others have raised 100 million in an IPO selling 40 million shares at $2.50 each.
Of course Mr. Johnson and other executive and board members were able to buy 50 million shares at .02 each. Yes the article states 2 cents.
Thats what I'm looking for , the company is just of the ground and he has made 125 times his money. He defends this action by saying , they are not allowed to sell any of these shares for 18 months. Obviuposly Mr. Johnson has never heard of the phrase "paid for results" He wants to be paid for his past results..

S&P got rejected off from 1490 once so far today. It looks like it's gathering steam right now for another try at it. I still think this is all a trap to lure people in. If it doesn't close above 1490 today, with Bush and Paulson supposedly announcing their "grand plan", then I'm going aggressively short near the close.

It's also interesting that I don't see any news articles about the super SIV collapsing but the news outlets were sure pumping the rationale and plan when it looked like it would take off.

Good luck out there everyone.

Rob.

Re credit and HB&B, i also have to wonder about their solvency when they all but try to throw free (for the time being) money at me with their credit cards and credit lines. As Groucho said, I'm not sure I would want to belong to any club that would have me as a member. These banks don't seem to have learned their lesson yet, in my opinion.

I was *thinking* alright....about how smart I was going short into December and trying to put a bandaid on it when I read this nice quote from Colin Twiggs report today:

" I was bearish in a bear market. That was wise.
I had sold stocks short. That was proper.
I had sold them too soon. That was costly.

~ Jesse Livermore in Edwin Lefevre's Reminiscences of a Stock Operator (1923).

Interest rates cut by Bank of England to 5.5pc

By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 3:00pm GMT 06/12/2007
Millions of homeowners have been given a welcome early Christmas present by the Bank of England, which cut interest rates today from 5.75 per cent to 5.5 per cent - the first time it has cut rates for two years.

http://tinyurl.com/2gqs3a

test

Craig,
I'm FXP @$72 and change... I'm not sure I understand JL's quote, but I think I'll take consolation in it for today. Thanks?

Taking a conservative defensive beginning position in the Swiss company Nestle (NSRGY.PK), the largest company in the world in its class. I'm gettin stoggy.

Great piece for our world community to read.
(I think)

The conspiracy theory
BY DR MOEED PIRZADA (Pakistan)
6 December 2007

IN PAKISTANI collective consciousness, not a leaf dares tremble without the permission of either the Army or America. Together they share Allah’s sovereignty from the edges of the Arabian Sea to the mountain passes across Khyber, and beyond. Sometimes there are doubts as to who is closer to God Almighty, but such disputes are usually settled quickly.

http://tinyurl.com/2frne4

Jaketh,
In essence, we were wise, proper, and early.

Took a starting position in EWZ Brazil considering that they seem to be one of the best run countries in the world at this point. All of the luck seems to be going their way.

Good day all!

Two things. I own DUG at $42.50. You would think with the drop in oil and nat gas that it would impact producers stock prices negatively yet DUG continues to fall. Go figure.

Secondly, I recently found a fund offering in my wife's 401K through BB&T. It is called Union Bond and Trust Stable Value. They list no prospectus on the website nor is there a ticker.
I finally got BB&T to give me the finance statement. The fund contains lots of bonds from companies like: State Street,Lehman, GMAC,Fannie Mae, AIG Wrap Funds, GE, UBS Wraps, JP Morgan Wraps, IXIS Wraps, Freddie Mac pool(s), Bear Sterns, etc. you get the picture.

My thoughts are that they hope greater fools will put their money into this fund. I'm going to write my wife's company's benefits manager and alert them to this fund. I think these are the same CDO's, SIV's etc. that are all over the news.

Scott

DNA
Avastin (#2 revenue maker for DNA) is approved for colon cancer treatment. The FDA panel recommended that Avastin not be approved for treatment of breast cancer as the documentation did not show an increase in life expectancy but did show that it prevented the cancer from getting worse. Many analysts were caught on this as many buy recommendation were out there.
ANYWAY - stock drops from 73 to 66. M-W-D rsi(7) is 26-18-11 and the hourly is at 9. I will probably nibble when the hourly rsi(7) goes above 30. Comments welcome.

The home builders are reacting as if Bush/Paulson are going to bring back the heady days of 2004.

I'm seriously considering reloading shorts on these stocks.

UXG falling knife or bottom?

I added some yesterday at $3.11 ("averaging down" LOL). Also watching RBY for an add.

Mainly sitting on 25% cash and watching my belly button.

Anyone like RBS here? Sort of contrarian play.

Q. Wouldn't rising food prices be actually bad for companies like Nestle? (Hershey was closing factories due to high milk prices). Conversely, raw food producers would benefit.

In the stock market perception is everything. I think what's happening is that big traders are leading the market up, hoping that we perceive "Goldilocks" to be back. You can bet that when they see us start loading up on long positions, they'll start dumping. No matter how rosy the perception seems reality will set in soon. When is anyone's guess.

My guess is that the selloff starts after the rate cut. Perception is everything. Right now everyone expects the rate cut and also expects the market to crank back to it's old highs after the cut. I think too many people expect the market to go up after the cut, so naturally it will fall.

Who will a rate cut help anyway? Subprime borrowers who have their rates frozen? Banks who won't get the extra interest from those frozen mortgages? Banks will get the extra spread but will it be enough to fill the gap? Exporters will be helped when the dollar drops to the low 70's but everyone else will be screwed, paying more for everything from overseas. So, who will get helped by the rate cut and why should the market rally after the cut?

Rob.

DNA - rating reiterations from briefing.com
thru my Schwab account.

BMO Capital Markets - Market perform
Broadpoint Capital - Buy
CIBC World Markets - Sector Outperform
Friedman Billings - Market Perform
RBC Capital - Market Outperform
Stifel Nicolaus - Buy
UBS - Buy
FYI only.

Futures:
Dollar, gold , crude and silver all up.

jaketh- consider FXP a hedge...keep position size manageable, then mentally set it aside into the "short perspective" fraction of your port and give it time->right now it may seem like it's "down so far it looks like up," but it may (IMO) turn out to be your best holding...

Profits before safety

Average of 13 miners killed every single day down the pits. 5,000 mining deaths reported every year. Guess where?

http://tinyurl.com/2qxzdq

Quasi:

"I use Stockcharts...and also a mix of...other indicators, market conditions, news and of course gut feeling."

Thanks... I also use a mix.

In my recent attempt to try this AZ, DZ technique I VOWED to stick with it for a number of trades I was looking at. Thus, I had to eliminate "gut feeling" (not to be confused with "blind faith")during this time period.

So far my gut wanted me to buy before the prices indicated a "buy alert" but I waited. The buy alert came and of course I had to be careful of whipsaw etc....long story short.. in the two trades I was going to make the prices took off like rockets and I don't chase rockets anymore.. that stuff that comes out of them can burn the hell out of you and I have the scars to prove it.

In this case, I have no burns but I still have the fuel.

Please understand that I am not being negative to the technique as I find it makes a great deal of sense to me. I am field-testing it.

Note: I never trust my "gut feeling" unless my gut has been well fed.

geckojb -

With a larger crowd opining on the rise of the Bear, we shouldn't be surprised that the market will attempt to frustrate the early birds and slaughter the last bulls with tempting mirages. Even Twiggs is slowly tempering his recent call for a bear market and looking at a possible (yet not probable) Phase 3 run-up explosion to the skies (is Dow 15K high enough a top?).

What if this Santa Claus market bores through S&P resistance into the 1500s and complete the right shoulder on lightish volume of a clean (algorithm-friendly)technical head-and-shoulder pattern with neckline around 1400 and head 1575. Bear first stop when the line breaks sometimes next year 1225/1250.

JML

Bill,
Any thoughts of putting any of your hard earned capital into George and Hank's system of limited returns for five years?

Where will the liquidity come from to fulfill their grand scheme and who will be stupid enough to provide it?

I bet the Democrats will want these loans underwritten by Freddie or Fannie too.

Unbelievable.

stktrader

I have spent time in Brazil in the last three years. They are a well run resource economy that is benefitting from the softs and ores boom, thanks to China. At night, noone drives in Rio, and if they do, do not stop at traffic lights. Sao Paolo, about the same. Withing the past year, both cities were in anarchy for about a week, as gang leaders ordered an insurrection from inside prison. There are beautiful places there, and many beautiful people - however, it is a social tinderbox, with an overlay of tranquility induced by export wealth.

Si02,
I bought 25 shares of Nestle today at 119.91. as a starting position on its way to a 15K usd position. I will buy down from here slowly in 25 share increments. I find that having a small position is a good way to keep up with the company at the beginning of accumulation. As far as the cost of ingredients, Nestle will do as all food companies will do and that is to package finished products in ever smaller quanties at the same price as the previous edition. Nestle is in the process of engineering themselves into the higher end line of discretionary products and healthy choices along with a new CEO. They are improving on margins and lowering costs to gain at the bottom line.

Bill, liquidity or solvency? I have read cogent analysis that postulates concern with Citi's survival if they brought their level 2 and 3 to their books. Methinks, everything happening in the news and in the market the last two week is an attempt to save Citi. I do not like them, and Stanford Weill got Spitzer to order a staff attorney in the room when Sell Side speaks to their analysts. Methinks that is a joke as well, Elliot should have had outside council there, but he aws trying to save Citi. They were and are, all and one, still trying to save Citi. Let us see what happens when the HELOCs, the credit cards, the car loans, then the commercial and private equity loans start coming home to roost.

Stktrader Si02 is correct IMO. Raw food producers are the place to be. They pass on their costs to semi-finished food producers who in turn pass it on to the Nestles of the world who are the finished food companies.

Checking some notes from an early November Don Coxe telecom showed:

Raw food +26.3 price increase YTD

Semi-finished +16.9% price increase YTD

Finished + 6.7% price increase YTD

The Nestle type companies at the end of the chain will encounter difficulty passing all the increases in the pipeline along to the consumer IMO.

But this also means we’ll all be paying more for food and dairy products. I recall the Dean Foods (another example of a final food producer) CEO said something like this is the “perfect storm” for companies like his. Nestle is a great company. I just don’t think they’re in the right spot right now.

Just my 2 cents. That’s what makes markets.

Si02,

"I bought 25 shares of Nestle today at 119.91. as a starting position on its way to a 15K usd position. I will buy down from here slowly..."

Some clarification please... If I am reading you correctly you believe that the price will go down and then you will buy more.

If you believe it will go down why are buying it now?

Top CDO Classes May Lose 80 Percent, Barclays Says

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9h3FZsrhiJ0&refer=home

How many of those are insured? LOL. I am surprised MBI is still worth $3B market value.

Volume has dried up here. No one wants to buy at this level or they are waiting for Bush's awesome terrific plan to keep people paying no matter what until they drop.

HB&B/Christmas:
No matter how you dice it, all of the spin between now and December 25th will be positive to keep the retail purchases moving positive. I would expect to hold stocks until that date. The sell off will happen after the 25th. The gift cards will already be purchased and the online sales will have taken place. That is what powerful institutions will demand. After that all bets are off since "they" will be going to Aspen, Vail, the Alps, and Whistler, of course.

Bill thanks for clarification. I understand the need to be flexible here and nothing in life is certain. Your basic thesis that the patient is sick but can continue to pumped up with medications for a while longer rings clear.

I must say though that a pump up to 15k would be one heck of a melt up in the face of what is supposed to be uncertain economic times and corp profit picture.

DNA- taking january 75 calls at 0.40...(note that although the FDA has opted not to approve Avastin for use in breast cancer [at this time], it remains an established part of the treatment regimens for colorectal and lung cancer)..

beyond the ST: a concise and well-written article from the WFJ on the (negative) outlook for the drug industry:

http://tinyurl.com/22hyt2

golfer,
No one know the price tomorrow, but starting a very small position is a way to begin the process. I may be making my next purchase up or down around my beginning price. If and when the market moves lower, the world portfolio managers will have to stay invested. They are not allowed to be all in cash by nature of their fund requirements. Nestle will be a safe haven for them when they rotate out of current holdings.
Seamus,
Smaller packages. eom

Dell (DELL) announced a $10 billion share buyback ahead of the company's annual shareholder meeting Tuesday; consensus expectations were for an $8 billion repurchase plan. The buyback will begin this week; Dell will dip into the $13 billion of cash it has on hand. "This is a significant event, especially for....

Feel free to continue the statement...

WFJ=WSJ in above post

Thu Dec 6, 2007 12:37pm EST
Fitch lowered Block's issuer default rating one notch to "BBB," the second lowest investment grade, from "BBB-plus."

The ratings agency is keeping Block's rating on Rating Watch Negative, which means it may cut further.

http://tinyurl.com/3bsl2k

"Raw food +26.3 price increase YTD
Semi-finished +16.9% price increase YTD
Finished + 6.7% price increase YTD"

Why not buy the lowest performer? Less room to move down? Lower risk?

Aren't commodities a riskier play than the Nestles of the world?

"This is a significant event, especially for...."
traders who are looking to short the stock?

December Gold up 7.30 usd on 319 contracts. Up 6.10 usd on 116 contracts for January. USD down 7 cents on 2983 December contracts. Crude up 1.10 on 168,419 January contracts. An interesting contrast in contracts traded as to prices that we see.

Re: Dollar spike

The U.S. buck appears to have completed an inverse head and shoulders, pointing to somewhat higher levels. If this scenario plays out, it would not be constructive in the short term for gold.

http://tinyurl.com/yppjwf

SNDK just jumped 4% in the last 10 mins on heavy volume and incresed option activity

Ron Paul's version of "Money for nothing, chicks for free".

http://www.financialsense.com/fsu/editorials/dore/2007/1204.html

Wow....my small cap techs and bios are all up 4-7%........more than offsetting my losses in SKF and QID.

Wonder what's going on?

"I still think the jury is out regarding the so-called democratization of Russia and the protections provided its entrepreneurial class."

To have freedom you first have to want it. To have deomcracy you first have to want it. I am not so sure the Russians, not to be confused with the Ukrainians and other ethnic groups of the former USSR, want these two bad enough yet.

As far as "protections provided its entrepeneurial class" doesn't the "Russian Mafia" take care of that?

AMNT:

Does anyone have info on AMNT?? Organic food cmpy. rumor of buy out ????

TIA

Bull Hunter:

Did we not have some discussion of this during the past couple of days...mine are up in the 20 to 30% range.

The shorts are running for their lives...

And to think just 2 weeks ago the world was coming to an end...

Looks like everyone is daytrading:^)

Re: Gold (for day-traders only)

Feb gold has broken its very-short-term (intraday) trendline, as has GDX.

BH- sounds as if you are now effectively managing your own hedge fund ;), and of course, all long/short funds will (typically) always have positions moving in opposite directions...

StkTrader - Brazil

What Calvino said is VERY true. Brazil is a mixed bag. Lula suprised Wall St. by following orthodox economics. That's easier to do when global demand for your products is exploding. And Brazil has the benefit of a diversified set of products. They dominate world export markets for coffee, sugar, orange juice, iron ore, beef, frozen chicken, and have a huge part of the global soybean and cotton markets.

Brazil's energy policy has been a super sucess, achieving energy self-sufficiency even before the recent massive offshore oil find. Also, on AIDS, their policy has been super effective. They have faced down the drug companies,and gotten reasonable prices on retro-virals.

They have some of the best big businesses and businessmen in the developing world. But they also have the most IRRESPONSIBLE politicians. Lula's team has had many scandals. People in Brazil regard the political class with contempt. As Calvino said, drug gangs have incredible power in Rio and Sao Paulo. (They mandated a day-long shutdown of all shops in Rio a year ago, and made it stick.)

Brazil's income distribution is among the most unequal in the world. Despite Lula's creative subsidies to families which keep their kids in school, poverty has not been anywhere near eradicated.

But, Brazil and its people are fabulous: charming and industrious, and know how to cope with a level of chaos that would overwhelm North Americans.

Brazil's economy is on the top of its game now. But watch your positions there, because Brazil's down cycles are brutal. And there will be more down cycles.

FWIW

Pursuant to recent conversations regarding "gold" investment vehicles secure from authorized seizure:

http://tinyurl.com/2htke3

... regarding ECB's interest rate decisions; inflation remains the lesser of two evils from the standpoint of political expediency.

While deflation beats you over the head, inflation sneaks up behind you to pull the rug out from under your feet. Aint stagflation wonderful!

2nd,

The BH Hedge Fund. I like the sound of that.

Unfortunately, it's more like the BS Hedge Fund. :^)

BTW, it looks like it's soon time to reload SKF. What do you think?

Regards

stktrader and Si02:

First, my apologies to Si02 (chemist?)as I should have addressed the Q to stktrader.

Second, to stktrader my Q was not about the rationale for starting with a small position but the sense I got from your post was that you felt its price was going to be lower relatively soon. If that be true then my question remains...why buy now?

Hank keeps giving him a look that says "this guy has gone off the rails!"

Can someone please help me understand how after all the negatives I have pointed out, that HRB has remained in positive territory? Option One is a prime participant in this subprime mess.

Do they have some gigantic good news such as a takeover bid for the entire business?

What else can be keeping this thing propped up?

golfer,
I do not have that opinion on Nestle. But I would assume that I have not caught a bottom.

i missed it but i am sure it will be on all over youtube very soon.

The 2007 Hope Telethon is in full swing.... :)

Would be funny if it wasn't so sad.

Paulie, yer doin' a heckuva job.

Wonder who wrote his speech?

Long R.

Some one was asking about DNA. The stock had a breakout beginning in May 03. If one calculates Fib price lines a 50% retracement will come in at around $57. This price area should attract some traders.

DRYS hit its 50% retracement a few weeks ago and bounced. The method has merit.

There is a book out called “The trading rule that can make you rich” by Edward D. Dobson which is basically about buying such retracement.

Basketguy

"Looks like everyone is daytrading:^)"

This may not be as "smiley face" as it seems.

It is my belief that there are MANY, MANY more "daytraders", "weektraders" ie short term holders relative to the past... say than when I went thru that late 90s and early 2000 hectic period.

Combine these with the MANY, MANY individuals who are managers of their own investments compared to the recent past.

Add to the numbers the fact that most of these are MUCH BETTER traders, investors than those of the recent past.

Add to the mix the fact that this is a happening on a global scale.

I believe Bill mentioned that there are ALREADY over 100,000 members of this blog alone...how many other such blogs??? I get a weekly newsletter from John Maudlin which in the short space of a few years is now sent out to over 1 million subscribers all around the world.

The market may still be the same in that THEY can still "fool SOME of the people some of the time but they can't fool all of the people all of the time."

The difference may be that the number of SOMEs is getting smaller and the length of time that we are fooled is getting shorter.

Funny stuff happening with West High Yield (WHY) today. Price rose 22% on only 10,000 shares to .34 and has since fallen to a loss of 11% at .25 on 180,000 shares. A 33% swing.

AZM.V = Azimuth Exploration

up 20% today on 47K shares.No news. Is that OUR doing?

stktrader:

Ok...I misinterpreted your post.

All those eyes that say they are not lurking here...at the HB&B are watching Bill's Every Move..:^)

BUYIN AZM....

A great discussion going on with Kathleen Hayes on Bloomberg on Bush's plan.

The simple truth is that the problem will be resolved when housing prices once again reach affordable levels.

I guess it IS us with AZM ....

Let's not drive the price through the roof just yet! LOL

Don't Ignore the Market
Quint Tatro Dec 06, 2007 9:20 am

The simple fact is that the market is acting well in the extreme short term and while it doesn't mean we're out of the woods we must stand up and take notice.

We find ourselves at an inflection point where just about every piece of news imaginable indicates that our financial markets should be falling lower. The mortgage mess is just starting to heat up while the credit crunch is in full swing. Despite some improved retail numbers the general consensus is that the consumer is strapped, gas prices are high and inflation for everything except what the government counts in their basket of goods is ramping. Yet despite all this the market is actually starting to rise.

Most traders will clearly be scratching their head over this dislocation while others skip the scratching and move straight to pounding, choosing to fight the tape and its ascent. While it is always fun to debate and form one's own opinion regarding the macro outlook, the simple fact is that the market is acting well in the extreme short term and while it doesn't mean we're out of the woods we must stand up and take notice or at least give it the respect it deserves.

http://tinyurl.com/2fwqwa

Don't know if anyone took the trade I mentioned last week, selling XOM and buying CVX as a pairs trade. The trade was to scale into a position for a 2 to 3 dollar credit and unwind the trade when they traded at the same price. Trade should be exited now-CVX is trading higher than XOM-the edge no longer exists.

Optionoracle, did not take the trade, but really liked the concept and monitored the trade.

Thank you and all others for sharing.

I realize that Hilary Clinton doesn't seem to be much loved at billcara.com but, wasn't it refreshing to hear her take shots today at the banks and Wall Street for the subprime mess and the credit crisis?

ALOHA !!

USSA vs USSR
It is difficult at best to compare Russia and the USA. The USA due to its "reserve currency" status has a distinct advantage over many global countries but that can cut two ways. I am sure that if the shoe were on the other foot that Americans would more resemble Russians and their plight. The shoe isn't though and Americans do not and have not known true chronic "suffering" in many, many decades now.

The USA or USSA is closer to the USSR in more ways than one when it comes to US government and the leaders in charge over the past fifty years. Socialism is ramping up in the USA not down. I am always constantly amazed that almost nobody knows or remembers that the USA did not start as a "democracy". Mob rule(democracy)was not the first choice of our Founding Fathers. As the decades wear on dependance on the US government grows more not less. That is "socialism"! You can list just about any and all small or large US corporations and even private ones that are fed revenue derived from the redistribution of wealth from the US Taxpayer. The entire US economy depends on consumer debt and the US Taxpayer is the ultimate "lender of last resort"! Tax revenues run the US government and all its failed policies both domestic and foreign and the time is coming when there will be a squeeze on taxpayers that ends in US government default. People can spin that any way they like and think that banks or the FED will save the day or that George Bush will announce the golden goose, but I see no end to the tax burden on average US citizens who are "productive"! The tax burden on Americans grows larger(read the Bush FY 2008 Budget)and our government will try every way they can to sustain it even if its citizens are tapped out! Voting Dem or Rep will not make a difference in terms of "less taxes". We are beyond the point of no return on that issue! Once the bank liquidity wave runs its course the next wave of babyboomer liabilities will hit our shores. Of course the massive debt wave yet to be felt, the "War On Terror", will also hit the US government and its dollar like a sawed off double barrel shot gun blast to the gut! Printing money is the only way out and in the long run that isn't even a way out! The US government has been riding the "reserve currency" long coattails for sometime now, but like any free ride ... it ends! Maybe Mexico and Canada will have to put up a fence in the end! What goes around comes around ...

BUSH AND PUTIN
In terms of Bush and Putin ... I have to say that is like choosing the lesser of the two evils! Neither of the two leaders allegiances lie with the "people" they govern. As a Vietnam era kid who stood up against the war yet followed the letter of the US law and registered for the draft dutifully, I resent the fact that Bush got a free pass into the National Guard. In essence he "STOOD DOWN" when his country asked him to "STAND UP"! Who's kid died in his place? He deffered to his family and that is what he has been doing ever since! He is a Daddy's Boy of the first order ... It was commonly known in those times that if you wanted to avoid going to the front lines of Vietnam getting either 4F or the National Guard was the best way to go. Of course Cheney took the 4F route and who's kid died in his place? In terms of character both Bush and Cheney are weak at best. Frankly, I'm not sure why either one is saluted by the US Military! In 2000 neither Bush or Cheney ran on their military record ... I do not trust Bush and Cheney any more than I trust Putin! I find it incredible that Bush and Cheney followed the same lame track that the British took in the 1920s and that Russia took in the 1980s ... both failed and both went broke. Not even Bush's Dad wanted to go to Iraq during Desert Storm ... There is a "babyboomer mentality" now present in the White House and Congress that is based in priveledge and abundance wrapped in "status" and that is dangerous to our future. There is a time when priveledge and abundance must give way to humility and scarcity and after that "status" will be a word in Websters. Only then will Americans know what Russians know ... Corrupt US monetary policy is swiftly beating a path to that door!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

Anyone have any thoughts on Saskatchewan Wheat Pool Inc. (VT)and SWPOF on US exchange.

Long SWPOF

Telestar3d,
I love Viterra (Sask Wheat Pool) long-term. I think that agriculture is a great investment at the right price. Right now however, I'm hesitant about paddling against the current with anything.

I have been up to my eyeballs in projects, from important stuff to simply trying to figure out why a lamp continues to burn out. I think I have gotten caught up.

Made another long trade today off of the comment this am; "WAG flashed a buy alert on the Lorvus RSI 12-5-07 @ 36.46."

I believe in the Cara trading method and WAG has been profitably traded by myself in the past. This trade goes against my views looking months out.

Long WAG and DOW (still).

IMO, liquidity is expanding in time to support this market very short term just in time to "support" the new "bail-out" plan. Decembers have been good long trades in the past and I wouldn't be surprised to see a rally (squeeze those shorts Paulson) into end of the year with gains being taken the 1st trading day/week of 2008. This is pure speculation of course. Individual portfolio decisions must be made by all.

For those who were able to watch Paulson today, did you see secretary Jackson in the background? The shorter bald guy with the mustache? Notice how every time Paulson was asked to explain how this wasn't a hand out to people who took too much risk, and a slap in the face to those who were conservative with their money. As Paulson talked off subject about the macro view of the whole situation, the guy behind him would tuck his head and smile with a small laugh, while at the say time shaking his head no. That is one a major 'tell' used by police investigators to recognize when a person is telling a lie. Sad how they continue to try and pull the wool over our eyes. Learning how to read people has helped me understand what is going on in the markets as much as any financial book. I wonder how this will effect the stocks such as HRB. My take is that either they will tank next week after some hard hitting q&a during the conference call or (and more likely) they will be able hide the train wreck that is coming for a few more months. I have a small Jan Put in case of the first and will dump it that day if the stock starts to move up but will add more puts after the fed cut run tops out, probably at the end of the month. How long can they hold a skunk before everyone notices the smell? I'm not sure, I think everyone has a sinus infection!

Jock, yeahhh. make that around 31% from the first post. Not chasing but nice endorsement. Kind of surprised no one else has mentioned it.

I bought some AZM yesterday. Pump it up!

Dog and Pony Show

Bill,

I agree that a large part of the total credit bubble is being overlooked. Just look at world libor rates.

According to Paulson, the government intends to intrude into valid mortgage contracts, changing terms in mid stream. So much for a free market.....more like desperate banana republic policies.

The Bush administration has bailed out HB&B After reaping billions in fees and commissions in creating their liar loan debt, they now get bailed out for these failed loan policies. Truly disgusting and immoral behavior by banks and lenders with complicit government intervention.

African American Sec of Housing delivered the socialist nanny state political address. He spoke of the heartfelt definition of the home and neighborhood and how the administration cares for all the individuals who should have never been extended credit in the first place.
Sending the message that there is no need for personal financial responsibility is disgusting
and contrary to the American way.

Easing FHA rules and requirements is more of the same....lax loan policies are what created the original problem. Typical government hypocrisy. Lets remember how we got here. My dog could have gotten a loan 2003/2005. Ditech saturated the TV with ads offering 125% to value mortgages. No income verification, no doc,no fees,no down,etc. ........ a process reflective of the three monkeys....see no, hear no and speak no.

Paulson is claiming government intervention is necessary because problem too big for private parties to fix. Hillary wants 5 billion in aid to foreclosed homeowners....asked where the money would come from....she hesitated and said "from the budget" "from emergency spending fund".

We fought the USSR for 50 years,now we are becoming the USSA.

Anybody on the skype trial? doesn't seem to be active after 1 long post ...

Reference agriculture—raw-semi-finished discussion

Keeping it short, I view the fundamentals for raw food like this.

Expanding middle class in China and India demanding better food & meat and having the means to purchase.

Bio-fuels throughout the world (in U.S. more corn planted, less soybean & wheat)

Booming production this year to meet demand despite high prices. Little surplus.

Last time I looked at futures, most of the agriculture product prices were holding up.

Overall weather conditions have been good if not perfect in some areas (U.S.) We haven’t had a bad weather year affecting crops in something like +20 straight years.(Yes, there were drought conditions in Australia)

FWIW, Jim Rogers claims these commodity booms last something like 8-15 years on average.

Now if the facts & conditions change, I change, but not yet.

I still don't see how this "freeze" plan will help anyone currently. If someone can't afford the real interest rate on their mortgage now then how will they be able to afford the real interest rate 5 years from now. Also, getting preferential terms from the FHA and Fannie and Freddie will only encourage more people to behave irresponsibly to get the "special" rates. The telling line of the speech is here:

"The hope is that the five-year freeze will buy time for the housing sales and prices to start rising again. Such a rebound would enable homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments."

Refinancing into fixed-rate loans is the only lie in that statement. What they really want is to buy time for housing prices to rise so borrowers again have a positive LTV ratio and can once again use their house as an ATM and support America.

They also want to buy time so people will realize that these SIV's and CDO's really are worth at least 90 cents on the dollar instead of 27 and 25 like we've seen recently.

The main problem, as I see it, is what about the people who played by the rules? What about the people who got a house within their means and didn't invest in CDO's or SIV's?

What we're saying to people now is take any risk you want, overextend yourself as far as you want, and Uncle Sugar will come to the rescue and change the game for you at half-time.

Nice lesson and nice respect for the people living within their means and nice respect for companies not selling loans they knew were bad.

It's no wonder people lose their integrity and values in this society when we're rewarded for overbuying and then rewarded for not paying.

I don't care if the dow goes to 16K. I'm happy to sit in cash during this bull____!!!

Rob.

A FEAST FOR THE EYES????

The US sub-prime crisis in graphics The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.

http://tinyurl.com/3xmyfc

A FEAST FOR THE EYES????

The US sub-prime crisis in graphics The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.

http://tinyurl.com/3xmyfc

The Long version of Fitch downgrade of HRB.
(yet the stock is up?)
http://tinyurl.com/36bdvl

The ratings downgrade and Rating Watch Negative status reflect the following considerations:

--Uncertainty surrounding the ultimate timing and net proceeds of the company's intended divestiture of its mortgage servicing business;

--Increased leverage resulting from the losses in H&R Block's mortgage origination business with Fitch estimated total debt to EBITDA of approximately 3.3 times (x) as of Oct 2007 versus 2.6x at the end of fiscal 2007 (April 30). Fitch estimates adjusted leverage (total adjusted debt to total operating EBITDAR) to be 4.6x as of Oct 2007;

--Reduced liquidity due to the nearly fully drawn credit facilities and a $500 million bridge loan which matures in December 2007, partially mitigated by Fitch's belief that the company will receive an extension for the bridge facility and is expected to generate strong free cash flow of approximately $2.0 billion during the April 2008 quarter;

--A new chairman and interim executive team with the potential for forthcoming changes in strategy including additional asset divestitures as well as capital allocation strategy;

--Potential liabilities resulting from H&R Block's significant participation in the sub-prime mortgage business including the potential for future lawsuits.

Watching the rally on the Bush/Paulson show in wonderment. Are investors really this stupid?

'Guess so. I also have to believe that hedge funds are mercilessly squeezing shorts today. What better time to do so when everyone is confused?

I can wait for the market to "digest" the plan.

"They" probably used extraordinary amount of silver bullets to rig the market today. Just imagine this HOPE lunacy followed by a market crash.

The other question I have about this plan is did anyone ask the bondholders who are holding the SIV's and CDO's what they think about this glorious rate freeze? I would think they would be pissed getting less in interest payments and getting who knows how much of their principle back. Sure the lenders are happy as well as the borrowers but any bondholder has to feel doubly screwed now.

Rob

number2son -

Bonus are being paid out through next week, I guess. So watch for traders to justify their exuberant pay-outs. BTW, I would think that a whole lot of hedge funds were squeezed out of their financial shorts today.

JML

Seamus,
The idea of a global middle class in emerging countries is impressive and compelling. Got to be a volatile theme going forward. There's going to something along the way to throw cold water onto thesis.

I really wonder how they are going to deal with foreign ABCP holders. "They" can't force them to amend the contractual terms legally.

For those who follow Nouriel Roubini,he thinks intervention is a good thing and is highly critical of those who believe intervention is a wrong headed policy.
He says: "One thing should be clear at the outset: investors in these assets will be much better off with this proposal rather than the alternative of letting millions of homeowners default on their mortgages." and "only folks who are so blinded by their free markets fundamentalism and opposition to any government intervention in market failures would be so obfuscated by their ideological blinders that they would realize that this plan –however modest and partially faulty and incomplete – implies a better market-oriented resolution and much lower losses to private investors than a disorderly and “mission impossible” case-by-case workout of millions of actual or threatened mortgage defaults. Systemic market failures and crises require systemic response where governement resolve the collective action problems of individual creditors rushing to the exits and causing a disorderly workout of severe debt problems. This mortgage disaster is a case where sound public intervention is necessary and desirable."

His complete blog @ http://www.rgemonitor.com/blog/roubini

NYUGrad,
I agree with everything you're saying about HRB. They will fall soon. I'm betting on the 11th when the rose-colored glasses come off. Look at FNM and FRE today up over 8% even though they're bankrupt. Look at MBI up 8.68% and CFC up 16% even though they're bankrupt.

This rally is all manufactured to suck in the suckers who believe the line that all the problems are over. You hear the talking heads everyday saying how much of a "buy" the financial sector is now and how "undervalued" the financial companies are. Someone please tell me how Citi or CFC or FNM or FRE gets helped by this plan. When you really think about it how will the borrowers be better off?

If they pay the low teaser rate for 5 years that's great but there's one problem: the monthly interest they are paying does not equal the current monthly interest due and so that interest gets added to principle. Now they owe 300K. In 5 years they'll owe 340K. Doesn't sound like help to me. And how will that help the lenders who still have to foreclose eventually and then take more of a loss in the future than they would now?

I'm not buying but I'm not shorting yet either. Tuesday will be the big day.

Rob.

hello all
http://tinyurl.com/29fh55
re bush bailout: "S&P said later that, by fixing rates at lower levels, the agreement will hurt the value of securities backed by mortgages."

Have we gone from the Goldilocks economy to he Alice in Wonderland economy?
Headlines:
Mortgage Rate Freeze Reached
Stocks Up on Growing Hopes for Rate Cut
Home Prices May See 3-Year Fall: Morgan Stanley
US Home Foreclosures Hit Record High
Oil Prices Jump on Iran, Dollar

2nd;

Thanks for the perspective, but I'm dumping the stuff as soon as it hits $100.

astral25 -
As much as I respect N. Roubini analysis and forecasts (and I read it on a regular basis) I could not disagree more on the methods he suggests (wordwide rate cuts and now bailout). The problem is that intervention he proposes is not going to help the least bit, moreover it will actually make the situation much worse. Say bye to secondary mortgage market. Say yes to lawsuits of the century. Say yes to massive fraud in bailout program. I am not even talking about ultimate archetype moral hazard. Total disaster. I still cannot believe someone in his right mind came up with this.

Rob I reloaded on 11 put contracts $20 strike, for several months out.

"I can wait for the market to 'digest' the plan."

Posted by: number2son [TypeKey Profile Page] at December 6, 2007 4:00 PM

...and for most of us, that's probably true...

i want to cut to the chase here, though, which is to offer some updated advice for those who may be holding and the waiting reminds you of an airport lounge where they keep pushing back your departure time-

options are available on some of the ultra-shorts (eg, QID, FXP)...lowering your basis (by selling rolling covered calls), for example, can help the wait...i remember a stretch in the nineties when INTC was getting bashed, and it took months for the price to recover- that strategy generated cash every month for almost a year...not minimizing the body blows, but be aware of ways to mitigate the pain...

ALOHA !!

SUBPRIME BAILOUTS
The problem with government intervention is that it sets off reactions that are negative and unintended and unforseen. The crafters of this legislation to save the "sub-prime borrowers" are all about politics and nothing about reality. The basic reality is that "GOVERNMENT IS THE PROBLEM"! How can problems be resolved by problem makers? This is the basis of reality our Founding Fathers arrived at in order to chose a path of "LESS" government. We are now reaping the rewards of "MORE" government.

Like dominos ... once you push the first one over it starts a cascade of falling that cannot be stopped until the last domino has fallen. I consider the BUSH PAULSON bailout the BIG PUSH of the first domino ...

FROM THE KING REPORT:
From The King Report late last evening:

Reports have Bush/the feds instituting a 5-year freeze on select subprime ARMs today. The freeze reportedly will apply to mortgages issued between January 2005 and July 2007. FICO scores will be used to determine eligibility…Reports say proposed Democratic legislation to remedy the subprime mess induced Bush to act. When one is devoid of sense and stones, he can be forced into destructive acts.

December 6, 2007 could be a day that will live in infamy due to the federal intervention that abrogates and alters the terms of financial contracts. It is a craven exercise in crony capitalism and select socialism.

Few people have taken the effort to cogitate that federal interference in the markets via a freeze on interest rates is an abrogation of a contract. This should be chilling to anyone that holds a US bond, especially foreign holders of US debt. They will realize that they could be targets of demagogic intervention in US financial contracts if or when economic conditions worsen.

With a stroke of the pen all US debt maturities could become ‘perpetuals’ or non-redeemable or infinite maturities. Or coupons could be lowered…PS - The US government operates under the assumption that all of its debt is perpetual and never has to be ‘paid down’.

HISTORY
The "British government changed the coupon twice, reducing the interest rate from 3% to 2.75% to 2.5% between 1883 and 1907…

"After the Napoleonic wars were over, there was a flurry of capital raising in London in the 1820s. As the British government converted its debt from bonds paying 5% to ones paying 4%, then 3%, investors sought higher yields, and between 1818 and 1832 twenty-six foreign governments floated issues in London. When foreign governments began to default on their debts in the 1830s, new issues ground to a halt and were few and far between until a new wave of issues began in the 1860s when foreign bonds began to flood the market again.

You can be sure that if Bush or Paulson or Congress alters the terms of financial contracts there will be litigation by investors. And if the investors lose, look out for a bond market collapse!!!

What does this intervention say about capitalism and free enterprise in the US?…

Kaimu and others,

You might be interested in the posting about the rate freeze on the Calculated Risk blog. It appears that servicers will be able to honour the terms of their trust contracts; if there are restrictive clauses not permitting modifications in the case of forseeable default, they can opt out of the plan.

This plan is as close as it gets to a government default event for foreign investors.
And also get this: you need to have FICO *below* 660 to *qualify*:
tinyurl.com/2uy2oq

Article on TSE: GBU and KRY frustration in permitting.

KRY is getting offers from other mining companies to buy the fleet of mining and earthmoving equipment the company has sitting on docksides in the US waiting to be shipped to Venezuela. Interest is the tyres not the machines.

http://www.miningmx.com/grnbk2007/706770.htm

**********************************

In the never ending ETF arena: Van Eck is now offering municipal bond ETFs

Re: Bush bailout, I guess that a FICO score of less than 660 is no longer a measure of credit worthiness but is now an indicator of limited mental capacity and these people need to be protected.

Ultrashorts QID, SDS, TWM had huge moves in the last minute of trading. If you want out of your shorts, tomorrow may give you an opportunity.

You're right on Bill!!

If this was such a private initiative with no govt money then we should have seen the heads of Citi and Countrywide and Bear and Goldman(maybe not since they're now government too) announcing the plan. It should have been led and inspired by them and not Bush/Paulson.

Here's what I think the Government is saying to the world with this plan

"Borrow more than you can afford and don't worry about the consequences, but make sure you don't pay all your bills on time, or we won't be able to help you. And for all you SIV holders who were expecting more interest, we'll give you whatever we think you deserve."

With this kind of thinking at the top in our government, I'm glad I'm not holding billions in treasuries because you know for a fact that eventually we'll hear

"We're only paying you the interest you deserve."

And what will the bondholders do then?
Who will buy bonds tomorrow?

This truly may be the domino, like Kaimu says.

NYUGrad
I'm glad you're with me again. I have 10 Jan puts at the 15 strike. And am thinking about getting more Monday.

Rob.

even if it's "private money" backing the rate freeze, is it not the Fed which will make it possible (or palatable) by keeping a lid on rates? might that be one reason the markets rallied on the news? if i were a lender willing to fund these loans at teaser rates for 5 years, then what's in it for me? there has to be some kind of assurance by the government that i will somehow come out ahead.

Rob, NYUGrad,

I am with you, too. I started collecting HRB puts not long after NYUGrad brought up Option One. Of course, I was early. It will be interesting to see how this turns out...

bear case for china- brimelow out with an update from "prudent bear's" martin hutchinson:

http://tinyurl.com/2fzbpe

still don't "get it." five year rate freeze is equivalent to asking lenders to take a loss for the next 5 years, right? the last time a renter asked his landlord to freeze the 3-month teaser rate for another year or two, he probably got kicked out. so i'm not surprised to see government presence at the announcement- these private lenders did not have a gun pointed at their heads->the deal was negotiated to the benefit of all...

Mom&Pop Stuff:

During the ‘News Hour’ TV program on PBS (the Jim Lehrer show) tonight when Judy Woodward was interviewing ‘Hank’ Paulson. I must admit that on more than one occasion my arms were raised to extend an arthritic single digit from a clinched fist. This was to exhibit the ‘International Distress Signal’ in a silent and futile protest to the sad state I find our nation and its leaders; who try in vain to apply a vivid shade of lipstick to a pig’s chops, and with a cocked head saying everything is just peachy.

Dear Bill & other friends,
I got 2 questions:
1.
When Bill mentioned this afternoon the whole crisis is not about sub-prime, it's about HB&B's liquidity & credit problem....HB&B just faked it as sub-prime crisis (:-) if I interpret it right...
Can you tell me how you dissect this BS? I assume lots of people here already know except some novice just like me.
2.
I notice Gold did not correlate with $USD and Oil these few days as what it did previously. When there is downside news for Gold (Oil drops or $ jumps), Gold did not decrease correspondingly. But when there is upside news like today, Gold jumps correspondingly. It seems Gold becomes more upwardly stable.
How can we explain this inconsistency? am I asking some stupid questions :-)
sorry...still a novice trader.

2nd,
You're right on. Don't you think it's interesting that one of the "benefits" of the Hope Program was to usher people into FHA loans. Just like Goldman, who started up a 2 billion dollar distressed asset buying fund, the government is going predatory now and starting up it's own in the form of extending people, who never should have gotten a mortgage to begin with, FHA loans. Hmmm... and who gets the house when the borrower defaults?? Hmmm...

Smells like fish to me.

And I really can't stress enough the truly ugly part of the plan is the behavior it will continue to encourage. As if we didn't have enough incentives to lie, cheat, and steal, already. Now we get the blessing of the Federal Government to break our contracts with lenders and bondholders.

Well, if I can break that contract then why do I need Auto insurance, someone else will bail me out if I need it. Why do I need house Insurance? Seems like a waste of money. And how about Health Insurance? The government will certainly step in to help me there right?

I think I'm starting to catch onto this plan!!

Northvan,
I'm glad you're with us. Let's just hope they're not too connected with Paulson and Bush. That's the only thing that could screw us now.

Rob.

latour,

I hope this helps.I posted earlier am but you probably missed it. I found it quite educational and very easy to get a grasp of the mess.

A FEAST FOR THE EYES????

The US sub-prime crisis in graphics The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.

http://tinyurl.com/3xmyfc

Posted by: moneygenie at December 6, 2007 3:54 PM

"And I really can't stress enough the truly ugly part of the plan is the behavior it will continue to encourage. As if we didn't have enough incentives to lie, cheat, and steal, already. Now we get the blessing of the Federal Government to break our contracts with lenders and bondholders.

Well, if I can break that contract then why do I need Auto insurance, someone else will bail me out if I need it. Why do I need house Insurance? Seems like a waste of money. And how about Health Insurance? The government will certainly step in to help me there right?

I think I'm starting to catch onto this plan!!"

Posted by: Finger Lakes at December 6, 2007 8:51 PM

Finger Lakes,

The PLAN my friend is to create the ultimate powerless class. How else can Power be maintained?

to: moneygenie
thanks so much for the info.
you're great!

isaiah- (for your eyes only)

not going to let pride get in the way of honesty- i don't know about you, but i'm having a very difficult time gaming this market, where paradox does not begin to describe the reactions to news flow (did the market really rally today on a 'bailout?'- the only 'good news' this afternoon was for certain mortgage holders, which (IMO) means 'bad news' for everyone else, which includes the capital markets...assuming you're out on an (ultra)short limb, this market action has to be wrenching...let me offer the following thoughts:

a) some wrongs can't be righted (and to borrow a phrase from bill's opening comments: 'first, do no harm')- some moments when lost are gone forever, and i don't want to see you lose the opportunity to exit with a painful yet reparable loss...

b) what if you take the hit? sometimes, in retrospect, what masquerades (momentarily) as 'defeat' may eventually be recalled as a tactical success, leaving you ready to fight another day...

i really don't know where the market goes from here (although i've clearly been wrong about direction the past 5 days)...if you read craig's link to colin twiggs this morning, he now expects the S&P500 and DJIA to retest their previous highs (pretty big change in wording, IMO)...the past 5 days has also basically erased the entire 7% or so i made on the short side, so psychologically i'm at a market juncture of my own->however, a few days of trading in/out of the same ETFs could make up my(/your) losses, and at least for me, taking action sometimes clears a path for me to follow (sort of like the act of getting out of bed on a slow day->one thing leads to/builds on another, and by EOD you're caught up on all your projects...just options to consider...hope all is well (otherwise)...

jasper- the biggest winners the past two weeks just may be the fence-sitters...not sure why i'm thinking of you ;)

Sign of the times, perhaps? I'm told they pitch this to you as you can make money off the second as a time-share or rental property. Or maybe they mean a "community home" as well as a residence for all I know, the website doesn't offer much in the way of details.

http://housingdoom.com/2007/12/05/las-vegas-two-homes-for-price-of-one/

Bill,

There is one aspect of the mortgage default situation being dealt with by the Hope Plan that seems to be ignored - the differentiation between mortgages on owner-occupied property and mortgages on vacant ( speculative buy ) properties. I have read that as much as 20% of California purchases in 2005 were speculative with homes remaining vacant and ready to be flipped for the expected higher value on re-sale. Whatever plan evolves, it should only apply to owner-occupied properties. The speculators need not apply, IMO. Speculative properties would see prices come to earth soonest and this would buy time for the entire market to restore itself. It could take five years or more to clear away the deadwood and everyone holding property is going to feel some real pain before it is back to good health.

latour,

you're welcome !! Here's another link when you get through the other.

Where is Debt Being Stuffed?
Mr Practical Dec 06, 2007 8:52 am

Due to too much debt, financial engineering has had to create new and better places to stuff more and more debt.

As the markets seem to want to be relieved that global central banks have the “liquidity” problem under control, let us Minyans remind ourselves of the magnitude of the problem.

I have described just how central banks inject “liquidity” into the markets when they need it. Essentially central banks encourage debt creation, for people to borrow money, so that they buy things (consumption) to spur the economy. But due to too much debt, financial engineering has had to create new and better places to stuff more and more debt.

http://tinyurl.com/yolc5m

1-800-BAI-LOUT?

Probably german, but it just came to mind...lol.

2nd,

sorry, but I peeked. I'm doing the same kind of thing except not brave enough to venture into ETF. I noticed ABX & KGC have fairly profitable daily swings.If push comes to shove I can hold them.

Issaiah, in august I took a big hit and recovered nicely trading gold swings.But be careful and stick with the big guys. I wish you would just say hello. You're not alone you know. I still have some FXP but I plan to sell it tomorrow if this rally holds. jmho.

Bill if this kind of talk is inappropriate please delete. Thank you.

Your Home Not Selling? Swap It
By Suzanne Barlyn
Special to TheStreet.com 12/6/2007 10:10 AM EST

Can't sell your home? Then trade it.

For those who are stuck with a house that just won't move in the current market, an extreme option is emerging: swapping the property with a seller in same position.

Home swapping, a practice that has appealed to vacationers for decades, is now being pitched as a strategy for unloading a house for good, especially at a time when buyers are hard to find.

http://tinyurl.com/38esxw

2nd, Isaiah,
It's better to be solvent than right. I got out of QID yesterday with a small profit and part of FXP with the better part of November's trading profits attached. Held SKF figuring "how could these pigs rally?" and found myself in a Livermore moment.

I can't get a feel for this market except for what seems too obvious, no real dip in gold and we're headed for what appears to be a certain fed funds rate cut. Could have loaded up on gold twice near 770-780. I'll nibble a bit if it comes back to me. So how does USD rally here and gold go down? If the fed doesn't cut, OR cuts only 25 basis pts and aims more at the discount window. Or if the cuts are large and finally signal the size of the problem to the street. Afterall, the street has been rallying and employment (oooh, we'll see about that tomorrow)seems to still be good (?).
It's all TOO good.

If I didn't know better I would think Hank and the Hoover administration were trying to lead me into a trap of Bernanke proportions next week. Except we know who's side they're on so we know where to line up for now. I don't think their team loyalty holds past the shipping deadline for last minute online shopping for Christmas.

I'll sell the SKF in the next two days (Friday/Monday) as I don't want to hold a ultrashort financial *if* the fed cuts.
I expect I'll get more chances.
Seems like there might be a good shorting opportunity in the builders when the euphoria wears off.

Traded INFY a couple times the last few days and reloaded a 1/3 position which I'll hold for now. Also MU for a few bucks which I'll reload if I can.

Just dinking with a few longs with stops once I'm enough above cost.

To: moneygenie
thanks a lot...that's another great info.
I know some people blame those Quants to design those toys and toys become crises.
But how about their boss who approve it?

Here is a Kondratieff Cycle report that’s somewhat dated and seems interesting. I just printed it out and will begin reading.

http://tinyurl.com/25hjqg

GFI, Gold Fields on sale this morning, more than usual, but golf prices above 800. ANyone know what's up? Long, GFI

gold prices, NOT golf prices! of course those might be on sale, too ;-)

Good Morning.

Here is your 8:00 EST Cara 100 Update:

Upgrades:

ATVI - to Buy @ Piper Jaffrey
JCP - to Overweight @ Lehman Bros.

Downgrade:

TGT - to Neutral @ Banc of America Sec.

-------------------------------------------------

New Zack's Research Report on BHP:

http://tinyurl.com/2hrm6b

Have a great and profitable day.

Good Morning.

Here is your 8:00 EST Cara 100 Update:

Upgrades:

ATVI - to Buy @ Piper Jaffrey
JCP - to Overweight @ Lehman Bros.

Downgrade:

TGT - to Neutral @ Banc of America Sec.

-------------------------------------------------

New Zack's Research Report on BHP:

http://tinyurl.com/2hrm6b

Have a great and profitable day.

Sorry for the double post.... Caught in server error.

g034,
Do you think there is anything to the fact that

your 1-800-BAI-LOUT --> (800) 224-5688

is the number for "Bad Boys Bail Bonds?"

http://www.badboysbailbonds.com

where their motto is "Because your Momma wants you home"

Bull Hunter:

it may have been a "server trap"

Mortimer: What's the number?

TimG - LOL, they picked a great phone number! The motto's pretty slick too.

Regarding up/downgrades; many analysts will lower their earnings estimates a couple times before their downgrade (or opposite for upgrade). Their institutional clients know that and will anticipate a change before the public knows. I've always thought of it as a whisper to large clients before everyone else knows.

Bottom line; if you have an "important" stock in your portfolio, you need to watch the earnings estimates closely and if they change and the chart changes simultaneously, you may need to take action before the actual up/downgrade.

Hope that helps.