Citigroup Posts Record Loss on $18 Billion Writedown

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8i0wTCvSsvo&refer=home

This establishes a new low water mark for the havoc the housing mess is playing with the banks and the economy. The disaster at this bank is spectacular in its awfulness. And more is yet to come.

2nd, Isaiah,
Looks like we might be starting a new trading range for FXP. Starting the day at $163.

Bill, Many, many Thanks! Yesterday's daily warned us again and reinforced your previous warnings about HB&B.....so yesterday I held my SKF ultrashort financial ETF and added at the close. Also kept the QID (into Macworld?).

Looks like you and Meredith Whitney are on the same yellow brick road. She's calling for more losses for C in the next three Quarters.

Good luck to all today. Looks like we see 12,000 minimum.

Yes, more is yet to come.

"a large increase in credit costs in our U.S. consumer-loan portfolio."

Tears on Wall Street

Bank write-offs, some of US$15 billion and upwards, are expected when fourth-quarter earnings come out from Wall Street this week. The big question is: Where will the horror end. The answer: Not before the landscapes of Wall Street and the City of London have been transformed beyond recognition.

http://www.atimes.com/atimes/Global_Economy/JA16Dj01.html

18B!!

That's Citigroup's annual earnings. Apparently the market was actually too optimistic about C and other investment banks.

My overall results last year were flat in my RRSP and main cash account. ( I did a little better in my trading account). Disappointing, but understandable due to my bank exposure. My largest position in my cash account is CIBC which I bought years ago in the low $30 range. I was happy to be selling calls when the stock was at $100, but I feel like I have been raped. I thought about selling when the stock started to drop, but haven't used the trading disciplines I have been learning here in my 'buy and hold' accounts. My thinking at the time the stock was at $100 was my net of tax and commission proceeds would be about $86 - and with only $300 million (that is what I remember the original disclosure was), why would I sell. With each new disclosure I have understood that management has not been truthful, and now with the issuance of new stock to big players at 10% below current market, which is already more than 30% below the peak, I think what is happened goes beyond sharp practice and into the realm of fraud.

Sorry - I meant to say $300 million in subprime exposure.

2nd/Isaiah,
QQQ's/QID, AAPL sell off after today's anoouncement. I don't think we see a big push or support for the Q's from AAPL.

Hi,

Have you ever witnessed the liquidation of a multi million Euro large portfolio on a margin call? This morning I have watched as this was done, and here is how it works:

The client was warned yesterday to add a significant ammount to the account in the next 24 hours. As that did not happen, the account executive requested and was granted a liquidation permit.

With this executive order issued, the order is immediately routed to the money desk.

The portfolio starts being sold immediately with a brutal sequence of relentless sell orders at best market price.

As the orders are executed, the trading desk adjusts the size of the needed order in order to quantify the level of liquidation.

Every asset class is sold. The lousy, the bad, the reasonable, the good, and the great assets all go out the window. There is no discrimination as to what should be kept.

All asset classes are affected.

Market prices fall, as the orders are pumped in.

Watching the process leaves you with the notion that carnage was done. It is very hard to see value being destroyed like that.

Enjoy your day.

Cheers,

isaiah- FXI 163->if you were less than thrilled with yesterday's profits, should be smiling at a brand new landscape today...and it certainly feels like one->problem (for me) is the time it takes to become acclimated...

Delta board approves merger talks with UAL and NWA. Talks will occur "simultaneously"

from last night
http://tinyurl.com/yusmms

from 51 min ago
http://tinyurl.com/yrfa3b

No official comments from UAL or NWA yet

Craig:
A question. If QQQQ and AAPL sell off, wouldn't QID go up?????

maromatics- thanks->maybe i'll stay off the tracks until the end of the day...

wavesmash->wondering if gold/miners go down along with everything else today...positive open on tap for HGD...

Ronbon,

Yes, QID aims to achieve results that reflect twice the inverse of the performance of the Nasdaq.

In reality, it seems to follow twice the inverse of the performance of NDX futures.

Keep in mind that these ETFs use derivative products which may not be liquid.

The question will soon no longer be Return on Capital, but Return OF Capital.

Cheers,

craig probably meant to type QLD while thinking about buying QID ;)

Ronbon,
Yes, just warning my friends that AAPL usually sells off after Macworld and that the Q's are already weak today. So they should be looking for set-ups to profit from QID.

"Mass Affluent" <-- Doncha just love it? Only in America can there be a demographic class that is market-designed to make a group feel good about being among the squeezed.

" ... James Selwa, president and CEO of Maserati North America Inc., said sales of his company's cars are continuing to rise, but noted they sell for over $100,000 and typically appeal to people who have more than $10 million in assets and are unlikely to feel much of a pinch in any economic downturn.

But he is now seeing signs of economic stress among people one rung down on the economic ladder -- a group he calls the "mass affluent." These are consumers who typically made money in the stock market's run-up in the 1990s, bought expensive homes, refinanced their mortgages and now are getting squeezed.

"They are feeling a lot less wealthy now," Mr. Selwa said. ... "
http://tinyurl.com/24wncq

Since I usually watch both sides of the action I list both sides. I usually put the Q's and QID together, XLF/SKF and FXP/FXI.

I never know what side of the trade these guys are on! I just send warnings or opportunities in case they miss them. They do the same for me.

Thanks, Craig and Maromatics. Went into the overnight long QID; your outlooks suggest more advance after the strong QID open.

2nd,

I was refirring to a portfolio in EURO which was liquidated this morning. It is over now.

My comment was only meant at offering some insight about things that are happening as we speak.

Cheers,

Maromatics, Ronbon,

RE QID,

Yes in fact the proshares product data for QID states it is Ultrashort QQQ and states the benchmark is the Nasdaq 100 index which is the $NDX. Same for QLD, benchmark is the $NDX.

Good Morning Casino Players.

Here are your Cara 100 Ratings Changes:

Upgrade:

STO - to Outperform @ Credit Suisse

Downgrades:

ABB - to Sell @ Citigroup
GRMN - to Perform(?) @ Oppenheimer
TOT - to Neutral @ Credit Suisse

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

Other Stocks of Interest:

AUY - target raised $16 to $17 @ RBC
HL - target lowered $12 to $11 @ RBC

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

Have a great ride.

Craig

I am so glad I closed out my FXI yesterday [THANKS 2nd for the nudge! ! !].

Do you plan to ride FXI up today at all? Then back overto FXP?

Isaiah,
FXI: No plans for either side. This is the usual support for FXI but this market is looking to do a swan dive so I'm not a buyer of anything until I see if we're Greg Louganis or a brick.

If we rally at some point there is plenty of time to get in. Hard to say the same when trapped in the down elevator.

Craig

Thanks

Good morning Bill and all and thank you for th eblog! The Citibank news broke at about 11 am yesterday, the cuts and the the dividend cut. I did not shed my shorts, on the basis of that news. It is amazing that the market went up, and who is controlling it, as seen yesterday.

Remember yesterday's market boost from the IBM earnings report?

A closer look by Everbank's Chuck Butler in the Daily Pfennig: "IBM's profits were goosed by the currency moves of its global sales... If you take out the currency component, IBM's sales increased 4%, not the 10% for revenues expected..."

Have some running around town to do this morning and will check in later in the day. Glad to be mostly in cash. Quarterly tax due today. Be careful out there.

2nd,
do gold miners finally give the hedge a chance to do its job?...my own plan was to hold the basket of juniors for a long time alongside majors and gdx. Then when gold miners retrace, the hedge will help smooth the ride as I unload the majors which I was a little light on not expecting this past move.

Makes me wonder that the old saw that simple is better, at least for me. Would have done fine just trading gld/gdx w/weekly signals. No bullion. No shorts. But I do enjoy reading your posts and the camaraderie of such.

Sold CVP @ 12.40 In at $10 on 12/27/07

I still like this company and will look to rebuy but don't like this market and am booking profit on my longs.

isaiah- leaning towards QID, but at this stage of the game, happy to sit back and let opportunities arise->seem to get at least one good one every day...

2nd

ME too........ FXI has been calling my name...but I put some cotton balls in my ears...Looks tempting being down so much.

maromatics- implication (on my part) was an expectation for more liquidations...fund managers often think alike, not sure margin calls of that magnitude occur in isolation...

Argus has research note out this am on RSI Buy Zone Cara 100 Bed Bath Beyond....

BED BATH & BEYOND INC. (NGS:BBY) ................... BUY
We believe that Bed Bath & Beyond’s top-notch merchandising, financial strength and reasonable valuation will help the shares to hold their own in what is proving to be a very challenging retail environment for housing-related stocks. Based on our analysis, we think the company has the opportunity to boost sales and margins over the long term, even if near-term profitability is likely to be constrained due to the housing slump. However, we believe that despite some housing-related concerns and the possibility of tougher borrowing conditions for some shoppers,
Bed Bath remains a financially sound and highly profitable retailer with a proven management team.

Down close to 3% now, anyone got the guts to step in to a retail name here?

NG down to 8.28. Can be an opportunity this week. It seems (to me) that this is going higher at least until Feb.

TSX down 154 at 13544.

Hi,

Most of the option volume on the short side is on the SPX is at 1.400.

They may ba squeezed by Friday.

Why is MA up right now??? Someone please short it.

calvino - Every time I say something like that to anyone else, I later regret not having followed my own advice! Oh, and it looks like someone just took your advice.....

QID- think we go down...two chips on the table..

Hi,

Added more March calls on the NDX, strike 1800.

We're right on the edge of 1390. If Craig is right about APPLE selling off after Steve Job's Keynote address, we could hit the circuit breakers today? What are they anyway? a 5% drop or a 10% drop?

Rob.

ALOHA !!

Been out of touch travelling here in Australia ...

I have never seen such a mining boom as I have seen here in Perth, West Australia. Construction cranes hover over the city too numerous to count. Advertising on TV for workers to immigrate to West Australia ... just about any warm bodies with a slight pulse being accepted! Real estate prices rising everywhere. A new train connection to Mandurah and growth is off the charts!

When I first moved to Perth in the 1970s people drove older cars and actually saved for purchases. NOT SO any more ... I hardly see any old cars on the road or any old homes. Seems like mini-mansions are the order of the day!

DOES THAT EVER LOOK FAMILIAR !!!

I got a tour of the SuperPit gold mine in Kalgoorlie which produces some 22% of the State's GDP. A huge open pit mine and one of many in the area. Average wages for mine workers is $120,000 to $130,000AUD per annum. Some work four days on and four days off ... some two weeks on and two weeks off ...

BROKEN HILL REVISITED
I am now doing due diligence on a couple junior miners in the Broken Hill mining region. Broken Hill as in Broken Hill Propriety or BHP!! This is where BHP got its start way back in the 1900s. I plan to write an article on Broken Hill later. I first found out about Broken Hill from the Indian Pacific train, which stops there. When the train pulled into the station the first thing I saw as I disembarked was a drilling rig from Bort Longyear ...

BACK TO PERTH
Last week I was at the Perth Mint and did a tour of the mint. Just AWESOME!! Held a 400oz gold bar and watched them pour 200 oz bars. I bought a couple natural gold nuggets, larger ones(15oz plus)becoming more and more rare. The largest being 35.25 troy ounces and 92% pure. The Perth Mint values them at $1500AUD per troy ounce. Bought at a 10% discount due to USD conversion and added GST refund.

I have a meeting with GATA and Straits Resources and Goldminco in Subiaco(Perth area)tomorrow.

We will be in Mandurah(south)over the weekend staying with friends. Time for some fishing!

I have another three weeks here in OZ ... It's all going by much too fast!!!

More later !!!

The Baltic Dry Index continues to tail spin. Down another 295 points to 7654.

Does anyone understand the plan for Quebecor World, IQW.to Currently, trading at 0.55. What are the chances of this stock recovering?

2nd,
TM at new low...don't know if you're building...

Maromatics..

I know you are overseas...Do you trade those NDX calls on a European exchange?

Nice to see quite a few doing well and helping each other !
Bill thanks for your efforts in sharing golden nuggets of information.

Has Bill's book come out yet ?

Perhaps HBB is losing control of the market? The financials were bought for the last week and the story spun that this is the "kitchen sink" quarter LOL.

The yahoo and stockchart feeds of the S&P index have both stopped at 10:45am 1387! Very interesting.

Basket,

I trade them directly with the market maker, which is Commerzbank. Could do the same with Citi.

This means that I can trade the US indices in EURO from 8.00 GMT to 21.00 GMT.

Words I needed to remind myself of this morning as I swung (swinged? swang?) back & forth between short and long positions.

"Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks. Then get out of all your stocks; get out for keeps! Wait until you see -- or if you prefer, until you think you see the turn of the market; the beginning of a reversal of general conditions. You have to use your brains and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy cheap and sell dear. One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in
the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent."

-- Jesse Livermore

Sold long-time underperforming ETF, AMO, which mercifully will cease to exist sometime this quarter. Hopefully, the fund manager will also cease to exist as an employee of Alliance Bernstein.

This ETF was a great idea but horribly mismanaged. The next thing I'd like to hear from the fund manager is, "Would you like fries with that?" :^)

11:00EST: Typical time for a reversal.

State Street (STT) has somehow been immune to the sub-prime mess, until today. Given its prior strength, traders are changing their minds. I have no position is this stock, but I'm starting to think of placing a short or put soon....any comments this stocks unbelievable prior strength up to yesterday?

Uh, excuse me Mr. Hunter, would you like to super size that?

Maromatics, that is really unusual....How do you work that trade? Are you your own broker?

Maromatics, each NDX 1800 Call is $16k? 156 times that is a lot of money being long.

Watching IQW.to in amazement. Wondering if we will see it under $0.10 today.

Keeping IWM puts.

Reenzo,

Not unusual at all here in Europe.

Actualy, the country in the world where these direct trading operations with market makers are more developped is Germany.

This is allowed by EU legislation which promotes free competition between market makers and regulated markets, and allows trades to be executed outside Euronext platforms.

Sio2,

I do not discuss ammounts.

The truth is that I am lonf NDX 1800 calls since last Friday, and have added today.

Good call, OG.

Thats it? 61.8 % retrace from the lows of 5 days ago to Friday's high?

Dang, got tied up and work and couldn't monitor the markets. Missed a chance to cash in some FXP earlier.

$4B of Citibank's loss was in bad consumer loans. This has spread far from subprime. Who will be next showing bad consumer loans?

onlineaces, thanks for STT, the "world's leading provider of financial services to institutional investors". If its customers are in such deep trouble, they can't make do too well in the future either.

Zenob - Time to give up the day job?

Looks like it's going to give me a second chance. It's inching back up towards that 85.50 mark.

Watching for an entry point into Javelin Pharmaceuticals (JAV).

Their Phase III intranasal morphine product could be a big seller among Wall Street bulls. :^)

Maromatics - thx for explanation....is this infrasturcture the reason, do you think, that EU and US options have different exercise rules?

Macromatics,
Is buying NDX calls the same as buying QQQQ calls? If so we're in the same boat. However, my expiration is FEB so I need the move up sooner than you. We just have to hope Steve Jobs announces something amazing when he starts speaking in about 20 minutes.

Rob.

Rob,

Yeah.

Cheers,

Reenzo,

I don't think so, but I cannot explain why that is the case. Sorry.

:-)

Reenzo,

I don't think so, but I cannot explain why that is the case. Sorry.

:-)

All,

Just checked the ammount of put options open over QQQQ, and it is insane.

Around 120.000 put options are open for Friday on the Q's between 47 and 50.

If the market does not fall below these levels today, the squeeze will be significant.

M: No worries, thx!

2nd...

Bear is growling again.

Hi maromatics, Is this the Commerzbank site? http://privatkunden.cominvest.de/index.html

I presume they do not have a site in English.

I am looking for a European brokerage (in English, not German) where I can open an account denominated in Euros and trade US options. I found gobulling.com but they do not allow Option trading, yet. Any suggestions would be appreciated.

Also, you said you could use Citi to trade. Do they have a site in English? Could you provide me with a link to their site? Thank you.

wavesmash- about time...

Here is a question for everyone's general commentary
re: Position Sizing

What criteria do folks here use to determine a position size going into a trade?

I am trying to come up with a strategy or two that work for me for both option trading, and for stock trading.

Keep in mind, I am not talking about what you plan to risk on a position (that would be your stops), but simply how big a move you make into a given market.

My account is a small one so, my current strategy is to take small option positions (5-10 contracts) on likely movers that I can afford to buy. However, I am finding that it is difficult to take profits and still allow myself the opportunity for my profits to run up.

I've read 1-2% should be what you risk, but (other than account size) what factors do you use to how much of a position to take?

Thanks in advance for your thoughts!

wavesmash- about time...

jragusa,

warrants.commerzbank.com

and

www.citiwarrants.com

By the way,

If you are looking for a top quality European brokerage enabling you to do all that, one of the best options is based in Luxembourg, and offers offshore trading in all relevant markets at interesting prices. They are very good.

www.internaxx.lu

Enjoy.

jragusa

Interactice Brokers (IB)-

I have just ACATed over to IB so I'm still new, but looks like this might be a fit for you.

TSX down 340 at 13,363. FYI

Reenzo,

Under these market conditions, I would advise you not to have a VaR higher than 10%.

The 10% @ risk should be distributed through several assets.

Bear markets are tough.

Bought some NOT at 3.61, also orders placed on UNG in the low 39s'.

Over the past few days I've started looking at the indicators MAM (Most Anchored Momentum) and CCI (Commodity Channel Index) and comparing to RSI. As I understand it, they are similar to RSI except RSI is limited to low of 0, high of 100, where MAM and CCI are not. This allows divergences to be seen sometimes at extremes. Gold, Silver, GDX, XGD.to and many of the major gold stocks (AEM.TO, G.TO, K.TO, YRI.TO) are showing negative divergences compared to RSI.

At this point, RSI is confirming with a sell/short on GDX & XGD.to as they drop through the 70 level.

SiO2,
I sold off my NOT shares since I can get exposure through PNP. Although Sprott owns a 11% stake as of the last reporting, Embry and one other fund manager at Sprott has talked negetively as to individuals owning a position due to its speculative nature. Some have speculated that they are doing this to aquire more shares at lower prices. That does not make sense to me. If one had 11% one would want higher prices, not lower. They could be the ones in concert with PNP doing the selling to lower their exposure.

I know a number of you are present or former owners of SLW. Anyone have an opinion OF SLW?

Thx a lot stktrader. Agree it's highly speculative, but you can greatly lower your ABC with this things by buying and selling it. I keep half of it, the rest buy and sell. Objective is to have ABC of zero.

Wow, AAPL falling hard. Also, BNN reports that motherboard inventories are very high in Taiwan.

One addition to Cara 100 Ratings:

Price Target Lowered:

DNA - $82 to $76 @ Broadpoint Capital

SLW -

One thing I heard is that they are low on cash - $3 million - and will therefore need to do a stock offering. Also, there was speculation that Goldcorp would sell some of their position in SLW.

They have a great business model though.

reenzo - Here's Jesse Livermore's take, not on position sizing relative to total portfolio, but on how to go about accumulating one's position:

"What I have told you gives you the essence of my trading system as based on studying the tape. I merely learn the way prices are most probably going to move. I check up my own trading by additional tests, to determine the psychological moment. I do that by watching the way the price acts after I begin. It is surprising how many experienced traders there are who look incredulous when I tell them that when I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all.

"It would not be so difficult to make money if a trader always stuck to his speculative guns -- that is, waited for the line of least resistance to define itself and began buying only when the tape said up or selling only when it said down. He should accumulate his line on the way up. Let him buy one-fifth of his full line. If that does not show him a profit he must not increase his holdings because he has obviously begun wrong; he is wrong temporarily and there is no profit in being wrong at any time. The same tape that said up did not necessarily lie merely because it is now saying NOT YET.

...

"In cotton I was very successful in my trading for a long time. I had my theory about it and I absolutely lived up to it. Suppose I had decided that my line would be forty to fifty thousand bales. Well, I would study the tape as I told you, watching for an opportunity either to buy or to sell. Suppose the line of least resistance indicated a bull movement. Well, I would buy ten thousand bales. After I got through buying that, if the market went up ten points over my initial purchase price, I would take on another ten thousand bales. Same thing. Then, if I could get twenty points' profit, or one dollar a bale, I would buy twenty thousand more. That would give me my line -- my basis for my trading. But if after buying the first ten or twenty thousand bales, it showed me a loss, out I'd go. I was wrong. It might be I was only temporarily wrong. But as I have said before it doesn't pay to start wrong in anything.

"What I accomplished by sticking to my system was that I always had a line of cotton in every real movement. In the course of accumulating my full line I might chip out fifty or sixty thousand dollars in these feeling-out plays of mine. This looks like a very expensive testing, but it wasn't. After the real movement started, how long would it take me to make up the fifty thousand dollars I had dropped in order to make sure that I began to load up at exactly the right time? No time at all!

"It always pays a man to be right at the right time. As I think I also said before, this describes what I may call my system for placing my bets. It is simple arithmetic to prove that it is a wise thing to have the big bet down only when you win, and when you lose to lose only a small exploratory bet, as it were. If a man trades in the way I have described, he will always be in the profitable position of being able to cash in on the big bet."

Current Reuters Headlines
(http://www.reuters.com/finance/markets):

US STOCKS-Wall St. sinks on retail data, recession eyed

FTSE slides 3 pct as Citi, recession fears weigh

Europe shares hit 15-mth low as U.S. worries weigh

Nikkei ends below 14,000, exporters hit by yen

HK shares hit 4-mth lows as HSBC, HKEx skid

I have started playing a few inverse ETFs recently that are working out well. However, a comment Maromatics made at 9:02 is a good reminder that these ETFs use derivative products which may not be liquid, and he made the point "the question will soon no longer be Return on Capital, but Return OF Capital."

I don't have a good understanding of derivatives, but reading between the lines it seems these ETFs could be vulnerable in a downturn if the next thing that unfolds is a meltdown in derivatives markets. I'm starting to think maybe cash is safer in this market. Any comments or explanations appreciated.

Can we stop with the Livermore quotes. He was a momemtum trader who took extraordinary risks; that is why he went broke. Buying stocks at "top price" is not a sane strategy.

S&P back above 1390. C hasn't hit it's 52 week low yet. Maybe it's bottoming. APPL recovering too. Remember the market looks forward. Where the market goes depends on if it thinks most of the bad news is out already or if more is coming.

Rob.

Absolutely.

What other financials are reporting this week? LOL!

I'm looking forward to that!

@nd, Isaiah, What up? Are you guys alright? What are you watching and where are we going?

The Livermore passage just reproduced was intended to illustrate one possible tactic for mitigating risk and maximizing potential reward.

One of the findings of those who employ artificial intelligence methodologies in securities trading is that, when a new high occurs, "expect more new highs." Hence, paying "top price" may be quite sane--provided one manages one's risk.

I find it useful to reflect on those aspects of Jesse's memoir (as described by LeFevbre) which seems pertinent to my circumstances. For example, his remarks re trading at limits, wherein he states: "When you want to get out, get out!" Failure to apply this aphorism to my trading has in the past cost me thousands as a succession of limit orders at progressively lower levels have not filled in a rapidly declining market.

As you find no value in that which I have to share, I suggest you simply refrain from reading my posts. Others--Isaiah among them, and perhaps 2nd as well--may feel differently. I will, of course, defer at all times to Bill's judgement, and should he ask me to desist, I will--instantly.

moab re: Livermore

Maybe the quotes only resonate with a few of us and mean nothing to others. However, of the 30 books I have on trading, etc., if I had to give away all but 3, Reminiscences of a Stock Operator would be the first one hugged to my chest. His trading style was unique and he was a plunger, but no one says you have to follow his methods to a T. As far as buying stocks at "top price" not being a sane strategy, that would about eliminate William J. O'Neil's CANSLIM method and many others that have been very successful.

I don't think Livermore's tactics mitigate risk sufficiently. Look at the charts for CROX and ANAD. They were hitting new highs repeatedly and opened up -20% one day with no chance to get out anywhere in between.

Bill's method mitigates risk as you stick to quality companies and buy them when they are already beaten down and starting to recover.

Apple just unveiled their newest toy. A super thin notebook called macbook Air. It's thin enough to fit into a manila envelope. I don't really see any kind of demand for this thing other then just to show it off to your friends. Not to mention how fragile this thing probably is.

Apple just unveiled their newest toy. A super thin notebook called macbook Air. It's thin enough to fit into a manila envelope. I don't really see any kind of demand for this thing other then just to show it off to your friends. Not to mention how fragile this thing probably is.

sorry for the double post. server went loopy for a minute.

Why the WIR is useful...it sets market context...thats Bill CAra's uniqueness.

Within that market context..we develop tactices to capitalize on trends or the tug between denial/hope and fear.

In bull markets..buy high sell higher.makes sense...in this market....little scary...its all about the market context...the other stuff...follows.

QID- exiting at 45.57...actually looks to me like it could have (much) further to go, but selling into current strength...

They are also getting into the movie rental business, which may explain the dislike of the news.

Time to get some cheap QQQQ calls strictly as insurance. The way it's going and with the "good" PPI numbers, rumours will start flying that rates will be cut intra-meetings, or that it will be .75% or something like that.

EEM - In a market like this, I think Jesse's approach would be the inverse: "Sell short low, cover lower."

How low can it go? Anyone want to put in a guess at what the close numbers will be?
This looks like capitulation to me.
NYSE 89%down volume 11%up volume
Nasdaq 86%down volume 13%up volume

Craig,
Good call on APPL. I should have listened to you instead of my APPLE crazy friend.

Rob.

OG..gotcha OG...you are right.

DJIA: 3/15/07...12100
9/07...12517

11/07...12786

Today....12555

we are getting close to the august intraday lows on the spy and dia...did the Fed ( private bankers as they are ) join Bush in the middle east on a job hunting junket?

ugh..looks like the PPT has been reading the posts here...market just spun around...

My thoughts are the market will continue to drop at least through Friday morning based on the plethora of banks reporting this week. I plan to stay short until then and look for a bounce late Friday or next week.

The financials are in dreadful shape and will report enough losses to stay out of prison but no more. Expect more.

12,500 close today with low of 12,100 towards the end of the week.

Just my crazy opinion but financials hurting much more than anyone (the market) wants to believe. The Citi 90 day deliquencies on mortgages and credit cards look like they are increasing almost exponentially in 2007.

Calculated Risk goes into detail on this.

I read these posts very regularly but dont comment very often.I am not a day trader. Agriculture stocks and companies are doing very well these days but I think there is one Canadian stock that is being overlooked in general. This is the company VITERRA (VT)on the TSX. This company was formed with the merger of Saskatchawan Wheat Pool and Agricore United in June 2007.
Their earnings come out this Friday 18 January and I anticipate a doubling in sales and net income.I am long this stock but please do your own due diligance.

2nd

Check out graph on FXI. I been playing the ups and downs all day. Not only have I been able to cash in on the ups but on the downs I got my cost basis down to 158.31

I'm strapped in waiting for this thing to bounce up at some point.
[stops are set !] :^)

BIG - Big Lots is, uh, up big today. +3.2%. On a big down day for the market. A clearance outlet. Has been a falling knife since October. Is there a message about the economy here?

FYI: I have a little ipod nano. That is my sole interest in AAPL...besides making some $$$ on it.

If it makes you feel any better I didn't even trade my own sentiment directly. I was using to guage QID but should have simply shorted aapl.

I need someone to trade for me on my sentiment!!!
I am alright on sentiment, just a lousy trader.

wavesmash- i've had limit order on HGD for 9.55 (8.99 entry friday), and it's been sitting unfilled for two hours...although it's spiked to 9.64 on high volume...

2nd...supply and demand....LOL!

A good idea, bad candidate.

Romney suggesting tax free savings/investment for those making under $200,000 a yr.

Scottraders...

Did your Scottrade system go down?

wavesmash- problem resolved->need to convert HGD quotes to UDS...

Isaiah - Still Running... no problems here.

wavesmash- problem resolved->need to convert HGD quotes to UDS...

looks like it might slide into the close. If it does, I'll likely sell my remaining FXP. I'm going to hold onto my SKF and enjoy the ride of bad news coming out.

Scottrade up for me.

FattyArbuckle

can you give me a FXI quote...my Scottrade is out

158.20

FXI 158.53

DJI just poked below the august 16th intraday low...

Scottraders

thanks....back up again

craig- only unloading 33% of HGD- fully expect to see it in double-digits soon, but money mgmt requires selling the position purchased last friday into strength...

FAIR ISAAC (FIC) DOWN ALMOST $6.00 DOLLARS TO $23.00 TODAY

DOES ANYONE FOLLOW THIS COMPANY??
AND IS THIS A GOOD ENTRY POINT FOR THIS STOCK

ANY COMMENTS???

THANKS SV

isaiah- i'm in no hurry to buy FXI->it really is a different landscape today, and i can't say if it goes back up anytime soon...to be honest, still leaning towards a sell-off->HK and Shanghai have NOT yet sold off...

Life's too short not to be short. :)

This doesn't look like capitulation to me. CNH is up on the day and volatility is barely budging. We are a long way from panic. Why, I don't know.

Copper and oil are down 3%. Once gold starts falling you will hear traders talk in scared tones about deflation.

Well I hate to see what panic looks like then because it looks like wholesale selling to me. It always seems to go down more quickly and violently than it ever goes up.

Rob.

Slow and steady decline...

Don't want to spook anyone into selling...

HOPE...that's what the HB&B are holding onto, while dumping their shares left and right

It always does Finger Lakes. As I recall Bear markets typically take back 50% of Bull Market gains.

08/16/07 was a fantastic example of capitulation, IMO. The gates of hell were opening after 3:00, and then word leaked out about the emergency rate cut @ 3:30. Bernanke ruined my short.

EEMTrader - showing break of EEM below the descending triangle I mentioned the other day.

EEMTrader - showing break of EEM below the descending triangle I mentioned the other day.

GECKOJB: yes..i see it too..are you going to hold it overnight? More downside once we get this FED foolishness away ..

If someone just relies on an S&P 500 Index fund through a 401K or pension how are they doing now? What was the return on the S&P last year? 4% or so. On Jan 3rd 2007 the S&P closed at 1416. We're back to Nov 06 for people holding S&P index funds in their 401K's.
Talk about sucking!!

Rob.

Anyone holding anything over night?

careful of this silly rally though....eem just poped back above that support line I think...

EEmtrader - not a holder (personally) at this time. If I was I would be out, it's a clear sell signal...to me at least. I am waiting for it to come to me for long term entry after being out of it for past six months. Remember I am trend trading not day trading like you.

isaiah- not worth betting on the overnight action in asia->i would take the (small) hit on FXI...

Scottrade account shut down on me. Missed buying FXI @ around 157.35 wanted to ride it up and sell.

Need to change brokers.

stktrader...

Thanks for the heads up on pnp...

Wanted some more exposure to Not.v and I think this gives me that with a little less risk than holding the individual stock...

Seems to like to hold this 4.00 level and then POP.

Any guesses if gld sell off continues. In past persistent sell offs, it's the good stuff that gets used to raise cash, and then there's the central banks who might be selling?

Looked liko a bit of short covering a minute ago, and then back down...... last 20 minutes should be interesting today!!

GEckojb...thats right..getting slapped around today a little so acting silly...the components for EEM ..except for GAzprom...getting sold hard today...one trick to use with EEM...if you ahve scanning software..load the top 10 components that trade as adrs ..and use a breadth indicator....thats a good way too assess health...those intraday charts are useful too...better clue than the dailies...just sharing..

I've been short XAU since eod yesterday, and will hold that short overnight. I took this position because there were so many "tails up" days recently, along with negative divergence on RSI.

Biggest sale of something non-existent? It has got to be the lightbulb... which Edison announced over a year before he actually had a working one... and bought his way into success faster than you can say PETS.COM

"So what enabled Edison to start later, yet leapfrog his competitors to become known as the inventor of the electric light bulb? One explanation is that Edison was better positioned to exploit the capital markets at the time."

http://tinyurl.com/38xuag

Edison patented both the electronic voting machine & the stock ticker... probably two of the things that most affect the world today other than the lightbulb itself.

Ideas are worth way more than reality, as we can see with the current writedowns of mistakenly-overvalued assets.

Citigroup is down almost 8% today. Seems to be mirroring HGD.TO.

If Gold is as overvalued as it appears, what is a safe haven for inflation-proofing assets in this market?

Biggest sale of something non-existent? It has got to be the lightbulb... which Edison announced over a year before he actually had a working one... and bought his way into success faster than you can say PETS.COM

"So what enabled Edison to start later, yet leapfrog his competitors to become known as the inventor of the electric light bulb? One explanation is that Edison was better positioned to exploit the capital markets at the time."

http://tinyurl.com/38xuag

Edison patented both the electronic voting machine & the stock ticker... probably two of the things that most affect the world today other than the lightbulb itself.

Ideas are worth way more than reality, as we can see with the current writedowns of mistakenly-overvalued assets.

Citigroup is down almost 8% today. Seems to be mirroring HGD.TO.

If Gold is as overvalued as it appears, what is a safe haven for inflation-proofing assets in this market?

seamus: reversal in AVD...i keep hoping that this will be one of those late to be discovered ag stocks; the last one like this(late to the party) was LNN.

LOL! Biggest sale of something non-existent is shittygroup shares today!

"Biggest sale of something non-existent? It has got to be the lightbulb..."

No, it was Windows95, which was announced to be in its final development stage about two years prior to its release only to keep other software vendors from switching to OS/2 from IBM.

BG,
PNP owns 10% plus of NOT or did. If there is a selloff in NOT, which stock would you want to own? NOT holders lose, PNP holders win. I think that the NAV for PNP is around 3.60. Just a guess. Longer term with Uranium, PNP would be a hugh winner for todays buyers.

Intel getting hit down $3+ on in line to down numbers/guidance. Cisco down a buck as well on the news.

Intel missed, down 10% + afterhours.

QID from 45 to 47+.

Doesn't look good for the open but I'm sure it depends on Asia and Europe too.

stktrader,
Pinetree holds investments in approximately 110 juniors across several market sectors. I feel that if you're looking for a mutual fund of juniors then PNP is worth considering. As a proxy for Noront it's useless. If you're looking for an investment in McFauld's Lake then you buy one or more of Noront, MacDonald, Fancamp, Freewest or a half dozen other juniors active in the area. http://tinyurl.com/2nmo3v

GECKOJB: sorry couldnt chat more earlier..are you long EEM?

i have some research report on the top 10 companies in EEM if you would like it?

the markets are rolling over sector by sector and country by country...gold is the remaining hold out..

Dont see a poistive catalyst/driver for a sustainable upside, do you? There is an invese etf for EEM...

INTC down 14% now, and going. The funny headlines says "Intel 4Q Profit Jumps 51 Percent".

BTW, congratulations to those who bought HGD.

Hi Fred,
I hear ya. I do not know enough about the mining sector as you do, so PNP makes for a good investment at current levels for those that are not as versed. I like the fact that it has extensive exposure to Uranium as a sector group as well as gold and some base metals. The current price is getting near the NAV so the price is right. Earnings come out in late March. I like the fact that investor relations responds to call/emails.

I like the valuations of Intel, NVidia, Akamai and Cisco here. They're all market leaders with great long-term upside. Don't want to fight the tape though. Disclosure: no position any any of the three yet.

Coeur d'Alene Mines--I just read an article on Howestreet.com by Greg Guenther. He was really plugging this stock saying that its like Silver Wheaton in captitalization but way undervalued. Anyone here follow this stock or have any thoughts on it? Guenther seems to think most of the problems are behind.

Just bought some Valgold at .25. For the life of me, I can't understand why this stock is so low. Could Venezuela be the problem?

I agree with Moab on Livermore. I always find that it pays to wait until stocks that Bill likes fall to ridiculously low levels. Such has been the case with Khan Resources and Valgold. I noticed one that Kaimu likes, PMV, took a leap of 15% the other day, though it has since fallen back.

I also bought some PNP like stktrader on the theory that many of these stocks could go to huge multiples, though I don't know how that would feed through to PNP. Perhaps someone has some ideas on how to determine this. Anyway, now seems to be the time to load up on juniors.

Any thoughts on how far gold spot may fall, maromatics, Fransix or anyone else? I regret missing the whole 200 point move, since I was expecting it to retract back into the mid-700's and that never happened.

Looks like tomorrow will plunge hard. Nasdaq already down 1.5% more afterhours. Dow and S&P are down almost 1% afterhours. Tomorrow may be the panic day we've all been waiting for.

Rob.

stktrader,
I agree. Playing juniors sure feels like a craps game. I guess that's why many of us are playing price swings. Speaking of gambling, Melco, Las Vegas Sands, MGM and Wynn are coming back to those who want to be casino owners.

BROSSARD, QUEBEC--(Marketwire - Jan. 15, 2008) - DIAGNOS inc. ("DIAGNOS" or the "Corporation") (TSX VENTURE:ADK), a leader in the use of artificial intelligence ("AI") and advanced knowledge extraction techniques, is pleased to announce today that its technology will be used to target uranium on Lexam Explorations Inc. ("Lexam") (TSX VENTURE:LEX) joint venture properties in the Mistassini region of Quebec. The service and the right to use the targets provided by CARDS (Computer Aided Resources Software) are for a fee of $65,000 CDN and a success bonus of 100,000 common shares of Lexam.
http://tinyurl.com/3xpn5b

Lexam is owned by Rob McEwen. Rob also recently contracted Diagnos to help UXG find gold. Diagnos might be an interesting play. I'll do a little more digging.

auccourant,
How many are there of us who follow gold but missed the run?...personally. sold the few GG/LIHR shares today, holding hgd.to, and a basket of juniors.PDP is back under consideration....NLR, though, is sick. I do like to see some kind of bottom.

As for emerging, the decoupling expectation can not yet be ruled out. While EEM has fallen as much as .rua/domestic broad mkt it is still above 200dma. Next trend line support is about 10percent down. Time to safely hedge is past. When there less upside expected, the risk reward was better. I think.

It seems to me that traders reaction to the news is more important than the news itself. Intel is being killed for guiding lower. When individual stocks rise on bad news the bottom is likely in, but when they are killed like this there is likely a ways to go.

As maromatics illustrated, when margin calls go out stocks get sold indiscriminately and they get a whole lot cheaper than anybody expects.

A lone voice in the social equity wilderness, James Howard Kunstler, ponders 2008:
"The charade of permanent prosperity based on getting something for nothing is over. That sound you hear out there is reality knocking on the door. It has been standing out in the cold for a long time and it is not happy with us."

http://tinyurl.com/ytbndm

yes, tomorrow looks bad->get ready to go long (for a trade)...

Quote from Stratfor founder Dr. George Friedman - a widely read geopolitical analyst - he may be really reaching on this forecast.

"Beyond the tactical details, the bottom line is that most of Asia, the Arabian Peninsula and the United States have de facto merged into a single system of exchange that has become more important in purely economic terms than the U.S. relationship with Europe. Not since the heady days of the British Empire has a single currency held sway over so much of the world. Yes, these entities are diversifying their investments, which is reducing the value of the U.S. dollar vis-a-vis the euro, but the more important trend is the strengthening of the dollar's role as the reserve currency of the world - forming the base of the reserve economy of the world.

Combine weaker energy prices (which free up resources) with a lower dollar (which boosts exports) and the U.S. economy is primed for a strong performance in 2008. A brief slowdown in early 2007 shook out some inconsistencies that built up during the post-9/11 boom, and the stage is set for another extended expansion. [Emphasis added]

Many will mourn that the subprime lending crisis is about to cause major problems - and perhaps even a recession. Stratfor sees these fears as overblown for two reasons. First, mortgages that enter default are different from other defaulted loans in that mortgages have their own built-in collateral in the form of houses. Rather than getting back pennies on the dollar, creditors likely will recoup most of their money. This, combined with the fact that not all subprime loans will go bust, drastically reduces subprime's impact."

end quote

-- I wonder if the Barton Biggs "you will see massive short covering" quote from mid December may actually come to pass. Could the Goldies and others have set this "correction" up just so they have a lower base from which they can cover their shorts and launch a monster rally?

Or.... Am I dreaming?

Stratfor is still buying the spin that 'subprime is contained' when the consumer is pulling back and credit delinquencies are soaring across all consumer loan types, not just subprime? Not very intelligent.

Greenspan joins hedge fund Paulson
By Angela Monaghan
Last Updated: 4:33pm GMT 15/01/2008

Alan Greenspan, the 81 year-old former chairman of the Federal Reserve, is set to join the US hedge fund Paulson & C. as an adviser.

Dr Greenspan will advise Paulson on the global financial markets, and under the terms of the agreement he will not advise any other hedge fund while he is working for Paulson.

Paulson manages $28bn of assets and last year earned billions of dollars when it called correctly the collapse in the sub-prime mortgage market, a collapse which was caused by Dr Greenspan who kept interest rates too low for long, according to some economic commentators.

John Paulson, president of the hedge fund, said: "Few people, if any, in the world have the breadth of experience with, and depth of understanding of, global financial markets as Dr. Greenspan.

"Anticipating the direction of the economy, and assessing the potential for and severity of a US recession, are fundamental in formulating current investment strategy.

"Dr. Greenspan's position as chairman of the Federal Reserve Board for 18 years, through multiple market cycles, gives him a unique perspective from which to help our investment management team make critical decisions."

Dr Greenspan's salary for the role was not disclosed.
http://tinyurl.com/ypqlbf

Bill,
Would you ever open a venture like PNP where we could buy into miners/other themes that you choose?

Carry trade unwind.

“Tell” is NZD to JPY. Note Tuesday decline in chart.

http://tinyurl.com/2uyzyp

Yen at 106 handle right now vs. USD.

On another front--SBUX below 19 in afterhours. INTC now trading 19.40, down 16%.

Five more good years?
Come on, Bill, you have a lot more than that... and 'your not so good' years will be very well attended by many here I'm sure.
It is never too late to have a happy childhood... or to reinvent.

Lot's of differing views on where gold is going.

Bill: possible pullback.
Dennis Gartman: Gold rests here.
Colin Twiggs: http://tinyurl.com/7fw5r

I expect the miners and gold to pullback if the general market pulls back, but I'm trying to be mindful of the Fed meeting. But, as that crazy whack job on CNBC likes to scream, "They know nothing!".

"btw, Don Coxe of Harris/BMO started a general theme Fund, and I am studying the documentation."

Can you share the information with us?

Do you think tommorrow is the margin call day or is that still a few days off?

Thanks

Craig at January 15, 2008
"I expect the miners and gold to pullback if the general market pulls back"

I see know basis for that from what I have studied,to the contrary during the stagflation of the 70's the gold miner index went up by about 600% as the sm corrected in 73-73 timeframe (roughly)Even the more recent 200o top in the sm saw the hui appreciate 100's of % as the sm fell and the current monthly candles with uptrend break in the sm shows a very strong corelation to the same effect.

http://tinyurl.com/25zcpa
What do you see that makes you feel that way?

jasper- look forward to your posts as well...

glad to see you're holding HGD, hope to see the teens soon...

longs: LUV/WAG/TM/JOF/FJPNX->have to admit i bought them all (well, maybe with the exception of LUV) too early...if things don't improve tomorrow, planning to take a hit->can't afford to sit and watch (what may be) crumbling positions eat away at gains...not exactly the smallest of position sizes, but i've been trading in and out of them each day, so will be bailing with a decent basis on each...

isaiah- QID->thought about it in the final minutes, but discipline trumped conviction (as todd harrison likes to say), and i closed flat on the day...still, can't help but imagine what it would feel like to be riding in the back of that train (and nothing would make me happier than to hear you broke ranks and jumped on ;)...

Paulson & Co (the fund) makes a mint shorting sub-prime, and Greenspan then goes to work for them? That make anybody else sick?

Gold has a seasonal pullback due in a couple of months. No one should be surprised by the latest bullish action. Well, not too much, anyway. I already posted the three year $GOLD chart several times, so I won't do it again, but it's still rhyming and climbing. Look back a year and half. It's identical. I also won't be surprised to see that pattern bust to the upside this spring.

I have a bull call spread on the Dec 08 silver futures. I highly recommend this kind of trade as a great leverage play. Buy plenty of time, OTM, set it and forget it. These become remarkably cheap on dips.

The spread limits the upside somewhat, but selling the higher strike makes the trade pretty cheap. I bought the silver 19/20 Dec 08 for 700 many months ago. It traded down as low as 190, where it never occurred to me to scoop them up by the handful (rats!) But I had purchased 14 months or so of time value so I didn't worry about the drop. It's back green now. Maximum value $5000 if silver hits 20 by next Dec 08. 700 for close to a year and a half of time value seems like a good deal to me.

I also still have April 30 puts on GGP, up %60 in a week. Looking for more weakness but also an exit to the trade. As long as it keeps grinding down, I'm staying in.

It sucks that a few other names I've been watching but not capitalized enough to add to my trades have started to break down nicely as well, in particular KIM, DDR and especially MAC. The easy money is off the table on the REIT slide, but there's a bit more to come.

I hate not having the cash to add a few more trades like these two. A friend has bugged me repeatedly over the past year or two to stake me some trading capital. I'm very seriously thinking about it now.

"wavesmash,

There is nothing wrong with puts. But try to do them on strong days in what appears to be a primary Bear. Otherwise you overpay."

Hi Bill,

I'm still holding HGD... waiting for it to break above two weeks ago's high. My hands are falling asleep from sitting on them so long.

Forgive my ignorance... if I buy a put do I need to hold the stock or can I use naked puts, and is there any risk of losing anything besides the cost of the put + premium if not? I should probably bother my broker with this question rather than the board.

I have started with short ETFs within RSP but I think that puts will end up being much cheaper.... in the short run anyway. What I have seen is stats that say 90% of options expire worthless which doesn't really make me feel like I should be buying options... especially when I see postings about people losing all their capital in options.

I'd rather "lose" $500 or 25% in a small stock trade than 100% or $500 in an options expiry. But that's just because I know little about options.

At least there's a chance of retracement in a stock...

(except in the case of Quebecor - did they get the $125M they needed today?)

wavesmash, if you buy a put option you are not obligated to do anything. However, keep in mind that if you hold an option until expiration, and it is worth something, your broker may automatically exercise it, which will make you money in the end, but may result in high commission fees. You normally just to sell the options before this happens.

A put option contract gives the holder the right to sell and obliges the writer to buy a specified number of shares at a specified strike price, any time before its expiry date.

Yes, you can lose 100% of all the premiums you pay for the options, and it happens quite a bit, but that is all, you cannot lose more than 100% as a buyer of puts. I try not to let my premiums drop lower than 60% of the original value, if it does, I get rid of it and move on. On the plus side, they give you tremendous leverage if you get the movement right. There are many, many strategies with options. Straddles, buying both a call and a put, is another I use often.

The Montreal Exchange has a nice guide:

http://www.m-x.ca/f_publications_en/en.guide.options.pdf

I am no expert in the matter. Writing options on the other hand, I believe makes you money most of the time, but requires deeper pockets as you may have to buy the underlying shares (100x). Bill has described this quite a few times and how he uses it to lower his costs.

Interesting, Bill.

As a WWII veteran, I have seen a lot of UN-Americana. Our sad country is in the last (?) stages of what I term "corporatism", which is merely a euphemism for Fascism.

After all, it was the first genuine Fascist, Benito Mussolini, who opined that the first stage of Fascism should be called "corporatism" since it represented the combining of corporate, with governmental, powers.

How could one have any more eloquent description of the current U.S. of A. (otherwise known as the "unified sequence of as..oles"

The only remaining question is to whom we offer the "Sig Heil"??????????????

Am posting copy just in case Tomorrow at 2:15 pm is show time?

ECB warns crashing dollar may stop Fed cuts
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:09am GMT 16/01/2008

Rumours of an emergency rate cut over coming days by the US Federal Reserve have swept the global markets, setting off a fresh plunge in the dollar.

Gold surged to an all-time high of $914 an ounce in New York on bets that the authorities will flood the global system with further liquidity to stave off a mounting debt crisis.

Ashraf Laidi, a currency expert at CMC Markets, said futures contracts were starting to price in a serious likelihood of a half point cut before the next scheduled meeting at the end of January.
"With US equity indices testing their August lows and current macro-economic dynamics knocking at the door of recession, we place the probability of a 50 basis point inter-meeting rate cut as high as 70pc to occur as early as next week."

Lorenzo Bini-Smaghi, a member of the European Central Bank's executive council, warned that the tumbling dollar may now start to foreclose the option of US rate cuts and force the Fed to keep monetary policy tighter than it would like.
"I would not be so sure about the movements of the Fed. There is a serious problem with the dollar in America. We will see what margins they have for further rate cuts," he told Italy's La Repubblica newspaper.

It is the first time that a top central banker has openly aired concerns that dollar weakness could constrain US economic policy.

Until now Washington has largely been able to ignore the currency, treating the slide as a headache for the rest of the world.
The euro briefly touched $1.49 today, just shy of its all-time high.

A leaked client note by HSBC added fresh fuel to the rate excitement, suggesting that Fed may now have to slash a full percentage point by month's end to fend off a serious downturn.

The bank's highly-rated New York economist, Ian Morris, said a new tone of urgency had been struck by top US officials over recent days, raising the possibility of two sets of cuts this month.

Fed chair Ben Bernanke prepared the way for drastic cuts with a speech on Thursday saying the authorities were "exceptionally alert" to the risks as the housing slump triggers the first wave of jobs losses. US unemployment jumped from 4.7pc to 5pc in December, the sharpest jump in a quarter century.

US Treasury Secretary Hank Paulson said the administration is rushing to craft a fiscal stimulus package to boost spending. "Time is of the essence," he said.

HSBC said the Fed had now raised expectations so far that it risks setting off fresh "financial stresses" if it fails to deliver a serious shot in the arm.

"If the Fed were to cut inter-meeting, we think it would by 50 basis points, followed by another 50 basis points on the 30th," it said. The bank said this is a possibility, not a hard forecast.

http://tinyurl.com/2tm6w8

Q: "The only remaining question is to whom we offer the "Sig Heil"?????????????? "

A: http://tinyurl.com/22fuz3

:^)

Craig

Noticed EGLE dipped below 20 during the day before closing at 20.28

Chart of the Baltic Dry index since October says it all for the shipping industry.

http://tinyurl.com/2jrl8s

Bill,

Enjoy your merlot & the warmer than TO weather. Will crack the spine on my Options Trading Bible book & get some sleep. :)

Now that I am confident I will only lose what I see on my screen I think I will start buying some Aug 08 call options tomorrow... perhaps with MFC or SLF. RSI is looking nasty! Lots of opportunities... scary now... not so scary 8 months from now I think.

China will need world economy to be less volatile for a happy Olympics. :)

Interesting that 2007 was the best year since 1998 for mutual funds. Must be that strong loonie in Nov swinging things around.

http://tinyurl.com/2qr426

Why does the US system generate such UNQUALIFIED candidates?

Sarkozy or Merkel, Brown, Putin have held several 2nd and 3rd rung jobs - executive and legislative - before the top job. By contrast, before running for US Pres, what experience?

Obama - 1 year in national politics
Clinton - 1 partial Senate term, 1st Lady
Edwards - 1 Senate term

Romney - governor of a small state
Huckabee- governor of a small state
McCain - perennial Senator
Paul - perennial Congressman
Giuliana - major of a big city
Thompson - 1.3 Senate terms

NONE has signicant executive, financial or foreign policy experience.

Yet one will run the largest organization in the world, and decide on war and peace, on global warming, on global economy.

Why does the US generate such candidates? Most voters are led (by the media) to focus on what Hillary said about Obama, or what Romney said about Huckabee.

It all feels a bit like High School !

Wavesmash, re options

Let me add to what Bill's & Sio2's excellent posts have already stated.

I only trade options with good liquidity, look at the open interest and the trading action. I never want to own a high percentage of the contracts in an option that goes days with no trades. Go to Quote.com get the option contract symbol and then input that in their java chart section with a volume overlay for a month or two, that will show you how it trades.

If you own the options, you have the rights, but be careful as SiO2 says if it goes to expiration in the money, the contract will probably be auto exercised by the exchange, (Montreal exch in Canada, or OCC in the US). If it goes into exercise the owner also has contract obligations to perform. (calls and puts)

Before my time all options probably had to have instructions to be exercised, but with increased volume the paperwork was just too much. So they went to a value of 0.50 or more in the money and of course you wanted to exercise it, who would want to leave that on the table. Then they changed it to 0.25 and a couple of years ago it went to 5 cents in the money. So if you own puts 5 cents in the money on expiry the exercise process will be started, whether it is a $5 stock or $700 Google stock. If you own a put the other guy will be supplying the strike price dollars and you will have to supply the stock. If you don't have the stock you will have to buy it to supply it, or your broker will supply it and you will be short the stock. So bottom line, sell it before expiry if you don't want it exercised. Of course you can always call the broker and tell them you don't want that 5 cent in the money Google put exercised as the commissions will wipe out any profit and you don't have the 1000 shares of Google anyway.

Now the above is for North American equity options, if you are trading NA index options I think the auto exercise (actually called exercise by exception), value is 0.01. Check it out with you broker just to be sure in all cases.

Also in addition to the Montreal exch guide, the CBOE and the OCC also have excellent learning sections.
http://www.cboe.com/
http://www.optionsclearing.com/default.jsp

Please do you own DD
Quasi

Nail in the coffin and back to reality... BAC kills its CDO biz... while C still holds $29b more. Wow... a $400 trillion market and they walk away.

http://tinyurl.com/32r8l6

Was this a condition of CFC takeover?

THE CYCLE OF REPEATING FACTORS:

1) failed auctions and unsatisfactory public sales of asset-backed bonds

2) debate on value in illiquid opaque markets, driven by models

3) rating agency debt security downgrades

4) forced sale of bonds which lose investment grade status

5) huge writeoffs on balance sheets holding bonds

6) compensatory sales of other bonds to improve debt ratios

7) downgrade of ‘AAA’ rated bonds from falling home collateral assets

8) available mortgage funds reduced from collateral sales

9) continued bankruptcy of lending institutions

10) inevitable bankruptcy of a major bank and many home builders

11) return of bonds to broker dealer issuers for non-performance or fraud

12) lawsuits against lenders for predatory practices, misrepresentation

13) Congressional action to clarify liability from fraud and predatory practices

14) hedge fund failure, credit disposition, liquidation of bonds

15) falling housing prices, pressured by heavy unsold home inventory

16) mortgage rates reset upward, ending initial bargains

17) rising mortgage defaults, delinquencies, and foreclosures

18) bankers return foreclosed properties to the market for sale

19) mortgage bonds fail to perform on income from monthly payments

20) base long-term interest rates rise from market conditions

21) tighter lending standards, big pre-payment penalties inhibit refinances

22) stronger homeowners decide to sell so as to avoid going underwater in equity

23) state legislation to attempt to protect homeowners soon to lose homes

24) Congressional threat of ratings agencies and bond issuers for liability

25) REPEAT THE PROCESS

http://tinyurl.com/33dlyq

Are we on #9 or #17?

"The president of the Swiss National Bank, Jean-Pierre Roth, warned this weekend that there were serious concerns about the future of the US economy."

Really? whooda thunk it...

Looks like the Nikkei has been a wild ride tonight and gold is getting bashed.

Nikkei down 466 to 13506 right now. Looking forward to an exciting morning tomorrow.

DaveB-

Dead on.

Made 50% on last run and 25% on this one. I am not short it though. Good luck.

2nd

U got mail

Good Morning 2nd and Isaiah,
I'm noticing the QID is looking a little weak in the premkt. Different considering the intel news. Maybe it was overdone last night?
It surely is going up as the Q's go down today, no?

Waking up to a mushroom cloud over Asia is not at all settling.

Agree with 2nd's post from last night. Better to take losses here than to let them get out of control.

Glad you stayed off the tracks RE FXP Isaiah!