I read everything I can find re gold, including Sinclair, with a grain of salt. One thing I don't understand is what is to prevent the central bankers of the world to fight currency sinking by buying up all the gold, printing money as fast as necessary. It seems they collectively could deprive everyone of the safe haven in gold. The recent G-7 article openly cited intervention in markets to preserve stability. What is to think they will not try to manipulate the POG downward to keep "confidence" in their paper currencies? Any thoughts on this ??

Re Bill "The $USD counter-trend rally, which started off a peak in the Euro at the end of January and was about 1.4934 at last Friday's high, now down to about 1.46 (early today), is likely to drop quickly to 1.43-1.44."

I would have expected POG to fall further on a weaker euro, yet April gold futures have edged back up to $906 this morning. Bill, your timing on $US strength for March appears spot-on.

Re: EUR/USD. Some insight here: http://www.dailyfx.com/story/topheadline/Why_Is_The_Dollar_So_1202291778275.html

Should the ECB turn dovish and ease interest rates tomorrow, that would surely strengthen the $US in the short-term.

Bill,

When you say that it will be time to sell bonds and buy gold, do you mean physical, quality equities, both?

Thanks.

Bill,

I've bought and shorted stocks and options but never bonds. How do you sell bonds? I quick google search came up with Rydex Juno and ProFunds Rising Rates Opportunity. Would these funds be a good way to short bonds? Thanks.

Bill,
If gold is going to reach such great heights why wait for whats maybe only a $10 pull back (GLD to $75 perhaps) ? Isn't it a risk that gold may turn higher at speed and trying to catch $10 costs you more?

Dollar needs mint freshener

The only way for the US government to stabilize the dollar and avoid catastrophe is to open the US Mint to gold and silver. Miss this opportunity, and Americans will be exposed to excruciating economic pain. People of other lands will not fare much better.

"Slavery works best if people don’t think of themselves as slaves. The mint is the symbol of freedom. It is the very antithesis of slavery. Yet imposing slavery on the people is as simple as closing the mint to gold and silver. People are no longer free. They have lost their God-given right to create and extinguish money. They have become slaves since the government has extorted the right of first refusal on their produce and savings."

http://www.atimes.com/atimes/Global_Economy/JB07Dj02.html

Wpepper: See VGM and CXE. The short is on long term bonds and those threatened by insolvent bond insurers.

Craig thanks for the bond clarification

hulbert comments on the recent volatility:

http://tinyurl.com/2tw76v

"over the past three months the stock market has risen or fallen by at least 1% on more or less half the days. And it has done so 60% the time over the past 20 trading sessions.
To put that much volatility in historical context, consider that in all of calendar 2005, there were just 27 days in which the DJIA rose or fell by this much -- about once every 10 trading days, on average. In calendar 2006, there were just 25 such days.
The data paint an even starker picture when we focus on daily percentage changes of at least 2%. There have been four days with that much volatility over the past 20 trading sessions, and 8 over the past 60 trading days.
In contrast, believe it or not, calendar 2004 did not experience even one day in which the DJIA rose or fell by 2%. Calendar 2005 had just one such day, and calendar 2006 had none."

"..the evidence that lots of volatility can be bullish is more than anecdotal. I fed into my PC's statistical package the data on the DJIA's volatility going back to 1896, and looked for correlations between high levels of volatility and the stock market's subsequent performance. More often than not, levels like those we're seeing today were followed by market gains over the subsequent month and quarter."

Re: selling bonds.

Here's one blogger's recommendation (not mine!) for selling bonds...

http://tinyurl.com/2crz4c

Safe trading to all

Stu

N2son Builders

Lennar has found a way to salvage something from the huge losses it incurred by overpaying for land during the housing boom: an $800 million tax refund. The benefits could prove a boon to other hard-hit home builders.

http://tinyurl.com/34uam6

(may need WSJ subscription)

Good morning from the balmy Amish Country.

It's a quiet morning for the Cara 100.

Downgrade:

YHOO - to Market Perform @ BMO

Target Price Raised:

DIS - $36 to $38 @ Oppenheimer

_________________________________________________

Have a great and profitable day.

Cara Skype users:

You can automatically receiving these blog comments while listening to your favorite music or artist through a wonderful free Skype plug-in. To install, simple follow the instructions at http://nexalogic.com/skype.html

The plug-in will randomly play music from any artist you choose, and similar artists. You can stop the music and change artists at any time depending on your mood, or your trading style, or the mood of the market. Classical music, rock, or rap, your choice.

Nex..

Seem to be having a problem joining chat.

I'm not liking the MACD on gold and silver.
Platinum is up because of a power outage in South Africa affecting production.

Moin from Germany,

maybe not the fire sale that Citi & co were forced to do but not far off....

WACHOVIA

The $3.5 billion perpetual preferred stock will pay a dividend of 7.98% for 10 years and thereafter change to a floating interest rate. Wachovia may redeem the preferred stock after 10 years.

Wachovia’s Tier 1 capital ratio at December 31, 2007 was 7.2%. On a pro forma basis as of year-end, Wachovia estimates that including this preferred stock offering, Wachovia’s Tier 1 capital ratio would have been approximately 7.9%. Wachovia plans to continue building Tier 1 capital through retained earnings over the course of 2008.

And even after this increase the tier 1 ratio ist still under 8 percent.....

Still under 8 percent….

Bill and others,
For those non-deep-pocketed investors (of which I count myself) what are your thoughts on using the gold ETF's as a short term, "eyes wide open to risk" means of taking advantage of the "short bond/long gold" double trade (same strategy espoused in the article linked in kp84's post).

My thought:
The underlying long term risk of the GLD ETF failing remains the same. However, short term, if the trade works some of the profits can be extracted and converted into the real stuff locked away in Switzerland or Australia. (assuming you have the discipline to do so!)

Additional changes:

Upgrade:

ADBE - to Buy @ Kaufman Bros.

Target Price Raised:

DIS - $39 to $41 @ RBC

picking up some FXI at 144 and change...

EWJ @ 12.28...

Bill....

Do you include CEF in your ETF problem group....

I've avoided the US based ETF's (GLD SLV)....

I understand that having the Physical Bullion is

the best solution to prying governments.....

Would you consider holding CEF.A.TO as an

alternative or not at all????

Cheers.........DB

QLD- adding at 71.25...

Bill/Reenzo many thx for your feedback - for now I've executed on the ETF - re purchase of physical gold (I'm based in Australia) for storing could you point me int he right direction?

Bernanke just chatted with Banking Cmte. Chmn. Sen Chris Dodd;
searching for the media release from Sen. Dodd's office.

To be a fly on the wall...

i wonder if the sudden jump in the USD was foreshadowing an interest rate cut at the ECB.

The Federal Reserve gets to have their cake and eat it too, drop rates while the USD rises.

my barfometer is really ramping up so im staying in gold, some cash ready to deploy if gold falls farther, and a small short position in the financials.

following up a thread from last night->if the smart money sold at the top, then when do they start buying back? colin twiggs pointed out that buying on the 'retracement' to 12,800 (probably) put stock in the hands of weak holders, who are undoubtedly unloading right now...flip side must be the positions are being snapped up by funds with longer-term horizons (would bet garzarelli follows her own model, and averages in on days like yesterday)...

QLD- taking some off at 72.25 (money mgmt)...

jacksoo,
I'm in your boat re: physical gold, i.e. I haven't figured out the easiest way for me to get it, (and feel safe that it is mine, heheh).

However, Kaimu has written loads of posts on an Australian bank (I think in Perth?) that has direct or at least close ties to one of the Australian mines. You can do a search in the archives for Kaimu, or wait until Hawaii sees the sun in a few hours (4am there now).

gold up $16...looking to open a position in PNP.TO around 3.05 (USD)...

nice mini-"v" on the DJIA this morning...

don't think trading will be like this in 6 months->enjoy it while you can...

Just in case you have not seen this, Byron Wien's five "sure things" make for interesting reading, especially in the light of the tumultuous markets.

Here is the URL: http://tinyurl.com/336eb6

Mom&Pop Stuff:

Several weeks ago I posted some results on buying Gold & Silver (AU&AG) with some great buys on the JFK 40% AG half dollar @ 75% par POS (25% below spot price of AG).

Well folks that 25% savings is no longer available and has escalated to near 90% par and even that ’deal’ is becoming elusive. Further, AU coin spreads are increasing but there are still some bargains to be had on ‘circulated’ coins at 5-6% over spot PM (Precious Metal) .

My sources that I purchase from: eBay and local coin shop.

2nd,
Was watching that V thinking of last night and now see it rolling into an r. macd and intraday trend still appear higher but RSI and stoch not good for the moment. I'm confirming with XLF....

jacksoo
Kaimu favors the Perth Mint:
http://www.perthmint.com.au/
where you can buy allocated (preferable) or unallocated gold. On the same topic, does anyone have any thoughts or experience with BullionVault.com. Seems somewhat like a private version of Perth Mint

Bullionvault was recommended by a writer for Seeking Alpha.

craig- maybe i'm wrong, but i think a lot of funds are buying CSCO/SNDK/GOOG/AAPL/INTC right here...

Somebody talk me out of buying MSFT...

A list of stocks rated buy at Goldman
http://wallastoninvestments.com/a-list-of-stocks-rated-buys-at-goldman

CSCO Looks like straddles

big vol (19,8k) w/Feb 25 calls; vol on put side is with the 22.50 Feb (20.9k)

CSCO Straddle mentioned: move req. 9.73%. Thanks Seamus.

Re: Commodities

Just read Byron Weins' five sure things (thanks prieur). Can someone point me to some concise info about building conservative positions in commodities such as cotton and other materials for manufacture and consumption?
Thanks.

Re: Buying coins in Canada
Note that, unlike Ontario, Quebec does not collect provincial sales tax on retail coin purchases. Quebec.

1)I view anything recommended (Goldman, etc) as someone looking to sell into the strength of my buying, or someone who just bought and is looking for aid to prop up their potential. I know there must be honest recommendations out there, but how do you differentiate them from the charlitans?

2)re volatility: I plotted the VXD and DJIA on the same chart and they appear quite INVERSELY correlated to me -- high vol, lower mkt. The long term vol is around 15% or less for DJIA, even on long steady mkt rises. High volatility to me means a selloff is needed. It's kinda like tectonic activity building up, looking for a release.

3) re GLD ETF. Given the HSBC storage is in London, could the US govt actually confiscate anything, and is anyone really concerned it might happen? The other thing that keeps me from pure bullion is the extra spread you have to pay. How much spread is reasonable to incur?

Regards all ..

PNP- took their time (and not happy with the commission), but in for now at 3.05...

$10 - $20 premium per ounce of gold (as in the local coin shops) doesn't seem extreme.

wavesmash- won't talk you out of MSFT, but i think there are higher % possibilities...

2nd,
I'm sticking to Cara 100's with recent buy signals, so SNDK was added. Two other longs, CSHCP and BRK/B. Will add to BRK on a pullback.
Full position on CSHCP.

I'm waiting for a few select additions from the Cara 100 at the right price.

I'm mainly positioned for the TOAG (Trade of a Generation) with positions in GFI/WGW/UXG/SLW/GLD

Using UYG for financials trade up, SKF down.
No SKF today....yet.

JR, do you think HSBC really has the gold and performs the physical buys and sells daily? Or is it like Fort Knox.

own 1000 shares of BRK/B? ;)

Alright, remember that the ECB and BoE are reporting their interest rates tomorrow before our markets open. Also keep in mind that Europe's data suggested that Europe won't fully escape a US slowdown. This might put more pressure towards rate cuts.

Is there any banking info, or bond insurance info out soon? If not when is the next scheduled announcement of any info? Is anyone going to hold anything overnight? If neither banks drop rates, what will that do to our markets? What is the recent Euro inflation data?

JDS is rocking, Juniper did alright on earnings....CSCO reports today AH....

Seems the JDS news is pushing the string?

Craig,
I went to brkb last fall after getting beat up pretty good. After swoon to 4200, it's been holding up, even acting like an inverse most bad days. Do you use a stop on this stock, or just trust WB to navigate the Bear? TIA

Received the following email today.

A Japanese company ( Toyota ) and an American company (General Motors) decided to have a canoe race on the Missouri River Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India .

Sadly, The End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads.
IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

2nd, Don't I wish....LOL!
I would own the A shares then.....

Speaking of Cara 100s, Cameco on the Toronto exchange (CCO.TO) is in the AZ. The US listing monthly RSI is still above 30. There's some positive divergences with the usual indicators (price making lower lows, but indicators making higher lows, see MACD, RSI on daily Toronto chart).

I believe they released earnings today--haven't read through the report but stock is up modestly.

The cons? Cigar Lake headache (mine flood), and potential for lower oil price (making alternatives not as attractive) with a slowing economy.

Considering a partial position in my retirement account.

Also, Bill recently mentioned folks might want to take a look at the Cdn REITs. Here's a list of them, composing the TSX/S&P Capped Real Estate Index. Hope these print okay. No positions in any of these, but starting to look. Many are yielding ~6+%, and with the prospects of lower rates from the BoC, may do well.

BEI/UN.TO Boardwalk Real Estate Investment Trust BAM/A.TO Brookfield Asset Management Inc.
BPO.TO Brookfield Properties Corporation CWT/UN.TO Calloway Real Estate Investment Trust CAR/UN.TO Canadian Apartment Properties Real Estate Investment Trust
REF/UN.TO Canadian Real Estate Investment Trust CSH/UN.TO Chartwell Seniors Housing Real Estate Investment Trust
CUF/UN.TO Cominar Real Estate Investment Trust
D/UN.TO Dundee Real Estate Investment Trust EXE/UN.TO Extendicare Real Estate Investment Trust
FSV.TO FirstService Corporation
HR/UN.TO H&R Real Estate Investment Trust
INN/UN.TO InnVest Real Estate Investment Trust
XRE.TO iShares CDN S&P/TSX Capped REIT Index Fund PMZ/UN.TO Primaris Retail Real Estate Investment Trust
REI/UN.TO RioCan Real Estate Investment Trust

SNDK- going with intuition->buying @ 27.15 for the long haul->tag this post for a one-year retrospective, think it doubles...

FXI-> off at 146 and change...

moving proceeds from FXI->QLD at 72.09...

2nd,
Another one is SGP near 20. Got hammered by negative FDA news but I think it turns into another Merck/rebound. Not a Cara 100 though.

Wavesmash........MSFT has Ex date coming up 2/19/08, that should send stock higher, I am waiting/holding for exit at 33

JRPauley: Bullion Spreads

2.3.08 bought British full Sovereign (0.2354 Troy Ounces) paying 1.0665932 over AU world spot. In December paid almost par spot. So within 2 months this coin’s spread has risen 6% over AU spot.

On the same day Swiss 20 Francs (0.1867Tz) had a spread of 1.1070411 or a tad over 10% AU spot.

Hope this helps in your physical purchases.

Jaketh: Brk... I'm usually here to keep an eye on it so no stop per se (no auto execute) but I'm looking to buy, not sell, if it pullsback.

Not thinking defensive on this one although I'm mindful Warren is a human and won't last forever. I hope cheeseburgers and cherry coke have magical preservative powers unknown to science.

TM- up 4%...i think it put in a bottom at 91 in january, regardless of whether the N225 continues to drop...

craig- SGP/MRK->unexpected results (or lack of results) of the Vytorin study could seriously impact sales of all cholesterol-lowering drugs once health-care insurers begin to ask whether they want to continue coverage...a lot of insurers will follow Medicare's lead->if Medicare decides 'statins' are a waste of time/money, i would stay away from any drug company with a significant % of sales based on them...

doug11,

I would be cautious about buying Cameco. Check the comments on Stockchase.com to weigh in on the decision. Paladin and Dennison Mines may be better choices and are the ones currently on my radar. Paladin was rated Outperform by RBC.

You had mentioned REITs. Not all REITs are created equal - so you might want to check Stockchase for analyst comments as well. I would also add some business trusts to the mix. We own Teranet Income Trust (TF.UN) which has a lot of cash, recently increased the distribution and is fairly recession-proof - they have a monopoly on the land registry business in Ontario. You might also want to consider the pipeline trusts.

"I hope cheeseburgers and cherry coke have magical preservative powers unknown to science."

the day the FDA decides that lowering cholesterol is not the holy grail of health-care (and the SGP/MRK study may start them down that path)->i'm loading up on both burgers and (to the extent i can afford it) BRK...;)

Hi!!

Intraday tech for gold pasted from http://www.goldessential.com/:

"Technically, a sustained daily close above $900 an ounce opens for a test of $907. Key resistance is at $914 and $920 an ounce.Support is seen at $900 and $898 an ounce. A move below the latter level would reinstate the previous downwards trend.

Cheers,

Thanks Craig, I guess I could have figured that out from your remark, but with chat about 10,000 dow, I was just looking for a reassuring perspective and something to hang my hat on.....cheeseburgers and cherry coke it is...

C. Note

Is the Sovereign .999 fine gold? I have Canadian sovereign and they are the same as UK, .917 gold
http://www.goldsovereigns.co.uk/technicalspecs.html

I believe only .9999 gold is the traded type at the metals exchanges and that is what the POG quote is based on. Can you compare .917 to a spot price on .9999 gold?

I read on a thetruthaboutcars.com that Toyota will have higher labor costs in the US than both GM and Ford, and they are looking for ways to restructure because it will hit profit margins.

I think Toyota's advantage is in making superior cars that people want to buy and not having such a bloated dealer network.

How ridiculous is it when GM touts their 'green' cars and trucks (ethanol and a few hybrids) yet every non-US manufacturer makes far more fuel efficient vehicles.

I watched CNBC's comments from the current automotive convention. GM expects a recovery in the market by spring, early summer... What are these guys smoking?

I read Roubini's blog today and had to chortle at the chasm between GM's expectations and the potential economic doom that we now straddle

.....Cue the dramatic music.....

http://tinyurl.com/2nuumx

For those of you who are not Roubini Blog members, I've linked the full article as posted on Panzner's website (second story down from top)

http://tinyurl.com/ytvt8q

With change comes opportunity... with massive change comes massive opportunity.
Sometimes I envy you guys!

2nd,
Yes, SGP got hammered to $17 +/- where I missed the chance, got in with a 19 handle. Now it's up over 20.50. Has pulled back since to high 19's but doesn't seem worried about FDA. I'm running a stop on it and have decent gains as a buffer.

Seamus,
toy/f
Me thinks we might need a Congressional investigation?????
That Ford employee should know better then use something as technologically advanced as an oar. If he wasn't so lazy, he could have used his arms to paddle and save Ford some unneeded expenses.
A Congressional subcommittee is clearly needed for employee incompetence cases this severe.

Moab,

I spent too amny years in management with GM ( and Toyota ) to believe that change is going to happen in Detroit anytime soon. Big?3 producers offer too many models with too many engine selections, and trail in designing vehicles the public want to drive. One solution would be for each of the Big?3 to create an American Engine Corp where they each contribute engineers and technology to develop V6, V8, Hybrid, Electrics - each with volumes of scale that result in lower cost and higher efficiency. These powerplants would be bought from the single supplier (AEC) and technologies developed could be used under licence elsewhere. A partial solution that is "Made in USA".

spooky symmetry:

Look at EEM on a two day chart....mirror image? :)

A thought on these reserve stats from the Federal Reserve. As these are the cumulative reserves of all their "client" banks, is it possible that there are just a few banks that are many tens of billions underwater and have had to borrow much more than any other banks, pushing the composite number into the negative range? If this is the case, would it allow the fed to eventually cut off these banks, and leave the rest of the system solvent? Does it make a difference? Best wishes to all as usual.

2nd_ave..Craig and others

Welcome back to the longside of SNDK..

I am on that ride with you..Long and stong, calm seas ahead...

May we enjoy this ride together

Collectively the auto manufacturers (management) are exactly the same as the unions they belittle.

The unions worry about interlabor competiton which prevents them from seeing the big picture and the manufacturers/management worry about inter-manufacturer competiton which prevents them from seeing the big picture.

Together they will all go broke unless they see the big picture is the U.S. against everyone else.

Good post Terry.

regarding US cars, i agree,

i drive a 98 honda accord. its got none of the
bells and whistles, just straight up 2 door standard, 10 years old and it still looks hot imho.

its got 160,000 KM on it and the guys at my
mechanic's shop tell me my car is just a little baby compared, that you dont even start thinking about serious work until the 250,000 km mark.

very few mid-priced 10 year old american cars can boast the same staying power both mechanically and stylistically.

honda's are the jean jacket of cars... they never go out of style.

CSGroup:

AGW (Actual Gold Weight) is the pure AU left after a strengthening alloy is removed. The Sovereign starts out at 7.9882 grams and once the alloy is subtracted ends with an AGW of 7.3224g which is pure gold weighing in @ 0.2354 Troy Ounces.

To answer your question I would always use the AGW troy measurement of the coin in question when comparing to the spot price of AU.

Hope this helps.

I bought an entry position into Sandvine (svc.to) at 3.77. In addition to their traditional wired providers, their products are now in used by at least two major wireless carriers. To me this company is a likely target of an acquisition. Will complement the position if/when the market tanks further.

I've got a Toyota Corolla, 14 years old, 135,000 miles on it. After the last tuneup the mechanic said it will run for 200,000 miles at a minimum. Runs like a charm and costs me almost nothing.

charting question:
when looking at long-term (5 yr+) trendlines, is it best to use log charts?

2nd,
Noticing aapl is not participating with the others you listed.

Seems to be connected mainly to CSCO/hardware and internet co's on the msft/yhoo action.

Bill, thanks for the link to the Greenrush vidoe. Yea thanks alot! That video and its import was/is scarier than anthony perkins and jack nicholson with knives and axes at my door! I had seen that data of the bank holdings last week-possibly from Roubini and it scared the hell out of me. Earlier this week Craig says he's pulling all cash out of banks. I am not the fastest caraista in the stable but you guys are all getting my attention.
On a shorter term perspective, closed out of QID yesterday to a small profit on a hell of a day for most. Did not close 1/4 position in SKF as I just don't think the good news can continue- or the ignoring the bad news and calling it a bottom- but... IB keeps warning me about pattern day trading and I finally found the minimum requirements needed (25K) for that activity fairly well buried in their website...so I need to fund that account to meet their minimums before I can trade 5 times a week. Gee, enforced sitting on my hands.
So, thanks. To all who post. To all the leaders-whether you see yourselves as that or not- I could just keep a record of the money I save not renting scary movies to put a value on this place, big LO
peace from north Puget Sound
gray

gold testing 900 support now.

Apparently it will hold

craig- may be related to the the fact that the technology companies that lead the next bull will likely not be the ones (AAPL/GOOG/RIMM) that led the last one...analysts are probably competing to hang their hats/reputations on figuring that out....

Photogray,

I think that minimum 25K is not "their" minimum. Its SEC law to "help" people protect themselves from themselves! I believe it's a product of the internet bubble...

Photogray,
re: "pattern day trading", in case you do not want to fund your active trading account to that level, you might try placing your stop orders for all but 1 share/contract, rather than making a true closing order. Then, the next day if the position still looks ugly, do what you need to.

If you want to get back in, just go back into the position with that 1 extra share already there, and place your new stop order as a true closing of the position.

True, it does increase overall trading costs a bit, but you avoid the "day trader rule" and you can still trade with a lot of flexibility.

gray- scary movies->at least for me, they've been difficult to find...'alien' in 1979, 'girl in a swing' (meg tilly) in 1989, 'the pledge' (jack nicholson) in 2001...can't think of any others right now...

SWC is looking like it may rollover after the recent rally. Platinum metals group has been strong but SWC looks a bit overbought short term. It also failed to reach a new high earlier today.

make that they've been "few and far between"

2nd_ave: I feel flattered that an experienced trader like you has quoted me (yesterday) regarding money management (even though I was quoting you in my first post). :) I think this concept is crucial to every trader, and I would advise every new trader who reads this blog to think really hard about it. I did not realize its importance in my first year of trading (I started in Feb 2006), and ended the year down by 30% as I was stubborn enough to keep increasing my losing positions (I started shorting homebuilders in August 2006 and closed my shorts a year later close to their peak – the market did remain irrational longer than I could remain solvent) and not to take incremental profits on my winning positions (OIH and GLD between Feb and May 2006). After having learned my lesson by Feb 2007, I started trading with the understanding that VERY LARGE moves can occur in any position I take, and so I need to be more conservative in buying stocks on the way down and also need to take partial profits on the way up. As a result, I am now up 50% since I started trading (two years ago), and I am still keeping my trading strategy extremely simple (buying the stocks I like on the way down and selling them on the way up while keeping some core positions long-term). The number of times I allow myself to buy a stock on the way down depends on how solid I feel the stock is (for example, I took only one position in several Canadian juniors recently, and I am holding myself from increasing these positions, since I don’t know whether these juniors will actually “make it”). On the other hand, I have increased my positions in GROW and CCJ at least 4 times by now, as I believe in them long-term (of course, since these stocks did not go down in a straight line, I was able to buy/sell them multiple times, and as a result I lowered my cost basis so much that I suspect my losses in these stocks are very small by now). In November 2007 I improved my strategy by starting to trade in and out of SKF and other ultra-shorts, as a hedge on my long commodity positions. As a result, I can now take profits from both up and down moves in the market. Lately, I have improved this strategy even further buy paying attention to the market sentiment and staying away from ultra-shorts when I feel the market is in a rebound mode (for example, I was fully long between the emergency rate cut and until the next 50% cut, since I didn’t believe that any serious bears will come out when the bulls are looking forward so much to the next rate cut). Also, I am now taking much more seriously Bill’s words that a bear market is not a straight decline but a series of lower highs and lower lows, and a confirmation of this thought by 2nd_ave, who said “nothing moves in a straight line,” and so I do not open new short positions after the market had been declining for more than a week or two (as a chance of a rebound is high at that point), and instead I wait to open new shorts when the market had been increasing for more than a week or two (as a chance of a decline is high at that point). I am now seriously considering to relax my mindset even further and start buying UYG or other stocks that I don’t believe in long-term but feel are oversold short-term. I’ll need to watch more how 2nd_ave does that before engaging into it, however. I am really impressed with your flexible mind set, 2nd_ave, as it seems from your posts that you feel the financials should be going down for a while, and still you have the courage to buy UYG when you feel it is oversold. Flexibility is another key to success in trading, in addition to money management!

Gray,
When bond insurers have no reserves, banks have no reserves and more debt/defaults to follow and we all rely on FDIC, then we are all self-insuring and could/would see the same closed door as the banks are with their insurers.

The FDIC is more or less like MBIA/AMBAC in that the insured are those turned to for the bailout.

I'll cancel my car insurance too if they call to ask me for a loan to keep them going!

So in my mind, if gold is money too, it's safer than cash in the bank with no reserves or real insurance.

david- we've all learned the same lessons...one nice thing about starting to trade early/earlier in life is you get to make those large percentage errors when your account balance is still small->then you quickly make up for it by (consistently) making smaller percentage gains on (increasingly) larger balances...

QLD- adding at 70...

Quick questions for the community"

I read a post in a recent discussion on this site that stated that the mainstream media usually gives mixed financial data a negative spin (i.e. recession). Why? What do they have to gain by doing this? Who would profit from a gloom and doom scenario?

My other question is related to the technical analysis of stock prices. Do any of you factor in some of the psychological aspects of the market? If so, how? Do you provide a specific weight in the daily averages that would reflect some assumptions about the market or is this too difficult to do? I figured that with all of the black box trading that happens that somewhere, someone has programmed in a contrairian program to play against what most hedge funds use.

Just a thought..

Surveys hit hopes of UK interest rate cuts
By David Litterick
Last Updated: 2:40am GMT 06/02/2008

Hopes of aggressive interest rate cuts faded yesterday after two key surveys showed the UK economy holding up relatively well in the face of the global slowdown.

Although the Monetary Policy Committee is still expected to reduce the cost of borrowing by a quarter point to 5¼pc this week, surprise strength in the UK service sector and news that house prices were flat last month, rather than falling, led many economists to revise their views yesterday.

The Purchasing Managers Index for the UK service sector edged up to 52.5 in January from 52.4 in December, against expectations for a fall. A figure above 50 indicates the sector is still expanding. The survey also showed prices rising at their fastest rates for nearly a year - reinforcing concerns about inflation.

Vicky Redwood, of Capital Economics, said: "The survey remains well down on the rates seen for most of last year and it is still pointing to a further slowdown. Nonetheless, activity is clearly not collapsing yet. Accordingly, while an interest rate cut later this week still looks a pretty sure thing, it will only be 25bps and rates are set to fall fairly slowly thereafter."

Rob Carnell, economist at ING, agreed. "We expect rates will only edge down slowly by another 50-75bp after Thursday's cut."

http://tinyurl.com/32fqr2

Rio rejects BHP's improved offer
By Helen Power
Last Updated: 5:06pm GMT 06/02/2008

Rio Tinto has rejected BHP Billiton's improved takeover offer, saying there is still not enough money on the table.

Damian Reece: Kloppers' big hit may not be enough to knock out Rio
The mining giant held a hastily convened board meeting this lunchtime to vote on BHP's 3.4 to 1 share offer, but voted to turn it down.

http://tinyurl.com/2el9vu

Mom&Pop Stuff:

I finally made the first withdrawal from my IRA retirement account. Although I’ve been retired for several years, it was time to dip into very old money.

My portfolio has a Roth and a Rollover account and I knew the taxes were not paid on the Rollover and it had been so long since this subject was front and center in my noggin, I wasn’t sure just how it worked, so I ventured past the first few FIDO screens to perform the deed.

Here is what I found out.

If you want funds from your plain ole Rollover, be prepared to leave at least 10% behind for FIDO to give to the IRS and if you live in a state that requires withholding at this stage, there will be more left behind.

My choice was to withdraw from the Roth and nothing was withheld by FIDO and my state did not require withholding either.

Thank the powers that be I decided to open a Roth many moons ago.

NDX broken again - lower low, lower high thus far today

50% retrace of the latest run up $SPX =1332...turning point?

DJIA stoch dragging across the bottom....bulls are burger by now. You know though, with resusitation and a rare burger they can sometimes get going again...

Well below last Thursday....

QLD- taking the last 20% at 69.10...

2nd - what is your premise for the QLD trade? Looking for oversold bounce intraday, or something more?

Dave

going long...EEM..

Check the daily chart for UUU.TO and you'll see a really solid downward trend line pushing the price lower and lower, which followed the formation of a descending triangle. I'm looking to go long if the bulls breakout of this one, and perhaps help them form a nice hammer (though it's getting late). RSI(7) is just below thirty and UUU's down over 4% today, may because of some negative sentiment coming from an analyst that just lowered his price targets (along with CCO's).

short answer->just like buying when people are selling (everyone's mantra is to buy weakness/sell strength, just don't forget to put it into practice)...may go against me for awhile, but hey, with a 52-wk high of 120 on QLD (and a low of 64), i just don't think it's going to go against me for long...

onlineaces, yes you are right. I cannot stop the govt from protecting me. Somehow, I have a feeling that it protects brokerages more than mom&pop.
reenzo, Thanks, I will try to wrap my brain around that for a while. The added costs do not worry me, IB is economical for a fairly timid trader (wanna be) like me
gray

C Note - thanks for your 2 cents on gold -- pun intended.

I will look for better spreads and consider moving from GLD to bullion, several hundred large bricks ought to do it ..

what i should refer to is the QQQQ one-year high/low of 55/42..

2nd - Do you use stops or are you walking the tightrope without a net below?

2nd thanks for the reply - I do appreciate the explanation.

Always looking around to see if there's something I "missed". I continue ultra short NDX, but I do not trade intraday as you do.

Dave

long GS to 189

also need to ask yourself who the sellers are at these levels- i would not be happy entrusting money to fund managers who are deciding to sell here...since they tend to be an intelligent group, have to assume they sold last summer/fall, and are buying now...

og- tend to use position size as my 'net'...most trades would have to really go bad to do more than dent the port...i don't really think of it as a tightrope->market psychology is (on the whole) relatively predictable, and as long as you buy on weakness, odds are high you stay 'safe..."

..and every time i say that, hope like hell they won't be famous last words...LOL

long aapl

UUU: First attempt fizzle quickly, but I'm trying with the second... long @ 6.50

UYG @36.40
Also added QLD.
Got some decent buys on SNDK intraday.

Re: Obtaining share certificates

I tried from IB but they do not deliver share certificates. Does anyone know which brokerages will deliver share certificates when requested?

mebea interesting questions. it seems dave was answering #2 as you were typing it...see David at February 6, 2008 1:43 PM.
As to your first question, I have a seat of the pants theory or theories...1- americans (in general) are fed and seem to eat up symbols vs substance. We accecpt sound bityes (repeated ad naseum. Except about the war. Do you see any war news? Has media forgotten Afganistan? Have we? We prefer good news but then when the shit hits the fan we WILL blame someone...bad borrowers, axis of evil washington, etc.
And now to continue my rant...serious traders can just move on at this point...
It boggles my ming that we refer to this newest and maybe best crisis as a "sub prime crisis" as if those pesky dishwashers in california who gamed our system into letting them buy a 700K home could even slow financial growth around the world. I said it before, I'm not the fastest here in the stable but COME ON!
peace by keeping your powder dry
gray

last 20% allotment of QLD off the table at 70.03...

brought qld at 69.50
my frist trade ever
base on info i learn at this site

vinod...

Welcome aboard...As Bill Says "Grab your oars"

POLL...Who sees ECB BOE rate cuts coming?

ECB's mandate is to control inflation. No cut is my vote.

ditto, No cut is my vote

vinod... whats your trading time frame? Minutes, daily, lt? Are you thinking of a dead cat bounce for the naz? Would really like to hear justifications. TIA
gray

CSCO earnings & conf call after the close today. Any insights into what their results are likely to be?

Dave

Dave,

I don't trade CSCO and don't like to jump in before earnings.

That being said looking at the chart, it has been pounded pretty hard..RSI and MACD seem to be rolling up..

I think a nice straddle here would work..:^)

DaveB my 2 cents---suspect earnings will be good, but price will really ride on CEO comments.

That's why I initiated a straddle earlier today. There's been a little discussion of the straddles on Skype, FWIW. Lots of vol today Feb 25 calls almost at 114k; Feb 22.50 puts 46.7k, Feb 25 43.7k.

The number of very weak stocks is starting to expand again and the number of strong stocks has collapsed. That and the inability of stocks to hold a rally suggests the downtrend is back in play.

A number of our sentiment and technical indicators that we follow are lining up for a potential bottom in stocks at the end of this month. Our target for the S&P 500 is similar to Bill's 10000 target for the Dow, so there is much additional downside to go before we turn bullish.

JW
http://www.2globalmarkets.com

I am of the opinion that gold's demonstrated ability to bounce up sharply from under $900 is very encouraging.

Furthermore, the Euro was under downward pressure and crude oil is dropping. What I find even more encouraging is this: over 100K open interest contracts started dropping (in volume) $940 yet gold only declined, what ... $50? There is a lot of buying going on here don't you think?

If Feb 1st low can be captured and held, I really don't think we will witness further short term weakness in Gold. My 2 cents...

Seamus...

Great minds think alike...And we posted the same advice 1 minute apart...

basketguy and seamus - thanks for the good thinking! I'm not thinking of trading CSCO - rather it's potential effect on NDX. I remember the "old days" when John Chambers would start talking & the market would jump 5% the next day... Still makes me shudder!

No cuts from neither BOE nor ECB.

abort GS AAPL ..not today :(

QLD- 20% allotment back in at 69.10...

QLD - Nice bounce off intraday triple bottom @ 69.00; perhaps presages a move higher?

....or not....

Bought QID @ $52.83. Plan to hold overnight.
Still long UNG, however, the trade is as yet underwater.
Still short GDX. In the black.
I am looking for lower broad market prices ahead.

10 day $TRIN >1.3...oversold...

MU down 11%...who's buying and who's selling->both sides could be right, depending on the context...if you want to pick up 1m shares under the radar, today would be an xlnt time to scale in...whereas if you're an individual trader, shorting at the open may have the 'right' move...

EEM, I show TRINQ 10 day at 1.55. Does that rank as oversold for TRINQ?

going long...last minute...literally :)

FXI- picking up a little at 138 and change...

I am going to wait for the open...

I feel a little more downside ahead...

FXP rocketship today.. Looking for more downside near term. Still holding ultra shorts from last Friday.
LONG: QID,SDS,SKK,FXP 40% allocation
LONG: GLD 10% allocation
Balance in cash looking to add to GLD trade and initiate GDX position.

DaveB..dont know brother..watch NYSE...anyone want to debrief today's action? collectively we can do better...

Alright Sith guides.....

Into QLD at 68.19.

Chambers better do his usual magic, or it's the light saber for him....

Really refused to go below DJIA 12179 or so...

EEM - looks like 1.55 for 10 day TRINQ is very oversold, so right now I'm thinking I should've pulled off part of my ultrashort NDX, but we'll see what tomorrow brings now.

CSCO meets...wild swings in price->i've seen everything from 22.20 to 23.40...

Dave B: I went long at the close yesterday bcuz of TRIN & $VIX..worked fine this morning.but NAZ is in a MOMENTUM downtrend rel to the rest..so $TRINQ could be higher to be oversold..dont know..you should be fine. I am sick with this afternoon's weak action...

CSCO could influence the markets north tomorrow.
Bought etfc just before the close.
Call me crazy.

By Simon Denham, Head of Capital Spreads
Last Updated: 10:15am GMT 06/02/2008

Gold continues to look weak as the dollar bounces, and we are now solidly below $900 bucks at $887.7-888.2. The major short term support is around $870, medium term at $840 and long term down at around $690. This is just a reminder that we can fall a very long way indeed but still remain in a bull market.
Last August I wrote an article that revealed that our clients were the longest they had ever been, with up bets outnumbering down bets by 15 to 1.
Last week I was startled to hear from the risk desk, that for the first time in the history of Capital Spreads, our clients were net short of FTSE 250 stock. There were more negative bets than positive ones. It might be tempting to take this as an indication, possibly, that we may be reaching an equilibrium level for the current down turn.

http://tinyurl.com/33prmr

Out w/small gain on QLD.

Try it, it surprised me I didn't have to wait until 16:15 for AH

After several down sessions for the Q's and just meeting #'s for CSCO, it puts too much pressure on Chambers to say good things about a lousy economy.

John and BG reminding me that caution is warranted here.

Moneygenie: You trade the Gold/XAU ratio as a tool ?

ANDE (agriculture play) up $4.10 in aft hrs

The Andersons, Inc. Reports Record Earnings for the Fourth Consecutive Year
Wednesday February 6, 4:04 pm ET

Grain & Ethanol and Plant Nutrient Businesses Lead Earnings Growth

Disclosure: Long ANDE

CSCO is up pennies in the aftermarket. That is going to reverse the trend tomorrow?

I think traders are starting to realize that the banks are out of money. As the video Bill links to says, the next market moving event will be rumors of bank runs. Americans are too trusting of their institutions and that is going to make the eventual panic worse.

That video said that Dow Jones news service brought up the possibility of bank runs the other day. Thats not something you expect to see in a mainstream publication.

CSCO - reading the quarterly PR and things sound good. Met on earnings and beat on revenues. Lots of negativity baked in the cake it seems to me. I think CSCO will be above $24 by tomorrow's open.

Figured I would post this since it relates to many of the things Bill and others here have mentioned. This is truly amazing and disturbing

Buyback To Oblivion: MBIA and Ambac
"So, in the name of enhancing shareholder value, Ambac and MBIA respectively spent $1,015,036,000 and $1,843,044,000 worth of cash for stock buybacks (over the past seven years). But, and now you know this, such cash expenditures reduced liquidity and net worth by those exact amounts. How can this be deemed responsible behavior when both companies are expressly in the business of insuring bonds and providing financial guarantees?"

Hi,

IMHO, the ECB will not cut tomorrow.

BillySundance : I am with you..way too much negative sentiment..look at $ VIX...and prices pluged because some viagra chomping academic fool is jawboning about credibility with inflation.

market went down..but $NYSE breadth was not as bad...half of yesterdays.....thats a bullish divergence...

Dunno what happened just now with CSCO. Conference call? I see $21.25, which takes out the Jan low. This market right now is a total Casino. Incredible volatility all over the place.

Wow - CSCO is now getting annihilated in AH. I'm not able to listen to the CC at the moment but Chambers must have scared the daylights out of someone.

yes, he said -this is all 3rd hand thru Bills chat on Skype- that csco is closely tied to the state of the economy!

Re: Obtaining share certificates

Just got off the phone with a Scottrade rep, said $50 per certificate and it would take 4-6 weeks.

4-6 weeks!

Steve, re share certificates,

Yes BMO quoted me $75 a couple of years ago and don't forget you can't trade them until you register them back into your account, thats another $75 and a few more weeks.

Re: Obtaining share certificates

Just got off the phone with a Fidelity rep, said $15 per certificate and it would take 2-6 weeks.

Automotive Quality:

My company sells service repair contracts to auto/rv/marine dealers. Our rates reflect the cost of repairing the various models over life expectancy. Here's a rate comparison for a 5-year or 100,000 mile comprehensive contrac:
Honda Accord/Toyota Camry $633
Buick Lucerne $989
Ford Focus $654
Chevy Impala $792
Pontiac Bonneville $1230
Mercury Monterey $989
Nissan Altima $654
Saturn Sedan $989
Cadillac CTS $2174
BMW 3 Series $1359

Re: Obtaining share certificates

Reading the fine print in the Fidelity fee schedule, the transfer and ship certificate fee increases from $15 to $100 effective 2/11/2008. Pretty sneaky of the rep not to mention this little tidbit.

can someone clarify what the risk is that makes them want certificates delivered. I am having trouble seeing any devastating brokerage scenario that would lead me to worry this much, and I'm a great worrier.
I know Sinclair advocates this as well in his blog. I have assumed the only reason is just to make it hard for you to chicken out and sell on a whim. Does anyone have a specific threat scenario in mind? I have 4 accts at Ameritrade, so would like to hear opinions

Paul Van Eden appeared yesterday on BNN.ca with essentially the same message as the video this morning from Greenrush:

http://broadband.bnn.ca/bnn/?id=2122&vid=30193

Jesse's Crossroad Cafe predicts a move to test the lows followed by a big sustained bounce back to resistance. If that fails, I suspect he thinks it is crash time as crashes come from failed rallies off of defined last-ditch support. Interesting.

http://www.geocities.com/arthurcutten/jesse.html
TJ Marta was on Bloomberg TV with a very forthright interview that the interviewers thought was ridiculously bearish. I like when he starts talking about the circles of hell!:

http://www.bloomberg.com/news/av/

Thank you Fransix, thank you.

JRPauley,

I don't know specifically what could go wrong that would make paper certificates in my name in my home better than brokerage certificates. I think it is the same caution of taking money out of banks instead of trusting FDIC, or having gold and silver in your possession instead of GLD and SLV. So much of these so called assets are only electronic information in servers somewhere.

I'm only in the investigation phase, though I will definitely move non-trading positions into share certificates. I'm also considering the alternatives to reduce my assets to below the FDIC maximum at any given bank or brokerage. Also, when Bill says the buy of the generation is upon us, you can bet I'm trading electronic assets for physical assets.

It really is a small price to pay upfront for insurance against an electronic or systemic meltdown. I have never seen a bank run in the US or lived through a depression. I do not dismiss those possibilities in the current environment.

vinod- welcome to the world of gaming the market...

QLD is volatile...fwiw, my position basis is higher than yours, and honestly, although i'm always 'concerned' when a trade goes against me->it happens all the time (in other words, this is business as usual), and as long as you bought on weakness, you should have no problem either waiting out the weakness, or further trading the position to profitability...every reaction is an over-reaction, and it works both ways...

hang in there...

The blog has been working much better lately Bill. Sometimes a hair slower with increased traffic, but a high quality problem!

QLD-> btw, apart from the intraday low set january 23 this year, you would have to go back 18 months to august '06 to find an entry lower than your basis...

2nd Ave: Dang you just revealed a seasonal trade..buy the QQQQs in March and august.:) They are just taking it down for next month...

EEM- i have faith in human nature...i won't be holding the same QLD position i have now when it happens, but i can see people clamoring to buy it (again) at 120...(who was buying QID at 35, when BH and bg were loading up?)...my style is counter-trend->i will take gains playing with the trend also, of course, but they don't provide the same 'satisfaction'->nothing (for me) matches jumping into a selling frenzy, or watching a "V" (or inverted V) play out...

Thanks Bill and Steve C for the info on getting certificates in hand. I wasn't thinking of the short side properly, only the brokerage failure scenario

FranSix,
Thanks for the Van Eden link. I found it very entertaining. My summary of the interview: you've got to be crazy to deposit your money in a bank because they have none; your dollar is being devalued 15% per year by inflation and; I wouldn't be buying any junior stocks right now; top pick is physical gold. I think he dazed Howard Green.

One of my favorite books about market psychology is Selden's, Psychology of the Stock Market. I truly believe that every investor/trader should have this book--it's a 93 page 1/2 sized book--there are so many quotable things in it. Here's one that I'd like to share: Here's a gem from Selden's Psychology of the Stock Market

"To a great extent, we train our judgment to lend itself to our selfish interests. . . To make the greatest success it is necessary for the trader to forget entirely his own position in the market, his profits or losses, the relation of the present prices to the point where he bought or sold, and to fix his thoughts upon the position of the market. If the market is going down the trader must sell, no matter whether he has a profit or a loss, whether he bought a year ago or two minutes ago." (p. 57) You can find the book on Amazon here: Here's a gem from Selden's Psychology of the Stock Market

2nd_ave

All together I brought 500 of them
First 100 at 69.50
And last 100 at 67.90

I am not a day trader and will hold them as long as it takes
I got into this because in two year I have not made any money in my mutual fund which I hold for two years or more

I have decided to learn and do it myself
If I am down 25% by doing my self I will quit
And I have 100000 to play with

I have been reading this bog for over six month before I did my first trade

and I thank you for your advise

Another reason to get share certificates is dollar-cost averaging and no-commission trades using DRIPs.

Here's a Canadian-specific link.
http://www.canadianmoneysaver.ca/rc_drips_spp.aspx

But if there's some sort of electronic meltdown what's a piece of paper going to do for you anyway?

Glad I drive an Altima... even if it is made in Tennessee.

2nd ave: I hope you make lots of money on that QLD..there are bullish divergences on the SPX and DJI..and someone just paid...supposedly...$2.50 over bid in the AH on the EEM..bought 75,000 shares...maybe they know something....:)

Van Eeden is a great speaker. Green looked out of place and did not seem to know what Van Eeden was talking about. Loved his line on "you can't be a capitalist" if you don't have any capital. He says he sold his holdings 2 weeks ago and took a 25% cut (after gaining several hundred percent). His picks were actually 50% gold and 50% cash as in Canadian treasuries.

Here's the Bank Of Canada statistics pages:

http://epe.lac-bac.gc.ca/100/201/301/weekly_fin_stats/2008/

I don't know how to read this, but looks ok solvent.

wavesmash at February 6, 2008 7:16 PM

"But if there's some sort of electronic meltdown what's a piece of paper going to do for you anyway?"

Well you'll have the cert in your hands and not be waiting months or more to get hold of it after your broker had the meltdown. And you will have the option to walk across the street to another broker in good shape and register it for trading on day one.

On the other point it stops people from shorting your shares, but I always thought it reduced my options too much to actually get the shares. Now if I could just check a box on my trading account which stopped the shares from being loaned out, that would be nice. But if that was available at no cost then everyone would do it and the short market would cease to exist. So I guess there would have to be a cost associated, say 1 percent per year, then people would be selective on their choices.

Consider if you will that some of the price rises in junior stocks are wrong way short trades, which would never get off the ground if somebody was not in a short position over them.

Then again, the regulation would have to force any short trader to be liable for their contractual obligation when they settle at a higher price, or its all meaningless.

http://www.tinyurl.com/39hh3q

Another cable cut...

FranSix, re short trades

Yes in my early years I thought it was unpatriotic to shorts stocks, (how could someone make money betting a stock would go down). Then I learned it is just part of a working market, handled properly, just as it takes two sides to make a trade. The buyer is betting the stock will go up and the seller is betting the stock will go down (or at least stop going up, thats why he's selling).

Years ago another trader said to me "Think of the Shorters as a motivated supply of buyers who will be there to buy your shares at much higher prices"

A couple of questions:

Been hearing some chatter about a "Dual Currency System" being imposed. Any ideas what that is about?

Been holding some physical Au+Ag for some time. Having never sold in the US, is there some reporting that occurs though the local dealers? Is there a trip limit?

MBIA is apparently trying to raise another $750M by offering shares. I don't get it. Why bother? A Billion or two will make a difference to them. Their AAA rating will be laughable.

Sorry, "will not".

Bill and All, re Juniors on Canadian / European exchanges VS the US

I agree with the discussion last week with respect to the US having more dirty brokers manipulating the junior stocks and thus no one wants to list there. I also see problem for Juniors in the US when the SEC eliminated the uptick rule last year, July 6, 2007. This now allows shorters to continue shorting on the way down.

Now the TSE in Canada, for consistency also eliminated this rule (last sale rule in Canada) for interlisted stocks with the US. My current concern is that the Canadian regulators are also considering the total elimination in Canada as well. And I fear this could unleash more manipulation on the Canadian Juniors.

In general I thought the uptick short rule was a good one and helped with market stability, I think much of the recent volatility is due to program trading that can now go long or short for as long as they want and then change directions in a millisecond, driving markets to the daily extremes we have been seeing for several months.

Am I missing something, is there a good reason why the uptick rule was eliminated for the good of all. (other than HB&B)

Yes up to 5 cables now, (although 2 cuts are on the same cable)

Getting very concerning, pretty hard to imagine this is just a normal coincidence.

I wonder whats happening with shares in the big cable manufactures, although sub cable is only a small part of their business, Alcatel / Lucent, Tyco, NEC. The other way to play it would be in the fiber supplier end, Corning GLW or Fujitsu.

In the short term they will attempt to offload data flow over to other cables and satellite, but as traffic is growing exponentially more cables will be needed. satellite is really only good for bulk data transmission, the time delays are just too long for voice or interactive data and none of us will tolerate delays in this age of speed.

The N.A. auto industry is really a bellweather for the economy - at least as much as is the health of the real estate market. Both are sounding sick these days. I had a Cadillac STS with the 32 valve Northstar engine,and the beige leather was a nice touch for taking my daughter to her wedding. Now I drive a 4 cylinder 2.4 litre 2007 Camry SE with the full knowledge that I can, short of going for an exotic, buy any car on the market. The decision to change my "drivestyle" was not really an economic one. I want to drive smarter. However, I will say that my transportation profile now includes a few discount airfares each year for the same as what I previously laid out just to drive the STS. Everyone is slicing their pie differently these days and no market is immune to the changes going on. Investors must be aware that business going forward is not "as usual". There is a revolution going on in the consumer economy and this reality is another source of recessionary pressure.

EEMTRADER,

no, I don't.

I do recall Kaimu wrote about it a while back. Maybe he can repeat his logic. I think he believes 5 plus is meaningful? downturn?? Maybe one of our cut and paste buddies has it handy.

I'm waiting for "the trade of the generation", but I do trade ABX intraday / overnight when I catch the lows.

disclosure: I have GS calls, Puts on QID, DXD. small amounts so I am comfortable. Mostly watching and waiting.

Light and Love to all.

Warren Buffett blames banks for meltdown
By James Quinn Wall Street Correspondent
Last Updated: 1:35am GMT 07/02/2008

Billionaire Warren Buffett has accused major investment banks of creating their own downfalls through the collapse in the US sub-prime mortgage market.

Mr Buffett, known as the "Sage of Omaha" for his investment record, suggested that the banking fraternity has only itself to blame for its recent problems which have seen banks write off more than $130bn (£66.3bn) so far.

"It's sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end," Mr Buffett said, making reference to the American soft drink.

The septuagenarian investor, speaking in Toronto, said that in spite of the meltdown in the sub-prime mortgage market and the impact on the banking system, funds remain available.

"I wouldn't quite call it a credit crunch," he said. "Money is available, and it's really quite cheap because of the lowering of rates that has taken place."

However, he said what had taken place was "a re-pricing of risk," leading to an "unavailability of what I might call 'dumb money', of which there was plenty around a year ago."

Mr Buffett also reiterated his negative views on the subject of the US dollar, saying that over the next five-10 years, the dollar could seriously devalue if the US trade deficit persists. As a result, Mr Buffett - who famously bet $21.8bn against the dollar in 2005, a position he has since unwound - stressed he will continue to look beyond the US for investments in part to hedge against the dollar's weakness.

His views echo those of fellow billionaire George Soros, who has taken a negative stance against the dollar for some time.

Mr Soros has warned that the dollar's status as the world's reserve currency is drawing to an end, thanks in part to the financial crisis on Wall Street.

In spite of its recent strengthening, the dollar has fallen against major curencies such as the euro and sterling over the past 18 months.

http://tinyurl.com/3d4uxp

“In order to increase transparency and improve investor confidence, the Government will consult on a new 'gold standard' for covered bonds and mortgage-backed securities - which will help not just the housing market but wider economic growth in these uncertain times."

Darling set on new regulations for markets
By Edmund Conway, Economics Editor
Last Updated: 1:22am GMT 07/02/2008

The Chancellor is clearing the ground for new regulations on financial markets in the wake of the credit crunch, pledging to create a "gold standard" to judge the quality of key asset-backed securities.

Alistair Darling last night promised to use next month's Budget to publish a review into the problems facing financial markets.

http://tinyurl.com/2rz8f5

Leisa:

I have read from the book on many occasions. For those willing to read it online Google has a copy of it on its book database here:

http://tinyurl.com/2pxnfa

happy reading!

More on Buffet:

This was sent to me today.....

"Any investor should be able to answer the following questions before buying shares in any firm. This list was prepared by Warren’s ex-daughter-in-law, Mary Buffett, for her excellent book Buffettology.

1) Is the company in an industry with good economics, i.e., not an industry competing on price? Does the company have a consumer monopoly or brand name that commands loyalty? Can anyone with an abundance of resources compete successfully with the company?

2) Are the Owner Earnings on an upward trend with good and consistent margins?

3) Is the debt-to-equity ratio low, or is the earnings-to-debt ratio high, i.e. can the company repay debt even in years when earnings are lower than average?

4)Does the company have high and consistent returns on invested capital?

5)Does the company retain earnings for growth?

6) The business should not have high maintenance cost of operations, high capital expenditure or investment cash outflow. This is not the same as investing to expand capacity.

7)Does the company reinvest earnings in good business opportunities? Does management have a good track record of profiting from these investments?

8) Is the company free to adjust prices for inflation?
Buffett also concentrates when he buys. For its size, Buffet’s portfolio has few stocks. To make additions to the portfolio, he will wait years for a market correction. But once a downturn comes, he will buy millions of shares of solid businesses at reasonable prices. "

.......He has purchased just under 3 million shares of Burlington Northern in 2008 in 10 increments.

Buffett sitting on his wallet

The Globe and Mail
Wednesday, February 06, 2008

http://tinyurl.com/2k2gbo

"To make additions to the portfolio, he will wait years for a market correction. But once a downturn comes, he will buy millions of shares of solid businesses at reasonable prices."

Which is why I'm adding BRK on pullbacks in this bear market. If he's doing the same then I have WB buying for me.

vinod -

Most traders keep their position until it proves to be wrong for them. I say don't keep any
position unless it proves to be correct.

vinod -

Always remember this : He who loses best will win.

Exxon's 2007 Tax Bill: $30 Billion
posted on: February 05, 2008

Corporate profits receive a lot of media attention, but what receives considerably less attention are the corporate taxes paid on corporate profits. Do a Google search for "Exxon profits" and you'll get about 8,000 hits. Now try "Exxon taxes" and you'll get a little more than 300 hits. That's a ratio of about 33 to 1.

I'm pretty sure that Exxon's tax payment in 2007 of $30 billion (that's $30,000,000,000) is a record, exceeding the $28 billion it paid last year.

By the way, Exxon pays taxes at a rate of 41% on its taxable income!

[Update: The $40.6 billion and $39.5 billion figures are after-tax profits. For 2006, Exxon's EBT (earnings before tax) was $67.4 billion, it paid $27.9 billion in taxes (41.4% tax rate), and its NIAT (net income after tax), or profit, was $39.5 billion.]

Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. That's $27,000,000,000 per year, a number so large it's hard to comprehend. Here's one way to put Exxon's taxes into perspective.

According to IRS data for 2004, the most recent year available:

Total number of tax returns: 130 million

Number of Tax Returns for the Bottom 50%: 65 million

Adjusted Gross Income for the Bottom 50%: $922 billion

Total Income Tax Paid by the Bottom 50%: $27.4 billion

Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27.4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67.4 billion in taxable income, $27.9 billion in taxes).

http://tinyurl.com/2y9bkw

Starting out with a useless search ratio from a meaningless Google search leads us into an artical full of inaccuracies.

If a student submitted such a paper to this "PhD", I would hope it would receive an F.

Total taxation on individuals are so diverse and subversive as to be almost unestimatable. None of those included in this article.

I would bet (a sure bet) that many Caraistas would be included in the lower 50% of income earners just by the sheer size of the sample.

I wonder if anyone of them would care to comment on your "3% marginal tax rate" according to this article? LOL!!!

Moneygenie....you have to ask yourself some questions before taking the bait. Do you pay 3% on your AGI?

Then let us ask, in what way is Exxon different from Microsoft? In what way might Exxon impact the country/citizenry that MSFT doesn't, in fact can't?

moneygenie,
Pull up a 5 year chart of XOM's share price. SP has tripled in 5 years. Shareholders have laughed all the way to the bank.

The transports seem unusually strong to me. Here's a place where there are dualing dynamics. Dynamic one is the slowing economy to put downward pressure on business. Dynamic two is the reduction in fuel costs with the price of oil going down. I'm not clever enough to weight the two dynamics and understand what effect that might have on prices. However, it seems to me that the transports--particularly rails are getting ahead of themselves. Their top line revenues are not growing robustly--and I'm sure that their pricing environment will get a little tougher.

It's really a magician's market. goes up or down for no legitimate reason. I have been studying cara 100, ibd 100, and can slim stocks and there are some good entries but i really shouldn't.

Market looks tired. oil is high, inflation is high, fraud by hb&b is high, wages and jobs down, housing down, consumers down. if i buy and my holdings go up chased and was lucky. if they go down it was me trying to swim against the current with only one arm and one leg.

I'll sit tight and keep saving until the gold trade occurs.

let me cancel my wire transfer now.