So why did my fuel prices go up in February and the Labor Dept reports today that fuel prices dropped in February.

How can they get away with such blatant lying??

And the futures respond accordingly.

It's all so manipulated now.

I think they're setting the market up to fall hard after the FED cuts by another 3/4 to one point Tuesday. If they can manipulate the market up by 500-600 points before then and it drops 500-600 points after the cut then we're right back where we started instead of at DOW 11,300.

If this looks like it is happening my strategy will be to buy calls on TLT as yields will drop back down again too after the manipulation is over.

The only way I see a sustained rally coming after the FED cut is if they only cut .25 or don't cut at all or change their statement to say that's the end of the cuts.

What do you all think?

Rob.

SMN- 36.85 ask 38,900 shares...i hit that ask, watched the supply disappear (some even lower than 36.85), and needless to say, my bid went unfilled...how many ways can you say WTF...

Interesting divergences so far today:

Bear Stearns gets "Saved" by the NY FED through JP Morgan but it's stock is still down.

The market is up but so are treasury prices!

Rob.

Cara 100 Update:

Price Targets Raised @ RBC:

ECA - $81 to $85
GG - $44 to $51
SLW - $20 to $22

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

Great comments this morning, Bill.

Anyone else having problems with Scottrade Elite this morning? Looks like its loading nicely, then I get the MS message that its had to close and is it OK to send a report to MS. I've tried several times, restarted my PC, still no good.

DUG- reopening at 37.54...

Now the treasuries and Market are trading normally.

I guess the reality that Bear had to be saved by the NY Fed is being taken as the bad news that it is.

Rob.

DUG- out at 38.39...

Anyone short Bear or holding Bear puts is loving life right now.

It's falling like a rock!!!!!

Rob.

Interesting...I was picking through the SKF /SRS bones this AM premkt and found SKF at 120 and SRS at avg basis of 109. Bummer!

It's come to the point that you simply play this like a bull in reverse...just ultrashort the bounces....

Price index is flat.

Rob asks: "How can they get away with such blatant lying??"

They're in control of the information.

Why is it reported flat today? The President is speaking later on the economy. Can't have him look bad. That's why.

After reading Bill's report taking profits:

Out of RGLD @ 31.85

time to press shorts...

closing FXP EEV

I'm thinking that the damage done to Bear today has to mean that they have 28 days left and then they'll have to declare bankruptcy.

Think about it. If they have to go to the NY FED for money, that means they can't get it anywhere else. So in 28 days when this loan expires they're dead!!!

Rob.

To friends g034, stockman, Chief Falling Knives, gemma, Leisa, 2ave and All Who I Missed:

Yesterday I entered into an agreement to sell the market model and timing system which has worked so well for me. 2008 continues to be an up year with returns of 4.3% in the Growth Portfolio, 4.8% in Absolute Return and 15.1% in Commodities. As part of the agreement I am required to monitor it and "interpret" it. ;) (Yes, I finally gave in.)I am not allowed to comment on the markets or the model so long as the rights are being held. Lest some of you think this is a lucrative deal, I assure you it is not a life-changer.

I haven't been an active participant here for a while now but remember many on-line friendships. Thank you to all who shared, corresponded and commiserated over the years.

Now I have to go mind my IWM puts. I see they're up 60% today. :)

Kindest Regards,

Remember all the extraordinary BSC put volume on MAR 25 & 30 strike prices? BSC in the 20's now.

Now watch them buy the short term calls in the 30's.

closing shorts....

Congratulations MarkM and best of luck. We missed your insights, but know you're watching!

Bill,

Excellent comment this morning. None of the hysterics that so afflict many commentators, just the facts and the conclusions that naturally flow from them.

Speaking as one half of a Mom & Pop -- not a particularly skilled trader though I'm learning a lot from you and the Cara-istas here -- I've decided to be almost all in cash until that cash can buy honestly-valued investments. HB&B may be "getting theirs" now, but it won't long before they get a whole lot more than they bargained for.

Best to all here.

MarkM- are you checking in to tell us you can't make any comments about the market? ;)

seriously, congrats...how many black boxes work at all, let alone work that well...

the BVD-OE option I mentioned yesterday selling at .30 is now at 5.7...a change of over 1200% from yesterday....a lot of people became super rich today...

finger lakes - if you search The Big Picture blog ( I can't find it right now) apparently the BLS only takes one day of gas prices into account. If they check prices on that day and they happen to be lower, then it looks like prices have "moderated." I am not quite sure I am stating it correctly, but it is something to that effect.

Rob D,
It definitely sounds like bullshit either way, especially when you compare it with my real and actual receipts.

How about this crazy volatility today?? Dow from 12177 to 11846 and now back to 12035 and now heading back down!!

I'm so glad to be in cash in this craziness!!

I can easily envision a 1000 point drop soon

Rob.

craig- playing "Ultimate Ttrading" today-> taking your silence to mean you're playing the same SMN/DUG pinball game...thinking of riding my last positions to the finish line...

got yhoo @ 27.0

I loved Art Cashin this morning saying that the professional shorts are a bunch of kids that never seen a bear market before. They are sissies. Add to that the Bond vigilantes are asleep are reasons this market is being held together with gum and duct tape.

Maybe go34 can add some color to why the shorts have no conviction.

Wow - I missed the opportunity to unload the FXP on the massive spike down past 106. I guess its the price I pay for walking away from the screen for five minutes! Still holding FXP from yesterday - I think I'll get another great selling opp. before days end. Really, who wants to close out today with much riding on the long side? Chinese markets were treading their 52-low into the close. A long weekend for Chinese investors.

I have been a proponent that decoupling in Emerging could happen but I concede to Bill this morning as he gets my benefit of the doubt. Thanks Bill for all your thoughts.

2nd: My platform was running literally 5 minutes behind the market at the peak of the move.

I got in very low on SRS/SKF (107.98/120) and rode them to their highs and stepped off, so I'm more or less flat except SBUX/RRPIX/CHSCP.

Just waiting for the Fed or some other schmuck to spread another rumor to reload....
Like shooting fish in a barrel.

Billy...

Hold on I think better prices are ahead for FXP..

MARKM...Congrats..I am a dork, but when I first started coming to Bill's site I would scour the daily text for Marks comments...

I knew he had something...

For those of you looking for the next broker/dealer in trouble, I've heard Lehman has a worse balance sheet than Bear.

Someone said the same yesterday on Bloomberg.

The reasoning is the ultras, which didn't exist before, leads traders to trade....and not hold short positions where HB&B could get an easier shot at their $$$. So they are really whining that the 2X moves make traders jump in and out before they can trap them in a squeeze.

Fricking whiners.

geckojb .this link to country years to date returns chart on the 10 March post shows to me the myth of decoupling.

http://tinyurl.com/364mum

India -18% ,Russia -9.9% and China -17% markets performing worse than US -9% and UK -9% markets so far this year. Petro dollar countries doing the best eg Oman+18%.Also Brazil +1% best of the BRIC bunch.

Johnuk, the table can be misleading because it uses local currency and ignores the USD. Brazil's Real is up somewhere around 30-40% vs the USD in the last year or so, so that should be added if you are comparing to the US market. In other words, the DJIA returns are highly overstated.

“We don't see any pressure on our liquidity, let alone a liquidity crisis,” Mr Schwartz told CNBC yesterday. He said that Bear had finished fiscal 2007 with $17 billion of cash sitting as a“liquidity cushion”. He added: “That cushion has been virtually unchanged. We're in constant dialogue with all the major dealers, and I have not been made aware of anybody not taking our credit.”

Video link:

http://tinyurl.com/26h25n

http://tinyurl.com/27rkq5

Hi Si02 the returns are year to date ie less than 3 months.

Is there something wrong with the TSX? I can't get quotes newer than 10:00 EDST.

This is incredicble to me that the Fed has deemed Bear to big to fail and is allowing JPM to give em their worthless paper in return for cash. The Fed must be really afraid of a death spiral here.

basketguy

I think there are better prices ahead for FXP as well. Looks like we busted through the resistance at 102 and are testing it now as support.

I just don't see who'll be out to save the market today - plus HBB will be needing to throw one of their market tantrums before Fed makes their rate cut decision. They like to create extreme market chaos to coerce the Fed into deep rate cuts. So what would accomplish this better than a market plunge to end the week?

Here's one of the reasons why the markets are doing what you think they are doing. Yes, rigging of markets, no surprise.

http://www.charlotte.com/business/story/536123.html

the path of least resistance right now is DOWN...

Bush is on BNN now. Should be interesting.

What is the pres gonna say?

Can there be anything left?

oh the humanity

http://tinyurl.com/28vp58
The global gold frenzy looks to be continuing, with the price topping $1,000/ounce for the first time on Wednesday. With exchange-traded funds also attracting a lot of investor interest, it's not surprising that gold-based ETFs are proliferating. The biggest of them all is the streetTRACKS Gold Fund (GLD) at $20.5 billion. Currently, in addition to the NYSE Arca, it also listed on the Mexican and Singapore stock exchanges.
Now it appears investors in Japan and Hong Kong will soon be able to buy into GLD as well. The World Gold Council, which sponsors the vast majority of the gold-backed securities currently trading around the world, has said that it expects to cross-list the fund on exchanges in both markets by the end of the third quarter, according to a recent Reuters article.

wow . .. BSC @ 33

got more yhoo @26.8

The tell will be Goldman...If they go down hard from big write-offs, they everyone will know for sure that nobody is immune. That will be 1000 point drop time and then the real helicopters will come out.

Finger Lakes Rob - As a noob, I totally agree with the sentiment expressed by many others here...stay in CASH. For now, its great to learn from pros like Bill and watch people like 2nd, Craig, g034, and EEM play with the big boys (stick and move, stick and move!). I haven't reached Zen mode yet, meaning I can't totally keep emotions in check and "go with the flow." Watching and learning...I'm 32, so there will be many more cycles like this in my investing life. With another baby on the way and a house to buy soon, return OF capital still more important...

Bush on TV: "I have great respect for Ben Bernake." = "Great job Brownie."

The idiot prince is talking. Good god, is there any wonder how things got so bad in every way with such a completely corrupt incompetent in the WH for 8 years?

"The Fed is independent"

Translation:

We have the Fed by the balls and picked Bernanke b/c he id s printer.

Short term symmetrical triangle in Dow; breakout looks like 200 more pts down this afternoon to 11800.

Ben: "Never met a bailout I didn't like."

To: MarkM:
From: Chief Falling Knives

Think of you often when gleaning through the stuff here trying to find guidance like you gave back in the ‘beginning‘. Now days it’s like hens teeth to find a nugget since most have disappeared or turned silent.
Best to you and your path that reads as if there is some AU lining to it. I pray it has not taken you away from your children as this market can if you let it.

Aurator - Please don't compare Bernanke to Brownie!

Brownie's qualification to run FEMA was breeding Arabian stallions, and being a political hack.

Bernanke's qualification to run the FED was being a brilliant economist who ran the top academic economics department in the country, and served on the Fed board of governors.

Sure he's having a tough time in the rough-and-tumble of Washington, but he didn't creaate the mess. Check out:

themessthatgreenspanmade.com

Everybody likes to beat up on Ben, but I don't think it's fair to compare him to Brownie!

BSC - I bet Joseph C. Lewis is one grumpy billionaire today!

In additon to all the toxic debt on the balance sheets of these IBanks, they also have departments full of employees who specialize in selling derivative products that have virtually seized to exist.

So even after the toxic debt is cleared (we're 1/2 way, right S&P?) where will all of these new profits come from? Will there be any new products to replace the old?

Also, did anyone else see extreme irony in the whole S&P headline yesterday? One week the entire world is pointing fingers at S&P for miscalculating risks/ratings in the ABCP markets and the next week S&P's new status report is considered market gospel? Gimme a break.

Closing out puts bought yesterday MAR 22.5 INTC $1.15, almost 50% gain.

Hi!

Nice.

PoG is being so held back by shorts that I can hardly imagine what will happen once the squeeze starts.

Just my 2 cents, but I'm with Jock on that perspective. Have you ever taken over or been sent into a new position and realize you inherited a complete mess?

Always remember Greenspan was encouraging the common man and woman to select adjustable rate mortgages when the interest rates were at an all time low!

Jock: I did not compare Ben to Brownie. I compared Bush's comment about Ben to Bush's comment about Brownie.

Agree, Greenspam caused the mess. But Ben is trying to fix a problem caused by too much money supply and credit, with MORE money and credit. Ben is compounding the problem in a manner such that when it finally blows, it will be much worse than if he had done absolutely nothing.

First, do no harm...

Going to cash too, instead of riding the ultras up and down. No point. Just watch the train wreck for a while. Following the blog here has been extremely helpful in staying sane.

BSC, Anyone have a phone number to the Bear Stearns conference call?

No info at Fidelity or Bears web site. TIA

Peter Schiff pointed out in his weekly broadcast, that the Fed is buying risky mortgages with US Dollars (Ok it's claimed to be 30 day loans, but we all know where that is going). This creates a currency increasingly backed by mortgages. As the mortgages continue to collapse, the dollar should weaken at an accelerating pace.

Looking for the USD to pause at about 67 on the DXY, on it's way to 40. For 2009, we can look forward to $9 gasoline and $40 pizzas.

I've been tied up and have not yet posted,

"How 'bout a standing ovation for $1000 Gold!"

Bear Stearns conference call number:

dial toll-free 1-800-374-2412

Telestar3d - Bear Stearns conference call on CNBC at 12:30pm

In cash waiting for the next trade setup...

Well that was a waste of time listening to Bush. He offered nothing new that I can discern. Told the banks to work with credit worthy individuals to help them refinance their homes. Chastised Congress and asked them to support free trade with Colombia, welcome sovereign wealth fund investment and be more accomodating to the development of oil refineries and oil exploration.

Bear Stearns Cos., one of Wall Street's venerable investment banks, received a bailout Friday by the federal government and JPMorgan Chase & Co. in a surprise, last-ditch effort to save the 86-year old institution.

BSC up 2 pts

It is Friday again
Lets see what happens after 3.00 p.m
No one wants to hold equity going into weekend

Oh, my, this was a funny morning.
I had a small order in for BSC Mar25's @ 0.35 just for a speculative lark, you know. Was watching things PM after their 30-75b wd news came out and decided the market was going to treat the bad news as good, thought why even risk the small amount I had on, canceled the order and went to a meeting.

Heheh, guess you know how the rest of the story goes!

20-20 hidesight (i.e. looking at the early day activity), I could have gotten the fill @0.35 since there was no gap down at open. At least one order did fill at that level. I still would have missed the top at 7.40, but what the heck 11x wouldn't have been too bad.

Bear Stearns won't let CNBC play the conference call live on TV. Ben B talking about housing in 30 minutes.

Bear Stearns blocks CNBC from carrying conference call live.

How can they do that? It's an open public call, if CNBC had (*alls) you know it would carry it anyway, but we all know that CNBC had a sex change operation.

LDK up 11%

Aurator,

hear hear.

I would like to see PoG close above 1.000 though.

Quote:
Those wishing to listen to today's call should dial toll-free 1-800-374-2412 (or 1-706-634-7253 for international callers) at least 10 minutes prior to the start of the call to ensure connection to the conference. The conference call will also be accessible through the firm's Web site at . For those unable to listen to the live broadcast of the call, a replay will be available later this afternoon on the company's Web site or by dialing 1-800-642-1687 (or 1-706-645-9291 for international callers). The passcode for the replay is 39764449.

re-copied a post from BSC website

In and out of COF puts again. They are expensive but are turning out to be a perpetual money machine. Might buy lome longet term way out of the money, and trade the near money puts a month out.

Bear conference call live on Bloomberg.

This is wild speculation but I think that law recently passed allowing fraudulent SEC filings if it is in the interest of national security might start to be used. All the president needs to do is declare the financial crisis a threat to national security.

Anyone else have this thought?

closing ultrashorts (again)...

Anyone besides me riding exponential move in KBX? No idea where it will end, but a strong trend, possibly from short covering.

On the other hand, what happened to SDRG? That hurt, but I'm still holding.

BSC trading volume exceeds entire share float!

BSC had run on capital by major clients. I read that to mean hedge funds are blowing up and are desperate for cash. Further evidence is Oil falling which may be hedgies grabbing some profits. They all turn like a school of fish.

DUG up 4.2%. I still have the 40 call, may close this PM.

I am eyeing small gold/silver producers and more advanced exploration co.s if/when the babies get thrown out w/ the bathwater this afternoon. Eyeing WGW specifically.

If anyone else has good ideas in the small producers/advanced explorers, please do share.

A few others I am eyeing for a buy are ECU.TO, PIK.V, GIX.V, EET.TO, OZN

All ideas appreciated!

Billy-

I'd be careful with these as the juniors are not going to move until they are able to raise money. NovaGold just pulled an offering because the price for capital was too high.

That being said I think Exmin and ValGold are being given away for next to nothing. Exmin has 30% of the Morris mine recently brought back into production. They will use that cash flow to explore their other properties. A bigger junior, Minefinders looks cheap, with mine startup this quarter and no liquidity needs.

I was looking into Eastmain today. Looks very promising but is spiking too much for my liking. I am a bottom feeder. They don't have production though.

Billy Sundance,

Etruscan and ECU appear undervalued compared to the silver/gold ratio.

Re: Investing in junior precious metals companies for Americans.

For American investors, any gold company listed on the venture exchange in Canada also has a listing on the pink sheets. This was part of the outcome of NAFTA. This goes for any Canadian listed gold company or any company for that matter. Sometimes a Canadian company on the TSX is listed on the AMEX. To find it, you just go to yahoo! and look up a stock name, and you will get the symbol on the pink sheets.

So there is no need to pay extra fees or have a special broker for this kind of thing.

For instance, the junior PM explorer that I'm holding, GBN.V has a pink sheet listing of

http://finance.yahoo.com/q?s=GBRIF.PK.

In order to get quotes, just look up the Canadian listing. In order to get the latest filings, just go to SEDAR.com and look up the company name where you can view all of the Canadian listed companies. If they're listed on the AMEX or NASDAQ, then filings will also be listed on EDGAR.

Investing in junior precious metals companies is a very risky proposition as you will no doubt find out.

Have A Nice Day

F6

Ben's new tighter mortgage lending standards proposal out to put a padlock on top of the deadbolt discouraging new home lending. Horse left the barn 2 years ago Ben.

If he wanted to save home prices, he ought to remove all regulation and have a free for all just like 2005 and 2006.

$VIX is at 3 std dev on the daily Bollinger Band...

So Bear says they ran into trouble yesterday when too many customers pulled accounts. Exactly like a bank run - crisis of confidence. More credence for Bill's prediction that more will fail. I would bet Lehman is up next. The stock just start free falling through support a few weeks ago for no apparent reason.

After 1270 I think big support is at 1180 - the 50% retrace of the whole bull move.

Moab/Fransix

Thanks for the input. I am being very conservative as far as juniors. Like you said, Moab, financings will be difficult for junior explorers.

That is why I am going for smaller companies that actually have some production/cash flow and in some cases those companies that already have financed their projects and are on their way to production day. I think these companies that can build the cash flow and not have to dilute stock to finance will be the ones to gobble up the juniors on the cheap!

As far as ValGold - I already own a little bit. great land package, competent management, but what the heck are they doing down there? No relevant press releases for like 2 months now. throw us a bone Mr. Wilkinson!

well considering how little money i have i am very nervous. i hate to sell my good dividend paying stocks but everything keeps going down and down. any advice? thanks.

Waiting for news releases in precious metal exploration companies can be quite agonizing, especially when the shares underperform the fundamentals.

The fundamentals have never been stronger, and the senior gold shares are fully priced and indexed to bullion. They are also valued in around ~$200/oz. in the ground, while many junior companies are valued at ~$50/oz. in the ground.

These junior companies appear like perennial stock market dogs, even though they are basically sitting on billions of dollars of what is literally a pile of money.

But we are at a phase when people just can't seem to differentiate between precious metals and base metals lumping them all in to one category.

Moreover, all of these companies lie in some form or another, some of them are stock market darlings and greatly overvalued.

The general rule of thumb is that nobody has the power to determine beforehand what a gold deposit will look like eventually. To make matters more complicated, people get starry-eyed when it comes to gold. So your own due diligence in these matters is worth every effort.

In terms of seasonality, the $USD appears to be in a death rattle, so there would be a lot of interest in Canadian listed gold stocks solely from the point of view of defending one's capital. Its a layup that if the dollar continues to decline, then the only way to defend against currency debauch will be the convenient pink sheet listing of just about any gold company of merit.

To be sure, this will be temporary because once the $USD stabilizes, then this trade is probably at an end. For the forseeable future, however, short term treasuries are sliding into negative territory, so it might be a suggestion to make use of the convenient pink sheet listings to protect against the slide in the markets.

The VIX pop is troubling. Possibly signaling a crash on Monday if the foreign markets go sour over the weekend. Were it not for the next Fed cut, I'd be very concerned, but how much of the cut is alrady priced in?

Very short here and think I'll sit pat rather than bail before the cut. Don't think the cut will make much difference, and we have got to be getting close to the end.

Ben on TV again saying his short term cuts will help mortgage resets. Clueless, as the longer term rates are not cooperating.

BSC off 37%. I think it's a symptom of a huge problem, the "lump under the rug". Almost bought some Bear puts yesterday and am kicking self. Looking for the next dead man walking who will get a visit from the Men in Green.

Aurator..

They already have .75 priced in...1% maybe...But It ain't gonna help now...

Overstock.com CEO and founder goes cloak and dagger:

http://tinyurl.com/3a88vj

I found it to be insightful reading and thought I'd pass it on. While generally understanding market manipulation,I am just beginning to understand the particulars.
The comments I read here at Cara help trmendously.

Thanks.

FranSix - inevitably, there will be a boom and then a bust in the gold market. Juniors are sitting on billions IF they can get it out of the ground fast enough to participate in the remainder of the boom.

Thats how I see it and why some of the discounting in the juniors is justified. What if by the time they can pour gold prices have already gone to $2000 and back down to $800?

Its a timing issue.

LEH off over 11%. Enjoying the panorama from the handbasket.

Sold 1/4 position of FXP from yesterday @ 106.62.

$vix above 30 have been associated with short term lows.....could be today..could be monday...

No recollection of $vix over 30 warning of a crash...volatility bands snap back to the mean..

Anything can happen..check your statistics and probabilities before trading...:)

Another 1/4 of FXP sold @ 106.77

Breadth is insanely negative.

Sentinment is incredibly negative as well.

Buy when they are laughing ..sell when they are crying, or is it the other way around? :)

volatile market with low volume - thats a traders nightmare

BSC cannot be bought by a bank (e.g., JPM) because they are not insured by FDIC. JPM is just the conduit for them to get Fed money.

Is LEH insured? Who else is a PD that is not insured by FDIC?

So may stocks on my watch list at 52 week lows, it's hard to keep my finger off the buy button.

VIX in 1987:

"... While the level of 50 marks a normal VIX extreme in recent years, a contrarian speculation buy signal, there was one stunning event in history where the VIX actually exploded to almost unthinkable heights. On October 19th, 1987 the VIX rocketed up to close at the breathtaking level of 150! Merely one trading day earlier it had closed at 36, a normal level. Over the next five trading days, the VIX closed above the staggering level of 100 three more times.

From October 19th to October 30th the VIX closed above 60 for the entire ten trading-day stretch, an unprecedented development never seen before or since. On a long-term VIX chart, this huge anomaly sticks out like a central banker at a rap concert. This mega-VIX spike was an incredible event that will go down forever in the annals of market legend. ..." - Adam Hamilton

Do you really think this is a bottom? In an EW 3 of iii down?

FOX Business commentators declare BSC will not survive the weekend, and will likely be bought by JPM. Telling that JPM had to get the money from the FED, just to do the bailout.

I know I have posted a lot today but an important thought just hit me.

We know the brokers have been making margin calls on hedge funds. Perhaps too many of Bear's client hedge funds defaulted on their margin calls and left Bear with unsellable collateral. If so, this is the cascading counterparty risk we have been talking about. Sound plausible?

If gold prices go back down to $800, or say correct into the $700 territory, then companies with sufficient resources to carry on business will be profitable, and yes their share prices will correct as well.

But as it stands, its very easy to tell RIGHT NOW how undervalued/fair-priced/overvalued a precious metal company is by comparing it with the $CDN gold price, or my hypothesis that the silver/gold ratio is the determinant.

But people with MBA's and long experience with liquid large cap companies trading day in day out have difficulty separating in their minds why precious metals may be a surer investment than say, a brokerage.

Its fairly daunting to invest in an undervalued, no bid company and nobody with any capital or circumstance would be inclined to place hard earned cash into it. But look at treasuries. Their interest rates have declined precipitously as their dollar value declines. A very bad investment, imo.

People prefer leveraged futures contracts with imaginary outcomes to the hard fact of gold as money, because it gives the feeling that a speculative return is always better.

My personal opinion on that is trading in prices has so rotted out people's minds with complacency, that they can no longer tell what's money because the cost of capital and risk of losses have been offloaded onto counterparties, like pensions funds and glossed over with leverage.

Its a lot like this: If the risk of losses in the stock market are part of the game and everyone of the same means loses their money in the same way, then it becomes acceptable to do so, and believe temporarily in blatant misreprentations, so as to avoid social embarassment. A very costy proposition, imo.

Last 1/2 FXP sold at $107.5 - there are probably a couple more dollars to be had today but I don't want to be greedy. Looking to pick up some of those miners on the cheap now.

Moab,
I think you're right on. The cascade of failures has started. I thought they would hold until after the FED meeting but that's usually how well my timing sense is.

Carlyle Capital got the ball rolling and must have been really tied to Bear to make Bear roll over and that means JP Morgan Chase must be really tied to Bear to step in and Save Bear with the FED money.

If the failures keep cascading like this we'll all see just how powerless the FED is in a real crisis.

Rob.

In for some LEH April 40 puts. HUGE volume.

IWM Apr 62 puts up 73% on the day.
DIA Apr 117 put up 65% on the day.

I take it the market is not calling a bottom.

Oh, and by the way,

So much for the FED rally this week right??

It's like they propped the market up because they knew this Carlyle-Bear news was coming so we can end with an even week instead of a 800 point down week.

Rob.

Finally had to reach for the Gaviscon.

im growing exhausted watching canadian gold shares actually down now after the action of the POG the past 2 days.

starting to look at the Canadian Central fund
for further PM allocations.

im wondering if the gold shares will share a similar fate of the canadian energy companies who after oil ran up so far have traded sideways the past few years, every step of the way analysts saying that once the market values their underlying asset the prices will move.

now oil is looking a bit toppy, the technicals on the XEG (canadian energy ETF) are weakening along w/ the market, and it seems to be the same story:

the stocks run up a bit but not in line with teh underlying commodity, but fall just as hard and fast if the underlying commodity falls, all the while people proclaim the stocks are cheap due to relative valuations.

on a separate note, why do i get the feeling a 75 point cut in the rates will not make gold jump on tuesday, if anything the US may stabilize for a while... its nuts but its this barfy feeling im getting. i hope im wrong considering im still long gold with about %25 cash waiting to continue building a position.

Dick Bove of Punk, Ziegel & Co. was on BNN last hour discussing the BSC issue and bank liquidity in general. For some strange reason he didn't seem very bullish on the whole situation. I wouldn't be surprised if he downgraded BSC from "Market Perform" to "Sell" for the third time since July, 2007. :-)

LEH April 40 puts up 242% on the day!

Anybody have a prediction for the final trading hour?

Adventurous types, re. post from 3 days ago:

FXP calls:

March 85 from $4.60 to $10.30 to $24

March 90 from $3 to $7.20 to $19

March 95 from $1.85 to 4.50 to $15

March 100 from $1.45 to $3.30 to $11

Sold all 90s and 100s for an average gain of ~470%.

dr cosa

Yes, that's the exact word. Stressful, exhausting.

Re: Treasuries

To further the discussion, we are seeing declines in treasury yields. To be sure, a decline of yields INTO THE NEGATIVE is a sign that deflation is already here and a black swan in the markets.

BullHunter: No clue..trade better when I am sober and flexible , open to all possibilities. and differing points oview. Equity curve is what counts..market too volatile. What do you think is going to happen in the last hour?

EEMTRADER,

After watching the nefarious machinations of the market this week, I'm also clueless, but ready for anything.

Regards

LEH Mar ATM calls/puts at 220% Ivol w/ 8 days to go. Does anyone think that's a tad expensive? Theoretically ivol equates to likelihood of closing in the money. yet both the 40 call & put can't close in the money. Any thoughts on these ?

I say we finish weak and near the Monday lows of 1272, 2168, and 11732. Who wants to be long over the weekend?

Sio2,
Nice return!!! Too bad I didn't have the guts. It's too soon after vacation though. By the middle of next week, I should be ready to come out shooting again.

Rob.

FranSix, what do you mean by a decline of yields into the negative? Do you mean compared to inflation?

ALOHA !!

From Mises today ...
"To Austrian economists, the so-called international credit market crisis is a prima facie case of the inherent destructive tendency of government-controlled paper money: it is the consequence of an excessive expansion of credit and money, which encourages uneconomic investment and leads to unsustainable debt burdens. The inflation-provoked cluster of errors (this time in the financial sphere) eventually triggers an economic and political disaster.

Once the inflation-fueled boom (the time span in which malinvestment occurs) is about to turn into bust (the period in which malinvestment is corrected), the government-sponsored central bank steps in and lowers the interest rate, in an effort to reverse the economic downswing into a boom. This is because a policy of pushing down the interest rate via expanding credit and money supply is typically seen as the solution for, rather than the very cause of, the crisis."

caution ... GLD is filling the coffers of JP Morgan with physical and not you. That is their strategy and in the end you will have an IOU asset of US Pesos with "expiration dates"!!! You will get a news announcement from JP Morgan saying essentially that they have your gold not you! When these guys bring on more demand from foreigners in an enviroment of short supply the GLD model will fall apart. I always knew Americans were suckers for "convenience" but I am surprised Asians are!

Aurator ... I like Peter Schiff ... So far I have heard few in the newsletter world mention much about the USA Sovereign credit AAA rating!! What will happen on a downgrade, which is the only direction left for US Sovereign rating of AAA? Everyone even the foreigners know that a AAA rating is laughable at best! None of us have ever been alive to see a WORLD RESERVE CURRENCY get downgraded. That will be the last act that nails the coffin shut ... I can't even begin to imagine what sort of CNBC spin will come out after that! I believe that will be the time when we will start hearing louder cries from the US Congress to make a monetary change and not one for the better.

BullHunter: Clueless is a safe place to be in this market...empty and open mind...what is it in the movie the last samurai..no mind..something like that...

:)

Re: negative yields.

Yesterday on minyanville Mr. Practical said that the Japanese manipulate the Yen lower by buying Treasuries, lowering the yield and weakening the dollar. This is indeed setting up the TOG.

http://www.minyanville.com/articles/index.php?a=16268

ToG:

With TLT over 95 and RRPIX headed toward 17, I think in the next week or two, the entry point for RRPIX will be here.

kaimu, do not understand your GLD comments. Can you elaborate & dumb it down for me? not sure if you are talking the PM or just something about the ETF. Thx

I don't think the TOG will start until the FED is done cutting rates. Everytime they cut rates yields will go down on the treasuries which will increase their prices.

The dollar will keep going down as well until they are done cutting. We may see TLT over 105 by then.

When they stop cutting or actually start raising rates is when the TOG starts as far as I can see.

Rob.

Finger Lakes -

20 and 30 year Treasuries are not necessarily going to go much lower, particularly if inflation expectations accelerate. The fed can't control long rates with short rates. They can control long rates to a small extent by buying long bonds for their own account. As is, they are near 0% real yield, so I don't think they will go much lower unless a deflation scare of panic in the equity markets.

Appreciate other opinions.

Went on a shopping spree:

GIX.V @ 2.14
UXG @ 3.18
OZN @ 1.62
LAM.TO @ 4.06
WGW @ 3.63
UUU.TO @ 4.90

Finger Lakes,
Maybe add a smidgen of long USD as an adjunct to ToG?

Someone please announce when the TOGa party begins! Home I'm reading the blog that day.

TOGa TOGa!

Closed SKF Short..@134.00

Aurator

I am riding the KBX train right now. What a nice move. I have been accumulating for about a year now waiting for the move above $1.20

JR P

It has been stated here frequently that if you read the GLD Prospectus you may be surprised to learn that when push comes to shove the asset you thought you were buing into is as worthless as the the Ethiopean Gilded Gold that was found to be what they had instead of the Gold Bullion they thought they had.

Suffice to say buyer beware!

Here's the PPT early by 15 min.

Are we having a LONG LIVE GS surge?

Kaimu - risk of GLD

I have heard you comment more than a few times on the irresponsibility of gov'ts printing fiat currency and shortcomings of the Gold ETF's.

Believe me, this message has been received. Amen.

It would really helpful if you or someone else in this community who follows this issue closely were to specify precisely what the danger is in the GLD. I presume there is language in the prospectus which defines the circumstances under which shareholders might their claimm on the gold which they believe they are buying.

Yesterday, Bill Belovay on BNN also expressed general discomfort with GLD, but also failed to supply specifics. I think it would be a major contribution to this community's understanding if the precise risks were defined.

Once we know, perhaps we can communicate this to others.

Libor surging - no trust among thieves:

http://tinyurl.com/2nmmax

On juniors, one I've mentioned before that is a profitable producer is CGLD - just announced 2nd profitable quarter:
http://tinyurl.com/2q7zj7
Also long KBX :>) also long SDRG :>(
So much of the action in juniors occurs before there's any announcement, so charts are relevant. Most of the time they just waste away between announcements.

Who Traded 55,000 Bear $30 Puts Tuesday?
http://tinyurl.com/28utxa

How the ultra-haute bourgoisie proposes to invest in gold:

http://www.midasletter.com/commentary/Gold-Mining-and-ABCP-to-Wed.php

Will they ever learn? Which gold company in their right mind would resort to this kind of foolish borrowing, as derivatives are subject to secondary lien swaps?

Moab,
I could see a disconnect between short and long rates eventually. Much like the disconnect between the ten year yield and mortgage rates now.

Banks can't afford to lend any lower than the current rates for mortgages just like no one will keep buying treasuries if the yields are too low.

According to Bloomberg US LIBOR is still currently below the Fed Funds rate at 2.78 for one month and 2.76 for three month.

They're pricing in a .25 cut. If that happens instead of the .5 or .75 that the market wants then bonds could start reversing and the TOG could be underway.

What I still don't understand is why Gold will be going up while bond yields are rising and the dollar is getting stronger.

Maybe the rationale is that the yields will be going up along with rates but the dollar won't be going up so Gold will benefit.

Rob.

JogyP Re BSC Puts

Ah...OK I will come clean That was me, but I did not have any inside info...

I am now moving to the Bahamas..and will live the good life with Bill

SEE YA..It's been fun...

http://biz.yahoo.com/rb/080314/usa_economy_feldstein.html

It's official...

I wish it was you basketguy so I could say I knew the guy who did it!!!!

Rob.

I must be nuts.

Bought CVP @ 9.90 and AYR @ 15.30

Will Bear be allowed to fail??

That will be the most important question over the weekend for sure!!

Anyone buying Bear calls??

Rob.

Finger Lakes, look at it this way.

A support under the gold price while yields improve and the dollar stages a rally will make gold mining cheaper.

This would lead to growth in that sector, but perhaps not in other materials, as their prices decline comparatively.

BullHunter...right with you...picked up FXI and AAPL

Sold MNTA @ 9.50

I am adding a small amount of BSC at 29.95!

kaimu,
Re: filling the vault with metal for someone else:

When the SLV prospectus came out I spent a lot of time studying it. There is an interesting provision I have not seen any of the pundits mention.

The SLV can be dissolved and it's metal distributed to shareholders upon demand by any shareholder who acquires 60% of the shares of the trust.

I've noted several times that this is a convenient way for someone to acquire a LOT of metal all at once, with no pesky COMEX requirements to deal with.

I mentioned to our host this as a killer idea - raise 3B (it was a lot less when I proposed it, more like 2B) take down the SLV with a redemption demand and then derive option income from your new 3B worth of silver.

My wacky plan aside, as soon as I read the 'takedown' provision of the SLV, I asked myself "Why did someone pay lots of pricey lawyers to explicitly include this provision? Because somewhere down the road it is going to be used, that's why."

So, yes,the SLV is acquiring metal that will, someday, be 'someone elses' And they are doing it with OPM, as usual.

FranSix,
That does make a lot of sense when you put it that way. At that point Oil would seem to be a good short too.

Rob.

JoyP...good trade..BSC for JPM...the house of Morgan is well taken care of...

Interesting. Rogers Int'l Commodity Agriculture index (RJA) with a spike up in the last 5 minutes.

Disc: Holding an IRA position in RJA.

Should be an interesting WIR this weekend. Thanks for everything Bill.

Have a good weekend!

So the next step after ETFs holding large amounts of precious metals is to consider junior precious metals companies, as their gold can't be swapped out.

ETFs are nicely indexed to precious metals prices, fully priced and will attract large amounts of investment capital, which is why parts of the gold sector are lying fallow right now, as they do not benefit from these kinds of capital flow.

Barf-levels of sweaty risk in the junior PMs is probably what make people averse to it.

Jock

from the Streettracks Gold ETF Prospectus this is enough for me...

"The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed
and recovery may be limited, even in the event of fraud, to the market value of the gold at the time
the fraud is discovered."

I guess it boils down to your assessment of risk of Trusts in general or storage of physical gold with any other institution.

I am not sure how else to do it without the inherent difficulty of taking possesion and storing. If you need/want to sell you have to retrace the steps which is also not convenient for most of us.

Would welcome suggestions from others?

GW

Re: $WTIC

Was thinking about short on oil prices with access to iShares, but for now its going to be ulimately very difficult if not impossible to determine the top in the oil market, though I do believe its in the cards.

These ETFs are not the only "non-Gold gold," as I call it.

Any non-deliverable gold "futures" contract, in my opinion, does the same thing - drain money from metal-backed assets to non-metal. At least with the COMEX contracts there is the possibility of having to produce metal.

"non-Gold" includes the new Tokyo mini contract, the new COMEX mini, the CBOT contracts and about half or more of the 'metal' ETFs/ETNs that advertise being 'linked' to the price of gold instead of 'backed'

I have a little project in mind to add up the dollar value of all the non-Golds and try to translate that into the POG if all that money had been applied to the physical gold market. I suspect gold would be a LOT closer to 2K were that the case.

Instead, HB&B has set it up where all these people who want to be long gold are actually dissipating demand for metal (and shares,) reducing the POG and pretty much trading against themselves.

Nice trick, HB&B.

In looking for alternatives to GLD, I noticed Everbank has accounts for allocated gold and silver bullion. I don't like anything with the word "bank" in it right now but this seems like a possibility. I don't know if anyone has experience with Everbank.

Wow, Geologix collapsed 11% today. If gold turns down these juniors will be given away.

Everbank also offers a Gold CD, which guarantees you the increase % in the POG if there is one or at a minimum, your original capital back.

If I recall, they are 5 year CDs, and that is why
I have not been interested. I don't want my US Dollars back in 5 years.

... in previous post forgot the link to GOLD etf prospectus for those interested

http://tinyurl.com/34k5pm

So I added SA.V(Southern Arc) and GIX.V(Geologix) to my junior precious metals watch list. Thanks for the open source.

Would be nice to see market moves in the juniors. The seasonal window of weakness in gold prices is just about up, and we may see further advances in bullion prices through into Q2.

Come to think of it, oil prices and gold should as well as Euro/$ seem inseperable right now. So I would venture to say that oil investments in $CDN via the pink sheets may be a good way to go in the ensuing weeks.

Aurator: RE: VIX

Not sure where you got the quote from, the present $vix index was revised in 2003 ..so not sure whether you are comparing apples to apples? 1987...?

No..I dont believe in elliot waves..but am happy it works for you.

Dont you have a trading strategy that you articulated here that describes selling when the security pierces the 2 standard deviation band?$Vix piereced 3 standard deviation band. Isnt that a signal that it could reverse...? Ok maybe after the crash.

Anyway..great trading to you.I trade better when I am sober,not dug into aposition,accomodative and flexibleand willing to see both sides of an argument.

Have a great weekend.

ALOHA !!

Guys, how can you ever have a "real" rally on the DOW when the only asset backing the DOW is denominated in rapidly declining US Dollars. Look at this line up of New Stories on Yahoo Finance today(see below)!

Contrarian thinking would say there is going to be a rally, but what good is a rally without a strong dollar? It only becomes a "nominal rally"! Just numbers ... To see just how pathetic returns are cash out your chips and go out in the real World and try to buy something with 'em! Within the past year just the POG has risen 54% denominated in USD.

You have one thing(that is really two)working against you ... TAXES! I am not just talking about taxes you pay on your long term and short term profits but mostly the stealth tax ... inflation!

Direct taxes on profits are running at 15% for short term and 28% for long term profits. Its helter skelter because you can offset profits with losses and also the SCH D adds your net profits off stock sales to your income which boosts your tax bracket, so it is not a dollar-for-dollar taxation. If your net stock profits boost your total income tax bracket 5% then your stock profits actually are a US government leverage tool to boost tax revenues based on your total income for the year(adjusted gross). Say your total income for the year was $100,000 and you are in the 35% bracket. Now say your stock portfolio has increased your taxable income to $140,000 which now puts you into the 40% tax bracket. That means you are now paying 5% higher tax bracket on $140,000 adjusted gross. Numbers and brackets are just fictional for the purpose of illustration.

Well, think about it. Add direct taxes(like income, real estate and excise) and real inflation rates(not US CPI numbers)and you have to have a pretty consistant high return to keep your head above water. Last time I looked total average direct taxes Americans paid annually was 52%. On a CPI format then US Taxes would occupy 43% of the weighted CPI. You can see how things are being stacked against the Middle Class in America. I suspect it is the same globally for other socialist countries like our USSA! As fiat monetary systems collapse government taxation will increase. If tax revenues do not increase then benefits that made the whole socialist system so attractive to voters will collapse as those benefits either get cut or eliminated. Look at the Bush FY2009 Budget and you will see the beginnings of your socialist benefits being reduced and cut. So it is not just me getting too much Hawaiian sun ... ITS A FACT! It is in the BUDGET ... THEY ARE CUTTING NOW!!! They are cutting NOW and the baby-boomers have just barely begun to retire! How long before your SS and Medicare and Welfare benefits are eliminated totally leaving us VOTERS nothing but the debt for postarity? Nothing but THE BILL!

The US Taxpayer is shouldering a massive combined 45% increase in tax revenues in the last Bush FY2009 Budget while the US Corporations are shouldering a miniscule 2.5% increase by 2013. We laborers are paying a whopping 1800% more taxes than our bosses companies are! We bail them out and we pay their taxes also! What a sweet deal if you're a US Corporation/Bank! That is just patented CRIMINAL ... Who lobbies for US Taxpayers? There ya go ...

Any serious mistakes from trading could put you out on the sidelines for a long time. What are those consequences worth? I don't know ... that's subjective. If you are gambling using mortgage and car payments money then the risks are too high! Margin is not worth it ...

YAHOO FINANCES
-Bear Stearns Slammed on JP Morgan, Fed Bailout
-Fed Pledges to Supply Cash- AP Intensifying
-Credit Fears Swamp Stocks- AP Dollar Drops on
-Trouble at Bear Stearns- AP Bernanke Vows to
-Help Homeowners- AP Pathetic Bear Stearns
-Bailout: Who to Blame?

I love the last News Story listed ... Who to Blame? Look in the mirror for that answer!

ALOHA !!

Jock ... I will post my past articles on GLD and the UltrShort ETFs later.

My time is about out ...

Many times JP MORGAN is mentioned along with the FED simultaneously. Just look today at the Bear Btearns mess. In the Blanchard Coins lawsuit against JP MORGAN and BARRICK GOLD the suit was dismissed half way through discovery because both JP MORGAN and BARRICK GOLD were agents of the Federal Reserve and thereby the US Treasury and as such could not be held liable and were immune! CASE DISMISSED! Blanchard Coin was sworn to secrecy and all discovery was put in lock down by a US Federal Judge. Who is the "custodian" of GLD again?

Google BLANCHARD COIN vs JP MORGAN/BARRICK ...

Discuss!!

kaimu. what can we do other then boycott the country/govt and stop going to work & stop paying taxes.

EEMTrader:

I view the VIX as a warning signal. When it's near the upper band or through it, it's an area where declines can be expected. Yes it indicates there will eventually be a VIX reversal, but that could be AFTER the predicted market decline.

As far as the old VIX comp vs newer, I don't know those details. Orange vs Tangerine.

One trading philosophy I'm trying is utilizing the Bollinger bands. Look to enter when the price is at or near the lower 2 sigma BB in a declining pattern, where the MACD and RSI support a bullish case. Volume might say something as well. Look to exit near upper band when the RSI starts rolling over and is confirmed by the MACD.

Overal goal of my hodge-podge is to have a simple system where I can walk up to any PC in world, call up a half dozen internet sites, and have everything I need to trade. A lot of refinement is needed, but over the last few months it's been winning more than losing.

Really appreciate your comments and feedback.

Here's a couple of older articles by Jim Puplava called "The Perfect Option," about juniors:

http://tinyurl.com/yqmvgf

http://tinyurl.com/5tn7q

I hope I didn't mess up the URL's.

Kaimu -

What makes you think that the ratings agencies will downgrade US Sovereign debt when they don't have the balls to downgrade MBIA and Ambac?

Today S&P downgraded Bear Sterns debt from A to BBB and put it on ratings watch negative. What a joke...

NYUGRad:
"Don't follow leaders/watch the parking meters."

Bob summed it up better than anyone, right there in one stanza.

Oh yeah,

"Don't wear sandals/And try to avoid the scandals"

That's a big one. Especially the sandals part.

In the "MikeNYC Universe" mandals are a shoot on site offense. My universe is a happy place, and no ugly hairy toes are allowed exposed in a non-beach setting.

moab,
You're so right. They wait for it to crash 50% in one day and then change their ratings.

What a sham and a complete disgrace to have such a criminal financial system. They deserve to go bankrupt, damn the consequences!!!

Rob.

Here's the comment of the day from Mish's website

Comment Of The Day

The comment of the day has to go to Professor Jeffrey Cooper who quipped "You've gotta wonder about guys that play cards and can see a lotta the hands at the table and still manage to lose the house. "

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

What happens when volatility is high and yields are low?

A historical perspective from minyanville after the close.

http://tinyurl.com/ys7jtr

What happens when $NYSE is 'insanely negative' as Moab points out..what happened the following trading day?

Just pointing out possibilities...not predictions.

Not the type to fuel fear and panic, but moments like these also present opportunities.

Whether someone chooses to see it as an opportunity,and act on it.. is something else.

Cutting and pasting is the easy part...

Bill, one workaround to post may be to do so under an alias, as a new "poster". You wouldn't have the option of having a white background behind your posts, etc., but it may allow you back into your own system, at least on a basic level.

Aurator -

I'd think an indicator with volume would be an important addition to your mix. All the ones you mention use ONLY price. And, after all, volume is the other basic measure of market activity.

There's simple volume, OBV. I like Alex Elder's "force index" which stockcharts offers. FI is simply price times volume, and Alex wants to see FI move up above the zero line on a buy. He also likes a series of rising zigs and zags.

FWIW

Jock: Thanks! I do look at raw volume, but your idea is no doubt better. I'm not yet a subscriber to Stockcharts.com, but have been planning on signing up. I can see those charts could be a real time-consumer.

I bought a handful of surprisingly cheap puts on XLF at the close.

Hehe - Kaultbaum in on a real rant tonight on his radio show!
Wait till after 6 PM Eastern and you can get daily the MP3 here:

http://tinyurl.com/3ecug

Also I always enjoy the Tim Wood "Commentary" broadcast you can find here, posted Friday night or Sat.:

http://tinyurl.com/2vgr5a

And then about 1AM EDT Sat., Puplava posts the 5 hour newshour here:

http://tinyurl.com/2c5ja6

I load them up on the iPod and play in the car, or when going to sleep (not at the same time).

80 points ago... in a Galaxy far, far away...

http://tinyurl.com/ystnwl

The essential from an interview with Frank Holmes:

"FRANK HOLMES: Well, we use a series of quantitative models, and we look at the stress between oil price movement and gold and the dollar. And then we look at the dollar versus the yen versus the euro. And there are correlations, such as the price of oil and gold moving the same direction 90% of the time. And the dollar and gold move opposite 70% of the time. So it’s never 100%. And then we have a correlation between the yen and the euro and the dollar, and recently the yen has been on a tear, and the euro’s been strong, but really, the yen's been strong on a relative basis.

The year-ends for Japan (fiscal year-end for companies) are at the end of March, which are coming up, it's basically our December and we get a lot of disclosure. We’ve not heard much negative news in the subprime in Japanese banks. So odds favour that if there’s any type of news that comes negative out of Japan that that currency would all of a sudden go through a correction, the dollar would rally, gold correct, and then you get on with this wonderful bull market in gold. "

http://www.resourceinvestor.com/pebble.asp?relid=41136

That losses in Japanese banks would lead to lower commodity prices will probably not occur. Why is it that commodities are doing well as the U.S. banking sector collapses? Why do bullion/oil prices continue to appreciate in Euros as their banking sector experiences liquidity problems? Its a greater probability that any correction in Japanese/Asian stock markets will lead a higher Yen. They are at odds over interest rates, because they simply can't lower them, and will be obliged to raise interest rates if a vast repatriation of currency occurs in the Japanese economy.

The Yen has achieved its target value against the dollar, and yet still has room. We might see a correction at this point, but the trend seems set to continue for the near future as the dollar collapses. This was something that nobody was counting on, that the energy of the dollar collapse is taking people by surprise. (but I would say gold bugs are taking this all in stride)

The ratings agencies will downgrade U.S. sovereign debt....the day after the Fed announces the U.S. is completely insolvent and in the beginning of a multi-year depression.

S&P will announce it a week later, the day after they announce we are half way through the depression.

Charts in the Yen, Euro, Pound and Loonie are all looking the same. I for one thought that the Euro was done, only to see it exceed its target and continue on:

stockcharts.com

¥/$

http://tinyurl.com/222byt

́€/$

http://tinyurl.com/2o2drj

Only a little while back, the $A and the loonie were where the $USD is now.

In addition, we are now seeing a 1% yield in short term treasuries:

http://finance.yahoo.com/bonds/composite_bond_rates

The decline has been precipitous in the last week.

Hi all,

I just received the new draft template for "The Cara Briefings" buy/sell advisory report from Bill (using Goldcorp as a sample). Here is what I wrote to Bill:

Hi Bill,

WOWWWW

the briefing for goldcorp is awesome!!
i love the format, the title page, the charts with rsi in the beginning, looks amazing. the charts on page 8 are great (isn't the new excel awesome for charts/keeping the same format, gradient cylinders, etc.?). the comments along the sides with the quotes are good for those who just skim it over the first time, . in a word: awesome!
I'm very impressed (how could i expect anything less?)

/E

Unfortunately, even after setting up a new typekey account, Bill is still unable to comment on the blog, something about a firewall issue.

Anyways, we are all in for a treat when these Buy/Sell Advisory reports become available. When the service is ready, anybody can get Buy/Sell Advisory reports on 25 Cara Global 100 companies and Bill plans to do the Advisories for about 1000 companies that will be available at a cost.

The format is great, sort of an aggregate of many analyst's covering the stock with brief summaries, many charts and trading indicators, Bill's own analysis, peer group comparisons, really loaded, very aesthetic.

Something to look forward to.

Cheers from a balmy 3 degrees celsius Sunny Southern Ontario.

WOW!

Bear Sterns is counterparty to $13 trillion of derivatives (notional amount), of which $3 trillion is listed options and futures contracts. Failure would have decimated Wall Street.

http://jessescrossroadscafe.blogspot.com/2008/03/bear-stearns-smoking-guns.html

Aurator - Free stockcharts has the various indicators ...

Bill,

as a tech guy, I can understand the frustration with the firewall thing. The better ones by default don't like to see traffic originate on the inside, trying to go outside (internet) pointing to a place back inside again. It looks fishy to them and rightfully so. It can be resolved, but it can be convoluted. Assuming that's what's happening anyway.

I got frustrated this week myself. My better half and I both came down with some kind of horrendous flu Monday night and neither of us could even get out of bed on Tuesday. No TV, no news, no sleep, no nothing but fitful attempts at rest and constant bathroom runs (pardon the pun).

Wouldn't you know that Tuesday was the day we had a 400+ day. I had a stop on SKF at 121 (it was around 140 the day before, so I thought no worries) and got taken out near the day's low! Wha? My basis was around 97 so I didn't get hurt, but geez, I thought I had a handle on how to ride that bull. Guess not.

Jock: Thanks. Got the Force Indicator working on a test chart. May still sign up to get larger charts. So: price, MA, BB, RSI, MACD,and FI which shows as Force(13), all in one handy chart! I'll have to study the use and implications of FI.

There are so many indicators, like AROON and PPO that I have little experience with.

Aurator - Gurus I read say you don't WANT too many indicators, but you do want to make sure the ones you use aren't basically different ways of looking at the same thing (i.e. price oscillator or price momentum).

So, Elder, for example, uses (on two time frames, weekly and daily) moving averages, MACD with MACD-H, and Force Index. That's it ...

Bill uses mostly RSI's on 3 time frames (monthly, weekly, and daily) with glances at stochastics and MACD's, and doesn't take volume into account on his high-volume cara100s. (I hope Bill will correct me if I'm wrong).

Tim Knight (theslopeofhope.com) uses mostly trendlines, support and resistance, and volume, with a glance at fibbonaccis.

I think too many indicators confuse and dilute focus. Seems as if getting a relatively simple system that you're comfortable with and becoming very familiar with its workinigs is the key ...

Elder at the conclusion of his week-long seminar has communicated his basic message: at the end of the day it's not the market you're trading, but your own mind and personality. So, each trader needs to arrive at his/her own system, which suits their mind, risk tolerance, time-frames, etc.

"The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late"

No, this isn't an article describing today. It is Greenspan's 1966 article blaming the Fed for the Depression and . A must read http://preview.tinyurl.com/yztf

Great stuff Jock. Thanks! The market is really trading you (it must be a female).

D word used in AP News article:

http://biz.yahoo.com/ap/080315/bear_stearns.html

Hell, the 300 or so wanderers to my site must be non-believers. But here's the field position.

Maybe Bernanke can hope for Weimar Republic style hyperinflation

http://ronsen.blogspot.com/2008/03/thought-leaders-greenspan-put-just.html

I'd like to start learning something about options. Can you throw me the name of your best book on the subject? Thanks.

aurator
After listening to Cramers rant , if we were paying attention he would have given us the perfect short sale signal, when that first aired I never listened to it thinking it was his normal attention getting acting. My mistake

Best books on options:

1) Options as a Strategic Investment - McMillan
2) Option Volatility and Pricing - Natenberg (an absolute must read)

Tom DeMark has a hard to decipher book on daytrading options which I thought helped, but Tom's writings are often hard to decipher...although he's a great guy.

My local newspaper featured an article on the recent gold run.

They interviewed several local coin dealers who all said that business was booming, both on the buy and sell side, and that they were getting a lot of Mom & Pop business.

I can't help but think that when Mom & Pop are all in gold, a major pullback is imminent.

Agree or Disagree?

Regards

Ron

I checked the deMark book on daytrading options

$319.00

And while I’m dedicated…ouch

"I can't help but think that when Mom & Pop are all in gold, a major pullback is imminent."

"Agree or Disagree?"

Bull Hunter, disagree, as in not necessarily. Remember, this gold bull market has met skepticism all the way up. Sure, there are cycles within the trend, but I think Mom & Pop are far from all in.

This was an interesting few weeks in an interesting year. I used to be a buy and hold investor. It allowed me more time to live rather than worry about trading.

This past couple of weeks, with the inspiration of Craig and 2nd Ave., I started to invest in FXP and EEV to try the short end of the market. I had never shorted anything before. I was doing ok with a few day trades, but the income was too small to be worth the effort. My natural inclination is toward investment periods of more than a day or two. So I began looking for significant periods of decline in EEV/FXP that corresponded to significant news about a rally in the US and emerging/Asian markets. I noted the tendency of the double shorts to overreact, and to react not just to the percentage changes, but to sentiment, fear/greed and indications of momentum. So I started to take bigger positions on the drops, and then to just hold until the next rally in EEV/FXP. This can probably work in a bear market; obviously it's a bad strategy in a bull.

With a position limited to 20% of my securities portfolio, I've been buying the dips and selling the rallys for the past 2 months. I've also had a couple of long positions that balance the shorts, including AIG and BTU.

To my surprise, I'm about 90% in cash right now, and up almost 7% for the year.

Frankly, thanks to Craig and 2nd Ave. and more thanks to Bill for helping me develop a more sophisticated perspective on what is going on in the market.

Natenberg is more within the budget…

Have you read his Option Volatility Trading Strategies (April, 2007)??

Sounds like what we need in this market.

I would add that if a Mom & Pop asked me about getting into gold at this time, my free advice would be to dollar cost average over time and not try to catch the ups and downs because the volatility can be wrenching. At the same time, given the trends, they should do okay over time, but that's based on a belief that the trend is still up obviously, so anyone doing it would have to believe that thesis.

But I have commented before...oh, well..

I think the whole problem about gold and numerous other markets resides almost solely in the fact that the $USD as the world's reference currency is in decline.

Ron, caution, thanks. I will check out Natenburg. In this market climate I need to get as many tools as possible.

Denny,

I've found two introductory texts about trading options very useful:

_Getting Started In Options_ by Michael C. Thomsett ($19.95 US)

_Options Made Easy: Your Guide To Profitable Trading_ by Guy Cohen ($27.95 US)

Denny

I posted four on-line sites I found very useful when getting started, but Typekey ate the post—twice’

Google CBOE, Options Industry Council, and Options Edge. They have various education programs and useful on-line tools. Also my broker, thinkorswim, has a fantastic education / graphing site. I believe you can access it simply by registering (no $$ involved).

Sorry about the lost post.

I love these leisurely Saturdays.

As Allen mentioned in his post, he is mostly in cash. So am I--a nibble here, sell it, dip when things are promising.

Meanwhile, big (for me) $$ is sitting in my IRA gathering meager interest.

My concern is the safety of this uninvested money. Some govt. agency insures some aspect of investments, but I need a reference to check how much is covered, how one gets it back, and how long it might take to recover said funds if my broker or his custodian should fail.

Where can I find this information?

This site has been daily reading for me for a long time. Thanks for all the great information. I have been using inverse funds and my retirement account has done well. On friday I sold almost all inverse funds evenh though I expect further declines. My problem and question to the board or even Bill if graces me with a response is this: counterparty risk in these funds appears to be a real issue. Being derivative based I could realisticaly see these not weathering a major meltdown. Any comments from some of you smart cats might save us less smart cats big money. I am thinking of parking everything in treasuries. I have gold, silver physical and stock ( mostly cef ) - MANY MANY MANY THANKS again to all for this fantastic board. Helped guide my decisions in tough times!

Mom and Pop going out and buying gold?? They can barely pay for food, house and car payments. Back in the 70's we had a prosperous middle class, we don't now.

BH reference Mom & Pop and Signs of the Times

Past day or two posted an article about the increase in people visiting pawn and jewelry shops in the Chicago area and turning in gold jewelry for money.

This morning, up in Michigan for the weekend, heard a radio broadcast about Michiganders visiting jewelry stores and selling for cash. Announcer mentioned the gold price was for 24 carat and some people were disappointed because their items were 18 carat and not worth as much as the anticpated @ $1K an ounce.

Don't know conclusively (although tend to agree with Bill's thoughts while still watching the USD) if this is a signal for a top, but it is more confirmation that things are tougher for the average Joe, Mom & Pop, as inflaionary food and fuel prices hit home. Granted, Michigan has been in a recession longer than some other places, but I suspect similar activity elsewhere.

Another sign of the times: Next time you visit a local gas station, take a few seconds and look at the pumps to see what the prior sales price was. A radio reporter in Illinois did this and observed $10 prior pump sales in a local working class neighborhood. That's a sure sign of belt tightening and living day to day while commuting to work. Now I'm not talking about interstate petrol stops while traveling to grandmas for Easter. There you'll still see the $40-$80 prior pump sales.

A driving lesson from President Bush:

Radio Address by the President to the Nation

WASHINGTON--(Business Wire)--

THE PRESIDENT: Good morning. On Friday, I traveled to New York
City to talk about the state of our economy. This is a topic that has
been a source of concern for families across America. In the long run,
we can be confident that our economy will continue to grow, but in the
short run, it is clear that growth has slowed.

Fortunately, we recognized this slowdown early, and took action to
give our economy a shot in the arm. My Administration worked with
Congress to pass a bipartisan economic growth package that includes
tax relief for families and incentives for business investment. I
signed this package into law last month -- and its provisions are just
starting to kick in. My economic team, along with many outside
experts, expects this stimulus package to have a positive effect on
our economy in the second quarter. And they expect it to have even a
stronger effect in the third quarter, when the full effects of the
$152 billion in tax cuts are felt.

A root cause of the economic slowdown has been the downturn in the
housing market. I believe the government can take sensible, focused
action to help responsible homeowners weather this rough patch. But we
must do so with clear purpose and great care, because government
actions often have far-reaching and unintended consequences. If we
were to pursue some of the sweeping government solutions that we hear
about in Washington, we would make a complicated problem even worse --
and end up hurting far more homeowners than we help.

For example, one proposal would give bankruptcy courts the
authority to reduce mortgage debts by judicial decree. This would make
it harder to afford a home in the future, because banks would charge
higher interest rates to cover this risk.

Some in Washington say the government should take action to
artificially prop up home prices. It's important to understand that
this would hurt millions of Americans. For example, many young couples
trying to buy their first home have been priced out of the market
because of inflated prices. The market now is in the process of
correcting itself, and delaying that correction would only prolong the
problem.

My Administration opposes these proposals. Instead, we are focused
on helping a targeted group of homeowners -- those who have made
responsible buying decisions and could avoid foreclosure with a little
help. We've taken three key steps to help these homeowners.

First, we launched a new program that gives the Federal Housing
Administration greater flexibility to offer refinancing for struggling
homeowners with otherwise good credit histories. Second, we helped
bring together the Hope Now Alliance, which is streamlining the
process for refinancing and modifying many mortgages. Third, the
Federal Government is taking regulatory steps to make the housing
market more transparent and fair in the long run.

And now Congress must build on these efforts. Members need to pass
legislation to reform Fannie Mae and Freddie Mac, modernize the
Federal Housing Administration, and allow state housing agencies to
issue tax-free bonds to help homeowners refinance their mortgages.

Congress also needs to take other steps to help our economy
through this period of uncertainty. Members need to make the tax
relief we passed permanent, reduce wasteful spending, and open new
markets for American goods, services, and investment.

By taking these steps and avoiding bad policy decisions, we will
see our economy strengthen as the year progresses. As we take decisive
action, we will keep this in mind: When you are steering a car in a
rough patch, one of the worst things you can do is overcorrect. That
often results in losing control and can end up with the car in a
ditch. Steering through a rough patch requires a steady hand on the
wheel and your eyes up on the horizon. And that's exactly what we're
going to do.

Thank you for listening.

END

White House Press Office
1-202-456-2580

CONTINUATION ON DERIVATIVES CHECK OUT THE CHARTS
MAN - LOOKS LIKE BOOM GLOOM AND DOOM - as Buffet said weapons of financial destruction. Need to go buy some more bullets lol ( just kidding, sort of)

http://jessescrossroadscafe.blogspot.com/2008/03/bear-stearns-smoking-guns.html