Hi Bill and All,

I'm seeing various real estate related sectors (IYR, XHB, XLB, MG440) as the strongest in breadth for the week. Have not seen a pattern like this in ages. Major indexes appear poised for blast off next week but perhaps the Fed will foil that...

Good Trading,
Ralph
http://successfulonlinetrading.com/blogs/

p.s. my report is not live yet, will be in a few minutes, just wanted you guys to be the first to know on the real estate thing....

RalphSE - What is (A-D/total)? Seems to be the key to your site, but I couldn't find a definition.

Thanks in advance ...

Good news on the real estate sector if this is true. Maybe I can get back into SRS in the low $100's.

I will be waiting for it this week, as I hope we get a pop in the market. I am all in cash waiting on the rate cut. Come on rally so I can reload the shorts...

Colin Twiggs report reveals this as a Bull Trap.
We may get a tradable bounce but long term money flow is still in a down trend and yet to be broken. I remember someone wise saying, "follow the money". It looks like that would be to the rear door, exit stage right.

I do notice brewers, alcoholic beverages, tobacco near the top of the list. That is those sectors viewed as defensive. RE related issues would be the bet to trade on a fed cut, as will financials....before they announce further losses and leave slow/trusting traders and Joe6pack bleeding in the street caught in their trap. I imagine the trap could be set with a bigger up day than the 400 pointer.

Does anyone suppose it can override that $USD chart in today's daily? Or add to the downward momentum of a ruined currency?

If Bear Stearn's or the debt of other banks and brokers was any good, do you think they would need to foist it off on the Fed through another bank? Wouldn't they BUY it if it were good? Wouldn't someone like Warren Buffett sweep in for a bargain? Wouldn't you?
Let me ask....did Lazard find a buyer for Bear yet? I didn't think so....

Just follow you're own common sense.

Hey Bill,

How are you? I never did hear back from anyone about Rob Mcewen's foray into the desert known as UXG, but people were obviously not encouraged by what, if anything, they could glean from the show. UXG has been hitting the skids again and looks to be breaking support, probably a re-visit of two and three quarters seems likely.

I am here today to discuss my call for a possible top in gold at 1000. I feel ok about what I'm about to say because gold futures are still below $1000 even as I am beginning to change my assessment that gold will top out at a grand. Mind you, gold is, as I predicted, having a hard time getting through "one large" as I suggested it would. Let's face it...Gold never did anything, and gold never will do anything other than what my girlfriend does...sit there and look pretty. (Sorry ladies, juuuuust kidding....)

What's changing is that the problems over at HBB have gone in the past week from being what appeared to be a serious though survivable would into what seems for some of the "brokers" to be a potentially mortal one. The Bear situation (hearing the chief deny ANY problem one day to going to ZERO liquidity in 3 days) is extremely troublesome and definitely begs the question.....What's going on at Lehman Bros? the unusual activity in LEH portends a house of horrors there too. And at Merrill. In short, the whole house of cards seems to be coming down on cue. So I not here to retract my statement that 1000 will be an important top in gold and that the dollar will strengthen in the next year. I am merely saying that the degree of confidence with which I made those statements has eroded significantly and that the future for the brokers appears much bleaker than previously foreseen. Depending on what FED does and how desperate they get, of course gold could advance from here. What I'm smelling is desperation. Or it could just be my socks.

I dont know about my fellow Americans here, but I am starting to get very livid with BERNANKE and his Socialist bailing out of WALL STREET firms at the expense of our currency and way of life.

This is getting RIDICULOUS. If he cuts 50-100 more, I think he is purposefully intending on Destroying the USD

potash. pot-------wow!!!!!!!!!!!!! what a great stock. looks like has been -and is a real winner for long term holders and day traders also some days $10.00 plus swing --------- gotta CATCH the wave , on this one any comments future of potash? and alos when this stock may split> many thanks . have a wonderful weekend bill and all followers. russty

imo, the U.S. will be involved in another terrorist debacle, creating what policy makers will hope to another foreign policy adventure gaffe in military keynesianism, in the hopes people will be distracted enough to ignore the financial crisis, and along with it more authoritarian controls on society. This is what was accomplished the last time. Its probably already in the works.

WE NEED to get rid of this TICK aka the FED
embedded on the body of America unbeknownst to many average Americans..
of which is creating credit viruses through hubris and utter fiscal incompetence, and sucking purchasing power dry.

Craig,
Potential buyers for Bear:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOBRMPaTe0lQ&refer=home

Anybody managing investments in renewables both energy and plastics? Please let me/us know; I'm looking for an investment vehicle and broker.

New article today by Ron Paul
"What the Price of Gold Is Telling Us"
http://tinyurl.com/37gobz

FranSix, taking off from what you said, apart from the terrorism idea, if they have the public feeding at the teat, so that we can get "stimulus" and bailouts on our mortgages, won't the gov't take that as reason enough to "monitor" our finances and "means-test" us and anything else that will give a higher level of control over the public. In a way we're asking for it, because we are already screaming for them to help us, and it hasn't even gotten very bad yet.

Stockershock - bailouts

Is Bernanke a socialist, or is he a dutiful servant of capitalistf?

Why not a rule saying that each (dwindling) US$ spent to bail out Wall St. must be matched by a US$ spent to bail out uneducated blacks and latinos who got in over their heads because of fast-talking Wall St.?

This might be the only way to stop the bailouts....

Craig,
Sorry, just caught this:

http://tinyurl.com/2skp9r
[Ed: Converted to TinyURL]

By MarketWatch
Last update: 12:48 p.m. EDT March 15, 2008
NEW YORK (MarketWatch) -- China's Citic Securities Ltd.
said Saturday that it can't guarantee it would complete a deal to invest about $1 billion in Bear Stearns Cos. (BSC:
30.00, -27.00, -47.4%) due to the U.S. investment bank's financial crisis, Reuters reported Saturday.

Maybe a negotiating ploy?
George

Ensuring McCain's election:

All Pres. Cheney has to do is to say YES to the Israelis'(monthly?) request for targeting information on the Iranian nuclear sites.

After months of saying "not yet", he merely needs to give the nod on "Halloween". There'll be no US bombing! There'll be complete deniability!

Nov. 1, Iran blocks the Straits of Hormuz (through which 1/4th of the world's oil flows) while Obama campaigns for restraint and tries to "bring us together".

McCain promises to kick ass. Who would win on Nov.4th? Is there any doubt? Cheney would regard this as his last great patriotic act, knowing that a democratic president would mean "caving in" to Iran.

I believe in the same way that people hold Bernanke responsible for the dollar and financial crises in the States, HB&B and cronies probably blame Iran for their miseries.

George: There will be all kinds of rumors and Bear will be sold...likely in pieces, a trading desk here, a mortgage unit there. We won't see Bear Stearns as a whole company again.

Lazard is charged with trying to find potential buyers. The Chinese are proving my point.

Who would want to buy the first card of a falling house of cards knowing that the best deals will be when the majority of the house is on the ground? Or if they did buy, wouldn't they be wanting a discount price that factors in the price when the house is on the ground? IE the future pathetic prices to come?

Or to ask it another way...who here is buying residential real estate?
The SAME exact answer applies. I don't think George is a sucker!
It's tha same reason we aren't buying financials....AAMOF we're shorting them....as we should be. Bear's investors were REALLY shorting, with a run on the remaining cash.
You aren't planning on going long BSC are you?

You might chance it at a real discount, like under a dollar a share. But there is a good chance it could go to zero, so you would want a huge discount, just like the Chinese, Flowers, Morgan, Buffett, Ross, etc. That will mean huge losses and someone to take them.....wealthy people don't stay that way taking on losses, they do that taking on discounted assets. If Bear had assets worth anything there would already be a line to more places than the Fed discount window with Morgan as intermediary.

When that is the only place (IOW with the taxpayers/OPM) and Morgan will only act as impartial conduit and not take any risk, the writing is on the wall. The risk isn't worth it because there are no discounted assets, only debt. Buyers will be buying infrastructure and clients, not any assets.

The rest is rumor and noise.
As I said, just follow your common sense.

sustain_ability ,
you may want to look at MBLX - Metabolix. I have this note from 4/23/07:
"Metabolix and ADM to produce Mirel, the first biobased and fully biodegradable plastic: The co and ADM (ADM) announce that they will jointly produce Mirel Natural Plastics. Mirel is a family of high performance natural plastics that are biobased, sustainable and completely biodegradable. Metabolix and ADM are commercializing Mirel through their joint venture Tellus. This plant is expected to start up in 2008 and will produce Mirel at an annual rate of 110 million pounds."
Not a recommendation, no position. Chart is pretty awful, though stochastics indicate it's a oversold.

SteveC

Thank you for sharing the Ron Paul Article.

All,

That article is extremely recommended reading.

Enjoy your weekend.

Cheers!

From Barron's Alan Abelson's column.

PAUL BRODSKY IS SOMETHING of a scholar manqué. Despite that formidable handicap, he and his partner, Lee Quaintance, who run a hedge fund called QB Partners are astute investors, and what makes them especially rare specimens of the breed is that they're fully conscious of risk without being paralyzed by it.

From time to time, we've graced these irreverent scribblings with their engagingly splenetic comments on Wall Street and its quixotic penchants and their interesting take on the economy, the markets and the other things that make the financial world go 'round. We don't always buy their view (which should give them more than a dollop of comfort), but their stuff is invariably thoughtful and frequently provocative.

The excuse for this little prologue is a recent dispatch from them entitled "It's a dollar bubble -- not a commodity bubble." Since both the dollar and commodities have been making news lately, if not exactly of the same kind, the theme attracted us as timely and the distinction -- between which is and which is not a bubble -- intriguing.

Paul and Lee's firm belief is that commodity prices, despite their recent sprints, still have a long way to run. And the nub of their argument, they coyly contend, is "simple."

To wit: Thanks to the determined debasement of our currency "it will take many more dollars and credit than it does today to purchase a real asset because the global purchasing power of each U.S. dollar is declining at a rapid rate and will continue to do so."

They do not, lest you're ready to leap to the logical conclusion, assume a sharp and quick increase in demand. Rather, they anticipate that "global demand for wheat, energy and base metals will remain relatively constant, even if prolonged recession hits the developed economies." And, they confidently predict that "We're going to see numbers (commodity prices in U.S. dollars) that the world hasn't seen before." Why doesn't that strike is as an unabashed blessing?

As a nation, Lee and Paul reflect, the U.S. is burdened by a monstrous mountain of "paper claims priced from extraordinary high rates of past consumption." To pay off those claims, we're counting on future wage and asset gains and the Fed, almost reflexively, is doing its part by steadily providing us with fresh infusions of money and credit.

As it happens, the money and credit the Fed is destined to continue to create is "the currency with which commodities are traded globally." So, the QB duo contends, "the nominal prices of those commodities must continue rising" because the currency will continue to be diluted.

The bet on crude at $105 (or $85 or $125) or gold at $1,000 (or $850 or $1,500), they aver, is "a bet on a relatively stable supply/demand equilibrium and an inflated (and inflating) money supply. No more, no less."

The risk to their analysis, as they see it, is twofold: a severe drop in global demand big enough to overwhelm "a 15%-plus rise in annual global fiat currency creation" or destruction of global money and credit at a faster rate than central banks can create it.

They plainly like the odds against either eventuality. And not the least of the reasons they do is the incredible vigor with which "Ben Bernanke and his foreign central bank colleagues are dropping currencies from a fleet of helicopters 24/7."

With the spectre of derivative implosion, I have been digging around trying to get a better understanding of how they work, who the players are, etc. In the midst of this digging, I continue to come across laments and claims regarding governmental Comprehensive Annual Financial Reports (CAFRs).

The following is a link to typical claims:
http://tinyurl.com/2uxp2k

Can anyone here adress these claims? Anyone feel they have a respectable grasp on derivatives, or possibly point me in a direction of good and reliable overview?

Thanks ahead of time.

MtnGntx,

The largest export of the US is financial knowledge & financial products, and derivatives are the granddaddy creation of them all. Think of a pyramid, where the only things physical at the bottom (a house, a gold bar, pork bellies) are rarely traded, and stuff is double-counted, triple-counted, and manufactured from thin air and sold as baskets of paper contracts.

That's my understanding of derivatives.

Thanks for the link. Haven't heard of CAFRs.

I did post a bunch of stuff I've found on my blog. Search for CDO & derivative & swap.

http://bullrunner.blogspot.com/search?q=cdo

Wikipedia is probably one of the better sources. Also, one of great book that tells the story well is Traders, Guns, and Money by Satyajit Das.

cheers

Re: Derivatives

They are very much like options contracts on price performance in a stock tied to a companies' debt.

A credit derivative is a call option. A credit derivative swap is a put option.

If your CD is out of the money, you can always swap the value out into a CDS. But secondary lien CDS are probably not legal to settle in case of a bankruptcy. You have to be a lender with a claim against the corporation you're lending to in order to have a valid claim in bankruptcy court.

What this does in the end is bankrupt companies relying on large credit financings for their operation like airlines. A lot of people tied to airline finance walked away with hundreds of millions in CDS claims, while the rest of CDS swaps were dismissed.

Any value held in any company is swapped into the CDS and it doesn't matter how much money comes out of the cash position in order to stave off bankruptcy, the secondary lien claims overwhelm companies in trouble, because they habitually amount to 10X the yearly cash flow.

So if you bought shares in a company heavily exposed to CDS claims once their CDs are out of the money as insurance against deflaut, the asset value of the company is swappped out, and the only thing the company has left to keep its head above water out the the claims held against it, is to hand over the cash position.

The trouble is, not a single cogent investigation into Credit Derivative fraud was conducted after the airline bankruptcies following 9/11. These claims ran into the hundreds of billions, many were wiped out, but lenders that swapped out asset value in airlines walked away with a few cents on the dollar for essentially undermining the companies they were lending to.

FattyArBuckle :REyour thursday post on $VIX

I was referring to 8am PST on thursday, not east coast time. you can see the RSI bearish divergence with the $VIX giving you a heads up on trend change..about a 10 min heads up.

It may help if you visualize the trading day template like this :

Early morning trend
Pattern formation
Pattern Completion

Dont trade during pattern formation...let the market tell you what its doing..just draw intraday trend lines..sometimes you see it better on 3min or 1 min charts..market is too choppy..market makers on a fishing trip to 'hook' rookie traders that look at red and green bars.:)

For an example:see fridays market action

Trend down -fast and furious (Opening)
Triangle formation ( 7:15-12:15)
Continuation of trend down after triangle

then a fast and furious countertrend move, short covering..

then the 'gamble/or the the next day tell' the last move before time runs out....

no idea where it will fall/rise( price target)..the last move before time runs out..risky time to trade. It looks like a cup with a handle on a 3 minute chart..who knows after this weekend, but if during the week..I may actually hold that one long.

You can see the same pattern on the QQQQs,EEM, SPY and DIA. The hard part is.when is the pattern forming.....different every day...toughest part of the day.

goodluck..:)

bull strategy- best move would be to (be among the first to) throw in the towel, cash out, let the market drop, then buy back in as the last towel is thrown...this would fit with all of the time-honored observations we hear so often (the one that comes to mind here is 'the hardest move to make is usually the right one')...

if you're long, then of course it would be hard to think about selling now...but it will only get harder as we grind lower, and waking up each morning to a new low is going to wear out your soul...selling the Q's at 80 in 2000 after a 33% haircut would have been agonizing, but the agony would have dissipated as the Q's slid inevitably to 20, where the last bull threw in the towel...at which point buying would have made up your losses in less than a year...

realize almost everyone here is short or in cash...above post intended to be a) the usual attempt to see things from the 'other side,' and b) genuine encouragement for anyone who really is long to think twice about it...bear markets will drop further and last longer than you can imagine, and at this point it's still very early in the game...

" "Why not a rule saying that each (dwindling) US$ spent to bail out Wall St. must be matched by a US$ spent to bail out uneducated blacks and latinos who got in over their heads because of fast-talking Wall St.? " "

Jock...NO FAIR! if there are any uneducated whites or asians who got in over their heads in a similar fashion, then i think they should definitely be bailed out also... this is america .... equality & justice for all!

let's face it, all 'educated' homeowners either in over their heads or not, will be lobbying or o/w tying things up in the senate and house and/or courts to a foreseeable conclusion...any bailout will not be restricted to any particular class of homeowners=no bailout at all...

Remember all the speculation over who got burned on all those BSC calls the other day? Looks like it might have been this guy. Down 800mil on BSC so far:
http://tinyurl.com/2fyhcx

american culture today is fixated on the concept of fairness to the actual detriment of those it purports to help...welfare, affirmative action, bending over backwards to ensure the 'rights' of the lowest common denominator in any conceivable public situation)...apart from a minority of truly deserving recipients, i don't think anyone is really 'helped-' what happened to personal responsibility, overcoming handicaps or hardship, pride, and perseverance? we celebrate these things in our literature and arts, less so in our approach to 'helping' those in 'need'...bailout ultimately helps no one...

what if joe lewis made up for his losses on BSC with those 38,900 puts on LEH?

Do not underestimate the systemic inequity built into American society. Example - not much press on legacy admissions for children of rich alumni, while affirmative action admissions are continually attacked. Affirmative action is supposed to be bad because merit is overruled, but when money talks for legacy admissions then that exception is all fine and good? Yes personal responsibility is paramount. It doesn't mean we can't decry the elite and powerful from leeching on the public, eg HB&B, who turn around and blame the powerless, eg subprime borrowers.

Considering LEH April puts were in an updraft last week, I guess we'll be seeing just what happens to their iShares listings should we see a run on the brokerage.

Perhaps if put options on Lehman iShares listings were available, maybe someone should take a close look at that. That would be quite beyond my level of expertise at this stage.

Here's the first article that pops up on the iShares listing news for LEH 20yr. + bonds:

http://online.wsj.com/article/SB120552830126537517.html?mod=yahoo_hs&ru=yahoo

The Fed, by the way, can cut basis points 200(2% lower - we're sitting at 3% now) in the wake of treasury yield declines to 1%.

neither am i in favor of the privileges money can buy...

we live in an unfair world- not sure american society is alone in promoting 'systemic inequity.' but i don't think we do the 'disadvantaged' any favors through affirmative action policies...bill cosby, like him or not, has IMO made some hard-hitting statements on the subject...bottom line is to stop blaming and start taking responsibility, where ever you find yourself...

the 'disadvantaged' in any particular sense are often themselves guilty of even more unforgiving judgments of those who fall beneath their standards in other ways...

should we stop at race and education? what about physical appearance, intelligence, or abusive parents- why not even the playing field for those taunted all their lives for being 'ugly,' 'stupid,' or 'misfits' with cosmetic surgery, IQ-adjusted salaries, and psychological counseling...

the answers to life's inequities (IMO) do not lie within our lifetimes on this planet...but in general, broad-based political attempts to 'help' the 'disadvantaged' have often been misguided and destructive to the self-image and motivations of those they try to help...

above post should read, or course, "government-subsidized" cosmetic surgery, salary adjustments, and counseling...

btw, the well-adjusted among the 'disadvantaged' would naturally bristle at being placed into such a category to begin with...they would simply recognize life as unfair and get on with it...

"oF course"

Has anybody put much thought into which of these would be better for the TOG? RYJUX or RRPIX? I've already got some RYJUX but I was wondering if there is any real difference between the two of them. If there is, I'm not seeing it.

RRPIX returns 1.25x the inverse of the performance of the long bond ..RYJUX only (1x) the inverse...

FRAN SIX : RE : TLT and Lehman

I dont see the relationship between TLT and the financial viability of Lehman. Sorry, not even close.. no disrespect.

Barclays license the index of Lehmans 20 year INDEX to create the ETF TLT. The ETF has nothing to do with Lehmans financial viability.

AND thats assuming the Feds wont provide a '28' day loan for Lehman if things get that bad.

Thatslike saying if they are selling the SPY ( S&P 500 spyders), it must be because McGraw hill , the parent company of Standard and poors, who licenses the S*P 500 index is going under.

Huh?

Look at TLT prices..on a chart..will you be a seller or a buyer at those price levels?

Also look at when TLT tops in a short term cycle and when that correlates with short term bottoms with the SPY . That correlation may not last...

If a market crash is coming on monday ( and it might)..will there be net sellers or buyers of bond etfs? Or will they be freeing up cash to..?

...beside...as far as TOG..dont we want to see yields rise and TLT sell off?

Hi everyone...

Reviewing many financial blogs this weekend and I have to say, the sentiment is about as negative as it can get.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/15/ccom115.xml

Ok, so I see the point on LEH licensed under Barclay's. So lets look at Barclay's then.

I think what I am trying to point out is a conclusion drawn on this weblog about ETFs in general that their asset value can legally be swapped out, and investors holding the bag.

Who knows if the index funds don't have insolvent derivatives attached to them, because they're off balance sheet?

MtnGntx, here is Jim Sinclair’s description of derivatives. I know I cite Sinclair a lot, but him and Bill are your best reads IMO.

“What the OTC derivatives have not done to the international banking system, the mountain of upcoming slam-dunk litigation will.
This is no joke because OTC derivatives are fraudulent in the legal sense.
In the practical sense OTC derivatives are worse because they are:
1. Without regulation.
2. Without listing on public exchanges.
3. Without standards.
4. Therefore not in the least bit transparent.
5. Therefore without an open market of the bid/ask type.
6. Dealt in by private treaty negotiations.
7. Without a clearinghouse.
8. Unfunded without financial guarantee of any kind.
9. Functioning as contracts of specific performance.
10. Financial character or ability to perform is totally dependent on the balance sheet of the loser in the arrangement.
11. Evaluated by computer assumptions made by geek, non market experienced mathematicians who assume religiously that all markets return to their normal relationships regardless of disruptions.
12. Now in the credit and default category alone considered by accepted authorities as totaling more than USD$20 trillion in notional value.
13. Notional value becomes real value when the agreement is forced to find a real market for ending the obligation which is how one says sell it.”
To me #10 is the current crux of the problem. The loser has no way top pay (basically bankrupt), therefore the winner cannot collect.

Fran Sxi:

Barclays ( BCS) runs the SLV ( silver) and IAU ( Gold) ETFs..read the prospectus and the inventory they hold.

As for other ETFs..highly liquid ones that trade daily are mark to market, we trade prices - plenty of buyers and sellers..

Those who like to buy illiquid ETFs( and they do get withdrawn for lack of interest )..do so at their own risk.

those derivatives you mention that are kept on off balance sheets are mark to model ( fantasy ). Who knows whats out there..good questions to ask ...

Common stock holders are always at risk..those securities of Junior Gold miners...thinly traded , speculative...is there a claim on assets yet to be found,valued and mined or do the preferred holders and their creditors get first shot at the equipment of a yet to be discovered gold mine? Same risk or no?

..how do you evaluate whether to invest in junior miners?

Management Team's Experience and Track Record
Location
Core/Assay Samples ?
Large and growing demand for Gold
Liquidation event at buyout of a major or IPO?
'estimate' of reserves in current mine?

investment and trading carries risk. more so when it gets emotional.

There is a better story/case for owning physical gold, and pumping the price of gold...

Currency risk is a whole different story..how sustainable do you think is that parabolic rise in the yen and swiss franc?

2nd_ave, you said "bull strategy- best move would be to (be among the first to) throw in the towel, cash out, let the market drop, then buy back in as the last towel is thrown..." This seems to go against your strategy of buying on the way down in small chunks after observing an initial drop (we already had a sizable drop in DOW off its highs, so if one starts buying now, s/he would have the cost basis well below most investors, right?) How would you time the bottom of this bear market? Since the market never moves in a straight line, there will be counter rallies, possibly up to 10% or even 15%. How would you differentiate such a rally from a real beginning of a bull market?

Thanks for your thoughts,

DavidV

Yes, I believe physical gold is probably a good way to go, but it always has to come from somewhere. Its stuck in the ground, and you can forward sell it for hedging purposes to obtain a liquid funds prior to mining. But its impossible to tell whether the bigger going concerns are overwhelmed with off balance sheet credit derivatives. The smaller players will be unlikely to be exposed, because they raise cash through issuing shares and don't necessarily borrow from anyone.

At the very least junior exploration companies are investing in one another and reaping the benefits of their trades. Hopefully, this kind of activity will continue in the future.

As far as trading in prices go, people are depending exclusively on leveraged futures trade made available by investment brokerages like Bear Stearns who is a primary broker overwhelmed with insolvent credit derivatives and borrowing 100% of their reserves. I don't think people are appraised of the nature of a collapse in Bear Stearns and how it might affect equity valuation, given the huge exposure to credit derivatives and the fact they may be supplying the credit for futures trading.

As far as I'm concerned the point was made a while back here on this blog that legaleze inside the prospectus of any ETF indexed via leveraged futures in prices of shares may be at risk if these brokerages suddenly collapse and the assets in the ETF can be swapped out if necessary as cash-equivalent. But that means the ETF holder does not necessarily own the underlying asset.

Fekete talks about a theoretical limit in the gold trade where gold goes into backwardation and the monetary system collapses. We have seen almost constant backwardation over the near futures in gold for weeks now. Are we there, yet?

Parabolic rises may not necessarily be occurring in foreign currencies because the obvious vehicle in trade against them is a declining dollar. So where does the roulette wheel stop? VERY good question. The thing that's missing is the recognition of this decline over time, and that it is now in desperate condition, seeing just about everything as overvalued, when in fact, the value in the dollar has actually collapsed.

I don't believe that anything that Bernanke or Paulson is doing is to provide relief to house dwellers in distress. Notice that I didn't call them homeowners because the banks have more equity in these houses than the inhabitants. Are interest rate cuts being passed on to individual borrowers? I think not. Will increased liquidity encourage banks to sign new mortgages with individuals who are not credit worthy? I think not. I'm really skeptical that this credit crisis has anything to do with house foreclosures. My gut tells me that the real issue here is that all of the funky asset backed paper, CDOs and derivatives etcetera were used by HB&B as multipliers of value. With each incarnation of fancy paper the price attached to the original mortgages appreciated though no value was added. Unfortunately, shuffling paper isn't a value adding exercise. Now there are no more next "bigger fools" to buy the paper. Isn't it all just a giant Ponzi scheme collapsing?

How's this for a scenario. The dollar has been made so cheap that now all the foreign investors can buy all of our real estate, like it happened when the Japanese were purchasing everything in sight. Then many will eventually move here and we'll end up having a larger labor force to help soften the cushion for when the boomers retire. Also, has anyone heard a new date on the book?

Fransix: Understand and agree that gold is finite and appreciate your time in posting a reply.

My point is, its up to the investor to choose the investment vehicle..and if they are lost without a process, even though the WIR has one, reading this popular blog..and the content/discourse ( e.g. TLT in this case ) that is not based on fact can be hazardous to the investor/trader.

Not picking on your Fransix..just pointing out something and not willing to be a participant in spreading panic. I believe you were doing the community a favor..so i want to correct the fact...not your well meaning intention.

I think the weak link between an investor/trader and their return is ...the investor/trader.

Here is another example..the POG is often discussed at length..and there is a broad depth of knowledge, willingness to share and experience here.

Here is the question for the investor or trader:

Given all that I have learned and the choices out there..what provides the best return for my portfolio, risk and reward expectations?

Hey I learned about PMs and Gold here.But I prefer to invest in sliver. :)

Want facts? Here, since the middle of Feb:

GLD +10%
TLT + 3%
SPY - 5%
SLW +30%

Since august of last year, since Bill's heads up:

GLD +50%
SLW +80%

Its our individual evaluation process that can be faulty...and its important to question what is posted here, or an individuals agenda or lack of, accuracy as well relevance to our own objectives and timelines.

We, who post, have a responsibility for what we are disseminating, wrriten about and focused on here..as the readers come from a variety of countries and background.

Even when the WIR is done for free,with numbers and insight, some investors/traders may tend to focus on the dramatic and sensational posts .

An emotional investor/trader can make poor decisions. Find safety in crowds that may be equally well informed or misinformed.

Bias selection on a specific asset class hinders returns, as owners of after tax capital I chose my investments.

Sorry, given the air time POG gets on here...Gold does not always rank up there, someday it may be the best choice...but there are so many other vehicles..yes regretfully all priced in the wooden nickel.

I think those that are investment professionals.should disclose that they work for an investment firm and the securities they are holding or buying for their clients when they post here. i notice that some do.

And note to self..sell SLW in LT portfolio on monday.

:)

Hi FranSix

Regarding gold backwardation and the linkage with monetary system collapses, you comment "We have seen almost constant backwardation over the near futures in gold for weeks now"

But the last trades in every contract that traded Friday show clear contango, not one single contract in the next month is below the prior month, including the near futures.

http://futures.tradingcharts.com/marketquotes/index.php3?market=GC
http://www.cbot.com/cbot/pub/page/0,3181,1248,00.html

-D

Thank you, C. Note. Not to worry.

Yes, the old guard is gone. A few have made "ghost" appearances from time to time under other names, only to go away again. I could recognize their writing and content.

We had a different tone back then. I was Hall Monitor, stockman was The Professor and during the holidays of 2005 we kept the blog going by exchanging thoughts and links for several days while our host was away.

It all works out in the end.

Best,

Re: Gold Contango

Thank you for those links.

Gold traded in backwardation daily. I remember at least one close in backwardation in prior weeks. Spot prices were higher than the near futures price very frequently, (albeit for brief periods - unlike copper or oil trading for months in backwardation) so I doubt we'll be seeing any meaningful correction.

Sorry for the lengthy discussion on gold. Lots of time to discuss the fundamentals, since my stock won't budge. This is why I come here to read the open discussion on other vehicles.

You will be provided with charts occasionally to better express my point of view.

Outlook on Silver: This coming week will be "crunch time" for silver to continue to appreciate against gold and lend some integrity to Silver/Gold continuing on trend for the next few weeks.

ALOHA !!

The experts of past free markets ... In times like this it is good to look back and realize just how much things in financial markets have not really changed that much in 80 years! The experts today even our President are saying the worst is over and economic growth is at hand ... YADA YADA!!

Who is the common denominator of all past and present financial ills? I'll give you a clue the first three letters are "FED" ...

From 1927 to 1933 ... six years ...

READ ON:
1927--"We will not have any more crashes in our time"---John Maynard Keynes

Jan.12 1928--"I cannot help but raise a dissenting voice to statements that we are living in a fools paradise,and that prosperity in this country must necessarily diminish and recede in the near future"-- E.Simmons--president New York Stock Exchange

Dec.4 1928--"No congress of the U.S. ever assembled,on surveying the state of the Union,has met with a more pleasing prospect then that which appears at the present time.
In the domestic field there is tranquility and contentment--and the highest record of years of prosperity.In the foreign field there is peace,the goodwill which comes from mutual understanding"--Pres.Calvin Coolidge

Sept.5 1929--"There may be a recession in stock prices,but not anything in the nature of a crash"---Irving Fisher PHD. Professor of economics-Yale University

Oct.24 1929--"This crash is not going to have much effect on business"--Aurther Reynolds-Chairman Continental Illinois Bank

Oct.25 1929--(Black Friday) "There will be no repetition of the break of yesterday--I have no fear of another comparable decline"--A.W. Loasby--Pres. of the equitable Trust Co.

Nov.1929--"The end of the decline of the stock market will not be long,only a few more days at the most"--Irving Fisher

Dec.1929--"I see nothing in the present situation that is either menacing or warrants pessimism--I have every confidence that there will be a revival of activity in the spring,and that during this coming year the country will make steady progress"-- Andrew W Mellon--U.S.Secretary of the Treasury

May 1930--"While the crash only took place six months ago,I am convinced we have now passed through the worst and with continued unity of effort we shall rapidly recover.There has been no significant bank or industrial failure.That danger too is safely behind us"--President Herbert Hoover

March 9 1933--Executive Order Of The President Of The United States--
"By virtue of the authority vested in me by---The Act of March 9 1933--In which Congress declared a serious emergency exists,I as President do declare that the national emergency still exists;that the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to peace,equal justice,and the well being of the United States;and that appropriate measures must be taken immediately to protect the interests of our people--

All safe deposit boxes in banks or financial institutions have been sealed,pending action in the due course of law.All sales or purchases of such gold and silver within the borders of the United States and its territories and all foreign exchange transactions or movements of such metals across the border are hereby prohibited-- Your possession of these proscribed metals and/or your maintanence of a safe deposit box to store them is known by the government from bank and insurance records.Therefore be advised that your vault box must remain sealed,and may only be opened in the presence of an agent of the "Internal Revenue Service".END

Hey, Fed's got the only choice now...it's ugly but the only one...if you choose deflation it's a certain death for US economy...
And as for the free market...it now exists only in history and economics books..
Support the FED !!! :)))

Stagflation, depression, collapse...take your pick...

Good to see you are still 'round MarkM-

A good read-

http://www.mises.org/story/2901

Someone mentioned QB/Barron's. An expanded version of their views can be found in this 5/2007 paper-

http://www.gloomboomdoom.com/marketcommentary/download/CONT_USD.pdf

Craig mentioned common sense. Certainly agree.

I’d also add flexibility. You have to be prepared to change when the facts change (or when the trend changes) even when it’s unexpected and outside the norm of belief.

You don’t want to be path dependent on beliefs. As humans we can be impartial to building loyalty to ideas in which we have invested time. Our emotions come into play.

In Taleb’s Fooled by Randomness, he writes about one of George Soros’ strengths is he changes his opinion rather rapidly, without the slightest embarrassment.

More Taleb---“. . .researchers found that purely rational behavior on the part of humans can come from a defect in the amygdale that blocks the emotion of attachment. Perhaps Soros has a genetic flaw that makes him a rational decision maker.”

Yet Taleb acknowledges . . . . “I am emotional and derive most of my energy from my emotions. . . . If my brain can tell the difference between noise and signal, my heart cannot. . . .Since my heart does not agree with my brain, I need to undertake serious action to avoid making irrational trading decisions.”

It’s time for a bear market rally. This morning’s headlines….

Markman on MSN.money
Sell stocks while the selling's good
http://tinyurl.com/22y6ln

Morgenson in NYT:
Rescue Me: A Fed Bailout Crosses a Line
WHAT are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year?
http://tinyurl.com/2hvp4w

CNN/Money headline:
Caution: Crumbling Wall Street earnings ahead
Big brokerage houses expected to post poor results next week as credit crisis widens. Even venerable Goldman Sachs and Lehman Brothers thought to falter
http://tinyurl.com/yns8sn

It’s time for a bear market rally. This morning’s headlines….

Markman on MSN.money
Sell stocks while the selling's good
http://tinyurl.com/22y6ln

I'll try posting one site at a time...Typekey ate my original post.

It’s time for a bear market rally. This morning’s headlines….

Morgenson in NYT:
Rescue Me: A Fed Bailout Crosses a Line
WHAT are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year?
http://tinyurl.com/2hvp4w

It’s time for a bear market rally. This morning’s headlines….

CNN/Money headline:
Caution: Crumbling Wall Street earnings ahead
Big brokerage houses expected to post poor results next week as credit crisis widens. Even venerable Goldman Sachs and Lehman Brothers thought to falter
http://tinyurl.com/yns8sn

I mentioned last week a rally alert originating in Gann cycle charting...

Sell my LEH puts Monday? Load up on SSO & QLD?

Namkcots, thanks for QB paper.

Perspective in video?

http://ronsen.blogspot.com/2008/03/napalm-sunday.html

kaimu--hair-raising reading.

Good to see the continued discussion on pm's. With regard to the bullion etf's, it's fantastic to have people digging into this stuff so that we don't get scr*w*d anymore than we already are.

kaimu, if you had to sum up the problem with the bullion etf's in one sentence what would it be?

More global agriculture concerns.

Rice supplies set to fall to 25-year low

World supplies of rice are reaching dangerously low levels after stores of South Asia's staple food fell to a 25-year low and governments battled to stabilise domestic markets.

The US Department of Agriculture is predicting global rice stocks will fall to about 70 million tons this year, the lowest level since the early 1980s and half the level in 2000.

http://tinyurl.com/2xruqq

DavidV- reference your 134a post:

my thoughts about a bull strategy were the result of trying to mentally place myself in the position of the 'average' mutual fund investor...if the market is 'us,' then it adds to my understanding when i view it from different perspectives...in this case, just happened to find myself wondering what effect last week's headlines might have on the complacency of the buy-and-hold mentality...my own sense of financial (in)stability in the US (that it's been one long party since the early eighties, only momentarily interrupted by a correction in 2001 and replaced with speculation in housing) is probably shared by most people, even if suppressed by denial most of the time...david walker's recent interviews and speeches ring true (and yet have little effect) for that very reason...

most readers are probably like us, average investors (rightfully) concerned about the possibility of economic storms on both the ST and LT horizons, and want to be positioned to avoid taking hits or (better yet) to profit from them...

the turning point for me was the march 7 announcement of february's employment numbers->why bother waiting for the official pronouncement of the recession....the signs are everywhere and to be ignored to one's detriment...

my suggestion to any bulls in this market (and one is a bull by default if fully invested on the advice of the typical 401k advisor) is to sell into the rallies and buy back in when it bottoms...when will we recognize a bottom- from a sentiment standpoint (which is usually how i try to determine these things)-> [a) there will be many false (but tradeable) bottoms, and b) a final bottom, which no one will recognize except in retrospect], it's typically defined as 'when no one wants to touch stocks'...that kind of sentiment change in this age of mass daytrading may take years...keep in mind that 'bottoms' can take the form of extended swings within a trading range that ultimately leads you back to the starting point->you still lose, right?

just a guess, but trading the swings and/or the sector rotations will outperform any other strategy over the next few years...may eventually develop into another category on the finance shelves at Borders and Barnes and Noble...

all JMHO...

I am a long time Jim Rogers fan and believe he has been "right on" regards commodities for some years now. You can see/listen to his latest interview at this link: http://www.youtube.com/watch?v=lTXEWh2yT_g

Rogers, I remember him pounding the table for commodities about 10 years ago at the Barron's round table. How he could see that far ahead, I don't know--kind of amazes me.

Re: FranSix:

"imo, the U.S. will be involved in another terrorist debacle, creating what policy makers will hope to another foreign policy adventure gaffe in military keynesianism, in the hopes people will be distracted enough to ignore the financial crisis, and along with it more authoritarian controls on society."

Sadly, I must agree with you.

In fact, I would expect the adminstration's social models may account for increases in social unrest / crime rates as unemployment rises in the wake on the credit crisis. The military is always the employer of last resort for this basin of restless unemployed. It worked in Germany in the '30s. History always repeats.

Jim Rogers -

He is one of these guys who is always certain, often wrong. (The other alternative is always UNcertain, often wrong.) Nobody predicts very well. Buffett says he has a batting average of under .400.

Rogers is also a terrible trader. By his own admission, he can't time things. SO, I guess he's wealthy enough to just make big buys, tolerate being way underwater for a while, and look to the long term. But nobody knows even that. The Wall St. Journal had a frontpage piece some years ago about how he frustrated Wall St. He talks a great game but publishes no results. Who knows how good he really is?

Also, his commodity fund got all tangled up in the Refco scandal. I can't escape the thought he got a bit snookered by them, the way they took his investors' money offshore out of US regulation and into discretionary funding categories. Have his investors EVER gotten their money back? Does anybody in the Cara community know?

Also, after saying for years he was going to move to Shanghai, he moved to Singapore instead. Did he lack appetite for the rough and tumble?

You may ask: are my comments rooted in envy? OF COURSE !

I don't think the FED can save all the banks and brokerages that are in trouble.

Have any of these banks and brokerages thought about the possibility of giving up on these derivative deals they're a party to.

Everyone already knows that Ambac and MBIA can't honor their guarantees. We know CFC can't honor their commitments along with Bear and possibly Lehman.

So, what we need is for everyone to sit down at the table and reveal which contracts and guarantees they hold on whom and which others they're liable for and then we can clearly see which have value and which don't.

Then as long as each party agrees we rip up the worthless ones and adjust everyone's balance sheet accordingly.

The only way the companies involved wouldn't want to do that is if some companies bet right on the contracts and guarantees and stand to collect big.

But, if they're all holding unpayable cross-commitments to each other, then it seems logical to unwind and dissipate them and get on with normal business again.

I may be way off in fantasy land here but it makes alot of sense as I think about the problems out there.

Rob.

Denny,

If Kaimu allows me, I will try to offer my own reply to your question:

- The problem with the Bullion ETFs is that they are derivative products, not the real thing. If you want bullion, buy it, not some peace of paper junk.

Cheers,

yes, I "own" some Rodger's commodity fund. At one point there was a group offering to buy people out at a 50% discount. Supposedly, the fund has gotten back about 93% but, it is still tied up in court. The people at Beeland management have told me they may get back close to 100%. I am still in it and have been told that I can sell it if I choose. The fund is up but, it has not been a great investment and I harbor some doubts about Rodgers.

Are RYJUX and RRPIX derivative products?

don't know if it will help with the problems but when i post i always click on the post link at the bottom of bill's page with out entering text. the browser goes to comment submission error page and and i can enter the text there. don't believe i've ever had a double post or a comment not accepted. hope this helps.

Rob-

anyone who watched television in the sixties will understand why i keep expecting steve douglas (fred macmurray) or ward cleaver (hugh beaumont) to step in and clean up after the boys and put them back in their place(s)...i've mentioned previously that david walker comes close, and as ceo of a new think thank he may eventually come through...but tv was fantasy land, and so is the idea that banks and brokerages are about to reveal anything to anyone...the US is in decline, and i guess we'll have to wait for the next administration to find out if someone finally has has balls to turn it around...who was it that joked bin laden is learning from history to stop getting in the way of america's self-destructive tendencies- it's no joke->any more terrorist attacks would only serve to unify the american people and delay the inevitable (now i'm joking...seriously, we should all become more involved in political and economic reform even if it's something as simple as attending city hall or school board meetings->every change begins with small acts and decisions)...

Wollybear1 re Jim Rogers' fund -

THANKS for your forthright disclosure on Rogers' fund's situation. I wonder how much of his own money was tied up, or whether he just enjoyed his fees!

BTW, the video clip by Rogers is GREAT. Very strong defense of capitalism vrs. socialism-for-the-rich. AND, the video demonstrates to me that talk is one thing, performance another!

woolybear1,
RYJUX and RRPIX are derivative products by my simple definition - their price derives from something else. I suspect they use futures to short bonds and invest most of the cash not required for margin in treasuries.
Disclosure: long DXKSX (2.5 leverage) - in too early and underwater

just posted an updated chart of the gold miners/gold ratio.

despite the agony its been the past while watching gold break to record highs while the shares underperformed, i think a firm case can be made that the miners are bottoming relative to gold.

http://jglobal.blogspot.com/

Housing Group Challenges Fed´s Bear Stearns Deal

http://tinyurl.com/39obyv

The Wall Street Journal reports banks doing deals Sunday night, JPMorgan would buy Bear Stearns for a per-share price that is likely to be “considerably less” than the $30 the stock closed at Friday.

The Journal and the Financial Times both reported the sides were in a rush to complete a deal before financial markets opened in Asia for Monday morning trading, amid fears that a crisis of confidence could roil the system further.

BSC is not FDIC insured, a complete buyout cannot happen.

ABCP Trust Funds To Declare CCAA:

Globe:

http://tinyurl.com/24sdez

Thank you for your clarification, 2nd_ave. Which sector ETFs are you planning on trading while you think we are still in a bear market? Which of them will you trade with a short bias and which ones with a long bias?

DavidV

David- i'm going to let the market tell me what to do each day...rediscovered the advantages of going into cash at the end of each day last week->being flat at the open was what allowed me to capitalize on (re)entries into DUG/SMN two days in row...with the current exception of a medium-term position in RRPIX, holding only cash...

How market will react if Fed cut only half a point instead of .75 or 1.0%

Re: Jim Rogers
He laid out the bullish scenario in Barron's on 4/22/96. I kept a copy of it. His scenarios were right on :
Greenspan created high amounts of money to try to save the banking system;
Japanese created gigantic amounts of liquidity;
German money boom when H. Kohl overpaid the E. German mark during unification. (Note : we have even more money from Opec and China now).

On demand and supply side, China, Indonesia and Japan are big consumers, inventories of every conceivable raw materials are at all time lows because of Soviet dumping; Soviet Union has sold everything they can to get hard currency.

The sectors that will benefit are : manufacturers of steel, fertilizer, and equipment manufacturers.

BEst play is long natural resource countries like New Zealand, Australia, Canada and Malaysia. Specific names : Broken Hill Property (BHP), Cominco (taken over by Teck), Noranda (TAKEN OVER), Canadian and Australian $, Goldman Sachs Commodity Index.

So he may be off, by many years, but the scenarios played out perfectly.

In his book "Investment Biker", he mentioned about investing in one of the S. American countries, and in his next book (the one he drove the yellow mercedes round the globe), I was extremely surprised that the amount was under $2,000. If he invested in the same way in commodities,and add only on the way up, he can't be too badly hurt during those interim years.

Just like poker, it is how you place the chips that count.

Hi,

Nice open for PoG in early Asian Trading...

Enjoy,

Cheers!

Finger Lakes, etc.

RE:BSC

IMHO, unfortunately, the problem at BSC is much more complicated than sitting down together and reconciling derivatives contracts. Bear Stearns is counterparty to derivatives contracts of all types, shapes, and sizes across global markets. Their financial problems may stem from subprime losses devouring their cash/liquidity, but now it has ramifications on their business dealings across the board.

I think the question now with BSC is how do they get out of this mess with the least damage? Is it going to be a piece-by-piece sale? Undoubtedly the other IBs who have enough liquidity to be aggressors in the situation will try to lean on BSC and destroy their positions in order to then pick at the carcus(sp?).

BSC can't sell itself outright without opening up the books for potential acquirers and once that information is known, it will be utilized against BSC. They will likely have to unload their portfolios at massive discounts simply because they do not have enough of a cash position to service margin. JPMorgan will likely be doing all they can Monday to smash BSC's cash position into smithereens before they buy it.

I really feel bad for those who were taken by this awful company. They were not forthright regarding their financial health and past that they have no real competitive advantage to a JPM or GS. Many of BSC trading desks and operations surely came to a screeching halt last week as counterparties across the globe shut BSC off from any further dealings.

It is these kinds of situations that are continuing to eroded confidence in the USD and more and more for currency of any kind. Companies are being outright fraudulent in revealing their true health. That is why I think gold is being underestimated here as everyone looks for an "inevitable" pull back. Gold may be appreciating against the USD but it still has room to appreciate against other currencies in the near term. What will happen to gold vs. the euro once the ECB has to be more aggressive in cutting rates to cushion the blow to their export industries? The "inevitable" pull back may just never materialize. Do the risks of having exposure to gold at these levels outweigh the risks of NOT having any exposure to gold? I'm not saying we won't get a significant pullback - never say never - but its difficult to fathom that one is imminent (sans a shocking deciision by the Fed not to deliver the expected rate cut this week.)

Look at the options in your average 401K lately??? Where are people supposed to put their money right now? Most 401Ks have about 8 mutual fund options a bond fund and a money market fund. If you don't want to be invested in equities, are your other options significantly safer? I bet in 10 years every 401K will have a commodities fund option, just in time for the commodities bull run to end!
For right now you will have to accept the options that the experts at HBB have deemed most appropriate for you! terrifying!!!

Namkcots-

Good to hear from you. Yes, I am around. I do not post much to blogs. Life has been busy and good.

Hope you avoided the down draft. Good luck.

AP
JPMorgan says it is would buy ailing Bear Stearns for $2 a share
Sunday March 16, 7:12 pm ET

NEW YORK (AP) -- JPMorgan Chase says it will acquire rival Bear Stearns for $2 a share in a move aimed at averting spreading panic in the financial markets over tightening credit.

JP Morgan says the all-stock deal has received the required approvals from the federal government and the Federal Reserve.

The Fed will provide special financing to JPMorgan Chase in connection with the deal. The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

vinod- why bet on what the Fed will do and how the market may react...at this stage of the game, there's enough volatility to allow you to make money waiting for over-reactions to the news each day (and at less risk to you)...the 'big' plays don't happen that often->skimming a little each day consistently can add up over a year...

I guess I was a bit late on my ramblings as I see a sotry on WSJ that JPMorgan will buy BSC for $2 a share. Are you kidding me? I guess the vultures finished plundering BSC by the end of trading on Friday.

Meanwhile why RTT news ticker just flashed news that the Fed cut discount window from 3.25% to 3% effective immediately and extend credit loans from 30 to 90 days! The desperation is pungent!

Second paragraph meant to begin "Meanwhile MY RTT news......

BSC @ $2/share? seriously, this is good news in the sense that someone finally puts a real-world valuation on some of the crap brokerages are holding...assuming JPM is buying smart, doubt we get the chance to join in at the same price, but will be taking a look monday...

note that US futures are jumping on the news...S&P trading up 12.50...

Next in line are Lehman and Merrill. I'll bid $1.50/sh for Merrill.

vinod- should be an exciting day at work tomorrow- keep us posted...in the meantime, i see more than one train you may be interested in boarding monday...

Who were the big shareholders of BSC? A $90 stock to $2 in a matter of a month.
That ought to inspire confidence in the other financials. I'll be up early watching the overseas markets. Going to buy more coffee and an extra Gaviscon for this week.

I don't see how it can be good news that BSC is only worth $2 per share.

How much is Leh worth? $3.?

JPM has the most outstanding derivative positions by so much it's crazy. A 74-1 ratio. 91 Trillion of derivatives to 1.2 trillion of assets. So, if Bear is bankrupt how can JPM be solvent?

If the futures do bounce and the market does rally on this news, I'll be standing by when it runs out of steam to back up the short truck.

There's still way too many unanswered questions for me to even think about going long anytime soon.

2nd,
I hear you with the sixties TV references. I never saw any of them live but saw the re-runs growing up in the seventies. We definitely need someone like Ward Cleaver now. Honest and true and firm but loving. We'll probably never see anyone like that in power anytime soon.

Billysundance,
I agree there may not be a correction in the POG because the FED doesn't have enough money or power to save all these institutions this time. It is too bad we'll never see Bear's real balance sheet. That would have been enlightening.

Rob.

Dow mini shows it is down 70. Gold up 16. Anyone have any indication what other market is trading?

owners/students of Vista Gold - VGZ

I'll have a chance for a one-on-one session with the CFO of Vista Gold on Tuesday. Does anyone have knowledge of their resource valuations, or planned production economics which they can share, and which I can question on your behalf?

All information and issues will be appreciated.

2nd
I have been very careful with my trade
If I make $50 I get out of trade
My intension now is to make around $500/wk
And not looking for big payoff
I did brought one put contract on bsc on Friday strike price 30
I do not know what will happen now with this contract

I do plan to move my 401k which is always in high yield bond at fidelity in to
ETF at right price. I got burn very bad in this 401k in 2000 crash and did not touch any
Mutual fund since than

POG also spiking...man, these have been the best of times for trading...wonder how many three star restaurants maromatics plans to hit in paris...

$2 a share? WHAAT?

JPM Buys BearStearns for 236.2 Million dollars.

tell me it's a rumor!

JP Morgan to buy Bear for $2 per share.
wow. wow. i am speechless.

http://tinyurl.com/2jaxmq

As Reported at Bloomberg, Yahoo, etc.

http://tinyurl.com/2k8uro

Nikkei opens below 12,000...

http://tinyurl.com/yrm3b

Bear Stearns sold! It's done to JPM..per WSJ

http://online.wsj.com/article/SB120569598608739825.html

The deal calls for J.P. Morgan to pay $2 a share in a stock-swap transaction, with J.P. Morgan Chase exchanging 0.05473 share of its common stock for each Bear Stearns share. Both companies' boards have approved the transaction, which values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16. At Friday's close, Bear Stearns's stock-market value was about $3.54 billion. It finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday.

Effective immediately, J.P. Morgan Chase is guaranteeing the trading obligations of Bear Stearns and its subsidiaries and is providing management oversight for its operations. The deal isn't subject to any conditions, except shareholder approval. It is expected to close before the end of the second quarter.

and deeper into the article this...

Meanwhile, worries are deepening that other securities firms and commercial banks might be on shaky ground. Lehman Brothers Holdings Inc. Chief Executive Richard Fuld, concerned about the markets and possible fallout from Bear Stearns's troubles, cut short a trip to India and returned home Sunday, ahead of schedule, according to people familiar with the matter. The decision came after a series of calls Saturday to both senior executives at the firm and Treasury Secretary Henry Paulson, these people say.

Went long April $Gold right at the open.

AP
Fed Takes New Steps to Ease Crisis

WASHINGTON (AP) -- The Federal Reserve announced a series of new steps Sunday to help provide relief to a spreading credit crisis that threatens to plunge the economy into recession.
The central bank approved a cut to its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.

I'm letting go of some GLD and rotating into Gold juniors and energy juniors. Lets hope it goes better than when I let go of the gas.

Anyone watching the forex markets? The dollar is absolutely collapsing, especially against the Yen. Down more than 2% since Friday.

S&P futures are down 1.5%.

March 22 is the next pi cycle turn date. These dates coincide with past stock market crashes, including 1929 and 1987 Dow, and 1990 Nikkei:

http://tinyurl.com/2druu9

I don't mean to scare people, just to point out the possible symmetry and what it is intimating.

The dollar is in absolute freefall against the Yen, down 3% now:

http://www.dailyfx.com/charts/Chart.html

I'm scared just watching my gold trade. Seriously.

Every time I hit refresh POG climbs .30.

I thought Friday's action might roil the overseas markets. I would not be at all surprised to see a crash Monday in the US, ignoring the Fed action that is widely anticipated and priced in.
If not, I will load up on more puts and 2xInverse (again).

Barbera had an interesting EW article projecting 500 on the S&P during the Super CyCle Bear we appear to have entered.

"Bear Stearns's profit exceeded $2 billion in 2006, yet the price JPMorgan is paying ( -- $270M --) is about one quarter the value of the securities firm's headquarters building in midtown Manhattan. The 1.2 million-square-foot, 45-story structure built in 2001 is worth about $1.2 billion..."

DJIA futures now down 159, Nikkei down 375...

Barbera article; long term EW:

http://tinyurl.com/39yawo

I just want to point out that, according to the smirking, deeply tanned, petro-coiffed Fast Money guys, on Thursday night - it's "Too late for Gold, go long Goldman."

Neutral gold, long GS. That's their trade.

No thanks.

Futures** Last Chg High Low
Mini Dow (MAR) 11793 -189 12124 11783
S&P 500 (MAR e-mini) 1268.75 -22.75 1312.50 1253.00
Nasdaq (MAR e-mini) 1680.00 -30.00 1748.25 1674.00

I don't think it's too late for gold...
When BS sells for less than the real estate value, what does that sya for the rest of the firms?
Cockroach theory watch out.

what goes around?:

"This is not the first time Bear Stearns has earned a place in Wall Street history. A decade ago, Bear Stearns refused to help bail out a hedge fund that was deemed "too big to fail." On Friday, the tables had turned, with the now-struggling investment bank in need of the same kind of aid...

"Cayne is the same executive who refused to let Bear Stearns provide support as part of a Federal Reserve-led plan to rescue Long-Term Capital Management in 1998. His reticence was said to deeply anger some of his fellow Wall Street CEOs, and the episode came up every time Bear was reported to be in trouble in recent months."