Thank you Bill for all you do. Alas, I think HB&B
will fight tooth and nail to prevent open access to SEC filings, but I for one will e-mail SEC Office of Secretary, on this most important XBRL initiative.

Good morning.

Here are your Cara 100 Ratings Changes:

Downgrades:

KSS - to Neutral @ Robert W. Baird
RY - to Sell @ Citigroup

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

Have a great day.

Steven Pearlstein's article below sums up current events quite succinctly...

"Don’t be fooled by the latest sucker rally on stock markets or predictions that the “worst may be behind us.” The first thing you need to remember is that these guys still don’t have a handle on what they’re dealing with – nobody does. And even if they did, we know that when it comes to their own balance sheets, they simply cannot be trusted."

http://tinyurl.com/4z9c9s

Alright, let's get the ball rolling....

Send rule comments to: rule-comments@sec.gov
Send comments to the Chairman at: chairmanoffice@sec.gov

For reference, here are all the SEC contacts:
http://www.sec.gov/contact/mailboxes.htm

The last week was characterized by investors increasingly taking the view that the worst of the credit crisis was over. They seemed to be shrugging off further substantiation of the dreadful state of the US housing situation, as they digested the latest round of quarterly earnings reports.

Read all about this in my regular weekly blog post, highlighting some thought-provoking news items and quotes from market commentators during the past week.

Here is the link to the “Words from the Wise”: http://tinyurl.com/6n967t

Enjoy the read.

Re: Japanese Gubmint Bonds

"Market participants told The Times that last Friday’s Japanese government bond (JGB) collapse had caught a number of extremely heavily leveraged hedge funds and global macro investors in the United States and Britain off guard and that the huge sell-off had created some hefty casualties.

Trading-room chatter suggested that GLG may have been among a number of asset managers now nursing gaping wounds where previously they had held large JGB positions.

Other theories included speculation that big domestic players, such as Nomura and Daiwa, may also have taken heavy beatings in the surprise rout.

“You can see from today’s trading that the big market makers in JGBs have all been carried out on stretchers and it’s left everybody else clutching at straws,” said one broker at Tokyo Mitsubishi UFJ.

"We are seeing a very ugly market with some very worrying disconnects between what should be happening and what actually is happening.”

Stocks staged strong early moves north as short positions were squeezed out of large blue-chip shares today.

Shares in banks, insurers and securities houses rocketed on expectations that Japan’s return to inflation after a 20-year hiatus would eventually prompt an interest rate increase by the central bank."

AND

"The dollar slid against the yen after Japanese exporters sold the greenback hard."

Times UK

http://tinyurl.com/6mlpsa

My chart:

stockcharts.com

http://tinyurl.com/2s4jga

My hypothesis: that the yen will appreciate against the dollar, carrying bullion prices with it as price adjustments in the various currencies buoy gold prices.

looking for an entry into CAF (Shanghai A Shares)...

Looks like the S&P hit resistance at 1400 first thing this AM. The question is who is Ben in the tank for this week?

The dollar? The consumer? The banks?

My prediction is that if he cuts we test the lows again and if he holds we move through 1400 while the dollar strengthens.

My reasoning is that if he holds it could also inspire a rally as people will dump commodities and bonds and stocks will be one of the only places for the money to go as the dollar strengthens.

What do you all think?

Rob.

Rob.

I switched computers and trashed the old one. Does anyone have the link to or remember the site that lists stocks that gap up in the morning?

Just my $.02 worth (What's that worth after inflation?) Anyway..on inflation

Saw an interesting stat reading while I couldn't sleep...actually a graphic...given the feds have changed the way inflation is measured twice since 1983, whereas inflation is currently running at ~4% according to the measures in place before Clinton got to them, it would be running 7+%, and before Reagan booted Volcker out, it would be running at 12%. Probably nobody here is surprised.

On why ADM is not going up. I surmise that after the next election, there will be less support for ethanol, but you need to get those cornbelt votes. Therefore, perhaps money thinks ADMs best days are over, for now.

On why Exxon isn't rising-I wonder if that has to do with the fact that 90+% of all oil reserves are held by national companies now instead of the internationals. From my understanding reserves are a significant driver in stock price. Well, all the nationals (backed up by their home countries armies) are taking what's theirs. So the Exxon's of the world are currently on the short end of the stick (relatively) and are spending their profits buying back stock.

There was another test of 1400 right there?

What's that rule of 3 thing?

Here comes the third test as I write this.

Rob.

Anyone have an opinion on YHOO today at $26.50 - even though the offer expired I still believe there is a good degree of safety here.

If the share price falls much below the current level - it seems logical that shareholders will demand a deal be done with MSFT at the $31 buyout price. It has been in MSFT's best interest not to show their hand.

Does anyone really think MSFT is going to walk away here?

For people who wants to play the solar sector here is a new ETF

TAN:

http://www.fool.com/investing/etf/2008/04/22/sunny-days-for-your-green-portfolio.aspx

http://www.thestreet.com/_yahoo/funds/etf/10412128.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Bill,

We could start on online petition here. And possibly get google finance involved to be the front runner to make it widely available to the public?

YHOO/MSFT:
I beleive in the theory:
MSFT is going to walk away causing the YHOO to drop to low 20s.
Everyone starts blaming the YHOO mgt for not taking the offer.
A month or two later MSFT comes back with a slighly higher offer and YHOO has no choice but to accept it.

For the Bank of England to take such extreme measures, it is safe to assume the entire financial system is in peril...

"The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch.

Ferocious and unprecedented secrecy means taxpayers will never know the names of the banks that have been supported through the special liquidity scheme, which was unveiled by Bank Governor Mervyn King last week.

Requests under the Freedom of Information Act are to be denied. Details will be kept secret even after 30 years - the period after which all but the most sensitive state documents are released."

http://tinyurl.com/4dut7t

IEF says we're selling off.....
I see we're testing and re-testing S&P 1400....sure a lot of activity into IEF and gold for a rally.

Re: Investment Demand For Bullion

I believe that investment demand for bullion will surge, regardless of price because if bullion prices crash, so will everything else.

Large investors seeking insurance on their investments will look at gold as a way of retaining value, even if the price goes down precipitously, because so many forms of investment are tied to credit derivatives and a wild west trading system. Notional value in gold against other investments will probably increase, rather than decrease.

That means cash will come into the system against highly leveraged short positions.

Bought a small position in YHOO at $26.66 - I am back in YHOO for the first time since selling on the day the offer was announced.

I am consider selling out-of-the-money call options to reduce risk, looking at selling the Jun. 30 calls which are currently at about $.70.

That was the 4th test of 1400 and now we're already into the 5th test.

Did you ever get the feeling that the only people in the market right now are the banks and brokers?

Rob.

QID, DZZ, SDD. might be looking to get in at the right time. watching rsi, daily/weekly stoch, and vol. no positions

Note that Warren (yes, the oracle of omaha) said today multiple times on CNBC that this would not be a short and shallow recession.

They tried to get him to change his tune multiple times, and failed multiple times too.

He kept repeating that people will be surprised at the length and depth of the downturn.

Will the sheep wake up before or AFTER they've been not only shorn but slaughtered too?

Well there it was the 6th test of 1400.

I just stuck my neck out and bought 5 Sept 132 DIA puts. I'm betting the FED is more worried about inflation than pumping the banks and stock market.

Rob.

AMD launches first computer brand, aimed at small and medium-sized businesses, with design and sales help from its major chip customers such as Dell Inc.

AMD Business Class desktop personal computers will be followed by notebook PCs in the second half of this year.

http://tinyurl.com/4yp5nm

Bill wrote in yesterdays Week In Review (WIR #17):
As I say, “Here is the list of the ten highest-weighted non-financial stocks in the Nasdaq Composite. Put them in a watchlist (see Google Finance Portfolio) and watch them like a hawk. If you want, add a couple like SNDK and ADBE:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY”

Here's my two cents on AAPL:

Apple to the Core: Why Steve Jobs is buying PA Semiconductor
http://www.pbs.org/cringely/pulpit/2008/pulpit_20080425_004775.html

excerpts:
Apple this week bought a fabless chip company called PA Semiconductor and pundits far and wide are trying to explain the deal with broadly varying ideas, some of which are close but none seem to really understand what the deal is about. In the short term this acquisition means precisely nothing to Apple users. In the long term it could be quite significant, however, and gives a number of tantalizing hints about Apple's hardware strategy.
Why would Apple, having already jumped from PowerPC to Intel, spend $278 million to buy a company that is best known for designing PowerPC chips? Are they preparing to dump Intel? No. Does it have anything to do with Intel? Yes.
...
In the short term, it was to scare Intel into lowering prices by at least $278 million over two years. And in the long term it was to create a replacement for Intel as the prime CPU for Macintosh computers.

Re: Euro Area Yield

Small change in the short term yields in Euro bonds:

http://www.ecb.int/stats/money/yc/html/index.en.html

So if yields are up in ¥ and yields are down in €, then the euro declines against the ¥.

BC government bans uranium prospecting
http://tinyurl.com/4se6az

Rob- think you're right...if the Fed holds/raises, would indicate they think the economy is recovering, and stocks will catch a bid + bonds sell off...

Crystallex Update: STRONG BUY!

They request the beginning of the plan Mibam Las Cristinas and Brisas
Monday, April 28, 2008
Commission miners and community representatives, indigenous and Creoles, traveled to Caracas to meet with the Minister Rodolfo Sanz

Isidro Casanova

From all sides come to ask miners to problems minister Rodolfo Sanz.
Faced with the announced visit to Guyana's Minister of People's Power for Basic Industries and Mining, in order to address the problem mining, upon instructions of the President Hugo Chávez Frías, and representatives of the main spokesmen Communal councils of communities Creole and indigenous people of the parish of San Isidro town Sifontes, they know to press their high expectations on interviews with the minister in this regard and hope that makes this act of presence in this town. That in order to ask directly to the high government official, the urgency to give definitive start to the important developments of mining Las Cristinas and Brisas del Cuyuní. They added informants that these projects are essential for the consolidation of twenty-one communities that make up this parish and town as a whole.

10-year wait

The Las Cristinas project based on an award of the CVG and Crystallex operated by the company, has more than ten years of waiting for permits to boot. It was reported that the company has met all environmental requirements, leaving the project in anticipation of the record of starts.

Situation similar records the project Brisas del Cuyuni, operated by the company Gold Book, featuring its own concession, gave some time ago the last requirement, reported that the Ministry of Environment responded realizing the adoption of the draft, leaving in anticipation of Start record

A commission composed of Pasiano Elliman, Daniel Gomez, Eligio Velasquez and Freddy Enrito-by indigenous communities-and Yokasta Cedeño and Alcides Herrera by native communities, was designated to travel to Caracas and to deliver an urgent letter to the minister Sanz, requesting his presence in Las Claritas for a meeting with community councils and business representatives will be accomplished action to ensure these projects starting with the construction of facilities and initiation of production.

In his letter to the holder of MIBAM spokespersons of the Communal Councils point out that "Our reality today is the mining and mining will remain, however the mines, despite the good price of gold, no longer pay for being very trajinar, hence we need to start these projects with new technologies so that miners can continue working. "

It goes chairman of Minerva

During the visit of Minister Rodolfo Sanz, the company conducted CVG Minerva, there were numerous complaints to management, bringing the consequence that some managers have been withdrawn and President Jose Mercado, will last until this month, according to unofficial information.

Mentioned as possible replacements Market for engineers, Ernesto Flores, who comes to exercise a vice ministry and Luis Herrera Mendoza, current director of National Survey of the Ministry of Basic Industries and Mining. ISIC.
http://www.eldiariodeguayana.com.ve/...

staying away untill FED decision

Rule of three says that the fourth test almost always breaks the support/resistance. In my experience this works on hourly and longer timeframes. On a daily chart the fourth test of 1395 broke that resistance but there has not been much movement, probably due to the interest rate decision tomorrow. I would expect a rally to the 200 day on any news that is not bad.

Colin Twiggs seems to be right in that traders are betting on inflation carrying asset prices higher. I don't expect it to happen for long with bond prices seemingly topping.

Bill:

I read you last entry, and about your frustration.

Know you do make a difference, that while the path is hard, you are helping make people's life better. You are a honest voice, which can be trusted and heard.

I help people every day, I know the feelings you mentioned... yet by reaching out, by sharing. That makes the difference to keep trying:

You keep referring to "Life is beautiful"

when you say there is no tank: you miss the point.

The tank is there: the tank is "possibility" and hope

You see life is beautiful: simple becuase you are trying, reaching out and making a difference!

I said it before and will say it again: your posting here: makes a difference in many different ways: in helping others, in helping yourself voice inner thoughts, in working out ideas, by letting others: know we are not alone.

You see the tank is us: it's the idea and dream of not giving up and each moment living... in that we will make a difference in these crazy times.

We are living in times of crisis. I teach the secret to crisis: is not to give in to crisis: but to make it a time of transformation.

Crisis means breaking: Transformation means changing into something new.

It's a choice we each have. You are helping us make this a time of transformation. Please don't lose sight of that as you work towards making life beautiful.

thanks again

sincerely

Casey

Well it looks they have broken 1400 but will it stay. I hear all kinds of rumors that the market is going down in May-June time frame or September-October time. Gold will start it's next leg up in May and be very strong. Anyone else hear such rumors.

its a best of both worlds scenario the media is creating for the rate announcement tommorow:

1. drop rates 1/4 point, less than expected, with vauge language about less cuts or no cuts in the future.

markets rally on the news that the cut was less than anticipated and less cuts down the road means we are coming out of the crisis.

2. drop rates 1/2 point as expected with vauge languages about less cuts or no cuts in the future.

markets rally on news that the fed cut as expected and less cuts down the road means we are coming out of this crisis.

3. drop rates 1/2, be clear that inflation is a growing problem requiring a halting of future rate cuts yet cite ongoing economic concerns with the crisis which is being monitored closely.

markets rally on the news the fed cut as expected and less cuts down the road means inflation is a problem that the fed is intent on fighting, commodities fall leaving money to find its way into the rest of the market.

4. drop rates 1/4 point, less than expected,
announce a systemic crisis exists and that inflationary pressures will severely limit growth and taht the economy has not just stalled but faces a contraction over the next 3 quarters.

markets will rally as pigs will sprout wings.

Opened a small position in Jul 50 MS puts.

I don't see financials (LEH, MS, MER) making a lot of headway past 50; of course, I've been wrong before...just playing a hunch.

People keep talking about the rate announcement being tomorrow - Isn't it going to be announced on Wednesday, at 2:15, or did I miss an update?

Apr 30 14:15 FOMC Policy Statement

RE: Dr Cosa /FOMC Rate Decision

I can just hear the Fed statement now.....

"the Federal Reserve continues to closely monitor the economy and will balance future policy decisions based upon changing conditions in the real estate and financial sectors while recognizing inflationary pressures which are affecting the economy due to commodity price pressure."

Then... the PPT will attempt to boost the market to reinforce Fed action...and promote the concept that "the worst is over".

GW,

Where'd ya get the KRY story from?

Is anyone else starting to like SKF at this level, about 96 ish?

XLF went from underperforming this morning to outperforming this afternoon, but couldn't take out the March or April highs. I was leaning towards picking up some more before the close, but I might wait to see if we bullishly run up to the 200-day MAs on the indices after Bernanke comes out on Wednesday.

Anyone have a guess as to what V does after the bell?

Shark....this is the complete link courtesy of "InfoJoe" on the Agoracom.com "KRY" board. For those not keeping up with events in the mining sector in Venezuela....specifically the gold miners in the Bolivar State..you may want to reacquaint yourself

http://www.eldiariodeguayana.com.ve/content/view/36151/68/

Morgan Stanley: "Sell the Rally" in Financial Stocks

http://www.cnbc.com/id/24352722

Friends,
Just a little update as to what I am seeing in my access to many families, and my path to economic freedom..........
Walmart sales are way up, we can not keep registers going fast enough to keep up with all the customers this past few weeks. Also, many of my music clients are leaving because of the combination of job problems/loss, and lack of money. So it seems my Walmart job is a great hedge against my music job. Cara Community, You guys are the best!!! C-ya!!!

LOL, one more thing I forgot........all of the Walmart employees I talked to about the rebate are spending the money on electronics at Walmart, they are not going to use the money wisely.

Well if a member of HB&B suggests selling the financials, I guess I'd better get out of SKF soon...

The Denver Gold Group: European Gold Forum 2008 – Zurich, Switzerland

http://tinyurl.com/6b39xj

It's looking like all day was a head fake above resistance if we close weak like it looks now.

Rob.

Out of town, checking in from Michigan today . . . just my 2 cents, but think one important comfort level for the Fed is the 2 yr yielding more than the overnight Fed rate which it is at this time . . . thus more likely a ¼ point rate cut or no cut rather than a 50 basis point cut IMO.

Reference past discussion: CAQ matures today. Parked some money in CAQ on the AMEX, Asian currency play vs. the USD over the last two years, in lieu of money market. Looks like @ 20%.

A philosophical question: If the final rate cut of a cycle signals, as it does, the end of rate cutting, and if, all things being equal, the fed would rather not cut rates than to cut them, then isn't the wisest fed policy to NOT cut rates at the "final cut" (also an excellent Pink Floyd album) but to instead announce that the previous rate cut was the final one? Selling will ensue, but thatwill happen anyway even in the face of a healthy cut, as the end of cuts becomes baked in in either case?

S&P: Risk of US Bank Downgrades Is Rising

http://www.cnbc.com/id/24354435

Visa (V) selling off fast......

Bad news for everyone's favorite rally!!

Visa disappointed!!

Looks like my DIA puts will be kicking butt tomorrow.

Rob.

I doubt the 8:30 AM consumer sentiment will be rosy, last weeks was more pessimistic than expected & the market sold off a bit.

Rob, are you sure Visa disappointed? Numbers look good to me, but then I wasn't following it that closely.

I think Visa was expected @ 0.62/shr, came in at 0.52 after adjustments

May 08 Nymex Natural Gas settled at $11.28 today -A combination of a hotter than normal summer and above average hurricane activity could potentially propel natural gas to all time highs - and take electric bills with them.

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

Separately I was wondering, has anyone seen any instances of any members of Congress urging tax refund recipients to use their tax refunds wisely? Anyone urging their constituents to save b/c gasoline prices might go even higher, real estate prices may go lower, electricity may be expensive, food prices may continue to escalate, anything at all?

Is is considered un-Patriotic to suggest citizens do anything but "stimulate" the economy?

Thanks, FattyArb.

RE: FXP

I just called ProShares and asked them why FXP is down since its creation while FXI is down as well. They said that they re-adjust their exposure daily and so they do not guarantee long-term performance. Moreover, I was told that because of some "compounding effect", FXP will have a long-term downward bias if FXI (which tracks Xinhua China 25 Index almost perfectly, as I saw on the iShares web site) keeps returning to the same level with high volatility. Extending this idea, if FXI does a partial retracement of a big move (as happened yesterday), this would bring FXP down more that 2:1 and then erase previous history and start anew. So we should not expect the current discrepancy between FXI/FXP be corrected. What's done is done, and now we should only look forward.

I didn't ask them about SKF, but I think it should have the same properties.

DavidV

Correction to my previous post: FXI did a large retracement of its downmove over the past month (and not yesterday), which brought FXP down strongly and erased the previous history.

DavidV

Anyone know what happen to UXG today? It fell 0.14 [6.03%]. It's getting close to being a penny stock.

You should all read this:

http://jessescrossroadscafe.blogspot.com/2008/04/what-will-fed-do-on-wednesday-30-april.html

Rather remarkable.

RE: UXG

QT: I just sent an e-mail to Rob McEwen asking him about his strategy: for how long he is planning to explore and what he is planning to do after he runs out of exploration budget. Let's see what he says...

DavidV

writersblock,
I didn't even see their earnings estimates. What I saw was the reaction immediately following the announcement. The "smart money" was clearly disappointed about something.

I would think this will also take some shine off the other credit card companies like COF.

Rob.

FXP

DavidV- thanks for posting the ProShares response to your FXP question...does this mean they plan to change the prospectus to let investors know what they're getting into? i think "compounding effect" can be translated to mean the product designers failed to test the derivatives adequately, and some unforeseen property of the product is causing performance to veer off trajectory...unfortuantely, unlike a car, they can't recall it and "fix" the problem...

they did provide a few useful comments that will probably lead me to minimize trades in FXP...would be nice to have a clear explanation of what to expect from FXP at any given moment based on movement/volatility in FXI, so that we can trade it profitably-> after all, it is a highly volatile product that is perfect for trading, and even in Vegas everyone understands perfectly the odds and conditions for winning and losing...

David- "So we should not expect the current discrepancy between FXI/FXP to be corrected. What's done is done, and now we should only look forward." almost hate to ask, but do you take this to mean that we should mentally reset FXI 157 to equal FXP 65, that if FXI recovers to 210 FXP would drop to 21, and that if FXI makes that retracement within a short period of time, FXP would essentially be in the teens?

jim rogers buying china:

http://tinyurl.com/4j8t2z

excerpts:

"Investor Jim Rogers is buying Chinese shares, among the world's worst performers this year, as the market has bottomed, and he's focusing on agriculture, tourism, airlines and education.

``All my new money goes to commodities and China,'' said Rogers, who co-founded the Quantum fund with George Soros in the 1970s and correctly predicted the start of the commodities boom in 1999. He spoke at a seminar in Beijing yesterday.

``All the panic looks like a bottom,'' he said. ``I have bought in the last four to five weeks. I've been buying shares in China for the first time in a long time.'' "

(above newslink courtesy of Jason [veteranwang]}...

note that Rogers has every reason to talk up his holdings, but i think on top of that, beijing will be rolling out the red carpet for any appearances he wishes to make between now and august...

2nd_ave:

I think ProShares was honest in their description of FXP: "The investment seeks *daily* investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 index." I just did a simple calculation on a spreadsheet, assuming that FXI goes through the sequence of prices 100,90,100,90,100, which gives a sequence of percentage returns -10,11.1,-10,11.1, which implies the sequence of percentage returns 20,-22.2,20,-22.2 for FXP, which makes the absolute FXP values go through the sequence 100,120,93.3,112,87.1. So FXI is back where it was (at 100) after 2 round trips, but FXP started at 100 and went down to 87. After 4 round trips in FXI, FXP would be down to 75.9, and after 8 round trips it would be down to 57. So a risk-free strategy of making money seems to be that of shorting X shares of FXP and 2X shares of FXI. Any comments are welcome on this strategy.

DavidV

RE: FXP

Another simple spreadsheet calculation showed that if FXI goes through the daily sequence 100,98,96,94,92,90, then FXP will go through 100,104,108.2,112.7,117.5,122.7, and if FXI goes through the daily sequence of 100,102,104,106,108,110, then FXP will go through 100,96,92.2,88.7,85.3,82.2. So, if one shorts X shares of FXP and 2X shares of FXI, then one will lose after N days if the FXI price after N days will differ significantly from the starting price and will win whenever FXI returns to the starting price.

Since I believe that the US market is overbought and FXI correlates well with XLF, then I expect to have more down days in FXI than up days in the near future, and hence I should expect FXP to rise more than twice the inverse of FXI during the "next leg down," and so it is more logical for me to keep holing my FXP rather than switching to shorting a double quantity of FXI shares.

I made an FXP purchase last week at 63.6 and I have moved my initial sell limit order from 70 to 68 -- let's see if it gets hit tomorrow...

DavidV

David- LOL-> i'll have to think about that one...if there is a risk-free strategy for making money, then the opposite trade will lose money under any and all circumstances, right? what would happen if FXI were to trend down with no appreciable upside moves, would you still be making money? if there is a "compounding effect" to the swaps, or a volatility component to the swaps, would they work to the advantage of a short FXP strategy every time?

David- if you've stumbled onto the ETF equivalent of counting cards, then i guess we can expect another hollywood movie titled 'FXP' in about two years ;)

2nd_Ave, see my previous post on FXP: the strategy of shorting X shares of FXP and 2X shares of FXI will lose money if the future slope of FXI turns out to be large and will win money if the future slope of FXI turns out to be pretty close to 0. It is possible to use the historic volatility of FXI to actually compute how large the future slope in FXI has to be (positive or negative) for the strategy I mentioned to come out even.

DavidV

David- I like the way you think, though...I would rather be playing with you than against you...

Thanks, 2nd_ave.

On a different note: do you think the FOMC decision/statement can be the catalyst for the market's decline?

DavidV

fwiw, i think we continue to move up skepticism-> when people start buying into the rally story, then we sell off...but i've been wrong many times...

continue to move up ON skepticism...

like vinod, not planning to game wednesday's decision...only positions right now are DXSKX (short 10-yr), CAF (purchased today), AMAT (purchased today), and ESLR (underwater with a 9+ basis)...

make that DSKSX...almost an acronym for dyslexia..

right...DXKSX...

1) is it possible the fed could raise rates with a convincing story that further cuts were not needed as things seemed to be getting better, yada yada? Given all the spin and weirdness could it might be a convincingly spun story? (I'm on the sidelines)

2) All that I read here about FXP/FXI accounting, I've been wondering if it were possible the whole reason for the ultra and complex re-adjustment formula might be so the underwriter can siphon profits either direction it wants and no one can prove it? I've never traded it nor studied it, just starting to wonder if it might be purposely obfuscated.

DavidV

I'll be curious to hear what McEwen says.

UXG & FXP; David you on top of things.

Thanks!

re: China
I wrote late last year about a mainland Chinese manufacturer who was insisting that his American clients begin to pay in Euros. He was dissuaded from doing so at the time. I have been informed that he is now demanding from his American clients they pay in Euros.
This should be interesting. I will post when I get any more info.
Cheers

JR-

1) i would agree with your take on market reaction to no further cuts... fed lowered rates (IMO) the last couple of times only when pressured to do so-> now that there is no pressure, why would they cut?...whereas if they do cut, it would conflict with the "it's all good" scenario bush is trying project about the economy...

2) wouldn't surprise me if the partners stare at the weekly results and then at each other every friday in disbelief at what they've been able to pull off...

DBA seems to have the same pattern of correlation to it's intended benchmark as FXP.

I wonder if part of the correlation problem is premium burn. I'm assuming they're using options to equal the 2X inverse. And if they are, they could easily be losing money in premium if they don't plan time decay and sentiment shifts perfectly. Because plenty of times you'll see the options prices moving ahead of the stock as sentiment changes or news comes out.

This proves that these are short-term trading vehicles only.

Rob.

I'm thinking the FED cannot cut. They've been told by the G-7 to start really supporting the dollar.

And the commodity market is telling the same story.

This kind of price inflation will sink their hopes for a shallow recession so they have to reverse it if they can.

And with all the banks saying they're fine, he can go ahead and start raising.

Maybe that's why so many banks and brokerages went back to the well last week, even at almost 9%. Because they know rates are headed up.

I'm also starting to think that fear of strong inflation causing a deep recession will stop the rally if they raise rates.

Because they won't be raising rates saying the economy is great again, they'll be raising them so Oil doesn't go to $150.

Rob.

Rob- yes, i think you've hit on one reason for the discrepancies ...if they're buying puts during periods of high volatility they're paying top dollar-> if they're forced to do this several times within a short (but highly volatile) period, then FXI could easily end up right where it started, but the underlying options will have been bounced off the walls with money lost on each spike in volatility...

Rob- re your comments on rates-> lower rates (bad news, really) has been good news for so long that we've forgotten that it's bad news...so raising rates may return to the good news it actually is, which is why the market should rally...also think reversion to the mean is on the side of higher rates/higher bond yields/stronger dollar...and of course, lower gold/oil prices...

MSFT puts:
The June 27's are about .50, MSFT closed about 29.

That's either a multi-year low cost basis of 26.50 or .50 for assuming very little risk. I'll take take that. Either one.

The 28s are .75. Is 27.25 not a killer cost basis for MSFT? Will we even see the June 28 strikes go ITM?

I don't think so.

This Yahoo stuff is so overdone. Don't buy the hype.

The failure of the ag markets to reconcile at contract close is extrermely worrisome. I know there have started to be some stories on this. I wish it were getting more play.

This creates the breakdown in the primary and essential hedging and price discovery functions of these markets. It also means long specs aren't facing the hard reality of the cash market arbs.

That, not any margin baloney, is the true and legitimate governor on commodity specs.

2nd,
I could see raising rates being good news eventually but I tend to see the market as a spoiled child recently, who will throw a huge tantrum if they don't get their way.

It also goes with my theory that most of the people buying stocks right now are the banks and brokerages using our money, bidding it as high as possible so it doesn't crash too far when another shoe drops.

They're already getting money at 1.6% and even getting treasuries at par for paper likely worth 20 cents on the dollar but it's not enough so they'll pout and pout hard.

Rob.

I also firmly believe that if he does raise rates it will be perceived as more to slow inflation and appease other countries than it will be to show that our economy is great again.

MikeNYC
It almost seems like you read the same article I did.

http://tinyurl.com/5o8f5n

It's all about how the securitization of commodities contracts and their trading on dark exchanges completely distort the commodities market. They argue that a main problem is the overwhelming amount of long-only speculators using ETF-type instruments to trade commodities.

Rob.

But I can also see the argument that we've been rallying for the past couple of weeks, in the face of dire economic news and poor earnings, because traders expect an end to rate cuts.

Rob.

ALOHA !!

Food is a critical supply line to maintain a civil society. Any break in supply and things get uncivil fast.

I believe this is one of the best alternatives to dependence on imported food and SafeWay. I would urge everyone who does not live on a farm or rural areas to get involved in Community Supported Agriculture(CSA). Don't wait until the last minute to "Be Prepared"! Besides what could be wrong with networking your own food and buying fresh food cheaper?

Here is a link to CSA groups in your area of the USA complete with phone numbers and e-mail addresses.

Link: http://tinyurl.com/6o5jyp

Kaimu,

Thanks for the link to information.

Tables you can use.

http://tiny.cc/a1f0R

Volatility (price expansion) setups abound.

The FOMC meeting will be much more turbulent than we expect. World organizations like the UNESCO have noticed that there is a direct relationship between the FED's reduction in interest rates and the cost of commodities, especially including food and any commodity related to food. Food riots are bad now. Predictions for $200 oil portend wider starvation in the developing nations and much worse riots. The rest of the world may not have a seat at the FOMC meeting but they can certainly be heard. They are telling Bernacke and Co. to reverse the rate cuts.

Social equity is in the eye of the beholder.