IYR SRS
Dec 31 2007 65.70 110.29
April 25 2008 70.98 81.65

why SRS is down % wise more than should be?

Vinod, SRS is tied to the general market, not real estate prices, otherwise it would still be rising as RE prices are falling.

I was in it a bit a month ago and I noticed it simply moved with all the other ultra-shorts and had nothing to do with RE values. So as the indices rise now SRS will fall. When it broke key support I got out for a better entry.

Looks like that might now be near DJIA 14000.

vinod- let's see: FXI has declined 7% over the same time period, and FXP is..down 16%?

FXI FXP
12/31/07 170.45 76.76
04/25/08 158.15 64.67

how many of us really understand the derivatives underlying the ultrashorts?

craig- sounds like you've read the latest from colin twiggs also:

http://tinyurl.com/5kkobx

he's cautious, but also looking for a retest of DJIA 14000 and a test of the upper trend channel in shanghai...

"Gold is Dead. Buy DZZ"
Chartman Gary. B Smith declared today on the Fox News show 'Bull & Bears'.

Anyone here agree(other than shark)?

The indexes sure look poised for more upside next week, important closes this week. Breadth for the market overall last week was about as close to 0% as it gets, very similar to recent weeks ending February 15th and 22nd. This week the broadest based buying (on a percentage basis) was in Retail, Real Estate, Pharmaceutical and Aerospace sectors among others. The broadest based selling was in Utilities and Metals & Mining among others. Our free report will give you all the detail you need.

Cheers,
Ralph
http://successfulonlinetrading.com/blogs

jogyp- didn't bill and maromatics make that call $150 ago? LOL... gold headlines called the ST top a few weeks ago, and when headlines about dollar strength/reversion to the mean causes gold to sell off, will be looking for bill/maro to make the call to buy (actually, they've already made the call for sub-800 gold/XAU 129-158, just waiting for the catalyst(s) to make it happen)..."gold is dead. buy dzz"-> maybe it's an early indicator we're about to see the sell-off before the next spike...

note to skype users- away from home till this afternoon, and unable to add additional users until then...users already added should be able to continue discussions..

will also continue to post relevant material of general interest for the benefit of non-skype users...repeating an earlier post from early this morning:

'"veteranwang" has worked as a hedge fund trader and has traded in the shanghai markets:

[4/25/2008 8:34:58 PM] veteranwang says: a lot of restrictions 1) no day trading, can only sell next day 2) no margin 3) no shorting 4) 10% limit up/down rule, basically the game is stacked against the little guy
[4:33:08 AM] 2nd_ave says: can only imagine what the volatility would be like without the restrictions...
no daytrading? assume this means the average investor in china is not having a good year-> IMO, the odds of further government intervention is high...honestly think the SSEC has to be headed up (from here), at least through the summer...the olympics platform is not going to be mishandled-> beijing will do everything in its power to ensure a smile on the "face of china-" how? let's just say, if i were in charge, my thought would be "nothing quells dissent and unrest faster than prosperity-" i would try to orchestrate a slow drive uphill through july, then hit the accelerator coming out of the last turn into august...'

hard to say where discussions will lead, so would encourage anyone with even a passing interest in china to participate...

"Long only" stock fund managers don't have any incentive to publicly speak about a bear market. There are two sides to every coin, so they pick the bullish scenario to discuss.

I can't help but think about the bar charts I have seen that show prior years GDP compared to GDP without Mortgage Equity Withdrawals (MEW). GDP without MEW has been terrible. Clearly, MEWs are not occuring as they have in past years, that economic stimulus is gone - the housing market is not going to help GDP, it is a drag on the economy. GDP is a component of stock price returns, but so is inflation and any dividends that you may receive.

Also, since 1900, EVERY bull market in stock has started in an environment with HIGH interest rates and HIGH inflation. The last stock bull started with interest rates at just under 20%. As inflation moderates, interest rates fall and stock prices rise off of their bear market bottom. We are currently not in that environment now. Interest rates are low, inflation is rising.

Doesn't take a rocket scientist...

2nd-- craig
I am waiting for market to finish going higher
and than buy right kind of short
was looking at SRS/FXP and any that you think will
benefit us

vinod- would have to consider FXP and apparently, based on your observations, also SRS only as trading vehicles...

if anyone is able to reconcile the 'intent' of either fund [for example, the stated goal for 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 (FXI)]" with actual performance, would appreciate hearing about it...

Real estate - I remember reading about a very well-performing RE mutual fund and the fund manager said that he had bought mines - "well, aren't they real estate?" Good for thought.

I think it's stated in the respective prospectuses (prospectii?) that they may not acheive the intent of the fund. Blah...

LOL..

would love to meet the team that designed the "financial instruments with economic characteristics that should be inverse to those of the index..." maybe they should recruit from higher-tier schools and get those designer derivatives working a little better...

Bill - I always look forward to reading your comments. I remember when your Cara 100 stocks were frequently mentioned in daily discussions, and this morning's comment caught my eye:

" ... The bottom line is this: banks today have lost all credibility. Should they write off the dead assets they have on the books, the losses would be about $2 trillion and many (if not most) banks would be toast. Their demand loans would result in immediate retraction and in margin calls. So, today when I see even the most formerly credible and astute bankers standing on a pulpit telling me I ought to buy, buy, buy… I see them in clown suits with red bulbs for noses flashing. ...."

Will you be eliminating some of the banks that are currently listed in the Cara100?

Thanks.

[Bill Cara note: There are a couple I may eliminate. I have already done that with Citigroup, Lehman, Fifth Third and E*Trade. UBS will likely sell off their problem divisions. Deutche Bank and Goldman Sachs are on my Negative Watch List. If only Goldman wasn't so tied into central banks, world banks, government agencies, brokers like Merrill, and the like, I would have offed them some time ago. Definitely the bloom is off the Goldman rose. But, I figure they own the three remaining Presidential candidates (LOL), so that's worth keeping them in the list for a while.]

JogyP

Gold is dead? Because.....Our economy is in good shape? Our currency (US$) is strong? Gartman said so? Smith...at Fox said so? I don't read Gartman. I don't watch Fox except when I've had a bad day and I need a laugh--I get that watching their "unbiased news" and their "financial entertainment" shows.

Re: Dishoarding

It was reported this week that StreetTRACKS offloaded about 50 tons of gold.

StreetTRACKS Gold losses 50 tonnes in 4 days, iShares Silver zero
By Gene Arensburg
25 Apr 2008 at 11:07 AM

From Monday through Thursday, streetTRACKS Gold Trust [NYSE:GLD] reduced its metal holdings by a little over 50 tonnes from 641.82 to 591.19 tonnes.

That's the largest one-week reduction of metal by the trust since its November, 2004 inception. We are finally seeing significant negative money flow from GLD.

However, as expected, there has been no corresponding reduction of metal holdings by iShares Silver Trust [AMEX:SLV], the U.S. silver ETF. It has not had to reduce the float or sell any silver. None.

More to come in the charts this weekend on RI in our bi-weekly Got Gold Report. Click here to read the last report.

Hang in there and keep your vulture-like eyes on the long-term prize.

http://www.resourceinvestor.com/pebble.asp?relid=42256

Note: Resource Investor's "Got Gold" report is a lengthy article this week.

Wachovia investigated for drug money laundering

http://online.wsj.com/article/SB120917664876446995.html?mod=rss_whats_news_us

Given all the general ineptness, theft and deceit w/ structured derivatives in the general banking community it's refreshing to see a bank trying to earn a buck the old fashioned way...

Jim Sinclair:
Depressed About Gold Shares, Especially Juniors?
Nothing happens by chance but for argument sake lets call it an opportunity to be seized. Many junior gold companies are so depressed that they are worth more dead than alive.

Gold and other metals shares are depressed so that they are selling well below their “Asset Vale.”

Asset Value is something that 3.7 generations have not taken into consideration where price is concerned. You may recall that I suggested to you that one major company would consolidate the industry. Keep that concept in mind. Major gold producers are in need of new production. This is FACT.

The game being played by design or serendipity is to depress the juniors or to take advantage of the decline in the juniors as a result of the poor share price action through starving the junior or explorer of financing.

Depressing the price of the shares of most junior situations results in starving precious metals juniors of financing and their shareholders would be ripe for a bid for the company at a price much lower then their highs when gold was at $600. It may also make the smaller company eager to make deals at less than advantageous conditions for their investors.

http://jsmineset.com/

Throwing this out to the minion:

With the recent uproar over plastic, specifically plastic baby bottles-I believe Canada has banned them, so likely the US is on the same road, or the fervor will become so great that there will be a switch over too....glass? What company or companies would benefit.

Even with the coming debacle, people will have babies.

Throwing this out to the minion:

With the recent uproar over plastic, specifically plastic baby bottles-I believe Canada has banned them, so likely the US is on the same road, or the fervor will become so great that there will be a switch over to....glass? What company or companies would benefit.

Even with the coming debacle, people will have babies.

Re: Plastic Bottles Ban

I think people will be switching from plastic bottles to breasts, so I would by Wonderbra.

:0

Wish I'd thought of that...

Greetings to you all this saturday evening!

About junior miners, Kaimu mentioned CNU at 0,14 some days back. He said only idiots would sell at these levels. The share is at 0,10 now. Any thoughts on buying this one? I'm a busy student and haven't done my dd.

Also, about Bill's trading strategy, using RSI and MACD. Has anyone done any research on the performance of such a strategy over time? Say, switching in and out of a portfolio consisting of 10-12 shares, for instance.
How would the risk-adjusted return compare to an international Markowitz portfolio? Could be an interesting research topic...

QID looks tempting. The daily charts look good but the weekly isn't ready yet, specifically the stoch.

If i miss the move i miss it. i am sure there will be a buying opp of a lifetime in the next 12-18 months in gold then equities.

Saving hard sure is boring, but yet satisfying. My friends think i have become frugal and cheap. i'll take that as a compliment on my long road to becoming wealthy.

Big picture i was thinking of building position in QID and DZZ, then rotating into junior gold when the time is right, then into equities after the market goes through the correction process.

But i want to stay away from short or long positions in financials, since i see that trade/industry as being heavily manipulated.

Just thinking out loud. hope everyone enjoys the weekend.

ALOHA !!

More minion stuff ...

I was just at my local market and I noticed 25lb bags of HINODE CALROSE California Rice on sale at $8.59 per bag, discounted from $13.25 per bag! They had what looked like 100 bags or so stacked up. So why is COSTCO in California limiting rice purchases when California grown rice is in abundance here in Hawaii? Does Hawaii have a quota contract with HINODE? Why are rice prices here in Hawaii dropping 35% yet the rest of the World including California rice prices are rising?

Bill,

Today you wrote "There is a growing disconnect between worsening macro-economic picture, with no reversal in sight, and general bullishness on Wall Street."
What does it mean? While it is true in my estimation that residential housing is probably entering into a long term decline based on credit availability, affordability and a decided imbalance between retiring rich baby boomers on the one hand (who paid in some cases too much) and the new generation of wage-slave, subjected as we they the vagueries and indignities of the global marketplace for labor (they can't afford to cover the retiring boomers' housing nut). So like you, I am skeptical of anything mortage related, hence the financials are dogs with fleas. But the rest of the stock market? Here's where I disagree a bit with your blanket assertion that the market disregards economic reality at its peril. We have had quite a correction already, from which, according to the charts it APPEARS may be working it's way toward being over and done with, on average. While upon first glance it seems that the American consumer has been taken out, game over, I think this conclusion is shortsided. While I agree that houses, house paper etc is dead money, why shouldn't there be, adjusted for inflation, a healthy respect for those corporations that do lead the world making in-demand products? Joe and Sally homeowner will continue to spend as they are able, though perhaps in an attenuated fashion. Kids will spend, and Fed and company will work to ensure that, whatever it's much compromised value, there will be money to borrow and spend. In the long term, the Fed has to win. Even if we lose.

[Bill Cara note: "What does it mean?" Sharkie, it simply means that, at times, Life in Not Beautiful. The economic and market cycles expand and they contract. Presently they are in a contraction phase and those who stand to benefit the most, ie, the bankers, are liars in telling people who are hurting most that all is fine. If you want to tell me that some kids will spend, and that there will always be money to borrow and spend for some people, that's rather obvious. Meanwhile the macro-economic picture is worsening, and people who who have never met a Goldman Sachs or JP Morgan banker because they do not travel in those circles are wondering if they have been abandoned, without the most basic food and energy necessities to continue living, and they are mad.

I started this blog four years ago this month, calling it Capital Markets and Social Equity because I saw this cycle about to happen. Now that you all see it, I'm getting ready to move on with my life.]

ALOHA !!

Hallvardo ... Within the past month I have bought CNU at $0.10 and I bought at $0.14! I spoke with management and their strategy is still ON!

SAN JOSE JV
CNU has many more properties than just San Jose. I believe just their JV(25%)with Fortuna is worth more than the current $0.10 asking price alone! At San Jose they have a mill set up to produce 360tpd(value in 2007 was $2.5milUSD)along with total resource of near 66milAg Eq ounces(43-101 Indicated & Inferred). At $0.10 their total market cap is $11milCDN(109mil shares). Do the math!

Total current market cap = $11mil

Plant value = $625,000(CNU 25% of mill)

Property value = $2.25mil(CNU 25% of San Jose cash only cost of $9mil)

Resource value = 25% of 66mil AgEq ozs or approx 16mil AgEq ozs

16mil AgEq ounces x $7USDoz(diluted 60%)=$112mil

Add it all up and over $112mil worth of PPR (property/plant/resources) at a current cost of $11mil. Around 10:1 leverage, but with "risk". CNU is playing catch-up due to their loss of their Natividad property as well as the timing of the downward spiral of all junior explorers. I believe their share price is oversold(5 yr low)which is why I have been buying. I believe short term the price will rise but don't buy unless you can afford to hold on a long term basis. Management defines that as six months!

As I said above the San Jose JV is just one of their properties. Based on the above all the other CNU properties are free! Given that I believe CNU is worth a "gamble" here!

kaimu
from 66milAg Eq ounces(43-101 Indicated & Inferred)
CNU has 75% Inferred.
7USDoz - too much for Inf. But market cost for
just Indicated is 1.8USD - good Value

Shark,
One major issue that has not been addressed is the fact that currently the home buyer and the home refinancier is unable to get the type of loans that were common in the past. Many did not qualify for the loans that they took due to the fact that so many individuals do not declare their "real" incomes. They hide income so that they do not have to pay their fair share of taxes. The downside of that common form of accounting is that when the mortgage lenders no longer accept stated income financing, these tax outlaws find themselves having to accept the rollover of their ARM to a much higher interest rate. Added to the fact that they are stressed by the current overall economic conditions, that new group of homeowners now might face foreclosure. They cannot sell their home and they cannot afford the rollover ARM to the new one year adjustable rates rolling forward. When we add that dynamic to the picture that is going to affect the future of these other companies that you have discussed that are in the green. The future is scary to say the least. Although I can tell you that my jumbo Wells Fargo 5 yr fixed @ 4 5/8% that is going to rollover in August of 2009 is tied to the one year treasury plus 2.75%. That would place my loan rate at 4.42%. Better than the 5yr fixed I have now, but that is not the norm. Many have rollovers that will be much higher. Also many homeowners took out the interest only loans. Those are gone as well as the stated income loans. Higher rates plus principal following the rollover.

To add insult to injury, my Wells Fargo lending agent states that all mortgage loans now have points added to the financing even in the ARM loans.

It looks like it is not only Wall Street on the ropes...

"U.S. states expect to have at least $26 billion less than they need to pay their bills during the next budget year as a slumping economy erodes tax receipts, according to a national survey.

The study by the National Conference of State Legislatures shows that pressure is mounting in almost half of the states. Payrolls declined in March by the most five years, crude oil prices are 79 percent higher in the last year and consumer confidence reached a 26-year low in April. States rely on income and sales taxes to pay for schools, health care and criminal justice."

http://tinyurl.com/4y86l8

Unlike Saudi Arabia, Japan and the EU I regard China as more of a military threat to the US than an economic partner.

Many think of China as having only economic motives for buying our treasuries so that our government can enjoy wasting trillions on a war that the US taxpayer would end in a heart beat if it had to be financed with tax money. I think 10 - 15 years ago that might have been true, but not today. Today China has emerged as our military superpower antagonist just as we were to the USSR. In the cold war we bankrupted the USSR by forcing them to waste too much of their GDP on arms. Today, China is just letting us do it to it to ourselves. Whenever China decides the time is right to squeeze us economically, they will stop supplying credit in the hope that superpower USA will collapse the way superpower USSR did. The time to do this is not when our economy was robust and could have withstood such a shock, but now when we are sufficiently weakened that we may not.

[Bill Cara note: The biggest threat to the US are the bankers who control it, and who have bought and paid for its politicians and media.]

global banks have $2 trillion in dead assets? what if they were to divvy up the losses and write them off...would that sink too many of them, or would it allow them to suffer an acceptable number of casualties in the interest of putting the SIV/CDO mistakes behind them...

My view aout FXP

1. PetroChina is expected to report record profit on Monday
2. (taking into account govt subsidy). China Airline is expected to issue strong next quarter forecast
3. Chineese gov't expected to allow margin trading ONLY to buy stocks.
4. Chineese gov't will move to restrict short sales on Shanghai & many of its stock trading on the HK exchange
5. It's a bet againnst the tide.

vinod- i see three out of 4 of your reasons not to bet against the tide boil down to "don't fight beijing-" any forays into FXP will be temporary...

COSTCO: California Calrose Brown Rice

I buy a 25 lb. bag of brown rice about once a year here in the Honolulu Costco. My last bag this week cost $9.39. About nine months ago for the same product it cost $5.25. This represents a 78.85% price increase.

Based on this I think the local market in Hilo (Kaimu’s neighborhood) is just selling rice as a lost leader to draw customer traffic to their store.

As an aside in both 2006 and 2007 our yearly budget has increased 10% per year. Clearly inflation in Hawaii is running at least 10% per year regardless of the government’s CPI statistics. Another stunning fact is that in the last five years our budget has doubled yet our consumption patterns have remained essentially unchanged. Scary!

http://tinyurl.com/6lt8fy

Some other views at selected Cara100 stocks, and
some of Monday's volatility bands.

Re: Hedge Funds

Greg Coffey, wizard of Oz

Greg Coffey is the star trader at the GLG hedge fund group. Last week he walked away from $250m in shares to set up his own operation

Times Online

http://tinyurl.com/3zronh

Bill,

Thanks for your response. My only question is, is this part of the normal business cycle, or is it "game-over" for the American system of predatory capitalism? I recall something very similar to this during the late 80's-early 90's.
Houses were being lost along with a ton of jobs. we snapped back. Will we snap back this time or is the system entirely broken?

[Bill Cara note: The American system of govt and business is not broken, and will never be, in my opinion. But this commodity boom cycle will force all taxpayers to question the role of bankers. Changes in that area is where the hope lies. Americans don't need more more regulation; they need less. They also need less government; and govt that spends more of the taxpayer's money at home. What is broken and what American's don't need, except to replace, is the present stranglehold of the financial services system over what needs to be a free and independent capital market.]

Amazon looks unhealthy and about to tip over.
http://tinyurl.com/6nnvaj

Business Investment as percentage of Durable Goods, keeps climbing.
This favors the QQQQ vs Consumer related sectors.
See
http://wrahal.blogspot.com/2008/04/business-loans-less-bang-for-buck.html

shark -

I do not believe it is "game-over" as you say but a good cleansing cycle is long past due. The longer we delay it the worse the hit will be. (In this particular aspect I am a strong anti-Keynesian.) Once we clean the excesses of extreme bubble economics and return to historical norms (in both economy and ethic metrics) there will be a lot of opportunities for US in global economy, after all we still have the best infrastructure for value creating business.

However at this point of time I see two strong countertrends - a desperate attempt by those in power to postpone the cleansing cycle literally at all costs and the other trend defined by fast deterioration of consumer means driven by MEW/HELOC shutdown and zero evidence of propagation of inflation into middle class compensation.

According to tov. Lenin the definition of revolutionary situation is when the ruling class is no longer able to maintain status quo and the masses are no longer willing to accept it ;-)

IMHO I have not seen a market recognition of the situation yet and do not buy bull case regardless of what I.T. trends may indicate.

kaimu -
I assume you still holding CNU. Do you have a mental stop price or plan to hold for some time regardless of the price ? I hold a small position (underwater).

Kaimu,

thanks for the update on CNU!

"There is a growing disconnect between worsening macro-economic picture, with no reversal in sight, and general bullishness on Wall Street."

Tbere is a new newsletter out by Jeremy Grantham that says that this may be due to the Presidential year......very good reading....

Grantham is NOT bullsh:

(This is .pdf) -

https://www.gmo.com/websitecontent/JGLetter_ALL_1Q08.pdf

New battle cry of U.S. consumers: 'Get the cheap stuff!'

Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.

http://www.iht.com/articles/2008/04/27/business/27spend.php?page=2

------------------------------------------
New York Times
April 25, 2008

After struggling with soaring heating costs through the winter, millions of Americans are behind on electric and gas bills, and a record number of families could face energy shut-offs over the next two months, according to state energy officials and utilities around the country.

http://tinyurl.com/6xfr7p

some updated TA on the Canadian gold miners (XGD)

http://jglobal.blogspot.com/

im wondering where Jim Sinclair is getting the info that says gold will resolve its plunge by early may. i wouldnt want to bet against him.

re gold correction -
Question to those old enough to witness 70s - what happened to the gold price on the very first drop of the bond market ?

Some questions that needs to be asked to the Senate Banking Committee and to the Treasury and maybe even to the FED are:

Why did you let the banking system become so interdependent that a failure of one would bring down them all? And what are you planning to do to address this glaring problem?

Or do you just plan to let our banking system remain in it's current fragile state with the inevitable failure of any major bank or brokerage bringing down the whole system?

And who do you plan to hold accountable for compromising our previously strong and sound banking system?

Rob.

China Life first-quarter profit falls 61 percent

http://www.reuters.com/article/companyNews/idUSHKG33434320080427

Sinopec Q1 net down 69 percent

http://www.reuters.com/article/companyNews/idUSSP33054920080427

from Skype Cara China:

[9:54:58 AM] Bob James says:

"I have just started getting interested in Chinese stocks so if I see a company written up by one or more writers, I take a closer look. I realize I am taking advice from people/groups that are probably "talking their book", but up until now, that is the only insight I had into China. The problem may be that I only see about 100 ADR's in the U.S (http://www.diggsamachar.com/chineseadrs). There are obviously more stocks as Zonghen Pem is listed on TSX Venture. Through Interactive Brokers it appears there are 1300 different stocks available on Hong Kong.

Home Inns (HMIN.nas) I purchased as it is a hotel chain that appears to target the value-conscious traveller. Tony Sagami writes for Moneyandmarkets.com and has been pushing investing in China. (They have free emails but I haven't signed up for any paid subscriptions. I think the free ones are certainly worth it. You just have to realize they are pushing the paid subs.) He highlighted it and then Quint Tatro who writes on minyanville.com also talked about it.

Zongshen Pem (ZPP.v) produces electric bikes and motorcycles. They are fairly new to the market whereas Zongshen Industrial Group, the major shareholder, is not new to the motorcycle manufacturing business and is 3rd largest gas motorcyle company in China. ZPP is targeting sales of 260,000 units in 2008 and have orders end of March for 152,000 e-bikes. From a Friday press release they announced construction of a production facility in Chongqing, China with an initial capacity of 600,000 bikes/yr to be turning out bikes in March 2009. ZPP "has sufficient cash on hand to complete the construction of the plant and to expand it to 1.2 million units". They will be using the existing Zongshen dealer network of 5000 dealers in China. (From ZPP website .pdf) ZPP estimates total e-bike sales in 2007 of >21 million units in China. Up to 170 cities have banned the use of gas run motorcycles and bikes. E-bikes are not considered motor vehicles eliminating the costs associated with license plates, drivers licenses and regulated maintenance.

There are others I'm watching, but the RSI's are all over 70 and not in a great "technical" buying position. Fortunately I purchased ZPP early in the week as it took quite a run end of week and is now looking more like a sell than buy. Maybe that is just my view of the chart as I never buy enough of the stocks that go up and am hoping it drops back some! HMIN is really in technical "no-man's land" but I bought anyway.

Looking forward to all posts."

Bill- sounds like burn-out:

http://tinyurl.com/3gxlfp

delegating is a good solution...

[Bill Cara note: "burn-out" is a good term. I accept that. April has been a tough month, but this started probably 10 months ago when I realized certain business relationships were not what they were cracked up to be, and I stayed in denial. Then things started to hit home when the book, which I finished last September, wasn't ready for PDAC in March and nobody but me cared. And then I saw things at PDAC I didn't like. This month, it all hit home and I realized I had to step back and re-order my life regardless of the consequences. I put Geoff Goetz in charge of Cara Trading Advisors, and Jim Watt in charge of Trader Wizard. I haven't yet found a solution to the Bill Cara blog except I took some wise advice and repositioned the blog as the Cara Community and that was just one step in what will be a few that leads to some other organization being responsible for maintaining it.

Do you you know the one good thing that came out of this? Nobody did this to me but me. I looked in the mirror and said that I have nothing but support from almost everybody around me, and now that I recognize that it was me who made some stupid decisions -- mostly being the nice guy instead of the person I used to be -- I can take steps to quickly bring things around. It's really not that complicated.

I'll be ok.]

Bill,

A little clarification for me and perhaps some of the other little guys out there.

If I understood correctly, you stated that we can register with Interactive Brokers and then sign an agreement to use your firms services. Is this correct? I have never used this firm. Also, you said that you are working on changes to be made to allow the little guy who is not an accredited investor to eventually use your firms services. Do you have a estimated timeline? Also, how would this differ from what is available with Interactive brokers. Finally, will we Canadians be able to use your firms services as regards our existing RRSP accounts.

Thank you for your time and support.

[Bill Cara note: I have an agreement ready to go with Interactive Brokers. They are registered to trade with clients in many countries. CMC Markets is another. I could do one with my old firm Qtrade Investor in Canada. There will be others. These matters would have been completed in early March, but bureaucrats got in the middle, and I'm still waiting for a resolution. I hope to hear positive news in the next week. Geoff Goetz and my international team of traders is ready to offer advisory services under a relationship between a client, their broker and Cara Trading Advisors. My firm will not be a broker-dealer, which means that we will not be the recipient of client cash. We are interested only in advising on capital markets. That plan would have included forex except that my associate Bob Coffey, who is my chief financial officer, managed to secure a five-year contract on a world-class forex trader, and my team decided it would be best if we supported him and provided services to our clients only by watching over that trading, and by writing monthly reports on it. We intend to use the same structure in managing futures trading accounts for Qualified Eligible Participants who are interested in the Cara 100 and in the Metals and Metals related stocks (only Geoff's team and me will be doing the trading). We could offer most of that right now, but, the service aspect that appeals to me most is the one that I soon hope to provide in conjunction with Interactive Brokers (for any account, regardless of size). IB has the securities registration, the capital strength and the technology we need to do the job we want to do. They are ready to go, but reality is such that, for reasons I have no control over, having chosen Bahamas, I am not. I am doing all in my power to resolve this issue quickly.]

craig stephens: "Impact of Beijing policy tools should not be underestimated"

http://tinyurl.com/6dccqb

excerpts:

"It has been a widely held belief among mainland Chinese retail investors the government would direct its policy tools to resuscitate the ailing stock markets in time for the Beijing Olympics. As it's already promised cloudless skies and a bumper hoist of gold medals, it would surely not let proceedings be spoiled by toxic equity markets that recently flirted with levels 50% down from last year's highs.
The logic may seem straightforward, but can this really be an equity strategy for serious investors?
It appears some investment banks seem to think so.
HSBC Securities said in a new research note that last week's cut in stamp duty from 0.3% to 0.1% on A-shares is not a market bailout. Rather, it puts in place a stronger foundation for equities to move higher -- that is, along with measures to keep non-tradable shares off the market and new plans to introduce margin lending.

"..overall, there appears to be a belief in investment circles that the change in government policy could indeed herald an inflexion point in the market. Investing on such a premise might seem to be asking for trouble, but remember these are immature mainland Chinese equity markets, where for now at least, sentiment and momentum trading will likely trump fundamentals every time."

Bill:

Sorry to hear you are not having fun. I only discovered your blog last summer when I stopped building houses long enough to take a temperature of the market, and I am glad I found this place. Ironically the more I learn about the state of things the sadder I get as well. Reality is not all that it is cracked up to be I guess.

Perhaps a light story to offset reality is called for:

Bush Says Iran Responsible For Wall St Mess --
http://www.wakeupfromyourslumber.com/node/6340

[Bill Cara note: now that is funny. It's not too far a stretch from when Bush Sr. organized the storyline, presented to Congress, by the daughter of the Kuwaiti ambassador, that the Iranian military in the early 1990s had stormed the hospitals in Kuwait and stolen the incubators of the babies they tossed aside. That's the problem these days. Should we really be watching Jon Stewart's Daily Show or Jay Leno to get the truth? You know, people I feel sorry for are the brilliant and hard-working staff of the Citigroups and Goldman Sachs who have to suffer the slings and arrows (of outrageous fortune) of their greedy controllers. Just think what could be done if the capital market vs financial system was structured properly.]

Bill, thanks very much for all you've done & will be doing. Go enjoy your tropical paradise a little more...

N225 about to test 14000 for the first time since 2/27...

Bill,

Even in the few select words and tones, you have written volumes in this week's WIR.

Thank you

Shares of Evergreen Solar Inc. plunged Friday after a number of investment firms said the company would need to raise capital quickly in order to fund the second phase of its Devens production facility.

Work on the second phase has begun six months ahead of schedule. The first phase is still being constructed. Evergreen expects the fist phase of the facility to produce panels by July and the second phase of the site to become operational by early 2009.

ThinkPanmure said it saw the move as "a sign of strong confidence in the Quad Ribbon technology," but added that the need for additional capital "increases anxiety under current market conditions, not to mention the risk of dilution."

Shares of Evergreen fell 11% to exchange hands at $9.60 Friday. The stock is down about 38% over the past 52 weeks.

ThinkPanmure estimated that the company would need to raise an additional $200 million to $250 million in capital, in addition to $50 million for prepayments. "While the company appeared biased toward debt financing, it may prove difficult in the current capital market environment, it said.

Merrill Lynch agreed, saying that the "aggressive" expansion would keep the company in the red for the rest of 2008, in addition to requiring multiple returns to the capital market over the next two years.

"Though we see positive catalysts on the horizon for Evergreen, we see limited upside to the stock until the company gets closer to sustained profitability and Evergreen's balance sheet is better able to support its aggressive expansion plans," it said.

RBC Capital Markets, which called the company "a potential black hole" in the solar sector, questioned the idea of building a plant at all.

"In our view, building manufacturing plants in the U.S. may be a disadvantage long-term versus lower fixed and variable cost Asian competitors. We believe the technology's inherent lower efficient product versus industry might always require a price discount."

RBC maintained a sell rating on the company, while Merrill continues to rate the company neutral and ThinkPanmure kept its buy rating intact.

ThinkPanmure said the early work on the second phase of the project was "a very positive move that should help the company achieve, or even exceed, its production target of 125 megawatts in 2009.

"Time-to-market is a critical factor in this increasingly competitive landscape and 'front loading' growth should position Evergreen to capture more market share while module selling prices are still very strong, generating higher profits and maximizing value," it added.

The firm lowered its price target to $25 from $30, on the expectation that higher production start-up costs and dilution would pressure earnings. ThinkPanmure now sees a loss of 18 cents a share in 2008 with earnings of 65 cents a share estimated for 2009. It previously forecast a loss of 13 cents a share in 2008 and earnings of 70 cents a share in 2009.

The mean estimate of analysts polled by Thomson Financial is for a loss of 24 cents a share in 2008 with earnings of 46 cents a share forecast for 2009.

Evergreen discussed the second phase of the project in its first-quarter report, where it posted breakeven results on a per-share basis and a revenue increase of 63% to $22.9 million. Wall Street had been looking for a loss of 7 cents a share and revenue of $21.8 million.

The company forecast second-quarter revenue of $21.5 million to $22.5 million, compared with the analyst consensus of $21.8 million. Ryan Vlastelica rv/vj

Swiss Banks' Pay Is Faulted
April 26, 2008; Page B3

BERN, Switzerland -- The head of Switzerland's central bank said the financial industry should stop paying employees bonuses that put short-term results ahead of long-term performance.

The chairman of the Swiss National Bank's governing board, reported Associated Press, said the industry should correct "excesses" in its pay. SNB boss Jean-Pierre Roth said in a speech that financial institutions must improve oversight to avoid the costly mistakes that have hit the country's banks. Switzerland's two largest banks -- UBS AG and Credit Suisse Group -- have both reported massive losses.

http://tinyurl.com/6cfuyg

USB - rumor going round ugly stuff, been following heavily due to counterpary issues on profunds. Be safe... in this case think UBS is in serious trouble over and above the most recent 37 billion that was torched. Also oil will be over 120 going to 125 and while I like collin twiggs I just cannot see how we can dial in a retest on 14000. Things are getting worse not better especially with the consumer. In addition mutual funds are reporting reduced inflows.

Investors pull out of mutual funds
By Deborah Brewster in New York

Published: April 27 2008 22:26 | Last updated: April 27 2008 22:26

All but one of the 25 largest US mutual fund managers saw their long-term assets fall in the first quarter, as returns dived and investors pulled out of funds.

In the worst start to a year for more than a decade, most money managers had retail outflows, and even stalwarts such as American Funds and Vanguard suffered a drop in assets, of 6.6 per cent and 4.3 per cent respectively.

Pimco, the bond manager, was the only one to show a rise in retail assets, according to Financial Research Corporation and industry estimates. Pimco’s Total Return fund had an inflow of $9bn in the three months to March.

The trend is likely to worry economists, because it suggests the credit turmoil is hurting the confidence of mainstream investors. That, in turn, could dampen activity among consumers in the months ahead, since falling investment sentiment is often associated with muted household spending levels.

However, the fall also marks a fresh blow for the financial industry, because mutual fund managers typically make money by charging a percentage of assets – meaning that profits in the industry fall when assets decline.

Last week, a group of publicly traded asset managers announced bleak quarterly results. Affiliated Managers Group, which holds stakes in 26 mutual and hedge fund companies, reported a quarterly profit fall for the first time in five years, with outflows of $8.4bn in the quarter.

Big institutional fund groups – such as AllianceBernstein, a unit of French insurance group Axa – likewise showed asset falls.

One senior industry executive said: “This is the worst I have seen for a long time, the industry-wide outflows, and unfortunately I don’t think it is a short-term situation. The days of domestic [US] equity funds driving profits for us, that could be gone.”

Retail and institutional investors pulled $100bn from US, European and Japanese equity funds during the quarter, according to Strategic Insight.

The trend is accelerating a shift in the money management industry, as investors move away from equity funds, which have been the industry’s profit mainstay, towards either low-margin options such as short-term cash and indexed funds, or high- margin alternative investments such as hedge funds, private equity and hard assets.

Long-term assets do not include money market funds, which have seen big inflows. Several money managers, such as Fidelity, have large money market funds which are offsetting their outflows, although money market funds are low-margin products and do not provide long-term investor loyalty. Fidelity had a drop of long-term assets of close to 10 per cent for the quarter, as investors continued to pull funds from the former market leader despite a lift in performance in its funds.

MEANT UBS ABOVE -

Moon,

Robert Holderith who is at Proshares now was from UBS. But i think the counterparty risk is not so bad when the swiss bank would have to bail out ubs in case they are the only party at risk.

Its no different if i buy put options on amazon and it goes to $1 in 6 months. Wouldnt there also be counter party risk for the person who wrote the option? Correct me if i am wrong, but it seems every trade has counter party risk, even those who bought Bears Stern right after the ceo said liquidity wasnt an issue, and before the $2 offer on a sunday.

vinod- looking into TAN (solar ETF) as an alternative to ESLR...

I have made reference to The Matrix movie here several times and how finding Billcara.com, reading the Economic Hitman, etc have made me feel like I too am part of some computer generated slavery where we all work to make the rich richer and to go deeper into debt slavery.

And even more recently i have begun to think this system is unstoppable. At first i thought the only way to bring it to the right is nothing short of an economic cival war by middle class America against the few privileged and protected, by boycotting the system until change. But even then i am sure the dependence of a certain lifestyle and threat of being unemployed will prevent such a wide spread act of courage. I can only assume the current system will just re-invent itself into another version.

But there is the classic scene in the movie that is so ingrained in my mind as the analogy of adult life in America that begins with parents telling you to go to school to get a good job, and through out life as you build debt, then marriage, then kids = Full assimilation into the system with no way out. just hoping for a better life for your kids after you pass. then your own kids go thru the same cycle like an endless battery for the system.

http://tinyurl.com/5mhdpu

If you have never watched the movie i highly recommend. I am slowly starting to picture Bill Cara as the character "Morpheus" kicking Agent Smith's ass (HB&B).

Well, I hope this blog continues with Bill involved. It's always interesting & enlightening! Life ebbs and flows, doesn't it...

Bill,
Thank you for your mentorship and guidance through this blog and your book, and the connections among traders you've facilitated through such forums like Skype.

Community,
There's a treasure trove of knowledge in the blog archives. Bill has put tons of material out there over the years. We have to do our part to review, learn, and analyze, instead of only sitting back and following hot stories. Price data tell us the most important story. The bottom line is if you want to trade, you need to build your skills to the point where you don't depend on anyone for trading but yourself. Otherwise, let people like Bill manage your wealth.
Speaking of hot stories of (supposed?) rice shortages, I spoke with a corporate manager I know with California's 99 Ranch Market. Think of your neighborhood giant grocery chain like Ralph's/Kroger's/Safeway, and 99 Ranch is the giant Chinese equivalent in California. The corporate manager told me there's no shortage of rice for them, no limits on how many bags you can buy, and no price increases. Friends who shop there confirm this. A lot of rice is grown in California itself and exported. Also, if you have thoughts of stockpiling rice in response to the hot stories, people have been explaining to me how rice will go bad just laying around, so think twice about stockpiling 20 pound bags for your basement.

SteveC- not sure what time frame the ranch99 manager had in mind when he said no price increases, but the last we stopped in for a 50lb bag was about 2 weeks ago, and the price was almost twice what we paid for one a few months ago...

Gold is not dead and our economy is in the gutter

ALOHA !!

viso ... Yes for silver it is closer to $2 or 10% of spot.

occam razor ... I plan to give management six months then if nothing happens with the Fortuna JV at San Jose I will move on, but it does not look as if nothing is happening at San Jose. Seems Fortuna plans to go to pre-feasability later this year. Plus we will see what shows up on the drill assays in May.

Here is the latest from Fortuna Silver(FVI) financials dated April 17, 2008 ...

San Jose Project

The engineering phase started at San Jose project in late 2007. The Company expects to conclude its permitting process and a pre-feasibility study in 2008. Based on existing information, management plans to go directly into detailed engineering and construction upon conclusion of the pre-feasibility. The excavation of an underground ramp commenced at the end of the second quarter of 2007 and 284 meters of decline had been completed by mid March 2008.

During 2007, the Company executed a 26,605 meter drilling campaign: 17,694 meters were drilled in the San Jose area and 8,910 meters were drilled on San Ignacio, the southern extension of the mineralized structure. Based on this work a new resource estimate is expected to be produced in the second quarter of 2008.

On the greater 40,000 hectare land package a generative exploration program is being conducted. Already over 17,000 geochemical soil and stream sediment samples have been collected. To date this exploration work has delineated 4 areas of interest that are receiving detailed follow up exploration. END