Europeans switching back to coal

Driven by rising demand, record high oil and natural gas prices, concerns over energy security and an aversion to nuclear energy, European countries are slated to build about 50 coal-fired plants over the next five years, plants that will be in use for the next five decades.

http://tinyurl.com/5njqbs

SteveC- reference your 1am post: I was looking to buy the Shanghai index about two weeks ago and like you, was unable to find anything that tracked the SSEC…settled for Fidelity’s FHKCX (along with some FXI)-> bought into the fund 4/14, and immediately noticed it’s not much of a proxy for Shanghai except over long periods of time…

Is it time to buy China-> may well correct further, but I’m comfortable buying here…I have a brother in HK (partner in a US firm) who advises on mergers and acquisitions-> based on his travels, would guess that China has been/still is buying into companies on all continents…no slow down there…

If Cara Trading Advisors would ever to start a working group on China (similar to the one on junior miners), would be honored to volunteer my time->working with Caraistas based in Asia would be ideal-> I speak enough Mandarin to carry on an everyday conversation, but would obviously need people who are fluent/bilingual for research…

investment in the SSEC with a 15-20 year time horizon would IMO compare favorably to/outdo the 1982-2000 bull run in the Nasdaq…

2nd
FXP is at 69 pre market

FXI breaks out at 155. Be careful Vinod, it's approaching a key point here.....

vinod- i thought about it, but since i'm holding FXI, i would just be hedging...i'm targeting FXI 158 to 161 as an exit point for FXI/entry point for FXP...

hoping the airlines have been beaten up enough...nice move on UAUA...NWA announces today...BA up on earnings...

still like ongoing trades in USD (2x semi)/ROM (2x tech), UYG, DUG/SMN (closed out SMN yesterday, but looking to re-enter)...

vinod-> maybe you should look into starting a working group on India ;)

2nd

first time in 15 year I visited India in 2004

and most of my family are here
will await to enter FXP/SMN/and more DUG
and hold SMN/DUG for few month

TER up in premarket on Q 1 profit, 2 Q guidance.

(Disclosure: No present postion)

Re: POO

In reflecting on the price of oil via the monthly vs. the weekly chart, I believe an upside target of ~$123.- is in the cards for the end of April. But the generated target for $WTIC on the weekly chart is well beyond this, ~$131.- is not attainable, so a correction in oil prices will probably occur in the week of April 28, at the latest.

What this might mean for gold prices is that the notional value will be boosted in the +$900.- trading range compared to oil. Also, we are hearing that a Swiss bank is selling its gold through Kitco. The psychology in the gold market is that we have seen the heights, but are now going to see an immediate crash in prices. Its not a given that oil and gold are causally tied to forex. Gold is more likely to be tied to foreign exchange, thus if the ¥/$ trade continues after next week, this will aid bullion prices.

The $US is not a good bet for a rise, because if any ETF tied to the oil price 2X, then a one day decline of 7.5% would be equivalent to a 15% decline, enough to cause serious liquidity problems through net redemptions.

gold getting cracked this morning hard. USD index not even above 72.

lets just get this over with!

Re: POG

Considering gold as well, we may see return to prior retracements carved out by fibonnaci numbers.

Colin Twiggs on Gold:

Spot gold twice respected support at $900. Recovery above recent highs at $950 would complete an inverted head and shoulders pattern with a target of $1000. Reversal below $870 is less likely — and would signal a test of primary support at $800/$775.

Re: Gold Basis

Gold basis is in the negative, meaning we have popped into backwardation. The spot price is $8 over the futures price. Demand is still very firm.

If asian investors require that spot prices of gold remain in backwardation in order that it becomes interesting to buy gold as a commodity, then likely they will jump on the opportunity.

Nobody has explained to them theoretical limit of money where if gold is in chronic backwardation, then money loses its value.

ESLR- vinod, now holding a core position with a basis in the mid-9 range...planning to trade around it also-> keep us posted on local news...

Astute comments this morning Bill.

I've added the short GBP/long yen to my basket of currency trades. Still short the euro and watching the 1.58/1.60 area closely. Long gold, and short the TLT, but covered 1/3 at the lower trendline - waiting out this small bounce.

Smells like March of 1973, oh, look who I'm talking too. You were there.

Glad to see you're in top form.

Best Regards,

The CoinGuy

.2nd

ESLR
I will add more in my IRA
Local news is they are still hiring and I plan to visit them this weekend.
We are going to see my wife Boss who went to work there.

Seamus

I do go to fix server problem in weekend as contractor at TER
And lately they have moved manufacturing to overseas

Wow, it looks like investors are running at a full sprint away from PM miners now.

I have the same take on ESLR. Core position that I think will pay off well in a year's time. The key thing to watch now is how they go about financing additional cap ex. They mentioned a debt offering was the likely way to go -- let's hope they manage this without having to include convertible shares.

Added to my short position in RYL today ahead of earnings. A very modest amount based on the idea that they cannot continue to hide their problems. Anyway, earnings plays are almost always a bad idea as I have a genius for speculating short-term price movements in the wrong direction. Maybe I should be a contrarian and go long here?

Nah.

vinod, I look forward to your report after meeting with ESLR exec. TIA

FXI - Were I long (I wish!), I'd be tightening my stop now to around 155, but then I always exit too soon. Not advice. DYODD.

2nd: Keep an eye on SIGM today.
High 18s possible.

GFI - Apparent H&S top over past 10 days, w/ neckline @ 14.20 and top of head @ 15.15; projects to 13.25. Hit 13.27 last time down.

SLW - 14 handle.

FXI- selling at 157, close enough...

GLD/GDX - Big volumes on today's sell-off.

USD up 5.4%/ROM up 3%...AAPL could move them either way tonight...

i was playing around with some TA ideas today
for the XGD in light of this morning's plunge below $900 for gold.

any comments are appreciated.
heres my chart:

http://jglobal.blogspot.com/

sights on FXP at 65...

craig/vinod- what are the odds AAPL-induced euphoria takes the DJIA over 13000 tomorrow...any trades in FXP will be strictly intra-day...planning to hold USD/ROM overnight for a bet...

vinod,
sorry to hear about your Bruins. i have not lived in Boston for several years now, but as I recall, Bruins fans are nothing more to owner Jeremey Jacobs than a captive audience to which he can sell his overpriced concessions. Jacobs has never and will never care about doing what it takes to make the Bruins the great franchise they were and should be.

Boston Owners:
John Henry = made lots of money and spends it on his team.
Bob Kraft = married/made lots of money and spends it on his team.
Jeremy Jacobs = inherited/makes lots of money, makes more OFF his team.

Jacobs is a concessionaire, a beer salesman, first and foremost. Bruins fans should never forget that, and I don't think they will. He almost makes Dolan look good as an owner.

(John Henry, BTW, took the other side of Nick Leeson's trade that wiped out Barings Bank in 1995.)

TED Spread approaching 1.7

Picked up some DXD @ 51.75

FXI - Anyone still long might want to consider tightening their stops again....or taking the money and running (with a big +6% smile). Or not. Whatever. Just remember....it's not the house's money you're letting ride....it's YOUR money.

Doesn't APPL usually disappoint in the spring? And didn't T have fewer new wireless subscribers than people were expecting?

So, this could be a huge bull-trap.

How much of APPL's sales come from overseas?

if more than 50% they could grow earnings on the back of the weaker dollar like GOOG, IBM, and other tech companies.

Rob.

Jesse L. has a differing point of view:

"They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market."

"In speculation when the market goes against you -- you hope that every day will be the last day and you lose more than you should had you not listened to hope -- to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit."

Does anybody like SKF for longer term, like a few weeks or a month? Just took a nibble at 107.81.

Hi,

Re PoG:this selloff is expected at this point, as we have extensively debated around here.

Now, as PoG gradually approaches our personal buying targets (reminder: 870/ 850 / 800 / 770), it may be interesting to summarize which are the available products for those interested in trading gold.

So below you will find my summary list, which I invite all to comment and extend:

- Futures: for trading and hedging purposes only.

My comment: this kind of leverage is a very bad idea in the times we will be going through, and I would not suggest trading this

- Options:

My comment: as far as I know these are not available over the spot price, but traders can buy options over futures or over GLD, if you do not fear GLD.

Options trading has the advantage of limiting the value at risk, but has the disadvantage of the time value of the option.

In this environment, I would feel best trading at or in the money call options with long maturities for a lower risk trade (say December 07).

- Warrants / Turbo Warrants / CFDs

Derivative products which behave much like options, with the disadvantage of having other elements impact price (AKA "the greeks").

-ETFs: they will work untill they don't (quoting Kaimu)

- DB gold ETFs
- GLD

My comment: I am a scheptical of these products.

- Phisical bullion.

My comment: there is a security risk in holding phisical in your own vault at your home or office. An alternative is to find a reliable private banker to keep it in a safe for you.

Anyone has any products to add here?

Cheers

GFI - Looks to me like a bear flag forming on intraday chart.

Rob- what if it's a bear trap instead?

Given Level III assets, credit default swaps, & the TED spread, I think there still multiple shoes waiting to drop in the financials that the market has shrugged off. Obviously, market reaction to bad news has been muted as of late so I don't think we'll see the panic spikes to 140 for a long time, if at all... More like "death by a thousand cuts" into the 110-120 range.

I plan on holding SKF for at least the next 2-3 weeks, w/a basis @ 105.

FattyArbuckle,

Thanks for your perspective; much appreciated.

Re: Airlines

Careful of approaching airline stocks as a trade contrary to oil price declines. Many airlines are looking green around the gills. I would look for signs of a pullback on traffic as a red flag.

There are a few. Mesa lost its contract with Delta. This means that regional operators are losing traffic due to consolidation of routes. Air Castle is hurting because of regional aircraft being parked. Several bankruptcies in the sector, notably Italia. Proposed mergers are never good for business, though they may satisfy leasing company demands. United share prices dropped drastically. High oil prices have sucked the wind out of their sails.

http://rickackerman.com/commentary/2008/Are_Buyers_ZenbrOr_Just_Clueless.html

Bull vs. Bear "Trap"

current CBOE Call Vol - Put Vol isn't @ any extreme, (heavily positive call - put vol back on Friday, though).

waiting for the lunchtime reversal when all the traders are chowing down on their burgers...

2nd
APPL always conservative guidence and
shows result better than guidence
will be interesting to see tonight

F6:
Thanks for your list.

I don't think GLD has options. I think somehow that was the part of the backroom dealings that got GLD and SLV approved, but, as Bill says, I was not in the room. I think the futures exchanges want exclusivity on Gold and Silver options, and GLD options would infringe their territory.

Please correct me if I'm wrong. Scottrade just confirmed to me that options are not available to me on GLD.

Also, personally, I would add to your list a subsection on futures options: Long dated out of the money call spreads.

If one is bearish short-term, but bullish long term, these can be scooped up remarkably cheaply during these hammerdowns. When I get some time I'll post an example of one of these trades I made that worked for very well for me, and some prices of current call spreads. (I would also probably wait for gold to settle at a lower price and a lower vol.)

I would put GLD in the 'trading' category, for those who are wary of the leverage in futures. I say that with equal distrust of these instruments as expressed by you and kaimu.

There is also a sort of 'counter-party risk' in bullion:

One should have an exit plan. I have heard many stories about small dealers who are very friendly until you actually want to sell back, when spreads get wide and the premium you paid is not extended back to you on a sale.

That's another reason I like APMEX as a US retail bullion dealer. They buy. And the spreads are published or available via email.

F6:
I don't know much about airlines except they always seem to be losing money.

However, HA would have made one a TON of money in the past 4 weeks. It's strange I don't see it mentioned much. I guess that move is from a major carrier cancelling Hawaii flights?

http://tinyurl.com/4gk78p
[stockcharts.com]

Re: Apple's Sales base: (from their last 10-Q in Feb)

45% USA (22% increase YOY)
26% EUR (44% increase YOY)
4% JAP (40% increase YOY)
18% "Retail" (Apple stores)
7% Other

Their retail operating segment consists of 197 retail stores, 174 of which are in the US. So revising the table above by adding them all into US:

66% USA
26% EUR
4% JAP
7% Other

Furthermore, from their 10-K annual report:

"The Company derives a large portion of its revenue from its international operations. As a result, its financial condition and operating results could be significantly affected by risks associated with international activities, including economic and labor conditions, political instability, tax laws (including U.S. taxes on foreign subsidiaries), and changes in the value of the U.S. dollar versus local currencies. Margins on sales of the Company's products in foreign countries, and on sales of products that include components obtained from foreign suppliers, can be materially adversely affected by foreign currency exchange rate fluctuations and by international trade regulations, including tariffs and antidumping penalties.

The Company's primary exposure to movements in foreign currency exchange rates relate to non-U.S. dollar denominated sales in Europe, Japan, Australia, Canada, and certain parts of Asia and non-dollar denominated operating expenses incurred throughout the world. Weaknesses in foreign currencies, particularly the Japanese Yen and the Euro, can adversely affect demand for the Company's products and the U.S. dollar value of the Company's foreign currency-denominated sales. Conversely, a strengthening in these and other foreign currencies can cause the Company to modify international pricing and affect the value of the Company's foreign denominated sales and may also increase the cost of product components."

MikeNYC:
Aloha, HA's chief competitor is bankrupt after 60 years in biz, as is ATA. Those two carriers represent a 15% reduction in capacity from the mainland to the Hawaiian Islands.

Anyone thing AZNM will disappoint? Anything short of raising guidance will have to be viewed as a negative.

ALOHA !!

We have investor demand rising for silver as a minetary metal hedge against fiat and now with this news commercial demand will rise ever higher! What car/truck manufacturer wouldn't opt for a catalyst using a metal that is super cheaper compared to platinum!

READ ON:
Mitsui Mining new autocatalyst uses silver, not platinum

Wed Apr 23, 2008 3:47am EDT

TOKYO, April 23 (Reuters) - Mitsui Mining and Smelting Co Ltd (5706.T: Quote, Profile, Research) said on Wednesday it has developed a new catalyst for diesel engine cars that replaces the use of platinum with silver, a less conventional but much cheaper metal.

"Silver will totally replace platinum in this new autocatalyst that we've developed," a company spokesman said.

By substituting platinum with silver, the cost of precious metals in the production of autocatalysts, which clean car exhaust fumes, would be cut by more than 90 percent, the company said.END

adding some GSS at 3.28

Re: HA

HA is in a windfall situation with Aloha's bankruptcy.

Kaimu:
Spekaing of silver reminds me of ECU silver.
ECU's resource update was supposed to be the X-mas present for us, but its down 20% this year.

Any update on ECU's prospects? BUY/HOLD/SELL?

2nd,
The weakness the past couple of days easily could be a bear trap with APPL leading the charge tonight.

Without a doubt the market has been very volatile today and one of my friends who loves APPL says people will always want more IPOD's and IPHONE's.

I just wonder how many people bought one last quarter. It will be an interesting evening for sure. I doubt if I'll lay any bets as I'm terrible at guessing about stock reactions to earnings.

Rob.

I would think if their USA sales go down and their Foreign sales go up that will be viewed as good news and they'll rise.

Much like Goog's report.

Rob.

ALOHA !!

My opinion on ECU or GIX has not changed and I have been a buyer. Technically(charts) and fundamentally based I see them as a BUY, yet as usual they are in the volatile junior explorer sector so it does not take many shares to move the price in any direction. I have already posted here that I have been buying ...

Solar stock valuations

Here is a nice article from Seeking alpha
http://tinyurl.com/4j8dkg

After reading the article I bought CSIQ instead of adding to ESLR.

Kaimu - Thank you for you take on ECU.

HA:
The last part of the move from 6.75 to 7.70, over about the past two weeks, has been on fairly sharply declining volume. (2.7Mil down to about 1m yesterday.)

Someone tell this stock it's an airline. It thinks it's a potash company or something.

50x earnings? Yeah. Right. Either that stock price comes down, or people flying to Hawaii are going to face some massive price increases. Or both.

Could someone tell me why the big drop in FXP and the rise in FXI today? Thanks.

Hi,

This is getting way out of line: here is a real market casino!

www.betonmarkets.com

Crazy...

QT:
Here is 1 answer:
Tax cut on stock trades lifts China ETFs
http://tinyurl.com/5xhc3b

I think with the summer olympics coming up the govt there want the stock market looking in good shape.

JogyP

Thanks!

We should keep in mind tomorrow's Durable Goods orders / Initial Claims @ 8:30

If AAPL meets earnings à la GOOG, & the above reports aren't worse than expectations, (probable? - i think we had positive mkt reactions the last couple releases of these... i might be confusing DG orders w/the ISM) we could easily be at 12,900 tomorrow.

I expect to be out of DXD by 4 PM.

QT- agree with jogyp...psychologically, the 50% pullback in SSEC last week may also have been a trigger point for some speculators...

ALOHA !!

I have posted many times here before that JP MORGAN is an agent for the FED. The first known instance of this came to my attention about four years ago during the BLANCHARD COIN lawsuit against JP MORGAN/BARRICK GOLD.

I see that time after time JP MORGAN is the custodian and administrator for a large number of ETFs that many people trade here on this site. JP MORGAN holds all your bullion in GLD as well as other GLD type ETFs in other countries. I guess by default(since BSC collapsed)everyone knows that JP MORGAN is guaranteed by the US TAXPAYER! How did any of this ever get to be legal and Constitutional? WHere is the JP MORGAN line item on the last Bush FY 2009 Budget?

JP MORGAN has a large derivatives position second only to Citibank. Now it turns out the JP MORGAN got a $55bilUSD loan from the FED via the US Taxpayers. Maybe that $55bil will cover JP MORGAN'S derivatives losses for the next quarter or two! Add in the US Taxpayer subsidized BSC short sellers profits on put options described in this article and it becomes clear as to who was the real beneficiary here and it wasn't loyal BSC employees or shareholders! Maybe thats the key ... TOO MUCH LOYALTY to Wall Street and US Banks and you end up a greeter at WALMART!

Simply on my knowledge of JP MORGAN being an agent of the FED who is immune from prosecution, is enough for me to not risk any participation in any of the ETFs nor do I put any of my long term assets in US Banks. Its a matter of principal FIRST ... then TRUST second! TRUST is out the window and as time goes on I believe the growing lack of TRUST in US Banks and US markets will lead to a complete collapse of the US Dollar. HEDGE THAT ...

So what's next for JP MORGAN? Whose future are they planning to ruin next?

This article got ZERO time on CNBC! Hummmm ... I wonder why? WHERE IS THE US MEDIA? This info never made it to the Senate hearings either ... I thought "taxation without representation" was tyranny? Our Founding Fathers thought it was!

This was originally posted at GATA(pay subscription)but the article was written by Mr. John Olagues of TRUTH IN OPTION at the following link which is open to the public.

Link: http://www.optionsforemployees.com/index.html

READ ON:
Bear Stearns Buy-Out... 100% Fraud
This article is about how Bear Stearns stock was artificially collapsed so that illegal insider traders would make billions and J.P. Morgan would be paid $55 billion of US tax payer money to shore up themselves and buy Bear Stearns at bankruptsy prices.

Massive buying of puts and shorting stock in Bear Stearns

On March 10, 2008, the closing price of Bear Stearns

was 70. The stock had traded at 70 eight weeks earlier.

On or prior to March 10, 2008 requests were made to the

options exchanges to open new April series of puts with

exercise prices of 20, and 22.5, and a new March series with

an exercise price of 25.

Their requests were accommodated and new series

were opened for trading March 11, 2008.

Since there was very little subsequent trading in the

call with exercise prices of 20, 22.5 or 25, it

is certain that the requests were made with the

intentions of buying substantial amounts of the puts.

There was, in fact, massive volumes of puts purchased

in those series which opened on March 11, 2008.

For example: between March 11-14 inclusive, there

were 20,000 contracts traded in the April 20s, 3700

contracts traded in the April 22.5s, and 8000 contracts

traded in the April 25s. In the March 25s, there were

79,000 contracts traded between March 11-14, 2008.

Question: Why did the options exchanges not open the

far out of the money puts for trading the first time that

Bear Stearns stock hit 70, when the April and March options

had far more time to expiration? Certainly if the requesters

were legitimate hedgers or speculators, their buying the

March and April puts with 2 and 3 months to expiration

was more reasonable.

Answer: The insiders were not ready to collapse the stock and

did not request the exchanges to open the new series when Bear

Stearns first hit 70..(more)

Go to link above and then click on "Articles" ...

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY!!

As I try to increase my understanding of the forces that drive the market, may I ask this.

Isn't this suppose to be a bear market that we are in? Lately the way the market has been acting and the nature of the posts in the group it looks like the start of a new bull run. Am I mistaken in my thinking and the cycle bottom Bill talks about of being 10000/2000 is off the table?

2nd

Ok... thanks!

Re: Bear Market

We've been in a bear market since 2000, although you wouldn't know it because of the liquidity advanced after the collapse of the Nasdaq, the deflationary boom with commodities and the latest injections of liquidity with the credit bubble crisis.

If there is THAT MUCH liquidity out there, then the market would appear to be doing much better than it actually is. That is, except when you measure the collapse of the currency along with it.

In reality, the dollar decline has accompanied the market decline, which is a little unusual, meaning the market decline (which nobody notices) is worse than at first thought.

Bonds look like they are in late stages of a huge top spanning several months. One could make an argument for a decline back to the 86 level in the 30 year continuous contract last seen in early 2000. Will be looking to initiate a short position on any rallies back to the 118.5 to 120 area. I would expect the next major turning point to occur in June as some of the most important cycle turns have taken place in June; in June 2003 bonds peaked at 123 before declining to 103 2 months later; June 2004 bonds bottomed at 103 and rallied back to 120 in June 2005 which marked the high for that swing; from June 2005 bonds declined from 120 to the June 2006 low of 105 which again marked the swing low; June 2006 low of 105 held and a rally commenced to around 115 in Dec of 2006 before declining to a double bottom low in June 2007 at 105; the rally from the June 2007 low of 105 continued unabated until last months high at 121. Maybe the dollar bottoms, oil peaks, and bonds sell off all beginning sometime in June.
Also note the fear index-VIX-has worked its way down to 20 from a peak several weeks ago at 37. My guess is any further decline in the measure will represent a buying opportunity in volatility-I started buying some Nov VIX calls Monday and will slowly scale into a long vol position over the next few weeks if the VIX falls towards the 16 level. Good trading to all.

QT- clarification-> meant to say 50% pullback point from the high, but you probably guessed my meaning...FXP is obviously a trading vehicle, and not a tracking ETF, IMO...i would not buy-and-hold FXP for any length of time...

it has been a bear market since 2000, but even during the 30s, there were very nice rallies...eg, the DJIA rose 66.7% in 1933 and 38.5% in 1935...we may drop from here, but we could also easily see 13100 to 14000 before it pulls back to the ultimate low...

FXI/FXP-> knee jerk reaction here would be to buy FXP, but i would be careful this time...does anyone know if shorting is allowed overseas, and what the short interest is? a massive squeeze could easily move FXI to 175 in no time...no guess on what that would mean to the derivatives underlying FXP...

Natural gas production woes in Bolivia.

Gee. Hard to see that coming.

http://www.cpj.org/boliviahistoric/ChavezMorales.jpg

2nd - I thought you were looking to buy FXP below 65 this morning.
Did the news on Tax changed your mind?

I am certainly not a currency player, but the COT hedgers are more "long" than short, but not at an extreme level (by my read anyway)...

The chart (60 mins) on the FXE surely raises the question of an island top though.

jogyp- FXP was for an intraday trade only...just haven't seen that big spike down that allows you to pick it up for a quick bounce...

no way would i be holding FXP overnight...

Bear Market since 2000???

Ah, the S&P and NASDAQ monthly charts point to a bull market since 2003 with possible topping action/distribution since OCT 2007.

There are a lot of stocks moving positively right now and for the last number of weeks. Opportunities are plentiful here and now.

Thought I would pass along this link.
It's about Gold and Native Rights in the Guyana region of Venezuela.

http://www.american.edu/TED/ice/guyana.htm

Posted by: 2nd_ave at April 23, 2008 2:18 PM [link]:

"i would not buy-and-hold FXP for any length of time..."

Given the huge decline in FXP over the past month (much more than 2X the gain in FXI over this month), don't you think this tendency should reverse at some point? If ProShare wants to retain its credibility, they should TRY to get FXP back in line with its promised performance. Or do you think ProShares don't care about it and can let FXP disappear off the face of the Earth?

DavidV

I think the point was that it's a bear market since 2000 in anything but USD. Well, except the Zimbabwean dollar.

Out of DXD... can't tell where this is headed, might pick up QLD @ the close if we crap out... Or just wait for info tomorrow. Still holding SKF and, SRS.

t3d- i was referencing F6's 150pm post...i suppose if you adjust performance for the decline in the $USD, maybe things look different...

Stock Bull & Gold Stock Bull — Different Animals

Share prices for small cap mining and exploration companies are near their lowest level relative to gold (real money) since the beginning of the gold bull market. Never has a bull market ended in a period of frustration. This means that there are currently a number of extraordinary opportunities in the junior arena.
http://tinyurl.com/4ftb9c

DavidV- look what happened to DCR...FXP is not, of course (as far as we know), set up like the DCR/UCR teeter-totter, but since i have been unable to reliably inversely 'track' FXP with FXI, i wouldn't want to guess what would happen with FXP if FXI were to suddenly get squeezed 10-20% in one day...

2nd

Thanks for the feed back.

disclosure: FXP [I'm screwed]

One would tend to think that the largest company Wal-Mart, possessing a supply chain that is the envy of the civilized world, and located in supposedly the richest and most formidable country on the planet, would ever ever ever have any trouble acquiring sufficient quantities of a basic food staple such as rice. A bit of a red flag I would say...

"Sam's Club, the No. 2 U.S. warehouse club operator, said it is limiting sales of Jasmine, Basmati and long grain white rice "due to recent supply and demand trends."

http://tinyurl.com/67cakp

Few weeks ago when I heard about the shortages of rice and rising prices, I went to SAMS club and bought 4 packets of basmati rice. A few of my friends did the same. I guess many other people did the same and created an artificial demand for rice.

Just like the 'bank run' it may have created a 'rice run' which may have disrupted their normal supply chain.

Limiting sales is a good step to prevent the 'rice run' IMO.

Yes, the FXP situation looks depressing. I am guessing, however, that if DOW starts going down, the FXI will go down as well, and FXP will rise (maybe not as much as it should, but will still rise). Given the fact that DOW is overbought, I am expecting a decline at some point soon (the trigger may be the FOMC decision/statement on April 30, when they will either not lower rates as much as the market wants or will demonstrate an increasing concern about inflation). FXI seems to be better correlated with XLF than with the Chinese market, and FXI is not oversold now, so I think a big short squeeze in FXI is unlikely...

DavidV

So it's been awhile since my last post and I've missed joining in on the discourse and it's good to be back. The S&P 500 rose 11% after the Fed stepped in one month ago to rescue the financial markets through their bailout of Bear Stearns. Now the S&P has stalled in the 1375/95 region. Until today, the market continued to look short-term bullish with the strongest stocks outnumbering the weakest stocks by a healthy margin.

Now today things have changed. Even though the major market averages are up, the underlying strength of the market has deteriorated rapidly--probably due to worries over the Ambac earnings news and share price collapse. The number of strong stocks has collapsed and is now outnumbered by the number of weak stocks. Therefore, I once again believe the upside potential of the market is capped and the downside is again in play.

A red flag? I don't think so.

There are rice riots, supply disruptions and hoarding going on right now, all over the planet.

The Indians, the worlds second largest exporter, and the Vietnamese (3rd) have put in place export restrictions. The Thai's (#1!) are about to.

Global stockpiles down 30%.

Being a rich country has nothing to do with it.

Explain, please, the point of this being a 'red flag?' It sounds like you are insinuating a conspiracy of sorts, but I don't see an argument presented besides the fact that we are 'rich.'

The Japanese are rich, too.

http://tinyurl.com/57e8ak

"MARIKO Watanabe admits she could have chosen a better time to take up baking. This week, when the Tokyo housewife visited her local Ito-Yokado supermarket to buy butter to make a cake, she found the shelves bare.

"I went to another supermarket, and then another, and there was no butter at those either. Everywhere I went there were notices saying Japan has run out of butter. I couldn't believe it — this is the first time in my life I've wanted to try baking cakes and I can't get any butter," said the frustrated cook.

Japan's acute butter shortage, which has confounded bakeries, restaurants and now families across the country, is the latest unforeseen result of the global agricultural commodities crisis.

A sharp increase in the cost of imported cattle feed and a decline in milk imports, both of which are typically provided in large part by Australia, have prevented dairy farmers from keeping pace with demand.

While soaring food prices have triggered rioting among the starving millions of the third world, in wealthy Japan they have forced a pampered population to contemplate the shocking possibility of a long-term — perhaps permanent — reduction in the quality and quantity of its food."

Re: FXP

"I'm not sure the reduction in stamp duty will spur the market into life," says Martin Marnick, a director at Helmsman Global Trading in Hong Kong. "If you see a run on ADRs, I would look at shorting them and cover the positions in Hong Kong."

http://tinyurl.com/4r32pj

Mercury be damned, more sashimi for me!

fireworks,

re your post of jr. golds price relative to gold,

boris sobolev has been saying that in his reports for 2 years.

apparently its been the right time to buy jr. golds for as long because the ratio of stocks vs. gold charts keep going lower and lower and today broke new lows for the canadian golds.

Yum, sahimi! Just finished for breakfast leftover ahi tuna poke from yesterday. The shrimp garlic poke from yesterday never made it to today.

DJIA flag pattern formed over the last 5 days?

"Explain, please, the point of this being a 'red flag?' It sounds like you are insinuating a conspiracy of sorts, but I don't see an argument presented besides the fact that we are 'rich.'"

Hi MikeNYC, food shortages have always occurred throughout history but generally are limited to the poor and rarely if ever the rich. Food shortages never make headlines in 3rd world countries because such events are commonplace and not newsworthy. However, when food shortages or rationing are suddenly reported in the powerful and wealthy U.S., I would say something seems unusual. As one noteworthy quote I read recently put it... "People will put up with a lot, but they won't put up with going hungry ... not when they have guns."

Likewise, if a 3rd world country all of a sudden reported that they successfully completed a space mission to Jupiter, I would say, and perhaps the Pentagon might agree as well, that such interstellar activity conducted by a seemingly poor and quiet country might raise a red flag.

Cheers - Fireworks

fireworks:
I agree, it's unusual. I guess these are unusual times.

I live in a spanish 'hood. The downscale supermarket down the block serves mostly the spanish residents (as opposed to the fancy one a few blocks away, where the caucasian gentrifiers seem to shop.) They sell lots of rice in big bags. I'm going to take a walk down there and see what's up.

I'm lazy and shop in the bodega on the corner, so I'm already paying too much for everything.

FXP: just for the fun of it, I just bought 100 shares (aftermarket) at $63.60 and placed a sell limit order at $70. Let's see how it plays out...

DavidV

SBUX guidance for the rest of year down.

Trading below 16 after hours, new 52 week low.

(No position)

AAPL up 6...

AAPL loosing steam.. now below 164

the earnings & revenues topped estimates... i guess people didn't like the future guidance...

CMG:
I guess people like their 1200 calorie Mexican Grilled Chicken Chicken Burritos (!!!)

I feel fatter just reading that last sentence.

Let's see how the market likes their "Significant near term challenges"

No position. Until, that is, it loads itself up with more PE for me to short.

I should have added:

CMG +39%/share, beating by .04 and comps are up 10% but guided down for the future.

MikeNyc,

Question from an ignorant European: That is a sort of low cost fast food restaurant chain, am I right?

If so, to me those numbers would mean that joe public is eating more garbage in order to save: a sign of times.

If not, please excuse my ignorance and please lecture me on why that restaurant chain is selling more and more burritos...

Cheers!

maro:
They are new, they have a hip store design, a 'buzz' in the market, and a reputation for serving a very fresh, very targeted menu. And they're fairly tasty.

They aren't especially cheap in terms of a weekday lunch spot.

As an aside: NYC just passed a law that said fast food stores must post calories on each item. It went into effect this week. So people are taking a close look at the numbers.

What they are finding is that while the food is 'fresh' (and not too bad tasting - I did some field reporting :-) ) fresh does not always mean 'healthy.'

There is also a bit of a news story here, because they decided to base their reporting of calories in a 'burrito' as a plain tortilla with some black beans. Something no one would ever order when they wanted a burrito.

It turns out a Chipotle burrito a normal person would order is something like 1200 calories. And tons of salt.

The sad part here is that people who do want to eat healthy are being misled into thinking 'fresh' means healthy.

A normal 'veggie' burrito is in the 800-900 range. Not healthy.

I don't know. I ate a whole chicken one and felt like a whale after. No way I could eat one and tell myself it's a 'healthy' meal. But people don't always know.

Anyway, the buzz is why it had a sky-high PE and made a good short. The bulls think they have a bright future with lots of new stores and so the PE is valid.

I think they will have share price pressures from input costs and a easing of the 'buzz' around the stores.

Shares up $4 in after hours so far. I wonder if tomorrow the pros see lowered guidance and sell? Or if the news carries over for more gains? I'm standing aside now, and keeping an eye out for more declines.

Who knows. Maybe I'll be wrong and it'll go back up to 150.

You can build your own burrito with this handy Chipotle calorie calculator, even from Europe, and see how you would fare:

http://www.chipotlefan.com/index.php?id=nutrition_calculator

2nd
look like down day tomorrow
got some FXP at 63.40
also more DAL

I'd just like to say that CMG has me alone to thank for beating earnings, given my burrito addiction, I'm entirely responsible for that extra .04/shr

I know the chicken one is 1200 calories each, but ya just gotta eat half @ lunch & half later, then hit the gym afterwards and burn it off...

seriously though, CMG actually is priced higher than others in both its own market (vs Qdoba or Taco Bell for ex.) and the general fast-food market (McDonalds reigns supreme)

i fully expect average american eating / spending habits will trend (is trending?) towards lower cost & nutrient options. that reminds me to pick up a couple bags of rice and several pounds of pasta to start my hedging collection.

i would be curious to see CMG vs. Qdoba store growth - it's just one data point, but in my suburban NY location: CMG opened up it's own store, (i'm sure they owned the building) across the steet from a Qdoba that had been there for a while (in a large shopping mall). i think eventually the mall's rent increases axed qdoba, which charged less for practically the exact same product.

Ryland just reported. The SEC needs to investigate their accounting practices as they have yet to take any sizeable writedowns. They are active in all the distressed markets and continue to report significant operating losses. Yet invetory is STILL priced at 2005 levels!

Yes, I'm short RYL. But this report is enronesque in its deception nevertheless.

They have more buzz and cooler looking stores than Qdoba. Maybe that's it.

They still get lines at lunch here in the city. So I'm not saying they are totally crapping out. I just think the shares are overpriced. Once the fad fades....it's CROX redux.

I also noticed they attributed their raising prices to the good results.

OK. That was before rice blew up. Are they going to raise prices again this quarter? I hope they are hedging.

Some of that after hours pop has already dissapated. Down to +1.60 (1.46%)

vinod- can't say you didn't buy FXP on weakness, i'm sure it'll work out...

may be a down open...on the other hand, we have MMM/DOW/WHR/MOT reporting before the open, which could also set the tone...

Dirty Economic Indicator of the Month
Wednesday, April 23, 2008 | 07:30 PM
in Digital Media | Economy | Web/Tech
Of all the indicators I track, this is the one that I find most concerning amusing:

"Economists are citing some dire portents of a recession these days, but they've missed one indicator I find especially disturbing: The porn business has suddenly gone flaccid.

The drop in porn rentals and sales is worrisome on several fronts: Till now, porn has been a recession-proof business. Further, with the country already in a dispirited mood, the fact that porn has gone limp may indicate a true plunge in consumer confidence.

DVD porn is down between 10% and 30%, depending on which nook and cranny of the business you scrutinize. Joy King, executive vice president of Wicked Pictures, and a smart analyst of the business, says the smallest dropoff is in "couples-friendly porn" -- films that embrace something of a storyline. Women account for roughly half of this audience, making their purchases in lingerie boutiques and toy stores (no, not kiddie toys)."
From Barry Ritholtz

2nd
FXI move higher today because of tax cut by chinese goverment
April 24 (Bloomberg) -- Chinese shares trading in the U.S. rose after the Beijing government cut a tax on equity trading to bolster the world's second worst-performing market this year.

[Bill Cara note: For all those who don't think that Interventionists have a serious impact on supposedly free market prices, let this WSJ story tonight be the nail in the coffin:

(WSJ) "Anticipation of Beijing slashing a tax on stock transactions was credited with contributing to a 4.1% surge Wednesday in the Shanghai Composite Index, which has shed about half its value in the past six months. After the market closed, the government cut the tax from 0.3% to 0.1% -- where it was about a year ago when Beijing raised it to stem stock speculation by individual investors, who comprise the bulk of China's stock market."

Seriously, you hear Talking Heads talk about "free" markets and "level playing fields"; so I say to you, wake up and smell the napalm. ]

vinod- glad to hear it...if 'don't fight the fed' is the mantra here-> twice as true applied to beijing...

bill miller (legg mason) sees "strong gains in the months ahead:"

http://tinyurl.com/6nauhq

excerpt:

"Most housing stocks are up double digits this year despite dismal headlines, a sign the market had already priced in the current malaise. I think likewise we have seen the bottom in financials and consumer stocks, but not necessarily the bottom in headlines about the woes in those sectors," Miller wrote.
Those woes have played havoc with Value Trust's performance over the past two years as Miller's ill-fated investments in both financials and housing headed south. Even as the credit crunch mounted last year, Miller maintained bullish stances on those troubled sectors, including two prominent fund holdings that became poster children for the crisis: Citigroup Inc. and Countrywide Finanacial."

maybe he's early again, but i would give him the benefit of the doubt based on a 15-year track record...

could probably do worse than buy LMTVX...

make that LMVTX...

MikeNyc,

Thanks for lecturing me.

:-)

I have followed the link, and my Burrito has 880 calories.

Brutal.

Keep cool!

Brazil halts rice exports. Just hit the wires.

This ain't no joke.

Will we see a government fall over food? How many people will die over this?

I wonder how the rice farmers feel? Paying world prices for inputs and getting govt controlled prices for their output? (see argentina wheat farmers)

Personally, I think the world is overdue for a massive human die-off, but starvation is slower than what I had expected, so I don't think this will be it. But many will die.

Look for action from the CFTC soon. Agweb.com had it that CFTC officials are meeting with the traditional users of the ag futures markets for ways to limit hedge fund participation.

I don't think it will help.

[Bill Cara note: Yesterday I listened to Charlie Maxwell (one of my long time favorite Wall Streeters give an impassioned plea regarding the impact of higher oil prices. His story has not changed over the years. He is like Don Coxe, an icon and should be listened to. He said in that Bloomberg interview that the world cannot accept $120 oil; it needs $80 oil. There are a couple billion people on this earth who rely on buses running to transport them to work but stop, unable to afford $120 oil. These people go home to cook on oil fed fires and they can no longer cook or boil potable water water at $120 oil. The crisis goes on and on. Please hear Charlie Maxwell, long voted one of Wall Street's most popular investment analysts. This is a crisis. If you think you can live snug in your enclave, I say to you that you cannot. The world is at the boiling point. This is a crisis.]

I see the BLS is cutting back on some job data reporting to "cut expenses". This is akin to 2006 event where the Fed stopped measuring M3 to save money. In addition to rice rationing the gov't is overtly being very lenient with its dispersal of truth.

Warning: long post. My Senators have responded:

This is an official communication from the Office of Senator John Ensign. Any tampering or alteration of this communication is prohibited and may result in criminal investigation or prosecution.

April 23, 2008

Mr. xxxxxxxxx

xxxxxxxxxxxxx

Las Vegas, Nevada xxxxx

Dear Mr. xxxxx:

Thank you for contacting me regarding the bailout of Bear Stearns. I appreciate your taking the time to share your concerns with me, and I value the opportunity to address them.

As you may know, Bear Stearns was one of the largest mortgage bond underwriters and investment banks in the world. Earlier this year, it was on the verge of bankruptcy as a direct result of the mortgage crisis and the disturbance it caused to the broader financial system.

Almost a year ago, Bear Stearns began showing warning signs that created concern among industry leaders and those who invested through the bank. This worry created a massive withdrawal of funds from Bear Stearns and forced Bear Stearns to sell off assets to pay its investors. Unfortunately, the mortgage-backed assets being sold were severely overvalued. As property values declined, selling the securities became almost impossible.

The collapse of Bear Stearns had the potential to have a disastrous impact on the overall economy. The U.S. Treasury and the Federal Reserve (Fed) brokered a deal with JP Morgan to save Bear Stearns from bankruptcy by approving a $30 billion credit line. This allowed JP Morgan to purchase the majority interest of Bear Stearns and prevent a ripple effect that would have caused significant damage to the economy.

In return for its loan, the Fed received $30 billion in mortgage-backed securities as collateral. As the U.S. economy stabilizes and the mortgage situation improves, these securities are expected to regain value and accrue interest as they mature.

It is fortunate that the Fed prevented further financial collapse, but the question of how to prevent this from happening again as well as eroding moral hazard in the marketplace, still remains. Financial market regulations currently exist but are outdated. I believe that we need to re-evaluate these regulations and update them where necessary. Updating financial market regulations should help participants in the market function more efficiently and effectively in the 21st century economy.

I am not a member of the Senate Committee on Banking, Housing and Urban Affairs; however, should legislation be considered in Senate regarding the mortgage crisis and financial services industry, I will keep your views, and the views of all Nevadans, in mind.

Once again, thank you for contacting me on this very important issue. If you should have any further questions or comments, please feel free to write or e-mail me via my website at http://ensign.senate.gov.

Sincerely,

JOHN ENSIGN

United States Senator

JE/JP

Your thoughts and opinions are important. Unfortunately, any replies to this e-mail will not be received and processed. If you want to contact Senator Ensign electronically again please visit:

April 21, 2008

Mr. xxxxxx

xxxxxxxxxxxxx

Las Vegas, Nevada xxxxx

Dear Mr. xxxxxx:

Thank you for contacting me. I appreciate hearing from you.

As you know, in March 2008, Bear Stearns was on the brink of collapse due to a sudden liquidity squeeze because of its large exposure to devalued mortgage-backed securities. On March 16, 2008, Bear Stearns agreed to be sold to J.P Morgan Chase & Co. for approximately $236 million or $2 a share. The Federal Reserve agreed to open a $30 billion line of credit for J.P. Morgan to help finance Bear Stearn's less liquid assets. A week later, due to criticism from Bear Stearns' shareholders and employees, J.P. Morgan offered to increase its offer to $10 a share in stock. The Federal Reserve then altered its terms, asking J.P Morgan to absorb the first $1 billion in losses with the Federal Reserve responsible for $29 billion. The Federal Reserve's role in this deal, this first one of its kind in a generation, is not without controversy.

I understand your concerns about the federal government bailing out investment firms that made poor decisions. I also understand your view about the unprecedented expansion of the Federal Reserve's role in our economy. On April 3, 2008, the Senate Banking Committee held a hearing devoted to this issue. To read testimonies by the key players in this deal, please visit the Senate Banking Committee's website at: http://www.senate.banking.gov. In the meantime, please know that Congress is working to exercise its oversight responsibilities. As the House and Senate committees move forward with their investigations on this issue and explore other possible solutions to our nation's credit crunch, you can be certain that I will monitor those efforts with your thoughts in mind.

Again, thank you for taking the time to share your thoughts with me. For more information about my work for Nevada, my role in the United States Senate Leadership, or to subscribe to regular e-mail updates on the issues that interest you, please visit my Web site at http://reid.senate.gov. I look forward to hearing from you in the near future.

My best wishes to you.

Sincerely,

HARRY REID

United States Senator

Nevada

Reid is a Demo, Ensign is a Repub. I won't go into political discussion but wanted to share their responses.

SSEC opens up >6%...

make that shanghai opens up 8%, but opening gap quickly sold off...beijing clearly wants investors smiling by august...

apparently short-selling of actual stock is not permitted in china...whereas in HK short-selling is allowed on 'designated stocks' (if anyone is familiar with the process by which stocks are designated, would appreciate learning more)...

buying the dip-> shanghai now up 280 points...

ALOHA !!

Bill & MikeNYC ... As long as you and I have been alive there has been a constant grinding higher for all prices to survive on this Earth. What else constantly grinds higher year after year? Population ... Whether it is Third World or First World the crisis has been all around us for decades upon decades. The common denominator is that global governments keep getting BIGGER and more CENTRALIZED as money supply keeps getting BIGGER and more corrupt. That is an essential link to our current global ills that nobody can dismiss. I think the solution can only be a collapse either of population or money. People may call that drastic and unrealistic but after spending years studying money I cannot find an instance where fiat systems have prevailed. The main reason fiat monetary systems never succeed is because they are based on the worst traits of the human ego. Those in power want to retain power no matter how many IOUs they have to print. Every succeeding US politcal administartion keeps pushing off the consequences into the future until we have no future left. Yes, people will die but when haven't they died during any past historical crisis? I mean, my wife's sister is a social worker for the county of San Diego, CA and she has a number of cases where elderly fixed income types are eating cat food for protein and dumpster diving to survive! There are certain people even in Mexico(USA neighbor)that would love to have a chance to eat cat food! They'd even eat the cat too! The USA is suppose to be the wealthiest country on Earth! Well, I think we need a new way to measure wealth, because the USA is not wealthy. How can massive unsustainable debt be described as wealth? When M3 charts mirror World Population charts then a crisis will happen. Here in Hawaii the ancient peoples practiced infanticide when population exceeded food supplies. I believe modern man has an equivalent solution that the current US administration considers "acceptable" ... WAR! Too much Roman Empire going on here ... There's nothing new under the Sun here because its all been done before in the past.

I was the guy waving RON PAUL signs out on the roads here all Winter and I spent thousands of US Pesos trying to get "reality" elected! The US Voters don't want anything to do with reality ... they want the same old tired fantasies of Empire and self-indulgent American Dreams. There's nothing wrong with Dreams, what's wrong is the way Dreams are "financed"! What ever happened to saving? Picture a World with NO FED and NO CREDIT ... To me that would level the playing field!

Ernest Hemingway is not known for being an economist, yet somehow he figured out the truth many Americans have yet to embrace much less invision. We cannot solve a problem that we cannot or are not allowed to define. That's the first step drunks must take at AA ... admit you have a problem! The US FINANCIAL MEDIA cannot even admit a problem exists.

"The first panacea of a mismanaged government is inflation of the currency. The second is war. Both bring a temporary prosperity; both bring more permanent ruin" … Ernest Hemingway

Contuining in the food vein:

I find it surprising that the collapse of salmon stocks and shut down of the salmon fishing industry on the US west coast has not gotten more play.

Maybe all the other bad food news has drowned it out.

Is anyone following aquaculture and good investment ideas therein?

kaimu: I think "The History of Money" should be required reading. The very first civilization to coin silver and create modern money went sorta like this: coin money, get rich, overextend via wars and excess consumption, debase, debase, debase, collapse.

Lather, rinse, repeat for thousands of years, up to the present day.

It seems the pattern of fiat money is quite inescapable, or it has been up to now. Literally hundreds of currencies have collapsed in exctly the same way, over and over and over, taking with them the state promoting them.

It's quite nice on the ascent, it seems. The downside has proven pretty uncomfortable. Ask the Knights Templar, who happened to stand in the way of a debasement. That didn't end so well.

kaimu- "There's nothing new under the Sun here because its all been done before in the past."

david walker had his 15 minutes on "60 minutes-" no one wanted to hear it...

we can only change ourselves and maybe those around us who want to change...everyone else will change only given extreme motivation, which is probably on its way...there was nothing new under the sun when solomon wrote ecclesiastes, and nothing's changed since then...

An upside to the food crisis:
The Telegraph (UK) reports that farmers in Afghanistan are shifting from poppies to wheat.

Declining heroin prices and increasing wheat prices have made wheat more profitable to grow.

I can't even get my mind around the full implications of a story like that.

I'm going to try to convince my retired parents to double their garden this year, even if I have to pay some casual labor to help them tend it.

to 2nd_ave:
i am newcomer to this community, my background is Chinese and trader in A shares and ADRs for 3 years. i guess i can be some help with your ideas.

There been a major shift in the Euro area yield curve this week. I doubt if this means rate cuts any time soon, but may explain why the Euro remains strong against the Buck:

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

eric2000- that would be great! please email me at evadn2[AT]yahoo.com (using @ in place of [AT}, of course)...thanks...

F6,

The dislocation in the Yield curve is very relevant.

Thank you for having posted it.

"maybe he's early again, but i would give him the benefit of the doubt based on a 15-year track record..."

Sorry, 2nd, but I disagree completely with that view. Miller has been disastrously wrong on this sector for a long time now. And he will continue to be so as long as he makes remarks like that.