Clear, succinct and pretty much what I see as coming. I would put gold I bit higher than 770 and the reason being that I think there's going to be a lot of physical, and not only, buying at a price below 830. The juniors is what I care about most, I've been burned there a bit; I wish I'd listened to you earlier.
Best regards,

Gus.

Bill - Here is an eMail that I received last night from my broker and clearing agent:

................................................................................
Dear Valued Client,
In accordance with FINRA Conduct Rule 2520 which details certain margin requirements for equities accounts with respect to day trading (purchasing and selling the same security on the same day in a margin account), MB Trading’s clearing firm, Penson Financial Services, Inc. (Penson) will be changing its policy regarding applying intraday credits of funds and securities to an account.

Effective April 4, 2008, Penson will no longer permit incoming funds or securities to be calculated into the Day Trading Buying Power (Current Buying Power on Navigator Software) calculation on a same day basis. ***Clients will be unable to day trade on the funds or securities received until the day after the deposit of the assets is received and posted to the account as specified in the regulation***.

Therefore, no credits will be issued to equities and futures accounts for trading purposes when the funds arrive the same day to prevent improperly inflating the buying power for the subsequent trading day.

We appreciate your business and support of our continuing commitment to ensuring that Penson and MB Trading are adhering to important regulatory rules and regulations.
......................................................................................................

I have no idea how old FINRA Conduct Rule 2520 is, but the net effect of this Rule, if it is new or newly enforced by all brokers and clearing houses, will be to remove small account Mom and Pops from being able to trade their accounts with tight stops - one or two hurky jerks with the Market hitting stops and then the field belongs to the big guys.

Guess other causes could also be that clearing houses no longer trust each other to pay off and/or some clearing houses are short on funds to cover trades while collections are being made.

Anyone else getting this notice? Also, weren’t you talking about starting a new Market Place for traders in the Bahamas under Bahamian rules?

I think $770 is conservative... looks like there could be around a 15-20% drop to $720-$740?

The perfect storm happened last Nov when CAD went to $1.10 US along with a pop in gold. CAD did a quick drop to it's current range area of $0.97 - $1.03. GLD kept on going. Canadian market & commodities go hand in hand, which is why I compare CAD with GLD.

http://tinyurl.com/34fr4a

The last major correction in 2006 took GLD around 26% off highs, so a 15-20% drop sounds resonable. On the other hand, things were different in 2006 and the POG has already dropped 15% from highs of around $1030. And what's with the huge spike in volume of money flowing out of GLD? Manipulation of gold price or liquidation of positions?

http://tinyurl.com/23onpz

They do need to buy gold medals for the Olympics... and the Fed can purchase gold for $0.10/oz. (though this article sounds a bit dated, so it's probably more like $0.40/oz now)

I'm going to go crack open my piggy change & buy another 1/20oz coin.

http://tinyurl.com/ysrxv8

Rust to fertilize food price surge

A deadly fungus, known as Ug99, which kills wheat, has likely spread to Pakistan from Africa. The deadly virus, stem rust, against which an effective fungicide does not exist, comes as world grain stocks reach the lowest in four decades and government subsidized bio-ethanol production, especially in the United States, Brazil and the European Union, are taking land out of food production at alarming rates.

The spreading alarm over the Ug99 fungus is encouraging Monsanto and other GMO agribusiness companies to demand that the current voluntary ban on GMO wheat be lifted to allow spread of GMO patented wheat seeds with the argument they are Ug99 stem rust resistant.

http://www.atimes.com/atimes/Asian_Economy/JD04Dk01.html

Thanks for all the detail on PM's today Bill. The more I learn about Fortune 500 style capitalism the harder it becomes for me to invest in big business insofar as investing money lends credence to whatever it touches. Gold and silver have no agenda of their own, which is a real blessing.

[Bill Cara note: Agreed, but the point is that any unencumbered asset has no agenda on its own, if you will. That is why I say that the credit-based financial system has to be decoupled from the capital markets,

Holding debt that is fully secured is not a problem, hence the debt market is a good market. Holding equity in a fundamentally sound company is also what we want. But in the latter case, it is the debts of the owners of capital that are linked to the market and not to the credit granting financial services companies that lead to problems.]

spot, trying to figure out the email ... could they be talking about transfer of new funds into the account from outside the firm?

g52- colin twiggs' chart of TNX:

http://tinyurl.com/7fw5r

he expects a test of the long-term moving average, which may present a target for taking profits on RRPIX/DXKSX...

Interesting article at dailyfx.com regarding correlation between dollar/yen and djia. They are basically calling for dollar/yen to reverse to new lows at 104. Also in line with Mr.Twigs view that 11860-960 represent formidable resistance, and likely reversal level. Sorry, dont know how to do that tiny url thing.

Good morning.

Here are your Cara 100 Ratings Changes:

Downgrade:

CSCO - to Neutral @ UBS

Target Price Raised:

PBR - $79 to $85 @ Lehman Bros.
RIMM - $135 to $145 @ Lehman Bros.
RIMM - $115 to $150 @ Oppenheimer

Target Price Lowered:

CVX - $105 to $102 @ Lehman Bros.
GS - $93 to $92 @ Lehman Bros.
XOM - $105 to $102 @ Lehman Bros.

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

Have a great day.

Jobless claims, 407,000.

re-entering FXP premarket at 82.40...

Re: £/¥, €/¥ carry trade

I have my doubts whether the unwinding of the carry trade is tradeable, though there must be people out there who can anticipate the next lay up.

Ambrose Evans-Pritchard had mentioned the next place for an unwind in the credit bubble would be Japan, especially regarding the British pound, so going back to the charts, it appears he was correct. We have yet to have reporting on credit conditions and banks in Japan to fill out the picture for us.

Another place to look for further unwinding is probably the €/¥, which is a stepping into the layup, though not strongly correlated with gold prices as the £/¥ trade was:

stockcharts.com

http://tinyurl.com/3x7ywk

In the meantime, the ¥ fell against the $US, though both the £ and the € continue to show strength on the dollar.

writersblock - re: Posted by: writersblock [TypeKey Profile Page] at April 3, 2008 8:07 AM

I can see how you might think that the eMail concerns fund transfers between accounts, but if you reread that first paragraph with its emphasis on "day trades", the meaning of the eMail seems to be that Rule 2520 will effectively stop all Day Tading except in larger accounts because once one sells a lot or two, the proceeds won't be available for further trades until at least a day or two in that account for further trades.

What's up with the airlines all of a sudden. First Aloha, today ALitalia trading suspended and ATA bankrupt. Fuel costs/low margins ?? Who's next? Anyone got any short candidates?

writersblock - I will ask MB Trade/Penson what is meant in that eMail. Thanks.

Bill, your analysis of gold prices is an excellent example of your thinking. Good work and good lesson for me. Thanks and have a good day in the warm sun.

Tim Ord examines the XGD (canadian gold miner ETF)
and uses the CCI which has been thrown about this forum the past while.

http://www.decisionpoint.com/TAC/ORD.html

MU- trading up 6% pre-market despite wider (adjusted) loss of -0.41/share vs expected loss of -0.36/share...

Alitalia Nears Bankruptcy as Air France Quits Talks
http://www.bloomberg.com/apps/news?pid=20601085&sid=aYQz0qRnU6TI

From CT's daily this AM:
"You shouldn’t be worried. You should be angry. We’ve just come off a multiyear orgy of irresponsibility and recklessness that’s unprecedented in the history of finance. Where was the government? Where were the regulators? How did this happen?"

~ Barry Ritholtz, CEO at Fusion IQ.

I was lucky...

Received CT's Gold daily yesterday right after the close, called for $770-850 POG.

I check the blog and Maromatics had posted a cautious tale on gold breaking down and looking at $770-850.....go figure!

Bill, CT, Maro....it's three strikes.

Since it was still AH trading I got on and sold GFI at 13.96.

Check out the Consumer Credit Growth Graph at Colin Twiggs:

http://tinyurl.com/7fw5r

Senate Banking Cmte. hearing at 10:00EST on the U.S. financial markets. Witnesses include Fed. Reserve Chairman Ben Bernanke and Securities & Exchange Commission Chairman Christopher Cox and the chief executives of Bear Stearns and JP Morgan Chase. CSpan link:
http://www.c-span.org/Watch/cspan3_wm.aspx

Craig - Nice job! GFI now 13.55-13.61; last trade 13.56.

craig- consider HGD.TO/DZZ...

QQQQ going down to fill the monday gap?

2nd - Kudos re FXP entry also!

Like I said, I was lucky!

I owe Bill, Maro and CT!

And of course 2nd for the nice short gold tip....

Re: Airlines

The deterioration will be rapid once one operator fails, it has a domino effect on the others. This is primarily because financing is provided by a very small number of companies, who are all subject to tightening credit.

I presume that since Air Castle is exposed to regional operators who are having their flying consolidated onto larger carriers, then that finance company is a good bet, but also operators like Skywest or Pinnacle. Regional operators provided a good internal competition with their larger parent, especially on routes which neither low cost or legacy operators could obtain subsidies or sufficient passenger loads. But its more likely that legacy carriers will opt for larger aircraft and lower frequency, internally cannibalizing their route structure to maintain yields on their available seat miles.

[Bill Cara note: FranSix, you have given a warning here to all traders who are not sufficiently conscious of the effects of credit contraction or deleveraging as the bankers say. Any company with significant debt, like an airline, or a retailer that finances its inventory via bank credit lines, is subject to being cut off. What happens then? Their stock plummets.]

adding QID at 46.18...

opening a position in SMN...

SGP bouncing back...

SMN - Big volume spike.

More worrying signs for retail...

April 3 (Bloomberg) -- Consumers fell behind on car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing, according to an American Bankers Association survey.

Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement. Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group.

``The rise in consumer credit delinquencies is consistent with a rapidly slowing economy,'' ABA chief economist James Chessen said in the statement. ``Stress in the housing market still dominates the story, but it's a broader tale.''

http://tinyurl.com/25ytbf

fireworks, the Fed will soon be selling used cars, as they may soon be taking car loans and credit-card loans as collateral. What other bullets do they have :-)

OG- thanks, but obviously a little early on FXP...

Up nicely on my COF Apr 50 puts(+30%). Makes up for my FXP @ $89 avg cost after doubling down. I am up on LEH Apr 40 puts.

Down a little on DUG @ $37 avg cost.

I will just hold for today and wait to see what tomorrow holds as I have a busy day at work for now.

Would someone please provide a link to CT's daily. Thanks

SMN - 36.46

SMN- OG, i see the volume...just think SMN/DUG are poised to rise...if i didn't already own a fair amount of DUG, would be buying here...

Paul- you can find the link to CT's diary in my 821am post...

SMN about to test the 52-wk low...

I have been of the opinion for quite some time that there is no way the economy and the stock market can recover if oil stays over $100 a barrel. Commodity prices will pull back as a result of economic slowing. When oil finally falls into the $75-$80 range, I'll know it is time to start buying stocks again. Also, I'd be very wary of shorting airline stocks. Yes, their fundamentals stink, but oil should head down after Memorial day, so airline stocks may not fall much further.

adding to HGD.TO...

DUG - 35.60

SMN - Now would have been a better entry w/ CCI support.

OG- hard to complain about an ETF entry near the 52-wk low...if you pair your entry with Bill's opening comments, i think it puts you in the catbird seat...

2nd - Yes, but failure to follow my rules indicates a lack of discipline on my part. They're simple. They're straightforward. They work. So why did I jump the gun? Gotta work on that. Patience--got to think like a cobra--wait...wait..then STRIKE!

Regarding projected oil demand.

Currently, gasoline refiners are taking production offline because of the inability to maintain margins at current oil prices. At $80/barrel we were paying within 7% of the current gas price. If oil prices drop refineries will bring production on line as they can expand their margins, so isn't it unlikely gas prices will drop significantly? Also, diesel is in a similar boat. Now, given world production seems to be shrinking aren't we running into a supply ceiling? With China and India continuing to expand, isn't demand growing albeit more slowly? Therefore, isn't there a rising floor on demand? Even if the economies slow in India and China, there will be a continued growth in oil consumption and I believe approx. 80% of oil consumption in the US transportation related. Given the fear/scarcity premium in the market due to the relatively tight relationship between Supply and Demand even if unrefined oil comes down, I don't necessarily see the pressure coming off the end consumer of refined products.

EIA - Natural Gas stockpiles down 29BCF

MOS Sold May 120 calls @ 5.20 against position in MOS.

Si02 may want to check straddle possibilities.

scaling into a little DZZ...

Quote form Ben today

"A collapse at Bear Stearns would have collapsed the Entire Economy"

If anyone needs proof of how unstable this house of cards we call an economy has become you just need to ask yourself why a Broker, who is not even in the top three, failing would sink the entire economy.

Place any other S&P 500 company in that equation and will those companies sink the economy if they fail too?

If GE fails is the economy toast?

How about Proctor and Gamble? Boeing?

We need some clear answers about why we were betting the house on a brokerage that's not even in the top three and most people had never even heard of before the rescue.

Rob.

Seamus, MOS is rocketing higher.

110/105 requires a move of 12.6%. I'll pass this time, too expensive for me. Good luck!

C110 $5.60 $121.00 12.42%
P105 $5.40 $94.00 -12.66%

Finger Lakes, the explanation is simple. Bernanke and others are lying in an effort to sell this bailout to the public.

A collapse of Bear Stearns would NOT have collapsed anything other than Bear Stearns. And NO ONE has offered a scintilla of evidence to the contrary.

[Bill Cara note: Finger Lakes and number2son, I have to disagree with you two guys. Say you two owe g034 $1 million each and he owes kaimu $2 million, but he can't pay and kaimu's creditors put him into bankruptcy and they then put g034 into bankruptcy, and his creditors put both of you guys into bankruptcy, and you guys then are forced to put others into bankruptcy. Pretty soon the economy is affected. But you guys may only be leveraged minimally. But when people don't pay you, you probably can't pay the next person. Now think about these investment banks that are leveraged 30 to 1 or more, and the commercial banks 10 to 15 to 1. They all lend and borrow amongst themselves overnight in what is called the credit ring. When Bear Stearns couldn't pay, the ones holding the biggest exposure to Bear may also have been unable to pay the banks they deal with. Apparently, according to CNBC's David Faber, based on confidential discussions he had that Sunday that Bear was doing the JP Morgan deal, had Bear been bankrupt on Monday, another major bank would have gone down the same day and on Thursday yet another one. Soon, the banking system would have shut down. Everybody would have been affected. All demand loans would have been called. If any of you have a demand loan today, could you have paid on demand? If not, your bank would have been forced to petition you into bankruptcy. Think about how serious this is.

Should it be that way? No. These bankers got out of control with what they call credit derivative swaps, which is just a fancy word for self-insurance, hoping that there is no weak link in the system. Bear Stearns was a large enough weak link to bring the credit derivative swap fiction to an end. So Bear was saved. Is the problem still there? Of course it is. Will there be more problems as the system deleverages? Of course there will. That's why the Treasury Secretary is so desperate to use the People's wealth to backstop all these investment banks and their colleague commercial bankers whose business is fundamentally based on a solid credit ring. Should the People agree to it? No!!! This is Paulson's (False) Pride. I've mentioned it before.

At least the country is getting a good look at the faces of the offenders who have previously been hidden in quiet boardrooms pulling strings. I have seen the enemy; I know it to be them.]

Si02

Thanks! Yes, they are expensive. No straddle here for me either. Much better to sell the calls at these prices vs. position. Sale will be assigned to me if price hits 125.20 which is great from my perspective. On the other hand if it heads south, calls sold provide insurance as I can cover at lower price than sold.

Good article here on market manipulation:

http://www.minyanville.com/articles/index.php?a=16547

The author has 30 years Wall Street experience.

If I was one of those politicians and heard that comment from Ben B., I would want to know how in God's name did we (the fed and Wall St.) get to a point where a single investment bank (not even the largest) can bring down our whole economy? People should be shocked, outraged and really scared.

However, chances are he will get a free pass.

SMN - adding @ 35.80

homebuilders very volitile today. MTH was down 8% today and is now back at par.

One of the top technical callers in gold states that our next move in gold could hit the $1400 region and that...

"We might see Gold “chop” a bit in here, or even go a bit lower, but I do not expect the weakness to extend past around April 4th."

http://tinyurl.com/2ha8qx

Bernanke speaking on c-span. just a reminder.

http://tinyurl.com/22jp3p

For anyone who wants to see Ben Bernanke testimony from yesterday:
http://www.c-spanarchives.org/library/cache/ASX_204658-1-0-0.asx

And the testimony from today will be here:
http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=204680-1

NYUgrad,

:)

Agree, if any co. is big enough to collapse the economy it should either be nationalized or broken up into smaller parts, but never never bailed out at taxpayer expense

Spot,

in reference to the clearing houses. Yes, I've noticed it too. E-Trade won't allow you to trade the money you transfer in until the day after the cash has fully cleared.

email addresses for Senators Shelby & Dodd of the Senate Banking committee

senator@dodd.senate.gov and
senator@shelby.senate.gov

When one listens to the "Bush Babies" sing their sad, siren (and lying) song to Congress, one is reminded that the one word that is not apt to be challenged about these "Babbling Bums" is INEPT !

So we had a dot-com bubble, housing bubble, credit bubble, gold/commodities bubble (still in). what's next after all the dust settles?

intl equities?
agriculture?
healthcare services?

2 weeks ago, I bought uranium (USU) at $3.45. I sold today at $5.00. USU is currently $5.14 and up about 25% today. I would like to hear peoples thoughts on uranium in general and maybe USU specifically. I think uranium is about to enjoy another big leg up after taking a year off. I bought USU because USU had not participated at all in the big rally from 2000-2007.

If the falure of a single investment bank could bring down the whole U.S. economy then Al Qaeda has a very simple roadmap for achieving their mission and the U.S. military might want to rethink the allocation of their defence spending.

Bill,
I would like to caution you about Stockcharts' price objectives. Chip Anderson wrote a piece about that and perhaps you should read it:

http://stockcharts.com/help/doku.php?id=support:chartwatchers

Also, please click the links in the article.

Determining the price objectives for for any stock is large task. That is because you cannot just do a mechanical projection with P&F. A human being needs to evaluate the price series and then make a projection based on numerous variables.

I therefore have some reservations about today's daily report…

The Word

[Bill Cara note: The Word knows! I need to better explain that forecasting prices requires professional work. What I was saying is that the StockCharts.com P&F-based targets were not unreasonable, but had I had the time to do more than a cursory review, I agree that I might feel otherwise, as for example, I said would undoubtedly be the case for $WTIC.

Alas, time is too short!! Maybe I can get an A- for effort?]

Did you hear that slip by? The prices of the assets that the Federal Reserve took as collateral for the $30 Billion loan were not the face value of the assets, but are the prices that Bear Sterns marked the assets to an March 14th. The Federal Reserve didn't do their own valuation, but took them at the price that Bear Sterns marked them to.........

SNDK over 26 . . . nice separation from 50 EMA on daily and thru the 13 SMA on weekly. Monthly chart shows RSI (31) has a ways to go if trend continues as well as nice up move similar to July '05. (Disclosure: Long)

Anyone know when the Mar book to bill figures are announced?

Quentusrex,

I am not discounting the people in congress etc. but this is so rediculous. the financial architects who created this mess to some degree are trying to engineer a way out, and the people who are trying to prevent this are asking the bad people for advice!

So Bernanke was relying on Blackrock's opinion for this deal!

And our tax money is paying for this?

NYU Grad....Add to list:

Farm Crisis of 1980's
Savings & Loan Meltdown
Collapse of Japanese Economy
Collapse of Russian Economy
Junk Bond Fiasco
LTCM
Y2K...Leading to Dot.com collapse

Yada....Yada....yada

Uranium

I had always been careful about being too bullish around my most greenest friends, because they believed uranium was only green based on emissions

Then I found this news from 2006 about Stanford and a bacteria that eats uranium, I can't find too much on it thats more recent, so unsure of commercial use.
http://news-service.stanford.edu/news/2006/may24/criddle-052406.html

My company is involved with IGL.V which has a uranium prospect at the high grade 27000 km2 Bahi Swamp in Tanzania. There is a bit of a land rush going on, many believe Bahi could be bigger than Athabasca in terms of production, particularly as it is believed production could come on fast.

Australia's UNX-ASX is near us, has drilled up to 9.3kg/ton, which is $1500/ton rock or 1% U308, though most grades coming in around 2kg.

that was awesome. a Senator asked the panel, "how can you (Fed and SEC) allow the financial markets get so fragile that the market couldnt even risk 1 financial firm's failure before a systemic breakdown?"

We have loonies running this show.

Sen. Bunning at least seems to not be buying the spin. Kudos to him

cyderman re Pinetree

"Anyone have any more detailed knowledge on Pinetree? Seems like it might be a good way to play the (eventual) turnaround in juniors. Chart currently not very pretty, but I'll be looking for a break of the downtrend.

Posted by: cyderman at April 2, 2008 9:10 PM"

I don't have a detailed knowledge of PNP.T; but if I were considering a position, I would check the balance sheet for debt/leverage before buying, as I have seen evidence and read surmising about PNP's occasional 'involuntary' liquidations; one example: perhaps - not sure - Geologix last aug when it traded down to $1.01 on very high volume.

I agree with the 'merchant banker for junior resources' theme however. One I like and have owned for several years is Endeavour Mining Capital, recently described by newsletter writer, Lawrence Roulston, as a 'brain trust' in this space. (Franks Holmes is Chairman of the Board; Giustra used to be involved).

writersblock/quintusrex - You are correct. I eMailed MBTrade for clarification of their notice and received this quick repsonse:

....................................
What this rule says is for deposits of funds in that we can no longer give
intraday credits to clients if their wire comes in for example in the middle of
the day. The customer will have to wait until the next business day to utilize
those funds.
.......................................

I give a whole-hearted compliment to MBTrade for their quick response to my question. I have also found Penson to be very good (so far) in clearing and accounting.

Thanks for all your replies. We're definitely eyes wide open on this fiasco. It's great that so many people see through their charades.

Now we just have to figure out how to stop them.

NYUGRAD,
What was the panel's answer to that question?

I'll bet it was a lot of hemming and hawing!!

My order for some FXP April 85 calls just got filled at 4.40.

Rob

scaling into short 100 MTH at 22.34

Fingerlakes,

The gentleman from the NY Fed Reserve bank tried to answer and said to the panels credit they have done many things the past 10 yrs to prevent this but the markets are very complex blah blah and Sen Bunning interupted and said something like "Dont waste my time and I have been here too long, way before you, and that is not the case. Not enough has been done and there were red flags everywhere for more than a year starting with the mortgage market."

joey,

Very good point on the cash vs. liabilities. The two I was comparing (Longview and Pinetree) looked pretty similar so I didn't think much of their low cash position. But quite frankly, compared to Endeavour, those other two seem to stink :|

Pinetree has (as at Dec 31) $66K cash and $86 million "due to brokers" which is basically margin. That does seem a bit worrisome.

Endeavor on the other hand has $42 million cash and about $8 million liabilities.

Seems if there is another leg down in the juniors Pinetree could be in a world of hurt, whereas Endeavor could scoop up some bargains.

Thanks for the heads up!

That's more like it. They need to hold his feet to the fire so he spells out exactly what's happening.

As far as the next bubble goes, I think it has to be commodities. As soon as we get through this last push for the market and the dollar, we'll have a regulation passed or a cascading failure that will break the credit ring for good. That's when people will dump bonds and stocks for hard assets like grains and metals. How soon it will happen is anyone's guess.

Maybe we should consult with Basketguy's Stock Monkey.

Rob.

Why doesnt national television televise this prime time? this is the best reality tv you can get, it impacts the people.

i am so sick of the general public being hypnotized by schemes like the stimulus checks.

It would be very easy to encentivise the public to vote on such matters as the war, BSC, elections, or anything. Every citizen who works gets paid. the irs has in place a way to collect money from us but no way of taking our vote?

Why not just tie our paycheck to voting? If you want to be an American you must pay taxes, but you dont have to vote on issues?

The fear of negative news in January when the tape declined 1% in 10 minutes on any bad new item has been replaced with the fear of performance anxiety. The market wants to go up no matter what the news. That chart of bullishness being the highest ever over 3 weeks posted last night is a sight to behold.

Democracy in capital markets: small investors are fighting back against big banks in Canadian ABCP mess and claim to have the backing of a US hedge fund.

Small investors decided to fight the Canadian ABCP big banks bailout plan (a plan that proposed swapping short term supposedly AAA notes into 8 and 9 years notes!). They hired a lawyer and the lawyer says a US hedge fund is willing to buy them and then sue the big banks for principal and damages. Lawyer was on BNN today.

The big banks control the majority of the funds, but small investors greatly outnumber the big banks (1,800 of them). http://shockedinvestor.blogspot.com

Zero Down for the American Dream
by Rep. Ron Paul, MD
June 22, 2004

http://tinyurl.com/2hgcxg

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

Pretty much every word of this letter is dead on. I wish more of our elected officials had heeded Paul's words instead of blindly following the Bush administration's push for no downpayment FHA loans.

I just received "Lessons From The Trader Wizard" from the UPS man here in Texas. It looks GREAT, I can't wait to dive in.

joey,
Let me endorse proudPapa's thanks for your "heads up". Got a lot of respect for Frank Holmes - no knowledge at all of Giustra. Nice too that EDV pays a divi. Definitely on my radar.

Shippers finally moving. DRYS leading.Buying TBSI lag. Chart nice too.

Is the recession over already?

NYU Grad:
Interesting comment from Bunning; but I would bet a sugar cookie that if someone checked his voting record, they would find that he voted with his "leader" (if anyone dare call Bush by that appellation) in furtherance of the Bush/Reagab mantra of "DEregulation, SELF-regulation and PRIvatization". He is our (Kentucky's) elected whore which should be a dire warning about electing people to public office because of how they throw a baseball (or other object). A real tribute to the collective intelligence of my fellow Kentuckians....along with McConnell !!!

2nd:

SMN/FXP/DUG: Is it time to add more or exit?

Adventurous types:

FXP

85s $3.30
90s $2.55
100s $1.30

Bought 90s today.

ronbon....

I resemble that remark!

I have an autographed BB from the only times I have ever seen him......as an elected official.

Now....that McConnell "thing"....oh, boy (sigh)

Si02,
I'm in on the 85's. A little early though at 4.40. It's my bet for a bad jobs report tomorrow.

Rob.

Given NFP & Unempl tomm morn premkt, and the lack of volume now, I'm doubtful buyers will remain after 2PM, and would expect to see selling into strength.

Central Sun Mining formerly Gencairn Gold up almost 10% today on 2x volume. I have been unable to find news that would account for such a move?
Disclosure: Long and wrong this stock..
ronK

Ah, and the VIX slipped below the 200 day yesterday but closed back above it. It's been sitting above it all day today...

Got my blog companion, "Lessons From The Trader Wizard" book today, thanks Bill!

The courier said that alot of those packages went out today around Toronto.

Skipping to page 257, since, coincidentally, I put a bid in for my first option today.

yamana gold ---yri -----------could any one comment on this gold stock. tradin around the $14.60 mark ----when can we see a dollad range of 17. and change?----- and of course likely depends on the price of gold. thanks russty

Alan Schwartz: "There are laws against manipulating the markets."

Seems like Smart Money feeling a bit squeemish about keeping this propped up into the 2 pm margin calls. Feels like they are positioned with one foot out the door already.

Beaten down UUU.TO is making a late day move.

jogyp- sorry, just got back to the PC (day job)...FXP/DUG/SMN-> fully loaded on DUG...may add to SMN if it continues to fall tomorrow, but o/w just watching for now...FXP- adding now at 78.05...

seamus- March SEMI book-to-bill will be out 4/16 or 4/17-> should be listed on the SEMI web site...

Smart money is watching the hearings and realizing that we continue to be a step away from financial Armageddon. There is a limit to nationalization, unless we want an American Weimar.

Dumb money is hearing that we were a step away and the government has ridden to the rescue - the ultimate Bernanke put.

If you are investing other people's money all you care about is whether you are outperforming or underperforming your peers.

Be careful with DUG - the administration continues to add to the strategic reserves, even at $100 oil, for no logical reason. Cheney was in the gulf meeting the Sheiks and Bush is meeting Putin soon. Next stop Iran?

Silver Wheaton More Than Triples Both Silver Reserves and Measured and Indicated Resources Year Over Year
http://tinyurl.com/22djn4

Nice leverage when Silver soars.
No position.

QT- Mark Hulbert (Marketwatch) had an article out yesterday saying TrimTabs is positing we're already six months into a recession, and are now on our way out of it...i think it's the kind of theory that may play well in print, but common sense tells me the Fed hasn't really come up with real solutions yet...where exactly is consumer spending going to come from? no HELOCs to draw from...i see evidence of tightening/job losses here in the Bay Area (SF city council is trying to cut high-salary positions/overtime for muni employees-> effects of the eroding tax base in other cities are being felt also)...my take is people have just started to tighten, and will be cutting back much more on expenses the remainder of the year...rebates? we all know the reaction to that solution...there's little disposable income-> i think it may be a long recession...

moab- well, if we're about to start (another) war in the middle east then all bets are off...

SGP- taking profits here for now...betting on a lower re-entry point...

Recession and credit problems over??

That's not what LIBOR is saying.

Yesterday 1 month and 3 month were 2.7 and 2.71

Today 1 month and 3 month are 2.74 and 2.73.

If credit problems were going away and banks trused each other again Libor would be falling towards the FED funds rate of 2.25. Instead it has been moving in the opposite direction since Ben cut by .75

Rob.

Canadian banks slap small investors back: "ABCP holders told they're welcome to invite vultures" (Globe and Mail)

Transportation Sector Woes

Work stoppages and road protests by independent truckers are spreading across the country as they haven't been able to obtain adequate fuel surcharges to cover rising fuel costs which have destroyed profitability for the group. Owner-Operator IndependentDrivers Assoc. reports they have 160,000 members representing 240,000 trucks.
Competion is also effeting the independents as large trucking firms get bulk fuel discounts unavailable to independents. Large companies are also able negotiate fuel surcharges from their customer base. Load brokers have been pocketing fuel surcharges they recieve and not passing them through to the independents..Current fuel costs for the independent are approx. $70 per 100 miles.

If fuel stays high and this protest continues to grow,it could possibly cause a serious disruption to the delivery of goods across America.Something has to give.

Also, two domestic airlines ceased operation this week. Aloha Airlines in Hawaii ( sorry Kaimu) called it quits after many years in business and ATA suddenly stopped operating yesterday.

"ATA said in a statement that the cancellation of a critical agreement with FedEx Corp. for most of the airline's charter business left it unable to offset exorbitant fuel prices.

That agreement gave ATA a significant share of the airlift contracts to fly military members and their families overseas, ATA said. FedEx told ATA that that agreement would end when the government's 2009 fiscal year begins in October.

"This termination is a full year earlier than the term specified in a letter of agreement between FedEx and ATA," the airline's statement said.

FedEx officials could not be reached for immediate comment."

Large airlines are cutting routes and number of flights, laying off personal, and relying on cash balances to sustain current operations.How much longer can they stay in the black with the rising fuel costs?

Auto sales are suffering due to current economic conditions. A recent comment by the head of GM's sales forecasting was incredulous... He claimed that he would not reduce his sales numbers for 2008 due to the effect of the pending tax rebates... while most polls show consumers will use this money to reduce debt. The money will flow to the bank or to the auto credit company to pay for the car already owned by the consumer, not for buying a new car.

It appears more inflation is ahead for the American consumer as higher oil prices continue to ripple through the economy. Oil demand is projected to exceed supply by 2.5m bpd for 2008.

It is doubtful the Fed can take monetary action to counter the price of oil unless it raises interest rates, which would further deteriorate the housing sector. As predicted, the Fed is trapped.

Further casualties in the transportation sector are likely.

Received my "Lessons from the Trader Wizard" today. Stopped work to have a quick look at it. I opened it to three different pages at random and each time I learned something useful.

[Bill Cara note: With respect to the current goings on in Washington and on Wall Street, all of us are "out of the room, out of the deal". But, all of us should be trying to take control of our own destiny, and, to help you do so, I provide some lessons.]

where can I buy Lessons from the Trader Wizard

"Bear Stearns could not be allowed to collapse because it could have shattered confidence in financial markets and caused lasting damage to the economy,"

I dunno, seems that the issues that pushed Bear Stearns to collapse is what should be shattering confidence. Does the fed expect their stepping in to prevent it will make everyone breath a sigh of relief? The crisis isn't the act of a bank going bankrupt, but what brought it to that point.

And I don't know enough about it, but don't all the liabilities and stinky capital ratios, or whatever it is that caused BS to fail, go right onto JPM's books? Was JPM so healthy they can take over the trash without skipping a beat?

Just had to vent at that little piece of the article. It's almost condescending to be told the crisis is the closing of doors rather than the garbage that lies behind them...

Vinod
Click the book picture on the right side of the home page of the blog.

vinod,

In the right hand margin of the Bill Cara site home page is an image of _Lessons From the Trader Wizard_ . Click on it to take you to an order page.

Here's another link to the order page: http://tinyurl.com/38z2kx

Norton850
Thanks i found it and ordered one

Ordering the book, if you live in the US, I think they'll refund $10 of the shipping charge.

``Absent a forceful policy response, the consequences would be lower incomes for working families, higher borrowing costs for housing, education and the expenses of everyday life, lower value of retirement savings, and rising unemployment,'' said Timothy Geithner NY FED Bank President.

Now these are all lies except rising unemployment at banks.

How are the insolvent banks being allowed to collapse going to lower my income unless I work for one of the institutions going out of business?

And, as long as I don't need to increase my borrowing, I'm set if the liar banks fail.

And if my retirement savings is in Gold or something like that it will be increasing if we let these banks fail.

The pure arrogance of these bankers is appalling. It's a ridiculous notion that we couldn't survive without them. All they are is money changers. What do they produce?? What value do they add to anything? They're just middlemen that don't need to exist.

Rob.

RonK:

Here's some SMC news from Pinnacle Digest:

Central Sun Mining Inc. (SMC) experienced a 6% surge in share value Friday along with over 40,000 shares traded. On March 28th they announced that the Nicaraguan Department of Environment has issued them full environmental permitting for the construction, operation and maintenance of the Orosi Mine Project. We believe this news to be significant, in respect to their potential moving forward....

I've been holding my breath on this one a while also.

PNP.TO
I did find it interesting that the NAV on Dec.31,2007 was 4.20. I would have thought it was much lower at that point in time.

for some reason i find the basing action in the USD for the past few hours creepy.

its as if something big is about to happen
in either direction in the next 24 hours.

C Note

Thanks for news.
ronK

can't remember who asked but BooksonBiz is discounting shipping for the book to $10 still.

Received the book as well today @ 4pm (Toronto), just in time for market close!! I received the $10 refund as well. Bill, looking forward to 'enter your mind' with this read.

Huh, Central Sun Mining Inc. (SMC) has one of the niftiest charts I've ever seen (for my amateur eyes at least).

The 200DMA forms the top and the 50DMA the bottom of what looks something like what I think is called a bullish flag pattern. And todays 5.6% move broke it out.

So break out from consolidation, breakout above 200DMA and moving average crossover (whatever that was called again :)

Anyhow, thought I'd share my simpleton observation...

What to do with the $600 tax rebate: buy the upcoming 3G iphone with faster internet access.
Said to be coming soon.

Interest rates:
Where does one find current interest rates? My mortgage is tied to " the weekly average yield of US Treasury securities adjusted to a constant maturity of one year" plus 2.75%. That goes into effect on Aug 1, 2009. Currently I pay 4.625. I have had it for 5 years. Just preparing for the change. I could not find these numbers on the Federal Reserve site. tia

peter grant: $600 - assuming that you've made less than $75,000.

stktrader,

Try this at bloomberg, mind you no moving averages...

http://tinyurl.com/df7c4

FingerLakes @4:14,

It is not that you couldnt currently survive without them, it is that they want to ensure that in the future you couldnt survive without them. Consolidation of control is the underlying theme here. As a controlling entity, these institutions do and will continue to exert tremendous force for socialization and social engineering.

MtnGntx,
I can see that. So, if we raise too much ruckus now, they'll drop the market another 20% and say

"See what happens!! Now let us fix it."

And we'll say, "Oh thanks Uncle Ben and Cousin Henry. What would we do without you watching out for us?"

Rob.

2nd Thanks for the semi book to bill date info.

P&F chart of $SPX Triple Top Breakout on Apr 1 still in place at EOD Apr 3.

http://tinyurl.com/2y4el

Problem, Reaction, solution... They create a problem with an anticipated reaction, and then step in at the right moment (when people are receptive) to provide the pre-deisgned and pre-desired solution. This methodology is very old, well-used, and very effective.

Thanks, stev1183, for pointing out the USU move today. I'll play "2nd_ave" now :) and try to capitalize on a market overreaction: I'll place a sell short stop order now a bit below its closing price, as I have seen too many times how a mining company (especially small-cap) would have a huge one-day rally and then go into a multi-day decline.

2nd_ave: is this something that you would do?

DavidV

FXP holders-> in the "know what you're getting into" category:

i would NOT take a buy-and-hold position in this ETF...try a 3 to 6 month comparison of FXP and FXI, and you'll see why...(as an example, the last time FXP closed at approximately 77 was december, when FXI was 170...today it closed again around 77, and where's FXI?)...use it as a hedging/trading vehicle only...

"december 31 is when FXP last closed at 77"

Download Larry Connors' Most Read Book "How Markets Really Work" FREE until Monday Night.

http://www.tradingmarkets.com/reports/hmrwf.cfm

2nd,
I was noticing that divergence today. I'm guessing their option positions don't correlate perfectly. Maybe FXI is too volatile to track that well.

I'm sure, with the jobs report, there will be a huge move one way or the other. I'm thinking it will be our way.

Rob.

DavidV- don't follow USU and would hate to give you meaningless advice...i did notice a 26% short float as of 3/11, which may explain today's move...and in general, i prefer the long side during short squeezes...

Thanks, 2nd_ave. I'll still try my luck with it tomorrow, since the short squeeze seemed to be over by the end of the day.

DavidV

FXP- today's close is the lowest since january 14, whereas the highest close was a mere 9 trading days ago...last time i saw this pattern on FXP was end of november-first week of december...if you bought bewteen 80 and 90 it should pay off...

DUG/SMN- all i can say is the sell-offs in XLE and XLB have been faster and harder than the sell-offs in gold...worth waiting for...

QID- early and wrong this morning...

jobs report-> looks like expectations range from (60,000) to 33,000...

from Barrons
http://tinyurl.com/36m5rx

Good article Vinod. Maybe Jim Rogers was right..., "I'll cover my shorts when financials are all at $8 a share"

For me, that wouldn't be an easy call to make when you are betting against the Fed who (somehow) gets to change the rules mid-game.

Fed had no option -

I read that the new bankruptcy laws exempts derivatives from bankruptcy stays = counterparties would have seized and sold Bear's derivatives.

This would have put market prices on them, and forced others to mark down LOTs of derivatives. This on top of Bill's description of the breaking of the credit ring.

Had the Fed not saved Bear, we'd all be in bigger trouble. The bankers have us all by the short hairs ... No reason to rant or rave; let's get ready for that trade of the century !

just posted this article from the washiton post
titled "perils in the price of rice"

really good but dangerous read.

http://jglobal.blogspot.com/

The Fed and the Treasury so publicly staking their reputations on the bailout to save the credit ring seems to raise their personal incentives to ensure the credit ring does not break. Because if the credit ring now fails, there should be a massive political backlash against the Fed/Treasury. The Fed/Treasury now must take any measure to protect the credit ring. Would this call into doubt the thesis that the credit ring will break and cause a temporary downward shock on commodities?

SteveC asked:
“Jim Sinclair's Gold Compendium and Technical Analysis CD
Can anyone help me get a copy? jsmineset indicated in December 2007 that they are out of copies and I could find no update when the second edition will be available. Thanks.”
Posted by: SteveC at April 2, 2008 9:58 PM

Steve if you give me your e-mail address I will provide you with an address where you may be able to obtain a copy. Also, I may be able to give you some other material.

Steve, I’ll only provide this privately.

This is Bill Cara’s website and out of respect for Bill, I will not post about JS here anymore.
Let me know. T3D

T3D

Thank you very much. You can reach me "noviceemail" at gmail.

Credit Ring to rule them all, Credit Ring to find them, Credit Ring to bring them all and in the darkness bind them.

Re: Credit Ring

The great curiosity of the Lord Of The Rings is that they had two towers.

The Grand Delusional Rally
Here it is the link of Barron's article about the rally in financial stocks. The one provided by Vinod (kudos to you for finding it!) seems to me that works only for subscribers.
http://tinyurl.com/399as4
The article suggests that the rally was propelled by the SEC thanks to the 'clarification' that "Companies should use market prices to value assets, even when markets are less liquid than normal unless those prices are the result of a forced liquidation or distressed sale."!!!
This is the perfect formula for HB&B! At least for now...

Bill,

I'm enjoying the book. Thanks.

Some early morning assessment on Kudlow and risk.

http://ronsen.blogspot.com/2008/04/warning-signs.html

Is anyone expecting a sell off in the US indexes between this morning through the end of next week? If not, then why?