Is the worst of the credit crisis behind us? The short answer is that nobody actually knows. However, the so-called stock/bond ratio serves a useful purpose of indicating to what extent safe-haven buying of bonds as opposed to stocks is taking place, i.e. telling a bit about the "language of the market".

An interesting poll has also been included with the post.

Here is the link: http://tinyurl.com/2jhbug

Enjoy the read.

The dollar will fall in coming years as the U.S. seeks a weak currency to boost exports and cut its trade and current-account deficits, said Paul Chertkow, the former head of currency strategy at Bank of Tokyo-Mitsubishi UFJ Ltd.

The U.S. currency will drop to between 80 and 85 yen this quarter, the lowest level since 1995, said Chertkow, who retired this week after a 27-year career in global foreign exchange. It will also fall to $1.65 against the euro and may trade as low as $1.70, he said.

http://www.bloomberg.com/apps/news?pid=20601213&sid=ax.CsVtZpoK4&refer=home

Good Morning.

Here are your Cara 100 Ratings Changes:

New Coverage:

CSCO - Outperform @ Friedman Billings

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

Other Stocks of Possible Interest:

AUY - Upgraded to Buy @ UBS

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

Have a good day and a better weekend.

jobs-> (80,000), unemployment 5.1%...

U.S. Lost 80,000 Jobs in March; Unemployment Rate Rose to 5.1%

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOyYQwHGdyyY&refer=home

And the market is poised to go higher? Whaaaat?

Damn the torpedoes, if the futures don't crash too much I'm taking new short positions this morning.

when Kudlow uses the phrase "US Peso", gotta think Goldilocks is either dead or on life support

Oh, and the proposal in the pending housing bill to extend the tax giveaway to the home builders is another scandal, Bill.

This is from an LA Times story on the proposal:

"The tax provision to aid the home-building industry would allow builders and other businesses affected by the housing slump to charge off losses this year and next against taxes already paid for the four previous years, instead of the two years currently allowed.

The provision was sought by the National Assn. of Home Builders, whose political action committee ranked third among PACs in contributions to federal candidates in the 2006 election cycle, donating $2.9 million, according to the Center for Responsive Politics. Since the 2000 election cycle, the PAC has contributed $11.3 million to federal candidates and parties."

http://www.latimes.com/business/la-fi-mortgage4apr04,0,2292612.story

Home builder executives have been the highest paid in the corporate America over the past five years. Does this mean they will be returning their pay and bonuses over that time period? Of course not. Socialize the risk, privatize the reward.

More on the billionaire at the head of Oracle:

Oracle's Ellison Wins Tax Cut on Home, Upsets Schools, Parents

http://www.bloomberg.com/apps/news?pid=20601109&sid=aTXIi2KNs.qI&refer=home

So, while state budgets are getting slashed nationwide as the economy heads into a deep recession, swine like Ellison and home builders are busy grabbing theirs.

n2s- give it a few days...wind's blowing the right way...january and february numbers revised downward also by 67,000...

bond yields down, probably on higher odds for another rate cut...

The weakness in last month's nonfarm payroll growth was widespread. Only education, government, mining and food services added workers in the month.
Manufacturing jobs declined by 48,000, the biggest drop since July 2003. Construction jobs fell by 51,000.
Jobs in services increased a slim 13,000, but retail jobs fell 12,000.
Government added 18,000 jobs in August.
Health care added 42,000 jobs, while the leisure sector added 18,000

above should be in quotations...

Not seeking sympathy ( I'm short, short, short), but how in the he-- does one trade if a calamity (jobs rate decline, unemployment increase) is "taken in stride" and the futures turn pink instead of bright red??

Can we assume the "market knew this", and it was factored into yesterday's anemic green close?

What was in the charts that I missed?

caution

My feelings exactly.

caution-> you didn't miss anything...recent market reaction to bad news has been exactly this-> give it some time, and the numbers will revert in your favor...you made the right call...

if 9 out of 10 players want to sell/short the bad news, who are they going to be selling to...

caution,

Obviously, the market averages are not reflecting the underlying economic indicators.

IMHO, the HB&B, with fresh money from the Fed, are propping this thing up, trying to extract revenge on short playing hedge funds, whom they blame for taking down BSC.

Reality will eventually return to the markets and I'm investing accordingly.

I share your frustration but believe that this blatant manipulation can't last forever.

Regards

Thanks...I'll join the dark side (temporarily) with part of the port and make some $$.

All one can do...

Yep, you're right as usual, 2nd. No need to rush into any trade here. I'm watching the charts, looking for those telltale divergences. Right now, the signals are not strong. Maybe that will change during today's session.

2nd nails it.....these guys are pros.
They don't all head for the door at the same time ala panic style on bad numbers. They all line up and sell slowly so as to maintain as much as possible of their profits from running the herd around this last couple of weeks.

Next thing you'll notice is you look down and suddenly we're back at 12000.

The initial reaction to the numbers was people like us...fast and with not as much capital to throw around. We are like sports cars, we all fit through the door. The big guys have WAY more to move and it takes time to get that much fat through the doorway. Let's give them some time.

caution -

I have great empathy...patience is truly a virtue and the flood of truth will eventually expose all the rats from their sewers.

reference my 911a post- should have asked, if 9 out of 10 shorts are expecting to cover on the bad news, how many sellers are there to buy (to close) from...this might drive prices up on the bad news...

At least the bond market and currency exchanges are telling the truth, folks. ;)

Craig--good analogy.

onlineaces--there are a multitude of rats; I'm outnumbered and outgunned

Investors may be greedy but they're not stupid. My thoughts are they'll try and push the rally a little more and then there will be a mad rush for the exits.

Maybe as soon as today.

The problem with that line of thinking is that all eyes are on Ben and company so they have to really prove they saved the system.

So they could keep it going quite a while if they really wanted to.

But, at some point, the reality of how bad the numbers are, and the fact that home prices still have a long way to fall will set in and then we'll see the mad rush for the exits.

Unless, that is Ben has some power to triple people's incomes so housing is suddenly affordable again.

Rob.

I'm probably totally wrong, but something makes me not go totally negative on pm miners at this point. Normally would be buying the general lot of them, though not voraciously, at this time. accumulating.

"But, at some point, the reality of how bad the numbers are, and the fact that home prices still have a long way to fall will set in and then we'll see the mad rush for the exits."

If the home builders get their tax break (see my comment upthread), then this will happen sooner rather than later as they sell as much land and inventory at pennies on the dollar. Look at what Centex has done recently as a model for this behavior -- a sale that yielded a tax benefit almost 2 times that of the total sale price.

I'm not arguing this shouldn't happen. Prices MUST come down. I just don't believe taxpayers ought to be underwriting this to the benefit of the people response for creating the mess.

Gee, as a very small homebuilder I can't decide whether to avail myself of these new tax loss rules or just mosey over to the discount window and get myself a fatloan to tide me over, no stigma of course

"Unless, that is Ben has some power to triple people's incomes so housing is suddenly affordable again.
Rob."

I find it amazing that with all this money around, everybody in the middle to lower class is going broke.

Bill:
Thanks for spelling out in plain terms how Paulson, the ring master, runs the circus.

Bill, There are significant activities taking place behind the scenes regarding the trade settlement system and potential for stock manipulation. That is good news.

I also want to point out to those who don't watch Jim Cramer that Jim is now jumping on our bandwagon regarding stock manipulation and a failing Regulation SHO. Take a look.

http://investigatethesec.com/drupal-5.5/node/268

If only the FED would lend to "regular" people like us.

N2son,
I agree that the prices declines could happen really fast. The faster the prices come down, the more people will walk away and the more of these derivatives blow up. The fireworks will be impressive. I'm trying to get puts on MBI for August and am thinking about puts for Jan on XHB.

Now it looks like the players are desperately trying to convince us the worst of the news is out so we take their long positions off their hands. Luckily bonds and Gold are telling a different story.

I still think we end down hard.

Rob.

Today’s sentiment report may explain what’s happening “behind the scenes”.

“The bullish percents help confirm what is really happening behind the scenes in the market. Prices have stalled a bit the last two days as the earlier big gains are digested, but the bullish percents have continued to tick higher. This indicates continued strength in the market that isn't showing in the price index.”

“The technical action of prices has been good as well as the 20-day was successfully tested and then prices broke above the 50-day. Argus made the point a few weeks ago that the most bullish technical action right now would be for the indexes to consolidate along the price lows for a while, building a base before moving higher. I completely agree and that seems to be what is happening.”

http://headlinecharts.blog.com/

Denny....

Has more to do with the value of "our" money.

Eggs and bread are the same it just takes more $ to bring them home.....

i think watching the market every day has a myopic effect,

even nortel had some big up days during its epic collapse from over $100 to under $10.

looking at the bigger picture was critical then to prevent traders from wondering why a company so clearly in the crapper would ever have a gain in the midst of a bubble collaspse.

Bought a little SDS. I'll give it some room to breathe in case I'm too early.

Some commentary by George Ure on today's job numbers...

Now, a nickel's worth of analysis here. First, the Labor Department let's on that there were really another 1.4 million people who were 'marginally attached' to the workforce.

"About 1.4 million persons (not seasonally adjusted) were marginally attached to the labor force in March. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (<--- Can you believe this??? -gu)

Among the marginally attached, there were 401,000 discouraged workers in March, about the same as a year earlier. Discouraged workers are defined as persons not currently looking for work specifically because they believed no jobs were available for them. The other 951,000 persons classified as marginally attached to the labor force in March cited reasons such as school attendance or family responsibilities."

Hand me the calculator and a bottle of Jack, please?

Add the admitted 7.815 million unemployed to the 1.4 million 'marginally attached that they didn't bother to count as 'unemployed' and we get 9.215 million, which on a workforce of 153.784 million pencils out to an RCH under six percent unemployment rate but it gets even worse because if you add the table A-12 (unadjusted) U6 (*Underemployed like PhD's flipping burgers) you get an unemployment or severely underemployed rate of about 15.3%.

And that's with a war going to keep the economy on life support!

Cramer is recommending FSLR. And it's approaching it's 52 week high.

Anyone for the anti-Cramer trade?

Rob.

Jim Cramer recommended First Solar last night (FSLR) as a buy. It is currently has a sell alert under the RSI method, but looks like it might reach its old highs again (before dropping again).

Still shopping ... just got a fill on SLW as it hit a pivot.

employment statistics mask state of U.S. job market

Over the past few decades, there has been an enormous increase in the number of people who fall into the no man's land of the labor market that Carroll Wright created 130 years ago. These people are not employed, but they also do not fit the government's definition of the unemployed - those who "do not have a job, have actively looked for work in the prior four weeks and are currently available for work."

Consider this: The average unemployment rate in this decade, just above 5 percent, has been lower than in any decade since the 1960s.

Yet the percentage of prime-age men (those 25 to 54 years old) who are not working has been higher than in any decade since World War II.

In January, almost 13 percent of prime-age men did not hold jobs, up from 11 percent in 1998, 11 percent in 1988, 9 percent in 1978 and just 6 percent in 1968.

http://www.iht.com/articles/2008/03/05/business/leon.php

I wonder what the true motives are for the FED to set-up shop within investment banks...

The US Federal Reserve has sent staff into some of Wall Street’s biggest firms and its New York branch is gathering evidence on key traders’ activities as America’s central bank raises its scrutiny of risk to an unprecedented level.

Fed staff have set up shop in Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Bear Stearns to monitor their financial condition just days after Henry Paulson, the US Treasury Secretary, proposed that the Fed become the financial industry’s “risk czar”.

http://tinyurl.com/ynmqmy

Out of MOS under 114. Will cover calls as price comes back to earth.

I have a color stochastic 1-min time frame column (shown in 1 min segments of color) in the desktop application software I'm using and these are the symbols that are often turning strongly green today.

IEF SHY TIP FXY SKF QID FXP SLV TLT IAU GLD SDS FXE TWM DXD MZZ SRS XLU DUG

Vadym Graifer

You can book profits today. I just got your "Techniques Of Tape Reading" book.

Still waiting on your book Bill.

to add to the unemployment math, small biz owners often do not subscribe into the unemployment insurance, so when times go bad do not have unemployment insurance as an option.

A beautiful B/O of a flag formation on RIG.

IYT and IWM are being stubborn, but QQQQ & SPY are weakening...slowly.

Correction: A beautiful B/O of a triangle formation on RIG.

Where's the coffee.

I think the phrase, "privatize the gains, subsidize the loses", summarizes Paulson's ponzi scheme with main street USA.

Justified by the trickle down theory, the big players will be taken care of while the citizens of the USA suffer. The government has subsidized lenders/bankers and are now discussing subsidizing the home-builders as well, who can be next? Certainly not average joe!

Corporate welfare is the greatest threat to our way of life, and few people understand it prevalence and scope.

How does increasing the home supply in an awful market help the everyday man?

Rick s. I thought it was "privatize the gains, SOCIALIZE the losses"

I understand that the markets are frustrating, it's part of the deal.

IT'S NOT THE NEWS THAT COUNTS, IT'S HOW THE MARKETS REACT TO THE NEWS!!!!!

Regardless of how today ends up, if you don't get the bolded type above, you won't be able to move forward as a trader.

As I posted over a week ago, the S&P has formed a double bottom, until it's broken.

The S&P is finding resitance at the 38.2% fib retracement and the prior two tops of the last 10 weeks or so which closely align with the retracement level. We are in a trading range...until we aren't. The 23.6% level is also working.

Stopped out of SDS ... flat. May try this trade again later today.

MELI noted the other day moving out of base.

Took break from training
and was told to watch S&P
if it breaks 1360 we go down if it holds we may go up

number2son wrote: "..So, while state budgets are getting slashed nationwide as the economy heads into a deep recession, swine like Ellison and home builders are busy grabbing theirs."

Pardon my ignorance, but why is Ellison a 'swine'?

Also, if Fed/State/Local tax codes makes an individual eligible for a deduction/reduction in his tax liability, what is wrong when he claims it?

The senate passing legislation to allow homebuilders to offset past taxes with present losses is another matter altogether ... but then these homebuilders have 'invested' in lobbyists, campaign fund donations, golf trips etc. This is called 'Return on Investment' - elementary!

The S&P resistance numbers have been:
1396
1388
1379

23.6 comes in about 1341

and the lows were:

1270
1257

Hence the working range.

g034, good observation with respect to SPX. A decisive move above 1380 and we go higher. It doesn't matter that the fundamentals don't support it, the technicals will. On the other hand, with every try at that 38% fib that fails makes that resistance stronger.

If I had time to watch the tape all day, I'd keep an eye on the 5 minute chart, looking for divergences when it makes that run. That would tell whether or not to trade against that test of resistance.

"Also, if Fed/State/Local tax codes makes an individual eligible for a deduction/reduction in his tax liability, what is wrong when he claims it?"

Check out the history of his relationship with the City of San Mateo. That should cure you of your ignorance. ;)

IMO, The S & P does not have a double bottom until it has broken resistance above...and that has not happened yet...

ALOHA !!

So what happens when small biz cannot get unemployment? THey file for welfare and food stamps just like the cronically unemployed who have run out of unemployment benefits.

Tax revenues are shrinking as welfare roles are expanding right when baby-boomers are suppose to be retiring and getting those big fat social security checks and cashing in on medicare relief from the high priced health insurance plans. On top of that we, as US Tapayers, have to also pay for a multi-trillion dollar "War On Terror" plus hand out foreign aid and also save the US Banks(domestic aid)! Our entire Nation is on WELFARE and the shrinking US Peso shows that the rest of the World is watching this and NOT BUYING IT!

What you can expect from the US government is much more false data to come along with much more market manipulation. After all the whiz kids inside the FED have the same charts we do ... plus some!

When the entire Nation is on WELFARE its called socialism not capitalism! We all know how well unending War and socialism worked for the Russians and the Ruble ... Welcome to the USSA!

g034

Is it possible that you could post your chart for us to view?
Thanks!

"As I posted over a week ago, the S&P has formed a double bottom...The S&P is finding resitance at the 38.2% fib retracement ....trading range...until we aren't. The 23.6% level is also working."

QT,

thank you, hope you enjoy it

You Capitalists You Are So Smart!

http://www.filedropper.com/images/capitalist.php

The average overnight return following a first-time recommendation by Cramer is 2.86% for our entire sample and 6.76% for the smallest quartile but these gains disappear (reverse) within several trading days. We also find that trading volume and short sales volume are all significantly higher than normal on the day following Cramer's recommendations. http://tinyurl.com/jpkqa

FSLR up 10% since Jimmy recommended it

setbacks? i try to embrace the setbacks, as they inevitably occur about 10% of the time in trading (as in life)...ensures humility-> if we forget, nature has its way of reminding you...

driving my port through the perfect storm this morning-> QID/FXP/DUG/SMN all down, along with TNX (DXKSX) taking a hit...no interest in adding...good day for sitting back and ordering a good lunch...

Couple of thoughts on this Fed bailout (yes the now call it a bailout)

Who won? The banks did. Maybe not Bear Stearns but the remaining banks. The Feds posted taxpayer monies to maintain stability in the industry. Stability that if shattered would impact each bank individually. With this bailout the banking executives were suddenly bailed from poor investment choices and their loss liabilities were mitigated. Suddenly low interest capital protected their firms revenues and in fact created more profit.

Where will that profit go? Directly into executive compensation packages. The Fed should be restricting executive compensation levels during this period of taxpayer bailout but they won't. We will see yet another $180 Million handed out to the top 3 of Goldman despite the fact that WE saved their arse.

In closing, I wonder what the real liability of settlement failures is now that we have learned that mark-to-market does not set aside the real liability when closure comes calling. There is $7 Billion in unsettled trades, mark-to-market, does anybody really think that those trades could be settled for $7 Billion?

My Comment memo to the SEC on all this;

http://investigatethesec.com/drupal-5.5/node/269

markets aren't as weak as you'd expect them to be - still range bound with negative tone - let's see what the afternoon rush brings...

I note with interest (Ha!) that my money market fund is now paying 2.5% where a short time ago it was over 4.5%

This is just one way I will be paying for this mess.

With fertilizer stocks like POT and MOS on fire, one may want to dabble in the juniors. A peek at the brokerage screen in front of me, named 'Account Holdings' shows:

API.V (+17% today)
RAY.V (300,000 acres in Potash country, just closed financing)
KCL.V

Watching:

RBV.V (just closed financing)
FOS.V

EDIT: API.TO

“Dilemma of a Gold Bug”

Many on this blog have extolled the wisdom of Bill Cara and how he has saved them or earned them money. I would like to offer a contrary opinion and how this blog may have influenced me to lose profits I might have gained. Let me first say that I have the utmost respect and admiration for Bill Cara and all he has accomplished with this blog, therefore I respectfully offer my contrary opinion purely in an effort to help the blog and its members grow.

With respect to the precious metal sector I would suggest that Bill’s calls for the last few months have been flat out wrong. I am going off of memory here because I find it difficult to search previous discourse to get exact quotes so there may be some errors. However, as I recall since gold first hit $850 Bill has been saying that it is the end of the gold run and he expects gold to correct to $725 or even $650. He continued with this call all the way to the top around $1030 and then when gold finally did fall everyone was claiming what a brilliant call. I am not so sure. It was obvious to everyone that gold was in a parabolic up move that could collapse at any time. However, my observation with the gold market is that parabolic moves are common and that if one applies typical modes of technical analysis for calling an interim top that it is likely that a large part of the up move will be missed. I believe that Bill and those that followed his earlier advice missed the big part of the last gold move and are yet to be in a position to buy back at the price they sold.

Now the latest prediction is for gold $770, silver $14 and $XAU 128. I know there are alternate targets proposed but these are presented as entirely possible according to Bill. In my opinion these targets are too low and when I look at the long term charts I would pick gold $850, silver $15.50 and $XAU about 150 as the worst case scenario. These are points I would identify as the breakout points from the latest big move up. Previously, in other corrections this has been the point at which the correction lands, which is usually near the 200 day moving average. However, it is also possible that we have made a low in this correction and we are starting a new move up. I think a case can be made for this argument, and there are some published articles suggesting this scenario.

So here is the dilemma I struggle with and wonder if there are others out there that also have this struggle. I am a simple retail investor who has followed the market in a cursory way while working as a research scientist for 15 years. I am in awe of the knowledge of the markets that Bill clearly commands and am grateful to have learned all that I have about the market by reading this blog. My problem is I develop such lack of conviction of my investments when I hear Bill’s bearish analysis of the PM sector. How can I possibly maintain my convictions and view on the market when it is contrary to Bill’s analysis? Not for a moment do I believe I can make a better call on the market than Bill. Quite honestly, my confidence is shattered when Bill says silver is going to $14 (truth be told I am actually one of those “crazy silvers”). This caused me to sell some of my silver holdings on the way up and a few days ago I panicked out of my long futures copper contract when Bill repeatedly stated that commodities are going down. Thus, I end up losing some of my potential profits.
It could be suggested that if reading this blog causes me to lose confidence in my investment decisions to just stop reading it. Although it is a possible solution I also feel like a great deal would be lost. This is a very unique place where an outsider in the investment world gets to listen in on the conversations of true trading pros. To hear maromatics, fransix, and g034, just to name a few, opinions on the gold market is simply amazing. Additionally, the wealth of knowledge that Bill shares is incredible despite the frustration I have personally experienced with his gold calls.

Finally, I have learned that investing is a very emotionally charged sport. As much as I love reading this blog there are times when it fuels the fire of my investing fear, from both Bill’s comments and others on the board. I suspect that part of my evolution to becoming a successful investor is overcoming the fear I experience. The hard part is trusting my own analysis when so many other “wiser” and more seasoned investors have differing points of view. I wonder if there are others with similar experience or some with advice on how to manage my dilemma. Thanks to everyone for their contributions.

Have a great weekend!

[Bill Cara note: JesseSLC, I have to thank you for a couple reasons.

Firstly, you had the intellectual honesty to say up front that you are not a trader, but a “gold bug”. Now had you made your remark on a day when the price of gold was DOWN, you might have both my hands clapping.

Secondly, and most important, you spoke your piece in a way that made others in this community THINK, which is all I try to do. I don’t profess to be perfect, or even a guru, but a teacher and a student among mostly students and a few other teachers. I enjoy contributing and I enjoyed your contribution, which goes to show what a blog can be, which is an effective many-to-many relationships-based communication tool.

I do wish I had more time to participate, but the truth is I did not check into the blog all day until 5:00pm ET. What makes me happiest is that you did your thing and that you received so much respect from the other frequent participants here. That speaks to my hope for social equity. Thank you everybody.

Now, I’ve had a long day. Time for a glass of wine. JesseSLC, I wish you were here so we could enjoy it together. Well done, my friend.]

"The hard part is trusting my own analysis" -- I couldn't agree more.

2nd: Enjoying the same weather here....if it weren't for ESLR (Thank you Vinod) and a little MU I might just head for the ditch and enjoy a picnic lunch.

If we break 1380 and hold all bets are off and I'll have to add to a few longs and look for better short entries next week.

Keeping an eye on IEF/XLF and the S&P as my tell.

Bill,
Received your book today, looking forward to reading it.

JesseSLC, I would simply say read this blog for knowledge, but trust your instincts and your own analysis for your own investments.

The truth be told no one knows what will happen we can only trade probabilities.

If you continued to be influence by other’s here to your detriment stop reading and follow your own research and conclusions.

To me with blogs like this is that everyone’s risk tolerance and time horizons are generally different. Good luck.

jesse - first of all thanks for being honest...I struggle with the same psychological issues when it comes to investing, and looking for a more authoritative opinion is natural. You should see my RSS reader! Bill's most important message is that you need to learn to think for yourself and that the market is not quite as free as you expect. If you are looking to make 100% of every move, good luck. There are way too many questions and way too many variables to consistently do such a thing. Fundamentals, technicals, sentiment, etc...no one has the answer.

However, I would disagree with you: Bill did not cost you money. No one told you to listen to him. Bill has been wrong, and will continue to be in the future. So will all of us. Your goal (and mine) is to be RIGHT MORE OFTEN THAN YOU ARE WRONG.

Rule #1 is to not lose money, and it sounds like you did not from the trade/investment that you made. Return of capital is always more important than return on capital, and you got 100% of the more important one.

Leisa had a great post today on her blog, that linked to a paper written by the guys who wrote Triumph of the Optimists, the perma-bull bible. The title? Irrational Optimism. They state that looking at the US for 75 years is not nearly enough data to predict long term, buy and hold success. Look at Japan! The average global returns for over 100 years puts the yearly gain at something like 5%, with alot more volatility and risk than many would be comfortable with. That's how hard it really is.

Now, if I could take my own advice....:)

jesse- could be that bill struggles with his own dilemma, which is an audience with varying time frames and risk preferences...if you zoom out to the big picture, his scenario has basically played out...the last two calls i specifically recall him making were buying XAU at 120 last august 16th, and then selling gold/miners/commodities into the 'last act' of the bull market, as these sectors top out...the gold market is so volatile that you may have more success with dollar cost averaging entries and exits?

JesseSLC,

One thing to consider is that Bill tends to be "early" in his predictions for a good reason -- if I was following him and he was bullish on gold, then turned bearish the day it turned the corner, I probably wouldn't read it in time to avoid the downturn. He tends to give advice for people with fairly large trading horizons, just because of the nature of the audience (I don't think I've ever heard him suggest on this blog a trade that would be held for less than a week, for example...perhaps even a month).

I mean, I think there are people here who only read the WIR, so for Bill's advice to be useful to them, he has to warn of possible changes far in advance. He doesn't typically call tops, but he'll tell you when he thinks that downside risk has become significant over the coming weeks.

On a side note, I assume I'm not the only Utahn here. :)

-Jeff

DavidV- looks like your USU trade worked out...

So, FSLR hit a 52 week high today and DUG hit a 52 week low.

Ben is living up to his promise of growing our 401K's. Remember our retirement would have suffered if they didn't save Bear.

So, are we to assume that he'll follow through on his other promise that commodities, mostly oil, will come down? If so, DUG would be a good buy.

When are the meetings on interest rates in Europe? Next week. If they lower that lifts the dollar and hurts commodities. And that will be just in time for the PPI and CPI report due out the week of April 14th.

These events would also help the market reach up to the 200 Day moving averages by the time PPI and CPI come out.

JesseSLC:

Reading your words of frustration reminded me many times of similar feelings experienced generated from Bill’s blog over the past several years.

At first I felt every word written here had to be read as well as every link explored and sometimes I found there was little time for performing the trade on the market correctly.

Some days the message found here is so clear; then later, down stream a few more days, you read and feel as though you missed a sign post, maybe you’re not on the right path anymore, you missed a comment, a nugget of golden words and something is sucking profit from all the hard work you have applied to your portfolio.

My answer to a portion of your post is the in the word DANCE. You need rhythm to dance and I find the tune here once in a while and do exceedingly well but not all the time and when I don’t it’s easy to blame Bill .. like jumping out of oil toooo soon, KRYing toooo much, then there was MU and those words ‘it ain’t a broken company’ etc. and he got sick and the computer problems … during these times I found my dependency was tooo high and self confidence tooo low for the rigors of daily market grind, that’s when I started dancing on my own.

Slowly letting go of Bill’s hand and some of the others posters and gliding on my own more and more but still tuning in here to see if the music met my style, my needs; if not, watched my fortunes like a hawk and stick with the horses you know.

Bill taught me about the jockey and I fill my stable carefully with some of the horses they have ether ridden or ones they have pointed to in passing.

From time to time I put them back in the race for a few days, weeks, or months and when they ‘Buffett’ out they are rewarded and put to pasture for R&R until next race cycle.

OOOHhhh please don’t read me wrong, Bill has shown me how to fish and most of all, how to dance in the market and .. by myself sometimes.

Holy Cow on the FSLR 52-day high! Very luckily I bailed on my idea to short it last week at $228 and covered at $230 the next day when it wasn't acting as I expected.

I still think this one has a nasty decline in the longer-term.

Is it plausible to think that when JPMorgan bought BSC that along with the deal came a number of positions in various equities that JPMorgan used in order to cover its own short positions?

This would have allowed JPMorgan to cover a large amount of short positions and at the same time leave very little stock available to the market - allowing it to be driven up on little volume.

Has anyone seen any articles suggesting this may be what is going on?

Washington Mutual is getting smoked for 10% today. That may be driving the selloff.

Hi,

Just a line to wish everyone a great weekend away from it all.

Cheers!

Hi JesseSLC,

I agree that it's easy to get emotional about trading/investing decisions. I've tried to reduce the emotional aspects by making sure my assets are well diversified (i.e. I hold long term core positions in multiple asset classes), making sure I'm not taking on more risk than need be, and by using mathematical models (like RSI, or price S.D. as shown in http://www.safehaven.com/article-6793.htm) to guide intermediate term trades around my core positions. I tend to make changes to my long term asset allocation about once per year, and use commentary from Bill, John Hussman (http://hussmanfunds.com/), and Jim Puplava (http://financialsense.com/) to help guide those changes. I also use simple technical analysis to help confirm the commentary.

I hope this was helpful.

RH

Omigosh, I missed a classic divergence in the SPX 5 min. chart. The day job will do that to you.

Anyway, here's hoping a few other traders caught it and have rode it down from 1380.

Actual, WM is not alone. Several Savings & Loans are down big, such as FED and NCC. There is tremendous two-sided risk in this market.

number2son,

You're not alone. That voice behind you yelling "WEEEEEEEeeeeeeee!!!!!!!!" is me.

Guys,

This might be the news that sparked the sell off:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0KG6bCua6os&refer=home

From the artible:
"MBIA Loses AAA Insurer Rating From Fitch Over Capital (Update2)

By Emma Moody

April 4 (Bloomberg) -- Fitch Ratings cut MBIA Inc.'s insurance rating to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking.

MBIA, the world's largest bond insurer, would need as much as $3.8 billion more in capital to deserve an AAA, New York- based Fitch said today in a report. The outlook is negative, Fitch said.

Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures.

``It will be difficult for MBIA to stabilize its credit trend until the company can more effectively limit the downside risk'' from collateralized debt obligations, Fitch said in the report.

MBIA's long-term rating was cut to A from AA, Fitch said. "

Thanks everyone for the comments!

Robd: let me be clear. I do not mean to imply that Bill caused me to lose money, or potential profits. I know I am 100 % responsible for all the decisions I make in my life. I am just trying to express how Bill can influence the psyche of an amateur investor. One thing I have learned from Bill is that it is an insiders game. He is (or was) an insider. He doesn’t need to play by their rules or work with them (probably never did) to know what they are doing. He can watch from the outside and know what they are doing. So for me it is like the story he told of riding the subway to work and everyone saying that “such and such” is going to be sold like crazy today. Then he got to work and sure enough everyone was selling.

Now, back to gold. What I am trying to express is how difficult it is for me right now to have an opinion that differs from Bill on the price targets for gold and silver. My analysis tells me that $14 silver is too low but if it is really going there I don’t want to ride it all the way down and see all my paper profits evaporate. But only a fool would trade against the insiders, or knowledge of the insiders activity. So this is my struggle. My own analysis, versus what apparently the insiders are doing. A few have suggested time frame and risk aversion, I appreciate those aspects, and realize that in the longer time frame higher gold and silver prices are consistent with Bill’s view. I know no one has the answer for me, I have to figure out what works in my own situation, really just voicing a frustration and wonder how others might deal with something similar. And after just checking again, getting some very insightful commentary. Thanks again.

Jeff- you know, “it still is the right place” ;)

JesseSLC,

I empathize with your frustration.

What I value most about this blog is the generally articulate discourse among participants interacting with Bill's experienced and straightforwardly presented read of market circumstances. I am often wrong in conclusions I draw from this and other inputs but Bill's strategy has helped me minimize damages occasionally done to my portfolio but maximize profits when they occur. I have found that the best stance for me is one that applies Bill's methods to a discontinuous context depicted in Nassim Taleb's depiction of markets (_Fooled By Randomness_, _The Black Swan_).

I tend to be an intuitively biased person, meaning that all too often I try to get by on gut feelings derived from inference. Bill's methods have helped me develop and rational data-driven counterbalance to my native, often wrong-headed, convictions about what seems to be going on. I know of no other place on the internet that could have helped me develop new approaches with so little painful overhead in the inescapable learning curve.

Like you I have tended to focus in the relation of precious metals to developments in the markets at large. Usually I have found Bill's call to be prescient but that my timing tends to be too early and opportunistically driven. I've missed a lot of profitable possibilities by acting too early. But I assuage such regrets by recalling J. P. Morgan's comment, "I made all my money by selling too early."

I'm still ahead of the game, although not by nearly as much as earlier this year, but my recently shaved profits I regard as tuition well worth the insights gain. Not only has Bill's blog help me learn to fish, it has also helped me realize that knowing when NOT to fish can be just as important for one's longevity in the markets!

Good luck to you, JesseSLC, and to Bill and all the other participants on this wonderful blog and thanks to you all for so cogently sharing your experiences.

Well they didn't shake me out of FXP.

But I didn't get my MBI puts or the DUG calls I wanted.

It will likely be too late for MBI on Monday seeing as Fitch is swinging the ax.

But I'll bet I'll get my calls for DUG Monday.

Cheers everyone. Have a great weekend.

Rob.

JesseSLC, A few thoughts:

In my evolution as a trader, I've noticed that I've gone from being a binary thinker to seeing more shades of gray. I used to think about trading as being "all-or-nothing", I'm either long, short, or flat, with no in between.

I've since grown into understanding the value of scaling into positions and letting the market tell me if I'm right or wrong.

Take sliver in particular, since you've described the analysis you've done and contrasted it with Bill's analysis. I have no idea (and neither does anybody else) whether either of you are right. But that doesn't mean I can't trade both your ideas. You've identified places that you think are support. Figure out how much of a position you want to take to represent your "full position". Now figure out a trading plan that will help you trade around that full position.

One strategy would be to plan to scale in and buy 1/4 of a position a little ways above the entry point you've identified, another 1/4 halfway between your entry point and Bills', and the final 1/2 at bill's entry point with a stop below it.

Another way to trade it would be to take a full position slightly above your entry point with a relatively tight stop, then be ready to get back in at other areas of support you've identified between your support point and Bill's if you're stopped out.

The tactic that I have found most satisfying is to identify points of support and go long a full position just above that support, with a stop fairly close below the support (what "fairly close " means has to be learned by examining how the particular instrument has traded around previous support and by good ol' trial and error). Then, set some targets so that you're scaling out of your position as it moves in your favor. For silver, take off 1/3 of your position if you get a $.50 move in the futures contract, and another 1/3 if you get a $1.00 move. As soon as you exit the first 1/3, move your stop to breakeven. You've now got a "free trade", which is very liberating from a psychological perspective.

For the last 1/3, let it ride. Wait until you see a definite break downward to sell it, or use a large trailing stop (I sometimes use a 2 day trailing stop), depending on your outlook, or use some sell signal (like RSI(7) breaks below 70 after being above 70). If you think it will run for a long time, or you're looking to treat it as a long term position, don't move your stop up. If you're trading, look to exit into strength or move your stop up.

I found that once I get myself to exit part of my position for a profit and letting the rest ride with a breakeven stop, trading became a much more pleasant experience.

[Bill Cara note: Please see the addendum I posted to the JesseSLC discourse posting today at April 4, 2008 1:30 PM]

38-STEPS TO BECOMING A
SUCCESSFUL TRADER

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

Steps to Successful Commodities Futures Trading
as published in Commodity Futures Trading Club News
and in Traders Organization's Real Success Daytrading Course

1. We accumulate trading information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more trading information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

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

Many Traders Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate. We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

from -- http://www.commodities-futures.com/

2nd_ave: when I woke up at the market's open, I saw USU shoot up and then stay flat for some time. So I didn't short it, as I didn't see an immediate decline at the open, and I went back to sleep. :) Now I see that shorting it at $6 would have been a profitable trade, but I didn't want to take my chances and wanted to short it only if I saw an immediate decline at the open.

However, before going back to sleep, I followed the advice you gave last night and bought a double portion of FXP at the open (twice what I would normally buy when I open a new position), and while I was at it, I sold May FXP puts for the same number of shares at the strike price of 75 for $7.8 each, so that if I am forced to buy these shares, I'll get them for $67.2, which currently seems like a bargain price for FXP. And if they expire, then I will make 7.8/75>10% monthly return on the cash I set aside for FXP, which is also not bad. :) Seeing the weak unemployment numbers gave me some confidence in this, of course.

Just been reading a short article by Martin Pring on his website,entitled "Ingredients for Mania"
'The Bubble Bursts',particularly poignant to me,Stage 5 onwards.

http://tinyurl.com/4ocw5j

I am not sure if this has been posted yet. Just a great undressing of LEH alt-A situation

Mr Mortgage Exposes Lehman ALT-A

http://www.youtube.com/watch?v=tebO2v3qBVY

[Bill Cara note: jfs, you beat me to it. Actually if I had TypeKey working, I would have already recommended everybody watch this. I understand that 25% of all mortgages in the US are underwater. That's a frightening scenario. I think the banks and the Fed have to give this one more shot before precious metal prices zoom. This is 1928-29 all over again.]

A 16.5% drop in gold production out of South Africa will impact gold supply and improve fundamentals...

The mining production output for January 2008 was down 10,7% when compared with figures for the same month last year, owing largely to the electricity supply crisis that led to mine shaft closures, with gold production in particular feeling the effects of these closures, reports Statistics South Africa (Stats SA).

Stats SA reports that gold production decreased by 16,5% for January 2008, compared with figures for the same month last year.

http://tinyurl.com/3unk9b

Hi again,

Off topic, just for weekend fun and to put a smile on your face.

I wanna be a rock star...

http://youtube.com/watch?v=vL-HSzYZqXM

:-)

Cheers!

Wow! all the replies to my query were incredible, some very insightful nuggets. A true testament to this blog. Thanks to everyone, there are truly quite a few “trading pros” that hang around this place willing to share their wisdom. And Bill, thanks for your comment as well. It would be an honor, as I am sure all here would agree, to share a glass of wine with you.

Jesse,

We are all students of the market.

But most of all, we are learning to know more about ourselves, our emotions, our greed, our fear and what we really want from life, which may not be exactly what we think it is.

Keep cool as a cucumber, stick around, and join us for a very interesting ride: the ride into yourself.

Cheers!

Maro,

Thanks, a very shiny little nugget from you. I'm working on that cool cucumber thing. :)

JesseSLC

You got me thinking of my own situation and frustration with having sold gold way too soon. I didn't go back to see when Bill got negative on the POG and was calling for a major pullback before it took off again. All I know is I closed my gold futures in mid July 2007 and saw gold continue upwards another 28% or so to today. But in researching when I sold gold, I looked at my July spreadsheet at what else I was holding that I also liquidated over the next couple months. Suddenly I don't feel as bad when I see what happened to these juniors in the last 9 months (all Canadian symbols): LRG -60%, KRY -51%, MOR -27%,NUS -42%, WGI +4.2%, LAM -69%, GIX -24%, VAL -60%, CNU -78%, CZZ -39%, WHY -46%, AZM -64%.

So by following Bill did I miss some profits on gold? Definitely. So by following Bill did I miss some losses on juniors? Definitely. So by being too cautious and having too much in cash have I missed opportunities in the market in general? At 3:40 p.m, April 4/08 the answer is yes. Am I upset by those missed opportunities? NO. I am very comfortable with being positioned such as I am with a high percentage of cash and using a short term approach to taking trades and taking quick profits and even quicker losses.

But if it all "hits the fan", I want to be ready both financially and mentally to make the correct moves at that time. That, I believe is what Bill is trying to teach us. Sure it's nice if Bill writes ". . .drop some chips on VZ at $33.82, then . . . write the July 30 puts for about $1.50+ and the 27.50 puts for about 80 cents."
But individual trades like this are just gravy. It is teaching us THE DANCE that is so important. It's teaching us that even though we may "think the world is going to hell in a hand basket" (from same paragraph as VZ quote from Mar 16 WIR), you have to be able to see that a stock like VZ could go up even if we think everything else is going to go down. Or that XOM could go down even as oil is powering up to $110.

Since Bill wrote the VZ strategy on Mar 16, I have used it on other stocks that looked like they were bottoming, at least short term. Using the buying stock/writing puts or simply writing puts has made me more money than anything else I've done in the last while. Even if I breakeven or lose a small amount, it is building my knowledge as to how I want to structure my trading if/when it "hits the fan". By learning how to use options it is allowing me to keep in the game but have the bulk of my funds "safe".

Over the bulk of the last year I would say the main interest on the blog has been trading gold, PM stocks, and lately daytrading. It took me a long time to see that the "gems" were not nuggets of gold in the ground of Geologix, but what Bill wrote in his WIR and commentary after the different sectors (health care, consumer staples, etc.). I believe I could have made way more by paying attention to what he wrote there, than by concentrating on what he was saying about gold.

And though I'm a long way from competing on "Dancing with the Stars", at least I'm starting to get the rhythm.

Re: Lehman Alt-A

They expected these mortgagers to become drug dealers.

I say this because I just watched "Cocaine Cowboys" for the second time, about the Miami Drug Trade. You have to wonder if the drug trade did not have a seminal influence on politics and economics so much so and for so long that it eventually became the fundamental metric that success was measured by. Surely real estate is a big factor in laundering money.

http://www.moviesfoundonline.com/cocaine_cowboys.php

Re: Gold fundamentals

Have so much time to watch the fundamentals because my investment in a junior precious metals exploration company has not moved in quite some time.

The fundamentals say that I'm well positioned, just doesn't feel that way. Most investment advisors lose sight of the fact they operate on inferences, so take what anyone says with a grain of salt. Its like technicals on a chart. 50% right at the best of times.

Story goes that ETFs are soaking up all of the investment capital right now, and this is why money is not going into precious metals explorers.

http://sec.gov/comments/s7-19-07/s71907-403.pdf

Is it possible to find out who all the bond issues guaranteed by MBIA?

Surely, they will feel the impact of this downgrade. One guess would be Washington Mutual WM perhaps?

JesseSLC -

From one gold bug to another.

I'm like you in that I come here to learn and very much appreciate the valuable insight that Bill and others have into the market that I do not possess. The interaction (social equity) here is great too and you don't ever feel like you're are sailing alone across the vast wide and treacherous sea we call the market.

I'm a gold bug too and was fortunate enough to start buying quite a while ago and even then gold was volitile and scary. I'm not an alarmist or a sky is falling kind of guy, but I AM a realist. I know things can go either way at any time. I buy gold not so much as an investment, but more as an insurance policy. In fact, I'd like to see my gold holdings drop in value because that generally means the economy is humming along on all cylinders and gold will eventually find it's own comfort level in that environment somewhere. But it is simply a hedge against my more optimistic investments.

I don't trade gold itself (or silver). I buy and hold them for the long term and if they go down from where I bought, so be it, I'm usually still happy. For trading though, I like the miners because they can (and often do) move seperately from the metal and since I follow gold, I study the miners even more and feel comfortable watching and trading them but leave the metal alone.

I've been expecting the recent cliff drop in price in the PMs for a while now and had adjusted my miner portfolio accordingly. Bill's numbers are a possibility IMO, but being a gold bug, I'll be buying more at around the 850 level. If it goes to 770 or even 650, I'll be backing up the truck. I don't see too much to be optimistic about in the near term economically and gold like I said always finds it's own comfort level eventually. Given my current take, I feel comfortable that it probably won't go much below 850 if it even does. But if it does, it will be a gold bug's dream unless there is a drastic (and believable) uptick in this economic environment.

The old saying is "keep 10% of your portfolio in gold and pray that you don't need it". My proportion is about twice that with the miners, but I agree with the sentiment completely.

And by the way, thanks for posting such a polite and thoughtful post.

Bill,

Sorry about the post post. Gotta love typekey. Sometimes it works and sometimes the gremlins grab it. Re: your comment, "This is 1928-29 all over again". In all my years of investing I have never seen anything so close to the brink as this. The canoe is right at the crest of the waterfall and the Fed & HBB are paddling as fast as they can to get back up stream. I have been going back over Galbraith's book and it is a scary senario unfolding in front of us.

Best. jfs

ALOHA !!

I'm up early here in Hawaii everyday at 4:30am. I go to bed around 9-10pm because of that early rise, except sometimes I have to "splash the boots at the porcelain" in the middle of the night! At times it ruins my sleep rhythum and I end up on the computer at midnight checking the access markets and ASX stuff.

SILVER LAKE RESOURCES-SLR(ASX)
I bought 50,000 shares of SLR(ASX)for $0.30AUD($0.275USD)yesterday. Silver Lake Resources is based in Western Australia where all their properties are. They are into production and have no debt and some $16mil in cash as they start up the old Daisy Milano Mine near Karlgoorlie, with some 2-5mil AU ounces. Its the same old story I try to follow, like PMI GOLD ... where past producing properties are purchased from distressed vendors. SLR plans to go into production with less than $1milAUD start-up.

I am moving into Australia and to be more specific, into the safest place on Earth to be mining, Western Australia. Home of the Perth Mint and the last great GOLD RUSH! I view buying mining and oil sector shares as holding "real money". The US Peso is backed by US government promises that are by now viewed as irredeemable by 100% of our trading partners. If there was ever any doubt, the doubt was enthusiastically vaporized on Monday of this week when our government gave the FED the go ahead to monetized private BAD DEBT! That means that the only way to own fiat insurance is to either own bullion directly or own certificates for bullion in the ground(which is what juniors and miners are). In other words GoldCorp shares are worth more than a US Dollar and are closer to a "gold standard" than the US Peso has been for over fifty years! A GoldCorp stock certificate may as well have "IN GOD WE TRUST" stamped on it! The last thing a US Peso or the US government "trusts" is GOD! After Monday, the US Peso may as well have "IN FRAUD WE TRUST" on each FRN. God was long ago thrown out the window at the US Treasury ...

JesseSLC ... It's a tough road!

My last gold buy was at $904USD, yesterday! My strategy has worked well for seven years ... BUY THE DIPS! I bought at $904USD, which is $126USD lower than the last high of $1,030USD. That qualifies as a sizeable "dip"! Did I time the dip perfectly? NO ... Will it matter when the POG is at $1400USD? NO ... As long as the fundametals for gold remain in place as well as the fundamental destruction of all global fiat then I will keep buying gold and PM shares on "dips". When I am not buying "dips" I am accumulating cash and selling "crap" I don't need any more. I'm getting rid of all the money anchors I own!

We are witnessing the collapse of the first fiat based World Reserve Currency in all of human history! Such an event will not be quick and easy ...

Hang in there and make plans to battle attrition ...

DavidV- nicely done...made no changes myself today, not least because i tend to spend fridays at the day job away from the desk...but fairly sure i would have done little anyway-> still holding DUG/SMN/FXP/QID/DZZ/HGD.TO as short-term positions, and DXKSX longer-term...took hits on 'em all today...as they are all ETFs, and purchased on (extreme) weakness, no worries about having an opportunity to sell them into strength when the time comes...enjoy your weekend...

Kaimu -

Silver Lake looks impressive. They have accomplished an awful lot since 9/07! And they seem very focused. Their strategy would seem to eliminate country risk AND greatly reduce implementation risk.

Did you meet with management? confirm their low-capital-cost production approaches? Do you think they can continue to find well-priced, past-producing properties?

Thanks in advance for any further thoughts.

http://tinyurl.com/6olptn
"After the early-morning report from the Bureau of Labor Statistics that 80,000 jobs had disappeared in March, the speaker of the House, Nancy Pelosi, said she would propose a second economic stimulus package. Hers would supplement the $150 billion in tax rebates scheduled to be mailed to millions of Americans beginning next month."

Can i email her my bank routing # and info. I would like my own discount window/bail out direct deposited.

ALOHA !!

Jock ... No I did not get a chance to meet management personally when I was in Perth back in Jan 2008. A GATA group I network with did have the SLR management give a presentation over lunch at the Subiaco Hotel. Most of management came from WMC Resources. WMC was taken over by BHP Billiton in 2005 for a song(my opinion)! The dance came later ...

Link: http://tinyurl.com/5wfjwp

Obviously these guys who now run Silver Lake Resources-SLR(ASX) cashed in and got to work on a new company. Here we are three years later.

Here is the basic presentation given at the Subiaco Hotel ...

Link: http://tinyurl.com/5orv54

Also as part of the PEOPLE TREE I like to follow, some of management has been with Golder Assoc, a company I know well from PMI GOLD and a highly respected wordlwide engineering group based in Canada.

I believe the focus now is production based on their existing properties and moving exploration deeper than the 100m past drilling ops.

All this is explained in their presentation that I have linked to above.

At any rate Jock, mining is at best an "educated crapshoot"! You really do not know what you have until you get to production, which is 3/4 of the battle! Fair dinkum, eh!!

ON PERTH AND WESTERN AUSTRALIA
I do not think you can get a sense of what is going on in Western Australia without being there. I know Perth very well as I lived there for six years back in the 1970s and have visited there since, many times. I still have many friends and network there. To say Western Australia is gold and mining friendly would be like saying the Pope is "Catholic friendly"! To give you an idea here are two articles that came out Friday about the nature of things there. I honestly think there is an equivalent of a modern day GOLD/MINING RUSH going on there at this very moment.

Kids are dumping University in favor of mining related jobs. When a waitress earns $60k and a an apprentice electrician earns $80k and mining labor is running at $120k ... its like the Alaska Pipeline. There is a critical shortage of labor. Demand is far exceeding supply in all areas. If I were in my 20's I would be on a flight to Perth. A greater place to spend my youth I cannot think of, since that is where I did spend my 20's! HA!! AHHH YEAH ... Bloody-O mate!!!

Here is the article about kids flocking to mining.

READ ON:
School leavers shun uni for mines
-------------------------------------------------
Friday, 4 April 2008

UNIVERSITIES in Queensland and Western Australia are failing to fill their student places as young people chase the big money of the mining industry, a national media report said today.

An article in The Australian said three universities in the two mining boom states had relinquished more than 1700 student places, suggesting school leavers were increasingly shunning higher education in favour of lucrative careers in the resources industry.(more)
Link: http://tinyurl.com/6kv2u7

Now look at this one ... A mini PDAC in the making?

WA shines as CME begins
-------------------------------------------------
Friday, 4 April 2008

THE biennial Construction & Mining Expo is off to a bright start at McCallum Park in Perth, with the Western Australian economy booming at 10% growth rate and the state’s construction and resource sectors showing no signs of slowing down.

The show, which runs until Sunday, has attracted the majority of the state’s major equipment dealers with a 40% increase in total display area compared to the initial show two years ago.

Today's attendance is expected to be primarily drawn from city-based construction and mining companies while the Saturday and particularly Sunday openings will be aimed mainly at the contracting sector.

The time pressure on people in the industry is behind the most dramatic change to this year’s expo: full weekend staging.(more)
Link: http://tinyurl.com/6q4grh

The rest of the World is collapsing under huge BANK FRAUD based on paper debt and here is the State of Western Australia like a "Little China" ... Well, they have what China needs! It's that simple ... Hard assets are the future trend not holding paper! Smart Money knows that and a visit to Perth is where you will find a lot of Smart Money. A drive through the suburbs of Nedlands and Dalkeith and down at the beaches and its fairly obvious there is a lot of new wealth being created and many foreign investors are moving in.

No, I am not paid by the Western Australia and the Perth Tourism Commission! I think its time "real wealth" got promoted instead of the "fake wealth" that exists here in America on Wall Street. I am diversifying out of the US Peso and its "fake wealth" ... I am clearing my stock portfolios of all resource companies that trade on USD denominated exchanges in favor of Australia(ASX) and Canada(TSX).

If you will notice when I bought SLR I used a US Peso which is temporarily worth more than an Aussie Peso or a Swiss Peso or a Canadian Peso. It won't be long before the Euro Peso follows the rest of the Pesos down the path of least resistance. Out of all the Pesos, you will want to hold the Pesos who have "real wealth"(resources)backing them either that or you will want to hold "real wealth" ... commodities, indirectly or directly. No gold is real money not a commodity.

Back to the basics of what wealth really is and I can tell you it is nothing that the US Treasury or Wall Stret has to offer.

ALOHA !!

A visit to Jim Sinclair's website and you are met with a host of articles and discussion on some ominous times headed for those holding US Bank assets and assets denominated in US Pesos. The US Treasury Hank-O-Rama Dog N Pony Show this week looks like it will have a short run. As Bill has said before these rallies are for the benefit of HB&B and their friends and families and not the Little Guy with his 401k!

I see MBIA is making news yet again. Like a bad flu it keeps coming back ever worse!

Nothing is "fixed"! $38.1 billion a day is not fixing any thing. It is hastening a fiat monetary collapse for which we Americans are the Fiat World Reserve Currency! That's how Empire is ...

Good reading Jesse's post re gold timing and Bill and other's response. I have the same issues raised by Jesse about following my plan vs. listening to someone I know is smarter than me. Time frame is real important. Since I've been accumulating in the gold sector for several years on the dips (like kaimu said), even if Bill is right it's not going to be a big deal, and I'd buy more. So my personal approach has been to make it a good thing whether it goes up or down. But if someone were getting into it now for the first time, it would seem frustrating. I take Bill's words as a warning from someone smarter, a heads up, but try not to change my accumulation strategy drastically.

Saturday Brunch: have a great weekend.Thanks for dropping by.

http://ronsen.blogspot.com/2008/04/saturday-brunch-fact-friction-and.html

Hope to get through Bill's book this weekend. So far so good.

Ron

Kaimu:

On the lead into the 3.5.08 NYTimes today find the following:

• NYTimes.com Homepage

QUOTATION OF THE DAY

"We had a lady in here on crutches, not a young lady either, saying, ‘I want to buy this $3,200 metal detector and a $1,000 power sluice.’ We tried to talk her down a bit, but she was dead set."
STEVE HERSCHBACH, who owns an Anchorage mining-supply shop, on the gold craze.

Sorry:
Incorrect date should read 4.8.08 Still getting over the March squeeze ;(

Sorry Sorry:
Got up to early date shoud read 4.5.08
I'm quitting this time for sure :)

Hi,

Below is the most educational and well made video I have seen a a very long time. Very much reccomend you see this:

http://www.youtube.com/watch?v=iYZM58dulPE

You go, Kaimu!

But as you take a final look back in farewell, consider this:

http://thefraserdomain.typepad.com/energy/2008/03/fyi-petrosun-to.html

The above link and following discussion refer to algae-to-biofuels.
There's a pilot project also in Hawaii run by Shell. My consultants are crunching the numbers as I type.
George