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Comments & Outlook

The $USD continues to sink and commodity prices are on the rise again today. For those of you who are long gold because of the destruction you see happening to the USD, I worry that you have made a grave timing mistake if you have any margin against your positions. At some point, your margin will be called.

I have repeatedly opined here that the economic and financial problems of the world are not contained to America. Inflation in countries like China and Russia, among so many others, is very high. The US data is alarming.

The fact is that, without higher employment, income or savings levels, consumers can no longer pay these high prices. Corporations no longer have pricing power and are facing lower orders as well as higher costs, leading to more lay-offs. The rate of unemployment is growing in almost every country.

As economies slow and shrink, taxation falls and yet expenditures are not falling, and so deficits are rising. Social programs are failing. Food riots have broken out in many countries.

The next shoe to drop, in my view, will come when British, European and Japanese banks admit to the same $1 trillion in write-downs that American banks will make before this crisis is ended.

In fact the very word ‘write-down’ is an insult to our intelligence.

Without a write-off, these terminally ill assets are staying on the books so that Liar Bankers can have Mom & Pop believe there is a hope of recovery. When people and companies disappear, and no one wants to or is able to buy foreclosed assets, those assets should be written off, not down. However, a write-off would sink the capital of many banks under the reserve requirements, making it insolvent. Governments will then be required to bail out those banks because no other banker has sufficient financial strength to take on the liabilities of banks the size of Northern Rock, Bear Stearns, Lehman Brothers, Merrill Lynch, Citigroup, Wachovia…

Here is the problem in a nutshell. It’s called the deposit multiplier in reverse. For every trillion dollars in write-offs, many trillions of ‘money’ is destroyed. Bankers, then, cannot meet their obligations to depositors who demand the return of their money. This discussion at Wiki, particularly the tables, may help you understand the problem.

Taking in the big picture, I think the world has reached a crisis not dissimilar to 1929-1932. The G-7 central bankers and finance ministers know it and are keeping the reality from causing a run on banks.

When the banks in the UK, Europe and Japan start to sink, and they will because the problems at Britain’s insolvent (and now nationalized) Northern Rock mortgage bank were not isolated, the Pound, Euro and Yen currencies will sink against the USD, crushing commodity prices, bringing them into line with the ability of Mom & Pop to pay.

At the end of the day, I believe there will never be a case of global stagflation that doesn’t result in a massive destruction of debt and equity capital prices. This time (2007-2009 or longer) is no exception.

Here is the bottom line: Those of you who have broker margin and banker demand loans and short-term loans under say 5 years are at great risk to losing the associated assets unless you quickly pay off those loans or switch them to long-term loans. Long-term loans at low rates are fine to those who, under any possible scenario, will be able to meet the debt service.

If you are a trader, you must be a day trader. Else move your money to a safe place, with a balance of various international currencies and gold.

I recognize that only day-traders, and not all of those even, welcome these words. Most of you will not pay heed to them.

In Wednesday’s Daily Report, I wrote:

Yesterday I commented that not everything is going well, and that is true, but will be resolved shortly. As someone has written, earning a good reputation is hard work and then you have a helluva burden keeping it. I just have to remove a few unnecessary weights, that’s all.

In addition to having an office/residence in Nassau, I am working on having one in Freeport Bahamas as well. Freeport, in fact, is likely to become my headquarters.

Have a great day. I’m here in Toronto where the weather’s almost as nice as Bahamas. I’ll return to Nassau in two weeks, after I complete some business.

Writing today’s report is removing one of those burdens.

I will now also take a few days off. I have asked some of my associates to step in while I take a break for a week: (i) Jack to change the banner to read Cara Community so that this blog continues with or without me (ii) Jim to take over all matters related to publishing (iii) Geoff to handle Cara Trading Advisors clients as we help them move their assets into safe banks, brokers and managed accounts (iv) Jeff to upload a standard blog template for the Community Chat and the Daily Report. In addition, I have important meetings coming up in the next week regarding my future in Bahamas.

Onwards and upwards.

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SYT	63.55	89.75	85.30	76.61	Distribution Zone (for 1 days)
GGB	37.77	83.08	74.53	69.29	Sell alert (trig. 4 days ago [on 2008-04-11 at $35.94, +5.09% chg], after a 1 day DZ)
ECA	84.85	82.26	84.64	84.24	Distribution Zone (for 2 days)
ATVI	27.49	80.30	59.68	67.86
WMT	57.07	79.17	83.77	84.76	Distribution Zone (for 3 days)
SU	113.88	77.74	69.82	80.61
GG	43.41	77.73	68.41	70.54
RIO	37.88	77.42	72.54	74.18	Distribution Zone (for 1 days)
RIMM	120.12	76.60	68.22	59.40
PBR	122.84	75.30	66.47	78.84
TT	46.65	73.69	72.56	68.06
PDA	50.93	72.85	59.34	63.95
IMO	59.34	72.36	73.15	81.99	Distribution Zone (for 1 days)
ABV	79.70	70.68	57.43	60.24
EXC	86.23	70.28	69.60	79.89
BHP	82.27	69.67	70.36	83.31
CEO	172.00	68.45	58.51	74.71
CHL	84.70	66.84	67.24	71.23
STO	34.47	65.60	76.52	84.66
CHRW	59.83	65.06	74.49	68.53
TS	53.22	64.76	76.84	73.09
XOM	92.89	63.91	67.42	79.63
CVX	91.93	63.48	66.52	79.86
TCK	47.87	62.49	74.91	69.17
TOT	81.26	60.52	66.26	79.14
NTES	20.21	59.64	58.86	70.44
LLTC	32.99	56.11	71.06	67.51
DOW	39.42	49.15	60.97	70.25
PAYX	36.41	48.55	65.64	70.26
CCJ	37.89	45.28	55.91	71.01
INFY	40.88	45.17	56.74	79.32
KB	67.61	44.48	57.51	72.19

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SBUX	17.68	18.12	38.87	50.91
BBD	20.85	23.56	12.52	6.13	Accumulation Zone (for 1 days)
DELL	18.72	24.61	26.63	42.29	Buy alert (trig. 1 days ago [on 2008-04-16 at $18.72, +0.00% chg], after a 2 day AZ)
BC	15.70	26.30	36.06	38.33
JCP	38.19	28.85	34.05	39.36
GOL	15.56	29.44	24.50	45.98
AET	41.22	31.82	22.17	40.43
GRMN	43.22	33.08	20.36	19.89	Buy alert (trig. 5 days ago [on 2008-04-10 at $46.56, -7.17% chg], after a 1 day AZ)
GE	32.23	33.47	32.27	23.27
OXPS	19.86	34.75	20.59	28.94
WFMI	32.43	35.13	29.75	45.18
WHR	80.87	45.32	40.32	25.36
DNA	74.18	46.93	43.67	21.18
MBT	70.52	47.76	29.74	22.86

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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Here is the latest chart for the Hong Kong Hang Seng index .

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Here is the latest chart for the India BSE 30 index .

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Here is the latest chart for the Australian All Ordinaries index .

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
WMT	57.07	0.80	1.42%	5.41%	4.79%	11.95%	21.68%	20.17%	24.44%	18.72%
DD	51.10	2.17	4.43%	4.20%	4.63%	7.65%	16.83%	15.35%	5.17%	1.59%
CAT	79.02	3.07	4.04%	3.76%	0.65%	2.80%	11.88%	22.95%	1.63%	18.12%
XOM	92.89	2.09	2.30%	3.56%	4.94%	5.15%	-0.66%	7.35%	-1.95%	18.83%
INTC	22.13	1.22	5.83%	3.31%	1.28%	1.75%	-12.70%	11.32%	-13.15%	6.96%
IBM	120.47	3.30	2.82%	3.17%	4.93%	1.74%	15.07%	18.54%	0.73%	25.25%
MCD	57.18	1.22	2.18%	2.58%	0.92%	4.25%	-1.58%	9.10%	0.65%	18.88%
UTX	72.63	1.79	2.53%	2.57%	2.04%	4.96%	-3.43%	2.24%	-8.81%	10.40%
CVX	91.93	1.76	1.95%	2.20%	5.05%	6.75%	-1.64%	6.59%	-1.63%	18.06%
HPQ	47.10	1.28	2.79%	2.19%	-0.28%	-1.73%	-5.44%	6.22%	-8.56%	14.35%
JPM	44.96	2.84	6.74%	1.49%	-2.77%	5.39%	6.62%	8.52%	-0.33%	-10.03%
MMM	80.69	1.85	2.35%	1.38%	-0.27%	-0.32%	-2.44%	4.39%	-14.14%	4.57%
HD	28.02	0.09	0.32%	1.26%	-3.91%	3.05%	7.32%	6.38%	-13.81%	-27.33%
PFE	21.10	0.39	1.88%	1.01%	-1.91%	3.33%	-7.90%	-9.83%	-14.33%	-21.68%
KO	61.15	0.21	0.34%	0.61%	1.14%	2.93%	0.10%	-2.39%	5.87%	21.64%
MSFT	28.95	0.70	2.48%	0.21%	-0.72%	-1.60%	-17.80%	-12.88%	-4.52%	0.77%
AIG	45.47	1.36	3.08%	-0.20%	-2.99%	4.12%	-19.24%	-21.48%	-31.36%	-32.75%
VZ	35.85	0.74	2.11%	-0.47%	-5.56%	1.59%	-17.03%	-15.29%	-20.21%	-5.33%
C	23.44	0.64	2.81%	-0.59%	-2.41%	13.18%	-18.95%	-10.67%	-47.67%	-55.72%
JNJ	65.70	0.05	0.08%	-0.89%	0.60%	1.26%	-0.32%	-3.82%	0.97%	4.25%
GM	19.90	0.78	4.08%	-1.14%	-5.10%	2.52%	-18.48%	-12.91%	-49.51%	-38.90%
PG	69.27	-0.96	-1.37%	-1.34%	-1.72%	1.01%	-4.20%	0.62%	-2.19%	8.69%
T	37.61	0.28	0.75%	-1.52%	-2.87%	2.28%	-8.27%	-0.69%	-10.07%	-4.20%
MRK	40.31	-0.91	-2.21%	-1.54%	8.65%	-6.67%	-29.74%	-30.92%	-23.99%	-19.89%
DIS	30.32	0.39	1.30%	-1.72%	-3.93%	-4.41%	-4.77%	1.64%	-13.40%	-13.42%
AA	35.97	1.13	3.24%	-2.36%	-1.26%	-6.81%	-0.44%	17.43%	-3.54%	2.95%
BA	76.67	0.97	1.28%	-2.46%	-0.23%	0.18%	-11.49%	-4.01%	-20.09%	-15.10%
BAC	36.98	1.40	3.93%	-2.50%	-8.24%	-5.01%	-8.83%	-4.42%	-26.33%	-27.82%
AXP	43.75	0.60	1.39%	-2.95%	-6.22%	0.09%	-14.28%	-1.11%	-27.36%	-25.29%
GE	32.23	0.25	0.78%	-11.55%	-15.23%	-10.82%	-12.32%	-6.74%	-20.95%	-8.85%

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

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The Americas

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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Here is the latest session data for the Toronto Stock Exchange composite index.

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Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLE	82.11	2.41	3.02%	4.27%	7.42%	9.04%	3.28%	14.92%	5.27%	29.47%
XLB	44.18	1.98	4.69%	3.66%	5.82%	6.84%	6.97%	13.72%	4.35%	12.13%
XLU	40.60	0.96	2.42%	2.78%	2.99%	5.21%	-3.54%	-3.93%	-0.71%	-0.88%
XLK	23.42	0.92	4.09%	1.74%	0.56%	2.58%	-10.34%	-1.26%	-14.87%	-2.78%
SMH	30.05	1.19	4.12%	0.84%	0.27%	1.08%	-4.18%	7.67%	-16.90%	-13.38%
XLP	28.11	0.16