Sign of the Times

WSJ online: ANTIOCH, Calif. -- While lawmakers in Washington struggle to solve the nation's foreclosure crisis, officials here are using a small fish to clean up some of the mess.

The Gambusia affinis is commonly known as the "mosquito fish" because of its healthy appetite for the larvae of the irritating and disease-spreading insects. Lately, the fish is being pressed into service in California, Arizona, Florida and other areas struggling with a soaring number of foreclosures.

The problem: swimming pools of abandoned homes have turned into mosquito breeding grounds.

http://tinyurl.com/6ydk5r
(subscription may be required)

Good morning.

Here are your Cara 100 Ratings Changes:

Upgrade:

ATVI - to Buy @ Kaufman Bros.

Target Price Raised:

ATVI - $30 to $33 @ Lazard Capital

Target Price Lowered:

PBR - $93 to $59 @ Lehman Bros.

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

Have a great day and a better weekend.

Citi to "wind down" $400B in assets

http://www.bloomberg.com/apps/news?pid=20601087&sid=ag6RR_.CGTIo&refer=home

They have details on their web site:

http://www.citigroup.com/citigroup/fin/data/p080509a.pdf?ieNocache=447

That's a pdf link.

Good morning from Cape Town

Global stock markets have experienced a relatively strong recovery since the middle of March. Although markets in general are still well below previous highs, it makes for interesting reading to reflect on the extent of the correction and subsequent rally, and to review how valuation levels have been impacted.

The URL is: http://tinyurl.com/66e5sd

Enjoy the read.

51% of those "legacy" Citi assets are identified as Real Estate, CDOs and SIVs. 39% is "Other".

Yikes.

"Likelihood" of recession has decreased from 75% to 51%? So said Bloomberg just now.

Likelihood?

Am I living in an alternate universe?

Likelihood?

Even though it’s Friday and there has been goosing of the market that’s pushed it up on recent Fridays:

From Headlinecharts: New lows are increasing and it could mean a correction is coming. The NAS new lows have increased five days in a row to over a 100 (as of Wednesday close). NYSE has also been increasing in the same time period.

Watching the 200 day resistance on SPX.

http://headlinecharts.blog.com/

From Barrons:

"Three hundred and eighty-nine companies that are part of the S&P 500 have reported results thus far, which means 78% of the index’s components have been heard from. Overall, earnings are posting a decline of 15%, according to Thomson Reuters."

Chart of market and earnings:

http://tinyurl.com/5ga4ne

Matt Trivisonno's site is Withholding Taxes Chart and it shows that both the stock market and withholding taxes track each other very closely. The rate of change of withholding tax revenue is the key statistic Matt charts and it shows that it flattened out and started heading down in mid-2007. The latest data shows that it has fallen from an annual rate of change of almost 8% to below 5%.

http://tinyurl.com/5j84hj

I posted an article by Soros, really bearish one that showed up on WSJ blog, however, I disagree with Soros, who according to many has been a bit out of touch lately
http://wallastoninvestments.com/soros-on-the-market-all-eyes-on-friday

the powers that be will not want to inflict damage to the psychological health of the USA by openly admitting to a recession,

they will employ every trick in the persuasion handbook to obfuscate the issue, like run polls, and question if there is a recession without ever actually coming to a conclusive answer until it becomes a depression, which by then they will shift focus on how "the worst is behind us" and
"what we need to do on the road to recovery"
or how "the actoins of the fed or of such and such department have brought us back on track"

or the partiotic route, how "people with doom and gloom scenario's are being divisive and hurting the country" (this will turn into a partriotic issue at some point, with the demonization of "speculators" as the cause of our problems, keeping attention away from the actual governmental and big finance culprits)

Hey guys,

I am well known for taking shots at Wall Streeters. That is not my purpose here today. I wish merely to tell you that, as a result of some recent discussions I've been having with an acquaintance of mine who helps runa a large mutual fund, there is an interesting though not generally understood fact about Wall Streeters that I wish to share. In short, these people are not that smart. We presume that despite the sociologicaly advantaged nature of the Wall Streeter and his typically superior education, that there must be something about these people that makes them particularly well suited to the business. I'm here to tell you, it aint so. These folks often have no prior knowledge nor interest in the subject matter prior to their initial employment on the street, which employment they pursue due to the salaries involved. They would gladly become doctors or lawyers if those jobs paid more, which they do not. Even a 2nd year associate at any major firm makes as much as a lawyer with a 3 year degree or many doctors who bust ass in school. Thereafter, the Wall Streeter is typically well insulated from both reality as well as their own mistakes and shortcoming, by the layers of bullshit that they read, parrot, believe and ultimately hide behind. Conventional wisdom (pablum) comes spilling from their lips like so much froth. They, due to their ego-gratifying activities and completely outrageous paychecks, develop a feeling of invulnerability and superiority to the rest of humanity. It's natural that a guy or girl pulling down 10, 20, or 30 times that of the average worker will be seduced into a feeling of superiority. The problems start when you send them your money! They are so cavalier with other peoples hard earned cash! They do all sorts of things that independent traders like us could never afford to do. They let their egos get in the way. They ride losing positions, believing more in themselves than in the facts of the trade. They have ENORMOUS egos in many cases, which as you know is detrimental to the implementation of sound technique. And I'm only telling you this because I had a talk with someone today who made me realize.....all of the above. And I never want you thinking that these jerks are any better than we are. They are not.

[Bill Cara note: Thanks, sharkie, for re-posting at my request. I echo most of what you say here. The Sell-Side of Wall Street is not much different from real estate development or many others I have come across in my career. But it runs into trouble when it dismisses conflict of interest concerns of the public. They say they can create exotic financial products for us, sell them to us, and help us in an advisory capacity to buy them... common sense says that where money is involved without checks and balances there will be bad things happening. How the US legislators and SEC regulators continue to allow this to go on is beyond me. I've said this before: if I were Chris Cox, I'd be standing on a chair in those congressional hearings and shouting, "Not on my watch!" The system continues to abuse the owners of capital because of peer pressure within HB&B and the media they buy off one way or another. At the end of the day, as sharkie says, they are not that smart. But, until I see some of the top guys going to prison for their schemes, I suppose we have to continue to express our views (ie, that bankers are liars and cheats, which we all know is unfair to many of them). Ultimately, I think that the views of bloggers and mainstream media will accept the need to stop toadying to Wall Street. The public desperately needs a break.]

almost forgot,

just posted my TA for jr. gold vs. gold ratio (CDNX:GLD)

showing base-building and could be approaching a trend change to the upside for Jr. miners...after a painful few years

http://jglobal.blogspot.com

comments are always welcome,

Allen

Hope you are still holding.

Cara 100 Update:

ATVI:

Upgraded to Outperform @ Cowen & Co.

Target Raised $33 to $34 @ UBS

and $34 to $35 @ Sterne Agee

Would someone kindly post links to definitions of downside capitulation and sequential buy signals? Also, is there an online tool to scan for these patterns?

dr.cosa, the only thing I don't understand in your chart is why the RSI is so high already at 59.61 if this is supposedly the beginning of a turn.
thx

ESLR:
Citi analyst Arcuri set a "Sell" rating and an $8 price target on shares of Evergreen Solar Inc., and said Evergreen has heavy capital needs
http://biz.yahoo.com/ap/080509/solar_power_ahead_of_the_bell.html?.v=1

Weakness in ESLR this a.m. may be due to DJ newswire: ESLR started at Sell by Citigroup.

(No position)

Re: $CDNX

I have some difficulty portraying the Venture Exchange as solely representative of small cap precious metals plays.

I figure the inverse gold/silver ratio is perhaps the best way of portraying activity in the sector, though many issues have underperformed even that AND the CDNX.

An advance of the silver price percentage wise against gold (and, as some people would theorize, an advance of gold against oil prices) is probably the best indicator.

stockcharts.com ¥/$ trade:

http://tinyurl.com/62ulcy

stockcharts.com silver/gold /w CDNX:

http://tinyurl.com/5wk7zm

Thank you for the discussion yesterday on Oil. Your caution of getting into this trade is duly noted. Won't add to my position. My belief is that Oil should move to a front page headline soon. The prices for energy is in the hands of HB&B stock traders and I await their next move from a trading range of $120 to $125. My bet is that it will be down short-term. Longer term we will see a lot of volatility up and down. So I have become a trader as well with this trade as it does have a lot of risk. Most times I have been early in entering into a trade. For me buying a small position is like warming for a morning jog by doing some stretching first.

Here is how I want to play this trade in HED.to - Horizons BPro S&P/TSX Capped Energy Bear:

My portfolio is divided into 20 units or 5% maximum in any one position. For this trade I have initially allocated 20% of this amount for my first trade. This now puts 1% of my equity at risk. If it goes to zero that is all I would lose. When I get a signal that the trade is going in my favour I will add to it. Now, I do take more risk than I should, so I 'might' average up until I have 10% of my equity at risk. Now this ETF is a 2x play on the move down in Oil prices. At the maximum exposure of 5% at risk of loss there would be an implied exposure of 10% of the portfolio (as it is a 2X ETF).

Three years ago Katrina 'pumped' the price up and then down at the gas pump. At that time I recall I paid for a short trip $129.9 CDN per litre, a high for that week. Currently the price at the pump is 123.9 CDN (Toronto) per litre.

The Community Chat yesterday was very informative. Thank you all for taking the time to share. [042]

[Bill Cara note: The previous high in Toronto was at least 1.38/litre because I was on my way to the airport and the cabbie, referring to the price at the pump as we passed by, said the cab rates would have to go up if prices stayed that high.]

Odd early morning strength in LEH

Bill writes:
"But, until I see some of the top guys going to prison for their schemes, I suppose we have to continue to express our views (ie, that bankers are liars and cheats, which we all know is unfair to many of them)."

This is an interesting point. Maybe there is enough good bankers to pressure the needed change for their own image/reputation.

Maybe a PR campaign aimed at bankers like used car salesmen or crooked lawyers/politicians?

If there were real doubt put in the minds of the citizenry about the security of their hard earned cash and investments, it would force them to ask questions and take action.

I know when I started to hear of all the reserve problems and the Fed raining capital I pulled my $ out of banks. I ask myself....as a business, would I lend to one of these bankers right now?

The answer is NO. They have no capital to back up their business, they have lousy credit, and they aren't forthcoming on their fiscal predicament. IOW, they're broke, don't pay their bills and they lie.

I know there is a stigma for yelling fire in a crowded theatre, but there must be a line where we can warn the theatre goers of their danger without inciting a riot.

[Bill Cara note: The head of the ECB stated he was clearly concerned about this credibility problem and I made note of it in the blog at the time. Then when UBS did their mea culpa to shareholders, which I provided concluding paragraphs to, I thought that maybe there was hope. If UBS sells their investment bank, or at least states it is for sale for these reasons (ie, conflict of interest with commercial banking and wealth management), then I'll take hope the situation will change.

These banks should be issuing White Papers on conflict of interest and what they intend to do about it. For starters, they should be screaming at Mr. Moral Hazard Hank Paulson for pulling investment banks--like his (Goldman Sachs)--under the sphere of the Federal Reserve Bank. That move is intended to save these banks, pure and simple, and have the People pay for it. Legislators should have started impeachment hearings.

At the end of the day, there are good commercial bankers, good wealth managers, good dealing banks, good independent brokers, and good insurance companies. The problem is that a few "gnomes"--and I mean a very few--want to have it all to themselves. The risks they have put to the owners of capital and society at large is incredible, and now Paulson wants the public to pay? Credible bankers should be demanding his resignation.]

Bought LEH July 40 PUT

"Would someone kindly post links to definitions of downside capitulation and sequential buy signals? Also, is there an online tool to scan for these patterns?"

Alan,

capitulation is defined as sharp downside move with high volume. Such move is generally signalling exhaustion of selling pressure. The theory behind this is that smart money exits/shorts quietly, orderly and in advance, while crowds hit panic button causing vertical selloff - and crowds are last to act, so there is no one left to sell when they are all out.

There are no strictly quantified criteria to capitulation. Buy signals vary depending on one's aggresiveness. Aggressive traders willing to take stops and retry will attempt to enter on what seems to be excessive selling - this is highly discretionary and risky way requiring strict discipline in taking stops. More conservative traders will wait for certain bottom formation to shape up - let's say double bottom, inverted head and shoulders, or failure of any breakdown patterns.

Not sure about online tools, sorry, I use real time scanning.

[Bill Cara note: After mid-March, when the market sold off with the Bear Stearns fiasco, I have heard commentators opine that was a period of capitulation that signalled the long-term cycle bottom and start of a new Bull phase. I say, hogwash. Short-selling hedge fund syndicates pulled down Bear Stearns after it came to light other banks would not lend to them. So, I believe that period of time was an action by manipulators, not a capitulation by the majority of traders. I do agree there needs to be a better definition of the term as it is an important one. My point is that manipulation can make things seem different that they appear. Take for instance the recent Dow Theory Buy Signal that some technicians have talked about. I don't think there was much behind the recent buying except for the effects from (i) 1-800-HELP found money finding its way temporarily into the economy, (ii) Fed money printing going to bankers who then buy up prices of their holdings so they can sell them at a profit or at least a smaller loss, which will help their balance sheet problems, and (iii) short-covering to protect profits. The latter case is interesting because HB&B -- the people who link all trading to the word "investing"--which suits their purposes--would have you think that short-covering is a good thing in that it represents buying, and buying is good. Well, a short is a good thing if it represents a real short (using borrowed stock) because it is buying that must at some point come into the market. But after the shorts have covered, it is a bad thing for the Bulls because it represents ammunition in the hands of the Bull's enemy. All this stuff should be pointed out to the public who have been blind to the antics of the Sell-Side for far too long.]

Craig

Re: "I know when I started to hear of all the reserve problems and the Fed raining capital I pulled my $ out of banks."

May I ask what you did with it?

You'd think an analyst preparing to initiate coverage on a company would dial in to the quarterly conference call. Not so for Citi's Arcuri.

http://seekingalpha.com/article/72840-evergreen-solar-inc-q1-2008-earnings-call-transcript?source=yahoo

Apparently, the order to manufacture this plunge in the stock price came more recently.

Citigroup, former home to housing shill extraordinaire Steven Kim, is a criminal enterprise.

Alan - re: Sequential signals

Tom Demark create his TD Sequential buy/sell indicators some years ago and I know of people that use them with great success. Here's a PDF link that explains their use and calculation well:
http://www.technicalanalyst.co.uk/demark.pdf

Dave

Thanks Vad. By the way, I have just finished read #1 of Master Profit Plan. Upcoming read #2 will be with more attention to details and with copious notes. Excellent primer.
Master Tape Reading is on its way from Amazon.

The big handoff? Timing just seems odd....

FSLR
9-May-08 Citigroup Initiated Buy

Regarding retailers: I heard on the radio this morning that instead of raising prices, mfr's are finding ways to cut costs on their goods (i.e. cheaper parts or providing less of the same good for the same price). It seems to me that this will exacerbate the retailers problems.

I don't think consumers will be fooled for very long. Given the choice, I believe consumers would rather pay more (and buy less) for a product offering with which they are familiar and represents quality than to feel cheated somehow or like they are getting an inferior product.

Its a shame, really. But it will be interesting to see how it plays out.

denny:

re: RSI,

the chart notes the diverenge in the RSI readings at current levels compared to previous peaks.
yes it is high, but the patten on the chart doesnt show a breakout at this point, only a bottoming and basing pattern (IMHO). take a look at the chart from a few month back it displayed similar basing/bottoming behaviour as the ratio bounced above the 50 MA for a few sessions before another huge plunge.

the relative strenght on the same pattern this time is stronger, and as we approach the 200 MA in the next few weeks an upwards crossover of both the 50 MA and the price would be (IMHO) a true confirmation of a trend change. i dont believe a trend is considered to have changed unless it involves a super spike upwards or a push through the moving averages after over 1 year of downward movement.

------

Fransix:

re: CDNX as a proxy for Jr. Golds.

i like the silver/gold ratio charts as well.
i share your concern that the venture exchange isnt a true jr. gold index. but after examining it's components i feel better using it than say the XGD, the HUI, the XAU, GDX, or the S&P Canadian Global gold index. so its the best index i can find that reflects faily well the health of north american jr. golds.

(there are the Austrailian and South African indicies which im sure work as well but im not as familiar w/ their markets , i feel most comfortable using the CDNX)

Just finished my coffee and nearly choked when I read what I posted on the price of gas at the pumps here in Toronto. Well our signs have an accepted practice of showing the price as 129.9 for $1.29 and 9/10's of a cent. Now I know why tourists are not coming to Toronto (lol).

[Three years ago Katrina 'pumped' the price up and then down at the gas pump. At that time I recall I paid for a short trip $129.9 CDN per litre, a high for that week. Currently the price at the pump is 123.9 CDN (Toronto) per litre.]

For comparison purposes (let's have some fun with figures/lies), I went to the Bank of Canada website for US$/CDN$ exchange rates.

Aug 25, 2005 = $1.09 US per litre
May 09, 2008 = $1.29 US per litre

So in Canada we are paying less now than during Katrina, but in terms of the US$ it is up 18%. Inflation in Canada has been moderated by the Canadian peso's increase in value against the US peso. Woe is the US consumer. Woe to Canada if the US sneezes. [043]

BernardF: At 9:55 you posted (about HED.TO), "Now this ETF is a 2x play on the move down in Oil prices."

That is not correct. HED.TO is a 2x inverse on the S&P/TSX Capped Energy Index (energy stocks).

HOD.TO is the 2x inverse on NYMEX light sweet crude oil futures contract price for the next delivery month.

I'm not sure from your post whether you intended to play the equities or the commodity. I hold HOD.TO.

Norton850:
I can tell you it went into gold, silver and cash. The cash is to buy more gold and silver.

Freedom57:

You are correct. I am dealing with exposure to equities as I am only playing on the Canadian side of the border... Certainly, HOD.to would also be an excellent ETF on the price of Oil and it has great volume. I just want to limit my positions to one ETF, but both would be ETF's to trade. My position is that the oil companies will compound their problems with a fall in price and regulation. So even if the price of oil goes up there may be pressure on the downside for stocks. [044]

How about starting an alternative bank with the promise of fair business practices and safety, and call it "Mattress Bank".

Craig - Mattress Bank; tagline "you'll sleep well at night"

Dave

Bill,

I totally agree. They could have let the genuine selling play out and allow for natural healing. Instead, they opted for a quick fix, not unlike curing symptoms while leting underlying illness develop. Or maybe better analogy would be, to save favorite arm while letting the rest of the body rot. In a long run we are going to pay for that "salvation" dearly.

Why Sherwood Hockey Sticks Matter


Canadians love hockey. And next to loving hockey Canadians love the idea that the rest of the world associates us with hockey. When we meet Brazilians we tell them Canada is to hockey what their country is to soccer. We say this under the assumption that Brazilians give more than a passing thought to hockey, a sport that is so foreign to everything their nation stands for: heat, samba, beaches, string bikinis, runaway urban crime and super models with that space in between their front teeth that only looks hot on supermodel type girls.

But back to hockey, yes Canadians love hockey. Even for guys like me that never played on ice, street hockey was a part of growing up no matter what other sport you played. Part of that hockey legacy is the wooden hockey stick. We all had one, and when the blade broke you bought a plastic replacement at Canadian Tire and spent weeks bending it to your exact specifications.

One of the most prolific maker of wooden sticks was Sherwood. Sadly, after almost 60 years in business, the makers of Sherwood hockey sticks are declaring bankruptcy. A company that provided well-paying jobs to a local community is forced to close shop as the lure of cheaper sticks made outside the country prove too good a deal to bargain hungry parents. Add to that the proliferation of composite sticks mass-produced by Reebok and Nike, Sherwood had no other choice.

With Sherwood gone a piece of Canada's hockey heritage goes too. That's the thing about sports that are so popular in a country; Its not just about how many kids play, or how well you do at the world's and the olympics, its about all the work that goes into making the sport a part of the fabric of society. When people's job's and directly tied to the ongoing participation in a sport it becomes something much bigger than just the game.

In a recent interview with La Tribune, Guy Lafleur said:

"I find it really sad that wood hockey sticks are disappearing. The one-piece composite models are crap...maybe your shot is harder, but what does an extra 20 miles an hour matter when the puck goes 50 feet wide of the net?"

who's going to argue with Guy Lafleur?

Maybe Canada isn't as dominant as we'd like to think we are at hockey. We may still win most of the big tournaments, even the Junior teams clean up, but bit by bit other nations are rising the ranks, and they seem to be making their own equipment too. Sherwood outsourced some work to Estonia in December of last year in a bid to save the company.

Sadly it proved to be the last gasps of a dying company in a dying industry. I work about 3 blocks from the Hockey hall of Fame in Toronto. Im continually amazed at how many tourists come to visit this site each year. But a sort of mini-hockey hall of fame exists all over the country in rinks large and small where future NHL players were taught the craft of the game. But it also exists in places like the Sherwood Factory in Quebec, where equally skilled men made the basic tool of the player's trade.

When i was awoken in the middle of the night last winter by the sound of someone opening my front door i didnt reach for a gun, or a knife. i picked up my old hockey stick in the corner of my room. most canadian kids are like samurai's with that stick, this robber wouldnt stand a chance if i got within 5 feet of him. the stick was made of wood, and i would have went for a gold club if it were a composite because you cant slash a man as well with a carbon fibre stick.

heres to the wooden hockey stick, and to a fine canadian tradition.

Signed,

dr. cosa

It seems like 12,800 is the line in the sand. Anyone else feel that if we close below that today that shorts look good and if the reverse holds that we should be long?

Adam re: DOW
200 EMA 12808
50 EMA 12654
20 EMA 12793

So it's below 200, breaking the 20 today, and yet above the 50 so far. Looks like the 20 turns down today headed toward the 50.

I've been looking at 12750 as the line (as if there really is one), so today's close will be important to my assessment. Mondays following down Fridays tend to be down, so that may be meaningful, depending on today's close.

2X short Russell 2000
short Oil/gas energy companies (SNPIX)

Dave

Dr. Cosa:

Thanks for your witty note on hockey, business, and gapped teeth supermodels. And here's to nostalgic memories of the good ol' days of 24 nhl teams (or even the original 6), bench clearing brawls, the Quebec Nordiques, and ice without advertisements plastered all over them - before business degraded the game.

I'm an American but somehow I have come to love hockey with the passion of a Canadian.

WGW at 2.2
Shark - Congrats on your prediction of 2.2.
Anyone think it's a good buy at these levels?

QT, I'm still holding, and now down to a $9 per share loss. My POV is that this is a bear market rally, the real economy will deteriorate and there will be another leg down, as Bill has suggested. So I'm feeling fine about waiting for a while.

What would be your target price to sell? I guess it depends a lot on the situation that will cause the price spike. But do you have a target?

follow up to my posting of Saturday February 2, 2008 and of yesterday:

CUQ.to - Churchill Corporation

There was no commentary on this stock yesterday from other bloggers, but if you are not a poster are and holding this stock I will update my position on trading this stock.

-has blasted through resistance of $23.00 this morning. Strong volume today and up $1.51 or 6.74%. So I will hold my position but put in a trailing stop.
-watch RSI on this one for a sell signal. Technicals right now are favourable for a move to the upside.
-understand that my intention is to hold short term and move funds here to the juniors at any time.
-if you are a swing trading change your stance to buy and sell this stock for the volatiliy
-as there are no comments on this stock, I assume I am the only holder and end my posts on CUQ.to [045]

FXP

I have no position. It appears to want to fill the gap from April 22 at 74-ish. Although today, so far, it bounced off the 20 EMA, so there may be some down pressure over the next day or so.

FWIW

Dave

ALOHA !!

So Buddah says, "Life is suffering" and here Mises is saying from a monetary and economic standpoint that "Life is seeking less suffering"!

It is amazing to think there was so much more thought and innovation regarding "money" in the 1940s than now in 2008. Now days money is a taboo subject other than what the FED does to interest rates and the price of gas. Any analysis by the PAID FOR MEDIA of the US Peso's role with regard to the "pain at the pump" is verbotten! Yet "money" in its fiat state is really the root of all our ills we now face as a Nation as well as globally. What is "fiat" based on? HUMAN ACTION ... essentially the human condition and our human propensity to avoid "suffering"! Yet as Mises points out that, in itself, "the pursuit of happiness" is not problematic, but rather the method by which we chose as a society historically, has generally led to more suffering for the masses, not less.

Maybe it is time we all act in the complete opposite way that we we were schooled to do. Maybe we should consider living with less rather than always seeking more! Zero Empire as opposed to "Empirius Maximus" ...

After all ... GOVERNMENT IS ONLY AS HONEST AS ITS MONEY!!

PRAXEOLOGY

Praxeology is a framework for modeling human action. The term was first coined and defined as "The science of human action" in 1890 by Alfred Espinas in the Revue Philosophique, but the most common use of the term is in connection with the work of Ludwig von Mises and the heterodox Austrian School of economics. It is commonly referred to as a science, however this may be a misnomer because it does not appear to meet the guidelines for either empirical or formal sciences.

Mises attempted to find the conceptual root of economics. Like other Austrian and classical economists, he rejected the use of observation, saying that human actors are too complex to be reduced to their component parts and too self-conscious not to have their behaviour affected by the very act of observation. Observation of human action, or extrapolation from historical data, would thus always be contaminated by overlooked factors in the way that the natural sciences would not be (although in quantum mechanics observation of one property of a system causes uncontrollable, but generally predictable, changes in other properties[citation needed]).

To counter the subjective nature of the results of historical and statistical analysis (see Methodenstreit), Mises looked at the logical structure of human action (he entitled his magnum opus Human Action). In other words, he built on the methodological aspect of Economics, the synthetic a priori.

From praxeology Mises derived the idea that every conscious action is intended to improve a person's satisfaction. He noted that praxeology is not concerned with the individual's definition of end satisfaction, just the way he sought that satisfaction and that individuals will increase their satisfaction by removing sources of dissatisfaction or "uneasiness".

An acting man is defined as one capable of logical thought — to be otherwise would be to make one a mere creature who simply reacts to stimuli by instinct. Similarly an acting man must have a source of dissatisfaction which he believes capable of removing, otherwise he cannot act.

Another conclusion that Mises reached was that decisions are made on an ordinal basis. That is, it is impossible to carry out more than one action at once, the conscious mind being only capable of one decision at a time — even if those decisions can be made in rapid order. Thus man will act to remove the most pressing source of dissatisfaction first and then move to the next most pressing source of dissatisfaction. Additionally, Mises dismissed the notion that subjective values could be calculated mathematically; man can not treat his values with cardinal numbers, e.g., "I prefer owning a television 2.5 times as much as owning a DVD player."

As a person satisfies his first most important goal and after that his second most important goal then his second most important goal is always less important than his first most important goal. Thus, the satisfaction, or utility, that he derives from every further goal attained is less than that from the preceding goal.

In human society many actions will be trading activities where one person regards a possession of another person as more desirable than one of his own possessions, and the other person has a similar higher regard for his colleague's possession than he does for his own. This assertion modifies the classical economic view about exchange, which posits that individuals exchange goods and services that they both appraise as being equal in value. This subject of praxeology is known as catallactics.

HYPERINFLATION SPECIAL REPORT

Inflationary Recession Is in Place

Banking Solvency Crisis Has Opened First Phase of Monetary Inflation

Hyperinflationary Depression Remains Likely As Early As 2010

http://www.shadowstats.com/article/292

Where's 2nd ave? LNG is dropping like a rock and it seems like a good daytrade once it bottoms but my titanium is feeling a little soft today.

New article with comments by Satyajit Das, an expert in derivatives who give his negative viewpoint:

http://articles.moneycentral.msn.com/Investing/SuperModels/CreditCrisisOverNotLikely.aspx

ALOHA !!

moab ... This all would have come to a painful end a long time ago had the SOCIAL SECURITY AND MEDICARE TAX not come into existance. I equate the US government's theivery of the SOCIAL SECURITY and MEDICARE TRUST FUND like an alcoholic parent robbing their kids piggy banks to buy more Jack Daniels!

I think that in the event Obama is elected President in 2008 that he will be the last black man as President as all the prior failures of BIG GOVERNMENT will be laid at his feet. The actual blame needs to be placed on the US Voters who elected Wilson and the Congress of 1913! The bad "economic" taste left in the US Voter's mouth will be enduring and not even blacks will want a black President after that!

I personally am writing in RON PAUL ... I don't believe in the current US government. Not even the ex-GAO Head, David Walker, the US Comptroller General, believes in the US government's ability to not print!

IT ALL WORKS UNTIL IT DOESN'T ...

dr. cosa, you must be on east side of Yonge lol.

Great story.

Hopefully Sherwood will return in a more boutique form, like the Pop Shoppe. Just because tradition gets replaced with technology doesn't mean it's obsolete.

Vice President Dick Cheney says that America's economy “remains the envy of the world,”

http://tinyurl.com/5bmnwb

Ahhh the Quebec Nordiques a guy I grew up with south of Boston was a goalie for them-Scott Gordon.

Anyway, I've done some work in residential and commercial financing. Talking to a couple of people through whom we did some "hard money" financing: It really is getting bad out there commercially, supposedly, and I can't confirm this, but the Donald is snooping around funding sources we used. I have no reason to doubt the information, but I cannot confirm. If that is true though, things are ridiculously bad.

Ahhh the Quebec Nordiques a guy I grew up with south of Boston was a goalie for them-Scott Gordon.

Anyway, I've done some work in residential and commercial financing. Talking to a couple of people through whom we did some "hard money" financing: It really is getting bad out there commercially, supposedly, and I can't confirm this, but the Donald is snooping around funding sources we used. I have no reason to doubt the information, but I cannot confirm. If that is true though, things are ridiculously bad.

That Cheney article made me nauseous

DOW and S&P close to testing LOD. Nasdaq 100 & comp not so.

Interesting day. Guess it's AIG-related.

Dave

ALOHA !!

jk484 ... I am not sure why Cheney thinks an economy that is the "envy of the World" would need a "stimulus plan" and bailout failing banks? What good is an economy that needs government hand outs? Free "pesos" any one?

Cheney was a shamelful moral incompentent during the Vietnam War and he remains a shameful moral incompetent!

Cheney has said he doesn't think deficits matter. He also wanted to use tactical nuclear weapons in the first Gulf War and to occupy Iraq. He also pitched some ridiculous special operations missions that you would read in a Tom Clancy novel to four star generals for use in that war that they politely declined.

Don't forget his six Vietnam draft deferments, the last one being for having a new born child (quickly conceived) just after the academic deferments were rescinded. And that he continues to hold options in Haliburton that he adamantly refused to give up even though the law requires it.

He shouldn't have been elected dogcatcher.

Cramer on TheStreet.com today in a video is telling people "Buy Gold". If he says the same thing tonight on his show, look for Auy to shoot up for sure this Monday.

http://tinyurl.com/54ta2m

Added to ESLR. This 7% drop on a call from a Citigroup analyst who did his research on the internet is a gift.

Allen

I got trapped at 84. When I get close to my basis I will have my finger on the trigger. If it gives any indication of going back down I'll take a loss then. But if the market is still moving downwards, then I will hold for a profit. Heck I waited this long what's the difference in another few days or week or two.

Aren't you glad you held firm so far? I am !

uh oh... does that mean the Cramer naked shorting conspiracy begins for gold?

Been a lurker for several months, thought I’d share an interesting idea with everyone.
EMC’s current mkt cap = $33b, EMC owns 85% of VMW (70% market share of virtualization) which is currently worth $20.8bil or 62% of EMC’s market cap.
While EMC’s core storage business (ex VMW) might be worth $10-$12 per share or $20-24bil mkt cap (per FBR’s 4-24-08 note).
Just looking at the raw numbers, EMC is 20-25% undervalued. I like the risk/reward on this, we might see a $20 number in a year.
But let me state the downside: IT spending deteriorates hurting EMC’s core business, MSFT/CTXS gains market share vs VMW.
Currently I don’t have a position, will scale in once a better stock price presents itself.
Any input appreciated.

sundance

you may get another opportunity to short FSLR if oil price recedes next week.

If the Government really doesn't want high oil prices why aren't they doing anything to stop the rise of oil.

Since we use so much in our war effort, scaling back there would bring the price down. Maybe a surprise .25 rate increase would send the dollar higher and oil lower as well.

My point is that the government might not be directly causing the high oil prices but, with the amount they've bent over backwards to save the banks, throwing everyone else under the bus, if they really cared about lowering prices they'd be bending over backwards just as far, doing everything they could to bring oil prices down.

Somehow I think in their list of priorities bringing down the price of oil is down near the bottom of the list.

Rob.

ALOHA !!

QT ... Cramer reaches the same conclusion as I have reached on the ETFs, but for different reasons. He claims the GLD ETF is "failed". I call it fraud and he calls it "just Wall Street"! It all boils down to "where's your gold"?

With volume so low today I sold my DIA puts for a small gain and should have sold my COF puts but held them for now. Expiration is September so I have plenty of time.

Rob.

ALOHA !!

Finger Lakes ... Between bailing out US Banks and fighting the most costly US WAR in American history IRAQ, then paying for baby-boomers and the ongoing welfare state ... what's left? Can the US government bailout every US company and every US citizen? EMPIRIUS MAXIMUS!!! HA!!!

TINY - nanotech venture capital co.

Does anyone know anything current about this venture capital co. that specializes in nanotech? I've posted a chart at Traders-Talk and it looks like it's ready to break out. I'd give it a 60% chance it goes to the upside based on bottoming, coiling, gap filled, and so on. Now for some volume. Take a look:
http://www.traders-talk.com/mb2/index.php?showtopic=88377&st=0&gopid=371881&#entry371881

veteranwang
Joe T who runs EMC came from Wang Lab Inc
Wang Lab Inc, brought Joe T from Unisys

He run Wang lab for few year and did not made a dime.
He sold Wang lab to Getronics. And went to EMC

Since he Joe T joins EMC, stock has gone no where

At Wang lab he brought around 10 small companies that is the way he likes to grow
At EMC he is doing same thing

FedEx Cuts Profit Outlook, Citing Higher Fuel Costs

http://www.cnbc.com/id/24545051

shark- let's just say i bought gas at 4.09/gal for the first time on the beautiful island of kona this week...no opinion on LNG...

glad to see allen/QT/david gained a little ground this week...as for me, i sold SMN this morning for a minor gain, still holding CAF, and still looking to trade my DXKSX for TBT...ESLR? not sure what to say- we have a position but not looking to add on today's weakness...

enjoy the weekend...

should say in beautiful kona on the big island...no offense to kaimu, but the leeward side is more to our taste than hilo...

Finger

RE: Oil prices

Aside from gasoline prices at the pump, I think an even larger concern is that of diesel prices which are rising at an even faster pace than unleaded gasoline!

The average driver has some flexability to exercise discretion over their fuel purchases by using public transportation, reducing non-necessary driving (i.e. road trip vacations, etc), car pooling). This is less-so for people in rural areas where public transport is unavailable.

However, truckers/transport - the lifeblood of U.S. goods distribution - has very little or no flexibility to exercise discretion on diesel usage other than to stop entirely. We are already at the point where most independent truckers are unprofitable and the industry is shrinking. It seems logical that the diesel price is leading to decreased competition in transport and ultimately much higher prices for consumer goods across the board.

So where is the tipping point? If oil/diesel prices remain at current levels for a prolonged period of time - is all the urban sprawl of the last couple decades (that was encouraged by oil/diesel in the first place) going to reverse leaving the U.S. full of ghost towns?

And on the flip side - it also seems logical that prices for urban real estate in close proximity to public transportation (subways/light rails) should hold value much better than the overall market.

Fourth paragraph should read:

"encouraged by CHEAP oil/diesel"

I see why Bill gets mad sometimes about people using this site(never mind he deleted message).

Anyways, just watched Jim Cramer, and his playbook for next week's earnings.

Mon - Buy FWLT after MDR (earnings after close)
Tues - Buy WMT, Sell LIZ (earnings before open)
Wed - Buy 1/2 postion DE (earnings before open)
Thur - Sell 1/2 postion HPQ (earnings after close)

Only down $10 on FXP club...no other postions.

2nd
Hoping you're having fun. Take a chance and try some surfing.

bOss: Only down $10 ! Next week you could book some serious profits. Good job hanging in there on FXP.

Re: Cramer = Sith Lord

S&P 500: Yet Another Cause for Concern
Those traders active in the market yesterday may have noticed that the S&P 500 did not open on time. In fact, it was not priced yesterday until about 10:14 am. Birinyi Associates has been concerned with systematic changes in modern financial markets, but more important is the lack of concern from the larger investment community. There is no mention of the glitch in today's news, and the only explanation we found was that it related to a problem at the CBOE. We stress that the inability to calculate the US market's most closely followed benchmark should be a cause for concern, especially considering the fact that nearly all trades are executed electronically (we all see the NYSE floor on CNBC every day).

Birinyi associates inc

Re: $CDNX as proxy for gold and silver juniors

I recently discovered a site which has created its own indices with the most current components being:
(A) Junior Gold Index
aes.v,ARIES RESOURCE CORP.
als.to,Altius Minerals Corporation
axm.v,AXMIN Inc.
bcm.v,Bear Creek Mining Corp.
bgl.v,Bandera Gold(2007 ContestSponsor)
bvg.v,Bravo Venture Group Inc.
ckg.v,Chesapeake Gold Corp.
cmf.to,Comaplex Minerals Corp.
cmm.v,Century Mining Corp.
dmm.v,DYNASTY METALS & MINING INC.
dpm.to,Dundee Precious Metals
er.toEastmain Resources(SiteSponsor)
eet.to,Etruscan Resources Inc.
egu.to,European Goldfields Ltd.
epm.to,European Minerals Corporation
etg.to,Entree Gold Inc.
frp.v,Frontier Pacific Mining Corporation
gbu.to,Gabriel Resources Ltd.
gbg.to,GREAT BASIN GOLD
gcu.v,Gold Canyon(2007 ContestSponsor)
ggi.v,Garibaldi Resources(SiteSponsor)
gmi.to,Globestar Mining Corporation
grz.to,Gold Reserve Inc.
GSC.TO,GOLDEN STAR RESOURCES LTD
guy.to,Guyana Goldfields Inc.
hrg.to,High River Gold Mines Ltd.
iii.to,Imperial Metals Corporation
jag.to,Jaguar Mining Inc.
jin.to,Jinshan Gold Mines Inc.
kgi.to,Kirkland Lake Gold Inc.
kmk.v,Continental Minerals Corp.
lrr.to,LINEAR GOLD CORP
mae.to,MIRAMAR MINING CORPORATION
mdn.to,Explorations Minieres Du Nord Ltee
mdw.v,Midway Gold Corp.
mfl.to,MINEFINDERS CORPORATION LTD
mr.to,Metallica Resources Inc.
mvg.to,Metallic Ventures Gold Inc
ngd.to,New Gold Inc.
nsm.v,Northern Star Mining Corp.
nus.v,Nautilus Minerals Inc.
osk.v,Osisko Exploration Ltd.
ozn.to,OREZONE RESOURCES INC
rbi.to,Red Back Mining Inc.
rmx.to,RUBICON MINERALS CORP
rr.v,Rainy River Resources Limited
sea.v,Seabridge Gold Inc
sgr.v,San Gold Corp.
smf.to,Semafo Inc.
snn.to,San Anton Resource Corporation
swg.to,Southwestern Resources
vgz.to,Vista Gold Corp.
wdo.to,Wesdome Gold Mines Ltd.

(B) Junior Silver Index
abi.v,Abcourt Mines Inc.
agq.v,ARIAN SILVER CORPORATION
aot.v,Ascot Resources Ltd.
aqi.to,Aquiline Resources Inc.
asm.v,Avino Silver & Gold Mines Ltd.
aun.v,Aurcana Corporation
bcm.v,Bear Creek Mining Corp.
bgl.v,BANDERA GOLD
cde,Coeur D'Alene Mines Corporation
chd.to,Chariot Resources Limited
clz.v,Canasil Resources Inc.
cnu.v,Continuum Resources Ltd.
czn.to,Canadian Zinc Corp.
dib.v,Dia Bras Exploration Inc.
ecu.v,ECU Silver Mining Inc.(2007 ContestSponsor)
edr.to,Endeavour Silver Corp.
epz.v,ESPERANZA SILVER CORP
exn.v,Excellon Resources Inc.
fan.to,farallon Resources Ltd.
fr.v,First Majestic Silver Corp.(SiteSponsor)
fvi.v,Fortuna Silver Mines Inc.
gam.to,GAMMON LAKE RERESOURCES INC
ggc.v,Genco Resources Ltd.
gng.v,Golden Goliath Resources Ltd.
gpr.to,Great Panther Resources Limited
hda.v,Huldra Silver
hl,Hecla Mining Company
iau.to,Intrepid Mines Limited
imr.v,IMA Exploration Inc.
ipt.v,IMPACT Silver Corp.
kbr.to,"Kimber Resources, Inc."
ks.v,KLONDIKE SILVER CORP
mag.v,Mag Silver Corp
mai.to,Minera Andes Inc.
mfl.to,MINEFINDERS CORPORATION LTD
mgt.to,Mines Management
mmg,METALLINE MINING CO
mr.to,Metallica Resources Inc.
msv.to,Minco Silver Corporation
mvg.to,Metallic Ventures Gold Inc
ok.v,Orko Silver Corp.
paa.to,PAN AMERICAN SILVER CORP
pjo.v,Palmarejo Silver And Gold Corp.
qta.v,Quaterra Resources Inc.
rvm.to,Revett Minerals Inc.
sbb.v,Sabina Silver Corp.
seg.to,Silver Eagle Mines Inc.
sf.v,SILVER FIELDS RES
sil,Apex Silver Mines Limited
slw.to,Silver Wheaton Corp.
sns.v,SNS Silver Corp.
spm.to,Scorpio Mining Corporation(Site and 2007 ContestSponsor)
sqi.v,Silver Quest Resources Ltd.
sso.to,SILVER STANDARD RESOURCES INC
sst.v,SILVERSTONE RESOURCES CORP(SiteSponsor)
svm.to,Silvercorp Metals Inc.
swg.to,Southwestern Resources
uc.v,UC Resources Ltd.(SiteSponsor)
usa.v,US Silver Corp.
xrc.v,Exeter Resource Corporation

Here are today's charts:

http://tinyurl.com/2g4e7z

Kaimu,
I agree. No one should be bailed out. But since we're bailing out all the banks and brokers, how about throwing a bone to the general public and working on oil prices?

Otherwise, I really don't see how we're going to recover in the second half like everyone is promising.
Hopefully you and 2nd are having a few "Fire Rock Pale Ales" together.

Rob.

BillySundance,
Diesel is a huge problem right now. And that extra premium on Diesel can be attributed to government meddling again. They issued some regulations a year or so ago that changed the formulation of Diesel to make it harder to refine and thus more costly. Oh and wait, that's right they make a fixed percentage on Diesel so increasing the price helped them collect more taxes.

But now we're reaching the breaking point with many truckers. Is this a big squeeze by the large trucking companies to "grow"? The large companies keep rates stable so the independent truckers can't raise rates. Why else wouldn't truckers be able to pass on their fuel costs?

If crude really does go to 200, I can't even imagine what America will look like at that point.

Rob.

It appears another bank has gone the way of the dinosaurs...

"Federal regulators says they've closed ANB Financial National Association banks after discovering "unsafe and unsound" business practices there.

David Barr, a spokesman for the Federal Deposit Insurance Corp. says many customers served by the bank's nine locations had accounts under $100,000, which will be fully insured by the government. Barr says customers can continue to write checks and draw money from ATMs through the weekend.

Barr says Pulaski Bank and Trust Co. agreed to assume control over ANB Financial's bank locations, which will be open Monday.

As of Jan. 31, federal regulators say ANB Financial had about $2.1 billion in assets and $1.8 billion in total deposits.

It was the third closure this year of an FDIC-insured bank. Douglass National Bank, a Missouri bank with $58.5 million in assets, was shut in January; another Missouri institution with assets of $18.7 million, Hume Bank, was shut down in March."

http://tinyurl.com/47vcsm

cb-

Continuing with the totally off topic (but mildly interesting) political discussion here, demographics suggest that Clinton will win West Virginia and Kentucky by large margins. She is not dead yet. She is, however, on life support. Her further chances may depend on the great non-State of Puerto Rico. That one is completely a wild card as the candidates have not even begun to think about how to pander to PR's political positions.

It may depend on if she can remain solvent (financially and PR/character/reputation) longer than the party/superdelegates remain irrational/unconvinced.

Mathematically she is done, but she has other considerations now like choosing/being VP or choosing a cabinet position(s)(Where's Bill?), and of course getting her debt paid.

Those all require a positon of strength to negotiate. She is not in that positon right now, so she pretty much has to at least run until early June to have a hand to play, unless the superdelegates call her bluff and end the game.

We'll see how the superdelegate count goes. So far it's 9 more to Obama since NC/Indiana.

My wife will love it....just like "Survivor" where at the end of the game it deteriorates to all out back stabbing, lying, cheating, scheming and character assasination, with a big smile for the cameras. The true nature of man/woman?

Regarding the Clinton and Obama race: I would be very interested in seeing a chart which compares the advertising expenditures of each candidate in each state against the votes that they got in that state. I sincerely hope that there is not a strong correlation between advertising expenditures and votes!