I can't speak for others, Bill, but I have definitely scaled back my trading. The market is far too disconnected from fundamentals right now. It is also trendless and impossible to predict from day to day. So why bother?

I'd rather wait with cash on the sidelines than gamble in these absurd markets.

Oh, and Bernanke continues to shower cash on banks while ordinary folks can't afford to drive their cars or buy food.

Great system we got here.

Betty Liu is embarrassing herself on Bloomberg. She thinks futures turned on retail data.

Betty, wake up! Futures turned on Bernanke's restatement of his commitment to bailout the banks!

With regard to KRY and GRZ, their combined market caps even at todays low prices are close to half a billion dollars. Why should Chavez pay that much money or any amount of money to acquire the mining plans and infrastructure on his land that the shareholders and creditors of these companies willing provided when he could have it all for $0? I think it is just blind optimism to think he will ever issue permits under conditions that will allow outsiders to profit. His pattern is to create the false hope that this time it is different if he needs foreign capital to build infrastructure. But in the end its always the same - he can take it all without paying anything for it.

[Bill Cara note: Legal expropriation of private assets for some purpose deemed worthy by governments in many countries is well-known. In Venezuela's case, they have expropriated natural resource assets and have paid market prices in the past. Maybe they will in the case of KRY and GRZ. I gather Cuba's Castro decided to pay zip, which brought about the US response to penalize that country in various ways. But, I still think Venezuela is a different story -- more one of which vested interest -- the private or public sector -- has the ability to use the capital markets for strategic purposes. If Pres. Chavez has chosen socialism and is willing to pay the price, then the owners of capital --the private sector--can invest elsewhere and there is no problem for us. Until he proves otherwise, Pres. Chavez is likely to follow Venezuelan tradition in paying for the assets it seizes. Now price is always in the eye of the beholder. With KRY, I think Venezuela may be prepared to pay say $1/share, whereas the 200-day MA up to the point of seizure was probably around $2.50/share, and in a free market, with full permits and a management team like Barrick, Goldcorp, Gold Fields, etc, I think that asset is worth over $10/share. The stock traded as low as $0.55 on Friday and as high as $0.93 yesterday. One thing is for sure, the wealth (15 or 16 million oz of gold --say $15 billion-- is in the ground, and not going anywhere soon.]

Good morning.

Here are your Cara 100 Ratings Changes:

Target Price Raised:

RIMM - $150 to $160 @ Oppenheimer
RIMM - $140 to $165 @ Citigroup

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

I'm with number2son. The markets are completely divorced from reality. I'm on the sidelines for now.

Have a great day.

Bernanke reads his carefully prepared speech and
gold dives.

CSIQ up 20% pre market. looks like solar are healthy.

Good morning,

The Fast Money crew were hyping solar stocks last night, and the results are evident in the pre-market tape. Candian Solar has gotten way ahead of itself. But will Solarfun get a good pop today? Will Evergreen be in the green? I really must install some solar panels on my tin-foil hat. It turns out that Sonny Bono was, in all likelihood, murdered.

Also, N.A. Palladium announced some decent earnings. After it pops I'm gonna try to short it.

????????
At Jesse's Café Américain web page today, he has
a series of charts under the title
"Key US Equity Charts & the Dollar"

with the comment

"Looks like it might be showtime."

I take it he maybe looking for a correction downward. Am I reading these charts right?

http://jessescrossroadscafe.blogspot.com/

Actually that short was a stupid idea...I may go long instead on it's first drop.

Good morning, would like your comments on the following:

I was in StockCharts looking at the P&F for FXI and it had a bullish price objective of 212 but the MACD and slow stochastic had turned negative. The P&F for FXP had a bullish price objective of 91 and the MACD and slow stochastic had a rising crossover.

How can the long (FXI) be bullish and the short (FXP) be bullish as well? Am I reading the charts incorrectly?

Remember the 40 page end of the world essay last week? I am throwing out an opinion I've held that as the consumer in the emerging markets develop, there will be less of a need for those countries to buy US debt. Bloomberg published this today:

http://www.bloomberg.com/apps/news?pid=20601087&sid=arKIIOB5UbTU&refer=home

What's the relationship, if any, bewteen Bernanke's staement this morning and gold falling out of bed? Did he suggest methods other than discount rate cuts will be utilized?

sharkie, Bernanke promised to increase auctions.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awr794TeWrew&refer=home

The article notes that Bernanke and Paulson are playing both sides of the argument to suit their needs. While Bernanke claims there is still a crisis in order to justify continue aid to banks, Sec'y Moral Hazard declares the worst of the crisis is over.

Amazingly, Bloomberg is still claiming the up open was due to the "good" retail report. Incredible.

[Bill Cara note: The US "tax" rebates can only be stretched so far -- unless the White House decides to double down before the election -- which would give new meaning to the expression 'buying votes'.]

re FXP/FXI- not sure i would read too much into FXP charts- keep in mind that it's designed to be an inverse tracking ETF, and that the 2x inverse performance only applies to DAILY activity- there is only moderate long-term (negative) correlation between the ETF and the index it attempts to inversely track...

Crystallex goes crazy today. A good example of how you needed to bite the bullet and just buy, not wait for a retracement. If you didn't buy it at 99 cents, if you didn't buy it at 1.07, you're basically sitting on the sidelines with you thumb in your...

"I will not chase a dog-doo stock. I will NOT chase a dog-doo stock."

It was never about the permit. What's the difference between buying it at 4 and having it go to 8 on a permit, versus buying it at 50 cents and having it go to 1.3 on rumor of a permit? The difference is, the smart fellow in the second scenario made more $.

Nah, you're just making $ elsewhere with less risk (hopefully).

I agree with #2, I only have a few plates in the air in this market. Too goofy to risk much.

There is a time for risk....it will come.
There is also a time for patience.

Sharkie, if you chase the dog doo stick, you just need to grab the clean end....LOL!

SLW down $0.45 on news that it acquired 75% silver production from Farallon Resources' Mexican Campo Morado site.

Listen to this one...I was about to buy the 1.09 KRYash when all of a sudden my computer offered a live software update requiring re-start. I declined the upgrade, and the goshdarn thing restarted my computer anyway. When I logged back on 5 minutes later the thing was at a buck 19. Goshdarnit. That was the trade. Maybe today isn't working out so well.

Re: Bernanke's Speech

The speech should have devastated the dollar and bolstered the precious metals sector, since these are inflationary measures.

The one obvious thing I can point to, is the seasonality in the dollar is being respected, thus a temporary rise. This would normally affect short term day to day trading in the precious metals sector.

Why Silver should have been clocked so hard is just another example of how electronic trading works solely to the advantage of the broker/dealers and not to anyone else.

Jesse's charts -

I think he is opining that it is decision time for the markets as they have rallied back to the necklines of large head and shoulder formations that he has been watching for months. Fail at the neckline or rally through?

great article by paul van eeden who has reemerged from obsurity:

Soaring interest rates
Paul van Eeden
Posted May 12, 2008

The following article was sent to subscribers to Paul van Eeden's Commentaries on April 18, 2008.

Five years ago I was certain that the gold price would double, or triple, from its then $300 an ounce price level. I bet large and it paid off. I am now becoming equally convinced that US interest rates are going to soar and I am going to bet big again. US dollar inflation, as measured by M3, is currently more than 17% per year, the highest level of inflation since M3 was created in 1959. Other than now, the period of highest inflation was July 1971 when M3 increased by 16.12% year-over-year.

The average inflation rate during the 1970s (from 1970 to 1980) was 11% and as a result the US dollar exchange rate fell 42% against an average of the currencies that now comprise the euro. A currency crisis ensued and the US Treasury was unable to issue sovereign debt denominated in US dollars, and was forced to issue its bonds denominated in German mark and Swiss franc instead. Interest rates soared: the yield on 10-year US Treasury bonds peaked at over 15%. It took 15% interest rates to quell the fire of 11% average annual inflation rates. Today we have a 17% inflation rate and a 10-year interest rate of only 3.6%.

Shorting US Treasuries is a slam-dunk trade if ever there was one. It may not work immediately, but when it starts working it's going to be like having bought gold in 2001.

Incidentally, interest rates also have to rise to thaw the credit markets. Contrary to what the media reports, the markets are not experiencing a liquidity crisis; there is plenty of money around. It is a credit pricing problem. Credit was issued at interest rates that were too low to compensate for the credit risks lenders were taking. Credit default swaps and complex derivative trades did not eliminate the risk: the risk was merely passed from one entity to another and lenders will not come back to the market until interest rates rise to fully reflect inflation and credit risks.

The intense competition among banks to generate fees from creating loans, packaging them up and selling them to investors with "risk insurance" caused interest rates to fall to ridiculously low levels. Now interest rates must adjust upwards so that credit markets can function normally again.

SLM Corp. (Sally Mae) reported a first quarter loss and warned that it could not make profitable loans at this time. Nobody wants to lend Sally Mae money at current interest rates. What does that mean? Simply that interest rates have to rise to compensate lenders for the default risk they have to take. Remember, it's not a liquidity problem; there is lots of money out there. It's a pricing issue. Who in their right mind would underwrite student loans at 3.6% when inflation is running at 17%? At a 20% interest rate students will be able to get loans again and if you think interest rates of 20% are out of the question, remember that inflation is currently higher than it was at any time in the 1970s (or ever).

Earlier this week the British Bankers' Association (BBA) announced it was investigating banks' reporting of short term borrowing costs. The BBA oversees the London Inter-Bank Offered Rate (LIBOR), which is the interest rate banks are charged for short-term loans. LIBOR is used across the world to set interest rates and the assertion by the BBA that banks are understating their borrowing costs, implying that LIBOR has been under-estimated, has enormous impact on all borrowers and lenders. Since Wednesday, when the BBA announcement was made, LIBOR has been increasing.

Because global credit markets are now very much inter-linked, an increase in US interest rates will put upward pressure on almost all interest rates and any pressure that will be created by interest rates on currencies with vastly different inflation rates will be alleviated in the foreign exchange markets. Simply put: the US dollar's extremely high inflation rate will continue to put upward pressure on global interest rates and downward pressure on the dollar's exchange rate.

Yet in the short term, I am concerned that we could see a rally in the US dollar exchange rate that would cause a temporary decline in the gold price. Don't let this last sentence confuse you. In the short term I think the dollar could rally, but in the medium to long term it is going to keep falling until the US trade deficit comes under control and US monetary inflation is reduced.

The gold price increased more than 50% from August to March, when it breached $1,000 an ounce. Thereafter it briefly fell below $900, bounced up, and seems to be directionless at the moment. I don't think we're out of the woods yet, but don't know how to predict the gold price, so I remain neutral to bearish for the short-term. I would not be surprised to see the gold price drop $150 an ounce, taking it well below $800 again.

Paul van Eeden
website: www.paulvaneeden.com

You ought to try being in the middle of one of those trades and have Scottrade come on, shut down the trade platform to upgrade the software...no warning....

It's one thing for the computer to not know, but the broker/dealer? Apparently the rating services that give ST high marks don't ask the hard questions....

New one on me----"analytic adjusted book value"

“Back in the dot-bomb days, companies liked to guide investors to rosy variations of their stated profit. These profit figures eventually became known as EBBS, or "earnings before bad stuff."

Bond insurer MBIA Inc. is taking a page from that playbook. In its first-quarter earnings release Monday, MBIA said investors shouldn't look to its stated book value -- the measure of a company's net worth based on assets minus liabilities. Instead it prefers a metric it calls "analytic adjusted book value" that "provides an economic basis for investors to reach their own conclusions about the fair value of the company."

A better name for this measure might have been SEEMM, or "shareholders equity excluding mortgage mess." At its core, this means avoiding marking assets to market -- . . . . . . "

WSJ Heard on the Street: http://tinyurl.com/3hv4xh

long pal

UPDATE - S&P 500 to hit 1,500 by yearend-Goldman strategist

http://tinyurl.com/6hnask

"Joseph Cohen believes the market fell too far. Investors are now realising the U.S. economy has hit bottom and that profits will look better this year than last year when many firms had large write-offs, she said."

I hope KRY makes a break above $3 so I can short the daylights out of it.

[Bill Cara note: That would surely disappoint "no_bear".

I hear that I disappoint “no_bear” – not that I care. I was sent this message from one of the chatrooms I would never waste my time reading:
-------------------------------------------------------------------
> Re: Dissapointed (sic) in Bill Cara
>
> Posted by: no_bear on May 13, 2008 08:53AM
>
> Cara is worthless -- he was just pissed that they fired his buddy Todd. He was very positive up until then.
-------------------------------------------------------------------

We cannot stop people from expressing their opinions, when based on fact or not.

The truth is I always avoided KRY because of the promoters, but after I watched Todd Bruce on TV, I arranged a personal meeting and brought along a world-class mining analyst. Todd didn't know us from Adam, but he spent two and a half hours in his boardroom answering every question we put to him. There were no holes. The man was a professional. I changed my opinion and called it potentially the 'stock of the year'. That did not mean I was changing my opinion of the promoters.

Todd and I are in no way 'buddies'. We have met in business maybe four times, and have never done a deal together. Having respect for a person's track record, experience, intelligence, and ability to communicate, does not automatically make people buddies.

Neither Todd Bruce or I are the problem with KRY. The person who called me 'worthless' should look himself in the mirror. What he's likely to see is an adolescent who needs to grow up. Does this bother me? If you think so; then you don't know me.

I know where the scales are tipped when stacked with my contributions to society versus those of this person called 'no_bear'. ]

nice day, think I'll take advantage--"places to go, people to meet, things to do."

Hmmmm, Vix just jumped from 18.21 to 19.63. Now back to 18.42.

Back tomorrow to see if Sundance's FSLR can be shorted. Have a good one.

Abby Joseph Cohen is really Larry Kudlow in drag?

:^)

I really should know the answer to this but can you short stocks that are under 5 bucks? I thought you couldn't.

Go PAL!!!

Oh, Abby Joseph Cohen who GS fired from her Chief Strategist job just a couple months ago?

The same AJC that called a higher market all the way to March and was finally put out of her misery?

She and Larry are both on heavy hallucinogens.

From the Abby Joseph Cohen/Goldman article:

"Areas like exports, growing at an annual rate of 8 percent, and capital goods spending by companies are increasing, said Joseph Cohen, who was recently succeeded by David Kostin as Goldman's U.S. investment strategist.

Kostin's year-end target for the S&P 500 is 1,328."

Obviously Reuters would prefer to write the article about the bullish former Goldman strategist than bearish current Goldman strategist. Those bears are just no fun.

shark--"I really should know the answer to this but can you short stocks that are under 5 bucks?"

Not from your computer, but the one at the Westport library will work!

If you are trying to talk the market UP I guess you want the FIRED analyst, not the new accurate/realistic one.

Where I have a problem in understanding the KRY situation is: Kry doesn't own Las Cristinas but just has the mining contract on it. CVG is the owner. So, how can Chavez expropriate it?

I imagine it might be intensely difficult for analysts to maintain their integrity and keep their jobs at the same time if traders are having difficulty discerning where to place their biggest bets.

cmon...what's the answer?

Can we talk about something other than KRY? There are so many easier stocks to make money and I am sure that Bill is tired of responding to knuckleheads about his calls on KRY.

Alright, shark, I'm walking out the door although today does look entertaining, but that's not why were here.

As long as the broker has shares available, you can short regardless of price. That's the policy at Schwab and I assume most others.

Good luck, see you tomorrow.

Re: WGF.V

Bit of a curfuffle over trade in the penny stock WGF.V. Apparently the company had coal concessions registered with the province either near or in the same location that a coal seam was discovered by GXS.V while drilling for diamonds. No information regarding coal licenses or any such detail is available on the WGF.V website or calls to the management have been futile, since they are not offerring any comment. Its just rumour so far. Other indications are that WGF.V had coal concessions on the Manitoba side of the provincial border which neighbours on the Preeceville concessions.

GXS.V went from 45¢ to $5+ in short order on news that a bituminous coal seam was discovered on their Preeceville, Sask diamond prospect in two drill holes located 1.5km apart. An interview with David Coffin of Hardrock Newsletter revealed that he had invested in GSX.V and was holding sent the stock ~$1 higher the same day.

Volume in WGF.V has been very high, sometimes topping 1.5m shares per day. WGF.V stock had obtained a low of 16¢ per share during the junior precious metals crunch and negligible volume. Now they are trading near the 52 week high of 59¢ on very high volume today.

F6

Re: David Coffin

Here is the BNN interview with David Coffin of the Hardrock Newletter, along with an interview of the CEO of Seabridge

http://watch.bnn.ca/commodities-report/may-2008/commodities-report-may-9-2008/#clip51868

OTM May puts for LEH are up sharply today, rather than decaying rapidly in value.

Of course, I sold (to close) mine earlier ... but was Bernanke doing a head feint ahead of some very bad news?

ALOHA !!

dr cosa ... There is never any mention by these analysts regarding the WAR ON TERROR. Once Bush announced the invasion of Afghanistan the STRONG DOLLAR POLICY was thrown out the window forever. We the USSA are fully invested in BOMBS not BUTTER! You cannot have both!

What brought Nixon to close the gold window in 1971 and Volcker to raise rates ten years later was the direct result of the Vietnam War and the tremendous cost to the US economy. As Volcker himself described that era "we were starring into a monetary abyss ..." Fastforward some 30 plus years to today and add onto the "monetary abyss" equation a 100x larger unending War, US Banks in meltdown mode(S&L x 10), nearly half of the US Taxpayer base retiring en masse and real estate doomed to vast huge inventories that can only be resolved by cheaper housing prices to the point of mass "freebies"! Like Van Eeden says about "pricing issues" ... The US Peso isn't facing a crisis of interest rates. It is facing a crisis of just plain old "solvency"! That's called a "monetary crisis" and at that point nobody gives a rats ass about interest rates because nobody wants your IOUs anyway!! In Zimbabwe the interest rates are at 5000%! People in Zimbabwe do not want loans and foreigners don't want their money! What people who live in Zimbabwe want is "out"! I believe Volcker now has a different take on "abyss". He says we "are" the abyss! We Americans are the monetary BLACK HOLE of the FIAT UNIVERSE ...

I would suggest to everyone here that the DOW and NASDAQ, as we collectively call them, the STOCK market are in reality the RISK market. Once your currency is insolvent there is no more STOCK as we knew it ... it's just 100% RISK that reflects the markets underlying non-asset, the paper IOU known as the US PESO ... So if you are sitting out on the sidelines in cash you are actually not sitting out at all! In a FIAT WORLD based monetary system there is NO "sitting out"! You are still losing money on the sidelines because you are still fully invested in the 100% RISK of the US government's irredeemable liabilites ... You are still fully invested in the corporate stock of the USA!

Only one asset class has no liabilities to global fiat of any kind!! Here is a clue ... Its not GLD!!

Re: GXS.V

Trading @$7.40 as we speak.

moab

Thanks for the comment.

Re: shorting bonds

I have a question: If bond prices fall precipitously, interest rates will rise. If interest rates rise, the stock market will fall since investing in bonds will theoretically pay better risk-adjusted returns with higher interest rates.

if both bonds and equities are selling off, where does the cash go that is no longer invested in bonds & equities? Do people just sit in cash? Will the money leave the U.S. and go elsewhere?

The article from Paul van Eeden in prior comment is along the lines of Bill's Trade of the Generation.

Jay - commodities, commodity producers, food stocks, foreign stocks, gold and cash, IMO.

http://www.youtube.com/watch?v=tD5WlQ54Sg0

Warning: The above video may be inappropriate for those under 18 or those sensitive to curse words.

Yep go34, it was the description of the process, more or less. Still pumping more tax payer $/"liquidity" into the system. The guy is using all means, helicopters, submarines....

I see we have the fed and treasury playing good cop/bad cop today...and a string of fed officials this week to talk up the $USD with cautionary tales of inflation.

IEF down/TBT up.....

Re: GXS.V

Trading now @ $8.00. All I can say is holy crap.

:0

Always good for a chuckle, Kaimu...hehe.

KRY, GRZ, Chavez -

Chavez HAS compensated in cash for his nationalizations, and I haven't heard much complaint from the companies nationalized. Why shouldn't he? He has virtually infinite cash.

The pattern seems to be to nationalize when there is a problem in the sector: cement, food distribution, electricity, telecoms. No grand plan!

And, as Bill suggests, local capitalists who "dance to the music" are doing well under Chavez.

I saw an interesting post from a financial analyst who lives in LATAM and maintained that GRZ has $130M in assets = $2.36 per share. Theoretically, no downside! So, I did buy some for a quick trade, and it's up 10%.

http://tinyurl.com/4n3pop

But, it's not a keeper, because you just can't predict what Chavez will do. There ARE some problems with local miners in Bolivar and environmental damage. But, why bother to study them when there are cheap juniors in safe jurisdictions, like Canada, or even Mexico?

Let's see....
Yellen: "Financial system soundness responsibility of fed".

Fischer: "Inflation may be a way of life".

That dot on the horizon and getting larger as I type is the TOG and gold coming at us.

Solar products makers rise on tax credit optimism

http://biz.yahoo.com/ap/080513/solar_sector_snap.html?.v=1

Sorry for one last comment on KRY....anyone else think it is a coincidence that the two times in the last couple years KRY has had such activity is around the time of CNBC Million $$ Portfolio Challenge??

At such a low price, it'd be pretty easy an inexpensive for someone to manipulate with a larger goal in mind, heheh.

2nd: Are you still holding/adding to CAF?

Back when Volcker raised interest rates we had much less debt than we do now.

I'm starting to think that, since we now pay over 20% of the Federal Budget on interest, the government can't afford to let interest rates rise.

I think interest rates will stay low until the FED can't buy enough and treasury can't print enough treasuries to satisfy the imbalances in the market.

I think Gold will resume it's bull-run when there's only a 10% or less outside participation rate in treasury auctions and the FED has to buy most of the treasuries at every auction.

At that point rates won't rise yet because the FED will still be able to handle the overflow but everyone will realize what's happening and the dollar will start it final descent. When the FED can't buy enough of what the treasury has to sell is when interest rates will start rising.

JMO,

Rob.

craig: CAF- flat trade overall right now...originally bought at 45+, sold at 48+, watched it hit 50, rebought at 48+, and now it's at 46+...still think china goes up into august, so the basic plan is to trade around it with that goal in mind...

I also think it's ridiculous how everyone calls the "handouts" "tax rebates".

The vast majority of the money is going to people who pay no income taxes and actually receive an "earned income tax credit" for paying no taxes.

So, how is that a tax rebate?

Rob.

[Bill Cara note: I acknowledge that the President refers to this program as tax rebates, so I either write it up as so-called tax rebates or I put "tax rebates" in quotes, clearly indicating my skepticism.]

craig- btw, cara china skype chat session reactivated last night...all comments are relevant to anyone invested in china...guessing you still no skype access-> if you or any other interested parties would like a copy of the chat transcript so far, send me an email and i can forward it..

I, too, am tired of KRY. A quick check on CNBC states that it is not eligible on their stock trading competition because it has a market cap less than $500 million. And tell Exxon Mobil about how fair Chavez has been in their dealings...Exxon sued Venezuela a few months ago for $12 billion and had Venezuelan assets frozen until courts reversed the freeze. As Bill said above, Venezuela may pay KRY shareholders $1 for each share of KRY. Consider yourself lucky; Chavez has seized outright assets of some of his countrymen and given them nothing. Investing in KRY reminds me of the famous quote from Dirty Harry as Clint Eastwood asks the killer about whether he still has a shell in his .44 Magnum: "you've got to ask yourself a question: Do I feel lucky? Well, do ya, punk?"

DUG/SMN hitting new lows...anyone able to time the inevitable correction in commodities has another TOG on his hands...

Rob, it doesn't matter who you send it too or their income level. It's ALL borrowed $ no matter who you are...if you are a U.S. citizen.

This is one place where redistribution doesn't really matter.

Even the person paying the highest tax bill of all payers isn't getting a rebate, he's getting borrowed money.

As Kaimu says: "It's all debt".

The New New World
Every 20 years or so, the end of America is nigh — ever since the 18th century when, in France, Comte de Buffon fingered the country as a den of degeneracy while Abbé Raynal slammed its cultural poverty: America had not yet produced “one good poet, one able mathematician, one man of genius.” In 1987, in his book “The Rise and Fall of the Great Powers,” the Yale historian Paul Kennedy saw the United States on the road to perdition — this, four years before the suicide of the Soviet Union, which left America all alone in the penthouse of global power. Now, two decades on, it is the much-hyped “great power shift” toward Asia that will turn the United States into a has-been.

http://tinyurl.com/5abbcn

I am back in on solars, steel and oil services.

Re: Cold War

The uninvited guest: Chinese sub pops up in middle of U.S. Navy exercise, leaving military chiefs red-faced

UK Daily Mail

http://tinyurl.com/26jtr6

re the end of america- there's more to america than affluence...think about it-> i can think of no other country i would more aspire to reside in, although there are many with higher standards of living...you cannot replicate american culture, history, ingenuity anywhere...geographically it sits in the penultimate location on the globe (IMO)...when we start looking at the american way of life in disgust, and towards another culture with longing, then a case can be made for the end of america...but that (again, IMO) is generations away...

RDR - I beg to differ on VZ.

While XOM and CVX sued Chavez, all the other international oil companies involved in the Orinoco accepted Chavez' financial terms.

And, I believe the Venezuelan state has sovereignty over its resources, and the VZ people have elected Chavez with big majorities in elections which were internationally monitored and considered fair.

If Venezuelans choose to take control of the heavy crude which contains their future wealth, isn't that their right?

I don't believe Chavez has ever failed to compensate for a nationalization (it's also Venezuela's right to nationalize industries within its borders, isn't it?)

Don't get me wrong. I'm not a "Chavista". I don't have a dog in that fight. But I DO try to think objectively about the Venezuelan situation.

the ultimate location, of course, will always be the garden of eden...but at another time and probably before the onset of irreversible climatic and cultural changes...

Re: Chavez

Much as people like to say we're suffering under a regime of happy-face-with-a-hitler-moustache similar to the reign of Moussolini, Chavez, despite his democratic origins, is a happy-face-with-a-beret-and-bushy-eyebrows type of tinpot socialist.

anyone following BPG?

up 20% on huge volume:

http://finance.yahoo.com/q?s=BPG

I agree, Jock. That's why, as Bill said earlier today in this blog (see lessmore's comment at 8:59 AM today), "with KRY, I think Venezuela may be prepared to pay say $1/share" whereas "in a free market, with full permits and a management team like Barrick, Goldcorp, Gold Fields, etc, I think that asset is worth over $10/share." As far as the other oil companies coming to terms with Chavez, what other choice did they have? What other choice do investors in KRY holding stock valued at $1.65 on April 29th have? Take it or leave it, or try to get it back in the courts. (I haven't had any position in KRY for about 5 years)

Interesting way to look at consumer spending.
http://tinyurl.com/6rr22g

I'm a little late to the TOG discussion, but re: the posted article by Eeden - would owning the ProShares ETF of TBT and/or PST be a way to play this outcome?
What about the 2.5 inverse to 10yr fund by Direxion - DXKSX?

May help answer 2nd's question above:

'Dramatically lower' commodity prices ahead: TD

http://tinyurl.com/5wsq2b

3:30 ET (Bloomberg) MBIA Bond Default Risks Widen on Warning from Moody's.

3:31 PM EDT May 13, 2008 Moody's: Concerns About MBIA, Ambac Capitalization Relative To Aaa Benchmark

Strong close on SOL. up 15% today and reports tomorrow. Up more than FSLR and almost as much as csiq

RDR - whereas you or I would have little chance in the courts, a gaggle of international oil companies would have a big chance. The fact that only XOM and CVX sued VZ suggest to me that the other 7 thought it in their best interest to continue in their projects with a minority position.

Also, businesses which depend upon gov't licensing are in a special situation. Las cristinas with full permitting is worth a fortune; without it, las cristinas is worth nothing.

I bet the VZ gov't would be within its legal rights to never license KRY, then to reclaim the concession or buy control of KRY. It would be acting in once capacity as mining regulator, and in another as strategic investor. (Is there an international lawyer in the house?)

Perhaps a Chinese or Russian group acquires KRY with advance assurances from Chavez that they will be licensed to produce. Perhaps Rusoro (RML.V) could play a role in this for Polyus (the large Russian gold miner).

It's instructive - if painful - to think through these risks.

From what I understand, KRY never owned the Las Cristinas property. Instead, it gained its current status in September 2002, when it signed a Mining Operation Contract with the Corporacion Venezolana de Guayana which granted Crystallex exclusive rights to develop and exploit the gold deposits on the Las Cristinas property.

Based on that contract KRY was able to induce investors to buy its stock and lend it money because with reserves of 16.9 million ounces of gold, contained in a measured and indicated resource of 20.8 million ounces, it Las Cristinas mine is one of the largest undeveloped gold deposits in the world.

However, the Corporacion Venezolana de Guayana is not an agency of the Venezuelan government, it is merely, according to Wikipedia "a decentralized state owned Venezuelan enterprise, located in the Guayana Region in the southeast of the country". It is a separate entity. The understanding had always been that mining permits, which are not a privilege granted at the discretion of the appropriate Venezuelan governmental agencies, would have to be obtained by KRY.

Well, it appears that the appropriate Venezualan agencies have exercised their discretion and in the exercise of discretion they have decided not to issue permits. IT SEEMS TO ME THAT KRY's CLAIM AGAINST THE VENEZUALAN GOVERNMENT IS ANYTHING BUT A SLAM DUNK EVEN IN COURTS OUTSIDE VENEZUELA.

My initial comment today was to agree with moab. His comment so good that I will repeat it here: "Can we talk about something other than KRY? There are so many easier stocks to make money and I am sure that Bill is tired of responding to knuckleheads about his calls on KRY". Unfortunately, I have now contributed 3 comments today regarding this stock. That's equal to all of my prior posts on this stock over about a year...during which I was consistently concerned about the optimism expressed about it that continues even today. In the words of "Reminiscences of a Stock Operator", investors were hoping for a permit when they should have been fearful of (effective) seizure by Chavez at whatever price he feels is fair.
I will ask Stephen Colbert to add KRY to his "Dead to Me" list (right below the Toronto Raptors"! http://www.colbertnation.com/cn/notice-dead.php It was already on my own "Dead to Me" list.

Correction:
Mining permits are merely a privilege granted at the discretion of government, not a right.

Does anyone have a good site for historical data on the US GOVT BOND PRICES? Not the yield but the actual face value price.
For the life of me I have been unable to find a price record, only yield.

[Bill Cara note: Try the NYSE. They trade bonds and report prices, just like stocks.

http://www.nyse.com/bonds/nysebonds/dailybondmostrecent.html ]

If you want to talk about a stock, how about Eastern Platinum ELR.TO? At a high level I think this company has several winds at it's back: higher platinum prices, lower rand prices (costs), and production/exploration upside. Also, platinum seems to be harder to manipulate as there are no significant stocks.

KRY- world opinion of Chavez has no doubt spun 180 in the last few months- he must have a moat-load of sycophants a mile long blinding him to the ax-job he's performing on his own image...but that's small comfort to stockholders...little chance a western company gets the permit but as jock alludes, a chinese or russian firm would allow him to not only save face, but probably be able to afford bigger pre- and post-permit payouts as well...probably more than a few gold bugs trying to figure out where to place bets on the next move (to cash in, wouldn't even need to be the final move)...

Hey guys,

Who got in on North American Palladium today? (PAL here in the states)

Who liked the video?

no_bear comments:
This is one of the moderators on the Agoracom.com message board for KRY. I got banned for comments that were not in line with investors holding anywhere from 40-200K shares in the $3-5 range. Comments similar to posts that I would apply here; just my personal thoughts. Not bashing or denegrating another poster. If you are not on the KRY bandwagon there you are considered a basher even if you own shares. I reported them to the Agoracom site for their censorship but got no response. They do put out the most recent news on KRY but who would not be current when you have invested your whole life savings in KRY. I still own 4K shares which is my normal $'s alloted to any given stock to stay diversified. no_bear claims to be a lawyer.

[Bill Cara note: I intend to disparage nobody who intends not to disparage me or the values I stand for.

If, on the other hand, it's a lawyer or the Prime Minister or the President, then let's have at it. This, folks, is precisely why I am blogging, which is to show you that lack of independence and objectivity of mindset turns the best of people into idiots. I cannot say it better than that.]

Re: IMG.TO

Very good discussion on quarterly results with Joseph Conway, CEO of IAMgold:

http://watch.bnn.ca/#clip52725

KRY:
The only thing that I believe would be the reason for the permit not to be issued would be the fact that maybe the government does not believe that KRY has the skills to mine the Gold and maintain environmental damage control. The government seems to like and trust the mining skills performed by Rusoro. There is nothing to take away anyway. Kry is just a contractor working for the Venezuela mining authority. It is more like they are being fired.

Re: KRY

Wouldn't surprised if the KRY assets would up in the hands of another miner.

KRY question?
Hey, I just got home and its KRY day apparently. One day I assume. If Kry were to get a dollar a share from Chavez that would be 294 million along with the 60 million that they recently took in. That would be a cash position of 354 million. Couldn't they just start over and buy land in Canada and start the mining process all over again? A payout like that would not mean the end of KRY or would it?

[Bill Cara note: Does it really matter if the present promoters are controlling the stock?]

st- LOL...human nature always plays out most predictably when traders are in desperate straits...if no_bear is a lawyer who actually makes court appearances, then he's getting his tail whacked every time due to lack of self-control...kudos to you, on the other hand, for having placed the original bet reasonably, handling an underwater position well, and emotional control...

personally, i think the cleanest transaction for KRY would be a (mutually beneficial) buy-out by a chinese company-> retain the expertise necessary, move in the right faces at the top, maybe even an arrangement where current shareholders receive a share of future earnings...they only need to figure out what's holding chavez back, then work around it...

KRY and Agoracom:
That site is a microcosm case study about the ability of greed to take control of the participants. I have always been awed by the staggering number of shares many at that site own. One guy owns 90K, another 40K. Many in this range and higher. It is similar to back in the early 60's when average Americans were putting $10K into a oil well drilling venture. That was a lot of money back then. Average Americans made 20K a year. I never felt as positive about KRY after reading the shares owned by many posters. Those situations usually turn out negative.

[Bill Cara note: So, what does anybody expect from Agoracom? Independence and objectivity? (LOL)]

WFMI pounded in AH. Being short in all these discretionary item companies is probably a high percentage play before earnings. There is little money for these items, people will be spending in basic foods and gas. (However, even Walmart may suffer given the Chinese inflation that is coming to them in the next quarters).
Short WFMI.

moab, can you tell us more about ELR.TO. Seems like it had a good run and has pulled back a bit. As I recall, it was backed by David Cohen, who also backed Northern Orion and seemed like a smart guy.

there is no doubt in my mind someone associated with the mine knows exactly what the problem is, and that they're doing something about it...non-production of the kind of reserves they have has to have every mining operator working an angle...can't be that hard to figure out the story-> relationships, money or technology (in that order) should do it...the fact that it's gone on this long-> almost has to be personality or ego driven...JMO...

shark- wouldn't that be the kind of high-stakes intrigue that would get you out of westport...in a few weeks, you could be backing down a dirt drive with a fila brasileiro jumping up and down on the hood of your station wagon and texting us the name of the acquiring company...gotta be better than yellowstone, right...

With trends generally starting in California, it will be interesting to watch the foreclosure disaster move east...

"California's foreclosure crisis passed another ominous milestone in April, when more than 1,000 foreclosed homes were auctioned off every weekday at courthouses across the state, the auction tracking firm ForeclosureRadar reported today.

http://tinyurl.com/4ydctd

As lenders grow more desperate to avoid taking possession of foreclosed homes, they are offering bigger discounts at courthouse auctions, with "discounts of 40% to 50% from prior sales price common in many parts of the state," ForeclosureRadar reports. Still, the auctions are usually uneventful, and usually do not attract serious bids. "The majority of these sales received no third-party bid and reverted back to the lender despite the largest across-the-board discounts ever offered at trustee sales auctions," ForeclosureRadar reported."

Re: ETFs

Just have to post another link to an interview with money manager over ETF products as a "tax efficient" way of investing.

Listen to the first question the caller poses and carefully parse the answer:

http://watch.bnn.ca/#clip50492

Of course ALL ETFs are exposed to credit derivatives in some form or another.

(I'm sure kaimu would have something to say.)

SSEC up 1.6%...here's hoping the A shares catch up with the H shares tomorrow...

I don't know much about Eastern Platinum - yet. Was hoping some others had insights. I did see that much of their management is from Northern Orion.

I have been biting my tongue on the KRY.to commentary today. The commentary is ranging 'from the sublime to the ridiculous'.

I will have more to say about this stock later this week, although I did say I would keep my mouth shut.

To think that Chavez would have a Chinese or Russian company take over this situation is ridiculous. One look at the human rights and environmental damage done in China and Russia would strike them from any possible opportunity. As for expropriation, Chavez has only to look at the USA for guidance in this matter. What does kaimu call the USA… My bet is that a Canadian company will develop this resource 'in partnership'. A country needs to have credibility and integrity to foster hope for its citizens.

It will be interesting to attend the next AGM of Kry. Last’s year’s was a much fun for me as a toothache.

In summary, I moved on from this stock as there were a lot of other opportunities elsewhere. But where do I stand now. Well, I learned to let prices come to me. It has come to me. Would I now buy? Yes, as a speculation. Would I recommend the average ‘investor’ to get on board? NO way. This is for trading only upon the sublime and ridiculous rumour and gossip. Will I have fun trading this stock? Oh, for sure. At PDAC I did mention to Bill that Kry.to is not a dead duck. There is a lot of potential. And has anyone looked at the other previous market darling Aurelian Resources Inc – ARU.to. I guess message boards can blame Chavez for this one too.

Just adding my ½ cents to the commentary, as I can be as ridiculous as the best. [046]

What is the best way to ruin the entire banking system?

How about propping up dead banks and as Ben said today going to any lengths to save the bad banks.

That seems a sure way to ruin the entire banking system to me.

What really gets to me is the fact that the good and prudent banks, there must be some right, are getting penalized while the imprudent banks are getting rewarded.

What I would like to see is for the bad banks to go down unless they have real assets they can sell to avoid bankruptcy and for the prudent banks to have the access to the FED's balance sheet, that the bad banks currently have, so they can fill in the gap left when the imprudent banks went down.

Don't you think that would improve the banking system? By supporting the strong and smart players instead of the slow and stupid ones.

Rob.

Also,
I'm starting to think that foreigners will see through our efforts to save the weakest banks at the expense of the strongest banks and we really could see a mass dumping of bonds that would involuntarily raise rates on US debt.

So, even though higher rates would be the end result, it wouldn't be from having a solid backbone like Volcker, it would be from people rejecting our debt and the FED not being able to buy all of it.

Rob.

ALOHA !!

F6 ... I watched a bit of SOM and he has the perfect company name for investing in ETFs ... CLAYMORE ... as in "you're walking in the financial woods all relaxed, minding your own business when all of a sudden ... BOOOMMMM!!! You step on a CLAYMORE mine! HA!! HA!! Is there an ETF investment firm in Canada called "CRUD"? Man ...

Its been awhile since I saw any semi-mainstream interviews on ETFs but this guy fielded an inordinate amount of questions from supposed investors using the word "bankrupt"! Two years ago I will wager the word "bankrupt" never came up in a BNN TV interview!

Naturally the part I laughed the most about was SOMs explanation of the GLD ETF, "... for goldbugs who want to own gold held by others ... in bank vaults all over the World!" What? How can you own something that someone else holds? YEAH ... you paid for it, but ... so? Try to find your bars ... Which vault are they in? Zurich or London or South Africa? Hide-N-Seek ... Unreal ... No "real" goldbug would ever fall for that con! Possession is 9/10ths of the law in ETFVILLE!

Bernard- agree with your comments in general, although would add that what seems ridiculous at one point in time/in one context can often (and sometimes rather quickly) be perceived as sublime at/in another (was it only a year ago i was leaning on chavez' stature as a player in world politics to support the issuance of a permit, only to watch him destroy his own credibility on the public stage)...i have no position in kry, just enjoy giving sharkie a jab in the ribs as often as he jabs mine...appreciate your good humor ;)

kaimu, understand your position on GLD and the games they play. How do you feel about CEF? They seem much more forthright to me.

ALOHA !!

This is a big concern for President Bush as it should be. Yet his conclusions as to "emboldening terrorists" is wrong in my opinion. Terrorists have nothing to do with it. Its all about the US PESO! While Napolean said, "an Army travels on its stomach", I would say, "an Army travels on its fiat"! Take that away and an Army travels nowhere fast! A Superpower military requires super amounts of money ...

I would wager that as long as the USA stays in Iraq there will be no new terrorist attacks on US soil. There have been none in fact. To guarantee that there will never be another attack on US soil all we have to do is keep our military in Iraq and Afghanistan. Why? Because the terrorists under Bin Laden's guidance want the US Military to stay engaged and in fact increase troop strength so they can bleed the USA dry monetarily, like they did to the Russians in the 1980s. Bin Laden along with cheap oil collapsed the IRON CURTAIN ... We, America, funded Bin Laden and supplied missles to Bin Laden back in the 1980s, just as the Russian's support Bin Laden now in a similar fashion. Notice the weapon of choice in Iraq, aside from IEDs, is an RPG-29. Last I looked those were not manufactured here in the USA! Insurgents spend $800 on an RPG while we spend $5mil on a M1 tank. Who is more susceptable to debt attrition?

Is Iran providing more support to Iraq insurgents than Russia is? Or is Russia aiding Iran in its effort to defeat the US military by using Iran as a proxy for Putin's long term strategy? I guarantee you the ex-KGB Putin has not forgotten the role of the USA in the defeat of the Communist Party back in the 1980s. He learned that lesson well and is now applying those same tactics against the USA now. Putin may be out of office but he and his strategy is still in control.

If you think no attacks on US soil are the result of a strong military presence in Iraq think again. Bin Laden wants us there permanantly or at least until we go broke and our US PESO crumbles. At that point even all Iraq's oil will not be enough!

READ ON:
Bush warns of Iraq disaster
By MIKE ALLEN | 5/13/08 5:18 PM EST

Yahoo News

President Bush warned in an interview Tuesday that the Democratic presidential candidates' plans to withdraw abruptly from Iraq could "eventually lead to another attack on the United States" and would "embolden" terrorists.

In a White House interview with Politico and Yahoo News — a president's first for an online audience — Bush said his doomsday scenario for a premature withdrawal “of course is that extremists throughout the Middle East would be emboldened, which would eventually lead to another attack on the United States." ...

ALOHA !!

JRPauley ... Honestly, I would "trust" CEF more than GLD, because CEF is not a Wall Street vehicle and they have been around longer than ETFs, but I would prefer serial numbers I own. It will all eventually boil down to the old saying, "possession is 9/10th of the law"!

CEF though is not a pure gold play in that silver is also included in CEF shares. In direct comparison they are apples to oranges in a number of ways.

I need a nap ...

Good morning.

Here are your Cara 100 Ratings Changes:

Downgrade:

CCJ - to Neutral @ UBS

Target Raised:

ERTS - $58 to $60 @ Kaufman Bros.
PBR - $59 to $62 @ Lehman Bros.

Target Lowered:

WFMI - $32 to $28 @ Lehman Bros.

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

Have a great day.

"President Bush warned in an interview Tuesday that the Democratic presidential candidates' plans to withdraw abruptly from Iraq could "eventually lead to another attack on the United States" and would "embolden" terrorists."

That is a signature comment from the most corrupt, dishonest and destructive president's this nation has every suffered. It makes me sick to read it.

Not "A" signature statement, it is "THE" signature statement of George Bush.

All the poor bastard ever had was fear mongering.

What should make you sick is there are people that still respond as he intends to the same BS line over and over again.

My question: How on earth does GW know what terrorists think? He doesn't have a line on his own thoughts. Politicians...always playing their game by trying to define everyone else as a means to obviscate their own sorry shortcomings. The first sign of total crap...tell us what the other guy thinks.

Tell you what George, stop trying to read Osama's (or terrorists) mind(s) and tell us what YOU think.....if anything.