No kidding oil's going down...Nobody drove anywhere this weekend. Record crowds at Jones beach, Jersey shore. Habits are changing, consumption will continue to drop.

OIL:

The US government will eventually have to respond to the recent fast increase in the oil price, which with similar gains in other commodities is both inflationary and recession-producing. A steep interest rate increase, the correct answer, won't happen. Invading another oil-producing country, and getting it right, is another option. The obvious place to invade is Venezuela

http://www.prudentbear.com/index.php/BearsLairHome
-----------------------------------

U.S. Fourth Fleet in Venezuelan Waters

With U.S. saber rattling towards Venezuela now at its height, the Pentagon has decided to reactivate the Navy’s fourth fleet in the Caribbean, Central and South America.

Reacting angrily to the Navy’s announcement, Chávez said: ``They don't scare us in the least.'' Chávez remarked that ``along with Brazil we're studying the creation of a South American Defense Council'' which would defend South America from foreign intervention.

http://tinyurl.com/5bz9dx

Case-Shiller down 14.4% YoY.

But let's wait for the consumer confidence and new homes sales @10 est to see which way the market winds blow this day.

opening strength in the QQQQ-> inclined to use it to scale into QID...

anyone have a take on SUN? definitely not following the pack..

QID at 39.55...

Oil

Has anyone else noticed that this "driven" increase in the price of Oil may have just preceded an effort in Congress to pass bills that would permit drilling in all the places such as in Alaska and off-shore that have been refused to Big Oil until now? Sort of similar to all the times the Markets fell just prior to Fed loans (gifts?) to Banks - lots of "monkee tears" on tv about how something just "had to be done!".

Along with this thought, I found it surprising/curious/horrifying that an ad is currently appearing in the NYTimes for degrees in "strategic communications" which it (the ad) defines as something like - learning from experts how to spin the news in order to achieve business goals - not exactly but close enough.

Sheeesh!

Yahoo article headline:

"US home prices drop at sharpest rate in 20 years"

Why then is SRS dropping?

SRS is dropping because new home sales are being spun as positive.

SRS does not short U.S. Residential Home Prices, just like DUG does not short oil.

Because of new home sales BS numbers and capital infusion into one of the California builders.

New home sales plummet 42% YOY but up 3.3% MOM and this is being spun as good news??? Even consumer confidence came in well below expectations and is currently sitting at a 16 year low. Based on this dismal economic data, we have the USD and the DOW up yet gold and silver are getting hammered. This is a complete market rigging sham without question!!!

If the nasdaq clears 2474 i'd get out of QID

2nd,

Like your thinking on QID. At this level, it appears to be a good entry point even for a longer term hold.

IMHO, the tech stocks are way overpriced and should be among the hardest falling when the walls come tumbling down.

Regards

Oil is backing off record highs, market was a bit oversold from last week, this means a small rally today. Nothing out of the ordinary here, just bad news, "not as bad as expected," with some other relieving factors.

n2s- wasn't there an article in Sunday's Chronicle suggesting that home buyers jump in now? they were saying home prices may not bottom till later this year, but also forecasting an increase in interest rates-> higher payments, therefore to buy now...real estate forecasts are all over the map, really...

"Based on this dismal economic data, we have the USD and the DOW up yet gold and silver are getting hammered."

Hold on there, amigo. As our estimable host has said many times, the market breathes. Today it is exhaling, using the dubious excuse of "better" home sales and lower oil.

I agree with the Fatster that we were oversold last week and this is a correction. I got stopped out of my SDS, but now I see it's already up above my stop again.

So it goes.

McFauld plays on the move. Fancamp +4%, McDonalds +10%, NOT halted.

Hey 2nd, I didn't see that article. But I have noticed that the few sales getting recorded in my neighborhood are showing some correction in price.

That said, there are many homes for sale in my area. Two are within a few doors of my home and they have been on the market for months. One, which underwent extensive remodeling, has been on the market so long the yard is now overgrown with weeds.

I've been saying this for years, but it's still true: until it become affordable to own a home again the housing market here will remain under stress. We're in the middle of that process and it's a long way from over.

"Hold on there, amigo. As our estimable host has said many times, the market breathes."

That is one good way of putting it but I would call it more like cardiopulmonary resuscitation as performed by the PPT. Actually, I forgot one economic data point - home prices fell 14% YOY. Just some more fuel for this counterintuitive move. Funny how many counterintuitive moves occur in NY compared to other markets. In fact, it almost makes one think that if it was not for counterintuitive trades there would be no NY market.

and it's not just housing (lack of) affordability, there's also the inventory overhang. we're @ 11.2 months (april). i'd guess that will continue to rise into the summer, for some new all-time records. u.s. won't improve until housing improves... housing won't improve until supply comes down, and affordability returns to the median home buyer. who is having problems filling the gas tank.

housing is still screwed for '09, probably '10 & beyond if the consumer is still in dismal shape.

If the market is deeply oversold it will likely rally despite negative news, even for a few days. Don't trade the news, trade the prices.

"The obvious place to invade is Venezuela"

Go KRY!!!

Don't know if anyone took the buying VIX or long dated volatility trade I talked about a week or so ago, but the edge longer exists and profits should probably be locked in (VIX is up about 20-25% and the implied vol of the VIX options is way way up)-either sell out the the options at a profit or time spread them by selling front month premium against the longer dated longs. Of course if the market continues to decline rapidly then premium levels should also rise but if you have no market opinion this is a good time to ring the register.

Let's connect the oil dots.

Oil execs meet with the Penguin at the beginning of the shrub term, we invade/occupy an oil rich nation based on total lies and BS.
Then we have record oil prices and the onset of the drumbeat to drill, drill, drill...anywhere....but *especially* off shore and Alaska to despoil the environment there for a weeks worth of oil.

All that's missing is some dumb ass moron like Dennis Miller comparing his kids lifestyle in his SUV to Caribou. Like comedians kids are endangered....

Roubini preaches gloom - see his three-part video interview with FT.

Here is the link: http://tinyurl.com/3uovn9

To clarify my comment....they knew we were running out of oil which is the motivation for all of the above....and STAYING in Iraq....the plan of the bought and paid for Republicans. Mad Max is a futuristic fantasy...right?

Remember, if it isn't measured by the gallon or killowatt hour they don't have something to sell you over and over. Solar only makes them $ on the initial sale....that's why it has no support amongst these dogs.

Like me they are looking for parking lots. Pay, pay, pay.

LOL! Roubini is negative? I like his consistency.
He's been right so far.

ALOHA !!

Because of the holiday today is the second trading day of the week(short week). In a usual week POG and POS are more likely to be taken down on a Tuesday. I try to arrange buying based on that. Even when POG was at $400USD Tuesdays were the likely days to go down and add in this week is opex where more than likely attempts to prevent delivery are most likely.

Bob Hoye - blow offs in base metals and grains:

http://www.321gold.com/editorials/hoye/hoye052708.html

Dennis Miller is a blight on the American landscape.

UBS sucks...When I graduated college they wouldn't hire me 'cause I didn't go to the right school. Turns out theose jerks should have made me CEO.

ALOHA !!

Anyone here ever heard of Norman Dodd and the Reece Committee? I have some flower customers who are members of the CFR-Council On Foreign Relations and the Rockefeller Foundation. Both of which are tied to the Reece Committee. The last time in US history that such wealthy organizations were under such intense scrutiny by the US Congress was in 1953.

Norman Dodd was an insider banker with Morgan Bank back in 1929 when the stock market crashed. He was tasked by the bank to find out what happened to cause the crash and it took him nearly three years to report back. He was told by the head of JP Morgan back then that after World War One " ... the United States will never again see the days of sound banking."

The link I provide below is a five part video interview of Norman Dodd done back in 1982 right before he died. Each part is about ten minutes long. I recommend at some point taking time out to see all parts of the interview and you will get a perspective of America and its banks and the elite families that own this country's government. They own the US government because they own the money. Its that simple ...

Link: http://tinyurl.com/6kftc6
(see all five parts listed on the right side scroll down)

Norman Dodd and a couple of his researchers and Catherine Case were the only ones in America ever allowed to read the meeting minutes of the Carnegie Foundation going back to 1908. Wait until you hear what he says about the "Carnegie Foudation for International Peace" ...

You can hardly mention any of this kind of stuff to card toting Dem and Rep voters and stout defenders of the US Executive Branch and the US Dollar. I am sure that even here at Bills Blog many would view this as tin hat conspiracy stuff. I have thought about that and the constant barage that "conspiracy nuts" get! Am I one? Here's what I say to that ... "QUESTION AUTHORITY"!! That is what Thomas Jefferson and George Washington would want YOU to do!!!

Now think of this ... Why was it the Nazi death camps back during WW2 were kept such a secret for so long? I mean here you have camps all around Germany where the stench of burning flesh wafts all over the countryside and nobody ever admits it exists until after WW2. Then you have Bin Laden plotting in a cave in far off Afghanistan to take down Wall Street ... Somehow though it is impossible for anyone here in America to believe our own government and our own banks plot against us. Yet if you read the US Constitution and the Declaration Of Independence you can easily see that our Founding Fathers saw fit to believe that our own government would someday be our worst enemy! The warnings written of so eloquently over 200 years ago are alive and well today and I might add "thriving"!

QUESTION AUTHORITY !!!

ALOHA !!

It seems TINY URL is having some server issues so here is the direct link ...

http://www.youtube.com/results?search_query=Norman+Dodd&search_type=

2nd, you made me curious about SUN -

They did have a weak 4th qtr (.20 eps on 13.2B rev), followed by a 1st qtr loss (d .50 on 12B) allegedly hurt by price of oil; peak earnings period (typically) coming up, but that's all I can see...

Charts make it look oversold?

Caveat - I'm not an expert at reading these technical charts, in fact I just started studying them this weekened! (But MACD shows a possible bullish centerline crossover, and maybe even a positive divergence? Help me understand this.)

SUN: Not convincing, no support on the downside (see 12 mos. chart)still in unbroken downtrend.

http://tinyurl.com/3evv36

sorry about that bad link...figuring this out.

ALOHA !!

This is the PART ONE link. The other link was not the PART ONE with the Griffin intro. Sorry!

Link: http://www.youtube.com/watch?v=C8cC21jB9EE&feature=related

Thoughts on the price of oil from Colin Twiggs

Crude Oil
There has been much debate in the last week over causes of the recent spike in oil prices.

Oil tanker leasing rates have apparently trebled since April as Iran and Venezuela stockpile crude oil, restricting supply in anticipation of even higher prices in the months ahead
(World-check).

Low interest rates from the Fed have reduced the carrying cost of stockpiling various commodities.

Expectation of rising inflation has also fuelled demand for investment in real assets. With the housing market in a state of collapse and equities facing a recession, commodities remain one of the few viable options.

The growth in commodity index funds from $13 billion to $260 billion over the last 5 years shows a close correlation to rising commodity prices, according to Michael Masters in testimony before the Congressional Subcommittee on Homeland Security and Governmental Affairs. Masters, a hedge fund manager, appealed to Congress to end the practice of index speculation.

The only obvious answer appears to be to slow the economy, thereby reducing demand and inflationary pressures. The Fed cannot raise interest rates, however, without exacerbating the housing crisis and further damaging the already vulnerable banking system. So $150/barrel or $200/barrel oil may be the least painful way of achieving this.

July 2008 Light Crude broke through resistance at $130. Narrow consolidation above the new support level would warn of another sharp rally. Reversal below $130 would be healthier, testing support at $125 and establishing a more solid base for the up-trend. A word of caution: rising trendlines show an accelerating up-trend, or self-reinforcing cycle, which is likely to culminate in a sharp upward spike — followed by an equally sharp drop as the market corrects from its excesses

The silent takedowns in the price of oil looks very suspicious to me. Based on what I learned from 2nd_ave, that's exactly how I would expect a change in trend to begin -- first quetly with only the smart money on board, and then the crowd joining in. I am not ready to short USO yet (I will if USO goes down tomorrow), but I did sell my FXP position just now where I already have some gains (I sold 200 FXP puts with a strike price of $75 for $7.8, these shares where then put to me, and now I sold these shares). The reason for selling FXP is that I expect the market to rally once it realizes that the oil is going down.

DavidV

David- jumping the FXP ship and speeding away on an out-of the-money put lifeboat? nice move...

most people have been expecting a sudden dump in crude oil prices, each step of the way from $90 and up there's been no shortage of analysts proclaiming its unsustainable.

if oil were to fall back to $90 there would be much talk of the commodity boom being over, and normalcy energy markets, when a few months ago $90 was frothy. how nice it must be to have such a short memory.

gold getting smacked down today, and im growing more concerned that this weakness prior to oil showing significant weakness may mean double duty going down, possibly fullfilling Bill's conviction of much lower gold prices in the near future prior to the TOG.

gold shares getting hit harder again as usual, im somewhat disturbed by John Embry's recent report stating "last chance to buy gold under $1000",
it reminded me of his December 2007 report about it being the last chance to buy Jr. Gold shares at rock bottom prices.

i dont like cheerleading tactics like this from such a respected professional.

patience is being tested quiet hard at the moment.

J

Miners weak... Swapped MFN in place of NXG. MFN up in a down day.

Opened Put on PXD seeing the volume decline, MACD roll over, RSI failing, huge run up to peak.
This is my highly risky move for the day.

Going to study opening a call on SKF.
Also puts on HXB again soon, and my favorite
COF. BAC looks like a bagholder ready to seek new lows.

Might have an up week as a rebound. McHugh opines wave iii down has started, with the initial decline last week a wave 1 down of a 5 wave pattern within iii. June 3 is the Fib turn date guess of 3 of iii down.

Correct: Put on XHB.

Useful blog re miners in LatAm:

http://tinyurl.com/3uxt4m

Written by a US banker who lives in Lima, and seems to have a feel both for mining and for LatAm politics. Above he reviews his recommendation for DNT.V, a copper miner with a huge find in Peru.

As he points out, DNT was up 11% yesterday (up again today) on expectation of a JV or takeout.

Well it took all day but the NAS broke 2474 on the 4th attempt in the last 3 days.

if i had more capital, i'd be betting up from here, at least into the close

QID- adding a little at 39.02...

ALOHA !!

Jock ... Yes, I have seen that site before and heard fo Candente. I own no shares though!

Buying Geologix-GIX has certainly paid off and the shares seem to defy gravity at this point! I picked up 141,000 shares back a few weeks ago when the price was below $1.50CDN! Now I need ECU to copy that!

ALOHA !!

Thanks to Peter Grandich and our local AussieOnTop!! Where is he these days?

DUG- small position at 28.92...

ALOHA !!

Also another junior I own has gone up a lot lately, Lysander Minerals-LYM(TSXV). A few days ago someone bought 2mil shares out of the blue. No news either!

Like GIX there has been no recent news to blame the share price increase on!

David- i know you're thinking the market may rally as oil prices drop...what about entertaining bill's last dance scenario and watching for a correction in commodities pulling the indexes down with it?

David:

You said "I sold 200 FXP puts with a strike price of $75 for $7.8, these shares where then put to me, and now I sold these shares".

To buy 200 contracts * (100 shares/contract) FXP shares at $75, one would need $1.5M ! I didn't know that folks here have such large trading accounts.

Btw, I agree with you that selling puts is a great way to acquire the underlying shares.

I've been sidelining for a few months now, wondering if anyone here suspected the POG slide would occur today.

teich- based on previous posts, i think david meant 20 contracts...

teich- you're right...maybe i should be selling puts on QID...

correction to earlier post: in-the-money lifeboat...

Posted by: 2nd_ave: "teich- based on previous posts, i think david meant 20 contracts..."

That's right. :) If I had $1.5M to invest, I would not be playing with speculative shorts right now but would be investing in pure commodities for a long term.

Posted by: 2nd_ave: "teich- you're right...maybe i should be selling puts on QID..."

Be careful with that, 2nd_ave. When I sold the FXP puts covering 200 shares with a strike of $75, FXP was trading at $78, which seemed like a rock bottom price at that point (it was right after it dropped from $90 or so). I could have covered my options position when FXP kept going down, but I was hesitant because of the large bid-ask spread and because I have a tendency to play medium-term moves (so I thought I could afford to stay underwater for some time). Since you are a nimble trader, you can probably make more money by buying/selling the shares whenever you feel the market mood changes.

I think that selling puts works only if you want to accumulate a long-term position based on fundamentals, and are willing to be underwater if the price diverges from the fundamentals for some time.

DavidV

Posted by: 2nd_ave: "David- i know you're thinking the market may rally as oil prices drop...what about entertaining bill's last dance scenario and watching for a correction in commodities pulling the indexes down with it?"

2nd, I think Bill's last dance scenario is a long-term one. He basically says that IF commodities fall during a bear market, then it must be a severe recession for the drop in demand to outweigh the impact of the lower interest rates (and hence and upward pressure on commodities). So if oil falls, I think it will take time for the market to realize that the drop was actually due to a fall in demand (hence a decrease in world-wide production => decrease in company sales and profits). In the short term, I think the market will rally, as I have seen a very high negative correlation between the market moves and the oil price recently, as well as "official" explanations on Yahoo news that the market is rising/falling because oil is falling/rise. So with all eyes on oil right now, the "herd" will believe the frontline news and will drive the market higher if oil starts to fall. Today might be an example of that.

DavidV

DavidV

From Today's

Comments & Outlook [by Bill]

Traders will watch for damage from high oil prices and banking industry rating decreases, but there is still some fight in this market following last week's sell-off.

The wild card here is Crude Oil. If the price drops quickly by say 15%-25%, that would serve to pump up equity prices.

Having said all that, the Bear market is a continuous process of working through lower lows and lower highs.

David & 2nd:

As we know, selling (cash-secure) puts is not a fool-proof strategy.

If the trade goes against me, I always have the option of rolling the puts out in time. One would do it when the underlying rebounds temporarily, since the absolute value of the delta in the shorter-term puts is _higher_ than the absolute value of the delta in the further-out-in-time puts.

correction: "cash-secure" --> "cash-secured" .

Posted by Teich: "If the trade goes against me, I always have the option of rolling the puts out in time. One would do it when the underlying rebounds temporarily, since the absolute value of the delta in the shorter-term puts is _higher_ than the absolute value of the delta in the further-out-in-time puts."

If the underlying price rebounds (but you are still underwater) and you roll over your puts for a later date, then you might still be worse off than if you had sold the longer-dated puts in the first place (because of the bid-ask spread and other factors). Rolling over also extends your time risk, if you happened to be wrong on the trend. So, as you said, selling puts does not guarantee you a profit at a smaller risk than if you were to buy stock shares (otherwise, the market would exploit and correct such an inefficiency).

The strategy of choice depends on one's personal attitude toward risk. If one is willing to accumulate a long-term position at the current price but at the same time does not mind making only a little profit and missing out on a big upmove (in which case the sold puts would just expire), then selling puts should be more preferable to buying shares. That's my current understanding, and my logic might still be missing something...

DavidV

David:

"If the underlying price rebounds (but you are still underwater) and you roll over your puts for a later date, then you might still be worse off than if you had sold the longer-dated puts in the first place (because of the bid-ask spread and other factors)."

You are right, but it requires hind-sight (a priori knowledge). If I know, a priori, that the underlying will be tanking, I'd be buying puts instead of selling puts :)

When I mentioned rolling the sold puts out in time, I meant for it to be one of the ways to save a trade that has not gone well. Of course, i) waiting until expiration to buy your shares and ii) scaling in to sell more (not really considered to be doubling down) are good options too.

I may be the only dumb ass who bought DCR at $1.09 and managed to lose money on it.

Looks like oil fever may have broken.

Kaimu may appreciated this one.

Your Social Security

Just in case some of you young whippersnappers (& some older ones) didn't know this. It's easy to check out, if you don't believe it. Be sure and show it to your kids. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican. Facts are Facts!!!

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program.
He promised:

1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the Independent 'Trust Fund' rather than into the General operating fund, and therefore, would Only be used to fund the Social Security Retirement Program, and no other Government program, and,
5.) That the annuity payments to the retirees Would never be taxed a s income.
Since many of us have paid into FICA for years and are now receiving
a Social Security check every month --
And then finding that we are getting taxed on 85% of the money we paid to the Federal government to 'put away' -- you may be interested in the following:

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

Q: Which Political Party took Social Security from the Independent 'Trust Fund'
and put it into the General fund so that Congress could spend it?
A: It was Lyndon Johnson and the democratically Controlled House and Senate..

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

Q: Which Political Party eliminated the income tax deduction for
Social Security (FICA) withholding?
A: The Democratic Party.

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

Q: Which Political Party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the US

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

Q: Which Political Party decided to start giving Annuity payments to immigrants?

AND MY FAVORITE:

A: That's right! Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

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

Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it is uninformed citizens believe it!
If enough people receive this, maybe a seed of Awareness will be planted and maybe changes will Evolve. Maybe not, some Democrats are awfully sure of what isn't so.

But it's worth a try. How many people can YOU send this to?

Actions speak louder than bumper stickers.

AND CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!

A government big enough to give you everything you want, is strong enough to take everything you have.

P.S. This was sent to me in an e-mail.

This may be OT but I need technical help.

My TV seems to be stuck in some kind of "Ground Hog's Day scenario", whereby every time I watch the financial channels, there are a bunch of talking heads claiming the housing market is approaching a bottom.

There must be a reset button somewhere...

Aurator:

LOL. We need to give the home-builder stocks reasons to spike up so that we can reload our shorts :)

Same with AMD --- I love the fact that rumors of an impending acquisition or spin-of resurface every few months. Otherwise, it is tough to short this piece of crap if its stock were to stay at the 52-week low all of the time.

Geologix is on a tear. That good news that came out during the selloff is catching up with the stockprice now.

A few days ago someone was looking for a way to short oil and did not like DUG (energy stocks short).

That person may want to consider GSG which is weighted 75% to oil if memory serves.

Kaimu: Thanks for the video(12:24). It will be passed along to those who will definitely appreciate it

GSG

FUND SUMMARY
The investment seeks to track the performance of the GSCI Excess Return Index. The fund will invest in a portfolio of exchange-traded futures contracts tracked by the index. The index currently tracks 24 different commodities. It is weighted with approximately 67% invested in energy, 16% in agriculture, 7% in industrial metals, 7% in livestock and 3% in precious metals. The index is production weighted to reflect the relative significance of those commodities to the world economy. The fund is nondiversified.

Thanks OT.

By the way that's shorting GSG.

from www.jsmineset.com

Jim Sinclair:

As far as I am concerned:

1. I do not anticipate a one month or more drop in gold. Neither does Monty Guild, so be careful not to read his general commodity comment ass-backwards.

2. The worst case scenario is a chop after the low of April 28th set in, and the rally high in the low $950s. Following this the chop gives way to a break above $1034 on its way to $1200 in 2008. Write that down for the dark night of your gold soul.

3. Gold is a currency, not a commodity.

4. Gold while remaining as a currency is now more tied to the euro than the USDX.

5. Weakness in crude, if you can call any price above $100 a barrel weak, helped gold be prone to lower prices.

6. Gold’s real help moving lower was a push by COT that triggered the mindless black boxes which are as nuts on the upside as they are on the downside.

7. If tonight you curse gold, keep this in mind when it crosses$1034, and please leave never to return.

8. Hold my hand when you feel low as gold takes a beating, and when you feel high as a kite when higher highs happen. I will moderate both for you.

9. The greatest technical analysis trick is simple to learn. Whatever your emotions say to you is totally wrong. Whenever you want to margin to the rafters it is time to eliminate debt.

Regards,

Jim

Following excerpt from Stratfor Geopolitical weekly--$130 oil; covers view on winners and losers; here's the China impact for those on China skype.

"But the most immediately affected is China, where shortages of diesel fuel have been reported. China’s miracle — rapid industrialization — has now met its Achilles’ heel: high energy prices.

China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.

Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China’s reserves could shrink with remarkable speed, leaving their financial system — already overloaded with nonperforming loans — vulnerable. If they take the cap off, they face potential domestic unrest."

http://tinyurl.com/47poaz

Seamus- the price of oil is partly what makes bets on the market (either way) a high risk move right now...something could happen at any time to drive the price up or down, with sweeping consequences for the world economy...it used to if you owned energy shares your antenna would pick up news from the middle east, nigera, venezuela...now it almost doesn't matter what you own...

AND CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!! . . . . . . . . .
. . . P.S. This was sent to me in an e-mail.

Posted by: Telestar3d at May 27, 2008 4:20 PM

Telestar3d This statement about "100% retirement" is not true and thus casts doubt IMO on the rest of the message. Congress pays into the retirement system like other federal employees. They receive a percentage of their salaries based on their years of service.

http://tinyurl.com/4oky43

I'm always dubious about similar emails I have received in the past. Usually discard them when I recognize a few buzzwords that tell me it's someone with an agenda rather than straight forward facts. They all seem to include a phrase like how many people can you send this message.

We're both long time posters. I know you're just forwarding information and have rightfully attributed it to a received email. I'm just giving my 2 cents viewpoint.

Telestar3D: Given that politics is always the result of compromise, what exactly was the position of the Republicans in each of the above situations that forced the Democrats to accept the compromised results?

Typical of those moronic politically revisionist e-mails we all get. If only a small nugget is true....

Seamus and others, thank you for pointing out flaws and outright falsehoods of my post. I should have refrained from posting this.

Elephants and Donkeys are just Zebras in disguise and thus one in the same.

Ron Paul for President.

Thanks Again.

"now it almost doesn't matter what you own..."

Posted by: 2nd_ave

Certainly agree. . . . sign of the times. . . have to be on top of things and watch them like a hawk.

Thus, limiting positions and no new ones due to travel to the West Coast on Thursday with, unfortunately, a quick Friday return.

Among the "almost," but not all--retaining T-O-G position RRPIX and CHSCP along with some minor postitions elsewhere. Otherwise mostly cash and some short term munis.

SA, Spain, both rolled over huge today, as mentioned and expected.

http://tinyurl.com/6pw59b

Nice summary by Frank Barbera regarding hard recession data vs. govt. nonsense numbers.

http://tinyurl.com/4u6hla

Differing opions from my various sources whether there will be one more rally into the election, or whether it's down into a hyperinflationary depression from here. Even if there is NOT a rally, the govt. will figure out how to show there is in their statistics.

http://tinyurl.com/6973p6

Humongous Bank and Broker with their hands in the pockets of the pols...again.

Ecuador's draft mining law is reasonable, per the seemingly knowledgeable banker/blogger who writes from Lima:

http://tinyurl.com/5opxhh

ALOHA !!

Jock ... As I read the Spanish version of the new Ecuador Mining Law draft right at the top in bold letters it indicates that it is the "first draft" as well as it is up for "debate" and "compromise". TEXTO PARA DEBATE Y CONCERTACION is plainly visible, so I take it that none of the "new law" listed in red is in concrete by any means! It is time consuming as you have to read the original law in black and then read all through the new law in red to find the one word or phrase that has been changed. I had to laugh as my past legalese experience there would be an addendum that indicated the exact changed "word or phrase". Like in Article 5 there was only one word change "superficie" de la tiera, meaning the State had dominion over the surface of the land.

Okay, I did not read the entire Mining Law as it is 2:00am here in Hawaii now!!! Back to bed!!!

Before I do go beddie bye though it seems this lawyer has a stake in the Aurelian share price going up. Would I bet the farm on a document that is up for "debate and compromise"? NO ...

This makes me value what the State of Western Australia has to offer in terms of "country risk" even more ... In Western Australia mining companies and shareholders do not need to base their future on "debate and compromise" and "first drafts"!

Even though the lawyer seems to think it is a "done deal" I don't see that! It will be interesting to see what ARU share price does tomorrow ... er, today, eh? NIGHT!

Good Morning.

Here are your Cara 100 Ratings Changes:

Upgrade:

ADBE - to Hold @ Jefferies & Co.

Downgrade:

EXC - to Hold @ Citigroup

New Coverage:

AMAT - Hold @ Kaufman Bros.

Target Raised:

NKE - $75 to $85 @ Credit Suisse

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

Have a great day.

Ever notice how the "improper" setting of stops (to limit loss) usually stops you out exactly to the penny? Thereafter, the security is free to advance dramatically after you've been relieved of your lousy thousand shares. Damnit!

By the way it's worth noting that Bill Cara issued a warning on gold about a week ago that has turned out to be prescient indeed. Remember also my call regarding a top in gold a few months back. Now I say that oil has seen it's top as well. It's back to 100 for oil.

shark- if you bought DCR at 1.04, it's looking pretty good this morning...

Shark, do you think the rumor of oil tankers looming off coast russia and middle east is an indication of supply glut?

Bill said yesterday:
"Oppenheimer analyst Meredith Whitney today on Bloomberg pointed to the worsening residential mortgage and credit card loan businesses of the major banks. This situation bears watching."

I'm certainly watching, but then I'm a bull.

Shark,"I may be the only dumb ass who bought DCR at $1.09 and managed to lose money on it."

He got stopped out of it now that is running higher...Ouch!

pressing the DUG trade/adding a position in SMN...

vinod- trying a little CALM at 31.46...;)

FXI down 1%, CAF up 2%...

Yeah what happened was I got stopped out yesterday. Missed big profits.

SUN- anyone pick it up yesterday? wish i had...

2nd
yesterday
i brought IBN/CAF/DUG/SMN/FXP
and wrote June 75 call on FXP at 4.70

Oil's coming back...Oh GOd!

I just don't think Oil is going to roll over so easily. It's always had us by the gotchya's and always will. Just a temporary setback.

closing shorts for now... can't stomach this oil volatility.

expected that we will rotate from energy to tech
and financial. but does not look like?

Oh, the humanity! Not to mention the freaking money.

Oil loosens it's grip just to re-tighten...

FYI, Bill is having Internet issues, but I went ahead and posted a new Daily Report and Community Chat on his behalf (without his commentary, of course).

Oil has to come down. I swear to God I could win the presidency on 2 issues. I'd promise to bring back 2 dollar gas (by pumping IRAQ and invading VZ) And I'd promise to end illegal immigration and to round up and deport the illegals. These policy positions are of course verboten in the American lexicon and will never happen, but I'd promise to do 'em and I'd win the presidency on these two issues. I am planning to write in my own name in november by the way. I wouldn't vote for these 3 jackals in a million billion years.