Cara 100 Update:

Upgrade:

YHOO - to Buy @ Stifel Nicolaus

Target Price Raised:

QCOM - from $50 to $54 @ Jefferies & Co.

Good morning

Cape Town is rather wintery, and that perhaps clouds my outlook.

I am not in the "end of the world" school, but also have little reason to see a more optimistic scenario for stock markets than “muddle-through” action, typified by sub-optimal returns. Although banks are looking oversold on short-term considerations, they would need a longer convalescence period in order to rebuild their balance sheets. And until this key sector shows clear signs of a reversal, I have difficulty seeing the primary bear trend turning around in a hurry.

Here is the link: http://tinyurl.com/49skbc

Cara 100 Update:

Seems that the ANALysts can't make up their minds on the YHOO situation.

YHOO - Downgraded to Hold @ Needham

airlines- if you're looking for a longer-dated alternative to DCR, which terminates in 9 days, there are some striking parallels right now between the airlines and DCR-> both trade inversely to the price of oil, both are at 52-wk lows, and both have built-in termination points (for DCR, it was oil at 111 for three consecutive days...for the airlines, sustained oil prices beyond a certain level would send many into bankruptcy)...

Looks like the XLF is going to move up today. The Rsi's are in good position for the move as well on the D/W/M.

Is there a live trading index that represents the US Dollar or the best one that tracts it?

"A U.S. congressional source told Reuters on Thursday that the U.S. Commodity Futures Trading Commission and Britain's Financial Services Authority are working on a deal to impose position limits for the first time on U.S. crude oil contracts traded on the ICE futures Europe exchange."
"An OptionsXpress spokesperson said, "There's probably a feeling among the hedge fund and index fund community that there is a big target on their backs." The same might be said for traders in commodity ETFs, which may get the blame for high oil prices before too much longer."

http://tinyurl.com/6s5w2b

CPI numbers out:

http://tinyurl.com/5nx5wj

Higher than expected due to surging gas prices, but, remarkably, core held steady. Meh.

Hypermilers:
I started yesterday. I drive a Ford PU with a V8. I travel about 100-140 miles/workday. I usually drive 70-80 on the freeways. Yesterday I kept it down to 55. Big rigs were passing me. On Tuesday my family is going to St. George, UT to rent out a 29' RV to visit the So. Utah national parks for a week. 8-12 miles/gallon. My route should keep me around 400-500 miles. Of course, I will have my laptop with Verizon wireless for internet access.

Vad- "Consultants at Mercer Consulting have picked Zurich, Switzerland, as the best place to live in the company's annual survey.

Consultants rated each city on a variety of factors including the level of traffic congestion, air quality, and personal safety reported by expatriates living in more than 600 cities worldwide. In the top 25, U.S. cities such as San Francisco, Boston, and Chicago were all edged out by Geneva, Switzerland, Vancouver, B.C., and Auckland, New Zealand. The highest-scoring U.S. city is Honolulu, which came in at No. 28."

OK, so you're on the island..close enough..

sorry- meant to point out Vancouver ranked fourth...

Re: Airlines

The whole paradigm that oil is adversely affecting the airline industry obfuscates the cost of capital.

I don't believe that sustained oil prices are sending airlines into bankruptcy. Airlines are subprime borrowers at best and can be relied upon to take out huge lines of credit when its available and declare bankruptcy as part of their business plan later.

Widening of credit spreads makes airlines unfeasible. They are also very heavily exposed to credit derivatives becoming 10X leveraged as a result, and their own debt is thrown in with tranches of real estate.

Part of the industry features arms-length ownership in major airports, and are thus able to grapple with municipalities anxious to play the airline game.

So another part of the industry is municipal bond debt.

Then there are the leases. Import Export Banks or Export Development Corporations provide taxpayer money to GE Finance, or other financial leasing companies who buy the aircraft and then turn around and lease them airlines.

Its airline's debts and obligations that demand airlines merge, regardless of how badly it might affect the business, the affect of fuel prices on cost runs a distant second.

CPST moving today on volume.

stktrader - Try DX-Y.NLB for tracking USD

F6- is the entire airline industry just a bad business model? personally, i don't know whether deregulation of the industry in 1978 was good or bad...but with the possible exception of a few carriers, it really seems they just haven't handled it well...(naybe i'm getting old, but i thought customer serivce and reliablity were much better when airlines and telephone companies were regulated- i suspect health care would be as well)...

XLF made a nice little impression of Icarus right there...

Given the China market performance last night and inflation numbers, I decided to buy FXP at 81.40. I will try to sell using a limit @82.50. We'll see what happens.

2nd - run a check of companies with high debt/equity ratios - amazing how the major airlines always show up - it's a bad business model as F6 described. So they perform better in declining rate environments and poorer in rising rate environments. Couple rising rates with high fuel costs and it's a recipe for disaster.

BTW I agree that some of these service businesses are better when properly regulated

Dave

Hi Bill, a nice little PDF of Seth Klarman in front of MIT and Whitney's video calling for more pain in Financials...
http://wallastoninvestments.com/seth-klarmans-speech-at-mit

bad business model? leisa's opening post today supplies the math: over the past ten years, "The [airline] index has lost 90.974689772043951238178538238671 % of its value. You can round that up to 91%."

http://theperplexedinvestor.blogspot.com/

Bought FXP @ 81.40 and sold 30 minutes later at 82.50. Tempted to try a few more RTs, but can't follow the news and broad market carefully enough right now to monitor the intraday trend.

"naybe i'm getting old, but i thought customer serivce and reliablity were much better when airlines and telephone companies were regulated- i suspect health care would be as well)..."

Funny, my wife and I were just talking about that last night and came to the same conclusion.

On another topic, Chinese renminbi keeps ticking higher vs. USD . . . Everbank's Daily Pfennig recalls "euphoria for Spanish pesetas when the Olympics were in Spain in 1992! But afterward . . . Things aren't so rosy . . . Could there be an Olympics bubble for China that will burst afterward?"

South African Reserve Bank raised rates last night, 6th hike in last year. Although past hikes stregthened rand vs. USD, Everbank's Chuck Butler doesn't think this hike will. Notice GFI down in early trading with a 10 handle.

http://www.growthstockwire.com/

recent discussion, i think by vinod, about picking up pfizer. I know you are more of a trader rather than long term investor, but the points made in this article are worth reading. stay away from falling knives, and keep us posted on the happenings at fido. thanks.

also, big uptick in beef component of inflation. the point was made here that this would eventually happen due to higher input costs (grains). there is also talk that meat producers will switch to wheat to avoid corn price increases, so this year's wheat bumper crop is not necessarily going to help prices. invest accordingly. and I have no idea which way that is :).

the only trade working for me the past week has been a small short of canadian financials.

i relish the fact that after all the carnage and writedowns, canadians still believe the analysts who proclaim canada has and will by and large escape the sub-prime dramatics because of our more conservative banking system... all while new multi-year lows are being carved out in most bank stocks. i think the crunch will come if one reduceds their dividend, and i believe it will be CIBC or BMO. as much as the TSX is up, i honestly wonder how many average investors who were sector weighted have seen their portfolio's move considering the heavy weigthing financials get which would likely drag down returns along w/ gold compared to spectacular gains in energy.

Agh! What's going on with GE? Nobody like financial companies anymore? :)

wavesmash

GE FWIW, saw a listing of inside purchases and GE insiders were buying . . don't have the link available right now. I sold some July GE puts the other day . . if put to me will be at 28.20

GE- "Nobody like financial companies anymore? :)"

that does it, in at 28.72...

Opened small position in YHOO @ 22.2

Chinese Renminbi - Olympic event travelers will be buying Renminbi. This alone doesn't seem like enough to cause an appreciable upward trend, but some Airlines might benefit?

Re GE, etc

Quite a few Cara 100's look cheap right now. Perhaps the best way to play these would be to write July-Sept puts for now.

If, as many expect, we find support around Dow 11,700 and S&P 1320, that would be a good time to load up on the underlyings, at least for a while.

Keeping an eye on GE,BC,WFMI,etc.

GE - Great call, too bad I'm all red today. Billy - my YHOO is red,red,red!!!! Sure wish I'd waited as long as you...

Chickenpookie

ZNH Chinese airline I traded years ago. Notice it's up 4.76% today. Think related to oil. However, note the RSI7 daily is going up thru 30 this morning. Interesting!

(No position, but monitoring although rarely trade airlines)

Not too familiar with puts.... if I want to buy 2-3 contracts for GE Sept Puts what sort of dollar outlay am I looking at, what price is the crowd moving towards and will I need to cover with the stock itself? I'd like to look at something close to being in the money so as not to watch them expire.

I'd like to hop in on a few for Sept... DELL, BC, PCZ... and BCE.

Can somebody walk me through?

wavesmash- you want to sell the puts, not buy them...

Yeh, I don't have the guts (wisdom) to trade airlines yet. Waaaayyy to scary.

Chickenpookie......

Airlines certainly are seeing some increased flight volumes for the Olympics and many have increased capacity to Beijing during August to accomodate the demand. But increased volume doesn't necessarily mean increased profit.

People plan many months if not years ahead for the Olympic event, so unless these international airlines have been following some strict hedging programs (i.e. hedging the jet fuel when or before they sell the ticket) , they are likely getting squeezed.

example: GE july 28 puts-> bid/ask around 1.10...writing (selling) 10 contracts (each contract represents 100 shares of the underlying security) will put about 1050 (1100 less commission) in your account...if they get 'put' to you, then you end up paying 28,000 for 1000 shares of GE...if you subtract your earlier 'gain' of 1050, then you've essentially purchased 1000 shares of GE at 26,950...(if the contracts expire worthless, then you walk away with the 1050)...

Correlation study among 25 major indexes and ETFs. Some rather interesting results:

DBA and GOLD: 0.97
GLD and FXE: 0.94
TLT and GLD: 0.90
SKF and DBA: 0.90
EWZ and FXA: 0.97
VIX and SKF: 0.76 (best correlation for VIX)

http://nexalogic.com/correlation-june13-2008.pdf

Numbers close to +1 or -1 indicate correlation.

If 1350 doesn't hold on the S&P today, I'm buying some DIA and SPY puts and riding them down to CT's targets.

Simple, easy, and understandable.

Nice short-squeeze in LEH too. Hopefully they can keep it going until at least Monday so it can hit 30 again and I can run for cover out of my calls.

Rob.

stktrader-

Summertime RV camping in Bryce/Zion sounds like the perfect vacation to me. I'd drive mine out there again, but it would be a 4500 mile trip at about the same fuel consumption as yours but in diesel. Ouch. So, we've decided on multiple short hauls throughout the summer as opposed to the grand one. It's all still good fun though.

Have a great time, that area is spectacular!

Morning flag on the XLF, literally at the focal point.

Good point Billy, Oil's got most all us by the gotcha's.

stktrader/gdiman

I did Bryce and Zion parks in 2001 - In those days gas cost wasn't even a factor at probably $1.25! I also hit Arches np in Moab and Mesa Verde in SW Colorado on the same trip. I hope I can get back out to Utah to do some camping some time in the next few years.

I really want to hit Lake Powell for some vacay - I hope there is water left by the time I get back.

Thanks for reminding me of some great memories - it helps my daydreaming.

Happy Friday y'all

TSO catching a bid on heavy volume...now up 5.7%

wavesmash,

Put writing or selling naked puts [to lower your cost of purchasing a stock] is a corner stone of Bill's strategy. It is one of the most important things I have learned here.

Rather than taking my explanation for it, I feel it's important you research and understand it yourself. It is not complicated, however, it does exposes you to large losses.

The CBOE (cboe.com, learning center) has excellent info + downloads.

Broker requiremnets for buying/selling naked options are also strict. Your account has to be set up with "level 4 options trading" for this purpose.

You should also talk to your broker about how they handle in the money options at expiration.

Thanks for the info. I figure selling puts makes sense if I'm comfortable owning the stock anyway... just want to make sure I don't dig a hole...

GE - Is smart money really going to buy this bell weather while it's dropping so quickly through it's 52 week low? Where have we heard this before: "Our UK mortgage portfolio is stable and we do not anticipate any material increase in write-offs and provisions," said spokesman Russell Wilkerson.

Who was it claiming everything was great just 2 days before a disappointing quarterly report?

"We will continue to be AAA with no external funding," Immelt said at the time. "I just want to be perfectly clear and very specific at that point."

Yea, I remember Nixon, still.

wavesmash

Reference options

If you have Bill's book, you can read up on options there. If you don't (yet), you can search this site. Bill and others have laid out examples.

Also, if you do make a trade, I recommend only picking one stock and focus on what occurs over time. I would not look to enter multiple positions ("I'd like to hop in on a few for Sept... DELL, BC, PCZ... and BCE.") for any first time option trade.

Chickenpookie

I'd stay away from the airlines. Traffic to the one time event Olympics should not effect the stock. Price of oil and currency valuation are very important as well as management.

Waves,
I am a level 3 options trader. That means that I need to be long the option that I want to sell. Matching longs for matching sells. The benefit of selling options is that you are most likely on the right side since most options expire worthless. The buyers of options usually lose. A trade that I use is to buy the leap of any given stock and then sell the call and the put 2 strikes above and below where I think the stock will trade on the expiration date. This month I bought a call and a put 70 strike Jan 2010 IWM(Russell 2000 stock) leap. I sold the June 08 71 put and I sold the June 08 75 call as the matching trades. This concept can be applied to any stock. I gentleman that I know deploys this method on 20 options at a time. He makes on average 3500-5000/month. I asked him how long it works; he said until you drop(dead).

Seamus - Great advice!! Sorry for laying it all out, hope I didn't distract anyone.

"This month I bought a call and a put 70 strike Jan 2010 IWM(Russell 2000 stock) leap. I sold the June 08 71 put and I sold the June 08 75 call as the matching trades. "

So is that similar to a straddle?

With long-dated options you can sell at any time and just lose the commission/variance in options price and not complete amount?

You are creating a boundary variance where you think the stock will not fall in order to collect premiums? Do you focus mainly on indexes or ETFs?

I have a few books on options including Bill's and I think the best way to learn would be to hop in and get trading with the community... thanks for all the feedback. Any tips on options trading would be interesting to me. (Why you entered the trade, what tools you use, indicators, which options to buy, etc)

Waves,
It is called a diagonal spread. The beauty of the leap which is a straddle is that there is no time decay so the price that you pay for the position stay neutral as the stock moves up and down. Buying in when volatility is low is the best time to enter this element of the trade since you will most likely be in the money most of the time. This buy side you keep on until a forward leap month becomes open; and buy the most liquid strike; the smart money. Where you think the expiration will end up on the nearest options month is where you put on the call/put sells on. If one side gets away from you you can cover on that side and immediately sell a further out strike to collect premium again on that same side. It's an easy trade to monitor. What I would do at this point is paper trade this position for a month to see how it works. IWM is good because the premiums are good and there is volatility; yet alot of reversion to the mean. My broker only charges $1/contract/side as a commission so moving in and out is cheap.

Waves,
The sells are two strikes each way from the expected expiration price.

Pump and dump, two days in a row?

FYI,

AP: "The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, sank 963 points Thursday to reach 10,142. The index had wavered, but remained above 11,000, since hitting an all-time high on May 20 of 11,793. The index, managed by the Baltic Exchange in London, had previously posted its biggest one-day skid of 443 points on Jan. 17.

But Fitzgerald noted that the Chinese only have about three to four weeks worth of iron ore stockpiled. After its resources are used up, Boyden said drybulk ships will again be in high demand to deliver goods to the country.

"This (pull back) is merely temporary," she said. "Painful, but temporary."

JPMorgan analyst Jonathan Chappell said in a client note that he expects the Baltic Dry Index to continue to fall through the third quarter, as the typically slow period will be compounded by an expected lull in trading around the Beijing Olympics and further draw downs of existing inventory by Chinese steelmakers."

taking a shot at GFI-> 11.10

The Bulls cannot hold 12200...they will lose it again before the day is up again. 11700 is their new line in the sand.

[Bill Cara note: We shall see.]

I too have been watching GE. I have decided to follow Mr. Cara's recommendations of following RSI to determine timing if I enter a position. From today's report:

GE 29.83 25.87 27.96 32.17

GE is not quite in the accumulation zone. I will wait for a 'buy' signal if and when I enter.

It is Wachovia's day to get whacked for 10%.

Re: WB/Wachovia
WB is south Florida's largest bank. It's one crisis after another for their management.
There's the recent DOJ investigation of possible money laundering;
a recent $144mil judgement against them in a telemarketing scheme of theirs;

the sentencing of a former WB loan officer to jail for 50 months for a mortgage fraud scheme involving luxury condos on....where else... Brickell Avenue! She was in cahoots with a title attorney(46 months in jail) and a mortgage broker ( NINE year sentence).

Another Regional bank, FITB, Fifth Third Bank, taking it on the chin today as well - it too did an 'Icarus' at the opening (great imagery, FattyArbuckle!)

Airlines

There's been quite a bit of talk about airlines lately by Caraistas.

If future market conditions diminish negative pressures on airlines somewhere down the road,
I would recommend two .... Singapore Airlines and LAN. They are the predominant carriers for Asia and SouthAmerica respectively.

Singapore airlines best in the world IMO. Great customer service.

Re: T-O-G

Adding some RTPIX at the end of the day.

Jim Willie has a good article today To read the full Article http://tinyurl.com/5dvzyg

Here's a couple of paragraphs

"Some very confusing factors are at work relating to the USTreasury Bond market and the gold market. To assume that gold will rise in kneejerk fashion in response to the gargantuan grotesque growth in monetary inflation (aka US$ money supply) is simply naïve for the public and amateurish for professionals. Never in the US history has more confusion reigned within the body financial. This is to be expected, since the US banking system is insolvent, in parallel to the US housing landscape being increasingly insolvent. The nation must soon make difficult decisions on rebuilding the United States, its infrastructure, its energy supply industry, and put down its military weapons used abroad. Some strange effects are detectable regarding the USTreasury yield curve changes in recent weeks. They coincide with the broader usage of the US Federal Reserve Lending Facilities. In my view, the USFed is slowly killing the USEconomy in order to grant a reprieve to a criminal collusion of corrupt Wall Street bankers. They lied, they cheated, they stole, and now they are being given money as that same funds are being drained from the private sector. The evidence lies in the USTreasury yield curve and gold price. Helicopter Ben Bernanke is more like a Mad Scientist draining the blood out of a victim on a surgeon's table. His helicopters only travel over Wall Street. He has become a tool for the Manhattan Ruling Elite"

"In the entire financial world, the two biggest enemies are gold and USTreasurys, the trading instrument of the USDollar. Given that the US banking officials are up against the wall right now, they will continue to inflate, and in doing so, they will work to bring down the long-term USTBond yield via direct monetization actions. To be sure, a strong rise in the 10-year USTreasury yield well past 4% toward 5% and beyond would create forces for credit derivative explosions and the total ruin of the US and Western world banking systems. The JPMorgan machinery has kept the long-term rates down far below prevailing price inflation levels. However, monetary inflation on an even grander scale, as is coming next, will be directed into USTBonds, regardless of price inflation. A profound irony, or conundrum, has been that long-term USTBond yields are a reflection of USFed, Euro Central Bank, Bank of Japan, and Bank of England monetary inflation. The USFed has cut the official interest rate several times. The market response has been to contradict. The USFed has lost control."

"Let's correct one of the biggest misconceptions out there. Fast rising energy costs worsen the USEconomic recession, forcing more asset deflation. Sure, they lift some prices, but they are costs. Money to pay for the higher costs are nowhere, with falling home values, vanishing home equity credit, tighter bank lending, ruined banks, restricted credit cards, and lost jobs with income. Bank destruction will worsen. Job loss will worsen. Wages do not keep pace, as long as China is a competitor. The Clinton Congress accepted the Trojan Horse, when they granted China Most Favored Nation Status in 1999. The maneuver betrayed American workers, sent jobs to China."

Looks like the PPT pumping again into the close to spank the shorts and try to reverse the psychology. I'm taking some heat but moved most options to July.

I blame them for that step up this morning. People always call that a spike, which is totally wrong. A spike is sharply up and immediately reverses all the way back. Commentators driving me nuts with "spike in oil prices". It's a parabolic rise.

Closed YHOO @ 23.23

DIA JUL puts eod

Still holding FXP from 2 days ago, up $2($78 cost)

I will enjoy the weekend at Bonnaroo and come back on Monday with a game plan, as I don't know what to do right now...

I was wrong the Bulls won the battle of 12200.

ALOHA !!

astral ... Yes ... still nobody makes a big enough connection between US Wages and the US government. Most of the higher paid jobs like union work is subsidized by the US government(aka:US Taxpayer). Nurses and doctors and hospitals are subsidized by State and Federal grants/bonds and through Medicare/Medicaid. Infrastructure and transportation all depend on the US government and need I say more about the defense contractors and the US military all being "cared for" by US Taxpayers. Tied to these higher paid jobs are 401ks and IRAs retirement plans and pension funds dependent on the US stock markets rising in US Peso terms. That is why the "money spigot" always goes to Wall Street. Its the "trickledown" and if there's anything left over the US Taxpayers fight over it! Of course we US Taxpayers are the one's paying for it but we are the ones that get the least in return per capita. There's your two party aristocracy at work for you! OBAMA = ZERO CHANGE! Look who's head of his finance committee and you will get a glimpse as to what types will occupy the US Treasury and the US FED on his watch!

ALOHA !!

Obama is loaded to the gills with Wall Street fraudsters ... So much for CHANGE! Ever hear of Penny Pritzker? She runs his finance committee! Here's some background info on her and her family. Obama sure knows how to pick 'em!

This is an amazing story of one American elitist banking family that really knows how to wrangle the US Taxpayer!

You won't even believe how the Pritzker's profited from the collapse of Superior Bank! Just amazing ... Just think, you kids get to clean up after the Pritzker's of the World!

Keep voting for Dems and Reps! YEAH ... thats what you'll get CHANGE! Financially all that will be left of your wealth is some "CHANGE" ... a few dimes and maybe a quarter!!

Go to link to read the rest ...

Link: http://tinyurl.com/5eu65o

READ ON:
Pritzker, Predatory Subprime Pioneer, Still On Obama Team

By Moe Bedard on June 12th, 2008
& Aaron Krowne

Barack Obama:

“Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay,” he told a crowd in Reading, Pa., last week. “There were a lot of predatory loans that were given out, a lot of teaser rates. Banks and financial institutions making these loans were making money hand over fist.”

But there is another close associate on Barrack Obama’s campaign that has flown below the media “moral character” radar… someone who makes Johnson look like an amateur.

Of course I am speaking of Penny Pritzker, billionaire (net worth $2.8 Billion US and ranked 135th on the Forbes List of Richest Americans) hotel heiress (Hyatt) and president of the Pritzker Realty Group. Also notably former president of the failed Superior Bank in Chicago. Currently she is the national finance chairwoman of Barack Obama’s presidential campaign.

Let’s take a look at the Bank that Pritzker was connected to. She knew exactly what she was doing and what the bank’s loans were doing to the people of her community and of our country:

OTS Closes Superior Bank FSB; Hinsdale, Ill. Thrift is Insolvent

Superior Bank suffered as a result of its former high-risk business strategy, which was focused on the generation of significant volumes of subprime mortgage and automobile loans for securitization and sale in the secondary market. OTS found that the bank also suffered from poor lending practices, improper record keeping and accounting, and ineffective board and management supervision.

Penny Pritzker and Superior Bank - Is she the innovator who founded the predatory subprime business model in 1993?

A quick walk down the Google memory lane shows that at minimum she was one of the pioneers of the model that has blown sky high now. Let’s take a look at how Pritzker and Bear Stearns started the subprime wave that has now turned into a foreclosure tsunami that is engulfing or Nation and now the world:

The purchase of Superior Bank:

The thrift had come into the Pritzker fold in 1988, when Jay Pritzker and Alvin Dworman-old social friends and partners in several past business ventures-put up $42.5 million for the insolvent Lyons Savings Bank, as it was then called, in return for an estimated $645 million in federal tax credits and loan guarantees. (By one estimate, it would have cost the government $200 million less simply to shut Lyons down.)

With all this talk about airlines , I am sure I remember Warren Buffet had something to say about them, I just googled and found this statement by him....ok for short term trading maybe in my view...

Warren Buffett observed that the world airline industry has not made a dime for investors in a century of manned flight. He said this in 1991, acknowledging his mistake in buying stock in US Air (now known as US Airways).

So today was Friday the 13th. Unlucky for some, well it was for those wanting a Yes vote on the Lisbon Treaty in the EU. I must celebrate with the Irish by having a pint of Guiness tonight on there rejection of the Treaty.

I just watched a TV doc. on the BBC earlier this evening , they were raking over the decision of Gordon Brown selling half of our Gold at the bottom of the market.the Bank of England said we got value for money and that risk was reduced 30% by diversifying into other currencies. It turned out that this move has cost us 3 Billion pounds thats nearly £50 for every person here had he sold in March08 instead.

The interviewer went on to talk to Brant Hinze boss of Newmont who turned up at a mine in Nevada on his motorcycle,and then he talked to Pierre Lassonde(sat there with bars of Gold all around him),
who stated that he was buying at the time Brown was selling as he realised it was the bottom for the Gold price.He went on to say that for the last 5 years he has said to any that would listen , that the Gold price will have 3 zeros after it and that the only question was what number would precede it and that it would not be a one.
After that interview the reporter then had a Gold Facial using sheets of Gold Leaf at a Health Salon,which is supposed make you look and feel younger if a tad expensive just less than £300 a time. His closing remarks after this treatment were, that he would feel a lot younger if someone gave him a Gold Bar and then let him retire to a Caribbean Island:)
Cheers, John

astral25 - Thanks for calling our attention to Jim Willie's article. As time progresses it seems much more difficult to locate compelling contrary discussion.

I knew the Irish would reject the treaty, hat's off!

I always appreciate Kaimu's consistant reminders. I too feel they're always after me lucky charms..

PBR has yet another major oil discovery in the Guara' area, 310Km from Sao Paulo, close to Carioca, where the other giant field is, but this time it is of light crude. Official announcement coming later.

Kaimu

Obama has raised #264 million so far...Miss Penny has been very good at her position
"Let me issue and control a nation's money and I care not who writes the laws." Baron Rothschild

Here's a related article to your last comment which is pretty right on the mark on the disgusting political situation we find ourselves in.

The full article can be read at http://tinyurl.com/6kzzuo

Here's a paragraph

"The inconceivable, utterly unthinkable fact – as I write I am telling myself it can’t be – is that on Tuesday, November 4th, unless God decides He has had enough and intervenes by giving us Ron Paul, the American people will elect a Communist President of the United States. The only thing we don’t know as I write is which Communist they will elect."

astral25,

I am unfamiliar with Alan Stang. But the obnoxious vitriol he spews from the link you posted has little to do with any kind of reality--it is sheer malignancy posing as political diatribe.

I don't care for any of the major party candidates. I have supported Ron Paul from the beginning of the current campaign and am sorry he has not made it into the final competition. But the Stang crap posing as political hyperbole is unworthy of consideration in regard to any rational dialog of issues, problems, options or feasible solutions.

The only thing more disgusting than the political situation we find ourselves in is the kind of malicious self-indulgence espoused by such as Mr. Stang.

http://tinyurl.com/3lxzse

http://tinyurl.com/6qnmbs

Saturday Morning Coffee: Bull-oney...heavily chart-based

Will the USD pop up and crude fall with tomorrow's OPEC announcement to increase production? How about the affect on POG? Where will the money go that's about to leave oil?

Anyone here selling their PM's on this news?

ALOHA !!

No ... but I am buying PM on this news from Feinstein & Co. !!!!

To me it isn't about the "limits" the CFTC places on investors it's more the fact that huge amounts of money can't find a place to generate returns that can stay above "real inflation"! This is nothing more than a symptom of a currency whose "store of value" has disintegrated to a point where "saving" no longer has benefits.

This brings me to a point of "money velocity", which increases as "faith" in the US Peso evaporates. Velocity increases as demand decreases ... right now the entire World would rather not own a US Peso.

There is no better admission of guilt by the US Congress via Feisnstein & Co. than the info provided in this news release that I got from her website. Read slowly and take in what she has to say in the section below titled "BACKGROUND" ... There she provides proof of concept that the fiat US Peso "monetary velocity" is going sky high! In that section she admits that "US Peso velocity" has increased 20 times since 2003, just in the commodity markets alone. What must it be in the US banking sector with unprecedented bailouts?

This is an important fact to not dismiss in your calculations. Monetary velocity ... Inflation feeds off high "monetary velocity". When nobody is "saving" money velocity is rising and so is inflation. When everyone is saving then "money velocity" slows as the US Peso is being hoarded, so that when people are saving instead of spending inflations slows. What are the US politicians and the US President, Bush telling us? S-P-E-N-D !!! We are the consumer economy driving the World's economies! What does Bush say to do with your stimulus check? SPEND IT! SPEND the US economy into prosperity ... Does anyone see the total lunacy of this strategy? This is why we need a SMALL GOVERNMENT so it does minimal damage. Unfortunately every four years we vote for BIG GOVERNMENT!

Once "trust" in US markets is gone due to political manipulations of the markets, either by "invisible hands" or outright "limits" imposed by Feinstein & Co., then the "C WORD" comes to the World stage ... "CONFIDENCE" ... The US Congress and the Executive Branch are working overtime erroding CONFIDENCE while Wall Street and the US Banks along with the US FED have gone above and beyond their call to duty to ruin CONFIDENCE. Right now the whole US financial facade is just a thin veil of FedSpeak and financial media SPIN!

Your US PESO is at stake here and if that befalls a "monetary crisis", like I suspect it will, then the American Dream of Debt and the false wealth it has created will turn our lifestyle Third World. We already have Third World politicians on Capital Hill awaiting their Third World Sovereign Credit rating!

The PM fundamentals only improve as the POG decends ... I see that as beautiful gift from the US FED!

READ ON:

FOR IMMEDIATE RELEASE:
Friday, June 13, 2008
Senators Feinstein and Stevens Introduce Legislation to Limit Excessive Speculation in Energy Markets by Institutional Investors

- Measure would level the playing field in energy futures markets -

Washington, DC – In the wake of growing concerns about the impact of speculation, U.S. Senators Dianne Feinstein (D-Calif.) and Ted Stevens (R-Alaska) have introduced legislation to require the Commodity Futures Trading Commission (CFTC) to impose the same position limits on institutional investors to which other investors now are subject. This legislation would essentially level the playing field in energy futures markets.

Under current law, CFTC is required to impose speculation limits on the size of energy trader positions. However, in practice, CFTC regularly exempts institutional investors from position limits, when investors execute their trades through brokers or dealers.

“It is becoming clear that rampant speculation in energy markets by institutional investors may be driving up the price of oil and gas. And yet, CFTC exempts these investors from the position limits that are imposed on all other speculators. This gives institutional investors an unfair advantage in the marketplace – and is contributing to the skyrocketing energy market prices,” Senator Feinstein said. “It’s time to level the playing field, and require position limits for all speculators. There’s no doubt that our energy markets are in crisis – and this is one important step we need to take to get us back on track.”

“These unsustainable fuel prices are crippling the economy and runaway speculation has a hand in bringing the cost of a barrel of oil towards $150. This bill will provide needed regulation of oil futures trading which Senator Feinstein and I feel has artificially driven up the prices,” said Senator Stevens. “This bipartisan approach, teamed with domestic energy innovation, is urgently needed to face America’s energy crisis.”

Last month, CFTC announced that it will review the trading practices for these investors to ensure that this type of trading activity is not adversely impacting the price discovery process. The agency also announced plans to determine whether different practices should be employed.

The legislation introduced by Senators Feinstein and Stevens would codify speculation limits in energy commodity futures markets for large institutional investors, ensuring that they are not able to drive up energy prices.

Specifically the bill (S.3131) would:

* Require CFTC to review the trading practices of institutional investors and their dealers within 30 days:
o To ensure that their trading is not adversely impacting the market, with respect to price discovery;
o To determine whether increased regulations are necessary; and
o To propose to Congress regulations and legislation necessary to prevent the dramatic increase in fuel costs in futures markets.
* Require institutional investors to report their energy market positions to the CFTC as other traders must do, even when trades are executed by a third party broker.
* Force CFTC regulations and reports to begin distinguishing between the institutional investors and the “swaps dealers” or “index traders” who broker their trades.
* Impose speculation limits on institutional investor and index trader positions, as CFTC imposes on more traditional market speculators.
* Prevent CFTC from considering the positions of institutional investors or their brokers to be “bone fide hedges” that would be exempt them from speculative position limits.
* Require that the Office of the CFTC’s Inspector General be removed from the CFTC Chairman’s Office and established independently.

Background

Recent testimony before numerous Congressional Committees indicates that between 2000 and 2002, major institutional investors, like pension funds, began to view commodity futures markets as a new “asset class,” suitable to be used in large financial portfolios. From 2003 to 2008, investments in commodity index funds rose from $13 billion to $260 billion.

As Daniel Yergin, one of the nation’s leading energy market experts put it: “Oil has become the ‘new gold’—a financial asset in which investors seek refuge as inflation rises and the dollar weakens.”

Kaimu - While oil may have become the new gold, it remains very difficult to carry in your pockets. IMO, trade must be equally accessable from all asset classes.

ALOHA !!

Nobody ever intends to carry it in their pockets! Oil is an asset that retains its value, but it is not "gold" and cannot be used as money. All assets are not equal, although the Banks would want you to believe that! Then is the US Peso and its debt(Treasuries and bonds)an "asset"?