Good morning

Sentiment deteriorated further during the past week as oil prices rebounded, more bad news in the financial sector surfaced, economic woes mounted and inflationary pressures intensified, compounding already-jittery investors’ anxiety.

In one of the most bearish reports for a while, The Royal Bank of Scotland advised clients to brace themselves for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us – be prepared," said Bob Janjuah, the bank’s credit strategist (who gained credibility after his warnings last year about an impending credit crisis).

Read all about this in my weekly review: http://tinyurl.com/62kvb6

“Lousy Fridays are often followed by rotten Mondays,” said Richard Russell. To which I add: When in doubt (and there is a ton of doubt), better to err on the side of caution than to do something stupid.

That’s the way it looks from here.

gold just nosedived to $879, but nothing on the ticker...

anyone?

I was wondering what would become of all these highly educated financial managers after they are fired. If they cannot find new employment, would they become private financial consultants. Maybe Bill could open a special educational section on his web site for these people, because they'll sure need it.

***Gold dropping like a...er...rock***

No one's certain of the reason behind the move down in gold today but reports are that a certain far-west farmer-type has removed the tin foil from the ceiling of his bedroom as the aliens have, according to reports, stopped trying to communicate with him.

In an unrelated story, the rap star 50 cent was seen attempting to pawn approximately 50 pounds worth of gold necklaces reportedly to fund his defense against charges of setting fire burning to hi Long Island house down with his wife and child inside.

It looks like a lot of them end up on FETV pumping and dumping for the media.

shark- too funny...but at least you're first with a story-> in the media, that's all that counts...

Does anyone have a good source that summarizes large amounts of insider buying/selling?

Maybe like a top ten for number of shares bought/sold or on a percentage basis?

im wondering if someone leaked an advance copy of Ben Bernanke's speech this week, something about inflation expecations are increasingly becoming an issue that the FMOC may possibly become concerned about at some undisclosed point in the future which may prompt them to possibly consider an interest rate hike of 1/4 point in late 2008 that somehow manages to send the US into a fully fledged bull market.... barf!

not sure whats going on but the price action last week wasnt convincing of a breakout, especially with the shares faring so poorly, and likely to get hit hard today if things dont recovery by EOD.

lets just hope this is all part of the broader consolidation pattern taking shape in the POG.

Insider buying: http://www.secform4.com/

Dollar gaining on Euro, ergo gold and oil go down.

The gold action appears to be preparation for both the incoming FOMC meeting and gold options expiration next Wednesday.

Some traders are considering this a buying opportunity.

DYODD. Please do not trade on this.

Euro Falls Most Versus Dollar in Week as German Sentiment Ebbs

This is Bloomberg story, maybe this was reason, excuse for Gold fall perhaps!!

I'm thinking the weaker Euro this AM and expectations of further dollar strength is sending GOLD down this AM. Maybe even fear of Ben raising rates on Wednesday could be contributing. If he doesn't raise rates expect the dollar to drop HARD and commodities to respond accordingly.

One day too late as well as my NEM puts expired Friday. I had already cashed out my basis but was holding the rest, hoping for today's slide sooner.

Rob.

selling half silver shorts

picking up a little SNDK @ 21.19...

adding to NOT.V...

Cara 100 Final Update:

NKE - Target Raised from $65 to $75 @ Caris & Co.

Finger Lakes,

why would you believe the dollar would drop hard if the fed doesnt move rates? most dont expect a move, and it has come of its recent highs after all the jawboning.

coupled with increased weakness in europe, if anything the dollar may be quiet following the annnouncement, or even rise if further jawboning keeps working to fool people.

i just have a negative feeling on how this is shaping up in light of Goldman issues a "sell" for the financials. usually seems to be a contrarian signal.

im utterly perplexed by the action the past while.

paring back on SUN at 39.84 (cutting exposure)...

Headfaked out of my SDS. I really thought we'd get more of a bounce early.

I have sick feeling this thing is going to turn very ugly.

Adding to YHOO @ 21.45

"Don't just stand there, DO SOMETHING!"

Adding AIG @ 30.82

dr. cosa,

I agree that the market action has been bizarre for sure.

IMHO The dollar has been rising because traders view the jawboning as serious. And if Ben doesn't follow through and at least make it sound like he'll raise rates soon or actually raise them then I believe the dollar will punch through it's lows.

I don't know about Goldman's sell alert. I tend to want to do the opposite of what they say and maybe many other people do as well so maybe they're trying to lure us to buy financials before the next big drop.

Rob.

Today is feeling like they want us to buy puts on financials and calls on energy companies and many people are doing just that.

It makes me think long financials and short energy may be a good play.

Rob.

Aviation: There are two kinds of pilots - Those who have landed with their gear up, and those who will land with their gear up.

Current month calls in XLF are outpacing puts by a wide margin but every other month has more puts than calls trading so far.

Rob.

FL

yeah i am thinking along similar lines,
just got out of my beta pro canadian financials short, after watching it run up the past week like crazy.

my feeling is that the fed has been speaking so much the past week barrying any intentional surprises the statments released will be much of the same carefully worded appeal to all camps by acknowledging inflation and the intention to monitor and eventually remedy it, as well as acknowledging weakness in teh markets while suggesting the worst is over to make people feel better.

holding rates steady is the likley outcome but you never know. 1/4 point cut may be more and more appealing in light of the market action the past few days.

im just not seeing any patter to gold, it could make a run of $50 either way with no real reason other than post-mordem proclaimations by all the newsletter writers who have been saying "gold is on the verge of a break out" for the past 3 months.

if i were an ETF id be a triple leveraged BARFER
ETF, ticker sympbol: "BRF"

J

Apparently George Carlin passed away last night...

There is a 3rd kind of pilot...Those who go smashing into something with their gear up or down.

That's funny.

I'll buy 20 Calls on BRF!!!!!

Rob.

Really stuck out my neck and loaded up a 2nd truck of DUG between 26.86-26.92

I saw a headline across my bloomberg screen reporting a flare up at BP's Texas City Refinery today with story to follow - I'm not sure of the extent of the flare - might be of interest to those following the refiners....

2nd, I have a large (relative to my portfolio) position in NOT.V. I'm curious what you like about NOT.V now. Is there any news on the drilling front, or possibilities of sale of interest in properties?

QT, I cut my position in FXP in half, and then traded the half that I sold two times in and out of FXP over the past two weeks. I will probably sell my remaining postion in the next two weeks if we get a significant drop, and will probably buy some more if it goes under 77 or so.

I don't think the Chinese market will hold up if there is a big drop in the US markets. I take a bearish view, which makes holding FXP attractive, although I will keep my positions smaller this time. As I said, I don't see the Chinese market decoupling, and frankly, I don't think that the government can keep it afloat if we get a serious drop in the US, regardless of the Olympics. BTW, my in-laws live in Beijing, and we spend a month traveling around the country every other year. Last year was Beijing, Putuoshan, Ningbo, and the Ming tombs...

I meant "if we get a significant drop (in the US market and corresponding rise in FXP)....

Aurelian up today:
Ecuador assembly head quits in constitution rift
http://tinyurl.com/5x9xzc

I'm looking for a mid-day rally on the S&P500 here and a green close - I'm still thinking we will need to test at least 1360 and possibly 1380 before we can go sub 1300.

Jul 90 put IYT is working.

Gold Fields halts Ghana project after "invasion"

http://tinyurl.com/4g7bmg

QT,

Boy I hope you're right.

Remember how aggressively Ben raised rates at the beginning of his term. Let's hope we see some more of that on Wednesday.

Rob.

BillySundance:

Be careful on Yahoo. From the technical field I know it's going to take them 6 months or more for them to re-cover. They have lost too many key technical people and much of the talented people they need to support long term gain: such as the people who did flickr... So they are in the middle of a very hard internal re-structuring. So I think if you play it right on shorts and such you can make money... but in the next 6 months I don't see them pulling any rabbits out of their technical hat to improve their business model. So long term I think Yahoo will suffer and go down a lot more before going up.

Who knows, but my experience of the tech companies when they hit this stage it usually takes 1 to 3 years to re-invent themselves enough to make a positive change, and it only happens if a key person steps in with a vision (like jobs at apple) Yahoo lacks vision and so lacks a future right now.

I think they will go much lower before going around higher.

Just my opinion

Does anyone think Ben will do something Wednesday to try and reverse this market slide?

I mean, who's he work for anyway us or HB&B?

If he did what was good for us he's raise rates. But what would be good for HB&B. Lowering rates would obviously help them tremendously. Maybe this crash was mainly in fear of him raising and when he doesn't we'll see another powerful Bear rally.

Rob.

But he still could play the hard-line and tell the banks he's given them enough for now. He just doesn't seem to have the will the Volcker had though.

With everyone in Government pretending there's no recession it would be hard to keep singing that tune in the face of higher rates.

Rob.

WAG - Wasn't moving, so NWPX looked better. Got out of NWPX early though, it wasn't performing as anticipated.

I think Ben is under even more pressure from the administration to not exasperate the housing crisis further. Raising rates may translate to increased mortgage rates, which would be bad news for housing. And that would in turn be bad news for banks who would see more foreclosures and bank owned real estate.

Casey - thanks for your input on Yahoo

I actually agree with most of your statements. The company has obvious technical/organizational issues that have hindered growth - and you are correct that the needed change may take a great deal of time.

But, I still think the company is a good value @ $22. I liken Yahoo to the ugliest house on the nicest street in town. The owners are old and outdated - they don't mow the lawn often enough - and the pavement has cracks.

But being the nicest street in town, all the neighbors are chomping at the bit to buy the house as soon as they kick the can - and the real estate it very valuable.

I think there is a real legitimate floor under YHOO stock, i.e. I think the long term risk/reward ratio at $22 is very good. I am not buying the MSFT cold shoulder - they would sure love to own a nice chunk of this real estate, and they are not the only neighbor that feels that way.

With that said - i am taking conservative position size b/c $18-20 is not out of the question on YHOO - but I think many fund managers are likely buying stakes and working on accumulating cheap shares to get enough support to kick these YHOO geezers off the block!

Rob:

Ben will do what he is told, and that is to lie and stir up confusion.

I think he does a pretty good puppy dog roll over act.

Hmmmmm I think Kaimu is rubbing off on me.

So Personally, I think its time to switch over my us peso over to the Canadian dollars since it seems right now the dollar is getting stronger.

And I am eying PMV at the moment and considering it.

everything else seems too chaotic still so cash is feeling good.

BillySundance: I like your comment

I liken Yahoo to the ugliest house on the nicest street in town. The owners are old and outdated - they don't mow the lawn often enough - and the pavement has cracks.

The only problem is right now too many of those Equity houses are crumbling. Reminds me of the crack houses and Bronx in the 80's when it was all burned out.

I think its time to invest in other "reality" as they sort it all out in a declining market... I hope you are right, I just don't seeing any other buyers for Yahoo. And MSoft made the right choice not to buy them, so I would be highly surprised if they went back even at better yardsale prices.

First time I brought this company (Avanti AVNMF.PK) to your attention about two weeks ago. At that time its price was 29 cents
Avanti Mining Inc.:
Avanti Mining Inc. (CNQ: AVMI) today announces the appointment of David Cohen as a director of the company.

Mr. Cohen is co-founder and Chairman of Eastern Platinum Ltd. and was the former President and CEO of Northern Orion Resources Inc. He has over twenty years of international experience, including operating and management positions with DeBeers, Anglo American and Fluor Engineers. He is a Professional Chemical Engineer and holds an MBA.

Craig J. Nelsen, President and Chief Executive Officer of Avanti states, "We are extremely pleased to have someone of the caliber of David Cohen joining our board of directors. David's extensive operating experience will be of tremendous value to Avanti as the company rapidly develops its recently acquired Kitsault molybdenum mine in BC

ProudPapa - I agree with your observations on Bernanke's direction. If the economy was overheating he could/would raise, but that's not the case. I think Bill is spot on where this is going...

Out of all the double inverse ETFs except SRS. That one might be good for 10 years.

Back into the refiners. Bought a slug of EWS and PWE to further get my money out of US Dollar based investments.

I'm late to the energy party, but I din't think it's too late. Also added some RIG and Seadrill.

Rob

"Boy I hope you're right." Me too fellow! I'm sitting with 2-22ft Ryder trucks loaded with DUG. :-)

Allen: Closed out [trailing stop kicked in] FXP too early Friday for a loss. But I'm OUT. AMEN! Like you I will wait for a big drop into the low 70s or 60s. Although those days may be over for a long time.

Casey - again, thanks for your viewpoints - 2 sets of eyes are always better than one - that's why this community works!

Marketwatch running articles about how Gasoline will fall back to $2/gal. hehe

scalping like an indian!

Never HB&B, only outside Wall Street
"Broadcom co-founder Henry Samueli to plead guilty in stock options fraud case"
"A prosecutor says Samueli is to be put on probation for five years and must pay penalties of $12. 2 million."
http://tinyurl.com/4xzdho

Anyone know why GG is up while gold is down?

Chickenpookie - a lot of gold miners on my screen are up today. Even though the gold price is down today, the USD exchange rate is improved for those who collect revenue in $ but pay mining expenses in foreign currency - at least that is my take.

Remember that the profit trend for miners is dictated by profit margins as opposed to purely the price of gold.....

Thanks Billy!! A new dynamic I hadn't considered. Did not realize share price was impacted by exchange rate. No wonder GG's been looking weak for weeks on my screen... makes trading more complex.

What part of this picture is more shocking, the middle or the upper right corner?

http://tinyurl.com/5z2we5

Even ECU up today, amazing, about time too

QT - That's a classic example of what happens when a pilot takes his eye off the ball. He wanted that great price so bad he forgot to put his gear down!!!

A lot of equity-income option writing CEFs (BWC/IGD/AGD etc) nosedived in the last few days - that has been a pretty good indication of upcoming market selloff in the past year.

At ten o’clock this morning, in perfect lockstep, AGU, MON, MOS, and POT executed an abrupt to-the-rear-march! and headed north. IPI followed suit a few minutes later. Anything to be learned here that one could profit from?

jiggstoo - Sounds like there are some traders that believe crops will be re-planted.. I don't see how yields could result this late in the year, though. My guess this is required by crop insurers. Short the crop insurers???

A good AG play? Invest in equipment mfgrs if you believe energy and steel will equipment makers a break. It's almost certain equipment demand will increase with the dredful farming conditions this year.

Thanks, CP, appreciate your thoughts.

Doubled down on DUG @ 26.53

Avg cost now 28.41

What I saw today was, I think, the most bizzare action in commodities in a long time: oil up AND SURPRISINGLY gold sharply down AND MOST SURPRISINGLY Canadian explorers up! Can someone explain today's action in Canadian explorers? What is that market correlated with?

DavidV

airlines and homebuilders got stomped...bill miller is either out having a couple of Millers, or he added to both positions AND having a couple of Millers...

Pro Shares holders.

Dividents are recoreded this week. Here is the March 08 stats for an idea of the payout per fund.

http://www.proshares.com/funds/distributions

That sell off in Gold looks very suspicious. Maybe the PPT threw a tantrum after failing to prop up the markets Friday on expiration day. When they fail to take down Gold at will, is when things get really interesting.

2nd: Bill Miller has been bottom picking the home builders since 2006 (LOL). Back then LEN was over $40; now he can buy all he wants for $15. What an idiot.

b0ss: Still thinking of going long on AMD? I wrote my AMD covered puts one session too early; fortunately, the puts have a delta of ~0.5.

Re: sell-off in gold:

"There was a monstrous spike downward in gold prices at about 7:15AM. There's no official news on what caused it, but the rumor is that there was a forced liquidation of a hedge fund. They sold their gold but held the oil."

http://market-ticker.denninger.net/

In the second half of '08, one or two major builders will file Chapter 11. And one or two more in '09. The damage to this sector is far from over.

Microsoft closed under $28 again. If things get really ugly we will see multi-year lows in this stock again. At that point, I'll feel the same way about MSFT as Bill does about Brunswick.

UPS going to hell in a brown handbasket. Halted, now down.

Bennett Sedacca is revising his 'financial hurricane' outlook to a 'financial tsunami':

http://tinyurl.com/5nf27o

He is saying to think outside the box because the old rules will likely not apply now.

Read this with an eye on the TOG.

Aurelian -

Do I have an over-active imagination, or have institutions developed a STRONG conviction that Aurelian will ultimately find happiness?

Last week's news: the draft mining law is more reasonable than expected.

Today's news: the leader of the Constitutional Assembly resigns, unable to move the process ahead.

You would think that a mining law can only be as mining-friendly as its underlying constution is fair and reasonable. And you'd expect bad news on the consitutional front would send Aurelian stock reeling today.

BUT, it closed up today 17% on higher volume!

I sold my GG today, will re-enter ~ mid-low 30's.

QT - thanx for the proshare div. info

UPS - Brown splashes down!!!

MXC - Should take a nice leap tomorrow if oil doesn't tank...

Back from vacation, no longer working with trading room.
And now will work with server team. With more money

Will be very careful to enter the market. Bill has said much time that we will hit 10000.
I look at five financial BAC/AXP/C/JMP/AIG, and PFE/MRK/GM and gives impression that we will go under 10000 soon. Will buy UYG when it is near $15

I think to pay more than $10 for financial in DOW is like overpaying

vinod- welcome back...

the $2/gal marketwatch headline (http://tinyurl.com/5hbkf8) - as far as i can tell traders are calling the energy committee's bluff on that testimony...which tells me dingell is trying to talk prices down and no one's taking him seriously...

2nd
At lunch time most trading room guy were saying OIL has to go down, if it does
We will have very good second half.
If OIL does not go down they expect that half of us will lose our JOB by end of year

vinod- i have no idea how/why oil got to 140...but if it's driven by speculation, then it will go back down-> maybe they should curb speculation just to rule out that theory...there must be a long line of (powerful) vested interests getting hurt by oil- hard to believe not one has yet gotten around to finding out why and doing something about it...

"Stocks of machinery makers and grain processors have stumbled, setting in motion a chain of events that could bring down more farm-related stocks".

http://tinyurl.com/3kmqne

does anyone really know why gold dropped this morning...no one saw it coming, and no one has yet reported anything definitive...oil will probably drop the same way...in the end, prices gap down because supply overwhelms demand...aside from parties involved, no one knows when positions will be liquidated...

Jock -

Perhaps the Ecuadorian constitutional rewrite will be scrapped? That would be good for Aurelian.

Otto Rock at Inca Cola news seems to think there are some machinations behind the scenes that will be to the miner's benefit.

ALOHA !!

GROUND REPORT
Just got back from Hilo and gasoline is $4.36USD per gallon! Still cheap because in JAN I was pumping gas in PERTH ans SYDNEY AUSTRALIA for close to $6USD per gallon. I swear there was no shortage of cars on the road either! So what's the game?

ON SPECULATORS
2nd_ave & vinod ... Why don't you define the word "speculators". My definition is "a speculator leverages and hedges the present and future debasing of global currencies". In other words, speculators are trying to make returns that are consistently above the true rate of inflation(not CPI). If our currency was a true "store of value" then "speculators" would have no reason to speculate because the costs of goods and services would be stable and markets would actually function without the need of constant government intervention(bubbles) and militarism because fiat money would not exist. Monetary velocity(which contributes to market volatility) and volatility resulting from supply and demand event functions would be smoothed and flattened to the extent these extreme fluctuations would disappear. What we have now is an extreme global monetary supply racing around the World seeking a return that can justify managers managing OPM and manager's extraordinary bonuses. Volatility is extreme because money supply and fractional reserve is extreme. Its all OPM(Other Peoples Money). Risky businesses tend to risk more under those circumstances not less(human nature)to make up for losses. I wonder what these troubled banks like MER and LEH and UBS are doing with all those billions of "temporary" loans and share sales? Who's money is the US government taking and "managing"? OPM! Is it any wonder there is such a record of dismal failure. If the US Congress had to spend their own money on their "pork" then there would not be any "pork"! Same goes for the traders of hedge funds and investment banks! It would be interesting to see where all these hedge fund managers had most of their money(not options ... money)? That would be telling ...

Still even sitting in cash in a CD is risky! That was never an issue in the past. Many things are issues now that nobody ever even considered issues back in the 1960s and 1970s.

ON LYCHEE
About an hour ago I ate about 30 lychee for lunch that I picked off our lychee trees. I also ate two mangoes from our mango trees! It's like shopping at SafeWay produce section only the entire produce section is trees! Anyone here ever had lychee? It is a red super-sized cherry only you have to peel it. Once peeled it looks like and is about the same size as a human eyeball. It even has the "imagined" texture and consistency of an eyeball! BUT man ... is it ever good! Juicy and sweet! I know the Chinese really like lychee(at least my Chinese friends say they do)and perhaps maybe lychee trees were imported to Hawaii from China or Indonesia.

I strongly believe the gold action today is due to FED/FCB intervention. I know this explanation smells conspiracy theory but given the other market actions today I see it a the simplest and most probable explanation.

kaimu- you can even find lychee ice cream in most bay area stores...

speculators- in a strict sense, they're not speculating, they're playing with OPM...in many cases, what they do with their own capital is not speculation either-> they create entirely predictable pricing discrepancies in the market by what they say and do, which they then exploit to their benefit...call that what you will...

vinod- i don't know about financial stocks in the DJIA all going down to $10, although it's possible...as ugly as things are right now, i still think we rally across the board, with the exception of non-refiner energy stocks and basic materials...

2nd
I took a look at each stock in DOW and got feeling that they are going nowhere for next six month. Yes we may rally. But it will be like one step forward and two steps backward.

Even if oil goes down that is not going to change status of financial stock

Had to watch Kudlow and Fast Money for comic relief. They may win an award for cluelessness.

Even that CEO of APC was clueless. Hire a F'n CEO who knows what he's doing, IMHO. Is this a toothpaste commercial???

That strikes some fear.

Those guests on FM are looking rather clueless.
They have opinions. They look scared when put on the spot. I think they know the game is over.

How hard is it to just say...

we are toast?

hehe

kaimu
"I also ate two mangoes from our mango trees!"
Mango is my favorite. I do order them from overseas every season.
Reminds me of childhood when we use to go to country side for vacation at mango plantation

How the hell do you slice a Mangoe, without looking like an idiot? It's like something off Ghostbusters.

DUG price looks good to buy, but every time I traded I lost money in DUG.
Total lost in DUG is 1200

Kaimu - IMHO, lychee has a subtle and disarming taste, which seems to "twist" as your chew and swallow the fruit. Almost other-worldly ...

Moab - no chance of the constitutional process being stopped. It's the path to "21st century socialism" -
wherein the gov't has a big role in natural resources, and all the leaders' friends get great deals and make big money ... Wait, that doesn't sound too different from the BUSH administration.

Aurator - here's a mango slicing tutorial

http://tinyurl.com/6lj9vm

Works reasonably well. Kaimu - any other tips?

Stv

Why should oil fall? I'm not saying there won't be pullbacks. I am actually in the green on my DUG trades. But is there a reason more than...its too high?

ALOHA !!

I have a friend who inherited a lot GE stock from his grandfather who was buying GE ever since 1955! Grandfather said to my friend before he passed away to hold onto GE and never sell and live off the dividends. My friends says the dividends he gets amounts to about $40,000USD annually. Not bad, but net after taxes is the key!

ON GE
If you look at GE's revenues like you would a car, then GE has six cylinders. Right now all but two are firing. Here is the breakdown:

-Infrastructure
-Industrial
-NBC
-Health care
-Commercial Finance
-GE Money

Only infrastructure and NBC are growing profits, which accounts for 45% of the companies future revenues. The rest of the 55% is losing profitability and weighing heavily on GE's bottom line and it does not take a genius to figure out why. Also GE's revenues are mainly derived from the USA and Europe and the Pacific Basin. That leaves out most of the emerging market countries like India and China. GE has totally misaligned itself for a recession/depression.

GE is the BELLWEATHER of the US stock market Fortune 500. There used to be a saying that "as goes GM so goes America"! Well Gm has been going down so now that saying is being quietly shuffled off into media limbo land! What will markets and the CNBC pundits say about GE if it fails. Its share price has plummeted some 24% in the last six months. In my opinion the only thing keeping GM afloat is they still pay a dividend, but aside from that I do not know how GM can afford to pay a dividend? I think GE is headed in the same direction and that is mainly because both companies made a HUGE mistake by moving away from their core business and into mortgages and loans. GE took it a bit further than GM and is even heavily into home loans in Australia and the UK. That's two foreign real estate markets now in correction, following the US real estate markets.

Sadly I advised my friend to sell GE and buy ABB(the Swiss GE), but he wants to honor his Grandfathers wishes. I understand that and honor it. I often wonder what his Grandfather would tell him today if he were still alive watching Bear Stearns collapse and Citi laying off 10% of its workers?

Look at ABB and you can see it is where GE would have been if GE didn't finance $200,000USD pool loans in San Diego! Also ABB is thick into China and India and emerging markets and OPEC. GE is not!

The CEOs of GE and GM have failed and I think Immelt needs to go, but I also believe he was stuck with some of Jack Welch's mistakes as well. Still as CEO, Immelt could have moved GE past that, but he froze in the headlights instead ... I guarantee you US Taxpayers will own portions of GE and GM before its all over! Heck, indirectly through US government DOD contracts we already do!

ALOHA !!

My above post on GE with some mention GM hints at the end about how US corporations are supported by the US government through government contracts. Foreigners are tired of supporting the US government via their purchases of US debt, so that leaves the US Taxpayer to pick up that slack.

Right now the US Taxpayer is literally being "taxed to death"! The two taxes that weigh heaviest on US citizens are income and "inflation"! Inflation is a TAX! Hidden, but it is a TAX. That is why I say the US citizens now have TAXATION WITHOUT REPRESENTATION! That is what caused the greatest revolution that began our Nation and deposed the KING OF ENGLAND! We revolted over taxes but essentially taxes are money. When a government spends and taxes its citizens into an inflationary spiral that debases the currency to the brink of worthlessness then that is the stuff of riots in the streets and mass civil disobedience.

Back to GE and GM ... So their most profitable revenue generators in infrastructure and that is made up of a lot of US government contracts. What happens to GE if the US government fails to perform or takes a severe sovereign rating cut? If the US Taxpayers fail, which if you look at any of the FY Budgets, is mostly made up of tax revenues from payroll, income and retirement taxes. Corporations in the USA hardly pay any taxes in comparison(52% citizens and only 12% US corps). Yet US corporations are depending on US politicians to hand over US Taxpayer revenues to them to stay afloat. Name me one major US corporation that does not get a government check!

The "conflict of interest" is just ASTOUNDING! This is what BIG GOVERNMENT and corrupt corporations in bed with BIG GOVERNMENT conspire. It all boils down to the US Taxpayer. You'll hear the US economy runs on the US consumer, but thats BS ... its the US Taxpayer that holds the entire house of cards up! Hey, the US Taxpayer is getting VERY tired!!!!!

ALOHA !!

While there is a report on US Consumer confidence, I have yet to see a report on US Taxpayer confidence! I wonder why?

ALOHA !!

Hardly a day goes by where I do not read a financial/market related news story where the US Banks and US Corporations are NOT unloading their worst liabilities onto the US Taxpayer. Who deos the US Taxpayer unload all its worst liabilities onto? Our worst liability is the two party aristocracy(Dems and Reps)we keep voting into power every chance we get! In 2008 we will do it , yet again, with the gusto and bravado of "CHANGE"! US Voters all deserve a tax credit for being BLIND! If there was a tax credit for "STUPIDITY" then we could easily qualify!

So ... offloading the worthless liabilities of US Banks and US Corporations onto the US Taxpayer is called BITING THE HAND THAT FEEDS YOU!

Its an "end game" with no WINNER!

Aloha Kaimu & Vinod et al.

Kaimu, I'm afraid Vinod has you one better when it comes to mangoes. Indian, and especially Kerala mangoes are the best and if one is lucky as he's been, they get shipped as far north as Mumbai.

No way, no HOW we get the same in the states or islands; and I lived in Hilo for two years, so I really *do* know. Lived in Kerala for another year, too. Pineapples come close, but please, let's not mention bananas. You don't know heaven unless you've had some Kerala bananas. Cherri parzhum -- ahhhhh!

Kaimu, I've long defended my occupation as a speculator and consider it an honorable profession. I'm a one-man pawn shop for securities. You want to buy oil for delivery in December at $140 a barrel? I'll sell it to you. My word is my bond. I could be wrong, but I'll keep my promise. I don't do it to leverage or hedge, I do it to make money off your foolish decisions. Want to buy some Ford tomorrow? I'll sell it to you, because I'm sure my vision of the future is better than yours.

My "vision", by whatever means, has allowed me to make decent living for more years than I can remember. It's also allowed John Q. Public to buy or sell his securities far more easily than he might if I, and other speculators like me, didn't make market by personally assuming risk.

I guess I'm carrying on because I don't think the definition of a speculator need involve big words like leverage and hedge. I trade, pure and simple. I trade my vision of the future for what you're willing to buy or sell today. That's it.

Which leads me to defend short-selling. If some damn fool wants to buy 100 shares of BSC and I can borrow it, why shouldn't I sell it to him? If the stock subsequently falls, is he any less responsible for his decision to buy than mine to sell?

I mention this because in every bear market scorn, calumny and eventually *law* is heaped on the short-seller as some sort of devil incarnate, when in fact all he was doing was making it easier for John Q Public to buy at a lower price than he otherwise would have wanted. Isn't that a good thing?

Bill asked for short selling strategies earlier this week or last. Here's one of my favorites:

Find a stock in a "railroad" decline. That's one in which the 200 day MA and the daily price action create a pair of equidistant tracks to the downside. The longer the tracks, the better.

Best if it has some news and a corp of die-hard followers behind it.

Wait until it bounces off $5/share, then short on the decline to $5, or under $5 if you want play it safe. The percentage gains from $5 to $3 are enormous, and they usually come very quickly in a bear market.

ALOHA !!

omphalos ... Its not hard to see you missed my point completely. Isn't a "trade" risk? If so, then why do you need to risk to make money(survive)?

If you come up with the right answer to those two questions then you will have made my point.

I have nothing against "traders" or "speculators" just why they need to exist and more to the point why we need a stock market? Why do we "need" a stock market anyway? Isn't it the same as asking, "Why do we need the Belagio?" HA!!

Study this ... "many fortunes will be lost trading the markets successfully ..."

Its not the "best" fruit I seek its just the fruit. I enjoy eating off the land and not SafeWay, thats all ...

Omphalos - Could you suggest an example stock (is Ford a good choice?) with description of complete procedure including selection criteria, for our practice? We need to prepare for shorting, for this will be an important move in the months ahead.

Thanks!!!

Teich,

sorry, just got back from a quick over-weekend trip to Greenwich, scanned through last days and saw your post on AMD.

Chart wise, short looks valid to me - it's a failure of breakoout formation, 8 being breakout level, 7 being (somewhat fuzzy) support. My only concern is, it's a very narrow-ranging stock. Not sure how big return one can reasonably expect on it. In order to lose support at 5.5 and go into miserable numbers, there should be some disastrous fundamental change occuring with their whole business, and that's a sandbox I know little about.

Kaimu - You are absolutely correct, Government is a huge GORRILA of infinite weight riding on the backs of US taxpayers. Not just Federal, but local also. Solution? - downsize or fail!!!

When was the last time we heard of gonernmental regulatory costs decreasing and performing under budget? Budgets are, with few exceptions, completely consumed or exceeded while most taxpayers have found it necessary to take on debt AND cut back, government has only grown larger and adopted policies encouraging and enabling the consumer to take on debt.

Where are the cutbacks??????? As someone here summarized, "We have the best congress money can buy!!!"

For many years, well paying jobs have been disappearing at an alarming rate in this country, beginning with unabashed announcements of the US shift to a service oriented economy. We need recovery of value-added jobs, not more hamburger flippers.

AMD - Many of us here have witnessed them return from the brink of death to trounce their competitors. Will this happen again? Unfortunately, I doubt it... The dynamics are very different this time around.

Will AMD continue their slide? Maybe not. when I was inside Intel, they always made a point of saying that the existance of competitors (specifically AMD) was to their benefit.

So IMO, AMD will continue to survive in orbit around the death star. Some believe this is an elliptical orbit, but my gut says not.