Gold spiked up to 90.05 this am....what is going on??? Banks down

Brunwick to lay off 1000 workers, close some plants.

Curbing speculation is foolish, warns LME
June 26, 2008

http://tinyurl.com/6k6bzv

"On Wednesday last week, Lieberman issued a proposal that could ban institutional investors with more than $500 million (R4 billion) in assets from buying commodities.

Soros said told the US senate committee on commerce on June 3 that the increasing role of speculators had led to a "textbook illustration" of a bubble in the oil market. "

As I have repeated the last couple of days - there is a serious risk in filling people's heads with this "evil" speculators rhetoric. Can you imagine the kind of black market for metals that would be created if a plan like that proposed by Lieberman were instituted? This guy appears void of an understanding of economics.

And sorry Soros, you may have had a nice track record but this crap just doesn't fly. Why isn't Congress asking for some testimony from Buffet? Selective testimony IMO.

Measures such as that proposed by Lieberman could cause supply growth of commodities to artificially decrease only to later cause a global whiplash. Commodities are our bare necessities - how can we even think of taking such action. I hate to be cynical but I have lost just about my last inkling of respect for Congress - who is gonna get up and tell it like it is?

Its increasingly clear that short term objectives have overtaken long term goals. The problems that hamper effective management of corprate America have infiltrated our elected officials. Does anyone try to think past the next election cycle any more? Moral hazard 101

Gold $910 +$25

Not that politics would EVER have anything to do with what happens in Washington. With the writing seemingly on the wall that the Democrats will rule in November (not that I have a particularly high opinion of either party), and the cure for what ails the US will likely be rather Draconian in process, would you think an administration might want to "stuff" it to their successors. Even if the next generation of rulers begins to take steps to repair the damage, the length of time it takes to revive the patient will likely leave the patient cursing the savior and throwing them out as the Sun once again rises.

buckling up...;)

sorry, Brunswick

Good morning, and a busy one for the ANALysts.

Here are your Cara 100 Ratings Changes:

Downgrades:

GS - to Market Perform @ Wachovia
RIMM - to Market Perform @ JMP Securities

New Coverage:

OXPS - Buy @ Sterne Agee
RIO - Overweight @ Lehman Bros.

Target Price Raised:

ATVI - from $36 to $40 @ Oppenheimer
ORCL - from $25 to $26 @ Friedman Billings

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

Have a great day.

Here's one of those stupid idiot questions I am prone to ask from time to time...Gold rallied for years because we were in a rate cutting cycle which was bearish for the dollar. Then, gold sold off over the past few months precisely because we had reached the apparent end of the rate cutting cycle. Now gold is rallying because.....rates are not being lowered?

This nonsense passes for logic only on Wall Street.

[Bill Cara note: The majority are thinking that the Fed will have to stay behind the inflation curve with interest rate policy, and that's why gold is moving higher. Next, though, there will be stories from Washington and Wall Street that inflation is no longer a problem and, as proof, they'll show you oil at $120, $110, $100... That will knock the POG down again until the public start to see that even at $100 oil, the inflation cycle is going to be a serious problem for quite a while. Then the POG will zoom.]

GS puts C on Conviction Sell List:

http://tinyurl.com/45trj8

Dear Shark,

I think the market thinks Bernanke is out of bullets, or at least the motor is broken on the boat. Where the USS Economy goes is now up to the currents. To be more precise, perhaps the inflation worry is seen as a devaluation lever. $ and fiat currencies down due to deflation=gold up.

Oops I meant the fiat currencies will deflate in value...

banks will probably test lows...all on the watchlist for possible entries today and tomorrow...

energy positions (as mentioned above) may be defended into monday's close-> does that make for better entries into/additions to DUG at monday's close?

may get an entry/re-entry point into the short bond trade...

shark- interest rates were in the high teens when gold peaked in 1980...

BH- if the 11000->rally->10000 scenario sounds reasonable, consider a few exits/re-entries along the way...

2nd,

When you're talking banks, are you looking for long or short entries?

Also, you and I could be retired right now if we'd tken every dollar we had and shorted DCR a few weeks ago, and you were right, 1.40 was a great price to sell at. Could you imagine shorting the bejabbers out of DCR a few weeks ago? And we were looking long. Stunad!

Man look at oil go...

shark- long banks...DCR- yeah, we were a couple of jamooks, man...

2nd,

Thanks. You're reading my mind. Of course, all that takes is 3rd grade reading level. :^)

shark- you can still retire early if you go all in to financials on the day of final capitulation and then wait a few years...but don't under-estimate the fear you will experience buying on that day...

That's my problem...I am unwilling to hold stocks overnight because I am a product of, and have all of my market experience in this insane bear market.

By the way, where's MIKE_NYC?

Good Morning, Bill - Not sure why you say you have no problem with the Fed, because you do go on to note congress should have a tighter rein; but let's not forget the Fed's role in housing and retiree savings income.

Sounds like your "Great Days" are coming a little more often, and we are all glad about that - Bish

[Bill Cara note: The "tighter rein" means the govt should accept the damn responsibility for monetary as well as fiscal policy. They are the ones that tax and spend. The Fed is supposed to be a regulator, not a key player. Why focus on the regulator is all I am saying. Let's start pointing fingers directly at the people who are causing the problems, including back up our own arms to We The People who are also spending more than we earn, and electing representatives who have already been bought-and-paid-for.

"Great Days" come from having a plan and sticking to it, especially where persistence is needed. Sooner or later, the hurdles become easier to jump, and the days are more enjoyable.]

sold silver calls - sidelines

I can also retire if I rob a couple of Brinks trucks but there's only so far I'm willing to go.

IMO what were witnessing on top of the housing bubble fallout which Greenspan warned about, are the results of opening the discount window to investment banks.

Speculation is the core of all markets. I say Lieberman's plan could never be implemented in a sane world.

The discussion should focus on limiting the conduit for speculation by closing the discount window.

I tried to buy some DIA puts just before the close yesterday but it wouldn't fill at the bid price and I didn't want to chase it to the ask price. Those would have been huge today. Oh well I'll wait for another opportunity.

It's looking like I made the right call getting out of DUG. I'll probably reload at some point. For now I'll just watch and wait.

Rob.

[Re failure to bid up to close the deal on the DIA puts yesterday, this is a case of woulda, coulda. If you had been convinced, you'd have closed the deal, and told us about it today! Maybe Vad can help out here because this is an issue for most traders?]

That's what I have been arguing forever. Cut off the irresponsible insolvent banks and brokers and let them fail and then use the FED balance sheet to support the strong banks left standing.

Rob.

shark- stop thinking about sticking up Brinks trucks and look around...this is your kind of day...get in the car with the radio on and cruise the back alleys looking for stuff getting thrown out-> WFC, HBC...or real trash like WM, C and CFC...you don't need to buy today...just enjoy the view...

ALOHA !!

I take a dimmer view of the US FED or in fact most other global central banks. I do not think you can have a group of private banks in charge of a Nations money.

I agree with what Bill says here ... "Congressional banking committees ought to be taking a far more important role than the Fed because it is the deficit spending and the growing debts of the US government that are out of control—not Bernanke’s helicopter pilot. Congress should have a tighter rein on the Fed, including the dictating of Fed policy such that the Fed governors become overseers/advisors and the staff becomes policy implementers."

So from that aspect why do we need a US FED since the US TREASURY could perform the same function? Our Founding Fathers never appointed "private banks" to have any part of issuing money. Naturally what Bill says also points to another of our Founding Fathers desires ... "SMALL GOVERNMENT"! Well, we have thrown that Constitutional concept right out the WINDOW!!! It is in private banks interest to control money and to make loans and to hold court over stock markets. Its all tied to a corrupt monetary system that breeds "spending" and like "liar lonas" if you give people or the US Congress an opportunity to live beyond their means then they will TAKE IT every time! Its just the human condition ... Fiat lends itself to all the most negative human traits ... ego, greed, power, dishonesty ... the list is long!

The USA was provided a US MINT and a US TREASURY by the US Constitution ... not a US FED! I just don't see how we can trust a group of private banks to act responsibly. I also admit that US politicians are not any better but it boils down to the quality of our money and right now that is not being improved at all by the US FED or the US CONGRESS. These two entities have become one in the same and their goals are exactly the same. TAKE ... TAKE ... TAKE!!! We need to clean house not just rearrange the furniture!

I met with a retail fund manager yesterday. He was mostly positive about US Equities. His biggest conviction was that the PE on the S&P is at 20 year lows. His view was oil will go down and we are getting close to the end of the bad news for financials....he used analogy of the 7th inning. He also is hearing that many of the write downs are being done more aggresively to get them out of the way this year and to make next years comparisons look better. He believes many of these will be write ups next year or the year after.

I asked about capital infusions and if he thought they were coming to an end. He thought again that we were getting close to the end. But his disclaimer was the issue of banks/brokerages needing more capital and the risk that the capitalists turn the spigot off.

I can't say I agree with all of his views and I know many here do not. He did have several good observations in my opinion and I'm hoping his view on oil is correct.

[Bill Cara note: The S&P 500 PE is where it's at because (i) the inflation cycle is in faster-growth mode than at any point in the past 20 years, and (ii) the economy is as bad as it was in 1990, about 20 years ago. I don't have a problem with the S&P 500 PE.]

Schleppy- thanks, that's the kind of thing we need to hear more often...

Re: Rate Hike Expectations

BCA Research has a very cogent comment on rate hike expectations, and why rate hikes are(were) not likely:

http://www.bcaresearch.com/public/story.asp?pre=PRE-20080624.GIF

Re: Crazy Prices With No Signs Of Inflation Or Deflation

Because regulatory laws governing commercial banks were removed to allow self regulation amongst the largest brokerages in the world, you have a systemic process where interest-bearing instruments are propped up against leveraged instruments not under any scrutiny. Part of the whole scheme is to tie the whole to oil markets, where rising price expectations are almost universal. It goes without saying this kind of expanding credit system was the foundation of the banking industry, which still goes on in the face of $BKX declines.

I think most people will be very surprised to see a decline in unsustainable oil prices, which have probably seen their peak @$140. But a word of caution on that, since oil's seasonality is sure to support oil prices until mid-summer.

Not gonna chase ultra shorts here. I've completely botched earlier trades in SDS, getting stopped out too early. Very frustrating.

Bought some SLW this a.m. The hourly chart told me to do it.

2nd,

Why do we need to hear "good" news more often? Does that not reveal a bullish bias on your part?

[Bill Cara note: I agree. I don't want to hear more "bad" news either. If we could eliminate bias, I am certain our trading decisions would be more effective.]

The day oil goes to $80bbl I'll be dancing in the streets and riding DUG all the way. I don't see it this year though. Not unless the discount window is closed to HB&B and their loans are recalled.

shark- i don't care if it's good or bad, as long as the perspectives are honest...

Schleppy, did you ask what this manager was buying for his personal account?

It's easy to talk up the market when your own money isn't on the line.

That S&P PE factiod is VERY suspect, btw.

Reloaded NOT.V today (added a little yesterday as well) for an avg. of $3.12. I think the days of increased value for ounces in the ground are moving swiftly upon us.

Political/geographical issues take precedence for me right now. There is also value in the comfort of knowing assets are protected by a valid government.

Also long WGW (avg. $2.28) which I have been holding for a couple months.

The demise of GM is truly sad, and an unfortunate sign of the times. Since the 1970s, management has shown an extraordinary lack of foresight. Now it culminates.

posted yesterday by "Finger Lakes"

"I think we'll see commodities along with Gold start soaring again tomorrow."

"I could see a major sell-off starting tomorrow since I think we need a higher spike in the put-call ratio before we'll change short-term direction."

Nice calls. (Rob... "The Wizzard" of Cara) does it again.

shark-I agree with 2nd I didn't look at this as good news/bad news just information that I got from him. His view for the 2nd half and next year was positive so it could be viewed as good.

#2son-we did talk a little about personal money. I got the sense he is mostly bullish but did have some hedges in there that he couldn't use in his fund....ie we spoke about DUG. He has owned it in the past and was looking at it again. He owns DVY which came up in our discussion of regional financials. I mentioned IAT which is all regionals.

The PE, which I know can be manipulated to show what you want it to, when looking at trailing/forward earnings and what earnings projections you use, was as follows. The chart he had was using estimated earnings of $100 for the S&P. In light of that he thought even if they end up being $85 the PE was still reasonable historically. I can't say based on this alone I would be bullish on LCap US Equity. He viewed this as margin of error since he feels the market is "cheap" using thee assumptions.

By the way he is a conservative manager in nature and does not deviate from Value 1000 more than 300 bps with his sector bets.

I do not own the fund personally or at our firm.

On a trading note.....stopped out of AIG for 5% loss.

SRS only thing green for me today.

number2son: Your post on GM is somewhat poetic (free verse style). I have re-formatted it below.

"The demise of GM is truly sad,
and an unfortunate sign of the times.

Since the 1970s,
management has shown
an extraordinary lack of foresight.

Now it culminates."

GM reminds me of a poem we studied in grade school, "Ozymandias" by Percy Bysshe Shelley:
http://www.online-literature.com/shelley_percy/672/

ALOHA !!

Look at these US FED-Bernanke comments taken from Bloomberg ...

- The FOMC said employment had weakened and financial markets remained under ``considerable stress,'' even as growth risks ``diminished somewhat.''
What total garbage that most sixth graders would say makes no sense! Growth risks have diminished? So US GDP growth will now rise since we have weak employment and financials? All I ever read is how many jobs are being cut at Citi and WM and how stores are closing all over the USA. Where's the growth in that?

Here is another ...

- The FOMC cited ``the elevated state'' of some measures of inflation expectations and dropped an April forecast of a ``leveling out'' in commodity prices.
So back in April they saw commodity prices as being flat in the future. They were completely off the mark! Imagine if the US FED was running your own stock portfolio or 401k! You'd be losing BIG TIME!

Here's another ...
- ... left its benchmark rate at 2 percent yesterday and said ``upside risks'' to prices have picked up. The statement also said consumer spending is ``firming,''
This statement contradicts total logic and is the complete opposite of say CONSUMER CONFIDENCE reports and their own BLS which showed large job losses. Firming? How can consumers keep spending?

Another one ...
- "They reiterated language from their April meeting that the Fed will ``act as needed'' to promote both economic expansion and stable prices."
HA!! Laughable ... look at the track record of the US FED since Bush took office. Where is the "economic expansion and stable prices"? Its been the total and complete opposite! Its been this way since I was born! If it was different then I would still be able to buy a gallon of gas from Chevron for $0.50USD! I could buy a new Cadillac for $7,000USD! I could buy a piece of gum for one penny! The US Dollar is now the US Peso. I mean is the US CONGRESS forcing Bernanke to put out false data and make poor forecasts? The US central bank is not a separate and independent entity who is unbiased and has no agenda of its own. Its impossible for the US FED to act on behalf of WE THE PEOPLE! It acts on behalf of WALL STREET and the BIG US Banks ... Its interests are not aligned with the US Middle Class and the US Taxpayer. Its another Social Security Trust Fund ... This is the USSA not the USA!

QUESTION AUTHORITY!!!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

anyone buying the $16 RIMM dip?????

Golden Star is rising the most, up nearly 8% today. I think this is because it is one of the most heavily shorted issues on the AMEX and the shorts are starting to cover.

Kaimu,

Does it not work both ways? Isn't it also true that money is only as honest as the government?

Freedom57 ... ;)

Moab,

Are you talking Golden Star Resources? It's definitely broken out and should be going up generally but according to bigcharts short interest in it is less than 2%.
What's the real story?

ALOHA !!

This says it all ...

OPEC chief sees oil at $150-170 in coming months
Reuters - 1 hour ago

PARIS (Reuters) - Crude oil prices could rise to as high as $170 per barrel in the coming months but are unlikely to hit $200 and should ease towards the end of the year, OPEC President Chakib Khelil said in an interview on Thursday.

OPEC and RUSSIA(Putin has more agendas)want to profit for selling off their valuable resources instead of holding US debt by selling on the cheap!!! One of the Saudi Royals already publicly asked the US government to stop spending. He said Saudi Arabia would increase production of the US government would stop spending. Of course that remark was overlooked and not studied one bit by the US financial media.

Then this ...
**** Crude futures gain nearly 3% on dollar weakness MarketWatch ****

Hummmm somebody spilled the beans! You mean when the US Dollar weakens oil goes up? WOW ... what an odd statement!

The real story is I'm very happy with my GS purchase!

From Bubble Vision:

A CIBC ANALyst just predicted that millions of Americans will give up their cars as oil rises to $150 by '09 and $200 by '10, translating into $7 a gallon gas.

Crapola...GSS purchase. Not enough coffee....

Rob, re: bidding DIA puts.

As you said, those would be huge today. Big opportunity rarely comes without increased risk, they are parts of the equation. So, as Bill said, it all comes to one's conviction and risk tolerance. Risk however is two-headed animal - there is a risk everyone knows about (risk of loss) and there is another head that is not as widely recognized - risk of lost opportunity.

How do you incorporate this second side of the risk when making decision? Weigh both sides against each other when decided on a trade, see how much taking an offer instead of bidding would have added to your "projected loss" - that is a loss you accept before putting on a trade. The cost of lost opportunity should be compared only to this size of the spread, not to whole stop loss, because whole stop is accounted for in the very original idea of the trade. In other words, your assumed risk consisted in this particular case of two parts: stop loss dictated by the idea of the trade, and added risk of taking the offer instead of waiting for your bid to get hit.

Now with all these factors in... what is your answer to the question "was saving on a spread worth missed trade"?

[Bill Cara note: Vad, thank you kindly for a superb response. This is a difficult issue. It's why some trading pro's get paid big bucks; they know when to pull the trigger. Of course, using OPM is sometimes a lot easier.]

At some point you have to factor oil analysts/talking heads smoking their own book and then blowing the smoke up our a...

I'm keeping an eye out for Bill's rotund operatic siren. You can hear her singing scales backstage to warm-up. Only problem is the roar of that helicopter....

Kaimu - Yes, spending is "firming". The trend is firmly to one side...down. Growth risks "Diminish" - Yes, growth risks will continue diminishing... until no growth exists.

All these statements show a great wisdom, don't they? I wonder when Bernanke will appear in emporers clothing.

any sign of the plunge protection team????

DOW: 29 of 30 components are red at this time, only KO Coca-Cola is green up 0.5%

A very rare event here - similar to last Friday when all 30 were red.

Dave

watermelon,

IMHO, the PPT reared its ugly head this morning by revising upward the 1st Quarter GDP. I don't believe it for a minute.

Regards

DJIA just broke Jan low (intraday)

Watching GM, can’t help but think there was someone in the room who recommended a line of fuel efficient vehicles over the years, only to be blown off by arrogant head honchos who knew better. I mean if TM can build some to complement their other lines, why can’t others? No proof of thoughts on this, just intuition based on some experiences.

Interesting to see F trade below 5 and
SNDK below 20 this a.m. among others.

Heading to the ballgame this afternoon (bleachers). Will let SDS position run.

Bernanke whistles a tune - Stocks Plunge, Oil Spikes. WTH????

trading halted on GEA.TO, Gold Eagle Mines Ltd

Ya gotta admit, the up/down/down/up action does present opportunities when your limits are set correctly...

2nd

After reading your late post last night I picked up some TSO @20.47

I think one of the problems w/ GM's thinking was they tried to add hybrids to what used to be their bread and butter....big SUV's. Instead of focusing on small, economic hybrid like the Prius.

The big (not so big now) three have not been auto makers for many years now. They've been truck makers....and just like everything else, it only works until it doesn't work anymore. For the first time in many years the top selling vehicle last month was not the Ford F-150, it was the Honda Civic. The times they are a changin'.....hopefully.

I wonder what Kerkorian sees in Ford? Any thoughts?

Would we see another gov't bailout like we saw with Chrysler for F or GM?

Schleppy, re. the sales side manager guy who was telling you to buy stocks based on valuation.

Mauldin last weekend was talking about valuations: "Today, if you go to the S&P 500 tables at Standard and Poor's, you find the current P/E ratio is a heady 22, with the long-term one-year average being 15.2. There is a long way to go before we get to anything we can call mean reversion."

Ok, the DUG I quietly bought yesterday just sold to completely offset all my market losses to date... Time for a Yuengling!!!

In 1/4 postion GE @ $27.03

I am buying ahead of their earnings in 2 weeks. I might be a little early, but I think this might have a short term pop to it...

GM and Ford missed the boat again, just like in the 70's when they were pushing muscle cars and tanks w/ fins.... the reliable fuel efficient asian cars moved in and haven't left...

Meltdown coming?

Long gold, short financials has been quite a trade lately.

Kerkorian has lost his marbles. He bought Ford stock way above market price in a tender offer. The auto companies are symbols of what is wrong with American business: they sacrifice short term gain for everything else as a result of small minded management. Toyota built themselves up over many years by focusing on process improvement at every level. This they achieved by teaming with their employees, because their employees knew better than management where the company could improve, down to even the smallest things.

Washington Mutual is in meltdown mode, losing 50% in a month. Banking failures may be coming soon.

[Bill Cara note: 'The end of an era'. or the start of a different kind of world for bankers who were intent on getting theirs?
http://tinyurl.com/5ockjc ]

Re: Kerkorian

Really, in these days of secondary lien derivatives, what's a few billion dollars of shares in failing auto companies when the notional value of credit derivatives swaps is probably 10X that and improving every day?

taking a little DUG/SMN off the table...

copied from Market watch page:
"The London Stock Exchange and Lehman Brothers said Thursday that they are planning to launch a pan-European share-trading platform .......
has been dubbed Baikal after the world's deepest lake.
... will operate as a so-called dark liquidity pool - an anonymous trading venue at allows firms and institutional investors to trade large blocks of shares in secret and avoid moving the listed price."
Wish I could set up one my own self

Re: Odd Thing About Gold Juniors

The odd thing about gold juniors is they are releasing news over work that was completed months ago, due to delays in obtaining assays at the lab. All of the labs are overwhelmed with a backlog, so we are seeing a news cycle in mid summer.

Si02-I agree the current PE of TTM is high at 22.
His PE was based on earnings estimates which all we know is that it will be wrong. The question is how good is the forecast?

Chickenpookie.....I love the Yuengling but am in Cincinnati and can't get it here. It's on the list anytime I'm in Charlotte or Pittsburgh.

Schleppy: Yes but they don't have Skyline it PGH.

Dear Bill,

I think there are some risks to your strategy of accumulating Boeing in the low 60's. Another way of looking at this stock is suggested in the following link at the bottom of this comment.

It suggests multi-year distribution and a significant breakdown from a very familiar distributive formation.

I believe your target is quite good for the short term, but optimistic for the down cycle which could get worse than currently anticipated by the "smarts".

Two very different projections methods are used here and both suggest more downside. It is something to think about.

I have not looked at Fib retracement levels or volume confirmation yet as I wanted to provide a quick assesment of the situation.

Note:
Bill asked me to fill in the info in order to give the community the best info he has. The chart that I prepared for the community is at the following link.

http://billcara.com/assets/BA26June2008.png

Hope that helps

The Word

Here's another thing I don't get...

How's the ultrashort oil and gas (dug) up today when oil's up 3-4 bucks and natural's up 13 cents? That's buggy, man.

Someone opined the other day that even if the Fed did not raise, and commodities rallied, that DUG will still go up due to a broad selloff in the overall market....not sure who, but nice call.

2nd - Are you riding the DIG/DUG coaster, or just DUG? I'm thinking to swap back and forth....

shark_attack

DUG is based twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index [not the price of oil]

Exxon Mobil Corp. XOM 25.07229819
Chevron Corp. CVX 10.85453138
ConocoPhillips COP 7.148783241
Schlumberger Ltd. SLB 6.348574586
Occidental Petroleum Corp. OXY 3.979433363
Devon Energy Corp. DVN 2.569932564
Transocean Inc. RIG 2.416943752
Apache Corp. APA 2.414883205
Halliburton Co. HAL 2.287084362
Hess Corp. HES 1.919688288
Anadarko Petroleum Corp. APC

$USD TA

http://stockcharts.com/h-sc/ui

The dollar has been forming a rising wedge (typically bearish in downtrend) and appears to be very near to breaking down today. The lower support line is in the 72.5 - 72.6 range and is currently being tested. MACD on the daily just made a bearish cross, RSI 14 is pointing down and dropping thru 50, same with the slow stochastic. The inverse is happening in $gold as it tries to break thru the $910 level. It appears we are at a critical junction. I have been wondering if the past few days of pushing gold down was in preparation of the FED meeting, so when the pressure was released and it popped it could still be contained within the consolidation triangle. Might still be too early to tell, but it looks like there is a lot of buying pressure today in gold and selling in the dollar.

Schleppy - I still haven't cracked open that Yeunglng but when I do I know it'll be good. I enjoy it most on the beach or on the water. Another of my favorites is Guiness, but rather expensive... The blacker the better in my book.

UYG @ 20.09, but jeez i hate going against fundamentals.

Hi Fatty,

I'm going to buy UYG when i sell SKF but I'm not ready to sell SKF just yet.

Regards

UYG @ 20.09? I would buy it right now at that price! I bought some XLF today $21.18, but will wait on UYG til Monday...

Bulls had better circle the wagons. SPU at 1297 represents a 786 retracement of the move off the March lows. Close to a tipping point-commodities (ags, oil, gold) are coiling and looking to attack overhead resistance. If the equity market can rally and close above 1311 I would consider a light long with a stop at the days low. Conversely, a close under 1295ish would be one giant caution flag. Whatever happened to quarterly window dressing? Put up or shut time for the bulls. Thanks TRIN.

UYG - I'm not sure if/when the financials fold but the likelyhood seems to be coming closer....

FXP Holders - Congratulations on today's success!!!

..."If we close here, we will have a decisive close below the 34 year rising trend-channel from 1974, which has catastrophic implications, suggesting a multi-year Bear Market is underway, or a Bear market that would be short time-wise, but deep price-wise, or both." - McHugh

So much for my refiner idea.

Booted NAK; a laggard on a day it should be up.

Argh... don't want to ditch my $31.90 GE but getting close... doesn't look like much support below $25.

Or is this just feer & greed?

Debating whether to pick up another share of BRKB @ $4k.

Is the weakness in ag stocks today surprising to anyone? I thought they would get some pop due to oil and fed. I may have pulled the trigger on mos early @145. Who said it's the most comfortable being just a little down.

NAK - used to own this but there is an effort in Alaska to shut this project down through a ballot initiative to prevent development near any 'stream'. This covers most land in the state. Don't know where it is right now in the process but it is a threat.

I would have ditched my GE when it broke multi-year support at 30. However, sometimes stocks rally back to test the breakdown point.

Lysander acquires closed coal mine in Ukraine. Interesting ...

GE has lost 11% just this month on exceptional volume. A move like that in a company this big is ominous I would think.

[Bill Cara note: With big hits to GE and Boeing, I am thinking that these are shaping up as the potential leaders for the next Bull market. It's often a case of First Down-First Up, particularly if the companies are themselves fundamentally sound.]

My apologies, UYG @ 22.09. No good to do this on an empty stomach.

Grabbed a little more @ 21.97, out if XLF breaks down below 21.11

Hate it when the UltraShort & the index it tracks have the same handle! Too confusing.

Freedom57: Your poem on Ozymandias is apropos. When you think about GM and the Ozymandias poem you can't help but consider the United States as a whole. Is GM merely a reflection of a larger pool of people? It seems as traders and individuals we have to be constantly on the alert for our propensity to become an Ozymandias in the face of our successes.

Wow, GM off 11%. Better try minus 3% financing.

Wave - GE will probably come back more, but I don't have any...

FWIW - I was looking at BRK-B a couple days ago and didn't really care for what I saw. Seemed like a big investment with tiny gains. Maybe I'm wrong?

Wonder if Bernanke's expectations are being met today? I think this severely impacts his credibility and confidence in the market, or what was left of it.

Aurator-I go for Gold Star myself but Skyline great too!

CP-I go for the dark stuff myself. I have a new favorite called Shiner Bock. I discovered it on a trip to Dallas in May and they have it in local stores.

Headlines of GM at 53 year low, C at 10 year low will spook the individual investor. We could see Dow 11k very soon.

Remember Buffet says be greedy when others are fearful.

MOT - is within 0.03 of its October, 2002 LOW !!!

I've considered the inflation vs deflation debate. I think the Real Estate Market may have given us a clue how it will play out. It seems as though CA, AZ and FL were the extremes and we've seen mean reversion in prices. However, in some of the other markets I have not noticed significant price movements but more of a leveling off in the face of increased inventory.

Watching retail goods, it seems the same. Prices, with the exception of special areas or items, seem to have leveled off. (I would be curious to know if others here have noticed the same.)

Then I've considered the last "great depression" and the seventies. One of the primary differences is fiat versus gold and silver backed. I would consider the 70's scenario more likely. What were goods selling for then vs now? Will we ever again see those prices?

As of this moment, my bias is as follows: Deflation will occur in some areas in real terms but in nominal terms they will seem to level while in other areas inflation will occur in both real and nominal terms.

I think it is reflective of Marc Faber's analogy to a bowl of liquidity pouring into this area then that area of the economy.

Can we have Inflation and Deflation at the same time?

http://tinyurl.com/4qsbz5

As I see, liquidity will dry up and FIRE economy assets (financials, insurance, real estate) will decline in value (deflation). However, this will kill the dollar and all internationally traded goods, such as oil, wheat, gold, ect. will rise in dollar terms as the currency is degraded (price inflation). This is a negative feedback loop that will put more pressure on profit margins and municipal spending. This doesn't even get into foreign funding of our deficits. If that is rescinded, all hell will break loose.

These ideas come from Itulip and Jim Sinclair.

Jock,

MOT's RIS are at 20.61 17.96 15.07. It is getting similar to what NT went through. It is a very bad time to be buying, but is MOT a broken company? Does it have major accounting issues or major management issues?

Nibbling GE and RIO.

VIX: Interestingly, it appears that VIX isn't yet approaching the area that tyically signals real market fear and selling exhaustion...

Thoughts?

Dave

airlines-> one of the outperforming sectors today...LOL..

unfortunately, can't say the same for refiners...

closing out SMN for now...

Another rally attempt beatenback by the bears

[Bill Cara note: the T-Bill yield has plunged -14.5% in 9 days from 1.96 to 1.68. Traders are bearish and risk averse. MMF (and gold/goldminer shares at least for now) is the save-haven play.]

Vietnam suspended imports of bullion, FT reported 2 days ago. Inflation is high, gov't efforts to control it have tanked equity and real estate markets. Vietnam had become the world's largest market for bullion, and then the (communist) gov't took away one remaining refuge - except, presumably, for the fatter cats, who hold wealth outside the country.

Trade in GSS is way over daily average and it is up 10%. Cover, cover, cover hedgies before you get your head handed to you...

Agreed...I would be selling the gadzooks out of GSS had I had the foresight to buy it. I did just make a couple of sheckels on a UXG scalp.

Boss, QT,
So I sold all FXP today, and will reload if we get a rally in the ST. I still don't believe the Chinese market will hold up if US markets drop. Bill's scenario of Dow 11,000, a rally and 10,000 suggests that I wait for the rally, buy again, and sell on the next drop.

GE,
O'Reilly is pounding GE for their business dealings with Iran and for the pollution dumping into several rivers that they won't cleanup. The selling is not over as large pension funds divest for the matters listed above. Social conscience.

Dave- doesn't come close to feeling like capitulation...

USO hits a new high...

You're right 2nd,

Last Augusts drop felt much more cathartic than this, and for good reason. That was an interim bottom, this is a probably pivot-point down. I know a lot about bottoms, I picked 3 out of the last 9 of them:)

Actually the expression is 9 of the last 3 of them isn't it?

Why is O'Reilly pounding GE? Because Keith Obermann called him the worst person in the world a few times! O'Reilly's producers then called GE to get him to stop and GE shrugged them off. So now he is going after them, including Immelt directly. Because CNBC called him names! And that old tape of O'Reilly losing it on the set of Inside Edition? I bet GE released it covertly as a counterattack. Reminds me of the markets - you have to put the clues together to see why things are happening.

I think GE is falling because of business conditions, particularly GE Capital, not this nonsense.

Geologix is falling on a day like this? Hard to believe.

I'm looking for support around 1270 with a big bounce as people cover on support and then probably another leg lower as earnings season gets underway.

some the bulk shippers are holding up well today for some reason. GNK and DRYS up about a buck each on good volumn

KGC, SLW, and HL are looking good.

NovaGold - why is it still going down?

After all, it used to be the darling of the gold world. Barrick had bid $14.50; NG had topped near 22 last November. But, now NG struggles to stay over 7.

For one, NG vastly underestimated costs at Galore Creek, which was to be the largest ever Canadian mining project. Funding partner TCK stopped the music - or slowed the tempo way down.

And now this news item: http://tinyurl.com/3huoqo
from June 10th. NG had originally projected costs at Donlin Creek at $2.5B. Barrick revised upwards to $4B last November. Now, a Citi analyst expects costs to reach $5B.

No wonder seniors are afraid to acquire even the most mature of "juniors". Intimate knowledge of a project (Barrick is JV partner of NG on Donlin) doesn't even seem to protect against huge cost escalation.

NG may HAVE 30+M oz of gold, but if producers can't get a handle on costs, what's NG worth? How much credibility does NG management retain after massive miscalculations on their two biggest projects?

The market is saying NG is worth $7/share, maybe - down 65% in 7 months!

allen

Looks like you did very well today. Remember the days when we both under water so deep, we needed SCUBA tanks to breath? ;-)

shark- i suppose the ultimate trade will be selling puts on (pick your poison) at the apex of volatility and the nadir of price...

GE - is the company just too large and complicated to be understood? Is it technology, industrial, tv or just one big black hole of a lending company?

DOW: all 30 components red today - 2nd time in 4 trading days - an amazing event IMO.

Opening 2x long China fund for a trade at eod today.

Dave

Believe it or not, GE is also one of the big health care companies.

[Bill Cara note: ...but isn't that a bit like saying Ben Bernanke has a little money in his wallet? :-) ]

yes I know I know, I sold UXG TRAGICALLY early, but that's one of my bad tendencies. I find sitting around in dog-doo stocks to be a disquieting feeling.

Gonna try UYG again for a premkt bounce: 21.38

Wonder what today would have looked like if Ben had raised rates.

Jock -

This article claims that Donlin Creek can only be gotten to by barge on a river that is frozen eight months of the year and that in order to get power to the mine a top power official said that they need to 'relocate the mine':

http://tinyurl.com/5sjdrw

"The DJIA futures are down -42 to 11789, which is just above the 11700-11750 range that many technical analysts consider as a strong support base, and which I think will break this week."

Bill Cara June 24th
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Was he on the $$$$ or what?

That's why they call him "The Trader Wizard"

That crystal ball is sure seeing clear as day.

Looks like lowest close on Dow since Sept '06.....it's miller time.

DIG - bought @ 114.5, sell limit set for 118.00 Hopefully we'll get there tomorrow and maybe buy DUG again.

From main article on WSJ site:

"The Dow industrials tumbled to a new low for 2008 as analyst downgrades of General Motors and Citigroup roiled the market and led to a selloff that left no sector untouched"

Thank god they are not publicizing the bull market in gold and PM miners yet!

I'm rather surprised to see Exxon and FRO didn't realize appreciable benefit from yesterday's court ruling.

I understand the herring population still hasn't recovered to any appreciable degree and the permeated beaches smell like gasoline 19 years after the accident. Each surviving fishermen plaintiff is awarded $15k to compensate for loss of their livelihood.

ALOHA !!

Jock ... Did you get my gmail earlier today on this subject? NG is allegedly one of the SPROTT/EMBRY shorting projects! They jump in private placements with cheap warrants and use them to short the stock after profiting from the share price run up. They may have been accumulating shares and warrants from years ago at prices much lower than the current share price.

This same techniques has been applied to CNU as well and QEE and some others. So it is not exactly a blessing to have Sprott buy in on your junior's private placements! This is just a hint as I do not have hard facts yet ... but when you see fishy share price movements that do not make sense then at least assume there is a "possibility" of some sort of shorting hanky panky, especially if Sprott is a major shareholder!

I also found out that it seems Blackmont hedge fund sold off some 500,000 shares into the last ECU 43-101 announcement, which would account for the slight share price appreciation on such a positive announcement.

Canaccord seems to have some irons in the fire on these juniors that are being shorted. I am getting this info from others who are tied to Jim Sinclair either directly or indirectly. I just found this info out yesterday, so I am still in research mode on that one!

More later as it becomes available.

[Bill Cara note: kaimu, I struck the part about what I (Bill Cara) think or don't think. I really don't wish to receive more threats of lawsuits! This is where blogging gets dicey. If you are going to make accusations and name names, you ought to have proof and present your case. You will likely receive respect for the DD. If the subject matter happens to be a popular one, however, and you are merely adding your opinion to a plethora of material, then that's a different matter. Have at it.]

Shark: I am with you on UXG... but don't worry it will go back down in the gutter quickly enough

I happily broke even on it, to get out. Better to have the cash and the flow right now than be walking the dog, waiting for it to relieve itself...

That's Taoist philosophy by the way ;)

Shark - I sold my GG with pretty much the same sentiment (and too early). I'm betting gold's going to see a major setback, providing an opportunity to jump onboard in a big way. Maybe this will be when oil does it's belly-flop.

No convincing ideas for what's going to happen after that, I'm guessing oil-dependant consumables inflation will be showing up in retail about this time while economy cooling continues.

nemo-

Ding, ding, ding, ding ding! Hands are totally off the wheel now.

Secular change in markets. Retail investor does not matter. Institutional investor follows Yale. Hedges and props determine short term.

Buy and hold is dead til the next bull.

GOOD LUCK.

Time to ask questions:

What is the divergence between price movement in Oil and Oil stocks today telling us?

Is it curious that with oil overextended to the upside, suddenly an analyst and Libyan bureaucrat start trying to jawbone it higher?

Is is more than curious that BA is tanking shortly before the date of record for their employee bonus plan that is based on the closing stock price(June 30)?

Is Goldman Sux's downgrade of BA just before that date of record a little smelly?

Disclosure: long DUG, CNSL, GFI, NLY. Looking to get long BA, likely on the first downward move after that June 30 date. Primarily a swing trader these days as my job is currently requiring lots of field time.

http://tinyurl.com/68p5hv

A scary What If?

Recommend you click on a video and listen while checking out the charts.

Thanks for bothering.

Excellent analysis Alaskan Pete!

best/worst buy candidates?

for a ST trade, the best might be the ones you're afraid to touch (i would put WM and GM in that category) or the ones that you feel have gotten away from you (FXP, USO)...the worst might be the ones you're very comfortable holding (GE)...NOT a recommendation, and i don't have the GUTS to go long any of the above myself...just putting it out there to see how it plays out...

clarification- i AM long GE, but thinking that would be a bad ST candidate from a contrarian perspective...

From barron
AMR (AMR) has a high correlation to the energy complex. While Avondale admitted it isn’t as perfect a hedge as the conventional ways to backstop those long positions, there is an argument to be made. If oil prices retreat, worries about airline bankruptcies recede. The big short positions building up in the air carriers would have to be covered. Avondale calculated that for every $1 decline in the price of crude, AMR shares have about 40 cents of upside. Continental Airlines (CAL) sports an equally leveraged correlation to the energy complex, while UAL (UAUA) has very nearly as much. All three stocks, meanwhile, have slumped to fresh lows as energy prices bulge in Thursday’s trading.

ALOHA !!

Okay Bill fair enough I am not here to expose you or others to lawsuits from wealthy and powerful hedge funds and analysts and brokerages who got where they are by using OPM!

The week of 01-28-08 Sinclair posted this at his website ... The following is public knowledge.

Jim Sinclair wrote:

The precious metal shares will certainly perform, definitely those that have not invited the hedge fund short sellers to run large riskless short positions in their company by taking money from hedge funds. Hedge funds are not philanthropic. They demanded huge option and warrant positions plus deep discounts and prompt movement to freed
and tradable shares.

This allowed them to be short without risk, and the hedge fund managers still are running those positions in many PM companies. That weakness has moved across the board, holding back the group. That weakness has very little life left in itself as gold running at $1,050 is going to bring new interest into the field, keying off technical
buying and thence short covering. END"

So I respect Jim Sinclair because he is making every attempt(short of naming names and companies)to assist in ferreting out causes for share price manipulation. Is he right? Is he wrong? I am leaning towards "right" based on what I have seen happen in my own life and what other people tell me happens to them. That's all I can go on since I am not a fly on the wall over at Sprott Assets or Canaccord or JP Morgan or the US Fed! These guys make you "speculate" since they lack transparency and the markets do not encourage transparency nor do the markets even bother to police the rules they put in place. Case in evidence Regulation SHO in the USA. I can't tell you how many times I have seen the same companies listed there for months ... Isn't the SEC the police for Wall Street?

If you want to know who owns large blocks of shares in any company you own whether a junior or not just go to the company website and it is posted in the "investor" section under "share structure" and if it is not call management to get a list. It is my experience that dealing with ASX listed shares they have major shareholders posted right on their websites. Sometimes I see that with Canadian companies and US companies but it is a hit or miss. I am not sure if that is an ASX rule or not or just standard practice. Other sources for shareholder lists like TOP 20 are annual financial reports.

ON THE INSIDE
During the tech bubble I was with Morgan Stanley in San Francisco,CA right at the heart of the Silicone Valley where all this tech mania emanated from. I was installing the very first CISCO VoiP system at a major Silicone Valley College with Merrill Lynch analysts looking over my shoulder! Being a full service client I got tips and IPO shares that were not available to Average Joe 401k on the street. Does this sort of thing go on just at Morgan Stanley in San Francisco? Do high net worth clients get preferential treatment just at Morgan Stanley San Francisco? Or do all brokerages operate like Morgan Stanley, even the ones in Canada? I can tell you high net worth clients at Morgan Stanley got preferential treatment ... YES most assuredly! They got first dibs on the IPOs with the larger share allocations to boot! I got them and I wasn't even one of the MAJOR players in that office!!! In those heady days it made millionaires into multi-millionaires!

I will share one example from a person I know who orders flowers from me about Canaccord. This is NOT me as I have never had an account at Canaccord, so I have no judgment on Canaccord whatsoever from a client perspective. All I am trying to do is put 1+1 together here! This is someone I know who has no real reason to lie that I can think of. So is this just an isolated case where it just happened to one guy only one time in all of Canaccord's existence? Probably so ...

Here is what he said:
Are Sprott and Canaccord compensated in any way for that inside information? A huge question. How do I know for sure that this occurs? A few years ago, I called a specific person at Canaccord about transferring my entire portfolio to a full brokerage account with them. However, I had a major condition first. I demanded to be given names of juniors that had current financing negotiations in progress. Wanting my business, I was informed that Canaccord was negotiating at that time with two newly forming juniors, Great Panther and Endeavour, which later became Endeavour Silver. I then directly asked if he had contacted any of the paid analysts with that info yet? I was informed specifically, that Jay Taylor and another famous subscription owner would be notified about the financing the following week. So, I was given one week to beat the paid analysts and become a full service client. I politely stated I would consider switching and then hung up. Next, I immediately bought GPR-V at .46 and EDR-T at 1.00 . The top broker I dealt with at Canaccord, had unintentionally leaked to me how the game was played by answering several direct questions I had asked. Sure enough, a week later , as informed, Jay Taylor announced both juniors in his hot list. I was a subscriber at that time. His entry prices for his subscribers were both much higher. I had beat the service I was paying for.

By the time both Sprott and Canaccord release public news of any new junior financing, the share price has already been bumped up twice. First by full fee clients, then by paid analyst hot lists. The paid subscription services rely heavily on these inside tips from financing companies. In fact, I believe that learning about new juniors forming where large brokerages are in current negotiations to finance, are the most desired entry points in the sector. END

Lets see does Sprott team up with John Embry touting stocks they own, buying on the cheap and do they use Canaccord or visa versa? All three are linked and if you want proof of that symbiotic relationship then go no further than the link below. This is right off Canaccord's website and
is an interview where Eric Sprott talks about his "sidekick" John Embry and they discuss their junior stock picks. Kind of an internet MAD MONEY Canadian Juniors style! Check out the companies and funds they mention and then research as to how well those picks are doing now. This interview was from just over a year ago. Some of you have been posting about these same companies Eric Sprott was touting a year ago. I got burned by one ... CNU! Company share prices do not go down for any one reason, there are a number of reasons like country risk or poor drill results or even ABCP(Asset Backed Commercial Paper), but who is in the best position to help a stock go up or down? Usually that honor goes to the largest shareholder/s!

What I am saying is that share prices move for all sorts of reasons and sometimes the movements make no sense. Does the hard working CEO of CNU or any of the geologists have time to watch what Sprott and Embry and Canaccord are doing and saying 24/7? Can the CEO or geologist even spell "SHORT"? They definitely were not schooled in Stock Market 101 when they majored in Geology in college. These guys have their noses in the dirt running their fingers over core samples all day trying to bring value for shareholders the only way they know ... by finding an economical deposit and turning it into a mine. Now that in itself is hard enough without having to screen who buys and sells their shares at private placements and in the open market.

So who is it that Canaccord is interviewing? Is it the CEO of these juniors? Is it the geologist? Is it one of the smaller shareholders? Is it a mining official from Mexico? Is it the drilling company foreman? None of the above ... Just by choosing Eric Sprott and John Embry and giving them the forum to dictate share price direction says quite a bit about Canaccord. They know that about 95% of those who read that interview will not turn around and do their own due diligence. They will buy because John Embry says so or because Eric Sprott is on Canaccord, because Canaccord is a big brokerage that would never steer you wrong!

So do your own due diligence is the lesson and then sometimes that doesn't even work out the way you planned!

From now on I will study my list of "questionable shareholders" before I buy junior companies. Just another step in the process is all.

Link: http://tinyurl.com/58yw95

[Bill Cara note: Independent traders have every reason to be suspicious of the junior capital market. Those stocks aren't bought; they're sold, and the sell-side includes an international network of broker-dealers, stock promoters, newsletter writers, and so forth. Selling is a business. Laws are broken every day. Securities commissions have a duty to look into these matters but I have never known an investigator on the regulatory side who knows half what kaimu knows, so how is the public going to be protected? Besides, they are too busy looking after friends in high places. Maybe that will change with the start-up of a new Investor Advocacy Foundation in Canada? Hope so. Can't see the SEC chasing people smaller than Martha unless the crime is so egregious they can't turn a blind eye.]

vinod- thanks for the info...only trades i made today were sales of SMN and DUG...hope to see buying opportunities soon...hope you had a good day, even if it was just watching the carnage from the sidelines...

anyone else think the right approach now is to buy ETFs or mutual funds? when it all gets sold, why try to hand pick stocks...why not just buy quality large caps? less stress, same potential return...counter-arguments welcomed...

2nd
I do miss the market, but because of good money I took new job with server team
I did buy some today
Buy 200 Shares of IBN
Details Filled at $30.97
Buy 100 Shares of VLO
Details Filled at $41.279
Buy 100 Shares of TSO
Order Number:F26CWMKC Details Filled at $19.80
Buy to Open Call 2 Contracts of -OEYHA
Details Filled at $9.50
Buy 100 Shares of UYG
details Filled at $21.3877

2nd
I am hearing that financial are still too high
Mutual fund are raising cash
interest rate is too low campare to CPI

vinod- so you're going with DJIA financials all at 10? ;)

2nd, I've started turning back toward some mutual funds this year, adding to as they drop (kind of like what I see you do with stocks, going counter-sentiment). Mainly to build positions in small bites for the longer term, specially with miners. I'm still in the red, but not by too much.

Vad,
Thanks for the insights. I should have just paid the ask price but I guess I wasn't sure enough the market would crash today to pay the extra premium. So, I weighed my risk of losing money higher than my risk of losing opportunity and lost this time. But tomorrow is another day and I'm locked and loaded.

I actually missed all the action today because I took the kids to the zoo and to Dinosaur BBQ. They loved it.

Rob.

Correction, not in the red with miners. Down in Asia fund 10% ytd.

2nd
Financial is for couple of days only, if it does not work out I take lose and get out.
There is no Hope in reality
Also will get in airline tomorrow. I usually put price to buy and some time it gets filled and some time does not.
Guy at work gave me china ETF PGJ/FXI/CAF/GXC. He said FXI and GXC are heavily in financial

I still think the VIX and put/call ratio has to spike quite a bit higher before this selling wave is over.

With that said I'm buying those DIA puts during the next rally attempt. I'm thinking we try and rally back to 11750 and that will provide resistance. A Jan 09 straddle would work great as well if it approaches 11750.

That way I would get upside from the further move down and also the upside from the late summer-fall rally.

I feel like the time is approaching to make a year's salary in a few months(or weeks).

Rob.

2nd,
I agree totally. I've been having a much harder time lately with single stocks as opposed to the indexes. I've made 90% of my gains from index plays and the rest from individual stocks. One of the reasons could be that with short-term direction controlled by the hedgies and props(if it's true) they're all going after different stocks in different ways making individual stock action much less predictable.

Rob.

"Nothing has been a more reliable indicator for an upcoming recession as the price of Oil. Every major bear market, every major economic decline has been preceded by a large spike in oil prices. The 73-74 recession, recession of beginning 80's and the recession of 2000. Oil prices jumped 80% between 1999 and 2000. Oil prices have been the most important indicator of major economic disasters. Whenever Oil prices rise about 80% from year ago levels, a fair chance does exist that a recession/bear market will follow."

-Stephen Leeb

Here's some info on predicted oil production from Kingsdale's site: Maybe it ain't speculation...

http://tinyurl.com/6r3rbz Oops

Hey everyone, I'm going to take the blog system down for an hour or so, in order to make a few changes without having to worry about losing comments. I'll post when people are able to comment again.

- Jeff

[UPDATE: I was wrong, this will probably take longer than an hour]

When is the fed going to learn that saving the banks is secondary to saving the economy? Some banks will survive and some will go under, but the economy will go on if it means jacking rates up to subdue commodities inflation. Extra money in people's pockets will allow them to spend, which will pump money into the economy.

I'm sick of listening to their and the Treasury's "we're interested in a strong dollar". DO SOMETHING NOW!

2nd: ETF's, Indexes....not a bad way to play and have some built-in diversification, which in this tape isn't a bad idea.

I saw you picked up some GE the other day as did Aurator today. I started a very small position today in the mid 26's looking forward to Bill's call of 25 +/-. Noticed MON sat around 127-128 all day and also started a few shares there. I don't think food, fert, seed, or herbicides will go out of style worldwide.

Sold the GSS up 8%. Also hope TSO holds the 20 area, but will add more if it pulls back even more.

Really taking a look at WM at $5. Take a look at that chart....scary....

Hey People,

FWIW, my local news station, worthless save for stories about local robberies and the odd car crash reported tonight that UBS (which has a big office in nearby Stamford, remember the guys who wouldn't hire me?) is going to be bought by HSBC for a price north of the present share value). This could be good for a trade tomorrow. Or not. Don't buy it unless it's going up:)

It appears some of you already figured out that you can comment again. ;) If you can read this, you should be good to go. Report any problems you find to jeff at billcara.com .

Maybe HSBC bought the credit default swaps for UBS betting they'll improve.

Then they come in to save UBS and make way more in the credit default swap trade than they think they'll lose from UBS's liabilities.

Rob.

GSS - power price increases in Ghana.
"While the details are still being negotiated, we expect the power rate increase to be effective July 1, 2008, with rates rising to a range of $0.20 to $0.24 per kilowatt-hour (kWh) compared to the present rate of $0.10 per kWh. For Golden Star this new power rate would translate into an increase of $60 to $85 per ounce based on forecasted production."
http://tinyurl.com/6zqf2p

ALOHA !!

So now we have the US FED according to Barclays with "less than zero" credibility. This group of private banks(US FED)were tasked with growing the US economy and stabilizing prices while all along they have been talking up a STRONG DOLLAR POLICY!

There isn't enough savings or tax revenues to pull the USA back from the brink like Volcker did in the 1980s. All he did was delay the monetary crisis, since neither banking or the US Congress bothered to change their ways. We're still policing the World and fighting WW3. These are extreme highly inflationary pressures and when you add in the US Bank bailouts then its like a double barrel shotgun blast that was not present during Volcker's reign! The funding for retiring baby-boomers now retiring has been spent long ago by a US Congress eager to be re-elected and not eager to uphold the US Constitution or any of their predecessor's commitments. The US Congress has been saying we can have our cake and eat it too for as long as I have been alive!

CONFIDENCE is at stake here and now one of the major global banks is foretelling a monetary crisis since a central bank with "less than zero credibility" is essentially Zimbabwe! Why again do we need the US FED? What has the US FED done right in a half century? All I have ever seen is the US FED take care of its own member banks and the hell with the rest of us! That's not something I want my tax dollars supporting and I sure don't want my kid's tax dollars being wasted there either! Really, only the US Taxpayers is supporting the US government. If the US Taxpayers quit then the US government is done ... and the US Taxpayer is looking very tired and angry as each day passes ... There is zero room to raise taxes and zero room for savings so why bother raising interest rates, since the foreigners through the bond market will force higher rates for us without the US FED's consent. Who's going to want US debt at these current yield levels? When tax revenues dry up then foreigners will focus on default and at that point yields will never be high enough!! If States and Counties cannot fund their bond issues right now then that leaves Federal funding. Debt and the need for bond issues means only one thing. There isn't enough tax revenues to pay for our current standard of living and the current government promised benefits and amenities we have grown accustomed to. Once you've taxed out the rich like Warren Buffet suggests, you're on empty as a viable government. Why go to work and pay your bills if you know you can't keep your head above water? A lot of Americans are now facing that reality ... Really it is because we have a corrupt currency that does not work to our benefit any more. The free "reserve currency" ride is over ... Time to get real and NOT listen to the ones who own Capital Hill for a "CHANGE"!

READ ON:
Barclays warns of disaster as Fed loses all credibility

By Ambrose Evans-Pritchard

The Telegraph, London
Friday, June 27, 2008

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero."

"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock under way. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.

The grim verdict on Ben Bernanke's Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank's dovish policy statement on Wednesday. Traders said the Fed seemed to be rowing back from rate rises. The effect was to propel oil to $138 a barrel, confirming its role as a sort of "anti-dollar" and as a market reproach to Washington's easy-money policies.

The Fed's stimulus is being transmitted to the 45-odd countries linked to the dollar around world. The result is surging commodity prices. Global inflation has jumped from 3.2 to 5pc over the last year. Mr Bond said the emerging world is now on the cusp of a serious crisis. "Inflation is out of control in Asia. Vietnam has already blown up. The policy response is to shoot the messenger, like the developed central banks in the late 1960s and 1970s," he said.

"They will have to slam on the brakes. There is going to be a deep global recession over the next three years as policy-makers try to get inflation back in the box."

Barclays Capital recommends outright "short" positions on Asian bonds, warning that yields could jump 200 to 300 basis points. The currencies of trade-deficit states like India should be sold. The US yield curve is likely to "steepen" with a vengeance, causing a bloodbath for bondholders.

David Woo, the bank's currency chief, said the Fed's policy of benign neglect toward the dollar had been stymied by oil, which is now eating deep into the country's standard of living. "The world has changed all of a sudden. The market is going to push the Fed into a tightening stance," he said.

The bank said the full damage from the global banking crisis would take another year to unfold. Rob McAdie, Barclays' credit strategist, said: "The core issues have not been addressed. We're still in a very large deleveraging cycle and we're seeing losses continue to mount. We think smaller banks will struggle to raise capital. We're very bearish -- in the long-term -- on high-yield debt. The default rate will reach 8 to 9pc next year."

He said investors had taken their eye off the slow-motion disaster engulfing the US bond insurers or "monolines." Together these firms guarantee $170 billion of structured credit and $1,000 billion of US municipal bonds.

The two leaders -- MBIA and Ambac -- have already been downgraded as the rating agencies belatedly turn stringent. The risk is further downgrades could set off a fresh wave of bank troubles. "The creditworthiness of many US financial institutions will decline in coming months," he said.

The bank warned that engineering and auto firms we're likely to face a crunch as steel and oil costs surge. "Their business models will have to be substantially altered if they are going to survive," said Mr McAdie.

A small chorus of City bankers dissent from the view that inflation is the chief danger in the US and other rich OECD countries. The teams at Societe Generale, Dresdner Kleinwort, and Banque AIG all warn that deflation may loom as housing markets crumble under record levels of household debt.

Bernard Connolly, global startegist at Banque AIG, said inflation targeting by central banks had become a "totemism that threatens to crush the world economy."

He said it would be madness to throw millions out of work by deflating part of the economy to offset a rise in imported fuel and food prices. Real wages are being squeezed by oil, come what may. It may be healthier for society to let it happen gently.