latest Hulbert Gold Newsletter Sentiment Index (HGNSI):

http://tinyurl.com/62c9up

"When gold bullion does reach a more sustainable bottom, assuming that sentiment adheres to the historical pattern, pessimism will be so thick you could cut it with a knife. We're not there yet."

I don't agree with Hulbert. When oil corected from 133 to 121 did we all feel that the pessimism was so thick you could cut it with a knife? No. Did it go up anyway? Yes. Gold's inherent strength is it's own liabilility, no pun intended. Despite all the "good reasons" to own it, it is a largely emotional response to forces outside of our control. As such, it wall always have a large emotion premium which is hard to quantify. Don't kid yourself. Gold can go up even without Hulburt saying it's okay.

Allen & bOss

Hope you guys are still holding FXP.

Hi Bill, Robby Ivanoff just posted the latest Marc Faber interview and a bit of Richard Bove on financials
http://wallastoninvestments.com/

Senator Dodd: Congress can decide a fair profit for all corporations.

“Are you going to go across industries across the board and decide what Congress thinks is a fair amount of profit and drawing a lines on what’s fair and what’s not for corporations?” [Joe]Kernan then emphasized the point. “That’s not the way it’s done in this country, senator. It could never be done that way, could it?”

“Yes, it could be,” Dodd said. “In fact it’s been done that way in the past and particularly when you’re trying to get some relief for people out here when the economy is in a tailspin. We’re about to go into a recession here. This is really causing a tremendous dislocation, not only here, but around the world.”

http://tinyurl.com/3tfdg8

Shark is correct. That's why I bought some time ago and will hold at least until the day comes, whenever it is.

I got out of my 500 shares of FXP @ $78.50 yesterday for a $230 profit based on:

vinod, DaveB, and 2nd_ave

I hope they were right?

Just kidding, I am holding FXP until I think there is a turn-around story. Not seeing it this week, but I am longer term on this trade.

Good Morning All,
Sitting here in muggy So. Cal. this AM.....taking care of the Mom stuff. Not my idea of fun (think Bahamas) but one of those things that must be done.

I took the opportunity on my flight to make headway on "Lessons From The Trader Wizard".
What a great book! Now I know you all read Bill everyday, but the book definitely gets deeper into how Bill see's the markets and his system and it explains a lot....but you know you think you are sitting down to read a book about trading and you realize it's also about us....humans. The *best* part personally in my current situation, was Bill's inclusion of Ecclesiastes in explaining timing. It's coming in handy about now.

I can only say, no matter how difficult it might be right now to obtain a copy, make the effort, it's well worth it. If it all falls down there will be copies to lend :>)

Thank You Bill.

Getting close to 12200 now just 12223!

Listening to the radio on the way to the airport I caught a suggestion from and ex-republican caller to the show making a few suggestions on how we could get a handle on oil, in light of things like widfall profits taxes.

He suggested putting gas under a PUC like your electric and phone co's.

Thus THE PEOPLE could control not so much the price of oil/gas, but things like whether the price of oil/gas should include share buy backs instead of exploration, huge salaries for overpaid oil execs, bonuses, severance packages, etc.

I know the freewheeling free marketers will roll their eyes, but given the abuses (and shadow government/Bush/Cheney oil policy) it has some merit.

Don't take or tax the profits, just tell them what we will allow them to foist off on the American people as reasonable.

You know...something like the hemming in we saw with Enron....

b0ss- so you're not taking profits right now?

VE and its nice divy at 52 week low.

Bought DELL puts

Holding on to DXD, FXP

congrats-> you've made the right call up to now...

2nd
taking chance here
brought UAUA/NWA/DAL/CAF/BMY/BC
200 each
sold my SKF which bI brought yesterday

I think you're on the right track, b0ss.

IMHO, Wall Street's hide-in-tech mentality will prove disastrous for its practitioners.

Tech stocks, in general, are way over valued and have a long way to fall.

Just my 2 cents.

Regards

please lets keep this more than a republicrap vs democrap forum. Oil execs are the same as most other overpaid public traded company execs. just be fair and intellectually honest when you are calling for change.

BH - Will VE get watered-down when Suez gets listed this July?

GFI:
I assume that it is not a buy until the daily RSI crosses above 30 again along with other indicators and fundamentals. What is causing the drop? I thought that I read that the miners were back to work. No position.

Chickenpookie,

It might. I still like VE, it's a booming business. I'm watching for an entry point.

Regards

Does anyone here take into account exec pay when choosing an investment? I havn't yet mayby should.. Just wondering...

question,

why on stockcharts they show both white and red candlesticks along wtih black ones.

re: my 2:05 AM last night...

cmg continues to violently puke all over itself this morning.

someone had 7,000 100 strike straddles for June that just went well ITM at 90.20. smart money there, boy.

oh yeah, corn hit a fifth record high today and chipotle has no tomatoes until next week. that can't be good.

Cara 100 IBN at 52 week low.

If I didn't mention someone's party, would that help? This isn't political to me, but it is for some. To me it's about honesty, transparency, and accountability. Whoever does that is fine by me.

However, I cannot see any reason to defend oil execs that clearly have all the power, influence and advantage. If they are screwing us, then we should do the right thing and crush them and their supporters, whatever and whomever they are.

I'm not a party player. They are a majority of our problem....that is, they divide us by meaningless labels.

Is there anyone here that doesn't want clean energy for a fair price and a healthy energy industry? Of course not.

Now how do we get there without letting ideology be a roadblock to common sense by pre-determining solutions before we determine viabilityand outcome?

IMO we will have to FIGHT to get power WE produce that they can't meter to us...ie:solar/wind where we are all producers.

Again...apolitical.

aurator- recognizing the call you made yesterday re the refiners-> TSO/VLO/SUN selling off hard (again) today...maintaining my positions...

Dr. Cosa,

Proper candlestick charts have a color for change from previous day (generally red/green) and they also have a fill depending on whether they closed above or below their open. Filled means they closed below their open and unfilled means they closed above their open. So a filled green candlestick means that the stock closed higher than yesterday, but below its open.

Just checked, and the black candles are the same as a filled green. So depending on your view at stockcharts, a black candle means higher close than yesterday but closed below open.

Karl

Water and drought:
If we can put a man on the moon and fly to Mars, why can't we pump water from the Mississippi/Ohio Rivers to the drought stricken areas in the West?

why do they remind me of SNDK in march...

exec pay... I watch for large home purchases and apparently there was a study that yacht purchases are a red flag too...

http://en.wikipedia.org/wiki/Howard_Schultz

Say no to the mansion...
http://www.starbucksunion.org/node/1903

M17 in NYC: Celebrate the 4th Anniv. of the Starbucks Union at the CEO's New Mansion!
Submitted by SWU on Wed, 05/07/2008 - 3:13pm.
This May 17, the IWW Starbucks Workers Union will
celebrate its fourth anniversary with actions around
the world.

In New York City, you are invited to join baristas and
supporters for a colorful and lively protest at the
new $24.7 million mansion of Starbucks CEO Howard
Schultz.

A STARBUCKS BARISTA WOULD HAVE TO WORK OVER 350 YEARS STRAIGHT WITHOUT SLEEPING TO PURCHASE SCHULTZ'S MANSION!

Better drink more coffee...

Good ol' Jack Welch on exec pay.

"Welch has also received criticism over the years for his lack of compassion for the middle class and working class. Welch has publicly stated that he is not concerned with the discrepancy between the salaries of top-paid CEOs and those of average workers. When asked about the issue of excessive CEO pay, Welch has stated that such allegations are "outrageous" and has vehemently opposed proposed SEC reforms affecting executive compensation. Countering the public uproar over excessive executive pay (including backdating stock options, golden parachutes for nonperformance, extravagant retirement packages, etc.), Welch stated that CEO compensation should continue to be dictated by the free market, without interference from government or other outside agencies.[2] In addition, Welch is a vocal opponent of the Sarbanes-Oxley Act of 2002.[3]"

http://en.wikipedia.org/wiki/Jack_Welch

[Bill Cara note: It's not a free market when it comes to exec pay. Boardrooms are controlled by insiders. This is a political process. Anybody who thinks otherwise ought to wake up.]

Closed all short postions. I will try to buy back today

Back from the dentist after a crown popped out a day or two ago . . . dentist said there was no charge as long as crown was placed in by him within the last five years. (Warranty?)

Checked the records, 4 years, 11 months. Rather be lucky than good! (;>

V Like it at this level. . . . . .
back into V this a.m. at 78.10

Aurelian - per the inca kola man ...

http://incakolanews.blogspot.com/

Lima-based US banker/blogger notes that Aurelian is up 6% today, and rose yesterday while most other gold stocks fell. He believes ARU can double, and has a few less-than-kind words about when the major Canadian brokerages will suggest this: after their pockets are filled with ARU !

Otto also offers some interesting musings on Chavez, for those of you who wish to get a feel for the reality.

(disclosure: I have an under-water position in ARU)

PS: There really IS a drink called Inca Kola, and it competes successfully with the other Kola in Peru. LOL

lol @ Inca Kola. Does it contain Peruvian Flake? :^)

hey, bOss -

I really don't care if you closed out a position unless you add some info that can be useful to others.

If you explain your reasoning, or your trigger point or such, then it's interesting to others.

"Water and drought:
If we can put a man on the moon and fly to Mars, why can't we pump water from the Mississippi/Ohio Rivers to the drought stricken areas in the West?"

Posted by: stktrader at June 11, 2008 10:53 AM [link]

We could but it would require a tremendous amount of energy and a huge capital investment. Desalination on the west coast would probably be cheaper. Pumping water is very energy intensive and the Rocky mountains are really high.

Great Lakes states fight pumping water to the southwest.

Commander-In-Chief McCain will do so by emergency order.

Does DCR get good? Does PAL?

The entire southwest is a mess of water rights that date back to the 1800's. To strip it apart and start over would be best.

A lot of farmers and ranchers in Arizona and California would fight it tooth and nail as they are getting rich and have been for many decades off subsidized water.

bOss & Allen

Am I alone in FXP or are you 2 still in?

re: water and drought

Lots of simple solutions, why complicate matters? Rain catchment systems, native landscaping, etc. All we have to do is stop thinking like wasteful american pigs. Do we really need Kentucky blue grass outdoor carpeting in Arizona?

QT, I maintain my FXP position. I am considering selling 50% (1000 shares) today just to reduce my stress level. I still believe that the negative factors for both the US and China markets result in a higher probability that FXP over the medium term (6 months?) will be substantially higher than it is today at some point. So holding a position seems to make sense.

Russell Napier's "Anatomy of a Bear" provides data on p/e ratios in bear markets. He finds that the average p/e ratio tends to contract to somewhere around 8 or 9 at the bottom. Other studies of emerging markets have shown that emerging market average p/e ratios tend to drop a bit lower than OECD markets at the bottom of a bear. Last I looked (using the Financial Times), the US market average (not sure if this is Dow or S&P) was about 16 or 17, and China was 18. This suggests to me that holding FXP makes sense from a probability point of view if one can tolerate both the stress and the risk. So I'll probably cut my position in half today, and hold the remainder in anticipation of Bill's Dow 10,000 call.

If/when DCR breaks .50 it's gonna break hard.

Sorry Mike I was out all last night didn't get back.

Water - In the case of Ca. just raising Shasta dam will solve a major part of the problem.

Az. - The desert can be a very hot, dry place. Don't waste your water!!!

W.Tx - You want water, gotta pump it from below Huge aquifer. Bumper crop last, but no rain no Cotton this year for sure!!! Some will dry-plant as hedge. Terrible conditions.

New Mexico - Pump from ground but you'd better watch the Aquifer closely cause it's relatively small.

The dollar is much stronger now and desirable.

http://tinyurl.com/4dbath

Small pos in FXP, QID.
Added to FOS.V,
Started small pos in PON, LYM.
Underwater in HLIT, HS, LF.
In the last 2 days stopped out of GFI,GSS,BBD,BWEN
Is anyone familiar w/ Brendan Kyne. Saw an impressive interview on BNN internet clip. He has some interesting ideas re energy.
Peace from North Puget Sound

Promote fishing instead of golfing... less golf courses = more water.

PHO has taken off since March. PBW isn't doing too bad...

Allen

Sounds like a very good plan.... Another option is during the day use a "trail stop" sell order. That would be a good way to protect youself from a sudden reversal and yet allow you to keep racking up gains. But holding over night is the tough descision. That is when it can move either way on you "BIG time" during the night.

Teich,

don't know if you held IYR through the shakeout over 70... but if so, it practically fulfilled the rest of scenario by flushing to 65. Hope you profited

Water:
But why can't we just build a pipeline from the Mississippi to the west; what's stopping it? Then we could stop the possible levies from overflowing in the midwest and the flooding issues; at least mitigate to some degree and get the needed water to the agricultural areas in California. I live in Fallbrook where the Avocado farmers are stumping groves to meet the 30% cutback in water supplies with more cutbacks to come.

Solar PV's - IMO, Thin-film technology will outperform Si wafer strategy. Coming to a theater near you!!!

Bolling: Head for the Exits on Integrated Oil

http://tinyurl.com/4lr6l5

Good article by trader Eric Bolling on shorting oil. He takes you through his trading plan from last week. Got a lot of respect for Mr Bolling.

[I'm long & over weighted DUG]

Avanti Mining is UP 34%, volume is low (35000)

Vadym:

Since I did not get a chance to buy back my IYR puts when IYR went over $70 (I was in a long meeting at work), I still still holding the position :( I am waiting for the time value of the puts to decay...

On the other hand, I closed my NVDA bear call spread profitably (~20% profit). Those guys should release their new video cards in the winter to help heat up the house :)

stktrader,

The solution to the problem isn't more, more, more..., unless of course you are the FED. Unfortunately, in America we consume with reckless abandon until supplies are depleted. Oil being the most obvious example and we are finally starting to see results in the SUV and hybrid markets. As americans, we can either be intelligent in our use of resources or we can abuse them until a crisis erupts. Crisis management is one of the most popular classes in MBA schools in the U.S. nowadays.

Sold INTC Jan 09 $22.50 puts for $2.57/share credit. The cost basis is $19.93 if I end up buying the shares.

given what we know, dcr seems dead in the water eh?

does it go to 25 cents?

QT, ok, I sold 50% of my FXP at 82.78. I feel relieved, and am happy holding on to the other half. I'll just hang on to that til it hits somewhere between $95 and $110. I say "somewhere between" because I'll consider the situation that causes a spike when I make the decision to sell.

Allen

Alright you booked some real good profits just from that half. Remember when we were "20,000 leagues under the sea" and voices were saying sell. I glad I held, and @82.78 I know you are too. See you @100... LOL [I hope!]

It seems like the trades working currently are the obvious ones. I wonder why.

People call for OIL to go up and it goes up.

Rumors abound about LEH and WM and they go down.

People talk about the dollar going up and it goes up.

Is the obvious now the against the crowd play or am I missing something?

Rob.

Putting Loin-Cloth On The Naked Bogeyman

http://tinyurl.com/4stvvp

TA experts

Can you say DUG has been forming a pennant since May or am I just seeing want I want to see?

Expanding on the topic of CEO Compensation:
"bankers' compensation schemes are flawed because they encourage excessive risk-taking (Bankers' Pay is Deeply Flawed, January 9). A similar argument holds for hedge fund managers, who are typically paid 20 per cent of the excess returns they generate."

Title: Investors Need More Hedge Fund Transparency
www.brookings.edu/opinions/2008/0114_hedgefund_young.aspx

I put on a small position in Aurelian recently. The strength yesterday was telling. Seems like there is no one left to sell at these prices.

Inca Cola is a great resource to make sense of the political situation in Latin America.

allen- couldn't be happier...

refiners feel like they're back from the brink...

Hi Rob,

I think what you're seeing is indicative of the Final Daze (sic) of this market.

The Fed is out of ammo, resorting to tough talk in an effort to prop this up.

Even the least financially aware among us, still go to the gas pumps and the grocery store. I'm sure that more and more of the general public is refusing to believe the Cinderella stories put out by the HB&B. They know better now, feeling it in higher prices.

IMHO, the jig is up.

Regards

Sorry, guess I'll have to learn that tiny URL thing...

http://www.brookings.edu/opinions/2008/0114_hedgefund_young.aspx

The banks are telling the tale. WaMu is getting sold at every opportunity and FirstFed is down 18% just today. Looks like we are going to get some banking failures soon, which I would expect to drag down the overall market, which has up to now been resisting the collapse of the banks.

Allen

Another reason why I am holding FXP. Even Crammer now finally admits that it is looking bad for the financials because of Lehman [at the end of the video]. When the financials pull down the market FXP seems to always raise. Just a matter of time. I can wait.

Cramer: Lehman Spells Trouble for Financials

http://tinyurl.com/5nrc2f

Speaking of WaMu, heard from some acquaintances in CA yesterday that WaMu just forgave $150,000 of their second mortgage debt yesterday. They were significantly underwater on their home bought at the peak in 2005 for 500,000+. If this is becoming standard practice, look out below for the Mortgage banks.

2 things: I am seeing alot of "Ben's in a box" type articles, finally. Prominent bloggers like Bill have been saying this for a long time, but the media would not go there because they believed the jawboning instead of the data. Didn't Bernanke kill all hope by acknowledging the inflation risk? They tried to ignore it for as long as possible, saying it would go away, but its crunch time now. How much longer can they let this go on? (Conspiratorial but probably ignorant side note: Could saudi and OPEC reluctance to increase production be a way to force inflation, thereby forcing rates higher, which increases the value of their stockpile of dollars? )

#2: QID should be a good trade right now. The Nasdaq led the way in the mini rally, which means it has the most to fall. Cramer's 4 horsemen are getting real tired. Tech was a surprise story of the quarter, but new expectations are built in now, plus there is seasonal weakness in tech coming up. The iPhone launch was anticlimactic, and it makes Apple look like jerks for ripping off their customers repeatedly. Their "hot new product" schtick is getting old too. Amazon is consumer related, and Google is a black box, so who leads the Nazz? I'm in at 40.

Would appreciate any opinions, or I would like to be completely ignored :). Either one is a compliment. Haven't posted in a long time, but I love this place.

rob d,

I agree with you on QID and will add on any rallies.

IMHO, the high of $57.75 will easily be taken out.

Regards

Would it be reasonable just to go log SKF FXP and QID?

FXP-> a couple of Asahis at stake...wouldn't even mind another 0.61 advance just for the hell of it...CAF for some reason is holding up well...

SUN is green, VLO may be headed there->

XBRL - Might we see weekly, or even daily financial reports in certain cases?

Bull Hunter,
It sure seems like the jig is up because none of the spin is working anymore.

Notice how LEH diluted shareholders by 25% and it was reported as just that unlike how those events were reported before.

No wonder Bill calls this a rolling bear. You sure don't know what to believe and when to believe it.

I'm still thinking there's a few more rabbits for the FED and Treasury to pull so I'm staying on the sidelines for now.

rob.

rob d,
good point about inflation and dollars.

question for the board...
Isn't the value of OPEC dollars held in US treasuries? that are paying below "actual" inflation? Since 2k4 the the ten year note hasnt' yielded more than 5% and the average is probably less than 4.25%. WE KNOW real inflation is well above 5%.
ROW - has been buying our debt that yields less than actual inflation.

FL: If only we could interpolate the rabbit to groundhog ratio we'd have it made...

Have a good afternoon folks. I'm off to work.

Regards

My "consolation prize" in the form of a TLT short opened on Friday is working well, and my QID position is growing too! The downside, of course, is that my USO puts (opened on Friday)that were up 50% yesterday are down today...

TLT should have risen today as the market fell, but inflationary fears trumped the flight to safety. So I doubled my TLT position now, since it will fall if the market rebounds tomorrow. Besides, inflationary expectations are slow to set in the mass psychology (as Fed's Kohn has indicated today), so the trend of falling bond prices is just picking up.

DavidV

Chickenpookie,

Not unless we're going to see a lot more stress medicine sales for CFOs... It is tough enough for large companies to get monthly reports to close and reconcile much less daily.

I'm not sure that XBRL will be the groundbreaking technology that it's cracked up to be. In the end, the numbers are only as good and as timely as the source anyway. It will make it easier to disseminate the info and to track variances... but it's still hard to say what this will mean.

Probably lower share prices as most of the financial reports if not all of them for public companies would have some discrepancies... and some of the stuff of value wouldn't even show up in the filings.

if you search for XBRL in the Google toolbar you get XBRL failure as the first suggestion. :)

It will sure beat scraping the stuff out of text documents though...

Riverside Resources -

up .19 or 22% on what looks like 3x average volume!

RE: DCR - has anyone taken a look at the message board on yahoo? one poster talks about the winding down of this etf on 6/25. have those of you that invested in this considered this?

Chickenpookie,
If we could do that we'd be trading with all the information they have, like their order flow and how everyone will play the news.

Maybe because I'm expecting them to save the market once more means we're in the final inning and there's no saving left.

I just can't see them letting a collapse happen before the election. Add everyone's 401K taking a 30% haircut to $5 gas and you've got the recipe for massive losses for Congress and a "wildcard" possibility for President.

Imagine if what was going on now was happening when Perot was running. I'm thinking he would have won in a landslide like Reagan's.

Rob.

2nd,
What about your theory of China pumping their market going into the Olympics? You still into that theory?

I think it makes a lot of sense myself.

This latest batch of selling was from the increased bank reserve requirements and I think overdone.

Rob.

The play on rising refiners seems interesting. Yesterday, I placed a buy stop limit order on VLO (stop 45.50, limit 46) and on TSO (stop 23.50, limit 24), so as increase the probability of being on the right side of the trend. That is, if my stop price is reached, then a clear double-bottom will have been made for the refiners.

DavidV

Could this be the BIG 3:18 sell off?

Jock -

Take a look at Colossus CSI.TO: up 25% on ten times normal volume. Good drill results.

The S&P 500 reversing below 1375 to warn of a test of primary support at 1270 [Colin Twiggs]

2X FXI long not working today - closed position. Likely to re-open same position at eod today.

Dave

2nd

Thanks for the SMN play...out @28.10 & 28.20

Will get back in if it falls back into the high 27.xx's

I don't think Lehman's $28 deal will close tomorrow.

rob d at 1:51 PM--re Bens-in-a-box. I like that phrase. "Get your Ben's-in-a-box here!" Yep, inflation is now acknowledged. By the media, too, which took a while. What can they do about it? Raise rates? Have they (or Wall St.) acknowledged a slowing economy yet? I don't think so.

rob- running out of ideas...ones that work, anyway ;) still think beijing wants a gilded platform in august, and that the best way to ensure customer service is to drive the stock market up...prefer CAF to FXI as beijing would presumably have more 'influence' over the A shares...

have black chips on SMN and the refiners...small position in UAUA...red chip on DCR...

Lehman fell off a cliff a the end. Meredith Whitney thinks that Merrill is in deeper straights than Lehman.

[Bill Cara note: But Merrill's John Thain says his company is solid and doesn't need more capital. (LOL)

If Merrill ends up under Goldman control, there's going to be a collective scream even a deaf SEC could hear.]

Woooow.... What a sell off.... just like the volatile times of Jan / Fed of this year.

Thanks Mr Cara for always reminding me this is a Bear Market. My ultra shorts have proven you right over and over again.

[Bill Cara note: Dow=12200 was given up by the Bulls who are now in retreat to 11700.]

CMG:
Close yesterday: 92.17
Open: 92.92
Close: 87.20
Change: -4.97 (-5.39%)

5.4% in one day. Is that enough?

Yeah, puts were working today.

I still like selling the hope (calls) even better.

=
me i'm in my spaceship, yeah that's right I work for NASA

2nd
what a day
brought IBN/and more CAF
also OEYGB oex july 610 call 3 contract
do have all others and some under water
we will do good and will keep adding if goes down more

Seeing that Lehman post, I was just thinking the Fed has it's hands so full, why do they wan't to go ahead and start talking about inflation all of the sudden. Don't they have enough battles to fight keeping the financial system afloat? They should just blame Peak Oil, say there's nothing they can do about it, but they will keep rates low to help the economy. That way they're off the hook for inflation. Why do they go looking for more trouble?

[Bill Cara note: Pretty much every central bank in the world is talking about inflation this week, so I presume the Fed feels it would look foolish to continue to say it is not a problem in the US.]

Mr. Cara frequently discusses conflict of interest. No conflict interest is more egregious than the oil price forecasts from Morgan Stanley, Goldman, and Gazprom. Each of these institutions benefits financially from the rapid increases in oil price. The quicker the price goes up the more profit for those hoarding oil. This is a result of the perception of a future supply shortage. A market condition known as contango. A perception they assist in creating. These institutions and hedge funds take advantage of the arbitrage opportunity by buying present oil, selling a future contract and then simply storing the oil for future delivery. Yes, that's right, actually taking physical possession of oil. Morgan Stanley, Goldman and others responsible for the recent subprime fiasco are operating storage facilities around the globe and the same time talking up the price of oil. To make things worse, the Russians, an extremely scary group, are right in the thick of this. You may have seen the front page article in today's WSJ. The contango will end only when global oil storage capacity becomes exhausted. Silly talk of "windfall" profit taxes and drilling in Alaska and the like are quite foolish. The real forces at work here are more powerful than oil companys, and are forces which care little for social equity. At least thats my take on things.

[Bill Cara note: SirBillington, I'd say you have a pretty good handle on things.]

the path of maximum frustration-> being able to sense what that might be would give you an unmatched advantage...almost as good as having a rod and staff keep you straight as you walk through the valley of the shadow of death...;)

Its the dollar they are trying to talk up with their sudden hawkishness regarding inflation to forestall the next leg down in the dollar, which might be brutal. Read Kaimu's posts to see how ridiculous it is for the Fed to claim to be vigilant regarding inflation.

ALOHA !!

REPOSTED FROM YESTERDAY ...

ALOHA !!

Just so you can see how versatile the US FED in its strategy to combat inflation look at this list of past FED comments on inflation.

The FED is famous for TALK! Add the latest BernankeSpeak to the list going back to 2005!

READ ON:

Thursday, May 01, 2008
Your Lying Wallet

From the Federal Reserve's statement on Wednesday, when it cut interest rates yet again:

Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months. The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.

Keeping in mind that individuals and businesses use these forecasts for planning purposes, let's revisit the Fed's previous predictions about inflation:

March 18, 2008: "The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization."

January 30, 2008: "The Committee expects inflation to moderate in coming quarters"...

January 22, 2008: "The Committee expects inflation to moderate in coming quarters"...

December 11, 2007: "Readings on core inflation have improved modestly this year"...

October 31, 2007: "Readings on core inflation have improved modestly this year"...

September 18, 2007: "Readings on core inflation have improved modestly this year"...

August 7, 2007: "Readings on core inflation have improved modestly in recent months."

June 28, 2007: "Readings on core inflation have improved modestly in recent months."

May 9, 2007: "Inflation pressures seem likely to moderate over time"...

March 21, 2007: "Inflation pressures seem likely to moderate over time"...

January 31, 2007: "Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time."

December 12, 2006: "Inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand."
And excerpts from some of Bernanke's past speeches and testimony:

7/19/06: "FOMC participants project that the growth in economic activity should moderate to a pace close to that of the growth of potential both this year and next. Should that moderation occur as anticipated, it should help to limit inflation pressures over time...the economy should continue to expand at a solid and sustainable pace and core inflation should decline from its recent level over the medium term...our baseline forecast is for moderating inflation."

11/28/06: "Core inflation is expected to slow gradually from its recent level"...

3/28/06: "Core inflation, which is a better measure of the underlying inflation trend than overall inflation, seems likely to moderate gradually over time."

7/18/06: "With long-term inflation expectations contained, futures prices suggesting that investors expect energy and other commodity prices to flatten out, and pressures in both labor and product markets likely to ease modestly, core inflation should edge a bit lower, on net, over the remainder of this year and next year."

Polls show that inflation worries Americans more than jobs, the stock market, or declining house prices. This Fed has proven itself either willfully deceptive about inflation, or incapable of forecasting it. And some want to give even more authority to this bunch? The only thing the Fed needs more of is congressional oversight.

posted by The Cunning Realist

ALOHA !!

From the BANK IMPLODE-A-METER site an employee from WAMU tells it like it is fronm the inside.

Title-gal MARY LAGARDO wrote:
Speaking as one of the 3000 victims of Wamu recent Wholesale layoffs, we were informed via conference call from corporate with minimal information and even laughter from the corporate spokesperson informing the audiences. (Arlene Hyde) I felt as though my time and dedication to this company meant nothing.
When they opened the lines for questions they were evasive with the answers. We were told nothing about severace and whether or not we would even be offered a package. This is very distressing given the fact Wamu was given the 7billion dollar infusion that will undoubtly provide a golden parachute to upper management while the regular working employee waits with anxious desperation for corporate to throw us a bone. "

To read more WAMU layoff stories go here:
http://tinyurl.com/6b6h39

ALOHA !!

moab ... Where's the link to MEredith Whitney's opinion that Merrill will be next to go?

ALOHA !!

Is it possible that an HB&B employee can be a "victim" of HB&B? I mean, what do people expect when loans are handed out with the only pre-qualification being a "pulse"? Are all these employees too young to recall 10% down and three years of tax returns with W-2s? Duplexes were 20% down ... Surely after Bear Stearns collapsed there can really be no "victim status" left for HB&B employees! Everyone operates on the assumption that there are "guarantees" in the USA. Even if you lose your job you are guaranteed unemployment or a "package" or at least welfare! Guarantees and 1 cent gum are gone ... With a fiat monetary system there are no guarantees that your money will be worth $0, quite the contrary, past fiat monetary systems have a guarantee of "failure"!

The biggest banks in the World are starting a "clearing house" for derivatives and they actually say they are PLANNING FOR LARGE FAILURES! Go read my post from yesterday! How the credit crisis be over when these guys are planning for large failures?

Let me get this straight ... Greenspan told Ron Paul repeatedly in the US Congress that derivatives needed NO REGULATION. Now all the banks that have the biggest derivatives exposure are starting a "clearing house" because why? They need no regulation? Hummmmmm???? The biggest World banks trade derivative products that need no regulation, but have no market! I guess Greenspan was right! Why should there be regulation when there is no market to regulate! If there is no market then why have a "clearing house"? What is there to clear?

Earth to WORLD TAXPAYERS ... GET READY TO PAY!!!

I read this synopsis of Whitney's appearance on CNBC today on tickerforum:

15:31 Oppenheimer's Whitney discusses financial stocks on CNBC - thinks all the banks' dividends are in question

Oppenheimer's Meredith Whitney on CNBC says she estimates the potential losses on banks from loans will be greater than the losses seen on CDOs in Q1. She thinks the financial stocks will trade down to some multiple of tangible book, with 30% downside in many of these names. Notes LEH is trading below tangible book, with investors questioning what tangible book is. Says many are still trading at about 2x tangible book, leaving considerable downside... Says its hard to know what the value of the assets on LEH's books will ultimately be. However, she believes LEH is different from BSC in that LEH has a real business. She says on a relative basis, GS, MS and LEH will stack above MER... Says for the banks, all the dividends are in question. Thinks BAC has a lot of flexibility, but still thinks C and WB will eliminate their dividends. Thinks the brokers will have to examine their dividends

Video is apparently here:
http://www.cnbc.com/id/15840232?video=768072000&play=1

CSI - colosus

It's WAY up - nearly tripled in a month. It's SO hard to keep your eye on the ball - all those (junior) balls in the air.

Mexico mike recently wrote that there are 250 Canadian juniors exploring in Mexico alone.

CSI is Brazil ...

Kaimu - We're paying more than enough already, I vote to outsource congress.

This BUD's for you!

Chickenpookie,

Congress has already been outsourced. They haven't worked for "we the people" in the last 40 years or more. It has been a system of vote for the lesser of two evils and the end product has been evil of one form or another.

Dennis Gartman about the energy market:
http://watch.bnn.ca/#clip59062

CPST has been a great stock since under 1.00. Now, it's going through its first significant pullback since early '08.

In the crazy days, it flirted with 100, crashed, then regained 6 during Katrina.

CPST makes small turbines which run on nat.gas and other fuels. Given a hot summer, hurricanes, and/more problems with the (aging) US electric grid, I think more and more institutions will buy onsite generators.

On a long-term chart, this looks like a huge saucer bottom. I think CPST could surpass 6 and ultimately reach 20.

It's highly liquid so stops work.

(no current position; no certainty, just educated guesses! do your own DD)

Can we start calling Ben
BERNANKRUTCY with his cohort GREENSPRINT
Bernankruptcy hails from PRINTS-TON, NJ too
He was on the Fed Board of governors when GREENSPRINT went to 1%, and advocated such measures.

Paulson...I cant figure a name for him
Hank Paulsnake maybe

CPST-> haven't heard that name in years...in the summer of 2000 california was experiencing rolling power outages, and jim jubak was calling CPST his stock pick of the year...

wondering if the 8% drop in AA signals a turnaround for SMN...(MON and DOW also down 2% for the day)...

Mr Fink,head of Blackrock was interviewed today on CNBC. He stated that mortgage pool paper was trading at 2x-3x less than mortgage default rates... His firm has been buyers of these instruments, thinking Blackrock clients will make enormous profit when all the dust settles. He said the time frame for these items to regain proper valuation could be 3-5 years.

A wise bet? Maybe for billionaires who might throw in some millions...No harm done if they lose. Like the investor who put a billion in Bear
he was still a billionaire even after the loss.

vinod- from seeking alpha-> "time to buy airline stocks?"

http://tinyurl.com/5hs4n7

"Is it time to buy airline stocks? I think so. The sector has been beaten down by rising oil prices and now represents compelling value. According to Business Week, Lehman analyst Garrett Chase is now bullish on the sector. Moreover in a recent interview with Bloomberg, famed investor Jim Rogers admitted that he is buying airline stocks given their attractive valuations.

As far back as April, George Putnam noted in his Turnaround Letter newsletter ""The airline stocks look awfully cheap to us right now." They have gotten cheaper with reduced market caps across the board."

Zack's on TSO:

http://tinyurl.com/5fnn8a

"Tesoro has roughly doubled its quarterly dividend in 2007 and has already completed more than 80% of its $200 million share buyback program initiated in late 2005.

Hence, in spite of the shares of refiners being under pressure, Tesoro's strong leverage in the West Coast market got a boost from the recent Shell refinery acquisition. Its valuation has become compelling following the recent sell-off. Our price objective remains unchanged at $40, based on a 2009 P/E multiple of 11.2x. We believe that Tesoro is better positioned than most of its peers."

Zacks on VLO:

http://tinyurl.com/4cr8bm

"While product margins, particularly for gasoline blends, have modestly improved from their first-quarter 2008 lows, they still remain significantly below year-earlier levels. Gasoline margins remain under pressure in all markets nationwide. We have lowered our estimates to reflect this negative backdrop. Our new 2008 and 2009 EPS estimates are $5.74 and $6.43, down from $6.30 and $7.45 before, respectively.

we expect the company to return increasingly large amounts to shareholders by dividends and buybacks.

"It has been tough in the independent refining space lately. But we cannot close our eyes to the underlying strength of the U.S. refining scene. We believe Valero shares have become extremely attractive. Our unchanged $65 price objective results from 2009 P/E and P/CF multiples of 10.1x and 8.5x, respectively."

cautionary note re SUN:

http://tinyurl.com/6qytd9

"..there is a notable lack of discretion to the group’s move in the session. Shares of Sunoco (SUN), for example, have improved 5%, despite the fact that even Deutsche, the putative promoter of the sector’s fortunes Monday, effectively said that, if there was one name in the refining group with no command of its fundamentals, this is it. ”If ever a refiner was at the mercy of the oil market, it is Sunoco,” the firm said, pointing out that its exposure to Nigerian light sweet crude - the one input for its Philadelphia-based refining operations - makes its cost structure prohibatively expensive."

Ow! my fillup cost me $80 today. I'm still stunned everytime it happens, but geez, now I'm starting to get used to it... which is scary.

Now I don't personally point a political finger at any party (they're ALL wrong imo) for our energy policy, but Jon Stewart certainly doesn't have a problem with trotting an opinion out. Too funny.

http://tinyurl.com/2bh9tj

Miadhach - You're absolutely right about that!!!

Time to short Blackrock?

has anyone else given thought to the idea that if the fed were to come out and start raising rates that it would actually help themselves out? didn't they exchange a lot of their liquidity for ARM loans? if mortgage default rates flatline at these levels, then if they get higher payments as a result of higher rates wouldn't that help them out?

am i being too naive in this line of thinking?

Pendulum swings and sways. The problem about some pendulums are that we might not be able to see them. IMO there will be many people who are willing and able to take chances now on buying distressed assets. Like all markets/bubbles/trades (that go awry) this is a point when the pendulum has went too far and needs to find it's way back to the center.
Doesn't buffett usually buy when everyone else is scared?
The problem is we don't know if those assets are too deeply discounted or not. Maybe blackrock will be the winner 5 years from now. One point is we have seen all of this before, it will pass and like sands in the hour glass, these are the days of our lives.

[Bill Cara note: In Bear markets as well as Bull, the pendulum of which you speak usually swings further than most expect. Why not wait until there is at least some confirmation that the Bull has arrived before buying distressed assets? Since you are not investing billions, there is no need to get in too early.]

2nd
I have lots of position and invested 30% of my capital
I usually look at my balance and if tomorrow balance is more than today's (e.g. 1000 more)
I may dump all of them
I have been doing this lately without paying much attention to my position.
And it is working out good so far for me
HOPE is last thing I will use
There is lots of unknown in this market
I also think that big HB&B may buy bitten down Dow stock like PFE/GM etc and pop up market any time to suck other in

Thoughts?:
http://www.reuters.com/news/video?videoId=84354&newsChannel=newsOne

viso

Thanks a million for the "Dennis Gartman about the energy market" link.

That makes me even more confident of my DUG [long] trade.

2nd Ave - CPST

Look at how CPST has rebounded from its long lows! If I remember, high nat gas prices killed them in 2000, but that was then. Quite a pattern ...

I think that Oil prices are going higher until the 4th of July weekend(rebate checks) or etc{$150/bbl}. I would like to hear Bill's comments on oil before I buy airlines- they need a government bail out along with the GM's and F's. He told us to short XOM if it didn't break $95, which it didn't. Another good call was ABX & GG, which I was ready to short again around 45ish this week, but they tanked before I could get them this time around 42ish.

My thoughts short term:
Oil - up
Gold - flat
Market - down
US$ - down
Bonds - fear... up or down???

Thanks Bill for all your calls on gold and the bear market along with your gifts and outlooks, I look at this site everyday! I know that you don't like to give out individual stock calls, but the ones I participated in have done extremely well with options.

Thanks again Bill for making us think for ourselves and teaching us.

Was hitting on all 8 today. I expected these FED idiots to do exactly what they did. However my fear of their intervention drove me out of a couple of winning positions early. Will re-enter.

Schiff weekly update argues for no way to stem the fall of the USD. Still hold some Euro calls.

Doubled the DIA 121 puts and sold. I still have the DIA 115 puts an they are on fire. Will reload tomorrow for next days if a faux reversal.

Puts on LEH, WM, F, met target and sold. Might but more puts on LEH, and GS. They are all liars, they are all broke, and they live in a house of cards.

I had calls on SKF that exploded, and I will reload. Maybe try some FXP calls.

XHB is going to hell in an express handbasket, and I suspect this is their greatest descent. There is no reason on earth to own a home builder or airline. Or a home for that matter. I lease and 1/3 of what I pay goes to RE taxes alone. Long RE of any kind is a losing prop. IMHO, for the rest of our lives. That game ended when we crossed peak credit last year.

TSO: I knew the refiners would be killed. The market is coming apart, and the clever logic we normally use no longer applies.

If you had some thing up like MEE, consider yourself the lottery winner and not a genius.

Stocks down spiral, bonds down spiral, Dollar down spiral, and soon to have commodities down spiral, but after a huge blow off peak that breaks the back of the global markets.

Bernanke got just what he ordered. Congress will review the menu after the damage is done. We can't have a Congress that is clueless about the economy in charge of it. Obama is clueless as well, and we better hope his association with Volcker and Buffet is real and not a load of BS.

There is no mystery; at the end of the day, markets settle with collective wisdom. It is obvious the collective does not believe the US is anywhere near the right track.

Most analyists are clueless, and I'm happy to retire on their backs. Can't for the life of me figure out what they are thinking, as they have the same access to data as I do, and I'm a solo, with a hundred buck budget. Let the morons implode.

2nd,
I think China will try and boost their markets soon. I'm also starting to think we're nearing another short-term bottom here and will start rising into the election.

I just can't see them letting it all fall apart before an election.

And look at the dollar chart since March's Bear event. It's been making higher lows and higher highs. That makes me think commodities will come down by the election too.

What would be the most uncomfortable trade right now?

Long Dollar/Financials and short OIL/GOLD.

Unless the obvious trades keep winning.

Rob.

http://tinyurl.com/3xr343

Asia not looking too hot overnight again.

Good luck Rob!

Bernanke is an idiot and not capable in the wildest optimists camp. I would not be surprised to see a suicide in the next year. And who is the backup man?

Painted into a corner is mild.

They're toast.

How can they have possibly let such an incompetent FED lead us into disaster? They "congress" are all clueless. To hide that, heads will roll. Just a matter of time. They will try to sweep their incompetence under the rug, but the clock will run out and the USD will be worthless.

Moab - thanks for the headsup on colosus. I saw them at PDAC, and liked their guy... seekingalpha had an article on them today.

I saw the Colusus press release on their drill results, but not before a lot of other people (especially those who seem to have seen it somehow before it was released). Chart is a Gartman classic lower left to upper right, so I took a small position in case the train is leaving the station. Thats really valuable ore if its a big enough deposit.

Also took a small position in ARU - thanks Jock for the IncaCola link - reassuring that they're talking to the Chileans about their mining policy.

cyderman - Aurelian

I think if Aurelian can close above 4.85 on more than average volume (1.6M shares) it will be decisively moving into the territory lost with the mining moratorium and I'll expand my position.

FWIW

For near term Market is oversold but it is possible oversold become more oversold

Jock,

i rec'vd an email from one of the miners in the jr. mining project asking about updates, may i fwd your email to them if theyd like to get some details?

i still think i have your old email addy.

you can find me at borsatoj at homtail dot com

thx

With Ford and GM scaling back on trucks, Looks like CAT/Navistar are making a joint effort to fill the vacuum.

Will the CAT pounce?