Good Morning.

One Cara 100 Ratings Change to report:

DELL - Upgraded to Outperform @ Caris & Co.

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

Have a great and profitable day.

As far as employment is concerned, FWIW, last week, in the state of Pennsylvania, the emergency unemployment benefits kicked in. This means that when unemployment reaches a certain threshold, persons whose unemployment benefits had run out, kicks in again. This is in addition to those already receiving normal benefits. All coming from Federal Debt, at least the emergency funds, that is.

Jim Cramer is calling a bottom. Those of you who use him as a contrarian indicator, take heed.

Heh, 4Q GDP revised downward from +0.6% to -0.2%

FINALLY!!! A (barely) NEGATIVE QUARTER!!! 1Q GDP revised slightly lower. 2Q GDP came in less than expected. initial claims up...

Here;s Cramer's rationale:

"Home prices in Stockton, CA are down 40%. In Daytona, FL, houses are priced at 30% discounts with amenities. The Inland Empire of California - you name your price. That's how the madness ends: with huge price cuts, the way it ended in Bradenton, FL.

And believe me, we get more Fannie Mae money (FNM - commentary - Cramer's Take)--forget these darned covered bonds, lets just solve the problem. You get buyers after a year and a half that buyers went on strike.

Remember, while we can't live in stocks, we know they trade like houses, and when the first stocks to go down bottom, the others are not far behind.

With the new housing bill, the rate of foreclosures will go down and the bargains will be quite evident for those who want to take them. Either a new administration will remove the fear of the illegal immigrants from buying homes--they were a huge part of the hard hit Arizona, Florida and California markets. Or the dramatic decline in inventory at the home building level has given us breathing room.

It is all coming together, just when no one sees it coming. Because you have to look at the hard-hit regions to know what's going on.

This morning the Wall Street Journal noted that more clarity on Merrill's (MER - commentary - Cramer's Take) arrangement with Lone Star is needed, and speculates whether Lone Star is going to renege on this deal, and whether this is not a fair arms length deal.

I say give me a break. These mortgages, if held with a private company with a servicing arm that is in the subprime business--Accredited Home Lending--and has assumptions and models for this time--would not have bid if it didn't want them. I think the loan is fine.

More importantly, if the homes are down 50% and you are buying mortgages that somehow--we don't even know--relate to those homes, you can figure you can buy them for 20 cents on the dollar and flip them for 50 cents on the dollar if you can work out the financing. And Lone Star can.

This deal works because of depressed markets like Stockton and Daytona and the Inland Empire. Not because of the financing.

You have to pay attention to the real markets, not the Wall Street markets if this stuff is going to be successful and I think it will at these prices.

I continue to think that Merrill was a game changer and that things look brighter now everyday. "

Well Pookster:

Maybe you lucked out about the GDP. Maybe you won't need much JNJ.

Well said, Bill. I, for one, have been avoiding trading because my time horizon is longer than the short-term swings to which the market is now susceptible. Things are so volatile now that you can't reliably put on a trade of longer than a few hours. At least I can't. Things reverse course much too quickly for my taste.

Better to either wait in cash for good buying opportunities in the stock of quality companies (as you've been writing about here before). Or, as I have done with certain stocks, hold positions I purchased at a good value and simply exercise patience with the market as the company executes on its plan.

I have neither the time or inclination to day trade this thing, although I do admire and respect those who have been working this volatility to their advantage. That said, I am more than ready to write covered calls on my long positions if they get ahead of themselves in terms of valuation.

We all have to play to our strengths and risk tolerance.

"Here's Cramer's rationale: ..."

Cramer has led too many people into bad investments for too long. When is CNBC finally going to take the microphone away from this shallow and dangerous man?

Morning People,

I do indeed use Jim Cramer as a contrary indicator. It's not that he knows nothing...He knows quite a bit about a lot of stuff. It's just his specific calls that are dreadfully wrong and I gotta believe this one is too. He's great on the big picture and awful when it comes to specifics.

With unemployment doing what it's (been) doing FOR YEARS, and trust me folks, stealth unemployment and chronic underemployment has been an issue ever since the technology revolution and the outsourcing scourge, housing has and will continue to hit the skids. Why in heaven's name do you thing Greenspan was goosing the housing market in the first place? It was some bizarre right wing Ayn Randian plot. tin foil hat, please...thank you.)

"Every day there are set-ups and then the Street is cleaned."

if i had to explain trading to a class of second-graders, that might do it...

[Bill Cara note: Taught to me many years ago in a trading room in the Southwest US, about two weeks before "60 Minutes" did an expose, causing it to shut down. But the practice of organized deception continues to this day. Only now the prop desks are literally on Wall Street.]

david- junior miners look like a good play before full reaction to jobless claims kicks in and the friday employment report...glad you're already positioned, as you'll be reading this two hours later...

re: Cramer on MER w/ Lone Star

Not only did Lone Star "buy" the bonds at 22 cents on the dollar, but they got 75% of the financing from MER. If the bonds go bad, Lone Star will only be out 5 cents on the dollar and not have to pay MER back the loan. MER acts like they got this off their books, but it is still there.

Is today the day? Look at the USD plummet. Aurator's next chapter is nigh.

Guys,

What's the best way to figure out what the dollar is doing in real time? Is there a dollar index thingy on CNBC? And why has gold chosen this moment to rise when there were so many good reasons for it to rise in the past couple of weeks? Who has an analysis going forward for the next month?

Bill gave this link recently. Sorry, can't figure out how to tiny url-it.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s&w=1&t=l&a=2

shark- try this

http://tinyurl.com/229pya

shark, US$: http://tinyurl.com/229pya
You can change the time frame, as needed.

vinod- still holding the august OEX puts?

2nd, we got the same tinyurl! Weird.

that is weird...i thought you were being slick, copying my link into your post...

Nope, just hopped over there, and did it, myself. Maybe it was soon enough that the tinyurl engine thought it was the same request.

You guys are the best. How about the value of community? And there are times when I've made money based on someone telling the room about a setup. Jogyp and GRZ comes to mind. That trade went from 4 to about 6 in about 2 days. I love you guys.

I see the games too Bill.
Yesterday, they were bashing Gold on FETV, saying it was probably in bear territory.,..the "news" seems like a tool for the few to shear the sheep.

[Bill Cara note: Sometimes, the "news" is just grist for the mill. Media, especially Financial Entertainment TV, is prone to exaggerate and act clownish like Cramer because it creates stickier audiences, which is their primary objective. As Clint Eastwood might say, "Did ya like that for entertainment, punk? Did ya?" The gap between trading as it used to be done, and needs to be done, is now so far removed from today's histrionics that we need to stop watching FETV. BNN TV, for all its faults, does a much better job at presenting reality than the others.]

technical timeout: how does one create a tiny url, please?

david- UAUA trading down as oil resumes its climb...aurator's probably stroking his chin with one hand, coffee in the other...as tom waits would say-> cup o' coffee's so strong it got up, walked across the desk and beat the ***t out of my mouse...

everyman-

http://tinyurl.com/create.php

writerblock / 2nd:

tiny url is just smart enough to reuse the same link from its database when it comes across duplicates

i like how you were each a minute from each other... linking race ;)

thanks.

casey- daytrading isn't just about determining entries and exits..it's also about the ability to mouse rapidly...LOL

Larry Kudlow tried to say gold entered a bear market yesterday on his show (which I watch maybe 2 times a year). He is such a shill.

In any case, the guest analyst told him he was wrong.

I wonder what he'll have to say about today's hard evidence that we are, in fact, in a recession?

2nd
holding lots of put about 10 added yesterday
it is going to be my day?

XOM- misses

http://tinyurl.com/5dnds8

"..second-quarter net income rose 14% to $11.68 billion, or $2.22 a share from $10.26 billion, or $1.83 a share in the year-ago period."

"

vinod- hope so...still think it's all red today..holding only 5 OEBTP..

XOM on the watchlist...

2nd: perhaps you should consider a career in a online world like world of warcraft (WOW). Mouse reflexes are king :)

its only a matter of time before WOW gets its own stock exchange...

just watch out. You will end up like this if you do:

http://tinyurl.com/y5u6hl

Fido real-time quotes must be down...

In the case you both were referencing the same web site, tinyurl has enough intelligence to recognize that. Resubmit, and you'll receive the same result...

juniors getting no respect...yet.

nemo - Even a blind squirrel gets a nut every once in a while. Still a long way to go before I'm outta the SKF hole, lack of discretion does encompass opportunity costs...

Again, I thank you for challenging my original SKF decision, and sticking to your guns. Kudos!!!

QQQs rallying back strongly... wow

dip buyers out in force...

TM ~ 86.50

2nd, mouse quickly, and trackpad quickly, in my case. In this trading environment, I have to admit that sometimes I find myself wishing for a mouse! Faster after the cheese!

2nd
what is your opion
should I hold them untill closed or get out
I am up today on my oex put
thanks

How about that GG now!!!

SNDK up 3% for some reason

vinod- i'm not worried at all, but then my position size is small...if you're thinking about it, tells me you need to cut back...

dip buyers meet supply...

And we were told the durable goods report would be a positive indicator for employment...

Number2son: Kudlow on gold bear market

I watch Kudlow regularly, just for the mental exercise in picking out his selective treatment of data to create a false impression. I list his show under "Comedy".

You may have noticed he drew a trend line on gold beginning in January, but did not show a multi-year chart. He has done the same with oil, claiming the upward trend line is broken, and conversely has shown the USD to be in an uptrend. It's all in the time frame and starting point.

Someone should create an educational course entitled "Lying with Statistics" (or similar) based on Kudlow's shows. It should be a required school course to encourage independent research and critical thinking.

I am also skeptical of his many charts and graphs that he creates himself, rather than using graphics available from other sources.

And of course I watch spellbound as such luminaries as Don Luskin, Dennis Kneale, and Jerry Bowyer pontificate on why everything I know is wrong. LOL!

SNDK - Must be Bill's/korvus's buy alert yesterday. I'm in @ 13.81; didn't get it on particularly well, but no complaints.

TGP - Planning to add based on today's buy alert (triggered at yesterday's close); thought about adding in the aftermarket yesterday, but there were only 45 shares available.

I'm making an effort to see if I can adapt my trading habits to Bill's system. So far, so good.

casey- meeting some interesing people on your travels, are you? ;)

No conviction?

So TRIN is rising steadily and TICK is positive. What does it tell us?

bull traps are always highly effective...o/w, who would get caught?

State, Local and Private Pensions

The Next Big Bail Out

Rising debts and real estate prices go together, because asset prices depend on how much banks will lend. For creditors, the dream is to obtain an ultimate backup at public expense: government insurance that they will not lose when debtors are unable to pay. The political problem is how to get the government to insure and protect bankers rather than debtors, given that debtors are much more numerous when it comes to the voting booth. In such cases campaign contributions are the balancing factor. Governments are “privatized” and “financialized,” that is, turned from democracies into oligarchies. The banking system aims to make sure that the only losers are the customers it is supposed to serve: debtors, homeowners and employees of companies being “financialized” as the economy is de-industrialized. Indeed, financialization and de-industrialization are becoming almost synonymous. The trick is to get voters to think they are getting rich while actually they are being painted into a debt corner, along with their employers, local government and the federal government too.

http://www.counterpunch.org/

2nd,

so do you think it is down for the day. TRIN just crossed 1.

that's my take...

OG

Think Bill's system works fine most of the time.

Bill recently commented (WIR or a morning report) that it didn't work as well in some sectors in this type of market. Can't recall the @ 3 sectors, but remember one of them was utilities FWIW.

Good luck!

[Bill Cara note: Consumer Staples and Healthcare are also poor performers using backtesting. My "simple little system" is used for markers -- kind of like buoys in a harbour that are used by racing yachts. The racer attacks the buoy from different angles depending on factors like wind, competitive position and so forth. There is a similar art and science to trading.]

Will GSS rise above it's 20 day and rally? I'm betting that it will, but don't shoot me if I'm wrong.

Bought 1000 shares of V.NOT 2 days ago at $3.10
sold today for $3.42. 90% cash and learning. Cheers

TGP @ 24.67

Out of GSS at breakeven. My timestop was hit. Then it fell.

SLW @ 13.02

Buy 200 Shares of SKF
Details Filled at $117.80

Pookster:

Yeah, well for me, even a broken clock is right twice a day.

Anyone know if/how to get TRIN/TICK on IB?
peace

SiO2 - Is there a new skype setup? If so, how can I access? Thanks! ~OG

SKF - Laying more eggs in the nest....

Oh, nevermind, I found it in IB ;)

Hehe!

Unfortunately, I was at the dentist, but SIMO did do the DCB. up 8% now, was up 12%. Probably onward and downward now

nemo - Have you been playing catfish?

From the latest monthly letter by Eric Sprott
"Unfortunately, prescience is one thing that the people in authority don’t have. We’re talking about the people who are responsible for this mess and who are now, in a leap of illogic, the ones in charge of cleaning it up using the same easy money policies that created the mess in the first place. Greenspan, Bernanke, Paulson, Dodd, the SEC, the banking regulators. Here’s a word to the wise: You would do very well as an investor never to listen to their musings. They are politicians parading as economists. As such, they have an agenda and are woefully lacking in objectivity. At every turn they will massage the message to what the public and the markets want to hear, invariably promoting the rosy outlook and dismissing as unlikely anything bleak even if it stares them in the face. Their proclamations have been like clockwork: always trying to sooth the markets just when the worst is about to happen. Investors should ignore what they have to say, or even better, do the exact opposite."

It is well worth reading it.

What's catfish? Oh, here's Doug Kass's take on housing. Prefer him to Cramer-doesn't get on my nerves.

Doug Kass
The Anti-Cramer Responds
7/31/2008 7:58 AM EST

This blog post originally appeared on RealMoney Silver on July 31.

Jim "El Capitan" Cramer sees the seeds of a housing recovery this morning.

And I agree: At some time, the housing markets will rebound.

But where I disagree with Jim is on the timing of that recovery, and I continue to be of the belief that it is still too early for the equity markets to discount a housing turn.

As I stated on Tuesday, credit is getting crunchy.

For the reasonable future (2008 to 2009), banks will rather play the yield curve than lend to home buyers.

For the reasonable future (2008 to 09), there will be no more securitized products, subprime mortgages, jumbo mortgages, non- and low-documented mortgages and option ARMs. If you don't believe me, try to get one!

And there will be plenty more headcount cuts and capital raises at the leading lenders.

In looking at the long history of economic cycles, when the pendulum of credit shifts, Jimmy, it shifts violently -- and in the opposite direction as lenders overcompensate to the extreme.

This cycle will be no different. Credit will remain dear.

Sell 200 Shares of SKF
Details Filled at $120.00

Catfish - swims along the bottom for food.

Housing - can't turn around until affordable financing becomes available. Wont turn around until buyers start coming into the marketplace.

Who are the buyers? Are they flush with cash, or are they strapped?

STILL a waiting game.

Awesome trade Vinod!

Here's a question for the room...If you really can't short the financial with impugnity, what are you buying or shorting when you buy the SKF?

When Liquidity and Market Protections Clash - July 31, 2008
David Patch

As the SEC mulls over what actions next to take on short sale reforms, hedge fund lobbyists canvas Washington with threats in hand seeking for relief from fee induced rule making associated with a short sale trade.

According to reports, day-trading hedge funds are lobbying for the Commission to scrap all aspects of the pre-borrow rule in a short sale due to the cost increase such rule making will have on the overall short trade. Some of the more well known funds impacted would be a SAC Capital managed by Billionaire Steve Cohen, Citadel Investment Group managed by an equally wealthy Ken Griffin, and Kynikos Associates managed by mere millionaire James Chanos.

At issue is whether these large funds should have access to day-trade short equity stocks without the expense of paying a fee for the rights to sell what they do not possess. To state their case, these funds have hired former US Representative and former Chairman of House Financial Services Committee on Capital Markets Richard Baker now president of Managed Funds Associates.

Read the Full Article here: http://investigatethesec.com/drupal-5.5/node/349

ALOHA !!

Watch this CRAMER CLASSIC!

Link: http://tinyurl.com/2ll5s2

Is America ever in trouble...

http://www.nytimes.com/2008/07/28/business/economy/28credit.html?_r=1&scp=1&sq=worried%20banks&st=cse&oref=slogin

shark - SKF Does it matter? Seems to be meeting it's published objective. I assume proshares employees a legal mechanism for their shorting strategy.

I guess I could be lobstering or crabbing then too!

I love lobster and shrimp, I'll take some of that...

SKF: for each underlying in the index they track, buy the put, sell the call. Rebalance as needed to keep the delta where they need it & handle eroding time value. That's all they have to do, I would think....

Does it matter? Does evolution matter, or the origin of the universe? What about the 2000 election results in Florida? These and other philosophical questions are interesting, even if they don't "matter" Mr. Chicken. Yes I am being respectful and calling you Mr. Chicken, not pookie or "the pookster".

Anyway, GSS appears to be potentially doing what I thought it might do.

Enjoy this video of a plane crashing for your amusement:

http://www.youtube.com/watch?v=kVaAVN94sTs

Merrill accused of fraud:

http://news.ino.com/headlines/?newsid=6892885743791

SKF - A 2x in terms of averages. Results indicate a presence of exponential components, creating slight 2x deviations. Good enough approximation for me....

SKF - If one can't short financial and if it is trended short, wouldn't that pump up the demand of SKF, thus price?

KRY - What's up with Crystallex?

At Bill's request, I spoke with Richard Marshall, VP/IR. As KRY announced 1 month ago, the Ministry of Environment had been tasked to negotiate with KRY and GRZ regarding how environmental aspects of their projects might be improved to allow permitting.

1 month into discussions, changes have been proposed to the Ministry to reduce environmental impact in 3 areas: company lands where there had been no previous mining;company lands where there had been previous mining; environmental cleanup concurrent with (rather than after) mine-life,and involving local people in this work. There is no concrete news.

Richard assured that KRY was not in violation of its obligations. They have produced all environmental studies, paid all bonds and taxes required. (Background note: As contractor to concession holder gov't-owned CVG [http://tinyurl.com/6m5f64], KRY's obligation is to deliver the above items; it then becomes CVG's role to deliver permits. CVG as mine operator often clashes with the Ministries of Mines and of Environment. In contrast to KRY, GRZ is a direct concession holder, and does seek its permits via CVG).

I asked about inroads in Bolivar State by Rusoro (RML)which recently acquired at fire-sale prices the mines of Hecla and Goldfields, thus becoming the largest VZ gold producer. I was told that RML's own Kaolin project is still not permitted 3 years after Ministry of Mines' approval. RML had not forseen that budgets for RML's new JV with CVG will have to go through the Congress. RML's status as "preferred provider" is accorded all CVG/JV partners and should not be seen as anything special.

Re KRY's finances, they are servicing their $100M in debt, have $60M cash, have a burn rate below $45M/year, and do not expect a need to raise capital for a year. If worse came to worst, they have $65M in equipment sitting on docks, which cold be sold, if their permits were moth-balled longer-term.

What does all this mean? VZ gov't processes ARE very slow now. Per Richard, the Minister of Mines is (currently)also head of CVG, and was tapped to head negotiations with the FARC. Close, trusted advisors of the President are called upon to wear many hats, and to deal with extraneous short-term issues. In March, I met with the head of CANTV, Venezuela's AT&T. She had also been asked to serve as Minister of Communications. Much of her time was going into resolving gov't clashes with the media.

It's possible the overworking of key people at the top of government fully explains the delays to the start of operations by KRY and GRZ. Yet, as Venezuela develops closer ties with China and Russia, (a major energy deal was signed in Moscow last week)and nationalizes more (diverse) industries, I can't escape the thought that time is NOT on the side of western miners in Venezuela.

Only if oil prices were to retreat to below $100 and stay there might the balance of macro factors slowly swing back in KRY's and GRZ's direction.

The "end game" in Bolivar State is important to the shape of gold industry globally. The President of GRZ told me in March he believes there are 15M oz. on lands between las Brisas and las Cristinas. This would total 50M oz. of cheaply recoverable gold. That's over three times Aurelian's Ecuador find, generally considered the biggest and best find in over a decade.

FWIW.

There are no certainties, just educated guesses!

[Bill Cara note: Thanks Jock. There are at least 1000 people out there in the ether who are thanking you for this update.]

shark_attack
I should Thank you and the ROOM
I learn from you guys/girls

[Bill Cara note: vinod, there is a lot of learning going on here. Why is it that we can write the headlines "Exxon production output is weakest in ten years" before the news is out? It's not that Wall Street is ignorant; they're too busy trading for their own accounts. We can do better by following our own lead.]

Sorry shark, (is sharkie ok?) I tend to gravitate towards the bottom line.

formal form: pooch la rookie pa chookey (perhaps)
informal: CP, pookey, pookster, chicken, doodles, pook-doodles, etc.

These are all extrapolated in memory of the colorful vocabulary of a man born over 80 years ago and whom I much admired.

just please don't overcook the shrimp.

Old Goat, and other candlestick people:
Did the possible "falling three methods" in GLD actually happen? My reading, as a novice, was that the body of the fifth candlestick should enclose the bodies of the three prior, and so it didn't complete. We did get a significant drop though, that's for sure, but that looks like it might be a hammer bottom. As I say, I'm very much a novice, so I'm resurrecting the topic as part of my education. TIA to all who respond.

New member, been following for 5 months now. Just wanted Bill and everyone here to know I feel like I am no longer asleep at the wheel and value the discourse this community has to offer.

Kinda followed Puplava and cost averaged a Jr Miner base so if anyone has 2 seconds to offer some advise on how I should handle that now I would appreciated it.

Thanks again all.

ALOHA!!

Banks like Wells Fargo shares soar on lowered expectations and what bank has not been lowering their expectations with these faux earnings? These guys are loaded with "false wealth" in any derivative of debt you can think of. Is not the entire US financial system based on DEBT? What is a US Peso other than a certificate to own debt ... the US government's debt? How is debt created? You need credit before you can get debt. If you have ever applied for a MasterCard then you know that! To keep our ability to accumulate debt our government will print money to make ends meet, rather than admit defeat(aka: face reality). The entire two party aristocracy is at stake here and the spineless politicians who in 1999 sold us out by repealing the GLASS-STEAGALL ACT then and there decided to get in bed with the likes of Goldman Sachs, so is it any wonder our US TREASURY is littered with Golman alumni? Now we US TAXPAYERS not only have to bailout these banks but traders are forced to abide by a NO SHORT RULE to protect banks from further insolvency. Imagine what share price the Temasek deal would have been at had MER not been protected from short sellers by the US FED? These tactics only buy time.

Meanwhile a "real wealth" company like XOM is hammered for missing analysts RAISED expectations on a quarter where record profits make MER look like a highly overpriced junior explorer! I only bring this up to point out the vast differences in the reporting environments between "real wealth and false wealth"! XOM puts our ZERO SPIN and MER is 100% SPIN every time they report and even when they aren't reporting!

None of this surprises me but what ever happened to the long term outlook the markets were known for? How far ahead are stock markets looking nowadays ... a weekend? Seems like nobody wants to hold anything(especially bank shares)over a weekend except maybe Pesos! What is that? Ever since Wall Street got in bed with the US Congress anything long term is out the window! Now we have day trading markets and day trading fiscal policy! What's next? The playing field doesn't need leveling it need nuked!

READ ON:
Record Exxon profit misses mark

The oil giant earns $11.7 billion in the second quarter but misses analysts' expectations.

Posting the best quarterly profit ever wasn't enough to lift ExxonMobil (XOM, news, msgs) shares this morning.

The oil giant reported net income of $11.68 billion, or $2.22 per share, a 14% increase from the $10.26 billion, or $1.83 per share, earned a year ago. Excluding items, ExxonMobil earned $2.27 for the quarter, missing analysts' expectations of $2.52 per share. The earnings topped Exxon's own previous record for quarterly profit by a U.S. company: $11.66 billion, set in the fourth quarter of 2007.(more)

Paulson Commentary:

WASHINGTON (MarketWatch) -- The U.S. economy will grow at a slow pace but should be able to avoid an outright period of negative growth in the months ahead, Treasury Secretary Henry Paulson said Thursday.
Paulson sees one of his roles as the Bush administration's chief economic spokesman to talk up the strengths of the economy, and his speech to a business group fit squarely into that theme.
Paulson said the economic stimulus plan passed earlier this year by Congress includes not only tax rebates for consumers, but also tax incentives for businesses to help the economy.
"We expect the stimulus to continue to support the economy in the second half of the year," Paulson said.
The government reported Thursday that the economy grew at a 1.9% annual rate in the second quarter. However, revisions to past data now show an outright decline in activity in the last three months of 2007. See full story.
Some economists are more pessimistic, arguing that the second quarter will mark the peak of the growth rate this year and that the economy could see an outright decline in growth as soon as the fourth quarter.
Paulson dismissed this view, while at the same time making a strong effort not to be overly optimistic, saying the economy faced difficult challenges in coming months.
"We are making progress, although not in a straight line. Housing continues to be at the heart of our economic challenges and remains our most significant downside risk," he said.
Home prices should continue to fall further, he said, pointing to a need for housing and credit markets to work through "necessary adjustments" in order to return to stronger growth next year.
"While home-price adjustments will continue for some time, and certainly well beyond the end of the year, I believe we can move through the bulk of the correction in months rather than years,"

Paulson said he was pleased that Congress has approved a new regulator and federal back-stop for Fannie Mae (FNM:Fannie MaeFRE, , ) . But he said that Washington has to get to work "immediately" to reduce the systemic risk posed by the two mortgage giants. End of Story

So if oil does go down to $100 (Bill thinks 145 by end of year) exactly where is all the discretionary income going to come from (especially in the oil heating NE) to fund a revived economy?

ALOHA!!

Prior to oil going over $100USD the US economy was suppose to implode if oil ever reached $100USD! Now everyone looks at $100USD as low! Will $200USD oil be low in 2010?

This is what a fiat monetary system does. It CORRUPTS VALUE! It distorts all reality and all measures of value. There is no standard of anything any more! It used to be $1mil was enough to retire on, now $1mil is GAME SHOW money! Everyone laughs about Zimbabwe's money!

We Americans find it very easy to identify the culprit in Zimbabwe for their monetary crisis, yet we don't even recognize we have a crisis here in our own country and 99% of Americans believe high prices for food and gas are evil corporations and speculators! Why is it so easy to say Zimbabwe's high prices and monetary problems are due to their corrupt Black government yet most Americans think our government is our savior! We vote like Jesus is in the Oval Office ... OBAMA to the rescue!

Photogray, could you share with me how to find the trin, trim, etc. on IB?

ALOHA !!

Bill, a nice user friendly "editing" feature would be great here! Do you have any updates on upcoming website changes that were discussed awhile back?

[Bill Cara note: Jeff is working on the new system now. Then he needs to get it tested with the group of people who responded to my request. I understand the new system will be up around the middle of August. I expect to have the Cara Trading Advisors Bahamas sister site up a week or two after that. If there are specific needs, we'd like to hear them now while the final pieces are being put in place.]

my own conspiracy meanderings are surrounding the deceptive practice of gradually adjusting the public to costs for energy.

w/ respect to gas, in canada we have breached the dreaded $1.00 per litre mark for some time now, but only a few short years ago this amount was considered pain and unsustainable.

i believe such proclaimations by pundits about absolute prices of oil or gas creating "unsustainable" conditions to be based on fantasy more than fact. we have been dealing with $100 oil give or take a few bucks for a while now, and the economic erosion occurring is less to do with americans spending too much on gas and more to do with how we were loaned money for new houses and the ensuing speculative fervor.

now with oil falling towards $120 the markets are rising, pundits are proclaiming all is well, people will breath a sigh of relief should oil fall "below" $100 a barell. sitting at $90 in the newfound comfort zone that just 2 years ago was $10 above the $80 "World War 3" scenario required to send oil any higher...

people are getting acclaimated to the notion that energy should and will be expensive going forward, so long as it comes down from its recent fever pitch people will take such truisms at face value while breathing a sigh of relief that at least "gas isnt $1.40 a litre"....

should gas ever reach its prior highs, it will seem less daunting, less dramatic and be trumpeted as less dire by the media. we wont soon panic again until $200 oil, which will be declared "untenable without provoking a global depression or a nuclear attack"...

how quickly the masses forget such similar proclaimations only a few years agao when $100 was nothing more than the stuff of the Peter Schiff's and others labeled "perma bears" by the unsuspecting..

Dr. Cosa

Yes, acclimation is everything. If energy stabilizes in a range, income will EVENTUALLY adjust. Unfortunately, if oil goes down to 100 it's still basically 50% above last year. How much dislocation this will cause, that is oil stabilized in a new trading range, is yet to be seen, or experienced. Oh, and let's not forget 50% of the electricity in the US is produced by coal, so electric rates will be balooning soon.

vinod- there's too much resilience in this market...closed out the OEBTP at 6.20...

Electric rates increases won't match spot coal prices as most coal fired generating stations have long term contracts with specific mines for most of the coal they burn.

Ten to twenty year contracts are not unheard of.

Natural gas prices are what drives electric rates. The spot electric market determines the going price based on the cost of the most expensive generating unit needed.

For example:

Plant A (100 MW size) is coal fired and produces electricity at $40/MW-hr. Plant B (100 MW size)is a combined cycle natural gas and produces electricity at $100/MW-hr.

If a nearby utility needs 200 MW of electricity off the spot market it will end up paying both plants just over the $100/MW-hr cost of production of the gas fired plant to BOTH plants.

WM, why didn't anyone tell me to buy that one yesterday?

Up 18% today...

Doing a number to SKF!

TTM @ 9.32...

I am finally starting my workday now, 2nd_ave. :) And what better way to start it than to read the fun and elightening discourse on this page? That's the beauty of working from home -- no boss or co-workers are looking over my shoulder. :)

So what do I see now? The UAUA train left the station already, and now it is very difficult to jump back in -- what is your strategy for jumping back on that train? Wait for the next pullback?

And what did you mean about the junior miners? Were you suggesting a short-term trade in them: buying some more now and selling on Friday? None of the miners I have are shooting up yet...

DavidV

no one here shooting up either...wrong call this morning->should have sold OEX puts/SKF into the morning strength and bought them back later...instead i'm looking to add to SKF on weakness/re-open the puts...sorry i talked you out of UAUA at the close yesterday-> that leaves me totally clueless at this point, so i'll shut up...

dr.cosa: I believe you have given an excellent example of the "recency effect".

"The recency effect, in psychology, is a cognitive bias that results from disproportionate salience of recent stimuli or observations. People tend to recall items that were at the end on a list rather than items that were in the middle on a list. For example, if a driver sees an equal total number of red cars as blue cars during a long journey, but there happens to be a glut of red cars at the end of the journey, he or she is likely to conclude that there were more red cars than blue cars throughout the drive."
http://en.wikipedia.org/wiki/Primacy_effect

2nd, caught skf at 18.30, only 50 shares at my new plan, what's low?

Thanks on the electric rate tied to NGAS. And that is between 33 and 50% higher than last year-yes?

Posted by 2nd_ave: "sorry i talked you out of UAUA at the close yesterday"

That's OK, 2nd -- as they say, "it's better to be out wishing you were in than to be in wishing you were out." :) Let's think forward constructively: is it worth putting a buy stop order a little above today's closing price? There is a risk of being faked out, but then the trend in the oil price is still down, and with the slowing economy (as shown in today's GDP reports) I think traders won't have the appetite to start piling back into oil.

DavidV

BA ~ 62

nemo and anyone else who cares:

I haven't been tracking natural gas prices.

Remember that utilities are strange birds. My previous examples just dealt with the spot market. Typically there is a 'real-time' and a 'day ahead' spot market.

Most utilities own their own generation which may or may not meet demand depending on time of year. Therefore they may generate electricity for more than they sell it for from some units at times to cover demand. Other times they sell excess through the spot market. They can enter long term contracts with IPP's or other utilities.

My whole point is that the correlation between spot fuel prices and electricity rates isn't direct and hedging, long term contracts, etc buffer the price increases from the consumer.

It's a strange business, especially since electricity can't be stored yet enough generation must be literally instantly available to meet demand or brown and blackouts occur.

Does increased energy cost mean higher electricity costs? YES. It takes a while for that to happen though.

2nd, also have 1 share of Bill's "watch for the sell off" list...TGT, JCP, TM WFMI, UBS, SBUX, UTX, CAT ...gotta love that $1.00 commission at IB.

nemo - CHG has been making great strides finding gas deposits. They just discovered the Louisiana field has a potential to double US production. This was confirmed through third party audits.

CHK, not CHG sorry.

2nd
Here are my todays trade
Buy to Open Put 5 Contracts of -OEBTN
Filled at $3.70
Sell to Close Put 5 Contracts of -OEBTN
Filled at $4.30

Buy to Open Put 10 Contracts of -OEBTN
Details Filled at $3.30
Sell to Close Put 5 Contracts of -OEBTN
Details Filled at $4.00
Sell to Close Put 5 Contracts of -OEBTN
Filled at $4.40
holding all from yesterday

SKF- clearing off at 120.53...

clearing the table and my mind for tomorrow...

vinod - Nice little bit of "unearned income" (per the IRS) you made there! (Unearned my a__!)

back to cash + a position in WGW

Chickenpookie, et.al. - will the US export LNG?

(a crazy idea?)

As I (imperfectly) understand it, a company (symbol: LNG) has built LNG facilities in Louisiana which are little used. (it's stock is on the floor).

This is because US nat gas prices are so far below world export LNG prices that the US has not imported LNG as expected.

If CHK and others are discovering LOTS of new nat gas in Louisiana, and the world price for LNG is two times US nat gas prices, is anyone moving to export LNG from Louisiana?

Thanks in advance for reactions from those who understand nat. gas markets.

Boy! SKF sure likes to bounce off that 117.50 level.

2nd_ave: why did you choose WGW over all other miners? SLW looks very cheap now, but you still chose WGW...

DavidV

2nd
It may be unearned income
but my BP goes high if i constantly watch market and my position goes underwater

brought 15 -vloif at 4.75

cyderman - True, not a classic "falling 3 methods", but close enough to have some predictive value IMO (and as borne out by the big drop that followed). Technical setups are seldom perfect, and even when they appear to be, things do not always pan out as per the textbook. We play the ball as it lies and do the best we can.

Even with today.'s (now faded) bounce, it still looks to me as though GLD is heading down in the near term. Again, DYODD and good luck!

2nd
as usuall
market going down. my friend you got out early on
-oebtp

Interesting how Meredith tries to avoid answering the question if LEH can survive.
Speed up to 8:21

Future of Financials - Meredith Whitney

http://www.cnbc.com/id/15840232?video=808357964

2nd - You ditched your Tata already? If so, why? Your entry looked "promising".

Jock - I'm still attempting to figure that out. BTW, CHK quarterly report after close tonight.

She said she didn't know. Maybe she considered it impolitic to say "they're toast", I acknowledge that. But let me tell you...Lehman is toast. My friend just got off that rat ship and you should have seen the wistful, envious looks on his co-workers faces knowing he was going to make millions at his new boutique firm and that they're going to be wandering down the streets of New Canaan at noontime, babysitting their own kids and hanging around the house. Bummer, eh?

The market loved hearing from Gspan didn't it?

BA - somebody wake me up when BA hits the 50s

sorry, WGW and TTM...

vinod- hope you had more faith than i did...OEBTP up to 9...

SHLD shot up for some reason. I am thinking about shorting it...

All cash but WGW

2nd scared me out of getting OEX/DELL puts

I don't have time to trade tomorrow until EOD

Old Goat, thanks for the reply. GLD has a lot of support ~89.75, so we'll see how it works out. I'm not actually trading GLD, though I do have a small position long DGP. And don't worry, I've been owning my own mistakes for many a long year. Best lesson I ever learned was not to trust management of my money to anyone, especially experts.

Well, I just bought some UAUA at $8.25, for 2% of my portfolio. Just to place some skin in the game once again.

I also just bought some TBT, increasing my holding to 25% of my portfolio. I placed a sell limit order for 1/4 of my TBT at $70 and for another 1/4 at $71. I am not so confident as to carry so much TBT long-term, but the chances of the market rebounding tomorrow has increased after today's sell-off, and so one of my limits has a high chance of being hit tomorrow.

Vadym gave a good insight about the market action a couple of days ago, suggesting that in the late summer the market has low volume, high volatility and pointless moves up and down. I think that's a great environment for trading, as I can buy low, set sell limit orders a little above the purchasing price, and have a high chance of them being hit.

DavidV

bot at the close

BA @ 61.05
TM @ 85.80

I hate how Fidelity rations the goodies in its trading platforms based on your account balance and activity level (meaning commissions generated). In fact, they even have different platforms for different "classes" of investors and traders.

It's one thing to charge inactive traders a higher commission--that's reasonable--but hey, at least give people the tools they need.

OldGoat - Fidelity's pricing

Computers + marketeers = customer confusion and frustration!

Pretty soon, even buying a bus ticket won't be as simple as buying a bus ticket ....

Don Harrold comments:

http://tinyurl.com/6cy7q6

Bull Hunter 8:25am - "Jim Cramer is calling a bottom. Those of you who use him as a contrarian indicator, take heed."

He's quite an excellent contrarian indicator, that's for sure. Dow lost over 200 after that call.

korvus - In the RSI app, are the remarks in the "Zone (estimate)" column automatically generated? And is it possible to run the app at end of day (with same day closing prices) while the after-market is still open, thereby perhaps getting a jump on new buy/sell signals? At what time do the app's results reflect today's price action? 12:01am tomorrow? Or...?

Jock - It bothers me, and I'm a "have" (at least I think I am) as far as access to most features of their "Active Trader" platform is concerned. Course, they no doubt have some other higher-level platform that a lowly peon like me will never know about or see.

At least I have IB's excellent platform (to which all IB users have full access, so far as I know) to fill in the blanks.

After hard day of work and during the market related tension filled day we need
Clown like J.C
Anyone ever went to see a circus without clown?
So, CNBC a (circus) has to have clown like Jim

b0ss: I see you also hold WGW now -- why did you choose it over the other miners?

Thanks,

DavidV

David,

WGW was my first miner, and I was following 2nd in on the trade @ $2.09

I hope to add to it at a much lower price when gold falls next month.

I tried to buy NOT.V about a week ago after Bill mentioned it, but I had trouble with TDAMERITRADE with foreign stocks.

No reason to buy it really, just for fun I bought 500 shares.

kaimu, nemo, old goat, what you guys are saying about the markets, energy and the economy rings true to me. And also what Bill says about it being a casino. "Getting used to" high energy prices is going to mean "getting used to" not having any extra money. Where is the growth Mr. Paulson sees on the horizon going to come from? The only growth industry I see right now is government largesse. Everything else seems to be pointing DOWN. But like Scott Harrison says, you have to look at who's on the other side of the trade--and that's Paulson and the gov't and they are serious about their brand of socialization. But how is that going to help the dollar? And how is that going to help us when the dollar keeps buying less and less energy, which is a huge tax and takes spending away from "things" that people like to buy? Personally I don't see how there is anything but massive consumer retrenchment ahead, although I'd be willing to hear the argument against that, PLEASE!

As to trading this bizarre market, while I am digesting Bill's book and learning what I can here, I have to admit I'm learning to appreciate mutual funds more, when I can find them in the right sectors. I haven't gotten smashed really bad this year because I've been able to add to the right ones on weakness and been able to add in small bits with no transaction costs, keeping my cost and risk down. It's unsophisticated, I know, but it's proving to be an okay strategy for me this (tough) year. If anyone has any thoughts here....

ALOHA!!

Here it is again BIG GOVERNMENT asking US oil companies to save them and do what the US Congress has been unwilling to do for thirty years and that is have a viable ENERGY POLICY other than topping off the Strategic Oil Reserves with non-existent Iraq Oil ... So they beg Exxon to take those profits and buy alternative energies while the US Congress sits around pondering the best way they can steal as much of those profits as possible for their own useless pork! These guys even give the Mafia a bad name!

Is this an ultimatum?

From the headlines at Google Finance ...
Lawmakers to Big Oil: invest in alternative energy
Reuters - 28 minutes ago

By Tom Doggett WASHINGTON (Reuters) -

Congressional Democrats on Thursday urged big oil companies to invest more of their record profits into boosting US oil production and developing renewable energy instead of buying back their own stock.(more)

I own XOM and CVX long term ...

ALOHA!!

Someone mentioned or eluded to viable recession proof businesses. One industry that thrived during the Great Depression was the movie industry! Judging by the BATMAN debut last week it seems to still hold true! People complain about $4 gas but not $10 movies!

ALOHA !!

One thing on movies ... I do not think the BIG budget films and the BIG studios will survive the way they are going. I would be looking more at small and/or independent companies. Also if there are any movie stars out there reading this get ready for less PAY! Instead of $30mil per film you might be forced to get by on $5mil!

Ahola!

Yep! Movie industry is downsizing. Even the Star Wars guy says he's moving to the small screen because the economics are iffy on the big screen.

Denny!

It's not going to help the $. They'll have their money someplace safe. Paulson et. al. knows what's going to happen, but that would be like yelling "fire!" in a crowded room. Except, this time there is a fire. Remember, society is about preserving society, not the individual. No need to get the masses all riled up any sooner than you have to. They'll be ticked soon enough.

Yep! Big retrenchment. Redefinition of discretionary and necessary, with more of necessary becoming discretionary.

Back to Kaimu:

But who can afford to drive to the movies. HA!

Small screen, downloads, netflicks, bandwith.

And what's the matter with the Cosa Nostra? Remember Bill's Italian (and Irish).

Any anticipation for when meaningful government deficit cutbacks might commence?

Strategies and tactics - aren't federal regulatory strategies and tactics an accomplice to economic health? How can US citizens be expected to continue compensating their government for such insightful policies when they can no longer heat their homes, find well paying jobs, and make their mortgage payments?

Socialize the wealth, privatize the debt!

OldGoat,

Yes, the "Zone" part of the RSI app is automatically generated. Unfortunately, right now there isn't a specific time that the data gets updated. The program only works because Yahoo doesn't see it as a resource hog, so I work hard to keep it that way. One aspect is that I update a few stocks every hour based on how old the data is and how recently someone requested it. If you request information for a stock that is severely out of date (more than 18 hours since I last updated), it updates it on the fly. So It's possible that the RSI numbers and zone might not be updated up to 18 hours after the market close. It isn't ideal, but that's how I do it now.

On the other hand, I update the Cara 100 every night by midnight eastern time so that it will be ready for the table in the next day's daily report. So those 100 stocks should be more reliable.

Jeff

[Bill Cara note: This is one of the disadvantages of getting info free. We take from the public domain what we can and (hopefully) put it into a more valuable form for you to use. Jeff is doing a stellar job, I think. After we get the new web platform [Drupal] installed, I am certain that most of you will be very impressed. Btw, all this time and effort is being contributed free for this Community, which we gladly do because some of the Discourse here is truly outstanding. Thank you. Thank you.]

Denny - The consumer will benefit in the following ways:

No job - no commuting costs
No home - no mortgage payment
No food - no obesity problems

The government will benefit in the following ways:

Cutting the deficit would require a combination of revenue "enhancement" or budget cuts. Revenue is likely to be going down for the foreseeable future. Unless you are export oriented, service industries, housing and related, and financials are not going to be providing much tax revenue.

Which brings us to the budget- Mmmmmhhhhh...Congressional spine....nahhh...printing presses and deficit financing...YESSSS! That is unless those upon whom we want to foist those Treasury (notes, bills, bonds) say "no" (or demand such a high interest rate, it's like a "no." Then, things get serious. Not until then. Proactive planning doesn't buy you votes in the next election. Useless stimulus packages do.

Useless stimulus packages - place that one in the underperforming file.

Schwarzenneger proves once again that he is THE TERMINATOR!!!

Socialize the wealth, privatize the debt!

Posted by: Chickenpookie
May be that congress may find the way to outsource the debt. they can ask private company how to do it because they are good at it?

"in the late summer the market has low volume, high volatility and pointless moves up and down. I think that's a great environment for trading, as I can buy low, set sell limit orders a little above the purchasing price, and have a high chance of them being hit."

David,

while all this is true, keep in mind one morew thing. patterns get less follow-through in such trading environemnt, so the performance based on traditional support/resistance lines, channels, chart formations etc is going to be less predictable. Think of it this way: broad particpation creates normal trading environment where there are crowds to support patterns and make them reality; scarce participation (which is what we have in August) leads to more randomness as there are fewer players to fulfill normal patterns. After all, most of those things are based on crowds psychology, thus they require crowds playing.

Just a heads-up, so you keep risk under strict control.

Greenspan Comments On CNBC Help Markets Fade
Posted By:Bob Pisani

The markets held up well until the last hour, when Former Fed Chairman Allan Greenspan made what some are interpreting as negative comments about Fannie/Freddie and the U.S. economy. Also, remember that this was the final trading day of the month.

Poor economic data in the form of the GDP and jobless claims did not help prior to the open, but mid-morning oil came down and financials rallied, and suddenly the Dow and the S&P were only a few points from going positive.

Mr. Greenspan, in an interview with our Maria Bartiromo, speculated that the U.S. would likely end up nationalizing Fannie (FNE) and freddie (FNM)
and made it clear he was critical of their overall structure, a point he had made in the past. Both closed down about 6 percent.

The popular media will no doubt note that Exxon EXXON MOBIL CORPXOM
made more than $11 billion in profits, and shake their heads in disbelief that anyone could make that much money. What they will not note is that Exxon's earnings were disappointing and the stock closed at a 52-week low because profits are being squeezed on both sides: the lucrative oil production, as well as the refining side.

[Bill Cara note: "Our" Maria Bartiromo? I think not, vinod. The image of not touching something with someone else's ten foot pole comes to mind, but I won't go there. I watched a bit of that PIMCO infomercial, and quickly lost interest. Actually, I thought Maria did a professional job. But the Greenspan arguments were rather self-serving, and she let it go, which bothered me. I really have no interest in listening to former movers and shakers get on their soap box. There ought to be a law that once somebody has served in public service at such a high level, they cannot speak or write books or whatever for at least a couple years. Doing so demeans the high office and the present occupant, not that, in this case, any or many of us feel the present title holder is an improvement over Mr. Greenspan.]

vinod- as bill would say, the market played ME today, totally...(apologies to b0ss for holding him back)...

things started out badly, as Fido quotes were frozen at last night's closing prices for the first 15 minutes (can't say if i would have sold SKF and the OEX puts at the open given real-time information)...other than that, no excuses-> i let the persistent appearance of bids up until the final hour knock my conviction from under me, and Mr. Market convinced me they were going to take it up for another EOM close...so i took (minor) losses on both positions in place of some (major) gains..(vinod- ironically, if i'd held larger position sizes, i would probably have stuck with them, as taking a larger loss would have been harder to swallow- LOL)...

'OUT from under me'

I think Bill is dead on, I have never seen such crazy markets - airlines up 40% + 40% on successive days, oil all over the map, coal stocks go up into the first of the quarter to crash, look at CHK, down from 75 to 45 in a jiffy, as if the market is pricing things correctly!
Furthermore, the financials, like BAC up 18 to 35, WB up 7 to 18 in days...this is not for investors.
You buy something one day, keep a 10% loss rule, and you are out the next!! I wish you would explain more how they understand the trades out there Bill...who is buying in public flow, how they know your margin position, etc! Thanks

david- why WGW? the Mesquite mine is located in California, they're producing, and they're producing more or less on schedule..

2nd
Last two week I have notice OEX premium moves a lot between 3.30 to 4.00
So, I was hoping you will hold them until then
And I had attitude today that if it did not work out today. I will give a chance for tomorrow for employment report

Also tomorrow will make up my mind after 9.00 a.m which way we will move and will take a chance
I think in this unpredictable situation not many wants to hold position in to weekend
Also summer vacation and low volume because, does not say much about market.
Also I am keeping list of junior from this site
Can not make up my mind about them
Look like I will have to hold them over year to make money
I have to educate myself before I plunge in to junior

But will try to be 100% in cash for final downturn Bill has called for
Will start to load up when it is clear

vinod- the 'final downturn' could happen any time...so i guess if i were to hold anything overnight, it would be in the bear category (short funds, puts, precious metals)...

Goldcorp CEO on BNN/TV re Gold Eagle acquisition

"Joey" emailed me regarding this interview, wherein CEO Kevin McArthur offers his view of the deal, and of Goldcorp's quarterly results. He also talks about juniors generally. It's worth a listen:

http://watch.bnn.ca/#clip70924

SKF holders- this morning's entry from Colin Twiggs is reassuring:

http://tinyurl.com/54qccl

"The S&P Financial index is undergoing a typical V-shaped bear market rally, coinciding with a mid-July sharp spike in volume. Twiggs Money Flow, however, signals continued selling pressure and the rally is likely to fail."

2nd, I think lamented the other day that the 401k folks must be getting killed by this weirdo market. I would guess that you are right, judging from what my co-workers have told me. They think you can buy and hold. I disagree, and sold around October when we put in a double-top on the S&P in the middle of a banking and mortgage crisis.

My own 401k tells me that I'm down 1.91% for the year. I sold down to the minimums every time we'd make a double-top, buy it back when we'd make a double-bottom in the S&P. You HAVE to when everyone and everything is lying or about lies. I think we all understand the financial system is to one degree or another broken. Why hold? I have no edge. This approach works for me.

My co-workers have eaten the entire fall of the S&P, but I bought my house by trading. I know when to leave the casino, so I don't still trade individual names the way you guys do, but I enjoy watching the action anyway. I quit trading when Qualcomm (I think) went to $600 4 hours after the analysts raise their "estimate", and bought a house (that I can afford), instead, which left just the 401. And yes, I will trade in it -- I don't follow prices down. Not in a financial crisis. I've caught all the falling knives I need, thanks.

Our company-wide statistics say we're collectively down about 14%. We have a fine selection of funds including Vanguard, T Rowe Price, Dodge N Cox. They got hammered anyway, unfortunately.

Regards,

kent

Zimbabwe's $100 billion bank note -

Zimbabwe just issued a Z$100B note, which is available on Ebay for GBP40. Latest exchange rate I could find mention of is Z$35B = US$1. So, the price on Ebay seems a rip-off. This new note should cost closer to US$3.

Soon, on newer notes, they’ll lop off 10 zeros …. And thus destroy the opportunity to obtain a reminder of just how bad things can get with a “fiat currency”.

Does anyone in the community know, perchance, how these sad souvenirs might be bought near the right price?

kent- so you outperformed your company's average 401(k) by 12%? not bad at all...

"We have a fine selection of funds including Vanguard, T Rowe Price, Dodge N Cox. They got hammered anyway, unfortunately."

i'm almost positive your company offers no bear funds in that 'fine selection'...so if it's a bear market, and your fund managers are prohibited from going short and/or being mainly in cash, then you've pretty much navigated with the only option you have left- timing...i would say you've done very well...

Reuters on latest stressed bank borrowing at the Fed. Good for SKF?

http://tinyurl.com/5dkuuo

Jeff - Thanks for the explanation; it's given me a better understanding and appreciation of the excellent tool you have created, and the limitations under which you are working. Your creativity is exceeded only by your generosity! ~OG

jock- isn't the 'right price' always the current bid? the reason a Z$100B note is worth 80x more than a Z$35B note is current novelty value...wait a few months, and you can probably find someone happy to get 5 bucks for one...

2nd - i'm somehow in the same boat as Kent...our company 401k is solely long funds. i'm actually up 5% somehow. i basically put all of my money in their principal preservation fund...essentially a money market fund that makes 3% or so per year...when the S&P 500 broke down through the 200 day MA back in december-ish. I just put my money back in around July 15th or so when the S&P was at 1250 and sold it yesterday for a 2 or 3% gain. that is all i've done in the past 7 months.

I think it's a crime that they don't offer a bear market fund, but maybe it's for the best.

I have a theory that you can easily outperform the general market by buying when the S&P 500 has broken 2% above the 200 DMA from the downside and selling when it has broken 2% down below the 200 DMA from the upside. It helps you avoid the huge downturns and let's you capture the big long moves up (e.g., late 70's through 87 and early 90's through 2000). there are a few times when you sell at a loss, but you don't even have to worry about your overall perception of the economy/market and forces you to look at it from a LT trend perspective.

2nd_ave: Z$100B note -

Somehow it does seem ironical to overpay for a wasted asset.

I'd like to be able to afford one for a future grandchild, and one for each of those gents who will have endebted him: Greenspan, Mozillo, Bush, Bernanke, Paulson, and 1 each to all arriving and departed CEO's of HB&B's!

Aurelian -- Tip of the hat to Otto Rock!

Otto has been hitting hard against Aurelian's board for accepting a stink bid for the biggest and best gold discovery in over a decade. Tonight's lead story is positively therapeutic.

And he relates that the Ontario Securities Commission(OSC) will investigate!

If we can't count on management to advance shareholder interests, whom can we count on?

Read it:

http://incakolanews.blogspot.com/

and write the company: http://www.aurelian.ca/contact.php

and while you're at it, write the OSC:
inquiries@osc.gov.on.ca

teamonfuego- i really think there's been a full-court press by the financial industry to convince the investing public that any attempts at active management or timing are doomed to fail...total bullshit, IMO-> think about it: hedge funds beat the average long fund HANDS DOWN because THEIR HANDS are NOT TIED to being 100% long at all times...yet they expect us to be fully invested at all times (for our own protection)...

on top of hobbling our ability (actually, it should be a right) to preserve capital in a bear market, they then (implicitly) insult us with a barrage of studies showing that left on his own, John Q. Public invariably buys at the top and sells at the bottom....(while neglecting to mention, of course, that John D. Analyst invariably issues buy ratings at the top and sell ratings at the bottom)...

teamonfuego- congrats, btw..both you and kent have shown that non-professional investors can do quite well using nothing more than good judgment and common sense...(if you're able to out-maneuver the average fund manager driving nothing but a 4-cylinder, think how well you could do given the same 8-cylinder he's driving)...

It's not a casino. These "games" have a vast and ever changing variety of odds associated with them and you can be the house, something impossible in a casino. In fact, you can be better than the best fund manager, better than Buffett (good title for a book).

You can buy and sell precisely when you want to, and in truth, the small fry has an enormous advantage over someone trading 60 billion. You can select only the very best plays and with no regulator, no boss, no redemptions, no B.S.

when you get around to writing Better Than Buffet, i'll take dibs on one of the jacket notes, man...

in italian...

Jock:
in from the ether to thank you for your commentary about Crystallex...

regards
joey

shark is absolutely right-> the small investor is able to out-trade a fund manager any day..usually the only thing standing in your way is you...

Jock,

Why find a Z$100B note for your grandchildren when, given recent developments, they may very well have US$100B notes of their very own? Perish the thought . . . .

Yes. And you, typically, are the BIGGEST possible thing standing in your way. You've got to be a bit inhuman to do this right.

2nd,

I'm pretty frustrated we have no non-financial instrument stuff. Commodities, especially gold, would be a heckuva choice, and I'll be lobbying for that at an upcoming meeting about the selections. They're probably afraid people will lose perspective and put their whole portfolio in gold. Geez, adding a Forest Products fund at this point would actually be helpful.

The best I can do is cash, and that makes me very nervous, as there is substantial stealth inflation right now. We're a small company, and I'm not sure those who are making the fund choices understand that there's lotsa risk in cash, too, because of the inflation (that Baghdad Ben says we don't have).

kent

Like teamonfuego, I don't trade much. Draw a channel around the S&P500 2year chart, pick the bottoms, and that's where I've bought. Simple as can be. Sell on the way up, if volume begins to fail. Trading 101. I flee fast, if wrong. Discipline over conviction.

I'm trading too small to make any money, but I have to leave some in the funds, and they're getting beaten hard. Dodge N Cox is 2.5% assets in Wachovia, and that name is -57% for them. Its scary we have no bear hedge.

If I cannot beat the S&P 500 for two straight years, I'll put it in Vanguard until I get my rhythm back. But I've only been beaten one year since learning to trade, rather than just buy and hold, leaving me with a lost decade. I didn't claw my way to the top of the food chain to get my money taken by liars.

At the same time, I didn't have to trade a market this hard. You guys must be going nuts.

kent

ALOHA !!

nemo ... "But who can afford to drive to the movies. HA!"

What I refer to are the BIG movie productions, like a BATMAN. The movie industry has already consolidated into DVDs and HBO(cable) and Z-BRICK once the theatre runs have ended ... its essentially all just content now. Not to mention foreign markets and sound tracks as well as merchandising. ITS ONE BIG MONEY MACHINE! Producers have to pay for those high paid actors somehow! Most movies see DVD sales as their biggest revenue generator!

Its like mining ... the more you spend on big budget low grade yields the less profit you have and in many cases ... losses! Costs to produce movies are rising rapidly.

Once again like in mining I believe the day will be ruled by smaller, maneuverable, adaptable film companies. Its sink or swim time and adaptability is key ... Like GM I am not so sure the big studios will make it in this environment. BIGGER IS NOT BETTER and the movie biz has a lot of risk and right now banks and private investors don't like much of that "R" word!

ALOHA !!

I disagree with Jim Sinclair where he states the following: "Physical gold is insurance. If some financial agent is holding physical gold for you in any form you have violated the insurance characteristic. What you do not have in your hand or safety deposit box is not insurance."

There is NO INSURANCE for ANYTHING in the entire WORLD! The only insurance you can count on is that you will someday die ... Nobody is born with a guarantee for anything much less the idea that just owning gold in your sock drawer will save you! Life has too many variables ... I believe you have to diversify physical gold holdings like Sinclair suggests you diversify currency and mining shares by moving to foreign exchanges.