Phil Gramm's UBS Problem

If the Texas senator and McCain adviser was supposed to keep the Swiss bank out of trouble, he's made a mess of it.

Former Texas Sen. Phil Gramm has emerged as the key behind-the-scenes economics/Wall Street guy for John McCain and is being touted as the treasury secretary in waiting. Since 2002, Gramm has been an executive with the U.S. operations of UBS, the giant Swiss Bank. An unintentionally hilarious interview with Gramm on the Wall Street Journal editorial page last week asserted that Gramm has "been a key instigator of some of the biggest money-making UBS deals of recent years." The interview was noteworthy not just for first-class butt-kissing, but for deliberately gliding over the avalanche of disasters in the past year that has turned UBS from a respected Swiss titan of discretion and risk management into a laughing stock.

http://www.slate.com/id/2194933/

For many, golden years mean less travel, more work

Nearly one-quarter of adults 65-74 are in the workforce, according to the Bureau of Labor Statistics, up from 19% in 2000. But in a tight economy, finding a job — or keeping the one you have — is hardly a certainty.

http://tinyurl.com/56zjyh

Construction Begins of the 200 mph, Solar Powered Turtle Airship

A new way to fly! Turtle Airships company announces the beginning of construction of a demonstration model of a new form for lighter-than-air airships. The airships are not blimps. They are solar powered and will reach speeds of 200 mph.

The airships take off and land straight up and down like a helicopter and are amphibious. They land directly onto the water and take on water ballast for stability like a boat. The airships can land in harbors, rivers, mountain lakes, or the middle of the ocean.

The Airship can save over $100 billion each year on fuel costs alone, another several hundred billion dollars in airport construction, and eliminate a major source of carbon emissions. Airships are a trillion dollar industry, still in its' infancy, that will grow for decades

http://tinyurl.com/5rzryk

Good morning.

Just one Cara 100 Ratings Change to report at this time:

AET - Target Price Lowered from $45 to $40 @ Credit Suisse.

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

Have a fun day at the amusement(abusement?) park.

I have been reading this site for about a year now. Thanks to Bill's warnings and other thoughts on this site, I am weathering the current storm better than most.

Now I read with interest what I'll call "Bill's Blue Chip" recommendations (GE WMT PG IBM INTC MSFT MCD XOM DIS GOOG RIMM ABB BHP TM DEO) for the next bull market. I am interested in thoughts on how to recognize entry points for these stocks for the long term investor. Perhaps we are still many months away?

I owe much gratitude to everyone who participates in the education of a Tennessee Hillbilly.

Mr Cara

Your "July 8, 2008 Bill Cara's Community Chat" post today, is one of your best since I have been reading your blog [Nov 2007]. It has so much valuable information at such a critical time.

You will never know how much of a help you have been to so many people who follow your site.

Thank you very much.

STAG-NATION

"Nearly one-quarter of adults 65-74 are in the workforce"

Systems broken, young people can't get jobs, Old people can't quit. It's a nation in decline. The ^%$&*^*& beard has spoken, so it's more of the same. More bank bailouts, more dollar disintegration, more stagnation in da nation.

And folks, there's one aspect to this current situation I genuinely don't understand. Every 10 or 15 years Wall Street pulls a whopper of a scam, we're used to that. What I don't get is, this time why did they leave all the phony debt on the balance sheets of the broker-dealers? It's as though this was the final bust-out, the last con job, the scam of all scams, the one that even their institutions wouldn't be able to walk away from. It's the 11th hour folks. BTW, my antenna is up too:)

We'll teach you about stocks, you teach us to make whisky...deal?

My favorite write-ups by Bill are those that don't stop at today's conditions but also describe some of typical scenarios that repeat themselves time and again. Having set of such scenarios in a trader's arsenal is necessary to be able to recognize the situation when it comes up and be ready to respond to it. Today's post is one of finest examples.

In times like these we need to know about whisky and stock trading....

Bill,

Why DOW 10000? Why wouldn't it reach the 7500 of the last bear market? Same with the S&P for the same period (800)?

If the finanacial system is breaking, which seems to be the case, how does the money get out into the markets for investment?

If the US is basically bankrupt, which it is, and we know politicians do exactly the wrong thing everytime, how does the dollar not face a long-term downward trend?

If the US has offshored the majority of manufacturing, and, as technology improves, offshores more occupations as they're converted to bits and bytes, how does it rebuild it's manufacturing base (the crash of the dollar forcing reinvestment here)?

With an economy built on consumption, and industries whose employment was contingent on creating debt, where do those employees go?

Of course there is energy: Oil is either up because of speculation/dollar devaluation, supply/demand issues. Funny though, OPEC blames it on speculators, but the easiest way to drive speculators out of the market is to jack up production to prove they can create a comfortable cushion and allay supply fears. They don't. Why? They enjoy making all this money? They can't? If they prove they could, they could then ratchet down production to control price.

Energy plays into the emerging markets. Of course, oil is expensive to them also, but they are emerging in an environment of expensive energy, where the US emerged and grew in cheap energy. They're lifestyles and logistical/economic systems will grow around expensive energy. Our's must be torn apart and rebuilt. The definitions of "neccesity" and "discretionary" will probably be redefined. What happens to retail then and all the real estate associated with it?

Shark:

Retirement has been a dream envisioned for the proletariat since Bismarck. Perhaps retirement is a mental bubble of this period in history, much like health care.

I want to add my thanks for a wonderful post. Today you absolutely hit it out of the park.

I need to ask VAD a question...Vad, I've been thinkin about what you told me and what I read about you. What proportion of your trades are short plays versus long these days?

Also, I remember in your interview you said you did 20 trades a day on a good day. Is that still true? If so, how do you manage 20 trades/day (5 at once?) You must be even more of a genius than I thought. I have trouble properly managing 2 positions at once and have stopped trying.

Anybody catch Bernanke's speech this a.m. in which he pledged to extend the lending facility for brokers into 2009?

http://tinyurl.com/6bdbpw

Did anyone NOT see this coming? Still, you gotta wonder if these "free market" guys are ever going to let this thing run its natural course.

shark,

short/long ratio changes on daily basis but honestly, I do not track it. It makes no difference to me, I take any setup that comes along and fits my criteria; long or short is not one of criteria. Generally, I'd say 2/3rds of my trades are probably long.

I rarely if ever have more than 2 positions open at the same time, and even that only if one of them in a slow stock. There is no way for instance I would trade RIMM and AAPL simultaneously. Trading RIMM while having ESLR open - why not, ESLR doesn't require uninterrupted attention. It has nothing to do with genius... it's simply a matter of trading approach and time horizon. Having fairly short time frame and taking trades as familiar setup comes along keeps you very liquid. See setup - evaluate it - take the trade if it triggers - trade accordingly to pre-canned scenario - close the trade as exit criteria are met. Repeat. Repeat. Don't fall asleep. Or do... that's how the day goes :)

Thanks for the heads-up. And do not sell your genius short(so to speak). You are living the reality that the rest of us aspire to, and you're a big hero of mine. Oftentimes I ask "What would Vad do..."

Kaimu - How about 10 OUNCES per ton - Red Lake area again - this time Rubicon (RBY)
http://tinyurl.com/5rtg4h

Should have disclosed I'm long RBY and added today.

Cyderman,

How good is the good news at RBY? I understand they found some gold in them thar hills...And I'm thinking of going long as soon as the sucker stops dropping:)

Added to DIG on the morning drop. Can't quite tell if the falling oil price will help or hurt the energy sector, but am guessing help their margins & demand.

Gold seems to have made a double bottom yesterday @ 916, and held @ 918 this morning. Will get out of my short position if it gets above 924, given this strength.

Shark - If you're looking for a confidence booster (as I was), just read what Alice Rivlin has to say....

http://tinyurl.com/5gqvqq

We'll talk about her ideas on how healthcare is the bigger picture later....

Guess that RBY news was pretty good.

Shark - Re RBY
The Red Lake area in Canada has produced some very successful high grade mines. Its still early for RBY but combined with the other drill results they've gotten, I think there's a good prospect for a mine. Other pluses are:
1) Backed by McEwen
2) No country risk (always relative of course - I own Canroys)
3) Plenty of infrastructure and mining experience in the area.
There are others on this board who know far more about mining than I do, so perhaps they'll comment.

Cyderman,

Thanks for the info. Watched 1.27 go by like a deer in the headlights.

Chickenpookie,

I read the Alice Rivlin thing. I am not looking for a confidence booster, and I certainly didn't get one from her. She wrote:

"The foreclosure crisis has been described as a perfect storm, but it was a storm that hit a strong, resilient economy which has been performing remarkably well for the last dozen years...Moreover, the banking sector went into the crisis in strong shape and most banks have handled the crisis well."

Cmon already.

IMB is on a tear this morning!!!

Nice rotation into drugs and biotech this morning. Let's see if it can get some legs.

With Heng Send down 3% last night, suprised that EWH is -.54%.

Nobody wants energy or copper stocks any more.

Bah, stopped out of DIG.

PHG - 32.0 (elec, health care, lighting) 42 wks low

cap 33 Bil, PE-6.4, Div 2.7

I like it here

sorry it is 52 wks

Shark - Though Alice's take doesn't improve your warm/fuzzy factor, at least she's not a Chicken Little.

But Chicken...What if the sky really IS falling?

Who among you remembers the great Andrew Dice Clay? Fill in the blank please.

"Little Ms. Muffett sat on a tuffett eating her curds and whey...Along came a spider, sat down beside her and says_________________"

1 year chart of GDX:GLD ratio, thinking a bottoming may be in the early stages,

http://jglobal.blogspot.com/

"What's in the bowl, b**ch"

Ooofaa!

the retirement dream---you will be able to return to the childhood you never had, not have to work, get up whenever you want. Some benevolent, loving force will send you money every month. Life will finally be good and you will be taken care of. Sweet revenge and compensation. But is it realistic?

Re: RBY

I had bought into RBY prior to the spinoffs, but the share price didn't hold. I sold the spinoffs and RBY. Once Mcewen bought in, the share price rocketed only to settle back. The spinoffs never recovered.

RBY had been panned by numerous commentators for lack of discoveries. But they have been using Quantec Titan 24 geophysical surveys and seem to have hit the same kind of gold vein you have in the Goldcorp camp. Just depends now if they can prove up a resource along the same discovery. It will be very expensive to do so, because its at depth. They finally did it, though and proved their geological theory.

Many gold juniors have been struggling to get their drill results out as quickly as possible, but even so, the winter news cycle has been delayed so much that important news is being tabled during the quiet months.

But then also there is still the widespread perception that gold is just a commodity like oil and will correct with the rest. This may not be the case this time around. Oil may correct as a commodity, but the gold price itself will be affected by changes in currency trades, more likely.

I think what we're witnessing is the beginning of gold differentiating itself from oil and all commodities as money. This is a lesson still not learned and accepted by the vast majority of investors.

Here are some of the best results in Canada out of the latest news cycle:

RBY results

http://finance.yahoo.com/q?s=rby

GOG.V results

http://ca.finance.yahoo.com/q?s=gog.v

GBN.V results

http://ca.finance.yahoo.com/q?s=gog.v

OSK.TO

http://finance.yahoo.com/q?s=OSK.TO

This one was impressive as well:

http://ca.finance.yahoo.com/q?s=ITH.V

I figure its better to invest in higher grade discoveries when it comes to gold, but you will notice the lack of share price movement even in popular "rock star" investments like RBY.

The BKX banking index is down only 0.18%, outperforming the S&P. This signals rally to me.

Thanks Fran6 and Moab, great posts!!!

I'm holding back on gold for a while longer (hope to liquidate some longs before jumping back into minors).

Sorry, GBN.V here:

http://ca.finance.yahoo.com/q?s=gbn.v

my mistake

Peter Grant said, "Some benevolent, loving force will send you money every month. Life will finally be good and you will be taken care of. Sweet revenge and compensation. But is it realistic?"

No!!!

The dirty secret of Social Security at its inception was lifespan. Simply most died within a few years of retirement.

Opps, now we are averaging lifespans into the 80's.

The majority are going to have to work till they drop.

Telestar,

I don't resent the necessity to work til I drop. Seems reasonable.

The four day selling wave of energy stocks seems to have abated "at the moment."

Is it opportunity or a noose.

Peter, I think that it depends on a person's line of work. Who wants to be doing hard physical work when your are 70?

Really Social Security is the government's big message of "hope." Just more mass psyhcology.

Banking index now up almost 2%. Short squeeze in some beaten down banks like FED.

John Templeton passes on. RIP.

[Bill Cara note: Sir John died at the age of 95, having lived the past 40 years in the Bahamas community of Lyford Cay. Without any question he was a great person.

I met him once and we talked about Canada. He told me his favorite stock was Canadian Pacific because, at the time, it was a conglomerate of major Canadian investment holdings. Unfortunately I think the stock that week was its all-time high and the company was soon ripped apart by vulture bankers.]

Checking out Kingz Capital, individual minimum account $150,000.

Fees
All Managed Accounts operate according to the fee schedule detailed below:

Monthly Performance Fee = 40% of net new profits*
Annual Management Fee = 0%

They trade through Dukascopy.

[Bill Cara note: We will update the chart on the home page as soon as KINGZ verifies the June results. We met with Dukascopy last week and are meeting KINGZ today. The Chairman of KINGZ is the CFO of Cara Trading Advisors Bahamas Ltd. Presently we are reviewing the trading performance and the client service with the first clients we accepted for this service, which we intend to do for any service we recommend, including ones where CTAB traders are directly involved.]

Telestar,

Of course; I am presupposing mental exertions which are for the most part enjoyable or at least potentially profitable. I would not wish endless coal mining on myself or anyone else. Good point.

Another interesting point with respect to Kingz is:

The results for June 2008 are actual results, while the results from January 2006 to May 2008 are hypothetical results that have been calculated using the actual performance (measured in PIPs) of Robert Grespinet, as publicly posted on the website for his signal service; with an expected trade size ratio, and adjusted for fees charged by KINGZ

Thanks, Kaimu, for your 2:36am post on inflation! I think I finally understood your point of view, and I agree with you! My limited understanding of economics tells me that John Hussman is correct when he writes:

“I've noted frequently over the years that longer-term inflation is not primarily driven by the growth of money, but rather by the growth of government spending. ... To the extent that real goods and services are being appropriated by government in return for an increasing supply of paper receipts, whatever the form, aggressive government spending results in a relative scarcity of goods and services outside of government control, and a relative abundance of government liabilities. The marginal utility of goods and services tends to rise, the marginal utility of government liabilities of all types tends to fall, and you get inflation."

Since M2 only considers government paper receipts in the form of dollar bills but not in the form of government bonds, I can now conclude that M2 is indeed inadequate for estimating inflation and we need to look at the annual increase in M3 + increase in the value of government bonds sold each year (which is not included in M3). That's why there are so many deflation arguments currently floating around – BLS stopped publishing M3 and people stopped using it, so economic models tell us that inflation is much smaller than it is, while the real world shows a much larger inflation!

So now I know why I am holding a large position in gold miners and a large short in TLT! :)

DavidV

Bill,
You were right on with commodities dropping this week. I guess Politics still trumps the power of HB&B.

Looks like I got scared out of DUG too early. My thinking was that since the FED did nothing the same dynamics would continue forward. They still may after the profit-taking.

I hope everyone had a great 4th celebration. We noticed more fireworks than ever this year. It made me wonder if people are spending everything they can before their credit is cut off or if that's what many people bought fireworks with their stimulus checks.

100% in cash and waiting for the Put/call and VIX spike. Maybe this earnings season will be a sell the rumor/buy the news one if earnings aren't as bad as traders expect.

Rob.

As I see it, on a 5 minute chart SPY volume is significantly higher on the upside than on the downside, lending credence to the rally.

2nd_ave: what do you think about my post at 11:56pm last night?

Thanks,

DavidV

DavidV quoted Hussan, "“I've noted frequently over the years that longer-term inflation is not primarily driven by the growth of money, but rather by the growth of government spending."

David there are a few schools of thought on this one, but I disagree with the above satement and think Kaimu would agree with me on this one, high rates of inflation are caused by high rates of growth of the money supply.

Here is a link on inflation.

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

Anyone watch the Jamie Dimon press conference?

"As a boy, Jamie Dimon attended The Browning School, a prestigious all boys prep-school on the upper east side. Later, he majored in psychology and economics at Tufts University, before earning an Master of Business Administration degree from Harvard Business School. "

He sounds, to any of you who've ever held a job, like the smooth-talking big-wig that he is, who parachutes in and talks to the troops just as the shit is hitting the fan. Later, he will parachute out a multi-mutli millionaire while you're looking for your next job.

MMMmmmh? Bernanke wants to move most of the SEC oversight responsibilities to the FED. Is that the inmates running the asylum?

Some extreme selling has taken place in NOT.V over the past 4 months. The manipulators must be having a blast with it -- first raising it from $2.7 to $7 and now dropping it to $2.4! I bought 1000 shares now at $2.43US, thinking of this as a great options purchase: the chance of losing $2430 is 0, while the chance of gaining $1000 within the next year is close to 1 in my opinion. What do others think about it?

DavidV

Helene Meisler on why the VIX hasn't spiked:

Okay, I finally have come up with a theory on the VIX and why it hasn't gotten jumpy. There is real selling going on.

While this may sound ridiculous to many, think of it like this: we've gotten so much in the way of redemptions in mutual funds that there has been real selling going on. Instead of buying protection against a downturn (ie. options) they are really selling. That's why volume has been high.

It's been a long time since we've had this much selling. The good news is that real selling ends up bullish in the long run. If you have sold, then there are no sellers above when we finally do rally.

Thus, the panic is in mutual fund liquidation.

nemo,

What are the statistics on mutual fund redemptions? How much outflow vs inflow vs historic?

Gasparino is so right on. Bill griffith, the Spanish chick and the queer guy sound so dumb kissing Jamie Dimon's fanny the way they are....

And Gasparino has the stugots to say it.

Dear Shark,

I don't know, but this is not the first time in the last couple of weeks I've been hearing about outflows from mutual funds. If what I understand about the VIX-that it is related to the put/call ratios (basically how much an insurance policy costs), then outflows would mean that people are foregoing the insurances and just liquidation the assets. I'll see if I can find some data. Then again, Bill probably has this info at his fingertips.

I don't mean queer as in gay, I mean queer as in weird. Spare the emails.

Although he may be gay. None of my business.

Yeah, but the Spanish chick is pretty hot. Oh, somebody was complaining about Erin Burnett a couple of days ago, but Trish Regan irks me more.

The Spanish chick has extemely large.....market savvy.

Website with Mutual Fund flow data:

http://www.amgdata.com/#create:home:Home:/php/trialSignUp.php

Equity Fund Inflows $1.7 Bil; Taxable Bond Fund Outflows -$995 Mil
xETFs - Equity Fund Outflows -$4 Bil; Taxable Bond Fund Outflows -$643 Mil

07/02/2008
Including ETF activity, Equity funds report net cash inflows totaling $1.738 billion in the week ended 7/2/08 with Domestic funds reporting net inflows of $3.277 billion and Non-domestic funds reporting net outflows of -$1.538 billion;

Excluding ETF activity, Equity funds report net cash outflows totaling -$4.035 billion with Domestic funds reporting net outflows of -$2.444 billion and Non-domestic funds reporting net outflows totaling -$1.591 billion;

Exchange Traded (Equity) funds report net inflows of $5.773 billion with the largest flows:
$1.774 Bil to the SPDR Tr Series I fund;
$983 Mil to the Sel Sectr SPDRs Energy fund;
$913 Mil to the StreetTRKS Gold Shr fund;
-$712 Mil from the MidCap SPDR fund;

Excluding ETF activity International funds report net outflows of -$1.365 billion;

Excluding ETF activity Taxable Bond funds report net outflows totaling -$643 million;

Money Market funds report net cash inflows totaling $1.988 billion;

Municipal Bond funds report net cash inflows of $330 million.

Equity Fund Outflows -$13.5 Bil; Taxable Bond Fund Outflows -$1.3 Bil
xETFs - Equity Fund Outflows -$3.1 Bil; Taxable Bond Fund Outflows -$885 Mil

06/25/2008

Including ETF activity, Equity funds report net cash outflows totaling -$13.471 billion in the week ended 6/25/08 with Domestic funds reporting net outflows of -$12.545 billion and Non-domestic funds reporting net outflows of -$926 million;

Excluding ETF activity, Equity funds report net cash outflows totaling -$3.055 billion with Domestic funds reporting net outflows of -$1.886 billion and Non-domestic funds reporting net outflows totaling -$1.169 billion;

Excluding ETF activity, net outflows are reported from all Equity sectors except Gold & Natural Resources ($122 Mil), Energy ($56 Mil), and Global ($15 Mil);

Exchange Traded (Equity) funds report net outflows of -$10.416 billion with the largest flows:
-$15.984 Bil from the SPDR Tr Series I fund;
$5.206 Bil to the Vanguard Ttl Stk Mkt:ETF fund;
$3.632 Bil to the Vanguard Emerg MktStkIdx:ETF fund;
-$1.944 Bil from the iShares Russell 2000 Index fund;

Excluding ETF activity International funds report net outflows of -$1.184 billion as net outflows are reported from all Emerging and Developed regions except Latin America ($2 Mil) and Japan ($3Mil);

Excluding ETF activity Taxable Bond funds report net outflows totaling -$885 million;

Money Market funds report net cash outflows totaling -$11.754 billion;

Municipal Bond funds report net cash inflows of $461 million.

Equity Fund Inflows $22 Bil; Taxable Bond Fund Inflows $1 Bil
xETFs - Equity Fund Outflows -$106 Mil; Taxable Bond Fund Inflows $139 Mil

06/18/2008

Including ETF activity, Equity funds report net cash inflows totaling $22.028 billion in the week ended 6/18/08 with Domestic funds reporting net inflows of $24.264 billion and Non-domestic funds reporting net outflows of -$2.237 billion;

Excluding ETF activity, Equity funds report net cash outflows totaling -$106 million with Domestic funds reporting net inflows of $369 million and Non-domestic funds reporting net outflows totaling -$475 million;

Exchange Traded (Equity) funds report net inflows of $22.134 billion with the largest flows:
$20.893 Bil to the SPDR Tr Series I fund;
-$1.217 Bil from the iShares MSCI Emerg Mkt Index fund;
$1.143 Bil to the Sel Sectr SPDRs Finl fund;
-$731 Mil from the iShares Russell 2000 Index fund;

Excluding ETF activity International funds report net outflows of -$384 million as net outflows are reported in all Developed and Emerging regions except Latin America ($6 Mil);

Excluding ETF activity Taxable Bond funds report net inflows totaling $139 million;

Money Market funds report net cash outflows totaling -$36.071 billion;

Municipal Bond funds report net cash inflows of $374 million.

May Equity Fund Inflows $7.9 Bil; Taxable Bond Fund Inflows $16.7Bil
xETFs Equity Fund Inflows $13.8 Bil; Taxable Bond Fund Inflows $13.9 Bil

06/12/2008

Including ETF activity, Equity funds report net cash inflows totaling $7.851 billion in May ($13.819 Bil xETF activity) as Domestic funds report net outfows of -$1.257 billion (Inflows $7.285 Bil xETFs) and Non-domestic funds report net inflows of $9.108 billion ($6.534 Bil xETFs);

Excluding ETF activity, International funds report net inflows totaling $4.843 billion, as net inlows are reported in all Emerging and Developed regions except Asia/Pacific (-$259 Mil) and Japan (-$26 Mil);

Excluding ETF activity, Real Estate funds report the second consecutive month of net inflows ($1.019 Bil)for the first time since February 2007;

Largest fund complex Equity fund inflows:

* $ 4.313 Bil to American Funds
* $ 3.712 Bil to iShares
* $ 2.712 Bil to Vanguard
* $ 1.364 Bil to Fidelity

Excluding ETF activity, Taxable Bond funds report net cash inflows totaling $13.946 billion with the largest inflows going to Investment Grade Corporate Bond funds ($6.034 Bil; 1.11% Assets); International & Global Debt Funds ($2.301 Bil; 2.01% Assets, and High Yield Corporate Bond funds ($1.822 Bil; 1.44% Assets);

Money Market funds report net cash Inlows totaling $94.047 billion;

Municipal Bond funds net cash inflows totaling $5.540 billion, the largest monthly net inflow to the sector on record (January 92).

Equity Fund Outflows -$1.5 Bil; Taxable Bond Fund Inflows $1.7 Bil
xETFs - Equity Fund Outflows -$68 Mil; Taxable Bond Fund Inflows $1.3 Bil

06/11/2008

Including ETF activity, Equity funds report net cash outflows totaling -$1.453 billion in the week ended 6/11/08 with Domestic funds reporting net inflows of $544 million and Non-domestic funds reporting net outflows of -$1.997 billion;

Excluding ETF activity, Equity funds report net cash outflows totaling -$68 million with Domestic funds reporting net outflows of -$14 million and Non-domestic funds reporting net outflows totaling -$54 million;

Exchange Traded (Equity) funds report net outflows of -$1.385 billion with the largest flows:
-$3.719 Bil from the SPDR Tr Series I fund;
$1.152 Bil to the iShares Russell 2000 Index fund;
$976 Mil to the Sel Sectr SPDRs Finl fund;
-$863 Mil from the iShares MSCI Emerg Mkt Index fund;

Excluding ETF activity International funds report net outflows of -$147 million as net outflows are reported in all Developed and Emerging regions except Latin America ($17 Mil);

Excluding ETF activity Taxable Bond funds report net inflows totaling $1.332 billion as inflows are reported to all sectors;

Money Market funds report net cash outflows totaling -$10.460 billion;

Municipal Bond funds report net cash inflows of $695 million.

The Spanish chicks face does not move. Botox and plastic if you ask me.

The Spanish chick had a nose job within the last couple of years, so I'm not sure everything thing else is authentic

With respect to Kneale, I could care less what his or anyone else's sexual orientation is. Kneale came from Forbes. He absolutely says some of the dumbest things I have ever anyone say on bubblevision.

Makes we wonder about Forbes or maybe that's why he's gone.

So oil takes a nose dive and me refiners go down with it. I'm not confident the break in oil will hold, and was looking to lighten up refiners. I think there will be at least a double top and probably an extreme blow off parabola before oil breaks in earnest. I don't think it will settle much lower than 120 when that happens. Just MHO.

Re: Gold Wheaton

Gold Wheaton is a gold royalty company which will buy precious metal production out of base metal operations, very much like SLW buys silver production out of zinc mines.

Gold Wheaton completes CDN$260 million private placement financing

http://tinyurl.com/5uzpmu

Google News Search

http://news.google.ca/news?hl=en&ned=ca&q=gold.wheaton&btnG=Search+News

Wow nemo..Impressive stats.

Telesta- Me too. I got nuthin against nobody. His major crime is he's a bull of unbelievable proportion. And as for Forbes, they have a long history of liberal hiring policy going back to their founder, who was well known for his "open mindedness". I love the founder's son, also. How can you inherit that much money and have as little fun as Steve Forbes?

Kneale is a Cudlow wannabe. The pay must be good and the audience gullable, because they are both clueless cheerleaders. The Cudlow Show now ranks with the comic section of the newspaper... I read it once a month for a chuckle. Once in a while they have John Brown on and he's worth the time.

Bloomberg is killing me taking about how we are "in a bear market" only when the market is over 20% off the peak. "Were "in", no we're "out", no we are "in" ...The anchors must just deliver the copy and the producres fill the prompter, indicating the producers are clueless bunch. I give the anchors more credit than that on Bloomberg.

Sorry, Larry Kudlow. I tend to misspell since he was teamed with Kramer (hehe Cramer.)

You could have nade a FORTUNE in Ambac today...any of you go long 20 or 30 thousand shares?

And yes. Kudlow is a shill, but the really amazing one is Cramer. He is so terribly, horribly wrong when it comes to the small picture, it's AMAZING he made money as a trader.
AMAZING......

Cramer only made money for three reasons:

1. His wife (who is apparently the real trader in the family)
2. His former partner (who was the trader in the team)
3. The benefits of a giant tailwind (i.e. huge bull market).

1 & 2 are from one of his books. 3 is obvious...a monkey could have (and several did) make a fortune in the dot-bomb bubble...hanging onto that fortune is another story.

So much of life comes down to

1) Timing

2) Not just who you know, but what THEY know

3) Your parents sociological status

Kramer says he made 24% a year in the 1990's. You could have made that by buying GE and holding.

Re: Dennis Kneale. Today Dennis astounded me with something that I thought made sense, words to the effect, "Wall Street is like weeds in a sidewalk. They CAN find a way to make money, and they WILL find a way to make money."

You could have lost more than 24% from buying GE and holding the last 3 months...

Oh well, long term hold I guess.... anyone buying KO?

Cramer VS the chimp

http://www.youtube.com/watch?v=RdzS2fgDVCc

Wow, NOT.V is getting crushed, down 16%. no support left down to what, 80 cents?! I've caught too many knives in this sector, but the temptation is so strong.

Speaking of tailwinds...looks like the market just latched onto one...

My July 28 calls for GE are on fire today: up 90% today. I will let it ride for another day...

UAUA up 10% and helping my Roth IRA out nicely. But how long will this summer rally last?

VIX falling to below 24 and market picking up.

GE (reports earnings Friday) over 28 now.

DavidV, on NOT, I concur. The company still has over $1B profits in the ground. Sooner or later the price will reflect this, and perhaps reflect more the price of a production company rather than exploration. Currently it is the playground of some big entities that are mentioned here often and that most likely would love to acquire the stock at these low prices.

Having said that, diversification is key.

FYI, in the same area:

PRB started drilling yesterday (location: 450m from NOT's Eagle One)
FNC (300m from Eafle One) and NRN will be drilling within the next two weeks.
FWR will be drilling within the next 3 weeks.
BMK and others are already drilling.

All these will be reporting...

Current market caps (in Ms):

Noront Resources $298.90
WSR Resources $58.20
Fancamp $52.70
Freewest Resources $52.00
MacDonald Mines $50.70
Temex Resources $45.30
Northern Shield Resources $31.50
Metalex Ventures $29.30
Probe Mines $23.30

I am long (and buying more) on NOT, FNC, FWR, BMK, PRB.

The Ring of Fire is clearly on fire (and at fire sale prices). Do your own DD.

The market took off when it broke the downtrend on the hourly charts.

shark--"So much of life comes down to 1) Timing
2) Not just who you know, but what THEY know
3) Your parents sociological status"

Yes, you can dwell on it or you can get up into that batter's box with one strike on you and hit the ball "outa" here. (Could be worse--immigrants get up into the same batter's box but already have 2 strikes on them)

TINY URL...

Tiny URL developer makes the newspaper:
http://tinyurl.com/58lus6

Oh, no! Please! NO! It's mister Moral Hazard himself!

Like SLB here for a trade. Boucing off Fib 23.60% level of 93.56 and 200day ma.

Seamus,

I'm with you. I've been beating odds my whole life.

Unlike Shark, I haven't been beating the odds, I've been just plain odd.

Happily adding to BA here 65.73. Nice double bottom on the 60min bars and breaking out of first resitance at 65.67.

I just wanted to describe the main ingredients of sociological position. Do some ballsy people come in from over the transom and ring the bell in a big way? Of course they do, this is America. Is that the most common path to success? Of course it's not.

3 big shots give speeches= PPT works double duty to paint the pig= Dow up 135.

Proud Papa: How does one catch a "falling knife?"

Grab it as it bounces off the floor . . .

This is tricky, but place your buy order at a price ABOVE the stock where you can be more certain that buyers, and not sellers, are in control.

Oil production at Mexico's Cantarell complex has declined by one third in the past year according to an article in the Financial Times.

Every rally is not PPT. There is either real buying or short covering going on here. Drugs and Biotechs look to be real buying to me.

Bernanke threw a bone to the broker/dealers this morning, which turned the financials around and took the pressure off the market. Someway, somehow they turned around the commodity complex as well, probably a combination of raising margin requirements and Congress scaring the pension funds into selling their futures contracts. Got to love the manipulation. If you have a crystal ball like Bill the manipulations can make you a small fortune.

Looking at Tenaris as a short; already short Teck Cominco.

"Could be worse--immigrants get up into the same batter's box but already have 2 strikes on them"

here is my thoery on immirant in the market. A person brought up in generally friendly society often feels uncomfortbale in an indifferent environment that doesn't care (i.e., market), perceiving such environment as hostile. Immigrant coming from a generally hostile society where any attention from surroundings was likely to be an unfriendly and dangerous, on the other hand, perceives such indifferent envrionmentas fairly comfortable, being only happy to be left to his devices.

Could be totally off base, but I like to think of it this way :)

If you shorted SKF or SRS in the morning you made a small fortune.

David-

Re your question(s) from last night- ProudPapa's response on my behalf is close enough...I've just tired of daytrading and felt the market had dropped enough last week to warrant a longer-term swing trade on the long side...

Also like this comment from Bill's opening post this morning: "Patience is the enemy of capitulation and the key to ultimate success."

shark--I believe you. And you get back up into the box after the brushback pitch. You're not alone.

Vad--I like it. It fits. All depends on your perception based on your enviornment.

" . . happy to be left to his devices"

SiO2 - NOT, et al.; thoughts on Gold

Can you pls. explain how you arrive at "$1B of profit" in the ground for NOT? Is this based on their July 4th resource estimate?

re Gold: esp. after the last 4 days, doubts creep in about whether gold will ever "have its day" again.

If wealth in the world were flowing to ultra-modern societies with no memory, maybe not. Maybe they'd hone in on "useful commodities" or future "rare-earths" as stores of value.

BUT, wealth is flowing - as never before - to China, Russia, and the Middle East, all cultures which have prized gold for millenia !

When things REALLY seem coming apart, how can gold bullion, gold seniors, and ultimately juniors fail to benefit?

Regarding the topic of TV business journalism, I sometimes watch the CNBC produced World Exchange.
It comes on in the middle of the night in my time zone...and one can watch the opening of business in Europe and get a review of what went on in Asia. They have an equal mix (male/female) of intelligent correspondents and the character of discourse is much different than US tv. More intelligent,no touting or breathless shouting of headlines. They usually have an impressive guest list and conduct excellent interviews. I give them a thumbs up.

It seems CNBC(usa) has adopted the Fox News model of using the sexy/like female to read the prompter.I heard one of the female Fox newsreaders say 'Fox girls don't wear pants " Tabloid-style TV. It's one level above the tabloids in the grocery checkout.

Jock -

Fannie and Freddie getting shellacked yesterday may be the start of the next phase of the crisis - nationalization of failing financials that are 'too big to fail'. Gold will find its legs in a hurry, but I think the 'Goldman' will knock it down to rain the trees of weak longs as it builds a position, just like they did with oil in January 2007. At least that is how I interpret Bill's vision of $820 gold. Gold usually bottoms in July/August, so it will likely be soon.

Jock, correct. Their deposits are very high grade, currently ~ open pit $2B. After paying for infrastructure, milling, smelting etc, there will ~ 800 million dollars of profit. Divide it by 129 Million shares = $7.00 per share of profit - based on the small estimates on the few holes done so far. Their reserves estimates are apparently very conservative. Do your DD. There is likely better land there, that's why I am shooting several of them.

The loyalty of Dimon, Bernanke, and Paulson appears to be to the HB&Bs, and not to the people of the U.S. You can't tell the gov't officials from the HB&B big wig. I'm suspicious when the three of them are out there jaw-boning. The pundits and tv talking heads pretend these guys are apostles preaching from the financial good book.
Baloney! These guys have an agenda and that agenda is to prop up the HB&Bs and to head off or minimize any tough legislation meant to reign in HB&B abuses.

Anyone else seen last weeks Vanity Fair article on David Faber's reporting on CNBC in the days prior to the BSC collapse/takeover?

This guy goes on national t.v. and blabs that a hedge fund told him that Goldman Sachs had rejected the credit of BSC for a trade (which later turned out to be false - the deal in question went through). CNBC is completely irresponible in allowing its "reporters & journalists" (hack,vomit) to reference rumors originated by hedge funds on national television w/o citing a direct source.

It disgusts me that this is allowed, especially that CNBC would (I said disgust, not surprise). If you are going to report on rumors, it seems that you should at least be required to provide your source, right? Which unnamed hedge fund is feeding this guy rumors?

CNBC has about as much jounralistic integrity as the National Enquirer. I hope they subpoena this David Faber criminal.

Jock

If geologists discovered a rare, maleable, non-toxic, non-oxidizing shiny metal this year, it would be in use as bullion in very short order, because it would become a popular liquid item tradeable for cash.

There's only one metal that does that. Can you guess?

Oil prices off sharply today, we'll soon see if that rotten mania bursts. That's the next step.

Now, I want people to engage in a very simple excercise. It will not be hard. It will only take a few seconds. I promise it will not pain you. Unless your head hurts lots.

Base metal mines are dependant on either Zinc, Nickel or Copper. So compare briefly the five year chart for Nickel with, umm.. lets say,... for example.... umm..... gold. Ok?

http://www.kitcometals.com/charts/nickel_historical.html

http://www.research.gold.org/prices/daily/

Anybody mentioning "Chindia" is fired and has to clear out their desk.

I just watched a video of Fast Money segment where all four traders mocked gold and laughed at anyone that would own it, and also disparaged Newmont as being down while gold is up on the year. It is truly amazing when traders can't comprehend a seven year long bull market or even the economics of mining.

Long way to go to the ultimate top.

Looking through my consumer staples type charts...PG, KMB, UL, etc I see some decent set-ups taking shape. Best looking chart to me in this group is KO.

I'm looking at daily and weekly charts, looking for oversold indicators/oscillators that are turning up, selling volume drying up, some obvious support areas to set stops and consequently position size. Since I believe this to be a short term counter-trend rally shaping up, I will use the shorter term chart to set my stop just under the July 2 close (50.75-ish) that has subqequently been tested twice. There is likely to be resistance in the mid 54 range (prior short term high) and again in the mid 55 range (50dma). The risk:reward on this shows me about 1:3 or 1:4 ($1 to the stop with $3 to first weaker resitance and $4 to the next resistance). Admittedly these r:r calcs are subjective/guessing games but I generally want to see at least a 3:1 for me to take the trade.

Comments on KO chart welcome. I'm putting this up here not to make a case for KO or pass along a "tip" but to show an overview of selecting a potential trade and some of the thought process involved. Hopefully this kind of thing is useful to the folks who are in the early stages of trading.

SiO2 - Thanx for explaining. So, I guess McFauld's is for real ! - Once mining shares come out of this temporary funk, the thing will be to see which McFauld's miner really starts to advance.

Are you aware of Canadian Orebodies (CO.V), spun out of Baltic Resources. They are at an earlier stage of exploration, but have considerable land at McFauld's lake:

"Canadian Orebodies has acquired interest in 3,351 claim units covering over 53,000 Hectares of land representing similar geology to that of the spectacular Noront Double Eagle Discovery in the James Bay Lowlands. Currently, airborne surveys are being flown over all of the properties. These surveys are expected to be completed in the near future and upon receipt, ground geophysics and drilling are also planned. The properties comprise of 14 land packages, 8 which are held 100% by Orebodies, 3 which Orebodies has the option to earn 60% interest into claims held by a private company owned by the co-discover of Voisey's Bay and 3 which Orebodies holds a 50% interest through a JV with MacDonald Mines and Temex. In addition, Orebodies holds a 1% NSR on properties held by both Noront and Temex."

(per CO website; disclosuree: small position, from the spin-off)

Baltic was created by Don McKinnon, who discovered the gold at Hemlo. CO stock had done nothing since the spin-off in March. Mkt. cap is a mere C$9.4M - an early stage lottery ticket!

Fransix -

Nickel has about doubled in 5 years, gold has about tripled. Copper is up over 4 times. Rhodium is up about 17 times.

I don't understand your point.

Crazy dow transports, up 5% cause oil corrected $8, but did the transports ever really suffer because of high oil in the first place? This sector continues to baffle me...

2 day charts on UYG/SKF (or, to be fair, on XLF)-> do they mark a (near-term or long-term) bottom? won't know until we know, but thinking it's at least a fair bet...

"while President Bush is currently running neck-and-neck with Jimmy Carter for the third-worst presidential market returns in history, President Bush is the leader of the pack as far as worst market returns go for two-term U.S. presidents"
http://tinyurl.com/5hp36a

My belief is oil's ease was a result of Iran's comments today.

Bill,
Thanks for the warning to cover shorts this morning. Timely as always. I'm ordering your book tonight.
Pat

Stop the Madness

http://tinyurl.com/5u58oq

I listened to the Trader Wizard. Many thanks.

Anyone else waiting for NOT.V to hit 7D, 7W, 7M RSI under 30 and then looking for the upturn in the daily RSI / MACD? The daily and weekly are definitely there, exercising patience on the monthly.

Yes Jock, I got two email from Mr. McKinnon this week. The graph on Yahoo is wrong because of the spin-off. I have its market cap at 11.8M (well, this afternoon). Cheapest I see in the area is Seafield at 5.1M.

Here's one of the reasons why NOT was pounded today: http://watch.bnn.ca/#clip65223, starting from 15:40.

This big entity made its money, sold it at a big profit, now they can pick it up back cheap if they wanted to. The fact that NOT has indicated they could go into production alone without raising further capital (a hypothetically viable scenario if they sell the gold in the Windfall property), i.e., without further private placements is likely not making these big entities happy. All hypothetical of course.

Lynch Mobs, "Tar and Feathers", and Frontier Justice are terms that come to mind as I read this article about Goldman Sachs, et al, trying yet again to sweep their fecal finances into pension funds, etc. Here a link to Bloomberg's revelation:

" ... Goldman Sachs Group Inc., JPMorgan Chase & Co. and at least six other firms are repackaging unwanted mortgage bonds as sales of CDOs composed of asset-backed securities fall to less than $1 billion this year from $227 billion in 2007 because of the global credit crunch. Re-Remics contain parts that are structured to guard against higher losses on underlying loans than most CDOs, allowing holders to sell or retain other sections at lower prices that can translate to potential yields of more than 20 percent. ... "
http://tinyurl.com/6ahsne

I read the other day that US demographics have turned the corner to more people over 50years old. Pension funds are going to be needed one of these days.

Re: Oil Trading

Oil markets just one big internationalized Enron:

http://folsomtelegraph.com/detail/87316.html

great article on the relative prosperity of Americans through the past century and a half,

puts an excellent perspective on how much has changed over the years, and yet we find ourselves on the verge of losing some of that prosperity.

http://tiny.cc/vSZss

"Buy low, sell high”.

Like most universal themes, every time I meditate on that it opens up new ways of understanding a deceptively simple principle.

Don't forget to buy on weakness, whether you decide to jump in early (on the way down), or late (on the way back up). Don't forget to sell on strength. That's really all it is, but so many things can get in the way. I tend to be early. Also not one to cut losses at 8% or fond of stop-losses-> when buying on extreme negativity, and in addition buying sectors/strong companies, being shaken out or taken out seems a bigger risk than taking a large hit...JMO, of course...

bill's book is a treasure trove...all of the above is better addressed (and in some cases with different opinions) on pp 242-52...

[Bill Cara note: After a bottle of 2000 Grant Burge "Meshach" Shiraz, Barossa Valley, tonight with dinner, followed by a superb cognac, I acknowlege that 2nd ave has it right. Then again, maybe my mind is on the wine? ]

LOL...

http://tinyurl.com/55urt2

My German ex-girlfriend won't translate this for me, but I picked up that this article states that HB&B have declared about 1/4 of total losses . . . or only $400B of $1.6T of losses.

Maybe I should get her a 2000 Shiraz to get her to spill the beans more effectively. ;-)

Dear Blowout Preventer, The article in German says

Title: THe Banking Crisis will get worse

Total losses are expected to reach 1.6 Trillion dollars. Financial institutions have only declared 400 billion so far. It's based on a study by Bridgewater Associates-2nd largest hedge fund in the world. Next line is idiomatic predicting a cascading or avalanching loss of asset values. The largest losses will be in US Banks. They think multiple institutions will fail because they won't be able to raise enough capital.

Bridgewater Associates is highly reputable (1st class), and have many of these banks as clients. George Magnus, of UBS, says they are on the pessimistic side, but they've been right.

Thank you, Nemo. I grew up in a town of less than 3,000 population, so I use the term HB&B to mean any bank that has an IT department and more than two tellers in a branch office.

Imprecise, for sure, but it helps me remember that virtually all banks are suspect until proven otherwise.

Next.... HELOCS, Credit cards and then pick a pay loans...

Or maybe the servicers of pick a pays will be gone before the actual loans blow up...

The only way i would watch fast money is for a laugh.

deflation is on its way with in the next two years. will asset prices hold up with a world wide global money supply contraction?
less money chasing the same amount of goods and services...

Then again, why should we believe those who are out to make a profit? what does kudlow say something about capitalism blah, i forget.

good luck on the 'trades' this week.

GE - I've been avoiding GE and GM because of their involvement in the housing industry. I can't justify entering when my stench radar indicates problems are being covered up. For me, the red flags raised with Immelt's proclamation that GE was doing great, just prior to releasing dissapointing earnings. This bellweather then proceeded to outperform the market by defining a new 52wk low....

GM - GMAC Staying the H*** away from financials... Without this anchor, GM might have a chance to swim in my pool.

BC was my performer of the day.

BabelFish translation of german news item:

Brisante Studie: Die Bankenkrise wird noch viel schlimmer

http://tinyurl.com/6kuek8

Congratulations, American Caraistas!

Whether one wanted to or not, we all own overpriced homes via FreddieMac and FannieMae.

I often oversimplify things, but I can't see where even THE FED has enough money to cover the $1+ Trillion in debt from these fine institutions if things get a lot worse.

Congress created Freddie Mac and expanded Fannie Mae in 1970 to promote home buying in the U.S.

The companies own or guarantee about 46 percent of the $12 trillion U.S. mortgage market.

Closer to a $6 trillion problem!

This may be a bit politically touchy: but why did Mozilo and Congress make it so easy to get credit for those who shouldn't have?

Re noront

If you run fan lines from the oct 2000 high through the .77 and 1.07 highs and then the Jan 2008 low you will see yesterdays low touched this fan line framing a pennent that has a price objective equal to that oct 2000 high fwiw just a thought. The monthly stochastics are also oversold.

Bmk looks pretty attractive now with all the hype squeezed out since Sheldon, Lassonde and Mac etal got involved.

I agree, a lot of drilling in the rof and surely there will be a spark that will ignite this area again.