JOHANNESBURG (AFP) - Gold production was severely disrupted in parts of South Africa as thousands of mineworkers downed tools to protest rising living costs, their union and management said Wednesday.

The stayaway in three of the country's nine provinces forms part of a build-up to a national strike organised by the Congress of South African Trade Unions (COSATU) protest against soaring food and electricity bills.

National Union of Mineworkers spokesman Lesiba Seshoka said the strike would affect mines in the Free State -- which produces around 30 percent the country's gold output -- as well as the Northern Cape and Mpumalanga.

"In the Free State there is already a total shutdown," Seshoka told AFP.

Wednesday's work boycott is part of a wider programme of industrial action which should culminate in a national strike on August 6.

"We want to send a very strong message that the poor are part of this society which puts electricity, food and everything beyond its reach," said NUM general-secretary Frans Baleni.

Rising costs of food and fuel, inflation and subsequent interest rates hikes have put pressure on the country's poor.

Daniel Thole of Gold Fields, whose giant Beatrix mine is situated in the Free State, said two of its shafts were operating with 10 percent staff attendance, and one with 90 percent attendance.

"The NUM applied for a one-day political protest action at our Beatrix mine.... There are some non-NUM members at work. Anyone with a mine in the Free State will be affected, it's quite widespread."

South Africa was recently overtaken by China as the world's largest producer of gold.

(in a voice heard near the mine)

BACK!........BACK IN THE HOLE!!!!!

Cara 100 Update:

DOW - Target Price Lowered from $43 to $37 @ Lehman Bros.

[Bill Cara note: Bill's Target Price for LEH is zero. Several months ago, with a market cap of some $14 billion or so, the company went out and raised $7 billion in new capital. Today the entire market cap is $3.66 billion. So, not only was the initial market cap eliminated by the market; the recent investors have had half their capital investment wiped out. Yet, the CEO of Lehman still sits on the Board of Directors of the Fed. The public should have zero interest in hearing anything from Lehman. As far as I'm concerned, they are dead from the ankles up, ready to be taken over by the likes of Goldman, Morgan Stanley or maybe Merrill even! Wouldn't the latter be a joke.]

I certainly hope the SEC does just as Bill suggests. These guys have been out of control. Ironic it took them eating their own to get some talk of action. Now we'll have to see whether its simply talk.

Crude Oil dropped in price. It is interesting to note that the drop occurred after Bush not only was removing an existing "Presidential Executive Order" that banned the drilling rights in Alaska and off-shore that Oil companies want, but was also now saying loudly "drill, drill, drill".

Actually, "Executive Orders" in the past have been used to implement the will of Congress. This President seems to have prided himself on using such Orders to deny Congress's will without any fanfare.

My point? Bill has mentioned, and I strongly agree with him, that the price of Oil will not come down until the Oil companies get what they want - Alaska and off-shore drilling. Well, here it is. Let's see what happens now.

I've filed several complaints with the SEC regarding illegal short selling. While I've always received a reply, it seemed to be nothing more than lip service as the securities in question remained on the SHO List for months and some of them are still there, years later.

Let's hope that the SEC is moved to action but from past experience, I wouldn't hold my breath.

Just curious, is the TOG still on and will it take place after the expected BIG drop this fall?

Sorry, spot, but I believe that you missed one important point. Although the executive order (put in place by the senior Bush), there is still a congressional ban on drilling that would need to be rescinded. And per Nancy Pelosi's statement yesterday, that won't happen. So what happens now is what's been happening for over 3 decades since the 1973 oil embargo...nothing.

Don't forget Spot, there was also a report issued, by I forgot who, yesterday showing a world drop in expected oil demand.

Sorry, I left out a phrase. Should read "Altho the executive order (put in place by the senior Bush) has been removed...."

RDR-That ban expires on September 30th. So, in good politician doublespeak, she doesn't have to rescind it, she just has to let it expire.

With regard to Cox's statement and intent to go after short sellers who apparently use his lack of rule enforcement to drive stocks into the dust, I may be overly critical of his word selection, but I only see that he is threatening only those who short sell those stocks that are "protected" by the Fed such as LEH, JPM, FRE, and FNM.

I would call that type of "selective enforcement" protection as being similar to that provided to "children of the Mafia" but not to Joe Citizen.

RDR - Nope. You missed my point which is that this President prides himself on denying Congress's directives. He has been reported as routinely signing into law Acts of Congress, but then just as routinely using his "Directives" to tell his "Dominion", the law enforcers, to do otherwise.

I am saying that he is effectively saying to the Oil Companies to go ahead and "drill, drill, drill".

But, of course, I may have misjudged this President who just wants to carry out the will of the people.

Amerigo, ARG.TO

http://incakolanews.blogspot.com/ is on a roll.

Another seeming jewel of a junior mentioned by Otto: a profitable copper/moly junior which re-processes tailings from CODELCO's Teniente mine in Chile.

Safe, pro-mining jurisdiction; profitable company, although not currently cash-flow positive; market cap. $131M.

Now trading below its weekly bollinger band = historically cheap, although has not yet found a bottom.

question: how sensitive is Amerigo's future to continued high copper prices?

Alaska Oil - Focusing here will expose the weaknesses and vulnerabilities of the pipeline, inclusive of the environmental diasasters inherent with drilling in the tundra. Taxpayers will now foot the additional burden of necessary anti-terrorist security upgrades and repair for a worn-out, rusty delivery conduit.

More neuclear power generation? Too expensive!
More coal-fired power plants? Too expensive!

We must reverse the trend of increasing energy consumption by shifting emphasis to mining energy in places like Detroit and in our own homes. Point of use energy resources such as wind, solar PV's and electric hybrid vehicles will ultimately become the most important aspects of our energy requirements.

re conspiracy theories: in 35+ years of varied employment, i have seen shenanigans of every conceivable kind at every level in the workplace, so there is absolutely no doubt it happens at the highest levels for higher stakes...of course, i've also seen integrity at every level...it just takes the right person at the right place/time to ferret out the truth...

Well, here's the link to CNN and a direct quote:

http://www.cnn.com/2008/POLITICS/07/15/bush.oil/index.html

On Monday, the president lifted an executive order that prohibited offshore drilling. A 1981 law barring the practice remains in effect, however, and Congress would have to vote to repeal the law before any drilling could occur. Congressional Democrats have opposed efforts to repeal the ban.

Partial repost of question from yesterday. Thanks Jock for addressing the other part.

Does anyone know how a US citizen can buy Canadian or Swiss 3 month Treasury Bills with no custodians, brokerages, banks, or anything else between the treasury bills and me? I cannot figure it out. Something like www.treasurydirect.gov except for Canadian or Swiss T-bills would be great.

2nd airlines are working owe you a gabagool.

I am keeping an eye on stocks that I follow that often have large short interest.

I am thinking that large naked short sellers must be somewhat concerned that yesterdays SEC announcement is the precursor to a larger ban on naked short selling.

If the bears aren't able to push the S&P500 back below 1213 in the next half hour, a doozy of a short squeeze rally may be in order.

2nd

This may be the start of your looooong awaited rally. Ooooo yea....the captain just told us to prepare for take off. ;-)

Bill, I contacted the SEC yesterday and asked for a response to why the SEC limited this change to the financial sector. I received a "we'll get back to you" response.

If you think about this logically, the financial sector is the facilitator of this fraud because they hold the fails to deliver on their accounts at the DTCC. It is not your small time BD down the street that is doing this, it is the big institutions and ironically they are the first to be put into protective custody.

right now, while the irons are still hot, each investor that holds stock in an SHO company should be contacting that company and requesting that they put out a press release to the SEC and ask, Why not us? If short sales and settlement failures can create dangerous negativity in a market, and disrupt market pricing efficiencies than who better to protect with pre-borrow restrictions than SHO listed issuers.

2nd
Doing very good
Now I have to decide get out or hold on for more gain
I follow your gut feeling and what a gut feeling?
Look like some one going to send me chocolate

Amory Lovins -

Are Caristas aware of this man, who developed producible cars 30 years ago which got upwards of 60MPG? He has been developing practical energy solutions for decades. He likes to say:

- there is a Saudi Arabia beneath Detroit = affordable existing technologies whereby vehicles could save the equivalent of 1 Saudi Arabia worth of energy.

- because we didn't put citizens in 40 mpg cars in the 80's, we had to put troops into 0.5 mpg tanks starting 1990.

- when Reagan relaxed Carter's energy policies, we wasted one Anwar equivalent in the ensuing year (one year!)

- had Carter policies been maintained, we wouldn't now need to be importing a single barrel into the US.

He appeared on Charlie Rose last night, but a speech and much more are on his website:

http://www.rmi.org/

long eslr again with bigger size

vinod

You have a verrrrrry GOOD memory!

New to board after lurking and learning from Bill and the community. Many thanks for the intelligent discussions.
Bernanke just that that all small regional banks can borrow at the discount window. Financials should rebound.

....so is the ban on naked shorts for 30 days going to allow all the named companies to declare their massive write-downs without heavy punishment?

Naked shorting - IMO, the SEC will now make a limited move on this subject, only after it has become an explosive issue.

Well that's just about par for how the US government thinks and functions, isn't it?

How can chasing after these worms who've been eating away at the foundation of the US economy possibly restore confidence?

I don't believe things will turn around in this arena until someone begins to accept responsibility for these oversights, by adopting a proactive strategy as opposed to the apparently reactive approach currently in style throughout government.

When will the SEC WAKE UP? We need the whistle blowers to step up here, a limited, selective enforcement of trading laws is simply UNACCEPTABLE!!!

Afterthoughts on energy -

Given US profligacy on energy, maybe the Iraq war WAS, after all, the right move on the global energy chessboard.

With the US having wasted energy and failed to develop new sources through the nineties, Cheney's energy task force surely told him in the early naughties of the grim energy outlook.

Oil people suspected (and a consultant report published last year confirmed) that there are probably 100B barrels of cheaply recoverable oil in Western Iraq. Added to known Iraqi sources, that country probably has oil equaling Saudi Arabia's.

Would it have been irresponsible for Cheney NOT to try to install a "friendly" Iraqi gov't to develop and sell that oil to the world? (Especially when a menacing bully like Saddam Hussein offered seemingly perfect political "cover"!)

Had Cheney known a thing or two about other cultures, and about military affairs, i.e. had the war been pursued competently, might the world economy now be in a better situation, with plentiful energy and stable food costs?

One thing is for sure: despite campaign talk, neither US presidential candidate would REALLY lessen the US role in a country with likely 250-300 billion barrels of cheaply recoverable oil "at play" in a world where energy and thus food security are increasingly elusive.

What an opening that would give to Iranian, Russian, Chinese or Indian companies equally desperate to find major new energy supplies.

Yet, what a pity the US was reduced to using brawn rather than Amory Lovins' brain to solve its energy problem. The US gambit in Iraq failed, and made the world a much meaner, uglier place going forward.

took a small stopout...this guys problematic right now

Jock

Why is UXG taking a pounding? It's close to its 52 week low.

Bill wrote about accumulating SU in today's discussion. Could be a good day to dip your toe in - down 5%.

Eager to Tap Iraq's Oil, Industry Execs Suggested Military Intervention

Two years before the invasion of Iraq, oil executives and foreign policy advisers told the Bush administration that the United States would remain “a prisoner of its energy dilemma” as long as Saddam Hussein was in power.

http://tinyurl.com/6avqdc

Just saw this excellent musical humor video on the Presidential campaign - "jib-jabs" both sides. 8)

http://tinyurl.com/63ba5f

For oil, think onions and tears

Lieberman and others champion the Commodity Speculation Reform Act of 2008, introduced on July 11. The latest in a series of bills addressing commodities, this would limit certain types of investment in US and overseas commodities futures markets.

If enacted, the measure would extend existing rules to unregulated investment banks that deal as intermediaries in so-called "swaps", or deals involving players who place opposite bets on the future price of a commodity. It would also bolster oversight by the US Commodities Futures Trading Commission.

http://tinyurl.com/5dcfgl

NUCLEAR MAKES A WORLDWIDE COMEBACK

Thirty-six new reactors are currently being built worldwide, while another 81 are in the planning stages. And it has not escaped the attention of Germans that new nuclear power plants are not just being planned in the emerging nations of Asia and Eastern Europe, but are also back on the drawing board in the United States and Great Britain

http://tinyurl.com/68mx59

jk484 - thnx for that fascinating article reviewing specifics of US oil policy motivation behind the Iraq war.

Amerigo IS cash-flow-positive as well as profitable, says Otto!

from http://incakolanews.blogspot.com/
a correction to my earlier post. I relied upon google finance's statement that Amerigo was NOT cash-flow-positive, but Otto just wrote to say:

"what your missing here is how ARG.to books its revenues. in 4q07 it used 3.56/lb copper, but when it came to 1q08 it found it had sold copper higher, so it added $7.13m on to its revenues as an adjustment.

FWIW, i'm assuming a 3m+ adjustment to boost 2q08 numbers."

Now, if ARG.to will just bottom for us and turn up, it will look absolutely delicious!

As Otto told me, do your own DD! -

ALOHA !!

ON PIGS
The pigs are running ... which pigs? What sort of ammo do I need for the wild pigs in Washington DC? I had a better night I only woke up at 4:30 to chase four(not twenty) wild pigs out of my pastures! Some of the Hawaiian wild pigs get up around 300lbs!

ON FNM/FRE
Now there REALLY is NO REASON to hold these dogs? If they stop paying dividends what's left? I mean why would US TAXPAYERS want to use their tax money paying out dividends?

It takes a stock price to drop 85% before management can figure out that paying dividends is not a good idea! UNREAL-L-L!!! GM just announced a similar revelation yesterday!! With management like that who needs a criminal justice system!

With no dividends why would pension funds want to hold these companies? Now pension funds know what OPEC and CHINA feel like when you hold tons of crappy paper(US Peso)yet you can't dump it or else the crap gets crappier and you lose even more! Its laughable what passes for "value" in this FIAT WORLD! I have to question why I have seen no media spotlight on the management of these huge pension funds? Why aren't their heads rolling? Any pensioners here at Bill's Blog, like from the California Teachers Assoc or IBEW or UAW? What's going on in pension land? I guarantee you the airlines will fill the US government's little "PENSION GUARANTEE FUND" in no time flat! So let me get this straight ... the US TAXPAYERS needs to guarantee all US BANKS(FDIC & SIPC), all retired people(SS&MED), all mortgages(FNM & FRE), all those unemployed and on welfare and on top of that all pensions(USPGF)? So what happens if the US government has to renege on all those promises because they run out of money? HA!!! I can't even believe you took that last question serious!!! I saw you ... you stopped for a second and actually pondered that!! HA!!! PLEASE-E-E-E ... when has the US government EVER run out of money? Do you really think these spineless politicians that proliferate the halls of Congress would take responsibility for the failures of past spineless politicians and their failed policies who started these entitlement programs? NOT ON YOUR LIFE BUDDY BOY!!! These guys will print money until its raining money! THEY WILL NOT EVER BE HONEST!! Ben Bernanke is ready and willing and so is Washington DC! Honest money will have to be forced upon America like the BLACK PLAGUE that it is made out to be! A total collapse is the only way to cleanse this monetary system, simply because of "egos"! That is the one basic flaw of a fiat monetary system in the grand scheme of being human and there is no escape ... none! Ego is what makes fiat so corrupt! Ego is sealed in ... it is baked in the cake ... it is embedded ... through hundreds of thousands of years of human evolution! Any denial of that fact is like denying gravity exists on Earth! Money will rain ... the rain storm has started! Get out your umbrellas and batten down the hatches!

READ ON:
Fannie Mae, Freddie Mac May Halt Dividends on Losses (Update3)

By Lynn Thomasson
More Photos/Details

July 16 (Bloomberg) -- Fannie Mae and Freddie Mac, the beleaguered U.S. mortgage-finance companies, may cut common stock dividends to preserve capital after their shares fell 80 percent this year, data compiled by Bloomberg show.

Freddie Mac will probably halt its 25-cents-a-share quarterly payment and Fannie Mae will likely eliminate dividends after more than $11 billion in combined losses since last year, according to Bloomberg dividend forecasts. Washington-based Fannie Mae has paid shareholders for three decades, while Freddie Mac, located in McLean, Virginia, increased its payout every year since 1990 before lowering the awards in November.

BA daily chart looking great here. Positive divergences and turning up in indicators, macd crossover, no real resistance until 71-73. Disclosure:long BA.

Jock,

you are most welcomed.

Is the PPT using naked shorts to intervene? Perhaps this would explain only selective law enforcement...

QT- i think vinod just likes chocolate...

Hi Bill:

First post. I've been reading your blog religiously everyday since 2005. I've learned and prospered tremendously since, from you and the many talented posters that comment on your blog. So I want to thank you and everyone.

However, I have not followed your sell signals on my favourite stock (SLW) and now regret it.

I bought SLW in 2006 at 11.67, and eventhough I had my finger on the trigger during your last sell signal, 18$ to 19$ price, I didn't do it. "Deer caught in the headlights".

Now my question for the traders out there. In the canadian daily chart for SLW, I see a big gap from 14.09 to 14.75. Do gaps always get filled?

I'm asking cause I'd like to sell and buy back more shares at a cheaper price. This is in my RSP, so no tax problems.

Again, thanks everyone

Gaps:

Gaps usually get filled, but there are no absolutes in this business.

QT - why is UXG near 52 week low?

Accomplished CEO, good drill holes, but no defined resources, much less feasibility study showing ore which can be produced economically!

And, even juniors which HAVE these goods are being killed, plus the gold price is drifting down ...

Lower bollinger band is 1.50. It would seem a safe bet there. I can't imagine McEwan unable to fund UXG, although there could be hurtful dilution.

I'm having this feeling the S&P500 will be above 1250 by option expiration tomorrow and possibly by the end of today.

Market volatility seems to have peaked and w/o the ability to drive down financial stocks with speed, there isn't a sector to act as the leader for downside movement.

I think the eery calm of this mornings rise is about ready to blast......

SKF - Dumped this one at a slight loss, almost sold at close ystdy, should've....

Thanks Telestar. I'm not much of a day trader. Just thinking of picking up a few more hundred shares. Building a position for the long haul without adding contributions. I heard a Gold trader say (on another site): Gaps always get filled. Since I don't have much experience, was wondering if that is true.

SandraT: Probably alot of gaps from 2000-2001 that never got filled.

A stop could have been used to take you out without having to act on the sell signal. You could have trailed a stop to each intermediate low as the stock advanced, or put one in place at a logical support level once the sell signal triggered. Another way would be to trail a stop a certain % below the high. Or you could have bought puts at the time of the sell signal for downside protection. When a stock has been making big gains and stalls out to give a sell signal, you could liklely pick up some cheap puts at that time if you don't want to dump the stock.

For now, what I see on the chart is this: The intermediate downtrend line from mid-March was broken 3rd week of June. It then retraced to that broken trendline around July 8th and bounced. If I were watching the chart at the time, the breakout and retrace look textbook and I would have wanted to get long once it went through the 50dma (because the 50 was so close and can provide resistance) with a stop just below the July8 low. I would still be in the trade with a keen eye on the 50dma, July 8 low, and watching how it reacts near the 200dma. Just one view.

Jock
Thanks for your thoughts on UXG.

Any ideas why telecoms not participating in the "rally" today?

Speaking of gaps always getting filled - anyone notice a gap we filled yesterday?

The DJIA!

Date Open High Low Close
7/19/06 10,854.22 11,038.16 10,796.7 11,011.42
7/18/06 10,745.84 10,867.02 10,658.35 10,799.23

Shorts are being cleaned out which means the next downleg will have even fewer buyers.

When does Merrill Lynch report?

Bill advised capitulation wasn't necessary, is this our summer rally?

Alaskan Pete: Wow - I see what you mean. I've been wanting to use Stops and never did. I'm looking into learning Puts and Shorting and stuff. One step at a time. Prior to 2006, I made pretty good buying and selling Cdn Oil Sands (weakness/strenghth). I switch to SLW and I've had a hard time selling it. Maybe I've fallen in LOVE with this stock. NOT A GOOD IDEA. Nevertheless, I can definetely wait it out for the next 5 years (I'm still in the green). I just need to sell into strenghth and buy into weakness. Thanks, much appreciated.

Chickenpookie,
dollar up, gold down, ag down, oil down...oops banks and automakers UP something smells

been long eslr several times during the day...daily chat's looking hopeful.

Moody's raised Russia's sovereign debt rating today -- well it's about time! With $574 bln in reserves, is there any doubt whatsoever that the government will be able to pay its bond holders?

Huge fundamental upside in a host of Russian oil & gas names like Gazprom, LUKoil and Rosneft, not to mention mobile operator VimpelCom, a Cara 100 component. Overall the Russian market is 40% below earnings-based fair value.

These are to exhaustion gaps that were created on the way down over the last couple months. If we have begun an uptrend today it would seem that we will need to at least revisit

Date Open High Low Close
7/3/08 11297.33 11336.4 11158.02 11288.53
7/2/08 11382.34 11510.41 11180.58 11215.51

5/12/08 12768.38 12903.33 12746.36 12876.05
5/9/08 12860.68 12871.75 12648.09 12745.88

The last significant breakaway gaps I see on the quick perusal are at

13487 on 12/24/07
12889 on 11/23/07

Considering the fact that there is both an exhaustion gap and breakaway gap at DJIA
12,700-900, I think this would be a decent target to keep an eye on......

Hoping that rose is benefitting from a raincloud and not from doggie firehydrant syndrome.

I should have said keep an eye on for a potential revisit in the LONG term.......

Alaskan Pete: True. Problem is, I always think the stock will go higher, in this case I was looking for 21$ to 22$ sell price. But I will finally use stops in the next distribution zone. I really did not believe it possible that SLW would go lower than it's May 2006 high. Boy was I shocked to see it at 12.72$ CDN not so long ago. Lesson well learned.

I know that bashing FNM and FRE is in season right now, but following Bill's idea of trading prices rather than companies, I picked up 2000 shares yesterday of FRE at $4.90 and just sold it for $6.40. Not bad for a day's work....

After a couple of RTs on Monday with FRE, I also hold 2k shares at 6.10. I'm just going to hold this for a week or two and see what happens.

Any views on TBT? Is it time for the TOG yet??? My initial position is down about 2%

With oil prices down, shouldn't we see a rebound in the refiners? XLE -2.4%. What gives?

allen - excellent job on the FRE, congrats!

Thanks CP. The profit covers 1/4 of my loss on TBT. But that's ok. I am still confident that the TOG will happen.

SandraT - re: I heard a Gold trader say (on another site): Gaps always get filled. Since I don't have much experience, was wondering if that is true.

Sandra, I don't know just what type of Gold trader you refer to, but if you are NOT trading Futures all night long, then at least for trading in US markets, almost every day IS a gap on GLD because while Gold trades around the world all night long, GLD at stock market open reflects only an end result of all that trading. Look at a daily chart and you will see what I mean - gaps everywhere.

Hope this helps.

Bill wrote about accumulating SU in today's discussion. Could be a good day to dip your toe in - down 5%.

Posted by: AdamG at July 16, 2008 11:41 AM [link]

Adam

Why not sell some puts waiting for it to come down? I'm looking at the Sept strike prices of 47.50 & 45 for possible put sales. Also, Aug & Sept stike 50.

You could sell the Sept. 47.50 strike puts @ 1.90; if "put" to you, your cost basis for SU would be 45.60.

Just a suggestion.

OIL:

OPEC lowered its 2008 forecast to 1.20% global oil demand growth, down from 1.28%. It was OPEC's fourth downward revision for oil demand this year. (pdf file)

http://tinyurl.com/5puuf9

Yesterday DIA closed with a daily RSI7 of 22. Looking at the 6 month chart, yesterday's volume was the highest for that time period. Today, daily RSI 7 has gone thru 30 and is at 43 now.

End of day (EOD) has brought more selling lately. However, suspect we'll end up and there could be a push this last hr. Just my 2 cents.

Spot: Yes, it does help. Still learning.

TOG - I think it started last month? Bill mentioned to sell several weeks ago. That's why you have TBT, right? It's PFM to me!!!

allen- congrats on that counter-trend trade in FRE...

From http://bigpicture.typepad.com :

Idoits Fiddle While Rome Burns

The collection of ne'er do wells, clueless dolts, political hacks, and oh, let's just be blunt and call them what they are -- total Idiots -- expands into an ever larger circle.

While the Republic burns due to the unsavory combination of incompetence, ideological rigidity, and crony capitalism, the fools and assclowns seem ever more determined to avoid any personal responsibility for the damages they have wrought. Instead, they flail about blindly, blaming everything and everyone -- except their own horrific negligence.

This is financial incompetence writ on a scale far grander than anything seen for centuries.

As a nation, our institutions have failed us: Under Alan Greenspan, the Federal Reserve slept through the most reckless and irresponsible expansion of bank lending in history for reasons of ideological purity. His opposition to the Fed’s regulatory role reached the point of malfeasance long ago. History is unlikely to be kind to the Maestro.

There is a choice to be made: Either we regulate the Banks, or leave it to the vagaries of the free markets to punish those who trade with, or place their assets in the wrong institutions. But for God's sake, do not give us the worst of both worlds -- do not allow banks the freedom to make horrific but preventable mistakes (i.e., only lending money to those who can pay it back), but then expect the taxpayers to foot the trillion dollar bill.

That's not capitalism, its not socialism, its not regulation, and its sure as hell isn't what free markets are. Our language is insufficient to describe this hodge-podge system, other than to call it a random patchwork of quasi-capitalism, quadrennial-socialism, and politics as usual. Ideological idiocy is the only phrase I can muster that has any resonance with the daily insanity.

We have entered into a fit of Orwellian madness: The American Capitalists, long the globe's leading advocates for free markets, have become near Socialists. Halfway around the world, the Chinese Communists have picked up the baton, and are moving rapidly towards a form of Capitalism. Ironically, it is the once largest communist nations -- the Chinese and the Russians -- who holds much of Fannie and Freddie's paper.

Hey comrades, who's selling the rope to whom?

Perhaps the rescue of "Phony and Fraudy" are not so much a bail out of American homeowners as it is a desperate attempt to stay in the good graces of our friendly global bankers. We are the world's largest debtor nation, and as such, we depend upon the kindness of strangers -- be they Japanese or Europeans or Abu Dhabians -- or even former communists.

Back in the States, something beyond cognitive dissonance is occurring -- this is full blown case of dementia unfolding in the public sphere. When this era of excess and absurdity is treated by historians in the future, the question I expect to be asked most is not why many of these people weren't jailed for their financial felonies. Rather, I expect them to wonder why so many of these folk weren't placed in protective custody, and heavily medicated, for the only rational explanation for their statements and behaviors is that they have gone so far beyond the bend as to be completely and totally insane.

Massively over-leveraged companies? Blame short sellers.

Wildly under-capitalized financial firms? Blame rumors.

Heinously poor corporate management? Blame a Senator.

It is as if someone is running around Washington D.C. with a ball-peen hammer, smacking senior government officials on their skulls. If you find the standard finger pointing hard to fathom, perhaps blunt head trauma is a better explanations for the absurdities proferred.

Books will be written about this period of time, and our descendants will wonder in awe as to how this was allowed to happen. Tulips got nothing on us! Its not just the total dollar value of the losses that have exceeded all other global fits of financial madness combined, but rather, how so many warning signs were so blithely ignored by so many and for so long. What was wrong with these people, the authors and historians will wonder. Did the antibiotics in the food supply drive them mad? Did the High Fructose Corn Syrup compromise their ability to think? Some form of viral plague? Roid rage? What else could have created such a mass delusion amongst not just the populace, but their leadership and institutions?

Indy Mac goes belly up, having lost $900 million this year alone. Its shares fell 87% in 2007 and then its value dropped (on top of last year's collapse) another 95% this year-to-date. The stock fell to 28 cents yesterday. Some estimates of the total bad loans made by this somewhere in the neighborhood of $30 billion dollars -- and the Office of Thrift Supervision blames a senator who is investigating how much of the FDIC's $53 Billion this is going to eat up, with Wall Street estimates ranging from 15% to 30%. The towering incompetence of OTS is incomprehendable, but it is their colossal gall that is truly stupefying.

From beyond the grave, Adam Smith does not know whether to weep or retch.

I placed a limit for my last 2000 shares of FRE purchased Monday at 6.10 and to my surprise, it just sold at 6.60. Now I have to wait til the next scare and repeat.

Re TOG, I purchased TBT at 72 a few weeks ago and watched it drop to about 67 in the recent panic, so the TOG hadn't really started (in the sense that government bond shorts aren't making money yet...) But my TBT position is 20% of my securities portfolio...

Moab,

Well stated and very true.

Not my diatribe. It is from http://bigpicture.typepad.com. The author is pretty sober, so it seems like we are not the only ones banging out heads in frustration at those in power.

allen - Could be FRE goes to $10 and beyond, from here... Why not? The earnings spin might do the trick.

My TACK - Concentrating on underwater longs/gain some profit in anticipation POG will come to me.

View from here is fed will cut rate to 1.50 by year end
They will be interested in growth
They can not control inflation, inflation is because of oil and commodity and it is out of fed's hand
So, they will go for growth

I wouldn't touch FNM FRE. Too much is at the whim of washington actors. If they decide to wipe out the existing shareholders as part of a bailout you won't be warned and you'll get a first class lesson in reaming. And with that possibility in many people's minds, you're not going to be able to pick up reasonable insurance via puts either.

moab - These are the fruits of not being able to see the forest for the trees. These guys have acquired a real nack for proving themselves completely useless!!! Just look at them during public appearances, don't they just look pitiful? A perfect example of how plain old fashioned stupidty and lack of common sense can overcome even the most powerful of economys!

And the misteps, lies, and corruption just keep right on coming... My only question is WHAT NEXT??? I'll bet my red portfolio against your red portfolio the SEC/FED/TREAS don't have the faintest idea how to answer that question!!!

UNACCEPTABLE!!!!

What better way to start rally and protect the FRE, FNM, financials than to threaten shorts. The average investor has no idea whether his shorts are naked or legitimate. This is fraud performed by the people the SEC is targeting to protect. Piranhas that have turned on themselves?

We'll see how long this rally lasts. I'm out of the market and will stay that way until after next week (vacation).

Perhaps by then the wild swings will have subsided.

Question: I read things like TRIN, VIX, TICK..can someone explain what these are?

Still learning: I hope to finish Bill's book while on vacation.

The FBI has launched an investigation into possible fraud at now-defunct IndyMac bank corporation, CNN confirms

They should continue on down the list while at it !

Skylane

TICK is advancing volume - declining volume. You can see the turning points in the market intraday as the TICK changes.

TRIN is [(Advancing issues/declining issues) / (advancing volume/declining volume)] : higher the more broad based the selling.

VIX is a measure of volatility as priced by options.

skylane -
I read they were investigating the bank, BUT NOT the individials who ran it... someone explain that to me please...is there now a corporate veil for criminal fraud?

jock - i brought up RMI a while ago, and suggested everyone download and read Winning the Oil Endgame. they have some good ideas and are well respected environmentalists. they are realistic about the transition from oil and have lots of data to back it up. Politics, as always is the hold up. invest accordingly.

vinod
Thanks for the info in your 3:23 post. Interesting.... that will sent oil & gold through the stratosphere.

Thank you moab. I appreciate that.

MGIC (MTG) got killed in the last five minutes on heavy volume.

Bears are lurking and waiting for their next meal.

Ok. While I suck down the rest of this Appleton's rum and orange juice and get ready for the beach, I gotta tip my cap to you 2nd ave.

Although the short covering rally in financials was probably the most predictable trade in memory. If yo didn't catch this one, or the upmove in general, you're retarded.

That said, I owe 2nd an extra kudos for picking a good psychological bottom (as well as a profitable one). Whether by chance or design, you are commended my friend. I myself caught much of the upmove in eslr today, at diferent times and in different amounts.

To the beach!

PS: In the above post I mean the collective "you" is retarded if you missed the upmove, not you in particular:)

TOG -

Nothing has changed, the fundamentals remain the same as months ago. I wrote in March (or April) that the TOG is to be legged in, meaning buy gold when it's oversold on buy signals and sell bonds when overbought on sell signals. At the time, I mentioned bonds topping because of the TA (overbought both daily, weekly and monthly), plus the simple conclusion that; how freakin' low can long yields go? How much downside on the short bond leg did you have? Come on people, how long have you been reading this blog? Plan the trade and trade the plan...Bill wrote about the TOG months ago, you should have planned the trade then, executed at the appropriate time and then told us all WHY you did it, your analysis, not Bill's.

Today, bonds may be topping again, but they are no where near the overbought levels that they were in March and if you think in probabilities, you should be kicking yourself for not putting your first unit of the trade on back then.

I don't mean to be harsh, and I definitely am not picking on anyone, but sometimes friends need to be hit upside the head with a baseball bat, me included.

Right now, as we all know, Bill is very busy trying to get his business launched and he needs our help more than ever. This is a community so let's try to help each other by doing our own due diligence and getting back to everyone with what we've found. Don't forget, buying and selling at extremes is much easier than trying to pick a direction in mid-cycle.

Just my $0.02.

Also, everything that is being written here is bearish long bonds, bullish gold (not in the short term of course). Stocks? Who knows, most likely bearish, but massive monetary inflation can flow into stocks, squeezing the shorts, leading to an unexpected bull market.

Bill,
Can you elaborate on buying the oil sands stocks in the future ie. SU
Im curious on your rationale? Is it buying long- term reserves in the ground? Do you feel an M+A frenzy or foreign buying is imminent? Your thoughts would be appreciated.

Found my March post:

"Please take note of Prieur's link and analysis, specifically the first chart on bonds. Notice how the top in bond yields in the early 1980's coincided with the start of the stock bull market. Falling yields is bullish for stocks. Where are we now in that relationship?

Now, simply look at where yields are at today. I asked the other day, how much risk does a trader have in shorting bond rallies in the coming days/weeks compared to the possible reward in catching a long term trend?

The current inflationary conditions will eventually lead to the bond top (bond yield bottom) and the start of the ToG (Trade of the Generation).

Btw, also note that the gold bull of the 1970's ended when bond yields topped (coinciding with the start of the 20 year stock bull market) - we are nowhere near that today.

Posted by: g034 [TypeKey Profile Page] at March 28, 2008 9:58 AM [link]"

Naked Shorts Rule - anyone know how this'll impact "inverse" index ETF's? SKF?

g034 - Bash ME in the damn head, PLEASE!!!

Please don't assume when you say something, we all comprehend what you are saying. I for one can tell you I have scant understanding of what you said above today, or three months ago, as it pertains to bonds. Generally, in review of the low volume of congruent feedback re:TOG in Bill's blog since, I must conclude that I'm not the only one experiencing difficulty comprehending.

ARE you attempting to indicate NOW might be an opportunity to pick up some TBT, municipal bonds, gubernatorial bonds, hexavalent bonds, or what? This is too vague and my noggin don't feel the effect of your baseball bat. My antennae aren't picking up your signal. My oscillator ain't tuned to your station.

I believe in my plan for the PM side of the TOG...,as I have indicated here repeatedly. However, again, your comments of several months ago and above appear to conflict with the signal transmitted containing Bill's most recent statements re: gold@$820 level.

I cry UNCLE, in my attempt to unravel these seemingly conflicting intricacies of the TOG!!!

Envelope delay distortion is the end result of intersymbol interference.

Chickenpookie: if you look at the charts of TBT and DOW since the last rate cut, you will notice two things. First, after the sharp rise in TLT following the rate cut (as rates fall, bonds rise), TLT started falling because of inflation fears. It continued falling for some time even when the March-May stock rally had reversed. In mid-June, however, when DOW reached near the March lows, the investors started getting so worried about the falling stock market that they started running for the relative safety of bonds, and Bill mentioned specifically that the fear of falling stocks has trumped the fear of inflation and bonds started rising. Right now, I think the long-awaited summer stock rally has started (DOW fell below 11000 intraday yesterday and the long-awaited VIX spike above 30 has also occured intraday). As such, I think bonds will fall off the cliff now, since the two anti-bond forces will team up: horrible inflation as indicated in the recent PPI and CPI reports as well as the rising stocks that reduce the need to keep the money safely in bonds. I have been accumulating TBT recently (at $69 and $67.5), and I expect it to rise above its high at $74 before this summer rally is over. However, in the spirit of profit-taking, I have placed a sell limit order at $71 for 1/4 of my TBT, and will sell the rest when I see the summer TBT rally get out of steam (it should last a little longer than the stock rally, as it happened last time). If Bill is right in predicting that the shares of some banks will go to 0 during the next sell-off in September, then another major flight to safety will take place and TBT will fall once again. But, as Bill said, that may not happen for another 4-6 weeks. :)

IMHO.

DavidV

I meant to say: "if you look at the charts of TLT and DOW since the last rate cut"

DavidV

With the summer rally, oil and gold should fall. When fear gets back into the markets, stocks will fall. This should make gold and bonds rise in price from short-term fear. So when gold gets close to $800, it will be time to load up for the long term. I think they might just cut rates to 1.5% for the banks, so I don't know if shorting the bonds will work short term when this happens as yields might stay low. In the long term, yields will have to catch up with inflation.

b0ss, I think they will not cut the rates on August 5, as the summer stock rally should still be going on. However, in mid-September, we might very well be in the middle of the last brutal sell-off, and the rate cut might take place. At that point, however, I expect to be fully out of TBT. In fact, I will start getting ready to sell all my TBT when I see the summer stock rally get out of steam in August.

DavidV

From Barron
The bear market in the dollar began in January 2001 with the index trading at 120. When it dropped below 80 last August, it cracked a multidecade support floor on its way to setting an all-time low at 71 this past March. That is a roaring bear for the currency in anyone's book.

But as the stock market stabilized after its own March low, the dollar formed yet another trading range that could have kicked off the healing process and an eventual reversal of fortune for the better. That hope ended July 11 when the greenback tumbled once again.

While a falling dollar is considered good for U.S. businesses as they sell their wares overseas at a favorable exchange rate for their customers, there comes a point where the weak dollar sparks inflationary forces. Most major commodities are priced in dollars and a falling dollar pushes up prices to U.S. buyers even if there is no real change in the supply and demand picture.

Wednesday's bigger-than-expected rise in the consumer price index (CPI) is all the proof we need. Inflation is here and that is not a favorable condition for stocks and corporate bonds.

The stock market reacted with many crosscurrents Wednesday, from the first bit of positive news in the financial sector (Wells Fargo), to the negative CPI report, to a second consecutive huge decline in the price of crude oil. But all of this happened in less than one trading day, so let's not draw any conclusions from it, at least not yet

vindo -
The Financial Times is reporting sovereign funds are cutting back on exposure to the U.S.dollar and questioning the credibility of the Fed and Treasury. This could be the beginning of even more big trouble. http://tinyurl.com/596qgk

Selected comments from Don Coxe Audio (July 13 from his island vacation) (paraphrased)

* The national debt just passed 9.5 trillion. If the government assumes the debt of FNM and FRE it would increase the national debt by 5.3 trillion. That's a 55% increase !!!! More dollar destruction ahead.

* Because a large part of FRM and FRE bonds are held by world central banks, there probably is a back door agreement to guarantee the payment of these bonds by the US. The US currently needs $70 billion per month of foreign inflows to maintain current balance the payments deficit.

* Due to the excess creation of mortgage debt and the leverage applied to this debt, small drops in home prices rapidly destroys the value of these debt instruments.

* Canadian mortgage lenders may encounter some loan problems in the near future but it should be small compared to the problems in the US.

* Negative real yields on bonds 5,10 & 30 year bonds continue to feed global inflation regardless of US recession.This will continue to create a negative enviroment for stocks, bonds and the dollar as the world's central banks fail to raise interest rates and create a positive yield curve.

* Supply restricted resource commodity companies will counter demand destruction due to a slowing global economy with higher prices due to scarcity and investor demand for real assets.

Ron Paul just on the Kudlow report... They showed a snippet of his questioning Bernake today. Kudlow said "gold is my favorite four letter word".......Couldn't believe my ears.

I am curious.... where does this idea of further rate cuts come from? Fed signalled the end of cuts last time around, FOMC notes today were all about inflation becoming main concern, necessity to time rate hikes right, not to be late to raise rates etc. Not sure where you guys got the idea of rate cuts continuing, it just doesn't look to be in cards.

"Envelope delay distortion is the end result of intersymbol interference."

Posted by: Chickenpookie [TypeKey Profile Page] at July 16, 2008 6:00 PM [link]

maybe...let me get back to you on that after a few more tokes..

shark- why use the word "retarded" when you can use the term "mortadella-" less likely to offend to anyone already in a bad mood...

hope you enjoyed the beach...alcohol does improve one's driving ability, at least in one's own mind...just kidding, alright...

Hope everyone is doing well lately. I have been busy trying to save my money and work harder than ever before. Making a lot of paper trades and boy i would have made 100% on skf.

But there will be other waves for this surfer to ride. best of luck everyone.

When in the future will the pension funds be under funded and looking for a bail out?

pension funds will never be bailed out- what incentive do taxpayers have to bail out other taxpayers?

Is the commodities run temporarily over?

Today was a tough day for the oil and ag stocks but I would appreciate everyone's input on this as Bill has always taught us that we should separate the company stock price from the fundamentals.

While oil may seem overbought, it would seem that ag could be a different story.

From today's news, we learn from Reuters that

WINNIPEG, Manitoba, July 16 (Reuters) - Canpotex, the export marketing consortium for Canadian potash miners, has raised its spot price for some Asian buyers to $1,000 per tonne, an analyst at J.P. Morgan said on Wednesday.

The new price is up 21 percent from current delivered values, and will take effect in the fourth quarter, David Silver wrote in a note to clients, quoting fertilizer industry consultant FMB Group Ltd.

Silver said the price hike would boost earnings for Potash Corp (POT.TO: Quote, Profile, Research, Stock Buzz), Mosaic Co (MOS.N: Quote, Profile, Research, Stock Buzz) and Agrium Inc (AGU.TO: Quote, Profile, Research, Stock Buzz), which jointly export potash under the Canpotex banner.

"We believe the rapid rise in offshore potash prices will put increase pressure on importers in India and China ahead of their upcoming negotiations for new supply contracts later this year," Silver wrote.

Is this therefore a buying opportunity that the big boys are creating before next week's earnings release or have we seen the top?

All opinions are welcomed.

Thanks to all for your daily commentary which I always look forward to reading.

1bullseye - You addressed a question about SU to Bill, and I too would like to read his response, but in the meantime you (and others) might want to read this link from 2002,

http://tinyurl.com/5eu6rw

in which the last paragraph is particularly appropriate to this discussion.

“ ... In the course of back-room bargaining to secure Moscow's endorsement for UN Security Council Resolution 1441 on disarming Iraq, the Americans reportedly reassured the Russians that their oil contracts with the Saddam regime would be honored. If so, others too--including the French, Chinese, Indians and Spaniards--will certainly insist on the same treatment concerning the agreements their companies have reached with Baghdad. So there would be very little, if any, oil left for the US companies to extract. .... “

If so, that might explain some recent news items that detail Iraqi oil deliveries going to China, etc - everywhere but the US. Little oil quantities coming here, so that possibly explains the drive now to start drilling for off-shore and Alaskan oil before Bush leaves Office.

The remaining question, of course, is “So, why did the US invade Iraq, anyway?” ...ego? I don’t know the answer, but with $us paper possibly not much longer acceptable on the World Markets for Oil, we’d better find some somewhere - including in oil sands. Jmho.

1bullseye

Don’t claim to speak for Bill, but as a member of the community, here’s some thoughts off the top of my head on your question reference oil sands companies. Bill obviously has additional information and an opinion on SU.

I’ll try to keep it short.

First, the reserves are in a politically safe area, which is an important distinction in today’s world. Think Nigeria, Venezuela, Iraq, Iran, Saudi Arabia, etc., etc.

Secondly, there was a recent important ruling in which oil sands can now be considered in calculating reserves. Prior to the ruling, oil sands were not allowed to be included as reserves. This of course makes them more attractive to large majors wanting to increase their reserves. A number of the majors have dwindling reserves despite continued drilling & exploration, which is expensive.

The oil sands reserves are reportedly huge.

I’ll stop there.

So if a XOM or CVX or whoever bought out an oil sands company, their calculated reserves would increase and the reserves would also be politically safe compared to other locations.

Oil sands companies like SU, IMO, ECA and others should be on your energy watch list.

Per Google Finance reference IMO: “As of December 31, 2007, Exxon Mobil Corporation owned a 69.6% interest in the Company.”

No positions in aforementioned at this time, but closely watching equity and option prices. Please DOYDD.

shark- re timing an entry on the upswing:

it's entirely possible, of course, that we had a one-day rally...but for argument's sake, let's say we continue going up-> when do sidelined investors make their move?

how many investors who waited for a (decisive) reversal before going long will be going long WFC after a 30% move? not many...they will want to wait for a pull-back...let's say they get one-> do they get in then, or do they then second-guess their decision, thinking it goes down even more? what if it never pulls back, and suddenly we're in a trading range in the upper thirties? then they're reduced to jumping in 10 points higher in the hope it goes to the forties...today's move is the kind of event that can make jumping in on the upswing difficult...(it's almost easier to short a 30% move...but what if that only adds fuel to the rally?)...

I've been busy these days so haven't posted as much. I did make the trade on RRPIX when Ben started talking up the $USD and go34 warned us, then waited and reloaded TBT (easier in and out)at 66.50.
You can pretty much see how the day will go/is going, by watching IEF/TBT and the indices.

Sorry I didn't post it go34. I thought there were quite a few Caraistas tracking the long bond and related long and short vehicles.

I kid you not!

Heard the following BBC story on the radio about an hour ago.

Then saw Tifosi’s post.

Headline: Farmers are increasingly using a novel way to a fertilise their crops - human waste.

http://tinyurl.com/55zoxu

couple of takeaways

“Human fertiliser costs a fifth of its conventional counterpart.” –IMO, don’t think POT will feel threatened---yet.

“it cannot be used on salads, fruit and root crops.”—Good to know when visiting the UK!

“Seven Trent Water, which supplies 600,000 tonnes of sludge to farmers every year, says there has been a 25% increase in demand over previous years.”-----maybe water (& sewer) companies can generate more revenue out of this. What a deal!

I’ve heard of selling sh__, but this takes the cake! Can one invest in Seven Trent Water on the London exchange?

2nd ave,

You're right. Retarded is not the right word to use. Let me say differently that anyone who didn't pick up on the bullishness today and go long is not in tune with the spirit of the thing. Bad bank news last night, thing rallies like a sonofa...seems like maybe there's more left in the move on this short covering thing.

For the truly retarded among us, you have my deep sympathy, and remember...Just because you're retarded, it doesn't necessarily make you any dumber than anyone else.

Seems like the market likes the government intervention idea.

Anyone that's ever spent time in Korea can testify to that "particular" smell of human waste as fertilizer. I'd rather short POT.TO than land at Inchon Airport when the wind is blowing the wrong way . . .

g034 & others...

Regarding the TOG (bonds)... I am also in the bearish camp when it comes to bonds. g034 had a great cover call back in June. I covered most my contracts during that time and have started legging back into my short above 115. I think we have seen the top for bonds. That being said, lets not hit ourselves to hard upside the head - we have plenty of time to leg into this trade. The hardest part will be staying with the trade. If this truly is going to be a TOG then we should be thinking in 5-10 pt increments on the bonds. Volatility and rallies will happen. Take advantage of the bond rallies and always - always have your own risk controls/tolerance in place. The gold bull market has been hard to stay on at times over the last 4yrs - I'm sure the new bond bear market will be the same. This will be the final pillar that Sinclair has said we need to achieve for the bull market in gold - hold on for the ride.

seamus

The New Brunswick ( Canada ) Sewage Comission has
opened a state of the art treatment facility for human waste.
The processed waste is being given out to farmers,gardeners,etc.. for free for the next year
in order to test the product.

Chickenpookie -
Thanks for requesting clarity on ToG. I'm not the dumbest guy around but I have also found myself confused at multiple points. I never expect anyone to definitively illustrate an entry and exit for *my* trades but at the same time...I was still confused on this topic.
So...to summarize my current understanding - TBT (as a proxy) will do well as the summer rally legs out. After a certain point the bond proxy should be sold and physical gold purchased, possibly somewhere between $800 and $850.
If this isn't close then...umm..maybe I am the dumbest guy around.

Take it for what it is worth. He is a big believer in the Elliot Wave Principle.

Robert McHugh, Ph.D

"Wednesday's rally generated several new "buy" signals in various key indicators - not all of them, but several. Many of the Daily Full Stochastic and MACD indicators triggered buys. The PPI indicators are now on buys. We also now have a buy signal from the VIX, as mentioned in last night's newsletter. It looks as if wave 1's bottom occurred Tuesday, July 15th, with wave 2 up starting today. There is a possibility that Wednesday's rally merely completed wave {d} up of a Broadening Declining Wedge pattern in several indices, meaning the final wave {e} down move would start tomorrow, Thursday, and take you breath away, with a 300 to 400 point decline. Can't rule it out. If prices do not plunge Thursday, then it should be confirmation that wave 2 up is underway, what should be a month-long rally. So the forecast is cut and dried. Either we plunge Thursday, or wave 2 up has started. The value here is that aggressive traders could start thinking about taking weekly long positions if Thursday's price behavior is benign.

Both the 30 minute and 15 minute charts' Full Stochastics suggest Thursday should see a decline in prices, so the intriguing issue will be if it is a mild correction of Wednesday's rally, say a retrace of 50 percent +/-, allowing for up to a 135 point decline, or will it be a plunge. In either case, wave 2 up is very close, at the worst."

[We'll see tomorrow. Goodnight]

SWF's are already pulling out of the USD and this means lights out folks...

"Some of the world’s largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency.

One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China’s State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings."

http://tinyurl.com/5gcfoa

Gee, I missed this....
"US to open 3.9m acres in Alaska to drilling"
FT times article
http://tiny.pl/2ts3

Concerns about the HB&Bs remain despite the elation surrounding Wells Fargo's 2nd quarter report and the dividend increase announced today. Foremost in my mind are concerns about the strength of earning power and remaining threats of credit losses at these institutions. Today's Wells Fargo report appeared rosier than it might otherwise have been because of one time gains and because Wells Fargo recently entended the period before it takes losses. Wells Fargo's earnings in the second quarter fell 21% over last year and past-due second mortgages increased by almost 300 million over the previous quarter.
In my mind, one time gains, extended write-down periods, and escalating credit losses at Wells Fargo are not grounds for euphoria.

Several financial stocks could soon look like a dropped pie.

Also, I totally agree with Bill regarding LEH. I do have one question to which someone here might know the answer. Assuming LEH goes private as they are hinting, will they still be able to receive a public handout at the Fed window? I suppose it helps in that regard if your CEO also serves on the Fed.

Seamus - Severn Trent
Symbol is SVT.L and tradable on IB I expect. Not particularly attractive chart. Most UK water utilities also handle waste treatment, and I think still need substantial capital investment.

Corner Stone - Ah-ha, so we're talking about Treasury Bonds, Thanks for the clarification!!!

As logic dictates, money leaves declining stocks, in search for safe harbor in other places like bonds and gold, and vice-versa.

It appears the TOG theorizes that when stocks are rising, treasury bonds should be sold (or shorted), and at some point gold should be bought, as gold prices will have fallen in simultaneous decline with bonds. The compelling reason for a move to gold in lieu of bonds at that point, will be (I'm supposing) due to a sour economy and rapidly declining USD.

Bill had mentioned his position is currently in cash. I suppose he will be buying stocks and shorting treasurys for the leg up in the next rally.

spot - OIL - From news I heard over a week ago - I don't know if anyone here is aware (I would think so), but my understanding is a new oil field discovery was confirmed in Iraq. This field is estimated to be second in size to the primary field in Saudi Arabia, and would be capable of making Iraq the second largest oil producer worldwide.

I also heard that development contract bids are/were being negotiated.

Please don't trade on this news, as I have not confirmed this information personally, and don't even remember where it came from.

Fertilizer - In Austin Texas, you can buy a fertilizer product called Dillo Dirt. This dirt comes from the Austin sanitary water treatment plant, and is fully composted (no foul odors). It is not recommended for garden use, but I can tell you from personal experience, it will definitely put a kick in the soil that's hard to beat.

OIL - or how about the Bakken field in North America. There must be at least 250-500B bbls there. Perhaps SU is linked?

Just received Bills book this morning, lets hope its been worth the wait after 13 months and three books despatched to me (and failing to arrive)by ISIpublications ,I have finally received a copy.If anyone else is still having problems,keep e-mailing them till they get it right.

Possible secondary TOG?? Assume for a minute that possibly Crude Oil really IS in surplus status as some say, and that the price is artificially higher than it should be (for whatever reason), and that the word is out now that price support will no longer be a given... What to do?

Not advice, but my trade screen now has a possible short on OIL (the etf/etn) and/or a possible long on DOY (the etf/etn). This being OpEx week, I might wait a little longer before any actual trades, but who knows - maybe the "fat finger of fate" will strike my keyboard. 8)

Good morning.

Here are your Cara 100 Ratings Changes:

Downgrade:

SBUX - to Neutral @ Piper Jaffray

New Coverage:

DNA - Buy @ Citigroup

Target Price Lowered:

INFY - from $48 to $42 @ Kaufman Bros.

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

Nikkei up 1%
FTSE up 1.62%
DAX up 2.26%
CAC-40 up 2.57%
--------------------------------------------------
Futures:

DOW +94
S&P +11
NAS +17

Looks like we've got a rally. Have fun.