vinod- so shanghai drops to a 52-wk LOW before the olympics...

http://tinyurl.com/5ejrv6

obviously, i would not have voted that way...

(the chinese government is still strongly influenced by the communist penchant for snuffing out traditions and superstitions...if you're a board member emeritus of the olympics planning committee you would probably have voted against a start date of 8/8/08...and if you're a board member emeritus of the treasury you're going to denounce any idea of driving the market up on a date associated with superstition-> o/w, how is one able to make the right attributions?)...in any case, my theory that they would drive it up this week had more to do with wanting to put smiles on the workers hosting the olympics and/or off-site tourist venues, and the exact opposite occurred...

but back to trading...i unloaded my remaining positions at yesterday's open (SLW/WGW/SWC), in 100% cash (which, as CP points out above, can also be an excruciating position sometimes) and still sitting on the sidelines with a coffee/Coke waiting for the next setup...i still think gold/miners is the sector to play right now..if it should turn out to be china, i'm just as happy to put my money to work there...

I don't know if this US dollar strength is going to continue but if it does, some interesting plays might be found in non-US companies reliant on exports who have been getting wrecked for the last few years on the strength of their local currencies relative to the US $. For e.g. lots of Canadian non-resource exporters have been showing some contrarian bullish behaviour the last few weeks. Problem is to find the ones that can shine through a Global/US growth slowdown (if indeed that is the looming threat). Maybe some plays like POT, that Bill added a few weeks ago?

I told you guys a year or so ago that the "article of faith", the idea that the Chinese stock market COULD NOT FALL prior to the Olympics was a big steaming load of bullcrap and that when you hear stuff like that you know you're listening to the rantings of a moron. Going a step further, when they say something is impossible in the markets it actually means it is inevitable, if not already happening.

To second Bill's above comments, gold has fallen and will continue to fall until either rates are lowered again or a new war begins, both of which are longshots.

Bill,
As you said this morning, 'The “Lessons” I teach were also hard earned.'
Let me add that those which hurt the most often earn for us later. For me —patience was the hardest. (There's a lot to be said for long-term memory ;-)

My guess is: if, or when, gold rises without regard for the $USD direction it will be because the market realizes the dollar is only paper. I have not been a trader and have only been a holder of gold funds, stocks and coins less than a year, but it seems most people don't realize, in spite of the rise in prices, that "king" dollar has no clothes.
I find your comments and those of here others helpful.
Thanks

No clothes? "King Dollar" is standing on the corner of 43rd street and 8th avenue in pumps, lycra nylons and a purple thong whistling at cars.

Good Morning.

Here are your Cara 100 Ratings Changes in play today:

New Coverage:

DELL - Outperform @ Credit Suisse
IBM - Neutral @ Credit Suisse

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

Have a great day and a better weekend.

Russia invades Georgia!

In related news, Mexico invades California and Arizona, and Canada invades Minnesota!

Maybe short GUR today on this disturbing news from Eastern Europe?

Or maybe RSX which has already cracked like a rotten egg over the last few months?

These Olympics ceremony are the most amazing thing. Watch if you can!

shark- order a big steaming plate of clams for that moron!

..as long as we're sitting at the same table, pass the Tabasco..

GG/SLW/TBT on the watchlist...

CP- i think you get a good shot at clearing off the SKF albatross this morning...

2nd
I am 100 cash. right now do not know what to do
will follow your watch list

quick reversal...

vinod- if yesterday was misdirection day, do you want to look at OEX calls? not recommending anything, just throwing that out...

XAU at 145...

Vad,
I value all of your comments and appreciate your honesty and approach to trading. While using stops may not be for everyone they are a wise choice to prevent hope from ruining a trade that has already gone bad. What I like about using them is that they take the emotion out of selling, which can be very important.

Thanks for all your comments.

Rob.

Regarding hard earned lessons:

I always thought, well not always, after the scars that is, the word "vicarious" should be stricken from the dictionary.

Into GFI at a new 52 wk low, also GSS.
ESLR at the lower trendline.

CALM- can't help but think the shorts ultimately take it up to 70 before things calm down...

It looks like the lower oil higher dollar being good for stocks may be almost played out. On other days like this the DOW would already be up triple digits.

Maybe it has to do with the fact that most of the S&P 500 that does plenty of business off-shore had their earnings boosted from currency exchange. With the dollar continuing to rise they won't see that benefit anymore. What does everyone think?

Rob.

Buy 100 Shares of SKF
Filled at $121.00

Was that "steaming plate of clams" for me? lol Serve them up!

Agree with 2nd....TBT is on my list at 66 or so.
Sorry about the clams 2nd....you can try Frank's instead of Tabasco....mmmmmmmm.

2nd
yester day was one of those lucky day
on OEX will stay on PUT side for next 4 week
let them go up so I can buy the PUT

As I recall, Bill advised readers against chasing gold at $960 some months ago and suggested "let the price come to you." Uncanny. Thank you BC.

vinod- SLW at 10.71/GG at 31.65...25% positions..

2nd
put order SLW 10.69 200
GG for 31.40 100 hope they get filled

CALM taking off...

Latest on McHughe’s - Elliot Wave predictions:

Yesterday's sell off looked to have completed an Ascending Bullish Triangle. If so then we should see a 10 day rally which could start today. This rally [stair step] will take us to 12000ish before the so called Big Plunge downward.

Dow: To 12000ish

Nasdaq 100 index: To 2000+/-

Gold & Silver: Headed for at least a 10% decline [stair step in fashion] from Wednesday’s close over the next month. Before ralling up. Gold is headed to 1300 and probably higher.

Just another view to consider folks. But this along with Mr. Cara's posts has kept me from selling off at a loss. Most of what I hold now is all truning green ready for sell.
Also yesterday's QQQQ knife I tried to catch is paying off nice today. Funny how there is no longer any pain after it turns green. :-)

Buy 100 Shares of GG
Filled at $31.40
Buy to Open Put 5 Contracts of -OEBTR
Filled at $5.40

GSS opening a position at 1.81...

vinod- you need to buying OEX calls, not puts...

Olympic is in China and Wall Street is celebrating?

2dd
I was right yesterday so I have to be wrong today

I know I shouldn't have but I heard the GSS siren song also.

TSO & VLO holders have to be smiling now after July's thrashing, I am.

now half-loaded on GG/SLW...GDX might be the better play for additional plays on gold?

Well looks like I spoke too soon. Rally on!!

The tell will be whether it holds the gains into the close. If it does that will be the first Friday in a long time where traders were comfortable buying Friday or late Thursday and holding over the weekend.

I still think the stronger dollar will crimp many companies' earnings who were relying on the weaker dollar the past few quarters.

Rob.

Buy 200 Shares of SLW
Filled at $10.69

Look at the dollar up 1.72%.

It has to be running up so when we bail out GM and FNM and FRE and then have to fund the FDIC when they run out of cash, the dollar will settle around the previous lows of 70.51 instead of crashing down to 60 or so.

Doesn't Bill talk about that concept sometimes? How they run up the market before bad news so it finishes around the same place it was before instead of crashing hard.

Rob.

Re: POG

The correction here is unseasonable, but considering a .75 dollar, we are seeing prices going back to last year. This is very surprising as the financials are deteriorating more quickly this year than last.

Consider if you will the POG compared to other commodities, and the fundamentals of the financial sector, the POG will find support, if not advance.

Most of the selling occurs in the London market, which is due to a certain ETF offloading other people's gold. Lease rates have improved, though not enough for a turnaround. But interventions to fix the price of gold were only as good as the paper they were printed on. Dumping gold on the market soaks up cash and creates a climate for a rise in price.

On the dollar side, we are seeing COT commercials net short, while the large traders have been correct on the long side and the short side in the past year. This is also very unusual, in that the commercials at the card table have all the players and all the cards.

I believe that because the ¥ is collapsing against the dollar in what is an incredible rout after an incredible run-up, this is having an effect on the whole forex, dragging gold with it. It really does look like the ¥/$ trade is an expression of markets since 2002:

Stockcharts.com ¥/$

http://tinyurl.com/5z53qd

The situation is the same with the €, though not as pronounced. Logically speaking, the price of gold should improve in other currencies as the dollar rises. A breakout in foreign currencies of the gold price will feed back into the dollar price. Once the ¥ has captulated, then this sets the stage for a major shift in values against the ¥.

What happens in the forex, with the €/¥ and $XSF/¥ this time around will be very important to the price of gold. The same occurred in the pound and the loonie prior to last year's runup.

Its all very pretty.

F6

2nd - UBS settles ARS 19.4B, up on news. Financials in "rally" mode, go figure. SKF finding support around $119. Anticipating sale into late day rise...

QT - Refiners: Do you think this'll turn the tide? The chart is trying to go up. I sure hope so.

Are there any good long term ETFs that have the refiners? Also, which ETFs are prefered for Oil & Gas Services. Looking for a more stable LT play.

Thanks for the help.

vinod - is yours a long trade? I'm guessing not.

vinod - re:GG

Man, I don't get it here sometimes. You're all conspiratorial and looking to blame this and that and obsessing about gold. Meanwhile as a relative newcomer to this site and having watched the markets closely for the last year and studied how it got here over the last 30 years, all I see is a golden opportunity for traders.

The US$ has been hammered for the last 7 years.
So, now, your US dollar assets are cheap as hell.
The Global Equity markets, ex US, are looking a little overpriced and risky today.
All I see right now is a month long rally in US Equities combined, for the first time in a long while, with a strengthening US dollar. This is panic buying. No one wants to miss out on this US recovery (if and when it happens) and anyway, the alternatives all look sicklier.
Of course this might all change - who knows.

c3

To me the weaker price in oil and the strong dollar are lifting our boats for now. Once I get at or very near my cost basis I will have my finger on the trigger. This rally [see QT 10:09 post] will allow me to "go green" so to speak, and once I do and depending how far along we are in this rally I will dump TSO and others and go to all shorts for the expected ride down.

Question for TA experts

The fall back in QQQQ a little while ago, is it trying to fill the gap from June 25-26?

http://tinyurl.com/6o8o9v

2nd,

Our GSS is starting to work out a little bit anyway.

Mackinaw,

We only obsess about gold because obsessing about sex hasn't worked for us.

Of course this rally in the USD cannot be based on improved fundamentals so what is the source of this mystery? In contrast to media spin, former banker James Tank has just solved this invisible hand and it originates from nothing more than central bank intervention into the supposed free markets...

On July 15th the US Dollar Index closed at 71.87, the lowest close since reaching its record low in April. This index was in the process of breaking down, and in fact it had actually fallen out of its uptrend channel on the following chart.

However, rather than continue lower and fall off the edge of the cliff, the Dollar Index suddenly and mysteriously reversed course. It has now risen on 12 of the 17 trading days since reaching that low, and closed today at 74.55, a 5-month high. What caused this index to suddenly pull back from the brink and then reverse course to shoot higher over the past three weeks?

So what happened to cause the dollar to rally over the past three weeks? In a word, intervention. Central banks have propped up the dollar, and here's the proof.

When central banks intervene in the currency markets, they exchange their currency for dollars. Central banks then use the dollars they acquire to buy US government debt instruments so that they can earn interest on their money. The debt instruments central banks acquire are held in custody for them at the Federal Reserve, which reports this amount weekly.

On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve's custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks.

So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff and doing so ignited a short covering rally, which is not too difficult to do given the leverage employed in the markets these days by hedge funds and others. So central banks pushed in one direction and funds and traders then stepped on board. In other words, central banks ignited the fuse of a bear market rally.

With this intervention, central banks have bought some time. But alas, they have not fixed the problem. Central bank intervention does not make the dollar "as good as gold", the description that once accurately described the dollar.

http://tinyurl.com/u29c

Oil in a total freefall. Too bad DCR had to die eh 2nd? Doy Uoy, and Oye ve! just 'aint the same.

c3
Are you holding TSO? Right now to me at least, we hitting resistance at the 17.80's level.
[See July 17-23]

http://tinyurl.com/5oenu6

"On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve's custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks."

That may be the dumbest application of grade school mathematics I have ever read in my life. You get a "D".

Chickenpookie
GG is not long trade
looking for few $ move

vinod- this is the gold market i remember from 2006...sharp corrections, long climbs..

gss-- I have 2000 to buy at 1.82 not getting filled

What a difference a month can make.
4 mon chart on DIG

http://tinyurl.com/5s766z

looks like market going to stay at this level untill 3.15

Mackinaw - I like that perspective, comparison with world markets is paramount. Let's not forget about the big real estate cloud looming. The oil moonshot was a huge disturbance and it'll take some time for the response to propagate out of the US market. China Investment Corp., etc. will no doubt play a major role.

If rally stage proves itself, I'll be raising stop limits and adding to positions on the way, let's go! At least I won't be buying on the way down hoping for a near bottom this time. Me thinks everyone else here has a similar strategy.

2nd
DGP -is better buy than stock? DGP is down a lot

SNDK is also trying to fill the gap of July 21-22
This could take a while.

http://tinyurl.com/65ezgb

Olympics - Am I the only one who finds the whole thing rather ridiculous? And not just the "no-fun" games. fI don't think sport should have so much to do with nationalisms (Hitler's, China's) celebrity, or commercialism.

I'm boycotting Coke, the largest advertiser - as I have for YEARS!

ECB intervention to prop up the dollar was almost telegraphed in March and April as Trichet made all sorts of comments about the US needing to support the dollar. There was no change in policy to support it; in fact even more bailouts were approved two weeks ago.

The powers that be are treating the symptoms (dollar weakness) and not the disease (runaway debt). Until that changes you can expect renewed dollar weakness against hard assets. The reason many of us are bullish on gold is most governments seem to be in a competetive devaluation of their currencies to maintain export competetiveness. In this environment all currencies will decline against commodities and real money - gold.

Equities may look cheap on a trailing P/E basis, but you are buying the past, not the future. Forward estimates are highly unreliable.

2nd,

I threw in the towel on that garbage...it just wasn't meant to be.

Of course, for some reason I was unable to pull the trigger first thing on that Fannie Mae at 8 bucks...a thousand shares of that crap would have made my week. I'm sick of this %$^&.

The golden opportunity is in gold and junior miners. We obsess about the value of the dollar as all our assets are denominated in dollars and gold (and silver) is our hedge. (at least for those of us in the U.S.)

Thus the golden opportunity.

Now, if someone can figure out how the Fed is going to save the banks/GSE's/economy/housing without issuing more debt/dollars, then I think everyone here would be interested in hearing some elementary school logic to support such a claim.

That the markets are manipulated isn't conspiratorial, it's a fact. Simply another facet of the opportunity.

Same thing for the long bond.

I don't see how this is an issue or is debateable. It's been working since I've been here and certainly well before that, and it will work into the forseeable future.

Vinod - GSS

I'd be interested in the appeal of GSS. It's at lows not seen since '03. Have you studied their fundies? production costs, etc.?

Or are you trading the chart?

now that gold's at 850, where are all the posts about buying?

scaling into GDX at 37.08...

vinod- DGP and GDX are down the same in percentage terms today...i'll take GDX over DGP...

Jock,

I could never STAND the Olympics either. To me it promotes the evil of patriotic nationalism expressed as competitive sport. Plus, it has historically been completely corrupt. And I'm supposed to really care about some 70 pound 15 year old female gymnast doing the horsey-jumpey thing? I don't think so. And to see the world Kowtow to the Communist totalitarian Chinese (yes, they ARE Communist totalitarians with a nazi streak) makes me want to reach for the barf bag.

Jock
no time to study charts or fundamental
I go with flow and if GSS go up 20 cent I make $400 out of my 2000 share
this is the only logic I use and it been working out good so far

There's no telling how far the dollar will go here, I'm staying neutral based on previous lessons in futility.

Jock
I have better knowledge of tech company I work in tech field
Junior is a new name for me and I never new or was interested in gold stock until I found this web site.

Sorry 2nd....adding to GSS at 1.81.
Added SLW.

Craig

Catching up, good to read you. I agree on the PMs, but with the long bond (which I am also anticipating under T-O-G), I'm not 100% sure.

If we enter a Japan like scenario (90's), interest rates could go lower and things will not be pleasant. I'm mulling this possibility over the next few days, although my short bond position is otherwise. Just my 2 cents. Perhaps Bill will comment on this in the WIR.

re: Mom-------been there, done that (w/ M & D) my friend. No one really knows until they go thru it themselves. Know the clean-up situation well. Only the best to you.

pog bugs may be interested in this:

http://seekingalpha.com/article/89646-is-the-price-of-gold-artificially-depressed

shark, you don't enjoy the sweaty female athletes...?

Sold 25% of CNSL. Div date is in October and I think we see a pullback before then, will add in the mid 13's. This one range trades like ESLR but the movement within the range is slower and tied to larger telecoms.

"The powers that be are treating the symptoms (dollar weakness) and not the disease (runaway debt). Until that changes you can expect renewed dollar weakness against hard assets. The reason many of us are bullish on gold is most governments seem to be in a competetive devaluation of their currencies to maintain export competetiveness. In this environment all currencies will decline against commodities and real money - gold."

I've opined before contrasting Kaimu's vehemence regarding the collapse of fiat money (basically every currency)and Bill's relative conviction in the world central banking system. Putting the corruption issue aside regarding fiat vs. gold, we're basically preaching to the choir on that, any government that has a fiat currency, has an economy based on a fiat exchange. Kaimu talks often about counter-party risk. Well, letting the $ go, puts a lot of counter-party risk on other currencies, yes? Therefore, painful though it may be, and perhaps a perverse logic, it makes sense for other fiat currencies to maintain a relationship with each other and especially the $ because of the size of the US economy.

In the future, and I don't know exactly when, perhaps when it's obvious the US isn't going to deal with it's fiscal idiocy and/or the US economy becomes trivial (somewhat unlikely) then the impetus to support the $ wanes.

"That may be the dumbest application of grade school mathematics I have ever read in my life. You get a "D"."

James Turk may be an ex-banker but I don't believe he graduated from Harvard as well.

Cheers - Fireworks

From Bill's Community Chat on 07/29/08.

"As to gold specifically, the 200d MA for $GOLD is about 885. I now believe that level will be thoroughly tested, as it was the week ending June 15, with a cycle bottom possibly in the 850-860 level before the price of gold soars again."

However, he then says;

"The support found during the lows of Sept-Oct 2006 and July-Aug 2007 will likely be found again this year (June through October) as traders move capital out of mortgage-backed assets (ie, Humungous Bank & Broker and REITs). Future highs, within maybe two or three years, will likely be in the 1500, 2000 or 2500 range."

This comment confused me. The support lows for Gold then were around $650. So, is it $850 or $650 for the low? I can't imagine Bill would be looking for $650 as a low. If indeed it is $850, then we are there now. Do we go up from here?

Bill, you were right on with the test of the 200 day MA. Great call.

Re: ¥/$

If the ¥/$ trade is the driver here, then its not whether we are at the low in the POG, but the question is: "How much is that Doji in the window?"

:0

I had to comment about Sharkie's post (Posted by: shark_attack at August 8, 2008 11:34 AM).

LOL - you took the words right out of my mouth in the last sentence. But, for me, it's always about KRY!

QT - there are a few refiner shut-downs todday by HOLLY and VLO. This'll affect the supply. Fundamentally, we are supposed to start the winter heating oil season in Sept. The refineries have lost a lot of money, but I am hearing that they had begun hedging and managing cost. I wonder if this spells the bottom for this group. (sure hope so).

On buying pullbacks - Perhaps the end of day buy on strong pullbacks is the right move? Doesn't that make you the buyer when the day is oversold, and positions you for an immediate benefit from the gap?

Today's chart seems a tad too artificial: linear with near constant slope from 11400 to 11600 between the open to 10 AM, then flat-line ever since. Usually, volatility creates peaks and troughs which seem absent today, as though some very deep pockets are smoothing out the buy/sell to a pre-ordained target of 11600.

Seamus, Thank You for the moral support, it is appreciated. We're in the estate sale mode now, then transferring/selling the house....not the most opportune time but we do what we have to.

Let's put it this way....the Estate sales people tell me the volume of antiques and collectables is almost overwhelming. Of course their cut won't overwhelm them nearly as much! I imagine it will make them quite happy. BUT, it's a lot of work. Three bedrooms, a garage and two storage units full....

I have to fly back on the 16th for more lawyers and the sale, then hopefully the house can go on the market and I will see light at the end of the tunnel at least for Mom's stuff. Her medical situation will continue for sometime I'm afraid. I'm sure you are aware of the stress.

My deepest thanks for the continued support.

Also a big Thanks to Shark for his welcome on my return.

You guys are the best.

C3

I believe you have a lot of very good points. But keep this in mind. If there is a BIG plunge coming, remember even Mr Cara has predicted a 10,000/2000 market, don't you think they'll puke refiner stocks during this drop. You can buy back at bargain basement prices then. And that should put you right at or before heating oil season. Something to ponder.

"where are all the posts about buying?"
Not many here as audacious as you
I am already long BMK WGW AUY GEA SLW SWC. Some in small starter positions. For further buying, my plan is to wait for a turnaround, thus missing the blood of catching a bottom.
I don't mind having you as the canary in the gold mine!
peace

Chickenpookie

I agree with you. I bought QQQQ near the end of the day yesterday and today at this moment it is up 1.75% and climbing.

Mackinaw, the figures mentioned are an increase of 2.2% over 3 weeks, which is about 40-45% annual rate give or take.

Of course the same could be said about natural gas with its 40% drop in 2 weeks which is about 500% annual rate of decline :-)

BTW, still short NG, not for much longer though.

On Olympics, it was the most impressive ceremony, seemed out of a sci fi movie.

I enjoyed Bill's sentiments about William & Mary College in Williamsburg.

This is not about finances and hope it's ok to share the following:

We lived in Newport News VA in early 70s and I took my young children to Williamsburg frequently when tourist season died down. We got an ice cream cone there & just walked up and down the main street of that beautiful historic town.

Then in 1996 my husband & I travelled pulling a new travel trailer to same town and then on to Jamestown. That was a weird (in a good sense) day. First, in the parking lot a secret service agent showed us his badge and asked if he could go through our travel trailer. He said he & his wife were interested in travelling on weekends. We said sure. I forgot I had unmentionables drying on the stove bar. I was mortified and he said "looks like home". He then gave us his business card (Senior Trooper (his name), Virginia State Police, Executive Protective Unit) and said if we have any problems in Virginia to call him.

Later, we went into Jamestown site and saw that agent high up on a platform with the Gov. of Virginia, Jim Allen. He was his bodyguard. We were simply in the right place at the right time as they were commemorating the Jamestown Rediscovery of a colonial settler remains, which became overnite world news. We got a gold commemorative coin given that day just to people there, saw the archeologist involved and then saw the skeleton remains in the open grave. Up close history like that is amazingly chilling.

Thanks for putting up with this post! I just got carried away...lol

scaling in RTH/XLY shorts

NT
Thank you... I enjoyed it. Now you got me wanting to Va. :-) Especially since fall is just around the conrner here in the east.

Ooops: go to Va

I got the Governor name wrong, it was Gov. George Allen.

Jock (on the Olympics),

I find the Brazilian women's beach volleyball team quite inspiring ...

Other than that, yeah. I don't have anything against the Olympics, per se.

However, I am sorry the Olympics seems to have pushed those old "World's Fairs" aside. (The fashion today is to call a World's Fair an "Expo." Sigh.)

I would be more comfortable with World's Fairs/Expos and their broader focus on trade, economic development, cultural exchanges, technology, those kinds of things ...

REG CROWDER

Virginia is incredibly beautiful as are many parts of the United States & Canada.

One more thing, at the Windsor Canada border (different trip) we had a motor home by then and they searched our whole RV inch by inch just because we had a mixed shepherd dog who looked like a drug dog to them! He's like a mix of shepherd & pit bull and really sweet. I'm done, I'm done....!

Might not be a bad time to play into a very short term UBS position. Settled thier auction rate security case and the RSI (14) and bollinger's are indicating that it's oversold. The only thing keeping me from pulling the trigger is that it's Friday - and the weekend loves news.

Mackinaw: conspiracies are just the ghost stories to tell around the fireplace as we wait and trade.

99% of conspiracies are just hot air to prop up this whole system, communication tools, used by various factions to keep others off balanced.

Over here they make good ghost stories.

The trick is knowing truth and falsehood are mixed into everything, so even the conspiracy stories can be helpful to figuring out direction

NT - I loved the post, thank you. I also love the eastern shore area. Warner(a real businessman) was Allen's successor, and went on to reverse the commonwealth's deficit by a good margin. IMO, Warner is a unique man and I place a great deal of faith in him based upon his accomplishments both in life and as governor.

National Presto(NPK): I mentioned this company yesterday but nobody responded. I keep chuckling at their business model: diapers and bullets! Nevertheless its stock is ... rocking.

Oh, and btw, I think NPK just broke out of a 16-year cup and handle pattern. :P

Posts about buying gold miners? I am watching but want to see some slowing of the downside momentum before adding. SLW may have found a bottom but GG keeps falling with only a small negative divergence.

I think Bill's comment about the lows of Sept-Oct 2006 and July-Aug 2007 was about the cyclic timeframe, not the levels. Gold tends to perform best in the last months of the year.

QT - Thanks for your response. My observation is a derivative from vinod's style of trading, combined with a desire to discover a strategy for leveraging those after-hour gaps.

This is about finances & trading. I'm learning a lot just by reading the blogs here. I got into the recent CNBC Millionaire Portfolio Challenge and applied Bill's trading prices theories (if I even totally understand that concept).

I didn't care if I liked the company or not, if the price was going up early in the morning I bought it (and bought others in the same sector). Then, I sold all the stocks at the end of the day and next morning again found sectors or indiv. stks going up and bought again. (If any headed down, I sold them immediately). I started this method about 3 weeks before contest end when I was at 3.8% ranking. At the end of contest I got up to the 0.5% ranking, which was 4167 ranking in a field of 785,000 portfolios. No prizes for that. Next contest I'll apply that trading prices only idea from the gitgo. It was fun.

i just bought more VLO.

i know i'm stubborn.

what the heck? Bear Stearns(BSC) is spiking! It's alive!

[Bill Cara note: No, that Bear is dead.]

QQQQ up 2% so far today. Chart TA looks good. Next resistance should be between 47.5 - 48 area.

http://tinyurl.com/5h6u57

teamonfuego

Is VLO short or a long term play? By chance are you concerned about a possible major pull back to the low 10000 range or even to 9700 in the near future? Have to admit you got a lot more guts than me. :-) I'm chopping at the bit to unload TSO [basis @ 19.24]

POS has breached the 300-day MA.

POG has a way to go yet.

Mackinow - I think you're onto something! I compared NPK to PWR and discovered an uncanny resemblance. Do you think these are recession-proof stocks? What's in this picture that I'm overlooking?

Chickenpookie,
Very similar over the last year. I find PWR a bit messier to value and understand. And what's that $1B goodwill item on their balance sheet? Ugh, I see Cramer is touting it also.

Any theories as to why bonds (TLT) are higher while the Dow is significantly higher?

Something for those interested in T-Bonds: There may be some conflict of interest inherent, but no more than I'm sure you are capable of filtering...

If you're already bond-"certified", then don't waste your time.

Starting with the second article, almost half way down the page:

From NBR Transcripts-May 19, 2008
Monday, May 19, 2008

http://tinyurl.com/58vtuv

Mackinow PWR - I'm not sure where this lead came from, probably some sell-side stuff that made it through my bs-radar.

QT - my thinking is its an ST/Intermediate term play. I don't see the market crashing until after the election because the powers that be are trying with all of their might to keep it afloat until then. And that means destroying oil. So I'm playing what I consider to be one of the safer bets right now. If it goes below $30, I'm out. If not, I'm thinking it can go to $45 or so...

BSC ticker has been reassigned to new DB ETF which is supposed to apply Benjamin Graham theories to its portfolio selections. In no way related to Bear Stearns.

moab- Misdirection day? Hell yes, and thanks for the advance warning...

Yah I just saw that OldGoat. It's the Benjamin Graham Small Cap Value ETN. cool

teamonfuego

I got you. Just please keep an open mind on "the timing" of a possible drop in the market. I don't want to get burned, nor do I want anyone else in this great community of posters and readers to get burned either.

I am thinking the banking index will make a serious run to long term resistance at 75 and roll over.

Anyone think this rally will last past August? September and October are usually dangerous months.

From a timing parallel, the S&P made a significant high on September 1, 2000 and then fell 15% over the next seven weeks.

Ok I'll bite...What's the exact mechanism for the creation/effection of a "misdirection day"? How do you do it? Getting the entire market moving in the wrong direction?

And why is there such little short interest in UBS?

TLT - Anticipated money flow from ARS?

ALOHA !!

Bill, I see where you are coming from regarding FRIDAY TAKE DOWNS IN GOLD, but you look at it different than I do.

This is what I posted yesterday in reply to johnuk and your comments.

READ ON:
ALOHA!!

johnuk ... What I say is that every Friday there is an attempt to take gold down. Obviously not every Friday is a down day for POG, but there is a concerted effort to "paint the tape" on Fridays in order to set the tone for the rest of trading for Friday but also for markets opening on Mondays.

My study shows that every Friday the POG is either flat or down(usually down)from where it opened after the close of the Asia and London markets. If you go to the KITCO link I provide below for daily gold prices and check every Friday between the hours of 8am and 11am NY time it is obvious that "someone" is trying to "set the tone" for traders. How often? Out of 31 Fridays this year there was only 6 where there was actually a gain, and a slight gain at that between 8am and 11am. Thats 83% of the time the POG goes flat or down(usually down) at the NY market open and morning sessions. That seems an excessively high ratio or is it just a fluke? That's how the FED operates ... they influence traders ... they paint the tape.

Obviously there are times when they fail, but evidence exists that traders are not just trading against each other. There is either open market "guidance" or outright "false data" that influence market directions.

Yes Bill is right in that the currency markets are far larger than the gold markets, but it is obvious to me there is an agenda at the US FED and US Treasury to make the US Peso and its debt markets a more attractive "safe harbor" that a Euro or gold. It boils down to the "C" word ... Fiat money cannot afford to lose "confidence".

I wrote an article a couple years ago where I copied the actual US FED meeting minutes, complete with dialog where they were openly plotting to move the US Dollar up. This was going back to the 1970s when then Fed Chairman Burns was in charge and Paul Volker was just a governor. Yet those guys discussed ways to move the US Dollar up on currency markets during a phone conference with Volker in attendance. Back then there was much more transparency and US FED meeting minutes read like a movie script. Now all we get are canned statements from closed-door meetings. Are we to assume the practice of manipulating currency markets or any market by central banks has stopped? NO ... plenty of evidence of that yesterday. The ECB caved into EU exporters and US FED demands not to raise. Yes Bill is right Forex traders take that signal and run with it until the next US Bank debacle. More important the rise in the US Peso is a market move, since none of the fundamentals for the US economy or its money have changed. Its boiling down to which currency is safer and none of them are in the long run!

Buried away in the news of the UBS and Citi auction rate securities buy back is this:
"Lance Pan, director of investment research at Capital Advisors Group Inc., a Newton firm that is advising clients on how to deal with auction-rate securities, said, "We view the Citigroup settlement as a major turning point in the [auction-rate] market development, as it sets a precedent." He added, "We are happy to see the dealers beginning to step up to the plate." The firm estimates that nationally, some $210 billion is still trapped in auction-rate securities."END

The entire LTCM debalce back in the 1980s cost $150bilUSD. Are the banks like UBS, Citi, Merrill Lynch and Morgan Stanley planning to pay back all that $210bil trapped in auction rate securities? There is no mention of that, but my guess is that the US TAXPAYER will play some role in cleaning that mess up also! That's just measly old "auction rate securities". You don't hear much about the AltA and other credit/rate sensitive derivative time bombs lurking in the background any more, even though their value is "quadrillion" now. Is that good for the US Peso?

Then there is FNM and FRE ... debt laden securities that now hardly even pay a dividend(5 cents)! What will the foreigners and pension funds think about that? Is that good for the US Peso?

KITCO DAILY POG CHARTS
Link: http://tinyurl.com/2uyamo
(Friday's are the green line)

I don't understand the exact mechanism, but it seems to be a way to get less experienced traders to buy puts ahead of a run up into options expiration. I suppose option arbs aggressively sell or go short to cause other selling and then reverse their position the next day.

Misdirection Thursdays before expiration in light volume markets and turnaround Tuesday (reversal of trend) seem to happen more times than not.

QT - I definitely have an open mind. I think we're in for a doozy like a lot of others. This is only with the money I have that is free to trade. The rest of my money is tied up in a long only 401k that is sitting in a TBill type fund waiting for a drop.

shark - 1930 - dozer
2008 - trackballs
Sale of nearly expired options, right?

Moab,

I would agree that when it comes to all things stock related, misdirection, in all it's forms, seems more often than not to be the order of the day. It's like a type of pyramid scheme, or a game of musical chairs. Those caught up in the music get left without a chair!

QQQQ [any holders?]

So far it is up 2.15% today and about .25+ from the next resistance level. If it breaks through that level today [especially after 3:10] I will reduce holdings by 1/3 - 1/2, then buy back again if there is a pull back on Monday.

shark - while you're flapping them handsome choppers, how about postulating on how we can capitalize on the knowledge.

Figure out how the largest number of people are vulnerable/can get hurt, and look to go the other way. Short should be considered at this point.

vinod, 2nd,

I have given up on gold/silver equities and ETFs. Trading DZZ, DGP and SLV only. Look at performance of SLV v. SLW, for example. Now I don't have to worry about operating risks. Am I missing something?

D#$MN! UBS up 4.75%, shouldda, wouldda, couldda..

WFMI - #3 in the mottley fool top 5 weekly award for dumbest stock moves... Yhoo #1, SBUX #2.

These were all in my port last close, without any thank yous or mint candies on my pillow.

the gold sell-off-> it's like deja vu all over again, man...all i can say is if you can stomach the volatility (and in this market everything is volatile, right), it's a good day to buy...does XAU get to 125-129? who knows...good chance it bounces before it gets there...

Keeping my shorts on... through the weekend maybe.

km- i don't have a problem with your decision...keep in mind the potential return on miners is much greater-> i don't have access to the current XAU:GLD ratio, but i'm guessing it's closer to a low than a high right now...

GG- adding at 30.85...

By the way even though they announced crappy numbers yesterday after the close CROX is really happening. I would NOT go long right here though, just a heads up.

Leaving for a week for Alaska cruise. No market, no news, no Internet... Good luck guys and gals, stay safe and make indecent amount of money!

Agreed, this would be a bad time to sell almost anything gold unless you bought yesterday, want to trade over, or don't want to make some profit.

Additional opportunity MAY be coming to a theater near you, after words, absolutely no one admitted...

All we have to fear, is me.

DYODD

Enjoy, Vad!

2nd

Here you go [$XAU:GLD] 6 months ok.

http://tinyurl.com/58oomj

Has anyone seen an analysis of whether C will be paying for the $20Billion settlement with US Taxpayer Money (ie. dollars from the Fed's lending window?)

QT -

Well said. Sorry for the late reply. I just sold a portion into $18. TSO is the most volital in the group. I hope to buy back around 17.5 or so. TSO tends to retrace 5% on the 5-7th day, if not every day. Tuesday & Wednesday are definitely iffy.

If TSO can maintain above 18 and the gasoline stock remain down, we could see it up near $20 (38% retrace) range.

TSO is really struggling to break through the 18 mark. The chart looks like it will be a difficult road to 19 for this portfolio killer.

Vad- have a great time (hate to tell you this, man..but the cruise ship will offer internet access for a price-> it's hard to really get away these days..)

OldGoat- do you happen to have a link to HUI:GLD or XAU:GLD (or the reciprocal)?

That's interesting Vadym. My GF and her girlfriend friend are on an Alaska cruise right now. Wonder if she'll come back. Anyway, have fun. Do yourself a favor. Leave the cellphone and the Blackberry home too. Come to think of it, I need another vacation.

I just saw a Bloomberg headline blip by along the lines of:

"Lehman says oil prices have peaked for next few years"

Timely, huh? Where were these geniuses 3 weeks ago? These brokers sure know how to deliver free useless market analysis......time to buy a slightly used Tahoe?

QT- sorry, just saw your link..thank you

Safe travel Vad. Enjoy the glaciers. August, early September the best months IMO.

NT & OT--Virginia. Actually heading out to DC and the VA area this weekend . . . short trip. Lived there back in the early-mid 80's.

Selling some longs into strength here and taking profits.

Moab, think you're on target with the options expiration next week playing into this weeks' moves and into early next week.

C3
Agree....another Wednesday's fuel report like last week and hopefully it will blow past 19 and upwards. Then I will pass the torch on to you C3. TSO and the guy who down graded it a while back has made my life miserable for the past month, can't wait to hit the Crammer sell button. SELL..SELL..SELL.. ;-)

QT -

FYI. Just saw this new on my screen -

DJ Fitch: Increased Borrowing by TSO COULD lead to downgrade. (Aug 8, 12:24 ET)

GG - bid limit @$30.75

Don't the institutions come to the table around 3:10? If so then we could see a big surge upward. Hopefully now down!

C3
Oooooo no! Wonder what "could" means in this case. You know...like the Clinton.."is"!

Anybody got the trading floor number? I'm gonna call down there and see why my order hasn't cleared...

SiO2: I think TLT is flat now despite the strong rally in the market because the dollar is up, and so the coupon payments received by the bond holders have a greater value now.

DavidV

2nd - As I noted a few days ago, 11-month H&S top on GDX projects down to 31 or lower. Am fighting desire to "do something" at current price levels. SLW @ 10.43 is enticing, but....

I was wrong on Goldcorp not reaching 30 but in a sense I am happy about it because I can get it cheaper than I imagined. The weekly lower bollinger band is at 32.64, so buying here should be rewarding in at least the short term, certainly long term, maybe not medium term.

GSS stinking up the joint. What would Jesse Livermore say about that?

Oh and whatever happened to that Mike_NYC guy?

C3

Check your intra day chart for TSO and you will see a big drop around 12:14 today. This killed the big rally up from earlier this morning. Since then, it has come back some what. Hopefully no downgrade will come until after next Wednesday's fuel report.

Yeh, QT. Learned my lesson too. I do think the Fall has a brighter prospect for refinery. Gasoline stock is like business inventory. It will eventually wear off and the price will go up with less supply, and of course lower crude price. People can stay home, but they need to warm the house unless we have a unusual warm winter.

GG A great re-entry level...

I think the entire world of gold investors have been disappointed at one point or another with GSS: delays, dilution, ect. It has high costs, nearly $600 per ounce if I remember correctly, so it is more highly levered to the gold price.

GSS - volume is light, so I don't think it's "capitulation". Much lighter than the even larger fall on 6.27. GSS probably has farther to fall.

Billy - does that mean a higher forecast for oil?

C3
Are you in the green with your TSO?

Max pain for DIA is 114, for SPY is 128, for QQQ is 45. We are significantly above these levels.

Backing up kaimu:

'...it is obvious to me there is an agenda at the US FED and US Treasury to make the US Peso and its debt markets a more attractive "safe harbor" that a Euro or gold. It boils down to the "C" word ... Fiat money cannot afford to lose "confidence".'

It appears that there need not be any doubt about the mentioned agenda, as not only did Greenspan admit (in Congressional testimony) that the Fed manipulates the gold price but the inflation slayer par excellence Paul Volker, in his recent memoirs, wrote (this is cited by John Embry) that his great mistake was not to have done so:

"Joint intervention in gold sales that was needed to prevent a steep rise in the gold price, however, was not undertaken. That was a mistake. Through March, the price of gold rose rapidly and that knocked the psychological props out from under the dollar."

We can be sure that Professor Ben is a good student of historical Fed policy and is rectifying Volker's "mistake"!

But this is not all. Embry also notes:

"Then, after the Washington Agreement in September 1999, which limited the sales of leasing activities of European central banks and sent the gold price up sharply, Eddie George, the governor of the Bank of England was quoted in a conversation with the CEO of Lonmin, a British organization with interests in gold mining. The following quote was included in evidence put forth in a suit lodged in a U.S. Federal Court. Mr. George allegedly said:

"'We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.'"

The full article is here:

http://tinyurl.com/6qth8g

Embry sums up:

"The U.S. dollar is currently experiencing a technical rally, and the weak gold price is part of the contrived scenario, but the longer-term outlook for the dollar is unquestionably more bleak than at any time since it assumed its role as the world's reserve currency.

"This distresses central bankers and, along the lines of Mr. Volker's remark, they are doing their best this time to make sure that gold doesn't emerge as the monetary alternative of choice."

For many of us, this panorama may be somewhat more formidable than imagined: all the world's central banks may already see common cause in defending not the USD per se but fiat money itself, no matter how irresponsible the US authorities have been.

So the technical task for us may not be accurately comparing the previous great rise of gold to $850, because the central bank armour and know-how arrayed against a repeat of that scenario may be far more effective this time. Or is it? Does the rise of gold depend upon a financial implosion happening? Could such an implosion be in the making? The economist Marc Faber has been quoted as saying he believes so.

Last night I was finally able to find several convincing reasons as to why we are in a long term secular bull market for commodities.

1. Recall that the commodities took off in 2002/2003 not because of the falling dollar, but because investors realized that the economic growth in BRIC (and other) countries (and hence demand for commodities) is proceeding exponentially, while the new supply of commodities is not rising exponentially. Exponential rise in demand is not scary for short-term traders as long as there is more than enough supply. But when annual consumption gets close to annual production, then exponential growth of demand will imply an explosion in the prices, which is what we have been seeing.
2. Sharp recent growth in the mining costs is an indication that new supply is harder and harder to get online. Hence, there floor under the gold/silver prices is rising just because of that, so we shouldn’t fear gold falling back to $650.
3. US Government spending is rising => more paper (dollars, bonds) is issued => high inflation => greater value of dollar/silver as alternate currencies.

Bill – do you agree with these the reasons? Do you have some other reasons that you have for your claim on the long-term secular bull market in commodities?

So if the market is rejoicing today because the economy is not going into recession, then the supply/demand side of the story will pull up the commodity prices. If the US economy does go into a severe recession, then Fed will bring rates down and print more money, which increase inflation and the alternative currency story will bring commodity prices up (we have seen that happening for the last year).

Do not forget, the general market likes to be in equilibrium, and the Fed adjusts its rate in order to keep that equilibrium. Locally, however, there are delays in propagating the various influences, which represent trading opportunities. So I started scaling into SLV today, buying the first bunch at $15.24. I also picked up more SWC at $6.37. I have also placed a buy limit order on SLW at $10.00 (I noticed that when a sharp rebound is unsuccessful, the price usually falls below the level from which the rebound has occurred, which was $10.50 for SLW).

I think it is important to have both the metals and the miners to play the commodity bull market, because gold/silver will fall another 20% only if the mining costs come down significantly and lower the “floor” below the gold/silver prices. In this case, however, the miners should stay flat long-term, since their profit margins will not change. If the costs keep rising, however, then the gold/silver prices will have to rise, while the miners will stay flat because their profit margins will stay flat long-term. So for a long-term investment, it is important to have both the miners and GLD/SLV. I still haven’t figured out how the rising mining costs affect SLW, which just re-sells silver that is given to it at $3.90/oz per its agreements with the miners. I’ll call them up today and will try to find out.

DavidV

CP - Just another meaninglessly, vague, and useless headline from the wallstreet hope/greed/fear machine. Would have been a lot more impressive if they'd made that call while oil was flying high in the $140s, right? Its easy to have a view of something that has already happened.

I'll make a bold call now: Lehman has topped out for the next few years :-)

Reduced QQQQ holdings by 1/3 @ 47.37

Another 1/3 of QQQQ @ 47.42

Will buy back if there is a pull back Monday.

Interesting, everybody seems to be making the point I think I was trying to make regarding world fiat currency: Bill and Kaimu will be better hashing out the theory than I.

Again, $ reserve currency plus huge reserves in other government central banks leads to world-wide counterparty currency risk putting all currencies at risk.

So, do they keep the $ afloat thus keeping their currencies afloat, or does it all go BOOM?

Billy - "Meaningless and vague" - Agreed, an attempt at describing something which cannot be understated.

GLD/QID - Interesting to note how closely they track one another...

QT - no. I had too much patience wrongfully and trying to outlive these slackers. I am in a risk reduction mode right now.

I'm in on SLW. I bought 5 Dec calls with a $10 strike for $1.95 each.

Even if we aren't near a bottom for commodities, I'm thinking we're close enough that December expiration ought to hook me up. My target for SLW is $15. That may be too optimistic if we have too much more intervention in the USD markets but I just can't see the dollar rising much more with so many financials likely to go bankrupt by December.

The dice have been rolled.

Rob.

My shorts got sqeezed like Johnny Stampenade.

c3

Ditto...

Have a good weekend. Maybe next we can sell TSO and make some $$$. QQQQ was good to me today.

an overall good day for VLO and the refiners. I still think VLO is the best of the bunch given it's valuation and the fact that it's still making nice profits. but that's like taking Bush Senior over Bush Junior...because he's the best of the bunch!

OOOPS [again]:next week we can sell

nemo - They don't own everything yet, we can be certain of our inability to overestimate the desire to maintain control. I extend a BIG WET KISS for Kaimu and his Ray-O-Vac.

If it wasn't for today's rally the DOW would have actually ended the week flat. It's amazing how volatility can go down this week when it seems like it should have went up.

Monday Down
Tuesday Up
Wednesday Up
Thursday Down
Friday Up.

That looks pretty volatile to me.

Rob.

Pookster,

The central banks are the financial systems. Now, realizing that the US central bank is in it's 3rd iteration, why did they previously fail? Does technology and the integration of the financial system allow a more sophisticated and coordinated effort by the central banking institutions? Even if Trichet, for example, rails against inflation worries, is that concern at some point trumped by overall systemic concerns. Again, if Uncle Ben believed you couldn't let BSC go down for systemic reasons, may it be unsaid that the world can't let the $ down for similar reasons?

Sharkster, I can't believe you know about lana T's boyfriend. I thought only geezers like me knew about him.

I'm hoping skf drops below 100, that's when I'll start easing in.

DavidV -
I have been wondering the same thing re: SLW and it's cost relationships.
If they give an actual answer I for one would leave to here it summarized here.
Thanks

ALOHA !!

Lets take this one step further ... "Then there is FNM and FRE ... debt laden securities that now hardly even pay a dividend(5 cents)! What will the foreigners and pension funds think about that? Is that good for the US Peso?"

The foreigners and pension funds just lost 80% of income dividends, from $0.25 down to $0.05USD. Hummmmm? Seems like more US corporations will be signing up for this ... PBGC!

The Pension Benefit Guarantee Corporation is the equivalent to pension plans that the FDIC is to bank deposits. Can the US TAXPAYERS guarantee everyone and everything 25/8?

PBGC link: http://www.pbgc.gov/

Go to the link and you will read hospitals and auto companies that have failed pension plans along with the long suffering airlines. PROMISES WERE MADE and those promises must be kept if those in power want to stay in power. They will preserve their power no matter how much it costs you and I in taxes and lifestyle!

I am often asked what I plan to do when I retire? I always reply, "The US government won't let me retire!" I have no plans to retire, but I do have plans to get old! HA!

ALOHA !!

On the 08-08-08 thing ... I believe Nick Leeson wanted to give his off balance sheet account all the luck in the World and asked his secretary whats a good number? She replied that the number eight is very lucky in China, so he called that account the "88888" account!

Believe it or not weddings have picked up here for me since Asian brides are rushing to get married today due to the lucky "8 thing"!

[Bill Cara note: I don't know about "luck" per se with the 8, which symbolizes wealth, although it is believed to be a lucky number, especially if wealth comes your way. The 3 symbolizes life/health, and is probably closest thing to luck, and the 6 symbolizes harmony, which I guess if you have it you're lucky. My telephone numbers are 3333 and 6333 for a reason. Mostly it's Chinese people who take note, but I also chose them to feel good.

btw, anybody who misses the China Games opening ceremony tonight on NBC (or wherever) would miss one of the most stunning artistic performances in history. If you ever had doubts about the ability of China to perform as well as any country in the world, watch this show.]

Guess I can retire now. :)

ISHARES CDN S&P/TSX 60 IDX F(Toronto: XIU.TO)
Last Trade: 20.04
Trade Time: 4:20PM ET
Change: 15.035 (300.40%)
Prev Close: 5.005
Open: 20.00
Bid: 20.01
Ask: 20.04
1y Target Est: N/A
Day's Range: 19.81 - 20.14
52wk Range: 17.678 - 22.813
Volume: 3,160,108
Avg Vol (3m): 11,504,100
Market Cap: N/A
P/E (ttm): N/A
EPS (ttm): N/A
Div & Yield: N/A (N/A)

2nd,

Right, so the HUI has declined much more than GLD recently. Earlier this week I sold out of DZZ at 30 and will now move gradually into DGP. Still bullish long-term on the PMs.

Let me ask this: what is the reason to own FNM or FRE if the dividend is almost zero?

Growth? Ha!!!

QQQQ -

I've been tracking the money flows data, taken from WSJ website. I noticed that when the Tech sector has a consecutive of 5 positive inflows, the 6th day is in red. As of today, we have 4 consecutive green days. The weekly money flow % changes is at the same level as seen on week of Apr 21. I'm happy to share the chart, but don't really know how to post it.

According to my chart (money flow), OIL/ENG is about to hit a short-term bottom, commodity has changed the direction, while all other sectors near high.

I've never traded FOREX, but what a jump in the US PESO today!

http://tinyurl.com/5kagwj

The ECB's negative market commentary and signal that no rate-raising was in the future caused traders to buy dollars because the US has already "priced in" a lot of bad news.

We're coming up on a long-term resistance line (shown above), and I'm waiting to see how the USD does there before I start looking at precious metals.

On chinese number, 4 is death. You'll noticed that there is never a floor #4 in an elevator in China, or Taiwan. 888 is considered a jack pot in MahJong. 8 sounds similar to treasure, ala gold nuggets in china.

On China, FXI is up, but BIDU is singularly red while 98% of the tech is up. Any theory besides BIDU is ahead of itself as usual?

nemo - Agreed, Your viewpoint coincides with my observations, assuming postulation of your questions corresponds with my interpretation.

Think not of the following as a lecture, think of it as a request on my behalf:

Questions provoke thought, yet are inconclusive. Questions are not argumentative. We must postulate answers to questions in order to extract value and further iterate the thought process.

Place yourself in an imaginary maze where you are searching for some food. You might ask yourself "what's down that isle?" If you don't venture down that isle, you will not conclude the question of where the food is.

IMO, Kaimu can be used as an example of how the thought process normally functions. I am not saying I agree with all of his conclusions, but his expression of conclusions helps others to comprehend his theories, facilitating the thought process.

C3

Overlay goog on Bidu. Except for Bidu's recent earnings, you'll see quite a bit of correlation.

Given the bear market, even though their earnings were good, I would think, until it proves otherwise, the same slowdown that has gotten goog will get bidu.

IMO there will be a bit of a decoupling soon. BIDU keeps grabbing market share.

Seems no one cares about safe haven gold even though Russia has started war with Georgia

"Russian tanks rumbled into the breakaway Georgian republic of South Ossetia today, and volunteer Russian fighters made their way over the border, pushing Moscow closer to a full-blown war against U.S.-backed Georgia over the mountainous sliver of land."

Kaimu, normal? Well, one could argue I'm usually on Gilligan's Isle. Yeah, that's why I try to ask questions. Frankly, Kaimu's depth of analysis is beyond me (too lazy), and I do not question his accuracy. So, I just ask questions.

shark - "Russia invades Georgia!

In related news, Mexico invades California and Arizona, and Canada invades Minnesota!"

I suppose the survivors will be buried on the border of Mexico and Canada?

nemo - Yep, kaimu's unrelenting drive and dogged determination are enviable. I wish I had half his energy and all of his good looks.

Just finished loading the F-150.

The cheerleaders on FETV are declaring the dollar king, gold and commodities are road kill. Guest D.Gartman who's gold calls are like a fish flopping on the dock echoed the expressed sentiment.
"The dollar is extremely oversold and gold is dead"

Did I miss something or did the financial condition of banks brokers and the US government suddenly improve? Did the geopolitical scene suddenly change for the better? In June, we had the propaganda blitz of " the worst is over". Goldilocks is back. In fact, just heard Kudlow mention the term as I write this comment. Kramer now screaming" the bottom is in... buy buy buy... everything... all aboard !!

The current manipulation seems like the last one with a massive dose of steroids.

The Big Casino... hedge funds with huge amounts of leveraged capital jacking the market up and down to fleece investors. desperate to make profits to cover credit losses. One cannot be an investor under these circumstances....traders only should apply.

On the geopolitical front... here's a current US naval report. I think Congress has already authorized a blockade of Iran if they continue their nuclear proliferation..

http://europebusines.blogspot.com/2008/08/massive-us-naval-armada-heads-for-iran.html

Also Russia has entered Georgia...another battle over resources
and American moves in the region. These conditions should push gold lower and the dollar higher,right?

The Fed has just exchanged most of it's capital for junk mortgage bonds, the Congress just gave Fannie and Freddie and open checkbook at the taxpayers expense, raised the debt to $10.5 trillion from the current $9.5 trillion ...up from 4.5 trillion in 2003. Definite reasons for a stronger dollar, right?

Oil and nat gas stocks down 40% in 8 trading days. Many were never valued at even $100 oil. I think Bill says price should be the basis for buying and selling stocks. If an oil company was valued for $100 oil and has dropped 40% in short order... or $60 oil.... is it time to buy? Comments?

I just spoke with an investor relationships representative at Silver Wheaton (SLW) and got an explanation of what their earnings per share (EPS) depends on. In 2008, they expect to sell 13 million oz of silver. In 2009, because of the recently made contracts, they expect to sell 19 million oz and in 2010 they expect to sell 25 million oz (some of the recent contracts will start their delivery in 2009 and some in 2010). They also said that they are looking to make new contracts, which might increase their sales in 2009 and 2010. All of the existing contracts stipulate that silver will be delivered to SLW for not more than $3.90/oz. So if everything goes as planned, SLW should enjoy a greatly increased profit and EPS.

The mining costs do not affect SLW directly. Only if the mining costs rise and silver prices fall, then some mines with which SLW has contracts can reduce their output of silver, and SLW is getting a percentage of that output (so the amount of silver delivered to SLW for $3.90/oz will decrease). However, the representative told me that SLW made contracts with some of the lowest cost producers (and also most experienced mine operators), which should minimize the probability of them having production delays and not delivering silver to SLW as promised.

Let’s not forget that silver will be given to SLW at the bargain price of $3.90/oz for the lifetime of a mine because SLW made an upfront payment to that mine (to finance its operations). As an example, on June 2, 2008, SLW paid $25 million upfront to La Negra mine in Mexico in exchange for estimated 750000 oz of silver annually at $3.90/oz. If silver stays at $15.90/oz, then in this agreement, SLW paid $25 million for the right of receiving 750000*(15.90-3.90) = $9 million annually. They will be making 36% annually on their investment! Sounds like a good business to me. If Bill is right and silver will reach $25 within the next year (say it will average at $20.90 for the next year), then SLW will make 750000*(20.90-3.90) = $12.75 million per year – a return of 50% annually on their investment!

How much of this great profit potential is already included in the current price of SLW? The price of SLW was higher than it is now on April 2006, when silver was trading at $14/oz AND SLW still had its silver sales hedged (they are not hedged now) AND none of the recent very profitable contracts were signed. I suspect that the market will not take these news into account until SLW will actually start getting the new deliveries of silver.

So while the miners have been hit hard recently because of increased mining costs, SLW was hit harder than most, while in fact it should have been flying, because tight credit conditions for the miners imply that they are more willing to sell their forward production to SLW for smaller upfront payments. This fact was also noted in the most recent SLW earnings announcement.

Given the above analysis, I would say that SLW represents right now a great investment overall, and a much better relative investment than an average gold/silver senior mining company.

Does anyone see any pitfalls in my analysis (and conclusion) above?

DavidV

ALOHA !!

Bill ... One of the few times when I wished I had a TV is when the Olympics are on ... Thats life!

CP/nemo ... Who said questions were argumentative? I always say QUESTION AUTHORITY!

ON RUSSIA
So Russia now has a premise like the USA did in Iraq to restart the IRON CURTAIN and the COLD WAR ... Welcome to WW3!

ON US PESO
What as great time to be buying ASX mining shares. Not only are they on 52 week lows but with a USD they are at a 15% discount! There's always a silver lining ...

[Bill Cara note: Is there nothing on youtube? Pls help kaimu. Trust me, this opening ceremony show is the best!]

John Edwards has an affair. Gee, is there any politician we can trust?

[Bill Cara note: I think the point re Edwards is that there was no other candidate in either Party who played the spouse card as much as he did, and now we see this! He made his bed. That is, as I see it, what is not acceptable. It's the same thing as Merrill, Citi, UBS, etc, telling their clients "Trust us!" and then the client discovers they were cheated.]

astral25,

I have an eye on Independent O&G's but have been burned in the last couple of days. I am going to buy them again, but I am going to look for the most conservative entry points I can find--waiting for a real rise in price and volume, confirmed by 10 and 20-day moving average up-turns, and then waiting to buy on the first pullback from that moment. I have lost more than I meant to in the last three months and, unless it's a day trade, I have had all the aggressiveness "knocked" out of me and will wait to see that buyers are back in control and play the pullback. If anyone sees dangers with this strategy, please pass it on! Thanks to all Caraistas, let's watch the olympics. . .

[Bill Cara note: Is there nothing on youtube? Pls help kaimu. Trust me, this opening ceremony show is the best!]

this is what westerners are pointing fingers "Communist totalitarians with a nazi streak" can do!!!

I don't know whether I should feel happy or sad. Too much money spent on this event. I will feel better to use those money on their education, medicare. Most chinese family will bankrupt if family members go to hospital.

I am thinking there must be one reason Chinese is the only empire surviving, if we count Rome, Egypt, and Babyloon? China has survived for thousands of years. There must be a reason. there must be. I believe they can prosper again.

[Bill Cara note: The China Games intro covering 3 minutes on NBC tonight was the best 3 minutes of TV I have ever watched, bar none.]

David- thanks for making the call and posting the information...i (we) appreciate it!

For the people don't understand chinese character, during the performance. Performers illustrate six type chinese character of "Harmony". The character of "Harmony" evolves as time goes by. We are showing the world that Chinese are peaceful people. We have track record for the peace. We are not an aggressive nation.

apollo7,

I believe very few countries have citizens that are "aggressive." Most folks, regardless of country, want a good life and want a better life for their children.

If we could only get our leaders to act in the same way!

http://tinyurl.com/6gsvmv

For Kaimu!

Opening Ceremony at Beijing, Part 1.

kaimu,

I hope not, but you may find yourself retired due to government policies (or lack there of).

I had no intention of ever retiring, but when the rush to globalization in the name of Free Enterprise exported our mfg. jobs my customer base of forty plus left town.

Here in Illinois, in the heart of the rust belt, things are bleak.

I have a list of 55 individuals (including one of my sons) I know by name who have lost jobs, benefits, or gone out of business as I did. Many are working more than one part time job.

The mortgage meltdown has now made it impossible for people to go elsewhere for work. In our upper middle class neighborhood there are nine houses within two to five blocks from me which are for sale — two have been vacant for more than two years (owners moved to new jobs before the crash).

My next door neighbor is a real estate agent who normally sells 30 homes in six months — this year she's sold one.

Now that the major employers are gone so is our tax base and many of the major donors to local charities.

I am fed up with the manipulation from the top and have never felt so helpless to do anything. The Fed is desperate to inflate away the massive debt and IMO has been able to temporarily get foreign CBs to cooperate in a dollar boost. It cannot last.

We're in need of change alright, but I don't see much likelihood of change for the better very soon.
----------
BTW — "Grym" is not for grim as in stern or forbidding, but Swedish as in what my coat of arms would be if I had one — Grym När Inflammarod = Viscious When Riled :-)

I have it as a 3GByte file in English and French if Kaimu is interested :-) While it may take him a year to download it, I agree, best ever, it was amazing.

http://www.youtube.com/watch?v=a1WGZHkHmrM

found a better link. the one above takes some scrolling . . .

speak of gold. I did purchase a large quantity of silver coins from apex. I found out there is a shortage of silver coins.

I keep refresh the screen in order to get a cheaper quote. When silver price dropped to $15.30, I decided to place the order. But they are out of stock. At last, i manager to purchase Canadian maple leaf.

I believe there is very strong support. once the price is low, the buy side kicks in. and the inventory is not that much.

I wrote on July 9th - This past couple of days I've been buying the Cara 100's with buy alerts.

Well I just finished selling them off today for mostly profits. I'm holding onto DOW because of the dividend they pay and don't foresee too much risk on the downside. I then added some TGP and SU stocks. I'm ready for the next leg down and will be watching for the CARA 20. This site is the very first one I open in the morning, so as to read Bill's words of wisdom. Thank you Mr. Cara.

Nice entry timing, RosevilleBill, but I am curious: what signals, today, suggested it was time to sell? On the contrary, it would seem to me that this week's, and especially today's, price actions would suggest there is some more upside here. I may be completely wrong but I am genuinely interested in your reply because I too made some entries around that time and am anxious about spotting the sell signals as I have a nasty propensity to leave profits on the table all the time. :(

I was wondering if the experts here can have a look at the 6 month chart of UNG and look at the volumes. http://finance.yahoo.com/q/bc?s=UNG&t=6m

What does it mean to you? TIA.

straight from colin twiggs' 8/7 entry:

"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."

~ Ludwig von Mises: founder of the Austrian school of economics.

so financials rallied today...who was buying and who was selling? can you imagine the reaction if FRE and FNM had basically prepared us for this 6 months earlier? i think we'd have sold off fast and hard, and now be well on the road to recovery...instead, we're still being dragged around in the mud by paulson and friends...sometimes the best way to quit is cold turkey...

The Olympic opening ceremonies were stunning and were leagues better than previous ceremonies. The imagery was unbelievable and moving. I was surprised that NBC coverage didn't shy away from political commentary. I would have thought GE would have wanted to suck up to the Chinese.

With the financials - the cracks are beginning to show. FRE, FNM, MER are all underperforming and just waiting to roll over.

[Bill Cara note: I have VERY strong feelings about what I watched tonight on NBC (US TV) vs CBC or BBC from Canada and the the UK, which I also watched..

I believe the 3-minute intoduction to their coverage at 7:30pm ET on US TV was the best TV I have ever seen. The parade coverage was also superb--much better by NBC than what I saw on CBC Canada or BBC England.

BUT. The rest of the NBC coverage was garbage.

Apart from the impressive images, which nobody can deny, American commentators just made passing reference to the "stunning" presentation of the opening ceremony, but were totally cowed by the full effect. They were beaten, unable to say much other than to talk about McDonalds hamburgers in NYC. When I heard commentators who must be paid over $10 million a year to do their job stoop that low, I wanted to put my foot through the TV set. All they had to do was SHUT UP and let America watch a never seen before spectacle. But, no, they were not strong enough people to do that. And that, my friends, is why I think America is in deep trouble. Their Talking Heads refuse to accept that other people in this world can do something better.

If these commentators had just shut up, America would have seen what the rest of the world saw, which is that the Chinese are putting on a demonstration that is unrivaled. I'd like to say more, but I don't think Americans would appreciate the honesty.]

Mackinaw,

To start, I'm just a beginner. Cash preservation is my main rule so the trigger finger is real, real quick. I've sold too early a lot of times. But I'm happy to say I'm still hear to talk about it.
I'm retired and I recently transferred my 457 plan out of my retirement plan and into the designated broker so I can manage it myself. We used to be allowed to put the money into cash savings that was tied to the Libor rate and had FDIC insurance. That option was nixed at the first of the year. We could leave our money there (I left a portion), but once money is transferred out there is no going back. I was very unhappy with all the changes that were made to other available plans. As a matter of fact EVERY ONE of the company (CALPERS) plans options have lost money in this past year. So I've gone through the brokers' training videos (reading candlesticks and a whole bunch of other stuff) and I've read Bill's book. I watch Will Rahals site for some insight. He has some very interesting observations. I read ALL of this blog and I do like Barry Ritholz's site. I quit watching the talking heads a couple of years ago. Kudlow makes me want to gag and I can't believe people will watch Cramer for advice. I will watch Bloomberg about 10 to 15 minutes a day sometimes.

I am trying very hard to learn to sell into strength during this bear market. I noticed a headline this evening on Marketwatch. It was suggesting "What should you buy now that commodities are going into the toilet". In my opinion, you should have bought their other stuff a month ago when it was down. HB&B would love for you to buy at these prices. Now that commodities are lower, I am going to be watching these for accumulation. Bill has mentioned XOM getting to 75 or lower. Today XOM gained a little. I almost bought it at 76.5 or there abouts today, but I'm learning patience and even if the other stocks go up a little that may mean XOM may come back a little further. I've taken my profits, so I'm sitting here with cash waiting for the price to come to me. I did add SU at around 49.7? today. Bill has mentioned he didn't think it would go below 45. SU wasn't on the CARA RSI price notice today, but I've been watching this one as Bill has spoken about it. I will try and keep my trades to the upcoming CARA 20. Bill has mentioned UTX. That is one of the stocks I sold with the intention of buying it back if we should experience another drop. If it gets down to 60, which I believe Bill may have suggested, I'll be on it.
I am also trying very hard to learn to scale into the trades rather than buying the whole allocation at one time. I am firmly committed to not allocating over 5% of the trading portfolio to any one stock. Also if I buy a stock and it goes up over 10% within a few days, I'm not hesitating and I'm probably going to take profits.
This market is very crazy now. When we finally bottom out and enter a bull cycle, I plan on buying for a longer term of 2 to 4 years.
I recently bought some GM at 18 recently thinking I was trading this bum for 21 not too long ago and if it didn't go up I would stick around for the dividend. It went to 10 overnight and the dividend went bye bye too. I held unitl it got to 14 and flew out of that one. The market is humbling and would love to have your money.
The market is up now, but HB&B can trade over the weekend. Until the cycle bottoms out, I'll be taking quick profits and possibly only buy off the RSI buy alert that is put out every morning.

Roseville Bill- i am in agreement with your entire post...

2nd - I still have gold, will hold into the close... I also have a small amount of dog-doo in my port which I might just keep as a reminder of how much this whole setup stinks.

I appreciate that reply, RosevilleBill. Thank you.

would you trade in a Ford Explorer for a "Great Wall Hover?"

http://tinyurl.com/5sh9ay

i still remember the classmate who bought one of the first Hondas in 1975...we all thought he was talking about a motorcyle..

RosevilleBill,

Your comments resonate with me. Thank you.

As an aside, I'd like to add an aside provided by G034, a year ago, who is one of the commenters here whom I respect very, very much:

"Gold will bottom when we hear that the run is over. It is not."

I started hearing commentators say that the Gold run is dead today. I do not think the AU bottom is complete yet, but my ears are definitely pricked and I'm getting ready to dollar cost-average.

CP- you'd be surprised how fast they can turn dog s--- into expensive compost bags that get stacked into the luggage compartments of Navigators without a second thought...timing is everything for the ST trader, but fundamentals rule the LT...

BP - "Gold will bottom when we hear that the run is over. It is not."

I don't understand this statement, could you compose a one-liner in the spirit of adding clarity?

2nd - You're absolutely correct re: conversion to compost bags. If nothing else, I have learned that lesson well during this exercise in futility.

CP--

I was trying to convey the following message:

Gold will not fall forever, a great trader named g034 in 200767 advised that watching for public sentiment to give up on gold is a data point, and that, today, I started seeing people publicly stating their abandonment of gold.

I am not trading on this info, but it increases the sensitivity of my antennae.

I meant the year 2007 A.D., not 200767 ;-)

Darned fingers.

2nd - I remember those Honda cars (CVCC?), If I recall, they were made from recycled Chevrolet hoods. I suppose now they'll be made from Explorer and Navigator hoods.

BP - yep, agreed. and thanks for adding clarity. While there may be some additional downside to POG, I'm quite happy with the current entry point as it fits well with my time horizon.

An IRS man once won a bet with a muscle man on who could squeeze more water from a slice of cheese. The IRS man then followed up by squeezing a drop of water from a stone, just to prove his point.

There's something special about old rockers with arthritic hands rocking for today's youth. Gives me a feeling of hope about the future:

http://www.youtube.com/watch?v=_b9rKZ4GTkc

Hoorah to the Chinese. Tonight I don't care about politics, debt, trade deficits, etc.

An A+ job on the opening ceremony. I pray that the U.S. and China can avoid conflict in this century.

[Bill Cara note: That was artistry like we've never seen before. Now let the Games begin. It is the sport I want to see. /B

For all you tin-hat POG followers:

http://www.youtube.com/watch?v=cM6hMx7JNhg

If they have big-screen TV's in hell, Hitler must have watched tonight with envy. All that artistry, emotion, showbiz and precision in service of the glory of the State.

It WAS better than Janet Jackson's Superbowl breast stunt, that's for sure.

I admit I only saw the start and finish, skipped out for some live jazz. I really prefer people in small groups, and get nervous when big crowds start being herded to whatever end.

I agree with Bill that American commentators always "commentate" way too much, instead of just letting the viewer experience the event. With tennis, I just have to turn off the sound to avoid all the extraneous chatter.

For my GDX position, I covered my short call hedges and wrote more puts at lower prices. The multiyear chart shows a lot of support at the 31-32 region, or GDM 900 area, which also appears to be an area just above former multiyear resistance in GDM. For HUI that's around 280. There's a lot of fear in the sector, and indicators as matching or exceeding the oversold levels seen in 2004 and 2005 sell offs, including the HUI:Gold ratio. So, if the gold bull is still alive, I think the downside is limited to another 10-15% in the gold miners, if you are lucky to get those great prices. They are at levels with gold in the 600s. I will probably close some puts on a good bounce to reduce risk.

Not a recommendation, do your own due diligence.

For those interested in uranium, the largest uranium miner CCJ is sitting on a very strong 2-year support level, from which it has bounced several times and which was never broken. Its last trade was at $32.66, and the 2-year high was $55 in June 2007.

I am not buying CCJ now because in their May Q1 earnings release they said that their average realized uranium price was higher than for Q1 2007. On August 14 they will report Q2 2008 results, and their average realized uranium price will be much lower than Q2 2007. I am not sure how the market will take that news. So you might want to hold off on buying CCJ until after the earnings announcement. Or you can buy it now if you believe in technical analysis and support levels.

The uranium spot price started turning up recently. Maybe its best to wait for several more weeks to make sure that trend continues before buying into uranium stocks...

DavidV

Going to War over Georgia? Not much being said here but perhaps the question deserves more of our attention.

Why? The Miami-Herald has an excellent article that should be read by all. The salient points are:
**Georgia is an ally of the US (ie GWB) and has the third largest (after the US and Britain) troop force in Iraq. Georgia is reported to have asked the US to return those troops back to Georgia which will probably hurt US efforts in Iraq, but Georgia has been devastated by bombs and tanks from Russia, and needs those troops back, pronto..
More importantly to the US and Europe, possibly, is the fact that Georgia has a major US backed oil pipeline to Europe which bypasses Russia and which provides over a million barrels of crude per day to the West from the World’s 3rd largest oil reserves. Can you say higher gasoline prices and Russian control of critical fuel supplies to the West?
The Miami-Herald reports: “Deputy Secretary of State John Negroponte called on Russia to declare an immediate ceasefire, withdraw all combat trops from Georgia and return to the status quo. "These attacks mark a dangerous and disproportionate escalation of tension, ....."

http://tinyurl.com/5wbfbs

Let the media claim that the World has the “Spirit of the Olympics”, but its just another media delusion. This was prefect timing and cover for Russia’s invasion of Georgia.

colin twiggs: "Dollar Rally"

http://tinyurl.com/54qccl

"Spot gold fell in sympathy, testing support at $850/ounce. The risk of a primary down-trend is now high."

i've started to read twiggs' commentary with a grain of salt-> he tends to use wording that gets you thinking in one direction, only to see things move the opposite way-> then he chimes in with wording that changes your thinking, only to see things turn around again...maybe that's the name of the game with charts...

Whoa! Bill created the Saturday market recap without a single word of wisdom...I feel empty.

RE: CCJ
I do not think it is recession/depression proof any more than SNDK. Just look at CCJ's price performance during the 2002-2003 recession. Just my worthless opinion, so do your own DD.

Olympics - Hats off to the Chinese for the spectacular opening ceremony, as I was quite impressed also.

I still question the motives of the Chinese government and continue supporting a progression of the peoples struggle to gain control over their destinity.

Faber Says Global Economy in Recession; `Long' on Dollar

Bloomberg Video
http://tinyurl.com/6qy47q

re the dollar and gold-> recent mention that gold and the USD may start moving in the same direction...does anyone recall when bill brought that up?

2nd_ave,

How sage was Vad's and my advice against SWC?

Also, for anyone interested, BMD Birch Mountain looks like it's getting ready to go up. However, since it is a penny stock now, you gotta be real careful. Theres a tendency to want to buy 40,000 shares because you can, but each penny's move is an enormous amount of money. Get rich or die trying. I am still pissed that I didn't buy the Fannie Mae yesterday morning, ride it for ten minutes and dump it like yesterdays garbage. Could'a make a quick thou. Weather here's great today, but I got nothin' to do.

Nemo,

Same here on the missing commentary, so I went back and reread this from Bill's statement yesterday for about the 6th time.

"For now, I expect the weakness of the gold price will continue as long as the $USD stays strong. After a cycle bottom has been reached, I will be moving into gold, with the proviso that I believe that the gold-$USD link will later uncouple. I think both will start to rise for the long-term, my reason being that traders will stop worrying about inflation and will start to worry about deflation, demand destruction, and negative ‘real’ interest rates."

This is more than a mouthful. Reading the statement sounds so simple, but when you really read it, Oh boy what a wealth of knowledge. I hope it doesn't take me more than a couple of weeks to fill in the blanks to understand everything that was said.

[Bill Cara note:

Sorry, but that's how my mind works. I'm always linking the dots as I observe the data...testing reasonableness, consistency, and all that. Sometimes when I write stuff, I am not thinking about writing, but about thinking, and the words just flow onto the page. Often, I'll look back and say to myself, 'Did I write that?" I truly cannot remember. This is just free association thinking and writing it up in real time. It works for me because I'm not here to build or sell anything, so I don't need a structured framework. The Daily Report and Week In Review are structured for your benefit, not mine. Occasionally, especially when I get tired or bored, which is usually near the end of the WIR, I let my mind really wander, and the result is often goofy. Sometimes, when I am really not thinking of the market, I start off that way. Remember the Starship Enterprise stuff? I was thinking of travel. Couldn't get it out of my mind, so in writing the WIR, I just went with it, and tried to pull things back together later. If I'm tired before I start the WIR, I will usually go to the Value Line Dow 30 reports and force myself to focus. Getting back to the quoted text here, I think that should not be difficult to follow. I think the $USD will continue to rally for the long-term (although it may pull back at any time, especially since it had an unsustainable monster rally this past week), but that shouldn't necessarily be a bad thing for the price of gold. What will change over the next couple years is that deflation worries will replace the current concern over inflation. The precedent for deflation and higher gold is the 1930's Great Depression in the US. Wealth destruction caused by the bursting of the credit bubble is deflationary, and I think that will get pretty serious. For instance there are advertisements in the Toronto Star today that offer, for instance, to sell a new Mazda Sedona for $9750 off $29745 list price; a Ford F-150 Supercab for $9434 off $36099 list; $11,750 off a Dodge Ram Supercab; and a GM Chevy Uplander for $9,392 off the $24390 list. This is DEFLATION in block letters. The market value of your used cars are sinking faster than that of your home. Retailers are going out of business, left, right and center. I think North America has moved into a deflation environment, and the prices of commodities will come down for a while. Then, when the costs of production and staying in business of the precious metal miners rises above the market prices of their product, some will be forced to shut down. Wall St analysts who permitted these companies to increase the amounts of their in-situ reserves while metal prices were soaring (as the company cut-off grades in resource calculations was reduced), will now force these companies to raise the cut-off grades, which will reduce the resource totals. If the company won't agree, then the analysts will just cut the average PE ratio, and the share price will fall. This is a process that is underway as the economy slows or shrinks. You will soon be reading about Deflation, and that will scare the gold bugs, for a while. But the demand will grow as the price falls, as happens to most products. So, I am just waiting to get back into gold. And when the interest rates start to rise as the economy picks up steam, and banks need to raise more capital to replace their lost reserves from the write-offs still to come, I don't think the gold price trend will reverse, like it didn't in the 1930's.]

shark- sage-estic advice, man...

BMD- not interested in buying 40,000 shares at a quarter each and selling them at Davenport's 2007 target of 8? you could walk away with a new haircut, shades, and a cool mil on your way to the islands...

..not to mention bragging rights for out-trading hillary clinton...

nemo - Wouldn't that be keen if Bill was in a rush this morning because he's busy working on his pickup truck to get it back on the road?

There's a major oil pipeline running through Georgia, and the Russian oligarchs would love to have access to their favorite resort retreat on the beach. Wonder what the impact to oil prices might be if the Georgian leg suddenly began to malfunction. Also pondering on how long Americans will wait before needing to re-fill their SUV's and fire up their home heating systems. There's a huge potential for some major drama.

Not to mention Syria's interests in Lebanon, the possibility of Hezbela retaliating against Israel for an attack on Iran, or even the implications stemming from the impeachment of Musharref.

If Russia attacked Turkey from the rear, do you think Greace might help?

I don't know if I should be sitting on the edge of my seat, or sitting back in my La-Z-Boy holding my head in disbelief.

note bill's reply above to RosevilleBill's 1108am post..." So, I am just waiting to get back into gold." that tells me we're borrowing rather than holding the miners we bought on friday-> don't forget to sell on strength...

Thanks Bill:

Not a guru-the guy works in Chang-Zen for cryin' out loud!!! He channels this stuff!!

Pookster: There may be young children reading this blog, and I'm not talking about your mental state!!

All wars are about money and power. Putin had his first victory against the US when Ukraine decided against the missile shield. He is slowly tightening the noose around Europe's energy supply. I would also think high energy prices are a way to knock the US back, seeing as the US Imperial Military is the largest user of petroleum in the world, and the higher energy prices are, the larger the US account deficit. He doesn't have to fight the US military, just continue to financially weaken the country.

For all you Cramer bashers:

Is the guy over the top-yeah. I have a tough time watching him because he causes me stress. However, he either performed at his hedge fund or he didn't. I'm sure one of the sleuths here could verify that. Thi is a bottom line business.

Frankly, many of the stocks he cites, perform well. I just don't prefer his method of buying down because I don't have the bankroll. Bill's method works much better for me.

Let me point out one thing which Bill addressed specifically today (and I'm sure previously) the deflationary effect to come from the downward economic spiral from the real estate debacle.

Cramer in his famous "They know nothing!" rant also stated that deflation was the issue, not inflation. Of course, that was last year, and we've faced inflation in this intervening time, but perhaps he saw what Bill sees. So, was he right or wrong?

My only point in this: We have subjective biases against sources and personalities that perhaps blind us to information which can help us in our decision making.

There is an old Taoist saying, "The bad man is the lesson of the good man."

vinod- in case you're wondering about the above, keep in mind nothing goes up or down in a straight line: my take is that buying SLW/GG yesterday at 1-year/8 month lows (respectively) puts you in a good spot to start trading the sector...based on what i read from bill and twiggs this morning, gold could well drop to 770, but i don't think it's going to happen monday morning...the other point to keep in mind is mean reversion-> the XAU:GLD ratio will eventually return to the average, so i would expect the miners to correct less/move up even if/as gold continues to correct...

2nd - Concerning minors, we might also want to consider the impact take-overs might have. Bring on the right side of that trade would no doubt be beneficial, no?

I'm a little confused by Bill's feeling that commodities have more downside, then the switch to minors operating costs having negative impact.

Extracting from his shorthand further, it sounds to me like commodities are falling into a trough, where the upside could become abrubt.

Bill, thanks for the additional commentary about yesterdays statement. That really cleared away the cobwebs. Enjoy the Olympics.

nemo - Well put, I applaud your observation. I think a big problem I'm dealing with is first, determining which direction the market is headed and for how long, then which equities stand to benefit and which are plain ol garbage that will do nothing but continue on a downward slide.

I believe I'm getting a handle on the last part now. A look into the rearview mirror seems more revealing now, than any of my previous glances in terms of spotting quality.

Bill,
I for one would appreciate to hear some honesty. I've felt since the 70's, the American public have been dealt a great injustice by the US media's whitewashing of everything.

Pookster:

The media's job is to sell advertising, not tell the truth.

2nd
I do understand your view about SLW/GG/SS
Friday after work we went for drink.
And learn from other trader that $ is going to move higher
Oil may go down more
Gold will be lower
And Bill’s comment today about deflation—same thing they talk about deflation may be coming.
Housing is not going to improve unless 30 year fix rate is lot lower and affordable
Or price of house decline more than 20% from now
Or people’s pay goes up lot and they can afford to buy house again which is unlikely
So, they do not see any solution about housing but time may take care of it

I try to put it in word what they talk about; problem is I do not have good writing skill in language

2nd
friday my oex bet did not work out so, I got out out and lost 700
also 100 SKF I still have it cost is 121
do not have anything else but above mention miners
thursday was very good up 5k

vinod- i get the picture...take a look at UUP..

housing outlook is common sense-> people need to go home and sleep off the party, which may take a few years...i don't see housing prices going up much for a long time (whether they continue to fall is debatable)..

nemo
Main street media report bad or unusual thing not good thing because there is lot more good stuff and hard to report all good stuff. So they report only report bad news like robbery/killing/rape etc
While in Wall Street there too many bad things and very little good stuff. And it is hard to report all the bad stuff so; they report only good stuff and leave bad stuff aside

vinod - Your command of English is mush better than you give yourself credit for, the ideas are much clearer than a large percentage here. I rate your ability to communicate an A+.

MUCH, not mush. My fat fingers.

media - I want to hear honesty without predjudice. I want to hear both sides so I can make educated decisions. Bad news travels fast and makes more money perhaps, but I also listen and read "unbiased" newscasts from non-profits and have become increasingly concerned with global events. The US media only glosses over these events, if they are even mentioned.

When 60 minutes incessantly replays documentaries about the plight of urban cats chock-full of automotive and drug commercials, while major political events are unfolding throughout the rest of the world and those around me simply shrug their shoulders, my red flags pop out.

How can I begin to give a hoot if no one in my midst seems interested enough to join in with the chant?

It appears everything is just rosey and we'll continue to prosper following this commercial break.

"If these commentators had just shut up, America would have seen what the rest of the world saw, which is that the Chinese are putting on a demonstration that is unrivaled. I'd like to say more, but I don't think Americans would appreciate the honesty.]" - Bill.

Well Mr. Bill, this American will appreciate all you have to say and more. Our hubris and self righteousness is a fatal flaw and the sooner we take our rightful place as below average is when we will understand how much harder we need to work. Right now we are fat and lazy and living off the fat of our fathers and grandfathers who did what was required of a great nation.

The first thing we need to do is to re-adopt the capitalism of our forebears as it was their savings, capital and sacrifice that made all we acheived possible. The Chinese clearly are better capitalists at this point than we are, and they know it. The danger is that we do not. We better get with it quickly.

Thank you for your honest commentary, wanted or not. The truth is tough sometimes. If we can't handle the truth there isn't much hope and we are far weaker and more pathetic than we imagine.

Please give us the unabashed truth. It is not a disservice, quite the contrary.

[Bill Cara note:

I am a strong believer in America. Along with London, New York is my favorite city. But Americans always underestimate the enemy and they forgive too easily. They also have too much confidence in their political leaders and their media, which are both beholden to hidden vested interests. They need to understand who those people are and how they continually exploit the public. To begin to solve their problems, their capital markets must be made independent of their financial/credit system, and their people must be taught how to trade prices when trading and to make prudent decisions when investing. That's the only way the people can become self-reliant, economically free, which they must do. They must also see the benefits of working with others in their families and communities, in harmony and with long-term goals and objectives.

Here is an article to read, sent to me by the Nassau Institute, which occasionally reprints articles worthy of my time. It's about economic freedom, for which the score for the USA is too high I believe. To get a higher score, American business and labor needs to take precedence over government. Unlike Hong Kong and Singapore, US government and politics are in the face of Americans every day. Government transfers wealth or they destroy it whereas business and labor creates it. Too many people have lost sight of that in America. It's not too late to change.
http://tinyurl.com/6mbkxf ]

shark- re BMD...so the company estimates the NPV of just one of its projects to exceed $1b:

http://tinyurl.com/38lm83

..and that was back when the price of oil was closer to 60..

what exactly is the problem with this company-> they are sitting on assets undeniably sought after by oil sands projects, and they are situated right in the center of the action...but they can't raise any money, and they can't find a buyer for the company...the market cap is down to $24m...

once in a while it makes sense to throw a chip on the snake's eyes, where the odds are 30:1...

"The Chinese clearly are better capitalists at this point than we are,"

Last time I heard a similar line was in the eighties, I'm not sure much has changed, but I believe there will be another adaptive/creative moment in our history to correct the current shortcomings.

....and all the Chinese presented to us last night was a "show", I'll withhold further judgment until I see how the newest Capitalists handle an economic crisis.

Repeating my request:

I was wondering if the experts here can have a look at the 6 month chart of UNG and look at the volumes. http://finance.yahoo.com/q/bc?s=UNG&t=6m

Look at the rising volume in the late down trend. What does it mean to you? Does this indicate that the price rose due to speculation and people rushed to get out?

Every single analyst on TV was saying lately how NG was undervalued and they it would go much higher, to $20/cf or so. Whether they are intentional lies or just ignorance, I have learned to disregard *everything* they say. NG will go up in the winter again with the occasional external event (wars, oil spikes, hurricanes).

NG may drop further, but it won't go to zero. Late Friday I got out of most of my short NGs, I am now looking at reentering in the next few days/weeks to go long. I use NG instead of money markets to park large amounts of cash, consistently making 10% every 3-6 months by simply averaging down if it goes the wrong way, eventually it comes back. Simple strategy with HND.to and HNU.to, but please do your DD.

Here's an interesting article from Casey Research Ed Steer
on intervention and manipulation in the metals markets
He is a GATA associate.

From Ed Steer:
In my commentary yesterday, I mentioned that I was less than thrilled with the sell-off in the early Friday morning markets in the Far East, as this sort of price action to the downside was virtually unheard of during those trading hours. As it turns out, it wasn't a good omen.

The selling started in earnest at 3:00 a.m. NY time on the Globex after Sydney closed and Hong Kong was the only market open. The bottom came at just over $850 in New York trading...which is a retest of the May/08 low. Will it hold? We'll find out next week.

Silver suffered a worse fate. The price broke through all support on Friday, as stops were tripped and margin calls went out and long positions liquidated. If you're a technician, the next level of support is around $13.75...however, technical analysis means squat in a managed market like silver and gold. Will the current price hold? Once again, we'll find out next week.

On Thursday, gold o.i fell a stunning 26,573 contracts as the liquidation continued. And silver, for the fourth day in a row, showed a rise in open interest of 1,592 contracts.

There are no shades of grey here. What's happening is that the '8 or less' traders...the bullion banks...are covering shorts, while the tech funds are pitching their longs...but they (the tech funds) are not going short. There were no signs of that whatsoever in the latest COT report...even though the o.i. in silver has risen the first four days of this past week. Something does not compute!

In gold, for positions held at the end of trading on August 5th, the tech funds in the Non-Commercial category decreased their long position by 19,757 and also covered 1,166 shorts, for a net decrease in long position of 18,591 contracts. On the other side of the ledger, the cartel closed out 12,008 long positions and a whopping 32,762 short positions for a net decrease of 20,756 contracts in their short position.

In silver, the tech funds sold 3,416 longs and 772 short positions for a net decrease in long position of 2,644 contracts...and the boyz went long an additional 2,006 contracts plus covered 2,390 short positions for a net decrease of 4,396 contracts in their short position. The latest COT report is linked here.

Ted Butler said that he was disappointed in this report. He was expecting much better. So was I, but as I've mentioned previously, it wouldn't surprise me in the slightest if the boyz didn't report everything that they should have...and I don't think they did. Silver is a case in point, as the COT shows nothing of the rapidly rising o.i. we've had this week against a back drop of precipitously falling prices.

Without question, there has been massive short covering by the Cartel since the Tuesday cut-off which won't be shown until the next COT report on August 15th. Along with the information that they withheld from this week's report, next Friday's offering should be quite something.

Ted Butler said that the only way that a sell-off like this can occur is if there is collusion amongst the largest traders in the Commercial category. He also said that you should never underestimate these crooks (especially when a bunch of crooks is this smart) when they're in the same room as you...and you should keep your hand on your wallet at all times. Everyone who has watched the precious metals markets for the last number of years, should have caught on to their tactics by now, but obviously some people have a learning disability. There is absolutely nothing free market about what we're witnessing right now...and there's absolutely nothing you can do about it, as the regulators and the mining companies just stand there with their hands in the their pockets while us shareholders get killed.

As I mentioned in my closing remarks yesterday...when the dollar 'rally' ends, then the next leg of the precious metals bull market will commence. I wasn't the only person that was deeply suspicious about this sudden resurgence in the fortunes of the US dollar. James Turk over at goldmoney.com was too. He discovered the reason why the dollar has a new lease on life. It's called 'intervention'. Needless to say, the precious metals were in a major rally at that time...and, of course, had their peak prices on exactly the same day the dollar bottomed...July 15th.

My second story today is from Bloomberg. Normally they never put up any kind of story on gold, but I was up in the wee hours of Friday morning while North America was asleep, and I found this story posted. I'm glad that I grabbed it, because half an hour later it had been taken down from their home page. The story is entitled "Gold, Oil Ratio 'Out of Whack' After Declines: Chart of the Day".

There are no markets anymore...only interventions - Chris Powell, Gold Anti-Trust Action Committee, Inc.

The global political, economic, financial and monetary situation continues to deteriorate by the day. Governments (mostly the US) are trying to prevent the inevitable. With the news out of India and Turkey that physical gold buying has soared on this price decline, I think that gold and silver's days at these price levels are numbered. As the usual New York commentator said yesterday..."Thursday's Comex open interest (decline) of 26,574 contracts (82.65 tonnes) has rarely, if ever, been matched...Clearly highly abnormal and virtually unanalysable forces are abroad in the gold market."

But please don't ever forget the fact that as long as the bullion banks...the '8 or less' traders in the Commercial category...continue to operate as they have been, both gold and silver will continue to have their prices 'managed'. We'll find out on the next price rally if it's "business as usual" for the boyz...or not.

Casey Research's correspondent-at-large Ed Steer is a keen observer of the financial markets and a board member of Gata.org

http://tinyurl.com/5l9thl

Here's a great chart from Elaine Menel Supkis's "Money Matters" blog. It's a St. Louis Fed chart (with commentary) that shows what a messy fiat world we now live in. Volatility doesn't come close to describing what will be happening five years from now.

"Ted Butler said that the only way that a sell-off like this can occur is if there is collusion amongst the largest traders in the Commercial category. He also said that you should never underestimate these crooks (especially when a bunch of crooks is this smart) when they're in the same room as you...and you should keep your hand on your wallet at all times. Everyone who has watched the precious metals markets for the last number of years, should have caught on to their tactics by now, but obviously some people have a learning disability. There is absolutely nothing free market about what we're witnessing right now...and there's absolutely nothing you can do about it, as the regulators and the mining companies just stand there with their hands in the their pockets while us shareholders get killed."

what i love about this blog is we no longer have to read comments like that and give up on 'managed' sectors...this blog is a faster and less expensive way to cure 'learning disabilities,' and i guarantee you won't be standing around with your hands in your pockets when gold sells off...;)

A little help needed: Question for anybody out there interested in SKF
How will the following affect SKF? I assume MER figures into SKF's ability to operate and probably many of the other 18 financial stocks.
-------------------
"The regulatory actions in July to stop shorting of 19 financial stocks, including Merrill Lynch, was well-timed. These stocks have rallied 50 percent off their lows, and more importantly for Merrill, it was able to refinance its losses. Had the SEC not stepped in, packs of illegal short-sellers could have crushed Merrill’s stock, just as they did Bear Stearns."

personally, i think SKF holders should be grateful to the SEC...taking a hit on the position is nothing compared to the possibility (IMO) of losing it all..one reason it's safer to short XLF..

Georgia and Russia Nearing All-Out War

Head line N.Y TIMES

2nd,

I am not talking about throwing around red chips. I'm talking about a sound strategy...It'd be more like splitting aces and doubling down against a dealers 15 when the deck's full of ten-value cards. We'll see how it goes.

By the way I had an awesome dream this afternoon. Trading on a patio of a big white house on a hill overlooking a great lawn with my sister, mother and dead father sitting behind me. Stock I was in, won't name which one, starts rising. I buy a thousand shares, and each dime it rises I buy another thousand shares, total of about 5,000 shares which I then begin to unload. In the dream I made ten thousand bucks in about ten minutes, a huge amount of money for me the way I usually play, small. And the best thing is, it's possible.

What I'm saying about BMD is, DOn't just buy it 3 minutes after the open monday morning and pay too much (unless it starts to really rip). Wait until it retraces some of yesterday's move and turns around showing strength. Or, wait and see see if it can cross the 20 day and rise. Don't lose money on the thing. And I aint talking about an investment here. I'm talking about a TRADE.

shark- making ten thousand in 10 minutes doesn't sound like the kind of trade that would originate with a 'sound strategy,' but let me know if you come up with one...

it's entirely possible, even playing small (in fact, playing small is sometimes the ONLY way you will make that kind of money)...it's happened to me twice, both times in the nineties: buying calls on UBB and HD prior to earnings announcements...you should look into options, my friend...i think vinod made his 5K on thursday with only 1-2K at risk...

shark- if your sister is a fund manager, what's stopping you from getting into the industry? you can't tell me that watching order flow at the trading desk does NOT give you an edge...sometimes you can see the train coming, buy am armload of options, and make your year in 10 minutes...if i were starting out and looking at options for retiring early, working for a brokerage would rank high...

shark- the secrets to making money as a trader:

i would characterize the (crowd) as follows:

(a) they have short memories
(b) they over-react
(c) they're lazy

to make money, all you have to do is:

(e) remember the opposite side of the trade
(f) pounce on fear and greed
(g) just show up

the large brokerage houses are also susceptible to a-c, but they hire people whose sole purposes are to fill the memory gaps and work hard; they don't even need to worry about over-reacting, as they use the intrinsically unemotional strategy of trading only OPM...;)

SUGGESTION -
Rethinking SLW as a CARA favorite after the latest earnings report

SLW-

here's one take on the 'flat' earnings by someone who had no position in SLW as of 7/3:

http://tinyurl.com/6pc8lu

2nd
"to make money, all you have to do is:

(e) remember the opposite side of the trade
(f) pounce on fear and greed
(g) just show up"

I like (f) Pounce on fear and greed

"Government transfers wealth or they destroy it whereas business and labor creates it. Too many people have lost sight of that in America. It's not too late to change."

My undergrad German Professor had an interesting cartoon on his door the caption to which was as follows:

"Communism is where man exploits man, Capitalism is just the opposite."

I agree with you Bill, the score for economic freedom in the US is too high: Slowly but surely the dependence on government is expanding throughout the population. Be it illegal immigration, general welfare, or FNM FRE type welfare. This is how votes are bought. Now, if you've read Tocqueville...well, now you know how deep the rabbit hole goes... Per Kaimu

OUESTION AUTHORITY!! But, remember, they are much more powerful than you.

kaimu

nbcolympics.com

choose day 0 and watch all the videos of the opening ceremonies...you were right Bill, outstanding!

quick note on the olympic videos - install the microsoft silverlight program when prompted - than choose "as seen on TV" to find day 0, with the ceremonies

ALOHA !!

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”
-- Lord Acton

ALOHA !!

My best argument for eliminating the US Federal Reserve is Alan Greenspan himself!

READ ON:
Mr. Greenspan: “Let me suggest to you that the monetary aggregates as we measure them are getting increasingly complex and difficult to integrate into a set of forecasts. The problem that we have is not that money is unimportant, but how we define it. By definition, all prices are indeed the “ratio of an exchange of a good for money.” And what we seek is what that is. Our problem is we used M-1 at one point as the proxy of money, and it turned out to be a very difficult indicator of any financial state. We then went to M-2 and had the similar problem. We have never done M-3 per se because it largely reflects the extent of expansion of the banking industry. And when in effect banks expand, in and of itself, it doesn’t tell you terribly much about what the real money is. So our problem is not that we do not believe in sound money. We do. We very much believe that, if you have a debased currency, that you will have a debased economy. The difficulty is in defining what part of our liquidity structure is truly money. We have had trouble ferreting out proxies for that for a number of years. And the standard we employed is whether it gives us a good forward indicator of the direction of finance and the economy.

Regrettably, none of those which (?) have been able to develop, including MZM – has not done that. That does not mean that we think that money is irrelevant. It means that we think our measures of money have been inadequate. And, as a consequence of that, we, as I have mentioned previously, have downgraded the use of the monetary aggregates for monetary policy purposes, until we are able to find a more stable proxy for what we believe is the underlying money in the economy.”

Representative Ron Paul: “So it’s hard to manage something you can’t define?”

Mr. Greenspan: “It is not possible to manage something you can’t define.”
-- Alan Greenspan, Humphrey-Hawkins testimony, February 17,2000

It's only recently that I left my high-flying career in television commercial production to trade, really only for as long as you've known me. I began working her for interviews/contacts right around the time that subprime was exploding and was interviewed as a "trader", not prop trading just what I'd call the "normal" trading dept of a blue chip firm, doing regular order flow and whatnot. I have to admit I wanted the job pretty badly but didn't get hired. Since then she switched from a big broker dealer to, very recently, a boutique money management joint. I have always done technical analysis for her to her great advantage, you know these fundamentalists don't know a stock chart from a map of the world circa 1400, and I've in no way given up on the idea of using her contacts to one day land the job of my dreams. Timing wise, it's gonna be a little while at least. And every day I get my ass kicked and learn something new is a day I get closer to being able to do this on my own, no job, no boss, no bs. It's a pretty compelling idea. I really feel I'm THIS close to being able to make good $ in even this crappy market, so I may have already had my last "job" on this planet.

Credit default swap failures in the news, another one bites the dust

http://tinyurl.com/5p6us8
Aug. 8 (Bloomberg) -- ACA Capital Holdings Inc., the bond insurer that lost its investment-grade credit ratings in December, terminated $65 billion in credit-default swap contracts and turned over most of the company to creditors.

re Russian-Georgian conflict

I encourage everyone to look at the roots of the problem rather than take media stance for granted. It was really in the 90s when Russians made a key strategic mistake getting involved in ethnic fight in Georgia, taking sides and offering a lot of Ossetians and Abkhasians Russian citizenship. These original wars were quite brutal and bordering on definitions of genocide from all parties involved. Now Russians got right in a clever trap set up by Georgia (with or without foreign help - I have no idea). The live bait for the trap was the life of few hundred fellow citizens (over a thousand reported but time will tell) killed in the massive multiple launch rocket attacks by Georgian forces on non-evacuated city. BTW hardly a civil way to deal with a separatist state but who cares among friends especially if you make a 99% bet on overwhelming response from a blunt Russian military machine that will make original sin quickly forgotten. Classical chess gambit with human life. I am sickened by all involved parties beyond belief.

[Bill Cara note: I have VERY strong feelings about what I watched tonight on NBC (US TV) vs CBC or BBC from Canada and the the UK, which I also watched..

I believe the 3-minute intoduction to their coverage at 7:30pm ET on US TV was the best TV I have ever seen. The parade coverage was also superb--much better by NBC than what I saw on CBC Canada or BBC England.

BUT. The rest of the NBC coverage was garbage.

Apart from the impressive images, which nobody can deny, American commentators just made passing reference to the "stunning" presentation of the opening ceremony, but were totally cowed by the full effect. They were beaten, unable to say much other than to talk about McDonalds hamburgers in NYC. When I heard commentators who must be paid over $10 million a year to do their job stoop that low, I wanted to put my foot through the TV set. All they had to do was SHUT UP and let America watch a never seen before spectacle. But, no, they were not strong enough people to do that. And that, my friends, is why I think America is in deep trouble. Their Talking Heads refuse to accept that other people in this world can do something better.

If these commentators had just shut up, America would have seen what the rest of the world saw, which is that the Chinese are putting on a demonstration that is unrivaled. I'd like to say more, but I don't think Americans would appreciate the honesty.]

Bill,

Having worked on-site in the NBC studios at the International Broadcast Center at three previous Olympics (Sydney, Salt Lake and Athens), I fully appreciate your above comments. Being at the IBC afforded me more than a few up close and off-camera sightings and listenings of those commentators. LAong with all the rest of the crazy goings-on in TV Land. With a few notable exceptions, it was somewhat nauseating.

Imagine being able to watch the raw feed of the Opening Ceremonies of Sydney or Athens (both spectacular in their own right, IMO), hearing only the music and the performance as experienced within the stadium. Not to mention the lack of commercial-breaks. Now, switch over to the Channel 7 Australia coverage, or that of the BBC or the CBC. It's almost the same, with only the most sparse, quiet and insightful commentary - when something of interest needs to be said it is. But for the most part they just let the show roll on.

Now, what's that nagging voice, voices you hear in the backround, piercing the stillness that accompanies your wonderment at the artistry on display? Why, is Katie Couric. And Bob Costas. Rattling off a constant stream of nonsense and drivel because they feel they need to hear themselves (we need to hear them) more than we need to experience what is happening for ourselves. And just when you thought you'd heard enough, there's Bob in the cafeteria the next morning, complaining that he has to pay for his sandwich and soda like the rest of us common folk.

Sometimes it can be embarrasing being an American abroad for those roadshows.

We have Russian pawns distracted with Georgian separatists (NATO members)...

We have Chinese pawns distracted with its own separatists and with Olympic security...

While occam refuses to speculate, both of these situations can be reasonably associated with US and British efforts.

Pakistan is on the verge of ousting its US front man as the US moves toward overt bombing of Pakistani territories...

Afghanistan is slipping through US hands with a resurgence of the Taliban and the US begins to refocus its surge strategy into this arena...

The Feds are arguably running out of moves (socialization of the GSEs while foreign countries and sovereign wealth funds begin to diversify away from US debt bonds )...

Meanwhile the Israelis conveniently finish up IDF-wide Iranian invasion war games and are at a climax of readiness while an impressive armado of NATO vessels descend upon the middle-east to seal off Iranian waters...

And Washington rhetoric from the likes of Bolton, Lieberman and Cheney, Inc. begins to ratchet precipitously.

Maneuvering room on the grand board tightens. The real games are about to begin.

JMHO

First, the Econofundamental 'why'. Be careful what you wish for?

http://tinyurl.com/58af7p

Second, the Chart version

http://tinyurl.com/5zna2c

2nd,

Thanks for the comment and advice.

Now that They have taken speculation out of the equation, I'm sure all will be well.

Riiight.

re: [Bill Cara note: If these commentators had just shut up, America would have seen what the rest of the world saw, which is that the Chinese are putting on a demonstration that is unrivaled. I'd like to say more, but I don't think Americans would appreciate the honesty.]
Bill,
It's, may not be that we don't "appreciate the honesty" — but we've had so little for so long, it's difficult to recognize it :-)

It took me more than 40 years of writing to my "representatives" to finally accept the fact that only a note tied to a rock and bounced off his head would get a message thru.

Caution, if "Bush-beating" offends you, jump to last sentence.

Bill, thanks for putting your position out there. Your vision correlates well with the picture painted in my mind. To my dismay, I found nothing insulting about it. I conclude insult was not directed at the American people or was neatly placed between the lines. Remember, it is the American people who can effect change and perhaps should be insulted. Obviously, US governmental agencies have adopted an diplomatic immunity policy in regard to foreign insult, rendering any attempt futile.

An aside: I hope traders here are correct re: the continued USD RSI vs PM supply/demand curve, I anticipate the Russian mining and oil business in VZ have negligible pertinent vector.

Back to thinking freestyle:

Let's not forget about Sudan, I just finished reviewing the only 60 minutes broadcast from this summer which I deemed worthy of retaining in my collection. From this, I conclude that the ethnic cleansing of Dar-Fore has not been squashed because the Sudanese government has successfully dangled their Osama-bin-Laden carrot to the world. A heavy price to pay for a load of laundry? IMOY

I wonder, does ethnic cleansing have some relationship with karma? (insert Taoist testament here)

Anyway, this summarizes my position on how US tax dollars are squandered thoughtfully, and how military intelligence distills into an oxymoron (CIA inclusive).

For those concerned that this is just another rant of Bush beating, I reiterate here in regard to the achievements made fighting the African AIDs epidemic. You have my permission to take this ball and run with it... it's the only one I can identify for the moment.

Am I incorrect to presume that the Russia/Georgia thing (Savannah WAS such a cute town) will be seized upon as an opportunity to bid oil higher tomorow, airlines and consumer stuff lower? And if it doesn't play out that way, then maybe there's a whole lot more air in the price of oil than we thought?

One more thing: Tax rebates - When I buy a defective product, I do so with the anticipation that I may return it for full refund. I wonder how many US Citizens are considering a new tax policy: No deposit, no return - What would they do, fire us all? Who here deserves to be fired, possibly vote-eligible US citizens? Maybe.

Re: American media and "culture"

I have felt for a very long time that the crucial "wrong turn" for modern America was the decision to commercialize public airwaves, taken back during the 1920's and 1930's. Initially, radio programming was provided simply as incentive for people to buy radio receivers. Once radio was commercialized, television and subsequent media technologies expanded the empire of panderers.

When creation and delivery of media content was surrendered to purely commercial interests the entire republic was channeled toward every greater debauching of public and civic values. Greatest profitability was found in meretricious pandering to the lowest common denominators: sex, greed, ego. Is it any wonder that Amercian culture is now so debauched and narcissistically cauterized? We have become "American drivel delivered by talking heads"!

shark_attack,
I would be very surprised if oil does not rise on Monday. If it does not your reasoning that it would mean oil is set to go much lower would be correct in my opinion. This conflict represents a very real threat of immediate disruption to the flow of oil and gas to Europe. The Russians came very close to bombing the pipeline already it seems. But I do not see the Russians wanting to deliberately do so and allienate the European Union further. The threat of a serious disruption to the flow of oil hangs over Europe's head like a guillotine. Europe and US recent response and actions in Kosovo has set the precedent for many such conflicts to follow. (you could also go back in time and blame the USSR and Tito in Yugoslavia as well for planting the seeds for the Kosovo conflict and many others)The Kosovo conflict and the Western powers very effective use of the media to promote their narrow view propaganda was the precedent that gave Bush the means to use the same techniques for his war on Iraq. Putin is doing exactly the same thing now in Georgia. China cannot be too far behind. Real diplomacy, effective statemanship and inspiring leadership, are now forgotten concepts of History. Sad really, very sad.

johojo - US television is much more effective than state-run television, it is lobbyist run. It is the lobbyists who recognize achievement by leading both government and the people. It is much more successful than perhaps you or I can imagine.

William and Mary - Economic Freedom as a Human Right

I'm a little surprised by the William and Mary study, it seems they believe their research is trend cutting but hope that industry doesn't adopt their techniques in an effort to gain advantage over the investor.

I Wonder what makes them believe they are the research leaders and that HB&B isn't light years ahead of them. Sorry, but that claim just sounds naive to me.

My girlfriend is Canadian Cantonese... she was almost apoplectic at the crappy US commentary during the opening ceremonies. So much so that I had to promise to purchase an un-tainted version on DVD when they come on sale.

In Atlanta '96, the joke in the Olympic village was that NBC stood for "Nuthin But Costas." I guess some things never change.

Gold Market

Last week the $HUI broke down through support at 370 and then on Friday silver broke down through support at 16, yet gold has still not broken down through the 840-850 support zone. In fact most of the commodity charts have had a significant break recently. This sure seems curious to me. Generally, I think of gold as a leader and not a follower so does it really make sense that gold will follow and be the last to break down? Alternatively, is it possible that gold has monetary value and in the current banking/credit crisis there is enough to support the gold price at 850 and prevent a breakdown? To support that idea I observe that in the washout of Aug. 2007 as the subprime news came out both $HUI and silver had a big break below support on the chart however, gold held firm and never broke down. Also, I believe Bill made a recent comment that he believed gold would find support in the 840-850 zone and would not go lower due to the trouble in the financial sector. It could be that as a tin foil hat member I am grasping and stuck on the slippery slope of hope. So I am thinking(hoping) gold will hold support. Any thoughts?

"I wonder, does ethnic cleansing have some relationship with karma? (insert Taoist testament here)"

It violates "non-interference" or "wu wei" Don't interfere with the interests of others unless they interfere with yours.

Having said that, "the sharp spears of the state" is a term used in Taoist literature for the military, specifically in reference to their use as a tool of the powers that be. Ethnic cleansing are a political action of power utilizing generational ethnic hatreds. Frankly, it's just history repeating itself.

There is an important referendum on Evo Morales future today in Bolivia with many implications for the region. The country is deeply divided.

shark - Uplifting 5 book series I heard about last night, scheduled for sequential release:

1) "Finding Your Soulmate"

2) "Miss Right - She's Just Around the Corner"

3) "Don't Worry, Miss Right is Coming Soon"

4) "Don't Bother - She's Not Coming"

5) "Sorry I told you She was Coming" Includes shopping tips - Where to find cheap cigarettes and bulk tissues, Christmas shopping in summer and pamphlet: "Don't Kill Yourself - She's not in Heaven Either (Because There isn't One)"

regarding the Russian/Georgia conflict,
here is some background info to consider the conflict in its proper perspective:

georgians consider themselves ethnically distinct from russians and declared independance in the early 1990's during the break up of the Soviet Union.

Georgia was a major producer of industrial metals but was also a tourist destination for its mountain areas and its coastal regions close to turkey. georgia was supported and recognized by the broader european community when it separated and began steps towards Nato and EU membership.

Abkhazia and South Ossetia are 2 regions in Georgia that consider themselves ethnically distinct from Georgians. Abkhazia is located on the black sea and is a popular vacation destination for russians and georgians. during this period georgian immigration to the region began to outnumber the abkhazian minority and war broke out in the region in which most georgians were expelled leaving the area dominated by a small but heavily armed Abkhazian population.

there was talk that russia provided the arms and logistical support for this coup and continues to this day to maintain their support for the state in order to continue to disrupt georgian attempts to unify their state.

ossetia is split in two, w/ North ossetia in russia and south ossetia in georgia. most ossetians are christian, w/ a muslim minority and consider themselves ethnically distinct from russians and georgians, but have preferred alligience to russia.

during the 1980-90's period in which ossetia struggled for independance many were purged form the region by georgian forces, most fled to north ossetia or were dispersed in other parts of georgia (where many eneded up fighting for abkhazia to feed the independance movement in hopes of rekindling their own)

south ossetia was reconized as an autonomous region of georgia being essentially self governed by the ossetian's and russia. they generally use russian currency and hold russian passports.

a peacekeeping force made up of russians, georgians and ossetian's was set up to keep the peace but failed to stop the region being used as a hot point for smuggling and illicit activity.

it was not surprising that fighting eventually broke out in august of this year as tensions were increasing between a newly aggressive russia, and a hopeful ossetian independance movement who saw georgia's attempts to join NATO as a way to jump ship: Georgia's reaction to the recent hostilities would be observed carefully by NATO states not wishing to invite member states who violently supress independance movements.

w/ russia's heavy incursions into the region and bombing of georgian urban areas, south ossetia is in some ways lost in the shuffle of a broader event unfolding: president medvedev, a recent installaion by putin was seen sparsely on TV, instead it was russia's defacto leader mr. putin who was seen greeting the russian olympic team in bejing before greeting the russian military brass (24 hours later) affirming to the international media that they had the best of intentions.

oddly enough, ossetia has little by way of resources or geo-strategic importance. it is considered a pawn in a broader game being played by the russians, reminisciant of the bygone soviet era of cold-war politics and hostilities.

as much as the price of oil/gas may jump on the idea that major pipelines in georgia may be disrupted due to fighting, my contention is that this will only add to weakness in the Euro as our memories are indeed short: europe is still a battle ground in many regions, and as the EU and NATO expand their membership to fledgling nations, they may be increasingly forced to side with russia's opponents in small-scale conflicts that could threaten the majority supply of gas that russia dangles over western europe. europeans by and large consider their reliance on russia for most of their energy needs as a problem to be solved, not a relationship to be nurtured as alternate routes are being crafted by way of the balkans from central asian pipelines.

(consider that kosovo was granted recognition from the global community at the protest of russia, at at time when albania who was the strongest supporter of kosovo independance was approving contracts for one of the largest gas pipelines in europe to be run through their territorial waters into europe)

Bill, re: economic freedom

The push to globalize has eroded our economic and other freedoms here in the U.S.

As the various job categories were shipped to cheaper labor (One at a time — just as the Nazis sent individual groups to camps) people began to lose their freedom.

The American Jobs Creation Act of 2004 gave tax breaks to corporations, but made no requirements the jobs be created in America.

Without adequate income — mobility is reduced. Now that the housing market has collapsed — those who can't sell — can't move to a new job. Earning less and paying health care bills,etc. — can't afford travel to an interview.

If working a couple of part time jobs with no benefits — can't afford to take time off to look for full time work.

Lower pay makes Wal-Mart the ONLY choice for shopping.

With at least 70% of the US economy dependent on the US consumer — this is a recipe for mass economic starvation (not to mention tax hikes).

Calvin Coolidge was the last true free marketer president.

Grym, Speaking of WAL-MART, do you shop there? I shop two stores, One of these stores is located in an established local economy where the store has existed for a good while. The second store has been in operation for just a couple of years.

That qualification made, I want to note that I have noticed, especially this year, a considerable reduction in variety of products in both of these stores, and was wondering if this had been noted by any others here.

I'm not sure of what this might be an indicator, or my observation is skewed, just my simple observation as I do consider WAL-MART one of my bell-weathers.

paulson- the ultimate cleaner

http://tinyurl.com/5m49dh

"Speaking on NBC's "Meet the Press" in an interview recorded in Beijing, the former Wall Street executive said he would leave office with President Bush in January, despite rumors that both Republican John McCain and Democrat Barack Obama were considering asking him to stay on if they win the election.
"When I came down to Washington, people said, 'How could you want to do something for two-and-a-half years?' ... [But] two-and-a-half years sounds like a long time to me," Paulson said."

when he took the helm in the summer of 2006 the DJIA was at 11000 and threatening to turn over-> he drove it up to 14000, sucked the blood out of the american public, and will leave the index back where he found it...what he's really saying is that when john snow dropped the ball, they brought him in as the anointed (i mean appointed) cleaner, put the pedal to the metal, and saved his friends' asses in record time...truly impressive-> i hope they fly him out to an undisclosed location on an unregistered jet to personally transfer unallocated gold bars to his private collection-> we can disagree with his mandate yet still admiring his performance...well done...

yet still adMIRE his performance..

Grym - 70% of economy dependent upon consumer?

People always say that, but I believe it's actually 70% of the economy is consumpTION, much of which is spending by businesses.

Expenses incurred by businesses are consumption, not investment.

Are there any economists out there who can confirm this?

Why NBC's commentators babble on!

How did Katey and Costas rise above the hordes of aspiring local TV news "personalities"? - better babble!

Babble that draws and holds audience, and brings the big bux from the suits, who themselves get paid for audience.

Quiet those voices, and they'll risk losing audience = next year's bonus! So, they babble on.

Chickenpookie,

What a depressing series of books. I'd rather read something a little more uplifting, such as:

1) Hot Women...Bred for their looks not their smarts; how their feeble minds work and how to fool them.

2) Fistfull of Dollars...Why the way to a woman's heart is through a $5000 dollar Hermes handbag.

3) The Art of the Pickup...Why it's easier meeting hot chicks than dogs and why they're a lot nicer too.

And finally:

4) Living the Dream...Why when it comes to hot women, being an a-hole is a better strategy than being nice.

LOL- we need to email the local stations telling them we prefer the respectful, reserved types...which, personally, i actually do...we could take it a step further and make known if TV commercials were well-written and compelling presentations that deferred to its audience, we wouldn't have to fast forward through them...

shark - You may be on to something, those titles are referring to a soul mate who is more likely to show obedience like that of a dog, or a pig.

rugger09, just want to thank you for posting that "fantastic contraption" site. Quite addicting indeed.

WASHINGTON (Reuters)
"Short trading in 19 major U.S. financial stocks will revert to rules governing other shares on Wednesday as a Securities and Exchange Commission experiment against abusive short selling expires."

question is how the market will react come Wednesday?

Chickenpookie, I have occasionally, mainly because a couple of my friends work there. They both lost their businesses — photographer and graphic artist — and they have both been let go at part time jobs prior to WM. About two months ago the the one who has been there longest told me he had never seen it so slow. (Which makes my other friend worry about being laid off once again.) It may be a good indicator.
The book "Nickel and Dimed," by Barbara Ehrenreich tells what working for them can be like. Not great!

vinod - I would bet the rule will be extended.

shark- come on, man...the stories we really want to hear:

shark tales- growing up by the beach
shark males- Dad and Granddad
shark sails- college
shark pales- a premature loss
shark bails- out of the wrong career
shark fails- early trading
shark nails- hits his stride
shark whales- in the big leagues
shark bales- into 8 figures
shark sales- out at the top
shark tails- back at the beach with wife, kids, and grandkids

vinod/CP- LOL...can't wait to trade the reaction before wednesday, the reaction on wednesday, and the reaction to an extension, NOT...

RH,

Very addictive! I can't get it up through the tube. I'm ready to look at some other's solutions...

Another great post by Bill today.

Ron Paul for president.
Bill Cara for Treasury Secretary.

["But, no, they were not strong enough people to do that. And that, my friends, is why I think America is in deep trouble. Their Talking Heads refuse to accept that other people in this world can do something better.......I'd like to say more, but I don't think Americans would appreciate the honesty." Bill Cara]

I would agree that America is in trouble- irresponsible foreign policy and fiscal policy for starters- but I don't see the connection with a few egotistical, rambling talking heads. American commentators in general talk too much.

Don't know if the analogy quite holds, but isn't that like observing that Canadian hockey must be in trouble because of what I heard Don Cherry broadcast?

[Bill Cara note: Many people do believe that Canadian hockey is in trouble because too many youngsters would like to knock'm, sock'm or whatever it is that Cherry preaches. My point is that Talking Heads are very influential, and Costas/Couric didn't do a good job because they fell into the usual trap of underestimating non-Americans. Maybe I shouldn't have made the point because ardent nationalists of all countries tend to do the same. Maybe I said it because I was so disappointed, having seen other networks do better, that Americans would not be able to take in the full beauty of the event, having to listen to self-indulgant commentary.]

Klingon288 - My interpretation of Bills reference to "Talking Heads" is the US media's meaningless babble, insulating US citizens from the realities of the world. This gives politicians and HB&B too much freedom to do as they please, as the level of public trust and confidence are made artificially high and the HB&B playing field unlevel.

IMO - All a US citizen has to do is examine past performance of the administration and extrapolate into the future. To me, it does not paint a portrait of continuing prosperity.

So yes, I can make the connection with Talking Heads. Without this insulator, US citizens would have caught on and demanded change in direction. If this change were to start with the press, that would be a good thing, but that's not likely, as the press is the puppet of HB&B.

Ok, so maybe I read too much into it...

craig/vinod- re gold/silver

my take-aways from the WIR:

"For $GOLD, the 50d MA is now 914.45, and the 200d MA is 891.62. The current price (864.80) is Bearish. I do think that, for gold and the other precious metals, there will be a testing of the 200d MA resistance, but that will likely fail and the market price will sink to a new cycle low that will set a base for the next Bull phase of the long-term secular Bull in precious metals."

"For $SILVER, the 50d MA is now 17.46, and the 200d MA is 16.83. The current price puts silver in a Bear market. You’ll see the same for gold, platinum, palladium, copper, and the goldminer shares, if you care to look. My prognosis (not that I’m a doctor) is that silver will be like gold and the other precious metals and find a cycle bottom before resuming its secular Bull trend. I can’t guess when that would be. I am like you; we need to watch the data, and then make decisions."

remember- (a) nothing moves in a straight line, and (b) people always over-react...very good chance the next few moves will be the pattern we play best- one step up and two steps back...we were fortunate enough to start the dance two steps back on friday- don't forget to show up, and don't forget to sell on strength...

2nd - You're not trading until Thurs?

CP- i always start my trading day at 445am PST...why?

..if you're referring to the end of the ban on naked short sales in those 19 securities, it won't stop me from trading financials, but i have no interest in trading possible reactions to it as i anticipate no trade-able reaction...

that's an excellent WIR. worth every penny! :)

thanks

Bill,

Your picks have been right on. I'm also proud of the fact that back when the weather was still cold I predicted that as the election neared the rate cutting wouold end, and the dollar would strengthen ending the commodities boom. I'm also proud of the fact that I prognosticated the rise in gold to it's high at just over $1000 and then announced that that was the high for this cycle and that it would not exceed that high for quite awhile. Last week I said gold is going "much" lower, and mentioned a price in the low 7's. And I'm not even a trader-wizard, or a wizard of any kind.

Hey Mike! "See you at $1200"!

2nd - You start your trading day 4:45am because you're an insomniac, I suppose? Or, perhaps you're trading/watching overseas markets. My earliest trades are following the DOW open.

Short rule: I think is safe to assume the rule won't have much effect, especially since I believe it will be extended. Unless you wish to make an outside wager.

No chicken, the dude lives on the west coast.

Oh yea, I forgot about that. But left coast does have advantages as long as you're south of Bereyessa.

Nymex NG futures open up 2.3%, oil futures up 0.9%...

http://tinyurl.com/chcy4

http://tinyurl.com/9hppe

Great WIR, Bill! That must have taken quite an effort. Nowhere else on the web am I seeing such a comprehensive digest of the ebbs and flows in the from markets, day in and day out. Oh, and before I forget, you've mentioned upcoming changes to this discourse - i.e. changes in commenting, etc. IMHO, this is a VERY effective forum structure. I particularly like that you have to read everyone's posts in one long thread. In other forums there are so many different sections you just people posting and their voice is lost in the forest. Consider hard before you fall into the web upgrade hype! There's a reason why you have 300+ comments daily and a lot of it has to do with the community-feeling here in one thread. Personally I wouldn't fragment it all up - and I've hosted forums before, one for 6 years.

Here is ground report

I sold my old house and brought this brand new in April 2004
Developer brought this firm and builds a new street and 14 new home going for 450K to 500K. My home is second from last in closed end street and paid developer 50k to upgrade it

Now I just got called from neighbor that house next to me is taken over by banks and is on short sell (I do not know what that means) by bank on Wednesday

Last house was take over by bank and has closing on 28Th of this month

One other House where a realtor used to own and living there has taken over by banks three week ago

All three house that are taken over by banks were own by people who are business people. They are small business people and employee between 15 to 5 people.
They do not have financial problem not they have problem to make mortgage payment.

I talk to neighbour who is realtor whose hose is taken over by bank and he said he did not pay any down payment and house has lost values over 100k so why to keep it
You can buy same house lot cheaper. He advise me to do the same
I wish if I can but I have put in 50% down

So, lots of people is giving house to bank because its values is down not because of they can not make payment.
And I been hearing same story from friend and relative

I am little mad and upset. Smart people new housing market brought house without down payment if price goes up that’s fine
If prices goes down let the bank have it.
If I have done same what my neighbors are doing I would have save 100k

Why not try and renegotiate with your bank a better rate on the outstanding balance? Or a principal reduction? Aren't there all sorts of government incentives for doing this, these days? You certainly cant walk away with $50K in it nor would you want to, methinks. Give it 10 years and this ship will be righted, don't you think?

Mackinaw
I can not I paid 50% and took 30year fixed at 5.125
I just found out that took 3 year fix and were not paying any morgae for last 6 month
and none of them have any financial problem

vinod- no point in getting upset.,,think of it this way-> anyone who's walking away from a house simply because it's gone down in price is (IMO) embarking on a self-destructive path: they're betting they can eventually buy cheaper (bad bet), and they're taking action that will directly hurt their character...

(a) my bet is they end up paying more in the long run, due to higher rates, higher prices, or (most likely) continuing self-destructive behavior..

(b) once they start down the path of irresponsibility, it's difficult to turn around...and more often than not they end up paying a price much higher than what they think they are saving now (the 'price' one pays is not always measured in dollars, right)...a hit to integrity is usually something one looks back on with regret in later years...

don't concern yourself with what your neighbors are doing...follow your own path, and i can pretty much assure you there will be no regrets...doing the right thing feeds back on itself, and leads to prosperity...doing the wrong thing may also lead to prosperity, but you won't be able to enjoy it...

Sounds right, 2nd_ave. I mean what kind of credit rating can these people have after these shinanigans? It's hard to believe that there is a bank anywhere in the world that would give them a mortgage.

...self-respect, man...how much is that worth?

5.125% 30 year fixed? congratulations...i don't expect to see that again...let's say in 7 years this neighbor is able to buy another house, but rates are 7% and he's competing with buyers with better histories...or what if the subtle loss of self-respect has eaten into his soul and hinders his ability to promote himself at work or in the community? what if it increases the conflict in his household? what if he's less able to influence, guide and control his kids (can he effectively bark at the son for walking away from financial obligations having do so himself)? what if he fights with his wife more often? i'm telling you, a single act that is clearly wrong can change the entire course of your life...

having DONE so himself?

vinod- you're doing great...living and working in the Boston area for a solid company, two good kids (a son who started his own company, a daughter who worries about you), 50% equity in your home...

i would also neither assume that they have no financial problems (it's very hard to tell sometimes), nor that they are 'smart' people (some people are damned good at outward appearances- especially those who use them to hide shaky foundations)...

why not give your wife and kids a hug, put your feet up on the desk, and hope the bank sells these homes to better neighbors? ;)

can't say asia's too impressed with friday's move in the US indexes...

Ossetia- sometimes the biggest conflicts come out of left field (and hopefully not the case here)..headlines on the rally in financials are ebbing in deference to Russia, Iran, and as of this moment, a 10% rise in China's PPI last month: http://tinyurl.com/6zemzo

Vinod,
I would also say you have to consider why you bought your house and that your reasons may be different that your neighbors' reasons.

It sounds to me like you planned on staying there for a long time. Why else put 50% down?

So, if that is true then the marketable value of the home means less than the home itself and the rewards of planting deep roots will pay off much more in the long run than being able to flip up to the next best neighborhood, which it sounds like your neighbors were hoping for.

We moved into our house 10 years ago with a plan to pay off by 2010. We plan on staying here forever and could care less about the marketable value. What means more is the connections we're making in the community and the friendships we're strengthening by making this a long-term home.

By the way, we're on track to pay off in the summer of 2010 and couldn't be happier.

Rob.

Why do you say that, 2nd_ave? All I see is green in Asian Markets, except for the mainland China Market (which doesn't count; I think that one still hasn't resolved the P/E differentials between it and the same companies listed in Honk Kong. Remember the Hang Seng blowoff in OCT when mainland investors were allowed to trade in HK?).
Anyway, If I am reading this market correctly, this is primarily a US (-led?) rally. It's all about the easy money policy. Frankly I don't know why any of those markets are green given their 7%-15% Central Bank rates.

Bill asked me to review and post on this Aurelian shareholder speaking against the Kinross offer on youtube:

http://ca.youtube.com/watch?v=-VPX6b3mnC0

The video is 9 mins, recounts several arguments which have been made (over and over) on agoracom.com then DOES have info I hadn't picked up there.

(It takes forever to read the thread there, and lots of it is small holders venting against Aurelian's board. So, I haven't read all the hundreds of posts on agoracom.com.)

The speaker (who just identifies himself as a retail shareholder) cites dates in Kinross'approach to Aurelian. Early signing of confidentiality, then exclusivity. They begin discussions on a possible JV. Then Aurelian's board issues 2.4 M (if I remember correctly) new options at pre-bid strike price to the key Aurelian people.

Then they jointly meet with the Ecuadorean gov't and soon thereafter announce the "friendly offer".

The speaker on youtube closes asking viewers not to tender their shares.

It's worth watching if you want to understand why shareholders are unhappy with this deal.

What I don't understand, however, is what good all the moaning and groaning will do, and why someone hasn't looked into what the large shareholders are saying.

I don't think Aurelian would have accepted the deal as friendly, if they hadn't canvassed and informally lined up the necessary % of shares to be tendered for approval of the deal.

I hope I'm wrong, because I'm not tendering my shares.

Just to weigh in on the housing business,

It's commendable in a theoretical sense that you did (and were able to) pony up 50 percent of the purchase price of the home. But was it the best use of that money?

The whole idea behind the housing debacle of the '00's was that Greenspan was facilitating lending for less than the true value of money. That's right, free money. The more you borrowed, the more house you bought (and sold in a timely fashion) the more money you made in housing. Let me say that anothe way. You can't borrow money to buy beer, to fund your retirement, or to pay for tickets to Red Sox games. But you could borrow to buy houses. And you could borrow A LOT. The money that was made in housing was made not by ponying up big down payments, it was made by financing the whole potatoe INCLUDING the down payment and flipping the sucker before your rates reset and or the bottom fell out of the market, whichever came first. I personally share your dismay at the behavior of your neighbors and other irresponsible types. A good friend of mine was a California mortgage broker; it's no surprise that while I drive a Corolla to be economical, he cruises around in a Porsche slant-nose with a whale-tail for which he paid cash. YOUR cash.

America has been undone by the far-right wing Ayn Rand-loving Alan Greenspan, a man without the academic credentials to have ever by rights been Fed chairman but with more than enough chutzpuh to have facilitated the next great wave of real estate consolidation by the rich, essentially by busting out the entire asset class while impoverishing millions of unsuspecting (stupid, I don't mind saying it) people.

It doesn't really matter what you did or how much you put down. In real estate you are uniquely vulnerable to the actions of the other players in the market. What really matters most is not what you did but rather WHAT EVERYONE ELSE DID!

Question Authority! (yeah! that feels good..uhhhwhat's this? A Taser in the ass? OHHHHNNNNNNNNOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!)
and i don't mean yoko.

vinod - Also remember that if comparable home values go down in your area, a lower assessed value should lower your property tax. Watch the property tax situation carefully, this might help you make your financial decisions.

Anyway, with 50% down, I wouldn't be too quick to dump, that could be a mistake because the bank gets their money first, and you will loose. It will take at least 7 years or more for that to clear from your credit score.

Don't buy property now. Instead, think about waiting for a cycle low and perhaps buying in on the way up (3-5 yrs?). Meanwhile, go shopping to look, watch your local market to identify hot spots that retain value. These will produce the best return for future investment. You can buy firesale, but check area value very carefully. Good areas don't have firesales.

It is not the pile of sticks that makes value, it is the location of the pile of sticks. Location, location, location. Also, never buy the most expensive home in the area, try for mid-range. Buy mid-range home in good area, not high-range home in bad area. Man who buys most expensive home in area must sell against comparables. There are some exceptions for very expensive, highly desirable properties.

Jock, good summary on Bob's video.

One item I must raise is that Bob has a clear misunderstanding of "The Blue Sky Potential" of the deposit if he is banking on that being the most likely business case for actual mining. Blue Sky is a term used in strategic mine planning that denotes "all the cards falling in your favor and some wild assumptions actually coming to fruition". If he is hoping for a Blue Sky scenario, well, there is always hope.

It will be very interesting to see how this plays out. Bob seems to be a bit miffed at Kinross, saying they are "stealing gold..." or something like that. I say good on Kinross but very dishonest for the Aurelian Board.

I won't be tendering my stocks either, I've already sold them for a tidy profit.

Cheers

An shark is right, but he forgot to mention the income tax right off advantage. Often, people will refinance to take out equity just for the income tax advantage, then take that money to purchase a second property.

You make more profit on real estate if you carry a higher debt load. Tie-up someone else's money whenever possible. The risk appears if you cannot make the payment. In your neighbor's case, he is passing on the risk, but he cannot find financing for at least 7 yrs.

Mackinaw has a point, some banks might forgive a portion of the principal, but if you already have 50% equity, I don't think they will because you are stuck in the deal and they know that. You are married to your house, give her a BIG WET KISS.... and just ride it out.

Posted by 2nd_ave: "re the dollar and gold-> recent mention that gold and the USD may start moving in the same direction...does anyone recall when bill brought that up?"

I have just returned from my weekend trip to Calistoga, so I am somewhat late in joining the weekend discussion. 2nd_ave: I think the above statement is valid when inflationary fears run first and the Fed is trying to catch up to inflation by raising rates one step late. Currently, the traders are selling commodities because they see oil coming down and are fearing the end of global growth/inflation and arrival of deflation. In this environment, dollar will be moving up strongly and precious metals will be moving down. Until, that is, traders realize that the global economy is still growing, maybe at a slightly slower rate.

DavidV

Davidv - Good point, Uncoupling - I still don't understand what will cause POG to increase from here as long as USD is stable or rising. Rising USD should drive POG/oil downward. We should witness a convergence of POO and USD. I also think the bond markets are all screwed up right now, so what do I know...

So, is the #1 US export still scrap paper, or is it recession?

Lotsa red ink in China.

Well, after close review of Bill's WIR, I figured I'd better order Lessons From The Trader Wizard before the Gold Bugs snatch up all remaining copies. If Don Coxe is quick enough, he might get one too!!!

Thank you Bill.

shark - And red eyes in my mirror...

Why are these market moves in Mainland China so extreme over the last 2 sessions (-7%, -8%)? I'ts totally against the grain of what's happening in other markets globally and furthermore the market had already dropped significantly since November? I mean it doesn't really matter to me because it's not really a global market or even the way foreigners invest in China (my long Retirement fund of Chinese stocks had only drawn down max. 23% and actually rose on Friday), I'm just curious. Is the Chinese Government about to open the HK market to the mainlanders again? Or is this somehow Olympics related?

[Bill Cara note:

http://www.bloomberg.com/apps/quote?ticker=SHCOMP:IND

The Shanghai market composite index is capitalization-weighted. The major companies on that exchange are Energy (especially), Utilities, Industrials (and Airlines) and these have been crushed in the past year. For the most part, traders are concerned about +10% inflation and the impact that is having on costs and future earnings. I hope to do more of a weekly study on the China stocks in the future.]

I shouldn't have said it doesn't matter to me. Understanding the mainland markets of China must lead to some understanding of the Chinese economy and that would go a long way to understanding Global economies and, hence, markets.

It's market related. The Chinese market is walking around with an 11 pound shotput in it's undershorts.

Last I heard, though, the inflation numbers in China had come down to about 7.7% credited to the Central Banks aggressive monetary tightening and the removal of the oil/gas subsidies.