On the one-year anniversary of the credit crisis it makes for interesting debate to reflect on how well the situation has been handled by Messrs Ben Bernanke and Hank Paulson. Let’s have some fun and assess the gentlemen’s performance by means of a quick poll.

Here is the link to where you must do the grading: http://www.investmentpostcards.com/2008/08/19/poll-grading-bernanke-paulson/

The results should be interesting.

Buying a little bit of UYG @ $19.12

I might buy LCC or UAUA before the oil inventory.

Good morning.

There are NO Cara 100 Ratings Changes to report at this time.

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

I'm really enjoying your book, Bill. Great stuff.

Have a profitable day, everyone.

re UAUA- if you didn't like it at 15.84 yesterday, would you be interested at this morning's premarket ask of 12.85?

great dicourse this morning Bill,

thx

UAUA- 12.34 for a trade...

Out of UYG @ $19.02

Looks like FRE and FNM are falling fast...

Trying airliner LCC @ $6.75 for a oil play

Cara 100 Update:

GG - Upgraded to Top Pick @ RBC

UAUA- adding at 11.91...

BH - I'm still waiting arrival of my copy and have full intention to throughly examine "Lessons From The Trader Wizard" from cover to cover. It should be arriving this week.

boss - I'm curious, where is the capital from your sale of UYG this morning? Do you have to wait three days for the closing in order to have access?

Maybe I'm loosing some advantage that you are able to exploit, if so, it could help me greatly....

Thanks,

New data out of the OECD today:

OECD Quarterly National Accounts - Second Quarter 2008.

This is the URL:

http://www.oecd.org/document/37/0,3343,en_2649_33715_41156389_1_1_1_1,00.html

If you want a clearer and more meaningful picture of the trends in play, click on the link on that page to download all the data as a PDF.

REG CROWDER

Chickenpookie

If you have a margin account you will have the funds ready to trade with as soon as you sell the stock.

I traded that(UYG) out of my Roth IRA account. I have another account I trade out of also that allows margin and options. I have to wait 3 days on the sale of 1000 shares of UYG, but I keep 90%+ cash in that account for trades. I try not to use more than 10% for a trade so I don't "run out of money", but if I make a bunch of trades- I do run out of money for a day or so...

In digesting Bill's commentary from this morning, I take it that jr miners slight rise from the ashes is only brief. I'm hoping to get more clarification from Bill's book on how interventionists are able to so tightly control the prices of these stocks (and others?).

question for the community: I understand waiting here for a capitulation moment in gold, but how does the base metal miners relate to the timing of gold stocks? If I decide the moment has come to go long gold stocks (majors, juniors etc.) is the analysis for BHP, RIO, RTP, TCK, AAUK the same, or will the timing differ?

DavidV- placing a limit to buy UAUA at 11.59 this morning before hitting the sack last night-> guessing if that thought occurred to you it was immediately followed by the thought it would never happen...

QT/boss - Thanks, I've been avoiding margin accounts b/c I don't want to accidentally fall into a pit of paying a margin and perhaps break an ankle (this perception is purely on my behalf, a self-imposed restriction). I'm one of those "old timers" who stick strictly to a cash transaction mantra.

I'll continue sticking it out, but thanks for your input.

Bill indicates oil inventories may increase resulting in oil coming off more...while at the same time Goldman projects oil will be at 149 by the end of the year. Is Goldman trying to provide support for oil with this call? Do they know the upcoming report might be bearish for oil prices short term? We'll see.

Took Bill's advice and jumped into the gold/silver puddle with positions in ABX GFI GG SIL SLW. This portfolio is up over 7% this morning. (SIL and GFI are not quite sure of what they want to do.. and neither am I :-)
I'm on the first chapter of Bill's book that I received yesterday.

Bill, Since you recently came out of retirement and have more gray hair than I have total hair, I assume we are about the same age. Your views on the Canadian market interventionists parallel mine on the US.

To many of my friends I am a old grouch for my deepening distrust of government data, actions and spin.

While your comments are often discomforting in content they have the ring of truth.

Thanks for your insights.

Great daily report Bill!

Now that I have lived through it, it may be easier to do the right thing next time. ..g..

UAUA- adding at 11.36...

UAUA- total capitulation on the part of buyers at 15+ yesterday...

UAUA- selling a third at 12.24...

LCC's looking good at 7.15, b0ss...

OK, UAUA trade's over at 12.50..

yeah 2nd, I sold out 1500 LCC @ $7.20

I bought 1000 @ $6.75
and 500 @ $6.65

Made up for the $100 loss in UYG.

GOLD:XAU CHARTS

Here's a link to my gold:xau ratio, xau, USD, & oil charts. You may find them to be of some interest.
http://tinyurl.com/6easl7

-MK

schnauser - Great question, there are at least a few here that could answer with greater comprehension than I, but I'll take a stab at it anyway...

My understanding is an actual miners rally would lag a strong gold rally. Beware of false starts and possible further downside.... be prepared to take immediate profit should you decide to enter.

Hopefully, someone in the know will chime in if my understanding is incorrect. I really appreciate when a theory is challenged in this forum, as that is when a learning opportunity develops.

Thankyou for the daily analysis Bill. I hope to be spending a long time learning the methods of yourself and the many pros on here. I thought I was starting to understand the markets but reading the level of discourse here confirms that fact that I've barely scratched the surface.

It certainly is refreshing to read someone who seems to be right almost all the time. Today it happens the be the oil inventory report (from CNNMoney a few minutes ago: "Oil prices fall well off their morning highs after government reports surprising surge in crude supplies") and its knock-on effects for other prices.

[Bill Cara note:

I'll take my bow now and then let's all move on. Yes, we haven't seen so much of an "unexpected" crude oil inventory build for at least a year, which I had figured out for you a week ago, and yes, the gold and silver started to drop after that. But isn't it interesting to see the Talking Heads focus the TV audience on the decline in gasoline inventories while the vested interests got off their positions in oil, gold and silver? Most of these gold stocks have had quite a turn after 10:35am. Agnico-Eagle (AEM) dropped from $55.74 to $53.61 in a matter of 20 minutes. Day traders win again.

Back to the bigger picture, and what I am trying to accomplish here: there are people here who are highly intelligent, perhaps not 'market smart' -- yet. They have been brainwashed into believing that good looking people on TV and mainstream media headline writers are going to tell you the truth, at least not lie to you. Unfortunately, you now see that they'll tell you what somebody pays them to tell you. That's not to criticize these people; everybody likes to get paid. The problem is only with those of us who suffer credulity syndrome or Attention Deficit Disorder. The answers are in the data, and it's up to us to be aware of it. Now that you see so many examples of the chicanery, it's up to you to focus on what's important in markets, which is price and volume. Whether our time horizon is hours or years, we all trade prices.]

b0ss- LOL...sometimes it takes a $700 gain for me to get over a $100 loss too...

Yeah, waited to watch for the USO to begin to drop. Got into UAUA @ 11.82 but chickened out and got out at 12.52

SiO2- nice call on shorting NGas ahead of inventories...

thanx chicken, I definitely think there's more downside, but as bill has said, now is the time to do the thinking, so when the moment comes, you can pull the trigger without much distraction. from a macro perspective I see base metals playing off the EM growth story and gold as playing off the OECD financial crisis, but the last year or so has taught me that this isn't enough to get me through the trade. just trying to pick up the pearls of wisdom as they come out in real time around here. separating the real data from the noise seems to be the novice's greatest challenge.

I was one click away from pulling the trigger on selling UYG/DZZ early this morning, reconsidered Bill's comments regarding the oil inventories, rescanned the general indices, and decided to hold.

thanks, bill...

still holding DZZ / UYG. VIX resuming the downtrend, we'll see if XLF can actually hold above 20 for the rest of the day.

long NVTL at 6.34. RSI 7 day 8. Capitulation.

Stopped out of AEM for 7% gain. Stopped out of BVN for pennies.

Chickenpookie

I hear you.... that is the way I started out. Then I got called to the carpet for "Free Riding" a couple of times. Remember... you don't have to borrow. It is nice to be able to reuse your $$$ right then and now rather than waiting 3 days for it. I would reconsider it. It took me 3 mos to realize that was the way I should have gone from day 1.

2nd

Thanks for the UAUA trade heads up. That was some easy $$$ especially knowing the oil report was going to show a surplus. Lunch is on me!

[Bill Cara note:

It's nice to see a team of strangers come together for the common good. I have always believed that 100,000 sets of eyes will see more than mine. We all need us!]

QT - I'll look into it, I can see how not having access to your own capital is a key disadvantage in a volatile market...

nibbling here at $802 in gold shares.

curious to see how gold behaves right now, if it can hold above $800 on any plunges and the shares can follow through w/ volume and strength
then ill look to be adding more in the $850 + range.

if not, ill wait to see if we settle in at the $760-$790 range.

$805 as i type. this bounce is a key one for gold IMHO to see how things go for the next while...

Chickenpookie

With Scottrade it is just filling out a form and having $25,000 in an account. Give it a shot. You can always switch back. Trust me you will kick yourself in the pants from not doing it earlier.

Early bird catches the knife

For anyone interested there is a an interview with American gymnast Shawn Johnson streaming on Chinese TV here:

http://spag33.com/olympic.html

i'm looking at MELI as a potential long term buy. there is a lot of value in their business and the valuation actually looks somewhat reasonable.

Bill said - "How you and I rid our capital market from the interventionists; now that’s our problem."

The first step in solving a problem lies in identifying and confirming the existence of a problem. The resolution takes place when the level of attained conscience is high enough to overcome the problem.

2nd, congrats on UAUA. Ngas play is tomorrow, although I bought some UNG puts yesterday on that little spike. Bought USO puts and HOD.to and unloaded SLW calls this AM (will buy them back cheaper).

Shorting oil, ngas or going long UAUA seems to all the same trade. Since I can't buy oil puts in registered accounts, will consider UAUA calls next time. Thx.

Re-loaded LNG at $4.15. Any thoughts in the community on the recent rise and fall in this stock?

LNG - westcoaster - There may be some upside from winter demand, or energy in general, but the only direct technical opportunity I can identify might be approval of their permit to export (which as proposed will serve to lower operating costs, strictly).

Otherwise, there's a decreasing demand for LNG as US production is on the rise....

WestCoaster....search archives or just go back week or so, some wiseguys here were on LNG at the spike. Seems related to news of terminal pumping product. Looks too late to enter to me.
Opened 1/2 position in CEDU and BBD today. Tettering about BBG and SD.
Long AUY, GRMN, BWEN QID, SKF (finally green due to lousy entry)
Peace from North Puget Sound

I got hosed on 300 shares of LNG the other day in the high 3's. Like any organism, I seek pleasure and avoid pain.

Lately I've been discovering the hidden danger of messing with stocks that are not heavily heavily traded. At least with a stock that does 20 million shares, there's SOMEBODY to sell to and odds are you're not the dumbest post in the room.

re both NGas and LNG: this Seeking Alpha post is worth reading:

http://tinyurl.com/5b3o47

NGas:
"This is turning into another disaster for natural gas traders, who ran up the price up to $14 just 4 weeks ago from $7 at the beginning of the year and now, 30 days later, it’s back to $7. Of course, as Secretary Paulson will tell you, this is due entirely to fluctuations in supply and demand as speculators play only a very small part in the futures market, but I’m not even sure we’re done going down yet.

The "demand" for natural gas futures at this time of year is based on the "supply" of people who believe there is going to be a hurricane or a war or something to cut off the very plentiful actual supply of natural gas, which we do not import from overseas and is (see Zman’s chart) drifting along at the upper end of the 5-year average storage levels, a little below last year, when we were bursting at the seams with natural gas in the US."

LNG:
"We won’t get into the scam that is LNG here, other than to remind you that this is a scheme to INCREASE imports of energy into the US of one of the only things we have plenty of. The key to the drive to build LNG terminals is that energy companies can store months’ worth of natural gas in the ground, rather than be forced to sell it at market prices as it’s produced. Recent failures to get a plant under construction on the Taunton river in MA were the last straw for traders, and gas prices fell almost 20% from the point the plant was essentially blocked (July 18th). Chesapeake Energy (CHK), who routinely have had to cut back production the past two years to prevent US storage from overflowing, have been in free-fall, dropping from $74 on July 1st to $44.92 yesterday."

Thanks for this on LNG. It was a stink bid that got hit, I'm out with no damage.

Really great intro to the discourse this morning Bill.
If I have learned one thing from the last almost two years of trading and daily reading of your blog it has definitely been that "It’s up to each of us to take responsibility for our own actions in life", specifically as it applies to our capital. I blame no one for my horrendous losses but myself. I am learning though.
Thanks again for being so candid and allowing some of us who are just little fish a glimpse into the real inner workings of the capital markets, without the promotion.

ALOHA !!

Bill ... I offer this as an example of how simple it is to trick the American public into believing economic data. We here at the nursery get this all the time!

Right off the OVERSTOCK.COM website is one of many reviews we get for all our products we sell there. This happens to be for our potted plant product. Many people who buy off the Overstock.com website actually believe that FEDEX shipping is only $2.95.

Overall Rating: Overall Rating 5 out of 5
June 1, 2008
By Anonymous from San Francisco, CA, USA
Very sturdy plant after shipping, but the plant managed to stay very delicate and pretty. The flowers are still in bloom and it's quite easy to take care. It's worth the money, especially $2.95 for a FedEx shipping!

Now, you can look at Overstock.com as the "sell-side", just like MER or BAC or any of HB&B. If it is this easy to convince the public shipping is this cheap then how hard is it to convince the public to buy ABCP? In the case of the US FED it is SUPER EASY to convince even bond and money traders and the likes that actual inflation rates in the USA are at 4%! What other misaligned data is being traded on?

I listened to Paul Van Eeden(on BNN TV)talk about how he went back over 100 years ago to calculate a fair value for gold today and he came up with $760USD and he claimed that price takes into account all inflation adjustments for 100 years. Of course he did not inform us how he came up with his inflation formula or where he got money supply info from, so how do I know how he came up with that number?

My calculations come to $2,200USD as a fair price for gold today. I just gave you as much info as Van Eeden did as to how I came up with my number! Whats the difference? He has a newsletter and is on TV, I guess? I mean ... TVs only have experts on!

Here's my simple calc ... A new home cost $1800 in America back in 1908. Now it costs $240,000USD. That is an increase of 13,300%! Is that speculative froth? Henry Ford was selling a new car in 1908 for $300 now a decent new car built by Ford is $27,000. Thats a 9,000% increase. Is that speculative froth again driving the cost of Ford cars up over the last 100 years? So big ticket items like homes and cars have gone up on average 11,000% since 1908, 100 years ago. Gold was set at $20 per ounce then ...

WOW ... 13,300% ... 11,000% ... 9,000% ... it sounds like Zimbabwe numbers!

The media and Van Eeden would have you believe that gold is now "frothy" at $850USD! That would mean that the POG would have no inflation adjustments built in since 1980. What is the definition of "frothy"? Compared to what? A US Peso at .77? The XAU at 145? MER at $25? Who's data do you base your future on? Take your pick ... there's plenty of experts to choose from on TV!

[Bill Cara note:

I agree with you that Paul Van Eeden is profiled by BNN TV as an expert and the owner/operator of Cranberry Capital. He may have expertise and he may have capital, but he is a paid stock promoter, which the public is not told in terms they have a need to know. Every time he is on TV, the network should be compelled by SEC/CSA regulations to scroll the shares, warrants, options and retainers he has earned or taken from all the public companies that have paid him. I'm not picking on Paul--even I enjoy his patter--but every one of these promoters needs to be treated the same way. If I were running the Ontario Securities Commission, I'd call a hearing on this matter, and I'd usher in regulations that demand full transparency with any guest, whether it be a stock promoter, an analyst or a money manager. Some of these guests are excellent, but the public has a need to hear the whole story. Full stop.]

2nd
Thanks for info about UNG
Sell 300 Shares of UNG
Details Filled at $37.50
Sell to Close Call 5 Contracts of -VLOAF
Details Filled at $6.60

kept TBT

shark- CALM coming back into focus here, down 5-6% today...questions to consider: (a) at what point do the insiders decide they've sold enough, (b) will shorts decide the mid-forties will turn out to be a rare opportunity to cover while they're still standing, and (c) who's first?

Dear 2nd,

I think CALM shorts will find today's action encouraging and will hope for more downside rather than cover here.

Also my NVDA pick from 3 days ago is panning out. It's a piece of analysis I did for a money management firm that I do consulting for.

Can you imagine that? ME doing consulting for a pro firm running billions? I told you guys this business has it's head wedged firmly up it's #$$.

By the way, Kaimu, I didn't quite dig the significance of your Fedex story. I get that true shipping is probably higher than the stated amount above, but what are you saying? OSTK is eating some of the shipping?

Bonds:

Last paragraph of David Rosenberg's column Mauldin's latter from yesterday: "Now, if I'm right on 1.5% nominal GDP growth for next year, all I can tell you is that the last time we had a condition like that was in 1958. All I can tell you is that 1958, the funds rate averaged to 1.5% and the 10-year note averaged 3%. If you're going to ask me if we have a realistic chance of going back and retesting the June 2003 lows and the 10-year note or the March 2008 lows and the 10-year note, I firmly believe that's going to happen. I believe that's going to also provide you with very handsome total returns. "

This seems to read price of bonds heading higher?

Juniors:

Bill Harris was on BNN talking about stocks. Saying something similar as Bill on junior resource co's but from another angle: there is no financing available right now, banks are not lending to other banks, not lending to people, not lending to exploration companies. When this happens, value is destroyed as companies take desperate actions arranging funding -> in-ground resources values is destroyed.

shark- congrats and don't sell yourself short...

Great Barrons interview with Eric Sprott, very worthwhile reading. I agree with Bill that he is a man of integrity and sees the market well.
Calmaine is a minor holding amid a lot of faith in oil and gold, and short HB&B's. Comments on Timminco, and juniors as well

http://tinyurl.com/6gmf3o

Sio2

Sounds good in theory but why then has $rut diverged from cdnx to such a large degree? Must be some reason for this?

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294&cmd=show[s147588006]&disp=P

I'm not, it's just an objective observation.

SiO2- if bond prices retest june 2003 levels, AND one is able to secure a loan at those levels, would spell a great buying opportunity for anyone looking to buy into the depressed real estate environment...

MELI?

101 P/E?

Good for trading unless long term is 5 years.

"Back to the bigger picture, and what I am trying to accomplish here: there are people here who are highly intelligent, perhaps not 'market smart' -- yet."

But then, there are those of us in DENSA to hold up the bottom end...

Anyone know how to set up the TICK - TRIN indicators as shown here

http://tinyurl.com/6bs3xq

on "Stockcharts.com" with a time interval of 1 min or 5 mins? This one in the article is set for 10 mins.

Thanks.

UAUA- re-entry at 11.89...

Good luck 2-nd

News just posted about airlines and job cuts. Real life is catching up with UAUA

nemo - I look forward to the day when I can pass the honor of holding the bottom end off to suiting heirs. My preferential heirs would be HB&B and company. Now, if only I had a comprehensive, foolproof plan...

Pelangio - On a rout today?

2nd,

Here's the bad news on United:

United to stop free meals in coach on overseas flights

United Airlines, struggling to curb losses from fuel prices, will become the first U.S. carrier to stop serving free meals in the coach cabin of some overseas flights.

Instead, the Chicago-based carrier will offer food that can be purchased aboard trips to Europe from Washington's Dulles International Airport starting Oct. 1, spokeswoman Robin Urbanski said Tuesday.

That does it! Next time I go to Europe I'm swimming there like Michael Phelps.

Not having to listen to Bon Jovi? Priceless!

Kaimu and Bill,

I guess the pricing of gold which Paul van Eeden is talking about must be as related to a bench mark of some kind (the USD or the price per oz. at a given time), but as one who has an interest in antiques, I know that no matter what the experts on Antique Road Show give as a value — when you want to sell an item — only the price someone is willing to pay is important.

Wouldn't the same apply to gold, oil, or dollars?

The best thing gold has going for it is history. The era of the dollar: "good as gold" or "sound as a dollar" is ending. Some have begun to be realized this and those holding a bunch are becoming fearful others will realize what they have.

I for one, have been far more willing to pay higher prices for gold and less comfortable owning dollars. I see the history of gold as insurance whatever the "fair value"may be.

P.S.The value of financial information on TV is enhanced by the mute button.

UAUA- out at 12.05...

2nd im freaking disappointed!

2nd leaves the cash on the table!

next time give me more than 30 minutes before you try talking me out of it....;)

UAUA - Press release forgot to mention how UAUA's necessity is to the advantage and well being of their customers.

i didnt try to talk you out of it...my news story was a joke...did you read it?

i was kidding boss...who cares about airline food?

anyway it's time to watch "the sopranos"

I didn't try to talk you out of it either, but I think the oil/airline relationship is beginning to run aground.

Let me know your next entry.

Which reminds me....Bill...we need Cara instant messaging.

We need a lot of things nemo. A LOT of things.

BTW who else here can't stand the sound/look of Bon Jovi? That crap makes my skin crawl.

shark/nemo- joking also...but an IM system sounds good...next time UAUA drops 20% i can wake DavidV up for the party ;)

The New York Times' take on Big Oil losing its touch (or should I say, "grip?")

http://www.nytimes.com/2008/08/19/business/19oil.html?em

REG CROWDER

Dave Van Winkle getting his beauty sleep yo.

Hi All - Noticed TCM:T doing well today - just optioned a nice MoS2 deposit in Colorado. Will have trouble with the "not in my back yard crowd", but they do it right & I expect it may be a mine in ~7-8 yrs. To boot TCM currently carries a nice p/e with other operations. Will put on watch for RSI entry. Happy trading.

Yeah, never been a fan of Bon Jovi, but he's a friend of Bill Belichick. So, as a loyal NE Patriots fan (live 20 minutes from the stadium)I have to cut him some slack

It seems like I did catch the SWC falling knife. :) Once it broke the 2-year support level at $8, I bought it at $9.50, $7.80, $7.40, $7, $6.80 and $6.30. In the past few days, including today, I sold it at $6.80, $7, $7.30. Recently, I noticed that $6.30 or so was the 5-year support level, from which SWC had bounced vigorously a number of times. Now I am thinking whether we can conclude that the downtrend in SWC has turned around, and so instead of continuing to sell the shares I have on the way up, maybe I should hold them instead or even buy more on the next pullback?

Interesting...looks like some of the oil service companies are getting their feet under them. NOV. RIG are the one's I have on my screen.

nemo,

Do you honestly think that Bellichick has any real friends? He's not a "friend" type guy. BTW what ever happened to that cheating scandal?

Bon Jovi - YUCK!!!!!! enuf said.

I'm with you chicken. Just goes to show you if your uncle is a big time record producer (Tony Bongiovi) anything's possible:)

By the way Nemo do yu John Messina of Michaels Messina?

westcoaster - Thanks for the Sprott interview, I feel more comfortable about putting him on my good-guy list now.

closing long ultra XAU today - looking for another pullback then re-enter

DaveB

NEMO - i'd use the forward projections as a guide. while clearly not set in stone, i'm hoping that at $25, which is where it looks like it is heading, it will be trading at roughly 30 times 09 earnings forecasts. i'll start an opening position there i think.

that's reasonably priced to me for a company with as many subscribers and as good a growth trajectory as it has. they have 26.5 million users and it would be priced at about 1.1billion as a whole, chump change to the googles of the world looking to gain a big internet presence in latin america.

BJ for short, and they look the part (grease balls)

MXC - I wish I'd bought in a few months ago when I first started looking, sure woulda beat the pants off what I've done instead...

It's rock that doesn't rock. They're truly rebels witout a clue. Their music is a vapid, hollow imitation of the trappings of rock without any of the actual rock.

In short, Bon Jovi sucks, and you can tell him I said so.

'cause what's he gonna do, kick my ass? i don't think so:)

SII.TO - Sprott down 23% on my chart....

I prefer the sound of two alley cats fighting to the death.... Can't recall the last time I had such a jarring experience, hope my nightmares don't return over this....

Sharkster I was a fan of Jim Messina, don't know the others.

Regarding the cheating scandal. Not much more, that former employee said he never said they recorded the superbowl walkthrough. They got spanked good for what most people figure couldn't have been that productive a maneuver. Having said that, he's the kinda' guy that focuses on all the minutae he can. Doesn't look like they'll be that good this year.

The Halberstam book on him was excellent. That poor guy bought it in a car accident last year.

Posted by 2nd_ave: "next time UAUA drops 20% i can wake DavidV up for the party ;)"

Yes! Why didn't you tell me about it this morning! :) I have actually given up on it in my mind and didn't even check it while I was having breakfast a couple of hrs ago.

Well, I bought UAUA for 2% of my portfolio at $12.30 a little while ago, just to get into this game again. Placing a sell limit order at $13.30.

DaveB- what's the symbol for the ultra XAU?

Team, no doubt meli is growing and it's in Brazil (I think) to boot. It's definitely traded through the ranges, but this bear market will keep the multiples contracted (relatively).

I'd have thought a $5 trillion belly flop would've pushed SKF up to a higher close than $129.... Go figure.

Never thought I would say it, but even belatedly, Cramer was just on with Tyler Madison (?) and called for halting trading on Fannie and Freddie and an investigation by SEC and the Justice Dept. into insider trading....called a spade a spade. Said the lack of enforcement would effect markets for years and would drive mom & pop to munis and bonds and they would see how crooked the game is and stay away from the capital markets. Where have I heard this before?
Only we heard it here a few years ago.....

Count me into the anti-Bon Jovi crowd....not that it matters. I think he is like Broadway show tunes, they play him because he's all there is. I know there has to be a lot more music emminating from the NY/Jersey area, but the powers that be seem satisfied resting on their laurels and old show tunes, which includes BJ's bleck. They push him like "Cats".

Yeah, interesting on SKF. Reminds me of something Kahuna...I mean Kaimu said. Basically he was saying how people are accepting what's going on as normal, where it's really more like the frog slowly getting the heat turned up. The market may be getting desensitized to crises. Having said that, and not knowing enough about the mechanics of SKF, is the market cap of FNM FRE so low as a % of SKF they won't move it that much?

2nd - ultra XAU symbol = PMPIX through ProFunds

Dave

I don't think it's market cap of FRE/FNM moving SKF that's the issue, it's their backing of home loans for HB&B that torpedo's the banks/XLF and will make your SKF do it's thing, sooner or later.

Think about how many loans won't be made and what will happen to home values if there isn't the GSE's to back those loans. It would be political suicide to let them fail, not to mention the devastation of the RE market for years. Of course it could be the same if the taxpayer has to bail them out.....Hmmmmmm, sure an ugly sight, no?

Nemo,

If you don't know John Messina you're not a true denizen of the Boston music scene. He fronted his band Michaels Messina, not a very good band but a very good guy, a very important guy, a guy who, when I think about him, it makes my nose itchy just thinking about:)

ALOHA !!

Shark posted "By the way, Kaimu, I didn't quite dig the significance of your Fedex story. I get that true shipping is probably higher than the stated amount above, but what are you saying? OSTK is eating some of the shipping?"

NO ... ever go to a Kinko's or FedEx and ship just a plain old envelope with one piece of very flat paper in it? You're lucky if it only costs you $10USD! What do you think a big box with a plant in it would cost?

I am saying that the cost of FedEx shipping is embedded in the "partner's"(me) price to Overstock.com. Overstock.com then adds a $2.95 "shipping cost" knowing full well the "partner" has already absorbed 100% of the shipping cost. The $2.95 should really be labeled a Overstock.com "handling fee" and not "shipping"! By mislabeling items the public is fooled into thinking they are getting a bargain, just like the way the US FED/BLS "mislables" the CPI inflation data ... every one thinks they are getting a bargain at only 4% and it is widely misconstrued that the US FED/BLS is doing a good job controlling inflation! In actuality they are doing a lousy job with inflation since they were created in 1913(see my post about 13,300% housing inflation) and blaming it all on the global speculators and XOM greed! Who is the real culprit? It isn't speculators or XOM ... All of us, including XOM, are just trying to cope with a highly inflationary corrupt monetary system that the US FED, along with the duplicitous US Congress, has created.

The Overstok.com story is just a simple example of how mislabeling is used to deceive the public. The US government and the US FED deceive the public every chance they get ... which is 25/8!

Further to Sprott, he's the consummate contrarian, the only thing he's long on is Calmaine (other than gold energy and ags) , a stock that is loaded up with shorts.

Makes you're nose itchy? Aww geez...No sense of smell anymore?

I never said I was a true denizen. I worked the Orpheum, the Wang, the Gaaaaden, Providence Civic Center, the old Schaeffer Stadium, The Commons, Greatwoods, The Opera House. Probably others I just can't remember anymore.

Kaimu,

I now appreciate the significance of your post. Sounds like a raw deal, but we all need beautiful orchids in our lives. Probably the one plant with a more interesting sex life than my own.

Nemo, worked? In what capacity may I ask?

Whatever you do, make sure not to piss off your landlord. It can easily happen to the best of us...

Video -
http://tinyurl.com/yvmbub

Craig - SKF - I'm not giving up just yet, oh no... An interesting thought though, what really is reflected in the price of XLF/SKF? I'm thinking more in terms of perception than reality... Isn't it the traders who determine stock prices and not the actual underlying assets?

HA! I am on Kaimu Time now!

Chasing roaches rather than pigs but one does have to work up to the larger delights of life.

In another few weeks I will be pestering about again. Peace till then gang!

I thought I told you about this: I used to babysit Rock & Roll acts when they came into town. I did bodguard and security work on the side. Rock&Roll was definitely entertaining. Had to help carry a few up to the stage because they were too drunk to walk by themselves.

ALOHA !!

GROUND REPORT
More FedEx info. I just paid my FedEx bill and noticed that the FedEx fuel surcharge increased yet again, from 32.50% a week ago to 34.50% today. A one week increase of 2% on fuel! Wait ... I thought crude went down ... didn't it?

ALOHA !!

Casey ... On Kaimu time? What island are you on or are you in Alaska?

Kaimu, I am in Hawi now for 2 weeks then settling in 5 minutes north of Hilo.

when you need someone to help chase a pig or two give a holler :)

Sharkster, you'll like this story;

1984 I had just returned from Germany. Contacted the guy who ran the Rock&Roll company. He asked me if I wanted to work any acts. I said sure, give me a call. So he calls.

Says theres this Blues trio coming into town playing the Orpheum. I'm to meet them at the Parker House and ride on the bus over to the Orpheum and get them situated.

I ask him who they are. He says, "Stevie Ray Vaughn" I said, "Never heard of him."

So I mosy on in to Boston, do the deed and get them over to the Orpheum. I usually ate from the spread they would set up before the show. I was used to some serious food for some of these acts. What do they have......cold cuts....

Pissa. Anyway, really nice guys, I get them up on stage and then take my appointed place center stage front row with the guy working the aisle.

TALK ABOUT A RELIGIOUS EXPERIENCE!!!!!!!!!

Anyway, needless to say I was a fan.

Funny serendipity...I was working for EDS in the 90's when his funeral procession was driving the other way on the highway down in Texas.

ALOHA !!

So Kamehamehaville ... North Kohala then to the Hamakua Coast ... rainy place Hamakua ... How long are you planning to be "north of Hilo"?

I would venture to guess you will have your own pigs to chase, but if you get "bored"(pun intended)then come by for a "talk story" session! HA!! You at least have to see the volcano in all Pele's glory!

Kaimu: we are permanently moving here: as permanent as a Taoist can be: a year or a century, who knows but I am here now and now might be a very long time indeed.

ALOHA !!

ONE NOW AT A TIME!

See you whenever then! Call me at Kaimu when you're in Kalapana!

I do like your story.

Question on ETFs

I have seen mentioned here that ETFs are reset each day. How does that affect them. For example if I bought QID and held it for a period of several weeks as the Nasdaq drops, does this resetting short change me in any way?

I feel I owe 2nd ave an apology.

I busted down on you for selling UAUA too early this afternoon. While I have trouble understanding WHY you did it since the price never meaningfully re-crossed your buy point, I feel for you, I didn't mean to sound like a heckler and I acknowledge it took balls to buy the stock at all. If I were held to account for every time I got half the trade right, the buy not the sell, the sell not the buy, it'd be a lot of times.

I commend you for taking a shot at it and having the balls to post it in real time. And I apologize for coming off critical. It's a very Bon Jovi thing to do:)

Fellow SRV-lovers and other ne'er do wells, somethings going on in the world of insurance. I look at the charts of companies like ALL and MET and TRV, and I see candidates for potential downward moves. Of course I don't KNOW anything, but I'm watching 'em.

nemo
nemp
Dr Wang used to have bodyguard that must be you
Bill also have done some consulting for Wang way back in 80's

Westcoaster,

I can't get a read on LNG's current chart and don't know anything special about the latest jump-up, so I've stayed away. Wish I could help a little on that one, it was good before, just can't get a picture of the probabilities right now.

Bill: You say
It will not be easy to come up with a solution that protects the public interest, which is a strange statement to make in a democracy, but it’s true. That's because the huge majority of the owners of capital and taxpayers have almost no say in the matter.

Over the years, I professionally work in change, helping mid sized corporations to change, working at both the State level and Federal level also to implement social change. Finally and more importantly,guiding people on a one to one basis through crisis and to transform into what they would like to be. Change is something I know and deal with, so I am not armchair quarterbacking here.

As a professional Taoist: Transformation and Heart are what I work for.

I have learned one fact, from both success and failures: Change only occurs at key times within an individual, corporate, government life cycle. It doesn't make a difference if we are dealing with a person or a larger group culture. The reason being: any culture or society is always a reflection of the people who comprise it.

Human nature trumps out in the end.

So some "truths" I have learned from practical experience.

1) Truth is not enough of reason to change. Truth is relative and as such people always bend truth towards their life "story".

2) Solutions, even the best solution will always fall apart due to internal resistance of the old guard.

3) The only "change" people accept, when not ready for true change: is the change they already "expect"... Anything based on expectation is never what a person needs, since it doesn't represent fundamental change.

4) As a person who helps change, you have to time helping to towards the bottom of a cycle. Any help before the bottom , 99.9% of time just prolongs the older problems.

5) Help those who are open to it. If a person resists, then let them work through their own resistance first, otherwise your help just causes them to fight their own process.

I think your blog does #5. The people coming to here to change are those ready to make a difference in their own life now.

However, it's important not to take the success and to push it outward to those who are not ready. To do so would cause conflict of "interests" . In time let people come here rather than push out a solution.

When I first joined this community, I asked you what idea you had at that moment towards change.

I think the right idea / solution isn't defined yet, instead it will grow out of community in response to the problems facing us. I also think your building a new business with a newer model is also part of the solution, showing others by example how it could be done.

As always I respectfully give you a bow Bill. I appreciate it when seeing mastery of patience being applied towards heart.

Met Dr. Wang's son, never met Dr. Wang.

WEDNESDAY, AUGUST 20, 2008
Looks Like the Summer Rally Is Over
The Market's Mood
By MICHAEL KAHN
Major indexes have moved below respective technical patterns to signal the likely end to the bear-market rally.
WHAT HAPPENED TO THE summer fun? Rather obvious technical patterns formed by the July-August rally have broken to the downside. From my point of view, the summer rally has run its course.

Perhaps everyone is already away on summer vacations and is having a hard time identifying pattern breaks on tiny little iPhone screens. But under the cover of light trading action in mid-August, the market is quietly changing its tone for the worse.

To be sure, anything can happen when volume is so light that the natural buffering effect from a liquid marketplace is not available to cushion news-driven shocks. Wednesday morning's crude-oil inventories report was one such "shock" as stocks initially cheered an increase in crude-oil supplies.

Let's go back to the start of the bear-market rally and its catalyst -- a huge rebound in the financial sector. When banks and brokers soared, the rest of the stock market went with them. Unfortunately, the opposite seems to be in effect this week. Banks, brokers, insurance companies and even real-estate stocks started to falter.

The Financial Select Sector SPDR exchange-traded fund (ticker: XLF) has already erased half of its summer rally. Don't forget that the other half of that rally was achieved in a single day, so a lot of expended trading energy has now been for naught. That is not a positive from a psychological standpoint, either.

Buffett, Gates tour Canadian oil sands operation

20/08/08

CALGARY, Alberta (Reuters) - Warren Buffett and Bill Gates, two of the world's richest men, toured Canadian Natural Resources Ltd's Horizon oil sands project near Fort McMurray, Alberta, this week.

According to local media reports, Gates and Buffett visited the C$9.3 billion ($8.7 billion) project on Monday. Horizon is slated to begin operations later this year.

The men were given details on the Canadian oil industry by the Canadian Association of Petroleum Producers.

"We were asked to come up and do a short presentation," said Greg Stringham, vice-president of markets and fiscal policy at the association.

With reserves of about 173 billion barrels, the oil sands are the largest oil reserves outside the Middle East. The region's producers plan to spend more than C$100 billion developing the resource and output is expected to nearly triple to 2.8 million barrels a day by 2015.

Buffett, the world's richest person, according to Forbes magazine, is chairman of diversified holding company Berkshire Hathaway Inc . Neither he nor Microsoft Corp co-founder Gates could be immediately reached for comment. Canadian Natural Resources refused to add any details to the report.

(Reporting by Scott Haggett; editing by Rob Wilson)

bon jovi? i can honestly say i've never knowingly heard a bon jovi song on the radio, and although i recognize the name, i had to go to wikipedia to read about him...

that the band was formed in 1983 says it all-> i can't think of a single band that came on the scene in the 80s that i follow...plenty from the 60s/70s, and then a long period before grunge became mainstream in the early 90s...

there was one sunday morning drive up hwy 20 from fort bragg (CA) to 101 where the only music station with reception played a long line of stuff i'd never heard before- (remember bands like mazzy star?)...still waiting for rap to fade into history and the next generation of real music to let me buy some new CDs...

nemo
I spend 25 year at Wang
present job is second in my life

nemp
john present CISCO CEO was one of the vp at wang

stevie ray vaughn- that was one act you had to experience live...seemed like every time i walked by hill auditorium (in ann arbor) at dusk and there was the smell of weed wafting from the crowd outside, a great concert was about to begin...

my personal 'religious experience' was pat metheny and lyle mays at hill auditorium in 1981...

Dear Bill,

Your insights to date have been exceptional and we continue to learn more and more every day from you. Thank you very much.

One issue that I hope you would clarify for all of us regards the banking and financial sector.

We all know the end game here and we recognize that we are not yet close in seeing the light at the end of the tunnel.

As far as I am concerned, the obvious play is to buy SKF yet this ETF has been severely hammered and the recent action is baffling. Fannie and Freddie plunge to 18 year lows and SKF declines. Seems that there is strong resistance for this to go higher, yet the deleveraging is far from over.

We also hear that the SEC may reintroduce new shorting rules.

Bottom line is that I see some sort of government intervention to rob the shorts, as has occurred to the gold bugs.

If so, then what is the best alternative to play the downside on the financials, as I am not sure SKF is the answer. I would think that there would be a trade of a generation here but I am not sure.

Your insights as well as all the Caristas would be greatly appreciated.

Thank You.

An investor putting $10,000 into TLT on May 22 (day one for TBT) and $5000 into TBTwould have $14898 at yesterday's close plus two dividends from TLT totaling $73.04. So in this example the net loss was $29 or 0.019% which is pretty good if the position really is hedged and considering that he market went against the position.

One administrative note about TBT is that it too pays a dividend but the dividend should be annual at the end of the year and represent t-bill interest less the expense ratio. If rates do go up, including t-bill rates, then TBT would probably pay much more than it is likely to pay now.

A combo of TLT and TBT where TLT yields 6% and TBT yields 4% and the portfolio is protected from rising rates sounds pretty good to me
Roger Nusbaum

Craig, Chickenpookie,

SKF is reflecting the bank losses which keep showing up as people default on their mortgages beginning with ARMs and now spreading to other types such as Alt-A. Alt-A is also called NINJA (No Income, No Job, No Assets). In some cases people bought property which was falsely appraised to a higher value. Just about anything they could think of was used to pad the commissions of mortgage writers.

Rather than admit how much bad stuff they are holding banks are fessing up as each quarter's new defaults are tallied. (To be fair they probably don't know how much in some cases.)

The latest estimates I've seen say this can go on for at least a year and maybe two more. I've been riding it up and dumping three times since last November. It is truly hectic and the last time I didn't jump ship fast enough, but unless we get government screwing around with it (like the two Fannies) I expect it will reach another high in a few weeks. I sold a part what I still had a week ago and just started buying back in two days ago.
So far the longest time between a trough and a peak has been 85 days and the shortest was 27 days.

vinod- wang labs could have had it all...An Wang doted on his son but failed to prepare him for the role he was to inherit (or perhaps failed to perceive the role as ill-fitting)...leadership is difficult to teach in a classroom (IMO most of us learn it outside the classroom before we graduate from high school, or we learn it by actively throwing ourselves into situations that require it...but you have to have that ability before taking the helm of a company)...

2nd

I can not post all in this public blog but
I personally knew dr.Wang. I was one of first 25 employees.
Later on he spend his life in SF where most of rich and intellectual Chinese lives (my impression)

[Bill Cara note:

In the mid-1970's I was a consultant to Wang Labs in Boston, and frequently travelled there. I have my own impressions of An Wang.]

2nd
I have so much memorable event to mention
When my son graduated from company run kindergarten Dr. Wang came for graduation and presented each kid certification on stage. Unbelievable!!!!
Do any present CEO will do this

DaveB- thanks

PMPIX: 150% the DJ Precious Metals Index

note the high weighting given to ABX, FCX, GG, and NEM:

Barrick Gold Corp. U.S. CA0679011084 Basic Materials Basic Resources 1.00 22.97%
Freeport-McMoRan Copper & Gold
Inc.
U.S. US35671D8570 Basic Materials Basic Resources 1.00 22.27%
Goldcorp Inc. U.S. CA3809564097 Basic Materials Basic Resources 1.00 16.52%
Newmont Mining Corp. U.S. US6516391066 Basic Materials Basic Resources 1.00 11.91%
Agnico-Eagle Mines Ltd. U.S. CA0084741085 Basic Materials Basic Resources 1.00 5.88%
Gold Fields Ltd. ADS U.S. US38059T1060 Basic Materials Basic Resources 0.95 5.18%
AngloGold Ashanti Ltd. ADS U.S. US0351282068 Basic Materials Basic Resources 0.83 4.69%
Lihir Gold Ltd. ADS U.S. US5323491077 Basic Materials Basic Resources 1.00 3.68%
Harmony Gold Mining Co. Ltd.
ADS
U.S. US4132163001 Basic Materials Basic Resources 0.84 2.40%
Randgold Resources Ltd. ADS U.S. US7523443098 Basic Materials Basic Resources 1.00 2.14%

Yeah, saw Metheny on the Commons around '79 '80 right after American Garage came out. A friend of mine plays in a local southern rock bar band called "Southbound," they were the opening act for SRV back in the late 80s (I wasn't there). He has this surreal picture from behind SRV sillouhetted on stage playing "Couldn't stand the Weather" outside in a rainstorm. To the left of him was sunshine, to the right of him were storm clouds.

I'm not sure you can lay the blame at his son's feet. There were many companies who could have had it all. Frankly, it all boiled down to one decision. One little company being run out of an old Victorian house that didn't want to license it's operating system to IBM-and another fairly small company knew exactly what that meant.

bill/vinod- small world indeed...my dad had the opportunity to meet Dr. Wang when (dad) was at MIT in the fifties...(vinod- he and his wife owned a house in the 'hamlet' where my dad lives, but never really 'resided' here- i think they've since sold the house...the REALLY rich chinese all live out your way, man)...

2nd

I have heard you mention several times about these ETFs being reset each day. Do you know how that would affect you if you held an ETF for an extended period of time. For example if you had an ultra short and the market kept going down during the time that you held it, how would the resetting affect the holder of it?

QT- if you search the Cara Archives using "DavidV" and "reset" in the search field, you should find David's comments about the reset (it's easier if you keep in mind that David has breakfast around 3pm ET)...here's one i found from April 28:

[I think ProShares was honest in their description of FXP: "The investment seeks *daily* investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 index." I just did a simple calculation on a spreadsheet, assuming that FXI goes through the sequence of prices 100,90,100,90,100, which gives a sequence of percentage returns -10,11.1,-10,11.1, which implies the sequence of percentage returns 20,-22.2,20,-22.2 for FXP, which makes the absolute FXP values go through the sequence 100,120,93.3,112,87.1. So FXI is back where it was (at 100) after 2 round trips, but FXP started at 100 and went down to 87. After 4 round trips in FXI, FXP would be down to 75.9, and after 8 round trips it would be down to 57. So a risk-free strategy of making money seems to be that of shorting X shares of FXP and 2X shares of FXI. Any comments are welcome on this strategy.

DavidV

Posted by: David [TypeKey Profile Page] at April 28, 2008 7:49 PM]

nemo- true..and to his son's credit, i don't think he was asked about taking the job, he was expected to do so...

2nd

Thanks, I search for it now.

WFMI - Tonight I watched Hilary Cramer beat up on Whole Foods in a manner I've never witnessed before. I've never seen her do that to any stock, don't know what to think about that except I wished she'd said something back in June....

SKF - Ultrashort ETFs don't actually track their respective index at a real rate of 2x, yet they do outperform ETF's tracking index's at 1x ratios. For the most part the banking index was up today, with FRE/FMN being the exception, so I'm not especially upset with today's SKF/UYG performance.

CP- re WFMI...exactly...hate it when people beat up on things when they're down...

Bill,

I would like to thank you first for the excellent blog with tons of helpful information and lessons. Please keep up the good work.

Today NVDA (NVIDIA Corporation) share price up almost 35% after it plunged to a new 52-week low on August 4. After reading the (some negative) articles, I am wondering if it is good short candidate?

I bought three Dell XPS m1330 with Nvidia 8400 last year. Dell replaced the motherboard twice for one of them and once for another laptop due to dead graphics card.

Moreover, last week two of my friends replaced the motherboard due to same problem. What surprised me is that Dell did not even update the BIOS which suppose to fix the problem. Even if Dell has issued a BIOS update to prevent its notebooks from more failures, many are not aware of this.

I was just reading the story of Wang Labs and
I'm sure I open myself to accusations of idiotic reductionism (not the first time) but the whole thing sounds like a train wreck. I'm continually amazed by the long history of companies that tried to make a buck making computing happen and even more amazed by the people who spend their lives in that pursuit. Something about it seems inhuman. I'm sure I just don't get it.

sharkster:

I don't understand the second sentence.

Current premkt for FNM / FRE show them @ yesterday's lows, XLF sitting @ 20

thought S&P500 futures might have made a 2x bottom @ 1265 this morning, but the futures are coming back down now...

broke even on DZZ yesterday @ the close... if today's move holds, gold might have broken the recent downtrend...