I have put together a table of global stock markets' performances over various measurement periods, showing the bear is still in charge.

Here is the link: http://tinyurl.com/5krvnk

article from seeking alpha

Currencies Are Crashing at Record Rates: Disaster or Opportunity?

we have a sharp correction in commodity prices underway, the odds are in favor of the long-term up-trend eventually resuming. Similarly, (or inversely) the U.S. dollar is showing intermediate strength these days, as U.S. consumer confidence hit a five-month high in August, adding to optimism on the greenback. But the odds are good that the current optimism will return to long-term pessimism.

http://tinyurl.com/5zm8pg

james turk weighs in on gold:

http://tinyurl.com/5cscjz

"Gold Money's James Turk says he's seen it all before:
"The present situation reminds me of August 1976, just weeks before the Democratic Convention confirmed Jimmy Carter as that party's presidential candidate. Gold slid down to $100 per ounce even as the inflation and economic outlooks were worsening. Gold looked dirt-cheap back then even though its price had risen three-fold from just a few years before.
"By the end of 1976, gold had climbed 32.3% from its August low. By the end of Carter's presidency four years later, gold climbed more than eight-fold.
"I wonder where gold will be at the end of the next president's first term in office?"

Silver:

Given all the silver being demanded by industry and the screeds of ounces sold in totally unreal transactions, and looking at the stuff actually available, the case for buying is shiningly compelling.

Jason Hommel of silverstockreport.com is a treasure trove of statistics concerning silver, such as the fact that the world "uses up more silver each year (about 850 million ounces) than the world mines (about 600 million ounces)," which seems such an incredible 250 million ounce imbalance

http://tinyurl.com/6ghtyp

Spielberg Nears a Deal with Reliance

The director appears close to signing a lucrative package that would make India's Reliance Communications a 50% owner of his DreamWorks studio

http://tinyurl.com/5ldawd

Overshooting

Present optimism over US data, such as the latest house-price declines, displays a blindness to the business cycle. Summer four years hence might be a better time to start investing. The year 2013 would be safer.

http://tinyurl.com/5pc8rh

Sony's new electronic book that could spell the end of the paperback

At 9oz, the e-book weighs less than a hardback and has a battery which would probably give you long enough to read War And Peace five times, because it only uses power when you turn a page.

However, its 200-megabyte memory will ensure you do not have to read the same novel over again.

Each Sony Reader will be sold with a CD containing 100 books and plays, including Dracula, Romeo and Juliet, Pride and Prejudice and Great Expectations.

By 2010, he predicts e-books will account for 1 per cent of sales.

Amazon founder Jeff Bezos has described books as 'the last bastion of analogue'.

http://tinyurl.com/5wz2t8

jk484,

w/ respect to the seeking alpha article,
a writer posts a chart showing the USD index w/ an RSI just below 70 on August 28,2008, and states "i believe that signal is a fake-out and another run above 70 may occur"

the next trading day it happens and he looks smart... accept the article was published September 3,2008. i know that seeking alpha takes a few days to publish any submitted article but anything w/ such short term predicitons is useless when posted just after something occured that the writer predicted.

i wonder if said article would have been posted if the USD index reveresed and continued its plunge on mon/tues....

no disrepsect to the writer, i just dont put much stock in short term predictions after the fact. they do the same thing on Kitco all the time, check out the dates of their reports and the dates they were actually published, often just after their short term predicitons were spot on.

J

Cara 100 Update:

MCD - Target Price Raised from $68 to $69 @ Argus

dr.cosa,

good points

however the article points; intermediate dollar's strength and long-term up-trend for commodity which (as I understand it) support Bill's position.

HNU.to (aka HZBNF)- adding at 11.20 (USD)...

Kookmin Bank is on the accumulate RSI this morning. Got a small stake at 47.20. Would never have imagined buying foreign bank stock prior to finding the Cara 100.

from 9/2/08

[Bill Cara note: "There is a time to protect your portfolio if you are a long-only trader." Now is the time. ]

[Bill Cara note:

The above quote relates to the WIR (which was used by Seeking Alpha on the weekend) where I opined that there is no place to hide. After the broad market topped out last October, at least there were industries/sectors for long-only traders to move to for sustaining capital growth; but in June and July that escape route (ie, commodities) started breaking down, which allowed some switching back to Financial and Discretionary Spending stocks by adept short-term traders who could catch a bounce. All the doors seemed to close off in the past week, so I opined that "now is the time" that long-only traders have to seriously consider stepping aside for a few months until the dust settles. Of course, long-short traders, and day traders, will be ok if they are skilled and if there is enough volatility in markets to warrant the trading risks.

At the end of the day, my point since April 2004 when I started this blog is being proven; we are all traders of prices. No longer does 'Buy-and-Hold' cut it. That applies to oil, gold, bonds, etc.

Btw, how is the Don Coxe BMO commodity fund working out? Anybody know?]

short term trade in gold miners:

HGU (tsx) in at 15.00

any interest in GLW @ 18.00?

What about ABK on a pull back?

no interest in GLW. i might be interested in LEH...anyone else?

RosevilleBill,

There is an article on Jesse's Cafe Americain blog (http://jessescrossroadscafe.blogspot.com/) about Korean foreign reserves. A significant portion of them were invested in Fannie/Freddi bonds, which would be illiquid if troubles in the GSEs continue. There are increasing concerns about the Korean won. Add to that, concerns about the low savings rate and high debts of the Korean public; a domestic credit crisis could be in the works.

I just read Vadym's blog posting on stops this morning. It is wise advice.

jk484,

The buzz of improving house sales:

I have a bike route I travel daily on which there have been between 8 and 10 homes for sale.

Two have sold in the past month.
Six of the other eight have been on the market over a year.
Two of the six have been vacant for nearly three years.

Those which just sold were the last to be offered.

My sense is those which sold were able to buy/sell at the new "normal" pricing.

The vacancies have bought somewhere at the high in the market and are probably upside down on the old ones. (I know the owner lost his job here and moved to FL where he bought. A sad case.)

An additional one has been deserted and is being rehabbed by the mortgage holder. (Boy, did they trash the place before leaving!)

LEH/TTM +97% 1 yr correlation
IBM/MNTA +91% 1 yr correlation (MNTA RSI just dropped under 30 and has been outperforming IBM by a wide margin).

"Now we are going to see the closing of many hedge funds"

Mr Cara, I posted this on 8-27. Kass is saying the same thing.

Kass: Hedge Fund Turmoil Takes Its Toll

"I believe it to be of consequence, as the weak markets and the overall poor performance of hedge funds in many different asset classes have begun to feed on each other, resulting in:

1. some risk managers taking over from portfolio managers, causing "forced" sales;
2. an expansion of redemptions, also causing forced sales; and

3. reduced aggregate hedge fund industry inflows

If I am correct that the disruptive influence on flows from the fund of fund industry coupled with forced selling decisions by not only the trigger-happy (and smallish) hedge fund cabal but increasingly from some of the medium- to larger-sized hedge funds as well, then their recent effect on volatility and lower share prices shouldn't be dismissed. Nor should the lengthy effect of these disruptions be underestimated by investors. "

http://tinyurl.com/5eg7kg

LT- holding

AMX, BA, TM, IBN - all green

will sell before the US election and reload afterwards.

will buy FLS & SQM when the price is right

Anyone care to guess the bottom in UNG?

Trying to think of the best way to take advantage of HF closures. Any suggestions?

Bull-re UNG
Contemplating writing Jan put at $28-$29. If nothing else, seasonal factors in play. Longer term I suspect natty will be range bound.

BH - The bottom in UNG won't happen until domestic LNG export is licensed, or LNG transportation gets fed funding, I suspect.

Pookie - Correlation is not the same as causation. Given the large number of securities traded, there will be many pairs which appear to be (and in fact are) highly correlated--just as among any random group of 23 or more people, the odds are greater than 50% that two will share the same birthdate.

guy g, that sounds pretty good. I'd go for 27s. $6 target vs $7.17 -> 16% decline, UNG at ~27 to be safe.

og gas a good point, correlation is not causation, but very useful for diversification and hedging.

OG - Agreed, that is quite true. While LEH may be bought out soon, I doubt TTM will need to be. As for IBM/MNTA, I think some folks here were interested in biotech a few days ago, and so the notation.

been long united...no, not the van lines. The AIR lines...(what are you, some kind of heckler?)

HERO at new 52 week low.

Shark - Who the heck are you talking to?

Kiron,

Out of KB for a 1.80 uptick this morning. Lunchmoney made. The trigger finger is getting itchy. Thanks.

Speaking of birth dates, if you are married or have kids, at some point you will or will have been twice the age of all of these people, but not on the same day unless some of them are twins.

FWIW. Speculative. DOYDD.

Posted on Skype yesterday on the F call option activity on the 5 strike price for Sept. Noticed big volume increase in these call options after the close on Friday. Yesterday more than 30k volume. Today, 2365 volume. The most for any other Sept option today is 254 for the 4 strike calls.

Disclosure: Long. Over the last 10 days, I've picked up some F shares at prices between 4.25 and 4.60.

Actually expecting F to pullback today after monthly sales announced, but it appears someone may be betting the other way or there is something coming later this month.

Again speculative. DOYDD.

I closed some SKF calls here as it tested the 110 level again.

Hahaaa.. I don’t know who Shark is talking to but it gave me the only laugh I’ve had today.

"There is a time to protect your portfolio if you are a long-only trader. Now is the time."

Smoke in the auditorium and I’m headin’ for the exits! Looks like a lot of folks ahead of me. Wish I knew what the hoot I was doing here in the first place..

Says practically everything about our current campaign race.

Turn your speakers on.......

www.peteyandpetunia.com/VoteHere/VoteHere.htm

Sorry try this.

http://tinyurl.com/5qfpx7

unfortunately I exited smn yesterday, having bought it on thursday. but I went long sdp today and am still holding. wonder if xlu will finally make the breakdown. anybody have any thoughts?

excerpt from LA Times op-ed on Palin:

"So let us ask the question that should be on the mind of every thinking person in the world at this moment: If John McCain becomes the 44th president of the United States, what are the odds that a blood clot or falling object will make Sarah Palin the 45th?

The actuarial tables on the Social Security Administration website suggest that there is a better than 10% chance that McCain will die during his first term in office. Needless to say, the Reaper's scything only grows more insistent thereafter. Should President McCain survive his first term and get elected to a second, there is a 27% chance that Palin will become the first female U.S. president by 2015. If we take into account McCain's medical history and the pressures of the presidency, the odds probably increase considerably that this bright-eyed Alaskan will become the most powerful woman in history.

As many people have noted, placing Palin on the ticket has made these final months of the already overlong 2008 campaign much more interesting. Is Palin remotely qualified to be president of the United States? No. But that's precisely what is so interesting.

McCain not only has thrown all sensible concerns about good governance aside merely to pander to a sliver of female and masses of conservative Christian voters, he has turned this period of American history into an episode of high-stakes reality television: Don't look now, but our cousin Sarah just became leader of the free world! Tune in next week and watch her get sassy with Pakistan!" - Sam Harris is a founder of the Reason Project and the author of "The End of Faith" and "Letter to a Christian Nation."

This certainly affects MY assessment of financial markets going forward!

exited sdp. will re-up on a pullback

VFC ~ 83.70, up 5%

on my watch list. missed it @ 60's

rationale for sdp exit is I count a possible 5 waves up so am looking for a correx (on the one minute chart)

watching ETFC and MELI...MELI is looking pretty darned oversold, RSI 7 is rising off $25 low back in early July.

bought ETFC at 3.36. i think this has a legitimate shot of making it through the credit crunch and at least doubling. i also think there's a good chance AMTD or SCHW will buy them.

http://tinyurl.com/6adxgh
Cashing In On Energy Drop: Trading strategies
Quint Tatro

CALM being taken to the woodshed once again.

It would get interesting if it approaches support at its 200 DMA = $31ish area.

News Flash! Obama ditches Biden for Britney! LOL

something is up with ETFC today.

took up a big load of freddies, out now.

Ms. Palin was forced on McCain by hardline religious conservatives who threatened a floor fight if he chose Lieberman or Ridge, his first choices. She was a last minute choice who was not vetted at all. The scary thing is that she needed an administrator to help manage a city of six thousand people! She also raised taxes and debt to build a sports center. Imagine her facing down Putin.

God help us!

Haven't been trading much now as the markets have devolved into hand-to-hand combat.

Stopped out (111.85) of yesterday's SKF purchase.

Just bought some more SLW at $10.50 and WGW at $1.40 -- it is strange to see the miners fall so hard when the metals are not falling. This means that at some point the miners should rally hard with the metals rising very little.

I also wonder for how much longer financials can keep going up when the general market declines...

moab

Can please provide info on your post. I have not been able to dig up that type of info with any credibility.

Thanks!

That will be helpful.

Looks like the FED beige book was not good.. market is fluking!

Moab - Nice run up on my URRE today if interested in u3o8 - being you may be in God's uranium country around Moab. Palin/Obama vs. Putin - I'll take Palin. Also own TRP the company she worked with to orchestrate the gas pipline out of Alaska via Canada to the U.S.
Have a good day trading all.

Moab - on Palin

US gov't IS the largest enterprise in the world, and it's not a bad idea to have some executive experience before taking on the world's toughest executive post.

Steven Colbert last night argued that Palin had more executive experience than the other 3 combined: Obama, Biden, +McCain.

He concluded that Palin should head the ticket, and (to be sure of a VP with executive experience) Romney should be her no. 2

talkingpointsmemo.com has done the most digging into her background, including her involvment with the secessionist Alaska Independence Party.

The threatened floor vote info is from here: http://tinyurl.com/5slsvd (NY Times)

"Up until midweek last week, some 48 to 72 hours before Mr. McCain introduced Ms. Palin at a Friday rally in Dayton, Ohio, Mr. McCain was still holding out the hope that he could choose a good friend, Senator Joseph I. Lieberman, independent of Connecticut, a Republican close to the campaign said. Mr. McCain had also been interested in another favorite, former Gov. Tom Ridge of Pennsylvania.

But both men favor abortion rights, anathema to the Christian conservatives who make up a crucial base of the Republican Party. As word leaked out that Mr. McCain was seriously considering the men, the campaign was bombarded by outrage from influential conservatives who predicted an explosive floor fight at the convention and vowed rejection of Mr. Ridge or Mr. Lieberman by the delegates. "

I think Steven Colbert himself should run for the president. :)

It is a wonder that GM and FORD went up after their dismal vehicle sales reports were issued - again month after month. I guess had they both reported increased sales, their share prices would have fallen?

Executive experience? What if her management was severely lacking? There are quite a number of stories coming out to this affect, including that the town council of Wasilla pushed her to hire a town administrator.

An Wasilla resident explains here: http://mydd.com/story/2008/9/2/12284/85430

Moab - Seeing a nice run up at USU - going for a govt. guarantee to build new centrifuge enrichment technology in competition with GE/Hitachi's laser enrichment licensed from Silex. Kinda expect GE to hedge both technologies sooner or later. Disclosure I own Silex, Ge & USU. As i receive the New York Times each morning to start my day leaning left - never want to confuse editorial content in the paper with reporting the news. Happy Trading

well it seems that all have agendas.

That is a minor talking point in regards to Palin.
84% Alaska approval rate. "more executive experiance than McCain, Obama and Biden". Stopped a bridge, sold a jet, starting a pipeline from the shelf to alberta (that no other govenor could do for the last 25 years).

My thought. Refreshing- maybe someone new who isn't as corrupt as the status quo. Well not yet.
Besides the only way out of this economic hole that we are is is to make something.
Manufacturing is past it's time, we obviously can't make loans, made to many houses. Fussion hasn't been perfected yet.
Time for an energy and infrastructure plan. She might be the one who could get us there.

The truth, we won't ever know. All I know is the last 20 years our leaders haven't succeeded in overcoming their challenges.
For whatever reason, not sure we all can complain about it and lay blame but the sad part is, it is our own fault.
I'll admit it.

It's a shame to see so much blatant and biased political discussion on billcara.com.

For Pete's sake folks, don't you get enough of this everywhere else you look? Why the heck do you feel so compelled to spout your political BS here?

Do you really care so little about the Cara Community that you would risk turning it into a political wasteland?

Are you considering the consequences of your actions at all?

I understand that a reasoned approach to all this will be fruitless. The nature of our times is such that if people can flap their lips, then they will. After all why bother thinking before you type, it's so 'yesterday'.

Just so you know, I for one spend very, very little time reading anything but Bill's comments anymore. There's too much noise to sift through to get value out of the rest of it.

Moab,

Don't you think the New York Times has an agenda? You might consider the source... They would like to create doubt about this woman and discredit her because she is generating alot of excitement. At this point, from what I have heard initially, she seems to be a genuine reformer who has taken on "the good old boy" establishment in Alaska and perservered.
We need as much of this as we can get in Washington.

MA is down 6% on higher than normal voume, but I can't find any news. Anyone see any company-specific news here?

It is ever harder to tell what the truth is anymore - in politics, business, ect. The mainstream media doesn't do its job anymore; they just pass on press releases (propaganda) without digging into its verity and sensationalize everything to keep audiences. One researcher said that the woman on the phone in Wasilla records office said he was the only person to call asking for records so far (yesterday). I don't want to discuss this stuff either but it pains me when I see "facts" that are simply untrue go unchallenged. I see some others that I'd like to correct but I will drop it.

siguy

Well put!

"I for one spend very, very little time reading anything but Bill's comments anymore"

Include me in that siguy!

Bought some October $7.50 puts on ABK -- I can't imagine ABK surviving the next market plunge at such lofty prices.

moab,

I understand what you are saying. But if we all decided to start challenging the veracity of every news wire report and political speech, this would turn into something resembling a cross between a Yahoo chat board and myspace.com. Who here votes for that?

Also placed a buy limit order on SLW at $9.50, GTC.

siguy

thanks for the post

siguy -

You are right - I tried to resist but couldn't.

c3 - Colbert DID run for Pres.

He was in the S. Carolina primary, till the party wouldn't have him. He was in the the pocket of Pepsico (doritos)!

I can see how the outcome of the presidential election will affect the market, so it is a relevant topic in many ways. However, I intend to comment in ways that are strictly congruent with the spirit of Bills blog whenever possible, and I hope to hear all aspects impacting my trading plans (with conclusive testimonies).

WFMI +3.7%, MNTA +3.1%

Buying a little more WGW at 1.31

Buying a little SLW at $10. It looks like some hedge fund is unwinding its position in miner stocks -- it is probably the first time I see such a large drop in the shares when the metals are staying in place. Hence, a buying opportunity.

david
I also brought some more SLW at 10.00

GM & F sales goes down stock goes up
so, holder will be happpy if sales goes down more?

vinod- it's probably falling oil prices...(or maybe with all the incentives they took a loss on every vehicle they sold last quarter ;))...

Starting a position in:

SKF @ $110.70
WGW @ $1.29

Just sitting back waiting on gold to fall this month.

I'm with siguy. Far too much political commentary with either no connection to the markets or something vague and untradeable.

GM/F - Investors see last opportunity before oil tanks? Also, they want to see corrective actions, proactive strategies to market conditions? How about some LNG fleet vehicles, guys?

siguy, with full respect, I tend to skip over the politico bs, if you want to talk trades, talk trades. Where are you today?
I am thinking of unloading 1/2 pos in QID and adding to SKF which is uw. Sold SWC and bought some URRE.
Peace from North Puget Sound

SLW

Hey you "knife-catchers", (no offense intended, just teasing). Are you just playing this for a dead-cat bounce or are you happy enough with that buy-in price for the longer term?

I liquidated only some of my metals awhile back, and am very open to finding a buyable bottom in the near future, (in line with comments Bill has made).

MA was probably down because of a news report where the headline talked about gas demand being down 3.9% last month with Mastercard right next to it on the headline.

re: "am very open to finding a buyable bottom" aren't we all! I like it when Brian Shannon says (Bill says it too), a bottom is not an event its a process. So, yeah, SLW at 10 looks like a potentially good position. Anyone have any info or opinion on Rubicon RBY?
peace

WPT.TO - LNG vehicle technology leaders? Maybe something for our infinite radar screens....

XLF hasn't had 6 consecutive up days since Sept of 2006.

Adding to SKF @ the close...

Fatty! True up!

But we haven't seen Financials get trashed like we have in the last 2 years either.

I agree. I added some too. (But nervous!)

i got some on as well,,, (skf) needs a run

One thing to keep in mind about the auto sales is the fact that many companies have suspended or scaled back their leasing.

So people are faced with either 1)taking a ridiculously long term loan to get into the car they want or 2) don't buy the car because the monthly payment is much higher compared to what the lease would have been.

This is one of the signs I'm looking for....when people are BUYING cars. Not renting them as they have in the past.

what kept skf up today?

manx928: recall that SLW receives its silver at $3.90/oz, so unless you think silver spot will fall to $5 and stay there for years, the current share price is a bargain long-term. Short-term, however, you might make more money on SLW fluctuations. Hence, I just placed a sell limit order at $10.50 for the shares I bought at $10 and at $11.40 for the shares I bought today at $10.50. These shares together represent 1/3 of my SLW position.

Just bought some SKF after hours at 109.80. Placing a sell limit order for these shares at $115.

How and where do you buy after hours?

David's response to manx928's query on the SLW purchase I would put in the "value added" category. It gave his reasons for buying, the time frame he was looking at, and his projected exit strategy.

XLF - WOW !! Someone just bought two tranches of shares in AH at $22.06 for a total of 9.2 million shares.

PPT?

On the heels of Bill's question--How's your fund doing?

http://tinyurl.com/5vnokn

BP - All I can say is I'm glad I'm handling my own financial trading, hard to believe professionals would loose so much of other peoples money. I wonder how much they made on the run-up. Maybe they were on the wrong side of the trade in both directions? More sufferage for the "Blue-Hairs", no doubt.

Maybe with enough experience and an advanced toolset, I will meet with the same degree of success?

Get a rope!

Looks like the Techs are breaking down...

SOX's hit 330.. watch out below!!

http://tinyurl.com/SOX-Sept3

long on QID tomorrow!!

Ike is now the 5th hurricane of the Atlantic season- too early to say where it makes landfall...

http://tinyurl.com/59rul2

anyone happen to know exactly which "energy, mining, and resource equity holdings" Ospraie Management owned in August?

Ospraie Management Llc Details

http://www.mffais.com/institutions/124952/

[Bill Cara note:

More on Ospraie:
http://tinyurl.com/6bjgse

This Fund, like many, used Other People's Money to take control positions that, quite possibly, benefitted the Fund managers, which is the reason I suspect those decisions were made. Something's rotten here, and I suspect Ospraie is just the beginning. The issue is fiduciary responsibility.]

Lelik- the second paragraph in this story starts to answer your earlier question, but no specifics:

http://tinyurl.com/6bjkkz

"The Ospraie fund fell 27% in August alone due to bets on natural gas, oil, structured products and the fund has been selling off its holdings over the past three weeks, possibly contributing to the decline in commodity prices recently."

Grantmi- thank you

Ike has now been upgraded to the "third major hurricane" of the season (and is now a Cat3):

http://tinyurl.com/6p6blp

My father, who recently started trading and I think has double or tripled his "gaming" capital in a few months, is buying/selling options on SKF/UYG in response to the political winds. It was him who alerted me before July 4th that the offshore oil drilling is going to become one of the key points for Republicans. He has just enlightened me today (as I don't follow politics nearly as closely) that the Republican convention is taking place this week, and hence SKF MUST go down this week so as to demonstrate that the Republicans are suggesting good things for the country. So I just sold at $109.90 the SKF shares I bought at $109.80 and instead placed a buy limit order at $105 for the same number of shares. I bought some SKF at $110 yesterday, so buying the next bunch of shares at a lower price also makes sense according to the "scaling in" approach.

Another implication of the Republican convention is that the solar stocks are likely to go down, since they are supported by the democrats. So ESLR might be a good buy on Friday.

Ah ha! Plot thinkens! Looks like the ECB is going to LEAVE rates... not lower them.

Here comes back the Euro!! And gold is up $3.00 in overseas!!

ECB May Leave Key Rate at Seven-Year High to Fight Inflation

By Simone Meier

Sept. 4 (Bloomberg) -- The European Central Bank will keep interest rates at a seven-year high to fight inflation even as the euro-region economy teeters on the brink of a recession, a survey of economists shows.

ECB policy makers meeting in Frankfurt will leave the benchmark lending rate at 4.25 percent, according to all but one of 53 economists in a Bloomberg News survey. The bank will wait until at least March next year to lower borrowing costs, another survey shows.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ami6SOZaQG2Y&refer=home

And now the Bank of England is also looking to leave rates.

Should be interesting day tomorrow for the USD and Gold!!

http://tinyurl.com/BOE-Sept3-08

Re: "World Economy"

Unless ECB short term yields collapse as they had in Canadian short term yields, then this "world economy" in trouble is just so much bunk. There is a demand for dollars because the focus of trade in the $US had become the oil price, which is collapsing.

The economy that is in dire straights is the U.S. economy. No change in rates in either zone.

US Bond Yields

http://finance.yahoo.com/bonds

US rates can still come off a quarter point.

ECB

http://www.ecb.int/stats/money/yc/html/index.en.html

Canadian rates looked like that a few months ago, but have finally come off, though no need for changes either:

CCB

http://www.bankofcanada.ca/en/rates/tbill.html

A moderation of inflation is likely to cause some changes in the €/¥ trade without affecting the ¥/$ values much. If, for example the JCB is forced to raise rates at some point, or the EU bond yields collapse, then you can expect this will place strong support under the gold price:

stockcharts.com

http://tinyurl.com/3x7ywk

The oil price rout is likely to cause a demand for dollars in the near term, I speculate that this will also mean a delay the unwinding of the obvious currency pairs in the carry trade.

FMM - Full Metals Minerals

BMO financial - I read somewhere BMO financial has maintained exposure to Au and energy as per Donald Coxe. I suppose no one sent him Bill's book, or directed him to THE blog?

Jesse Livermore, in his 1940 book, described his method of scaling in as this: for longs, pay more for each increment added; for shorts, sell for less each increment sold. The idea is that the market will confirm if your judgment and timing is correct by displaying an immediate profit for you. This means never average down.

SKF, XLF -

Most financial shares traded with light volume. Financial is the only "man" standing for the day. Kinda make you wonder since there is not much news at all. For all I can gather - GS earning was slashed for a second time by the same analyst within a few weeks time, AMBAK was able to start an off-shoot company with AAA rating,and Korea wants a piece of LEH. Am I missing something?

If the masses are getting into SKF, does this imply that the energy/commo will get a bounce from money coming out of Financial or a bit of short covering?

SPX has a huge "money inflow" today on WSJ.com. Mix signals?

http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=topnav_2_3002

SLW has broken the Weekly uptrend line - and has re-tested that uptrend line to signify strong resistance - I'd be more inclined in looking for a price between 8&6$ - there are other technical trend breakdowns - just my 2 cents - good luck

c3 -

SPX had a bigger money inflow on 8/29/08
http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow-20080829.html?mod=mdc_pastcalendar

but today's inflow was smaller but made on much larger volume...

Bill,

I hope you and your family are safe and sound...

http://news.ino.com/headlines/?newsid=6892867670681

FMM - update on Full metals Minerals

Bob Moriarty raved about FMM in 2006. I had met President Michael Williams this March. Today, for an update, I spoke with Rob McLeod, CEO, and VP Exploration of this most interesting and focused junior, founded in 2004.

Concentrating on Alaska, FMM is a "project generator" which seeks JV partners early in a project to fund exploration and development, retaining a minority interest. (One junior, multiple "lottery tickets"!)Based on relations with many native groups, FMM already has defined 10 projects!

JV partners include Kinross (for multiple, unspecified properties in W. Central Alaska) BHP (for a copper porphyry project, and exploration of a larger region)Freeport MacMoran for "Pebble South", NewGold, and a few lesser know partners. Projects are early-stage, and sums to be spent by partners this year are small.

How to explain this deal productivity? Williams is an energetic dealmaker, and McLeod an experienced geologist - with a special legacy! A 3rd generation miner, McLeod grew up in the mining town of Stewart, BC. His sister, Katherine McLeod-Seltzer, has developed and chaired several successful companies. His brother, Bruce, chairs Sherwood Copper. Both siblings are involved with FMM. They have no doubt built the startup's credibility and facilitated access to partners.

For short-term cash flow, FMM will re-open on its own the low-tonnage, high-grade "Lucky Shot" mine. They plan to spend just $1M to begin production. Within 2 weeks, FMM expects to process its first "bulk sample" which will be used to finance basic operations. Cash on hand is down to $2M, with basic G&A running $1.8M/yr. FMM hopes for production of 50-70K gold oz/yr from Lucky Shot.

Both the "project generator" model and "micro-mining" of Lucky Shot seem in tune with today's suddenly capital-constrained environment.

My purpose is just to introduce an interesting case. DYODD. Disclosure: I have a "chihuahua position" in FMM.

Jock:
re: FMM

nicely summarized.
thank you.

Good morning.

Here are your Cara 100 Ratings Changes:

EXC - Upgraded to Buy @ Jefferies & Co.

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

Have a great day.

ALOHA !!

Too late ... Virtually nobody, including Bill, takes into account what is going on here and its monetary implications on the value of a US Peso. It is obvious that the Bush FY 2008 Budget and all previous US Budgets are focused on expanding this line item not reducing it. If you add this one budgetary line item(and its supplemental line items and off balance sheet adjustments)along with the payment of just the interest on the US Debt then we are nearing total US tax revenues for all workers in the USA. That's just two line items and these are highly inflationary since there is no offsetting benefit to infrastructure, only more growth in DEBT, something the USA has far too much of. The global fires are beginning to burn ... So, 1961 was the turning point ...

ITS TOO LATE ...

Link: http://tinyurl.com/34bp9j

It is absurd to dismiss this part of US government spending in relation to the BIG PICTURE for the US Peso.

This has been one hell of a GREAT investment(look st the 5yr chart)and as you look down the NR headlines I defy you to show me one instance where this company and its other brethren are "falling on hard times"! In fact all you can see as far as the horizon is nothing but MORE ... MORE ... MORE and BUY ... BUY ... BUY! I fear that what used to be said about GM is now applicable for this one company ... "as goes LMT so goes America"! What can OBAMA do about this ... please ... CHANGE MY ASS! There has not been one word mentioned by either McCain or Obama on this one budgetary line item with relation to any cuts or fiscal responsibility. NOT ONE! This is yet another "growth industry" like the "derivatives industry" that will not benefit Americans one bit in the long run ... It never has yet!

Link: http://tinyurl.com/6hllsy

[Bill Cara note:

Actually Bill has been saying all along that spending is out of control, driven by the power of lobbyists on their bought-and-paid-for legislators, and the intrinsic value of currencies (ie, relative to a storehouse of value like gold) is weakening -- not just for the USD, but for all major currencies. What I have been pointing out all along is that there is a bullish case for gold. But, I have also pointed out that while at times there is a strong case for value, often there is a stronger case for short-term trends and cycles of prices that differ.

I don't think many of you misunderstand me; it's just like some have an axe to grind. The only axe I hold is the one that is trying to manage risk and outperform the market.]

Re: Liquidity

In terms of liquidity and markets, a surge in the dollar would indicate that hard currency is at a premium. That being the case, a commodities index compared against the treasuries index would be a broad measure of liquidity:

stockcharts.com

http://tinyurl.com/6qsmwc

For gold to shine in this scenario, it would have to decouple from the $CCI:$DJCBTI.

Changed it already:

http://tinyurl.com/6m7vtv

F6

I agree Kaimu, but Ralph Nader doesn't have a chance and neither does RP, so LMT is in play.
It's the "war on terror" you know....

If you can find a candidate that will utter the words, then I'll show you a candidate that is a loser, or that will be made to look like an idiot. It's our fault we like flowery speeches and candidates we've vetted less than our gardener. Some of us deliberate more about who will deliver our newspaper.

Hell, I put more time into choosing an Estate Sales Company than BOTH parties did their candidates. Why/how is it that when it comes to little bits of our personal business and cash we are so thorough, but when it comes to our lives and all our worldly possessions we adopt BS like we are three year olds listening to our parents? (like we adopted our religion and politics, without examination).

Who here (myself included) really knows anything about Obama/Biden, McCain or Palin?

Anyone that is cheering for a VP candidate they didn't know existed three days ago and wearing buttons with her photo deserves what they get.

If she were looking to hire on as kennel help here or she was a babysitter she would get far more scrutiny then she has in the last three days for the biggest job on earth. Are you hiring transplanters?

What I saw and heard last night was a female version of GW shilling for oil. I wonder how many others heard the same thing? Remember 2000?
What did we know about GW when he was presented to us by Karl Rove? (other than he was GHWB's son) What did he *say*?

What questions should we be asking?

Cara 100 Update:

INTC - Coverage initiated at Collins Stewart with a Buy.

i found palin's speech distrubing yesterday in the sense that she was attempting to talk tough on the war on terror and geo-political issues, making obama out to be a softie, while mccain is the only leading figure in the rebulican party who actually served in any sort of combat.

a bunch of rich war-mongers who only know war from the viewpoint of their plush war rooms.

ALOHA !!

F6 - In terms of "yields" gold has decoupled from treasuries. So what is the CCI composed of mostly? Venture a guess? Grains, livestock and softs(coffee, sugar, etc)... accounts for 60%. Energy accounts for roughly 18% and metals near 23%(lumped in with metals is gold) and gold accounts for 5.88% of CCI. That's a tiny part ...

Here is a link to CCI trading ...
Link: http://tinyurl.com/65pgws

Here is a question ... Shouldn't a "commodity" be defined as a "finite consumable"? What happens to coffee? What happens to oil? What happens to cattle? Compare that to what happens to gold ... Gold is never really consumed like coffee or oil is? For that matter neither is silver or copper.

What the futures show as posted by Maromatics a couple days ago is that there is a desperate attempt by US Banks/US FED to keep gold in the commodities group and out of the realm of "real money". No other commodity or currency has such a concentrated short position and that position doubled from July to August.

Its all part of the scheme to convince global perception that paper and banks still represent "real wealth", when in fact they do not. Of course this is CB intervention ... DUH?

Speaking about "false wealth" ... Now whats happening in the race to the bottom between LEH and MER? I still say MER wins, but MER better get a better jockey and soon either that or disguise a hemi Cuda as Seabiscuit!