Good morning.

Here are your Cara 100 Ratings Changes:

DELL - Coverage Initiated by Collins Stewart with a Hold

ORCL - Price Target Lowered from $24 to $22 @ Credit Suisse

SNDK - Downgraded to Hold @ Lazard Capital

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

Have a great day.

from blogging stocks:

Republican Vice Presidential candidate Sarah Palin told Colorado voters that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have "gotten too big and too expensive to the taxpayers."

When Palin made the remark, the audience cheered and McCain clapped -- meaning that neither the Republican Presidential candidate nor the Vice Presidential candidate, or even their supporters, understand the roles of Fannie and Freddie. More troubling, McCain told The Boston Globe last year that "The issue of economics is not something I've understood as well as I should," and, here's the real kicker, said that he would look for someone who was a true economics expert in his VP pick.

note XAU below 125 yesterday, and may test the 8/16/07 low of 120.41 today...

GOLD & GOLD STOCKS

I've posted two charts at traders-talk.com that show some interesting chart patterns that repeat at crucial times. Now is one of those times. Take a look here:
http://tinyurl.com/chart-patterns

SMN/DUG- recall the despair last june when they were trading around 25? now they're in the forties...sometimes it pays to buy on weakness and let things play out..

outsourcing: the next wave . .

BARGAIN MEDICINE
Outsourcing the Drug Industry

US giants are rushing to partner with Indian and Chinese companies -- tapping their brainpower and saving millions of dollars in the search for breakthrough treatments.

What the multinationals now seek from India is the same combination of brainpower and cost savings that made the subcontinent a leader in software and computer services. Some Western companies are volunteering to share intellectual-property rights on new discoveries and even divvy up the profits. "It's a transformation of the R&D enterprise," says Robert W. Armstrong, Lilly's vice-president for global external research. "We have to think in a totally different mode."

The impact of research outsourcing will be amplified greatly as China, with an even bigger pool of biochemists, expands its role. Lilly, Sanofi-Aventis, and others have already struck up partnerships there. China has "extraordinary potential," says Eric J. Topol, former chief cardiologist at the Cleveland Clinic, who advises HUYA Bioscience, a drug licensing venture based in San Diego. China could yield "a flood of potentially important therapies. It's just a matter of time."

http://tinyurl.com/5bz3wp

jk484, let everyone be clear that Palin made that remark before Hank's Friday night takeover of Fannie/Freddie by Treasury.

So her statement was false before it was true.

But hey, so long as this ticket is less likely to raise YOUR taxes, what does it matter if they are otherwise manifestly unfit to govern?

Bill said - "Bet on the man. The man did not reach the pinnacle of Humungous Bank & Broker (HB&B) if he was unable to meet his goals and objectives."

I take this to mean HB&B is winning the battle and that HB&B longs are destined to profit unless somehow an even playing field is obtained.

[Bill Cara note:

Yes, clearly since July 16, HB&B have been winning. And just after F&F CEOs stated publicly they had sufficient capital to go into 2009 (which means they could outlast Paulson and get to a new Administration), Paulson seized the moment to squash any possible opposition. Paulson is known in the business as a bully; I'm sure be blew up when he watched the Freddie Mac CEO go public with his remarks. I only wish Syron had also placed the blame right back on the loan syndicator pals of Paulson.

There are ways the People can fight back, but frankly the financial services lobby is the biggest, most powerful in the world. They own most of the politicians who would be the ones the People need to legislate a level playing field. Back in July, those politicians gave Paulson the right to take the actions he just did. Just because he said he wouldn't use the bazooka or whatever, who really believed that. The equity market and the $USD has been on a roll since then.

The difference between me and other traders is that I pay serious attention to the big picture; and the difference between me and most of the people in media is that I am an indepndent and objective trader. So, I'm called a loose cannon or an eccentric or whatever -- doesn't bother me. The only thing that counts is the results from trading and the comfort in knowing I am giving the People a fair chance to trade against the rich and powerful. The latter is what I do in this free blog. Also about the latter point; I don't care what anybody else thinks of what I do -- it's the comfort I take from making the effort that counts.]

Re: CDNX, Copper

Checking in on how Copper is performing, we see that now Copper prices have now "caught up" with Gold prices in the correction since March. Oil prices are very stubborn, but this is because of the hurricane season, and possibly that so much money has been dedicated and lost to the oil markets, that people simply refuse to acknowledge the oil price rout.

stockcharts.com

http://tinyurl.com/67ad37

Another sharp correction in oil prices might bring down the house and take gold down with it for the short term. And since oil was seen to have talismanic powers as in 'Black Gold' its doubtful that the reality will set in, and few will realize the extent to which trading had gone beyond supply and demand.

(As an aside, I find it curious to say the least, that offshore drilling, which was banned a long time ago, is now seen as the panacea to energy ills. In the meantime, the hurricane season is whipping up and nobody gives a hoot whether hurricanes might affect oil platforms off the east coast.)

Morning BirdDog, having a problem opening your link. Doesn't look like a typical Tiny link to me... Anyone else having difficulty?

#2, thanks for the clarification.

I meant to do it but forgot.

I went into my broker last week with a stock certificate from my dad's estate, to be added to my account. I was sure given the opportunity to take out a home equity loan as it's a "good thing to have at only 3.99%". Yesterday the Visa app came in the mail as a follow up. Thank the Lord, as I own my home and can't imagine putting it into jeopardy and pay interest to boot. Yes Bill, being debt free and remaining debt free keeps me happier. Went dancing yesterday and took positions on GG, ABX, SLW, SU, PBR, TCK, BA and RIO. Can someone add insight to the 1.25 billion debt announcement by Barrick today? I see a little of borrowing from Peter to pay Paul. Is this considered good debt or bad debt Barrick is taking on?

Can someone list a few ETF shorts that could be used as weapons as suggested by Bill's morning comments? " selling the shares of banks, dealers, insurance companies, REITs, and residential construction (homebuilder) companies"

Re: ABX

Yes, I was wondering exactly why Barrick would require a debt facility when they have money in the ground? Perhaps their derivative obligations are overwhelming the balance sheet.

XAU 118..moving to 40% (of allocation) on GG, opening 20% positions in SLW and GDX...

2nd
what SLW look like it is going to be a penny stock?

jk484, Obviously you are reading too many of the left wing blogs and drinking the koolaid.

F&F have been in fact big draws on the taxpayer. Since 1938 and 1970 respectively, these govt sponsored agencies have been able to draw at the Fed window, borrow at rates below market due to their status as a GSE, and are exempt from state, local and national income taxes.

Their ability to borrow at rates below market have crowded out private investment in the mortgage markets for generations, due to their implied, now confirmed guarantee.

So yes, they do operate at a cost to the taxpayer.

So go back to your Daily Kos friends and tell them to get their facts correct before they criticize.

Is that all you got?

SU under 45...

2nd,

any interest in KGC @ 12.40?

SLW 7 handle, GG 25 handle?

Re: TD Newcrest Reports On Denver Gold Show

For anyone with a brokerage account at TD, this mornings action notes have a report from the Denver Gold Show.

Some of the companies covered were: JAG.TO, AGI, MFN, NSU, IMZ.TO, DGC.TO, OSK.TO, and AND.TO.

jk484- i don't follow KGC, but if you've DYODD and like the company, the 52-wk low is a good place to start accumulating...

For the first time, I see Bill commenting on Warren Buffett. I like that. For the time being, I have not heard anyone questioning Warren's motivation. I always think what he really thinks of. From Bill's comment, he said Warren has his own motivation. For that, Warren may not speak of his true feeling.

I also second this:
"Do you know that the happiest people in the world have no debt? "

But Bill, there are some people in this world. They like to borrow and don't have a tiny shame about themselves for not repaying the loan.

From Bill, "Do you or do you not want to break the control that credit-mongering HB&B has over your lives? That is the issue."

What can we do about it, if we choose "want to". For average Joe, we try and try. It seems there is no hope.

Bill, you've got to be drooling a little bit seeing these prices come to you.

vinod- for a company with only 20-something employees, little overhead, and making plenty of money on silver contracts, i don't think that's going to happen...regardless, i don't allow any one company to take up more than 5-8% of the portfolio...

Out of SKF & DZZ on this morning's pop. Holding in cash again, (Still partial SKF position in the 401K).

Inventory up 1.4%
not a good news. company are not selling product

jk484- agree completely that china and india will be major sources of both drug research and manufacturing in the next 10-25 years...

SU ~ 43.0

Good morning everyone. I have been watching the great comments from all of you, and it has been tremendously helpful.

I am confused at how precious metal move nowadays, specifically, SLW. I opened position at $9.9 yesterday morning, seeing that it was oversold, no bad news, almost never lower than $9.9 for quite a while, and that the bailout of FNM and FRE should drive USD down.

Then, I added another position at $8.9 when the market about to close, looking for a rebound from the what-I-think "abnormal" drop yesterday.

Yet today I see it dropping again, with "heavy" volume so far. The changes in oil, gold, and USD yesterday were against SLW and precious metal in general. But the magnitude of the changes was not large enough to warrant such a violent move in precious metal.

Does anyone have insight as to what is going on?

Thanks.

Bonanza,

not even one word of it is mine. it comes straight from the horse's mouth

My plan -
The way I see it, a trader should be able to play the anti-HB&B trading strategy on either the long or short side, depending on how you buy and sell. Since it takes longer generally for a stock to recover, I plan to play the long side so I'm less apt to miss buying opportunities or run-away rallies. I can keep a rising sell limit under my longs until a reversal occurs, at which point an automatic sell would transpire.

This strategy would implement the long ETFs as the trading vehicle to broaden diversity and simplify trading.

I'm open to comments suggesting perhaps a more effective alternative(s)?

Bonanza39 - Thanks for your comment this morning, I hope that you begin posting here more often.

That's not to say Palin knew what she was saying, because she didn't qualify any reasons why the GSE's are at fault.

Shouldn't F&F common trade at roughly the same price? I noticed they were lock step during the middle of the day but missed the afternoon as they changed. Looks like they are back in lock step again.

Chickenpookie, Doesn't your plan have significant downside risks when there is an extreme gap down before market opens triggering your stops at prices well below where you had them set. Example UAUA and SKF yesterday.

More foolish bottom talk

The linear hui uptrend showing good potential for a bottom in the gold stocks at the 50% fib for the entire bull.xau:$gold level is terribly oversold.

http://tinyurl.com/5gajzt

babybear - Maybe demand destruction of crude oil is so broad, that the USD will continue to increase until buyers return to the energy market.

Chickenpookie, you just lost the remainder of my respect.

Bonanza, you're a fool.

Babybear,

FWIW. I look for the RSI 7 day <10 OR the Triple RSI to bottom AND the 7 day RSI to move above 30. If RSI 7 day is less than 10, the stock is near or at a capitulation point. If it moves above 30, it's breaking out. Too much wiggle room between 10 and 30 RSI.

BNN reporting that Credit Suisse issued a report stating that yesterday's was a sucker's rally.

BNN also reported that F&F spent $170M in lobbying congress plus a whole lot of even nastier stuff. Weren't these GSE companies?? Ming boggling.

LEH trying to catch up with SLW.

bobbyyo - Thanks for considering my plan. UAUA is/has been used as a short for oil, and SKF is the HB&B short. My plan is to be on the long side, (UYG) which has the rising trend.

Consider the differences between being on the long side vs the short side as they pertain to maintaining sell stops - The question becomes which is more likely; negative surprises for HB&B, or positive surprises? I'm thinking positive surprises, because the trend is rising.

In the last month or so, without any fundamental change of conditions, we've seen the $USD rise, oil fall, gold fall, BSC/FNM/FRE get rescued to save bankers, McCain/Palin cross-dress as change agents to their self made Republi-problems, and now the child idiot himself is announcing today a paltry reduction in troop levels in Iraq and increases in Afghanistan (Obama's idea).

Far be it from me to say these are manipulations! LOL! But...let's just see how those play out, shall we?

I'll take bets right now that all of these will start reversing back to their former levels as soon as November 5th arrives.

I'm pretty sure this is Bill's thesis based on his talk of Mr. Moral Hazard today and the last few weeks of daily's and WIR's.

These are the most affluent and powerful people on earth and they won't take anything lying down.
You can fully expect Hank to do his boss' bidding and the top 2% he works for to get theirs, one way or another.

Good thing we have international markets.

Bill,
Thanks for a strategy which gives us some way to retaliate in this frustrating predicament. I enlist for the duration!

[Bill Cara note:

I received a letter today from Europe, which with my reply I will produce here (anon of course):

Dear Bill,

I am working for (major financial services company in Europe that owns a US-based company we discuss here daily it seems). I am in the middle management. Since August last year I am very closely following the unfolding of this crisis. With (my employer) I am in the center of our capitalistic system. I strongly feel that the system needs redefinition as it can not be sustained in the old way. I am reading your blog everyday and enjoy it a lot, thank you for that. I found it because I was on the search for people who have a different/innovative vision. Your "social equity" theme was appealing to me. I hear and read a lot about how our system is screwed but I am missing a discussion about viable alternatives. When I am talking about "the system" I mean the interaction between capital owner, owner of an enterprise and the employees.

At first I would have a very simple question which I feel is not being taken care of by the current system. Surely, there are a lot of other questions, like the one that you keep on raising regarding conflict of interest at HB&B.

1) How can it be ensured that a fair distribution takes place between owner of the capital, owner of an enterprise and employees?

As social equity is an issue close to your heart I wanted to suggest that you initiate a discussion within your blog regarding this question and related questions. May be it can be split in several parts. I really think that this would emphasize your social equity theme. I strongly feel that we need to innovate our system. There are a lot of bright people contributing to this blog so maybe this might be the beginning of creating new thoughts that influences the course of our future.

Mit freundlichen Grüßen / best regards

/Anon

To Anon,

Thank you for your words of support and encouragement. Today, in fact, I did offer a path between the owners of capital and those financial services companies that are prepared to take a stand for elimination of conflicts of interest and for the strict adherence of good banking practices.

In the lobby of a major regional bank office of Bank of America in San Diego, there was a 60 feet sign that offered $500,000 mortgage loans without qualification. The inference was clear to people who could not afford those loans (ie, free money), but also to serious minded people (ie, the latter could see that the system was in trouble).

The world needs HB&B -- but even more it needs HB&B to operate responsibly. Every major financial services company that stands up today with a White Paper that states clearly that executive management will restructure operations to eliminate conflict of interest and will in future make prudent banker decisions will be given a chance. Every holder of bad paper who states that in this quarter and next all that paper will be sold or written down to realistic market values will be given a chance. Every financial services company that stops using CNBC to hype performance that doesn't exist in order to push the company's growth agenda, but instead talks to the audience objectively, truthfully, will be given a chance.

Yes, I'll encourage that Discourse.

Thanks.

Best,

/Bill

There are serious issues today, which must be discussed, but alas there are some of you who would prefer to bash one another. Too bad.]

number2son - I'm not concerned with whether or not I have your respect, but I do wish to stay impartial in my analysis of the political environment. You may join me if you like.

jk484,

Outsourced meds? Great!

Remember the lead in the toys, the fish which glow in the dark, the pet food?

As one who is Rx dependent I can envision calling to complain about receiving the wrong dosage or other screw-up.

"Hello, your call is important to us. All of our technical experts are busy right now..."

Then someone in India, who I can't understand, finally picks up.

"So go back to your Daily Kos friends and tell them to get their facts correct before they criticize.

Is that all you got?"

Is THIS tone necessary? If you have contradictory information great, but personal attacks aren't necessary.

Can't we simply have good information respectfully submitted? If WE are the bottom 90 some %, and WE are the people, then WE need to stick together or WE are doing someone else's bidding......without knowing it, them or their agenda.

There is no reason for a majority to lie to one another or manipulate anything. Majorities can pretty much defend themselves so they can stick to the high road. When you see manipulation....it isn't a majority doing it.

CP: You need to read the link in yesterday's daily. At 14 times leverage, good news is going to be hard to find.....

anyone buying LEH in single digits???

Re: SLW

A huge caution on expectations in the silver markets, since moves in Silver will always outstrip those of the Gold price. So the move in Silver is one of complete capitulation, it would take SLW with it.

Try not to think of SLW as a 'precious metal' company, as it is a royalty outfit. Silver prices will be even more tied to oil price declines, since Silver does not act as much of a currency as Gold would. Gold is priced in several currencies and the price will feed back from one currency to another, but not so for silver.

Silver has declined very sharply against Gold, so you would have to wait until the price shows signs of recovery, but the gold/silver ratio is a very choppy indicator of one's personal opinion on just about anything that pops into one's head.

For some reason, investors took SLW to be indexed to Gold, which is false. SLW should be indexed to moves in Silver prices. Obtaining a cogent market analysis of silver will be difficult, if not impossible, because the volatility is so high on the metal itself. Charting some of the changes become very problematic.

A good news source is always helpful:

http://www.silveraxis.com/

2nd
what do you think about TBT
is it time to get in?

ATTENTION FALLING KNIFE CATCHERS!!!!!!

Looks like Lehman is spitting the bit. Who wants to catch?

LEH - in @ $8.56

Craig:

The rise in USD might have a fundamental component in the recognition that other economies are weakening.

Bill,
I have always run advice or sales pitches through the "Does this person have any possible ulterior motive?" filter.
Buffett has some good investment insight. I like his tax observations comparing his taxes to his secretary's. He seems like a nice guy. But he is human and subject to his self interests.
Your openness and lack of pretense was apparent in my first visits to this site and why I keep coming here. Thanks
P.S. After forty years in business I only had a little more than $600 in uncollected billing. (Mostly in my first few years :-)

n2s - In otherwords, I'm attempting to think through hidden agendas by being impartial, and get down to the brass tacks bottom line.

If attempting to be impartial causes me to loose respect in this forum, then so be it...

Grym,

I think China & India will be doing the research only (& probably testing) for the major drug companies in Europe & the US.

two things:

a) investment opportunity
b) sad to see high end jobs disappearing in the US

I see Boeing strike a replay of UAW vs GM in the 80's

Well, I guess we can narrow the letter down to Germany, maybe even Bavaria.

Re: SLW

Thanks for the replies, bsi87, Fransix, chickenpookie, and Craig (I think your post was directed to me?). As a largely naïve person to stock market your comments are enlightening.

And Fransix, in your words “So the move in Silver is one of complete capitulation, it would take SLW with it.”, did you miss an “if” here? And that website is great. Thanks a lot.

Bsi87, I wish I had adopted your methodology of market timing. A follow up question: is your method a method for downward market only? Or it can be applied both ways? Thanks.

F6, thanks.

Clearly something is happening behind the curtain-somebody is going down or forced liquidation from a hedge fund is causing the frenetic trading and heightened volatility. Lehman is trading like it is toast-oils, metals, ags, steels are being trashed, yet banks are aggressively bid(maybe an unwind?). Last month I mentioned to look for a panic bottom in gold miners (and it looks like other commodity related stocks as well) in the mid September time frame. Why? Two measures pointed to mid month-gold stocks made their high on March 17 so 180 days (six months) forward is Sept. 17; also crashes or panics normally run around 55 days, so taking the 7/15 highs projects Sept 9. Allow a few days leeway and make a list of stocks you want to own and the prices you wish to pay. Don't try to pick a bottom-let the market talk to you. A high volume key reversal day will probably suffice-a stock gapping to a 52 week low, and reversing to finish up on the week on huge volume would signal capitulation. A very short term trader could use an ORB with a stop at the early morning low. A fundamental trader may decide ABX is worth 30 and sell 25 strike puts at an elevated level to either collect the premo or own the stock at a level closer to 20. Make your list now and be prepared to act if the opportunity arises. I am looking to add ABX 25-27, NEM between 32.5-34.5, and GG 21 to 23 BUT WILL LET THE TAPE TELL ME SELLERS ARE EXHAUSTED.

LEH - out @ $10.10

Craig - You have a very good point there, I do recall that HB&B is highly leveraged and that they are manufacturers of good news. So too is the FED.

Nemo,
I have some cheap dry land in FLA....interested? LOL!

Shit doesn't happen. It's made to happen.
But then again, I'm a cynic and question authority.

With one or two I would say there is an element of chance. When a whole bunch of unlikely events happens to the benefit of one party (in power) then my inner cynic has a field day.

Any TWM holders in the group?

out oebvq 10 at 20

Good catch! No nicks no scratches.

Why don't you guys wait to buy the commodity stocks when the downtrend is broken to the upside?

Pookie - re your remark "The question becomes which is more likely; negative surprises for HB&B, or positive surprises? I'm thinking positive surprises, because the trend is rising."

Here's Jesse L's take:

"Thus the intelligent trader who has patiently waited to determine this line [of least resistance] will enlist the aid of fundamental trade conditions and also of the force of the trading of that part of the community that happened to guess wrong and must now rectify mistakes. Such corrections tend to push prices along the line of least resistance. And right here I will say that, though I do not give it as a mathematical certainty or as an axiom of speculation, my experience has been that accidents -- that is, the unexpected or unforeseen have always helped me in my market position whenever the latter has been based upon my determination of the line of least resistance." -- Jesse Livermore

Re: USD

A rise in the dollar is somewhat deflationary at this point. The Fed managed to reduce money supply as it was bailing out federal mortgage institutions.

But take note that The Fed would accept a move in the dollar temporarily, but not a bull market.

A vast influx of capital into the dollar will scotch any plan for recovery in the US, so its probable that with further difficulties in the banking sector that interest rate declines are in the cards.

The carry trades are what inflated various currencies around the world, so if these currencies come off, vs. the ¥ rather than the $, then perhaps the carry trade is about to unwind.

I find it very curious that people jump to infantile triumphalism over whose economy is performing best, when the banking crisis is in full bloom and chiefly centered in the States. Fannie Mae and Freddy Mac are the pillar of main street and has just fallen.

Its lucky that most people are in church or having their Sunday morning coffee and reading their Pravda when federal mortgage institutions got bailed out.

[Bill Cara note:

F & F was destroyed when Paulson wanted it done.
http://tinyurl.com/5zu4cs
Paulson is now running DC]

Craig - I support your observation pertaining to personal attacks, as well as condone alternative opinions. I guess, even at the expense of personal attacks, because attacks are just personal and not part of my underlying concern.

shark_attack
I have right to be lucky once a while?

optionoracle, thanks, very timely comment.

not to forget, thanks Bill, priceless, as always.

"How can we do it? I recommend selling the shares of banks, dealers, insurance companies, REITs, and residential construction (homebuilder) companies whenever the Relative Strength Index (RSI-7) gets above 70-80...."

I agree completely and would only add that if we all voted with our wallet, we could end a lot of graft and corruption. eg. I don't even buy the likes of Halliburton, Monsanto or CCA either. Even if I think their will be a profit!!! Comments?

Bad month for Obama, now his spiritual advisor Rev Jeremiah Wright has been exposed as having an affair with a white woman that broke up her marriage.

http://tinyurl.com/5b9gvp

I apologise for polluting this forum with a basic technical analysis question, but if one of you has Telechart and has found the correct way to implement the RSI-7 indicator, I'd appreciate a couple of lines of help.

I'm aware of the formula for it having followed the link posted on this site, and TC does have indicators such as RSI7.1, and "Wilder's RSI" which requests an RSI period and an average period, but various parameter entries with these have not produced the chart I'm attempting comparsion with (the XLE based on yesterday's close, compared with the one provided in the Daily Report).

g034 has spoken, and for once his words make perfect sense to me. Wow, am I learning, or is something else going on I'm not aware of....

Old Goat - Jessie Livermore confuses me at first glance... I'll have to work harder to comprehend his message.

CP: It's important to remember WE are actually together and regardless of a few small variables, all want the same thing.

Soooo....at that point people, and personal attacks become pretty important and part of an underlying concern, as hopefully others here have the same for you.

A roundabout golden rule view.

im considering 2 possible scenario's for the next fed meeting on the 16th:

1. rates lowered, underscoring lowered inflation expectations going forward and a theme of "stability" in the market commentary as there is likley nothing of "strength" for them to comment on.

this fits in with a pre-election announcement, focusing on the stability of markets as they cant focus on the terrible fundamentals.

2. exactly the same as above w/ no rate cut, but some increase in help to more failing banks.

BB,

using RSI 7 day < 10 just helps identify when the stock/etf has reached an area of max pessism (sp). When it gets into that area, it's a relatively low risk entry point. Right now SLW is 15.29 so it's not low enough yet.

The Triple RSI screen Bill/Korvus developed helps tell when the stock/ETF is taking off.

I guess I wouldn't be concerned about whether the market is bull/bear and more focused when the stock is bottoming/breaking out.

Tgap495 - In order to sell the movers, you have to buy them first, right? Most healthy Blue chips are solid and don't move much, but in this case the waves of disturbances present opportunities which we might capitalize on. If we have enough skill to out trade HB&B, we can spank their fannies to oblivion. This is our chance...

What office is Rev. Wright running for?

This is one for yahoo mesaage boards.
None of this is germain, factual, or necessary.

"...just after F&F CEOs stated publicly they had sufficient capital to go into 2009 (which means they could outlast Paulson and get to a new Administration), Paulson seized the moment to squash any possible opposition."

Bill, should we take this to mean it is futile to buy SKF other than as a day trader, since the financials have been given a reprieve?

Grym, Bill addresses this (SKF) question in yesterday's daily. I think he's telling us we get another shot at it....

BTW, glad to read you Geoff....was going to ask if anyone had heard from you lately and here you are!

"Bad month for Obama, now his spiritual advisor Rev Jeremiah Wright has been exposed as having an affair with a white woman that broke up her marriage."

This is truly despicable. The right's game plan in all it's ugly glory: play directly to the deep-rooted racial fears of white Americans.

Craig,

I was only pointing out one factor in the USD. I had no counter to your other point.

Bill,

A while ago I had a chat with someone working at the trading room backoffice of the place I work for, and asked the person if we are comfortable with our accounts with LEH and the significant margins deposited there, since they are our counterparts in some futures contracts.

Now, the reply I got is what made me feel itchy: the person said that "we are ok, because our cash is in segregated accounts".

Can you or someone on the blog explain me what segregated accounts are, and if these are protected in case the FDIC takes over?

Thanks.

[Bill Cara note:

Maro, I don't think the answer is acceptable to any trader who needs that capital to trade, and cannot go a couple days or weeks or months without it. To go through an FDIC takeover, you have to assume that (i) FDIC itself remains solvent, (ii) the accounts you speak of meet the FDIC requirements for insurance, (iii) the accounts can be quickly reactivated under new ownership -- sometimes there are back-office issues that interfere. In any case, the prime brokerage business of Lehman must be in a shambles. The company itself has looked for some months now to be toast. My decision would be to pull the accounts, if that's your decision. If it's somebody else's decision; it's time to get their defense in writing now. Force the decision-maker to be responsible. A lot of them won't be because there are usually kick-backs, etc, involved, and as money is involved, sometimes good judgment goes out the window. It's only later, in a cold light, do people usually say, how did that happen? It almost always happens because the decision-maker has his/her fingers stuck to the money as if it's theirs.]

Pook, people like Bonanza and zero don't care about balanced opinion or facts. If someone is exposed as a liar or an incompetent, as Palin has been time and again in the past week, let's not let the actual record get in the way when we can instead discredit the uncomfortable truth as coming from a notorious left wind blog (even if it is widely reported elsewhere).

Or maybe we can instead spread a racist smear about someone related to Obama instead?

This type of thing used to be called red baiting.

I've had enough of this crap the past two election cycles.

Number2,
It says more about the poster than anything or anyone else.

VIX hitting new day highs.. almost at 24.00 ($23.88)

Craig - You are absolutely correct, personal attacks serve no purpose than perhaps to gain attention or intimidate. The negative effects could be very harmful to some of the dialog by diverting attention (effort) from the subject, others might withhold conversation as a means to avoid conflict.

I've been duking it out most of my life; My skin is quite thick as is my head, and I've shed many of my inhibitions. Sometimes, like an old dog or a horse, I need to be klonked in order to raise my level of consciousness; a primary reason for appreciating Bill's theme I suppose, although sometimes it does get a little light for my tastes.

Bond Insurers -

Are the bailout good for bond insurers, e.g. MBI, ABK, AGO?

Nemo,
No worries my friend. We will all see how this plays out...

Sold sept puts on UNG, GMXR and MOS today. It will be colder in NY tomorrow and maybe that will be a reminder to traders that winter is coming. I love this blog, thanks Bill.

"I've been duking it out most of my life; My skin is quite thick as is my head, and I've shed many of my inhibitions."

Ahhh....I see, we're brothers from different mothers....LOL!

Bull Hunter

Think we'll hit 50+ on QID by 4PM?

re: Social Equity

I would just offer this personal observation. I designed and produced more than 60 annual reports (between 1966 and 2006) for mid sized companies. (only one was in the Fortune 500)

There was a major change in the goals of management beginning with the advent of stock options. The attitude toward employees, suppliers and shareholders was one which put them at a lower level of appreciation. (I'm sorry I don't recall just when this began.)

Another change — better for the company and debatable for the employee — was the replacement of the company pension with the employee managed (to a very limited degree) 401(K) plan. Too many people are too trusting of their employer (think Enron).

The stock options were extended to the board of directors with the reasoning that they should have more of an interest in the welfare of the company if they stood to make more money from a better bottom line. This was the same given for management's options. (Funny how the wages managed to be enough for ordinary employees to be expected to do their jobs.)

Five of the local companies for which I did work soon developed what I see as corporate incest. A group of about 6 to 8 individuals all served on all five boards. They served on compensation committees where each took care of the other's awards of stock, bonuses, increased pay for attending meetings, etc.

None of those companies is headquartered in our city anymore and most of their production is now outside the US. They soon recognized the immediate boost to the bottom line/stock price when eliminating these long-time, expensive employees they used to claim meant so much to the success of the company.

Ladies and Gents,

Bill brought out a trade plan on a platter this a.m. and G034 tells you how to play Gold and Fossils et al . . . when the time is right.

I can guarantee everyone who sold BZH, LEN, MTH, PHM, and RYL short at RSI(7) > 70 is smiling at Blue / Green on their monitors right now.

And if we wait to buy in accordance with Bill's system, I'll bet on much fewer frowns. I've never lost money paying attention to Bill's or G034's strong comments. Just my $0.02USD

Looks like TBT is going to set new lows (new ETF)and IEF will regain it's previous high.

Just following go34's advice and watching those trendlines....should be good for the TOG, PM's etc.

Blowout, I can give you one anecdotal support instance...I'm grinning pretty good after shorting TOL on the break of this morning OR low. Entry off 10min, with secondary/tertiary screens off the daily/weekly. Lot of room to fall on the weekly.

ALOHA !!

Bill ... Barrick Gold(ABX)in my mind has always been a company that practices deception and is one that is definitely guilty of "mining shareholders" and not "ore"! It is obvious from the Blanchard lawsuit, which I have posted here many times, that ABX is an agent for HB&B. Their mining practices aside it is their practices of deception that, for me, puts them on my BLACK LIST.

Generally the CEOs of all the mining companies have shown little regard in protecting their product from abuses in the futures market and government manipulations. While we hear all day long of hedging via "forward selling" we hear little to nothing of "forward buying"! These mining CEOs gamble too much and they gamble with shareholders(OPM)money. Little is said of that aspect of the mining industry. Commodities represent "real wealth" and paper is "false wealth". This is the classic struggle between "good(commodities) and evil(paper)"! In the case of gold it is "honest money" against paper IOUs or "dishonest money"!

During this latest takedown of the POG Goldman Sachs on the TOCOM has covered some 1600 short contracts just on Sept 2 session alone and increased their long position by 50%. There is no mistaking what happened to commodities and gold ... it was massive intervention to make "false wealth" prosper at the expense of "real wealth". The weapon of choice "futures markets" in conjunction with the FX and insider knowledge of central bank guidances. Recall all this started when the USDX rallied due to the notion that Europe is worse off than America financially and economically. Hummmmm ... all the fraud the global community is now faced with originated in the USA by US BANKS and somehow America will end up better off? I find that irrational ...

Back to BARRICK(ABX) ... They are borrowing $1.25bil ... because they are not in the mining ore business they are in the mining money business with leverage not geologics! It back-fired on them ... Here it is! This is the definitive answer to BARRICK and the congame they have perpetuated for years and yet the last people to know this are ABX shareholders. To me it sounds a lot like a Bear Stearns story not a mining company story! BUYER BEWARE ...

READ ON:
Unmitigated fraud
Antal E. Fekete

In the fall of 2000 I asked Professor Fekete whether he has revised his position regarding Barrick. He said that he has not changed his mind at all; quite the contrary.

„You should bring in the very serious charge that Barrick knowingly misleads shareholders, creditors, and the general public. For several years in a row, in its Annual Reports, at its shareholders meetings, press conferences, Barrick has been reporting consistently higher profits, attributed to its mythical ability to realize higher prices for its newly mined gold than prices bid in the market during the entire year in question. These reports of higher profits have been duly certified by reputable accounting firms, and they have never been questioned by academia, let alone the financial press.

We all kow what academia and the financial press would say if a company with publicly traded shares announced that it was manufacturing and marketing the 21st century version of perpetuum mobile.

Barrick boasts that it could accomplish the miracle of consistently selling gold at a price higher than the market has ever bid during the entire year through its ’sophisticated tool of hedging’.

Here is a sophisticated question I want to address to Barrick: „Why not share this ’secret’ with the American farmer? Would it not be wonderful if they, too, could consistently realize higher wheat prices than the market is willing to bid? Where are the farmers organizations to demand that they be told the secret of turning the stone into bread?

Well, Barrick could not share its secret with anybody because the ’miracle’ can only be performed through fraud. If we wanted to be charitable, we would assume that the accounting firms did not understand what they were certifying. Otherwise they would not lend their good name to this chicanery aiming at misleading the public. It is hard to escape the suspicion that the accounting profession may be an accomplice in this conspiracy to defraud.

It is not, has never been, and will never be possible to sell gold forward consistently at a higher price than the highest price bid by the markets during the year under review, any more than it is possible to turn lead into gold profitably.

Here is what Barrick is doing. It sells gold borrowed at the low lease rate, and invests the proceeds into high-yielding U.S. Treasury paper. Then it recalculates its revenues boosted by the positive spread between the yield on Treasury paper and the gold lease rate, and reports its profits as if it had been earned through consistently reaping a higher price for its gold than that quoted by the market.

Why is this procedure an unmitigated fraud? Apart from reporting profits under false pretenses, observe the fact that the transaction remains incomplete. Profits are merely ’paper profits’ as long as all deals have not been closed out and borrowed gold returned to the owners. It may not be possible to realize those paper profits, ever. It is quite conceivable that these forward commitments can only be closed out at hideous losses. For such a scenario, nothing more drastic need to happen than for the price of gold to return to a higher level where it has already traded for years or decades.

Barrick is speculating: it assumes that ’what goes up must come down’. If the gold price goes up, say, $200 per ounce, then it is duty-bound to come down at least that much in due course. Those with financial staying power (such as Barrick considers itself to possess in good measure) will be able to ride out any storm caused by temporary spikes in the gold price. Barrick lives in a fools’ paradise thinking that it can roll over all futures contracts showing a loss, several times if necessary, until the gold price comes down again and the commitment can be covered at a profit.END

[Bill Cara note:

I agree with you that gold is an essential asset for hedging against govt overspending and the ongoing destruction of fiat money. Barrick and Goldcorp are major producers with well-managed operations, and so they are in the Cara 100. But I am also a trader, so there are times I want to be long, times I don't mind being short (although it's not my style), and times I want to be in cash -- just like all stocks of the Cara 100 companies. I agree with Peter Munk's position that hedging is an appropriate management practice, just as I think hedging jet fuel was appropriate for the Airline managers during the run-up in the commodity price. Whether the company is tied to HB&B, conspiracies and so forth, I don't have the time to examine it or take a view on it. In terms of the metrics I think are important to stay a member of the Cara 100, I am happy with it. Then I trade it, like Goldcorp. On Feb-28, I issued a SELL opinion and report on GG at 44.71. The stock is trading at 26.39 today. In just over 6 months, the loss to shareholders who continued to hold GG has been -41.0%. I can't take losses like that and continue as a trader. I know that others here can't either, so on Feb-28 I sent my report to a few hundred people who told me they were interested. I am close to going back into the shares of precious metal companies -- because as a trader I cannot give back the ground I've taken from other traders.]

QT,

If not today, sometime soon. There is a lot more selling going on than the the major indexes are showing. Breadth is very weak.

Regards

n2s - I agree, it's not easy for me to see the light when so much mud slinging is going on, and that might be considered a leading indicator in terms of identifying manufactured problems (smoke and mirrors), distracting real issues. The beautiful thing is we have this forum in which to hammer out details: HB&B and the GSE's are front and center, and I couldn't care less about whose baby likes playing in mud, but unimportant offerings as such impart an initial response similar to throwing sand in my eyes.

I recognize a parallel forum would be beneficial to some, and to those I apologize for consuming their bandwidth. Please bear with me in my observations, I assure you the truth is all that I seek and wish to discuss.

AGO -

Anyone in it? RS(7)> 90, and a couple of divergence signals. It's traded > 100% since July low.

"I recommend selling the shares of banks, dealers, insurance companies, REITs, and residential construction (homebuilder) companies whenever the Relative Strength Index (RSI-7) gets above 70-80"

Is that the Daily RSI-7?

If selling short, what would be a good signal to cover? RSI-7 < 30?

ALOHA !!

Okay so the media keeps harping on 11 banks that the FDIC has taken over. I count 14 and then don't forget all the failed credit unions and the ones now in conservatorship on top of the FNM/FRE. So, once again there is massive under reporting of bank and credit union failures!

Go hear if you want an accurate accounting of US and foreign bank collapses and a tally of writedowns across the financial sector.

Link: http://bankimplode.com/

AOD - Nice bounce off all-time low @ 10.24 hit a few minutes ago; now 10.45.

Bill,

Great reply.

I shall act accordingly.

Thank you.

AGO - daily RS(7) is 90.84 as we speak. Be a good short given a literally no stop run up. It's apporaching resistance & weekly 50ma, within .50.

"Hummmmm ... all the fraud the global community is now faced with originated in the USA by US BANKS and somehow America will end up better off? I find that irrational ..."

Kaimu:

I don't think that was the actual belief. Bill made the point the $ would strengthen because the realization of other economies weakening actually made their currencies weaken vs. the $. It's not like the $ actually got stronger. That's a short-term formula. Longer term, I don't think anybody in the Cara Choir would argue against $ demise.

[Bill Cara note:

Thanks, nemo. Markets don't trade in a vacuum. In terms of currencies, they trade against each other, regardless of whether all of them (or some of them) are strengthening or weakening against a storehouse of value like gold. At the moment I agree they are all weakening -- too much wealth destruction by fighting wars -- but since July 16, the others that trade against the USD are mostly weakening more because traders now see that their economies are much softer than they have been led to believe. I saw that situation, and wrote about it, and knowing it would soon become "news", I sold the goldminers at the top.

There is a problem here in that storytelling is a challenge if the stories are made too complicated, so the storytellers oversimplify them, hoping they can convert other people to join the choir. You cannot oversimplify trading; you must look at all the data. You must analyze all the dynamics, and do it independently and objectively, without preconceived notions. Then you make a clean decision. You do it repeatedly. In time, you see that managing risk is more important than chasing "opportunities". Because trading is a continuous process, you don't have time to focus on what doesn't directly affect your portfolio or watchlist.

You see, nobody is going to sell me anything. When I buy, I do for my own reasons. It doesn't bother me, for example, if say a Ford or a GM car is produced by lousy managers if I'm not in the market to buy a car (or a Ford or GM car). I have only so much time for buying and selling, and I must use it wisely by focusing on what's important to my portfolio.]

argue against $ demise.

I guess this is also USD positive...

The budget deficit will jump by $246 billion to $407 billion this year, the Congressional Budget Office estimates in a report released Tuesday.

Last year, the budget deficit was $161 billion. The government's fiscal year ends Sept. 30. The agency attributes the jump to "a substantial increase in spending and a halt in the growth of tax revenues."

The agency's latest estimates do not reflect the Treasury announcement this weekend that the government would temporarily takeover Fannie Mae and Freddie Mac, the two government-sponsored enterprises that form the backbone of the mortgage market.

http://tinyurl.com/5mhj5t

jk484,

There were reports of Chinese drugs from Africa a while back being defective. If your life depends on it cheap should not be the operative word.

I not only distrust China, but with the FDA only checking one percent or less of the food imports may need to go back for a chemistry degree.

Also, it would be nice to know they were not tested on a dissident citizen of China.

Bid / Ask Spreads:

I'm tracking five NYSE stocks and all of them have $.01 spreads between Bid and Ask price . . . except one. Up or down, it has consistently had a $.06 to $.07 spread all morning. Does this mean anything to anyone?

Craig,

Thanks, I'll reread yesterday's report.

Dave Hyde - Telechart RSI7

I've implemented it, but don't have time to explain. Phone Worden. They have very good telephone support.

long fannie

INDU tanking...news?

BP - IMO When the bid/ask spread narrows, this means the market is ready to move. The sellers are meeting the buyers, or vice-versa.

Grym, Sorry, day before...

http://tinyurl.com/624kmb

Well, 1/2 of my bet is working today, which is that of financials going down. My MER buy to cover limit was hit at $25.80 for the shares I shorted at $26.80 and $27.18. Now I still have the shares I shorted at $26.20, for which I have a buy to cover limit at $24.80. MER has been good to me recently...

Also, the LEH puts I purchased a while ago have doubled today. I didn't invest much money into them, but it is still something...

I shorted some RF today at $12.02 -- I saw it on the "dead men walking" list a little while ago, and since it was up strongly in the last couple of weeks, I would expect it to decline at least down to $10. So I am placing my buy to cover limit at $10.10 for it.

On the other hand, the other 1/2 of my bet, which is that of commodity stocks going up, is still not working! Well, I just bought some SLW at $8.34 -- this precipitious decline should end at some point, right!

"Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."
-- Warren Buffett

Bull Hunter

$COMPQ needs to break through support at 2220 to 2200 and we could be pushing high 50's real quick.

vinod- the problem with TBT is we're closing in on, but haven't yet hit, bill's timing of 'the drop,' which is when the TOG takes off...

Jock: thanks. I was wondering if there was a built in function, but your response suggests a custom formula entry is required.
I'll take it from here.

USD down, energy down - hmmm... no tengo!!

Palin Billed State for Nights Spent at Home
http://tinyurl.com/5kpbv5

My Dear American Brothers and Sisters....

I know that this election is MONUMENTAL for you due to the optics of a possible 1st Black president or Female VP.... but can we keep this to Bill's focus.

We also have an election in Canada before yours.. and would think we Canucks try and keep our thoughts off this discourse!

thanks

I would agree that excessive debt is the foundation of the economic and finanical problems we face today. However, while pondering Bill's commentary over the last several days, I conclude that it is not HB&B that is entirely responsible. It is also the majority of the people who are responsible for the state of our society. And I, personally, would place most of the responsibility with the people.

As preposterous as that may sound, consider that the elected and appointed officials only have as much power as we the people have granted them (and we have granted them plenty). But how can we ever expect change when the majority of the people continue to glady drink in and accept the propaganda? And the propaganda machine runs deep. When the people vote, they do not vote for real change but for status quo. They vote how the machine tells them and the machine simply plays to their fears and greed. The people continue to re-elect the same people or the same types of people with little to no regard for their resume. The people do not do their due diligence, do not take responsibility to do so and by all indications do not want to start. At least not yet so it seems to me. True societal change starts with the individual. Change begins when the majority of people individually reject the systems which have power over them.

As individuals, by participating in their markets, are we not empowering these people further? I think Bill is on the right track. We must find a way to empower ourselves and others. By doing so, I believe we will find and achieve a more independent state of society. I also think collaberation is where the solution lies.

In that line of thought, I wonder if it is possible for a group such as this to set up a new market to trade where the influence and intervention of HB&B wouldn't matter. I would think that some of the foundations of this market would be transparency, strict accounting rules for the offerors, full access to everything for everybody and self governance and regulation.

Blowout Preventer, I think that a larger bid-ask spread means that the marketmaker needs a larger spread to keep his profit, as opposed to a stock which has a very narrow spread. In that latter case, there is often lots of activity and so the marketmaker doesn't need to worry about losing money. But this is on an inter-day basis.

On an intra-day basis, this goes in hand w/what chickenpookie said regarding sudden activity. If you notice bid/ask spreads narrowing much more than usual, then often that means that trading activity has suddenly increased.

I don't think one can make a comparison btwn two stocks at a given moment, (or morning) note the difference in bid-ask spreads and divine too much.

But any gurus, please correct me...

Regretting getting out of SKF this morning, but too busy today to watch minute-to-minute.

Earlier today if one did a stockcharts scan, they'd see a ton of consumer discretionary stocks with RSI(7) over 85.

I wonder if this was a Counter-oil play? Just buying in August to sell in December play? Or does the market know something about more consumer "help" (rebates) from Uncle Sam?

grantmi:

canadian elections follow a fairly simple formula:

NDP: claim the party in charge is reckless and the opposition party no better, they claim poverty and the economy is getting worse each and every campaign in the past 30 years in office.

Liberal: if in power, claim the status quo has served us well, cite surplus as the best evidence of their smarts even though provincial debt skyrockets due to federal cut backs and claim the mission in afghanistan is going well.

if out of power, claim the conservatives will eat babies and that the mission in afghanistan is going to all s$#t and strike a deal w/ the bloc to secure power.

conserviatives: if in power claim the economy is great and promise lower taxes. cite liberal scandals in the media and make childish attacks against the liberal leader, and strike backroom deals with the bloc for power.

if out of office agree w/ the ndp that the economy is horrible and getting worse the past 50 years, claim to represent the average joe and propose a more transparent government.

green party: actually make reasoned and clear political arguments without resorting to ad hominem attacks and get laughed out of debates by all 4 parties while slowly building a base of power.

lather, risne repeat.

sorry to go off topic but it had to be said!!!

Possible selloff reason? Bloomberg just had breaking headline on TV: 'Blackrock's James sees 'massive default' by regional banks'.

[Bill Cara note:

My observation from this morning: "I think the market is setting up a terrific shorting opportunity in the residential construction companies, and in the weakest banks and dealers." Looks like a 10% gain across the board on those shorts today.

Re the regional banks, I'm not so sure about this. Most did not get caught up in F/F and they were not the ones extending Liar Loans; but they did make some major mistakes that Reg Crowder brought to our attention at the end of May re: Bank Owned Life Insurance (BOLI).]

Bogus Report or Not it was Feeding Time for the Piranha – September 9, 2008

David Patch

United Airlines stock price plummeted more than 75% this past Monday after an erroneous publication was disseminated claiming the airline was filing for bankruptcy.

According to reports, Florida-based Income Securities Advisors picked up an archived story in the Florida Sun-Sentinel regarding a 2002 bankruptcy of UAL and published it as a present day event. The president of Income Securities, Richard Lehmann, claims that the story was picked up through a Goggle search and that in following the Google linked story the staffer who found the story claims it was linked to the front page of the Sun-Sentinel where stories about Hurricane Ike also existed.

Instead of reading through the story, which clearly identified the timeframe as being 2002, the staffer forwarded the story on to the Bloomberg wire as a third-party contributor. The Bloomberg headline simply reading that United Airlines was filing for bankruptcy and then linking to the archived news report.

Read the full Stockgate Story

http://investigatethesec.com/drupal-5.5/node/382

[Bill Cara note:

Patchie, I know the SEC is reading this, so please, let's both tell them that all financial stories need to be date and time-stamped or they should be removed from archives. Nothing infuriates me more than when stock promoters issue promotions that have no date attached. The date/time should be required posting up front.]

GIX under $1. VAL at 6c.
Don't forget APPL today.

AAPL.

Bill, I will pass that message on through my channels of communication. It is certainly a easy fix to future potential problems. Almost too easy and that is why hedge funds would probably fight it.

Call my cynical but I'd start with checking around, whether any of relatives or friends of an emplyee responsible for that UAL story had shorted it prior publication or grabbed long during sharp selloff.

This story had cost people real money. It's difficult to see how else any sane trader could react of bankruptsy informaation but dump his position at any cost. NASDAQ refused to break trades effectively leaving the loss with the most responsible traders - those who watched their position or had stop loss in place. The idea that best trading practices got punished makes me ill.

Lehman Brothers shares were plunging Tuesday after a report that the Korean Development Bank was backing away from talks about a capital infusion in the reeling firm.

TheStreet.com

Patchie - Performance always meets expectations when expectations are undefined.

long fannie

Posted by: shark_attack at September 9, 2008 1:17 PM [link]

taking bows, acknowledging applause...

sharkie,

You might want to take profits while you're at it.

UNG- what happened? it hit 35+, now it's taking a dive...

Red 23?

All gains from the Greatest Robbery of All Times are gone. Doe Mr. Moral Hazard and Mr. BB have any bullets left? What can they do? Drop rates to 0.5% and become a new Japan? (BTW, IMO that's why TBT is still dangerous).

Dick Bove (Ladengburg): "LEH have lost all sense of rationality. Only way out now is a hostile takeover."

wave, my red 20 was LEH 5 puts.

Has to make you wonder why NAASDAQ let those trades stand????

Re: ABX

The discussion with Barrick's CEO on BNN centered on the hedge book, so I am presuming that it was the hedge book write-downs using some form of collateralized debt obligation that is forcing the company to raise cash. I suppose it would be because the counterparty swaps are gaining ground.

Makes you wonder if the majority of large gold producers are in some way exposed to CDO's or Swaps if they all participated in off-balance-sheet CDO formulas to write down hedge books without impacting their quarterlies.

HNU.to- clearing off the trade here...a little better than flat, minor profit at best...on to other things...

Closing the TOL short after hitting my target of closing the gap (and then some)

~10% in a day is a pretty big move (caught about half that), gut tells me it bounces into the close. Looking to reload higher .

My question too nemo. I witnessed them breaking trades in similar situations before; more than that, sometimes they did it in a very questionable way leaving traders with one side of a trade. For instance, some junk with small float gets hyped somewhere, spikes from 5 to 12, a trader shorts it at 10, covers at7. His short get broken but his cover is outside of time window that NASDAQ assigns to break trades. Thus, a trader is left with LONG at 7, and above-mentioned junk opens after halt at 3.

In this particulaar case it was quite avoidable: the trades caused by the publication were all contained clearly in a very easy to isolate time window between 10:55:00 and 11:08:00 ET. It would only be fair to break them all and not make non-guilty to leave with undeserved outcome.

should I puke at $782 per ounce? Let us see $700. And see how many people can stand that? I don't borrow money.

Oh, and just FYI. The highly touted "approval rate" of Palin is kind of a joke. Cut everyone a check for a couple grand a year, in a state where there is no income or sales tax (local municipal sales tax does exist inside city limits of some cities) and they'll approve of you too.There are plenty like me who had no use for her as our Gov and there is no way on earth she is qualified for VP. I've been to Wasilla plenty of times, running the city there would be less of an undertaking than running the corner auto repair shop.

have to agree with nemo- on what basis does NASDAQ let the trades stand? does it not encourage more of the same?

to leave = to live

What a blood bath in solar stocks! I was too early selling ESLR puts yesterday... Placing a buy limit order on ESLR at 6.1. The "official" explanation for the drop in the solar stocks today (http://tinyurl.com/6mbso6) suggests that the tight silicon supply and an oversupply of solar elements is the reason. However, ESLR has contracts in place to meet its silicon needs until 2012 and signed contracts for its solar elements, so these worries should not apply to it. Hence, this is a buying opportunity.

Bill,

re: Regional Banks - I don't know why they are spinning this story now of all times, but I have my guesses. Their is a bit of truth to it which aids in believability.

Some of the more irresponsible Regional Banks got into the building craze late and expanded into the bubble areas - California, Las Vegas, and Florida. ZION hit two of those three. Now they are finding the financing window closed, even at 9.5% interest.

TRIN is even at 1 which is curious for such a selloff.

It is strange to see FNM growing today despite XLF falling sharply. I guess this means that FNM was really oversold yesterday. So I will hold the shares I bought yesterday at $0.89 until tomorrow, for if financials rebound tomorrow, then FNM should fly, and if financials keep dropping tomorrow -- all the better, I have a lot of SKF for that occasion. :)

Alaskan Pete,
No taxes and and money given back to the people for surpluses in her state, I'd approve of that here in NY.

Solars are capitulating today. At least, it looks that way right now. The sell-off has been unprecedented in its speed and depth.

ESLR, for example, is down almost 40% in a week. No fundamental reason. This is the biggest drawdown I've ever had. Unless I'm missing something significant, this is either the buy of the year or I have made a catastrophic mistake.

SKF is at 113 an intra day high

The NASDAQ let the trades stand because the NASDAQ considers those trades as informed trades. The NASDAQ fears that to cancel trades based on bogus reports in this incident would set precedent to cancel future trades on other bogus information circulating. What the NASDAQ fails to realize is that several billion dollars vaporized in a matter of 15 minutes.

Be careful SKF holders.....I also sold my 107.30's too early today but with the LEH drop there may be another rescue in the works.

Who knows...they may bring back the short sale rule for financials.

OK, my buy to cover limit was just hit at $24.80 for the MER shares I shorted at $26.20. I didn't do any due dilligence with choosing MER in the past couple of weeks as a shorting candidate -- Bill's words of MER being dead from ankles up were sufficient to me (and the fact that MER had a big run up recently). Thank you Bill!

ESLR was held by a lot of mutual and hedge funds......

AGO - Something smell fishy here. Am getting out.

Patchie:
I understand the rationale; but it can be traced to one source, a trading organization no less, that likely had an interest. It would be really interesting to find out when that individual actually found the story.

Regional banks gave a lot of easy money to small businesses and construction projects. The former firm for whom I worked was allowed an absolutely stunning amount in their line of credit (and they maxed it to the hilt). Seriously, it would have made a rational businessman faint. . .

That's about the time I started investigating what was wrong with the "Big Picture" in business and finance and came across this blog.

I'm bearish anything credit-driven until we have the big "Washout", whenever that will be.

ESLR- wow...

Well, my October $12.50 LEH puts have tripled (I bought them when LEH was trading at about $14), so I have just closed them. Unfortunately, I didn't invest too much money into them, but the profits will still pay for a nice Hawaii vacation for my family. :)

QUESTION - Wiburt Ross & AGO -

I guess someone must have been buying AGO that the price stay constant and volume surge 100%. So, when the buying is done, which way will the stock price turn?

Out of Fannie @ $1.20

Freddie's still hanging out.

the sell off in the miners is almost enough for me to want to complete my positions...waiting to see how they close...

Patchie,

I would agree with their reasoning if that was rumor or something of this kind. But with news posted on otherwise credible source, they simply punished traders for doing the only thing they could do... IMO, they haven't done their dd in this particular case. You are right about massive amount of money exchanged hands but to me it's not even a matter of that - it's a matter of principle. Responsible got punished with no fault of their own.

"Responsible got punished with no fault of their own." Vadym, isn't that a main rule of life ?

AIG also getting crushed today.

Long ESLR, 6.28. Let 'er buck.

SiO2- congrats on the LEH puts...(you'd have to be a gamer to know, but it's red 23, black 20 ;)

Added to RTH/XLY short position. Standing by for ESLR/TAN long entry. Added a bit of SLV, next add at 10+.

Out of FRE @ $1.10.

Just bought some VLO at $30.84 -- I see no reason for such a drop in refineries.

Any reasons to sell SKF into the close? Any reasons to hold SKF if up 8%?
TIA

occam_razor (love the nick btw), true... how naive of me :)

Bought some more SLW at $7.76.

GOLD & GOLD STOCK CHARTS

I posted a TinyURL earlier that someone said may have been defective; here's a new one that should work. On the traders-talk.com GOLD page, today I have posted 3 messages with charts. Look under the "Topic Starter" column for "Mike" and click the links.

http://tinyurl.com/6lo9ra

Moving down the limit orders for SLW to $8.5 and $9.1 for the shares I purchased today at $7.76 and $8.3.

you could probably pick up SKF a few bucks cheaper tomorrow morning. That's about it.

BirdDog, thanks, I wanted to see those charts. even if its not a bottom, I want to have some funds available when things turn

Dave Hyde,
rather than have all TC users bug their support line, could you publish the PCF (s) here please.

Oh I sold into the rally...Too soon of course, but I made a bunch of money in almost no time:)

God I love this business.

Make no mistake...

This is the death of Lehman that I've been calling for for the past 2 years. I advised my insider to sell his shares at 70 a couple of years ago, but ya know what hb and b employees don't do too well?

THEY DON'T LISTEN!!!

It took a further erosion in the value of his shares before he saw the wisdom of my words.

And be wary to buy any of this garbage...in fact i wouldn't take any stock overnight at all.

This market has a VERY slippery feeling to it right now.....

Looks like the 3 PM turnaround rally turned into Thelma and Louise.

http://www.youtube.com/watch?v=4z88U915uq8

Vad,

Does recent action represent a LEGITIMATE de-coupling of the airlines to the price of oil or will that dynamic return once stocks get a lift?

6000 of WGW @ $1.15

I will get out if it jumps 10 cents, or add more if I get a chance under a buck!

No other trades going on right now. I will wait until tomorrow to see what the day holds for LEH.

Those buying SLW: The put premiums on the 7.50's are approaching a buck (Dec, and Oct is not far behind.)

Just saying.

The $RUT finally broke through that 720 steel barrier. Next stop 650? Please!
[TWM/QID/SKF loooooong]

2nd,

Maybe you should just throw in the ESLR towel and send me Vad's book now....

(JUUUUSSST kidding bro.)

re: Metals and Miners and GDX

I'm scrambling to find where Bill mentioned recently that Monday/Tuesday might be a time to consider PM's and miners.
Does anyone recall in what report?

Question: Might GDX gap up on the open in the AM?

Long GDX and snorkeling...

And for all my brothers and sisters who, like me, began trading and are earning our stripes in this, the most horrible stock market in 50 years, CONGRATULATIONS....Our motto is....

WE WILL EAT YOUR LUNCH AND YOUR DINNER!!!

shark,

this decoupling started a while ago; yesterday's accident with UAUA may have played certain role in furthering this process by reminding participants that airlines have other concerns asides of oil too. IMO, this bonanza is over for now. What happens in the future - who knows but I would assume this correlation will not be that strong anymore even if it resumes.

WOW! Did you see the TRIN at the close? Exploded higher from 1 to 1.4 in ten minutes. Meltdown coming?

Bull Hunter

We came close... 49.98 was the high for the day.

60 is looking good!

Someone posed an interesting question the day. They said they thought FNMA owed the Chinese something like 368 billion. The US government is going to run a record deficit next year pushing 500 billion. The question is: Are the Chinese going to let the US government borrow the 368 billion to pay themselves? In banking that is called kiting. Once it is figured out, aren't the foreign wealth funds going to demand ownership for taking on our risks? They aren't stupid.

Following Bill's discussion of residential construction companies, I just placed a sell short stop limit order for KBH, stop 20.99, limit 20.9. I missed the recent rally in the homebuilders, and now that the bailout has occurred, all the expectations are out and the second half of the "buy the rummor, sell the news" trade will probably start working now. I would have shorted BZH instead (which looks to be a weaker company), but no shares are available at Scottrade...

cyderman,

I managed to gather this info so far from Worden Discussion forums. At this point, I'm not swearing by it as I have not had chance to fully check, but qualitatively at least, my chart now looks a lot like Bill's for XLE, RSI-7 daily. Please feel free to try out:

Plot "Wilder's RSI"
RSI Period 7
"Use Wilder's Smoothing" enabled (this was the difference maker for me)
Avg Period 1
Simple Averaging

kp84 - "Monday/Tuesday might be a time to consider PM's and miners"

Bill did say something similar if not exactly like this in the metals review section of either the WIR, or daily he published on Saturday. Check WIR first.

Great piece from Bloomberg:
Freddie, Fannie Scam Hidden in Broad Daylight: Jonathan Weil
To all you US folks your Northern neighbors feel your pain in the absolute dereliction of duty by your financial 'gatekeepers'

Oh yes here is the link :-)
http://tinyurl.com/6lagnl

2nd
sold too soon 10 OEBVQ at 20
would have got 26

Here's the commentary in its entirety..worth reading again..

September 5, 2008
Cara's Commentary & Community Chat, Fri., Sept. 5, 2008, 8:39am ET
The most frequent request in my mailbox is to opine on the timing of a re-entry in the gold market. Yesterday, I sent the following reply regarding a silver inquiry from someone who’s background I know a bit about:

There will be, I believe, some help for Wall Street from the White House in the next 60 days. That ought to shake the present USD strength, and start the precious metals rally. If you see another extreme sell-off in silver, don't hesitate: jump in and tell yourself, as you do it, that this is a three year commitment. If you prefer the silver producers, these are weighed down by rising costs, so the royalty company SLW is probably best. I'd write puts and buy calls and go long the stock at the extreme sell-off.
Absolute cycle bottom numbers are often set during a flood of margin calls. In the commodities, like the precious metals and energy, this stage is usually linked to the failure of hedge funds and the broker-dealers that administrate them.

Today’s US Jobs Report is likely to show another significant retraction of non-farm employment and a lift in the unemployment rate. Politically speaking, this situation is unacceptable to the Republican Party which is embroiled in a 60-day fight for retention of control of the white House. Hence my time frame expectation that the Administration will make a panic move to help.

Yesterday, PIMCO’s Bill Gross was pleading for help from the Administration. However you paint this picture, color it yellow. Bill Gross represents Wall Street, so this is another case of Humungous Bank & Broker pleading for Intervention, a tilt in that so-called level playing field that would help HB&B.

Every time that tilt happens, the $USD sinks. Presently, the $USD has been on a powerfully bullish run, which has been tanking the commodity prices. The Administration has been touting the positive impact that is having on the US economy; yet the data does not confirm that. Traders have been selling off the Energy, Financial, and Tech sectors because they now clearly see that the US economic problem is a global problem. As other currencies have dropped, the $USD has lifted. But there is a limit to how far traders are prepared to push it higher, knowing that US banks, broker-dealers, insurance companies and hedge funds are likely to fail soon.

As Bill Gross mouthed his plea in the direction of Washington, he was signaling “Get set for tilt”. Yes, we are that much closer to a bottom in precious metals. As I see it, traders with a three-year time horizon can buy Gold with a 7-handle and Silver with a 12-handle and do well over that period.

Day traders and swing traders of the stocks will be waiting for the next flood of margin calls and resultant sell-off in the goldminer stocks. That could happen on Monday and Tuesday. We’ll have to wait and see.

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

Posted by Posted by Bill Cara on September 5, 2008 08:39:14 AM

"Someone posed an interesting question the day. They said they thought FNMA owed the Chinese something like 368 billion. The US government is going to run a record deficit next year pushing 500 billion. The question is: Are the Chinese going to let the US government borrow the 368 billion to pay themselves? In banking that is called kiting. Once it is figured out, aren't the foreign wealth funds going to demand ownership for taking on our risks? They aren't stupid."

You could take the other side of that argument. What other choice do they have. We're a strong counterparty to their economy. Walmart alone probably feeds more Chinese than any company in the world.

Congratulations to those of you holding the shorts today!!!

You know the rule Vinod, wait until the last 15 minutes of the day to trade OEX...

Thanks for the Sept call OEX last week. I made 70% on that trade, and that was getting out late too! I would have followed you on the puts, but I wasn't at the computer yesterday at the eod. What are they saying about the OEX direction now? I guess wait until tomorrow now!

For those trading Canadian companies ...

In the midst of general sell-offs, (TSX down something like 13% in the past week), there are a few bright lights. I'm pleased to see my recent purchases of NBD, MBT and MFI are holding their own or positive. It's looking like they've already been as low as they'll go and are glad not to be in oil or minerals! Check them out if you're interested in something running counter to the trend.

As to the PMs and miners ... is that the smell of capitulation in the air?

Could not resist buying some ESLR AH at $6.2. Placing a sell limit order at $8 -- given its 2-year chart, any price below $8 looks like a steal for ESLR!

Are the OEB options on the VIX?

If I were the Chinese, I would soon consider buying up all the commodities I could get my hands on. Cheap commodities would allow the machines to keep running at the depressed prices they are likely to receive for their finished goods.

did not add to any miners/metals today, but i'll go on record as saying any buying in the sector today is guaranteed to pay off...;)

I seem to be doing a lot of buying yesterday and today. But hey, the hedge/mutual funds are panicking, and this is the time to buy. I am glad I wasn't greedy in the past month and started buying commodity stocks slowly and already at low prices (thanks, 2nd_ave, for the lesson of scaling in on weakness!), so that I have reached the limit of my cash only today. Hopefully, today was the end of the commodity sell off and I won't have to dip into margin to keep buying them. :)

Can anyone explain why VLO has collapsed today? I am tempted to buy more of it, but want to make sure I am not missing anything important...

Re: 55 Days From 7/15

55 trading days from 7/15 puts the presumed low in mining shares, and perhaps gold and other commodities later than Sep. 09, because its only been ~40 trading days since the 'high' in oil prices.

So I would say if oil prices were to agonize a further ten trading days, then it might still affect gold prices. So, if the 'low' of $777 gets taken out, then perhaps we will see a target of ~$724.-

The gold price high in March has led to a 21-week correction, which was the length of the previous major correction in gold prices from May 2006.

Placing "stink bids" for SLW at $7 and ESLR at $5.5. Well, the way things are going recently, these may be very real bids. :)

Hoping that SKF will hit my sell limit order at $117 tomorrow for the shares I purchased at $107 on Friday AH.

Re: 55 Days

Just to add: We had 48 trading days since the 'high' in the CDNX and Copper and in the $CCI:$DJCBTI, which preceded the oil price high. So we have anywhere from 7 - 15 days window to consider a possible capitulation based on a 55 trading-day panic.

Sharkmandude...maybe "We DRINK your milkshake"* would be a better line, especially trading energy. (*There Will Be Blood ref, for those non-moviegoers among us)

Thanks again bsi87 for the clarification. That was really helpful.

MikeNYC: Thanks for that option info. It seems option traders are betting that SLW is going down to $6.5 or below by the settlement day (I am not sure what that day is)? Well maybe it can, although I don’t see the fundamentals support it.

David - VLO - If I were to venture a guess, I'd have to say traders don't believe gasoline sales are going to be increasing, considering the magnitude of the black cloud hanging over the economy. I would look for a trend reversal.

David - on VLO -

I couldn't find any news to the sell off except that the timing of the sell-off lined up with SPX. All refiners are down (same chart pattern). I guess people decide to take profit in the wake of Ike weakening. Crude report tomorrow, & OPEC meeting starts today. I guess if OPEC keeps production level unchange, that in itself is a good news to oil since the inventory are not building up in the wake of demand destruction. But, have to tell you ... this VLO is a DOG. I think I'll die before it turns up to the march level. I bought back some TSO I sold last week.

David,

Re: VLO

This week's report from Value Line, which I believe came out today, covered VLO. The analyst reduced EPS estimates for '08 and '09 by 30-35%. Dropping distillate demand and cost increases were cited as reasons. Also some projects have been delayed to conserve cash. The long term (3-5 year) outlook, however, remains favorable.

Essentially, they don't expect the stock price to outperform until gasoline demand picks up.

I was also tempted to buy until I read the report. I did join you and others with ESLR and SLW at the close. Good Luck!

Placing a sell limit order on my FNM shares at $1.4 for tomorrow -- let's not be greedy...

Thanks for the ValueLine explanation, auhead! However, the data does not seem to support it. The national average gasoline prices right now are where they were on 5/10, but oil is 18% down from its price on 5/10. I have expected from the beginning for oil to come down faster than gasoline -- once people bought gasoline at $4.50, any price lower than that feels like a bargain, and so their willingness to buy should increase significantly as the gasoline prices come down even a little. In any case, I placed a sell limit order at $32.80 for the VLO shares I bought today at $30.80.

ALOHA!!

Bill/nemo ... The prevailing media story was that the USDX was rallying on poor Euro/Asia data that made the Euro and Asian currencies questionable. I am "THE CHOIR" when it comes to the long term outlook for the US PESO! To sell a trade there has to be a story and the FX traders bought that one, but I believe both the trade and the story were helped along with the participation of US and Euro CBs and their HB&B pals. Like you say Bill, markets do not operate in a vacuum and neither does insider trading! Is it even in the realm of human nature to be an insider at the US FED or the ECB or the US TREASURY and NOT talk to someone about insider info? Soemone has to negotiate these deals and I miss the days when the FOMC meeting minutes were movie scripts! There's a reason Goldman Sachs and the likes are skilled at what they do! It has a lot more to do with WHO THEY KNOW! They don't hand out political contributions because they believe politics has nothing to do with the markets!

F6 ... yes, I agree this is similar to what happened in May 2006. Does anyone here really believe Barrick will be able to close out their hedge book waiting for the POG to come down to $320? Why is it those selling gold cannot sell it down to $320? Why isn't gold still at $35 an ounce if it is such a "barbarous relic" with no value since it pays no dividends or interest? Yet again, who is BUYING the gold being SOLD now?

One thing is for sure the Koreans are tapped out of welfare for American banks. What happens to all these US Banks when foreigners quit buying their shares or lending them cash? They will be taken over Bear Stearns style! And when the banks that take them over are in trouble? Then Paulson, or which ever Goldman employee is the next Paulson, will be back with the "bazooka story'!

Just think how many times you would have prospered had you traded the direct opposite of what Greenspan, Bernanke and Paulson tells the US Congress! I went the opposite to Greenspan and bought gold and silver as many of my relatives and friends were piling into the real estate boom. These guys are touted as the financial and economic "experts", when all along they are nothing more than hitmen for US FED and their pals at HB&B! I still say that if we eliminate the US FED we would eliminate a TON of corruption in one fell swoop! Would the markets rally on that? HA! Where can I buy put options on the US FED? Ahhh ... yes of course its GOLD! You don't ever see any paper medals handed out at the Olympics!

Re: Gold Sales

Bullion sales have been very steady with a slight increase this year, but the return of the jewelery market outside of the US saw a reversal from a downward trend.

But I believe that pricing in bullion will tend to be supported by changes in currency values primarily against the ¥.

imo, the drop in the € against the ¥ is setting in support for the gold price in this somewhat deflationary move:

stockcharts.com

http://tinyurl.com/3x7ywk

A drop in rates in the EU zone, or perhaps moderating inflation in Japan will unwind the € against the ¥, but this will have a similar effect to the gold price as had the drop in the £/¥ trade last year.

It's time to do something more about HB&B. If any of you know a budding filmmaker, I would love to see a documentary on the yachts, vehicles, homes, summer homes, offices, etc. of various HB&B big-wigs. Then, the real story would be showing the documentary to REGISTERED VOTERS and asking them if these people need bailing out? Then send the video to our elected reps. That's not too much to ask, is it? ;-)

David,

Just a thought on VLO. With Gustav, and now Ike, how long will the refineries be down? Add up the days of production lost. Maybe that's why?

BoP - If only I could oblige your request!
I admire kaimu's stab at the jugular, it just makes more and more sense as the travesty unfolds. I've always enjoyed drama, but this is way too dramatic for my tastes. kaimu - I'm with you 100%, holding my insurance policy and ready to update accordingly.

"God I love this business."

Posted by: shark_attack [TypeKey Profile Page] at September 9, 2008 3:39 PM

Amen, bro...;) sighting targets and getting ready for one hell of a party...

Kaimu:

(I wonder if Kaimu's real name is Herman, or Mortimer, maybe Myron). Anyway, nothing you said makes me disagree necessarily. I'm not sure your statements are not congruent with Bill's analysis. HB&B writes the rules, but they also know, if you bleed the host too quickly,it dies. The rules they set are like a fenced in range. The animal runs, and they milk it as it goes.

[Bill Cara note:

kaimu is Stephen. He happens to be the number #1 supplier of orchids and other flower goodies from Hawaii. In addition he works tirelessly here in this blog educating you that the USSA is in deep trouble because of the wanton destruction of its money. Listen to him because this situation is a crisis. The F/F bail-out last weekend is more of the same. At some point, precious metals will be a moon-shot -- at least 1500 on gold within 18-months -- and most people will be scratching their heads, saying Where did that come from? And we'll be saying that kaimu has been telling us all along.]

Lehman is announcing earnings tomorrow morning and "strategic initiatives" from Marketwatch.

QLD down 7 days in a row. Decent news from TXN AH should give the techs a bounce here.

Tit for Tat:

http://online.wsj.com/article/SB122098190668515511.html?mod=opinion_journal_political_diary

nemo, the VLO web site shows that most of the VLO refiners are in safe locations, and that's why VLO would usually spike on hurricane fears (when other refineries are down, the gasoline costs rise and VLO benefits). VLO spiked up on the Gustav news. Today's story seems to be that Ike will not be as bad as was initially feared, and so the decline in VLO would have been legitimate if it had spiked up to $40 when Ike just appeared on the horizon. But VLO did not spike, and so its decline today is not legitimate! IMO...

Fedex raised their guidance due to drop in oil. But I think this is the more important announcement they made at the same time:

FedEx also said it has lowered its capital investment plans for 2009 by $400 million, to $2.6 billion as economic growth worldwide slows.

Learner2-

re LEH- unless soros sold off his 9.47 million shares in the recent spike to the high teens, someone on his team's in the dog house...

http://tinyurl.com/5w8g6u

or maybe he's just buying more...

The implosion in comod and pms seems to signal credit collapse and deflation. It seems like gold mid 600s and silver 9is is more probable based on charts. I pulled the trigger on a small amount of auy and slw at close but anyone else believe this is signalling a major credit implosion and major league deflation taking everything down a whole lot more.

vinod- what's your opinion on gold purchases heading into the indian wedding season?

Placing a buy limit order on GIX.V at $1 and NOT.V at $2.

First time poster,long time lurker. Reading and heeding. Retired. Positive results since Jan 2007 and Jan 2008 which beats vast majority of mutual funds. So have CD's. Would be doing much better if not for UNG recently. Have longer term hopes for that. Did not place a stop. Ouch!

Note on SLW: Have you ever looked at their Yahoo Profile? It looks like it was written by a foreign exchange student. A mining company that buys silver from other mining companies??

ALOHA !!

From a guy who knows many of the HB&B insiders on Wall Street! This is why I read this guy since he is in the middle of the fray, but is not too proud or loyal to tell it like it is! He offers confirmation, in my mind that, the US FED needs to go ...

Bush called the IRAQ WAR "Shock and Awe", I think we can use that same title for the current BANK WARS! Certainly, at some point Americans will either withdraw all their funds from banks or go completely numb and assume a zombie glaze as CNBC announces the 5,000th FDIC bank closure!

READ ON:
Tuesday, September 09, 2008

That Sound You Hear

....could be Paulson and Bernanke figuring out how to explain that Lehman Brothers, down over 40% today, is "too big to fail."

I'm casual acquaintances with a couple of Lehman guys (and I was a guest in one's not-so-humble abode recently). To say they've lived the high life during the past few years would be an understatement. The notion that taxpayer money might be used to buy them anything more than an off-peak bus ticket to the Hamptons is sickening. Unfortunately, there are three things at work right now. One, an election year in which all stops have been pulled out to keep the financial markets as stable as possible, future consequences be damned. Two, a short-timer Treasury topper who came from Wall Street, has a vested interest in it and its culture, and knows many of these executives personally. Three, a Fed chairman who will probably be back in the private sector within the next year or so drawing fat checks a la Greenspan from the same firms whose profits and survival depend on decisions he's making right now (when will Congress close this outrageous post-Fed employment loophole?).

This is starting to look like a not-so-gradual descent into a sort of bizarre latter-day economic feudalism, overseen by a small coterie of unelected and unaccountable statists who have a standing order with the local locksmith for duplicate keys to the national coffers. But the precedent has been set, and every Wall Street CEO has a big red phone on his desk that, when picked up, automatically dials Washington with a pre-recorded message: "Where's ours?"

As I said, sickening.

posted by The Cunning Realist

"Learner2 says - re LEH- unless soros sold off his 9.47 million shares in the recent spike to the high teens, someone on his team's in the dog house..."

Maybe he bought it!!!

Well someone is trying to cover their LEH shares in AH now.. up over a buck so far from the low of $7.21~

Illini- re SLW

my cut-and-paste of bill's comments re the company from october 2006:

October 19, 2006
Silver Wheaton under the microscope, Thurs., Oct. 19, 2006, 12:52 PM
Silver Wheaton Corp (AMEX: SLW, TSX: SLW, US$9.85) Price Target: US$18.00.
One of the sound decisions made by Ian Telfer at Wheaton River before it was merged with Goldcorp was to set up a silver royalty company. This is the purest equity investment in silver production.
As you know, I believe silver is going to hit a Bull cycle high of maybe $18. Most of Wall Street also has higher forecasts, but most are in the US$12 to $13.50 range.
The best precious metals play in the second half of the commodity Bull is going to be silver, I believe, and Silver Wheaton is my favorite. My target is well above any Wall Street analyst's, to my knowledge.
As per their website: "Silver Wheaton is the only mining company with 100% of its revenue from the sale of silver. Having silver purchase contracts with three separate mines, the Company expects to sell approximately 15 million ounces of silver in 2006, growing to 20 million ounces by 2009. The Company purchases all of the silver production from the Goldcorp mines in Mexico and the Zinkgruvan mine in Sweden, together with a portion of the silver production from Glencore's Yauliyacu mine in Peru. Silver Wheaton's unique and simple business model is designed to create long-term shareholder value, providing for strong upside potential with downside protection. Silver Wheaton is unhedged and well positioned for further growth."

Why is SLW the stock to own in this space? That's because Silver Wheaton has been set up as a cash flow machine. All cash flow is free cash flow since the company has no capex. It is not a miner; rather it is a mine finance house that call itself a miner for the optics involved.
In a Bull market scenario for silver, I have never seen anything like it. In other words, there is no mining company in the world that can produce over $100 million a year with seven employees.
Background:
How did Silver Wheaton come to be? The company started in October 2004 by Wheaton River, which soon afterwards became Goldcorp. The parent saw its 50:50 production ratio of gold versus other metals, and figured that the Bull market for gold had arrived, but there was another factor: the growing anti-hedge lobby.
So, Wheaton River management then said they didn't want to be in the by-product (silver) business, but that was just another way of saying that they didn't want to be seen hedging their future gold production, but saw no problem in hedging the silver production in order to give an offshoot company (Silver Wheaton) an effective business model.
In a nutshell, that is the deal here: Silver Wheaton is a reverse-hedge player to precious metal companies that wanted to hedge but knew that shareholders would not let them for gold, so silver went under the radar.
Meanwhile the producer was able to hedge partial production (ie, the silver by-product) and the revenue from Silver Wheaton would be applied to the cash cost of producing gold, which in the lingo of these producers is "lowest cash cost results in the best optics".
This isn't rocket science, so aggressive miners like Goldcorp, Glencore/Xstrata and Lundin have done it with Silver Wheaton. In a Bull market for precious metals, these miners are helped by the cash in hand (and available from forward contracts) that helps in their own acquisitions game, and the shareholder optics (ie, no gold hedging, and lower cash cost) also looks good.
But, many of us know, in the Bull market, hedgers always lose, and reverse-hedgers always win. By not hedging, the cash flow of the producer would have been greater.
So, I'm saying Silver Wheaton was contrived as a vehicle that would boom during a Bull market for precious metals, given that silver and gold prices are almost 100-pct correlated. And that's why Telfer and his staff at Goldcorp sold their shares in Goldcorp and put their "retirement funds," as McEwen calls them, in Silver Wheaton.
Silver Wheaton is in fact a no-brainer in a PM Bull market, and the senior money managers and financial advisors I have been talking to for the past year or two know that I have been saying it privately.
Of course, SLW also becomes an essential trading vehicle because whenever PM prices dip in short-term cycles, those dips are usually violent, and SLW is going to fall faster than the other PM miners.
When I discovered from Rob McEwen that Goldcorp management had sold their personal shares in Goldcorp (and go to SLW), I decided to drop Goldcorp from the Cara 100. Goldcorp is now an acquisitor, and I am concerned about the issue of shareholder value when I see excessive premiums being paid to acquire production " particularly when management has no skin in the game except share options that they quickly sell.
But silver oz will come to SLW with no dilution, no capex, etc. Hence, no brainer.
The Silver ETF (SLV) is now available and competes with SLW for the interest of risk-adverse investors who'd rather hold the bullion. But here too, I'd rather hold SLW. The iShares Silver Trust is a product that doesn't have the leverage of SLW on the upside or the protection (through contracts) on the downside.
Besides, as Motley Fool has pointed out, taxation on the gains of the SLV ETF will be at the higher rate charged on "collectibles".
SLW will out-perform all the silver miners and the silver ETF on way up, but also on the way down. Thank goodness this is a PM Bull market.
The Denver Gold Forum (Sept 2006) presentation shows that the company has a simple investment model: they have contracted to buy all silver production at a fixed price from three solid (long-life, low cost) mines, and they buy at a protected low price and sell at higher spot price.
I think SLW should be valued not as a miner but as a royalty company since there is no capex or miners or country risk involved and there is no financial risk if there is a shortfall of contracted production or the price declines below 3.90 (in that event, the company just won't make profit).
The bigger story here is that Silver Wheaton intends to grow through new partnerships, eg, producing mines and development projects: SLW funds in advance in return or fixed price opportunity (ptr hedges silver). Coeur d'Alene has done the same silver-streaming deal with two Australian miners, but Silver Wheaton says they too had the chance to get those deals, and passed. So, by being the biggest player in the silver industry, Silver Wheaton is going to see all or certainly most of the deals, and they'll pick off the good ones, albeit at increasingly smaller profitability margins now that the other miners and their shareholders have come to understand what this business is all about.
Silver Wheaton is a cash flow machine, and that cash will also go into strategic investments like Bear Creek Mining. Silver Wheaton can finance small mines into production and earn the silver production. They already purchased 19+-percent of Bear Creek Mining for this purpose. Bear Creek already owns a silver resource of 300+-million oz, and management expects that figure to grow over 500 million oz. At silver prices of US$12, 14, 16, 18, 20;that is a valuable holding, particularly on a SLW fully-diluted share basis.
And the point is, management is going to do that over and over with every prospective precious metal miner that comes along with significant silver production and no worry about hedging, and they'll negotiate their fair share of these deals.

To sum up: what I really like is the downside protection " Silver Wheaton can't lose money if the silver price drops. They are in the financial business, not the mining business.
;Certainly a worthy Cara 100 company.

Excellent interview on the Charlie Rose show last night!!

09/08/2008 Floyd Norris, Mohamed El-Erian, Gretchen Morgenson, Nouriel Roubini

http://tinyurl.com/Charlie-Rose-Fannie-Freddie

spot gold at 767...
silver on the verge of hitting a 10 handle...

http://tinyurl.com/cq41

"Ladies and Gentlemen, (Institutional Ownership) has left the building?"

ORCL:
http://tinyurl.com/58v8hs

X:
http://tinyurl.com/6f7sgp

2nd, I'm no expert,

But Silver with a 10 might be capitulation. Look at the Daily RSI today in the 11's . . . And, lemme guess, who can buy it tonight while America and Canada sleep? Riiiiiight, HB&B. ;-)

Blowout:
I have an account at apmex.com
I would assume I can buy gold 24/7, is that not correct?

BP- hope so...can't say i sense capitulation, or much fear for that matter, right now...it's usually when i'm afraid to buy that i 'know' it's time to jump in...maybe hulbert will come out with an update tomorrow on gold-timing sentiment...

2nd, ever since a discussion was started here about the most fearful trades being the right ones, I've monitored it, and darn it if there isn't something to that theory.

stev1183, yes, you can buy gold 24/7, but I meant that a lot of traders will be asleep if we make capitulation lows tonight.

I'm signing off with this post, but I just want to ask the community a question implicated by Roubini's comments from: Posted by: Grantmi at September 9, 2008 7:32 PM:

http://tinyurl.com/Charlie-Rose-Fannie-Freddie

In the 1980's, US account deficits were run. They were funded by Japan, Germany, GB, etc.

Today, we run defecits. They are primarily funded by Russia, China, and Petrol States.

Query: What is the difference in cost/benefit analysis for the parties involved TODAY?

Posted by 2nd_ave: "BP- hope so...can't say i sense capitulation, or much fear for that matter, right now...it's usually when i'm afraid to buy that i 'know' it's time to jump in..."

Maybe you are just a very brave person, 2nd_ave. :) Or maybe the fear depends on how much SLW you have already. I have a lot now, and I am getting worried. If I had a little now, I'd be drooling to buy much more. SLW is at its lowest price in 2 years, so EVERYONE who bought in the past two years is underwater and worried.

How many times can one stand losing their life savings in the stock market?

I guess we'll have to see.

2nd_ave and Chickenpookie:

Re: Metals and Miners and GDX

A belated Thanks for the responses; I had to run at the market close. And the post on SLW is a keeper.

I jumped in today by adding to positions in GDX at 27.98 and GXEXF at 0.993
Started a position in SLW at 8.13

I'm early, I know. Impatience is my flaw.
Live and learn.
But that's why it's called scaling in on weakness, right?

Have a good night

ALOHA !!

GROUND REPORT
I just got a fax from one of the oldest and most prominent tropical flower growers here on the Big Island. In fact their PO BOX number is "1"! They inform me that they have gone out of business and this Friday will be their last day.

I called and asked them what their plans were and they said they already sold off their customer base and they plan to sell some of their plants and let the rest rot! Too much overhead and some bad planning(debt) and dwindling sales along with price inflation in everything from cardboard and chemicals to gas and electricity. The two owners are in their 50's and they said they were looking for work! Hummmmm ... they were one of my local customers, not a BIG one but sales are sales until they aren't!

If I hold on long enough I may end up being the largest grower on the Big Island. Not through any fantastic business acumen but simply by "attrition" ... the last man standing! From a monetary strategy that is how I am positioned. I doubt if any of these nursery owners even have the faintest idea what monetary velocity is much less the word G-O-L-D! How many small businesses have been planning for the Goldilocks outlook of CNBC and Ben and Hank as their bottom lines sink into a quagmire of debt! Unsecured ... secured? JUST WALK AWAY! It won't matter ...

In Australia there is a phrase that describes a person who wanders about the outback ... They say he's "ON WALKABOUT"! A lot of US homeowners and small business owners will soon be "ON WALKABOUT"! Walking away from their debts. That leaves the banks holding their own worthless paper!

IT ALL WORKS UNTIL IT DOESN'T!

Okay, I couldn't stay away.

Kaimu, I'm a small-business consultant. I'm helping business owners nine-ways-to-Sunday how to manage their non-paying customers and their increasing overhead! It's the same story, different song here on the Mainland.

And, as far as walkabout, it's a FREE trip for the walk-abouters! What bank, in its dishonest and evasive mind, is going to report a mortgage default in this climate? Better to stick the head in the sand like an Ostrich and act like the folks living rent-free in the defaulted homes don't exist!

And, economically, I understand the argument that folks won't trash a home they live in rent-free while they will trash a REPO . . . but I'm just saying . . . ;-)

Excuse my ignorance on the US system!

Isn't there some kind of repercussion of some-one's financial credit or possible ceasing of other assets if someone "Jiggle Mails" their home back to the loan/bank company!

I can't believe these people get away with no penalty!!

David- just being honest...intuition has a mind of its own-> i don't need to have a position for it to kick in...two instances in the past two days come to mind- (a) FRE at 1.02 at the open-> that was a buy...i had no position, and was unable to take one; but i clearly recall watching the gap-ups all the way to 2, afraid to (correctly) hit the buy button for most of that 2-3 minutes...(b) booted up at work this morning and immediately -0.22 crossed my mind for Nymex NGas futes (I did have a position in HNU.to)...it was -0.23...and maybe b/c I had a position, i further sensed a -0.40 which in fact crossed the tape a little later...i'm not telling you all of this b/c i believe in clairvoyance or b/c i watched X-Men again recently; when it comes to picking up negativity and how/the extent to which it might affect direction and pricing of positions i follow, any intuitive flash that happens to cross usually turns out right...should note that i have little to no influence on whether/when a buy/sell/green/red signal crosses my mind...would be interested in hearing Vad's opinion on this, as it's all sounding like a lot of bull---- on second reading...LOL

QT,

Hope you're right about $60 on QID.

You can't eat computer chips (too crunchy) or heat your house with IPods.

Sorry for the late response, I teach from about 2:30pm to 9:00pm EDST.

See you in the Bahamas :^)

Regards

David- btw, Colin Twiggs pegs support for gold at 770...if it doesn't hold, then 700 is the target:

http://tinyurl.com/54qccl

a 70-point drop in gold in a day or two would almost certainly qualify as capitulation...not necessarily hoping to see that, but if a shake-out is what we need to reverse direction, i'll take a "V" bottom over the drawn out scenario we've had with financials..

..keep in mind also that even bill is getting ready to buy...so you can't be too far off the mark ;)

Speaking of Robin from todays Charlie Rose show last night.. excellent post on his site today!!

"Comrades Bush, Paulson and Bernanke Welcome You to the USSRA (United Socialist State Republic of America)
PrintShare
Delicious Digg Facebook reddit Technorati Nouriel Roubini | Sep 9, 2008
The now inevitable nationalization of Fannie and Freddie is the most radical regime change in global economic and financial affairs in decades. For the last twenty years after the collapse of the USSR, the fall of the Iron Curtain and the economic reforms in China and other emerging market economies the world economy has moved away from state ownership of the economy and towards privatization of previously stated owned enterprises. This trends was aggressively supported the United States that preached right and left the benefits of free markets and free private enterprise. " continues on link

http://tinyurl.com/comrade-Paulson

*************

thought I'd add my 2 cents worth to this!!

http://i35.tinypic.com/2wn0odz.jpg

"....If I hold on long enough I may end up being the largest grower on the Big Island...."

Be it so, and may one person's misfortune, appear as what it really is, which is another's good fortune.

That is the essence of this thing we do, which is, itself, the essence of all life.

Ok that and pretty young girls who think they're fat and ugly:)

Bill,

You say gold's going to do a moonshot one day, maybe to $1500.

What are some possible preconditions (economic, political etc) that will signal to us that this moonshot may be imminent?

Banks & Consumer Credits - can we trust their earning reports?

Interesting, real personal experience with Capital One in the past two weeks. I missed my August payment (a meager $200) due to an auto-pay clitch with my bank. COF slashed me with 24.99% interests rate (up from 1.99%) and bunch of other fees, let along nasty letters. Well, Guess What? COF called today to offer me a check to pay off my "min payment" to reinstate my "good" standing. But, they can't change the "computer" to erase the outrageous interests they nailed me with. Well, why would they do that? I can only come up with one explanation - to effectively manipulate the "credit defaut rate".

shark or anyone -I still dont see how gold can do a moonshot under the crushing deflation that is now occuring. Once the black whole of credit contraction intensifies would the moonshot be one of safety. Treasuries are becoming more questionable daily with tainting of the fed balance sheet. Thanks from a newbie

side note opec announces cuts

http://www.breitbart.com/article.php?id=080910011820.ziisc09k&show_article=1

Grantmi

Yeah, there's a credit score penalty if you jingle mail. It's a mark on your credit history for 7 years. Having said that, with real estate headed downwards for the foreseeable future, why not just rent, or, by the time your credit is o.k., maybe you can pay cash for whatever the Real Estate values will be by then.

2nd
do not know about gold demand

Nemo...

so what about your other assets! They're untouchable!!

or the interest that US consumers are able to write off on their taxes. Is that all refundable if you walk awaY???

My point is.... Nouriel is saying that this walking away from your home.. is only going to have more cause and effect on the US housing crisis!

Now that the FED owns FANNIE AND FREDDIE.. maybe they'll change the law to make it illegal to JUST walk away from you home with out effecting your other assets and tax credits on the home.

Yeah, basically. It costs the banks a lot of money to go after you. Considering the loss they're already taking on the property, it just adds to the debt. Not to mention, are there any assets to go after. For some, yes, for others, no.

Grantmi,

It's already against the law to walk away (hence illegal); but that doesn't make it uneconomical.

The ironic thing is that businesses are allowed to walk away from deals all the time--it's called an "effecient breach" of contract.

Woe be on the individual, however.

nemo,

the banks might have inquired about the assets prior to loaning the money.

Sept. 9 (Bloomberg) -- Lehman Brothers Holdings Inc. said it will announce third-quarter results and ``key strategic initiatives'' tomorrow, a week earlier than planned, after the stock fell a record 45 percent in New York trading today.

That's true BoP, but many of the walk-aways are from the toxic vintages with little underwriting. I believe also, retirement funds are off limits when pursuing assets.

Just returned from the appliance store to buy a wedding gift for a friend of mine. I was buying a toaster and as a bonus, they threw in a bank!!!!

2nd,

doesn't sound like bull to me at all. Let me copy/paste a quote here:

"In my opinion, most of contradiction around intuition’s role in trading arises from misunderstanding. Many think of it as of some kind of sudden revelation about the future. They expect intuition to be some kind of tip giver. This isn’t true. Newer traders with lack of experience won’t get true intuitive impulse. For them it’s going to be rather hoping or wishful thinking that they will mistakenly take for intuition.

What is intuition in reality?

As we gather experience we reach some critical mass of it that results in automatic reactions. The same way we learn to drive; at first it takes thinking of each factor impacting our decisions and thinking of each action we take. The more we drive and the more road situations we face the less we think. At some point we find ourselves driving from a point of departure to the destination point without even noticing the distance, intersections, or other cars. Does it mean we didn’t see them? Of course not. We sure did, we just didn’t have to think of them. Unless some extreme situation occurred we were able to drive on autopilot. Our brain established series of links between situations we face and reactions we take.

In exactly the same way the more we trade the more of links of this kind get established in our brain. Certain situations start looking familiar enough for us to react on them without thinking. The number of familiar situations is growing. The less the number of the situations that look totally new and unfamiliar for us, the more confident we feel. The market ceases to be great mystery. It becomes just a set of situations – most of them familiar and we know how to act facing them. Some of them are not recognizable and we just stay away, observing and learning.

As you can see, intuitive impulse works like “getting there without knowing consciously how you got there”. You are going from A to E without going through B, C and D. But B, C and D are still there and the process of going through them is still there. It’s just that this process ceased to be conscious thinking. Thanks to collected experience you just know how to get to E once you recognized A.

Is it possible to develop trading intuition? It is, and there are great books on the subject that helped me greatly. But there are also traps on this way. You cannot push too hard; you cannot try and make the intuitive impulse come to you. As soon as you attempt to do that you won’t be able to tell a true intuitive impulse from wishful thinking. It comes to you as a reward for the correct state of mind – clear, non-opinionated, open, calm, relaxed and focused. When it comes you just act, act without second-guessing or hesitation.

In previous chapter we discussed an edge. We saw that in order to obtain it one has to trade for a considerably long period of time, going through different market situations and sorting them out from the point of view of what he is feeling comfortable with. As a trader does it, one more process occurs behind the scene. This is a process of development of the correct state of mind that opens you for intuitive trading. Eventually a trader comes to the point where both processes merge, and this point constitutes a new level of trading career – a level where a trader makes consistent profits without being stressed. Trading becomes effortless, easy, fun. Everything becomes clear and simple. The way to this simplicity lies through many complications but when they are behind you they become nothing more than things to laugh about. This stage is any trader’s dream."

End of quote. Sorry for length... I just like the author (grin)

shark - this may be along the lines of Bills thinking?

We shouldn’t dismiss entirely the possibility that all the bailouts fail to revive credit growth and that a deflationary secondary depression is now under way," writes Dr.Marc Faber in the latest edition of his highly respected Gloom, Boom & Doom Report.

"The sharp deceleration in credit growth, with rising default rates across the board, could suggest that debt liquidation is now occurring...[but] Ben [Bernanke of the US Fed] and Hank [Paulson of the Treasury] may replace private debt with government debt in order to bail out the system.

"That such a bailout will diminish the purchasing power of the Dollar even more (it should be highly inflationary) is clear...

"Under this scenario, renewed US Dollar weakness and strength in commodities – in particular, in Gold – should reappear."

ALOHA !!

ON CREDIT CARD WALKABOUT
I know someone who got into trouble with the IRS a few years ago and could no longer afford to pay credit cards(unsecured debt)off so they just quit paying and never called the credit card company. They dropped their land line phone and got a disposable cell phone and essentially just disconnected themselves from the credit game. They had no mortgage because they paid off their home. They made good on the IRS debt, but never ever paid a single cent back to the credit card companies. They never filed bankruptcy or even did a debt settlement with the credit card companies. Essentially that credit card debt is in limbo some where after being sold and resold down the debt collection game that banks have going. Kind of like pin-the-tail-on-the-donkey debt ... who owns your debt now? Delinquent credit card accounts get sold off to other companies who pay pennies on the dollar for the right to settle the debt. Packaged delinquent credit card debt like packaged sub-prime mortgages.

Where you get into trouble is when you try to actually be honest and settle your credit card debt with your creditors. If you pay off a settlement then the unpaid balance gets reported to the IRS as income to you on a 1099 form!! If you just walk away and go on CREDIT CARD WALKABOUT you have "settled" NOTHING and so there can be no reporting to the IRS and therefore no IRS tax liability. An example is:

BALANCE OWED = $12,000
SETTLEMENT = $8,000
IRS 1099 INCOME = $4,000(added to your income for that year)

What is up for grabs is how long this WALKABOUT benefit will last under the current environment as more and more people go on WALKABOUT. It seems DEBTORS PRISON would be a solution. Yet, at what cost do banks and government want to go to to implement a costly program to search out errant debtors and prosecute and then stuff them into already over crowded prisons? LIABILITIES ARE JUST THAT. A US citizen who is in jail is a US citizen on government welfare living in government sponsored human warehouses. How productive is that? Believe me the cost to warehouse a person in the State Of California prison is astronomical. I used to build new prisons in California! First you have to build a prison (cost = $300k per cell). Then you have to pay guards and feed them and pay for administrators and it ends up costing some $40,000 per year per prisoner.

WAIT!!!!!! WOW ... $300k for a small prison cell and then $40k per year for warehousing costs. Why not give each prisoner a foreclosed house and pay them $20k per year to just sit at home watching TV monitored by a ankle bracelet! It would be cheaper than actually imprisoning them! HA!! How many prisoners in the USA? More than a million ... We imprison more people than any country in the World! DEMOCRACY ... what a GREAT system! Forget that ... give me a REPUBLIC ... PLEASE-E-E-E!!!! And our goal according to the Reps and Dems is to spread "democracy" all over the World! Who the heck can afford this corrupt system? We can't even afford our own democracy so how do we expect Africans or South Americans to afford it?

Man ... the US TAXPAYER has been hosed for so long its to the point we don't even recognize a GOOD HOSING any more! Hence FNM and FRE! EYES WIDE SHUT!

ITS THE MONEY STUPID !!!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY and this government gets more dishonest by the day!

This all smells like a monetary crisis ...

Moving my sell limit order on SLW to $9.1 for the shares I bought at $7.75 and $8.35. It is hard to believe that SLW will not reach $9.1 within the next month, so selling below that level does not make much sense.

Kaimu
I like to suggest correction on your post
"---up costing some $40,000 per year per prisoner"
-- up costing some $40,000 per year per customer?

"S&P said Lehman's liquidity is ``sound,'' noting the firm has the ability to borrow from the Fed through a lending facility the central bank put in place for brokerages after the demise of Bear Stearns. "

Nobody else finds this really amusing? They are sound because they can borrow from the Fed.
I bet they did not sleep last night trying to engineer a way out of their mess.

re: SLW

Market doesn't care what anyone believes or thinks. Only thing one can do is control losses. An investment is a trade gone bad.

GL.

LEH up 25% in pre-market ($7.60 TO $9.60) waiting on the third quarter financial report this morning. Who knows how they are going to spin this bad news shortly...

Good morning.

Here are your Cara 100 Ratings Changes:

AET - Upgraded to Neutral @ Banc of America Securities

NUE - Upgraded to Buy @ Soleil

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

Have a great day.

LEH loss of 5.92/sh, cutting dividends, why are the even paying dividends?

OPEC to Curb Oil Output:

http://tinyurl.com/59prla

Doing the exact opposite of Cramer trade
and advise will make a fortune.

keep in mind that White House or fed may be using OUR taxpayer money to try to prop up the market until November election

CP,

LOL toaster/bank joke!

Good way to start my day.

Kaimu,

Your story about credit cards connects with something I've been wondering about.

We hear that nobody knows how much contaminated subprime junk they own for sure. Is that just due to valuation question or have they played the old shell game so fast and furious they aren't sure who has which mortgages?

I have heard there are more people in default than reported because the lenders don't want the property and don't want to add to their "nonperforming loan tally.

One of my sons has an ARM which will not reset for nearly two years, but has no problem paying. His loan was sold to Fanny. My other has lost his job and has worked part time for almost three years. His is with Chase.

Just wondering how long it might be if either quit paying.

Looks like the Russel 2000 is about to go belly up.

http://tinyurl.com/6fkc66

Note the two lines EMA(13)[blue line] & EMA(34)[red line]ara about ready to cross which is a reliable signal for a trend change. The Russel 2000 is coming off a nice summer rally because of the strength of the USD. Looks like we could be heading for a big sell off. If so then support will be at 650-660!

[Long QID/TWM/SKF]

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