India throws open a $100bn nuclear bazaar

The anticipated US$100 billion worth of nuclear power infrastructure deals are buzzing across India Inc after India last week became the only country to be allowed to trade in nuclear material without signing the nuclear Non-Proliferation Treaty (NPT).

Nuclear power plant infrastructure companies from the US, Russia, France and Britain are expected to fight for chunks of India's fat nuclear business pie. Investments worth more than $20 billion could now be made in infrastructure related to nuclear power plants, as India moves towards its goal of generating 40,000 megawatts of nuclear power by 2020.

http://www.atimes.com/atimes/South_Asia/JI11Df02.html

Washington may have plugged Asia's equity outflow

With its unprecedented takeover of Fannie Mae and Freddie Mac this week, the U.S. government may have also bailed out Asia's markets by staunching a heavy flow of equity capital out of the region.

http://tinyurl.com/62kpvd

Mmmmh???

SKF bolted out of the gate this morning and is now keeling over. Gold has barely moved, even with Lehman doing the death flop.

If you like to follow HB&B's stock buy-sell recommendations, take a look at an image tracking C's recommendations on FNM: http://tinyurl.com/6k39bg

Lehman Brothers Holdings Inc. (LEH) announced plans to spin off to its shareholder the "vast majority" of its commercial real-estate assets, sell about a 55% interest in its investment-management division and slash its divided 93% as it also predicted a fiscal third-quarter loss of $3.9 billion.

SiO2 - Thanks!

slw is still weak and I still hold my puts.

USO is rising. Might be a good time to buy more puts?

hulbert comes through:

http://tinyurl.com/5fx9dn

we do NOT have capitulation in gold

"In recent weeks I have written several columns wondering what it would take for the editor of the average gold-timing newsletter to give up believing that gold was in a bull market. And it would appear that we still don't know.
That's because the HGNSI didn't budge at all on Tuesday, despite bullion's fall, remaining at 27.9%. To put that level in perspective, it is higher than where it stood in early August, when bullion was trading above $900 per ounce.
From a contrarian perspective, the bottom of gold's decline will come when enough of the gold timers throw in the towel. Ironically, from that perspective, the gold bugs' bullish persistence is extending the agony and postponing that eventual bottom."

This will probably stir up a bit of a hornets nest because I'm going to ask a question which could be viewed as racially biased. From my perspective, its asking a question on how the race issue may have been used manipulatively to, if not give birth, at least give steroids, to the recent credit bubble

Correct me if I'm wrong, but didn't the flood gates open with the Community Reinvestment Act of 2003? Didn't that act come out of the call for greater minority participation in the American Dream of home ownership? Of course, this was merely the headline of the act that opened up the spigots to everyone and allowed a broad range of people to gorge at the trough-all in the name of racial equality.

Vad- thank you for your 1202a post...well thought out, nicely written..

DV (Darth Vadym)

What is your prognostication for the day?

Lots of words today from Bill, leaving me confused as usual...

If you're confused and looking for a task, Pook, help me find a good entry on HNZ and GIS today. :)

nemo,

no reliable read by me. Working assumption is, oil continues down. Right now the market, however, is much more about LEH than it is about oil, and LEH looks wierd. I have no clear comprehension why it shot back up to 9 after testing 7 and under. Sidelines and watching for me until something recognizable appears.

2nd... that was just a copy/paste job... :)

JohnE, timing to short oil may be a little tricky in the next few days. The effects of Gustav may show up on this week's oil and NG inv. report, and the effects of IKE on next week's. Straddles may work best here.

Mackinaw - You've made my day in less than 50 words...

nemo, easy credit was distributed regardless of race or ethnicity or age or creed or one's disposition to consider blaming a crisis of historical proportions on minorities.

Of course, that won't stop people from trying.

The CRA has a host of problems, documented pretty well by Tanta over at the Calculated Risk blog. The foremost was the fraud that occurred in artificially elevating prices.

Your question is only racially biased to the extent it infers that minorities are somehow responsible for the fraud that resulted from the CRA. I'm guessing we're going to see a lot of that in the next several weeks as the Republicans look to inflame racial tensions to steal votes.

That's why a victory for Obama would mean more for this N2S from the far So. Side of Chicago than simply reestablishing competency in the White House. It would be stinging defeat to the forces of racism in this country. And I will rejoice when that happens.

Blowout Preventer: w/respect to your post last night about cost/benefits of financing the US deficit today vs. 80s...

I haven't read up on the 80s dollar crisis in detail. However, for the last several years, it has been in the interest of China & the gulf coast states to finance our defecit (well, China @ least). Namely, for currency management. For China, this sustains (sustained?) the US consumption of Chinese products, and prevents (prevented?) appreciation the renmimbi. Roubini believes this situation ("Bretton Woods II" system) will unwind. By maintaining the peg, China accumulates our treasuries and this has resulted in Chinese domestic inflation. Now, as the Chinese central bank relaxed their peg to the USD, the renmimbi has begun to appreciate. The US doesn't want the gulf coast states to relax their peg, or reprice oil in a currency basket: the price we'd pay for oil would skyrocket. Essentially, the US wants it both ways, we tell China one thing & the GCC another.

As for the cost side, well: 70% of the entire world's reserves are in USD. This is a higher % than in the past. It is in no central bank's interest to have a dollar crash. Will we get one? The first central bank to get out of dollars wins... then we would have a run on the dollar.

Long story short, I need to read more about the 1980s USD crisis.

Nemo: I'd wager the floodgates opened with Greenspan holding the fed funds rate so low for so long, or the unfettered credit expansion across the financial system, or the lack of oversight, etc. Not the Community Reinvestment Act of 2003.

In other news, I picked up UYG @ the close yesterday, placed an aftermarket limit sell @ 1% net profit, went to do some errands. Came back, it had executed. In hindsight, that might've been stupid.

Back to all cash.

number2son: I think you missed my point or I wrote it unclearly. I believe the banner of race was used to amplify this debacle. As I said, everyone ate at the trough.

Fatty - Which was stupid, buying or selling UYG?

SiO2 - Thanks, that thinking was completely off my radar. I was thinking a short term pop in oil due to Ike nearing the US/Mexican coast.

CP: both! It might've been a bit too much of a gamble, I have to try to stop doing that.

After that kind of pounding & a sell off into the close, I figured an afterhours bounce would be likely. But how likely? If it's 50/50, I'm just gambling. I should've kept my position size smaller.

I just made 15% in FNM in less than 5 minutes.

nemo, I understand and I don't agree that race played a role in this at all. As you say, everyone with a pulse could get a loan they couldn't afford. The CRA abuses were a symptom of a large problem.

But is that gonna stop the Limbaugh's of the world from insinuating that this was primarily because Uncle Sam wanted to help "urban" people own homes? And now, he'll harrrumph, look what's happened!

Vad- true, but assuming you copied and pasted something you wrote...

Greenspan and his halo left whiskey dents all over our Cadillac!

Fatty:

No doubt, keeping interest rates down kept the money flowing, but I think the 100% financing started with that act, and I know the white guy Mozillo was trumpeting it's virtue. I assigned no responsibility to minorities, just to the Act, which is why I said it would stir up a hornets nest.

Thanks Bill, went long SKF yesterday. Bad timing left me with a $108.9 basis. Rather nasty pre-announce by Lehman this morning. I was sort of wondering where SKF would go but the trend has turned up.

Making money against HB&B and the FED in spite of spin and obsfucation is rather nerve wracking.

shark- what's the problem...you should be making 15% five times in 5 minutes...;)

Gutsy move shark!

N2Son,

It may be symptomatic of how race can be used to make very bad decisions in the name of equality.

One could argue, and this is more class than race, in the name of LBJ's Great Society,Congress was allowed to raid the Social Security trust fund. Looked on 40 years later, that was a piss poor decision.

Wikipedia gulf platform jpg - just for info http://en.wikipedia.org/wiki/Image:Gulf_Coast_Platforms.jpg

Si, brass stugots, he's got

Just curious... is the Wednesday UAUA trade no more?

Answer to my question: LEH keeps dividend so that pension funds keep the stock as per their mandate.

For those of us with short memories, here's former Ohio Republican Congressman Oxley reminding us that the Fannie/Freddie debacle could have been avoided:

http://www.ft.com/cms/s/0/8780c35e-7e91-11dd-b1af-000077b07658.html

2nd... yeah, told ya I liked the author :)

QT: stick a fork in UAUA

nemo
:-)
Just curious..there hasn't been the usual Wednesday chatter on it..

miners catching a bid...

Yeah, UAUA is like Shark's girlfriend from LAST week.

Nemo, N2S: To work we would have to have the Republican controlled Congress be thinking of helping poor minorities.

I submit that unless it was to screw them over, that that idea is a total impossibility.

Republicans act in the interests of their constituencies, which with the exception of a few guys named Tom, is white on white.

I think it was simply too much cheap money Thanks Big Al?) needing a place to go to work.

KB, Pulte, DR Horton all up a tad

How about Cameco? After the 6+% drop yesterday, catching a bounce?

Of coures the FRE/FNM debacle could have been prevented... And many tried, but HB&B wanted into the cookie jar and got their way... That's really why it happened, the entire episode was engineered.

UXG @0.98 last sale price

it may finally trigger my Stop Loss set @ 0.01

nemo -

The question is who pushed for the Community Reinvestment Act; I don't know. It could easily have been HBB using the rubes who don't understand money. But the credit crisis was brewing for a long time before that. 2003 was when the prime market was saturated and more victims had to be found on the margins to keep the credit machine expanding.

Geez guys, Both sides work for their constituencies. I just made a point of how race was used as a cover for greed. It allowed all people of a class (working poor, lower middle) of whatever color get into properties they could not afford under proper underwriting standards. That simple.

It's funny...people discount information because it comes from Limbaugh, or Cramer, or...info is info, it's our job to see through the coloration either they assign, or we assign because of our own biases, WHICH WE ALL HAVE!!!

As I have often said, I am relatively apolitical because they all suck. As a classically trained student in Taoist philosophy, I try to look at the mechanisms of society much as Darth Vadym looks at the market-as dispassionately as an emotional creature can.

O.K. O.K. can somebody now give me a good trade...:)

MOAB. I think it was a combination. Mozillo was right there, so was Jesse Jackson, and don't forget the legislators who got sweetheart deals from countrywide.

Craig:

I think Congress is currently democratically controlled.

Remember NOT.V? Getting crushed. 1.82USD right now

Gross Profits:

Bill Gross and Pimco reportedly made a profit of eight billion dollars in one day on the bailout of Fannie Mae and Freddie Mac by speculating on their bonds.........

.........Bill was on CNBC today touting the attractiveness of these instruments for general consumption. Time to book profits and find a new wealth transfer angle to play Bill?

Jesse's Café Américain

BP, take a look at FNC when it resumes trading. It just reported drill results: a whole lot of... nothing.

SLW- adding at 8.14...

Oil supply inventory report at 10:35am.. any guesses?

Nemo & Number2son,

I think the fraudulent and irresponsible loan agents were equal opportunity oriented, they were willing to push anyone who was a neophyte borrower. I went with my son and the guy kept urging him to borrow more — far more than prudent.

My guess is more minorities would have less borrowing savvy.

Couple with the hype on TV and print — "Everyone deserves the American Dream of home ownership," those uneducated or experienced were easy prey.

Nemo & Number2son,

I think the fraudulent and irresponsible loan agents were equal opportunity oriented, they were willing to push anyone who was a neophyte borrower. I went with my son and the guy kept urging him to borrow more — far more than prudent.

My guess is more minorities would have less borrowing savvy.

Couple with the hype on TV and print — "Everyone deserves the American Dream of home ownership," those uneducated or experienced were easy prey.

You guys are funny. So what are you all up to today?

Nemo,
This was your question: "Correct me if I'm wrong, but didn't the flood gates open with the Community Reinvestment Act of 2003?"

In 2003 it was the third year of Bush's term with a Republican House/Senate.

I have no idea of the politics of it, just that I'm not sure race was the central point.
They were after *everybody's money*!

It has to be one of the biggest pump and dumps of all time....on a national scale with the largest economy on earth? Yeow.

Looks like gold is at the Rubicon (770); to cross or not to cross.

Whither now, Caesar?

ALOHA !!

ON LEH SPINOFF
WOW ... dividends down to $0.05! Hummm ... where will mutual funds, pension funds and insurance companies go to get a decent return now? BSC dividends gone ... FNM/FRE dividends gone ... GM anf F dividends gone ... now LEH. There is a trend here!

Okay the REI spin off ... Let me put it in laymans terms. Its like me selling you a car without a motor and I finance 80% of it!

Here it is ... "They are going to spin off REI Global to facilitate the separation of CRE assets from core Lehman and are transferring a portfolio of assets at marked-to-market prices that reflect all existing writedowns. Lehman will capitalizing 20-25% of REI Global and will finance 80% of the debt of the spin-off. This is not a complete hands-off transaction as they want to keep some upside for Lehman shareholders. However, the debt financing is a concern about this being a true spin-off."

How is it a spin off when LEH still owns 80% of the debt? If I recall MER did a similar deal where they financed 75% ... Does everyone really believe that just because LEH jettisoned JUNK that the JUNK will not be JUNK any more? Who will buy this spin off?

Here is the part that will save LEH ... They are a sitting member of the US FEDERAL RESERVE BANK NY. If the US FED allows LEH to fail then that means all the rest of the rats on the ship will become very nervous and will wonder if loyalty is misplaced. A LEH failure would set a huge precedent among the US FED member banks! I would love to see that happen because then that old saying "No honor among thieves" comes into play in a BIG WAY! Plus politicians would have a lot less contributions from the banking sector! Would the US CONgress be so supportive of these bank bailouts if the banking sector quit making political contributions? Its the WHAT'S-IN-IT-FOR-ME syndrome!

Craig:

I agree, that's why I posted the caveat first. It used the banner of race/class as a basis for the feeding frenzy. Isn't it funny (not really) there are certain issues about which you just can't have a factual discussion.

Same for LBJ.(Great Society) One could argue the same for the defense industry. (Have to have a strong national defense)

SLW/GG/GDX now all at 40% allocation...

Rumor posted on tickerforum is that WaMu will be taken over by FDIC on the 19th. Why the 19th? After options expiry.

IMO, one of the big headlines of the day.
On Bloomberg: "Buffett's Berkshire to phase out bank-deposit insurance beyond the FDIC limit."

Pulling the fat away from the fire....

How about an energy policy? How about extending the stalled-out renewable energy tax credits? Oil will turn around at $80, to the surprise of many!!!

Very Much appreciated Si02--

Gold stock to gold ratio.
I ran a chart of a ratio xau to the gold price back to 1998. The current ratio is .145 - this is not only a historic low (to 1998) but a low that is substantially less then the prior low of .16 in October of 2001. Asuming a reversion to mean is there a way to play the revision without requiring a large margin position? You could buy GDX and sell GLD but the broker would require a deposit of probably 50% of the GLD position. Same problem with options.

Any Ideas. Thanks.

ALOHA !!

The entire system that holds the US EMPIRE together is based on the "WHAT'S-IN-IT-FOR-ME" syndrome! Its all about making more and working less! Really that's what keeps the stock market going isn't it? All these traders, even ones here, want to make money with the least amount of effort. THAT'S THE GOAL!

I can tell you that making the most amount of money with the least amount of labor output seems to drive the entire AMERICAN DREAM! I know that is what drove about 90% of the IBEW union workers that showed up on my projects!

This article from MISES connects some dots that seem very remote and distant to what most of us here on this BLOG encounter, but still the US TAXPAYER is on the hook even for traffic tickets! I recall saying to my ex-business partner that we had to position ourselves in a lucrative US TAXPAYER funded niche, otherwise our survival rate will decline precipitously. Believe me electrical contractors are a dime a dozen! Any journeyman with a fancy truck and a fax machine can get into the biz! Well we did find that niche ... the US public school system and the California State Prison system. Will the US government and taxpayers ever quit funding schools and prisons? NO WAY! Those are the two most essential spending programs the government has going for it!

Read this article and see how the US TAXPAYER is on the hook in a BIG WAY even for routine traffic violations. There have to be courts ... I will attest that by far the largest construction project in Hilo at the moment is the new JUDICIAL CENTER building. My old friends from California, SWINERTON WALBERG, are the general contractors on the project. I worked with them many a time on California State prison projects! Hummm ... so there were no Hawaii contractors that could get this bid?

Go to this link. It may seem trivial but a whole lot of trivial things add up to one HUGE DEBT EMPIRE!

Link: http://mises.org/story/3092

IT ALL WORKS UNTIL IT DOESN'T ...

I think some hedge funds did not meet margin call. BQI drops 40% and climb back a little. Today's news is actually good news.

I am very nervous about more hedge funds are forced to sell. It will drive market even lower.

Crude Supply -

Anyone know why crude, energy & refinery are all down after the crude inventory report? GDX made an U-turn as well. I thought the OPEC news and supply # should be crude friendly.

And "Boom goes the dynamite" in the homebuilders again.

I don't know why, I'm like Steven Colbert, I don't see race or color. :>)
So *I* feel fine having factual discussions about race. LOL!

Bruce-why not just buy GDX?

Why the Iphone will beat the new RIM creation
http://wallastoninvestments.com/

Into DGP. Short term.

c3 - Perhaps the crude report wasn't friendly enough!

Here is a November 2003 Marketwatch piece where George Bush's top economic adviser at the time, N. Gregory Mankiw, called out the practices of Fannie/Freddie. In retrospect, this guy sounds like he had a crystal ball:

http://tinyurl.com/5e3yoz

Mankiw is a Harvard Economics professor and has a great blog as well:

http://gregmankiw.blogspot.com/

oil inv. reports were quite bullish IMO. Should IKE continue to disrupt rigs operations there may be a supply problem. How this affects oil price is another story but I'd be wary of shorting oil.

ALOHA !!

Craig ... I agree Warren Buffet is pretty two-faced. One day he loves the banks on TV and then behind the scenes he is yanking the rug out from under failing bank exposure! Of course, good old BERKSHIRE is exposed in a big way to banks and credit card debt. Whats a put option cost on BRK? $1000 per contract ...

ChickenP - Ahh, that explains it. The best explanation there is! thx.

This link is in the Mankiw Marketwatch article, but here is a direct link:

Remarks at the
Conference of State Bank Supervisors
State Banking Summit and Leadership Conference
Dr. N. Gregory Mankiw
Chairman
Council of Economic Advisers
November 6, 2003

http://tinyurl.com/66y2nr

This is the type of mind our presidential nominees need to be courting to chair their economic advisories, along with Bill of course ;-)

kaimu - A well known Intel internal slogan is: "What have you done for me today?".

Gold losing support. Goldcorp may have support at the last bear cycle low around 21. I think if WaMu goes down you will get a mini-crash in the market where everything will get cheaper.

Race or color is not invisible; it needs to be seen and acknowledged. It is the prejudice that is the problem. Prejudice is what has been used for 400 years to divide this country to enable the elites to control everyone else.

MOAB:

Prejudice/profiling, whatever you want to call it has been around since man stopped dragging his knuckles when he walked. It will always be used for profit and loss both socially and financially.

2nd Ave. You don't just buy GDX because if I am correct about the ratio reversion, all it means is that GDX should do relatively better than GLD although both could be declining.

Bill,
Your comments today rang so true with me that I printed them out and saved them. Your comments are always great but today was over the top.

Lately, I've been really glad that we started out living below out means and paying down debt as quickly as possible and have been doing so every since.

Prudence and frugality has rewarded us well.

Cheers from a chilly NY day.

Rob.

It looks like crude transportation rates are flattening out a bit:

http://www.tankerworld.com/index/

Kaimu:

I'm not sure traders necessarily work less to make more. That would be ideal. How much time has to be put in working outside of trading hours to hone the craft? Now, one could argue the lack of social benefit/productivity from this activity.

gold 770- if i had to guess, i would say the highly-anticipated break will not occur on the first test...more likely to occur after support holds and sucks in another cadre of buyers, only to shake them down...

long time reader, first time poster. spent several hours last night generating list of possible shorts of REITS, insurance & other financials. looking to trade CLMS today, breaking down hard on heavy vol, from divergence in MACD, RSI and Slo stoch in the past 30 days

CP, what do you think of XRAY?

The solution is reminiscent of Jesse Livermore's description of his market short duing the great depression era. On the surface, the solution to challenge the purveyors of bad debt sounds good. However, I wonder about the systems they own (in which we participate) and the propaganda machine and how they might respond. Wouldn't we all be taking a huge risk by trying to beat them at their own game in their own house. I would liken it to going into a casino and trying to beat the house. Anybody who has studied gambling knows the stories of what happens to people who attempt this (especially as an organized group). They are thrown out of the buildings, mistreated and banned and mostly with the support of government.

SLV RSI 7 day <10

The end of next week is the annual Silver Summit in Idaho. I keep thinking I should go, but never make it. However, for the third year I've thought "It's too bad the price of silver/miners is so depressed for the Silver Summit". It just dawned on me that for three years it would have paid to buy SLV/SLW at the Silver Summit and sold it at PDAC time, beginning of March.

SLW/silver is getting closer to giving a "buy" signal by my settings but certainly not there yet. So this fall I'm going to attempt to pull the trigger. Of course, history doesn't seem to repeat when I'm holding stock!

Everybody heading for the exits.....

Bruce,
You could buy GDX and buy DGZ or even DZZ

Bruce, it has been over 24 yr that the 2000 level has been the low, now that has been breached.

It's beyond me what will happen. I have good companies that have been pounded for a yr with good news releases the whole time and here we are at 750 gold whatever.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294&cmd=show[s150432165]&disp=P

I am just not seeing anything that resembles support for any of the equities that I follow - every bit of buying (short covering) is promptly sold off........feels like we need to have a proper burial for one of these banks before we can move on

S&P 1200 today?

ps I think 730 will be support as it is an inverted head and shoulder neckline going back to 1981. Perhaps the shares have fallen in advance of this test, expected the past yr....

Adding to DGP here.

Bruce- i understand you're trying to play a reversion to the mean in the ratio (as opposed to betting on any upside/downside), but at these levels i just think it's a little late in the game to be shorting gold...you would have protection against declines, but it would also eat into any gains should the entire sector spike up hard...good luck..

ronbon - Oct/N/D sweet crude nymex/comex 76x

MMMMMHHH????

SKF is following a consistent trend line today. Could one of the experts opine on what might be the reason for this trading pattern?

Mackinaw - XRAY - The institutional ownership is 87%, I'd have to check the top 5 or so holders balance sheets, they might have to pull out...

Otherwise first glance at chart tells me it just bounced off support, but could fall to 7/15 levels or below when the 10k DOW comes.... Could be good for 5-10% in the next few weeks if the DOW holds up - which is iffy. I do like the company!

looks like WaMu is toast!!

down 25% to $2.46

I picked up some SLW march 09 calls yesterday when it was trading about $7.80. I'm thinking those should do well.

My other bet might be poorly timed. I bought some DIA December 08 calls on Monday when the DOW was around 11500. It's a bet on an election rally taking us to at least 12000 before we crash again. I just don't think they'll allow the markets to crash too severely before the election.

Rob.

Nat-gas - still faalliinngg......

nemo--iam sure no expert- but same pattern in SRS-comm re ultrashort--persistent buying in both. people expecting other shoe to drop.

wamu - could be another one of those ninja trades here soon... There's more fight in that dog unless an SEC takeover pans out.

My question is where's the market going if the SEC busts wamu - down, right?

this goes without saying:

gold dipping below $760, USD index approaching .80...

The FDIC does not have enough money to save WaMu. Next bailout please...

WaMu failure may threated the credit ring, but will certainly make many financially unsavy people nervous and confidence is the key to the financial system. WaMu is the biggest S&L.

ALOHA !!

WOW ... The McFaud plays are getting creamed. FNC down about 40% today! Then there in NOT ... NOT doing so well either! Par for the course lately!

There's an awful lot of effort being put into convincing the markets that commodities and gold are dead and buried. Its "real wealth" versus "false wealth" all the way!

With the USDX hitting what used to be a 30 year support(80)I want to see if that resistance is broken in a major way before considering buying back in! Last I looked we had 79.9 ... that's awful close and it has happened rather rapidly, just as rapidly as gold went from $650 to $1030!

Still waiting ...

moab - That makes it an all or nothing bet then, right? They can't be allowed to fail so fail they shall not? What other alternative is there???

Sen. Cornyn announces he's pushing for a criminal investigation of fannie/freddie.

No doubt he isn't talking about the real crime.

Just the final touches on the smokescreen and mopping up any evidence of the body.

miners- if it wasn't for hulbert's sentiment index being too high, i'd say a short-term bottom is in...still possible, as hulbert's index is more useful when using somewhat longer time frames..

Kaimu said "just as rapidly as gold went from $650 to $1,050"
and to be complete it should read...
and now gold is back to $750

2nd ave,I am not sure about Hulberts index, in the 8 yrs I have been in pm's I have never seen sentiment so bad for the miners. Look at the xau:gold ratio at 24 yr lows. How can he say that?

People hate gold miners with a passion as I see it.

I bought some SHLD puts when the stock was up $3 today. I tried to buy MTH puts earlier when the stock was up $2+ but I missed that one.
I am thinking about starting a position in DGP (it is trading at $14.86 now).

Own: 6000 WGW @ $1.15

Looking at buying SLW under $8

2nd
what I am hearing is that gold/silver/oil will go much lower

Tough market. My TBT trade has lost 15%. I was way too early on TOG. I traded FNM, HOV and AIG at good gains due to volitility. Lost 25% on GFI thinking it was a market bottom. GXEXF and NOSOF are both major losers due to the drop in gold miners and commodities. I've traded NOSOF a few times, so the basis low, but it's dropped steadily. Still about 50% cash, but down about 10% for the year. It's funny but I've had significant ST gains but the goldminers and TBT have been the big losing positions. I would have been better off just sitting in cash since January.

What happened to BQI?

SLW:
The Dec 09 7.50 puts are 1 buck.

You can sell these, pocket the buck, and should this get put to you at 7.50, your cost basis is 6.50. Then set your stop loss at 6.60 or so to cover commisions and enjoy a free trade. That's a pretty good risk/reward ratio.

c3
thanks for the analysis on AGO yesterday. I'm up 9.5% since then. wish today's volume was like yesterdays...

I know gold can go lower, but yesterday sure looks like capitulation on HGU.TO . . .

http://tinyurl.com/6k7nqf

vinod- thanks for passing that on...was there a time frame associated with that, as some of us are trying to game the ST zig-zags..

From Jesse's Café Américain:
"GoldcorpLooking at Junior Miners Acquisitions, Gold to 1500"

http://tinyurl.com/5sm3qd

Key sentence: "For targets close to its existing mines, where infrastructure and staff can be shared, the company [Goldcorp] will consider buying smaller deposits that contain reserves of 'hundreds of thousands of ounces.' In territories where Goldcorp has no presence, acquisitions would have to 'move the needle' by adding at least 3 million to 5 million ounces, McArthur said."

So...any suggestions as to the most probable suspects?

WaMu will be rescued, that is not the issue. The issue is that the government is destroying it's balance sheet and the guy on the street's confidence is being tested. As Kaimu says, confidence is the key and once that is lost government intervention will have not have the desired effect and will make the situation worse, IMO.

Each bailout has triggered a several week rally. The most recent bailout is the biggest by far and produced only a one day rally that has already been washed away. HBB losing control as the inmates finally notice they are in the asylum being drugged ...

MikeNYC - Unless, of course, it's down to 4 when put to you at 7.50...truly free rides are hard to come by.

There is a rumor in China. Chinese central bank governor Zhou, Xiaochuan is going to retire this year.

There will be a new leadership if it is true. That will become interesting, as will the new governor adapt the existing strategy?

Let us wait and see.

2nd
they did not ay time frame.
i mention that I have 1000 slw and my cost is 9.89
i am told that do not average down.

2nd:
Suggest you monitor Colin Twiggs for gold movement timeframes:

http://tinyurl.com/54qccl

RSI Miners. Getting all kind of accumulation signals.

http://tinyurl.com/6cfoy7

Buy 500 Shares of ESLR
Details Filled at $5.77

re: SLW

RSI 7 day = 14.31.

No capitulation

re: CCJ

Up 5% on heavier than average 10 day volume.

RSI 7 day 28.7

Setting up for breakout?

Long at 27.15 (getting better using RSI tools now)

bsi87,

Nova Gold has an RSI 7 day at 8 ...

re: NG

I looked it. SSRI looks like it has more potential upside. JMO. No position in either.

Long SIL - too soon.

Oldgoat.
Syh and cyp are drilling the property at the fenceline to gea which is east of premier gold mines as well. Cores are in the lab per n.r. GG bought 9% of cyp 16 mths ago for .65,now trading at .28. Crazy stuff but nothing is a sure thing

FCX - got in @65, it is 69, should i take profit now?

TRIN @.63, GOOG down 3, GS down 4, AAPL down on the day-caution warranted. Interesting GLD down 1.50 and miners positive.

Re: Capitulation

Instead of looking for a capitulation in gold, I would be looking for one on the oil price. We still have at least 10 trading days or more to go through to complete a 55-day panic rout in the oil price. Oil is nowhere near its 'fair value.' The high was set on Jul. 11, 42 trading days ago. So that leaves 13 days. That puts us at the end of September. The fact we have a sharp decrease in liquidity temporarily is also carrying down gold prices, but that has a limit.

As far as gold is concerned, yes its very stubborn. The reason why is the decline in the € against the ¥ which is putting a huge support under the gold price. We are seeing gold hovering above its 'fair value.' (as determined by Paul Van Eeden.) That is in hard money terms and discounts inflation. If you look at the rout of the €/¥ chart, its been going for 32 days, started on the 22 Jul. So in 23 days, we'll see a capitulation in that chart as well, which puts the strongest action for the support under the gold price into October.

The FOMC meeting is on the 16th. Sometime in the interval between a capitulation in the oil price and the capitulation in the €/¥ trade, the $US will sell off, probably because either another bank failure or bail out or rate cut is in order. Yields on treasuries are now 1.59, so the Fed can still cut 50 basis points.

We saw gold sell off as part of a larger correction lasting more than 21 weeks' worth and co-incides with 48 days of decline in liquidity, so really only a few day's worth of declines if the 55 days rule of thumb holds true:

stockcharts.com

http://tinyurl.com/5vuftj

What will that do for the miners, especially junior mining companies? - Don't know. But there's sure to be a trade in the ¥/$, as the technical indicators now show a positive divergence.

How bad are things at SNDK ?

http://tinyurl.com/63spr8

Bill,

Thanks for your comments. I read your blog along with Barry Rithholz every day so that I can filter anything else I read through a "reality lens". Regarding the current financial crisis at large, my main issue it that HB&B is mis-allocating capital into non-productive assets. A house is not a productive asset in our economy. Our economy will regain its strength when we start increasing productivity. To do that, investments must be made in the right segments of our economy.

Keep in mind that sometimes the 55 day panic cycle extends to a fibonacci 89 days, although it is supposedly rare that it go on so long.

Oh, THANKS for that Moab....LOL!

from hedgefundmgr. blog...pertains to CX and CCJ
"Stocks With Unusual Put Option Activity:
1) EQIX 2) CX 3) NWS 4) CCJ 5) HMY"

Tbar - Thanks! I note that cyp has a buy alert yesterday @ 11.29.

Thanks moab, that's a little detail I was unaware of.

Well, I've been wrong for two years in a row now, so it wouldn't surprise me if I am yet wrong again.

But the idea that oil prices will decline, taking with it the $C and a chronically firm gold price makes Canadian mining properties with projects on the go very attractive.

Tbar - Scratch that buy alert. Wrong ticker (US vs CDN).

The more I follow and trade this market, the more I realize that I don't know anything. And I've been doing this for the last 20+ years. Ha !

I'm sick and tired of talking about gold mining and gold stocks.

Which means the time to buy may be soon approaching ;-)

Blowout Preventer - That's right.

I am reviewing the performance of Sprott precious metal fund. It drops 40%+ ytd. It is an embarrassment for them. None of mutual fund is in a positive territory. I am thinking the same thing.

re:Capitulation

Don't know that one has to pick one over another. There are miners that are capitulating and there are driller capitulating. Full disclosure: long BHI

http://tinyurl.com/5ptequ

7/15/08 + 89 = 10/12/08 -> right in the middle of some historic market bottoms like 10/10/02 and 10/20/87.

Old goat, they are cyp.v and syh .v

lottery type explorers, lots of dd required.I think I have done mine but with my luck it will blow up on me.

Would anyone endorse a small position in XME, for a relatively inexperienced trader?

The chart looks bad on XME. Looks like you are trying to catch a falling knife. What is your time frame Dave for the stock?

boss, I'm looking ahead to how I might expect Stochastics and RSI-7 to look after tonight's chart, i.e. a possible buy signal, and would be playing it short term, the often mentioned "tradable bounce" with a fairly tight stop.

Thanks for your response.

Bill said - "So, what’s good for the goose is good for the gander. These are supposed to be free markets, right."

Without a question mark, as if to make a statement.

No, the markets are not free...

Loading the ESLR boat. Established a 1/5 position yesterday, just filled out the rest at 5.93. Looking to re-enter TOL short on trendline break of the 10min bars.

Wish I had more screentime these days, the overall market volatility is a gift to daytraders.

Tbar - CYP.V also trades on US pink sheets as CYDVF. SYH.V trades as SYHBF. I would always prefer trade on Venture exchange if possible, but Fido won't let me in my IRA; changes to pink sheet ticker when I try to place an order.

Re: OldGoat's post about GoldCorp - It says they are looking in Mexico and Canada near their properties...anyone have a link to maps near goldcorp properties that show who the landowners are? I would assume that they would go after those targets because the proximity would be favorable.

MU

Beneath the radar--some of the crowd here use to follow MU. Up almost 11.5% today, increasing volume. Fell off my radar also--no position.

That was quick. Trendline broken (10m bars), short TOL 24.96

Got the rosin on my hand and ready for a bumpy ride into the close on some of my shorts.

I just can't believe the trading in ESLR. It's comical in its extremity. Now S&P is piling on with a downgrade based on no news.

The stock loses 50% of its value in a week? Guess it's time to downgrade.

It's absolutely sickening.

#2son:

Very strange on eslr, but, their may be some correlation to oil as there was before. With oil threatening to go lower, perhaps the correlations for the hedgefunds now put solar profitability in a precarious position. Also, there will likely be continuous liquidation in many stocks. With solar being reasonably speculative still, it would seem reasonable for them to be primary targets to jettison.

rob d re maps

http://www.bayfieldventures.com/i/maps/rdlkdrilloc.gif

http://www.skyharbourltd.com/i/maps/CYP_Gold_Eagle_Drill_View.jpg

many of these companies update maps constantly,so you may want to check

ESLR news -
http://tinyurl.com/5fnk9p

Rob d - Goldcorp's Mexican "neighbors"

I once saw a map of properties near Penesquito, but can now only find some text from my notes:

"Galore Resource's Dos Santos property is located 20 kilometres north of Canplats Resources' discovery and 40 kilometres southeast of Goldcorp's Penasquito gold-silver base metal mining project in northern Zacatecas State, Mexico."

Seabridge Gold also has a property named Noche Buena VERY close to Penasquito, which they are trying to sell.

Recall that Goldcorp was criticized over the poly-metallic and lower-grade nature of Penasquito, but once they are set up to process ore from there, nearby similar properties would seem a natural. Canplats is said to have such, and so is Geologix (although I believe their deposit is some hours drive from Penasquito).

If I find more, I'll post it.

Bob Barr has invited Ron Paul to be his Libertarian running mate in the Presidential election.

http://tinyurl.com/66rmoc

Questions for everyone:
I am currently heavily invested in energy and precious metals. Is it too late to get out or should I hold on? I think I can tolerate 10% down from this point. Heck, I am already down 33%. Any input would be appreciated.

for those who enjoy geopolitical melodrama -

2 Russian strategic bombers have landed in Venezuela (everyone seems to have forgotten they have such bombers often full of nucs!) preliminary to joint Russian-Venezuelan Naval exercises set for November.

This is Vlad's way of reminding "the decider" that the US too claims a "sphere of influence" in its "neighborhood". If Cheney over-reacts, at least we'll get a catalyst for the gold market!

downey, you will get a variety of input. Do you need the money right now? Are they good companies? Can you sell some that have smaller losses?
The hardest,HARDEST thing to do with a trading account is ...do nothing. But, if you made good choices and are excited about the potential, you bought the ticket now you pay with the (potential) risk of losing $. I have 3 stocks that I should have set a stop on and didn't but the total of all three is 4% of my trading portfolio (sizing). I've learned soo much here I felt obliged to spout. Disclosure, I am down 12% ytd
peace from North Puget Sound

Thanks for the link, Pook. That conference was over a week ago. Licensing their technology is a positive, but now, somehow, it is viewed as a negative.

The mind boggles.

And yes, nemo, you probably are right about a component of this being tied to the price of oil. But then again, I remember that oil was much lower last year, when ESLR had a much murkier future and the stock price was much higher.

Downey - Is Gold due to rebound?

Tim Ord, gold timer extra-ordinaire, plots the $XAU:$Gold chart on stockcharts.com

Everytime the ratio (of gold stocks to the metal) dips below .20 a major gold bottom is reached. That ratio is now .145 - lower than when the gold rally began in late 2000.

That said, I'm biting my nails too. Look for Ord's free weekly post either tonight or tomorrow at:

http://decisionpoint.com/TAC/TopAdvisors.html

Thank you for your input Photogray. I don't need the money now, but it's very hard to watch my stocks taking a nose dive every day. I guess I should just forget about them for a year or two. Ha Ha Ha....

downey

You never know.... remember most major battles in the Middle East are fought in the spring and fall. That will send your oil & PM stocks soaring upwards in a heart beat. I rather be holding what you are than tech. I would hold especially with the on going Iran nuke situation. Just my 2 cents!

Downey,
The sad truth is when you can't take it anymore and you want to sell just to end your pain. That is actually when you should buy some more. When that time comes i would like to buy some with you. So let us know.

I would venture to say today was not a good sign for the bulls. They just couldn't keep the numbers up. Maybe tomorrow the bears will be back.
[Short everything except gold & slw]

bobbyo,
Are you using me as a trigger to buy? Ha Ha Ha...
I am still holding on. I haven't sold any yet.
Thanks everyone for your input.

bobbyo, that day was yesterday for me. You wouldn't have wanted to be in my head, believe me.

downey

the xau:gold chart discussed is as good an indicator as nearly any. Having said that,it just crashed to levels not seen in the history that stockcharts has available.That ratio means gold stocks are cheap compared to gold when it gets low btw.
Today the gold price fell by nearly $24 and yet the gold stock index's had a very good day.Most of them are back to levels in 2003 or 2003 when gold was at 350-433 ish.

Jmo that is the kind of action you look for near bottoms. Hopefully the risk is very minimal from here.

Todays action is a great start for a huge buy signal on the gold stocks for me but I still think 730 will get tested as I have for over a yr.

Good luck, it's tough.

I'm watching the RSI system for confirmation in gold sector. The stocks had a good day even though the metal had a bad day. I don't think Bill is going to make the call on the trade of generation for us, so it's up to us to decide on our own.

ESLR = Also don't overlook the possibility of the renewable energy tax credit expiration, for which the bill renewal is stalled. This makes it more sensitive to crude, I would expect.

Tbar - $XAU:$GOLD

It crossed my mind that the lowest ratio since 1985 (where Ord's charts extend to) may be related to cost pressures on gold production not seen since '70s energy crisis lowering anticipate future margins for gold producers.

Still, it's usually NOT "different this time" and such a well-established indicator (only 7 previous cases of ratio <.20 since 1985) should once again portend recovery.

Let's hope we can hang in there till it comes. Maybe we need to constitute a "gold-holders therapy group" ....

Jock,
That's a great idea. Where do I sign up?
Anyway...
My conscience says vote for Obama, but my pocket says vote for McCain. Especially since McCain is for Nuclear Power. Any thoughts on that?

shark has already established an Over the Shoulder Boulder Holder therapy group, perhaps he could accommodate or allocate space for an alternative gold holders group!!!

Just like tortured buying on Friday made me think more selling was in cards, today's rally (and I use this word loosely) leaves the same impression. Unless some miracle keeps LEH afloat, we are in for more downside, IMO.

I was waiting all morning for a fake rally for an SKF entry. Got impatient and got in at 119.07.....then the rally comes.

I agree with Vad that it feels more downside coming. Looking at the LEH and WM close I'm thinking.....I've seen this fish before.

I don't know about the Oracle someone linked to. As far as what he said about the miners on Sept. 3, he was totally wrong.
He said, "The weaker the volume on the test of a previous low the stronger the signal for a reversal. Today’s 50% shrankage in volume on the test is a very strong bullish setup. To complete the bullish signal, GDX will need to close above the previous low of 33.86. Therefore any rally from here will most likely produce a bullish signal and the rally phase will begin."
It was not a very strong bullish setup, in retrospect.

Agreed on the ITC hanging over this sector. But, like most else, I believe it is much ado about nothing.

Consider the fact that not renewing the ITC would throw a roadblock in the way of an industry that is growing faster than most others and is creating good jobs here in the U.S. Can you imagine a government so dysfunctional that it would block this, particularly during a time of recession?

Incredible. Talk about a broken government.

That Jock linked to, sorry.

Jock, I will go there after I get out of the trauma ward lol

I see usb reversed a tad today in keeping with the gold miner leverage against the usb downtrends I feel happens.

Encouraging but I have a lot of damage in my head to repair from this fall.

ptpmsd(post tramatic precious metals stock disorder) sheesh

Seessh I have stopped watching the market for the past 3 weeks...

and even the little glimpses I get make me sea sick

Hope everyone is hanging on tight.

DX crossed .80 to the upside, Euro crossed 1.40 to the downside, spot gold (bid, Kitco) at 752.

Denny - Ord on gold timing ...

Warren Buffett only claims to bat .400 on his investment decisions; it's similar for traders.

You make your calls, and you use money management to limit risk. It's an art, not a science!

Still, Ord has been often chosen as a top gold timer. His $XAU:$GOLD is more authoritative than his GDX setup, IMHO. Only 8 dips in 23 years below .20 in $XAU:$GOLD, and 7 signified a major bottom in gold stocks. I believe this 8th one will too!

If you expect a better indicator than that, you'd better look in a science, rather than in a market!

For those suffering from gold hangover yet not fully invested in PM just multiply your portfolio performance by USDX over a period of time.

Denny - Ord's gold setup

You criticize Ord's setup without having done your homework. As you noted, for Ord's 9/3 buy signal, GDX would have had to close over the previous low of 33.86 -- which it HAS NOT YET DONE! Therefore, no buy signal yet on the GDX.

Please do your homework!

David/etc- re the gold sell-off

fwiw, the present sell-off is nothing new...

gold corrected 22% in 2006 (may 11 to june 13)...now we have a 23% drop beginning in mid-july...so technically, the 2006 drop was more severe...(i lived through the '06 drop with a higher-than-usual percentage of my portfolio in the sector, so i know what it feels like...that may partly explain why this drop seems run-of-the-mill)...all i can say is i'm confident you will make A LOT of money on your holdings if you hold them long enough...it took a year for gold to muddle through the 600s on its way to new highs...may take a year or two for it see the 1500s...

percentage-wise, the movement in miners have been greater, up or down...with a high concentration of miners in your portfolio (David), i would imagine your pain right now might be a 7 on a scale of 1-10...be prepared to endure at least a day or two of tens before it's over (although you may sleep through it)...the real challenge will be to hold tight for gold 1500-> i don't know many people able to sit tight watching gains of 100-1000%...so in a way you can train your mind to withstand the pressure to sell into 100+% gains by allowing yourself to fully embrace 10-point pain now...

;), but it's no joke...

..btw, having lived through the '06 drop is why i held back/still holding back on throwing weight into the sector...keeping positions at <10% of the portfolio allows you to (a) sleep better, and (b) hold on to the positions during parabolic moves up...

This headline is great: "Lehman Takes Huge Loss, Does Nothing". Indeed!

LEH 6.80 in AH.

2nd for a no joke I am laughing my butt off

The 2006 correction was not even a 38% retrace of the entire bull to date.This one is over 50% of the entire bull to date.

The xau:gold ratio at the lows of the 2006 correction was at .21ish and todays has reached .14 a full 33% more severe compared to gold.

Golds lowest level at the 2006 correction was at 580 today to date it is 748 this evening

There is no comparisom whatsoever.

The xgd.to is back to 2002 levels here at 750 gold.

LEH- so soros has taken a hit of at least 64% on the 10m shares he owned as of june 30...soros, buffet, julian robertson, bill miller and their proteges-> it's good to know they're not infallible (ie, not trading on inside information)...

Ps Sorry I forgot the most important visual
The hui actually fell further than the 2006 lows from a higher high and with 748 gold not 580. It has been a total slaughter.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294

Tbar- OK..let's hope we can celebrate the 2010 visual...

I would settle for 2008-10-30 or when ever the election ends.(I should know,my bad)

I am afraid of the american hangover that could produce in the vix

Part of the problem with ESLR and other alt-energy stocks in general is a recent change in perception of November election outcome - it is much more uncertain now after VP picks were done than it was few months ago.

Posted by Tbar: "There is no comparisom whatsoever. The xgd.to is back to 2002 levels here at 750 gold."

How do you account for the fact that oil is several times higher now than it was in 2002? I am sure if we looked at the indicator of the miner's profit margins, they would not be at the highest levels ever now.

David- are you saying instead of looking at XAU:GLD we should be looking at an earnings-adjusted XAU:GLD, or XAU:GLD adjusted for costs of exploration/extraction?

2nd_ave, your intuition (about now maxing out on your miner positions yet) has proven correct once again -- both gold and silver are falling after hours. It does begin to seem like in the major credit contraction we are having, gold and silver can drop arbitrarily low. I guess that's where the psychological pain comes from -- not knowing how big the losses will end up being and whether the gold/silver will ever recover.

re: XAU,

imho the XAU is less a reliable gold index because of the heavy concentration of base metals thanks to
FCX (freeport mcmoran copper and gold)
its a pretty large component of the index and may tend to throw things off a bit,

i like the HUI accept stockcharts cant give OBV readings on it like it can w/ the GDX.

Posted by 2nd_ave: "the real challenge will be to hold tight for gold 1500-> i don't know many people able to sit tight watching gains of 100-1000%..."

2nd_ave: why are you so sure that gold will reach new highs in a year or two? There are many arguments floating around, both about the long-term gold bull market being alive and it being dead. What arguments have convinced you, personally, that the gold bull market did not die in this credit contraction of epic proportions?

Even Bill's argument for the gold bull market continuing makes me more worried than not. He is stating positively that the bull market in USD has begun. However, he is HOPING that at SOME POINT traders will realize that the value is being destroyed in currencies and gold will start moving up together with USD. What if the second part does not materialize? Then the USD bull market will kill the gold bull market. In the past, gold could move up with the dollar when inflation was increasing. But given the recent collapse in commodities and an ongoing credit contraction, inflation will most likely start decreasing now and will be down until the credit contraction is resolved. So there does not seem to be gold bull market on the horizon...

Downey, et al. I too think gold has more to drop....ooooh the pain. I have too often sold just before the payoff. I think Bill has said 700. I think 680-720. If it goes up tonight I guess I will have missed some. I don't have enough bullets to keep shooting. My eslr stop kicked in today and then it rebounded. Bill saved my a** in May 06 in getting out of pm's before the crash mentioned above. I think I'm a little smarter than I was then but...theres danger in that thought, so I have to be careful. Lucky would be nice but just cant depend on it.

2nd-Av,

Thanks for the archive on SLW last evening. Explains a lot and shows Bill was right on in Oct 06. Hope you profited from the run-up from low today. I did not enter yet but will be watching. As a new poster I especially appreciate your response.

Nemo,

Your comment this morning on the sacred cows in our American society:

"One could argue the same for the defense industry (Have to have a strong national defense)"

Paul Farrell of Market Watch had a great piece on this and then some. Sorry I don't do TinyURL yet but here it is:

http://www.marketwatch.com/news/story/why-we-love-americas-outrageous/story.aspx?guid={0D31C880-32CD-4BA1-8133-329EA57CB069}&dist=msr_1

Who can deny that the phony bull market started about the same time that the War did in early 2003? Added to by the ludicrous tax cuts for the rich and the Greenspan ultra-low interest rates.

All three of those pillars are unwinding. Perhaps slowly.

Paul Farrell is a former member of HB&B if you read his bio. Not to mention F E News. Wonder if he was booted from latter because be spoke too much truth to power. CNBC is controlled by GE after all. I suspect that he is just a semi-retired person who now speaks out without inhibitions. I like that. I spent my career as a military engineer and see much truth in Farrell's synopsis. I have spoken out before (while working) but never had a forum like Farrell.

All this makes me wonder why Bill has such companies as GE and BA in his 100 list. Also, XOM is the most socially resistant oil company that I can imagine. I cant argue with success to now, however. I can only hope for a better future.

David- i'm no expert on gold; i know more about playing monopoly than i do about playing the gold sector...

but if i were to answer your question:

(a) i have faith in the people who have called/are calling the moves in gold...bill called a top in Goldcorp last summer, did he not, and recommended a short...he was also clear about a correction, and other than saying he's close to buying, he has yet to give a buy signal; in the time i've been reading this blog, he's pretty much called all the twists and turns...my 'road map,' if you will, to the case for gold, would have to be Rob McEwen's october 2006 presentation (it may have been at the Denver Gold Forum-> if you can find a link to it in the archives, i encourage you to view it in its entirety)..

(b) deja vu- i'm old enough to remember the CSNY album that bears that title, and the seventies (some of the best years of my life)...now we're a couple of generations down the road, and it's deja vu all over again...history repeats, repeats with a twist, repeats as tragedy, repeats as farce, whatever-> if the same general mistakes are made by the same humans that govern the same sub-humans (joking, OK) for the same reasons, then it stands to reason that the same reasons gold went up in the seventies will play out now...

(c) what's backing the USD? enough said...

if i were to listen to every argument for/against any particular trade, i'd never get around to trading...all i can do is make an informed judgment call/bet and have a way out if it doesn't work out...if the best-sounding arguments won the game, then economists would be filthy rich- they're not..they fill in the blanks for filthy rich traders who need a way to 'explain' how they did it...;)

David
"How do you account for the fact that oil is several times higher now than it was in 2002? I am sure if we looked at the indicator of the miner's profit margins, they would not be at the highest levels ever now."

I have tried to work this thought out on a chart, my meager cell capacity needs a picture

I am totally open to critisism and willing to learn, oil broke out of its 1980 high 3.5 yrs before gold did.Does oil bake inflation into the cake? Or is it just so highly manipulated that oil is now the canary?

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294&cmd=show[s147340309]&disp=P

Re: PM - Just saw a commercial on a US channel. www.cash4gold.com wants your gold, silver, platinum jewelery. Just request your kit and send your PM by prepaid envelope and they will send you cash. Not sure what to make of this.

Lots of discussion about gold and miners today, and a little on the closely related issue of inflation vs deflation.
1) I'm feeling the pain, but I'm going to keep my PM holdings, and if I can summon the courage, I'll add to them, probably soon.
2) I read an interesting take on hedge funds today, about how the reward structure encourages the closing of a fund once it's had a good year. New fund can then be opened in a few months. This may have contributed to the unwinding of the Yen carry trade, which then may be contributing to the decline in gold/miners.
3) Until recently I was in the deflation camp - I thought Kaimu had it wrong and that the private destruction of debt would exceed the Fed's ability to create it. Now that a large proportion of that debt has been nationalized, the Fed/Treasury/HBB can ensure that that doesn't happen - the debts still won't be paid off by the debtors, but will be paid off by the people, though it'll be hidden from them by further debasement of the currency.
4) Foreign holders of this debt are nominally kept whole, until one of them blinks. My guess is that the first sign of a move by China or one of the other major holders out of US debt will trigger an avalanche, and a massive move in the gold price. That's why I'm still holding after a massive loss.
5) In case its not obvious, I don't use margin - my sleep is important though unfortunately not nearly as productive as David's
6) My favorite miner is Capital Gold - production cost of USD250/oz in Mexico - as usual, DYODD

Sandra- television ads are expensive (ask shark)...would rather drive my car down to the dealer, give them the keys, take the bus home, and wait for them to send me a check (in a prepaid envelope)...;)

there is little doubt Ike will hit hard...plenty of doubt, apparently, about its impact on crude/NGas prices (futes up 0.67/0.173, respectively, at the moment)...

One year ago when the USD was at 80, gold was barely above 700. I say a $50 improvement is a good start for the both to rally.

now showing a little conviction- up 0.202/1.17...

oops...1.17/0.202...

reminder- tomorrow will be the 7th anniversary of "9/11"...

Tomorrow is also:
1) Jobless claims
2) Import prices

2nd: What I meant is more like: It's the first time I see an AD for gold on TV asking people to sell them their jewelery, all at the same time, when one has an hard time getting physical PM at the coin shop for these prices.

Won't there at some point be a decoupling of the relationship between USD and gold. The USD strength in recent weeks is only relative to other currency's. Its intrinsic strength cannot be stronger. Is the deficit lower? Did we come back from Iraq. Did we raise interest rates? Isn't the fed going to be the eventual owner of all the bad paper written. Really why should any of us pay our debts? At some point Gold will be the 'safe haven'(hate that cliche) when traders realize were in global recession and quickly come to the conclusion that the USD is getting stronger relative to the EURO does not necessarily make it valuable.

Bob
Ps. have you ever noticed when someone uses the word "Decoupling" they don't know what the hell they are talking about.

jock and tbar - thanks for the info on the gold mining maps.

"David- are you saying instead of looking at XAU:GLD we should be looking at an earnings-adjusted XAU:GLD, or XAU:GLD adjusted for costs of exploration/extraction?"

That would seem to make more sense to me, since the mining costs kept increasing over time.

Timing is important. Yes, you may have your technical analysis. However, it is difficult especially when you aren't "in the room" and don't have control on what's occuring.

But then there are those circumstances that you do have control over timing just like this American football player who changed his name right before the season began. $4 million to RBK?

http://tinyurl.com/5sacse

SandraT - They want your gold especially now for two reasons:
1) Precious metals are at or near a low
2) There's no incentive for dealers to sell at these prices, i.e. you can't find any on the street.

Anyone remember $585 Gold? That was only a few years ago....

Accounting for a 10% inflation rate would that give us $707.85 for today's reasonable price? Nice call for an iterim bottom, before we hit the $640-680 range?

Looks like a "head, shoulders, and middle finger" chart to me.

http://tinyurl.com/5sefdm

bobbyo - World economies are slowing, not just the US economy. First it started in the US and the USD fell. Now the slowdown is spreading so the USD is recovering.

wavesmash - I like your number and the reasoning, it's the same price shark popped out a few weeks ago.

but, there's less confidence in fiat today...

2nd:

First saw CSNY in 1974 at Largo Civic Center in MD. It's no longer there. Jesse Colin Young backed them up. That was back when concerts went until the wee hours. Ahhhh, the good old days.

Illini:

Not to put words in Bill's mouth, but his focus seems to be on social equity of capital markets and investing in good companies, not companies that are necessarily perceived as "good." If you don't like a company in his portfolio, you can always take the profits you make on it, and contribute to causes against the company's interests.

Medvedev Says State Can Lift Markets

Moscow Times By Tim Wall / Staff Writer

As Russian stock markets suffered a second straight disastrous day of trading Wednesday, President Dmitry Medvedev played down the drastic falls of recent months and pledged that the government would restore the markets to their levels at the beginning of the year.

Guess the RSX market goes down until "the beginning of the year." ;)

Reason the market is down?

"Let the Americans sort out their mortgage system themselves," he said. "But of course … they have pretty much set everyone up for this."

http://tinyurl.com/69mdye

What gold was doing last year. If you bought this time last year you'd be up $30.

http://tinyurl.com/6rmzea

Less commission & currency conversion if you're Canadian. And inflation.

Haven't seen so many "accumulations" on the RSI list before.

Isn't it true that miners are "high beta" and would be the first to get dumped when selling off a portfolio? Perhaps some (LEH, WM, or any former holders of FNM/FRE or LEH/WM) are selling off their least valuable, highest risk equities?

Leisa posted a link on her blog to a pretty neat 3D heatmap. There's some tall towers on there.

http://tinyurl.com/6zhkt7

Basic Materials & Oil/Gas seem to be good neighbourhoods.

Looks like gold is trading at $740/oz this morning. I didn't get a chance to buy SLW under $8 yesterday because I was busy at work. Maybe I will get a good entry into DGP, WGW, SLW today.

b0ss,

As I sit here and read the latest IKE updates, I can't help but think that you'll get lower entries in the future. It might just be me and my "Nervous Nellie" attitude due to IKE's upcoming visit to our Texas coast, but this $GOLD Stockcharts chart looks like a potential head and shoulders on the far right...with some downside to $700 - $650 left to go.

http://tinyurl.com/5mvgxn

LEH 6.20s this morning. It looks like it went under 6 briefly too.

Good morning.

Here are your Cara 100 Ratings Changes in play today:

RIMM - Target Price Lowered from $160 to $150 @ Oppenheimer

WFMI - Coverage Initiated with a Buy @ Jefferies & Co. Target price $23

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

Have a great day and watch out for falling knives.

BLowout, I'm back in Boston, but considering a run back to Houston today - Dad's in Houston, in west memorial area, if you know it - west of town, west of Beltway 8. Does the news in the area put west Houston inthe path? NOAA's map seems to point that way, but I can't tell. Thanks.

PS: Dad's 91, and not really able to keep up with the news.

Perhaps they'll throw a curve ball and allow the LEH debt to remain privatized? Surely LEH is as interconnected and just as critical to the financial market as Bear Stearns was....

David,

I'm coming into this in the middle, so not sure how serious your situation may be, but —

Most investors/traders have times when one goes sour and it IS uncomfortable — we learn best from the worst.

"Next time" you will set a sell stop, or watch more closely, or not put too many eggs in the basket, or have a back-up plan.

Now you might consider getting at least some portion into cash and gradually averaging back in.

I have been coming back from just such a situation with SKF.

The intervention by the SEC caught me long on a very big (over confident) % in it. (More than my average annual income when last I worked.) From 11/07 to 7/7 I was in and out with the best gains ever in any one stock.

Yesterday two buy orders were executed while I was away and I'm nearly even.

My view on the financials is firm: they will have troubles for at least another year — unless the Fed, congress, SEC or some as yet to be devised "rescue" alters all.

I am alert for any change and will switch to UYG.

If you are convinced, as I am, we are in a major global long-term financial disaster, gold will come back when everyone begins to realize and admit it.

Take a deep breath and rethink for the short, medium and longer term. Best of luck to you.

It may be the PPT has run out of ammo for a while.

Futures appear to be crashing.

I just wish our country would get past the stupidity. Sure I like short term money but I have two daughters.

I guess you have to melt recycled steel down to purify it and forge and unblemished product.

http://www.youtube.com/watch?v=J_MVGAMfODk&feature=related

Pearl Jam. One of there best.

Hello everyone,

Does anybody have an opinion on flat-out-crushed silver producer Apex Silver Mines (SIL)? (Jock? kaimu?)

It's sitting now at 2.1, analyst target is 11+, it has been up to 20. Risk/reward is in the 4x-5x range, much like WGW. I've seen no concrete news related to the pummeling. Is the stock fundamentally good here? Or is there a catch? Its downdraft within 2008 has been dramatic..

Correction: My last post was for Denny, sorry.

If there's anyone in Texas who has good local info on latest Ike landfall predictions, please email me at my handle at gmail.com Thanks. Sorry to hit the list with issue not directly related to making money.

Writersblock:
South side of Houston(Brazoria County) and west side are now forecasted to receive the closest pass from the eyewall (strongest winds) and to be on the "dirty side" of the storm. Ike has a huge windfield with Tropical Storm force winds extending over 200 miles from center and hurricane force winds extending over 100 miles from center. Central pressure readings equivalent to that of a borderline Cat3/Cat 4 storm although winds have not reached that level (yet). I would be running in to pick him up and running back out. H-town will be out of commission for awhile it appears.

When I returned to Boston last Saturday, going through the Houston airport, I passed platform crews who were still on their way back to their jobs. I'm sure they've already headed back the other way. It would seem to me that these two shutdowns, back to back, would have to affect prices in the short run, even if nothing is taken out. On the other hand, perhaps that's offset by the Saudis refusing to go along with OPEC.

Dividend tax abuse - Yes, and banks are helping banks to themselves at the expense of US taxpayers with blessings from a corrupt Congress. Where will this lead and will the real Joe lier please stand up!!!

Big Al, thanks!

I think of the current dollar stronger/weaker against other currencies as just the noise of traders. A long term chart on the gold price in dollars would be gold as a horizontal line and dollars like a jet fighter taking off into the stratosphere.

My original purpose in holding gold bullion was as a hedge against the inflation I've seen since WW2.

I think we may fall into deflation for an indeterminate period, but can't see any other alternative besides Treasuries.

Suggestions anyone?

Case - SIL has possible need for more financing. Maybe their partner (Sumitomo I think) is playing hardball. They're in production now, so I would have expected to see cash flow covering operating costs. And of course, they're in Bolivia, which poses potential problems, though if they're good corporate citizens, they should be OK since its a large scale operation and not easily taken over, and I expect Sumitomo's presence to be a benefit here. Needless to say, I'm underwater - didn't put a stop in place - really SLOW learner.

Lehman's getting cheap!

Gold - IMO: I'm still holding mine which I bought at $850-$860, because I bought it as an insurance policy as it's questionable if FDIC can weather the storm. Perhaps it goes lower, perhaps not. Either way, I don't mind holding for the 3 year maturity.

Grym - Treasuries are denominated in fiat, Au is not. I can't remember when, except for the seventies when it made sense to hold treasuries. Some huge gains were made in PM's at that time also, if I recall. Au is real money and as I see it, the remaining fruit hanging in the fiat money tree is insect infested and in need of fumigation or replacement by viable standard.

SKF and FXP ran away this morning. Too bad, looks like the moves are too big to play-out of the gate anyway...

Also, I believe this whole thing turns around at crude $80. The plan is sound, stick with the plan even if you're timing isn't perfect.

If I had powder I'd be considering UYG about now.

Pookster:

That's a conundrum: The move by the FEDS on FNM/FRE had a 1 day effect. What time frame you talking on a UYG trade?

nemo - UYG is cheap around $19, don't you think? It will trend up from around this level, unless the wamu shoe falls soon. No?

I think there are other financials in real trouble:

Lehman and WaMu of course. AIG, Merrill, some of the regionals(we've only been losing one a week, but how long can that last)

You'd think looking at the rocket the last few days on SKF, that would be the case, but it's only been trending a channel over the last month. Are any banks having success raising capital?

If you look the market is trading in a channel....the one defined by Hank and his buddies. Whenever a real event comes along to push it below the trend they bring out the PPT and shorts get killed.

That's why I'm playing SKF/UYG ultra short term.
We have at least two large financials in immediate deep doo....just the time for Hank and Ben to do something stupid to shore this mess up.

I think with early voting they have to use duct tape and bubble gum until at least October 15th, then they can let air out really slow.

I suppose not only chickens revert to cannibalism when under stress:

Wall Street Journal - 2 hours ago
Wall Street in a financial crisis has rules similar to those on the African savannah: The hyenas pick off the weakest wildebeest first.

[Bill Cara note:

Only on Wall Street can HB&B breed themselves as both predator-prey (dealer-agent-client). But you gnu that already.]

LEH - Fire sale still in progress!!! What was it we were being told a few months ago? I wonder if they thought our memories were shorter than their noses are long.