Fed following path that didn't help Japan in crisis

TOKYO (Reuters) - If Japan's experience is any guide, the Federal Reserve's plans to accept equity as collateral for loans will have little impact on the credit crisis and may even erode the U.S. central bank's influence over markets.

The move, unprecedented in the U.S. central bank's nearly 95-year history, stirs memories in Japan, which suffered a decade of deflation after an asset bubble collapsed in the 1990s in the much the same way as the U.S. housing market imploded last year.

http://tinyurl.com/6zjgyl

if you see one roach there is usually a lot more. Even though i am all cash i still feel impacts as i live and do business in nyc area. and i feel the city slowly dying. 20% of wages are from financials here. i wonder when i am 50 yrs old, will wall st just become a tourist attraction? wonder how current students at nyu stern school of business, are coping to having to find jobs or rethink career paths. hoping the next bull comes sooner than later.

Fund managers more downbeat on economy

A net 68% of managers stated that they believe the outlook for corporate profits will deteriorate over the next year, up from 58% a month ago, while a net 82% said that consensus earnings estimates for the coming year are too high, similar to a reading of 83% in August.

http://tinyurl.com/6etd9a

Added some DDM this morning premkt, short term. Plan to get back into TBT, as well.

America going off the rails, indeed: too much credit-fueled, financially engineered systemic mania for too long. I was doubtful that this crisis would result in a meaningful change in public sentiment regarding credit and finances. But the cracks of financial health have been growing for a while now, and as the US careens towards a possible currency crisis, I'm no longer as cynical of a supposed new paradigm in public thought. If that's what we need for people to return to spending 3x their yearly income on a home...

mean reversion is a nasty mistress!

2nd,

Based on the price action plus the rise in oil, I am thinking that ESLR could see a little upside follow-through today. Wait for the retracement though.

Bill, in your book you backed the idea of trading an ETF as the main position and along with about 4 individual stocks. I was wondering if this is still the case. I started buying GDX last week, but news from the UK about an ETF there has me concerned.

http://tinyurl.com/6jxlcn
ETF Securities products plummet up to 50% on AIG fear
Shares in ETF Securities products, which are backed by AIG, were down as much as 50% this morning after US insurer was downgraded by credit agencies S&P and Moody’s.
ETFS Precious Metals dropped 50.68%, ETFS All Commodities dropped 54.7%

http://tinyurl.com/6xxrsk
AIG fears cause securities trading to halt
Shareholders were left unable to trade popular commodity securities yesterday, due to fears over the future of their backer, AIG.
Banks and brokerages stopped making markets in the Exchange Traded Commodities (ETCs) backed by the troubled insurer and sold by ETF Securities (ETFS). The price of the stocks also plummeted due to the worries over AIG.

[Bill Cara note:

I think you have a point. Kaimu has been making it for a couple years now. An ETF is supposed to be an index of underlying prices, but if the underlyings cannot or are not properly priced, what is the ETF worth.

I have been having meetings with an exchange and with bankers and consultants to examine to possibility of starting a series of Managed ETF's that would be cross-over product between an open-ended fund (daily NAV posted) and closed-end fund (active portfolio management) where the shares would be exchanged listed and invested by sector or geography in a select list of top quality companies, based on our timing methodologies. There would be no fees or expenses charged to the fund other than our manager performance fee, and the trader would pay the low commission charges of an electronic broker. These ETF's are concerning me. When the market got smashed on Monday, XLF was down -9.7%, the Broker-Dealer component was down only -9.0% and the Banks down just -8.4%. What's that all about? I certainly no longer trust the JPMorgans, Barclays, AIGs, etc, who operate the ETF room in the market casino. I figure it's all rigged.]

AFTER the market crashes on the open, that is:)

Hi,

Not just in the US should flags be at hapf mast.

From a European perspective, I would like to express my concern regarding what will a bankrupt military empire do to try to retain its supremacy.

God forbid something of that nature can happen, because if that is the case, then the coming years of our adult life may be completely wasted by the economic, social and sometimes personal conequences of all this.

I sense that the period between now and inauguration day is very sensitive, and I keep praying that no more than "this nonsense" is inflicted upon the world.

As for trading:

I see a completely intervened market, in which it makes little sense to try to do anything other than remaining calm and stcking to the straegic assets we believe to store value.

Can intervention continue untill November 4th?

That is the million dollar question.

Have a great day.

shark- constellation party's still on...they're breaking open a new keg on CEG...

see a lot of Cara 100s in the AZ...

That Constellation thing was WILD yesterday. Just WILD.

I also like AUY in here if gold has a day.

BH- don't forget to sell...;) don't let that flashing sixty keep you from changing your target if that seems prudent...bail at 55 to stay alive?

2nd,

I'm playing it by ear. IMHO, this market has a long way to drop and tech stocks are still grossly overvalued.

If one believes in Bill's DOW 10000 call, why sell before then?

Regards

Tried a little CEG @ 29.96

Bill,

Your opening statement on gold funds was just in time to prevent my selling. Thanks.

Where did we go off the rails? Well, it looks to me it began by removing the protections instituted as a result of lessons learned in the 1930s.

If you've read, "The March of Folly," you know how stupid committee thinking can be — The Reformation, the American Revolution, Viet Nam War — people keep trying to set a new record.

My daily reading here has saved me a lot of money already.

i'm with you bull hunter - tech stocks need a good beat down and expectations are way too high... in QID at $42 for a couple months...really starting to pay off.

CAF @ 24.98...

BA in 50's

Took some CEG off @ 37.83...thanks 2nd...that had fallen off my radar from yesterday.

gold just jumped, but the USD has barely inched down?

exogenious events happening?

USD @ 33.24...
QLD @ 61.51...

UYG @ 18.35...

re gold: this may be why:

www.cnn.ca

(CNN) -- Suspected Al Qaeda disguised as security forces launched an explosive assault ck on the U.S. Embassy in Yemen's capital, Sanaa Wednesday killing 10 Yemeni police and civilians, officials said

Goldman and Morgan Stanley are being pummeled. How much balance sheet does the Fed have left?

left out GDX (earlier) @ 30.76...

I think it was in the WSJ.com comments section that I saw a rumor that suggested a possible merger between Morgan Stanley and Goldman Sachs - it doesn't seem very far fetched now - anything is possible at this point.

[Bill Cara note: MS and GS were purported to be the strongest firms on Wall Street. As you know, on several occasions recently I said that the trading in GS was rather dubious looking -- like there were some heavy duty internal conflicts. I think both are in trouble and the amalgamation, if it happens, is just going to be an attempt to hide the crapola on their books that they (especially GS) have been saying doesn't exist. I also believe that the MER takeover by BAC was the same situation. Both parties, but especially BAC, are hiding bankruptcies. At the end of the day, you will see where I figured these mergers were about to happen and that I was asking for the SEC to send in teams of independent forensic accountants to determine how much fraud has gone down here. [I did not say, "may have" gone down.] When OPM capital (Other People's Money) blows up, there must be accountability. Self-regulating entities like the Fed and HB&B will not do it. If the SEC doesn't do it, and that action is supported by Congress, then the People have lost. Game Over. I sure hope not.]

2nd
Buying BA/CAF/GE/USD/QLD/SSO
will go upto 50% of my capital

ESLR- out at 5.46...

TBT @ 58.55...

long ROS at 29.79, buy stop limit 31/31.10

capitulation yesterday at RSI 7 day =7.8, 3.8 this morning. Hourly MACD diverged.

2nd
Any interest in RSX?

[Bill Cara note:

Paulson, Putin? I suppose it doesn't matter really. Russia has phenomenal natural resource assets, but there are growing concerns with the ex-politico and KGB operatives who are now running these companies. If they were not to be trusted or lauded for their dubious performance in their previous roles, why support them now? I think there are many incredibly talented young business people in Russia today, but the system is broken -- just like the US system. It will take time, I believe, to see the development of a post-Putin Russia. The next few years will be a time for Brazil, India and China to make strides against the rest.]

vinod- with best regards to Vad, I'll take China and India over Russia..

Dr Cosa, looks like a technical breakout,I posted the chart at 8:09 suggesting it was about to happen. Hopefully this will have some big legs!

Regarding ETF securities.
Even the ETF's that aren't affected by AIG counterparty risk, aren't priced in a fair way by the marketmakers. What used to be a spread of 5 or 6 cents on the ETFS physical silver contract up to yesterday, now has jumped to a spread of 18 to 20 cents. When you buy a contract the price is accurate, but selling means get robbed by 18-20 cents.

ARU Update

We have hired a geologist to provide a second opinion on the validity of the decision not to upgrade the resource.

We are also in contact with a Law Firm to provide an opinion on numerous flagrant reporting/disclosure violations as well as some flagrant insider issues.

Lastly we are getting exact details on the ability and process to withdraw tendered shares.

All of this info once compiled will be communicated to industry.

[Bill Cara note:

Aurelian or not; if this is Agora.com please don't post your stock promotions here. My closest friends in and out of the securities commissions know what I think of your stuff. I'll leave it at that. If you are not Agora, and you are not promoting anything, please accept my apologies, but understand that I am not an organization like agora; I have no time to personally supervise this board.]

http://www.nasdaqtrader.com/dynamic/symdir/regsho/nasdaqth20080916.txt

Here's the short list in discussion (I think)

re:RSX.

If one runs a comparison between RSX and IFN/FXI, RSX 7 day RSI ), RSI 7 day is 20.

GDX- out at 32.95...

Or gold may be up due to the stock market in Russia closing in the middle of the day for the 2nd day in a row. It dropped 10% in one hour
http://tinyurl.com/5m26th

Good morning - New loan Fannie-bound 30 yr loan rates jumped from ~5.75% yesterday midday to ~6.0% today. Must be to make the ultimate mortgage backed securities more attractive investments. Happy Trading All

repost

compare RSX with IFN/FXI, RSX 7 day RSI <10.

compare RSX with IEF, RSX 7 day RSI =20.

Draw ur own conclusions.

Good morning everyone from SoFla

RE: Boeing and AIG tied at the hip

Is the bad news being priced in now with the fate of International Lease Finance Corp in doubt?
ILFC is a large lessor of BA jets.

Dreamliner delays, USAF Tanker Deal, Union strike.

Bill's previous comment on BA looking attractive around 60 is in my head.
The AIG connection can only hurt.
My first position into BA is a bid at 59.01 this morning. Now sub 59 and dropping.
Huge volume.
Anyone with an opinion?
Vinod, you mentioned BA; are you scaling in here as well?

[Bill Cara note:

Just a notion; but watch for a new Federal Export Trade Bank to pop up in Washington to help finance those Dreamliners that foreign purchasers cannot pay for since GE Capital and their peers no longer have an open Window at their bank.]

Gold going vertical here. Enjoying this. Hopefully not just a headfake.

Re: BA
correction: ILFC is a major buyer of new BA jets, not a lessor, based on today's WSJ story.

kp84

What a fabulous morning!

We all made $ today I think. CEG, MU, AUY, ESLR, just about everything's done well today.

If you can't make money today you oughtta take a look at your career choice!

Has anyone else had trouble with Scottrade "locking up" during busy times lately? I called the guy at the branch and he said they get complaints about the feed all the time. Any experinces?

2nd_Ave - that would be 31, right

Bull Hunter

Any thought on when you might exit QID?

S&P and MS about to take out the lows of the day. TICK at -1000. I don't think we have seen real fear yet. On Monday, many of the worst banks and the retailers were not damaged at all. When everything is cascading lower together then fear and panic have hit for real and we can get a washout low.

John E- ?

INTO QID @$50.60, DXO @$11.32 This baby's going down more.

GSS looks like it MAY break out above the 20 day and engulf a bunch of days

Vinod,

RSX - I think Bill said to stay away due to political risk

BA - Bill recom @ 50's, I have some @62 basis, will add to my position. you go first and I follow you

Questrade Webbroker essentially non functional in Canada at the moment unless it's my ISP, but I doubt that. A lot of volume?

Gold:Silver ratio at 74. It hasn't been this high since the bull run started in 2001 when it was near 80. Probably a good time to sell gold and buy silver. The recent average is around 50. That would suggest $16 silver @ $800 gold.

CAF- adding at 23.80...

Bill, do you have any opinion on the shocking news out of Primary Fund (part of the Reserve Fund, who invented the money market fund 30 years ago)? Only 2nd time in history that the buck has been broken, with money market investors losing money!

You'd think that this would be top news on the front page, yet the news seems to be suppressed.

New York Times: http://tinyurl.com/5o3638

Bloomberg had an article, but it is nowhere to be seen now.

[Bill Cara note:

No comment since I am like all of you, stunned that Inventionists are using fingers trying to plug holes in the dike you can drive Hummers through.]

Troubled was triggered by LEH.

In Canada, Sunlife and Manulife lost over $1B in LEH this week, and they have money markets.

re: RSX

Could say the political risk is higher in the US.

IBN @ 23.78...

QT,

Somewhere around DOW 10000 or lower.

IMHO, this market is screwed for an extended time period....many shoes left to drop.

Trying to keep in mind:

"Always sell too soon" - Bill Cara

Regards

QLD- adding at 60.37...

kp84
got 100 BA
I also had $60 Bill mention in my mind
Thanks for Information

BH, re. shoes yet to drop, this market is a millipede.

Bull Hunter

I am trying to ride this wave down as long as possible. In the past I either sold too early or stayed at the party too long. Got 2 trucks loads of QID @39. Give me a heads up when you pull the tigger. I would appreciate it.

re: TED spread
At market close last night I noticed that the TED spread was 2.17 as the markets rallied. I thought Hmmm. I regret not buying a few shares of SKF.

Today the TED spread (difference between LIBOR and "risk-free" treasuries) hit a high today of 2.85 and is 2.79 (last I checked). As a comparison, it was around 0.5 before the credit crisis and hit a high of 2.4 during the August plunge.

If anything, the crisis is intensifying.

BA bid hit 58.73
and look how it falls/

Vinod, I like your style.
Me, I'm impatient. Tend to buy in the Accum. Zone and not wait for the buy signal.
"I couldn't resist" is a common rationale I've had lately. Then the buyer's remorse.

SiO2,

Speaking of millipedes.....how 'bout that insect, Keith McMahon, suspending dividends on AG.UN?

Regards

Bill,

Looks like we got the answer about gold, specifically what will make it rise...

Answer: Total financial meltdown.

[Bill Cara note:

The Associated Press
September 17, 2008 at 10:14 AM EDT
WASHINGTON — The has announced that in an effort to help the Federal Reserve deal with unprecedented borrowing needs resulting from the current credit crisis, it will begin auctioning debt for the central bank.
Treasury officials said that the new program would be part of the normal auctions it conducts to finance the government's budget deficits, which have been soaring because of the current economic slump.
Treasury officials did not provide any immediate details on the amount of debt that it will sell or how often such sales will occur.
More to come…

Wow! I'm sure there's more to come.]

Somewhere there's a "farmer" with a smile on his face...

Questrade down here as well.
Causing panic for many I'm sure, but saving people from rash decisions too perhaps.

BH, LOL, wow! Not unexpected. Their dividends must be flowing to the lawyers, they are feasting.

Why would anyone now hold an income trust that pays no dividends...

XLU utilities broke the long term 61.8% fib @ 33.50 yesterday & bounced strongly interday. (ratcheted down some puts successfully on that, thank you.)

If it break through that area, which I expect eventually, the next fib is - drum roll! - the 59% @ 29.90.

This may take a few weeks/months, but it might go lickity-split with a little help, or lack thereof, from the credit markets.

questrade back up. Missed whole setup this AM but did get out of AIG at about $3.25 average yesterday using the David method while I spent a day on the golf course with the owner of a cdn mutual fund company. He admits to being moody, and having the occasional sleepless night these days. Not yesterday. We enjoyed a perfect Vancouver day. Night before was at dinner with another MF manager. He said they looked at the trades $500m of Cdn blue chip commod stocks sold by GS in two days last week on TSX. More in NY of course, but he couldn't identify the sellers.

OUT of 30 CSX puts @ $3($1.65 cost), 82% profit one week. Thanks for the good call on that MikeNYC!

Sold DGP @ $17.85, SLW @ $9.40 nice runs on both.

It has been a good week!

I am sure that more shoes will drop, but I am not sure what the market will do in the next day. I will just sit tight with 95% cash for now. Happy trading!

maromatics,

You may have a legitimate concern, but I think once Bush is out there will be a much less aggressive approach and less alienation between the western countries. Iraq was not an issue to be addressed with an invasion. 9/11 was not a national conflict, but an independent radical Mislim one. I'm concerned when I hear Great Britain is allowing Shia law.

9/11 is the only attack which gets coverage over here, but Spain, France, Sweden ad others in Asia have had significant problems with these radical religionists also.

Some day we've got too get organized. Unilateralism has too much risk/reward in the 21st century.

IWM (R2K) has held yesterdays lows so far - the relative strength stays intact for small caps.

BX and FIG are back down - so much for those as an indicator for now.

2nd
Hard to check market when I have full time Job to do

Does the US govt own 80% of AIG stock now?

i will exit QID when apple, google, and rimm truly crash - i think they have all been held up way too long. can someone tell me the upside to these consumer linked names? crackberries, ads, and ipods and macbooks? do you want to bank on that in this environment? they make up the majority of the nasdaq 100 (something like 50%) so it all depends upon them. IMO, the four horsemen will fall...

Damn, SLW is climbing out of the hole in good style.
If it survives, that means I have to study the funnymentals, amd I am so lazy.

Thanks, Bill et al, for the tip.

Bought 4 Dec 7.5 calls on Mond., one day too early as it turned out. So no real hurry.

rob d

I agree the 4 horsemen have to fall

Bill, after seeing the steps taken today by the SEC, I offered up my oinion in a letter to the Chairman and his staff:

Mr. Chairman,

I must commend you on the steps taken today towards addressing naked short sale abuses. With Congress, public issuers, and investors alike seeking to have you and your staff tarred and feathered for the egregious negligence executed under the umbrella of federal protection you stepped out today and threw caution to the wind and told us all to pound sand.

I fully understand that the Commission staff and the Office of Economic Analysis is not convinced that this is a real issue that is destroying public confidence in our Capital markets. I understand that the OEA is not committed at looking at this issue seriously by dedicating the time and resource into analyzing actual trade data before opining on how this may or may not impact our markets. And I understand that private meetings with wealthy short sellers such as Jim Chanos provide opportunity for the Commission to gain support material into the positions taken despite the conflicts such meeting may create. But what I don't fully grasp is why the general public must carry the burdens for the SEC's negligence. Why should we be the people who must work longer to protect our retirements? Why should we be the people who must cut our expenses because we can't afford to pay our bills due to the destruction of our personal savings accounts? Why should we suffer the pains so that people like jim Chanos and his peers can be provided ample opportunity to destroy public companies, local communities, and the financial stability of families across this nation.

Today the SEC took yet another half step to a whole problem. The SEC maintained loopholes in the short sale process so that certain short sellers would not have to carry the burden of expense in the execution of rapid short sales never intent on existing by settlement day. These are the very same short sellers who destroyed confidence in our financial markets and now the short sellers who will continue to destroy other markets and other public issuers.

Let me help you out here:

Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow

The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.
If a short sale violates this close out requirement, then any broker-dealer acting on the short seller’s behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer’s activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.

Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.

Under this rule there are serious flaws in the Commissions thinking.

1. To determine a lack of compliance to this rule it requires the SRO's or SEC to conduct an audit of the failing firms. These audits are not done daily but periodical. By the time the violation is identified the culprit is long gone with the monies and the markets manipulated by the potential abuse. This rule is a responsive rule instead of a pro-active rule.

2. This rule, as it stands will yield compliance violations at the BD level and will rarely result in penalties imposed on the originating seller. Compliance violations rarely achieve the penalty status as that which investors lost by the violation itself. This rule can likewise by circumvented by engaging in a separate violation; marking the trade long and failing that trade instead.

3. This rule does nothing to address the initial abuses of multiple locates on a common share during the time of trade execution. Since multiple locates can exist, fails will exist. This also allows, instantaneously, for there to be too many short sales executed at a single moment in time. Such trading creates the leverage the short seller need in order to drive down a market.

4. The day trader. How does this rule impact the abuses associated with the rapid day trading short seller? Using multiple locates and acting in concert with other hedge funds, a market can be destroyed within the 3-day settlement window and so long as the trades are covered by T+3 the SEC and SRO's have no authority to take enforcement action. This rule simply redefined the window of time a short seller has to abuse a stock and create profit and with sophisticated computer programs the systems will be set up to cover this window. If a portion of the trade falls into the settlement window the trade will fail but…the SEC does not require a mandatory close-out with guaranteed delivery, the Commission only restricts future short sales until it is closed out.

5. Close-out of fails. What ever happened to mandatory w/Guaranteed delivery? The NASD presented the SEC with an argument in 2004 that identified how failed trades were not being closed out because it was not "cost effective" for the failed party to do so. The SEC continues to fail in adopting such language. In fact, the Commission is aware that firms have engaged in rolling failed trades to restart the clock. Nothing in this law changes that tactic. Nothing in this law requires that on T+4 the failing member must go into the market at market open and purchase this stock under guaranteed delivery status. Without such specific language members will game the system to make the close-out profitable.

Mr. Chairman your time is limited but your legacy will live on forever. This Commission will be remembered in history as the most conflicted of all time. The Comission staff that allowed a group of bandits to run rampant across our capital markets and destroy so much of our nations family wealth.

There will be people who no longer can afford to retire, as well as people who will lose their homes and their familes due to financial ruin and it will all be due to the negligence of this Commission.

The Commission has failed to hear the voices of the people and instead has listened to those who have their own self-interest in mind. This is the grandfather clause all over again and this delay is only a delay that will most likely force Congress to step in and make law for you.

Shame on you.

Dave Patch

Financials and consumer discretionary, at least the ones on my screen, are rolling over.

[Bill Cara note:

The 3-month T-Bill is now yielding 0.16% pa. The money market is dead because no bank has the money to pay you a return on yours. Unless they can still those funds from you today, it's of no use to them. Thanks to their friend in the Treasury Department they have all they need -- borrowed from you and your children and their children without your permission. Actually, with the permission of the persons you elected to represent your best interests. This is a sad day for America.

Gold is up +$50/oz today because of the situation these bankers and their friends in govt have caused.]

S&P'S CHAMBERS: PRESSURE IS BUILDING ON THE AAA US SOVEREIGN RATING, NOTES THE RATINGS REMAIN STABLE

Wondering whether its worth it to buy QID and GLD today.

I support naked short selling...I am also ok with short selling with clothing on too.

So guys tell me some stories from the trenches today. What happened to you all?

USD index almost flat now

Treasury to Sell Bills to Bolster Fed Balance Sheet on Bloomberg.com : Gold Shot up after this

Are they going to print soon???

b0ss: CSX, nicely played. I posted the chart, but it's all you.

US AAA Rating: Can someone who knows the deal discuss the ramifications of a lowered rating? It's not something I see explored in detail anywhere.

Oh my good lord. TICK just hit -1500! I haven't seen that in my year of watching this indicator. Crash is a distinct possiblity here.

That is my question: the Fed expanding its balance sheet implies that it is going to print cash to buy bonds from Treasury, no?

moab,

I'm sure that Uncle Ben has green ink on his hands, even as I type.

Regards

moab,
What is a TICK ? Can you explain. I am pretty new and will appreciate a clarification from you.

Goldman Sachs is being taken to the cleaners. Quite a spectacle today.

2nd
Day is bad enough, all my tody's purchase are under now
and people here are talking that BAC/C/MS/GS are toast
I will not buy any more, will stay away

RESERVE FUNDS/NEED ADVICE

I am heavily in cash in my retirement accounts at TD Ameritrade. About a year ago, I made the Reserve US Treasury fund my cash sweep vehicle; I have a lot of my portfolio in that fund.

I am worried about a run on the Reserve funds, which already happened with their Primary fund, leading it to break the buck yesterday. I know that the underlying Treasuries will still be there even if the Reserve goes belly up. My concern is that my money could be "frozen" if the Reserve gets into trouble or cannot process massive redemptions.

Should I choose another sweep vehicle at AMTD? The choices are, in theory, less safe than the Reserve Treasury fund. I can choose TD AMTD cash, which is SIPC insured, or TD Bank USA, which is FDIC insured. These would be good choices--until the FDIC and the SIPC run out of money, which could happen sooner rather than later.

Any advice would be appreciated. I am under time pressures, not only because of the volatility in the market, but also because my mother is quite ill and I am unable to spend much time dealing with my portfolio.

Thanks.

[Bill Cara note:

I think the Fed will backstop the industry insurance, but I'd only use a safe bank and ask them to put something in writing about the quality of the product.

Here's something more:
http://tinyurl.com/4srbsf ]

Sandy

Check out this link and read what is written under the chart. This is a 10min graph of
Tick & Trin

http://tinyurl.com/6bs3xq

TICK is advancing volume minus declining volume. Usually this is in a range of 1000 (extreme buying) to -1000 (extreme selling). I've never seen TICK so extremely negative and we are on last ditch support.

Wow: Goldman is collapsing, as is Morgan Stanley. It seems to point to failure of the credit ring. Better have stops on your longs.

Bill Cara -He is the only one who is correct and right about Market and financial in this world

re-loaded AUY at 9 bucks and flipped it a little too soon, but money's being made.

GE down 8%.

AUY--in at 9.12 in the trenches.

ok...a LOT too soon:)

Where does the FED bailout line form? I would like to get on it. i wonder who is next? Citi, Ford, Wachovia, GM, Boeing, GE?

moab, thanks for clarifying!

Thanks to QT as well!

Hi,

What a fabulous day for my gold longs.

Simply fabulous.

Cheers!

Michael Randallbard - -

Who is the "we" who have hired a geologist, etc.? And who are YOU? Please explain.

[Bill Cara note:

Thanks Jock. After I read your comment here I went back to the posting you referred to and added this item:

Aurelian or not; if this is Agora.com please don't post your stock promotions here. My closest friends in and out of the securities commissions know what I think of your stuff. I'll leave it at that. If you are not Agora, and you are not promoting anything, please accept my apologies.]

Usually in the trenches I am catching buckshot in the ass but I'm getting better at this.

There are no investments anymore. Technology has facilitated ultra-short term trading, and that's what we all do now. In fact, holding a stock an entire day is a long time these days.

I'd love to know the average hold period these days. Bet it's about ten minutes.

Maromatics -

Don't worry. President McCain will take care of the markets, with the help of Treasury Secretary Phil Gramm.

And VP Palin will ensure that the empire strikes back !

Jock,

:-)

Thanks for making me smile. Twice.

Cheers mate!

Just 5 of the 208 Morningstar sub-industries are positive today:

semiconductor memory
silver
gold
non-metallic mineral mining
generic drugs

The weakest, investment brokerage - national, is down 21%

GS - Gone to the cleaners to drop their pants off?

maromatics,

I second your enthusiasm today.

I have to ask, since you have a nose for the thing - Would you call this a true reversal in light of the recent bailout events...

...or does it feel like a setup for a final PM shakedown and your opinion of selling and selling short at say 850-900 it pauses is still at play?

I know one can never be sure... I simply ask for how it appears to you as of now...

Thanks!

Offed the QID @$52.50, holding DXO while waiting for oil to reverse.

Nice pop for Au there, minors too! Hope to see $900 soon.

Look about below. Today may be known as Black Wednesday.

Thanks Bill for alerting us to watch for an upcoming opportunity to go long oil & gas equities- notably, juniors.

Here’s a contribution to build on that thesis.

Look at this from the Stockcharts market summary (for sept. 160 page:

http://billcara.com/assets/charts/2008_09_17_energy_BP.html

Note that $BPENER is grovelling in very very rare territory - more dramatic in the context of the above list.(I gratefully acknowledge korvus for constructing this link!)

Here's the chart - amazing! The energy equity universe as represented by this index is the least loved by a long shot!

http://stockcharts.com/def/servlet/SC.pnf?c=$BPENER,P

When this turns up, this is a low risk field position ( terminology of Tom Dorsey, author of the definitive book, Point&Figure Charting). Bullish percent represents the percentage of stocks in this energy universe on a BUY signal, according to PnF methodology – here 5.88%.

Another comment...yesterday, I caught a segment of BNN's Commodities Report - Brent Harris, reporting from Calgary, said he had been talking to Joanne Hruska, who told him she'd heard a rumour that one of the forces weighing on the downward price of oil is AIG...the rumour, which JH was attempting to track down, but couldn't confirm, was that AIG had a commodity portfolio worth $150billion which it was liquidating - 30% of which was oil.

Regards all.

[Bill Cara note:

Thanks joey, great stuff.

Now, for all, here's the most important point I will have made probably since I started blogging:

As soon as you see any kind of a bottom in the banks, there will be a rebound in the long-cycle Bear. All stocks are being turfed right now. Most gold stocks are lagging behind the move in gold because they have been caught in margin calls. Those margin calls will end after the banks hit bottom. Most traders will still be in a panic mode, but the smart traders will seize the opportunity to buy value. Gold and silver stocks will soar. The call options on the producing miners will perform very well. But across the board in the Oils, Basic Materials, Industrials, Technology and Utilities, there will be shares of quality companies that will be trading a historic lows of price to cash flow. If you think those companies have fairly well protected cash flow, then they too represent excellent tradeable opportunities. Go for it. I say this at DJIA 10700 and NASDAQ 2125 because the market is in the latest stage of the Bear. Ignore the Financials and Consumer Discretionary stocks for now. They will miss the first upleg of the next Bull. But the rest are close to their long-term cycle bottom. If your time horizon is a year or more your performance will be excellent, I believe. Yes, I do believe the market will hit 10000 and 2000 for the DJI/NASDAQ, but it will be the Financials and Consumer Discretionaries and those stocks that are intertwined that will be the ones taking the index down from here.]

food for thought:
S&P Oct 2002 lows of 780, Oct 2007 highs of 1580. Point spread 800. Today S&P is approx 1180 +- a few.

Do some math & think about potential fib points.

Just me thinking out loud...

Dave

Case,

I am too happy to be rational today.

Anyway, my rule is that a new primary movement starts whenever the price closes above the 25 DMA, which is the case today (unless it crashes in the last hour).

Strong resistance at 850.

Price target 900.

Later today or tomorrow morning I will post something more articulate: I am just enjoying the trip at this point.

After several very hard months in my personal life, it is great to feel this good.

As usual, DYODD.

Cheers!

3-month TBill yield is now .14% (0.0014) Can it get to zero?

http://www.bloomberg.com/markets/rates/index.html

Pointed out by miadhach this AM, initially at .17%!

Anyone noticed that VIX is at the level of March and Jan. low?

Clues as to why GS & MS getting roasted? Are they on Hedgie's book to be taken out next? Rumors that they did a job on AIG due to CDS.

Wonder WHEN the Lehman ETF's will close up shop? Probably about the same time bonds top out...

UYG at 16 handle looking attractive? Didn't think so!

1080 is the 61.8% retrace of the entire secular bull market and was strong support in 2004. I think we make it there, maybe by Friday. It should be very strong support, at least for a few weeks.

Is there a short or ultrashort homebuilders? I can't seem get any shares to sell short XHB

moab,

Agree, but Friday is quadruple witching day. Unknown what happens then.

Selected shipping sector stocks.

Do you think anyone is really looking at balance sheets?

Symbol % change
FRO -7.83%
TNP -5.21%
GMR -5.38%
TK -8.01%
EGLE -4.56%
OSG -5.99%
SFL -4.75%
NAT -4.14%
VLCCF -6.49%
DRYS -4.32%
OCNF -1.25%
PRGN -4.67%
DSX -2.07%
GNK -6.31%
ESEA -8.73%

Thank goodness for my gold's which are keeping me whole today.

euro slightly down vs USD now. Oil up just slightly. Will this PM sling shot come back down for another take off?

I say give AIG another $80B so they can put it in oil futures again! I've already got my ETF ready to go!

5 day trin was a good indication to be wary of and sell rallies yesterday. I must say the manner in which former blue blood firms are getting decimated is unprecedented. And quite scary. No time to be a hero-as far fetched as it seems I wouldn't really be comfortable buying S&Ps until 1075. Keep your powder dry and good luck. Let somebody else catch low. All momentum based indicators failed to mark a bottom the week before the 87 crash. And Mercury Retrograde hasn't even begun.

Thanks again, maromatics.

Apologies for not wishing you well, by the way - I was also too elated.

Fact is, the truly precious things in life do not glitter - but it's so easy to forget this the case when we have them.

All the very best for a quick and full recovery!

USA aaa rating

IMO. Downgrade = not good.
3A's can hold up a table imagine each A as a leg.
Take an A away, no way the table stands.

We, the world might all be in bread lines?

derrivatives would be triggered?

Millions, billions, trillions....

My stomach hurts.

RSCOTT - SRS is short real estate, There might be some builders in there, not sure but you can check on holdings at Yahoo. When Yahoo runs their ticker it crashes my dinosaur...

Bill, you are my hero.

uh, guys, have you seen this??

"The SEC adopted two regulations today forcing traders and brokers to close out short sales on all stocks, amid concern investors are driving down prices by flooding markets with sell orders. A third rule makes it a securities fraud when sellers deceive brokers about delivering borrowed shares to buyers. "

via bloomberg: http://tinyurl.com/5tnmhh

If they really close all open shorts in order to start enforcing the naked short sell rule, there's gonna be a nasty rally here.

Rules go into effect tomorrow.

Check out CEG, will not be too long before we all can buy at 13 again.

Guess I should have dumped all the CEG.

I saw a bumper sticker yesterday that said "Buy Anything Gold!" Thought that made a nice political statement...

AGO is collapsing.

From Catherine Austin Fitts:

Slow Burn Capital Controls

A broker reported to me today that their clearing agent is requiring them to mark purchases of AAA sovereign bonds denominated in foreign currencies as “speculative” investments.

Pressure to do this apparently is coming from the U.S. Securities and Exchange Commission (SEC). This means if Congress and the administration request that the SEC take action to “stop speculation” a mechanism will be in place to insure that U.S. investors cannot protect themselves from a falling dollar.

Lest capital controls domestically inspire you to leave the country, you may want to educate yourself about the exit tax that was passed by Congress in the Heroes Act of 2008

http://solari.com/blog/?p=1556

Catherine and News & Commentary, September 15, 2008 at 6:09 pm

[Bill Cara note:

Excellent reporting. Thank you. Whatever the SEC is doing now is under duress caused by their friends in HB&B. It's got to stop. Congress needs to have an emergency meeting to haul in Chris Cox! The SEC is not protecting Americans; they are trying to save the system for the credit-mongers who have controlled it since the Securities Acts of 1933-34. Those same bankers from JPMorgan Chase et al et al destroyed the US system in the late 1920s, bringing about the Great Depression. If the SEC kow-tows to them again; we're headed for Great Depression II. Don't do it Mr. Cox. Books will be written about your legacy and forever more your offspring will live their lives in family shame.]

Hey, if they close my bank, I'll just go to the ATM!

Norm: It's one of the reasons why I'm seriously thinking of taking ownership of my Cdn Oil Sands stock by ordering the certificates. True I won't be able to trade them, but can cash them in when/if things get back to normal.

Eventhough, I'm in Canada and with RBC Direct Investing, I find hard to believe that we will escape all of this.

I just don't know anymore... thinking about this since the weekend.

What are all your thoughts on this?

Thanks

bill- thank you for your note appended to the 1203p post...

Optionoracle, thanks for sharing the 5 day trin indicator, intend to follow.

Thanks again.

Look at CALM here. Went up big earlier (I am assuming on a short squeeze), retreated nicely

Fear is so palpable in the air today, we must be nearing the reversal. Calling exact bottom is a sucker's game, but we are much closer to it.

Slippery slope here we go!

Morgan Stanley (MS:
morgan stanley is pondering whether it should stay independent or merge with a bank after the stock's steep pullback, CNBC.com reported late Tuesday.

[Bill Cara note:

There has been a bit of relief here in the DJIA for a couple minutes. But look at the money flow. The three biggest losers, AIG, C and GE, have monster volumes -- as big as the other 27 combined, I'm guessing. So the money flow is actually much worse than the index level.

Re CNBC; when all is said and done, they too are culpable. Yesterday, I sent a note to Bloomberg's Heidi Tan to tell her how much I respect and appreciate the work of Kathleen Hays and Pimm Fox. Other than Rick Santelli, who of any substance (and help) does CNBC employ? Nobody.]

Throwing out the idea--it's possible Fed could come out with an emergency rate cut this week; yes, right after their meeting and statement yesterday.
************************

IRX (TBill) rate still lower than Fed Funds. Agree with headlinecharts blog that we need to see TBill rate above Fed Funds as one indicator market is bottoming.

http://headlinecharts.blog.com/3748446/

Posted by: Seamus at August 27, 2008 11:36 AM [link]

Looks like we’re a long way from a bottom.

ALOHA !!

Man oh man ... where do you look when everything is collapsing? Our elected leaders are now scurrying to push the blame for all this onto someone other than them! How can they possibly have time left to actually "solve" any of these catastrophes that are now cascading all around them? They're too busy pointing fingers! VOTE RON PAUL! We need to send a message to the status quo! If you are insured by AIG then dump them and go to a different insurer. There are all sorts of ways to voice your displeasure, but the most effective is your wallet!

ON REDEMPTIONS
This is key because the GLD and SLV ETFs will get tripped up here. The increased spreads in the GLD and SLV confirm to me what has been happening in the physical markets. There is a disconnect growing due to supply and I pointed out in a post last week that GLD dumped over 44tons of gold and someone bought that gold(a point that is never discussed here)and I doubt GLD will get it back from the Chinese. They sold 44 tons at the bottom! These two ETFs GLD and SLV will NOT WORK when supply is gone. From what I see they are flawed because they track prices and there is no way to account for supply in their business models. TRACKING PRICES IS KILLING THEM! Once people figure that out and REDEEM their fraud tickets then GLD and SLV will need bailed out! HA!! They will become paper on paper on paper and whats left in their vaults will be JP MORGAN'S not yours!

My main focus on investments is: KNOW WHERE YOUR MONEY IS DAILY!

When you buy an ETF you will never know where your money is. It goes into a OPM black hole and right into the hands of JP MORGAN. If you want to trust that game then GOOD LUCK!

In the end there will be a rush to the asset or assets with the least exposure to the liabilities that HB&B bring to the markets. There will be a rush to stocks that actually have "backing" and are not just "paper shufflers" full of DEBT! I have already posted here where that is and its been that way for 5000 years! I believe we are now seeing just what entity is truly the "barbarous relic"! This is the same game that the paper industry has been plying for hundreds of years. MR BANK says, "Here, let me hold your wealth and here is your paper receipt!" HA!! Historically these guys have never returned your wealth to you when you need it or in the same quantity you gave them!

Here is the other key issue ... LOOK WHAT YOUR PROFITS ARE DENOMINATED IN!

That is why I have been saying that "Vast fortunes will be lost trading the markets successfully!" What will you pass onto your kids?

ITS THE MONEY STUPID!

The supply of PAPER will never dry up and I think this day, today, shows you just how unlimited the MOUSE MONEY is and I believe what we are now seeing is just the tip of the iceberg in terms of M3 and TOTAL MONEY! There is however, a very limited supply of assets with NO LIABILITY!

The physical markets in gold and silver have been disconnecting from PAPER for a month now and I even got a desperate e-mail from APMEX begging me to sell them some gold and silver! It was funny because they were asking me to sell at the bottom of a major POG and POS correction like GLD and SLV did! APMEX should send their e-mail to GLD and SLV! This is a major reason I am at the PERTH MINT. The PERTH MINT is surrounded by major gold producers in one of the most resource rich areas of the World. I believe if the PERTH MINT ever has a supply issue then by that time the COMEX will be in Chapter 7!

GOLD HAS NO DEBT!

By the way ... I love Patchie's letter to the SEC ... RIGHT ON! Yeah, a lot of these people that have been the puppets of HB&B for so long now need to start looking seriously at their LEGACY! It must be near impossible for these guys to look in the mirror today! Hummmmm, maybe not! What needs to happen is there needs to be a law that says IF YOU PAY FOR SHARES AND THEY ARE 100% PAID FOR THEN THEY CANNOT BE LOANED OUT. Here again though because of a loophole these ETFs and broker dealers can loan your shares out to be shorted and they get a fee for contributing to the demise of your position. YES ... ETFs loan the very shares out that you buy into! In other words the ETFs that hold actual shares in the ETF portfolio loan them out to be played against your position. Why not? YOU DON'T OWN THEM the ETF does!

IT'S TEN PM ... DO YOU KNOW WHERE YOUR MONEY IS!

IT ALL WORKS UNTIL IT DOESN'T ...

CP
thank you sir, that works! it is 2X the DJ US Real Estate index ($DJUSRE). now looking for a good entry price

"2nd
Hard to check market when I have full time Job to do."
Posted by: vinod at September 17, 2008 11:02 AM

my problem exactly...i'm trying to get away from the intraday trading, as it's taking up too much of my time...

for now, i'm going with the assumption that we don't need to buy the cheap tickets in order to catch the train to new highs...financials may be toast (quoting your colleagues), but how far off can we be buying some of the other sectors now?

sandra.

I won't answer your question but I am sure someone else here can.

There are many people that could elaborate on you concern.

ALOHA !!

I LOVE THIS ...

"Lest capital controls domestically inspire you to leave the country, you may want to educate yourself about the exit tax that was passed by Congress in the Heroes Act of 2008"

HEROES ACT OF 2008!!! What a load of BS ... They name these Bills and Acts, like the Patriot Act, as if they are ALL AMERICAN and APPLE PIE when they are actually a direct attack on our rights under the US CONSTITUTION and The BILL OF RIGHTS!

YOUR TAX DOLLARS AT WORK!

Oh hey, who would ever question the integrity of the HEROES ACT or PATRIOT ACT?

One thing ... Your wealth can still leave the country but not you ... unless you can afford it!

Could be a day when we see a mass exodus of Americans into Mexico! HA!!

Chickenpookie
you can not go to ATM
they will be stolen overnight and gone

Shark
RE: Holding Period

I wait out the shakeouts. Mostly my holding periods can be anywhere from 1 week to 1 month. I base my positions on when I expect things to turn (given momentum indicators and overall macro trends and news) and how much volatility is inherent in the security I've bought. I have learned too many times in this market that if you've seen green and haven't sold that day, chances are you'll be booting up to a red mess the next. I may wait out an underwater position until it turns for several weeks. The second it turns is the second I take my money. If I believe from the reports, fundamentals and technicals of a company that it should tank (but is being propped) I wait. Fundamentals play a big part in this. Sure I get hit from time to time like everyone else but that's the nature of the game. Just mitigate the risk.

Financials have been the best example of this. This has been the easiest trade of all. It's like a reverse 1995-2000 bull - just throw a dart at the board and you can make money. Shorting, long puts - give these a 3 month time line and I've seen gains in the 45-60% range (it goes with the "you can't hide the stench of a dead body forever" theory). Selling a week or two before expiration date has been great. The big boys aren't trying to shake out the shorts at that time.

I've learned so much just reading and practicing what others have learned on this board. I almost feel there is so much experience that it should be archived in a collaborative book deal. I can't sing Bill's praises enough. Nor can I thank Vinod, Old Goat, Kaimu, Jock, MikeNYC and the rest for all of the comments and outlook. This is a VERY difficult market indeed. As Bill said, as long as we remain calm and reasoned (with enough ammo behind us) we can come out on top. Let's stick together and keep our heads clear.

Fear is so palpable in the air today, we must be nearing the reversal. Calling exact bottom is a sucker's game, but we are much closer to it.

Posted by: Vadym Graifer at September 17, 2008 12:49 PM [link]

I have same feeling

ALOHA !!

PMV is now worth more than LEH!

ECU is worth more than FNM, FRE and LEH combined!

Whats backing PMV and ECU?

Whats backing FNM, FRE and LEH?

Well said mebea.

Please correct me if I'm wrong, but the TED spread is now 2.98 % (3 month LIBOR or 3.07 minus 3 month t-bill of .09) This ration is like 34!!! Has the TED spread ever been 34 times?

Constellation Energy moves faster than a lap dancer on crystal meth!

TED ratio is the highest it has been since 1987 crash apparently.

Question for the pros here :)

Gold and Silver are still rising at the moment, is this a good time to get out miners like SLW? My feeling is to hold and ride it up, but I'd like a second opinion.

Thanks.

one of the talk here is retail investor are getting out of Mutual Fund a lot with in last six month.
It will take long time before they come back

shark- are you playing CEG?

sandra,
I've heard it time and again by money managers on BNN etc that Cdn banks are not in the same place as US. I wouldn't be worried about RBC or BNS or TD. Bill can confirm. I think our banks are obscuring less, just their practice, and the fact that 70% of their revenues come from commercial and retail banking. With our resource based economy, we're not going down unless what Bill and others have talked about today comes about, and then we've got bigger problems.
Personally can anyone on US side comment on Schwab, owners of Questrade, where my trading money is? Are they clean?

Hear the sound of things being flushed down the toilet? That's washout coming in the echange near you

Babybear,

You took the pain.

Why not let the profit ride?

Regarding the Heroes Act mentioned above, which puts a huge tax whack on people trying to leave the country with their assets (citizens and long-term residents:)

This bill was sponsored by Charlie Rangel, D. NY.

Here's the best part. Rangel is now embroiled in a career-threatening scandal involving overseas assets and failure to report large amounts of income derived from that asset.

Oh, the delicious irony.

The strange part is the NY Post, which is all over this story, of course, has not yet drawn in the thread about and hypocrisy of his Heroes Act sponsorship.

I may send a suggestion to Chuck Bennet over at the Post to look into that aspect.

Now we have a very clear picture of Shark's dating pool.

No..CEG is a dngerous game. How did it treat you today? I am out of AUY having sold too early twice, and waiting for the proverbial pullback in GSS.

I've seen a few floozies in mirrors at 3 am!

For all of you interested in such things, the S and p 500 has made an inteesting double top, first in 2000 and then about a year ago. It SHOULD mean a lot more downside. Vad, would you take a look and tell us what you think?

Hey Sharkie did you get bit by a bigger shark?

What happen to all those historic opportunity trades of yesterday.

Just joking buddy, good luck.

When was the last time Gold and Silver saw 10% moves up?

FOREIGN NET PURCHASES

Anyone notice this number reported yesterday? I first thought it was a typo....Down from $53B to $6B !! Foreign invetors heading for the exits??

AIG LOAN: The terms

24 months
$85B
80% equity stake/ warrants or equity participation notes
Interest Rate Libor plus 8.5%
Taxpayer could profit if AIG recovers at end of loan term

OFF TOPIC

There's some chat on the internet that Bush has approved releasing 1000 more GB 39 bunker busting bombs to Israel and has greenlighted the attack on Iran's nuclear facilities.There is a news report of uranium gas being transferred or missing in the Iran facility...an amount that could make enough enriched uranium for 4-5 bombs.

Also a rumor that Bush will suspend Nov elections in October by calling an economic emergency and this may be preceded by another domestic terror attack. The US Embassy in Yemen was truck bombed today.

I hope these stories are false...we wait and watch

MikeNYC (post 1:43 PM)

Great comment! Where are the reporters and investigators to highlight this extreme hypocrisy? If anyone knows contact info...would be great fodder for Daily Show.

Thanks to all who post and share here. I am underwater but not significantly due to warnings posted here. Last year has really been a drawn and quarter event for my investments.

To Mr. Cara - any updates when your trading service will be up and running? I have three family members ready to sign up!

Good luck to those actually trading this market - and winning!

If you are a foreign entity with money invested in short term treasuries, you are collecting .0009% on your money. Why would you keep that money here in the US? I have to imagine the next big move will be against the $USD.

[Bill Cara note:

Can Americans not buy Cdn or UK T-Bills through an electronic broker?]

shark, the speed and sheer scale of the current developments makes such long term charts not very relevant, IMO. My feeling is, we are in for an unforgettable selloff, throwing out babies with soap, water and pieces of washcloth. The longer interventionists stave off the selloff, the more spectacular it's going be. Keep your powder dry and get ready to catch babie.

"catch babieS"... plural... it's not like there is one baby worth catching in the entire market :)

Bill, tremendous call on crude and metals today. Wizard! I have been watching my Canroys get beaten down, and waiting for the turn. IN spite of the price action, I sleep a little better knowing I am in loonies, while Hanky Panky is breaking apart the free markets.

Macro, I am a lousy market timer :) Thanks for the reply, it sure did give me confidence. I am going to hold on to my SLW a bit longer.

I wonder if gold/silver miners can go back to the highs back in July given that the fundamentals are clearer now (the worst is happening?).

Eagerly waiting for Bill's judgment on this.

just saw a baby flying off the roof....

developing.

UBS at 52 week lows.

http://finance.google.com/finance?q=ubs

[Bill Cara note:

Can Americans not buy Cdn or UK T-Bills through an electronic broker?]

I can't even buy US T-bills through my electronic broker (Interactive Brokers won't process a trade for treasuries in amounts less than $1M USD).

I researched this with IB. The only way around this limitation they have is to transfer the money away from IB, buy treasuries somewhere else, then transfer the treasures back to IB. I was amazed when I learned this.

nevermind. all time low

Bill Cara note:

Can Americans not buy Cdn or UK T-Bills through an electronic broker?

Not through TD Ameritrade. Great question for the board though.

I'm seeing close to 20% gains in some of my PM's today. Thanks to whoever it was who put up that chart showing the emotional reactions of traders at various points on the curve. I was emotionally at the barf point, but I thought, based on that chart, that I should ignore my panic and hang in there. If anyone remembers this chart, perhaps you could repost it? Gold has been going up like a rocket today. Makes me think of when it went practically straight from 700 to 900. I was afraid to get on and missed the whole 200 point move. Today, I'm just going to jump on the train, regardless. Too bad I have a day job in a market like this!

OK, Bloomberg now has the 90-day t-bill yield at 0.02

I guess today is when we start having to pay the government to accept our loan to it.

Is this THE "Trade of Gold"? Should one buy into it now? Or should this spike be sold into, and buy into it later (I already have quite a bit and have been suffering until today)? That, to me, is the question. Thoughts on this matter? What can the government do at this point to reverse this new trend in the precious metals and associated mining shares?

TBill: http://www.bloomberg.com/markets/rates/index.html Look at the chart.

I was joking when I mentioned a zero yield.

AAPL $129... (not an endorsement)

BCE down 8% to $CAD 34. The bought deal is at $42.50. If you believe C will not go bankrupt until December, then it's a deal. Bought Dec 35 calls (small position).

I'm finding this 11% rise in Gold bullion price, and 14% in Silver bullion prices hard to stomach.

I am NOT long Gold or Silver, mainly was waiting in cash for a while and played the "sell puts" game with big miners and covered on rapid recoveries.

Still, I feel very left out today, and somewhat confused at the (absolutely) massive turnaround here!!!

Is there any sound rationale to all this?

[Bill Cara note:

A couple days ago, after Fannie and Freddie went down, I believed that it would be only a matter of days before gold would soar against the $USD, regardless if the Interventionists were pushing the $USD up or gold down or whatever. Confidence in the US financial system was irreparably harmed with the bail-out of F/F, now both penny stocks, still trading only because so many financial companies would be immediately bankrupt if F/F were declared bankrupt. Then I called for a Buy on Goldcorp and afterwards the price soared +13.7% in a single day, despite the pog going nowhere, being under the Fed's control for the time being. Then Merrill, Lehman and AIG all declared distress, meaning they needed help or would have to declare bankruptcy and be in a position not to settle trades with counter-parties, which would sink them too. So BAC stepped up for MER, but nobody is fooled that the combined result is a healthy company. When LEH declared bankruptcy and started selling assets to other banks and dealers, that move was just a ploy to make people think the Treasury wouldn't come to the rescue of HB&B. The Street took that as a flat-out lie by Paulson. Then in the post-bankruptcy filings, we discover that the Fed, "with the full support of the Treasury" paid JPMorgan $138 billion of Lehman's debts after the bankruptcy. So, now the Street knows that the Treasury/Fed are flat-out stealing the People's money, which essentially makes it worthless. Then AIG is given an $85 billion loan by the Fed in return for 80% of the common stock, which is worthless, so that was an $85 billion gift from the People because the Fed is now “fully supported by Treasury”. The $USD is basically worthless now on Wall Street. I am certain that the only reason it trades at about 0.79 Euro is because (i) the Euro is in the same shape because their banks like Barclays, HBOS. UBS, and many of the rest are in the same situation as Northern Rock Bank, which is now owned by the UK taxpayer, and are worthless, and (ii) the Fed is supporting the USD in global forex markets because the US Treasury Secretary pulled off the biggest theft in world history when he put the People's Treasury behind the Fed, which now has a worthless balance sheet, complete with worthless syndicated real estate mortgage paper that HB&B created and couldn't sell -- even to themselves. What should come from all of this is the biggest inquisition that (worthless) money can buy. These bankers – a handful really, probably not more than a dozen of them – have destroyed the wealth of the People, which will cause personal hardship for many years. The only people who were saved (and will be saved) are those who hold physical commodities without debt, like land, oil, gold and silver and collectibles like antiques and pieces of fine art. The rest is paper and it is worthless if not backed by either economic or intangible value. Now, the upside is that the pain in the future in terms of a worse lifestyle will be offset by a new global currency agreement, which many of you will remember I started saying a couple years ago, and that agreement will permit international trade to continue. Else, why would the vendors in any country sell to America and receive USD in return. This crisis will be resolved when the General Agreement on Currencies is struck by the G-20. In order to do that, the great financial companies of the world will have to come clean and write-off once and for all all the crapola that they still book at fraudulent prices. In doing that, the prices of the Financials will sink even further, taking the major market indexes even lower. But the point I have been making in the past few days is that physical assets do have real value, and that’s where traders should be invested because the world will still go back to work tomorrow after the sun comes up. Hardware makers in the US will still be open for business: IBM will still be making computers and shipping them to Shanghai; the oil sheiks of the Middle East will still be buying Dreamliners from Boeing. So those companies are near their Bear market lows; it’s the Financials and companies that are linked to them that will have trouble getting investors until they come clean on their balance sheets. Hope that helps explain your dilemma. And, in closing, I think the price of gold at the time of the new General Agreement on Currencies (my word for something that hasn’t yet happened) will be in excess of $1500, maybe $2000. I don’t want anybody to miss it. ]

paul kantner versus greta garbo-

http://tinyurl.com/47ldx4

garbo did it right...if you're going to be a rock icon, either take care of yourself or stay away from photographers after you hit your prime...

Wow what a morning to be stuck in meetings all day. Between the Put Call ratio being over 1 for 6 days straight, (soon to be a 7th) the VIX spike, and the big volume, I want to add to DDM here, but I'd be locked into the trade due to pattern-day-trader rules. So I might add @ end of the day. TBT is holding up really well today, are people beginning to smell the stink around the long term treasuries? Between that and the mini-flight to quality in gold, i'd say yes. today is the the first real appearance i've noticed of the trade of the generation... TBT abnormally strong, gold up, USD index flat. various central banks are pumping liquidity in, so USD doesn't move much- but gold knows the real story today...

speaking of photographers, why is it every time the market sells off, they pick the grimmest faces in the room? there must a at least a few traders making a bundle on the volatility, no?

http://tinyurl.com/4437eh

why VMW is down a lot?

Kaimu, ALOHA!

For true Irony, KRY stock is worth more than LEH these days!!!

US-China trade agreements

http://tinyurl.com/4jeysf

“Economic history is a never-ending series of episodes and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.”

George Soros

Speaking of LEH, it looks like Barclays is picking up even more off the carcass.

Market seems to think this is good for ESLR i.e. maybe the potential $39M & 20% dilutive effect of ESLR's financing deal does not come into play after all.

Sold the SSRI I bought a few days ago today at $18.98. (bought at $16.36) SSRI is up around 25% today. Was going to be LT hold but too much froth for me to handle.....

Hruska's picks: jr oil&gas.

#1 pick was Breaker Energy WAV.to

note recent insider buying

http://tinyurl.com/3o8x2c

Insider Colborne is one of the directors and also the Chairman of TriStar Oil&Gas TOG.to

Babybear - If you are concerned about the possibility of a pullback in SLW, you have several options, such as (1) place a trailing stop on all or part of your position; (2) buy puts sufficient in quantity to cover all or part of your position; (3) sell off a portion of your position and let the remainder ride; (4) take the money and run. Which to use depends on your assessment of conditions and probabilities, and on your penchant for risk.

re: SLW

Thanks to Bill for the heads up a few days ago.

Got in @ 8.00 Sold March 7.50 puts that did not get hit (unfortunately).

Am a newbie to I was too chickens**t to double-down when it fell to the 7.70's yesterday (regretting it now...), but not so chickens**t as to sell at a loss when it did.

Now, I'm loving it in the high 9's.

Selling is the hardest part of this whole bloody game. Do I take it all off, or just half or a quarter of my position? Will it pull back today, tomorrow, ever? Am currently up 23%. Worried if I jump off the train, I'll never see it again, y'know?

As for ESLR, pretty much the same as above except I got in @ 5.00, so I am now even.

Any advice for the newbie is welcome...

Thanks to all who post here...

C:
Could C really become a <10 dollar stock?

I don't work there, but I make my daily bread partly by working for a vendor to C. If C goes I may as well pack up my desk, I suspect.

Gov. Palin:

Wikileaks strikes.

"Circa midnight Tuesday the 16th of September (EST) activists loosely affiliated with the group 'anonymous' gained access to U.S. Republican Party Vice-presidential candidate Sarah Palin's Yahoo email account gov.palin@yahoo.com and passed information to Wikileaks. Governor Palin has come under criticism for using private email accounts to conduct government business and in the process avoid transparency laws. The zip archive made available by Wikileaks contains screen shots of Palin's inbox, two example emails, address book and a couple of family photos. The list of correspondence, together with the account name tends to re-enforce the criticism."

Nice. Now she can get an account on one of Karl Rove's secret law-evading Blackberry e-mail servers, too.

I'm an email expert. It looks like I could probably make bank setting up private encrypted e-mail servers for Republicans. AND I could do a better job than what I see these guys doing.

Maybe if C goes under....

Clearly others are in the same mind set

Thanks OldGoat

Dodd Says Fed Has Authority to Set Up Fund to Buy Bad Debts

This maybe the reason for the buying. Welcome to the USSA revolution. And not one Congressman is speaking out about it. The FED is destroying its balance sheet and using new money to do it.

DELL is up 3.6%/WFMI up 2.9% on a day like this? the power of Buy Alerts is impressive...

Thanks a lot OldGoat. Yes I need to revise my stop orders. :)

Mike,

If C goes under you can stay home and become a mouse-jockey like the rest of us.

BTW, when Erin B. talks about naked short selling I genuinely.......... get a nice warm happy feeling......

http://stephenvita.typepad.com/alchemy/2008/09/dont-do-it-9172.html

sorry no tinyurl at work...someone mentioned the TICK earlier...sorry do not have time to go back, but read this first...

Mojo: re ESLR

My take on ESLR is there are a few big factors in play right now.

1. Energy legislation with tax ramifications for solar are currently coming to votes in congress. (House may have voted yesterday on their version).

2. the capped call deal w/ LEH is unclear. But it appears that there could be a collaterilzation clause that would protect ESLR. Worst case scenario was 20% dilution and $40m loss.

3. Broad market decline/global credit cycle contraction.

I see significant edge in upside from here given that the above is largely baked in and fundamentals are strong. My basis is 4.80 right now on 3k shares, time frame is months to years but I'll trade around the core position.

aucourant:

could you be talking about the Slope of Hope?

http://tinyurl.com/46732r

I recovered this from Otto's Inca Kola News blog.

David- your positions are all kicking a-- today...nice stock picking...

A-Pete,

you and others on this board are awesome.

I want to buy everyone a beer, or a gin and tonic if that's you preference.

AIG must've gotten their $80B already, DXO is taking off now!

CEG @ 22.15...one pull on the slot machine...

Someone before mentioned u.s embassy bombing and i didnt believe until i saw the news.

http://tinyurl.com/57kxgy

if you believe oil & gas have bottomed here, DMLP is a buy. Nov. 20 calls are reasonable. I just bought 4.

I'm not so sure the have bottomed for real - yet.

Also, the US nat. gas trusts especially such as HGT, SJT, CRT etc., are going to have a serious dip in their monthly payouts in Oct. That "should" cause a reflex sell-off.

DMLP pays quarterly, not sure how it will be affected.

Good job 2nd on that CEG...That thing IS a slot machine, too!

joey

The Slope Of Hope picture <---LOL

Thanks..

2nd, re: Kantner,

There is a third alternative for aging icons. Accept with good humour the fact that there will always be someone who feels they have the right to tell you that you shoulda done this, or you oughta do that.

2nd, I read and take seriously your trading comments. But, let Kantner be the craggy old rock icon he chooses to be and take good care of YOURself. :^)

Norton- LOL...OK, and i won't bother to post any of Slick (had a crush on her for a long time, man)...

Got some BCE C DEC 36.00 CA calls...

Let's see what next week brings?

The Buy alerts had some crazy gains today.

CDE +20%
NXG +6%
SLW +15%
HL +10%
SIL +6%

Anyone interested in some GE stock?

What did I say last night? "Homework: Pricing long-dated oil and silver call spreads?"

Day late and a few thousand dollars short, as usual.

Let me alone to cry in my soft drink, please.

Bill,

Do you feel an agreement on trade+currencies would be coupled with a formalized devaluation of the US dollar?

[Bill Cara note:

Clearly, that's the case. Most of these financial issues started in the US. They spread around the world, but never impacted other countries to the extent they have America.

Boy, we've come a long way in the blog since I started it in April 2004, telling you that Lee Ann Womack sang a song I hoped you all paid attention to: "I hope you dance". I think most of you now see that trading is a dance. Prior to meeting me, so many thousands of you thought that trading was buying financial products from the sell-side.

http://www.youtube.com/watch?v=xIAWY4LLsEw ]

On the hourly chart of the S&P it looks like this decline is headed to the abyss. Like tomorrow.

Todd Harrison was saying that back in 1998 he told his boss that the Russian stock market was crashing and the reply was "who cares?". Could this week's crash ripple around the world?

Did you see the news about the German bank that gave Lehman $300 million on Monday, hours before they went bankrupt? These are the geniuses that manage our money?

Verry Off topic then reining back in.....

Amazing reference to Paul Kantner, Gracies words from what I have long considered a seminal ablum for those of us who were too far out, "Blows against the Empire" have been repeating in my head for days..."Hide Witch hide..." Sometimes fun but a little weird.
Back on topic...to the brainiacs here and other posters...unless Bill wants to chime in... his comments from the Daily report today,.."So, when you see the reversal in the CDNX market....That will be the time for you to take a reasonable risk"
Am I twisting it to fit my desires when I translate that to mean longer term trading will then become profitable again instead of this daytrading dance with ...what was it...meth crazed lap dancers?
thanks to all who post
Back again to verry off topic... theres a great new head chef at Serafina on Eastlake in Seattle. Drummm rolll... my son Dylan G. Stop in and say hi.
peace

[Bill Cara note:

I'd be there at Serafina in a heartbeat if I could just leave the beach. :-)

Re the dance, we are still in day trade mode, but will switch to more prudent long-term trading when the capital market table is properly set. This chef will still be there regardless.]

ps how do I sign up for the aforementioned Buy Alerts

kaimu,

Regarding "It must be near impossible for these guys to look in the mirror today!"

It's no problem for them--vampires have no reflection in mortal mirrors!

OT: That is my favorite Jefferson Starship album.

GS going down...

moving one of my retirement accounts into Fidelity Contrafund FCNTX today - for long-term hold.

Dave

I thought Contra fund was closed.

It is - except for my ex-employer's 401K holders - which is why I still keep my money there!

Dave

Wow IB says Amex stocks unavailable for trading due to technical diff.

Gold - Interesting day today. GLD left the AZone and then crossed its downtrend line first thing this morning. Took off like a rocket! Maybe the crash of the Russian stock market caused some there to buy up Gold?

On the other hand, though, this IS expiry week, and anything can happen tomorrow. Gld is at 50% Fib and strong resistance. Will it blow through? Wish I knew!

moab
agreed on that s&p chart. I've got a target date of a short term low tomorrow. and if as you say that is into the abyss (a cliff dive), maybe that will be the end of the 3rd of 5 legs down from the early august high

Meltdown before close...

NASDAQ COMP down over 100 points!!!!!!

Note how GS and MS now gripe about the shorting when it doesn't work in their favor. If they are crushing the little guy it's ok, but now there is a problem...

Watch...a major event is forthcoming since GS is getting hit hard...might be a good buy point in the next few days...

What should we be looking for to identify the reversal?

I gotta take those sold-too-early EWW puts off my watch list. They're bumming me out, man.

mojo - This might work:

http://tinyurl.com/4ts44c

The momentum is ominous. There needs to be a washout low. Hopefully 1080, but maybe lower. You will definitely see some buying at 1080 no matter what. The question is whether is it enough.

This close is beyond ugly. We are seeing market history made my friends.

TBOTT - how do you arrive at your target date? Based on a 49 to 55 day panic cycle from the August 11 top in S&P I think Sept 29th might be the earliest date for a low.

BTW, the bid/ask on those is a buck. 5/6.

That's whacked.

Other puts on my watch list show very wide spreads also.

Kitco.com only has 1000 ounce bars of silver for immediate delivery. I wanted to buy 1 bar yesterday, but noticed that they don't accept credit cards. So I didn't buy on the spot. I use my credit card for ease of purchase. It seems that by the time I get a cashier's cheque the price will be much higher.

I wonder why they make it so difficult for the common man/woman to buy real money???

[Bill Cara note:

The credit card charges to the merchant are what kills the deal.]

As I mentioned before about learning and getting hit...

Most of my losses came from some forays into commodities. Could someone point me to a previous discussion on gold or give me some sound places to park some cash? I know that most of the Juniors and even some of the big boy miners are getting hot because they don't have the pull at banks or are taking the bucket to an empty well for any of their financing needs. On a macro and currency level I agree with what Bill has been saying in his Daily and Weekly WR's. I generally stick to what I know but, as anyone should, I'm looking to increase my knowledge base.

With all of the speculation (Kaimu's post) about where the physical assets are held and who has rights to what it would be nice to know if there is something I can put my confidence behind.

For a reversal watch the hourly index charts with a MACD(65,90,12). When it loses momentum to the downside and turns up convincingly, that may be it. Any rally that doesn't turn it up will probably be sold. If you look at the selloff into July 15th, it was steady on the MACD. This selloff is accelerating the MACD down each day.

Bill:
Is the general consensus that Dow 10K is still looking bottom-ish?

That's only another 600 pts - I am in wait-and-see mode personally. Given this week's action nothing seems to be very clear.
Thanks.

[Bill Cara note:

If you remove the Financials from the mix, the companies that actually produce goods are trading at pretty close to their historic low prices to cash flow, which sets up the market for a recovery and probable new Bull market after the final capitulation. I'm not yet convinced there will be much of a Bull until the HB&B issues are resolved and there is a general agreement on currencies that permits international trade to carry out efficiently. But if there is a purge of emotion and act of surrender by Wall Street, then I believe the equity markets, at least, will have reached a bottom. Today had the look of Friday October 16, 1987, with enough selling at the close to frighten enough traders to fold their cards tomorrow, as they did on that Black Monday Oct 19. Over two or three days, many blue chip stocks had fallen 25%.

The next selling wave could be the bottom, down to about 10000, maybe 9800. Everybody has had several weeks to prepare for that moment. You can look at stocks of the types of company I have identified as targets -- even if the Weekly RSI-7 is today in the 30's, especially if the Monthly RSI-7 is also relatively low. A major sell-off will take those RSI numbers to acceptable levels. You won't even have to look at the data; you'll just know when the panic sets in. The second that Treasury Secretary Paulson resigns or suicides, or Bernanke is replaced with a hard-liner, you can back up the truck. Just avoid Financials unless you are a day trader. Buying after the market falls a lot is the hardest task you will ever face psychologically -- just like selling after you have made a great percentage gain is probably the second hardest. Fear always is stronger than greed. But if you are prepared, you will act.]

Look at the weird close on GBX on a 1 or 5 minute chart. No clue why, long since 18.68.

Moab - I've been watching and trading all day. THANK you and all the other traders and Bill! I can't thank you enough!

No question the bears (Casius Clay/Ali), has given a knock out punch on each of the last two days on the close.

Ill winds are blowing.

SandraT - most PM dealers I've dealt with are cash-n-carry - credit cards leave a paper trail. Alternatively, you can always pick up junk silver (ex: used pre-1964 coins) on ebay if you shop around and don't mind that they're not as shiny.

Got out of WGW a little early today $1.50

Also got out of everything a little early!

This early stuff cost me a few thousand today. At least I wasn't long anything but gold and miners! And made money today when a few on my friends at work are getting killed in this market. Maria on CNBC announced that Large funds were buying into the market when it was around -177 after running up a good bit(time to buy? nope). It ended at -449 an hour later.

Today, Jim Cramer was talking about buying 3 days calls on a few stocks when the market was down 225. He did say it was like punting the football. I might do that tomorrow if we open down big.

I'm thinking it will take a while for some of the losses from LEH, AIG, FNM, FRE to unwind....either from holders of their securities or companies that had financing lined up with LEH.

Look at Conseco....a good example.

my target date is from an advisor who uses their own analyses methods based on fibonacci numbers. I also doubt it is the bottom of this 3rd leg.
I often use a real short MACD (3,16,16). Will try your MACD numbers

SandraT
re buying silver

You're in Canada. Why don't you check out ScotiaBank? I haven't acted on it; but having considered the options a while ago, I concluded that it would be my vendor of choice.

When Maria tells you large funds are selling and comes up with a list of stocks to short you know the bottom is in. CNBS actually did that days from the bottom in 2002 I've heard.

wow, GBN up 36.2% and AZK up 26.7%, both on huge volume

David- so I did exactly what I planned to do...I can see the engineer is beginning the journey with a downhill curve, but that's OK...there will be a ton of hills and valleys on the way, but at least I don't need to be trading every single of them...

HEADS UP Silver buyers:

Scroll down to Monday August 18, 2008 AM and look at the first picture posted of a bogus silver bar.

http://tinyurl.com/lqta

Sold my SLV from yesterday too early, for 8% gain. Should have held to the close.

It was a great day, anyway...

My guess is that the selling will continue as long as there is panic in the credit markets. Right now the TED spread is 3.02 (which is huge). The markets will rally and fall based on rumours of potential deals. The real deal is that a lot of liquidation is happening and some of the players may not be solvent.

I figure that the TED spread helps to indicate what is happening behind the scenes. What other indicators (such as TRIN and TICK) are you using that could help us gauge what is happening?

Buying metals:
As mentioned numerous times, apmex.com is great.

They take credit cards. You pay a small percentage more for 'handling' when you use a credit card. This is actually them recouping the credit card charge they pay, and has nothing to do with handling.

Above and beyond the nice selection and great site, they have some of the best customer service of any company, period. I have had my own small ordering difficulty resolved with them, no questions asked. In these days of abysmal customer service being the norm ("Please hold. We value your business.") that will bring me back every time.

They also buy back and have very reasonable buy/sell spreads.

ALOHA !!

I just called my ex-Morgan Stanley broker in California just to see if he is still around. HE IS! Waiting to hear back ...

MAN ... somebody saved MS skin today ... down to $16+ intraday! WOW ... I wonder if the likes of MS and GS aren't taking borrowed funds from the US FED and buying the dips on their own shares? NAH ... they leave that up to the US FED and US TAXPAYER funded market intervention!

Next I will call my ex-Merrill Lynch broker and maybe get some inside info from an employee point of view! I wonder if he will be on for BOFA?

I know from past experience when BOFA takes over a company they eject quite a few employees from the company they bought! I expect to see firing notices before Christmas of MER employees that are expendable! Of course BAC will keep the talented MER traders if they can sort that out! "Lets give this account all the luck it can handle ... We'll call it the five eights account!"

Scotia Mocatta is probably one of the best places to get your gold/silver bars & maple leafs if you're in downtown Toronto. Any other suggestions?

Note that there is a loss if you sell coins older than 3 years and there is a premium on coins vs. bars, as in other places.

You'll also need proof where you hold the money and a bunch of ID. I had to walk a couple doors down to another bank just to get a windows screen shot of my SIN #, start menu and all.

http://www.scotiamocatta.com

You're buying in US dollars which is also a bit of a hassle.

ALOHA !!

Look ... all these dealers like CNI and KITCO, who do not take credit cards, will lock in the metal prices based on the day you order so long as you send payment within their requirements(usually 24 hrs), so you don't need a credit card unless you plan on owning some DEBT! Buying on EBAY is more BUYER BEWARE! There's always a reason some gold bars and silver bars sell for a 30% discount! Also make sure you check the sellers feedback very closely. I would stick with the main dealers on EBAY! I have bought from individuals on EBAY, but its more risky ... CAUTION is required ...

a good day to breathe. :)

Amazing how steady I feel, release and now we can see the real work is ahead of us.

Not even to worry about what problems for tommorow, just a day at a time now.

TRIN and TICK are telling us the internals of the market, not the fundamentals like TED spread. TRIN has been unreliable lately, but TICK hit -1500 early today, which I have never seen. This is telling me that the selling is becoming indiscriminate. When we hit bottom TICK should be hitting +1000 consistently on the five minute chart - indiscriminate buying.

I just hedged my whole remaining US based account (75% of it was moved to the relative safety of Sweden this spring) by buying Oct. ATM calls on FXE. I would normally never do something like that, but the faint odor of a possible $US crisis made it seem like a good idea just this once.

I have also now hedged my Dec. XLE puts with calls on some various oil & gas trusts. I still think especially oil is going to take one more hit - probably after opex, but who can be 100% sure.

If we get a serious gap down tomorrow, I intend to sell about half my collection of puts, and hedge the rest with short dated ATM calls and then let them ride - and not double down with more puts. You can never know which gap may be the one that gets bought and makes the bottom.

Thanks Everyone, and Kaimu: No I have no debt... and never have had any in all my life. It was just for ease of purchase, as I use my credit card for everything here in Canada, and just pay in full each month. Ok, ok, debt for a month (LOL). Will look into all of this.

Telestar3d - USS - Like kaimu said, any ship stock watch list needs this one too, -11.7% at close!

I am curious what happens with the PMs here. As I have posted before, I see a long-term bottom in spring\summer of next year, which would be the 8, 4, 2, & 1 year cycle lows. What we are seeing is the uplift of the 1 year cycle, which traditionally bottoms in late summer / early fall (the seasonal cycle).

I wonder though if this isn't a huge bull trap. Gold moved up very strongly in panic buying, and while there may be more panic buying ahead, I still think that gold gets sold as soon as people see that the "system" isn't going down quite yet (and assuming that it doesn't). I could see a lot of people becoming trapped and disillusioned in PMs as the powers that be try and ramp the market again.

My thoughts are that gold may rally back up to 865 (50% retrace of last move down, seen today) or 895ish. Anything past there and I think we need to start fearing the collapse of the "system".

Enjoy...

RE: Buying silver

I know that www.Bulliondirect.com will allow credit card purchases of up to $1500, which doesn't help w/ buying very large amounts but you can buy a 100 oz bar and stay under the limit (if they aren't "sold out"). Of course the extra fees on top are kind of absurd (but that goes for all of these online bullion dealers).

I have not actually used this site but it has come recommended by others on this site.

Canadians, you can buy this open ended mutual fund, they say every dollar in buys gold from Scotia Bank, it's RSP eligible.
Check Globefund.com, go to their website.
2% mgmt fee for their troubles for your convenience is a fair deal I think. DYODD
BMG BullionFund-A

Probably more than any other day, you have to go back up and read all of the [Bill Cara notes]. It took me quite a while in the past until it finally dawned on me to use Ctrl F to find them for me.

BillySundance: You see what I mean, that they don't make it easy for the common man/woman these days. If it's not huge bars (1000 ounce), it's small bars at a huge premium, or they don't have it in stock, or they take your money but can't give you a delivery date. Sigh... I'll keep looking. Thanks to everyone regarding this, it is really helpful.

Scottraders [problem solved]

Those who use Scottrade and see their Elite Trading screen lock up during intense trading sessions the problem is due to your Firewall settings. I have McAfee Anti Virus software through my internet provider Comcast and not from Scottrade. The settings for the firewall differ between the two I am told. The correct firewall settings for the computer savvy is port 443 [open TCP & UDP. For those who are not just call McAfee and they will help you. Which I did. ;-)

Has anyone taken a look at Kitco's table that review the gold change prices in various currencies?

First off, I am amazed to see gold have an up day like this when the USD is holding fairly steady against most world currencies. The USD was only down 1-2% vs. the euro and b. pound. The USD continued to strengthen nicely against Brazilian Real 4% ! (I hope Warren B got out of that Brazilian Real position before now)

So, some questions. WTHeck is happening to the Brazilian Real? Any insight? Strange to have that kind of loss against the USD on a day like today. Seems that this is a very good thing for PMs in Brazil - I picked up some JAG.TO today - anyone know other Brazilian PM's to watch?

Secondly, I am just trying to wrap my head around this USD action. Is the destruction of investments denominated in USD actually helping to keep demand fairly high for the currency? Does that make any sense? Why would the USD be up 4% against the Brazilian real on a day when the US govt has had to pump copious amounts of cash (fed loans) into the market?

Do foreign buyers have to get dollars first to buy Treasuries? Could that demand be the source of dollar strength?

Anyone know when/if they are going to start trading options on SLV? I thought I heard something about this but I can't recall.

I think the dollar is rallying because the short dollar/financials trade was blown up by FED intervention and as emerging markets crumble dollar are repatriated to relative "safety" (ha!).

BillyS, here's some thoughts...

1) US$ due for reversal after 7 years hard down?(see footnote)

2) US$ is the prettiest pig in the pen right now?

footnote: everything thats been working the last 5 years is now reversing as this bull is gored. US$ down was one of those plays.

moab beat me to it, and more eloquently and succinctly...

Bill - Thanks for the confirmation, this squashes any preconceived notions.

[Bill Cara note:

I just wish I had more time, but I don't, and sometimes I misread the Discourse and reply too quickly. In any case, it is what it is. I can spare only so much time for the People. I only wish the leaders of HB&B would do the same.

Everybody here works hard at trading -- even when they are supposed to be working for their employer.

btw, Stiglitz has it right in this article. http://tinyurl.com/4c8s4p

The comments today by Barney Frank about the need for more regulation were flat-out stupid.]

Central Fund was up 17% today. That shows tremendous physical buying. I heard from Minyanville that Rydex gold funds had to add 50% physical gold to the vaults in the last 5 days.

iTulips ka-poom theory is playing out - deflationary deleveraging decline followed by raging inflation.

I just got back home from doing morning errands (and rare meeting in the morning for which I actually had to leave home and go to work), and I see that I missed another exciting day in the market! Or I should say I would have missed it if my middle name were not “trade in my sleep,” as 2nd_ave put it. :)

Boy, was Bill right in writing this weekend that the interventionsts are beginning to get that “cornered deer” look in their eyes. Bill has the rare capacity of looking right into the eyes and sole of HB&B. He sensed their fear, and today the dyke was broken and PMs zoomed.

So it happened just as I stated in my wish to 2nd_ave on Saturday: instead of PMs zooming on Monday, they retreated, I reloaded WGW, SLW and SLV, and sold them again today! I made an error in my calculations, saying that my whole portfolio (all my life savings) rose by 14% on Friday – it rose by about 9%. Today, however, it rose by about 12%, since yesterday I was fully invested in the miners and even borrowed about 15% of my portfolio on margin.

Today my limit of $1.35 was hit for the WGW shares I bought at $1.10 yesterday. Then the next limit was hit at $1.60 and the next at $1.70. :) Then, right before the close, I reloaded WGW at $1.56 (I currently have about 8% of my portfolio in WGW). The limit at $11.40 was triggered for the SLV shares I purchased yesterday at $10.40 (I still have about 8% of my portfolio in SLV). The limit at $8.96 was hit for the SLW shares I purchased yesterday at $7.96, and then the next limit was hit at $9.90 for the shares I purchased at $8.30 a couple of weeks ago. I still have about 18% of my portfolio in SLW, so I don’t want to reload after hours on SLW, since I have enough invested in SLW/SLV as it is. Now I want to free up some cash and by LEAPS on China/India, probably when DOW hits 10000.

The limit at $33.50 was hit for the VLO shares I bought on Monday at $31.50. This is like the 10th time already in the past couple of months that I buy VLO in low 30’s and sell it a couple of bucks higher. I am currently waiting for someone to sell me VLO after market at $30.70 (to reload my position, since I believe VLO will soon be upgraded based on the steep recent drop in the oil price and an insignificant drop in gasoline price), but nobody seems to want to do it yet. :)

Finally, I bought some more PNP.TO at $1.14US. If we have seen the intermediate bottom in PMs already, then my beaten down Canadian shares MUST rise (OK, I’ll make it a wish, so that it would come true), and when they reach their previous heights, my portfolio will double, as I have buying them on the way down (with occasional trading on spikes) for the past 9 months.

I am off to yet another meeting at work today – what a crazy day for me! I haven’t even had the time to ready today’s discourse or Bill’s comments, but I’ll get to it late tonight.

Congratulations to all those who followed Bill’s calls regarding PMs recently! I will buy Bill’s book later on today, as a way of saying “thank you” for his guidance.

reminds me of the Far East meltdown of the Asian Tigers. Used to watch Yahoo Finance Sunday nights to see what was crashing.

Now it's here.

Pookie, thanks for USS, I looked at the chart.

Two observations:

First, I'm not a fan of below $4 stocks.

Second, it has negative earnings, red flag.

In the last two years, I have traded junior gold’s and a few oils, because I learned of them thru this site. Fortunately I did well with them KRY and UXG. I basically sold the spikes and got lucky on entries, but the experience left me preferring mid and large cap sector stocks in both of these sectors.

I think some people here really got buried in these sectors, but only they know. I do not want the risk. Risk management is really the name of the game in this business and my year has been tough enough. Hey, just my preference.

I’m a big fan of understanding the mathematics of trading/investing, i.e. percent of gain needed to recoup capital loss.

% loss of initial capital % of gain on balance
required to recover

5 5.3
10 11.1
15 17.6
20 25
25 33.3
30 42.9
35 53.8
40 66.7
45 81.8
50 100
80 400
90 900

IMO, people should burn this into their brain and defend their capital.

This suits my personality and that’s what is important to me.

Good luck and thanks for the nice comments from yesterday.

QT - I do not have a firewall and my Scottrade Elite still freezes badly last few days.

OTOH what really worries me is how safe my funds are in Scottrade. It is one thing to miss an important trade because of Elite freeze but it is totally different to wake up and see your lifetime savings freeze...

Now I'm thinking today AIG scaled into or covered PM's with their $80B.

USD up is from added supply. Dollars are just like any traded item, when you have an increase in supply without matching demand (Fed being reloaded by Treasury to rescue HB&B) then *real* currency and rarities (see Bill's list in previous post)will rise in price.

Judging by the move in real currencies I bet there is more printing to come.

Anyone noticing Kaimu's record? :>)
I think it pays to blow-up the TV.

Craig: "USD up is from added supply. Dollars are just like any traded item, when you have an increase in supply without matching demand (Fed being reloaded by Treasury to rescue HB&B) then *real* currency and rarities (see Bill's list in previous post)will rise in price."

Huh? I thought an increase in supply without matching demand resulted in lower prices. Am I misunderstanding you?

Excuse me, USD is DOWN from added supply. Duh.

Oh Telestar - I definitely wasn't suggesting USS as a trade, but as an indicator of FRO's potential since these two are joined at the hip it seems.

occam_razor,

Isn't it truly frightening, sitting there with a "lot" of stock, whatever that is for a given individual, and you're either gettting in, just gotten in or getting out, and all of a sudden Scottrade freezes. It can be a real Maalox moment.

USD is down moderately today against majors (euro/pound) but was also up today against the brazilian real/aussie dollar.

Between Fannie/Freddie and AIG, the gov't has pumped tons of liquidity into the market recently but there really has been a pronounced move down for the USD in the last couple weeks versus major currencies.

Is the USD liquidity that has been recently pumped into the market being simultaneosly destroyed by real losses elsewhere? I.E. has the availability of the USD not actually increased in aggregate following these FED bailout actions?

No, I'm on new meds....LOL! Muscle relaxers and two pain meds...sciatica run amuk.

IMO, the move in gold is commensurate with the amount of printing the street now thinks Ben and Hank will need to rescue all the banks and brokers they will tell us they aren't going to rescue.

Whoever supplied the Soros quote has the idea.

QT I will look into it thanks for the heads up on the firewall thing.

CNBS....That's funny.

I lost a few hundred on a ST lock-up not long ago and when it started locking up this time I started running the web based Scottrader to trade with and using elite for charts and some of the bells and whistles.

Elite IMO is worthless...sometimes it's running literally minutes behind the market, the feed is slower than Alan Greenspan, So I'm constantly having to verify times against my computer clock.

Sciatica: Check out this site, this treatment has helped me.

http://www.vaxd.net/

QT,

Are the changes made in the Mcafee desktop thingy itself or on "my computer"? (obviously savvy here) And you use a PC right, and you were having firewall problems and the Mcafee guy knew what to do?

As isn't it bizarre that Scottrade has a free firewall that is impeding their data flow?

http://tinyurl.com/44omxr

"There's no crying..."

Jay,

In response to your comment at 12:35

'If they really close all open shorts in order to start enforcing the naked short sell rule, there's gonna be a nasty rally here.

Rules go into effect tomorrow.'

I would not bet on this too much. We have not seen the details behind this rule yet. Consider, however, that there are several billions shares on the books today registered as a FTD. These shares will not be closed tomorrow. Reading into the rules, these fails are under closeout provisions but...until they are closed out mandatory pre-borrows are required. That may be the means in which the SEC tempers the storm.

I also expect that firms will fail compliance for awhile and play dumb.

My first post. No content. Just want to make sure I can post.

Patchie,

Thanks for your response. I knew my literal interpretation of that article could not be correct, as the activity that would result from immediate enforcement would be incredibly disruptive....

When the traffic is heavy and the box is in a start-stop mode (seems to be a strong correlation, in my experience and according to the Scottrade guy) I always set stops because

A) it's a pretty ok idea anyway and

b) there is no other way to guarantee against a horrifyingly large loss, though let it be said that I don't really like stops, and it's definitely not my preferred method of selling.

Each morning for the past couple of days it's been like no-go from open till at least a quarter of 10, which sucks, and it's cost me a lot of money. One of my main strategies involves buying or selling, but usually buying stock before any of the normal criteria for daytrading prices are established, there's a lot of opportunity there as you all know.

I damn near bought AIG at a buck and a quarter yesterday instead of where I did buy it, a lot higher, made money but still, but the computer froze up for like 15 minutes. That's not really a sustainable situation.

What American platforms do you guys find to be the best?

What American platforms do you guys find to be the best?

Interactive Brokers + NinjaTrader as a front end. If you've got a decent computer setup, you'll be OK.

The Interactive Brokers client software is incredibly complex and has a steep learning curve. However, once you master it, there is very little you can't do. And it is highly performant.

Not sure why the media thinks short sellers are the reasons for the market falling again today...in my opinion it has the opposite effect...short sellers provide more liquidity to the market and actually slow down these sell offs....as stocks fall short sellers take profits and actually provide buying...Im not subscribing to the idea the reason GS and MS were down today due to short sellers...

Could it be that the credit default swaps at GS rose 200 basis points in 1 day and their cost of credit on their 1 TRILLION dollar portfolio just rose 20 BILLION dollars for the next year and may go higher tommorrow...

I am not short GS or MS but I do have a lot of other financials short as long as some short bond positions....the only thing I am long is precious metals and I do not see changing this view for some time...

I found Bill Cara about 18 months ago searching for opinions on gold...I have agreed with nearly everything he has written in the last 1 1/2 years and appreciate him time and willingness to express his views...

I do wonder if he would revise his 10k/2k position that he made years ago when people thought that was impossible....I do realize he made this call very early on and was more on a whim than a true market call but I would be intersted in hearing an update if any...

Canadian Venture Exchange up today (+0.72%) on volume higher than the 50-day exp. average. That's the first such up day on high volume since ... Jun 17 - WOW! Might be worth looking at today's movers, as per Bill's suggestions the last few days. A few of the names showing up on the radar today include: Andina Minerals (ADM.V), Rainy River Resources (RR.V), Stealth Ventures (SLV.V), and Cordy Oilfield Services (CKK.V). Haven't a clue what any of these are - too much other research projects on the go.

bigboyz, there are short sellers and there are SHORT sellers. most likely you affiliate with the smaller populus. The guys that do not have the capital power to destroy a company.

Unfortunately there are other funds who can destroy a company that shows any signs of distress. Firms that open trading on the bid and sell enormous quantities of shares short to present a market that is not efficient.

last night Morgan posted earnings and came out ahead of analyst expectations and posted revenues 3% below last year. the stock was trading up 5% on the news assuming the stock was trading low based on analyst expectations. So why did the stock open up down $6.00/share. I believe it was because short sellers dictated the open that created the chaos that forced investors out. Good news is no longer good news.

Personally, I have no problem with short sellers as long as their intentions are honest. Presently the financials are being circled by vultures that have started picking at the living to make them dead.

Other winning juniors:

WGW up 37%
USA up 27%
LRR up 24%
ARZ up 24%
TRE up 26%
VGZ up 20%
FVI up 12%

Most are producers, near to production and 2 “ project generator”

The above are gold and silver. Dr. Copper (despite his Phd in economics? or because of it?)
still can't get no respect:

FCX made $1B last quarter on $5B revenues. P/E<8, still down 1.27%, no sign of a bottom

ARG.to, which feeds off Codelco’s tailings, and has a dividend of 11% down 10%. They also own 15% of Los andes, CVE:LA, the Peruvian copper explorer which the Otto likes best.

short sellers - banning them won't cut it!

I think the SEC should simply ban ALL selling. Henceforth, you may only BUY, BUY, BUY.

THAT will turn the market around, now won't it !!!

bigboyz,

The problem is the media does NOT think.

I just watched an exchange between a prof (said AIG should not have been bailed) and a Wall St type (who said they did the right thing).

Wall St: The usual reasoning that they were so big that to simply let the free market deal with it was unthinkable.

Prof: AIG had three very profitable divisions which could be sold to other financial companies.

Wall St: There are no winners here — everyone loses.

Unasked by media person: Wall St guy, does your company stand to gain in any way from the AIG rescue? Did the CEO, board of directors of AIG give back any of what they were paid to manage and protect?

I can't stand to watch any more of this stupid drivel.

Ritholz (The Big Picture Blog):

Layman's Explanation of AIG vs Bear vs Lehmann

Posted: 17 Sep 2008 12:00 PM PDT

Daily_show I got called yesterday from the producers of The Daily Show, who asked for an explanation of this understandable to the "lay person."

Here is what I said to them:

• Lehman Brothers was like the little kid pulling the tail of a dog. You know the kid is going to get hurt eventually, and so no one is surprised when the dog turns around and bites the kid. But the kid only hurts himself, so no one really cares that much.

• Bear Stearns is the little pyro -- the kid who was always playing with matches. He could harm not only himself, but burns his own house down, and indeed, he could have burnt down the entire neighborhood. The Fed stepped in not to protect him, but the rest of the block.

• AIG is the kid who accidentally stumbled into a bio-tech warfare lab . . . finds all these unlabeled vials, and heads out to the playground with a handful of them jammed into his pockets.

Re: 10k/2k position

Bill is sticking with his position and we are almost there but have we seen the fallout of a real recession on the consumer market yet? I think not considering high relative prices of top notch companies such as JNJ,SYY,GIS,CL,AVP,PEP and CPB. More is yet to come. Let me know when the consumer staples ship takes on water. The others will be underwater with some ready for salvage.

6 of 208 media-general (now Morningstar)sub-industries up today:

silver up 13%
semi-conductor memory up 10%
gold up 7%
non-metallic mineral mining up 4%
radio broadcasting up 3%
pollution &treatment up 2%

The other 202 were DOWN. The worst:

national brokerages down 17%
telecoms systems down 19%

Grym - I am as frustrated by the media as you...at least they finally stopped calling this a subprime problem which drove me nuts!

Patchie - See this is where I disagree...I know what your saying regarding short sellers pounding stocks into oblivion...however, the opposite has been true for years...people look to squeeze out shorts all the time....here is my bottom line belief though...if a company is truely worth $XX and shorts push it below that level it should be nothing more than a buying opportunity for longs due to greedy shorts...are the markets not efficent in the long term?...the reason we see FNM, FRE, AIG, LEH, GS, MS pushed down easily by shorts is the companies are fundamentally flawed at this point...they borrow on 25-50x leverage and their costs are going up significantly...

Does anyone really think it could be normal in the long term for investment banks and investment bankers to generate the profits they did...in my opinion it was very close to nothing less than a pyrmaid scheme...as soon as someone said "how much is this really worth"...the scheme was over

ST07 - that was great, and I hope they use it. I love the Daily Show.

Shark - I use TD Ameritrade and haven't had any problems recently. Actually, I rarely do but I'm also on an excellent cable connection with a highly modified computer.

MONEY MARKET STATUS: I haven't checked to see if this is already posted but it is good info in any case on several Money Market providers. From Calculated Risk site:

http://tinyurl.com/4cwunc

Some thoughts for those who like myself are patiently waiting.

Back almost a year ago, Friday September 28, 2007 I sold the stocks in my portfolio to hold 90% cash in my margin account and 95% cash in my retirement accounts. The warning then was this is a Bear market and to sell into rallies.

I am not a day trader and I would suspect that 95% of the readers of this blog are not either. Yet, in the commentary with the few who post we get the feeling that we as longer-term holders are the losers. Well, in the past I would have been very negative in holding cash positions. Over the last twelve months I have read and re-read the books on trading suggested in this blog. I have traded a few positions in my account to take advantage of some trends and overall the trades have been good. Like a few here I have positions in KRY.to, GIX.to, WGI.to, NOT.TO and UXG.to. Even with a small position with these stocks I have preserved my capital and year-to-date I am at break-even. Had I not been a part of this community and had I not attended PDAC earlier this year and went away shocked at the dreadful state of affairs then, I would have been up to my neck in they wrong stocks at the wrong time. I can only guess looking at the market I would be down about 40% to 50% so far this year. And at that draw down it would take a 67% to 100% gain to get back to where I am now.

Now even my bank here in Canada believes in cash. Any deposits I make now will earn 3.75% interest on new balances until November 30, 2008.

The stock market this year is anyone's guess and the cowboys trading it now grate the nerves.

Stay calm; I have waited almost 365 days for the next step. This is not a market for someone with my personality to be in and out each day. It is easy to talk about the winners in our trades.

In light of this market, I gauge my performance by the Sprott funds here in Canada (the cowboys in my mind). And the returns are horrible for September 2008 and Year-to-Date. But I am now wondering about the Sprott Inc (SII.to) that can now be bought for 50 cents on the dollar. This was a new issue on May 15, 2008. Now the interesting aspect on this fund company is that performance fees are not based on increasing the funds above a certain percent each year (i.e. each year you try to end the year higher than you started and get rewarded accordingly), but above a certain percent of an index. You profit even if the fund loses. If the index is down 40% but the fund is only down 25%, then you have outperformed the index by 15% and get paid accordingly. I am keeping my eye on this one and also waiting for the TOG (Trade Of a Generation). I sense we are getting closer (isn't that a brilliant statement). [049]

Stiglitz - In addition, the regulatory system must be designed in such a way that it is capable of functioning dynamically, automatically and instantaneously, so that imbalance caused by abusive and unfair practices are dealt with in a manner which supports the practice of free trade.

URGENT VIDEO MESSAGE FOR THOSE WHO USE MARGIN

http://www.youtube.com/watch?v=eVB-SSkkLnY

For those of us who haven't bought gold or gold stocks...did we miss the TOG or is there a chance that we re-test the lows?

Statements of SEC Chairman Christopher Cox and Enforcement Division Director Linda Thomsen Regarding Immediate Commission Actions to Combat Market Manipulation
FOR IMMEDIATE RELEASE
2008-209
Washington, D.C., Sept. 17, 2008 — Securities and Exchange Commission Chairman Christopher Cox and SEC Enforcement Division Director Linda Chatman Thomsen issued the following statements today concerning ongoing and forthcoming Commission actions to investigate fraud and manipulation in the nation's securities markets:
"Millions of investors entrust their savings to our securities markets because they can be confident that our markets are orderly, liquid, efficient, and rational," said Chairman Cox. "The turmoil in today's markets, particularly in the financial sector, is challenging that assumption for ordinary Americans. Markets are the best tool a free society has to price and allocate assets across a complex economy, but as is well known from experience, sometimes the wisdom of crowds is supplanted by crowd behavior. We need well-functioning markets to help us draw the line between reasonable miscalculation and error or something worse involving the failure of due diligence, self-dealing, and conflicts of interest. It is thus vitally important that the market mechanism continue to inspire investor confidence.
"In order to ensure that hidden manipulation, illegal naked short selling, or illegitimate trading tactics do not drive market behavior and undermine confidence, the SEC today took several actions to address short selling abuses," Chairman Cox continued. "In addition to these initiatives, which will take effect at 12:01 a.m. ET on Thursday, I am asking the Commission to consider on an emergency basis a new disclosure rule that will require hedge funds and other large investors to disclose their short positions. Prepared by the staffs of the Division of Investment Management and the Division of Corporation Finance, the new rule will be designed to ensure transparency in short selling. Managers with more than $100 million invested in securities would be required to promptly begin public reporting of their daily short positions. The managers currently report their long positions to the SEC."
Chairman Cox continued, "Director Thomsen and the Division of Enforcement will also expand their ongoing investigations by undertaking a series of additional enforcement measures against market manipulation. The Enforcement Division will obtain disclosure from significant hedge funds and other institutional traders of their past trading positions in specific securities. Those institutions will also be required immediately to secure all of their communication records in anticipation of subpoenas for these records."
SEC Director of Enforcement Linda Chatman Thomsen said, "The Enforcement Division has been investigating and will continue to investigate any suggestion of manipulative trading. We are committed to using every weapon in our arsenal to combat market manipulation that threatens investors and capital markets."
The Commission is actively considering additional actions as appropriate.

# # #

http://www.sec.gov/news/press

bigboyz...It is easier to drive people out of a stock in a panic than it is to force people into buying a stock. Can stocks get squeezed by stock promoters? Certainly. History has shown that such activity has a higher probability of getting an enforcement action that that of a short and distort scheme.

As have stated, I have no problem with short sellers, even day trading short sellers, so long as they follow the basic principles of the law. those principles begin and end with the expectation of a borrow and a settlement. I see no rational reason why any short seller can short on trade date and not worry about the expense of a borrow until T+3. If you use a share as collateral to execute a trade that share should be in your posession when you trade it - regardless of how long you own it thereafter.

For the same reason that people despise pump and dump artists so this feeling is felt for short sellers who trade outside the limits of the law. unfortunately to the press and the regulators the two are treated vastly different.

Short selling - The purpose of legal short selling as a function of assisting the market to assign value must not be overlooked in the discussion, as well as the subject of illegal short selling. It seems to me, if illegal short selling weren't occurring in the market, we wouldn't be discussing the subject of short selling.

Therefore, I'm rather surprised to read the banter which appears focused strictly on the subject of short selling, while little is said about the underlying concern.

Shark,
re: What American platforms do you guys find to be the best?
I use Interactive Brokers and Schwab. IB has some of the most clumsy user-interfaces I have come across, but it is fast, reliable, and low commissions. Haven't really had any problems with Schwab either. They have continued to improve their StreetSmart Pro interface and it is a nice quick way to look at a screenfull of stocks with quick access to charts, P&L etc.
Anyone have any experience with other platforms like e.g. Tradestation?

ADAMG - Great question! My understand of the plan is that PM's were expected to show strength, followed by wain prior to actual TOG. With the FED monkey wrench involved, it appears the situation is not so clear (in my mind). I am holding my PM at this point without intent to sell unless some indicators (TBD) begin to materialize.

reminder to buy...buy on your own signal, be it on the way down, at the bottom (congrats), or on the way up...

there are only two basic trading rules- buy low and sell high, and so two basic trading mistakes- not selling high and not buying low...

(much to be said for buying on the way up, since we don't know how far it is to the bottom, regardless of how far we are from the top...not my personal preference, but being the prudent thing to do, it's the prudent recommendation to make)...

congrats to those positioned to win today ;)

Folks, found this strange. I'm investigating a couple of junior energy companies

PXP and WMB Their last trades of the day were 11% and 5% of the entire day respectively. At least for the first, I find that interesting.

Chickenpookie agreed. There must be a clear distinction between the two. There also must be a clear understanding that there are loopholes in even the legal standards similar to how there are loopholes in the process of buying long.

What we are facing here is the advent of the mega trader through the creation of wealth funds. These wealth funds (hedge funds with enormous leverage) have bastardized the system to create chaos instead of valued price discovery. They do so in driving markets up and by driving them down attempting to induce unsound investments. The tech bubble was exacerbated by such funds. these funds have found however that it is easier to create panic in economic times such as this than to create investment euphoria.

A thought? Perhaps the merging of these financial institutions will allow the unwinding of the historic level of leveraging that seems to be choking liquidity?

wamu up for auction
http://tinyurl.com/3mlka5

Patchie - I'll buy that, precisely my interpretation of the subject. Throw the bullies out of the pool if they can't behave responsibly.

Thanks Patchie for that link, very interesting - "...Sept. 17, 2008 — Securities and Exchange Commission Chairman Christopher Cox and SEC Enforcement Division Director Linda Chatman Thomsen issued the following statements today concerning ongoing and forthcoming Commission actions to investigate fraud and manipulation in the nation's securities markets:..."

"...In addition to these initiatives, which will take effect at 12:01 a.m. ET on Thursday, I am asking the Commission to consider on an emergency basis a new disclosure rule that will require hedge funds and other large investors to disclose their short positions."

"...Managers with more than $100 million invested in securities would be required to promptly begin public reporting of their daily short positions. The managers currently report their long positions to the SEC."

What's wrong with that picture? For over a year now I've thought Mr. Cox has has looked like a dear in the headlights. But now that he's been hit by a truck he issues that revealing fact. He never paid any attention to the traffic coming at him, only the ones that already drove by. I guess that's great until you're standing in the middle of the road watching the good stuff and you fail to see the tractor trailer coming the other way.

dear=deer sorry

AdamG - will we get a 2nd bite at the gold apple?

Maybe that depends upon whether Ben and Hank:

- goose the dollar again,
- let the next couple of bailout candidates fail,or
- orchestrate the "second coming" (choose your messiah)

Seriously, gold could take a breather, even retest 780. Nobody can know. Since the close, it's risen farther:

http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=i

Money in SHY, TLT, BWX - Don't forget that these are Lehman etf's. iIf Lehman withdraws its support in the initial fund setup, what happens?

Vanguard has some Bond etf's that might be a better place to have money placed if that is one's plan:
BSV, BIV, BLV, BND

Just a thought for consideration.

Report on Merrill Reserve Fund

http://investigatethesec.com/drupal-5.5/node/394

oop - sorry. SHY, TLT, BWX are iShares not Lehman's. Been a long day. Going to bed now.

So, are we to get short interest information on daily basis now instead of twice a month update?
Ifo so, will get handy in finding short squeeze candidates

shanghai composite at 1876, basically a 70% drop from the peak...investors in china, where shorting is disallowed- can't imagine what they're going through...where does capitulation occur, at 1000?

Joey,

Thanks for the "Slope of Hope". That is the one. I was at 11 on the curve with my PMs--my barf point. The curve enabled me to avoid that mistake.

BernardF,

Please do tell us: What bank in Canada is paying 3.75% for deposits????

Telestar,

Thanks for posting this table: (I post it again in case anyone missed it!

% loss of initial capital % of gain on balance
required to recover

5 5.3
10 11.1
15 17.6
20 25
25 33.3
30 42.9
35 53.8
40 66.7
45 81.8
50 100
80 400
90 900

I have held losers and lost capital, as I'm sure many investors have. It's obvious that a 50% loss requires a 100% move to break even, but your table shows the whole spectrum of decision-making. Looks to me like the big break point happens after about -15%. And that looks like a reasonable no-questions-asked stop loss point. I think the IBD philosophy espouses a 7% stop loss, but that might be a bit tight for sectors like e.g. the miners...

Thanks for a great post.

MCM

Another perspective...

Chris Puplava suggests that we are not yet half-way to bottom:
http://tinyurl.com/1w56

(Plenty of charts from the 1970s)

Icici Bank of Canada pays 3.40%. I have an account there and some 1-y 4.85% GICs coming up due in a couple of days. It's a CARA100 company ( http://nexalogic.com/cara100.html )

Any ideas as to who will replace AIG in the Dow?

ronK

Asia getting hammered across the board again tonight.

Where's F6? I'd sure like to hear what he thinks about currency crosses and gold and silver at this point.

Ah, yes ICICI and 3.4%, not 3.75%. But that's an Indian bank, really. I thought he was talking about a Canadian Bank. As a typical, conservative, Canadian investor I'd be a bit leary of putting my money in a foreign bank that's down 62% YTD already - i know there's deposit insurance, but why bother with the hassle for a extra 100 bp in this enviroment?

Mackinaw, re Canadian bank rates.

I don't see one that is paying 3.75%, although "Peoples Trust" says 4%, no idea what the conditions are. I don't recognize most of them till you get down to the bigger ones like ING who are currently paying 3%. I use ING short term, easy to deal with and no mins on value or time, they calculate on the day to day value.

This is the table from Globe Investor on bank rates.
http://tinyurl.com/42xz5k

Quasi

good link, Quasi. Thanks. Curious. TD does'nt show their rate in the list.

Mackinaw, re TD,

Snooped around on their web site, not easy to find, mostly stuff on all the fees and talk about their great rates. In the end I did find this pdf which details their rates and calculations, not a great deal, guess thats why they hide it. Looks like the best you can get is 2.25% but I think there are some stings (ropes) attached.

http://tinyurl.com/4fqeac

Quasi

Wow, thanks Bill. I will keep this short.

Since we are getting down to the wire, would it be possible for everyone to name their top 3-5 favorite stocks on their buy list ?

I am in GG, Franco Nevada, Barrick Gold, Freehold royalty trust, Oz minerals, ed, perth mint gold and silver and US fiat paper.

Looking at suncor, exxon - feeling a little dizzy and queasy. Did great on the gold today. whew!

"Buying after the market falls a lot is the hardest task you will ever face psychologically -- just like selling after you have made a great percentage gain is probably the second hardest. Fear always is stronger than greed. But if you are prepared, you will act" - Bill Cara

Thanks Bill. After coming here every day for two (three?) years I am ready to buy the panic. The tone of the CNN AC360 commentators and experts (none of the economists) tonight was one of concealed panic tonight. David Gergen, one of the most 'respected' non-partisan political aides was unnerved and yet said Paulson and Bernanke deserve high marks for their handling of the crisis. Bush is in hiding. Washington is scared that the heartland is not going to take business as usual anymore and may take matters into it's own hands.

shark_attack

I called Scottrade tech support to ask them why my screen would freeze up as it did and they told me it was the firewall settings in my McAfee.

The way I understand it is when you get McAfee from Scottrade the firewall settings already are set correctly. But I got mine free from my internet provider Comcast. So I called Comcast and they transfered me to McAfee which walked me though the steps to reset the settings correctly on my PC.

Again Scottrade tech support told me the firewall 443 port needs TCP & UDP open.

Hope that helps.

occam_razor

"....really worries me is how safe my funds are in Scottrade..... but it is totally different to wake up and see your lifetime savings freeze..."

Now you got me worried! ;-)

I'd rather see stocks on a short list Vanillabean.

I respect Patchie a lot and thank him for his work against naked shorts ---

---yet here is the part that burns me up:

I'm just a regular guy who got out of debt and saved up several thousand dollars and opened a Scottrade account a couple years ago. I kept saving and kept piling it into my Scottrade account. I managed to get past the $25k limit to get it changed to an account I could 'daytrade' and 'short' with.

Well, I'm certainly not naked shorting (that I know of) and I bet there is no way in hell I could if I tried. I trust Scottrade and pay them a commision on each trade to make sure my shorting is LEGAL. I'm just a LITTLE GUY to be fleeced.

So why can't the SEC do it's job and enforce the laws that are already on the books making NAKED SHORTING ILLEGAL?

I have owned stocks that spent months and months on the regulation SHO list. I read all this about the SEC starting to enforce the rules but invariably the press paints every short as bad and illegal.

WHY?

Because the now HB&B who was allowed to short naked illegally is eating it's own and going under.

All just my opinion.

I'd love to see the SEC naming companies by name who are doing the naked shorting and HAULING CEO's OFF IN CUFFS AND THROWING THEIR ASSES IN JAIL FOR IT.

They should have been doing that years ago.

Just one simple man's opinion.

Bill Cara, thank you for maintaining a platform where people can discourse professionaly and do so in a manner where we all learn. You have to be commended on maintaining such an outlet.

Best,

Dave

I was too busy watching the clouds and listening to music to be bothered with the markets today.

:0

F6

That must be some good weed fran.

When you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm.

Those who do not see whats wrong with this are criminal in my opinion. When I go long a share I want it to go up. To me it is criminal for a broker to take shares from a long on their books and deprive the owner of its fair chance to trade on fundamentals. So many people are used to this practice that it is no wonder why the system is collapsing now. If I were in charge there would be no short selling allowed period. A market should be made only by owners of the shares not by parasites who sell something they don't own in fact margin should be banned altogether except in the necessities of life like a loan for a home.

Just saw some informed comments that the Fed is starving the primary dealers of capital. Fed credit has dropped to a four year low. Why are they doing this? Do they need the cash for all the bailouts?

SandraT

I live in Vancouver and can tell you that aside from *possibly* getting immediate delivery on a 1000 ounce bar, your chances of finding any smaller quantities are almost ZERO

There is no silver available except by putting your money up and waiting for delivery which might take weeks.

So if you can locate a 1000 ounce bar in inventory then get it and don't think twice

Be aware that in the real world now the spot price means nothing as no one is going by it. Example....10 ounce bars if you can even find one are going for 17.50 CAD as if the price of silver never dropped at all

Jason Hommel is the best for info on this
http://silverstockreport.com/2008/troubled.html
Troubled Silver Dealers

Michael? I made the decision to open a 'margin' account with Scottrade after I reached the $25,000 limit.

I could have chosen not to open a margin account. I would not have been allowed to short stocks and Scottrade would have had to pay me a fee if I wanted to loan them my stocks to lend out as shorts.

Please tell the whole story.

Barney Frank - His lack of understanding precedes him. I'm afraid Washington answers challenge only with belligerence. It's obvious they don't fully comprehend root causes of today's situations. This lack of insight is unlikely to lead to beneficial resolution.

Case in point, extrapolate from the Iraqi conundrum. The old "We're not winning, therefore we're loosing" is transformed to: "We're not winning, therefore we are winning".

Get real! - Since when was war ever a winning proposition?

Simply stunning.

Global Equity Market Decline

http://tinyurl.com/4pf6jc

Well, nobody sold me their VLO after hours today at $30.70. Maybe it is for the best, as I can cast a wider net for VLO now. Placing buy limit orders at $29.1 and $30.1. Also, placing a buy stop limit order, stop $30.75, limit $31. In this way, I either get a bargain entry into VLO if it drops tomorow, or hopefully catch it on the way up if it starts rising.

Also, placing a sell limit order at $1.70 for the WGW shares I purchased today at $1.56. Then another limit at $1.80 for the shares I purchased at $1.30 and another limit at $1.90 for the shares I purchased at $1.40.

Also, placing a sell limit order at $10.50 for 1/2 of the SLW shares I purchased at $9. Placing a sell limit order at $12.90 for the SLV I bought last week at $11.90.

I'm also interested in VLO - but I'm placing a limit order on the Jan 25 LEAPs - ridiculously low bid, as much as I had been paying to trade the Jan 30s. If VLO drops and the trade executes - ok. If not, that's ok too - there'll be other days...

This strategy might play with CEG as well if the stock's as volatile as it has been - no sense trying to play it in real-time - as 2nd said, its a real one-armed bandit.

I don't know how I missed this article from a few days ago. Bang on, you might say.

Crossing the Rubicon, by Dr. James Glenn:

http://tinyurl.com/5mmpsb

Amazing volatility in the Asian Markets overnight. At one point HK was down 7% (end of the morning session), I went away to read some articles and came back and it was in the green!

I am one of those who have not been posting lately. I actively traded the Asian bear market from 1997 onwards and made money without the ability to go short but this market really has me talking to myself, all but impossible to find a groove. So I have neither made "easy" money nor have I been wiped out but I went fully invested with my "play" money on Monday.

But just when I would have bet the proverbial ranch that I would be taking profits for the foreseable future, the market another scalp for the having and suddenly I was facing an (albeit small) margin call.

Well, on Tuesday I moved over more than twice the required call, sure of my instincts.

But yesterday morning I panicked ... but I think it was a "good" panic. SteveC had posted at September 17, 2008 9:14 AM...

Bill, in your book you backed the idea of
trading an ETF as the main position and along
with about 4 individual stocks. I was
wondering if this is still the case. I started
buying GDX last week, but news from the UK
about an ETF there has me concerned.

ETF Securities products plummet up to 50% on
AIG fear ...

I had just 100 GDX that I was only slightly underwater on but I just could not risk a sudden $1500 loss in equity. Pre-market, I saw there were bids and sold at between 30.74 and 30.86. 15 minutes into the trading day, I think GDX was below 30, so I felt pleased with myself that I had been among the first to panic.

That GDX later rose 10% was but a weak(er)reflection of stronger gains in my PM stocks. I would have sold it into strength, as I did with 100 SLW at 9.45.

Emboldened, I scaled into TBT ... just 10 shares but I think it may become an excellent place to park my PM profits if they do in fact start gushing.

Thanks to all who are sharing here!

Back in 2001, I lost over $200K on SCMR and I felt that I had been misled by both the company in their conference calls and by my then broker Smith Barney's own analyst.

For about a year I tried getting some feedback from Smith Barney to no avail, even using the services of 2 law firms. As I did not feel like paying $10K retainer for a litigating attorney, I moved on with my life and made back the money and then some some in South Africa real estate.

But there were other investors who did see compensation from Wall Street without having to litigate. Lucky them.

But I don't recall ever hearing of U.S. legislators or military guys losing their "own" money in the markets. How many trading accounts are "protected" from losses ... well, I am guessing a fair number and that they are handled by numero uno, Goldman Sachs.

Prove me wrong but I am guessing that GS is "too big" to fail.

http://tinyurl.com/45fvyp

Gilt by Association.

An emergency cut SHOULD BE ACCOMPANIED by BERNANKE's RESIGNATION.

Good morning, sportsfans.

Here are your Cara 100 Ratings Changes:

PTR - Upgraded to Outperform @ Credit Suisse

KSS - Downgraded to Hold @ Citigroup

ORCL - Target Price Lowered from $26 to $22 @ Jefferies & Co.

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

Other Stocks of Interest:

CEG - Downgraded to Hold @ Citigroup
CEG - Target Price Lowered from $60 to $$20 @ Jefferies & Co.

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

Today's Big Market Mover:

Lethal Injection:

http://tinyurl.com/4sswqr

CP,

In war, as with the markets today, someone is always winning — at the expense of others.

I am seldom sure if the guys like Barney are truly clueless. They may be, but they may also be getting cut of the profits (in cash, gifts, campaign contributions, a nice house deal like Obama and Dodd).

Barney has been in D.C. long enough to know of ways to collect that we could not imagine.

We need term limits, no lobbying by former legislators and a lot of other regulation which will never appear in any reforms to come out of the latest mess.

I'd be happy to hear a TV interviewer just bring up these topics, but my lack of trust includes most of them as well.

Michael, Your interpretation of the short sale are somewhat misleading.

Shares held in cash or IRA accounts are to be segregated from shares available to be loaned out. Only shares in margin accounts can be used for stock loans and that is all part of a margin account agreement. If you do not want to have your shares lent out, simply move them to cash accounts.

Going after short sales 100% is just as bad as not going after naked (abusive) short sales because both would be negligent in maintaining market quality.