David- i'm no economist, but Kellner is, and i like his back-away-from-the-headlines take on the economy:

tinyurl.com/46fxyf

vinod- still looking to add at 10,600, and/or to sell into a spike...50% long..

India in the AZ-> TTM and IBN both down sharply pre-market...

2nd
have 50% in market, may add 10% more and that will be it for now. also will buy OEX call that will expira in november if market tank a lot.
most here have wild view about market and and they are not concern because it is not their money

2nd
I personally believe that TTM is a good long term play
and IBN is for a day trader

US dollar made a huge gain overnight, but gold has held up well. this appears to be a good sign so long as gold will continue to strenghten if the USD starts falling again.

ive been reading that the St. Louis Fed chart of the monetary base just exploded upwards as of last friday. an update will be issued this thursday. i dont fully understand the nuances of the chart, anyone care to comment on why the St. Louis fed would only be reporting an increase in the money supply so recently?

vinod- i like financials right now...

Polls -

We believed in Gov statistics - but they were lies.
We believed in Corporate financials as certified by CPA's - but they were lies.
We believed in Bond ratings - but they were lies.
We believed in Public polls - (tba)

Why should we believe the results of so-called Public Poling when the results don't ever seem to match what we hear around the coffee pot? Wasn't there at least one poll that claimed that most Americans supported the "Bailout Plan" as originally written. Shouldn't there be a full disclosure on each poll as to who was asked, what was asked, how was it asked, how was the potential answer framed, etc.?

Have you ever wondered who pays for these polls? Do theydo them out of the goodness of their heart, or do tthey have paid sponsors? Follow the money.
Or, just ignore all media reported Polls.

-----------------------------
ps I need a day off just to read all of Bill's recent posts. 8).

Bill,

Thanks for hanging in there through the computer frustrations. My last 15 years in graphics, I often spent days working on a project only to be unable to print it, or after delivery to the printer, some glitch would hold it up. Especially bad when Mac and IBM systems were far less compatible than today.

I realize perception and trust (lack of) are huge issues, but can't really believe the amount of "bad stuff" can be as bad as is talked about.

We have heard how "nobody knows" the extent and various opinions even higher than the $700B, but my trust level is so low with those involved that I suspect more wealth transferring is taking place under cover of "crisis' management. Nothing so far is restoring my trust level — I don't trust Obama to do what he talks about and don't trust McCain to understand what to do.

I expect a continuation of "too large to fail" by the "experts" in charge. More humunguousness!?!

I hate this top down imposition and wish someone in the US system would adopt your views of these criminal acts and remove the mismanaging participants from the rescue process.

Enjoy your time off and think of more pleasant things.

fidelity - FMOXX - the yield is 6.95%. It is their tax free money market....If they are insured, that is some FREE money...BUT I called Fidelity and they said there is no official guarantee yet. If there is an announcement, that would be a great place to stash cash.

2nd
Can you believe it that these trader were using language with profanity to describe return on their 401K for this quater that will end in few days. Of course they can not day trade stock and must choose fund that are offered in their 401k

2nd
I got burn once in AIG and that is enough for me no more financial.

I've been holding a big chunk of DTO waiting for $80 oil, wonder if it's going to happen today...

Berkshire Halted again? Wonder what's on Warren's buy list today...

rob d

Not surprised to see Fidelity muni mm fund.

Individual munis have been very well priced recently and offer some very nice equivalent tax yields. Seems to be beneath the radar with all the other market activity. (Disc: part of portfolio in shorter term munis)

Sign of the Times: Speaking of bonds, saw some Wachovia notes, about 6-9 months out, yielding 102.55% this morning!!!! Minimum 1,000, something like 455k available.

No position.

Spot,

You have the right idea, "...just ignore all media reported polls."

My son worked for a consumer research firm who did poling for retail companies. His job was data quality.

When a company genuinely wants to know the questions can be designed to gather useful info. Much of what is reported is simply someone's attempt to "prove" their position.

Unless we know what was asked and how, we know nothing.

Example: Several years ago I got a phone call, "I'd like to speak to one of your female employees."
"There aren't any." (click)

A few months later this was repeated, but I said, "You called here before?"
"Yes."
"I have NO employees. I work alone. Change your approach or get a different job."

"MidAmerican Energy Holdings Co., a unit of Berkshire Hathaway, said it would invest nearly $232 million in Chinese car maker BYD Co."

It seems to me the "bailout" "rescue" is not having it's desired effect. Libor is up this AM and futures are tanking hard.

Could this be a head-fake to shake out the weak holders before the vote?

Or do these futures tell the real story about how much confidence this Un-American Bill inspires?

Even though I'm holding DIA calls I'm starting to think the latter.

But I am ready to jump aboard the ship with the 95% of my money that has been idle since October when we hit DOW 14K.

What I'm waiting for is the dollar to top out and then I'll divide it between energy, basic materials, tech, and precious metals.

Good luck and great trading everyone.

Rob.

IBN-> to 80% at 21.80...

I get it now. This plunge is to scare all the congressmen to get in line and vote for the bill.

You can bet Paulson and Bernacke are like telemarketers right now to congress.

"You see what's happening now don't you? Do you want to see DOW 9K by Friday? "

Nothing greases the vote better than fear except maybe money.

Rob.

QLD- adding at 55.35...

Pretty gutsy 2nd... looking for Red 23 on ICICI? :)

Umm.. 2.95 beta? a P/E in the 20s?

Sounds like fun.

what's with the meltdown in alcoa ?

Look at people dump APPL!!

It's down 12.5%!!!

Rob.

Re: Financial Markets

How it looks in other countries:

http://biz.yahoo.com/rb/080928/business_us_markets_weekahead.html?.v=1

I would say the Dems could score huge points with voters if they campaign for the creation of a central bank and the abolition of the Federal Reserve.

Everything I watch looks like it's going down for a couple of days. exceptions - gold, possibly $USD.

another exception, possibly nearly sold out short term:
Notice that nasty gap down in XLB?
support just below @ 33.67.

QQQQ just hit a 52 week low.

Rob.

I could see this tank until the senate vote Wednesday unless it doesn't pass in the house today.

Rob.

This selloff is pretty brutal with no bounce. Are we crashing?

Jeff,

Congratulations on keeping the big chair warm. I will try to use language that you would find on the average cable show and nothing stronger.

Vinod,

You got burned ONCE and now no more financial? You need a little more sticktuitiveness than than my friend. Besides you didn't get burned by AIG... You burned yourself. If I buy a horse with a bad leg whose fault is it if it can't run the derby?
The thing about the stock market is, you GET BURNED before you win. Do you think something this cool just opens itself up to you because you asked? If you want to make the money, you need to fight the war, in the trenches, every day, and it's a war of attrition.

Toughen up soldier, it's time to pull that buckshot out of yer butt and realize that if you live by the sword as we do, you're gonna get nicked up pretty good sometimes.

And please don't hold bad banks overnight.

Re: Gold As A Monetary Instrument

Gold is probably the only commodity out there which can serve as bank reserve in a pinch:

http://tinyurl.com/4z9aq6

SLW "should" bounce from 8.70.

for daytraders only, keeping the calls I have but not adding the next 2 days.

QLD-> to 100% (of allocation) at 53.62...

It does feel a lot like a crash...Black Monday?

Let's see if this Titanic turns around at ten or ten thirty.

This graph makes it look like the Q's just jumped out of a FTSE airplane.

http://tinyurl.com/3mvnz8

Hope they have one of those jetpacks strapped to their backs...

XLB is hitting a 52 week low as well.

Rob.

Grand finale???

2nd,

This is one hell of a gutsy move (QLD). It looks like a nightmare out there. Your conviction is fierce. The price action on technology stocks is feeling very odd. AAPL down 13.5%, GOOG down 6.5%, RIMM down another 5.3%! What happening?

kind of a gentle slow crash though...
I bet it turns.

Looks like margin calls out there.

XLB looks somewhat positive intraday, thought maybe a good bounce at least.

After having looked at the daily, not a good idea - wait at least 2 days on it also.

$INDU:$VIX

lower than on Sept 17.

IE, fear is higher than on that date.

2nd
little scare to join you
shark_attack

thanks for inspiration
problem is it is very hard for me let go little gain I have

-3% in half an hour is slow? Extrapolate that to seven hours.

VIX is at 39.10, very close to 52 week high of 42.16

Sizeable sell-off in Europe:

http://finance.yahoo.com/intlindices?e=europe

You have to wonder at this point with the EU central bank will lower rates finally this Thursday:

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

wave,

margin calls are usually at 2pm or there after.

There are exceptions. Plus normally the calls come 2-3 days after a low.

fazeli- it doesn't take guts to buy at the low...it takes guts to buy-and-hold through a 40% drop...

energy really taking a pounding...

CNBC talking heads panicing (sp)

A crash would be a big gap down that does not get filled.

I'm not calling a crash, though anything can happen - just see seriously "down", probably for about 2 - 3 days.

If it goes down fast it will be over sooner, if it grinds down with a lot of bouncing it will take longer.

re:VIX/VXN

I've found that by themselves, they don't tell u much.

Compare to INDU/SPY in the former and QQQQ, they give u a better feel.

Why does gold go higher? I thought central banks are holding gold price. It breaks $900 now. I don't understand now.

re:IBN

trailed .85 buy stop, now long at 21.89

Manipulating the markets must be an expensive proposition, no?

IB platform had bulletin that announces 100% coverage in stocks with low capitalization. In my case LYM. This should push retail investors out of small cap, making them less and easier takeover targets? Am I wrong? I usually am
peace

QQQQ near some minor support, but looks like it is headed to the next major fib @ 37.38 (though maybe not already today).

Vinod,

You inspire me too.

2nd,

You still in RIMM or what?

Sorry if this topic is a repeat, I'm not able to read every daily post.

But does anyone else feel the following:

1) 4-5 financial institutions are in effect making themselves so big that they are protecting themselves by making their companies "too big to fail" size?

2) Ponder all the inside dealings going on in Washington? lobbyists positioning with congressmen to get their personal money in now for the rebound, guaranteeing spots for their kids at the best schools, Calling in all the previous favours ever granted/donated, all to get this Bill/stabilization through. Is there really any doubt? Isn't this the stuff of movies & books... Media spinning feverishly about the "what if it doesn't happen, what then?" to get the masses into a frenzy state, driving markets down further intra-day to get a better buy point for those that do know how this will play out? The vote will be close, so that there is an optics of 'perceived opposition' to it so that the public feels somewhat well represented and more debate can ensue and reflect back on this for coulda/shoulda/woulda conversations. A 100% in favour vote would be cause a riot as it would expose what's going on. But I bet near 100% in power positions in gov't are financially going to benefit is some means or manners. They may vote 'no' for optics , but I say they have their money bet on 'yes'.

I think I see what's happening, and I've sided my money (and was maybe a little early to the party last week) with who I speculate are the gov't inside power players vs those that are too stunned/paralyzed by right now to do anything significant (masses). Time will tell.

Regional Financials getting crushed again....Yield on 10 yr Treasury down 12 bps.

Fed has already spent the bailout?

http://tinyurl.com/3p59he

"The Fed said it was boosting the size of its auctions of liquidity to commercial banks and the size of its swap agreements from a number of foreign central banks to $620 billion from $290 billion."

bsi87... thanks for clarification on margin.

Fear and lack of confidence in the dollar rally are causing gold and silver to rise, I think.

I've been thinking about the main premise of the "bailout" bill that

"credit is contracting and no one can get the credit they need that will cause an economic collapse"

Well I still get 3-4 0.0% credit card offers for up to a year or more for purchases, cash advances, and balance transfers.

If credit was so tight don't you think they wouldn't be offering this?

I postulate that credit is only tight for the insolvent(which happen to be the good old boys who can't fail).

The other main reason credit is contracting so rapidly is because those people offered credit don't want it.

If credit isn't really that tight then why pass this bill?

Rob.

DTO - Sold: in@$37.95 out@$41.25 Close enough for government work....

I meant 3-4 offers per day,

Sorry.

Rob.

CALM down 23% on earnings announcement.

this is a critical price point for spot gold right now.

its about the 3rd breach of $900, with the price falling back under to about $897 there needs to be a solid move up and over $900 before the masses take gold seriously. at this point it seems like $900 is a line in the sand.

further USD weakness today and ongoing uncertainty may get the road to $1000 going, but for now a close above $900 is the first big step. imho.

good luck

There goes XLI to a 52 week low.

Rob.

Added some RIO and TCK. Will add to them if it keeps getting cheaper. I can hold for 4 to 5 years if need be. I haven't held anything for over 2 weeks all year, so it's tough changing the mentality. When the going gets tough the tough get going. I was in the crotch for 4 years. Now that's tough.

VIX is trying to touch 40, and can't. DJIA holding 10,800. going long DDM @ 54.12

long ANDE.

trailing buy stop on DE

still waiting for IYR to crack, it seems to have 9 lives.

A common pattern on days where Asia & Europe are hard down, is the US markets do a u-turn just after Europe closes. That's about an hour away.

Today is unusually bearish overall, but u never know . . . what they might pull out of the hat.

way overdone, esp tech. In AAPL at 108.15...

added to BA position at 57.06

The thing I remember about the 70's was interest rates. My savings account at WAMU did quite well, and mortgage rates were sheer murder.

dr. cosa - I like your Au commentary, keep 'em coming... Are you planning to keep holding? (Dis:I'm at 50% port)

SSO - is into me about 3% now...

Citigroup to buy Wachovia:

http://tinyurl.com/4clyw3

chickenpookie.

yes. barring a sudden collapse of some sort.

a close above $900 for a few sessions might be a psychological boost for gold and for people w/ money on the sidelines seeing only gold and miners holding up in this environment.

but right now its nothing but hyperbolie on the news about an imminent deal which is confusing to say the least.

how the US dollar made a huge jump overnight is beyond me.

Bill - (or anyone) - How's the body surfing on your beach? I used to run my dogs on Redondo early mornings and was known to catch a few waves once in a while (okay, a lot of waves).

Throwing in the towel on FRO, TOT, LLY, and DIA. When your long this market just guts you.

How are all you shorts doing?

$US is rallying on the basis that the Brazillian Real and other developing nations currencies are falling, and that some of those are in crisis.

I think USD is up on foreign bank trouble...? (EURO down)

"how the US dollar made a huge jump overnight is beyond me."

I think it is because you are going to see european financial institutions fail. The preception is That the US is farther along in their failure, so US dollar is stronger relative to Euro. I don't see how US dollar could possiblly strengthen relative to gold.

Anyone using IB know how I can dump out the outstanding contracts for a certain expiration date for options to as to figure out Max Pain?

Curious what Max Pain is on AAPL for Oct08.

bobbyo:

You just answered you're own question regarding $ and gold. US farther along, Europe crumbling. Market goes to $ but doesn't know whether $ is getting stronger or Euro just getting weaker. When it decides they both sucking wind, gold will go up. That would be Bill's $ up, Gold up scenario

T3D - I think we should be buying here...

Re: Brazil

http://www.reuters.com/article/usDollarRpt/idUSN2937447220080929

OT: Body surfing in Hawaii is great. Makapuu and Sandy Beach are unreal. In the late 70's early 80's when I was stationed at Hickam Air Force base, I practically lived at Makapuu.

I like to play tennis, but after three months here in Hawaii, I threw my racquets in the closet and for the next seven months went to whatever beach on Oahu had waves that day. Some of the best years of my life and I never left Hawaii.

Out of DDM @ 54.97, 1.6% gain

probably early, want to be safe though. looking fwd to the day i have more than three lousy day trades per week.

I've been buying all morning and am about 50% invested long....nothing on the short side.

It feels a little uncomfortable so it may be a good place to be.

Doubled down on my NCC (2.20) trade from Friday.

Rallying hard after this news item release:

10:48 ETNational City says its Tier 1 capital ratio is the highest of all large U.S. banks at 11.1 percent and has no plan, intention, or need to raise additional capital - Reuters

BTW 2nd: Got with you earlier only using ROM just above 52 wk low instead of QLD.

How's the inner karmic meter doing? LOL!

Sure felt nasty this AM, time to nibble on the lows of our favs.

QQQQ broke a head and shoulders neckline on the weekly going back to 2006. Projects to around 30.

Pookie, your are probably right about buying here, but when I start seeing a multitude of stocks down 10%, 15%, 20% I prefer to take cover and fight another day. I guess its just my preservation of capital mentality here.

The turn is never easy and the banking system is on the edge. Plenty of time to get back in.

Re: Gold Headlines

A google search for gold headlines:

http://news.google.ca/news?ned=ca&hl=en&ned=ca&nolr=1&q=gold+bulion&btnG=Search

Fazeli - Here's a link to a max-pain calculator; looks like at this moment max-pain for AAPL Oct's is 140.

http://tinyurl.com/4xprgy

Re: pattern day trader limitation

Anybody ever try "closing" an ultra-short trade by purchasing the same amount of the corresponding ultra-long, then selling them both the next morning? Ideally, you've closed your inital short position. Yes, you're paying add'l commissions, but at least you're not "locked in" to your initial trade for the remainder of the day, or overnight, where anything can happen.

Granted, there are often extreme disparities in the behavior of corresponding ultras. You are now exposed to this risk... but at least this one is not *supposed* to happen.

Thoughts, anybody?

Into POT.to @ 140

OldGoat,

Thanks for the link. That value is enlightening! Is Apple getting killed for any reason other than the consumer spending news out today (0% increase)? I think they had a downgrade too, but man, what a brutal pullback.

Texas - In Amarillo it's so flat... looking into the horizon on a clear day you can actually see the back of your head.

Fazeli

You may find this max-pain calculator easier to read.

http://www.optionpain.com/MaxPain/Max-Pain.php

OT: If you want a break and some fantasy check out the link:

http://www.hawaiiweb.com/oahu/beaches/makapuu_beach_park.htm

2nd,

I have read Kellner for a long time and I''m confident of his general knowledge. The thing that bothers me with this article is his willingness to accept government data and...

IMO —
The comparisons with 1929 may be skewed due to differences in financial communication delivery methods
.
Then: Newspapers, radio, only a few reports per day and relatively little international coverage.
Now: Continuous reporting — globally — with CNBC cheerleaders hyping markets and individual stocks. Also, instantaneous interlocking international banking and trading

His other points seem totally reasonable — taxes and other policies then, etc.

I believe the blather on TV is propping up the markets right now and the instant trading capabilities distort actions.

While Smoot-Hawley may have choked trade then, but the lack of manufacturing and other quality jobs today is lowering purchasing power and increased credit access will extend a large part of the problem indefinitely.

I totally disagree on this part —

"We have met the enemy and he is us."

I'm with Congressman Garrett, who is quoted on Jon Hussman's website to day.

"This morning we should be very much alarmed. Obviously, Washington is not listening to your wishes. Those who used to work for Goldman Sachs will support this deal. Those who have blocked reform in the past will support this deal. I will not support this deal." I couldn't agree more. This is not a good deal, because it will waste taxpayer money without addressing the fundamental solvency problems.

The enemy is defining the problem to exclude themselves and I doubt anyone truly knows the final tab will be on this.

Fatty I have been burned doing that.You really need to look at trading volumn for each ETF. I am sure there is some way to find an Arbitrage situation when they don't trade in line, but I have not been able to exploit it.

I'm with you on the TCK, RosevilleBill. I couldn't resist it at today's price.

re:POT

put in a one cancels the other order for DE, POT, and IPI.

Re: Cambridge House

Cambridge House is hosting another resource conference in Toronto this weekend, Oct. 04,05.

The speaker lineup is just great, even if you don't want to talk to your gold junior company rep:

http://www.cambridgehouse.ca/ch_tor2008.html

This week's WIR was quite interesting. Bill laid out his premise for why he feels the market is close to a bottom. I'm certainly in not any position to challenge the views of a veteran professional trader, but I'll put forth my opinions nonetheless.

Today's early weakness in the U.S. equity markets will reverse once the bailout (rescue) package is approved by Congress - and I think we can all agree that there's hardly any chance that this deal does not get approved by Congress.

The ensuing rally in the markets will be rather short-lived, IMO. I don't see the S&P getting above 1265 on this next short term rally, but it's a bounce that can be played by nimble traders.

It is my belief that the severity of forthcoming weakness in the U.S. economy has not been completely discounted. There are many more people who have relied on credit to sustain lifestyles than what is openly recognized.

Bill is correct in his thesis for shunning the financial and consumer discretionary sectors. It is my opinion however, that the weakness will spread into other areas of the economy, and for a period longer than what many expect.

Americans don't like pain, especially when it affects their pocketbook and their lifestyle. They will avoid and shove away in any way possible a cut in their way of life.

But this current situation is unlike those of prior economic declines, save the great depression. The level of personal unsecured debt in the U.S. is way out of hand, and it has to be purged.

The level of excessive and wasteful spending by the federal and state governments is out of hand. The next administration will have to rein this in, and also raise taxes. This will be a very painful process, but a necessary one.

I see lower equity prices ahead in the U.S. once this next "relief rally" is over, prices that will breach the recent lows set back on September 18, 2008.

Just one person's opinion, as always.

XLE just below 64, if it can't break back up, it's going to the next major fib 55.40.

Not time to buy today.

"QQQQ to 30"?

How about to the 2002 low around 20 . . .

but, first things first, next target 37.40.

Exactly to Bill's point:

"``If people think the authorities may give in to fears, they are wrong,'' Financial Stability Forum Chairman Mario Draghi said today in Amsterdam, where the international group of regulators and finance officials is meeting. ``There is willingness and determination on winning the battle to restore confidence and stability.''

Bloomberg:
Fed Injects Additional $630 Billion Into Financial System to Stoke Lending

http://tinyurl.com/4lq55c

gold sinking below $890, shares doing their usual swan dive farther and faster down.

$900 is the line to be defended by the powers that be, perhaps they know gold might zoom too far too fast should it breach that important level while the rest of the market is going down.

USD rising again,
unreal.

translation for my post just above -> the authorities on a co-ordinated global scale will inject whatever amount of liquidity is required to ensure credit grows again.

long POT at 137.35

Trailing 19 sell stop (entry-1.5* 10 day ATR)

and sell limit 168. (200 day EMA)

I just heard on the radio that the House vote is scheduled for 1PM.

I suppose we can expect a 2:15 announcement just like the FED does after Europe closes.

Rob.

Dr. Is it the world banks holding gold in line.

Dr. Cosa - I don't think they are defending all that hard right now - there is massive flight to "safety" (treasuries). Safety is a moving target and that will change to hard assets eventually.

As long as equities rise significantly, I think eventually they don't care all that much that gold rises to $3,000. They will however, be extraordinarily concerned when broad based price inflation pulls wage inflation higher - they just hope that is much later after confidence is restored.

At that point they will need to intervene again to prevent a spiral - they are hoping this occurs only when credit is growing again and stability is restored. Then they will have a little room to maneuver/manure on credit.

Re: Gold Prices

Steady or declining treasury rates and foreign currency crises are putting a floor under gold prices, as bullion remains firm against a rising dollar.

http://finance.yahoo.com/bonds

We'll only see a $100 up day in gold if treasury yields collapse again to below zero.

Contraction of the TED spread is the immediate key to any improvement in the market. I believe that institutional investors are utterly fixated on it and only a contraction will demonstrate that the credit markets are improving and the bailout working.

The bad news is that during the crises of 1987 and 1998, both the TED spread and the yield spread between LIBOR and fed funds did not peak for two months.

Putting long money to work before you definitively know the credit markets are functioning again is IMHO reckless.

Folks,

It seems that congress doesn't want to pass the bailout bill and will do so only when cloaked by the appearance of unanimity. I suspect that Republicans would like to blame the bailout on Democrats and run against both the bailout and Wall Street this Fall. Wouldn't you?

The amount of insider trading in this market is too much. DELL on last Tuesday, RIMM last Friday. I am sure there are tons more that I didn't even catch.

Where is SEC?

How do you know it's insider trading and how do you know it's illegal insider trading?

Volume is pretty tepid. This selloff might just be a message to Congress.

QLD - Bid @$52.00

Listening to Pelosi on CSPAN.

If this bailout is such a hot idea how come no one wants to vote for it and why is the market swooning so badly?

Who's going to prison for ruining our country?

SHarkster:

Calls are 20 to 1 against. Even if it were good legislation, which nobody knows, people are angry-these people's careers could be over. As we know from Pol 101, the first job of a pol is re-election.

Re Insider Trading:

Dell got dumped on last Tuesday in the afternoon, on Wednesday news came out it was downgraded.

RIMM dived last Friday, today it says it was downgraded.

I think all insdier trading is illegal. No?

LOL! Everyone's first job is always CYA....
I'm doing that right this minute!
As I mentioned a few days ago, I am very interested in how these folks sell this POS.

Celebrate! -

1 of the 208 Morningstar sub-industries is actually UP: dairy products +0.98% !

biggest loser: regional banks, off 20% !!!

correction: it's regional SOUTHEAST banks ...

Insider trading or trading on inside information? Lots of examples of stocks that moved dramatically before the release of information, but few convictions. True insider trading seems easy to catch, as there are clear rules for insiders not to trade in certain information windows and certainly not right before the release of news. Catching the people they talked to or catching them because they talked to people is probably harder.

Trading on insider information would be better to describe what happened to DELL and RIMM. Thanks for the correction Shark and manx.

Re: Gold Price Drops Intraday

Note that gold price drops usually occur around 11:00 am when London markets are shutting down. Gold should be collapsing along with the deflation in commodities values, but since it is money and money is 'in demand' then it should remain firm.

I think some hedge funds are really getting their clocks cleaned today on fund redemptions that are causing forced liquidations.

The last 2 decades have been dedicated to making regulations easier for hedge funds to navigate markets. I think that period of time is over for now as excessive leverage is now being viewed by regulators as a main contributor to the current market situation.

I think there are a lot of great deals out there today as stocks are being sold simply to raise cash w/o much consideration of their true "value".

One thing I have noticed about market bottoms is that there are amazingly cheaps stocks all across the board, but that the majority of market participants are so off balance they are unable to take advantage of the situation..........I feel we are there right now.

It also wouldn't surprise me if part of the plan for this bailout involved a conscious effort to wait until this hedge fund scourge was complete before letting the market rise again.......

Reloaded SSRI and SLW on the drops this morning

I'd look at the downgrader and see if they didn't leak the info.

I'm not sure leverage is the issue other than the ride down can hurt as much as the ride up...if you're getting into a hedge fund, you better no what you are doing. The off-balance sheet stuff in the public companies made it impossible to know what the leverage ratios were.

BB,

I am all for a nice juicy conspiracy theory, what could be possibly more fun... :) but in RIMM's case it's certainly not what happened. RIMM announced earnings miss after market on 25th, dropped in after-hours trading, opened down and traded more down on Friday, received mulptile donwgrades, too. Today's downgrade is just some analyst who slept through Thu-Fri. Before earnings announcement RIMM actually traded up a bit.

Re: Insider Trading

Those stocks which may have been downgraded the week after insider selling might have been downgraded BECAUSE of insider selling and thus crashed.

these reps sound like theyre gonna pass the bill.

Buying 500 OEX (OEXFF), 300 WAV (BKRYE) and 200 NVA (NUVSF). These guys are hard to buy because of the volume.

Thanks for the input VAd and Fransix

2nd
Few thought came in mind this morning. One was to go 100% and take chance. Even if it go wrong will lose half ore more of my gain but reward will be Hugh if I am correct.

Also felt like go for 100% and half of margin available to juice the return.
Finally I gave up whole idea, just to let you know mental status

In order to force an un-reviewed version of the "rescue plan" house leadership invokes martial law....

"House Invokes Martial Law"

http://tinyurl.com/4e8ffh

Everything seems so surreal... "I dont think were in Kansas anymore Toto."

Hehehe...

Vinod: Glad to see your sanity catch-up to your risk management.

There is always the aftermarket, but you'll have to have trades set-up to trigger right after 1:10 when the vote is scheduled.

Initiated position in ROM

MtnGntx

That article was dated July 28, 2006

MtnGntx

That post was published in 2006.. I mentioned House Republican leader ...

Date of "Martial Law" article is 28 July 2006.

Well I just laid some chips down betting our leaders will vote against our will and pass the bill. In that spirit I bought calls on UYG and calls on the QQQQ. And still holding calls on DIA and SLW.

Rob.

Craig
I am always looking forward for your advixe.
and I do not miss any of your post

Sorry QT,

You are right, but that is just the explanation for this, much more recent comment, made in congress...

http://tinyurl.com/3qjc94

still chuckling...

Initiated position in UYM

Cramer is saying Dow 8k and sell into strength. Thats enough to listen to Bill and buy.

http://www.cnbc.com/id/26906947

Cramer has been so wrong through this bear market that you have to wonder how he ever made money or something else is going on.

The Cramer indicator usually works well I find.
How does he even keep a job since he's always so wrong?

I guess that shows who he's batting for.
Rob

i have to admit,

looking at Kitco's spot gold chart w/ the 2 day overlay, you notice the patten has been disturbingly similar the past week with a rise at the start, then a gradual dump through the rest of the day.

USD still holding up here, and im wondering if the process of rising USD w/ a rising gold price will hurt the mining shares even more.

i feel like a broken record but i have much trouble at this point understanding how mining shares continue to loose their value relative to gold in this environment, that fall w/ the broad market but dont rally w/ the broad market should gold fall in opposition. are they being held back artificially or just victims of all the metal ETF's and such???

Well Vinod, I got the timezone wrong.....so don't pay too close attention!
You can be sure I read all your posts as well. Anyone up as much as you this year bears watching. Congratulations.

It looks like we'll all know what's going to happen in 15 mins.

Good luck to you.

next thing regulator should do is ban on upgrade/downdgrade?

I'm not sure the market doesn't sell off further even if they vote the legislation. Isn't everyone expecting them to pass it?

Now, THIS looks like another exciting day in the market, unlike what we have been having last week. :) I was waiting for such kind of bargains before buying again the shares I sold two weeks ago into the "bailout rumor" rally.

My buy limit order on ESLR was triggered at $5.50, on SLW at $8.50, on SWC at $6.20. Then, as I was having breakfast, I bought some TBT at $61.20, some VLO at $30.69 and QLD at $53.13.

I have resolved my concerns about the rising unemployment rate ahead by looking on the BLS website that DOW usually started rising from recession 6-9 months ahead of the unemployment rate peaking. Yesterday I read on AP news that "many experts are predicting that the unemployment rate will rise to 7-7.5% and 4Q 2008 GDP will be negative." This indicates a real possibility that all the future economic problems are already priced in, unless the economy takes an unexpected turn for the worse.

My bid on UXI just got hit before I could cancel it.

The vote's not looking good for Hank.

ARE WE CRASHING?

Wow. Here's the crash.

TRIN exploded so the selling is real now.

Time to do some shopping Now.

Circuit breakers?

http://tinyurl.com/q89r8

Dow down 600, time to buy yet?

I bought SLW and VRNM a few minutes ago. It feels like capitulation is getting closer. There is no way to time the exact bottom, but every day it feels closer. People are now beginning to panic, which is when I want to buy.

WOW! The market has just crashed! Bought some more QLD at $49.67.

I'm wondering if it's time to put the 401K back in. This looks like capitulation. Wow!!

Is the vote tally even out yet?

Rob.

Did not pass in House.

SLW... lots of downside still appears on the chart.

Picked up some XIU.TO @ $17.25. Sitting in the hole on this one.

C'mon... GE too big to fail. :)

Incredible

holy crap! i couldn't believe my screen!!

Somebody going to demand a recount of FLA votes?

Sheese. And I thought the crash would happen last Monday.

:0

My broker is down cannot trade anyone else having problems.

Look at everyone pout now that the House didn't give in.

Even if I lose all my long money I'm happy it didn't pass.

Rob.

My broker is down cannot trade anyone else having problems.

Money.cnn.com stopped loading for me.

Someone big just bought that huge dip.

Rob.

I don't see any news of the bill not passing.

Fairly big bounce - dow -360 now and nas -114 - short covering perhaps?

Marketwatch says bill did not pass.

13:51 ETHouse of Representatives holding open vote on Wall Street bailout bill with "no" votes in majority - Reuters

Headline at WSJ's breaking news:
Dow industrials fall 700 on fears bailout package vote will fail, but later recover to a loss of about 400.

??? DOW feel to -700?

Did not pass but some arm twisting going on and votes still open with little movement 207-217. I am hoping it dosen't pass
Jim

Re: Gold Junior Space

Looks like a wide disparity between NAV based on oz. in the ground between majors pricing in $200/oz. and junior pricing in just $30/oz. will probably have to close before we see any sanity in this market.

"Even if I lose all my long money I'm happy it didn't pass."

Exactly my sentiment!!!

cnbc.com live coverage shows results:
dems 141 yay, 94 nay
rep 66 yay, 226 nay
totals 207 yay, 226 nay

looks like the voting is finished

schleepy/moab thanks for taking the time to give us the news

Bull Hunter and Jock,

I see SKF is up 11+ today, but if the situation is still as outlined in BH's post of the 26th, then I guess what we have here is a fiat short financials fund :-)

I can't quite see the odds being too good with this anymore.

they are short by 11 votes and every vote has been counted. they are evidently trying to get people to change their votes to pass it

The radio just reported that the vote is ongoing, that they're holding it open longer to try and rally the votes.

Rob.

Wavesmash,

Yeah, SLW could go lower yet, but I expect it will move back up in time. This was not a day trade for me - more like weeks or months.

TSX down 800 pts. That is so last week.

http://tinyurl.com/3mu765

Some of those Reps will look at the plunge and switch their votes, I would think.

I too am glad the bailout bill did not pass. Quoting Ron Paul:

"In conclusion, there are three good reasons why Congress should reject this legislation:

a. It is immoral—Dumping bad debt on the innocent taxpayers is an act of theft and is wrong.

b. It is unconstitutional—There is no constitutional authority to use government power to serve special interests.

c. It is bad economic policy—By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work."

Dow low so far today 10438.

Nasdaq low so far today 2036

S&P low so far today 1130.

Rob.

Hopefully a done deal. Longest time a vote was held open was 3 hours to my memory
Jim

Really, at this point do the Euro zone central bankers need to clubbed over the head to lower interest rates, or are they compleat reatards?

done deal failed vote closed
Jim

We might hit the circuit breakers today!!

Rob.

XIU.TO filled @ $17

Why do I feel like I'm going down with the ship.

Anyone picking up some $62 RIM today?

I am looking at gold, and it stays around 900. Wouldn't it have skyrocketed way above, if this is indeed the end of the world as we know it? Sounds like fleecing the sheep to me. Unless, of course, it's exactly the other way around this time.

Oh well. I guess we'll know soon enough.

Republicans stood 2-1 against it with nearly 100 democrats joining them.

Breaking news on the radio currently.

Rob.

"Even if I lose all my long money I'm happy it didn't pass."

You read my mind :)

PCA.TO back to levels I bought in last week's crash.

Time to add to a position?

This is it. Black Monday.

I'll be in on RIMM at $42

Grym, I was the secretary of a top executive at a bank holding co. during the 1987 crash, and the difference in financial communication delivery methods (and speed for details) even compared to then, let alone 1929, is amazing.

GLD & USO probably getting it just as much as anything else.

The commodity bubble was probably caused by the ETF market & speculation and I think would correct itself back to 2004/2005 levels.

What time was margin call again?

Re: Forex

Look at the currencies at the bottom of the kitco page:

http://www.kitco.com/

Pretty remarkable voting in Congress. Not many thought this possible, but it appears enough constituents contacted their representatives and voiced their disapproval.

Back to the drawing board for Paulson and gang.

I love seeing GS and MS right down near the bottom of my screen draped in red!!

Rob.

Anyone want to buy GS at Buffett's price - here you go.

Frankly, if you don't want the bail out to pass, you simply do not understand what the problem and what is transpiring as we speak. It is not just some banks going under and market indices crashing. It is a complete failure of the fiat money system who's ramifications will ultimately be the worst for main street since they do not have the cushion that the people who created the problem have.

Obviously the powers that be should not have let this get to this point, however there is no choice now. It is far too late to take the high road. Rather the high road has become saving the entire system from imploding.

It is looking like it is not passing. There will be other steps taken. I would be much more worried about those alternatives than this one put forth. Expunging the risky assets is the correct thing to do - recapitalization will take multiples to have the same impact.

TRIN hits 5.52, VIX hits 46, panic is in the air.

Goldcorp up strong since deal killed.

Bill picked a good day to sit on a beach. Hope he gets his computer fixed. Nowadays it's less hassle just to get a new one.

Saw a nice bounce off $50/shr for CNR.TO.

Deals to be had.

Unreal.

I think we need to let the companies who made bad bets on worthless securities fail.

That has been my position the entire time.

Hopefully now they will and we can use the resources we have left to grow the strong banks left standing into the new JPM's and BAC's.

Today I invested in some securities that may be worthless if the market keeps crashing. No one is going to bail me out so why should anyone else get bailed out.

I'm not afraid to let all the weak fail.

Rob.

Those reps are going to regret not voting for this bill. Credit markets are not functioning right now. If they don't reflate soon every company will be affected.

Re: Financial Collapse

The money markets may be collapsing, and we'll see a rout, but they'll pick themselves up, dust themselves off, and go at it again in the immediate future.

Just wish I was in front of a TV to witness the panic on Bubble Vision.

$700B saved from the clutches of the 2nd largest sponge in history. Will it be put to good use now?

picked up some FRE at 1.61 on the news. not sure if it'll hit $1 or $2...

"It is a complete failure of the fiat money system who's ramifications will ultimately be the worst for main street since they do not have the cushion that the people who created the problem have."

History shows that unbacked fiat currencies eventually become worthless. Imho, the longer we keep our broken fiat system propped up, the worse the crash will be.

CEG has turned over 19.15 last

The market isn't really down as much as could be expected given this vote. Lets' wait until 3 PM to see how the market reacts.

Interesting that this Congressional vote occurred on a Monday, so there's no weekend to ameliorate the veracity of this vote.

The markets may get to decide where this thing goes, finally ...

Since watching the video's this weekend from Kaimu and Mojo it is clear that this is the natural course of credit contraction (de-leveraging). This is quite possible Long-Term Capital 50x's.

I think I'll go to the beach.

Re: Fiat

If fiat currencies are supposedly collapsing, the why is the ¥ performing against all others?

Later tonight I'm sending a personal thank-you email to each Rep that voted against this bill.

Maybe all of our politicians aren't bought and paid for. Maybe some actually listen to their constituents.

Or it could have been a huge duck and weave by the Bush Administration to throw Democrats under the bus, since they're the ones who mainly voted for it.

Either way I feel like there is hope for America, the cancer may finally be cleansed instead of masked again.

Luckily all of my positions have March expiration except the DIA calls, which are Jan. So, I'm holding tight.

Time to head out in the garden and whistle the Star Spangled Banner while I harvest tomatoes.

I imagine a few people have steep losses right now but take heart in the fact that the House did the right thing and remember it's only money and much easier to get than Freedom.

Rob.

DGP taking off.

ST07,
Not to sound snarky but...it seems to me based on what you wrote if a person favors alternatives to THIS plan they "simply don't understand the problem. How can you know what I understand. I disagree with the bill as written and I have read it
Jim

going with the po

VIX is above 45! I've never seen it there.

ST07 - "Frankly, if you don't want the bail out to pass, you simply do not understand what the problem and what is transpiring as we speak."

Very respectfully, I would like to point out that the real problem is what caused this mess in the first place. Now I hope we can quickly resolve the real issues without causing complete kaos, but HB&B probably continue their fight. Believe me, I may not know the bankers personally, but I do know the mentality of those who believe they can do no wrong. They will never admit it because they have brainwashed themselves.

I don't mean to offend.

make that going with the plan...at 100% allocation in QLD/UYG/USD/CAF/TBT/assorted picks...

Would even 100 Eliot Spitzers have made a difference?

I'm right there with you 2nd. Holding tight and adding on further dips later this week.

Rob.

I'm very much pleased by this result. We need to clear the excesses out ASAP and this bill would have delayed the process interminably at the expense of taxpayers to the benefit of the rich.

Bill Gross isn't happy. Which means I am!!

Tom,
I'm not sure if 100 spitzers would make a difference. Is there stock sold on prostitutes?:)

It's fairly obvious that the "plan" needs to be re-worked. The message has been sent. Wall Street will make their vote as well.

It's time fore responsibility on all accounts, from all those involved. No more chicanery; it's time to flesh it out and get a deal of significance completed.

No more bandaids. That is the message sent, IMO.

Stop loss orders. Did anyone get screwed on the super spike lower and get taken out at a super low price only to see it recover a few min later.

I vote for the plan because I am afraid of depression. I truly think it is possible. There are a lot of people will lose their jobs, houses.

But I have trouble to say yes because I don't want to handle money to people who create the problem in the first place.

net of net, i vote for the plan. but we have to wait and see what will happen.

bobbyo - I gave up on stops long ago and then was reminded why again last week when I thought I'd try again.... short ans: no... I think the HB&B know how to take your money this way, like Bill has pointed out many times... mental stops are the way to go.

Sorry to hear it bobbyo. I figured today would be a bad day to enter stops on the securuties I carry with them being volatile enough on their own.

At one point the bid dropped to 31 on ANSS and was hit a couple of times. Bill was talking about good companies at cheap prices - if I had any confidence that it was done going down I'd be all over this one.

All this said, this U.S. stock market will need to fall a whole lot further before we see real, meaningful action.

It's acknowledged that credit markets are/will continue to be frozen. This isn't good for the general public on a short term basis. There will be a lot of pain. There will be higher prices for everything we buy. There will be shortages for many of the things we require on a daily basis. But this is part of the healing process.

This process will lead to action that will eventually get things resolved in a real way.

Ultimately, equity prices will go lower, imo. But it will help to work things out for the benefit of many people.

I hate to say it but a lot of people SHOULD lose their homes.

Pelosi is a hateful(expletive deleted).

Go back to what Bill and others say: as repugnant as it is, the rescue is necessary to keep intact the system we all live by. Paulson is the best man to get the job done; however more grovelling and ring kissing is necessary.

The public is awake, and will slowly clue into what we learned yesterday in fiat money 101.

Let's bite the bullet, rescue it, then reform it as Bill suggests with independent bodies overseeing.

This bailout, as it is written right now, is a bailout of Wall Street with significant risk to Main Street. Rejecting it is the first right step. The 2nd step is to help Main Street. Liquidity is still needed to industrial enterprises and Mom and Pa shops around the country. The question now is how quickly the Congress can get that sort out.

It seems whoever bought financial stocks will be really depressed for a while. I am 100% in equity anticipating bailout plan to be passed. Luckily those are Tech stocks and miners, all of them are good quality Cara 100 stocks. I am ready to see my portfolio to go down 20% (7% right now) or more. They are quality stocks and they will come back. Too bad I didn’t catch this bottom, again!

3:00pm.... TSX dropping again.

This would be an awesome place for the shorts to come in and cover to get the market to retrace a bit. Too bad lots of short selling was outlawed. Let's see how that works out for us here...

(this is my sarcastic way of wondering out loud if we're going to see a marked change in behavior of prices, where the "dead cat bounce" is much smaller than we would normally expect it to be if normal short selling rules were in place)

Posted by 2nd_ave: "make that going with the plan...at 100% allocation in QLD/UYG/USD/CAF/TBT/assorted picks..."

2nd_ave: do you mean that ALL your cash is now invested, even that half of your portfolio that you don't allow yourself to trade?

Lack of shorts probably = lack of volume too.

Money flow seems to indicate somebody bought the TSX hard at 3pm?

We're still below avg. volume today.

http://tinyurl.com/4je35s

I decided to follow Buffet and 2nd_ave into the financials now -- bought some GS at $120.

David- in a way, yes-> you might recall that i'm using OAKBX as a substitute for 'cash,' so i'm 50% long and 50% OAKBX...

Politics aside, because it doesn't serve traders to follow one side or the other, Pelosi is a detriment to this situation.

What is the problem with Pelosi? Republicans didn't vote for the bill - that is not her fault.

The problem is that politics are not being put aside by the speaker, Dodd, Frank etc. This whole mess would have been blamed on the Bush administration as the incumbent is always blamed in economic downturns (rightly or wrongly). The strident partisanship from the democrats killed the bill although I feel it should have died on its merits. At this momoent in the democratic press conference they are talking bipartsan but did you catch the bush/republican bashing on the floor today during the pre-vote debate. It was just stupid.
Jim

GM is at $9. Broke through July low.

Anyone want a GM @ IPO price?

NSANY down 10%
TM down 9%.
GM down almost 8%

They were short 10 votes. 92 democrats didn't vote for the bill. Pelosi pissed of 12 republicans who were prepared to vote yea on the floor by assigning the blame for this mess as conservatives fault
Jim

The political discord on this issue has the market freaked.

We're headed for el basemento. Bill picked a great day off!

PPT on next beach over!

2nd
WOW!!!
i have lots to learn about market.
did nothing but put 30% of my cash in TBT
could not push button when it was down 700
now I do believe that this market can go down anthoer 2000 point
also my 50% equity in stock is down 9K as of this writing
no plan to do anything for a while

"Pelosi pissed off 12 republicans who were prepared to vote yea on the floor by assigning the blame for this mess as conservatives' fault."

you can always count on human nature to do the wrong thing...

Circuit breakers:

1200 point daily drop on Dow

Trading collar is instituted at 10% decline from price at 1st of quarter. this would be 10243 on the Dow cash index

You're telling me Pelosi's speech is to blame? That Republicans couldn't put that aside and vote for saving the financial system?

Let's not start the political bickering again.

Buy CNR @ $49.25

Any recommendations on stocks that could hedge this?

FRO, one of the reasons that I sold FRO today is that the Dry Baltic Index has been breaking down. This breakdown just confirms the economic slowdown the world is experiencing.

If you look at the price of a group of these stocks FRO was showing relative strength, many others are breaking to new lows. No sense in watching FRO go to new lows when I can sell out and re-buy later when facts change. Here are a group of shipping stocks, see for your self.

FRO
TNP
GMR
TK
EGLE
OSG
SFL
NAT
VLCCF
DRYS
OCNF
PRGN
DSX
GNK
ESEA

I still have CEG, what a ride again today. There are two positives for this stock, a bid by Buffet for 26.5 or maybe another bid from EDF should provide a floor. The negative is the paper they hold and who the counterparties are. This fear seems to surface every few days.

jamgar1
"Pelosi pissed of 12 republicans who were prepared to vote yea ----"
If this the reason than it is sad to say that elected prpresentative care more about personal feeling than merit of financial bill
it would nice if they said they did not like the bill and voted against it

2nd,

You out of RIMM yet or what?

Black Monday anyone?

My screen is so red its messing with my vision! All my PUT shorts are looking very ugly now. Most are still above strike, but still, it's fugly!

"Say goodnight Gracie..."

This thing goes much lower.

And I mean a whole lot lower. It's a necessary purging. It must happen.

And it will go go down more than many think.

UUP is up....?

Meltdown is here: Main Street's revenge. Perhaps 1080 can stop the decline for a while.

Apollo -
"I vote for the plan because I am afraid of depression. I truly think it is possible. There are a lot of people will lose their jobs, houses."

I am afraid they will lose there job anyway. The huge expansion of money and globalization has led to the loss of a manufacturing base in the U.S. We have become a service economy based on credit which led people to buy things and services they did not need and they went into debt to do this.

We do not need so many financial engineers, home builders, real estate sales people, shopping malls, nail salons, and etc. We actually need to make and manufacture things. So jobs will be lost in the service industry no matter what. Hopefully we can create new jobs in manufacturing.

2nd - I was interested in your RIMM position as well. I've still got my 50 @ $73 so it's hardly killing me, but it's a pretty dismal percentage performance. Personally I don't see much point letting go here.

The folks that seem to think the credit freeze is an idealogical and/or political issue really miss the point. For an excellent synopsis of the gravity and ramifications of what can happen and why take a look at: http://www.2000wave.com/gateway.asp before you get out the high-fives

shark- still holding RIMM...this is not the time to be selling, my man...

Gold up $40.

Great piece by Maudlin, Joseph. Read it a few days ago and it is a great assessment.

My RIMMs are in the hole too... I'm averaged at $85 and hold puts on it... pretty awful on my part... Can't be bothered to cut it loose. Sold Mar09 $55 and $50 puts as well.

Technically RIMM's chart is strong at 60, so there's some support here.

I think the basic, fundamental cause is that we've spent the last 50 years offshoring our industry and borrowing from the rest of the world so we could have a big government that lives way beyond the people's willingness to pay taxes, and a population that saw that and figured debt was ok for them, too, and people in government and on TV telling them housing prices always go up, etc. You can't print money and borrow for 50 years and expect there to be no consequences.

Just my 2 cents worth

ChickenPookie,

Yes I agree. I feel that what caused this mess is Overleveraged Invest Banks + IB FrankenFinance Products + Comm.Bank Lax Lending + Gov't Overspending + Consumer Debt + Central Bank Easy$ + HedgeFund Leverage.

I feel that what is happening currently is that the products these banks and others held related to mortgages were SO levered to home prices that when prices declined they had to shore up their balance sheets and that created a spiral and the continuing need for recapitalization. The problem is not people not paying the mortgages - in fact the default rate is far lower than leading up to the great depression. There are many issues here and many to come but I feel the above are the real problem.

On a political note, I have no axe to grind against democrats nor republicans other than all around ignorance, but I do find it very interesting that so many democrats instinctively blame republicans when the repeal of Glass-Steagal was done under Clinton and was pivotal.

yv, joseph, Mauldin lost all credibility IMO. He may be just trying to save his business.

sizeable chunk of DDM @ 50.21... this should be an interesting overnight market.

Pookie - Don't leave out CRA "Community Reinvestment Act".

Time of vote out the congress members who voted for the bailout, here's the list
http://tinyurl.com/45k822

Usually try to stay away from politics but..almost all dems and rep. that voted no hopefully did it based on the merits. I agree with them. If reps changed there votes based on pelosi's speech they should be voted out for not doing what they thought was right for political reasons on something of this magnitude, although I personally couldn't support the bill. For Pelosi and Frank to give incendiary speeches on a close vote was inept and foolish and frankly not needed as the political winds are blowing toward the dems. They should be voted out and be relaced by serious leaders
Jim

HehHeh...On politicians putting aside politics...Has anybody heard the story about the frog and the scorpion?

Anyway...at least we know the next time the bill does come up, it will pass, so position accordingly.

SteveC, can you post the list? The link is unavailable.

SteveC - Thank you, I was looking for that list.

CBOE VIX is over 47!

And now Bush is getting ready to speak.

Maybe he can get the market to run up for a change?

100% Cash, Don't sell a thing if you own anything at this level.

I also have RIMM at 74.00.

To make matter worse, I bought more DELL this morning at 16.50 (it is 15.75)

I thought i had made good long choices.

Do I sell everything and start over in a few days??

All Cara 100 stocks

SiO2 - how did Mauldin lose credibility? He has been warning of this very event for years. Do you have anything I could read that backs up your opinion?

"I have been enjoying lovely steaks for years, for which you have paid. Due to the rough patch I now find myself in, you will now need to consume the waste from that meal, and pay massively for the privilege of that consumption. Or else...the end is here! Lookout! Were doomed! No, really. Doomed I tell you.

I will, of course, continue to enjoy the lovely steaks, albeit with a few fewer friends.

Now when can I expect that cash we were discussing?"

Most people are pretty stupid, in my opinion. But even the truly idiotic have a vague understanding of what has happened / is happening and are at the point that burning down the house to kill the termites is looking like an attractive option.

I am not surprised to find myself in that frame of mind.

This bill, and the attendant disgusting political games, are nauseating to the point that I might spark the torch myself, given the opportunity.

vinod- the market is doing what's it's always done-> maximum frustration...it's going to take out a truckload of long-time investors at the low, keep them out until we're back to all-time highs, then pull them back in at the high...has it not worked like this for centuries?

took a bite of freddie. hey i made $!

Mauldin hasn't predicted anything for years aside from "muddling through". He is essentially a tout for Gave-Kal and his own hedge fund promotional business. Just another newsletter charlatan.

Nice run up in CNR & PCA in the last few mins.

On an 800 pt tsx day it is not the time to sell as I found out last August.

On a completely different note...

ECU had interesting news release today about their selling some concentrates.

http://tinyurl.com/4oceyz

This shipment gives them $1.2M and they're still holding silver/gold concentrates valued at around $5M. Nice to see they may not need to rely on financing too much in the future... Also updated N.I. 43-101 should be coming soon.

Stock holding up well today.

MikeNYC - I'm in a NY frame of mind.

I really appreciate the successful traders here sharing what they are doing. Buying, or at least holding. It puts a little steel in my spine. I do think we have more down before we turn up.

President Bush to address the nation and gold must cool off, down to $907 as we speak. how tidy of them.

vanillabean- since you have a LT horizon, why not congratulate yourself for having bought on Buy Alerts and allow the positions to work their way to Sell Alerts?

gold pulling back... see a retest of 900??

Mike,
I am in total agreement with that summation
Jim

STOP! THINK! Melt down? So far, the Dow is only down about 50% of its latest bubble. A bubble in real estate that never should have occurred in the first place. If that whole bubble is retraced, then all that is lost is what should not have been there to begin with (with the exception of any inflationary impact.)

Wall Street can cry and moan, but it's only about the size of their bonus this year.

ST07

The default rate might be lower but the amount of leverage in the default rate may be more significant

The VIX went to almost 175 in 1987. 47 might be scrary, but imagine what 175 can be like. All cash and gold here...

Stick Bush, Paulson and Bernanke with a fork. They're done.

ST07,

You say expunging the risky assets is the thing to do — agreed. I cannot believe this is all or even most of the loans out there. Even if they have a mortgage which valued a property too high they should be abel to reset the value (let the market do it) and work out a new payment plan with the purchaser.

In my neighborhood I pass a number of houses (9 today) for sale. Three are vacant. One has been on the market for about three years — the seller lost his job herein Illinois and moved to Florida where he bought at the peak of the mkt. Those which have been sold are the last to go on the market, so I assume the seller is buying another which is correspondingly down in price.

There is one additional house from which the buyer has fled. It has been under rehab for about the last four months. It is most likely that the mortgage holders do not want to foreclose and be faced with this kind of time and money consuming situation.

A case by case resolution may sound daunting, but most big jobs only proceed one step at a time. It seems preferable to me than this rush to "fix" things by doing more of the same — creating fewer, larger financial companies, making too much credit available to people who can't handle it, and worst of all paying large sums to a few people who, at best, have mismanaged their business responsibilities.

John Thaine, the guy who just got $20 million as a three week CEO at Wamu, and Henry Paulson, whose former job at Goldman Sachs should have exempted him from assuming the lead role due to conflict of interests. When Henry claimed surprise at the extent of the problem and lack of regulation I about choked.

People need to learn from this and hard lessons are best in the long run.

Bought some USD now at $28. I am heavy in the margin right now, which is probably not the right thing to do from the capital preservation point of view. I am betting on the Fed coming up with some response to this crisis today/tomorrow. Things cannot just go VERY bad two days in a row without people in power taking some actions to prop up the system.

Grym,
Thain was w/MER bought by BAC. Former NYSE and Goldman dude.

David - I beg to differ.

David- the one thing I can't agree with is "heavy on margin." I would immediately sell the USD you just picked up. Kill the margin.

FranSix,

re: the panic on bubblevison

They were looking totally lost at noon with body language signaling total disbelief when Steve Liesman announced there would be no second vote today.

They should look for honest employment somewhere.

Putin Promises $50Bln For Banks

http://tinyurl.com/4fjy2w

Now is the time to write/call the Reps who voted for the Bailout and tell them what you think about it. This isn't over yet. Also, be sure to tell the Reps that voted against the bailout that you will remember them favorably at election time.

Remember - your calls brought this about AND can keep it going.

Thanks.

Vanillabean,

I've bought around 30 stocks over the past 3 weeks. Mostly Cara 100. No financials in my portfolio. Mostly miners, tech and oil and 1 utility. I've averaged down in the process, but now I'm ready to wait it out. I'll hopefully collect a few dividend checks while waiting. Who knows how long it will take. I'm sure Bill is not just sitting on the beach. You can bet he's buying right now.

Anyone notice the funky activity on Nasdaq before the close?

It was -160 on my screen but closed at -199 right at 4PM!!!

DELL fell hard and fast to 15.44, MSFT straight to $25, and QLD crashed $2.50 at the close!!! Is my IB just screwy??

Nas -199 here on my Questrade too.

That is one serious dump at the last minute. More to come tomorrow?

Maybe Obama CAN win !

Republicans complain that Pelosi hurt their feelings in her pre-vote speech, and caused them to vote no.

Barney Frank asks how personal sensitivity justifies voting against the country's national interest.

Pelosi talks of phoning Paulson, saying the democrats "delivered" on the republicans' proposal. She suggests democrats are putting "country first" -

Maybe Obama CAN win, by painting republican ideology has having both created the crisis, and blocked its solution ....

Margin is a bad idea in this gambling casino.

But I agree that letting the market slide without a rate cut or some other emergency measure would not be likely.

Why wait until October for a rate cut?

http://tinyurl.com/5y57k3

CP,

But... Bush said this AM that this bill went to the root cause of the problem. That this was good for the American people. That the congress worked long and hard to fix the problem in a short time. (He left out the part about having looked into Henry Paulson's eyes and seeing his soul ;0)

I think these guys are beyond offending them.

My apologies to Bill for doubting when he said the American people would not stand for this — looks like he was right. Not to steal Michelle's line (just borrowing it) I am proud for the first time in a long while.

LOL! Glad to see 2nd is BOS once again!
Welcome back BOS.

Boy look at the demolition AH.....I'm looking for some XOM and maybe some GE if it comes to me.

Can there be more panic?

"Things cannot just go VERY bad two days in a row without people in power taking some actions to prop up the system."

Expect the unexpected.

Well..... we took out at least 2.5 Trillion $ in the world markets today.

At what price will confidence be restored?

We need a bailout. I jumped both feet into the market the last half hour. No more of this we don't need a bailout talk.

you just got in and you already want a bailout?

Grym,

Good points. I agree that people need to learn. The problem currently that I see is that no one feels any pain except investors and bankers. Companies are starting to and the average citizen will be next. But it may be too late to avert a deflationary collapse then. That is the crux.

You mentioned that you find it hard to believe that so many of the loans are bad. I find it hard to believe that just $700 billion will fix the problem. Rather I think that a lot more than 1% of the real value of these derivatives products, arguably real risk $70 trillion or notional value 1.16 quadrillion are bad and that this $700 billion is only a fraction of what will ultimately be required.

Paulson and Bernanke have failed in making clear the risks to the public and to politicians... failed miserably in communicating.

Massive layoffs, 401ks being destroyed, pension plan implosions, individual and small business bankruptcies will come too slowly to communicate the news.

The US House network/servers must be overwhelmed. I can't get connected.

Grym:

Either way on this bill was lose - lose, since what was happening in congress is pure show at the moment.

True change will require fundamental change, and fundamental change is not possible as along as the current system is in place.

Bills position to buy into strong companies at lows is a good one since these companies will improve in the longer term no matter how the show plays out.

I don't think what we saw today was a reflection of the people's will, it was all about show and how to work those perceptions best towards the elections.

One reason I haven't been here much of late is just for that reason, since I feel its a time to focus locally and best position oneself in terms of local situations and only to peek in once in a while to spot the better buys and stay aware of longer term trends.

:) to all!

I'd prefer to see a selling crescendo in the AM but with Jewish holidays, I'm less certain what will transpire.

"David- the one thing I can't agree with is "heavy on margin." I would immediately sell the USD you just picked up. Kill the margin."

I am still at the capital accumulation phase, and you said that you did use margin when you were in that phase. :) It wasn't just the USD I bought on margin -- ALL my purchases today were on margin (yesterday I was fully invested).

As for the market being up tomorrow -- it is just my gamble, which is as good as any other. I think tomorrow we either have another 10% down day or a strong up day. I think the first one is unlikely since PPT is now more adept than before. I think the PPT was told to sit out today so as to pressure the Congress to revote or pass a slightly modified bill SOON.

"Putin Promises $50Bln For Banks" - 50b less for US treasuries...

"you just got in and you already want a bailout?"

WaveMash,
It was a tough half hour.
Bob

Emergency cut perhaps bsi? Or is that like peeing on a forest fire?

In Asia tonight it'll be SEPEKU!

I don't think they will do a rate cut as the effectiveness will be very short and thus wasted. Nor do I think the PPT can keep this market up. They have been trying but they can't buy every stock from every seller. What they can do is try to make the decline orderly, which they have done until today.

Seppuku is the spelling. (Japanese ritualistic suicide).

ESLR - sank like a stone just like everything else today until bucking the final downdraft into the close and actually spiking up to close +3%.

That's gotta make you scratch your head.

Yeah, ESLR was up 10% in the last hour. Incredible.

David- Keep in mind (a) I was using margin during a bull market, and (b) I wasn't playing the (highly volatile/possibly manipulated) mining sector...

When do today's prices show up on the Cara RSI tool?

Looking for a shopping list for tomorrow.

I feel pretty good about my buys today, I only wish I had an ultrashort or two in place.

I had the thought around 10:00 am that things looked ugly but what would happen if the bill doesn't actually pass.....I should have acted on that thought and hedged a little bit. I was expecting the unexpected but didn't act on it.

Lesson learned for next time.

Telestar3d:

Re: Shipping Stocks

The publicly traded containership owners have been getting a haircut, too.
SSW SeaSpan
DAC Danaos
GSL Global Ship Lease

Dividends are attractive, but there are rate swap options, heavy debt and counterparty risk involved.
Yet, these three are not tied to the BDI.
Their fixed rate long term leases help smooth the risk.
20+% of GSL common belongs to G Soros. It was in the green today.

Disclosure: long on GSL.
Trying to protect my modest 2% gain ytd while holding 60% cash in retirement portfolio.
Started a position in PBR today at 38.
Underwater on QLD and holding.
Long PMs.

OFF TOPIC:

About that bodysurfing... I enjoyed many afternoons in the shorebreak on Kailua Beach and the occasional trip to Makapu'u. That was in the late 70's.
Thanks for sparking the memories.

ALOHA !!

I was happy to see the $700b bailout fail, but other bailouts continue no matter if the $700b failed. The $630b and the spending bill that benefits GM. There is more than one way to skin a US TAXPAYER! BAILOUTS ... WE DON'T NEED NO STINKIN' BAILOUTS! Your elected officials spend 25/8 coming up with new ways to cut you out of the "gravy train with biscuit wheels" loop! Didn't I hear there was another "stimulus package"(free money)in one of the bailouts? FREE MONEY ... Hummmm???

Why aren't all these banks buying their shares back now? They had no problems last year buying shares back at the top, some over $100 per share, but now when their shares are under $30 or under $10 (cricket noise) its like the plague. That speaks volumes to true fundamentals and the con game that is Wall Street!

The short term POG as a barometer is broken by the global central bank interventionists as well as silver. OPRAH could corner the silver market its so small! Gold is a tiny market compared to FX. Futures markets for paper gold and paper silver are designed for price fixing not price discovery! For who's benefit though? So many markets are corrupt that a complete collapse is needed to get a complete cleansing, otherwise its the the status quo again with the usual suspects! If my family and I are going to suffer I prefer the suffering not drag out another 20 years. Lets suffer one BIG PAIN and then move on to a more honest monetary system where GOLDMAN SACHS and JP MORGAN are excluded.

Someone above posted a quote by RON PAUL. Without addressing the basis of all our problem ... the US fiat monetary system ... there can never be a "real" solution ... only band aids! One politicians in DC that gets it ... ITS THE MONEY STUPID!

My junior explorer portfolio is not down as much as the BKX today, a number are up and my PM holdings still retain a 300%+ return even at these "corrected commodity" prices. Its Wall Street's turn to cringe and fret for a change! But wait ... whats that I see? A ten year DOW chart denominated in gold and Euros! WOW ... I take that back Wall Street HAS been suffering for years now!

So what has no long term or short term liabilities? If you read the Earnest Hemingway essay that Bill posted you would see that nothing has changed. You will notice that the "barker" was not selling gold and silver. What was he selling? PAPER! Instead of Russian Rubles from the 1920s and German Marks from the 1920's instead substitute the paper of today like BSC, MER, LEH and then contemplate GLD and SLV paper. When has a bank NOT abused a "warehouse receipt"?

Today the German Bundesbank announced that it was done selling gold reserves and I expect a number of other central banks, especially in Europe are done! Asia never was selling ... instead they were buying the UKs gold for $300USD per ounce and they should award Gordon Brown a medal of valor for his heroic lunacy! Can you get a medal for that? HA!! HEROIC LUNACY?

Interesting to see what Goldman Sachs did on the TOCOM today(look tomorrow)! Their GOLD net short is very low and may even go net long soon! This is not the environment for Goldman Sachs to be playing games on the TOCOM since they cannot afford losses, especially trading losses!!Which bullion bank will be the first to break ranks and take delivery? If the COMEX runs short then JP MORGAN always has GLD and SLV to draw from! Its just a "swap" you'll get it back later! HA!! Oh, and just to make it official here's our IOU!

DUDES ... PARTY ON BEN! PARTY ON HANK! BEN AND HANKS EXCELLENT ADVENTURE ...

So far only Newt Gingrich(Reagan right)has called for Hanks resignation! The oversight and fiduciary savvy is deafening ...

IT ALL WORKS UNTIL IT DOESN'T !!

Hey Sharkster!

But who's gonna' play 2nd with the sword?

Posted by 2nd_ave: "David- Keep in mind (a) I was using margin during a bull market, and (b) I wasn't playing the (highly volatile/possibly manipulated) mining sector..."

2nd, despite all the market horror, my account was down only 6% today, since PMs held up pretty well. At this rate, I can tolerate 3 or 4 days like today before I would have to close my positions to meet the margin requirement. I think the chance of several more days like today in a row is pretty low. You wrote yourself a few days ago that not buying on a day like today is a major policy mistake for a trader. I wish I weren't fully invested as of yesterday and had some spare cash left. But since I didn't, I had to use margin to buy on a day like today. Almost all my purchases were made near today's lows, so I think I got a good deal.

If the same situation repeats 10 times, then in 1 out of 5 times buying on margin would cause a lot of losses in the next few days (if the market keeps crashing). However, such days occur once in many years, and hopefully this time I'll be spared of the great losses and will even make some money tomorrow. :)

Oil price is a key metric when dealing with pricing scenarios of risk. Oil dropped 10.58% today. Does lower oil means less downside risk for stocks, less chance of a recession, and lower equity prices for oil-driven stocks?

If there are any algo traders left, I'm sure they would be adjusting their models to pick up some of the spread differences. Today would be a good day to see what the limits were for these models as they were probably hit and then some.

Apparently 70% of all oil futures trading on NYMEX is speculative. Would that leave us at $42/barrel if all the speculative $$$ disappeared from the high of oil price $140?

Chances of all speculation leaving the market are nil, so how about a 40% retrace from the high? $84/oil? We're at $92 for Nov Brent Crude. 9% drop from here?

OIL ETF has about 10% to go to hit it's Feb bottom of $51.05. It didn't hit last week's bottom from what I can see.

I hope we do not correct again for another couple weeks until Fed decision. Where's that bull market rally please?

Tomorrow is consumer confidence release...

Odd that VLO settled around $30 today & XOM @ $74. Even number prices. Psychological support or program-trade driven?

GM is up 4% after hours.

BA settled around $55.50

Some of my math could be wrong here... just wanted to throw out the fact that we may have another 9-10% to go, but could see some decent support above these levels for a bit. Who knows with these markets...

Does anyone have any spreadsheets or web sites that have pricing models based on oil or gold spot prices?

Bill

Does the defeat of this legislation change your outlook about a bottom being near.

My earlier post go tme starting thinking and blogging an entry.

Crisis means: being forced into a situation where the rules are being broken to force change

I have no doubts this current "crisis" is being used to further the larger players. Which means don't panic to give away your wealth to those players

Panic means: giving away your power to another at a fraction of the cost... leaving you little personal resources to move ahead upon.

I saw some earlier comments about some people here buying at a higher value at Dell for instance and now its lower. Bill mentioned those buys for longer term, dont let this current crisis flush you out in panic to lose your own position.

Do you own due diligence play by your own rules and don't think any of us here can beat the larger system which is highly refined to beating us.

I hope everyone the best of luck in staying true to their own path in this and not to lose touch of themselves / their own power while these absurdly large games are being played against us.

hope this post stays in tune to Bill's new "rules"

The harder it falls the nearer is the bottom. S&P is now monthly oversold. Who knows when it ends but the bottom is 9% closer. As Bill said, 1987's bear market lasted only a few weeks.

This plunge seems to be cleaning out the speculators, not just in equities, but in commodities too.

Message by calls and fax to all Reps in Congress tonight thru Thursday.

Bailout - NO!
Paulson Out - YES!

Do it now, please. Now's the time. Thanks.

Mail that I sent to my US Representative today:

Thanks for your 'no' vote on today's bank bailout package. This industry requires structural reformation and the packages proposed by Treasury Secretary Paulson to this point are counterproductive.

I encourage you and your colleagues to investigate the option of allowing the Treasury to take an equity stake in troubled institutions at aggressively negotiated low prices combined with strict management oversight in order to both provide capital as required to those institutions and to allow the tax payers to have a chance to participate in any equity gains that occur as the troubled institutions recover.

The proposed bailout package is simply socialization of losses from a private sector that eschews appropriate regulation. Further discouragement of moral hazard should be a primary goal of any rescue plan.

Thanks again for your vote on this issue.

I hope this works! For the last 2 weeks I have been accumulating my "dream list" of stocks using overnight buy limit orders(too busy at work to day-trade). I've been setting some unbelievably low bids (retracement strategy) but, of course, the prices have been coming to me. Today bagged CALM and ARD (Arena Resources) at prices I wouldn't have imagined possible.

Is anyone else, here, loading up for the next Bull in this way? I'd be interested in hearing Vadym's opinion on the relative merits of playing "retracement" vs "breakout" strategies in a market enviroment such as this.

I'm also finding that the ones I have already bagged are holding-up pretty well, I guess because they have already retraced pretty hard down to my buy levels.

A little bit of levity:

To the citizens of the United States of America from Her Sovereign Majesty Queen Elizabeth II.

In light of your failure in recent years to nominate competent candidates for President of the USA and thus to govern yourselves, we hereby give notice of the revocation of your independence, effective immediately. (You should look up 'revocation' in the Oxford English Dictionary.)

Her Sovereign Majesty Queen Elizabeth II will resume monarchical duties over all states, commonwealths, and territories (except Kansas, which she does not fancy).

Your new Prime Minister, Gordon Brown, will appoint a Governor for America without the need for further elections. Congress and the Senate will be disbanded. A questionnaire may be circulated next year to determine whether any of you noticed. To aid in the transition to a British Crown dependency, the following rules are introduced with immediate effect:

1. The letter 'U' will be reinstated in words such as 'colour,'favour,' 'labour' and 'neighbour.' Likewise, you will learn to spell 'doughnut' without skipping half the letters, and the suffix '-ize' will be replaced by the suffix '-'ise.'Generally, you will be expected to raise your vocabulary to acceptable levels. (look up 'vocabulary').

2. Using the same twenty-seven words interspersed with filler noises such as ''like' and 'you know' is an unacceptable and inefficient form of communication. There is no such thing as U.S .English. We will let Microsoft know on your behalf. The Microsoft spell-checker will be adjusted to take into account the reinstated letter 'u'' and the elimination of '-ize.'

3. July 4th will no longer be celebrated as a holiday.

4.You will learn to resolve personal issues without using guns, lawyers, or therapists. The fact that you need so many lawyers and therapists shows that you're not quite ready to be independent. Guns should only be used for shooting grouse. If you can't sort things out without suing someone or speaking to a therapist, then you're not ready to shoot grouse.

5. Therefore, you will no longer be allowed to own or carry anything more dangerous than a vegetable peeler. Although a permit will be required if you wish to carry a vegetable peeler in public.

6. All intersections will be replaced with roundabouts, and you will start driving on the left side with immediate effect. At the same time, you will go metric with immediate effect and without the benefit of conversion tables. Both roundabouts and metrication will help you understand the British sense of humour.

7. The former USA will adopt UK prices on petrol (which you have been calling gasoline) of roughly $10/US gallon. Get used to it.

8. You will learn to make real chips. Those things you call French fries are not real chips, and those things you insist on calling potato chips are properly called crisps. Real chips are thick cut, fried in animal fat, and dressed not with catsup but with vinegar.

9. The cold, tasteless stuff you insist on calling beer is not actually beer at all. Henceforth, only proper British Bitter will be referred to as beer, and European brews of known and accepted provenance will be referred to as Lager. South African beer is also acceptable, as they are pound for pound the greatest sporting nation on earth and it can only be due to the beer. They are also part of the British Commonwealth - see what it did for them. American brands will be referred to as Near-Frozen Gnat's Urine, so that all can be sold without risk of further confusion.

10. Hollywood will be required occasionally to cast English actors as good guys. Hollywood will also be required to cast English actors to play English characters. Watching Andie Macdowell attempt English dialogue in Four Weddings and a Funeral was an experience akin to having one's ears removed with a cheese grater.

11. You will cease playing American football. There is only one kind of proper football; you call it soccer. Those of you brave enough will, in time, be allowed to play rugby (which has some similarities to American football, but does not involve stopping for a rest every twenty seconds or wearing full kevlar body armour like a bunch of nancies).

12. Further, you will stop playing baseball. It is not reasonable to host an event called the World Series for a game which is not played outside of America. Since only 2.1% of you are aware there is a world beyond your borders, your error is understandable. You will learn cricket, and we will let you face the South Africans first to take the sting out of their deliveries.

13. You must tell us who killed JFK. It's been driving us mad.

14. An internal revenue agent (i.e. tax collector) from Her Majesty's Government will be with you shortly to ensure the acquisition of all monies due (backdated to 1776).

15. Daily Tea Time begins promptly at 4 p.m. with proper cups, with saucers, and never mugs, with high quality biscuits (cookies) and cakes; plus strawberries (with cream) when in season.

God Save the Queen!

Yeah, gotta' love politics. Listened to Pelosi's speech. It's all the republican's fault. Mmmmmhhhh, no mention of the 2003 CRA, wonder why?

Fun day!
I was hoping for some advice: I have a good deal of my savings in a US Treasury Money Market. I don't "understand" gold, and I have felt that this would be the safest place for it. My reasoning was: the dollar has been tanking for the past 5 years and so it's further depreciation was not going to be a problem plus the good faith of the US Treasury vs non-govt debt.
So my question: would I be better off diverifying into a foreign money market (perhaps Canada) and is there a way to make such an investment without having to travel to that country.
Thanks in advance for any guidance.

HB&B threw an immediate temper tantrum at the news of being voted off the island. I could've bought into the close I suppose, but I'm confident in retaining what I've accumulated and obviously have no desire to sell at these levels. I should say that I'm extremely glad to have donned a stout bullet proof vest prior to sitting at the table, you never know who might have a derringer pointed in your direction these days... Considering Mom&pop got fleeced earlier this year and they're pissed their life savings were evaporated by HB&B, wouldn't expect them to give the rescue package an affirmative nod, rather, a big single finger salute would be more fitting. Perhaps now the equities trade horizon will extend and the PM trade will be pulled in.

shark,

The big boys did it to themselves. If they hadn't instituted that silly no shorting rule, there would be someone there to cover. Kinda like unhooking the emergency brake, nothing there to slow or stop u.

that said, $NAA50R is below 20 which is generally a buying area. $indu:$vix rsi is 23. $cdnx:$vxn is showing 13. Guess it'll drop a bit more at the open.

I'll be watching the open. A selling crescendo would be the best, otherwise slow bleeding.

10 day ATR for DJIA is now 366 pts. wow.

GL

Brown cal, when the US sneezes, Canada gets pneumonia.

Looking at the carnage tonight, I like my gold, at least to be able to salvage part of my wealth because no stroke of a pen or flash of a computer screen can create more gold to debase it.

This just arrived via e-mail...from my congresswoman. She is a sharp one. And they only one who responded to my multitude of e-mails this week.

September 29, 2008

Dear XX,

Our country is facing some very difficult decisions. We are certainly in challenging economic times, and we must be extremely careful with our resources. There are no clear paths forward, each has significant risks.

I voted against the bailout. The vote failed 228 no to 205 yes. I know we face turmoil in the markets, and we need to do something to stabilize them. I spoke to many economists this past week. And every time I asked the question, "Do you think this will work?" they look away. They actually break eye contact with me and come back and say they're not sure. I'm not asking for a guarantee, only "Do you think it will work?" And not one would say they think that this will work. What every economist agrees on is there are several other options that have a higher probability of success at less risk to the taxpayer.

This bill tried to solve our economic problems from the top down, instead of the middle up. Four hundred economists, including three Nobel laureates suggested we slow down and get this right. It was widely agreed there are other and better alternatives for dealing with this situation.

The problem is that if we spend $700 billion on this option and it doesn't work, then we don't have that money to spend on doing what really needs to be done to strengthen our economy for the short term and the long term.

As for executive compensation, quite honestly all we got was window dressing. There was no real reform to curb the excesses of Wall Street that got us to this point.

Ultimately, I decided to vote against the bill when it became clear that this bailout plan will make it much more difficult to do the necessary work of stimulating our economy in the short, medium, and long term.

This bill will not help the underlying economy. It does little for distressed homeowners. It is directed mainly at bailing out the speculators and hedge fund managers that got us into this mess.

In addition to this crisis in the financial markets, our economy definitely needs additional stimulus. No economist felt this would stimulate the underlying economy and would have made it much more difficult to do later. I was not willing to take that risk. President Reagan's appointee to the FDIC said, "it's delusional to think we'll make money on this package; it gives too much discretion to the Treasury."

We are in challenging times and there are no easy answers. We need to continue to work together to address these important issues.

Sincerely,

Nancy Boyda
Member of Congress

I'm pouring a nice drink and turning on Krudlow to watch him squirm for this soft landing.

Goldilocks anyone?

Larry Kudlow, would the REAL president please stand up!!!

I gentlely disagreed with a few posts here today as if the American has won a war.

This is a very sad day for America for how we got here and for being stuck with a congress mindful of politics, a "future" election and shamelessly using "future generation" as an execuse. My confidence in our political system has completely shaken.

It is not about who bails who out. I wonder if I get the big picture wrong. I thought we have a problem which affects the main street - a 'frozen credit system'. We are all connected by "credit line", perhaps your domino is much further behind mine. But in time, we all 'FALL DOWN' if this problem isn't contained in a "timely" manner. There are many people who do not have your skill or savviness in finance and can protect yourself against a financial tsunami. But many of the livelihood depends on a fluid credit system. I welcome any comments in a constructive manner. So next time when you cheer, please be mindful that there are innocent people being negatively affected by our inaction.

Good lord, enough with the short restriction whining already. Yeah, it was/is a bad idea, but...It has only been in place for what, a week? And basically only on financials. To assert that if it wasn't in place we'd have some sort of giant snapback today is frankly naive. YMMV.

David

Are you referring to the stock USD...or are you buying the US Dollar because you hope the fed passes a bill...

I ask for this reason...I have the exact opposite thoughts on the US Dollar...if they pass this I think the dollar will go lower...I am not sure I agree with a strategy of going long the dollar if they pass the bill....

I was actually short the dollar and long DIA/MSFT/GE/DELL going into the decision...with about 50-60 votes left and lots of Republicans I did the math and quickly dumped at market all my longs and covered my short dollar position taking a loss from Friday...then I went long the QID and short the DIA (which I had just been long)....I planned on covering at the bell but the market sell on close was very high so I am now holding till open tommorrow...

Anyway...as far as the US dollar I think the plan is a net negative for it...curious what the group thinks.

Brunswick Corp (BC)
Credit Suisse analyst projects BC may have to contibute 16 cents/share or 24% of concensus earnings to cover off pension liabilities for 2008/09.

What America needs is superman, but instead you got stuck with Lex Luthor. He would swoop in, brab bernanke and paulson by the scruff of the neck, smack their heads together and call the U.S. treasury and the Fed merged into the Central Bank Of The United States under the control of the taxpayer, not a decreasing pool of megabanks.

While everyone is sitting around licking their wounds, I think I'll go and kick some booty now. I happen to dabble with a product in one of the Cara 100 companies. ERTS (Electronic Arts) has a product called Battlefield 2142. I never was into gaming until I came across this jewel. We never had stuff like this when I was a kid. It just keeps getting better.

Quick note:

short term bond yields were not available throughout the day:

http://finance.yahoo.com/bonds

Roseville,

I think I need to play some MGS4 on PS3 tonight to get the aggression out of me! Although I'm sitting about 65% cash, I've taken a hard hit with entries that were made just last week. RIMM, GOOG, DELL, INTC, and AMD are down big. I thought Congress would panic and pass a half-ass bill that would create somewhat of a pop and net me some cash. Boy was I wrong! Still, holding here on in... will watch tomorrow to see if I want to pour some more cash into the markets.

Dear Bill,

With great respect for all the great work you have been doing can I say, at the risk of incurring your and other community members' wrath, that this is not a good day for a professional like you to take a mental health day.

A General should be on the battle field not in bed or on the beach.

Cheers,
Ben

Battlefield 2142 is great
C3,
I understand your heartfelt concern and I probably share many of them. Please don't confuse my distaste for the bill as written (and thus satisfaction with its failure) with being comfortable with the mess finacial markets are in. I do favor congressional action to help allieviate the current credit crunch just not this bill. I could go on and on but suufice to say I share your concerns
Jim

Ben,

Bill is trying to teach us about capital markets and how they work, not hold our hands. It is up to ourselves to make our own decisions. We have the community members as resources as well, not just Bill. Give the guy a break. He's retired for cripes sakes.

Best Regards

Poking around in the carnage today I was interested in what worked and why. Here is the screen used:

1) non-negative price change today.
2) volume over 500,000 shares
3) positive and above average book-value per share
4) price over $10

Only 10 stocks made the cut:

BABY Natus Medical, Inc. (Infant healthcare)
AMSC American Superconductor Corporation (Wind Power)
CLWR Clearwire Corporation (Broadband)
TRMA Trico Marine Services Inc (Offshore services)
EZPW EZCORP, Inc. (pawn shops, easy credit)
PRGO Perrigo Company (Pharma)
MDCO The Medicines Company (Pharma)
WCRX Warner Chilcott Ltd. (Pharma)
HMSY HMS Holdings Corp. (IT - healthcare)
UNFI United Natural Foods, Inc. (Food)

Nice to see that at least BABY wasn't thrown out with the bathwater! :)

Speaking of what worked today, holding IWM OTM straddles paid off ~ 40% profit (Oct. 77 and 66). The puts went up significantly, but curiously, even the IWM calls did not move much, likely due to increased volatility.

Nouriel Roubini is not very optimistic:

http://tinyurl.com/4t8ru7

I would like to thank Bill for being away on a day like today......it made me act,think and trade on my own.

Like it has been said before, regardless of what happens the sun will rise, and life goes on.

The week AIG went down I was talking to my mom on the phone and told her the market had been pretty bad because of AIG.......she said "Who's AIG?" Ha Ha!

Makes me realize most Americans don't have the faintest idea what's going on. While we live it day in and day out. It's good to take a step back once in a while.

There'll be a bit of panic in the retail sector. Time to load up on them hot pair of shoes.

:0

bigboyz, I was buying the ETF USD. When I talk about the US dollar, I try to use the $ sign. I was also confused initially when I saw the USD ticker...

As I said, everybody covers their constituents derriere:

http://uk.youtube.com/watch?v=_MGT_cSi7Rs

David- i have no doubt you will make money on almost anything you bought today...(it's not a question of if, it's when and how much)..i just don't want to see you get taken out at the lows due to margin calls..

FranSix,

I've been trying to find a retailer to acquire for the last week. I'm thinking with all the Wall-Streeters (and a few others) out of work now, and probably facing a few job interviews in their future, it might be time for some of them to buy their first new suit (and shoes) in quite awhile. Been eyeballing JSOB or TJX but haven't pulled the trigger yet. Along the same lines, I remember back in the 2001-2003 recession, reading an article on how cosmetics companies fared pretty well; perhaps on the thesis that during hard times, a little expenditure on personal appearance had the effect of improving one's esteem(?), employment(?), mate-attraction(?) opportunities. Hence I have been eyeballing ULTA, EL, and a few others. No bite yet there, either. Perhaps others have some ideas.

They're all the same:

http://www.youtube.com/watch?v=AiEWCnpNnBQ&NR=1

yvrapx,
I was listing three individuals and couldn't remember the name of the guy who took over at Wamu, not assignng Thain to Wamu. Unclear writing, sorry.
Could you make that First Dude and send Sarah over?:-)

John Thaine, the guy who just got $20 million as a three week CEO at Wamu, and Henry Paulson, whose former job at Goldman Sachs should have exempted him from assuming the lead role due to conflict of interests.

i'm also happy to see there was no panic in the cara discourse...you don't have to listen to trading gurus to know panic never pays off; there are enough poets/philosophers/grandfathers who have spoken on the subject to have driven that home-> what may be different is how you responded today...given what i know now about the markets, i would have bought in '79, in '87, and in '98...i did buy on 9/11, on SARS, last august 16th, and today...i have yet to run across a single person with buyer's remorse...

It was test day Ben!

A substitute can give the test and you'll do fine. The teacher left a study plan for you to follow.

Ben -

Do you think we're entitled to Bill's advice whenever we need it? No.

If we'd been born in rural India or Brazil, we'd be entitled to struggle for food.

That's it.

...(plenty of investors with seller's remorse)...

ST07,

Paulson and Bernanke have failed in making clear the risks to the public and to politicians... failed miserably in communicating.

I guess it's difficult to cry "fire" and avoid creating a panic at the same time.

A lot of businesses have already gone when it was contrary to free market ideals to protect our jobs and the whole country (except for a select group) are feeling it. Suddenly those ideals are out the window and we are all supposed to sacrifice to save the financial system.

Like the old Lone Ranger and Tonto joke when surrounded by an Indian war party—

"What do you mean 'we', white man?"

re Bill taking the day off-> he did you a favor, man...it's like the day Dad flipped you the car keys or the boss called in sick and asked you to take charge...;)

Nikkei down 573...what's new..

Grym - CEO of WaMu

I think it was not Thain. He was Merrill CEO. Portland Business Journal reports:

"Alan Fishman, the CEO of Washington Mutual Inc. for only a few weeks before the Seattle-based thrift failed, would be entitled to $19.1 million in severance and bonus pay."

Please research before you post. We need to keep the credibility of Bill's blog high, by getting our facts straight!

I have not seen any post in last two days calling
Market will to go down if bailout does not pass.
Lots of post for and against bailout.
Media/expert, all expecting that it is done deal.
And it was never mention that how much market may go down if it is not passed
Very interesting

2nd
Will go up to 90% in stock now.
Will keep 10% for OEX option. Did not buy any call yet

Not getting a single response to my posts re: stock ideas. Seems to me Bill posted a few days ago that we rev-up the posting of our ideas on specific stocks.

As some 2nd_Ave said a few posts back:

"...given what i know now about the markets, i would have bought in '79, in '87, and in '98..."

Come on people! This is it, handed to us on a silver platter. What are you looking at for buys?

Bill hope you are having a nice day off, you deserve it. thanks.

Certainly some strange closes today in the indexes and some stocks in particular. Maybe a little painting the tape at the close, mostly in the last seconds and large trades way off the current price at that time. For some stocks it may have been a short squeeze at the close for those that didn't want to hold overnight. ELSR +3%, BLDP +18%, QTWW +36% etc.

When things get volatile I always go back to my 87 chart, Oct 19th, now that was a volatile day. The following is an image of that time frame compared to today.

http://tinyurl.com/Imageshack-file-87-vs-today

Quasi

IT is amazing there is no panic on this blog. That is great.

I am in agreement with nemo... lets not get caught up with two sided politics and who could or gets an advantage.

We are all at an disadvantage here.. Today was an historic day in that for the first time in US history the people have gotten a victory. A grassroots campaign actually worked and the people have spoken.

We actually have representatives who are listening to those who elected them. That is a first.

The underlining problem isn't what bill was passed a decade or two ago, or who was elected then. Or who lobbied who to get what. ALL OF THOSE are problems.

THE PROBLEM IS THE FED and how the whole monetary system works. Money bubbles will always happen, in the current system. we are wreckless, ignorant and will get hurt. No one explains that to us... just borrower more! Tis not the american way, tis the world way. T
"Mr Anderson that is the sound of inevitability" - matrix movies.

Dont be fooled, this ISN'T an american problem. The whole world is hurting, hurting bad. Central banks from the BIS, to the Fed are not necessary......

There are other solutions that should be debated on capital hill or where-ever. From some reason they aren't,,,, why is that?????

Mackinaw- i see 13 Buy Alerts and 14 stocks in the AZ..that's 27% of the Cara 100...

http://tinyurl.com/48zyne

(and that's just yesterday...tomorrow's list will be at a high, IMO)...

Mackinaw,

Stock ideas??

FIND COMPANIES WITH CASH and aren't tied to to much credit...

Those companies who's cashflows have been increasing will be the winners. Do you remember the theme a few years ago, that more and more companies were increasing their cash base, instead of buying back shares, hiring more people, increasing their dividends. Those will be the better plays. IMO.

Diversify amongst those.

norm- what if we don't pass the paulson plan and things end up OK anyway? that would kick off a rally that teaches us all a lesson...

At least there's some consolation in these market drubbings for joe sixpack that execs with rich stock options are watching them dwindle? Sort of a free market adjustment of exec compensation?

Former MER CEO Stanley O'Neal saw his shares drop 67% if he didn't bail on them at the $66 mark. MER dropped 22% today (up 2% after hours)

Poor guy's stock and options would only be worth $43 million.

That's less than the $48 million he made heading MER in 2006.

Stan's on the board of AA (Alcoa).

Hope his golf game is doing well.

http://tinyurl.com/37ld7q

2nd - on Nikkei,

Somewhere I read today that Japan actually have a negative trade inbalance first time in history. With Dow puking 777, Nikkei sneezed no doubt.

Is Shanghai Stock Exchange closed? I can't get any ticker from the website. Last update was Friday 9/26. It indicated that this entire week is listed as National Day.

2nd,

I agree.

Wouldn't that be nice....

the paulson plan is garbage. i would rather see that money go to joe6pack for ATF - alcohol tobacco and firearms then do that plan.

c3- if shanghai is open for trading, you should know within 40 minutes:

http://tinyurl.com/3belnq

Stock picks... just look for cash/share metric.

http://tinyurl.com/4tv6bo

Good ol' Warren B. & co have cash/share of $28,642.97

And the thing's only $4458/share (class B for joe sixpack)

If you owned the class A share today you lost $1200/share!

Gotta love a company that doesn't split or pay out dividends.

http://www.focusinvestor.com/brkfaq.htm

I keep 1 share of class b to remind me of value investing principles, and to get me into shareholder meeting whenever I decide to go.

What's the #2 cash/share company?

Goldman Sachs @$337.41/share.

I was shocked too.

Apparently Warren's top sector pick in this market is "cash"

Norm: It may have been a grass root victory for the political process, but, and again not to disagree with Bill's expertise, I'm not sure it will lead us to a financial system victory. They may address the mortgage related issues, but I'm not sure there's enough ammo to do that. That still leaves the CDS issue which is some 600 times larger. I'm sure there are tradeable gains to be made, and perhaps I'm just climbing the wall of worry, but these are cancers that somehow have to be removed, unfortunately the cure is obscured because the mathematical wizardry that created them devised these incredibly arcane relationships that have no relation to reality. Unfortunately, just like the fantasy life lived under deficit spending, the fantasy life led under fantasy finance.

Japan, Korea, NZ, Aus, and India crapping out, big-time, on the open tonight (down ~4%).

Which brings up a thought I've been having over the last week or so:

As intense students of the market, do you ever find yourself WAY ahead of the action? Maybe we shouldn't forget that the last leg of a price-movement - either up or down - is driven by the most emotional and uninformed participants. Then we could avoid "out too early" and "in too early" foible.

The buy list for tomorrow? (exclude GS & MS & ADRs and anything with Bank or Banc or Financial in the name)

These companies are top in cash/share values.

Wesco is Warren B's sidekick Charlie Munger's company. Even though it says financial I would buy it, if it had more volume.

Alexander's, Inc. ALX
Berkshire Hathaway Inc. BRK.A
Enstar Group Ltd. ESGR
Fairfax Financial Holdings Limited (USA) FFH
First Citizens BancShares Inc. FCNCA
Goldman Sachs Group, Inc. GS
Interactive Brokers Group, Inc. IBKR
Mitsui & Co., Ltd. (ADR) MITSY
Morgan Stanley MS
NVR, Inc. NVR
Penson Worldwide, Inc. PNSN
Seaboard Corporation SEB
Wesco Financial Corporation WSC
Westpac Banking Corporation (ADR) WBK

didn't finish the sentence:

...often leads to extended hardship.

nemo,

agreed and can't disagree with you. either way things will get interesting... we can't let this drop in the bucket plan bailout the few of those who will benefit.
the problem requires a full bucket of water not just a drop of 700 billion...

700 billion will sure help out a select few and not fix the problem.

bsi87

You must of had a great day today. If I remember correctly last week you were loading on utra shorts including FXP which was up............

26.59 pts....

AMAZING!

Hope you sold at the top.

wavesmash,

cash will be important for companies however can we really trust those balance sheets?

that is the conundrum....

companies tied to credit have to be struggling as the markets are "frozen". those will cash can continue to operation.

i believe some smart companies foresaw this coming and built cash over the years. could be a bad assumption..

TOG ...

I sold a couple bond contracts today. I like the divergence between price and RSI on the weekly and monthly charts. Also, new lows in the Dow, S&P, and Nasdaq - but no new high in the bond ! Of course volatility should be respected. Did you see the VIX today ? I have been 100% cash in my 401k.. I put 10% to work on the close in the S&P index. Any more deterioration and I will continue to add.

Ben - with due respect ... don't be a jerk. Do you understand the gift that Bill is sharing with all of us. Do you understand the depth and knowledge he shares that we'll never come close to acquiring on our own personal basis. This discourse, WIR's, and commentary are teaching us to fish. Bill isn't here to toss us fish - he is teaching us to fish for ourselves, help our families, help society, and make this a better world. Bill, thank you for the gift. I believe you have much more of a positive impact than you know. I am sure there are thousands that read this site and never post or pass along their thanks.. on behalf of all those lurkers - thank you ! Hope you had a nice day off.

Anyone following the muni market ? Long dated muni bonds (state general obligations) are yielding 125% of long treasuries. In CA you can buy bonds yielding over 5% inside of 15yrs ! Hmmm 30yr Tsy @ 4.18% or 15yr Cal GO @ 5.00% ... something is out of whack (don't forget munis are tax exempt to boot !)

Anyone have further info on IR (Ingersoll Rand?)

Worth a closer look?

Here's another screen.

http://tinyurl.com/4sfl23

Fairly low debt as a percentage of equity, and weakness.

Hecla HL shows up.

Wavesmash - I own a few Mitsy shares...and why would you buy more of them now?

And then there’s real estate:

17,211 Homes Offered For Sale on Countrywide Financial's Website
Total REO Asking Price: $2,950,530,922
(As of Sept. 28, 2008)

Prices run the whole gamut. Millions to hundreds.

(Anyone want a piece of Detroit? One home listed @ $400; another for $600)

Check your state for listings.

http://tinyurl.com/4uy3ob

Well said muniman!!!

Bill I hope you enjoyed a day of rest. We all would have done well to step away from the monitor today. Thanks for all you do!!! My dad always said one "aw sh--" cancels 10 "atta boys" but for every sour post, there are at least 20-30 dripping with gratitude, not to mention all the lurkers that benefit from your insight and analysis. When I see the occasional sour post, I look forward to the wave of posts from your loyal blog community!!!

Regards,
Bill

Interesting background on Morgan Stanley & the term Bulge bracket. Some familiar names...

http://en.wikipedia.org/wiki/Bulge_bracket

Looking at IR because it came up on my stock screen.

I guess I already own it in BRKB anyway.

Seaboard came up in someone else's value screener last year.

http://tinyurl.com/4q4xlz

Buy IR at today's prices and you're going back in time to 2003.

Looks like it could go lower tho. Not a lot of support till the teens/low 20s if it drops.

Mackinaw -

I picked up some RBY today and will pick up more if given the opportunity. Also considering WGW.

seamus- the two homes listed for $400 and $600: great values if you're still alive a month after moving in...not making fun of detroit-> having lived in ann arbor with friends in detroit, i would pay ten times those amounts to move out...

I think this embarrassing episode provides proof that many of our problems emanate out of DC and out of the PEOPLE themselves.

Our politicians are actually dumber than they look. Scary.

And most men in the street have strong opinions and weak minds. Even scarier.

Better to let the system crumble then do something that might put a dollar in the pocket of a bad guy.

I say, get a bill with proper oversight and protection against golden parachutes or any other reward for a job poorly done.

But get it done fast, or main street will be the biggest loser of all.

Bill,

Ben's post above prompted me to come out of the shadows to post my first comments here. I think his remarks are way, way out of line. That's all I'll say about that but I want to take this opportunity to say thanks for all you do here!

I've been visiting your site for about a year. I read your WIR's every weekend and the daily commentary almost every day, especially recently.

Bought your book a month ago or so but haven't found time to read it, spent much of the last month just keeping up with posts here to prepare for a day like today. I used to be buy and hold, started raising cash around fall of last year, due in large part from reading the content on your blog. Got to about 35% Cash, started tweaking and nibbling a couple of weeks ago and am almost all in after today. All recent buys are CARA 100, Buy or Accumulation stocks. I feel good about my decision to go shopping today. Right or wrong it was my call!

Now the hard part will be to sell some back to cash after the next run up. Selling is hard! Hopefully that will become easier as time goes on.

So Thanks Much again Bill, and please keep doing what you're doing!

Scott.

Muniman,

Yes, I follow the muni mkt and have been in a lot for past 24 months as a safe haven. I am not typical because I have scored more in short term gains than in holding. I especially like the Blackrock term limited funds (BPK BKK BMT) when they get below the term value. Trouble is they are not liquid and the spread gets wide. PZA has a fair div for an index fund but being relatively new it is again not too liquid and just like any open-ended bond fund it has no date at which you get your principal back.

Ben -

It is not Bill's role to make our decisions for us. He has been preparing us for months (and for many of us, years). I find it immensely fitting that he chose today to collect thoughts. A coach's job is to prepare you to play not to make your plays for you. Today's level-headed posts are a testament to Bill's investment in this community.

ALOHA !!

ITS OFFICIAL ... It happened sooner than later!!

ON THE TOCOM GOLDMAN SACHS IS NOW NET LONG GOLD ...

Now Goldman Sachs has come over to MY side of the fence for once! Lets see how long that lasts!!!!

During the Sept. 29 session Goldman Sachs covered 13 short contracts and bought 495 long contracts to bring their long position to 2,525 contracts. Now they are NET LONG by 28 contracts!

NET LONG GOLD ...

Add that to the chorus of EU central banks who are tired of throwing away the only asset they hold that has no liability to any BANK in the World! When was the last time GOLD had to "writedown" anything or ask for a BAILOUT in front of the US CONgress?

GET A KLUE!

Now the only remaining question is ... WHAT DID OUR ELECTED REPS AND THE US FED DO WITH OUR GOLD RESERVES? Do you think there is a reason the US gold reserves have not been audited by an unbiased third party since 1952? We need an NIEE to inspect our GOLD vaults!

Can the US FED really get America's gold back from the US bullion banks that they loaned or leased it to in order to sell into the market and cap the rising price of gold over the past eight years? If the US FED "swapped" America's gold to China do you think China would give it back if the US PESO defaulted? What is "deep storage"?

SWAP
LOAN
LEASE
DEEP STORAGE

The above terminology does not inspire transparency and honesty. Where is our gold?

Whenever Washington DC and the US FED and Wall Street get together nothing good ever comes out of it! Somehow it always ends up as bad news for US TAXPAYERS ...

The simple question is ... HOW MUCH GOLD DID THE US TREASURY OWN, IN THE FORM OF GOLD BARS, AFTER WW2 AND HOW MUCH DO WE OWN TODAY?

Does anyone in Washington DC know? Does anyone in NYC know?

Ok so my posts from late August/early Sep. suggested the upside in the equity market was capped and the downside was back in play because the market was so technically weak with the number of very stocks vastly outnumbered by the number of very weak stocks. Ok, so now what? Well, the move down today was hard with panic in the air especially on the close after the House voted no to the $700 billion rescue package.

The Fed has de facto eased the target for the federal funds rate. Expect them to "officially" cut the rate at least 50 basis points as soon as tomorrow morning before the open or in reponse to additional downside moves in equities later this week.

With option implied volatility spiking up, sentiment super bearish, market technicals oversold, unemployment up and economic news bearish, earnings yields to bill and bond yields high and a bullish monetary environment the U.S. equity market has quite a few factors lining up bullish. So the time to commit cash is finally near, even if prices still have room to move down dramatically in the short-term.

Our bearish call from January 2008 has been rewarded (see http://www.2globalmarkets.com ). We will now begin the invesment process of getting ready to invest with the bulls. Stay tuned!

JWibbs

ALOHA !!

"17,211 Homes Offered For Sale on Countrywide Financial's Website
Total REO Asking Price: $2,950,530,922"

Seamus ... Yeah, but how much do I have to spend to get a Title and Title insurance? HA!!! These prices may be low for a reason other than DETROIT!

So Goldman went over to the darkside, huh Kaimu???:)

nemo- LOL...have to hand it to the samurai, they take losing seriously...that wouldn't be me standing behind them with the sword, though; a little Dr. Phil and a bottle of sake can accomplish the same thing with less permanent consequences...

Did you know "Seppuku" translates as sincerity? The ritual is to release the components of the soul from their locations in the physical body.

nemo- well, i prefer something less abrupt, maybe even with the benefit of a morphine drip...

david- i would be surprised to see a sharp rally from here, btw...there's been a lot of damage, and any ST rallies will be sold...i'm considering dollar-cost averaging my position in OAKBX (ie, cash) into equally-weighted positions in technology, China, financials, and energy...

kaimu:

thx for update on GS,

my question:

what has happened previously when GS has been net long Gold?

and when was GS last net long gold?

is their current position the result of a more rapid reduction of shorts or a more aggressive aquiring of longs?

And this is why no bailout for Wall Street:

http://tinyurl.com/3k5smr

They still get 50% of their bonus this year...

I'm feeling the same way about a rally, none really, even if there's a deal. Short-lived at the most. It would seem, but then that would be applying some logic, that the markets would have a hard time moving forward unless the deal actually resulted in some observable shift in systemic issues. BB gun against an elephant is an analogy that comes to mind. Mmmmmh...reminds me of a great Farside, "We have to remember that spot."

The House leadership said Monday night that the House would reconvene at noon Thursday, though it was not known if another economic plan would be on the table.
NY TIMES

QT

Naw, I had let my shorts go when the market moved against them.

Where did the 630 Billion the FED put into the system today go? You know that money will be pumping up some market soon.

Tomorrow should be very exciting.

Rob.

Just a couple observations.

Haven't run the RSI screener but looking on the daily charts, 7 day RSI's are under 30. This will probably generate a lotta accumulation mode signals. But I've seen the RSI's drop below 30 and continue to drop under 10, which is a panic sell.

My suggestion is to wait for the 7 day RSI <10, check upside vs downside risk, check the hourly MACD for a divergence, and only THEN venture forth.

Pioneers got the arrows in the back.

JMO.

wavesmash

I brought up SEB last year as an agriculture-food-transportation play. It's an illiquid stock. As I recall from memory, a family or family like group owns a great number of the shares.

Their hog production unit faces challenges with feed costs similar to SFD, IMO.

No position.

2nd, kaimu
You're right, who'd live there? Sign of the times. But can't help but recall around 1980-1981, HUD sold some row houses in a run down area along the harbor near downtown Baltimore. Recall a doctor picked up three units for $1 a piece. 3 years later, the area had been rehab'd and townhomes along the harbor sold for $300k plus. But Detroit "ain't no" Baltimore harbor that's for sure.

Re Mackinaw "Not getting a single response to my posts re: stock ideas. Seems to me Bill posted a few days ago that we rev-up the posting of our ideas on specific stocks."

SLW.to
RY.to

... if/when they reverse and bounce off of support lines on P&F. Both held on their supports today.

Pep Talk time. Man all this gloomy outlook. "All Rallys will be short term from here". i just watch cnbc for three hours. Not one expert says it is time to buy. It is a time for caution is what they say. Caution when your down 30%? Come on guys. I am normally a perma bear. A glass is half empty type guy. I could not be more bullish right now. Our Guru is bullish. What do you think Bill is going to say tomorrow. "Oh my god I was wrong Sell Sell Sell Sell." Don't think that is going to be the headline of his discoarse. I think it is going to be more like Buy Buy Buy.

Quite honestly I don't have a clue about all the technical analysis and I am sure the charts look bad ect, but there is great value out there.I bought VZ today where I am getting a 6% yield!Are people going to stop using there cell phones?

Earnings season is coming. Interest rate cut is a possibility. T bills pay nothing. what are you going to do with your money?
When you get down to it isn't a stocks price fundamentally all about Earnings and interest rates. Think of good companies that actually earn money and precious metals. Stay away from financials and consumer discretionary and ride the Bull. What a great strategy Bob. Wait that is what Bill said two days ago.

Ben,

I was delighted to learn that Bill had taken the day off. He needs it.

We're all very grateful for his help and instruction of the months and years. As has already been mentioned, at a certain point, one must do one's own thinking.

A day like today concentrated one's mind -- one's OWN mind.

That's the way it should be.

Latest from the American Precious Metals Exchange...

More and more people across the nation are pulling their remaining funds from failing stock portfolios, 401K’s and even now from their bank accounts in a bid for hard assets to protect against the current debacle on Wall Street.

At APMEX, we all but SOLD OUT on just about anything and everything we can get our hands on. We continually scour our resources to meet consumer demand, but as soon as we load the products on the site it sells out – many times within a few hours. Pay close attention to our website, because you may find that the products you want will sell out faster than you may anticipate.

http://tinyurl.com/3otjht

Bought more gold today. It seems when people pile into treasuries, its usually a bottom for gold. That doesn't seem reasonable today, but to be honest I'm afraid to have too much cash in US dollars for fear the Fed will do something to calm the panic, as in cut rates, which would send gold flying.

"david- i would be surprised to see a sharp rally from here, btw...there's been a lot of damage, and any ST rallies will be sold..."

Hopefully, I'll sell them first. :) Or I should say: my sell limit orders will be hit before the crowd starts selling. :) I have already placed sell limit orders for everything that I bought today.

As long as we don't drop much below the current levels I'll be fine. I was trying to be conservative last week and only bought a little USD and TBT despite Bill's calls for a new bull market and stopped when I reached my cash limits. But today was a different story...

To Bill, thanks for your help. You took care of business and everyone played nice. Cara Proof of concept...check BC chart since buy signal. Its still above its lows. I will not lament buying Dell (or ESLr although its not on your list).

Scott/Mamba , nice comment and nice timing!
To caution re Nancy Boyda, good on her. Looks like you got a good one.

Casey, I have begun to recognize your posts in your words before I get to see your name. I look forward to them.
peace from a gorgeous North Puget Sound

ALOHA !!

dr cosa ... Recall the last BIG POG bashing in May 2006? At that point GS had a net short of around 55,000 contracts on the TOCOM. They have been covering steadily ever since. So it took them two years and four months to unwind from the 55,000 high point.

Since they have been on the TOCOM in 2005 they have never been NET LONG! GS is in uncharted waters and so are we ...

ALOHA !!

Nemo ... Actually GS has come over to the COMMUNIST and ISLAMO-FASCIST and BUDDIST side, which if you count people, is the vast majority of the planet! Its a numbers game ... The majority of the World are tired of being dictated to financially and morally by the minority of the World! Why must the minority RULE?

I believe, through my extensive surfing travels all over the World, that 99% of people just want to be "left alone" to pursue their own version of life and happiness. Problem is the few who control the global governments don't want to leave 99% of us alone do they? So usury laws and tax codes were invented just to disturb 99% of our bliss! If A=B then B=A ...

CT remarks today suggests "The best way to teach Wall Street a lesson is to hit them where it hurts: in the pocket book. The Fed's rescue of AIG did not take any prisoners. Credit card rates (3-month LIBOR plus 850 points) charged on the $85 billion rescue loan will rapidly erode stockholders equity — and the added 80 percent equity stake will ensure that taxpayers benefit from any upside if AIG is sold off or recovers. If the TARP package is administered on similar terms, Wall Street will not want to risk a repeat — and taxpayers are likely to benefit from the eventual recovery. "

So why doesn't Paulson suggest that those $0.7T (or more) are invested as equity and/or paying high interest (at current market cap values) in whichever banks wants or needs money?

If the objective is to unclog the market, why wouldn't that work?

Is it because that's not good for the profit of those institutions?

Is it because $0.7T won't make a dent?

There still needs to be a solution for what to do with the tens of thousands of extra homes on the market (which the original bailout did not address either, but which will take many years to solve).

Futures up 200pts right now and TED spread a bit down today to 3.31, from 3.54 yesterday.

Hi guys!

I've been following Bill's blog for a couple of months now and am fairly new to trading. I live in Sydney and trade on the ASX but have also been trading your favourite gold stocks and SKF in the US since May this year.

For those of you following the gold price I thought you might be interested to know that the increase to Commercials net short positions last week was a whopping 37% to 141,276 NET short contracts from just 103,022 NET short contracts the week prior. So if the gold price is not behaving as one would expect during this turbulent time this might be one factor. The net short postiions by Commercials were at an all time high through July/August then gold stocks took off at the same time these were reduced in September. Any thoughts?

BTW thanks to all of you as I have learned so much not just from Bill's regular posts but from the discourse as well. I am most definitely still in my apprenticeship as a trader but I just love it.

One last thing ..the Australian market gapped down about 7% today and naturally moved up from a combination of short covering, margin calls and some selected accumulation at what were some great prices, however, there was a major sell-off in the last hour which indicates the professionals were expecting more downside in overseas markets today. Still some good volume in selected stocks even though overall market volume was light. The smart money seems to be nibbling here which would be in line with Bill's call for the new bull even though I know most of us a still very cautious.

Kaimu - not sure if you are left foot or goofy but Raglan, NZ has one of the best left breaks it the world -indicators are legendary. Taranaki is another amazing surf spot on the West Coast :)

Jock,

It was not my research (memory) which was a fault, but my sentence structure. (see note to yvrapx 8:02).

bsu87

I understand "one cancel other" but how do you mean to set up the trade you are suggesting? would you walk me through it?

re:POT
put in a one cancels the other order for DE, POT, and IPI.

SiO2 (Silicon Dioxide?) wrote: "There still needs to be a solution for what to do with the tens of thousands of extra homes on the market (which the original bailout did not address either, but which will take many years to solve)."

I agree - many years. I have a nagging feeling that the only solution, as in all asset bubbles be they tulips, dot-com stocks, or houses, will be price reduction. Only when *widespread* buying occurs will the housing bubble be finished. That's what stops the falling prices. And that widespread buying will need to occur with traditional financing. Given that as well as record inventory levels and terrible sales rates, there are significant negative price pressures on both the supply and the demand side... It will take time for this to be worked through. Perhaps the landing can be softened through "gov't solutions," like home buyer assistance programs, but unless it's on a grand scale, I doubt it.

Then again, I was sure the bailout bill would pass and I was dead wrong on that one!!

Kaimu, I don't see how GS perhaps being net long gold in its entirety, (according to the TOCOM) results in "GS [coming] over to the COMMUNIST and ISLAMO-FASCIST and BUDDIST side, which if you count people, is the vast majority of the planet!"

kaimu,
wondering why you focus on TOCOM positions of GS. Is it because that's the only exchange where the individual positions are visible? Also, could the positions there not be offset on other exchanges, and simply a result of arbitrage? Probably just showing my ignorance, but questioning others is how I learn. TIA

2nd about IBN
Mumbai (PTI): Banking stocks, led by ICICI Bank, on Tuesday surged as much as five per cent with assurance from the Finance Minister and the market regulator that Indian banks are well regulated and that there is no need for panic.

The Bombay Stock Exchange banking index touched the day's high of 6,466.15 points, up 4.71 per cent from yesterday's close. The index was later quoting at 6,456.25 points.

Finance Minister P Chidambaram on Tuesday said, "Indian banks are well capitalised and regulated," adding, "Indian markets are sound, still attractive for investors and we are watching the situation round the clock."

Shares of heavy-weight ICICI Bank on Tuesday surged eight per cent to touch an intra-day high of Rs 532.80. It was later quoting at Rs 530.60, up Rs 37.30 or 7.56 per cent in the late afternoon trade on the BSE.

re:one cancels the other trade

You put in multiple orders on one order. Buy POT 131 stop 134 limit (example), buy DE 54 stop 55 limit, buy IPI 28 stop 30 limit. First order that executes cancels the other 2 orders. When I saw a number of potential buys, it allows me to stretch my resources since it counts as one order. Usually put in after 10 AM and make the stock break above some resistance level.

Also like the contingent order, u can set up an order where an index or stock A trades above or below a certain price, then an order for Stock B goes live. So say DJIA <10,300, buy DDM market.

It's on Etrade but I would expect most other firms offer the same.

Jeff Saut yesterday
A week ago today, I said, “The lows are ‘in’ for the year” (a statement that will be tested today); to which I now add, “Provided the pandering politicians pass the ‘buyout’ plan.” Accordingly, trading accounts should be “long” half of their index positions, having sold the other half into September 19th’s 400-point Dow Wow on the premise the politicos don’t have a clue as to how to fix the problem. Still, as we enter the fourth quarter, participants should keep in mind that the S&P 500 has produced positive returns in the final quarter of the year 77% of the time since 1960; and technology has tended to be the best performer.

Also worth considering is that the only sector with positive net earnings estimate revisions during the past month has been Telecom Services. Additionally, my firm has “warmed” to stuff-stocks again (particularly the oversold energy complex) now that the Olympics/ Paralympics are over and China’s factories are back “on line.”

Speaking of China, the Shanghai Composite Index’s plunge has left the average price/earnings ratio of listed Chinese firms at roughly 17 times historic earnings, making China again look interesting. Ditto a number of other international markets look attractive, but not so for Europe.

Looking ahead to themes for the next 10 years, my firm continues to embrace agriculture (farming/forestry), water (water rights, water treatment, etc.), new technologies playing to energy conservation (including alternative energy and nuclear); as well as climate change, including environmental pollution and resource limitation.

As the bailout is on pause for two days, anyone else expecting a retest of 10,800 sometime before then? Still long DDM.

Cara 100 RSI scan this morning 9/30.

9 buys, 18 accumulation (later all 1 day)

RIMM 7 day RSI 13.89. Approaching capitulation (30. Max pains show potential.

I'd be more interested those stocks capitulating that create a strong, tradeable bottom.

Good morning.

One Cara 100 Change to report:

WAG - Target Price Lowered from $35 to $33 @ Jefferies & Co.

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

I love the smell of napalm in the morning. ;^)

Norm,

Re: no panic here

Yes, now that you mention it — good observation.

I suspect most who come here are far more savvy than the average person whose financial info is from TV, pop investment magazines,o or the supermarket checkout line. There has been little or no perspective given from those sources.

People hear, "DOW down 777" and the tone of voice along with the hyper talk by Paulson and many in congress pushing various themes for various reasons. Not even close to the 1987 percentage drop.

Above all, investors (and home owners) need to pause and ponder, watch and wait. As Bill has so often pointed out, what the market IS, is where we must deal with it. (Good grief, I sound like Slick Willie.)

We need to consider what the herd is likely to do (short term), but whether inflation or deflation eventually dominates, we can make wise choices both short and long here (after the dust settles a bit).

The congress is doing a lot of CYA and the media loves to whip up emotion and drama for everything from the weather report to the latest Hollywood rumor. IMO a lot of these folks can't handle a real job or everyday problems in the real world — that's why they panic at the thought off losing their cushy D.C. positions and make believe TV jobs.

We are not totally dependent on others as they would like us to think. You will not likely lose your house and can work out a deal. You don't NEED to buy everything you WANT to have. Avoid easy credit. We are not dependent on congress for our security — we can create own own. A false sense of security is a dangerous thing (as this subprime mess shows).There is no substitute for a healthy skepicism and reason well applied.

We're going to get a chance at a white swan here.

End of sermon — Sorry, I got carried away... again.

Cara 100 Update:

RIMM - Upgraded to Outperform @ JMP Securities

Keep your eye on VLNC guys. Not sure what propped it yesterday, but price and volume action was impressive; daily looks interesting. No news that I see. Considering company profile, maybe it's being looked at as possible battery supplier for all those electric cars in works?...

Have just started looking at yesterday's action, but generally speaking yesterday was a major "pattern failure" for lots of different mechanical trading systems (as Bill's RSI system).

When that happens usually the the reaction is violent and significant in the other direction as everyone panics to cover, and then starts to build positions in the other direction. This is thus probably not finished yet by a long shot. If real panic sets in it could become extremely nasty.

A major commodity like oil down 10% - in one day?

Working hypothesis is still that this is a 100 year event that simply cannot be "fixed" by reinflation, the accumulated bad debt is so huge that it must/will be defaulted on in the end in some fashion. "How?" Who can predict what the politicians may cook up.

watch out . . .

Here's what I would consider a more well thought out view of the current situation.

As Grym writes, "A false sense of security is a dangerous thing (as this subprime mess shows).There is no substitute for a healthy skepicism and reason well applied."

Surely this applies to both views.....overconfidence NOTHING will happen is also dangerous.

Duh...and here is the other well condiered view from Colin Twiggs: Markets tend to overreact, in a boom and in a bust. We are likely to see a mad scramble to rescue the TARP package — and a relief rally if this succeeds.

My initial response was anger at the failure of legislators to realize the true impact of their decision. Collapse of the banking system could spark a rapid contraction of credit as investors lose confidence and withdraw funds from the banking system — and banks are forced to recall loans as their deposit base shrinks. Voters may be angry with Wall Street and urging their representatives not to back the plan, but their first thought should be to protect themselves. The attitude of many may be "I own my own house and don't owe any money. Let those fat cats in Wall Street rescue themselves." What they should realize is that tomorrow they could be out of a job — or lose their business because their customers are now unemployed. We may not have contributed to the mess. And in fact may have warned against market excesses. But none of us are immune to a banking collapse and its consequences.

The best way to teach Wall Street a lesson is to hit them where it hurts: in the pocket book. The Fed's rescue of AIG did not take any prisoners. Credit card rates (3-month LIBOR plus 850 points) charged on the $85 billion rescue loan will rapidly erode stockholders equity — and the added 80 percent equity stake will ensure that taxpayers benefit from any upside if AIG is sold off or recovers. If the TARP package is administered on similar terms, Wall Street will not want to risk a repeat — and taxpayers are likely to benefit from the eventual recovery.

VAD - Thank you.

Craig, I don't think it is that simple. Like someone points out, charging Investment banks high interest sounds like a good idea. But they just pass the cost to the consumers. They just increase every kind of fee. They personally won't get hurt; maybe even better.

Passing the bailout plan is giving the money to the people who create the problem in the first place. They continue to be greedy and exploit average Joe. And eventually they will create bigger problem.

Hey Beard!!

Here you go:

Valence Technology Announces Appointment Of Ross A. Goolsby As Chief Fincl Officer >VLNC 09/30 09:00 AM

Ummm... I saw that but I am having hard time imagining it could send a stock up like that :)

Anyway, just something to keep an eye on.

Apollo7: I'll just add the important part for you to read again, because you are one of those saying, "Let those fat cats in Wall Street rescue themselves."

For myself... you know, I have little to no debt, my house is paid for and I don't use credit irrsponsibly.
YES this is pissing me off, but a few grand compared to the alternative is a silly choice.
This is that penny wise dollar foolish game...
WE, the market, lost over a trillion $ yesterday.
Let's see, down $trillion days or $700 billion.
Kinda like a career choice...brain surgery or burger flipper? LOL!

Okay, here's the point again. Answer THIS question about a banking collapse and how we can avoid it. If you can't explain how to avoid it, then you are suggesting driving the car off the cliff to fix it and I sure can't follow you.

"What they should realize is that tomorrow they could be out of a job — or lose their business because their customers are now unemployed. We may not have contributed to the mess. And in fact may have warned against market excesses. But none of us are immune to a banking collapse and its consequences."

Maybe the situation won't be as dired as you expect it. People still eat, drive, wear clothing.

We don't know the outcome until we test it.

And they are hijiking average Americans now. They threaten that if there is no bailout, most people will be out of jobs. So average Joe give them authority. Then later on they can hijike average Joe again. There is never ending.

Well. I think that is about it. I think I have expressed myself well enough.

If the bailout plan is not approved, average Joe gets adversely impacted. If it is approved, average joe still gets stonewalled.
It appears , the arguement is , since the average Joe is in trouble any way, why even bother about what happens to the average Joe.
Lets protect the Wll street and the inflated salaries of the wall street 'heros'.

UNH up 15%. Cara 100. No position.