Winning one battle doesn't win a war. Call your Senator today and send that FAX like you did to your Reps.

Here are the phone numbers for Senators:
http://tinyurl.com/4q45sm

Kaimu:

As my German professor used to say, "Communism is where man exploits man, capitalism is just the opposite."

To the fellow who wondered about Goldman now going net long:

That's Kaimu watching what the big boys (and girls(to be politically correct)) do, not what they say.

pappdjavul

Thanks for your 8:29 post today. Food for thought.

Hey Beard!!

Here you go:

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

Jeff,

Thanks for filling in during the Big Kahuna's absence. Sure do appreciate your work here in Caraistaville.

I nearly followed Bill's lead yesterday, thinking about calling off work with a case of anal glaucoma(couldn't see my butt going to work).

Regards

vinod- thanks for the info re IBN...

Vad,

Thanks for the heads up on VLNC. I noticed that ALTI had a good day in spite of the Apocalypse.

disclosure: long ALTI

Regards

This market is amazing:

Go long one day, go short the next. It's been to simple, which is what makes it so hard.

bought 100 more DE at 47 yesterday and 100 more NOK at 15, hoping it won't be buyer's remorse.

watching NUE, but just not sure about steel industry, and its one I don't know much about.

seemed like industrials such as DE, CAT, AA, etc and energy took hardest hit yesterday

I'm surprised Au hasn't gone through the roof... Must be intervention?

Bond yields not available again:

http://finance.yahoo.com/bonds

Thanks Korvus for holding down the fort!

Be careful today folks or you could end up with arrows in your backside! This doesn't seem like cause for an enduring rally, does it?

i can see them taking it down below 10000, but if you bought in the past two weeks, you've still made good entries...if you look at multi-year charts of US or foreign indexes, it's easy to spot the crisis points, and to see that you had plenty of time to establish your positions...both 9/11 and SARS are recent enough for most of us to have traded-> a 2x gain in positions over two years seems reasonable for those willing to trade 'the other side.'

Gold and silver just got clocked by about $20 and $0.50, respectively. Tough to say if this was just the usual NY COMEX opening bear raid or the typical bear raid when the President speaks. Or perhaps we were lucky enough to be treated to a combo bear raid this morning. Almost of yesterday's gains in precious metals have now been erased which is highly suspect considering the odds are slim that the DOW will recoup all of its previous 777 pt. loss today.

Westcoaster -

On your 8:07am post regarding "Jeff Sault"'s comment: Just a kind reminder that the missive you posted "might" be copy-righted by Minyanville's pay subscription.

Re: Gold Price

COT reports from last week showed that the Commercials piled back into gold shorts, increasing their short position 37% to 141,276 NET short contracts from just 103,022 NET short contracts the week prior. This has been quite a good indicator of the gold price in recent months.

BH,

you are right about ATLI, this one slipped under my radar. And it's in the same business as VLNC. maybe search for a winner in that industry starts, and we are witnessing early stages of it.

sorry, ALTI is a symbol... dyslexia.... or should I say, disleksya

fransix,

when you state that yeilds are not availible,
does that mean they have gone negative and the charts cant post the amount,
or just that yahoo finance is having problems of some sort?

How would you have liked to be long FXP at the close last night? Ouuuuuuch!!

Yields would have to be at zero, my guess. David Chapman reports that yields went into the negative with the onset of the financial panic last week. I believe this contributed to the rocket in the gold price that day.

Since that day, margins on the COMEX were raised substantially on all gold and silver contracts. There's a rumour floating about that the COMEX is settling contracts for physical delivery in cash.

Inflation, Deflation, Money Velocity and Gold

http://tinyurl.com/47rwd6

From David Rosenberg at Merril Lynch (now Bank of America) today:

"Money supply will increase but money velocity will not
We are getting asked repeatedly these days how it is that the government debt creation we are about to see is not going to be inflationary. After all, aren’t we going to see a boom in the money supply? Well, we’re sure that the money supply is going to increase, but at the same time, we are going to see the turnover rate of that money, or what is called money velocity, decline. This is exactly what happened in that 1989-93 period when the Fed massively reflated. Money velocity contracted 13% and this is the reason why the inflation rate was cut in half that cycle and bond yields rallied 400 basis points, though no doubt that downtrend in yields was punctuated by intermittent corrections – as we’ve seen take place in the Treasury market over the past week."

In Gold, Oil, PMs: More Hedgies Get Whacked I wrote:

“Forget about oil demand from the BRIC countries. The whole globe is grinding to a halt. Believe it.

Forget about inflation. There has never been in the history of the world an inflationary run while land prices were declining. The amount of debt being destroyed as the monster of a debt bubbles implodes will suck down all asset prices and just absolutely collapse the velocity of money.

Factor in some serious de-leveraging by every single kind of market participant, and there is no way commodities can resume their ‘secular Bull market’ for years to come.

Take a look at copper for example. Copper just smashed through a multi-year trend line after putting in a long topping formation. Since 2006 prices have been hitting the same highs and getting rejected. This break down is of utmost importance.

Game over.

I’m firmly in the deflationist camp.”

As soon as the fear and panic subsides, the easy money will be made SMASHING gold short as people finally realize that inflation is what we HAD and that deflation is what we will HAVE.

FXP - I don't understand the US market, let alone one on the other side of the big pond.

c3:
Jeffrey Saut is available free at Raymond James:
http://www.raymondjames.com/inv_strat.htm
I have never compared this with what is in Minyanville, but I suspect it is the same. So I doubt it is a copyright violation.

Whoever control the gold price has done a very good job. Gold price goes down to $881 now.

westcoaster - On Jeff Saut: I apologize. I thought it "might"... After digging a bit more, I saw the same missive was posted on the public page. All clear.

ELRA is one Au miner on my list going up.

VAD, BH and all, re strange closes yesterday.

Yes I mentioned a few last night when comments on the strange close on ESLR came up. All of the ones below came up on my watch list for alt energy stocks.

ALTI + 15%
BLDP + 18%
QTWW + 36%
VLNC + 36%
OPTT + 13%
ELSR +3% (but very interesting last minute)

This link is an Imageshack png of all the above on a 2 day 5 min chart, from Stockcharts.

http://tinyurl.com/3f3vs9

Something up in the alt energy area ? or just some people covering their shorts going into the close on a volatile day when anything could happen overnite, maybe even big rally Tuesday, trying to lock in short profits ? I don't know but it sure did catch my eye.

Quasi

I was watching AMSC at the close yesterday, same strange close in an alt energy stock. I couldn't find any news related reason as to why. Just another one for the list.

"Cheer up: Here comes a recession"

An interesting viewpoint from Jim Jubak:

http://tinyurl.com/45dl68

There's a case to be made for deflation smashing the price of gold, but not when the demand scenario changes the fundamentals of the precious metals market itself.

If cash is hoarded, then so is gold. And if cash is becoming increasingly firm, then gold prices will remain firm as well. This is why short term bond yields are so important to watch. (they're available once again=> http://finance.yahoo.com/bonds )

In reality, the moderately deflationary impulse we are seeing now is reflected in the decline of copper and oil vs. the gold price. Its very easily demonstrated by the following chart:

stockcharts.com

http://tinyurl.com/4sq8cb

Quasi - Thank you, good information

Quasi -

Perhaps a fund closing at the end of the month and needed to close out shorts?

RE: Is something up in the energy area?

A bill went through last week to provide tax incentives for alternative energy:

"H.R. 6049, the Renewable Energy and Job Creation Act of 2008, will provide approximately $18 billion of tax incentives for investment in renewable energy, carbon capture and sequestration demonstration projects, energy efficiency and conservation. The bill will also extends $27 billion of expiring temporary tax provisions, including the research and development credit, special rules for active financing income, the state and local sales tax deduction, the deduction for out-of-pocket expenses for teachers, and the deduction for qualified tuition expenses. In addition, the bill provides almost $10 billion of additional tax relief for individuals through an expansion of the refundable child tax credit and a new standard deduction for property taxes."

Good post f6.
Another ignored point....what is happening in the rest of the world? How much will Europe deflate or reflate? China/Asia?

We aren't in a vaccuum.

Guys, love the bravado about the "plan", but a banking system failure isn't a good idea.
Kinda like being sold a lemon car, having the engine break down and deciding the best plan to fix it is to drive off a cliff to make the auto dealer "pay". Oh we'll show them alright....while we (or people we know, like our customers) stand in bread lines.

A small geothermal company went up about 45% yesterday--apparently in response to the passing of the bill.

I have no energy positions (alt or otherwise).

C3 No worries. Thanks

I second Craig. Having said that, it still might just be kickin' the can for when the CDS debacle hits.

Nemo, I think you and I are proof all the people regardless of political leaning mumbo jumbo want the same thing. Different maps, same destination.

Good on ya brother.

Craigster:

In the event there is some belief I have a particular affinity for one or other political persuasion: I listen to the right to hear what the left isn't telling, and vice versa. I find them to be equally attractive and repulsive.

What's unfortunate for those who want punishment for transgressors, although it would be well deserved, is their lack of awareness for the integrated ripple down effects. It would be pyrrhic in result.

Craig - I applaude you "Good post f6.
Another ignored point....what is happening in the rest of the world? How much will Europe deflate or reflate? China/Asia?"
F6 - Thank you.

Bill has encourged us to take a broad view. So what is the take on happenings in the rest of the world?

What makes you guys so sure that taxpayers buying Mortgage-backed securities will unfreeze the credit system?

Let's say we go ahead and buy 700 billion worth. How will that help the main issue which is trust and confidence in company balance sheets?

For example, let's take Citigroup who has plenty of MBS on it's own but also has Wachovia's MBS now. Let's say Citi gets to trade 100 Billion of those for taxpayer money. Are you now going to be ready to go all in with your money in Citi? Do you trust that is all the bad paper they have?

My solution is to force all companies to list everything on their balance sheets starting tomorrow and have the entire CDS market moved to a regulated exchange like the CME tomorrow as well. That way everyone knows what everyone's position is.

Some companies who invested poorly will go down tomorrow and the strong ones will fill their place and we will still have the 700 billion to give the strong ones if we want to spend it then.

No matter how much money we throw at the dead banks nothing will be solved until we know who's holding the cards.

Rob.

Finger Lakes makes a point, now bring that out further, because even if an institution were able to lend, wouldn't they have to look at the landscape for the prospective debtor? Lend to a company that sells to other companies: what does their financing or ability to finance look like?

If bailout is approved, average Joe loses. If it is not approved average Jose still gets stonewalled.

Another way of looking at it. If bailout is not approved, average Joe is definitly in trouble. If it is approved, we are not sure whether the average Joe will be in trouble.

Why even bother about the average Joe ? At least tat's the stand.So lets try to save the banks who started the mess and protect the salaries of the wall stret heroes who started the mess or at least had some hand in the mess.

Part of the issue, average Joe's propensity to spend even before earning. There are a few exceptions.

The drama that is unfolding and th political jostling going on is really sickening. Do you trust your senators republicans or democrats who are fighting for power to really act rationally and set aside their interest ? I do not.

Hi!

For those interested in chart geometry, I think am observing a bullish flag formation for POG, quite visible at the 1 hour chart, with a price target upon breakout of 1038.

The looks of it would imply that a breakout could happen over the next few trading days.

Thank you for insights / comments on this.

Cheers!

Just to add, I do have a single penny in the stock market. But do have a large mortgage. Thankfully not a arm.

Cameco (CCJ) just crossed the RSI(7) daily threshold (five minutes ago) and I bought some. Well see how it goes!

I agree, Rob.

Until all of this toxic debt is transparent, what's to prevent Hank & the boys from coming back in a month or two with their hands out again, while warning of another world ending credit crisis?

Surely, there's a lot more than 700 billion dollars in toxic debt out there.

On the other hand, these toxic mortgages have been sliced and diced so many times, just maybe, no-one knows where it all is.

Regards

Will the VIX bounce off of 40? Guessing Yes. Closing DDM @ 52.02, (3.6% gain from yesterday)

looking at the huge run up in the $USD today
im watching closely for the RSI/STO and MACD signals for possible negative divergence should it touch the 80 mark again (or just slightly above)

this could be an important turning point in the US dollar in that it may signal a double top and rush to the downside or a breakthrough of overhead resistance and a push much higher.

gold at $876 as i write, london market just closed...hmmmm.

is there some degree of concensus that gold will fall should the bailout plan be approved? the arguements for gold rising on the plan's approval dont seem to be reflected in the action as of late as the dollar keeps holding on and gold keeps getting smacked back down below $900.

maromatics:

A request should the effort not be too great. Could you provide your analysis for POG.

Rob actually comes up with a good solution, a hybrid of the current one.

All they are doing is moving 'bad' undervalued/unknown valued assets off-book. A holding company or the Treasury or however treasury planned to do this looked whacky as it was right back into the same private managers. A Holding company created by/reporting to Congress would be the ideal as it could be built to spec.

This would have to be done with immediate reinvigoration of the oversight agencies, budgets, number of forensic accountants required to provide proper oversight, etc.

Put a couple of low ball turnaround experts on the board for public support, Buffett and Ross would be good choices.

Then turn the magnifying glass on the banks and put the screws on there re loan standards, and put the stops to the shadow banking system.
Otherwise it doesn't protect/benefit the people.

Re: Rest Of The World

One might take the point of view that the U.S. is in the minority when it comes to the 'rest of the world.' The drama is being acted out in the U.S. front and center, while elsewhere, there is literally ennui when it comes to finance.

Euro zone bond yields slowly melting week by week. Short term rates and 2-year rates have fallen ~40 basis points lately. Should be seeing an emergency rate cut, which will flood the markets:

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

Some Asian markets are already seeing rate cuts:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aksQTJRPR6Do&refer=home

Bill thought gold would be weak initially if the bailout passed as traders moved back into other beaten down sectors.

I see that bullish flag too.

Rob, if they came up with a more palatable plan in exchange for the worthless assets, say the with government were to buy $0.7T of preferreds in the banks paying a good interest (say 10%), thereby recapitalizing the banks with fresh cash and unfreezing the markets, etc... Do you think $0.7T is enough? Likely not even close.

This does not seem to solve anything really. There are too many houses around (tens or hundreds of thousands), and prices are and will keep dropping.

Maybe 100T will do it? But then someone else is more than broke.

Nemo,
That's exactly the problem. We have plenty of banks right now able to lend but they won't because of fear of what the institution who needs the money is holding and they fear not getting paid back.

That's why LIBOR keeps rising so rapidly, the lack of trust is building. If you look at all these anonymous facilities the FED and treasury have created so far none have any transparency to protect the institutions with compromised balance sheets.

And this Paulson plan would have merely extended that shell game. The only way to restore trust is to have everyone show all their cards, including the level 3 and off balance sheet items.

We may very well find out that JPM, BAC, C, MS, GS, and many others are worthless but we will know what we're dealing with.

And most importantly we'll still have the 700 Billion to build the strongest regional banks into the new JPM's and BAC's.

Just like Citi took over all Wachovia's branches and deposits and JPM took over all WM's branches and deposits, these smaller regional banks could either take over all of JPM's and BAC's branches or they could split them up regionally.

Either way the bad actors would be off the stage instead of preparing for the next act and the institutions who managed their balance sheets more effectively would be given a chance to improve the system.

I submit that the current crisis has been exacerbated by the FED allowing these dead banks to stay anonymous with their holdings.

Rob.

F6 - Thank you again.

most everything is below a major fib, look to be fading. typical is XLE, which didn't even make it back up to 64.

QQQQ is the odd man out possibly, it bounced late yesterday from a fib @ 37.38, but hasn't bounce well yet at all.
Volume/accumulation on it is muddy, it seems most advanced to the downside & may bottom first, so sold most puts & locked in the rest with cheap calls.

SLW looks bearish.

Maromatics- Thanks for the alert. Also notice on the hourly GLD chart the Bollinger band is inside the Keltner channel which usually leads to a fast move in the direction of the breakout. Thanks to whoever here posted that observation about the BB/Keltner relationship. I don't remember who it was but it usually works.

Nemo,

Across different timeframes for PoG

Monthly chart: CCI-10 at -88, but RSI-7 is at 55 and rising, while stochastics (3;5;5) are crossing up, signalling another upmove.

Weekly chart: CCI-10 at 78 and rising, RSI-7 at 53 and rising, and Stochastics (3;5;5) at 55 and rising. Confirms upward movement. This is the 3rd week since a bottom emerged on September 11th. Weekly support around 869. Weekly resistance around 907 / 908.

Daily chart: CCI-10 pointed down at 25, RSI-7 pointed down at 54, and Slow Stochastics (3;5;5) pointed down at 39.This signals that a correction is still underway. Daily support for today: 880. Next support at 874. Daily resistance: 908.

Geometry: Bullish flag formation forming - very apparent at 1 hour timeframe.

My comment:

PoG is going through a short term correction of a very fast upmove. This correction is taking the shape of a bullish flag, which is a continuation pattern.

Yesterday's attempt at a breakout failed because a trade above the 900 resistance followed by a close below is a short term bearish trigger.

875 will likely hold today, and if the price closes above daily support, there will be a bullish trigger.

The price target for the bullish flag formation is 1038.

Cheers!

"Why even bother about the average Joe ? At least tat's the stand.So lets try to save the banks who started the mess and protect the salaries of the wall stret heroes who started the mess or at least had some hand in the mess."

I agree, and to complete the thought let's send ma&pa retired, a case of catfood (their choice of flavor), some firewood and a get well card expressing our sorrow over how their life savings are so conveniently dismissed. And a case of USDA prime for the HB&B so they can feed their children and dogs. That should take care of the $700B until the recession is over and ma&pa have passed from exposure to the elements.

Junior oil/gas

Scotia Capital Galleon Energy.......Go.a

Disclosure:Long small starting position.

Target Lowered to $15.75 (from $17.00)
■ With the company lowering its 2008 production guidance, we have subsequently reduced our one-year target to $15.75, down from $17.00 previously, but we maintain our 1-Sector Outperform rating as we see significant upside potential given the current weakness in the stock. Facility downtime and unscheduled gathering system shutdowns at various third party facilities has lead to management reducing its third quarter production guidance to between 17,100 boe/d and 17,500 boe/d, with fourth quarter guidance now set at between 18,800 boe/d and 19,600 boe/d. We have subsequently lowered our 2009 average forecast to 21,500 boe/d and 2010 estimates to 23,900 boe/d, down from 24,200 boe/d and 26,500 boe/d respectively, see Exhibit 2. Based on our NAV work as highlighted in Exhibit 1, we currently see the shares discounting at approximately US$90.00/bbl oil and C$6.00/mcf natural gas prices, and it is trading at less than our core after-tax NAV of $11.88, which has been lowered from $13.23 due to the reduced production profile. Our new target is now set at $15.75, which is based on our core NAV plus approximately $4.25 per share of “risked” upside associated with its exposure to the Montney play. With over 70% upside to our target, we maintain our 1-Sector Outperform rating, and still view this as one of the cheapest ways to invest in the emerging Montney play with exposure to over 500,000 gross acres (or over 200 net sections) of land in the general area.

You know, I have no fear Wall St, but Main St is scary.

Look at all the big mouths spouting off about the bailout.

Where were they when they were lending to toothless unemployed derelicts?

And buying the bad debt from the bad actors will not solve anything and I doubt that it will even improve LIBOR or the trust between banks unless we're ready to take all the bad paper in one fell swoop.

I've seen estimates that the debt going bad is between $4-6 Trillion.

Are we ready to buy all that to save the bad actors?

Do we really think everyone is compromised so that there will be no financial institutions standing if we require the insolvent institutions to fail?

Rob.

Re: bailout perspectives
John Hussman posted a weekly letter addressing the bailout from a balance sheet perspective. It is worth a read.
http://www.hussmanfunds.com/wmc/wmc080929.htm

Ah!

Forgot to say something very important: DYODD.

:-)

Fingerlakes: It may be that the off book liabilities are so great, and they know this, that'll sink everything.

Maromatics: thank you.

hulgar: what Keltner metrics are you using? danke.

Thanks kiron,

I think Hussman makes some good points, such as:

"This is a bad idea. However the final legislation is written, the Troubled Assets Relief Program (TARP) being rushed through Congress will evidently be built around its single worst provision, which is that the Treasury will have authority to purchase distressed mortgage securities from U.S. financials...

What the financial system has needed most has been for Congress to streamline the bankruptcy process for investment banks, so that in the event of failure, the “good bank” (assets and liabilities, ex the debt to bondholders) could be cut away quickly and liquidated to an acquirer, leaving the proceeds as a residual for the bondholders. Indeed, that's exactly how it works for regulated banks. What investors overlooked in last week's panic was that we actually saw the largest bank failure in history – Washington Mutual – with absolutely no losses to customers or the U.S. government, precisely because the good bank was seamlessly cut away and sold to J.P. Morgan, wiping out shareholder equity, preferred equity, and subordinated debt, with partial repayment to the bondholders."

Basketball fans' guide to the Financial Crisis

http://bigpicture.typepad.com/

(via Barry Ritholtz; it's today's lead post.)

nemo- I'm using the Stockcharts default setting-
Keltner is 20,2.0,10. Good luck.

ERLA - Taking profit

I trust this rally as far I can toss it.

Macromatics - thank you very much for sharing your analysis of POG. Your efforts are very appreciated.

Gold definetly seems to be building a nice wedge since the big initial move up to $900. If $870s hold today it will continue the trend of putting in higher lows since the reversal and put us one day closer to knocking out that resistance above $900.

If you look at this over time and also read Colin Twiggs, you come to realize and see how all the soft landing talk and on and on from everyone, combined with a gradual release of information/failing of institutions/stock market range manipulations/currency manipulations etc., is to step it down gradually, to avoid a big crash.

So sure, it's gotta cost more. That's why we are looking at items of true value like pm's, right?
You know how the rest of it goes.

Let me get this straight. Equites have a top 20 all time sell off. Banks are failing world wide. I guess that means sell all your gold. What Am I missing.

SIL. buy stop 1.90/1.90 limit. Max pain 5 for Oct.

long at 2.38. always buy too soon.

Does the RSI work for GLD ETF also?

7d showing 70.78 @ closing price of $89.57.

Would this indicate over bought?

re:SIL

I'm long at 3.70.......in waaayyy too early.

maro,

thx for the gold TA, always find your outlook interesting.

a run to the mar/08 highs would be great,
but does it appear from a technical perspective that the miners would follow in kind should the rest of the market take it on the chin as the ratio of the GDX:GLD continues to crater.

thx

re:GLD RSI.

It would indicate ST overbought. Note the 7 week is 60, 7 month 61.

It may not be a sell but IMO, it's not a buy at current levels.

bobbyo - We could've sold gold yesterday above $900 and bought back today.... Can we count on the interventionists to keep it bouncing between $870->$900 range, or will the market throw us a curve ball and allow it to go where it should? As kaimu said yesterday, the gold market is so small Oprah Winfrey could corner it... That says a lot to me.

Nemo,
I'm sure that for some companies like Citi, JPM, BAC, MS, GS, CIT, and many others the off-balance sheet liabilities are so great that their combined stock prices are actually worth about 10 cents.

That's precisely why they need to fail to wipe out all that bad debt instead of shifting it to someone else and hoping they can somehow recapitalize enough to weather the damage the rest of their off balance sheet liabilities gives them down the road.

I do not believe life will be over and we'll all be in breadlines if we allow these weak institutions to fail.

What I do believe is that many banks will fail unnecessarily because of the building lack of trust while we keep propping up the institutions who are the real causes of the problems.

Fear of the unknown is far worse for everyone than transparency.

Rob.

Kiron - THANKS for spotlighting Hussman's column.

The simplest, clearest explanation I've seen of what the gov't should do and why.

Normally, he writes like the economics professor he once was. This week he's cogent and clear. An important read for all Caristas!

http://www.hussmanfunds.com/wmc/wmc080929.htm

Thanks bsi.

Nemo,
Billy,

Thanks.

Dr. Cosa,

Thanks too. Sorry, but I am not looking at the miners in general from a TA perspective at this point. What I am doing is slowly accumulating some good quality producers, not so much caring about technicals....

Cheers!

FYI: Kaimu's comment from yesterday on the size of the PM markets:

"... 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! ..."

Shana Tova!

Thank you 2nd and all!!

I bought SNDK and more SLW this morning after selling my WGW for a small profit. I am heavy in gold, silver and mining stocks and might buy some jr mining stocks in canadian dollars.

I also bought 100 shares Palm based on inside tip also watching regents bank. (missed out on last ride from 8.00 - 19.00.

Have a great day!

"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?"

Today's #1 Song in Washington, D.C. :

http://tinyurl.com/3nneqx

;^)

Re: TOG
Jesse's American Cafe has an article on the timing of the "trade of a generation". Thought you might be interested.
http://jessescrossroadscafe.blogspot.com/

long PPC at 2.54. small speculation. RSI 7 day<10.

Max pain 10 for Oct.

northvan, Thanks for the correction, I apologize for my error.

re:PPC

1/3 ATR buy stop at 3.08/3.08 limit

Grabbed a piece of AIG move earlier this morning. Not a lot of "up" in these stocks.

It's sad when the "free market" is sitting around waiting for a Washington bailout, isn't it?

Starting to look to me like any reflation effort will have come too late - one thing we can learn from Japan is that the reflation must be timely or it will not work.

Pretty hard to be long anything here besides gold and gold miners now. The risks are outweighing the rewards. On an upswing passage of a bailout package/interest rate cut, seems clear to me that it would be a selling opportunity now and simultaneously a buying opp for gold/gold equities as they get hit temporarily before soaring once debasing is priced in later. The global markets do not look as though they will recover from a too late reflation now.

ABV. Triple RSI buy generated. Long at 51.19 yesterday. buy stop 52.44/52.44 limit to add to position.

Max pain 75 for Oct.

Do your own DD

Good morning! The stock indices are up but my portfolio is down -- strange... It is probably because the commodity stocks I own fell somewhat. Well, I decided to reduce the leverage of my portoflio and closed the TLT short at $95.70 for the shares I shorted a couple of weeks ago at $97.17. Also, sold at $127.30 the shares of GS I bought yesterday at $120 -- I had a sell limit order at $130, but decided to take profits sooner so as to reduce my margin. My USD and QLD purchases from yesterday are already in the green, but I'll wait a little longer to see if I can get a bigger gain on them.

Oh boy, transports triggered a Dow Theory sell signal. Too bad Dow's already lost over 25%!

I always wondered by Ryder and Union Pacific were holding up so well given economic backdrop. And lo and behold, they're still holding up incredibly well! Wonder which components tanked enough to trigger the sell signal...

long wb

XLU looking weakest of what I watch, like it could fold anytime . . . but maybe today is just sideways.

Added back a few XLE puts, about 1/2 of what I sold yesterday. XLE is still eyeing that 64 fib just above, may give it another try.

took a 15 cent ride on wb took about a minute...made $

long SNE at 30.88 Think it's a Triple RSI buy, was in accumulation mode for 1 day. 40 on max pain.

That's what happens when one wakes up too early -- one sells too early. :) GS would have hit my limit of $130 by now, if I had not sold it earlier...

IBN. Sold, made some lunch money.

What's affecting ETF performance of late?

Ignoring SKF Tipping-Point, SEC Slams Free Market
September 29th, 2008
By Max Rottersman

www.ETFGuide.com
http://tinyurl.com/3oe8cc

Vadym Graifer,

Wouldn't that likely be lysdexia? ;-)

into DGP, @ 19.64 - out if gold falls below 870

Grym,

don't underestimate my mistyping skills. Dyqsleksia is not out of reach for me.

Jock & Kiron,

I've followed Hussman's Monday reports for about three years. He seems well reasoned in all his commentaries. Too bad congress won't read them.

cover SPY OCT 102 naked short daytrade for small gain
Holding QQQQ OCT 40 calls long for a daytrade. If I do hold overnight I will hedge with a 1/2 position in DIA puts at an implied volatility that is equal to the QQQQ calls at the end-of-day

Is you bank OK?
http://www.bauerfinancial.com/btc_ratings.asp
It should have a 4-5 star rating

Gold just cracked 870, I should add, I'll take my losses on DGP if the USD Index breaks out above the day's high of 79.69

..and i thought Vad threw in the "-skya" as a Russian joke...

If the FDIC increases the deposit insurance to $250,000, does that mean we're looking at inflating 150%?

Fun fact for today:
On Monday, the Dow finished lower than when George W. Bush assumed the presidency: 10,587.59 on January 19, 2001 compared to 10,365.45 at its close on September 29, 2008.
FD-Am neither REP or DEM

2nd... eqzaktly. But that backfired too.

.........
.........

..OK, can't keep straight face anymore, LOL

Vadym: Gwo up!

wachovia baby full force

nemo, I refuse to. They told me if I grow up I can't play with shiny things, watch pretty flashing lights of Level 2 and push Buy and Sell buttons randomly anymore. I can't give up that much fun.

the odd thought -

the market has to break down again today, at least somewhat, or the politicians will start to wonder if they really need to do a bailout package.

Eh, makes sense.

Sharkster: see sov today?

Ouch! Haven't traded gold lately, I've forgotten how fast it moves. I looked & it was crashing down to 860 on volume so I doubled down.

Target exit if GLD hits 85.5 ish

donde esta el queso grande?

Craig,

No. The FDIC should actually raise the limit to $1m. Small businesses are currently taking money out of banks and moving them into treasuries. Raising the limit will definitely help deposits.

en los banos

Trading My Chips:

tx for posting the Scotia Capital notes on Jr. oil and gas today and a few days ago (with the Outperform list)

I am watching the sector but don't have access to that info; so much appreciated.

re: Galleon Energy
fyi, significant recent buying by a private equity insider:

http://tinyurl.com/3u2a66

The question: Do you stay long until Thursday?

Took half of DGP off for break-even, letting the remainder ride to see if GLD retests 86

And businesses and individuals will keep pulling our money out of banks until they all come clean with exactly what they're holding.

This could have been much less painful if everyone would have come clean last fall when the Dow was at 14K. Back then insolvent institutions may have had a chance at raising capital and being trusted again.

Now, after hearing the story change from "this is contained" to "It's only hurting the weak players" to "if we don't do something we're all dead" and after seeing countless companies profess they don't need capital only to raise it time and time again at increasingly prohibitive rates, investors and banks don't trust each other.

Do any of you really think that using taxpayer money to buy select bad debts from select companies will restore confidence and trust?

If so explain how please.

Rob.

I'm staying long because I believe Congress will pass the Wall Street Bailout.

Besides I'm up on both positions I bought yesterday.

Rob.

Re: Bullion

Another $40 down day in gold and a surprising surge in the dollar. I guess this means they're selling more euros from the foreign exchange stabilization fund. Paulson's trombone strikes again.

I see be kiron's post today that TOG is "trade of a generation".

Is the basic trade long gold and short US Treasuries?

Is TBT the only way to get exposure to short treasuries?

Should be "by" kiron's post.

I just wonder if they are propping the USD today so that the FED can implement a major interest rate cut in the near future should Congress again reject the Paulson Plan. Sort of a Plan B preparation.

I've got a fair list of short ETFs, but does anybody know a website that tracks the ETFs?

gold , they aint making any more. oops, thats real estate, and that was a canard.

they are very happy to sell you all the gold you want up here. for dollars.

"Sort of a Plan B preparation."
Posted by: fireworks at September 30, 2008 3:19 PM

they should call it preparation B...

Stopped out of DGP earlier, didn't get a chance to post... A whopping $15 net on the whole trade. Oh well, it's a gain, I'll take it. I've either been selling too early recently, or it just seems like it. I should start a running tally to actually see if it's true...

2nd - I can't stop laughing. Don't do that.

DIA & SPY have done about a 50% retrace of yesterday's dump, QQQQ lagging.

weakest sectors seem to be XLB, XLU.

strongest IYR.

This may be about it, however they try to paint the tape into EOM/EOQ it's not going to look bullish.

Here's a line of thought:

Last week when it was announced that a "plan" was coming, the market catapulated (for Vadym). Then, after nothing over the weekend, and a whole lot more discussion, there seems to be a sense that no matter what they do we're.....hmmmm...let's see....it's escaping me...well, can't use the word I want to use, but it ends in "d." Anyway, I suppose it's contrary to Bill, but it'll be a sell the news rally.

2nd,
Good one!!
Pretty impressive rebound today with the end of the world coming so soon if Congress doesn't buy up the bad debt ASAP.

Rob.

Nemo,
That's an interesting angle. We rally until it passes in both houses then crash.

I could see anything happening after the past couple of weeks.

Rob.

Yeah, FL: Had they done this last week everybody would have been celebrating, now, I'm not sure anybody will know whether to laugh or cry.

QQQQ - close OCT 40 calls for nice daytrade

GLD - add small number of OCT 80 puts for overnight

John- so who sold yesterday? there were hundreds of thousands, if not millions, of investors who sold into the 777 pt drop only to watch it bounce 400 pts today- and if the same congressmen who voted Nay yesterday change sides and vote in Plan B and that takes the index up another thousand points, those investors will in fact be calling it that ;)

Mmmmmhhh...think the rumoured potential suspending or altering of mark to market has anything to do with the late spurt?

2nd - I didn't sell 9/29. I bought 200 CEG at 19. I'm still sitting on a bunch of calls and am long PM and down overall. No selling yet and no buying since the put prices keep running away from me.

10 day Average Trading Range for DJIA is now 380 pts.

GLD - nevermind on the puts, decided to exit

Back to square one in most positions (a la last friday). No firepower to buy yesterday, (although I did trade out of GG and into POT fortuitously.) Good lesson.

GOOG & BIDU -

Some very wild swing in the last few minutes. Any idea?

disclosure - long Goog

John- i like that-> "9/29" will be a date to remember, the day we got hit by political terrorists...

or is it political terriers?

Well, its up to the world's central banks to lower key interest rates.

Bernanke is reluctant to lower U.S. rates, because policy was set above bond rates and eventually bond rates came up. He might be anxious to see this through and wait for a recovery of interest rates to the policy rate. He may very well be obliged to cut rates yet again because the market is stubbornly high in treasuries.

Canada can lower its interest rates 50 - 75 basis points from its key interest rate:

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

http://www.bankofcanada.ca/en/monetary/target.html

I believe Swiss rates are similar.

In Europe, the bond yields are indicating a sizeable interest rate cut:

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

(click on 'Compare with all euro area central government bonds')

The key rate is 5%? I believe? That's a whopping 150 - 200 basis points that need to be cut. A part of the discussion after oil prices collapsed was that the key interest rate in Europe was set for 5% and had overshot, so we may see a change there.

UDN's at 26.94, anybets it will go below the 9/11 26.63? I'm long 10 UUP contracts. Can't bet against HB&B.

I don't know if my computer is freaking out but did anyone see the action in goog in the last minutes. I saw 440 and then 295 a few trades later. Now its back to 405.

Wow! Google lost $70 in five minutes? That is amazing. Someone needed cash fast.

I don't trust this rally.

GOOG - crazy - close is listed at 341.43 on Questrade, current aftermarket bid/ask is around 403, and the low of the day is 0.01 !

goog 341.43 on scottrade

"Last week when it was announced that a "plan" was coming, the market catapulated (for Vadym)."

Then it kaputilated - and don't tell me it's not how you spell capitulated.

"we're.....hmmmm...let's see....it's escaping me...well, can't use the word I want to use, but it ends in "d."

Lemme guess... "pleased"?

What do you think of my command of English NOW?? )very big grin)

"catapulated"

there you go, Vad...you invented the perfect word to describe the phenomenon of catapulting into capitulation...why do we see so many rockets fizzle and drop off a cliff, anyway?

Tiger. -

I had 485 on my screen before it flipped to the dark side. Could this be the mutual fund EOQ redemption at work? One theory of the rally is that Hedge fund is closing short positions for EOQ. If this it true, then will they begin shorting again tomorrow, at the start of a new quarter? Scary thought.

Keeping up with the Jones'... Financial Terrorists blow themselves up, killing many innocent bystanders. Are political terrorists preparing their own version of a truck bomb?

XLU weakest sector.

XLE closed below 64 fib, not bullish.

bought 2 each 68 & 69 Nov. IYR puts at the close.

Fransix,

Re: He (Bernanke) may very well be obliged to cut rates yet again because the market is stubbornly high in treasuries."

I'm curious how FED funds rates can be set lower if bonds sell off as predicted here:

Jesse's American Cafe has an article on the timing of the "trade of a generation".
http://jessescrossroadscafe.blogspot.com/

Am I just reading this wrong, and can lower FED funds rate co-exist with rising bond yields ?

FDIC just wants to keep the great unwashed masses from taking all their money out and putting it under a mattress where all it does it get eaten by bedbugs.

There are already many ways to get well over 100k coverage.

On Yahoo Finance, they're showing the closing price of GOOG at 341.43 and the afterhours price at 409.59.

It looks like something crazy happened in GOOG right at the end.

Rob.

I just came back to see what happened in the last hour of today's market. A little more deleveraging for my portfolio: a sell limit order was hit at $30 for USD shares I purchased at $28 yesterday (I still have some that I purchased at $32.70) and at $52 for QLD shares I purchased at $49.67 yesterday (I still have some that I purchased at $53.15). So right now only about 1/5 of my portfolio is on margin, and if another day like 9/29 takes place, I'll be buying again. :)

kaputilate - verb - synonymous with capitulate, except lacks totalitarian disbelief and is commonly caused by giant financial organizations running roughshod over market in attempt to blackmail congressional bailout. also see: "If you don't cater to our requests, we'll crater your economy."

"I've got a fair list of short ETFs, but does anybody know a website that tracks the ETFs?"

Nemo, I use etfconnect.com to get a lot of useful info. I don't know if this helps you or not.

Oh. A motive for today's OPM window dressing rally that also keeps the pressure on Congress to produce.

Uhhh . . . how does one "salvage" a "rescue plan"? stupid question, I know . . .

"Dow Soars Almost 500 Points- AP
Wall Street snapped back Tuesday after its biggest sell-off in years amid growing expectations that lawmakers will salvage a $700 billion rescue plan for the financial sector."

Reality does not apply to OPM window dressing:

"But the seized-up credit markets where businesses turn to raise money showed no sign of relief."

How about a synchronized rate cut?

"By Ben Dummett
Of DOW JONES NEWSWIRES

TORONTO (Dow Jones)--Toronto stocks ended higher, rallying from Monday's sell-off on the back of hope for a new U.S. financial bailout package and a synchronized rate cut by central banks."

I just got 7 0.0% credit card offers today.

It would seem that the credit markets are only seized up for insolvent companies or ,since we don't know what anyone's holding, companies no one trusts. That no trust list seems to get longer and longer the more we play this shell game of "Who's hiding the bad assets?"

Rob.

"If you don't cater to our requests, we'll crater your economy."

You're right on with that reasoning Chicken.

But I doubt they have the ability to crash the whole economy. They can just take out plenty of weak debt-dependent companies.

What about all these companies we were hearing about that had all this cash? Weren't general corporate cash holdings at record highs this summer?

Rob.

I got a call last night as well for a 0% card until next year, 30k limit.

Makes me start to think why not take out the full balance and throw in a tax free money market for 12 or 18 months?

Good article on the amount of metal being added to the ETF's. Love the Silver chart, but prices just are not reflecting the demand.

http://tinyurl.com/4ycrsh

Although I'm sure cash w/d's are not 0%.

French_Canuk, we saw a bond sell off in the long dated bonds just prior to the oil price collapse, we saw a long bond sell off, which was a preceding signal to changes in not only oil, but an array of commodities, the Brazilian Bovespa, the Real, and Asian markets, and we are at the same time into a major financial collapse.

What this caused was a flight into treasuries, we are seeing treasuries now peaking around the world, causing also the higher libor rates, and credit spread widening. Well, the cure is to lower key rates to follow up.

So it doesn't come as a surprise that the entire market was set up like an Enron energy trading scam, and you have resulting bankruptcies in some of the major brokerages, due to the vast amount of leverage in the oil market.

But the emphasis is in the press on housing, blaming the least capable of paying for upending Wall St.'s bid for dominance, which has now failed.

Schleppy,
Plenty are 0.0 for cash transfers too. The catch is they charge a 3% fee for taking the cash.

But, who knows, in this environment, with the president and the treasury secretary repeatedly begging for our money, maybe it makes sense to pay the fee and have the money.

Something to think about for sure tomorrow when I get more offers.

Rob.

Thanks Rob....I'll have to look at the details and crunch some numbers.

GOOG

No position .

REUTERS UPDATE 1-Nasdaq probing possibly "erroneous" Google trades [JCBMZMT]

(Adds Google spokesman, context)

NEW YORK, Sept 30 (Reuters) - The operator of the Nasdaq Stock Market said it was investigating "potentially erroneous transactions" involving shares of Google Inc , which appeared to plunge as low as 1 cent at the close of North American markets on Tuesday.

Nasdaq OMX Group's surveillance arm said in a statement: "Participants should review their trading activity for potentially erroneous trades and request adjudication."

A Google spokesman said the company declined to comment on the trading spike. Google shares closed at $341.43, down 10.4 percent.

Bethany Sherman, a Nasdaq spokeswoman, said the exchange was investigating trades that took place after 3:57 p.m. EST -- three minutes before close.

"We'll take a look at the trades and make a judgment as to whether there were erroneous trades," she told Reuters, adding it was too early to know whether trades would be broken.

MarketWatch, Nasdaq's surveillance arm, said in the statement it would "advise with details as soon as available."
(Reporting by Jonathan Spicer, additional reporting by Eric Auchard in San Francisco; Editing by Gary Hill)

Vadym:

I think your English is infected by German, mein Herr.

Thanks Ksobo

One of these times I'm going to catch CNQ.TO in the 60's on a plunge. I regret not being able to get at it yesterday. Just venting.

re: DGP trading
I finally made a decent move and sold DGP yesterday, bought it back at the close today which had the effect of lowering my cost basis $2/share. Nice way to play extreme moves either way. Haven't used her evil sister DZZ yet. Given the current events, I'm a little nervous holding a derivative of this nature for long periods. This link is to morningstar discussion re ETNs
http://tinyurl.com/3mbqqy
Good luck trading to all.
MCM

speaking of Vad, I think his working assumptions still work- they shuffled the deck a little and they played Act III (shakeout) ahead of Act II...we may not even get Act II-> it jumps to Act IV...maybe the investors who got shaken out never get the chance to buy on a pullback?

700 Billion Dollars
http://tinyurl.com/46ehuz

I came across this music video on youtube!

CP is in johnny cochran mode: "if they won't cater, we MUST crater"...(LOL)

"how does one "salvage" a "rescue plan"?"

they pay valets to slip red envelopes underneath the wiper blades of targeted vehicles upon retrieval...if they'd hired the right person to begin with, we could have skipped 9/29...

at some point yesterday, 2nd_ave posted this:

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

That was impressive execution of your plan. It's one thing to have a plan, it's another thing to pull the trigger when the world seems to be falling apart. Nice job.

David- someday you'll leave chips riding on the 6 and 8 to grab a hamburger, and when you return the stickman will hit your spot and ask the dealer to pay you for consecutive hits on both...you have the right karma...

Jay- thank you

Posted by 2nd_ave: "maybe the investors who got shaken out never get the chance to buy on a pullback?"

I surely would like to go up in straight line from here, with no pullbacks. :) However, I think your earlier statement today is more realistic:

"i can see them taking it down below 10000, but if you bought in the past two weeks, you've still made good entries..."

I do have a feeling, however, that we are close to the bottom, since frontline news are predicting a 7-7.5% unemployment and a negative GDP in the 4Q 2008 (which indicates that these forecasts are already priced in). So I'll start buying again if DOW drops to 10400, even though I still have some long positions on margin. And, of course, I have tight sell limit orders placed for all new positions I added since last Monday.

Trading My Chips - on GOOG,

Thanks for the info. My screen shows 15:59, closed 295.57 with 1.733 million shares. People are getting desperate here.

That's what 2nd the BOS does.
You gotta buy on a down 777 day, it's the law.
2nd does it with style and at 100%.

I was only in 60% but took bigger positions yesterday and today on some.
Long: CHSCP, DELL, GE, GG, MON, PGH, RIMM
ROM, SLW, TBT, TTM, XOM. Some BA in the IRA.

Rate Cuts & Bottom -

I am glad that overseas governments shoulder some responsibilities today. This I think is the single most important gain for not passing the "bailout" plan. I can't understand why they should "show" their "displeasure" of a failed vote and expect our Fed to do it all and all the time? Hopefully failure of Fortis will be a wake-up call for ECB. Perhaps it's foreign central banks' turn to bail us out. No?

Nov.23 1929 as printed in The Economist

http://tinyurl.com/487pcy

Thought you all might enjoy this.

nemo... my English is infected with more things than I care to list or you - to know... :)

2nd... I have difficulties simply adjusting old plan to new game, not sure it can be transformed with minor adjustments. See, everything was hinged on bailout plan being adopted within reasonable time. Now, even if it is approved in a day or two, there are singificant shifts that occured already - a lot of shares changed hands, a lot of emotions have played out, new intentions have been born... whole dynamics of the situation (short term of course) is different now. At this point I don't have enough observations collected to assemble new set of working assumptions.

On a side note... this market is like a candy store for a daytrader, so much plankton around... no single stop in two days, and some plays are so easy, it's almost scary. Anyone noticed yesterday that QID mercifully waited about whole minute after NAY was announced before going 2 bucks or so without slightest attempt to turn around? I mean, how often such obvious things work so flawlessly...

I am looking at the TOG hard now. Haven't tried to short bonds yet, but I think that the weakening of these will be an unintended consequence of the bailout.

craig- it almost has to be a law for one to execute correctly when emotions argue the other way...remember when they invented seat belts in the sixties-> buckling up didn't become second nature until it was legislated...of course, driving 65 still isn't second nature (LOL)...

Plankton=Candy??

Mixed metaphor? Guess we'll start having to call Vadym, ...whale...

board,

Ok, I give in....

I am seeking some advice on how to purchase gold... <-- Doh.
Went to APMEX website. How to start picking up some Gold.
I like the Canadian Maple coins... Not much supply there... only 1/10th oz but they seem to get you on cost to make them as 10 coins is significantly more than one oz spot.

Can anyone provide me some valuable ideas on how to purchase.... ? Entry would be 2-3k dollars.

thanks..

On a more serious note...Vadym's point about his scenario being based on an immediate bail out was kinda' my point in an earlier post. There's no euphoria about Lex Luthor (Paulson) coming in to save the day. There's been too much time to think about the pros and cons as well as the general sense that Congress will produce the most inefficient, ineffective and wasteful bill.

I think it's reasonable to theorize that today was the "Bill" rally-as in law (not el Queso Grande, oder Groesse Kaese). Tomorrow could go along a middling, range-bound continuum, until an act is passed, however, that'll just get it out of the House. Then the Senate has to do it's thing, then they have to reconcile the two, then it goes to George. I'm sure the time frame is compressed, but I'm wondering if the market will meander until it knows whether the vaccine with which it was inoculated is a cure, or...something not so efficacious.

Of course, there could be action in PMs. Well, now that I've exercised my ego, perhaps I should just shut up, and as Vadym says, (paraphrased of course)let the market tell me what it's going to do.

Geez....I hope Bill's not p.o.'ed at us???

nemo... plankton metaphor came from recently viewed Blue Planet where all whale had to do in plankton-rich waters was to open his mouth and move forward... :)

Now, whale may not be the most desirable image I'd apply to myself but since shark is taken, what is poor peasant to do... for a dolphin I am not playful enough

"On a side note... this market is like a candy store for a daytrader"

Vad, when I discovered the stock market, it changed my life. And my life will never be the same. I hear the call, I answer the bell, I am a PLAYER, and the world's different because of me.

Willy Sutton said something about robbing banks 'cause that's where the money is? That's true of the market today.

And 2nd, your use of gambling metaphores makes me think. I relate to your sentiment, but properly done, this 'aint gambling. Sure there's risk involved, but I liken that risk to the risk of tripping on your shoelace or getting hit by a car crossing the street or something. There is no house edge here. It's like the most magnificent casino in God or Nature's great design. Each game has not fixed but ever changing odds, and total beauty, the beauty of perfection, while unattainable, seems within our grasp.

norm,

For physical purchases I've used APMEX in the past and also California Numismatic Investments (www.golddealer.com). I do a mix between coins and certified 1 oz. bars. There are many other dealers and I'm sure others here will provide good perspectives. I try to put 1/5th of my savings into physical gold. Boring, but it's paid off so far, and I can't help but think it will continue to do so.

hmmm... why paraphrased, that's exactly how I say it... don't tell me I managed to garble even that simple sentence?? :)

I don't see the change in bailout saga as game-changer in regards to Bill's bullish call. The call (in my understanding, let me emphasize) may have been hinged on a bailout passage only in sense of fine timing. No bailout - more immediate downside, this kind of things. Overall however, my feeling is (Bill will correct me if he sees things differently), market is ready and willing to reverse to the upside with this bailout, with some other plan, or, eventually and with more difficulties, even without plan at all. Precise timing, depth of initial downside and exact mechanics of bottoming out and reversal may change, the idea stands.

If I had stop on all my position they would have clean me out of all my stocks
And I would have lost big.
And will have to pay more to buy same position this morning
Lesson learns is never to put a stop (like Bill has said mental stop is good)

Beard:

Whale is also a casino term for the REALLY big players. Regarding my "paraphrase" comment. I'm on my third drink, and my memory isn't what it used to be.

Sharky: whaddya' lookin' at in the morrow?

vinod,

I think all the trading books that talk about stocks give prudent, responsible advice--for "normal" markets.

Today, with the blowing up of hedge funds, extreme volatility, etc. you can be absolutely correct in timing and still take an initial hit ... and then things move "your way." I've switched to mental stops and it has made a difference.

2nd
any change in your position?
aded BONT 200@2.80
and 200 su@39.40

should say 2000 BONT

""In essence, the SEC wants to stop the avalanche of declining prices," said Tom Sowanick, chief investment officer at Clearbrook Financial. Sowanick said that the new guidance should allow banks to rely more on their own assumptions when they determine fair value rather than the distressed sale prices occurring in the markets."

Mmmmmmh...banks allowed to rely on their own assumptions...wasn't that what got us in the soup in the first place?????

nemo- to be fair to Vad, whale applies to really big players who don't win...whereas I believe Vad plays smaller but consistently wins; and the casinos have another term for that ;)

if your memory isn't what it used to be, how do you know it isn't what it used to be...

Vad,

Found this tidbit in a story about the Senate version of the "rescue package" being voted on tomorrow.

It will include this:

"Tax breaks for businesses and alternative energy, part of a package that has been caught in a stalemate in the House of Representatives. The Senate version of the gridlocked tax legislation would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources...."

This may explain the recent activity in VLNC, ALTI, etc.

Regards

Don't I know it 2nd....I have to use cruise.
Had to buckle up yesterday! Like a whacky ride in the wayback machine.

Glad to go back to pick up more bargains. I think we get more chances as more failures and numbers come in. Earnings.....

vinod- not right now...if i were still day trading, i would have taken it all off today, of course...but i think there's more money to be made in holding at this point...

"I think all the trading books that talk about stocks give prudent, responsible advice--for "normal" markets."

i would extend that to include "past markets;" both trading and traders have become more sophisticated, and given the fact professional traders have read/are still reading the same books we do, they will use that against you...anything that 'works'/worked will cease working when everyone's 'working' it...

if taking the market down 800 points was maximum frustration on monday, then taking it up 1200 points on Plan B (on top of 500 points today) might be maximum frustration now, no? that would absolutely close the door on buyers until next week, when the smart money begins selling into panic buying...

Vinod - Bont bv 16.81, rev per share 202.42, are you looking for a buyout or just any move up?

2nd,

"that would absolutely close the door on buyers until next week, when the smart money begins selling into panic buying..."

Can you clarifiy, i can't seem to grasp your statement... could be the wine.

the beauty of going long now is you're taking positions after the fall, and (IMO) any downside is unlikely to have much of an effect on you...the average investor is down 30-40%, so if the market takes another 20% hit, well then you're down 20% but they're down 50-60%, which becomes a life-altering event for most people and we'll have more important concerns than just being down 20%...that really is the basis of having the 'guts' to be all-in at this point...

2nd_ave

I hope you are right on the +1200 max frustration move. I guess we will see if it will work out tomorrow.

Disclosure: 100% in equity since LAST FRIDAY. Talking about missing the boat :(

RE Goog, price action at close

I noticed the same thing and checked the Nasdaq site right after the close. Looking at the NLS sale history it seemed to start about 3 min before the close, sales jumping between 200 & 300 as if there was a 100 spread in the bid ask.

I just checked again now and I see an "X" next to most of those trades now, although trades around 350 seem to be standing. Perhaps they have busted any trades that were outside of 10% when this started. This looks like a real mess, with some big winners and losers on both sides, just depends on whether your trade was busted. Some will wish it was and others wish it wasn't.

I'm sure many got nailed by using a hard stop, but when you gotta work not much other choice. I'm sure there will be a press release in the morning to let us know what happened.

Quasi

norm- if the market always frustrates the majority of timers, then i think many of them got taken out monday...today it goes up 500, and aside from being a little upset, they probably go to bed satisfied that another sell-off will ultimately validate their decision to sell...maximum frustration then becomes a 1200 point rally which allows them no chance of re-establishing their positions until they can't stand it anymore-> that's when you sell...

of course, i always have to consider the other side, which is that I'm in the crowd, and i'm about to see a 1500+ point drop...but as i pointed out above, that would hand me a 15% loss, but extend losses for the 'average' investor to 50%, and if we're grading on a curve, i'm not that concerned...

Quasi,

"SEATTLE (AP) — The last-minute pounding Wall Street gave Google's shares was caused by "erroneous orders" that Nasdaq says it is canceling.

Minutes before the closing bell Tuesday, a flurry of trades sent the Web search leader's stock plummeting 10 percent to close at $341.43.

Nasdaq said in a statement that erroneous orders routed to Nasdaq from another market center were responsible for the high volume of trades.

The exchange raised Google's closing price to $400.52 — a 5 percent gain for the day — and canceled all trades below that amount and above $425.29 between 3:57 p.m. and 4:02 p.m. EDT."

Regards

Hulbert: Tuesday was a "90% up day"

http://tinyurl.com/45jt7p

while bullish, it does not in and of itself mean we go up...even if we do, note the expectation that bottoms will be tested, often more than once..

Babybear- if you went long last friday, you're actually sitting in the front row of the boat, my friend...

BH re Goog

Thanks for the info, nice to see they unwound the bad trades, on bad data. I've seen times when they just let em stand. Some people will be ticked off, some will be happy, but I think they've done the right (fare) thing.

Quasi

nemo,

Same as you guys, I'm looking for a rally now that the Senate will provide some leadership on the bailout, Caught some nice moves today and will be looking at ABK,FRE,FNM,MS,WB,DSL to potentially benefit. One of em ought to go up...It's just a matter of finding which one.

Did see the SOV thing you referenced earlier. Turned into a heartbreaker for most of the buyers. But that's the stocks game.

"David- someday you'll leave chips riding on the 6 and 8 to grab a hamburger, and when you return the stickman will hit your spot and ask the dealer to pay you for consecutive hits on both...you have the right karma..."

Thank you for the kind wishes, 2nd_ave... I hope the market will finally take a note of my karma :), as my portfolio is currently up only 5% over where it was exactly a year ago. And since 10-14% daily moves in my portfolio have been recorded recently, I guess I am statistically at the same point as I was a year ago.

Wow all this positive sentiment makes me want to short the open tomorrow. Although most of you were level headed last night the tone was much more negative. maybe i have come up with a contrarian indicator here.

Martin Feldstein on Charlile Rose said the reverse auction won’t work in pricing the trash securities, says also that the modified-Paulson plan won’t solve the basic problem: rising defaults on mortgages, foreclosures, and declining housing prices.

Following Jeremy Grantham, he believes house prices way overshot on the upside, and could now overshoot big-time on the downside. He believes the downturn could last over 5 years.

10M mortgage holders have negative equity, 5M owe >20% more than their equity in the house. If we wait another 6 months to act in this area, we may have 20M mortgages where holders have negative equity, and the temptation to default will grow. He is in favor of a gov’t low interest loan to all homeowners who are underwater on their mortgage. Only this will stop the growing flood of defaults, and the price slide, he believes.

Yet another distinguished economist who is against the Paulson plan, and believes it won’t work. But, sadly there’s no time to develop an alternative. So, our kids and grandkids will pay for the lack of forward planning !)

“In all the time I have watched the economy, I have never seen anything as frightening as this.”

Next, Mort Zuckerman also spoke against the Paulson plan. He believes that Treasury will almost certainly overpay for the trash, which will put the taxpayers deep in the hole, but also saw danger in their underpaying, since this further weakens the banks’ balance sheets.

He thinks the plan is deeply flawed, and actions taken now will reduce political support for actions required over the next couple of years.

He sees many corporations going out of business. He thinks effects are only starting to be felt on Main St, which will cycle back for a second round of damage for Wall St. He sees the pain going on at least 3-5 years.

He wants to structure the plan so that it does not create a huge political backlash to Wall St’s $62 Billion in bonuses in 2006. He believes that because Wall St’s execs and shareholders made out so shockingly well on the way up, that they must pay on the way down. He is also advocating that the gov’t follow Buffett’s model with GS, rather than Paulson's plan.

Mort seemed more upset and worried than Feldstein did. Unlike Feldstein, he doesn’t believe there is any way to stop housing prices from falling a LOT more over a several year period.

I asked myself: How can this situation NOT result in a $2K to $4k/oz gold price at some point?

thoughts on goldminers vrs. the metal ...

I read today there was some doubt about TCK's ability to raise financing to close the acquisition of FDG. And the credit contraction is ONLY beginning!

When the gold price takes off, how will even established miners raise financing to expand production (not to mention juniors)?

Doesn't this drive us to bullion rather than the miners? Global deleveraging is likely to continue big-time for several years. During this time, if everyone realizes credit is super-tight, and mining remains a risky business, won't bullion out-perform gold stocks?

Reactions?

more re gold: Maybe sovereign wealth funds will after a point offer buffett-like usurious convertible financing to senior gold producers, and thus obtain the multiple upon seniors' "ounces in the ground" as the gold price rockets up, and new production is made possible.

But, the resulting dilution wouldn't do US caristas any good.

Late night musings, no more than that ....

Various proactive alternative action plans to "save the world's bacon" and avoid a now visible just-over-the-next-hill "Greater Depression" are surfacing.

This from an EU-sponsored think tank, who have previously, if I recall correctly, predicted that the USofA would at some point have to be put under conservatorship.

(I do not subscribe to their service.)

http://www.leap2020.eu

The decisive six months to avoid a global recession: Five strategic advices for central banks, governments and other regulatory authorities

A. Two measures must be implemented urgently as early as this summer 2008
1. Raising interest rates before the end of 2008 in order to curb soaring «globalflation”
2. Enforcing a transparency plan on CDS and other OTCs

B. Two measures must be launched in the second semester of 2008
3. Launching a political plan of global recovery of 5,000-billion euro over five years of infrastructure construction projects financed by public loan
4. Creating a currency basket to determine the price of energy (oil in particular)

C. A general stampede in case the two first measures are not implemented by the end of summer 2008
5. Emergency rescue of each region that can be rescued when the global financial system collapses

Here is a US-local financial action plan, more short-term, as an alternative to Paulson's:

http://www.itulip.com

No Time for Utopian Anti-Interventionism

King Report Bailout Plan

(too long too copy here)

Somewhere I recall reading that as the normal sources of income for the trading desks have been drying up, they have been increasing the volatility to provide extra income that way.

Another way of viewing this situation just occured to me. That is that as the sharks have finally eaten all the other fish in the ocean, they are now turning on each other, producing some magnificent churning, though with no productive result, other than the gradual reduction of the number of sharks.

Posted by Jock: "Doesn't this drive us to bullion rather than the miners? Global deleveraging is likely to continue big-time for several years. During this time, if everyone realizes credit is super-tight, and mining remains a risky business, won't bullion out-perform gold stocks?"

Jock, don't forget that a rising tide lifts all boats, and if the new bull market in equities starts soon, then the miners should do ESPECIALLY well, since they will also be driven up by the rising gold price.

I think it depends which commodity the miner is exposed to that will determine how easily they can raise cash or finance their next acquisition. But many of the gold sector giants have cash burning a hole in their pocket and vast lines of credit already set up.

Many gold miners have already cashed up and added to lines of credit. Just go through the news releases of AEM or KGC. ABX recently raised $1.2b through offerings with no problem. GG has no debt and the same amount in cash, and will probably move on properties in Red Lake, as they are showing more and more promise. Certainly Premier and Rubicon appear to be next in line.

Earnings will look great on some of these companies into the new year, but perhaps not compared with the last quarter.

Some of the gold juniors are flush with cash and some aren't. In the mid-tier, many have proclaimed their intention to do some serious buyouts with very strong cash positions. ARU got taken out at what is considered to be fire sale prices, and that was one of the best properties in the exploration sector. ELD bought out Pioneer.

I surmise that former mines cast off by the majors and closed in the last downturn in 1997 will probably get a serious review. Just about every leader in the gold junior sector in Ontario that were formerly mines with Placer Dome, or Goldcorp are in that situation. The Timmins and Abitibi greenstone belts have certainly been the focus of market speculation as a portion of junior miners' floats were bought out. AEM moved to buy a portion of Comaplex recently. Goldcorp bought out Gold Eagle in Red Lake.

Barrick could certainly move in and buy out NovaGold in a pinch for far less than they offered last year and may find that developing Donlin Creek will run into fewer hurdles than Pascua Lama. The recent referendum on more restrictive mining laws in Alaska was brought down, which also positively affects any developer in that state.

Quick discussion Goldcorp and Red Lake here:

National Post

http://tinyurl.com/3wg9wt

ALOHA !!

ON ROSENBERG
This is indeed a man on a mission ... Perhaps Bank America would be wise to get rid of him before he turns them into another MER!

To say that inflation is dead because of 1993 and monetary velocity is foolish. First velocity does not cause anything related to deflation or inflation. It is simply a reaction to either the increase or decrease of money supply which ultimately either causes price levels to rise or decline, which speaks more to value or quality of money in circulation. If you perceive the money you hold is of pour quality then you trade it for something you perceive is of greater quality and value.

The introduction of the measure known as "monetary velocity" speaks to the main missing ingredient of fiat today. Fiat has demonstrated to me that it is not a credible "long term store of value", which is what honest money should be.

Usually what I see on velocity from mainstream media is the formula GDP/M1 ... What? Man ... whose GDP measure and deflator do you use? Then M1 isn't even total money supply! Then which definition of "money" do you use to define "money supply"? Opinions abound!

Austrian economics view of velocity is ...

"Increased velocity of circulation is not, in itself, even a contributing cause of higher commodity prices. It is not even a link in the chain of causation. Increased velocity of circulation and higher commodity prices are joint results of a change in the value of money in relation to the value of goods. When people value money less in relation to goods, they offer more money for goods; when they value it more in relation to goods, they offer less money for goods. Any change in velocity of circulation is likely to be a result of these changed value decisions: it is not itself a cause of the change in value. The value of money does not decline because its velocity of circulation has increased, though the velocity of circulation may increase, when it does so, because the value of money in relation to goods has declined."

Henry Hazlitt

Okay Rosie ... while declining land prices have never caused inflation(I disagree in some instances)so too WARS have never caused deflation!(Besides not all land prices are decreasing. As I have pointed out farm land is increasing in price.)The WAR ON TERROR is approaching the cost of WW2 and has already surpassed the cost of Vietnam and there is no end in sight to any reduction in US military forces overseas(134 bases worldwide). WARS AND POLICING THE WORLD ARE HIGHLY INFLATIONARY! Now China and Russia are entering COLD WAR 2! The Russians are in Venezuela now ... When will Wall Street and the Rosies ever acknowledge the effects of the multi-front WARS we are now facing? Its good for LMT but it does nothing to improve the dollar or US debt outlook. Even all our EU allies see the folly in pumping trillions into the WAR ON TERROR and have long ago pulled out. Which of our allies are left ... Fiji?

Two choices are all the US FED has ever had since its creation in 1913. INFLATE or NOT INFLATE. Historically speaking what has the FED done? Rosie, if deflation is the way of the future then you are FIGHTING THE FED, because the FED has always chosen INFLATION over DEFLATION during my lifetime. Otherwise I could still buy a new home for $1,800! You also fight against the ego of the GANG OF 535 and those guys will never allow a depression on THEIR WATCH! Even Helicopter Ben leans more to inflationary policy. Even BUSH dropped free money onto US TAXPAYERS a couple months ago and he is talking about doing it again!

You guys the INFLATION was baked into this CAKE long before most of us here were born! Instead of being fixated on the inflation vs deflation debate I would key in on the purchasing power of a US DOLLAR and why it is being destroyed along with the rest of FIAT WORLD! It's a global race to debase!

Its all about the "C WORD"!

I do not trust those in POWER ... They just threw $1.25 tril into the inflationary fires last week. They are banging on our doors trying to BUY ALL THE BAD DEBT ... How is that deflationary? At the rate of $1.25tril per week they could inflate $15tril by Christmas with 12 mouse clicks!

There is no end to the SPIN and LIES about money. There are so many versions of monetary and economic components like M3 and CPI and GDP and U6 ... Why is that? Why is it so confusing and why isn't there any standard economic measures that everyone agrees on like there is in Chemistry and Biology and Physics? The reasons are obvious to me ... They're the SELL SIDE!

QUESTION AUTHORITY!

Wealthy Buying Gold in Unprecedented Amounts Creating Shortages - Financial Times

http://jessescrossroadscafe.blogspot.com/

Investors in gold are demanding “unprecedented” amounts of bullion bars and coins and moving them into their own vaults as fears about the health of the global financial system deepen.

Industry executives and bankers at the London Bullion Market Association annual meeting said the extent of the move into physical gold was unseen and driven by the very rich.

“There is an enormous pick-up in investment demand. I have never seen a market like this in my 33-year career,” said Jeremy Charles, chairman of the LBMA. “The gold refineries cannot produce enough bars.”

Specialists' Moves Monday May Have Staved Off Bigger Market Fall

http://tinyurl.com/4u778y

Proponents of open-outcry trading say that specialist market makers on the New York Stock Exchange, faced with a flood of selling orders late Monday, took the buy side or aggressively solicited for buyers on several large financial companies that were selling off. By assuming the role of buyers or soliciting them, these specialists may have helped limit losses at the bell.

. . .

Going into the 4 p.m. close, brokers on the NYSE floor say specialists published huge sell imbalances in many financial names, but were actively looking to find buyers. Specialists surveyed their books to find brokers that had purchased the financials on their books at certain levels in the past and went asking again.

. . .

"A lot of [specialists] went home way more long than they usually do. It's not what they like to do, but there was a buyers' strike towards the close," said Ray Pellecchia, a spokesman for the NYSE.

The carry-trade country bans short selling for all stocks.

There goes liquidity in Taiwan.

http://tinyurl.com/4cyufr

Seems to indicate that the Oct 2 expiry date set by the SEC will be extended 10 days to match the Oct 14 expiry in Taiwan?

Awaiting bans on sales of stock...

Jock, I think most mining companies have absolutely sworn off dilution because investors will immediately and permanently dump and run. I certainly avoid like the plauge any company I think might have any chance of needing financing.

Also, that spike to $1000 showed us the cards, in that when the price of gold goes way up because governments will either nationalize or change the rules somehow to take the expected profits away, like they started doing when it jumped. This will be very negative for most mining stocks because most of them have some international exposure.

Kaimu,

I admire your posts.

Thanks.

Helene Meisler on Street.com sez the market hasn't moved in the same direction for more than 3 days. Also sez best we can expect is a choppy market.

GOOG

REUTERS UPDATE 2-Nasdaq to cancel some late trades in Google shares [JCBNTFQ]

(Updates with canceled trades, Google's closing price)

By Jonathan Spicer

NEW YORK, Sept 30 (Reuters) - The Nasdaq Stock Market said
it will cancel some of the late trades in Google Inc ,
whose shares appeared to plunge as low as 1 cent at the close
of North American markets on Tuesday.

A spokeswoman for exchange parent Nasdaq OMX Group
told Reuters in an email the "erroneous orders" that caused the
abrupt plunge "were triggered by orders routed from another
exchange."

She did not say which exchange routed the trade orders, but
added the decision to cancel trades cannot be appealed.

Transactions at or above $425.29 and at or below $400.52,
that were executed between 3:57 p.m. and 4:02 p.m. EST, would
be wiped out, Nasdaq said.

The exchange set Google's closing price at $400.52, up 5.12
percent.

Re: Gold Junior Buyouts

The whole challenge for larger companies buying smaller gold companies, is that you have to have a prospect for growth in the very long term. You have to be able to say without much trouble that the mine will last another 10-20 years.

If you are a major gold miner seeking a smaller buyout, there are very few options in the junior sector, because all of the celebrated larger deposits are low grade, high cost mines requiring large capital startup costs. Much of the rest are moderate grade mines at great depth, which may or may not have the mine life you're looking for. Red Lake deposits tend to be at 1000m. depth requiring major construction just to get a bulk sample at the ore face.

No gold company in their right mind will buy into a tarbaby that will be the mistake that drags them eventually to bankruptcy. The fly in the ointment is that discoveries are very few, and many gold companies are based on deposits that have been known for at least 20 years. You have to keep in mind 'nothing new in the gold sector.'

The reason why gold mining has become so cost ineffective is that the larger mines tend to be copper/gold porphyry, and the price of copper is off by a large percentage. If copper decides to drop and the $U.S. is in decline at the same time, then its a double whammy on earnings, and your costs rise.

Even if you have a solid grade, your mine may go to depth, which has its own cost scenario.

So what companies will be looking for is high grade near surface deposits which go to depth and can produce gold for at least the next 10 years.

re:Helene

correction. The mkts haven't moved in the same direction for more than 3 days since May.

Jock....TCK.B

ANDY HOFFMAN
00:00 EST Tuesday, Sep 30, 2008

Amid the chaotic credit markets, Teck Cominco Ltd. said it secured $9.8-billion (U.S.) in debt financing to help fund its takeover bid for Fording Canadian Coal Trust.

The financing, which consisted of a $4-billion term loan and $5.81-billion bridge loan, is expected to be finalized today after shareholders vote on the $14-billion cash-and-stock offer at a meeting in Calgary.

Terms of the debt facility were unchanged from the rates set in the original lending agreement, said Teck's head of investor relations, Greg Waller.

Last week, Fording said it received all required regulatory approvals for the transaction. The deal is expected to close at the end of October.

The Globe and Mail

Long TCK.B ...looking to add more.)

2nd: What usually happens with these deals is we rally into the vote and sell the news. Of course you have to be set-up for either possibility and wait to see....

The trader in me is conflicted. HAD to buy down 777, HAD to sell SOME on the rebound yesterday. I want to go long(er) but it's hard to ignore the swing trades in this environment. The XOM trade has been fun with well defined ranges.

I have been debating (with myself) about whether to buy gold bars and have concluded that it is not a good idea.

There are several reasons. The primary reason is that in a financial crisis governments must and will intervene to prevent gold from undermining fiat currencies. Because currencies are no longer backed by gold they really no longer have no intrinsic relationship to fiat money. Instead, it is a relationship that is extrinsic. It is a reationship that is established only by the various exchanges on which gold is traded.

Thus, the only reason that I know that gold has a value today of say $870/oz. is because of the existence of organized exchanges that establish its value from minute to minute. And most importantly, the only reason that I would be willing to own gold is because of the fact that its market value is continuously established in this manner. Governments have been willing to allow gold to be valued in this manner because it has served their interests. There is no other way they would have been able to sell the gold in their vaults to the public.

But in a financial crisis, such as the one that is about to overtake the world it will not remain in their interest of governemts for gold to have an easily established market. Why would they allow the value of their currencies to be undermined by gold's value?

Were they to choose to eliminate gold as a competing currency, the most efficient way to do so is to ban trading in gold on organized exchanges. If the most governments were to do that, well, the public would still have all those bars of gold purchased over the years, but no way to know their market value. Without a market, gold would become similar to the asset backed (toxic) paper that the banks and many others own. There would be no rational way to establish market value. So if someone took a ten oz. bar of gold to Walmart to buy a flat screen TV set and Walmart offered to value the gold at $1.00/oz., does gold have a different value? If so, how does one determine that value?

My view of gold is that in a financial crisis it will not be the panacea.

craig- if it was easy, it wouldn't be trading, and it wouldn't be any fun...

LOL! Oh, you mean like establishing the value of paper? Lessmore, you need to read the Hemingway story Bill attached two morning's ago.

How were they establishing value to worthless peices of paper?

There WILL be an exchange rate for whatever we use, beads, wampum, tobacco, sea shells or something truly rare and valuable used as currency for centuries. Like gold.
It's the actual exchange of goods that will determine value.

ELRA - Question for junior miner experts, is anyone holding Elray and is there an expected pop there? From what I'm hearing there's more upside to yesterday's gains....

Oh, I don't know 2nd....the prospect of easy money can be fun! But...we do love a challenge, right?
LOL!

re: European banks
Jesse's Cafe Americain has a short summary of the leverage being used in European banks. It is as bad or worse than in North America. It goes a long way to explaining why there are provisions in the bail out bill to buy troubled assets from foreign banks.
http://jessescrossroadscafe.blogspot.com/

ELRA is not a gold miner. It has base metals.

From Now And Futures.com:

8:41 PM PT - GS is now net long gold on the TOCOM.

http://blog.nowandfutures.com/index.html

i received this (bulk) email from my congressman this morning:

U.S. CONGRESSIONAL CANDIDATE GREG CONLON BELIEVES THAT THE COUNTRY SUFFERED MORE THAN A $700 BILLION LOSS YESTERDAY DUE TO CONGRESS’S FAILURE TO PASS THE $700 BILLION “BAILOUT BILL” INTENDED TO SOLVE THE CURRENT FINANCIAL PROBLEMS FACING AVERAGE AMERICANS.

Conlon is the Republican candidate for U.S. Congress in the 12th Congressional District, representing central and northern San Mateo County and the southwest part of the City of San Francisco.

He believes that as a result of the non-passage of the so-called “bailout bill”, rank and file American investors lost more than $700 billion in wealth that was intended to be used for their retirement. The average American worker has substantial stock investments in their pension or 401-K retirement funds. The loss in the value of these investments from yesterday’s 777 point decline in the Dow Jones Industrial Average had to be in the range of $700 billion, Conlon says, the largest one-day decrease in wealth in U.S. history.

“The need to pass this bill is not to bail out the Wall Street magnates or ‘fat cats’, but rather to address a three-fold problem,” Conlon says. He believes the proposed economic rescue plan that was before Congress was intended to: (1) save pensions and savings of all Americans, (2) restore confidence to the American consumer, and (3) provide reasonable credit to improve their economic situation.

Conlon understands that many Americans believe the decline in stock value is justified punishment for companies that engaged in abusive sub-prime lending practices. In reality, however, the stock decline also punishes the average worker by decreasing the value of their pension and investment plans needed to fund their retirement.

Conlon believes the current economic crisis is also destroying the confidence of average Americans in their ability to secure credit to buy a home, whether that is a first-time purchase by a young family, or the purchase of a larger house by an expanding family. Home purchases are made more difficult because of a lack of liquidity in our financial systems. When lenders make mortgage loans they typically sell the loans to investors at a profit and then use the proceeds of the sale to make additional loans. Right now the ability to sell mortgage loans is limited which is making it difficult for consumers to obtain loans at reasonable interest rates. The so called “bail out bill” is an attempt to inject liquidity into the credit markets and get them working again.

According to Conlon, the lack of availability of money is creating a lack of confidence among potential buyers of real estate and large consumer products which will further worsen the present economy to a point where jobs and businesses will be lost. This could result in a deep recession or possible depression from negative growth in the Gross Domestic Product.

Conlon believes Congress needs to pass an economic rescue bill this week with support by both parties.

According to Conlon, the Speaker of the House must weigh her words carefully as she tries to get bipartisan support for the bill developed by some of the best economic minds in the country in an attempt to solve this three-fold problem. “Pointing fingers at others for causing the problem is not what this country needs right now. We must move forward to overcome the lack of confidence and lack of available credit for the average workers on ‘Main Street’ who are trying to better their lot or trying to save for their retirement,” Conlon says. “Getting the bill passed quickly is also necessary to get the economy moving, preserve the job market, and prevent excessive unemployment.”

CONTACT INFORMATION:

Greg Conlon for Congress
875 Mahler Road, Room 250
Burlingame, CA 94010
Tel. No.: (650) 637-8202
E-mail: gregconlonforcongress@yahoo.com
Website: gregconlonforcongress.com

Greg Conlon Campaign Committee
875 Mahler Road, Suite 250
Burlingame, California 94010
United States

Need a rescue? Lower rates.

make that congressional 'candidate' Conlon...

Jeff,

I can't imagine why you haven't heard from Bill:

http://tinyurl.com/3wjt7v

Regards

From Tradingmarkets.com

"Sep 30, 2008 -- Elray Resources, Inc. (OTCBB: ELRA), a technically driven gold and precious mineral exploration company, is pleased to provide an overview of the Senator Project, located in a mineral-rich region of Cambodia."

Novagold - "Nova - Sep 30, 2008 -- NovaGold Resources Inc. (AMEX: NG | Quote | Chart | News | PowerRating) today released a project update with additional drill results from the 2008 Donlin Creek drill programs.Full assays are still pending from additional drilling from this season's program. "These additional drill results continue to demonstrate that Donlin is truly one of the world's largest gold deposits with considerable potential to expand known resources," said Rick Van"

http://tinyurl.com/4rxdgt

Craig,

I am not sure we disagree.

There may be attempts to determine gold's value, but if gold is barred from being traded on an exchange how would that be done. Does one attempt to sell it on a kiosk in some mall along with "beads, wampum, tobacco, (and) sea shells"? Or, does one try to negotiate its value in a store at the point of purchase? My point is simply that if gold is banned from being traded on an organized exchange and the public is forced to sell it in some other manner it will not be a panacea. It will be something that for which it is very difficult to establish a market value.

"Oct. 1 (Bloomberg) -- The U.S. Senate set a vote for tonight on a $700 billion financial-rescue plan, tying it to an increase in bank-deposit-insurance limits and tax breaks to win support from Republicans. [...] along with the measure temporarily raising the limit on federal deposit insurance to $250,000 from $100,000.

Also linked to the legislation is a two-year extension of tax breaks that will save individuals and corporations about $149 billion over the next decade"

I don't understand, is this what they came up with? How is this much different from the Wall St bailout plan that nobody on the street wants? Hows does this guarantee that these $700B won't go down the drain and that $10T or $100T won't be needed?

On a goo-goo-googly Day

re: Biil, bailout, GOOG, and trusting and reality

My yesterday in this order:

Bill's computer glitches still kept him sidelined.
Bailout still being hyped, poorly explained, and a mystery to most citizens.
Google in bipolar mode?
Jeff on "Fast Money" says, "That's what happens when you trust a machine."

What Bill is experiencing we've all seen when a clerk can't simply take your cash, your doctor can't make an appointment or some other digital freeze puts life on hold.

Black Swan, by Nassim Taleb is one of my favorite books illustrating the folly we human's are prone to. Last night I read his essay, The Fourth Quadrant: A Map of the Limits of Statistics.

Rather than read the excessively long bailout bill (like any of them will), if congress would just read this essay (heavy sigh).

For traders the trust problem may not as acute as for investors, but "being naked in the market" to me means no stops, a heavy volume day and not being able to phone, email or trade in any way. It happened in Oct 1987, and just recently to a great number of trusting people.

"That's what happens when you trust a machine."

http://www.edge.org/#taleb

(This would not tiny for me — kind of poetic proof of this post:-)

_

Good morning.

Only one Cara 100 Change to report:

NUE - Target Price Lowered from $72 to $65 @ Longbow

Well, you know some Americans are stocking gold in foreign safety deposit boxes. But if they ban gold trading, you may as well arrest just about every rich person in the country, because without a doubt many have already piled into the market.

Placing a prohibition on gold will almost certainly guarantee its value in other countries, and boost its global value.

Reducing restrictions and taxes on bullion is the best course of action, because then gold can do its work by soaking up vast excesses of liquidity, much like the bond markets are doing.

Pappdjavul - specialsts at NYSE

They did keep functioning on Monday, but in 1987, they kept up until they couldn't take the pain, and then stopped bidding. In an '87-scale crash, would they still function?

Fransix - thnx for your post on juniors

As events unfold, you seem righter and righter! As seniors get more risk-averse, and juniors'stock prices decline, the seniors can simply bid less and less. Perhaps this is what went on with Aurelian.

Conlon has scratched the surface, hopefully with a little more deep thinking he will understand the situation much better. How many times will we have to go through this "give HB&B more money" to realize everything they've been given so far has only been soaked up, and not placed into the credit market? Stop giving money to the banks with questionable dirty balance sheets and provide support only to banks with clean sheets.

Oh, and while you're at it, make the market a level playing field where disclosure and transparency are industry standard.

I thought they wanted to get it right... Sheesh, how difficult can this be, folks?

FranSix,

The trading ban I fear would not be just in the US but in the G7 or G8 countries and their allies.

Grym - Short addresses don't need to be tiny'd, it's the long one's that screw up screen width and cause us to have to scroll back and forth. ;)

Tck.b(toronto)

BMO rating change to Underperform from Market perform Target reduced from 45.00 to 30.00

cco-t
Desjardins raises rating from hold to Buy.Target price reduced from $34.20 to 29.95

FranSix,

"Reducing restrictions and taxes on bullion is the best course of action, because then gold can do its work by soaking up vast excesses of liquidity, much like the bond markets are doing."

That seems to be contrary to everything that the governments of the world are doing. They are flooding the world with liquidity. It does not appear to be in their interest to allow all that liquidity to be drained even though it may serve the interests of some.

Another "opportunity" to buy GE today? Down 7.45%

I should have dumped this one -15% ago.

"The cost to protect GE Capital debt for five years increased 64 basis points to the very high level of 626 basis points, Reuters reports."

Methinks I will be leaving this one today. Any option strategies that I could use to offset decline?

Financial Times major headlines "above the fold":

Crisis Deepens Despite Rally

"We are watching the disintegration of the financial system" - Martin Wolf

Demand surges for gold you can hold

People, the FT is not given to exxageration or hyperbole!

ELRA - Heading back to $1.00, stay away! Not looking too good!

Lessmore and all Caraistas:
Okay, we're having this discussion about how gold will be valued, which if you think about it will be established like about anything else we value, likely agreed to and spread by word of mouth, like we know the price of milk. If there is no media or press then it becomes an issue.

I have a related question/observation. We are in an established credit crunch. THINK about the consequences of not having credit and what form of exchange will be employed....cash. Remember Y2K and all the hoopla about CC's not working, computer shut downs, etc? Remember how the Treasury/Fed flooded the system with paper money (and other forms) to ensure the system would remain liquid (and to rescue the crashing economy)?

If we continue in a credit crunch won't they be forced to pump the system with plenty of cash?

For any interested in gold miners, check out Modern Marvels. They did a great show on gold mining.

Wow. Mr. Bad Market.

Canadian Oil & Gas Juniors

REUTERS UPDATE

Sept 30 (Reuters) - Dundee securities began coverage of
nine Canadian junior and intermediate oil and natural gas
companies, saying the time was ripe to buy into them as their
stocks were trading at discounts to the commodities.

"We believe investors with a 12-month horizon will be
rewarded," analyst Grant Daunheimer wrote in a note to clients.

Among the companies initiated were oil and natural gas
producers TriStar Oil and Gas Ltd and ProEx Energy Ltd
, both initiated with a "buy" rating.

Daunheimer's top picks are Iteration Energy Ltd ,
Fairborne Energy Ltd , TriStar Oil and Gas and Vero
Energy Inc .

The following are the ratings and price targets by Dundee
on Canadian oil and natural gas stocks:

Company Name Ratings Price
Targets(C$)

Vero Energy Inc Buy 11.00

Galleon Energy Inc Buy 17.25

ProEx Energy Ltd Neutral 17.50

Rock Energy Inc Buy 5.50

TriStar Oil and Gas Ltd Buy 16.80

Berens Energy Ltd Buy 1.15

Storm Exploration Inc Neutral 16.50

Open Range Energy Corp Buy 4.50

Iteration Energy Ltd Buy 7.25

Disclosure; Long GO.A

GS 126.44, -1.56, -1.2%) is seeking to purchase up to $50 billion in assets from pressured U.S. banks in a move designed to support its push into commercial banking,

http://tinyurl.com/3poj99

Seems to be around the same monthly amount the Fed wants to spend out of that $700b.

(ANF) Abercrombie & Fitch fired-off an RSI buy signal yesterday, I guess. No position.

good morning everyone

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