Washington Mutual, one of the nation's largest banks, and the largest for mortgages, with assets of $307 billion, had been founded in 1889. Its bankruptcy dwarfed the recent failure of IndyMac, which had been the third largest failure with assets of $32 billion.

However, if Fannie and Freddie had been allowed to fail, rather than being put into a “conservatorship,” they would have been far larger bankruptcies. The lesson here is that all banks that were major players in the US mortgage market have destroyed shareholder equity. Count Bear Stearns and Lehman Brothers in that group because they were the major players among the broker-dealers.

Yesterday, with hopes and expectations of a Deal in Washington, the DJIA (+196.89 +1.82% to 11022.06), S&P 500 (+23.31 +1.97% to 1209.18), and NASDAQ Composite (+30.89 +1.43% to 2186.57) were strongly higher. But they had been up much more until late in the session when it was becoming evident to insiders that No Deal would be the case.

Can you image the extent of illegal insider trading that came from the legislators and their staffs who were involved in that White House meeting? These are the same people who tell the public there is a level playing field. Their phone records should be investigated.

In Canada, the Toronto Composite closed up just +0.26% to 12546.5, while the Venture Board dropped -0.64% to 1540.7, after gaining +0.64% on Wednesday. It seems that the traders who are on the Toronto Venture Board are the better day traders.

Earlier today, on the disappointment over No Deal plus the news of the WaMu bankruptcy, Asia-Pacific equity markets dropped down a bit. The losses across the Board were: Australia All-Ords (-0.53% to 4934.6), Shanghai Composite (-0.16% to 2293.8), Hong Kong Hang Seng (-1.33% to 18682.1), India’s Sensex 30 (-3.58% to 13061.5), and the Japanese Nikkei 225 (-0.94% to 11893.2).

The weakness in the India market this week (about -7.0%) had much to do with the inflation concern in the country. The India Report from Astaire this week stated:

YoY wholesale inflation rose 12.14% for the w/e September 13... A
slowing Indian economy badly needs consumer demand lifted… In a move to stem the depreciation of the Indian Rupee, which is down 18% YTD vs an appreciation of 11% in 2007, the Government amended a rule on repatriation of funds raised abroad for infrastructure projects. A limit of US$100m was imposed last year to slow down surging foreign exchange reserves. With falling reserves and a sharply depreciating currency this year, there is now a need to increase reserves. So, the limit has been raised from US$100m to US$500m. The Finance Ministry said the rules required borrowings in excess of US$100m to have a minimum maturity of 7 years…

European bourses, at 8:30am ET, are down -2.0% for the French CAC, the German DAX, and the UK FTSE.

Within the industry groups in NY yesterday, the Financials (XLF +2.8%), Consumer Staples (+2.5%), Energy (+2.5%), and Telecom (IYZ +2.2%) were leaders. The Basic Materials (XLB -0.3%) sector was the only loser.

The oil industry group ($XOI +3.0%) was strong. Goldminers ($XAU -2.9%) were weakest.

Among the stocks of Cara 100 companies, yesterday’s winners were: NKE +9.7%, GE +8.5%, KB +6.8% and VIP/MBT/PBR all up +6.7%. The biggest losers were Canada’s metals and minerals: GG -5.8%, ABX -5.1%, SLW -3.7%, and POT -2.9%. Volumes were very weak as traders awaited the outcome of negotiations in Washington.

The US long bond ($USB) continues to fall (-0.51%), closing at 116.77, from 122.80 a week ago on Thursday at the close. I had warned of a bad week after the Lehman bankruptcy.

The $USD gained +0.11% to 76.99, while the Euro was flat (+0.01%) at 146.14. The Yen and Pound were down and the Loonie up, marginally.

Yesterday, Crude Oil ($WTIC) lost -$0.21/bbl to 105.52. $GOLD futures lost -$17.35/oz to 877.65. Once the political storm has passed, the USD will likely strengthen and commodity prices fall again, for a short while as the Inventionists do their thing, as the broad market equity prices rally. Then reality will set in, and commodity prices will boom and the $USD come under pressure again.

The morning futures (8:40am ET) for Euro, $USD, Crude Oil and DJIA are at: 146.45, 76.93, 105.78, and 10843 (down -175).

Spot prices at 8:40am for gold are 887.70, palladium 232.5, platinum 1143, and silver 13.44. These markets appear to be closely controlled by the Fed at the moment, and prices are under pressure. After the deal is done, I expect them to lift.

---

Comments & Outlook

In all cases of recent bank failures, and throughout history in the US, it was the shareholders (and in some cases the employees) who lost, but the account owners remained whole.

The WaMu failure of last evening was widely predicted, just as had been Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, IndyMac, and Bear Stearns. I called them “toast” before others had the guts to do the same.

Bill Cara: Bill Cara's Community Chat, Thurs., June 12, 2008, 8 ...
How many months ago did I first write the words, “Banks are toast” and “Done like dinner!”? It was mid-March, at least…

But, it was a long time ago, in November 2005, when I started discussing the bad judgment in investing in syndicated mortgages and similar financial products.

Bill Cara: Week #46 (2005-11-19) in Review (Introduction)
Government, Humungous Bank & Broker, Corporate America and Big Media are misleading you .... with US treasuries, which would mean all instruments are toast! ... www.billcara.com/archives/2005/11/week_46_2005111

This blog has been quite a ride for me. I now receive hundreds of letters daily from all over the world. These are serious letters. Yesterday, for example, they came from the senior editor of Barron’s and from the head of investor communications of the SEC, and from too many publishers to mention.

When I started to blog in April 2004, I was concerned about the big picture from the beginning, and was tagged with a perma-bear label. At the time, I said I was just speaking from experience and objectivity. Regardless of what anybody thinks, I am a very private person. I don’t like to be labeled.

In the summer of 2006, I first warned that the normal stock cycle was rolling over, but had been propped back up by Paulson’s Folly. Most people believed in Paulson, which concerned me, so I turned up the heat.

Then in the summer of 2007, I warned that the credit bubble had burst which I could see when the US Retailers hit the wall, and major investment bank hedge funds were shutting down. Few people believed me; the DJIA index went on to set a record high. I started to write my book “Lessons” because I knew people needed to learn for themselves, and stop being misled by more financially sophisticated people.

This morning, regarding my call this week that I turned bullish on equity markets, I received a letter asking me “What are you smoking?” I expected it. I have now come full circle. Still; it’s disappointing.

Successful traders are in the minority; they trade against the order flow and general perceptions of the majority. For that reason, they are both admired and despised. In past years, for me, that would be water off the duck’s back; however, since I started to blog, I took on a mission to show a community how to trade against those who are quick to exploit them, and the weight of this task has been a lot to bear. More than I had imagined when I started down this road.

Yes, the word gravitas has been on my mind a lot lately. I have never felt this about trading before, but TGIF.

Have a great day, if you can, and a better weekend.

---

Links & Charts

---

International Economics Review

US Economic Calendar.

---

Knobias Cara100 Tables

---

Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

At least one RSI value <30:

---

International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

---

Here is the latest session data for the London stock exchange FTSE.

---

Here is the latest session data for the German DAX.

---

Here is the latest session data for the French CAC 40.

---

Here is the latest session data for the Milan Italy stock exchange MIBTEL.

---

Here is the latest session data for the Swiss market index.

---

Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

---

Here is the latest chart for the Japanese Nikkei 225 index.

---

Here is the latest chart for the Singapore index .

---

Here is the latest chart for the Shanghai Composite index .

---

Here is the latest chart for the Hong Kong Hang Seng index .

---

Here is the latest chart for the India BSE 30 index .

---

Here is the latest chart for the Australian All Ordinaries index .

---

US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 15: Dow 30 List

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

---

The Americas

Here is the latest session data for the exchanges of the Americas.

---

Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

---

Here is the latest session data for the Toronto Stock Exchange composite index.

---

Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU XLK SPY . You can also add more ETF’s – up to 30 in total.

For a list of components to any ETF, go to the AMEX.com web site, and click on ETF's.

---

10 (energy: XLE)

Table 2: Senior oil & gas equities

---

15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 13: Senior gold equities

---

20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

---

25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

---

30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

---

35 (healthcare: IYH)

Table 7: Senior healthcare equities

---

40 (financial: XLF)

Table 8: Senior financial company equities

---

45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

---

50 (telecom: IYZ)

---

55 (utilities: XLU)

Table 12: US Utilities

---

International Equity Market USD-denominated ETF Review

Table 14: International equities perspective

---

Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

---

U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Daily data charts:

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

---

Canada's equity market

Here is the Canadian (EWC) equity market ETF Daily data charts:

Interactive EWC Daily data:

Interactive EWC Weekly data:

---

Bonds & Yields Review

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

---

Here is the $USB 30-year Treasury Bond chart.

---

US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

---

Table 11: Interest-sensitive securities

Consumer Finance -USA -- Interactive Daily Data Charts

---

Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

---

Oil Review

Here is the e-miNY Mar-08 Crude Oil chart.

Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

---

Gold & Precious Metals Review

Spot gold chart for the week

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

---

Spot silver chart for the week

Interactive daily data

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

---

Spot platinum chart for the past three days

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

---

Spot palladium chart for the week

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

---

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

---

Table 13: Senior gold equities

To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows:

NEM ABX AU GFI GG HMY AUY KGC BVN
Interactive Daily data
Interactive Weekly data

MDG LIHRY AEM BGO IAG EGO RGLD GOLD CDE GRS
Interactive Daily data
Interactive Weekly data

CBJ SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI
Interactive Daily data
Interactive Weekly data

NXG GSS MNG DROOY MFN RNO RANGY MRB CLG
Interactive Daily data
Interactive Weekly data

---

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

---

Here are the Weekly and Daily Data charts of the indexes:

Interactive Chart of Daily U.S. Goldminers Index:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

---

The U.S. goldminer share trust ETF trades under the ticker symbol GDX.

Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:

GDX Daily data:

GDX Weekly data:

---

The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD. Yes, just like GDX on the AMEX, you can trade XGD on Toronto.

Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:

Interactive Chart of XGD Daily data:

Interactive Chart of XGD Weekly data:

---

Forex Review

Here is the chart of the week's trading in the $USD.

Interactive Chart of Daily U.S. Dollar Index:

---

Interactive Chart of Daily Euro Dollar Index, priced in USD:

---

Daily British Pound Index:

---

Daily Japanese Yen Index:

---

Daily Canadian Dollar Index:

---

Wrap-up